2021 Annual Report
Stock Code: 600570 Stock Abbreviation: Hundsun Technologies
Hundsun Technologies Inc.
2021 Annual Report
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2021 Annual Report
Important Notice
I. The Board and the Supervisory Board of the Company and the Directors, Supervisors and
members of the Senior Management warrant the truthfulness, accuracy and completeness of the
contents in this Annual Report and confirm that there are no misrepresentations or misleading
statements contained in or material omissions from this Annual Report, and accept several and
joint legal responsibilities.
II. All Directors attended the board meeting of the Company to consider and approve the annual
results.
III. Pan-China Certified Public Accountants LLP has issued a standard unqualified auditor’s report
for the Company.
IV. Peng Zhenggang, chairman of the Company, and Yao Manying, Financial Controller and Head
of the Finance Department (person in charge of accounting), warrant the truthfulness, accuracy
and completeness of the financial statements contained herein.
V. Profit distribution plan or capital reserves share capitalization plan during the Reporting Period
upon deliberation at the board meeting
Hundsun Technologies Inc. (hereinafter referred to as "the Company", for the parent company, the
same as below) realized a total net profit of RMB1,379,884,502.16 (in RMB, the same as below) in 2021.
According to the Company Law, the Articles of Association of the Company and the relevant guidelines of
the China Securities Regulatory Commission and the Shanghai Stock Exchange, 10% of the statutory
reserve fund shall be withdrawn first, plus the profit carry-over from the previous year. According to the
actual situation, the Company plans to implement the profit distribution plan in the following order:
1. The Company will withdraw 10% of the statutory reserve fund of RMB137,988,450.2 first.
2. Based on 1,461,144,040 shares, being the Company’s total share capital of 1,461,560,480 shares
(as of March 29, 2022, the same below) less 416,440 shares in the Company’s special repurchase
account, a cash dividend of RMB1.00 (tax inclusive) per 10 shares will be paid to all
shareholders, totaling RMB146,114,404.
3. Based on 1,461,144,040 shares, being the Company’s total share capital of 1,461,560,480 shares
less 416,440 shares in the Company’s special repurchase account, 3 bonus shares will be
distributed to all shareholders for every 10 shares, totaling 438,343,212 bonus shares.
4. The remaining distributable profits will be carried forward to the next year.
The above profit distribution plan shall be submitted for deliberation and approval at the general
meeting of the Company before implementation. After implementation, the Company's total share capital
will be 1,899,903,692 shares.
If, during the period between the disclosure of this profit distribution plan and the record date for
dividend distribution, the Company's share capital involved in the profit distribution changes due to
relevant matters, the Company plans to maintain the same proportion of profit distribution per share, adjust
the total amount of distribution accordingly, and announce the details about adjustment separately.
VI. Disclaimer of forward-looking statements
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2021 Annual Report
√ Applicable □ Not Applicable
The Company's future strategies and plans contained herein do not constitute substantive
commitments to investors by the Company. Investors and stakeholders should be adequately aware of risks
herein and understand the differences among plans, forecasts and commitments.
VII.Whether the Controlling Shareholder of the Company or its associates has misappropriated the
Company’s funds for purposes other than for business?
N
VIII. Whether the Company has provided external guarantees in violation of any prescribed
decision-making procedures?
N
IX. Whether more than half of the Directors fail to warrant the truthfulness, accuracy and
completeness of the contents contained in the annual report disclosed by the Company?
N
X. Reminder of important risks
None. The Company has described the potential risks in detail herein. Please refer to "(IV) Potential
risks" of "VI. Discussion and analysis of the future development of the Company" in "Section III
Management Discussion and Analysis" for details.
XI. Others
□ Applicable √ Not applicable
Note:
This document is a translated version of the Chinese version 2021 Annual Report (“2021 年年度报
告 ” ), and the published announcements in the Chinese version shall prevail. The complete published
Chinese 2021 Annual Report may be obtained at www.sse.com.cn/
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2021 Annual Report
Contents
Section I Definitions ...................................................................................................................................... 5
Section II Company Profile and Key Financial Indicators .........................................................................6
Section III Management Discussion and Analysis .........................................................................................9
Section IV Corporate Governance ........................................................................................................... 37
Section V Environmental and Social Responsibility ................................................................................. 54
Section VI Significant Events ....................................................................................................................55
Section VII Changes in Shares and Particulars of Shareholders ............................................................64
Section VIII Preferred Shares ......................................................................................................................71
Section IX Corporate Bonds ..........................................................................................................................72
Section X Financial Report .......................................................................................................................... 73
I. Accounting statements signed and sealed by the Chairman, Financial Controller, and Head
of the Finance Department (person in charge of accounting) of the Company
II. The original Auditor’s Report sealed by Pan-China Certified Public Accountants LLP and
Documents for Inspection
sealed and signed by Pan-China's CPAs
III. Originals of all documents and announcements of the Company publicly disclosed in the
newspaper designated by CSRC during the Reporting Period
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Section I Definitions
I. Definitions
Unless the context otherwise requires, the following terms shall have the following meanings in this report:
Definitions of frequently-used terms
Hundsun, Hundsun Technologies Hundsun Technologies Inc.
or the Company
Handsome Group Hangzhou Handsome Electronics Group Co., Ltd.
REITs Real Estate Investment Trusts
Wealth Management Connect an arrangement under which individual residents in the Guangdong-Hong Kong-Macao
Greater Bay Area carry out cross-boundary investment in wealth management products
distributed by banks in the Greater Bay Area
POSIF investment adviser Investment Adviser of Publicly Offered Securities Investment Funds
FICC services Fixed Income, Currencies and Commodities services, including underlying assets such as
fixed income securities, currencies and commodities, as well as derivatives underlying
those assets.
TA system Transfer Agent, Hundsun’s fund registration and transfer system software, used for
investor account management and asset management in the asset management industry,
including funds, securities, insurance, futures, and private equity
FinTech FinTech mainly refers to the low-threshold financial services provided by Internet
companies or high-tech companies through cloud computing, big data, mobile Internet,
and other emerging technologies.
O45 the Company’s investment trading system, of which O refers to Oracle version and 45
refers to version 4.5
UF3.0 Core Business Operation Platform System Version 3.0
Light technology platform LIGHT, a financial digital infrastructure independently developed by Hundsun and a new
generation of IT application innovation infrastructure, which is committed to helping
customers win business success and build capabilities leading to the future through
technical capabilities
CESI China Electronics Standardization Institute
NLP Natural Language Processing, a subject that studies the language in human-computer
interaction
AI Artificial Intelligence, abbreviated as AI
Finastra a global company based in the UK with a broad range of financial software products and
services, providing financial technology services to financial institutions of all sizes
worldwide.
LTC a management process that continuously optimizes customer-focused operations and
management to improve overall operation targets
IPD a set of product and R&D management system, which examines the idea and framework
of product and R&D management from the perspective of product investment and
development
"Three responsibilities" system In order to provide customers with a better and more professional service experience,
three types of responsible persons are assigned according to business processes and
specialization of work for customer interfaces, namely Account responsible (AR),
Solutions responsible (SR), and Fulfillment responsible (FR).
"Triumvirate" system the three most important positions in product R&D management, i.e., product manager,
system architect, and R&D project manager
DSTE strategic planning process Develop Strategy To Execution
CRM Customer Relationship Management
PB system Prime Brokerage System
BPO Business Process Outsourcing
SaaS Software-as-a-Service, i.e., providing software services over the network
AMS Asset Management System
RPA Robotic Process Automation
AIOps Artificial Intelligence for IT Operations
EAAS Everything As A Service, a service strategy of the Company
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Section II Company Profile and Key Financial Indicators
I. COMPANY INFORMATION
Chinese name of the Company 恒生电子股份有限公司
Chinese abbreviation 恒生电子
English name of the Company Hundsun Technologies Inc.
English abbreviation Hundsun
Legal representative of the Company Peng Zhenggang
II. CONTACT INFORMATION
Secretary of the Board Representative of Securities Affairs
Name Tu Haiyan Gu Ning
Correspondence address Hundsun Tower, No. 3588 Jiangnan Avenue, Hundsun Tower, No. 3588 Jiangnan
Binjiang District, Hangzhou Avenue, Binjiang District, Hangzhou
Tel. 0571-28829702 0571-28829702
Fax 0571-28829703 0571-28829703
E-mail investor@hundsun.com investor@hundsun.com
III. BASIC INFORMATION
Registered address Hundsun Tower, No. 3588 Jiangnan Avenue, Binjiang District,
Hangzhou
Historical changes to the registered address None
Principal place of business Hundsun Tower, No. 3588 Jiangnan Avenue, Binjiang District,
Hangzhou
Postal code of principal place of business 310053
Website of the Company www.hundsun.com
E-mail investor@hundsun.com
IV. INFORMATION DISCLOSURE AND PLACE FOR INSPECTION
Newspapers selected by the Company for information China Securities Journal, Shanghai Securities News, Securities
disclosure Times, and Securities Daily
Website designated by the Shanghai Stock Exchange for www.sse.com.cn
publishing the annual report
Place for inspection of annual reports of the Company Hundsun Tower, No. 3588 Jiangnan Avenue, Binjiang District,
Hangzhou
V. BASIC INFORMATION OF THE COMPANY’S SHARES
Basic Information of the Company’s Shares
Class of shares Stock exchange Stock abbreviation Stock code Stock abbreviation
before change
A shares Shanghai Stock Hundsun Technologies 600570 None
Exchange
VI. OTHER RELEVANT INFORMATION
Name Pan-China Certified Public Accountants LLP
Accounting firm (domestic) engaged by Office address Hangzhou, the PRC
the Company Names of signing Chen Caiqin and Fei Jun
accountants
VII. KEY ACCOUNTING DATA AND FINANCIAL INDICATORS FOR THE PAST THREE
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YEARS
(I) Key accounting data
Unit: Yuan Currency: RMB
Increase or decrease
for the period over the
Key accounting data 2021 2020 2019
same period of the
previous year (%)
Revenue 5,496,578,624.88 4,172,645,156.56 31.73 3,871,840,010.31
Net profit attributable to
shareholders of the 1,463,538,930.14 1,321,735,522.48 10.73 1,415,848,641.24
Company
Net profit attributable to
shareholders of the
Company net of 946,569,672.55 733,590,924.61 29.03 889,871,300.91
non-recurring profit or
loss
Net cash flows from
956,789,306.14 1,397,902,270.41 -31.56 1,070,787,954.28
operating activities
Increase or decrease
at the end of the
period as compared to
At the end of 2021 At the end of 2020 At the end of 2019
that of the same
period of the previous
year (%)
Net assets attributable
to shareholders of the 5,695,031,051.05 4,554,029,323.59 25.05 4,478,963,385.36
Company
Total assets 12,079,908,312.76 9,971,144,688.34 21.15 8,359,497,109.35
(II) Key financial indicators
Increase or decrease
for the period over
Key financial indicators 2021 2020 the same period of 2019
the previous year
(%)
Basic earnings per share (RMB/share) 1.01 0.90 12.22 0.97
Diluted earnings per share (RMB/share) 1.01 0.90 12.22 0.97
Basic earnings per share net of
0.65 0.50 30.00 0.61
non-recurring profit and loss (RMB/share)
Weighted average ROE (%) 30.11 31.57 -1.46 37.16
Weighted mean ROE net of non-recurring
19.47 17.52 1.95 23.35
profit or loss (%)
Explanation on the key accounting data and financial indicators of the Company for the past three years
before the end of the Reporting Period
□Applicable √Not Applicable
VIII. ACCOUNTING DATA DIFFERENCES BETWEEN THE PRC GAAP STANDARDS AND
FOREIGN ACCOUNTING STANDARDS
(I) Difference arising from the net profit and net assets attributable to shareholders of the
Company in the financial statements disclosed simultaneously pursuant to the International
Accounting Standards and the PRC GAAP Standards
□Applicable √Not Applicable
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(II) Difference arising from the net profit and net assets attributable to shareholders of the Company
in the financial statements disclosed simultaneously pursuant to the foreign accounting standards
and the PRC GAAP Standards
□Applicable √Not Applicable
(III) Explanation on the difference between domestic and foreign accounting standards
□Applicable √Not Applicable
IX. KEY FINANCIAL DATA OF 2021 BY QUARTER
Unit: Yuan Currency: RMB
Q1
Q2 Q3 Q4
(January to
(April to June) (July to September) (October to December)
March)
Revenue 751,184,334.01 1,300,966,351.64 1,068,727,516.27 2,375,700,422.96
Net profit attributable to
shareholders of the 168,625,222.28 546,464,316.71 -31,254,513.82 779,703,904.97
Company
Net profit attributable to
shareholders of the
37,621,735.72 262,070,634.56 -25,520,447.04 672,397,749.31
Company net of
non-recurring profit or loss
Net cash flows from
-832,461,297.53 51,193,250.77 180,904,157.44 1,557,153,195.46
operating activities
Explanation on the difference between quarterly results and information disclosed in periodic reports
□Applicable √Not Applicable
X. NON-RECURRING PROFITS OR LOSSES AND AMOUNTS
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Non-recurring profits or losses Amount for 2021 Note (if applicable) Amount for 2020 Amount for 2019
Profit or loss from disposal of 38,436,050.92 Mainly represented the 344,555,568.21 62,739,044.33
non-current assets investment income from
the transfer of shares of
HundSun Chang Yun and
the fair value recognition
of the remaining shares of
Dworld AI
Government grants recognized 57,355,855.21 Mainly represented the 38,004,499.61 43,196,217.04
in profit or loss for the current government grants for
period (excluding those closely special projects
related to the normal business
of the Company and granted
under the national policies and
continuously enjoyed
according to a certain quota of
amount or volume
Profit or loss from changes in 489,548,525.78 Mainly represented the 244,076,200.23 489,108,448.60
the fair value generated from profit and loss from the
the Company's changes in the fair value
held-for-trading and derivative generated from the
financial assets, and Company's
held-for-trading and derivative held-for-trading financial
financial liabilities, and assets, and the investment
investment income from the income from the disposal
disposal of held-for-trading of the held-for-trading
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Non-recurring profits or losses Amount for 2021 Note (if applicable) Amount for 2020 Amount for 2019
and derivative financial assets, financial assets
held-for-trading and derivative
financial liabilities, and other
debt investments, except for
effective hedging business
related to the Company's
normal business
Other non-operating income
and expenses other than the -770,038.19 -2,223,351.85 35,336.42
above
Other profits or losses that
belong to non-recurring profits -10,389,612.76
and losses
Less: Effect on income tax 56,393,147.86 8,719,973.75 57,565,685.81
Effect on minority interests
11,207,988.27 17,158,731.82 11,536,020.25
(after-tax)
Total 516,969,257.59 588,144,597.87 525,977,340.33
Explanation on defining the non-recurring profits and losses set out in the Explanatory Announcement No.
1 on Information Disclosure for Companies Offering Securities to the Public - Non-Recurring Profit or
Loss as recurring profits and losses
□Applicable √Not Applicable
XI. ITEMS MEASURED AT FAIR VALUES
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Effect on the profit for
Item Opening balance Closing balance Change for the period
the period
Held-for-trading financial
2,723,350,172.04 1,991,523,094.74 -731,827,077.30 82,538,604.83
assets
Other debt investments 83,845,382.74 65,681,018.23 -18,164,364.51 2,660,128.09
Other non-current financial
2,229,463,162.16 2,981,720,276.86 752,257,114.70 478,786,243.21
assets
Total 5,036,658,716.94 5,038,924,389.83 2,265,672.89 563,984,976.13
XII. Others
□Applicable √Not Applicable
Section III Management Discussion and Analysis
I. DISCUSSION AND ANALYSIS OF BUSINESS OPERATIONS
(I) Overall operations
In 2021, China remained a global leader in pandemic prevention and control and in economic and
social development through scientifically integrating these goals. Digital technology has played an
important role in terms of information services, pandemic detection and material security in the battle
against COVID-19. At the same time, the pandemic has created huge public demand for online education,
home office services, healthcare and entertainment, making digitalization a hot topic in various industries,
the financial industry included. While keeping abreast of changes in regulatory policy and industry
development trends, the Company keenly seized relevant market opportunities, changing or upgrading
related business services on a timely basis. Through the efforts of all of its employees, the Company
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achieved sustained business and organizational growth, making great progress in its products, technology,
operations and management.
During the Reporting Period, the Company's revenue increased by 31.73% year on year, while net
profit attributable to shareholders increased by 10.73% year on year. The main reason for this increase was
the increased income from main business, under the influence of financial innovation policies, together
with the lack of significant asset impairment losses relative to the previous year, during the Reporting
Period.
During the Reporting Period, continuous growth was maintained in all of the Company's businesses.
In terms of industries, good growth was seen in the insurance and private equity markets, while securities,
funds, futures and trusts maintained steady growth. In terms of products, the Company smoothly promoted
its new generation of core products, such as 045, Valuation 6.0 & TA, wealth management sales and
investment advisory products, which were popular with customers. The Company put UF3.0 into
full-service operation and continued to maintain its technological leadership via securing in-depth
cooperation with a number of brokers using a distributed cloud-native architecture.
In terms of the Company's revenue sources, big retail and big asset management services remained
dominant, with product lines such as wealth middle platforms, wealth management sales and investment
advisory in big retail services, and product lines such as investment & transaction management, and
valuation & asset management platforms in the big asset management services all achieving significant
growth. In terms of innovative businesses, revenue from data services, data end-use applications, data
middle office, and AI for research and investment recorded satisfactory growth.
In order to build a double first-class enterprise, the Company continued to improve customer
satisfaction, increase the maturity of its duty mechanism for senior executives, and significantly improve
efficiency of delivery, with a 9.6% year-on-year decrease in the contract delivery cycle period. It continued
to improve product quality, comprehensively reorganized its technological products, optimized its product
management principles and resource allocation for key positions, and successfully implemented an
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employee share ownership plan. In terms of values, the Company has always adhered to a “customer first”
core concept, pursuing the goal of exceeding customer expectations.
(II) R&D and technology
During the Reporting Period, Hundsun's core products, UF3, O45, Valuation 6 and the new generation
of TA all completed cloud-native technological upgrades and were also officially launched to key
customers. In terms of technological upgrading, the Company continued to improve the Light technology
platform, making it more powerful via the introduction of new technologies and the release of a series of
new technological products, such as LightDB, a relational database supporting innovative financial IT
application business scenarios; LightCore, a cloud-native foundation supporting comprehensive
cloud-based business systems; LightAtom, a low-code development platform supporting customer
participation in customized development; and LightHSL, a cross-chain service management platform
supporting a variety of heterogeneous underlying chains. It also launched the Light Cloud platform, which
offers online API distribution, an online development platform and online community services providing
comprehensive assistance customers in their digital transformation and upgrading.
The Company was also actively involved in the development of standards for emerging technologies.
In the field of databases, the product team released a white paper on databases for the industry and won the
tender to develop database testing standards for SSE's IT application innovation base. In the high
performance computing field, the product team released an industry initiative on performance measurement
standards for FPGA-based ticker products. In AI, the Company’s financial knowledge graph platform was
awarded application platform and construction platform product certificates by CESI. The NLP Team
released intelligent Q&A evaluation criteria. The Intelligent Multimedia Team released evaluation criteria
for intelligent dual-recording visual systems. The AI Business Team began formulation of business event
standards, which currently remains in the project approval stage. In the blockchain field, the team
participated in the development of five blockchain technical standards, and won three industry awards, with
related products passing MIIT CAICT's evaluation based on five technical indicators.
(III) M&A and Investment
During the Reporting Period, the Company continued to make appropriate efforts concerning
investment and mergers and acquisitions, acquiring Hengxin Lirong and thereby gaining business and
intellectual property rights from Finastra related to the Summit and Opics fund management systems in
Mainland China, Hong Kong and Macau, and carrying out business integration with the subsidiary
Cloudwing Network, thereby improving its layout in the OPICS fund trading system field. The Company
continued to pursue its internationalization strategy, acquiring a 23.66% stake in N2N Connect, a leading
trading solutions provider in Malaysia, through the subsidiary Hundsun Holdings Limited, to expand its
business in the Southeast Asian market. The Company further improved its AI investment research product
line by increasing its shareholding in Dworld AI. The Company continued to invest in the FinTech
ecosystem, including a number of leading tech-based startups in niche markets, such as XSKY and Horizon,
through relevant mutual funds, and cooperated with these companies in related business areas to achieve
win-win cooperation through business synergy.
(IV) Systems management
1. Customer satisfaction first/quality first
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The Company continued its adherence to customer first values. In order to improve customer
satisfaction and product quality, the Company actively implemented LTC, IPD and its "Three
responsibilities" system, as well as its duty mechanism for senior executives, along with its "Triumvirate "
system, and strives to achieve high performance, high reliability and technological leadership in product
quality, thereby improving product quality and delivery efficiency.
2. Management upgrading
The Company consolidated the DSTE strategic planning process to enhance its strategic planning
capability, and reformed its IPD, enabling the full functioning of process-oriented organization, releasing
its organization manual and other related supporting mechanisms. The Company also reformed its LTC to
establish an LTC process structure, redefined its business opportunity types, established and piloted its
sales/delivery project operation mechanism, and defined and designed a sales performance review,
decision-making and authorization mechanism for improved decision-making efficiency. It upgraded its
HR system, reconstructed its job position system, established initial professional, expert and management
position requirements, completed the first round of job qualification authentication, and implemented its
long-term incentives policy.
3. Organizational growth
The Company increased its talent recruitment and financial budgetary control efforts, with an
emphasis on information, gradually upgrading and putting its internal HR platform, operations and R&D
platforms online. The Company continued to work on business risk management, establishing a sound
COVID-19 prevention and response mechanism to prudently combat the pandemic.
II. INDUSTRY DEVELOPMENTS DURING THE REPORTING PERIOD
1. Financial industry. The Company mainly serves various financial institutions; thus conditions in
customers’ industry indirectly affect its business activities. Taking brokerages and funds, the Company’s
main customer groups, as examples, industry association data indicates that securities companies’ total
revenue in 2021 was RMB502.41 billion, representing a year-on-year increase of approximately 12.03%,
and that their net profit was RMB191.119 billion, representing a year-on-year increase of approximately
21.32%:
(Source: Securities Association of China)
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As of the end of 2021, publicly offered funds managed by fund management companies totaled
approximately RMB25.56 trillion, representing a year-on-year increase of approximately 28.51%; private
equity funds under management totaled approximately RMB19.76 trillion, representing a year-on-year
increase of approximately 16.51%:
(Source: Asset Management Association of China)
Based on the performance of the securities and fund industries described above, the overall
development of the financial industry in 2021 was solid, with financial institutions’ overall revenue and
profits continuing to grow steadily, creating some positive impact on the Company’s normal operations.
2. Financial market reform and regulation. In 2021, capital market reforms continued to expand and
further improve. In terms of institutional reform, the Central Economic Work Conference stressed the need
to implement pilot comprehensive reform of market-based allocation of factors of production and full
implementation of a registration system for stock issuance. The further advancement of the multi-level
market will provide more impetus to innovation-driven transformation for economic development.
In terms of financial infrastructure, the merger of the Shenzhen Stock Exchange’s main-board and
second-board market has solved problems relating to homogeneous markets. The start of trading at the
Beijing Stock Exchange was a success, and it now offers an ideal platform for serving innovative small and
medium-sized enterprises, resolving the financing difficulties of these specialized, excellent, unique and
innovative enterprises in a targeted manner.
In terms of innovative financial products, the first batch of nine infrastructure public REITs was
officially listed and traded on the Shanghai and Shenzhen exchanges, marking an important milestone in
the piloting process of public Chinese infrastructure REITs. Since then, the piloting of public REITs has
continued to accelerate, and on July 2, the National Development and Reform Commission issued the
Notice on Further Improving the Pilot of Real Estate Investment Trusts (REITs) in the Infrastructure Sector,
which extended the pilot to nationwide scope. The official implementation of "Wealth Management
Connect" in the Guangdong-Hong Kong-Macao Greater Bay Area also represented innovation in personal
investment business and further expanded overseas use of the RMB, promoting the in-depth development
of RMB internationalization. With the continued innovation and transformation of wealth management
business models and new highs in the scale of public fund management, public fund investment advisory
business underwent rapid development, with a total of 60 pilot institutions obtaining approval for fund
investment advisory pilots. At the same time, the industry's basic system was also gradually improved, and
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guidelines on fund investment advisory business clarifying responsibilities within that business, were
issued for consultation.
As the liberalization of foreign investment continued, approval to enter the Chinese market was
granted to wholly foreign-owned brokers and public funds, with many additional international investment
banks and capital management giants in the process of applying for the relevant licenses. Although their
entry into China's financial market may challenge local financial companies in the short term, their
corporate governance and assessment mechanisms will, in the long run, positively influence the
optimization of local Chinese financial companies, promoting a bigger, better and stronger Chinese fund
industry.
In terms of financial market reform and regulatory measures, FinTech provides support for businesses’
efficient and orderly development, and also plays a positive role in the Company’s daily operations.
In terms of financial security, the NDRC launched the "Demonstration Project for the Secure and
Controllable Application of Critical Information Infrastructure" in 2019, with a focus on actively and
steadily promoting the specific effects of critical information infrastructure innovation in the financial
sector. In 2020, the Proposals of the Central Committee of the Communist Party of China on Formulating
the Fourteenth Five-Year Plan for National Economic and Social Development and the Long-term Goals
for 2035 proposed the "promotion of infrastructure development in an integrated manner" and the
"guaranteeing of national economic security, and strengthening of early warning, prevention and control
mechanisms, with capacity building to cope with economic security risks, to make key areas such as
important industries, infrastructure, strategic resources and major science & technology secure and
controllable", thus strongly promoting the IT application innovation strategy.
The IT application innovation industry is the technological foundation of national information security.
By end-2021, Hundsun had evaluated over 30 business systems (such as UF3.0, TA system, investment
transaction systems, fund operations systems, and custodian and valuation systems) to evaluate whether
such systems were suitable for ICT application, with over 20 business systems still undergoing this process.
3. Landscape of technological development and industrial competition. In recent years, the digital
transformation of the financial industry has continued to accelerate, most especially the data-centric
technology changes driving innovation and transformation in financial products and services. Fully
releasing data’s potential will be the key determining factor in the industry’s high-quality development.
"Capitalizing on data, utilizing assets and applying intelligence" sums up Hundsun's logic concerning the
evolution of data intelligence. To achieve the goals of digitally-intelligent capital and digitally-intelligent
wealth management, the industry requires enterprise-grade cloud-native big data platforms, agile data
architecture, more diverse data, high-performance databases, and, more importantly, innovative alternative
data acquired via data asset ecology. AI is moving rapidly from perceptual intelligence to cognitive
intelligence and deep integration with financial services, empowering capital management, customer
service, marketing, operations, risk control and many other areas. In the era of digital intelligence, the
challenge of artificial intelligence lies in the convergence and integration of technologies, the deepening
and broadening of application scenarios, and the implementation and promotion of engineering.
In terms of the industry landscape, as the digital transformation of financial institutions accelerates,
FinTech companies have increased investment and competition in the market, leading to further
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intensification of industrial competition in niche business areas. Financial institutions’ increasing demand
for customer-specific differentiated services and autonomous control has in recent years led to their
increasing investment in FinTech. With its business experiencing new hotspots, such as data and
intelligence business, FICC business, core insurance business and international business, the Company will
leverage its strengths to continue growth in such new areas.
III. BUSINESS DEVELOPMENT DURING THE REPORTING PERIOD
A leading provider of FinTech products and services in China, and therefore focused on the financial
industry, the Company mainly serves customers from sectors including securities, futures, public offerings,
trusts, insurance, private equity, banking, industry, stock exchanges and emerging industries, providing
one-stop FinTech solutions. Against the background of financial digital transformation and upgrading, the
Company has undergone a gradual deepening from process digitization to business digitization,
continuously exploring the intelligent application of FinTech using advanced technologies such as
cloud-native, high performance, big data, artificial intelligence and blockchain to empower financial
institutions to better manage assets and serve their customers, and assist its customers to realize financial
digital transformation and upgrading.
Based on type of product or service, the Company categorizes its principal business activities into the
following six business segments: big retail IT, big asset management IT, banking and industrial IT, data
risk and infrastructure IT, Internet innovation, and non-financial.
Big Retail IT Business
Big retail IT business consists mainly of IT business with securities brokerages and wealth managers.
The securities brokerage IT business mainly serves customers from the brokerage business segment, and its
main core product is centralized trading systems, mainly configured to provide account management,
capital clearing and settlement, commission order management, and access (interaction with exchanges,
CSDC, etc.) services. The wealth management IT business mainly serves customers from the marketing,
sales and customer service business segments of all kinds of wealth management institutions, including
banks, securities firms and third parties, and various asset management institutions such as funds, trusts and
insurance asset managers, as well as banks’ and brokers’ custody and outsourcing business segments. Its
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main core products are registration & transfer, asset allocation, product management, and wealth
management sales & marketing systems, which are mainly configured to provide product registration &
release, wealth planning proposals, financial product management, wealth management sales transactions,
investment advisory business operations, customer marketing/service and investor services.
In the securities brokerage business, the Company has put UF3.0, its next-generation comprehensive
securities financial services platform, into full-service operation, continuously developed and implemented
its distributed cloud-native architecture in IT application innovation, and achieved in-depth cooperation on
this architecture with seven securities brokers including Huatai Securities, Founder Securities and Industrial
Securities. New business with Beijing Stock Exchange and integrated account optimization also provided
retail managers with ample service opportunities and revenues.
In wealth management, the Company seized the opportunity offered by the rapid development of
investment advisory business for public offerings, adding over 50 partners in the investment advisory
business in 2021, with a winning bid ratio of approximately 85% for asset allocation systems, and 11 new
customers for its next-generation Huiying marketing service platform. In traditional business, the Company
contracted with 40 new partners via the new-generation TA, 38 new partners via the financial sales system
and 21 new partners through the CRM and call center, also cooperating with Credit Suisse Securities via
the app. In the trust industry, the Company contracted to jointly develop integrated wealth management
solutions with new high-quality customers including HKR International Kunlun Trust and China Railway
Trust, and to jointly develop family trust solutions with new high-quality customers including CCB Trust,
Shandong International Trust and Bank of China.
Big Asset Management IT Business
Big asset management IT business mainly consists of asset management IT business and institutional
service IT business. The asset management IT business mainly serves customers from investment research,
investment trading, risk management and other related business segments of securities, funds, insurance,
banks, trusts and other asset management institutions; its main core products are investment
decision-making systems, investment trading management systems, valuation & accounting systems, and
asset management operation systems, which are mainly configured to assist institutions in building a sound
investment research process and fund managers in making investment decisions, to provide a trading
platform for traders and to support the operation of middle and back-end platforms. The institutional
service IT business mainly serves customers from brokers‘ institutional business segment; its main core
products are institutional service-related business systems, which are mainly configured to support brokers’
provision of trading of investments, compliance and risk control, low-latency trading, agency trading,
strategy algorithms, custody and outsourcing, integrated private equity operations, research services,
individualized support and other related services to their institutional customers at home and abroad.
In 2021, with the continuous opening-up of financial markets, the continuous increase and
improvement of infrastructure and continuous innovation in financial business in China, a series of policies,
such as the approval of a new fund-raising management institution, the establishment of the Beijing Stock
Exchange, the interconnection of bond markets, the launch of the new bond platform of the Shanghai and
Shenzhen Stock Exchanges, the participation of insurance funds in securities lending, and changes in the
settlement mode of securities brokers, were successively introduced, creating many market opportunities
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for the Company's asset management business segment. In addition, Hundsun's next generation system also
achieved phased results. Outside the trust industry and bank financing sub-industry, the Company officially
launched its asset management product O45 to the first customer in the fund industry, cooperated with
many customers from securities firms, banks, trusts and funds on Valuation 6.0, also launching additional
products at the same time.
As the institutionalization of customers accelerates, by integrating new business cooperation scenarios
such as income swaps, low-latency trading and algorithm policies, the i2 integrated institutional service
platform solution provides strong support for various sell-side institutions operation of institutional service
business, while enhancing their single product market coverage. In the field of algorithmic trading
especially, businesses were linked by the core component PB system, Genus-Finance's algorithmic services
and Cloudbroker Network, forming a service ecology for private equity and HNW customers.
Data Risk and Infrastructure IT Business
The data risk and infrastructure IT business line mainly serves customers from the risk management
and compliance business segments of various financial institutions, local exchanges, etc.. Its main core
products are compliance management products, which are mainly configured to provide risk monitoring,
compliance reporting, process management, information reporting management, and anti-money
laundering services.
The data risk and infrastructure IT business exhibited generally sound development trends. ① Data
services and traditional business grew solidly, with expansion and deepening of underlying data, and the
application of special data via linkages. Rapid accumulation and coverage of macro industry database EDB
data, together with financial management data, speeded up the self-construction of models for industrial
chains and fund valuations, and with increased investments in the construction of public opinion,
law-breaking, judicial and trust modules, the in-depth self-construction and integration of models continues
to improve, further enhancing the Company's financial industry market share. ② Data middle platform
business: HDP, the integrated data platform system, has significantly improved the efficiency of data asset
system construction, and acquired 23 new financial industry customers in 2021. The number of customers
for products such as regulatory data reporting, risk data warehouses and the new data center increased,
notably alongside a significant increase in regulatory data reporting market share. ③ Risk compliance
management: products maintained continuous growth with the influence of the anti-money laundering
business further expanding. ④ In terms of financial infrastructure, in 2021, the Company officially put
the National Carbon Emission Registration and Trading System it had constructed into operation in the
national carbon market, and won the bid for construction of a National Voluntary Greenhouse Gas
Emission Reduction Trading System, thus establishing a leading position in the carbon market. In local
financial supervision, the Company expanded its digital supervision of local financial business, laying the
foundation for future large-scale promotion. ⑤ In terms of new business and new products: (1) the
Company further improved its research and investment AI product line through increasing its shareholding
in Dworld AI, acquiring 12 new customers; (2) Zhejiang Xunchang Wendao Network Technology Co.,
Ltd., a joint venture with Tianfeng Securities Co., Ltd., was set up to operate new content businesses such
as wealth management short video and live streaming.
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Banking and Industrial IT Business
The banking and industrial IT business, consisting mainly of banking IT business together with
industrial and supply chain finance IT business, mainly serves customers from the corporate business and
technology departments of commercial banks, finance companies and various industrial customers (such as
medium and large-sized manufacturers, trading enterprises, and e-commerce platforms). Its main core
products are cash management platforms and bill business products, mainly configured to provide cash
management, enterprise treasury management and bill transaction management services.
In 2021, the banking and industrial IT business line released the C9 business finance product brand.
The configuration of technology and business middle platforms mainly serving joint-stock and urban
commercial banks became more reasonable and improvements in the middle platform strategy continued.
The Company further enhanced its financial integration program and increased its cooperation with
joint-stock and major urban commercial banks, with over ten newly acquired cooperative customers
increasing its cash management and bill businesses, and the maturity of its industrial and financial
integration program increasing.
Internet Innovation Business and Significant Subsidiaries
The Internet innovation business mainly serves customers from funds, securities firms, trusts, futures
brokers, insurers, emerging and offshore financial institutions, etc.. Its main core products are one-stop
cloud service solutions, and IaaS+PaaS+SaaS layer cloud computing services, which are configured to
provide cloud-based investment trading, valuation, custody & clearing, investment supervision, information
disclosure, performance evaluation & risk management, algorithmic trading, and other, services.
Gildata. In 2021, Gildata continued to strengthen and expand its foundational data, comprehensively
improving its investment research and risk data, and actively explored and implemented its digital
intelligence application capabilities in order to achieve continuing growth in its data services (which
remained positive) and organic development of end products (making breakthroughs). In terms of
investment research, Gildata improved its terminal emphasizing key areas, made decisive efforts in AI for
research and investment, and took its national-level financial information service terminal project through
acceptance testing to successfully delivery. In terms of wealth management, innovation in and iterative
upgrading of AI Xiaofan’s digital intelligence components continued, permitting rapid contract growth. In
terms of capital management and risk control, Smart Eye products "took root and blossomed", steadily
opening up the market.
Hundsun Ayers. In 2021, Hundsun Ayers continued to maintain its leading position in Hong Kong,
acquiring 18 new retail product line customers and exceeding HK$200 million in revenues. With its
next-generation securities trading and clearing system with UF3.0 system design and architectural
underpinning, Hundsun Ayers had made positive progress in the Hong Kong market, contracting with eight
customers in a single year. Hundsun Ayers was also active in the prime brokerage and buy-side businesses,
and developed new products such as PB/ESOP.
Jingteng Network. In 2021, Jingteng Network transformed itself from a traditional "software system
construction developer" into a "business solution provider". Maintaining stability in its original businesses,
the company continued to focus on terminal construction, providing terminal product services such as
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APP/PC/Web/Html5/applets, product tool services such as cloud components/conditional orders/account
analysis, and wealth management services such as investment advisory/wealth management malls, thus
achieving contract growth and market development in terms of new customers for all business segments.
Jingteng Network made a breakthrough in its innovation business, helping brokers provide targeted
customer and business operations services based on its “terminal construction to data enrichment” market
strategy, and by providing integrated intelligent operation services. By further serving investors and helping
employees in business development from brokers’ perspective, adoption of a new BPO business model
permitted the production of new business capabilities.
Cloudyee Network. In 2021, Cloudyee Network enhanced its core competitiveness by adhering to its
quality-first policy, planning and implementing one-stop wealth management solutions, and developing a
new generation of popular core products and services. Operationally, the scale of SAAS services and asset
management revenues maintained solid growth, exceeding the same period in the previous year, market
coverage continued to expand, customers' operational capacity improved, and regular customers' output and
renewal rates reached new highs. In terms of solutions, progress in the planning of a one-stop wealth
management service business coverage and technology platform went well. Existing products’ architecture
was upgraded, and the overall quality of products/services was improved. In new products and services,
promotion of Institutional Trading System/Easy Connect products covering new industries proceeded
smoothly. The preliminary verification of AMS integration and operation was completed.
Hundsun iBontal. In the first quarter of 2021, Hundsun Technologies acquired Hundsun iBontal, a
provider of end-to-end IT services for insurance industry solutions. After a year of integration and
development, the company was progressing rapidly. In terms of product research and development,
Hundsun iBontal completed the transfer of its property and casualty insurance system core technical
framework onto Hundsun's LIGHT platform. The functions of the core non-vehicle insurance system were
upgraded iteratively, with third-party testing showing that its quality had reached an industry-leading level.
Hundsun iBontal strengthened its life insurance solutions, winning the contract for King Dragon Life’s core
project. In terms of capital operations, Hundsun iBontal successfully contracted with Trust Mutual Life, its
first strategic investor.
IV. ANALYSIS OF CORE COMPETITIVENESS DURING THE REPORTING PERIOD
√Applicable □Not Applicable
Leading product technology. The goal of the Company is to become a leading one-stop solution
provider involved in the development and implementation of industry technical standards and quality
standards. At present, the Company’s products are industry-leading in terms of technology. The Company’s
core trading system for the securities industry, investment management system for buy side industries such
as funds, comprehensive wealth management system for banking, and TA system for relevant fields are all
highly regarded by customers. These advantages allow the Company to benefit to some degree from
economies of scale, improving marginal returns. At the same time, the Company is also continuously
expanding its new areas of business, such as in bond market issuance networks and core insurance systems,
via mergers and acquisitions and the establishment of joint ventures, and is improving its data business,
with the aim of gaining a technological lead in those new businesses within a short period. In recent years,
the Company has been rapidly catching up with the leading international FinTech giants, narrowing their
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2021 Annual Report
lead to rank 38 in the IDC Fintech Rankings 2021, with an overall upward trend in its ranking.
th
Strong brand influence. The FinTech industry imposes exacting technical requirements. Compared
with industry entrants, the Company has over 20 years of experience as a going concern, during which it
gained knowledge of customers’ businesses and accumulated capabilities in providing them with
comprehensive services, making its products highly regarded amongst customers. Moreover, financial
institutions’ need for stable, safe, long-term and high-quality services, also implies that customers tend to
prefer the products and services of industry-leading technology companies.
Outstanding ability in innovation. The Company continuously recruits the industry’s top talents and
has built complete R&D and product systems and teams. At present, the Company has 899 employees with
a master’s degree or above (including doctoral degrees). In 2021, the Company invested a total of
RMB2.139 billion in R&D, accounting for 38.92% of its revenue, making it an industry-leading enterprise
in terms of R&D expenditure.
V. MAJOR OPERATIONAL PARTICULARS DURING THE REPORTING PERIOD
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During the Reporting Period, the Company recorded revenue of RMB5,496,578,624.88, representing
an increase of 31.73% year-on-year. Its net profit attributable to shareholders amounted to
RMB1,463,538,930.14, representing an increase of 10.73% year-on-year.
(I) Analysis of principal businesses
1. Analysis on Changes of Relevant Items in Statement of Profit or Loss and Statement of Cash
Flows
Unit: Yuan Currency: RMB
During the corresponding period
Item During the period Change (%)
last year
Revenue 5,496,578,624.88 4,172,645,156.56 31.73
Cost of sales 1,484,602,486.66 955,906,825.10 55.31
Selling and distribution expenses 557,934,967.43 353,806,789.89 57.69
General and administrative expenses 681,453,467.57 539,490,612.30 26.31
Finance costs -906,045.34 -6,942,521.87 N/A
R&D expenses 2,139,296,366.07 1,496,058,838.32 43.00
Net cash flows from operating
956,789,306.14 1,397,902,270.41 -31.56
activities
Net cash flows from operating
-423,425,969.13 -791,305,394.02 N/A
activities
Net cash flows from financing
-174,082,923.91 -550,797,168.68 N/A
activities
The change in the revenue is mainly due to the growth of the Company's business during the period.
The change in the cost of sales is mainly due to the increase in the Company's business and labor costs.
The change in selling and distribution expenses is mainly due to the increase in employees and their
remuneration during the period.
The change in general and administrative expenses is mainly due to the increase in employees'
remuneration during the period.
The change in finance costs is mainly due to the increase in exchange loss and interest expense during the
period compared with the same period last year.
The change in R&D expenses is mainly due to the increase in employees and their remuneration during the
period.
The change in net cash flows from operating activities is mainly due to the significant increase in the
remuneration paid to employees during the period compared with the same period last year.
The change in net cash flows from investing activities is mainly due to the decrease in cash paid by the
Company for investment during the period compared with the same period last year.
The change in net cash flows from financing activities is mainly due to the increase in bank loans obtained
by the Company during the period.
Detailed explanation of major changes in the Company's business type, profit composition or profit source
during the period
□Applicable √Not Applicable
2. Analysis on revenue and costs
√Applicable □Not Applicable
See below for details
(1). Performance of principal businesses by segment, by product, by region and by sales model
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2021 Annual Report
Unit: Yuan Currency: RMB
Principal Businesses by Segment
Increase/
Increase/decre
decrease in Increase/ decrease in
Gross profit ase in revenue
By segment Revenue Cost of sales the cost of the gross profit margin
margin (%) from last year
sales from last from last year (%)
(%)
year (%)
Big retail IT
2,111,138,786.79 642,111,363.26 69.58 39.79 75.58 Decreased by 6.20%
business
Big asset
management IT 1,706,117,915.25 304,358,188.06 82.16 39.84 78.12 Decreased by 3.84%
business
Data risk and
infrastructure IT 353,668,302.36 151,359,671.52 57.20 18.59 60.11 Decreased by 11.10%
business
Banking and
industrial IT 353,719,292.45 181,466,873.42 48.70 -2.54 12.67 Decreased by 6.92%
business
Internet innovation
803,916,108.12 160,308,152.43 80.06 33.69 45.56 Decrease by 1.62%
business
Non-financial 163,451,862.47 44,469,792.58 72.79 -6.47 -16.36 Increased by 3.21%
business
Total 5,492,012,267.44 1,484,074,041. 72.98 31.78 55.32 Decreased by 4.09%
27
Principal Businesses by Product
Increase/decre Increase/decre
Increase/decrease in
Gross profit ase in revenue ase in the cost
By product Revenue Cost of sales the gross profit margin
margin (%) from last year of sales from
from last year (%)
(%) last year (%)
Revenue from 5,408,195,325.14 1,420,423,285.41 73.74 32.14 59.98 Decreased by 4.57%
software
Revenue from 66,608,294.30 60,291,366.47 9.48 2.81 -0.67 Increased by 3.16%
hardware
Revenue from 17,208,648.00 3,359,389.39 80.48 72.87 -51.31 Increased by 49.79%
science park
Total 5,492,012,267.44 1,484,074,041.27 72.98 31.78 55.32 Decreased by 4.09%
Principal Businesses by Region
Increase/decre Increase/decre
Increase/decrease in
Gross profit ase in revenue ase in the cost
By region Revenue Cost of sales the gross profit margin
margin (%) from last year of sales from
from last year (%)
(%) last year (%)
Mainland China 5,268,862,680.55 1,440,685,304.55 72.66 33.40 58.89 Decreased by 4.38%
Overseas 223,149,586.89 43,388,736.72 80.56 2.37 -10.97 Increased by 2.92%
Total 5,492,012,267.44 1,484,074,041.27 72.98 31.78 55.32 Decreased by 4.09%
Explanation on the performance of principal businesses by segment, by product, by region and by sales
model
See Section "Business Development during the Reporting Period" for details.
(2). Analysis Statement of Production and Sales Volume
□Applicable √Not Applicable
(3). Performance of Major Procurement Contracts and Sales Contracts
□Applicable √Not Applicable
(4). Statement of Cost Analysis
Unit: Yuan
Cost by Segment
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2021 Annual Report
Change in
Proportio
the amount
n of Proportion
for the
amount of amount
Amount for the current
Cost Amount for the for the for the same
By segment same period last period Description
components current period current period last
year compared
period in year in total
with the
total cost cost (%)
same period
(%)
last year (%)
Mainly due to
the increase in
the cost of labor
for business
Big retail IT
Cost of sales 642,111,363.26 43.26 365,705,114.18 38.28 75.58 growth and the
business
growth of
newly acquired
businesses in
2021.
Mainly due to
the increase in
the cost of labor
Big asset for business
management Cost of sales 304,358,188.06 20.51 170,867,764.37 17.88 78.12 growth and the
IT business growth of
newly acquired
businesses in
2021.
Mainly due to
Data risk and the increase in
infrastructure Cost of sales 151,359,671.52 10.20 94,536,256.19 9.89 60.11 the cost of labor
IT business for business
growth.
Banking and
industrial IT Cost of sales 181,466,873.42 12.23 161,062,185.98 16.86 12.67
business
Mainly due to
Internet the increase in
innovation Cost of sales 160,308,152.43 10.80 110,132,936.64 11.53 45.56 the cost of labor
business for business
growth.
Non-financial
Cost of sales 44,469,792.58 3.00 53,164,919.31 5.56 -16.36
business
Total 1,484,074,041.27 100.00 955,469,176.67 100.00 55.32
Cost by Product
Change in
Proportio
the amount
n of Proportion
for the
amount of amount
Amount for the current
Cost Amount for the for the for the same
By product same period last period Description
components current period current period last
year compared
period in year in total
with the
total cost cost (%)
same period
(%)
last year (%)
Mainly due to
the increase in
the cost of labor
for business
Revenue from
Cost of sales 1,420,423,285.41 95.71 887,872,191.31 92.93 59.98 growth and the
software
growth of
newly acquired
businesses in
2021.
Revenue from
Cost of sales 60,291,366.47 4.06 60,697,191.12 6.35 -0.67
hardware
Revenue from Mainly due to
Cost of sales 3,359,389.39 0.23 6,899,794.24 0.72 -51.31
science park the decrease in
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2021 Annual Report
the cost of sales
as a result of the
decrease in
revenue from
the science park
rental business.
Total 1,484,074,041.27 100.00 955,469,176.67 100.00 55.32
(5). Changes in the Scope of Consolidation due to Changes in the Shareholdings of Major
Subsidiaries during the Reporting Period
□Applicable √Not Applicable
(6). Major Changes or Adjustments in the Company's Business, Products or Services during the
Reporting Period
□Applicable √Not Applicable
(7). Key Customers and Key Suppliers
A. Key Customers of the Company
Sales to the Company's top five customers amounted to RMB248,922,600, accounting for 4.53% of the
total sales in the year. Among the sales to the top five customers, the sales to their affiliates amounted to
RMB0, accounting for 0% of the total sales in the year
During the Reporting Period, there were cases in which sales to a single customer exceed 50% of the total,
there are new customers among the top five customers, or the Company is heavily dependent on a few
customers
□Applicable √Not Applicable
B. Key Suppliers of the Company
Purchases from the Company's top five suppliers amounted to RMB 201,782,400, accounting for 21.83%
of the total purchases in the year. Among the purchases to the top five customers, the purchases to their
affiliates amounted to RMB40,892,500, accounting for 4.42% of the total purchases in the year
During the Reporting Period, there were cases in which purchases to a single supplier exceed 50% of the
total, there are new suppliers among the top five suppliers, or the Company is heavily dependent on a few
suppliers
□Applicable √Not Applicable
3. Expense
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
During the
Item During the period corresponding Change (%) Reasons for change
period last year
Selling and distribution Mainly due to the increase in employees
557,934,967.43 353,806,789.89 57.69
expenses and their remuneration during the period
General and Mainly due to the increase in employees
681,453,467.57 539,490,612.30 26.31
administrative expenses and their remuneration during the period
Mainly due to the increase in employees
R&D expenses 1,496,058,838.32 43.00
2,139,296,366.07 and their remuneration during the period
Mainly due to the increase in exchange
loss and interest expense during the
Finance costs -906,045.34 -6,942,521.87 N/A
period compared with the same period
last year.
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2021 Annual Report
4. R&D Investment
(1). Statement of R&D Investment
√Applicable □Not Applicable
Unit: Yuan
Expensed R&D investment for the current period 2,139,296,366.07
Capitalized R&D investment for the current period 0
Total R&D investment 2,139,296,366.07
Proportion of total R&D investment in revenue (%) 38.92
Proportion of capitalized R&D investment in total 0
R&D investment (%)
(2). R&D Personnel
√Applicable □Not Applicable
Number of R&D personnel 6,065
Proportion of the number of R&D personnel in the headcount (%) 45.6
Educational Level of R&D Personnel
Educational level Number
Doctor's Degree 8
Master's Degree 891
Bachelor's Degree 4,922
Junior college 238
High school or below 6
Age Composition of R&D Personnel
Age composition Number
Under the age of 30 (excluding 30) 3,490
Age 30-40 (including 30 and excluding 40) 2,383
Age 40-50 (including 40 and excluding 50) 186
Age 50-60 (including 50 and excluding 60) 5
Age 60 or above 1
(3). Description
√Applicable □Not Applicable
The Company continuously recruits top talents in the industry and has built various sound systems and
dedicated teams for research and development as well as its products. In 2021, the Company invested a
total of RMB2.139 billion in R&D, accounting for 38.92% of revenue. The Company is a top-ranked
enterprise in terms of R&D expenses.
(4). Reasons for Significant Changes in the Composition of R&D Personnel and Impact on the
Company's Future Development
□Applicable √Not Applicable
5. Cash Flow
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
During the
Items in the statement of cash
During the period corresponding Change (%) Reasons for change
flows
period last year
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2021 Annual Report
Mainly due to the increase in cash
received from sales of goods and
Sub-total of cash inflows from
6,193,014,080.29 5,350,358,436.16 15.75 provision of services during the
operating activities
period compared to the same period
last year.
Mainly due to the increase in
employees and their remuneration
Sub-total of cash outflows for and the increase in the purchase of
5,236,224,774.15 3,952,456,165.75 32.48
operating activities goods and receipt of services during
the period compared to the same
period last year.
Mainly due to the fact that the
increase in cash inflows from
Net cash flows from operating
956,789,306.14 1,397,902,270.41 -31.56 operating activities was less than that
activities
in cash outflows for operating
activities during the period.
Mainly due to the decrease in
Sub-total of cash inflows from investment returns during the period
5,762,984,326.05 6,211,972,149.70 -7.23
investing activities compared to the same period last
year.
Mainly due to the decrease in cash
Sub-total of cash outflows for paid for investments during the
6,186,410,295.18 7,003,277,543.72 -11.66
investing activities period compared to the same period
last year.
Net cash flows from operating
-423,425,969.13 -791,305,394.02 N/A
activities
Mainly due to the increase in bank
Sub-total of cash inflows from
1,923,543,622.44 523,466,670.28 267.46 loans during the period compared to
financing activities
the same period last year.
Mainly due to the share repurchase
and the increase in bank loan
Sub-total of cash outflows for
2,097,626,546.35 1,074,263,838.96 95.26 repayment during the period
financing activities
compared to the same period last
year.
Net cash flows from financing
-174,082,923.91 -550,797,168.68 N/A
activities
Mainly due to the decrease in net
cash outflows for investing activities
Net increase in cash and cash
353,405,536.94 52,096,797.72 578.36 and financing activities during the
equivalents
period compared to the same period
last year.
(II) Significant Changes in the Profit from Non-Principal Business
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
During the
Item During the period corresponding Change (%) Description
period last year
Mainly due to the significant
Gain from changes in changes in the fair value of the
414,401,157.02 103,091,491.83 301.97
fair value Company’s financial assets at fair
value during the period.
Mainly due to the increase in gains
generated from the disposal of the
Investment income 275,837,269.79 584,205,393.33 -52.78
Company’s subsidiary, Luofeng
Network.
(III) Analysis of Assets and Liabilities
√Applicable □Not Applicable
1. Assets and Liabilities
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Unit: Yuan
Proportion of Proportion of
amount at the amount at the
Amount at the Amount at the
end of the end of the Year-on-year
Item end of the end of the Description
current period previous change (%)
current period previous period
in total assets period in total
(%) assets (%)
Cash and bank No significant
1,727,704,846.60 14.30 1,374,842,591.24 13.79 25.67
balances changes
Held-for-trading No significant
1,991,523,094.74 16.49 2,723,350,172.04 27.31 -26.87
financial assets changes
Mainly due to the
growth of the
Company's
business and the
increase in
accounts
Accounts receivable 762,916,207.50 6.32 523,273,534.51 5.25 45.80
receivable from
subsidiaries newly
included in the
scope of
consolidation
during the period.
Mainly due to the
increase in
executory costs as
a result of the
Inventories 466,992,190.19 3.87 351,690,935.90 3.53 32.78
increase in
employees and
their remuneration
during the period.
Other debt No significant
65,681,018.23 0.54 83,845,382.74 0.84 -21.66
investments changes
Mainly due to the
Company's
investment in
Nanjing Pengxi
and its subsidiary
Long-term equity
1,110,946,777.17 9.20 738,974,733.43 7.41 50.34 Hundsun Holdings
investments
Limited's
investment in
N2N CONNECT
BERHAD during
the period.
Mainly due to the
increase in
non-current
Other non-current
2,981,720,276.86 24.68 2,229,463,162.16 22.36 33.74 financial assets
financial assets
purchased by the
Company during
the period.
Investment No significant
127,524,968.93 1.06 111,411,248.79 1.12 14.46
properties changes
Mainly due to the
transfer of the
Fixed assets 1,679,515,491.95 13.90 472,506,719.88 4.74 255.45 Hundsun Cloud
Production Base
to fixed assets.
Mainly due to the
transfer of the
Construction in
26,357,513.90 0.22 732,254,664.28 7.34 -96.40 Hundsun Cloud
progress
Production Base
to fixed assets.
Mainly due to the
Right-of-use assets 32,023,105.44 0.27 N/A
implementation of
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2021 Annual Report
the new leasing
standards during
the period.
Mainly due to the
purchase of
Intangible assets 376,460,020.43 3.12 161,012,651.89 1.61 133.81 intangible assets
from abroad
during the period.
No significant
Goodwill 367,492,126.98 3.04 312,158,890.50 3.13 17.73
changes
Mainly due to the
inconsistency
between the
Deferred income tax
163,436,491.51 1.35 71,410,701.28 0.72 128.87 Corporate Income
assets
Tax Law and the
new income
standards.
Mainly due to the
payment of
Summit software
Other non-current
112,816,169.61 0.93 441,999.00 0.00 25,424.08 to Finastra by the
assets
subsidiary,
Cloudwing
Network.
Mainly due to the
increase in
Short-term
178,028,314.11 1.47 46,718,265.90 0.47 281.07 borrowings from
borrowings
banks during the
period.
Mainly due to the
increase in the
payment to
suppliers for
"Hundsun Cloud
Accounts payable 503,758,715.18 4.17 192,172,938.77 1.93 162.14
Production Base"
during the period
compared with the
end of the
previous year.
No significant
Contract liabilities 3,203,414,609.69 26.52 3,107,149,920.44 31.16 3.1
changes
Employee
No significant
compensation 774,996,501.71 6.42 647,448,189.72 6.49 19.70
changes
payable
No significant
Taxes payable 196,064,942.41 1.62 187,413,250.40 1.88 4.62
changes
Mainly due to the
pre-receipt of
equity disposal
Other payables 170,804,176.79 1.41 128,629,520.86 1.29 32.79 from the
subsidiary
Hangzhou Xinglu
during the period.
Mainly due to the
Current portion of current portion of
non-current 154,496,614.61 1.28 N/A long-term bank
liabilities borrowings during
the period.
Other current No significant
305,258,151.46 2.53 305,258,151.46 3.06 0
liabilities changes
Long-term No significant
228,454,065.70 1.89 206,090,358.06 2.07 10.85
borrowings changes
Mainly due to the
Deferred income tax
68,201,491.05 0.56 42,478,589.07 0.43 60.55 significant
liabilities
changes in the fair
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2021 Annual Report
value of the
Company’s
financial assets at
fair value during
the period.
2. Overseas Assets
√Applicable □Not Applicable
(1) Asset scale
Including: overseas assets were 822,731,972.19 (Unit: Yuan Currency: RMB), accounting for 6.82% of the
total assets.
Proportion
Whether
Control of
there is
Operation measures to overseas
Item Reason Asset scale Location Revenue significant
pattern safeguard assets in
impairment
asset security total
risk
assets (%)
Corporate
governance,
financial
Established
Japan Hundsun Autonomous management,
by the 43,087,407.06 Japan 635,919.61 0.36 N
Software Inc. operation audit
Company
regulatory,
performance
assessment
Corporate
governance,
financial
Hundsun Established
Hong Autonomous management,
Holdings by the 726,627,786.49 54,093,813.83 6.02 N
Kong operation audit
Limited Company
regulatory,
performance
assessment
Corporate
governance,
Hundsun financial
Established
Intercontinental Hong Autonomous management,
by the 41,065,733.06 29,468.71 0.34 N
Holdings (HK) Kong operation audit
Company
Limited regulatory,
performance
assessment
Corporate
governance,
Hundsun IHS
financial
Markit China Established
Hong Autonomous management,
(Hong Kong) by the 1,059,893.93 -300,732.02 0.01 N
Kong operation audit
Technologies Company
regulatory,
Limited
performance
assessment
Corporate
governance,
Business
GenSys financial
combination
Technology Hong Autonomous management,
not under 10,891,151.65 -1,185,270.31 0.09 N
(International) Kong operation audit
common
Limited regulatory,
control
performance
assessment
(2) Notes to the High Proportion of Oversea Assets
□Applicable √Not Applicable
3. Restriction on Major Assets as at the End of the Reporting Period
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2021 Annual Report
√Applicable □Not Applicable
Unit: Yuan
Item Carrying amount at the end of the period Reason
Cash and bank balances 4,270,755.00 Guarantee deposit
Intangible assets 73,153,291.09 Pledged to secure bank borrowings
Construction in progress 25,139,995.40 Pledged to secure bank borrowings
Fixed assets 1,117,020,509.26 Pledged to secure bank borrowings
Other debt investments 65,681,018.23 Pledged to secure bank borrowings
Total 1,285,265,568.98
4. Other notes
□Applicable √Not Applicable
(IV) Analysis of the Industry Operation Information
√Applicable □Not Applicable
Please refer to Section "Discussion and Analysis on Business Operations" for details.
(V) Analysis of Investments
Overall Analysis of External Equity Investments
√Applicable □Not Applicable
Please refer to the "M&A and Investment" in Section "Discussion and Analysis on Business Operations"
for details.
1. Major equity investment
√Applicable □Not Applicable
Unit: 10,000 yuan Currency: RMB
Shareholding Investment
Lawsuit
Investment ratio at the end profit or loss
Investee Principal business Source of funds involved or
cost of the period during the
not
(%) period
Provide OTCBB and
N2N CONNECT marketing intelligence Self-owned
15,868.40 23.657 450.23 N
BERHAD services for brokers in capital
Southeast Asia
Nanjing Pengxi
Self-owned
Equity Investment Equity investment 12,000.00 40 -331.57 N
capital
Center (L.P.)
2. Major non-equity investment
□Applicable √Not Applicable
3. Financial assets at fair value
√Applicable □Not Applicable
Unit: 10,000 yuan Currency: RMB
Initial Purchase Disposal
Closing Closing Investment Changes in
Item investment during the during the
balance balance income fair value
cost Reporting Reporting
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2021 Annual Report
Period Period
Stocks 21,290 72,583 55,722 38,150 65,601 781 24,316
Funds 50,369 74,103 34,790 89,682 90,397 2,227 1,759
Trusts 257,578 232,173 380,608 109,142 146,945 6,629 15,813
Others 2,925 3,780 2,020 4,685 6,039 0 52
Financial 8,160 1,839 6,321 6,568 266
bonds
Debt 2,800 2,800 -318 -88
instruments
Financial 27,245 109,700 58,075 78,870 78,870 2,898
products
Equity 91,465 21,632 3,479 109,618 109,472 2,063
instruments
Total 461,831 513,970 539,333 436,469 503,892 14,546 41,852
4. Specific progress of major asset restructuring and integration during the Reporting Period
□Applicable √Not Applicable
(VI) Disposal of Major Assets and Equity
□Applicable √Not Applicable
(VII) Analysis of Major Companies Controlled and Invested in by the Company
√Applicable □Not Applicable
Unit: 10,000 yuan Currency: RMB
Nature of Registered
Full company name Total assets Net assets Revenue Net profit
business capital
Hangzhou Hundsun
Industrial
Cloud Investment 16,500.00 54,450.11 22,148.59 1,654.79 850.78
investment
Holding Co., Ltd.
Japan Hundsun Software
Software JPY 7,850.00 4,308.74 2,023.68 5,188.95 -213.63
Inc.
Hangzhou Cloudyee
Network Technology Software 10,000.00 23,563.53 16,408.33 14,207.26 6,005.21
Co., Ltd.
Hundsun Holdings Investment
HKD 10,000.00 72,662.78 58,123.72 17,160.17 5,428.01
Limited management
Hangzhou Cloudbroker
Network Technology Software 5,176.50 7,678.01 3,673.92 4,810.88 -235.75
Co., Ltd.
Hangzhou Cloudwing
Network Technology Software 46,606.11 39,736.41 33,436.92 2,929.41 -1,143.81
Co., Ltd.
Hangzhou Hundsun
Wengine Network Software 1,250.00 20,787.11 10,882.20 9,243.12 5,266.35
Technology Co., Ltd.
Hangzhou Xinglu Equity
Investment
Investment Partnership 24,100.00 10,560.04 6,413.87 -422.82
management
(L.P.)
Zhejiang Jingteng
Network Technology Software 5,428.58 11,927.40 6,131.88 11,791.57 148.23
Co., Ltd.
Wuxi Xinglu Tiancheng
Investment
Investment Management 30,100.00 2,402.51 2,402.51 -347.67
management
Partnership (L.P.)
Shanghai Gildata Inc Software 12,250.00 26,412.47 9,820.54 29,062.17 851.58
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2021 Annual Report
Nature of Registered
Full company name Total assets Net assets Revenue Net profit
business capital
Business Intelligence
Info. Tech. (Hangzhou) Software 2,793.58 7,849.76 3,263.74 7,463.35 65.44
Co., Ltd.
Shanghai Genus-Finance
Information Technology Software 2,122.03 9,353.74 6,717.23 5,158.58 484.22
Co., Ltd.
Nanjing Xingcheng
Investment
Equity Investment 30,300.00 29,532.77 29,532.77 -950.60
management
Partnership (L.P.)
Hundsun&IHS Markit
China Technologies Co., Software 7,000.00 5,453.09 5,271.40 21.28 -1,024.59
Ltd.
Hundsun iBontal
(Guangdong) Technology Software 8,000.00 8,980.72 6,516.42 8,092.43 -3,393.00
Co., Ltd.
Zhejiang Xunchang
Wendao Network
Software 5,000.00 4,201.32 3,606.21 440.16 -1,393.79
Information Technology
Co., Ltd.
Shanghai Dworld AI
Software 2,161.00 4,928.60 4,511.62 632.58 -366.30
Technology Co., Ltd.
Shenzhen Ricequant
Software 1,140.63 2,094.96 1,871.07 1,409.27 -863.17
Technology Co., Ltd.
Ant (Hangzhou) Funds
Finance 15,562.00 1,084,851.54 100,081.17 1,212,421.85 50,386.38
Sales Co., Ltd.
Shenzhen Trade Blazer
Software 3,546.97 15,098.27 14,322.46 3,393.84 1,732.86
Technology Co., Ltd.
Hundsun Cloud
Financing Network Software 6,870.00 10,780.29 4,319.27 11,461.61 -2,929.65
Technology Co., Ltd.
(VIII) Status of Structured Entity Controlled by the Company
□Applicable √Not Applicable
VI. DISCUSSION AND ANALYSIS OF THE COMPANY’S FUTURE DEVELOPMENT
(I) Industry pattern and trends
√Applicable □Not Applicable
In 2021, the Company continued to be suffered from the effects of the COVID-19 pandemic. In the
financial industry, efforts to combat the pandemic led to the rapid development of "non-contact" financial
services, with banks and other financial institutions attempting to provide users with services such as
account opening, transfer, repayment, investment and wealth management via various electronic channels.
The pandemic has thus become a long-term "driver" of the financial industry’s digital transformation,
which is spreading from products and channels to organizational transformation and the upgrading of IT
architecture.
FinTech has gone through three stages of development and is now moving into the digital era. The
first stage, during 2000-2010, was the application of electronics in finance, i.e., the application of
technological tools to replace manpower, mainly for handling transactions. Technology was mainly applied
in the form of databases and middleware, and the technical goal of the whole financial industry was the
provision of solutions support for back-office business systems.
The second stage was the application of Internet technology in finance, which mainly resolved
difficulties in information discovery through technology, focusing on delivery and links. These technical
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2021 Annual Report
capabilities and achievements were embodied in the mobile Internet, cloud computing and distributed
computing, with technology playing the role of business driver.
The third stage is the advent of financial digitalization. Technology can now replace mental work,
focusing mainly on data processing and content analysis, to make final business decisions, and more
attention is being paying to active push. The main technical capabilities and achievements of this stage lie
in big data, AI, information distribution & delivery, and data security, In this stage, the mutual
empowerment of technology and business is making achieving relevant goals via technology or business
alone difficult, with a spiraling process of technology and business integration more often suitable, i.e., the
process of financial digitalization.
1. Regulatory environment and trends
On January 4, 2022, the Central Bank issued the FinTech Development Plan (2022-2025), proposing
whole-process integration of digitalization into financial services, the adoption of digital thinking for all
stages of business operations and a focus on technology-driven, data-enabled financial innovation via
strengthened application of financial data, for the main purposes of deepening structural reform of the
financial supply side, accelerating the digital transformation of financial institutions, strengthening
prudential regulation of FinTech, and thus achieving a leap forward in the industry’s overall standards and
core competitiveness by 2025. The Plan aims to emphasize the digital transformation of financial
institutions and prudential regulation of FinTech, as well as the solution of problems such as FinTech’s
unbalanced and insufficient development, so as to promote a sound FinTech governance system and the
deeper integration and more sustainable development of finance and technology, improve digital
infrastructure, and better meet the new requirements and tasks presented by the era of the digital economy.
2. FinTech patterns and trends in financial institutions
A wide gap in technological investment between foreign and domestic financial institutions remains.
Taking the securities industry as an example, in 2020, the average IT investment of top 10 overseas
investment banks accounted for 6.6% of their revenue, while that of the top 10 domestic brokers accounted
for only 3.3%. In the same year, the IT investment of global commercial banks J.P. Morgan Chase and Citi
accounted for 8.6% and 9.8% of their revenue respectively, while that of the top six domestic banks
accounted for only 2.89% on average. As the domestic economy has developed, leading domestic financial
institutions have gradually caught up with overseas giants in revenue terms, but the wide gap in IT
investment remains. In the context of deepening financial reform and an increasingly open domestic
financial market, domestic financial institutions must continuously increase their FinTech investment in
order to compete with their foreign financial counterparts.
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2021 Annual Report
The market competition in FinTech has also become more intense, mainly in the following ways.
Leading financial institutions have continued to increase their investment in independent R&D, and to
export FinTech to the outside world. Leading FinTech companies have been providing technical
empowerment to financial institutions in the form of scenario-enabled technology. And foreign-funded
financial institutions have been entering China's financial market to set up foreign FinTech companies.
Facing these new patterns of competition, Hundsun will continue to increase its R&D investment to
maintain a leading position in the industry, and strengthen cooperative innovation, building innovation labs
together with customers in order to achieve mutual benefit and win-win results
3. Development trends in new technologies
Hundsun, together with a number of financial institutions, released the FinTech Trends Report 2022, the
first such report addressed to the industry analyzing and forecasting new technological trends in data, AI,
efficiency and security.
● Data: Big data platforms are gradually developing from application in projects/departments to
application across enterprises; open-source and domestic databases are gradually being applied to core
financial systems, and NoSQL databases are becoming increasingly dominant; privacy enhancement
technologies are helping the data asset ecosystem move towards federalization.
● AI: AI algorithms are increasingly highly-engineered and multi-modality, with reduced resource and data
requirements ushering financial "digital intelligence" into a new phase. The integration of RPA and AI
technology is expanding the scenarios covered by digital operation, and many "digital employees" are set
to be put to use in financial institutions. The development of AI for research and investment requires
“one core and three levels of integration” i.e., core industrial chain knowledge graph technology, plus
integration in terms of investment & research, data and supply & demand. AIOps will enhance the depth
and breadth of financial institutions' operation and maintenance through dynamic, optimized insight
strategies.
● Efficiency: Enterprise-level applications are generally being reconstructed on cloud-native platforms.
Achieving high performance and low latency requires the correct combination of hardware and software,
leveraging the potential of FPGAs, DPUs, nonvolatile memory, and other hardware. Low-code platforms
will become more common as enterprise-level development platforms, permitting rapid innovation.
Multi-experience and composable services will provide the foundation of the digitalized experience.
● Security: Data security has become core to information security systems, with institutions shifting to
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2021 Annual Report
guarantee data asset security compliance via secure operating systems. Zero trust will be the best method
of protecting the financial system in future. The increasingly complex software ecosystem is
exacerbating supply chain security risks, with open-source technology becoming a key target of
information security protection efforts.
As a leading Chinese FinTech company, Hundsun has made rich achievements in the application of
new technologies as follow.
● Beginning cooperation with pioneering labs. Based on actual business capability scenarios, pioneering
labs will actively explore technological, business and integrated innovations that combine domestic
high-end technical achievements, accelerate the implementation of industrial innovation topics and
standards, help to form a consensus on innovation within the industry, and promote the industry’s overall
progress. At present, cooperation with pioneer labs includes areas such as the introduction of IT
application innovation and high-performance ecosystems, incubation of scenario-based innovation,
databases and AI, academic cooperation, research into AI investment, and joint development of business
event standards. Through its cooperation with pioneering labs, the Company hopes to make cutting-edge
technologies more suitable for application in the financial industry, finally permitting realization of their
engineering application within the industry.
● Databases. Hundsun released its LightDB enterprise database product, completed testing and
certification of its IT application innovation hardware and software platform, and jointly constructed an
IT application innovation model using its next generation TA, initially putting this online in Soochow
Securities.
● High performance. Hundsun released LDP, a next-generation low-latency, and high-availability
distributed technology platform, improving its communications and memory access performance in 2021
via platform encapsulation. In August 2021, the LDP platform’s end-to-end delay broke through 100ns to
rank first in the industry.
● Artificial intelligence. Hundsun's Financial Knowledge Graph Tool Platform 1.0 offers customers a
localized platform implementation providing computing and data services locally. These include equity,
suspected actual controller, suspected beneficial owner, persons acting in concert, graph relational data
services, and group accounts.
● Blockchain. During the year, Hundsun released two blockchain products, H-BaaS 1.0 and FTCU Chain
Digital Asset Platform 1.0 and contracted with 24 customers. It completed the application of the two
products in government and industry, and completed the first blockchain credit financing business. In
future, in addition to continuing its efforts in existing businesses such as FinTech and supply chain
finance, Hundsun also plans continue to further research blockchain area application scenarios based on
regulatory technology.
● Establishment of Post-Doctoral Research Center. After establishing the Research Center with Zhejiang
Provincial Department of Human Resources and Social Security approval, the first batch of postdoctoral
researchers started their research in the Center, which Hundsun is using as its innovation platform,
promoting its overall capacity for scientific research and providing greater technological empowerment
to China's capital market. In 2021, Hundsun's first postdoctoral researcher at the Center completed
his/her research, with the result, "A Cross-Sentence Event Detection Network", selected for the Annual
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2021 Annual Report
Meeting of the Association of Computational Linguistics (ACL). At the same time, Hundsun's doctoral
team also obtained achievements in the macro investment research, financial risk management and stock
risk research areas.
(II) Company development strategies
√Applicable □Not Applicable
1. Customer satisfaction first, product quality first
"Customer first, quality first” was Hundsun’s original vision and remains its strategic cornerstone for
future development. Hundsun was founded on the basis of customers’ needs and has grown together with
its customers. Hundsun can only succeed by satisfying customers, depending on excellent products.
Hundsun’s aim is to improve its products, service capability and organizational capability in all aspects,
including strategic planning, organizational optimization, process systems and team membership, to truly
embody its “customer first” core values, exceed customer expectations, and develop into a world-leading
FinTech company.
2. Product-oriented strategy
The Company will continue to focus on its product-oriented strategy to maintain its core product lines’
overall leadership and the comprehensive strength of its competitive product lines, to strive for excellence
in terms of its product lines, and to expand and strengthen its Bank Insurance Fund (BIF) business and
international business.
3. Digital intelligence strategy
The Company aims to establish the top brand in data intelligence, promote its construction of market
data and customer data centers, and establish technological leadership via digital intelligence in its core
business.
4. Light strategy
Hundsun will continue to construct its unified Light technology brand ecosystem to fully empower the
digital transformation of finance via industry leading technologies. In future, the Company will continue its
investments in cloud-native architecture, low latency systems, hardware and software systems integration,
hybrid clouds, low code development, front-end micro-application systems, information technology
application innovation industry databases, big data real-time computing, AI in RPA, blockchain technology,
and other cutting-edge technologies. The Company will continue to make the Light technology platform
available to the industry, issue complete white papers on technical standards, and operate the developer
ecosystem, to building up a highly influential FinTech technology brand.
5. EAAS strategy
The Company will focus on developing wealth management cloud and private equity cloud services,
data & component subscription services, and wealth management BPO & KPO services, striving to
increase the proportion of revenues derived from its value-added services.
(III) Operation plan
√Applicable □Not Applicable
Based on the Company's new strategic plan and organizational restructuring, together with the outlook
for the market and regulatory policies in 2022, the Company's main business revenues for 2022 are
budgeted to increase by approximately 25% year on year, while costs and expenses for 2022 are budgeted
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2021 Annual Report
to increase by approximately 30% year on year.
(IV) Potential risks
√Applicable □Not Applicable
The main risks faced by the Company are policy and regulatory risks, market competition and HR
risks, and technological risks. Financial regulatory policies on the one hand have a significant impact on the
Company's customers’ business development, in turn affecting their demand and revenue sources, and on
the other hand may affect the Company's efforts to invest in innovative products and technologies, in
addition to the formulation and implementation of the Company's strategies. The Company's response to
policy and regulatory risks is to “embrace regulation & secure innovation” with a focus on compliance in
its construction, and strict control and prevention of operational risks.
In terms of market competition and HR risks, the Company mainly faces competition from new
market players in the industry, such as niche business competitors and the FinTech subsidiaries of
traditional financial institutions. The competition for outstanding FinTech talents may, in particular,
adversely affect the Company's human resources. The Company's responses include strengthening new
product research and development, improving employees’ compensation levels, the development of a
sound performance incentive system and the establishment of a multi-tiered medium and long-term
incentive system.
In terms of technological risks, due to the rapid development of emerging technology trends, such as
AI, blockchain, big data and cloud computing, the Company needs to keep abreast of technological trends,
and maintaining sufficient investment in research and development in order to avoid lagging behind. The
Company's responses include actively monitoring cutting-edge technologies, improving its R&D system
and team, and conducting training on various new technologies.
(V) Others
□Applicable √Not Applicable
VII. CIRCUMSTANCES OF AND REASONS FOR THE COMPANY FAILING TO MAKE
DISCLOSURES IN ACCORDANCE WITH THE RELEVANT STANDARDS FOR SPECIAL
REASONS, SUCH AS THE NON-APPLICABILITY OF STANDARDS, STATE SECRETS OR
TRADE SECRETS
□Applicable √Not Applicable
Section IVCorporate Governance
I. EXPLANATION OF CIRCUMSTANCES RELEVANT TO CORPORATE GOVERNANCE
√Applicable □Not Applicable
Through observing its "Customer First, Integrity, Professionalism, Openness, Cooperation &
Continuous Growth" core values and upholding its mission to "Make Finance Easy", Hundsun is
committed to developing into the world's leading FinTech company. Since its establishment, Hundsun has
been actively undertaking social responsibility as a corporate citizen and continuously promoting both its
own sustainable development and that of society. In accordance with the relevant national laws and
regulations, and with its Articles of Association, the Company has defined the organizational hierarchy of
the Board & Supervisory Board, its management & internal departments, staffing, responsibilities &
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2021 Annual Report
authority, working procedures, and related requirements. The Company continues to improve its corporate
governance structure, standardize its operations and enhance its corporate governance in strict accordance
with the provisions of the Company Law, Securities Law, Rules Governing the Listing of Stocks on the
Shanghai Stock Exchange and other relevant laws and regulations, as well as the requirements of its
Articles of Association, Procedural Rules for Shareholders' General Meetings, Procedural Rules for Board
Meetings, Procedural Rules for Supervisors' Meetings, Management Rules for External Guarantees,
Management Rules for Internal Audit and other rules and regulations.
(1) Shareholders and shareholders' general meetings. During the Reporting Period, the Company
held four shareholders' general meetings in total. The convening, holding and voting procedures of these
meetings were in line with the provisions of the Company Law and the Company's Articles of Association
and Procedural Rules for Shareholders' General Meetings, with lawyers attending the meetings and issuing
legal opinion attesting to their legality. The Company kept communication channels with its shareholders
open, treated all shareholders equally, and ensured that shareholders could fully exercise their rights,
enjoying their right to be informed and to participate in decision-making on major matters.
(2) Directors and the Board. The number and composition of the Company's Board meet legal and
regulatory requirements, and the Directors are all responsible and diligent. There are a total of 11 directors,
including four independent directors; two accounting experts, one financial expert and one legal expert
(female). The independent directors do not hold positions in the Company other than as director, in
accordance with the relevant regulations.
During the Reporting Period, the Company held six board meetings, the convening, holding and
voting procedures of which were in line with the provisions of the Company Law and the Company's
Articles of Association and Procedural Rules for Board Meetings. The Board has established four special
committees, the Strategy & Investment Committee, Audit Committee, Nomination Committee, and
Remuneration & Evaluation Committee, and formulated terms of reference and implementation rules for
each committee designed to fully leverage its professional strengths in order to guarantee the legitimacy,
scientific nature and correctness of the Board’s collective decisions and reduce the operational risk faced by
the Company. The Board is always eager to keep up to date with documents issued by the Party Central
Committee and, during the period during which board meetings were held, based on the recommendations
of the Company's Party Committee, studied documents related to the 10th meeting of the Central Committee
for Financial and Economic Affairs of the CPC and the Implementation Plan for the High-Quality
Development and Construction of a Demonstration Zone for Common Prosperity in Zhejiang.
(3) Supervisors and Supervisory Board. The Supervisory Board consists of a Chairman and three
members, including one employee supervisor (female). During the Reporting Period, the Company held
five Supervisory meetings in total, the convening, holding and voting procedures of which were in line with
the provisions of the Company Law, the Company's Articles of Association and Procedural Rules for
Supervisors' Meetings. The Supervisory Board was able to earnestly perform its duties and supervise the
legitimacy and compliance of the Company's Directors and Senior Management in the performance of their
duties, safeguarding the legitimate rights and interests of Shareholders.
(4) Information disclosure and transparency. The Company fulfills its social responsibilities mainly
via ensuring faithful, accurate, timely and complete disclosure of information. In strict accordance with the
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regulations relating to information disclosure, the Company makes faithful, accurate, timely and complete
disclosures in the form of periodic reports and interim announcements, paying special attention to the
delivery of more effective information to market investors.
Since its listing, the Company has increased the efforts relating to the development of its information
disclosure regulations. Based on actual working requirements, and the relevant CSRC and Shanghai Stock
Exchange requirements, the Company has developed a series of information disclosure regulations and
management measures, including Hundsun's Regulations on Information Disclosure, Hundsun's
Regulations on Registration of Insiders Who Have Access to Insider Information, Hundsun's Regulations
on Internal Reporting of Significant Information, and Hundsun's Regulations on the Management of
External Information Reporting and Use. These regulations ensure that all departments and persons in
charge fulfill their respective duties and guarantee the unimpeded disclosure of information. In 2021, a
series of rules and guidelines were issued at regulatory level to regulate the operation of the Company and
improve corporate governance. The Company organized study activities in response to the policies and
regulations issued by the CSRC and conducted in depth study of newly issued or revised rules such as the
Measures for Administrating the Information Disclosure of Listed Companies, the Rules Governing the
Listing of Stocks on Shanghai Stock Exchange, the CSRC’s relevant regulatory guidelines, relevant
self-regulatory guidelines issued by the Shanghai Stock Exchange, and sample annual and semi-annual
reports. The Company increased its proactivity of information disclosure, making timely and complete
disclosures to the market concerning its business operations and development strategies, and ensured that
the information disclosed was true, accurate, complete, concise, clear and comprehensible.
(5) Investor relations management. The Company attaches importance to investor relations
management and has formulated its Regulations on Investor Relations Management. It receives visits from
individual investors and institutional investors via its investor hotline, email address open to investors, and
SSE E-Interactive platform, and maintains investor relationships through participation in securities
companies’ exchange summits. During the Reporting Period, the Company directly communicated its
strategic planning goals and confidence concerning its future sustainable development to investors via
holding its 2020 Earnings Communication Conference and 2021 Semi-annual Earnings Communication
Conference, which allowed investors to learn more about the Company and maintained its relationship with
investors. The Company strengthens communication with investors via information disclosure and
communication, increasing investors’ knowledge of and approval for the Company, enhancing corporate
governance, maximizing its overall interests, and protecting the legitimate rights and interests of its
investors.
Whether there are material differences between corporate governance and the provisions of laws,
administrative regulations and the CSRC on the governance of listed companies; if so, the reasons should
be given
□Applicable √Not Applicable
II. SPECIFIC MEASURES TAKEN BY THE CONTROLLING SHAREHOLDER AND ACTUAL
CONTROLLER TO ENSURE THE INDEPENDENCE OF THE COMPANY'S ASSETS,
PERSONNEL, FINANCE, DEPARTMENTS AND BUSINESS, AS WELL AS THE
SOLUTIONS, WORK SCHEDULE AND FOLLOW-UP WORK PLANS AFFECTING THE
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COMPANY’S INDEPENDENCE
□Applicable √Not Applicable
Where the Controlling Shareholder, the Actual Controller and other companies under their control are
engaged in the same or similar business as the Company, the impact of horizontal competition or
significant changes in the horizontal competition facing the Company, solutions adopted, progress and
follow-up solutions
□Applicable √Not Applicable
III. INTRODUCTION TO SHAREHOLDERS' GENERAL MEETING
Media in which
Session of
Date resolutions were Date of disclosure Resolutions
meeting
disclosed
2020 annual June 3, 2021 www.sse.com.cn June 4, 2021 The Full Text and Summary of the 2020
general Annual Report, the 2020 Annual Work
meeting Report of the Board, the 2020 Annual Work
Report of the Supervisory Committee, the
2020 Annual Final Accounting Report, the
Self-evaluation Report on Internal Control in
2020, the Profit Distribution Plan for 2020,
the Proposal on the Further Employment of
Pan-China Certified Public Accountants LLP
and its Remuneration, and the Proposal on
the Joint Subscription of Nanjing Xingding
Equity Investment Partnership (L.P.) by the
Company and its Associated Corporations
were adopted at the meeting through
deliberation. Details of the above resolutions
are set out in the Company's Announcement
No. 2021-027.
2021 first September 14, 2021 www.sse.com.cn September 15, 2021 The Proposal on the Related Transaction of
extraordinary Providing Performance Guarantee of
general Business Contracts for the Subsidiaries, the
meeting Proposal on the Related Party Transactions of
Joint Investment in Hundsun Holdings
Limited by the Company and its Associated
Corporations, and the Proposal on the
Election of Independent Directors were
adopted at the meeting through deliberation.
Details of the above resolutions are set out in
the Company's Announcement No. 2021-045.
2021 second November 16, 2021 www.sse.com.cn November 17, 2021 The Proposal on Revising the Investment and
extraordinary Management Measures of Key Employees
general Buying Shares in Hundsun's Innovative
meeting Business Subsidiaries and the Proposal on the
Election of Supervisors were adopted at the
meeting through deliberation. Details of the
above resolutions are set out in the
Company's Announcement No. 2021-054.
2021 third December 14, 2021 www.sse.com.cn December 15, 2021 The Proposal on the Related Party
extraordinary Transactions of Increasing Investment in the
general Subsidiary Cloudwing Network and the
meeting Proposal on the Election of Directors were
adopted at the meeting through deliberation.
Details of the above resolutions are set out in
the Company's Announcement No. 2021-062.
The preferred shareholders with resumed voting rights request for an extraordinary general meeting
□Applicable √Not Applicable
Information of Shareholders’ General Meetings
√Applicable □Not Applicable
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All the proposals were not rejected but adopted at the above general meetings through deliberation.
The convening and holding procedures, the qualification of the convener, the qualification of the attendees
and the voting procedures were in line with the provisions of the Company Law and the Company's
Articles of Association, and the resolutions made at the meetings were legally valid.
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IV. Directors, Supervisors and Senior Management
(I) Changes in Shareholding and Remuneration of Directors, Supervisors and Senior Management Currently in Office and Resigned during the Reporting
Period
√Applicable □Not Applicable
Unit: share
Total pre-tax Whether to
remuneration receive
Number of Change in received from compensation
Number of shares
Date of term Date of term shares held at shares during the Company from related
Name Position (Note) Gender Age held at the end of Reasons
commencement expiration the beginning the Reporting during the parties of the
the year
of the year Period Reporting Company
Period (RMB
10,000)
Peng Chairman Male 53 2007-02-16 2022-04-18 Decrease in 454.49 N
Zhenggang shareholdings after
11,518,000 15,000,000 3,482,000 equity distribution
of the Company in
2020
Liu Shufeng Vice Chairman Male 52 2013-02-04 2022-04-18 Equity distribution 473.67 N
and General 8,667,435 12,134,409 3,466,974 of the Company in
Manager 2020
Jiang Director Male 51 2007-02-16 2022-04-18 Equity distribution 344.13 N
Jiansheng 19,871,806 27,820,528 7,948,722 of the Company in
2020
Jing XiandongDirector Male 50 2014-10-31 2022-04-18
Han Xinyi Director Male 45 2016-02-03 2022-04-18
Hu Xi Director Male 41 2019-04-19 2021-11-27
Zhu Chao Director Male 42 2019-04-19 2022-04-18
Yu Bin Director Male 45 2021-12-14 2022-04-18
Wang Independent Male 65 2020-04-21 2022-04-18 24.00
Xiangyao Director
Liu Xiaolun Independent Male 50 2019-04-19 2022-04-18 24.00
Director
Liu Lanyu Independent Female 56 2016-02-03 2022-04-18 24.00
Director
Ding Wei Independent Male 62 2021-09-14 2022-04-18 7.10
Director
Guo Tianyong Independent Male 54 2019-04-19 2021-09-14 16.92
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2021 Annual Report
Total pre-tax Whether to
remuneration receive
Number of Change in received from compensation
Number of shares
Date of term Date of term shares held at shares during the Company from related
Name Position (Note) Gender Age held at the end of Reasons
commencement expiration the beginning the Reporting during the parties of the
the year
of the year Period Reporting Company
Period (RMB
10,000)
Director
Huang Chenli Chairman of Male 42 2016-02-03 2022-04-18
Supervisory
Committee
Zhao Ying Supervisor Female 49 2016-02-03 2021-10-29
Xie Lijuan Supervisor Female 40 2019-05-22 2022-04-18 69.51
Fan Jingwu Deputy General Male 51 2007-10-26 2022-04-18 Equity distribution 344.94 N
Manager 908,629 1,272,080 363,451 of the Company in
2020
Guan Xiaolan Deputy General Male 51 2007-10-26 2022-04-18 Decrease in 274.44 N
Manager shareholdings after
1,745,264 2,153,329 408,065 equity distribution
of the Company in
2020
Ni Shouqi Deputy General Male 48 2014-01-22 2022-04-18 168.64 N
0
Manager
Tong Deputy General Male 50 2010-02-08 2022-04-18 151.10 N
Chenghui Manager
Fu Meiying Deputy General Female 67 2019-04-19 2022-04-18 221.58 N
0
Manager
Wang Feng Deputy General Male 45 2016-02-03 2022-04-18 190.14 N
0
Manager
Zhang Deputy General Male 45 2016-02-03 2022-04-18 256.92 N
0
Guoqiang Manager
Zhang Yong Deputy General Male 45 2017-03-24 2022-04-18 256.31 N
0
Manager
Zhou Feng Deputy General Male 59 2019-04-19 2022-04-18 147.70 N
0
Manager
Zhang Deputy General Male 54 2019-04-19 2022-04-18 Equity distribution 165.63 N
Xiaodong Manager 169 237 68 of the Company in
2020
Yao Manying Head of Finance Female 47 2018-03-23 2022-04-18 0 98.31 N
Tu Haiyan Secretary of the Female 52 2020-03-18 2022-04-18 0 89.35 N
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2021 Annual Report
Total pre-tax Whether to
remuneration receive
Number of Change in received from compensation
Number of shares
Date of term Date of term shares held at shares during the Company from related
Name Position (Note) Gender Age held at the end of Reasons
commencement expiration the beginning the Reporting during the parties of the
the year
of the year Period Reporting Company
Period (RMB
10,000)
Board
Total / / / / / 42,711,303 58,380,583 15,669,280 3,802.88 /
Name Major work experience
Peng Zhenggang one of the co-founders who founded the Company in 1995 and currently serves as the Company’s Chairman.
Liu Shufeng one of the co-founders who founded the Company in 1995 and currently serves as the Company's Vice Chairman and General Manager
Jiang Jiansheng one of the co-founders who founded the Company in 1995 and currently serves as the Company's Executive Director
Jing Xiandong the Chairman and CEO of Ant Technology Group Co., Ltd.
Han Xinyi the CFO of Ant Technology Group Co., Ltd. and the legal representative of Hangzhou Handsome Electronics Group Co., Ltd.
Yu Bin the General Manager of CTO Digital Technology Division of Ant Technology Group Co., Ltd.
Zhu Chao the senior director and head of the Corporate Development Department of Ant Technology Group Co., Ltd.
Huang Chenli the head of the Corporate Finance Department of Ant Technology Group Co., Ltd.
Chen Zhijie the director of the Investment and Corporate Development Department of Ant Technology Group Co., Ltd.
Ding Wei Born in 1960, he graduated from the Finance Department of Renmin University of China in 1982, studied for a doctoral degree in the Department of Economics of the
University of Texas at Austin with the Fulbright scholarship from 1984 to 1987, and completed the executive training course at Harvard Business School in 1998. With
extensive experience in banking and finance, he worked for the World Bank, Deutsche Bank, CICC, Temasek and other organizations and institutions, is currently the founder
and chairman of Borun Capital, and has been an independent director of the Company since September 2021.
Wang Xiangyao Born in 1957, he is a senior accountant, Chinese CPA, doctor of economics, accounting professor, and doctoral supervisor. He has won the first and second prizes of the
Higher Teaching Achievement Award of Zhejiang Province, the Outstanding Achievement Award of Philosophy and Social Sciences of Zhejiang Province, and many other
awards. He is also the deputy director of the Accounting Standards Professional Committee of the Chinese Accounting Association, an academic member of the Internal Audit
Society, and an independent director of BeingMate Co., Ltd. and the Company.
Liu Xiaolun Born in 1972, he has a Ph.D. in Business Management (Corporate Governance) and is currently the executive director of the Institute of Finance of Beijing National
Accounting Institute, the professor in charge of the risk management and internal control program/China Financial Industry CRO Training Program, and the supervisor of
master students of Beijing National Accounting Institute/Tsinghua University/Ministry of Finance Academy of Finance. He was the senior auditor and senior experienced
auditor of PricewaterhouseCoopers and Andersen Hua Qiang Certified Public Accountant and the first and second director of the Institute of Audit and Risk Management of
the National Accounting Institute and is also a member of the 7th Committee on Internal Control Standards of China Accounting Society, a member of the 8th Fundamental
Accounting Theory Committee of China Accounting Society, a non-practicing member of CICPA, a member of the Association of Certified Fraud Examiners (ACFE), and an
honorary member of the Institute of Management Accountants (IMA).
Liu Lanyu Born in 1966, she has a master's degree in civil law from Renmin University of China, and is currently a lawyer of Beijing Haiyun Law Firm and a member of the First Listing
Committee and the First M&A and Corporate Restructuring Committee of the Shenzhen Stock Exchange GEM. She has been engaged in financial and securities legal services
for many years, with a solid legal theoretical foundation and rich practical experience.
Xie Lijuan joined the Company in 2010 and is currently the director of the Company's audit office.
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2021 Annual Report
Fan Jingwu joined the Company in 1996 and is currently the Deputy General Manager of the Company
Guan Xiaolan joined the Company in 1996 and is currently the Deputy General Manager of the Company
Ni Shouqi joined the Company in 1998 and is currently the Deputy General Manager of the Company
Tong Chenghui joined the Company in 2002 and is currently the Deputy General Manager of the Company
Fu Meiying joined the Company in 2000 and is currently the Deputy General Manager of the Company
Wang Feng joined the Company in 2001 and is currently the Deputy General Manager of the Company
Zhang Guoqiang joined the Company in 1999 and is currently the Deputy General Manager of the Company
Zhang Yong joined the Company in 2004 and is currently the Deputy General Manager of the Company
Zhou Feng joined the Company in 1999 and is currently the Deputy General Manager of the Company
Zhang Xiaodong joined the Company in 2000 and is currently the Deputy General Manager of the Company
Yao Manying joined the Company in 2000 and is currently the Head of Finance of the Company.
Other information
□Applicable √Not Applicable
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2021 Annual Report
(II) Positions of Directors, Supervisors and Senior Management Currently in Office and Resigned
during the Reporting Period
1. Position in the Shareholder's Entity
√Applicable □Not Applicable
Name of the Shareholder's Position in the Date of term Date of term
Name of officer
entity Shareholder's entity commencement expiration
Executive Director,
Hangzhou Hundsun
Han Xinyi General Manager, and September 10, 2018
Electronics Group Co., Ltd.
Legal Representative
Explanation on position in None
the shareholder's entity
(III) Compensation of Directors, Supervisors and Senior Management
√Applicable □Not Applicable
Decision-making process of compensation of During the Reporting Period, the remuneration of Directors,
Directors, Supervisors and Senior Management Supervisors and Senior Management who receive remuneration from
the Company is determined in accordance with the regulations on
remuneration assessment established by the Company.
Basis for determining the remuneration of Directors, Based on the wage base and appraisal principles determined by the
Supervisors and Senior Management Board, annual remuneration is paid based on the results of the annual
performance appraisal.
Actual payment of remuneration to Directors, Please refer to Section "Changes in Shareholding and Remuneration
Supervisors and Senior Management of Directors, Supervisors and Senior Management Currently in Office
and Resigned during the Reporting Period" for details
Total payment of remuneration before tax to See notes for details
Directors, Supervisors and Senior Management as at
the end of the Reporting Period
(IV) Change of Directors, Supervisors and Senior Management of the Company
√Applicable □Not Applicable
Name Position Changes Reasons
Hu Xi Director Resigned Job transfer
Yu Bin Director Elected By-election
Zhao Ying Supervisor Resigned Job transfer
Chen Zhijie Supervisor Elected By-election
Guo Tianyong Independent Director Resigned Term expires
Ding Wei Independent Director Elected By-election
(V) Details of Fines Imposed by Securities Regulatory Bodies In the Past Three Years
□Applicable √Not Applicable
(VI) Others
□Applicable √Not Applicable
V. BOARD MEETINGS HELD DURING THE REPORTING PERIOD
Session of meeting Date Resolutions
16th meeting of the March 18, 2021 The Proposal on Provision for Impairment of Assets, the Proposal on Financial
Seventh Board Assistance to Subsidiaries and Related Party Transactions, the Proposal on the
Application for Comprehensive Credit Line for 2021, and the Proposal on
Related Party Transactions Concerning Daily Operations Expected in 2021
were adopted at the meeting through deliberation. Details of the above
resolutions are set out in the Company's Announcement No. 2021-008.
17th meeting of the April 23, 2021 The Full Text and Summary of the 2020 Annual Report, the Work Report of
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2021 Annual Report
Session of meeting Date Resolutions
Seventh Board General Managers in 2020, the 2020 Annual Work Report of the Board, the
2020 Annual Final Accounting Report, the 2020 Annual Work Report of the
Audit Committee, the 2020 Annual Work Report of the Remuneration and
Evaluation Committee, the 2020 Annual Work Report of the Strategy and
Investment Committee, the 2020 Annual Work Report of the Nominations
Committee, the Self-evaluation Report on Internal Control in 2020, the
Proposal on the Further Employment of Pan-China Certified Public
Accountants LLP and its Remuneration, the Profit Distribution Plan for 2020,
the 2020 Social Responsibility Report of Hundsun, the Proposal on the Joint
Subscription of Xingding Fund by the Company and its Associated
Corporations, the Proposal on the Application for Bank Loan Credit for the
Hundsun Cloud Production Base Project Phase II, the Proposal on the
By-election of Members of Relevant Special Committees of the Board and the
Proposal on the Request for Convening the Shareholders' General Meetings for
2020 were adopted at the meeting through deliberation. Details of the above
resolutions are set out in the Company's Announcement No. 2021-018.
18th meeting of the April 27, 2021 The First Quarterly Report of 2021 and the Q1 Work Report of General
Seventh Board Managers in 2020 were adopted at the meeting through deliberation. Details of
the above resolutions are set out in the Company's Announcement No.
2021-024.
19th meeting of the August 24, 2021 The Full Text and Summary of the 2021 Semi-annual Report, the 2020
Seventh Board Semi-annual Work Report of General Managers in 2020, the Proposal on the
Related Transaction of Providing Performance Guarantee of Business
Contracts for the Subsidiaries, the Proposal on the Related Party Transactions
of Joint Investment in Hundsun Holdings Limited by the Company and its
Associated Corporations, the Proposal on Increasing Construction Budget for
the Hundsun Cloud Production Base Project Phase II, the Proposal on the
Nomination of Candidates for Independent Directors and the Proposal on the
Request for Convening the First Extraordinary General Meeting of
Shareholders for 2021 were adopted at the meeting through deliberation.
Details of the above resolutions are set out in the Company's Announcement
No. 2021-037.
20th meeting of the October 27, 2021 The Third Quarterly Report of 2021, the Q3 Work Report of General Managers
Seventh Board in 2021, the Proposal on Revising the Investment and Management Measures
of Key Employees Buying Shares in Hundsun's Innovative Business
Subsidiaries, the Proposal on Revising the Implementation Measures of
Employee Stock Ownership Scheme of Hundsun's Innovative Business
Subsidiaries, the Proposal on Related Party Transactions of Increasing
Investment in the Subsidiary (Hundsun iBontal), the Proposal on By-election
of Members of Relevant Special Committees of the Board, and the Proposal on
the Request for Convening the Second Extraordinary General Meeting of
Shareholders for 2021 were adopted at the meeting through deliberation.
Details of the above resolutions are set out in the Company's Announcement
No. 2021-047.
21st meeting of the November 26, 2021 The Proposal on the Increase of Loan Limit for the Phase II Project of Hundsun
Seventh Board Financial Cloud Base, the Proposal on the Nomination of Candidates for
Directors, the Proposal on the Acquisition of Summit Business of Finastra by
the Company's Subsidiary Cloudwing Network, the Proposal on the Related
Party Transactions of Increasing Investment in the Subsidiary Cloudwing
Network, and the Proposal on the Request for Convening the Third
Extraordinary General Meeting of Shareholders for 2021 were adopted at the
meeting through deliberation. Details of the above resolutions are set out in the
Company's Announcement No. 2021-056.
VI. THE PERFORMANCE OF DIRECTORS' DUTIES
(I) The Attendance of Directors at Board Meetings and General Meetings
Independent Attendance
Director
director or Attendance at Board meetings at general
Name
not meetings
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2021 Annual Report
Two
Number
Number consecutive
of Board Number of Number of Number of
of Number Board
meetings meetings meetings attended general
meetings of meetings not
to be attended in by way of meetings
attended Absence attended in
attended person telecommunication attended
by proxy person or
this year
not
Peng N 6 6 3 0 0 N 2
Zhenggang
Liu Shufeng N 6 6 3 0 0 N 4
Jiang Jiansheng N 6 6 3 0 0 N 4
Jing Xiandong N 6 6 3 0 0 N 0
Han Xinyi N 6 6 3 0 0 N 0
Hu Xi N 6 6 3 0 0 N 0
Zhu Chao N 6 6 3 0 0 N 0
Yu Bin N 0 0 0 0 0 N 0
Guo Tianyong Yes 4 4 2 0 0 N 0
Wang Yes 6 6 3 0 0 N 2
Xiangyao
Liu Xiaolun Yes 6 6 3 0 0 N 0
Liu Lanyu Yes 6 6 3 0 0 N 0
Ding Wei Yes 2 2 1 0 0 N 0
Note: On December 14, 2021, Director Yu Bin was elected at the general meeting through deliberation, and
after that, no Board meeting was held by the Company until the end of 2021.
Explanation on non-attendance in person by Directors at two consecutive Board meetings
□Applicable √Not Applicable
Number of Board meetings held during the year 6
Including: Number of on-site meetings 0
Number of meetings held by way of telecommunication 3
Number of meetings held by a combination of on-site and 3
telecommunication
(II) Objection to Related Matters of the Company by Independent Directors
□Applicable √Not Applicable
(III) Others
□Applicable √Not Applicable
VII. SPECIAL COMMITTEES UNDER THE BOARD
√Applicable □Not Applicable
(1) Membership of special committees under the Board
Name of special committee Member name
Audit Committee Liu Xiaolun, Zhu Chao, Ding Wei, Wang Xiangyao, Jiang Jiansheng
Nominations Committee Ding Wei, Jiang Jiansheng, and Liu Lanyu
Remuneration and Evaluation Committee Wang Xiangyao, Jing Xiandong, Liu Lanyu, Liu Xiaolun, and Jiang Jiansheng
Strategy Committee Peng Zhenggang, Jing Xiandong, Han Xinyi, Liu Shufeng, and Jiang Jiansheng
(2) The Strategy Committee held one meeting during the Reporting Period
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2021 Annual Report
Important comments and Other performance of
Date Meeting content
suggestions duties
April 23, To deliberate the 2020 Annual Work Report The attending members adopted the
2021 of the Strategy and Investment Committee Proposal through serious discussion
and deliberation and agreed to
submit the Proposals to the Board
for deliberation.
(3) The Audit Committee held six meetings during the Reporting Period
Other
Date Meeting content Important comments and suggestions performance
of duties
March 8, 2021 1. To deliberate the Proposal on Provision for The attending members adopted the
Impairment of Assets; 2. To deliberate the Proposal Proposal through serious discussion
on Financial Assistance to Subsidiaries and Related and deliberation and agreed to submit
Party Transactions; 3. To deliberate the Proposal on the Proposals to the Board for
Related Party Transactions Concerning Daily deliberation.
Operations Expected in 2021
April 22, 2021 1. To deliberate the Full Text and Summary of the The attending members adopted the
2020 Annual Report; 2. To deliberate the Proposal through serious discussion
Self-evaluation Report on Internal Control in 2020; and deliberation and agreed to submit
3. To deliberate the Proposal on the Further the Proposals to the Board for
Employment of Pan-China Certified Public deliberation.
Accountants LLP and its Remuneration; 4. To
deliberate the Profit Distribution Plan for 2020; 5.
To deliberate the Proposal on the Joint Subscription
of Xingding Fund by the Company and its
Associated Corporations
April 27, 2021 1. To deliberate the First Quarterly Report of 2021 The attending members adopted the
Proposal through serious discussion
and deliberation and agreed to submit
the Proposals to the Board for
deliberation.
August 24, 2021 1. To deliberate the Full Text and Summary of the The attending members adopted the
2021 Semi-Annual Report; 2. To deliberate the Proposal through serious discussion
Proposal on the Related Transaction of Providing and deliberation and agreed to submit
Performance Guarantee of Business Contracts for the Proposals to the Board for
the Subsidiaries; 3. To deliberate the Proposal on deliberation.
the Related Party Transactions of Joint Investment
in Hundsun Holdings Limited by the Company and
its Associated Corporations
October 15, 1. To deliberate the Third Quarterly Report of 2021; The attending members adopted the
2021 2. To deliberate the Proposal on Related Party Proposal through serious discussion
Transactions of Increasing Investment in the and deliberation and agreed to submit
Subsidiary (Hundsun iBontal) the Proposals to the Board for
deliberation.
November 22, 1. To deliberate the Proposal on the Related Party The attending members adopted the
2021 Transactions of Increasing Investment in the Proposal through serious discussion
Subsidiary Cloudwing Network and deliberation and agreed to submit
the Proposals to the Board for
deliberation.
(4) The Remuneration and Evaluation Committee held one meeting during the Reporting Period
Other performance of
Date Meeting content Important comments and suggestions
duties
April 23, The 2020 Annual Work Report of the The attending members adopted the
2021 Remuneration and Evaluation Committee Proposal through serious discussion
was adopted at the meeting through and deliberation and agreed to
deliberation. submit the Proposals to the Board for
deliberation.
(5) The Nominations Committee held two meetings during the Reporting Period
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2021 Annual Report
Other performance of
Date Meeting content Important comments and suggestions
duties
August 13, To deliberate the Proposal on the The attending members adopted the
2021 Nomination of Candidates for Proposal through serious discussion and
Independent Directors deliberation and agreed to submit the
Proposals to the Board for deliberation.
November 22, To deliberate the Proposal on the The attending members adopted the
2021 Nomination of Candidates for Proposal through serious discussion and
Directors deliberation and agreed to submit the
Proposals to the Board for deliberation.
(6) Details of matters in question
□Applicable √Not Applicable
VIII. EXPLANATION ON EXISTENCE OF RISKS DISCOVERED BY THE SUPERVISORY
COMMITTEE
□Applicable √Not Applicable
The Supervisory Committee had no objection to the matters supervised during the Reporting Period.
IX. EMPLOYEES OF THE PARENT COMPANY AND MAIN SUBSIDIARIES AT THE END OF
THE REPORTING PERIOD
(I) Employees
Number of employees in the parent company 8,329
Number of employees in main subsidiaries 4,981
Total number of employees on job 13,310
Number of the retired staff with expenses borne by the parent
company and main subsidiaries
Professions
Type of professions Number of employees
On-site implementation 1,413
Product technology 8,659
Marketing and sales 369
Functional management 499
Customer services 2,370
Total 13,310
Level of education
Level of education Number of employees
Master's degree and above 1,418
Bachelor's Degree 10,671
Junior college and below 1,221
Total 13,310
(II) Remuneration Policy
√Applicable □Not Applicable
The remuneration of the Company’s employees includes salaries, bonuses and other benefit plans. In
compliance with relevant PRC laws and regulations, the Company implements different remuneration
standards for different employees based on their positions, abilities, performance and other factors.
(III) Training Plan
√Applicable □Not Applicable
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2021 Annual Report
The Company focuses on improving the overall quality of the workforce and formulates talents
training plans according to the development needs of various talents so that the Company’s management
level and human resources can be continuously improved.
(IV) Labor Outsourcing
√Applicable □Not Applicable
Total hours outsourcing 14,456.96 hours per capita per month
Total payment for labor outsourcing RMB244,772,575.11
X. PLAN FOR PROFIT DISTRIBUTION OR CONVERSION OF COMMON RESERVE FUND
INTO SHARE CAPITAL
(I) Formulation, Implementation or Adjustment to the Cash Dividend Policy
√Applicable □Not Applicable
During the Reporting Period, the Company implemented the Profit Distribution Plan for 2020. On July
12, 2021, the Company disclosed the Announcement on the Implementation of the Dividend Distribution
Plan for 2020, with a specific distribution plan of a cash dividend of RMB0.1 per share and 0.4 bonus
shares per share. As the actual number of shares for profit distribution was 1,043,674,314, the total cash
dividend distributed by the Company was RMB104,367,431.4 (including tax) and the number of bonus
shares distributed was 417,469,726. The Company had 1,461,560,480 shares outstanding after the share
distribution.
(II) Special Explanation on Cash Dividend Policy
√Applicable □Not Applicable
Whether it complies with the provisions of the Articles of Association or the requirements of √Yes □No
resolutions of the general meetings
Whether the dividend standard and proportion are well defined and clear √Yes □No
Whether the relevant decision-making procedures and mechanisms are complete and sound; √Yes □No
Whether the Independent Directors have performed their duties and played their due roles √Yes □No
Whether the minority shareholders have the opportunity to fully express their opinions and √Yes □No
demands and whether their legitimate rights and interests are fully protected
(III) If the Company was Profitable during the Reporting Period and the Parent Recorded Profits
Distributable to the Shareholders, but No Cash Profit Distribution Plan was Proposed, the
Company shall Disclose in Detail the Reasons for Non-Distribution as Well as the Use and
Future Plans of the Undistributed Profits
□Applicable √Not Applicable
XI. THE COMPANY'S EQUITY INCENTIVE SCHEME, EMPLOYEE STOCK OWNERSHIP
SCHEME OR OTHER EMPLOYEE INCENTIVES AND THE IMPACT THEREOF
(I) Incentives Disclosed in the Temporary Announcements and without Progress or Changes in
Subsequent Implementation
√Applicable □Not Applicable
Summary of events Enquiry index
Announcement on the Completion of Non-trade Stock Transfer under the Announcement No. 2021-031www.sse.com.cn
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2021 Annual Report
2020 Employee Stock Ownership Scheme
Announcement of Resolutions of the First Holders' Meeting under the Announcement No. 2021-034 www.sse.com.cn
2020 Employee Stock Ownership Scheme
(II) Incentives Undisclosed in Temporary Announcements or with Progress in Subsequent
Implementation
Equity incentives
□Applicable √Not Applicable
Other notes
□Applicable √Not Applicable
Employee Stock Ownership Scheme
□Applicable √Not Applicable
Other incentives
□Applicable √Not Applicable
(III) Equity Incentives Granted to Directors and Senior Management during the Reporting Period
□Applicable √Not Applicable
(IV) Establishment and Implementation of Appraisal Mechanism and Incentive Mechanism for
Senior Management during the Reporting Period
□Applicable √Not Applicable
XII. Establishment and Implementation of Internal Control System during the Reporting period
√Applicable □Not Applicable
For details, please refer to the Company's Internal Control Self-assessment Report 2021 as disclosed on the
website of the Shanghai Stock Exchange at www.sse.com.cn.
Explanation on Significant Deficiencies in Internal Control During the Reporting Period
□Applicable √Not Applicable
XIII. MANAGEMENT CONTROL OVER THE SUBSIDIARIES DURING THE REPORTING
PERIOD
√Applicable □Not Applicable
According to the Company Law, the Articles of Association and other relevant laws, regulations and
rules, as well as the provisions of the Management Rules for Subsidiaries of Management Rules, the
Company guided, managed and supervised its subsidiaries, and explicitly required the subsidiaries to
operate in a standardized manner, to make financial management and operation decisions in compliance, to
extend their efforts in reporting related party transactions, external guarantees, foreign investments and
other important matters to the Company in advance, and to strengthen the collaborative management of
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2021 Annual Report
technology, research and development, sales and other aspects to jointly safeguard the Company's rights
and interests.
During the Reporting Period, Hundsun Lirong, Hundsun iBontal, Dworld AI and Genus-Finance
became the Company's subsidiaries. The details are as follows.
Genus-Finance. After completing the merger and acquisition of Genus-Finance, the Company
incorporated this subsidiary's HR, finance and information construction departments into its unified control
system, specially assigned persons to take charge of these departments, and integrated this subsidiary's
businesses into its asset management business to make business cooperation with other departments.
Thanks to the smooth integration process, Genus-Finance is now operating normally.
Dworld AI. After completing the merger and acquisition of Dworld AI, the Company incorporated this
subsidiary's HR, finance and information construction departments into its unified control system, specially
assigned persons to take charge of these departments, and integrated this subsidiary's businesses into its
management of data risk and infrastructure business committee to make business cooperation with another
subsidiary Gildata. Thanks to the smooth integration process, Dworld AI is now operating normally.
Hundsun Lirong. Because the businesses and customers of Cloudwing Network and Hundsun Lirong
overlap to some extent, Cloudwing Network had acquired 76.01% shares of Hundsun Lirong held by
Hundsun Electronics, so as to eliminate internal competition and to share and integrate the assets, business,
HR, financial and other resources of the two subsidiaries.
Hundsun iBontal. After completing the merger and acquisition of Hundsun iBontal, the Company
appointed the chairman of this subsidiary, specially assigned persons to take charge of relevant departments,
and integrated this subsidiary's HR management, financial management, market contract management and
information synergy management into the control system of the parent company. The Company also
successfully introduced new strategic investors to this subsidiary and made a breakthrough in the R&D of
core life insurance systems and market exploitation. Through one year of integration, Hundsun iBontal is
now operating its market exploitation and various businesses well.
XIV.INFORMATION ON AUDIT REPORT OF INTERNAL CONTROL
√Applicable □Not Applicable
Whether or not to disclose the audit report of internal control: Yes
Type of opinion on the audit report on internal control: Standard unqualified opinion
XV. RECTIFICATION OF PROBLEMS IDENTIFIED IN THE SELF-INSPECTION OVER THE
COMPANY'S SPECIAL GOVERNANCE MEASURES
The Company had rectified several problems identified in the self-inspection in a targeted manner. At
present, there is only the problem of requiring Independent Directors to work on the spot, which cannot be
rectified temporarily due to the COVID-19 epidemic.
XVI. Others
□Applicable √Not Applicable
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Section V Environmental and Social Responsibility
I. ENVIRONMENTAL INFORMATION
(I) Explanation on Environmental Protection of Companies and Their Significant Subsidiaries
Classified as the Key Pollutant Discharging Entities Announced by the Environmental
Protection Department
□Applicable √Not Applicable
(II) Environmental Protection of the Companies Other than Key Pollutant Discharging Entities
√Applicable □Not Applicable
1. Administrative penalties imposed for environmental problems
□Applicable √Not Applicable
2. Disclosure of other environmental information with reference to key pollutant discharging
entities
√Applicable □Not Applicable
The Company is mainly engaged in providing software products and services to domestic financial
institutions, in which the resources used are mainly human resources, and the products produced are mainly
software, systems, data and various platform services, so there is almost no environmental pollution.
3. Reasons for failure to disclose other environmental information
□Applicable √Not Applicable
(III) Relevant information that is conducive to ecological protection, pollution prevention and
environmental responsibility fulfillment
□Applicable √Not Applicable
(V) Measures taken to reduce carbon emissions during the Reporting Period and their effectiveness
□Applicable √Not Applicable
II. SOCIAL RESPONSIBILITY
√Applicable □Not Applicable
For details, please refer to the Environmental, Social and Governance (ESG) Report and Corporate
Social Responsibility Report of the Company as disclosed on the website of the Shanghai Stock Exchange
at www.sse.com.cn.
III. DETAILS ON THE COMPANY CONSOLIDATING AND EXPANDING ITS
ACHIEVEMENTS IN POVERTY ALLEVIATION AND RURAL REVITALIZATION
√Applicable □Not Applicable
In 2021, the Company participated in the poverty alleviation by developing industries and education
development project of the Henan Provence Foundation for Poverty Alleviation (HNFPA) in Luochen
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Village, Guangshan County, donated educational resources to the poverty alleviation project of in-service
teachers in Yufeng Primary School, provided assistance in the construction of reading rooms in
impoverished mountainous schools in Sichuan Province, participated in the educational poverty alleviation
and education assistance project of Zhanlei Primary School in Leshan County, Guizhou Province, and
subsidized various needy families, with a total investment of approximately RMB840,000.
Section VI Significant Events
I. PERFORMANCE OF COMMITMENTS
(I) Commitments of the Actual Controller, Shareholders, Related Parties, Acquiring Parties of the
Company and the Company and Other Parties Involved During the Reporting Period or
Subsisting to the Reporting Period
□Applicable √Not Applicable
(II) If the Company Has Made a Profit Forecast as to Its Assets or Projects, and the Reporting
Period is within the Profit Estimate Period, the Company’s Explanation on whether Its Assets
or Projects Meet Its Previous Profit Forecast and the Reasons
□Meet □Not meet √Not Applicable
(III) Fulfillment of the Performance Commitment and Its Impact on the Goodwill Impairment Test
□Applicable √Not Applicable
II. FUNDS FOR PURPOSES OTHER THAN FOR BUSINESS MISAPPROPRIATED BY THE
CONTROLLING SHAREHOLDERS AND OTHER RELATED PARTIES DURING THE
REPORTING PERIOD
□Applicable √Not Applicable
III. ILLEGAL GUARANTEE
□Applicable √Not Applicable
IV. THE COMPANY'S NOTES ON THE "NON-STANDARD OPINION AUDIT REPORT" OF
ACCOUNTING FIRMS
□Applicable √Not Applicable
V. ANALYSIS AND EXPLANATION OF THE REASONS FOR AND EFFECTS OF CHANGES
IN THE ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES OF THE COMPANY
OR REMEDIES FOR MAJOR ACCOUNTING ERRORS
(I) Explanations of the Company on the Reasons for and Effects of Changes in the Accounting
Policies and Accounting Estimates
√Applicable □Not Applicable
1. Changes in significant accounting policies
(1) Changes in accounting policies caused by changes in the Accounting Standards for Business
Enterprises
1) The Company implemented the revised Accounting Standards for Business Enterprises No.
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2021 Annual Report
21- Leases (hereinafter referred to as the new lease standards) from January 1, 2021 (hereinafter
referred to as the First Implementation Date).
① For contracts that existed before the First Implementation Date, the Company chose not to
reassess whether these contracts are lease contracts or contracts containing provisions on leases.
② For leases in which the Company was the lessee, the Company adjusted the retained earnings
and the amount of other relevant items in financial statements at the beginning of the Reporting Period
with regard to the cumulative impact of applying the new lease standards and the previous standards
on the First Implementation Date, without adjusting the items during comparable periods. The specific
process is as follows.
For operating leases before the First Implementation Date, the Company measured the lease
liabilities on the First Implementation Date based on the present value of the remaining lease
payments discounted at the Company's incremental borrowing rate as of the First Implementation Date,
and measured the right-of-use assets by the carrying value obtained as if the Company adopted the
new lease standards from the commencement date of the lease term (discounted at the Company's
incremental borrowing rate as of the First Implementation Date) and the properly adjusted advance
rental payments.
On the First Implementation Date, the Company conducted an impairment test on the right-of-use
assets and carries out corresponding accounting in accordance with the provisions of Note V (30) to
the financial statements.
A. The principal effects of the implementation of the new lease standards on the Company's
financial statements as of January 1, 2021 are as follows.
Balance Sheet
Item December 31, 2020 Adjustment effects of new January 1, 2021
lease standards
Right-of-use assets 10,271,192.32 10,271,192.32
Prepayments 9,007,186.01 -834,932.30 8,172,253.71
Lease liabilities 2,654,639.37 2,654,639.37
Current portion of non-current 7,111,829.18 7,111,829.18
liabilities
Provision for liabilities 12,147,826.09 100,000.00 12,247,826.09
Surplus reserve 195,947,299.77 -4,502.28 195,942,797.49
Undistributed profits 2,893,625,565.93 -291,827.99 2,893,333,737.94
Minority interests 483,731,488.14 -133,878.26 483,597,609.88
B. The weighted average of the Company's incremental borrowing rates used for lease liabilities
charged to the Balance Sheet on the First Implementation Date was 4.71%.
C. Operating leases before the First Implementation Date were simplified
a. The Company simplified leases that had been completed within 12 months after the First
Implementation Date, with right-of-use assets and lease liabilities not recognized.
b. The Company adopted the same discount rate for lease contracts with similar characteristics
when measuring the lease liabilities.
c. No initial direct costs were included in the measurement of right-to-use assets.
d. The Company determined the term of the lease based on the actual exercise of the renewal
option or termination option before the First Implementation Date and other updates.
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e. As an alternative to the impairment test of the right-of-use assets, the Company assessed
whether the contracts containing provisions on leases were onerous contracts before the First
Implementation Date in accordance with the Accounting Standards for Business Enterprises No. 13 –
Contingencies, and adjusted the right-of-use assets by the amount of the provision for losses charged
on the balance sheet date before the First Implementation Date.
f. In case of any changes in leases before the First Implementation Date, the Company carried out
accounting based on the final arrangement of the changes in leases.
The simplifications above had no significant impact on the Company's financial statements.
③ The Company simplified operating lease contracts with low-value assets that existed before
the First Implementation Date, with the right-of-use assets and lease liabilities not recognized, and
carried out accounting in accordance with the new lease standards from the First Implementation Date.
④ For lease contracts in which the Company was the lessor, the Company carried out
accounting in accordance with the new lease standards from the First Implementation Date.
2) On January 26, 2021, the Company implemented the Interpretation No. 14 of Accounting
Standards for Business Enterprises issued by the Ministry of Finance in 2021, and this change in
accounting policies had no impact on the Company's financial statements.
3) On December 31, 2021, the Company implemented the provisions of the Interpretation No. 15
of Accounting Standard for Business Enterprises issued by the Ministry of Finance, and this change in
accounting policies had no impact on the Company's financial statements.
(II) Analysis and Explanation of the Reasons for and Effects of the Company’s Remedies for Major
Accounting Errors
□Applicable √Not Applicable
(III) Communication with Former Accounting Firms
□Applicable √Not Applicable
(IV) Other Notes
□Applicable √Not Applicable
VI. APPOINTMENT AND DISMISSAL OF ACCOUNTING FIRMS
Unit: 10,000 yuan Currency: RMB
Current appointment
Name of domestic accounting firm Pan-China Certified Public Accountants LLP
Remuneration for domestic accounting firm 161
Term of audit by domestic accounting firm 19
Name Remuneration
Accounting firm for internal control Pan-China Certified Public Accountants LLP 35
audit
Explanation on Appointment and Dismissal of Accounting Firms
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2021 Annual Report
□Applicable √Not Applicable
Change of the accounting firms during the Audit Period
□Applicable √Not Applicable
VII. FACING THE RISK OF SUSPENSION OF LISTING
(I) Reasons for Suspension of Listing
□Applicable √Not Applicable
(II) Measures Taken by the Company
□Applicable √Not Applicable
(III) SITUATION AND REASONS FOR TERMINATION OF LISTING
□Applicable √Not Applicable
VIII. MATTERS RELATED TO BANKRUPTCY REORGANIZATION
□Applicable √Not Applicable
IX. MAJOR LITIGATION AND ARBITRATION MATTERS
□Major litigation and arbitration matters in this year √No major litigation and arbitration matters
X. PENALTIES ON THE COMPANY AND ITS DIRECTORS, SUPERVISORS, SENIOR
MANAGEMENT, CONTROLLING SHAREHOLDERS AND ACTUAL CONTROLLER DUE
TO SUSPECTED VIOLATION OF LAWS AND REGULATIONS, AND RECTIFICATION
□Applicable √Not Applicable
XI. EXPLANATION ON THE INTEGRITY OF THE COMPANY AND ITS CONTROLLING
SHAREHOLDERS AND ACTUAL CONTROLLERS DURING THE REPORTING PERIOD
□Applicable √Not Applicable
XII. MAJOR RELATED PARTY TRANSACTIONS
(I) Related Party Transactions Related to Daily Operations
1. Events Disclosed in the Temporary Announcements and without Progress or Changes in
Subsequent Implementation
√Applicable □Not Applicable
Summary of events Enquiry index
The Announcement on Expected Related Party Transactions For the Announcement No. 2021-013, please refer to
Related to Daily Operations in 2021 www.sse.com.cn
2. Events Disclosed in the Temporary Announcements but with Progress or Changes in Subsequent
Implementation
□Applicable √Not Applicable
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3. Events Undisclosed in the Temporary Announcements
□Applicable √Not Applicable
(II) Related Party Transactions from Acquisition and Disposal of Assets or Equity
1. Events Disclosed in the Temporary Announcements and without Progress or Changes in
Subsequent Implementation
□Applicable √Not Applicable
2. Events Disclosed in the Temporary Announcements but with Progress or Changes in Subsequent
Implementation
□Applicable √Not Applicable
3. Events Undisclosed in the Temporary Announcements
□Applicable √Not Applicable
4. The Performance Achievements during the Reporting Period Shall be Disclosed if Undertakings
on Performance are Involved
□Applicable √Not Applicable
(III) Material Related Party Transactions involving Joint Foreign Investments
1. Events Disclosed in the Temporary Announcements and without Progress or Changes in
Subsequent Implementation
√Applicable □Not Applicable
Summary of events Enquiry index
Related party transactions on the joint subscription of Nanjing For the Announcement No. 2021-022, please refer to
Xingding Equity Investment Partnership (L.P.) by the www.sse.com.cn
Company and its associated corporations
Related party transactions on the joint investment in Hundsun For the Announcement No. 2021-040, please refer to
Holdings Limited by the Company and its Associated www.sse.com.cn
Corporations
Related party transactions on increasing investment in the For the Announcement No. 2021-049, please refer to
Holding Subsidiary Hundsun iBontal www.sse.com.cn
Related party transactions on increasing investment in the For the Announcements No. 2021-059 and No. 2021-063,
Holding Subsidiary Cloudwing Network please refer to www.sse.com.cn
2. Events Disclosed in the Temporary Announcements but with Progress or Changes in Subsequent
Implementation
□Applicable √Not Applicable
3. Events Undisclosed in the Temporary Announcements
□Applicable √Not Applicable
(IV) Claims and Liabilities between Related Parties
1. Events Disclosed in the Temporary Announcements and without Progress or Changes in
Subsequent Implementation
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2021 Annual Report
□Applicable √Not Applicable
2. Events Disclosed in the Temporary Announcements but with Progress or Changes in Subsequent
Implementation
□Applicable √Not Applicable
3. Events Undisclosed in the Temporary Announcements
□Applicable √Not Applicable
(V) Financial Business between the Company and Related Financial Companies, Holding Financial
Companies and Related Parties
□Applicable √Not Applicable
(VI) Others
□Applicable √Not Applicable
XIII. MATERIAL CONTRACTS AND PERFORMANCE
(I) Trust, Contracting and Leasing
1. Trust
□Applicable √Not Applicable
2. Contracting
□Applicable √Not Applicable
3. Leasing
□Applicable √Not Applicable
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2021 Annual Report
(II) Guarantee
√Applicable □Not Applicable
Unit: yuan Currency: RMB
External guarantee (excluding guarantees provided to subsidiaries)
Relation Date of Guarantee
Guarantee
between guarantee Guarantee provided
Secured Guarantee Type of Collateral has been Amount .
Guarantor guarantor (agreement Valid from Expired at is overdue Counter-guarantee to related
party amount guarantee (if any) performed override Relation
and the signing or not parties or
or not
Company date) not
None
Total guarantee amount during the Reporting Period (excluding guarantees
0
provided to subsidiaries)
Balance of total guarantees at the end of the Reporting Period (A) (excluding 0
guarantees provided to subsidiaries)
Guarantees provided by the Company and its subsidiaries to subsidiaries
Total guarantee amount to subsidiaries during the Reporting Period 0
Balance of total guarantees to subsidiaries at the end of the Reporting Period
278,000,000
(B)
Total guarantee amount (including guarantees to subsidiaries) provided by the Company
Total guarantee amount (A+B)
278,000,000
Proportion of total guarantee amount in the Company's net assets (%) 4.88%
Including:
Amount of guarantees provided by the Company to its shareholders, Actual 0
Controller and related parties (C)
Amount of debt guarantees provided directly or indirectly by the Company to 0
secured parties with an asset-liability ratio exceeding 70% (D)
Total guarantee amount exceeding 50% of the net assets (E) 0
Total amount of above three guarantees (C+D+E) 0
Explanation of possible joint and several liabilities for unexpired guarantee None
Notes for guarantees (1) The proposal on the provision of business contract performance guarantees of up to RMB168 million in total
to eight subsidiaries from FY2019 to FY2021 was adopted through deliberation at the 26th meeting of the Sixth
Board of the Company. (Please refer to the Company's Announcement No. 2019-017 for details.)
(2) The proposal on the provision of a loan credit guarantee of RMB80 million to Hundsun Ayers Technologies
Limited, Hundsun Ayers Technologies Limited, from FY2020 to FY2022 was adopted through deliberation at the
6th Meeting of the Seventh Board of the Company. (Please refer to the Company's Announcement No. 2020-012
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2021 Annual Report
for details.)
(3) The proposal on the provision of business contract performance guarantees of up to RMB58 million in total to
Cloudyee Network and Jingteng Network, subsidiaries of the Company, from FY2022 to FY2023 was adopted
through deliberation at the 19th meeting of the Seventh Board of the Company. (Please refer to the Company's
Announcement No. 2021-039 for details.)
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2021 Annual Report
(III) Entrustment of Asset Management
1. Entrusted wealth management
(1) Overall entrusted wealth management
√Applicable □Not Applicable
Unit: 10,000 yuan Currency: RMB
Amount overdue but
Type Source of funds Amount incurred Outstanding balance
uncollected
Bank wealth Self-owned fund 107,020.00 78,870.00 0
management products
Trust wealth Self-owned fund 216,850.00 46,200.00 0
management products
Total 323,870.00 125,070.00 0
Others
□Applicable √Not Applicable
(2) Impairment provision for entrusted wealth management
□Applicable √Not Applicable
2. Entrusted loan
(1) Overall entrusted loan
□Applicable √Not Applicable
Others
□Applicable √Not Applicable
(2) Single entrusted loan
□Applicable √Not Applicable
Others
□Applicable √Not Applicable
(3) Impairment provision for entrusted loans
□Applicable √Not Applicable
3. Others
□Applicable √Not Applicable
(IV) Other Material Contracts
□Applicable √Not Applicable
XIV. OTHER SIGNIFICANT EVENTS THAT HAVE A SIGNIFICANT IMPACT ON INVESTORS'
VALUE JUDGMENTS AND INVESTMENT DECISIONS
□Applicable √Not Applicable
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2021 Annual Report
Section VII Changes in Shares and Particulars of Shareholders
I. CHANGES IN SHAREHOLDING OF SHARES
(I) Statement of Changes in Shares
1. Statement of Changes in Shares
Unit: share
Before this change Increase (+)/decrease (-) in this change After this change
Conversion
Issuance of the
Propor- Proportion
Number of new Bonus shares reserve Others Sub-total Number
tion (%) (%)
shares funds into
shares
I. Shares not
subject to selling 1,044,090,754 100 +417,469,726 417,469,726 1,461,560,480 100
restrictions
1.
RMB-denominate 1,044,090,754 100 +417,469,726 417,469,726 1,461,560,480 100
d ordinary shares
II. Total number
1,044,090,754 100 +417,469,726 417,469,726 1,461,560,480 100
of shares
2. Particulars of Changes in Shares
√Applicable □Not Applicable
The Company adopted the Profit Distribution Plan for 2020 through deliberation at the 17th meeting of
the Seventh Board held on April 23, 2021, and then adopted the Plan through deliberation at the
shareholders' general meeting held on June 3, 2021. The change in shares in the Profit Distribution Plan is
that the Company will distribute a cash dividend of RMB1.00 (including tax) for every 10 shares and 4
bonus shares for every 10 shares to all shareholders based on the shares outstanding registered on the date
of registration of the implementation of the equity distribution less the number of shares in the special
securities repurchase account of the Company. Based on 1,035,695,014 shares, being 1,044,090,754 shares
outstanding less 8,395,740 shares in the Company's special securities repurchase account, the Company
will distribute the total cash dividend of RMB103,569,501.40 (including tax) and 414,278,006 bonus shares.
If the shares outstanding for the profit distribution change, the Company will adjust the total shares to be
distributed at the same distribution ratio per share.
On June 28, 2021, the Company received the Confirmation of Transfer Registration issued by China
Securities Depository and Clearing Corporation Limited, 7,979,300 shares in 8,395,740 shares in the
Company's special securities repurchase account were transferred to the Company's account under the 2020
Employee Stock Ownership Scheme through non-trade transfer on June 25, 2021 (please refer to
Announcement No. 2021-031 for details). There were 416,440 shares remaining in the Company's special
securities repurchase account. As a result of the above, the basic shares for profit distribution were changed
to 1,043,674,314 from 1,035,695,014. In accordance with the Profit Distribution Plan for 2020 adopted
through deliberation at the 2020 Annual General Meeting of the Company, and the principle of "adjusting
the total shares to be distributed at the same distribution ratio per share", i.e., distributing a cash dividend of
RMB1.00 for every 10 shares (including tax) and 4 bonus shares for every 10 shares to all shareholders,
Company adjusted the total cash dividend to RMB104,367,431.4 (including tax) and the total bonus shares
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2021 Annual Report
to 417,469,726. The Company had 1,461,560,480 shares outstanding after the share distribution.
3. Effect of Changes in Shares on Financial Indicators such as Earnings per Share and Net Assets
per Share for the Recent Year and the Recent Period (if any)
√Applicable □Not Applicable
The Company announced the implementation of the 2020 annual equity distribution on July 12, 2021,
stipulating that the share registration date was July 15, 2021, the ex-dividend date was July 16, 2021, and
the additional shares not subject to selling restrictions were listed on July 19, 2021. After the completion of
the share distribution, the Company had 1,461,560,480 shares in total. The effect of the share change on the
relevant financial indicators is as follows.
The same period The same period
Key financial indicators January to September 2021 last year (after last year (before
changes of shares) changes of shares)
Basic earnings per share (RMB/share) 0.47 0.90 1.27
Diluted earnings per share (RMB/share) 0.47 0.90 1.27
Net assets per share attributable to shareholders of the
3.07 3.12 4.36
Company (RMB/ share)
4. Other Information that the Company Deems Necessary or as Required by Securities Regulators
□Applicable √Not Applicable
(II) Changes in Restricted Shares
□Applicable √Not Applicable
II. SECURITY ISSUANCE AND LISTING
(I) Security Issuance during the Reporting Period
□Applicable √Not Applicable
Explanation on the issuance of securities during the Reporting Period (please describe bonds with different
interest rates during the duration separately):
□Applicable √Not Applicable
(II) Changes in Number of Shares and Shareholding of the Company’s Shares and the Changes in
Structure of its Balance Sheet
√Applicable □Not Applicable
Please refer to "Particulars of Changes in Shares" above
(III) Existing Internal Staff Shares
□Applicable √Not Applicable
III. SHAREHOLDERS AND ACTUAL CONTROLLERS
(I) Total Number of Shareholders
Total number of ordinary Shareholders at the end of the 88,641
Reporting Period (Nr.)
Total number of ordinary shareholders at the end of last month 100,924
before the disclosure date of the Annual Report (Nr.)
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2021 Annual Report
(II) Shareholding of the Top 10 Shareholders and Top 10 Outstanding Shareholders (or Holders of
Unrestricted Shares) at the End of the Reporting Period
Unit: share
Shareholding of the Top 10 Shareholders
Increase or Pledged, Marked or Nature of
Number
Decrease Frozen Shares Shareholder
Name of Shareholder Number of Shares Held Proportion of
during the
(Full Name) At the End of the Period (%) Restricted Status of
Reporting Number
Shares Shares
Period
Hangzhou Hundsun Domestic
Electronics Group 86,536,942 302,879,298 20.72 0 None non-state-owned
Co., Ltd. corporate
Hong Kong
Overseas
Securities Clearing 132,532,565 223,754,436 15.31 0 Unknown
corporate
Company Limited
Domestic
Jiang Jiansheng 7,948,722 27,820,528 1.90 0 None
natural person
Zhou Lingen 7,577,967 25,892,883 1.77 0 Unknown Unknown
China Securities
State-owned
Finance Corporation 1,049,517 19,182,439 1.31 0 Unknown
corporate
Limited
Overseas
Peng Zhenggang 3,482,000 15,000,000 1.03 0 None
natural person
China Merchants
New
Bank Co., Ltd. -
shareholding
BOCOM Schroeder State-owned
during 14,683,859 1.00 0 Unknown
New Growth Hybrid corporate
Reporting
Securities
Period
Investment Fund
Industrial and
Commercial Bank of New
China Limited - shareholding
State-owned
Guangfa Multi-factor during 12,865,307 0.88 0 Unknown
corporate
Flexible Allocation Reporting
Hybrid Securities Period
Investment Fund
Domestic
Liu Shufeng 3,466,974 12,134,409 0.83 0 None
natural person
Chen Hong 3,141,864 12,009,025 0.82 0 Unknown Unknown
Shareholding of the Top 10 Shareholders without Restrictions
Number of Type and Number of Shares
Name of Shareholder Outstanding Shares
without Restrictions Type Number
Ordinary shares
Hangzhou Hundsun Electronics Group Co., Ltd. 302,879,298 denominated in 302,879,298
RMB
Ordinary shares
Hong Kong Securities Clearing Company Limited 223,754,436 denominated in 223,754,436
RMB
Ordinary shares
Jiang Jiansheng 27,820,528 denominated in 27,820,528
RMB
Ordinary shares
Zhou Lingen 25,892,883 denominated in 25,892,883
RMB
Ordinary shares
China Securities Finance Corporation Limited 19,182,439 denominated in 19,182,439
RMB
Ordinary shares
Peng Zhenggang 15,000,000 denominated in 15,000,000
RMB
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2021 Annual Report
Ordinary shares
China Merchants Bank Co., Ltd. - BOCOM Schroeder New
14,683,859 denominated in 14,683,859
Growth Hybrid Securities Investment Fund
RMB
Industrial and Commercial Bank of China Limited - Guangfa Ordinary shares
Multi-factor Flexible Allocation Hybrid Securities Investment 12,865,307 denominated in 12,865,307
Fund RMB
Ordinary shares
Liu Shufeng 12,134,409 denominated in 12,134,409
RMB
Ordinary shares
Chen Hong 12,009,025 denominated in 12,009,025
RMB
Special securities repurchase account of the top 10
None
Shareholders
The above Shareholders entrust and waive their voting rights
Unknown
or are entrusted with the voting right
Related relationship or acting in concert among the above
Unknown
Shareholders
Shareholdings of Top 10 Shareholders with Trading Restrictions and Conditions of Such Restrictions
□Applicable √Not Applicable
(III) Strategic Investors or General Corporations Becoming Top 10 Shareholders Due to the
Placement of New Shares
□Applicable √Not Applicable
IV. CONTROLLING SHAREHOLDER AND ACTUAL CONTROLLER
(I) Controlling Shareholder
1 Corporation
√Applicable □Not Applicable
Name Hangzhou Hundsun Electronics Group Co., Ltd.
Person in charge or legal representative Han Xinyi
Incorporation date September 28, 1998
Principal Operating Business Services: non-financial technology project investment, corporate financial
management consulting, technology development of integrated circuits and
communication equipment, technical consulting, and transfer of
achievements; wholesale and retail: communication equipment, and groceries;
import and export of goods (except for those prohibited by laws and
administrative regulations, and those restricted by laws and administrative
regulations can be operated only after obtaining a license). (Projects approved
by law can be operated only after obtaining the approval of relevant authority)
Shareholding of other domestic and overseas None
listed companies controlling and holding
shares during the Reporting Period
Others None
2 Natural person
□Applicable √Not Applicable
3 Special explanation on no controlling shareholders of the Company
□Applicable √Not Applicable
4 Changes in controlling shareholders during the Reporting Period
□Applicable √Not Applicable
5 Block diagram of property rights and control relationship between the Company and the
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2021 Annual Report
Controlling Shareholder
√Applicable □Not Applicable
(II) Actual Controller
1 Corporation
□Applicable √Not Applicable
2 Natural person
√Applicable □Not Applicable
Name Ma Yun
Nationality China
Right of residence in other countries or N
regions acquired or not
Main occupation and title Founder of Alibaba Group
Domestic and foreign listed companies held None
thereby in the past 10 years
3 Special explanation on no actual controllers of the Company
□Applicable √Not Applicable
4 Changes in the Company's control rights during the Reporting Period
□Applicable √Not Applicable
5 Block diagram of property rights and control relationship between the Company and the Actual
Controller
√Applicable □Not Applicable
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2021 Annual Report
6 Actual Controller controlling the Company by way of trust or other asset management methods
□Applicable √Not Applicable
(III) Summary of Other Facts about the Controlling Shareholder and Actual Controller
□Applicable √Not Applicable
V. THE COMPANY'S CONTROLLING SHAREHOLDER OR THE FIRST MAJORITY
SHAREHOLDER AND ITS CONCERT PARTIES PLEDGED A TOTAL OF 80% OR MORE
OF THEIR SHAREHOLDINGS IN THE COMPANY
□Applicable √Not Applicable
VI. OTHER CORPORATE SHAREHOLDERS WITH OVER 10% OF SHAREHOLDING IN
THE COMPANY
□Applicable √Not Applicable
VII. DETAILS ON RESTRICTION ON SHAREHOLDING REDUCTION
□Applicable √Not Applicable
VIII.SPECIFIC IMPLEMENTATION OF SHARE REPURCHASE DURING THE REPORTING
PERIOD
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Name of Share Repurchase Scheme Announcement on the Proposal to Repurchase the Company's Shares in Call
Auction Trading
Date of disclosure December 9, 2020
Number of shares to be repurchased and the Under the condition that the price of repurchased shares does not exceed
RMB120 per share, the number of shares to be repurchased is expected to be
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2021 Annual Report
proportion (%) in total shares outstanding about 6,666,667, accounting for about 0.64 of the Company's total shares
outstanding, based on the upper limit of the repurchase amount of RMB800
million, and is expected to be about 5,000,000, accounting for about 0.48 of
the Company's total shares outstanding, based on the lower limit of the
repurchase amount of RMB600 million
Proposed amount for repurchase Not less than RMB600 million (inclusive) and not more than RMB800
million (inclusive)
Proposed repurchase term (1) The term of the share repurchase shall be 12 months from the date of
approval of the Share Repurchase Scheme by the Board. The Company will
repurchase at its discretion and in accordance with market conditions during
the repurchase term as determined by the Board. The repurchase term shall
expire earlier if the following conditions occur or are met: (i) if the funds for
repurchase used reaches the upper limit of the repurchase amount during the
term, the Share Repurchase Scheme shall be completed, i.e., the repurchase
term shall expire earlier from such date; (ii) if the Board of the Company
decides to terminate the Scheme, the repurchase term shall expire earlier from
the date of the resolution of the Board to terminate the Scheme. (2) The
Company shall not repurchase its shares during the following periods: (i)
within 10 trading days prior to the announcement of the Company's regular
report, earnings preannouncement or preliminary earnings estimate; (ii) within
2 trading days from the date of occurrence or during the decision-making
process of a material matter that may have a significant impact on the trading
price of the Company's shares to the date of disclosure according to law; (iii)
other circumstances as prescribed by the CSRC and the Shanghai Stock
Exchange. During the implementation of the repurchase, if the Company's
shares are delisted for more than 10 consecutive trading days due to the
planning of major events, the Share Repurchase Scheme will be postponed to
implement and disclosed in a timely manner upon the resumption of trading of
shares.
Repurchase purpose For the employee stock ownership scheme
Number of shares repurchased (share) 8,395,740
Number of repurchased shares as a
percentage of the underlying shares under the
share incentive scheme (%) (if any)
Progress of the Company's share repurchase None
reduction in call auction trading
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2021 Annual Report
Section VIII Preferred Shares
□Applicable √Not Applicable
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2021 Annual Report
Section IXCorporate Bonds
I. ENTERPRISE BONDS, CORPORATE BONDS AND DEBT FINANCING INSTRUMENT OF
NON-FINANCIAL ENTERPRISES
□Applicable √Not Applicable
II. CONVERTIBLE CORPORATE BONDS
□Applicable √Not Applicable
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2021 Annual Report
Section X Financial Report
I. AUDITOR'S REPORT
√Applicable □Not Applicable
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2021 Annual Report
Auditor's Report
TJS [2022] No. 1658
To all shareholders of Hundsun Technologies Inc.
I. OPINION
We have audited the financial statements of Hundsun Technologies Inc. (hereinafter referred to as
Hundsun Technologies), including the consolidated and parent company's balance sheets as of December
31, 2021, the consolidated and parent company's income statements, cash flow statements and statements
of retained earnings for 2021, and related notes to the financial statements.
In our opinion, the attached financial statements present fairly, in all material respects, the
consolidated and parent company's financial position of Hundsun Technologies as of December 31, 2021,
and the consolidated and the parent company's records of performance and cash flow statements for 2021,
prepared in accordance with Accounting Standards for Business Enterprises.
II. BASIS FOR OPINION
We have conducted our audit in accordance with the Auditing Standards for Chinese Certified Public
Accountants. Our responsibilities under those standards are further described in the Section "Auditor's
Responsibilities for the Audit of the Financial Statements" of our report. We are independent of Hundsun
Technologies in accordance with the Code of Ethics for Chinese Certified Public Accountants, and we have
fulfilled our other ethical responsibilities of the Code. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our audit.
III. KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, we consider to be most
significant to the audit of the financial statements for the period. These matters are addressed in the context
of the audit of the financial statements as a whole and the formation of an audit opinion, and we do not
express an opinion on these matters individually.
(I) Revenue Recognition
1. Introduction
The revenue of Hundsun Technologies mainly comes from the provision of overall software solutions
and network services for securities, futures, funds, trusts, insurance, banks, exchanges, private equity firms
and other institutions. Hundsun Technologies recorded revenue of RMB5,496,578,600 in 2021, of which
revenue from software product sales and services accounted for 99.60%. As disclosed in the significant
accounting policies and accounting estimates (XXVI) set out in Note III to the financial statements,
Hundsun Technologies applies different revenue recognition methods to revenue from sales of
self-developed software products, revenue from sales of customized software and revenue from software
services. Revenue is one of the key performance indicators of Hundsun Technologies and involves
significant judgment of Hundsun Technologies’ management (hereinafter referred to as Management), and
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2021 Annual Report
revenue may be recognized in inappropriate accounting periods, thus we considered revenue recognition as
a key audit matter.
2. Audit Response
The audit procedures we implement for revenue recognition mainly include:
(1) Understanding the key internal controls related to revenue recognition, evaluating the design of
these controls, determining whether these controls are implemented, and testing the implementation
effectiveness of related internal controls;
(2) Obtaining Company's sales revenue account, analyzing the growth rate of revenue over the same
period, identifying whether there are major or abnormal fluctuations at the overall level based on monthly
and product type analysis procedures, and finding out the causes of fluctuations;
(3) Testing details, sampling sales contracts and related completion orders for which revenues are
recognized during the period, and checking whether projects are completed and whether the service term is
consistent according to the completion conditions and service term agreed in the contracts;
(4) Sampling projects for on-the-spot inspection to understand the progress of project implementation;
(5) Implementing confirmation procedures for key customers to confirm information such as accounts
receivable, contract assets and debt balances, sales revenue for the period, project progress and service
terms;
(6) Performing cut-off tests for revenues recognized before and after the balance sheet date to evaluate
whether revenues are recognized in the appropriate period;
(7) Checking whether the information relating to revenue has been properly presented in the financial
statements.
(II) Goodwill Impairment Test
1. Introduction
As of December 31, 2021, Hundsun Technologies recorded the original carrying value of goodwill of
RMB539,186,500 and the provision for impairment of RMB171,694,300, resulting in a carrying value of
RMB367,492,100. As described in the significant accounting policies and accounting estimates (XX) in
Note III to the financial statements, the Management is required to perform annual impairment tests on
goodwill resulting from business combinations, regardless of whether impairment exists, and to adjust the
carrying value of goodwill based on the test results. The Management tests goodwill for impairment in
conjunction with the asset group or combination of asset groups related thereto, and the recoverable amount
of the related asset group or combination of asset groups is determined based on the present value of
projected future cash flows. Significant judgments and assumptions made by the Management, such as the
estimation of the revenue growth rate, profit margin, appropriate discount rate and other indicators, are
considered in the determination of the present value of future cash flows and therefore we considered the
goodwill impairment test as a key audit matter.
2. Audit Response
The audit procedures we implement for goodwill impairment tests mainly include:
(1) Understanding the key internal controls related to goodwill impairment tests, evaluating the design
of these controls, determining whether these controls are implemented, and testing the implementation
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2021 Annual Report
effectiveness of related internal controls;
(2) Reviewing the Management’s projections of the present value of future cash flows and actual
results of operations for prior years and evaluating the accuracy of the Management's historical projections;
(3) Understanding the historical performance and development plans for each asset group, as well as
the macroeconomic and development trends of the industries to which they belong;
(4) Understanding and evaluating the competency, professionalism and objectivity of the external
valuation experts engaged by the Management;
(5) Evaluating the reasonableness and consistency of the methods used by Management in the
impairment test;
(6) Reviewing the reasonableness of the level of cash flow projections and the discount rate adopted,
including the growth rate of future sales revenue, projected profit margin and related expenses of the
corresponding asset group, and conducting a comparative analysis with the historical data of the
corresponding asset group and future market trends;
(7) Testing the accuracy of the Management's calculation of the present value of projected future cash
flows;
(8) Checking whether the information relating to goodwill impairment has been properly presented in
the financial statements.
IV. OTHER INFORMATION
The Management is responsible for other information. Other information includes the information
covered in the Annual Report but excludes the financial statements and our auditor's report.
Our audit opinion on the financial statements does not cover other information, and we do not express
an assurance conclusion of any kind on other information
In conjunction with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with, or
appears to be materially misstated in, the financial statements or what we have learned during the audit.
Based on the work we have performed, if we determine that other information is materially misstated,
we should report that fact. We do not have any matters to report in this regard.
V. RESPONSIBILITIES OF THE MANAGEMENT AND THOSE CHARGED WITH
GOVERNANCE FOR THE FINANCIAL STATEMENTS
The Management shall be responsible for preparing financial statements that present fairly the data in
accordance with the Accounting Standards for Business Enterprises, and for designing, implementing and
maintaining the internal controls as the Management deems necessary to enable the preparation of financial
statements free from material misstatement, whether due to fraud or error.
In the preparation of the financial statements, the Management is responsible for assessing Hundsun
Technologies' continuing operating capacity, disclosing matters relating to continuing operations (if
applicable) and applying the continuing operating assumptions unless there are plans to liquidate Hundsun
Technologies and cease to operate or no realistic alternative is available.
Those charged with governance of Hundsun Technologies (hereinafter referred to as the Governance)
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2021 Annual Report
is responsible for overseeing the financial reporting process of Hundsun Technologies.
VI. AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report
containing our opinion. Reasonable assurance is a high level of assurance, but it does not guarantee that an
audit conducted in accordance with auditing standards can always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are generally considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users made on
the basis of these financial statements.
We exercised professional judgment and maintain professional skepticism in carrying out our audit in
accordance with the Auditing Standards. We also carried out the following works:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain sufficient and
appropriate audit evidence to provide a basis for our audit. The risk of failing to detect a material
misstatement due to fraud is higher than that due to error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or overriding internal controls.
(II) Understand the internal controls related to the audit to formulate appropriate audit procedures.
(III) Evaluate the appropriateness of accounting policies adopted by and the reasonableness of
accounting estimates and related disclosures made by the Management.
(IV) Conclude on the appropriateness of the continuing operating assumptions made by the
Management and, based on the audit evidence obtained, on whether a material uncertainty exists related to
events or conditions that may cast significant doubt on Hundsun Technologies' ability to continue as a
going concern. If we conclude that a material uncertainty exists, according to the auditing standards, we are
required to draw the attention of statement users to the relevant disclosures in the financial statements in
our auditor's report or, if such disclosures are inadequate, we should express our non-unqualified opinion.
Our conclusions are based on the audit evidence obtained as of the date of our auditor's report. However,
future events or conditions may cause Hundsun Technologies to cease.
(V) Evaluate the overall presentation, structure and content of the financial statements, and also
whether the financial statements fairly present the underlying transactions and events.
(VI) Obtain sufficient and appropriate audit evidence about the financial information of the entities or
operations in Hundsun Technologies to express our audit opinion on the financial statements. We are
responsible for directing, supervising and performing the group audit and accept full responsibility for the
audit opinion.
We communicate with the Governance regarding, among other matters, the planned scope and
schedule of the audit and significant audit findings, including any internal control deficiencies of concern
that we found during our audit.
We also provide the Governance with a statement regarding compliance with ethical requirements
related to independence and communicate with the Governance about all relationships and other matters
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2021 Annual Report
that could reasonably be considered to affect our independence, as well as related precautions (if
applicable).
Among matters about which we had communicated with the Governance, we determined which
matters are the most important to audit the current period's financial statements, therefore, such matters are
key audit matters. We described these matters in our auditor's report, except in those cases where public
disclosure of such matters is prohibited by law or regulation, or in those rare cases where we determine not
to communicate with the Governance about a matter in our auditor's report if we reasonably expect that the
adverse consequences of communicating about such matter in our auditor's report would outweigh the
benefits in the public interest.
Pan-China Certified Public Accountants LLP CPA of China:
(Engagement Partner)
Hangzhou, China CPA of China:
March 29, 2022
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2021 Annual Report
II. FINANCIAL STATEMENTS
Consolidated Balance Sheet
December 31, 2021
Prepared by: Hundsun Technologies Inc.
Unit: Yuan Currency: RMB
Item Notes December 31, 2021 December 31, 2020
Current assets:
Cash and bank balances VII.1 1,727,704,846.60 1,374,842,591.24
Balances with clearing companies
Placements with banks and other financial institutions
Held-for-trading financial assets VII.2 1,991,523,094.74 2,723,350,172.04
Derivative financial assets
Bills receivable VII.4 636,600.00 194,609.13
Accounts receivable VII.5 762,916,207.50 523,273,534.51
Receivables financing
Prepayments VII.7 11,856,440.88 9,007,186.01
Premium receivables
Reinsurance account receivables
Deposit receivables from reinsurance contracts
Other receivables VII.8 30,706,405.33 27,411,805.19
Including: Interest receivables
Dividend receivables
Financial assets held under resale agreements
Inventories VII.9 466,992,190.19 351,690,935.90
Contract assets VII.10 33,668,468.37 34,180,843.24
Held-for-sale assets
Current portion of non-current assets
Other current assets VII.13 8,672,321.71 10,342,520.82
Total current assets 5,034,676,575.32 5,054,294,198.08
Non-current assets:
Loans and advances to customers
Debt investments
Other debt investments VII.15 65,681,018.23 83,845,382.74
Long-term receivables
Long-term equity investments VII.17 1,110,946,777.17 738,974,733.43
Other equity instrument investments
Other non-current financial assets VII.19 2,981,720,276.86 2,229,463,162.16
Investment properties VII.20 127,524,968.93 111,411,248.79
Fixed assets VII.21 1,679,515,491.95 472,506,719.88
Construction in progress VII.22 26,357,513.90 732,254,664.28
Productive biological assets
Oil and gas assets
Right-of-use assets VII.25 32,023,105.44
Intangible assets VII.26 376,460,020.43 161,012,651.89
Development expenditure
Goodwill VII.28 367,492,126.98 312,158,890.50
Long-term prepaid expense VII.29 1,257,776.43 3,370,336.31
Deferred income tax assets VII.30 163,436,491.51 71,410,701.28
Other non-current assets VII.31 112,816,169.61 441,999.00
Total non-current assets 7,045,231,737.44 4,916,850,490.26
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2021 Annual Report
Total assets 12,079,908,312.76 9,971,144,688.34
Current liabilities:
Short-term borrowings VII.32 178,028,314.11 46,718,265.90
Borrowings from the central bank
Placements from banks and other financial institutions
Held-for-trading financial liabilities
Derivative financial liabilities
Bills payable
Accounts payable VII.36 503,758,715.18 192,172,938.77
Advances from customers VII.37 2,283,715.48 1,491,017.37
Contract liabilities VII.38 3,203,414,609.69 3,107,149,920.44
Financial assets sold under repurchase agreements
Deposits from banks and other financial institutions
Customer deposits for securities trading
Customer deposits for securities underwriting
Employee compensation payable VII.39 774,996,501.71 647,448,189.72
Taxes payable VII.40 196,064,942.41 187,413,250.40
Other payables VII.41 170,804,176.79 128,629,520.86
Including: Interest payable
Dividends payable
Handling charges and commission payable
Reinsurance accounts payable
Held-for-sale liabilities
Current portion of non-current liabilities VII.43 154,496,614.61
Other current liabilities VII.44 305,258,151.46 305,258,151.46
Total current liabilities 5,489,105,741.44 4,616,281,254.92
Non-current liabilities:
Deposits for insurance contracts
Long-term borrowings VII.45 228,454,065.70 206,090,358.06
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities VII.47 23,298,204.05
Long-term accounts payable
Long-term employee remuneration payable
Provision for liabilities VII.50 17,316,775.77 12,147,826.09
Deferred income VII.51 38,210,906.29 56,385,848.47
Deferred income tax liabilities VII.30 68,201,491.05 42,478,589.07
Other non-current liabilities
Total non-current liabilities 375,481,442.86 317,102,621.69
Total liabilities 5,864,587,184.30 4,933,383,876.61
Owners' equity (or shareholders' equity):
Paid-up capital (or share capital) VII.53 1,461,560,480.00 1,044,090,754.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve VII.55 272,730,547.65 545,385,635.52
Less: Treasury stocks VII.56 39,676,146.96 117,376,268.28
Other comprehensive income VII.57 -19,063,233.86 -7,643,663.35
Special reserves
Surplus reserves VII.59 322,432,343.76 195,947,299.77
General risk reserve
Undistributed profits VII.60 3,697,047,060.46 2,893,625,565.93
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2021 Annual Report
Total equity attributable to owners (or shareholders) of
5,695,031,051.05 4,554,029,323.59
the parent company
Minority interests 520,290,077.41 483,731,488.14
Total owners' equity (or shareholders' equity) 6,215,321,128.46 5,037,760,811.73
Total liabilities and owners' equity (or
12,079,908,312.76 9,971,144,688.34
shareholders' equity)
Chairman of the Company: Peng Zhenggang Financial Controller: Yao Manying Head of the Accounting Firm: Yao
Manying
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2021 Annual Report
Balance Sheet of Parent Company
December 31, 2021
Prepared by: Hundsun Technologies Inc.
Unit: Yuan Currency: RMB
Item Notes December 31, 2021 December 31, 2020
Current assets:
Cash and bank balances 908,419,084.93 628,498,594.80
Held-for-trading financial assets 1,012,890,244.13 1,833,907,601.08
Derivative financial assets
Bills receivable 636,600.00 194,609.13
Accounts receivable XVII.1 557,715,998.70 427,331,540.43
Receivables financing
Prepayments 8,933,838.72 30,871,016.72
Other receivables XVII.2 66,212,431.56 43,769,249.04
Including: Interest receivables
Dividend receivables
Inventories 427,163,074.94 325,151,655.77
Contract assets 27,841,320.54 31,553,316.68
Held-for-sale assets
Current portion of non-current assets
Other current assets 5,647,177.34
Total current assets 3,009,812,593.52 3,326,924,760.99
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments XVII.3 3,230,955,642.19 2,419,704,939.59
Other equity instrument investments
Other non-current financial assets 2,740,664,539.46 2,050,871,495.84
Investment properties 7,736,779.02 8,184,029.66
Fixed assets 1,354,919,216.28 399,589,221.27
Construction in progress 25,139,995.40 456,818,577.02
Productive biological assets
Oil and gas assets
Right-of-use assets 24,756,019.73
Intangible assets 237,628,836.54 146,164,296.77
Development expenditure
Goodwill
Long-term prepaid expense 131,567.10 2,380,469.45
Deferred income tax assets 187,252,839.81 91,506,512.97
Other non-current assets 441,999.00
Total non-current assets 7,809,185,435.53 5,575,661,541.57
Total assets 10,818,998,029.05 8,902,586,302.56
Current liabilities:
Short-term borrowings 150,862,784.72
Held-for-trading financial liabilities
Derivative financial liabilities
Bills payable
Accounts payable 528,701,393.13 197,656,300.15
Advances from customers
Contract liabilities 2,844,015,508.61 2,795,258,134.72
Employee compensation payable 606,636,561.56 515,782,981.89
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2021 Annual Report
Taxes payable 146,989,441.53 152,414,189.43
Other payables 89,229,544.02 83,908,718.54
Including: Interest payable
Dividends payable
Held-for-sale liabilities
Current portion of non-current liabilities 149,878,491.45
Other current liabilities
Total current liabilities 4,516,313,725.02 3,745,020,324.73
Non-current liabilities:
Long-term borrowings 148,159,511.11 122,536,819.73
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 21,129,263.20
Long-term accounts payable
Long-term employee remuneration payable
Provision for liabilities 16,258,263.99 11,269,713.18
Deferred income 38,094,994.90 56,183,143.62
Deferred income tax liabilities 65,662,318.43 39,723,311.77
Other non-current liabilities
Total non-current liabilities 289,304,351.63 229,712,988.30
Total liabilities 4,805,618,076.65 3,974,733,313.03
Owners' equity (or shareholders' equity):
Paid-up capital (or share capital) 1,461,560,480.00 1,044,090,754.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 16,659,761.86 284,304,968.23
Less: Treasury stocks 39,676,146.96 117,376,268.28
Other comprehensive income 346,075.73 346,075.73
Special reserves
Surplus reserve 671,500,924.20 533,516,976.26
Undistributed profits 3,902,988,857.57 3,182,970,483.59
Total owners' equity (or shareholders' equity) 6,013,379,952.40 4,927,852,989.53
Total liabilities and owners' equity (or
10,818,998,029.05 8,902,586,302.56
shareholders' equity)
Chairman of the Company: Peng Zhenggang Financial Controller: Yao Manying Head of the Accounting Firm: Yao
Manying
83 / 243
2021 Annual Report
Consolidated Income Statement
January to December 2021
Unit: Yuan Currency: RMB
Item Notes 2021 2020
I. Total revenue 5,496,578,624.88 4,172,645,156.56
Including: Revenue VII.61 5,496,578,624.88 4,172,645,156.56
Interest income
Premiums earned
Handling charges and commission income
II. Total cost of sales 4,922,774,631.17 3,392,825,437.84
Including: Cost of sales VII.61 1,484,602,486.66 955,906,825.10
Interest expenses
Handling charges and commission expenses
Payments on surrender
Net claim expenses
Net provision for insurance contract reserves
Policyholder dividend expenses
Reinsurance costs
Taxes and surcharges VII.62 60,393,388.78 54,504,894.10
Selling and distribution expenses VII.63 557,934,967.43 353,806,789.89
General and administrative expenses VII.64 681,453,467.57 539,490,612.30
R&D expenses VII.65 2,139,296,366.07 1,496,058,838.32
Finance costs VII.66 -906,045.34 -6,942,521.87
Including: Interest expenses 10,507,675.01 2,855,157.07
Interest income -17,150,371.61 -11,939,357.58
Add: Other incomes VII.67 289,880,269.30 227,428,386.00
Investment income (loss denoted by "-") VII.68 275,837,269.79 584,205,393.33
Including: Share of results of associates and joint
91,328,055.87 10,473,834.46
ventures
Derecognition of income from financial
assets measured at amortized cost
Exchange gains (loss denoted by "-")
Gains from net exposure to hedging (loss denoted
by "-")
Gain from changes in fair value (loss expressed
VII.70 414,401,157.02 103,091,491.83
with "-")
Credit impairment Losses (loss denoted by "-") VII.71 -30,961,258.63 -15,087,185.55
Impairment of assets (loss denoted by "-") VII.72 -11,858,839.61 -239,011,710.38
Gains from the disposal of assets (loss to be listed
VII.73 -552,528.07 577,248.05
with “-”)
III. Operating profit (loss denoted by "-") 1,510,550,063.51 1,441,023,342.00
Add: Non-operating income VII.74 2,491,487.26 1,847,341.17
Less: Non-operating expenses VII.75 3,318,935.14 5,155,492.52
IV. Total profit (total loss denoted by "-") 1,509,722,615.63 1,437,715,190.65
Less: Income tax expenses VII.76 19,593,930.63 74,562,836.44
V. Net profit (net loss denoted by "-") 1,490,128,685.00 1,363,152,354.21
(I) Classified by the continuity of operations
1. Net profit from continuing operations (net loss
1,490,128,685.00 1,363,152,354.21
denoted by "-")
2. Net profit from discontinued operations (net loss
denoted by "-")
(II) Classified by attribution of ownership
1. Net profit attributable to shareholders of the
1,463,538,930.14 1,321,735,522.48
parent company (net loss denoted by "-")
2. Profit and loss of minority shareholders (net loss 26,589,754.86 41,416,831.73
84 / 243
2021 Annual Report
denoted by "-")
VI. Other comprehensive income, net of tax VII.77 -13,786,289.23 -18,814,662.97
(I) Other comprehensive income attributable to owners
-11,419,570.51 -17,307,209.29
of the parent company, net of tax
1. Other comprehensive income not to be
subsequently reclassified to profit or loss
(1) Amount of change arising from remeasurement of
the defined benefit plan
(2) Other comprehensive income not to be reclassified
to profit or loss under the equity method
(3) Changes in fair value of other equity instrument
investments
(4) Changes in fair value attributable to changes in
credit risk
2. Other comprehensive income to be subsequently
-11,419,570.51 -17,307,209.29
reclassified to profit or loss
(1) Other comprehensive income to be reclassified to
profit or loss under the equity method
(2) Changes in fair value of other debt investments -25,707.87 557,500.45
(3) Amount of financial assets reclassified and charged
to other comprehensive incomes
(4) Credit loss impairment of other debt investments
(5) Cash flow hedge reserve
(6) Foreign currency translation difference in the -11,393,862.64
-17,864,709.74
statements
(7) Others
(II) Other comprehensive income attributable to
-2,366,718.72 -1,507,453.68
minority shareholders, net of tax
VII. Total comprehensive income 1,476,342,395.77 1,344,337,691.24
(I) Total comprehensive income attributable to the
1,452,119,359.63 1,304,428,313.19
owners of the parent company
(II) Total comprehensive income attributable to
24,223,036.14 39,909,378.05
minority shareholders
VIII. Earnings per share:
(I) Basic earnings per share (RMB/share) 1.01 0.90
(II) Diluted earnings per share (RMB/share) 1.01 0.90
Chairman of the Company: Peng Zhenggang Financial Controller: Yao Manying Head of the Accounting Firm: Yao
Manying
85 / 243
2021 Annual Report
Income Statement of the Parent Company
January to December 2021
Unit: Yuan Currency: RMB
Item Notes 2021 2020
I. Revenue XVII.4 4,540,414,080.82 3,479,724,560.56
Less: Cost of sales XVII.4 1,281,192,903.55 804,381,909.99
Taxes and surcharges 48,187,613.26 44,090,921.30
Selling and distribution expenses 401,894,792.45 256,336,398.72
General and administrative expenses 502,017,276.69 424,746,766.49
R&D expenses XVII.6 1,811,641,736.55 1,262,846,986.40
Finance costs 2,316,928.82 -8,575,348.42
Including: Interest expenses 9,835,206.38 436,333.33
Interest income -13,406,287.93 -9,511,502.38
Add: Other incomes 271,497,389.32 202,214,267.06
Investment income (loss denoted by "-") XVII.5 265,504,833.35 322,590,071.86
Including: Share of results of associates and joint
90,518,351.65 10,437,512.44
ventures
Derecognition of income from financial
assets measured at amortized cost
Gains from net exposure to hedging (loss denoted
by "-")
Gain from changes in fair value (loss expressed
419,730,141.73 99,518,213.82
with "-")
Credit impairment Losses (loss denoted by "-") -20,000,010.63 -8,697,979.82
Impairment of assets (loss denoted by "-") -52,631,912.66 -236,331,294.32
Gains from the disposal of assets (loss to be listed
-517,980.17 568,970.50
with “-”)
II. Operating profits (loss denoted by "-") 1,376,745,290.44 1,075,759,175.18
Add: Non-operating income 1,727,963.18 1,703,213.73
Less: Non-operating expenses 2,578,075.83 4,815,965.78
III. Total profit (total loss denoted by "-") 1,375,895,177.79 1,072,646,423.13
Less: Income tax expenses -3,989,324.37 48,636,564.95
IV. Net profit (net loss denoted by "-") 1,379,884,502.16 1,024,009,858.18
(I) Net profit from continuing operations (net loss
1,379,884,502.16 1,024,009,858.18
denoted by "-")
(II) Net profit from discontinued operations (net loss
denoted by "-")
V. Other comprehensive income, net of tax
(I) Other comprehensive income not to be subsequently
reclassified to profit or loss
1. Amount of change arising from remeasurement of
the defined benefit plan
2. Other comprehensive income not to be reclassified
to profit or loss under the equity method
3. Changes in fair value of other equity instruments
investments
4. Changes in fair value attributable to changes in
credit risk
(II) Other comprehensive income to be subsequently
reclassified to profit or loss
1. Other comprehensive income to be reclassified to
profit or loss under the equity method
2. Changes in fair value of other debt investment
3. Amount of financial assets reclassified and
charged to other comprehensive income
4. Credit loss impairment of other debt investments
86 / 243
2021 Annual Report
5. Cash flow hedge reserve
6. Foreign currency translation difference in the
statements
7. Others
VI. Total comprehensive income 1,379,884,502.16 1,024,009,858.18
VII. Earnings per share:
(I) Basic earnings per share (RMB/share)
(II) Diluted earnings per share (RMB/share)
Chairman of the Company: Peng Zhenggang Financial Controller: Yao Manying Head of the Accounting Firm: Yao
Manying
87 / 243
2021 Annual Report
Consolidated Cash Flow Statement
January to December 2021
Unit: Yuan Currency: RMB
Item Notes 2021 2020
I. Cash flows from operating activities:
Cash received from sales of goods and provision of
5,844,844,692.26 5,027,045,459.45
services
Net increase in deposits from customers and
placements from banks and other financial institutions
Net increase in borrowings from the central bank
Net increase in placements from other financial
institutions
Cash received from premiums of original insurance
contracts
Net cash received from reinsurance operations
Net increase in policyholders' deposits and
investments
Cash received from interest, handling charges and
commission
Net increase in placements from banks and other
financial institutions
Net increase in capital for repurchase
Net cash received from securities trading agency
services
Tax rebate received 227,091,597.48 183,938,205.09
Cash received from other operating activities VII.78 121,077,790.55 139,374,771.62
Sub-total of cash inflows from operating activities 6,193,014,080.29 5,350,358,436.16
Cash paid for goods and services 429,996,599.28 264,686,930.17
Net increase in loans and advances to customers
Net increase in deposits in the central bank and other
financial institutions
Cash paid for claims on original insurance contracts
Net increase in placements with banks and other
financial institutions
Cash paid for interest, handling charges and
commission
Cash paid for policyholders' dividend
Cash paid to and on behalf of employees 3,523,292,673.44 2,407,934,548.23
Cash paid for taxes and dues 573,426,098.40 513,810,513.17
Cash paid for other operating activities VII.78 709,509,403.03 766,024,174.18
Sub-total of cash outflows for operating activities 5,236,224,774.15 3,952,456,165.75
Net cash flows from operating activities 956,789,306.14 1,397,902,270.41
II. Cash flows from investing activities:
Cash received from disposal of investments 5,671,375,826.88 6,100,880,297.34
Cash received from investment income 91,272,753.60 107,965,090.44
Net cash received from the disposal of fixed assets,
335,745.57 876,150.00
intangible assets and other long-term assets
Net cash received from the disposal of subsidiaries and
121.84
other operating entities
Cash received from other investment activities VII.78 2,250,490.08
Sub-total of cash inflows from investing activities 5,762,984,326.05 6,211,972,149.70
Cash paid for acquisition and construction of fixed
684,126,691.10 482,188,248.36
assets, intangible assets and other long-term assets
Cash paid for investments 5,354,401,853.32 6,418,659,009.01
Net increase in pledged loans
Net cash paid for acquisition of subsidiaries and other 147,881,750.76 101,506,128.82
88 / 243
2021 Annual Report
operating entities
Cash paid for other investing activities VII.78 924,157.53
Sub-total of cash outflows for investing activities 6,186,410,295.18 7,003,277,543.72
Net cash flows from operating activities -423,425,969.13 -791,305,394.02
III. Cash flow from financing activities:
Cash received from capital contributions 104,148,194.52 135,304,016.20
Including: Cash received by subsidiaries from capital
92,113,044.45 135,304,016.20
contributions of minority shareholders
Cash received from borrowings 1,457,773,551.92 388,162,654.08
Cash received from other financing activities VII.78 361,621,876.00
Sub-total of cash inflows from financing activities 1,923,543,622.44 523,466,670.28
Cash paid for repayment of debts 1,154,950,725.42 354,029,904.68
Cash paid for distribution of dividends or profits or
165,693,795.60 500,966,359.80
settlement of interest
Including: Dividends and profits paid by the
40,942,500.00 66,441,700.00
subsidiaries to non-controlling interests
Cash paid for other financing activities VII.78 776,982,025.33 219,267,574.48
Sub-total of cash outflows for financing activities 2,097,626,546.35 1,074,263,838.96
Net cash flows from financing activities -174,082,923.91 -550,797,168.68
IV. Effect of changes in exchange rates on cash and
-5,874,876.16 -3,702,909.99
cash equivalents
V. Net increase in cash and cash equivalents 353,405,536.94 52,096,797.72
Add: Opening balance of cash and cash equivalents 1,370,028,554.66 1,317,931,756.94
VI. Closing balance of cash and cash equivalents 1,723,434,091.60 1,370,028,554.66
Chairman of the Company: Peng Zhenggang Financial Controller: Yao Manying Head of the Accounting Firm: Yao
Manying
89 / 243
2021 Annual Report
Cash Flow Statement of the Parent Company
January to December 2021
Unit: Yuan Currency: RMB
Item Notes 2021 2020
I. Cash flows from operating activities:
Cash received from sales of goods and provision of
4,888,058,491.22 4,278,115,680.39
services
Tax rebate received 215,981,764.66 174,769,339.66
Cash received from other operating activities 182,379,629.26 196,124,272.73
Sub-total of cash inflows from operating activities 5,286,419,885.14 4,649,009,292.78
Cash paid for goods and services 712,654,259.84 464,291,427.61
Cash paid to and on behalf of employees 2,507,969,694.70 1,810,974,944.77
Cash paid for taxes and dues 474,127,303.70 443,681,780.76
Cash paid for other operating activities 687,191,064.00 708,261,496.85
Sub-total of cash outflows for operating activities 4,381,942,322.24 3,427,209,649.99
Net cash flows from operating activities 904,477,562.90 1,221,799,642.79
II. Cash flows from investing activities:
Cash received from disposal of investments 3,446,679,775.75 4,508,170,797.85
Cash received from investment income 125,221,208.23 193,176,895.95
Net cash received from the disposal of fixed assets,
281,848.77 851,150.00
intangible assets and other long-term assets
Net cash received from the disposal of subsidiaries and
other operating entities
Cash received from other investment activities 189,562,371.40 7,140,331.25
Sub-total of cash inflows from investing activities 3,761,745,204.15 4,709,339,175.05
Cash paid for acquisition and construction of fixed
474,359,557.11 232,296,921.00
assets, intangible assets and other long-term assets
Cash paid for investments 3,579,910,798.63 5,020,267,961.11
Net cash paid for acquisition of subsidiaries and other
operating entities
Cash paid for other investing activities 206,222,100.00 6,924,157.53
Sub-total of cash outflows for investing activities 4,260,492,455.74 5,259,489,039.64
Net cash flows from operating activities -498,747,251.59 -550,149,864.59
III. Cash flow from financing activities:
Cash received from capital contributions
Cash received from borrowings 1,338,000,000.00 246,000,000.00
Cash received from other financing activities 561,621,876.00
Sub-total of cash inflows from financing activities 1,899,621,876.00 246,000,000.00
Cash paid for repayment of debts 1,016,260,000.00 211,600,000.00
Cash paid for distribution of dividends or profits or
123,094,675.57 431,976,856.57
settlement of interest
Cash paid for other financing activities 885,804,607.30 117,376,268.28
Sub-total of cash outflows for financing activities 2,025,159,282.87 760,953,124.85
Net cash flows from financing activities -125,537,406.87 -514,953,124.85
IV. Effect of changes in exchange rates on cash and
-265,047.73 -225,026.89
cash equivalents
V. Net increase in cash and cash equivalents 279,927,856.71 156,471,626.46
Add: Opening balance of cash and cash equivalents 625,673,073.22 469,201,446.76
VI. Closing balance of cash and cash equivalents 905,600,929.93 625,673,073.22
Chairman of the Company: Peng Zhenggang Financial Controller: Yao Manying Head of the Accounting
Firm: Yao Manying
90 / 243
2021 Annual Report
Consolidated Statement of Retained Earnings
January to December 2021
Unit: Yuan Currency: RMB
2021
Owners' equity attributable to the parent company
Item Minority Total owners'
Other equity instruments Other General interests equity
Paid-up capital (or Less: Treasury Special Undistributed
Capital reserve comprehensive Surplus reserve risk Others Sub-total
share capital) Preferred Perpetual stocks reserves profits
Others income reserve
shares bonds
I. Closing balance of
1,044,090,754.00 545,385,635.52 117,376,268.28 -7,643,663.35 195,947,299.77 2,893,625,565.93 4,554,029,323.59 483,731,488.14 5,037,760,811.73
the previous year
Add: Changes in
-4,502.28 -291,827.99 -296,330.27 -133,878.26 -430,208.53
accounting policies
Correction of
prior period errors
Business
combination under
common control
Others
II. Opening balance
1,044,090,754.00 545,385,635.52 117,376,268.28 -7,643,663.35 195,942,797.49 2,893,333,737.94 4,553,732,993.32 483,597,609.88 5,037,330,603.20
of the current year
III.
Increases/decreases in
the current period 417,469,726.00 -272,655,087.87 -77,700,121.32 -11,419,570.51 126,489,546.27 803,713,322.52 1,141,298,057.73 36,692,467.53 1,177,990,525.26
(decreases denoted by
"-")
(I) Total
comprehensive -11,419,570.51 1,463,538,930.14 1,452,119,359.63 24,223,036.14 1,476,342,395.77
income
(II) Capital
contributed and -272,655,087.87 -77,700,121.32 -11,498,903.95 -206,453,870.50 53,411,931.39 -153,041,939.11
reduced by owners
1. Ordinary shares
28,188,068.18 28,188,068.18
contributed by owners
2. Capital contributed
by the holders of
other equity
instruments
3. Amount of
share-based payments
-289,923,619.47 -77,700,121.32 -212,223,498.15 -212,223,498.15
charged to owners'
equity
4. Others 17,268,531.60 -11,498,903.95 5,769,627.65 25,223,863.21 30,993,490.86
(III) Profit
417,469,726.00 137,988,450.22 -659,825,607.62 -104,367,431.40 -40,942,500.00 -145,309,931.40
distribution
1. Appropriation to
137,988,450.22 -137,988,450.22
surplus reserve
91 / 243
2021 Annual Report
2. Appropriation to
general risk provision
3. Distribution to
owners (or 417,469,726.00 -521,837,157.40 -104,367,431.40 -40,942,500.00 -145,309,931.40
shareholders)
4. Others
(IV) Internal transfers
of owners' equity
1. Capital (or share
capital) transferred
from capital reserve
2. Capital (or share
capital) transferred
from surplus reserve
3. Recovery of losses
by surplus reserve
4. Retained earnings
transferred from
changes in defined
benefit plans
5. Retained earnings
transferred from other
comprehensive
income
6. Others
(V) Special reserve
1. Appropriation in
the current period
2. Utilized in the
current period
(VI) Others
IV. Closing balance
1,461,560,480.00 272,730,547.65 39,676,146.96 -19,063,233.86 322,432,343.76 3,697,047,060.46 5,695,031,051.05 520,290,077.41 6,215,321,128.46
in the current period
92 / 243
2021 Annual Report
2020
Owners' equity attributable to the parent company
Item Total owners'
Other equity instruments Minority interests
Other General equity
Paid-up capital (or Less: Treasury Special Undistributed
Capital reserve comprehensive Surplus reserve risk Others Sub-total
share capital) Preferred Perpetual stocks reserves profits
Others income reserve
shares bonds
I. Closing balance of
803,146,734.00 472,118,644.41 9,663,545.94 186,920,340.97 3,007,114,120.04 4,478,963,385.36 414,413,594.24 4,893,376,979.60
the previous year
Add: Changes in
-72,096,457.53 -666,211,301.75 -738,307,759.28 -10,682,109.25 -748,989,868.53
accounting policies
Correction of
prior period errors
Business
combination under
common control
Others
II. Opening balance of
803,146,734.00 472,118,644.41 9,663,545.94 114,823,883.44 2,340,902,818.29 3,740,655,626.08 403,731,484.99 4,144,387,111.07
the current year
III.
Increases/decreases in
the current period 240,944,020.00 73,266,991.11 117,376,268.28 -17,307,209.29 81,123,416.33 552,722,747.64 813,373,697.51 80,000,003.15 893,373,700.66
(decreases denoted by
"-")
(I) Total
comprehensive -17,307,209.29 1,321,735,522.48 1,304,428,313.19 39,909,378.05 1,344,337,691.24
income
(II) Capital
contributed and 73,266,991.11 117,376,268.28 -21,277,569.49 -65,386,846.66 106,532,325.10 41,145,478.44
reduced by owners
1. Ordinary shares
75,703,547.00 75,703,547.00
contributed by owners
2. Capital contributed
by the holders of
other equity
instruments
3. Amount of
share-based payments
117,376,268.28 -117,376,268.28 -117,376,268.28
charged to owners'
equity
4. Others 73,266,991.11 -21,277,569.49 51,989,421.62 30,828,778.10 82,818,199.72
(III) Profit
240,944,020.00 102,400,985.82 -769,012,774.84 -425,667,769.02 -66,441,700.00 -492,109,469.02
distribution
1. Appropriation to
102,400,985.82 -102,400,985.82
surplus reserve
2. Appropriation to
general risk provision
3. Distribution to 240,944,020.00 -666,611,789.02 -425,667,769.02 -66,441,700.00 -492,109,469.02
owners (or
93 / 243
2021 Annual Report
shareholders)
4. Others
(IV) Internal transfers
of owners' equity
1. Capital (or share
capital) transferred
from capital reserve
2. Capital (or share
capital) transferred
from surplus reserve
3. Recovery of losses
by surplus reserve
4. Retained earnings
transferred from
changes in defined
benefit plans
5. Retained earnings
transferred from other
comprehensive
income
6. Others
(V) Special reserve
1. Appropriation in
the current period
2. Utilized in the
current period
(VI) Others
IV. Closing balance in
1,044,090,754.00 545,385,635.52 117,376,268.28 -7,643,663.35 195,947,299.77 2,893,625,565.93 4,554,029,323.59 483,731,488.14 5,037,760,811.73
the current period
Chairman of the Company: Peng Zhenggang Financial Controller: Yao Manying Head of the Accounting Firm: Yao Manying
94 / 243
2021 Annual Report
Statement of Retained Earnings of the Parent Company
January to December 2021
Unit: Yuan Currency: RMB
2021
Other
Less: Treasury Special
Other equity instruments Capital reserve comprehensive Surplus reserve
Item Paid-up capital stocks reserves
income Undistributed profits Total owners' equity
(or share capital)
Preferred Perpetual
Others
shares bonds
I. Closing balance of the
1,044,090,754.00 284,304,968.23 117,376,268.28 346,075.73 533,516,976.26 3,182,970,483.59 4,927,852,989.53
previous year
Add: Changes in
-4,502.28 -40,520.56 -45,022.84
accounting policies
Correction of prior
period errors
Others
II. Opening balance of
1,044,090,754.00 284,304,968.23 117,376,268.28 346,075.73 533,512,473.98 3,182,929,963.03 4,927,807,966.69
the current year
III. Increases/decreases
in the current period
417,469,726.00 -267,645,206.37 -77,700,121.32 137,988,450.22 720,058,894.54 1,085,571,985.71
(decreases denoted by
"-")
(I) Total comprehensive
1,379,884,502.16 1,379,884,502.16
income
(II) Capital contributed
-267,645,206.37 -77,700,121.32 -189,945,085.05
and reduced by owners
1. Ordinary shares
contributed by owners
2. Capital contributed by
the holders of other
equity instruments
3. Amount of
share-based payments
-289,477,689.92 -77,700,121.32 -211,777,568.60
charged to owners'
equity
4. Others 21,832,483.55 21,832,483.55
(III) Profit distribution 417,469,726.00 137,988,450.22 -659,825,607.62 -104,367,431.40
1. Appropriation to
137,988,450.22 -137,988,450.22
surplus reserve
2. Distribution to
417,469,726.00 -521,837,157.40 -104,367,431.40
owners (or shareholders)
3. Others
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2021 Annual Report
(IV) Internal transfers of
owners' equity
1. Capital (or share
capital) transferred from
capital reserve
2. Capital (or share
capital) transferred from
surplus reserve
3. Recovery of losses by
surplus reserve
4. Retained earnings
transferred from
changes in defined
benefit plans
5. Retained earnings
transferred from other
comprehensive income
6. Others
(V) Special reserve
1. Appropriation in the
current period
2. Utilized in the current
period
(VI) Others
IV. Closing balance in
1,461,560,480.00 16,659,761.86 39,676,146.96 346,075.73 671,500,924.20 3,902,988,857.57 6,013,379,952.40
the current period
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2021 Annual Report
2020
Other equity instruments Other
Item Paid-up capital Less: Treasury Special
Preferred Perpetual Capital reserve comprehensive Surplus reserve Undistributed profits Total owners' equity
(or share capital) Others stocks reserves
shares bonds income
I. Closing balance of
803,146,734.00 245,949,078.60 346,075.73 503,212,447.97 3,576,841,517.98 5,129,495,854.28
the previous year
Add: Changes in
-72,096,457.53 -648,868,117.73 -720,964,575.26
accounting policies
Correction of prior
period errors
Others
II. Opening balance of
803,146,734.00 245,949,078.60 346,075.73 431,115,990.44 2,927,973,400.25 4,408,531,279.02
the current year
III. Increases/decreases
in the current period
240,944,020.00 38,355,889.63 117,376,268.28 102,400,985.82 254,997,083.34 519,321,710.51
(decreases denoted by
"-")
(I) Total comprehensive
1,024,009,858.18 1,024,009,858.18
income
(II) Capital contributed
38,355,889.63 117,376,268.28 -79,020,378.65
and reduced by owners
1. Ordinary shares
contributed by owners
2. Capital contributed
by the holders of other
equity instruments
3. Amount of
share-based payments
117,376,268.28 -117,376,268.28
charged to owners'
equity
4. Others 38,355,889.63 38,355,889.63
(III) Profit distribution 240,944,020.00 102,400,985.82 -769,012,774.84 -425,667,769.02
1. Appropriation to
102,400,985.82 -102,400,985.82
surplus reserve
2. Distribution to
owners (or 240,944,020.00 -666,611,789.02 -425,667,769.02
shareholders)
3. Others
(IV) Internal transfers
of owners' equity
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2021 Annual Report
1. Capital (or share
capital) transferred
from capital reserve
2. Capital (or share
capital) transferred
from surplus reserve
3. Recovery of losses
by surplus reserve
4. Retained earnings
transferred from
changes in defined
benefit plans
5. Retained earnings
transferred from other
comprehensive income
6. Others
(V) Special reserve
1. Appropriation in the
current period
2. Utilized in the
current period
(VI) Others
IV. Closing balance in
1,044,090,754.00 284,304,968.23 117,376,268.28 346,075.73 533,516,976.26 3,182,970,483.59 4,927,852,989.53
the current period
Chairman of the Company: Peng Zhenggang Financial Controller: Yao Manying Head of the Accounting Firm: Yao Manying
98 / 243
2021 Annual Report
III. GENERAL INFORMATION OF THE COMPANY
1. Company Profile
√Applicable □Not Applicable
Hundsun Technologies Inc. (hereafter referred to as the “Company”) is a joint-stock limited company
established by 15 individual shareholders, including Hangzhou Hundsun Electronics Group Co., Ltd.,
China National Investment & Guaranty Co., Ltd. and Huang Dacheng, on the basis of the original Hundsun
Technologies Inc., which was registered with the Industrial and Commercial Administration of Zhejiang
Province on December 13, 2000, with the approval of the Listing Affair Team of the People’s Government
of Zhejiang Province through the document (ZSS [2000] 48). The Company now holds a business license
with USCI: 913300002539329145, and the registered capital of RMB1,461,560,480 divided into a total of
1,461,560,480 shares (RMB1 for each share), all of which are outstanding shares without selling
restrictions. The Company's shares were listed on The Shanghai Stock Exchange on December 16, 2003.
The Company operates in the software and information technology service industry. The Company's
business covers technology development, consultancy, services and results transfer of computer software;
computer systems integration; design, contracting and installation of automation and control engineering;
sales of computers and accessories; production and sales of electronic equipment, communication
equipment, computer hardware and external devices; leases of self-owned premises; import and export
business. Main products or services provided by the Company cover development and sales of computer
software products and system integration for securities, finance, transportation and other industries; and
sales of computers and accessories.
The financial statements have been approved for publication at the 24th meeting of the Seventh Board
of the Company on March 29, 2022.
2. Scope of the Consolidated Financial Statements
√Applicable □Not Applicable
The subsidiaries included in the Company’s consolidated financial statements for the current period
are shown below, please refer to Notes VIII and IX to these financial statements for details.
S/N Full company name Abbreviation Remark
1 Hangzhou Hundsun Cloud Investment Holding Co., Ltd. Cloud Investment Subsidiary
Hundsun Science Subsidiary of Cloud
1-1 Hangzhou Hundsun Science Park Development Co., Ltd. [Note 1]
Park Investment
Subsidiary of Hundsun
1-1-1 Nanjing Hundsun Science Park Operation Management Co., Ltd. Nanjing Hundsun
Science Park
Quzhou Hundsun Science Park Operation Management Co., Ltd. Subsidiary of Hundsun
1-1-2 Quzhou Hundsun
[Note 2] Science Park
Shaoxing Keqiao Henghui Phoenix Science Park Operation Subsidiary of Hundsun
1-1-3 Shaoxing Henghui
Management Co., Ltd. Science Park
2 Wuxi Henghua Technology Development Co., Ltd. Wuxi Henghua Wholly-owned subsidiary
3 Hangzhou Hundsun Data Security Technology Co., Ltd. Data Security Subsidiary
4 Jinrui Software Technology (Hangzhou) Co., Ltd. Jinrui Software Wholly-owned subsidiary
5 Beijing Qiantang Hundsun Technology Co., Ltd. Beijing Qiantang Wholly-owned subsidiary
6 Shanghai Yirui Management Consulting Co., Ltd. Shanghai Yirui Subsidiary
7 Japan Hundsun Software Inc. Japan Hundsun Subsidiary
7-1 Hangzhou Beiying Technology Co., Ltd. Hangzhou Beiying Subsidiary of Japan
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2021 Annual Report
S/N Full company name Abbreviation Remark
Hundsun
Hundsun
8 Hundsun International Technologies Holding Limited International Subsidiary
Technologies
9 Hundsun Holdings Limited Hundsun Holdings Subsidiary
Subsidiary of Hundsun
9-1 Hundsun Ayers Technologies Limited Hundsun Ayers
Holdings
Ayers Technologies Subsidiary of Hundsun
9-2 Ayers Technologies(Singapore) Private Limited
(Singapore) Ayers
Subsidiary of Hundsun
9-3 Hundsun.Com Co., Limited Hundsun HK
Ayers
Subsidiary of Hundsun
9-4 Shenzhen Yungang Technology Co., Ltd. Shenzhen Yungang
Ayers
10 Shanghai Liming Technology Co., Ltd. Shanghai Liming Wholly-owned subsidiary
11 Shanghai Gildata Inc Shanghai Gildata Subsidiary
Subsidiary of Shanghai
11-1 Hangzhou Gildata Information Technology Co., Ltd. Hangzhou Gildata
Gildata
12 Hangzhou Yunhui Investment Management Co., Ltd. Hangzhou Yunhui Wholly-owned subsidiary
13 Hangzhou Cloudwing Network Technology Co., Ltd. Cloudwing Network Subsidiary
Subsidiary of Cloudwing
13-1 Hangzhou Hundsun Lirong Software Co., Ltd. Hundsun Lirong
Network
Securities
14 Hangzhou Securities Investment Network Technology Co., Ltd. Subsidiary
Investment Network
15 Hangzhou Cloudyee Network Technology Co., Ltd. Cloudyee Network Subsidiary
16 Hangzhou Yunyong Network Technology Co., Ltd. Yunyong Network Subsidiary
Cloudbroker
17 Hangzhou Cloudbroker Network Technology Co., Ltd. Subsidiary
Network
18 Hangzhou Yunlian Network Technology Co., Ltd. Yunlian Network Subsidiary
19 Hangzhou Shanshang Network Technology Co., Ltd. Shanshang Network Subsidiary
Subsidiary of Shanshang
19-1 Beijing Xinruanfu Information Technology Co., Ltd. [Note 3] Beijing Xinruanfu
Network
20 Hangzhou Yima Investment Management Co., Ltd. Hangzhou Yima Wholly-owned subsidiary
21 Hangzhou Hundsun Wengine Network Technology Co., Ltd. Wengine Network Subsidiary
Intercontinental
22 Hundsun Intercontinental Holdings (HK) Limited Wholly-owned subsidiary
Holdings
Subsidiary of
22-1 Hundsun Global Services Inc. Hundsun U.S.
Intercontinental Holdings
Subsidiary of
22-2 Chain Next Technologies Limited Chain Next
Intercontinental Holdings
Hundsun Subsidiary of
22-3 Hundsun International (PTC) Ltd
International Intercontinental Holdings
Guangdong Institute
23 Guangdong Institute of Financial Innovation Subsidiary
of Finance
24 Hangzhou Xinglu Equity Investment Partnership (L.P.) Hangzhou Xinglu Subsidiary
Business
25 Business Intelligence Info. Tech. (Hangzhou) Co., Ltd. Intelligence Subsidiary
(Hangzhou)
26 Shanghai Hunsun Shengtian Network Technology Co., Ltd. Shengtian Network Wholly-owned subsidiary
27 Hangzhou Zhigu Network Technology Co., Ltd. Zhigu Network Subsidiary
28 Zhejiang Jingteng Network Technology Co., Ltd. Jingteng Network Subsidiary
Wuxi Xinglu Tiancheng Investment Management Partnership
29 Wuxi Xinglu Subsidiary
(L.P.)
30 Hundsun IHS Markit China Technologies Co., Ltd. IHS Markit Subsidiary
IHS Markit (Hong
30-1 Hundsun IHS Markit China (Hong Kong) Technologies Limited Subsidiary of IHS Markit
Kong)
31 BusinessMatrix Software Technology Ltd. BusinessMatrix Subsidiary
32 Nanjing Xingcheng Equity Investment Partnership (L.P.) Nanjing Xingcheng Subsidiary
33 Shanghai Genus-Finance Information Technology Co., Ltd. Shanghai Genus Subsidiary
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2021 Annual Report
S/N Full company name Abbreviation Remark
Subsidiary of Shanghai
33-1 GenSys Technology (International) Limited GenSys Technology
Genus
34 Shanghai Dworld AI Tech Co., Ltd. Shanghai Dworld Subsidiary
Subsidiary of Shanghai
34-1 Changsha Dworld AI Technology Co., Ltd. Changsha Dworld
Dworld
35 Hundsun iBontal (Guangdong) Technology Co., Ltd. Hundsun iBontal Subsidiary
Zhejiang Xunchang Wendao Network Information Technology
36 Xunchang Wendao Subsidiary
Co., Ltd.
37 Nanjing Xingding Equity Investment Partnership (L.P.) Nanjing Xingding Subsidiary
[Note 1] Formerly known as Hangzhou Hundsun Baichuan Technology Co., Ltd.
[Note 2] Quzhou Hundsun completed the company cancellation procedures on September 15, 2021.
[Note 3] Beijing Xinruanfu completed the company cancellation procedures on September 15, 2021.
IV. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
1. Basis of Preparation
The financial statements of the Company are presented on a continuing operation basis.
2. Continuing Operation
√Applicable □Not Applicable
There were no events or circumstances that would give rise to material doubt about the Company's ability
to continue as a going concern during 12 months from the Reporting Period.
V. MAJOR ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
Notes to specific accounting policies and accounting estimates:
√Applicable □Not Applicable
Important Note: The Company has formulated specific accounting policies and accounting estimates for
transactions or events such as impairment of financial instruments, depreciation of fixed assets,
depreciation of right-to-use assets, amortization of intangible assets and recognition of income according to
the actual production and operation characteristics.
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company are prepared in accordance with the requirements of the
Accounting Standards for Business Enterprises, and truly and fully present the information such as the
financial position, business performance, changes in shareholders' equity and cash flows of the Company.
2. Accounting Period
The accounting year of the Company is from January 1 to December 31.
3. Operating Cycle
√Applicable □Not Applicable
The Company adopts 12 months to identify the current nature of assets and liabilities since the operating
cycle is too short for the Company's business.
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2021 Annual Report
4. Functional Currency
Renminbi ("RMB") is adopted by the Company as the functional currency.
The Company and its domestic subsidiaries adopt RMB as their functional currency, and its overseas
subsidiaries such as Japan Hundsun, Hundsun International Technologies, Hundsun Holdings, Hundsun
Ayers, Hundsun HK, Ayers Technologies (Singapore), Intercontinental Holdings, Hundsun U.S., Chain
Next, Hundsun International, Hundsun Holdings, IHS Markit (Hong Kong) and GenSys Technology, which
engaged in overseas operations, adopt the currency of their specific economic environments as their
functional currency.
5. Accounting Methods for Business Combination under and Not under Common Control
√Applicable □Not Applicable
1. Accounting method for business combination under common control
Assets and liabilities obtained by the Company in the business combination are recognized at their
carrying amounts at the combination date as recorded by the acquiree. The Company adjusts its capital
reserves by the difference between the carrying amount of the owners' equity in the acquiree accounted for
in the consolidated financial statements of the ultimate controlling party and the carrying amount of the
consideration paid for the business combination (or aggregate carrying amount of the shares issued). If the
balance of the capital reserve is insufficient for the written-off, the retained profits will be adjusted
accordingly.
2. Accounting method for business combination not under common control
Where the combination cost exceeds the fair value of the acquiree’s identifiable net assets on the
combination date in the business combination, the difference is recognized as goodwill. Where the
combination cost is less than the fair value of the acquiree’s identifiable net assets in the business
combination, the measurement of the fair value of various identifiable assets, liabilities and contingent
liabilities acquired from the acquirees and the combination cost will be reviewed first and the difference is
charged to the current profit or loss in the event the combination cost by the acquirer is still less than the
fair value of the acquiree's identifiable net assets in the business combination after review.
6. Preparation of Consolidated Financial Statements
√Applicable □Not Applicable
The parent company includes all subsidiaries under its control in the consolidation scope for
consolidated financial statements, which are prepared by the parent company pursuant to Accounting
Standards for Business Enterprises No. 33 - Consolidated Financial Statements based on the financial
statements of the parent company and its subsidiaries and other relevant information.
7. Classification of Joint Arrangement and Accounting Method for Joint Operation
√Applicable □Not Applicable
(1) A joint arrangement is divided into joint operation and joint venture.
(2) When the Company is a party of a joint operation, the following items associated with the interest
102 / 243
2021 Annual Report
share of the joint operation will be recognized:
1) the assets separately held and the assets jointly held according to the holding shares;
2) the liabilities separately assumed and the liabilities jointly assumed according to the holding
shares;
3) the revenue arising from the recognition of the share of the joint operation attributable to the
disposal company;
4) the revenue arising from the disposal of assets of the joint operation recognized according to the
holding shares of the Company;
5) the expenses recognized unilaterally and the expenses in the joint operation recognized according
to the holding shares.
8. Recognition Standards for Cash and Cash Equivalents
Cash equivalents represent the enterprises' short-term (generally maturing within three months from
the date of purchase) and highly liquid investments that are readily convertible to known amounts of cash,
and subject to an insignificant risk of changes in value.
9. Translation of Foreign Currency Operations and Foreign Currency Statements
√Applicable □Not Applicable
(1) Translation of foreign currency operations
Upon initial recognition, foreign currency transactions are translated into amounts in RMB at
exchange rates that approximate the spot exchange rates on the dates of transactions. On the balance sheet
date, foreign currency monetary items are translated at the spot exchange rate on the balance sheet date.
The translation differences arising from different exchange rates, except those relating to the principle of
and interests on the foreign currency borrowings for the acquisition, construction or production of assets
eligible for capitalization, are charged to the current profit or loss. Also on the balance sheet date, foreign
currency non-monetary items measured at historical cost continue to be translated at the rates that
approximate the spot exchange rates on the dates of transactions and it does not change its carrying amount
in RMB. Foreign currency non-monetary items measured at fair value are translated at the spot exchange
rate on the fair value recognition date. The differences arising from the above translations are charged to
the current profit or loss or other comprehensive income for the current period.
(2) Foreign currency translation in the statements
Assets and liabilities on the balance sheet are translated at the spot exchange rate on the balance sheet
date; owners' equity items except for "undistributed profits" are translated at the spot exchange rates on the
dates of transactions; income and expenses in the income statement are translated at the spot exchange rate
on the balance sheet date. The foreign currency translation differences in the statements arising from the
above translations are charged to other comprehensive income.
10. Financial Instruments
√Applicable □Not Applicable
(1) Classification of financial assets and financial liabilities
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2021 Annual Report
The Company classifies its financial assets into the following three categories at initial recognition: 1)
financial assets at amortized cost; 2) financial assets at fair value through other comprehensive income; 3)
financial assets at fair value through profit or loss (FVTPL).
The Company classifies its financial liabilities into the following four categories at initial recognition:
1) financial liabilities at FVTPL; 2) financial liabilities arising from the transfer of financial assets which
did not qualify for derecognition or continuing involvement in the transferred financial assets; 3) financial
guarantee contracts not classified as those specified in the above item 1) or 2), and loan commitment for
loans to be granted at an interest rate below the market rate which is not classified as those specified in the
above item 1); 4) financial liabilities at amortized cost.
(2) Recognition, measurement and derecognition of financial assets and financial liabilities
1) Basis of recognition and initial measurement method of financial assets and financial liabilities
The Company recognizes a financial asset or a financial liability when being one party to a financial
instrument contract. Financial assets or financial liabilities are initially recognized at fair value. For
financial assets or financial liabilities at FVTPL, the relevant transaction costs are directly recognized in
profit or loss for the period; for other financial assets or financial liabilities, the relevant transaction costs
are recognized in their initial recognition amount. However, accounts receivable without a significant
financing component initially recognized by the Company, or financing components not considered by the
Company in a contract valid for less than one year, are initially measured at transaction price as defined in
the Accounting Standards for Business Enterprises No.14 - Revenue.
2) Subsequent measurement of financial assets
① Financial assets at amortized cost
These financial assets are subsequently measured at amortized cost, using the effective interest method.
Any gains or losses on financial assets at amortized cost which are not part of the hedging relationship are
charged to the current profit or loss at derecognition, reclassification, amortization using the effective
interest method, or recognition of impairment.
② Debt instrument investments at fair value through other comprehensive income
These debt instrument investments are subsequently measured at fair value. Interest, impairment
losses or gains and exchange gains or losses calculated using the effective interest method are charged to
the current profit or loss, while other gains or losses are charged to other comprehensive income. At
derecognition, cumulative gains or losses previously charged to other comprehensive income are
transferred from other comprehensive income and charged to the current profit or loss.
③ Equity instrument investments at fair value through other comprehensive income
These equity instrument investments are subsequently measured at fair value. Dividends obtained
(excluding those obtained as investment costs recovered) are charged to the current profit or loss, while
other gains or losses are charged to other comprehensive income. At derecognition, cumulative gains or
losses previously charged to other comprehensive income are transferred from other comprehensive income
and charged to retained earnings.
④ Financial assets at FVTPL
These financial assets are subsequently measured at fair value, and any gains or losses therefrom
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2021 Annual Report
(including interest and dividend incomes) are charged to the current profit or loss unless such financial
assets are part of the hedging relationship
3) Subsequent measurement method of financial liabilities
① Financial liabilities at FVTPL
These financial liabilities include held-for-trading liabilities (including derivative instruments
classified as financial liabilities) and financial liabilities designated as at FVTPL. Such financial liabilities
are subsequently measured at fair value. Changes in the fair value of financial liabilities designated at
FVTPL as a result of changes in the Company’s own credit risk are charged to other comprehensive income
unless this approach creates or enlarges an accounting mismatch in the profit or loss. Other gains or losses
on such financial liabilities (including interest expenses and changes in fair value other than as a result of
changes in the Company’s own credit risk) are charged to the current profit or loss unless such financial
liabilities are part of the hedging relationship. At derecognition, cumulative gains or losses previously
charged to other comprehensive income are transferred from other comprehensive income and charged to
retained earnings.
② Financial liabilities arising from the transfer of financial assets which did not qualify for
derecognition or continuing involvement in the transferred financial assets are measured in accordance with
the Accounting Standards for Business Enterprises No.23 -Transfer of Financial Assets.
③ Financial guarantee contracts not classified as those specified in the above item ① or ② , and
loan commitment for loans to be granted at an interest rate below the market rate which is not classified as
those specified in the above item ①
After initial recognition, the amounts in the above two cases are subsequently measured at the higher
of I) provisions for losses determined according to requirements on the impairment of financial instruments;
II) the initially recognized amount less accumulated amortization determined according to Accounting
Standards for Business Enterprises No. 14 - Revenue.
④ Financial liabilities at amortized cost
These financial liabilities are measured at amortized cost, using the effective interest method. Any
gains or losses on financial liabilities at amortized cost and not part of any hedging relationship are charged
to the current profit or loss at derecognition, or amortization using the effective interest method.
4) Derecognition of financial assets and financial liabilities
① Financial assets are derecognized when:
I) the contractual rights to the cash flows from the financial assets expire;
II) the financial assets have been transferred, and such transfer meets the requirements of the
Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets on the derecognition
of financial assets.
② Financial liabilities (or part thereof) are derecognized if present obligations for the financial
liabilities (or part thereof) are released.
(3) Recognition basis and measurement method for transfer of financial assets
When transferring substantially all the risks and rewards of ownership of the financial assets, the
Company shall derecognize the financial assets and recognize separately as assets or liabilities any rights
105 / 243
2021 Annual Report
and obligations created or retained in the transfer. When retaining substantially all the risks and rewards of
ownership of the financial assets, the Company shall continue to recognize the financial assets. If the
Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset, and (1) if the Company has not retained control of the financial asset, it shall derecognize the
financial assets and recognize any rights and obligations created or retained in the transfer separately as
assets or liabilities; (2) if the Company has retained control of the financial asset, it shall continue to
recognize the financial asset to the extent of its continuing involvement in the financial asset, and relevant
liabilities accordingly.
If a transfer of financial assets in their entirety qualifies for derecognition, the difference between the
following two items shall be charged to the current profit or loss: (1) the carrying amount of the transferred
financial assets at the date of derecognition; (2) the sum of the consideration received for the transfer of
financial assets and the portion of accumulated fair value adjustments previously charged to other
comprehensive income which is derecognized (with the transferred assets being debt instrument
investments at fair value through other comprehensive income). If a part of the financial assets is
transferred, and such transferred portion qualifies for derecognition in its entirety, the carrying amount of
the financial asset prior to the transfer is allocated between the portion derecognized and the portion
retained, at their respective relative fair values on the date of transfer, and the difference between the
following two items is charged to the current profit or loss: (1) the carrying amount of the portion
derecognized; (2) the sum of the consideration of the portion derecognized, and the portion of accumulated
fair value adjustments previously charged to other comprehensive income which is derecognized (with the
transferred assets being debt instrument investments at fair value through other comprehensive income).
(4) Determination of fair value of financial assets and financial liabilities
The Company recognizes the fair values of relevant financial assets and financial liabilities by
adopting valuation techniques that are currently applicable and have sufficient data available and other
information support. The Company categorizes inputs of the valuation techniques into the following levels:
1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities
available for entities on the measurement date;
2) Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable
for the relevant asset or liability, either directly or indirectly; including similar quoted prices of assets and
liabilities in active markets, the same or similar quoted prices of assets and liabilities in non-active markets,
other significant inputs other than quoted prices such as observable interest rate curves and return curves in
the normal quoting intervals, and the inputs verified by the markets;
3) Level 3 inputs are unobservable inputs for the relevant asset or liability, including interest rate,
volatility in equity prices, future cash flows in respect of the abandoned obligations committed in the
business combination, and financial predictions using own data, which cannot be directly observed or
verified by observable market data.
(5) Impairment of financial instruments
Measurement of and accounting for impairment of financial instruments
Based on expected credit losses, the Company accounts for the impairment of, and recognizes
provisions for losses on, financial assets at amortized cost, debt instrument investments at fair value
106 / 243
2021 Annual Report
through other comprehensive income, contract assets, lease receivables, loan commitment not classified as
financial liabilities at fair value through profit or loss, and financial guarantee contracts not classified as
financial liabilities at fair value through profit or loss or financial liabilities arising from the transfer of
financial assets not qualify for derecognition or continuing involvement in the transferred financial assets.
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 effective interest rate, namely, the present value of all cash shortages. Among them, purchased or
originated credit-impaired financial assets shall be discounted at the adjusted effective interest rate of the
financial assets.
For purchased or originated credit-impaired financial assets, the Company recognizes as loss reserves
on the balance sheet date, only the cumulative changes in lifetime expected credit losses from initial
recognition.
For lease receivables, and receivables and contract assets arising from a transaction under the
Accounting Standards for Business Enterprises No. 14 - Revenue, the Company calculates the loss reserves
based on the lifetime expected credit loss using a simplified measurement method.
In addition to financial assets in respect of which the aforesaid measurement approaches are adopted,
the Company assesses whether there has been a significant increase in its credit risk, on each balance sheet
date. If there has been a significant increase in the credit risk since initial recognition, the loss reserves are
measured at the lifetime expected credit loss. If there has not been a significant increase in the credit risk
since initial recognition, the loss reserves are measured at the 12-month expected credit loss.
Whether there has been a significant increase in the credit risk on a financial instrument since initial
recognition is determined, using available, reasonable and supportable information including
forward-looking information, and by comparing the risk of default on the financial instrument on the
balance sheet date with that on the date of initial recognition.
The Company assumes that there has not been a significant increase in the credit risk if a financial
instrument is determined to have a low credit risk on the balance sheet date.
The Company assesses the expected credit risk and measures the expected credit losses on the basis of
an individual financial instrument or a portfolio of financial instruments. When conducting an assessment
and measurement based on a portfolio of financial instruments, the Company categorizes financial
instruments into various groups based on common characteristics of risks.
Expected credit losses are remeasured on each balance sheet date, and any increase or reversal of loss
reserves arising therefrom is charged to the current profit or loss as impairment losses or gains. For a
financial asset at amortized cost, the loss reserve reduces the carrying amount of the financial asset as
presented in the balance sheet. For a debt instrument investment at fair value through other comprehensive
income, the loss reverse is recognized in other comprehensive income without reducing the carrying
amount of the financial asset.
(6) Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately from each other in the balance sheet
and are not offset. However, financial assets and financial liabilities are offset and the net amount is
107 / 243
2021 Annual Report
presented in the balance sheet when both of the following conditions are met: 1) the Company has a legal
right to set off the recognized amounts and the legal right is currently enforceable; 2) the Company intends
either to settle on a net basis or to realize the financial assets and settle the financial liabilities
simultaneously.
When the transfer of financial assets fails to meet the derecognition conditions, the Company shall not
offset such transferred financial assets with the relevant liabilities.
11. Bills receivable
Determination Method and Accounting Method of Expected Credit Loss of Bills Receivable
√Applicable □Not Applicable
Item Grouping basis Expected credit loss calculation method
The expected credit loss is calculated, with
Bank acceptance bill receivable reference to historical credit loss experience, in
consideration of current conditions and expectation
Bill Type
of future economic conditions, and based on the
Commercial acceptance bill receivable default risk exposure and lifetime expected credit
loss rate.
12. Accounts receivable
Determination Method and Accounting Method of Expected Credit Loss of Accounts Receivable
√Applicable □Not Applicable
Item Grouping basis Expected credit loss calculation method
A table of aging of accounts receivable and lifetime
expected credit loss rates is prepared, and the
expected credit loss is calculated, with reference to
Accounts receivable - grouped by aging Aging
historical credit loss experience, in consideration of
current conditions and expectations of future
economic conditions.
The expected credit loss is calculated, with
reference to historical credit loss experience, in
Accounts receivable - grouped by related
consideration of current conditions and expectation
party transactions in the consolidation Nature
of future economic conditions, and based on the
scope
default risk exposure and lifetime expected credit
loss rate.
Accounts Receivable - A Table of Aging of Accounts Receivable and Lifetime Expected Credit Loss Rates
Grouped by Aging
Accounts receivable
Aging
Expected credit loss rate (%)
Within 1 year (inclusive, the same below) 5.00
1-2 years 10.00
2-3 years 30.00
Over 3 years 100.00
13. Receivables financing
□Applicable √Not Applicable
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14. Other receivables
Determination Method and Accounting Method of Expected Credit Loss of Other Receivables
√Applicable □Not Applicable
Item Grouping basis Expected credit loss calculation method
Other receivables - grouped by related The expected credit loss is calculated, with
party transactions in the consolidation Nature reference to historical credit loss experience, in
scope consideration of current conditions and expectation
of future economic conditions, and based on the
Other receivables - grouped by aging Aging default risk exposure and 12-month or lifetime
expected credit loss rate.
15. Inventories
√Applicable □Not Applicable
(1) Classification of inventories
Inventories are finished goods or merchandise held for sale in the ordinary course of business,
products in production, or materials or supplies to be consumed in production or in the rendering of
services.
(2) Cost of inventories transferred out
The cost of inventories transferred out is determined using the individual pricing method.
(3) Basis for determining the net realizable value of inventories
On the balance sheet date, inventories are carried at the cost or net realizable value (whichever is
lower). Any excess of the cost over the net realizable value of each item/class of inventories is recognized
as a provision for diminution in the value of inventories. For inventories directly for sale, net realizable
value is determined based on the estimated selling price in the ordinary course of business less the
estimated costs necessary to make the sale and relevant taxes. For inventories that need processing, net
realizable value is determined based on the estimated selling price of finished goods in the ordinary course
of business less the estimated costs of completion and the estimated costs necessary to make the sale and
relevant taxes. On the balance sheet date, for an item of inventories where a portion is subject to contractual
price while the remainder is not, their net realizable values are determined and compared with their
corresponding costs respectively to recognize the amount of provision, or reversal of provision, for
diminution in the value of inventories.
(4) Inventory system
The Company maintains a perpetual inventory system.
(5) Amortization methods for consumables including low-value consumables and packaging materials
1) Low-value consumables
Low-value consumables are amortized in full when received for use.
2) Packaging materials
Low-value consumables are amortized in full when received for use.
16. Contract assets
(1). Recognition methods and standards of contract assets
√Applicable □Not Applicable
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The Company presents its right to receive consideration from customers unconditionally (i.e. only
depending on the passage of time) as receivables and the right to receive consideration for the transfer of
goods to customers (which depends on other factors other than the passage of time) as a contract asset.
The Company presents contract assets or contract liabilities in the balance sheet based on the
relationship between performance obligations and customer payments. The Company will present the net
amount after offsetting the contract assets with the contract liabilities under the same contract.
(2). Determination method and accounting method of expected credit loss of contract assets
√Applicable □Not Applicable
Item Grouping basis Expected credit loss calculation method
The expected credit loss is calculated, with reference
to historical credit loss experience, in consideration of
Contract assets – grouped by aging Aging current conditions and expectation of future economic
conditions, and based on the default risk exposure and
lifetime expected credit loss rate.
The expected credit loss is calculated, with reference
Contract assets – grouped by related to historical credit loss experience, in consideration of
party transactions in the consolidation Nature current conditions and expectation of future economic
scope conditions, and based on the default risk exposure and
lifetime expected credit loss rate.
17. Held-for-sale assets
□Applicable √Not Applicable
18. Debt investments
(1). Determination method and accounting method of expected credit loss of debt investments
□Applicable √Not Applicable
19. Other debt investments
(1). Recognition method and accounting method of expected credit losses of other debt investments
√Applicable □Not Applicable
Item Grouping basis Expected credit loss calculation method
Other debt investments - grouped by The expected credit loss is calculated, with
government debts reference to historical credit loss experience, in
Other debt investments - grouped by consideration of current conditions and
Type of debts
financial debts expectation of future economic conditions, and
Other debt investments - grouped by based on the default risk exposure and 12-month
enterprise debts or lifetime expected credit loss rate.
20. Long-term receivables
(1). Recognition method and accounting method of expected credit losses of long-term receivables
□Applicable √Not Applicable
21. Long-term equity investments
√Applicable □Not Applicable
(1) Judgment on joint control and significant influence
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Joint control is recognized as control held for a certain arrangement under the relevant agreement, the
relevant activity of which should be unanimously agreed by the parties sharing the control. The influence is
deemed as significant if there involves the power of participating in decision-making on the financial and
operational policies of the investee, but the power cannot control or jointly control with other parties the
formulation of the policies.
(2) Recognition of investment costs
1) If formed through a business combination under joint control, and the consideration for such
combination is settled by cash payment, transfer of non-cash assets, debt obligation and issuance of equity
securities by the acquirer, the initial investment cost shall be the Company's share of the carrying amount of
shareholders' equity of the acquiree presented in the consolidated financial statement of the equities under
common control on the combination date. The difference between the initial investment cost of long-term
equity investment and the carrying value of the paid combination consideration or total par value of issued
shares adjusts the capital reserve. Retained earnings shall be adjusted if the capital reserve is not sufficient
for offset.
The Company realizes long-term equity investment formed through business combination under joint
control by trading step by step and judges whether the transaction is categorized as a "package deal" or not.
If so, all transactions will be treated as control transactions in accounting. If not, the initial investment cost
shall be the share of the carrying amount presented in the consolidated financial statement of the equities
under common control based on the net assets of the acquiree after combination on the combination date.
The difference between the initial investment cost of long-term equity investment on the combination date
and the carrying amount of the long-term equity investment before combination plus the carrying amount
of new share consideration further obtained on the combination date shall be adjusted to capital reserve.
Retained earnings shall be adjusted if the capital reserve is not sufficient for offset.
2) If formed through a business combination under common control, the initial investment cost is
the fair value of the consideration given for combination at the combination date.
As for business combinations that involve enterprises not under common control and are carried out in
stages, the separate financial statements and the consolidated financial statements shall be treated
separately in accounting:
① In the separate financial statements, the initial investment cost accounted for using the newly
adopted cost method is the sum of the carrying value of equity investment originally held and the addition
of investment cost.
② The Company judges whether the transaction is categorized as a "package deal" for the purpose of
the consolidated financial statements. If so, all transactions will be treated as control transactions in
accounting. If not, the equity interest of the acquiree held before the date of acquisition is re-measured
according to its fair value at the date of acquisition. The difference between the fair value and its carrying
amount is charged to the investment income of the applicable period. If the equity of the acquiree held
before the date of acquisition involves other comprehensive income accounted for using the equity
accounting method, they are transferred to income for the period covering the date of acquisition together
with the relevant other comprehensive income, excluding other comprehensive income resulting from
changes in net liabilities or net assets arising from the defined benefit plan through the re-measurement on
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the investee.
3) The initial investment cost acquired otherwise than through a business combination is initially
recognized at the actual consideration paid if the investment is acquired by cash, or at the fair value of the
equity securities issued if the investment is acquired by issuing equity securities. The initial investment
costs acquired through debt restructuring are recognized pursuant to the Accounting Standard for Business
Enterprises No.12 - Debt Restructuring. The initial investment costs acquired through the exchange of
non-monetary assets are recognized pursuant to the Accounting Standard for Business Enterprises No. 7 -
Exchange of Non-monetary Assets.
(3) Subsequent measurement and recognition of profit or loss
When the Company controls the investee, the cost method is adopted for long-term equity investment
while the equity method is adopted for long-term equity investment of associates and joint ventures in
accounting.
(4) Step-by-step disposal of investment in subsidiaries through a series of transactions to loss of control
1) Separate financial statements
For the disposal of equity, the difference between the carrying amount and the actual consideration
obtained is charged to the current profit or loss. The equity method is adopted for the remaining equities
that have a significant influence on the investee or perform joint control with other parties in accounting.
The remaining equities that do not control, jointly control or have a significant influence on the investee
shall be calculated according to the Accounting Standards for Enterprises No. 22 - Recognition and
Measurement of Financial Instruments.
2) Consolidated financial statements
① For the disposal of investment in a subsidiary to loss of its right to control in stages through a
series of transactions that are not categorized as a "package deal"
Prior to the loss of the right to control, the capital reserve (capital premium) is adjusted with the
difference between the consideration of the disposal and the entitled share of the net assets of the subsidiary
that would have been entitled to by the disposal of long-term equity investment and continuously accounted
for from the acquisition date or combination date. If the balance of the capital premium is insufficient for
the written-off, then the retained earnings will be written off accordingly.
When the right to control the former subsidiary is lost, the remaining equities are re-measured at fair
value on the date when the right to control is lost. The sum of the consideration obtained from disposal and
the fair value of the remaining equities less the share of the net assets of the subsidiary that would have
been entitled to and continuously accounted for according to the original shareholding percentage from the
acquisition date or combination date is charged to the investment income for the period covering the date of
loss of control, offsetting the goodwill at the same time. Other comprehensive income related to the equity
investment in the former subsidiary shall be transferred to the investment income for the period covering
the date of loss of control.
② For the disposal of investment in a subsidiary to loss of its right to control in stages through
various transactions that are categorized as a "package deal"
The transactions are treated as one single transaction of disposal of a subsidiary and loss of the right to
control. However, prior to the loss of the right to control, the difference between each of the consideration
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of disposal and the share of net assets of that subsidiary that would have been entitled to by the disposal of
investment is recognized in other comprehensive income in the consolidated financial statements and
transferred to profit or loss for the period covering the date of loss of control.
22. Investment properties
(1). If the cost method is adopted:
Depreciation or amortization method
Investment properties are depreciated or amortized, using a method similar to that for fixed assets and
intangible assets.
23. Fixed assets
(1). Recognition condition
√Applicable □Not Applicable
Fixed assets refer to tangible assets held for the purpose of producing commodities, providing labor
services, leasing or operation, and management, with an age exceeding one fiscal year. Fixed assets are
recognized when economic benefits are likely to flow in and costs can be measured reliably.
(2). Depreciation method
√Applicable □Not Applicable
Depreciable life Annual depreciation
Class Depreciation method Residual ratio
(years) rate
Buildings Straight-line depreciation 5-50 5.00% 1.90%-19.00%
Electronic equipment Straight-line depreciation 3-5 5.00% 19.00%-31.67%
Vehicles Straight-line depreciation 5 5.00% 19.00%
Other equipment Straight-line depreciation 3-12 5.00% 7.92%-31.67%
(3). Appraisal Basis, Pricing and Depreciation Method of the Financing Leased Fixed Assets
□Applicable √Not Applicable
24. Construction in progress
√Applicable □Not Applicable
(1) When the inflow of economic benefits is probable and the cost can be reliably measured,
construction-in-progress is recognized and measured at the actual cost incurred till it is ready for
its intended use.
(2) Construction-in-progress is transferred into fixed assets at the actual cost when it is ready for
its intended use. For a completed project ready for its intended use but the final accounts for
completion have not been made, the asset is transferred into fixed assets at an estimated value.
After the final accounts for completion have been made, the previously estimated value is
adjusted at the actual cost, but there is no need to adjust the depreciation retrospectively.
25. Borrowing Costs
√Applicable □Not Applicable
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(1) Recognition principle for capitalization of borrowing costs
Borrowing costs directly attributable to the acquisition, construction or origination of assets qualified
for capitalization are capitalized as part of the cost of those assets. Other borrowing costs are expensed and
charged to the current profit or loss when incurred.
(2) Timing of borrowing costs capitalization
1) Borrowing costs shall be capitalized when: ① capital expenditures have been incurred; ②
borrowing costs have been incurred; ③ activities relating to the acquisition, construction or origination of
assets necessary to make the asset ready for its intended use or sale have commenced.
2) Capitalization of borrowing costs should be suspended during periods in which abnormal
interruption has lasted for more than three months in the acquisition, construction or origination of assets
qualified for capitalization. The borrowing costs incurred during interruption are recognized as current
expenses until the acquisition, construction or origination activities resume.
3) The capitalization of borrowing costs ceases when the acquired, constructed or originated assets
qualified for capitalization are ready for their intended use or sale.
(3) Capitalization rate and amount of borrowing costs
For specific borrowings used to acquire, construct or originate assets qualified for capitalization, the
amount of interest costs (including amortization of discount or premium determined by the effective
interest method) actually incurred on such borrowings for the period shall be capitalized after deducting
any interest earned from depositing the unused borrowings in the bank or any investment income arising
from the temporary investment of those borrowings. For general borrowings used to acquire, construct or
originate assets qualified for capitalization, the capitalized amount of interests on general borrowings shall
be determined by multiplying the weighted average (of the excess of cumulative assets expenditures over
the specific borrowings) by the capitalization rate (of used general borrowings).
26. Biological assets
□Applicable √Not Applicable
27. Oil and gas assets
□Applicable √Not Applicable
28. Right-of-use assets
√Applicable □Not Applicable
The right-of-use shall be initially measured at costs, including 1) the initial measured amount of lease
liabilities; 2) the lease amount paid on or before the commencement date of the lease term (in case of lease
incentives, the amount related to the lease incentives already enjoyed shall be deducted); 3) the initial and
direct costs borne by the lessee; 4) costs expected to incur from the lessee's dismantling and removing the
leased assets, recovering the original site of the leased assets, or restoring the leased assets to the state as
specified in the lease provisions.
The Company depreciates the right-to-use assets by the straight-line method. Where the ownership of
the leased assets can be reasonably determined at the end of the lease term, the Company shall depreciate
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the leased assets during the remaining life of such assets. In case of a failure to determine the ownership of
the leased assets reasonably at the end of the lease term, the Company shall depreciate the leased assets
within the lease term or the remaining life of such assets, whichever is shorter.
29. Intangible assets
(1). Pricing method, life and impairment test
√Applicable □Not Applicable
1) Intangible assets, including land use rights, patent rights and non-patented technologies, are
initially measured at cost.
2) Intangible assets with a definite life are systematically and reasonably amortized during the life in
accordance with the expected realization of economic benefits related to the intangible assets. Intangible
assets whose economic benefits realization cannot be reliably determined are amortized on a straight-line
basis during the following life:
Item Amortization life (years)
Land use rights 40-50
Trademark rights 10
Management software and copyright 5-10
Patent rights 10
Non-patented technologies 5
(2). Accounting policy of internal research and development expenditure
√Applicable □Not Applicable
Expenditures for internal research and development activities are charged to the current profit and loss
when incurred. The expenditures for internal research and development projects in the development stage
are recognized in intangible assets when all of the following conditions are met: 1) the completion of such
intangible assets for use or sale is technically feasible; 2) the Company has the intention to use or sell the
intangible assets upon completion; 3) the way in which the intangible assets bring economic benefits shows
that there exists consumption market for the products produced by these intangible assets or the intangible
assets themselves, or that the assets are useful in case of internal utilization; 4) the Company has sufficient
technological, financial and other resources to complete the development of the intangible assets and the
ability to make them ready for use or sale; 5) the expenditures attributable to such intangible assets can be
measured reliably in the development stage.
Specific criteria for the Company to distinguish the expenditures in the research stage from the
development stage of a research and development project: the research stage involves activities carried out
for planned investigation for acquiring new technology and knowledge, and the preparation of information
and related aspects for further development activities, with great uncertainty about whether it will be
transferred to development in the future and whether it will form intangible assets after development. The
development stage, as opposed to the research stage, involves activities completed in the research stage, to
a large extent that the basic conditions for the formation of a new product or technology are in place.
30. Long-term asset impairment
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√Applicable □Not Applicable
The recoverable amount of long-term assets, such as long-term equity investments, investment
property measured at cost, fixed assets, construction in progress, and intangible assets with a finite life, is
estimated where there is evidence of impairment on the balance sheet date. An annual impairment test shall
be carried out on goodwill arising from business combination and intangible assets with an indefinite life,
whether where there is evidence of impairment. An impairment test is carried out on goodwill together with
its relevant asset group or portfolio of asset groups.
When the recoverable amount of such long-term assets is less than the carrying amount thereof, the
difference is recognized as the asset impairment reserve and charged to the current profit or loss.
31. Long-term prepaid expense
√Applicable □Not Applicable
Long-term deferred expenses are expenses that have been recognized with an amortization period over
one year (excluding one year). These expenses are recorded as actually incurred, and amortized evenly over
the benefit period or specified period. If the long-term deferred expenses fail to benefit the future
accounting period, their amortized values are all included in the current profit or loss.
32. Contract liabilities
(1). Recognition method of contract liabilities
√Applicable □Not Applicable
The Company presents as a contract liability the obligation to transfer goods to customers for
consideration received or receivable from customers.
The Company presents contract assets or contract liabilities in the balance sheet based on the
relationship between performance obligations and customer payments. The Company will present the net
amount after offsetting the contract assets with the contract liabilities under the same contract.
33. Employee compensation
(1). Accounting method for short-term remuneration
√Applicable □Not Applicable
During the accounting period when employees provide services to the Company, the actual short-term
remuneration is recognized as liabilities and charged to the current profit or loss or the cost of related
assets.
(2). Accounting method for post-employment benefits
√Applicable □Not Applicable
Post-employment benefits are divided into the defined contribution plan and the defined benefit plan.
1) The amounts deposited are recognized as debts according to the defined contribution plan and
charged to the current profit or loss or relevant assets cost when employees provide services to the
Company.
2) The accounting method in the defined benefit plan generally includes the following procedures:
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① According to the projected unit credit method, the unbiased and mutually agreed actuarial
assumptions are adopted by the Company to estimate the relevant demographic variables and financial
variables, calculate the obligations arising from the defined benefit plan and determine the period of
relevant obligations belonging thereto. Meanwhile, the obligation arising from the defined benefit plan is
discounted to determine the present value of such obligation under the defined benefit plan and the service
cost for the current period;
② Where there are assets in the defined benefit plan, the deficit or surplus from the present value of
the defined benefit plan less the fair value of the defined benefit plan is recognized as a net debt or asset of
a defined benefit plan. Where there is a surplus in the defined benefit plan, the surplus of the defined
benefit plan and the upper limit of the assets (whichever is lower) will be adopted to calculate the net assets
of the defined benefit plan;
③ At the end of the period, the cost of employee compensation under the defined benefit plan will be
recognized as the service cost, the net interest on the net assets or net debts under the defined benefit plan
and the changes arising from the remeasurement of the net assets or net debts under the defined benefit plan.
The service cost and the net interest on the net assets or net debts under the defined benefit plan will be
recognized in the current profit or loss or relevant assets cost. The changes arising from the remeasurement
of the net assets or net debts under the defined benefit plan will be recognized in other comprehensive
income and shall not be reversed to the profit or less in subsequent accounting periods, but the amounts
recognized in other comprehensive income can be transferred within the scope of interests.
(3). Accounting method for dismission benefits
√Applicable □Not Applicable
When there is a plan to provide dismission benefits to employees, the employee compensation debts
arising from the recognition of dismission benefits will be recognized in the current profit or loss at the
earlier of: (1) when the Company cannot unilaterally withdraw the dismission benefits for the release of the
labor relationship or the dismission proposal; (2) when the Company recognized relevant costs or expenses
associated with the reorganization of the payment of the dismission benefits.
(4). Accounting method for other long-term benefits
√Applicable □Not Applicable
Other long-term benefits provided by the Company to employees, when meeting the conditions of the
defined contribution plan, will be subjected to accounting under the defined contribution plan. Other
long-term benefits other than the above benefits will be subjected to accounting under the defined benefit
plan. To simplify corresponding accounting methods, the employee compensation costs incurred are
recognized as the service cost and the total net amount of the components such as net interest amount of net
liabilities or net assets in terms of other long-term employees' benefits, and changes arising from
re-measuring the net liabilities or net assets in terms of other long-term employees' benefits are recognized
in the current profit or loss or relevant cost of assets.
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34. Lease liabilities
√Applicable □Not Applicable
On the inception date of the lease term, the Company will recognize the present value of the
outstanding lease payments as lease liabilities. In the process of calculating the present value of lease
payments, the interest rate set out in the lease contract is taken as the discount rate. If such an interest rate is
not available, the incremental borrowing rate shall be adopted. The difference between the lease payments
and their present value is recognized as an unrecognized financing expense, and the interest expense is
recognized at the discount rate of the present value of the recognized lease payments during each period of
the lease term and is charged to the current profit or loss. Variable lease payments not considered in the
measurement of lease liabilities are charged to the current profit or loss when actually incurred.
In case of any changes in the amount of substantive fixed payments, the amount expected to be
payable for the residual guarantee, the index or rate used to determine the lease payments, or the evaluation
result or actual exercise of the call option, renewal option or termination option after the inception date of
the lease term, the Company will remeasure the lease liabilities at the present value of the changed lease
payments and adjust the carrying amount of the right-of-use assets accordingly. If the carrying amount of
the right-of-use assets is reduced to zero but the lease liabilities still need to be further reduced, the
remaining amount is recognized in the current profit or loss.
35. Provision for liabilities
√Applicable □Not Applicable
(1) Where the Company has a present obligation as a result of contingencies such as the provision of
external guarantee, litigation, product quality warranty, and loss-making contract, the performance of the
obligations may result in the outflow of economic benefits, and the amount of the obligations can be
measured reliably, such obligation is recognized as the provisions for liabilities.
(2) Provisions are initially measured at the best estimate of the expenditure required for performing
the present obligation. Carrying amounts of all provisions for liabilities will be reviewed on the balance
sheet date.
36. Share-based payment
√Applicable □Not Applicable
(1) Types of share-based payment
The share-based payments shall consist of equity-settled share-based payments and cash-settled
share-based payments.
(2) Accounting method for implementation, modification and termination of share-based payment
1) Equity-settled share-based payment
As to an equity-settled share-based payment in return for services of employees, if the right may be
exercised immediately after the grant, the fair value of the equity instruments shall, on the date of the grant,
be charged to the relevant cost or expense and the capital reserves shall be adjusted accordingly. As to an
equity-settled share-based payment in return for employee services, if the right cannot be exercised until
the vesting period comes to an end or until the prescribed performance conditions are met, then on each
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2021 Annual Report
balance sheet date within the vesting period, the services obtained in the current period shall, based on the
best estimate of the number of vested equity instruments, be charged to the relevant costs or expenses at the
fair value of the equities instruments on the date of the grant, and the capital reserves shall be adjusted
accordingly.
Equity-settled share-based payments in return for services rendered by other parties are measured at
the fair value of the services rendered by other parties on the receiving date if such fair value can be
reliably measured. If the fair value of the services rendered by other parties cannot be reliably measured,
equity-settled share-based payments in return for services rendered by other parties are measured at the fair
value of equity instruments on the date of receiving services and charged to relevant costs or expenses and
shareholders' equity is credited accordingly, provided that the fair value of equity instruments can be
reliably measured.
2) Cash-settled share-based payments
As to a cash-settled share-based payment instruments in return for services of employee, if the right
may be exercised immediately after the grant, the fair value of the liability undertaken by the Company
shall, on the date of the grant, be charged to the relevant costs or expenses, and the liabilities shall be
increased accordingly. As to a cash-settled share-based payment in return for services of employee, if the
right may not be exercised until the vesting period comes to an end or until the specified performance
conditions are met, on each balance sheet date with in the vesting period, the services obtained in the
current period shall, based on the best estimate of the information about the vesting conditions, be charged
to the relevant costs or expenses and the corresponding liabilities at the fair value of the liability undertaken
by the Company.
3) Share-based payment plan modification and termination
When the Company modifies the share-based payment plan, if the fair value of the distributed equity
instrument is increased due to the modification, the increment of the obtained services shall be recognized
accordingly; if the quantity of the distributed equity instrument is increased due to the modification, the
increment of obtained services shall be recognized accordingly. If the Company modifies the vesting
conditions on terms favorable to its employees, it will consider the vesting conditions after modification
when dealing with the conditions.
If the modification decreases the fair value of equity instruments granted, the Company continues to
recognize the value of service obtained based on the equity instruments' fair value on the grant date without
any consideration of the decrease on equity instrument's fair value. If the modification decreases the
quantity of equity instruments, the Company records the decrease in conformity with the cancellation of
equity instruments granted. If the Company modifies the vesting conditions on terms not favorable to its
employees, it will not consider the vesting conditions after modification when dealing with the conditions.
If the granted equity instruments are canceled or settled within the vesting period (except that canceled
due to failure to meet the vesting conditions), the Company shall regard the canceling or settlement as
acceleration of the vest, and immediately recognize the amount supposed to be recognized within the
residual vesting period.
37. Other financial instruments including preferred shares and perpetual bonds
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□Applicable √Not Applicable
38. Revenue
(1). Accounting policies for revenue recognition and measurement
√Applicable □Not Applicable
1) Revenue recognition principles
The Company will evaluate a contract on the effective date of the contract, identify all performance
obligations contained in the contract and determine whether these performance obligations are to be
performed within a certain period of time or at a certain time point.
A performance obligation is satisfied within a certain period of time if one of the following criteria is
met, otherwise it is satisfied at a certain time point: ① the customer simultaneously receives and
consumes the benefits provided by the Company's performance as the Company performs; ② the
Company's performance creates goods or services that the customer controls as the goods are created; ③
the Company's performance does not create an asset with an alternative use to the Company and the
Company has an enforceable right to payment for performance completed to date during the term of the
contract.
In the case of an obligation satisfied within a certain period of time, the Company shall recognize
revenue the revenue within that period according to the performance progress. If the Company fails to do
so reasonably and expects to recover the costs incurred, the revenue is recognized in line with cost incurred,
until the performance progress can be reasonably determined. In the case of a performance obligation
satisfied at a certain time point, the revenue is recognized at a certain time point when a customer obtains
control of relevant goods or services. To determine the time point at which a customer obtains control of
goods, the Company considers the following indicators: ① the Company has a present right to payment
for the goods, or the customer has the present obligation to pay for the goods; ② the Company has
transferred the legal title to the goods to the customer, or the customer has legal title to the goods; ③ the
Company has transferred physical possession of the goods to the customer, or the customer has physical
possession of the goods; ④ the Company has transferred the significant risks and rewards of ownership of
the goods to the customer, or the customer has the significant risks and rewards of ownership of the asset;
⑤ the customer has accepted the goods; ⑥ other indicators that the customer obtains control of the
goods.
2) Revenue measurement principles
① The Company recognizes revenue at the transaction price apportioned to each individual
performance obligation. Transaction price is the amount of consideration in a contract to which the
Company expects to be entitled in exchange for transferring goods or services to a customer, excluding
amounts collected on behalf of third parties or expected to be refunded to a customer.
② If a contract has variable consideration, the Company determines the appropriate estimate based on
the expected value or the most likely amount, provided that a transaction price including variable
consideration shall not exceed the amount of cumulative revenue recognized which is highly unlikely to be
subject to significant reversal when the uncertainty associated with the variable consideration is
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subsequently resolved.
③ If a contract contains a significant financing component, the Company determines the transaction
price based on the amount that a customer would have paid when it obtains control of goods or services.
The difference between the transaction price and the contract consideration is amortized during the term of
the contract using the effective interest method.
④ If there are two or more performance obligations under a contract, the Company shall, at contract
inception, apportion the transaction price to each performance obligation in proportion to the stand-alone
selling prices of goods underlying each performance obligation.
3) Specific methods for revenue recognition
① Revenue from sales of self-developed software products
The Company recognizes revenue when the software product is delivered to the customer and the
customer obtains control over the product as a performance obligation to be performed at a certain time
point, usually after taking into account the following factors: I) the Company has a present right to payment
for the goods; II) the Company has transferred the significant risks and rewards of ownership of the goods
to the customer; III) the Company has transferred the legal title to the goods to the customer; IV) the
Company has transferred physical possession of the goods to the customer; V) the customer has accepted
the goods.
For the software products within the warranty period stipulated in the contract, the Company shall
accrue the software maintenance cost at 0.5% of revenue while recognizing revenue.
② Revenue from sales of customized software
The Company recognizes revenue when the software product is delivered to the customer and the
customer obtains control of the product as a performance obligation to be performed at a point in time,
usually after taking into account the following factors: I) the Company has a present right to payment for
the goods; II) the Company has transferred the significant risks and rewards of ownership of the goods to
the customer; III) the Company has transferred the legal title to the goods to the customer; IV) the
Company has transferred physical possession of the goods to the customer; V) the customer has accepted
the goods.
For the software products within the warranty period stipulated in the contract, the Company shall
accrue the software maintenance cost at 0.5% of revenue while recognizing revenue.
③ Revenue from software services
For software service contracts where I) the customer simultaneously receives and consumes the
benefits provided by the Company's performance as the Company performs; II) or the customer can control
the goods or services in progress during the Company's performance; III) or the software services provided
by the Company during the Company's performance have alternative use, and the Company has an
enforceable right to payment for performance completed to date, the Company recognizes revenue as a
performance obligation to be performed within a period of time in accordance with the progress of
performance, except when the progress of the performance cannot be reasonably determined. The Company
determines the progress of the performance of services provided in accordance with the input method,
based on the costs incurred or the time schedule. When the progress of the performance cannot be
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reasonably determined, and the costs incurred by the Company are expected to be compensated, the
revenue will be recognized based on the amount of costs incurred, until the progress of the performance can
be reasonably determined. For services that do not meet the above requirements for revenue recognition
according to the performance progress, the Company recognizes revenue when the services have been
provided, the price has been received or evidence of collection has been obtained.
④ Revenue from sales of outsourced goods
Outsourced goods include outsourced software and hardware goods. The Company recognizes revenue
as a performance obligation to be performed at a certain time point, usually when the outsourced goods are
delivered to the customer and the customer obtains control over the goods, taking into account the
following factors: I) the Company has a present right to payment for the goods; II) the Company has
transferred the significant risks and rewards of ownership of the goods to the customer; III) the Company
has transferred the legal title to the goods to the customer; IV) the Company has transferred physical
possession of the goods to the customer; V) the customer has accepted the goods.
⑤ Revenue from sales of Science Park Project
The sale of the Company's science park properties is a performance obligation to be performed at a
certain time point and revenue is recognized when the customer has accepted delivery, the price has been
received or the right to receive payment has been obtained and the related economic benefits are likely to
flow in.
⑥ Revenue from property management
The Company's provision of property management services is a performance obligation to be
performed within a certain period of time. The Company determines the progress of the performance of the
service provided based on the proportion of costs incurred to the estimated total costs and recognizes
revenue based on the progress of the performance. When the progress of the performance cannot be
reasonably determined, and the costs incurred by the Company are expected to be compensated, the
revenue will be recognized based on the amount of costs incurred, until the progress of the performance can
be reasonably determined.
⑦ Revenue from property rental
The Company's principles for recognizing the revenue from property rental are detailed in Note V(42)
to the financial statements.
⑧ Revenue from other businesses
The performance obligations under contracts are fulfilled in accordance with the relevant contracts and
agreements, i.e., revenue is recognized when the customer obtains the right to control the relevant goods.
(2). Differences in accounting policies for revenue recognition due to different business models for
the same type of business
□Applicable √Not Applicable
39. Contract costs
√Applicable □Not Applicable
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Assets related to contract costs include contract acquisition costs and contract performance costs.
If the incremental cost incurred by the Company in obtaining the contract can be expected to be
recovered, the contract acquisition cost shall be recognized as an asset. The contract acquisition cost with
an amortization period not exceeding one year is directly charged to the current profit or loss when
incurred.
The costs incurred by the Company for the performance of the contract which does not fall under the
scope of the standards relating to inventories, fixed assets and intangible assets are recognized as an asset
as contract performance costs when the following conditions are met:
(1) Such cost is directly related to a current or expected contract, including direct labor, direct
materials, manufacturing costs (or similar costs), costs clearly borne by the customer and other costs
incurred solely due to the contract;
(2) Such cost increases the resources of the Company to fulfill its performance obligations in the
future.
(3) Such cost is expected to be recovered.
The Company will amortize assets related to the cost of the contract are amortized on the same basis
as the revenue recognition of the goods or services related to the asset, and charged the cost to the current
profit or loss when incurred.
If the fair value of assets related to contract costs exceeds the remaining consideration expected to be
obtained due to the transfer of goods or services related to the assets less estimated costs to be incurred, a
provision for impairment is made for the excess, which is recognized as impairment losses on assets. If the
remaining consideration expected to be obtained due to the transfer of goods or services related to the
assets less estimated costs to be incurred exceeds the fair value of assets, due to subsequent changes in
impairment conditions existing in prior periods, the provision previously made for impairment of the assets
is reversed and recorded in the current profit or loss, provided that the carrying amount of the assets after
the reversal is not more than the carrying amount of the assets which would have been recorded at the date
of reversal if the provision for impairment had not been made.
40. Government grants
√Applicable □Not Applicable
(1) The government grants are recognized when 1) the Company is able to comply with the
conditions attaching to the government grants; 2) the Company is able to receive the government grants.
Government grants which are monetary assets are measured at the amount received or receivable.
Government grants which are non-monetary assets are measured at fair value, or at nominal amount if the
fair value cannot be reliably measured.
(2) Judgment basis and accounting methods for government grants related to assets
Government grants which shall be used for constructing or otherwise forming long-term assets as
specified in government documents are classified as government grants related to assets. In the absence of
specific requirements in government documents, the determination is made according to basic conditions
for obtaining the grants; if constructing or otherwise forming long-term assets is treated as a basic condition,
the grants are classified as government grants related to assets. Government grants relating to assets are
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2021 Annual Report
offset against the carrying amount of such assets or recognized as deferred income. Government grants
relating to assets recognized as deferred income are charged to the profit or loss on a reasonable and
systematic basis over the useful lives of the relevant assets. Government grants measured at notional
amount are directly charged to the current profit or loss. For assets sold, transferred, disposed or damaged
prior to the end of their useful lives, balance of undistributed deferred income is transferred to the current
profit or loss from assert disposal.
(3) Judgment basis and accounting methods for the government grants related to revenue
Other than government grants related to assets, other government grants are government grants related
to revenue. The Company classifies government grants that contain both assets-related and revenue-related
portion or those that are difficult to distinguish as the ones related to revenue on an entire basis.
Government grants related to revenue and applied to the reimbursement of related costs or losses in
subsequent periods are recognized as deferred income and charged to the current profit or loss or offset
against the related costs for the period in which the related costs or losses are recognized. Government
grants, applied to the reimbursement of related costs or losses already incurred, are directly charged to the
current profit or loss or offset against the related costs.
(4) Government grants related to the Company's daily operations are charged to other income or offset
against relevant expenses according to the economic nature of business. Government grants not related to
the Company's daily operations are charged to the non-operating income or expenses.
41. Deferred tax assets / deferred tax liabilities
√Applicable □Not Applicable
(1) Deferred tax assets or deferred tax liabilities are recognized based on the difference between the
carrying amounts of the assets or liabilities and their tax bases (or, for an item not recognized as assets or
liabilities but whose tax base can be determined under tax laws, the difference between the tax base and the
carrying amount), and are calculated at the tax rates expected to apply to the period in which the assets are
recovered or the liabilities are settled.
(2) Deferred tax assets are recognized for all deductible temporary differences, to the extent that it is
probable that taxable profit will be available against which the deductible temporary differences can be
utilized. On the balance sheet date, deferred tax assets unrecognized in prior periods are recognized to the
extent that there is obvious evidence that it has become probable that sufficient taxable profit will be
available in subsequent periods against which the deductible temporary differences can be utilized.
(3) The carrying amount of deferred tax assets is reviewed on the balance sheet date and written
down to the extent that it is no longer probable that sufficient taxable profit will be available against which
the deferred tax asset can be utilized. Such amount is written back to the extent that it has become probable
that sufficient taxable profit will be available.
(4) The Company's current and deferred income taxes are charged to the current profit or loss as tax
expense or profit, excluding income tax arising from 1) the business combination, and 2) transactions or
items directly recognized in equity.
42. Leases
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(1). Accounting method for operating leases
□Applicable √Not Applicable
(2). Accounting method for finance leases
□Applicable √Not Applicable
(3). Lease recognition and accounting methods under the new lease standards
√Applicable □Not Applicable
1) The Company as the leasee
On the commencement date of the lease term, the Company recognizes leases with a lease term of not
more than 12 months and without a purchase option as short-term leases and leases with a lower value
when the single leased asset is a brand-new asset as leases of low-value assets. Where the Company
subleases or intends to sublease the leased asset, the original lease shall not be recognized as a lease of
low-value assets.
For all short-term leases and leases of low-value assets, the Company charges lease payments on a
straight-line basis over the respective periods of the lease term to the cost of the related assets or to the
current profit or loss.
Except for the above short-term leases and leases of low-value assets that are simplified, the Company
recognizes right-of-use assets and lease liabilities for leases at the beginning of the lease term.
2) The Company as the leaser
On the commencement date of the lease term, the Company recognizes a lease that transfers
substantially all the risks and rewards associated with the ownership of the leased asset as a finance lease,
except for those that are recognized as operating leases.
① Operating leases
During each period of the lease term, the Company recognizes lease receipts as rental income on a
straight-line basis, and capitalizes and apportions the initial direct costs incurred on the same basis as rental
income, which shall be charged to the current profit or loss. The variable lease receipts obtained by the
Company related to operating leases and not charged to the lease receipts shall be charged to the current
profit and loss when actually incurred.
② Finance leases
On the commencement date of the lease term, the Company recognizes finance lease receipts at the net
lease investment (the sum of the unguaranteed residual value and the present value of the lease receipts not
yet received on the commencement date of the lease term discounted at the interest rate of the lease) and
derecognizes the finance lease assets. During each period of the lease term, the Company calculates and
recognizes interest income at the interest rate of the lease.
Variable lease payments obtained by the Company but not considered in the measurement of net
investment in leases are recognized in the current profit or loss when actually incurred.
3) Leaseback
① The Company as the lessee
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The Company assesses and determines whether the transfer of assets in leaseback transactions can be
recognized as sales in accordance with the provisions of the ASBE No. 14 - Revenue.
If so, the Company measures the right-of-use assets from the leaseback at the portion of the original
asset's carrying amount related to the right of use acquired by the leaseback and recognizes gains or losses
related to the right transferred to the lessor only.
If not, the Company continues to recognize the transferred assets as well as a financial liability equal
to the transfer proceeds and carries out accounting on the financial liability in accordance with the ASBE
No. 22 - Recognition and Measurement of Financial Instruments.
② The Company as the leaser
The Company assesses and determines whether the transfer of assets in leaseback transactions can be
recognized as sales in accordance with the provisions of the ASBE No. 14 - Revenue.
If so, the Company carries out accounting on the purchase of assets in accordance with other
applicable ASBEs and on the lease of assets in accordance with the ASBE No. 21 - Leases.
If not, the Company does not recognize the transferred assets but recognizes a financial asset equal to the
transfer proceeds and carries out accounting on the financial asset in accordance with the ASBE No. 22 -
Recognition and Measurement of Financial Instruments.
43. Other significant accounting policies and accounting estimates
√Applicable □Not Applicable
(1) Accounting method for maintenance funds
According to the relevant provisions at the location of the developed projects, the maintenance funds
should be withdrawn from the purchaser and stated by the Company as development costs of relevant
developed projects at the time of sale (presale) of the developed projects and uniformly turned in to the
maintenance fund management department.
(2) Accounting method for quality assurance funds
The quality assurance funds should be deducted from the project funds for the construction contractor
according to the construction contracts. Maintenance expenses incurred in the warranty period of the
developed projects should be written down by the quality assurance funds. The balance of the quality
assurance funds should be returned to the construction contractor upon the expiry of the specified warranty
period in the development of products.
(3) Segment reporting
The Company determines the operating segments on the basis of the internal organizational structure,
management requirements and internal reporting system. The operating segment of the Company refers to
the component that meets all of the following conditions:
1) The component can generate incomes and incur expenses in daily activities;
2) The management can regularly evaluate the operating results of the component to determine the
allocation of resources and assess its performance;
3) The financial position, operating results, cash flow and other relevant accounting information of
the component can be obtained through analysis.
(4) Accounting method related to repurchase of the Company’s shares
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If the Company’s shares are repurchased due to a reduction in registered capital or reward for
employees, the amount actually paid should be regarded as treasury shares and registered for reference. If
the shares repurchased are canceled, the capital reserve will be written down by the difference between the
total par value of shares calculated from the par value and the number of the canceled shares and the
amount actually paid for repurchase. If the capital reserve is insufficient to be written down, retained
earnings shall be written down. If the repurchased shares are awarded to the Company's employees as
equity-settled share payment, the cost of treasury shares delivered to the employees and the accumulative
amount of capital reserve (other capital reserves) during the vesting period should be written off when the
employees receive the payment for purchasing the shares of the Company through the exercise of their
rights. Meanwhile, the capital reserve (equity premium) is adjusted based on the difference.
44. Changes in significant accounting policies and accounting estimates
(1). Changes in significant accounting policies
√Applicable □Not Applicable
Other Description
Accounting policy changes caused by changes in enterprise accounting standards:
1) The Company implemented the revised Accounting Standards for Business Enterprises No. 21 -
Leases (hereinafter referred to as the new lease standards) from January 1, 2021 (hereinafter referred to as
the First Implementation Date).
① For contracts that existed before the First Implementation Date, the Company chose not to reassess
whether these contracts are lease contracts or contracts containing provisions on leases.
② For leases in which the Company was the lessee, the Company adjusted the retained earnings and
the amount of other relevant items in financial statements at the beginning of the Reporting Period with
regard to the cumulative impact of applying the new lease standards and the previous standards on the First
Implementation Date, without adjusting the items during comparable periods. The specific process is as
follows.
For operating leases before the First Implementation Date, the Company measured the lease liabilities
on the First Implementation Date based on the present value of the remaining lease payments discounted at
the Company's incremental borrowing rate as of the First Implementation Date, and measured the
right-of-use assets by the carrying value obtained as if the Company adopted the new lease standards from
the commencement date of the lease term (discounted at the Company's incremental borrowing rate as of
the First Implementation Date) and the properly adjusted advance rental payments.
On the First Implementation Date, the Company conducted an impairment test on the right-of-use
assets and carries out corresponding accounting in accordance with the provisions of Note V (30) to the
financial statements.
A. The principal effects of the implementation of the new lease standards on the Company's financial
statements as of January 1, 2021 are as follows.
Unit: Yuan Currency: RMB
Balance Sheet
Item
December 31, 2020 Adjustment effects of new January 1, 2021
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2021 Annual Report
lease standards
Right-of-use assets 10,271,192.32 10,271,192.32
Prepayments 9,007,186.01 -834,932.30 8,172,253.71
Lease liabilities 2,654,639.37 2,654,639.37
Current portion of non-current
7,111,829.18 7,111,829.18
liabilities
Provision for liabilities 12,147,826.09 100,000.00 12,247,826.09
Surplus reserve 195,947,299.77 -4,502.28 195,942,797.49
Undistributed profits 2,893,625,565.93 -291,827.99 2,893,333,737.94
Minority interests 483,731,488.14 -133,878.26 483,597,609.88
B. The weighted average of the Company's incremental borrowing rates used for lease liabilities
charged to the Balance Sheet on the First Implementation Date was 4.71%.
C. Operating leases before the First Implementation Date were simplified
a. The Company simplified leases that had been completed within 12 months after the First
Implementation Date, with right-of-use assets and lease liabilities not recognized.
b. The Company adopted the same discount rate for lease contracts with similar characteristics when
measuring the lease liabilities.
c. No initial direct costs were included in the measurement of right-to-use assets.
d. The Company determined the term of the lease based on the actual exercise of the renewal option or
termination option before the First Implementation Date and other updates.
e. As an alternative to the impairment test of the right-of-use assets, the Company assessed whether
the contracts containing provisions on leases were onerous contracts before the First Implementation Date
in accordance with the Accounting Standards for Business Enterprises No. 13 – Contingencies, and
adjusted the right-of-use assets by the amount of the provision for losses charged on the balance sheet date
before the First Implementation Date.
f. In case of any changes in leases before the First Implementation Date, the Company carried out
accounting based on the final arrangement of the changes in leases.
The simplifications above had no significant impact on the Company's financial statements.
③ The Company simplified operating lease contracts with low-value assets that existed before the
First Implementation Date, with the right-of-use assets and lease liabilities not recognized, and carried out
accounting in accordance with the new lease standards from the First Implementation Date.
④ For lease contracts in which the Company was the lessor, the Company carried out accounting in
accordance with the new lease standards from the First Implementation Date.
2) On January 26, 2021, the Company implemented the Interpretation No. 14 of Accounting
Standards for Business Enterprises issued by the Ministry of Finance in 2021, and this change in
accounting policies had no impact on the Company's financial statements.
3) On December 31, 2021, the Company implemented the provisions of the Interpretation No. 15 of
Accounting Standard for Business Enterprises issued by the Ministry of Finance, and this change in
accounting policies had no impact on the Company's financial statements.
(2). Changes in significant accounting estimates
□Applicable √Not Applicable
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2021 Annual Report
(3). Changes in the financial statements at the beginning of the year when the New Lease Standards
were first implemented in 2021
√Applicable □Not Applicable
Consolidated Balance Sheet
Unit: Yuan Currency: RMB
Item December 31, 2020 January 1, 2021 Adjustments
Current assets:
Cash and bank balances 1,374,842,591.24 1,374,842,591.24
Balances with clearing companies
Placements with banks and other financial
institutions
Held-for-trading financial assets 2,723,350,172.04 2,723,350,172.04
Derivative financial assets
Bills receivable 194,609.13 194,609.13
Accounts receivable 523,273,534.51 523,273,534.51
Receivables financing
Prepayments 9,007,186.01 8,172,253.71 -834,932.30
Premium receivables
Reinsurance account receivables
Deposit receivables from reinsurance
contracts
Other receivables 27,411,805.19 27,411,805.19
Including: Interest receivables
Dividend receivables
Financial assets held under resale
agreements
Inventories 351,690,935.90 351,690,935.90
Contract assets 34,180,843.24 34,180,843.24
Held-for-sale assets
Current portion of non-current assets
Other current assets 10,342,520.82 10,342,520.82
Total current assets 5,054,294,198.08 5,053,459,265.78 -834,932.30
Non-current assets:
Loans and advances to customers
Debt investments
Other debt investments 83,845,382.74 83,845,382.74
Long-term receivables
Long-term equity investments 738,974,733.43 738,974,733.43
Other equity instrument investments
Other non-current financial assets 2,229,463,162.16 2,229,463,162.16
Investment properties 111,411,248.79 111,411,248.79
Fixed assets 472,506,719.88 472,506,719.88
Construction in progress 732,254,664.28 732,254,664.28
Productive biological assets
Oil and gas assets
Right-of-use assets 10,271,192.32 10,271,192.32
Intangible assets 161,012,651.89 161,012,651.89
Development expenditure
Goodwill 312,158,890.50 312,158,890.50
Long-term prepaid expense 3,370,336.31 3,370,336.31
Deferred income tax assets 71,410,701.28 71,410,701.28
Other non-current assets 441,999.00 441,999.00
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2021 Annual Report
Total non-current assets 4,916,850,490.26 4,927,121,682.58 10,271,192.32
Total assets 9,971,144,688.34 9,980,580,948.36 9,436,260.02
Current liabilities:
Short-term borrowings 46,718,265.90 46,718,265.90
Borrowings from the central bank
Placements from banks and other financial
institutions
Held-for-trading financial liabilities
Derivative financial liabilities
Bills payable
Accounts payable 192,172,938.77 192,172,938.77
Advances from customers 1,491,017.37 1,491,017.37
Contract liabilities 3,107,149,920.44 3,107,149,920.44
Financial assets sold under repurchase
agreements
Deposits from banks and other financial
institutions
Customer deposits for securities trading
Customer deposits for securities
underwriting
Employee compensation payable 647,448,189.72 647,448,189.72
Taxes payable 187,413,250.40 187,413,250.40
Other payables 128,629,520.86 128,629,520.86
Including: Interest payable
Dividends payable
Handling charges and commission payable
Reinsurance accounts payable
Held-for-sale liabilities
Current portion of non-current liabilities 7,111,829.18 7,111,829.18
Other current liabilities 305,258,151.46 305,258,151.46
Total current liabilities 4,616,281,254.92 4,623,393,084.10 7,111,829.18
Non-current liabilities:
Deposits for insurance contracts
Long-term borrowings 206,090,358.06 206,090,358.06
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 2,654,639.37 2,654,639.37
Long-term accounts payable
Long-term employee remuneration payable
Provision for liabilities 12,147,826.09 12,247,826.09 100,000.00
Deferred income 56,385,848.47 56,385,848.47
Deferred income tax liabilities 42,478,589.07 42,478,589.07
Other non-current liabilities
Total non-current liabilities 317,102,621.69 319,857,261.06 2,754,639.37
Total liabilities 4,933,383,876.61 4,943,250,345.16 9,866,468.55
Owners' equity (or shareholders' equity):
Paid-up capital (or share capital) 1,044,090,754.00 1,044,090,754.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 545,385,635.52 545,385,635.52
Less: Treasury stocks 117,376,268.28 117,376,268.28
Other comprehensive income -7,643,663.35 -7,643,663.35
Special reserves
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2021 Annual Report
Surplus reserve 195,947,299.77 195,942,797.49 -4,502.28
General risk reserve
Undistributed profits 2,893,625,565.93 2,893,333,737.94 -291,827.99
Total equity attributable to owners (or
4,554,029,323.59 4,553,732,993.32 -296,330.27
shareholders) of the parent company
Minority interests 483,731,488.14 483,597,609.88 -133,878.26
Total owners' equity (or shareholders'
5,037,760,811.73 5,037,330,603.20 -430,208.53
equity)
Total liabilities and owners' equity (or
9,971,144,688.34 9,980,580,948.36 9,436,260.02
shareholders' equity)
Description of adjustments of each item:
□Applicable √Not Applicable
Balance Sheet of Parent Company
Unit: Yuan Currency: RMB
Item December 31, 2020 January 1, 2021 Adjustments
Current assets:
Cash and bank balances 628,498,594.80 628,498,594.80
Held-for-trading financial assets 1,833,907,601.08 1,833,907,601.08
Derivative financial assets
Bills receivable 194,609.13 194,609.13
Accounts receivable 427,331,540.43 427,331,540.43
Receivables financing
Prepayments 30,871,016.72 30,532,426.68 -338,590.04
Other receivables 43,769,249.04 43,769,249.04
Including: Interest receivables
Dividend receivables
Inventories 325,151,655.77 325,151,655.77
Contract assets 31,553,316.68 31,553,316.68
Held-for-sale assets
Current portion of non-current assets
Other current assets 5,647,177.34 5,647,177.34
Total current assets 3,326,924,760.99 3,326,586,170.95 -338,590.04
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 2,419,704,939.59 2,419,704,939.59
Other equity instrument investments
Other non-current financial assets 2,050,871,495.84 2,050,871,495.84
Investment properties 8,184,029.66 8,184,029.66
Fixed assets 399,589,221.27 399,589,221.27
Construction in progress 456,818,577.02 456,818,577.02
Productive biological assets
Oil and gas assets
Right-of-use assets 7,423,409.28 7,423,409.28
Intangible assets 146,164,296.77 146,164,296.77
Development expenditure
Goodwill
Long-term prepaid expense 2,380,469.45 2,380,469.45
Deferred income tax assets 91,506,512.97 91,506,512.97
Other non-current assets 441,999.00 441,999.00
Total non-current assets 5,575,661,541.57 5,583,084,950.85 7,423,409.28
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2021 Annual Report
Total assets 8,902,586,302.56 8,909,671,121.80 7,084,819.24
Current liabilities:
Short-term borrowings
Held-for-trading financial liabilities
Derivative financial liabilities
Bills payable
Accounts payable 197,656,300.15 197,656,300.15
Advances from customers
Contract liabilities 2,795,258,134.72 2,795,258,134.72
Employee compensation payable 515,782,981.89 515,782,981.89
Taxes payable 152,414,189.43 152,414,189.43
Other payables 83,908,718.54 83,908,718.54
Including: Interest payable
Dividends payable
Held-for-sale liabilities
Current portion of non-current
liabilities
Other current liabilities
Total current liabilities 3,745,020,324.73 3,745,020,324.73
Non-current liabilities:
Long-term borrowings 122,536,819.73 122,536,819.73
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 7,129,842.08 7,129,842.08
Long-term accounts payable
Long-term employee remuneration
payable
Provision for liabilities 11,269,713.18 11,269,713.18
Deferred income 56,183,143.62 56,183,143.62
Deferred income tax liabilities 39,723,311.77 39,723,311.77
Other non-current liabilities
Total non-current liabilities 229,712,988.30 236,842,830.38 7,129,842.08
Total liabilities 3,974,733,313.03 3,981,863,155.11 7,129,842.08
Owners' equity (or shareholders' equity):
Paid-up capital (or share capital) 1,044,090,754.00 1,044,090,754.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 284,304,968.23 284,304,968.23
Less: Treasury stocks 117,376,268.28 117,376,268.28
Other comprehensive income 346,075.73 346,075.73
Special reserves
Surplus reserve 533,516,976.26 533,512,473.98 -4,502.28
Undistributed profits 3,182,970,483.59 3,182,929,963.03 -40,520.56
Total owners' equity (or
4,927,852,989.53 4,927,807,966.69 -45,022.84
shareholders' equity)
Total liabilities and owners' equity
8,902,586,302.56 8,909,671,121.80 7,084,819.24
(or shareholders' equity)
Description of adjustments of each item:
□Applicable √Not Applicable
(4). Note on retroactive adjustments of previous comparative data when the New Lease Standards
were first implemented in 2021
132 / 243
2021 Annual Report
□Applicable √Not Applicable
45. Others
□Applicable √Not Applicable
VI. TAXES
1. Main taxes and rates
Main taxes and rates
√Applicable □Not Applicable
Taxes Tax basis Tax rate
Value-added tax (VAT) The output VAT is calculated from the revenue from
sales of goods or rendering of services in accordance
with the tax law, net of the input VAT that is allowed to 3%、5%、6%、9%、13%
be deducted in the current period, the difference is VAT
payable
Urban maintenance and
Turnover tax actually paid 1%、7%
construction tax
Enterprise income tax Taxable income For details, please refer to the disclosure
statement of taxable entities with different
corporate income tax rates
Land appreciation tax Appreciation tax resulting from the paid transfer of use According to the document GSF [2010]
right of state-owned land, and property right of No. 53 issued by the State Taxation
above-ground structures and other attachments Administration and the relevant
regulations of local tax bureaus where real
estate projects are developed, subsidiaries
engaged in real estate development accrue
and prepay land appreciation tax based on
a certain percentage of real estate sales
revenue and advance receipts and apply to
the tax authorities for liquidation after the
projects are fully completed and sales
target is achieved.
Property tax For ad valorem collection,1.2% of the remaining value 1.2%、12%
after 30% of the original value of the property is
deducted by lump sum; for rent-based collection, 12%
of the rental income
Educational surcharge Turnover tax actually paid 3%
Local education Turnover tax actually paid 2%
surcharges
Disclosure statement of taxable entities with different corporate income tax rates
√Applicable □Not Applicable
Name of taxable entity Income tax rate (%)
The Company 10%
Quzhou Hundsun, Shaoxing Henghui, Wuxi Henghua, Beijing
Qiantang, Shanghai Yirui, Hangzhou Beiying, Shanghai Liming,
Hangzhou Yunhui, Yunlian Network, Shanshang Network, Beijing
Xinruanfu, Hangzhou Yima, Guangdong Institute of Finance,
Shenzhen Softbi, Shengtian Network, and Shenzhen Yungang [Note
7]
Data Security, Shanghai Gildata, Hangzhou Gildata, Cloudwing 15%
Network, Yunyong Network, Cloudbroker Network, Jingteng
Network, Shanghai Genus, and Hundsun iBontal
Cloudyee Network, and Wengine Network 12.5%
Hangzhou Xinglu, Wuxi Xinglu, Nanjing Xingcheng, and Nanjing
Xingding [Note 8]
Overseas subsidiaries Japan Hundsun, Hundsun International
Technologies, Hundsun Ayers, Hundsun HK, Ayers Technologies
133 / 243
2021 Annual Report
(Singapore), Hundsun U.S., Intercontinental Holdings, Chain Next,
Hundsun International, Hundsun Holdings, Hundsun IHS Markit
(Hong Kong), and GenSys [Note 9]
Other taxable entities other than the above 25%
[Note 7] Taxes are paid at the prescribed rate for small and micro enterprises.
[Note 8] These subsidiaries are partnership enterprises and the income tax rate is not applicable.
[Note 9] Taxes are paid at the rates prescribed by the jurisdictions in which they operate.
2. Tax preferences
√Applicable □Not Applicable
(1) In accordance with the requirements of the document (CS [2011] No. 100) issued by the Ministry
of Finance and the State Taxation Administration, the taxes of sales of software products (sales of
self-developed and produced software products and not accompanied by a transfer of copyrights and
ownership) of the Company and its subsidiaries and software service revenue (version upgrade services)
shall be paid at a rate of 13%, and the refund policies will be applied for the excess of the actual tax burden
over 3% upon verification by the competent tax authorities.
(2) As certified by Zhejiang Provincial Development and Reform Commission, the Company is a
key software enterprise within the national planning layout. In accordance with the relevant provisions of
the Notice on Issues Concerning Preferential Policies on Corporate Income Tax for Software and Integrated
Circuit Industry (CS [2016] No. 49) issued by the Ministry of Finance and the State Taxation
Administration, the Company is entitled to the preferential income tax policy for key software and
integrated circuit design enterprises within the national planning layout. The corporate income tax was paid
at a rate of 10% in the current period.
(3) In accordance with the relevant provisions of Measures for the Administration of the Recognition
of High-tech Enterprises (GKFH [2016] No. 32) and the Guidelines for the Recognition Management of
High-tech Enterprises (GKFH [2016] No. 195) issued by the Ministry of Science and Technology, the
Ministry of Finance and State Taxation Administration, Data Security, Yunyong Network, Cloudbroker
Network have been recognized as high-tech enterprises since 2018, with a valid period of three years, the
Company applied for the review of the valid period in the current period and thus these subsidiaries paid
their corporate income taxes at a temporary rate of 15% in the current period. Shanghai Gildata and
Shanghai Genus have been recognized as high-tech enterprises since 2019, with a valid period of three
years. Cloudwing Network, Hangzhou Gildata and Hangzhou Gildata have been recognized as high-tech
enterprises since 2020, with a valid period of three years, and paid their corporate income taxes at a rate of
15% in the current period.
(4) According to the Notice of the Ministry of Finance and the State Administration of Taxation on
the Implementation of Preferential Income Tax Policies for Small and Micro Enterprises (CS[2019] No. 13)
and the Announcement on Matters Relating to the Implementation of Preferential Income Tax Policies to
Support the Development of Small and Micro Enterprises and Individual Industrial and Commercial
Households (SAT Announcement No. 8 of 2021), Shanghai Yirui, Beijing Qiantang, Hangzhou Beiying,
Shanghai Liming, Hangzhou Yunhui, Yunlian Network, Shanshang Network, Beijing Xinruanfu,
Hangzhou Yima, Guangdong Institute of Finance, Business Intelligence (Hangzhou), Shengtian Network,
134 / 243
2021 Annual Report
Quzhou Hundsun, Shaoxing Henghui, Wuxi Henghua and Shenzhen Yungang were qualified as small and
micro enterprises in the current period. Small low-profit enterprises with an annual taxable income not
exceeding RMB1 million shall reduce their taxable income by 12.5% and be subject to a corporate income
tax at a rate of 20%. Those with an annual taxable income exceeding RMB1 million but not exceeding
RMB3 million shall reduce their taxable income by 50% and be subject to a corporate income tax at a rate
of 20%.
(5) In accordance with the provisions of the Announcement on Corporate Income Tax Policies for
Integrated Circuit Design and Software Industries [2019 No. 68] issued by the Ministry of Finance and
State Taxation Administration, software enterprises, established in accordance with the law and eligible for
the preferential period calculated from the profit-making year before December 31, 2018, shall be exempt
from corporate income tax from the first year to the second year and pay corporate income tax at a reduced
statutory tax rate of 25% from the third year to the fifth year. The current period is the third profit-making
year of Wengine Network, so this subsidiary is exempt from income tax. The current period is the fourth
profit-making year of Cloudyee Network, so this subsidiary pays half of its income tax.
(6) In accordance with the Notice of the Ministry of Finance and the State Administration of Taxation
on the Policies and Catalogue of Income Tax Preferences for Enterprises in Guangdong Hengqin New Area,
Fujian Pingtan Comprehensive Experimental Zone, and Shenzhen Qianhai Shenzhen-Hong Kong Modern
Service Industry Cooperative Zone (CS [2014] No. 26) issued by Ministry of Finance and the State
Administration of Taxation, enterprises in encouraged industries located in Hengqin New Zone, Pingtan
Comprehensive Experimental Zone and Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry
Cooperative Zone shall pay their corporate income tax at a reduced rate of 15% till December 31, 2020. In
accordance with the provisions of the Administrative Rules of Shenzhen Municipality on the Making of
Normative Documents of Administrative Organizations (Order 305 of the Shenzhen Municipal People's
Government), it is decided through deliberation to renew the Operational Guidelines on Recognizing the
Enterprises Enjoying Reduced CIT in Qianhai Shenzhen-Hong Kong Modern Services Industry
Cooperation Zone (Trial) (SQHG [2018] No. 4), which is effective from August 1, 2020 to December 31,
2021. Therefore, Hundsun iBontal paid its corporate income tax at a reduced rate of 15% at a discount of
10% in the current period.
3. Others
□Applicable √Not Applicable
VII. NOTES ON THE MAIN ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
1. Cash and bank balances
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Cash on hand 365,020.30 680,095.55
Bank deposits 1,707,660,259.64 1,271,428,003.78
Other cash and bank balances 19,679,566.66 102,734,491.91
Total 1,727,704,846.60 1,374,842,591.24
135 / 243
2021 Annual Report
Item Closing balance Opening balance
Including: total amount
112,690,519.32 92,131,259.64
deposited abroad
Other Description
(1) Centralized management of funds
Hundsun iBontal, a subsidiary incorporated into the scope of consolidation during the period, has
entered into the Group Funds Pooling Agreement with its former controlling shareholder, Shenzhen Sunline
Tech Co., Ltd., which has not been dissolved as of December 31, 2021, so there is no balance of funds
allocated to or from Hundsun iBontal. Other than the above, the Company does not manage its funds in a
centralized manner.
(2) Other notes
Other cash and bank balances at the end of the period include a guarantee deposit of RMB
4,270,755.00, which is restricted in use.
2. Held-for-trading financial assets
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Financial assets at fair value through profit or loss 1,991,523,094.74 2,723,350,172.04
Including:
Equity instrument investment 23,523,040.35 203,584,270.32
Debt instrument investment 32,058,053.43
Short-term bank wealth management 1,968,000,054.39 2,487,707,848.29
products and fund trust etc
Total 1,991,523,094.74 2,723,350,172.04
Other notes:
□Applicable √Not Applicable
3. Derivative financial assets
□Applicable √Not Applicable
4. Bills receivable
(1). Bills receivable by category
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Commercial acceptance bills 636,600.00 194,609.13
Total 636,600.00 194,609.13
(2). Pledged bills receivable by the Company as at the end of the period
□Applicable √Not Applicable
(3). Bills receivable endorsed or discounted by the Company at the end of the period and not yet due
on the balance sheet date
136 / 243
2021 Annual Report
□Applicable √Not Applicable
(4). Bills receivable transferred to accounts receivable by the Company due to non-performance by
the drawer at the end of the period
□Applicable √Not Applicable
(5). Disclosure by categories by means of allowance for bad debts
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Allowance for bad Allowance for bad
Class Book balance Book balance
debts Carrying debts Carrying
Proportion Proportion value Proportion Proportion value
Amount Amount Amount Amount
(%) (%) (%) (%)
Allowance
for bad
debts made
636,600.00 100.00 636,600.00 194,609.13 100.00 194,609.13
on a
collective
basis
Including:
Commercial
acceptance
636,600.00 100.00 636,600.00 194,609.13 100.00 194,609.13
bill
receivable
Total 636,600.00 / / 636,600.00 194,609.13 / / 194,609.13
Allowance for bad debts made on an individual basis:
□Applicable √Not Applicable
Allowance for bad debts made on a collective basis:
√Applicable □Not Applicable
Item for which allowance was made on a collective basis: commercial acceptance bills receivable
Unit: Yuan Currency: RMB
Closing balance
Name
Bills receivable Allowance for bad debts Provision (%)
Commercial acceptance bill 636,600.00
receivable
Total 636,600.00
Recognition criteria and description of allowance for bad debts made on a collective basis
√Applicable □Not Applicable
Expected credit losses are calculated by referring to historical credit loss experience and based on
current conditions and forecasts of future economic conditions through default exposures and expected
credit loss rates throughout the duration.
If allowance for bad debts is made as per the general model of ECL, please refer to the disclosure of other
receivables:
□Applicable √Not Applicable
(6). Allowance for bad debts
137 / 243
2021 Annual Report
□Applicable √Not Applicable
(7). Actual write-off of bills receivable in the current period
□Applicable √Not Applicable
Other Description
□Applicable √Not Applicable
5. Accounts receivable
(1). Disclosure by aging
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Aging Closing book balance
Sub-total within 1 year 629,478,391.81
1-2 years 147,974,035.69
2-3 years 49,134,360.65
Over 3 years 119,133,613.87
Total 945,720,402.02
138 / 243
2021 Annual Report
(2). Disclosure by category by means of allowance for bad debts
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Book balance Allowance for bad debts Book balance Allowance for bad debts
Class Carrying
Proportion Proportion Proportion Proportion Carrying value
Amount Amount value Amount Amount
(%) (%) (%) (%)
Allowance for bad debts
made on an individual 52,964,932.39 5.60 52,964,932.39 100.00 71,904,016.32 10.35 71,904,016.32 100.00
basis
Including:
Allowance for bad debts
made on a collective 892,755,469.63 94.40 129,839,262.13 14.54 762,916,207.50 623,053,966.31 89.65 99,780,431.80 16.01 523,273,534.51
basis
Including:
Aging portfolio 892,755,469.63 94.40 129,839,262.13 14.54 762,916,207.50 623,053,966.31 89.65 99,780,431.80 16.01 523,273,534.51
Total 945,720,402.02 / 182,804,194.52 / 762,916,207.50 694,957,982.63 / 171,684,448.12 / 523,273,534.51
139 / 243
2021 Annual Report
Allowance for bad debts made on an individual basis
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance
Name Allowance for bad
Book balance Provision (%) Reasons
debts
Amount of other software
52,964,932.39 52,964,932.39 100.00
services
Total 52,964,932.39 52,964,932.39 100.00 /
Allowance for bad debts made on an individual basis:
□Applicable √Not Applicable
Allowance for bad debts made on a collective basis:
√Applicable □Not Applicable
Item for which allowance was made on a collective basis: grouped by aging
Unit: Yuan Currency: RMB
Closing balance
Name
Accounts receivable Allowance for bad debts Provision (%)
Within 1 year 629,478,391.81 31,473,919.62 5.00
1-2 years 146,876,326.22 14,687,632.61 10.00
2-3 years 46,747,202.44 14,024,160.74 30.00
Over 3 years 69,653,549.16 69,653,549.16 100.00
Total 892,755,469.63 129,839,262.13 14.54
Recognition criteria and description of allowance for bad debts made on a collective basis:
√Applicable □Not Applicable
A table of aging of accounts receivable and lifetime expected credit loss rates is prepared, and the
expected credit loss is calculated, with reference to historical credit loss experience, in consideration of
current conditions and expectations of future economic conditions.
If allowance for bad debts is made as per the general model of ECL, please refer to the disclosure of other
receivables:
□Applicable √Not Applicable
(3). Allowance for bad debts
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Change during the current period
Opening Recovered
Class Write-off or Other Closing balance
balance Provision or
cancellation changes
reversed
Allowance for bad
debts made on an 71,904,016.32 1,066,721.15 20,005,805.08 52,964,932.39
individual basis
140 / 243
2021 Annual Report
Change during the current period
Opening Recovered
Class Write-off or Other Closing balance
balance Provision or
cancellation changes
reversed
Allowance for bad
debts made on a 99,780,431.80 30,058,830.33 129,839,262.13
collective basis
Total 171,684,448.12 31,125,551.48 20,005,805.08 182,804,194.52
The significant amount of provision reversal and recovery of bad debts in the current period:
□Applicable √Not Applicable
(4). Actual accounts receivable written off in the current period
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Write-off
Actual accounts receivable written off 20,005,805.08
Write-off of significant account receivables
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Nature of From related
Reason for Write-off procedures
Item accounts Write-off party transactions
write-off adopted
receivable or not
HOMS software sales Software sales 19,696,640.08 Expected Management approval N
receivable receivable unrecoverable
Total / 19,696,640.08 / / /
Notes on write-off of accounts receivable:
□Applicable √Not Applicable
(5). Top five account receivables according to closing balances grouped by the debtor
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Proportion in the total closing
Closing balance of allowance
Item Closing balance balance of accounts receivable
for bad debts
(%)
Customer 1 16,516,367.34 1.75 1,202,762.61
Customer 2 15,030,256.40 1.59 751,512.82
Customer 3 14,448,854.85 1.53 880,042.74
Customer 4 14,440,000.00 1.53 722,000.00
Customer 5 14,215,692.40 1.50 873,218.89
Total 74,651,170.99 7.90 4,429,537.06
(6). Accounts receivable derecognized due to the transfer of financial assets
□Applicable √Not Applicable
(7). Amount of assets or liabilities due to the transfer of accounts receivable and continuing
involvement
□Applicable √Not Applicable
141 / 243
2021 Annual Report
Other notes:
□Applicable √Not Applicable
6. Receivables financing
□Applicable √Not Applicable
7. Prepayments
(1). Disclosure by aging
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Aging
Amount Proportion (%) Amount Proportion (%)
Within 1 year 11,098,252.30 93.61 7,457,443.42 91.25
1-2 years 747,155.77 6.30 268,613.92 3.29
2-3 years 11,032.81 0.09 76,108.43 0.93
Over 3 years 370,087.94 4.53
Total 11,856,440.88 100.00 8,172,253.71 100.00
Explanation of reasons for delayed settlement of important prepayments with aging over 1 year:
[Note 10] The differences between the opening balances and the closing balances of the previous year
(December 31, 2020) are detailed in Note V (44) 1) of the financial statements.
(2). Top five prepayments according to closing balances grouped by prepayers
√Applicable □Not Applicable
Proportion in the total closing balance of
Item Closing balance
prepayments (%)
Customer 1 1,679,245.29 14.16
Customer 2 1,281,742.00 10.81
Customer 3 845,178.90 7.13
Customer 4 745,283.02 6.29
Customer 5 522,282.38 4.41
Total 5,073,731.59 42.80
Other Description
□Applicable √Not Applicable
8. Other receivables
Item
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Other receivables 30,706,405.33 27,411,805.19
Total 30,706,405.33 27,411,805.19
Other notes:
□Applicable √Not Applicable
142 / 243
2021 Annual Report
Interest receivable
(1). Classification of interest receivable
□Applicable √Not Applicable
(2). Significant overdue interest
□Applicable √Not Applicable
(3). Allowance for bad debts
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
Dividend receivables
(4). Dividend receivables
□Applicable √Not Applicable
(5). Significant dividends receivable with the aging over 1 year
□Applicable √Not Applicable
(6). Allowance for bad debts
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
Other receivables
(7). Disclosure by aging
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Aging Closing book balance
Sub-total within 1 year 24,814,884.87
1-2 years 4,359,327.23
2-3 years 4,684,100.30
Over 3 years 16,723,206.21
Total 50,581,518.61
(8). Other receivables by nature
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Nature Closing book balance Opening book balance
Deposits 35,970,661.72 28,336,515.98
Imprest fund 13,371,823.96 16,131,549.56
Current payments 2,200,000.00
Equity transfer payment 400,000.00
Others 1,239,032.93 541,210.83
143 / 243
2021 Annual Report
Nature Closing book balance Opening book balance
Total 50,581,518.61 47,609,276.37
(9). Allowance for bad debts
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Stage 1 Stage 2 Stage 3
Allowance for bad Expected credit loss
Lifetime ECL (not Lifetime ECL Total
debts ("ECL") over the
credit-impaired) (credit-impaired)
next 12 months
Balance as of January
949,777.35 934,546.27 18,313,147.56 20,197,471.18
1, 2021
Balance as of January
1, 2021 during the
period
- Transfer to stage 2 -217,966.36 217,966.36
- Transfer to stage 3 -558,410.03 558,410.03
- Reverse to stage 2
- Reverse to stage 1
Provision in the period 508,933.27 -158,169.88 -515,056.21 -164,292.82
Reversal in the period -50,000.00 -50,000.00
Write-off in the period
Cancellation in the
39,211.91 39,211.91
period
Other changes -168,853.17 -168,853.17
Balance as of
1,240,744.26 435,932.72 18,198,436.30 19,875,113.28
December 31, 2021
[Note 11]: Other changes represent transfers from business combinations, write-off transfers and the
exchanges in the exchange rate.
Notes on significant changes in the carrying amount of other receivables for which changes in the
allowance for losses occurred during the current period:
□Applicable √Not Applicable
Amount of allowance for bad debts for the current period and basis for evaluating whether the credit risk of
financial instruments increases significantly:
□Applicable √Not Applicable
(10). Allowance for bad debts
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Change during the current period
Opening
Class Recovered or Write-off or Closing balance
balance Provision Other changes
reversed cancellation
Allowance for bad
debts made on an 383,333.33 100,000.00 483,333.33
individual basis
Allowance for bad
debts made on a 19,814,137.85 -264,292.82 -50,000.00 39,211.91 -168,853.17 19,391,779.95
collective basis
Total 20,197,471.18 -164,292.82 -50,000.00 39,211.91 -168,853.17 19,875,113.28
144 / 243
2021 Annual Report
The significant transfers or reversals with allowance for bad debts during the current period:
□Applicable √Not Applicable
(11). Other receivables actually written off in the period
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Write-off
Other receivables actually written off 39,211.91
Write-off of significant other receivables:
□Applicable √Not Applicable
Notes on write-off of other receivables:
□Applicable √Not Applicable
(12). Top five other receivables according to closing balances grouped by the debtor
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Proportion in the
Closing balance of
total closing
Item Nature Closing balance Aging allowance for bad
balance of other
debts
receivables (%)
Customer 1 Deposits 7,771,000.00 Over 3 years 15.36 7,771,000.00
The amounts are
RMB990,911.12 for less than
1 year, RMB559,896.79 for
Customer 2 Deposits 2,570,069.22 5.08 860,634.52
1-2 years, RMB377,374.32 for
2-3 years and RMB641,886.99
for over 3 years, respectively
Customer 3 Deposits 1,711,300.41 Within 1 year 3.38 85,565.02
Deposits and
Customer 4 1,560,079.27 Within 1 year 3.08 78,003.96
advances
Customer 5 Deposits 1,509,817.02 2-3 years 2.98 452,945.11
Total / 15,122,265.92 / 29.88 9,248,148.61
(13). Receivables involving government grants
□Applicable √Not Applicable
(14). Other receivables derecognized due to the transfer of financial assets
□Applicable √Not Applicable
(15). Amount of assets or liabilities due to the transfer of other receivables and continuing
involvement
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
145 / 243
2021 Annual Report
9. Inventories
(1). Classification of inventories
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Provision for price
reduction of Provision for price
Item inventories/ reduction of
Book balance impairment Carrying value Book balance inventories/impairment Carrying value
provision for provision for contract
contract performance cost
performance cost
Raw materials 52,630.18 14,565.00 38,065.18 32,435.38 6,487.08 25,948.30
Finished goods 46,678,737.87 2,307,524.53 44,371,213.34 37,099,707.37 2,613,622.50 34,486,084.87
Contract
performance 425,709,305.22 3,236,969.83 422,472,335.39 317,035,369.52 317,035,369.52
costs
Consigned
processing 124,488.30 13,912.02 110,576.28 179,416.51 35,883.30 143,533.21
materials
Total 472,565,161.57 5,572,971.38 466,992,190.19 354,346,928.78 2,655,992.88 351,690,935.90
(2). Provision for price reduction of inventories and impairment provision for contract performance
cost
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Decrease in the current
Increase in the current period
Opening period
Item Closing balance
balance Reversal or
Provision Others Others
write-off
Raw materials 6,487.08 15,236.04 7,158.12 14,565.00
Finished goods 2,613,622.50 472,454.36 778,552.33 2,307,524.53
Contract performance
3,236,969.83 3,236,969.83
costs
Consigned processing
35,883.30 13,912.02 35,883.30 13,912.02
materials
Total 2,655,992.88 3,738,572.25 821,593.75 5,572,971.38
(3). Amount of capitalized borrowing costs included in the closing balance of inventories
□Applicable √Not Applicable
(4). Amortization amount of contract performance cost in the current period
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Impairment
Opening Increase in the current Amortization in the
Item provision in the Closing balance
balance period period
period [Note 12]
Employee
190,355,811.63 880,614,131.91 804,162,688.77 3,236,969.83 263,570,284.94
compensation
Travel expenses 39,774,847.51 125,435,003.08 102,749,424.74 62,460,425.85
Consulting fee for
82,833,777.75 192,660,239.60 182,033,472.51 93,460,544.84
special items
Others 4,070,932.63 14,159,819.63 15,249,672.50 2,981,079.76
Sub-total 317,035,369.52 1,212,869,194.22 1,104,195,258.52 3,236,969.83 422,472,335.39
146 / 243
2021 Annual Report
[Note 12] It is the amount of impairment provision for each item of contract performance cost
Other Description
□Applicable √Not Applicable
10. Contract assets
(1). Contract assets
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Carrying value Book balance Carrying value
provision provision
Retention
36,392,215.79 2,723,747.42 33,668,468.37 36,404,323.30 2,223,480.06 34,180,843.24
receivables
Total 36,392,215.79 2,723,747.42 33,668,468.37 36,404,323.30 2,223,480.06 34,180,843.24
(2). Amount and reasons for significant changes in carrying value during the Reporting Period
□Applicable √Not Applicable
(3). Provision for impairment of contract assets in the current period
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Reversal in the Cancellation
Provision in
Item period /write-off in the Reason
the period
current period
The expected credit loss is calculated, with
reference to historical credit loss experience, in
Provision made on a consideration of current conditions and
500,267.36
collective basis expectation of future economic conditions, and
based on the default risk exposure and lifetime
expected credit loss rate.
Total 500,267.36 /
If allowance for bad debts is made as per the general model of ECL, please refer to the disclosure of other
receivables:
□Applicable √Not Applicable
Other notes:
√Applicable □Not Applicable
Contract assets with impairment provision made on a collective basis: Unit: Yuan Currency: RMB
Closing balance
Item
Book balance Impairment provision Proportion (%)
Aging portfolio 36,392,215.79 2,723,747.42 7.48
Including: within 1 year 23,434,775.09 1,171,738.75 5.00
1-2 years 11,676,117.70 1,167,611.77 10.00
2-3 years 1,281,323.00 384,396.90 30.00
Sub-total 36,392,215.79 2,723,747.42 7.48
147 / 243
2021 Annual Report
11. Held-for-sale assets
□Applicable √Not Applicable
12. Current portion of non-current assets
□Applicable √Not Applicable
Significant debt investments and other debt investments as at the end of the period:
□Applicable √Not Applicable
Other Description
13. Other current assets
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Prepaid taxes 2,194,044.75 6,020,315.27
Input VAT to be deducted 6,478,276.96 4,322,205.55
Total 8,672,321.71 10,342,520.82
14. Debt investments
(1). Debt investments
□Applicable √Not Applicable
(2). Significant debt investments at the end of the period
□Applicable √Not Applicable
(3). Provision for impairment
□Applicable √Not Applicable
Amount of provision for impairment for the current period and basis for evaluating whether credit risk of
financial instruments increase significantly
□Applicable √Not Applicable
Other Description
□Applicable √Not Applicable
15. Other debt investments
(1). Other debt investments
√Applicable □Not Applicable
148 / 243
2021 Annual Report
Unit: Yuan Currency: RMB
Accumulated
Changes in allowance for
fair value Accumulated losses
Opening Accrued Closing Interest
Item in the Cost changes in recognized in Remark
balance interest balance adjustment
current fair value other
period comprehensive
income
Financial
83,845,382.74 582,743.09 -50,507.13 65,681,018.23 63,214,598.80 -302,830.41 2,186,506.75
bonds
Total 83,845,382.74 582,743.09 -50,507.13 65,681,018.23 63,214,598.80 -302,830.41 2,186,506.75 /
(2). Significant other debt investments at the end of the period
□Applicable √Not Applicable
(3). Provision for impairment
□Applicable √Not Applicable
Amount of provision for impairment for the current period and basis for evaluating whether credit risk of
financial instruments increase significantly
□Applicable √Not Applicable
Other notes:
√Applicable □Not Applicable
All other debt investments in the current period are financial bonds purchased from UBS Switzerland
AG (UBS) by Hundsun Ayers. As of December 31, 2021, the carrying value of bonds held by Hundsun
Ayers in a leased status amounted to RMB19,400,458.33.
16. Long-term receivables
(1). Long-term receivables
□Applicable √Not Applicable
(2). Allowance for bad debts
□Applicable √Not Applicable
Amount of allowance for bad debts for the current period and basis for evaluating whether the credit risk of
financial instruments increases significantly
□Applicable √Not Applicable
(3). Long-term receivables derecognized due to the transfer of financial assets
□Applicable √Not Applicable
(4). Amount of assets or liabilities due to the transfer of long-term receivables
□Applicable √Not Applicable
Other Description
□Applicable √Not Applicable
149 / 243
2021 Annual Report
17. Long-term equity investments
√Applicable □Not Applicable
Unit: 10,000 yuan Currency: RMB
Changes in the current period
Closing
Opening Investment Other Cash Closing balance of
Investee Other
balance Increase in Decrease in profit or loss comprehensive dividends Impairment balance impairment
changes in Others
investment investment recognized by income and profits provision provision
equity
equity method adjustments declared
I. Joint ventures
Sub-total
II. Associates
Ant (Hangzhou) Funds
13,547.81 12,079.21 23.64 25,650.66
Sales Co., Ltd.
Hangzhou Hundsun
3,981.77 -427.61 3,554.16
Century Industry Co., Ltd.
Shenzhen Trade Blazer
5,034.21 397.37 47.90 896.64 4,582.84 4,132.51
Technology Co., Ltd.
Hangzhou Rongdu Science
892.53 -194.51 698.02 1,647.27
& Technology Co., Ltd.
Zhejiang Santan
1,817.30 -492.55 1,324.75
Technology Co., Ltd.
Zhejiang Hundsun
Changyun Network 743.31 661.50 58.98 -140.79
Technology Co., Ltd.
Hangzhou Hundsun Yuntai
Network Technology Co., 3,288.42 3.70 -2,226.06 1,135.21 0.58 2,194.45
Ltd.
Guangdong Yuecai Internet
460.86 10.44 471.30
Finance Co., Ltd.
Beijing Hongtian Rongda
Information Technology 15.38 -15.38 235.09
Co., Ltd.
Golden State Investment
2,746.73 422.08 3,168.81
Services Co., Ltd.
Shenzhen Ricequant
2,009.96 -186.76 1,823.20 4,765.12
Technology Co., Ltd.
Fujian Trading Market
Registration and Settlement 776.05 -42.69 733.36
Center Co., Ltd.
150 / 243
2021 Annual Report
Hundsun Cloud Financing
Network Technology Co., 1,697.50 -164.16 865.43 2,398.77
Ltd.
Hangzhou Fupu Gongjin
Investment Partnership 2,332.02 410.62 2,742.64
(L.P.)
Hangzhou HISOME
Digital Equipment 2,455.68 594.40 3,050.08
Technology Co., Ltd.
Jiangxi Lianjiaoyun
Registration and Settlement 126.35 48.12 174.47
Center Co., Ltd.
Guangdong Yuecai Net
Small Loan Microfinance 2,178.81 16.79 2,195.60
Co., Ltd.
Shanghai Leanwork
Financial Information 742.15 -23.31 17.64 101.00 635.48 1,148.60
Service Co., Ltd.
Hangzhou Wanming
Digital Technology Co., 491.71 -3.66 488.05
Ltd.
Beijing Hezhi Xingtu
5,940.98 -462.78 191.09 5,669.29
Technology Co., Ltd.
Shanghai Dworld AI Tech
168.92 6,574.79 6,948.71 -197.44 402.44
Co., Ltd.
Hanzhou Eceyes Internet
6,450.66 350.13 -147.68 6,653.11
Financial Co., Ltd.
Zhejiang Zhongjin Xinzhi
Investment Management 362.34 70.00 339.55 166.08 605.81
Co., Ltd.
Beijing Yuntu Hanxing
Information Technology 1,054.31 11.25 661.00 404.56 661.00
Co., Ltd.
Zhejiang Baiying
2,768.45 -206.35 2,562.10
Technology Co., Ltd.
Hangzhou National
Software Industry Base 270.99 -39.03 231.96
Co., Ltd.
Zhejiang Institute of
Modern Capital and 2.91 -0.02 2.89
Industry
151 / 243
2021 Annual Report
Beijing Tongchuang
Yongyi Technology 5,240.51 -683.82 56.70 4,613.39
Development Co., Ltd.
Shanghai Qianyun
Information Technology 2,948.39 -158.32 2,790.07
Co., Ltd.
Databaker (Beijing)
3,350.45 -154.60 3,195.85
Technology Co., Ltd.
N2N CONNECT
15,868.40 450.23 819.17 15,499.46
BERHAD
Shanghai Yitongtou
1,350.00 -40.30 1.43 1,311.13
Technology Co., Ltd.
Nanjing Pengxi Equity
12,000.00 -331.57 11,668.43
Investment Center (L.P.)
Sub-total 73,897.46 35,863.19 7,613.91 9,138.25 2,191.36 1,881.89 762.00 262.23 111,094.69 12,589.59
Total 73,897.46 35,863.19 7,613.91 9,138.25 2,191.36 1,881.89 762.00 262.23 111,094.69 12,589.59
152 / 243
2021 Annual Report
18. Other equity instrument investments
(1). Investments in other equity instruments
□Applicable √Not Applicable
(2). Investments in non-trading equity instruments
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
19. Other non-current financial assets
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Financial assets at FVTPL 2,981,720,276.86 2,229,463,162.16
Including: Investments in equity instruments 1,740,015,513.31 1,082,289,046.68
Trust plans, other funds, etc. 1,241,704,763.55 1,147,174,115.48
Total 2,981,720,276.86 2,229,463,162.16
Other notes:
□Applicable √Not Applicable
20. Investment properties
Measurement model of investment properties
(1). Investment properties measured at cost
Unit: Yuan Currency: RMB
Item Houses and buildings Land use rights Total
I. Original carrying value
1. Opening balance 124,080,175.09 213,096.60 124,293,271.69
2. Increase in the current period 22,908,485.39 22,908,485.39
(1) Outsourcing
(2) Transferred from inventories, fixed
22,908,485.39 22,908,485.39
assets or construction in progress
(3) Increase from business combination
3. Decrease in the current period
(1) Disposal
(2) Other transfer-out
4. Closing balance 146,988,660.48 213,096.60 147,201,757.08
II. Accumulated depreciation and accumulated amortization
1. Opening balance 12,803,519.95 78,502.95 12,882,022.90
2. Increase in the current period 6,789,297.65 5,467.60 6,794,765.25
(1) Provision or amortization 3,665,073.08 5,467.60 3,670,540.68
(2) Transfer to fixed assets 3,124,224.57 3,124,224.57
3. Decrease in the current period
(1) Disposal
(2) Other transfer-out
4. Closing balance 19,592,817.60 83,970.55 19,676,788.15
153 / 243
2021 Annual Report
III. Provision for impairment
1. Opening balance
2. Increase in the current period
(1) Provision
3. Decrease in the current period
(1) Disposal
(2) Other transfer-out
4. Closing balance
IV. Carrying value
1. Closing carrying value 127,395,842.88 129,126.05 127,524,968.93
2. Opening carrying value 111,276,655.14 134,593.65 111,411,248.79
[Note 13] Houses and buildings include land use rights that have been leased but cannot be measured
separately.
(2). Investment properties without the title certificates
□Applicable √Not Applicable
Other Description
□Applicable √Not Applicable
21. Fixed assets
Item
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Fixed assets 1,679,515,491.95 472,506,719.88
Total 1,679,515,491.95 472,506,719.88
Other notes:
□Applicable √Not Applicable
Fixed assets
(1). Fixed assets
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Electronic
Item Buildings Vehicles Other equipment Total
equipment
I. Original carrying value:
1. Opening balance 435,780,902.06 257,193,424.47 12,276,984.60 69,733,338.71 774,984,649.84
2. Increase in the
1,124,188,866.43 77,790,130.55 1,088,735.41 92,812,285.17 1,295,880,017.56
current period
(1) Purchase 3,270,662.29 77,452,962.98 1,088,735.41 5,940,193.36 87,752,554.04
(2) Transfer to
1,120,918,204.14 86,774,294.09 1,207,692,498.23
construction in progress
(3) Increase from
541,967.34 117,229.59 659,196.93
business combination
(4) Effects from
translation of financial
-204,799.77 -19,431.87 -224,231.64
statements in foreign
currency
154 / 243
2021 Annual Report
3. Decrease in the
23,135,772.89 5,617,118.30 836,221.40 2,300,104.67 31,889,217.26
current period
(1) Disposal or
227,287.50 5,617,118.30 836,221.40 2,300,104.67 8,980,731.87
retirement
(2) Transfer to
22,908,485.39 22,908,485.39
investment properties
(3) Consolidated
Transfer-out
(4) Effects from
translation of financial
statements in foreign
currency
4. Closing balance 1,536,833,995.60 329,366,436.72 12,529,498.61 160,245,519.21 2,038,975,450.14
II. Accumulated depreciation
1. Opening balance 93,957,222.83 155,476,628.78 7,243,647.95 45,800,176.39 302,477,675.95
2. Increase in the
18,067,519.90 43,386,259.79 1,408,111.80 5,237,528.04 68,099,419.53
current period
(1) Provision 18,124,822.10 43,219,816.54 1,340,121.88 5,094,427.59 67,779,188.11
(2) Increase from
330,122.61 67,989.92 159,253.87 557,366.40
business combination
(3) Effects from
translation of financial
-57,302.20 -163,679.36 -16,153.42 -237,134.98
statements in foreign
currency
3. Decrease in the
3,351,512.07 5,291,892.44 746,286.75 1,727,700.04 11,117,391.30
current period
(1) Disposal or
227,287.50 5,291,892.44 746,286.75 1,727,700.04 7,993,166.73
retirement
(2) Transfer to
3,124,224.57 3,124,224.57
investment properties
(3) Effects from
translation of financial
statements in foreign
currency
4. Closing balance 108,673,230.66 193,570,996.13 7,905,473.00 49,310,004.39 359,459,704.18
III. Provision for impairment
1. Opening balance 254.01 254.01
2. Increase in the
current period
(1) Provision
3. Decrease in the
current period
(1) Disposal or
retirement
4. Closing balance 254.01 254.01
IV. Carrying value
1. Closing carrying
1,428,160,764.94 135,795,440.59 4,624,025.61 110,935,260.81 1,679,515,491.95
value
2. Opening carrying
341,823,679.23 101,716,795.69 5,033,336.65 23,932,908.31 472,506,719.88
value
[Note 14] Houses and buildings include land use rights that cannot be measured separately.
(2). Temporary idle fixed assets
□Applicable √Not Applicable
(3). Fixed assets rented in through financing lease
□Applicable √Not Applicable
(4). Fixed assets rented out through operating lease
155 / 243
2021 Annual Report
□Applicable √Not Applicable
(5). Fixed assets without the title certificate
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Carrying value Reason
Hundsun Cloud Production Base (Phase I) 847,466,919.52 In process
Other notes:
□Applicable √Not Applicable
Disposal of fixed assets
□Applicable √Not Applicable
22. Construction in progress
Items
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Construction in progress 26,357,513.90 732,254,664.28
Total 26,357,513.90 732,254,664.28
Other notes:
□Applicable √Not Applicable
Construction in progress
(1). Construction in progress
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Carrying value Book balance Carrying value
provision provision
Hundsun Cloud
Production Base 455,668,473.90 455,668,473.90
(Phase I)
Hundsun Cloud
Production Base 25,139,995.40 25,139,995.40 1,150,103.12 1,150,103.12
(Phase II)
Wong Chuk Hang
Office Building in 275,436,087.26 275,436,087.26
Hong Kong
Sporadic projects 1,217,518.50 1,217,518.50
Total 26,357,513.90 26,357,513.90 732,254,664.28 732,254,664.28
(2). Significant changes in CIP during the period
√Applicable □Not Applicable
156 / 243
2021 Annual Report
Unit: 10,000 yuan Currency: RMB
Proportion Cap
Amount Including:
Other of rate of
Increase transferred Accumulated Amount of
Opening decreases Closing cumulative interest
in the into fixed Construction amount of capitalized Source of
Item Budget during project during
balance current assets balance progress capitalized interest funds
the investment the
period during the interest during the
period in budget period
period period
(%) (%)
Hundsun Cloud Self-owned
Production 117,478.00 45,566.85 47,857.27 93,424.12 79.52 100.00 2,038.37 1,010.70 4.14 capital and
Base (Phase I) bank loan
Hundsun Cloud Self-owned
Production 79,930.00 115.01 2,398.99 2,514.00 3.15 3.15 capital and
Base (Phase II) bank loan
Wong Chuk
Self-owned
Hang Office
33,332.70 27,543.61 27,345.13 198.48 82.63 100.00 63.00 43.91 1.06 capital and
Building in
bank loan
Hong Kong
Self-owned
Sporadic
121.75 121.75 circulating
projects
fund
Total 230,740.70 73,225.47 50,378.01 120,769.25 198.48 2,635.75 2,101.37 1,054.61
[Note 15] Other decreases in the current period are the differences in translation of financial statements in
foreign currency due to changes in exchange rates.
(3). Provision for impairment of CIP during the period
□Applicable √Not Applicable
Other Description
□Applicable √Not Applicable
Construction materials
(4). Construction materials
□Applicable √Not Applicable
23. Productive biological assets
(1). Productive biological assets measured at cost
□Applicable √Not Applicable
(2). Productive biological assets measured at fair value
□Applicable √Not Applicable
Other Description
□Applicable √Not Applicable
24. Oil and gas assets
□Applicable √Not Applicable
25. Right-of-use assets
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Buildings Total
I. Original carrying value
1. Opening balance 20,989,007.40 20,989,007.40
2. Increase in the current period 34,379,116.88 34,379,116.88
157 / 243
2021 Annual Report
Item Buildings Total
3. Decrease in the current period
4. Closing balance 55,368,124.28 55,368,124.28
II. Accumulated depreciation
1. Opening balance 10,717,815.08 10,717,815.08
2. Increase in the current period 12,627,203.76 12,627,203.76
(1) Provision 12,627,203.76 12,627,203.76
3. Decrease in the current period
(1) Disposal
4. Closing balance 23,345,018.84 23,345,018.84
III. Provision for impairment
1. Opening balance
2. Increase in the current period
(1) Provision
3. Decrease in the current period
(1) Disposal
4. Closing balance
IV. Carrying value
1. Closing carrying value 32,023,105.44 32,023,105.44
2. Opening carrying value 10,271,192.32 10,271,192.32
Other notes:
[Note 16] The differences between the opening balances and the closing balances of the previous year
(December 31, 2020) are detailed in Note V(44) 1) of the financial statements.
26. Intangible assets
(1). Intangible assets
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Management
Land use Trademark Non-patented
Item Patent rights software and Total
rights rights technologies
copyright
I. Original carrying value
1. Opening balance 87,062,404.13 6,946,400.00 2,700,000.00 5,105,263.72 156,459,393.82 258,273,461.67
2. Increase in
459,716.28 247,479,608.19 247,939,324.47
the current period
(1) Purchase 459,716.28 217,051,378.05 217,511,094.33
(2) Effects
from translation of
-964,448.98 -964,448.98
financial statements
in foreign currency
(3) Increase
from business 31,392,679.12 31,392,679.12
combination
3. Decrease in the
664,980.00 305,392.15 970,372.15
current period
(1) Disposal 664,980.00 305,392.15 970,372.15
4. Closing balance 87,062,404.13 6,946,400.00 2,700,000.00 4,900,000.00 403,633,609.86 505,242,413.99
II. Accumulated amortization
158 / 243
2021 Annual Report
Management
Land use Trademark Non-patented
Item Patent rights software and Total
rights rights technologies
copyright
1. Opening
8,344,657.95 6,946,400.00 2,288,333.38 2,328,596.89 70,658,300.11 90,566,288.33
balance
2. Increase in
1,748,840.12 259,999.98 30,013,437.12 32,022,277.22
the current period
(1) Provision 1,748,840.12 259,999.98 25,980,944.49 27,989,784.59
(2) Effects
from translation of
-349,869.29 -349,869.29
financial statements
in foreign currency
(3) Increase
from business 4,382,361.92 4,382,361.92
combination
3. Decrease in
205,263.72 157,929.60 363,193.32
the current period
(1) Disposal 205,263.72 157,929.60 363,193.32
4. Closing
10,093,498.07 6,946,400.00 2,548,333.36 2,123,333.17 100,513,807.63 122,225,372.23
balance
III. Provision for impairment
1. Opening
2,776,666.83 3,917,854.62 6,694,521.45
balance
2. Increase in
the current period
(1) Provision
3. Decrease in
137,500.12 137,500.12
the current period
(1) Disposal 137,500.12 137,500.12
4. Closing
2,776,666.83 3,780,354.50 6,557,021.33
balance
IV. Carrying value
1. Closing carrying
76,968,906.06 151,666.64 299,339,447.73 376,460,020.43
value
2. Opening carrying
78,717,746.18 411,666.62 81,883,239.09 161,012,651.89
value
The proportion of intangible assets formed through internal research and development in the balance of
intangible assets at the end of the period was 0
(2). Land use rights without the title certificates
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
27. Development expenditure
□Applicable √Not Applicable
28. Goodwill
(1). Original carrying value of goodwill
√Applicable □Not Applicable
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2021 Annual Report
Unit: Yuan Currency: RMB
Decrease in the
Increase in the current period
current period
Investees or items that
Opening balance Arising from Closing balance
generate goodwill
business Disposal
combination
Hundsun Global Services
1,110,721.19 1,110,721.19
Inc.
Business Intelligence
14,091,467.31 14,091,467.31
(Hangzhou)
Hundsun Holdings 340,974,202.26 340,974,202.26
Hundsun Baichuan 9,156,921.06 9,156,921.06
BusinessMatrix 67,765,537.97 67,765,537.97
Shanghai Genus 50,754,368.23 50,754,368.23
Hundsun Lirong 12,242,732.96 12,242,732.96
Shanghai Dworld 33,547,864.43 33,547,864.43
Hundsun iBontal 9,542,639.09 9,542,639.09
Total 483,853,218.02 55,333,236.48 539,186,454.50
(2). Provision for impairment of goodwill
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Increase in the current Decrease in the current
Investees or items that period period Closing
Opening balance
generate goodwill balance
Provision Disposal
Hundsun Global
1,110,721.19 1,110,721.19
Services Inc.
Hundsun Holdings 132,138,046.09 132,138,046.09
Hundsun Baichuan 9,156,921.06 9,156,921.06
BusinessMatrix 29,288,639.18 29,288,639.18
Total 171,694,327.52 171,694,327.52
(3). Information on asset groups or combination of asset groups including goodwill
√Applicable □Not Applicable
1) Combination of asset groups of Business Intelligence (Hangzhou)
Goodwill assets and liabilities of Business Intelligence
Composition of asset groups or combination of asset groups
(Hangzhou)
Carrying value of asset groups or combination of asset groups -11,862,591.81
Carrying value and allocation method of goodwill allocated to
45,456,346.15
asset groups or combination of asset groups
Carrying value of asset groups or combination of asset groups
33,593,754.34
including goodwill
Are asset groups or combination of asset groups consistent with
those determined in the goodwill impairment test on the Yes
acquisition date in the previous year
2) Combination of asset groups of Hundsun Holdings
Composition of asset groups or combination of asset groups Goodwill assets and liabilities of Hundsun Holdings
Carrying value of asset groups or combination of asset groups 304,267,066.69
Carrying value and allocation method of goodwill allocated to
381,783,721.43
asset groups or combination of asset groups
Carrying value of asset groups or combination of asset groups
686,050,788.12
including goodwill
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2021 Annual Report
Are asset groups or combination of asset groups consistent with
those determined in the goodwill impairment test on the Yes
acquisition date in the previous year
3) Combination of asset groups of BusinessMatrix
Composition of asset groups or combination of asset groups Goodwill assets and liabilities of BusinessMatrix
Carrying value of asset groups or combination of asset groups 18,540,198.68
Carrying value and allocation method of goodwill allocated to
45,266,939.76
asset groups or combination of asset groups
Carrying value of asset groups or combination of asset groups
63,807,138.44
including goodwill
Are asset groups or combination of asset groups consistent with
those determined in the goodwill impairment test on the Yes
acquisition date in the previous year
4) Combination of asset groups of Shanghai Genus
Composition of asset groups or combination of asset groups Goodwill assets and liabilities of Shanghai Genus
Carrying value of asset groups or combination of asset groups 15,622,760.74
Carrying value and allocation method of goodwill allocated to
88,408,241.19
asset groups or combination of asset groups
Carrying value of asset groups or combination of asset groups
104,031,001.93
including goodwill
Are asset groups or combination of asset groups consistent with
those determined in the goodwill impairment test on the Yes
acquisition date in the previous year
5) Combination of asset groups of Hundsun Lirong
Composition of asset groups or combination of asset groups Goodwill assets and liabilities of Hundsun Lirong
Carrying value of asset groups or combination of asset groups 90,003,976.54
Carrying value and allocation method of goodwill allocated to
12,242,732.96
asset groups or combination of asset groups
Carrying value of asset groups or combination of asset groups
102,246,709.50
including goodwill
Are asset groups or combination of asset groups consistent with
those determined in the goodwill impairment test on the Yes
acquisition date in the previous year
6) Combination of asset groups of Shanghai Dworld
Composition of asset groups or combination of asset groups Goodwill assets and liabilities of Shanghai Dworld
Carrying value of asset groups or combination of asset groups 946,143.56
Carrying value and allocation method of goodwill allocated to
51,275,146.70
asset groups or combination of asset groups
Carrying value of asset groups or combination of asset groups
52,221,290.26
including goodwill
Are asset groups or combination of asset groups consistent with
those determined in the goodwill impairment test on the Yes
acquisition date in the previous year
7) Combination of asset groups of Hundsun iBontal
Composition of asset groups or combination of asset groups Goodwill assets and liabilities of Hundsun iBontal
Carrying value of asset groups or combination of asset groups 43,015,832.58
Carrying value and allocation method of goodwill allocated to
10,905,873.25
asset groups or combination of asset groups
Carrying value of asset groups or combination of asset groups
53,921,705.83
including goodwill
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2021 Annual Report
Are asset groups or combination of asset groups consistent with
those determined in the goodwill impairment test on the Yes
acquisition date in the previous year
(4). Note on the process of goodwill impairment test, key parameters (such as forecast growth rate,
steady growth rate, profit margin, discount rate, forecast period (if applicable) in estimating the
present value of future cash flow) and recognition method of impairment loss on goodwill
√Applicable □Not Applicable
1) Combination of asset groups of Business Intelligence (Hangzhou)
The recoverable amount of goodwill is calculated by the present value of the expected future cash
flow. The expected cash flows are based on the five-year cash flow forecast approved by the Company. The
discount rate used in the cash flow forecast is 11.96%, which is basically approximate to the discount rates
adopted by companies in the same industry.
Other key data used in the impairment test include software service revenue, staff costs and other
related expenses. The Company determines the above key data based on historical experience and market
development forecast. The discount rate adopted by the Company is the pretax rate reflecting the time value
of the current market currency and the specific risk of the relevant asset group.
The recoverable amount of the asset group or combination of asset groups including goodwill was
tested to be higher than the carrying value and there was no impairment loss on goodwill.
2) Combination of asset groups of Hundsun Holdings
The recoverable amount of goodwill is calculated by the present value of the expected future cash
flow. The expected cash flows are based on the five-year cash flow forecast approved by the Company. The
discount rate used in the cash flow forecast is 12.28%, which is basically approximate to the discount rates
adopted by companies in the same industry.
Other key data used in the impairment test include software sales revenue, staff costs and other related
expenses. The Company determines the above key data based on historical experience and market
development forecast. The discount rate adopted by the Company is the pretax rate reflecting the time value
of the current market currency and the specific risk of the relevant asset group.
The recoverable amount of the asset group or combination of asset groups including goodwill was
tested to be higher than the carrying value and there was no impairment loss on goodwill.
3) Combination of asset groups of BusinessMatrix
The recoverable amount of goodwill is calculated by the present value of the expected future cash
flow. The expected cash flows are based on the five-year cash flow forecast approved by the Company. The
discount rate used in the cash flow forecast is 14.52%, which is basically approximate to the discount rates
adopted by companies in the same industry.
Other key data used in the impairment test include software sales revenue, staff costs and other related
expenses. The Company determines the above key data based on historical experience and market
development forecast. The discount rate adopted by the Company is the pretax rate reflecting the time value
of the current market currency and the specific risk of the relevant asset group.
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2021 Annual Report
After tests, the recoverable amount of the asset group or combination of asset groups including
goodwill was RMB65,928,200.00, higher than the carrying value of RMB65,635,158.44, and thus there
was no impairment loss on goodwill.
4) Combination of asset groups of Shanghai Genus
The recoverable amount of goodwill is calculated by the present value of the expected future cash
flow. The expected cash flows are based on the five-year cash flow forecast approved by the Company. The
discount rate used in the cash flow forecast is 12.41%, which is basically approximate to the discount rates
adopted by companies in the same industry.
Other key data used in the impairment test include software sales revenue, staff costs and other related
expenses. The Company determines the above key data based on historical experience and market
development forecast. The discount rate adopted by the Company is the pretax rate reflecting the time value
of the current market currency and the specific risk of the relevant asset group.
The recoverable amount of the asset group or combination of asset groups including goodwill was
tested to be higher than the carrying value and there was no impairment loss on goodwill.
5) Combination of asset groups of Hundsun Lirong
The recoverable amount of goodwill is calculated by the present value of the expected future cash
flow. The expected cash flows are based on the five-year cash flow forecast approved by the Company. The
discount rate used in the cash flow forecast is 15.23%, which is basically approximate to the discount rates
adopted by companies in the same industry.
Other key data used in the impairment test include software sales revenue, staff costs and other related
expenses. The Company determines the above key data based on historical experience and market
development forecast. The discount rate adopted by the Company is the pretax rate reflecting the time value
of the current market currency and the specific risk of the relevant asset group.
The recoverable amount of the asset group or combination of asset groups including goodwill was
tested to be higher than the carrying value and there was no impairment loss on goodwill.
6) Combination of asset groups of Shanghai Dworld
The recoverable amount of goodwill is calculated by the present value of the expected future cash
flow. The expected cash flows are based on the five-year cash flow forecast approved by the Company. The
discount rate used in the cash flow forecast is 14.40%, which is basically approximate to the discount rates
adopted by companies in the same industry.
Other key data used in the impairment test include software sales revenue, staff costs and other related
expenses. The Company determines the above key data based on historical experience and market
development forecast. The discount rate adopted by the Company is the pretax rate reflecting the time value
of the current market currency and the specific risk of the relevant asset group.
The recoverable amount of the asset group or combination of asset groups including goodwill was
tested to be higher than the carrying value and there was no impairment loss on goodwill.
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2021 Annual Report
7) Combination of asset groups of Hundsun iBontal
The recoverable amount of goodwill is calculated by the present value of the expected future cash
flow. The expected cash flows are based on the five-year cash flow forecast approved by the Company. The
discount rate used in the cash flow forecast is 13.16%, which is basically approximate to the discount rates
adopted by companies in the same industry.
Other key data used in the impairment test include software sales revenue, staff costs and other related
expenses. The Company determines the above key data based on historical experience and market
development forecast. The discount rate adopted by the Company is the pretax rate reflecting the time value
of the current market currency and the specific risk of the relevant asset group.
The recoverable amount of the asset group or combination of asset groups including goodwill was
tested to be higher than the carrying value and there was no impairment loss on goodwill.
(5). Effect of goodwill impairment test
□Applicable √Not Applicable
Other Description
□Applicable √Not Applicable
29. Long-term prepaid expense
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Opening Increase in the Amortization in the Other decreases Closing balance
balance current period current period
Renovation expense of
3,370,336.31 610,846.31 2,723,406.19 1,257,776.43
leased fixed assets
Total 3,370,336.31 610,846.31 2,723,406.19 1,257,776.43
30. Deferred tax assets/deferred tax liabilities
(1). Deferred tax assets before offset
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Deductible temporary Deferred tax Deductible temporary Deferred tax
difference assets difference assets
Provision for asset
265,075,656.77 26,992,920.46 259,018,386.82 26,250,497.02
impairment
Deferred income 38,094,994.90 3,809,499.49 56,183,143.62 5,618,314.36
Accrued expenses 55,298,353.65 5,588,772.82 51,273,907.00 5,186,725.76
Provision for liabilities 16,523,860.93 1,665,818.79 11,052,089.47 1,116,409.31
Share-based payments 123,794,153.23 12,487,113.82 19,292,637.23 1,929,263.72
Software development tax
1,122,853,556.52 112,285,355.65 313,094,911.11 31,309,491.11
difference [Note 17]
Changes in fair value of
held-for-trading financial 3,762,656.15 607,010.48
assets
164 / 243
2021 Annual Report
Total 1,625,403,232.15 163,436,491.51 709,915,075.25 71,410,701.28
[Note 17] The difference was due to the fact that the Company's software development projects were
performance obligations to be performed at a certain time point in accordance with the new revenue
standards. The revenue is recognized upon completion and acceptance of the projects, while the tax revenue
is recognized in accordance with the progress of project development, so the difference is the difference in
the amount of revenue under the two standards.
(2). Deferred tax liabilities before offset
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
difference liabilities difference liabilities
Changes in the fair value of
678,407,174.31 67,840,717.44 419,942,441.33 42,109,481.78
financial assets at FVTPL
Changes in fair value of debt
investments charged to other 2,186,506.75 360,773.61 2,237,013.88 369,107.29
comprehensive income
Total 680,593,681.06 68,201,491.05 422,179,455.21 42,478,589.07
(3). Deferred tax assets or liabilities presented in the net amount after offset
□Applicable √Not Applicable
(4). Breakdown of unrecognized deferred tax assets
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Deductible temporary difference 269,295,856.20 372,717,354.02
Deductible losses 735,174,456.32 672,110,717.25
Total 1,004,470,312.52 1,044,828,071.27
(5). Deductible losses of unrecognized deferred income tax assets due in the following year
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
31. Other non-current assets
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Book balance Impairment Book balance Impairment
Carrying value Carrying value
provision provision
Prepayment for
acquisition [Note 112,816,169.61 112,816,169.61
18]
Prepayment for 441,999.00 441,999.00
investment
Total 112,816,169.61 112,816,169.61 441,999.00 441,999.00
165 / 243
2021 Annual Report
[Note 18] For details, please refer to Note XIV (1) 3) to the financial statements.
32. Short-term borrowings
(1). Classification of short-term borrowings
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Mortgage loans 27,165,529.39 46,718,265.90
Loans in credit 150,862,784.72
Total 178,028,314.11 46,718,265.90
Notes on the classification of short-term borrowings:
Mortgage loans refer to loans from UBS Switzerland AG (UBS) to Hundsun Ayers to meet the daily
working capital needs. According to the loan agreement signed between Hundsun Ayers and UBS, the loan
obtained by Hundsun Ayers is secured by other debt investments that Hundsun Ayers can freely trade in
UBS’s account.
(2). Short-term loans overdue and outstanding
□Applicable √Not Applicable
The short-term loans overdue and outstanding are as follows:
□Applicable √Not Applicable
Other Description
□Applicable √Not Applicable
33. Held-for-trading financial liabilities
□Applicable √Not Applicable
34. Derivative financial liabilities
□Applicable √Not Applicable
35. Bills payable
(1). Breakdown of bills payable
□Applicable √Not Applicable
36. Accounts payable
(1). Breakdown of accounts payable
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Accounts payable for goods and material purchase 37,530,321.62 18,157,821.13
Accounts payable for long-term asset acquisition 333,841,308.45 94,415,085.61
Cost and expense payments 132,387,085.11 79,600,032.03
166 / 243
2021 Annual Report
Total 503,758,715.18 192,172,938.77
(2). Significant accounts payable with the aging over one year
□Applicable √Not Applicable
Other Description
□Applicable √Not Applicable
37. Advances from customers
(1). Breakdown of advances from customers
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Advances from house leases 2,283,715.48 1,491,017.37
Total 2,283,715.48 1,491,017.37
(2). Significant advances from customers with the aging over one year
□Applicable √Not Applicable
Other Description
□Applicable √Not Applicable
38. Contract liabilities
(1). Contract liabilities
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Payments for software sales and 3,107,149,920.44
3,203,414,609.69
services
Total 3,203,414,609.69 3,107,149,920.44
(2). Amount and reasons for significant changes in carrying value during the Reporting Period
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
39. Employee compensation payable
(1). Breakdown of employee remuneration payable
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
I. Short-term compensation 618,666,867.09 3,534,518,717.61 3,412,930,693.56 740,254,891.14
II. Post-employment
benefits-defined 3,604,724.39 104,501,905.36 102,469,171.62 5,637,458.13
contribution plans
III. Termination benefits 509,405.00 3,187,747.56 3,697,152.56
167 / 243
2021 Annual Report
IV. Other benefits due
within one year
V. Share-based payments 24,667,193.24 11,882,474.32 7,445,515.12 29,104,152.44
VI. Non-competition 3,525,187.63 3,525,187.63
compensation
Total 647,448,189.72 3,657,616,032.48 3,530,067,720.49 774,996,501.71
[Note 19] Increase in transfer from consolidation was RMB 3,787,914.30 in the current period.
(2). Breakdown of short-term compensation
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
I. Wages, bonuses,
479,820,007.13 3,147,044,760.78 3,018,091,144.77 608,773,623.14
allowances and subsidies
II. Employee benefits 61,205,311.05 61,205,311.05
III. Social insurance
3,556,577.15 69,715,266.37 69,385,248.84 3,886,594.68
premiums
Including: Medical
3,502,625.07 67,314,753.86 67,011,273.21 3,806,105.72
insurance
Work-related injury
49,157.79 1,568,370.06 1,537,647.85 79,880.00
insurance
Maternity insurance 4,794.29 832,142.45 836,327.78 608.96
IV. Housing provident fund 358,849.89 243,412,301.88 243,319,976.99 451,174.78
V. Trade union funds and
134,931,432.92 13,141,077.53 20,929,011.91 127,143,498.54
staff education funds
Total 618,666,867.09 3,534,518,717.61 3,412,930,693.56 740,254,891.14
(3). Details of defined contribution plan
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Increase in the current Decrease in the
Item Opening balance Closing balance
period current period
1. Basic endowment
3,481,681.19 101,000,454.63 99,036,346.24 5,445,789.58
insurance
2. Unemployment insurance 123,043.20 3,501,450.73 3,432,825.38 191,668.55
3. Enterprise annuity
Total 3,604,724.39 104,501,905.36 102,469,171.62 5,637,458.13
Other notes:
□Applicable √Not Applicable
40. Taxes payable
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Value-added tax (VAT) 119,462,002.58 144,713,671.10
Enterprise income tax 26,806,846.66 17,056,046.41
Individual income tax 18,287,729.35 11,454,770.16
Urban maintenance and construction 15,514,925.91 5,065,134.65
168 / 243
2021 Annual Report
tax
Educational surcharge 6,666,440.13 3,159,389.55
Property tax 2,634,194.57 2,463,560.46
Land use tax 1,192,807.59 743,113.13
Local education surcharges 4,396,774.09 2,058,740.31
Stamp duty 1,098,117.24 695,715.38
Disabled security fund 3,044.75 3,109.25
Local water conservancy fund 2,059.54
Total 196,064,942.41 187,413,250.40
41. Other payables
Item
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Other payables 170,804,176.79 128,629,520.86
Total 170,804,176.79 128,629,520.86
Other notes:
□Applicable √Not Applicable
Interests payable
(1). Details of classification
□Applicable √Not Applicable
Dividends payable
(2). Details of classification
□Applicable √Not Applicable
Other payables
(1). Other accounts payable by nature of payment
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Temporary receipts payable 21,204,885.84 26,957,978.00
Deposits and construction quality 41,226,333.93 32,994,546.24
guarantee deposit
Outstanding operating expenses settled 41,592,644.51 35,316,837.87
Equity transfer payable [NAote 20] 60,751,425.87 28,589,770.87
Current payments 1,279,679.27 2,200,000.00
Others 4,749,207.37 2,570,387.88
Total 170,804,176.79 128,629,520.86
[Note 20] RMB12,189,841.00 out of the equity transfer payable represents the outstanding equity
transfer from the original shareholders of BusinessMatrix, RMB41,461,706.00 represents the payment for
equity acquisition that has not met the delivery conditions, and the remaining RMB7,099,878.87 represents
the outstanding equity transfer from the employees of the shareholding platform. The outstanding amount
169 / 243
2021 Annual Report
of equity transfer from the employees of the shareholding platform of RMB7,099,878.87 is detailed in Note
XIV (2)1) to the financial statements.
(2). Other significant accounts payable with the aging over one year
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
42. Held-for-sale liabilities
□Applicable √Not Applicable
43. Current portion of non-current liabilities
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Current portion of long-term
145,804,947.56
borrowings
Current portion of lease liabilities 8,691,667.05 7,111,829.18
Total 154,496,614.61 7,111,829.18
Other notes:
(1) The differences between the opening balances and the closing balances of the previous year
(December 31, 2020) are detailed in Note V (44) 1) of the financial statements.
(2) The current portion of long-term borrowings of RMB143,802,792.00 was secured by mortgages
provided by the Company for the Hundsun Cloud Production Base Project and its land use rights.
44. Other current liabilities
Other current liabilities
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Withholding of land appreciation tax 305,258,151.46 305,258,151.46
Total 305,258,151.46 305,258,151.46
[Note 21] The withholding of land appreciation tax is detailed in Note XVI (7) to the financial
statements.
Changes in short-term bonds payable:
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
45. Long-term borrowings
(1). Classification of long-term borrowings
√Applicable □Not Applicable
170 / 243
2021 Annual Report
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Mortgage loans 77,523,804.59 206,090,358.06
Guaranteed loan 2,770,750.00
Loans in credit 148,159,511.11
Total 228,454,065.70 206,090,358.06
[Note 22] Mortgage loans are secured by the mortgage of the Wong Chuk Hang office building project
under construction in Hong Kong.
Other notes, including the interest rate collar:
□Applicable √Not Applicable
46. Bonds payable
(1). Bonds payable
□Applicable √Not Applicable
(2). Changes in bonds payable: (excluding preference shares, perpetual bonds and other financial
instruments classified as financial liabilities)
□Applicable √Not Applicable
(3). Conditions and timing of conversion for convertible bonds
□Applicable √Not Applicable
(4). Other financial instruments classified as financial liabilities
Basic information on preference shares, perpetual bonds and other financial instruments outstanding at the
end of the period
□Applicable √Not Applicable
Changes in preference shares, perpetual bonds and other financial instruments outstanding at the end of
period
□Applicable √Not Applicable
Basis for classifying other financial instruments as financial liabilities:
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
47. Lease liabilities
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Outstanding lease payments 24,699,694.62 2,725,018.12
Less: Unrecognized financial charges -1,401,490.57 -70,378.75
Total 23,298,204.05 2,654,639.37
171 / 243
2021 Annual Report
[Note 23] The differences between the opening balances and the closing balances of the previous year
(December 31, 2020) are detailed in Note V (44) 1) of the financial statements.
48. Long-term accounts payable
Item
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
Long-term accounts payable
(1). Long-term accounts payable by nature
□Applicable √Not Applicable
Specific accounts payable
(2). Specific accounts payable by nature
□Applicable √Not Applicable
49. Long-term employee remuneration payable
□Applicable □Not Applicable
(1). Long-term employee remuneration payable
□Applicable √Not Applicable
(2). Changes in defined benefit plans
Present value of obligations under defined benefit plans:
□Applicable √Not Applicable
Assets under plans:
□Applicable √Not Applicable
Net liabilities (net assets) under defined benefit plans
□Applicable √Not Applicable
Notes on the content of defined benefit plans, relevant risks and influence on the future cash flow, time and
uncertainty of the Company:
□Applicable √Not Applicable
Notes on major actuarial assumptions and sensitive analysis results of defined benefit plans
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
50. Provision for liabilities
√Applicable □Not Applicable
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Unit: Yuan Currency: RMB
Item Opening balance Closing balance Reason
Pending litigation 438,483.82
It is due to the provision of software
maintenance expense at 0.5% of software
revenue (measured based on actual
Product quality historical data) in accordance with the terms
11,709,342.27 15,685,038.46
guarantee of the software sales contract signed
between the Company and the customer
regarding the commitment of free
maintenance.
The differences between the opening
balances and the closing balances of the
Recovery fee 100,000.00 1,631,737.31 previous year (December 31, 2020) are
detailed in Note V (44) 1) of the financial
statements.
Total 12,247,826.09 17,316,775.77 /
51. Deferred income
Deferred income
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Increase in the Decrease in the
Item Opening balance Closing balance Reason
current period current period
Government grants 56,385,848.47 1,363,500.00 19,538,442.18 38,210,906.29
Total 56,385,848.47 1,363,500.00 19,538,442.18 38,210,906.29 /
Items related to government grants:
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Amount
Amount
Increase in charged to
Opening charged to Other Closing
Liability item grants for non-operating Asset/revenue-related
balance other income changes balance
the period income for
for the period
the period
Cloud
computing 111,306.30 111,306.30 Asset-related
project
Construction
project of
provincial key
10,000,000.00 10,000,000.00 Asset-related
enterprise
institute [Note
25]
Software
development
and
industrialization
project of tool
873,928.08 686,412.00 187,516.08 Asset-related
set based on
financial
industry
information
knowledge base
National
demonstration
5,000,000.00 5,000,000.00
project on
research and
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2021 Annual Report
development
and application
of securities
security and
safety business
system
Financial cloud
computing
service
platform and
financial big
1,072,723.36 665,710.34 407,013.02 Asset-related
data support
platform
development
and application
project
Strategic
emerging
industry project 156,260.39 156,260.39 Asset-related
IPV6 project in
2015
Financial big
data
2,477,214.80 1,637,048.25 840,166.55 Asset-related
infrastructure
project
Hundsun Cloud
Production 16,710,000.00 16,710,000.00 Asset-related
Base [Note 25]
Crossover
service design
methods and 618,000.00 82,000.00 700,000.00 Asset-related
key
technologies
Crossover
service
integration 584,800.00 85,200.00 670,000.00 Asset-related
methods and
support carriers
Major big
data-based
intelligent
investment 1,175,210.69 434,145.16 741,065.53 Asset-related
advisory
service
platform
Intelligent
service
adaptation 663,700.00 36,300.00 700,000.00 Asset-related
theory and key
technologies
Full process
supply chain
and enterprise
service
1,740,000.00 1,160,000.00 120,000.00 2,780,000.00 Asset-related
platform
development
and application
project
Innovation and
application
projects of key
information 15,000,000.00 10,640,766.28 4,359,233.72 Asset-related
infrastructure in
securities
industry
Support the 202,704.85 86,793.46 115,911.39 Asset-related
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construction of
Lujiazui
internet
emerging
financial
gathering
platform -
Lujiazui hedge
fund
quantitative
algorithmic
trading service
platform project
[Note 24] The amount of government grants charged to the current profit or loss is detailed in Note VII (84)
to the financial statements.
[Note 25] As of 31 December 2021, none of these projects had been accepted.
[Note 26] The amortization of the full process supply chain and enterprise service platform development
and application project in the current period was paid to the joint R&D party.
Other notes:
□Applicable √Not Applicable
52. Other non-current liabilities
□Applicable √Not Applicable
53. Share capital
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Increase (+)/decrease (-) for the period
Conversion
Opening balance Issuance of the Closing balance
of new Bonus shares reserve Others Sub-total
shares funds into
shares
Total shares 1,044,090,754.00 417,469,726.00 417,469,726.00 1,461,560,480.00
Other notes:
According to the profit distribution plan adopted at the Company's 2020 annual general meeting on
June 3, 2021, the Company intends to distribute a cash dividend of RMB1.00 (including tax) for every 10
shares and 4 bonus shares for every 10 shares to all shareholders based on the shares outstanding registered
on the date of registration of the implementation of the equity distribution less the number of shares in the
special securities repurchase account of the Company. As of July 19, 2021, the Company distributed a cash
dividend of RMB1.00 (including tax) for every 10 shares and 4 bonus shares for every 10 shares to all
shareholders based on the shares outstanding registered on the date (July 15, 2021) of registration of the
implementation of the equity distribution less the number of shares in the special securities repurchase
account of the Company, with a total cash dividend of RMB104,367,431.40 (including tax) and
417,469,726 bonus shares distributed. The above transfer was audited by Pan-China Certified Public
Accountants LLP, which issued the Capital Verification Report (TJY [2021] No. 401).
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54. Other equity instruments
(1). Basic information on preference shares, perpetual bonds and other financial instruments
outstanding at the end of the period
□Applicable √Not Applicable
(2). Changes in preference shares, perpetual bonds and other financial instruments outstanding at
the end of period
□Applicable √Not Applicable
Changes in other equity instruments during the period, the reasons for the changes, and the basis for the
related accounting:
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
55. Capital reserve
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Other capital reserves 545,385,635.52 128,512,870.93 401,167,958.80 272,730,547.65
Total 545,385,635.52 128,512,870.93 401,167,958.80 272,730,547.65
Other notes, including changes in the current period and reasons for the changes:
Increase for the period:
1) Share-based payment:
According to the Investment and Management Measures of Hundsun's Key Employees Subscribing
Shares of Hundsun's Innovative Business Subsidiaries adopted through deliberation at the Company's 21st
meeting of the Fifth Board on February 12, 2015, the Company granted the corresponding equity interests
in the subsidiary to the key employees of its subsidiary Shanghai Gildata. The above equity-settled
share-based payment amounted to RMB2,190,521.64 calculated in proportion to the Company’s
shareholding, increasing the capital reserve-other capital reserve.
According to the Proposal on Hundsun's 2020 Employee Stock Ownership Scheme (Draft) and its
Summary and the Proposal on Hundsun's Management Measures for 2020 Employee Stock Ownership
Scheme (hereinafter referred to as the 2020 Employee Stock Ownership Scheme) adopted through
deliberation at the Company's 15th board meeting of the Fifth Board held on December 8, 2020 and the
third extraordinary general meeting of 2020 held on December 25, 2020, the above equity-settled
share-based payment amounted to RMB106,488,455.61 calculated in proportion to the Company’s
shareholding, increasing the capital reserve-other capital reserve.
2) The Company's share of other changes in owners’ equity arising from associates other than net
profit or loss and profit distribution amounted to RMB18,417,249.85 calculated in proportion to the
Company's shareholding, increasing capital reserve - other capital reserve.
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3) The Company's share of other changes held by Company’s shareholding platform in the
ownership interests of subsidiaries within the scope of the Company’s consolidation for the period other
than net profit or loss and profit distribution amounted to RMB1,416,643.83 in the consolidated statements
of income through cross-shareholding in subsidiaries, increasing capital reserve - other capital reserve.
Decrease for the period:
1) The Company acquired the control of Shanghai Dworld, a former associate, as a result of
additional investment. Other comprehensive income and other changes in owner's equity of
RMB2,565,362.08 related to the original holding prior to the date of purchase were transferred to
investment income, decreasing capital reserve - other capital reserve.
2) Other decrease in capital reserve of RMB398,602,596.72 is described in Note VII (56) to the
financial statements.
56. Treasury shares
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Share repurchase 117,376,268.28 682,524,351.40 760,224,472.72 39,676,146.96
Total 117,376,268.28 682,524,351.40 760,224,472.72 39,676,146.96
Other notes, including changes in the current period and reasons for the changes:
According to the Company's 2020 Employee Stock Purchase Scheme, the Company proposed to
repurchase some shares of the public with its own funds through call auction trading for its Employee Stock
Ownership Scheme. During the period, the Company paid RMB682,524,351.40 for the repurchase of
7,190,295 shares. As of December 31, 2021, the Company paid a total of RMB799,900,619.68 for the
repurchase of a total of 8,395,740 shares, and transferred 7,979,300 repurchased shares through non-trade
stock transfer to the account of the Company's 2020 Employee Stock Purchase Scheme at a price of
RMB45.32 per share, with 416,440 shares retained in its special securities repurchase account. The
Company received a total of RMB361,621,876.00 from the Scheme Participants for the share subscription,
carried forward RMB760,224,472.72 of treasury shares at the average repurchase price, and accordingly
decreased capital reserve - other capital reserve by RMB398,602,596.72.
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57. Other comprehensive income
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Amount incurred in the current period
Less: Amount
Less: Amount
charged to in other
charged to other
Opening comprehensive After-tax amount Closing
Item Amount incurred comprehensive Post-tax amount
balance income in the Less: Income tax attributable to balance
before income tax income in the attributable to the
previous period but expenses minority
in the current period previous period but parent company
transferred to the shareholders
transferred to the
current retained
current profit or loss
earnings
I. Other comprehensive
income not to be
reclassified into profit
and loss
Including: Amount of
change arising from
remeasurement of the
defined benefit plan
Other comprehensive
income not to be
reclassified into profit or
loss by the equity method
Changes in fair value
of other equity instrument
investments
Changes in the fair
value of the Company's
own credit risk
II. Other comprehensive
income to be
-7,643,663.35 -13,786,289.23 -11,419,570.51 -2,366,718.72 -19,063,233.86
subsequently reclassified
into profit or loss
Including: Other
comprehensive income to
be reclassified into profit 1,248,972.79 1,248,972.79
or loss by the equity
method
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2021 Annual Report
Changes in fair value
1,801,595.88 -26,654.09 -25,707.87 -946.22 1,775,888.01
of other debt investments
Amount of financial
assets reclassified into
other comprehensive
income
Provision for credit
impairment of other debt
investments
Cash flow hedge reserve
Foreign currency
translation difference in -10,694,232.02 -13,759,635.14 -11,393,862.64 -2,365,772.50 -22,088,094.66
the statements
Total other
-7,643,663.35 -13,786,289.23 -11,419,570.51 -2,366,718.72 -19,063,233.86
comprehensive income
179 / 243
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58. Special reserves
□Applicable √Not Applicable
59. Surplus reserve
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Opening balance Increase in the current Decrease in the current Closing balance
period period
Statutory surplus
195,942,797.49 137,988,450.22 11,498,903.95 322,432,343.76
reserves
Total 195,942,797.49 137,988,450.22 11,498,903.95 322,432,343.76
[Note 27] The differences between the opening balances and the closing balances of the previous year
(December 31, 2020) are detailed in Note V (44) 1) of the financial statements.
Note on surplus reserves, including changes (increase or decrease) during the current period and reasons for
such changes:
Cloudbroker Network: According to the Equity Transfer Agreement signed between the Company and
Ningbo High-tech Zone Shanzhao Equity Investment Management Partnership (L.P.), the Company acquired
1,745,000 shares of Cloudbroker Network held by Shanzhao Equity Investment with RMB5,251,770.00 during
the period. The surplus reserve - statutory surplus reserve was written down by Cloudbroker Network's net asset
share difference of RMB4,026,285.16 calculated by the Company between the acquisition cost and the percentage
of shares acquired.
Hundsun Lirong: According to the Capital Increase Agreement signed between the Company and Hangzhou
Hengxin Juchuang Enterprise Management Partnership (L.P.) (Hengxin Juchuang), Hengxin Juchuang paid
RMB44.4 million for the subscription of Hundsun Lirong's new registered capital of RMB28.4 million and the
Company paid RMB140 million for the subscription of Hundsun Lirong's new registered capital of RMB70
million. As of December 31, 2021, Hengxin Juchuang paid RMB20.4 million for capital increase (corresponding
to a registered capital of RMB14.4 million) and the Company paid RMB140 million for capital increase
(corresponding to a registered capital of RMB70 million). The surplus reserve - statutory surplus reserve was
written down by Hundsun Lirong's net asset share difference of RMB2,627,760.30 calculated by the Company
between the paid-in capital contribution ratios before and after the capital increase.
Shanghai Genus: According to the Share Transfer Agreement entered into by the Company, Wuxi Meisa
Enterprise Management Partnership (L.P.), Cloud Plain Holdings Ltd. and Hangzhou Senchuan Information
Consulting Partnership (L.P.), the Company transferred 636,610 shares of Shanghai Genus to Hangzhou Senchuan
for RMB2,250,000.00, and carried forward the investment cost of RMB4,377,613.16 according to the transfer
ratio. At the same time, according to the Share Transfer Agreement entered into by the Company and the Dazi
Huashi Venture Capital Management Co., Ltd., the Company acquired 636,610 shares of Shanghai Genus held by
Dazi Huashi with RMB 7 million. The surplus reserve - statutory surplus reserve was written down by the net
asset share difference of RMB2,622,386.84 of Shanghai Genus calculated by the Company between the net
acquisition cost and the percentage of shares acquired. According to the Supplemental Agreement to the
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2021 Annual Report
Investment Agreement entered into between the Company and Ye Zhiyun, Ye Zhiyun transferred 110,000 shares
held thereby in Shanghai Genus to the Company for RMB1,767,997.00. The surplus reserve - statutory surplus
reserve was written down by the net asset share difference of RMB1,431,851.85 of Shanghai Genus calculated by
the Company between the net acquisition cost and the percentage of shares acquired.
Hundsun iBontal: According to the Share Transfer Agreement entered into between the Company and Xiong
Wei, Xiong Wei transferred 2,925,000 shares held thereby in Hundsun iBontal to the Company for
RMB3,802,500.00. The surplus reserve - statutory surplus reserve was written down by Hundsun iBontal's net
asset share difference of RMB1,002,499.37 calculated by the Company between the acquisition cost and the
percentage of shares acquired.
Cloudwing Network: According to the Capital Increase Agreement signed by the Company, Ningbo
High-tech Zone Yunhan Equity Investment Management Partnership (L.P.) and Ningbo High-tech Zone Shanying
Equity Investment Management Partnership (L.P.), the Company paid RMB630 million for the subscription of
Cloudwing Network's new registered capital of RMB446,061,116. As of December 31, 2021, the Company paid
RMB300 million for the capital increase (corresponding to a registered capital of RMB212,410,100). The surplus
reserve - statutory surplus reserve was written down by Cloudwing Network's net asset share difference of
RMB-211,879.57 calculated by the Company between the paid-in capital contribution ratios before and after the
capital increase.
60. Undistributed profits
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Current period Previous period
Undistributed profits at the end of the previous
2,893,625,565.93 3,007,114,120.04
period before adjustment
Total amount of undistributed profits at the
-291,827.99 -666,211,301.75
beginning of the period (adjustment +/-)
Undistributed profits at the beginning of the
2,893,333,737.94 2,340,902,818.29
period after adjustment
Add: Net profit attributable to owners of the
1,463,538,930.14 1,321,735,522.48
parent company during the period
Less: Statutory surplus reserves appropriated 137,988,450.22 102,400,985.82
Dividends payable on ordinary shares 104,367,431.40 425,667,769.02
Ordinary shares dividends transferred to
417,469,726.00 240,944,020.00
share capital
Undistributed profits at the end of the period 3,697,047,060.46 2,893,625,565.93
Breakdown of adjustments to undistributed profits at the beginning of the period
1) Due to the retrospective adjustment made under the Accounting Standards for Business Enterprises and its
related new regulations, the undistributed profits at the beginning of the period were RMB-291,827.99.
61. Revenue and cost of sales
(1). Revenue and cost of sales
√Applicable □Not Applicable
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2021 Annual Report
Unit: Yuan Currency: RMB
Amount in the current period Amount in the previous period
Item
Revenue Cost Revenue Cost
Principal businesses 5,492,012,267.44 1,484,074,041.27 4,167,541,269.62 955,469,176.67
Other businesses 4,566,357.44 528,445.39 5,103,886.94 437,648.43
Total 5,496,578,624.88 1,484,602,486.66 4,172,645,156.56 955,906,825.10
(2). Revenue from contracts
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Classification of contract Reporting segment Total
By type of product
Software 5,476,020,294.42 5,476,020,294.42
Real estate 17,208,648.00 17,208,648.00
By operating regions
Mainland China 5,270,079,355.53 5,270,079,355.53
Overseas 223,149,586.89 223,149,586.89
By time of transfer of goods
Revenue recognized at a certain time point 3,929,729,359.16 3,929,729,359.16
Revenue recognized within a certain period of 1,563,499,583.26 1,563,499,583.26
time
Total 5,493,228,942.42 5,493,228,942.42
[Note 28] Excluding lease income.
Breakdown of revenue from contracts:
□Applicable √Not Applicable
(3). Contract performance obligations
√Applicable □Not Applicable
The Company's revenue mainly comes from sales of self-made and customized software, software services,
outsourced goods, and properties in the science park. Sales of self-made and customized software, outsourced
goods and properties in the science park are performance obligations to be performed at a certain time point, and
the revenue shall be recognized when the products are delivered to the customer and the customer obtains control
of the products. Sales of software services are performance obligations to be performed within a certain time
period and the revenue shall be recognized in accordance with the performance progress.
(4). Apportionment to remaining performance obligations
□Applicable √Not Applicable
Other notes:
The revenue recognized in the opening carrying value of contract liabilities during the current period was
RMB2,105,149,298.90.
62. Taxes and surcharges
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2021 Annual Report
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Business tax -1,470,001.70
Urban maintenance and construction tax 28,527,494.06 25,820,737.49
Educational surcharge 12,182,314.06 11,065,177.78
Local education surcharges 8,121,542.84 7,376,785.23
Property tax 5,452,932.31 5,100,723.01
Consumption tax in Japan 1,628,529.47 2,239,484.55
Land use tax 729,325.55 881,561.64
Vehicle and vessel use tax 25,870.00 27,535.00
Stamp duty 3,720,809.02 2,239,558.21
Land appreciation tax 4,571.47 1,223,332.89
Total 60,393,388.78 54,504,894.10
63. Selling and distribution expenses
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Employee compensation 444,391,580.88 282,463,214.14
Share-based payment 19,704,377.96 255,411.12
Travel expenses 34,511,742.58 26,201,096.68
Consulting fee for special items 30,657,327.35 11,625,924.75
Marketing and promotion expenses 14,775,781.58 18,971,122.20
Communication expenses 897,106.94 3,347,054.70
Office expenses 6,785,409.66 5,805,283.27
Depreciation and amortization 2,133,005.47 1,702,648.49
Vehicle expenses 3,021,727.32 2,661,534.00
Others 1,056,907.69 773,500.54
Total 557,934,967.43 353,806,789.89
64. General and administrative expenses
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Employee compensation 324,789,305.66 255,282,698.49
Share-based payment 28,633,427.21 -264,997.88
Office expenses 75,040,330.93 82,476,056.02
Business expenses 91,028,682.21 89,378,472.94
Depreciation and amortization 72,829,790.22 42,200,199.15
Consulting fee for special items 48,770,432.11 22,268,759.62
Communication expenses 7,740,488.59 15,500,091.10
Intermediary fees 8,593,720.23 13,232,800.46
Travel expenses 8,847,865.25 4,918,274.52
Vehicle expenses 8,533,686.99 4,072,402.15
Taxes and dues 6,314,399.80 4,422,166.76
Others 331,338.37 6,003,688.97
Total 681,453,467.57 539,490,612.30
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2021 Annual Report
65. R&D expenses
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Employee compensation 1,774,143,884.49 1,338,577,793.78
Share-based payment 51,150,543.46 1,216,497.17
Technology development costs 125,425,990.49 9,716,452.90
Travel expenses 61,614,651.88 48,578,631.43
Communication expenses 84,448,221.60 70,739,666.41
Depreciation and amortization 28,998,005.21 19,424,213.73
Vehicle expenses 4,615,782.70 3,695,690.10
Office expenses 7,839,989.02 3,108,667.69
Intermediary fees 725,072.46 785,336.06
Business expenses 334,224.76 215,889.05
Total 2,139,296,366.07 1,496,058,838.32
66. Finance costs
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Interest expenses 10,507,675.01 2,855,157.07
Interest income -17,150,371.61 -11,939,357.58
Net foreign exchange gain or loss 4,365,039.81 447,462.46
Others 1,371,611.45 1,694,216.18
Total -906,045.34 -6,942,521.87
67. Other income
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Asset-related government grants 8,818,442.18 7,603,569.04
Revenue-related government grants 275,629,010.51 214,339,135.66
Refund of handling charges for 3,623,437.38 3,996,499.34
withholding individual income tax
Weighted deduction of input VAT 1,809,379.23 1,489,181.96
Total 289,880,269.30 227,428,386.00
[Note 29] The government grants charged to other income during the current period are detailed in Note VII (84)
to the financial statements.
68. Investment income
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Income from long-term equity investments
91,328,055.87 10,473,834.46
calculated by the equity method
Investment income from the disposal of long-term
39,045,988.68 345,063,119.66
equity investments
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2021 Annual Report
Item Amount in the current period Amount in the previous period
Investment income from holding held-for-trading
71,473,085.31 84,736,954.27
financial assets
Investment income from holding other debt
2,963,365.04 4,474,153.77
investments
Investment income from disposal of held-for-trading
71,330,011.84 139,284,717.55
financial assets
Investment income from disposal of other debt
-303,236.95 172,613.62
investments
Total 275,837,269.79 584,205,393.33
69. Gain from Net Exposure to Hedging
□Applicable √Not Applicable
70. Gain from changes in fair value
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Source of gain from changes in fair value Amount in the current period Amount in the previous period
Held-for-trading financial assets 418,521,750.89 104,618,869.06
Gain from changes in fair value of cash-settled
-4,120,593.87 -1,527,377.23
share-based payment liabilities
Total 414,401,157.02 103,091,491.83
71. Credit impairment losses
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Bad debt loss of accounts receivable -31,125,551.48 -9,469,468.45
Bad debt loss of other receivables 164,292.85 -5,617,717.10
Total -30,961,258.63 -15,087,185.55
72. Asset impairment losses
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
II. Loss on diminution in value of inventories
and impairment loss on contract performance -3,738,572.25 -1,259,970.58
cost
III. Impairment loss on long-term equity
-7,620,000.00 -76,950,746.90
investments
X. Impairment loss on intangible assets -3,037,351.54
XI. Impairment loss on goodwill -157,089,435.82
XIII. Impairment loss on contract assets -500,267.36 -674,205.54
Total -11,858,839.61 -239,011,710.38
73. Gain from disposal of assets
√Applicable □Not Applicable
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2021 Annual Report
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Gain from disposal of fixed assets -552,528.07 577,248.05
Total -552,528.07 577,248.05
74. Non-operating income
Non-operating income
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Amount charged to
Item Amount in the current period Amount in the previous period
non-recurring profit or loss
Total income from disposal of
82,710.62 1,650.00 82,710.62
non-current assets
Including: Income from
82,710.62 1,650.00 82,710.62
disposal of fixed assets
Waiver of accounts payable 93,751.00 900,000.00 93,751.00
Income from compensation
332,526.79 839,290.00 332,526.79
and penalty
Others 1,982,498.85 106,401.17 1,982,498.85
Total 2,491,487.26 1,847,341.17 2,491,487.26
Government grants charged to the current profit or loss
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
75. Non-operating expenses
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Amount in the current Amount charged to
Item Amount in the previous period
period non-recurring profit or loss
Total losses on disposal of
140,120.31 1,086,449.50 140,120.31
non-current assets
Including: Loss on disposal of fixed
55,844.81 1,086,449.50 55,844.81
assets
Loss on disposal of intangible
84,275.50 84,275.50
assets
Compensation and penalty 79,653.38 109,230.02 79,653.38
Donation 2,425,000.00 2,649,720.00 2,425,000.00
Indemnities 75,424.13 1,275,876.00 75,424.13
Local water conservancy fund 2,439.61 2,439.61
Others 596,297.71 34,217.00 596,297.71
Total 3,318,935.14 5,155,492.52 3,318,935.14
76. Income tax expenses
(1). Income tax expenses
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
186 / 243
2021 Annual Report
Current income tax expenses 85,888,485.20 27,528,138.18
Deferred income tax expenses -66,294,554.57 47,034,698.26
Total 19,593,930.63 74,562,836.44
(2). Process of adjusting accounting profit and income tax expense
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period
Total profit 1,509,722,615.63
Income tax expenses based on statutory/applicable tax rate 150,972,261.56
Effects of different tax rates applied to subsidiaries -2,418,007.77
Effect of income tax during the period before adjustment 35,386,471.26
Effects of non-taxable income -15,000,523.39
Effects of non-deductible costs, expenses and losses 7,891,914.14
Effect of deductible loss arising from deferred income tax
-62,599,518.66
assets not previously recognized
Effect of deductible temporary difference or deductible loss
arising from deferred income tax assets unrecognized during 26,718,232.09
the period
Effect of weighted deduction on R&D expenses and salaries of -121,356,898.60
disabled employees
Income tax expenses 19,593,930.63
Other notes:
□Applicable √Not Applicable
77. Other comprehensive income
√Applicable □Not Applicable
See notes for details
78. Items in the statement of cash flows
(1). Cash received from other operating activities
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Temporary receipts payable 1,310,239.45 1,855,155.09
Security deposit received 49,245,279.78 61,221,858.62
Government grants 39,325,041.86 50,037,993.45
Guarantee deposit received 2,508,515.00 5,425,921.00
Cash received from rental properties 3,836,914.23 3,433,499.33
Interest income 17,096,437.51 11,939,357.58
Others 7,755,362.72 5,460,986.55
Total 121,077,790.55 139,374,771.62
(2). Cash paid for other operating activities
√Applicable □Not Applicable
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2021 Annual Report
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Administration expenses paid by cash 235,290,504.46 267,462,251.44
R&D expenses paid by cash 309,100,150.16 285,360,121.23
Selling expenses paid by cash 99,380,929.65 124,863,263.26
Security deposit paid 50,448,072.97 53,269,550.18
Temporary receipts payable 3,704,922.27 26,238,152.81
Guarantee deposit paid 2,163,955.00 4,074,515.00
Others 9,420,868.52 4,756,320.26
Total 709,509,403.03 766,024,174.18
(3). Cash received from other investing activities
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Net cash paid for acquisition of subsidiaries and
1,185,670.07
other business entities
Release of frozen cash and bank balances for
1,064,820.01
investment matters involving litigation
Total 2,250,490.08
(4). Cash paid for other investing activities
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Return of dividends to
924,157.53
Hangzhou Everfine Photo-E-Info Co., Ltd.
Total 924,157.53
(5). Cash received from other financing activities
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Contributions received under the Employee
Stock Ownership Scheme 361,621,876.00
Total 361,621,876.00
(6). Cash paid for other financing activities
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Share repurchase 682,624,959.25 117,376,268.28
Payment by subsidiaries to minority interests for 59,600,469.20
63,504,870.16
capital reduction
Acquisition of minority interests 19,366,414.00 42,290,837.00
Payment for lease of right-to-use assets 11,485,781.92
Total 776,982,025.33 219,267,574.48
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79. Supplementary information of the cash flow statement
(1). Supplementary information of the cash flow statement
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Supplementary information Amount for the current period Amount in the previous period
1. Reconciliation of net profit to cash flows from operating activities:
Net profit 1,490,128,685.00 1,363,152,354.21
Add: Asset impairment provision 11,858,839.61 239,011,710.38
Credit impairment losses 30,961,258.63 15,087,185.55
Depreciation of fixed assets, oil and gas assets and
71,444,261.19 60,309,062.80
productive biological assets
Amortization of right-of-use assets 12,627,203.76
Amortization of intangible assets 27,995,252.05 9,959,601.28
Amortization of long-term prepaid expenses 2,723,406.19 2,142,752.90
Losses on the disposal of fixed assets, intangible assets
552,528.07 -577,248.05
and other long-term assets (gain denoted by "-")
Losses on write-off of fixed assets (gain denoted by "-") 57,409.69 1,084,799.50
Loss on changes in fair value (gain denoted by "-") -414,401,157.02 -103,091,491.83
Financial expenses (gain denoted by "-") 14,872,714.82 3,234,619.54
Investment losses (gain denoted by "-") -275,837,269.79 -584,205,393.33
Decrease in deferred income tax assets (increase denoted
-92,025,790.23 36,291,029.31
by "-")
Increases in deferred income tax liabilities (decrease
25,731,235.65 10,877,462.83
denoted by "-")
Decrease in inventories (increase denoted by "-") -108,500,758.56 -127,928,212.71
Decrease in operating receivables (increase denoted by
-211,237,984.73 -258,805,686.82
"-")
Increase in operating items payable (decrease denoted by
257,247,872.00 732,553,018.83
"-")
Others 112,591,599.81 -1,193,293.98
Net cash flows from operating activities 956,789,306.14 1,397,902,270.41
2. Major investing and financing activities not involving cash receipts and payments:
Conversion of debts into capital
Current portion of convertible corporate bonds
Financing leased fixed assets
3. Net changes in cash and cash equivalents:
Closing balance of cash 1,723,434,091.60 1,370,028,554.66
Less: Opening balance of cash 1,370,028,554.66 1,317,931,756.94
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 353,405,536.94 52,096,797.72
[Note 30]: Others represent the amount of equity-settled share-based payments in exchange for employee services.
(2). Net cash paid for acquisition of subsidiaries in the current period
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Amount
Cash or cash equivalents paid in the current period for business combinations in the 186,250,000.00
current period:
Including: Shanghai Dworld 50,000,000.00
189 / 243
2021 Annual Report
Hundsun Lirong 40,000,000.00
Hundsun iBontal 96,250,000.00
Less: Cash and cash equivalents held by subsidiaries on the date of acquisition 47,668,300.24
Including: Shanghai Dworld 28,410,070.57
Hundsun Lirong 111,533.90
Hundsun iBontal 19,146,695.77
Add: Cash or cash equivalents paid in the current period for business combinations in 9,300,051.00
the previous period
Including: BusinessMatrix 7,313,904.00
Shanghai Genus 1,986,147.00
Net cash paid to acquire subsidiaries 147,881,750.76
(3). Net cash received from the disposal of subsidiaries during the current period
□Applicable √Not Applicable
(4). Composition of cash and cash equivalents
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
I. Cash 1,723,434,091.60 1,370,028,554.66
Including: Cash on hand 365,020.30 680,095.55
Bank deposits readily available for payment 1,707,660,259.64 1,271,229,282.20
Other cash and bank balances readily available
15,408,811.66 98,119,176.91
for payment
II. Cash equivalents
Including: Bond investment due within three
months
III. Closing balance of cash and cash equivalents 1,723,434,091.60 1,370,028,554.66
Including: Restricted cash and cash equivalents
used by the parent company or subsidiaries
under the Group
Other notes:
√Applicable □Not Applicable
The Item "closing balance of cash and cash equivalents" in the consolidated cash flow statement was
RMB1,723,434,091.60 and the Item "closing cash and bank balances" in the balance sheet was
RMB1,727,704,846.60. The difference was due to the deduction of the guarantee deposit of RMB4,270,755.00
not meeting the standard of cash and cash equivalents from the "closing balance of cash and cash equivalents" in
the Company's cash flow statement.
The Item "opening balance of cash and cash equivalents" in the consolidated cash flow statement was
RMB1,370,028,554.66 and the Item "opening cash and bank balances" in the balance sheet was
RMB1,374,842,591.24. The difference was due to the deduction of the guarantee deposit of RMB4,615,315.00
not meeting the standard of cash and cash equivalents and the bank deposits restricted in use of RMB198,721.58
from the "opening balance of cash and cash equivalents" in the Company's cash flow statement.
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2021 Annual Report
80. Notes to items in the Statement of Retained Earnings
Explanation of the name of the Item "others" that adjusted the closing balance of the previous year and the amount
of adjustment:
□Applicable √Not Applicable
81. Assets with restricted ownership or right-of-use
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Carrying amount at the end of the period Reason
Cash and bank balances 4,270,755.00 Guarantee deposit
Intangible assets 73,153,291.09 Pledged to secure bank borrowings
Construction in progress 25,139,995.40 Pledged to secure bank borrowings
Fixed assets 1,117,020,509.26 Pledged to secure bank borrowings
Other debt investments 65,681,018.23 Pledged to secure bank borrowings
Total 1,285,265,568.98 /
82. Foreign currency monetary items
(1). Foreign currency monetary items
√Applicable □Not Applicable
Unit: Yuan
Foreign currency closing Closing balance in RMB
Item Exchange rate
balance balance
Cash and bank balances - -
Including: USD 130,593.92 6.3757 832,627.66
JPY 684,891,253.79 0.055415 37,953,248.83
HKD 44,020,954.68 0.81760 35,991,532.55
SGD 122,497.27 4.7179 577,929.87
MYR 7,105,134.88 1.52667 10,847,196.27
Accounts receivable - -
Including: JPY 63,831,273.10 0.055415 3,537,210.00
HKD 46,934,755.71 0.81760 38,373,856.27
Other receivables
Including: JPY 51,920,928.88 0.055415 2,877,198.27
HKD 2,205,864.08 0.81760 1,803,514.47
Short-term borrowings
Including: HKD 33,225,941.03 0.81760 27,165,529.39
Accounts payable
Including: JPY 96,077,624.73 0.055415 5,324,141.57
HKD 2,888,026.00 0.81760 2,361,250.06
Other payables
Including: JPY 246,699,113.72 0.055415 13,670,831.39
HKD 2,083,968.47 0.81760 1,703,852.62
Long-term borrowings - -
Including: HKD 94,818,743.38 0.81760 77,523,804.59
JPY 50,013,537.91 0.055415 2,771,500.20
(2). Information of overseas operating entities, in which main business location, recording currency and
191 / 243
2021 Annual Report
basis of selection shall be disclosed for significant overseas operating entities, and the reason shall be
disclosed in case of changes in recording currency
√Applicable □Not Applicable
Company name Place of registration Functional Currency Basis of selection
Common currency of the place
Japan Hundsun Tokyo, Japan JPY
of business
Common currency of the place
Hundsun International Technologies Hong Kong HKD
of business
Common currency of the place
Hundsun Ayers Hong Kong HKD
of business
Common currency of the place
Hundsun HK Hong Kong HKD
of business
Common currency of the place
Ayers Technologies (Singapore) Singapore SGD
of business
Common currency of the place
Intercontinental Holdings Hong Kong HKD
of business
Common currency of the place
Hundsun U.S. Delaware, USA USD
of business
Common currency of the place
Chain Next Hong Kong HKD
of business
Common currency of the place
Hundsun International British Virgin Islands USD
of business
Common currency of the place
Hundsun Holdings Hong Kong HKD
of business
Common currency of the place
IHS Markit (Hong Kong) Hong Kong HKD
of business
Common currency of the place
GenSys Technology Hong Kong HKD
of business
83. Hedging
□Applicable √Not Applicable
84. Government grants
(1). Basic information of government grants
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Amount charged to the current
Type Amount Item presented
profit or loss
Asset-related government grants 38,210,906.29 Deferred income 8,938,442.18
Revenue-related government grants used to
compensate the Company for related costs Deferred income 10,600,000.00
or losses in future periods
Revenue-related government grants used to
compensate the Company for related costs 265,029,010.51 Other income 265,029,010.51
or losses incurred
(2). Refund of government grants
□Applicable √Not Applicable
192 / 243
2021 Annual Report
85. Others
□Applicable √Not Applicable
VIII. Changes in the Scope of Consolidation
1. Business combination not under common control
√Applicable □Not Applicable
(1). Business combinations not under common control in the current period
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Income of the Net profits of
Shareholding Determination acquiree from acquiree from
Name of Acquisition Acquisition percentage Acquisition Purchase
basis of the purchase the purchase
acquiree date cost method date
(%) purchase date date to the end date to the end
of the period of the period
Established
2018.12.11 4,000,000.00 15.43 by
Shanghai investment 2021.5.31 Acquisition of
6,325,751.48 -3,663,012.75
Dworld control
Capital
2021.5.20 50,000,000.00 50.00
increase
Hundsun Share Acquisition of
2021.5.24 40,000,000.00 100.00 2021.5.31 27,052,995.34 -14,857,631.04
Lirong transfer control
Share
Hundsun transfer Acquisition of
2021.1.20 96,250,000.00 87.50 2021.1.31 80,924,321.04 -33,929,955.87
iBontal and capital control
increase
(2). Consolidated cost and goodwill
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Consolidated cost Shanghai Dworld Hundsun Lirong Hundsun iBontal
--Cash 50,000,000.00 40,000,000.00 96,250,000.00
--Fair value of shares held before the
15,462,727.93
purchase date
Total consolidated cost 65,462,727.93 40,000,000.00 96,250,000.00
Less: Fair value of net identifiable assets
31,914,863.50 27,757,267.04 86,707,360.91
acquired
Amount of goodwill/consolidated cost less
than the fair value of identifiable net assets 33,547,864.43 12,242,732.96 9,542,639.09
acquired
Recognition method of the fair value of consolidated cost or contingent consideration and change thereof:
According to the Capital Increase Agreement entered between the Company, Shanghai Dworld and its
original shareholders in April 2021, the Company increased its capital by RMB50 million with cash and bank
balances in Shanghai Dworld, including the newly increased registered capital of RMB10.9 million and the capital
reserve of RMB39.1 million. Upon completion of the capital increase, the company held a total of 65.43% of the
shares of Shanghai Dworld, including 55.07% held by itself and 10.36% held through Hangzhou Xinglu, and thus
acquired control over Shanghai Dworld. The transaction price was determined based on the Asset Appraisal
Report on the Value of All Shareholders' Interests in Shanghai Dworld AI Tech Co., Ltd. Involved in the Proposed
193 / 243
2021 Annual Report
Capital and Share Increase by Hundsun Technologies Inc. (TYPBZ [2021] No. 0107) issued by Shaoxing
Tianyuan Asset Evaluation Co., Ltd. on the valuation date of December 31, 2020.
According to the Share Transfer Agreement entered into between the Company and Hangzhou Xinli
Technology Co., Ltd. in March 2021, Hangzhou Xinli transferred its full shares, i.e., 20 million shares, in
Hundsun Lirong to the Company for RMB40 million. Upon completion of the share transfer, the Company held
100.00% of the shares of Hundsun Lirong and thus acquired control over Hundsun Lirong. The transaction price
was determined based on the Asset Appraisal Report on the Value of Certain Assets and Liabilities of Hangzhou
Xinli Technology Co., Ltd. Involved in the Assets to be Verified by Hangzhou Xinli Software Co., Ltd. (WLPBZ
[2021] No.10321) issued by Shanghai Wanlong Asset Evaluation Co., Ltd. on the valuation date of December 31,
2020.
According to the Share Transfer Agreement and the Capital and Share Increase Framework Agreement
entered into between the Company and Hundsun iBontal and its original shareholders, the original shareholders of
Hundsun iBontal transferred 16 million shares held thereby in Hundsun iBontal to the Company for RMB22
million. At the same time, the Company increased its capital by RMB74.25 million with cash and bank balances
in Hundsun iBontal, including the newly increased registered capital of RMB54 million and the capital reserve of
RMB20.25 million. Upon completion of the share transfer and capital increase, the Company held 87.50% of the
shares of Hundsun iBontal and thus acquired control over Hundsun iBontal. The transaction price was determined
based on the Asset Appraisal Report on the Value of All Shareholders' Interests in Hundsun iBontal Involved in
the Proposed Capital Increase in Hundsun iBontal by Hundsun Technologies Inc. (TYPBZ [2021] No. 0137)
issued by Shaoxing Tianyuan Asset Evaluation Co., Ltd. on the valuation date of December 31, 2020.
(3). Identifiable assets and liabilities of the acquiree on the purchase date
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Shanghai Dworld Hundsun Lirong Hundsun iBontal
Fair value on the Book value on the Fair value on the Book value on Fair value on the Book value on
Assets: 51,814,549.44 purchase date
purchase date 31,088,240.45 the 31,088,240.45 purchase date
51,301,360.12 purchase date purchase date purchase date
113,088,538.03 the108,254,075.07
Cash and bank
28,410,070.57 28,410,070.57 111,533.90 111,533.90 19,146,695.77 19,146,695.77
balances
Accounts
357,184.80 357,184.80 25,631,799.40 25,631,799.40 24,186,991.63 24,186,991.63
receivable
Prepayments 6,000.00 6,000.00 284,492.00 284,492.00
Other receivables 20,096,325.82 20,096,325.82 77,800.27 77,800.27 39,368,735.71 39,368,735.71
Inventories 2,278,162.96 2,278,162.96 945,648.07 945,648.07 7,224,491.15 7,224,491.15
Contract assets 392,815.42 392,815.42
Other current
389.13 389.13
assets
Fixed assets 153,615.97 153,615.97 12,989.35 12,989.35 86,026.34 86,026.34
Intangible assets 513,189.32 4,023,588.33 4,023,588.33 22,473,539.55 17,639,076.59
Deferred income
209,242.46 209,242.46
tax assets
Liabilities: 3,035,310.11 3,035,310.11 3,330,973.41 3,330,973.41 13,994,411.28 13,994,411.28
Accounts payable 2,192,613.63 2,192,613.63 40,176.02 40,176.02
Advances from 4,377,212.30 4,377,212.30
194 / 243
2021 Annual Report
customers
Contract
2,388,226.19 2,388,226.19 4,575,754.24 4,575,754.24
liabilities
Employee
compensation 592,446.36 592,446.36 1,138,359.78 1,138,359.78 1,981,037.71 1,981,037.71
payable
Taxes payable 25,179.75 25,179.75 2,029,944.66 2,029,944.66
Other payables 21,200.00 21,200.00 22,752.16 22,752.16
Provision for
8,257.81 8,257.81 967,534.19 967,534.19
liabilities
Net assets 48,779,239.33 48,266,050.01 27,757,267.04 27,757,267.04 99,094,126.75 94,259,663.79
Less: Minority
16,864,375.83 16,962,182.30 12,386,765.84 11,782,457.97
interests
Net assets
31,914,863.50 31,303,867.71 27,757,267.04 27,757,267.04 86,707,360.91 82,477,205.82
acquired
Recognition methods of the fair value of identifiable assets and liabilities:
The fair value of identifiable assets of Shanghai Genus was determined based on the Asset Appraisal Report
on the Value of All Shareholders' Interests in Shanghai Dworld AI Tech Co., Ltd. Involved in the Proposed Capital
and Share Increase by Hundsun Technologies Inc. (TYPBZ [2021] No. 0107) issued by Shaoxing Tianyuan Asset
Evaluation Co., Ltd. on March 25, 2021.
The fair value of identifiable assets of Hundsun Lirong was determined based on the Asset Appraisal Report
on the Value of Certain Assets and Liabilities of Hangzhou Xinli Technology Co., Ltd. Involved in the Assets to be
Verified by Hangzhou Xinli Software Co., Ltd. (WLPBZ [2021] No.10321) issued by Shanghai Wanlong Asset
Evaluation Co., Ltd. on February 26, 2021.
The fair value of identifiable assets of Hundsun iBontal was determined based on the Asset Appraisal Report
on the Value of All Shareholders' Interests in Hundsun iBontal Involved in the Proposed Capital Increase in
Hundsun iBontal by Hundsun Technologies Inc. (TYPBZ [2021] No. 0137) issued by Shaoxing Tianyuan Asset
Evaluation Co., Ltd. on April 12, 2021.
(4). Gains or losses arising from the remeasurement at the fair value of shares held before the purchase
date
Whether there are multiple transactions that realize business combination step by step and acquire control in the
Reporting Period
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Amount of other
Gains or losses arising Method and main
comprehensive income
Carrying value of from the assumptions for
Fair value of the original related to the original
Name of the original shares remeasurement at the determining the fair
shares held before the shares held before the
acquiree held before the fair value of original value of the original
purchase date purchase date
purchase date shares held before the shares held before the
transferred to the
purchase date purchase date
investment income
Shanghai
-285,189.76 15,462,727.93 15,747,917.69 Asset Appraisal Report 2,565,362.09
Dworld
(5). Notes related to the inability to reasonably determine the merger consideration or the fair value of the
195 / 243
2021 Annual Report
acquiree's identifiable assets and liabilities on the purchase date or at the end of the period of the
merger
□Applicable √Not Applicable
(6). Other Description
□Applicable √Not Applicable
2. Business combination under common control
□Applicable √Not Applicable
3. Counter purchase
□Applicable √Not Applicable
4. Disposal of subsidiaries
Is there any circumstance that the control is lost due to the disposal of subsidiaries in investment
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
5. Changes in the scope of consolidation due to other reasons
Changes in the scope of consolidation due to other reasons (such as establishing new subsidiaries, liquidating
subsidiaries) and related information:
√Applicable □Not Applicable
(1) Expanded scope of consolidation
Unit: Yuan Currency: RMB
Proportion of
Company name Acquisition method Acquisition date Amount of contribution
contribution
Established by
Xunchang Wendao 2021.4.8 35,000,000.00 70.00%
investment
Established by
Nanjing Xingding 2021.4.13 27,955,000.00 58.33%
investment
(2) Narrowed scope of consolidation
Unit: Yuan Currency: RMB
Net profit from the
Net assets as of the
Company name Share disposal method Date of disposal beginning of the period
disposal date
to the disposal date
Quzhou Hundsun Cancellation 2021.9.15 952,196.52 1,291,374.08
Beijing Xinruanfu Cancellation 2021.9.15 -500,029.52 161,143.80
6. Others
□Applicable √Not Applicable
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2021 Annual Report
IX. Equity in Other Entities
1. Equity in subsidiaries
(1). Composition of the Group
√Applicable □Not Applicable
Shareholding percentage
Principal place of Place of Nature of (%) Acquisition
Name of subsidiary
business registration business method
Direct Indirect
Hangzhou Hundsun
Hangzhou, Hangzhou, Industrial
Cloud Investment 69.70 Establishment
Zhejiang Zhejiang investment
Holding Co., Ltd.
Wuxi Henghua
Wuxi,
Technology Development Wuxi, Jiangsu Real estate 100.00 Establishment
Jiangsu
Co., Ltd.
Hangzhou Hundsun Data
Hangzhou, Hangzhou,
Security Technology Co., Software 87.70 Establishment
Zhejiang Zhejiang
Ltd.
Jinrui Software
Hangzhou, Hangzhou,
Technology (Hangzhou) Software 100.00 Establishment
Zhejiang Zhejiang
Co., Ltd.
Beijing Qiantang
Hundsun Technology Co., Beijing Beijing Software 94.00 6.00 Establishment
Ltd.
Shanghai Yirui
Management
Management Consulting Shanghai Shanghai 70.00 Establishment
consulting
Co., Ltd.
Japan Hundsun Software
Japan Japan Software 48.95 Establishment
Inc.
Hundsun International Business
Technologies Holding Investment combination not
Hong Kong Hong Kong 96.45 1.33
Limited management under common
control
Shanghai Liming Business
Technology Co., Ltd. combination not
Shanghai Shanghai Software 100.00
under common
control
Shanghai Gildata Inc Business
combination not
Shanghai Shanghai Software 63.19 5.91
under common
control
Hangzhou Yunhui
Hangzhou, Hangzhou, Investment
Investment Management 100.00 Establishment
Zhejiang Zhejiang management
Co., Ltd.
Hangzhou Cloudwing
Hangzhou, Hangzhou,
Network Technology Co., Software 96.56 1.13 Establishment
Zhejiang Zhejiang
Ltd.
Hangzhou Securities
Hangzhou, Hangzhou,
Investment Network Software 60.00 13.39 Establishment
Zhejiang Zhejiang
Technology Co., Ltd.
Hangzhou Cloudyee
Hangzhou, Hangzhou,
Network Technology Co., Software 56.43 11.72 Establishment
Zhejiang Zhejiang
Ltd.
Hangzhou Yunyong
Hangzhou, Hangzhou,
Network Technology Co., Software 60.00 13.12 Establishment
Zhejiang Zhejiang
Ltd.
Hangzhou Cloudbroker
Hangzhou, Hangzhou,
Network Technology Co., Software 57.93 10.64 Establishment
Zhejiang Zhejiang
Ltd.
Hangzhou Yunlian
Hangzhou, Hangzhou,
Network Technology Co., Software 60.00 23.57 Establishment
Zhejiang Zhejiang
Ltd.
Hangzhou Shanshang Hangzhou, Hangzhou, Software 60.00 23.57 Establishment
197 / 243
2021 Annual Report
Shareholding percentage
Principal place of Place of Nature of (%) Acquisition
Name of subsidiary
business registration business method
Direct Indirect
Network Technology Co., Zhejiang Zhejiang
Ltd.
Hangzhou Hundsun
Hangzhou, Hangzhou,
Wengine Network Software 70.00 Establishment
Zhejiang Zhejiang
Technology Co., Ltd.
Hangzhou Yima
Hangzhou, Hangzhou, Investment
Investment Management 100.00 Establishment
Zhejiang Zhejiang management
Co., Ltd.
Hundsun Intercontinental Investment
Hong Kong Hong Kong 100.00 Establishment
Holdings (HK) Limited management
Guangdong Institute of Academic
Financial Innovation exchange and
Guangzhou, Guangzhou, discussion;
60.00 Establishment
Guangdong Guangdong cultivation of
high-end
financial talents
Hangzhou Xinglu Equity
Hangzhou, Hangzhou, Investment
Investment Partnership 75.10 Establishment
Zhejiang Zhejiang management
(L.P.)
Business Intelligence Business
Info. Tech. (Hangzhou) Hangzhou, Hangzhou, combination not
Software 60.49 6.16
Co., Ltd. Zhejiang Zhejiang under common
control
Shanghai Hunsun
Shengtian Network Shanghai Shanghai Software 100.00 Establishment
Technology Co., Ltd.
Hangzhou Zhigu Network Hangzhou, Hangzhou,
Software 60.00 13.38 Establishment
Technology Co., Ltd. Zhejiang Zhejiang
Zhejiang Jingteng
Hangzhou, Hangzhou,
Network Technology Co., Software 59.21 12.12 Establishment
Zhejiang Zhejiang
Ltd.
Wuxi Xinglu Tiancheng
Wuxi, Investment
Investment Management Wuxi, Jiangsu 60.13 Establishment
Jiangsu management
Partnership (L.P.)
Hundsun IHS Markit
Hangzhou, Hangzhou,
China Technologies Co., Software 67.00 Establishment
Zhejiang Zhejiang
Ltd.
Nanjing Xingcheng
Nanjing, Investment
Equity Investment Nanjing, Jiangsu 59.41 0.99 Establishment
Jiangsu management
Partnership (L.P.)
Hundsun Holdings Investment
Hong Kong Hong Kong 96.45 1.33 Establishment
Limited management
BusinessMatrix Software Business
Technology Ltd. Guangzhou, Guangzhou, combination not
Software 85.00
Guangdong Guangdong under common
control
Shanghai Genus-Finance Business
Information Technology combination not
Shanghai Shanghai Software 57.93 17.54
Co., Ltd. under common
control
Hundsun iBontal Business
(Guangdong) Technology Shenzhen, Shenzhen, combination not
Software 91.16
Co., Ltd. Guangdong Guangdong under common
control
Zhejiang Xunchang
Wendao Network Hangzhou, Hangzhou,
Software 70.00 Establishment
Information Technology Zhejiang Zhejiang
Co., Ltd.
Shanghai Dworld AI Tech Business
Co., Ltd. Shanghai Shanghai Software 55.07 10.36 combination not
under common
198 / 243
2021 Annual Report
Shareholding percentage
Principal place of Place of Nature of (%) Acquisition
Name of subsidiary
business registration business method
Direct Indirect
control
Nanjing Xingding Equity
Nanjing, Investment
Investment Partnership Nanjing, Jiangsu 58.33 2.09 Establishment
Jiangsu management
(L.P.)
The basis for the Company's control over the investee when holding half or less of the voting rights and the
Company's control over the investee when holding more than half of the voting rights:
The Company holding 48.95% of the shares of Japan Hundsun is the largest shareholder of this
subsidiary. The Board of Japan Hundsun has three Directors, among which two are appointed by the
Company, thus the Company has substantial control over this subsidiary. Therefore, Japan Hundsun is
incorporated into the scope of the consolidated financial statements
(2). Significant non-wholly owned subsidiaries
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Shareholding
Profit or loss attributable Dividends declared to Balance of minority
percentage of
Name of subsidiary to minority shareholders minority shareholders in interests at the end of
minority
in the current period the current period the period
shareholders
Cloud Investment 30.30 3,190,300.62 1,440,000.00 60,070,496.35
Japan Hundsun 51.05 -1,090,576.21 10,330,875.50
Cloudyee Network 31.85 19,129,268.72 30,502,500.00 52,267,846.96
Cloudbroker Network 31.43 -740,972.93 11,054,551.31
Wengine Network 30.00 15,799,047.28 9,000,000.00 32,646,613.69
Hangzhou Xinglu 24.90 -1,052,660.98 15,968,151.00
Jingteng Network 28.67 424,932.00 17,578,054.46
Wuxi Xinglu 39.87 -1,386,067.90 9,578,111.12
Shanghai Gildata 30.90 2,631,224.57 29,124,354.44
Business Intelligence 33.35 218,252.11 10,750,680.37
(Hangzhou)
Shanghai Genus 24.53 829,804.25 15,567,012.44
IHS Markit 33.00 -3,381,146.92 17,395,611.17
Nanjing Xingcheng 39.60 -3,788,043.29 116,961,480.23
Cloudwing Network 2.31 79,098.80 31,509,604.76
Hundsun Holdings 2.22 1,204,877.45 12,751,304.97
Hundsun iBontal 8.84 -3,823,808.85 5,762,956.36
Xunchang Wendao 30.00 -4,181,380.14 10,818,619.86
Shanghai Dworld 34.57 -1,266,408.10 15,597,967.73
Notes on the difference between the shareholding percentage of minority shareholders of subsidiaries and
the voting rights ratio:
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
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2021 Annual Report
(3). Main financial information of significant non-wholly owned subsidiaries
√Applicable □Not Applicable
Unit: 10,000 yuan Currency: RMB
Closing balance Opening balance
Name of subsidiary Current Non-current Current Non-current Total Current Non-current Current Non-current Total
Total assets Total assets
assets assets liabilities liabilities liabilities assets assets liabilities liabilities liabilities
Cloud Investment 40,695 13,755 54,450 32,302 32,302 40,626 14,049 54,675 33,157 18 33,175
Japan Hundsun 4,266 43 4,309 2,008 277 2,285 4,807 41 4,848 2,267 27 2,294
Cloudyee Network 23,177 386 23,563 7,155 7,155 22,587 560 23,147 5,920 2 5,922
Cloudbroker 7,289 389 7,678 4,003 1 4,004 5,574 548 6,122 2,317 1 2,318
Network
Wengine Network 20,618 169 20,787 9,879 26 9,905 18,384 177 18,561 9,925 21 9,946
Hangzhou Xinglu 122 10,438 10,560 4,146 4,146 1,297 17,063 18,360
Jingteng Network 8,571 3,356 11,927 5,765 31 5,796 8,528 3,780 12,308 6,522 13 6,535
Wuxi Xinglu 77 2,325 2,402 6,294 4,906 11,200
Shanghai Gildata 24,017 2,395 26,412 16,530 61 16,591 20,353 1,930 22,283 13,624 13,624
Business 7,810 40 7,850 4,557 29 4,586 6,641 43 6,684 3,543 15 3,558
Intelligence
(Hangzhou)
Shanghai Genus 6,631 2,723 9,354 2,625 12 2,637 6,048 3,071 9,119 2,862 20 2,882
IHS Markit 5,425 28 5,453 182 182 6,425 30 6,455 214 214
Nanjing Xingcheng 124 29,409 29,533 2,102 20,042 22,144
Cloudwing 4,686 3 4,689 2,148 2,148
15,326 24,410 39,736 6,293 7 6,300
Network
Hundsun Holdings 10,401 62,262 72,663 6,748 7,791 14,539 8,127 49,291 57,418 11,471 8,395 19,866
Hundsun iBontal 7,003 1,978 8,981 2,392 72 2,464
Xunchang Wendao 3,778 424 4,202 487 108 595
Shanghai Dworld 4,869 59 4,928 416 1 417
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2021 Annual Report
Amount in the current period Amount in the previous period
Name of subsidiary Total Total
Cash flow from Cash flow from
Revenue Net profit comprehensive Revenue Net profit comprehensive
operating activities operating activities
income income
Cloud Investment 1,655 851 851 -85 922 1,854 1,854 -72
Japan Hundsun 5,189 -214 -214 -447 6,487 64 64 -1,075
Cloudyee Network 14,207 6,005 6,005 5,440 8,889 3,461 3,461 4,905
Cloudbroker Network 4,811 -236 -236 525 2,246 -1,484 -1,484 -843
Wengine Network 9,243 5,266 5,266 3,872 7,833 4,381 4,381 5,970
Hangzhou Xinglu -423 -423 -2 -2,031 -2,031 -241
Jingteng Network 11,792 148 148 -765 12,594 3,030 3,030 4,633
Wuxi Xinglu -348 -348 -2 277 277 -2
Shanghai Gildata 29,062 852 852 3,046 21,460 732 732 1,883
Business Intelligence 4,133 24 24 713
7,463 65 65 -680
(Hangzhou)
Shanghai Genus 5,159 484 484 338
IHS Markit 21 -1,025 -1,025 -1,191 77 -756 -760 -733
Nanjing Xingcheng -951 -951 -300
Cloudwing Network 2,929 -1,144 -1,144 -1,278 4,646 1,620 1,620 720
Hundsun Holdings 17,160 5,428 5,428 5,586 15,657 5,409 5,409 6,936
Hundsun iBontal 8,092 -3,393 -3,393 -1,664
Xunchang Wendao 440 -1,394 -1,394 -1,118
Shanghai Dworld 633 -366 -366 -336
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2021 Annual Report
(4). Substantial restriction on the usage of assets or the settlement of liabilities of the Group
□Applicable √Not Applicable
(5). Financial support or other support provided to structured entities within the scope of the
consolidated financial statement
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
2. Transactions in which the owners' equity in a subsidiary has changed and the subsidiary is still
under control
√Applicable □Not Applicable
(1). Changes in the owners' equity in subsidiaries
√Applicable □Not Applicable
Shareholding percentage before Shareholding percentage after
Name of subsidiary Date of change
change change
Cloudbroker Network 2021.6.24 64.60% 68.57%
Shanghai Genus 2021.5.25\2021.7.9 57.41% 75.47%
Hundsun iBontal 2021.9.29 87.50% 91.16%
Cloudwing Network 2021.12.16 72.38% 97.69%
Hundsun Lirong 2021.12.22 100.00% 86.21%
(2). Effect of transactions on minority equity and owners' equity attributable to the parent company
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Cloudbroker Shanghai Hundsun Cloudwing
Hundsun Lirong
Network Genus iBontal Network
Acquisition cost/disposal consideration
--Cash 5,251,770.00 4,390,383.84 3,802,500.00 300,000,000.00 140,000,000.00
-- Fair value of non-cash assets
Total acquisition cost/disposal
5,251,770.00 4,390,383.84 3,802,500.00 300,000,000.00 140,000,000.00
consideration
Less: Share of net assets of subsidiaries
based on the percentage of shares 1,225,484.84 336,145.15 2,800,000.63 300,211,879.57 137,372,239.70
acquired/disposed
Difference 4,026,285.16 4,054,238.69 1,002,499.37 -211,879.57 2,627,760.30
Including: Adjustment to capital reserves
Adjustment to surplus reserves -4,026,285.16 -4,054,238.69 -1,002,499.37 211,879.57 -2,627,760.30
Adjustment to undistributed
profits
Other Description
□Applicable √Not Applicable
202 / 243
2021 Annual Report
3. Equity in joint ventures or associates
√Applicable □Not Applicable
(1). Significant joint ventures or associates
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Shareholding percentage Accounting methods
Principal
Name of joint venture or Place of Nature of (%) for the investment in
place of
associate registration business joint ventures or
business Direct Indirect associates
Shenzhen Ricequant
Technology Co., Ltd.
Shenzhen Shenzhen Software 17.25 4.38 Equity method
(hereinafter referred to as
Shenzhen Ricequant)
Ant (Hangzhou) Fund Sales
Hangzhou, Hangzhou,
Co., Ltd. (hereinafter referred Finance 24.10 Equity method
Zhejiang Zhejiang
to as Ant Fund)
Shenzhen Tradeblazer
Technology Co., ,Ltd.
Shenzhen Shenzhen Software 28.02 6.99 Equity method
(hereinafter referred to as
Shenzhen Tradeblazer)
Hundsun Cloud Financing
Network Technology Co., Hangzhou, Hangzhou,
Software 21.80 4.83 Equity method
Ltd. (hereinafter referred to Zhejiang Zhejiang
as Cloud Financing Network)
(2). Main financial information of significant joint ventures
□Applicable √Not Applicable
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2021 Annual Report
(3). Main financial information of significant associates
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance / amount in the current period Opening balance/ amount in the previous period
Shenzhen Ant Fund Shenzhen Cloud Financing Shenzhen Ricequant Ant Fund Shenzhen Cloud Financing
Ricequant Tradeblazer Network Tradeblazer Network
Current assets 14,911,118.64 10,750,923,413.25 147,521,500.53 106,082,067.43 21,466,250.33 8,219,298,026.76 156,831,002.23 56,261,017.89
Non-current assets 6,038,494.06 97,591,983.00 3,461,210.46 1,720,873.97 6,847,511.31 30,026,232.35 4,811,031.01 1,069,654.41
Total assets 20,949,612.70 10,848,515,396.25 150,982,710.99 107,802,941.40 28,313,761.64 8,249,324,259.11 161,642,033.24 57,330,672.30
Current liabilities 2,238,896.79 9,846,261,484.40 7,758,112.00 64,273,940.02 971,297.48 7,750,764,449.35 3,729,539.47 42,915,530.49
Non-current liabilities 1,442,220.19 336,275.73 289,869.32
Total liabilities 2,238,896.79 9,847,703,704.59 7,758,112.00 64,610,215.75 971,297.48 7,750,764,449.35 3,729,539.47 43,205,399.81
Minority interests -23,393.07 -6,902.06
Equity attributable to
shareholders of the parent 18,710,715.91 1,000,811,691.66 143,247,992.06 43,192,725.65 27,342,464.16 498,559,809.76 157,919,395.83 14,125,272.49
company
Shares of net assets at the
4,047,344.18 241,167,192.12 50,151,063.08 11,500,352.55 5,914,957.07 120,138,753.80 54,664,758.03 4,392,349.73
shareholding percentage
Adjustments 61,835,817.56 15,339,388.62 37,002,476.34 12,487,431.15 61,835,817.56 15,339,388.62 37,002,476.34 12,582,695.51
--Goodwill 61,816,357.91 45,757,024.16 15,803,266.37 61,816,357.91 45,757,024.16 15,803,266.37
--Unrealized profit of internal
transaction
--Others 19,459.65 15,339,388.62 -8,754,547.82 -3,315,835.22 19,459.65 15,339,388.62 -8,754,547.82 -3,220,570.86
41,325,091.00 47,651,170.76 41,325,091.00
Impairment provision 47,651,170.76
Carrying value of equity
18,231,990.98 256,506,580.74 45,828,448.42 23,987,783.70 20,099,603.87 135,478,142.42 50,342,143.37 16,975,045.24
investments in associates
Fair value of equity investments
in associates with a public offer
Revenue 14,092,679.89 12,124,218,535.44 33,938,385.54 114,616,067.68 9,829,008.61 6,011,650,173.07 23,285,468.67 77,992,615.92
Net profit -8,631,748.25 503,863,782.59 17,328,596.23 -29,296,546.84 -18,540,841.04 98,748,334.35 9,749,748.29 -28,354,348.17
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2021 Annual Report
Net profit from discontinued
operations
Other comprehensive income
Total comprehensive income -8,631,748.25 503,863,782.59 17,328,596.23 -29,296,546.84 -18,540,841.04 98,748,334.35 9,749,748.29 -28,354,348.17
Dividends received from
8,966,400.00
associates in the current year
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2021 Annual Report
(4). Summarized financial information of insignificant joint ventures and associates
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance / amount in the current Opening balance/ amount in the previous
period period
Associates:
Total carrying amount of investments 766,391,973.34 516,079,798.53
Total amount of the following items at the shareholding percentage
-- Net profit -156,306,553.89 -4,233,446.90
-- Other comprehensive income
-- Total comprehensive income -156,306,553.89 -4,233,446.90
(5). Significant restrictions on joint ventures or associates transferring funds to the Company
□Applicable √Not Applicable
(6). Excess loss incurred by joint ventures or associates
□Applicable √Not Applicable
(7). Unrecognized commitments related to investment in joint ventures
□Applicable √Not Applicable
(8). Contingent liabilities related to investment in joint ventures or associate
□Applicable √Not Applicable
4. Significant joint venture
□Applicable √Not Applicable
5. Equity in structured entities not included in the consolidated financial statement
Information of structured entities not included in the financial statements:
□Applicable √Not Applicable
6. Others
□Applicable √Not Applicable
X. Risks Related to Financial Instruments
√Applicable □Not Applicable
With an objective of achieving a balance between risk and revenue through risk management, the
Company minimizes the negative impact of risk on its operating results to maximize the interest of its
Shareholders and other equity investors. According to the objective set for risk management, the basic
strategy of the Company's risk management is to identify and analyze the Company's exposures to risk,
establish appropriate tolerance thresholds for risks and implement risk management. In addition, the
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2021 Annual Report
Company supervises various risks in a timely and reliable manner to keep risks within limits.
During the daily operation, the main risks arising from the Company's financial instruments include
credit risk, liquidity risk and market risk. The Management has reviewed and approved policies for
managing all risks and summarized below.
(I) Credit risk
Credit risk refers to the risk that one party to a financial instrument fails to perform its obligations,
resulting in financial losses to the other party.
1. Credit risk management practices
(1) Credit risk assessment method
The Company assesses whether the credit risk of the relevant financial instrument has increased
significantly since the initial recognition on each balance sheet date. In determining whether the credit risk
has increased significantly since initial recognition, the Company considers reasonable and supportable
information that can be obtained without unnecessary additional costs or efforts, including qualitative and
quantitative analysis based on historical data, external credit risk ratings and forward-looking information.
Based on a single financial instrument or a combination of financial instruments with similar credit risk
characteristics, the Company determines the changes in the risk of default of the financial instrument
during the expected life of the instrument by comparing the risk of default on the financial instrument on
the balance sheet date with that on the date of initial recognition.
The Company considers a financial instrument to have experienced a significant increase in credit risk
when one or more of the following quantitative or qualitative criteria have been met:
1) Quantitative criteria mainly refer to the probability of default for the remaining life on the balance
sheet date increasing by more than a certain percentage from the initial recognition;
2) Qualitative criteria mainly refer to the significant adverse change in debtor’s operation or financial
position, existing or anticipated changes in the technological, market, economic or legal environment that
will have a material adverse effect on the debtors’ abilities to repay loans to the Company.
(2) Definition of default and credit-impaired asset
When a financial instrument meets one or more of the following conditions, the Company defines a
financial asset as a default asset, which is consistent with the definition of credit-impaired asset:
1) The debtor has major financial difficulties;
2) The debtor violates the provisions of the contract binding thereon;
3) The debtor is likely to go bankrupt or undergo financial restructuring;
4) The creditor, for economic or contractual reasons relating to the debtor’s financial difficulty, grants
the debtor concessions that would not have been made in any other circumstances.
2. ECL measurement
The key parameters of ECL measurement include probabilities of default (PD), losses given default
(LGD) and exposures at default (EAD). The Company takes into account the quantitative analysis of
historical statistics (such as ratings of the counterparty, manners of guarantees and types of collateral, and
repayments) and forward-looking information in order to establish a model of PD, LGD and EAD.
3. The reconciliation of the opening balance and the closing balance of the allowance for losses on
financial instruments is detailed in Note VII(4), (5), (8), (10) and (15) to the financial statements.
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2021 Annual Report
4. Credit risk exposure and credit risk concentration
Credit risks of the Company arise primarily from cash and bank balances and accounts receivable. In
order to control the relevant risks above, the Company takes the following measures respectively.
(1) Cash and bank balances
The Company keeps bank deposits and other cash and bank balances in financial institutions at higher
credit ratings, so their credit risks are low.
(2) Accounts receivable
The Company regularly conducts credit assessments on customers who trade on credit terms. Based on
the assessment results, the Company chooses to trade with recognized and creditworthy customers and
monitors their accounts receivable balances to ensure that the Company will not be exposed to significant
bad debt risk.
As the Company's exposure to accounts receivable is spread across multiple partners and multiple
customers, 7.90% (December 31, 2020: 6.42%) of the Company’s accounts receivable arose from the top
five customers with balances as of December 31, 2021, and the Company did not have significant credit
concentration risk.
The maximum credit risk exposure of the Company was the carrying amount of each financial asset on
the balance sheet.
(II) Liquidity risk
Liquidity risk refers to the risk of shortage of funds arising from the performance of the Company's
obligations to settle by delivery of cash or other financial assets. Liquidity risk may arise from the inability
to sell financial assets at fair value as quickly as possible, or from the failure of the other party to repay its
contractual obligations, or from debts maturing early, or from the failure to generate the desired cash flow.
In order to control this risk, the Company maintains a balance between continuity of funding and flexibility
using several financing methods such as notes settlement and bank borrowings and by optimizing the
financing structure through the combination of long and short-term financing. The Company has obtained
bank lines of credit from a number of commercial banks to meet working capital requirements and capital
expenditure.
Classification of financial assets by the remaining maturity
Closing balance
Item Contract amount
Carrying value Within 1 year 1-3 years Over 3 years
before discount
Bank borrowings 406,482,379.81 423,546,817.44 194,009,340.75 163,120,828.12 66,416,648.57
Accounts
503,758,715.18 503,758,715.18 503,758,715.18
payable
Other payables 170,804,176.79 170,804,176.79 170,804,176.79
Current portion
of non-current 154,496,614.61 160,966,349.12 160,966,349.12
liabilities
Lease liabilities 23,298,204.05 24,699,694.62 17,191,767.51 7,507,927.11
Sub-total 1,258,840,090.44 1,283,775,753.15 1,029,538,581.84 180,312,595.63 73,924,575.68
(Continued)
Closing balance of the previous year
Item Contract amount
Carrying value Within 1 year 1-3 years Over 3 years
before discount
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2021 Annual Report
Bank
252,808,623.96 273,181,365.91 52,044,014.74 141,276,618.07 79,860,733.10
borrowings
Accounts
192,172,938.77 192,172,938.77 192,172,938.77
payable
Other payables 128,629,520.86 128,629,520.86 128,629,520.86
Sub-total 573,611,083.59 593,983,825.54 372,846,474.37 141,276,618.07 79,860,733.10
(III) Market risk
Market risk is the risk that the fair value or the future cash flows of a financial instrument will
fluctuate due to changes in market prices. Market risk mainly includes interest rate risk and foreign
exchange risk.
1. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate due to changes in market interest rates. Interest-bearing financial instruments with a fixed interest
rate expose the Company to fair value interest risk, while interest-bearing financial instruments with
variable interest rates expose the Company to cash flow interest rate. The Company determines the
proportion of fixed-rate and variable-rate financial instruments based on market conditions, and maintains
an appropriate portfolio of financial instruments through regular review and monitoring. The Company's
cash flow interest risk is primarily related to its bank borrowings at variable interest rates.
As of December 31, 2021, the Company's bank borrowings at floating interest rates amounted to
RMB371,163,804.59 (as of December 31, 2020: RMB205,953,538.33). Assuming that other variables
remain constant, a 50 bps change in the interest rate will not have a material impact on the Company's total
profit and shareholders' equity.
2. Foreign exchange risk
Foreign exchange risk is the risk that the fair value or the future cash flows of a financial instrument
will fluctuate due to changes in exchange rates. The Company's foreign currency risk is primarily related to
monetary assets and liabilities in foreign currencies. In case of a short-term imbalance between foreign
currency assets and liabilities, the Company may trade foreign currency at the market exchange rate when
necessary, to keep the net risk exposure at an acceptable level.
The Company’s monetary assets and liabilities in foreign currencies at the end of the period are
detailed in Note VII (82) to the financial statements.
XI. Disclosure of Fair Value
1. Closing fair values of assets and liabilities at fair value
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing fair value
Item Level I Level II Level III
measurement at measurement at measurement at fair Total
fair value fair value value
I. Continuous fair value
measurement
(I) Held-for-trading financial assets 1,453,346,143.14 2,425,173,315.15 1,094,723,913.31 4,973,243,371.60
1. Financial assets measured at FVTPL 1,453,346,143.14 2,425,173,315.15 1,094,723,913.31 4,973,243,371.60
(1) Debt instrument investments
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2021 Annual Report
Closing fair value
Item Level I Level II Level III
measurement at measurement at measurement at fair Total
fair value fair value value
(2) Equity instrument investments 668,814,640.35 1,094,723,913.31 1,763,538,553.66
(3) Derivative financial assets
(4) Others 784,531,502.79 2,425,173,315.15 3,209,704,817.94
(II) Other debt investments 65,681,018.23 65,681,018.23
Total assets continuously measured
1,519,027,161.37 2,425,173,315.15 1,094,723,913.31 5,038,924,389.83
at fair value
2. Basis for recognition of market prices for continuous and non-continuous level I measurement
items at fair value
√Applicable □Not Applicable
The Company recognizes the fair value based on unadjusted quoted prices in active markets for
identical assets or liabilities that are available on the measurement date.
3. Qualitative and quantitative information on the valuation techniques and significant parameters
used for continuous and non-continuous level II measurement items at fair value
√Applicable □Not Applicable
The Company recognizes the fair value based on similar quoted prices of assets and liabilities in active
markets, the same or similar quoted prices of assets and liabilities in non-active markets, and observable
interest rate curves and return curves during the normal quoting intervals.
4. Qualitative and quantitative information on the valuation techniques and significant parameters
used for continuous and non-continuous level III measurement items at fair value
√Applicable □Not Applicable
The Company recognizes the fair value by specific valuation techniques on the measurement date, and
the important parameters adopted include interest rates that cannot be directly observed or verified by
observable market data.
5. Reconciliation information between opening and closing carrying amounts and sensitivity
analysis of unobservable parameters for continuous level III measurement items at fair value
□Applicable √Not Applicable
6. Reasons for conversion and policy for determining the timing of conversion for items that are
continuously measured at fair value and converted between levels during the period
□Applicable √Not Applicable
7. Changes in valuation techniques during the period and reasons
□Applicable √Not Applicable
8. Fair value of financial assets and financial liabilities not measured at fair value
210 / 243
2021 Annual Report
□Applicable √Not Applicable
9. Others
□Applicable √Not Applicable
XII. RELATED PARTY AND RELATED PARTY TRANSACTIONS
1. Information of the parent company
√Applicable □Not Applicable
Unit: 10,000 yuan Currency: RMB
Shareholding
Voting right percentage
Name of parent Place of Nature of percentage of the
Registered capital of the parent company
company registration business parent company in the
in the Company (%)
Company (%)
Hangzhou Hundsun
Industrial
Electronics Group Hangzhou 5,000 20.72 20.72
investment
Co., Ltd.
Information of the parent company
The ultimate controlling party of the parent company is Ma Yun.
The ultimate controlling party of the Company is Ma Yun.
2. Subsidiaries of the Company
The information on the Company's subsidiaries is detailed in the Notes.
□Applicable √Not Applicable
3. Joint ventures and associates of the Company
The information on the Company's significant joint ventures and associates is detailed in the Notes.
√Applicable □Not Applicable
Other joint ventures or associates with which the Company had related party transactions during the period
or in prior periods that resulted in balances are as follows:
√Applicable □Not Applicable
Name of joint ventures or associates Relationship with the Company
Hangzhou Rongdu Science & Technology Co., Ltd. (hereinafter referred to as Rongdu
Associate
Science & Technology)
Databaker (Beijing) Technology Co., Ltd. (hereinafter referred to as Databaker
Associate
Technology)
Jiangxi Lianjiaoyun Registration and Settlement Center Co., Ltd. (hereinafter referred
Associate
to as Jiangxi Lianjiaoyun)
Zhejiang Hundsun Changyun Network Technology Co., Ltd (hereinafter referred to as
Associate
Hundsun Changyun)
Zhejiang Baiying Technology Co., Ltd. (hereinafter referred to as Baiying Technology) Associate
Zhejiang Santan Technology Co., Ltd. (hereinafter referred to as Santan Technology) Associate
Golden State Investment Services Co., Ltd.(hereinafter referred to as Golden State
Associate
Investment)
Fujian Trading Market Registration and Settlement Center Co., Ltd. (hereinafter
Associate
referred to as Fujian Settlement Center)
Hangzhou Hundsun Yuntai Network Technology Co., Ltd. (hereinafter referred to as
Associate
Hundsun Yuntai)
Hangzhou Hundsun Century Industry Co., Ltd. (hereinafter referred to as Century Associate
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2021 Annual Report
Industry)
Beijing Hongtian Rongda Information Technology Co., Ltd. (hereinafter referred to as
Associate
Hongtian Rongda)
Hangzhou Wanming Digital Technology Co., Ltd.(hereinafter referred to as Wanming
Associate
Technology)
Shanghai Yitongtou Technology Co., Ltd. (hereinafter referred to as Shanghai Yitong) Associate
Shanghai Dworld AI Tech Co., Ltd. (hereinafter referred to as Shanghai Dworld) Associate [Note 31]
[Note 31] Shanghai Dworld was incorporated into the consolidation scope in the current period.
Other Description
□Applicable √Not Applicable
4. Other related parties
√Applicable □Not Applicable
Name of other related parties Relationship with the Company
Ant Group Co., Ltd. [Note 32] Others
Alibaba Cloud Computing Co., Ltd.
Others
(hereinafter referred to as Alibaba Cloud) [Note 33]
Alibaba (China) Network Technology Co., Ltd.
Others
(hereinafter referred to as Alibaba (China)) [Note 33]
Taobao (China) Software Co., Ltd.
Others
(hereinafter referred to as Taobao (China) Software) [Note 33]
Alibaba Cloud (Singapore) Private Limited
Others
(hereinafter referred to as Alibaba Cloud (Singapore)) [Note 33]
Ant Fortune (Shanghai) Financial Information Services Co., Ltd.
Others
(hereinafter referred to as Ant Fortune (Shanghai)) [Note 34]
Beijing Ant Cloud Financial Information Services Co., Ltd.
Others
(hereinafter referred to as Ant Cloud Financial) [Note 34]
Ant Blockchain Technology (Shanghai) Co., Ltd.
Others
(hereinafter referred to as Ant Blockchain) [Note 34]
Alipay (China) Network Technology Co., Ltd.
Others
(hereinafter referred to as Alipay (China)) [Note 34]
Hangzhou Ant Shangshu information technology Co., Ltd.
Others
(hereinafter referred to as Ant Shangshu) [Note 34]
Beijing OceanBase Technology Co., Ltd.
Others
(hereinafter referred to as OceanBase) [Note 34]
Ant Rongxin (Chengdu) Network Technology Co., Ltd.
Others
(hereinafter referred to as Ant Rongxin) [Note 34]
Ant Lemaibao (Shanghai) Information Technology Co., Ltd.
Others
(hereinafter referred to as Ant Lemaibao) [Note 34]
E-Capital Transfer Co., Ltd.
Others
(hereinafter referred to as E-Capital Transfer) [Note 35]
China Securities Credit Investment Co., Ltd.
Others
(hereinafter referred to as China Securities Credit) [Note 35]
Daocloud Internet Technology Co., Ltd.
Others
(hereinafter referred to as Daocloud Internet) [Note 35]
Xinghuan Information Technology (Shanghai) Stock Co., Ltd.
Others
(hereinafter referred to as Xinghuan Information) [Note 35]
Hangzhou Utry Technology Co., Ltd.
Others
(hereinafter referred to as Hangzhou Utry) [Note 35]
Bank of Qingdao Co., Ltd.
Others
(hereinafter referred to as Bank of Qingdao) [Note 35]
Softbi Corp. Ltd.
Others
(hereinafter referred to as Softbi) [Note 36]
Ping An Bank Co., Ltd.
Others
(hereinafter referred to as Ping An Bank) [Note 37]
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2021 Annual Report
Zhejiang E-Commerce Bank Co., Ltd.
Others
(hereinafter referred to as E-Commerce Bank) [Note 38]
Tianhong Asset Management Co., Ltd.
Others
(hereinafter referred to as Tianhong Asset) [Note 38]
Tianjin Financial Assets Exchange Co., Ltd.
Others
(hereinafter referred to as Tianjin Financial Assets Exchange) [Note 38]
ZhongAn Online P&C Insurance Co., Ltd.
Others
(hereinafter referred to as ZhongAn Online) [Note 38]
Cathay Insurance Company Limited
Others
(hereinafter referred to as Cathay Insurance) [Note 38]
Trust Mutual Life Insurance Company
Others
(hereinafter referred to as Trust Mutual Life) [Note 38]
Zhejiang Hundsun Electronics Charity Foundation
(hereinafter referred to as Hundsun Electronics Charity Foundation) [Note Others
39]
Peng Zhengzang, Liu Shufeng, Jiang Jianshing, Jing Xiandong, Han Xinyi,
Zhu Chao, Yu Bin, Liu Xiaolun, Liu Langyu, Wang Xiangyao, Ding Wei,
Huang Chenli, Chen Zhijie, Xie Lijuan, Fan Jingwu, Guan Xiaolan, Zhang Others
Guoqiang, Zhang Yong, Fu Meiying, Wang Feng, Tong Chenhui, Ni Shouqi,
Zhang Xiaodong, Zhou Feng, Yao Manying, and Tu Haiyan [Note 40]
[Note 32] The largest shareholder indirectly holding shares of the Company
[Note 33] An entity having a significant influence on the largest shareholder indirectly holding shares of the
Company
[Note 34] A company controlled by the largest shareholder indirectly holding shares of the Company
[Note 35] A company holding non-controlling interests in the Company
[Note 36] A company controlled by the Actual Controller of Softbi Hong Kong Corporation Limited, a
shareholder of Softbi
[Note 37] A company of which Guo Tianyong is an independent director
[Note 38] A company of which Han Xinyi is a director
[Note 39] A foundation of which Fu Meiying is the chairman.
[Note 40] Directors, Supervisors, and Senior Management
5. Related party transactions
(1). Related party transactions for the purchase and sale of goods and provision and receipt of
services
Purchase of goods / receipt of services
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Amount in the previous
Related party Content Amount in the current period
period
Alibaba Cloud Purchase of goods and 35,976,749.11 39,883,577.84
receipt of services
Ant Cloud Financial [Note 41] Purchase of goods and -182,771.87 132,012.24
receipt of services
Rongdu Science & Technology Purchase of goods and 76,839.90 735,909.14
receipt of services
Databaker Technology Purchase of goods and 200,547.67 143,738.94
receipt of services
Ant Blockchain Purchase of goods 60,411.99
Cloud Financing Network Purchase of goods and 2,903,092.06 14,002,689.31
receipt of services
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2021 Annual Report
Alipay (China) Receipt of services 49,386.79
Jiangxi Lianjiaoyun Receipt of services 50,377.36
Hundsun Changyun Receipt of services 656.60
Baijin Technology Receipt of services 179,245.28
Daocloud Internet Purchase of goods 1,118,584.08 1,981,966.94
Xinghuan Information Receipt of services 94,339.62
Hangzhou Utry Receipt of services 45,480.00
Alibaba (China) Receipt of services 611,877.93
Shanghai Dworld Receipt of services 1,122,907.14
Alibaba Cloud (Singapore) Receipt of services 227,559.86
Sub-total 41,132,710.35 58,282,467.58
[Note 41] The current period's amount incurred by Ant Cloud Financial is an adjustment to the prior
period's settlement amount
Sale of goods and provision of services
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Amount in the previous
Related party Content Amount in the current period
period
Software services and
Alipay (China) sales of outsourced 5,040,898.42 11,761,010.98
goods
Tianhong Asset Software services 20,946,411.80 15,945,543.19
E-Commerce Bank Software services 4,148,406.24 13,400,663.47
Bank of Qingdao Software services 20,324,537.53
Ant Fortune (Shanghai) Software services 7,573,967.78 7,387,735.86
Jiangxi Lianjiaoyun Software services 2,156,653.79 1,030,150.64
Cloud Financing Network Software services 282,352.53 66,237.43
Santan Technology Software services 1,178,108.04 1,366,904.59
ZhongAn Online Software services 1,860,505.27 936,489.49
Alibaba Cloud Software services 3,258,406.61 221,842.92
Golden State Investment Software services 3,981,614.06 1,622,951.41
Fujian Settlement Center [Note 42] Software services -35,575.23 5,883.44
Shenzhen Ricequant Software services 573,704.19 567,637.62
China Securities Credit Software services 352,915.26 342,944.82
Tianjin Financial Assets Exchange Software services 396,226.41 170,532.20
Ant Cloud Financial Software services 1,179,490.45 859,787.66
E-Capital Transfer Software services 1,127,358.49
Workplace and property
Hundsun Changyun 433,406.72
management fee etc.
Workplace and property
Hundsun Yuntai 163,880.17
management fee etc.
Workplace and property
Shenzhen Tradeblazer 94,339.62 61,645.86
management fee etc.
Workplace and property
Century Industry 68,389.86 64,239.16
management fee etc.
Ant Blockchain Software services 13,988,679.25 831,132.08
Ping An Bank Software services 9,779,663.21 15,110,238.81
Baijin Technology Software services 9,539.17 50,413.71
Taobao (China) Software Software services 308,018.80 1,359,845.12
Shanghai Dworld Software services 33,113.21
Ant Shangshu Software services 688,806.03 641,509.41
OceanBase Software services 283,018.87
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2021 Annual Report
Trust Mutual Life Software services 3,472,851.58
Hangzhou Utry Software services 64,655.17
Cathay Insurance Software services 264,498.08
Hundsun Yuntai Software services 18,259.28
Ant Lemaibao Software services 713,207.56
Sub-total 82,648,012.10 95,887,635.99
[Note 42] The current period's amount incurred by Fujian Settlement Center is an adjustment to the prior
period's settlement amount
Related party transactions for the purchase and sale of goods and provision and receipt of services
□Applicable √Not Applicable
(2). Related entrusted management/contracting and entrusting management/outsourcing
The Company's Entrusted management/contracting:
□Applicable √Not Applicable
Related entrusting/contracting
□Applicable √Not Applicable
The Company's entrusting management/outsourcing
□Applicable √Not Applicable
Related management/outsourcing
□Applicable √Not Applicable
(3). Related party leases
The Company as the lessor:
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Lease income recognized in the Lease income recognized in the
Name of lessee Type of asset leased
current period previous period
Santan Technology Buildings 1,559,633.03 1,559,633.03
Hundsun Electronics Charity Buildings 66,055.05 66,055.05
Foundation
The Company as the lessee:
□Applicable √Not Applicable
Related party leases
□Applicable √Not Applicable
(4). Related party guarantees
The Company as the guarantor
□Applicable √Not Applicable
The Company as the guarantee
□Applicable √Not Applicable
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Related party guarantees
□Applicable √Not Applicable
(5). Loans and borrowings from/to related parties
□Applicable √Not Applicable
(6). Asset transfer and debt restructuring of related parties
□Applicable √Not Applicable
(7). Remuneration of key management personnel
√Applicable □Not Applicable
Unit: 10,000 yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Remuneration of key management personnel 4,569.88 3,656.91
[Note 43] The remuneration of Senior Management in 2021 was RMB52 million, and the difference
between the annual bonus of Senior Management accrued in 2020 after adjustment and the actual amount
paid was RMB6,301,200.
(8). Other related party transactions
√Applicable □Not Applicable
According to the Proposal on Related Party Transactions of Increasing Capital and Share in Hundsun
iBontal adopted through deliberation at the 20th meeting of the Seventh Board held by the Company on
October 27, 2021, Hundsun iBontal proposed to apply for a capital increase of RMB22.5 million to be
contributed with cash and bank balances by Trust Mutual Life and Zhiming Hongde (Shanghai)
Technology Center (which is a related party of Trust Mutual Life and is still in the process of establishment,
and its specific name shall be subject to the final name registered for industry and commerce, hereinafter
referred to as Zhiming Hongde). Upon the completion of the capital increase, Trust Mutual Life and
Zhiming Hongde proposed to hold about 15.00% of the shares of Hundsun iBontal, the Company and other
original shareholders waived the right to make a capital increase in the same proportion. As of December
31, 2021, Hundsun iBontal had not yet received payments for capital increase and completed the business
procedures.
6. Receivables and payables of related parties
(1). Receivables
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Related party Allowance for Allowance
Book balance Book balance
bad debts for bad debts
Accounts receivable Bank of Qingdao 6,342,907.00 362,406.74
Accounts receivable Ant Fortune (Shanghai) 465,406.00 23,270.30 497,280.00 24,864.00
Accounts receivable Santan Technology 536,587.87 72,088.13 842,661.08 44,549.10
Accounts receivable Jiangxi Lianjiaoyun 230,404.73 11,520.24 230,404.73 11,520.24
Accounts receivable Cloud Financing Network 291,121.64 87,056.08 295,459.96 29,347.55
Accounts receivable Tianjin Financial Assets Exchange 715,000.00 118,393.56 715,000.00 47,473.39
Accounts receivable Ant Fund 246,726.11 246,726.11 246,726.11 246,726.11
216 / 243
2021 Annual Report
Closing balance Opening balance
Item Related party Allowance for Allowance
Book balance Book balance
bad debts for bad debts
Accounts receivable Fujian Settlement Center 60,000.00 3,000.00
Accounts receivable Alibaba Cloud 2,068,205.91 103,410.30
Accounts receivable Alipay (China) 3,206,936.84 340,601.84 1,983,319.73 306,216.73
Accounts receivable E-Commerce Bank 906,955.00 45,347.75
Accounts receivable Ant Blockchain 6,159,800.00 307,990.00 440,500.00 22,025.00
Accounts receivable Tianhong Asset 1,928,184.07 370,579.20 2,590,132.00 340,676.60
Accounts receivable E-Capital Transfer 1,352,000.00 1,352,000.00 1,352,000.00 1,310,000.00
Accounts receivable Ping An Bank 3,688,522.22 244,570.40 2,903,010.63 201,394.78
Accounts receivable Ant Shangshu 400,134.41 20,006.72 272,000.00 13,600.00
Accounts receivable OceanBase 50,000.00 2,500.00
Accounts receivable Trust Mutual Life 67,612.18 3,380.61
Accounts receivable ZhongAn Online 385,411.90 19,270.60
Accounts receivable Ant Lemaibao 192,000.00 9,600.00
Prepayments Alibaba Cloud 298,022.08 573,371.82
Prepayments Ant Cloud Financial 12,679.84 840.13
Prepayments Alibaba (China) 366,172.31
Other receivables Bank of Qingdao 78,000.00 45,800.00
Other receivables Ant Fund 112,950.80 112,950.80 112,950.80 112,950.80
Other receivables Ant Cloud Financial 50.00 5.00 50.00 2.50
Other receivables Alibaba Cloud 353,669.73 19,583.49 21,320.93 3,466.05
Other receivables Alipay (China) 2.75 0.14
Other receivables Baijin Technology 50,000.00 5,000.00 50,000.00 2,500.00
Other receivables Hongtian Rongda 25,000.00 1,250.00
Hundsun Electronics Charity
Other receivables 2,200,000.00 110,000.00
Foundation
Other receivables Alibaba (China) 428,481.48 21,424.07
Contract assets Bank of Qingdao 1,471,980.00 83,974.00
Contract assets Ping An Bank 145,000.00 14,500.00 960,600.00 48,030.00
Contract assets Tianjin Financial Assets Exchange 42,000.00 2,100.00
Contract assets Alibaba Cloud 270,000.00 13,500.00
Contract assets E-Commerce Bank 259,840.00 12,992.00
Sub-total 24,322,922.87 3,535,019.59 25,172,469.92 3,417,121.34
(2). Payables
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Related party Closing book balance Opening book balance
Accounts payable Alibaba Cloud 5,776,721.11 1,364,472.56
Accounts payable Cloud Financing Network 1,332,364.33 1,427,949.22
Accounts payable Ant Cloud Financial 53,445.93 1,914,681.78
Rongdu Science & 76,839.90 452,639.90
Accounts payable
Technology
Accounts payable Xinghuan Information 76,000.00 254,632.48
Accounts payable E-Capital Transfer 154,734.01 154,734.01
Accounts payable Databaker Technology 153,385.00 173,725.00
Accounts payable Daocloud Internet 2,449,552.94 2,761,276.94
Accounts payable Ant Blockchain 60,411.99
Accounts payable Shanghai Dworld 933,000.00
Contract liabilities Alipay (China) 275,254.87
Contract liabilities Tianhong Asset 11,959,504.82 8,054,272.00
217 / 243
2021 Annual Report
Item Related party Closing book balance Opening book balance
Contract liabilities Golden State Investment 326,316.66 2,980,948.56
Contract liabilities ZhongAn Online 842,827.53
Contract liabilities Ant Cloud Financial 477,758.32
Contract liabilities E-Capital Transfer 3,233,977.13 1,448,277.12
Contract liabilities China Securities Credit 148,918.38 158,498.64
Contract liabilities Shenzhen Ricequant 307,585.39 320,766.53
Contract liabilities Hundsun Changyun 181,834.71
Contract liabilities E-Commerce Bank 2,344,241.29
Contract liabilities Cloud Financing Network 272,752.07
Contract liabilities Santan Technology 69,302.13 68,642.60
Tianjin Financial Assets 1,862,070.28 2,111,646.50
Contract liabilities
Exchange
Contract liabilities Ant Blockchain 1,113,189.60 4,099,672.67
Contract liabilities Fujian Settlement Center 9,000.82
Contract liabilities Jiangxi Lianjiaoyun 1,387.59 1,309.05
Contract liabilities Ping An Bank 2,311,314.79 363,667.63
Contract liabilities Baijin Technology 64,111.52
Contract liabilities Taobao (China) Software 23,584.91 51,500.00
Contract liabilities Ant Rongxin 304,245.28 608,490.56
Contract liabilities Wanming Technology 38,339.06 41,646.58
Contract liabilities Bank of Qingdao 2,516,264.65
Contract liabilities Alibaba Cloud 1,976,625.33
Contract liabilities Hundsun Yuntai 138,751.74
Contract liabilities Shanghai Yitong 1,835.82
Contract liabilities Trust Mutual Life 281,071.25
Contract liabilities Alipay (China) 275,254.87
Other payables Alibaba Cloud 49,235.99 300,000.00
Other payables Softbi 2,200,000.00
Sub-total 34,555,966.23 39,230,496.11
7. Commitments by related parties
□Applicable √Not Applicable
8. Others
□Applicable √Not Applicable
XIII. SHARE-BASED PAYMENT
1. Share-based payment
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Ownership Scheme for Key Employees 2020 Employee Stock Ownership
Subscribing Shares of Innovative Business Scheme
Subsidiaries
Total number of various equity
instruments of the Company granted 12,587,301 7,979,300
in the current period
Total number of various equity
instruments of the Company exercised 2,348,260
in the current period
Total number of various equity
4,594,545
instruments of the Company lapsed in
218 / 243
2021 Annual Report
the current period
The exercise price of Yunhan Share Option
is the cost plus the annualized interest rate,
which shall be exercised in three to four
years from the date of grant. The exercise
price of Shanghai Gildata's Share Option is
Scope of the exercise price of the
RMB1.95 on the initial warrant, RMB 2.73
outstanding share options of the
on the first to third warrants and RMB
Company with the remaining term of
4.905 on the fifth and sixth warrants,
the contract at the end of the period
which shall be exercised in three years
from the date of grant. The exercise price
of Softbi's Share Option is RMB2.65 on
the initial warrant, which shall be exercised
in three years from the date of grant..
The exercise price of Yunhan stock
The grant price is RMB45.32 per share,
appreciation rights (SAR) is RMB1 per
which will be unlocked 12 months, 24
Scope of exercise Price of other share, which shall be exercised in three to
months and 36 months from the date
outstanding equity instruments of the five years from the grant date right. The
when the last underlying shares are
Company and remaining term of the exercise price of Shanghai Gildata's initial
transferred to the Employee Stock
contract at the end of the period SARs is RMB1.95, and that of other SARs
Ownership Scheme as announced by the
is RMB2.73, which shall be exercised in
Company.
three years from the grant date.
Other Description
(1) Ownership Scheme for Key Employees Subscribing Shares of Innovative Business Subsidiaries
According to the Investment and Management Measures of Hundsun's Key Employees Subscribing
Shares of Innovative Business Subsidiaries adopted through deliberation at the 10th meeting of the Fifth
Board held by the Company on January 27, 2014, the Company determined to jointly establish a "limited
partnership" enterprise by the Company and its authorized representatives to manage and exercise the
shares of the innovative business subsidiaries. The different "partnership enterprises" are required to be set
up by "key employees" of different innovation business subsidiaries (full-time key employees responsible
for the management, technology, and business in innovation subsidiaries) for making unified investments in
subsidiaries, while a unified "partnership enterprise" is required to be set up by the "Key Management" of
the Company (including the senior management team and other key persons working at the headquarters of
the Company) for making unified investments in innovative business subsidiaries. According to the
Proposal on Revising the Investment and Management Measures above adopted through deliberation at the
13th and 21st meetings of the Fifth Board held by the Company on July 17, 2014 and February 12, 2015,
respectively, the Company determined that there are three types of employee stock ownership schemes,
namely share subscription in cash by employees (contribution by employees to establish partnership
enterprises), investment share option and SAR.
According to the resolution of the 13th meeting of the Fifth Board held by the Company on July 17,
2014, the Company and its "Key Management" and "key employees of subsidiaries" jointly invested in the
establishment of Yunhan, Yunxia, Yunyin, Yunjin, Yunqin, Yunming, Yuntang, Yunwei, Yunshu, Yunwu
and Yunsong. According to the Resolution on the Establishment of Eight New Employee Stock Ownership
Platforms (Hundsun Executive Committee 2016 No. 011) issued by the Company's Executive Committee
of Stock Ownership Plan Management in August 2016, the Company and Hangzhou Yunhui, a
wholly-owned subsidiary, established Yunchu, Yunliao, Yunqi, Yuncao, Yunhan, Yunzhou, Yunliang and
Yunzheng. According to the resolution of the 12th meeting of the Sixth Board on April 25, 2017, the
Company and Hangzhou Yunhui, a wholly-owned subsidiary, established Shanyi, Shandu, Shangui,
219 / 243
2021 Annual Report
Shanying (formerly known as Shanyu), Shanzhao, Shanlu, Shanyu, Shanlun and Shanru (as of December
31, 2021, Shanyi, Shandu and Shanru had not completed the registration procedures for industrial and
commercial establishment). According to the resolutions of the 5th, 15th and 18th meetings of the Sixth
Board, the Company and Hangzhou Yunhui, a wholly-owned subsidiary, established Yunyue, Shanzhi and
Shanjing. With the advancement of the Employee Stock Ownership Scheme, the shares held by the
Company in the above employee stock ownership platforms had been transferred to relevant employees
gradually.
(2) 2020 Employee Stock Ownership Scheme
According to the Proposal on Hundsun's 2020 Employee Stock Ownership Scheme (Draft) and its
Summary and the Proposal on Hundsun's Management Measures for 2020 Employee Stock Ownership
Scheme adopted through deliberation at the Company's 15th board meeting of the Fifth Board held on
December 8, 2020 and the third extraordinary general meeting of 2020 held on December 25, 2020,
Company the Company proposed to repurchase some shares of the public with its own funds through call
auction trading for its Employee Stock Ownership Scheme. As of June 30, 2021, the Company had
transferred 7,979,300 shares to its account under the 2020 Employee Stock Ownership Scheme through
non-trade transfer at a price of RMB45.32 per share. At this point, the Company completed the non-trade
transfer of all shares under the 2020 Employee Stock Ownership Scheme. According to the provisions of
the 2020 Employee Stock Ownership Scheme (Draft) of Hundsun Technologies Inc., the underlying shares
acquired under this Scheme were unlocked in three phases, namely 12 months, 24 months and 36 months
from the date when the Company announces the transfer of the last underlying shares to this Scheme. The
proportion of underlying shares unlocked in each phase was 40%, 30% and 30%, respectively
Under the 2020 Employee Stock Ownership Scheme, the Company will conduct individual
performance appraisal based on its own performance appraisal system from 2021 to 2023, and determine
the final number of underlying shares to be unlocked for the shareholder based on the results of individual
performance appraisal as follows.
Appraisal results A B C D
Individual unlocking
100% 100% 50% 0%
factor
The actual number of shares for individuals are unlocked based on the appraisal results of the previous
year. Based on the shareholder's individual appraisal results, the actual number of shares to be unlocked in
the current period = the number of shares granted for the current period × individual unlocking factor. The
underlying shares corresponding to the actual number of shares to be unlocked in the current period shall be
sold collectively by the Management Committee in a proper manner at its discretion after the expiration of
the lock-up period, and the remaining earnings from the sale of shares net of relevant taxes and fees shall
be distributed to the shareholders in accordance with the provisions of the Scheme.
If the individual appraisal result in the first or second year is Grade C, the shareholder's shares to be
unlocked in the current period will be deferred to the next year accordingly, and will be unlocked in the
next year when the individual appraisal result reaches Grade B or above in corresponding proportion. If the
individual appraisal result in the next year is still Grade C, the shareholder's shares that cannot be unlocked
will be recovered by the Management Committee of the Employee Stock Ownership Scheme in accordance
with appropriate provisions. If the individual appraisal result in the third year is Grade C, the shareholder's
220 / 243
2021 Annual Report
share that cannot be unlocked in the current period shall be recovered by the Management Committee of
the Employee Stock Ownership Scheme in accordance with appropriate provisions. If the individual
appraisal result is Grade D, the shareholder's share that cannot be unlocked in the current period shall be
recovered by the Management Committee of the Employee Stock Ownership Scheme in accordance with
appropriate provisions. The Management Committee has the right to recover the unlocked interests and
shares under the Scheme at a price determined by the original contribution amount or the net value
(whichever is lower) of the underlying shares to which the shares correspond.
2. Equity-settled share-based payment
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Ownership Scheme for Key Employees
2020 Employee Stock Ownership
Item Subscribing Shares of Innovative Business
Scheme
Subsidiaries
Recognition method for the fair value When there are external investors at the time
of equity instruments on the grant date of grant, the investment price shall be
Share price on the grant date
adopted, and the fair price is calculated when
there are no external investors
Basis for determining the number of Based on the limit of warrants granted, the Based on the number of shares
exercisable equity instruments Company comprehensively considers the granted, the number of exercisable
number of employees with vesting equity instruments is determined by
conditions on each balance sheet date, its taking into account the changes in the
performance appraisal indicators and the number of employees with vesting
individual performance appraisal results of conditions on each balance sheet date
each grantee in each year with vesting and the individual performance
conditions appraisal results in each year with
vesting conditions
Reasons for significant differences
between current estimates and previous
estimates
Aggregate amount of equity-settled
share-based payment charged to the 76,101,204.54 106,488,455.61
capital reserve
Total expenses recognized by
equity-settled share-based payment in 3,466,693.01 109,124,906.80
the current period
3. Cash-settled share-based payment
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Recognition method for the fair value of liabilities assumed by Appraisal price
the enterprise and calculated and recognized based on shares or
other equity instruments
Aggregate liabilities arising from cash-settled share-based
29,104,152.44
payments in liabilities
Total expenses recognized for cash-settled share-based
7,761,880.45
payments in the current period
Gain from changes in the fair value recognized for cash-settled
4,120,593.87
share-based payment liabilities
Amount of options exercised during the period 7,445,515.12
Other Description
(1) According to the relevant provisions of the Accounting Standard for Business Enterprises No. 22 -
Recognition and Measurement of Financial Instruments regarding the recognition of fair value, the
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2021 Annual Report
Company will measure the fair value of share appreciation rights granted under the share incentive scheme
at the appraisal price on each balance sheet date.
(2) The Company's ASRs are exercised in the form of installment cash dividends and repurchases.
When the ASRs are exercised in the form of cash dividends, the probability of dividends is estimated to be
20% based on the future cash inflow of each shareholding platform in the recognition of the fair value of
the liabilities for the Yunhan ASRs.
4. Modification and termination of share-based payment
□Applicable √Not Applicable
5. Others
□Applicable √Not Applicable
XIV.COMMITMENT AND CONTINGENCIES
1. Significant commitments
√Applicable □Not Applicable
Significant external commitments on the balance sheet date and their nature and amount
(1) The Company participated as a limited partner in the investment in Suzhou Fangguang Phase III
Venture Capital Partnership (L.P) (hereinafter referred to as Fangguang Phase III Fund) during the period
and proposed to invest RMB30 million to acquire the capital contribution of RMB30 million (including a
paid-in capital contribution of RMB1 million) transferred by the original partner of Fangguang Phase III
Fund. Fangguang Phase III Fund completed the procedures for industrial and commercial registration of
changes on December 17, 2020. As of December 31, 2021, the Company had paid RMB22.5 million for the
investment.
(2) The Company participated as a limited partner of Costone in the investment in Nanjing Pengxi
Equity Investment Center (L.P.) (hereinafter referred to as Nanjing Pengxi) and proposed to invest
RMB200 million under the partnership contract. Nanjing Pengxi completed the procedures for industrial
and commercial registration of changes on December 24, 2020. As of December 31, 2021, the Company
had paid RMB120 million for the investment.
(3) According to the Summit Agreement entered into between Cloudwing Network and Finastra
International Limited (hereinafter referred to as Finastra) in November 2021, Cloudwing Network proposed
to invest USD65 million to acquire the Summit software-related business owned by Finastra. As of
December 31, 2021, the Company had not yet completed the settlement procedures with Finastra and paid a
cumulative amount of USD19.0 million for the acquisition, which is equivalent to RMB112,816,169.61
presented in other non-current assets.
2. Contingencies
(1). Important contingencies on the balance sheet date
√Applicable □Not Applicable
(1) According to the resolution of the 21st meeting of the Sixth Board held by the Company on July 11,
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2021 Annual Report
2018, the Company dismissed Liao Zhangyong, its former Senior Vice President, and Shen Zhiwei, its
former Vice President, and terminated the labor relations with Xu Binshan, its employee, on July 16, 2018.
According to the Notice of Delisting and Employee Stock Ownership Scheme issued by the Company and
the employee stock ownership platforms in August 2018, the Company decided to delist the above three
persons from the employee stock ownership platforms repurchased their property shares in the employee
stock ownership platforms at a net asset price, and charged the payment of RMB7,148,090.87 for
repurchasing the above property shares to other payables. The Company completed the procedures for
industrial and commercial registration of changes for the repurchase in September 2018, and the
outstanding payment for repurchase was RMB7,099,878.87 as of December 31, 2021.
Liao Zhang Yong applied for labor arbitration with Hangzhou Labor and Personnel Dispute
Arbitration Commission on August 5, 2019, requiring the Company to pay compensation for the illegal
termination of the labor contract and wage arrears in the amount of RMB1,718,100. Hangzhou Labor and
Personnel Dispute Arbitration Commission issued a notice on February 15, 2022 (ZHLRZA [2019] No.
407) rejecting all of Liao Zhang Yong's arbitration claims. As of the approval date of the financial
statements, the case has not yet been finalized.
(2) As of December 31, 2021, the balance of the Company's outstanding guarantee was
RMB16,153,155.00.
(2). A situation statement shall be made in case of no significant contingencies to be disclosed:
□Applicable √Not Applicable
3. Others
□Applicable √Not Applicable
XV. EVENTS AFTER THE BALANCE SHEET DATE
1. Important non-adjusting events
□Applicable √Not Applicable
2. Profit distribution
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Profit or dividend to be distributed
Profit or dividend declared after approval through According to the Profit Distribution Plan for 2020 adopted at the 23rd
deliberation meeting of the Seventh Board held by the Company on March 29, 2022,
the Company proposed to distribute a cash dividend of RMB1.00
(including tax) for every 10 shares and 3 bonus shares for every 10
shares to all shareholders based on 1,461,144,040 shares, being
1,461,560,480 shares outstanding less 416,440 shares in the special
repurchase account of the Company.
3. Sales return
□Applicable √Not Applicable
4. Notes on other events after the balance sheet date
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2021 Annual Report
√Applicable □Not Applicable
(1) According to the Proposal to Repurchase the Company's Shares in Call Auction Trading adopted
through deliberation at the 22nd meeting of the Board held by the Company on February 14, 2022, the
Company proposed to repurchase some shares of the public with its own funds through call auction trading
for its Share Incentive Scheme or Employee Stock Ownership Scheme. The total amount of funds to be
used in the repurchase of shares shall not be less than RMB100 million and not more than RMB 150
million, and the price of each share repurchased shall not exceed RMB80. As of the approval date of the
financial statements, the Company has not yet made any actual repurchases.
(2) As of the approval date of the financial statements, the Company and its subsidiaries have not yet
completed the final settlement and payment of income taxes for 2021.
XVI. OTHER SIGNIFICANT EVENTS
1. Correction of accounting errors in the previous period
(1). Retrospective restatement
□Applicable √Not Applicable
(2). Prospective application
□Applicable √Not Applicable
2. Debt restructuring
□Applicable √Not Applicable
3. Asset replacement
(1). Exchange of non-monetary assets
□Applicable √Not Applicable
(2). Exchange of other assets
□Applicable √Not Applicable
4. Annuity plan
□Applicable √Not Applicable
5. Discontinued operations
□Applicable √Not Applicable
6. Segment information
(1). Basis for determining reporting segments and accounting policies
√Applicable □Not Applicable
The Company determines the reporting segment based on its internal organizational structure,
management requirements and internal reporting system and takes the industry segment as the basis to
determine the reporting segment. The operating performance of software business, commercial business,
real estate business and commercial service business shall be assessed respectively. Assets and liabilities
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2021 Annual Report
commonly used in all segments are distributed among different segments according to the scale.
The Company determines the reporting segments based on the regional segments. The revenue from
and cost of principal businesses are divided by the place where the sales are finally realized, and the assets
and liabilities are divided by the place where the operating entity is located.
(2). Financial information of reportable segments
√Applicable □Not Applicable
1) Regional division Unit: Yuan Currency: RMB
Item Mainland China Overseas Inter-segment offset Total
Revenue from principal 5,268,862,680.55 223,149,586.89 5,492,012,267.44
businesses
Cost of principal businesses 1,440,685,304.55 43,388,736.72 1,484,074,041.27
Total assets 11,203,978,995.12 875,929,317.64 12,079,908,312.76
Total liabilities 5,693,108,501.99 171,478,682.31 5,864,587,184.30
2) Industry segment Unit: Yuan Currency: RMB
Investment Inter-segment
Item Software Real estate Total
management offset
Revenue
from
5,474,803,619.44 17,208,648.00 5,492,012,267.44
principal
businesses
Cost of
principal 1,480,714,651.88 3,359,389.39 1,484,074,041.27
businesses
Total assets 10,798,192,903.15 564,932,856.24 716,782,553.37 12,079,908,312.76
Total
5,497,124,437.98 324,822,701.13 42,640,045.19 5,864,587,184.30
liabilities
(3). Explanation shall be given if the Company has no reportable segments or cannot disclose total
assets and total liabilities of reportable segments
□Applicable √Not Applicable
(4). Other Description
□Applicable √Not Applicable
7. Other significant transactions and events affecting investors' decisions
√Applicable □Not Applicable
According to the relevant provisions of the Provisional Regulations of the People’s Republic of China
on Land Appreciation Tax, the land appreciation tax shall be paid at four-level progressive rates, i.e., the
tax rate is 30% when the appreciation volume is less than 50% of the amount deducted; the tax rate is 40%
when the appreciation volume is more than 50% and less than 100% of the amount deducted; the tax rate is
50% when the appreciation volume is more than 100% and less than 200% of the amount deducted; the tax
rate is 60% when the appreciation volume is more than 200% of the amount deducted. The sale of ordinary
standard residential buildings with an appreciation volume not exceeding 20% of the amount deducted is
exempt from the land appreciation tax.
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2021 Annual Report
In addition to paying the land appreciation tax calculated at a withholding rate prescribed by the local
tax bureau, Hundsun Science Park, a subsidiary of the Company, accrued real estate development projects
that have met the relevant prescribed liquidation conditions but have not yet been liquidated, as well as real
estate development projects for which sales revenue has been recognized but have not met the relevant
prescribed liquidation conditions, based on the difference between the land appreciation tax payable and
that actually paid. As of December 31, 2021, the accumulated difference of land appreciation tax accrued
by Hundsun Science Park was RMB305,258,151.46.
8. Others
√Applicable □Not Applicable
Leases
(1) The Company as the leasee
1) Information related to the right-to-use assets is detailed in Note VII (25) to the financial statements;
2) The Company's accounting policies for short-term leases and leases of low-value assets are detailed
in Note V (42) to the financial statements. The amount of expenses for short-term leases and low-value
asset leases charged to the current profit or loss is as follows:
During the period During the
Item corresponding period
last year
Expenses for short-term leases and low-value asset leases 35,696,783.16 28,741,017.65
Total 35,696,783.16 28,741,017.65
3) Current profit or loss and cash flow related to leases
During the period During the
Item corresponding period
last year
Interest expenses on lease liabilities 637,194.89 161,810.25
Variable lease payments not charged to the measurement of lease liabilities but to
the current profit and loss
Income from subletting the right-to-use assets
Total cash outflows related to leases 47,182,565.08 30,237,429.55
Profit and loss related to leaseback transactions
4) The maturity analysis of lease liabilities and the corresponding liquidity risk management are
detailed in Note X (2) to the financial statements.
(2) The Company as the leaser
1) Operating lease
① Lease income
During the period During the
Item corresponding period
last year
Lease income 3,349,682.46 3,284,777.58
Including: Income that is related to variable lease payments and not charged to
lease receipts
② Operating lease assets
Closing balance Closing balance of the
Item
previous year
Investment properties 127,524,968.93 111,411,248.79
Sub-total 127,524,968.93 111,411,248.79
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2021 Annual Report
XVII. NOTES TO MAIN ITEMS IN THE PARENT COMPANY'S FINANCIAL STATEMENTS
1. Accounts receivable
(1). Disclosure by aging
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Aging Closing book balance
Within 1 year
Including: Sub-items within 1 year
Sub-total within 1 year 451,541,768.25
1-2 years 113,030,463.48
2-3 years 39,611,637.04
Over 3 years 101,053,740.28
Total 705,237,609.05
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2021 Annual Report
(2). Disclosure by category by means of allowance for bad debts
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Book balance Allowance for bad debts Book balance Allowance for bad debts
Class Carrying Carrying
Proportion Proportion value Proportion Proportion value
Amount Amount Amount Amount
(%) (%) (%) (%)
Allowance for bad
debts made on an 39,136,044.00 5.55 39,136,044.00 100.00 55,969,423.14 9.76 55,969,423.14 100.00
individual basis
Including:
Allowance for bad
debts made on a 666,101,565.05 94.45 108,385,566.35 16.27 557,715,998.70 517,475,143.99 90.24 90,143,603.56 17.42 427,331,540.43
collective basis
Including:
Aging portfolio 645,337,176.00 91.51 108,385,566.35 16.80 536,951,609.65 493,150,603.93 86.00 90,143,603.56 18.28 403,007,000.37
Grouped by
related party
transactions in the 20,764,389.05 2.94 20,764,389.05 24,324,540.06 4.24 24,324,540.06
consolidation
scope
Total 705,237,609.05 / 147,521,610.35 / 557,715,998.70 573,444,567.13 / 146,113,026.70 / 427,331,540.43
Provision for bad debts is accrued on an individual basis:
√Applicable □Not Applicable
Unit: RMB Currency: RMB
Closing balance
Name
Book balance Allowance for bad debts Provision (%) Reasons
Amount of other software services 39,136,044.00 39,136,044.00 100.00 Expected difficulty in collection
Total 39,136,044.00 39,136,044.00 100.00 /
Allowance for bad debts made on an individual basis:
□Applicable √Not Applicable
228 / 243
2021 Annual Report
Allowance for bad debts made on a collective basis:
√Applicable □Not Applicable
Item for which allowance was made on a collective basis: grouped by aging
Unit: Yuan Currency: RMB
Closing balance
Name
Accounts receivable Allowance for bad debts Provision (%)
Within 1 year 431,192,822.33 21,559,641.12 5.00
1-2 years 111,612,920.35 11,161,292.04 10.00
2-3 years 38,381,143.04 11,514,342.91 30.00
Over 3 years 64,150,290.28 64,150,290.28 100.00
Total 645,337,176.00 108,385,566.35 16.80
Item for which allowance was made on a collective basis: Grouped by related party transactions in the
consolidation scope
Allowance for bad
Item Book balance Reasons
debts
Shanghai Genus 16,879,363.15 No impairment found by individual test
Shanghai Gildata 1,295,429.66 No impairment found by individual test
Jingteng Network 1,270,848.41 No impairment found by individual test
Yunyong Network 685,242.50 No impairment found by individual test
Hundsun HK 392,500.49 No impairment found by individual test
Japan Hundsun 136,983.87 No impairment found by individual test
Hundsun Ayers 71,364.71 No impairment found by individual test
Cloudbroker Network 17,722.08 No impairment found by individual test
Hundsun Science Park 13,100.00 No impairment found by individual test
Cloudyee Network 1,834.18 No impairment found by individual test
Sub-total 20,764,389.05
Recognition criteria and description of allowance for bad debts made on a collective basis:
√Applicable □Not Applicable
Item Grouping basis Expected credit loss calculation method
A table of aging of accounts receivable and lifetime
expected credit loss rates is prepared, and the
expected credit loss is calculated, with reference to
Accounts receivable - grouped by aging Aging
historical credit loss experience, in consideration of
current conditions and expectations of future
economic conditions.
The expected credit loss is calculated, with
reference to historical credit loss experience, in
Accounts receivable - grouped by related
consideration of current conditions and expectation
party transactions in the consolidation Nature
of future economic conditions, and based on the
scope
default risk exposure and lifetime expected credit
loss rate.
If bad debt reserves are accrued according to the general model of expected credit losses, please refer to
other receivables for disclosure:
□Applicable √Not Applicable
(3). Allowance for bad debts
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2021 Annual Report
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Change during the current period
Opening
Class Recovered Write-off or Other Closing balance
balance Provision
or reversed cancellation changes
Allowance for bad
debts made on an 55,969,423.14 2,863,260.94 19,696,640.08 39,136,044.00
individual basis
Allowance for bad
debts made on a 90,143,603.56 18,241,962.79 108,385,566.35
collective basis
Total 146,113,026.70 21,105,223.73 19,696,640.08 147,521,610.35
The significant amount of provision reversal and recovery of bad debts in the current period:
□Applicable √Not Applicable
(4). Actual accounts receivable written off in the current period
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Write-off
Actual accounts receivable written off 19,696,640.08
Write-off of significant account receivables
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Nature of
Reason for Write-off procedures From related party
Item accounts Write-off
write-off adopted transactions or not
receivable
HOMS software sales Software sales 19,696,640.08 Expected Management N
receivable receivable unrecoverable approval
Total / 19,696,640.08 / / /
Notes on write-off of accounts receivable:
□Applicable √Not Applicable
(5). Top five account receivables according to closing balances grouped by the debtor
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Proportion in the total closing
Closing balance of allowance
Item Closing balance balance of accounts receivable
for bad debts
(%)
Customer 1 16,879,363.15 2.39
Customer 2 15,137,006.14 2.15 1,133,794.55
Customer 3 14,440,000.00 2.05 722,000.00
Customer 4 12,537,000.00 1.78 784,450.00
Customer 5 11,229,300.00 1.59 1,715,299.36
Total 70,222,669.29 9.96 4,355,543.91
230 / 243
2021 Annual Report
(6). Accounts receivable derecognized due to the transfer of financial assets
□Applicable √Not Applicable
(7). Amount of assets or liabilities due to the transfer of accounts receivable and continuing
involvement
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
2. Other receivables
Item
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Interest receivable
Dividend receivables
Other receivables 66,212,431.56 43,769,249.04
Total 66,212,431.56 43,769,249.04
Other notes:
□Applicable √Not Applicable
Interest receivable
(1). Classification of interest receivable
□Applicable √Not Applicable
(2). Significant overdue interest
□Applicable √Not Applicable
(3). Allowance for bad debts
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
Dividend receivables
(4). Dividend receivables
□Applicable √Not Applicable
(5). Significant dividends receivable with the aging over 1 year
□Applicable √Not Applicable
(6). Allowance for bad debts
□Applicable √Not Applicable
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2021 Annual Report
Other notes:
□Applicable √Not Applicable
Other receivables
(1) Disclosure by aging
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Aging Closing book balance
Within 1 year
Including: Sub-items within 1 year
Sub-total within 1 year 49,611,148.79
1-2 years 13,805,551.77
2-3 years 4,116,883.34
Over 3 years 11,409,094.28
Total 78,942,678.18
(2). Classified by nature of accounts
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Nature Closing book balance Opening book balance
Deposits 24,757,254.20 18,738,342.14
Current payments 45,472,539.58 30,251,965.83
Imprest fund 8,584,754.80 8,565,300.79
Others 128,129.60
Total 78,942,678.18 57,555,608.76
(3). Provision for bad debts
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Stage 1 Stage 2 Stage 3
Allowance for bad debts Expected credit Total
Lifetime ECL (not Lifetime ECL
loss ("ECL") over
credit-impaired) (credit-impaired)
the next 12 months
Balance as of January 1, 2021 720,892.16 196,848.34 12,868,619.22 13,786,359.72
Balance as of January 1, 2021
during the period
- Transfer to stage 2 -143,232.16 143,232.16
- Transfer to stage 3 -151,096.44 151,096.44
- Reverse to stage 2
- Reverse to stage 1
Provision in the period 322,552.53 97,480.27 -1,525,245.90 -1,105,213.10
Reversal in the period -50,000.00 -50,000.00
Write-off in the period
Cancellation in the period 900.00 900.00
Other changes
Balance as of December 31,
900,212.53 286,464.33 11,543,569.76 12,730,246.62
2021
Notes on significant changes in the carrying amount of other receivables for which changes in the
allowance for losses occurred during the current period:
232 / 243
2021 Annual Report
□Applicable √Not Applicable
Amount of allowance for bad debts for the current period and basis for evaluating whether the credit risk of
financial instruments increases significantly:
√Applicable □Not Applicable
The expected credit loss is calculated, with reference to historical credit loss experience, in
consideration of current conditions and expectation of future economic conditions, and based on the default
risk exposure and 12-month or lifetime expected credit loss rate.
(4). Provision for bad debts
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Change during the current period
Opening
Class Recovered or Write-off or Closing balance
balance Provision Other changes
reversed cancellation
Allowance for bad
debts made on a 13,786,359.72 -1,105,213.10 -50,000.00 900.00 12,730,246.62
collective basis
Total 13,786,359.72 -1,105,213.10 -50,000.00 900.00 12,730,246.62
The significant transfers or reversals with allowance for bad debts during the current period:
□Applicable √Not Applicable
(5). Other receivables actually written off in the period
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Write-off
Other receivables actually written off 900.00
Write-off of significant other receivables:
□Applicable √Not Applicable
Notes on write-off of other receivables:
□Applicable √Not Applicable
(6). Top five other receivables according to closing balances grouped by the debtor
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Proportion in the
Allowance for bad
total closing
Item Nature Closing balance Aging debts
balance of other
Closing balance
receivables (%)
Customer 1 Current payments 25,471,606.05 Within 1 year 32.27
RMB507,676.41 within 1
Customer 2 Current payments 7,553,210.36 year; RMB7,045,533.95 for 9.57
1-2 years
RMB4,627,971.30 within 1
Customer 3 Current payments 5,174,895.12 6.56
year; RMB546,923.82 for
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2021 Annual Report
Proportion in the
Allowance for bad
total closing
Item Nature Closing balance Aging debts
balance of other
Closing balance
receivables (%)
2-3 years
Customer 4 Deposits 7,771,000.00 Over 3 years 9.84 7,771,000.00
RMB2,413,434.85 within
Customer 5 Current payments 2,848,870.95 1-2 years; RMB435,436.10 3.61
within 2-3 years
Total / 48,819,582.48 / 61.85 7,771,000.00
(7). Receivables involving government grants
□Applicable √Not Applicable
(8). Other receivables derecognized due to the transfer of financial assets
□Applicable √Not Applicable
(9). Amount of assets or liabilities due to the transfer of other receivables and continuing
involvement
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
3. Long-term equity investments
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Carrying value Book balance Carrying value
provision provision
Investment in
2,758,321,839.55 262,249,246.66 2,496,072,592.89 2,137,362,716.25 214,131,968.35 1,923,230,747.90
subsidiaries
Investment in
associates and 839,073,663.56 104,190,614.26 734,883,049.30 599,654,805.95 103,180,614.26 496,474,191.69
joint ventures
Total 3,597,395,503.11 366,439,860.92 3,230,955,642.19 2,737,017,522.20 317,312,582.61 2,419,704,939.59
(1). Investments in subsidiaries
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Provision for
Closing balance
Increase in the Decrease in the impairment
Investee Opening balance Closing balance of impairment
current period current period during the
provision
period
Cloud Investment 115,000,000.00 198,302.00 115,198,302.00
Wuxi Henghua 15,814,000.00 15,814,000.00
Data Security 10,383,589.00 10,383,589.00
Jinrui Software 30,180,000.00 20,221,551.20 50,401,551.20
Beijing Qiantang 9,400,000.00 2,971,794.80 12,371,794.80
234 / 243
2021 Annual Report
Shanghai Yirui 700,000.00 700,000.00
Japan Hundsun 2,960,123.04 2,960,123.04
Shanghai Liming 47,547,500.00 47,547,500.00 41,169,916.78 41,169,916.78
Shanghai Gildata 92,978,556.73 92,978,556.73
Hangzhou Yunhui 20,000,000.00 20,000,000.00
Cloudwing
12,000,000.00 300,000,000.00 312,000,000.00
Network
Securities
Investment 30,000,000.00 30,000,000.00 23,072,212.58
Network
Cloudyee Network 27,000,000.00 1,788,820.80 28,788,820.80
Yunyong Network 12,000,000.00 12,000,000.00
Cloudbroker
36,967,500.00 6,292,513.60 43,260,013.60
Network
Yunlian Network 12,600,000.00 12,600,000.00 6,947,361.53 6,947,361.53
Shanshang
12,600,000.00 12,600,000.00 10,560,441.13
Network
Wengine Network 8,750,000.00 8,750,000.00
Hangzhou Yima 10,000,000.00 88,894.00 10,088,894.00
Intercontinental
53,194,000.00 53,194,000.00
Holdings
Guangdong
300,000.00 300,000.00
Institute of Finance
Hangzhou Xinglu 150,000,000.00 87,974,610.49 62,025,389.51
Business
Intelligence 67,083,948.28 67,083,948.28
(Hangzhou)
Hundsun
International 853,678,200.00 853,678,200.00 164,489,250.55
Technologies
Hundsun Holdings 154,790,717.70 154,790,717.70
Shengtian Network 1,000,000.00 1,342,983.20 2,342,983.20
Zhigu Network 18,000,000.00 723,460.40 18,723,460.40 6,473,762.09
Jingteng Network 60,000,000.00 2,104,736.40 62,104,736.40
Wuxi Xinglu 65,729,296.20 50,670,000.00 15,059,296.20
IHS Markit 46,900,000.00 581,230.00 47,481,230.00
Hundsun Science
22,184,900.00 22,184,900.00
Park
Nanjing
132,000,000.00 48,000,000.00 180,000,000.00
Xingcheng
BusinessMatrix 76,639,502.00 2,917,041.95 79,556,543.95 9,536,302.00
Shanghai Genus 83,771,601.00 8,767,996.00 4,377,613.16 88,161,983.84
Xunchang Wendao 35,000,000.00 35,000,000.00
Hundsun iBontal 100,052,500.00 100,052,500.00
Hundsun Lirong 180,000,000.00 180,000,000.00
Shanghai Dworld 50,183,804.90 50,183,804.90
Nanjing Xingding 27,955,000.00 27,955,000.00
Total 2,137,362,716.25 943,981,346.95 323,022,223.65 2,758,321,839.55 48,117,278.31 262,249,246.66
235 / 243
2021 Annual Report
(2). Investments in associates and joint ventures
√Applicable □Not Applicable
Unit: 10,000 yuan Currency: RMB
Changes in the current period
Closing
Opening Investment Other Cash Closing balance of
Investor Other
balance Increase in Decrease in profit or loss comprehensive dividends and Impairment balance impairment
changes in Others
investment investment recognized by income profits provision provision
equity
equity method adjustments declared
I. Joint ventures
Sub-total
II. Associates
Ant (Hangzhou) Funds
13,547.81 12,079.21 23.64 25,650.66
Sales Co., Ltd.
Hangzhou Hundsun
Century Industry Co., 3,981.77 -427.61 3,554.16
Ltd.
Shenzhen Trade Blazer
4,867.77 485.58 896.64 4,456.71 4,132.51
Technology Co., Ltd.
Hangzhou Rongdu
Science & Technology 892.53 -194.51 698.02 1,647.27
Co., Ltd.
Zhejiang Santan
1,735.29 -582.80 1,152.49
Technology Co., Ltd.
Zhejiang Hundsun
Changyun Network 743.31 661.50 58.98 -140.79
Technology Co., Ltd.
Hangzhou Hundsun
Yuntai Network 3,288.42 3.70 -2,226.06 1,135.21 0.58 2,194.45
Technology Co., Ltd.
Guangdong Yuecai
460.86 10.44 471.30
Internet Finance Co., Ltd.
Beijing Hongtian Rongda
Information Technology 15.38 -15.38 235.09
Co., Ltd.
Golden State Investment 2,543.29 330.12 2,873.41
236 / 243
2021 Annual Report
Services Co., Ltd.
Shenzhen Ricequant
1,357.59 230.23 -128.90 1,458.92 3,255.59
Technology Co., Ltd.
Fujian Trading Market
Registration and
776.05 -42.69 733.36
Settlement Center Co.,
Ltd.
Hundsun Cloud Financing
Network Technology Co., 361.50 -673.47 1,253.53 941.56
Ltd.
Hangzhou Fupu Gongjin
Investment Partnership 2,332.02 410.62 2,742.64
(L.P.)
Hangzhou HISOME
Digital Equipment 2,455.68 594.40 3,050.08
Technology Co., Ltd.
Jiangxi Lianjiaoyun
Registration and
116.97 38.21 155.18
Settlement Center Co.,
Ltd.
Guangdong Yuecai Net
Small Loan Microfinance 2,178.81 16.79 2,195.60
Co., Ltd.
Shanghai Leanwork
Financial Information 742.15 -23.31 17.64 101 635.48 1,148.60
Service Co., Ltd.
Hangzhou Wanming
Digital Technology Co., 491.71 -3.66 488.05
Ltd.
Beijing Hezhi Xingtu
1,956.93 -121.92 1,835.01
Technology Co., Ltd.
Shanghai Dworld AI
42.23 5,000.00 5,100.00 -23.85 81.62
Tech Co., Ltd.
Hanzhou Eceyes Internet
2,421.89 132.07 19.29 2,573.25
Financial Co., Ltd.
Hangzhou National
Software Industry Base 270.99 -39.03 231.96
Co., Ltd.
Zhejiang Institute of
Modern Capital and 2.91 -0.02 2.89
Industry
237 / 243
2021 Annual Report
Beijing Tongchuang
Yongyi Technology 1,572.15 -205.14 17.01 1,384.02
Development Co., Ltd.
Shanghai Qianyun
Information Technology 491.40 -26.39 465.01
Co., Ltd.
Databaker (Beijing)
562.50 2.04 564.54
Technology Co., Ltd.
Shanghai Yitongtou
1,350.00 -40.30 1.43 1,311.13
Technology Co., Ltd.
Nanjing Pengxi Equity
12,000.00 -331.57 11,668.43
Investment Center (L.P.)
Sub-total 49,647.41 19,142.73 5,765.20 9,051.85 2,467.75 896.64 101.00 -58.59 73,488.31 10,419.06
Total 49,647.41 19,142.73 5,765.20 9,051.85 2,467.75 896.64 101.00 -58.59 73,488.31 10,419.06
Other notes:
238 / 243
2021 Annual Report
4. Revenue and cost of sales
(1). Revenue and cost of sales
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Amount in the current period Amount in the previous period
Item
Revenue Cost Revenue Cost
Principal businesses 4,519,733,092.73 1,280,745,652.91 3,466,445,741.88 804,119,886.50
Other businesses 20,680,988.09 447,250.64 13,278,818.68 262,023.49
Total 4,540,414,080.82 1,281,192,903.55 3,479,724,560.56 804,381,909.99
(2). Revenue from contracts
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Classification of contract Reporting segment Total
By type of product
Software 4,536,895,384.85 4,536,895,384.85
By operating regions
Mainland China 4,536,895,384.85 4,536,895,384.85
By time of transfer of goods
Revenue recognized at a certain time point 3,291,396,060.38 3,291,396,060.38
Revenue recognized within a certain period of 1,245,499,324.47 1,245,499,324.47
time
Total 4,536,895,384.85 4,536,895,384.85
[Note 44] Excluding lease income.
Breakdown of revenue from contracts:
□Applicable √Not Applicable
(3). Contract performance obligations
√Applicable □Not Applicable
The Company's revenue mainly comes from sales of self-made and customized software, software
services and outsourced goods. Sales of self-made and customized software and outsourced goods are
performance obligations to be performed at a certain time point, and the revenue shall be recognized when
the products are delivered to the customer and the customer obtains control of the products. Sales of
software services are performance obligations to be performed within a certain time period and the revenue
shall be recognized in accordance with the performance progress.
(4). Apportionment to remaining performance obligations
□Applicable √Not Applicable
Other notes:
The revenue recognized in the opening carrying value of contract liabilities during the current period was
RMB1,878,230,377.70.
239 / 243
2021 Annual Report
5. Investment income
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Income from long-term equity investments
60,497,500.00 105,463,000.00
calculated by the cost method
Income from long-term equity investments
90,518,351.65 10,437,512.44
calculated by the equity method
Investment income from the disposal of
20,732,708.91 6,394,004.09
long-term equity investments
Investment income from holding held-for-trading
56,045,308.23 80,343,339.95
financial assets
Investment income from disposal of
37,710,964.56 119,952,215.38
held-for-trading financial assets
Total 265,504,833.35 322,590,071.86
6. Others
√Applicable □Not Applicable
R&D expenses
Unit: Yuan Currency: RMB
Item Amount in the current period Amount in the previous period
Employee compensation 1,432,390,117.14 1,029,032,004.50
Share-based payment 48,176,369.19 1,216,497.17
Technology development costs 187,488,105.20 123,332,415.56
Communication expenses 54,732,886.58 42,893,154.15
Travel expenses 51,359,608.68 41,229,420.10
Depreciation and amortization 27,768,520.46 18,786,141.12
Vehicle expenses 4,249,187.86 3,411,206.56
Office expenses 4,522,430.16 2,144,858.76
Intermediary fees 657,361.05 699,412.77
Business expenses 297,150.23 101,875.71
Total 1,811,641,736.55 1,262,846,986.40
XVIII. SUPPLEMENTARY INFORMATION
1. Breakdown of current non-recurring profit or loss
√Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Amount .
Mainly represented the
investment income from the
transfer of shares of HundSun
Profit or loss from disposal of non-current assets 38,436,050.92
Chang Yun and the fair value
recognition of the remaining
shares of Dworld AI
Government grants charged to the current profit or loss
Mainly represented the
(other than those closely related to corporate business
57,355,855.21 government grants for special
and granted based on a fixed amount or a fixed quantity
projects
unified by the state)
Profit or loss from changes in the fair value generated Mainly represented the profit and
from the Company's held-for-trading and derivative loss from the changes in the fair
financial assets, and held-for-trading and derivative 489,548,525.78 value generated from the
financial liabilities, and investment income from the Company's held-for-trading
disposal of held-for-trading and derivative financial financial assets, and the
240 / 243
2021 Annual Report
Item Amount .
assets, held-for-trading and derivative financial investment income from the
liabilities, and other debt investments, except for disposal of the held-for-trading
effective hedging business related to the Company's financial assets
normal business
Other non-operating income and expenses other than -770,038.19
the above
Less: Effect on income tax 56,393,147.86
Effect on minority interests 11,207,988.27
Total 516,969,257.59
Reasons shall be given with respect to the Company classifying the non-recurring profit and loss items
defined and listed in the Explanatory Notice on Information Disclosure of Companies with Public Offering
No. 1-Non-recurring Profit and Loss as recurring profit and loss items.
□Applicable √Not Applicable
2. Return on net assets and earnings per share
√Applicable □Not Applicable
Weighted average ROE Earnings per share
Profit during the Reporting Period
(%) Basic EPS Diluted EPS
Net profit attributable to ordinary
30.11 1.01 1.01
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company net of 19.47 0.65 0.65
non-recurring profits and losses
3. Differences in accounting data between domestic and overseas accounting standards
□Applicable √Not Applicable
4. Others
√Applicable □Not Applicable
1. Calculation of weighted average ROE
Item S/N During the period
Net profit attributable to ordinary shareholders of the Company A 1,463,538,930.14
Non-recurring profit and loss B 516,969,257.59
Net profit attributable to shareholders of ordinary shares net of non-recurring profit or
C=A-B 946,569,672.55
loss
Opening net assets attributable to shareholders of ordinary shares of the Company D 4,553,732,993.32
Net assets attributable to shareholders of ordinary shares of the Company increased due
E
to offering of new shares or conversion of debts into shares
Number of months from the next month following the increase up to the end of the
F
reporting period
Net assets attributable to shareholders of ordinary shares of the Company decreased due
G 104,367,431.40
to share repurchase or reduced cash dividends
Number of months from the month following the decrease in net assets up to the end of
H 5
the reporting period
Other changes in owners' equity arising from associates other than net profit or
I1 18,417,249.85
loss and profit distribution
Number of months from the month following the increase or decrease in net
Other J1 6
assets up to the end of the reporting period
s
Others - Other changes held by Company’s shareholding platform in the
ownership interests of subsidiaries within the scope of the Company’s I2 1,416,643.83
consolidation for the period other than net profit or loss and profit distribution
241 / 243
2021 Annual Report
Item S/N During the period
Number of months from the month following the increase or decrease in net
J2 6
assets up to the end of the reporting period
Others- Other comprehensive income and other changes in owner's equity
related to the originally held equity before the purchase date transferred into I3 -2,565,362.09
investment income
Number of months from the month following the increase or decrease in net
J3 7
assets up to the end of the reporting period
Other-Changes in owner's equity arising from share-based payments I4 108,678,977.25
Number of months from the month following the increase or decrease in net
J4 5、6
assets up to the end of the reporting period
Other-Share repurchase under the Employee Stock Ownership Scheme I5 -682,524,351.40
Number of months from the month following the increase or decrease in net
J5 9、10、11
assets up to the end of the reporting period
Others-Contributions by employees under the Employee Stock Ownership
J6 361,621,876.00
Scheme
Number of months from the month following the increase or decrease in net
I6 5
assets up to the end of the reporting period
Others-Changes arising from changes in owners' equity shares of subsidiaries
J6 -11,498,903.95
but still controlling subsidiaries
Number of months from the month following the increase or decrease in net
I7 3、5、7
assets up to the end of the reporting period
Others-Changes in the fair value of other debt investments J7 -25,707.87
Number of months from the month following the increase or decrease in net
I8 6
assets up to the end of the reporting period
Including: Foreign currency translation difference in the statements I9 -11,393,862.64
Number of months from the month following the increase or decrease in net
J9 6
assets up to the end of the reporting period
Number of months during the Reporting Period K 12
L= D+A/2+
Weighted average net assets E×F/K-G×H / 4,861,181,855.45
K±I×J/K
Weighted average ROE M=A/L 30.11%
Weighted average ROE net of non-recurring profit and loss N=C/L 19.47%
2. Calculation of basic earnings per share and diluted earnings per share
(1) Calculation of basic earnings per share
Item S/N During the period
Net profit attributable to ordinary shareholders of the Company A 1,463,538,930.14
Non-recurring profit and loss B 516,969,257.59
Net profit attributable to shareholders of ordinary shares net of non-recurring profit or loss C=A-B 946,569,672.55
Total number of shares at the beginning of the period D 1,044,090,754.00
Number of shares increased due to the capitalization of capital reserves or the
E 417,469,725.60
distribution of shares and dividends
Number of shares increased due to new shares issuance or conversion of debt to capital F
Number of months from the month following the increase of shares to the end of
G
the Reporting Period
Decrease in the number of shares due to repurchase H 7,190,295.00
Number of months from the month following the increase in shares up to the end of the
I 9, 10, 11
Reporting Period
Decrease in the number of shares during the Reporting Period J
Number of months during the Reporting Period K 12
L=D+E+F ×G/
Weighted average number of outstanding ordinary shares 1,455,437,146.93
K-H×I / K-J
Basic EPS M=A/L 1.01
Basic earnings per share net of non-recurring profit and loss N=C/L 0.65
242 / 243
2021 Annual Report
(2) Calculation of diluted earnings per share
The calculation of diluted earnings per share is the same as that of basic earnings per share.
Chairman: Peng Zhenggang
Submission date for approval of the Board: March 29, 2022
Revision Information
□Applicable √Not Applicable
243 / 243
