SHENZHEN ZHONGHENG HUAFA CO. LTD.SHENZHEN ZHONGHENG HUAFA CO. LTD.April 2022
1SHENZHEN ZHONGHENG HUAFA CO. LTD.
Section I. Important Notice Contents and Interpretation
Board of Directors Supervisory Committee all directors supervisors and senior
executives of Shenzhen Zhongheng HUAFA Co. Ltd. (hereinafter referred to as
the Company) hereby confirm that there are no any fictitious statements
misleading statements or important omissions carried in this report and shall
take all responsibilities individual and/or joint for the reality accuracy and
completion of the whole contents.Li Zhongqiu Principal of the Company Chen Zhigang person in charger of
accounting works and Chuai Guoxu person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of 2021 Annual
Report is authentic accurate and complete.All directors are attended the Board Meeting for Report deliberation.Concerning the forward-looking statements with future planning involved in the
Report they do not constitute a substantial commitment for investors. Majority
investors are advised to exercise caution of investment risks.Risks factors are being well-described in the Report found more in risks factors
and countermeasures disclosed in Prospects for Future Development of the
Board of Directors’ Report.The Company has no plan of cash dividends carried out bonus issued and
capitalizing of common reserves either.
2SHENZHEN ZHONGHENG HUAFA CO. LTD.
Contents
Section I Important Notice Contents and Interpreta... 2
Section II Company Profile and Main Financial Inde... 6
Section III Management Discussion and Analysis ..... 11
Section IV Corporate Governance .................... 23
Section V Enviornmental and Social Responsibility .. 41
Section VI Important Events ........................ 42
Section VII Changes in shares and particular about.. 60
Section VIII Preferred Stock ....................... 68
Section IX Corporate Bonds ......................... 69
Section X Financial Report ......................... 70
3SHENZHEN ZHONGHENG HUAFA CO. LTD.
Documents Available for Reference
I. Text of the Annual Report with signature of the Chairman;
II. Financial statement carrying the signatures and seals of the person in charge of the Company principal of the
accounting works and person in charge of accounting organ;
III. All documents of the Company and manuscripts of public notices that disclosed in the China Securities
Journal Securities Times and Hong Kong Commercial Daily designated by CSRC during the reporting period;
IV. Article of Association
V. Other relevant files.
4SHENZHEN ZHONGHENG HUAFA CO. LTD.
Interpretation
Items Refers to Contents
Company Shen HUAFA Refers to SHENZHEN ZHONGHENG HUAFA CO. LTD.Hengfa Technology Refers to Wuhan Hengfa Technology Co. Ltd.HUAFA Property Refers to Shenzhen Zhongheng HUAFA Property Co. Ltd
HUAFA Lease Refers to Shenzhen HUAFA Property Lease Management Co. Ltd
Wuhan Zhongheng New Science & Technology Industrial Group Co.Wuhan Zhongheng Group Refers to
Ltd
HK Yutian Refers to Hong Kong Yutian International Investment Co. Ltd.Hengsheng Photo-electricity Refers to Wuhan Hengsheng Photo-electricity Industry Co. Ltd.Hengsheng Yutian Refers to Wuhan Hengsheng Yutian Industrial Co. Ltd.Yutian Henghua Refers to Shenzhen Yutian Henghua Co. Ltd.HUAFA Hengtian Refers to Shenzhen HUAFA Hengtian Co. Ltd.HUAFA Hengtai Refers to Shenzhen HUAFA Hengtai Co. Ltd.Shenzhen Vanke Real Estate Co. Ltd， 现改名为“ Shenzhen VankeShenzhen Vanke Refers toDevelopment Co. Ltd.”
Vanke Guangming Refers to Shenzhen Vanke Guangming Real Estate Development Co. Ltd
V& T Law Firm Refers to Shenzhen V& T Law Firm
Zhongheng Semiconductor (former Shenzhen Zhongheng Semiconductor Co. Ltd. (former Zhongheng
Refers to
Huafa Technology) Huafa Technology Co. Ltd)
5SHENZHEN ZHONGHENG HUAFA CO. LTD.
Section II. Company Profile and Main Financial Indexes
I. Company information
Short form of the stock Shen HUAFA -A Shen HUAFA- B Stock code 000020 200020
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in深圳中恒华发股份有限公司
Chinese)
Short form of the Company深华发
(in Chinese)
Foreign name of the
SHENZHEN ZHONGHENG HUAFA CO. LTD.Company (if applicable)
Legal representative Li Zhongqiu
Registrations add. 411 Bldg. Huafa (N) Road Futian District Shenzhen
Code for registrations add 518031
Historical changes of
N/A
registered address
Offices add. 6/F East Tower Huafa Building 411 Bldg. Huafa (N) Road Futian District Shenzhen
Codes for office add. 518031
Company’s Internet Web
http://www.hwafa.com.cn
Site
E-mail huafainvestor@126.com.cn
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Niu Zhuo
618 6/F East Tower Huafa Building
Contact add. 411 Bldg. Huafa (N) Road Futian
District Shenzhen
Tel. 0755-86360201
Fax. 0755-86360201
E-mail huafainvestor@126.com.cn
6SHENZHEN ZHONGHENG HUAFA CO. LTD.
III. Information disclosure and preparation place
Website of the Stock Exchange where the annual
Securities Times; Hong Kong Commercial Daily
report of the Company disclosed
Media and Website where the annual report of the
http://www.cninfo.com.cn
Company disclosed
Preparation place for annual report Office of the Board of SHENZHEN ZHONGHENG HUAFA CO. LTD.IV. Registration changes of the Company
Organization code Before change: 61883037-2 after changed: 91440300618830372G
Before the change of controlling shareholders: the main business was production and
sales of color TV printed circuit board and injection molded parts etc. After the
Changes of main business since listing
change of controlling shareholders: the main business gradually adjusted to
(if applicable)
production and sales of injection molded parts foam part (light packaging materials)
and LCD whole machine.The Company’s predecessor was Shenzhen Huafa Electronic Co. LTD which was
founded in 1981 initiated and established by three legal persons-- Shenzhen SEG
Group Co. Ltd. China Zhenhua Electronic Group Co. LTD and Hong Kong Luks
Industrial Co. LTD. In June 2005 Wuhan Zhongheng Group transferred the 44.12%
Previous changes for controlling
equity of company held by original first and second largest shareholder of the
shareholders (if applicable)
Company Shenzhen SEG Group Co. Ltd and China Zhenhua Electronic Group Co.LTD and equity transfer formalities completed in April 2007; Wuhan Zhongheng
Group became the controlling shareholder of the Company. In September 2007 the
company officially changed its name to “Shenzhen Zhongheng HUAFA Co. Ltd”.V. Other relevant information
CPA engaged by the Company
Name of CPA WUYIGE Certified Public Accountants LLP
Offices add. for CPA 22/F College International Mansion No.1 Zhi Chun Road Haidian District Beijing
Signing Accountants Yao Cuiling Yang Ting
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
□ Yes √ No
7SHENZHEN ZHONGHENG HUAFA CO. LTD.
Changes in the
2021 2020 current year over the 2019
previous year (+-)
Operating income (RMB) 765611248.70 691742269.12 10.68% 721557440.51
Net profit attributable to
shareholders of the listed 7201902.02 6830187.40 5.44% 5460049.15
company (RMB)
Net profit attributable to
shareholders of the listed
company after deducting 6379384.96 4103393.55 55.47% 4843096.96
non-recurring gains and
losses(RMB)
Net cash flow arising from
-12323760.0759719269.60-120.64%74463707.01
operating activities (RMB)
Basic earnings per
0.02540.02415.39%0.0193
share(RMB/Share)
Diluted earnings per
0.02540.02415.39%0.0193
share(RMB/Share)
Weighted average ROE 2.07% 2.03% 0.04% 1.67%
Changes at end of
the current year
Year-end of 2021 Year-end of 2020 compared with the Year-end of 2019
end of previous year
(+-)
Total assets (RMB) 659933225.57 627779621.06 5.12% 614163899.86
Net assets attributable to
shareholder of listed company 343450639.31 336248737.29 2.14% 329428049.89
(RMB)
The lower of the company’s net profit before or after deduction of non-recurring profit (gain)/loss for the last three financial years is
negative and the audit report for the latest year indicates that there is uncertainty about the company’s ability to continue as a going
concern
□Yes √No
The lower of the net profit before or after deduction of non-recurring profit (gain)/loss is negative
□Yes √No
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
8SHENZHEN ZHONGHENG HUAFA CO. LTD.
The Company had no difference of the net profit or net assets disclosed in financial report under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.VIII. Quarterly main financial index
Unit: RMB/CNY
Q 1 Q 2 Q 3 Q 4
Operating income 190936203.57 200697604.98 211898917.91 162084471.53
Net profit attributable to
shareholders of the listed 5557677.31 1431685.17 1123649.15 -1014695.49
company
Net profit attributable to
shareholders of the listed
5476703.891557494.89572226.97-1438157.57
company after deducting
non-recurring gains and losses
Net cash flow arising from
-5125776.38-16692593.21-2235279.9940890272.74
operating activities
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the company’s quarterly report and semi-annual report
□Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
Unit: RMB/CNY
Item 2021 2020 2019 Note
Gains/losses from the disposal of
non-current asset (including the write-off 7871.56 817533.49 9298.34
that accrued for impairment of assets)
Governmental subsidy reckoned into
current gains/losses (except for those with
1297733.352728618.05534380.00
normal operation business concerned and
conform to the national policies &
9SHENZHEN ZHONGHENG HUAFA CO. LTD.
regulations and are continuously enjoyed
at a fixed or quantitative basis according
to certain standards)
Gain/loss of entrusted investment or assets
165317.73180964.60
management
Gains/losses arising from contingencies
not related to Company’s normal -736748.18
operating business
Except for the effective hedging
operations related to normal business
operation of the Company the
gains/losses of fair value changes from
holding the trading financial assets and 163562.36
trading financial liabilities and the
investment earnings obtained from
disposing the trading financial asset
trading financial liability
Switch back of provision for depreciation
of account receivable which was singly 553901.68
taken depreciation test
Other non-operating income and
expenditure except for the aforementioned 417245.81 -385232.40 -424941.86
items
Less: Impact on income tax 327147.84 599443.02 236650.57
Total 822517.06 2726793.85 616952.19 --
Specific information on other items of profits/losses that qualified the definition of non-recurring profit(gain)/loss
□Applicable √Not applicable
The Company does not have other items of profits/losses that qualified the definition of non-recurring profit(gain)/loss
Information on the definition of non-recurring profit(gain)/loss that listed in the Q&A Announcement No.1 on Information Disclosure
for Companies Offering Their Securities to the Public --- Extraordinary (non-recurring) Profit(gain)/loss as the recurring
profit(gain)/loss
□Applicable √Not applicable
The Company does not have any non-recurring profit(gain)/loss listed under the Q&A Announcement No.1 on Information Disclosure
for Companies Offering Their Securities to the Public --- Extraordinary (non-recurring) Profit(gain)/loss defined as recurring
profit(gain)/loss
10SHENZHEN ZHONGHENG HUAFA CO. LTD.
Section III Management Discussion and Analysis
I. Industry of the Company during the reporting period
With the arrival of the era of artificial intelligence intelligence has become a major trend of the development of
the home appliance industry in the main electrical products the intelligent rate of color TV is the highest the
intelligent permeability of air conditioning washing machine is also accelerating as the home appliance industry
supporting manufacturers will benefit from the great development.II. Main businesses of the Company during the reporting period
After years of development the company has gradually formed two main businesses in industry and property
management. Among them the industrial business mainly includes injection molding polygon (light-weight
packaging materials) and complete machine production and sales of liquid crystal display property management
business is mainly the lease of its own property.III. Core competitiveness analysis
All industrial lands of the Company located in Shenzhen were taken into the first batch of plan under 2010
Shenzhen urban upgrade planning. In the future development and operation of self-owned land resources would
become the income source of the Company on a long-term and stable basis.IV. Main business analysis
1.Overview
In 2021 due to the adverse impact of THE COVID-19 epidemic on the macro economy the impact brought by the
sharp rise in the price of upstream raw materials in the industry as well as the "dual control of energy
consumption" and other measures introduced by some localities the production and operation environment of the
company is facing great challenges. Under the leadership of the company's leaders all staff have basically
completed the economic targets set at the beginning of the period showing a benign development trend of stable
growth.In 2021 the Company achieved operating income of 765.6112 million yuan an increase of 10.68% over the same
period of previous year; total profit amounted to 11.9506 million yuan an increase of 35.54% over the same
period of previous year and the net profit was 7.2019 million yuan 5.44% up over the same period last year.●Video service business achieved operating income of 415.4231 million yuan for the whole year an increase of
4.89% on a year-on-year basis the Video Business Division adjusted the product structure and optimized the sales
11SHENZHEN ZHONGHENG HUAFA CO. LTD.
ratio of each brand of products. The sales ratio of AOC VSCN and VSC series brands have increased which
opened online sales channels such as Jingdong while completing existing customer orders and sold 700000 LCD
monitors throughout the year of 2021.●Injection molding business achieved operating income of 224.9477 million yuan for the whole year an increase
of 21.27% over the same period last year. With the unceasingly fierce competition in the market the profit margin
of injection molding was squeezed but the new production line put into production by this business division at the
end of 2018 gave full play to its automation advantages in 2021 which greatly improved production efficiency
and reduced production costs. The injection molding division achieved sales volume of 11182 tons throughout the
year completed the annual sales target.●Polygon business achieved operating income of 43.4212 million yuan for the whole year an increase of 21.18%
over the same period last year. Sales for the whole year amounted as 2851 tons reaching the sales targethowever
due to the impact of the epidemic and other factors the profits of traditional industries suffered a slight loss. In
order to better fulfill the sales target of 2022 the EPS business division maintained existing orders increased the
proportion of structural parts orders developed new customer resources and strive to accept more domestic and
foreign large-scale household appliance customers’ orders.●The property rental business achieved operating income of 50.3471 million yuan for the whole year an increase
of 24.05% from a year earlier. In 2022 the Company optimized the structural proportion of commercial tenants
and the occupancy rate was greatly improved at the same time the Company strictly controlled costs and reduced
unnecessary expenditures. Therefore the Company’s overall rental profits increased significantly compared with
the previous year.
2.Income and cost
(1) Constitute of operating income
Unit: RMB/CNY
20212020
Increase/decrease
Ratio in operation Ratio in operation
Amount Amount y-o-y (+-)
income income
Total operation
765611248.70100%691742269.12100%10.68%
income
According to industries
Display 415423079.69 54.26% 396060015.82 57.26% 19.29%
Plastic injection
224947682.5529.38%185491674.0826.82%-25.86%
hardware
Foam pieces 43421169.27 5.67% 35833322.61 5.18% -44.30%
Property leasing 50347102.73 6.58% 40587453.21 5.87% 4.55%
12SHENZHEN ZHONGHENG HUAFA CO. LTD.
Material income 26693866.77 3.49% 29728400.10 4.30% -98.60%
Utilities and others 4778347.69 0.62% 4041403.30 0.58% 476.03%
According to products
Display 415423079.69 54.26% 396060015.82 57.26% 4.89%
Plastic injection
224947682.5529.38%185491674.0826.82%-3.82%
hardware
Foam pieces 43421169.27 5.67% 35833322.61 5.18% 21.18%
Property leasing 50347102.73 6.58% 40587453.21 5.87% 24.05%
Material income 26693866.77 3.49% 29728400.10 4.30% 146.35%
Utilities and others 4778347.69 0.62% 4041403.30 0.58% 18.23%
According to region
Domestic 509999596.18 66.61% 89452347.92 12.93% 94.40%
Overseas 255611652.52 33.39% 602289921.20 87.07% -11.55%
According to sales model
Direct sales 765611248.70 100.00% 691742269.12 100.00% 10.68%
(2) The industries products regions or sales model accounting for over 10% of the Company’s operation
revenue or operation profit
√Applicable □ Not applicable
Unit: RMB/CNY
Increase/decrea
Increase/decrea Increase/decrea
Operating Gross profit se of gross
Operating cost se of operating se of operating
income ratio profit ratio
income y-o-y cost y-o-y
y-o-y
According to industries
Display 415423079.69 391846657.69 5.68% 4.89% -2.92% -0.95%
Plastic
injection 178411171.56 168078526.96 5.79% -3.82% -2.79% -2.96%
hardware
According to products
Display 415423079.69 391846657.69 5.68% 4.89% -2.92% -0.95%
Plastic
injection 178411171.56 168078526.96 5.79% -3.82% -2.79% -2.96%
hardware
According to region
According to sales model
13SHENZHEN ZHONGHENG HUAFA CO. LTD.
Direct sales 593834251.25 559925184.65 5.71% 2.11% 4.10% -1.81%
Under circumstances of adjustment in reporting period for statistic scope of main business data adjusted main business based on
latest one year’s scope of period-end
□ Applicable √ Not applicable
(3) Income from physical sales larger than income from labors
√ Yes □ No
According to Increase/decrease
Item Unit 2021 2020
industries y-o-y (+-)
Sales volume Set 712137 900704 -20.94%
Display Output Set 712857 876231 -18.65%
Storage Set 17275 16555 4.35%
Sales volume Ton 9464.96 9902.24 -4.42%
Plastic injection
Output Ton 11181.58 10272.97 8.84%
hardware
Storage Ton 2634.87 918.25 186.94%
Sales volume Ton 2880 2511.02 14.69%
Foam pieces Output Ton 2831.64 2508.54 12.88%
Storage Ton 166.05 214.41 -22.55%
Reasons for y-o-y relevant data with over 30% changes
√Applicable □ Not applicable
In 2021 the plastic injection hardware increase Zhengzhou Division the inventory increased.
(4) Performance of significant sales contracts major procurement contract entered into by the company up
to the current reporting period
□ Applicable √ Not applicable
(5)Composition of operation cost
Classification of industries and products
Unit: RMB/CNY
20212020
Increase/decrea
Industries Item Ratio in Ratio in
Amount Amount se y-o-y (+-)
operation cost operation cost
Display 391846657.69 57.38% 369785369.91 60.30% -2.92%
Plastic
injection 168078526.96 24.61% 168053472.02 27.40% -2.79%
hardware
14SHENZHEN ZHONGHENG HUAFA CO. LTD.
Foam pieces 45040644.84 6.60% 37890056.81 6.18% 0.42%
Property
7620827.321.12%5329922.720.87%0.25%
leasing
Material
65440257.869.58%28254317.784.61%4.97%
income
Utilities and
4858092.800.71%3915555.270.64%0.07%
others
Unit: RMB/CNY
20212020
Increase/decrea
Products Item Ratio in Ratio in
Amount Amount se y-o-y (+-)
operation cost operation cost
Display 391846657.69 57.38% 369785369.91 60.30% -2.92%
Plastic
injection 168078526.96 24.61% 168053472.02 27.40% -2.79%
hardware
Foam pieces 45040644.84 6.60% 37890056.81 6.18% 0.42%
Property
7620827.321.12%5329922.720.87%0.25%
leasing
Material
65440257.869.58%28254317.784.61%4.97%
income
Utilities and
4858092.800.71%3915555.270.64%0.07%
others
Explanation
Nil
(6) Whether the changes in the scope of consolidation in Reporting Period
□Yes √No
(7) Major changes or adjustment in business product or service of the Company in Reporting Period
□ Applicable √ Not applicable
(8) Major sales and main suppliers
Major sales client of the Company
Total top five clients in sales (RMB) 513936870.10
Proportion in total annual sales volume for top five
67.13%
clients
15SHENZHEN ZHONGHENG HUAFA CO. LTD.
Ratio of related parties in annual total sales among the
13.08%
top five clients
Information of top five clients of the Company
Serial Clients Sales (RMB) Proportion in total annual sales
1 No.1 189532652.51 24.76%
2 No.2 100111660.49 13.08%
3 No.3 111017090.11 14.50%
4 No.4 62326226.30 8.14%
5 No.5 50949240.69 6.65%
Total -- 513936870.10 67.13%
Other situation of main clients
□ Applicable √ Not applicable
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 92047329.20
Proportion in total annual purchase amount for top five
13.18%
suppliers
Ratio of related parties in annual total sales among the
11.42%
top five suppliers
Information of top five suppliers of the Company
Serial Supplier Purchase (RMB) Proportion in total purchase
1 No.1 79714655.46 11.42%
2 No.2 4362455.47 0.62%
3 No.3 2897420.76 0.41%
4 No.4 3531828.12 0.51%
5 No.5 1540969.40 0.22%
Total -- 92047329.20 13.18%
Other explanation on main suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: RMB/CNY
2021 2020 Increase/decreas Note of major changes
16SHENZHEN ZHONGHENG HUAFA CO. LTD.
e y-o-y (+-)
Sales expense 8440486.05 15417760.60 -45.25% Reduced commodity losses
Administrative
41484831.9334481219.1120.31%
expense
Decrease in foreign exchange
Financial expense 7795478.74 12640702.89 -38.33%
gain/loss
R&D expenses 10794872.74 7285833.84 48.16% Increase in R&D projects
4. R&D investment
√Applicable □Not applicable
Expected impact on the
Projects Purpose Progress Goals to be achieved future development of the
Company
R&D of the new
Research on new
piano curved Completed Obtained a patent New display
display
surface display
R&D of the back
R&D of new display
shell structure for Completed Obtained a patent New display and snap
and back shell snap
new display
R&D of new
R&D of new display
display and Completed Obtained a patent New display and chassis
and chassis
chassis
Development and
application of the
intelligent new New processes Completed Obtained a patent Access to new processes
process for home
appliance panels
Development and
application of the
new oiling and
New processes Completed Obtained a patent Access to new processes
installation
devices for
domestic AC
R&D and
application of the New processes Completed Obtained a patent Access to new processes
heating system
Personnel of R&D
2021 2020 Change ratio(+-)
17SHENZHEN ZHONGHENG HUAFA CO. LTD.
Number of R&D (people) 96 76 26.32%
Ratio of number of R&D 8.57% 9.07% -0.50%
Educational background —— —— ——
Undergraduate 52 45 15.56%
Master 0 0 0.00%
Age composition —— —— ——
Investment of R&D
2021 2020 Change ratio(+-)
R&D investment (RMB) 10794872.74 7285833.84 48.16%
R&D investment/Operation
1.41%1.05%0.36%
revenue
Capitalization of R&D
0.000.00
investment (RMB)
Capitalization of R&D
0.00%0.00%
investment/R&D investment
Reasons and effects of significant changes in composition of the R&D personnel
□Applicable √Not applicable
The reason of great changes in the proportion of total R&D investment accounted for operation revenue than last year
□ Applicable √ Not applicable
Reason for the great change in R&D investment capitalization rate and rational description
□ Applicable √ Not applicable
5. Cash flow
Unit: RMB/CNY
Item 2021 2020 Increase/decrease y-o-y (+-)
Subtotal of cash in-flow from
538510578.56580631785.58-7.25%
operation activity
Subtotal of cash out-flow
550834338.63520912515.985.74%
from operation activity
Net cash flow arising from
-12323760.0759719269.60-120.64%
operating activities
Subtotal of cash in-flow from
262594.0456951415.71-99.54%
investment activity
Subtotal of cash out-flow
6583893.4760471921.66-89.11%
from investment activity
Net cash flow arising from
-6321299.43-3520505.951.00%
investment activities
18SHENZHEN ZHONGHENG HUAFA CO. LTD.
Subtotal of cash in-flow from
132181709.1734380634.80284.47%
financing activity
Subtotal of cash out-flow
108092163.3296093364.0112.49%
from financing activity
Net cash flow arising from
24089545.85-61712729.211.00%
financing activities
Net increased amount of cash
2751573.57-6594072.281.00%
and cash equivalent
Main reasons for y-o-y major changes in aspect of relevant data
√Applicable □ Not applicable
The long-term loans declined
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
□ Applicable √ Not applicable
V. Analysis of the non-main business
√Applicable □Not applicable
Unit: RMB/CNY
Whether be sustainable
Amount Ratio in total profit Description of formation
(Y/N)
Investment Income from short-term
290069.30 2.43% N
income financial products
Provision for decline in
value of inventory and
Asset impairment -1351453.89 -11.31% N
decline in value of account
receivable
Non-operating
1358669.18 11.37% Government subsidy N
income
Non-operating
448454.42 3.75% Tax late payments N
expense
VI. Assets and liability
1. Major changes of assets composition
Unit: RMB/CNY
Year-end of 2021 Year-begin of 2021 Ratio
Ratio in Ratio in changes Note of major changes
Amount Amount
total assets total assets (+-)
19SHENZHEN ZHONGHENG HUAFA CO. LTD.
Monetary fund 34426043.11 5.22% 60968053.58 9.71% -4.49%
Account
128675327.9719.50%128063911.7920.40%-0.90%
receivable
Inventory 90585670.27 13.73% 70166013.49 11.18% 2.55%
Investment real
46191777.807.00%47224662.277.52%-0.52%
estate
Fixed assets 187889261.50 28.47% 193605444.53 30.84% -2.37%
Construction in
740000.000.11%740000.000.12%-0.01%
process
Right-of-use
209298.720.03%0.03%
assets
Short-term loans 26480857.00 4.01% 12527808.00 2.00% 2.01%
Contract liability 736355.70 0.11% 287140.66 0.05% 0.06%
Long-term loans 61000000.00 9.72% -9.72%
Lease liability 115101.00 0.02% 0.02%
Foreign assets account for a relatively high proportion
□Applicable √Not applicable
2. Assets and liability measured by fair value
□ Applicable √ Not applicable
3.Assets right restriction till end of reporting period
Item Ending book value Restriction reasons
Monetary fund 1530911.93 Note payable margin
Monetary fund 90369.78 Judicial freeze
Intangible assets 6575414.09 Collateral for borrowing
Investment real estate 11308296.62 Collateral for borrowing
Fixed assets 12173809.88 Collateral for borrowing
Disposal of fixed assets 92857471.69 Court seizure
Investment real estate 22749495.78 bank loan collateral
Note receivable 20026713.29 Note payable margin
Total 167312483.06
20SHENZHEN ZHONGHENG HUAFA CO. LTD.
VII. Investment analysis
1. Overall situation
□ Applicable √ Not applicable
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The Company has no securities investment in the Period.
(2) Derivative investment
□ Applicable √ Not applicable
The Company has no derivatives investment in the Period.
5. Application of raised proceeds
□ Applicable √ Not applicable
The Company has no application of raised proceeds in the Period.VIII. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
IX. Analysis of main holding company and stock-jointly companies
√Applicable □ Not applicable
21SHENZHEN ZHONGHENG HUAFA CO. LTD.
Main subsidiary and stock-jointly enterprise with over 10% influence on net profit of the Company
Unit: RMB/CNY
Company Main Operating Operating
Type Register capital Total assets Net assets Net profit
name business income profit
Hengfa
Production 51440842 22401095 71221410
Technology Subsidiary 181643111.00 -2738741.79 -2188076.22
and sales 0.68 7.01 5.05
Company
HUAFA
Property 12952834 5811286.Property Subsidiary 1000000.00 300853.91 1087233.00 922693.89
management .32 76
Company
Subsidiary obtained and disposed in the Period
□ Applicable √ Not applicable
Explanation on holding equity participation enterprise
X. The structured subject controlled by the Company
□ Applicable √ Not applicable
XI. Future Development Prospects
(i)Business analysis
Wuhan Hengfa Technology as an important subsidiary of the company is facing increasing pressure under the
influence of intensified market competition and tight supply of raw and auxiliary materials the core of solving the
predicament is to upgrade the technology to enhance the added value of technology and improve profitability;
under the background of the upgrading of downstream consumer demand by increasing the research and
development of new products the company adjusts and improves product structure improves production
technology and enhance productivity; at the same time expands the supply channels of upstream raw and
auxiliary materials to avoid material shortages affecting production .In a certain period of time property leasing is still another important business for the company’s development the
company makes full use of its own properties providing operation leasing and service businesses will bring a
certain contribution to the company’s cash flow. After the urban renewal and renovation project is gradually
implemented it will bring a long-term and stable source of income to the company.(ii)New Annual Business Plan
◆Industrial Business Upgrade
The epidemic of COVID-19 outbreak is not completely over and all colleagues in the company continued to work
hard to serve existing customers vigorously expanded the market and gained more market share; Meanwhile the
Company will intensify the development of raw & auxiliary materials suppliers in shortage within the market try
to avoid the negative impact of upstream material shortage on the Company’s production. On the basis of
22SHENZHEN ZHONGHENG HUAFA CO. LTD.
maintaining customers actively looked for high-quality technology projects in consumer electronics and
gradually realized industrial upgrading through technology optimization and management optimization; at the
same time it strengthened management improved production efficiency improved product quality and made full
use of the geographical advantages of the company to make the business bigger and stronger.◆Promote the urban renewal project
Speed up the promotion of renewal unit project of Huafa District Gongming Street Guangming New District
Shenzhen and the renewal project renovation progress of Huafa Building Huaqiang North Street Futian District
Shenzhen accelerate the settlement of project procedures and strive to make stage progress as early as possible.◆Continue to focus on strengthening the company’s internal control
In 2022 the company will further optimize the corporate governance structure and improve the internal control
system and process and strictly implement and improve the executive ability of relevant system in accordance
with the governance requirements of listed companies the company’s management and relevant departments will
execute the administrative provisions for approval procedures of fund utilizing management system of related
transactions working system of internal audit internal reporting system of major information in strict accordance
with the requirements of internal control documents.XII. Reception of research communication and interview during the reporting period
√ Applicable □ Not applicable
Main content
Reception Reception and Basic situation index
Time Way Object
location type information of investigation
provided
Operation of
Office of the the Company
Telephone
BOD locates and progress
2021-04-30 communicatio Individual Individual N/A
in 6/F Huafa of the urban
n
Building renewal
projects
23SHENZHEN ZHONGHENG HUAFA CO. LTD.
Section IV Corporate Governance
I. Corporate governance of the Company
During the reporting period in accordance with the laws and regulations of the "Company Law" "Securities Law"
and "Governance Norms of Listed Companies" and the relevant rules and requirements promulgated by the China
Securities Regulatory Commission the company has constantly improved the corporate governance structure
established a sound internal control system enhanced the level of standard operation strictly followed the
provisions of the production and management control and the financial management and control and the
information disclosure and control carried out the work on the basis of the "Articles of Association" "Rules ofProcedure of the Board of Directors” "Rules of Procedure of the Board of Supervisors” “Working System of theIndependent Directors” and “Working Rules of the General Manager” and ensured that the shareholders' meeting
the board of directors and the board of supervisors can perform their duties and responsibilities normally. The
company's governance meets the requirements on the documents of governance norms of listed companies issued
by China Securities Regulatory Commission.Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance for
listed company from CSRC?
□ Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporate governance
for listed company from CSRC.II. Independence of the Company relative to controlling shareholder and the actual controller
in ensuring the Company’s assets personnel finance organization and businesses
During the reporting period the company’s controlling shareholder - Wuhan Zhongheng Group has separated the
business personnel assets organization and finance from the controlling shareholders in accordance with the laws
and regulations of the "Company Law" and "Articles of Association" and had the independent and complete
business system and the capabilities of independent management.
1. Personnel: The company fully and independently operates in the labor personnel and salary management
systems and has established the independent management system all of the company's senior executives are
working in the Company and receive the salaries no senior executive has held a post in both the Company and the
controlling shareholder’s company and no financial staff has held a post in two or more of the related companies.
2. Assets: The company has the clear property rights with the controlling shareholders and the capabilities of
independent management possesses the full rights to control the production system supporting facilities and land
use rights no major shareholder has occupied or dominated the assets.
3. Finance: The company has established the independent complete standardized financial accounting system and
24SHENZHEN ZHONGHENG HUAFA CO. LTD.
financial management system and the corresponding internal control system and internal audit system in
accordance with the requirements of the" Accounting Standards for Business Enterprises" to make the independent
financial decisions.
4. Organization: the board of directors the board of supervisors and other internal organizations are sound and
operate independently the organization is completely separated from the controlling shareholders all organizations
of the company are set up based on the norms and requirements of the listed company and the company’s actual
business features which have the independent office addresses and there is no mixed operation or co-working and
the controlling shareholders legally exercise the investors’ rights and undertake the corresponding obligations.
5. Business: the company has the completely independent business operation system the capabilities of
independent management the independent purchasing system production system and marketing system doesn’t
depend on the controlling shareholders to gain profits or have the horizontal competition relationship with the
controlling shareholders or the subsidiaries.III. Horizontal competition
□ Applicable √ Not applicable
IV. In the report period the Company held annual general meeting and extraordinary
shareholders’ general meeting
1. Shareholders’ General Meeting in the report period
Ratio of investor Resolution of the
Session of meeting Type Date Date of disclosure
participation Meeting
Report of the BOD
for 2020 Report
of BOS for 2020
Financial Report
of 2020 Profit
Distribution Plan
of 2020 Annual
Report of 2020
Annual General
AGM 48.98% 2021-05-20 2021-05-21 and its Summary
Meeting of 2020
Financial Report
of 2021 Proposal
on Financing
Quota for 2021
Proposal on
Amount of
Guarantee
Provided by the
25SHENZHEN ZHONGHENG HUAFA CO. LTD.
Company for
Bank Loans of
Wholly-owned
Subsidiary in
2021 Proposal to
Re-appoint the
Financial Report
Auditor and
Internal Control
Auditor for year of
2021 and Proposal
on Daily Related
Transaction of
Video Business for
2021
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Directors supervisors and senior management
1. Basic information
Amou Amou
nt of nt of Reaso
Shares Shares
Start shares shares ns for
End held at Other held at
Worki dated increas decrea increas
date of period- change period-
Name Title ng Sex Age of ed in sed in e or
office begin s end
status office this this decrea
term (Share (share) (Share
term period period se of
))
(Share (Share shares
))
Li Curren
Chair 2007-0 2022-0 2830 2830
Zhong tly in Male 57 0 0 0
man 7-08 9-11 000 000
qiu office
Jiang Vice Curren
2019-02022-0
Junmi Chair tly in Male 43 0 0 0 0 0
9-129-11
ng man office
Chen Curren
Direct 2019-0 2022-0
Zhigan tly in Male 48 0 0 0 0 0
or 9-12 9-11
g office
26SHENZHEN ZHONGHENG HUAFA CO. LTD.
Indepe
Zheng Curren
ndent Femal 2019-0 2022-0
Chun tly in 56 0 0 0 0 0
directo e 9-12 9-11
mei office
r
Indepe
Wu Curren
ndent 2019-0 2022-0
Weihu tly in Male 43 0 0 0 0 0
directo 9-12 9-11
a office
r
Indepe
Yang Curren
ndent 2019-0 2022-0
Xiong tly in Male 51 0 0 0 0 0
directo 9-12 9-11
wen office
r
Chair
Curren
Huang man of Femal 2012-0 2022-0
tly in 59 0 0 0 0 0
Yanbo the e 1-16 9-11
office
BOS
Curren
Chen Superv Femal 2015-1 2022-0
tly in 36 0 0 0 0 0
Qin isor e 1-06 9-11
office
Curren
Wu Superv Femal 2019-1 2022-0
tly in 50 0 0 0 0 0
Aijie isor e 0-10 9-11
office
Deput
y
Genera
l
Curren
Yang Manag 2015-1 2022-0
tly in Male 49 0 0 0 0 0
Bin e 1-06 2-17
office
Chief
Financ
ial
Officer
Secret
Curren
Niu ary of Femal 2019-1 2022-0
tly in 39 0 0 0 0 0
Zhuo the e 0-25 9-11
office
Board
2019-12022-0
0-259-11
28302830
Total -- -- -- -- -- -- 0 0 0 --
000000
27SHENZHEN ZHONGHENG HUAFA CO. LTD.
During the reporting period whether there was any departure of directors and supervisors and dismissal of Senior management
□Yes √No
Changes of directors supervisors and senior management
□ Applicable √Not applicable
2. Post-holding
Professional background major working experience and present main responsibilities in Company of directors
supervisors and senior management
Li Zhongqiu male born in 1964 with Master of Engineering members of the Hubei Political Consultative
Conference May the first of labor medalist of Wuhan. He serves as Chairman of Wuhan Zhongheng New Science
& Technology Industrial Group Co. Ltd. since 1996. And he serves as Chairman and the General Manager of the
Company since July 2007.Jiang Junming male born in February 1978 in Dalian Liaoning Han nationality holds a bachelor degree in Law
from Shenyang University of Technology and a master degree in Finance from Peking University. He is currently
deputy general manager of Risk Control Department of Shenzhen SEG Group Co. Ltd. He has served
successively as legal assistant of Shenzhen Gemdale Real Estate Co. Ltd. legal supervisor of Shenzhen Maoye
(Group) Co. Ltd. legal deputy manager of Shenzhen Changcheng Investment Holding Co. Ltd. legal affairs post
of Shenzhen SEG Group Co. Ltd. and partner of Guangdong Guanghe Law Firm.Chen Zhigang male born in 1973 master of business administration he is currently the assistant to chairman of
Wuhan Zhongheng Group. He has successively served as supervisor investment manager and securities affairs
representative of Wuhan Huaxin High-Tech Co. Ltd. CFO secretary of the Board and executive deputy general
manager of Wuhan Zhongheng New Technology Industry Group Co. Ltd. and now he is the Director Deputy
GM and CFO of the Company.Ms. Zheng Chunmei Chinese nationality without permanent residency abroad female born in 1965. She
graduated from the Department of Economics and Management of Wuhan University in June 1986 in 1990 she
was awarded the certificate of completion of the University Teachers Training Course of International Accounting
and International Finance and Taxation (Co-sponsored by the World Bank and the State Education Commission)
of the School of Economics Xiamen University she received a master’s degree in business management
(accounting) from Wuhan University in 1997 and a doctorate degree in economics from Wuhan University in
2005. She acted as a visiting scholar at St. Mary's University in Canada Seoul National University in South Korea
and Ohio State University in the United States. She has been teaching at Wuhan University since June 1986 and
is currently a professor and a doctoral tutor in the School of Economics and Management of Wuhan University a
member of Canadian Management Science (ASAC) an independent director of Hubei Hongyu New Packaging
Material Co. LTD.
28SHENZHEN ZHONGHENG HUAFA CO. LTD.
Yang Xiongwen male born in 1970 Doctor of Civil and Commercial Law Renmin University of China a
visiting scholar at the Faculty of Law University of Oxford he is currently a professor at the School of Law of
South China University of Technology a senior engineer a member of the Local People’s Congress of Panyu
District (2016.9.26) a member of the Supervision and Judicial Work Committee of the Standing Committee of the
th
17 Local People’s Congress of Panyu District a member of the Legal Committee of the Guangdong Provincial
Committee of the China Democratic National Construction Association a part-time attorney of Guangdong
Hanrui Law Firm and is concurrently serving as deputy secretary general and executive director of China
Intellectual Property Law Research Association.Wu Weihua male born in 1978 master of law at Peking University he is currently General Manager of Shenzhen
Headquarters of Huajin Securities Co. Ltd. Investment Bank he once served as General Manager of Investment
Banking Division 3 of Founder Securities Underwriting Sponsor Co. Ltd. served as the managing director of the
investment banking department and principal of the M & A financing business department of Huachuang
Securities Co. Ltd.; the managing director of the investment banking department and principal of Shenzhen
business department of Tianfeng Securities Co. Ltd.; executive deputy general manager of the investment
banking department X of Guosen Securities Co. Ltd.; assistant director of the investment banking department of
Dapeng Securities Co. Ltd.; auditor of Shenzhen Tianjian Xinde Certified Public Accountants.Huang Yanbo female born in 1962 a university background and a senior accountant. She served as financial
director of Wuhan Zhongda Shopping Mall since 1985 to 1998; and worked as financial manager of Wuhan
Zhongheng New Science & Technology Industrial Group Co. Ltd. from 1998 to 2007 and GM assistant in charge
of auditing supervise from 2007 to 2011; she serves as CFO of the Company from 2012 to 2016; she serves as
deputy GM of Wuhan Zhongheng New Science & Technology Industrial Group Co. Ltd. since October 2016 and
the supervisor of the Company since January 2012 and she is the chairman of BOS of the Company since August
2013.
Chen Qin female born in 1986 bachelor degree human resources professional. Worked on administrative work
in Merida Bicycle (China) Co. Ltd. from July 2002 to July 2003 engaged in purchasing work in Hui Pu
Electronics (Shenzhen) Co. Ltd. from August 2003 to September 2004 and served as the administration manager
in Huake United Technology (Shenzhen) Co. Ltd. from September 2004 to 2005 October; works in the Company
since October 2005 and serves as supervisor of the Company since 2015.Wu Aijie female born in 1971 bachelor degree she is currently the person in charge of the company’s
accounting organization. She successively served as the accounting director of Wuhan No. 2 Pharmaceutical
Factory Wuhan Benben Electronics Co. Ltd. Wuhan Hengsheng Photo-electricity Industry Co. Ltd. and Wuhan
Zhongheng New Science & Technology Industrial Group Co. Ltd
Yang Bin male born in April 1972 a master degree holder graduated from Xi’an Jiaotong University. He once
29SHENZHEN ZHONGHENG HUAFA CO. LTD.
served as the executive deputy general manager and secretary of the board of Shenzhen China Agricultural
University Technology Co. Ltd. an independent director of Livzon Group and an independent director of CTL
Testing. Now served as the Supervisor of Shenzhen Moyi Investment Co. Ltd. he used to be the company's
director and secretary to the board of directors and now serves as the company's deputy general manager and
chief financial officer. Leaving the Company in February 2022.Niu Zhuo former name was Niu Yuxiang female born in 1982 master intermediate economist. From July 2006
to August 2010 she worked on securities affairs at Shenzhen OFILM Technology Co. Ltd. From September 2010
to present she has been serving in the Company she once held the posts of deputy director of the office of the
board of directors securities affairs representative and currently she is the secretary of the Board of the Company.Post-holding in shareholder’s unit
√ Applicable □ Not applicable
Received
Position in remuneration
Start dated of End date of
Name Name of shareholder’s unit shareholder from
office term office term
’s unit n shareholder’s
unit (Y/N)
Wuhan Zhongheng Group and its
Li Zhongqiu Chairman 1996-03-21 N
subsidiaries
Deputy
General
Jiang
Shenzhen SEG Group Co. Ltd. Manage of 2018-07-02 Y
Junming
risk control
department
Deputy
Huang Yanbo Wuhan Zhongheng Group General 2016-10-12 Y
Manage
Post-holding in other unit
√ Applicable □ Not applicable
Received
Position in Start dated of End date of remuneration
Name Name of other units
other unit n office term office term from other unit
(Y/N)
Zheng
Wuhan University Teacher 1986-06-01 Y
Chunmei
Zheng Hubei Hongyu New Packaging Materials Independen 2021-08-01 Y
30SHENZHEN ZHONGHENG HUAFA CO. LTD.
Chunmei Co. Ltd. t director
Wu Weihua Huajin Securities Co. Ltd. GM 2020-01-01 Y
Yang
South China University of Technology Teacher 2008-08-01 Y
Xiongwen
Yang Part-time
Guangdong Hanrui Law Firm 2021-01-14 N
Xiongwen lawyer
Explanation
on
N/A
post-holding
in other unit
Punishment of securities regulatory authority in recent three years to the company’s current and outgoing directors supervisors and
senior management during the reporting period
√ Applicable □ Not applicable
1. Mr. Yang Bin deputy general manager and Chief Financial Officer of the Company due to the failure to urge and organize the
information disclosure work for the temporary announcement of Shenzhen China Agricultural University Technology Co. Ltd. in
accordance with relevant regulations during his tenure as Secretary of the Board of Directors of Shenzhen China Agricultural
University Science and Technology Co. Ltd. in August 2018 he was given a warning and fined 30000 yuan by Shenzhen Securities
Regulatory Bureau of China Securities Regulatory Commission.
3. Remuneration for directors supervisors and senior management
Decision-making procedures recognition basis and payment for directors supervisors and senior management
Remuneration of directors and supervisors are determined by general meeting and the allowance standard for
each independent director is RMB 60 000 per year (tax included).Remuneration of senior management is determined by the board based on the unified remuneration managementsystem and actual completion of operational targets and the “Proposal of Basic Remuneration for High-rankingndManagers of the Company” was deliberated and approved in 2 extraordinary meeting of the Board for year of
2012.
Remuneration for directors supervisors and senior executives in reporting period
Unit: 10 thousand Yuan
Whether
Total
remuneration
remuneration
Post-holding obtained from
Name Title Sex (F/M) Age obtained from
status related party of
the Company
the Company
(before taxes)
(Y/N)
31SHENZHEN ZHONGHENG HUAFA CO. LTD.
Currently in
Li Zhongqiu Chairman GM Male 57 48 N
office
Currently in
Jiang Junming Vice Chairman Male 43 0 Y
office
Currently in
Chen Zhigang Director Male 48 0 Y
office
Deputy General
Manage Chief Currently in
Yang Bin Male 49 30 N
Financial office
Officer
Zheng Independent Currently in
Female 56 6 N
Chunmei director office
Yang Independent Currently in
Male 51 6 N
Xiongwen director office
Independent Currently in
Wu Weihua Male 43 6 N
director office
Currently in
Huang Yanbo Supervisor Female 59 0 Y
office
Currently in
Chen Qin Supervisor Female 36 14.7 N
office
Employee Currently in
Wu Aijie Female 50 18.75 N
supervisor office
Secretary of the Currently in
Niu Zhuo Female 39 27.6 N
Board office
Total -- -- -- -- 157.05 --
VI. Responsibility performance of directors during the reporting period
1. The board of directors during the reporting period
Session of meeting Date of meeting Disclosure date Meeting resolutions
Report of the GM for 2020 Report of the BOD for 2020
Financial Report of 2020 Profit Distribution Plan of
2020 Self-Evaluation Report on Internal Control for
2020 Annual Report of 2020 and its Summary First
The 5th Session of 10th BOD 2021-04-23 2021-04-27 Quarterly Report of 2021 Financial Report of 2021
Proposal on Financing Quota for 2021 Proposal on
Amount of Guarantee Provided by the Company for
Bank Loans of Wholly-owned Subsidiary in 2021
Proposal to Re-appoint the Financial Report Auditor and
32SHENZHEN ZHONGHENG HUAFA CO. LTD.
Internal Control Auditor for year of 2021 Proposal on
Daily Related Transaction of Video Business for 2021
Proposal on Formulation of the Anti-Fraud & Reporting
Complaint Management System Proposal on Member
Composition of the Special Committees under the 10th
BOD and Proposal on Convening the AGM of 2020
The 6th Session of 10th BOD 2021-08-20 2021-08-24 Semi-Annual Report of 2021
The 7th Session of 10th BOD 2021-10-22 2021-10-26 The Third Quarterly Report of 2021
First Extraordinary
Shareholders General 2021-12-24 2021-12-24 Proposal on Change of Accounting Policies
Meeting of 2021
2. The attending of directors to Board meetings and shareholders general meeting
The attending of directors to Board Meeting and Shareholders General Meeting
Times of Times of
Absent the
Board attending the Times of
Times of Meeting for
meeting Times of Board Times of attend the
Director entrusted the second
supposed to Presence Meeting by Absence general
presence time in a
attend in the communicati meeting
row (Y/N)
report period on
Li Zhongqiu 4 1 3 0 0 N 1
Jiang Junming 4 1 3 0 0 N 1
Chen Zhigang 4 1 3 0 0 N 1
Zheng Chunmei 4 1 3 0 0 N 1
Yang Xiongwen 4 1 3 0 0 N 1
Wu Weihua 4 1 3 0 0 N 1
Explanation of absent the Board Meeting for the second time in a row
Not applicable
3. Objection for relevant events from directors
Directors come up with objection about Company’s relevant matters
□ Yes √ No
No directors come up with objection about Company’s relevant matters in the Period
4. Other explanation about responsibility performance of directors
The opinions from directors have been adopted
√ Yes □ No
Explanation on advice that accepted/not accepted from directors
33SHENZHEN ZHONGHENG HUAFA CO. LTD.
Not applicable
VII. Duty performance of the special committees under the board during the reporting period
Important Specific
Number of comments Other circumstance
Committee Meeting
Members meetings Date of and performance s of the
name content
held meeting suggestions of duties objection (if
made applicable)
Strategy
Committee
conducts
their works
in strict
accordance
with relevant
laws and
regulations
as Company
Law Article
Li Zhongqiu Discussion of
Jiang of the Association
Strategic Not Not
Junming 1 2021-04-23 strategy plan and Rules of
Committee applicable applicable
Zheng for year of Work of
Chunmei 2021 Strategy
Committee
they
diligently
with full
responsibility
and based on
actual
condition
propose
relevant
opinions.Yang
Xiongwen
Nominatio
Jiang Not Not Not Not
ns 0
Junming applicable applicable applicable applicable
Committee
Zheng
Chunmei
Audit Zheng 1 2021-04-16 Communicat Audit Not Not
34SHENZHEN ZHONGHENG HUAFA CO. LTD.
Committee Chunmei e the annual Committee applicable applicable
Wu Weihua audit works conducts
Chen their works
Zhigang in strict
accordance
with relevant
laws and
regulations
as Company
Law Article
of
Association
and Rules of
Work of
Audit
Committee
they
diligently
with full
responsibility
and based on
actual
condition
propose
relevant
opinions.The
Remuneratio
n and
Appraisal
Committee
The annual carries out its
Remunerati remuneration work strictly
on & Wu Weihua of directors in
Appraisal Yang supervisors accordance Not Not 1 2021-04-16
Xiongwen and senior with the applicable applicable
Committee
Li Zhongqiu managers has Company
been Law the
reviewed Articles of
Association
the Working
Rules of the
Remuneratio
n and
35SHENZHEN ZHONGHENG HUAFA CO. LTD.
Appraisal
Committee
and other
relevant laws
and
regulations.It believes
that the
annual
remuneration
of directors
supervisors
and senior
managers is
basically
consistent
with the
actual
situation of
the company
and
conforms to
relevant laws
and
regulations
and the
provisions of
the
remuneration
and appraisal
system of the
company
VIII. Works from BOS
The Company has risks in reporting period that found in supervisory activity from BOS
□ Yes √ No
BOS has no objection about supervision events in reporting period.IX. Particulars of workforce
1. Number of Employees Professional composition Education background
Employee in-post of the parent Company at period-end 13
36SHENZHEN ZHONGHENG HUAFA CO. LTD.
(people)
Employee in-post of main Subsidiaries at period-end (people) 1120
The total number of current employees at period-end (people) 1133
The total number of current employees to receive pay (people) 1133
Retired employee’ s expenses borne by the parent Company
0
and main Subsidiaries (people)
Professional composition
Category of professional composition Numbers of professional composition (people)
Production personnel 919
Sales personnel 33
Technical personnel 94
Financial personnel 13
Administrative personnel 74
Total 1133
Education background
Category of education background Numbers (people)
Master and on-the-job graduate students 6
Undergraduate 65
Junior college 84
Other 978
Total 1133
2. Remuneration Policy
The Company’s directors (excluding independent directors) supervisors and senior management personnel are
monthly paid by basic pay and performance pay and the annual remunerations are paid after annual assessment;
the company’s independent directors are paid 60000 Yuan per person per year as allowances (including tax) the
travel expenses for attending the board meeting and stockholders' meeting and the necessary expenses generated
by exercising their powers in accordance with relevant laws and regulations can be applied for reimbursement
according to the company’s regulations; the remuneration ordinary employees are decided by the positions
including probationary period salary regular employee salary and the company pays social security and public
accumulated funds for them in accordance with the national regulations.
3. Training programs
(1) The directors supervisors and senior management personnel actively participate in the relevant training and
assessment organized by the regulatory agencies such as Shenzhen Stock Exchange Shenzhen Securities
37SHENZHEN ZHONGHENG HUAFA CO. LTD.
Regulatory Bureau etc.
(2) The company regularly or irregularly organizes professional training for employees according to the
departments and division of labor including internal training and external training therein to internal training are
provided by specialized personnel in the company; external training are provided by organizing employees to
participate in the trade associations and the training organized by supervision department.
(3) Organize staff in all positions to actively participate in the learning and assessment of technical professional
qualifications required by different positions.
4. Labor outsourcing
□ Applicable √ Not applicable
X. Profit distribution plan and capitalizing of common reserves plan
Formulation Implementation and Adjustment of Profit Distribution Policy Especially Cash Dividend policy during the Reporting
Period
□ Applicable √ Not applicable
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent company is
positive but no plan of cash dividend proposed
□ Applicable √ Not applicable
Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed no bonus shares and has no share converted from capital reserve either for
the year.XI. Implementation of the company’s stock incentive plan employee stock ownership plan or
other employee incentives
□ Applicable √ Not applicable
The Company had no stock incentive plan employee stock ownership plan or other employee incentive in the reporting period.XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control
The company has established an effective internal control system by improving internal management
strengthening information disclosure and standardizing operation behavior in accordance with the Basic Norms
for Enterprise Internal Control and its supporting guidelines and other internal control regulatory requirements
38SHENZHEN ZHONGHENG HUAFA CO. LTD.
and in accordance with the company’s actual situation. According to the continuous development of the business
the company continuously improved and completed its internal control system for the current year and
strengthened the supervision of the internal audit department on the implementation of the internal control system
at the same time so as to ensure the effective implementation of the internal control system. The Annual Internal
Control Self-Evaluation Report 2021 of the company reflected the construction and implementation of the
company’s internal control. During the reporting period the company had no major defects in the construction and
implementation of internal control.
2. Details of major defects in IC that found during the reporting period
□Yes √ No
XIII. Management and controls on the subsidiary during reporting period
Problems
Integration Integration Measures taken Progress in Follow-up
Name encountered in
plans progress to resolve solution solution plan
integration
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
XIV. Internal control self-evaluation report or internal control audit report
1. Self-evaluation Report of Internal Control
Disclosure date of full internal control
2022-04-26
evaluation report
Disclosure index of full internal control
Juchao Website http://www.cninfo.com.cn
evaluation report
The ratio of the total assets of units
included in the scope of evaluation
accounting for the total assets on the 100.00%
company's consolidated financial
statements
The ratio of the operating income of
units included in the scope of evaluation
accounting for the operating income on 100.00%
the company's consolidated financial
statements
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
Qualitative criteria
1. General deficiencies: the amount of 1. General deficiencies: when facing
39SHENZHEN ZHONGHENG HUAFA CO. LTD.
direct property loss is between 50000 low-risk matters in the process of
yuan and 150000 yuan penalized by the business operation the unit being
district-level (including district-level) inspected didn’t take corresponding
government sector but not having a internal control measures and respond
negative impact on the company’s regular effectively;
disclosure; 2. Important deficiencies: the 2. Important deficiencies: when facing
amount of direct property loss is between matters at a moderate risk level in the
150000 yuan and 450000 yuan penalized process of business operation the unit
by the provincial level (including being inspected didn’t take
provincial level) government sector but corresponding internal control
not having a negative impact on the measures and respond effectively;
company’s regular disclosure; 3. Major 3. Major deficiencies: when facing
deficiencies: the amount of direct property high-risk matters in the process of
loss is more than 450000 yuan penalized business operation the unit being
by the government sector and having a inspected didn’t take corresponding
negative impact on the company’s regular internal control measures and respond
disclosure; effectively.
1. It belongs to important deficiency if the
misstatement of the company’s cash on
hand bank deposits notes receivable and
notes payable caused by internal control
deficiencies is less than RMB 1000 Yuan; General deficiencies: misstatement
it belongs to major deficiency if the index 1 ≥0.5‰ and misstatement
misstatement caused by internal control index 2 < 0.5‰;
Quantitative standard deficiencies is greater than or equal to Important deficiencies: 0.5‰ ≤
RMB 1000 Yuan. misstatement index 2 < 1‰;
2. Other deficiencies in internal controls: Major deficiencies: misstatement index
general deficiencies: misstatement index 1 2≥1‰
≥ 0.5 ‰ and misstatement index 2 <
0.5 ‰; important deficiencies: 0.5 ‰ ≤
misstatement index 2 <1 ‰; major
deficiencies: misstatement index 2 ≥ 1 ‰
Amount of significant defects in
0
financial reports
Amount of significant defects in
0
non-financial reports
Amount of important defects in financial
0
reports
Amount of important defects in
0
non-financial reports
40SHENZHEN ZHONGHENG HUAFA CO. LTD.
2. Audit report of internal control
√ Applicable □ Not applicable
Deliberations in Internal Control Audit Report
We believe that the Huafa Company was in accordance with the "basic norms of internal control" and the relevant provisions and
maintained effective internal control of financial reporting in all material respects
Disclosure details of audit report
Disclosed
of internal control
Disclosure details of audit report
2022-04-26
of internal control
Disclosure date of audit report of
Juchao Website http://www.cninfo.com.cn
internal control (full-text)
Opinion type of auditing report of
Standard unqualified
IC
Whether the non-financial report
No
had major defects
Carried out modified opinion for internal control audit report from CPA
□Yes √ No
The internal control audit report issued by CPA has concerted opinion with self-evaluation report issued from the Board
√ Yes □ No
41SHENZHEN ZHONGHENG HUAFA CO. LTD.
XV. Rectification of Self-examination Problems in Special Governance Actions in Listed
Company
According to the deployment of the special action on governance of listed companies of the China Securities
Regulatory Commission the company conducted a self-examination on corporate governance according to the
content of the self-examination checklist. Through this self-examination the company considers that the corporate
governance complies with the requirements of the Company Law the Securities Law and other laws and
regulations and the corporate governance structure is relatively complete.
42SHENZHEN ZHONGHENG HUAFA CO. LTD.
Section V. Environmental and Social Responsibility
I. Major environmental
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
□Yes √ No
Administrative punishment for environmental problems during the reporting period
The impact on the
The Company's
Name of company Reason for production and
Violation Punishment result rectification
or subsidiary punishment operation of listed
measures
companies
N/A N/A N/A N/A N/A N/A
Other environmental information disclosed refer to key polluters
Not applicable
Measures taken to reducing the carbon emissions during the reporting period and their effectiveness
□ Applicable √ Not applicable
Reasons for not disclosing other environmental information
Not applicable
II. Social Responsibility
Not applicable
III. Consolidating and expanding the achievements of poverty alleviation and rural
revitalization
The Company has no achievements in poverty alleviation and rural revitalization plan during the reporting period.
43SHENZHEN ZHONGHENG HUAFA CO. LTD.
Section VI. Important Events
I. Implementation of commitment
1. Commitments that the actual controller shareholders related party offeror and committed party as the
Company etc. have fulfilled during the reporting period and have not yet fulfilled by the end of reporting
period
√Applicable □ Not applicable
Type of
Content of
Commitmen Commitmen Implementa
Commitments Promise commitment commitment
t date t term tion
s
s
The
enterprise
and its
subsidiaries
will not
participate
directly or
indirectly in
operation of
the business
with
competitive
of Shen Implement
Wuhan Huafa and since 12 In normal
Commitments for share reform Zhongheng its 2007-03-29 April 2007 implementi
Group controlling throughout ng
subsidiary the year
concerned
and not to
damage the
interest of
the Shen
Huafa and
its
controlling
subsidiary
by making
use of the
potential
44SHENZHEN ZHONGHENG HUAFA CO. LTD.
controlling-
ship of the
Shen Huafa
either
The
enterprise
and its
subordinate
enterprise
shall avoid a
related
transaction
as far as
possible
with Shen
Huafa and
its
controlling
subsidiary
as for the
related
dealings
Implement
occurred
Wuhan since 12 In normal
inevitable or
Zhongheng 2007-03-29 April 2007 implementi
have
Group throughout ng
reasonable
the year
cause the
enterprise
promise to
follow the
principle of
fair-ness
justice and
open-ness
signed the
agreement
in line with
the laws
perform
legal
program
fulfill
information
disclosure
45SHENZHEN ZHONGHENG HUAFA CO. LTD.
obligation
and relevant
approval
procedures
according to
the relevant
laws
regulationsand “ListingRules” of
the
Shenzhen
Stock
Exchange
guarantee
not to
damage the
legal
interest of
Shen Huafa
and its
shareholders
through
related
transactions
After
acquisition
and assets
restructurin
g guarantee
to have an
independent
staff owns Implement
Wuhan independent since 12 In normal
Zhongheng and 2007-03-29 April 2007 implementi
Group completed throughout ng
assets and the year
independent
in aspect of
business
financial
and
institution
from Shen
46SHENZHEN ZHONGHENG HUAFA CO. LTD.
Huafa
Commitments in report of
acquisition or equity change
Commitments in assets
reorganization
Commitments make in initial public
offering or re-financing
Equity incentive commitment
Regarding
the lawsuit
with
Shenzhen
Vanke: 1. If
the
arbitration
judges
Shenzhen
Vanke to
win the
arbitration
losses
caused by
the contract
disputes
Implemente
Wuhan shall be In normal
Other commitments for medium d since 20
Zhongheng undertaken 2016-12-20 implementi
and small shareholders December
Group by Wuhan ng
2016
Zhongheng
Group in
full; 2. The
contingent
losses and
risks arising
from the
termination
of relevant
contracts
shall be
undertaken
by Wuhan
Zhongheng
Group in
advance.
47SHENZHEN ZHONGHENG HUAFA CO. LTD.
Completed on time(Y/N) Yes
If the commitments is not fulfilled
on time shall explain the specify Not applicable
reason and the next work plan
2. Concerning assets or project of the Company which has profit forecast and reporting period still in
forecasting period explain reasons of reaching the original profit forecast
□ Applicable √ Not applicable
II. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.III. External guarantee out of the regulations
□ Applicable √ Not applicable
No external guarantee out of the regulations occurred in the period.IV. Statement on the latest “modified audit report” by BOD
□ Applicable √ Not applicable
V. Explanation from Board of Directors Supervisory Committee and Independent Directors
(if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable √ Not applicable
VI. Explanation of the changes in accounting polices accounting estimates or correction of
significant accounting errors compared with the financial report of the previous year
√Applicable □ Not applicable
The first implementation of the new lease standard
According to the Notice on Revising and Issuing Accounting Standards for Business Enterprises No. 21 - Leases
(CK [2018] No. 35) issued by the Ministry of Finance on December 7 2018 the revised Accounting Standards for
Business Enterprises No. 21 - Lease takes effect on January 1 2019 for companies listed both at home and abroad
and companies listed overseas and preparing financial statements by using IFRS or ASBE; for other companies
that implement Accounting Standards for Business Enterprises it takes effect on January 1 2021.According to the regulations of the Ministry of Finance the company has implemented the new lease standard
from January 1 2021 (hereinafter referred to as the “first implementation date”).
48SHENZHEN ZHONGHENG HUAFA CO. LTD.
The main contents of the new lease standard implemented this time are as follows: (1) Under the new lease
standard except for short-term leases and low-value leases lessees will no longer distinguish between finance
leases and operating leases and all leases are subject to the same accounting treatment requiring the recognition
of right-of-use assets and lease liabilities; (2) For right-of-use assets where the lessee can reasonably determine
that the ownership of the leased asset can be obtained when the lease term expires depreciation shall be accrued
within the remaining useful life of the leased asset. Where it cannot be reasonably determined that the ownership
of the leased asset can be obtained at the expiration of the lease term depreciation shall be accrued within the
shorter of the lease term and the remaining useful life of the leased asset. At the same time the lessee needs to
determine whether the right-of-use asset is impaired and conduct accounting treatment for the recognized
impairment losses; (3) For lease liabilities the lessee shall calculate the interest expenses of the lease liabilities in
each period of the lease term and include them in the current profits and losses. (4) For short-term leases and
leases of low-value assets the lessee may choose not to recognize the right-of-use assets and lease liabilities and
include them in the relevant asset costs and liabilities and the current profits and losses in each period of the lease
term by using the straight-line method or other systematic and reasonable methods.The company will start accounting treatment for the impact of the implementation of the new lease standard on
the company in accordance with the new lease standard from January 1 2021 and according to the connection
regulations the information of the comparable period will not be adjusted and the retained earnings at the
beginning of 2021 shall be retrospectively adjusted by the difference between the new lease standard and the
current lease standard on the first implementation date. This accounting policy change does not involve
retrospective adjustments to previous years and will not have a significant impact on the company’s financial
statements.VII. Compare with last year’s financial report; explain changes in consolidation statement’s
scope
□ Applicable √ Not applicable
No changes in consolidation statement scope in the reporting period
VIII. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm WUYIGE Certified Public Accountants LLP
Remuneration for domestic accounting firm (in 10 thousand
50
Yuan)
Continuous life of auditing service for domestic accounting
6
firm
49SHENZHEN ZHONGHENG HUAFA CO. LTD.
Name of domestic CPA Yao Cuiling Yang Ting
Consecutive years for auditing service from domestic CPA 2
Name of foreign accounting firm (if applicable) N/A
Continuous life of auditing service for foreign accounting firm
N/A
(if applicable)
Name of foreign CPA (if applicable) N/A
Consecutive years for auditing services from foreign CPA (If
N/A
applicable)
Re-appointed accounting firms in this period
□Yes √ No
Appointment of internal control auditing accounting firm financial consultant or sponsor
√Applicable □ Not applicable
The Company employed WUYIGE Certified Public Accountants LLP as internal control audit institutions in the year.IX. Particular about delisting after annual report disclosed
□ Applicable √ Not applicable
X. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period
XI. Significant lawsuits and arbitration of the Company
√Applicable □ Not applicable
Amount of
Advances
The basic money The results and
Predicted in Execution of
situation of involved effects of Disclosure Disclosure
liabilities litigation the litigation
litigation (in 10 litigation date index
(Y/N) (Arbitrati (Arbitration)
(Arbitration) thousand (Arbitration)
on)
Yuan)
In September Ruling on In September http://www
2016 Wuhan 16 2018 .cninfo.co
Zhongheng Group August Shenzhen m.cn/cninf
Co. Ltd. and the 2017; put Found more in Vanke applied o-new/discl
Company and 46460 N forward notice of the for 2018-02-09 osure/szse_
Shenzhen Vanke the Company compulsory main/bullet
were applied for applicatio execution. In in_detail/tr
arbitration due to n for October 2019 ue/120440
the dispute case of dismantli due to the 6606?anno
50SHENZHEN ZHONGHENG HUAFA CO. LTD.
“Contract for the ng by the outsider's unceTime=Cooperative Company application of 2018-02-09
Operation of the and "objection to ；
Old Projects at controllin execution" http://www
Huafa Industrial g and .cninfo.co
Park Gongming sharehold "non-enforce m.cn/new/d
Street er the ment" the isclosure/d
Guangming New applicatio execution etail?plate=District”. n was procedure szse&stock
rejected was Code=0000
by the terminated. If 20&annou
court the outsider's ncementId
application =12053268
was rejected 46&annou
by the ncementTi
Shenzhen
me=2018-0
Intermediate
People’s
Court
Shenzhen
Vanke would
have the right
to continue to
apply for the
resumption of
compulsory
execution.The
In March 2016
second
the Company and
trial http://www
HUAFA Property
decides .cninfo.co
suit against
the m.cn/cninf
Shenzhen
Company o-new/discl
Huayongxing
wins the osure/szse_
Environmental
lawsuit Execution Execution main/bullet
Technology Co. 947.26 N 2016-09-14
on 15 completed completed in_detail/tr
Ltd. and
March ue/120270
Shenzhen Yidaxin
2018 and 2423?anno
Technology Co.has unceTime=
Ltd. for contract
applied 2016-09-14
violation and
for 07:41
refuse to move the
enforcem
site
ent
Application for 1940.2 N The A decision was Implementing 2018-11-14 http://www
51SHENZHEN ZHONGHENG HUAFA CO. LTD.
arbitration in case arbitratio issued and the .cninfo.co
of contract dispute n has Company’s m.cn/new/d
between the V&T been motion to isclosure/d
Law Firm and heard dismiss was etail?plate=
Shenzhen denied szse&stock
Zhongheng Huafa Code=0000
Co. Ltd. and 20&annou
Wuhan ncementId
Zhongheng Group =12056020
53&annou
ncementTi
me=2018-1
http://www.cninfo.co
m.cn/new/d
isclosure/d
etail?stock
Code=0000
20&annou
ncementId
=12075401
13&orgId=
gssz00000
20&annou
Case of dispute on
ncementTi
replacement
me=2020-0
contract between
4-21；
Zhongheng Second Trial in Trial in
5200 N 2020-04-21 http://www
Semiconductor trial progress progress.cninfo.co
and Shenzhen
m.cn/new/d
Zhongheng Huaf
isclosure/d
a Co. Ltd.etail?stock
Code=0000
20&annou
ncementId
=12101513
95&orgId=
gssz00000
20&annou
ncementTi
me=2021-0
6-03；
http://www
52SHENZHEN ZHONGHENG HUAFA CO. LTD.
.cninfo.co
m.cn/new/d
isclosure/d
etail?stock
Code=0000
20&annou
ncementId
=12105431
49&orgId=
gssz00000
20&annou
ncementTi
me=2021-0
XII. Penalty and rectification
□ Applicable √ Not applicable
No penalties or rectifications during the reporting period.XIII. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XIV. Major related transaction
1. Related transaction with routine operation concerned
√Applicable □ Not applicable
Whet
Tradi
her
Relat ng
ed over Cleari Avail
Propo limit
Type Conte transa ng
Relat rtion the able Date Index
of nt of Pricin ction appro form
Relati ed in
Related relate relate g amou appro for simila of of
onshi transa simila ved
party d d princi nt relate
p ction r ved r disclo discl
transa transa ple (in 10 (in 10 d
price transa
ction ction thous limite transa marke sure osure
ctions thous
and d or ction t price
Yuan) and
not
Yuan)
(Y/N)
Hong In The http:/
The Displa Telegr
Kong princi avera /ww
same Purch ys and 7951. 7951. 1569 aphic 2021-
Yutian ple N ge w.cni
contro ase Materi 68 68 7.92 transf 4-27
Internat the marke nfo.c
l als er
ional transa t price om.c
53SHENZHEN ZHONGHENG HUAFA CO. LTD.
Investm ction refers n/ne
ent Co. price to the w/dis
Ltd. of price closu
purch of re/det
ased produ ail?st
raw cts of ockC
materi the ode=
als is same 0000
deter specif 20&a
mined icatio nnou
at n that ncem
appro can entId
ximat be =120
ely found 9812
1% in the 794&
lower websi orgId
than te of =gssz
the global 0000
prevai ly 020&
ling renow anno
avera ned unce
ge profes ment
marke sional Time
t marke =202
price t 1-04-
with resear 27
refere ch
nce to comp
the anies
respec (http:/
tive /www
bargai .displ
ning aysea
power rch.co
of m)
both and
partie LCD
s. profes
sional
marke
t
resear
ch
comp
54SHENZHEN ZHONGHENG HUAFA CO. LTD.
anies
(http:/
/www.witsv
iew.c
om)
that
are
recog
nized
in the
indust
ry
Wuhan
Hengsh
eng
The Telegr
Photo-e
same Purch Displa 8073. 8073. 1308 aphic 2021-
lectricit Ditto N Ditto Ditto
contro ase ys 17 17 1.6 transf 4-27
y
l er
Industr
y Co.Ltd.Wuhan
Synch
Hengsh
ronize
eng
The with Telegr
Photo-e
same Purch Displa the 1923. 1923. 6540. aphic 2021-
lectricit N Ditto Ditto
contro ase ys marke 17 17 8 transf 4-27
y
l t er
Industr
situati
y Co.on
Ltd.Hong Synch
Kong ronize
Yutian The with Telegr
Internat same Displa the 1001 1001 1962 aphic 2021-
Sales N Ditto Ditto
ional contro ys marke 1.17 1.17 2.4 transf 4-27
Investm l t er
ent Co. situati
Ltd. on
Wuhan The Synch Telegr
Displa 4506. 4506. 6540. 2021-
Hengsh same Sales ronize N aphic Ditto Ditto
ys 34 34 8 4-27
eng contro with transf
55SHENZHEN ZHONGHENG HUAFA CO. LTD.
Photo-e l the er
lectricit marke
y t
Industr situati
y Co. on
Ltd.Wuhan
Synch
Hengsh
ronize
eng
The with Telegr
Photo-e
same Materi the 654.0 aphic 2021-
lectricit Sales 51.03 51.03 N Ditto Ditto
contro al marke 4 transf 4-27
y
l t er
Industr
situati
y Co.on
Ltd.
32516213
Total -- -- -- -- -- -- -- --
6.567.56
Detail of sales return with major
N/A
amount involved
During the reporting period Hengfa Technology purchased LCD monitors from HK
Yutian with 79.5168 million yuan approximately 50.65% of the annual amount predicted
at the beginning of the year; purchased LCD monitors from Hengsheng Photo-electricity
Report the actual implementation of
with 80.7317 million yuan approximately 61.71% of the annual amount predicted at the
the daily related transactions which
beginning of the year; purchasing LCD Display from Hengsheng Photo-electricity with
were projected about their total
about 19.2317 million yuan 13.39% of the annual amount predicted at the beginning of
amount by types during the
the year; sold LCD Display whole machine to HK Yutian with US$ 9.5462 million
reporting period (if applicable)
approximately 29.4% of the annual amount predicted at the beginning of the year; sold
LCD Display to Hengsheng Photo-electricity with 45.0634 million yuan approximately
68.9% of the annual amount predicted at the beginning of the year.
Reasons for major differences
between trading price and market N/A
reference price (if applicable)
2. Related transactions by assets acquisition and sold
□Applicable √Not applicable
No above mentioned transactions occurred
3. Main related transactions of mutual investment outside
□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period.
56SHENZHEN ZHONGHENG HUAFA CO. LTD.
4. Contact of related credit and debt
√Applicable □ Not applicable
Whether has non-operational contact of related liability and debts or not
□Yes √ No
No non-operational contact of related liability or debts in Period
5. Contact with the related finance companies
□ Applicable √ Not applicable
There are no deposits loans credits or other financial business between the Company the related finance companies and related
parties.
6. Transactions between the finance company controlled by the Company and related parties
□ Applicable √ Not applicable
There are no deposits loans credits or other financial business between the finance companies controlled by the Company and
related parties
7. Other related transactions
□ Applicable √ Not applicable
The company had no other significant related transactions in reporting period.XV. Significant contract and implementations
1. Trusteeship contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship for the Company in reporting period.
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in reporting period.
(3) Leasing
□ Applicable √ Not applicable
No leasing for the Company in reporting period.
2. Major guarantees
√Applicable □ Not applicable
57SHENZHEN ZHONGHENG HUAFA CO. LTD.
In 10 thousand Yuan
Particulars about the external guarantee of the Company and the subsidiaries (Barring the guarantee for subsidiaries)
Count
er-gu
Name of Related Guaran
Actual Collateral arante
the Announc Actual Implem tee for
Guarante date of Guarante (if e Guarant
Company ement guarantee ented related
e limit happenin e type applicabl situati ee term
guarantee disclosur limit (Y/N) party
g e) on (if
d e date (Y/N)
applic
able)
Guarantee between the Company and the subsidiaries
Count
er-gu
Name of Related Guaran
Actual Collateral arante
the Announc Actual Implem tee for
Guarante date of Guarante (if e Guarant
Company ement guarantee ented related
e limit happenin e type applicabl situati ee term
guarantee disclosur limit (Y/N) party
g e) on (if
d e date (Y/N)
applic
able)
Wuhan
Hengfa Joint
2021-04- One
Technolo 30000 2648.09 liability Y Y
27 year
gy Co. guaranty
Ltd.Total amount of Total amount of actual
approving guarantee occurred guarantee for
300008257.94
for subsidiaries in subsidiaries in report
report period (B1) period (B2)
Total amount of Total balance of actual
approved guarantee guarantee for
for subsidiaries at the 30000 subsidiaries at the end 2648.09
end of reporting of reporting period
period (B3) (B4)
Guarantees of subsidiaries to subsidiaries
Count
Name of Related er Comple Guaran
Actual
the Announc Actual Collateral guara te tee for Guarante date of Guarante Guarant
Company ement guarantee implem related
e limit happenin e type
guarantee disclosur limit (if any) ntee
ee term
entation party
g
d e date (if or not (Y/N)
any)
Total amount of guarantee of the Company (total of three above mentioned guarantee)
58SHENZHEN ZHONGHENG HUAFA CO. LTD.
Total amount of actual
Total amount of approving
occurred guarantee in
guarantee in report period 30000 8257.94
report period
(A1+B1+C1)
(A2+B2+C3)
Total balance of actual
Total amount of approved
guarantee at the end of
guarantee at the end of report 30000 2648.09
report period
period (A3+B3+C2)
(A4+B4+C4)
The proportion of the total amount of actually
guarantee in the net assets of the Company (that 7.71%
is A4+ B4+C4)
Including:
Explanation on compound guarantee
3. Entrust others to cash asset management
(1) Trust financing
□ Applicable √ Not applicable
The Company had no trust financing in the reporting period.
(2) Entrusted loans
□ Applicable √ Not applicable
The company had no entrusted loans in the reporting period.
4. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting period.XVI. Explanation on other significant events
√Applicable □ Not applicable
(i) The Company signed Asset Exchange Contract with Wuhan Zhongheng New Science & Technology Industrial
Group Co. Ltd (hereinafter referred to as Wuhan Zhongheng Group) on 29 April 2009 (details were referred to in
the announcement dated 30 April 2009) and pursuant to the contract since part of the assets of the Company
(namely two parcel of industrial lands located at Huafa road Gongming town Guangming new district Shenzhen
(the property certificate No. were SFDZ No.7226760 and SFDZ No.7226763 No. of parcels were A627-005
andA627-007 and the aggregate area was 48200 sq.m) were the lands listed in the first batch of plan for 2010
Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project and joint
cooperation the Company has not completed the transfer procedures in respect of the aforesaid land.The Company convoked the first extraordinary meeting of the Board in 2015 on February 16 2015 and the first
extraordinary general meeting of the Board in 2015 on March 4 2015 which considered and approved the
59SHENZHEN ZHONGHENG HUAFA CO. LTD.
“Motion on promoting and implementing the urban renewal project for the renewal units of Huafa area atGongming street Guangming new district Shenzhen” specified that the Company and Wuhan Zhongheng Group
shall obtain the corresponding compensatory consideration for removal from the respectively owned project plots
and the respectively contributed and constructed above-ground buildings before the land development it is
estimated that the compensatory consideration obtained by the Company accounts for 50.5% of the total
consideration and Wuhan Zhongheng Group accounts for 49.5% by calculation.The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting of
2015 have considered and adopted the “Proposal on the project promotion and implementation of urban renewaland the progress of related transactions of ‘the updated units at Huafa Area Gong Ming Street Guangming NewDistrict Shenzhen’” the company has signed the “Agreement on the cooperation of urban renewal project of theupdated units at Huafa Area Gong Ming Street Guangming New District Shenzhen” “Contract for thecooperative venture of reconstruction project for Huafa Industrial Park Gong Ming Street Guangming NewDistrict” on 26 August 2015 and “Agreement on housing acquisition and removal compensation and resettlement”
with Wuhan Wuhan Zhongheng Group Shenzhen Vanke Real Estate Co. Ltd. (hereinafter referred to as
“Shenzhen Vanke”) and Shenzhen Vanke Guangming Real Estate Development Co. Ltd. (hereinafter referred to
as “Vanke Guangming”).On 12 September 2016 Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation ofurban renewal project of the updated units at Huafa Area Gong Ming Street Guangming New District Shenzhen”
against the Company and Wuhan Zhongheng Group. Shenzhen Court of International Arbitration (SCIA) has
given a ruling in August 2017. On August 29 2018 the court accepted the compulsory execution application of
Shenzhen Vanke. In October 2019 as a number of outsiders filed an “execution objection” and applied for “noexecution” to Shenzhen Intermediate People’s Court the Shenzhen Intermediate People’s Court ruled to terminate
the enforcement procedure on March 20 2020. If the “execution objection” and “no execution” proposed by
outsiders are rejected according to law Shenzhen Vanke may continue to apply to the Shenzhen Intermediate
People’s Court to resume execution. In April 2020 Zhongheng Semiconductor sued the company to Shenzhen
Intermediate People’s Court and requested the company to transfer the above mentioned two pieces of lands and
compensate the economic loss of 52 million yuan as of the date of disclosure of the report the case is under trial
in second instance and the outcome is not yet available. Progress of the case found more in the Notices released
on Juchao website dated 14 Sept. 2016 1 Nov. 2016 16 Nov. 2016 on 18 Feb. 2017 24 March 2017 25 April
2017 1 July 2017 18 August 2017 9 Feb. 2018 25 Aug. 2018 7 Sept. 2018 21 April 2020 3 June 2020 and 22
July 2021 respectively.(ii) On 31 December 2015 the 88750047 shares held by Wuhan Zhongheng Group are pledge to China
Merchants Securities Assets Co. Ltd. with due date of 31 December 2016. On 1 Feb. 2016 Wuhan Zhongheng
Group pledge the 27349953 shares held to China Merchants Securities Assets Co. Ltd. with due date of 31
December 2016. The above-mentioned pledged shares are deferred by Wuhan Zhongheng Group; pledge expired
on 31 December 2017. The trading day for repurchase put off to the date when pledge actually removed. Till end
of this period released controlling shareholder still not removed the pledge and the Company has apply by letter
60SHENZHEN ZHONGHENG HUAFA CO. LTD.
relevant Notice of Presentment on Stock Pledge from Controlling Shareholder was released. Found more in notice
released on Juchao website date 2 Feb. 2018.Wuhan Zhongheng Group received the first-instance judgment of Guangdong Higher People’s Court to the
“pledged securities repurchase dispute” case sued by China Merchants Securities Asset Management Co. Ltd. in
March 2021. Wuhan Zhongheng Group refused to accept the judgment and has appealed to the Supreme People's
Court the judgment of first instance has not yet taken effect. For details please refer to the company
announcement issued by the company on www.cninfo.com.cn on March 19 2021.(iii) The controlling shareholder Wuhan Zhongheng Group holds 119289894 shares of the Company’ stock
accounting for 42.13% of the total share capital of the Company of which 116489894 shares were judicially frozen
by Shenzhen Intermediate People's Court (hereinafter referred to as "Shenzhen Intermediate Court") on September
27 2016 which were frozen again by the Shenzhen Intermediate People's Court on December 14 2018 with a
frozen period of 36 months; the remaining 2800000 shares were frozen by the Shenzhen Intermediate People's
Court on May 29 2019 and were frozen again by the Higher People’s Court of Guangdong Province on July 5
2019. For details please refer to the company’s announcements published on Juchao Website dated October 27
2016 January 11 2019 May 31 2019 and August 7 2019.
(iv) On September 29 2016 the company and its controlling shareholder Wuhan Zhongheng Group signed the
“Agency Contract” with V&T Law Firm. On October 8 2016 the three parties also signed the “SupplementalAgreement for Agency Contract” it was agreed that V&T acted as an agent for the company and Wuhan
Zhongheng Group to deal with the arbitration case with Shenzhen Vanke. After losing the lawsuit due to
differences in the payment of attorney fees V&T sued our company and Wuhan Zhongheng Group to the
Shenzhen Court of International Arbitration and applied to the court to seize a bank account under our company’sname and part of our company dormitories please refer to “Other Announcements on the Progress InvolvingLitigation and Arbitration” (Announcement Numbers: 2018-43 2019-02) released by our company on Juchao
Website dated November 14 2018 and March 6 2019. 02. In November 2019 the Shenzhen Court of
International Arbitration ruled that the company and Wuhan Zhongheng Group paid the corresponding fees.According to the “Agency Contract” and “Supplemental Agreement for Agency Contract” signed by the three
parties the loss of the arbitrament in this case was borne by Wuhan Zhongheng Group so it had no impact on thecompany’s profit. For details see the company’s “Other Announcements on the Progress Involving Litigation andArbitration” (Announcement No.: 2019-34) released on Juchao Website dated November 25 2019.XVII. Significant event of subsidiary of the Company
□ Applicable √ Not applicable
61SHENZHEN ZHONGHENG HUAFA CO. LTD.
Section VII. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
Unit: Share
Before the Change Increase/Decrease in the Change (+ -) After the Change
Capitali
New zation Proporti Bonus Amoun Proport
Amount shares of Others Subtotal
on shares t ion
issued public
reserve
I. Restricted shares 0 0.00% 0 0 0 0 0 0 0.00%
1. State-owned shares
2. State-owned legal
person’s shares
3. Other domestic shares
Including: Domestic
legal person’s shares
Domestic natural
person’s shares
4. Foreign shares
Including: Foreign legal
person’s shares
Foreign natural
person’s shares
283161100.0028316100.00
II. Unrestricted shares 0 0 0 0 0
227%1227%
18116518116
1. RMB ordinary shares 63.98% 0 0 0 0 0 63.98%
3915391
2. Domestically listed 101995 10199
36.02%0000036.02%
foreign shares 836 5836
3. Overseas listed foreign
shares
4. Others
283161100.0028316100.00
III. Total shares 0 0 0 0 0
227%1227%
Reasons for share changed
62SHENZHEN ZHONGHENG HUAFA CO. LTD.
□ Applicable √ Not applicable
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changed
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of restricted shares
□ Applicable √ Not applicable
II. Securities issuance and listing
1. Security offering (without preferred stock) in Reporting Period
□ Applicable √ Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and
liability structure
□ Applicable √ Not applicable
3. Existing internal staff shares
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
Unit: Share
Total preference Total
Total common
Total shareholders preference
stock
common with voting shareholders
shareholders at
stock rights recovered with voting
19773 end of last 20689 0 0
shareholders at end of rights
month before
in reporting reporting period recovered at
annual report
period-end (if applicable) end of last
disclosed
(found in note 8) month before
63SHENZHEN ZHONGHENG HUAFA CO. LTD.
annual report
disclosed (if
applicable)
(found in note
8)
Particulars about shares held above 5% by shareholders or top ten shareholders
Total Information of shares pledged
Amoun Amount
shareho tagged or frozen
Change t of of
Proport lders at
Full name of Nature of ion of s in restrict un-restri
the end
Shareholders shareholder shares report ed cted
held of State of share Amount
period shares shares
report
held held
period
Wuhan Domestic Pledged 116100000
11928119289
Zhongheng non-state-owne 42.13% 0 0
9894 894 Frozen 119289894
Group d legal person
SEG (HONG Pledged 0
Overseas legal 16569 16569
KONG) CO. 5.85% 0 0
person 560 560 Frozen 0
LTD.GOOD HOPE Pledged 0
CORNER Overseas legal 70720 70720
2.50%00
INVESTMENTS person 00 00 Frozen 0
LTD.Changjiang Pledged 0
Securities
Overseas legal 53552 53552
Brokerage 1.89% 0 0
person 49 49 Frozen 0
(Hong Kong)
Co. Ltd.Guoyuan Pledged 0
Securities
Overseas legal 38701 387011
Brokerage 1.37% 0 0
person 17 7 Frozen 0
(Hong Kong)
Limited
Overseas nature 28300 28300 Pledged 0
Li Zhongqiu 1.00% 0 0
person 00 00 Frozen 0
Domestic nature 24325 24325 Pledged 0
Jin Guoping 0.86% 0 0
person 00 00 Frozen 0
Domestic nature 18805 18805 Pledged 0
Huang Xuelin 0.66% 0 0
person 03 03 Frozen 0
China Merchants State-owned 0.58% 16397 0 0 16397 Pledged 0
64SHENZHEN ZHONGHENG HUAFA CO. LTD.
Securities Hong legal person 73 73
Frozen 0
Kong Co. Ltd.Domestic nature 16100 16100 Pledged 0
Li Wei 0.57% 0 0
person 00 00 Frozen 0
Strategy investors or general
corporation comes top 10
N/A
shareholders due to rights issue (if
applicable) (see note 3)
Among the top ten shareholders Li Zhongqiu is the actual controller of Wuhan Zhongheng
Group.; Shengyin Investment Limited is a wholly-owned subsidiary of Wuhan
Explanation on associated
Zhongheng Group outside of China. Other than that the Company neither knew whether
relationship among the aforesaid
there exists associated relationship among the other shareholders nor they belong to
shareholders
consistent actors that are prescribed in Measures for the Administration of Disclosure of
Shareholder Equity Changes of Listed Companies.Description of the above
shareholders in relation to
N/A
delegate/entrusted voting rights and
abstention from voting rights.Particular about top ten shareholders with un-restrict shares held
Type of shares
Shareholders’ name Amount of un-restrict shares held at Period-end
Type Amount
RMB common
Wuhan Zhongheng Group 119289894 119289894
share
Domestically
SEG (HONG KONG) CO. LTD. 16569560 listed foreign 16569560
shares
Domestically
GOOD HOPE CORNER
7072000 listed foreign 7072000
INVESTMENTS LTD.shares
Domestically
Changjiang Securities Brokerage
5355249 listed foreign 5355249
(Hong Kong) Co. Ltd.shares
Domestically
Guoyuan Securities Brokerage
3870117 listed foreign 3870117
(Hong Kong) Limited
shares
Domestically
Li Zhongqiu 2830000 listed foreign 2830000
shares
RMB common
Jin Guoping 2432500 2432500
share
65SHENZHEN ZHONGHENG HUAFA CO. LTD.
RMB common
Huang Xuelin 1880503 1880503
share
Domestically
China Merchants Securities Hong
1639773 listed foreign 1639773
Kong Co. Ltd.shares
Domestically
Li Wei 1610000 listed foreign 1610000
shares
Among the top ten shareholders Li Zhongqiu is the actual controller of Wuhan Zhongheng
Expiation on associated relationship
Group.; Shengyin Investment Limited is a wholly-owned subsidiary of Wuhan
or consistent actors within the top 10
Zhongheng Group outside of China. Other than that the Company neither knew whether
un-restrict shareholders and between
there exists associated relationship among the other shareholders nor they belong to
top 10 un-restrict shareholders and
consistent actors that are prescribed in Measures for the Administration of Disclosure of
top 10 shareholders
Shareholder Equity Changes of Listed Companies.Among the top ten shareholders Jin Guoping holds 73200 shares through ordinary
Explanation on top 10 shareholders
accounts 2359300 shares through credit securities accounts totaling 2432500 shares;
involving margin business (if
Huang Xuelin holds629902 shares through ordinary accounts 1250601 shares through
applicable) (see note 4)
credit securities accounts totaling 1880503 shares;
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
agreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no
buy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: Foreign-funds controlling
Type of controlling shareholders: legal person
Legal
Controlling shareholders person/person in Date of foundation Organization code Main operation business
charge of the unit
Production sales of
computers TV set
display other hardware
and computer software;
development of internal
91420114711954601 data communication
Wuhan Zhongheng Group Li Zhongqiu 1996-03-21
W network building of
packing materials and
light weight building
material for packaging;
management of exports
business for the own
66SHENZHEN ZHONGHENG HUAFA CO. LTD.
products and
technologies for the
Company and member
enterprise; management
of export business on raw
material apparatus and
instrument machinery
equipment spare parts
and technologies (not
including goods and
technologies that import
and export are national
restricted or prohibited );
dry clean and steam iron
service; copy & print;
business information
consulting; house
tenancy; property
management; wholesale
and retails of the
hardware metal products
plastic products audio
electronic products
electronic equipment
textile toys clothing &
shoes luggage bedding
article general
merchandise curtain
household appliances and
building materials;
development of
real-estate and sales of
commercial housings
(projects with special
provision of the state can
be operation after
approval)
Equity of other
domestic/oversea listed
company control by
Not applicable
controlling shareholder as
well as stock-joint in report
period
Changes of controlling shareholders in reporting period
67SHENZHEN ZHONGHENG HUAFA CO. LTD.
□ Applicable √ Not applicable
The Company had no changes of controlling shareholders in reporting period
3. Actual controller and persons acting in concert
Nature of actual controller: Overseas nature person
Type of actual controller: Natural person
Enjoy the residence rights in the other
Actual controller’s name Relationship Nationality
country or area (Y/N)
Li Zhongqiu
Li Zhongqiu Hong Kong N
himself
Person acting in
concert (including
Li Li agreement P.R.C N
relatives share the
same controlling)
Main occupation in position Chairman and General Manager
Listed companies in and out of
China that controlled in last 10 The Company
years
Changes of actual controller in reporting period
□ Applicable √ Not applicable
No changes of actual controllers for the Company in reporting period.Property right and controlling relationship between the actual controller and the Company is as follow
Li Zhongqiu Li Li (Son of Li Zhongqiu)
51%49%
Wuhan Zhongheng New Science & Technology Industrial Group Co. Ltd
42.21%
Shenzhen Zhongheng Huafa Co. Ltd.Actual controller controlling the Company by entrust or other assets management
□ Applicable √ Not applicable
68SHENZHEN ZHONGHENG HUAFA CO. LTD.
4. The total number of shares pledged by controlling shareholders or the first majority shareholder and its
persons acting in concert accounts for 80% of the shares held by them
√Applicable □ Not applicable
Whether it
Total amount Whether
affects the
of stock there is a risk
Source of stability of
Type of pledge Repayment of debt
Specific Use repayment the control of
Name shareholder financing (10 period service or
funds the
thousand liquidation
company(Y/
yuan) (Y/N)
N)
Wuhan Replacement
Controlling
Zhongheng 108000 of loans and own funds N N
shareholder
Group replenishment
5. Particulars about other legal person shareholders with over 10% shares held
□ Applicable √ Not applicable
6. Limitation and reducing the holdings of shares of controlling shareholders actual controllers
restructuring side and other commitment subjects
□ Applicable √ Not applicable
IV. The specific implementation of shares buy-back during the reporting period
Implementation progress of shares buy-back
□ Applicable √ Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable √ Not applicable
69SHENZHEN ZHONGHENG HUAFA CO. LTD.
Section VIII. Preferred Stock
□ Applicable √Not applicable
The Company had no preferred stock in the Period.
70SHENZHEN ZHONGHENG HUAFA CO. LTD.
Section IX. Corporate Bonds
□ Applicable √ Not applicable
71SHENZHEN ZHONGHENG HUAFA CO. LTD.
Section X. Financial Report
I. Audit report
Type of audit opinion Standard unqualified opinion
Signing date of audit report 2022-04-23
Name of audit institute WUYIGE Certified Public Accountants LLP
Document serial of audit report Da Xin Shen Zi[2022] No.: 5-00018
Name of CPA Fan Zhang Yang Ting
Text of Audit report
To all shareholders of SHENZHEN ZHONGHENG HUAFA CO. LTD.:
I. Auditing opinions
We have audited the financial statement under the name of SHENZHEN ZHONGHENG HUAFA CO. LTD.(hereinafter referred to as the Company) including the consolidated and parent Company’s balance sheet of 31
December 2021 and profit statement and cash flow statement and statement on changes of shareholders’ equity
for the year ended and notes to the financial statements for the year ended.In our opinion the Company’s financial statements have been prepared in accordance with the Enterprises
Accounting Standards and Enterprises Accounting System and they fairly present the financial status of the
Company and of its parent company as of 31 December 2021 and its operation results and cash flows for the year
ended.II. Basis of opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Ourresponsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of theFinancial Statements” section of the auditor’s report. We are independent of the Company in accordance with the
Certified Public Accountants of China’s Code of Ethics for Professional Accountants and we have fulfilled our
other ethical responsibilities in accordance with the Code.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.III. Key audit matters
Key audit matters are those matters that in our professional judgment were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on
these matters.
72SHENZHEN ZHONGHENG HUAFA CO. LTD.
(i) Revenue recognition
1. Description of the matter
As stated in Note V (34) to the consolidated statement of your company the main business income from display and
injection molded foam of 2021 recognized by your company was RMB 637255400 accounting for 83.23% of
operating income. The revenue generated from the sale of products is recognized when the control of the product
has been transferred to the customer for domestic sales the income is confirmed by the other party’s receipt of the
product for export sales the income is confirmed by the relevant customs declaration documents when the
product has been shipped and the declaration formalities have been completed.Since income is one of your company’s key performance indicators in order to prevent the inherent risks of
manipulating the time point of income recognition for achieving specific goals or expectations we identify the
authenticity of income recognition for displays and injection molded foam as key audit items.
2. Audit response
(1) We understand evaluate and test the design and implementation of key internal controls related to the revenue
cycle and test the effectiveness of internal controls;
(2) Select samples to inspect the sales contract or order check the invoice outbound order receipt customs
declaration and freight bill of lading identify the contract terms and conditions related to the risks and reward
transfer of the ownership of the goods and evaluate whether the time point of revenue recognition meets the
requirements of Accounting Standards for Business Enterprises
(3) Enquire the business information of major customers to identify whether there is related relationship; conduct
terminal sales penetrating inspections on related transactions; check the rationality and fairness of the related
transactions;
(4) For the income transactions recorded before and after the balance sheet date select samples check the
outbound order receipt logistics records bills of lading and other supporting documents to assess whether the
income is recorded in the appropriate accounting period;
(5) Send correspondence to significant customers to confirm the amount of current sales revenue and account
receivable balance and maintain controls over the correspondence during the sending process.(ii) Related transaction
1. Description of the matter
As stated in Note VIII (4) to the consolidated statement of your company your company purchased a total of 179
million yuan of materials and finished products from the related parties Hong Kong Yutian International
Investment Co. Ltd. and Wuhan Hengsheng Photoelectric Industry Co. Ltd. and sold a total of 146 million yuan
of goods to the related parties Hong Kong Yutian International Investment Co. Ltd. and Wuhan Hengsheng
Photoelectric Industry Co. Ltd. As the related transactions involve a large amount of money and for the same
related party at the same time there are sales and purchase business there is a risk of circular transactions we
73SHENZHEN ZHONGHENG HUAFA CO. LTD.
classify the related transaction as a key audit matter.
2. Audit response
(1) Understand evaluate and test the internal control of your company’s related relationships and related
transactions;
(2) Obtain the related party relationship table compiled by your company and conduct appropriate background
investigation to identify and verify related parties through Internet information inquiry;
(3) Obtain a list of related transactions of your company understand the commercial reasons of related
transactions check related contracts or agreements invoices customs declarations etc. of related transactions
and conduct letter confirmation for the accrual and balance of major related transactions to verify whether the
accounting treatment is appropriate;
(4) Understand the authorization and approval procedures for related transactions of your company check the
procurement and sales vouchers to third parties compare the purchase and sales prices of related parties and
non-related parties and verify whether the related transactions are fair;
(5) Obtain the related party’s final procurement and sales lists to the third party provided by your company check
the relevant contract agreements and bank slip of the procurement and sales of the related party to the third party
and verify the authenticity of the transaction and whether it constitutes a transaction cycle.(iii) Material arbitration
1. Description of the matter
As stated in Note XI (ii) to the consolidated statement on August 16 2017 the South China International
Economic and Trade Arbitration Commission made a ruling of HNGZSC [2017] No. D376 (hereinafter referred to
as Vanke Arbitration case) ruled that your company and Wuhan Zhongheng had to pay a total of 234 million yuan
of liquidated damages and other cost.Your company believed that there were problems in the arbitration procedure and the determination of the
so-called breach of contract in the Vanke arbitration case and the finding damaged the legitimate rights and
interests of the company. Your company believed that the liability for breach of contract in the Vanke arbitration
case should be fully borne by Wuhan Zhongheng Group and Wuhan Zhongheng Group undertook to fully bear all
arbitration losses. In case of advance payment due to the execution of the case the company would immediately
request Wuhan Zhongheng Group to fulfill its commitment and eliminate the impact. Your company and Wuhan
Zhongheng Group received an enforcement ruling (Document No. (2018) Yue 03 Zhi No. 1870-5) in 2020 and
the relevant house property in the name of the person to be enforced could not be disposed of due to objections
from person outside the case and the person outside the case applied for not enforcing the arbitration award to
Shenzhen Intermediate People’s Court the enforcement procedure was terminated. If the “non-enforcement”
proposed by the person outside the case is rejected in accordance with the law Shenzhen Vanke can continue to
apply to the Shenzhen Intermediate People’s Court for resumption of enforcement.
74SHENZHEN ZHONGHENG HUAFA CO. LTD.
As the Vanke arbitration case has not been completed and there is uncertainty in the division of responsibilities
for the breach of contract within the defaulting entity as well as the possibility of benefit transfer of Wuhan
Zhongheng Group the management needs to make significant judgments and estimates on whether the matter is
recognized as an estimated liability or current profit and loss so we have identified this significant arbitration
matter as a key audit matter.
2. Audit response
(1) Understand the company’s policies and procedures for determining major issues by conducting inspections
consulting with management and corporate legal counsel;
(2) Collect your company’s asset replacement contracts asset replacement and related transaction announcements
and old contracts cooperation agreement between your company and Wuhan Zhongheng Group various rulings
and enforcement notices related to the case counsel's legal opinion and other documents and materials and
understand the supporting evidence for the management of your company to make judgments on the important
matters;
(3) Engage legal experts to make independent judgments on the matter and make independent judgments on legal
special opinions issued by legal experts;
(4) Sending a communication letter to company’s legal counsel to get an update on the progress of major litigation
cases and determine if there is a material impact on the company’s financial statements;
(5) Check whether the major arbitration matter is sufficiently and properly disclosed in the financial report.
IV. Other information
The management of the Company (the “Management”) is responsible for other information which includes the
information covered in the Company’s 2021 annual report excluding the financial statement and our audit report.The audit opinion issued by us for the financial statement has not covered other information for which we do not
issue any form of assurance opinions.Considering our audit on financial statements we are liable to read other information during which we shall
consider whether other information differs materially from the financial statements or that we understand during
our audit or whether there is any material misstatement.Based on the works executed by us we should report the fact if we find any material misstatement in other
information. In this regards we have nothing to report.V. Responsibilities of management and those charged with governance for the financial statements
The management is responsible for the preparation of the financial statements in accordance with the Accounting
Standards for Enterprise to secure a fair presentation and for the design establishment and maintenance of the
internal control necessary to enable the preparation of financial statements that are free from material
misstatement whether due to fraud or error.
75SHENZHEN ZHONGHENG HUAFA CO. LTD.
In preparing the financial statements the management is responsible for assessing the Company’s ability to
continue as a going concern disclosing matters (if applicable) related to going concern and using the going
concern assumption unless the management either intends to liquidate the Company or to cease operations or has
no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting process.VI. Responsibilities of the auditor for the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement whether due to fraud or error and to issue an audit report that includes our audit opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if individually or in the aggregate they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.As part of an audit in accordance with the CAS we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error
design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and
appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions
misrepresentations or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern assumption and based on the
audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists we are required by the CAS to draw users’ attention in audit report to the related disclosures in
the financial statements or if such disclosures are inadequate to modify audit opinion. Our conclusions are based
on the information obtained up to the date of audit report. However future events or conditions may cause the
Company to cease to continue as a going concern.
(5) Evaluate the overall presentation structure and content of the financial statements and whether the financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express audit opinion on the financial statements. We are responsible for the
direction supervision and performance of the group audit. We remain solely responsible for audit opinion.
76SHENZHEN ZHONGHENG HUAFA CO. LTD.
We communicate with those charged with governance regarding among other matters the planned scope and
timing of the audit and significant audit findings including any significant deficiencies in internal control that we
identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence and where applicable related safeguard measures.From the matters communicated with those charged with governance we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in the auditor’s report unless law or regulation precludes public disclosure
about the matter or when in extremely rare circumstances we determine that a matter should not be
communicated in the auditor’s report because of the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.WUYIGE Certified Public Accountants LLP Chinese CPA：Cuiling Yao（Project Partner）
China · Beijing Chinese CPA：Ting Yang
II. Financial Statement
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated balance sheet
Prepared by SHENZHEN ZHONGHENG HUAFA CO. LTD.Unit: RMB/CNY
Item December 31 2021 December 31 2020
Current assets:
Monetary funds 34426043.11 60968053.58
Settlement provisions
Capital lent
Trading financial assets
Derivative financial assets
Note receivable 105922317.60 20240464.79
Account receivable 128675327.97 128063911.79
Receivable financing 500000.00 10057385.11
Accounts paid in advance 7996570.95 39643255.11
Insurance receivable
77SHENZHEN ZHONGHENG HUAFA CO. LTD.
Reinsurance receivables
Contract reserve of reinsurance
receivable
Other account receivable 4520412.70 4466949.96
Including: Interest receivable
Dividend receivable
Buying back the sale of financial
assets
Inventories 90585670.27 70166013.49
Contractual assets
Assets held for sale
Non-current asset due within one
year
Other current assets 3732033.86 4255643.19
Total current assets 376358376.46 337861677.02
Non-current assets:
Loans and payments on behalf
Debt investment
Other debt investment
Long-term account receivable
Long-term equity investment
Investment in other equity
instrument
Other non-current financial
assets
Investment real estate 46191777.80 47224662.27
Fixed assets 187889261.50 193605444.53
Construction in progress 740000.00 740000.00
Productive biological asset
Oil and gas asset
Right-of-use assets 209298.72
Intangible assets 39171573.09 40820657.80
Expense on Research and
Development
Goodwill
Long-term expenses to be 1691257.89 77445.31
78SHENZHEN ZHONGHENG HUAFA CO. LTD.
apportioned
Deferred income tax asset 7681680.11 7383734.13
Other non-current asset 66000.00
Total non-current asset 283574849.11 289917944.04
Total assets 659933225.57 627779621.06
Current liabilities:
Short-term loans 26480857.00 12527808.00
Loan from central bank
Capital borrowed
Trading financial liability
Derivative financial liability
Note payable 21554981.30 37416381.20
Account payable 88529478.96 98318239.88
Accounts received in advance
Contractual liability 736355.70 287140.66
Selling financial asset of
repurchase
Absorbing deposit and interbank
deposit
Security trading of agency
Security sales of agency
Wage payable 3844381.07 5737366.59
Taxes payable 14657117.69 14204642.62
Other account payable 30448913.14 27608281.01
Including: Interest payable 113080.26 26335.66
Dividend payable
Commission charge and
commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due
61104400.6112000000.00
within one year
Other current liabilities 64644280.61 18322972.81
Total current liabilities 312000766.08 226422832.77
Non-current liabilities:
79SHENZHEN ZHONGHENG HUAFA CO. LTD.
Insurance contract reserve
Long-term loans 61000000.00
Bonds payable
Including: Preferred stock
Perpetual capital
securities
Lease liability 115101.00
Long-term account payable
Long-term wages payable
Accrual liability 801159.18 64411.00
Deferred income 3565560.00 4043640.00
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 4481820.18 65108051.00
Total liabilities 316482586.26 291530883.77
Owner’s equity:
Share capital 283161227.00 283161227.00
Other equity instrument
Including: Preferred stock
Perpetual capital
securities
Capital public reserve 146577771.50 146577771.50
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus public reserve 77391593.25 77391593.25
Provision of general risk
Retained profit -163679952.44 -170881854.46
Total owner’ s equity attributable to
343450639.31336248737.29
parent company
Minority interests
Total owner’ s equity 343450639.31 336248737.29
Total liabilities and owner’ s equity 659933225.57 627779621.06
Legal Representative: Li Zhongqiu
80SHENZHEN ZHONGHENG HUAFA CO. LTD.
Person in charge of accounting works: Chen Zhigang
Person in charge of accounting institute: Chuai Guoxu
2. Balance Sheet of Parent Company
Unit: RMB/CNY
Item December 31 2021 December 31 2020
Current assets:
Monetary funds 619099.39 966379.17
Trading financial assets
Derivative financial assets
Note receivable
Account receivable
Receivable financing
Accounts paid in advance 52129.33 73685.03
Other account receivable 92468697.71 93922057.92
Including: Interest receivable
Dividend
receivable
Inventories 14806.50 14806.50
Contractual assets
Assets held for sale
Non-current assets maturing
within one year
Other current assets
Total current assets 93154732.93 94976928.62
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments 186618400.00 186618400.00
Investment in other equity
instrument
Other non-current financial
assets
Investment real estate 23444941.60 23957898.42
81SHENZHEN ZHONGHENG HUAFA CO. LTD.
Fixed assets 96839357.63 96674476.52
Construction in progress 740000.00 740000.00
Productive biological assets
Oil and natural gas assets
Right-of-use assets
Intangible assets 4263817.80 4408763.52
Research and development costs
Goodwill
Long-term deferred expenses 969444.45
Deferred income tax assets 7555266.74 7443826.11
Other non-current assets
Total non-current assets 320431228.22 319843364.57
Total assets 413585961.15 414820293.19
Current liabilities:
Short-term borrowings
Trading financial liability
Derivative financial liability
Notes payable
Account payable 10745840.16 10745840.16
Accounts received in advance
Contractual liability 263321.38 79195.32
Wage payable 1209937.19 1476601.12
Taxes payable 9236248.86 7892878.33
Other accounts payable 21695466.51 21304919.43
Including: Interest payable
Dividend payable
Liability held for sale
Non-current liabilities due
61000000.0012000000.00
within one year
Other current liabilities 13859.02 3959.77
Total current liabilities 104164673.12 53503394.13
Non-current liabilities:
Long-term loans 61000000.00
Bonds payable
82SHENZHEN ZHONGHENG HUAFA CO. LTD.
Including: Preferred stock
Perpetual capital
securities
Lease liability
Long-term account payable
Long term employee
compensation payable
Accrued liabilities 801159.18 64411.00
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 801159.18 61064411.00
Total liabilities 104965832.30 114567805.13
Owners’ equity:
Share capital 283161227.00 283161227.00
Other equity instrument
Including: Preferred stock
Perpetual capital
securities
Capital public reserve 146587271.50 146587271.50
Less: Inventory shares
Other comprehensive income
Special reserve
Surplus reserve 77391593.25 77391593.25
Retained profit -198519962.90 -206887603.69
Total owner’s equity 308620128.85 300252488.06
Total liabilities and owner’s equity 413585961.15 414820293.19
3. Consolidated Profit Statement
Unit: RMB/CNY
Item 2021 2020
I. Total operating income 765611248.70 691742269.12
Including: Operating income 765611248.70 691742269.12
Interest income
Insurance gained
83SHENZHEN ZHONGHENG HUAFA CO. LTD.
Commission charge and
commission income
II. Total operating cost 754717751.51 686630062.93
Including: Operating cost 682838898.18 613228694.51
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expense of
compensation
Net amount of withdrawal
of insurance contract reserve
Bonus expense of
guarantee slip
Reinsurance expense
Tax and extras 3363183.87 3575851.98
Sales expense 8440486.05 15417760.60
Administrative expense 41484831.93 34481219.11
R&D expense 10794872.74 7285833.84
Financial expense 7795478.74 12640702.89
Including: Interest
6477126.26778119.98
expenses
Interest
1866.93813102.51
income
Add: Other income 1097733.35 2264506.66
Investment income (Loss is
290069.30165317.73
listed with “-”)
Including: Investment
income on affiliated company and joint
venture
The termination of
income recognition for financial assets
measured by amortized cost
Exchange income (Loss is
listed with “-”)
Net exposure hedging
income (Loss is listed with “-”)
84SHENZHEN ZHONGHENG HUAFA CO. LTD.
Income from change of fair
value (Loss is listed with “-”)
Loss of credit impairment
261857.68207383.73
(Loss is listed with “-”)
Losses of devaluation of
-1509178.57170241.33
asset (Loss is listed with “-”)
Income from assets disposal
6442.36817533.49
(Loss is listed with “-”)
III. Operating profit (Loss is listed with
11040421.318737189.13
“-”)
Add: Non-operating income 1358669.18 488657.30
Less: Non-operating expense 448454.42 408809.90
IV. Total profit (Loss is listed with “-”) 11950636.07 8817036.53
Less: Income tax expense 4748734.05 1986849.13
V. Net profit (Net loss is listed with
7201902.026830187.40
“-”)
(i) Classify by business continuity
1.continuous operating net profit
7201902.026830187.40(net loss listed with ‘-”)
2.termination of net profit (netloss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to
7201902.026830187.40
owner’s of parent company
2.Minority shareholders’ gains
and losses
VI. Net after-tax of other
comprehensive income
Net after-tax of other comprehensive
income attributable to owners of parent
company
(I) Other comprehensive income
items which will not be reclassified
subsequently to profit of loss
1.Changes of the defined
benefit plans that re-measured
2.Other comprehensive
income under equity method that
85SHENZHEN ZHONGHENG HUAFA CO. LTD.
cannot be transfer to gain/loss
3.Change of fair value of
investment in other equity instrument
4.Fair value change of
enterprise's credit risk
5. Other
(ii) Other comprehensive income
items which will be reclassified
subsequently to profit or loss
1.Other comprehensive
income under equity method that can
transfer to gain/loss
2.Change of fair value of
other debt investment
3.Amount of financial
assets re-classify to other
comprehensive income
4.Credit impairment
provision for other debt investment
5.Cash flow hedging
reserve
6.Translation differences
arising on translation of foreign
currency financial statements
7.Other
Net after-tax of other comprehensive
income attributable to minority
shareholders
VII. Total comprehensive income 7201902.02 6830187.40
Total comprehensive income
attributable to owners of parent 7201902.02 6830187.40
Company
Total comprehensive income
attributable to minority shareholders
VIII. Earnings per share:
(i) Basic earnings per share 0.0254 0.0241
(ii) Diluted earnings per share 0.0254 0.0241
As for the enterprise combined under the same control net profit of -1250048.49 Yuan achieved by the merged party before
combination while 2326929.25 Yuan achieved last period.
86SHENZHEN ZHONGHENG HUAFA CO. LTD.
Legal Representative: Li Zhongqiu
Person in charge of accounting works: Chen Zhigang
Person in charge of accounting institute: Chuai Guoxu
4. Profit Statement of Parent Company
Unit: RMB/CNY
Item 2021 2020
I. Operating income 47591806.18 37262114.01
Less: Operating cost 9388211.49 6784029.31
Taxes and surcharge 1208531.80 935273.64
Sales expenses
Administration expenses 18214671.25 17981589.32
R&D expenses
Financial expenses 6503457.33 7719720.37
Including: Interest
6501766.887717101.68
expenses
Interest
1720.0310145.09
income
Add: Other income 3306.96 5145.25
Investment income (Loss is
listed with “-”)
Including: Investment
income on affiliated Company and
joint venture
The termination of
income recognition for financial
assets measured by amortized cost
(Loss is listed with “-”)
Net exposure hedging
income (Loss is listed with “-”)
Changing income of fair
value (Loss is listed with “-”)
Loss of credit impairment
290985.67-304719.05
(Loss is listed with “-”)
Losses of devaluation of
asset (Loss is listed with “-”)
87SHENZHEN ZHONGHENG HUAFA CO. LTD.
Income on disposal of
21059.60910907.16
assets (Loss is listed with “-”)
II. Operating profit (Loss is listed
12592286.544452834.73
with “-”)
Add: Non-operating income 456991.35 89455.80
Less: Non-operating expense 9745.54 433.38
III. Total Profit (Loss is listed with
13039532.354541857.15
“-”)
Less: Income tax 4671891.56 2565974.30
IV. Net profit (Net loss is listed with
8367640.791975882.85
“-”)
(i) continuous operating net
8367640.791975882.85profit (net loss listed with ‘-”)
(ii) termination of net profit (netloss listed with ‘-”)
V. Net after-tax of other
comprehensive income
(i) Other comprehensive income
items which will not be reclassified
subsequently to profit of loss
1.Changes of the defined
benefit plans that re-measured
2.Other comprehensive
income under equity method that
cannot be transfer to gain/loss
3.Change of fair value of
investment in other equity instrument
4.Fair value change of
enterprise's credit risk
5. Other
(ii) Other comprehensive income
items which will be reclassified
subsequently to profit or loss
1.Other comprehensive
income under equity method that can
transfer to gain/loss
2.Change of fair value of
other debt investment
88SHENZHEN ZHONGHENG HUAFA CO. LTD.
3.Amount of financial
assets re-classify to other
comprehensive income
4.Credit impairment
provision for other debt investment
5.Cash flow hedging
reserve
6.Translation differences
arising on translation of foreign
currency financial statements
7.Other
VI. Total comprehensive income 8367640.79 1975882.85
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share
5. Consolidated Cash Flow Statement
Unit: RMB/CNY
Item 2021 2020
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor 530267973.64 570954717.52
services
Net increase of customer deposit
and interbank deposit
Net increase of loan from central
bank
Net increase of capital borrowed
from other financial institution
Cash received from original
insurance contract fee
Net cash received from
reinsurance business
Net increase of insured savings
and investment
Cash received from interest
commission charge and commission
89SHENZHEN ZHONGHENG HUAFA CO. LTD.
Net increase of capital borrowed
Net increase of returned business
capital
Net cash received by agents in
sale and purchase of securities
Write-back of tax received 5215945.03 126477.24
Other cash received concerning
3026659.899550590.82
operating activities
Subtotal of cash inflow arising from
538510578.56580631785.58
operating activities
Cash paid for purchasing
commodities and receiving labor 419900895.46 416696575.23
service
Net increase of customer loans
and advances
Net increase of deposits in
central bank and interbank
Cash paid for original insurance
contract compensation
Net increase of capital lent
Cash paid for interest
commission charge and commission
Cash paid for bonus of guarantee
slip
Cash paid to/for staff and
73932359.2458223463.86
workers
Taxes paid 21218237.32 11877060.89
Other cash paid concerning
35782846.6134115416.00
operating activities
Subtotal of cash outflow arising from
550834338.63520912515.98
operating activities
Net cash flows arising from operating
-12323760.0759719269.60
activities
II. Cash flows arising from investing
activities:
Cash received from recovering
investment
Cash received from investment 126644.04 147502.66
90SHENZHEN ZHONGHENG HUAFA CO. LTD.
income
Net cash received from disposal
of fixed intangible and other 135950.00 1803913.05
long-term assets
Net cash received from disposal
of subsidiaries and other units
Other cash received concerning
55000000.00
investing activities
Subtotal of cash inflow from
262594.0456951415.71
investing activities
Cash paid for purchasing fixed
6583893.475471921.66
intangible and other long-term assets
Cash paid for investment
Net increase of mortgaged loans
Net cash received from
subsidiaries and other units obtained
Other cash paid concerning
55000000.00
investing activities
Subtotal of cash outflow from
6583893.4760471921.66
investing activities
Net cash flows arising from investing
-6321299.43-3520505.95
activities
III. Cash flows arising from financing
activities:
Cash received from absorbing
investment
Including: Cash received from
absorbing minority shareholders’
investment by subsidiaries
Cash received from loans 101493342.00 34380634.80
Other cash received concerning
30688367.17
financing activities
Subtotal of cash inflow from
132181709.1734380634.80
financing activities
Cash paid for settling debts 98974257.00 56765100.20
Cash paid for dividend and
7460406.898639896.64
profit distributing or interest paying
Including: Dividend and profit
91SHENZHEN ZHONGHENG HUAFA CO. LTD.
of minority shareholder paid by
subsidiaries
Other cash paid concerning
1657499.4330688367.17
financing activities
Subtotal of cash outflow from
108092163.3296093364.01
financing activities
Net cash flows arising from financing
24089545.85-61712729.21
activities
IV. Influence on cash and cash
equivalents due to fluctuation in -2692912.78 -1080106.72
exchange rate
V. Net increase of cash and cash
2751573.57-6594072.28
equivalents
Add: Balance of cash and cash
30050989.3336645061.61
equivalents at the period -begin
VI. Balance of cash and cash
32802562.9030050989.33
equivalents at the period -end
6. Cash Flow Statement of Parent Company
Unit: RMB/CNY
Item 2021 2020
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor 54490441.77 28455496.04
services
Write-back of tax received 4854.01
Other cash received concerning
22811153.2912618059.59
operating activities
Subtotal of cash inflow arising from
77301595.0641078409.64
operating activities
Cash paid for purchasing
commodities and receiving labor 8332741.41 1580720.38
service
Cash paid to/for staff and
3430294.591943628.52
workers
Taxes paid 7053272.79 7717101.68
Other cash paid concerning 38665568.58 10145.09
92SHENZHEN ZHONGHENG HUAFA CO. LTD.
operating activities
Subtotal of cash outflow arising from
57481877.3711251595.67
operating activities
Net cash flows arising from operating
19819717.6929826813.97
activities
II. Cash flows arising from investing
activities:
Cash received from recovering
investment
Cash received from investment
income
Net cash received from disposal
of fixed intangible and other 100000.00 1590000.00
long-term assets
Net cash received from disposal
of subsidiaries and other units
Other cash received concerning
investing activities
Subtotal of cash inflow from
100000.001590000.00
investing activities
Cash paid for purchasing fixed
1626602.15
intangible and other long-term assets
Cash paid for investment
Net cash received from
subsidiaries and other units obtained
Other cash paid concerning
investing activities
Subtotal of cash outflow from
1626602.15
investing activities
Net cash flows arising from investing
-1526602.151590000.00
activities
III. Cash flows arising from financing
activities:
Cash received from absorbing
investment
Cash received from loans 1000000.00
Other cash received concerning
financing activities
93SHENZHEN ZHONGHENG HUAFA CO. LTD.
Subtotal of cash inflow from
1000000.00
financing activities
Cash paid for settling debts 12000000.00 12000000.00
Cash paid for dividend and
6503486.917717101.68
profit distributing or interest paying
Other cash paid concerning
financing activities
Subtotal of cash outflow from
18503486.9119717101.68
financing activities
Net cash flows arising from financing
-18503486.91-18717101.68
activities
IV. Influence on cash and cash
equivalents due to fluctuation in -779.61 -2451.00
exchange rate
V. Net increase of cash and cash
-211150.9812697261.29
equivalents
Add: Balance of cash and cash
14743404.732046143.44
equivalents at the period -begin
VI. Balance of cash and cash
14532253.7514743404.73
equivalents at the period -end
7. Statement of Changes in Owners’ Equity (Consolidated)
Current period
Unit: RMB/CNY
2021
Owners’ equity attributable to the parent Company
Other
equity
Othe
instrument Less Tota
r Prov
Per : Reas Min l
Item Sha Capi com Surp ision Reta
pet Inve onab ority own
re Pre tal preh lus of ined Othe Subt
ual ntor le inter ers’
cap fer reser ensi reser gene profi r otal
cap Ot y reser ests equit
ital red ve ve ve ral t
ital her shar ve y
sto inco risk
sec es
ck me
urit
ies
I. The ending 283 146 773 -170 336 336
balance of the 16 577 915 881 248 248
94SHENZHEN ZHONGHENG HUAFA CO. LTD.
previous year 12 771. 93.2 854. 737. 737.
27.505462929
00
Add: Changes
of accounting
policy
Error
correction of
the last period
Enterprise
combine
under the
same control
Other
283
II. The 146 773 -170 336 336
16
beginning 577 915 881 248 248
12
balance of the 771. 93.2 854. 737. 737.
27.
current year 50 5 46 29 29
00
III. Increase/
Decrease in
720720720
the period
190190190
(Decrease is
2.022.022.02
listed with
“-”)
(i) Total 720 720 720
comprehensiv 190 190 190
e income 2.02 2.02 2.02
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
95SHENZHEN ZHONGHENG HUAFA CO. LTD.
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other
(iii) Profit
distribution
1. Withdrawal
of surplus
reserves
2. Withdrawal
of general
risk
provisions
3.
Distribution
for owners (or
shareholders)
4. Other
(iv) Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus
reserve
4. Carry-over
96SHENZHEN ZHONGHENG HUAFA CO. LTD.
retained
earnings from
the defined
benefit plans
5. Carry-over
retained
earnings from
other
comprehensiv
e income
6. Other
(v)
Reasonable
reserve
1. Withdrawal
in the report
period
2. Usage in
the report
period
(vi) Others
283
146773-163343343
IV. Balance at 16
577915679450450
the end of the 12
771.93.2952.639.639.
period 27.
505443131
00
Last period
Unit: RMB/CNY
2020
Owners’ equity attributable to the parent Company
Other
equity
Othe
instrument Less
r Prov Total
Pe : Reas Mino
Item Sha Capi com Surp ision Reta
owne
Pr rpe Inve onab
rity
re tal preh lus of ined Othe Subt rs’
efe ntor le interetua
cap reser ensi reser gene profi r otal equit
rre l Oth y reser sts
ital ve ve ve ral t y
d ca er shar ve
inco risk
sto pit es
me
ck al
sec
97SHENZHEN ZHONGHENG HUAFA CO. LTD.
uri
tie
s
283
I. The ending 146 773 -177 329
163294
balance of 587 915 712 428
122804
the previous 271. 93.2 041. 049.
27.9.89
year 50 5 86 89
00
Add:
Changes of
accounting
policy
Error
correction of
the last
period
Enterprise
combine
under the
same control
Other
II. The 283
146773-177329
beginning 16 3294
587915712428
balance of 12 2804
271.93.2041.049.
the current 27. 9.89
5058689
year 00
III. Increase/
Decrease in
-956836826820
the period
00.0018068687.
(Decrease is
07.407.4040
listed with
“-”)
(i) Total 683 683 6830
comprehensi 018 018 187.ve income 7.40 7.40 40
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
98SHENZHEN ZHONGHENG HUAFA CO. LTD.
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners
equity with
share-based
payment
4. Other
(iii) Profit
distribution
1.
Withdrawal
of surplus
reserves
2.
Withdrawal
of general
risk
provisions
3.
Distribution
for owners
(or
shareholders)
4. Other
(iv) Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed to
capital (share
capital)
99SHENZHEN ZHONGHENG HUAFA CO. LTD.
2. Surplus
reserves
conversed to
capital (share
capital)
3.
Remedying
loss with
surplus
reserve
4. Carry-over
retained
earnings
from the
defined
benefit plans
5. Carry-over
retained
earnings
from other
comprehensi
ve income
6. Other
(v)
Reasonable
reserve
1.
Withdrawal
in the report
period
2. Usage in
the report
period
-95-95
-950
(vi) Others 00.0 00.0
0.00
00
283
146773-170336
IV. Balance 16 3362
577915881248
at the end of 12 4873
771.93.2854.737.
the period 27. 7.29
5054629
00
100SHENZHEN ZHONGHENG HUAFA CO. LTD.
8. Statement of Changes in Owners’ Equity (Parent Company)
Current period
Unit: RMB/CNY
2021
Other
equity instrument
Other
Perp Capita Less:
Share compr Reaso Surplu Retai
Item Total etual l Invent ehensi nable s ned
capit Prefe Other owners’
capit Othe reserv ory ve reserv reserv profi
al rred equity
al incom e e t r e shares
stock e
secur
ities
-206
I. The ending 2831 14658 77391
887300252
balance of the 6122 7271. 593.2
603.488.06
previous year 7.00 50 5
69
Add:
Changes of
accounting
policy
Error
correction of
the last period
Other
II. The -206
28311465877391
beginning 887 300252
61227271.593.2
balance of the 603. 488.06
7.00505
current year 69
III. Increase/
Decrease in 836
836764
the period 764
0.79
(Decrease is 0.79
listed with “-”)
(i) Total 836
836764
comprehensive 764
0.79
income 0.79
(ii) Owners’
devoted and
decreased
capital
101SHENZHEN ZHONGHENG HUAFA CO. LTD.
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other
(iii) Profit
distribution
1. Withdrawal
of surplus
reserves
2. Distribution
for owners (or
shareholders)
3. Other
(iv) Carrying
forward
internal
owners’ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
102SHENZHEN ZHONGHENG HUAFA CO. LTD.
surplus reserve
4. Carry-over
retained
earnings from
the defined
benefit plans
5. Carry-over
retained
earnings from
other
comprehensive
income
6. Other
(v) Reasonable
reserve
1. Withdrawal
in the report
period
2. Usage in the
report period
(vi) Others
-198
IV. Balance at 2831 14658 77391
519308620
the end of the 6122 7271. 593.2
962.128.85
period 7.00 50 5
90
Last period
Unit: RMB/CNY
2020
Other
equity instrument
Perp Other
Shar Capit Less:
Pref etual compr Surpl
Item Reason Total e al Invent ehensi us Retaine
erre capit able Other owners’
capit Othe reserv ory ve reserv d profit
d al reserve equity
al e shares incom e r
stoc secu e
k ritie
s
I. The ending 283 1465 7739 -20886
298276
balance of the 161 8727 1593 3486.5
605.21
previous year 227. 1.50 .25 4
103SHENZHEN ZHONGHENG HUAFA CO. LTD.
00
Add:
Changes of
accounting
policy
Error
correction of
the last
period
Other
II. The 283
14657739-20886
beginning 161 298276
872715933486.5
balance of the 227. 605.21
1.50.254
current year 00
III. Increase/
Decrease in
the period 19758 197588
(Decrease is 82.85 2.85
listed with
“-”)
(i) Total
19758197588
comprehensiv
82.852.85
e income
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
104SHENZHEN ZHONGHENG HUAFA CO. LTD.
payment
4. Other
(iii) Profit
distribution
1.
Withdrawal
of surplus
reserves
2.
Distribution
for owners
(or
shareholders)
3. Other
(iv) Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus
reserve
4. Carry-over
retained
earnings from
the defined
benefit plans
5. Carry-over
retained
earnings from
105SHENZHEN ZHONGHENG HUAFA CO. LTD.
other
comprehensiv
e income
6. Other
(v)
Reasonable
reserve
1.
Withdrawal
in the report
period
2. Usage in
the report
period
(vi) Others
283
IV. Balance at 1465 7739 -20688
161300252
the end of the 8727 1593 7603.6
227.488.06
period 1.50 .25 9
00
III. Company profile
(1)The registration place of the enterprise the form of organization and the headquarters address
Shenzhen Zhongheng HUAFA Company Limited (hereinafter referred to as Company or the Company)
established on 8 December 1981. Uniform social credit code 91440300618830372G.Registered place and head office of the Company: 411 Bldg. Huafa (N) Road Futian District Shenzhen
Legal representative: Li Zhongqiu
Registered capital: RMB 283161227.00
(2) The nature of the business and the main business activities.
The Company belongs to the computer telecommunication and manufacturing of other electronic equipment.Business scope: producing and sales of vary color TV set liquid crystal display LCD (operates in branch)
radio-recorder sound equipment electronic watch electronic game and computers the printed wiring board
precision injection parts light packaging material (operates in Wuhan) and hardware (including tool and mould)
for various electronic products and supporting parts plating and surface treatment and tin wire development and
operation of real estate (Shen Fang Di Zi No.: 7226760) and property management.
(3) Relevant party offering approval reporting of financial statements and date thereof
The financial statement has been deliberated and approved by BOD on April 23 2022. According to Article of
Association the statement shall be submitted for deliberation in shareholders general meeting.
106SHENZHEN ZHONGHENG HUAFA CO. LTD.
(4) Consolidate scope in the Period:
Subsidiaries including Shenzhen HUAFA Property Lease Management Co. Ltd (no annual inspection in 2011
and business license revoke on 1 April 2014) Shenzhen Zhongheng HUAFA Property Co. Ltd Wuhan Hengfa
Technology Co. Ltd. Shenzhen HUAFA Hengtian Co. Ltd. Shenzhen HUAFA Hengtai Co. Ltd and Rusi Co.Ltd. More of subsidiaries found in “Note VI. Equity in other subjects”.IV. Preparation basis of Financial Statements
1. Preparation basis
Base on the running continuously and actual transactions and events in line with the Accounting Standards for
Business Enterprise – Basic Standards and specific principle of accounting standards issued by the Ministry of
Finance (hereinafter collectively referred to as Accounting Standards for Business Enterprise) the Company
prepared and formulate the financial statement lies on the followed important accounting policy and estimation.
2. Going concern
The Company expects that the production and sales will be in a virtuous cycle within 12 months from the end of
he reporting period and there is no risk that affects the continued operations.V. Important accounting policy and estimation
Notes on specific accounting policies and accounting estimation:
The following disclosure has covered the specific accounting policies and accounting estimates formulated by the
Company according to the actual production and operation characteristics.
1. Declaration of obedience to Accounting Standards for Business Enterprise
The Financial Statements of the Company are up to requirements of Accounting Standards for Business Enterprise
st
and also a true and thorough reflection to the relevant information as the Company’s financial position dated 31
December 2021 and the operation results as well as cash flow for the year of 2021.
2. Accounting period
st st
The Company’s accounting year is Gregorian calendar year namely from 1 January to 31 December of every
year.
107SHENZHEN ZHONGHENG HUAFA CO. LTD.
3. Business cycle
The Company’s business cycle is one year (12 months) as a normal cycle and the business cycle is the
determining criterion for the liquidity of assets and liabilities of the Company.
4. Bookkeeping standard currency
The Renminbi (RMB) is taken as the book-keeping standard currency.
5. Accounting methods for consolidation of enterprises under the same control or otherwise
1. Consolidation of enterprises under the same control
Where the Company for long term equity investment arising from business combination under common control
satisfies the combination consideration by payment of cash transfer of non-cash assets or assumption of debt the
carrying value of the net assets of the acquire in combined financial statement of the ultimate controller shared by
the Company as at the combination date shall be deemed as the initial investment cost of such long term equity
investment. If the equity instrument issued by combining party are consider as the combination consideration
than the total value of the issuing shares are consider as the share capital. The difference between the initial cost of
long-term equity investment and book value of consideration (or total face value of the shares issued) paid capital
surplus adjusted; if the capital surplus not enough to written down than retained earning adjusted.
2. Business combination not under common control
As for business combination not under common control combination costs refer to the sum of the fair value of the
assets paid liabilities occurred or assumed as well as equity securities issued by the acquirer to obtain control over
the acquire as at the acquisition date. As for acquiree that obtained by consolidation not under the same control
the qualified confirmation of identified assets liability and contingency liabilities should calculated by fair value
on day of purchased. If the consolidation cost larger than the fair value amount of identified net assets from
acquiree’s the differences should be recognized as goodwill. If the consolidation cost less than the fair value
amount of identified net assets from acquiree’s the differences should reckoned into current non-operating
income.
6. Preparation methods for consolidated financial statements
6.1 Consolidation financial statement range
The Company includes all the subsidiaries (including the separate entities controlled by the Company) into
consolidated financial statement including companies controlled by the Company non-integral part of the
investees and structural main body.
108SHENZHEN ZHONGHENG HUAFA CO. LTD.
6.2 Centralize accounting policies balance sheet dates and accounting periods of parent and subsidiaries.
As for the inconsistency between the subsidiaries and the Company in the accounting policies and periods the
necessary adjustment is made on the subsidiaries’ financial statements in the preparation of the consolidated
financial statements according to the Company’s accounting policies and periods.
6.3 Offset of consolidated financial statement
The consolidated financial statements shall be prepared on the basis of the balance sheet of the parent company
and subsidiaries which offset the internal transactions incurred between the parent company and subsidiaries and
within subsidiaries. The owner’s equity of the subsidiaries not attributable to the parent company shall be
presented as minority equity under the owner’s equity item in the consolidated balance sheet. The long term equity
investment of the parent company held by the subsidiaries deemed as treasury stock of the corporate group as
well as the reduction of owners’ equity shall be presented as “Less: treasury stock” under the owners’ equity item
in the consolidated balance sheet.
6.4 Accounting for acquisition of subsidiary through combination
For subsidiaries acquired under enterprise merger involving enterprises under common control
the assets liabilities operating results and cash flows of the subsidiaries are included in the consolidated financial
statements from the beginning of the financial year in which the combination took place. When
preparing the consolidated financial statements for the subsidiaries acquired from business
combination not involving entities under common control the identifiable net assets of the subsidiaries are
adjusted on the basis of their fair values on the date of acquisition.
6.5 Accounting treatment of disposal subsidiaries
In the case of partial disposal of long-term equity investments in subsidiaries without loss of control in the
consolidated financial statements the difference between the disposal price and the net asset share corresponding
to the disposal of long-term equity investments and enjoying the subsidiaries’ continued calculation from the
purchase date or the merger date is used to adjust the capital reserve (capital premium or equity premium). If the
capital reserve is insufficient to offset the retained earnings are adjusted.If the control power of the investee is lost due to the disposal of part of the equity investment etc. when preparing
the consolidated financial statements the remaining equity shall be re-measured according to its fair value on the
date of loss of control. The sum of the consideration obtained from the disposal of equity and the fair value of the
remaining equity minus the difference between the share of the original subsidiary’s net assets that should be
continuously calculated from the purchase date or the merger date is included in the current investment income
when the control is lost and also offsets goodwill. Other comprehensive income related to the equity investment of
the original subsidiary is converted into current investment income when the control is lost.
109SHENZHEN ZHONGHENG HUAFA CO. LTD.
7. Classification of joint venture arrangement and accounting treatment of joint operation
N/A
8. Determination criteria of cash and cash equivalent
The cash recognized in the preparation of the cash flow statements is the Company’s storage cash and deposits
available for payment anytime. The cash equivalents recognized in the preparation of the cash flow statements
refers to the investment held by the Company with characteristic of short-term strong mobility easy transfer to
known sum cash and has slim risk from value changes.
9. Foreign currency exchange and the conversion of foreign currency statements
9.1 Foreign currency exchange
The approximate exchange rate of the spot exchange rate on transaction occurred should be used for standard
money conversion while foreign currency exchange occurred On the balance sheet day the monetary items are
converted on the current rate on the balance sheet day concerning the exchange differences between the spot
exchange rate on that date and initial confirmation or the sport exchange rate on previously balance sheet date
should reckoned in to current gains/losses except the capitalizing on exchange differences for foreign specific
loans which was reckoned into cost for capitalizing. The non-monetary items measured on the historic cost are
still measured by the original bookkeeping rate with the sum of the bookkeeping standard currency unchanged.Items of non-monetary foreign currency which was calculated by fair value should converted by spot exchange
rate on the confirmation day of fair value difference between the converted amount of bookkeeping currency and
original amount of bookkeeping currency was treated as changes of fair value (including exchange rate changed)
reckoned into current gains/losses or recognized as other consolidated income.
9.2 Conversion of foreign currency financial statements
Upon the conversion of the foreign currency financial statements of the controlling subsidiaries joint enterprises
and the affiliated enterprises on the bookkeeping standard currency different from the Company’s the accounting
check and preparation of the consolidated financial statements are made. Assets and liabilities items in the balance
sheet are converted on the current rate on the balance sheet day; owners’ equity items besides the “retained profit”
item the other items are converted on the actual rate. Items of revenue and expenses in profit statement should
converted by the approximate exchange rate of spot exchange rate on occurring date. The conversion difference of
the foreign currency financial statements is listed specifically in the owners’ equity in the balance sheet. If the
foreign cash flow determined by rational system method the approximate exchange rate of spot exchange rate on
occurring date should prevail. The cash influenced by the rate fluctuation is listed specifically in the cash flow
statement. As for the foreign operation the conversion difference of the foreign currency statement related to the
foreign operation is transferred in proportion into the disposal of the current loss/gain.
110SHENZHEN ZHONGHENG HUAFA CO. LTD.
10. Financial instrument
10.1 Category and recognition of financial instrument
Financial instrument is the contract that taken shape of the financial asses for an enterprise and of the financial
liability or equity instrument for other units.
(1) Financial assets
The Company classifies financial assets that meet the following conditions as financial assets measured at
amortized cost: * The Company’s business model for managing financial assets is to collect contractual cash
flows as its goal; * The contractual terms of the financial assets stipulate that the cash flow generated on a
specific date is only the payment of principal and interest based on the outstanding principal amount.The Company classifies financial assets that meet the following conditions as financial assets measured at fair
value and whose changes are included in other comprehensive income: * The Company’s business model for
managing financial assets is to collect contractual cash flows and sell the financial assets as its goal; * The
contractual terms of the financial assets stipulate that the cash flow generated on a specific date is only for the
payment of principal and interest based on the outstanding principal amount
For investment in non-trading equity instruments the Company may irrevocably designate it as a financial asset
measured at fair value and its changes included in other comprehensive income at initial recognition. The
designation is made on the basis of a single investment and the relevant investment meets the definition of equity
instruments from the perspective of the issuer.Except for financial assets classified as financial assets measured at amortized cost and financial assets measured
at fair value and whose changes are included in other comprehensive income the Company classifies the financial
assets as financial assets measured at fair value and whose changes are included in current profit or loss. At the
initial recognition if the accounting mismatch can be eliminated or reduced the Company can irrevocably
designate the financial asset as a financial asset measured at fair value and its changes are included in the current
profit and loss.When the Company changes the business model for managing financial assets it will reclassify all affected related
financial assets on the first day of the first reporting period after the business model has been changed and will
apply future applicable methods from the date of reclassification for relevant accounting treatment no retroactive
adjustments shall be made for previously recognized gains losses (including impairment losses or gains) or
interest.
(2) Financial liabilities
Financial liabilities are classified as financial liabilities measured at fair value and whose changes are included in
111SHENZHEN ZHONGHENG HUAFA CO. LTD.
the current profit or loss financial liabilities formed by the transfer of financial assets that does not meet the
conditions for derecognition or continues to be involved in the transferred financial assets and financial liabilities
measured at amortized cost at initial recognition. All financial liabilities are not reclassified.
10.2 Measurement of financial instruments
The initial recognition of the Company’s financial instruments is measured at fair value. For financial assets and
financial liabilities measured at fair value and whose changes are included in the current profit and loss the
related transaction costs are directly included in the current profit and loss; for other types of financial assets or
financial liabilities the related transaction costs are included in the initial recognition amount. For the accounts
receivable or bills receivable arising from the sale of products or the provision of labor services not containing or
not considering significant financing components the Company shall use the amount of consideration expected to
be received as the initial recognition amount. The subsequent measurement of financial instruments depends on
their classification.
(1) Financial assets
* Financial assets measured at amortized cost. After initial recognition such financial assets are measured at
amortized cost by using the effective interest method. Gains or losses arising from financial assets that are
measured at amortized cost and do not belong to any hedging relationship are included in the current profit or loss
when they are derecognized reclassified amortized in accordance with the effective interest rate method or
recognized for impairment.* Financial assets measured at fair value and whose changes are included in the current profit and loss. After
initial recognition for such financial assets (except for a part of financial assets that belong to the hedging
relationship) the fair value is used for subsequent measurement and the resulting gains or losses (including
interest and dividend income) are included in the current profit and loss.* Investment in debt instruments measured at fair value and whose changes are included in other comprehensive
income. After initial recognition the subsequent measurement of such financial assets is conducted at fair value.Interest impairment losses or gains calculated by using the effective interest rate method and the exchange gains
and losses are included in the current profit and loss and other gains or losses are included in other
comprehensive income. In derecognition the accumulated gains or losses previously included in other
comprehensive income are transferred out of other comprehensive income and included in the current profit and
loss.
(2) Financial liabilities
* Financial liabilities measured at fair value and whose changes are included in the current profit and loss. Such
financial liabilities include transactional financial liabilities (including derivatives that belong to financial
liabilities) and financial liabilities designated to be measured at fair value and whose changes are included in the
112SHENZHEN ZHONGHENG HUAFA CO. LTD.
current profit and loss. After initial recognition the subsequent measurement of such financial liabilities is at fair
value except for those related to hedge accounting gains or losses (including interest expenses) resulting from
changes in the fair value of transactional financial liabilities are included in the current profit and loss. If a
financial liability designated to be measured at fair value and whose changes are included in the current profit or
loss the amount of change in the fair value of the financial liability caused by changes in the enterprise’s own
credit risk is included in other comprehensive income other changes in fair value are included in the current profit
and loss. If the impact of changes in the financial liability’s own credit risk included in other comprehensive
income causes or expands the accounting mismatch in profit or loss the Company will include all gains or losses
on the financial liability in the current profit and loss.* Financial liabilities measured at amortized cost. After initial recognition such financial liabilities are measured
at amortized cost by using the effective interest method.
10.3 The Company’s methods for confirming the fair value of financial instruments
If the financial instrument has an active market the fair value is determined by the quoted price in the active
market; if the financial instrument doesn’t have an active market the fair value is determined by adopting the
valuation technique. Valuation techniques mainly include market approach income approach and cost approach.In limited circumstances if the recent information used to determine fair value is insufficient or the range of
possible estimated amounts of fair value is widely distributed and the cost represents the best estimate of fair
value within this range the cost may represent the appropriate estimates of fair value within this distribution range.The Company uses all information on the performance and operation of the investee gettable after the initial
recognition date to determine whether the cost represents the fair value or not.
10.4 Confirmation basis and measurement method for the transfer of liabilities of financial assets
(1)Financial assets
If the Company’s financial asset meets one of the following conditions it shall be terminated for confirmation:
* The contract right to receive the cash flow of the financial asset is terminated; * The financial asset has been
transferred and the Company has transferred almost all risks and rewards of ownership of the financial asset; *
The financial asset has been transferred although the Company has neither transferred nor retained almost all the
remuneration in the ownership of the financial asset it has not retained control of the financial asset.If the Company neither transfers nor retains almost all the remuneration in the ownership of financial assets and
retains control over the financial assets the relevant financial assets are recognized according to the extent that
they continue to be involved in the transferred financial assets and the related liabilities are accordingly
recognized.
113SHENZHEN ZHONGHENG HUAFA CO. LTD.
If the transfer of financial assets meets the conditions for derecognition the difference between the following two
amounts shall be included in the current profit and loss: * The book value of the transferred financial assets on
the date of derecognition; * The sum of the consideration received for the transfer of financial assets and the
amount corresponding to the derecognized part of the cumulative amount of changes in fair value that was directly
included in other comprehensive income (the financial assets involved in the transfer are classified as financial
assets measured at fair value and their changes are included in other comprehensive income).If partial transfer of financial assets satisfies the conditions for derecognition the book value of the transferred
financial assets as a whole is apportioned respectively according to the relative fair value on the transfer date
between the derecognition portion and the non- derecognition portion and then the difference of following two
amounts is included in the current profit and loss: * The book value of the derecognition part on the derecognition
date; * The sum of the consideration received in the derecognition part and the amount corresponding to the
derecognized part of the cumulative amount of changes in fair value that was directly included in other
comprehensive income (the financial assets involved in the transfer are classified as financial assets measured at
fair value and their changes are included in other comprehensive income).
(2)Financial liability
If the current obligation of the financial liability (or part of it) has been discharged the Company derecognizes the
financial liability (or part of the financial liability).If the financial liability (or part of it) is derecognized the Company shall include the difference between its book
value and the consideration paid (including non-cash assets transferred out or liabilities assumed) into the current
profit and loss.
11.Note receivable
Method of determining expected credit losses and accounting treatment
11.1 How to determine expected credit losses
Based on expected credit losses the Company makes impairment accounting treatment and confirm loss
provisions for financial assets (including receivables) measured at amortized cost and financial assets (including
receivables financing) that are measured at fair value and whose changes are included in other comprehensive
income and lease receivables.The Company assesses on each balance sheet date whether the credit risk of relevant financial instruments has
increased significantly since initial recognition and divides the process of credit impairment of financial
instruments into three stages and adopts different accounting treatment methods for financial instruments
impairment at different stages: (1) In the first stage if the credit risk of a financial instrument has not increased
significantly since its initial recognition the Company shall measure the loss provisions according to the expected
credit losses of the financial instrument in the next 12 months and calculate the interest income according to its
114SHENZHEN ZHONGHENG HUAFA CO. LTD.
book balance (i.e. without deducting impairment) and actual interest rate; (2) In the second stage if the credit risk
of a financial instrument has increased significantly since the initial recognition but no credit impairment has
occurred the Company shall measure the loss provisions according to the expected credit losses of the financial
instrument during the entire duration and calculate the interest income according to its book balance and actual
interest rate; (3) In the third stage if the credit impairment occurs after initial recognition the Company shall
measure loss provisions based on the expected credit losses of the financial instrument for the entire duration and
calculate the interest income according to its book balance and actual interest rate.
(1) Methods of measuring loss provisions for financial instruments with lower credit risk
For financial instruments with lower credit risk on the balance sheet date the Company can directly make the
assumption that the credit risk of the instrument has not increased significantly since the initial recognition
without comparing with the credit risk at the initial recognition.If the default risk of financial instruments is low the debtor’s ability to fulfill its contractual cash flow obligations
is strong in the short term and even if there are adverse changes in the economic situation and operating
environment over a long period of time it may not necessarily reduce the borrower’s ability to fulfill the
contractual cash flow obligations the financial instrument shall be considered to have lower credit risk.
(2) Methods of measuring loss provisions for accounts receivable and lease receivables
* Receivables that do not contain significant financing components. For the receivables formed by transactions
regulated by “Accounting Standards for Business Enterprises No.14-Revenue” and without containing significant
financing components the Company adopts a simplified method that is it always calculates the loss provisions
based on the expected credit losses for the entire duration.Based on the nature of financial instruments the Company assesses whether credit risk has increased significantly
on the basis of individual financial assets or financial assets portfolios. The Company divides the notes receivable
and accounts receivable into several portfolios based on the characteristics of credit risk and calculates the
expected credit losses on the basis of the portfolios the basis for determining the portfolios is as follows:
Accounts receivable portfolio 1: A portfolio that uses the aging of accounts receivables as credit risk
characteristics
Accounts receivable portfolio 2: Combination of related parties included in the scope of consolidated statements
Notes receivable portfolio 1: Same as the division of accounts receivable portfolio
Notes receivable portfolio 2: Management evaluates that this type of fund is bank acceptance portfolio with lower
credit risk
For the accounts receivable and notes receivable being divided into portfolio 1 the Company refers to the
historical credit loss experience combines with the current conditions and the prediction of future economic
115SHENZHEN ZHONGHENG HUAFA CO. LTD.
situation and prepares a comparison table of the aging of accounts receivable and the expected credit loss rate of
the entire duration and calculates the expected credit losses.For accounts receivable and notes receivable being divided into portfolio 2 the Company refers to historical credit
loss experience combines with the current conditions and the predictions of future economic conditions and
calculates the expected credit losses of 0% through default risk exposure and expected credit loss rate for the
entire duration.* Accounts receivables and leases receivables that contain significant financing components. For accountsreceivables that contain significant financing components and leases receivables regulated by “AccountingStandards for Business Enterprises No. 21-Leases” the Company measures loss provisions in accordance with the
general method that is the “third stage” model.
(3) Methods of measuring loss reserves for other financial assets
For financial assets other than the above such as debt investment other debt investment other receivables
long-term receivables other than lease receivables etc. the Company uses the general method that is the
three-stage model to measure loss reserves.When measuring the credit impairment of financial instruments the Company considers the following factors in
assessing whether the credit risk has increased significantly:
The Company divides other receivables into a number of portfolios based on the nature of the money and
calculates the expected credit loss on the basis of the portfolio. The basis for determining the portfolio is as
follows:
Other receivables portfolio 1: A portfolio of unrelated parties with provision for impairment in accordance with
the expected loss rate
Other receivables portfolio 2: A portfolio of related parties included in the scope of the consolidated statement
For other receivables classified into portfolio 1 the Company refers to historical credit loss experience combines
with current conditions and forecasts of future economic conditions compiles a comparison table of accounts
receivable aging and expected credit loss rate of the entire duration and calculates the expected credit loss.For other receivables classified into portfolio 2 the Company refers to historical credit loss experience combines
with current conditions and forecasts of future economic conditions and calculates an expected credit loss of 0%
through the default risk exposure and the expected credit loss rate of the entire duration .
(4)Accrual method of bad debt provision for those accrual by account age as the portfolio
Account age Expected credit loss rate of receivable (%) Expected credit loss rate of other receivable
116SHENZHEN ZHONGHENG HUAFA CO. LTD.
(%)
Within one year (one year included) 0 0
1-2 years 5 5
2-3 years 10 10
Over 3 years 30 30
11.2 Accounting treatment methods of expected credit losses
In order to reflect the changes in the credit risk of financial instruments since initial recognition the Company
remeasures the expected credit losses on each balance sheet date and the resulting increase or reversal of the loss
provisions should be counted as an impairment loss or gain and included in the current profit and loss and based
on the type of financial instrument offsets the book value of the financial asset listed in the balance sheet or
includes in the estimated liability (loan commitment or financial guarantee contract) or includes in other
comprehensive income (debt investments measured at fair value and whose changes are included in other
comprehensive income).
12. Account receivable
Same as 11. Note receivable
13.Receivable financing
Same as 11. Note receivable
14. Other account receivable
Determination and accounting treatment on the expected credit losses of other account receivable
Same as 11. Note receivable
15. Inventory
15.1 Categories of inventory
The inventory is goods or manufactured products held for sale products in process and materials and matters
utilized in the production or supply of labor. Mainly including raw material revolving materials (wrappage and
low-value consumption goods etc.) outside processing materials goods in process semi-finished goods stocks
and so on.
15.2 Accounting method for inventory delivery
When inventories are issued the actual cost of issuance is determined by the month-end weighted average
117SHENZHEN ZHONGHENG HUAFA CO. LTD.
method.
15.3 Accrual method inventory falling price reserves
On the balance sheet day the inventory is measured on the lower one between the cost and the net realizable value
and the provision for the falling price reserves is accrued on each inventory item; however as for the inventory of
large quantity and low price the provision is accrued on the inventory category.
15.4 Inventory system
Inventory system of the Company is perpetual inventory system
15.5 Amortization method for the low-value consumables and wrap page
Low-value consumables and packages are amortized by one-point method
16. Contract assets
The Company lists the right to receive consideration (and this right depends on factors other than the passage of
time) that has transferred goods or services to the customer as a contract asset.Impairment of contract assets is based on expected credit losses. For the determination method and accounting
treatment method of the expected credit loss of the contract assets of the Company please refer to (11) Notes
Receivable.
17.Contract costs
The Company’s contract cost includes the incremental cost for obtaining contracts and contract performance cost.The incremental cost incurred to obtain a contract (contract acquisition cost) is the cost that would not have been
incurred if the contract had not been obtained. If the cost is expected to be recovered the Company shall
recognize it as an asset as the contract acquisition cost.If the cost incurred by the Company for performing the contract does not fall within the scope of the inventory and
other accounting standards and meets the following conditions at the same time it shall be recognized as an asset
as the contract performance cost:
1. The cost is directly related to a current or expected contract including direct labor direct materials
manufacturing overhead (or similar expenses) cost clearly borne by the user and other cost incurred solely as a
result of the contract;
2. The cost increases the Company’s future resources for fulfilling its performance obligations;
118SHENZHEN ZHONGHENG HUAFA CO. LTD.
3. The cost is expected to be recovered.
The Company amortizes the asset (hereinafter referred to as the “asset related to the contract cost”) recognized by
the contract acquisition cost and the contract performance cost on the same basis as the revenue from the
commodity related to the asset and includes it in the current profit and loss. If the amortization period of the asset
formed by the incremental cost for obtaining the contract does not exceed one year it shall be included in the
current profit and loss when it occurs.When the book value of the asset related to the contract cost is higher than the difference between the following
two items the Company shall make provision for impairment of the excess and recognize it as an asset
impairment loss:
1. The remaining consideration expected to be obtained due to the transfer of commodity related to the asset;
2. The estimated cost to be incurred for the transfer of the relevant commodity.
18. Assets held for sale
N/A
19. Debt investment
N/A
20. Other debt investment
N/A
21. Long-term account receivable
N/A
22. Long-term equity investment
22.1 Recognition of initial investment cost
For a long-term equity investment obtained by a business combination if it is a business combination under the
same control take the share of the combine party obtained in the book value of the net assets in the consolidated
financial statements of the ultimate controlling party on the combination date as the initial investment cost; in the
case of the consolidation of enterprises not under the same control recognized as the initial cost is the recognized
consolidation cost on the purchase day. As for the long term equity investment obtained by cash payment the
initial investment cost is the actual purchase payment. As for the long term equity investment obtained by the
equity securities offering the initial investment cost is the fair value of the equity securities. As for the long-term
equity investment obtained by debt reorganization initial investment cost of such investment should determine by
119SHENZHEN ZHONGHENG HUAFA CO. LTD.
relevant regulation of the “Accounting Standards for Business Enterprise No.12- Debt Reorganization”; as for the
long term equity investment obtained by the exchange of the non-monetary assets the initial investment cost isrecognized on the relevant rules in the “Accounting Standards for Business Enterprise No. 7- Exchange ofNon-Monetary Assets”
22.2 Subsequent measurement and profit or loss recognition
Where the company has a control over the investee long-term equity investments are measured using cost method.Long-term equity investments in associates and joint ventures are measured using equity method. Where part of
the equity investments of an investor in its associates are held indirectly through venture investment institutions
common fund trust companies or other similar entities including investment linked insurance funds such part of
equity investments indirectly held by the investor shall be measured at fair value through profit or loss according
to according to relevant requirements of Accounting Standards for Business Enterprises No.22—Recognition
and measurement of Financial Instruments regardless whether the above entities have significant influence on
such part of equity investments while the remaining part shall be measured using equity method.
22.3 Basis of conclusion for common control and significant influence over the investee
Joint control over an investee refers to where the activities which have a significant influence on return on certain
arrangement could be decided only by mutual consent of the investing parties sharing the control which includes
the sales and purchase of goods or services management of financial assets acquisition and disposal of assets
research and development activities and financing activities etc.; Significant influence on the investee refers to
that: significant influence over the investee exists when holding more than 20% but less than 50% of the shares
with voting rights or even if the holding is below 20% there is still significant influence if any of the following
conditions is met: there is representative in the board of directors or similar governing body of the investee;
participation in the investee’s policy setting process; assign key management to the investee; the investee relies on
the technology or technical information of the investing company; or major transactions with the investee.
23. Investment real estate
Measurement for investment real estate
Cost method
Depreciation or amortization method
The leased buildings in the Company’s investment property adopts straight-line depreciation to calculate and
distill depreciation specific accounting policy are same as part of the fixed assets. The leased land use rights in
the investment property and the land use rights to be transferred after appreciation adopt straight-line amortization
specific accounting policy are same as part of the intangible assets.
120SHENZHEN ZHONGHENG HUAFA CO. LTD.
24. Fixed assets
(1) Recognition
Fixed assets refers to the tangible assets holding for purpose of producing goods providing labor services leasing
or operation management which has one accounting fiscal year of using life. Meanwhile as up to the following
conditions they are recognized: the economic interest related to the fixed assets probably flow into the Company;
the cost of the fixed assets can be measured reliably.
(2) Depreciation method
Annual depreciation
Category Depreciation method Depreciation life (year) Salvage rate
rate
Straight-line
House building 20-50 10% 1.8%-4.5%
depreciation
Straight-line
Machinery equipment 10 10% 9%
depreciation
Straight-line
Mold equipment 3 10% 30%
depreciation
Transportation Straight-line
510%18%
equipment depreciation
Straight-line
Instrument equipment 5 10% 18%
depreciation
Straight-line
Tool equipment 5 10% 18%
depreciation
Straight-line
Office equipment 5 10% 18%
depreciation
N/A
(3) Recognition basis valuation and depreciation method for fixed assets under financing lease
The fixed assets under financing lease are the lease that has substantially transferred all the risks and rewards
121SHENZHEN ZHONGHENG HUAFA CO. LTD.
associated with asset ownership. The initial valuation of the fixed assets under financing lease is to take the lower
one between the fair value of the leased assets and the present value of the minimum lease payments on the start
date of the lease period as the entry value; the subsequent valuation of the fixed assets under financing lease
adopts the depreciation policy consistent with the own fixed assets to make depreciation and impairment
provision.
25. Construction in process
Construction in process of the Company divided as self-run construction and out-bag construction. The
Construction in process of the Company carried forward as fixed assets while the construction is ready for the
intended use. Criteria of the expected condition for use should apply one of the follow conditions: The substance
construction (installation included) of the fixed assets has completed all or basically; As the projects have been in
test production or operation and the results show that the assets can operate properly and produce the qualified
products stably or the test operation result shows the assets can operate or open properly. The expenditure of the
fixed assets on the construction is a little or little. The fixed assets of the project constructed have been up to the
requirements of the design or contract or basically up to.
26. Borrowing expenses
26.1 Recognition principle on capitalization of borrowing expenses
As for the Company’s actual borrowing expenses directly attributable to the assets construction or production it is
capitalized and reckoned into the relevant assets cost; as for other borrowing expenses it is recognized on the
actual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capital
assets investment real estate and inventory reaching the expectant availability or sale ability.
26.2 Calculation of the capitalization
Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The period
of capitalization suspended is not included. The capitalization of borrowing expenses should be suspended while
the abnormal interrupt which surpass three months continuously in the middle of acquisition or construction or
production.As for the borrowing of the specific borrowing the capitalization sum is recognized on the current actual
interest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or the
return of the temporary investment; As for the appropriation of the general borrowing the capitalization sum is
recognized on the weighted average of the accumulative assets expenditure above the specific borrowing and
times the capitalization rate of the appropriation; As for the discount or premium of the borrowing the discount or
premium to be diluted in every accounting period is recognized in the actual rate method.
122SHENZHEN ZHONGHENG HUAFA CO. LTD.
The effective interest method is the method for the measurement of the diluted discount or premium or interest
expenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the future
cash flow in the expectant duration period as the current book value of the borrowing.
27. Biological assets
N/A
28. Oil and natural gas assets
N/A
29.Right-of-use assets
For right-of-use assets if the lessee can reasonably determine that the ownership of the leased asset can be
obtained when the lease term expires it shall accrue depreciation over the remaining useful life of the leased asset.If it cannot be reasonably determined that the ownership of the leased asset can be obtained at the expiration of the
lease term depreciation shall be accrued within the shorter of the lease term and the remaining useful life of the
leased asset. At the same time the lessee needs to determine whether the right-of-use asset is impaired and
conducts accounting treatment for the recognized impairment loss.
30. Intangible assets
(1) Accounting method service life and impairment test
1. Valuation methods of intangible assets
The Company’s intangible assets are initially measured at cost. The purchased intangible assets are regarded as
actual cost according to the actual price paid and related expenses. For the intangible assets invested by investors
the actual cost is determined according to the value agreed in the investment contract or agreement but if the
value agreed in the contract or agreement is not fair the actual cost shall be determined according to the fair value.The cost of self-developed intangible assets is the total expenditure incurred before reaching the intended use.The subsequent measurement methods of the Company’s intangible assets are as follows: the intangible assets
with limited service life are amortized using the straight-line method and the service life and amortization method
of the intangible assets are reviewed at the end of the year. If there is any difference from the original estimate
make corresponding adjustments; the intangible assets with uncertain service life are not amortized but the
service life is reviewed at the end of the year. When there is conclusive evidence that its service life is limited
estimate its service life amortize it on a straight-line basis.
2. Judgment basis for uncertain service life
The Company determines the intangible assets of which the time limit to bring economic benefits to the company
123SHENZHEN ZHONGHENG HUAFA CO. LTD.
cannot be foreseen or the service life is uncertain as intangible assets with uncertain service life. The judgment
basis for the uncertain service life comes from contractual rights or other legal rights but there is no clear service
life in the contract or legal provisions; it is still impossible to judge when the intangible assets will bring economic
benefits to the company based on the situation in the same industry or the demonstration of relevant experts.At the end of each year the company reviews the service life of intangible assets with uncertain service life
mainly adopting a bottom-up approach the relevant departments of intangible assets make the basic review to
evaluate whether there is any change in the judgment basis for the uncertainty of service life.
(2) Accounting policies for internal research and development expenditure
Expenditures for internal research and development projects at the research phase shall be included in the current
profit or loss when incurred; expenditures incurred at the development phase and recognized as intangible assets
shall be transferred to intangible assets accounting.
31. Long-term assets impairment
Long-term equity investments investment properties measured at cost and long-term assets such as fixed assets
construction in progress productive biological assets at cost method oil and gas assets intangible assets and
goodwill are tested for impairment if there is any indication that an asset may be impaired at the balance date. If
the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount
a provision for impairment and an impairment loss are recognized for the amount by which the asset’s carrying
amount exceeds its recoverable amount.The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the future
cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized on
the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset the
recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest
group of assets that is able to generate independent cash inflows.Goodwill arising from a business combination is tested for impairment at least at each year end irrespective of
whether there is any indication that the asset may be impaired. For the purpose of impairment testing the carrying
amount of goodwill acquired in a business combination is allocated from the acquisition date on a reasonable
basis to each of the related asset groups; if it is impossible to allocate to the related asset groups it is allocated to
each of the related set of asset groups. If the carrying amount of the asset group or set of asset groups is higher
than its recoverable amount the amount of the impairment loss first reduced by the carrying amount of the
goodwill allocated to the asset group or set of asset groups and then the carrying amount of other assets (other
124SHENZHEN ZHONGHENG HUAFA CO. LTD.
than the goodwill) within the asset group or set of asset groups pro rata based on the carrying amount of each
asset.Once the impairment loss of such assets is recognized it is not be reversed in any subsequent period.
32. Long-term deferred expenses
The Company’s long-term deferred expenditure are expenses paid out and with one year above (one-year
excluded) benefit period. The long-term deferred expenses are diluted by periods according to the benefit period.As the long-term deferred expenses cannot enable the accounting period’s beneficiary all dilution values of the
project undiluted yet are transferred into the current loss/gain.
33. Contract liabilities
The company presents the obligation to transfer goods or provide services to customers for consideration received
or receivable as a contract liability.
34. Employees remuneration
(1) Accounting for short-term benefits
In the period of employee services short-term benefits are actually recognized as liabilities and charged to profit
or loss or if otherwise required or allowed by other accounting standards to the related costs of assets for the
current period. At the time of actual occurrence The Company’s employee benefits are recorded into the profits
and losses of the current year or assets associated costs according to the actual amount. The non-monetary
employee benefits are measured at fair value. Regarding to the medical and health insurance industrial injury
insurance maternity insurance and other social insurances housing fund and labor union expenditure and
personnel education that the Company paid for employees the Company should recognize corresponding
employees benefits payable according to the appropriation basis and proportion as stipulated by relevant
requirements and recognize the corresponding liabilities and include these expenses in the profits or losses of the
current period or recognized as respective assets costs.
(2) Accounting for post-employment benefits
During the accounting period in which an employee provides service the amount payable calculated under
defined contribution scheme shall be recognized as a liability and recorded in profit and loss of the current period
or in assets. In respect of the defined benefit scheme the Company shall use the projected unit credit method and
attribute the welfare obligations calculated using the formula stipulated by the defined benefit scheme to the
125SHENZHEN ZHONGHENG HUAFA CO. LTD.
service period of the employee and record the obligation in the current profit and loss or related assets cost.
(3) Accounting for termination benefits
The Company recognizes a liability and expenses in the current profit or loss for termination benefits at the earlier
of the following dates: when the Company can no longer withdraw the offer of those benefits; and when the
Company recognizes costs for restructuring involving the payment of termination costs.
(4) Accounting for other long-term employee benefits
The Company provides other long-term employee benefits to its employees. For those falling within the scope of
defined contribution scheme the Company shall account for them according to relevant requirements of the
defined contribution scheme. In addition the Company recognizes and measures the net liabilities or net assets of
the other long-term employee benefits according to relevant requirements of the defined contribution scheme.
35. Lease liability
For the lease liabilities the lessee shall calculate the interest expenses on the lease liability for each period of the
lease term and reckon into current gain/loss.
36. Accrual liability
The obligation related to contingencies is the current obligation assumed by the company and performing this
obligation may result in an outflow of economic benefits and this obligation can be determined as the estimated
liabilities when the amount can be reliably measured. The Company makes initial measurement in accordance
with the best estimate for performing the related current obligation if the expenditure as needed has a continuous
range and the likelihood of occurrence of various results in this range is the same the best estimate is determined
by the median value within the range; if a number of items are involved the best estimate is determined by the
calculation of various possible outcomes and related probabilities.At the balance sheet date the book value of estimated liabilities should be rechecked if there is conclusive
evidence indicates that this book value cannot truly reflect the current best estimate and then the book value
should be adjusted in accordance with the current best estimate.
37.Share-based payment
N/A
38. Other financial instrument as preferred shares and perpetual bonds
N/A
126SHENZHEN ZHONGHENG HUAFA CO. LTD.
39. Revenue (income)
Accounting policy for recognition and measurement of revenue(income)
The Company recognizes revenue based on the transaction price allocated to the performance obligations at the
time when it has fulfilled the performance obligations in the contract that is when the customer obtains control
rights of the relevant goods or services. Obtaining control rights of related goods means being able to lead the use
of the goods and obtain almost all economic benefits from them. Performance obligations refer to the Company's
commitment to transfer clearly distinguishable goods to customers in the contract. The transaction price refers to
the amount of consideration that the Company expects to be entitled to receive due to the transfer of goods to the
customer not including the amount collected on behalf of a third party and the amount that the Company expects
to return to the customer.Whether the performance obligation is to be performed within a certain period of time or at a certain point of time
depends on the terms of the contract and relevant legal provisions. If the performance obligation is performed
within a certain period of time the Company recognizes revenue in accordance with the progress of the
performance. Otherwise the Company recognizes revenue at a certain point when the customer obtains control
rights of the relevant assets.The Company's specific revenue recognition methods:
The sales contract between the Company and the customer usually only contains the performance obligation for
the transferred goods. The Company’s performance obligation for the transfer of goods does not meet the three
conditions for performance within a certain period of time therefore the Company usually recognizes revenue at
the time-point of completion of the inspection of incoming on the basis of comprehensive consideration of the
following factors i.e. for domestic sales the revenue is recognized when the product has been sent out and the
other party has signed for confirmation. For export sales the revenue is recognized by the relevant customs
declaration documents when the product has been shipped and customs declaration procedures have been
completed.The house lease contract signed by the Company and the customer usually only contains the performance
obligation for the provision of lease and property services the Company recognizes revenue according to the
progress of performance when a performance obligation is performed within a certain period of time i.e. as
agreed in the lease contract revenue is recognized when related payments are received or evidence of collections
is obtained.Different business models of similar business resulted in different accounting policies for revenue recognition
N/A
127SHENZHEN ZHONGHENG HUAFA CO. LTD.
40. Government subsidy
40.1Category of government subsidy and accounting treatment
Governments subsidy of the Company refer to the monetary and non-monetary assets obtained from government
for free (excluding the capital invested by government as an owner). If the government grants are monetary assets
it shall be measured according to the amount received or receivable. If the government grants are non-monetary
assets it shall be measured at fair value; if the fair value cannot be obtained reliably it shall be measured at the
nominal amount.Government grants related to daily activities are included in other income in accordance with the economic
business. Government grants not related to daily activities are included in the non-operating income and
expenditure.Government grants that the government documents clearly stipulate to be used for the purchase and establishment
or forming long-term assets in other way are recognized as government grants related to assets. For the
government grants that the government documents do not clearly specify the subsidy target and can form
long-term assets the part corresponding to the asset value is recognized as the government grants related to the
assets and the rest is recognized as the government grants related to the income. For the government grants which
are difficult to be distinguished recognize the whole as the government grants related to the income. Government
grants related to assets are recognized as deferred income. The amount recognized as deferred income is included
in the current profit and loss in a reasonable and systematic manner within the useful life of the relevant asset.Government grants other than government grants related to assets are recognized as government grants related to
income. If the government grants related to the income are used to compensate the related expenses or losses of
the enterprise in the future period recognize them as deferred income and include them in the current profit and
loss during the period of recognizing the related expenses. The government grants used to compensate the relevant
expenses or losses incurred by the enterprise are directly included in the current profit and loss.The Company obtained the policy preferential loan interest subsidy and the finance allocated the interest subsidy
funds to the loan bank and the loan bank provides loans to the Company at a preferential interest rate take the
actual amount of the loan received as the entry value of the loan and calculate the relevant borrowing costs
according to the loan principal the policy preferential interest rate. If the finance directly appropriates the interest
subsidy funds to the Company the Company will offset the relevant borrowing costs with the corresponding
interest subsidy.
40.2 Time points to recognize the government grants
Government grants are recognized when they meet the conditions attached to government grants and can be
128SHENZHEN ZHONGHENG HUAFA CO. LTD.
received. Government grants measured in accordance with the amount receivable are recognized when there is
conclusive evidence at the end of the period that it meets the relevant conditions stipulated in the financial support
policy and is expected to receive financial support funds. Other government grants other than government grants
measured in accordance with the receivable amount are recognized when the grant is actually received.
41. Deferred income tax asset / deferred income tax liability
41.1 Where there is difference between the carrying amount of the assets or liabilities and its tax base (as for an
item that has not been recognized as an asset or liability if its tax base can be determined in light of the tax law
the tax base shall recognized as the difference) the deferred income tax and deferred income tax liabilities shall be
determined according to the applicable tax rate in period of assets expected to recover or liability expected to pay
off.
41.2 The deferred income tax assets shall be recognized to the extent of the amount of the taxable income which it
is most likely to obtain and which can be deducted from the deductible temporary difference. On balance sheet
date if there have concrete evidence of obtaining in future period enough taxable amounts to deduct the
deductible temporary difference the un-confirmed deferred income tax assets in previous accounting period shall
be recognized. If there has no enough taxable amounts obtained in future period to deducted the deferred income
tax assets book value of the deferred income tax assets shall be kept in decreased.
41.3The taxable temporary differences related to the investments of subsidiary companies and associated
enterprises shall recognized as deferred income tax liability unless the Company can control the time of the
reverse of temporary differences and the temporary differences are unlikely to be reversed in the expected future.As for the deductible temporary difference related to the investment of the subsidiary companies and associated
enterprises deferred income tax assets shall be recognized while the temporary differences are likely to be
reversed in the expected future and it is likely to acquire any amount of taxable income tax that may be used for
making up the deductible temporary differences.
42. Leasing
(1) Accounting treatment for operating lease
Operating lease payments are recognized on a straight-line basis over the term of the relevant lease and are either
included in the cost of related asset or charged to profit or loss for the period.
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(2) Accounting treatment for finance lease
Accounting treatment for finance lease: At the commencement of the lease term the Group records the leased
asset at an amount equal to the lower of the fair value of the leased asset and the present value of the minimum
lease payments. The difference between the recorded amounts is accounted for as unrecognized finance charge
using the effective interest method amortization during the lease term. Minimum lease payments deducting
unrecognized financing charges are listed as long-term payable.
43. Other important accounting policy and estimates
N/A
44. Changes in important accounting policies and estimates
(1) Changes in important accounting policies
√ Applicable □ Not applicable
Content and reason of changes in
Approval procedure Note
accounting policies
44.1 Change in accounting policies and basis1.
The first implementation of the new lease standard
According to the Notice on Revising and Issuing Accounting Standards for Business Enterprises No. 21 - Leases
(CK [2018] No. 35) issued by the Ministry of Finance on December 7 2018 the revised Accounting Standards for
Business Enterprises No. 21 - Lease takes effect on January 1 2019 for companies listed both at home and abroad
and companies listed overseas and preparing financial statements by using IFRS or ASBE; for other companies
that implement Accounting Standards for Business Enterprises it takes effect on January 1 2021.According to the regulations of the Ministry of Finance the company has implemented the new lease standard
from January 1 2021 (hereinafter referred to as the “first implementation date”).The main contents of the new lease standard implemented this time are as follows: (1) Under the new lease
standard except for short-term leases and low-value leases lessees will no longer distinguish between finance
leases and operating leases and all leases are subject to the same accounting treatment requiring the recognition
of right-of-use assets and lease liabilities; (2) For right-of-use assets where the lessee can reasonably determine
that the ownership of the leased asset can be obtained when the lease term expires depreciation shall be accrued
within the remaining useful life of the leased asset. Where it cannot be reasonably determined that the ownership
of the leased asset can be obtained at the expiration of the lease term depreciation shall be accrued within the
shorter of the lease term and the remaining useful life of the leased asset. At the same time the lessee needs to
determine whether the right-of-use asset is impaired and conduct accounting treatment for the recognized
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impairment losses; (3) For lease liabilities the lessee shall calculate the interest expenses of the lease liabilities in
each period of the lease term and include them in the current profits and losses. (4) For short-term leases and
leases of low-value assets the lessee may choose not to recognize the right-of-use assets and lease liabilities and
include them in the relevant asset costs and liabilities and the current profits and losses in each period of the lease
term by using the straight-line method or other systematic and reasonable methods.The company will start accounting treatment for the impact of the implementation of the new lease standard on
the company in accordance with the new lease standard from January 1 2021 and according to the connection
regulations the information of the comparable period will not be adjusted and the retained earnings at the
beginning of 2021 shall be retrospectively adjusted by the difference between the new lease standard and the
current lease standard on the first implementation date. This accounting policy change does not involve
retrospective adjustments to previous years and will not have a significant impact on the company’s financial
statements.
(2)Changes in important accounting estimates
□ Applicable √Not applicable
(3) Adjustment the financial statements at the beginning of the first year of implementation of new leasing
standards since 2021
√Applicable □Not applicable
Whether needs to adjust the balance sheet at the beginning of the year
□Yes √No
Explanation of reasons for not requiring the adjustment of beginning balance sheet account
Impact of the implementation of new leasing standard on the Company: accounting of the Company is based on
the new leasing standards from January 1 2021 and according to the articulation provisions the information for
the comparable period will not be adjusted; the retained earnings at beginning of 2021 retrospectively adjusted for
differences between the new lease standard and current lease standard at the date of first implementation. The
change in accounting policy does not involve the retroactive adjustment to prior years and will not have an
important impact on the financial statement of the Company.
(4) Retrospective adjustment of early comparison data description when initially implemented the new
leasing standards since 2021
□ Applicable √ Not applicable
45. Other
N/A
131SHENZHEN ZHONGHENG HUAFA CO. LTD.
VI. Taxes
1. Major tax and tax rate
Taxes Taxation basis Tax rate
VAT Domestic sales revenue 13% 9% 6% 5% 3%
Consumption tax Turnover tax payable 7%
Corporate income tax Taxable income 15% 25%
Educational surtax Turnover tax payable 3%
Local educational surtax Turnover tax payable 2% 1.5%
Property tax 70% of original value of the property 1.2%
Explain the different taxation entity of the enterprise income tax
Taxation entity Income tax rate
Wuhan Hengfa Technology Co. Ltd. 15%
2. Tax preferences
According to the “Measures for the Determination of High-tech Enterprises” and through the enterprise
application expert review and public announcement and other procedures the Company’s wholly-owned
subsidiary Wuhan Hengfa Technology Co. Ltd. has been identified as a high-tech enterprise and obtained the
“High-tech Enterprise Certificate” jointly issued by the Science and Technology Department of Hubei Province
Hubei Provincial Finance Department Hubei Provincial Office SAT and Local Taxation Bureau of Hubei
Province on December 1 2020 the certificate number is GR202042003237 which is valid for 3 years. The
applicable corporate income tax rate of the subsidiary Wuhan Hengfa Technology Co. Ltd. for 2021 was 15%.
3. Other
Nil
VII. Notes to main items in consolidated financial statement
1. Monetary fund
Unit: RMB/CNY
Item Ending balance Opening balance
Cash on hand 220467.15 138673.02
Bank deposit 32674664.03 30141013.39
Other monetary fund 1530911.93 30688367.17
Total 34426043.11 60968053.58
132SHENZHEN ZHONGHENG HUAFA CO. LTD.
Other explanation
Amount of the restricted monetary funds at end of the period was 1623480.21 yuan including bank deposits of
92568.28 yuan which were restricted due to the freezing of litigation; other monetary fund was 1530911.93
yuan which were restricted due to the note deposit. Other than that the Company has no other amounts that are
subject to restriction on use and potential recovery risks due to mortgages pledges or freezes.
2. Trading financial assets
Unit: RMB/CNY
Item Ending balance Opening balance
Including:
Including:
Other explanation:
3. Derivative financial assets
Unit: RMB/CNY
Item Ending balance Opening balance
Other explanation:
4. Note receivable
(1) Category
Unit: RMB/CNY
Item Ending balance Opening balance
Bank acceptance bill 62186577.09
Commercial acceptance bill 43735740.51 20240464.79
Total 105922317.60 20240464.79
Unit: RMB/CNY
Ending balance Opening balance
Bad debt
Book balance Book balance Bad debt provision
Category provision Book Book
Amoun Proport Amoun Accrua value Amoun Proport Accrual value
Amount
t ion t l ratio t ion ratio
Including:
Including:
Accrual of bad debt provision on single basis:
Unit: RMB/CNY
133SHENZHEN ZHONGHENG HUAFA CO. LTD.
Ending balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Accrual of bad debt provision on portfolio:
Unit: RMB/CNY
Ending balance
Name
Book balance Bad debt provision Accrual ratio
Explanation on portfolio basis:
If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses please refer to
the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
(2) Bad debt provision accrual collected or reversal in the period
Bad debt provision accrual in the period:
Unit: RMB/CNY
Amount changed in the period
Opening
Category Collected or Ending balance
balance Accrual Written-off Other
reversal
Including major amount bad debt provision that collected or reversal in the period:
□ Applicable √Not applicable
(3) Notes receivable that the company has pledged at the end of the period
Unit: RMB/CNY
Item Amount pledge at period-end
Bank acceptance bill 20026713.29
Total 20026713.29
(4) Notes endorsement or discount and undue on balance sheet date
Unit: RMB/CNY
Item Amount derecognition at period-end Amount not derecognition at period-end
Bank acceptance bill 25910186.91
Commercial acceptance bill 26472601.39
Total 52382788.30
(5) Notes transfer to account receivable due for failure implementation by drawer at period-end
Unit: RMB/CNY
134SHENZHEN ZHONGHENG HUAFA CO. LTD.
Item Amount transfer to account receivable at period-end
Other explanation
(6) Note receivable actually written-off in the period
Unit: RMB/CNY
Item Written-off amount
Written-off situation of important notes receivable:
Unit: RMB/CNY
Whether the
Written-off payment is
Nature of notes Written-off
Name Written-off reason procedure generated by
receivable amount
performed related party
transactions
Notes receivable written-off description:
5. Account receivable
(1) Category
Unit: RMB/CNY
Ending balance Opening balance
Bad debt
Book balance Book balance Bad debt provision
Category provision Book Book
Amoun Proport Amoun Accrua value Amoun Proport Amoun Accrual value
t ion t l ratio t ion t ratio
Account receivable
with bad debt 13146 13146 100.00 13146 13146 100.00
9.27%0.009.31%
provision accrual 290.18 290.18 % 290.18 290.18 %
on a single basis
Including:
Account receivable
128711286712807
with bad debt 90.73 39021. 9893.7 128063
4349.70.03%5327.93805.590.69%0.01%
provision accrual % 77 8 911.79
477
by combination
Including:
Combination 1:
128711286712807
Take account ages 90.73 39021. 9893.7 128063
4349.70.03%5327.93805.590.69%0.01%
of receivables as a % 77 8 911.79
477
combination of
135SHENZHEN ZHONGHENG HUAFA CO. LTD.
credit risk
characteristics
141861286714122
100.00131851005.013156128063
Total 0639.9 9.29% 5327.9 0095.7 9.32%
%311.950%183.96911.79
275
Accrual of bad debt provision on single basis: 13146290.18 yuan
Unit: RMB/CNY
Ending balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Shenzhen Portman
Bowling Club Co. 2555374.75 2555374.75 100.00% Uncollectible
Ltd.Hong Kong Haowei
1870887.18 1870887.18 100.00% Uncollectible
Industrial Co. Ltd.TCL ACE ELECTRIC
APPLIANCE
1325431.75 1325431.75 100.00% Uncollectible
(HUIZHOU) CO.LTD.Qingdao Haier Parts
1225326.15 1225326.15 100.00% Uncollectible
Procurement Co. Ltd.SKYWORTH
Multimedia 579343.89 579343.89 100.00% Uncollectible
(Shenzhen) Co. Ltd.Shenzhen Huixin
Video Technology Co. 381168.96 381168.96 100.00% Uncollectible
Ltd.Shenzhen Wandelai
Digital Technology 351813.70 351813.70 100.00% Uncollectible
Co. Ltd.Shenzhen Dalong
344700.00 344700.00 100.00% Uncollectible
Electronic Co. Ltd.Shenzhen Keya
332337.76 332337.76 100.00% Uncollectible
Electronic Co. Ltd.Shenzhen Qunping
304542.95 304542.95 100.00% Uncollectible
Electronic Co. Ltd.China Galaxy
Electronics (Hong 288261.17 288261.17 100.00% Uncollectible
Kong) Co. Ltd.Dongguan Weite 274399.80 274399.80 100.00% Uncollectible
136SHENZHEN ZHONGHENG HUAFA CO. LTD.
Electronic Co. Ltd.Chuangjing 247811.87 247811.87 100.00% Uncollectible
Hong Kong New
Century Electronics 207409.40 207409.40 100.00% Uncollectible
Co. Ltd.Shenyang Beitai
203304.02 203304.02 100.00% Uncollectible
Electronic Co. Ltd.Beijing Xinfang Weiye
193000.00 193000.00 100.00% Uncollectible
Technology Co. Ltd.TCL Electronics (Hong
145087.14 145087.14 100.00% Uncollectible
Kong) Co. Ltd.Huizhou TCL Xinte
142707.14 142707.14 100.00% Uncollectible
Electronics Co. Ltd.Sky Worth – RGB
133485.83 133485.83 100.00% Uncollectible
Electronic Co. Ltd.Other 2039896.72 2039896.72 100.00% Uncollectible
Total 13146290.18 13146290.18 --
Accrual of bad debt provision on single basis:
Unit: RMB/CNY
Ending balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Accrual of bad debt provision on portfolio: 39021.77 yuan
Unit: RMB/CNY
Ending balance
Name
Book balance Bad debt provision Accrual ratio
Within one year 127969770.91
1-2 years 718833.35 35941.67 5.00%
2-3 years 23217.71 2321.77 10.00%
Over 3 years 2527.77 758.33 30.00%
Total 128714349.74 39021.77 --
Explanation on portfolio basis:
Take account ages of receivables as a combination of credit risk characteristics
Accrual of bad debt provision on portfolio:
Unit: RMB/CNY
Ending balance
Name
Book balance Bad debt provision Accrual ratio
Explanation on portfolio basis:
137SHENZHEN ZHONGHENG HUAFA CO. LTD.
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses please
refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
By account age
Unit: RMB/CNY
Account ages Book balance
Within one year (one year included) 127969770.91
1-2 years 718833.35
2-3 years 23217.71
Over 3 years 13148817.95
Over 5 years 13148817.95
Total 141860639.92
(2) Bad debt provision accrual collected or reversal in the period
Bad debt provision accrual in the period:
Unit: RMB/CNY
Amount changed in the period
Opening
Category Collected or Ending balance
balance Accrual Written-off Other
reversal
Accounts
receivable with
provision for
13146290.1813146290.18
bad debts based
on individual
assessments
Accounts
receivable with
provision for 9893.78 29127.99 39021.77
bad debts by
combination
Total 13156183.96 29127.99 13185311.95
Including major amount bad debt provision that collected or reversal in the period:
Unit: RMB/CNY
Company Amount collected or reversal Way of collection
(3) Actual written-off accounts receivable in the current period
Unit: RMB/CNY
138SHENZHEN ZHONGHENG HUAFA CO. LTD.
Item Written-off amount
Including the important accounts receivable written-off situation:
Unit: RMB/CNY
Whether the
Written-off payment is
Nature of accounts Written-off
Name Written-off reason procedure generated by
receivable amount
performed related party
transactions
Written-off description of accounts receivable:
Nil
(4) Top 5 account receivables collected by arrears party at ending balance
Unit: RMB/CNY
Ending balance of account Proportion in total account Ending balance of bad debt
Company
receivable receivables at period-end provision
Qingdao Haidayuan
Purchasing Service Co. 34570445.34 24.37%
Ltd.Hefei Hangjia Display
30912634.0021.79%
Technology Co. Ltd.Hong Kong Yutian
International Investment 24428463.68 17.22%
Co. Ltd.Wuhan Hengsheng
Photo-electricity 13902449.94 9.80%
Industry Co. Ltd.Wuhan AOC
5076178.193.58%
Technology Co. Ltd.Total 108890171.15 76.76%
(5) Assets and liabilities resulted by account receivable transfer and continues involvement
Nil
Other explanation:
Nil
(6) Account receivable derecognition due to financial assets transfer
Nil
139SHENZHEN ZHONGHENG HUAFA CO. LTD.
6. Receivable financing
Unit: RMB/CNY
Item Ending balance Opening balance
Notes receivable 500000.00 10057385.11
Total 500000.00 10057385.11
Receivable financing Changes in the period and changes in fair value
□ Applicable √Not applicable
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses please
refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
Other explanation:
Nil
7. Accounts paid in advance
(1) By account age
Unit: RMB/CNY
Ending balance Opening balance
Account ages
Amount Proportion Amount Proportion
Within one year 7996570.95 100.00% 39454164.61 99.52%
1-2 years 106781.00 0.27%
2-3 years 82309.50 0.21%
Total 7996570.95 -- 39643255.11 --
Explanation on reasons of failure to settle on important account paid in advance with age over one year:
Nil
(2) Top 5 account paid in advance at ending balance by prepayment object
Company Ending balance Proportion in accounts paid
in advance (%)
Qingdao Haidayuan Purchasing Service Co. 5045758.04 63.10
Ltd.AU Optronics Co. Ltd. 898941.82 11.24
HONGKONGJUYUEOPTOELECTRONICS 740601.31 9.26
Guangzhou Shikun Electronic Technology Co. 318493.81 3.98
Ltd.Wuhan Jufutai Technology Co. Ltd. 288000.00 3.60
Total 7291794.98 91.19
140SHENZHEN ZHONGHENG HUAFA CO. LTD.
Other explanation:
Nil
8. Other account receivable
Unit: RMB/CNY
Item Ending balance Opening balance
Other account receivable 4520412.70 4466949.96
Total 4520412.70 4466949.96
1) Category of interest receivable
Unit: RMB/CNY
Item Ending balance Opening balance
2) Significant overdue interest
Unit: RMB/CNY
Whether there is
Borrower Ending balance Overdue time Reason for overdue impairment and its
judgment basis
Other explanation:
3) Accrual of bad debt provision
□ Applicable √Not applicable
(2) Dividend receivable
1) Category of dividend receivable
Unit: RMB/CNY
Item (or invested unit) Ending balance Opening balance
2) Important dividend receivable with account age over one year
Unit: RMB/CNY
Whether there is
Reasons for
Item (or invested unit) Ending balance Account age impairment and its
non-recovery
judgment basis
141SHENZHEN ZHONGHENG HUAFA CO. LTD.
3) Accrual of bad debt provision
□ Applicable √Not applicable
Other explanation:
(3) Other account receivable
1) Other account receivable by nature
Unit: RMB/CNY
Nature Ending book balance Opening book balance
Margin & deposit 1829768.00 1681688.00
Borrow money 1481984.12 2124073.12
Intercourse funds 7844053.53 8924093.42
Rental receivable 6999971.21 6224167.48
Other 925152.02 364429.79
Less: Bad debt provision -14560516.18 -14851501.85
Total 4520412.70 4466949.96
2) Accrual of bad debt provision
Unit: RMB/CNY
Phase I Phase II Phase III
Expected credit losses for Expected credit losses for
Expected credit
Bad debt provision the entire duration the entire duration (with Total
losses over next 12
(without credit credit impairment
months
impairment occurred) occurred)
Balance on1 Jan. 2021 111.75 14851390.10 14851501.85
Balance of 1 Jan. 2021
————————
in the period
--Transfer to the
111.7514851390.1014851501.85
second stage
Reversal in Current
111.75290873.92290985.67
Period
Balance on Dec. 31
14560516.1814560516.18
2021
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age
142SHENZHEN ZHONGHENG HUAFA CO. LTD.
Unit: RMB/CNY
Account ages Book balance
Within one year (one year included) 1298683.16
1-2 years 1725961.49
2-3 years 265630.40
Over 3 years 15790653.83
3-4 years 15790653.83
Total 19080928.88
3) Bad debt provision accrual collected or reversal in the period
Bad debt provision accrual in the period:
Unit: RMB/CNY
Amount changed in the period
Opening
Category Collected or Ending balance
balance Accrual Written-off Other
reversal
Accounts
receivable with
provision for 14851390.
290873.9214560516.18
bad debts based 10
on individual
assessments
Other receivable
with provision
111.75111.75
for bad debts by
combination
14851501.
Total 290985.67 14560516.18
85
Including the important amount collected or switches back in the period:
Unit: RMB/CNY
Company Amount collected or switches back Way of collection
4) The actual written-off other receivables in the current period
Unit: RMB/CNY
Item Written-off amount
Including the important written-off situation of other receivables:
Unit: RMB/CNY
Name Nature of other Written-off Written-off reason Written-off Whether the
143SHENZHEN ZHONGHENG HUAFA CO. LTD.
receivables amount procedure payment is
performed generated by
related party
transactions
Description of other receivables written-off:
No significant other receivables actually written off in the current period
5) Top 5 other receivables collected by arrears party at ending balance
Unit: RMB/CNY
Proportion in total
Ending balance of
Company Nature Ending balance Account ages other receivables
bad debt provision
at period-end
Portman Rental receivable 4021734.22 Over 3 years 21.08% 4021734.22
Jackfang
Investment 1F Rental receivable 1380608.00 Over 3 years 7.24% 1380608.00
1076
TPV Electronic
Technology Margin 800000.00 Over 3 years 4.19%
(Fujian) Co. Ltd.
Jiang Hong Intercourse funds 600000.00 Within 1 year 3.14%
Compensation for
Intercourse funds 555785.81 Over 3 years 2.91% 555785.81
traffic accidents
Total -- 7358128.03 -- 38.56% 5958128.03
6) Receivables involving government subsidies
Unit: RMB/CNY
Estimated time
Government subsidy
Name Ending balance Ending account age amount and basis of
item
receipt
Nil
7) Other receivable for termination of confirmation due to the transfer of financial assets
Nil
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved
Nil
Other explanation:
144SHENZHEN ZHONGHENG HUAFA CO. LTD.
Nil
9. Inventories
Whether companies need to comply with the disclosure requirements of the real estate industry
No
(1) Category
Unit: RMB/CNY
Ending balance Opening balance
Inventories fall Inventories fall
provision or provision or
contract contract
Item
Book balance performance Book value Book balance performance Book value
costs costs
impairment impairment
provision provision
Raw materials 51401344.33 2456429.93 48944914.40 39735101.27 1691320.92 38043780.35
Inventory
32258568.102210144.5830048423.5227562913.381673369.8225889543.56
goods
Homemade
semi-finished 11797660.18 325374.92 11472285.26 6213029.56 29363.73 6183665.83
products
Low priced and
easily worn 141953.08 21905.99 120047.09 159646.13 110622.38 49023.75
articles
Total 95599525.69 5013855.42 90585670.27 73670690.34 3504676.85 70166013.49
(2) Inventories fall provision or contract performance costs impairment provision
Unit: RMB/CNY
Current increased Current decreased
Opening
Item Reversal or Ending balance
balance Accrual Other Other
write-off
Raw materials 1691320.92 1282197.94 517088.93 2456429.93
Inventory
1673369.821567086.391030311.632210144.58
goods
Homemade
semi-finished 29363.73 322794.12 26782.93 325374.92
products
145SHENZHEN ZHONGHENG HUAFA CO. LTD.
Low priced and
easily worn 110622.38 5128.21 93844.60 21905.99
articles
Total 3504676.85 3177206.66 1668028.09 5013855.42
(3) Explanation on capitalization of borrowing costs at ending balance of inventory
Nil
(4) Assets completed without settlement from construction contract at period-end
Nil
10. Contract assets
Unit: RMB/CNY
Ending balance Opening balance
Item Book Provision for Book Provision for
Book value Book value
balance impairment balance impairment
The amount and reasons for major changes in the book value of contract assets during the current period:
Unit: RMB/CNY
Item Change amount Reason for change
If the provision for bad debts of contract assets is made in accordance with the general model of expected credit losses please refer to
the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
Accrual provision for impairment of contract assets in the current period
Unit: RMB/CNY
Current
Item Current accrual Current reversal Reason
resell/Written-off
Other explanation:
11. Assets held for sale
Unit: RMB/CNY
Ending book Provision for Ending book Estimated Estimated
Item Fair value
balance impairment value disposal cost disposal time
Other explanation:
12. Non-current assets due within one year
Unit: RMB/CNY
146SHENZHEN ZHONGHENG HUAFA CO. LTD.
Item Ending balance Opening balance
Important debt investment/other debt investment
Unit: RMB/CNY
Ending balance Opening balance
Real Real
Creditor’s Rights Item Face Coupon Expiry Face Coupon Expiry
interest interest
value rate date value rate date
rate rate
Other explanation:
13. Other current assets
Unit: RMB/CNY
Item Ending balance Opening balance
Value-added tax to be deducted 3732033.86 4255643.19
Total 3732033.86 4255643.19
Other explanation:
Nil
14. Debt investment
Unit: RMB/CNY
Ending balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Important debt investment
Unit: RMB/CNY
Ending balance Opening balance
Real Real
Creditor’s Rights Item Face Coupon Expiry Face Coupon Expiry
interest interest
value rate date value rate date
rate rate
Provision for impairment accrual
Unit: RMB/CNY
Phase I Phase II Phase III
Expected credit losses for Expected credit losses for
Expected credit
Bad debt provision the entire duration the entire duration (with Total
losses over next 12
(without credit credit impairment
months
impairment occurred) occurred)
Balance of 1 Jan. 2021
————————
in the period
147SHENZHEN ZHONGHENG HUAFA CO. LTD.
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
Other explanation:
15. Other debt investment
Unit: RMB/CNY
Accumulat
ed loss
reserves
Fair value Cumulativ
Opening Accrued Ending recognized
Item changes in Cost e fair value Note
balance interest balance in other
this period changes
comprehen
sive
income
Important other debt investment
Unit: RMB/CNY
Ending balance Opening balance
Other Creditor’s Real Real
Face Coupon Expiry Face Coupon Expiry
Rights Item interest interest
value rate date value rate date
rate rate
Provision for impairment accrual
Unit: RMB/CNY
Phase I Phase II Phase III
Expected credit losses for Expected credit losses for
Expected credit
Bad debt provision the entire duration the entire duration (with Total
losses over next 12
(without credit credit impairment
months
impairment occurred) occurred)
Balance of 1 Jan. 2021
————————
in the period
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
Other explanation:
16. Long-term receivables
(1) Long-term receivables
Unit: RMB/CNY
Item Ending balance Opening balance Discount
148SHENZHEN ZHONGHENG HUAFA CO. LTD.
Book Bad debt Book Bad debt rate range
Book value Book value
balance provision balance provision
Bad debt provision impairment
Unit: RMB/CNY
Phase I Phase II Phase III
Expected credit losses for Expected credit losses for
Expected credit
Bad debt provision the entire duration the entire duration (with Total
losses over next 12
(without credit credit impairment
months
impairment occurred) occurred)
Balance of 1 Jan. 2021
————————
in the period
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
(2) Long-term receivables derecognized due to the transfer of financial assets
(3) The amount of assets and liabilities formed by the transfer of long-term receivables and continued
involvement
Other explanation
17. Long-term equity investment
Unit: RMB/CNY
Current changes (+ -)
Investm Ending
Cash
Openin ent Other balance
dividen Ending
g Additio gain/los compre of
Capital Other d or Impair balance
Enterpr balance nal s hensive depreci
reducti equity profit ment Other (book
ise (book investm recogni income ation
on change announ accrual value)
value) ent zed adjustm reserve
ced to
under ent s
issued
equity
I. Joint venture
II. Associated enterprise
Other explanation
18. Other equity instrument investment
Unit: RMB/CNY
Item Ending balance Opening balance
149SHENZHEN ZHONGHENG HUAFA CO. LTD.
Itemized disclosure of investment in non-trading equity instruments for the current period
Unit: RMB/CNY
Reasons
designated as
The amount of Reason for
fair value
comprehensive transferring
Recognized measurement
Cumulative Accumulated income comprehensive
Item dividend and its changes
gain loss transferred to income to
income included in
retained retained
other
earnings income
comprehensive
income
Other explanation:
19. Other non-current financial assets
Unit: RMB/CNY
Item Ending balance Opening balance
Other explanation:
20. Investment real estate
(1) Investment real estate measured at cost
√ Applicable □ Not applicable
Unit: RMB/CNY
Construction in
Item House and building Land use right Total
process
I. Original book value
1. Opening balance 133661686.94 133661686.94
2. Current increased 1137207.00 1137207.00
(1) Outsourcing
(2) Inventory\fixed
assets\construction in
process transfer-in
(3) Increased by
combination
(3) Increase in transfer
1137207.001137207.00
of fixed assets
3. Current decreased
(1) Disposal
150SHENZHEN ZHONGHENG HUAFA CO. LTD.
(2) Other transfer-out
4. Ending balance 134798893.94 134798893.94
II. Accumulated
depreciation and
accumulated
amortization
1. Opening balance 86437024.67 86437024.67
2. Current increased 2170091.47 2170091.47
(1) Accrual or
1728330.291728330.29
amortization
(2) Increase in transfer
441761.18
of fixed assets
3. Current decreased
(1) Disposal
(2) Other transfer-out
4. Ending balance 88607116.14 88607116.14
III. Impairment
provision
1. Opening balance
2. Current increased
(1) Accrual
3. Current decreased
(1) Disposal
(2) Other transfer-out
4. Ending balance
IV. Book value
1. Ending book value 46191777.80 46191777.80
2. Opening book value 47224662.27 47224662.27
(2) Investment real estate measured by fair value
□ Applicable √Not applicable
151SHENZHEN ZHONGHENG HUAFA CO. LTD.
(3) Investment real estate without property certification held
Unit: RMB/CNY
Reason without property certification
Item Book value
held
Other explanation
21. Fixed assets
Unit: RMB/CNY
Item Ending balance Opening balance
Fixed assets 95031789.81 100747972.84
Disposal of fixed assets 92857471.69 92857471.69
Total 187889261.50 193605444.53
(1) Fixed asset
Unit: RMB/CNY
Means of
House Machinery Office Instrument Tool Mold
Item transportati Total
building equipment equipment equipment equipment equipment
on
I. Original
book value
1. Opening 73200617 95162467 3589808. 7286291. 3231378. 9160548. 24950960 21658207
balance .41 .54 82 60 03 05 .45 1.90
2. Current 1531558. 1218413. 2538946. 7011013.
985796.10111632.98624666.36
increased 08 87 54 93
(1)1531558.1218413.2538946.7011013.
985796.10111632.98624666.36
Purchasing 08 87 54 93
(2)
Constructio
n in
process
transfer-in
(3)
Increased
by
combinatio
n
152SHENZHEN ZHONGHENG HUAFA CO. LTD.
3. Current 1137207. 1567139. 3146622.
338261.1934383.3019189.5550442.47
decreased 00 04 55
(1)
1567139.2009415.
Disposal or 338261.19 34383.30 19189.55 50442.47
0455
scrapping
(2)
Transfer
1137207.1137207.
into
0000
investment
real estate
4. Ending 72063410 95810002 3473225. 8470322. 3424013. 9766024. 27439464 22044646
balance .41 .45 86 17 01 86 .52 3.28
II.Accumulati
ve
depreciatio
n
1. Opening 20835498 62315100 2530234. 6270774. 2684698. 4790714. 16407078 11583409
balance .92 .16 21 21 25 70 .61 9.06
2. Current 2046964. 4290819. 1216626. 3527754. 11851634
414050.74212387.06143031.72
increased 00 55 29 72 .08
2046964.4290819.1216626.3527754.11851634
(1) Accrual 414050.74 212387.06 143031.72
00552972.08
3. Current 1476650. 2271059.
441761.18299485.3431059.915310.4216792.03
decreased 79 67
(1)
1476650.2271059.
Disposal or 299485.34 31059.91 5310.42 16792.03
7967
scrapping
(2)
Transfer
into 441761.18 441761.18
investment
real estate
4. Ending 22443385 66166210 1467827. 6590289. 2881961. 5946957. 19918041 12541467
balance .19 .12 24 96 79 87 .30 3.47
III.Depreciatio
n reserves
1. Opening
153SHENZHEN ZHONGHENG HUAFA CO. LTD.
balance
2. Current
increased
(1) Accrual
3. Current
decreased
(1)
Disposal or
scrapping
4. Ending
balance
IV. Book
value
1. Ending 49620025 29643792 2005398. 1880032. 3819066. 7521423. 95031789
542051.22
book value .22 .33 62 21 99 22 .81
2. Opening 52365118 32847367 1059574. 1015517. 4369833. 8543881. 10074797
546679.78
book value .49 .38 61 39 35 84 2.84
(2) Temporarily idle fixed assets
Unit: RMB/CNY
Original book Accumulated Provision for
Item Book value Note
value depreciation impairment
(3) Fixed assets leasing-out by operational lease
Unit: RMB/CNY
Item Ending book value
House building 695445.82
Total 695445.82
(4) Fixed assets without property certification held
Unit: RMB/CNY
Reason without property certification
Item Book value
held
Other explanation
154SHENZHEN ZHONGHENG HUAFA CO. LTD.
(5) Disposal of fixed assets
Unit: RMB/CNY
Item Ending balance Opening balance
Renovation of Gongming Huafa Electric
92857471.6992857471.69
Town
Total 92857471.69 92857471.69
Other explanation
22. Construction in process
Unit: RMB/CNY
Item Ending balance Opening balance
Construction in process 740000.00 740000.00
Total 740000.00 740000.00
(1) Construction in process
Unit: RMB/CNY
Ending balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Huafa Building
Reconstruction 240000.00 240000.00 240000.00 240000.00
Project
Gongming
Electronic City
500000.00500000.00500000.00500000.00
Reconstruction
Project
Total 740000.00 740000.00 740000.00 740000.00
(2) Changes of major projects under construction
Unit: RMB/CNY
Fixed Propor Accum includi Interes
Other
Openi Curren assets tion of ulated ng: t
decrea Ending
ng t transfe project Progre amoun interes capital Source of
Item Budget sed in balanc
balanc increas r-in in invest ss t of t ization funds
the e
e ed the ment interes capital rate of
Period
Period in t ized the
155SHENZHEN ZHONGHENG HUAFA CO. LTD.
budget capital amoun year
ization t of the
year
(3) The provision for impairment of construction projects
Unit: RMB/CNY
Item Current accrual amount Accrual reason
Other explanation
(4) Engineering materials
Unit: RMB/CNY
Ending balance Opening balance
Item Provision for Book Provision for
Book balance Book value Book value
impairment balance impairment
Other explanation:
23. Productive biological assets
(1) Productive biological assets measured by cost
□ Applicable √Not applicable
(2) Productive biological assets measured by fair value
□ Applicable √Not applicable
24. Oil and gas assets
□ Applicable √Not applicable
25. Right to use assets
Unit: RMB/CNY
Item House building Total
I. Original book value
1. Opening balance
2. Current increased 313948.08 313948.08
Revaluation adjustment 313948.08 313948.08
3. Current decreased
156SHENZHEN ZHONGHENG HUAFA CO. LTD.
4. Ending balance 313948.08 313948.08
II. Accumulative depreciation
1. Opening balance
2. Current increased 104649.36 104649.36
(1) Accrual 104649.36 104649.36
3. Current decreased
(1) Disposal
4. Ending balance 104649.36 104649.36
III. Depreciation reserves
1. Opening balance
2. Current increased
(1) Accrual
3. Current decreased
(1) Disposal
4. Ending balance
IV. Book value
1. Ending book value 209298.72 209298.72
2. Opening book value
Other explanation:
26. Intangible assets
(1) Intangible assets
Unit: RMB/CNY
Non-patented Computer
Item Land use right Patent right Total
technology software
I. Original book
value
1. Opening
55415814.363113396.4158529210.77
balance
157SHENZHEN ZHONGHENG HUAFA CO. LTD.
2. Current
58838.5158838.51
increased
(1) Purchasing 58838.51 58838.51
(2) Internal R&D
(3) Increased by
combination
3. Current
decreased
(1) Disposal
4. Ending balance 55415814.36 3172234.92 58588049.28
II. Accumulated
amortization
1. Opening
16651035.42948089.6517599125.07
balance
2. Current
1445488.89262434.331707923.22
increased
(1) Accrual 1445488.89 262434.33 1707923.22
3. Current
decreased
(1) Disposal
4. Ending balance 18096524.31 1210523.98 19307048.29
III. Depreciation
reserves
1. Opening
109427.90109427.90
balance
2. Current
increased
(1) Accrual
3. Current
decreased
(1) Disposal
158SHENZHEN ZHONGHENG HUAFA CO. LTD.
4. Ending balance 109427.90 109427.90
IV. Book value
1. Ending book
37319290.051852283.0439171573.09
value
2. Opening book
38764778.942055878.8640820657.80
value
The proportion of intangible assets form by internal R&D in total book value of intangible assets at period-end 0.00%
(2) The situation of land use rights that have not completed the ownership certificate
Unit: RMB/CNY
Reason without property certification
Item Book value
held
Other explanation:
27. Development expenditure
Unit: RMB/CNY
Increase in the current period Decrease in the current period
Internal
Recognize Transferred
Opening developme Ending
Item d as into current
balance nt Other balance
intangible profit and
expenditur
assets loss
e
Total
Other explanation
28. Goodwill
(1) Goodwill original book value
Unit: RMB/CNY
Invested name Increase in the current period Decrease in the current period
or matters Opening Formed by
Ending balance
forming balance business Dispose
goodwill combination
Total
159SHENZHEN ZHONGHENG HUAFA CO. LTD.
(2) Goodwill provision for impairment
Unit: RMB/CNY
Invested name Increase in the current period Decrease in the current period
or matters Opening
Ending balance
forming balance Accrual Dispose
goodwill
Total
Information about the asset group or combination of asset groups where the goodwill is located
Explain the process of goodwill impairment testing key parameters (such as the growth rate of the forecast period when the present
value of future cash flows are expected the growth rate of the stable period the profit rate the discount rate the forecast period etc.)
and the confirmation method of the impairment loss of goodwill:
The impact of goodwill impairment testing
Other explanation
29. Long-term deferred expenses
Unit: RMB/CNY
Amortized in
Item Opening balance Current increased Other decreased Ending balance
Period
Lawyer fee 969444.45 969444.45
Amortization of
77445.31659552.01224104.21512893.11
cloud service fees
Huafa Building
Central Air
150787.00150787.00
Conditioning
Overhaul Project
China Telecom
Corporation
4800.004800.00
Limited Shenzhen
Branch
Huafa Building
Elevator Overhaul 60000.00 6666.67 53333.33
Project
Total 77445.31 1844583.46 230770.88 1691257.89
Other explanation
160SHENZHEN ZHONGHENG HUAFA CO. LTD.
30. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets without offset
Unit: RMB/CNY
Ending balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
differences assets differences assets
Provision for assets
29705573.646946556.3228458252.746761085.38
impairment
Accrual liability 801159.18 200289.79 64411.00 16102.75
Deferred income 3565560.00 534834.00 4043640.00 606546.00
Total 34072292.82 7681680.11 32566303.74 7383734.13
(2) Deferred income tax liabilities that are not offset
Unit: RMB/CNY
Ending balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
(3) Amount of deferred income tax asset and deferred income tax liability after trade-off
Unit: RMB/CNY
Ending balance of Trade-off between the Opening balance of
Trade-off between the
deferred income tax deferred income tax deferred income tax
Item deferred income tax
assets or liabilities assets and liabilities at assets or liabilities
assets and liabilities
after off-set period-begin after off-set
Deferred income tax
7681680.117383734.13
assets
(4) Deferred income tax asset without recognized
Unit: RMB/CNY
Item Ending balance Opening balance
Deductible temporary differences 3163837.81 3163837.81
Deductible loss 5081160.28 4098904.69
Total 8244998.09 7262742.50
161SHENZHEN ZHONGHENG HUAFA CO. LTD.
(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
Unit: RMB/CNY
Year Ending amount Opening amount Note
2022742401.79
2023404207.57
20241318067.59
20251634227.74
20261587.57
2026 and future years
(applicable to high-tech
5079572.71
enterprises and
technology-based SMEs)
Total 5081160.28 4098904.69 --
Other explanation:
31. Other non-current assets
Unit: RMB/CNY
Ending balance Opening balance
Item Book Impairment Book Impairment
Book value Book value
balance provision balance provision
Prepaid long-term asset acquisitions
66000.0066000.00
Total 66000.00 66000.00
Other explanation:
32. Short-term borrowings
(1) Category
Unit: RMB/CNY
Item Ending balance Opening balance
Secured portfolio loan 19190857.00 12527808.00
Mortgage loan 7290000.00
Total 26480857.00 12527808.00
Explanation on category of short-term loans:
162SHENZHEN ZHONGHENG HUAFA CO. LTD.
(2) Short-term loans that have been overdue and have not been repaid
The total amount of short-term loans that were overdue and not repaid at the end of the period was RMB 0.00 and the important
short-term loans that were overdue and not repaid are as follows:
Unit: RMB/CNY
Borrower Ending balance Borrowing rate Overdue time Overdue interest rate
Other explanation:
33. Trading financial liabilities
Unit: RMB/CNY
Item Ending balance Opening balance
Including:
Including:
Other explanation:
34. Derivative financial liabilities
Unit: RMB/CNY
Item Ending balance Opening balance
Other explanation:
35. Notes payable
Unit: RMB/CNY
Category Ending balance Opening balance
Bank acceptance draft 21554981.30 37416381.20
Total 21554981.30 37416381.20
Totally 0 Yuan due note payable are paid at period-end
36. Account payable
(1) Account payable
Unit: RMB/CNY
Item Ending balance Opening balance
Within 1 year (including 1 year) 76362296.93 85862573.31
Over one year 12167182.03 12455666.57
Total 88529478.96 98318239.88
163SHENZHEN ZHONGHENG HUAFA CO. LTD.
(2) Major account payable over one year
Unit: RMB/CNY
Item Ending balance Reasons for non-payment or carry over
Shenzhen Yuehai Global Logistics Co.
2858885.97 Without settlement
Ltd.LG 1906267.50 Without settlement
Tokin Electronics (Nanjing) Plasma Co.
617963.45 Without settlement
Ltd.Total 5383116.92 --
Other explanation:
37. Accounts received in advance
(1) Accounts received in advance
Unit: RMB/CNY
Item Ending balance Opening balance
(2) Important accounts received in advance with account age over one year
Unit: RMB/CNY
Item Ending balance Reasons for outstanding or carry-over
38. Contract liabilities
Unit: RMB/CNY
Item Ending balance Opening balance
Sales received in advance 473034.32 207945.34
Lease received in advance 263321.38 79195.32
Total 736355.70 287140.66
Amount and reasons for significant changes in book value during the reporting period
Unit: RMB/CNY
Item Change Amount Reason for change
39. Wage payable
(1) Wage payable
Unit: RMB/CNY
164SHENZHEN ZHONGHENG HUAFA CO. LTD.
Increase during the Decrease during the
Item Opening balance Ending balance
period period
I. Short-term benefits 5704816.53 61921937.31 63782372.77 3844381.07
II. Post-employment
benefits-defined 32550.06 4354757.45 4387307.51
contribution plans
III. Dismiss welfare 587024.54 587024.54
Total 5737366.59 66863719.30 68756704.82 3844381.07
(2) Short-term benefits
Unit: RMB/CNY
Increase during the Decrease during the
Item Opening balance Ending balance
period period
1. Wages bonuses
4709654.9253669173.5355565267.342813561.11
allowances and subsidies
2. Employee benefits 754.00 5764924.60 5714287.20 51391.40
3. Social insurance
37267.032216829.662231808.7122287.98
premium
Including:
35408.952010851.362023972.3322287.98
Medical insurance
Work
768.3026923.6227691.92
injury insurance
Maternity
1089.78179054.68180144.46
insurance
4. Housing
24310.00271009.52271009.5224310.00
accumulation fund
5. Labor union
expenditure and
932830.58932830.58
personnel education
expense
Total 5704816.53 61921937.31 63782372.77 3844381.07
(3) Defined contribution plans
Unit: RMB/CNY
Increase during the Decrease during the
Item Opening balance Ending balance
period period
1. Basic endowment 31361.59 4183959.13 4215320.72
165SHENZHEN ZHONGHENG HUAFA CO. LTD.
insurance
2. Unemployment
1188.47170798.32171986.79
insurance
Total 32550.06 4354757.45 4387307.51
Other explanation:
40. Taxes payable
Unit: RMB/CNY
Item Ending balance Opening balance
VAT 4271423.08 2980929.11
Corporate income tax 7387839.94 6558810.68
Individual income tax 22943.65 25195.14
Urban maintenance and construction tax 658864.50 1902436.52
Property tax 544525.98 318681.51
Land use tax 107577.53 33280.48
Educational surtax 283138.75 816098.15
Local educational surtax 159099.46 418611.03
Dike fee 1665.00 1665.00
Stamp tax 34839.80 28895.00
Disposal fund of waste electrical
1185200.001120040.00
products
Total 14657117.69 14204642.62
Other explanation:
41. Other accounts payable
Unit: RMB/CNY
Item Ending balance Opening balance
Interest payable 113080.26 26335.66
Other payable 30335832.88 27581945.35
Total 30448913.14 27608281.01
(1) Interest payable
Unit: RMB/CNY
Item Ending balance Opening balance
166SHENZHEN ZHONGHENG HUAFA CO. LTD.
Interest of short-term loans payable 113080.26 26335.66
Total 113080.26 26335.66
Significant overdue and unpaid interest:
Unit: RMB/CNY
Loan unit Overdue amount Reason for overdue
Other explanation:
(2) Dividend payable
Unit: RMB/CNY
Item Ending balance Opening balance
Other explanation including important dividends payable that have not been paid for more than 1 year should disclose the reasons
for the non-payment:
(3) Other accounts payable
1) Other account payable by nature
Unit: RMB/CNY
Item Ending balance Opening balance
Margin & deposit 11702750.67 11523316.67
Lease management fee 3647788.39 3227985.19
Intercourse funds 5411882.45 5546586.51
After sale and repairment 1920745.00 1454341.68
Energy consumption (Water electricity
2554906.951443603.28
and steam)
Shipping 1762758.03 902242.26
Reserve fund 1300000.00 1346345.00
Other 2035001.39 2137524.76
Total 30335832.88 27581945.35
2) Significant other account payable with over one year age
Unit: RMB/CNY
Item Ending balance Reasons for non-payment or carry over
Shenzhen SED Property Development
2158060.75 Without settlement
Co. Ltd.Shenzhen Huayongxing Environmental 1000000.00 Deposit
167SHENZHEN ZHONGHENG HUAFA CO. LTD.
Protection Technology Co. Ltd.Linghang Technology (Shenzhen) Co.
656345.28 Without settlement
Ltd
Shenzhen Tongxing Electronics Co. Ltd. 578259.83 Without settlement
Shenzhen Yongdasheng Investment
558970.00 Deposit
Development Co. Ltd.Total 4951635.86 --
Other explanation
42. Liabilities held for sale
Unit: RMB/CNY
Item Ending balance Opening balance
Other explanation:
43. Non-current liabilities due within one year
Unit: RMB/CNY
Item Ending balance Opening balance
Long-term loans due within one year 61000000.00 12000000.00
Lease liabilities due within one year 104400.61
Total 61104400.61 12000000.00
Other explanation:
44. Other current liabilities
Unit: RMB/CNY
Item Ending balance Opening balance
Unterminated confirmation on note
64546944.9418309336.77
receivable
Pending sales tax 97335.67 13636.04
Total 64644280.61 18322972.81
Changes in short-term bonds payable:
Unit: RMB/CNY
Premiu Repay
Interest
Bond Issue Openin m and ment in
Name Face Issue Current accrued Ending
maturit Amoun g discoun the
of bond value date issue at face balance
y t balance t current
value
amortiz period
168SHENZHEN ZHONGHENG HUAFA CO. LTD.
ation
Other explanation:
45. Long-term loans
(1) Category
Unit: RMB/CNY
Item Ending balance Opening balance
Mortgage loan 61000000.00
Total 61000000.00
Description of Long-term loans classification:
Other explanation including interest rate range:
46. Bonds payable
(1) Bonds payable
Unit: RMB/CNY
Item Ending balance Opening balance
(2) Changes in increase or decrease in bonds payable (excluding preferred stocks perpetual bonds and
other financial instruments classified as financial liabilities)
Unit: RMB/CNY
Premiu
Repay
Interest m and
Bond Issue Openin ment in
Name Face Issue Current accrued discoun Ending
maturit Amoun g the
of bond value date issue at face t balance
y t balance current
value amortiz
period
ation
Total -- -- --
(3) Description of the conditions and time for the conversion of convertible corporate bonds
(4) Description of other financial instruments classified as financial liabilities
Basic situation of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
Unit: RMB/CNY
169SHENZHEN ZHONGHENG HUAFA CO. LTD.
Financial Increase in the current Decrease in the current
Opening of period Ending of period
instruments period period
issued Amount Book value Amount Book value Amount Book value Amount Book value
Explanation of the basis for the classification of other financial instruments into financial liabilities
Other explanation
47. Lease liabilities
Unit: RMB/CNY
Item Ending balance Opening balance
Lease Payments 224721.00
Less: Unrecognized financing charges -5219.39
Less: lease liabilities due within one year -104400.61
Total 115101.00
Other explanation
48. Long-term payable
Unit: RMB/CNY
Item Ending balance Opening balance
(1) List long-term payable according to the nature of the payment
Unit: RMB/CNY
Item Ending balance Opening balance
Other explanation:
(2) Special accounts payable
Unit: RMB/CNY
Increase in the Decrease in the Cause of
Item Opening balance Ending balance
current period current period formation
Other explanation:
49. Long-term Wages payable
(1) Long-term Wages payable
Unit: RMB/CNY
Item Ending balance Opening balance
170SHENZHEN ZHONGHENG HUAFA CO. LTD.
(2) Changes in defined benefit plans
Present value of defined benefit plan obligations:
Unit: RMB/CNY
Item The Period Last Period
Plan assets:
Unit: RMB/CNY
Item The Period Last Period
Defined benefit plan net liabilities (net assets)
Unit: RMB/CNY
Item The Period Last Period
Description of the content of the defined benefit plan and related risks the impact on the company's future cash flow time and
uncertainty:
Explanation of major actuarial assumptions and sensitivity analysis results of defined benefit plans:
Other explanation:
50. Accrual liability
Unit: RMB/CNY
Item Ending balance Opening balance Causes
Pending action 801159.18 64411.00 Business and Labor Disputes
Total 801159.18 64411.00 --
Other explanations including important assumptions and estimation about important estimated liabilities:
51. Deferred income
Unit: RMB/CNY
Increase during Decrease during
Item Opening balance Ending balance Causes
the period the period
Industrial
Government
4043640.00 478080.00 3565560.00 Transformation
subsidy
Subsidy
Total 4043640.00 478080.00 3565560.00 --
Items involving Government subsidy:
Unit: RMB/CNY
New Amount Amount Amount of
Assets-rel
Opening subsidy reckoned included cost and Other Ending
Liability ated/Inco
balance increased in in other expense change balance
me-related
in the non-operat income in offset in
171SHENZHEN ZHONGHENG HUAFA CO. LTD.
period ing the current the current
income in period period
the period
Provincial
special
fund for
transforma
tion and 200000.0 Assets-rel
1600000.001400000.00
upgrading 0 ated
of
traditional
industry
for 2018
Incentive
fund for
Wuhan
industrial
intelligent
Assets-rel
transforma 472640.00 59080.00 413560.00
ated
tion
demonstra
tion
project in
2019
Special
funds for
industrial
investment
and
technologi
219000.0 Assets-rel
cal 1971000.00 1752000.00
0 ated
transforma
tion and
intelligent
transforma
tion in
2020
478080.0
Total 4043640.00 3565560.00
0
Other explanation:
172SHENZHEN ZHONGHENG HUAFA CO. LTD.
52. Other non-current liabilities
Unit: RMB/CNY
Item Ending balance Opening balance
Other explanation:
53. Share capital
Unit: RMB/CNY
Changes in the Period (+-)
Shares
Opening Ending
Issuing new transfer from
balance Bonus shares Other Subtotal balance
shares public
reserves
283161227.283161227.
Total shares
0000
Other explanation:
54. Other equity instruments
(1) Basic information of other financial instruments such as preferred stocks and perpetual bonds issued at
the end of the period
(2) Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of the
period
Unit: RMB/CNY
Financial Increase in the current Decrease in the current
Opening of period Ending of period
instruments period period
issued Amount Book value Amount Book value Amount Book value Amount Book value
Other equity instruments' changes in the current period explanations of the reasons for the changes and the basis for related
accounting treatments:
Other explanation:
55. Capital public reserve
Unit: RMB/CNY
Increase during the Decrease during the
Item Opening balance Ending balance
period period
Capital premium
96501903.0296501903.02
(equity premium)
173SHENZHEN ZHONGHENG HUAFA CO. LTD.
Other capital public
50075868.4850075868.48
reserve
Total 146577771.50 146577771.50
Other explanation including changes and reasons of changes:
56. Treasury stocks
Unit: RMB/CNY
Increase in the current Decrease in the current
Item Opening balance Ending balance
period period
Other explanation including changes in the current period and explanations of the reasons for the changes:
57. Other comprehensive income
Unit: RMB/CNY
The Period
Less:
written
Less: in other
written in compreh
other ensive
comprehen income
sive in
Account Belong to Endin
income in previous Less: Belong to
Opening before minority g
Item previous period income parent
balance income sharehold balanc
period and and tax company
tax in the ers after e
carried carried expense after tax
year tax
forward to forward
gains and to
losses in retained
current earnings
period in
current
period
Other explanation including the adjustment on initial recognition for arbitrage items that transfer from the effective part of cash flow
hedge profit/loss:
58. Reasonable reserve
Unit: RMB/CNY
Increase in the current Decrease in the current
Item Opening balance Ending balance
period period
174SHENZHEN ZHONGHENG HUAFA CO. LTD.
Other explanation including changes and reasons for changes:
59. Surplus public reserve
Unit: RMB/CNY
Increase during the Decrease during the
Item Opening balance Ending balance
period period
Statutory surplus
21322617.2521322617.25
reserves
Discretionary surplus
56068976.0056068976.00
reserve
Total 77391593.25 77391593.25
Other explanation including changes and reasons for changes:
60. Retained profit
Unit: RMB/CNY
Item Current period Last period
Retained profit at the end of the previous period
-170881854.46
before adjustment
Retained profit at period-begin after adjustment -170881854.46
Add: net profit attributable to owners of the
7201902.02
parent company
Retained profit at period-end -163679952.44
Details about adjusting the retained profits at the Opening of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retained
profits at the Opening of the period amounting to 0 Yuan.
2) The changes in accounting policies affect the retained profits at the Opening of the period amounting to 0 Yuan.
3) The major accounting error correction affects the retained profits at the Opening of the period amounting to 0 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the Opening of the period amounting to 0 Yuan.
5) Other adjustments affect the retained profits at the Opening of the period amounting to 0 Yuan
61. Operating revenue and cost
Unit: RMB/CNY
Current Period Last Period
Item
Revenue Cost Revenue Cost
Main business 683791931.51 651462180.48 617385012.51 575728898.74
Other business 81819317.19 31376717.70 74357256.61 37499795.77
175SHENZHEN ZHONGHENG HUAFA CO. LTD.
Total 765611248.70 682838898.18 691742269.12 613228694.51
Whether the lower of the audited net profit before and after deduction of non-recurring gains and losses is negative
□Yes √No
Information relating to revenue:
Unit: RMB/CNY
Category Branch 1 Branch 2 Total
Product Types
Including:
Classification by
business area
Including:
Market or customer
type
Including:
Contract Types
Including:
Classification by time
of goods transfer
Including:
Classification by
contract duration
Including:
Classification by sales
channel
Including:
Total
Information relating to performance obligations:
Nil
Information related to the transaction price apportioned to the remaining performance obligations:
176SHENZHEN ZHONGHENG HUAFA CO. LTD.
The amount of income corresponding to the performance obligations that have been signed at the end of this reporting period but
have not yet been fulfilled or have not done with fulfillment is 0.00 yuan among them yuan of revenue is expected to be recognized
in YEAR yuan of revenue is expected to be recognized in YEAR and yuan of revenue is expected to be recognized in YEAR.Other explanation
62. Tax and surcharges
Unit: RMB/CNY
Item Current Period Last Period
Urban maintenance and construction tax 287231.63 1016287.94
Educational surtax 130093.63 435551.94
Property tax 1598772.50 1037125.69
Land use tax 714389.23 434724.29
Vehicle use tax 1260.00 360.00
Stamp tax 556368.80 421993.80
Local education development fee 75068.08 229808.32
Total 3363183.87 3575851.98
Other explanation:
63. Sales expense
Unit: RMB/CNY
Item Current Period Last Period
Employee compensation 3103186.57 3181384.76
Commodity inspection fee 1226.42 2648430.44
Customs fee 90913.66
Commodity loss 2527135.78 4869738.37
After-sales service fee 2068337.92 3815389.24
Business entertainment expense 409140.20 198137.01
Other 331459.16 613767.12
Total 8440486.05 15417760.60
Other explanation:
64. Administrative expense
Unit: RMB/CNY
Item Current Period Last Period
Salary 11728934.97 9921865.34
177SHENZHEN ZHONGHENG HUAFA CO. LTD.
Depreciation 1708723.67 2208645.49
Social security fee 2180030.41 799110.40
Business entertainment expense 5737388.03 5592000.14
Employee benefits 1929326.14 790303.01
Travel expenses 1462595.61 1449073.69
Depreciation and amortization cost 1817485.87 1605138.91
Transportation expenses 655619.85 572727.46
Intermediary agency service fee 2411189.41 1919335.23
Security fee 2335296.53 2098103.57
Repair cost 3228502.09 2991269.94
Office expenses 1695832.67 1095896.50
Communication fee 132707.00 150322.79
Amortization of low-value consumables 15873.75 271997.21
Securities Information Disclosure Fee 177083.00 283386.75
Litigation fee 959929.40 150400.00
Lease fee 933873.20 1048880.52
Staff education and labor union funds 17343.14 14603.40
Water and electricity 682878.59 152374.57
Other expenses 1674218.60 1365784.19
Total 41484831.93 34481219.11
Other explanation:
65. R& D expenses
Unit: RMB/CNY
Item Current Period Last Period
Employee compensation 6326069.12 4791827.59
Direct material input 2653046.85 1644898.53
Depreciation and amortization 995487.86 593756.40
Power and manufacturing cost 702049.86 120699.24
Other 118219.05 134652.08
Total 10794872.74 7285833.84
Other explanation:
178SHENZHEN ZHONGHENG HUAFA CO. LTD.
66. Financial expense
Unit: RMB/CNY
Item Current Period Last Period
Interest costs 7871921.48 8508919.02
Less: Interest income 249118.01 838314.39
Exchange loss 4056759.31 8048826.28
Less: exchange gains 4078992.15 3248154.95
Handing expense 193748.11 167866.93
Other 1160.00 1560.00
Total 7795478.74 12640702.89
Other explanation:
67. Other income
Unit: RMB/CNY
Sources Current Period Last Period
Three-agency handling fee for individual
3553.356113.66
tax
Provincial special fund for
transformation and upgrading of 59080.00 59080.00
traditional industry for 2018
Incentive fund for Wuhan industrial
intelligent transformation demonstration 200000.00 200000.00
project in 2019
Special funds for industrial investment
and technological transformation and 219000.00 219000.00
intelligent transformation in 2020
Enterprise stabilization subsidy refund 232313.00
Subsidies for training on behalf of
1016000.00
workers
2020 Caidian District Patent Award Fund 12000.00
2020 Municipal Manufacturing and
Internet Integration Development 520000.00
Special Fund
2016-2017 Patent Grant Funds 6000.00
Wu Ke [2017] No. 17 High-tech
50000.00
Cultivation Subsidy
179SHENZHEN ZHONGHENG HUAFA CO. LTD.
2021 High-end Enterprise Cultivation
50000.00
Related Rewards (Re-accreditation)
2021 Municipal Foreign Trade and
341900.00
Economic Development Special Fund
Enterprises absorb employment
compensation funds for poverty 12000.00
alleviation labor
2020 Central Foreign Economic and
Trade Development Special Fund 156200.00
(Processing Trade)
Total 1097733.35 2264506.66
68. Investment income
Unit: RMB/CNY
Item Current Period Last Period
Investment income from financial products 290069.30 165317.73
Total 290069.30 165317.73
Other explanation:
69. Net exposure hedging income
Unit: RMB/CNY
Item The Period Last Period
Other explanation:
70 Fair value change income
Unit: RMB/CNY
Sources of income from changes in Fair
The Period Last Period
value
Other explanation:
71. Credit impairment loss
Unit: RMB/CNY
Item Current Period Last Period
Bad debt loss of other account receivable 290985.67 213089.45
Credit impairment loss of account
-29127.99-5705.72
receivable
180SHENZHEN ZHONGHENG HUAFA CO. LTD.
Total 261857.68 207383.73
Other explanation:
72. Losses on assets impairment
Unit: RMB/CNY
Item Current Period Last Period
II. Inventory falling price loss and
impairment loss of contract performance -1509178.57 170241.33
cost
Total -1509178.57 170241.33
Other explanation:
73. Asset disposal income
Unit: RMB/CNY
Source of asset disposal income Current Period Last Period
Disposal gains arising from the disposal
of not held for sale fixed assets 6442.36 817533.49
\intangible assets
Total 6442.36 817533.49
74. Non-operating income
Unit: RMB/CNY
Amount included in current
Item Current Period Last Period
non-recurring profits or losses
Government subsidy 200000.00 465079.80 200000.00
Other 1158669.18 23577.50 1158669.18
Total 1358669.18 488657.30 1358669.18
Government subsidy reckoned into current gains/losses:
Unit: RMB/CNY
Subsidy
impact The special Assets-rela
Issuing Offering Amount in Amount in
Item Nature current subsidy ted/Income
subject causes the Period last period
gains/losse (Y/N) -related
s (Y/N)
2020 The
Income-rel
Enterprise- Award governmen N N 200000.00
ated
School t subsidy
181SHENZHEN ZHONGHENG HUAFA CO. LTD.
Joint obtained
Innovation for
Center engaging in
Filing the state to
Award encourage
and support
specific
industries
and
tradings
(obtained
in
accordance
with the
law by
national
policy)
The
governmen
t subsidy
obtained
for
2019
engaging in
Central
the state to
Foreign
encourage
Economic
and support
and Trade
specific Income-rel
Developme Subsidy N N 210900.00
industries ated
nt Special
and
Fund
tradings
Processing
(obtained
Trade
in
Matters
accordance
with the
law by
national
policy)
Steady
The
growth in
governmen
foreign
t subsidy to Income-rel
trade of the Award N N 90400.00
avoid ated
audited
losses of
foreign
listed
economic
182SHENZHEN ZHONGHENG HUAFA CO. LTD.
and trade companies
developme
nt special
funds in
2019
2020
Provincial The
Special governmen
Funds for t subsidy to
Income-rel
Foreign Award avoid N N 36100.00
ated
Economic losses of
and Trade listed
Developme companies
nt
2020
The
Municipal
governmen
Foreign
t subsidy to
Economic Income-rel
Award avoid N N 41500.00
and Trade ated
losses of
Developme
listed
nt Special
companies
Fund
Subsidy
obtained
for
conforms
Governme
with the
nt subsidies
local Income-rel
for Subsidy N N 10000.00
support ated
epidemic
policy for
prevention
investment
incentive to
encourage
investment
The
governmen
t subsidy
Sewage fee Income-rel
Subsidy granted as N N 15778.80
refund ated
an
incentive
listing
Electricity The Income-rel
Subsidy N N 60401.00
subsidy governmen ated
183SHENZHEN ZHONGHENG HUAFA CO. LTD.
subsidy
obtained
for
engaging in
the state to
encourage
and support
specific
industries
and
tradings
(obtained
in
accordance
with the
law by
national
policy)
Total 200000.00 465079.80
Other explanation:
75. Non-operating expenditure
Unit: RMB/CNY
Amount included in current
Item Current Period Last Period
non-recurring profits or losses
External donation 30000.00 30000.00
Damage to non-current assets
8500.008500.00
and scrap losses
Penalties and liquidated
407697.26369714.13407697.26
damages
Other expenses 2257.16 39095.77 2257.16
Total 448454.42 408809.90 448454.42
Other explanation:
76. Income tax expense
(1) Statement of income tax expense
Unit: RMB/CNY
Item Current Period Last Period
184SHENZHEN ZHONGHENG HUAFA CO. LTD.
Current income tax expense 4870856.73 2550845.51
Deferred income tax expense -297945.99 -580374.13
Other 175823.31 16377.75
Total 4748734.05 1986849.13
(2) Adjustment on accounting profit and income tax expenses
Unit: RMB/CNY
Item Current Period
Total profit 11950636.07
Income tax based on statutory/applicable rate 2987659.02
Impact by different tax rate applied by subsidies -146844.90
Effect of adjusting the income tax in previous period 175823.31
Impact on cost expenses and losses that unable to deducted 1326101.62
The deductible temporary differences or deductible losses of
1620418.18
the un-recognized deferred income tax assets in the Period
Other -1214423.18
Income tax expense 4748734.05
Other explanation
77. Other comprehensive income
See note
78. Annotation of cash flow statement
(1) Cash received with other operating activities concerned
Unit: RMB/CNY
Item The Period Last Period
Unit intercourse account 1345946.88 3566766.97
Collection management fee and utilities
148431.32
etc.Interest income 85992.61 129319.77
Personal loan 22650.87 296101.74
Refunds 228697.08 13328.40
Claim deduction etc. 2982.38 8175.34
Guarantee deposit 462005.53 756526.93
185SHENZHEN ZHONGHENG HUAFA CO. LTD.
Government subsidy 816100.00 4477329.40
Other income 62284.54 154610.95
Total 3026659.89 9550590.82
Note of cash received with other operating activities concerned:
(2) Cash paid with other operating activities concerned
Unit: RMB/CNY
Item The Period Last Period
Unit intercourse account 2613872.25
Borrowings paid by employees 2202562.48 2384958.00
Shipping fee 7428787.96 6995192.43
Communication fee 4259643.78 1580667.08
Utility bill 2235382.89 2697056.69
Transportation expenses 747458.81 454078.69
Repair cost 3171180.65 3396243.22
Financial institution fee 90302.58 59840.09
Other 1850326.60 1582172.00
Courier fee 890138.90 1086119.77
After-sales service fee 409049.06 700744.50
Inspection fee 2192636.22 693871.75
Office expenses 537022.74 1286080.79
Margin 3157256.00 2244276.97
Travel expenses 1693408.73 4424533.42
Audit consulting fee 3186518.77 377867.92
Rental fees 539016.00 193840.43
Securities Information Disclosure Fee 157083.00 283386.75
Security fee 1035071.44 1060613.25
Total 35782846.61 34115416.00
Note of cash paid with other operating activities concerned:
(3) Cash received with other investment activities concerned
Unit: RMB/CNY
Item Current Period Last Period
Redemption of principal of financial 55000000.00
186SHENZHEN ZHONGHENG HUAFA CO. LTD.
products
Total 55000000.00
Note of cash received with other investment activities concerned:
(4) Cash paid related with investment activities
Unit: RMB/CNY
Item Current Period Last Period
Purchasing financial products 35000000.00
Total 35000000.00
Note of cash paid related with investment activities:
(5) Other cash received related to financing activities
Unit: RMB/CNY
Item The Period Last Period
Bill margin 30688367.17
Total 30688367.17
Description of other received cash related to financing activities:
(6) Cash paid related with financing activities
Unit: RMB/CNY
Item Current Period Last Period
Bill margin 1530911.93 30688367.17
Bill discount rate 126587.50
Total 1657499.43 30688367.17
Note of cash paid related with financing activities:
79. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
Unit: RMB/CNY
Supplementary information This Period Last Period
1. Net profit adjusted to cash flow of
----
operation activities:
Net profit 7201902.02 6830187.40
Add: Assets impairment provision 1247320.89 -377625.06
187SHENZHEN ZHONGHENG HUAFA CO. LTD.
Depreciation of fixed assets
consumption of oil assets and depreciation 11851113.86 14552007.52
of productive biology assets
Depreciation of right-of-use
104649.36
assets
Amortization of intangible assets 1707923.22 1727942.64
Amortization of long-term deferred
170770.88232335.84
expenses
Loss from disposal of fixed assets
intangible assets and other long-term -817533.49
assets (gain is listed with “-”)
Losses on scrapping of fixed assets
(gain is listed with “-”)
Gain/loss of fair value changes
(gain is listed with “-”)
Financial expenses (gain is listed
7296333.4013309590.35
with “-”)
Investment loss (gain is listed
-253150.98-165317.73
with “-”)
Decrease of deferred income tax
319011.35-580374.13
asset ((increase is listed with “-”)
Increase of deferred income tax
liability (decrease is listed with “-”)
Decrease of inventory (increase is
-21885640.30-3024220.20
listed with “-”)
Decrease of operating receivable
-40382512.174984706.25
accounts (increase is listed with “-”)
Increase of operating payable
20776598.4021335650.21
accounts (decrease is listed with “-”)
Other -478080.00 1711920.00
Net cash flows arising from
-12323760.0759719269.60
operating activities
2. Material investment and financing not
----
involved in cash flow
Conversion of debt into capital
Switching Company bonds due
within one year
Financing lease of fixed assets
188SHENZHEN ZHONGHENG HUAFA CO. LTD.
3. Net change of cash and cash
----
equivalents:
Balance of cash at period end 32802562.90 30050989.33
Less: Balance of cash equivalent at
30050989.3336645061.61
year-begin
Add: Balance at year-end of cash
equivalents
Less: Balance at year-begin of cash
equivalents
Net increase of cash and cash
2751573.57-6594072.28
equivalents
(2) Net cash payment for the acquisition of a subsidiary in the period
Unit: RMB/CNY
Amount
Including: --
Including: --
Including: --
Other explanation:
(3) Net cash received from the disposal of subsidiaries
Unit: RMB/CNY
Amount
Including: --
Including: --
Including: --
Other explanation:
(4) Constitution of cash and cash equivalent
Unit: RMB/CNY
Item Ending balance Opening balance
I. Cash 32802562.90 30050989.33
Including: Cash on hand 220467.15 138673.02
Bank deposit available for payment
32582095.7529912316.31
at any time
189SHENZHEN ZHONGHENG HUAFA CO. LTD.
III. Balance of cash and cash equivalent at
32802562.9030050989.33
period-end
Other explanation:
80. Note of the changes of owners’ equity
Explain the items and amount at period-end adjusted for “Other” at end of the last year:
Nil
81. Assets with ownership or use right restricted
Unit: RMB/CNY
Item Ending book value Limited reason
Money funds 1530911.93 Notes Payable Margin
Fixed assets 12173809.88 Collateral for borrowing
Intangible assets 6575414.09 Collateral for borrowing
Monetary Funds 92568.28 Judicial freeze
Investment real estate 11308296.62 Collateral for borrowing
Fixed assets liquidation 92857471.69 Court seizure
Investment real estate 22749495.78 Bank loan mortgage
Note receivable 20026713.29 Notes Payable Margin
Total 167314681.56 --
Other explanation:
82. Item of foreign currency
(1) Item of foreign currency
Unit: RMB/CNY
Ending balance of foreign Ending RMB balance
Item Rate of conversion
currency converted
Monetary funds -- -- 13651223.26
Including: USD 2141133.25 6.375700 13651223.26
Euro
HKD
Account receivable -- -- 28570762.68
Including: USD 4481196.21 6.375700 28570762.68
190SHENZHEN ZHONGHENG HUAFA CO. LTD.
Euro
HKD
Other receivables 1639543.13
Including: USD 257155.00 6.375700 1639543.13
Accounts payable 9994194.94
Including: USD 1567544.73 6.375700 9994194.94
Short-term loans 19190857.00
Including: USD 3010000.00 6.375700 19190857.00
Long-term loans -- --
Including: USD
Euro
HKD
Other explanation:
(2) Explanation on foreign operational entity including as for the major foreign operational entity
disclosed main operation place book-keeping currency and basis for selection; if the book-keeping
currency changed explain reasons
□ Applicable √Not applicable
83. Hedging
According to the hedge classification disclose the qualitative and quantitative information of hedging items related hedging tools
and hedged risks:
84. Government subsidy
(1) Government subsidy
Unit: RMB/CNY
Amount reckoned into current
Category Amount Item for presentation
gains/losses
Three-agency handling fee
3553.35 Other income 3553.35
for individual tax
Provincial special fund for
transformation and upgrading
59080.00 Other income 59080.00
of traditional industry for
2018
191SHENZHEN ZHONGHENG HUAFA CO. LTD.
Incentive fund for Wuhan
industrial intelligent
200000.00 Other income 200000.00
transformation demonstration
project in 2019
Special funds for industrial
investment and technological
219000.00 Other income 219000.00
transformation and intelligent
transformation in 2020
2016-2017 Patent Grant
6000.00 Other income 6000.00
Funds
Wu Ke [2017] No. 17
High-tech Cultivation 50000.00 Other income 50000.00
Subsidy
2021 High-end Enterprise
Cultivation Related Rewards 50000.00 Other income 50000.00
(Re-accreditation)
2021 Municipal Foreign
Trade and Economic 341900.00 Other income 341900.00
Development Special Fund
Enterprises absorb
employment compensation
12000.00 Other income 12000.00
funds for poverty alleviation
labor
2020 Central Foreign
Economic and Trade
156200.00 Other income 156200.00
Development Special Fund
(Processing Trade)
2020 Enterprise-School Joint
Innovation Center Filing 200000.00 Non-operating income 200000.00
Award
Total 1297733.35 1297733.35
(2) Government grants rebate
□ Applicable √Not applicable
Other explanation:
85. Other
Nil
192SHENZHEN ZHONGHENG HUAFA CO. LTD.
VIII. Changes of consolidation scope
1. Enterprise combine not under the same control
(1) Enterprise combination under the same control in Period
Unit: RMB/CNY
Net profit
Income of
Standard to of
Acquired purchaser
Time point Cost of Ratio of determine purchaser
way Equity Purchasing from
Purchaser for equity equity equity the from
obtained date purchasing
obtained obtained obtained purchasing purchasing
way date to
date date to
period-end
period-end
Other explanation:
(2) Combination cost and goodwill
Unit: RMB/CNY
Consolidation cost
--Cash
--Fair value of non-cash assets
--Fair value of debts issued or assumed
--Fair value of equity securities issued
-- Fair value of contingent consideration
--Fair value of the equity prior to the purchasing date
--Other
Total combination cost
Less: shares of fair value of identifiable net assets acquired
Goodwill/merger cost is less than the shares of fair value of
identifiable net assets acquired
The method of determining the fair value of the merger cost contingent consideration and there changes:
The main reasons for the formation of large amounts of goodwill:
Other explanation:
(3) Identifiable assets and liability on purchasing date under the purchaser
Unit: RMB/CNY
Fair value on purchasing date Book value on purchasing date
193SHENZHEN ZHONGHENG HUAFA CO. LTD.
Assets:
Monetary funds
Account receivable
Inventory
Fixed assets
Intangible assets
Liability:
Loan
Account payable
Deferred tax liabilities
Net assets
Less: Minority interests
Net assets acquired
Method for determining the fair value of identifiable assets and liabilities:
The contingent liabilities of the acquiree assumed in the business combination:
Other explanation:
(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date
Whether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control r ights in
the Period or not
□ Yes √ No
(5) Notes relating to the purchase date or the end of the period in which the merger consideration or the
fair value of the purchasee’s identifiable assets and liabilities cannot be reasonable determined
(6) Other explanations
2. Enterprise combine under the same control
(1) Enterprise combination under the same control in Period
Unit: RMB/CNY
Combined Percentage Constitute Combining Basis for Income of Net profit Income of Net profit
party of equity the basis date determinin the of the the of the
acquired in for the g the date combined combined combined combined
enterprise enterprise of party from party from party party
194SHENZHEN ZHONGHENG HUAFA CO. LTD.
combinatio combinatio combinatio the the during the during the
n n under the n Opening of Opening of comparison comparison
same the period the period period period
control of of
combinatio combinatio
n to the n to the
date of date of
combinatio combinatio
n n
Other explanation:
(2) Consolidation cost
Unit: RMB/CNY
Consolidation cost
--Cash
-- Book value of non-cash assets
- Book value of debts issued or assumed
-- The face value of the equity securities issued
--Contingent consideration
Contingent explanation of the consideration and its changes:
Other explanation:
(3) Book value of the assets/liabilities from combined party at date of combination
Unit: RMB/CNY
Consolidation date End of last period
Assets:
Monetary funds
Account receivable
Inventory
Fixed assets
Intangible assets
Liability:
Loan
Account payable
195SHENZHEN ZHONGHENG HUAFA CO. LTD.
Net assets
Less: Minority interests
Net assets acquired
Contingent liabilities of the combined party assumed in the enterprise combination:
Other explanation:
3. Reverse purchase
Basic information of the transaction the basis for the reverse purchase of the transaction whether the assets and liabilities retained by
the listed company constitute a business and its basis the determination of the merger cost the amount of equity adjusted in
accordance with the equity transaction and its calculation:
4. Disposal of subsidiaries
Whether there is a single disposal of an investment in a subsidiary that resulted in a loss of control
□ Yes √ No
Whether there is a step-by-step disposal of investment in a subsidiary through multiple transactions and loss of control during the
period
□ Yes √ No
5. Other reasons for consolidation range changed
Explain the reasons on consolidate scope changes (i.e. subsidiary newly established subsidiary liquidation etc.) and relevant
information:
6. Other
IX. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
Main operation Registration Share-holding ratio
Subsidiary Business nature Acquired way
place place Directly Indirectly
Wuhan Hengfa
Production & Investment
Technology Wuhan Wuhan 100.00%
sales establishment
Co. Ltd.Shenzhen
Property Investment
Zhongheng Shenzhen Shenzhen 100.00%
management establishment
HUAFA
196SHENZHEN ZHONGHENG HUAFA CO. LTD.
Property Co.Ltd
Shenzhen
HUAFA Property Investment
Shenzhen Shenzhen 100.00%
Hengtian Co. management establishment
Ltd.Shenzhen
HUAFA Property Investment
Shenzhen Shenzhen 100.00%
Hengtai Co. management establishment
Ltd.Shenzhen
HUAFA
Property Investment
Property Lease Shenzhen Shenzhen 60.00%
management establishment
Management
Co. Ltd
Hong Kong Equity
Ruth Co. Ltd. Hong Kong -- 100.00%
China acquisition
Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Nil
Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over
half and over voting rights:
Nil
Major structured entity included in consolidates statement:
Basis of termination of agent or consignor:
Other explanation
(2) Important non-wholly-owned subsidiary
Unit: RMB/CNY
Gains/losses Dividend announced to
Share-holding ratio of Ending equity of
Subsidiary attributable to minority distribute for minority
minority minority
in the Period in the Period
Explanation on holding ratio different from the voting right ratio for minority shareholders:
Other explanation:
(3) Main finance of the important non-wholly-owned subsidiary
Unit: RMB/CNY
Ending balance Opening balance
Subsid
Curren Non-c Total Curren Non-c Total Curren Non-c Total Curren Non-c Total
iary
t assets urrent assets t urrent liabilit t assets urrent assets t urrent liabiliti
197SHENZHEN ZHONGHENG HUAFA CO. LTD.
assets liabiliti liabilit ies assets liabiliti liabiliti es
es ies es es
Unit: RMB/CNY
The Period Last Period
Total Cash flow Total Cash flow
Subsidiary Operation comprehen from Operation comprehen from
Net profit Net profit
Income sive operation Income sive operation
income activity income activity
Other explanation:
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group
(5) Financial or other supporting offers to the structured entity included in consolidated financial statement
range
Other explanation:
2. Transaction that has owners’ equity shares changed in subsidiary but still with controlling rights
(1) Owners’ equity shares changed in subsidiary
(2) Impact on minority’s interest and owners’ equity attributable to parent company
Unit: RMB/CNY
Purchase cost/disposal consideration
--Cash
--Fair value of non-cash assets
Total purchase cost/disposal consideration
Less: Share of net assets of subsidiaries calculated according to
the proportion of equity acquired/disposed
Difference
Including: Adjusted capital reserve
Adjusted surplus reserve
Adjusted undistributed profit
Other explanation
198SHENZHEN ZHONGHENG HUAFA CO. LTD.
3. Equity in joint venture and associated enterprise
(1) Important joint venture and associated enterprise
Share-holding ratio Accounting
treatment on
Joint venture or
Main operation Registered investment for
associated Business nature
place place Directly Indirectly joint venture
enterprise
and associated
enterprise
Holding shares ratio different from the voting right ratio:
Has major influence with less 20% voting rights hold or has minor influence with over 20% (20% included) voting rights hold:
(2) Main financial information of the important joint venture
Unit: RMB/CNY
Ending balance/Current period Opening balance/Last Period
Current assets
Including: cash and cash equivalent
Non-current assets
Total assets
Current liability
Non-current liability
Total liabilities
Minority's interest
Equity attributable to shareholder of parent
company
Share of net assets measured by
shareholding
Adjustment
--Goodwill
--Unrealized profit of internal trading
-- Other
Book value of equity investment in joint
venture
Fair value of the equity investment of
joint ventures with public offers
concerned
Operating income
Financial expenses
199SHENZHEN ZHONGHENG HUAFA CO. LTD.
Income tax expenses
Net profit
Net profit of discontinuing operation
Other comprehensive income
Total comprehensive income
Dividends received from joint venture in
the year
Other explanation
(3) Main financial information of the important associated enterprise
Unit: RMB/CNY
Ending balance/Current period Opening balance/Last Period
Current assets
Non-current assets
Total assets
Current liability
Non-current liability
Total liabilities
Minority's interest
Equity attributable to shareholder of parent
company
Share of net assets measured by
shareholding
Adjustment
--Goodwill
--Unrealized profit of internal trading
-- Other
Book value of equity investment in
associated enterprise
Fair value of the equity investment of
associated enterprise with public offers
concerned
Operating income
Net profit
Net profit of discontinuing operation
200SHENZHEN ZHONGHENG HUAFA CO. LTD.
Other comprehensive income
Total comprehensive income
Dividends received from associated
enterprise in the year
Other explanation
(4) Financial summary for non-important Joint venture and associated enterprise
Unit: RMB/CNY
Ending balance /The Period Opening balance /Last Period
Joint venture: -- --
Amount based on share-holding ratio -- --
Associated enterprise: -- --
Amount based on share-holding ratio -- --
Other explanation
(5) Major limitation on capital transfer ability to the Company from joint venture or associated enterprise
(6) Excess loss occurred in joint venture or associated enterprise
Unit: RMB/CNY
Cumulative unrecognized Unrecognized loss in the
Name of joint venture or Accumulated unrecognized
loss accumulated in the current period (or net profit
associated enterprise loss at the end of the period
previous period shared in the current period)
Other explanation
(7) Unconfirmed commitment with joint venture investment concerned
(8) Intangible liability with joint venture or associated enterprise investment concerned
4. Major conduct joint operation
Joint business Principal place of Shareholding ratio/shares enjoyed
Registration Business nature
name business Direct Indirect
Explanation of the shareholding ratio or the share enjoyed in the joint operation is different from the voting rights ratio:
If a joint operation is a separate entity the basis for classification as a joint operation:
Other explanation
201SHENZHEN ZHONGHENG HUAFA CO. LTD.
5. Structured body excluding in consolidate financial statement
Relevant explanations for structured entities not included in the scope of the consolidated financial statements:
6. Other
X. Risk related with financial instrument
The Group's main financial instruments include loans receivables receivables financing payable etc. please
refer to the details of each financial instrument in Note V. The risks associated with these financial instruments
and the risk management policies adopted by the Group to reduce these risks are described below. The
management of the Group manages and monitors these risk exposures to ensure that the above risks are controlled
within the limits.
1. Various risk management objectives and policies
The objective of the Group's risk management is to strike a proper balance between risks and profits minimize the
negative impact of risks on the Group's operating results and maximize the benefits of shareholders and other
equity investors. Based on this risk management objectives the Group's basic strategy for risk management is to
identify and analyze the risks faced by the Group establish appropriate risk bottom lines and carry out risk
management and timely and reliably monitor the risks control them within the limits.
(1) Market risk
The market risk of financial instruments refers to the risk that the fair value or the future cash flows of financial
instruments fluctuate due to the changes in market prices including foreign exchange risk interest rate risk and
other price risk.
1) Exchange rate risk
The Group's exchange rate risk is mainly related to US dollars and Hong Kong dollars. Except the Group's second
level subsidiary Hengfa Technology Company’s monitor business has day-to-day operations in US dollars; other
principal business activities of the Group settle accounts in RMB. On December 31 2021 except for the US
dollar balance of assets and liabilities in below table the Group's assets and liabilities are all RMB balance. The
exchange rate risk arising from the assets and liabilities of the US dollar balance may have an impact on the
Group's operating results.Item December 31 2021 (RMB conversion) December 31 2020 (RMB conversion)
Monetary funds -USD 13651223.26 9763462.08
Monetary funds -HKD 27.49
Account receivable -USD 28570762.68 52507767.40
Other receivables -USD 1639543.13
Account paid in advance- USD 30287750.94
Accounts payable -USD 9994194.94 23508.43
Account received in advance -USD 133512.50
Short-term borrowings -USD 19190857.00 12527808.00
The Company eyes on the influence from variation of exchange
202SHENZHEN ZHONGHENG HUAFA CO. LTD.
2) Interest rate risk
The interest rate risk of the Group arises from bank loans. The financial liabilities of floating interest rate make
the Group face cash flow interest rate risk and the financial liabilities of fixed rate make the Group face the
interest rate risk of fair value. The Group determines the relative proportion of fixed rate and floating interest rate
contracts based on the prevailing market environment. On December 31 2021 the Group's interest-bearing debt
was mainly the fixed rate and floating interest rate loan contract denominated in RMB and US dollars amounting
to RMB 87480857.00 (December 31 2020: RMB 85527808.00).The Group's risk of changes in the cash flow of financial instruments due to changes in interest rates is mainly
related to the floating interest rate bank loans. The Group's policy is to maintain the floating interest rate of these
loans so as to eliminate the fair value risk of the interest rate changes.
3) Price risk
The Group sells monitors and so on at market prices and is therefore affected by such price fluctuations.
(2) Credit risk
Credit risk refers to the risk that a party of the financial instrument does not fulfill its obligations and causes
property loss to another party. On December 31 2021 the maximum credit risk exposure that may cause financial
losses to the Group is mainly attributable to the failure of the other party to fulfill its obligations resulting in the
losses of the Group's financial assets and the Group's financial guarantees including:
The carrying amount of the financial assets recognized in the consolidated balance sheet; for the financial
instruments measured at fair value the book value reflects its risk exposures but not the maximum risk exposure
and its maximum risk exposure changes with the future changes in fair value.In order to reduce the credit risk the Group has set up a special department to determine the credit line carry out
the credit approval and implement other monitoring procedures to take necessary measures to recover the overdue
credit. In addition the Group reviews the recovery of each individual receivable at every balance sheet date to
accrue sufficient provision for bad debts of uncollectible funds. As a result the Group's management believes that
the Group's credit risk has been greatly reduced.The Group's working capital is deposited in banks with higher credit ratings so the credit risk of working capital
is low.The Group has adopted necessary policies to ensure that all customers have good credit records. In addition to the
top five account receivables the Group has no other significant credit risk.The total amount of the top five account receivables is: 108890171.15 Yuan.
(3) Liquidity risk
The liquidity risk is the risk that the Group is unable to fulfill its financial obligations on the due date. The Group's
approach to manage liquidity risk is to ensure that there is sufficient financial liquidity to fulfill its due debts but
not cause unacceptable losses or damages to the corporate reputation. The Group regularly analyzes the structure
and duration of liabilities to ensure there are sufficient funds. The management of the Group monitors the use of
bank loans and ensures the compliance with loan agreement and conducts financing consultations with financial
institutions in order to maintain a certain line of credit and reduce the liquidity risk.The financial assets and financial liabilities held by the Group based on the maturity of the undiscounted
203SHENZHEN ZHONGHENG HUAFA CO. LTD.
outstanding contractual obligations are analyzed as follows:
Amount on December 31 2021
Item Within one year 1-2years 2-3years Over 3 years Total
Financial assets
Monetary funds 34426772.60 34426772.60
Bill receivable 105922317.60 105922317.60
Receivable financing 500000.00 500000.00
Account receivable 127969770.91 718833.35 23217.71 13148817.95 141860639.92
Other account
1298683.161725961.49265630.4015790653.8319080928.88
receivable
Account paid in
7996570.957996570.95
advance
Short-term borrowings 26480857.00 26480857.00
Notes payable 21554981.30 21554981.30
Account payable 88529478.96 88529478.96
Other accounts
30448913.1430448913.14
payable
Contract liabilities 736355.70 736355.70
Wage payable 3844381.07 3844381.07
2. Sensitivity analysis
The Group uses the sensitivity analysis technique to analyze the possible impacts of the reasonable and possible
changes in risk variable on the currents profit and losses or the owner's equity. Since any risk variable rarely
changes in isolation and the correlation among the variables has a significant effect on the final effect amount of a
certain risk variable changes and the following contents are on the assumption that the change in each variable is
independent.
(1) Sensitivity analysis of foreign exchange risk
Sensitivity analysis of foreign exchange risk assumes that all overseas operating net investment hedges and cash
flow hedges are highly effective.On the basis of the above assumptions in case that other variable doesn’t change the after-tax effect of the
possible and reasonable changes in the exchange rate on the current profits and losses are as follows:
Item Exchange rate 2021 2020
fluctuation Impact on net profit Impact on owner's Impact on net profit Impact on owner's
equity equity
All foreign 5% appreciation of the 733823.85 733823.85 3993707.59 3993707.59
currency RMB
All foreign 5% devaluation of the -733823.85 -733823.85 -3993710.18 -3993710.18
currency RMB
204SHENZHEN ZHONGHENG HUAFA CO. LTD.
XI. Disclosure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
Unit: RMB/CNY
Ending fair value
Item
First-order Second-order Third-order Total
I. Sustaining measured
--------
by fair value
II. Non-persistent
--------
measure
2. Recognized basis for the market price sustaining and non-persistent measured by fair value on
first-order
3. The qualitative and quantitative information for the valuation technique and critical parameter that
sustaining and non-persistent measured by fair value on second-order
4. The qualitative and quantitative information for the valuation technique and critical parameter that
sustaining and non-persistent measured by fair value on third-order
5. Continuous third-level fair value measurement items adjustment information between the Opening and
Ending book value and sensitivity analysis of unobservable parameters
6. Continuous fair value measurement items if there is a conversion between various levels in the current
period the reasons for the conversion and the policy for determining the timing of the conversion
7. Changes in valuation technology during the current period and reasons for the changes
8. The fair value of financial assets and financial liabilities not measured by fair value
9. Other
XII. Related party and related party transactions
1. Parent company of the enterprise
Share-holding
ratio on the Voting right ratio
Parent company Registration place Business nature Registered capital
enterprise for on the enterprise
parent company
Wuhan Zhongheng Production and
Wuhan 138000000.00 42.13% 42.13%
New Science & sales real estate
205SHENZHEN ZHONGHENG HUAFA CO. LTD.
Technology development and
Industrial Group sales housing
Co. Ltd leasing and
management
Explanation on parent company of the enterprise
The ultimate control of the enterprise is Li Zhongqiu.Other explanation:
2. Subsidiary of the Enterprise
Found more in the Note
3. Joint venture and associated enterprise
Found more in Note
Other associated enterprise or joint ventures which has related transaction with the Company in the period or occurred previous:
Name of joint venture or associated enterprise Relationship with the company
Other explanation
4. Other Related party
Other related party Relationship with the Enterprise
Control by same controlling shareholder and ultimate
Shenzhen Zhongheng Semiconductor Co. Ltd.controller
Control by same controlling shareholder and ultimate
Wuhan Hengsheng Yutian Industrial Co. Ltd.controller
Control by same controlling shareholder and ultimate
Wuhan Hengsheng Photo-electricity Industry Co. Ltd.controller
Control by same controlling shareholder and ultimate
Hong Kong Yutian International Investment Co. Ltd.controller
Control by same controlling shareholder and ultimate
Wuhan New Oriental Real Estate Development Co. Ltd.controller
Control by same controlling shareholder and ultimate
Wuhan Zhongheng Property Management Co. Ltd.controller
Control by same controlling shareholder and ultimate
Wuhan Optical Valley Display System Co. Ltd.controller
Control by same controlling shareholder and ultimate
Wuhan Yutian Dongfang Property Co. Ltd.controller
Control by same controlling shareholder and ultimate
Wuhan Xiahua Zhongheng Electronics Co. Ltd.controller
206SHENZHEN ZHONGHENG HUAFA CO. LTD.
Control by same controlling shareholder and ultimate
Wuhan Zhongheng Yutian Trading Co Ltd
controller
Control by same controlling shareholder and ultimate
Wuhan Yutian Hongguang Real Estate Co. Ltd.controller
Control by same controlling shareholder and ultimate
Shenzhen Zhongheng Huayu Investment Holding Co. Ltd.controller
Control by same controlling shareholder and ultimate
Famous Sky Capital Limited
controller
Control by same controlling shareholder and ultimate
Hong Kong Zhongheng Yutian Co. Ltd.controller
Control by same controlling shareholder and ultimate
Shenzhen Zhongheng Yongye Technology Co. Ltd.controller
Control by same controlling shareholder and ultimate
Shenzhen Yutian Hengrui Co. Ltd.controller
Control by same controlling shareholder and ultimate
Wuhan Henglian Optoelectronics Co. Ltd.controller
Other explanation
5. Related transaction
(1) Goods purchasing labor service providing and receiving
Goods purchasing/labor service receiving
Unit: RMB/CNY
Whether over the
Trading limit
Related party Content Current Period approved limited or Last Period
approved
not (Y/N)
Hong Kong
Yutian
International Purchasing 79516891.12 152863200.00 N 152365734.55
Investment Co.Ltd.Wuhan
Hengsheng
Purchasing 80731745.56 127386000.00 N 92522296.13
Photo-electricity
Industry Co. Ltd.Wuhan
Hengsheng
Purchasing 19231711.40 63693000.00 N 39519517.75
Photo-electricity
Industry Co. Ltd.
207SHENZHEN ZHONGHENG HUAFA CO. LTD.
Total 179480348.08 343942200.00 284407548.43
Goods sold/labor service providing
Unit: RMB/CNY
Related party Content Current Period Last Period
Hong Kong Yutian
International Investment Co. Sales 100111660.49 115083586.10
Ltd.Wuhan Hengsheng
Photo-electricity Industry Sales 45063405.19 41056775.49
Co. Ltd.Wuhan Hengsheng
Photo-electricity Industry Sales 446874.53 2900164.83
Co. Ltd.Wuhan Hengsheng
Photo-electricity Industry Sales 63442.78 90175.49
Co. Ltd.Total 145685382.99 159130701.91
Explanation on goods purchasing labor service providing and receiving
(2) Related trusteeship management/contract & entrust management/ outsourcing
The company's entrusted management/contracting situation table:
Unit: RMB/CNY
Custody
The name of
Pricing basis income/contrac
the entrusting Name of Types of Start date of End date of
for custody ting income
party / contractor/contr entrusted/contr entrusted/contr entrust/contract
income/contrac confirmed in
outsourcing actor acted assets acted start date ing
ting income the current
party
period
Description of related custody/contracting situation
The company's entrusted management / outsourcing situation table:
Unit: RMB/CNY
The name of Custody
the entrusting Name of Entrusted/Outs Start date of End date of Custody fee/package fee
party / contractor/contr ourced Asset commission/out entrustment/out fee/package fee confirmed in
outsourcing actor Type of package sourcing pricing basis the current
party period
Explanation on related lease
208SHENZHEN ZHONGHENG HUAFA CO. LTD.
(3) Related lease
As a lessor for the Company:
Unit: RMB/CNY
Lease income recognized in Lease income recognized at
Lessee Assets type
the Period last Period
As a tenant for the Company:
Unit: RMB/CNY
Rent costs recognized in the Rent costs recognized at last
Lessor Assets type
Period Period
Explanation on related lease
(4) Related guarantee
As the guarantor
Unit: RMB/CNY
Completed or not
Secured party Amount guarantee Start End
(Y/N)
Li Zhongqiu the
36000000.00 2018-04-20 2022-04-20 Y
Company
Li Zhongqiu 90000000.00 2019-07-01 2022-07-01 N
As the secured party
Unit: RMB/CNY
Completed or not
Guarantor Amount guarantee Start End
(Y/N)
Explanation on related guarantee
(5) Related party’s borrowed/lending funds
Unit: RMB/CNY
Related party Loan amount Start date Maturity Note
Borrowing
Lending
(6) Related party’s assets transfer and debt reorganization
Unit: RMB/CNY
Related party Related transaction content The Period Last Period
209SHENZHEN ZHONGHENG HUAFA CO. LTD.
(3) Remuneration of key manager
Unit: RMB/CNY
Item The Period Last Period
Remuneration of key manager 1403000.00 1403000.40
(8) Other related transactions
6. Receivable/payable items of related parties
(1) Receivable
Unit: RMB/CNY
Ending balance Opening balance
Item Related party
Book balance Bad debt provision Book balance Bad debt provision
Hong Kong Yutian
Accounts International
24428463.6841513718.58
receivable Investment Co.Ltd.Wuhan Hengsheng
Accounts
Photo-electricity 13902449.94 12676.70
receivable
Industry Co. Ltd.Hong Kong Yutian
International
Advance payment 27025766.19
Investment Co.Ltd.Total 38330913.62 68552161.47
(2) Payable
Unit: RMB/CNY
Item Related party Ending book balance Opening book balance
Wuhan Hengsheng
Account payable Photo-electricity Industry 17295609.05 6795240.85
Co. Ltd.Hong Kong Yutian
Notes payable International Investment Co. 10025769.59
Ltd.Total 27321378.64 6795240.85
210SHENZHEN ZHONGHENG HUAFA CO. LTD.
7. Undertakings of related party
8. Other
XIII. Share-based payment
1. Overall situation of share-based payment
□ Applicable √Not applicable
2. Share-based payment settled by equity
□ Applicable √Not applicable
3. Share-based payment settled by cash
□ Applicable √Not applicable
4. Modification and termination of share-based payment
5. Other
XIV. Undertakings or contingency
1. Important undertakings
Important undertakings on balance sheet date
As of the date of this report the company has no important commitments and important contingencies that should
be disclosed but not disclosed
2. Contingency
(1) Contingency on balance sheet date
(2) For the important contingency not necessary to disclosed by the Company explained reasons
The Company has no important contingency that need to disclosed
3. Other
XV. Events after balance sheet date
1. Important non adjustment matters
Unit: RMB/CNY
211SHENZHEN ZHONGHENG HUAFA CO. LTD.
Number of impacts on
The reason why the impact
Item Content financial status and operating
number cannot be estimated
results
2. Profit distribution
Unit: RMB/CNY
3. Sales return
4. Other events after balance sheet date
XVI. Other important events
1. Previous accounting errors collection
(1) Retrospective restatement method
Unit: RMB/CNY
Names of report items in each
Correction of accounting errors Processing program Cumulative influence
comparison period affected
(2) Future applicable law
Reasons for adopting future applicable
Correction of accounting errors Approval procedure
law
2. Debt restructuring
3. Assets replacement
(1) Exchange of non-monetary assets
(2) Other asset replacement
4. Pension plan
5. Termination of operation
Unit: RMB/CNY
Termination of
Income tax
Item Income Expense Total profit Net profit operation profit
expense
attributable to
212SHENZHEN ZHONGHENG HUAFA CO. LTD.
owners of the
parent
company
Other explanation
6. Segment
(1) Recognition basis and accounting policy for reportable segment
(2) Financial information for reportable segment
Unit: RMB/CNY
Item Offset of segment Total
(3) If the company has no reportable segments or is unable to disclose the total assets and liabilities of each
reportable segment it should state the reasons
(4) Other explanations
7. Major transaction and events makes influence on investor’s decision
8. Other
XVII. Principle notes of financial statements of parent company
1. Account receivable
(1) Category of account receivable
Unit: RMB/CNY
Ending balance Opening balance
Bad debt
Book balance Book balance Bad debt provision
Category provision Book Book
Amoun Proport Amoun Accrua value Amoun Proport Amoun Accrual value
t ion t l ratio t ion t ratio
Account receivable
with bad debt 10293 100.00 10293 100.00 10293 100.00 10293 100.00
provision accrual 424.29 % 424.29 % 424.29 % 424.29 %
on a single basis
Including:
Including:
213SHENZHEN ZHONGHENG HUAFA CO. LTD.
10293102931029310293
Total
424.29424.29424.29424.29
Accrual of bad debt provision on single basis: 10293424.29
Unit: RMB/CNY
Ending balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Accounts receivable
with provision for bad
10293424.29 10293424.29 100.00% Uncollectible
debts based on
individual assessments
Total 10293424.29 10293424.29 -- --
Accrual of bad debt provision on single basis:
Unit: RMB/CNY
Ending balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Hong Kong Haowei
1870887.18 1870887.18 100.00% Uncollectible
Industrial Co. Ltd.TCL ACE ELECTRIC
APPLIANCE
1325431.75 1325431.75 100.00% Uncollectible
(HUIZHOU) CO.LTD.Qingdao Haier Parts
1225326.15 1225326.15 100.00% Uncollectible
Procurement Co. Ltd.SKYWORTH
Multimedia 579343.89 579343.89 100.00% Uncollectible
(Shenzhen) Co. Ltd.Shenzhen Huixin
Video Technology Co. 381168.96 381168.96 100.00% Uncollectible
Ltd.Shenzhen Wandelai
Digital Technology 351813.70 351813.70 100.00% Uncollectible
Co. Ltd.Shenzhen Dalong
344700.00 344700.00 100.00% Uncollectible
Electronic Co. Ltd.Shenzhen Keya
332337.76 332337.76 100.00% Uncollectible
Electronic Co. Ltd.Shenzhen Qunping
304542.95 304542.95 100.00% Uncollectible
Electronic Co. Ltd.
214SHENZHEN ZHONGHENG HUAFA CO. LTD.
China Galaxy
Electronics (Hong 288261.17 288261.17 100.00% Uncollectible
Kong) Co. Ltd.Dongguan Weite
274399.80 274399.80 100.00% Uncollectible
Electronic Co. Ltd.Hong Kong New
Century Electronics 207409.40 207409.40 100.00% Uncollectible
Co. Ltd.Shenyang Beitai
203304.02 203304.02 100.00% Uncollectible
Electronic Co. Ltd.Beijing Xinfang Weiye
193000.00 193000.00 100.00% Uncollectible
Technology Co. Ltd.TCL Electronics (Hong
145087.14 145087.14 100.00% Uncollectible
Kong) Co. Ltd.Huizhou TCL Xinte
142707.14 142707.14 100.00% Uncollectible
Electronics Co. Ltd.Sky Worth – RGB
133485.83 133485.83 100.00% Uncollectible
Electronic Co. Ltd.Other 1990217.45 1990217.45 100.00% Uncollectible
Total 10293424.29 10293424.29 -- --
Accrual of bad debt provision on single basis:
Unit: RMB/CNY
Ending balance
Name
Book balance Bad debt provision Accrual ratio Accrual causes
Accrual of bad debt provision on portfolio:
Unit: RMB/CNY
Ending balance
Name
Book balance Bad debt provision Accrual ratio
Explanation on portfolio basis:
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses please
refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
By account age
Unit: RMB/CNY
Account age Ending balance
Over 3 years 10293424.90
Over 5 years 10293424.90
215SHENZHEN ZHONGHENG HUAFA CO. LTD.
Total 10293424.90
(2) Bad debt provision accrual collected or reversal in the period
Bad debt provision accrual in the period:
Unit: RMB/CNY
Amount changed in the period
Opening
Category Collected or Ending balance
balance Accrual Written-off Other
reversal
Including major amount bad debt provision that collected or reversal in the period:
Unit: RMB/CNY
Name Amount collected or reversal Way of collection
(3) Actual written-off accounts receivable in the current period
Unit: RMB/CNY
Item Written-off amount
Including the important accounts receivable written-off situation:
Unit: RMB/CNY
Whether the
Nature of Written-off payment is
Written-off
Name accounts Written-off reason procedure generated by
amount
receivable performed related party
transactions
Written-off description of accounts receivable:
(4) Top 5 account receivables collected by arrears party at ending balance
Unit: RMB/CNY
Ending balance of account Proportion in total account Ending balance of bad debt
Company
receivable receivables at year-end provision
Hong Kong Haowei
1870887.1818.18%1870887.18
Industrial Co. Ltd.TCL ACE ELECTRIC
APPLIANCE (HUIZHOU) 1325431.75 12.88% 1325431.75
CO. LTD.Qingdao Haier Parts
1227646.5511.93%1227646.55
Procurement Co. Ltd.SKYWORTH Multimedia
579343.895.63%579343.89
(Shenzhen) Co. Ltd.
216SHENZHEN ZHONGHENG HUAFA CO. LTD.
Shenzhen Huixin Video
381168.963.70%381168.96
Technology Co. Ltd.Total 5384478.33 52.32% --
(5) Assets and liabilities resulted by account receivable transfer and continues involvement
Nil
Other explanation:
Nil
(6) Account receivable derecognition due to financial assets transfer
Nil
2. Other account receivable
Unit: RMB/CNY
Item Ending balance Opening balance
Other account receivable 92468697.71 93922057.92
Total 92468697.71 93922057.92
(1) Interest receivable
1) Category of interest receivable
Unit: RMB/CNY
Item Ending balance Opening balance
2) Significant overdue interest
Whether there is
Borrower Ending balance Overdue time Overdue reason impairment and its
judgment basis
Other explanation:
3) Accrual of bad debt provision
□ Applicable √Not applicable
217SHENZHEN ZHONGHENG HUAFA CO. LTD.
(2) Dividend receivable
1) Category of dividend receivable
Unit: RMB/CNY
Item (or invested unit) Ending balance Opening balance
2) Important dividend receivable with account age over one year
Unit: RMB/CNY
Whether there is
Reasons for
Item (or invested unit) Ending balance Account age impairment and its
non-recovery
judgment basis
3) Accrual of bad debt provision
□ Applicable √Not applicable
Other explanation:
(3) Other account receivable
1) Other account receivable by nature
Unit: RMB/CNY
Nature Ending book balance Opening book balance
Intercourse funds 101523586.62 103959672.35
Borrow money 1441111.12 2089073.12
Margin & deposit 304608.00 304608.00
Rental receivable 6999971.21 6224167.48
Other 725904.26 162006.14
Less: Bad debt provision -18526483.50 -18817469.17
Total 92468697.71 93922057.92
2) Accrual of bad debt provision
Unit: RMB/CNY
Phase I Phase II Phase III
Expected credit Expected credit losses for Expected credit losses for
Bad debt provision Total
losses over next 12 the entire duration the entire duration (with
months (without credit credit impairment
218SHENZHEN ZHONGHENG HUAFA CO. LTD.
impairment occurred) occurred)
Balance on1 Jan. 2021 111.75 18817357.42 18817469.17
Balance of 1 Jan. 2021
————————
in the period
Reversal in Current
111.75290873.92290985.67
Period
Balance on Dec. 31
18526483.5018526483.50
2021
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age
Unit: RMB/CNY
Account age Ending balance
Within one year (one year included) 14192620.98
1-2 years 4969630.70
2-3 years 73307622.03
Over 3 years 18525307.50
3-4 years 18525307.50
Total 110995181.21
3) Bad debt provision accrual collected or reversal in the period
Bad debt provision accrual in the period:
Unit: RMB/CNY
Amount changed in the period
Opening
Category Collected or Ending balance
balance Accrual Written-off Other
reversal
Account
receivable for
which provision
for bad debts is 18817357.42 290873.92 18526483.50
made on basis of
individual
assessment
Other account
receivable for
which bad debt 111.75 111.75
provision is made
on a portfolio
219SHENZHEN ZHONGHENG HUAFA CO. LTD.
basis
Total 18817469.17 290985.67 18526483.50
Including the important amount collected or switches back in the period:
Unit: RMB/CNY
Name Amount collected or switches back Way of collection
4) The actual written-off other receivables in the current period
Unit: RMB/CNY
Item Written-off amount
Including the important written-off situation of other receivables:
Unit: RMB/CNY
Whether the
Written-off payment is
Nature of other Written-off
Name Written-off reason procedure generated by
receivables amount
performed related party
transactions
Description of other receivables written-off:
5) Top 5 other receivables collected by arrears party at ending balance
Unit: RMB/CNY
Proportion in total
Ending balance of
Company Nature Ending balance Account ages other receivables
bad debt provision
at period-end
Wuhan Hengfa
Within 1 year/1-2
Technology Co. Intercourse funds 80222009.05 71.97%
years/2-3 years
Ltd.Shenzhen
Zhongheng HUAFA Intercourse funds 11466156.64 Within 1 year 10.29%
Property Co. Ltd
Shenzhen HUAFA
Property Leasing Rent receivable 4559659.15 Over 5 years 4.09% 4559659.15
Co. Ltd.Portman Rent receivable 4021734.22 Over 5 years 3.61% 4021734.22
Jackfang Rent receivable
1380608.00 Over 5 years 1.24% 1380608.00
Investment 1F 1076
Total -- 101650167.06 -- 91.20% 9962001.37
220SHENZHEN ZHONGHENG HUAFA CO. LTD.
6) Receivables involving government subsidies
Unit: RMB/CNY
Government subsidy Estimated time amount
Name Ending balance Ending account age
item and basis of receipt
7) Other receivable for termination of confirmation due to the transfer of financial assets
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved
Other explanation:
3. Long-term equity investments
Unit: RMB/CNY
Ending balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment for
187218400.00600000.00186618400.00187218400.00600000.00186618400.00
subsidiary
Total 187218400.00 600000.00 186618400.00 187218400.00 600000.00 186618400.00
(1) Investment for subsidiary
Unit: RMB/CNY
Changes in the period Ending
Opening Ending
The invested Accrual of balance of
balance Additional Reduce balance
entity impairment Other impairment
(Book value) investment investment (Book value)
provision provision
Wuhan
Hengfa 183608900. 183608900.Technology 00 00
Co. Ltd.Shenzhen
Zhongheng
HUAFA 1000000.00 1000000.00
Property Co.Ltd
Shenzhen
HUAFA 1000000.00 1000000.00
Hengtian Co.
221SHENZHEN ZHONGHENG HUAFA CO. LTD.
Ltd.Shenzhen
HUAFA
1000000.001000000.00
Hengtai Co.Ltd.Shenzhen
Huafa
Property 600000.00
Leasing Co.Ltd.Ruth Co. Ltd. 9500.00 9500.00
186618400.186618400.
Total 600000.00
0000
(2) Investment for associates and joint venture
Unit: RMB/CNY
Current changes (+ -)
Investm Ending
Cash
Openin ent Other balance
dividen Ending
g Additio gain/los compre of
Capital Other d or Impair balance
Enterpr balance nal s hensive depreci
reducti equity profit ment Other (book
ise (book investm recogni income ation
on change announ accrual value)
value) ent zed adjustm reserve
ced to
under ent s
issued
equity
I. Joint venture
II. Associated enterprise
(3) Other explanation
4. Operating revenue and cost
Unit: RMB/CNY
The Period Last Period
Item
Revenue Cost Revenue Cost
Other business 47591806.18 9388211.49 37262114.01 6784029.31
Total 47591806.18 9388211.49 37262114.01 6784029.31
Information relating to revenue:
Unit: RMB/CNY
222SHENZHEN ZHONGHENG HUAFA CO. LTD.
Category Branch 1 Branch 2 Total
Product Types
Including:
Classification by
business area
Including:
Market or customer
type
Including:
Contract Types
Including:
Classification by time
of goods transfer
Including:
Classification by
contract duration
Including:
Classification by sales
channel
Including:
Total
Information relating to performance obligations:
Nil
Information relating to the transaction price assigned to the remaining performance obligation:
At end of the period the corresponding revenue amount for performance obligations that have been signed but have not been
performed or have not been performed is 0.00 yuan of which yuan expected to recognized as revenue in the year.Other explanation:
223SHENZHEN ZHONGHENG HUAFA CO. LTD.
5. Investment income
Unit: RMB/CNY
Item The Period Last Period
6. Other
XVIII. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable □ Not applicable
Unit: RMB/CNY
Item Amount Note
Gains/losses from the disposal of
7871.56
non-current asset
Governmental subsidy reckoned into
current gains/losses (except for those with
normal operation business concerned and
conform to the national policies & 1297733.35
regulations and are continuously enjoyed
at a fixed or quantitative basis according to
certain standards)
Gains/losses arising from contingencies
not related to Company’s normal operating -736748.18
business
Except for the effective hedging
operations related to normal business
operation of the Company the gains/losses
of fair value changes from holding the
trading financial assets and trading 163562.36
financial liabilities and the investment
earnings obtained from disposing the
trading financial asset trading financial
liability
Other non-operating income and
expenditure except for the aforementioned 417245.81
items
Less: Impact on income tax 327147.84
Total 822517.06 --
Details of other gains/losses items that meets the definition of non-recurring gains/losses:
224SHENZHEN ZHONGHENG HUAFA CO. LTD.
□ Applicable √ Not applicable
There are no other gains/losses items that meet the definition of non-recurring gains/losses in the Company.Explain the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A
Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss
□ Applicable √ Not applicable
2. ROE and earnings per share
Earnings per share
Profits during report period Weighted average ROE Basic earnings per Diluted earnings per
share (RMB/Share) share (RMB/Share)
Net profits belong to common
stock stockholders of the 2.12% 0.0254 0.0254
Company
Net profits belong to common
stock stockholders of the
1.85%0.02210.0221
Company after deducting
nonrecurring gains and losses
3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
(2) Difference of the net profit and net assets disclosed in financial report under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
(3) Explanation on data differences under the accounting standards in and out of China; as for the
differences adjustment audited by foreign auditing institute listed name of the institute
4. Other
225
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