China Fangda Group Co. Ltd.

2019 Annual Report

April 2020

Chapter 1 Important Statement Table of Contents and Definitions

The members of the Board and the Company guarantee that the

announcement is free from any false information misleading statement or

material omission and are jointly and severally liable for the information’s

truthfulness accuracy and integrity.Mr. Xiong Jianming the Chairman of Board Mr. Lin Kebin the Chief

Financial Officer and Mr. Wu Bohua the manager of accounting department

declare: the Financial Report carried in this report is authentic and completed.

All the Directors have attended the meeting of the board meeting at which

this report was examined.

Forward-looking statements involved in this report including future plans

do not make any material promise to investors. Investors should pay attention to

investment risks.The Company needs to comply with disclosure requirements of the

Shenzhen Stock Exchange Industry Information Disclosure Guideline No.6 –

Listed Companies Engaged in Decoration Business and disclosure requirements

of the Shenzhen Stock Exchange Industry Information Disclosure Guideline

No.3 – Listed Companies Engaged in Property Development.

The Company has specified market management and production and

operation risks in this report. Please review the potential risks and measures

mentioned in the discussion and analysis of future development in IV. Operation

Discussion and Analysis.

Based on the total share capital after the market close on the stock

registration day when the profit distribution plan is implemented a cash

dividend of RMB 0.50 (tax included) will be distributed to all shareholders for

every 10 shares and no bonus shares will be sent or capital reserves will be

transferred to increase capital.The Company is currently implementing the Company's plan to repurchase

B shares in 2019. As of the date of the meeting of the board of directors to review

the 2019 profit distribution proposal it has repurchased 2705700 shares of the

Company's shares through a centralized auction transaction through a special

account for share repurchase securities At the end of 2019 the Company's total

share capital of 1123384189 shares was deducted. The current share capital

after repurchasing shares was 1120678489 shares as the base. The estimated

total amount of cash dividends is RMB56033924.45 (including tax) (the actual

total amount of dividends is registered as equity when the profit distribution

plan is implemented. (The total share capital after the market closes on the day

is the total dividend calculated based on the base).

After the Company's profit distribution plan is announced and

implemented if the total share capital changes the total share capital after the

market close on the share registration date when the profit distribution plan is

implemented is used as the base. According to the "distributable cash dividend

of RMB 0.50 per 10 shares (including tax) no The principle of "change" in the

announcement of the Company’s profit distribution implementation disclose the

total amount of dividends calculated based on the total share capital after the

market close on the stock registration day when the Company’s profit

distribution plan is implemented (total stock capital after the market close on

the stock registration day = the Company’s total share capital at the end of 2019

-The number of shares repurchased by the Company's plan to repurchase B

shares in 2019).

Table of Contents

Chapter I Difitions ............................................................................................................................. 8

Chapter 2 About the Company and Financial Highlights ............................................................ 13

Chapter 3 Business Introduction .................................................................................................... 19

Chapter 4 Operation Discussion and Analysis .............................................................................. 43

Chapter 5 Significant Events .......................................................................................................... 58

Chapter 6 Changes in Share Capital and Shareholders ............................................................... 65

Chapter 7 Preferred Shares ............................................................................................................ 65

Chapter 8 Information about the Company’s Convertible Bonds .............................................. 65

Chapter 9 Particulars about the Directors Supervisors Senior Management and Employees............................................................................................................................................................ 66

Chapter 10 Corporation Governance............................................................................................. 67

Chapter 11 Information about the Company’s Securities ............................................................ 73

Chapter 12 Financial Statements .................................................................................................... 80

Chapter 13 Documents for Reference ............................................................................................ 81

Definitions

Terms

Refers

to

Description

Fangda Group company the Company

Refers

to

China Fangda Group Co. Ltd.

Articles of Association

Refers

to

Articles of Association of China Fangda Group Co. Ltd.

Meeting of shareholders

Refers

to

Meetings of shareholders of China Fangda Group Co. Ltd.

Board of Directors

Refers

to

Board of Directors of China Fangda Group Co. Ltd.

Supervisory Committee

Refers

to

Supervisory Committee of China Fangda Group Co. Ltd.

Banglin Technology

Refers

to

Shenzhen Banglin Technologies Development Co. Ltd.Shilihe Co.Refers

to

Gong Qing Cheng Shi Li He Investment Management Partnership

Enterprise (limited partner)

Shengjiu Co.Refers

to

Shengjiu Investment Ltd.

Fangda Jianke

Refers

to

Shenzhen Fangda Jianke Group Co. Ltd.

Fangda Zhichuang

Refers

to

Fangda Zhichuang Science and Technology Co. Ltd.

Fangda New Material

Refers

to

Fangda New Materials (Jiangxi) Co. Ltd.

Fangda New Resource

Refers

to

Shenzhen Fangda New Energy Co. Ltd.

Fangda Property

Refers

to

Shenzhen Fangda Property Development Co. Ltd.

Chengdu Fangda Jianke

Refers

to

Chengda Fangda Construction Technology Co. Ltd.

Dongguan Fangda New Material

Refers

to

Dongguan Fangda New Material Co. Ltd.

Kechuangyuan Software

Refers

to

Shenzhen Qianhai Kechuangyuan Software Co. Ltd.Kexunda Co.Refers

to

Shenzhen Kexunda Software Co. Ltd.

Fangda Property

Refers

to

Shenzhen Fangda Property Management Co. Ltd.Jiangxi Property

Refers

to

Fangda (Jiangxi) Property Development Co. Ltd.

Hongjun Investment Company

Refers

to

Shenzhen Hongjun Investment Co. Ltd.

Fangda Qingling

Refers

to

Shanghai Fangda Qingling Technology Co. Ltd.

Fangda Cloud Rail

Refers

to

Shenzhen Fangda Cloud Rail Technology Co. Ltd.Jianke Australia

Refers

to

Fangda Australia Pty Ltd

Automatic Hong Kong

Refers

to

Fangda Automation (Hong Kong) Co. Ltd.

Shihui International

Refers

to

Shihui International Holding Co. Ltd.

Fangda Southeast Asia

Refers

to

Fangda Southeast Asia Co. Ltd.

Shenyang Fangda

Refers

to

Shenyang Fangda Semi-conductor Lighting Co. Ltd.Shenzhen Woke

Refers

to

Shenzhen Woke Semi-conductor Lighting Co. Ltd.

SZSE

Refers

to

Shenzhen Stock Exchange

Chapter 2 About the Company and Financial Highlights

1. Company profiles

Stock ID Fangda Group Fangda B Stock code 000055 200055

Modified stock ID (if any) None

Stock Exchange Shenzhen Stock Exchange

Chinese name China Fangda Group Co. Ltd.

Chinese abbreviation Fangda Group

English name (if any) CHINA FANGDA GROUP CO. LTD.

English abbreviation (if any) CFGC

Legal representative Xiong Jianming

Registered address

Fangda Technology Building Kejinan 12th Avenue High-tech Zone Hi-tech Park South Zone

Shenzhen PR China.Zip code 518057

Office address

20F Fangda Technology Building Kejinan 12th Avenue High-tech Zone Hi-tech Park South Zone

Shenzhen PR China.Zip code 518057

Website http://www.fangda.com

Email fd@fangda.com

2. Contacts and liaisons

Secretary of the Board Representative of Stock Affairs

PRINTED NAME Zhou Zhigang Guo Linchen

Address

20F Fangda Technology Building Kejinan

12th Avenue High-tech Zone Hi-tech Park

South Zone Shenzhen PR China.

20F Fangda Technology Building Kejinan

12th Avenue High-tech Zone Hi-tech Park

South Zone Shenzhen PR China.Telephone 86(755) 26788571 ext. 6622 86(755) 26788571 ext. 6622

Fax 86(755)26788353 86(755)26788353

Email zqb@fangda.com zqb@fangda.com

3. Information disclosure and inquiring

Press medias of information disclosure

China Securities Journal Security Times Shanghai Securities Daily Hong

Kong Commercial Daily

Website assigned by CSRC to release the online

reports

http://www.cninfo.com.cn

Place for information inquiry Secretarial Office of the Board

4. Registration changes

Organization code None

Changes in main businesses since the

listing of the Company

None

Changes in the controlling shareholders (if

any)

None

5. Other information

Public accountants employed by the Company

Public accountants RSM Thornton (limited liability partnership)

Address

901-22 to 901-26 Foreign Trade Building No.22 Fuchengmenwai Street Xicheng District

Beijing China

Signing accountant names Chen Zhaoxin Zeng Hui

Sponsor engaged by the Company to perform continued supervision and guide during the reporting period

□ Applicable √ Inapplicable

Financial advisor engaged by the Company to perform continued supervision and guide during the reporting period

□ Applicable √ Inapplicable

6. Financial Highlight

Whether the Company needs to make retroactive adjustment or restatement of financial data of previous years

□ Yes √ No

2019 2018 Increase/decrease 2017

Turnover (yuan) 3005749558.66 3048680152.06 -1.41% 2947470813.58

Net profit attributable to

shareholders of the listed company

(yuan)

347771182.73 2246164571.68 -84.52% 1144404441.03

Net profit attributable to the

shareholders of the listed company

and after deducting of

non-recurring gain/loss (RMB)

291449314.27 21171063.10 1276.64% 366212412.32

Net cash flow generated by

business operation (RMB)

-5284830.77 387102719.57 -101.37% 557833145.73

Basic earnings per share

(yuan/share)

0.310 1.91 -83.77% 0.97

Diluted Earnings per share

(yuan/share)

0.310 1.91 -83.77% 0.97

Weighted average net income/asset

ratio

6.82% 53.17% -46.35% 41.53%

End of 2019 End of 2018

Increase/decrease from

the end of last year

End of 2017

Total asset (RMB) 11369964580.11 10658854133.73 6.67% 7625422688.63

Net profit attributable to the

shareholders of the listed company

(RMB)

5182795079.67 5195187621.88 -0.24% 3238939202.18

7. Differences in accounting data under domestic and foreign accounting standards

1. Differences in net profits and assets in financial statements disclosed according to the international and

Chinese account standards

□ Applicable √ Inapplicable

There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account

standards during the report period.

2. Differences in net profits and assets in financial statements disclosed according to the overseas and

Chinese account standards

□ Applicable √ Inapplicable

There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account

standards during the report period.

8. Financial highlights by quarters

In RMB

Q1 Q2 Q3 Q4

Turnover 670452093.70 755438853.29 699243342.82 880615268.85

Net profit attributable to the

shareholders of the listed company

69998533.09 58583221.92 27468258.38 191721169.34

Net profit attributable to the

shareholders of the listed company

and after deducting of

non-recurring gain/loss

64930951.19 48446112.87 15661279.22 162410970.99

Cash flow generated by business

operations net

-296237735.96 -76487267.15 -35730387.83 403170560.17

Where there is difference between the above-mentioned financial data or sum and related financial data in quarter report and interim

report disclosed by the Company

□ Yes √ No

9. Accidental gain/loss item and amount

√ Applicable □ Inapplicable

In RMB

Item 2019 2018 2017 Notes

Non-current asset disposal gain/loss

(including the write-off part for which assets

impairment provision is made)

-101676.86 -5080792.02 89483320.53

Subsidies accounted into the current income

account (except the government subsidy

closely related to the enterprise’s business

and based on unified national standard

quota)

5411736.29 5931937.15 5637910.24

Capital using expense charged to

non-financial enterprises and accounted into

the current income account

585760.51 922330.10

Gain from entrusted investment or assets

management

27065331.33 20455865.70

Gain/loss from debt reorganization -3674141.05

Gain/loss from change of fair value of

transactional financial asset and liabilities

and investment gains from disposal of

transactional and derivative financial assets

and liabilities and sellable financial assets

other than valid period value instruments

related to the Company’s common

businesses

9236658.20 -1192774.07 2013922.62

Write-back of impairment provision of

receivables and contract assets for which

impairment test is performed individually

100023.62

Gain/loss from commissioned loans 442060.24

Gain/loss from change of fair value of

investment property measured at fair value

in follow-up measurement

42608311.58 2916598485.48 889708083.34

Other non-business income and expenditures

other than the above

-1108687.74 1675521.71 4054553.86

Other gain/loss items satisfying the

definition of non-recurring gain/loss account

-936467.20

Less: Influenced amount of income tax 164700.18 720926531.10 220906068.58

Influenced amount of minority

shareholders’ equity (after-tax)

-248850.00 8581417.95

Total 56321868.46 2224993508.58 778192028.71 --

Explanation statement should be made for accidental gain/loss items defined and accidental gain/loss items defined as regular

gain/loss items according to the Explanation Announcement of Information Disclosure No. 1 - Non-recurring gain/loss mentioned.

□ Applicable √ Inapplicable

No circumstance that should be defined as recurrent profit and loss according to Explanation Announcement of Information

Disclosure No. 1 - Non-recurring gain/loss occurs in the report period.

Chapter 3 Business Introduction

1. Major businesses of the Company during the report period

The Company is headquartered in Nanshan District Shenzhen. The stock was listed on the Shenzhen Stock Exchange on

November 29 1995. Currently five major business subsidiaries of the Company are national high-tech enterprises with large modern

production bases in Shenzhen Shanghai Chengdu Nanchang Dongguan and Foshan. The Company was engaged in the following

businesses in the report period.

1. High-end curtain wall system and material business:

(1) Main products and purpose

The Company’s main products include energy-saving curtain walls photo-electricity curtain walls LED color-display curtain

walls PVDF aluminum plate and graphene aluminum plate materials. Construction curtain walls are mainly used on high-level

buildings large-area public venues such as airports stations cultural centers and exhibition centers daylighting roof shaped

construction (ball-shaped and clock-shaped buildings) and buildings with external retaining and decoration functions.

(2) Macroeconomic situation of the industry the impact of changes in the industrial policy environment on the

Company and the countermeasures taken by the Company

Over recent years a series of industry policies will be issued to push forward the industry providing a gold opportunity for the

development of energy-saving curtain wall and material business. With the continuous advancement of the national urbanization

process the economic development of first- and second-tier cities governments at all levels in infrastructure such as municipalities

and investment in public buildings such as medical education sports etc. have released a sustained demand for building curtain

walls. Therefore the curtain wall system and material industry have a larger market capacity. In 2019 China's supply-side structural

reforms continued to deepen and the national regional coordinated development strategy was further promoted. New urbanization

coordinated development of Beijing-Tianjin-Hebei ―Belt and Road‖ construction and Guangdong Hong Kong Macao and Dawan

District development projects provided valuable opportunities for the development of the curtain wall systems and materials business.

On February 18 2019 the Central Committee of the Communist Party of China and the State Council issued the Outline of the

Guangdong-Hong Kong-Macao Greater Bay Area Development Plan which proposed optimizing and enhancing the central city

with Hong Kong Macau Guangzhou and Shenzhen as the core engines of regional development. Comparative advantages make

better and stronger and enhance the role of radiation in the development of surrounding areas. On August 18 2019 the Central

Committee of the Communist Party of China and the State Council issued the Opinions on Supporting Shenzhen to Build a

Pioneering Socialist Demonstration Zone with Chinese Characteristics and cultural exchange activities building a national team

training base undertaking major home diplomatic activities etc. As an important curtain wall market for the Company Shenzhen the

above-mentioned planning outline and opinions will bring further development space to the Company. Recently governments at all

levels have issued plans to increase investment projects to hedge against the economic impact of the new coronary pneumonia

epidemic. The Company will seize the opportunity to further consolidate and increase market share.

In 2019 the Company will continue to steadily hit the traditional high-quality markets such as the Guangdong-Hong

Kong-Macao Greater Bay Area the Yangtze River Delta Beijing-Tianjin-Hebei and Chengdu-Chongqing regions continue to

increase the expansion of overseas markets establish a long-term development mechanism for teams continue to enhance the brand

image and focus on key customers Enriching high-quality resources establishing strategic alliances with outstanding enterprises

and increasing investment in hardware and software. The construction of the intelligent chemical plant in Dongguan Songshan Lake

base has achieved results. Intelligent glue application and intelligent electric welding have begun to be used in production improving

efficiency and quality. "Towards intelligent manufacturing" the Chengdu Xinjin production base was put into operation and the

construction of the Shanghai Songjiang production base was completed by 70% creating conditions for the Company to increase

production increase income and continue rapid development.

(3) Main business modes specific risks and changes;

The projects implemented by the Company are mainly through the bidding method to obtain contract orders. Project design

material procurement production and processing and the construction and installation and after-sales service model are based on the

contract orders. The main risk of this mode is that it takes a long period of time from the completion of the order to the completion of

the project and it is highly dependent on raw materials and labor costs. It is greatly affected by the national industrial policy raw

material prices and labor market fluctuations. Different contract orders have different requirements imposing high requirements on

technology and production management. The main business model of the Company's curtain wall engineering is the entire industry

chain from design process material procurement production and processing to construction and after-sales service. The operation

mode remained unchanged in the report period.

(4) Market competition pattern cyclical characteristics of the Company's industry and the Company's market position

In recent years with the increasing pressure of market competition the industry has become more refined and standardized.Small businesses with fragmented operations unqualified and weak competitive ability have been eliminated by the market and

market concentration has increased. The competition in the high-end market is dominated by the brand and strength of the curtain

wall enterprises and requires the participating enterprises to have complete qualifications large scale advanced technology

standardized management and deep talent reserve and gradually form a certain competition threshold. At the same time the total

number of employees in the curtain wall industry is declining and the contradictions in human resources are more prominent. It also

puts forward more urgent needs for intelligent manufacturing and management tool applications. There is no obvious periodicity in

the curtain wall industry.The Company is a pioneer and first listed company in this industry. Over the past more than 20 years the Company has

undertaken hundreds of large projects and received the highest award in the industry China Construction Luban Award and Zhan

Tianyou Civil Engineering Award for many times. The Company has also received nearly 100 provincial and above awards. The

Company has been in the top 10 of ―China's top 100 building curtain wall industry‖ for many years and has already had strong brand

advantages and competitiveness in the industry. The Company has a strong technology lead in the industry with 457 patents

including 38 intention patents and 11 software copyrights. The Company also took part in the preparation of more than 10 national or

industry standards including the Public Construction Energy Saving Design Standard making 9 records among Chinese enterprises.The Company has a Class A qualification for building curtain wall engineering contracting and class A qualification for building

curtain wall engineering design. It is the highest level for curtain wall design and construction companies in China.

(5) Industry qualification types and validity period

During the reporting period the Company's relevant qualifications have not changed significantly and the validity period has

not expired. For the detailed information about the qualifications obtained please refer to the Chapter V XIX Explanation of Other

Major Matters of this report.

(6) Quality control system implementation standards control measures and overall evaluation

Quality control system: The Company implements a comprehensive quality management system and has established a quality

management system in accordance with ISO9001 from the aspects of design procurement storage production testing delivery

installation and after-sales service and conduct regular reviews.Implementation of the standard: In the process of building curtain wall business the Company strictly complies with

GB/T21086-2007 "Building Curtain Wall" JG/T231-2007 "Building Glass Lighting Roof" and other national and industrial

standards.

Control measures: The Company has established complete and effective quality control measures and quality management

bodies and strictly implements various quality management and control measures.Overall evaluation: The Company's products and project quality are in full compliance with the relevant requirements of the

relevant national standards and standards and maintain proper operation providing customers with stable and reliable quality

products and engineering.

(7) Major project quality problem during the reporting period

None.

2. Rail transport equipment business:

The Company's main products in this sector are rail transport screen door systems and technical maintenance services which

are a necessary part of modern subway system. It is installed at the edge of the subway platform and separates trains from the

platform. The business model is to order-based production obtain contract orders through bidding (divided into open bidding and bid

invitation) design process purchase raw materials factory production construction and installation and technical maintenance

services according to the orders. The Company has built a complete industry chain that integrates designing production engineering

and after-sales services. The operation mode remained unchanged in the report period. The Company has established a quality

management system from design procurement production installation and after-sales service in accordance with ISO9001 and has

passed ISO9001 ISO14000 and international railway IRIS system certification. The Company has developed rail transport screen

door systems with independent intellectual property rights. The Company also prepared the first Rail Transport Station Screen Door

Standard. The Fangda screen door system with technical standards at the international advanced level has been used in rail transit in

42 cities around the world. More than 10 million people use the Fangda screen door screen system every day and the coverage rate in

domestic metro operating cities exceeds 80%. The market share ranks first in the world for many years.

3. New energy industry: Solar PV power generation industry is largely supported by the Chinese government. The Company is

one of the first companies that possess intellectual property rights in the designing production and integration of solar PV systems. In

2019 the grid-connected Jiangxi Pingxiang Xuanfeng Town Solar Photovoltaic Power Station Nanchang Jiangxi Isuzu Automobile

Co. Ltd. Parking Shade Photovoltaic Power Station and Dongguan Songshan Lake Photovoltaic Power Station all operated smoothly

and the power generation efficiency was in line with the design. In 2019 it achieved sales revenue of RMB20.94 million an increase

of 2.27% over the previous year and an operating profit of RMB11.6568 million an increase of 5.88% over the previous year. It will

continue to bring long-term and stable income and profits to the Company in the future.

4. Real estate

The Company currently has one completed project: Fang Dacheng ("Fang Dacheng" the same below) project in Nanshan

District Shenzhen; one project under development: the Nanchang Phoenix Island Fangda Center project; Two: Fangda Bangshen

Industrial Park project in Baoan District Shenzhen and urban renewal project in the area along the Dakang River in Henggang

Shenzhen.

For a detailed discussion of the Company’s business please refer to “III. Analysis of Core Competencies” in this section

of the report and Chapter VI “Operation Discussion and Analysis”.II. Major assets change

1. Major assets change

Main assets Major change

Equity assets None

Fixed assets None

Intangible assets None

Construction in process

The construction in progress increased by 123.08% year-on-year mainly due to the

increased investment in the construction of the Shanghai East China Base project.

Investment real estate None

2. Major foreign assets

□ Applicable √ Inapplicable

3 Core Competitiveness Analysis

(1) Curtain wall system and material

1. Expertise and brand competitiveness

As the world's top five high-end curtain wall system suppliers and service providers the Company has rich industry experience

professional technical team and excellent construction team. It is an outstanding domestic curtain wall enterprise and has built

thousands of high-quality projects at home and abroad winning widespread praise from all walks of life. The industry and target

market of the Company have high requirements for the performance of participating enterprises which has formed certain thresholds.

Especially in the super high-rise buildings large public buildings and special-shaped external maintenance structures the Company

has rich experience in project implementation. It has established business contacts and cooperation with many large real estate

development companies. The Company has a high reputation and strong market competitiveness.The Company has 457 patents (including 38 invention patents) and 11 software copyrights in the curtain wall system and

materials industry which has created many firsts in the industry and is one of the high-end preferred brands in the Chinese curtain

wall system materials industry. So far four subsidiaries including Shenzhen Fangda Jianke Group Co. Ltd. Fangda New Material

(Jiangxi) Co. Ltd. Dongguan Fangda New Material Co. Ltd. Chengdu Fangda Construction Technology Co. Ltd. have been

recognized as hi-tech companies. FANGDA is a nationwide well-known trademark in China.

2. Focusing on the high-end market to edge out competitors

In the fierce market competition the Company accurately positions the market in the field of high-end energy-saving curtain

wall systems with high requirements for technology service and management and focuses its resources on high-end curtain wall

projects. Many of the curtain wall projects undertaken won the national "Luban Award" "Zhan Tianyou Civil Engineering Award"

"National Quality Engineering Award" "China Construction Engineering Decoration Award" "White Magnolia" Award and

"Customer Satisfaction Project" awards and Won the title of ―Top Ten Most Competitive in China's Curtain Wall Industry‖. The

Company has built a leading brand and created a clear edge in the high-end curtain wall market.

3. Well-developed industry base landscape

Thanks to continued investment in facilities the Company has established a national business landscape with Shenzhen as the

headquarters Dongguan Songshanhu as the base in the south Beijing in the north Chengdu in the southwest and Shanghai and

Nanchang in the east. The Dongguan Songshanhu and Nanchang bases are the largest and most advanced curtain wall system and

material production bases in China and across the world fueling the Company to increase its market share and competitiveness.

4. General solutions

The Company has integrated the design production management and engineering of curtain wall systems to enjoy

technological cost quality and service advantages.

5. Talent

The Company has trained a group of outstanding teams with strong marketing technical management and financial experience

from a large number of project implementation experience. The core backbone personnel are stable ensuring the execution ability of

orders and bringing good user experience to customers.

6. Boost overseas market development to increase overseas orders

In recent years the Company has increased its investment in overseas markets and gradually expanded its influence in Australia

and Southeast Asia. Thanks to good product quality and contract performance it has continuously won the trust of new and old

customers and more orders. The overseas market orders are growing steadily.

(2) Rail transport equipment business

1. National development strategy

In September 2019 the "Outline for the Construction of a Powerful Transportation Country" issued by the Central Committee

of the Communist Party of China and the State Council proposed that by 2035 a transportation powerhouse will be basically

completed and a "national 123 travel transportation circle" will be basically formed (one hour commuting in urban areas two hours

in urban areas 3 hours coverage in major cities nationwide). With the implementation of major national strategies such as the

Guangdong Hong Kong and Macao Bay District and the ―Belt and Road‖ Initiative the region has radiated into Southeast Asia

South Asia Central Asia and West Asia and has extended to Eastern Europe and North Africa with strong demand for infrastructure

construction and interconnection. As the world's largest supplier of rail screen door systems the Company will also take full

advantage of technologies brands services etc. to further consolidate and improve the domestic market share and vigorously

expand overseas markets especially the "Belt and Road" national market to maintain overseas orders. Continuity and stability will

allow the domestic and foreign markets to develop in a balanced manner and continue to ―lead‖ in the rail transit industry.

2. Expertise competitiveness

Through continued independent innovation the Company has developed the global leading metro screen door system with full

intellectual property right and broken the monopoly of overseas competitors. The Company has also compiled the Rail Transport

Station Screen Door Standard which is the first of its kind in China. The standard was approved in April 2006 and implemented as a

national standard on March 1 2007. As the first standard in the industry in China the standard has played a key role in guiding the

development of China’s rail transport screen door industry and enabled the Company a dominant lead in the industry. In 2019

following the editor-in-chief of the Urban Rail Transit Platform Screen Door the Company once again participated in the preparation

of the Urban Rail Transit Energy Consumption and Emission Index Evaluation Method (GB / T 37420-2019) and officially

implemented it on December 1 2019 highlighting the Company's technical strength and long-term leader status in the field of urban

rail transit. At present the Company has 235 patents on subway shield doors including 48 invention patents and 7 PCT patents. The

total number of patents accounts for more than half of the industry in China. At the same time it has 7 computer software copyrights.

Fangda Zhichuang Technology Co. Ltd. is engaged in the subway transportation shield door system industry as a state-level

high-tech enterprise.

3. Brand competitiveness

So far the Company has undertaken railway screen door projects in more than 40 cities including Hong Kong Singapore

Kuala Lumpur of Malaysia Noida of India and Bangkok of Thailand. The Fangda subway screen door system has grasped a leading

market share and established incomparable brand influence thanks to its patents standard and maintenance services. FANGDA is a

nationwide well-known trademark in China. The Company has become a leading railway screen door supplier in the world.

4. Industry chain advantage

As the first company to enter the subway screen door industry in China the Company's subway screen doors have reached to

more than 80% of the subway cities in China and many domestic subway screen doors have entered the maintenance period. The

Company actively expands its industrial chain and takes the lead in the domestic market to provide metro maintenance services. The

Company has a natural advantage in this high-end service industry. Our screen door system are independently developed by us thus

enabling us to provide prompt overall effective and standard maintenance services for our customers without other third parties. As

more and more subways are opened the business volume will continue to increase.

(3) New energy industry

The new energy business mainly comprises solar power PV application PV construction and LED industry.

1. Technical advantage

With more than ten years’ experience in developing solar energy PV power generating curtain wall technology the Company is

the earliest company that masters the intelligent property right in the designing production and integration of solar energy PV curtain

wall systems and is a pioneer in the application of PV curtain wall technology.

2. Relation with other industries

Distributed solar power PV power generation is closely related to the Company’s existing businesses. Most distributed solar

power PV systems are closely related to construction. Moreover the Company has more than 10 years' experience in electrical

product integration. The Company also has more than 20 years’ experience in construction management and has the level-1

construction curtain wall engineering qualification and electrical installation engineering qualification.

(4) Real Estate

1. The Company is committed to the Guangdong-Hong KongMacao Bay District focusing on the development of urban

renewal projects in the core area of Shenzhen. Benefiting from the continued positive economic growth of Shenzhen and the rapid

economic development it is expected that the Company's real estate sales and property leasing will continue to contribute profits to

the Company.

2. Although the Company is a later comer in the industry the Shenzhen Fangda Town project was quickly recognized by the

market and the sales rate was faster. At the same time the Company has been rated as ―Shenzhen Real Estate Development Industry

Development Potential Enterprise‖ by Shenzhen Housing Association for three consecutive years. In two consecutive years it has

been awarded ―Shenzhen Real Estate Development Industry Brand Value Enterprise‖ with professional operations for commercial

and property management.

Chapter 4 Operation Discussion and Analysis

1. Summary

With the global economic growth rate at its lowest level in the past decade the impact of Sino-US trade war has increased and

the domestic economy has continued to decline the Company has overcome many unfavorable factors and basically completed the

goals set at the beginning of the year. During the reporting period the Company achieved operating income of RMB2998505100 a

decrease of 1.65% over the same period of the previous year; the net profit attributable to the parent Company’s owner was

RMB346415300 a decrease of 84.58% over the same period of the previous year. Net profit after recurring gains and losses was

RMB291954600 an increase of 1279.03% over the same period of the previous year. The Company's net profit after deducting

non-recurring gains and losses increased significantly reflecting the Company's main business has a strong profitability. As of the

end of the reporting period the Company's order reserve was RMB4537130700 (excluding real estate sales) an increase of 7.71%

compared with the beginning of the year which was 1.51 times of the operating income in the first half of the year. Adequate order

reserve provided a strong guarantee for the Company's sustainable development.

During the reporting period the main reason for the decline in the Company's operating income and net profit was the high

gross profit and the sales area of the Shenzhen Fangda City project which contributed much to the profit in the same period of the

previous year was nearing completion. The year-on-year decrease was RMB392124500 a decrease of 56.09% and the net profit

was RMB199990200 a decrease of RMB200752500 a decrease of 90.94% over the same period of the previous year. During the

reporting period except for the Fangda Town project with a larger profit contribution the Company's operating income and net profit

increased significantly compared with the same period of last year of which: operating income was RMB2692235500 an increase

of RMB341073400 up 14.51%; net profit of RMB146512400 an increase of RMB107775800 over the same period last year up

278.21%.

1. High-end curtain wall system and material business

On February 18 2019 the Central Committee of the Communist Party of China and the State Council issued the Outline of the

Guangdong-Hong Kong-Macao Greater Bay Area Development Plan which proposed optimizing and enhancing the central city

with Hong Kong Macau Guangzhou and Shenzhen as the core engines of regional development. Comparative advantages make

better and stronger and enhance the role of radiation in the development of surrounding areas. On August 18 2019 the Central

Committee of the Communist Party of China and the State Council issued the Opinions on Supporting Shenzhen to Build a

Pioneering Socialist Demonstration Zone with Chinese Characteristics and cultural exchange activities building a national team

training base undertaking major home diplomatic activities etc. The Company is located in Shenzhen the core area of the

Guangdong-Hong Kong-Macao Greater Bay Area. The Guangdong-Hong Kong-Macao Greater Bay Area is an important curtain wall

market for the Company. The above-mentioned planning outline and opinions bring further development space for the Company. The

Company takes full advantage of Shenzhen which is located in the core area of the Guangdong-Hong Kong-Macao Greater Bay Area

to further increase the market share of the Guangdong-Hong Kong-Macao Greater Bay Area. The Company has always practiced the

business philosophy of ―technology-based innovation as the source‖ adheres to the spirit of ―Fangda Quality‖ with excellence and

quality first and with the core competitiveness of product quality technical strength and brand influence. The quality and quantity of

the newly signed orders in the first half of the year have remained at a high level. At the same time the influence of Fangda's brand

in overseas markets continues to expand and overseas markets such as Australia Southeast Asia and the Middle East have achieved

good results. During the reporting period the Company successively won contracts with Shenzhen Qianhai East Asia Kerry

Shenzhen Shangzhi Technology Park Shenzhen Jinxiu Science Park Phase III Shenzhen University of Technology Guangzhou

Jianhua Center Zhuhai Renhe Hengqin International Traditional Chinese Medicine Innovation Center Shanghai Xuhui 188S-C-4

188S-D-1 WS5 Unit Huangpu Jiangnan Extension of the District Shanghai Qibao Vanke Ecological Business District Commercial

Office Project Nanjing Vanke Shangdu Hui Project Chengdu Tianfu Vanke Cloud City Chengdu Tianfu International Conference

Center Chongqing Longhu Shapingba Hub Project Beijing Huoshen Temple Business Center Changsha Ning'er Maternity Hospital

Phase II Complex Building Marriott Docklands Marriott Hotel Melbourne Melbourne Victoria Square Melbourne Australia 89

Victoria Street Brisbane Australia A large number of high-end curtain wall systems and materials projects such as stations and the

Shanta Forum Tower project in Bangladesh have a total amount of more than RMB2 billion. In the reporting period the curtain wall

system and materials industry realized operating income of RMB2189637800 an increase of 8.9% over the same period of the

previous year; the net profit was RMB104111900 an increase of 7.25% the gross margin was 15.16% up 0.75 percentages from

the same period of last year. As of the end of the reporting period the Company's curtain wall system and materials industry orders

reserve was RMB2713325800 which was 1.24 times of the operating income of the curtain wall system and materials industry in

2019.

In order to meet the growing demand for orders the Company has established new production bases in Chengdu Xinjin and

Shanghai Songjiang. This year the Fangda Western Headquarters Base of Chengdu Xinjin has been completed and put into operation.The base covers an area of 45000 square meters and has a total construction area of about 21000 square meters. In the first half of

2019 the East China production base in Songjiang Shanghai started construction and is planned to be completed and put into use in

2020. The base covers an area of 23800 square meters and the total construction area is about 43000 square meters. After the

completion of the two bases the national industrial layout of the upgrade company will be improved and the production capacity of

the Company's energy-saving and environmental protection curtain wall will be enhanced to provide guarantee for the Company's

sustained and rapid development. After completion the Company's curtain wall system and materials industry are formed with

Shenzhen as the headquarters South China with Dongguan Songshan Lake and Foshan as the base Southwest China with Chengdu as

the base East China with Shanghai and Central China with Nanchang. As the base of the national industrial layout it provides an

important guarantee for improving market share and comprehensive competitiveness.The Chinese economy is transitioning to high-quality development and the Company continues to increase R & D efforts

starting with technological innovation and actively promoting the introduction and application of advanced technologies such as

intelligent manufacturing robotics Internet of Things AI VR + AR and big data. Preliminary success. The construction of the

intelligent chemical plant at the Songshan Lake base in Dongguan has achieved initial results. Intelligent glue application and

intelligent electric welding have begun to be used in production improving efficiency and quality and gradually moving from

"manufacturing" to "intelligent manufacturing".

In 2019 three projects including the Chinese University of Hong Kong (Shenzhen) Teaching Building Guangzhou Baosteel

Building and Chengdu Territory Global Financial Center which were constructed by the Company won the highest honor in the

Chinese construction industry-Luban Award Fang Dacheng (Phase I) and Shenzhen Energy Five projects including the building won

the China Construction Engineering Decoration Award and the 2019 Excellent Engineering Award; 11 curtain wall projects won

provincial and municipal honorary awards respectively. The application of the Company's BIM technology in design was promoted

in the industry by the China Construction Industry Association as a model. The Company was rated as an excellent partner by

customers such as Vanke R & F Qianhai Life and other customers. Increased the Company's brand influence.

2. Rail transport screen door business

With the continuous advancement of domestic urban subway construction and the continuous implementation of the ―Belt and

Road‖ initiative in 2019 the leading advantages of the Company's subway screen door industry continue to emerge and the

Company's rail traffic screen door equipment industry is expanding at home and abroad. During the reporting period the Company

has successively obtained Mumbai Metro Line 3 Nanjing Metro Line 7 Zhengzhou Line 4 Ningbo Metro Line 1 Guiyang Metro

Line 2 Phase 2 Jinan Rail Transit Line 2 Phase 1 Nanchang 3 Line (Part B) Taiyuan Metro Line 2 Wuhan Metro Line 5 Line 6

Phase 2 Line 11 (Phase 2 Phase 3 Gedian Section) Xi'an Metro Line 5 Line 6 A large number of orders for shielded door systems

such as railway lines and also received orders for professional maintenance services for shielded doors of Wuhan Railway Bureau

Shenzhen Metro Line 9 and other projects shielding of Shenzhen Metro Lines 1 2 3 5 7 9 11 For door installation projects the

total amount of newly signed orders was RMB874811600 a year-on-year increase of 20.52%. Among them the Mumbai Metro

Line 3 project in India is the third project of the Company in the Indian market after the Noida subway in India and the Ahmedabad

subway project in India. Rapid development opportunities of the Indian subway construction. Speed up the overseas market layout

and further expand the Company's business landscape. In addition with the development of a new generation of information

technology the domestic subway has also entered the era of fully automated driving and the technical requirements for screen doors

have also increased the threshold. With solid technical strength the Company won 4 of the 5 subway autonomous driving projects

that have been tendered in China (Nanjing Metro Line 7 Jinan Rail Transit R2 Phase 1 Taiyuan Metro Line 2 Wuhan City) Metro

Line 5) orders for automatic driving screen doors have won opportunities for the continuous development of the intelligent screen

door market.报告期内，公司轨道交通屏蔽门设备产业实现营业收入46090.67万元，同比增长54.83%，实现净利润6270.64万元，同

比增长32.07%，毛利率25.4%，公司轨道交通屏蔽门设备产业具有持续较强的盈利能力。 As of the end of 2019 the Company's

rail transit screen door equipment industry order reserve reached RMB182380490 which was 3.96 times the operating revenue of

the rail transit screen door equipment industry during the reporting period. The Company's rail transit screen door equipment industry

has reached a new level entering a new era of rapid development and continuing to lead the industry.

During the reporting period Wuhan Metro Line 2 South Extension Line Line 8 Phase 3 Zhengzhou Metro Line 5 Phase 1

Lanzhou Metro Line 1 Phase I Nanchang Metro Line 2 Houtong Section Line 1 of the Hohhot Metro Line has been opened for

operation. At present the Fangda screen door system has been applied to rail transit in 42 cities around the world. More than 80

subway lines and more than 10 million people use the Fangda rail transit screen door system every day and the coverage rate in

domestic metro operating cities exceeds 80 % The market share ranks first in the world for many years.With the end of the free maintenance period for more and more rail transit screen doors the demand for specialized technical

maintenance services continues to grow. In 2019 the Company achieved technical maintenance service income of RMB24.8462

million yuan an increase of 3.90% over the same period last year. The Company is a leading company that can provide the entire

industry chain technology and product services for subway screen doors. The added value of technical services is high. In the future

this business will become an important performance growth point for the Company. The Company will also strive to become a metro

screen door technology maintenance service expert.

As the world's leading supplier of screen doors the Company has completely independent intellectual property rights of rail

transit platform screen doors system patents and copyrights account for more than half of the same industry in the world and has

strong technical strength in the field of screen doors. China's first railway platform shield door industry standard was edited by the

Company. Since its promulgation and implementation on March 1 2007 it has played a good role in regulating and guiding the

technological innovation and development of China's rail transit platform shield door industry. In recent years with the increasing

technological level of the industry new materials new technologies and new technologies have continuously emerged in the

practical application of rail transit screen doors. The Ministry of Housing and Urban-Rural Development has initiated the revision of

the industry standard for the City Rail Platform Screen Doors the Company continues to undertake the main editing tasks. In October

2019 the revised version of the standard was submitted for review and was determined as the final version. On May 10 the

Company participated in the preparation of the national standard ―Evaluation Method for Urban Rail Transit Energy Consumption

and Emission Indicators‖ (GB/T 37420-2019) which was published in 2019 and formally implemented on December 1 2019. The

Company's participation in the preparation of the Urban Rail Transit Platform Screen Door and in the standard compilation in the

domestic rail transit field reflect the Company's technology in the urban rail transit field.

3. New energy industry

During the reporting period the Company's three solar photovoltaic power stations that have been connected to the grid have

maintained efficient stable and safe operation. The annual sales revenue was RMB20.94 million an increase of 2.27% over the

previous year and the operating profit was RMB11.6568 million an increase of 5.88% over the previous year exceeding

expectations.

4. Real estate

(1) Changes in the macroeconomic situation and industry policy environment the status of industry development and policy

situation in the city where the Company's main projects

In 2019 the main theme of the national real estate market is still to maintain stability not to speculate on housing and to

govern the city. The national real estate market continued to cool down transaction volume decreased significantly real estate

inventories were high and the pressure to de-market the market was high.The main project locations of the Company are Shenzhen and Nanchang. Shenzhen is located in the core area of Guangdong

Hong Kong and Macau Bay and the economy continues growing. The Company focuses on the development of urban renewal

projects in Shenzhen. With the rapid development of Shenzhen's economy it is expected that there will still be some room for

development in the real estate industry in Shenzhen and surrounding cities.Under the control policy of Nanchang Real Estate the overall residential transactions have been stable the prices and volume

of commercial and office buildings have fallen and the pressure to remove inventory is high.

Affected by macroeconomic and real estate industry regulation the sales volume and business gross profit margin of the

Company's real estate sector will decrease but it is expected that the Company's real estate sales and property leasing will still be an

important source of cash flow for the Company and will continue to contribute profits to the Company.

(2) The Company's main business model business project format real estate sales in the city where the main project is located

market position and competitive advantages of listed companies main risks and countermeasures

The Company's real estate business mainly adopts a self-developed partly sold and partly self-sustained business model

moving closer to holding commercial properties and asset-light operating models. At present the products developed and sold are

mainly offices supporting businesses and apartments. The Company has established a professional team to operate and manage the

Company's businesses and properties.

The Fangda Town project developed by the Company is located in Nanshan District Shenzhen. As of the end of the reporting

period the project sales rate was 91.83%. For specific sales see ―(V) Main Project Sales‖ in this section; It is a small and

medium-sized commercial complex integrating office apartment shopping leisure and entertainment. The project focuses on sales

and rental. The pre-sale began on December 28 2019. No sales were realized during the reporting period.

Although the Company is a late comer in the real estate industry the Fangda Town project developed by the Company has been

quickly recognized by the market and the sales rate has been fast. At the same time the Company has been rated as "Shenzhen Real

Estate Development Industry Development Potential Enterprise" by the Shenzhen Real Estate Industry Association for three

consecutive years. In two consecutive years it was named "Shenzhen Real Estate Development Industry Brand Value Enterprise".With the influence of Fangda Brand and its strong professional level the Company has gained a firm foothold in the market

competition and its market position has gradually increased.Nanchang's commercial office buildings have a large inventory and the volume and price are showing a downward trend.However the location of the Company's Fangda Center project has obvious location advantages and the products have good market

expectations.

(3) New land reserve projects

Land No. and

project name

Land location Purpose

Land area

(m2)

Building area

(m2)

Obtaining

method

Interests

percentage

Total land

price (ten

thousand

yuan)

Equity

consideration

(ten thousand

yuan)

None

Total land reserve

Project/region name Floor area (10000 m2) Total building area (10000 m2)

Remaining building area

(10000 m2)

Fangda Town 3.53 21.24 0

Nanchang Fangda Center 1.66 6.64 0

Total 5.19 27.88 0

(4) Main production development status

City/reg

ion

Project

Land

location

Project

form

Interests

percenta

ge

Starting

time

Develop

ment

progress

Complet

ion rate

Land

area

(m2)

Plannin

g

construc

tion area

(m2)

Area

complet

ed in

this

phase

(m2)

Total

area

complet

ed in

this

phase

(m2)

Estimat

ed total

investm

ent (in

RMB10

000)

Accumu

lated

total

investm

ent (in

RMB10

000)

Shenzhe

n

Nansha

n

District

Fangda

Town

No.2

Longzh

u 4th

Road

Office

commer

cial

complex

100.00

%

May 1

2014

100%

100.00

%

35397.

60

212400

.00

0

217763

.69

258500 265000

Honggu

tan New

District

Nancha

ng

Fangda

Center

No.1516

Ganjian

g North

Avenue

Fangda

Center

Comme

rcial

100.00

%

May 1

2018

49% 49.00%

16608.

55

66432.

61

0 0 67000 32800

(5) Main production sales status

City/regi

on

Project

Land

location

Project

form

Interests

percenta

ge

Building

area

Sellable

area (m2)

Cumulati

ve

pre-sale

(sales)

area (m2)

Pre-sale

(sales)

area in

this

period

(m2)

Amount

of

pre-sale

(sales) in

the

current

period

(RMB10

000)

Cumulati

ve

settleme

nt area

(m2)

Settleme

nt area in

the

current

period

(m2)

Settleme

nt

amount

in this

period

(RMB10

000)

Shenzhe

n

Nanshan

District

Fangda

Town

No.2

Longzhu

4th Road

Office

commerc

ial

complex

100.00% 212400

93086.2

5

85479.4

2

3068.92

18622.6

3

85479.4

2

3068.92

18622.6

3

Honggut

an New

District

Nanchan

g

Fangda

Center

No.1516

Ganjiang

North

Avenue

Fangda

Center

Commer

cial

100.00%

65388.4

2

32460.1

1

0 0 0 0 0 0

(5) Main production lease status

Project Land location Project form

Interests

percentage

Leasable area

(m2)

Cumulative

leased area (m2)

Average lease

ratio

Shenzhen Fangda

Town

Shenzhen

Nanshan District

Office

commercial

complex

100.00% 72517.71 23661.88 32.63%

Shenzhen Fangda

Town

Shenzhen

Nanshan District

Commercial shop 100.00% 22775.52 22455.31 98.59%

Jiangxi Nanchang

Science and

Technology Park

Nanchang

Jiangxi Province

Plant and office

building

100.00% 33362.20 33362.20 100.00%

Fangda Building

Shenzhen

Nanshan District

Office building 100.00% 17792.47 15029.30 84.47%

(7) First-level development of land

□ Applicable √ Inapplicable

(8) Financing source

Financing source

Ending financing

balance

Financing cost

range / average

financing cost

Term structure

Within 1 year 1-2 years 2-3 years Over 3 years

Bank loan 84397.82

During the same

period the

benchmark interest

rate of the loan was

adjusted at the

agreed rate of

-6.175%

40000.00 29397.82 15000.00

Total 84397.82 40000.00 29397.82 15000.00

(9) Development strategy and operation plan in the next year

In 2020 China will still be in an important period of strategic opportunities and a period of conversion of old and new kinetic

energy. Urbanization is still the driving force for real estate development. Under continuous control industry fluctuations are market

behaviors. The Company continues to be optimistic about the future development of core urban real estate. In the future the

Company will continue to expand the brand effect deepen the product types deepen the local market and effectively improve the

Company's operating performance.

The sales and leasing of Shenzhen Fangda City and Nanchang Fangda Center are the top priorities of the Company's real estate

work in 2020. It is necessary to fully realize the sales and leasing of office buildings in Fangda City and Nanchang Fangda Center.

In August 2019 the Company's Fangda Bangshen project has completed its updated project plan. In 2020 the Company will

actively promote the special planning application of the Fangda Bangshen project and strive to obtain the project's land use planning

license by the end of the year. In 2019 the Shenzhen Henggang Dakang project has completed the solicitation of the renewal will

and started the demarcation of the update unit. In 2020 the Company will promote the application of the Henggang Dakang project.It is expected that the real estate sales and property leasing will continue to contribute profits to the Company in the future. In order

to achieve its business objectives the Company will adhere to its strategic commitment maintain a reasonable pace of development

continue to increase sales efforts strengthen sales receivables rationally arrange financing ensure the Company is safe and sound

and strive to achieve the Company's 2020 goals.

(10) Bank mortgage loan guarantee provided for commercial housing purchasers

√ Applicable □ Inapplicable

As of December 31 2019 the balance of the Company's guarantee for commercial housing offenders due to bank mortgage

loans was RMB849195100.

(11) Co-investment by directors senior management and supervisors and listed company

□ Applicable √ Inapplicable

5. Innovation

The Company is committed to the research and development of independent intellectual property products and enhances its

core competitiveness. In 2019 the Company independently developed 25 new products including "BIM digital process design

feeding system" "assembled roof curtain wall system" "graphene powder sprayed aluminum veneer research and development"

"platform door unmanned control system research and development". Intelligent production processes such as intelligent welding and

intelligent glue application have begun to be used in production to promote product quality improvement reduce labor intensity

reduce labor costs improve work efficiency and increase economic benefits.

As of the end of December 2019 the Company has obtained 826 patents including 112 invention patents 10 international PCT

patents and 12 software copyrights. 44 patents applied for in 2019 26 newly authorized patents (including 1 invention patent) The

wholly-owned subsidiary Fangda Jianke's invention patent "a building curtain wall structure" won the "Shenzhen Patent Award".

6. Awards

During the reporting period the Company won the "National Advanced Enterprise of Wan Peng Helping Wan Cun" Targeted

Poverty Alleviation Action "May Day Labor Certificate of Guangdong Province" "2018 Shenzhen Quality and Integrity

Demonstration Unit" and "Outstanding Enterprise Performing Social Responsibilities" "Shenzhen Top 100 Industry Leaders"

"2019 Shenzhen Top 500 Enterprises" "The 3rd Shenzhen Top 100 Quality Enterprises" "Shenzhen Quality Quality City Key

Enterprises" "2019 Shenzhen Private Leaders Key Enterprise" Won the "Innovative China ? Top 100 Listed Companies" award

"2019 Guangdong-Hong Kong-Macao Greater Bay Area listed company social responsibility" five-star enterprises "market

responsibility" five-star enterprises two awards. For the fourth consecutive year he was listed on the "Top 500 Guangdong

Enterprises" list and ranked 12th in the "A-share Listed Companies Growth List in the Past Five Years" and "2018 China Listed

Company Innovation Index 500". Chairman Xiong Jianming was named "2019 Annual Person of the Listed Companies in the

Guangdong-Hong Kong-Macao Greater Bay Area".

Fangda Jianke Co. a wholly-owned subsidiary was awarded ―2019 Shenzhen University Building Doors and Windows Curtain

Wall Industry Academic Exchange Advanced Unit‖. General Manager Wei Yuexing won the ―Innovative Talents‖ award in Shenzhen

Decoration Industry and Zhang Jianhui Regional Manager won the ―Top Ten Outstanding Project Managers‖ award. Senior designer

Hu Guangzhou won the "Top Ten Young Designers" award and the curtain wall maker Xu Xiuhui won the "Top Ten Star Craftsmen"

award. The three curtain wall projects of the Chinese University of Hong Kong (Shenzhen) Teaching Building Guangzhou Baosteel

Building and Chengdu Territory's Global Financial Center undertaken by the Company won the 2018-2019 China Construction

Engineering Luban Award (National Quality Project). The four curtain wall projects including Fangda Town (Phase I) Shenye

Shangcheng (Southern District) Tower 2 China Energy Storage Building and China Southern Power Grid Production and Research

Comprehensive Base undertaken by the Company won the ―China Construction Engineering Decoration Award‖. Shenzhen Hanjing

Finance curtain wall project was awarded ―My Favorite Curtain Wall Project‖.

Fangda Zhichuang Technology a wholly-owned subsidiary was awarded "Shenzhen Metro 2018 Excellent Equipment

Supplier" "Shenzhen Metro Phase III Excellent Equipment Supplier" and "Shenzhen Metro Line 7 9 and 11 Performance

Evaluation Excellent Unit" "2018 Xi'an Metro Construction Labor Competition Advanced Unit" employees Ouyang Kehua Zhu

Zhenfei Kong Debing were awarded "Shenzhen Baiyou Craftsman" and Tang Long was awarded "2018 Xi'an Subway Construction

Labor Competition Advanced Individual".

Fangda Jiangxi New Material received titles including 2018 Nanchang High-Tech Industry Park Leading Enterprise Leading

Company in Standardization and the title of "Excellent Brand" of aluminum veneer in China's metal composite industry.

After 2018 the wholly-owned subsidiary Fangda Real Estate Co. Ltd. was once again awarded the "Shenzhen Real Estate

Development Industry Brand Value Enterprise" award by the Shenzhen Real Estate Association.

2. Main business analysis

1. Summary

For details see Management Discussion and Analysis – 1. Profile

2. Income and costs

(1) Turnover composition

In RMB

2019 2018 年

YOY change (%)

Amount

Proportion in

operating costs (%)

Amount

Proportion in

operating costs (%)

Total turnover 3005749558.66 100% 3048680152.06 100% -1.41%

Industry

Metal production 2196425708.75 73.07% 2010704004.96 65.95% 9.24%

Railroad industry 460906724.26 15.33% 297686976.09 9.76% 54.83%

New energy industry 20103218.63 0.67% 19625478.18 0.64% 2.43%

Real estate 307563025.40 10.23% 697518090.10 22.88% -55.91%

Others 20750881.62 0.69% 23145602.73 0.76% -10.35%

Product

Curtain wall system

and materials

2196425708.75 73.07% 2010704004.96 65.95% 9.24%

Subway screen door

and service

460906724.26 15.33% 297686976.09 9.76% 54.83%

PV power generation

products

20103218.63 0.67% 19625478.18 0.64% 2.43%

Real estate sales 307563025.40 10.23% 697518090.10 22.88% -55.91%

Others 20750881.62 0.69% 23145602.73 0.76% -10.35%

District

In China 2824371016.83 93.97% 2969200798.04 97.39% -4.88%

Out of China 181378541.83 6.03% 79479354.02 2.61% 128.21%

(2) Industries products or districts that take more than 10% of the Company’s business turnover or profit

In RMB

Turnover Operation cost Gross margin

Year-on-year

change in

operating revenue

Year-on-year

change in

operating costs

Year-on-year

change in gross

margin

Industry

Metal production 2196425708.75 1863604889.99 15.15% 9.24% 8.29% 0.74%

Real estate 307563025.40 -46495278.64 115.12% -55.91% -111.94% 70.96%

Railroad industry 460906724.26 343840705.71 25.40% 54.83% 56.44% -0.77%

Product

Curtain wall

system and

materials

2196425708.75 1863604889.99 15.15% 9.24% 8.29% 0.74%

Real estate sales 307563025.40 -46495278.64 115.12% -55.91% -111.94% 70.96%

Metro screen

door

460906724.26 343840705.71 25.40% 54.83% 56.44% -0.77%

District

In China 2824371016.83 2035986340.56 27.91% -4.88% -10.15% 4.22%

Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period

□ Applicable √ Inapplicable

Different business types of the Company

In RMB

Business type Turnover Operation cost Gross margin

Curtain wall system and

materials

2196425708.75 1863604889.99 15.15%

Whether the Company runs business through the Internet

□ Yes √ No

Whether the Company runs overseas projects

□ Yes √ No

(3) The physical sales revenue is high the labor service revenue

□ Yes √ No

(4) Performance of signed major sales contracts in the report period

√ Applicable □ Inapplicable

The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure

Guideline No.6 – Listed Companies Engaged in Decoration Business.In RMB

Project amount

Cumulative recognized output

value

Amount of unfinished part

Unfinished project 4750451208.87 2153095289.73 2597355919.14

Major unfinished project

√ Applicable □ Inapplicable

In RMB

Project Project amount

Construction

period

Completion

percentage

Income

recognized in

this period

Cumulative

recognized

income

Payment

collection

Balance of

accounts

receivable

Tencent Digital

Building

curtain wall

project

314399189.26

2018.9.4-2019.

11.20 (The

construction

period agreed

in the

construction

contract is

different from

the actual

construction

situation. The

customer has

made

corresponding

adjustments to

the

construction

period

according to

the actual

situation. The

current project

is progressing

smoothly).

16.37% 51468571.91 51468571.91 72735871.71 0.00

Other note

□ Applicable √ Inapplicable

In RMB

Accumulative

occurred costs

Accumulative

recognized gross

margin

Estimated loss Settled amount

Balance of unpaid

amount of finished

project

Finished but not

settled project

7392748379.74 1043964750.79 1430361.92 8340112030.03 95170738.58

Any major outstanding unsettled projects during the reporting perio.

□ Applicable √ Inapplicable

Other note

□ Applicable √ Inapplicable

(5) Operation cost composition

In RMB

Industry Item

2019 2018 年

YOY change (%)

Amount

Proportion in

operating costs

(%)

Amount

Proportion in

operating costs

(%)

Metal production Raw materials 1233265964.58 66.18% 1236717752.50 71.86% -5.68%

Metal production

Installation and

engineering costs

422121605.36 22.65% 357806657.79 20.79% 1.86%

Metal production Labor cost 106412147.98 5.71% 80488503.77 4.68% 1.03%

Real estate

Construction and

installation cost

37414096.74 -80.47% 100803413.00 25.88% -106.35%

Real estate Land cost -164158729.89 353.07% 222947137.10 57.24% 295.83%

Real estate Loan interest 3308860.53 -7.12% 8022581.23 2.06% -9.18%

Real estate Labor cost 14043313.15 -30.20% 10943065.48 2.81% -33.01%

Notes

The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure

Guideline No.6 – Listed Companies Engaged in Decoration Business.Main business cost

In RMB

Cost composition Business type

2019 2018

YOY change (%)

Amount

Proportion in

operating costs

(%)

Amount

Proportion in

operating costs

(%)

Raw materials

Curtain wall

system and

materials

1233265964.58 66.18% 1236717752.50 71.86% -5.68%

Installation and

engineering costs

Curtain wall

system and

materials

422121605.36 22.65% 357806657.79 20.79% 1.86%

Labor cost

Curtain wall

system and

materials

106412147.98 5.71% 80488503.77 4.68% 1.03%

(6) Change to the consolidation scope in the report period

√ Yes □ No

(1) In the current period three newly-controlled subsidiaries were established namely Jianke Southeast Asia Company Chengdu

Curtain Wall Company and Shanghai Fangda Jianzhi Company. Enterprises under non-common control merged with Zhongrong Litai

Company.

(2) In the current period Xiangdong New Energy Company and Ke Xunda Company were cancelled and the consolidated statements

in this period decreased by 2 subsidiaries.

(7) Major changes or adjustment of business products or services in the report period

□ Applicable √ Inapplicable

(8) Major sales customers and suppliers

Main customers

Total sales amount to top 5 customers (RMB) 677036356.44

Proportion of sales to top 5 customers in the annual sales 22.52%

Percentage of sales of related parties in top 5 customers in

the annual sales

0.00%

Information of the Company's top 5 customers

No. Customer Sales (RMB) Percentage in the annual sales

1 No.1 245814211.52 8.18%

2 No.2 143262059.21 4.77%

3 No.3 114965326.77 3.82%

4 No.4 89207608.27 2.97%

5 No.5 83787150.67 2.79%

Total -- 677036356.44 22.52%

Other information about major customers

□ Applicable √ Inapplicable

Main suppliers

Purchase amount of top 5 suppliers (RMB) 431771044.42

Proportion of purchase amount of top 5 suppliers in the

total annual purchase amount

18.90%

Percentage of purchasing amount of related parties in top

5 customers in the annual purchasing amount

0.00%

Information of the Company’s top 5 suppliers

No. Supplier Purchase amount (RMB) Percentage in the annual purchase amount

1 No.1 107048701.42 4.68%

2 No.2 88245075.43 3.86%

3 No.3 84267798.83 3.69%

4 No.4 83826673.08 3.67%

5 No.5 68382795.66 2.99%

Total -- 431771044.42 18.90%

Other information about major suppliers

□ Applicable √ Inapplicable

3. Expenses

In RMB

2019 2018 YOY change (%) Notes

Sales expense 57584186.20 49833945.89 15.55%

Administrative expense 170443795.50 140002624.79 21.74%

Financial expenses 82608834.38 82328388.89 0.34%

R&D cost 59754971.20 19854244.58 200.97%

Mainly due to the increase in R & D

personnel and investment in R & D this

year

4. R&D investment

√ Applicable □ Inapplicable

The Company adheres to the business philosophy of "technology-based innovation" and the scientific and technological

innovation development path. Its independent innovation capabilities and technology level has always been at the forefront of

domestic similar enterprises. The Company is committed to the research and development of independent intellectual property

products and enhances its core competitiveness. In 2019 the Company independently developed 25 new products including "BIM

digital process design feeding system" "assembled roof curtain wall system" "graphene powder sprayed aluminum veneer research

and development" "platform door unmanned control system research and development". Intelligent production processes such as

intelligent welding and intelligent glue application have begun to be used in production to promote product quality improvement

reduce labor intensity reduce labor costs improve work efficiency and increase economic benefits.

As of the end of December 2019 the Company has obtained 826 patents including 112 invention patents 10 international PCT

patents and 12 software copyrights. 44 patents applied for in 2019 26 newly authorized patents (including 1 invention patent) The

wholly-owned subsidiary Fangda Jianke's invention patent "a building curtain wall structure" won the "Shenzhen Patent Award".

R&D investment

2019 2018 Change

R&D staff number 503 404 24.50%

R&D staff percentage 18.91% 18.31% 0.60%

R&D investment amount

(RMB)

136943143.23 138333164.52 -1.00%

Investment percentage in

operation turnover

4.56% 4.54% 0.02%

Capitalization of R&D

investment amount (RMB)

0.00 0.00

Percentage of capitalization of

R&D investment in the R&D

investment

0.00% 0.00%

Reason for the increase in the percentage of R&D investment in the business turnover

□ Applicable √ Inapplicable

Explanation of the increase in the capitalization of R&D investment

□ Applicable √ Inapplicable

5. Cash flow

In RMB

Item 2019 2018 YOY change (%)

Sub-total of cash inflow from

business operations

2745391880.62 2974390387.48 -7.70%

Sub-total of cash outflow from

business operations

2750676711.39 2587287667.91 6.32%

Cash flow generated by

business operations net

-5284830.77 387102719.57 -101.37%

Sub-total of cash inflow

generated from investment

7065603083.05 7678717862.02 -7.98%

Subtotal of cash outflows 7520260799.17 7471021595.30 0.66%

Cash flow generated by

investment activities net

-454657716.12 207696266.72 -318.91%

Subtotal of cash inflow from

financing activities

1094836280.53 708000000.00 54.64%

Subtotal of cash outflow from

financing activities

866537570.34 1279597053.40 -32.28%

Net cash flow generated by

financing activities

228298710.19 -571597053.40 139.94%

Net increase in cash and cash

equivalents

-230920987.78 24905355.13 -1027.19%

Explanation of major changes in related data from the same period last year

√ Applicable □ Inapplicable

Explanation of major difference between the cash flow generated by operating activities and the net profit in the year

√ Applicable □ Inapplicable

3. Non-core business analysis

√ Applicable □ Inapplicable

In RMB

Amount Profit percentage Reason Whether continuous

Investment income -1909644.55 -0.46%

Mainly due to investment

losses in associates

No

Gain/loss caused by

changes in fair

value

42618039.60 10.22%

Due to adjustment of fair

value of investment real

estate

No

Assets impairment -34299815.12 -8.22%

Mainly bad debt provision

corresponding to accounts

receivable

Yes

Non-operating

revenue

2857177.74 0.69% No

Non-business

expenses

3965865.48 0.95% No

4. Assets and liabilities

1. Major changes in assets composition

1. The first implementation of the new financial instruments guidelines new income standards new lease standards adjustments the

first implementation of the financial statements at the beginning of the year

√ Applicable □ Inapplicable

In RMB

End of 2019 Beginning of 2019

Change

(% )

Notes

Amount

Proportion in

total assets

Amount

Proportion in

total assets

Monetary capital

1209811978.

95

10.64%

1389062083.

76

13.09% -2.45%

Account

receivable

1956191307.

07

17.20%

1866763789.

49

17.59% -0.39%

Inventory

733711143.4

6

6.45% 651405832.29 6.14% 0.31%

Investment real

estate

5522391984.

11

48.57%

5256442406.

63

49.52% -0.95%

Long-term share

equity investment

57222240.83 0.50% 70105657.88 0.66% -0.16%

Fixed assets

477332830.9

2

4.20% 455274241.83 4.29% -0.09%

Construction in

process

129988982.8

6

1.14% 58269452.72 0.55% 0.59%

Short-term loans

724618197.3

4

6.37% 208000000.00 1.96% 4.41%

Long-term loans

546501491.5

6

4.81%

1193978153.

39

11.25% -6.44%

2. Assets and liabilities measured at fair value

√ Applicable □ Inapplicable

In RMB

Item

Opening

amount

Gain/loss

caused by

changes in

fair value

Accumulative

changes in

fair value

accounting

into the

income

account

Impairment

provided in

the period

Amount

purchased in

the period

Amount sold

in the period

Other

change

Closing

amount

Financial

assets

1.

Transactional

financial

assets

(excluding

derivative

financial

assets)

10330062.

18

4. Investment

in other

equity tools

21674008.23 -4793104.31

-14751669.7

6

3779277.5

2

20660181.

44

Subtotal 21674008.23 -4793104.31

-14751669.7

6

3779277.5

2

30990243.

62

Investment

real estate

5230896067

.50

42608311.58 11675404.61

32611981.

04

53061163

60.12

Other

non-current

financial

assets

9728.02 5000000.00

5009728.0

2

Total

5252570075

.73

37824935.2

9

-3076265.15 5000000.00

36391258.

56

53421163

31.76

Financial

liabilities

1625725.00 96767.62

Other change

(1) Other changes in investment in other equity instruments are due to the reclassification of the investment in Shenzhen Huihai

Yirong Internet Financial Services Co. Ltd. because Shenzhen Huihai Yirong Internet Financial Services Co. Ltd. did not send any

of the Company’s On behalf of the Company no longer has a significant impact on it so it is reclassified from long-term equity

investment to other equity instrument investment.

(2) Other changes in investment real estate are due to the increase in investment in investment real estate decoration in the current

period which resulted in an increase in the value of real estate of RMB 48231706.04 and a change in the use of some real estate

caused a decrease of RMB 15619725.00.Major changes in the assets measurement property of the Company in the report period

□ Yes √ No

3. Right restriction of assets at the end of the period

Item

Book value on December 31 2019

(RMB)

Reason

Monetary capital 458472225.51 Margin pledged deposits etc.Inventory 99936207.50 Loan by pledge

Fixed assets 65256230.83 Loan by pledge

Intangible assets 20550703.78 Loan by pledge

100% stake in Fangda Property

Development held by the Company

200000000.00 Loan by pledge

Investment real estate 394971924.50 Credit Mortgage Mortgage Loan

Other current assets 207993374.07 Use structured deposit pledge to issue acceptance

bills

Total 1447180666.19

5. Investment

1. General situation

□ Applicable √ Inapplicable

2. Major equity investment in the report period

√ Applicable □ Inapplicable

In RMB

Investe

d

compan

y

Main

busines

s

Method

of

investm

ent

Investm

ent

amount

Shareh

olding

percent

age

Capital

source

Partner

Term of

investm

ent

Type of

product

Progres

s as of

the

balance

sheet

date

Estimat

e return

Current

investm

ent

profit

and

loss

Whethe

r

litigatio

n is

involve

d

Date of

disclos

ure

Index

for

informa

tion

disclos

ure

Shenzh

en

Zhongr

ong

Litai

Invest

ment

Co.

Ltd.Real

estate

develop

ment

Acquisi

tion

112613

316.68

100.00

%

Self-ow

ned

fund

Shenzh

en

Yikang

Real

Estate

Co.

Ltd.Shenzh

en

Qianhai

Zhongz

heng

Dingfe

ng No.

6

Investm

ent

Enterpr

ise

(Limite

d

Partner

ship)

Zhongr

ong

Litai's

actual

operati

ng

period

Real

estate

develop

ment

55%

equity

has

been

transfer

red and

control

has

been

transfer

red to

the

Compa

ny

0.00

-1233

929.20

No None None

Total -- --

112613

316.68

-- -- -- -- -- -- 0.00

-1233

929.20

-- -- --

3. Major non-equity investment in the report period

□ Applicable √ Inapplicable

4. Financial assets investment

(1) Securities investment

□ Applicable √ Inapplicable

The Company made no investment in securities in the report period

(2) Derivative investment

√ Applicable □ Inapplicable

In RMB10000

Derivati

ve

investm

ent

operator

Relation

ship

Related

transacti

on

Type

Initial

amount

Start

date

End date

Initial

investm

ent

amount

Amount

in this

period

Amount

sold in

this

period

Impairm

ent

provisio

n (if

any)

Closing

investm

ent

amount

Proporti

on of

closing

investm

ent

amount

in the

closing

net

assets in

the

report

period

Actua

l

gain/l

oss in

the

report

period

Shangha

i Futures

Exchang

e

No No

Shanghai

aluminu

m

2535.76

July 13

2018

Decemb

er 31

2019

2535.76

13096.9

2

15632.6

7

0.00%

122.6

4

Banks No No

Forward

foreign

exchange

January

1 2019

Decemb

er 31

2019

0.00 3710.78 1544.78 0.00 2166.00 0.41% 12.30

Total 2535.76 -- -- 2535.76 16807.7

17177.4

5

2166 0.41%

134.9

4

Capital source Self-owned fund

Lawsuit involved None

Disclosure date of derivative

investment approval by the Board of

Directors

October 31 2017 November 30 2019

Disclosure date of derivative

investment approval by the

shareholders’ meeting

None

Risk analysis and control measures

for the derivative holding in the report

period (including without limitation

market liquidity credit operation and

legal risks)

The Company's aluminum futures hedging and foreign exchange derivatives trading

business are all derivatives investment business. The Company has established and

implemented the "Derivatives Investment Business Management Measures" and

"Commodity Futures Hedging Business Internal Control and Risk Management System". It

has made clear regulations on the approval authority business management risk

management information disclosure and file management of derivatives trading business

which can effectively control the risk of the Company's derivatives holding positions.

Changes in the market price or fair

value of the derivative in the report

period the analysis of the derivative’s

fair value should disclose the method

used and related assumptions and

parameters.

Fair value of derivatives are measured at open prices in the open market

Material changes in the accounting

policies and rules related to the

derivative in the report period

compared to last period

None

Opinions of independent directors on

the Company’s derivative investment

and risk controlling

None

5. Use of raised capital

□ Applicable √ Inapplicable

The Company used no raised capital in the report period.VI. Major assets and equity sales

1. Major assets sales

□ Applicable √ Inapplicable

The Company sold no assets in the report period.

2. Major equity sales

□ Applicable √ Inapplicable

VII. Analysis of major joint stock companies

√ Applicable □ Inapplicable

Major subsidiaries and joint stock companies affecting more than 10% of the Company’s net profit

In RMB

Company Type

Main

business

Registered

capital

Total assets Net assets Turnover

Operation

profit

Net profit

Fangda

Zhichuang

Subsidiaries

Subway

screen door

and service

105000000.

00

615717880.

16

208787865.

38

460906724.

26

67699117.6

4

63341378.1

9

Fangda

Property

Subsidiaries Real estate

200000000.

00

633749502

3.98

237871743

7.52

264910501.

74

244560118.

22

195404665.

06

Fangda

Jianke

Subsidiaries

Curtain wall

system and

materials

500000000.

00

318264599

7.08

102844432

8.66

194990009

2.66

140525107.

65

128142594.

02

Acquisition and disposal of subsidiaries in the report period

√ Applicable □ Inapplicable

Company

Acquisition and disposal of subsidiaries in

the report period

Impacts on overall production operation

and performance

Fangda Southeast Asia Co. Ltd. Newly set None

Shanghai Fangda Jianzhi Technology Co.Ltd.Newly set None

Chengda Fangda Curtain Wall Technology

Co. Ltd.

Newly set None

Shenzhen Zhongrong Litai Investment Co.Ltd.

Consolidation of entities not under

common control

None

Shenzhen Kexunda Software Co. Ltd. Liquidation None

Pingxiang Xiangdong Fangda New

Energy Co. Ltd.

Liquidation None

Major joint-stock companies

VIII. Structural entities controlled by the Company

□ Applicable √ Inapplicable

IX. Future Prospect

(1) Competition map and development trned

1. Curtain wall and material system industry

The construction curtain wall industry has a high degree of marketization and the competitive advantages of leading companies

in the industry continue to emerge accelerating the survival of the fittest and increasing industry concentration. In the high-end

market most of the national iconic and regional key curtain wall projects are mostly contracted by the top 50 curtain wall companies

in China and the competition in the curtain wall industry is gradually becoming fierce. In recent years China's supply-side structural

reforms continued to deepen and the national regional coordinated development strategy was further promoted. New urbanization

coordinated development of Beijing-Tianjin-Hebei ―Belt and Road‖ construction and Guangdong Hong Kong Macao and Dawan

District development projects provided valuable opportunities for the development of the curtain wall systems and materials

business.

2. Rail transport screen door business

As China's urbanization advances and population accelerates to central cities China's urban rail transit has shown explosive

growth in recent years. After the first operation of urban rail transit exceeded 500 kilometers in 2016 it exceeded 900 kilometers in

2019. According to statistics from the China Urban Rail Transit Association as of December 31 2019 a total of 40 cities in mainland

China have opened 6730.27 kilometers of urban rail transit operating lines. In 2019 there will be a total of 5 new urban rail transit

operating cities in mainland China and another 27 cities will have new lines (segments) put into operation. The length of the new

operating lines will total 968.77 kilometers a record high. In September 2019 the "Outline for the Construction of a Powerful

Transportation Country" issued by the Central Committee of the Communist Party of China and the State Council proposed that by

2035 a transportation powerhouse will be basically completed and a "national 123 travel transportation circle" will be basically

formed (one hour commuting in urban areas two hours in urban areas 3 hours coverage in major cities nationwide). With the

implementation of major national strategies such as the Guangdong Hong Kong and Macao Bay District and the ―Belt and Road‖

Initiative the region has radiated into Southeast Asia South Asia Central Asia and West Asia and has extended to Eastern Europe

and North Africa with strong demand for infrastructure construction and interconnection. The rail transit screen door industry will

enter a new period of vigorous development.

3. New energy industry

The prospects for new energy development in 2020 are promising and technology policy and model innovation will continue to

advance. The 2020 photovoltaic policy will continue the tone of 2019 and develop toward "accelerating parity and strengthening

consumption". As the cost of photovoltaics decreases photovoltaics will continue to increase To achieve diversified applications in

multiple fields "photovoltaic + energy storage" and green building BIPV are expected to become the future development trend.

4. Real estate

In 2020 China will still be in an important period of strategic opportunities and a period of conversion of old and new kinetic

energy. Urbanization is still the fundamental driving force for real estate development. Under continuous control industry

fluctuations are market behavior and the Company continues to be optimistic about the future development of the real estate industry.In the future the Company will continue to expand the brand effect deepen product types and fully meet market demand. The

Company will further enrich project resources deepen the local market increase market share and effectively improve the

Company's operating performance.

(2) Company development strategy and business plan

2020 is an important year for the Company to start again. The energy-saving curtain wall and materials industry should continue

to exert its brand advantages deeply cultivate the "home door" markets in the Guangdong-Hong Kong-Macao Greater Bay Area the

Yangtze River Delta and Chengdu-Chongqing regions actively expand overseas markets and focus on key points Project and key

account management. The Company will strengthen the contract-centric management system and improve profitability with refined

cost management. The Company will continue to increase innovation apply the BIM system to optimize the design workflow and

improve design efficiency develop and apply a production management system (MES system) and further promote the construction

of curtain wall products and PVDF aluminum veneer intelligent factories. The Company will continue to strive to increase domestic

market share of screen door products further expand overseas markets and insist on making overseas business bigger and stronger.The Company will actively promote the construction of "smart factories" and the information construction of management increase

investment in technology research and development and achieve breakthroughs and leadership in key technologies. The Company

will vigorously strengthen the promotion of technical maintenance business and use 5G big data AI and other technical means to

completely change the current human maintenance tactics of maintenance business. Shenzhen Fangda City and Nanchang Fangda

Center sales and leasing are the top priorities in 2020. It is necessary to make every effort to realize the sale and lease of office

buildings in Fangda City and Nanchang Fangda Center sales. The Company will continue to do a good job in investment and

operation of Fangdacheng business build a regional commercial benchmark and continuously improve Fangdacheng business

revenue.

(3) Capital demand and source for projects in progress

To realize the business target in 2020 the Company will develop suitable financial and capital plans accelerate the collection of

accounts receivable sales payment from sales of Fangda Town expand financing channels and use share issuance bank loans and

other financing products to meet the demand for capital.

(4) Risks and solutions

1. Market risks and measures

As the overall designing and engineering quality continues improving in the domestic construction curtain wall industry curtain

wall products will become increasingly standard intensifying the market competition. In addition the market concentration of first-

and second-tier cities will increase and regional competition will become more intense. The Company will continue to adopt a

prudent management policy refined management and technological innovations to reduce management costs and accelerate the

return of funds. Through new technologies and processes we will improve product quality lower costs and elevate earnings. While

consolidating the domestic market the Company will step up the efforts in exploring overseas markets thus elevating our

competitiveness in global markets and improving our resistance to risks.

2. Management risks and measures

In recent years with the Company's curtain wall and material system industry rail transit screen door industry orders increasing

year by year and the Company's real estate property sector increased the Company's assets business personnel and other aspects

have expanded significantly the organizational structure and management system will tend to Due to the complexity the Company

may face the management risk of industrial scale expansion. The Company will continue to improve the management mode integrate

business management optimize the business flow seeking to build a high-efficient and solid management team. We will introduce

high-quality professional technical and management talents in different fields to strengthen the Company's core competitiveness.

3. Production and operation risks and measures

The macro-economy and market demand have added to the fluctuation in prices of main raw materials such as aluminum and

steel and labor affecting the Company’s profitability and creating additional production and operation risks for the Company. The

Company has sought to lower the purchase and production costs increase technical R&D reduce consumption of raw materials

introduce automatic and intelligent production equipment strengthen staff training to improve working efficiency.

4. Real estate industry risks and countermeasures

The real estate industry is obviously affected by the country 's macro-control and the Company needs to review the situation

and further strengthen the forward-looking research on the economic situation policies and industry situation and the capital market

enhance predictive power improve the control and resilience of risk factors and timely adjust business strategies to adapt to the new

economic normal and new changes in the real estate industry. At the same time the Company will increase its efforts to eliminate the

cash and ensure that the Company continues to maintain stable operation and healthy development by withdrawing cash.

X. Acceptance of surveys negotiation and visits

1. Reception of investigations communications or interviews in the reporting period

√ Applicable □ Inapplicable

Time/date Way Visitor Disclosure of information

August 28 2019 Onsite investigation Institution

Investor Relationship Record Form on

http://www.cninfo.com.cn

December 19 2019 Others Institution

Investor Relationship Record Form on

http://www.cninfo.com.cn

January 01 2019 to

December 31 2019

Written inquiry Individual

Investor Q&A conducted on the

interactive and e-platform of the

Shenzhen Stock Exchange website

(http://irm.cninfo.com.cn/)

TIme 46

Number of institutes 12

Number of individuals 44

Number of other visitors 0

Disclosure of any non-public information No

Chapter 5 Significant Events

I. Profit distribution and reserve capitalization plan

Establishment implementation or adjustment of profit distribution policies especially the cash dividend policy during the report

period

√ Applicable □ Inapplicable

During the report period the Company implemented the profit distribution plan for 2018. As reviewed and approved by the

2018 Annual General Meeting of Shareholders held on February 19 2019 the Company's 2018 profit distribution plan is: The

Company takes the total share capital of 1123384189 shares after canceling the B shares that have been repurchased on January 11

2019. For every 10 shares a cash dividend of RMB 2.00 (including tax) will be distributed to all shareholders. No bonus shares will

be sent this year and no capital reserve will be transferred to increase capital. The plan has been implemented on March 13 2019 (for

details please refer to the announcement of the implementation of the 2018 equity distribution 2019-21).

Explanation of Cash Dividend Distribution Policies

Comply with the Articles of Association or resolution made at

the General Shareholders' Meeting

Yes

Clear and definite distribution standard and proportion Yes

Decision-making procedure and mechanism Yes

Independent directors fulfill their duties Yes

Middle and small shareholders express their opinions and claims.There rights are well protected.Yes

Cash dividend distribution policies are adjusted or revised

according to law

Inapplicable

Profit distribution and reserve capitalizing pre-plans or plans over the recent three years (including the reporting period)

2017: Based on the total share capital of 1183642254 shares on December 31 2017 the Company distributed a cash dividend

of RMB1.50 (including tax) for every 10 shares to all shareholders for a total of RMB177546338.10. No dividend share or

capitalization share was issued in the year.

2018: Based on the total share capital of 1123384189 shares after the cancellation of the B shares repurchased on January 11

2019 the Company distributed a cash dividend of RMB2.00 (including tax) for every 10 shares to all shareholders and a total of

RMB224676837.8. No dividend share or capitalization share was issued in the year.

2019: according to the principle of unchanged distribution ratio based on the total share capital after the market close on the

equity registration day when the profit plan is implemented a cash dividend of RMB0.50 (including tax) is distributed to all

shareholders for every 10 shares. No bonus shares will be sent and no capital reserve will be converted into share capital.The Company is currently implementing the Company's plan to repurchase B shares in 2019. As of the date of this meeting of

the Board of Directors it has repurchased 2705700 shares of the Company through centralized bidding through a special account for

share repurchase securities. The cancellation of the share capital after the shares repurchased so far is 1120678489 shares as the

base for calculation. The total amount of cash dividends is 56033924.45 yuan (including tax) (the actual total amount of dividends is

based on the total share capital after the market closes on the day of equity registration when the profit distribution plan is

implemented. The total amount of dividends calculated by the base shall prevail).

After the Company's profit distribution plan is announced and implemented if the total share capital changes the total share

capital after the market close on the equity registration date when the profit distribution plan is implemented is used as the base and

the Company's profit distribution will be based on the principle of "fixed cash dividend ratio". The implementation announcement

discloses the total amount of dividends calculated based on the total share capital after the market close on the stock registration day

when the Company's profit distribution plan is implemented (total stock capital after the market close on the stock registration day =

the Company's total share capital at the end of 2019-the Company's repurchase of B shares in 2019 The number of shares

repurchased by the plan).

Distribution of cash dividend over the recent three years (including this period)

In RMB

Year Cash

dividend

(including

tax)

Net profit

attributable

to

shareholders

in the

consolidated

financial

statements

Cash

Dividend

proportion in

the net

project

attributable

to

shareholders

in the

consolidated

financial

statements

Cash dividend

paid in other

manners (such

as repurchase of

shares)

Proportio

n of cash

dividends

in other

ways in

the

consolida

ted

statement

of net

profit

attributab

le to

sharehold

ers of

common

stock of

listed

companie

s

Total cash

dividend

(including

other

manners)

The

proportion of

total cash

dividends

(including

other

methods) to

the net profit

attributable

to

shareholders

of common

shares of

listed

companies in

the

consolidated

statement

2019 56033924.4

5

347771182.

73

16.11% 81918508.26 23.56% 137952432.

71

39.67%

2018 224676837.

80

224616457

1.68

10.00% 111166053.48 4.95% 335842891.

28

14.95%

2017 177546338.

10

114440444

1.03

15.51% 0.00 0.00% 177546338.

10

15.51%

Note: according to the principle of unchanged distribution ratio based on the total share capital after the market close on the

equity registration day when the profit plan is implemented a cash dividend of RMB0.50 (including tax) is distributed to all

shareholders for every 10 shares. No bonus shares will be sent and no capital reserve will be converted into share capital. The amount

of cash dividends (including tax) in the above table for 2019 is RMB56033924.45 which is calculated based on the Company’s

total share capital of 1123384189 shares at the end of 2019 after the deduction of 2705700 shares as of the end of the current share

capital of 1120678489 shares. When the distribution plan is implemented the total share capital after the market closes on the stock

registration day is the total amount of dividends calculated based on the base.

Cash dividend proposed despite the Company records profits in the report period and a positive undistributed profit/

□ Applicable √ Inapplicable

II. Profit Distribution and Reserve Capitalization in the Report Period

√ Applicable □ Inapplicable

Bonus shares for every ten shares 0

Cash dividend for every ten shares (yuan

tax-included)

0.5

Shares capitalized for every 10 shares 0

A total number of shares as the distribution basis Not sure for now

Cash dividend (including tax) Not sure for now

Cash dividend paid in other manners (such as

repurchase of shares)

81918508.26

Proportion of cash dividend in the distributable

profit (including other manners)

100%

Cash dividend

The Company is in a fast growth stage. Therefore the cash dividend will reach 20% of the profit distribution at least.

Details of profit distribution or reserve capitalization plan

The 2019 profit distribution plan is:

according to the principle of unchanged distribution ratio based on the total share capital after the market close on the equity

registration day when the profit plan is implemented a cash dividend of RMB0.50 (including tax) is distributed to all shareholders

for every 10 shares. No bonus shares will be sent and no capital reserve will be converted into share capital.The Company is currently implementing the Company's plan to repurchase B shares in 2019. As of the date of this meeting of the

Board of Directors it has repurchased 2705700 shares of the Company through centralized bidding through a special account for

share repurchase securities. The cancellation of the share capital after the shares repurchased so far is 1120678489 shares as the

base for calculation. The total amount of cash dividends is 56033924.45 yuan (including tax) (the actual total amount of dividends

is based on the total share capital after the market closes on the day of equity registration when the profit distribution plan is

implemented. The total amount of dividends calculated by the base shall prevail).

After the Company's profit distribution plan is announced and implemented if the total share capital changes the total share

capital after the market close on the equity registration date when the profit distribution plan is implemented is used as the base

and the Company's profit distribution will be based on the principle of "fixed cash dividend ratio". The implementation

announcement discloses the total amount of dividends calculated based on the total share capital after the market close on the stock

registration day when the Company's profit distribution plan is implemented (total stock capital after the market close on the stock

registration day = the Company's total share capital at the end of 2019-the Company's repurchase of B shares in 2019 The number

of shares repurchased by the plan).III. Performance of promises

1. Commitments that have been fulfilled and not fulfilled by actual controller shareholders related parties

acquirers of the Company

□ Applicable √ Inapplicable

There is no commitment that has not been fulfilled by actual controller shareholders related parties acquirers of the Company

2. Explanation and reason of profit forecasts on assets or projects that remain in the report period

□ Applicable √ Inapplicable

IV. Non-operating capital use by the controlling shareholder or related parties in the

reporting term

□ Applicable √ Inapplicable

The controlling shareholder and its affiliates occupied no capital for non-operating purpose of the Company during the report period.V. Statement of the Board of Directors Supervisory Committee and Independent Directors (if

applicable) on the “non-standard auditors’ report” issued by the CPA on the current report

period

□ Applicable √ Inapplicable

VI. Statement of changes to accounting policies estimates and audit methods compared with

the financial report of the previous year

√ Applicable □ Inapplicable

(1) Changes in accounting policies

On April 30 2019 the Ministry of Finance issued the "Notice on Revising the Format of General Enterprise Financial

Statements for 2019" (Caihui [2019] No. 6) which requires that new financial instruments standards have been implemented but new

income standards and new Leasing companies should prepare financial statements as follows:

In the balance sheet the line items "Bills receivable and accounts receivable" were split into "Bills receivable" and "Accounts

receivable"; the item "Finance receivables" was added to reflect fairness on the balance sheet Bills receivable and accounts receivable

whose value is measured and whose changes are included in other comprehensive income; split the "bills payable and accounts

payable" line items into "bills payable" and "payables".In the income statement a detailed item of "financial asset derecognized gains (losses are listed with"-") measured at

amortized cost is added under the investment income item.On September 19 2019 the Ministry of Finance issued the "Notice on Revising and Issuing the Format of Consolidated

Financial Statements (2019 Version)" (Caihui [2019] No. 16) which will be implemented in conjunction with Caihui [2019] No. 6.

The Company prepared comparative statements in accordance with the financial statement format specified in Caihui [2019]

No. 6 and Caihui [2019] No. 16 and changed the presentation of relevant financial statements using the retroactive adjustment

method.The Ministry of Finance issued "Accounting Standards for Enterprises No. 22-Recognition and Measurement of Financial

Instruments" (Caihui [2017] No. 7) and "Accounting Standards for Enterprises No. 23-Transfer of Financial Assets" (Cai Accounting

[ 2017] No. 8) "Accounting Standards for Business Enterprises No. 24-Hedging Accounting" (Caihui [2017] No. 9) on May 2 2017

the "Accounting Standards for Business Enterprises No. 37-Presentation of Financial Instruments" ( Caihui [2017] No. 14) (the above

standards are hereinafter collectively referred to as "new financial instrument standards"). The domestic listed companies are required

to implement the new financial instruments standards from January 1 2019. The Company implemented the above new financial

instrument standards on January 1 2019 and adjusted the relevant content of the accounting policy. For details see Note III.9.If the confirmation and measurement of financial instruments before January 1 2019 are inconsistent with the requirements of

the new financial instrument standards the Company will retroactively adjust the classification and measurement (including

impairment) of financial instruments in accordance with the provisions of the new financial instrument standards. The difference

between the original book value of financial instruments and the new book value on the implementation date of the new financial

instruments standard (ie January 1 2019) is included in retained earnings or other comprehensive income on January 1 2019. At the

same time the Company has not adjusted the comparative financial statement data.On May 9 2019 the Ministry of Finance issued the "Accounting Standards for Business Enterprises No. 7-Exchange of

Non-Monetary Assets" (Caihui [2019] No. 8). According to the requirements the Company Non-monetary asset exchanges that occur

will be adjusted in accordance with this standard. Retrospective adjustments will not be made for non-monetary asset exchanges that

occurred before January 1 2019. The Company will implement this standard on June 10 2019.On May 16 2019 the Ministry of Finance issued the "Accounting Standards for Business Enterprises No. 12-Debt

Restructuring" (Caihui [2019] No. 9). According to the requirements the Company's debts that occurred between January 1 and the

execution date of 2019 The reorganization is adjusted according to this standard. The debt restructuring before January 1 2019 will

not be retrospectively adjusted. The Company will implement this standard from June 17 2019.

The cumulative impact of the above accounting policies is as follows:

Due to the implementation of the new financial instruments standards the Company's consolidated financial statements

adjusted the deferred income tax assets of RMB6594359.90 on January 1 2019 accordingly. The amount of related adjustments

affecting the parent company's equity in the consolidated financial statements of the Company is RMB-44571870.18 of which the

surplus reserve is 524860.03 the undistributed profit is RMB-39930304.63 and other comprehensive income is

RMB-5166425.58. Due to the implementation of the new financial instruments standards the Company's consolidated financial

statements adjusted the deferred income tax assets of RMB-27391.55 on January 1 2019 accordingly. The amount of related

adjustments affecting the owner ’s equity in the financial statements of the parent company of the Company was RMB82174.65 of

which the surplus reserve was RMB524860.03 undistributed profit was RMB4723740.20 and other comprehensive income was

RMB-5166425.58.

(2) Changes in major accounting estimates

During the reporting period the Company had no significant changes in accounting estimates.

VII. Statement of retrospective restatement of major accounting errors in the report period

□ Applicable √ Inapplicable

No retrospective restatement of major accounting errors in the report period

VIII. Statement of change in the financial statement consolidation scope compared with the

previous financial report

√ Applicable □ Inapplicable

(1) During the period Fangda Southeast Asia Company Limited was newly established and the merger of enterprises under the same

control increased Shenzhen Zhongrong Litai Investment Co. Ltd. adding 4 subsidiaries in the current consolidated statement.

(2) In the current period Xiangdong New Energy Company and Ke Xunda Company were cancelled and the consolidated statements

in this period decreased by 2 subsidiaries.IX. Engaging and dismissing of CPA

CPA engaged currently

Domestic public accountants name RSM Thornton (limited liability partnership)

Remuneration for the domestic public accountants (in

RMB10000)

150

Consecutive years of service by the domestic public accountants 1

Name of certified accountants of the domestic public accountants Chen Zhaoxin Zeng Hui

Consecutive years of service by the domestic public accountants

Chen Zhaoxin has provided the audit service for 3 years Zenghui

for 2 year

Overseas public accountants name (if any) None

Remuneration for the overseas public accountants (in

RMB10000)

0

Consecutive years of service by the overseas public accountants

(if any)

None

Name of certified accountants of the overseas public accountants

(if any)

None

Consecutive years of service by the domestic public accountants None

Whether the CPA is replaced

√ Yes □ No

Whether the CPA is replaced in the auditing period

□ Yes √ No

Whether the approval process is completed to replace the CPA

√ Yes □ No

Details of the CPA replacement and change

In view of the Company's 2018 financial statements and internal control audit team leaving Zhitong Certified Public

Accountants (special general partnership) has now joined Huapu Tianjian Certified Public Accountants (special general partnership)

(hereinafter referred to as "Huapu Tianjian") and Huapu Tianjian accounting firm (special general partnership) was officially

renamed as Rongcheng Certified Public Accountants (special general partnership) on June 10 2019. In order to maintain the

continuity of the audit work and based on the audit team's 2018 audit work and service awareness professional ethics and

performance ability the Company agreed to hire Rongcheng Certified Public Accountants (special general partnership) as the

Company's 2019 financial statements and internal The auditing agency is controlled with an audit fee of RMB 1.5 million and a

one-year employment period. The independent directors of the Company issued independent opinions that were approved in advance

and had passed the 17th meeting of the eighth directors and the first extraordinary general meeting of 2019 held on August 16 2019

and December 16 2019.

Engaging of internal control audit CPA financial advisor and sponsor

√ Applicable □ Inapplicable

This year the Company engaged RSM China (limited liability partnership) as the financial statement and internal control auditing

CPA with a fee of RMB1.5 million.

X. Trade suspension and termination after the disclose of the annual report

□ Applicable √ Inapplicable

XI. Bankruptcy and capital reorganizing

□ Applicable √ Inapplicable

The Company has no bankruptcy or reorganization events in the report period.XII. Significant lawsuit and arbitration

□ Applicable √ Inapplicable

The Company has no significant lawsuit or arbitration affair in the report period.

XIII. Punishment and rectification

□ Applicable √ Inapplicable

The Company received no penalty and made no correction in the report period.XIV. Credibility of the Company controlling shareholder and actual controller

√ Applicable □ Inapplicable

During the reporting period the Company its controlling shareholders and actual controllers did not fail to fulfill the court's

effective judgment and the large amount of debt due and unpaid.XV. Share incentive schemes staff shareholding program or other incentive plans

□ Applicable √ Inapplicable

There is no share incentive schemes staff shareholding program or other incentive plans in the report period

XVI. Material related transactions

1. Related transactions related to routine operation

□ Applicable √ Inapplicable

The Company made no related transaction related to daily operating in the report period.

2. Related transactions related to assets transactions

□ Applicable √ Inapplicable

The Company made no related transaction of assets or equity requisition and sales in the report period.

3. Related transactions related to joint external investment

□ Applicable √ Inapplicable

The Company made no related transaction of joint external investment in the report period.

4. Related credits and debts

□ Applicable √ Inapplicable

The Company had no related debt in the report period.

5. Other major related transactions

□ Applicable √ Inapplicable

The Company has no other significant related transaction in the report period.

XVII. Significant contracts and performance

1. Asset entrusting leasing contracting

(1) Asset entrusting

□ Applicable √ Inapplicable

The Company made no custody in the report period.

(2) Contracting

□ Applicable √ Inapplicable

The Company made no contract in the report period

(3) Leasing

√ Applicable □ Inapplicable

Leasing

The investment real estate is used as external leasing. The rental income in the report period is RMB74929720.58.Projects that create gains accounting for over 10% of the Company’s total profit in the report period

□ Applicable √ Inapplicable

The Company leased no projects that create gains accounting for over 10% of the Company’s total profit in the report period.

2. Significant guarantee

√ Applicable □ Inapplicable

(1) Guarantee

In RMB10000

External guarantees made by the Company and subsidiaries (exclude those made for subsidiaries)

None

Guarantee provided to subsidiaries

Guarantee provided to

Date of

disclosure

Guarantee

amount

Actual date

Actual

amount of

guarantee

Type of

guarantee

Term

Complete

d or not

Related

party

Fangda Jianke

April 24

2018

30000 August 28 2018 15153.05 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Fangda Jianke

January 30

2019

40000 April 17 2019 22872.02 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Fangda Jianke

January 30

2019

30000 August 01 2019 3917.83 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Fangda Jianke

Fangda Zhichuang and

the Company

January 30

2019

90000 March 26 2019 24130.61 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Fangda Jianke

January 30

2019

25000 August 20 2019 9991.92 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Fangda Jianke and

Fangda Zhichuang

January 30

2019

14000

December 18

2019

9153.71 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Fangda Jianke

January 30

2019

10000 June 21 2019 868.71 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Fangda Zhichuang

April 24

2018

21600 August 06 2018 25827.06 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Fangda Zhichuang

January 30

2019

20000 August 01 2019 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Fangda Zhichuang

January 30

2019

15000 May 27 2019 12189.27 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Fangda New Material

January 30

2019

8000 April 24 2019 1291.14 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Fangda New Material

January 30

2019

6500 June 27 2019 3025.13 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Fangda Property

March 23

2013

130000 February 3 2015 69397.82 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Fangda Property

January 30

2019

20000 June 19 2019 15000 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Qingling Technology

January 30

2019

8000 July 10 2019 3252.33 Joint liability

since engage

of contract to

2 years upon

due of debt

No Yes

Total of external guarantee

approved in the report term (A1)

468100

Total of external guarantee

actually occurred in the

report term (A2)

194087.55

Total of external guarantee

approved as of end of report term

(A3)

468100

Total of external guarantee

actually occurred as of end

of report term (A4)

216070.6

Guarantee provided to subsidiaries

Guarantee provided to

Date of

disclosure

Guarantee

amount

Actual date

Actual

amount of

guarantee

Type of

guarantee

Term

Complete

d or not

Related

party

Total of guarantee provided by the Company (total of the above three)

Total of guarantee approved in the

report term (A1+B1+C1)

468100

Total of guarantee occurred

in the report term

(A2+B2+C2)

194087.55

Total of guarantee approved as of

end of report term (A3+B3+C3)

468100

Total of guarantee occurred

as of the end of report term

(A4+B4+C4)

216070.6

Percentage of the total guarantee occurred (A4+B4+C4) on net

asset of the Company

41.69%

Including:

Note of immature guarantee with guarantee liabilities or possible

joint damage liabilities in the report period

None

Statement of external guarantees violating the procedure (if any) None

(2) Incompliant external guarantee

□ Applicable √ Inapplicable

The Company made no incompliant external guarantee in the report period.

3. Entrusted cash capital management

(1) Wealth management

√ Applicable □ Inapplicable

Wealth management during the reporting period

In RMB10000

Type Source of fund Amount Undue balance

Due balance to be

recovered

Bank financial products Self-owned fund 54828 1033.01 0

Total 54828 1033.01 0

Specific circumstances of high-risk entrusted financing with large individual amount or low security poor liquidity and no cost

protection

□ Applicable √ Inapplicable

Entrusted financial management expected to fail to recover the principal or likely result in impairment

□ Applicable √ Inapplicable

(2) Trusted loans

√ Applicable □ Inapplicable

Overview of entrusted loans during the reporting period

In RMB10000

Total entrusted loans

Source of funds for entrusted

loans

Undue balance Due balance to be recovered

2000 Self-owned fund 0 0

Specific circumstances of high-risk entrusted loan with large individual amount or low security poor liquidity and no cost protection

□ Applicable √ Inapplicable

Entrusted loans expected to fail to recover the principal or likely result in impairment

□ Applicable √ Inapplicable

4. Other significant contract

□ Applicable √ Inapplicable

The Company entered into no other significant contract in the report.

XVI Social responsibilities

1. Fulfillment of social responsibilities

The Company has disclosed the "2019 Social Responsibility Report" the details of which were published on the

http://www.cninfo.com.cn on April 18 2020.

2. Performance of poverty relieving responsibilities

(1) Annual poverty relieving summary

In 2019 the Company used funds for precision poverty alleviation projects of RMB2314000 as follows:

1. donated RMB20000 to two poverty-stricken villages in Luxi County Pingxiang City Jiangxi Province for the construction of

public facilities;

2. Donated RMB2000 to the Social Assistance Center of Luxiang Town Jinshan District Shanghai for charity assistance activities.

3. Donated RMB100000 to the Ganzhou Charity Federation of Jiangxi Province to fund the Ruijin City Charity Association to

purchase defibrillators at the Red Spot;

4. The Company donated RMB15000 to the poor students at Zhenglong village Shahe county Zhanggong district Ganzhou city

Jiangxi province.

5. The Company donated RMB102500 to the Jiangxi Kaixuan Foundation to help the poor students in Suichuan county Ji'an city

and Jiangxi province.

6. The Company donated RMB1500 to the CPC Shenzhen Property Management Industry Committee to purchase measure

equipment for the health center in the Liangshan Yi Autonomous Prefecture Sichuan province.

7. Donated RMB30000 to the youth activities of Dakang Community in Longgang Shenzhen and donated RMB33000 to elderly

caring activities.

8. Donated RMB500000 to Pingxiang City Charity Association of Jiangxi Province for the development of lily industry in Shanbei

Village Liushi Township Lianhua County and Tianyu Village Fanglou Town Lianhua County.

9. Donated RMB1.5 million to the Nanshan District Charity Association of Shenzhen City of which RMB500000 were used for

targeted poverty alleviation projects in Tianyang County Baise City Guangxi Province.

10. Donated RMB20000 to the Longgang District Charity Association of Shenzhen City for the installation of road lights in

Chenguang Town Xunwu County Jiangxi Province.

11. donated RMB20000 to two poverty-stricken villages in Luxi County Pingxiang City Jiangxi Province for the construction of

public facilities;

(2) Result of targeted poverty alleviation

Specifications Unit Qty/Description

1. General situation —— ——

Including: 1. Fund (in RMB10000) 231.4

II. Investment —— ——

1. Industry development poverty relief —— ——

Including: 1.1 Industry development

projects

—— Rural and forestry industry poverty allivetion

1.2 Number of industry

development projects

Item 1

1.3 Amount of industry

development fund

(in RMB10000) 50

2. Employment transfer —— ——

3. Relocation —— ——

4. Education —— ——

Including: 4.1 Sponsor to students from

poor families

(in RMB10000) 11.75

4.2 Number of students People 16

5. Health care support —— ——

Including: 5.1 Contribution to health care

sources in poor areas

(in RMB10000) 10.15

6. Eco-protection support —— ——

7. Last-line guarantee —— ——

8. Social poverty relieving —— ——

8.2 Targeted poverty alleviation

investment amount

(in RMB10000) 159.5

9. Others —— ——

III. Prizes —— ——

(3) Further property relief plans

In early 2020 the Company donated RMB3 million to the Jiangxi Provincial Red Cross Foundation Wuhan Red Cross Society

and other units for the prevention and control of the new coronary pneumonia epidemic and to support medical personnel who

stayed on the front line of the epidemic to purchase supplies and incentives for frontline medical staff. During the New Coronary

Pneumonia epidemic the Company reduced or exempted the rent for more than RMB2 million and donated 50000 masks to the

Xinjian District of Nanchang.The Company will continue to fulfill its social responsibility for precision poverty alleviation and make donations from time to

time based on business development.

3. Environmental protection

Whether the Company and its subsidiaries are key polluting companies disclosed by the environmental protection authority

No

The Company and its subsidiaries have earnestly implemented the Environmental Protection Law of the People's Republic of

China the Law of the People's Republic of China on Water Pollution Prevention and Control the Law of the People's Republic of

China on the Prevention and Control of Air Pollution and the Law of the People's Republic of China on the Prevention and Control

of Solid Waste Pollution. In the environmental protection laws and regulations there were no penalties for violations of laws and

regulations during the reporting period.

XIX. Other material events

√ Applicable □ Inapplicable

1. On January 11 2019 the Company's second repurchase of B shares of 32097497 shares in 2018 was completed. For details

please refer to the Company's publication on www.cninfo.com.cn on January 15 2019 "Announcement on Completion of

Cancellation of Share Repurchase".

2.The Company convened the 19th meeting of the eighth board of directors and the first extraordinary general meeting of

shareholders on November 28 2019 and December 16 2019 respectively. The plan for listing foreign shares (B shares) " and the

first repurchase was made on April 3 2020. The specific content has been published on the www.cninfo.com.cn. For details please

refer to the "Announcement on the Resolutions of the Nineteenth Meeting of the Eighth Board of Directors" on November 30 2019

and on December 17 2019 "Announcement on Resolutions of the First Extraordinary General Meeting of 2019" and "Announcement

on the First Share Repurchase" on April 7 2020.The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure

Guideline No.6 – Listed Companies Engaged in Decoration Business.Qualifications in the decoration industry:

No. Qualification Effectiveness

1 Construction curtain wall designing class A Until April 16 2020

2 Construction curtain wall contracting class A Until February 3 2021

3 Construction decoration contracting class B Until March 4 2021

4 Steel structure engineering contracting class B Until March 4 2021

5 Construction mechanical and electric equipment

installation contracting class C

Until March 4 2021

6 City and road lighting engineering contracting class C Until March 4 2021

The Company's "Special Grade A in Architectural Curtain Wall Engineering Design" qualification expires on April 16 2020.The Company has completed the extension on March 16 2020 upon application and the extension is valid until March 16 2025. In

addition other qualifications do not exist when the validity period of 2020 expires.In the report period the Company’s safety management is normal. The Company pays large attention to employees’ safety

awareness and capabilities of emergency processing. The Company has strengthened safety production and investigation of safety

risks. The Company has formulated safety management guidelines to guide safety management. There was no significant safety

accidents in the report period.XX. Material events of subsidiaries

□ Applicable √ Inapplicable

Chapter VI Changes in Share Capital and Shareholders

I. Changes in shares

1. Changes in shares

In share

Before the change Change (+-) After the change

Quantity

Proportio

n

Issued

new

shares

Bonus

shares

Transferre

d from

reserves

Others Subtotal Quantity

Proportio

n

I. Shares with trade

restriction conditions

1417243 0.12% 14325 14325 1431568 0.13%

3. Other domestic shares 1417243 0.12% 14325 14325 1431568 0.13%

Domestic natural

person shares

1417243 0.12% 14325 14325 1431568 0.13%

II. Shares without trading

limited conditions

1154064

443

99.88%

-321118

22

-321118

22

1121952

621

99.87%

1. Common shares in RMB

6782982

29

58.70% -14325 -14325

6782839

04

60.38%

2. Foreign shares in domestic

market

4757662

14

41.17%

-320974

97

-320974

97

4436687

17

39.49%

III. Total of capital shares

1155481

686

100.00%

-320974

97

-320974

97

1123384

189

100.00%

Reasons

√ Applicable □ Inapplicable

1. The Company completed the second repurchase of B shares in 2018 through centralized bidding from December 19 2018 to

January 3 2019. The cumulative number of repurchases was 32097497 shares and it was in China on January 11 2019. The

Shenzhen Branch of the Securities Registration and Clearing Co. Ltd. completed the share repurchase and cancellation procedures

and the total share capital was reduced from 1155481686 shares to 1123384189 shares.

2. Mr. Yin Changjian the former employee representative supervisor of the Company applied for resignation. On December 28

2018 Mr. Ye Zhiqing was elected as the employee representative supervisor of the eighth supervisory committee of the Company by

the employee meeting of the Company. He held 19100 A shares of the Company since 2019. As of January 2 14325 shares of the

executive lock-in shares were restricted so the Company's restricted shares increased by 14325 shares and non-restricted shares

decreased by 14325 shares.

Approval of the change

√ Applicable □ Inapplicable

1. For the Company's second repurchase of B shares in 2018 the tenth meeting of the eighth board of directors and the first

extraordinary general meeting of 2018 held on September 10 2018 and September 27 2018 Consideration by.

2. On December 28 2018 Mr. Ye Zhiqing was elected as the employee representative supervisor of the Company's eighth session of

the Supervisory Committee by the Company's employee meeting.Share transfer

√ Applicable □ Inapplicable

1. The 32097497 B shares repurchased by the Company for the second time in 2018 have completed the share repurchase

cancellation procedures at the China Securities Depository and Clearing Co. Ltd. Shenzhen Branch on January 11 2019.

2. On December 28 2018 Mr. Ye Zhiqing was elected as the employee representative supervisor of the Company's eighth board

of supervisors by the employee meeting of the Company. He held 19100 A shares of the Company. Since January 2 2019 14325

shares have been Lock up shares with limited sales conditions.Progress in the implementation of share repurchase

√ Applicable □ Inapplicable

The 32097497 B shares repurchased by the Company for the second time in 2018 have completed the share repurchase

cancellation procedures at the China Securities Depository and Clearing Co. Ltd. Shenzhen Branch on January 11 2019.Period Number of shares Fund used Highest price

(HKD / share)

Lowest price (HKD /

share)

Date of cancellation

From December 19

2018 to January 3 2019

32097497 113012632.21 3.58 3.24 2019-1-11

Progress in the implementation of the reduction of shareholding shares by means of centralized bidding

□ Applicable √ Inapplicable

Impacts on financial indicators including basic and diluted earnings per share net assets per share attributable to common

shareholders of the Company in the most recent year and period

□ Applicable √ Inapplicable

Others that need to be disclosed as required by the securities supervisor

□ Applicable √ Inapplicable

2. Changes in conditional shares

√ Applicable □ Inapplicable

In share

Shareholder name

Conditional

shares at

beginning of the

period

Increased this

period

Released this

period

Conditional

shares at end of

the period

Reason of

condition

Date of releasing

Ye Zhiqing 0 14325 0 14325

Newly elected

employee

representative

supervisor

25% of the

annual

shareholding is

released from the

sale

Total 0 14325 0 14325 -- --

II. Share placing and listing

1. Securities issuance (excluding preference shares) during the report period

□ Applicable √ Inapplicable

2. Statement of changes in share number and shareholder structure assets and liabilities structure

√ Applicable □ Inapplicable

1. The Company completed the second repurchase of B shares in 2018 through centralized bidding from December 19 2018 to

January 3 2019. The cumulative number of repurchases was 32097497 shares and it was in China on January 11 2019. The

Shenzhen Branch of the Securities Registration and Clearing Co. Ltd. completed the share repurchase and cancellation procedures

and the total share capital was reduced from 1155481686 shares to 1123384189 shares.

2. Mr. Yin Changjian the former employee representative supervisor of the Company applied for resignation. On December 28

2018 Mr. Ye Zhiqing was elected as the employee representative supervisor of the eighth supervisory committee of the Company by

the employee meeting of the Company. He held 19100 A shares of the Company since 2019. As of January 2 14325 shares of the

executive lock-in shares were restricted so the Company's restricted shares increased by 14325 shares and non-restricted shares

decreased by 14325 shares.

3. Current employees’ shares

□ Applicable √ Inapplicable

III. Shareholders and the substantial controller of the Company

1. Shareholders and shareholding

In share

Number of

shareholders

of common

shares at the

end of the

report period

67777 Total number

of ordinary

share

shareholders at

the end of the

month before

the disclosure

date of the

annual report

63114 Number of

shareholders of

preferred stocks

of which voting

rights recovered

in the report

period

0 Total number

of shareholders

of preference

shares of

which voting

rights resumed

at the end of

the month

before the

disclosure date

of the annual

report

0

Shareholders holding 5% of the Company's shares or top-10 shareholders

Shareholder

name

Nature of

shareholder

Shareh

olding

percent

age

Numbe

r of

shares

held at

the end

of the

reportin

g

period

Change

in the

reportin

g

period

Conditi

onal

shares

Amount of

shares

without sales

restriction

Pledging or freezing

Share

status

Quantity

Shenzhen

Banglin

Technologies

Development

Co. Ltd.

Domestic

non-state legal

person

10.22% 11484

2654

16405

00

0 114842654 Pledged 32860000

Shengjiu

Investment Ltd.

Foreign legal

person

9.23% 10369

4029

98183

91

0 103694029

Fang Wei Domestic

natural person

3.12% 35045

539

43408

6

0 35045539

Gong Qing

Cheng Shi Li He

Investment

Management

Partnership

Enterprise

(limited partner)

Domestic

non-state legal

person

2.38% 26791

488

0 0 26791488

VANGUARD

EMERGING

MARKETS

STOCK INDEX

FUND

Foreign legal

person

0.71% 79464

83

0 0 7946483

Shenwan

Hongyuan

Securities (Hong

Kong) Co. Ltd.

Foreign legal

person

0.68% 76312

96

-12247

851

0 7631296

SUN HUNG

KAI

INVESTMENT

SERVICES LTD

Foreign legal

person

0.62% 69164

95

-3252

507

0 6916495

VANGUARD

TOTAL

INTERNATION

AL STOCK

Foreign legal

person

0.52% 58720

07

-15395

1

0 5872007

INDEX FUND

Essence

International

Securities (Hong

Kong) Co. Ltd.

Foreign legal

person

0.42% 47277

07

-74229

3

0 4727707

Qu Chunlin Domestic

natural person

0.38% 43070

11

45695

0

0 4307011

A strategic investor or ordinary legal

person becomes the Top10

shareholder due a stock issue.None

Notes to top ten shareholder

relationship or "action in concert"

Among the shareholders Shenzhen Banglin Technology Development Co. Ltd. and

Shengjiu Investment Co. Ltd. are parties action-in-concert. Shenzhen Banglin

Technology Development Co. Ltd. and Gong Qing Cheng Shi Li He Investment

Management Partnership Enterprise are related parties. The Company is not notified of

other action-in-concert or related parties among the other holders of current shares.Top 10 holders of unconditional shares

Shareholder name Amount of shares without sales restriction Category of shares

Category of

shares

Quantity

Shenzhen Banglin Technologies

Development Co. Ltd.

114842654 RMB common

shares

114842654

Shengjiu Investment Ltd. 103694029 Foreign shares

listed in

domestic

exchanges

103694029

Fang Wei 35045539 RMB common

shares

35045539

Gong Qing Cheng Shi Li He

Investment Management Partnership

Enterprise (limited partner)

26791488 RMB common

shares

26791488

VANGUARD EMERGING

MARKETS STOCK INDEX FUND

7946483 Foreign shares

listed in

domestic

exchanges

7946483

Shenwan Hongyuan Securities

(Hong Kong) Co. Ltd.

7631296 Foreign shares

listed in

domestic

exchanges

7631296

SUN HUNG KAI INVESTMENT

SERVICES LTD

6916495 Foreign shares

listed in

6916495

domestic

exchanges

VANGUARD TOTAL

INTERNATIONAL STOCK

INDEX FUND

5872007 Foreign shares

listed in

domestic

exchanges

5872007

Essence International Securities

(Hong Kong) Co. Ltd.

4727707 Foreign shares

listed in

domestic

exchanges

4727707

Qu Chunlin 4307011 RMB common

shares

4307011

No action-in-concert or related

parties among the top10

unconditional shareholders and

between the top10 unconditional

shareholders and the top10

shareholders

Among the shareholders Shenzhen Banglin Technology Development Co. Ltd. and

Shengjiu Investment Co. Ltd. are parties action-in-concert. Shenzhen Banglin

Technology Development Co. Ltd. and Gong Qing Cheng Shi Li He Investment

Management Partnership Enterprise are related parties. The Company is not notified of

other action-in-concert or related parties among the other holders of current shares.Top-10 common share shareholders

participating in margin trade

None

Agreed re-purchasing by the Company’s top 10 shareholders of common shares and top 10 shareholders of unconditional common

shares in the report period

□ Yes √ No

No agreed re-purchasing by the Company’s top 10 shareholders of common shares and top 10 shareholders of unconditional common

shares in the report period

2. Profile of the controlling shareholders

Shareholder nature: natural person holding

Type of shareholder: legal person

Name of controlling

shareholder

Legal

representative/respon

sible person

Date of establishment Organization code Main business

Shenzhen Banglin

Technologies Development

Co. Ltd.

Chen Jinwu Jun. 7 2001 914403007298400552

Industrial investment

developing of electronic

products technical

consulting domestic

commerce material trading

Changes in the controlling shareholder in the reporting period

□ Applicable √ Inapplicable

No change in the controlling shareholder in the report period

3. Actual controller and persons acting in concert

Nature of actual controller: domestic natural person

Type of actual controller: natural person

Name of substantial controller

Relationship with the

actual controller

Nationality Right of residence in another country or region

Xiong Jianming Himself Chinese No

Job and position Chairman of the Board and president of the Company over the past 5 years

Profiles of domestic and overseas

listed companies in which the

controller held shares

The controller held no share in other listed companies in the last ten years.

Change in the actual controller in the report period

□ Applicable √ Inapplicable

No change in the actual shareholder in the report period

7. Chart of the controlling relationship

Controlling over the Company by the substantial controller through trust or other asset management

□ Applicable √ Inapplicable

4. Other legal person shareholders with over 10% of total shares

□ Applicable √ Inapplicable

5. Conditional decrease of shareholding by controlling shareholder actual controller reorganizer and

other entities

□ Applicable √ Inapplicable

Chapter VII Preferred Shares

□ Applicable √ Inapplicable

The Company had no preferred share in the report period.

VIII. Information about the Company’s Convertible Bonds

□ Applicable √ Inapplicable

No convertible bonds in the report period

Chapter IX Particulars about the Directors Supervisors Senior

Management and Employees

I. Changes in shareholding of Directors Supervisors and Senior Management

PRINTE

D NAME

Position Job status Sex Age

Starting

date of

the term

End date

of the

term

Number

of shares

held at

beginning

of the

period

Increased

shares in

this

period

(share)

Decrease

d shares

in this

period

(share)

Other

increase

and

decrease

(share)

Number

of shares

held at

end of the

period

Xiong

Jianming

Chairman

president

In office M 62

Novembe

r 20 1995

2020 1889657 1889657

Lin Kebin Director In office M 42

April 11

2017

2020

Lin Kebin

Vice

president

In office M 42

June 06

2008

2020

Zhou

Zhigang

Director In office M 57

April 9

2007

2020

Zhou

Zhigang

Vice

president

In office M 57

April 11

2017

2020

Zhou

Zhigang

Secretary

of the

Board

In office M 57

October

22 2003

2020

Xiong

Jianwei

Director In office M 51

April 16

1999

2020

Guo

Wanda

Independ

ent

director

In office M 54

March 31

2014

2020

Deng Lei

Independ

ent

director

In office M 41

February

16 2016

2020

Guo

Jinlong

Independ

ent

director

In office M 58

April 11

2017

2020

Dong

Gelin

Superviso

ry

Committe

e meeting

convener

In office M 41

December

28 2018

2020

Dong

Gelin

Superviso

r

In office M 41

April 11

2017

December

28 2018

Cao Naisi

Superviso

r

In office F 41

April 11

2017

2020

Ye

Zhiqing

Superviso

r

In office M 45

December

28 2018

2020 19100 19100

Wei

Yuexing

Vice

president

In office M 51

Jul. 29

2011

2020

Total -- -- -- -- -- -- 1908757 0 0 0 1908757

II. Changes in the Directors Supervisors and Senior Executives

□ Applicable √ Inapplicable

III. Office Description

Professional background work experience and main duties in the Company of existing directors supervisors and senior management

1. Mr. Xiong Jianming: PHD Management; senior engineer; part-time professor of Beijing Institute of Civil Engineering and

Architecture and Nanchang University. He is now the chairman and CEO of the Company representative of the 13th National

People's Congress and the 6th Shenzhen People's Congress president of the Shenzhen Semi-conductor Lighting Industry Promotion

Association chairman of Shenzhen Jiangxi Commerce Chamber chairman of Shenzhen Nanshan District Industry and Commerce

Association and honorary chairman of Shenzhen Nanshan District Charity. He was once employed by Jiangxi Provincial Machinery

Design Academe Administration Bureau of Shekou District of Shenzhen government etc deputy to the 10th People’s Congress of

Guangdong Province deputy to the 2nd and 3rd People’s Congress of Shenzhen City.

2. Mr. Lin Kebin holds a bachelor’s degree. At present he is a director the Vice President and CFO of the Company.

3. Mr. Xiong Jianwei: MBA. He is a director of the Company Chairman of the Board of Director of Fangda Jianke and a member of

the 14th Nanchang CPPCC Standing Committee.

4. Mr. Zhou Zhigang bachelor’s degree. He is currently a director vice president Secretary of Board. He was once the head of the

marketing department general manager of the corporate management center and general manager of the Human Resource

Department.

5. Mr. Guo Wanda: He is an Economics Ph. D and researcher. General development research institute (China) As the executive

deputy president of China Development Institute he has studied in macro-economy industry policies and enterprise development

strategies for years and provided consulting services. He is an independent director of the Company.

6. Mr. Deng Lei is a law Ph. D and post-doctor in the financial securities law of Shenzhen Stock Exchange. He is now a senior

partner of Guangdong China Commercial Law Firm. He is an independent director of the Company. He was once the vice director of

Corporate Law Affair Commission of Shenzhen Lawyer Association.

7. Guo Jinlong: master's degree CPA. He was a member of the fifth session of the CPPCC of Shenzhen City. He is currently the

deputy to the sixth session of the People's Congress of Shenzhen vice chairman of Guangdong Certified Public Accountants

Association (limited liability partnership) partner of ShineWing Certified Public Account and an independent director of the

Company. He was a former member of the 5th CPPCC Shenzhen.

Mr. Dong Gelin: bachelor's degree a senior engineer the Supervisory Committee meeting convener and deputy technical director. He

was once a designer of Shenzhen Fangda Jianke a wholly-owned subsidiary of the Company chief engineer of the designing

institution assistant to the general manager and general manager of Beijing branch of Fangda Jianke. He is now the vice general

manager of Fangda Jianke.

9. Ms. Cao Naisi: Bachelor's degree intermediate economist currently Supervisor of the Company and Deputy General Manager of

Fangda Jianke. She once served as the securities affairs representative of the Company the director of the audit and supervision

department the deputy director of the human resources department the general manager of Fangda Jianke Beijing Branch the

general manager of Fangda Jianke South China Branch and so on.

10. Mr. Ye Zhiqing holds a Bachelor degree and is a senior engineer. He is currently the Supervisor of the Company Vice Minister of

Enterprise Management Department and General Manager of Shanghai Branch of Fangda Jianke Company.

Offices held at shareholders entitie

√ Applicable □ Inapplicable

Name Shareholder entity Office

Starting date of the

term

End date

of the term

Whether any

remuneration is

paid at the

shareholder entity

Xiong Jianming Shengjiu Investment Ltd. Chairman Oct. 6 2011 No

Wei Yuexing

Gong Qing Cheng Shi Li He Investment

Management Partnership Enterprise

(limited partner)

Executive

partner

December 20 2016 No

Office

description

None

Offices held at other entities

√ Applicable □ Inapplicable

Name Entity name Office

Starting date of the

term

End date of

the term

Whether any

remuneration is

paid at the

shareholder entity

Guo Wanda

General development research institute

(Shenzhen China)

Standing vice

president

July 01 2007 Yes

Guo Wanda

Shenzhen Baode Technology Group Co.Ltd.Independent

director

June 06 2008 Yes

Guo Wanda Hercules Logistics

Independent

director

November 01

2013

Yes

Guo Wanda

Shenzhen Aotexun Power Equipment Co.Ltd.Independent

director

March 27 2017 Yes

Guo Wanda Meiyingsen Group Co. Ltd.Independent

director

November 25

2019

Yes

Deng Lei Guangdong China Commercial Law Firm Senior partner

November 01

2015

Yes

Deng Lei Wuhan Gaode Infrared Co. Ltd.

Independent

director

April 23 2015 Yes

Deng Lei Shenzhen Haimingrun Industrial Co. Ltd.

Independent

director

November 18

2014

Yes

Deng Lei Shenzhen Huaqiang Industrial Co. Ltd.

Independent

director

13 April 2018 Yes

Deng Lei

Shenzhen Hongtao Decoration Engineering

Co. Ltd.

Independent

director

22 May 2019 Yes

Deng Lei

Shenzhen Honey Network Technology Co.Ltd.Supervisor 16 August 2013 No

Guo Jinlong

ShineWing Certified Public Accountants

(limited liability partnership)

Partner 1 October 2005 Yes

Office

description

The above-mentioned three are independent directors of the Company.Penalties given by existing securities regulators on directors supervisors and senior management and those who have resigned in the

report period

√ Applicable □ Inapplicable

Guo Jinlong an independent director was administratively punished by the CSRC in December 2017 for warning and $50000

fine.IV. Remunerations of the Directors Supervisors and Senior Executives

Decision making procedures basis and actual payment of remunerations of the Directors Supervisors and Senior Executives

1. Remuneration schemes for directors and supervisors are proposed by the Remuneration and Assessment Committee of the Board

and implemented upon approval of the Board and the Shareholders’ Meetings; the remuneration schemes for executives are approved

and implemented by the Board.Remuneration for directors and supervisors are decided by the shareholders’ meeting. Remunerations for executives are composed of

wages and performance bonus as decided by the Board.Payment on monthly basis

Remunerations of the Directors Supervisors and Senior Executives of the Company During the reporting period

In RMB10000

PRINTED

NAME

Position Sex Age Job status

Total

remuneration

Remuneration

from related

parties

Xiong Jianming

Chairman

president

M 62 In office 224.65 No

Xiong Jianwei Director M 51 In office 108.99 No

Lin Kebin

Director vice

president

M 42 In office 107.79 No

Zhou Zhigang

Director vice

president

secretary of the

Board

M 57 In office 83.93 No

Guo Wanda

Independent

director

M 54 In office 8 No

Deng Lei

Independent

director

M 41 In office 8 No

Guo Jinlong

Independent

director

M 58 In office 8 No

Dong Gelin

Supervisory

Committee

meeting convener

M 41 In office 71.89 No

Cao Naisi Supervisor F 41 In office 59.68 No

Ye Zhiqing Supervisor M 45 In office 77.85 No

Wei Yuexing Vice president M 51 In office 106.83

Total -- -- -- -- 865.61 --

Equity incentive programs provided for the Directors and Senior Executives of the Company during the reporting period

□ Applicable √ Inapplicable

5. Employees

1. Staff number professional composition and education

Staff number of the parent 64

Staff number of major subsidiaries 2113

Total staff number 2395

Number of employees receiving remuneration in the period 2395

Resigned and retired staff number to whom the parent and major

subsidiaries need to pay remuneration

0

Professional composition

Categories of professions Number of people

Production 1002

Sales & Marketing 85

Technicians 1072

Finance & Accounting 65

Administration 171

Total 2395

Education

Categories of education Number of people

High school or below 1128

College diploma 435

Bachelor 814

Master’s degree 17

Doctor’s degree 1

Total 2395

2. Remuneration policy

Staff remuneration policy: The Company’s staff remuneration comprises post wage performance wage allowance and annual

bonus. The Company has set up an economic responsibility assessment system according to the annual operation target and

responsibility indicators for all departments. The performance wage is determined by the economic indicators management

indicators optimization indicators and internal control. The annual bonus is determined by the Company's annual profit and

fulfillment of targets set for various departments. The staff remuneration and welfare will be adjusted according to the Company’s

business operation and changes in the local standard of living and price index.

3. Training program

Staff training plan: The Company has paid continuous attention to training and development of the staff and introduces

innovative learning as part of the long-term strategy. We provide training programs through different channels and in different fields

for different employees will help them fulfill their works including new staff training on-the-job training operation and

management training programs. These programs have largely elevated capabilities of the staff and underpin the success of the

Company.

4. Labor outsourcing

√ Applicable □ Inapplicable

Total number of hours of labor outsourcing 13243551.92

Total remuneration paid for labor outsourcing (RMB) 426978757.21

Chapter X Corporation Governance

1. Overview

During the report period the Company strictly complied with the Company Law Securities Law Governance Standards for

Listed Companies Shenzhen Stock Exchange Share Listing Rules Operation Regulations for Listed Companies in the Main Board

of Shenzhen Stock Exchange continued to improve the legal person governance structure and has formulated a series of internal

management systems covering various aspects. The Company has set up a comprehensive and effective internal control system in

important decision making related transaction decision making financial management HR management administration purchase

production and sales management confidentiality and information disclosure.Major difference between the actual corporate governance and regulations on corporate governance of listed companies issued by

CSRC

□ Yes √ No

There is no major difference between the actual corporate governance and regulations on corporate governance of listed companies

issued by CSRC.

2. Independence of the Company from the controlling shareholder in aspects of businesses

personnel assets organizations and accounting

(1) In the aspect of business: the Company has its own purchasing production sales and customer service system which

performing independently. There is not any material related transactions occurred with the controlling shareholders.

(2) In personnel the labor management personnel and salary management are operated independently from the controlling

shareholder. The senior managements take salaries from the Company and none of them takes senior management position in the

controlling party.

(3) In assets the Company owns its production supplementary production system and accessory equipments independently and

possesses its own industrial properties non-patent technologies and trademark.

(4) In organization the production and business operation executive management and department setting are completely

independent from the controlling shareholder. No situation of combined office exists. The Company adjusts its organizing structure

only for its own practical requirement of development and management.

(5) In accounting the Company has its own independent accounting and auditing division established independent and

completed accounting system and management rules has its own bank account and exercise its liability of taxation independently.

3. Competition

□ Applicable √ Inapplicable

4. Annual and extraordinary shareholder meetings held during the report period

1. Annual shareholder meeting during the report period

Meeting Type

Participation of

investors

Date Date of disclosure

Index for information

disclosure

2018 Annual

Shareholder Meeting

Annual

shareholders’

meeting

21.52% 19 February 2019 20 February 2019

Notice on Resolutions of

the Annual Shareholders’

Meeting (2018) (2019-19)

released on

www.cninfo.com.cn

1st Provisional

Shareholders’

Meeting 2019

Extraordinary

shareholders’

meeting

21.91% 16 December 2019 17 December 2019

Notice on Resolutions of

the 1st Extraordinary

Shareholders’ Meeting in

2019 (2019-47)

2. Shareholders of preference shares of which voting right resume convening an extraordinary

shareholders’ meeting

□ Applicable √ Inapplicable

V. Performance of independent directors during the report period

1. Independent directors’ presenting of board meetings and shareholders’ meetings in the report period

Independent directors’ presenting of board meetings and shareholders’ meetings in the report period

Name of

independent

director

Time of board

meetings

should have

attended

Number of

board meetings

attended

Presented by

telecom

Number of

board meetings

attended by

proxy

Number of

board meetings

not attended

Absent for two

consecutive

meetings

Number of

shareholders'

meetings

attended

Guo Wanda 8 4 4 0 0 No 1

Deng Lei 8 4 4 0 0 No 2

Guo Jinlong 8 4 4 0 0 No 1

Statement for absence for two consecutive board meetings

None

2. Objection raised by independent directors

Any objection raised by independent directors against the Company’s related issues

□ Yes √ No

Independent directors made no objection on related issued of the Company in the report period.

3. Other statement for performance of independent directors

Adoption of suggestion proposed by independent directors

√ Yes □ No

Statement for suggestion adopted or not by the Company

During the reporting period the Company’s independent directors strictly followed the relevant laws regulations and the

―Articles of Association‖ and paid attention to the Company’s operations attended the Company’s Board of Directors and

shareholders’ meeting and all the independent directors carefully reviewed the various proposals of the Company’s Board of

Directors and performed their duties conscientiously. The development decision has put forward constructive opinions or suggestions

and has issued independent opinions on the improvement of the Company's system and major business management matters

corporate guarantees profit distribution use of raised funds etc. Independent directors have adopted the Company’s relevant

recommendations. It has played an active role in safeguarding the interests of the Company and small and medium shareholders.VI. Performance of specific committees under the Board

(1) Performance of the Development Strategy Committee

During the report period the Development Strategy Committee of the Company has performed its duties in accordance with the

Working Regulations for Development Strategy Committee and played its role in the decision-making process of the Company. Two

meetings were convened and details are disclosed as follows:

1. On January 28 2019 the Company held the 4th meeting of the 8th Development Strategy Commission to listen to the report

on production and operation in 2018 and production and operation plan for 2019.

2. On August 16 2019 the 5th meeting of the Development Strategy Committee of the 8th term of the Board was held to view

the Company’s production and operation in the first half of 2019 and studied the fulfillment of the business plan in the first half of the

year and places to be improved in the second half.

(2) Performance of the Auditing Committee

During the report period six Auditing Committee meetings are held to review issues including the arrangement of audit regular

financial reports engaging the CFA and foreign exchange derivatives trading. Details of the meetings are disclosed as follows:

1. On January 24 2019 the 8th meeting of the Auditing Committee of the 8th term of the Board was held to review the

financial statements with the initial opinion issued by the CFA for 2018 and approve the auditor report issued by the CFA. After the

CFA issued to final auditor’s opinion the Auditing Committee submitted the resolution on the annual financial statements to the

Board and issued the summary report on the auditing of the CFA for this year.

2. On January 28 2019 the Company convened the ninth meeting of the 8th Board of Directors Audit Committee. The meeting

heard the financial and internal audit reports for 2018 and considered and adopted (1) the audited financial and financial statements

for 2018. (2) On the Company's 2018 internal audit work plan; (3) Report on the self-evaluation of the Company's internal control in

2018. The audit committee suggests that the internal audit body should increase communication with the audit committee to help the

committee better under the Company's condition and make higher requirements on the audit quality. The members of the audit

committee gave professional advice on improving the Company's processes optimizing the system and risk prevention from various

perspectives based on their own experience in different industries. They also put forward higher requirements for the Company's

future internal control work.

3. On April 19 2019 the Company convened the tenth meeting of the 8th Board of Directors Audit Committee to consider and

approve the financial and accounting statements of the Company in the first quarter of 2019.

4. On August 16 2019 the Company held the 6th meeting of the Audit Committee of the 11th Board of Directors and reported

to the members on the financial work and internal audit work report for the first half of 2018. Reviewed and adopted (1) the

Company's financial statements for 2019; (2) The proposal of the Company to consider the appointment of audit institutions in 2019.

1. On October 24 2019 the 12th meeting of the Auditing Committee of the 8th term of the Board was held to review the

financial statements with the initial opinion issued by the CFA for 2019 and approve the auditor report issued by the CFA.

6. On 28 November 2019 the Company convened the thirteenth meeting of the 8th Board of Directors Audit Committee to

consider and adopt (1) the feasibility analysis report on foreign exchange derivatives trading; (2) A bill on the transaction of foreign

exchange derivatives.

(3) Performance of the Remuneration and Assessment Committee

During the reporting period the Remuneration and Appraisal Committee of the Board of Directors held the second meeting of the

Remuneration and Appraisal Committee of the 8th Board of Directors on January 28 2019 according to the "Working Rules of the

Remuneration and Appraisal Committee" formulated by the Company and reviewed the proposal for 2018 annual remuneration of

supervisors and senior management personnel.VII. Performance of Supervisory Committee

(1) Risks for the Company discovered by the Supervisory Committee

□ Yes √ No

No disagreement with supervisory issues by the Supervisory Committee during the report period.

(2) The Supervisory Committee’ Work Report 2019

In 2019 the Supervisory Committee performed its duties and obligations in supervision and protect shareholders’ and the

Company’s interests in accordance with the Company Law Share Listing Rules Articles of Association and Rules of the Procedure

of the Supervisory Committee. The 2019 supervisory committee's work plan is as follows:

1. Opinions

(1) Legal compliance

In the report period the Company has been operated in accordance with law. The convening of meeting of the Board and the

decision-making process are compliant with law regulations and Articles of Association; the internal control system is solid.

Directors and senior management have performed their obligations. No violation against law regulations Articles of Association and

interests of the Company and shareholders was discovered.

(2) Financial condition

During the period the accounting management has been compliant with the Accounting Law Enterprise Accounting Standard.

No false misleading statement or significant omission was found in financial statements. The financial reports of the Company

reflect the Company’s financial position operation performance cash flows and major risks truthfully accurately and completely.The CPA has issued the standard auditor's report in 2019 which is objective fair and truthful. It reflects the Company's financial

position and operation performance.

(3) Implementation of internal control

The design and operation of the internal control is effective and meets the Company's management and development

requirements. It can ensure the truthfulness lawfulness completeness of the financial materials and ensure the safety and

completeness of the Company’s property. In 2019 there was no violation by the Company against the Operation Regulations for

Listed Companies in the Main Board of Shenzhen Stock Exchange and the Company’s internal control system. The 2019 Internal

Control Self-evaluation Report truthfully and objectively reflects the establishment implementation and improvement of the

Company’s internal control system. There are no significant or important problems in the financial and non-financial reports in the

report period.

2. Meetings and resolutions of the supervisory meeting in the report period:

Four meetings were held in 2019 all of which are on-site meetings. All proposal were approved and disclosed as required:

No. Meeting Date Convening Topic

method

1

9th meeting of

the 8th

Supervisory

Committee

20.04.18 On-site

1. Consideration of the annual report of the Company on the

work of its board of supervisors for 2018;

2. Consideration of the full text and summary of our annual

report for 2018;

3. Consideration of the Company's financial accounts for

2018;

4. Consideration of the Company's bill on the distribution of

profits for 2018;

5. Consideration of the Company's annual internal control

self-evaluation report for 2018;

6. Consideration of the Company's bill on accounting policy

changes;

7. Consideration of our proposal to amend the rules of

procedure of the Supervisory Committee.

2

10th meeting of

the 8th

Supervisory

Committee

19 April

2019

On-site

1. Consideration of the draft of the full text and body of our

report for the first quarter of 2019;

2. Review the Company's bill on accounting policy changes.

3

11th meeting of

the 8th

Supervisory

Committee

16 August

2019

On-site

1. Consideration of the full text and summary of the

Company's 2019 semi-annual report;

2. Consideration of the Company's proposal to employ audit

institutions in 2019;

3. Consideration of the Company's bill on accounting policy

changes.

4

12th meeting of

the 8th

Supervisory

Committee

24 October

2019

On-site Reviewing the 2019 Q3 Report and Text;

VIII. Assessment and motivation of senior executives

The Company has implemented a remuneration system that combines post wage and performance bonus. The wages and bonus

are determined by on the assessment of senior executives’ innovation capabilities general quality performance fulfillment of profit

and payment collection targets according to the Company's annual performance assess and performance assess implementation

methods for wholly-owned subsidiaries.IX. Internal control

1. Major problems in internal control discovered in the report period

□ Yes √ No

2. Internal control self-evaluation report

Date of disclosure of the internal control

evaluation report

18 April 2020

Disclosure of the internal control

evaluation report

www.cninfo.com.cn

Percentage of assets in the evaluation

scope in the total assets in the consolidated

financial statements

95.69%

Percentage of operation income in the

evaluation scope in the total operation

income in the consolidated financial

statements

97.72%

Standard

Type Financial report Non-financial report

Standard

1. The following problems are considered

major problems: 1. Non-effective control

environment; 2. corrupt practice by directors

supervisor and senior management causing

substantial loss and impacts for the

Company; 3. Substantial mistakes in the

financial statements in the period discovered

by the CPA which are not discovered by the

internal control; 4. Ineffective supervision of

the internal control by the Company’s

auditing department 2. The following

problems are considered significant

problems: 1 accounting policies are selected

and used without complying to widely

accepted accounting standards; 2. No

anti-corrupt and important balance system

and control measures are taken; 3. Separate

or multiple problems in the preparation of

financial reports which are serious enough

to affecting the truthfulness and accuracy of

the reports; no control system is established

and no related compensation system is

implemented for accounts of irregular or

special transactions 3. Other problems are

considered normal problems.I. The following condition indicates

significant problems in the internal

control of non-financial reports: 1.Serious violation against national laws

regulations or specifications; 2. Serious

business system problems and system

ineffectiveness; 3. Major or important

problems cannot be corrected; 4. Lack of

internal control and poor management; 5.Loss of management personnel or key

employees; 6. Safety and environmental

accidents that cause major adverse

impacts; 7. Other situations that cause

major adverse impacts on the Company.II. The following situations indicate that

there may be significant problems with

the internal control: 1. business system

problems and system ineffectiveness; 2.Major or important problems cannot be

corrected; 3. Other situations that cause

major adverse impacts on the Company

III. The following situation indicate

likely normal problems in the internal

control: 1. Problems in the general

business system; 2. Normal problems in

the internal control supervision cannot be

correctly promptly.

Standard

1. Significant problem: 1 mistakes affecting

5% and more of the pre-tax profit and more

than RMB5 million in the consolidated

statements; 2. Mistakes affecting 5% and

more of the consolidated assets and more

than RMB5 million 2. Important problem: 1.Mistakes affecting 1%-5% of the pre-tax

profit in the consolidated statements; 2.Mistakes affecting 1%-5% the consolidated

assets. III. Normal problem: 1. Mistakes

affecting less than 1% of the pre-tax profit

and total assets of the consolidate statements.See the recognition standard of the

internal control problems for financial

statements

Significant problems in financial

statements

0

Significant problems in non-financial

statements

0

Important problems in financial statements 0

Important problems in non-financial

statements

0

X. Internal control audit report

√ Applicable □ Inapplicable

Comments in the internal control audit report

We believe that China Fangda Group has maintained effective internal control on financial reports according to Basic Regulations

on Enterprise Internal Control and related regulations on 31.12.18.

Disclosure of internal auditor’s

report

Disclosed

Date of disclosure of the internal

control audit report

18 April 2020

Source of disclosure of the internal

control audit report

www.cninfo.com.cn

Opinion type Standard opinion auditor’s report

Problems in non-financial

statements

No

Non-standard internal control audit report by the CFA

□ Yes √ No

Consistency between the internal control audit report and self-evaluation report

√ Yes □ No

Chapter XI Information about the Company’s Securities

Bonds publicly issued and listed in a securities exchange immature or not fully paid by the approval date of the annual report

No

Chapter XII Financial Statements

I. Auditor’s report

Type Standard opinion auditor’s report

Issued on 16 April 2020

Auditor RSM Thornton (limited liability partnership)

CPA names Chen Zhaoxin Zeng Hui

Auditors’ Report

II. Financial statements

Unit for statements in notes to financial statements: RMB yuan

1. Consolidated Balance Sheet

Prepared by: China Fangda Group Co. Ltd.In RMB

Item 31 December 2019 31 December 2018

Current asset:

Monetary capital 1209811978.95 1389062083.76

Settlement provision

Outgoing call loan

Transactional financial assets 10330062.18

Financial assets measured at fair

value with variations accounted into

current income account

Derivative financial assets

Notes receivable 305070930.97 140139692.84

Account receivable 1956191307.07 1920075031.85

Receivable financing 2954029.00

Prepayment 21327109.18 46454844.74

Insurance receivable

Reinsurance receivable

Provisions of Reinsurance

contracts receivable

Other receivables 139947655.35 139990188.26

Including: interest receivable

Dividend receivable

Repurchasing of financial assets

Inventory 733711143.46 651405832.29

Contract assets

Assets held for sales

Non-current assets due in 1 year

Other current assets 323765585.90 51698111.14

Total current assets 4703109802.06 4338825784.88

Non-current assets:

Loan and advancement provided

Debt investment

Sellable financial assets 21674008.23

Other debt investment

Investment held until mature

Long-term receivable

Long-term share equity investment 57222240.83 70105657.88

Investment in other equity tools 20660181.44

Other non-current financial assets 5009728.02

Investment real estate 5522391984.11 5256442406.63

Fixed assets 477332830.92 455274241.83

Construction in process 129988982.86 58269452.72

Productive biological assets

Gas & petrol

Use right assets

Intangible assets 78322265.05 80313240.67

R&D expense

Goodwill

Long-term amortizable expenses 3875198.12 2114331.46

Deferred income tax assets 343349564.70 356474925.76

Other non-current assets 28701802.00 19360083.67

Total of non-current assets 6666854778.05 6320028348.85

Total of assets 11369964580.11 10658854133.73

Current liabilities

Short-term loans 724618197.34 208000000.00

Loans from Central Bank

Call loan received

Transactional financial liabilities

Financial liabilities measured at

fair value with variations accounted into

current income account

Derivative financial liabilities 96767.62 1625725.00

Notes payable 578816027.44 507864518.19

Account payable 1190773300.24 1039630798.64

Prepayment received 136340104.73 278577848.54

Contract liabilities

Selling of repurchased financial

assets

Deposit received and held for

others

Entrusted trading of securities

Entrusted selling of securities

Employees' wage payable 55847134.20 44513062.17

Taxes payable 17848987.68 107709999.19

Other payables 701432408.28 813118699.84

Including: interest payable 2098971.44

Dividend payable

Fees and commissions payable

Reinsurance fee payable

Liabilities held for sales

Non-current liabilities due in 1

year

922346563.72 200000000.00

Other current liabilities 181694574.47 9328682.25

Total current liabilities 4509814065.72 3210369333.82

Non-current liabilities:

Insurance contract provision

Long-term loans 546501491.56 1193978153.39

Bond payable

Including: preferred stock

Perpetual bond

Lease liabilities

Long-term payable

Long-term employees’ wage

payable

Anticipated liabilities 7793527.16 6831162.99

Deferred earning 10817247.40 10401161.30

Deferred income tax liabilities 1063833159.00 1042086700.35

Other non-current liabilities

Total of non-current liabilities 1628945425.12 2253297178.03

Total liabilities 6138759490.84 5463666511.85

Owner’s equity:

Share capital 1123384189.00 1155481686.00

Other equity tools

Including: preferred stock

Perpetual bond

Capital reserves 1454191.59 1454191.59

Less: Shares in stock 10831437.66

Other miscellaneous income -475409.25 7382087.59

Special reserves

Surplus reserves 159805930.34 120475221.40

Common risk provisions

Retained profit 3898626177.99 3921225872.96

Total of owner’s equity belong to the

parent company

5182795079.67 5195187621.88

Minor shareholders’ equity 48410009.60

Total of owners’ equity 5231205089.27 5195187621.88

Total of liabilities and owner’s interest 11369964580.11 10658854133.73

Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Wu Bohua

2. Balance Sheet of the Parent Company

In RMB

Item

Current asset:

Monetary capital 175591953.63 410118157.55

Transactional financial assets

Financial assets measured at fair

value with variations accounted into

current income account

Derivative financial assets

Notes receivable 200000000.00

Account receivable 297813.76 471039.12

Receivable financing

Prepayment 250205.32 6733047.16

Other receivables 1973381342.74 822543653.04

Including: interest receivable

Dividend receivable 100000000.00

Inventory

Contract assets

Assets held for sales

Non-current assets due in 1 year

Other current assets 877430.41 919388.18

Total current assets 2150398745.86 1440785285.05

Non-current assets:

Debt investment

Sellable financial assets 21674008.23

Other debt investment

Investment held until mature

Long-term receivable

Long-term share equity investment 963508253.00 983339494.35

Investment in other equity tools 18604010.22

Other non-current financial assets 48831242.35

Investment real estate 295355002.00 309189866.37

Fixed assets 67361529.52 53784811.23

Construction in process

Productive biological assets

Gas & petrol

Use right assets

Intangible assets 1824589.22 2112301.97

R&D expense

Goodwill

Long-term amortizable expenses 934669.73 917499.68

Deferred income tax assets 44408630.81 34555598.81

Other non-current assets

Total of non-current assets 1440827926.85 1405573580.64

Total of assets 3591226672.71 2846358865.69

Current liabilities

Short-term loans 300442988.19 200000000.00

Transactional financial liabilities

Financial liabilities measured at

fair value with variations accounted into

current income account

Derivative financial liabilities

Notes payable

Account payable 606941.85 676941.85

Prepayment received 746761.55 733274.16

Contract liabilities

Employees' wage payable 3215013.16 2145763.39

Taxes payable 312647.89 341004.65

Other payables 109837934.17 300006406.51

Including: interest payable 740208.33

Dividend payable

Liabilities held for sales

Non-current liabilities due in 1

year

520872206.95

Other current liabilities

Total current liabilities 936034493.76 503903390.56

Non-current liabilities:

Long-term loans 70000000.00 500000000.00

Bond payable

Including: preferred stock

Perpetual bond

Lease liabilities

Long-term payable

Long-term employees’ wage

payable

Anticipated liabilities

Deferred earning

Deferred income tax liabilities 64351075.92 64130617.41

Other non-current liabilities

Total of non-current liabilities 134351075.92 564130617.41

Total liabilities 1070385569.68 1068034007.97

Owner’s equity:

Share capital 1123384189.00 1155481686.00

Other equity tools

Including: preferred stock

Perpetual bond

Capital reserves 360835.52 360835.52

Less: Shares in stock 10831437.66

Other miscellaneous income 1287629.38 8756553.46

Special reserves

Surplus reserves 159805930.34 120475221.40

Retained profit 1236002518.79 504081999.00

Total of owners’ equity 2520841103.03 1778324857.72

Total of liabilities and owner’s interest 3591226672.71 2846358865.69

3. Consolidated Income Statement

In RMB

Item 2019 2018

1. Total revenue 3005749558.66 3048680152.06

Incl. Business income 3005749558.66 3048680152.06

Interest income

Insurance fee earned

Fee and commission

received

2. Total business cost 2601531253.53 2782649142.36

Incl. Business cost 2169176295.27 2337948010.42

Interest expense

Fee and commission paid

Insurance discharge payment

Net claim amount paid

Net insurance policy

responsibility contract reserves provided

Insurance policy dividend

paid

Reinsurance expenses

Taxes and surcharges 61963170.98 152681927.79

Sales expense 57584186.20 49833945.89

Administrative expense 170443795.50 140002624.79

R&D cost 59754971.20 19854244.58

Financial expenses 82608834.38 82328388.89

Including: interest cost 84330416.17 75934358.74

Interest income 10770653.40 9255120.60

Add: other gains 7616772.29 5681937.15

Investment gains (―-‖ for loss) -1909644.55 27776084.43

Incl. Investment gains from

affiliates and joint ventures

-2152583.08 -836397.74

Financial assets

derecognised as a result of amortized cost

-8047524.45

Exchange gains ("-" for loss)

Net open hedge gains (―-‖ for

loss)

Gains from change of fair value

(―-― for loss)

42618039.60 2913858560.57

Credit impairment ("-" for loss) -34518434.36

Investment impairment loss

("-" for loss)

218619.24 -239866511.30

Investment gains ("-" for loss) -101676.86 -3516357.91

3. Operational profit ("-" for loss) 418141980.49 2969964722.64

Plus: non-operational income 2857177.74 3712594.09

Less: non-operational expenditure 3965865.48 3846202.80

4. Gross profit ("-" for loss) 417033292.75 2969831113.93

Less: Income tax expenses 70271688.45 723666542.25

5. Net profit ("-" for net loss) 346761604.30 2246164571.68

(1) By operating consistency

1. Net profit from continuous

operation ("-" for net loss)

347246227.22 2246384786.08

2. Net profit from discontinuous

operation ("-" for net loss)

-484622.92 -220214.40

(2) By ownership

1. Net profit attributable to the

owners of parent company

347771182.73 2246164571.68

2. Minor shareholders’ equity -1009578.43

6. After-tax net amount of other misc.

incomes

-2691071.26 -1203760.40

After-tax net amount of other misc.

incomes attributed to parent's owner

-2691071.26 -1203760.40

(1) Other misc. incomes that cannot

be re-classified into gain and loss

-4025604.80

1. Re-measure the change in

the defined benefit plan

2. Other comprehensive

income that cannot be transferred to

profit or loss under the equity method

3. Fair value change of

investment in other equity tools

-4025604.80

4. Fair value change of the

Company's credit risk

5. Others

(2) Other misc. incomes that will be

re-classified into gain and loss

1334533.54 -1203760.40

1. Other comprehensive

income that can be transferred to profit or

loss under the equity method

2. Fair value change of other

debt investment

3. Change in the fair value of

financial asset for sale

4. Gains and losses from

changes in fair value of available-for-sale

financial assets

5. Held-to-mature

investment reclassified as gain and loss in

the financial assets for sales

6. Other credit investment

credit impairment provisions

7. Cash flow hedge reserve 1208493.78 -1170896.25

8. Translation difference of

foreign exchange statement

126039.76 -32864.15

9. Others

After-tax net of other misc. income

attributed to minority shareholders

7. Total of misc. incomes 344070533.04 2244960811.28

Total of misc. incomes attributable

to the owners of the parent company

345080111.47 2244960811.28

Total misc gains attributable to the

minor shareholders

-1009578.43

8. Earnings per share:

(1) Basic earnings per share 0.310 1.91

(2) Diluted earnings per share 0.310 1.91

Net profit contributed by entities merged under common control in the report period was RMB net profit realized by

parties merged during the previous period is RMB .Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Wu Bohua

4. Income Statement of the Parent Company

In RMB

Item 2019 2018

1. Turnover 28729890.94 30830762.76

Less: Operation cost 773571.29 1604559.26

Taxes and surcharges 1348489.24 1342603.83

Sales expense

Administrative expense 27178767.85 24395947.11

R&D cost

Financial expenses 38854726.68 25450212.15

Including: interest cost 34985463.24 23822633.36

Interest income 2165024.86 2758152.15

Add: other gains 408311.72 368589.30

Investment gains (―-‖ for loss) 1087133456.16 124133997.29

Incl. Investment gains from

affiliates and joint ventures

Financial assets

derecognised as a result of amortized

cost ("-" for loss)

Net open hedge gains (―-‖ for

loss)

Gains from change of fair

value (―-― for loss)

1784860.63 1868298.37

Credit impairment ("-" for

loss)

40817.64

Investment impairment loss

("-" for loss)

7597228.84

Investment gains ("-" for loss) -55902.90

2. Operational profit (―-‖ for loss) 1049941782.03 96755193.63

Plus: non-operational income 26335.45 42961.77

Less: non-operational expenditure 1223230.35 506232.62

3. Gross profit (―-‖ for loss) 1048744887.13 96291922.78

Less: Income tax expenses -8892465.53 -9543869.19

4. Net profit (―-‖ for net loss) 1057637352.66 105835791.97

(1) Net profit from continuous

operation ("-" for net loss)

1057637352.66 105835791.97

(2) Net profit from discontinuous

operation ("-" for net loss)

5. After-tax net amount of other misc.

incomes

-2302498.50

(1) Other misc. incomes that

cannot be re-classified into gain and

loss

-2302498.50

1. Re-measure the change

in the defined benefit plan

2. Other comprehensive

income that cannot be transferred to

profit or loss under the equity method

3. Fair value change of

investment in other equity tools

-2302498.50

4. Fair value change of the

Company's credit risk

5. Others

(2) Other misc. incomes that will

be re-classified into gain and loss

1. Other comprehensive

income that can be transferred to profit

or loss under the equity method

2. Fair value change of

other debt investment

3. Change in the fair value

of financial asset for sale

4. Gains and losses from

changes in fair value of

available-for-sale financial assets

5. Held-to-mature

investment reclassified as gain and loss

in the financial assets for sales

6. Other credit investment

credit impairment provisions

7. Cash flow hedge reserve

8. Translation difference of

foreign exchange statement

9. Others

6. Total of misc. incomes 1055334854.16 105835791.97

7. Earnings per share:

(1) Basic earnings per share

(2) Diluted earnings per share

5. Consolidated Cash Flow Statement

In RMB

Item 2019 2018

1. Net cash flow from business

operations:

Cash received from sales of

products and providing of services

2648185771.07 2865682841.59

Net increase of customer deposits

and capital kept for brother company

Net increase of loans from central

bank

Net increase of inter-bank loans

from other financial bodies

Cash received against original

insurance contract

Net cash received from reinsurance

business

Net increase of client deposit and

investment

Cash received as interest

processing fee and commission

Net increase of inter-bank fund

received

Net increase of repurchasing

business

Net cash received from trading

securities

Tax refunded 5311628.37 1647970.72

Other cash received from business

operation

91894481.18 107059575.17

Sub-total of cash inflow from business

operations

2745391880.62 2974390387.48

Cash paid for purchasing products

and services

1940970927.40 1671518745.27

Net increase of client trade and

advance

Net increase of savings in central

bank and brother company

Cash paid for original contract

claim

Net increase in funds dismantled

Cash paid for interest processing

fee and commission

Cash paid for policy dividend

Cash paid to and for the staff 330737740.20 274922323.91

Taxes paid 244444228.84 301712580.53

Other cash paid for business

activities

234523814.95 339134018.20

Sub-total of cash outflow from business

operations

2750676711.39 2587287667.91

Cash flow generated by business

operations net

-5284830.77 387102719.57

2. Cash flow generated by investment:

Cash received from investment

recovery

6993386864.50 7573967278.99

Cash received as investment profit 59694513.21 86864507.03

Net cash retrieved from disposal of

fixed assets intangible assets and other

long-term assets

12519211.48 17886076.00

Net cash received from disposal of

subsidiaries or other operational units

Other investment-related cash

received

2493.86

Sub-total of cash inflow generated from

investment

7065603083.05 7678717862.02

Cash paid for construction of fixed

assets intangible assets and other

long-term assets

201244475.00 199604502.80

Cash paid as investment 7319016324.17 7271417092.50

Net increase of loan against pledge

Net cash paid for acquiring

subsidiaries and other operational units

Other cash paid for investment

Subtotal of cash outflows 7520260799.17 7471021595.30

Cash flow generated by investment

activities net

-454657716.12 207696266.72

3. Cash flow generated by financing

activities:

Cash received from investment

Incl. Cash received from

investment attracted by subsidiaries

from minority shareholders

Cash received from borrowed

loans

1006523338.17 708000000.00

Other cash received from financing

activities

88312942.36

Subtotal of cash inflow from financing

activities

1094836280.53 708000000.00

Cash paid to repay debts 418000000.00 816000000.00

Cash paid as dividend profit or

interests

320109344.09 264157464.17

Incl. Dividend and profit paid by

subsidiaries to minority shareholders

Other cash paid for financing

activities

128428226.25 199439589.23

Subtotal of cash outflow from financing

activities

866537570.34 1279597053.40

Net cash flow generated by financing

activities

228298710.19 -571597053.40

4. Influence of exchange rate changes

on cash and cash equivalents

722848.92 1703422.24

5. Net increase in cash and cash

equivalents

-230920987.78 24905355.13

Plus: Balance of cash and cash

equivalents at the beginning of term

956190890.68 931285535.55

6. Balance of cash and cash equivalents

at the end of the period

725269902.90 956190890.68

6. Cash Flow Statement of the Parent Company

In RMB

Item 2019 2018

1. Net cash flow from business

operations:

Cash received from sales of

products and providing of services

21696664.72 26555743.34

Tax refunded

Other cash received from business

operation

3227285187.16 1976545022.66

Sub-total of cash inflow from business

operations

3248981851.88 2003100766.00

Cash paid for purchasing products

and services

1693694.68 2060345.12

Cash paid to and for the staff 17754587.59 15053325.83

Taxes paid 4452135.09 15944462.51

Other cash paid for business

activities

4620509035.31 2263461863.27

Sub-total of cash outflow from business

operations

4644409452.67 2296519996.73

Cash flow generated by business

operations net

-1395427600.79 -293419230.73

2. Cash flow generated by investment:

Cash received from investment

recovery

2696000000.00 2646355978.40

Cash received as investment profit 1187133456.16 197678018.89

Net cash retrieved from disposal of

fixed assets intangible assets and other

long-term assets

Net cash received from disposal of

subsidiaries or other operational units

Other investment-related cash

received

10000000.00

Sub-total of cash inflow generated from

investment

3883133456.16 2854033997.29

Cash paid for construction of fixed

assets intangible assets and other

long-term assets

254183.30 1125745.40

Cash paid as investment 2725000001.00 2626870000.00

Net cash paid for acquiring

subsidiaries and other operational units

Other cash paid for investment

Subtotal of cash outflows 2725254184.30 2627995745.40

Cash flow generated by investment

activities net

1157879271.86 226038251.89

3. Cash flow generated by financing

activities:

Cash received from investment

Cash received from borrowed

loans

400000000.00 700000000.00

Other cash received from financing

activities

88312942.36

Subtotal of cash inflow from financing

activities

488312942.36 700000000.00

Cash paid to repay debts 10000000.00 250000000.00

Cash paid as dividend profit or

interests

259087314.23 211344710.76

Other cash paid for financing

activities

88428226.25 199439589.23

Subtotal of cash outflow from financing

activities

357515540.48 660784299.99

Net cash flow generated by financing

activities

130797401.88 39215700.01

4. Influence of exchange rate changes

on cash and cash equivalents

498258.88 -289429.05

5. Net increase in cash and cash

equivalents

-106252668.17 -28454707.88

Plus: Balance of cash and cash

equivalents at the beginning of term

281594621.80 310049329.68

6. Balance of cash and cash equivalents

at the end of the period

175341953.63 281594621.80

7. Statement of Change in Owners’ Equity (Consolidated)

Amount of the Current Term

In RMB

Item

2019

Owners' Equity Attributable to the Parent Company

Minor

shareh

olders’

equity

Total

of

owners

’

equity

Share

capita

l

Other equity tools

Capital

reserve

s

Less:

Shares

in

stock

Other

miscell

aneous

incom

e

Specia

l

reserve

s

Surplu

s

reserve

s

Comm

on risk

provisi

ons

Retain

ed

profit

Others

Subtot

al

Prefe

rred

share

Perpe

tual

bond

Other

s

1. Balance at

the end of last

year

1155

481

686.0

0

1454

191.59

10831

437.6

6

7382

087.59

12047

5221.

40

3921

22587

2.96

5195

18762

1.88

5195

18762

1.88

Plus:

Changes in

accounting

policies

-5166

425.58

52486

0.03

-3993

0304.

63

-4457

1870.

18

-4457

1870.

18

Correction of

previous errors

Consolidation

of entities under

common control

Others

2. Balance at

the beginning of

current year

1155

481

686.0

0

1454

191.59

10831

437.6

6

2215

662.01

12100

0081.

43

3881

29556

8.33

5150

61575

1.70

5150

61575

1.70

3. Change

amount in the

current period

(―-― for

decrease)

-320

9749

7.00

-1083

1437.

66

-2691

071.26

38805

848.9

1

17330

609.6

6

32179

327.9

7

48410

009.6

0

80589

337.5

7

(1) Total of

misc. incomes

-2691

071.26

34777

1182.

73

34508

0111.4

7

-1009

578.43

34407

0533.

04

(2) Investment

or decreasing of

capital by

owners

-320

9749

7.00

-1083

1437.

66

-6695

7886.

36

-8822

3945.

70

-8822

3945.

70

1 Common

shares invested

by owners

-320

9749

7.00

-1083

1437.

66

-6695

7886.

36

-8822

3945.

70

-8822

3945.

70

2. Capital

contributed by

other equity

instrument

holders

3. Amount of

shares paid and

accounted as

owners' equity

4. Others

(3) Profit

allotment

10576

3735.

27

-3304

40573

.07

-2246

76837

.80

-2246

76837

.80

1. Provision of

surplus reserves

10576

3735.

27

-1057

63735

.27

2. Common risk

provision

3. Distribution

to owners (or

shareholders)

-2246

76837

.80

-2246

76837

.80

-2246

76837

.80

4. Others

(4) Internal

transferring of

owners’ equity

1. Capitalizing

of capital

reserves (or

share capital)

2. Capitalizing

of surplus

reserves (or

share capital)

3. Surplus

reserves used to

cover losses

4. Retained gain

transferred due

to change in set

benefit program

5. Other

miscellaneous

income

6. Others

(5) Special

reserves

1. Provided this

year

2. Used this

period

(6) Others

49419

588.0

3

49419

588.0

3

4. Balance at

the end of this

period

1123

384

189.0

0

1454

191.59

-4754

09.25

15980

5930.

34

3898

62617

7.99

5182

79507

9.67

48410

009.6

0

5231

20508

9.27

Amount of the Previous Term

In RMB

Item

2018

Owners' Equity Attributable to the Parent Company

Minor

shareho

lders’

equity

Total of

owners’

equity

Share

capita

l

Other equity tools

Capital

reserve

s

Less:

Shares

in

stock

Other

miscell

aneous

incom

e

Specia

l

reserve

s

Surplu

s

reserve

s

Comm

on risk

provisi

ons

Retain

ed

profit

Others

Subtot

al

Prefe

rred

share

Perp

etual

bond

Other

s

1. Balance at

the end of last

year

1183

642

254.0

0

72829

484.9

6

8585

847.99

11069

0396.

65

1863

19121

8.58

3238

93920

2.18

32389

39202.

18

Plus:

Changes in

accounting

policies

Correction of

previous errors

Consolidation

of entities

under common

control

Others

2. Balance at

the beginning

of current year

1183

642

254.0

0

72829

484.9

6

8585

847.99

11069

0396.

65

1863

19121

8.58

3238

93920

2.18

32389

39202.

18

3. Change

amount in the

current period

(―-― for

decrease)

-281

6056

8.00

-7137

5293.

37

10831

437.6

6

-1203

760.40

9784

824.75

2058

03465

4.38

1956

24841

9.70

19562

48419.

70

(1) Total of

misc. incomes

-1203

760.40

2246

16457

1.68

2244

96081

1.28

22449

60811.

28

(2) Investment

or decreasing

of capital by

owners

-281

6056

8.00

-7137

5293.

37

10831

437.6

6

-7987

54.45

-1111

66053

.48

-11116

6053.4

8

1. Common

shares invested

by owners

-281

6056

8.00

-7137

5293.

37

10831

437.6

6

-7987

54.45

-1111

66053

.48

-11116

6053.4

8

2. Capital

contributed by

other equity

instrument

holders

3. Amount of

shares paid and

accounted as

owners' equity

4. Others

(3) Profit

allotment

10583

579.2

0

-1881

29917

.30

-1775

46338

.10

-17754

6338.1

0

1. Provision of

surplus reserves

10583

579.2

0

-1058

3579.

20

2. Common

risk provision

3. Distribution

to owners (or

shareholders)

-1775

46338

.10

-1775

46338

.10

-17754

6338.1

0

4. Others

(4) Internal

transferring of

owners’ equity

1. Capitalizing

of capital

reserves (or

share capital)

2. Capitalizing

of surplus

reserves (or

share capital)

3. Surplus

reserves used to

cover losses

4. Retained

gain transferred

due to change

in set benefit

program

5. Other

miscellaneous

income

6. Others

(5) Special

reserves

1. Provided this

year

2. Used this

period

(6) Others

4. Balance at

the end of this

period

1155

481

686.0

0

1454

191.59

10831

437.6

6

7382

087.59

12047

5221.

40

3921

22587

2.96

5195

18762

1.88

51951

87621.

88

8. Statement of Change in Owners’ Equity (Parent Company)

Amount of the Current Term

In RMB

Item

2019

Share Other equity tools Capital Less: Other Special Surplus Retaine Others Total of

capital Preferr

ed

share

Perpet

ual

bond

Others

reserves Shares in

stock

miscella

neous

income

reserves reserves d profit owners’

equity

1. Balance at the

end of last year

11554

81686.

00

360835.

52

108314

37.66

875655

3.46

120475

221.40

50408

1999.0

0

1778324

857.72

Plus:

Changes in

accounting

policies

-51664

25.58

524860.

03

47237

40.20

82174.65

Correction of

previous errors

Others

2. Balance at the

beginning of

current year

11554

81686.

00

360835.

52

108314

37.66

359012

7.88

121000

081.43

50880

5739.2

0

1778407

032.37

3. Change

amount in the

current period

(―-― for

decrease)

-32097

497.00

-10831

437.66

-23024

98.50

388058

48.91

72719

6779.5

9

7424340

70.66

(1) Total of misc.

incomes

-23024

98.50

10576

37352.

66

1055334

854.16

(2) Investment or

decreasing of

capital by

owners

-32097

497.00

-10831

437.66

-66957

886.36

-8822394

5.70

1. Common

shares invested

by owners

-32097

497.00

-10831

437.66

-66957

886.36

-8822394

5.70

2. Capital

contributed by

other equity

instrument

holders

3. Amount of

shares paid and

accounted as

owners' equity

4. Others

(3) Profit

allotment

105763

735.27

-33044

0573.0

7

-2246768

37.80

1. Provision of

surplus reserves

105763

735.27

-10576

3735.2

7

2. Distribution to

owners (or

shareholders)

-22467

6837.8

0

-2246768

37.80

3. Others

(4) Internal

transferring of

owners’ equity

1. Capitalizing

of capital

reserves (or

share capital)

2. Capitalizing

of surplus

reserves (or

share capital)

3. Surplus

reserves used to

cover losses

4. Retained gain

transferred due

to change in set

benefit program

5. Other

miscellaneous

income

6. Others

(5) Special

reserves

1. Provided this

year

2. Used this

period

(6) Others

4. Balance at the

end of this

period

11233

84189.

00

360835.

52

128762

9.38

159805

930.34

12360

02518.

79

2520841

103.03

Amount of the Previous Term

In RMB

Item

2018

Share

capital

Other equity tools

Capital

reserves

Less:

Shares

in stock

Other

miscella

neous

income

Special

reserves

Surplus

reserves

Retained

profit

Others

Total of

owners’

equity

Preferr

ed

share

Perpet

ual

bond

Others

1. Balance at

the end of last

year

1183

64225

4.00

71736

128.89

87565

53.46

110690

396.65

5863761

24.33

19612014

57.33

Plus:

Changes in

accounting

policies

Correction of

previous errors

Others

2. Balance at

the beginning

of current year

1183

64225

4.00

71736

128.89

87565

53.46

110690

396.65

5863761

24.33

19612014

57.33

3. Change

amount in the

current period

(―-― for

decrease)

-2816

0568.

00

-71375

293.37

108314

37.66

97848

24.75

-822941

25.33

-18287659

9.61

(1) Total of

misc. incomes

1058357

91.97

10583579

1.97

(2) Investment

or decreasing of

capital by

owners

-2816

0568.

00

-71375

293.37

108314

37.66

-79875

4.45

-11116605

3.48

1. Common

shares invested

by owners

-2816

0568.

00

-71375

293.37

108314

37.66

-79875

4.45

-11116605

3.48

2. Capital

contributed by

other equity

instrument

holders

3. Amount of

shares paid and

accounted as

owners' equity

4. Others

(3) Profit

allotment

10583

579.20

-188129

917.30

-17754633

8.10

1. Provision of

surplus reserves

10583

579.20

-105835

79.20

2. Distribution

to owners (or

shareholders)

-177546

338.10

-17754633

8.10

3. Others

(4) Internal

transferring of

owners’ equity

1. Capitalizing

of capital

reserves (or

share capital)

2. Capitalizing

of surplus

reserves (or

share capital)

3. Surplus

reserves used to

cover losses

4. Retained gain

transferred due

to change in set

benefit program

5. Other

miscellaneous

income

6. Others

(5) Special

reserves

1. Provided this

year

2. Used this

period

(6) Others

4. Balance at

the end of this

period

1155

48168

6.00

360835

.52

108314

37.66

87565

53.46

120475

221.40

5040819

99.00

17783248

57.72

III. General Information

1. About the Company

China Fangda Group Co. Ltd. (hereinafter referred to as "the Company") was approved in October 1995 by the General Office

of the Shenzhen Municipal People's Government with the letter of Shenfu Office (1995) No. 194 in the original "Shenzhen Fangda

Building Materials Co. Ltd." on the basis of the establishment of the fundraising method. The unified social credit code is:

91440300192448589C; registered address: Fangda Technology Building Keji South 12th Road South District High-tech

Industrial Park Nanshan District Shenzhen. Mr. Xiong Jianming is the legal representative.The Company issued foreign currency shares (B shares) and local currency shares (A shares) and listed in November 1995 and

April 1996 respectively in Shenzhen Stock Exchange. The Company received the Reply to the Non-public Share Issuance of Fangda

China Group Co. Ltd. (CSRC License [2016] No.825) to allow the Company to conduct non-public issuance of 32184931 A-shares

in June 20116. According to the 2016 Annual Profit Allocation Scheme which was approved by the 2016 Annual Shareholders'

Congress the Company has a total share capital of 789 094 836 shares as the basis and a capital reserve fund of 5 shares per 10

shares to all shareholders. The registered capital was RMB 11836425#*@$ at the end of 2017 28160 568.00 shares were

repurchased and cancelled in August 2018 and 32 097 497.00 shares were repurchased and cancelled in January 2019. The existing

registered capital was RMB 1123384 189.00.The Company has established a corporate governance structure that comprises shareholders’ meeting board of directors and

supervisory committee. Currently the Company sets up the President Office Administrative Department HR Department Enterprise

Management Department Financial Department Audit and Supervisory Department Securities Department Technology Innovation

Department and IT Department and has established subsidiaries including Fangda Decoration Fangda Chuangzhi Fangda New

Material Fangda Property and Fangda New Energy.The business nature and main business operations of the Company and subsidiaries (―the Group‖) include (1) production and

sales of curtain wall materials design production and installation of construction curtain walls; (2) assembly and production of

subway screen doors; (3) development and operation of real estate projects on land of which rights have been obtained lawfully; (4)

R&D installation and sales of PV devices design and installation of PV power plants.

Date of financial statement approval: This financial statement is approved by the Board of Directors of the Company on April

16 2020.

2. Consolidation Scope and Change

This part of the simplified disclosure is as follows: The Company in the current period includes a total of 25 subsidiaries of

which 4 have been added this year and 2 have been reduced this year. For details please refer to "Note 6 Change of the scope of

merger" and "Note 7 Rights and Interests in Other Subjects".IV. Basis for the preparation of financial statements

1. Preparation basis

The Company prepares the financial statements based on continuous operation and according to actual transactions and events

with figures confirmed and measured in compliance with the Accounting Standards for Business Enterprises and other specific

account standards application guide and interpretations. The Company has also disclosed related financial information according to

the requirement of the Regulations of Information Disclosure No.15 – General Provisions for Financial Statements (Revised in 2014)

issued by the CSRC.

2. Continuous operation

The Company assessed the continuing operations capability of the Company for the 12 months from the end of the reporting

period. No matters were found that would affect the Company's ability to continue as a going concern. It is reasonable for the

Company to prepare financial statements based on continuing operations.

V. Significant Account Policies and Estimates

Specific accounting policy and estimate prompt:

The following major accounting policies and accounting estimates shall be formulated in accordance with the accounting standards

of the enterprise. Unmentioned operations are carried out in accordance with the relevant accounting policies in the enterprise

accounting standards.

1. Statement of compliance to the Enterprise Accounting Standard

These financial statements meet the requirements of the Accounting Standards for Business Enterprises and truly and fully

reflect the Company’s financial status performance result changes in shareholders’ equity and cash flows.

2. Fiscal Period

The Company's fiscal year starts on January 1 and ends on December 31 of the Gregorian calendar.

3. Operation period

Our normal business cycle is one year

4. Bookkeeping standard money

The Company's bookkeeping standard currency is Renminbi and overseas subsidiaries are based on the currency of the main

economic environment in which they operate.

5. Accounting treatment of the entities under common and different control

(1) Consolidation of entities under common control

The assets and liabilities acquired by the Company in a business combination are measured at the book value of the combined

party in the consolidated financial statements of the ultimate controlling party on the date of combination. Among them if the

accounting policy adopted by the merger party is different from that adopted by the Company before the merger the accounting

policy is unified based on the principle of importance that is the book value of the assets and liabilities of the merger party is

adjusted according to the accounting policy of the Company. If there is a difference between the book value of the net assets obtained

by the Company in the merger and the book value of the consideration paid by the Company if the balance of the capital reserve

(capital premium or share capital premium) and the capital reserve (capital premium or share capital premium) is not offset enough

the surplus reserve and undistributed profits shall be offset in turn.The accounting treatment method of enterprise merger under the same control through step-by-step transaction is given in

notes 3 and 6 (6).

(2) Consolidation of entities under different control

All identifiable assets and liabilities acquired by the Company during the merger shall be measured at its fair value on the date

of purchase. Among them if the accounting policy adopted by the merger party is different from that adopted by the Company before

the merger the accounting policy is unified based on the principle of importance that is the book value of the assets and liabilities of

the merger party is adjusted according to the accounting policy of the Company. The merger cost of the Company on the date of

purchase is greater than the fair value of the assets and liabilities recognized by the purchaser in the merger and is recognized as

goodwill. If the merger cost is less than the difference between the identifiable assets and the fair value of the liabilities obtained by

the purchaser in the enterprise merger the merger cost and the fair value of the identifiable assets and the liabilities obtained by the

purchaser in the enterprise merger are reviewed and the merger cost is still less than the fair value of the identifiable assets and

liabilities obtained by the purchaser after the review the difference is considered as the profit and loss of the current period of the

merger.The accounting treatment method of enterprise merger under different control through step-by-step transaction is given in

notes 3 and 6 (6).

(3) Treatment of related transaction fee in enterprise merger

Agency expenses and other administrative expenses such as auditing legal consulting or appraisal services occurred relating

to the merger of entities are accounted into current income account when occurred. The transaction fees of equity certificates or

liability certificates issued by the purchaser for payment for the acquisition are accounted at the initial amount of the certificates.

6. Preparation of Consolidated Financial Statements

(1) Determination of consolidation scope

The consolidated scope of the consolidated financial statements is determined on a control basis and includes not only

subsidiaries determined on the basis of voting rights (or similar voting rights) themselves or in conjunction with other arrangements

but also structured subjects determined on the basis of one or more contractual arrangements.

Control means the power possessed by the Company on invested entities to share variable returns by participating in related

activities of the invested entities and to impact the amount of the returns by using the power. The subsidiary company is the subject

controlled by the Company (including the enterprise the divisible part of the invested unit and the structured subject controlled by

the enterprise etc.). The structured subject is the subject which is not designed to determine the controlling party by taking the voting

right or similar right as the decisive factor.

(2) Preparation of Consolidated Financial Statements

The Company prepares consolidated financial statements based on the financial statements of itself and its subsidiaries and

based on other relevant information.The Company compiles consolidated financial statements regards the whole enterprise group as an accounting entity reflects

the overall financial status operating results and cash flow of the enterprise group according to the confirmation measurement and

presentation requirements of the relevant enterprise accounting standards and the unified accounting policy and accounting period.① Merge the assets liabilities owner's rights and interests income expenses and cash flow of parent company and

subsidiary company.

(2) Offset the long-term equity investment of the parent company to the subsidiary company and the share of the parent

company in the ownership rights of the subsidiary company.③ Offset the influence of internal transaction between parent company subsidiary company and subsidiary company. Where

an internal transaction indicates a loss of impairment of the relevant assets the loss shall be fully recognized.④ adjust the special transaction from the angle of enterprise group.

（3） Processing of subsidiaries during the reporting period

(1) Increase subsidiary or business

A. Subsidiary or business increased by business combination under the same control

(A) When preparing the consolidated balance sheet adjust the opening number of the consolidated balance sheet and adjust

the related items of the comparative statement. The same report entity as the consolidated balance sheet will exist from the time of

the final control party.

(B) During the preparation of the consolidated profit statement the revenue expense and profit from the current period to the

end of the reporting period will be included in the consolidated profit statement. At the same time the related items of the

comparative statement will be adjusted. The same as the consolidated report entity will always exist since the time when the final

control party starts to control it.

(C) When preparing the consolidated cash flow statement the cash flows of the subsidiary and the business combination from

the beginning of the current period to the end of the reporting period are included in the consolidated cash flow statement and the

related items of the comparative statement are adjusted which is regarded as the combined report body since the final The controller

has been there since the beginning of control.

B. Subsidiaries or businesses added by business combinations not under the same control

(A) When preparing the consolidated balance sheet the opening number of the consolidated balance sheet is not adjusted.

(B) When preparing the consolidated profit statement include the income expenses and profits of the subsidiary company and

the business purchase date to the end of the reporting period in the consolidated profit statement.

(C) When preparing the consolidated cash flow statement the cash flow from the purchase date of the subsidiary to the end of

the reporting period is included in the consolidated cash flow statement.

② Disposal of subsidiaries or business

(A) When preparing the consolidated balance sheet the opening number of the consolidated balance sheet is not adjusted.

B. When preparing the consolidated profit statement the income expense and profit of the subsidiary company and the

business opening and disposal date shall be included in the consolidated profit statement.

C. When preparing the consolidated cash flow statement the cash flow of the subsidiary and the business opening to disposal

date will be included in the consolidated cash flow statement.

(4) Special considerations in consolidation offsets

① The long-term equity investment held by a subsidiary company shall be regarded as the inventory shares of the Company

as a subtraction of the owner's rights and interests which shall be listed under the item of "subtraction: Stock shares" under the item

of owner's rights and interests in the consolidated balance sheet.The long-term equity investments held by the subsidiaries are offset by the shares of the shareholders of the subsidiaries.② The "special reserve" and "general risk preparation" projects because they are neither real capital (or share capital) nor

capital reserve but also different from the retained income and undistributed profits are restored according to the ownership of the

parent company after the long-term equity investment is offset by the ownership rights and interests of the subsidiary company.③ If there is a temporary difference between the book value of assets and liabilities in the consolidated balance sheet and the

taxable basis of the taxpayer due to the offset of the unrealized internal sales gain or loss the deferred income tax asset or the

deferred income tax liability is confirmed in the consolidated balance sheet and the income tax expense in the consolidated profit

statement is adjusted with the exception of the deferred income tax related to the transaction or event directly included in the owner's

equity and the merger of the enterprise.

(4) The unrealized internal transaction gains and losses incurred by the Company in selling assets to its subsidiaries shall be

offset in full by "net profits attributable to the owner of the parent company". The unrealized internal transaction gains and losses

incurred by a subsidiary company in selling its assets to the Company shall be offset between "net profits vested in the owner of the

parent company" and "minority shareholders' gains and losses" according to the proportion of the Company's distribution to the

subsidiary company. The unrealized internal transaction gains and losses incurred in the sale of assets between subsidiaries shall be

offset between "net profits vested in the owners of the parent company" and "minority shareholders' gains and losses" according to

the proportion of the Company's distribution to the sellers' subsidiaries.⑤ If the current loss shared by the minority shareholders of the subsidiary exceeds the share of the minority shareholders in

the owner ’s equity of the subsidiary at the beginning of the period the balance should still be offset against the minority

shareholders ’equity.

(5) Accounting treatment of special transactions

① Purchase minority shareholders' equity

The Company purchases the shares of the subsidiaries owned by the minority shareholders of the subsidiaries. In the

individual financial statements the investment costs of the newly acquired long-term investments of the minority shares shall be

measured at the fair value of the price paid. In the consolidated financial statements the difference between the newly acquired

long-term equity investment due to the purchase of minority equity and the share of net assets that should be continuously calculated

by the subsidiary since the purchase date or the merger date should be adjusted according to the new shareholding ratio. The product

(capital premium or equity premium) if the capital reserve is insufficient to offset the surplus reserve and undistributed profits are

offset in turn.② Step-by-step acquisition of control of the subsidiary through multiple transactions

A. Enterprise merger under common control through multiple transactions

On the date of the merger the Company determines the initial investment cost of the long-term equity investment in the

individual financial statements based on the share of the subsidiary ’s net assets that should be enjoyed after the merger in the final

controller ’s consolidated financial statements; the initial investment cost and the The difference between the book value of the

long-term equity investment before the merger plus the book value of the consideration paid for new shares acquired on the merger

date the capital reserve (capital premium or equity premium) is adjusted and the capital reserve (capital premium or equity premium)

is insufficient to offset Reduced in turn offset the surplus reserve and undistributed profits.In consolidated financial statements assets and liabilities obtained by the merging party from the merged party should be

measured at the book value in the final controlling party’s consolidated financial statements other than the adjustment made due to

differences in accounting policies; adjust the capital surplus (share premium) according to the difference between the initial

investment cost and the book value of the held investment before merger plus the book value of the consideration paid on the merger

date. Where the capital surplus falls short the retained income should be adjusted.If the merging party holds the equity investment before acquiring the control of the merged party and is accounted for

according to the equity method the date of acquiring the original equity and the merging party and the merged party are in the same

party's final control from the later date to the merger date The relevant gains and losses other comprehensive income and other

changes in owner's equity have been confirmed between them and the retained earnings at the beginning of the comparative

statement period should be offset separately.

B. Enterprise merger not under common control through multiple transactions

On the merger day in individual financial statements the initial investment cost of the long-term equity investment on the

merger day is based on the book value of the long-term equity investment previously held plus the sum of the additional investment

costs on the merger day.In the consolidated financial statements the equity of the purchaser held prior to the date of purchase is revalued according to

the fair value of the equity at the date of purchase and the difference between the fair value and its book value is credited to the

current investment income; If the shares held by the purchaser prior to the date of purchase involve other consolidated gains under

the equity law accounting the other consolidated gains related thereto shall be converted to the current gains on the date of purchase

with the exception of the other consolidated gains arising from the remeasurement of the net assets or net liabilities of the merged

party. The Company disclosed in the notes the fair value of the equity of the purchased party held before the purchase date and the

amount of related gains or losses remeasured according to the fair value.

(3) The Company disposes of long-term equity investment in subsidiaries without losing control

The parent company partially disposes of the long-term equity investment in the subsidiary company without losing control. In

the consolidated financial statements the disposal price corresponds to the disposal of the long-term equity investment. The

difference between the shares is adjusted for the capital reserve (capital premium or equity premium). If the capital reserve is

insufficient to offset the retained earnings are adjusted.

④ The Company disposes of long-term equity investment in subsidiaries and loses control

A. One transaction disposition

If the Company loses control over the Invested Party due to the disposal of part of the equity investment it shall remeasure the

remaining equity according to its fair value at the date of loss of control when compiling the consolidated financial statement. The

sum of the consideration obtained from the disposal of equity and the fair value of the remaining equity minus the difference between

the share of the original subsidiary 's net assets that should be continuously calculated from the purchase date or the merger date

calculated as the loss of control The investment income of the current period.Other comprehensive income and other owner's equity changes related to the equity investment of the atomic company are

transferred to the current profit and loss when the control is lost except for other comprehensive income arising from the

remeasurement of the net benefits or net assets of the defined benefit plan by the investee. .

B. Multi-transaction step-by-step disposition

In consolidated financial statements you should first determine whether a step-by-step transaction is a "blanket transaction".If the step-by-step transaction is not a "blanket transaction" in individual financial statements for each transaction before the

loss of subsidiary control carry forward the book value of the long-term equity investment corresponding to each disposition share

and the difference between the obtained price and the book value of the disposition long-term equity investment is included in the

current investment income. In the consolidated financial statements it shall be handled in accordance with the relevant provisions of

"The parent company disposes of the long-term equity investment in the subsidiary without losing control".If a step-by-step transaction belongs to a "blanket transaction" the transaction shall be treated as a transaction that disposes of

the subsidiary and loses control; In individual financial statements the difference between each disposal price before the loss of

control and the book value of the long-term equity investment corresponding to the equity being disposed of is first recognized as

other consolidated gains and then converted to the current loss of control at the time of the loss of control; In the consolidated

financial statements for each transaction prior to the loss of control the difference between the disposition of the price and the

disposition of the investment corresponding to the share in the net assets of the subsidiary shall be recognized as other consolidated

gains and shall at the time of the loss of control be transferred to the loss of control for the current period.Where the terms conditions and economic impact of each transaction meet one or more of the following conditions usually

multiple transactions are treated as a "package deal":

(a) These transactions were concluded at the same time or in consideration of mutual influence.(b) These transactions can only achieve the business result as a whole;

(c) The effectiveness of one transaction depends the occurrence of at least another transaction;

(d) A single transaction is not economic and is economic when considered together with other transactions.

(5) Proportion of minority shareholders in factor companies who increase capital and dilute ownership of parent companies

Other shareholders (minority shareholders) of the subsidiary increase the capital of the subsidiary thus diluting the share ratio

of the parent to the subsidiary. In the consolidated financial statements the share of the parent company in the net book assets of the

former subsidiary of the capital increase is calculated according to the share ratio of the parent company before the capital increase

the difference between the share and the net book assets of the latter subsidiary after the capital increase is calculated according to the

share ratio of the parent company the capital reserve (capital premium or capital premium) the capital reserve (capital premium or

capital premium) is not offset and the retained income is adjusted.

7. Classification of JV arrangements and accounting method

None

8. Recognition of cash and cash equivalents

Cash refers to cash in stock and deposits that can be used for payment at any time. Cash equivalents refer to investments with a

short holding period (generally referring to expiry within three months from the date of purchase) strong liquidity easy to convert to

a known amount of cash and little risk of value change.

9. Foreign exchange business and foreign exchange statement translation

(1) Methods for determining conversion rates in foreign currency transactions

When the Company's foreign currency transactions are initially confirmed they will be converted into the bookkeeping

standard currency at the spot exchange rate on the transaction date.

(2) Methods of conversion of foreign currency currency currency items on balance sheet days

At the balance sheet date foreign currency items are translated on the spot exchange rate of the balance sheet date. The

exchange differences caused by the difference in exchange rates on the balance sheet date and initial recognizing date or previous

balance sheet date are included in the current profits and losses. Non-monetary items accounted in foreign currency and on historical

costs are exchanged with the spot exchange rate on the transaction date. Non-monetary items accounted in foreign currency and on

fair value are exchanged with the spot exchange rate on the determination date of the fair value. The exchange difference between the

accounting standard-currency amount and the original accounting standard-currency amount are included in the current profits and

losses.

(3) Foreign currency statement conversion method

Prior to the conversion of the financial statements of an enterprise's overseas operations the accounting period and policy of

the overseas operations should be adjusted to conform to the accounting period and policy of the enterprise. The financial statements

of the corresponding currency (other than the functional currency) should be prepared according to the adjusted accounting policy

and the accounting period. The financial statements of the overseas operations should be converted according to the following

methods:

① The assets and liabilities items in the balance sheet are translated at the spot exchange rate on the balance sheet date.

Except for the "undistributed profits" items the owner's equity items are translated at the spot exchange rate when they occur.

② The income and expense items in the profit statement are converted at the spot exchange rate on the transaction date or the

approximate exchange rate of the spot exchange rate.③ The foreign currency cash flow and the foreign subsidiary's cash flow are converted using the immediate exchange rate or

the approximate exchange rate at the date of the cash flow. The impact of exchange rate changes on cash should be used as an

adjustment item and presented separately in the cash flow statement.

④ During the preparation of the consolidated financial statements the resulting foreign currency financial statement

conversion variance is presented separately under the owner's equity item in the consolidated balance sheet.When foreign operations are disposed of and the control rights are lost the difference in foreign currency statements related to

the overseas operations that are listed in the shareholders' equity items in the balance sheet is transferred to the profit or loss for the

current period either in whole or in proportion to the disposal of the foreign operations.

10. Financial instrument

As of 1 January 2019

Financial instrument refers to a company’s financial assets and contracts that form other units of financial liabilities or equity

instruments.

(1) Recognition and de-recognition of financial instrument

The Company recognizes a financial asset or liability when it becomes one party in the financial instrument contract.

Financial asset is derecognized when:

① The contractual right to receive the cash flows of the financial assets is terminated;

② The financial asset is transferred and meets the following derecognition condition.If the current obligation of a financial liability (or part of it) has been discharged the Company derecognises the financial

liability (or part of the financial liability). When the Company (borrower) and lender enter into an agreement to replace the original

financial liabilities by undertaking new financial liabilities and the contract terms for the new financial liabilities are essentially

different from those for the original one the original financial liabilities will be derecognized and new financial liabilities will be

recognized. Where the Company makes substantial amendments to the contract terms of the original financial liability (or part

thereof) it shall terminate the original financial liability and confirm a new financial liability in accordance with the amended terms.

Financial asset transactions in regular ways are recognized and de-recognized on the transaction date. The conventional sale of

financial assets means the delivery of financial assets in accordance with the contractual terms and conditions at the time set out in

the regulations or market practices. Trading date refers to the date on which the Company undertakes to buy or sell financial assets.

(2) Classification and subsequent measurement of financial assets

At initial recognition the Company classifies financial assets into the following three categories based on the business model

of managing financial assets and the contractual cash flow characteristics of financial assets: financial assets measured at amortized

cost are measured at fair value and their changes are included in other financial assets with current profit and loss and financial assets

measured at fair value through profit or loss. Unless the Company changes the business model for managing financial assets in this

case all affected financial assets are reclassified on the first day of the first reporting period after the business model changes

otherwise the financial assets may not be initially confirmed.

Financial assets are measured at the fair value at the initial recognition. For financial assets measured at fair value with

variations accounted into current income account related transaction expenses are accounted into the current income. For other

financial assets the related transaction expenses are accounted into the initial recognized amounts. Bills receivable and accounts

receivable arising from the sale of commodities or the provision of labor services that do not contain or do not consider significant

financing components the Company performs initial measurement according to the transaction price defined by the income standard.The subsequent measurement of financial assets depends on their classification:

① Financial assets measured at amortized cost

Financial assets that meet the following conditions at the same time are classified as financial assets measured at amortized

cost: The Company ’s business model for managing this financial asset is to collect contractual cash flows as its goal; the contract

terms of the financial asset stipulate that Cash flow is only the payment of principal and interest based on the outstanding principal

amount. For such financial assets the actual interest rate method is used for subsequent measurement according to the amortized cost.The gains or losses arising from the termination of recognition amortization or impairment based on the actual interest rate method

are included in the current profit and loss.

② Financial assets measured at fair value and whose changes are included in other comprehensive income

Financial assets that meet the following conditions at the same time are classified as financial assets measured at fair value and

their changes are included in other comprehensive income: The Company's business model for managing this financial asset is to

both target the collection of contractual cash flows and the sale of financial assets. Objective; The contractual terms of the financial

asset stipulate that the cash flow generated on a specific date is only for the payment of principal and interest based on the

outstanding principal amount. For such financial assets fair value is used for subsequent measurement. Except for impairment losses

or gains and exchange gains and losses recognized as current gains and losses changes in the fair value of such financial assets are

recognized as other comprehensive income. Until the financial asset is derecognized its accumulated gains or losses are transferred

to current gains and losses. However the relevant interest income of the financial asset calculated by the actual interest rate method is

included in the current profit and loss.The Company irrevocably chooses to designate a portion of non-tradable equity instrument investment as a financial asset

measured at fair value and whose variation is included in other consolidated income. Only the relevant dividend income is included

in the current profit and loss and the variation of fair value is recognized as other consolidated income.

③ Financial assets measured at fair value with variations accounted into current income account

The above financial assets measured at amortized cost and other financial assets measured at fair value and whose changes are

included in other comprehensive income are classified as financial assets measured at fair value and whose changes are included in

the current profit and loss. For such financial assets fair value is used for subsequent measurement and all changes in fair value are

included in current profit and loss.

(3) Classification and measurement of financial liabilities

The Company classifies financial liabilities into financial liabilities measured at fair value and their changes included in the

current profit and loss loan commitments and financial guarantee contract liabilities for loans below market interest rates and

financial liabilities measured at amortized cost.The subsequent measurement of financial liabilities depends on their classification:

① Financial liabilities measured at fair value with variations accounted into current income account

Such financial liabilities include transactional financial liabilities (including derivatives that are financial liabilities) and

financial liabilities designated as at fair value through profit or loss. After the initial recognition the financial liabilities are

subsequently measured at fair value. Except for the hedge accounting the gains or losses (including interest expenses) are recognized

in profit or loss. However for the financial liabilities designated as fair value and whose variations are included in the profits and

losses of the current period the variable amount of the fair value of the financial liability due to the variation of credit risk of the

financial liability shall be included in the other consolidated income. When the financial liability is terminated the cumulative gains

and losses previously included in the other consolidated income shall be transferred out of the other consolidated income and shall be

included in the retained income.② Loan commitments and financial security contractual liabilities

The Loan Commitment is a commitment made by the Company to the Client during the period of commitment to the Client

under the terms of the Contract. The loan undertakes to depreciate the loss in accordance with the expected credit loss model.

Financial Guarantee Contract means a contract in which the Company is required to indemnify the lost contract holder for a

specified amount when the specific debtor cannot pay the debt in accordance with the original or modified terms of the debt

instrument. The financial security contractual liabilities are subsequently measured on the basis of the reserve amount for loss

determined on the basis of the impairment principle of the financial instrument and the balance of the initial recognition amount after

deducting the accumulated amortization amount determined on the basis of the revenue recognition principle.

③ Financial liabilities measured at amortized cost

After initial recognition other financial liabilities are measured at amortized cost using the effective interest method.

Except in special circumstances financial liabilities and equity instruments are distinguished according to the following

principles:

① If the Company cannot unconditionally avoid delivering cash or other financial assets to fulfill a contractual obligation the

contractual obligation meets the definition of financial liability. While some financial instruments do not explicitly contain terms and

conditions for the delivery of cash or other financial assets they may indirectly form contractual obligations through other terms and

conditions.If a financial instrument is required to be settled with or can be settled with the Company's own equity instruments the

Company's own equity instrument used to settle the instrument needs to be considered as a substitute for cash or other financial assets

or for the holder of the instrument to enjoy the remaining equity in the assets after all liabilities are deducted. If it is the former the

instrument is the financial liabilities of the issuer; if it is the latter the instrument is the equity instrument of the issuer. In some cases

a financial instrument contract provides that the Company shall or may use its own instrument of interest in which the amount of a

contractual right or obligation is equal to the amount of the instrument of its own interest which may be acquired or delivered

multiplied by its fair value at the time of settlement whether the amount of the contractual right or obligation is fixed or is based

entirely or in part on a variation of a variable other than the market price of the instrument of its own interest such as the rate of

interest the price of a commodity or the price of a financial instrument the contract is classified as a financial liability.

(4) Derivative financial instruments and embedded derivatives

Derivative financial instruments are initially measured at the fair value of the day when the derivative transaction contract is

signed and are subsequently measured at their fair values. Derivative financial instruments with a positive fair value are recognized

as asset and instruments with a negative fair value are recognized as liabilities.The gains and losses arising from the change in fair value of derivatives are directly included in the profits and losses of the

current period except that the part of the cash flow that is valid in the hedge is included in the other consolidated income and

transferred out when the hedged item affects the gain and loss of the current period.

For a hybrid instrument containing an embedded derivative instrument if the principal contract is a financial asset the hybrid

instrument as a whole applies the relevant provisions of the financial asset classification. If the main contract is not a financial asset

and the hybrid instrument is not measured at fair value and its changes are included in the current profit and loss for accounting the

embedded derivative does not have a close relationship with the main contract in terms of economic characteristics and risks and it is

If the instruments with the same conditions and exist separately meet the definition of derivative instruments the embedded

derivative instruments are separated from the mixed instruments and treated as separate derivative financial instruments. If the fair

value of the embedded derivative on the acquisition date or the subsequent balance sheet date cannot be measured separately the

hybrid instrument as a whole is designated as a financial asset or financial liability measured at fair value and whose changes are

included in the current profit or loss.

(5) Impairment of financial instruments

The Company shall confirm the preparation for loss on the basis of expected credit loss for financial assets measured at

amortization costs creditor's rights investments measured at fair value contractual assets leasing receivables loan commitments and

financial guarantee contracts etc.

(1) Measurement of expected credit losses

The expected credit loss refers to the weighted average of the credit losses of financial instruments that are weighted by the

risk of default. Credit loss refers to the difference between all contractual cash flows receivable from the contract and all cash flows

expected to be received by the Company at the original actual interest rate that is the present value of all cash shortages. Among

them the financial assets which have been purchased or born by the Company shall be discounted according to the actual rate of

credit adjustment of the financial assets.The expected lifetime credit loss is the expected credit loss due to all possible default events during the entire expected life of

the financial instrument.

Expected credit losses in the next 12 months are expected to result from possible defaults in financial instruments within 12

months after the balance sheet date (or estimated duration of financial instruments if the expected duration is less than 12 months)

Credit losses are part of the expected lifetime credit loss.

On each balance sheet day the Company measures the expected credit losses of financial instruments at different stages.Where the credit risk has not increased significantly since the initial confirmation of the financial instrument it is in the first stage.The Company measures the preparation for loss according to the expected credit loss in the next 12 months. Where the credit risk has

increased significantly since the initial confirmation but the credit impairment has not occurred the financial instrument is in the

second stage. Where a credit impairment has occurred since the initial confirmation of the financial instrument it shall be in the third

stage and the Company shall prepare for measuring the expected credit loss of the whole survival period of the instrument.

For financial instruments with lower credit risk at the balance sheet date the Company assumes that its credit risk has not

increased significantly since the initial confirmation and measures the preparation for loss based on the expected credit loss over the

next 12 months.The Company calculates interest income for financial instruments in the first and second stages as well as for lower credit

risks based on the book balance and actual interest rate it does not deduct from impairment. Interest income is calculated on the basis

of the amortization costs and actual interest rates of the financial instruments in phase III after their book balance is reduced by the

accrued impairment.Regarding bills receivable accounts receivable and financing receivables regardless of whether there is a significant financing

component the Company measures the loss provision based on the expected credit losses throughout the duration.

A Accounts receivable

Where there is objective evidence of impairment as well as other receivable instruments receivables other receivables

receivables financing and long-term receivables applicable to individual assessments separate impairment tests are performed to

confirm expected credit losses and prepare individual impairment. Where there is no objective evidence of impairment such as bills

receivable accounts receivable other receivables financing of accounts receivable and long-term receivables or where a single

financial asset is unable to assess the expected credit loss at reasonable cost the Company divides the instruments receivable

accounts receivable other receivables financing of accounts receivable and long-term receivables into a number of combinations

based on the combination and determines the basis for the combination as follows:

The basis for determining the combination of notes receivable is as follows:

Notes Receivable Combination1 Commercial Acceptance Bill

Bill Receivable Combination2 Bank Acceptance Bill

For the bills receivable divided into a combination we calculate the expected credit loss through the risk exposure of default

and the expected credit loss rate of the whole survival period based on the historical credit loss experience the current situation and

the forecast of the future economic condition.The basis for determining the combination of accounts receivable is as follows:

Accounts receivable combination 1 Accounts receivable business

Accounts receivable combination 2 Associated party payments in the context of receivable consolidation

Accounts receivable combination 3 Real Estate receivable business

Accounts receivable combination 4 Others receivable business

For the accounts receivable divided into a combination the Company refers to the historical credit loss experience combined

with the current situation and the forecast of the future economic situation compiles the account receivable age and the whole

expected credit loss rate table and calculates the expected credit loss.The basis for determining the combination of other receivables is as follows:

Other receivable portfolio 1 Interest receivable

Portfolio of other receivables 2 Dividends receivable

Other combinations of receivables 3 Deposit and margin receivable

Other receivable portfolio 4 Receivable advances

Combination of other receivables 5 Value-added tax receivable is increased and refunded

Other receivable portfolio 6 Receivables from related parties within the scope of consolidation

Other receivables portfolio 7 Other receivables

For other receivables divided into portfolios the Company refers to historical credit loss experience combined with current

conditions and predictions of future economic conditions and calculates through default risk exposure and expected credit loss rate

within the next 12 months or the entire duration Expected credit losses.The basis for determining the combination of receivables financing is as follows:

Receivables financing portfolio 1 bank acceptance bill

For the receivable financing divided into portfolios the Company refers to the historical credit loss experience combined with

the current situation and the prediction of the future economic situation and calculates the expected credit loss through the default

risk exposure and the expected credit loss rate for the entire duration.

B Claims investments other claims investments

For creditor's rights investment and other creditor's rights investment the Company calculates the expected credit loss based

on the nature of the investment and the types of counterparty and risk exposure through the default risk exposure and the expected

credit loss rate over the next 12 months or the entire survival period.② Lower credit risk

If the risk of default on financial instruments is low the borrower’s ability to meet its contractual cash flow obligations in the

short term is strong and even if the economic situation and operating environment are adversely changed over a long period of time

it may not necessarily reduce the receivables' performance of their contractual cash. The ability of the flow obligation the financial

instrument is considered to have a lower credit risk.③ Significant increase in credit risk

The Company compares the default probability of the financial instrument during the expected lifetime determined by the

balance sheet date with the default probability of the expected lifetime during the initial confirmation to determine the relative

probability of the default probability of the financial instrument during the expected lifetime Changes to assess whether the credit

risk of financial instruments has increased significantly since initial recognition.In determining whether the credit risk has increased significantly since the initial recognition the Company considers

reasonable and evidenced information including forward-looking information that can be obtained without unnecessary additional

costs or effort. The information considered by the Company includes:

A. Significant changes in internal price indicators resulting from changes in credit risk;

B. A negative change in the operational financial or economic situation that is expected to lead to a significant change in the

debtor's ability to fulfil its obligations;

C. Whether there has been a significant change in actual or anticipated operating results of the debtor; (B) Whether there has

been a significant adverse change in the regulatory economic or technological environment in which the debtor is located;

D. Whether there has been a significant change in the guaranteed price value as a mortgage or in the quality of guarantee or

credit escalation provided by third parties. These changes are expected to reduce the economic motivation of the debtor to repay the

term specified in the contract or affect the probability of default;

E. Whether there is a significant change in the economic motivation that is expected to reduce the debtor's contractual period

of repayment;

F. Expected changes to a loan contract including exemptions or amendments to contractual obligations that are expected to

result from a breach of contract waiver periods interest rate leaps requests for additional collateral or guarantees or other changes to

the contractual framework of financial instruments;

G. Whether the debtor's expected performance and repayment behavior have changed significantly;

H. Whether contractual payments are overdue for more than 30 days.

Based on the nature of financial instruments the Company assesses whether credit risk has increased significantly on the basis

of a single financial instrument or combination of financial instruments. When conducting an assessment based on a combination of

financial instruments the Company can classify financial instruments based on common credit risk characteristics such as overdue

information and credit risk ratings.If the overdue period exceeds 30 days the Company has determined that the credit risk of financial instruments has increased

significantly. Unless the Company does not have to pay excessive costs or efforts to obtain reasonable and warranted information it

proves that although it has exceeded the time limit of 30 days agreed upon in the Contract credit risks have not increased

significantly since the initial confirmation.

④ Financial assets with credit impairment

The Company assesses on the balance sheet date whether financial assets measured at amortized cost and credit investments

measured at fair value and whose changes are included in other comprehensive income have undergone credit impairment. When one

or more events that adversely affect the expected future cash flows of a financial asset occur the financial asset becomes a financial

asset that has suffered a credit impairment. Evidence that credit impairment has occurred in financial assets includes the following

observable information:

Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by the debtor such as payment of

interest or default or overdue of principal; (B) The concession that the debtor would not make under any other circumstances for

economic or contractual considerations relating to the financial difficulties of the debtor; The debtor is likely to be bankrupt or

undertake other financial restructuring; The financial difficulties of the issuer or debtor lead to the disappearance of the active market

for the financial asset; To purchase or generate a financial asset at a substantial discount which reflects the fact that a credit loss has

occurred.

(5) Presentation of expected credit loss preparation

In order to reflect the changes in the credit risk of financial instruments since the initial recognition the Company re-measures

the expected credit losses on each balance sheet date and the increase or reversal of the loss provision resulting therefrom is included

as an impairment loss or gain. Current profit and loss. For financial assets measured at amortized cost the loss allowance offsets the

book value of the financial asset listed on the balance sheet; for debt investments measured at fair value and whose changes are

included in other comprehensive income the Company Recognition of its loss provisions in gains does not offset the book value of

the financial asset.

⑥ Canceled

If it is no longer reasonably expected that the contract cash flow of the financial assets will be fully or partially recovered the

book balance of the financial assets will be directly reduced. Such write-off constitute the derecognition of related financial assets.This usually occurs when the Company determines that the debtor has no assets or sources of income that generate sufficient cash

flow to cover the amount that will be written down.If the financial assets that have been written down are recovered in the future the reversal of the impairment loss is included in

the profit or loss of the current period.

(6) Transfer of financial assets

The transfer of financial assets refers to the following two situations:

A. Transfer the contractual right to receive cash flow of financial assets to another party;

B. Transfers the financial assets to the other party in whole or in part but reserves the contractual right to collect the cash flow

of the financial assets and undertakes the contractual obligation to pay the collected cash flow to one or more recipients.

(A) Termination of the recognition of transferred financial assets

Those who have transferred almost all risks and rewards in the ownership of financial assets to the transferee or have neither

transferred nor retained almost all the risks and rewards in the ownership of financial assets but have given up control of the

financial assets terminate the confirmation The financial asset.In determining whether control over the transferred financial asset has been waived the actual capacity of the transferor to sell

the financial asset is determined. Where the transferor is able to unilaterally sell the transferred financial asset to an unrelated third

party in its entirety and there is no additional condition to limit the sale the Company has waived control over the financial asset.The Company pays attention to the essence of financial asset transfer when judging whether financial asset transfer meets the

condition of financial asset termination.If the overall transfer of financial assets meets the conditions for termination confirmation the difference between the

following two amounts shall be included in the current profit and loss period:

A. book value of transferred financial assets;

B. The sum of the amount received as a result of the transfer and the amount accrued as a result of the change in the fair value

of the transfer in respect of the termination recognized portion of the amount previously charged directly to the other consolidated

proceeds (the financial assets involved in the transfer are those classified in accordance with Article 18 of Enterprise Accounting

Standard No. 22 - Financial Instruments Recognition and Measurement as measured by the fair value and whose change is charged to

the other consolidated proceeds).If the partial transfer of financial assets meets the conditions for termination of recognition the book value of the whole of the

transferred financial assets shall be apportioned between the termination of recognition and the non-termination of recognition (in

this case the reserved service assets shall be regarded as part of the continued recognition of financial assets) in accordance with the

respective relative fair values of the transfer date and the difference between the following two amounts shall be included in the

current profit and loss:

A. the book value of the termination confirmation portion at the termination confirmation date;

B. The sum of the valuation of the termination recognition portion and the amount of the termination recognition portion

corresponding to the amount accrued as a result of the variation in the fair value previously credited to other consolidated proceeds

(the financial assets involved in the transfer are those classified under Article 18 of the Accounting Standards for Enterprises No. 22 -

Financial Instruments Recognition and Measurement as measured by the fair value and whose variation is credited to other

consolidated proceeds).

(2) Continuing involvement in transferred financial assets

If neither transfer nor retain almost all the risks and rewards of the ownership of financial assets and have not given up control

of the financial assets the relevant financial assets should be confirmed according to the extent of their continued involvement in the

transferred financial assets and the relevant liabilities should be recognized accordingly.The extent to which the transferred financial assets continue to be involved refers to the extent to which the enterprise

undertakes the risk or compensation of the value change of the transferred financial assets.(III) Continuing identification of transferred financial assets

Where almost all risks and remuneration in relation to ownership of the transferred financial assets are retained the whole of

the transferred financial assets shall continue to be recognized and the consideration received shall be recognized as a financial

liability.The financial asset and the recognized related financial liabilities shall not offset each other. In the subsequent accounting

period the enterprise shall continue to recognize the income (or gain) generated by the financial asset and the costs (or losses)

incurred by the financial liability.

(7) Deduction of financial assets and liabilities

Financial assets and financial liabilities should be listed separately in the balance sheet and cannot be offset against each other.

However if the following conditions are met the net amount offset by each other is listed in the balance sheet:

The Company has a statutory right to offset the confirmed amount and such legal right is currently enforceable;

The Company plans to settle the net assets or realize the financial assets and liquidate the financial liabilities at the same time.The transferring party shall not offset the transferred financial assets and related liabilities if it does not meet the conditions for

terminating the recognition.

（8） Methods for determining the fair value of financial instruments

See Note III. 10 for the recognition of fair value of financial assets and liabilities.The following financial instruments accounting policies are applied in 2018 and earlier

(1) Measurement of financial assets

① Financial assets measured at fair value with variations accounted into current income account

These include transactional financial assets and financial assets directly designated as fair value and whose variations are

included in the current profits and losses the former mainly referring to the stocks bonds funds and derivatives investments held by

the Company for sale in the near future and not used as an effective hedging instrument. Such assets are initially measured as initial

recognized amounts based on their fair value at the time of acquisition and the associated transaction costs are included in the current

profit and loss at the time of occurrence. The payment contains declared but not yet issued cash dividends or interest on bonds paid

but not yet received which are separately recognized as receivable items. Interest or cash dividends earned during the holding period

are recognized as investment gains. On the balance sheet date the Company measured such financial assets at fair value and their

changes are included in the current profit and loss. At the time of disposition of such financial assets the difference between the fair

value of such assets and the initial credited amount is recognized as the return on investment and the change in the fair value is

adjusted.② Investment held until mature

Mainly refers to fixed due date fixed or determinable amount of recovered amount and the Company has clear intention and

ability to hold to maturity of the national debt corporate bonds etc. Such financial assets are initially recognized in terms of the sum

of fair value and related transaction costs at the time of acquisition. Interest on bonds that are due but have not yet been issued and

are included in the payment is separately recognized as receivable items. Interest income is recognized on the basis of amortization

costs and actual interest rates during the holding period for investments held to maturity and is included in the investment income.When disposing of an investment held to maturity the difference between the price obtained and the carrying value of the investment

is included in the investment income.③ Receivables

Receivables include receivable accounts other receivables and prepayment. Accounts receivable means the accounts

receivable resulting from the sale of goods or the provision of services. Accounts receivable are initially recognized at the contract or

agreement price receivable from the buyer.④ Sellable financial assets

Mainly refers to the Company's financial assets that are not classified as fair value through profit or loss held-to-maturity

investments loans and receivables. The sum of the fair value and related transaction costs of the financial assets available for sale

shall be the initial recognized amount. Interest on outstanding bonds or declared unpaid cash dividends included in the payment is

separately recognized as receivable items. Interest or cash dividends obtained during the holding of available-for-sale financial assets

are included in investment income.If the financial assets available for sale are of a foreign currency nature the exchange gains and losses resulting from such

assets shall be taken into account in the current period. Interest on investments in available debt instruments calculated using the

actual interest rate method is included in the current profit and loss; The cash dividends that can be invested in the instruments of sale

rights and interests shall be included in the current profit and loss period when the unit of investment declares that the dividend is

issued. On the balance sheet date available-for-sale financial assets are measured at fair value and their changes are included in

other comprehensive income. When disposing of a financial asset available for sale the difference between the price obtained and the

book value of the financial asset is included in the investment income; At the same time the amount corresponding to the disposal

part of the fair value change accrued from the original accrued amount of the owner's equity shall be transferred out into the

investment income.

(2) Classification of financial liabilities

① Financial liabilities measured at fair value and whose changes are included in the current profit and loss including

transactional financial liabilities and financial liabilities designated as measured at fair value and whose changes are included in the

current profit and loss; such financial liabilities are measured at fair value when they are initially recognized The relevant transaction

costs are directly included in the current profit and loss and the fair value changes are included in the current profit and loss on the

balance sheet date.②Other financial liabilities refer to financial liabilities that are measured at fair value and whose changes are included in the

current profit and loss.

(3) The distinction between financial liabilities and equity instruments

Except in special circumstances financial liabilities and equity instruments are distinguished according to the following

principles:

① If the Company cannot unconditionally avoid delivering cash or other financial assets to fulfill a contractual obligation the

contractual obligation meets the definition of financial liability. While some financial instruments do not explicitly contain terms and

conditions for the delivery of cash or other financial assets they may indirectly form contractual obligations through other terms and

conditions.If a financial instrument is required to be settled with or can be settled with the Company's own equity instruments the

Company's own equity instrument used to settle the instrument needs to be considered as a substitute for cash or other financial assets

or for the holder of the instrument to enjoy the remaining equity in the assets after all liabilities are deducted. If it is the former the

instrument is the financial liabilities of the issuer; if it is the latter the instrument is the equity instrument of the issuer. In some cases

a financial instrument contract provides that the Company shall or may use its own instrument of interest in which the amount of a

contractual right or obligation is equal to the amount of the instrument of its own interest which may be acquired or delivered

multiplied by its fair value at the time of settlement whether the amount of the contractual right or obligation is fixed or is based

entirely or in part on a variation of a variable other than the market price of the instrument of its own interest such as the rate of

interest the price of a commodity or the price of a financial instrument the contract is classified as a financial liability.

(4) Transfer of financial assets

The transfer of financial assets refers to the following two situations:

A. Transfer the contractual right to receive cash flow of financial assets to another party;

B. Transfers the financial assets to the other party in whole or in part but reserves the contractual right to collect the cash flow

of the financial assets and undertakes the contractual obligation to pay the collected cash flow to one or more recipients.

(A) Termination of the recognition of transferred financial assets

Those who have transferred almost all risks and rewards in the ownership of financial assets to the transferee or have neither

transferred nor retained almost all the risks and rewards in the ownership of financial assets but have given up control of the

financial assets terminate the confirmation The financial asset.In determining whether control over the transferred financial asset has been waived the actual capacity of the transferor to sell

the financial asset is determined. If the transferor is able to sell the transferred financial assets wholly to a third party that does not

have a relationship with them and has no additional conditions to limit the sale it indicates that the enterprise has waived control

over the financial assets.The Company pays attention to the essence of financial asset transfer when judging whether financial asset transfer meets the

condition of financial asset termination.If the overall transfer of financial assets meets the conditions for termination confirmation the difference between the

following two amounts shall be included in the current profit and loss period:

A. book value of transferred financial assets;

B. The sum of the consideration received as a result of the transfer and the amount accrued as a result of the change in the fair

value of the original direct accruing to the owner's interest (in cases where the transferred financial assets are available for sale).If the partial transfer of financial assets meets the conditions for termination of recognition the book value of the whole of the

transferred financial assets shall be apportioned between the termination of recognition and the non-termination of recognition (in

this case the retained service assets shall be considered as part of the non-termination of recognition of financial assets) in

accordance with their respective relative fair values and the difference between the following two amounts shall be included in the

current profit and loss:

A. Termination of the book value of the recognized portion;

B. The sum of the consideration of the termination recognition portion and the amount of the termination recognition portion

(the financial assets involved in the transfer are the circumstances in which the financial assets are available for sale) corresponding

to the fair value change accrued from the original direct incorporation of the owner's interest.

(2) Continuing involvement in transferred financial assets

If neither transfer nor retain almost all the risks and rewards of the ownership of financial assets and have not given up control

of the financial assets the relevant financial assets should be confirmed according to the extent of their continued involvement in the

transferred financial assets and the relevant liabilities should be recognized accordingly.The degree of continued involvement in the transferred financial assets refers to the level of risk that the financial asset value

exposes the Company to.(III) Continuing identification of transferred financial assets

Where almost all risks and remuneration in relation to ownership of the transferred financial assets are retained the whole of

the transferred financial assets shall continue to be recognized and the consideration received shall be recognized as a financial

liability.The financial asset and the recognized related financial liabilities shall not offset each other. In the subsequent accounting

period the enterprise shall continue to recognize the income generated by the financial asset and the costs incurred by the financial

liability. If the transferred financial assets are measured at amortized cost the recognized related liabilities shall not be designated as

financial liabilities measured at fair value and whose changes are included in the current profit and loss.

(5) De-recognition of financial liabilities

When partial or all of the current responsibilities attached to such financial liabilities the partial or all of the financial

liabilities are derecognized.If the assets used to repay the financial liabilities are transferred to an institution or a trust is established and the current

obligation to repay the debts still exists the recognition of the financial liabilities shall not be terminated or the recognition of the

assets transferred out shall not be terminated.When the Group (debtor) and creditor enter into an agreement to replace the existing financial liabilities by undertaking new

financial liabilities and the contract terms for the new financial liabilities are essentially different from those for the existing one the

existing financial liabilities will be derecognized and new financial liabilities will be recognized.If substantial or all contractual terms of the existing financial liabilities are substantially modified the recognition of the

existing financial liabilities or a part thereof shall be terminated and the financial liabilities with the revised terms shall be

recognized as a new financial liability.If the financial liabilities are terminated in whole or in part the difference between the book value of the termination

recognized portion and the consideration paid (including the non-cash assets transferred out or the new financial liabilities assumed)

shall be included in the current profit and loss.

(6) Deduction of financial assets and liabilities

Financial assets and financial liabilities should be listed separately in the balance sheet and cannot be offset against each other.

However if the following conditions are met the net amount offset by each other is listed in the balance sheet:

The Company has a statutory right to offset the confirmed amount and such legal right is currently enforceable;

The Company plans to settle the net assets or realize the financial assets and liquidate the financial liabilities at the same time.The transferring party shall not offset the transferred financial assets and related liabilities if it does not meet the conditions for

terminating the recognition.

(7) Impairment examination and providing of impairment provision of financial assets

① Objective evidence that can prove the impairment of the financial assets

A. Severe financial difficulties in the issuer or debtor;

B. The debtor violates the contract or defaults or delays the payment of the interest or principal;

C. The Group makes compromise to the debtor with financial difficulties due to economic or legal consideration;

D. The debtor may go bankruptcy or conduct other financial reorganization;

E. The financial assets can no longer be traded in an active market due to material financial difficulties in the issuer;

F. It cannot be recognized whether the cash flow of an asset in a group of financial assets has decreased. However according

to open data it can be evaluated that the estimated future cash flow of the group of financial assets has decreased and the decrease

can be measured including:

G. Significant adverse changes occurs to the technical market economic or legal environment of the debtor leading to that the

equity instrument investor may not be able to recover the investment;

H. Other objective evidence that can prove the impairment of the financial assets

(2) impairment testing of financial assets (excluding receivables)

A. Financial assets measured at amortized cost

If there is objective evidence proving impairment to the financial assets the book value of the financial assets will be written

down to the present value of the estimated future cash flow (excluding undiscovered future credit loss). The write-down amount is

accounted into the current gain/loss account.The present value of the expected future cash flow is determined by discounting the original effective interest rate of the

investment held to maturity and taking into account the value of the relevant collateral (the cost of acquiring and selling the collateral

is deducted). The original actual interest rate is the actual interest rate determined by the calculation of the initial confirmation of the

holding until the expiration of the investment. For floating interest rate holdings to maturity investments the current value of future

cash flow may be calculated using the current actual interest rate specified in the contract as the discount rate.Impairment tests are performed separately on financial assets with significant single amounts. If objective evidence indicates

that they have been impaired impairment losses are recognized and included in the current profit and loss; for financial assets with

insignificant single amounts separate impairment tests are included or included Conduct impairment tests in financial asset portfolios

with similar credit risk characteristics.Separately test financial assets that have not been impaired (including individual financial assets with significant amounts and

non-significant amounts) including those that have similar credit risk characteristics and then conduct impairment tests; financial

assets that have individually recognized impairment losses Does not include impairment testing in financial asset portfolios with

similar credit risk characteristics.

After the Company recognizes impair loss to financial assets measured by amortized cost if there is object evidence

suggesting that the value of the financial assets is restored objectively due to an event after the loss the recognized impairment loss

can be reversed and accounted into the current gain/loss account. The book value after the reversal must not exceed the amortized

cost of the financial assets on the reversal date assuming that no impairment provision was made.

B. Impairment test on available-for-sale financial assets

In the event of impairment of the financial assets available for sale the accumulated loss resulting from the reduction in the

fair value of the rights and interests of the owner shall be transferred out to account for the impairment of the assets. After the

impairment of the financial assets of the available debt instruments occurs the interest income is recognized by the discount rate used

to discounted the future cash flow as the interest rate when the impairment loss is determined.

For the sellable debt instruments recognized as impaired if the fair value increases in the following accounting period

objectively due to an event after the original impair loss is recognized the impairment loss will be reversed and accounted into the

current gain/loss account. Impairment loss incurred in investment of sellable equity instrument is not reversed through the gain/loss

account.

(9) Recognition of fair value of financial assets and liabilities

See Note III. 10 for the recognition of fair value of financial assets and liabilities.

11. Notes receivable

See Section XII V Important Accounting Policies and Accounting Estimates 10. Financial Tools.

12. Account receivable

See Section XII V Important Accounting Policies and Accounting Estimates 10. Financial Tools.The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure

Guideline No.6 – Listed Companies Engaged in Decoration Business.

13. Receivable financing

See Section XII V Important Accounting Policies and Accounting Estimates 10. Financial Tools.

14. Other receivables

Methods for Determining Expected Credit Loss of Other Receivables and Accounting Processing Methods

See Section XI V Important Accounting Policies and Accounting Estimates 10. Financial Tools.

15. Inventories

(1) Classification of inventories

Inventory refers to the finished products or commodities held by the Company for sale in its daily activities the materials and

materials consumed in the course of production in the course of production or in the course of providing labor services including

subcontracting materials raw materials in-process products finished products finished products inventories turnover materials

development costs development products and assets formed by construction contracts etc.

(2) Valuation method for issuing inventory

Inventories are measured at cost when procured. Raw materials products in process and commodity stocks in transit are

measured by the weighted average method.Inventory of real estate business mainly includes inventory materials on-the-job development products finished development

products and development products that are intended to be sold and temporarily leased. Inventory is measured at the actual costs

when the fixed assets are obtained The actual costs of development products include land transfer payment infrastructure and facility

costs installation engineering costs borrows before completion of the development and other costs during the development process.The special maintenance funds collected in the first period are included in the development overheads. The actual costs of the

development product is priced using the separate pricing method.

Construction contracts are measured by the effective cost including direct and indirect expenses generated before the contracts

are fulfilled. Costs generated and recognized accumulatively by construction in process and settled payment are listed in the balance

sheet as offset net amounts. The excessive part of the sum of the generated costs and recognized gross profit (loss) over the settled

payment is listed inventories; the excessive part of the settled payment over the sum of the generated costs and recognized gross

profit (loss) is listed as the prepayment received.Travel and bidding expenses generated by execution of contracts if they can be separated and reliably measured and it is likely

to enter into contracts are accounted as the contract cost when the contracts are entered into; or into the current gain/loss account if

the conditions are not met.

(3) Inventory system

The Company inventory adopts the perpetual inventory system counting at least once a year the inventory profit and loss

amount is included in the current year's profit and loss.

(4) Recognition of inventory realizable value and providing of impairment provision

On the balance sheet date inventories are accounted depending on which is lower between the cost and the net realizable value.If the cost is higher than the net realizable value the impairment provision will be made.The realizable net value of inventory should be recognized based on solid evidence with the purpose of the inventory and

after-balance-sheet-date events taken into consideration.

(1) In the course of normal production and operation the net realizable value of finished goods commodities and materials

directly used for sale shall be determined by the estimated price of the inventory minus the estimated cost of sale and related taxes.The inventory held for the execution of a sales contract or a labor contract shall be measured on the basis of the contract price as its

net realizable value; If the quantity held is greater than the quantity ordered under the sales contract the net realizable value of the

excess inventory is measured on the basis of the general sales price. Materials used for sale etc. are based on market prices as a

measure of their net realizable value.②In the normal production and operation process the inventory of materials that need to be processed is determined by the

amount of the estimated selling price of the finished product minus the estimated cost to be incurred at the time of completion

estimated sales expenses and related taxes Realize the net value. If the net realizable value of the finished product produced by it is

higher than the cost the material is measured at cost; If the decrease in the price of the material indicates that the net realizable value

of the finished product is lower than the cost the material is measured as the net realizable value and the inventory is prepared for a

decrease based on its difference.

③ Depreciation preparation of inventory is generally based on a single inventory item; For a large number of inventories with

a lower unit price they are accrued by inventory type.④ If the factors affecting the previous write-down of inventory value have disappeared on the balance sheet date the amount

of the write-down will be restored and transferred back within the amount of inventory depreciation reserve that has been accrued

and the amount returned will be included in the current profit and loss.

(5) Methods of amortization of swing materials

① Low-value consumables are amortized on on-off amortization basis at using.② Packages are amortized on on-off amortization basis at using.

16. Contract assets

17. Contract costs

18. Assets held for sales

19. Debt investment

20. Other debt investment

21. Long-term receivables

22. Long-term share equity investment

The Group's long-term equity investment includes control on invested entities and significant impacts on equity investment.Invested entities on which the Group has significant impacts are associates of the Group.

(1) Basis for recognition of common control and major influence on invested entities

Common control refers to the common control of an arrangement in accordance with the relevant agreement and the relevant

activities of the arrangement must be agreed upon by the participants who share control. In determining whether there is common

control the first step is to determine whether all or a group of participants collectively control the arrangement which is considered

collective control by all or a group of participants if all or a group of participants must act together to determine the activities

associated with the arrangement. Second determine whether the decision on the activities related to the arrangement must be agreed

upon by the participants in the collective control of the arrangement. If there are two or more combinations of participants that can

collectively control an arrangement it does not constitute joint control. Protection rights are not considered when determining

whether there is common control.Major influence refers to the power to participate in decision-making of financial and operation policies of a company but

cannot control or jointly control the making of the policies. When considering whether the Company can impose significant impacts

on the invested entity impacts of conversion of shares with voting rights held directly or indirectly by the investor and voting rights

that can be executed in this period held by the investor and other party into shares of the invested entity should be considered.If the Company directly or through subsidiaries holds more than 20% (inclusive) but less than 50% of the shares with voting

rights of the invested entity unless there is clear evidence proving that the Company cannot participate the decision-making of

production and operation of the invested entity the Company has major influence on the invested entity.

(2) Initial investment cost determination

1. Long-term equity investments formed by merger of enterprises shall be determined in accordance with the following provisions:

A. In the case of an enterprise merger under the same control where the merging party makes a valuation of the merger

by payment of cash transfer of non-cash assets or undertaking liabilities the share of the book value of the owner's interest in

the final controlling party's consolidated financial statements as the initial investment cost of the long-term equity investment at

the date of the merger. The difference between the initial investment cost of long-term equity investment and the cash paid the

non-cash assets transferred and the book value of the debt assumed adjust the capital reserve; If the capital reserve is

insufficient to offset or reduce the retained income shall be adjusted;

B. In the case of an enterprise merger under the same control where the merger party uses the issuance of interest-based

securities as the merger price the amount of the book value in the final controlling party's consolidated financial statements as

the initial investment cost of the long-term equity investment on the date of the merger in accordance with the interest of the

owner of the merger party. Adjust the capital reserve according to the difference between the initial investment cost of long-term

equity investment and the total face value of the issued shares. If the capital reserve is insufficient to offset or reduce the

retained income shall be adjusted;

For merger of entities under different control the merger cost is the fair value of the asset paid liability undertaken and

equity securities issued for exchanging of control power over the entities at the day of acquisition. Agency expenses and other

administrative expenses such as auditing legal consulting or appraisal services occurred relating to the merger of entities are

accounted into current income account when occurred.

1. Long-term equity investments formed by merger of enterprises shall be determined in accordance with the following provisions:

For long-term equity investment obtained by cash the actually paid consideration is the initial investment cost. Initial

investment costs include expenses taxes and other necessary expenditures directly related to the acquisition of long-term equity

investments;

B. Long-term equity investments acquired from the issuance of interest securities are the initial investment costs based on the

fair value of the issue interest securities;

C. Long-term equity investments acquired through the exchange of non-monetary assets if the exchange is commercially

substantial and can be reliably measured in terms of the fair value of the assets in exchange for or in exchange for the assets the

difference between the fair value of the assets in exchange for the assets and the book value of the assets in exchange for the current

period is counted as the initial investment cost; If the above two conditions are met when the exchange of non-currency assets is

different the book value and related taxes of the assets are used as the initial investment cost.

D. Long-term equity investments acquired through debt restructuring determine their recorded value at the fair value of the

waived claims and other costs such as taxes directly attributable to the assets and account for the difference between the fair value

and the book value of the waived claims.

(3) Subsequent measurement and recognition of gain/loss

The Company uses the cost method to measure long-term share equity investment in which the Company can control the

invested entity; and uses the equity method to measure long-term share equity investment in which the Company has substantial

influence on the invested entity.

① Cost

For the long-term equity investment measured on the cost basis except for the announced cash dividend or profit included in

the practical cost or price when the investment was made the cash dividends or profit distributed by the invested entity are

recognized as investment gains in the current gain/loss account.

Equity

Gains from long-term equity investment measured by equity

When the equity method is used to measure long-term equity investment the investment cost will not be adjusted if the

investment cost of the long-term equity investment is larger than the share of fair value of the recognizable assets of the invested

entity. When it is smaller than the share of fair value of the recognizable assets of the invested entity the book value will be adjusted

and the difference is included in the current gains of the investment.When the equity method is used the current investment gain is the share of the net gain realized in the current year that can be

shared or borne recognized as investment gain and other misc. income. The book value of the long-term equity investment is

adjusted accordingly. The book value of the long-term equity investment should be accordingly decreased based on the share of profit

or cash dividend announced by the invested entity; according to other changes in the owner’s equity except for net profit and loss

other misc income and profit distribution of the invested entity adjust the book value of the long-term equity investment and record it

in the capital surplus (other capital surplus). When the share of the net gains that can be enjoyed is recognized it is recognized after

the net profit of the invested entity is adjusted based on the fair value of the recognizeable assets of the invested entity according to

the Company's accounting policies and accounting period. Where the accounting policy and accounting period adopted by the

Invested unit are inconsistent with the Company the financial statements of the Invested unit shall be adjusted in accordance with the

accounting policy and accounting period of the Company and the investment income and other consolidated income shall be

recognized. Internal transaction gain not realized between the Company and affiliates is measured according to the shareholding

proportion and the investment gains is recoginzied after deduction. The unrealized internal transaction loss between the Company

and the invested entity is the impairment loss of transferred assets and should not be written off.Where substantial influence on invested entities is imposed or joint control is implemented due to increase in investment the

sum of the fair value of the original equity and increased investment on the conversion date is the initial investment cost under the

equity method. The difference between the fair value and book value of the original equity on the conversion date and the

accumulative change in the fair value originally accounted in other misc. income should be transferred into the profit and loss of the

current period using the equity method.Where joint control or substantial influence on invested entities is lost due to disposal of part of investment the remaining

equity after the disposal should be treated according to the Enterprise Accounting Standard No.22 – Recognition and Measurement of

Financial Instruments from the date of losing the joint control or substantial influence. The difference between the fair value and

book value should be accounted the profit and loss of the current period. For other misc. incomes of original share equity investment

determined using the equity method when the equity method is no longer used it should be treated based on the same basis of the

treatment of related assets or liability of the invested entities; the other owners' interests related to the original share equity

investment should be transferred to gain/loss of the current period.

(4) Equity investment held for sale

For the remaining equity investments not classified as assets held for sale the equity method is adopted for accounting

treatment.

Equity investments classified as held for sale to associates that are no longer eligible to hold classified assets for sale are

retrospectively adjusted using the equity method starting from the date that they are classified as held for sale. The classification is

adjusted to hold the financial statements for the period to be sold.

(5) Impairment examination and providing of impairment provision

See Note III. 19 for the assets impairment provision method for investment in subsidiaries and joint ventures.XXIII. Investment real estates

Measuring mode of investment real estate

Measurement at fair value

Basis of choosing the measurement at fair value

(1) Classification of investment real estate

Investment real estates are held for rent or capital appreciation or both. These include inter alia:

① Leased land using right

② the right to use the land that is transferred after holding and preparing for the increment.③ Leased building

(2) Measurement of investment real estate

For investment real estates with an active real estate transaction market and the Company can obtain market price and other

information of same or similar real estates to reasonably estimate the investment real estates’ fair value the Company will use the fair

value mode to measure the investment real estates subsequently. Variations in fair value are accounted into the current gain/loss

account.The fair value of investment real estates is determined with reference to the current market prices of same or similar real

estates in active markets; when no such price is available with reference to the recent transaction prices and consideration of factors

including transaction background date and district to reasonably estimate the fair value; or based on the estimated lease gains and

present value of related cash flows.

For investment real estate under construction (including investment real estate under construction for the first time) if the fair

value cannot be reliably determined but the expected fair value of the real estate after completion is continuously and reliably

obtained the investment real estate under construction is measured by cost. When the fair value can be measured reliably or after

completion (the earlier one) it is measured at fair value. For an investment real estate whose fair value is proven unable to be

obtained continuously and reliably by objective evidence the real estate will be measured at cost basis until it is disposed and no

residual value remains as assumed.If the cost model is adopted to measure the investment real estate the depreciation or amortization shall be calculated

according to the straight line method after deducting the accumulated impairment and net residual value of the investment real estate

cost. For the method of depreciation of the accrued assets see notes 3 and 19.The types of investment real estate estimated economic useful life and estimated net residual value rate are determined as

follows:

Category Service year (year) Residual value rate (%) Annual depreciation rate

(%)

Houses & buildings 35-50 10.00 1.80-2.57

24. Fixed assets

(1) Recognition conditions

Fixed assets is defined as the tangible assets which are held for the purpose of producing goods providing services lease or for

operation & management and have more than one accounting year of service life. Fixed assets are recognized at the actual cost of

acquisition when the following conditions are met: (1) The economic benefits associated with the fixed assets are likely to flow into

the enterprise. ② The cost of the fixed assets can be measured reliably. Overhaul cost generated by regular examination on fixed

assets is recognized as fixed assets costs when there is evidence proving that it meets fix assets recognition conditions. If not it will

be accounted into the current gain/loss account.

(2) Depreciation method

Type Depreciation method Service year Residual rate

Annual depreciation

rate %

Houses & buildings Average age 35-50 10% 1.8%-2.57%

Mechanical equipment Average age 10 10% 9%

Transportation facilities Average age 5 10% 18%

Electronics and other

devices

Average age 5 10% 18%

PV power plants Average age 20 5% 4.75%

(3) Recognition and pricing of financing leased fixed assets

The Company transfers all the risks and rewards attached to the asset at substantially transferred to the lessee it is recognized as

financial leasing and the others are operational leasing. The cost of a fixed asset acquired by a financial lease is determined on the

basis of the lower of the fair value of the leased asset at the date of the lease and the present value of the minimum leased payment.The Group adopts the depreciation policy same as the self-owned fixed assets to made provision for depreciation of leased asssets.

Depreciation shall be accrued within the life of the leased assets if it is possible to reasonably determine that the leased assets will be

entitled to ownership upon the expiry of the lease term; Depreciation is accrued within a shorter period between the lease term and

the service life of the leased asset if it is unable to reasonably determine that the leased asset ownership can be acquired at the end of

the lease term.

25. Construction in process

(1) Construction in progress is accounted for by project classification.

(2) Standard and timing for transferring construction in process into fixed assets

The full expenditure incurred on the construction-in-progress project as a fixed asset is recorded as the value of the asset

before the asset is constructed to the intended usable state. This includes construction costs the original cost of equipment other

necessary expenditures incurred in order to enable the construction works to reach the intended usable status and the borrowing costs

incurred for the specific borrowing of the project and the general borrowing expenses incurred before the assets reach the intended

usable status. Construction in process will be transferred to fixed assets when it reaches the preset service condition. The fixed assets

that have reached the intended usable state but have not been completed shall be transferred to the fixed assets according to the

estimated value according to the estimated value according to the estimated value according to the project budget cost or actual

project cost etc. The depreciation of the fixed assets shall be accrued according to the Company's fixed assets depreciation policy.The original estimated value shall be adjusted according to the actual cost after the completion.

26. Borrowing expenses

(1) Recognition principles for capitalization of borrowing expenses

Borrowing expenses occurred to the Company that can be accounted as purchasing or production of asset satisfying the

conditions of capitalizing are capitalized and accounted as cost of related asset.

(1) Asset expenditure has occurred;

② The borrowing expense has already occurred;

③ Purchasing or production activity which is necessary for the asset to reach the useful status has already started.Other interest on loans discounts or premiums and exchange differences are included in the income and loss incurred in the

current period.If the construction or production of assets satisfying the capitalizing conditions is suspended abnormally for over 3 months

capitalizing of borrowing expenses shall be suspended. During the normal suspension period borrowing expenses will be capitalized

continuously.When the asset satisfying the capitalizing conditions has reached its usable or sellable status capitalizing of borrowing

expenses shall be terminated.

(2) Calculation of the capitalization amount of borrowing expense

Interest expenses generated by special borrowings less the interests income obtained from the deposit of unused borrowings or

investment gains from temporary investment is capitalized; the capitalization amount for general borrowing is determined based on

the capitalization rate which is the exceeding part of the accumulative assets expense over weighted average of the assets expense of

the special borrowing/used general borrowing.If the assets that are constructed or produced under the condition of capitalization occupy the general borrowing the interest

amount to be capitalized in the general borrowing shall be calculated and determined by multiplying the capital rate of the general

borrowing by the weighted average of the asset expenditure of the accumulated assets whose expenditure exceeds that of the

specialized borrowing. The capitalization ratio is the weighted average interest rate of general borrowings.

27. Biological assets

None

28. Petrolum assets

None

Use right assets

None

30. Intangible assets

(1) Pricing method service life and depreciation test

(1) Pricing of intangible assets

Recorded at the actual cost of acquisition.

Amortization of intangible assets

① Useful life of intangible assets with limited useful life

Item Estimated useful life Basis

Land using right Term Use right assets

Trademarks and patents 10 years Reference to determine the lifetime of a company for which it

can bring economic benefits

Proprietary technology 10 years Reference to determine the lifetime of a company for which it

can bring economic benefits

Software 5 10 years Reference to determine the lifetime of a company for which it

can bring economic benefits

At the end of each year the Company will reexamine the useful life and amortization basis of intangible assets with limited

useful life. Upon review the service life and amortization methods of intangible assets at the end of the period are not different from

those previously estimated.② Intangible assets which cannot be foreseeable to bring economic benefits to enterprises shall be regarded as intangible

assets whose useful life is uncertain. For intangible assets whose service life is uncertain the Company shall review the service life

of intangible assets whose service life is uncertain at the end of each year. If the service life is uncertain after the review the

Company shall conduct a impairment test on the balance sheet date.

③ Amortization of intangible assets

For intangible assets with limited service life the Company shall determine their service life at the time of acquisition and

shall use the straight line method system to reasonably amortize their service life and the amortization amount shall be included in

the profit and loss of the current period according to the beneficial items. The specific amortization amount is the amount after the

cost is deducted from the estimated residual value. For fixed assets for which depreciation provision is made the depreciation rate

will be determined after the accumulative depreciation provision amount is deducted. The residual value of an intangible asset with

limited useful life is treated as zero except where a third party undertakes to purchase the intangible asset at the end of its useful life

or to obtain expected residual value information based on the active market which is likely to exist at the end of its useful life.Intangible assets with uncertain service life will not be amortized. At the end of each year the useful life of intangible assets

with uncertain useful life is reviewed and if there is evidence that the useful life of intangible assets is limited the useful life is

estimated and the system is reasonably amortized within the expected useful life.

(2) Accounting policies for internal R&D expenses

Specific standard for distinguish between research and development stage

The Company takes the information and related preparatory activities for further development activities as the research stage

and the intangible assets expenditure in the research stage is included in the current profit and loss period.

(2) The development activities carried out after the Company has completed the research stage as the development stage.

Specific Conditions of Expenditure Capitalization in Development Stage

Only when expenditures during the development phase meet the following conditions can they be recognized as intangible

assets:

A. completion of the intangible asset to enable it to be used or sold technically feasible;

B. has the intention of completing the intangible asset and using or selling it;

C. The means by which an intangible asset generates economic benefits including the ability to demonstrate that the product

produced using the intangible asset is in the market or that the intangible asset itself is in the market and that the intangible asset will

be used internally to demonstrate its usefulness;

D. sufficient technical financial and other resources to complete the development of the intangible asset and to be able to use

or sell the intangible asset;

E. Expenditures attributable to the development phase of the intangible assets can be reliably measured.

31. Assets impairment

The Group uses the cost mode to continue measuring the assets impairment to investment real estatement fixed assets

construction in progress intangible assets and goodwill (except for the inventories investment real estate measured by the fair value

mode deferred income tax assets and financial assets). The method is determined as follows:

The Company judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists the Company

estimates the recoverable amount and conducts the impairment test. Impairment test is conducted annually for goodwill generated by

mergers and intangible assets that have not reached the useful condition no matter whether the impairment sign exists.The recoverable amount is determined by the higher of the net of fair value minus disposal expense and the present value of

the predicted future cash flow. The Company estimates the recoverable amount on the individual asset item basis; whether it is hard

to estimate the recoverable amount on the individual asset item basis determine the recoverable amount based on the asset group that

the assets belong to. The assets group is determined by whether the main cash flow generated by the group is independent from those

generated by other assets or assets groups.When the recoverable amount of the assets or assets group is lower than its book value the Company writes down the book

value to the recoverable amount the write-down amount is accounted into the current income account and the assets impairment

provision is made.

For goodwill impairment test the book value of goodwill generated by mergers is amortized through reasonable measures

since the purchase day to related asset groups; those cannot be amortized to related assets groups are amortized to related

combination of asset groups. The related asset groups or combination of asset groups refer to those that can benefit from the

synergistic effect of mergers and must not exceed to the reporting range determined by the Company.When the impairment test is conducted if there is sign of impairment to the asset group or combination of asset groups related

to goodwill first perform impair test for asset group or combination of asset groups without goodwill and calculate the recoverable

amount and recognize the related impairment loss. Then conduct impairment test on those with goodwill compare the book value

with recoverable amount. If the recoverable amount is lower than the book value recognize the impairment loss of the goodwill.Once recognized the asset impairment loss cannot be written back in subsequent accounting period.

32. Long-term amortizable expenses

The long-term outstanding expenses shall be accounted for all expenses incurred by the Company but which shall be borne by

the current and future periods for more than one year and the long-term outstanding expenses shall be amortized averagely within the

benefit period.

Contract liabilities

34. Staff remuneration

(1) Accounting of operational leasing

① Basic salary of employees (salary bonus allowance subsidy)

In the accounting period for which the staff and workers provide services the Company shall confirm the actual short-term

remuneration as liabilities and shall account for the current income and loss except as required or permitted by other accounting

standards.

② Employee welfare

The employee benefits incurred by the Company shall be included in the current profit and loss or related asset costs according

to the actual amount incurred. Where the employee's benefit is non-monetary it shall be measured on the basis of fair value.③ Social insurance premiums and housing accumulation funds such as health insurance premiums work injury premiums

birth insurance premiums trade union funds and staff and education funds

The Company pays the medical insurance premiums work injury insurance premiums birth insurance premiums etc. social

insurance premiums and housing accumulation funds for the staff and workers as well as the union funds and the staff and workers

education funds according to the regulations in the accounting period for which the staff and workers provide services the

corresponding salary amount of the staff and workers and confirms the corresponding liabilities which are included in the current

profit and loss or related asset costs.④ Short-term paid leave

The Company accumulates the salary of the employees who are absent from work with pay when the employees provide

service thus increasing their future right of absence with pay. The Company confirms the salary of the employee related to the

absence of non-cumulative salary during the actual absence accounting period.⑤ Short-term profit share program

If the profit-sharing plan meets the following conditions at the same time the Company shall confirm the salary payable to the

staff and workers:

A. The legal or presumptive obligation of the enterprise to pay the remuneration of its employees as a result of past matters;

B. The amount of payroll obligations due to profit-sharing schemes can be reliably estimated.

(2) Accounting of post-employment welfare

The post-employment welfare of the Group is a defined plan which means that the Company does not need to assume any

responsibility after making fixed contribution to an independent fund. The defined plan includes basic pension and unemployment

insurance. The contribution of the plan is recognized as liabilities and recorded in the profit and loss of this period or related assets

costs.

(3) Accounting of dismiss welfare

If the Company provides termination benefits to employees the employee compensation liabilities arising from the

termination benefits shall be recognized at the earliest of the following two and shall be included in the current profit and loss:

(1) An enterprise may not unilaterally withdraw the resignation benefits provided for by the dismissal plan or reduction

proposal;

(2) When the enterprise recognizes the costs or expenses related to the reorganization involving the payment of resignation

benefits.

(4) Accounting of other long-term staff welfare

None

35. Lease liabilities

None

36. Anticipated liabilities

（1） Confirmation of projected liabilities

When responsibilities occurred in connection to contingent issues and all of the following conditions are satisfied they are

recognized as expectable liability in the balance sheet:

① This responsibility is a current responsibility undertaken by the Company;

② Execution of this responsibility may cause financial benefit outflow from the Company;

③ Amount of the liability can be reliably measured.

（2） Methods of measurement of projected liabilities

Expected liabilities are initially measured at the best estimation on the expenses to exercise the current responsibility and with

considerations to the relative risks uncertainty and periodic value of currency. On each balance sheet date review the book value of

the estimated liabilities. Where there is conclusive evidence that the book value does not reflect the current best estimate the book

value is adjusted to the current best estimate.

37. Share payment

None

38. Other financial instruments such as preferred shares and perpetuated debt

None

39. Revenue

Whether the new revenue guidelines are implemented

□ Yes □ No

The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure

Guideline No.6 – Listed Companies Engaged in Decoration Business.

（1） Revenue from the sale of commodities

When all of the following conditions are satisfied the sales of goods are recognized as sales income according to the contract

amount received or receivable from the buyer: (1) Main risks and rewards attached to the ownership of the goods have been

transferred to the buyer; (2) No succeeding power of administration or effective control is reserved which are usually attached to

ownership; (3) Amount received can be reliably measured; (4) Related financial benefit may inflow to the Company; (5) Relative

costs occurred or will occur can be reliably measured.

(2) Revenue from the provision of services

If they are not in the same year then use the estimation on percentage basis when it is possible. The completion percentage is

the costs occurred on the total cost.The reliable estimation of the result of providing of labor service must meet the following conditions: A. the revenue can be

reliably measured; B. the economic benefit is very likely to flow into the Company; C. the completion can be determined reliably; D.costs incurred or will be incurred can be reliably measured.The Company shall determine the total revenue of the Services provided under the Contract or Agreement Price received or

receivable unless the Contract or Agreement Price received or receivable is not fair. On the balance sheet date the total income of

the labor service provided in the current period shall be recognized by multiplying the total income of the labor service provided by

the balance sheet by the amount of the accumulated income of the service provided in the previous accounting period. At the same

time the total estimated cost of the labor service provided is multiplied by the completion schedule by the amount of the accumulated

confirmed labor service cost in the previous accounting period to carry forward the current labor service cost.If the results of the labor service transaction provided on the balance sheet date cannot be reliably estimated the following

cases shall be dealt with:

1. If the cost of the services already incurred is expected to be compensated it shall be recognized as the amount of the costs

already incurred

Provide service income and carry forward service costs at the same amount.

1. If the labor cost incurred is not expected to be compensated the labor cost already incurred is included in the current profit and

loss and the income from providing labor services is not recognized.

(3) Asset tenure income

When the economic benefits related to the transaction are likely to flow into the enterprise and the amount of income can be

measured reliably the amount of income from the transfer of asset use rights is determined in the following cases:

1. The amount of interest income shall be determined according to the time and the actual interest rate at which the money funds of

the enterprise are used by others.

2. The amount of royalty income shall be determined in accordance with the time and method of charge agreed upon in the

relevant contract or agreement

(4) Construction contract income

On the balance sheet day the Group recognizes the contract income and costs using the completion percentage method if the

result of the construction contract can be reliably estimated. The percentage of completion method recognizes income and costs

based on contract completion schedule. The competition percentage is determined by the share of the costs incurred in the total cost.If not such contracts are treated differently. If the contract cost can be recovered the revenue is recognized according to the

actual contract costs that can be recovered and the contract cost is recognized as the current expense; if not the contract cost is

recognized as the current expense and no revenue is recognized.If the estimated total costs exceed the total revenue the Group recognizes the estimated loss as the current expense.

(5) Specific methods for revenue recognition

① Construction contracts

Metro screen door projects of the Company and Shenzhen Fangda Automatic System and curtain wall project of Fangda

Jianke are individual construction contracts. They are accounted by the following means:

Construction contracts completed within a fiscal year are recognized for their income and cost upon completion.

Income and expenses of the construction contracts carried over-year are recognized on percentage basis at balance sheet day

when all of the following conditions are satisfied: contract income can be reliably measured relative financial benefit can inflow to

the Company; progress of the project and costs to complete the contract can be reliably recognized; cost occurred to complete the

contract can be clearly distinguished and reliably measured which enables comparing of actual cost with predicted cost.

Contract costs are direct and indirect expenses occurred since the date when the contract is engaged till the completion day.

The competition percentage is determined by the share of the costs incurred in the total cost.

Construction contracts completed in current term are recognized for income according to the actual total income of the

contract less income recognized in previous terms; meanwhile the total costs of the contract less costs recognized in previous terms

are recognized as current contract costs. If the total contract cost is predicted to be greater than the predicted total income the

predicted loss shall be recognized as current cost instantly.Parts of the curtain wall project under Fangda Jianke are outsourced and administrative fees are collected at the agreed rate.

For these construction contracts income will be recognized when ongoing payment for the project is received and corresponding

costs are transferred.

② Sales product

Revenue of products for domestic sales is recognized when the Group delivers the products and receives the sales payment or

obtains the payment voucher; revenue for products for overseas sales is recognized at departure of the products.③ Real estate sales

Income from real estate sales is recognized when the contract is signed and performed project is developed and completed

with the record for the completion acceptance the handover procedure is completed or property is deemed accepted by the customer

as per the property sales contract the payment is received or it is believed that the payment can be received and the cost can be

measured reliably.

40. Government subsidy

(1) Recognition of government subsidies

Government subsidies are recognized when the following conditions are met:

(1) Requirements attached to government subsidies;

(2) The Company can receive government subsidies.

(2) Recognition of government subsidies

When a government subsidy is monetary capital it is measured at the received or receivable amount. None monetary capital

are measured at fair value; if no reliable fair value available recognized at RMB1.

(3) Recognition of government subsidies

Assets-related

Government subsidies related to assets are obtained by the Company to purchase build or formulate in other manners

long-term assets; or subsidies related to benefits. If the asset-related government subsidy is recognized as deferred gain should be

recorded in gain and loss in the service life. Government subsidy measured at the nominal amount is accounted into current income

account. If the relevant assets are sold transferred scrapped or damaged before the end of their useful life the unallocated relevant

deferred income balance shall be transferred to the profit and loss of the current period of disposition of the assets.Gain-related government subsidy should be accounted as follows:

The Company divides government subsidies into assets-related and earnings-related government subsidies. Gain-related

government subsidy should be accounted as follows:

(1) Subsidy that will be used to compensate related future costs or losses should be recognized as deferred gain and recorded

in the gain and loss of the current report and offset related cost;

(2) Subsidy that is used to compensate existing cost or loss should be recorded in the gain and loss of the current period or

offset related cost.

For government subsidies that include both asset-related and income-related parts separate different parts for accounting

treatment; It is difficult to distinguish between the overall classification of government subsidies related to benefits.Government subsidy related to routine operations should be recorded in other gains or offset related cost. Government subsidy

not related to routine operations should be recorded in non-operating income or expense.③ Policy preferential loan discount

The policy-based preferential loan obtained has interest subsidy. If the government allocates the interest-subsidy funds to the

lending bank the loan amount actually received will be used as the entry value of the loan and the borrowing cost will be calculated

based on the loan principal and policy-based preferential interest rate.If the government allocates the interest-bearing funds directly to the Group discount interest will offset the borrowing costs.

(2) Government subsidy refund

When a confirmed government subsidy needs to be returned the book value of the asset is adjusted against the book value of

the relevant asset at initial recognition. If there is a related deferred income balance the book balance of the related deferred income

is written off and the excess is credited to the current profit or loss; In other cases it is directly included in the current profit and loss.

41. Differed income tax assets and differed income tax liabilities

The Company uses the temporary difference between the book value of the assets and liabilities on the balance sheet day and

the tax base and the liabilities method to recognize the deferred income tax. 26. Deferred income tax assets and deferred income tax

liabilities

(1) Deferred income tax assets

For deductible temporary discrepancies deductible losses and tax offsets that can be carried forward for future years the

impact on income tax is calculated at the estimated income tax rate for the transfer-back period and the impact is recognized as

deferred income tax assets provided that the Company is likely to obtain future taxable income for deductible temporary

discrepancies deductible losses and tax offsets.

At the same time the impact on income tax of deductible temporary discrepancies resulting from the initial recognition of

assets or liabilities in transactions or matters with the following characteristics is inconclusive as deferred income tax assets:

A. The transaction is not an enterprise merger;

B. the transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;

In the event of temporary discrepancy of deductible investment related to subsidiaries joint ventures and joint ventures and

meeting the following two conditions the amount of impact (talent) on income tax shall be deemed as deferred income tax assets:

A. Temporary discrepancies are likely to be reversed in the foreseeable future;

B. The amount of taxable income to be used to offset temporary discrepancies is likely to be available in the future;

On the balance sheet date there is conclusive evidence that sufficient taxable income is likely to be obtained during the future

period to offset the deductible temporary discrepancy recognizing deferred income tax assets not recognized during the previous

period.On the balance sheet day the Company re-exmaines the book value of the deferred income tax assets. If it is unlikely to have

adequate taxable proceeds to reduct the benefits of the deferred income tax assets less the deferred income tax assets’ book value.When there is adequate taxable proceeds the lessened amount will be reversed.

(2) Deferred income tax assets

All provisional differences in taxable income of the Company shall be measured on the basis of the estimated income tax rate

for the period of transfer-back and shall be recognized as deferred income tax liabilities except that:

① The impact of temporary differences in taxable income on income tax arising from the following transactions or matters is

inconclusive as deferred income tax liabilities:

A. Initial recognition of goodwill;

B. Initial recognition of goodwill or of assets or liabilities generated in transactions with the following features: the

transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;

② In the event of temporary discrepancy of deductible investment related to subsidiaries Joint venture joint ventures and

meeting the two conditions the amount of impact (talent) on income tax shall be deemed as deferred income tax assets:

A. The Company is able to control the time of temporary discrepancy transfers;

B. The temporary discrepancy is likely not to be reversed in the foreseeable future.

(3) Deferred income tax assets

(1) Deferred income tax liabilities or assets associated with enterprise consolidation

Temporary difference of taxable tax or deductible temporary difference generated by enterprise merger under non-same

control. When deferred income tax liability or deferred income tax asset is recognized related deferred income tax expense (or

income) is usually adjusted as recognized goodwill in enterprise merger.

② Amount of shares paid and accounted as owners' equity

Except for the adjustment goodwill generated by mergers or deferred income tax related to transactions or events directly

accounted into the owners’ equity income tax is accounted as income tax expense into the current gain/loss account. The effects of

temporary discrepancy on income tax include the following: Other integrated benefits such as fair value change of financial assets

available for sale retroactive adjustment of accounting policy changes or retroactive restatement of accounting error correction

discrepancy to adjust the initial retained income and mixed financial instruments including liabilities and equity.

(3) Compensation for losses and tax deductions

A. Compensable losses arising from the Company's own operations and tax deductions

Deductible loss refers to the amount of taxable income in the following years which is calculated and approved in accordance

with the provisions of the tax law. For uncompensated losses (deductible losses) and tax deductions that can be carried forward in

future years as stipulated in the tax law the provisional discrepancy is treated as deductible. Where it is anticipated that adequate

taxable income is likely to be obtained during the future period in which compensable losses or tax credits are available the

corresponding deferred income tax assets are identified subject to the amount of taxable income likely to be obtained and the

income tax costs in the current profit statement are reduced.

B. Uncompensable losses resulting from merger

In the course of enterprise merger if the Company obtains the temporary discrepancy that can be deducted from the purchaser

it will not confirm if it does not meet the qualification of deferred income tax asset confirmation on the date of purchase. Within 12

months after the date of purchase if new or further information is obtained it indicates that the relevant situation of the date of

purchase has already existed and the economic benefit of the expected buyer can be realized by deducting the temporary discrepancy

on the date of purchase the relevant deferred income tax assets are recognized the goodwill is reduced the goodwill is not offset the

difference is recognized as the current profit and loss in part; In addition to the above the deferred income tax assets related to

enterprise merger shall be recognized and included in the current profit and loss period.④ Temporary differences in the formation of combined offsets

In preparing the consolidated financial statements if there is a temporary difference between the book value of assets and

liabilities in the consolidated balance sheet and the taxable basis of the taxpayer due to the offset of the unrealized internal sales gain

or loss the Company acknowledges the deferred income tax assets or deferred income tax liabilities in the consolidated balance sheet

and adjusts the income tax expenses in the consolidated profit and profit statement with the exception of the deferred income tax

related to the transaction or event directly included in the owner's equity and the merger of the enterprise.⑤ Share payment settled by equity

If the tax law provides for allowable pre-tax deduction of expenses related to share payment within the period for which the

cost and expense are recognized in accordance with the accounting standards the Company shall calculate the tax basis and

temporary discrepancy based on the estimated pre-tax deduction amount at the end of the accounting period and confirm the relevant

deferred income tax if it meets the conditions for confirmation. Of these the amount that can be deducted before tax in the future

exceeds the cost related to share payment recognized in accordance with the accounting standards and the excess income tax shall be

directly included in the owner's equity.

42. Leasing

(1) Accounting of operational leasing

① The Company as the leasor: Rentals from operational leasing are recognized as current gains on straight basis to the

periods of leasing. Where the lessor provides a lease-free period the total rent shall be apportioned within the whole lease-free period

without deducting the lease-free period according to the straight line method or other reasonable method and the rent-free period

shall be recognized as well as the corresponding liabilities. In the event that the lessor undertakes certain expenses of the lessee the

Company shall apportion the balance of the rent expenses deducted from the total rent expenses according to the expenses within the

lease term.Initial direct expenses are recorded to current income account. In the event of an agreement or rent the current profit and loss

shall be included in the actual occurrence.

(2) When the Company is the operating lessor the rent received shall be recognized as income within the lease term by the

straight line method. Where the lessor provides a lease-free period the total rent shall be apportioned within the whole lease-free

period without deducting the lease-free period according to the straight line method or other reasonable method and the rent-free

period shall be recognized as well as the corresponding liabilities. If the charterer undertakes certain expenses the Company shall

distribute the rent income balance deducted from the total rent income during the lease term.Initial direct expenses are recorded to current income account. If the amount of capital is large the current profit and loss shall

be counted on the same basis as recognized rent income during the entire operating lease period. In the event of an agreement or rent

the current profit and loss shall be included in the actual occurrence.

(2) Accounting of operational leasing

None

43. Other significant accounting policies and estimates

Accounting of hedging

As of 1 January 2019

(1) Classification of inventories

The Company's hedge is a cash flow hedge.

Cash flow hedging refers to the hedging of cash flow risk. The change in cash flow is derived from specific risks associated

with recognized assets or liabilities expected transactions that are likely to occur or with respect to the components of the

above-mentioned project and will affect the profits and losses of the enterprise.

(2) Hedging tools and hedged projects

Hedging means a financial instrument designated by the Company for the purpose of hedging whose fair value or cash flow

variation is expected to offset the fair value or cash flow variation of the hedged item including:

① Financial liabilities measured at fair value with variations accounted into current income account Check-out options can

only be used as a hedging tool if the option is hedged including those embedded in a hybrid contract. Derivatives embedded in a

hybrid contract but not split cannot be used as separate hedging tools.

(2) Non-derivative financial assets or non-derivative financial liabilities which are measured at fair value and whose variations

are taken into account as gains and losses in the current period except those designated as fair value and whose variations are taken

into account as gains and losses in the current period and whose variations in fair value due to its own credit risk are taken into

account as other consolidated gains.Self-interest instruments are not financial assets or financial liabilities and cannot be used as hedging instruments.Hedged items refer to items that can be reliably measured that expose the Company to the risk of fair value or cash flow

change and are designated as hedged objects. The Company designates the following individual projects portfolios or components as

hedged projects:

(1) Assets or liabilities have been recognized.

(2) unconfirmed commitments. Determining a commitment means a legally binding agreement for the exchange of a specified

number of resources at agreed prices on a particular future date or period.

(3) Expected transactions that are most likely to occur. Expected transactions are transactions that have not been promised but

are expected to occur.

(4) Net foreign investment.

The above-mentioned project components are those that are less than the whole fair value of the project or the change in cash

flow. The Company designates the following project components or combinations thereof as hedged projects:

① Fair value or cash flow variation part (risk component) of a project's overall fair value or cash flow variation caused only

by a particular risk or risks. Based on an assessment in a particular market environment the risk component should be individually

identified and reliably measured. The risk component also includes a portion where the change in the fair value or cash flow of the

hedged item is only above or below a particular price or other variable.② One or more selected contractual cash flows.③ The component of the nominal amount of the project that is the specific part of the whole amount or quantity of the

project may be a certain proportion of the whole project or may be a certain level of the whole project. If a hierarchy contains

advance repayment rights and the fair value of the advance repayment rights is affected by changes in the risk of the hedged

repayment rights the hierarchy shall not be designated as a hedged item of fair value except where the effect of the advance

repayment rights is already included in the measurement of the fair value of the hedged item.

（3） Assessment of hedging relationships

When the hedging relationship is initially specified the Group officially specifies the related hedging relationships with

official documents recording the hedging relationships risk management targets and hedging strategies. This document sets out the

hedging tools hedged items the nature of hedged risks and the Company's assessment of hedged effectiveness. Hedging means a

financial instrument designated by the Company for the purpose of hedging whose fair value or cash flow variation is Offset offset

the fair value or cash flow variation of the hedged item including: Such hedges are continuously evaluated on and after the initial

specified date to meet the requirements for hedging validity.If the hedging instrument has expired sold terminated or has been exercised (but the extension or replacement as part of the

hedging strategy is not treated as expired or terminated under the contract) or the risk management objective has changed causing

the hedging relationship no longer to meet the risk management objective or the economic relationship between the hedging item

and the hedging instrument ceases to exist or the impact of the credit risk begins to dominate in the change in the value of the

economic relationship between the hedging item and the hedging tool or the hedging strategy has ceased to meet other conditions of

the hedging accounting method the Company terminates the hedging accounting.If the hedging relationship no longer meets the requirements for the validity of the hedging relationship due to the hedging

ratio but the specified risk management objective of the hedging relationship remains unchanged the Company will rebalance the

hedging relationship.

(4) Validation and measurement

If the strict conditions of the hedging accounting method are satisfied the following methods shall be applied:

Cash flow hedging

The interest or loss in the hedging instrument is an effective part of the hedge and is recognized as a cash flow hedge reserve

as other consolidated gains which is an ineffective part of the hedge (i.e. deducting other gains or losses after taking into account

other consolidated gains or losses) and is included in the current profit and loss. The amount of the cash flow hedge reserve is

determined according to the lower of the absolute amount of the following two items: ① Cumulative gain or loss of the hedge tool

from the start of the hedge. The amount in the effective arbitrage is recognized by the accumulative gains or losses from the starting

of arbitrage and accumulative changes to the current value of future forecast cash flows from the start of arbitrage.If the expected transaction of the hedged asset is subsequently recognized as a non-financial asset or non-financial liability or

if the expected transaction of the non-financial asset or non-financial liability forms a defined commitment to the applicable fair

value hedge accounting the amount of the cash flow hedge reserve originally recognized in the other consolidated income is

transferred out to account for the initial recognized amount of the asset or liability. The remaining cash flow hedges are transferred

out of the cash flow hedge reserve recognized in the other consolidated income for the same period of time during which the

expected cash flow of the hedged period affects the gain or loss as expected for sale.following accounting policies are applied in 2018 and earlier

When the hedge relationship begins the Group specifies the hedge relationship in writing to specify the follow: risks

management target and hedging strategy; nature of the hedged item and quantity; nature and quantity of hedging instruments nature

and identification of hedged risks; evaluation of the hedging effectiveness including the economic relationship between the hedged

item and hedging instrument hedging ratio analysis of the hedging ineffectiveness source; the beginning date of the specified

hedging relationship.

Cash flow hedging

During the existence of the hedging relationship the part of the cumulative gain or loss of the hedging instrument within the

change to the current value of the cumulative cash flow of the hedged item is included into other misc. incomes. The part that is

lower or larger than the cash flow change is included into the gain or loss of the current period.

When the hedging relationship ends and related inventory is recognized the hedging instrument gain or loss recognized in

―Other misc. income hedging reserve‖ will be transferred to ―Raw materials‖.Repurchase of the Company’s shares

（1） In the event of a reduction in the Company's share capital as approved by legal procedure the Company shall reduce the

share capital by the total amount of the written-off shares adjust the owner's equity by the difference between the price paid by the

purchased stocks (including transaction costs) and the total amount of the written-off shares offset the capital reserve (share capital

premium) surplus reserve and undistributed profits in turn; A portion of a capital reserve (share capital premium) that is less than the

total face value and less than the total face value.

（2） The total expenditure of the repurchase shares of the Company which is managed as an inventory share before they are

cancelled or transferred is converted to the cost of the inventory shares.

（3） Increase in the capital reserve (capital premium) at the time of transfer of an inventory unit the portion of the transfer

income above the cost of the inventory unit; Lower than the inventory stock cost the capital reserve (share capital premium) surplus

reserve undistributed profits in turn.Significant accounting judgment and estimate

The Company continuously reviews significant accounting judgment and estimate adopted for the reasonable forecast of future

events based on its historical experience and other factors. Significant accounting judgment and assumptions that may lead to major

adjustment of the book value of assets and liabilities in the next accounting year are listed as follows:

Classification of financial assets

The major judgements involved in the classification of financial assets include the analysis of business model and contract

cash flow characteristics.The Company determines the business mode of managing financial assets at the level of financial asset portfolio taking into

account such factors as how to evaluate and report financial asset performance to key managers the risks that affect financial asset

performance and how to manage it and how to obtain remuneration for related business managers.When the Company assesses whether the contractual cash flow of financial assets is consistent with the basic borrowing

arrangement there are the following main judgments: whether the principal may change due to early repayment and other reasons

during the duration of the period or the amount of change; whether the interest Including the time value of money credit risk other

basic borrowing risks and consideration of costs and profits. For example whether the amount paid in advance reflects only the

principal outstanding and interest on the basis of the principal outstanding and reasonable compensation due for the early termination

of the contract.The Measurement of Expected Credit Loss of Accounts Receivable

The Company calculates the expected credit loss of accounts receivable through the risk exposure of accounts receivable

default and the expected credit loss rate and determines the expected credit loss rate based on the default probability and the default

loss rate. In determining the expected credit loss rate the Company uses the internal historical credit loss experience data and adjusts

the historical data in combination with the current situation and prospective information. When considering forward-looking

information the Company uses indicators such as risk of economic downturn external market environment technological

environment and changes in customer conditions. The Company regularly monitors and reviews the assumptions related to the

calculation of expected credit losses.

Deferred income tax assets

If there is adequate taxable profit to deduct the loss the deferred income tax assets should be recognized by all the unused tax

loss. This requires the management to make a lot of judgment to forecast the time and amount of future taxable profit and determine

the amount of the deferred tax assets based on the taxation strategy.

Construction contracts

The Group recognizes income based on the completion of individual construction contract. The management determines the

completion percentage based on the actual cost in the total budget and forecasts the contract income. The starting and completion

dates of construction contracts fall in different account periods. The Group will review and adjust contract income and cost

estimation in budgets (if the actual contract income is less than the estimate or actual contract cost contract estimation loss provision

will be made).

Estimate of fair value

The Group uses fair value to measure investment real estate and needs to estimate the fair value of investment real estate at

least quarterly. This requires the management to reasonably estimate the fair value of the investment real estate with the help of

valuation experts.

Development cost

For property that has been handed over with income recognized but whose public facilities have not been constructed or not

been completed the management will estimate the development cost for the part that has not been started according to the budget to

reflect the operation result of the property sales.

44. Major changes in accounting policies and estimates

(1) Changes in accounting policies

√ Applicable □ Inapplicable

Account policy changes and reasons Approval procedure Remark

On April 30 2019 the Ministry of Finance issued the "Notice on

Revising the Format of General Enterprise Financial Statements for

2019" (Caihui [2019] No. 6) which requires that new financial

instruments standards have been implemented but new income

standards and new Leasing companies should prepare financial

statements as follows: In the balance sheet the line items "Bills

receivable and accounts receivable" were split into "Bills receivable"

and "Accounts receivable"; the item "Finance receivables" was added

to reflect fairness on the balance sheet Bills receivable and accounts

receivable whose value is measured and whose changes are included

in other comprehensive income; split the "bills payable and accounts

payable" line items into "bills payable" and "payables".

Financial assets derecognised as a result of amortized cost ("-" for

loss)

On September 19 2019 the Ministry of Finance issued the "Notice

on Revising and Issuing the Format of Consolidated Financial

Statements (2019 Version)" (Caihui [2019] No. 16) which will be

implemented in conjunction with Caihui [2019] No. 6.The Company prepared comparative statements in accordance with

the financial statement format specified in Caihui [2019] No. 6 and

Caihui [2019] No. 16 and changed the presentation of relevant

financial statements using the retroactive adjustment method.The Ministry of Finance issued "Accounting Standards for

Enterprises No. 22-Recognition and Measurement of Financial

Instruments" (Caihui [2017] No. 7) and "Accounting Standards for

Enterprises No. 23-Transfer of Financial Assets" (Cai Accounting

[ 2017] No. 8) "Accounting Standards for Business Enterprises No.

24-Hedging Accounting" (Caihui [2017] No. 9) on May 2 2017 the

"Accounting Standards for Business Enterprises No. 37-Presentation

of Financial Instruments" ( Caihui [2017] No. 14) (the above

standards are hereinafter collectively referred to as "new financial

instrument standards"). The domestic listed companies are required to

implement the new financial instruments standards from January 1

2019. The Company implemented the above new financial instrument

standards on January 1 2019 and adjusted the relevant content of the

accounting policy. For details see Note III.9.If the confirmation and measurement of financial instruments before

January 1 2019 are inconsistent with the requirements of the new

financial instrument standards the Company will retroactively adjust

the classification and measurement (including impairment) of

financial instruments in accordance with the provisions of the new

financial instrument standards. The difference between the original

book value of financial instruments and the new book value on the

implementation date of the new financial instruments standard (ie

January 1 2019) is included in retained earnings or other

comprehensive income on January 1 2019. At the same time the

Company has not adjusted the comparative financial statement data.

On May 9 2019 the Ministry of Finance issued the "Accounting

Standards for Business Enterprises No. 7-Exchange of Non-Monetary

Assets" (Caihui [2019] No. 8). According to the requirements the

Accounting policy

changes were

considered and

approved by resolutions

of the Eighth Board of

Directors at its

seventeenth meeting the

Eighth Board of

Directors at its fifteenth

meeting and the Eighth

Board of Directors at its

twenty-second meeting.The first implementation of the

new financial instruments

guidelines new income standards

new lease standards adjustments

the first implementation of the

financial statements at the

beginning of the year

The cumulative impact of the above accounting policies is as follows:

Due to the implementation of the new financial instruments the consolidated financial statements of the Company have

adjusted the deferred income tax assets of 6594#*@$9 Yuan on January 1 2019. The amount of related adjustments affecting the

parent company's equity in the consolidated financial statements of the Company is RMB-44571870.18 of which the surplus

reserve is 524860.03 the undistributed profit is RMB-39930304.63 and other comprehensive income is RMB-5166425.58. The

financial statements of our parent company are adjusted to -27 391.55 yuan on January 1 2019. The amount of related adjustments

affecting the owner ’s equity in the financial statements of the parent company of the Company was RMB82174.65 of which the

surplus reserve was RMB524860.03 undistributed profit was RMB4723740.20 and other comprehensive income was

RMB-5166425.58.

(2) Changes in major accounting estimates

□ Applicable √ Inapplicable

3. The first implementation of the new financial instruments guidelines new income standards new lease

standards adjustments the first implementation of the financial statements at the beginning of the year

√ Applicable □ Inapplicable

Consolidated Balance Sheet

In RMB

Item 31 December 2018 1 January 2019 Adjustment

Current asset:

Monetary capital 1389062083.76 1389062083.76

Settlement provision

Outgoing call loan

Transactional financial

assets

Financial assets

measured at fair value with

variations accounted into

current income account

Derivative financial

assets

Notes receivable 140139692.84 138239692.84 -1900000.00

Account receivable 1920075031.85 1866763789.49 -53311242.36

Receivable financing 400000.00 400000.00

Prepayment 46454844.74 46454844.74

Insurance receivable

Reinsurance receivable

Provisions of

Reinsurance contracts

receivable

Other receivables 139990188.26 142135200.54 2145012.28

Including: interest

receivable

Dividend

receivable

Repurchasing of

financial assets

Inventory 651405832.29 651405832.29

Contract assets

Assets held for sales

Non-current assets due

in 1 year

Other current assets 51698111.14 51698111.14

Total current assets 4338825784.88 4287659554.80 -51166230.08

Non-current assets:

Loan and advancement

provided

Debt investment

Sellable financial assets 21674008.23 -21674008.23

Other debt investment

Investment held until

mature

Long-term receivable

Long-term share equity

investment

70105657.88 70105657.88

Investment in other

equity tools

21674008.23 21674008.23

Other non-current

financial assets

Investment real estate 5256442406.63 5256442406.63

Fixed assets 455274241.83 455274241.83

Construction in process 58269452.72 58269452.72

Productive biological

assets

Gas & petrol

Use right assets

Intangible assets 80313240.67 80313240.67

R&D expense

Goodwill

Long-term amortizable

expenses

2114331.46 2114331.46

Deferred income tax

assets

356474925.76 363069285.66 6594359.90

Other non-current assets 19360083.67 19360083.67

Total of non-current assets 6320028348.85 6326622708.75 6594359.90

Total of assets 10658854133.73 10614282263.55 -44571870.18

Current liabilities

Short-term loans 208000000.00 208000000.00

Loans from Central

Bank

Call loan received

Transactional financial

liabilities

Financial liabilities

measured at fair value with

variations accounted into

current income account

Derivative financial

liabilities

1625725.00 1625725.00

Notes payable 507864518.19 507864518.19

Account payable 1039630798.64 1039630798.64

Prepayment received 278577848.54 278577848.54

Contract liabilities

Selling of repurchased

financial assets

Deposit received and

held for others

Entrusted trading of

securities

Entrusted selling of

securities

Employees' wage

payable

44513062.17 44513062.17

Taxes payable 107709999.19 107709999.19

Other payables 813118699.84 813118699.84

Including: interest

payable

2098971.44 2098971.44

Dividend

payable

Fees and commissions

payable

Reinsurance fee payable

Liabilities held for sales

Non-current liabilities

due in 1 year

200000000.00 200000000.00

Other current liabilities 9328682.25 9328682.25

Total current liabilities 3210369333.82 3210369333.82

Non-current liabilities:

Insurance contract

provision

Long-term loans 1193978153.39 1193978153.39

Bond payable

Including: preferred

stock

Perpetual

bond

Lease liabilities

Long-term payable

Long-term employees’

wage payable

Anticipated liabilities 6831162.99 6831162.99

Deferred earning 10401161.30 10401161.30

Deferred income tax

liabilities

1042086700.35 1042086700.35

Other non-current

liabilities

Total of non-current

liabilities

2253297178.03 2253297178.03

Total liabilities 5463666511.85 5463666511.85

Owner’s equity:

Share capital 1155481686.00 1155481686.00

Other equity tools

Including: preferred

stock

Perpetual

bond

Capital reserves 1454191.59 1454191.59

Less: Shares in stock 10831437.66 10831437.66

Other miscellaneous

income

7382087.59 2215662.01 -5166425.58

Special reserves

Surplus reserves 120475221.40 121000081.43 524860.03

Common risk provisions

Retained profit 3921225872.96 3881295568.33 -39930304.63

Total of owner’s equity

belong to the parent company

5195187621.88 5150615751.70 -44571870.18

Minor shareholders’

equity

Total of owners’ equity 5195187621.88 5150615751.70 -44571870.18

Total of liabilities and

owner’s interest

10658854133.73 10614282263.55 -44571870.18

About the adjustment

Balance Sheet of the Parent Company

In RMB

Item 31 December 2018 1 January 2019 Adjustment

Current asset:

Monetary capital 410118157.55 410118157.55

Transactional financial

assets

Financial assets

measured at fair value with

variations accounted into

current income account

Derivative financial

assets

Notes receivable 200000000.00 200000000.00

Account receivable 471039.12 479634.37 8595.25

Receivable financing

Prepayment 6733047.16 6733047.16

Other receivables 822543653.04 822644623.99 100970.95

Including: interest

receivable

Dividend

receivable

100000000.00 100000000.00

Inventory

Contract assets

Assets held for sales

Non-current assets due

in 1 year

Other current assets 919388.18 919388.18

Total current assets 1440785285.05 1440894851.25 109566.20

Non-current assets:

Debt investment

Sellable financial assets 21674008.23 -21674008.23

Other debt investment

Investment held until

mature

Long-term receivable

Long-term share equity

investment

983339494.35 983339494.35

Investment in other

equity tools

21674008.23 21674008.23

Other non-current

financial assets

Investment real estate 309189866.37 309189866.37

Fixed assets 53784811.23 53784811.23

Construction in process

Productive biological

assets

Gas & petrol

Use right assets

Intangible assets 2112301.97 2112301.97

R&D expense

Goodwill

Long-term amortizable

expenses

917499.68 917499.68

Deferred income tax

assets

34555598.81 34528207.26 -27391.55

Other non-current assets

Total of non-current assets 1405573580.64 1405546189.09 -27391.55

Total of assets 2846358865.69 2846441040.34 82174.65

Current liabilities

Short-term loans 200000000.00 200000000.00

Transactional financial

liabilities

Financial liabilities

measured at fair value with

variations accounted into

current income account

Derivative financial

liabilities

Notes payable

Account payable 676941.85 676941.85

Prepayment received 733274.16 733274.16

Contract liabilities

Employees' wage

payable

2145763.39 2145763.39

Taxes payable 341004.65 341004.65

Other payables 300006406.51 300006406.51

Including: interest

payable

740208.33 740208.33

Dividend

payable

Liabilities held for sales

Non-current liabilities

due in 1 year

Other current liabilities

Total current liabilities 503903390.56 503903390.56

Non-current liabilities:

Long-term loans 500000000.00 500000000.00

Bond payable

Including: preferred

stock

Perpetual

bond

Lease liabilities

Long-term payable

Long-term employees’

wage payable

Anticipated liabilities

Deferred earning

Deferred income tax

liabilities

64130617.41 64130617.41

Other non-current

liabilities

Total of non-current

liabilities

564130617.41 564130617.41

Total liabilities 1068034007.97 1068034007.97

Owner’s equity:

Share capital 1155481686.00 1155481686.00

Other equity tools

Including: preferred

stock

Perpetual

bond

Capital reserves 360835.52 360835.52

Less: Shares in stock 10831437.66 10831437.66

Other miscellaneous

income

8756553.46 3590127.88 -5166425.58

Special reserves

Surplus reserves 120475221.40 121000081.43 524860.03

Retained profit 504081999.00 508805739.20 4723740.20

Total of owners’ equity 1778324857.72 1778407032.37 82174.65

Total of liabilities and

owner’s interest

2846358865.69 2846441040.34 82174.65

About the adjustment

(4) Description of the 2019 implementation of the new financial instrument criteria new lease standard

retrospective adjustment of the previous period comparison data

√ Applicable □ Inapplicable

(1) Financial asset classification and measurement table before and after implementation of the new financial

instruments guidelines on 1 January 2019

A. Consolidated Financial Statement

December 31 2018 (original financial instruments

standard)

January 2019 (new financial instruments

standard)

Item Measurement

type

Book value Item Measure

ment type

Book value

Monetary capital Amortized

cost

1389062083.

76

Monetary

capital

Amortize

d cost

1389062083.7

6

Notes receivable Amortized

cost

139739692.84 Notes

receivable

Amortize

d cost

139739692.84

Notes receivable Amortized

cost

400000.00 Receivable

financing

Reason

for

measurem

ent at fair

value with

variations

accounted

into

current

income

account

400000.00

Account receivable Amortized

cost

1920075031.

85

Account

receivable

Amortize

d cost

1866763789.4

9

Other receivables Amortized

cost

139990188.26 Other

receivables

Amortize

d cost

142135200.54

Sellable financial

assets

Measured at

cost (equity

instruments)

21674008.23 Investment

in other

equity tools

Reason

for

measurem

ent at fair

value with

variations

accounted

into

current

21674008.23

income

account

Deferred income

tax assets

Amortized

cost

356474925.76 Deferred

income tax

assets

Amortize

d cost

363069285.66

B. Financial Statements of the Parent

December 31 2018 (original financial instruments standard) January 2019 (new financial instruments standard)

Item Measurement

type

Book value Item Measureme

nt type

Book value

Monetary capital Amortized cost 410118157.55 Monetary

capital

Amortized

cost

410118157.55

Notes receivable Amortized cost 200000000.00 Notes

receivable

Amortized

cost

200000000.00

Account receivable Amortized cost 471039.12 Account

receivable

Amortized

cost

479634.37

Other receivables Amortized cost 822543653.04 Other

receivables

Amortized

cost

822644623.99

Sellable financial

assets

Measured at

cost (equity

instruments)

21674008.23 Investment in

other equity

tools

Reason for

measureme

nt at fair

value with

variations

accounted

into current

income

account

21674008.23

Deferred income tax

assets

Amortized cost 34555598.81 Deferred

income tax

assets

Amortized

cost

34528207.26

② On January 1 2019 the book value of the original financial assets was adjusted to the book value of the new financial

instruments according to the new financial instruments guidelines

A. Consolidated Financial Statement

Item Book value on

December 31 2018

(original financial

instruments

standard)

Re-classification Re-measurement Book value on January

1 2019 (new financial

instruments standard)

1. Financial assets measured at amortized cost under the new financial instruments standard

Notes receivable (original

financial instrument

standard)

140139692.84

Less: transferred out to

receivables financing

400000.00

Re-measurement: expected

credit loss

Notes receivable (new

financial instrument

standard)

139739692.84

Receivable financing 400000.00 400000.00

Receivable account

(original financial

instrument standard)

1920075031.85

Re-measurement: expected

credit loss

53311242.36

Receivable account

(original financial

instrument standard)

1866763789.49

Other receivables (original

financial instrument

standard)

139990188.26

Add: re-measurement:

expected credit loss

-2145012.28

Other receivables (new

financial instrument

standard)

142135200.54

2. Financial assets measured at fair value under the new financial instruments standard and whose changes are included

in other comprehensive income

Tranfer from sellable

financial assets

21674008.23

Add: re-measurement at

fair value

Investment in other equity

instruments (amount listed

according to the new

financial instrument

standard)

21674008.23

B. Financial Statements of the Parent

Item Book value on

December 31 2018

(original financial

instruments

standard)

Re-classification Re-measurement Book value on January

1 2019 (new financial

instruments standard)

Receivable account

(original financial

instrument standard)

471039.12

Add: re-measurement: -8595.25

expected credit loss

Receivable account (new

financial instrument

standard)

479634.37

Other receivables (original

financial instrument

standard)

822543653.04

Add: re-measurement:

expected credit loss

-100970.95

Other receivables (new

financial instrument

standard)

822644623.99

③ On January 1 2019 the new financial instruments standard will be implemented to adjust the original financial asset

impairment reserve to the adjustment table of the new financial instrument standard financial asset impairment reserve

A. Consolidated Financial Statement

Measurement type Impairment reserve

accrued on December

31 2018 (according to

the original financial

instrument standard)

Re-classification Re-measurement Impairment reserve

accrued on January 1 2019

(according to the new

financial instruments

standard)

(1) Financial assets measured

at amortized cost

Including: Provision for

receivable account

impairment

366424083.34 53311242.36 419735325.70

Provision for impairment of

other receivables

40885037.45 -2145012.28 38740025.17

(2) Financial assets measured

at fair value with variations

accounted into current

income account

Provision for impairment of

available-for-sale financial

assets

6888567.44 -6888567.44

B. Financial Statements of the Parent

Measurement type Impairment reserve

accrued on December

31 2018 (according to

the original financial

instrument standard)

Re-classification Re-measurement Impairment reserve

accrued on January 1

2019 (according to the

new financial instruments

standard)

(1) Financial assets measured

at amortized cost

Including: Provision for

receivable account

impairment

14568.22 -8595.25 5972.97

Provision for impairment of

other receivables

14042899.68 -100970.95 13941928.73

(2) Financial assets measured

at fair value with variations

accounted into current

income account

Provision for impairment of

available-for-sale financial

assets

6888567.44 -6888567.44

VI. Taxation

1. Major taxes and tax rates

Tax Tax basis Tax rate

VAT Taxable income 3 5 6 9 10 11 13 16

City maintenance and construction tax Taxable turnover 1 5 7

Enterprise income tax Taxable income See the following table

Education surtax Taxable turnover 3

Local education surtax Taxable turnover 2

Tax rates applicable for different tax payers

Tax payer Income tax rate

The Company 25%

Shenzhen Fangda Jianke Co. Ltd. (hereinafter Fangda Jianke) 15%

Fangda Zhichuang Technology Co. Ltd (Fangda Zhichuang) 15%

Fangda New Material (Jiangxi) Co. Ltd. (hereinafter Fangda

New Material)

15%

Dongguan Fangda New Material Co. Ltd. (hereinafter

Dongguan New Material)

15%

Shenzhen Kexunda Software Co. Ltd. (hereinafter Kexunda) 25%

Chengdu Fangda Construction Technology Co. Ltd. (hereinafter

Chengdu Fangda)

15%

Shenzhen Fangda Property Development Co. Ltd. (hereinafter

Fangda Property Development)

25%

Shenzhen Fangda New Energy Co. Ltd. (hereinafter Fangda

New Energy)

25%

Shenzhen Fangda Property Development Co. Ltd. (hereinafter

Fangda Property Development)

25%

Jiangxi Fangda Property Development Co. Ltd. (hereinafter

Jiangxi Property Development)

25%

Pingxiang Fangda Luxin New Energy Co. Ltd. (hereinafter

Luxin New Energy)

25%

Pingxiang Xiangdong Fangda New Energy Co. Ltd. (hereinafter

Xiangdong New Energy)

25%

Nanchang Xinjian Fangda New Energy Co. Ltd. (hereinafter

Xinjian New Energy)

25%

Dongguan Fangda New Energy Co. Ltd. (hereinafter Dongguan

New Energy)

25%

Shenzhen QIanhai Kechuangyuan Software Co. Lt.d (hereinafter

Kechuangyuan Software)

25%

Fangda Automatic (Hong Kong) Co. Ltd. (hereinafter

Automation Hong Kong)

16.50%

Shihui International Holding Co. Ltd. (hereinafter Shihui

International)

16.50%

Shenzhen Hongjun Investment Co. Ltd. 25%

Fangda Australia Pty Ltd (hereinafter Jianke Australia) 30%

Shanghai Fangda Jingling Technology Co. Ltd. (hereinafter

Jingling Technology)

25%

Shenzhen Fangda Cloud Rail Technology Co. Ltd. (hereinafter

Fangda Cloud Rail)

25%

Shanghai Fangda Jianzhi Technology Co. Ltd. (hereinafter

Shanghai Fangda Jianzhi)

25%

Shenzhen Zhongrong Litai Investment Co. Ltd. (Zhongrong

Litai)

25%

Chengda Fangda Curtain Wall Technology Co. Ltd. 25%

Fangda Southeast Asia Co. Ltd. 20%

2. Tax preference

(1) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of Technological Innovation Shenzhen

Commission of Finance Shenzhen National Tax Bureau and Shenzhen Local Tax Bureau Fangda Jianke was entitled to enjoy a tax

preference of enterprise income tax of 15% for three years (2018-2020) since the qualifications were awarded on October 16 2018.

(2) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of Technological Innovation Shenzhen

Commission of Finance Shenzhen National Tax Bureau and Shenzhen Local Tax Bureau Fangda Zhichuang was entitled to enjoy a

tax preference of enterprise income tax of 15% for three years (2018-2020) since the qualifications were awarded on October 16

2018.

(3) According to the Certification of High-tech Enterprise issued by Jiangxi Ministry of Science and Technology Jiangxi Ministry of

Finance Jiangxi National Tax Bureau and Jiangxi Local Tax Bureau Fangda New Material was entitled to enjoy a tax preference of

enterprise income tax of 15% for three years (2018-2020) since the qualifications were awarded on August 13 2018.

（4） On November 7 2014 the State Tax Bureau of Xinjin County of Sichuan Province approved by "zzy024" a subsidiary of

Chengdu a large company belonging to the industrial enterprises in the western region shall implement the enterprise income tax

concession with application rate of 15 per cent as of January 1 2014.

(4) On December 14 2017 the subsidiary Chengdu Fangda Construction Technology Co. Ltd. obtained the ―High-tech Enterprise

Certificate‖ jointly issued by Sichuan Science and Technology Department Sichuan Provincial Department of Finance Sichuan

Provincial State Taxation Bureau and Sichuan Provincial Local Taxation Bureau within three years after obtaining the qualification

of high-tech enterprises (2017 to 2019) the income tax is levied at 15%.

(6) On November 2 2015 the Songshan Lake Taxation Bureau of the State Taxation Bureau of Dongguan City notified the

―Songshan Lake National Taxation Pass [2015] No. 3305‖ that the photovoltaic power generation project undertaken by the

subsidiary Dongguan Fangda New Energy Co. Ltd. belongs to public infrastructure projects supported by the state will be exempted

from corporate income tax for three years and corporate income tax will be halved for three years. In 2015 the Company entered the

exemption period.

(7) On March 2 2016 according to the document issued by Luxi National Tax Bureau the PV power generation project undertaken

by Subsidiary Pingxiang Fangda Luxin New Energy Co. Ltd became the infrastructure project supported by the central government.the Company enjoys a three-year enterprise income tax relief and 50% reduction for another three years. In 2016 the Company

entered the exemption period.

(8) On June 2 2016 according to the document issued by Nanchang Xinjian District National Tax Bureau the PV power generation

project undertaken by Subsidiary Nanchang Xinjian Fangda New Energy Co. Ltd became the infrastructure project supported by the

central government. the Company enjoys a three-year enterprise income tax relief and 50% reduction for another three years. In 2016

the Company entered the exemption period.

(9) According to the registration to Shenzhen National Tax Bureau subsidiary Kechuangyuan Software became a newly established

software and integrated circuit designing company and can enjoy the two-year full exemption and three-year half-exemption of the

enterprise income tax from the first year that the Company records profit. Kexunda started making profits in 2016 and therefore starts

to enjoy the exemption.

(5) On November 30 2016 the subsidiary Dongguan Fangda New Materials Co. Ltd. obtained the ―High-tech Enterprise

Certificate‖ jointly issued by Guangdong Science and Technology Department Guangdong Provincial Department of Finance

Guangdong Provincial State Taxation Bureau and Guangdong Provincial Local Taxation Bureau. The income tax shall be levied at

15% within three years after the qualification of the high-tech enterprise is recognized (2016 to 2018). On December 2 2019 the

Office of the National High-tech Enterprise Certification Management Work Leading Group issued a notice on the high-tech

enterprise certification management work network on the announcement of the second batch of Guangdong Province's 2019

approved high-tech enterprise lists. The publicity period is 10 On the working day the subsidiary Dongguan New Materials Co. Ltd.

is on this public announcement list.VII. Notes to the consolidated financial statements

1. Monetary capital

In RMB

Item Closing balance Opening balance

Inventory cash: 4244.86 5167.01

Bank deposits 755440390.76 994706369.72

Other monetary capital 454367343.33 394350547.03

Total 1209811978.95 1389062083.76

Including: total amount deposited in

overseas

54640438.33 25269577.35

Other note

① The restricted funds used in bank deposits are RMB30184 637.23 of which RMB229446#*@$ and RMB7239 903.87 are

frozen due to lawsuit; In other currency funds 454357#*@$3 yuan is restricted in use which mainly includes deposit of draft

deposit of stage guarantee and deposit of bond. In addition there are no other funds in the monetary funds at the end of the period

that have restrictions on use and potential recovery risks due to mortgages pledges or freezing.② In the preparation of the cash flow statement the above-mentioned deposits and other restricted deposits are not used as cash

and cash equivalents.

③ At the end of the period the amount deposited by the Group overseas is equivalent to RMB 54640438.33.

2. Transactional financial assets

In RMB

Item Closing balance Opening balance

Financial assets measured at fair value

with variations accounted into current

income account

10330062.18

Including:

Investment in financial products 10330062.18

Including:

Total 10330062.18

Others:

3. Derivative financial assets

In RMB

Item Closing balance Opening balance

Others:

3. Notes receivable

(1) Classification of notes receivable

In RMB

Item Closing balance Opening balance

Bank acceptance 45540691.10 5600000.00

Commercial acceptance 259530239.87 134139692.84

Total 305070930.97 139739692.84

(2) The Group has no endorsed or discounted immature receivable notes at the end of the period.

In RMB

Item De-recognized amount Not de-recognized amount

Bank acceptance 22141658.40

Commercial acceptance 121102597.35

Total 143244255.75

4. Account receivable

(1) Account receivable disclosed by categories

In RMB

Type

Closing balance Opening balance

Remaining book

value

Bad debt provision

Book

value

Remaining book

value

Bad debt provision

Book value

Amount

Proportio

n

Amount

Provision

rate

Amount

Proportio

n

Amount

Provision

rate

Account receivable

for which bad debt

provision is made by

group

127405

670.07

5.30%

127405