Annual Report 2022 of China Fangda Group Co., Ltd.
China Fangda Group Co., Ltd.
2022 Annual Report
Feb. 2023
1
Annual Report 2022 of China Fangda Group Co., Ltd.
2022 Annual Report
Chapter I 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 Chairman of Board, 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 needs to comply with the disclosure requirements of the
decoration and decoration industry and the real estate industry in the
Guidelines for the Self-discipline and Supervision of Listed Companies of
Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.
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.
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Annual Report 2022 of China Fangda Group Co., Ltd.
The Board meeting reviewed and approved the profit distribution preplan:
distributing cash dividend of RMB0.50 (tax included) for each ten shares to all
shareholders on the basis of 1,073,874,227 shares of the Company and no
dividend share is issued to shareholders. No reserve is capitalized. 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 0.50 (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.
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Annual Report 2022 of China Fangda Group Co., Ltd.
Contents
Chapter I 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 ................................................................................................... 11
Chapter III Management Discussion and Analysis............................................................................................. 13
I. Major businesses of the Company during the report period.................................................................. 13
II. Core Competitiveness Analysis ................................................................................................................ 21
III. Core business analysis............................................................................................................................. 24
IV. Non-core business analysis ...................................................................................................................... 31
V. Assets and Liabilities ................................................................................................................................. 32
VI. Investment ................................................................................................................................................ 34
VII. Major assets and equity sales ................................................................................................................ 37
VIII. Analysis of major joint stock companies ............................................................................................ 38
IX. Structural entities controlled by the Company..................................................................................... 38
X. Future Prospect ......................................................................................................................................... 38
XI. Reception of investigations, communications, or interviews in the reporting period........................ 41
Chapter IV Corporation Governance .................................................................................................................. 43
I. Overview ..................................................................................................................................................... 43
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 ..................................... 43
III. Competition ............................................................................................................................................. 43
IV. Annual and extraordinary shareholder meetings held during the report period .............................. 43
V. Particulars about the Directors, Supervisors, and Senior Management .............................................. 44
VI. Performance of directors during the report period.............................................................................. 49
VII. Special committees under the board of directors during the reporting period ................................ 51
VIII. Performance of Supervisory Committee ............................................................................................ 54
IX. Employees ................................................................................................................................................ 56
X. Profit distribution of the Company and conversion of capital reserve into share capital .................. 57
XI. Share incentive schemes, staff shareholding program or other incentive plans ................................ 58
XII. Construction and implementation of internal control system during the reporting period............ 58
XIII. Management and control of subsidiaries during the reporting period............................................ 58
XIV. Internal control self-evaluation report or internal control audit report .......................................... 58
XV. Rectification of problems in self inspection of special actions for governance of listed companies 60
V. Environmental and social responsibility ......................................................................................................... 61
I. Major environmental problem .................................................................................................................. 61
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Annual Report 2022 of China Fangda Group Co., Ltd.
II. Social responsibilities................................................................................................................................ 62
III. Consolidate and expand the achievements of poverty alleviation and rural revitalization .............. 62
Chapter VI Significant Events .............................................................................................................................. 64
I. Performance of promises ........................................................................................................................... 64
II. Non-operating capital use by the controlling shareholder or related parties in the reporting term . 64
III. Incompliant external guarantee ............................................................................................................. 64
IV. Description of the board of directors on the latest "non-standard audit report" .............................. 64
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 .. 64
VI. Description of changes in accounting policies, accounting estimates or correction of major
accounting errors compared with the financial report of the previous year ............................................ 64
VII. Statement of change in the financial statement consolidation scope compared with the previous
financial report............................................................................................................................................... 65
VIII. Engaging and dismissing of CPA ........................................................................................................ 65
IX. Delisting after disclosure of annual report ............................................................................................ 66
X. Bankruptcy and capital reorganizing ..................................................................................................... 66
XI. Significant lawsuit and arbitration ........................................................................................................ 66
XII. Punishment and rectification ................................................................................................................ 66
XIII. Credibility of the Company, controlling shareholder and actual controller ................................... 66
XIV. Material related transactions ............................................................................................................... 67
XV. Significant contracts and performance................................................................................................. 68
XVI. Other material events ........................................................................................................................... 74
XVII. Material events of subsidiaries .......................................................................................................... 75
Chapter VII Changes in Share Capital and Shareholders ................................................................................. 76
I. Changes in shares ....................................................................................................................................... 76
II. Share placing and listing .......................................................................................................................... 78
III. Shareholders and the substantial controller of the Company ............................................................. 78
IV. Specific implementation of share repurchase in the reporting period ................................................ 82
Chapter VIII Preferred Shares ............................................................................................................................. 83
Chapter IX Information about the Company's Securities ................................................................................. 84
Chapter X Financial Statements .......................................................................................................................... 85
I. Auditor's report .......................................................................................................................................... 85
II. Financial statements ................................................................................................................................. 92
III. General Information ............................................................................................................................. 108
IV. Basis for the preparation of financial statements................................................................................ 109
V. Significant Account Policies and Estimates ........................................................................................... 110
VI. Taxation .................................................................................................................................................. 174
VII. Notes to the consolidated financial statements .................................................................................. 177
At the end of the period, the total amount of bills payable due and unpaid was RMB1,622,493.59 , 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. ....................................................... 202
VIII. Change to Consolidation Scope ......................................................................................................... 223
IX. Equity in Other Entities ........................................................................................................................ 223
X. Risks of Financial Tools .......................................................................................................................... 226
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Annual Report 2022 of China Fangda Group Co., Ltd.
XI. Fair Value ............................................................................................................................................... 232
XII. Related Parties and Transactions ....................................................................................................... 233
XIII. Contingent events ............................................................................................................................... 238
XIV. Post-balance-sheet events ................................................................................................................... 242
XV. Other material events ........................................................................................................................... 242
XVII. Notes to Financial Statements of the Parent ................................................................................... 244
XVIII. Supplementary Materials ............................................................................................................... 249
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Annual Report 2022 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 2022 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)
Fangda Lifu Investment Refers to Shenzhen Lifu Investment Co., Ltd
Fangda Xunfu Investment Refers to Shenzhen Xunfu Investment Co., Ltd
Shenzhen Fangda Yunzhu Technology
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 2022 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 2022 of China Fangda Group Co., Ltd.
IV. Registration changes
Organization code None
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 Xie Peiren, Zeng Hui, 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
2022 2021 Increase/decrease 2020
Turnover (yuan) 3,846,975,948.44 3,557,724,397.54 8.13% 3,000,191,773.63
Net profit attributable
to shareholders of the 282,933,854.32 222,168,142.53 27.35% 389,344,290.74
listed company (yuan)
Net profit attributable
to the shareholders of
the listed company and
270,965,220.96 167,650,395.54 61.63% 376,968,729.62
after deducting of non-
recurring gain/loss
(yuan)
Net cash flow
generated by business 221,211,632.30 -63,425,296.29 448.78% 554,967,948.96
operation (yuan)
Basic earnings per
0.26 0.21 23.81% 0.35
share (yuan/share)
Diluted Earnings per
0.26 0.21 23.81% 0.35
share (yuan/share)
Weighted average net
5.03% 4.09% 0.94% 7.37%
income/asset ratio
Increase/decrease from
End of 2022 End of 2021 End of 2020
the end of last year
Total asset (yuan) 12,745,185,294.02 12,261,338,518.66 3.95% 11,891,623,391.03
Net profit attributable
5,749,940,874.92 5,524,039,886.94 4.09% 5,392,694,939.64
to the shareholders of
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Annual Report 2022 of China Fangda Group Co., Ltd.
the listed company
(RMB)
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 651,720,353.86 961,342,961.44 1,003,211,765.08 1,230,700,868.06
Net profit attributable
to the shareholders of 43,891,930.78 68,793,342.99 101,410,271.52 68,838,309.03
the listed company
Net profit attributable
to the shareholders of
the listed company and 39,236,476.80 65,881,098.22 89,949,879.19 75,897,766.75
after deducting of non-
recurring gain/loss
Cash flow generated by
business operations, -304,745,092.98 -1,835,700.06 97,245,314.13 430,547,111.21
net
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
□ Yes No
IX. Accidental gain/loss item and amount
Applicable □ Inapplicable
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Annual Report 2022 of China Fangda Group Co., Ltd.
In RMB
Item 2022 2021 2020 Notes
Non-current asset disposal gain/loss
(including the write-off part for which -1,421,880.09 -2,291,048.05 -541,838.10
assets impairment provision is made)
Government subsidies accounted into
current gain/loss account, other than
those closely related to the Company's
10,138,362.96 12,459,417.63 12,872,885.30
common business, comply with the
national policy and continues to enjoy
at certain fixed rate or amount.
Capital using expense charged to non-
financial enterprises and accounted into 8,619,807.35
the current income account
Net gain between the beginning and
merger day of subsidiaries generated
18,912.61 7,705,820.11
by merger of companies under
common control
Gain/loss from change of fair value of
transactional financial asset and
liabilities, and investment gains from
disposal of transactional financial
4,666,147.76 8,060,481.70 8,759,056.18
assets and liabilities and sellable
financial assets, other than valid period
value instruments related to the
Company's common businesses
Write-back of impairment provision of
receivables for which impairment test 6,138,338.91 31,951,043.05
is performed individually
Gain/loss from commissioned loans 393,485.98
Gain/loss from change of fair value of
investment property measured at fair -10,095,973.89 20,921,813.65 19,205,841.18
value in follow-up measurement
Other non-business income and
-2,764,570.20 -3,897,195.15 -34,752,456.16
expenditures other than the above
Less: Influenced amount of income tax 3,172,419.69 12,358,051.51 778,490.70
Influenced amount of minority
139,179.75 347,626.94 488,742.67
shareholders' equity (after-tax)
Total 11,968,633.36 54,517,746.99 12,375,561.12 --
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
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 2022 of China Fangda Group Co., Ltd.
Chapter III Management Discussion and Analysis
I. Major businesses of the Company during the report period
Since its conception, the company has always adhered to the philosophy "technology-based, innovation-based", and has
constantly increased R&D investment, and build smart curtain wall, photovoltaic building integrated curtain wall (BIPV), PVDF
aluminum veneer, rail transit screen door system and other products into the global industry benchmark. The comprehensive
competitiveness of Fangda intelligent curtain wall ranks among the top three in the industry, and the platform screen door system
of rail transit is recognized as the "champion product of manufacturing industry" by the Ministry of Industry and Information
Technology. During the reporting period, the industrial product standard Platform Screen Doors for Urban Rail Transit (CJ/T236-
2022), edited by Fangda Zhiyuan Science and Technology, was officially approved and released by the Ministry of Housing and
Urban-Rural Development of the People's Republic of China. At present, the Company has 7 national high-tech enterprises, 6
"specialized, special and new" enterprises, and 2 provincial engineering technology research centers. It has formed an industrial
layout with Shenzhen as its headquarters, Dongguan, Foshan, Nanchang, Shanghai, and Chengdu as its manufacturing bases. It has
set up branches in Singapore, India, Australia, Bangladesh, Hong Kong, and other countries and regions along the "the Belt and
Road". It is a high-tech enterprise integrating research and development, production, sales, and services. Fangda trademark was
named a "China Famous Trademark" and won "International Credit Brand".
In 2022, in the face of adverse effects such as shrinking demand, weakening expectations, fluctuations in raw material prices,
repeated changes in the epidemic situation, and turbulence in the external environment, under the leadership of the Company's
Board of Directors and management team, and through the joint efforts of all employees, the Company completed the 2022
business objectives. During the reporting period, the Company achieved operating income of RMB3,846,975,900, an increase of
8.13% over the same period of the previous year; the net profit attributable to the parent Company's owner was RMB282,933,900,
an increase of 27.35% over the same period of the previous year. Net profit after recurring gains and losses was RMB270,965,200,
an increase of 61.63% over the same period of the previous year. By the end of the reporting period, the Company's order reserve
reached RMB7,887,702,400 (excluding real estate pre-sale). This represents an increase of 12.87% over the same period in the
previous year, which was 2.05 times the operating income in 2022 H1, laying the foundation for the Company's production and
operation in 2023.
(I) Smart curtain wall system and material
1. Industry development
The development of the building curtain wall industry is closely related to the development of the national economy. The
Central Economic Work Conference in December 2022 put "efforts to expand domestic demand" at the top of the economic work
in 2023. With the introduction of the State Council's Strategic Plan for Expanding Domestic Demand (2022-2035) and the
"Fourteenth Five-Year Plan" to expand domestic demand, the adjustment of domestic epidemic prevention and control measures,
provinces across the country have successively released plans for major projects in 2023 and set investment growth targets. After
the Spring Festival in 2023, the country has accelerated the resumption of work and production, and the construction progress of
major projects will be accelerated. The building curtain wall industry will also usher in new development opportunities.
2. Business Status
(1) Main products and purposes
Smart curtain walls are among the Company's major products and have been widely used in high-end office buildings,
corporate headquarters, urban complexes, high-end residences and hotels, urban public buildings, and other applications.
By focusing on intelligence, low-carbon, environmental protection, and sustainability, the smart curtain wall and material
industry fosters the development of curtain walls and innovative materials in China. The Company has a strong R&D capability as
well as a sophisticated PVDF aluminum veneer production and manufacturing base. The intelligent curtain wall technology has
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Annual Report 2022 of China Fangda Group Co., Ltd.
been widely deployed in significant projects in more than 160 cities around the world, integrating energy reduction, environmental
protection, and intelligence. It has numerous times received the Luban Award (National Excellent Engineering Award), China's
highest construction award. Its competitiveness is among the highest in the world, and it is a well-known brand in the worldwide
high-end curtain wall business.
(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 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, construction
and installation 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.
(3) Market competition pattern in which the Company is located and the Company's market position
The domestic building curtain wall market has increasingly grown in recent years, and industry competition has increased.
The market gradually eliminates small and medium-sized firms with limited scale and low qualifications, increasing industry
concentration. The industry's leading businesses are increasing their market share in the high-end curtain wall market through
management and brand advantages, and the rate of development is likely to accelerate further. 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.
Fangda Jianke Co., Ltd. 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 one of the leaders in China's curtain wall industry. Fangda Jianke has won the
highest awards in the national construction industry, including "Luban Award", "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 20 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. In the industry across the country, the Company is the earliest to establish R&D institutions
such as corporate postdoctoral workstations, engineering technology centers, and research and design institutes. The autonomous
innovation capacity and technical level of the high-end curtain wall industry have reached the advanced level of the same industry
in China, promoting technological progress and development.
(4) Business drive
In period During the, the curtain wall system and materials industry realized operating income of RMB2,877,126,200, an
increase of 11.31% over the same period of the previous year; the net profit was RMB154,800,800, an increase of 140.60%； with
a gross margin of 17.73%, up 3.24 percentages over the same period of last year. The key drivers of performance are as follows:
① Actively plan the market layout, and the order reserve continues to grow
In 2022, under the severe and complex environment, the company actively planned the market layout of high-end curtain
walls at home and abroad, and deeply cultivated key regions and overseas projects such as the Greater Bay Area of Guangdong,
Hong Kong and Macao, the Yangtze River Delta, and Chengdu and Chongqing. With the technology accumulation and brand
advantages, the number of new bid winning and signed orders reached RMB4,838,168,800, and the number of large landmark
projects and enterprise headquarters projects increased. The number of large orders of 100 million yuan was frequent, and overseas
orders also reached a record high. Among them, the signing of major landmark projects, such as the high-end office building of
more than 300 meters - Jinan CITIC Pacific Central Business District (Jinan Zun) project, the permanent site project of the
Guangzhou Nansha International Financial Forum (IFF), and the Yunsongjian project in Qujiang, Xi'an, has further improved the
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Annual Report 2022 of China Fangda Group Co., Ltd.
recognition and social influence of the industry. With the signing of a large number of corporate headquarters projects, such as
Anbang Property Insurance Shenzhen Headquarters Building, Shenzhen Youbixuan Robot Building, China Electronics Shenzhen
Bay Super Headquarters Building, Shenzhen Zhongjin Building, ByteDance Shenzhen Headquarters Building, Shenzhen
Chuangjin Hexin Headquarters Building, and Guangzhou CCCC South Headquarters Base Area C project, the advantages of the
Company's leading enterprises have been further highlighted. In 2022, the Company promoted the layout of the international
market, and the overseas order volume rose against the trend. It won the orders for the WPH Hospital Project, VMCTC Project,
Seafarers and other projects in Melbourne, Australia, highlighting the high recognition of the other big brands in the overseas
market. By the end of the reporting period, the Company's order reserve of high-end curtain wall system and materials industry
was RMB6,448,575,400, an increase of 19.36% over the same period of the previous year, which was 2.24 times the operating
revenue of curtain wall system and materials industry in 2022, laying a solid foundation for the sustainable and healthy
development of the Company.
②Strengthen continuous innovation and empower the Company's high-quality development
The six subsidiaries of the Company engaged in smart curtain wall system and material industry are all national high-tech
enterprises, five of which are "specialized and new" enterprises, and have been awarded the honors of "National Intellectual
Property Advantage Enterprise", "Specialized" Little Giant "Enterprise," Jiangxi Intelligent Manufacturing Benchmark Enterprise
", and enterprise innovation record. By the end of the reporting period, the Company has successively obtained 598 patented
technologies for curtain wall products, 19 software copyrights, and participated in the preparation of 22 national/industrial
technical specifications and standards, effectively promoting the technical progress and development of the high-end curtain wall
industry. During the reporting period, the Company used continuous innovation to solve customer technical pain points and supply
products and technical solutions required by innovation. At the same time, the company offered technical support for the project
duration and quality, improved customer satisfaction and influence, and assisted and empowered the Company's high-quality
development with the whole process and all-around curtain wall project service system.
③Promote digital construction and improve management and operation efficiency
With the rapid development of the new generation of information technology such as cloud computing, big data, artificial
intelligence, etc., the Company actively promotes digital construction, taking the whole process of fine control as the main line,
and strives to achieve cost reduction, efficiency increase, quality improvement, innovation, and create an efficient management
and operation organization. During the reporting period, the Company integrated cutting-edge information technologies such as
BIM, cloud computing, mobile Internet, and improved the precise management and sharing of data flow, capital flow, and
information flow by upgrading and optimizing the existing information management platform, improving the scientific nature of
decision-making, and improving the company's management level and operational efficiency.
(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.
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.
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Annual Report 2022 of China Fangda Group Co., Ltd.
Control measures: The Company has established complete and effective quality control measures and quality management
organization, introduced digital information management, and digitally coded the company's businesses, various raw materials,
factory workshop and construction site operation procedures through computer information integration system, The eight systems
(CRM customer relationship management system, OA office system, HR human resources system, ERP financial management
system, MES production management system, PMS engineering management system, VPO supply management system and QAS
quality safety management system) realize the rapid transmission, sharing and collaborative application of information through
cloud terminal technology. 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
As an important part of high-end manufacturing equipment, rail transit equipment is closely related to the national economic
development, urban rail transit development and construction planning. With the deepening of strategic objectives such as the "the
Belt and Road" construction, "new infrastructure" and "double carbon", China's urban rail transit industry has broad development
opportunities and huge market space. In December 2022, the State Council issued the Outline of the Strategic Plan for Expanding
Domestic Demand (2022-2035), which required to accelerate the construction of transportation infrastructure, support key urban
agglomerations to take the lead in building the intercity railway network, promote the development of metropolitan (suburban)
railways and urban rail transit in key metropolitan areas, and integrate the development with trunk railways. 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. While the mileage of rail transit lines continues to grow, some rail transit PSD
projects built in the early stage have also entered the maintenance period, and the maintenance service business will also usher in
sustained and stable development space in the future.
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 taken the lead in the world in successfully developing the platform safety door system that
can be applied to the complex environment of high-speed railway, and can realize the intelligent opening of the platform safety
door according to the different models of high-speed railway entering the station. At present, the Company is in the stage of
market promotion and verification, and has not yet realized external sales.
(2) Main business model
The Company's rail transit screen door equipment industry is independently operated by Fangda Zhiyuan Technology, and
has formed a relatively mature and complete management system for research and development, procurement, production and
sales, with a complete industrial chain. In terms of research and development, Fangda Zhiyuan Technology has formed a research
and development project initiation mechanism that combines independent basic research with project needs; In terms of
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Annual Report 2022 of China Fangda Group Co., Ltd.
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.
(3) Market competition pattern in which the Company is located and the Company's market position
The Company is one of the national high-tech enterprises engaged in the R&D, design, manufacture, installation, and
operation and maintenance of the platform screen door system of subway in China. It has taken the lead in drafting and revising
the first national industrial standard of the platform screen door of rail transit, "Platform Screen Door of Urban Rail Transit"
(CJ/T236-2022). The Company's safety door product of urban rail transit platform was awarded "single champion product of
manufacturing industry" by the Ministry of Industry and Information Technology of the People's Republic of China. Fangda
Zhiyuan has successively won many honors and qualifications, such as the Guangdong Provincial Science and Technology Award,
the National Key New Product Certificate, the National Torch Plan Industrialization Demonstration Project Certificate, the
Guangdong Intelligent Rail Transit Platform Gate Engineering Technology Research Center, the Shenzhen Science and
Technology Progress Award, and the Shenzhen "Specialization and Innovation" Enterprise title.
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. At the same time, the Company has continued to explore foreign markets by virtue of its
technical advantages, and has successively obtained orders for subway platform screen door systems from Singapore, Thailand,
Malaysia, India, Colombia and other countries. Up to now, the company has undertaken more than 100 subway platform door
projects in the world, with a total of more than 80000 platform door units, and has become one of the global suppliers of platform
screen door systems for urban rail transit.
(4) Business drive
①Win the trust of customers at home and abroad with excellent technical quality
As a leading enterprise in the field of rail transit screen doors in China, the Company provides customers with integrated
professional services of rail transit screen door system products including research and development, design, manufacturing,
installation and commissioning, technical services and maintenance. The products and technologies have been applied to more
than 100 subway lines in more than 40 cities, including Beijing, Tianjin, Guangzhou, Shenzhen, Hong Kong, Singapore, etc., with
safety, reliability and availability With outstanding advantages such as maintainability, it is one of the most trusted experts of rail
transit PSD system for customers at home and abroad. During the reporting period, the Company obtained orders for PSD system
such as Wuhan Optics Valley Ecological Corridor tourism supporting facilities - tourism special line phase I project, Shenzhen
line 7 phase II, line 8 phase II and phase III projects, souther extention line of Shenyang Metro Line 2, India NCRCTC project,
Singapore Santosha platform door installation project, Colombia Bogota Metro Line 1 project, as well as a number of orders for
professional technical maintenance services for PSD metro projects in cities including Shenzhen, Wuhan, Chengdu and Tianjin.
Among them, the order for PSD system of Bogota Metro Line 1 in Colombia is the Company's first project in Latin America, and
also the first rail transit project in Bogota, the capital of Colombia. The signing of the project contributes to the Company's efforts
to help China and Latin America build the "the Belt and Road" and build a new development pattern of "double circulation".
During the reporting period, the Company's rail transit PSD industry had achieved an operating revenue of RMB564,551,700,
an increase of 5.66% from the same period last year, and an order reserve of RMB1,439,127,000, which was 2.55 times of the
operating revenue. The Company's PSD system products have also been highly praised and recognized by many owners for their
excellent quality and stable performance. During the reporting period, Fangda Zhiyuan Science and Technology received letters of
praise from Shenzhen Metro Construction Group Co., Ltd. and Qingdao Metro Line 4 Co., Ltd., and won the "high-quality
supplier" of Hohhot Metro Operation Co., Ltd., and the "advanced cooperative unit" of Tianjin Metro Line 3 Operation Co., Ltd
"Excellent Outsourcing Unit Award" of Chengdu Metro Operation Co., Ltd. Operation Branch 1, "Excellent Outsourcing
Maintenance Project" of Wuhan Wuhan Railway Travel Service Media Co., Ltd. Customer Service Maintenance Branch.
②Promote high-quality development of the Company with scientific and technological innovation
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Annual Report 2022 of China Fangda Group Co., Ltd.
The Company has been deeply engaged in the subdivided field of rail transit screen door system for 20 years, and has realized
that the core control components of platform screen door products are completely "independent and controllable", leading the
industry to break through the tight encirclement and lead the high-quality innovative development of the industry. The Company's
"safety door of urban rail transit platform" product with independent intellectual property rights has been recognized by the
Ministry of Industry and Information Technology of the People's Republic of China as "single champion product of manufacturing
industry". The Company also actively integrates the development achievements of the new generation of information technology,
such as artificial intelligence and big data technology, and has successively developed the platform screen door system matching
the "driverless" train, and the platform screen key component health prediction technology based on big data, which has been
successfully applied in many projects, such as the Noida project in India, the domestic Jinan Metro Line 2, and Qingdao Metro
Line 4. During the reporting period, the subsidiary Fangda Zhiyuan Technology was identified as a "specialized and innovative"
small and medium-sized enterprise, and was selected as the "Top 100 leading enterprises in Shenzhen industry" for four
consecutive years. The visual multimedia full-height platform door project of urban rail transit developed by Fangda Zhiyuan
Technology was identified as the "innovation record of Shenzhen enterprises". The industry product standard "Platform Screen
Door of Urban Rail Transit" (CJ/T236-2022) edited by the Ministry of Housing and Urban-Rural Development was officially
approved and released, and will be implemented from May 1, 2022.
(3) New energy industry
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.
(IV) Real Estate
1. Changes of macroeconomic situation and industrial policy environment related to the real estate industry;
industrial development status and policies of the city where the Company's main projects are located, and its impact on the
future operating performance and profitability of the listed company;
At the end of 2022, the real estate policy entered a comprehensive easing cycle, and the financing policies such as credit
support, bond financing support, equity financing support, domestic guarantee and foreign loan continued to be relaxed. The hot
cities actively rescued the demand side of the real estate market, and improved the strong policy support. The relevant departments
also released space for local city-specific policies while increasing the policy loosening efforts. In particular, the Central Economic
Work Conference held in December 2022 proposed that the economic work in 2023 should focus on expanding domestic demand
and ensuring the stable development of the real estate market. The implementation of policies in cities, support for rigid and
improved housing demand, etc., all indicates that the future expectations of the real estate market are improving.
The Company's real estate projects are in Shenzhen and Nanchang. Shenzhen's market remains relatively concentrated in
terms of popularity and demand. Construction of the Guangdong Hong Kong Macao Bay area has been further promoted.
Shenzhen's strong development trend will be recognized by more investors as a special economic zone and a leading
demonstration area. According to the "City of Opportunity 2022" report jointly released by the China Development Research
Foundation and PricewaterhouseCoopers, Shenzhen ranks first in China in the fields of "technology and innovation" and "business
environment". Shenzhen's positive image of being livable, suitable for business and business has been more recognized, and its
urban charm and influence projection are becoming stronger and wider.
In 2022, affected by the epidemic and economic downturn, the supply and demand of Nanchang real estate market declined
significantly, and the consumption of commercial housing market was weak, but the market has entered the end of the adjustment
period. Looking forward to 2023, under the conditions of loose policies and domestic macroeconomic recovery, the real estate
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Annual Report 2022 of China Fangda Group Co., Ltd.
market transactions will improve. In the medium and long term, the Nanchang real estate market will generally show a trend of
stabilizing sales and prices.
The Company's real estate business is still expected to contribute to the Company's profits.
2. The Company's main business model, business project format, market position and competitive advantage, main
risks and countermeasures
The Company's real estate business mainly adopts the business model of self-development, partial sales and partial self-
supporting. At present, the Company develops, sells, and leases mainly office, commercial, and apartment properties. After years
of unremitting efforts, the Company has acquired a wealth of experience in real estate development and operation, as well as
operating and managing its commercial and residential properties through its own professional staff.
At present, the real estate projects operated by the Company are in Shenzhen and Nanchang.
Shenzhen is located in the core area of Guangdong, Hong Kong and Macao Dawan district.The Company's Shenzhen Fangda
Town project has a rapid sales and leasing rate and has been highly recognized by the Shenzhen market. At the end of the
reporting period, the sales rate of Shenzhen Fangda Town project was 98.32%, and the leasing rate of self owned properties was
78.41%. However, due to the large inventory of commercial office buildings in Nanchang and the downward trend of volume and
price, the sales has slowed down. At the end of the reporting period, the sale rate of Nanchang Fangda Center project was 38.90%,
and the occupancy rate of self-owned properties was 82.26%.
The Company's real estate industry will still face risks such as national macro policy regulation, and market competition in
the future. The Company will comply with policy changes, continue to in-depth optimization in brand building, marketing and
promotion, reduce operational and management risks, and maintain the Company's steady development.
3. New land reserve projects
Equity
Total land
Parcel or considerati
Land Land area Building Obtaining Interests price (ten
project Purpose on (ten
location (m2) area (m2) method percentage thousand
name thousand
yuan)
yuan)
No
4. Total land reserve
Total building area (10,000 Remaining building area
Project/region name Floor area (10,000 m2)
m2) (10,000 m2)
No
5. Main production development status
Accu
Estim
mulat
Total ated
Planni Area ed
Devel area total
Intere ng compl total
Projec Land Starti opme Comp Land compl invest
City/r Projec sts constr eted invest
t locati ng nt letion area eted ment
egion t form perce uction in this ment
name on time progre rate (m2) in this (in
ntage area phase (in
ss phase RMB
(m2) (m2) RMB
(m2) 10,00
10,00
0)
0)
Shenz
Office
hen No.2
Fangd comm May
Nansh Longz 100.0 100.0 35,39 212,4 217,7 258,5 283,6
a ercial 1, 100% 0
an hu 4th 0% 0% 7.60 00.00 63.69 00 00
Town compl 2014
Distri Road
ex
ct
Hong Fangd No.15 Office 100.0 May 100% 100.0 16,60 66,43 0 65,37 67,00 66,99
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Annual Report 2022 of China Fangda Group Co., Ltd.
gutan a 16 comm 0% 1, 0% 8.55 2.61 6.94 0 2.35
New Cente Ganji ercial 2018
Distri r ang compl
ct, North ex
Nanch Avenu
ang e
Fangd
a
Cente
r
6. Main project sales
Amou
nt of Settle
Cumul Pre- pre- Settle ment
Cumul
ative sale sale ment amoun
Interes ative
Land Sellabl pre- (sales) (sales) area in t in
City/re Project Project ts Buildi settlem
locatio e area sale area in in the the this
gion name form percen ng area ent
n (m2) (sales) this current current period
tage area
area period period period (RMB
(m2)
(m2) (m2) (RMB (m2) 10,000
10,000 )
)
Shenz
Office
hen No.2
Fangd comm
Nansh Longz 100.00 212,40 93,086 91,524 2,827. 14,484 91,524 2,827. 14,484
a ercial
an hu 4th % 0.00 .25 .39 66 .72 .39 66 .72
Town compl
Distric Road
ex
t
No.15
16
Hongg
Ganjia
utan Office
ng
New Fangd comm
North 100.00 65,376 25,996 10,111 2,557. 3,355. 10,111 2,557. 3,355.
Distric a ercial
Avenu % .94 .84 .83 44 49 .83 44 49
t, Center compl
e
Nanch ex
Fangd
ang
a
Center
7. Main project lease
Interests Leasable area Cumulative Average
Project name Land location Project form
percentage (m2) leased area (m2) lease ratio
Shenzhen
Shenzhen Fangda Commercial and
Nanshan 100.00% 95,293.23 74,719.03 78.41%
Town office building
District
Shenzhen
Shenzhen Fangda
Nanshan Office building 100.00% 17,725.36 14,074.37 79.40%
Building
District
Jiangxi Nanchang Nanchang,
Plant and office
Science and Jiangxi 100.00% 17,517.20 11,349.20 64.79%
building
Technology Park Province
Nanchang,
Jiangxi Nanchang Commercial and
Jiangxi 100.00% 37,270.58 30,658.05 82.26%
Fangda Center office building
Province
8. First-level development of land
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Annual Report 2022 of China Fangda Group Co., Ltd.
□ Applicable Inapplicable
9. Financing channel
Ending Term structure (monetary unit: RMB10,000)
Financing financing Financing cost range /
source balance (in average financing cost Within 1
1-2 years 2-3 years Over 3 years
RMB10,000) year
During the same period, the
benchmark interest rate of
Bank loan 133,350.00 7,000.00 17,650.00 21,200.00 87,500.00
the loan was adjusted at the
agreed rate to 5.715%
Total 133,350.00 7,000.00 17,650.00 21,200.00 87,500.00
10. Development strategy and operation plan in next year
With the continuous easing of the real estate policy, the gradual improvement of the epidemic situation and the economic
recovery, Shenzhen, as the core city of the Greater Bay Area of Guangdong, Hong Kong and Macao, not only has the advantages
of the Bay Area, but also is the driving force for the development of the surrounding economy. Shenzhen's good environment for
living, industry and business will further stimulate the vitality and potential of investment. In the future, the Company will grasp
opportunities, continue to expand the brand effect, deepen the local market, and effectively improve the Company's operating
performance.
The main task of the Company's real estate business in 2023 is to increase the rental rate and final sales of the Shenzhen
Fangdacheng project, and vigorously promote the sales of the Nanchang Fangda Town project. At the same time, the Company
will also integrate and optimize the Company's existing resources according to the latest policies, and steadily promote the
application and approval of two urban renewal projects, Shenzhen Henggang Dakang Project and Shenzhen Fuyong Fangda
Bangshen.
11. Bank mortgage loan guarantee provided for commercial housing purchasers
Applicable □ Inapplicable
As of December 31, 2022, the balance of the company's guarantee for commercial housing offenders due to bank mortgage
loans was RMB20,114,100.
12. Co-investment between Directors, supervisors and senior management and listed companies
□ Applicable Inapplicable
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 subsidiaries engaged in the smart curtain wall system and material industry are all
national high-tech enterprises, five subsidiaries are selected as "specialized, special and innovative" enterprises, and many
subsidiaries are recognized as "Guangdong Intellectual Property Demonstration Enterprise", "Shenzhen Intellectual Property
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Annual Report 2022 of China Fangda Group Co., Ltd.
Advantage unit", "Jiangxi enterprise technology center" and "Nanchang engineering technology research center". The Company's
independent innovation and continuous innovation have created the Company's leading technical level and manufacturing capacity.
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 has vigorously promoted intelligent construction and fine management in various business modules,
effectively improved the quality of products and services and enhanced the competitiveness of the Company. BIM Technology,
PMS project management platform, MES production management system, VPO supply management platform and other
information management tools are applied to curtain wall design, manufacturing and construction management, combined with
cloud computing, big data, mobile application, Internet of things and other technologies to realize the rapid transmission and
sharing of information, collaborative application, open up various management modules, improve the scientificity and efficiency
of decision-making, speed up the response and execution ability of business, and improve the fine management.
3. Brand equity
Since its establishment, the Company has gained high recognition from the industry and many professionals by virtue of its
technical advantages and comprehensive service strength, and has 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. During the reporting period, the Shenzhen University of Technology
project of the curtain wall system contracted by Fangda Jianke was selected for the 2021-2022 China Construction Engineering
Decoration Award, and the Shenzhen Hanjing Center and Chongqing Raffles Plaza projects contracted by Fangda Jianke were
selected for the 2022 International High-Rise Award.
4. Industrial layout advantages
After years of accumulation and continuous investment in facilities and equipment, the intelligent curtain wall system and
material industry of the Company has built a domestic industrial layout with Shenzhen as the headquarters and production bases in
Shanghai, Chengdu, Nanchang, Dongguan, Foshan and other places. Among them, Dongguan Songshanhu base is one of the most
modern high-end curtain wall system production bases in the industry, It has industry-leading R&D, design, manufacturing and
curtain wall system delivery capabilities. The Company's production base continues to increase digital and intelligent construction,
introduces intelligent equipment, and uses Internet technology to track the Company's products and continuously improve
efficiency. In order to meet the needs of the Company's future operation and development, the company plans to invest in the
construction of a low-carbon intelligent manufacturing base in Ganzhou. The improved production base layout provides an
important guarantee for improving the market share and comprehensive 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 management and operation team. After years of
development, the Company has an experienced senior management team and middle-level managers with strong execution ability,
as well as a complete talent training system and talent reserve. 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
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Annual Report 2022 of China Fangda Group Co., Ltd.
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 importance to technological innovation, and has taken the lead in developing the rail
transit screen door system with independent intellectual property rights in China, breaking the monopoly of foreign enterprises in
the field of rail transit screen doors in China. After years of continuous engineering practice and technological innovation, the
Company has accumulated technical reserves in the promotion and application of product technology. 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. The "platform safety door of urban rail transit" of
Fangda Zhiyuan Technology was recognized as the "single champion product of manufacturing industry" by the Ministry of
Industry and Information Technology. Fangda Zhiyuan Technology was selected as the "specialized and new" enterprise in
Shenzhen, and took the lead in drafting the first industrial standard of "platform safety door of urban rail transit" in China. The
project of visual multimedia full-height platform door of urban rail transit developed by Fangda Zhiyuan Technology was
recognized as the "innovation record of Shenzhen enterprises". It shows the continuous comprehensive leading strength and
industry benchmark position of Fangda 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. From DCU and other core components to control algorithms, 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 safety door products applied to high-speed railway platforms. Its main competitiveness is that it can adapt to a variety
of trains with different body specifications and different door opening positions. In the future, this product can be applied to high-
speed railway platform and intercity railway platform in a large scale.
2. Market advantage
The Company is the pioneer and leader of the platform screen door system for rail transit in China, and its platform screen
door system products cover more than 50% of the cities with urban rail transit in China. As part of the "Belt and Road Initiative,"
the Company has successfully received important project orders in Singapore, Malaysia, Thailand, India and other countries and
regions along the way. The Company won the first order for the Bogota Metro Line 1 project in Colombia during the reporting
period as a result of its extensive experience in overseas project implementation and strong market brand awareness. The
Company also successfully implemented the development concept of "going out" of Chinese equipment during the reporting
period. The recognition of Fangda brand overseas has been increasing, and it has become the largest manufacturer and service
provider of rail transit screen door system in the world.
The operation and maintenance of rail transit have high requirements for the safety and reliability of products and equipment.
The Company's leading technology, reliable product quality and efficient service have won a good market reputation, maintained a
stable cooperative relationship with customers and accumulated rich market resources.
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Annual Report 2022 of China Fangda Group Co., Ltd.
3. 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 operation and maintenance management service team has now spread to more than 30 cities around the world. With the
improvement of the team's ability and the recognition of customers, the Company's sales amount of technical services will also
increase year by year.
4. Professional and stable team
The Company has a technical talent team of rail transit PSD system with stable structure and excellent professional ability.
The core technical team of the Company has outstanding professional and technical level, including highly educated personnel
such as master's degree and senior professional and technical personnel such as senior engineers. Its specialties cover mechanical
engineering, electrical, system reliability, railway communication, software, engineering mechanics and other fields. The average
age of the key personnel of the management and R&D team is more than 7 years, showing high stability, having a common
business philosophy, and being able to effectively form consensus on various issues and implement them. At the same time, the
management 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 mainly focuses on the development of new energy-saving technology applications such
as solar photovoltaic application and photovoltaic building integration (BIPV), and its business scope covers two major industries:
construction and photovoltaic power generation. The Company actively developed solar photovoltaic power generation curtain
wall system technology 20 years ago. It is one of the earliest enterprises in China that independently mastered and had independent
intellectual property rights to engage in the design, manufacturing and integration of solar photovoltaic building integration (BIPV)
system.
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, the Company has more than 20 years' experience in
electrical product integration. The Company also has more than 30 years' experience in construction management and has the
level-1 construction curtain wall engineering qualification and electrical installation engineering qualification.
(IV) Real Estate
The Company is located in the core area of Dawan District, Guangdong, Hong Kong and Macao. It adopts differentiated
competition strategy and focuses on the development of 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 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.
24
Annual Report 2022 of China Fangda Group Co., Ltd.
2. Income and costs
(1) Turnover composition
In RMB
2022 2021
Proportion in YOY change
Proportion in (%)
Amount operating costs Amount
operating costs (%)
(%)
Total turnover 3,846,975,948.44 100% 3,557,724,397.54 100% 8.13%
Industry
Metal production 2,877,126,181.59 74.78% 2,584,704,014.98 72.65% 11.31%
Railroad industry 564,551,749.10 14.68% 534,310,567.88 15.02% 5.66%
New energy
19,707,669.06 0.51% 19,285,405.44 0.54% 2.19%
industry
Real estate 369,529,923.55 9.61% 407,329,798.11 11.45% -9.28%
Others 16,060,425.14 0.42% 12,094,611.13 0.34% 32.79%
Product
Curtain wall
system and 2,877,126,181.59 74.78% 2,584,704,014.98 72.65% 11.31%
materials
Subway screen
564,551,749.10 14.68% 534,310,567.88 15.02% 5.66%
door and service
PV power
generation 19,707,669.06 0.51% 19,285,405.44 0.54% 2.19%
products
Real estate rental
and sales and 369,529,923.55 9.61% 407,329,798.11 11.45% -9.28%
property services
Others 16,060,425.14 0.42% 12,094,611.13 0.34% 32.79%
District
In China 3,563,436,690.09 92.63% 3,366,465,225.36 94.62% 5.85%
Out of China 283,539,258.35 7.37% 191,259,172.18 5.38% 48.25%
Sub-sales mode
Direct sales 3,846,975,948.44 100.00% 3,557,724,397.54 100.00% 8.13%
(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 gross
margin operating
operating costs margin
revenue
Industry
Metal
2,877,126,181.59 2,367,077,665.54 17.73% 11.31% 7.10% 3.24%
production
Real estate 369,529,923.55 106,087,632.23 71.29% -9.28% -33.27% 10.32%
Railroad
564,551,749.10 433,680,806.95 23.18% 5.66% 13.06% -5.03%
industry
25
Annual Report 2022 of China Fangda Group Co., Ltd.
Product
Curtain wall
system and 2,877,126,181.59 2,367,077,665.54 17.73% 11.31% 7.10% 3.24%
materials
Real estate
rental and
sales and 369,529,923.55 106,087,632.23 71.29% -9.28% -33.27% 10.32%
property
services
Subway
screen door 564,551,749.10 433,680,806.95 23.18% 5.66% 13.06% -5.03%
and service
District
In China 3,563,436,690.09 2,698,278,611.93 24.28% 5.85% 3.55% 1.69%
Sub-sales mode
Direct sales 3,846,975,948.44 2,917,753,967.52 24.15% 8.13% 5.67% 1.76%
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.
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
2,877,126,181.59 2,367,077,665.54 17.73% 11.31% 7.10% 3.24%
production
Product
Curtain wall
system and 2,877,126,181.59 2,367,077,665.54 17.73% 11.31% 7.10% 3.24%
materials
District
In China 2,785,927,384.79 2,293,586,813.99 17.67% 11.57% 7.23% 3.33%
Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period
□ Applicable Inapplicable
Different business types of the Company
In RMB
Business type Turnover Operating cost Gross margin
Curtain wall system and
2,877,126,181.59 2,367,077,665.54 17.73%
materials
Whether the Company runs business through the Internet
□ Yes No
Whether the Company runs overseas projects
Yes □ No
Number of overseas Total amount of overseas
No. Location
projects project contracts (RMB10,000)
1 Australia 9 26,014.67
26
Annual Report 2022 of China Fangda Group Co., Ltd.
2 Asia 3 975.00
Total 12 26,989.66
(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
In RMB
2022 2021
Proportion YOY
Industry Item Proportion change
in
Amount Amount in operating (%)
operating
costs (%)
costs (%)
Metal
Raw materials 1,570,953,065.18 66.37% 1,390,170,739.40 62.90% 3.47%
production
Metal Installation and
517,779,780.10 21.87% 539,914,574.90 24.43% -2.56%
production engineering costs
Metal
Labor cost 151,791,696.66 6.41% 146,644,527.60 6.64% -0.23%
production
Railroad
Raw materials 284,311,719.62 65.56% 241,731,373.92 63.02% 2.54%
industry
Railroad Installation and
59,413,282.43 13.70% 73,430,526.18 19.14% -5.44%
industry engineering costs
Railroad
Labor cost 50,149,325.46 11.56% 38,231,345.27 9.97% 1.59%
industry
Construction and
Real estate 28,586,334.63 26.95% 49,779,295.03 31.31% -4.36%
installation cost
Real estate Land cost 18,256,200.85 17.21% 33,068,762.42 20.80% -3.59%
Real estate Loan interest 2,181,840.72 2.06% 3,704,260.45 2.33% -0.27%
Real estate Labor cost 15,720,818.75 14.82% 16,716,890.93 10.52% 4.30%
Note: In addition to the above costs, other costs are mainly energy costs such as water, electricity and rent.
Main business cost
In RMB
2022 2021
YOY
Cost Proportion Proportion
Business type change
composition Amount in operating Amount in operating (%)
costs (%) costs (%)
Curtain wall
Raw materials system and 1,570,953,065.18 66.37% 1,390,170,739.40 62.90% 3.47%
materials
Installation and Curtain wall
engineering system and 517,779,780.10 21.87% 539,914,574.90 24.43% -2.56%
costs materials
27
Annual Report 2022 of China Fangda Group Co., Ltd.
Curtain wall
Labor cost system and 151,791,696.66 6.41% 146,644,527.60 6.64% -0.23%
materials
(6) Change to the consolidation scope in the report period
Yes □ No
The Company added a wholly-owned subsidiary in the current period by way of establishment: Jiangxi Fangda Intelligent
Manufacturing 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) 686,549,005.85
Proportion of sales to top 5 customers in the annual sales 17.85%
Percentage of sales of related parties in top 5 customers in the
0.00%
annual sales
Information of the Company's top 5 customers
No. Customer Sales (RMB) Percentage in the annual sales
1 No.1 163,742,779.52 4.26%
2 No.2 158,701,259.46 4.13%
Guangdong Mingchuang
3 Software Technology Co., 141,215,833.66 3.67%
Ltd.
4 China Telling Co., Ltd. 119,519,735.10 3.11%
China Construction Sixth
5 Engineering Division Corp. 103,369,398.11 2.69%
Ltd.
Total -- 686,549,005.85 17.85%
Other information about major customers
□ Applicable Inapplicable
Main suppliers
Purchase amount of top 5 suppliers (RMB) 676,827,109.00
Proportion of purchase amount of top 5 suppliers in the total
22.03%
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.1 280,807,145.42 9.14%
2 No.2 145,607,830.88 4.74%
28
Annual Report 2022 of China Fangda Group Co., Ltd.
3 No.3 90,872,302.97 2.96%
4 No.4 82,654,817.01 2.69%
5 No.5 76,885,012.72 2.50%
Total -- 676,827,109.00 22.03%
Other information about major suppliers
□ Applicable Inapplicable
3. Expenses
In RMB
2022 2021 YOY change (%) Notes
Sales expense 54,970,163.01 59,877,614.73 -8.20%
Administrative expense 157,138,338.83 169,443,658.83 -7.26%
Financial expenses 96,701,795.34 103,001,595.93 -6.12%
R&D cost 161,812,913.02 152,973,582.38 5.78%
4. R&D investment
Applicable □ Inapplicable
Expected impact on the
R&D project name Purpose Progress Objective future development of
the Company
Improve product In line with the
quality, improve Partially completed, national policy
Improve the
Research and installation efficiency, completed the research guidance, it has good
development level of
development of new improve construction and development of market prospects and
assembly and maintain
industrialized curtain safety and reduce prefabricated can adapt to the
the leading position in
wall system energy consumption in aluminum curtain wall development trend of
the industry.
the construction system building curtain wall in
process. the future.
Achieve the design
concept of energy-
Reduce energy
Research and In progress, completed Improve the intelligent saving, emission
consumption and
development of the trial production of level of the system and reduction and green
improve the
intelligent curtain wall wind and rain smart meet the needs of buildings, and improve
performance of
system curtain wall samples market development. the market
intelligent products.
competitiveness of
products
Continue to promote Improve the production
Improve production
Research and product research and support capacity and
Improve production capacity, output and
development of smart selection, and complete improve the
efficiency and adapt to product quality, and
factory flexible the intelligent automation and
customized production. reduce production
production system construction of some intelligence level of
costs.
production lines production equipment.
Further enhance the
Enhance product independent R&D
Research and Optimize product
safety, reliability and capability and improve
development of new In progress, continuous system performance
availability to meet the the market
generation rail transit propulsion system test and maintain industry
advanced requirements competitiveness of the
PSD control system leadership.
of the core system. Company in the field
of PSD.
29
Annual Report 2022 of China Fangda Group Co., Ltd.
Expand the application
Research and
Research and In progress, the trial Optimize the product scenarios of the
development of new
development of new production of the structure to meet the Company's products
products to improve
generation full height system sample is needs of market and enhance the
market
platform door completed development. leading edge of
competitiveness.
industry technology.
Develop products that
Diversify product conform to the concept
Study on nano Research and categories and respond of green and
In progress, promote
composite thermal development of new to national energy environmentally
sample trial production
insulation aluminum products to meet conservation and friendly buildings, save
and performance test
veneer market demand. environmental energy and reduce
protection policies. emissions, and enhance
competitiveness.
R&D personnel
2022 2021 Change
R&D staff number 589 563 4.62%
R&D staff percentage 20.19% 19.03% 1.16%
Academic structure of R&D personnel
Bachelor 368 324 13.58%
Master's degree 7 7 0.00%
Age composition of R&D personnel
Under 30 249 235 5.96%
30-40 227 221 2.71%
R&D investment
2022 2021 Change
R&D investment amount
161,812,913.02 152,973,582.38 5.78%
(RMB)
Investment percentage in
4.21% 4.30% -0.09%
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 2022 2021 YOY change (%)
Sub-total of cash inflow from business 3,570,297,784.48 3,615,387,540.90 -1.25%
30
Annual Report 2022 of China Fangda Group Co., Ltd.
operations
Sub-total of cash outflow from
3,349,086,152.18 3,678,812,837.19 -8.96%
business operations
Cash flow generated by business
221,211,632.30 -63,425,296.29 448.78%
operations, net
Sub-total of cash inflow generated
2,909,289,689.63 2,578,992,220.76 12.81%
from investment
Subtotal of cash outflows 3,000,271,914.92 2,695,492,878.10 11.31%
Cash flow generated by investment
-90,982,225.29 -116,500,657.34 21.90%
activities, net
Subtotal of cash inflow from financing
1,670,354,493.21 2,360,667,296.03 -29.24%
activities
Subtotal of cash outflow from
1,917,379,871.34 2,311,447,620.31 -17.05%
financing activities
Net cash flow generated by financing
-247,025,378.13 49,219,675.72 -601.88%
activities
Net increase in cash and cash
-108,573,142.53 -136,135,458.15 20.25%
equivalents
Explanation of major changes in related data from the same period last year
Applicable □ Inapplicable
The net cash flow from operating activities of the Company during the reporting period increased by 448.78% compared with the
previous year, mainly due to the settlement and payment of land value-added tax of RMB349,316,800 in 2021 for the real estate
business Shenzhen Fangda Town Project; The net cash flow from investment activities increased by 21.90% over the previous
year, mainly due to the net cash inflow from the recovery of the balance of financial investment in the previous period; The net
cash flow from financing activities decreased by 601.88% compared with the previous year, mainly due to the decrease in the net
income and expenditure of bank loans and the payment of dividends in the current period.
Explanation of major difference between the cash flow generated by operating activities and the net profit in the year
□ Applicable Inapplicable
IV. Non-core business analysis
Applicable □ Inapplicable
In RMB
Whether
Amount Profit percentage Reason
continuous
Investment income 6,185,954.47 1.89% No
Gain/loss caused by Mainly due to adjustment of fair
-10,113,947.45 -3.09% No
changes in fair value value of investment real estate
Mainly the provision for impairment
Assets impairment -35,575,418.55 -10.87% No
of contract assets
Non-operating revenue 1,403,387.89 0.43% No
Non-business expenses 4,167,958.09 1.27% Mainly due to donations No
Mainly bad debt provision
Credit impairment loss -34,635,724.91 -10.58% No
corresponding to accounts receivable
31
Annual Report 2022 of China Fangda Group Co., Ltd.
V. Assets and Liabilities
1. Major changes in assets composition
In RMB
End of 2022 Beginning of 2022
Proportion Proportion Change
Notes
Amount in total Amount in total (% )
assets assets
Monetary capital 1,238,754,216.50 9.72% 1,287,563,759.32 10.50% -0.78%
Account receivable 832,292,348.17 6.53% 556,453,824.20 4.54% 1.99%
Contract assets 2,158,860,658.43 16.94% 1,782,947,673.13 14.54% 2.40%
Inventory 710,532,397.32 5.57% 733,280,924.98 5.98% -0.41%
Investment real estate 5,760,517,577.11 45.20% 5,765,352,393.13 47.02% -1.82%
Long-term share equity
54,969,042.14 0.43% 55,218,946.14 0.45% -0.02%
investment
Fixed assets 646,812,853.36 5.07% 663,414,297.61 5.41% -0.34%
Construction in process 0.00% 11,642,444.21 0.09% -0.09%
Use right assets 19,449,693.40 0.15% 31,440,856.54 0.26% -0.11%
Short-term loans 1,318,238,522.78 10.34% 1,287,474,398.65 10.50% -0.16%
Contract liabilities 207,993,671.55 1.63% 180,186,877.15 1.47% 0.16%
Long-term loans 1,263,500,000.00 9.91% 1,333,500,000.00 10.88% -0.97%
Lease liabilities 6,907,456.55 0.05% 19,152,093.31 0.16% -0.11%
Non-current liabilities
83,778,647.06 0.66% 78,418,557.76 0.64% 0.02%
due in 1 year
The proportion of overseas assets is relatively high
□ Applicable Inapplicable
2. Assets and liabilities measured at fair value
Applicable □ Inapplicable
In RMB
Amo
Accumulative Impairm unt
Gain/loss
changes in fair ent purch Amount
Opening caused by Other Closing
Item value accounting provide ased sold in the
amount changes in change amount
into the income d in the in the period
fair value
account period perio
d
Financial assets
1.
Transaction
al financial
assets 25,135,241.
(excluding 89
derivative
financial
assets)
32
Annual Report 2022 of China Fangda Group Co., Ltd.
2.
Derivative 1,069,587.6
789,205.34
financial 2
assets
3.
Investment 14,180,652. 11,968,973.
-2,211,678.79 -20,372,879.33
in other 65 86
equity tools
4.
4,263,500.0 1,338,202.0
Receivable
0 1
financing
5. Other
non-current 7,525,408.2 7,507,434.6
-17,973.56
financial 4 8
assets
52,174,390. 21,603,815.
Subtotal -2,229,652.35 -20,372,879.33 0.00 0.00 0.00 0.00
40 89
-
Investment 5,755,216,5 8,622,022.1 14,332,588. 5,750,831,1
10,095,973.8 63,887,326.00
real estate 80.10 5 06 72.12
9
-
5,807,390,9 8,622,022.1 14,332,588. 5,772,434,9
Total 12,325,626.2 43,514,446.67
70.50 5 06 88.01
4
Financial
11,871.20 293,400.00
liabilities
Other change:
The increase in other changes was mainly caused by the transfer of fixed assets into investment real estate due to the change of
purpose.
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, 2022 (RMB) Reason
Monetary capital 455,076,287.44 Various deposits
Notes receivable 24,546,342.15 Bills endorsed or discounted but not yet due
Account receivable 42,800,680.80 Loan by pledge
Fixed assets 44,751,777.53 Loan by pledge
Investment real estate 3,293,733,474.51 Loan by pledge
Other non-current assets 316,929,580.18 Loan by pledge
100% stake in Fangda Property Development held by
Equity pledge 200,000,000.00
the Company
Total 4,377,838,142.61
33
Annual Report 2022 of China Fangda Group Co., Ltd.
VI. Investment
1. General situation
Applicable □ Inapplicable
Investment (yuan) in the report period Investment (yuan) in the previous period Change
500,000.00 125,388,100.00 -99.60%
2. Major equity investment in the report period
□ Applicable Inapplicable
3. Major non-equity investment in the report period
Applicable □ Inapplicable
In RMB
Reaso
ns for
Accum
failing
ulated
Industr Actual to
incom
Wheth ies invest reach
Invest e Disclo
Metho er it is involv ment the Disclo
ment Estima realize sure
Project d of fixed ed in by the Capital Progre planne sure
in the te d by source
name invest assets invest end of source ss d date (if
report return the end (if
ment invest ment the progre any)
period of the any)
ment project report ss and
reporti
s period expect
ng
ed
period
incom
e
Mainly Annou
produc nceme
e nt on
PVDF Invest
Fangd alumin ment
a um and
(Ganz veneer, Constr
hou) nano uction
Low alumin of
Carbo um Fangd
n veneer Self- Decem a
Self- 500,00 500,00
Intellig Yes and owned 0.00% -- -- -- ber 17, (Ganz
built 0.00 0.00
ent other fund 2022 hou)
Manuf new Low
acturin materi Carbo
g als, n
Headq smart Intellig
uarters curtain ent
Base wall Manuf
system acturin
, g
photov Headq
oltaic uarters
34
Annual Report 2022 of China Fangda Group Co., Ltd.
buildin Base
g release
integra d on
tion http://
system www.c
, ninfo.c
alumin om.cn/
um
alloy
compo
nents,
and
precisi
on
steel
compo
nents.
500,00 500,00
Total -- -- -- -- 0.00% -- -- -- -- --
0.00 0.00
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 of
Accumulativ
closing
e changes in
Gain/loss investment
Initial fair value
caused by Amount in Amount sold Closing amount in
Type investment accounting
changes in this period in this period amount the closing
amount into the
fair value net assets in
income
the report
account
period
Shanghai
500.55 -60.37 -29.34 4,658.8 4,710.09 449.25 0.08%
aluminum
Forward
foreign 1,454.22 4.18 78.92 8,297.73 6,664 3,087.95 0.54%
exchange
Total 1,954.77 -56.19 49.58 12,956.53 11,374.09 3,537.2 0.62%
Accounting The aluminum futures and forward foreign exchange businesses of the Company meet the applicable conditions
policies and of hedge accounting specified in the accounting standards and are applicable to hedge accounting, which are
specific classified as cash flow hedging. The corresponding accounting policies and accounting principles have not
accounting changed from the previous reporting period.
35
Annual Report 2022 of China Fangda Group Co., Ltd.
principles of
hedging
business
during the
reporting
period, as
well as
whether there
are
significant
changes
compared
with the
previous
reporting
period
Description
of actual
The actual income of the aluminum futures hedging instrument and the spot value change of the hedged
profit and
aluminum ingot in the reporting period is RMB111,800; The gains and losses arising from forward foreign
loss during
exchange hedging instruments offset the value changes of the hedged items due to exchange rate fluctuations.
the reporting
period
Description
The profit and loss generated by the company's hedging instrument can offset the value change of the hedged
of hedging
item, 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
holding in are derivative investment businesses. The derivative investment business carried out by the Company follows the
the report basic principle of locking the price and exchange rate of raw materials, does not carry out speculative trading
period operations, and carries out strict risk control when signing hedging contracts and closing positions. The Company
(including has 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
liquidity, positions.
credit,
operation and
legal risks)
Changes in
the market
price or fair
value of the
derivative in
the report
period, the
Fair value of derivatives are measured at open prices in the open market
analysis of
the
derivative's
fair value
should
disclose the
method used
36
Annual Report 2022 of China Fangda Group Co., Ltd.
and related
assumptions
and
parameters.
Lawsuit (if
No
any)
Disclosure
date of
derivative
investment
October 28, 2022
approval by
the Board of
Directors (if
any)
The Company carries out the hedging business of commodity futures options, which can effectively prevent and
resolve the operational risks caused by commodity price fluctuations, make full use of the hedging function of the
futures option 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 formulated the Measures for the Management of Derivatives Investment Business
and the Internal Control and Risk Management System of Commodity Futures Hedging Business. By
Opinions of strengthening internal control and implementing risk prevention measures, the Company has formulated specific
independent operating procedures for the Company's hedging business. The relevant examination and approval procedures for
directors on the Company to use its own funds to carry out hedging business in the commodity futures and options markets
the comply with relevant national laws, regulations and the relevant provisions of the Articles of Association.
Company's The relevant approval procedures for the Company's foreign exchange derivatives trading business comply with
derivative relevant national laws, regulations and the relevant provisions of the Articles of Association. The Company has
investment formulated the Management Measures for Derivatives Investment Business, which is conducive to strengthening
and risk the risk management and risk control of the Company's foreign exchange derivatives transactions. The
controlling Company's foreign exchange derivatives trading business follows the principles of legality, prudence, safety and
effectiveness, 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.
The independent directors agreed that the Company should carry out derivative hedging 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.
VII. Major assets and equity sales
1. Major assets sales
□ Applicable Inapplicable
The Company sold no assets in the report period.
37
Annual Report 2022 of China Fangda Group Co., Ltd.
2. Major equity sales
□ Applicable Inapplicable
VIII. Analysis of major joint stock companies
Applicable □ Inapplicable
Major subsidiaries and joint stock companies affecting more than 10% of the Company's net profit
In RMB
Main Registered Operation
Company Type Total assets Net assets Turnover Net profit
business capital profit
Fangda Subsidiarie Real estate 200,000,00 5,802,358 2,577,013,3 257,831,87 107,427,22 93,315,937.
Property s sales 0.00 ,325.63 61.28 8.77 8.44 30
Curtain
Fangda Subsidiarie wall system 600,000,00 4,611,085,1 1,635,184,8 2,612,587,0 167,926,97 154,803,30
Jianke s and 0.00 41.91 19.74 88.14 0.12 6.43
materials
Subway
Fangda Subsidiarie 105,000,00 906,681,17 275,955,25 559,019,00 17,591,668. 16,849,263.
screen door
Zhiyuan s 0.00 4.38 5.16 8.69 29 46
and service
Subway
Kechuangy Subsidiarie 5,000,000.0 81,656,847. 78,439,152. 38,166,374. 35,640,593. 30,728,147.
screen door
uan s 0 32 91 44 00 39
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
Jiangxi Fangda Intelligent Manufacturing
Newly set None
Technology Co., Ltd.
Major joint-stock companies
No
IX. Structural entities controlled by the Company
□ Applicable Inapplicable
X. Future Prospect
(1) Competition map and development trned
1. Smart curtain wall and material system industry
In the context of carbon peak and carbon neutralization, China is accelerating the formation of an industrial structure, mode
of production, lifestyle and spatial pattern that saves resources and protects the environment, and unswervingly follows the high-
quality development path of ecological priority, green and low-carbon. The Central Economic Work Conference in December
2022 put "efforts to expand domestic demand" at the top of the economic work in 2023. The adjustment of domestic epidemic
prevention and control measures, the release of major project plans in 2023 and the establishment of investment growth targets in
all provinces across the country are promoting a strong recovery of China's economy. At the same time, with the rapid growth of
China's economy, China takes promoting new infrastructure as an important part of expanding investment space and constructing a
38
Annual Report 2022 of China Fangda Group Co., Ltd.
new development pattern. New urbanization, the coordinated development of Beijing Tianjin Hebei, the development of the
Yangtze River Economic Belt, the construction of the Guangdong Hong Kong Macao Greater Bay Area, and the construction of
the "the Belt and Road" will all become important driving forces and valuable opportunities for the future development of the
smart curtain wall system and material industry.
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
to urban functions, improving the environment and promoting economic and social development. According to the forecast data of
2021 China Urban Rail Transit Market Development Report, 101 rail transit lines in 34 cities such as Hangzhou, Shenzhen,
Guangzhou, Zhengzhou and Beijing will be newly opened and operated in 2022-2023, with a total mileage of 2175.63 kilometers,
1243 stations and a total investment of RMB1,549.64 billion.
3. New energy industry
In 2022, in order to achieve the goal of carbon peak and carbon neutrality, further promote the sustainable, healthy and high-
quality development of the photovoltaic industry, and build a modern energy system, the Chinese government has intensively
issued a series of supporting and normative documents on the construction direction of photovoltaic power generation, capacity
digestion, photovoltaic subsidies, bidding for grid access, project planning, industrial planning and other aspects. During the "14th
five year plan" period, the development of photovoltaic power generation will enter a new stage of large-scale, high proportion,
marketization and high-quality development. By accelerating the construction of a new power system with new energy as the main
body and improving the consumption and storage capacity of photovoltaic power generation, we can not only realize the large-
scale development of photovoltaic power generation, but also achieve a high level of consumption and utilization. The Company's
photovoltaic power generation, as a green and environmentally friendly power generation method, will use its industrial
advantages to carry out photovoltaic business according to market conditions and promote the high-quality development of the
new energy industry in the future.
4. Real estate
Looking forward to 2023, "stability" is the main tone of the real estate industry, and the national property market policy is
expected to continue to be loose, as the strength of urban policy implementation is expected to be further strengthened. With the
continuous easing of the property market policy, the gradual improvement of the epidemic situation and the gradual recovery of
the social economy, the regional differentiation will bring new development opportunities to the Greater Bay Area of Guangdong,
Hong Kong and Macao. The industrial development is mature, the population attraction is strong, the real estate market demand is
strong, the integration of Shenzhen and Hong Kong is continuing to advance, and the Shenzhen market still has great potential in
the future.
(2) Company development strategy and business plan
In 2023, the Company will continue to work together to promote the high-quality development of the company, focus on the
management theme of "refinement", and do the following key work comprehensively in combination with the annual business
objectives:
(1) Adhere to the contract as the center and strengthen the management of accounts receivable.
Strengthen the quality of contract signing, adhere to the contract as the center, take the duration control as the means, control
the performance risk, project quality and progress, handle the complicated relationship with the project stakeholders, and
resolutely curb the increase of accounts receivable. The Company will divide the risk level of accounts receivable according to one
39
Annual Report 2022 of China Fangda Group Co., Ltd.
enterprise and one policy. Vitalize the settled assets, reduce the contract assets, and dispose of invalid and inefficient assets; Do a
good job of early warning and locking risks for accounts receivable.
(2) Implement the theme of "refined management" to further improve quality and efficiency.
The Company will combine its own characteristics, find out the cost loopholes and weaknesses, further improve the product
quality, give full play to the effective use of newly invested equipment, and comprehensively improve the efficiency and operating
efficiency of all staff. The Company will vigorously implement the theme of "refined management", systematically and
comprehensively reduce all kinds of costs, and improve enterprise efficiency and market competitiveness.
(3) Promote innovation and technological progress to maintain the sustainable development of the company.
Sustainable development is the top priority of the company's survival. It must be achieved through the development of new
products, technological progress and product process innovation, and the promotion of industrial progress. New products should
vigorously expand the market and harvest high-quality orders. The Company's high-end curtain wall, rail transit screen door
system and software, PVDF aluminum veneer, photovoltaic and other industries still have good prospects, but still need to
establish a sense of crisis, strengthen responsibility, continuously improve management level, promote technological progress, and
strengthen the Company's viability. According to the actual situation of each industry, the Company will improve its
competitiveness through new products, new technologies and digital management to ensure its sustainable development.
(4) Introduce excellent talents and optimize the talent structure of enterprises
The Company will take multiple measures to cultivate reserve talents. We should make full use of postdoctoral workstations,
technology centers and other platforms to introduce a group of talents with high quality, strong ability and brave responsibility to
join the company. The Company will ensure the long-term development planning of human resources.
(3) Capital demand and source for projects in progress
To realize the business target in 2023, 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. 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.
40
Annual Report 2022 of China Fangda Group Co., Ltd.
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. 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.
XI. 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
participating in Business and Investor Relationship
Network
April 8, 2022 Others Others the Company's future Record Form on
platform
2021 Performance development www.cninfo.com.cn
Presentation
Northeast
Securities: Pu
Business and Investor Relationship
October 31, Yang
Online Others Institution future Record Form on
2022 CCB Fund: Li
development www.cninfo.com.cn
Ruolan, Zhou
Zhishuo
Investors
participating in Business and Investor Relationship
November 9, http://rs.p5w
Others Others the Company's future Record Form on
2022 .net/
collective development www.cninfo.com.cn
reception day
Changjiang Business and Investor Relationship
December 23,
Online Others Institution Securities: Zhang future Record Form on
2022
Zhijie development www.cninfo.com.cn
41
Annual Report 2022 of China Fangda Group Co., Ltd.
42
Annual Report 2022 of China Fangda Group Co., Ltd.
Chapter IV Corporation Governance
I. Overview
During the report period, the Company strictly complied with the Company Law, Securities Law, Governance Standards for Listed
Companies, Shenzhen Stock Exchange Share Listing Rules, Operation Regulations for Listed Companies in the Main Board of
Shenzhen Stock Exchange, continued to improve the legal person governance structure and has formulated a series of internal
management systems covering various aspects. The Company has set up a comprehensive and effective internal control system in
important decision making, related transaction decision making, financial management, HR management, administration, purchase,
production and sales management, confidentiality and information disclosure.
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
Participati
Date of
Meeting Type on of Date Meeting resolution
disclosure
investors
43
Annual Report 2022 of China Fangda Group Co., Ltd.
The following proposals were reviewed and adopted: 1. The
work report of the Board of Directors in 2021;
2. Supervisory Committee' Work Report 2021;
2021 Annual
3. Annual Report 2021 and the Summary;
Annual sharehold April 19, April 20,
24.47% 4. Financial Settlement Report 2021;
Shareholder ers' 2022 2022
5. 2021 Profit Distribution Plan;
Meeting meeting
6. Proposal on Applying for Credit Guarantee from Banks
and Other Financial Institutions (special resolution);
7. Proposal on engaging of the CPA for Year 2022;
1. Reviewing and approving the proposal on spin off of its
subsidiary Fangda Zhiyuan Technology Co., Ltd. for initial
public offering and listing on the growth enterprise market;
2. Proposal on the listing of the subsidiary Fangda Zhiyuan
Technology Co., Ltd. on the growth enterprise market of
Shenzhen Stock Exchange in compliance with relevant laws
and regulations;
3. Proposal on the plan of China Fangda Group Co., Ltd. to
spin off its subsidiary Fangda Zhiyuan Technology Co., Ltd.
to be listed on the GEM;
4. Proposal on the listing of Fangda Zhiyuan Technology
Co., Ltd., a subsidiary of China Fangda Group Co., Ltd. on
the growth enterprise market in compliance with the Rules
for the Spin Off of Listed Companies (Trial
1st Extraordin
Implementation);
Provisional ary
September September 5. Proposal on spin-off of the subsidiary Fangda Zhiyuan
Shareholder sharehold 28.44%
14, 2022 15, 2022 Technology Co., Ltd. to the Growth Enterprise Market to
s' Meeting ers'
safeguard the legitimate rights and interests of shareholders
2022 meeting
and creditors;
6. Proposal on maintaining the independence and
sustainable operation ability of the Company;
7. Proposal on Fangda Zhiyuan Technology Co., Ltd.
having the corresponding standardized operation capability;
8. Proposal on the completeness and compliance of the legal
procedures for the spin-off and the validity of the legal
documents submitted;
9. Proposal on purpose, commercial rationality, necessity
and feasibility analysis of the spin-off;
10. Resolution in relation to proposing to the shareholders'
general meeting to authorize the board of directors and
authorized persons of the board of directors to deal with
matters relating to the spin-off of the Company.
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
Startin End Numb Increas Decrea Other Numb
Positio Job Gende g date date of er of ed sed increas er of Reaso
Name Age
n status r of the the shares shares shares e and shares ns
term term held at in this in this decrea held at
44
Annual Report 2022 of China Fangda Group Co., Ltd.
beginn period period se end of
ing of (share) (share) (share) the
the period
period
Be
optimi
stic
about
Chair Nove
Xiong the
man, In mber May 8, 3,060, 2,049, 5,110,
Jianmi M 65 0 Compa
preside office 20, 2023 657 600 257
ng ny's
nt 1995
develo
pment
prospe
cts
Xiong April
Direct In May 8,
Jianwe M 54 16,
or office 2023
i 1999
Zhou April
Direct In May 8,
Zhigan M 60 9,
or office 2023
g 2007
Zhou Vice April
In May 8,
Zhigan preside M 60 11,
office 2023
g nt 2017
April
Lin Direct In May 8,
M 45 11,
Kebin or office 2023
2017
Vice
Lin In June 6, May 8,
preside M 45
Kebin office 2008 2023
nt
Indepe
Guo April
ndent In May 8,
Jinlon M 61 11,
directo office 2023
g 2017
r
Indepe
Huang ndent In May 8, May 8,
M 60
Yaying directo office 2020 2023
r
Indepe
Cao
ndent In May 8, May 8,
Zhong M 44
directo office 2020 2023
xiong
r
Superv
isory
Comm
Decem
Dong ittee In May 8,
M 44 ber 28,
Gelin meetin office 2023
2018
g
conven
er
April
Cao Superv In May 8,
F 44 11,
Naisi isor office 2023
2017
Fan
Superv In May 8, May 8,
Xiaod M 36 8,800 8,800
isor office 2020 2023
ong
Wei Vice In M 54 July May 8,
45
Annual Report 2022 of China Fangda Group Co., Ltd.
Yuexin preside office 29, 2023
g nt 2011
Secret
Xiao June
ary of In May 8,
Yangji M 38 23,
the office 2023
an 2020
Board
3,069, 2,049, 5,119,
Total -- -- -- -- -- -- 0 --
457 600 057
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
Changes in the Directors, Supervisors and Senior Executives
□ Applicable Inapplicable
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, senior engineer. He is currently the chairman and President of the
company and a deputy to the 13th and 14th National People's Congress. He was once employed by Jiangxi Provincial Machinery
Design Academe, Administration Bureau of Shekou District of Shenzhen government, etc, deputy to the 10th People's Congress of
Guangdong Province, deputy to the 2nd, 3rd and 6th People's Congress of Shenzhen City.
2. 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.
3. Mr. Zhou Zhigang: Bachelor degree. He is now the director and vice president of the Company. He used to be the Secretary of
the board of directors.
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. Guo Jinlong: master's degree, CPA. He was a member of the fifth session of the CPPCC of Shenzhen City. He is currently the
deputy to the sixth session of the People's Congress of Shenzhen, vice chairman of Guangdong Certified Public Accountants
Association (limited liability partnership), partner of ShineWing Certified Public Account, and an independent director of the
Company, Shenzhen Sanlipu Photoelectric Technology Co., Ltd., Inner Mongolia Furui Medical Technology Co., Ltd., and
Shenzhen Water Planning and Design Institute Co., Ltd. He was a former member of the 5th CPPCC Shenzhen.
6. Mr. Huang Yaying: Master of Laws. He is currently an independent director of the Company, Shenzhen BAOYING
Construction Holding Group Co., Ltd., Shenzhen Lihe Kechuang Co., Ltd., Shennan Circuit Co., Ltd. and Huafu Fashion Co., Ltd
and a part-time lawyer of Guangdong Beiyuan Law Firm. He was once a professor of Northwest University of Political Science
and Law, and dean of Shenzhen University Law School.
7. Mr. Cao Zhongxiong: doctor, now is the executive director of New Economy Research Institute of comprehensive development
and Research Institute (Shenzhen, China). (Shenzhen, China), engaged in research and consulting work on new economy and
corporate strategy. He is an independent director of the Company. He used to be a technician of China Chemical Group Bluestar
Detergent Co., Ltd. and the executive director of the New Economy Research Institute of the Comprehensive Development
Research Institute (Shenzhen, China).
8. Mr. Dong Gelin: Bachelor degree, senior engineer. He is currently the convener of the board of supervisors and the assistant to
the president of the Company. He is a member of the 8th National People's Congress of Nanshan District, Shenzhen. He was once
a designer of Shenzhen Fangda Jianke, a wholly-owned subsidiary of the Company, chief engineer of the designing institution,
46
Annual Report 2022 of China Fangda Group Co., Ltd.
assistant to the general manager, and general manager of Beijing branch of Fangda Jianke. He is now the vice general manager of
Fangda Jianke.
9. Ms. Cao Naisi: Bachelor's degree, intermediate economist, currently Supervisor of the Company and 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.
10. 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.
11. Mr. Wei Yuexing holds a Bachelor degree and is a senior engineer. He is the vice president of the and general manager of
Fangda Jianke.
12. Mr. Xiao Yangjian: Bachelor degree. Now he is 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 Investment
Xiong Jianming Director October 6, 2011 No
Ltd.
Gong Qing Cheng Shi
Li He Investment
Wei Yuexing Management Executive partner December 20, 2016 No
Partnership Enterprise
(limited partner)
Office
No
description
Offices held at other entities
Applicable □ Inapplicable
Whether any
End
Position held in Starting date of the remuneration is
Name Entity name date of
another entity term paid at the
the term
shareholder entity
ShineWing Certified Public
Guo
Accountants (limited liability Partner October 1, 2005 Yes
Jinlong
partnership)
Guo Shenzhen Sanlipu Photoelectric Independent
July 10, 2020 Yes
Jinlong Technology Co., Ltd. director
Guo Inner Mongolia Furui Medical Independent
May 20, 2020 Yes
Jinlong Technology Co., Ltd director
Guo Shenzhen Water Planning and Design Independent
June 24, 2022 Yes
Jinlong Institute Co., Ltd director
Guo Independent
Zhuhai Lizhu Reagent Co., Ltd. January 1, 2021 Yes
Jinlong director
Guo Shenzhen Hangsheng Electronics Co.,
Director July 22, 2015 Yes
Jinlong Ltd.
Guo Shenzhen Wenshuo Jiayin Musical
Supervisor November 1, 2018 No
Jinlong Communication Co., Ltd.
Huang Shenzhen BAOYING Construction Independent June 2, 2020 Yes
47
Annual Report 2022 of China Fangda Group Co., Ltd.
Yaying Holding Group Co., Ltd. director
Huang Shenzhen Lihe Technology Independent
February 10, 2020 Yes
Yaying Innovation Co., Ltd. director
Huang Independent
Shennan Circuits Co., Ltd. April 6, 2021 Yes
Yaying director
Huang Independent
Huafu Fashion Co., Ltd. December 16, 2021 Yes
Yaying director
Huang Part-time lawyer of Guangdong Part-time
April 1, 2020 Yes
Yaying Beiyuan Law Firm lawyer
Director of
Cao General Development Research Institute of
January 1, 2022 Yes
Zhongxiong Institute (Shenzhen, China) Digital Strategy
and Economics
Office
The above-mentioned three are independent directors of the Company.
description
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.
Remuneration for directors and supervisors are decided by the shareholders' meeting. Remunerations for executives are composed
of wages and performance bonus as decided by the Board.
Payment on monthly basis
Remunerations of the Directors, Supervisors and Senior Executives of the Company During the reporting period
In RMB10,000
Remuneration
Total
Name Position Gender Age Job status from related
remuneration
parties
Chairman,
Xiong Jianming M 65 In office 226.72 No
president
Xiong Jianwei Director M 54 In office 110.92 No
Director, vice
Zhou Zhigang M 60 In office 95.94 No
president
Director, vice
Lin Kebin M 45 In office 120.2 No
president
Independent
Guo Jinlong M 61 In office 8 No
director
Independent
Huang Yaying M 60 In office 8 No
director
Cao Independent
M 44 In office 8 No
Zhongxiong director
Supervisory
Committee
Dong Gelin M 44 In office 80.62 No
meeting
convener
Cao Naisi Supervisor F 44 In office 59.06 No
Fan Xiaodong Supervisor M 36 In office 49.6 No
48
Annual Report 2022 of China Fangda Group Co., Ltd.
Wei Yuexing Vice president M 54 In office 108.22 No
Secretary of the
Xiao Yangjian M 38 In office 74.25 No
Board
Total -- -- -- -- 949.53 --
VI. Performance of directors during the report period
1. Board of Directors in the reporting period
Meeting Date Date of disclosure Meeting resolution
12th meeting of the 9th Board Reviewed and approved the proposal on
January 21, 2022 January 22, 2022
of Directors providing external financial assistance.
Reviewed and adopted: 1. 2021 annual
president's work report; 2. Work report of the
Board of Directors in 2021; 3. The full text
and summary of the 2021 annual report; 4.
2021 annual financial statement; 5. Proposal
on 2021 profit distribution plan; 6. Self-
13th meeting of the 9th Board evaluation report on internal control in 2021;
March 28, 2022 March 30, 2022
of Directors 7. Proposal on applying for credit extension
and providing guarantee to banks and other
financial institutions; 8. Proposal on the
employment of audit institutions in 2022; 9.
Proposal on 2021 Social Responsibility
Report; 10. Proposal on convening the 2021
annual general meeting of shareholders.
14th meeting of the 9th Board The proposal on the Company's First Quarter
April 26, 2022
of Directors Report 2022 was reviewed and passed.
Reviewed and approved: 1. Proposal on the
Full Text and Summary of the 2022 Semi-
annual Report; 2. The Proposal on the Spin-
off of the Subsidiary Fangda Zhiyuan
Technology Co., Ltd.'s IPO and Listing on the
GEM; 3. The Proposal on Spin-off of its
subsidiary Fangda Zhiyuan Technology Co.,
Ltd. to the Shenzhen Stock Exchange for
listing on the GEM in compliance with
relevant laws and regulations; 4. Proposal on
the Plan of Fangda Group Co., Ltd. to Spin off
its subsidiary Fangda Zhiyuan Technology
Co., Ltd. to be listed on the GEM; 5. The
15th meeting of the 9th Board Proposal on Spin-off of its subsidiary Fangda
August 26, 2022 August 30, 2022
of Directors Zhiyuan Technology Co., Ltd. to the GEM in
compliance with the "Rules for Spin-off of
Listed Companies (for Trial
Implementation)"; 6. Proposal on Spin-off of
Fangda Zhiyuan Technology Co., Ltd., its
subsidiary, to be listed on the GEM, which is
conducive to safeguarding the legitimate
rights and interests of shareholders and
creditors; 7. Proposal on the Company's
Independence and Sustainability; 8. Proposal
on Fangda Zhiyuan Technology Co., Ltd.
having corresponding standardized operation
capability; 9. Proposal on the completeness
and compliance of the legal procedures and
49
Annual Report 2022 of China Fangda Group Co., Ltd.
the validity of the legal documents submitted
for the spin-off; 10. Proposal on the Purpose,
Commercial Rationality, Necessity and
Feasibility Analysis of the Spin-off; 11.
Proposal on Submitting the General Meeting
of Shareholders to Authorize the Board of
Directors and its Authorized Persons to
Handle Matters Related to the Company's
Spin-off; 12. Proposal on Convening the First
Extraordinary General Meeting of
Shareholders in 2022.
Reviewed and approved: 1. Proposal on the
third quarter report of 2022; 2. Proposal on
16th meeting of the 9th Board
October 26, 2022 October 28, 2022 continuing to carry out derivative hedging
of Directors
business; 3. Proposal on continuing to use idle
self-owned funds for cash management.
The proposal on the investment and
17th meeting of the 9th Board construction of the large (Ganzhou) low-
December 16, 2022 December 17, 2022
of Directors carbon intelligent manufacturing headquarters
base was reviewed and passed.
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
Time of Number of
Number of Number of Absent for Number of
board board
Name of board Presented by board two shareholders'
meetings meetings
director meetings telecom meetings not consecutive meetings
should have attended by
attended attended meetings attended
attended proxy
Xiong
6 2 4 0 0 No 2
Jianming
Xiong
6 2 4 0 0 No 2
Jianwei
Zhou
6 1 5 0 0 No 2
Zhigang
Lin Kebin 6 2 4 0 0 No 2
Guo Jinlong 6 1 5 0 0 No 1
Huang
6 1 5 0 0 No 2
Yaying
Cao
6 1 5 0 0 No 2
Zhongxiong
Statement for absence for two consecutive board meetings
None
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
50
Annual Report 2022 of China Fangda Group Co., Ltd.
Yes □ No
Statement for suggestion adopted or not by the Company
The directors of the Company shall perform their duties in strict accordance with the provisions of the Company Law, the
Securities Law, the Guidelines for the Governance of Listed Companies, the Stock Listing Rules of Shenzhen Stock Exchange, the
Articles of Association and other laws and regulations and the Company's system. 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 are diligent and conscientious, carefully
deliberating various proposals of the board of directors of the Company, and expressing independent opinions on the improvement
of the Company's system, major operation and management matters, company guarantee, profit distribution and other related
matters. The relevant suggestions of the independent directors to the Company have been adopted by the company, which has
played a positive role in safeguarding the interests of the Company and minority shareholders.
VII. Special committees under the board of directors during the reporting period
Important
Number of opinions Other Details of
Committee
Membership meetings Date Meeting content and performance objections
name
held suggestions of duties (if any)
put forward
Heard and
considered: 1.
After full
Xiong Review of the
communicat
Jianming, Company's
ion and
Development Cao production and
March 28, discussion,
Strategy Zhongxiong, 2 operation in
2022 all proposals
Committee Lin kebing, 2021; 2. The
were
Zhou Company's 2022
unanimousl
Zhigang annual production
y passed.
and operation
work plan.
Listened to and
reviewed the
After full
Xiong review of the
communicat
Jianming, Company's
ion and
Development Cao production and
August 26, discussion,
Strategy Zhongxiong, 2 operation in the
2022 all proposals
Committee Lin kebing, first half of 2022
were
Zhou and the main
unanimousl
Zhigang work in the
y passed.
second half of
2021;
Listened to and The
Guo Jinlong,
reviewed the financial
Audit Huang March 21,
5 financial and
Committee Yaying, Lin 2022
statements of the accounting
kebing
Company in 2021 report of the
51
Annual Report 2022 of China Fangda Group Co., Ltd.
after the Company
preliminary for 2021 has
opinions issued been
by the annual prepared in
audit accountant accordance
with the
new
accounting
standards
for business
enterprises
and relevant
financial
regulations
of the
Company,
which truly
reflects the
financial
status of the
Company as
of
December
31, 2021
and the
operating
results and
cash flow in
2021. It is
agreed to
determine
the final
financial
report for
2021 on this
basis.
Listened to the
2021 financial
work report and
internal audit After full
work report, the communicat
following items ion and
were considered discussion,
and adopted: 1. it was
The Company's unanimousl
Guo Jinlong,
audited financial y approved
Audit Huang March 28,
5 and accounting and agreed
Committee Yaying, Lin 2022
statements for to submit all
kebing
2021; 2. The proposals to
Company's the board of
proposal to hire directors of
an auditor in the
2022; 3. The company for
Company's self- deliberation.
evaluation report
on internal
control in 2021.
Audit Guo Jinlong, 5 April 26, The financial After full
52
Annual Report 2022 of China Fangda Group Co., Ltd.
Committee Huang 2022 statements of the communicat
Yaying, Lin Company for the ion and
kebing first quarter of discussion,
2022 were the proposal
reviewed and was
approved. unanimousl
y adopted
and agreed
to be
submitted to
the board of
directors of
the
Company
for
deliberation.
After full
communicat
ion and
discussion,
the proposal
was
The financial
unanimousl
Guo Jinlong, statements of the
y adopted
Audit Huang August 26, Company for the
5 and agreed
Committee Yaying, Lin 2022 half year of 2022
to be
kebing were reviewed
submitted to
and approved.
the board of
directors of
the
Company
for
deliberation.
After full
communicat
Reviewed and
ion and
approved: 1. The
discussion,
Company's
it was
unaudited
unanimousl
Guo Jinlong, financial and
y approved
Audit Huang October 26, accounting
5 and agreed
Committee Yaying, Lin 2022 statements for the
to submit all
kebing third quarter of
proposals to
2022; 2. Proposal
the board of
on developing
directors of
derivative
the
hedging business;
company for
deliberation.
In 2021, the
directors
The proposal on
and senior
Huang the remuneration
Remuneratio managers of
Yaying, Cao of directors and
n and March 28, the
Zhongxiong, 1 senior managers
Assessment 2022 Company
Xiong in 2021 was
Committee have
Jianwei considered and
diligently
adopted.
and
conscientiou
53
Annual Report 2022 of China Fangda Group Co., Ltd.
sly
completed
the business
objectives
and other
work tasks
in 2021. The
remuneratio
n of
directors
and senior
managers in
2021 is in
line with the
managemen
t plan of
directors'
allowance
and senior
managers'
remuneratio
n of the
Company.
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 2022
In 2022, 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 2022 supervisory committee's work plan is as follows:
1. Opinions
(1) Legal compliance
In 2022, 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 2022, 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 2022, which is
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 2022, the company did not violate the securities law, the standards
54
Annual Report 2022 of China Fangda Group Co., Ltd.
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 2022 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 2022, 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 2022, all of which are on-site meetings. All proposal were approved and disclosed as required:
Convening
No. Meeting Date Topic
method
1. Supervisory Committee's Annual Report 2021;
8th meeting 2. Annual Report 2021 and the Summary;
of the 9th March 28, 3. Financial Settlement Report 2021;
1 On-site
Supervisory 2022 4. Review the Company's 2021 Profit Distribution Plan;
Committee 5. The proposal of engaging the auditor for 2022;
6. The Company's internal control self-evaluation report 2021;
9th meeting
of the 9th April 26,
2 On-site Proposal on the Company's First Quarter Report 2022
Supervisory 2022
Committee
1. Reviewed and approved the Proposal on the Full Text and Summary of
the 2022 Semi-annual Report; 2. Reviewed and approved the Proposal on
the Spin-off of the Subsidiary Fangda Zhiyuan Technology Co., Ltd.'s
IPO and Listing on the GEM; 3. Reviewed and approved the Proposal on
Spin-off of its subsidiary Fangda Zhiyuan Technology Co., Ltd. to the
Shenzhen Stock Exchange for listing on the GEM in compliance with
relevant laws and regulations; 4. Proposal on the Plan of Fangda Group
Co., Ltd. to Spin off its subsidiary Fangda Zhiyuan Technology Co., Ltd.
to be listed on the GEM; 5. Reviewed the Proposal on Spin-off of its
10th
subsidiary Fangda Zhiyuan Technology Co., Ltd. to the GEM in
meeting of
August 26, compliance with the "Rules for Spin-off of Listed Companies (for Trial
3 the 9th On-site
2022 Implementation)"; 6. Reviewed the Proposal on Spin-off of Fangda
Supervisory
Zhiyuan Technology Co., Ltd., its subsidiary, to be listed on the GEM,
Committee
which is conducive to safeguarding the legitimate rights and interests of
shareholders and creditors; 7. Reviewed the Proposal on the Company's
Independence and Sustainability; 8. Reviewed the Proposal on Fangda
Zhiyuan Technology Co., Ltd. having corresponding standardized
operation capability; 9. Reviewed the Proposal on the completeness and
compliance of the legal procedures and the validity of the legal
documents submitted for the spin-off; 10. Reviewed the Company's
Proposal on the Purpose, Commercial Rationality, Necessity and
Feasibility Analysis of the Spin-off.
10th
meeting of
October 26,
4 the 9th On-site Proposal regarding the Company's 2022 Q3 Report
2022
Supervisory
Committee
(III) The Supervisory Committee's Work Report 2023
In 2023, 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.
55
Annual Report 2022 of China Fangda Group Co., Ltd.
IX. Employees
1. Staff number, professional composition and education
Staff number of the parent at the end of the reporting period 54
Number of on-the-job employees of major subsidiaries at the
2,863
end of the reporting period (person)
Total number of active employees at the end of the reporting
2,917
period (person)
Number of employees receiving remuneration in the period 2,917
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 1,378
Sales & Marketing 122
Technicians 1,221
Finance & Accounting 61
Administration 135
Total 2,917
Education
Categories of education Number of people
High school or below 1,303
College diploma 630
Bachelor 953
Master's degree 29
Doctor's degree 2
Total 2,917
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.
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.
56
Annual Report 2022 of China Fangda Group Co., Ltd.
4. Labor outsourcing
Applicable □ Inapplicable
Total number of hours of labor outsourcing 14,207,001.15
Total remuneration paid for labor outsourcing (RMB) 512,230,008.60
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 2021. According to the deliberation and
approval of the 2021 annual general meeting held on April 19, 2022, the Company's 2021 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 1,073,874,227 shares after the closing of the stock market on the equity registration date when the profit distribution
plan is implemented, with a total of 53,693,711.35 yuan 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
the General Shareholders' Meeting
Clear and definite distribution standard and proportion Yes
Decision-making procedure and mechanism Yes
Independent directors fulfill their duties Yes
Middle and small shareholders express their opinions and
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) 0.5
A total number of shares as the distribution basis 1,073,874,227
Cash dividend (including tax) 53,693,711.35
Cash dividend paid in other manners (such as repurchase of 0.00
57
Annual Report 2022 of China Fangda Group Co., Ltd.
shares)
Total cash dividend (including other manners) 53,693,711.35
Distributable profit (yuan) 1,225,449,092.72
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 2022 approved by the board of directors of the Company is: the Company plans to distribute cash
dividends of RMB0.50 (tax included) for every 10 shares to all shareholders based on the total share capital of 1,073,874,227
shares on December 31, 2022, with a total cash distribution of RMB53,693,711.35. 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 0.50 (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
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 the Company's internal control system in accordance with the provisions of the
basic norms of enterprise internal control and its supporting guidelines and other internal control supervision requirements,
combined with the actual situation of the Company, and has been effectively implemented. The audit committee and the internal
audit department jointly form the Company's risk internal control management organization system to supervise and evaluate the
Company's internal control management, The Company's self-evaluation report on internal control in 2022 comprehensively, truly
and accurately reflects the actual situation of the company's internal control. During the reporting period, the Company has no
major defects and important defects 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
□ Applicable Inapplicable
XIV. Internal control self-evaluation report or internal control audit report
1. Internal control self-evaluation report
Date of disclosure of the internal control February 28, 2023
58
Annual Report 2022 of China Fangda Group Co., Ltd.
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 94.39%
consolidated financial statements
Percentage of operation income in the
evaluation scope in the total operation
96.51%
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.
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
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
Standard 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
59
Annual Report 2022 of China Fangda Group Co., Ltd.
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, 2022.
Disclosure of internal auditor's report Disclosed
Date of disclosure of the internal control audit report February 28, 2023
Source of disclosure of the internal control audit report www.cninfo.com.cn
Opinion type Standard opinion auditor's report
Problems in non-financial statements No
Non-standard internal control audit report by the CFA
□ Yes 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
60
Annual Report 2022 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
The Company pays attention to global climate change and actively explores the path of environmental friendliness and
enterprise development. Since its inception, the Company has been accompanied by a sense of mission of green environmental
protection. 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. In 2022, solar photovoltaic power generation in the new energy industry will
reach 19.8314 million kilowatt-hours, equivalent to saving about 7139.30 tons of standard coal, reducing nearly 20000 tons of
carbon dioxide emissions, and reducing about 234.01 tons of sulfur dioxide, which will continue to contribute to the realization of
carbon peak and carbon neutrality goals. The Company was awarded the first batch of carbon emission measurement pilot
enterprises for building decoration in Shenzhen.
The Company has established an environmental management system, and many subordinate companies have passed the
ISO14001 environmental system certification. In their daily production and operation, they seriously implement the environmental
protection laws and regulations such as the environmental protection law of the People's Republic of China, the water pollution
prevention and control law of the People's Republic of China, the air pollution prevention and control law of the People's Republic
of China, and the solid waste pollution prevention and control law of the People's Republic of China. In 2022, it won the "National
Excellent Foreign-invested Enterprise - Green Carbon Reduction Promotion Award". The Company and its subsidiaries are not
among the key pollutant discharging units announced by the environmental protection department.
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,
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Annual Report 2022 of China Fangda Group Co., Ltd.
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
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 2022, the Company's funds for
social welfare undertakings totaled RMB3,173,300. 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 2022 social responsibility report of China Fangda Group Co., Ltd.
III. Consolidate and expand the achievements of poverty alleviation and rural revitalization
Over the years, while creating enterprise value, the Company has adhered to its original mission, fulfilled the social
responsibilities of listed companies, actively participated in the action of "ten thousand enterprises prospering ten thousand
villages", successively carried out industrial assistance in Guangdong, Jiangxi, Tibet and other places, helped poor areas to grow
cash crops such as agrocybe cylindracea and lilies according to local conditions, and built greenhouse photovoltaic power stations,
distributed photovoltaic power stations and other rural industrial "hematopoietic" projects. Our efforts have created new driving
forces for rural economic development and helped build a beautiful new era village, which has prosperous industries, ecological
livability, a civilized rural style, effective governance, and a rich cultural heritage. All walks of life have praised us for the good
social results we have achieved.
In addition, the Company has actively participated in various public welfare activities, involving public education, combating
SARS, funding rural medical care, disaster relief, environmental protection, prevention and control of the COVID-19 and many
other aspects. It has successively won the "National Advanced Private Enterprise in 'Ten Thousand Enterprises Help Ten
Thousand Villages' Targeted Poverty Alleviation Action", "National Federation of Industry and Commerce Advanced Private
Enterprise in Fighting COVID-19", "China's Outstanding Enterprise in Performing Social Responsibility" Honors such as
"National Excellent Foreign-invested Enterprises - Shenzhen's Top Ten Taxable Enterprises", "Guangdong May Day Labor
Medal", etc.
In 2022, the company donated 1.6 million yuan to Miaoqian Village, Ji'an County, Jiangxi Province, the old revolutionary
base, to support the village's collective breeding industry project, and play a booster role in promoting the industrial revitalization
and expansion of the village's collective economy, driving the income of poverty-stricken households and farmers, and boosting
the rural revitalization; Donate RMB800,000 to Shenzhen Charity Association. In order to improve the conditions for running
schools in rural areas and provide students with a good educational environment, the company has invested RMB1,167,600 in the
expansion and repair of the Fangda Hope Primary School in the Xinjian District of Nanchang City by the end of 2022.
62
Annual Report 2022 of China Fangda Group Co., Ltd.
63
Annual Report 2022 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
Implement the provisions of the Accounting Standards for Business Enterprises Interpretation No. 15 on "accounting
treatment for the external sales of products or by-products produced by enterprises before the fixed assets reach the intended
usable state or during the research and development process" and "judgment on loss contracts"
On December 30, 2021, the Ministry of Finance issued the Interpretation of Accounting Standards for Business Enterprises
No. 15 (Cai Kuai [2001] No. 35) (hereinafter referred to as "Interpretation No. 15"), Among them, the contents of "Accounting
64
Annual Report 2022 of China Fangda Group Co., Ltd.
treatment for the external sales of products or by-products produced by enterprises before the fixed assets reach the expected
usable state or during the research and development process" (hereinafter referred to as "Accounting treatment provisions for trial
operation sales") and "Judgment on loss contracts" shall be implemented as of January 1, 2022. The implementation of the relevant
provisions of the Interpretation No. 15 has no significant impact on the financial statements of the Company during the reporting
period.
Implement the interpretation of accounting standards for Business Enterprises No. 16
On November 30, 2022, the Ministry of Finance issued the Interpretation of Accounting Standards for Business Enterprises
No. 16 (Cai Kuai [2002] No. 31, hereinafter referred to as Interpretation No. 16), "Accounting treatment of the income tax impact
of dividends related to financial instruments classified as equity instruments by the issuer", "Accounting treatment of enterprises'
modification of cash-settled share-based payments to equity-settled share-based payments", the contents of which shall be
implemented as of the date of promulgation. The implementation of the relevant provisions of the Interpretation No. 16 has no
significant impact on the financial statements of the Company during the reporting period.
(2) Changes in major 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
The Company added a wholly-owned subsidiary in the current period by way of establishment: Jiangxi Fangda Intelligent
Manufacturing 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
4
accountants
Name of certified accountants of the domestic public
Xie Peiren, Zeng Hui, Hu Gaosheng
accountants
Xie Peiren has provided continuous audit services for 2 years,
Consecutive years of service by the domestic public Zeng Hui has provided continuous audit services for 5 years,
accountants and Hu Gaosheng has provided continuous audit services for 3
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
65
Annual Report 2022 of China Fangda Group Co., Ltd.
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
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
Index
Whether
Amount Enforcement of Date for
Basic information estimated Progress of Litigation (arbitration)
(in litigation of inform
of litigation liabilities litigation hearing results and
RMB10,0 (arbitration) disclo ation
(arbitration) are (arbitration) impact
00) judgment sure disclos
formed
ure
Summary of
The case has not been
matters in which According to
closed yet, and it is Some are being
the subsidiaries as the litigation
not expected to have a implemented,
the plaintiff fail to process, some
28,812.28 No significant impact on some have not
meet the disclosure have been
the company's yet been
standards of major tried and some
operation and implemented
litigation are under trial
financial status
(arbitration)
Summary of
matters where the The case has not been
Company and its closed yet, and it is
subsidiaries as not expected to have a
defendants fail to 9,125.34 No Not completed significant impact on Not completed
meet the disclosure the company's
standards of major operation and
litigation financial status
(arbitration)
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
66
Annual Report 2022 of China Fangda Group Co., Ltd.
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.
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.
67
Annual Report 2022 of China Fangda Group Co., Ltd.
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
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
since
engage
of
Novemb contract
Fangda March 51,980.4 Joint
86,000 er 24, No No to 3 No Yes
Jianke 30, 2022 8 liability
2022 years
upon
due of
debt
since
engage
Fangda March March 9, 19,268.4 Joint of
24,000 No No No Yes
Jianke 23, 2021 2022 2 liability contract
to 3
years
68
Annual Report 2022 of China Fangda Group Co., Ltd.
upon
due of
debt
since
engage
of
contract
Fangda March October Joint
30,000 3,905.58 No No to 3 No Yes
Jianke 30, 2022 19, 2022 liability
years
upon
due of
debt
since
engage
of
Septemb contract
Fangda March 29,403.4 Joint
50,000 er 20, No No to 3 No Yes
Jianke 30, 2022 8 liability
2022 years
upon
due of
debt
since
engage
of
Septemb contract
Fangda March Joint
30,000 er 20, 9,426.86 No No to 3 No Yes
Jianke 30, 2022 liability
2022 years
upon
due of
debt
since
engage
of
Decemb contract
Fangda March 15,563.1 Joint
39,000 er 9, No No to 3 No Yes
Jianke 30, 2022 1 liability
2022 years
upon
due of
debt
since
engage
of
contract
Fangda March May 23, Joint
15,000 15,000 No No to 3 No Yes
Jianke 30, 2022 2022 liability
years
upon
due of
debt
since
engage
of
Decemb contract
Fangda March 39,072.6 Joint
48,000 er 15, No No to 3 No Yes
Jianke 30, 2022 4 liability
2022 years
upon
due of
debt
69
Annual Report 2022 of China Fangda Group Co., Ltd.
since
engage
Fangda
of
Jianke
Decemb contract
and January Joint
15,400 er 18, 3,873.06 No No to 3 No Yes
Fangda 30, 2019 liability
2019 years
Zhichua
upon
ng
due of
debt
since
engage
of
contract
Fangda March August Joint
20,000 4,000 No No to 3 No Yes
Jianke 30, 2022 10, 2022 liability
years
upon
due of
debt
since
engage
of
Septemb contract
Fangda March Joint
4,000 er 8, 4,000 No No to 3 No Yes
Jianke 30, 2022 liability
2022 years
upon
due of
debt
since
engage
of
Decemb contract
Fangda March Joint
60,000 er 21, 2,864.3 No No to 3 No Yes
Jianke 23, 2021 liability
2021 years
upon
due of
debt
since
engage
of
contract
Fangda March July 4, 17,398.0 Joint
40,000 No No to 3 No Yes
Zhiyuan 30, 2022 2022 5 liability
years
upon
due of
debt
since
engage
of
contract
Fangda March March 9, Joint
15,000 3,701.48 No No to 3 No Yes
Zhiyuan 23, 2021 2022 liability
years
upon
due of
debt
since
Fangda March October Joint engage
20,000 1,187.03 No No No Yes
Zhiyuan 30, 2022 19, 2022 liability of
contract
70
Annual Report 2022 of China Fangda Group Co., Ltd.
to 3
years
upon
due of
debt
since
engage
of
Novemb contract
Fangda March Joint
15,000 er 1, 4,862.47 No No to 3 No Yes
Zhiyuan 30, 2022 liability
2022 years
upon
due of
debt
since
engage
of
contract
Fangda March May 23, Joint
10,000 175.04 No No to 3 No Yes
Zhiyuan 30, 2022 2022 liability
years
upon
due of
debt
since
engage
of
contract
Fangda March May 10, Joint
600 168.41 No No to 3 No Yes
Yunzhu 30, 2022 2022 liability
years
upon
due of
debt
since
engage
of
contract
Fangda March August Joint
800 65.61 No No to 3 No Yes
Yunzhu 30, 2022 19, 2022 liability
years
upon
due of
debt
since
engage
of
Fangda Septemb contract
March Joint
New 8,500 er 6, 2,353.59 No No to 3 No Yes
30, 2022 liability
Material 2022 years
upon
due of
debt
since
engage
of
Fangda
March April 20, Joint contract
New 10,000 1,828.64 No No No Yes
30, 2022 2022 liability to 3
Material
years
upon
due of
71
Annual Report 2022 of China Fangda Group Co., Ltd.
debt
since
engage
of
Decemb contract
Fangda February Joint
er 4, 135,000 89,000 No No to 2 No Yes
Property 25, 2020 liability
2019 years
upon
due of
debt
since
engage
of
Decemb contract
Fangda April 18, Joint
47,000 er 16, 44,350 No No to 3 No Yes
Property 2020 liability
2020 years
upon
due of
debt
since
engage
of
contract
Fangda March June 1, Joint
7,000 2,449.35 No No to 3 No Yes
Zhijian 30, 2022 2022 liability
years
upon
due of
debt
Total of guarantee to Total of guarantee to
subsidiaries subsidiaries actually
472,900 307,725.27
approved in the occurred in the
report term (B1) report term (B2)
Total of balance of
Total of guarantee to guarantee actually
subsidiaries provided to the
730,300 365,897.59
approved as of the subsidiaries as of
report term (B3) end of 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 provided by the Company (total of the above three)
Total of guarantee Total of guarantee
approved in the occurred in the
472,900 307,725.27
report term report term
(A1+B1+C1) (A2+B2+C2)
Total of guarantee Total of guarantee
approved as of end occurred as of the
730,300 365,897.59
of report term end of report term
(A3+B3+C3) (A4+B4+C4)
Percentage of the total guarantee occurred 63.64%
72
Annual Report 2022 of China Fangda Group Co., Ltd.
(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
78,400.55
asset (F)
Total of the above 3 (D+E+F) 78,400.55
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)
Note of compound guarantee
No
3. Entrusted cash capital management
(1) Wealth management
Applicable □ Inapplicable
Wealth management during the reporting period
In RMB10,000
Accrued
impairment
Due balance to amount of overdue
Type Source of fund Amount Undue balance
be recovered unrecovered
financial
management
Bank financial
Self-owned fund 46,560.08 0 0 0
products
Total 46,560.08 0 0 0
Details of high-risk entrusted financial management with significant single amount or low security and poor liquidity
□ Applicable Inapplicable
Entrusted financial management expected to fail to recover the principal or likely result in impairment
□ Applicable Inapplicable
(2) Trusted loans
□ Applicable Inapplicable
The Company borrowed no trust loan in the report period.
73
Annual Report 2022 of China Fangda Group Co., Ltd.
4. Other significant contract
□ Applicable Inapplicable
The Company entered into no other significant contract in the report.
XVI. Other material events
Applicable □ Inapplicable
1. According to the Company's development strategy and in combination with the development needs of the rail transit screen
door system industry of Fangda Zhiyuan Technology Co., Ltd., the company plans to split Fangda Zhiyuan Technology Co., Ltd.
to be listed on the GEM of Shenzhen Stock Exchange. During the reporting period, the 15th meeting of the 9th Board of Directors
of the Company and the first extraordinary general meeting of shareholders in 2022 deliberated and passed the proposal on the
spin-off of the subsidiary Fangda Zhiyuan Technology Co., Ltd.'s initial public offering of shares and listing on the GEM, On
December 29, 2022, we received the Notice on the Acceptance of the Application Documents for the Initial Public Offering of
Shares and Listing on the Growth Enterprise Market (SZSS [2022] No. 577) issued by Shenzhen Stock Exchange. For details,
please refer to the relevant announcements disclosed by the company on http//www.cninfo.com.cn. The Company will timely
perform the obligation of information disclosure in accordance with the provisions and requirements of laws and regulations
according to the progress of relevant matters.
2. In order to meet the needs of future business development, the Company held the 17th meeting of the 9th Board of
Directors on December 16, 2022, deliberated and passed the Proposal on Investment and Construction of Fangda (Ganzhou) Low-
carbon Intelligent Manufacturing Headquarters Base, and agreed to invest and build Fangda (Ganzhou) Low-carbon Intelligent
Headquarters Base in Zhanggong District, Ganzhou City, Jiangxi Province. For details, see the relevant announcement disclosed
by the Company on http//www.cninfo.com.cn. As of the disclosure date of this report, the company has completed the delisting of
the project land and the signing of the State-owned Construction Land Use Right Transfer Contract.
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 By March 16, 2025
2 Construction curtain wall contracting class A By December 31, 2023
Construction mechanical and electric equipment installation
3 By February 25, 2025
contracting class A
4 Construction decoration contracting class B By December 31, 2023
5 Steel structure engineering contracting class B Until December 32, 2023
6 City and road lighting engineering contracting class C Until December 33, 2023
Design and construction of metal roof (wall) surface of
7 By January 12, 2024
building
74
Annual Report 2022 of China Fangda Group Co., Ltd.
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
75
Annual Report 2022 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 Transfer
Bonus Proportio
Quantity Proportion new red from Others Subtotal Quantity
shares n
shares reserves
I. Shares with
trade
2,302,093 0.21% 1,537,200 1,537,200 3,839,293 0.36%
restriction
conditions
1. State-
owned shares
2. State-
owned legal
person shares
3. Other
domestic 2,302,093 0.21% 1,537,200 1,537,200 3,839,293 0.36%
shares
Includin
g: Shares held
by domestic
legal persons
Domesti
c natural 2,302,093 0.21% 1,537,200 1,537,200 3,839,293 0.36%
person shares
4. Shares
held by
foreign
investors
Includin
g: Shares held
by foreign
legal persons
Domesti
c natural
person shares
II.
- - 1,070,034
Unrestricted 1,071,572,134 99.79% 99.64%
1,537,200 1,537,200 ,934
shares
1.
Common - - 675,876,1
677,413,379 63.08% 62.94%
shares in 1,537,200 1,537,200 79
RMB
2. Foreign 394,158,755 36.71% 394,158,7 36.70%
76
Annual Report 2022 of China Fangda Group Co., Ltd.
shares in 55
domestic
market
3. Foreign
shares in
overseas
market
4. Others
III. Total of 1,073,874
1,073,874,227 100.00% 0 0 100.00%
capital shares ,227
Reasons
Applicable □ Inapplicable
During the reporting period, Mr. Xiong Jianming, the chairman of the company, increased his holdings of 2,049,600 RMB
ordinary shares (A shares) of the Company, so the Company's shares with limited sales conditions increased by 1,537,200 shares
and shares with unlimited sales conditions decreased by 1,537,200 shares.
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
On May 10, 2022, the Company issued the voluntary announcement on the increase of the Company's shares held by the actual
controller and the Company under its control on www.cninfo.com.cn.
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
25% of the
annual
Increase of
Xiong Jianming 2,295,493 1,537,200 0 3,832,693 shareholding is
shareholding
released from
the sale
Total 2,295,493 1,537,200 0 3,832,693 -- --
77
Annual Report 2022 of China Fangda Group Co., Ltd.
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
Total Number
number of of Total number of
ordinary sharehold shareholders of
Number of
share ers of preference
shareholder
shareholder preferred shares of which
s of
s at the end stocks of voting rights
common
56,188 of the 55,456 which 0 resumed at the 0
shares at
month voting end of the
the end of
before the rights month before
the report
disclosure recovered the disclosure
period
date of the in the date of the
annual report annual report
report period
Shareholders holding 5% of the Company's shares or top-10 shareholders
Number of Pledge, marking or
Change in
Shareholdi shares held at Condit Amount of freezing
Name of Nature of the
ng the end of the ional shares without
shareholder shareholder reporting Share
percentage reporting shares sales restriction Quantity
period status
period
Shenzhen
Banglin Domestic
Technologi non-state
11.11% 119,332,846 0 119,332,846
es legal
Developme person
nt Co., Ltd.
Shengjiu Foreign
Investment legal 10.11% 108,579,318 717214 108,579,318
Ltd. person
Domestic
Fang Wei natural 3.40% 36,474,388 3566210 36,474,388
person
Gong Qing Domestic
1.48% 15,860,609 0 15,860,609
Cheng Shi non-state
78
Annual Report 2022 of China Fangda Group Co., Ltd.
Li He legal
Investment person
Manageme
nt
Partnership
Enterprise
(limited
partner)
Shenwan
Hongyuan
Foreign
Securities
legal 0.51% 5,508,790 -272510 5,508,790
(Hong
person
Kong) Co.,
Ltd.
VANGUA
RD
EMERGIN
Foreign
G
legal 0.50% 5,409,612 -903071 5,409,612
MARKET
person
S STOCK
INDEX
FUND
Domestic
Wu
natural 0.50% 5,407,600 5407600 5,407,600
Xuandong
person
VANGUA
RD
TOTAL
Foreign
INTERNA
legal 0.49% 5,263,439 -984301 5,263,439
TIONAL
person
STOCK
INDEX
FUND
Domestic
Xiong 3,832,
natural 0.48% 5,110,257 2049600 1,277,564
Jianming 693
person
Domestic
Qu Chunlin natural 0.41% 4,397,100 -340000 4,397,100
person
A strategic investor or
ordinary legal person
becomes the Top10 No
shareholder due a stock
issue.
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 instructions on the
existence of special No
repurchase account among
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the top 10 shareholders
Top 10 holders of unconditional shares
Category of shares
Shareholder name Amount of shares without sales restriction
Category of shares Quantity
Shenzhen Banglin
Technologies 119,332,846 RMB common shares 119,332,846
Development Co., Ltd.
Domestically listed
Shengjiu Investment Ltd. 108,579,318 108,579,318
foreign shares
Fang Wei 36,474,388 RMB common shares 36,474,388
Gong Qing Cheng Shi Li
He Investment
Management Partnership 15,860,609 RMB common shares 15,860,609
Enterprise (limited
partner)
Shenwan Hongyuan
Domestically listed
Securities (Hong Kong) 5,508,790 5,508,790
foreign shares
Co., Ltd.
VANGUARD
Domestically listed
EMERGING MARKETS 5,409,612 5,409,612
foreign shares
STOCK INDEX FUND
Wu Xuandong 5,407,600 RMB common shares 5,407,600
VANGUARD TOTAL
Domestically listed
INTERNATIONAL 5,263,439 5,263,439
foreign shares
STOCK INDEX FUND
Qu Chunlin 4,397,100 RMB common shares 4,397,100
Huang Xueming 4,056,400 RMB common shares 4,056,400
No action-in-concert or
related parties among the Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu
top10 unconditional Investment Co., Ltd. are parties action-in-concert with Xiong Jianming. Shenzhen Banglin
shareholders and between Technology Development Co., Ltd. and its parties action-in-concert and Gong Qing Cheng Shi Li He
the top10 unconditional Investment Management Partnership Enterprise are related parties. The Company is not notified of
shareholders and the other action-in-concert or related parties among the other holders.
top10 shareholders
Top-10 common share
Wu Xuandong holds 5,407,600 stocks of the Company through the Huaxi Securities customer credit
shareholders participating
transaction guarantee securities account.
in margin trade
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
Name of controlling representative/ Date of
Organization code Main business
shareholder responsible establishment
person
Shenzhen Banglin Chen Jinwu June 7, 2001 914403007298400552 Industrial investment, developing
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Technologies of electronic products, technical
Development Co., Ltd. consulting, domestic commerce,
material trading
Stock ownership of
other domestic and
overseas listed
company controlled or No
whose 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
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 and President 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
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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
□ Applicable Inapplicable
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Chapter VIII Preferred Shares
□ Applicable Inapplicable
The Company had no preferred share in the report period.
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Chapter IX Information about the Company's Securities
□ Applicable Inapplicable
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Chapter X Financial Statements
I. Auditor's report
Type Standard opinion auditor's report
Issued on February 24, 2023
Auditor RSM China (Special General Partnership)
Report No. RSM [2023] No.361Z0007
CPA names Xie Peiren, Zeng Hui, Hu Gaosheng
Auditors' Report
RSM [2023] No.361Z0007
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, 2022, 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 2022.
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, 2022, and the business performance and cash flow of year 2022.
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 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
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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, 24, Note V, 44 and Note XIII 2 of the financial statements.
1. Description
In 2022, the operating revenue of Fangda Group is 3.847 billion yuan, of which the revenue of curtain wall and metro
platform screen door accounts for 89.46% 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.
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.
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(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, 15, Note V, 15 (2), Note V 52 and Note IX of the financial
statements.
1. Description
As of Saturday, December 31, 2022, the book balance of the investment real estate of Fangda group which adopts the fair
value model for subsequent measurement is 5.751 billion yuan, accounting for 45.12% of the total assets. The income from
changes in fair value realized in the current period is RMB-10,000,000 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
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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
For related information disclosure, please refer to Note III, 9, Note V, 5, Note V, 10 and Note V, 22 of the financial
statements.
1. Description
As of December 31, 2022, the total amount of accounts receivable of the company was RMB1.058 billion, the provision for
bad debts accrued was RMB226 million, the total amount of contract assets of the company was RMB2.457 billion, the provision
for impairment accrued was RMB1.99 billion, and the total amount of accounts receivable and contract assets accounted for 24.25%
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.
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(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 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 2022 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.
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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 (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 there are major uncertainties in the matters or circumstances that may cause
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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.
RSM China CPA:
(limited liability partnership) Xie Peiren (project partner)
CPA:
Zeng Hui
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Beijing, China CPA:
Hu Gaosheng
February 24, 2023
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, 2022
In RMB
Item December 31, 2022 January 1, 2022
Current asset:
Monetary capital 1,238,754,216.50 1,287,563,759.32
Settlement provision
Outgoing call loan
Transactional financial assets 25,135,241.89
Derivative financial assets 789,205.34 1,069,587.62
Notes receivable 130,428,554.49 166,377,880.01
Account receivable 832,292,348.17 556,453,824.20
Receivable financing 1,338,202.01 4,263,500.00
Prepayment 20,631,650.59 23,022,485.03
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance contracts
receivable
Other receivables 155,379,024.22 165,093,406.23
Including: interest receivable
Dividend receivable
Repurchasing of financial assets
Inventory 710,532,397.32 733,280,924.98
Contract assets 2,158,860,658.43 1,782,947,673.13
Assets held for sales
Non-current assets due in 1 year
Other current assets 200,981,963.60 264,786,506.29
Total current assets 5,449,988,220.67 5,009,994,788.70
Non-current assets:
Loan and advancement provided
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Debt investment
Other debt investment
Long-term receivables
Long-term share equity investment 54,969,042.14 55,218,946.14
Investment in other equity tools 11,968,973.86 14,180,652.65
Other non-current financial assets 7,507,434.68 7,525,408.24
Investment real estate 5,760,517,577.11 5,765,352,393.13
Fixed assets 646,812,853.36 663,414,297.61
Construction in process 11,642,444.21
Productive biological assets
Gas & petrol
Use right assets 19,449,693.40 31,440,856.54
Intangible assets 72,679,444.26 75,199,712.83
R&D expense
Goodwill
Long-term amortizable expenses 9,744,661.01 5,388,770.22
Deferred income tax assets 220,060,976.88 214,123,733.00
Other non-current assets 491,486,416.65 407,856,515.39
Total of non-current assets 7,295,197,073.35 7,251,343,729.96
Total of assets 12,745,185,294.02 12,261,338,518.66
Current liabilities
Short-term loans 1,318,238,522.78 1,287,474,398.65
Loans from Central Bank
Call loan received
Transactional financial liabilities
Derivative financial liabilities 293,400.00 11,871.20
Notes payable 734,890,208.56 849,445,299.09
Account payable 1,718,036,375.78 1,343,123,485.97
Prepayment received 1,439,653.84 1,280,482.93
Contract liabilities 207,993,671.55 180,186,877.15
Selling of repurchased financial assets
Deposit received and held for others
Entrusted trading of securities
Entrusted selling of securities
Employees' wage payable 67,150,863.91 69,071,013.95
Taxes payable 85,827,331.09 67,280,647.22
Other payables 113,425,377.70 126,903,098.08
Including: interest payable
Dividend payable
Fees and commissions payable
Reinsurance fee payable
Liabilities held for sales
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Non-current liabilities due in 1 year 83,778,647.06 78,418,557.76
Other current liabilities 48,133,198.49 48,098,361.77
Total current liabilities 4,379,207,250.76 4,051,294,093.77
Non-current liabilities:
Insurance contract provision
Long-term loans 1,263,500,000.00 1,333,500,000.00
Bond payable
Including: preferred stock
Perpetual bond
Lease liabilities 6,907,456.55 19,152,093.31
Long-term payable 197,640,219.18 183,640,219.18
Long-term employees' wage payable
Anticipated liabilities 3,372,553.84 6,347,809.40
Deferred earning 8,999,880.44 9,566,525.60
Deferred income tax liabilities 1,065,172,771.00 1,066,631,858.80
Other non-current liabilities
Total of non-current liabilities 2,545,592,881.01 2,618,838,506.29
Total liabilities 6,924,800,131.77 6,670,132,600.06
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 31,986,716.79 35,325,871.78
Special reserves
Surplus reserve 79,324,940.43 79,324,940.43
Common risk provisions
Retained profit 4,553,295,402.30 4,324,055,259.33
Total of owner's equity belong to the
5,749,940,874.92 5,524,039,886.94
parent company
Minor shareholders' equity 70,444,287.33 67,166,031.66
Total of owners' equity 5,820,385,162.25 5,591,205,918.60
Total of liabilities and owner's interest 12,745,185,294.02 12,261,338,518.66
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Wu Bohua
2. Balance Sheet of the Parent Company
In RMB
Item December 31, 2022 January 1, 2022
Current asset:
Monetary capital 87,710,288.64 111,848,536.84
Transactional financial assets
Derivative financial assets
Notes receivable
Account receivable 647,944.58 585,936.30
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Receivable financing
Prepayment 277,763.31 212,807.30
Other receivables 1,046,500,428.02 1,276,731,665.95
Including: interest receivable
Dividend receivable
Inventory
Contract assets
Assets held for sales
Non-current assets due in 1 year
Other current assets 1,395,020.37 1,460,846.55
Total current assets 1,136,531,444.92 1,390,839,792.94
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term share equity investment 1,457,331,253.00 1,196,831,253.00
Investment in other equity tools 11,968,973.86 14,180,652.65
Other non-current financial assets 30,000,001.00 30,000,001.00
Investment real estate 333,236,768.00 329,471,982.00
Fixed assets 66,203,194.37 71,830,252.61
Construction in process
Productive biological assets
Gas & petrol
Use right assets 12,055,734.65 17,224,771.47
Intangible assets 1,038,211.65 1,219,737.85
R&D expense
Goodwill
Long-term amortizable expenses 393,807.16 218,563.44
Deferred income tax assets 30,304,587.98 27,079,997.63
Other non-current assets
Total of non-current assets 1,942,532,531.67 1,688,057,211.65
Total of assets 3,079,063,976.59 3,078,897,004.59
Current liabilities
Short-term loans 300,247,500.00 300,351,666.67
Transactional financial liabilities
Derivative financial liabilities
Notes payable
Account payable 803,645.08 606,941.85
Prepayment received 820,758.71 858,019.63
Contract liabilities
Employees' wage payable 3,444,985.79 3,909,857.23
Taxes payable 353,816.35 3,447,040.12
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Other payables 308,443,521.52 233,531,740.37
Including: interest payable
Dividend payable
Liabilities held for sales
Non-current liabilities due in 1 year 3,613,300.13 4,264,397.66
Other current liabilities 25,213.92
Total current liabilities 617,752,741.50 546,969,663.53
Non-current liabilities:
Long-term loans
Bond payable
Including: preferred stock
Perpetual bond
Lease liabilities 9,401,331.72 13,560,947.50
Long-term payable
Long-term employees' wage payable
Anticipated liabilities
Deferred earning
Deferred income tax liabilities 74,007,022.67 74,447,416.01
Other non-current liabilities
Total of non-current liabilities 83,408,354.39 88,008,363.51
Total liabilities 701,161,095.89 634,978,027.04
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 360,835.52 360,835.52
Less: Shares in stock
Other miscellaneous income -1,106,214.97 -520,786.11
Special reserves
Surplus reserve 79,324,940.43 79,324,940.43
Retained profit 1,225,449,092.72 1,290,879,760.71
Total of owners' equity 2,377,902,880.70 2,443,918,977.55
Total of liabilities and owner's interest 3,079,063,976.59 3,078,897,004.59
3. Consolidated Income Statement
In RMB
Item 2022 2021
1. Total revenue 3,846,975,948.44 3,557,724,397.54
Incl. Business income 3,846,975,948.44 3,557,724,397.54
Interest income
Insurance fee earned
Fee and commission received
2. Total business cost 3,455,330,616.20 3,318,923,983.34
Incl. Business cost 2,917,753,967.52 2,761,300,557.48
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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 66,953,438.48 72,326,973.99
Sales expense 54,970,163.01 59,877,614.73
Administrative expense 157,138,338.83 169,443,658.83
R&D cost 161,812,913.02 152,973,582.38
Financial expenses 96,701,795.34 103,001,595.93
Including: interest cost 100,581,343.99 101,722,768.10
Interest income 23,892,574.84 16,575,629.28
Add: other gains 13,909,584.57 14,032,939.09
Investment gains ("-" for loss) 6,185,954.47 -1,459,334.05
Incl. Investment gains from affiliates and
-249,904.00 -683,431.81
joint ventures
Financial assets derecognised as a
-3,778,070.96 -6,336,161.86
result of amortized cost
Exchange gains ("-" for loss)
Net open hedge gains ("-" for loss)
Gains from change of fair value ("-" for loss) -10,113,947.45 23,422,035.73
Credit impairment ("-" for loss) -34,635,724.91 -7,923,995.43
Investment impairment loss ("-" for loss) -35,575,418.55 7,181,339.41
Investment gains ("-" for loss) -1,421,880.09 -2,291,048.05
3. Operational profit ("-" for loss) 329,993,900.28 271,762,350.90
Plus: non-operational income 1,403,387.89 2,209,180.56
Less: non-operational expenditure 4,167,958.09 6,087,375.71
4. Gross profit ("-" for loss) 327,229,330.08 267,884,155.75
Less: Income tax expenses 41,074,830.04 41,085,548.73
5. Net profit ("-" for net loss) 286,154,500.04 226,798,607.02
(1) By operating consistency
1. Net profit from continuous operation ("-" for net
286,154,500.04 226,798,607.02
loss)
2. Net profit from discontinuous operation ("-" for
net loss)
(2) By ownership
1. Net profit attributable to the shareholders of the
282,933,854.32 222,168,142.53
parent company
2. Minor shareholders' equity 3,220,645.72 4,630,464.49
6. After-tax net amount of other misc. incomes -3,281,545.04 33,206,426.49
After-tax net amount of other misc. incomes attributed
-3,339,154.99 33,247,704.15
to parent's owner
(1) Other misc. incomes that cannot be re-classified
-1,658,759.09 -2,894,735.24
into gain and loss
97
Annual Report 2022 of China Fangda Group Co., Ltd.
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
-1,658,759.09 -2,894,735.24
tools
4. Fair value change of the Company's credit risk
5. Others
(2) Other misc. incomes that will be re-classified
-1,680,395.90 36,142,439.39
into 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 -477,624.42 -4,224,144.67
6. Translation difference of foreign exchange
1,238,329.43 -1,233,457.89
statement
7. Others -2,441,100.91 41,600,041.95
After-tax net of other misc. income attributed to
57,609.95 -41,277.66
minority shareholders
7. Total of misc. incomes 282,872,955.00 260,005,033.51
Total of misc. incomes attributable to the owners of
279,594,699.33 255,415,846.68
the parent company
Total misc gains attributable to the minor shareholders 3,278,255.67 4,589,186.83
8. Earnings per share
(1) Basic earnings per share 0.26 0.21
(2) Diluted earnings per share 0.26 0.21
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
4. Income Statement of the Parent Company
In RMB
Item 2022 2021
1. Turnover 28,268,463.91 24,953,602.85
Less: Operation cost 207,701.70 460,120.74
Taxes and surcharges 1,047,368.79 1,324,210.97
Sales expense
Administrative expense 32,282,732.92 32,607,874.44
R&D cost
Financial expenses 10,510,674.85 14,039,379.48
Including: interest cost 10,543,271.85 13,931,266.37
Interest income 1,232,336.85 695,036.74
Add: other gains 160,960.32 97,873.78
Investment gains ("-" for loss) 566,025.88 33,994,681.44
Incl. Investment gains from affiliates and joint
ventures
98
Annual Report 2022 of China Fangda Group Co., Ltd.
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 1,743,238.00
Credit impairment ("-" for loss) 1,722,726.79 -3,072.04
Investment impairment loss ("-" for loss)
Investment gains ("-" for loss) -26,464.40 2,654.87
2. Operational profit ("-" for loss) -15,129,301.76 12,357,393.27
Plus: non-operational income 1,771.93 32,837.61
Less: non-operational expenditure 54,784.14 110,348.37
3. Gross profit ("-" for loss) -15,182,313.97 12,279,882.51
Less: Income tax expenses -3,445,357.33 3,426,786.59
4. Net profit ("-" for net loss) -11,736,956.64 8,853,095.92
(1) Net profit from continuous operation ("-" for net
-11,736,956.64 8,853,095.92
loss)
(2) Net profit from discontinuous operation ("-" for net
loss)
5. After-tax net amount of other misc. incomes -585,428.86 -149,656.40
(1) Other misc. incomes that cannot be re-classified
-1,658,759.09 -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
-1,658,759.09 -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 1,509,102.69
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
6. Translation difference of foreign exchange
statement
7. Others 1,073,330.23 1,509,102.69
6. Total of misc. incomes -12,322,385.50 8,703,439.52
7. Earnings per share
(1) Basic earnings per share
(2) Diluted earnings per share
5. Consolidated Cash Flow Statement
In RMB
Item 2022 2021
1. Net cash flow from business operations:
Cash received from sales of products and providing of services 3,400,391,396.08 3,472,283,389.16
99
Annual Report 2022 of China Fangda Group Co., Ltd.
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 100,113,710.79 23,051,730.15
Other cash received from business operation 69,792,677.61 120,052,421.59
Sub-total of cash inflow from business operations 3,570,297,784.48 3,615,387,540.90
Cash paid for purchasing products and services 2,501,276,962.17 2,549,580,998.25
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 434,624,232.39 393,791,110.72
Taxes paid 194,268,739.66 518,942,250.11
Other cash paid for business activities 218,916,217.96 216,498,478.11
Sub-total of cash outflow from business operations 3,349,086,152.18 3,678,812,837.19
Cash flow generated by business operations, net 221,211,632.30 -63,425,296.29
2. Cash flow generated by investment:
Cash received from investment recovery 2,896,345,770.15 2,569,989,730.43
Cash received as investment profit 9,837,299.48 5,258,238.74
Net cash retrieved from disposal of fixed assets, intangible
3,106,620.00 3,744,251.59
assets, and other long-term assets
Net cash received from disposal of subsidiaries or other
operational units
Other investment-related cash received
Sub-total of cash inflow generated from investment 2,909,289,689.63 2,578,992,220.76
Cash paid for construction of fixed assets, intangible assets and
128,217,974.92 114,032,878.10
other long-term assets
Cash paid as investment 2,872,004,000.00 2,581,410,000.00
Net increase of loan against pledge
Net cash paid for acquiring subsidiaries and other operational
units
Other cash paid for investment 49,940.00 50,000.00
Subtotal of cash outflows 3,000,271,914.92 2,695,492,878.10
Cash flow generated by investment activities, net -90,982,225.29 -116,500,657.34
3. Cash flow generated by financing activities:
Cash received from investment
Incl. Cash received from investment attracted by subsidiaries
from minority shareholders
Cash received from borrowed loans 1,670,354,493.21 2,185,667,296.03
Other cash received from financing activities 175,000,000.00
Subtotal of cash inflow from financing activities 1,670,354,493.21 2,360,667,296.03
Cash paid to repay debts 1,705,142,253.30 1,712,441,117.35
100
Annual Report 2022 of China Fangda Group Co., Ltd.
Cash paid as dividend, profit, or interests 152,414,163.36 131,745,861.24
Incl. Dividend and profit paid by subsidiaries to minority
4,560,100.00
shareholders
Other cash paid for financing activities 59,823,454.68 467,260,641.72
Subtotal of cash outflow from financing activities 1,917,379,871.34 2,311,447,620.31
Net cash flow generated by financing activities -247,025,378.13 49,219,675.72
4. Influence of exchange rate changes on cash and cash equivalents 8,222,828.59 -5,429,180.24
5. Net increase in cash and cash equivalents -108,573,142.53 -136,135,458.15
Plus: Balance of cash and cash equivalents at the beginning of
892,251,071.59 1,028,386,529.74
term
6. Balance of cash and cash equivalents at the end of the period 783,677,929.06 892,251,071.59
6. Cash Flow Statement of the Parent Company
In RMB
Item 2022 2021
1. Net cash flow from business operations:
Cash received from sales of products and providing of services 20,735,985.55 22,551,848.92
Tax refunded
Other cash received from business operation 3,977,104,356.14 4,603,033,499.14
Sub-total of cash inflow from business operations 3,997,840,341.69 4,625,585,348.06
Cash paid for purchasing products and services 3,197,334.25 1,432,078.40
Cash paid to and for the staff 20,177,382.13 19,382,565.12
Taxes paid 9,132,198.00 5,394,999.41
Other cash paid for business activities 3,663,216,835.55 4,519,631,300.00
Sub-total of cash outflow from business operations 3,695,723,749.93 4,545,840,942.93
Cash flow generated by business operations, net 302,116,591.76 79,744,405.13
2. Cash flow generated by investment:
Cash received from investment recovery 1,082,000,000.00 476,800,000.00
Cash received as investment profit 566,025.88 33,994,681.44
Net cash retrieved from disposal of fixed assets, intangible
691,000.00 29,891.50
assets, and other long-term assets
Net cash received from disposal of subsidiaries or other
operational units
Other investment-related cash received
Sub-total of cash inflow generated from investment 1,083,257,025.88 510,824,572.94
Cash paid for construction of fixed assets, intangible assets and
2,154,542.00 310,178.66
other long-term assets
Cash paid as investment 1,342,500,000.00 476,800,000.00
Net cash paid for acquiring subsidiaries and other operational
units
Other cash paid for investment
Subtotal of cash outflows 1,344,654,542.00 477,110,178.66
Cash flow generated by investment activities, net -261,397,516.12 33,714,394.28
3. Cash flow generated by financing activities:
Cash received from investment
Cash received from borrowed loans 300,000,000.00 300,090,000.00
Other cash received from financing activities
Subtotal of cash inflow from financing activities 300,000,000.00 300,090,000.00
Cash paid to repay debts 300,000,000.00 490,090,000.00
Cash paid as dividend, profit, or interests 64,834,502.57 16,439,258.35
Other cash paid for financing activities
Subtotal of cash outflow from financing activities 364,834,502.57 506,529,258.35
Net cash flow generated by financing activities -64,834,502.57 -206,439,258.35
4. Influence of exchange rate changes on cash and cash equivalents -22,821.27
5. Net increase in cash and cash equivalents -24,138,248.20 -92,980,458.94
101
Annual Report 2022 of China Fangda Group Co., Ltd.
Plus: Balance of cash and cash equivalents at the beginning of
111,598,536.84 204,578,995.78
term
6. Balance of cash and cash equivalents at the end of the period 87,460,288.64 111,598,536.84
7. Statement of Change in Owners' Equity (Consolidated)
Amount of the Current Term
In RMB
2022
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 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
2.
Bala
nce
at
1,07 11,4 35,3 79,3 4,32 5,52 67,1 5,59
the
3,87 59,5 25,8 24,9 4,05 4,03 66,0 1,20
begi
4,22 88.4 71.7 40.4 5,25 9,88 31.6 5,91
nnin
7.00 0 8 3 9.33 6.94 6 8.60
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) - 282, 279, 3,27 282,
Total 3,33 933, 594, 8,25 872,
of 9,15 854. 699. 5.67 955.
102
Annual Report 2022 of China Fangda Group Co., Ltd.
misc. 4.99 32 33 00
inco
mes
(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
3.
Distr
ibuti
- - -
on to
53,6 53,6 53,6
own
93,7 93,7 93,7
ers
11.3 11.3 11.3
(or
5 5 5
share
hold
ers)
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
Amount of the Previous Term
In RMB
2021
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
1,08 11,4 42,7 106, 4,21 5,38 66,5 5,44
at 2,07
8,27 59,5 48,5 783, 5,00 0,85 38,8 7,39
the 8,16
8,95 88.4 30.1 436. 5,54 7,15 36.0 5,99
end 7.63
1.00 0 2 96 1.52 5.39 9 1.48
of
last
year
C
onso 11,8 13,1
9,00 2,83 1,31
lidati 37,7 53,0
0,00 7,78 5,30
on of 84.2 93.6
0.00 4.25 9.36
entiti 5 1
es
103
Annual Report 2022 of China Fangda Group Co., Ltd.
unde
r
com
mon
contr
ol
2.
Bala
nce
at
1,08 20,4 42,7 106, 4,21 5,39 67,8 5,46
the 2,07
8,27 59,5 48,5 783, 7,84 2,69 54,1 0,54
begi 8,16
8,95 88.4 30.1 436. 3,32 4,93 45.4 9,08
nnin 7.63
1.00 0 2 96 5.77 9.64 5 5.09
g of
curre
nt
year
3.
Chan
ge
amo
unt
- - -
in - 33,2 106, 131, - 130,
14,4 42,7 27,4
the 9,00 47,7 211, 344, 688, 656,
04,7 48,5 58,4
curre 0,00 04.1 933. 947. 113. 833.
24.0 30.1 96.5
nt 0.00 5 56 30 79 51
0 2 3
perio
d (“-
“ for
decr
ease)
(1)
Total 33,2 222, 255, 260,
4,58
of 47,7 168, 415, 005,
9,18
misc. 04.1 142. 846. 033.
6.83
inco 5 53 68 51
mes
(2)
Inve
stme
nt or - - - - - -
- -
decr 14,4 42,7 28,3 115, 124, 125,
9,00 1,31
easin 04,7 48,5 43,8 070, 070, 388,
0,00 7,20
g of 24.0 30.1 06.1 899. 899. 100.
0.00 0.62
capit 0 2 2 38 38 00
al by
own
ers
1.
Com
- - -
mon
14,4 42,7 28,3
share
04,7 48,5 43,8
s
24.0 30.1 06.1
inves
0 2 2
ted
by
104
Annual Report 2022 of China Fangda Group Co., Ltd.
own
ers
- - -
- -
4. 115, 124, 125,
9,00 1,31
Othe 070, 070, 388,
0,00 7,20
rs 899. 899. 100.
0.00 0.62
38 38 00
(3)
- - -
Profi 885,
885, 3,96 3,96
t 309.
309. 0,10 0,10
allot 59
59 0.00 0.00
ment
1.
Prov
ision -
885,
of 885,
309.
surpl 309.
59
us 59
reser
ves
3.
Distr
ibuti
on to - -
own 3,96 3,96
ers 0,10 0,10
(or 0.00 0.00
share
hold
ers)
4.
Bala
nce
at 1,07 11,4 35,3 79,3 4,32 5,52 67,1 5,59
the 3,87 59,5 25,8 24,9 4,05 4,03 66,0 1,20
end 4,22 88.4 71.7 40.4 5,25 9,88 31.6 5,91
of 7.00 0 8 3 9.33 6.94 6 8.60
this
perio
d
8. Statement of Change in Owners' Equity (Parent Company)
Amount of the Current 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
1,073, - 79,324 1,290, 2,443,
1. 360,83
874,22 520,78 ,940.4 879,76 918,97
Balanc 5.52
7.00 6.11 3 0.71 7.55
105
Annual Report 2022 of China Fangda Group Co., Ltd.
e at the
end of
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 - -
-
the 65,430 66,016
585,42
current ,667.9 ,096.8
8.86
period 9 5
(“-
“ for
decrea
se)
(1)
Total - -
-
of 11,736 12,322
585,42
misc. ,956.6 ,385.5
8.86
incom 4 0
es
(3) - -
Profit 53,693 53,693
allotm ,711.3 ,711.3
ent 5 5
2.
Distrib
ution - -
to 53,693 53,693
owners ,711.3 ,711.3
(or 5 5
shareh
olders)
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
Amount of the Previous Term
In RMB
2021
Other equity tools Other
Item Capital Less: Specia Surplu Retain Total
Share miscell
Preferr Perpet reserve Shares l s ed Others of
capital Others aneous
ed ual s in reserve reserve profit owners
incom
106
Annual Report 2022 of China Fangda Group Co., Ltd.
share bond stock e s ' equity
1.
Balanc
1,088, 42,748 - 106,78 1,282, 2,435,
e at the 360,83
278,95 ,530.1 371,12 3,436. 911,97 215,53
end of 5.52
1.00 2 9.71 96 4.38 8.03
last
year
2.
Balanc
e at the 1,088, 42,748 - 106,78 1,282, 2,435,
360,83
beginn 278,95 ,530.1 371,12 3,436. 911,97 215,53
5.52
ing of 1.00 2 9.71 96 4.38 8.03
current
year
3.
Chang
e
amoun
- - -
t in -
14,404 42,748 27,458 7,967, 8,703,
the 149,65
,724.0 ,530.1 ,496.5 786.33 439.52
current 6.40
0 2 3
period
("-" for
decrea
se)
(1)
Total
-
of 8,853, 8,703,
149,65
misc. 095.92 439.52
6.40
incom
es
(2)
Invest
ment
- - -
or
14,404 42,748 28,343
decrea
,724.0 ,530.1 ,806.1
sing of
0 2 2
capital
by
owners
1.
Comm
- - -
on
14,404 42,748 28,343
shares
,724.0 ,530.1 ,806.1
investe
0 2 2
d by
owners
(3)
-
Profit 885,30
885,30
allotm 9.59
9.59
ent
1.
-
Provisi 885,30
885,30
on of 9.59
9.59
surplus
107
Annual Report 2022 of China Fangda Group Co., Ltd.
reserve
s
4.
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
this
period
III. General Information
1. About the Company
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 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 profit distribution plan for 2016 approved by the 2016 general shareholders'
meeting, the Company issued five shares for every ten shares to all shareholders through surplus capitalization based on the total
789,094,836 shares on December 31, 2016. The registered capital at the end of 2017 was RMB 1,183,642,254.00. The Company
repurchased and cancelled 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.
108
Annual Report 2022 of China Fangda Group Co., Ltd.
(formerly known as Fangda Zhichuang Technology Co., Ltd., renamed in January 2022, 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.
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
February 24, 2023.
2. Consolidation Scope and Change
This part of the simplified disclosure is as follows: The Company in the current period includes a total of 34 subsidiaries, of
which 1 have been added this year and 2 have been reduced this year. For details, please refer to "Note 6, Change of the scope of
merger" and "Note 7, Rights and Interests in Other Subjects".
IV. Basis for the preparation of financial statements
1. Preparation basis
The Company prepares the financial statements based on continuous operation and according to actual 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 2014) issued by the CSRC.
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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.
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. 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
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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.
See Note III 6 (5) for the accounting treatment method of business combination under the same control through step-by-step
transaction.
(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 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.
See Note III 6 (5) for the accounting treatment method of business combination under the same control through step-by-step
transaction.
(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.
6. Preparation of Consolidated Financial Statements
(1) Consolidation scope
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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.
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 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) 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.
（3） Processing of subsidiaries during the reporting period
① Increase of subsidiaries or business
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A. Subsidiary or business increased by business combination under the same control
(A) When preparing the consolidated balance sheet, adjust the opening number of the consolidated balance sheet and adjust
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.
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.
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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.
(4) Special considerations in consolidation offsets
① The long-term equity investment held by a subsidiary company shall be regarded as the inventory shares of the Company
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.
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.
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(5) Accounting treatment of special transactions
① Purchase minority shareholders' equity
The Company purchases the shares of the subsidiaries owned by the minority shareholders of the subsidiaries. In the
individual financial statements, the investment costs of the newly acquired long-term investments of 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
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
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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.
A. 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 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.
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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 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.
(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.
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(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.
7. Recognition of cash and cash equivalents
Cash refers to cash in stock and deposits that can be used for payment at any time. Cash equivalents refer 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.
8.Foreign exchange business and foreign exchange statement translation
(1) Methods for determining conversion rates in foreign currency transactions
When the Company's foreign currency transactions are initially confirmed, they will be converted into the bookkeeping
standard currency at the spot exchange rate on the transaction date.
(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
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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. 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.
9. 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:
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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 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.
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The subsequent measurement of financial assets depends on their classification:
① Financial assets measured at amortized cost
Financial assets that meet the following conditions at the same time are classified as financial 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.
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
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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.
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.
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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:
① 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.
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. 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.
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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 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.
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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 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:
The basis for determining the combination of notes receivable is as follows:
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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
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
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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 calculates through default risk exposure and expected credit loss
rate within the next 12 months or the entire duration Expected credit losses.
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
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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;
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;
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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 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.
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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.
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.
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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.
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).
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② Continue to be involved in the transferred financial assets
If neither transfer nor retain almost all the risks and rewards of the ownership of financial assets, 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.
(8) Recognition of fair value of Finance instruments
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For the method of determining the fair value of financial assets and financial liabilities, see Chapter X, V. important
accounting policies and accounting estimates 34. Other important accounting policies and accounting estimates.
10. Notes receivable
See Chapter X, V, Important Accounting Policies and Accounting Estimates 9. Financial Tools.
11. Account receivable
See Chapter X, V, Important Accounting Policies and Accounting Estimates 9. 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.
12. Receivable financing
See Chapter X, V, Important Accounting Policies and Accounting Estimates 9. Financial Tools.
13. Other receivables
Methods for Determining Expected Credit Loss of Other Receivables and Accounting Processing Methods
See Chapter X, V, Important Accounting Policies and Accounting Estimates 9. Financial Tools.
14. Inventories
(1) Classification of inventories
Inventory refers to the finished products or commodities held by the Company for sale in daily activities, the products in
process of production, the materials and materials consumed in the process of production 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
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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.
(4) Recognition of inventory realizable value and providing of impairment provision
On the balance sheet date, inventories are accounted depending on which is lower between the cost and 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 Depreciation preparation of inventory is generally based on a single inventory item; For a large number of inventories
with a lower unit price, they are accrued by inventory type.
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④ 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.
(5) Methods of amortization of swing materials
Low-value consumables are amortized on on-off amortization basis at using.
Packages are amortized on on-off amortization basis at using.
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.
For the determination method and accounting treatment method of the Company's expected credit loss of contract assets, see
9. Financial instruments in Chapter X, V. Important accounting policies and accounting estimates.
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 "other
non current liabilities" according to its liquidity. Contract assets and contract liabilities under different contracts cannot offset each
other.
16. 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:
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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.
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 the amortization period exceeds one year or one normal business cycle at the time of initial recognition.
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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 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
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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;
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;
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.
Long-term equity investments formed by merger of enterprises shall be determined in accordance with the following
provisions:
For long-term equity investment obtained by cash, the actually paid consideration is the initial investment cost. Initial
investment costs include expenses, taxes and other necessary expenditures directly related to the 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.
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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 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
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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.
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 the investment in subsidiaries and associated enterprises, the method of withdrawing asset impairment is shown in
Chapter X, V. important accounting policies and accounting estimates. 24. Impairment of long-term assets.
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 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.
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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 24. 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:
Type Service year (year) Residual rate % Annual depreciation 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.
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 Residual rate
rate %
Houses & buildings Average age 20-50 years 10% 1.8%-4.5%
Mechanical equipment Average age 10 10% 9%
Transportation
Average age 5 10% 18%
facilities
Electronics and other
Average age 5 10% 18%
devices
PV power plants Average age 20 5% 4.75%
For fixed assets for which depreciation provision is made, the depreciation rate will be determined after the accumulative
depreciation provision amount is deducted.
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At end of each fiscal year, verification will be made on the useful life, predicted retained value, and depreciation basis. The
useful life will be adjusted if the useful life is different from the predicted one; the net residual value will be adjusted if the net
residual value is different from the predicted one.
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.
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.
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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.
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.
22. 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:
(1) The initial measurement amount of lease liabilities;
(2) 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;
(3) Initial direct expenses incurred by the lessee;
(4) 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 29. Estimated
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liabilities in Chapter X, V. important accounting policies and accounting estimates for details. If the above costs are incurred for
the production of 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.
23. Intangible assets
(1) Pricing method, service life and depreciation test
Pricing of intangible assets
Recorded at the actual cost of acquisition.
Amortization of intangible assets
① Useful life of intangible assets with limited useful life
Item Estimated useful life Basis
Land using right Term Use right assets
Reference to determine the lifetime of a company for which it
Trademarks and patents 10
can bring economic benefits
Reference to determine the lifetime of a company for which it
Proprietary technology 10
can bring economic benefits
Reference to determine the lifetime of a company for which it
Software 5. 10 years
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
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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.
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) Accounting policies for internal R&D expenses
Specific standard for distinguish between research and development stage
① The Company takes the information and related preparatory activities for further development 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;
B. Have the intention to complete the intangible asset and use or sell it;
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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.
24. 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.
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.
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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.
25. 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.
26. Contract liabilities
See 15. Contract assets in Chapter X, V. Important Accounting Policies and Accounting Estimates for details.
27. Staff remuneration
(1) Accounting of operational leasing
① Basic salary of employees (salary, bonus, allowance, subsidy)
In the accounting period for which the staff and workers provide services, the Company shall confirm 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
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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.
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.
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28. 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:
(1) Fixed payment amount and substantial fixed payment amount. If there is lease incentive, the relevant amount of lease
incentive shall be deducted;
(2) Variable lease payments depending on index or ratio;
(3) The exercise price of the purchase option, provided that the lessee reasonably determines that the option will be exercised;
(4) 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;
(5) 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 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.
29. Anticipated liabilities
(1) Recognition standards of anticipated liabilities
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;
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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.
30. Revenue
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.
(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 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
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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.
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 performance schedule of providing services according to the input 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;
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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 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
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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
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 project 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.
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(2) Specific methods
The specific methods of revenue recognition of the Company are as follows:
① Commodity sales contract
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.
② 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.
③ 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
recognizes the income according to the performance progress, except that the performance progress cannot be reasonably
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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.
④ 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. Based on the terms of the sales contract and the legal provisions applicable to the contract, the control
of the property can be transferred within a certain period of time or at a certain point in time. Only if the goods produced by the
Company during the performance of the contract have irreplaceable uses, and the Company has the right to collect payment for the
cumulative performance part that has been completed during the entire contract period, the performance obligation has been
completed during the contract period. The progress is recognized as revenue within a period of time, and the progress of the
completed performance obligations is determined in accordance with the ratio of the contract costs actually incurred to complete
the performance obligations to the estimated total cost of the contract. Otherwise, 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) Differences in revenue recognition accounting policies caused by different business models of similar businesses
There is no difference in revenue recognition due to the adoption of different accounting policies for similar businesses.
31. 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
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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:
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
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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.
32. Differed income tax assets and differed income tax liabilities
The Company uses the temporary difference between the book value of the assets and liabilities on the 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;
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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;
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 For the taxable temporary differences related to the investment of subsidiaries and associated enterprises, the impact on
income tax is generally recognized as deferred income tax liabilities, except that the following two conditions are met at the same
time:
A. The Company is able to control the time of temporary discrepancy transfers;
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B Temporary discrepancies are likely to be reversed in the foreseeable future;
(3) Deferred income tax assets
(1) Deferred income tax liabilities or assets associated with enterprise 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 impact of
temporary differences on income tax is included in the transactions or events of owner's equity, including: other comprehensive
income formed by changes in the fair value of other creditor's rights investment, retroactive adjustment method for changes in
accounting policies or retroactive restatement method for correction of previous (important) accounting errors, adjustment of
opening retained earnings, and mixed financial instruments containing both liability and equity components are included in
owner's equity at initial recognition.
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.
33. 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
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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.
(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;
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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 according to the recognition standard and measurement method of estimated liabilities. If the above
costs are incurred for the production of 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 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
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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.
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;
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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
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
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The Company assesses and determines whether the asset transfer in the sale and leaseback transaction is a sale in
accordance with the provisions of 30. 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 9。 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 9. Financial 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.
34. Other significant accounting policies and estimates
(1) Measurement of Fair Value
Fair value refers to the amount of asset exchange or liabilities settlement by both transaction 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.
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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 Valuation technology
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
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.
(2) Accounting of hedging
(2.1) Classification of inventories
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The Company's hedge is a cash flow hedge.
Cash flow hedging refers to the hedging of cash flow risk. The change in cash flow is derived from 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.
(2.2) 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:
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.
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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:
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.
(2.3) 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 in the value changes caused by
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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.
(2.4) 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:
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 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) Repurchase of the Company's shares
(3.1) In the event of a reduction in the Company's share capital as approved by legal procedure, the Company shall reduce
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
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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.
(3.2) 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.
(3.3) 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.
(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 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
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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.
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
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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.
35. Major changes in accounting policies and estimates
1. Changes in important accounting policies
Applicable □ Inapplicable
①Implement the provisions of the Accounting Standards for Business Enterprises Interpretation No. 15 on "accounting
treatment for the external sales of products or by-products produced by enterprises before the fixed assets reach the
intended usable state or during the research and development process" and "judgment on loss contracts"
On December 30, 2021, the Ministry of Finance issued the Interpretation of Accounting Standards for Business Enterprises
No. 15 (Cai Kuai [2001] No. 35) (hereinafter referred to as "Interpretation No. 15"), Among them, the contents of "Accounting
treatment for the external sales of products or by-products produced by enterprises before the fixed assets reach the expected
usable state or during the research and development process" (hereinafter referred to as "Accounting treatment provisions for trial
operation sales") and "Judgment on loss contracts" shall be implemented as of January 1, 2022. The implementation of the relevant
provisions of the Interpretation No. 15 has no significant impact on the financial statements of the Company during the reporting
period.
②Implement the interpretation of accounting standards for Business Enterprises No. 16
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On November 30, 2022, the Ministry of Finance issued the Interpretation of Accounting Standards for Business Enterprises
No. 16 (Cai Kuai [2002] No. 31, hereinafter referred to as Interpretation No. 16), "Accounting treatment of the income tax impact
of dividends related to financial instruments classified as equity instruments by the issuer", "Accounting treatment of enterprises'
modification of cash-settled share-based payments to equity-settled share-based payments", the contents of which shall be
implemented as of the date of promulgation. The implementation of the relevant provisions of the Interpretation No. 16 has no
significant impact on the financial statements of the Company during the reporting period.
(2) Changes in major accounting estimates
□ Applicable Inapplicable
VI. Taxation
1. Major taxes and tax rates
Tax Tax basis Tax rate
VAT Taxable income 1%, 3%, 5%, 6%, 9%, 13%
City maintenance and construction tax Taxable turnover 1%, 5%, 7%
Enterprise income tax Taxable income See the following table
Education surtax Taxable turnover 3%
Local education surtax Taxable turnover 2%
Tax rates applicable for different tax payers
Tax payer Income tax rate
The Company 25%
Fangda Jianke 15%
Fangda Zhiyuan Technology 15%
Fangda Jiangxi New Material 15%
Chengdu Fangda Construction Technology Co., Ltd. (hereinafter Fangda
15%
Chengdu Technology)
Dongguan Fangda New Material Co., Ltd. (hereinafter Fangda Dongguan
15%
New Material)
Fangda Property 25%
Fangda New Energy 25%
Shenzhen Fangda Property Development Co., Ltd. (hereinafter Fangda
25%
Property Development)
Jiangxi Fangda Property Development Co., Ltd. (hereinafter Fangda Jiangxi
25%
Property Development)
Pingxiang Fangda Luxin New Energy Co., Ltd. (hereinafter Fangda Luxin
25%
New Energy)
Nanchang Xinjian Fangda New Energy Co., Ltd. (hereinafter Fangda
25%
Xinjian New Energy)
Dongguan Fangda New Energy Co., Ltd. (hereinafter Fangda Dongguan
25%
New Energy)
Shenzhen QIanhai Kechuangyuan Software Co., Lt.d (hereinafter
25%
Kechuangyuan Software)
Fangda Zhiyuan Technology (Hong Kong) Co., Ltd. (formerly known as
Fangda Zhichuang Technology (Hong Kong) Co., Ltd., hereinafter referred 16.50%
to as Fangda Zhiyuan Technology (Hong Kong) Co., Ltd.)
Fangda Zhiyuan Technology (Wuhan) Co., Ltd. (formerly known as Fangda
25%
Zhichuang Technology (Wuhan) Co., Ltd., hereinafter referred to as Fangda
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Zhiyuan Technology (Wuhan) Co., Ltd.)
Fangda Zhiyuan Technology (Nanchang) Co., Ltd. (formerly known as
Fangda Zhichuang Technology (Nanchang) Co., Ltd., hereinafter referred to 25%
as Fangda Zhiyuan Technology Nanchang Company)
Fangda Zhiyuan Technology (Dongguan) Co., Ltd. (formerly known as
Fangda Zhichuang Technology (Dongguan) Co., Ltd., hereinafter referred to 25%
as Fangda Zhiyuan Technology (Dongguan) Co., Ltd.)
General Rail Technology Private Limited 17%
Shihui International Holding Co., Ltd. (hereinafter Fangda Shihui
16.50%
International)
Shenzhen Hongjun Investment Co., Ltd. (hereinafter Fangda Hongjun
25%
Investment)
Fangda Australia Pty Ltd 30%
Shanghai Fangda Zhijian Technology Co., Ltd. (hereinafter referred to as
15%
Fangda Shanghai Zhijian company)
Shenzhen Fangda Yunzhi Technology Co., Ltd. (formerly known as
Shenzhen Fangda Yunzhi Technology Co., Ltd., hereinafter referred to as 25%
Fangda Yunzhi)
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
25%
Chengdu Curtain Wall)
Fangda Southeast Asia Co., Ltd. (hereinafter Fangda Southeast Asia) 20%
Shenzhen Xunfu Investment Co., Ltd. (hereinafter referred to as Fangda
25%
Xunfu 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
16.50%
Kong)
Shenzhen Fangda Yunzhu Technology Co., Ltd. (formerly known as
Shenzhen Yunzhu Industry Co., Ltd., hereinafter referred to as Fangda 15%
Yunzhu Company)
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)
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%.
(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
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Annual Report 2022 of China Fangda Group Co., Ltd.
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 December 3, 2020, the subsidiary Fangda Chengdu Technology obtained the certificate of high tech enterprise No.
GR202051002193 jointly issued by the Department of Science and Technology of Sichuan Province, the Department of Finance of
Sichuan Province, the State Administration of Taxation and the Sichuan Provincial Taxation Bureau. Within three years after
obtaining the qualification of high tech enterprise (2020-2022), the income tax will continue to be levied at 15%.
(5) On December 22, 2022, the subsidiary Fangda Dongguan New Materials Co., Ltd. obtained the certificate of high tech
enterprise No.GR202244006622 jointly issued by Guangdong Provincial Department of science and technology, Guangdong
Provincial Department of Finance and Guangdong Provincial Taxation Bureau. Within three years (from 2022 to 2024) after
obtaining the qualification of high tech enterprise, the income tax will be charged at 15%.
(6) 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)(the Regulation shall be implemented from January 1,
2021 to December 31, 2025), and the income tax is levied at 15%.
(7) On November 12, 2020, the subsidiary Fangda Shanghai Zhijian obtained the certificate of high tech enterprise
No.GR202031001525 jointly issued by Shanghai Science and Technology Commission, Shanghai Finance Bureau and Shanghai
Taxation Bureau. Within three years (from 2020 to 2022) after obtaining the qualification of high tech enterprise, the income tax
will continue to be charged at 15%.
(8) On December 11, 2020, 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 GR202044202438. Within three years after obtaining the qualification
of high tech enterprise (from 2020 to 2022), the income tax will be levied at 15%.
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(9) According to the Notice of the Ministry of Finance and the State Administration of Taxation on the Implementation of the
Inclusive Tax Reduction Policy for Small and Micro Enterprises (CS [2019] No. 13), the Notice of the Ministry of Finance and the
State Administration of Taxation on the Implementation of the Income Tax Preferential Policy for Small and Micro Enterprises
and Individual Businesses (Announcement of the General Administration of Taxation of the Ministry of Finance, No. 12, 2021)
According to the Announcement of the State Administration of Taxation on the Implementation of the Preferential Policies for the
Development of Income Tax for Small and Micro-profit Enterprises and Individual Businesses (Announcement No. 8 of the State
Administration of Taxation in 2021) and the Announcement of the State Administration of Taxation of the Ministry of Finance on
the Further Implementation of the Preferential Policies for Income Tax for Small and Micro-profit Enterprises (Announcement No.
13 of the State Administration of Taxation in 2022), some companies belong to small and micro-profit enterprises in 2022, Their
income shall be subject to enterprise income tax in accordance with the provisions of the above documents.
VII. Notes to the consolidated financial statements
1. Monetary capital
In RMB
Item Closing balance Opening balance
Inventory cash: 149.81 3,192.76
Bank deposits 809,288,523.64 910,763,535.83
Other monetary capital 429,465,543.05 376,797,030.73
Total 1,238,754,216.50 1,287,563,759.32
Including: total amount deposited in
49,596,440.24 43,244,091.68
overseas
The total amount of money
that has restrictions on use due to 455,076,287.44 395,312,687.73
mortgage, pledge or freezing
Others:
(1) The restricted funds used in the ending balance of bank deposits are RMB32,904,822.35, including
RMB241,305.03 in the real estate development supervision account, RMB19,342,686.90 in the labor insurance
special account and migrant workers' wage special account, RMB13,213,791.84 in the loan supervision account,
and RMB107,038.58 in the fixed deposit interest; In the closing balance of other monetary funds, the funds with
limited use are RMB422,171,465.09, mainly including bill deposit, stage guarantee deposit, and guarantee
deposit issued. 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.
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(2) In the preparation of the cash flow statement, the above-mentioned deposits and other restricted deposits
are not used as cash and cash equivalents.
(3) At the end of the period, the Company's total amount deposited abroad was RMB49,596,440.24.
2. Transactional financial assets
In RMB
Item Closing balance Opening balance
Financial assets measured at fair value
with variations accounted into current 25,135,241.89
income account
Including: Investment of financial
25,135,241.89
products
Total 25,135,241.89
3. Derivative financial assets
In RMB
Item Closing balance Opening balance
Futures contracts 310,325.00
Forward foreign exchange contract 789,205.34 759,262.62
Total 789,205.34 1,069,587.62
4. Notes receivable
(1) Classification of notes receivable
In RMB
Item Closing balance Opening balance
Bank acceptance 111,994,295.62 133,618,433.58
Commercial acceptance 18,434,258.87 32,759,446.43
Total 130,428,554.49 166,377,880.01
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
Includin
g:
Notes
132,708, 2,280,16 130,428, 168,962, 2,584,70 166,377,
receivab 100.00% 1.72% 100.00% 1.53%
717.05 2.56 554.49 589.90 9.89 880.01
le with
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provisio
n for bad
debts by
portfolio
Includin
g:
Commer
cial 114,274, 2,280,16 111,994, 136,203, 2,584,70 133,618,
86.11% 2.00% 80.61% 1.90%
acceptan 458.18 2.56 295.62 143.47 9.89 433.58
ce
Bank
18,434,2 18,434,2 32,759,4 32,759,4
acceptan 13.89% 19.39%
58.87 58.87 46.43 46.43
ce
132,708, 2,280,16 130,428, 168,962, 2,584,70 166,377,
Total 100.00% 1.72% 100.00% 1.53%
717.05 2.56 554.49 589.90 9.89 880.01
Provision for bad debts by combination: trade acceptance
In RMB
Closing balance
Name
Remaining book value Bad debt provision Provision rate
Commercial acceptance 114,274,458.18 2,280,162.56 2.00%
Total 114,274,458.18 2,280,162.56
Provision for bad debts by combination: bank acceptance
In RMB
Closing balance
Name
Remaining book value Bad debt provision Provision rate
Bank acceptance 18,434,258.87 0.00 0.00%
Total 18,434,258.87 0.00
If the provision for bad debts of bills receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose information about bad debts:
□ Applicable Inapplicable
(2) 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
Commercial
2,584,709.89 -304,547.33 2,280,162.56
acceptance
Total 2,584,709.89 -304,547.33 2,280,162.56
Including significant recovery or reversal:
□ Applicable Inapplicable
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(3) 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 17,869,328.87
Commercial acceptance 6,677,013.28
Total 24,546,342.15
(4) Notes transferred to accounts receivable due to default of the issue at the end of period
In RMB
Item Amount transferred to accounts receivable at the end of the period
Commercial acceptance 44,712,018.28
Total 44,712,018.28
5. Account receivable
(1) Account receivable disclosed by categories
In RMB
Closing balance Opening balance
Remaining book Remaining book
Bad debt provision Bad debt provision
Type value Book value Book
Propo Provisio value Proporti Provisio value
Amount Amount Amount Amount
rtion n rate on n rate
Account
receivable
for which
89,501,87 8.46 83,454,2 6,047,64 83,718,6 78,221,0 5,497,62
bad debt 93.24% 11.18% 93.43%
5.22 % 34.68 0.54 40.09 18.60 1.49
provision
is made
by group
Including:
1.
54,873,22 5.19 54,873,2 54,873,2 54,873,2
Customer 100.00% 7.32% 100.00%
3.21 % 23.21 23.21 23.21
1
2.
13,461,83 1.27 13,461,8 13,461,8 13,461,8
Customer 100.00% 1.80% 100.00%
4.96 % 34.96 34.96 34.96
2
3.
4,998,860. 0.47 2,499,43 2,499,43 4,998,86 2,499,43 2,499,43
Customer 50.00% 0.67% 50.00%
10 % 0.06 0.04 0.10 0.06 0.04
3
4.
7,096,421. 0.67 3,548,21 3,548,21 5,996,38 2,998,19 2,998,19
Customer 50.00% 0.80% 50.00%
00 % 0.50 0.50 2.91 1.46 1.45
4
5.
9,071,535. 0.86 9,071,53 4,388,33 4,388,33
Customer 100.00% 0.59% 100.00%
95 % 5.95 8.91 8.91
5
Account 968,358,4 91.54 142,113, 14.68% 826,244, 664,994, 88.82% 114,038, 17.15% 550,956,
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receivable 65.15 % 757.52 707.63 519.44 316.73 202.71
for which
bad debt
provision
is made
by group
Including:
1.
Portfolio
1:
714,451,9 67.54 128,787, 585,664, 414,989, 101,816, 313,172,
Engineeri 18.03% 55.43% 24.53%
19.44 % 757.87 161.57 471.61 476.32 995.29
ng
operation
s section
2.
Portfolio
2: Real 167,560,2 15.84 7,893,60 159,666, 153,920, 7,774,66 146,146,
4.71% 20.56% 5.05%
estate 35.16 % 5.97 629.19 735.18 0.29 074.89
business
payments
3.
Portfolio
86,346,31 8.16 5,432,39 80,913,9 96,084,3 4,447,18 91,637,1
3: Other 6.29% 12.83% 4.63%
0.55 % 3.68 16.87 12.65 0.12 32.53
business
models
1,057,860, 100.0 225,567, 832,292, 748,713, 192,259, 556,453,
Total 21.32% 100.00% 25.68%
340.37 0% 992.20 348.17 159.53 335.33 824.20
Separate bad debt provision:
In RMB
Closing balance
Name Remaining book
Bad debt provision Provision rate Reason
value
Customer credit status deteriorates and
1. Customer 1 54,873,223.21 54,873,223.21 100.00%
is hard to recover
Customer credit status deteriorates and
2. Customer 2 13,461,834.96 13,461,834.96 100.00%
is hard to recover
3. Customer 3 4,998,860.10 2,499,430.06 50.00% Customer credit status deteriorates
4. Customer 4 7,096,421.00 3,548,210.50 50.00% Customer credit status deteriorates
Customer credit status deteriorates and
5. Customer 5 9,071,535.95 9,071,535.95 100.00%
is hard to recover
Total 89,501,875.22 83,454,234.68
Provision for bad debts by combination: Portfolio 1: Engineering business
In RMB
Closing balance
Name
Remaining book value Bad debt provision Provision rate
Less than 1 year 382,919,778.43 7,506,149.45 1.96%
1-2 years 123,887,342.34 7,012,023.57 5.66%
2-3 years 45,783,561.85 5,841,982.50 12.76%
3-4 years 49,929,170.68 9,866,004.13 19.76%
4-5 years 23,522,990.73 10,152,522.81 43.16%
Over 5 years 88,409,075.41 88,409,075.41 100.00%
Total 714,451,919.44 128,787,757.87
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Group recognition basis:
See 9. 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
Closing balance
Name
Remaining book value Bad debt provision Provision rate
Less than 1 year 123,037,500.21 1,230,375.00 1.00%
1-2 years 71,145.32 3,557.27 5.00%
2-3 years 80,647.44 4,032.37 5.00%
3-4 years
4-5 years 22,273,070.00 3,340,960.50 15.00%
Over 5 years 22,097,872.19 3,314,680.83 15.00%
Total 167,560,235.16 7,893,605.97
Provision for bad debts by combination: portfolio 3: Others business
In RMB
Closing balance
Name
Remaining book value Bad debt provision Provision rate
Less than 1 year 64,757,643.57 472,730.80 0.73%
1-2 years 10,834,500.58 227,524.52 2.10%
2-3 years 3,942,000.67 331,916.46 8.42%
3-4 years 2,451,415.25 607,460.69 24.78%
4-5 years 4,197,979.88 3,629,990.61 86.47%
Over 5 years 162,770.60 162,770.60 100.00%
Total 86,346,310.55 5,432,393.68
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose information about bad debts:
□ Applicable Inapplicable
Account age
In RMB
Age Remaining book value
Within 1 year (inclusive) 648,121,516.33
1-2 years 135,225,634.55
2-3 years 49,806,209.96
Over 3 years 224,706,979.53
3-4 years 54,194,564.87
4-5 years 58,235,655.84
Over 5 years 112,276,758.82
Total 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.
Customer Balance of accounts Balance of provision for bad Reason of the age Whether there is a risk
receivable of over 3 years debts of recovery
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Customer 1 54,873,223.21 54,873,223.21 Customer credit status Yes
deteriorates
Customer 2 25,647,044.22 25,647,044.22 Customer credit status Yes
deteriorates
Customer 3 17,374,148.42 17,374,148.42 Customer credit status Yes
deteriorates
Customer 4 13,461,834.96 13,461,834.96 Customer credit status Yes
deteriorates
(2) 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 debt
78,221,018.60 9,621,554.99 4,388,338.91 83,454,234.68
provision
Provision for bad
debts by 114,038,316.73 29,530,880.52 1,455,439.73 142,113,757.52
combination
Total 192,259,335.33 39,152,435.51 4,388,338.91 1,455,439.73 225,567,992.20
Including significant recovery or reversal:
In RMB
Written-back or recovered
Entity Method
amount
After applying for bankruptcy liquidation, the customer
Customer 1 4,388,338.91 shall have priority to receive compensation and be
recovered by bank transfer
Total 4,388,338.91
After the Company verified that 100% of the bad debt reserves were withdrawn in the early stage, it was difficult for the
management to recover the original accounts receivable in full. Subsequently, the company made unremitting efforts to obtain the
priority right of repayment of the project funds through litigation, application for bankruptcy liquidation of the customer, and
finally recovered the above funds through priority repayment after the bankruptcy liquidation of the customer 1.
(3) Written-off account receivable during the period
In RMB
Item Amount
Account receivable written off 1,455,439.73
(4) Balance of top 5 accounts receivable at the end of the period
In RMB
Closing balance of accounts Balance of bad debt provision
Entity Percentage (%)
receivable at the end of the period
No.1 94,349,640.05 8.92% 48,873,302.85
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Annual Report 2022 of China Fangda Group Co., Ltd.
No.2 61,265,539.43 5.79% 6,679,120.90
No.3 54,873,223.21 5.19% 54,873,223.21
No.4 37,413,214.07 3.53% 733,299.00
No.5 31,500,000.00 2.98% 1,784,736.49
Total 279,401,616.76 26.41%
(5) Amount of assets and liabilities formed by transferring accounts receivable and continuing
involvement
Transfer method of Amount of assets formed by Amount of liabilities formed by
Item
assets continued involvement continued involvement
Customer 1 Credit discount 1,637,287.44 1,637,287.44
Total 1,637,287.44 1,637,287.44
(6) Receivables derecognized due to transfer of financial assets
Transfer method of financial Gain or loss related to the de-
Item De-recognized amount
assets recognition
Customer 1 Factoring 20,793,323.45 -766,342.66
Customer 2 Factoring 1,500,000.00 -81,221.92
Customer 3 Factoring 1,750,233.20 -65,862.60
Customer 4 Factoring 6,704,345.94 -284,711.22
Customer 5 Factoring 6,845,674.82 -240,379.89
Customer 6 Factoring 17,601,403.70 -603,716.91
Customer 7 Factoring 2,319,372.24 -92,748.47
Customer 8 Factoring 10,590,826.29 -420,435.43
Customer 9 Factoring 18,382,512.81 -674,142.74
Customer 10 Factoring 5,993,538.94 -237,020.51
Customer 11 Factoring 1,663,330.96 -53,975.09
Customer 12 Factoring 2,654,800.00 -102,947.24
Customer 13 Factoring 5,000,000.00 -65,625.00
Customer 14 Factoring 1,842,845.54 -88,941.28
Total 103,642,207.89 -3,778,070.96
6. Receivable financing
In RMB
Item Closing balance Opening balance
Notes receivable 1,338,202.01 4,263,500.00
Total 1,338,202.01 4,263,500.00
Increase or decrease in the current period of receivables financing and changes in fair value
□ Applicable Inapplicable
If the provision for financing impairment of receivables is accrued in accordance with the general expected credit loss model,
please refer to the disclosure of other receivables to disclose the relevant information of the impairment provision:
□ Applicable Inapplicable
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7. Prepayment
(1) Account ages of prepayments
In RMB
Closing balance Opening balance
Age
Amount Proportion Amount Proportion
Less than 1 year 14,930,557.32 72.37% 18,013,831.62 78.24%
1-2 years 2,913,056.11 14.12% 805,756.05 3.50%
2-3 years 582,237.19 2.82% 2,467,980.33 10.72%
Over 3 years 2,205,799.97 10.69% 1,734,917.03 7.54%
Total 20,631,650.59 23,022,485.03
Explanation of non-settlement of significant prepayments with an accounting age of more than 1 year:
At the end of the period, there is no significant prepayment with an aging of more than one year.
(2) Balance of top 5 prepayments at the end of the period
The total of top5 prepayments in terms of the prepaid entities in the period is RMB7,174,864.45,
accounting for 34.78% of the total prepayments at the end of the period.
8. Other receivables
In RMB
Item Closing balance Opening balance
Other receivables 155,379,024.22 165,093,406.23
Total 155,379,024.22 165,093,406.23
(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 99,789,014.58 106,427,141.89
Construction borrowing and advanced
33,008,395.75 31,857,018.14
payment
Staff borrowing and petty cash 1,439,503.90 1,828,554.92
VAT refund receivable 1,946,422.08 4,903,075.25
Debt by Luo Huichi 11,242,291.48 12,992,291.48
Others 30,122,981.20 29,074,979.66
Total 177,548,608.99 187,083,061.34
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Annual Report 2022 of China Fangda Group Co., Ltd.
2) Method of bad debt provision
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,
2,216,451.18 573,868.37 19,199,335.56 21,989,655.11
2022
Balance on January 1,
2022 in the current period
Provision -152,479.64 -456,184.11 2,538,593.41 1,929,929.66
Transferred back in the
1,750,000.00 1,750,000.00
current period
Balance on December 31,
2,063,971.54 117,684.26 19,987,928.97 22,169,584.77
2022
Changes in book balances with significant changes in the current period
□ Applicable Inapplicable
Account age
In RMB
Age Remaining book value
Within 1 year (inclusive) 23,108,291.98
1-2 years 6,830,367.09
2-3 years 22,325,214.95
Over 3 years 125,284,734.97
3-4 years 18,001,035.18
4-5 years 70,858,183.77
Over 5 years 36,425,516.02
Total 177,548,608.99
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
13,035,168.48 3,741,789.11 1,750,000.00 15,026,957.59
debt provision
Provision for
bad debts by 8,954,486.63 -1,811,859.45 7,142,627.18
combination
Total 21,989,655.11 1,929,929.66 1,750,000.00 22,169,584.77
Including significant recovery or reversal:
186
Annual Report 2022 of China Fangda Group Co., Ltd.
In RMB
Entity Written-back or recovered amount Method
Luo Huichi 1,750,000.00 Recovery through bank transfer
Total 1,750,000.00 ——
4) 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
Shenzhen Yikang
Margin and current
Real Estate Co. 70,062,675.83 4-5 years 39.46% 1,043,933.87
account
Ltd.
Bangshen
Electronics
Deposit 20,000,000.00 Over 5 years 11.26% 298,000.00
(Shenzhen) Co.,
Ltd.
Shenzhen
Rijiasheng Trading Arrears 18,708,945.57 2-3 years 10.54% 3,741,789.11
Co., Ltd
Debt by Luo
Luo Huichi 11,242,291.48 Over 5 years 6.33% 11,242,291.48
Huichi
Shenzhen
Henggang Dakang Deposit 8,000,000.00 4-5 years 4.51% 119,200.00
Co., Ltd.
Total 128,013,912.88 72.10% 16,445,214.46
5) Items involving government subsidies:
In RMB
Estimated time,
Entity Governmental subsidy Closing balance Closing age amount and basis of
receipt
Shenzhen Tax Bureau
Full recovered in less
of State Administration Receivable refund of VAT 1,946,422.08 Less than 1 year
than 1 year
of Taxation
9. Inventories
Whether the Company needs to comply with disclosure requirements of the real estate industry.
Yes
(1) Classification of inventories
The Company needs to comply with the disclosure requirements of the real estate industry in the Guidelines for the Self-discipline
and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.
Classified by nature:
187
Annual Report 2022 of China Fangda Group Co., Ltd.
In RMB
Closing balance Opening balance
Provision Provision
for for
inventory inventory
depreciati depreciati
Item on or on or
Remaining book Remaining book
contract Book value contract Book value
value value
performan performan
ce cost ce cost
impairme impairme
nt nt
provision provision
Development
219,112,637.71 219,112,637.71 214,159,331.62 214,159,331.62
cost
Development
150,695,868.79 150,695,868.79 215,045,857.53 215,045,857.53
products
Contract
performance 88,165,638.94 88,165,638.94 120,770,607.88 120,770,607.88
costs
Raw materials 124,041,162.65 124,041,162.65 87,964,749.50 87,964,749.50
Product in
95,231,082.82 95,231,082.82 71,066,791.34 71,066,791.34
process
Finished goods
8,937,351.29 8,937,351.29 7,514,662.13 7,514,662.13
in stock
Low price
193,880.28 193,880.28 190,365.86 190,365.86
consumable
OEM materials 22,479,288.26 22,479,288.26 16,568,559.12 16,568,559.12
Goods
1,675,486.58 1,675,486.58
delivered
Total 710,532,397.32 710,532,397.32 733,280,924.98 733,280,924.98
Development cost and capitalization rate of its interest are disclosed as follows:
In RMB
Includi
Transfe Increas
ng:
rred to e Accum
Estimat Estimat Other capitali
Openin develop (develo ulative
Project Starting ed ed total decreas Closing zed Capital
g ment pment capitali
name time finish investm e in this balance interest source
balance product cost) in zed
time ent period for the
in this this interest
current
period period
period
Dakang
Village
Decem Decem 3,600,0
Project 199,023 1,185,6 200,209 Bank
ber 1, ber 31, 00,000. 0.00 0.00 0.00 0.00
in ,484.28 33.64 ,117.92 loan
2024 2030 00
Shenzh and
en self-
Fangda owned
Bangsh Decem Decem fund
870,000 15,135, 3,767,6 18,903,
en ber 1, ber 31, 0.00 0.00 0.00 0.00
,000.00 847.34 72.45 519.79
Industr 2023 2025
y Park
4,470,0 214,159 4,953,3 219,112
Total -- -- 0.00 0.00 0.00 0.00 --
00,000. ,331.62 06.09 ,637.71
188
Annual Report 2022 of China Fangda Group Co., Ltd.
00
Disclose the main project information of "Development Products" according to the following format:
In RMB
Including:
Accumulative capitalized
Completion Opening Increa Closing
Project name Decrease capitalized interest for
time balance se balance
interest the current
period
Phase I of 29 December 22,535,391.3
62,930,177.37 40,394,785.98 867,152.26 0.00
Fangda Town 2016 9
Nanchang
April 27, 128,160,477.
Fangda 152,115,680.16 23,955,202.76 4,956,638.66 0.00
2021 40
Center
150,695,868.
Total -- 215,045,857.53 64,349,988.74 5,823,790.92 0.00
79
(2) Capitalization rate of interest in the closing inventory balance
As of December 31, 2022, the capitalization amount of borrowing costs in the ending
inventory balance is RMB5,823,790.92.
10. Contract assets
In RMB
Closing balance Opening balance
Item Remaining Impairment Remaining Impairment
Book value Book value
book value provision book value provision
Completed and
unsettled
project funds 2,176,000,625. 2,002,607,254. 1,846,449,787. 1,699,828,435.
173,393,371.22 146,621,352.05
that fail to meet 48 26 26 21
the collection
conditions
Quality
guarantee
deposit that
133,413,895.62 19,336,873.48 114,077,022.14 57,766,007.09 8,365,574.02 49,400,433.07
fails to meet the
collection
conditions
Sales funds
with
42,541,809.75 365,427.72 42,176,382.03 34,103,742.16 384,937.31 33,718,804.85
conditional
collection right
2,351,956,330. 2,158,860,658. 1,938,319,536. 1,782,947,673.
Total 193,095,672.42 155,371,863.38
85 43 51 13
The amount and reasons for major changes in the book value of contract assets during the current period:
In RMB
Item Change Reason
This is mainly due to the unsettled project
Completed and unsettled project funds 329,550,838.22
funds with conditional collection rights
189
Annual Report 2022 of China Fangda Group Co., Ltd.
arising from the revenue recognized in the
project contract this year
It is mainly caused by the increase of warranty
Warranty 75,647,888.53
deposit due within one year
Total 405,198,726.75 ——
If the provision for bad debts of contract assets is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose information about bad debts:
□ Applicable Inapplicable
Provision made for bad debts of contract assets in this period
In RMB
Transferred back in Written off in the
Item Provision Reason
the current period current period
Separate bad debt provision -9,455,813.64
Provision for bad debts by
47,179,622.68
combination
Total 37,723,809.04 ——
11. Other current assets
In RMB
Item Closing balance Opening balance
Reclassification of VAT debit balance 174,264,248.29 145,743,267.08
Overpayment and prepayment of income
3,997,524.27 98,092,258.00
tax
Other prepaid taxes 3,348,706.84 8,520,856.65
Payment to be collected on behalf of
12,015,367.57
suppliers
Subsidiary IPO intermediary fee 2,064,871.00
Deferred discount expenses and others 5,291,245.63 12,430,124.56
Total 200,981,963.60 264,786,506.29
12. Long-term share equity investment
In RMB
Change (+,-)
Balance
Investm of
ent gain impair
Other Cash
Openin and loss Closing ment
Investe Increas Decreas miscell dividen Impair
g book recogni Other book provisi
d entity ed ed aneous d or ment
value zed equity Others value on at
invest investm income profit provisi
using change the end
ment ent adjustm announ on
the of the
ent ced
equity period
method
1. Joint venture
2. Associate
Gansha 2,365,3 20,096. 2,385,4
ng Joint 99.31 59 95.90
190
Annual Report 2022 of China Fangda Group Co., Ltd.
Investm
ent
Jiangxi
Busines
s
Innovat
ive
Propert -
52,853, 52,583,
y Joint 270,000
546.83 546.24
Stock .59
(Jiangxi
Busines
s
Inovati
on)
-
Subtota 55,218, 54,969,
249,904
l 946.14 042.14
.00
-
55,218, 54,969,
Total 249,904
946.14 042.14
.00
13. Investment in other equity tools
In RMB
Item Closing balance Opening balance
Unlisted equity instrument investment 11,968,973.86 14,180,652.65
Total 11,968,973.86 14,180,652.65
Sub-disclosure of non-tradable equity instrument investment in the current period
In RMB
Amount Reason for
of other measurement
Reason for
comprehe at fair value
transfer of
Dividend nsive with
other
Project name recognized in Total gain Total loss income variations
miscellaneou
the period transferre accounted into
s into
d to current
income
retained income
earnings account
Shenyang Fangda 16,593,601.81
Shenzhen Huihai Yirong
3,779,277.52
Internet Service 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 7,507,434.68 7,525,408.24
income account
191
Annual Report 2022 of China Fangda Group Co., Ltd.
Total 7,507,434.68 7,525,408.24
15. Investment real estates
(1) Investment real estate measured at costs
Applicable □ Inapplicable
In RMB
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 7,253,011.36 7,253,011.36
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 7,702,419.40 7,702,419.40
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 9,686,404.99 9,686,404.99
2. Opening book value 10,135,813.03 10,135,813.03
(2) Investment real estate measured at fair value
Applicable □ Inapplicable
Item Houses & buildings Total
I. Opening balance 5,755,216,580.10 5,755,216,580.10
II. Change in this period -4,385,407.98 -4,385,407.98
Add: Transfer-in from inventory\fixed
27,649,775.66 27,649,775.66
assets\construction in progress
Less: disposal 8,622,022.15 8,622,022.15
Other transfer-out 17,660,490.58 17,660,490.58
Change in fair value -5,752,670.91 -5,752,670.91
III. Closing balance 5,750,831,172.12 5,750,831,172.12
192
Annual Report 2022 of China Fangda Group Co., Ltd.
In RMB
The Company needs to comply with the disclosure requirements of the real estate industry in the Guidelines for the Self-discipline
and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.
Disclosure of investment real estate measured at fair value by projects
In RMB
Rental
Reason for
Project Completion Building income in Opening Closing fair Change in
Location the change
name time area the report fair value value fair value
and report
period
Fangda The main
Town October 11, recognition
commerci 2017, 114,099,79 4,985,487,8 4,968,727,7 basis of the
Shenzhen 95,083.13 -0.34%
al and December 29, 3.05 80.63 49.00 fair value is
office 2018 the real
buildings estate
Fangda 28 December 17,550,588. 329,471,98 333,236,76 appraisal
Shenzhen 17,725.36 1.14%
Building 2002 65 2.00 8.00 report
"SWJPZ
[2023] SZ
No.002 and
No.003"
issued by
Nanchang
December 10, 11,667,537. 436,493,83 423,314,76 Shenzhen
Fangda Nanchang 37,270.58 -3.02%
2020 01 8.47 3.12 Wenji Land
Center
Real Estate
Appraisal
Engineering
Consulting
Co., Ltd
The main
recognition
basis of fair
value is: the
real estate
appraisal
report
(SWJPZ
[2023] SZ
No.004-
Beijing,
No.008)
Changchu
issued by
n, 3,762,879.0 25,551,892.
Others 2,610.04 77,683.38 579.05% Shenzhen
Guiyang, 0 00
Wenji Land
Shaoguan,
Real Estate
etc
Appraisal
Engineering
Consulting
Co., Ltd;
The change
of 579.05%
in fair value
in the
current
period is
193
Annual Report 2022 of China Fangda Group Co., Ltd.
mainly due
to the
change of
some fixed
assets into
investment
real estate
for external
lease. For
details, see
"New
Investment
Real Estate
Measured by
Fair Value in
the Current
Period".
143,395,60 5,755,216,5 5,750,831,1
Total 152,689.11 -0.08%
2.09 80.10 72.12
Whether the Company has investment real estate in the current construction period
□ Yes No
Whether there is new investment real estate measured at fair value in the report period
Yes □ No
Newly-added investment real estate measured by fair value in the current period:
In RMB
Original
Project Original book Recorded fair Different handling
accounting Closing fair value Change time
name value value method and basis
method
According to the
relevant provisions of
the investment real
estate standard, when
converting fixed assets
into investment real
estate measured at fair
value, the difference
Fixed between the fair value
assets, September on the date of
Others measured at 25,862,101.38 21,875,821.00 21,875,821.00 30, 2022 conversion and the
cost original book value is
included in other
comprehensive
income, and the
difference between the
fair value and the
original book value is
included in the current
profit and loss
Total 25,862,101.38 21,875,821.00 21,875,821.00
194
Annual Report 2022 of China Fangda Group Co., Ltd.
(3) Investment real estate without ownership certificate
In RMB
Item Book value Reason
Affected by the COVID-19, it has not
Others 1,574,816.00
been handled yet
Total 1,574,816.00
Others:
① The fair value of some real estate in Fangda Town is RMB1,951,090,984.51, which has been mortgaged to the loan of China
Construction Bank Shenzhen OCT sub branch. The loan has not expired and has not been released; The fair value of some real
estate in fangdacheng is RMB1,342,642,490.00, which has been mortgaged to the loan of Shenzhen Dongbin branch of Huaxia
Bank. The loan has not expired and has not been released.
② Other transfer-out in the current period is due to the need of business development. The company transferred out the amount of
RMB3,032,342.13 by transferring some houses from external rental to self-use, and reduced the original estimated cost by
RMB14,628,148.45 according to the actual settlement.
16. Fixed assets
In RMB
Item Closing balance Opening balance
Fixed assets 646,812,853.36 663,414,297.61
Total 646,812,853.36 663,414,297.61
(1) Fixed assets
In RMB
Electronics
Houses & Mechanical Transportation PV power
Item and other Total
buildings equipment facilities plants
devices
I. Book value
1. Opening 129,596,434.
610,564,471.12 120,638,873.28 21,390,928.69 50,870,105.77 933,060,813.70
balance 84
2. Increase in this
33,554,678.91 10,901,279.31 1,773,951.04 2,475,883.36 0.00 48,705,792.62
period
(1) Purchase 187,307.90 10,901,279.31 1,751,256.55 2,475,883.36 15,315,727.12
(2) Transfer-in of
construction in 20,892,009.41 20,892,009.41
progress
(3) Other
12,475,361.60 22,694.49 12,498,056.09
increases
3. Decrease in
727,534.43 -
this period 36,903,250.10 2,888,774.82 1,404,713.14 41,924,272.49
(1) Disposal or
4,507,401.37 727,534.43 2,888,774.82 1,404,713.14 9,528,423.76
retirement
(2) Other
32,395,848.73 32,395,848.73
decrease
4. Closing 129,596,434.
607,215,899.93 130,812,618.16 20,276,104.91 51,941,275.99 939,842,333.83
balance 84
II. Accumulative
195
Annual Report 2022 of China Fangda Group Co., Ltd.
depreciation
1. Opening 34,505,796.2
96,553,528.93 91,086,675.44 16,472,796.03 30,931,249.97 269,550,046.59
balance 2
2. Increase in this
17,232,446.77 2,687,633.87 837,258.62 2,726,650.38 6,148,440.12 29,632,429.76
period
(1) Provision 17,232,446.77 2,687,633.87 825,212.90 2,726,650.38 6,148,440.12 29,620,384.04
(2) Other
12,045.72 12,045.72
increases
3. Decrease in
1,761,858.91 650,994.84 2,599,897.33 1,236,714.30 0.00 6,249,465.38
this period
(1) Disposal or
331,360.01 650,994.84 2,599,897.33 1,236,714.30 4,818,966.48
retirement
(2) Other
1,430,498.90 1,430,498.90
decrease
4. Closing 40,654,236.3
112,024,116.79 93,123,314.47 14,710,157.32 32,421,186.05 292,933,010.97
balance 4
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 88,942,198.5
495,191,783.14 37,609,460.49 5,565,947.59 19,503,463.64 646,812,853.36
value 0
2. Opening book 95,090,638.6
514,010,942.19 29,472,354.64 4,918,132.66 19,922,229.50 663,414,297.61
value 2
(2) Fixed assets without ownership certificate
In RMB
Item Book value Reason
Yuehai Office Building C 502 112,420.05 Historical reasons
Others:
① On December 31, 2022, the net value of RMB44,751,777.53 in the Company's houses and buildings has been mortgaged to
China Construction Bank Shenzhen Overseas Chinese Town Sub-branch for loans.
② Among the changes in the current period, the increase of houses and other buildings was RMB12,475,361.6, which was caused
by the receipt of mortgaged properties by the subsidiary Fangda Construction Section.
③ In the current period, the house and other buildings decreased by RMB32,395,848.73, of which the Company reduced
RMB31,398,815.30 by transferring some houses from self-use to external lease due to the need of business development, and the
original estimated amount decreased by RMB997,033.43 due to settlement adjustment.
22. Construction in process
In RMB
196
Annual Report 2022 of China Fangda Group Co., Ltd.
Item Closing balance Opening balance
Construction in process 11,642,444.21
Total 11,642,444.21
(1) Construction in progress
In RMB
Closing balance Opening balance
Item Remainin Impairme
Remaining book Impairment
g book nt Book value Book value
value provision
value provision
Construction and
decoration of self use part 11,642,444.21 11,642,444.21
of Fangda Center
Total 11,642,444.21 11,642,444.21
(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
Constr
uction Loans
and from
decora financi
tion of 13,000 11,642 15,291 al
3,649, 117.63 Compl 282,35
self ,000.0 ,444.2 ,448.0 institut
003.82 % eted 7.24
use 0 1 3 ions+
part of self-
Fangd owned
a fund
Center
13,000 11,642 15,291
3,649, 282,35
Total ,000.0 ,444.2 ,448.0
003.82 7.24
0 1 3
25. Use right assets
In RMB
Item Houses & buildings Transportation facilities Total
I. Book value
1. Opening balance 37,075,290.17 1,319,251.12 38,394,541.29
197
Annual Report 2022 of China Fangda Group Co., Ltd.
2. Increase in this period 1,747,335.34 1,747,335.34
3. Decrease in this period 915,139.57 915,139.57
4. Closing balance 37,907,485.94 1,319,251.12 39,226,737.06
II. Accumulative depreciation
1. Opening balance 6,344,621.50 609,063.25 6,953,684.75
2. Increase in this period 12,548,843.12 609,063.24 13,157,906.36
(1) Provision 12,548,843.12 609,063.24 13,157,906.36
3. Decrease in this period 334,547.45 334,547.45
4. Closing balance 18,558,917.17 1,218,126.49 19,777,043.66
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 19,348,568.77 101,124.63 19,449,693.40
2. Opening book value 30,730,668.67 710,187.87 31,440,856.54
Note: The depreciation amount of use right assets in 2022 is RMB13,157,906.36.
26. Intangible assets
(1) Intangible assets
In RMB
Trademarks,
Land using Unpatented
Item Patent patents and Software Total
right technologies
know-how
I. Book value
1. Opening
80,404,737.13 8,989,350.94 21,627,838.43 111,021,926.50
balance
2. Increase in
24,421.75 1,901,262.23 1,905,500.53
this period
(1) Purchase 24,421.75 1,901,262.23 1,925,683.98
3. Decrease in
this period
4. Closing
80,404,737.13 9,013,772.69 23,529,100.66 112,947,610.48
balance
II.
Accumulative
amortization
1. Opening
17,370,871.00 8,652,629.93 9,798,712.74 35,822,213.67
balance
2. Increase in
2,295,272.94 147,141.86 2,003,537.75 4,445,952.55
this period
(1) Provision 2,295,272.94 147,141.86 2,003,537.75 4,445,952.55
3. Decrease in
198
Annual Report 2022 of China Fangda Group Co., Ltd.
this period
4. Closing
19,666,143.94 8,799,771.79 11,802,250.49 40,268,166.22
balance
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
60,738,593.19 214,000.90 11,726,850.17 72,679,444.26
value
2. Opening
63,033,866.13 336,721.01 11,829,125.69 75,199,712.83
book value
27. Long-term amortizable expenses
In RMB
Amortized
Increase in this
Item Opening balance amount in this Other decrease Closing balance
period
period
Xuanfeng Chayuan village
and Zhuyuan village land 1,028,527.10 56,101.56 972,425.54
transfer compensation
Reconstruction project of
231,427.38 115,713.60 115,713.78
sample room
Membership fee 193,749.80 900,000.00 388,749.84 704,999.96
Waterproofing works for
472,886.09 92,507.31 380,378.78
employee dormitories
Management consulting
178,466.08 64,896.72 113,569.36
service fee
Warehouse addition and
151,376.19 60,550.44 90,825.75
renovation project
Dahuaxin Dongguan
Songshanhu rubber area 180,428.08 180,428.08
interlayer transformation
Factory wall painting and
rolling shutter door 172,368.00 45,964.80 126,403.20
engineering
Property insurance
237,369.99 84,625.00 252,975.91 69,019.08
premium
Plant ground reconstruction
319,593.71 87,162.00 232,431.71
project
High voltage network
access fee of East China 794,750.23 307,645.32 487,104.91
base
Sporadic decoration and
4,724,856.77 809,024.66 3,915,832.11
renovation costs of Fangda
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Annual Report 2022 of China Fangda Group Co., Ltd.
Town
Sporadic decoration and
renovation costs of Fangda 1,184,221.28 114,961.72 1,069,259.56
Center
Others 1,427,827.57 1,705,270.63 1,112,514.27 173,507.88 1,847,076.05
Total 5,388,770.22 8,598,973.68 3,689,196.23 553,886.66 9,744,661.01
28. 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
295,671,508.97 54,047,399.06 257,631,149.84 48,121,014.85
provision
Unrealized profit of
281,819,399.92 55,869,584.56 281,712,399.14 55,842,834.37
internal transactions
Deductible loss 160,102,622.27 32,419,194.27 194,235,656.90 44,060,479.20
Credit impairment
249,948,173.84 39,913,829.96 216,539,086.13 34,918,828.89
provision
Unrealizable gross
112,847,972.30 27,307,162.73 114,199,793.34 27,967,001.62
profit
Anticipated liabilities 3,372,553.84 505,883.08 6,347,809.40 1,161,300.00
Deferred earning 3,610,875.25 558,241.49 3,674,964.26 551,244.65
Change in fair value 5,433,747.37 815,062.11 1,079,130.19 161,869.53
Tax differences under
1,316,989.65 195,214.63 274,185.93 43,127.01
new lease criteria
Accrued and unpaid
20,133,488.43 5,033,372.11
land tax
Reserved expense 22,640,219.20 3,396,032.88 8,640,219.18 1,296,032.88
Total 1,156,897,551.04 220,060,976.88 1,084,334,394.31 214,123,733.00
(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 4,188,015,507.12 1,046,924,956.27 4,199,023,889.76 1,049,649,013.70
Acquire premium to
1,535,605.47 383,901.37 1,535,605.47 383,901.37
form inventory
Estimated gross margin
when Fangda Town
records income, but 38,783,686.70 9,695,921.68 31,539,658.09 7,884,914.52
does not reach the
taxable income level
Rental income 32,671,966.71 8,167,991.68 34,856,116.84 8,714,029.21
Total 4,261,006,766.00 1,065,172,771.00 4,266,955,270.16 1,066,631,858.80
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Annual Report 2022 of China Fangda Group Co., Ltd.
(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
220,060,976.88 214,123,733.00
assets
Deferred income tax
1,065,172,771.00 1,066,631,858.80
liabilities
(4) Details of unrecognized deferred income tax assets
In RMB
Item Closing balance Opening balance
Deductible temporary difference 146,089.64 554,677.54
Deductible loss 16,177,447.74 10,345,101.90
Total 16,323,537.38 10,899,779.44
(5) Deductible losses of the un-recognized deferred income tax asset will expire in the following years
In RMB
Year Closing amount Opening amount Remarks
2022 1,233,589.22
2023 4,575,983.46 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 3,046,163.63
2027 7,756,885.52
Total 16,177,447.74 10,345,101.90
29. 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
Contract assets 105,183,978.15 5,709,693.38 99,474,284.77 72,288,658.32 7,952,729.45 64,335,928.87
Prepaid house
and equipment 73,077,190.00 0.00 73,077,190.00 35,693,402.77 0.00 35,693,402.77
amount
Certificate of
316,929,580.18 0.00 316,929,580.18 306,738,886.82 0.00 306,738,886.82
deposit
Others 2,005,361.70 0.00 2,005,361.70 1,088,296.93 0.00 1,088,296.93
Total 497,196,110.03 5,709,693.38 491,486,416.65 415,809,244.84 7,952,729.45 407,856,515.39
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Annual Report 2022 of China Fangda Group Co., Ltd.
30. Short-term borrowings
(1) Classification of short-term borrowings
In RMB
Item Closing balance Opening balance
Loan by pledge 58,450,232.49
Guarantee loan 120,136,861.08 10,013,291.67
Credit borrow 300,247,500.00 302,354,444.46
Discount borrowing of acceptance bills 797,889,951.95 916,656,430.03
Factoring loan of accounts receivable 59,903,587.53
Guarantee and pledge loan 40,060,622.22
Total 1,318,238,522.78 1,287,474,398.65
Other notes: among the guaranteed loans at the end of the period, the amount of RMB80,093,194.44 was guaranteed by the
company for the subsidiary, Dajian Technology Co., Ltd; The amount of RMB30,031,166.64 is guaranteed by the company for the
subsidiary Fangda Zhiyuan Technology Co., Ltd; The amount of RMB10,012,500.00 is guaranteed by the company for its
subsidiary Yunzhu Technology Co., Ltd. The Company and Shenzhen Hi-tech Investment and Financing Guarantee Co., Ltd.
provide guarantee for the guarantee and pledge loan at the end of the period for the subsidiary party Dajian Technology Co., Ltd.,
and the subsidiary party Dajian Technology Co., Ltd. provides pledge guarantee with its intellectual property right "unitary
porcelain plate curtain wall".
31. Derivative financial liabilities
In RMB
Item Closing balance Opening balance
Forward foreign exchange contract 293,400.00 11,871.20
Total 293,400.00 11,871.20
32. Notes payable
In RMB
Type Closing balance Opening balance
Commercial acceptance 44,531,921.12 185,747,490.66
Bank acceptance 690,358,287.44 663,697,808.43
Total 734,890,208.56 849,445,299.09
At the end of the period, the total amount of bills payable due and unpaid was RMB1,622,493.59 , 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.
33. Account payable
(1) Account payable
In RMB
Item Closing balance Opening balance
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Annual Report 2022 of China Fangda Group Co., Ltd.
Account repayable and engineering
1,259,574,096.29 942,689,466.48
repayable
Construction payable 44,523,769.88 58,406,046.64
Payable installation and implementation
394,228,364.88 327,879,727.83
fees
Others 19,710,144.73 14,148,245.02
Total 1,718,036,375.78 1,343,123,485.97
(2) Significant payables aging more than 1 year
In RMB
Item Closing balance Reason
Supplier 1 15,317,539.09 Not mature
Supplier 2 7,737,332.29 Not mature
Supplier 3 6,850,214.13 Not mature
Supplier 4 3,768,913.36 Not mature
Supplier 5 2,792,406.87 Not mature
Total 36,466,405.74
34. Prepayment received
(1) Prepayment received
In RMB
Item Closing balance Opening balance
Rental 1,439,653.84 1,280,482.93
Total 1,439,653.84 1,280,482.93
35. Contract liabilities
In RMB
Item Closing balance Opening balance
Project funds collected in advance 194,354,649.37 172,696,504.61
Real estate sales payment 586,105.50 4,082,802.11
Material loan 12,114,464.00 2,485,989.04
Others 938,452.68 921,581.39
Total 207,993,671.55 180,186,877.15
The amount and reason for the significant change in the book value during the reporting period
In RMB
Item Change Reason
Project funds collected Mainly due to the increase in advance payment of engineering
21,658,144.76
in advance contract
Total 21,658,144.76 ——
The Company needs to comply with the disclosure requirements of the real estate industry in the Guidelines for the Self-discipline
and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.
Payment received from top 5 presales projects:
There are no pre-sale projects in this period.
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36. Employees' wage payable
(1) Employees' wage payable
In RMB
Item Opening balance Increase Decrease Closing balance
1. Short-term
68,789,749.61 411,415,730.95 413,416,046.11 66,789,434.45
remuneration
2. Retirement pension
program-defined 154,394.34 20,170,059.33 20,010,024.21 314,429.46
contribution plan
3. Dismiss
126,870.00 1,324,707.47 1,404,577.47 47,000.00
compensation
Total 69,071,013.95 432,910,497.75 434,830,647.79 67,150,863.91
(2) Short-term remuneration
In RMB
Item Opening balance Increase Decrease Closing balance
1. Wage, bonus,
allowance and 67,487,743.92 376,634,399.71 379,126,177.79 64,995,965.84
subsidies
2. Employee welfare 373,264.20 13,580,523.11 13,477,883.19 475,904.12
3. Social insurance 47,164.22 10,167,062.16 9,881,922.78 332,303.60
Including: medical
41,419.12 7,322,077.28 7,084,133.22 279,363.18
insurance
Labor injury
3,048.20 553,972.56 550,637.05 6,383.71
insurance
Breeding
2,696.90 828,506.32 784,646.51 46,556.71
insurance
Medical
561,696.00 561,696.00
insurance
Unemployment
900,810.00 900,810.00
insurance
4. Housing fund 77,242.00 9,484,807.80 9,456,440.84 105,608.96
5. Labor union budget
and staff education 569,442.50 1,303,539.11 1,328,622.51 544,359.10
fund
6. Short-term paid
234,892.77 100,400.06 335,292.83
leave
7. Short-term profit
144,999.00 144,999.00
share program
Total 68,789,749.61 411,415,730.95 413,416,046.11 66,789,434.45
(3) Defined contribution plan
In RMB
Item Opening balance Increase Decrease Closing balance
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Annual Report 2022 of China Fangda Group Co., Ltd.
1. Basic pension 150,523.04 19,551,759.72 19,395,610.38 306,672.38
2. Unemployment
3,871.30 618,299.61 614,413.83 7,757.08
insurance
Total 154,394.34 20,170,059.33 20,010,024.21 314,429.46
37. Taxes payable
In RMB
Item Closing balance Opening balance
VAT 14,657,864.98 7,130,265.98
Enterprise income tax 28,092,096.58 32,790,801.61
Personal income tax 1,663,123.30 1,525,425.02
City maintenance and construction tax 1,651,960.05 1,153,514.56
Land using tax 256,490.15 257,316.97
Property tax 1,072,014.83 1,133,817.11
Education surtax 805,376.76 582,762.56
Local education surtax 397,447.79 246,199.28
Consumption service tax 680,127.01
Land VAT 36,201,588.58 22,186,857.45
Others 349,241.06 273,686.68
Total 85,827,331.09 67,280,647.22
38. Other payables
In RMB
Item Closing balance Opening balance
Other payables 113,425,377.70 126,903,098.08
Total 113,425,377.70 126,903,098.08
(1) Other payables
1) Other payables presented by nature
In RMB
Item Closing balance Opening balance
Performance and quality deposit 44,484,884.33 47,863,587.46
Deposit 19,901,002.35 20,376,442.13
Reserved expense 5,871,887.95 4,048,028.82
Others 43,167,603.07 54,615,039.67
Total 113,425,377.70 126,903,098.08
(2) Significant payables aging more than 1 year
In RMB
205
Annual Report 2022 of China Fangda Group Co., Ltd.
Item Closing balance Reason
Shenzhen Yikang Real Estate Co. Ltd. 25,305,047.71 Payment paid as agreed in the contract
Total 25,305,047.71
39. Non-current liabilities due within 1 year
In RMB
Item Closing balance Opening balance
Long-term loans due within 1 year 72,037,200.00 65,634,120.55
Lease liabilities due within one year 11,741,447.06 12,784,437.21
Total 83,778,647.06 78,418,557.76
40. Other current liabilities
In RMB
Item Closing balance Opening balance
Unterminated notes receivable 20,093,677.84 25,877,995.14
Substituted money on VAT 28,039,520.65 22,220,366.63
Total 48,133,198.49 48,098,361.77
41. Long-term borrowings
(1) Classification of long-term borrowings
In RMB
Item Closing balance Opening balance
Guaranteed and mortgage loans 444,204,672.22 467,742,011.11
Guarantee, mortgage and pledge loan 891,332,527.78 931,392,109.44
Less: Long-term loans due within 1 year 72,037,200.00 65,634,120.55
Total 1,263,500,000.00 1,333,500,000.00
Notes to classification of long-term borrowings:
The pledge in the above-mentioned guarantee, mortgage and pledge loans is pledged by the 99% equity of the subsidiary Fangda
Real Estate held by the Company, the 1% equity of the subsidiary Fangda Real Estate held by the subsidiary Hongjun Investment
Company and the rent receivable of the self-owned Dacheng rental property; The above guarantees and mortgage loans are
guaranteed by the Company and its subsidiary Fangda Real Estate, and the subsidiary Fangda Property Company provides
mortgage guarantees for part of the property of Fangda Property Company in Dacheng.
Other notes, including interest rate range: the interest rate period of long-term loans is 3%-7%.
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42. Lease liabilities
In RMB
Item Closing balance Opening balance
Lease payments 19,363,493.20 33,957,735.57
Less: unrecognized financing expenses 714,589.59 2,021,205.05
Less: lease liabilities due within one year 11,741,447.06 12,784,437.21
Total 6,907,456.55 19,152,093.31
43. Long-term payables
In RMB
Item Closing balance Opening balance
Long-term payable 197,640,219.18 183,640,219.18
Total 197,640,219.18 183,640,219.18
(1) Long term accounts payable listed by nature
In RMB
Item Closing balance Opening balance
Disposal of equity repurchase 197,640,219.18 183,640,219.18
Others:
See Section X, IX, Equity in other entities, 1. Equity in subsidiaries (2) Important non-wholly-owned subsidiaries for details of the
disposal of equity repurchase funds.
44. Anticipated liabilities
In RMB
Item Closing balance Opening balance Reason
Pending lawsuit 2,091,286.00
Product quality warranty 3,108,521.87 4,256,523.40 Product quality warranty
Loss contract to be executed 264,031.97
Total 3,372,553.84 6,347,809.40
45. Deferred earning
In RMB
Item Opening balance Increase Decrease Closing balance Reason
Government See the following
9,566,525.60 566,645.16 8,999,880.44
subsidy table
Total 9,566,525.60 566,645.16 8,999,880.44 --
Items involving government subsidies:
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Annual Report 2022 of China Fangda Group Co., Ltd.
In RMB
Amount
Other misc.
Amount of included in Costs offset Related to
Opening gains Other Closing
Liabilities new non- in the assets/earni
balance recorded in change balance
subsidy operating period ng
this period
revenue
Railway
transport
screen door
controlling
Assets-
system and 39,845.21 18,904.32 20,940.89
related
information
transmissio
n
technology
Major
investment
project
prize from
Industry
and Trade 1,509,524.3 1,452,381.5 Assets-
57,142.80
Developme 0 0 related
nt Division
of
Dongguan
Finance
Bureau
Distributed
PV power
generation
project
subsidy
sponsored
Assets-
by 343,750.25 24,999.96 318,750.29
related
Dongguan
Reform and
Developme
nt
Commissio
n
Subsidized
Assets-
land 169,827.59 3,725.64 166,101.95
related
transfer
Special
subsidy for
industrial
transformat
Assets-
ion, 766,666.65 80,000.04 686,666.61
related
upgrading
and
developme
nt
Enterprise
information
Assets-
ization 372,000.00 48,000.00 324,000.00
related
subsidy
project of
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Annual Report 2022 of China Fangda Group Co., Ltd.
Shenzhen
Small and
Medium
Enterprise
Service
Agency
National
Industry
Revitalizati
on and 5,377,983.5 5,070,254.9 Assets-
307,728.60
Technology 0 0 related
Renovation
Project
fund
Subsidy for Assets-
986,928.10 26,143.80 960,784.30
new plant related
9,566,525.6 8,999,880.4
Total 566,645.16
0 4
46. Capital share
In RMB
Change (+,-)
Opening balance Issued Closing balance
Bonus Transferred
new Others Subtotal
shares from reserves
shares
Total of
1,073,874,227.00 1,073,874,227.00
capital shares
47. Capital reserve
In RMB
Item Opening balance Increase Decrease Closing balance
Capital premium (share
10,005,491.05 10,005,491.05
capital premium)
Other capital reserves 1,454,097.35 1,454,097.35
Total 11,459,588.40 11,459,588.40
48. Other miscellaneous income
In RMB
Amount occurred in the current period
Less: Less:
After-tax
amount amount After-tax
Opening amount Closing
Item Amount written into written into Less: amount
balance attributed balance
before other gains other gains Income tax attributed
to minority
income tax and and expenses to the
shareholder
transferred transferred parent
s
into into
209
Annual Report 2022 of China Fangda Group Co., Ltd.
gain/loss in gain/loss in
previous previous
terms terms
I. Other
comprehen
sive
income that
- - - -
will not be -
14,565,719. 2,211,678.7 1,658,759.0 16,224,478.
subsequentl 552,919.70
78 9 9 87
y
reclassified
into profit
and loss
Fair value
change of - - - -
-
investment 14,565,719. 2,211,678.7 1,658,759.0 16,224,478.
552,919.70
in other 78 9 9 87
equity tools
2. Other
misc.
incomes
-
that will be 49,891,591. 2,256,960.9 4,789,977.2 - 48,211,195.
1,680,395.9 57,609.95
re- 56 0 1 910,230.36 66
0
classified
into gain
and loss
Cash flow
- -
hedge 926,186.62 -84,286.65 448,562.20
561,911.07 477,624.42
reserve
Translation
difference -
1,295,939.3 1,238,329.4 -
of foreign 1,391,190.4 57,609.95
8 3 152,861.04
exchange 7
statement
Investment
real estate -
50,356,595. 1,522,932.5 4,789,977.2 - 47,915,494.
measured 2,441,100.9
41 9 1 825,943.71 50
at fair 1
value
Other - -
35,325,871. 4,789,977.2 31,986,716.
miscellane 45,282.11 1,463,150.0 3,339,154.9 57,609.95
78 1 79
ous income 6 9
49. 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
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50. Retained profit
In RMB
Item Current period Last period
Adjustment on retained profit of previous period 4,324,055,259.33 4,215,005,541.52
Total of retained profit at beginning of year
2,837,784.25
adjusted (+ for increase, - for decrease)
Retained profit adjusted at beginning of year 4,324,055,259.33 4,217,843,325.77
Plus: Net profit attributable to owners of the parent 282,933,854.32 222,168,142.53
Less: Statutory surplus reserves 885,309.59
Common share dividend payable 53,693,711.35
Others 115,070,899.38
Closing retained profit 4,553,295,402.30 4,324,055,259.33
51. Operational revenue and costs
In RMB
Amount occurred in the current period Occurred in previous period
Item
Income Cost Income Cost
Main business 3,664,169,293.83 2,880,210,673.00 3,409,535,038.10 2,737,323,045.81
Other businesses 182,806,654.61 37,543,294.52 148,189,359.44 23,977,511.67
Total 3,846,975,948.44 2,917,753,967.52 3,557,724,397.54 2,761,300,557.48
Is the lower of the net profit before and after deducting the non recurring profit and loss negative
□ Yes No
Income information:
In RMB
Segment 3 -
Contract Segment 1- Segment 2 - rail Segment 4 - Segment 5 -
real estate Total
classification curtain wall transit division new energy other segments
segment
2,877,126,181. 3,846,975,948.
Type of product 369,529,923.55 19,707,669.06
59 564,551,749.10 16,060,425.14 44
Including:
Curtain wall
2,877,126,181. 2,877,126,181.
system and
59 59
materials
Subway screen
door and 564,551,749.10 564,551,749.10
service
Real estate
369,529,923.55 369,529,923.55
sales
PV power
generation 19,707,669.06 19,707,669.06
products
Others 16,060,425.14 16,060,425.14
2,877,126,181. 3,846,975,948.
Total 564,551,749.10 369,529,923.55 19,707,669.06 16,060,425.14
59 44
Information related to performance obligations:
211
Annual Report 2022 of China Fangda Group Co., Ltd.
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.
Information related to the transaction price allocated to the remaining performance obligations:
The amount of revenue corresponding to the performance obligations that have been signed, but not yet performed or not yet
performed at the end of the reporting period is 7,510,199,435.96 yuan, of which 3,650,605,117.88 yuan is expected to be
recognized in 2023, and 3,015,790,748.80 yuan is expected to be recognized in 2024, 843,803,569.28 yuan is expected to be
recognized in 2025 and beyond.
Others:
The Company needs to comply with the disclosure requirements of the real estate industry in the Guidelines for the Self-discipline
and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.
Top-5 projects in terms of income received and recognized in the reporting period:
In RMB
No. Project name Balanace
1 Fangda Town 257,831,878.77
2 Nanchang Fangda Center 42,475,581.08
52. Taxes and surcharges
In RMB
Item Amount occurred in the current period Occurred in previous period
City maintenance and construction tax 7,679,241.19 6,814,244.49
Education surtax 5,585,461.79 4,880,262.78
Property tax 12,837,232.82 6,799,263.40
Land using tax 1,365,653.05 1,642,629.16
Stamp tax 2,237,929.20 2,798,854.45
Land VAT 37,137,187.96 49,306,779.63
Others 110,732.47 84,940.08
Total 66,953,438.48 72,326,973.99
53. Sales expense
In RMB
Item Amount occurred in the current period Occurred in previous period
Labor costs 27,481,424.15 26,549,119.18
Sales agency fee 7,583,116.62 9,750,617.96
212
Annual Report 2022 of China Fangda Group Co., Ltd.
Entertainment expense 4,254,479.42 4,798,777.96
Travel expense 1,280,007.65 1,662,959.19
Advertisement and promotion fee 2,044,298.44 1,673,817.72
Rental 325,598.09 361,878.16
Depreciation and amortization 708,646.17 1,021,131.68
Office costs 704,950.67 1,040,668.24
Material consumption 456,870.79 412,933.68
Warranty expense 6,721,123.19 9,276,474.69
Others 3,409,647.82 3,329,236.27
Total 54,970,163.01 59,877,614.73
54. Management expense
In RMB
Item Amount occurred in the current period Occurred in previous period
Labor costs 111,950,198.78 106,520,063.46
Maintenance costs 286,605.47 835,325.05
Agencies 8,669,931.10 20,495,270.86
Depreciation and amortization 14,008,652.97 13,947,605.32
Office expense 3,458,124.24 5,510,310.38
Entertainment expense 5,239,230.46 4,984,309.28
Rental 2,162,427.23 1,911,070.57
Lawsuit 812,611.39 540,860.07
Travel expense 1,856,940.17 2,208,994.72
Property management fee 1,298,685.56 1,836,776.97
Water and electricity 850,541.99 925,114.24
Material consumption 431,080.40 1,161,107.24
Others 6,113,309.07 8,566,850.67
Total 157,138,338.83 169,443,658.83
55. R&D cost
In RMB
Item Amount occurred in the current period Occurred in previous period
Labor costs 87,517,101.66 86,627,499.60
Material costs 54,424,197.58 49,445,691.44
Agencies 9,786,533.05 5,384,263.67
Depreciation costs 1,475,184.54 1,487,661.18
Amortization of intangible assets 1,084,611.53 1,003,289.28
Travel expense 413,442.72 476,622.69
Rental 1,302.17 55,053.80
Others 7,110,539.77 8,493,500.72
Total 161,812,913.02 152,973,582.38
56. Financial expense
In RMB
Item Amount occurred in the current period Occurred in previous period
213
Annual Report 2022 of China Fangda Group Co., Ltd.
Interest expense 100,581,343.99 106,019,889.08
Including: interest expense of lease
1,188,864.62 931,218.41
liabilities
Less: interest capitalization 4,297,120.98
Less: discount government subsidies 308,700.00 3,853,900.00
Less: Interest income 23,892,574.84 16,575,629.28
Net interest expenditure 76,380,069.15 81,293,238.82
Exchange net loss -6,670,099.09 1,933,113.39
Discount expense 23,001,819.09 13,489,673.65
Commission charges and others 3,990,006.19 6,285,570.07
Total 96,701,795.34 103,001,595.93
57. Other gains
In RMB
Amount occurred in the current
Source Occurred in previous period
period
Government subsidies related to deferred income
566,645.16 506,906.57
(related to assets)
Government subsidies directly included in current
13,047,310.70 12,813,082.60
profits and losses (related to income)
Other items related to daily activities and included in
295,628.71 712,949.92
other income
Total 13,909,584.57 14,032,939.09
58. Investment income
In RMB
Item Amount occurred in the current period Occurred in previous period
Gains from long-term equity investment
-249,904.00 -683,431.81
measured by equity
Investment income of trading financial assets
87,532.09 72,364.60
during the holding period
Investment income from disposal of trading
4,596,589.23 5,487,895.02
financial assets
Financial assets derecognised as a result of
-3,778,070.96 -6,336,161.86
amortized cost
Income from derecognition of other financial
-150,858.55
assets measured at fair value
Interest income from external financial
5,680,666.66
assistance
Total 6,185,954.47 -1,459,334.05
59. 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 -10,095,973.89 20,921,813.65
214
Annual Report 2022 of China Fangda Group Co., Ltd.
value
Other non-current financial assets -17,973.56 2,500,222.08
Total -10,113,947.45 23,422,035.73
60. Credit impairment loss
In RMB
Item Amount occurred in the current period Occurred in previous period
Bad debt loss of other receivables -179,081.17 1,421,794.98
Bad debt loss of notes receivable 304,547.33 -2,584,709.89
Bad debt loss of account receivable -34,761,191.07 -6,761,080.52
Total -34,635,724.91 -7,923,995.43
61. Assets impairment loss
In RMB
Item Amount occurred in the current period Occurred in previous period
Contract asset impairment loss -35,575,418.55 7,181,339.41
Total -35,575,418.55 7,181,339.41
62. Assets disposal gains
In RMB
Amount occurred in the current
Source Occurred in previous period
period
Gain or loss on disposal of fixed assets, construction in
progress, assets with right to use and intangible assets -1,421,880.09 -2,291,048.05
not classified as held for sale
Including: Fixed assets -1,460,480.59 -2,291,048.05
Use right assets 9,021.90
Total -1,421,880.09 -2,291,048.05
63. 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 315,404.30 420,185.19 315,404.30
Compensation received 576,478.89 31,106.99 576,478.89
Payable account not able to
1,089,259.90
be paid
Others 511,504.70 668,628.48 511,504.70
Total 1,403,387.89 2,209,180.56 1,403,387.89
64. Non-business expenses
In RMB
Item Amount occurred in the Occurred in previous Amount accounted into
215
Annual Report 2022 of China Fangda Group Co., Ltd.
current period period the current accidental
gain/loss
Donation 3,173,265.20 3,379,215.24 3,153,827.24
Loss from retirement os damaged non-
279,036.49 324,982.26 279,036.49
current assets
Penalty and overdue fine 282,440.37 71,556.64 282,440.37
Others 433,216.03 2,311,621.57 452,653.99
Total 4,167,958.09 6,087,375.71 4,167,958.09
65. Income tax expenses
(1) Details about income tax expense
In RMB
Item Amount occurred in the current period Occurred in previous period
Income tax expenses in this period 47,007,994.88 52,589,592.74
Deferred income tax expenses -5,933,164.84 -11,504,044.01
Total 41,074,830.04 41,085,548.73
(2) Adjustment process of accounting profit and income tax expense
In RMB
Item Amount occurred in the current period
Total profit 327,229,330.08
Income tax expenses calculated based on the legal (or
81,807,332.52
applicable) tax rates
Impacts of different tax rates applicable for some subsidiaries -22,786,014.09
Impacts of income tax before adjustment -2,369,663.20
Impacts of non-deductible cost, expense and loss 2,318,122.00
Deductible temporary difference and deductible loss of
1,130,337.63
unrecognized deferred income tax assets
Additional deduction of R&D expense -21,236,256.97
Profit and loss of associates and joint ventures calculated using
62,476.00
the equity method
Effect of tax rate change on deferred income tax -134,013.60
Impact of deductible losses of deferred income tax assets
recognized in the previous period exceeding the recoverable 2,282,509.75
period
Income tax expenses 41,074,830.04
66. Other miscellaneous income
See Note VII 48.
216
Annual Report 2022 of China Fangda Group Co., Ltd.
67. Notes to the cash flow statement
(1) Other cash inflow related to operation
In RMB
Item Amount occurred in the current period Occurred in previous period
Interest income 10,526,773.48 9,836,742.46
Subsidy income 8,523,267.80 17,767,508.18
Net amount of margin such as Bill of
72,723,783.94
exchange
Retrieving of bidding deposits 41,910,159.36 13,479,226.26
Other operating accounts 8,832,476.97 6,245,160.75
Total 69,792,677.61 120,052,421.59
(2) Other cash paid related to operation
In RMB
Item Amount occurred in the current period Occurred in previous period
Oocket expenses 129,019,737.46 149,859,536.10
Bidding deposit paid 41,669,236.99 32,427,745.97
Other trades 31,243,643.80 34,211,196.04
Net draft deposit net paid 16,983,599.71
Total 218,916,217.96 216,498,478.11
(3) Other cash paid related to investment activities
In RMB
Item Amount occurred in the current period Occurred in previous period
Investment commission 49,940.00 50,000.00
Total 49,940.00 50,000.00
(4) Other cash received related to financing
In RMB
Amount occurred in the current
Item Occurred in previous period
period
Cash received from disposal of equity of Fangda
0.00 175,000,000.00
Zhiyuan Technology Co., Ltd
Total 0.00 175,000,000.00
(5) Other cash paid related to financing activities
In RMB
Amount occurred in the current
Item Occurred in previous period
period
Financing fee 1,661,150.00 2,739,530.00
217
Annual Report 2022 of China Fangda Group Co., Ltd.
Principal and interest of lease liabilities 13,317,433.68 6,684,172.76
Loan deposit 42,780,000.00 32,448,838.96
Certificate of deposit 300,000,000.00
Acquisition of equity of Yunzhu Technology under
125,388,100.00
the same control
Subsidiary IPO expenses 2,064,871.00
Total 59,823,454.68 467,260,641.72
68. Supplementary data of cash flow statement
(1) Supplementary data of cash flow statement
In RMB
Amount of the Previous
Supplementary information Amount of the Current Term
Term
1. Net profit adjusted to cash flow related to business operations
Net profit 286,154,500.04 226,798,607.02
Plus: Asset impairment provision 70,211,143.46 742,656.02
Fixed asset depreciation, gas and petrol depreciation,
30,069,792.08 26,819,528.89
production goods depreciation
Depreciation of right to use assets 13,157,906.36 6,953,684.75
Amortization of intangible assets 4,445,952.55 4,277,899.14
Amortization of long-term amortizable expenses 3,689,196.23 2,128,336.88
Loss from disposal of fixed assets, intangible assets, and
1,421,880.09 2,291,048.05
other long-term assets ("-" for gains)
Loss from fixed asset discard ("-" for gains) 279,036.49 324,982.26
Loss from fair value fluctuation ("-" for gains) 10,113,947.45 -23,422,035.73
Financial expenses ("-" for gains) 91,838,168.41 120,641,621.99
Investment losses ("-" for gains) -10,114,883.98 1,459,334.05
Decrease of deferred income tax asset ("-" for increase) -5,937,243.88 41,347,864.62
Increase of deferred income tax asset ("-" for increase) -1,459,087.80 -29,843,820.61
Decrease of inventory ("-" for increase) 22,748,527.66 48,193,389.26
Decrease of operational receivable items ("-" for increase) -578,812,306.16 -132,061,193.74
Increase of operational receivable items ("-" for decrease) 300,388,703.00 -432,800,983.13
Others -16,983,599.70 72,723,783.99
Cash flow generated by business operations, net 221,211,632.30 -63,425,296.29
2. Major investment and financing activities with no cash involved
Debt transferred to assets
Convertible corporate bonds due within one year
Fixed assets under finance leases
3. Net change in cash and cash equivalents:
Balance of cash at period end 783,677,929.06 892,251,071.59
Less: Initial balance of cash 892,251,071.59 1,028,386,529.74
Add: Ending balance of cash equivalents
218
Annual Report 2022 of China Fangda Group Co., Ltd.
Less: Ending balance of cash equivalents
Net increase in cash and cash equivalents -108,573,142.53 -136,135,458.15
(2) Composition of cash and cash equivalents
In RMB
Item Closing balance Opening balance
I. Cash 783,677,929.06 892,251,071.59
Including: Cash in stock 149.81 3,192.76
Bank savings can be used at any time 776,383,701.29 875,884,674.10
Other monetary capital can be used at any
7,294,077.96 16,363,204.73
time
III. Balance of cash and cash equivalents at end of
783,677,929.06 892,251,071.59
term
69. Assets with restricted ownership or use rights
In RMB
Item Closing book value Reason
Monetary capital 455,076,287.44 Various deposits
Notes receivable 24,546,342.15 Bills endorsed or discounted but not yet due
Fixed assets 44,751,777.53 Loan by pledge
Account receivable 42,800,680.80 Loan by pledge
Investment real estate 3,293,733,474.51 Loan by pledge
Other non-current assets 316,929,580.18 Loan by pledge
100% stake in Fangda Property Development
Equity pledge 200,000,000.00
held by the Company
Total 4,377,838,142.61
70. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
Closing foreign currency
Item Exchange rate Closing RMB balance
balance
Monetary capital 131,582,817.19
Including: USD 4,630,654.71 6.9646 32,250,658.62
Euro 4,759,925.67 7.4229 35,332,452.26
HK Dollar 48,771,987.61 0.8933 43,567,909.51
INR 41,495,142.46 0.0842 3,493,891.00
Vietnamese currency 34,291,301.00 0.0003 10,111.14
SGD 305,140.93 5.1831 1,581,575.95
AUD 3,255,593.94 4.7138 15,346,218.71
Account receivable 24,384,303.64
219
Annual Report 2022 of China Fangda Group Co., Ltd.
Including: USD 2,656,421.44 6.9646 18,500,912.76
AUD 778,976.33 4.7138 3,671,938.63
Vietnamese currency 7,500,000,000.00 0.0003 2,211,452.25
Contract assets 75,021,641.29
Including: USD 6,108,518.01 6.9646 42,543,384.54
INR 127,824,310.65 0.0842 10,762,806.93
Euro 2,443,952.94 7.4229 18,141,218.27
SGD 35,888.30 5.1831 186,012.64
AUD 718,787.16 4.7138 3,388,218.91
Other receivables 1,099,104.22
Including: USD 100,523.98 6.9646 700,109.31
HK Dollar 417,090.09 0.8933 372,574.06
AUD 5,605.00 4.7138 26,420.85
Account payable 11,869,247.80
Including: USD 1,292,156.28 6.9646 8,999,351.63
HK Dollar 39,477.89 0.8933 35,264.41
SGD 10,393.70 5.1831 53,871.59
INR 31,990,897.77 0.0842 2,693,633.59
AUD 18,483.30 4.7138 87,126.58
Other payables 411,422.71
Including: USD 52,979.16 6.9646 368,978.66
INR 424,450.00 0.0842 35,738.69
Vietnamese currency 22,740,800.00 0.0003 6,705.36
(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
71. Hedging
Hedging items and related tools, qualitative and quantitative information about hedging risks:
Type Hedged item Hedging tools Hedged risk
Aluminum material Aluminum
The price of raw materials has risen, leading to an
purchase forward futures
increase in expected transaction procurement costs;
Cash flow transaction contract
hedging Forward foreign
Forward foreign The depreciation of foreign currency leads to the decrease
exchange
exchange transaction of actual collection
contract
72. Government subsidy
(1) Government subsidy profiles
In RMB
Amount accounted
Type Amount Item into the current
gain/loss
Major investment project prize from Industry and Trade
1,452,381.50 Deferred earning 57,142.80
Development Division of Dongguan Finance Bureau
220
Annual Report 2022 of China Fangda Group Co., Ltd.
Distributed PV power generation project subsidy
sponsored by Dongguan Reform and Development 318,750.29 Deferred earning 24,999.96
Commission
Subsidized land transfer 166,101.95 Deferred earning 3,725.64
Special subsidy for industrial transformation, upgrading
686,666.61 Deferred earning 80,000.04
and development
National Industry Revitalization and Technology
5,070,254.90 Deferred earning 307,728.60
Renovation Project fund
Enterprise informationization subsidy project of
324,000.00 Deferred earning 48,000.00
Shenzhen Small and Medium Enterprise Service Agency
Railway transport screen door controlling system and
20,940.89 Deferred earning 18,904.32
information transmission technology
Energy saving and environmental protection metal
curtain wall production technology transformation 960,784.30 Deferred earning 26,143.80
project
VAT rebated into revenue 3,784,292.90 Other gains 3,784,292.90
Dongguan market development support subsidy 223,901.27 Other gains 223,901.27
Reward of technology center 1,000,000.00 Other gains 1,000,000.00
Employment subsidy 2,415,528.14 Other gains 2,415,528.14
Childbearing subsidy 84,997.68 Other gains 84,997.68
Dongguan R&D subsidy 751,800.00 Other gains 751,800.00
Hi-tech enterprise development subsidy 1,500,000.00 Other gains 1,500,000.00
Subsidy for increasing production of key enterprises in
200,000.00 Other gains 200,000.00
Nanchang
Nanchang Intellectual Property Advantage
100,000.00 Other gains 100,000.00
Demonstration Enterprise Award
Hong Kong SAR epidemic subsidy 432,405.80 Other gains 432,405.80
Subsidy for high-tech enterprises' doubling support plan
200,000.00 Other gains 200,000.00
project
Dongguan revenue increment award 68,672.57 Other gains 68,672.57
Special fund for the development of Shenzhen's
311,600.00 Other gains 311,600.00
independent innovation industry
Special subsidy for specialized and special new
200,000.00 Other gains 200,000.00
enterprises
Shenzhen City will reduce VAT subsidies for key groups 1,048,450.00 Other gains 1,048,450.00
Discount subsidy 308,700.00 Financial expenses 308,700.00
Others 725,662.34 Other gains 725,662.34
Total 22,355,891.14 13,922,655.86
(2) Government subsidy refund
□ Applicable Inapplicable
Note: The value-added tax is immediately refundable income, which is mainly attributed to the fact that Sun Corporation
Kechuangyuan Software belongs to a software company and enjoys the VAT rebate policy. Since the project will not form long-
term assets, the Company will use it as a government subsidy related to income.
73. Leasing
(1) The Company as leasee
In RMB
221
Annual Report 2022 of China Fangda Group Co., Ltd.
Item 2022
Short term lease expenses with simplified treatment included in current profit and loss 29,463,492.40
Lease expenses of low value assets with simplified treatment included in current profit and loss
166,869.77
(except short-term lease)
Interest expense on lease liabilities 1,188,864.62
Total cash outflow related to leasing 40,801,108.35
(2) The Company is the leasor
Operating lease
A. Rental income
In RMB
Item 2022
Rental income 145,197,486.26
Including: income related to variable lease payments not included in the measurement of
224,362.02
lease receipts
B. Undiscounted lease receipts to be received in each of the five consecutive fiscal years after the balance sheet date, and
the total undiscounted lease receipts to be received in the remaining years
In RMB
Year Amount
2022 143,507,004.38
2023 99,878,509.89
2024 82,828,241.30
2025 36,864,929.12
2026 37,649,426.06
Total undiscounted lease receipts to be received after 2026 125,099,040.43
Including Within 1 year (inclusive) 31,908,446.55
1-2 years 18,384,979.57
2-3 years 12,835,912.30
Over 3 years 61,969,702.01
222
Annual Report 2022 of China Fangda Group Co., Ltd.
VIII. Change to Consolidation Scope
1. Change to the consolidation scope for other reasons
Change in the consolidation scope due to other reasons (such as new subsidiaries and liquidation of
subsidiaries) and the situations:
In the change of the scope of consolidation in the current period, a new subsidiary was established:
Fangda Intelligent Manufacturing.
IX. Equity in Other Entities
1. Interests in subsidiaries
(1) Group Composition
Place of Registered Shareholding percentage Obtaining
Company Business
business address Direct Indirect method
Designing, manufacturing,
Incorporati
Fangda Jianke Shenzhen Shenzhen and installation of curtain 98.66% 1.34%
on
walls
Production, processing and
Fangda Zhiyuan Incorporati
Shenzhen Shenzhen installation of subway screen 83.10%
Technology on
doors
Prodution and sales of new-
Fangda Jiangxi New type materialsm composite Incorporati
Nanchang Nanchang 75.00% 25.00%
Material materials and production of on
curtain walls
Real estate development and Incorporati
Fangda Property Shenzhen Shenzhen 99.00% 1.00%
operation on
Design and construction of Incorporati
Fangda New Energy Shenzhen Shenzhen 99.00% 1.00%
PV power plants on
Trusted processing of
Fangda Chengdu Incorporati
Chengdu Chengdu building curtain wall 100.00%
Technology on
materials
Virgin Virgin Incorporati
Shihui International Investment 100.00%
Islands Islands on
Fangda Dongguan Installation and sales of Incorporati
Dongguan Dongguan 100.00%
New Material building curtain walls on
Fangda Property Incorporati
Shenzhen Shenzhen Property management 100.00%
Management on
Fangda Jiangxi
Real estate development and Incorporati
Property Nanchang Nanchang 100.00%
operation on
Development
Fangda Luxin New Design and construction of Incorporati
Pingxiang Pingxiang 100.00%
Energy PV power plants on
Fangda Xinjian New Design and construction of Incorporati
Nanchang Nanchang 100.00%
Energy PV power plants on
Fangda Dongguan Design and construction of Incorporati
Dongguan Dongguan 100.00%
New Energy PV power plants on
Kechuangyuan Shenzhen Shenzhen Software development 83.10% Incorporati
223
Annual Report 2022 of China Fangda Group Co., Ltd.
Software on
Fangda Zhiyuan
Incorporati
Technology Hong Hong Kong Hong Kong Metro screen door 83.10%
on
Kong
Fangda Hongjun Incorporati
Shenzhen Shenzhen Investment 98.00% 2.00%
Investment on
Designing, manufacturing,
Incorporati
Fangda Australia Australia Australia and installation of curtain 100.00%
on
walls
Technology development and
sales; Invest in industry; Incorporati
Fangda Yunzhi Shenzhen Shenzhen 100.00%
Operation management of on
science and technology park
Chengda Curtain Building decoration and Incorporati
Chengdu Chengdu 100.00%
Wall Company other construction industry on
Designing, manufacturing,
Fangda Southeast Incorporati
Vietnam Vietnam and installation of curtain 100.00%
Asia on
walls
Intelligent technology, new
Fangda Shanghai Incorporati
Shanghai Shanghai energy, automated 30.00% 70.00%
Zhijian on
technology
Construction technology,
intelligent technology,
Fangda Shanghai automation technology, Incorporati
Shanghai Shanghai 100.00%
Jianzhi design, production and on
installation of building
curtain walls
Zhongrong Litai Shenzhen Shenzhen Business service 55.00% Purchase
Project investment and Incorporati
Fangda Investment Shenzhen Shenzhen 99.00% 0.52%
investment consultancy on
Fangda Lifu Project investment and Incorporati
Shenzhen Shenzhen 52.00%
Investment investment consultancy on
Fangda Xunfu Project investment and Incorporati
Shenzhen Shenzhen 100.00%
Investment investment consultancy on
Fangda Jianke Hong Design, sale and installation Incorporati
Hong Kong Hong Kong 100.00%
Kong of building curtain wall on
Consolidat
Inspection, technical service ion of
and consultation of building entities
Yunzhu Technology Shenzhen Shenzhen 100.00%
safety and building energy under
saving system common
control
Consolidat
Inspection, technical service ion of
Fangda Yunzhu and consultation of building entities
Shenzhen Shenzhen 100.00%
Testing safety and building energy under
saving system common
control
Production, processing and
General Metro Incorporati
Singapore Singapore installation of subway screen 83.10%
Technology Co., Ltd on
doors
Production, processing and
Fangda Zhiyuan Incorporati
Wuhan Wuhan installation of subway screen 83.10%
Technology Wuhan on
doors
Fangda Zhiyuan Production, processing and
Incorporati
Technology Nanchang Nanchang installation of subway screen 83.10%
on
Nanchang doors
224
Annual Report 2022 of China Fangda Group Co., Ltd.
Fangda Zhiyuan Production, processing and
Incorporati
Technology Dongguan Dongguan installation of subway screen 83.10%
on
Dongguan doors
Prodution and sales of new-
Fangda Intelligent type materialsm composite Incorporati
Ganzhou Ganzhou 99.00% 1.00%
Manufacturing materials and production of on
curtain walls
Others:
① Fangda Intelligent Manufacturing Co., Ltd., the registered capital subscribed by the Company and Fangda Hongjun Investment
Co., Ltd. is RMB10 million. As of December 31, 2022, the total paid-in registered capital of each party is RMB500 million.
(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% -55,240.33 48,354,525.24
Fangda Zhiyuan
5.96% 3,334,493.05 20,868,106.25
Technology
Note: In May 2021l the Company's subsidiaries Fangda Construction Technology Co., Ltd. and Jiangxi Fangda New Material Co.,
Ltd. transfer 10.9375% of the equity of Fangda Zhiyuan Technology Co., Ltd. because the Company cannot unconditionally avoid
performing its contractual obligations by delivering cash or other financial assets, the Company recognizes the contractual
obligations as financial liabilities, and accordingly does not recognize minority shareholders' equity.
(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 208,73 209,10 101,34 101,65 207,59 208,04 100,10 100,47
371,74 305,18 455,31 363,92
rong 7,205. 8,953. 9,268. 4,452. 2,402. 7,717. 6,531. 0,461.
7.97 4.09 5.59 9.52
Litai 21 18 59 68 32 91 59 11
Fangd
a
770,73 135,42 906,16 540,84 15,118 555,96 725,00 84,470 809,47 485,32 23,847 509,17
Zhiyua
9,460. 3,070. 2,531. 8,850. ,392.7 7,242. 6,361. ,404.6 6,766. 9,720. ,519.2 7,240.
n
72 69 41 07 1 78 40 6 06 83 2 05
Techn
ology
In RMB
Amount occurred in the current period Occurred in previous period
Company Total of Business Total of Business
Turnover Net profit Turnover Net profit
misc. operation misc. operation
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incomes cash flows incomes cash flows
Zhongrong - -
110,091.74 56,529.04 284,747.73 15,133.28 15,133.28 87,201.58
Litai 122,756.30 122,756.30
Fangda -
564,551,74 53,861,759. 54,601,158. 534,310,56 78,123,193. 77,400,836. 28,889,669.
Zhiyuan 14,231,720.
9.10 06 86 7.88 66 63 10
Technology 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
Joint venture:
Total book value of investment 54,969,042.14 55,218,946.14
Total shareholding
Net profit -249,904.00 -683,431.81
--Total of misc. incomes -249,904.00 -683,431.81
Associate:
Total shareholding
X. Risks of Financial Tools
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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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
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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;
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 fulfil its obligation to
pay in the next 12 months or throughout the remaining period.
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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 Group’s receivables, accounts receivable from top 5 customers account for 26.41% of the total
accounts receivable (beginning of the period: 25.47%); among other receivables, other receivables from top 5
customers account for 72.10% of the total other receivables (beginning of the period: 69.41%).
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.
As of December 31, 2022, the maturity of the Company's financial liabilities is as follows:
Amount: in RMB10,000
December 31, 2022
Item Within 1-3
Less than 1 year Over 3 years Total
years
Short-term loans 131,823.85 131,823.85
Derivative 29.34 29.34
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financial liabilities
Notes payable 73,489.02 73,489.02
Account payable 168,254.83 3,119.05 429.76 171,803.64
Employees' wage
6,715.09 - - 6,715.09
payable
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
4,813.32 4,813.32
liabilities
Long-term loans 63,146.28 63,203.72 126,350.00
Lease liabilities 681.92 8.83 690.75
Long-term
19,764.02 19,764.02
payable
Total liabilities 400,731.76 87,810.39 66,657.28 555,199.43
(Continued)
December 31, 2021
Item Within 1-3
Less than 1 year Over 3 years Total
years
Short-term loans 128,747.44 128,747.44
Derivative
1.19 1.19
financial liabilities
Notes payable 84,944.53 84,944.53
Account payable 132,966.88 870.87 474.60 134,312.35
Employees' wage
6,907.10 6,907.10
payable
Other payables 6,998.63 1,707.20 3,984.48 12,690.31
Non-current
liabilities due in 1 7,841.86 7,841.86
year
Other current
4,809.84 4,809.84
liabilities
Long-term loans 24,650.00 108,700.00 133,350.00
Lease liabilities 1,886.82 28.39 1,915.21
Long-term 18,364.02 18,364.02
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payable
Total liabilities 373,217.47 29,114.89 131,551.49 533,883.85
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
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, 2022, the Company's foreign currency financial assets and liabilities at the end of the
period are listed in Chapter X, VII, item note 70 of consolidated financial statements and description of foreign
currency monetary items.
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 Group Finance Department of the Company continuously monitors the Group interest rate level. 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
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adverse effect on the Company's financial performance. Management will make adjustments in time according
to the latest market conditions.
As of December 31, 2022, when other risk variables remain unchanged, if the borrowing interest rate
calculated by floating interest rate increases or decreases by 50 basis points, the net profit of the company in
that year will decrease or increase by RMB6,125,600 (December 31, 2021: RMB6,829,400).
XI. Fair Value
1. Closing fair value of assets and liabilities measured at fair value
In RMB
Closing fair value
Item Second level fair Third level fair
First level fair value Total
value value
1. Continuous fair value
-- -- -- --
measurement
(I) Transactional financial assets 789,205.34 789,205.34
1. Financial assets measured at
fair value with variations
789,205.34 789,205.34
accounted into current income
account
(1) Derivative financial assets 789,205.34 789,205.34
(2) Receivable financing 1,338,202.01 1,338,202.01
(3) Investment in other equity
11,968,973.86 11,968,973.86
tools
(4) Investment real estate 5,750,831,172.12 5,750,831,172.12
1. Leased building 5,750,831,172.12 5,750,831,172.12
(5) Other non-current financial
7,507,434.68 7,507,434.68
assets
Total assets measured at fair
789,205.34 5,750,831,172.12 20,814,610.55 5,772,434,988.01
value continuously
(6) Transactional financial
293,400.00 293,400.00
liabilities
1. Derivative financial liabilities 293,400.00 293,400.00
Total assets measured at fair
293,400.00 293,400.00
value continuously
2. Discontinuous fair value
-- -- -- --
measurement
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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 investment real estate, the Company adopts valuation technology to determine its fair value. The valuation
techniques adopted are mainly the market comparison method and the income method, and the rent and resale
model. The input value of valuation technology mainly includes comparable market unit price, market rent,
vacancy rate, growth rate, rate of return, etc.
4. Valuation technique and qualitative and quantitative information for key parameters of continuous
and discontinuous third level fair value items
If there is no active market, the Company uses evaluation techniques to determine the fair value. The valuation
models are mainly cash flow discount model and market comparable company model. The input value of
valuation technology mainly includes risk-free interest rate, benchmark interest rate, exchange rate, credit point
difference, liquidity premium, lack of liquidity discount, etc.
5. Switch between different levels, switch reason and switching time policy
The Company takes the occurrence date of the events leading to the transition between levels as the time 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.
XII. Related Parties and Transactions
1. Parent of the Company
Share of the Voting power of
Registered Registered
Parent Business parent co. in the the parent
address capital
Company company
Shenzhen Banglin Technologies Industrial
Shenzhen RMB30 million 11.11% 11.11%
Development Co., Ltd. investment
Hong Industrial
Shengjiu Investment Ltd. HKD10,000 10.11% 10.11%
Kong investment
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Annual Report 2022 of China Fangda Group Co., Ltd.
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% of the shares, and Mr. Xiong Xi – son of Mr. Xiong
Jianming, 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 IX, rights and interests in other entities.
3. Joint ventures and associates
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
Amount occurred in the
Affiliated party Related transaction Occurred in previous period
current period
Property service and sales of
Qijian Technology 244,632.39 119,618.74
goods
(2) Related leasing
The Company is the leasor:
In RMB
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Rental recognized in the Rental recognized in the
Name of the leasee Category of asset for lease
period period
Qijian Technology Houses & buildings 868,571.40 962,580.65
(3) Related guarantees
The Company is the guarantor:
In RMB10,000
Amount Completed or
Beneficiary party Start date Due date
guaranteed not
Fangda Jianke Two years after the expiration
15,000.00 April 10, 2020 Yes
date of debt performance
Fangda Zhiyuan Three years after the
Technology 10,000.00 April 10, 2020 expiration date of debt Yes
performance
Fangda Jianke Three years after the
30,000.00 January 29, 2021 expiration date of debt Yes
performance
Fangda Zhiyuan Three years after the
Technology 20,000.00 January 29, 2021 expiration date of debt Yes
performance
Fangda Jianke Three years after the
30,000.00 March 17, 2021 expiration date of debt Yes
performance
Fangda Zhiyuan Three years after the
Technology 15,000.00 March 31, 2021 expiration date of debt Yes
performance
Fangda Jiangxi New Two years after the expiration
10,000.00 May 26, 2021 Yes
Material date of debt performance
Fangda Shanghai Zhijian Three years after the
3,500.00 June 3, 2021 expiration date of debt Yes
performance
Fangda Zhiyuan Three years after the
Technology 40,000.00 July 7, 2021 expiration date of debt Yes
performance
Fangda Jianke Three years after the
50,000.00 July 27, 2021 expiration date of debt Yes
performance
Fangda Jiangxi New Three years after the
Material 6,500.00 July 30, 2021 expiration date of debt Yes
performance
Fangda Zhiyuan Three years after the
Technology 5,000.00 August 12, 2021 expiration date of debt Yes
performance
Fangda Jianke Three years after the
30,000.00 August 18, 2021 expiration date of debt Yes
performance
Fangda Jianke Three years after the
40,000.00 September 18, 2021 expiration date of debt Yes
performance
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Fangda Zhiyuan Three years after the
Technology 15,000.00 September 28, 2021 expiration date of debt Yes
performance
Kechuangyuan Software Three years after the
1,000.00 September 30, 2021 expiration date of debt Yes
performance
Fangda Jianke Three years after the
25,000.00 November 17, 2021 expiration date of debt Yes
performance
Fangda Jianke Three years after the
48,000.00 December 17, 2021 expiration date of debt Yes
performance
Total amount of guarantee
394,000.00
fulfilled
Fangda Jianke and Fangda Two years after the expiration
15,400.00 December 18, 2019 No
Zhiyuan Technology date of debt performance
Fangda Property Two years after the expiration
135,000.00 February 25, 2020 No
date of debt performance
Fangda Property Three years after the
47,000.00 December 16, 2020 expiration date of debt No
performance
Fangda Jianke Three years after the
60,000.00 December 21, 2021 expiration date of debt No
performance
Fangda Jianke Three years after the
24,000.00 March 9, 2022 expiration date of debt No
performance
Fangda Zhiyuan Three years after the
Technology 15,000.00 March 9, 2022 expiration date of debt No
performance
Fangda Jiangxi New Three years after the
Material 10,000.00 April 20, 2022 expiration date of debt No
performance
Fangda Yunzhu Three years after the
600.00 May 10, 2022 expiration date of debt No
performance
Fangda Jianke Three years after the
15,000.00 May 23, 2022 expiration date of debt No
performance
Fangda Zhiyuan Three years after the
Technology 10,000.00 May 23, 2022 expiration date of debt No
performance
Fangda Zhijian Three years after the
7,000.00 June 1, 2022 expiration date of debt No
performance
Fangda Zhiyuan Three years after the
Technology 40,000.00 July 4, 2022 expiration date of debt No
performance
Fangda Jianke Three years after the
20,000.00 August 10, 2022 expiration date of debt No
performance
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Fangda Yunzhu Three years after the
800.00 August 19, 2022 expiration date of debt No
performance
Fangda Jiangxi New Three years after the
Material 8,500.00 September 6, 2022 expiration date of debt No
performance
Fangda Jianke Three years after the
4,000.00 September 8, 2022 expiration date of debt No
performance
Fangda Jianke Three years after the
50,000.00 September 20, 2022 expiration date of debt No
performance
Fangda Jianke Three years after the
30,000.00 September 20, 2022 expiration date of debt No
performance
Fangda Jianke Three years after the
30,000.00 October 19, 2022 expiration date of debt No
performance
Fangda Zhiyuan Three years after the
20,000.00 October 19, 2022 expiration date of debt No
performance
Fangda Zhiyuan Three years after the
15,000.00 November 1, 2022 expiration date of debt No
performance
Fangda Jianke Three years after the
86,000.00 November 24, 2022 expiration date of debt No
performance
Fangda Jianke Three years after the
39,000.00 December 9, 2022 expiration date of debt No
performance
Fangda Jianke Three years after the
48,000.00 December 15, 2022 expiration date of debt No
performance
Total amount of guarantee
730,300.00
being performed
Description of related party guarantee: The above-mentioned guarantees are all associated guarantees within interested entities of
the Company.
(4) Remuneration of key management
In RMB
Item Amount occurred in the current period Occurred in previous period
Directors, supervisors and senior
9,495,306.69 9,463,963.93
management
6. Receivable and payables due with related parties
(1) Receivable interest
In RMB
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Annual Report 2022 of China Fangda Group Co., Ltd.
Closing balance Opening balance
Project name Affiliated party Remaining book Remaining book
Bad debt provision Bad debt provision
value value
Account
Qijian Technology 4,708.76 47.09 4,194.54 41.95
receivable
Other
Shenyang Fangda 42,877.00 42,877.00 42,877.00 42,877.00
receivables
Other Ganshang Joint
3,791,089.25 56,487.23 3,791,089.25 56,487.23
receivables Investment
Other Shenzhen Yikang
70,062,675.83 1,043,933.87 70,062,675.83 1,043,933.87
receivables 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 25,305,047.71 25,116,052.92
Co. Ltd.
Other payables Qijian Technology 400.00 400.00
Other payables Ganshang Joint Investment 3,355.36 3,355.36
XIII. Contingent events
1. Major commitments
Major commitments that exist on the balance sheet day
On November 6, 2017, Fangda Real Estate Co., Ltd., a subsidiary of the Company, and Bangshen Electronics (Shenzhen) Co.,
Ltd. signed the "Joint Development Agreement on 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, 2022, Fangda Real
Estate has paid a deposit of RMB 20,000,000.
(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 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, 2022, 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 RMB73,062,800 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.
The Company has no other commitments that should be disclosed by December 31, 2022.
2. Contingencies
Significant contingencies on the balance sheet date:
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Annual Report 2022 of China Fangda Group Co., Ltd.
(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 on December 26, 2019; 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 on November 22, 2019. As of the date of this report, the case is still in the identification process.
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.
③In 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 RMB33,197,543.00. As of the date of this report, the court has
filed a case and has not yet held a hearing.
④In October 2022, Fangda Jianke Co., Ltd. filed a lawsuit to the People's Court of Danzhou City, Hainan Province,
requesting Danzhou Dongtuo Tourism Development Co., Ltd. to pay to Fangda Jianke Co., Ltd. a total of RMB27,863,564.06 of
the principal and interest of the project payment for the Hengda Huadao Project. As of the date of this report, the court has
received the filing materials and has not yet filed the case.
⑤In October 2022, Fangda Jianke Co., Ltd. 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 arbitration tribunal has filed a case
and held a hearing, waiting for an award.
⑥In 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, 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. As of the date of this report, the court has
held a trial and has not yet concluded the trial.
⑦In 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 RMB3,428,313.1, occupation fee Please refund the overdue fee. In September 2022, Shenzhen Rijiasheng Trading Co., Ltd.
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. As of the date of this report, the two cases have not yet
been heard.
⑧In July 2022, Wang Weihong filed a lawsuit on the ground that Fang Dajianke Company constituted a preservation error in
the (2015) YYYZFMCZ No. 01205 case, claiming that Fang Dajianke Company compensated for the loss of RMB2,325,779.17,
and another lawsuit claimed that Fang Dajianke Company owed its project payment principal of RMB4.78 million and interest.
The court of first instance in both cases has ruled against all of Wang Weihong's claims. As of the date of this report, Wang
Weihong has filed an appeal and is in the process of second instance.
⑨Fangda Zhiyuan Technology Co., Ltd. and Shenzhen BYD Supply Chain Management Co., Ltd. (hereinafter referred to as
"BYD") have a purchase and sales contract dispute, and BYD has defaulted on payment for goods. Fangda Zhiyuan Technology
Co., Ltd. filed a lawsuit to the People's Court of Pingshan District on October 20, 2022, demanding payment of RMB5.4532
million for raw materials and storage and management fees. As of the issuance date of this report, the court has accepted the case
on February 13, 2023, waiting for the first trial.
(2) Pending major lawsuits
①On September 6, 2017, Chenghua District People's Court of Chengdu Municipality sentenced Sichuan Chuta Hengyuan
Industrial Co., Ltd. to pay construction payment of RMB10,242,182.99 to Fangda Jianke within 10 days from the date of the
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Annual Report 2022 of China Fangda Group Co., Ltd.
verdict 川 0108 民初 1828 号. As of the date of this report, Fangda Jianke has applied for execution and has not received the
relevant payment.
②On November 15, 2019, the Chengdu Chenghua District People's Court ruled that Sichuan Chuanta Hengyuan Industrial
Co., Ltd. shall pay interest to the company (at 841.23 yuan) within 10 days from the effective date of the judgment with (2019)
Chuan 0108 Min Chu No. 428 As the base number, from May 29, 2015 to the day when the payment is paid; using 841,876. 32
yuan as the base number, from May 28, 2015 to the day when the payment is paid. Based on $841, 876.32, from 28 May 2016 to
the date of payment). The company has priority right to be paid for the discounted or auctioned price of project C of Sichuan
Tower Project (Television Culture Plaza) within the scope of 7,697,4#*@$ Yuan. As of the date of this report, Fangda Jianke has
not received relevant funds.
③In November 2018, the Company's subsidiary, Fangda Jianke, sued Fujian Huapu Real Estate Development Co., Ltd.
(hereinafter referred to as Huapu company) to the People's Court of Taijiang District, Fuzhou City for paying RMB13,810,243.67
of project payment and RMB373,380.16 of overdue interest, totaling RMB14,183,623.83. Case No.: (2019) Min 0103 Min Chu
No. 4282. In April 2020, Huapu Company filed a counterclaim application to the court, requesting Fangda Jianke Company to pay
a total of 12,746,000.00 yuan for the construction period and quality. In October 2021, the court ruled that Huapu should pay the
project payment of RMB10,683,952.00 and overdue payment interest to Fangda Jianke, of which the project payment of
RMB10,683,952.00 has the priority to be paid, and the judgment has come into force. As of the date of this report, Huapu has been
applied for bankruptcy liquidation, and Fangda Jianke has declared priority creditor's rights.
④In January 2022, Fangda Jianke filed a lawsuit against Chongqing Yongde Real Estate Co., Ltd. to the People's Court of
Jiangbei District, Chongqing to pay RMB28,760,911.55 for the project and the interest on overdue payment, and claimed to enjoy
the priority of the project payment. The case number is (2022)渝 0105 民初 227 号. In May 2022, the court ruled that Chongqing
Yongde Real Estate Co., Ltd. should pay RMB28,760,911.55 of project funds and overdue payment interest to Fangda Jianke, and
supported the priority right of compensation of project funds. The judgment has taken effect. As of the date of this report,
Chongqing Yongde Real Estate Co., Ltd. has been ruled by the court to pre-reorganize, and Fangda Construction Technology Co.,
Ltd. has declared its creditor's rights according to the notice of the administrator.
⑤In September 2021, Fangda Jianke sued Qianhai Junlin Industrial Development (Shenzhen) Co., Ltd. and Evergrande Real
Estate Group (Shenzhen) Co., Ltd. for paying RMB7096421.00 yuan of project payment and overdue interest, and claimed the
priority of project payment. In August 2022, the court ruled that Qianhai Junlin Industrial Development (Shenzhen) Co., Ltd.
should pay the project payment of RMB7,096,421.00 and the interest on overdue payment to Fangda Construction Technology Co.,
Ltd., and supported the priority of the project payment, but did not support the shareholder Evergrande Real Estate Group
(Shenzhen) Co., Ltd. to bear the joint and several liabilities. As of the disclosure date of this report, the judgment has come into
effect and has not yet been collected.
⑥In October 2021, Fangda Jianke filed an arbitration with the arbitration court, requiring Zhuhai R&F Real Estate Co., Ltd.
to pay RMB11,806,353.97 of the project funds and overdue interest, and claimed to enjoy the priority of the project funds. The
case was accepted by the Zhuhai International Arbitration Court on October 26, 2021, with the case number of ZAAZ (2021) No.
698. In January 2022, Fangda Jianke Co., Ltd. reached a settlement with Zhuhai Fuli Real Estate Co., Ltd., signed a settlement
agreement, and signed a house payment agreement with the third party Hengxin International Optical Industry Co., Ltd. After the
settlement, Fuli paid 652248.97 yuan for the project; In May 2022, due to the failure of Fuli Company and Hengxin International
Optical Industry Co., Ltd. to perform the house arrival agreement, Fangda Construction Technology Co., Ltd. again filed for
arbitration, demanding the payment of the remaining project funds and interests totaling 11633903.96 yuan. The Zhuhai
International Arbitration Court accepted the case in May 2022, with the case number of ZCZZ (2022) No. 283, and completed the
hearing on July 25, 2022. As of the disclosure date of this report, both parties have reached an agreement to offset the payment
with the house through mediation of the arbitration commission, which has not yet been fulfilled.
(3) Contingent liabilities formed by providing of guarantee to other companies' debts and their influences on financial
situation
By December 31, 2022, the Company has provided loan guarantees for the following entities:
In RMB10,000
Name of guaranteed Guarantee Amount Term Remarks
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entity
Guarantee and
Fangda Property 89,000.00 2020.2.25-2030.02.24
mortgage guarantee
Fangda Property Guarantee 44,350.00 2021.03.18-2031.03.18
Fangda Jianke Guarantee 4,000.00 2022.09.08-2023.09.03
Fangda Jianke Guarantee 5,000.00 2022.03.27-2023.03.26
Fangda Jianke Guarantee 3,000.00 2022.06.01-2023.06.01
Fangda Zhiyuan
Guarantee 3,000.00 2022.07.25-2023.07.25
Technology
Total 148,350.00
Notes: ① Contingent liabilities caused by guarantees provided for other entities are all related guarantees between
interested entities in the Company.
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, 2022, the Company assumed the above-mentioned phased guarantee amount
of RMB20,114,100.
(4) Other contingent liabilities and their influences
The Company has no other contingent events that should be disclosed by December 31, 2022.
3. Others
As of December 31, 2022, the Company has not revoked the letter of guarantee:
Guarantee balance (original
Currency Deposit (RMB) Credit line used (RMB)
currency)
CNY 712,044,534.59 712,044,534.59
INR 78,691,782.78 46,099.32 6,574,004.29
HKD 15,349,982.00 15,000,000.00
USD 2,507,136.33 1,432,146.95 16,029,054.73
SGD 2,700,000.00 13,994,370.00
AUD 1,580,000.00 7,447,804.00
EUR 3,771,764.01 27,997,427.07
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Total 16,478,246.27 784,087,194.68
XIV. Post-balance-sheet events
1. Profit distribution
In RMB
Profit or dividend to be distributed 53,693,711.35
Profit or dividend approved to be
53,693,711.35
distributed
The Company held the 18th meeting of the 9th term of Board on Friday,
February 24, 2023 to vote for the proposal of dividend distribution for year
2022. According to the resolution of the 18th meeting of the 9th Board of
Profit distribution plan Directors, the Company plans to distribute cash dividends of RMB0.50
(including tax) per 10 shares to all shareholders based on the total capital stock
of 1,073,874,227 shares on December 31, 2022, totaling RMB53,693,711.35.
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 February 24,
2023 (report date approved by the Board of Directors).
XV. 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 2022 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
2,881,797,44 564,551,749. 377,331,127. 20,518,921.8 28,258,406.7 25,481,701.2 3,846,975,94
Turnover
4.24 10 79 6 1 6 8.44
Including:
external 2,877,126,18 564,551,749. 369,529,923. 19,707,669.0 16,060,425.1 3,846,975,94
transaction 1.59 10 55 6 4 8.44
income
Inter-
segment 12,197,981.5 25,481,701.2
4,671,262.65 7,801,204.24 811,252.80
transaction 7 6
income
Including:
major 2,841,333,84 563,230,008. 247,329,856. 20,518,921.8 3,664,169,29
8,243,338.11
business 5.45 51 12 6 3.83
turnover
Operating 2,368,252,82 437,859,996. 109,507,083. 2,917,753,96
8,175,637.03 207,701.70 6,249,275.19
cost 4.82 04 12 7.52
Including:
2,338,589,73 437,859,996. 101,834,575. 2,880,210,67
major 8,175,637.03 6,249,275.19
9.95 04 17 3.00
business cost
-
Operation 340,009,738. 66,558,936.8 149,225,545. 28,984,034.4 599,228,080.
-526,090.03 14,975,915.4
cost 84 4 16 2 64
1
Operating 173,534,880. 60,132,816.2 118,598,499. 12,869,374.8 34,208,341.4 329,993,900.
-933,329.41
profit/(loss) 58 2 51 6 8 28
Total assets 5,162,017,97 906,162,531. 6,294,144,70 132,097,040. 3,134,371,54 2,883,608,51 12,745,185,2
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Annual Report 2022 of China Fangda Group Co., Ltd.
9.59 41 6.91 22 7.97 2.08 94.02
Total 3,161,283,01 555,967,242. 3,552,387,32 17,031,343.2 783,033,170. 1,144,901,96 6,924,800,13
liabilities 6.76 78 4.26 3 18 5.44 1.77
(3) Others
Since more than 90% of the Group's revenue comes from Chinese customer and 90% of the Group's assets
are in China, no detailed regional information is needed.
XVII. Notes to Financial Statements of the Parent
1. Account receivable
(1) Account receivable disclosed by categories
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
Includin
g:
Account
receivab
le for
which
680,529. 32,584.9 647,944. 595,366. 585,936.
bad debt 100.00% 4.79% 100.00% 9,430.38 1.58%
54 6 58 68 30
provisio
n is
made by
group
Includin
g:
Portfolio
680,529. 32,584.9 647,944. 595,366. 585,936.
3. 100.00% 4.79% 100.00% 9,430.38 1.58%
54 6 58 68 30
Others
680,529. 32,584.9 647,944. 595,366. 585,936.
Total 100.00% 4.79% 100.00% 9,430.38 1.58%
54 6 58 68 30
Provision for bad debts by combination:
In RMB
Closing balance
Name
Remaining book value Bad debt provision Provision rate
Portfolio 3. Others 680,529.54 32,584.96 4.79%
Group recognition basis:
See 9. 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 of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose information about bad debts:
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Annual Report 2022 of China Fangda Group Co., Ltd.
□ Applicable Inapplicable
Account age
In RMB
Age Remaining book value
Within 1 year (inclusive) 321,399.65
2-3 years 359,129.89
Total 680,529.54
(2) 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
Portfolio 3. Others 9,430.38 23,154.58 32,584.96
Total 9,430.38 23,154.58 32,584.96
(3) Balance of top 5 accounts receivable at the end of the period
In RMB
Closing balance of accounts Balance of bad debt provision
Entity Percentage (%)
receivable at the end of the period
Top five summary 640,390.23 94.10% 32,291.94
Total 640,390.23 94.10%
2. Other receivables
In RMB
Item Closing balance Opening balance
Other receivables 1,046,500,428.02 1,276,731,665.95
Total 1,046,500,428.02 1,276,731,665.95
(1) Other receivables
1) Other receivables are disclosed by nature
In RMB
By nature Closing balance of book value Opening balance of book value
Deposit 150,699.54 150,699.54
Debt by Luo Huichi 11,242,291.48 12,992,291.48
Others 396,561.98 120,143.89
Accounts between related parties within the
1,046,003,558.83 1,276,507,096.22
scope of consolidation
Total 1,057,793,111.83 1,289,770,231.13
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Annual Report 2022 of China Fangda Group Co., Ltd.
2) Method of bad debt provision
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, 2022 3,396.70 13,035,168.48 13,038,565.18
Balance on January 1, 2022
in the current period
Provision 4,118.63 4,118.63
Transferred back in the
1,750,000.00 1,750,000.00
current period
Balance on December 31,
7,515.33 11,285,168.48 11,292,683.81
2022
Changes in book balances with significant changes in the current period
□ Applicable Inapplicable
Account age
In RMB
Age Remaining book value
Within 1 year (inclusive) 97,579,475.19
1-2 years 697,897,404.79
2-3 years 250,960,363.83
Over 3 years 11,355,868.02
Including: more than 5 years 11,355,868.02
Total 1,057,793,111.83
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 or Closing balance
balance Provision Canceled Others
recovered
Other receivables and
13,038,565.18 4,118.63 1,750,000.00 11,292,683.81
bad debt provision
Total 13,038,565.18 4,118.63 1,750,000.00 11,292,683.81
Including significant recovery or reversal:
In RMB
Entity Written-back or recovered amount Method
Luo Huichi 1,750,000.00 Bank transfer recovery
Total 1,750,000.00
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4) 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
66,135,688.46 Less than 1 year
Affiliated party
Fangda Property 538,000,000.00 1-2 years 77.93%
payment
220,178,936.99 2-3 years
Fangda Jiangxi 20,000,000.00 Less than 1 year
Affiliated party
Property 159,897,404.79 1-2 years 17.03%
payment
Development 241,633.75 2-3 years
Affiliated party
Shihui International 30,459,793.09 1-2 years 2.88%
payment
Debt by Luo
Luo Huichi 11,242,291.48 Over 5 years 1.06% 11,242,291.48
Huichi
Affiliated party
Fangda New Energy 10,851,784.69 Less than 1 year 1.03%
payment
Total 1,057,007,533.25 99.93% 11,242,291.48
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
1,457,331,253.00 1,457,331,253.00 1,196,831,253.00 0.00 1,196,831,253.00
subsidiaries
Total 1,457,331,253.00 0.00 1,457,331,253.00 1,196,831,253.00 0.00 1,196,831,253.00
(1) Investment in subsidiaries
In RMB
Change (+,-) Balance of
impairment
Opening book Decreased Impairme Closing book
Invested entity Increased provision at
value investmen nt Others value
investment the end of the
t provision period
751,950,000.
Fangda Jianke 491,950,000.00 260,000,000.00
00
Fangda Jiangxi 74,496,600.0
74,496,600.00
New Material 0
Fangda 198,000,000.
198,000,000.00
Property 00
Shihui
61,653.00 61,653.00
International
Fangda New 99,000,000.0
99,000,000.00
Energy 0
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Annual Report 2022 of China Fangda Group Co., Ltd.
Fangda
98,000,000.0
Hongjun 98,000,000.00
0
Investment
Fangda 235,323,000.
235,323,000.00
Investment 00
Fangda
Intelligent 500,000.00 500,000.00
Manufacturing
1,457,331,25
Total 1,196,831,253.00 260,500,000.00
3.00
4. Operational revenue and costs
In RMB
Amount occurred in the current period Occurred in previous period
Item
Income Cost Income Cost
Other businesses 28,268,463.91 207,701.70 24,953,602.85 460,120.74
Total 28,268,463.91 207,701.70 24,953,602.85 460,120.74
Income information:
In RMB
Contract classification Segment 1 - other segments Total
Type of product
Including: Other businesses 28,268,463.91 28,268,463.91
Total 28,268,463.91 28,268,463.91
Information related to performance obligations:
The Company's operating income is derived from property rental income.
Information related to the transaction price allocated to the remaining performance obligations:
The amount of revenue corresponding to the performance obligations that have been signed, but not yet performed or not yet
performed at the end of the reporting period is 23,961,688.74 yuan, of which 12,420,010.82 yuan is expected to be recognized in
2023, and 5,644,062.11 yuan is expected to be recognized in 2024, 5,897,615.81 yuan is expected to be recognized in 2025 and
beyond.
5. Investment income
In RMB
Amount occurred in the current
Item Occurred in previous period
period
Gains from long-term equity investment
33,660,000.00
measured by costs
Investment income from disposal of trading
566,025.88 334,681.44
financial assets
Total 566,025.88 33,994,681.44
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Annual Report 2022 of China Fangda Group Co., Ltd.
XVIII. Supplementary Materials
1. Detailed accidental gain/loss
Applicable □ Inapplicable
In RMB
Item Amount Notes
Gain/loss of non-current assets -1,421,880.09
Government subsidies accounted into current gain/loss account, other than
those closely related to the Company's common business, comply with the 10,138,362.96
national policy and continues to enjoy at certain fixed rate or amount.
Capital using expense charged to non-financial enterprises and accounted
8,619,807.35
into the current income account
Gain/loss from change of fair value of transactional financial asset and
liabilities, and investment gains from disposal of transactional financial
4,666,147.76
assets and liabilities and sellable financial assets, other than valid period
value instruments related to the Company's common businesses
Write-back of impairment provision of receivables for which impairment
6,138,338.91
test is performed individually
Gain/loss from change of fair value of investment property measured at
-10,095,973.89
fair value in follow-up measurement
Other non-business income and expenditures other than the above -2,764,570.20
Less: Influenced amount of income tax 3,172,419.69
Influenced amount of minority shareholders' equity 139,179.75
Total 11,968,633.36 --
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
Weighted average Earning per share
Profit of the report period net income/asset Basic earnings per share Diluted Earnings per share
ratio (yuan/share) (yuan/share)
Net profit attributable to common
5.03% 0.26 0.26
shareholders of the Company
Net profit attributable to the common owners
of the PLC after deducting of non-recurring 4.81% 0.25 0.25
gains/losses
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Annual Report 2022 of China Fangda Group Co., Ltd.
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
(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
February 28, 2023
250
