Zhejiang Dahua Technology Co., Ltd.
This document is a translated version of the Chinese version 2021 Semi-annual Report “2021
( 年半年度报告”),
and the published 2021 Semi-annual Report in the Chinese version shall prevail.
The complete published Chinese 2021 Semi-annual Report may be obtained at http://www.cninfo.com.cn.
August, 2021
Section I Important Notes, Contents and Definitions
The Board of Directors, the Board of Supervisors, directors, supervisors and senior
executives of the Company hereby guarantee that the information presented in this
semi-annual report is authentic, accurate, complete and free of any false records,
misleading statements or material omissions, and they will bear joint and several liability for
such information.
Fu Liquan, the Company's legal representative, Xu Qiaofen, chief accountant, and Zhu
Zhuling, person in charge of accounting institution (Accounting Officer) hereby declare and
warrant that the financial statements in the Semi-Annual Report are authentic, accurate,
and complete.
All directors attended the meeting of the Board of Directors for deliberation of this
annual report.
During the reporting period, there was no significant change in the risks faced by the
Company. The Company has been trying to identify all kinds of risks and actively take
countermeasures to avoid and reduce the risks:
stringent prevention and control measures to protect the health of employees at home and
abroad. In addition, the Company offers technological solutions to contribute to the global
effort against the pandemic.
comprehensively reviewed various potential supply risks through dedicated operations, and
strengthened the sustainable and safe supply of key materials by means of research and
development of backup scheme and diversified supply sources to ensure the security of the
supply chain.
than 100 countries and regions overseas. International business operation may face trade
protection risks. In addition, the resurgence of Covid-19 around the world has resulted in
more uncertainties to the overseas economic environment, which may adversely affect the
development of the Company's local business. To actively prevent and respond to
international business risks, the Company has established an overseas compliance and
risk control system, continuously strengthened its understanding of and ability to adapt to
the laws and regulations as well as the political and economic environment of the regions in
which the Company operates, and formulated differentiated "One Country, One Strategy"
national business strategies according to the political and economic changes in different
regions to minimize business risks.
United States Dollars ("USD"), while overseas business continues to grow. Therefore,
fluctuations in the foreign exchange rate may affect the profits of the Company. The
Company attaches great importance to exchange rate risk control and adopts various
means to effectively control such risks: on the one hand, it manages various currencies by
category, guides the contracting in mainstream currencies and using such currencies to
hedge against the U.S. dollar while increasing the proportion of overseas localized
contracting; for the countries contracted in non-mainstream currencies, exchange rate
protection clauses and price adjustment mechanisms will be set in advance in the contracts
to reduce the risk of exchange rate fluctuations; on the other hand, the Company effectively
uses foreign exchange hedging and a series of derivative instruments, among others, to
offset and hedge exchange rate risks without speculative purposes.
network communications, cloud computing, big data, and AI, and the upgraded uses of
smartphones, business models in the IOT era may have an impact on the traditional
industry development. If an enterprise cannot grasp opportunities brought about by the
business model transformation in a timely manner, it may face the risk that the original
market structure becomes broken. The Company continues to focus on and study the
major changes in global economy, industry and technology, analyze the industry
development logic, and predict the evolution of global security industry and IoT industry, the
continuous integration of video, information communication and digital technologies,
diversification and uncertainty of customer demands. While consolidating the
advantageous market, The Company actively explores and pilots new businesses and new
commercial mode, and carry out business and technical layout.
technology-intensive industry, featuring extremely fast changes. If the Company is unable
to keep up with development trends in the industry's technology, to pay full attention to
customers' diversified individual needs, and to be followed by sufficient R&D investments, it
will still face the risk of losing market competitiveness due to discontinuous innovation. By
increasing R & D investment, the Company continues to strengthen research on core
technologies in AI, video cloud, machine vision and other fields, and reserves product,
technology, management and talent resources for a broader market in the future, so as to
achieve sustainable and steady development of business.
strengthens resource investment to ensure safe and reliable operations of the security
system so as to respond to the product security risks on the Internet. However, hackers
attacks, computer viruses, physical security vulnerabilities, natural disasters, accidents,
power interruptions, telecommunications failures, terrorism, and warfare events may still
occur from time to time, resulting in security vulnerabilities, system failures, or service
interruptions. The Company has founded a cyber security committee, and set up a
professional security team to develop company-level product safety plan, ensuring product
safety in whole process from requirements to design, coding, and testing process. At the
same time, the Company actively carry out technical exchanges and cooperation with
mainstream safety enterprises, safety evaluation agencies and corresponding industry
associations to provide customers with safe products and solutions.
self-owned brand strategy will likely bring about intellectual property risks and patent
infringement, which may cause fluctuation in business relations and public opinions,
increasing lawsuits and rising costs. The Company attaches great importance to
technological innovation and has established protection and management mechanism for
intangible assets such as innovation achievements, self-owned brands, trade secrets, and
constantly gathers advantageous IP assets; With IP compliance risk control system, the
Company continues to strengthen its ability to understand and grasp the IP laws and
regulations, administrative and judicial environment of the region where the company's
business is located in.
The Company plans to pay no cash dividends, no bonus shares and no capital
increase by way of capitalization of provident fund.
Contents
Documents Available for Reference
I. Financial statements signed and sealed by Mr. Fu Liquan, the Company's legal
representative, Ms. Xu Qiaofen, chief accountant, and Ms. Zhu Zhuling, the person in
charge of accounting institution.
II. Original copies of all the Company's documents and announcements published on
media designated by China Securities Regulatory Commission within the reporting period.
III. Documents available for review at the securities department of the Company.
Definitions
Item Refers To Definitions
Reporting Period Refers To January 1, 2021 to June 30, 2021
Dahua, company, the company Refers To Zhejiang Dahua Technology Co., Ltd.
Dahua System Engineering Refers To Zhejiang Dahua System Engineering Co., Ltd.
Dahua Vision Technology Refers To Zhejiang Dahua Vision Technology Co., Ltd.
Dahua Security Network Refers To Zhejiang Dahua Security Network Operation Service Co., Ltd.
Dahua Ju'an Refers To Zhejiang Dahua Ju'an Technology Co., Ltd.
Guangxi Dahua Information Refers To Guangxi Dahua Information Technology Co., Ltd.
Dahua Security Refers To Zhejiang Dahua Security Service Co., Ltd.
Guangxi Security Refers To Guangxi Dahua Security Service Co., Ltd.
Huatu Microchip Refers To Zhejiang Huatu Microchip Technology Co., Ltd.
Hangzhou Xiaohua Refers To Hangzhou Xiaohua Technology CO., LTD.
Dahua Zhilian Refers To Zhejiang Dahua Zhilian Co., Ltd.
Dahua investment management Refers To Zhejiang Dahua Investment Management Co., Ltd.
South North United Refers To South-North United Information Technology Co., Ltd.
Guangxi Zhicheng Refers To Guangxi Dahua Zhicheng Co., Ltd.
Hangzhou Huacheng Refers To Hangzhou Huacheng Network Technology Co., Ltd.
Xinjiang Information Refers To Xinjiang Dahua Zhixin Information Technology Co., Ltd.
HuaRay Technology Refers To Zhejiang HuaRay Technology Co., Ltd.
Fuyang Hua'ao Refers To Hangzhou Fuyang Hua'ao Technology Co., Ltd.
Huafei Intelligent Refers To Zhejiang Huafei Intelligent Technology CO., LTD.
Huachuang Vision Refers To Zhejiang Huachuang Vision Technology Co., Ltd.
Guizhou Huayi Refers To Guizhou Huayi Shixin Technology Co., Ltd.
Xinjiang Zhihe Refers To Xinjiang Dahua Zhihe Information Technology Co., Ltd.
China Standard Intelligent Security Refers To China Standard Intelligent Security Technology Co., Ltd.
Guangxi Huacheng Refers To Guangxi Huacheng Technology Co., Ltd.
Meitan Dahua Technology Refers To Guizhou Meitan Dahua Information Technology Co., Ltd.
Inner Mongolia Zhimeng Refers To Inner Mongolia Dahua Zhimeng Information Technology Co., Ltd.
Xinjiang Zhitian Refers To Xinjiang Dahua Zhitian Information Technology Co., Ltd.
Xinjiang Xinzhi Refers To Xinjiang Dahua Xinzhi Information Technology Co., Ltd.
Xinjiang Huayue Refers To Xinjiang Dahua Huayue Information Technology Co., Ltd.
Leapmotor Technology Refers To Zhejiang Leapmotor Technology Co., Ltd.
Leapmotor Refers To Leapmotor Automobile Co., Ltd.
Tianjin Dahua Refers To Tianjin Dahua Information Technology Co., Ltd.
Dahua Zhilong Refers To Hunan Dahua Zhilong Information Technology Co., Ltd.
Huaxiao Technology Refers To Zhejiang Huaxiao Technology Co., Ltd.
Vision Technology Refers To Zhejiang Fengshi Technology Co., Ltd.
Xi'an Dahua Zhilian, Xi'an Dahua Refers To Xi'an Dahua Zhilian Technology Co., Ltd.
Wuxi Ruipin Refers To Wuxi Dahua Ruipin Technology Co., Ltd.
Huaxuan Technology Refers To Zhejiang Huaxuan Technology Co., Ltd.
Beijing Huayue Shangcheng Information Technology Service Co.,
Beijing Huayue Refers To
Ltd.
Shanghai Huashang Chengyue Information Technology Service
Shanghai Huashang Refers To
Co., Ltd.
Dahua Jinzhi Refers To Zhejiang Dahua Jinzhi Technology Co., Ltd.
Dahua Guangxun Refers To Sichuan Dahua Guangxun Photoelectric Technology Co., Ltd.
Huajuan Technology Refers To Hangzhou Huajuan Technology Co., Ltd.
Dahua Hong Kong Refers To Dahua Technology (HK) Limited
Zhoushan Operation Refers To Zhejiang Zhoushan Digital Development Operation Co., Ltd
Yunnan Zhili Refers To Yunnan Zhili Technology Co., Ltd
Guangxi Dahua Technology Refers To Guangxi Dahua Technology Co., Ltd.
Dahua Storage Refers To Zhejiang Dahua Storage Technology Co., Ltd.
Huaruijie Refers To Zhejiang Huaruijie Technology Co., Ltd.
Chengdu Zhilian Refers To Chengdu Dahua Zhilian Information Technology Co., Ltd.
Chengdu Zhian Refers To Chengdu Dahua Zhian Information Technology Service Co., Ltd.
Chengdu Zhishu Refers To Chengdu Dahua Zhishu Information Technology Service Co., Ltd.
Chengdu Zhichuang Refers To Chengdu Zhichuang Yunshu Technology Co., Ltd.
Chengdu Smart Refers To Chengdu Huishan Smart Network Technology Co., Ltd.
Huakong Software Refers To Zhejiang Huakong Software Co., Ltd.
Xinsheng Electronic Refers To Zhejiang Xinsheng Electronic Technology Co., Ltd.
Huacheng Software Refers To Hangzhou Huacheng Software Technology Co., Ltd.
Guizhou Dahua Refers To Guizhou Dahua Information Technology Co., Ltd.
Henan Dahua Refers To Henan Dahua Zhilian Information Technology Co., Ltd.
Waythcan Refers To Zhejiang Waythcan Technology Co., Ltd.
Zhengzhou Dahua Zhian Refers To Zhengzhou Dahua Zhian Information Technology Co., Ltd.
Dahua USA Refers To Dahua Technology USA Inc.
Dahua Europe Refers To Dahua Europe B.V.
Dahua Middle East Refers To Dahua Technology Middle East FZE
Dahua Mexico Refers To Dahua Technology Mexico S.A. De C. V
Dahua Chile Refers To Dahua Technology Chile SPA
Dahua Malaysia Refers To Dahua Security Malaysia SDN. Bhd.
Dahua Korea Refers To Dahua Technology Korea Company Limited
Dahua Indonesia Refers To Pt. Dahua Vision Technology Indonesia
Dahua Colombia Refers To Dahua Technology Colombia S.A. S
Dahua Australia Refers To Dahua Technology Australia Pty Ltd.
Dahua Singapore Refers To Dahua Technology Singapore PTE. Ltd.
Dahua South Africa Refers To Dahua Technology South Africa Proprietary Limited
Dahua Peru Refers To Dahua Technology Perú S.A.C
Dahua Russia Refers To Dahua Technology Rus Limited Liability Company
Dahua Technology Brasil Comércio E Servi?os Em Seguran?a
Dahua Brazil Refers To
Eletr?nica Ltda
Dahua Canada Refers To Dahua Technology Canada Inc.
Dahua Panama Refers To Dahua Technology Panama S.A.
Dahua Hungary Refers To Dahua Technology Hungary KFT
Dahua Poland Refers To Dahua Technology Poland SP. Z O.O.
Dahua Italy Refers To Dahua Technology Italy S.R.L.
Dahua Tunisia Refers To Dahua technology tunisia limited liability company
Dahua Kenya Refers To Dahua Technology Kenya Limited
Dahua UK Refers To Dahua Technology UK Limited
Dahua Germany Refers To Dahua Technology Gmbh
Dahua Serbia Refers To Dahua Technology Srb D.O.O.
Dahua India Refers To Dahua Technology India Private Limited
Dahua Turkey Refers To Dahua Guvenlik Teknolojileri Sanayi Ve Ticaret A.S.
Dahua Czech Refers To Dahua Technology Czech S.R.O.
Dahua Argentina Refers To Dahua Argentina S.A.
Dahua Spain Refers To Dahua Iberia, S.L.
Dahua Kazakhstan Refers To Dahua Technology Kazakhstan LLP
Dahua Denmark Refers To Dahua Technology Denmark APS.
Dahua France Refers To Dahua Technology France SAS
Dahua Lorex (US) Corporation Refers To Lorex corporation
Dahua Technology Holdings Refers To Dahua Technology Holdings Limited
Dahua New Zealand Refers To Dahua Technology New Zealand Limited
Dahua Netherlands Refers To Dahua Technology Netherlands B.V.
Dahua Morocco Refers To Dahua Technology Morocco Sarl
Dahua Romania Refers To Dahua Technology S.R.L
Dahua Uzbekistan Refers To Dahua Vision LLC
Dahua Lorex (Canada) Corporation Refers To Lorex Technology Inc.
Dahua Bulgaria Refers To Dahua Technology Bulgaria Eood
Dahua Sri Lanka Refers To Dahua Technology China (PVT) Ltd
Dahua Pakistan Refers To Dahua Technology Pakistan (Private) Limited
Dahua Thailand Refers To Dahua Technology (Thailand) Co., Ltd.
Dahua Nigeria Refers To Dahua Technology Nigeria Representative Ltd
Dahua Israel Refers To Dahua Technology Israel Ltd.
Dahua Mexico Refers To Vismextech Dhm Servicios, S.A. De C.V.
Imou Netherlands Refers To Imou Network Technology Netherlands B.V.
Dahua Loris (UK) Corporation Refers To Lorex Technology UK Limited
Dahua Japan Refers To Dahua Technology Japan
Imou Hong Kong Refers To Imou Network (Hong Kong) Technology Co., Ltd
Dahua Qatar Refers To Dahua Technology QFZ LLC
Dahua Panama SEM Regional
Refers To Dahua Technology Pacific S.A.
Headquarters
Section II Company Profile and Key Financial Indicators
I. Company Profile
Stock Abbreviation DAHUA Stock Code 002236
Stock Exchange Shenzhen Stock Exchange
Company Name in Chinese 浙江大华技术股份有限公司
Company Abbreviation in
大华股份
Chinese (If any)
Company Name in Foreign
ZHEJIANG DAHUA TECHNOLOGY CO., LTD.
Language (If any)
Legal Representative Fu Liquan
II. Contact Person and Contact Information
Secretary of the Board Representative of Securities Affairs
Name Wu Jian Zhu Leiqian
No. 1199 Binan Road, Binjiang District, No. 1199 Binan Road, Binjiang District,
Contact Address
Hangzhou City, Zhejiang Province Hangzhou City, Zhejiang Province
Tel. 0571-28939522 0571-28939522
Fax 0571-28051737 0571-28051737
E-mail zqsw@dahuatech.com zqsw@dahuatech.com
III. Other Information
Whether the Company’s registered address, office address, postal code, website and e-mail address has changed during
the reporting period
□ Applicable √ Not applicable
The Company’s registered address, office address, postal code, website and e-mail address have not changed during the
reporting period, which can be found in the 2020 Annual Report.
Whether information disclosure and location has changed during the reporting period
□ Applicable √ Not applicable
The name of the Company’s selected information disclosure newspaper, the URL of the website designated by the CSRC
where the semi-annual report is posted, and the place where the Company’s semi-annual report is available have not
changed during the reporting period, which can be found in the 2020 Annual Report.
IV. Key Accounting Data and Financial Indicators
Whether the Company needs performed retroactive adjustment or restatement of accounting data in prior years or not
□ Yes √ No
Increase/Decrease of the
The Current Reporting The Same Period of Current Reporting Period
Period Last Year Compared with the Same
Period of the Previous Year
Operating income (RMB) 13,505,005,733.89 9,838,328,853.62 37.27%
Net profit attributable to shareholders of
the listed Company (RMB)
Net profit attributable to shareholders of
the listed company after deducting 1,439,592,047.22 1,290,258,785.10 11.57%
non-recurring gains and losses (RMB)
Net cash flow generated by operational
-871,108,797.99 -106,927,963.95 -714.67%
activities (RMB)
Basic Earnings per Share (RMB/Share) 0.56 0.47 19.15%
Diluted Earnings per Share
(RMB/Share)
Weighted Average ROE 7.92% 8.35% -0.43%
Increase/Decrease at the
At the End of the Current At the End of the End of the Current Reporting
Reporting Period Previous Year Period Compared with the
End of the Previous Year
Total assets (RMB) 39,765,934,297.15 36,595,034,080.75 8.66%
Net assets attributable to shareholders
of the listed company (RMB)
V. Differences in Accounting Data Under Domestic and Foreign Accounting
Standards
(1) Differences of net profits and net assets in the financial reports disclosed according to the
international accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
During the reporting period of the company, there is no difference between the net profits and net assets in the financial
reports disclosed according to international accounting standards and Chinese accounting standards.
(2) Differences between the net profits and net assets in the financial reports disclosed
according to the overseas accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
During the reporting period of the company, there is no difference between the net profits and net assets in the financial
reports disclosed according to overseas accounting standards and Chinese accounting standards.
VI. Non-recurring Gains and Losses Items and Their Amounts
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Profits or losses from disposal of non-current assets (including the
write-off for the accrued impairment of assets)
The government subsidies included in the current profits and losses
(excluding the government subsidies closely related to regular
businesses of the Company and issued in the quota or quantity based
on the national standards)
Gains or losses from investment or asset management entrusted to
others
Profits and losses resulting from the changes in fair value for holding
trading financial assets, derivative financial assets and trading financial
liabilities, derivative financial liabilities and investment income from
disposal of trading financial assets, derivative financial assets, trading 78,425,697.53
financial liabilities, derivative financial liabilities, and other obligatory
right investment, excluding the effective hedging businesses related to
the regular business operation of the Company
Non-Operating Revenue and expenses other than the above 2,069,343.56
Other gains and losses items that fit the definition of non-recurring gains
and losses
Less: Impact of income tax 42,970,480.79
Impact of minority equity (after tax) 10,776,144.14
Total 203,583,840.33 --
For items defined as non-recurring gains and losses according to the No. 1 Explanatory Announcement on Information
Disclosure for Companies Offering Their Securities to Public - Non-recurring Gains and Losses, or non-recurring gains
and losses items listed in the said document defined as recurring ones, please specify the reasons.
□ Applicable √ Not applicable
In the reporting period, the Company did not define any non-recurring gains and losses items defined and listed in the No.
Gains and Losses, as recurring gains and losses items.
Section III Management Discussion and Analysis
I. The Principal Business of the Company during the Reporting Period
During the reporting period, there was no major change in the Company's principal business. For details, please refer to
the 2020 Annual Report.
II. Core Competitiveness Analysis
During the reporting period, there was no major change in the Company's core competitiveness. For details, please refer
to the 2020 Annual Report.
III. Main Business Analysis
Is it the same as the disclosure of the Company’s main businesses during the reporting period?
□ Yes √ No
In the first half of 2021, the Covid-19 pandemic intertwined with the changes in the international
situation, and commodity prices around the world rose sharply under multiple factors such as
demand-side recovery, supply-side constraints, and liquidity easing. Coupled with the continued
sanctions and restrictions imposed by the United States on some Chinese technology companies, the
global semiconductor supply chain experienced phased and structural dislocations. In the face of the
complex market environment changes, the Company made every efforts to ensure project delivery by
various means. On the one hand, it adhered to various R&D strategies to ensure stable product
substitution and update; on the other hand, it maintained the stability of raw material supply by
increasing inventory and strengthening strategic cooperation with suppliers. Meanwhile, the Company
kept on technological innovation, with continuous investment in core technologies, and accelerated
layout of new directions and new products, greatly enriching the application scenarios of solutions.
During the reporting period, the Company achieved operating revenue of 13.505 billion yuan, a
year-on-year increase of 37.27%, and a net profit attributable to shareholders of listed companies of
Main business strategies of the Company include:
and core technologies
The Company continued to step up its investment in core technologies such as AI, cloud computing
and big data, as well as software capacity building. During the reporting period, the Company invested
RMB 1.406 billion in R&D, accounting for 10.41% of the operating revenue in the first half of 2021.
The Company's AI continued to achieve good results in technology competitions and real-world
tests. In the first half of 2021, the Company won the first place in a number of algorithm evaluations in
the field of text recognition, such as the single character recognition and character line recognition of the
ICDAR ReCTS Chinese sign recognition challenge and the Cityscapes dataset-Instance-Level Semantic
Labeling Task instance segmentation task. In response to the changing application scenarios of AI, the
Company keeps improving the system and continuously enriches its functions, thus enhancing the
real-world effect. Among them, the Genius AI open platform was further improved and perfected to assist
its partners and customers efficiently facilitate the implementation of intelligence in the industry.
The Company invested heavily in the basic software platform to build a smart IOT operating system
for the pan-IOT industry and established the technical base of “One System and Two Platforms” for cities
and enterprises, thus rapidly improving the overall software architecture capability and software opening
capability. Meanwhile, the Company's software module development and management capabilities were
continuously enhanced by relying on the internal software modular development and application
management platform. In the first half of 2021, the Company's software business modules continued to
refine and improve, with continuous improvement in software reusability and reduction in software
development costs. The continuous accumulation of software modularity boosted the efficiency of the
Company's basic platform and the rapid incubation of business, and contributed to the rapid response
and delivery of customer business in all regional R&D teams.
Facing the wave of digital transformation of enterprises, the Company vigorously invested in the
cloud business represented by “Yunrui”, and established the “digital intelligence” technology base of
enterprises in the public cloud field, including the intelligent middle platform, IOT middle platform,
business middle platform and big data middle platform. On this basis, the Company established 6 major
SaaS application product lines of Yunrui, providing universal smart IOT solutions for smart education,
smart community, smart chain, smart agriculture, smart logistics, and smart construction sites.
Meanwhile, the Company also built opening capabilities from PaaS to SaaS and AIopen capabilities, and
partnered with ecological partners to build an open, co-constructed and win-win solution ecology,
combined with the Company's software and hardware open capabilities, to fuel industrial change and
empower thousands of industries to upgrade their digital intelligence.
During the reporting period, the Company has further optimized the investment structure for
software architecture capability, basic software platform, enterprise application software, government
application software, Yunrui cloud business system and overseas software, which continuously
enhanced the degree of its professionalism; through more comprehensive open APIs at the PaaS, DaaS,
and VSaas levels, the application development support capability of partners was continuously
enhanced; through the sinking of software technical resources to the front line, the response speed of
software in close proximity was accelerated and the software delivery service capability was improved.
The Company attaches great importance to the cultivation of innovative businesses, and vigorously
innovate and continuously expand new high growth fields by relying on its R&D accumulation in the
video IOT industry as well as its supply chain integration capability and market ability. The main
innovative businesses of the Company are machine vision, video collaboration, smart home, smart
fire-fighting, smart storage, automotive electronics, smart drone, smart security inspection, smart display
control and smart control. With deep accumulation of industry development, strong technical foundation,
comprehensive insight into customer needs and in-depth understanding of segmented industries, the
Company's machine vision, video collaboration and smart home businesses are developing rapidly,
providing new impetus for the Company's sustained high growth and high quality development;
meanwhile, other innovative businesses are further advanced in an orderly manner in accordance with
the Company's established strategic plan. During the reporting period, the Company achieved an overall
revenue of RMB 1.197 billion in innovative business, an increase of 94.25% percent year-on-year,
building up strength for the Company's future high-speed growth.
technology and business
The Company continues to optimize the construction of its marketing network, sinking its domestic
business to the county and township level; regarding its overseas business, it continues to deepen its
country-centric business sinking to improve customer coverage and response speed. Meanwhile, the
Company further strengthens the regional technical marketing system, enhances the synergy between
technology and business, and comprehensively improves the technical marketing capability.
During the reporting period, the Company continued to expand its enterprise business and
accelerate towards the digital transformation. For large corporate clients, the Company implemented a
tiered and graded service strategy, with one strategy for each client, digging deeper into customers'
needs in production and management and providing systematic solutions and services. At present, the
Company has released dozens of solutions for the large enterprise market based on its digital
intelligence base, providing comprehensive services for digital upgrading of enterprises. For small and
medium-sized corporate clients, the Company continued to sink its business and simultaneously joined
hands with partners to promote the common construction and sharing of customers, focusing on the
ecological construction of value customers to achieve comprehensive market coverage.
The Company attaches great importance to the construction of integration cooperation ecosystem,
implements hierarchical and graded management for integration eco-partners, and gives full play to their
role as amplifier through good services. During the reporting period, the Company stepped up its
investment in the downward coverage of this business direction, with the number of eco-partners
increasing rapidly, fueling a more robust business structure.
Faced with the complex and ever-changing supply environment, the Company has strengthened its
ability to continuously and safely supply key materials and ensure supply chain security by developing
backup solutions, optimizing the supply chain partner system, actively stocking up and diversifying
supply sources. Meanwhile, the Company continues to expand the scale of delivery system cooperation
ecology, strengthen training and certification while expanding the coverage of regional partners to
improve the delivery service capability of partners, further strengthening the Company's systematic
delivery and service capability for the global market.
development
The Company continues to promote fine management, fully implement high-performance
management and continuously reinforce its pursuit for high quality and steady growth.
The Company builds an elite organization and strengthens its platform capability; strengthens the
investment in finance and IT to enhance the digital management of the Company; deepens the talent
mechanism and continues to stimulate the vitality of talents through a diversified business
incentive-oriented mechanism.
Year-on-year changes in key financial data
Unit: RMB
Year-on-year
The Current The Same Period
increase or Reasons for changes
Reporting Period of Last Year
decrease
This is mainly because that the Company
focuses on the smart IOT industry, increasing
the development of enterprise business and
Operating income 13,505,005,733.89 9,838,328,853.62 37.27%
channel expansion to cover lower-tier cities,
overlaid with the global economic recovery
after the epidemic
Increases with the growth of operating
Operating Cost 7,910,714,928.97 5,099,250,150.57 55.13%
revenue
Sales Expenses 2,059,001,711.42 1,805,227,134.27 14.06% No Significant Change
Administration
expenses
Financial Mainly due to the increase in foreign exchange
Expenses losses
This is mainly due to the inconsistency in the
recognition period of income tax settlement
Income tax and tax difference caused by the inconsistency
-38,451,185.77 169,559,416.73 -122.68%
expense of the Company’s key software enterprises
during the evaluation period (the last year was
evaluated in the third quarter)
R&D investment 1,406,249,326.81 1,314,612,940.95 6.97% No Significant Change
Net cash flow
generated by Mainly due to the increase in stocking in this
-871,108,797.99 -106,927,963.95 -714.67%
operating period
activities
Net amount of
cash flow
generated by -975,034,182.68 -1,247,540,391.99 21.84% No Significant Change
investment
activities
Net cash flow
generated by 1,073,002,256.78 1,401,333,857.62 -23.43% No Significant Change
financing activities
Net additions to
Mainly due to the increase in stocking in this
balance of -808,743,871.72 46,435,465.25 -1,841.65%
period
equivalents
Significant changes in the composition of the Company’s profit or sources of profit during the reporting period
□ Applicable √ Not applicable
No significant changes in the composition of the Company’s profit or sources of profit during the reporting period.
Operating revenue structure
Unit: RMB
The Current Reporting Period The Same Period of Last Year
Year-on-year
Proportion in Proportion in
increase or
Amount Operating Amount Operating
decrease
Revenue Revenue
Total Revenue 13,505,005,733.89 100% 9,838,328,853.62 100% 37.27%
By Industry
Video IoT industry 13,505,005,733.89 100.00% 9,838,328,853.62 100.00% 37.27%
By Product
Smart IoT products
and solutions
Of which: software
business
Innovation business
(Note)
Others 733,350,588.42 5.43% 567,955,429.00 5.77% 29.12%
By Region
Domestic 7,777,087,103.47 57.59% 5,789,716,423.38 58.85% 34.33%
Overseas 5,727,918,630.42 42.41% 4,048,612,430.24 41.15% 41.48%
Domestic business segment
The Current Reporting Period The Same Period of Last Year
Proportion in Year-on-year
Proportion in
Domestic increase or
Amount Domestic Operating Amount
Operating decrease
Revenue
Revenue
To G 2,181,268,061.15 28.05% 1,968,901,971.97 34.01% 10.79%
To B 3,596,476,335.61 46.24% 2,442,778,493.48 42.19% 47.23%
Others 1,999,342,706.71 25.71% 1,378,035,957.93 23.80% 45.09%
Total 7,777,087,103.47 100.00% 5,789,716,423.38 100.00% 34.33%
Note: Innovative businesses of the Company mainly includes machine vision, video collaboration, smart home, smart
fire-fighting, smart storage, automotive electronics, smart drone, smart security inspection, smart display control, smart
control and other corresponding businesses. The same below.
Industry, product, or region accounting for more than 10% of the Company’s operating revenue or profit
√ Applicable □ Not applicable
Unit: RMB
Increase or
Increase and Increase or
decrease of
decrease of decrease of
operating
Gross operating cost gross profit
Operating income Operating Cost income
margin over the same compared with
compared with
period of last the same period
the same period
year of last year
of last year
By Industry
Video IoT industry 13,505,005,733.89 7,910,714,928.97 41.42% 37.27% 55.13% -6.75%
By Product
Smart IoT
products and 11,574,586,946.32 6,477,078,712.53 44.04% 33.75% 54.40% -7.49%
solutions
Of which: software
business
By Region
Domestic 7,777,087,103.47 4,685,553,053.26 39.75% 34.33% 39.70% -2.32%
Overseas 5,727,918,630.42 3,225,161,875.71 43.69% 41.48% 84.81% -13.20%
Domestic
business segment
To G 2,181,268,061.15 1,190,084,301.76 45.44% 10.79% 15.62% -2.28%
To B 3,596,476,335.61 2,067,000,177.07 42.53% 47.23% 59.15% -4.30%
Others 1,999,342,706.71 1,428,468,574.43 28.55% 45.09% 39.23% 3.00%
When the statistical caliber of the Company’s main business data is adjusted in the reporting period, the Company’s main
business data in the most recent period should be subject to the one after the statistical caliber adjusted at the end of the
reporting period.
□ Applicable √ Not applicable
Reasons for over 30% changes in related data on year-on-year basis
√ Applicable □ Not applicable
During the reporting period, the Company's operating revenue increased by 37.27% compared with the same period of
last year, mainly due to the Company's focus on the smart IOT industry, increasing the development of enterprise
business and channel expansion to cover lower-tier cities, overlaid with the global economic recovery after the epidemic.
The operating costs increased by 55.13% compared with the same period of last year, mainly due to the increase of
revenue during the reporting period, and the product structure changes such as infrared thermal imaging.
IV. Non-main Business Analysis
□ Applicable √ Not applicable
V. Analysis of Assets and Liabilities
Unit: RMB
At the End of the Current
At the End of the Previous Year Proportion
Reporting Period
Increase Statement on Significant
Proportion Proportion
and Changes
Amount To Total Amount To Total
decrease
Assets Assets
Cash and
Bank 6,690,863,029.69 16.83% 7,471,652,634.66 20.42% -3.59% No major changes
Balances
Accounts
receivable
Contract
Assets
Mainly due to the increase
Inventory 7,312,285,468.20 18.39% 4,928,019,838.00 13.47% 4.92%
in stocking
Investment
Property
Mainly due to the
Long-term
confirmation of other
Equity 820,449,863.74 2.06% 455,977,616.16 1.25% 0.81%
changes in equity of
Investment
Leapmotor
Mainly due to the
completion of Phase II,
Dahua Intelligent (IoT)
Fixed Assets 1,979,508,213.29 4.98% 1,515,594,629.97 4.14% 0.84% Industrial Park
Construction Project and
its conversion to fixed
assets
Mainly due to increasing
Projects under
Construction
construction projects
Impact of the
Right-of-use
Assets
lease standards in 2021
Mainly due to the increase
Short-term
loan
capital turnover
Mainly due to the increase
Contract
liabilities
current contract
Long-term Mainly due to the increase
loan in long-term bank loans
Impact of the
Lease
Liabilities
lease standards in 2021
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: RMB
Changes in fair Sales
Cumulative Impairment Purchase
At the beginning value gains amount
fair value loss of the amount of the Other At the end of the
Item of the reporting and losses in of the
changes in reporting reporting variations reporting period
period the current reporting
equity period period
period period
Financial
Assets
financial
assets
(excluding
derivative
financial
assets)
financial 1,005,680.45 7,123,015.25 16,283.27 8,144,978.97
assets
in other
creditors'
rights
in other
equity
instruments
Financial
assets 2,475,680.45 7,123,015.25 16,283.27 9,614,978.97
subtotal
Investment
Property
Productive
Biological
Assets
Other
Non-current
Financial
Assets
Receivables
Financing
Total 1,570,443,121.37 124,397,009.70 500,000,000.00 -346,108,711.91 1,848,731,419.16
Financial
liabilities
Are there any significant changes in the measurement attributes of the company's main assets during the reporting
period?
□ Yes √ No
As of June 30, 2021, restricted assets of the Company are as follows:
Item Ending balance (RMB) Cause of restrictions
Cash and Bank Balances 105,139,382.31 Guarantee security deposit
Notes receivable and 807,838,701.82 Pledge applied to issue bank acceptance bills; Bank acceptance
accounts receivable financing bill endorsed but not derecognized
Long-term Receivables 178,385,721.02 Pledge for bank loans
Non-current Assets Due 31,073,678.03 Pledge for bank loans
within 1 Year
Total 1,122,437,483.18
VI. Investment analysis
√ Applicable □ Not applicable
Investment In the Reporting Period Investment Over the Corresponding
Rate Of Change
(RMB) Period of Last Year
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: RMB
Reasons
Cumulative For
The Cumulative
Involved Income as Unreached
Investment in Amount Invested Actual Disclosing Disclosing
industry in Capital Progress Anticipated of the End Planned
Item Name Investment Mode The Fixed in The Current Investment as of Date (If Index (If
investment Source of Project Income of The Progress
Assets or Reporting Period the End of Any) Any)
projects Reporting and
Not Reporting Period
Period Anticipated
Revenue
The Phase II
Construction Juchao
Project of the Information
Video IoT Self-raise Not March 27,
Smart Self-construction Yes 215,741,729.84 818,079,406.91 52.67% Website
industry d funds applicable. 2021
Manufacturing http://cninfo.
Base in com.cn/
Hangzhou
Juchao
Construction Information
Video IoT Self-raise Not March 27,
Project of Xi'an Self-construction Yes 106,501,691.69 314,900,316.55 26.92% Website
industry d funds applicable. 2021
R & D Center http://cninfo.
com.cn/
Juchao
Project of Smart
Information
IoT Solution R & Video IoT Self-raise Not March 27,
Self-construction Yes 221,236,190.49 771,334,141.65 47.50% Website
D and industry d funds applicable. 2021
http://cninfo.
Industrialization
com.cn/
Juchao
New Project of
Information
Southwest R&D Video IoT Self-raise Not March 27,
Self-construction Yes 41,284.40 41,284.40 0.00% Website
Center of industry d funds applicable. 2021
http://cninfo.
Dahua
com.cn/
Total -- -- -- 543,520,896.42 1,904,355,149.51 -- -- -- -- --
(1). Securities investment
□ Applicable √ Not applicable
No such case as securities investment during the reporting period.
(2). Derivatives investment
√ Applicable □ Not applicable
Unit: ten thousand RMB
Proportion of
investment
Amount Amount of amount in Actual profit
Name of Initial Amount sold Investment
Relation Whether it is Types of Initial purchased provision for the and loss
derivatives amount of Starting Termination during the amount at
with related a related derivatives investment during the impairment company’s during the
investment derivatives date date reporting the end of
party transaction investments amount reporting accrued (if net assets at reporting
operator investment period the period
period any) end of the period
reporting
period
China
Structured January 26, June 30,
Construction No relations No 50,000.00 50,000.00 50,000.00 849.32
deposits 2021 2021
Bank
Foreign
November May 18,
Bank No relations No exchange 40,904.41 656,822.84 625,354.94 30,751.21 1.43% 1,357.07
contract
Total 50,000.00 -- -- 40,904.41 706,822.84 675,354.94 30,751.21 1.43% 2,206.39
Sources of funds for derivatives investment Equity Fund
Litigation involved (if applicable) N/A
Disclosure date of board of directors' announcement on
March 24, 2021
the approval of derivatives investment (if any)
Disclosure date of shareholder meeting’s
announcement on the approval of derivatives April 24, 2021
investment (if any)
Risk analysis and description of control measures for
For details of risk analysis and control measures, please refer to the "Announcement on the Use of Own Funds to Purchase Bank Wealth
derivatives positions during the reporting period
Management Products" (Announcement No. 2021-031) and "Announcement on Carrying out Foreign Exchange Hedging Transactions"
(including but not limited to market risk, liquidity risk,
(Announcement no. 2021-027), which were disclosed on March 24, 2021.
credit risk, operational risk, legal risk, etc.)
Changes in market prices or product fair value of
For the structured deposits signed between the Company and bank during the reporting period, the gains and losses of fair value shall be
invested derivatives during the reporting period, and the
determined according to the association between interest rate and the foreign exchange options. For the foreign forward contracts signed
analysis of the fair value of derivatives should disclose
between the Company and bank, the transactional financial assets or transactional financial liabilities shall be determined i n accordance
the specific methods used and the setting of related
with the difference between the forward foreign exchange settlement contract quotation and the forward foreign exchange price.
assumptions and parameters.
Explanation of whether the Company’s derivatives
accounting policies and specific accounting principles
N/A
have changed significantly during the reporting period
compared with the previous reporting period
Independent directors' special opinions on the For details, please refer to the "Independent Opinions of Independent Directors on Related Matters" disclosed by the Company on March
Company's derivatives investment and risk control 24, 2021.
VII. Major Assets and Equity Sales
□ Applicable √ Not applicable
No major assets sales in the reporting period of the Company
□ Applicable √ Not applicable
VIII. Analysis of Major Holding and Equity Participation Companies
√ Applicable □ Not applicable
Major subsidiaries and joint-stock companies with a net profit impact of over 10%.
Unit: RMB
Company Main
Company Name Registered Capital Total Assets Net Assets Operating income Operating Profit Net Profit
Type businesses
The
development,
Zhejiang Dahua production,
System Subsidiary installation
Engineering Company and sales of
Co., Ltd. electronic
and
communicati
on products;
the design,
construction
and
installation of
computer
system
integration
and
automated
control
engineering
The
development,
sales, and
technical
services
related to
computer
software, as
Zhejiang Dahua
well as the
Vision Subsidiary
design, 646,810,000.00 23,342,782,226.15 1,340,836,969.69 11,894,804,803.64 245,463,199.70 181,793,126.65
Technology Co., Company
development,
Ltd.
production
and sales of
security
equipment,
electronic
products and
communicati
ons products
Production
and sales of
electronic
products and
auxiliary
equipment;
Zhejiang Dahua Subsidiary
technological 1,110,000,000.00 4,259,134,733.79 635,314,901.76 1,659,289,918.82 -195,287,805.19 -137,775,208.75
Zhilian Co., Ltd. Company
development,
technical
consultation
and services,
achievement
transference
of computer
software,
electronic
products,
communicati
ons products,
and digital
security
products;
self-owned
house lease;
catering
service;
import and
export of
goods.
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
Method of acquisition and disposal of Impact on overall production
Company Name
subsidiaries during the reporting period management and performance
Hangzhou Huajuan Technology Co., No significant impact on overall
Deregistration
Ltd. production, operation and performance
Zhejiang Waythcan Technology Co., No significant impact on overall
Established with investment
Ltd. production, operation and performance
Zhengzhou Dahua Zhian Information No significant impact on overall
Established with investment
Technology Co., Ltd. production, operation and performance
Imou Network (Hong Kong) Technology No significant impact on overall
Established with investment
Co., Ltd production, operation and performance
No significant impact on overall
Dahua Technology QFZ LLC Established with investment
production, operation and performance
No significant impact on overall
DAHUA TECHNOLOGY PACIFIC S.A. Established with investment
production, operation and performance
No significant holding companies and joint stock companies information should be disclosed during the reporting period.
IX. The structured entity controlled by the Company
□ Applicable √ Not applicable
X. Risks and Countermeasures
During the reporting period, there was no significant change in the risks faced by the Company. The
Company has been trying to identify all kinds of risks and actively take countermeasures to avoid and
reduce the risks:
and control measures to protect the health of employees at home and abroad. In addition, the Company
offers technological solutions to contribute to the global effort against the pandemic.
reviewed various potential supply risks through dedicated operations, and strengthened the sustainable
and safe supply of key materials by means of research and development of backup scheme and
diversified supply sources to ensure the security of the supply chain.
countries and regions overseas. International business operation may face trade protection risks. In
addition, the resurgence of Covid-19 around the world has resulted in more uncertainties to the overseas
economic environment, which may adversely affect the development of the Company's local business.
To actively prevent and respond to international business risks, the Company has established an
overseas compliance and risk control system, continuously strengthened its understanding of and ability
to adapt to the laws and regulations as well as the political and economic environment of the regions in
which the Company operates, and formulated differentiated "One Country, One Strategy" national
business strategies according to the political and economic changes in different regions to minimize
business risks.
Dollars ("USD"), while overseas business continues to grow. Therefore, fluctuations in the foreign
exchange rate may affect the profits of the Company. The Company attaches great importance to
exchange rate risk control and adopts various means to effectively control such risks: on the one hand, it
manages various currencies by category, guides the contracting in mainstream currencies and using
such currencies to hedge against the U.S. dollar while increasing the proportion of overseas localized
contracting; for the countries contracted in non-mainstream currencies, exchange rate protection
clauses and price adjustment mechanisms will be set in advance in the contracts to reduce the risk of
exchange rate fluctuations; on the other hand, the Company effectively uses foreign exchange hedging
and a series of derivative instruments, among others, to offset and hedge exchange rate risks without
speculative purposes.
communications, cloud computing, big data, and AI, and the upgraded uses of smartphones, business
models in the IOT era may have an impact on the traditional industry development. If an enterprise
cannot grasp opportunities brought about by the business model transformation in a timely manner, it
may face the risk that the original market structure becomes broken. The Company continues to focus
on and study the major changes in global economy, industry and technology, analyze the industry
development logic, and predict the evolution of global security industry and IoT industry, the continuous
integration of video, information communication and digital technologies, diversification and uncertainty
of customer demands. While consolidating the advantageous market, The Company actively explores
and pilots new businesses and new commercial mode, and carry out business and technical layout.
industry, featuring extremely fast changes. If the Company is unable to keep up with development trends
in the industry's technology, to pay full attention to customers' diversified individual needs, and to be
followed by sufficient R&D investments, it will still face the risk of losing market competitiveness due to
discontinuous innovation. By increasing R & D investment, the Company continues to strengthen
research on core technologies in AI, video cloud, machine vision and other fields, and reserves product,
technology, management and talent resources for a broader market in the future, so as to achieve
sustainable and steady development of business.
resource investment to ensure safe and reliable operations of the security system so as to respond to
the product security risks on the Internet. However, hackers attacks, computer viruses, physical security
vulnerabilities, natural disasters, accidents, power interruptions, telecommunications failures, terrorism,
and warfare events may still occur from time to time, resulting in security vulnerabilities, system failures,
or service interruptions. The Company has founded a cyber security committee, and set up a
professional security team to develop company-level product safety plan, ensuring product safety in
whole process from requirements to design, coding, and testing process. At the same time, the
Company actively carry out technical exchanges and cooperation with mainstream safety enterprises,
safety evaluation agencies and corresponding industry associations to provide customers with safe
products and solutions.
strategy will likely bring about intellectual property risks and patent infringement, which may cause
fluctuation in business relations and public opinions, increasing lawsuits and rising costs. The Company
attaches great importance to technological innovation and has established protection and management
mechanism for intangible assets such as innovation achievements, self-owned brands, trade secrets,
and constantly gathers advantageous IP assets; With IP compliance risk control system, the Company
continues to strengthen its ability to understand and grasp the IP laws and regulations, administrative
and judicial environment of the region where the company's business is located in.
Section IV Corporate Governance
I. Relevant Situation of the Annual General Meeting of Shareholders and the
Extraordinary General Meeting of Shareholders Held in the Reporting Period
Percentage of
Conference Conference
Investors Date of Conference Date of Disclosure Conference Resolution
Session Type
Involved
No proposal was voted
down at the General
First Meeting. The
Extraordinary Announcement of
Extraordinary
General Resolutions of the First
General 51.52% January 22, 2021 January 23, 2021
Meeting of Extraordinary General
Meeting
Shareholders Meeting of 2021 (2021-006)
in 2021 is published on Juchao
Information Website
(http://www.cninfo.com.cn)
No proposal was voted
down at the General
Meeting. The
Announcement of
General Annual General
Meeting of Meeting
Annual General Meeting
Shareholders
(2021-064) is published on
Juchao Information Website
(http://www.cninfo.com.cn)
No proposal was voted
down at the General
Second Meeting. The
Extraordinary Announcement of
Extraordinary
General Resolutions of the Second
General 44.65% June 11, 2021 June 15, 2021
Meeting of Extraordinary General
Meeting
Shareholders Meeting of 2021 (2021-076)
in 2021 is published on Juchao
Information Website
(http://www.cninfo.com.cn)
stockholders whose voting rights are restored
□ Applicable √ Not applicable
II. Changes of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
Name Title Type Date Causes
Senior Vice Voluntarily resigned from the post of Senior Vice
Ying Yong Dismissal March 24, 2021
President President but remained in the Company
Voluntarily resigned from the post of Vice President
Wu Yunlong Vice President Dismissal March 24, 2021
but remained in the Company
Voluntarily resigned from the post of Vice President
Chen Yuqing Vice President Dismissal March 24, 2021
but remained in the Company
III. Profit Distribution and Capital Reserve Converted to Share Capital in the
Reporting Period
□ Applicable √ Not applicable
The Company plans to pay no cash dividends, no bonus shares and no capital increase by way of capitalization of
provident fund for the half-year
IV. Implementation of the Company’s Equity Incentive Plan, Employee Stock
Ownership Plan or Other Employee Incentive Measures
√ Applicable □ Not applicable
of the First Grant and Reserving the Achievement for the First Unlock of Year 2018" was reviewed and
approved at the Thirteenth Meeting of the Seventh Board of Directors and the Ninth Meeting of the
Seventh Board of Supervisors of the Company. The Board of Directors agreed to unlock 29,431,520
restricted stocks held by 2,889 incentive objects who met the unlocking conditions. The matter was
completed on April 15, 2021.
Unlocked Restricted Stocks" was deliberated and approved at the Company's General Meeting of
Shareholders in 2020, which agreed to buy back and cancel 1,028,860 authorized but not unlocked
restricted stocks held by 65 incentive objects who are no longer eligible for hte qualification (of which,
matter is still in process.
Plan on the First Unlocking Period in 2020" was deliberated and approved at the Seventeenth Meeting of
the Seventh Board of Directors and the Eleventh Meeting of the Seventh Board of Supervisors of the
Company. At which the Board of Directors agreed to unlock 6,695,740 restricted stocks held by 10
incentive objects who meet the unlocking conditions. The matter was completed on July 9, 2021.
Section V Environmental and Social Responsibilities
I. Major Environmental Issues
Whether the listed company and its subsidiaries belong to the key pollutant discharging units announced by the
environmental protection department
□ Yes √ No
II. Social Responsibilities
The Company has not carried out targeted poverty alleviation and rural revitalization work during the reporting period.
Section VI Significant Events
I. Commitments made by the Company’s controlling shareholders, shareholders,
related parties, purchasers and purchasing companies have been fulfilled during the
reporting period and those that have not been fulfilled by the end of the reporting
period
□ Applicable √ Not applicable
There are no commitments, made by the Company’s controlling shareholders, shareholders, related parties, purchasers
and purchasing companies, that have been fulfilled during the reporting period and that have not been fulfilled by the end
of the reporting period.
II. Non-operational capital occupation over listed companies by controlling
shareholders and their related parties
□ Applicable √ Not applicable
During the reporting period, there is no non-operational capital occupation over listed companies by controlling
shareholders and their related parties.
III. Illegal external guarantees
□ Applicable √ Not applicable
No illegal external guarantees during the reporting period.
IV. Appointment and dismissal of accounting firms
Whether the semi-annual report has been audited
□ Yes √ No
The Company’s semi-annual report has not been audited.
V. Explanations made by the Board of Directors and the Board of Supervisors on the
“Non-Standard Audit Report” from the accounting firm during the reporting period
□ Applicable √ Not applicable
VI. Statement by the Board of Directors on the “Non-Standard Audit Report” of the
previous year
□ Applicable √ Not applicable
VII. Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such case as bankruptcy and reorganization related event during the reporting period.
VIII. Litigation Matters
Significant lawsuits and arbitrations
□ Applicable √ Not applicable
There is no major lawsuit or arbitration during this reporting period.
Other litigation matters
√ Applicable □ Not applicable
Outcome and
Whether an Enforcement
Amount Litigation impact of
Basic information on litigation estimated of litigation Date of Disclosure
involved (arbitration) litigation
(arbitration) liability is (arbitration) Disclosure Index
(yuan) progress (arbitration)
formed judgments
hearings
Other litigation not meeting
Not Not
the disclosure standards for 14,574.53 177.57 On trial - N/A
applicable. applicable.
material litigation
IX. Penalties and Rectification
□ Applicable √ Not applicable
No such case as penalty and rectification during the reporting period.
X. Integrity of the Company, Its Controlling Shareholder and Actual Controller
□ Applicable √ Not applicable
XI. Significant Related-party Transactions
□ Applicable √ Not applicable
No such case as significant related-party transactions connected with daily operations.
□ Applicable √ Not applicable
No such case as related-party transactions arising from the acquisition or sale of assets or equity.
√ Applicable □ Not applicable
For details, see "6. Other Significant Related-party Transactions" in this Section.
□ Applicable √ Not applicable
No such case as related credits and debts during the reporting period.
Company
□ Applicable √ Not applicable
No deposit, loan, credit or other financial business between the Company and the related financial company, or between
the financial company controlled by the Company and the related parties.
√ Applicable □ Not applicable
deliberated and approved the "Proposal on Joint Capital Increase and Related Party Transactions", and
agreed that the Company and related parties Zhang Xingming, He Chao, Ningbo Huaqi Investment
Management Partnership (Limited Partnership), Hangzhou Kangpi Enterprise Management Partnership
(Limited Partnership) and non-related party Yao Weizhong to sign the "Agreement on Equity Transfer
and Capital Increase of Zhejiang Healnoc Technology Co., Ltd.". The Company and related parties
Zhang Xingming, He Chao, Ningbo Huaqi Investment Management Partnership (Limited Partnership),
Hangzhou Kangpi Enterprise Management Partnership (Limited Partnership) and non-related party Yao
Weizhong contributed RMB 50 million in total to Zhejiang Healnoc Technology Co., Ltd. (referred to as
"Healnoc") as capital increase. Among them, the Company invested RMB 20 million of its own funds,
holding 20% of Healnoc equity, and Healnoc became a shareholding company. The change of industrial
and commercial registrations for the above matter was completed in February 2021.
approved the “Proposal on Giving up Shareholding Companies' Equity Increase Rights and Related
Party Transactions”. A total of 14 investors, including Zhu Jiangming, Gao Dong, Chen Jinxia, and
Ningbo Huaqi Investment Management Partnership (Limited Partnership), made a B-1 round of capital
increase in Leapmotor Technology. The related transaction amount involved in companies giving up the
right to increase capital in the same proportion was RMB 458.459 million. The change of industrial and
commercial registrations for the above matter was completed in January 2021.
deliberated and approved the “Proposal on Giving up Shareholding Companies' Equity Increase Rights
and Related Party Transactions”. A total of 10investors, including Zhejiang Mituo Investment Co., Ltd.,
Gao Dong, Huzhou Heninghai Investment Partnership (Limited Partnership), intended to make a B-2
round of capital increase in Leapmotor. The amount of related party transactions involved in the
companies' giving up the right to increase capital in the same proportion was RMB 0.16683546 billion.
The change of industrial and commercial registrations for the above matter was completed in January
Rights of a Subsidiary in the Same Proportion and Related Transaction" was deliberated and approved
at the Fourteenth Meeting of the Seventh Session of the Board of Directors of the Company, in which a
total of 5 investors, including CICC Huarui Technology Employee Shareholding No. 1 Single Asset
Management Plan, intended to increase capital to Zhejiang Huarui Technology Co., Ltd., with a total
capital increase of RMB 9,545,783. Based on the shareholding structure after the above capital
increase, Ningbo Huayu Investment Management Partnership (Limited Partnership), shareholder of
Huarui Technology, intended to transfer its 44.10% shareholding of Huarui Technology to a total of
Plan, at a total price of RMB 244,309,237. The Company waived the preferential subscription right and
the preemptive right to purchase the above-mentioned equity interests. The change of industrial and
commercial registrations for the above matter was completed in April 2021.
Subsidiary" was deliberated and approved at the Sixteenth Meeting of the Seventh Board of Directors of
the Company, which agreed that the Company and the related legal person Zhejiang Huashi Investment
Management Co., Ltd. jointly increased the capital of the holding subsidiary Zhejiang Huaxiao
Technology Co., Ltd. in the same proportion. The company increased its capital by RMB10.2 million
with its own funds, and after the completion of the capital increase, the registered capital of Huaxiao
Technology increased from RMB 50 million to RMB 70 million. The change of industrial and commercial
registrations for the above matter was completed in June 2021.
Related Transaction with Related Parties" was deliberated and approved at the Eighteenth Meeting of
the Seventh Session of the Board of Directors of the Company, which agreed to establish Zhoushan
Huayan Chuangxi Equity Investment Partnership (Limited Partnership) with a total of 19 investors,
including Huayan Capital (Hangzhou) Private Equity Fund Management Co., Ltd. The form of the
Industrial Fund is a limited partnership with a total fund scale of RMB 150.1 million; Huayan Capital, as
the fund manager, contributes RMB 100,000 in currency, holding 0.07% of the shares, and Dahua
Shares contributes RMB 50 million in currency, holding 33.32% of the shares. The matter is still in
progress.
Website for disclosing the interim report on significant related-party transactions
Announcement name Disclosure date Website for the disclosure
Announcement on Joint Investment and Related Transactions with
January 9, 2021 http://www.cninfo.com.cn
Related Parties
Announcement On Giving Up the Shareholding Company's Right to
Increase Capital with The Same Percentage and Related-party January 9, 2021 http://www.cninfo.com.cn
Transactions
Announcement On Giving Up the Shareholding Company's Right to
Increase Capital with The Same Percentage and Related-party January 28, 2021 http://www.cninfo.com.cn
Transactions
Announcement On Giving Up the Subsidiaries' Right to Increase
Capital with The Same Percentage, Right of Preemption, And April 23, 2021 http://www.cninfo.com.cn
Related-party Transactions
Announcement On Increasing Capital in Holding Subsidiaries and
June 08, 2021 http://www.cninfo.com.cn
Related-party Transactions
Announcement on Joint Investment on the Establishment of Industrial
June 30, 2021 http://www.cninfo.com.cn
Fund and Related Transactions with Related Parties
XII. Significant Contracts and Performance
(1) Matters on trusteeship
□ Applicable √ Not applicable
No such case as custody during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
No such case as contracting during the reporting period.
(3) Leasing
√ Applicable □ Not applicable
Explanations on leases
During the reporting period, some of the Company's own real estate properties were used for rental, and the leased real
estate property was used for office, warehouse and production workshops. There was no other major real estate leasing.
Cases that brought the profit and loss accounted for more than 10% of the Company's total profit during the reporting
period
□ Applicable √ Not applicable
No such leases that brought the profit and loss accounted for more than 10% of the Company's total profit during the
reporting period.
√ Applicable □ Not applicable
Unit: ten thousand RMB
External guarantees from the Company and its subsidiaries (excluding guarantees to the subsidiaries)
Announce
ment date
Guarantee
of Actual Actual
Guarantee Type of Term of Due or for related
Guaranteed party disclosure occurrence guarantee
amount guarantee guarantee not parties or
of the date amount
not
guarantee
cap
Total amount of
Total amount of guarantees
guarantees actually
approved during the reporting
occurred during the
period (A1)
reporting period (A2)
Total amount of guarantees Total balance of
approved by the end of the guarantees at the end of
reporting period (A3) the reporting period (A4)
Company's guarantees to subsidiaries
Announce Actual Actual Guarantee
Guarantee Type of Term of Due or
Guaranteed party ment date occurrence guarantee for related
amount guarantee guarantee not
of date amount parties or
disclosure not
of the
guarantee
cap
Joint liability 2018.03.20-
guarantee 2021.03.19
Three years
after the
February 25, Joint liability maturity of
the master
contract
Two years
after the
Joint liability maturity of
guarantee the debts in
the master
contract
Two years
after the
Joint liability maturity of
guarantee the debts in
Zhejiang Dahua US dollars)
May 6, the master
Vision Technology 698,685.74
Co., Ltd.
Joint liability 2019.06.26-
guarantee 2022.06.25
Two years
after the
Joint liability maturity of
guarantee the debts in
the master
contract
Three years
after the
Joint liability maturity of
guarantee the debts in
the master
contract
Two years
February 17, Joint liability after the
the debts in
the master
contract
April 7,
Joint liability 2020 -
April 7, 2020 53,000.00 No Yes
guarantee March 31,
Two years
after the
Joint liability maturity of
April 13, 2020 24,000.00 No Yes
guarantee the debts in
the master
contract
Two years
after the
August 3, Joint liability maturity of
the master
contract
Two years
after the
August 12,
Joint liability maturity of
guarantee the debts in
the master
contract
Two years
after the
August 18, Joint liability maturity of
the master
contract
Five years
upon
Joint liability expiration of
guarantee debt period
of master
contract
Three years
after the
September Joint liability maturity of
the master
contract
Three years
after the
February 4, Joint liability maturity of
the master
contract
Three years
after the
February 23, Joint liability maturity of
the master
contract
February
February 25, Joint liability 25, 2021 -
May 12,
Joint liability 2021 -
May 12, 2021 8,000.00 No Yes
guarantee December
Additional
three years
from the
effective
date of the
commitment
letter to the
Joint liability maturity
May 29, 2021 20,000.00 No Yes
guarantee date of each
note
discounted
by China
Merchants
Bank during
the credit
period
One years
upon
Zhejiang Dahua March 24, Joint liability expiration of
Zhilian Co., Ltd. 2021 guarantee debt period
of master
contract
One years
upon
Joint liability expiration of
May 1, 2020 (60 million Yes Yes
guarantee debt period
U.S. dollars)
of master
contract
Three years
after the
September Joint liability maturity of
the master
contract
Joint liability 2018.10.12-
guarantee 2021.10.12
Two years
after the
Joint liability maturity of
guarantee the debts in
the master
contract
Two years
after the
September Joint liability maturity of
the master
contract
Two years
after the
September Joint liability maturity of
the master
contract
Three years
after the
September Joint liability maturity of
the master
contract
One years
Joint liability upon
April 29, 2021 10,000.00 No Yes
guarantee expiration of
debt period
of master
contract
One years
April 29, 2021 (60 million Joint liability expiration of
No Yes
U.S. dollars) guarantee debt period
of master
contract
April 30,
(55 million Joint liability
April 29, 2021 2021 - May No Yes
U.S. dollars) guarantee
Additional
three years
from the
effective
date of the
commitment
letter to the
Joint liability maturity
May 29, 2021 16,000.00 No Yes
guarantee date of each
note
discounted
by China
Merchants
Bank during
the credit
period
Three years
after the
February 25, Joint liability maturity of
the master
contract
Zhejiang Dahua
March 24, Two years
System Engineering 50,000.00
Co., Ltd.
Joint liability maturity of
guarantee the debts in
the master
contract
November 7, Joint liability Two years
maturity of
the debts in
the master
contract
Two years
after the
August 3, Joint liability maturity of
the master
contract
Additional
three years
from the
effective
date of the
commitment
letter to the
Joint liability maturity
May 29, 2021 4,000.00 No Yes
guarantee date of each
note
discounted
by China
Merchants
Bank during
the credit
period
Two years
after the
Joint liability maturity of
guarantee the debts in
Dahua Technology March 24, U.S. dollars)
(HK) Limited 2021
contract
Joint liability
April 20, 2021 (1 million 2021 - April No Yes
guarantee
euros) 25, 2022
October 27,
October 27, Joint liability 2020 -
DAHUA (6.5 million No Yes
TECHNOLOGY March 24, U.S. dollars)
MEXICO S.A. DE C. 2021
V Joint liability
guarantee
U.S. dollars) August 31,
Three years
after the
August 3, Joint liability maturity of
the master
contract
Two years
after the
Joint liability maturity of
guarantee the debts in
the master
contract
Two years
after the
September Joint liability maturity of
the master
contract
Hangzhou
March 24, Three years
Huacheng Network 65,000.00
Technology Co., Ltd.
September Joint liability maturity of
the master
contract
Six months
upon
expiration of
February 4, Joint liability the debt
e period of
master
contract
Three years
after the
February 23, Joint liability maturity of
the master
contract
Dahua Technology March 24, August 12, Joint liability
UK Limited 2021 2020 guarantee
million) Signing
termination
notice
Three years
after the
Zhejiang HuaRay March 24, February 23, Joint liability maturity of
Technology Co., Ltd. 2021 2021 guarantee the debts in
the master
contract
Three years
after the
Joint liability maturity of
April 29, 2021 million U.S. No Yes
guarantee the debts in
dollars)
the master
contract
Additional
three years
from the
effective
Zhejiang Dahua
May 6, date of the
Storage Technology 2,314.26
Co., Ltd.
letter to the
Joint liability maturity
May 29, 2021 1,000.00 No Yes
guarantee date of each
note
discounted
by China
Merchants
Bank during
the credit
period
Three years
after the
Zhejiang
March 24, Joint liability maturity of
Huachuang Vision 25,000.00 May 11, 2021 5,000.00 No Yes
Technology Co., Ltd.
the master
contract
Additional
three years
from the
Zhejiang Fengshi March 24, Joint liability
Technology Co., Ltd. 2021 guarantee
date of the
commitment
letter to the
maturity
date of each
note
discounted
by China
Merchants
Bank during
the credit
period
Additional
three years
from the
effective
date of the
commitment
letter to the
Wuxi Dahua Ruipin March 24, Joint liability maturity
Technology Co., Ltd. 2021 guarantee date of each
note
discounted
by China
Merchants
Bank during
the credit
period
Additional
three years
from the
effective
date of the
commitment
Zhejiang Huafei letter to the
Intelligent March 24, Joint liability maturity
Technology CO., 2021 guarantee date of each
LTD. note
discounted
by China
Merchants
Bank during
the credit
period
Zhejiang Huaxiao March 24, Joint liability Additional
Technology Co., Ltd. 2021 guarantee three years
from the
effective
date of the
commitment
letter to the
maturity
date of each
note
discounted
by China
Merchants
Bank during
the credit
period
Additional
three years
from the
effective
date of the
commitment
letter to the
Zhejiang Dahua
March 24, Joint liability maturity
Jinzhi Technology 1,000.00 May 29, 2021 1,000.00 No Yes
Co., Ltd.
note
discounted
by China
Merchants
Bank during
the credit
period
Additional
three years
from the
effective
date of the
commitment
Xi'an Dahua Zhilian March 24, Joint liability letter to the
Technology Co., Ltd. 2021 guarantee maturity
date of each
note
discounted
by China
Merchants
Bank during
the credit
period
Guangxi Dahua
March 24,
Information 1,000.00 No such case during the reporting period
Technology Co., Ltd.
Chengdu Dahua
Zhian Information March 24,
Technology Service 2021
Co., Ltd.
Zhejiang Dahua
Security Network March 24,
Operation Service 2021
Co., Ltd.
Hangzhou Xiaohua
March 24,
Technology CO., 1,000.00 No such case during the reporting period
LTD.
Zhejiang Dahua
March 24,
Security Service 1,000.00 No such case during the reporting period
Co., Ltd.
Guangxi Dahua March 24,
Technology Co., Ltd. 2021
Zhengzhou Dahua
March 24,
Zhian Information 20,000.00 No such case during the reporting period
Technology Co., Ltd.
Zhejiang Waythcan March 24,
Technology Co., Ltd. 2021
Zhejiang Huaxuan March 24,
Technology Co., Ltd. 2021
Dahua Technology March 24,
Japan 2021
DAHUA EUROPE March 24,
B.V. 2021
Dahua Technology March 24,
USA Inc. 2021
Dahua Technology March 24,
Singapore Pte.Ltd. 2021
Dahua Technology March 24,
Poland sp.zo.o. 2021
Dahua Technology March 24,
Hungary Kft 2021
DAHUA
TECHNOLOGY March 24,
INDIA PRIVATE 2021
LIMITED
DAHUA
TECHNOLOGY
BRASIL March 24,
COMERCIO SERV 2021
EM SEGURANCA
ELETRONICA LTDA
DAHUA
March 24,
TECHNOLOGY 1,000.00 No such case during the reporting period
MIDDLE EAST FZE
DAHUA
March 24,
TECHNOLOGY 4,000.00 No such case during the reporting period
PER? S.A.C
Dahua Technology
March 24,
Rus Limited Liability 3,000.00 No such case during the reporting period
Company
Dahua Technology March 24,
Australia Pty Ltd. 2021
Dahua Technology
March 24,
South Africa 500.00 No such case during the reporting period
Proprietary Limited
Dahua Technology March 24,
Canada Inc. 2021
DAHUA GUVENLIK
TEKNOLOJILERI
March 24,
SANAYI VE 1,000.00 No such case during the reporting period
TICARET ANONIM
SIRKETI
Dahua Technology March 24,
SRB d.o.o. 2021
Dahua Technology March 24,
Bulgaria EOOD 2021
March 24,
Dahua Iberia, S.L. 100.00 No such case during the reporting period
Dahua Security
March 24,
Malaysia SDN. 100.00 No such case during the reporting period
BHD.
Dahua Technology March 24,
Kazakhstan LLP 2021
PT. Dahua Vision
March 24,
Technology 100.00 No such case during the reporting period
Indonesia
Dahua Technology
March 24,
Korea Company 100.00 No such case during the reporting period
Limited
Dahua Technology March 24,
S.R.L. 2021
Dahua Technology March 24,
France SAS 2021
March 24,
Dahua vision LLC 500.00 No such case during the reporting period
Dahua Technology
March 24,
New Zealand 100.00 No such case during the reporting period
Limited
Dahua Technology March 24,
GmbH 2021
DAHUA
March 24,
TECHNOLOGY 2,000.00 No such case during the reporting period
COLOMBIA S.A.S.
DAHUA
March 24,
TECHNOLOGY 100.00 No such case during the reporting period
PANAMA S.A.
Dahua Technology March 24,
Chile SpA 2021
Dahua technology
March 24,
tunisia limited 100.00 No such case during the reporting period
liability company
DAHUA
March 24,
TECHNOLOGY 100.00 No such case during the reporting period
KENYA LIMITED
DAHUA
March 24,
TECHNOLOGY 100.00 No such case during the reporting period
CHINA(PVT) LTD
DAHUA
TECHNOLOGY March 24,
PAKISTAN 2021
(PRIVATE) LIMITED
DAHUA
March 24,
TECHNOLOGY 100.00 No such case during the reporting period
MOROCCO SARL
DAHUA March 24,
ARGENTINA S.A. 2021
Dahua Technology March 24,
Czech s.r.o. 2021
Dahua Technology March 24,
Denmark ApS 2021
Dahua Technology March 24,
Netherlands B.V. 2021
DAHUA
TECHNOLOGY March 24,
(THAILAND) CO., 2021
LTD
DAHUA
March 24,
TECHNOLOGY 100.00 No such case during the reporting period
ITALY S.R.L.
LOREX March 24,
TECHNOLOGY INC 2021
LOREX March 24,
CORPORATION 2021
Total amount of
Total amount of guarantees to guarantees to
subsidiaries approved during 1,487,000.00 subsidiaries actually 308,351.79
the reporting period (B1) occurred during the
reporting period (B2)
Total balance of
Total amount of guarantees to guarantees actually paid
subsidiaries approved by the 1,487,000.00 to subsidiaries at the end 885,096.50
end of the reporting period (B3) of the reporting period
(B4)
Subsidiaries' guarantees to subsidiaries
Announce
ment date
Guarantee
of Actual Actual
Guarantee Type of Term of Due or for related
Guaranteed party disclosure occurrence guarantee
amount guarantee guarantee not parties or
of the date amount
not
guarantee
cap
Total amount of
Total amount of guarantees to guarantees to
subsidiaries approved during subsidiaries actually
the reporting period (C1) occurred during the
reporting period (C2)
Total of actual guarantee
Total amount of guarantees to
balance for subsidiaries
subsidiaries approved at the
at the end of the reporting
end of the reporting period (C3)
period (C4)
Total amount of company guarantees (namely sum of the previous three major items)
Total amount of
Total amount of guarantees guarantees actually
approved during the reporting 1,487,000.00 occurred during the 308,351.79
period (A1+B1+C1) reporting period
(A2+B2+C2)
Total balance of
Total amount of guarantees
guarantees actually paid
approved by the end of the 1,487,000.00 885,096.50
at the end of the reporting
reporting period (A3+B3+C3)
period (A4+B4+C4)
Total amount of actual guarantees (A4+B4+C4) as a
percentage of the Company's net assets
Including:
Balance of guarantees to the shareholders, actual
controllers and their related parties (D)
Balance of debt guarantees directly or indirectly offered to
guaranteed objects with asset-liability ratio exceeding 70% 862,096.50
(E)
Amount of the guarantees with the total volume exceeding
Total amount of the above three guarantees (D+E+F) 862,096.50
Notes on unexpired guarantees with guarantee
responsibilities occurred or possible joint liabilities within the
reporting period (if any)
Notes on providing external guarantees in violation of
specified procedures (if any)
√ Applicable □ Not applicable
Unit: ten thousand RMB
Impairment
Overdue amount accrued
Specific type Funding source Entrusted amount Unexpired balance outstanding for overdue
amount financial
management
Bank financial
Equity Fund 50,000.00 - - -
products
Financial
products of
Equity Fund 50,000.00 50,000.00 - -
securities
companies
Total 100,000.00 50,000.00 - -
Specific matters on high-risk entrusted capital management with a large amount for a single item, or with low security,
poor liquidity and no capital preservation guarantee.
√ Applicable □ Not applicable
Unit: ten thousand RMB
Actual Whethe Whether Item
Actual Amount of
Name of Reference recovery of r it there will overview
Trustee profit and provision for
trustee Payment for Expected profits and passed be and
organization Product Capital Starting Terminatio Investment loss during impairment
organizatio Amount determinatio annualized earnings (if losses the entrusted related
(or trustee) type Source date n date direction the accrued in the
n (or name n method rate of any) during the legal financial query
type reporting current year
of trustee) return reporting procedu plan in the index (if
period (if any)
period res future any)
China Recovered
Structured Equity January June 30, Financial
Constructio Bank 50,000.00 By contract 4.00% 849.32 at Yes Yes
deposits Fund 26, 2021 2021 derivatives
n Bank expiration
Private
equity fund
products,
fixed
income Payment of
Guosen Asset
Securities Equity February February 9, assets, principal
Securities Manageme 50,000.00 6,445.65 Unexpired Yes No
company Fund 10, 2021 2031 equity and income
co., Ltd. nt Plan
assets, at maturity
public
equity
hybrid
funds
Total 100,000.00 -- - -- -- -- -- 7,294.97 -- -- -- --
Cases of entrusted financing expected to be unable to recover the principal or cases that may result in impairment
□ Applicable √ Not applicable
□ Applicable √ Not applicable
□ Applicable √ Not applicable
No such case as other significant contract during the reporting period.
XIII. Explanations on Other Significant Matters
√ Applicable □ Not applicable
On March 26, 2021, the "Proposal on the Company's Non-public Offering of Shares for 2021" and
other related proposals were deliberated and approved at the Twelfth Meeting of the Seventh Session of
the Board of Directors and the Eighth Meeting of the Seventh Board of Supervisors of the Company. The
Company planned to issue 312,151,600 non-public shares, and the total amount of funds raised did not
exceed RMB 5.6 billion (including RMB 5.6 billion). The target companies of this non-public issuance is
China Mobile Capital Holdings Co., Ltd., which is the wholly-owned subsidiary of China Mobile
Communications Group Co., Ltd. The matters related to this non-public offering of shares have been
deliberated and approved at the Company's 2020 Annual General Meeting.
The Company disclosed "Announcement on Application for Non-public Offering of Shares Accepted
by the China Securities Regulatory Commission" and "Announcement on Receipt of
Feedback on Review of Administrative License Items by the China Securities Regulatory Commission>"
(Announcement No. 2021-073, 2021-078) on June 3, 2021 and June 17, 2021 respectively.
On July 5,2021, the Nineteenth Meeting of the Seventh Board of Directors and the Twelfth Meeting
of the Seventh Board of Supervisors of the Company deliberated and approved the "Proposal on
Adjustment of the Non-public Offering of Shares for 2021" and other proposals related to the Offering.
After the adjustment, the Company planned to issue not more than 288,624,700 non-public shares and
raise total funds of not more than RMB 5,100 million (including RMB 5,100 million). The target of this
non-public issue was China Mobile Capital Holdings Limited, a wholly-owned subsidiary of China Mobile
Communications Group Corporation, and on the same day, the “Report on the Response to Feedback
on the Non-public Offering Stock Application Document of Zhejiang Dahua Technology Co., Ltd.” was
disclosed.
The proposal of the non-public offering of shares is subject to the approval of the China Securities
Regulatory Commission before implementation, and the above relevant announcement documents have
been disclosed on the Securities Times and Juchao Information Network (http://www.cninfo.com.cn), the
designated information disclosure media of the Company.
XIV. Significant Events of the Company’s Subsidiaries
□ Applicable √ Not applicable
Section VII Changes in Shares and Information about
Shareholders
I. Changes in Shares
Unit: share
Before the change Increase or decrease in the change (+, -) After the change
Shares
Shares converted
Bonus
Number Percentage newly from Others Subtotal Number Percentage
shares
issued capital
reserves
I. Shares with limited
sales condition
shares
Shares held by
domestic natural 1,137,278,516 37.97% -94,617,808 -94,617,808 1,042,660,708 34.81%
persons
shareholding
Shares held by
foreign natural 19,200 0.00% -9,600 -9,600 9,600 0.00%
persons
II. Shares without
restrictions
shares
III. Total 2,995,579,590 100.00% 0 0 2,995,579,590 100.00%
Reasons for changes in shares
√ Applicable □ Not applicable
unlock period in 2018 Restricted Stock Incentive Plan were satisfied.
Approval for changes in shares
√ Applicable □ Not applicable
and Reserving the Achievement for the First Unlock of Year 2018" was reviewed and approved at the Thirteenth Meeting
of the Seventh Board of Directors and the Ninth Meeting of the Seventh Board of Supervisors of the Company. The Board
of Directors agreed to unlock 29,431,520 restricted stocks held by 2,889 incentive objects who met the unlocking
conditions.
Unlocking Period in 2020" was deliberated and approved at the Seventeenth Meeting of the Seventh Board of Directors
and the Eleventh Meeting of the Seventh Board of Supervisors of the Company. The Board of Directors agreed to unlock
Transfer for changes in shares
√ Applicable □ Not applicable
the unlocking of the second unlocking period granted for the first time and of the reserved grant of the first unlocking
period as stated in 2018 Restricted Share Incentive Plan, with the unlocking date, also known as the date of listing and
circulation, is April 15, 2021.
the unlocking of the first unlocking period of 2020 Restricted Share Incentive Plan, with the unlocking date, also known as
the date of listing and circulation, is July 9, 2021.
The progress on share repurchases
□ Applicable √ Not applicable
The progress on reduction of re-purchase shares by means of centralized competitive bidding
□ Applicable √ Not applicable
Effects of changes in shares on the basic earnings per share ("EPS"), diluted EPS, net assets per share, attributable to
common shareholders of the Company, and other financial indexes over the last year and last period
□ Applicable √ Not applicable
Other contents that the Company considers necessary or are required by the securities regulatory authorities to disclose
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: share
Number of Number of
Number of unlocked increased Number of
restricted shares restricted restricted shares
Name of shares with limited shares in the at the end of the Reasons for limited
Date of unlocking
Shareholder at the sales current period period sales
beginning of condition at the at the beginning
the period in current beginning of of the period
period the period
Fu Liquan 811,561,410 43,659,675 0 767,901,735 According to the According to the
relevant provisions relevant provisions of
of executives shares executives shares
management management
According to the According to the
Zhu relevant provisions relevant provisions of
Jiangming of executives shares executives shares
management management
According to the According to the
relevant provisions relevant provisions of
Chen Ailing 53,447,110 0 0 53,447,110
of executives shares executives shares
management management
Per relevant
Per relevant
management
management
regulations of equity
Wu Jun 51,938,164 0 0 51,938,164 regulations of equity
incentives and
incentives and senior
senior managers'
managers' shares
shares
Per relevant
Per relevant
management
management
Zhang regulations of equity
Xingming incentives and
incentives and senior
senior managers'
managers' shares
shares
Per relevant
Per relevant
management
management
regulations of equity
Ying Yong 2,271,937 0 417,313 2,689,250 regulations of equity
incentives and
incentives and senior
senior managers'
managers' shares
shares
Per relevant
Per relevant
management
management
regulations of equity
Zhao Yuning 2,515,000 333,000 0 2,182,000 regulations of equity
incentives and
incentives and senior
senior managers'
managers' shares
shares
Per relevant
Per relevant
management
management
regulations of equity
Wu Jian 2,167,001 255,000 0 1,912,001 regulations of equity
incentives and
incentives and senior
senior managers'
managers' shares
shares
Chen Yuqing 1,376,963 0 458,988 1,835,951 Per relevant Per relevant
management management
regulations of equity regulations of equity
incentives and incentives and senior
senior managers' managers' shares
shares
Per relevant
Per relevant
management
management
regulations of equity
Jiang Xiaolai 2,004,400 222,200 0 1,782,200 regulations of equity
incentives and
incentives and senior
senior managers'
managers' shares
shares
Per relevant
Per relevant
Other senior management
management
executives regulations of equity
and incentive incentives and
incentives and senior
targets senior managers'
managers' shares
shares
Total 1,137,297,716 95,503,709 876,301 1,042,670,308 -- --
II. Issuance and listing of securities
□ Applicable √ Not applicable
III. Total Number of Shareholders and Their Shareholdings
Unit: share
Total Number of Preferred
Total Number of Common Shareholders (If Any) (Refer to Note
Shareholders at The End of 153,835 8) Whose Voting Rights have been 0
The Reporting Period Recovered at the End of the
Reporting Period
Shareholding list of common shareholders with over 5% shares or top ten shareholders
Number of Number of Number of Pledges, markings or
Shareh common common common freezings
Changes in
Name of Nature Of olding shares held at shares held shares held
the reporting State
Shareholder Shareholder Percent the end of the with limited without
period Of Number
age reporting sales limited sales
Shares
period conditions condition
Domestic
Fu Liquan Natural 34.18% 1,023,868,980 0 255,967,245 Pledge 151,287,942
Person
Zhu Jiangming Domestic 5.36% 160,577,490 0 120,433,11 40,144,373 Pledge 10,600,000
Natural 7
Person
Hong Kong
Overseas
Securities 3.91% 117,056,918 16,521,433 0 117,056,918
Legal Person
Clearing Co. Ltd.
Shanghai
Perseverance
Asset
Management
(Limited Others 3.34% 100,000,000 0 100,000,000
-38,000,000
Partnership) -
Gaoyi Linshan
No.1 Yuanwang
Fund
Domestic
Chen Ailing Natural 2.38% 71,262,813 0 53,447,110 17,815,703 Pledge 21,100,000
Person
Domestic
Wu Jun Natural 2.31% 69,250,886 0 51,938,164 17,312,722
Person
China Galaxy
State-owned
Securities Co., 1.50% 44,930,751 -9,706,649 0 44,930,751
Legal Person
Ltd.
Domestic
China Securities Non-state-ow
Finance Co., Ltd. ned Legal
Person
Central Huijin
Asset State-owned
Management Legal Person
Co., Ltd.
Shanghai
Greenwoods
Asset
Management Others 0.95% 28,361,893 -2,255,500 0 28,361,893
Co., Ltd. -
Greenwoods
Global Fund
Description of the association Mr. Fu Liquan And Ms. Chen Ailing Are Husband and Wife. The Company Is Unaware of
relationship or concerted action Whether Other Shareholders Have Associated Relationship or Are Persons Acting in
of above-mentioned Concert.
shareholders
Explanation of the above
shareholders involved in
N/A
proxy/trustee voting rights and
abstention from voting rights
Shareholding list of top ten common shareholders without limited sales condition
Number of common shares held without limited Type of shares
Name of Shareholder
sales condition at the end of the reporting period Type of shares Number
Fu Liquan 255,967,245 RMB common stock 255,967,245
Hong Kong Securities Clearing
Co. Ltd.
Shanghai Perseverance Asset
Management (Limited
Partnership) - Gaoyi Linshan
No.1 Yuanwang Fund
China Galaxy Securities Co.,
Ltd.
Zhu Jiangming 40,144,373 RMB common stock 40,144,373
China Securities Finance Co.,
Ltd.
Central Huijin Asset
Management Co., Ltd.
Shanghai Greenwoods Asset
Management Co., Ltd. - 28,361,893 RMB common stock 28,361,893
Greenwoods Global Fund
National Social Security Fund
一一一 portfolio
Agricultural Bank of China Co.,
Ltd. - Shanghai Investment
Morgan Emerging Power 18,384,960 RMB common stock 18,384,960
Hybrid Securities Investment
Fund
Explanation on associated
relationship or persons acting
in concert among top ten
Mr. Fu Liquan And Ms. Chen Ailing Are Husband and Wife. The Company Is Unaware of
common shareholders without
Whether Other Shareholders Have Associated Relationship or Are Persons Acting in
limited shares, and between
Concert.
top ten common shareholders
without limited shares and top
ten common shareholders
Whether the Company's top ten common shareholders or top ten common shareholders without limited shares agree on
any repurchase transaction in the reporting period
□ Yes √ No
None of the Company's top ten common shareholders or top ten common shareholders without limited shares agreed on
repurchase in the reporting period.
IV. Shareholding Changes of Directors, Supervisors and Senior Executives
□ Applicable √ Not applicable
There were no changes in the shareholding of directors, supervisors and senior executives of the Company during the
reporting period. For details, please refer to the 2020 Annual Report.
V. Change of the Controlling Shareholders and Actual Controller
Change of the controlling shareholders in the reporting period
□ Applicable √ Not applicable
No change has happened to the controlling shareholder in the reporting period of the Company
Change of the actual controller in the reporting period
□ Applicable √ Not applicable
No change has happened to the actual controller in the reporting period
Section VIII Information of Preferred Shares
□ Applicable √ Not applicable
There are no preferred shares in the reporting period.
Section IX Situation on Corporate Bonds
□ Applicable √ Not applicable
Section X Financial Report
I. Audit Reports
Has the semi-annual report been audited?
□ Yes √ No
The Company’s semi-annual financial report has not been audited.
II. Financial Statements
Units of financial reports in the notes: yuan
Prepared by: Zhejiang Dahua Technology Co., Ltd.
June 30, 2021
Unit: RMB
Item June 30, 2021 December 31, 2020
Current Assets:
Cash and Bank Balances 6,690,863,029.69 7,471,652,634.66
Deposit Reservation for
Balance
Loans to Banks and Other
Financial Institutions
Trading Financial Assets 9,614,978.97 2,475,680.45
Derivative Financial Assets
Notes receivable 265,137,658.91 232,857,354.55
Accounts receivable 12,779,041,456.90 12,857,519,110.16
Receivables Financing 901,192,858.59 1,207,879,654.58
Prepayments 182,899,790.83 162,250,648.05
Premium Receivable
Reinsurance Accounts
Receivable
Reinsurance Contract Reserves
Receivable
Other Receivables 922,620,846.22 970,427,893.48
Including: interest receivable
Dividends Receivable
Buying Back the Sale of
Financial Assets
Inventory 7,312,285,468.20 4,928,019,838.00
Contract Assets 111,283,472.17 84,825,834.82
Holding for-sale assets
Non-current Assets Due within
Other Current Assets 720,101,094.63 558,434,219.93
Subtotal of Current Assets 30,517,894,860.69 29,112,299,417.75
Non-current Assets:
Granting of loans and advances
Investment in Creditor's Rights
Investment in Other Creditor's
Rights
Long-term Receivables 2,069,432,687.70 2,250,315,769.50
Long-term Equity Investment 820,449,863.74 455,977,616.16
Investment in Other Equity
Instruments
Other Non-current Financial
Assets
Investment Property 320,218,828.49 336,008,869.13
Fixed Assets 1,979,508,213.29 1,515,594,629.97
Projects under Construction 1,250,289,385.41 1,164,130,453.03
Productive Biological Assets
Oil and gas assets
Right-of-use Assets 205,470,210.43
Intangible Assets 587,307,545.91 406,777,323.39
Development Expenditure
Goodwill 42,685,490.30 42,685,490.30
Long-term Deferred Expenses 34,259,213.84 32,280,430.67
Deferred Income Tax Assets 923,271,010.59 832,453,676.69
Other Non-current Assets 77,223,405.16 86,422,617.82
Subtotal of Non-current Assets 9,248,039,436.46 7,482,734,663.00
Total Assets 39,765,934,297.15 36,595,034,080.75
Current Liabilities:
Short-term loan 1,104,598,520.22 250,177,083.34
Borrowings from the Central
Bank
Borrowings from Banks and
Other Financial Institutions
Transactional financial liabilities 450,897.52
Derivative Financial Liabilities
Notes Payable 3,610,134,581.74 3,258,552,758.17
Accounts Payable 6,781,697,701.64 6,444,787,705.28
Received Prepayments
Contract liabilities 895,221,177.02 671,120,385.08
Financial Assets Sold for
Repurchase
Deposit Taking and Interbank
Deposit
Receiving from Vicariously
Traded Securities
Receiving from Vicariously Sold
Securities
Payroll payable 931,580,109.46 1,805,464,535.31
Tax Payable 353,698,201.33 900,144,863.67
Other Payables 717,772,801.38 970,552,877.22
Including: interest payable
Dividends Payable 17,855,221.21 12,982,399.27
Service Charge and
Commission Payable
Reinsurance Accounts Payable
Holding for-sale liabilities
Non-current Liabilities Due
within 1 Year
Other Current Liabilities 261,106,901.25 209,401,914.77
Subtotal of Current Liabilities 14,915,091,398.89 14,662,093,832.18
Non-current Liabilities:
Insurance Contract Reserves
Long-term loan 1,903,000,000.00 878,000,000.00
Bonds Payable
Including: Preferred Stocks
Perpetual Bonds
Lease Liabilities 107,606,799.04
Long-term Payables
Long-term payroll payable
Expected Liabilities 261,028,749.21 282,427,517.82
Deferred Income 107,015,834.93 110,469,806.29
Deferred Income Tax Liabilities 74,325,425.30 67,272,768.46
Other Non-current Liabilities 358,620,950.30 391,128,045.90
Subtotal of Non-current Liabilities 2,811,597,758.78 1,729,298,138.47
Total Liabilities 17,726,689,157.67 16,391,391,970.65
Shareholders' Equity:
Share Capital 2,994,550,730.00 2,995,579,590.00
Other Equity Instruments
Including: Preferred Stocks
Perpetual Bonds
Capital Reserves 2,592,929,671.76 1,989,655,334.05
Less: Treasury Share 325,372,156.35 581,968,930.89
Other Comprehensive Incomes 90,890,444.47 61,157,523.13
Special Reserves
Surplus Reserves 1,553,691,005.92 1,553,691,005.92
General Risk Reserves
Undistributed Profits 14,595,777,271.43 13,754,915,904.19
Total Shareholders' Equity
Attributable to the Parent Company
Minority Shareholders' Equity 536,778,172.25 430,611,683.70
Total Shareholders' Equity 22,039,245,139.48 20,203,642,110.10
Total Liabilities and Shareholders'
Equity
Legal representative: Fu Liquan Person in charge of accounting: Xu Qiaofen Person in charge of the accounting institut ion: Zhu Zhuling
Unit: RMB
Item June 30, 2021 December 31, 2020
Current Assets:
Cash and Bank Balances 2,025,259,800.74 3,130,479,311.55
Trading Financial Assets
Derivative Financial Assets
Notes receivable 87,323,059.42 74,284,006.99
Accounts receivable 4,896,685,881.86 2,740,152,239.35
Receivables Financing 824,238,249.20 169,109,529.24
Prepayments 35,872,413.73 48,203,550.97
Other Receivables 12,569,808,120.45 13,796,603,550.30
Including: interest receivable
Dividends Receivable
Inventory 174,404,826.80 171,756,222.72
Contract Assets 8,015,054.45 8,338,657.15
Holding for-sale assets
Non-current Assets Due within
Other Current Assets 13,503,095.37 12,592.38
Subtotal of Current Assets 20,694,557,983.11 20,200,768,385.19
Non-current Assets:
Investment in Creditor's Rights
Investment in Other Creditor's
Rights
Long-term Receivables 84,172,743.65 100,221,713.49
Long-term Equity Investment 4,080,499,755.47 3,660,410,557.29
Investment in Other Equity
Instruments
Other Non-current Financial
Assets
Investment Property 166,276,925.08 173,003,549.71
Fixed Assets 582,009,977.21 550,991,444.04
Projects under Construction 592,328,669.32 438,014,907.22
Productive Biological Assets
Oil and gas assets
Right-of-use Assets 86,093,925.51
Intangible Assets 149,118,648.79 156,335,152.97
Development Expenditure
Goodwill
Long-term Deferred Expenses 17,074,922.32 21,149,342.55
Deferred Income Tax Assets 117,342,881.29 135,371,242.86
Other Non-current Assets 5,058,584.78 35,774,247.16
Subtotal of Non-current Assets 6,791,844,115.02 5,627,125,841.88
Total Assets 27,486,402,098.13 25,827,894,227.07
Current Liabilities:
Short-term loan 250,023,003.47 250,177,083.34
Transactional financial liabilities
Derivative Financial Liabilities
Notes Payable 271,118,597.42 303,660,579.62
Accounts Payable 614,175,514.19 752,373,890.95
Received Prepayments
Contract liabilities 50,494,831.34 85,275,423.36
Payroll payable 582,075,190.23 1,127,500,408.14
Tax Payable 237,773,945.08 627,351,201.46
Other Payables 760,021,878.84 1,002,654,121.27
Including: interest payable
Dividends Payable 17,855,221.21 12,982,399.27
Holding for-sale liabilities
Non-current Liabilities Due
within 1 Year
Other Current Liabilities 43,129,441.92 26,870,130.42
Subtotal of Current Liabilities 2,992,941,904.56 4,326,506,588.58
Non-current Liabilities:
Long-term loan 1,800,000,000.00 750,000,000.00
Bonds Payable
Including: Preferred Stocks
Perpetual Bonds
Lease Liabilities 42,559,262.89
Long-term Payables
Long-term payroll payable
Expected Liabilities 3,515,158.54 8,333,634.18
Deferred Income
Deferred Income Tax Liabilities 43,117,540.51 29,407,289.24
Other Non-current Liabilities 6,823,336.37 10,599,934.34
Subtotal of Non-current Liabilities 1,896,015,298.31 798,340,857.76
Total Liabilities 4,888,957,202.87 5,124,847,446.34
Shareholders' Equity:
Share Capital 2,994,550,730.00 2,995,579,590.00
Other Equity Instruments
Including: Preferred Stocks
Perpetual Bonds
Capital Reserves 2,589,617,306.53 1,976,156,775.91
Less: Treasury Share 325,372,156.35 581,968,930.89
Other Comprehensive Incomes 537,733.09 522,554.00
Special Reserves
Surplus Reserves 1,553,691,005.92 1,553,691,005.92
Undistributed Profits 15,784,420,276.07 14,759,065,785.79
Total Shareholders' Equity 22,597,444,895.26 20,703,046,780.73
Total Liabilities and Shareholders'
Equity
Unit: RMB
Item 2021 Semi-Annual 2020 Semi-Annual
I. Total Operating Revenue 13,505,005,733.89 9,838,328,853.62
Including: Operating Revenue 13,505,005,733.89 9,838,328,853.62
Interest Income
Earned Premiums
Service Charge and
Commission Income
II. Total Operating Cost 11,947,184,367.94 8,605,447,370.85
Including: Operating Cost 7,910,714,928.97 5,099,250,150.57
Interest Expenditures
Service Charge and
Commission Expenses
Surrender Value
Net Claims Paid
The Net Amount
Withdrawn for Insurance Liability
Reserves
Policyholder Dividend
Expense
Reinsurance Cost
Taxes and Surcharges 100,270,188.53 55,143,183.10
Sales Expenses 2,059,001,711.42 1,805,227,134.27
Administration expenses 393,272,171.06 355,781,491.22
Research and
development expense
Financial Expenses 77,676,041.15 -24,567,529.26
Including: interest
expenses
Interest Income 114,759,041.30 82,236,920.48
Add: Other income 426,519,272.06 458,546,321.24
Investment Income (Mark "-"
-127,515,259.00 -32,178,746.19
for Loss)
Including: Investment
Income from Affiliates and Joint -155,395,120.84 -44,335,467.10
Ventures
Profits from recognition
Termination of Financial Assets at
Amortized Cost
Exchange Gains (Mark "-"
for Losses)
Profit of Net Exposure
Hedging (Mark "-" for Loss)
Incomes from changes in fair
value (losses marked with "-")
Credit Impairment Losses
-368,461,594.95 -87,762,680.91
(Mark "-" for Loss)
Asset Impairment Losses
-9,923,448.05 -42,303,107.35
(Mark "-" for Loss)
Asset Disposal Income
(Mark "-" for Loss)
III. Operating Profit (Mark "-" for Loss) 1,635,389,406.05 1,546,202,720.04
Add: Non-operating Revenues 6,539,902.55 6,124,434.50
Less: Non-operating Expenses 4,968,968.32 12,034,840.16
IV. Total Profit (Mark "-" for Total Loss) 1,636,960,340.28 1,540,292,314.38
Less: Income Tax Expense -38,451,185.77 169,559,416.73
V. Net Profit (Mark "-" for Net Loss) 1,675,411,526.05 1,370,732,897.65
(I) Classified by operation continuity
(Mark "-" for Net Loss)
Operation (Mark "-" for Net Loss)
(II) Classified by the attribution of
ownership
Parent Company's Owner
and Loss
VI. Net Amount of Other
Comprehensive Incomes after Tax
Net Amount of Other
Comprehensive Incomes after Tax
Attributable to the Parent Company's
Owner
(I) Other comprehensive income
that cannot be reclassified as P/L
variation of the defined benefit plan
income that cannot be transferred to
P/L under the equity method
value of investment in other equity
instruments
value of the credit risk of the
enterprise
(II) Other comprehensive income 29,732,921.34 1,838,745.43
that will be reclassified as P/L
income that can be transferred to P/L
under the equity method
value of investment in other creditor's
rights
reclassified into other comprehensive
income
impairment of investment in other
creditor's rights
reserves
difference
Net Amount of Other
Comprehensive Incomes After Tax 70,027.85 -12.11
Attributable to Minority Shareholders
VII. Total Comprehensive Income 1,705,214,475.24 1,372,571,630.97
Total Comprehensive Income
Attributable to the Parent Company's 1,672,908,808.89 1,370,813,109.87
Owner
Total Comprehensive Income
Attributable to Minority Shareholders
VIII. Earnings per Share:
(I) Basic Earnings per Share 0.56 0.47
(II) Diluted Earnings per Share 0.56 0.47
Legal representative: Fu Liquan Person in charge of accounting: Xu Qiaofen Person in charge of the accounting
institution: Zhu Zhuling
Unit: RMB
Item 2021 Semi-Annual 2020 Semi-Annual
I. Operating Revenue 4,167,159,930.09 3,624,985,329.95
Less: Operating Cost 526,172,609.28 464,299,570.21
Taxes and Surcharges 53,634,639.42 37,785,882.54
Sales Expenses 823,745,443.38 763,855,586.98
Administration expenses 211,532,912.39 209,844,615.20
Research and
development expense
Financial Expenses -19,195,740.24 5,634,218.96
Including: interest
expenses
Interest Income 54,366,366.58 29,029,575.89
Add: Other income 357,721,494.76 384,657,520.57
Investment Income (Mark
-156,962,757.83 -37,634,661.64
"-" for Loss)
Including: Investment
Income from Affiliates and Joint -171,271,964.55 -45,152,368.00
Ventures
Profits from
Derecognition of Financial Assets at
Amortized Cost (Mark "-" for Loss)
Profit of Net Exposure
Hedging (Mark "-" for Loss)
Incomes from changes in
fair value (losses marked with "-")
Credit Impairment Losses
-15,404,331.60 -5,673,952.18
(Mark "-" for Loss)
Asset Impairment Losses
-634,899.32 -4,696,447.86
(Mark "-" for Loss)
Asset Disposal Income
(Mark "-" for Loss)
II. Operating Profit (Mark "-" for
Loss)
Add: Non-operating Revenues 4,455,730.54 2,972,951.40
Less: Non-operating Expenses 581,042.68 6,055,686.02
III. Total Profit (Mark "-" for Total
Loss)
Less: Income Tax Expense -7,414,161.31 105,871,539.11
IV. Net Profit (Mark "-" for Net Loss) 1,827,669,010.59 1,340,607,756.71
(I) Net Profit as a Going
Concern (Mark "-" for Net Loss)
(II) Net Profit of Discontinued
Operation (Mark "-" for Net Loss)
V. Net Amount of Other
Comprehensive Incomes After Tax
(I) Other comprehensive
income that cannot be reclassified
as P/L
variation of the defined benefit plan
income that cannot be transferred to
P/L under the equity method
value of investment in other equity
instruments
value of the credit risk of the
enterprise
(II) Other comprehensive
income that will be reclassified as 15,179.09
P/L
income that can be transferred to
P/L under the equity method
value of investment in other
creditor's rights
reclassified into other
comprehensive income
credit impairment of investment in
other creditor's rights
reserves
difference
VI. Total Comprehensive Income 1,827,684,189.68 1,340,607,756.71
VII. Earnings per Share:
(I) Basic Earnings per Share 0.62 0.46
(II) Diluted Earnings per Share 0.62 0.46
Unit: RMB
Item 2021 Semi-Annual 2020 Semi-Annual
I. Cash Flow Generated by
Operational Activities:
Cash from Sales of
Merchandise and Provision of 15,020,513,603.09 12,453,860,700.45
Services
Net Increase in Customer's
Bank Deposits and Interbank
Deposits
Net Increase in Borrowings
from the Central Bank
Net Increase in Borrowings
from Other Financial Institutions
Cash Arising from Receiving
Premiums for the Original Insurance
Contract
Net Amount Arising from
Reinsurance Business
Net Increase in Deposits and
Investments from Policyholders
Cash Arising from Interests,
Service Charges and Commissions
Net Increase in Borrowings
from Banks and Other Financial
Institutions
Net Increase in Repurchase
Business Funds
Net Amount of Cash Received
from the Vicariously Traded
Securities
Tax Refund 1,098,611,055.94 1,193,492,111.32
Other Received Cashes
Related to Operational Activities
Subtotal of cash inflow from
operational activities
Cash Paid for Merchandise and
Services
Net Increase in Loans and
Advances to Customers
Net Increase in Deposits with
Central Bank and Other Financial
Institutions
Cash Paid for Original
Insurance Contract Claims
Net increase of funds lent
Cash Paid for Interests, Service
Charges and Commissions
Cash Paid for Policy Dividends
Cash Paid to and for
Employees
Cash Paid for Taxes and
Surcharges
Other Paid Cashes Related to
Operational Activities
Subtotal of cash outflow from
operational activities
Net cash flow generated by
-871,108,797.99 -106,927,963.95
operating activities
II. Cash Flow from Investment
Activities:
Cash Arising from Disposal of
Investments
Cash Arising from Investment
Incomes
Net Cash Arising from Disposal
of Fixed Assets, Intangible Assets 47,268,105.91 851,832.61
and Other Long-term Assets
Net Cash Arising from Disposal
of Subsidiaries and Other Business
Units
Other Received Cashes
Related to Investment Activities
Subtotal of cash inflow from
investment activities
Cash Paid for Purchase and
Construction of Fixed Assets,
Intangible Assets and Other
Long-term Assets
Cash Paid for Investments 1,302,000,000.00 1,272,547,000.00
Net Increase in Pledge Loans
Net Cash Paid for Acquisition of
Subsidiaries and Other Business
Units
Other Paid Cashes Related to
Investment Activities
Subtotal of cash outflows from
investment activities
Net amount of cash flow generated
-975,034,182.68 -1,247,540,391.99
by investment activities
III. Cash Flow from Financing
Activities:
Cash Arising from Absorbing
Investments
Including: Cash Arising from
Subsidiaries Absorbing Investments 52,905,784.31 59,440,000.00
by Minority Shareholders
Cash Arising from Borrowings 2,728,079,926.55 3,324,530,906.01
Other Received Cashes
Related to Financing Activities
Subtotal of cash inflow from
financing activities
Cash Paid for Debts
Repayment
Cash Paid for Distribution of
Dividends and Profits or Payment of 829,253,962.62 418,919,503.17
Interests
Including: Dividends and Profits
Paid to Minority Shareholders by
Subsidiaries
Other Paid Cashes Related to
Financing Activities
Subtotal of cash outflow from
financing activities
Net cash flow generated by
financing activities
IV. Impact of Fluctuation in
Exchange Rate on Cash and Cash -35,603,147.83 -430,036.43
Equivalents
V. Net Increase in Cash and Cash
-808,743,871.72 46,435,465.25
Equivalents
Add: Cash and Cash
Equivalents at the Commencement 7,358,452,769.53 2,734,185,976.41
of the Period
VI. Cash and Cash Equivalents at
the End of the Period
Unit: RMB
Item 2021 Semi-Annual 2020 Semi-Annual
I. Cash Flow Generated by
Operational Activities:
Cash from Sales of
Merchandise and Provision of 1,594,534,564.89 7,212,656,097.72
Services
Tax Refund 313,656,061.60 395,396,831.40
Other Received Cashes
Related to Operational Activities
Subtotal of cash inflow from
operational activities
Cash Paid for Merchandise and
Services
Cash Paid to and for
Employees
Cash Paid for Taxes and
Surcharges
Other Paid Cashes Related to 557,213,500.36 452,566,064.54
Operational Activities
Subtotal of cash outflow from
operational activities
Net cash flow generated by
-2,113,761,449.23 4,140,179,171.29
operating activities
II. Cash Flow from Investment
Activities:
Cash Arising from Disposal of
Investments
Cash Arising from Investment
Incomes
Net Cash Arising from Disposal
of Fixed Assets, Intangible Assets 58,522,097.94 7,862,105.25
and Other Long-term Assets
Net Cash Arising from Disposal
of Subsidiaries and Other Business
Units
Other Received Cashes
Related to Investment Activities
Subtotal of cash inflow from
investment activities
Cash Paid for Purchase and
Construction of Fixed Assets,
Intangible Assets and Other
Long-term Assets
Cash Paid for Investments 1,348,140,000.00 1,309,807,000.00
Net Cash Paid for Acquisition of
Subsidiaries and Other Business
Units
Other Paid Cashes Related to
Investment Activities
Subtotal of cash outflows from
investment activities
Net amount of cash flow generated
-660,830,987.48 -1,168,531,754.69
by investment activities
III. Cash Flow from Financing
Activities:
Cash Arising from Absorbing
Investments
Cash Arising from Borrowings 1,679,079,926.55 1,889,800,000.00
Other Received Cashes
Related to Financing Activities
Subtotal of cash inflow from
financing activities
Cash Paid for Debts
Repayment
Cash Paid for Distribution of
Dividends and Profits or Payment of 822,052,988.68 410,133,298.68
Interests
Other Paid Cashes Related to
Financing Activities
Subtotal of cash outflow from
financing activities
Net cash flow generated by
financing activities
IV. Impact of Fluctuation in
Exchange Rate on Cash and Cash -55,649.44 -73,606.83
Equivalents
V. Net Increase in Cash and Cash
-1,118,013,319.95 -396,717,757.13
Equivalents
Add: Cash and Cash
Equivalents at the Commencement 3,090,496,504.00 860,741,299.14
of the Period
VI. Cash and Cash Equivalents at
the End of the Period
Amount of this period
Unit: RMB
Shareholders' Equity Attributable to the Parent Company's Owner
Other Equity Instruments Other Minority Total
Item
Less: General
Capital Comprehe Special Surplus Undistribut Sharehold Sharehold
Preferre Perpetu
Share Capital Treasury Risk Others Subtotal
Reserves nsive Reserves Reserves ed Profits ers' Equity ers' Equity
d al Others
Share Reserves
Stocks Bonds Incomes
I. Balance at the 2,995,579,59 1,989,655, 581,968,9 61,157,52 1,553,691, 13,754,91 19,773,03 430,611,6 20,203,64
End of Last Year 0.00 334.05 30.89 3.13 005.92 5,904.19 0,426.40 83.70 2,110.10
Add: Changes
in Accounting
Policies
Correction of
Errors in the
Previous Period
Consolidated
under the Same
Control
Others
II. Balance at the 2,995,579,59 1,989,655, 581,968,9 61,157,52 1,553,691, 13,754,91 19,773,03 430,611,6 20,203,64
Start of This Year 0.00 334.05 30.89 3.13 005.92 5,904.19 0,426.40 83.70 2,110.10
III. Increases or
Decreases in This 603,274,3 -256,596,7 29,732,92 840,861,3 1,729,436, 106,166,4 1,835,603,
-1,028,860.00
Period (Mark "-" for 37.71 74.54 1.34 67.24 540.83 88.55 029.38
Decreases)
(I) Total
Comprehensive
Income
(II) Shareholders'
Contribution and 87,107,86 -256,596,7 342,675,7 69,441,53 412,117,3
-1,028,860.00
Reduction in 3.62 74.54 78.16 3.51 11.67
Capital
-7,461,896 -256,596,7 248,106,0 51,074,26 299,180,2
invested by the -1,028,860.00
.20 74.54 18.34 9.52 87.86
owner
Invested by
Holders of Other
Equity Instruments
Share-based
Payments 94,569,75 94,569,75 18,367,26 112,937,0
Recorded into 9.82 9.82 3.99 23.81
Shareholders'
Equity
(III) Profit -802,314,5 -802,314,5 -802,314,
Distribution 20.31 20.31 520.31
of Surplus
Reserves
of General Risk
Reserves
-802,314,5 -802,314,5 -802,314,
Owners (or
Shareholders)
(IV) Internal
Carry-forward of
Shareholders'
Equity
Reserves
Transferred into
Capital (or Share
Capital)
Reserves
Transferred into
Capital (or Share
Capital)
Reserves Covering
Losses
retained earnings
of the variation of
the defined benefit
plan
Carry-forward
Retained Earnings
of the
Comprehensive
Income
(V) Special
Reserves
this period
Period
(VI) Others
IV. Balance at the 2,994,550,73 2,592,929, 325,372,1 90,890,44 1,553,691, 14,595,77 21,502,46 536,778,1 22,039,24
End of This Period 0.00 671.76 56.35 4.47 005.92 7,271.43 6,967.23 72.25 5,139.48
Amount of Previous Period
Unit: RMB
Shareholders' Equity Attributable to the Parent Company's Owner
Other Equity Instruments Other Minority Total
Item
Less: General
Share Capital Comprehe Special Surplus Undistribute Shareholde Shareholde
Preferr
Perpetual Treasury Risk Others Subtotal
Capital nsive rs' Equity rs' Equity
ed Others Reserves Reserves Reserves d Profits
Bonds Share Reserves
Stocks Incomes
I. Balance at the 3,003,713,23 1,882,855, 1,057,584, 12,308,27 1,553,691, 10,248,023, 15,643,007 333,160,68 15,976,167,
End of Last Year 0.00 119.53 258.31 6.23 005.92 654.54 ,027.91 3.75 711.66
Add: Changes
in Accounting
Policies
Correction of
Errors in the
Previous Period
Consolidated
under the Same
Control
Others
II. Balance at the 3,003,713,23 1,882,855, 1,057,584, 12,308,27 1,553,691, 10,248,023, 15,643,007 333,160,68 15,976,167,
Start of This Year 0.00 119.53 258.31 6.23 005.92 654.54 ,027.91 3.75 711.66
III. Increases or
Decreases in This -2,247,700.0 -48,671,3 -428,452, 1,838,745. 971,781,988 1,351,154, 60,254,389. 1,411,408,7
Period (Mark "-" for 0 49.18 683.70 43 .66 368.61 76 58.37
Decreases)
(I) Total 1,838,745. 1,368,974,3 1,370,813, 1,758,521.1 1,372,571,6
Comprehensive 43 64.44 109.87 0 30.97
Income
(II) Shareholders'
Contribution and -2,247,700.0 -49,972,1 -428,452, 376,232,86 59,440,000. 435,672,86
Reduction in 0 23.11 683.70 0.59 00 0.59
Capital
-2,247,700.0 -119,640,3 -428,452, 306,564,61 59,440,000. 366,004,61
invested by the
owner
Invested by
Holders of Other
Equity Instruments
Share-based
Payments 69,668,24 69,668,245 69,668,245.
Recorded into 5.17 .17 17
Shareholders'
Equity
(III) Profit -397,192,37 -397,192,3 -397,192,37
Distribution 5.78 75.78 5.78
of Surplus
Reserves
of General Risk
Reserves
-397,192,37 -397,192,3 -397,192,37
Owners (or
Shareholders)
(IV) Internal
Carry-forward of
Shareholders'
Equity
Reserves
Transferred into
Capital (or Share
Capital)
Reserves
Transferred into
Capital (or Share
Capital)
Reserves Covering
Losses
retained earnings
of the variation of
the defined benefit
plan
Carry-forward
Retained Earnings
of the
Comprehensive
Income
(V) Special
Reserves
this period
Period
(VI) Others 356,642.59
IV. Balance at the 3,001,465,53 1,834,183, 629,131,5 14,147,02 1,553,691, 11,219,805, 16,994,161 393,415,07 17,387,576,
End of This Period 0.00 770.35 74.61 1.66 005.92 643.20 ,396.52 3.51 470.03
Amount of this period
Unit: RMB
Other Equity Instruments Less: Other
Item Special Surplus Undistribute Total Shareholders'
Share Capital Preferred Perpetual Capital Reserves Treasury Comprehens Others
Others Reserves Reserves d Profits Equity
Stocks Bonds Share ive Incomes
I. Balance at the 2,995,579,590.00 1,976,156,775.91 581,968,930.8 522,554.00 1,553,691,005.9 14,759,065,7 20,703,046,780.73
End of Last Year 9 2 85.79
Add: Changes
in Accounting
Policies
Correction of
Errors in the
Previous Period
Others
II. Balance at the 581,968,930.8 1,553,691,005.9 14,759,065,7
Start of This Year 9 2 85.79
III. Increases or
Decreases in This -256,596,774. 1,025,354,49
-1,028,860.00 613,460,530.62 15,179.09 1,894,398,114.53
Period (Mark "-" for 54 0.28
Decreases)
(I) Total
Comprehensive 15,179.09 1,827,684,189.68
Income
(II) Shareholders'
Contribution and -256,596,774.
-1,028,860.00 94,706,282.63 350,274,197.17
Reduction in 54
Capital
-256,596,774.
invested by the -1,028,860.00 -7,461,896.20 248,106,018.34
owner
Invested by
Holders of Other
Equity Instruments
Share-based
Payments
Recorded into
Shareholders'
Equity
(III) Profit -802,314,52
-802,314,520.31
Distribution 0.31
of Surplus
Reserves
-802,314,52
Owners (or -802,314,520.31
Shareholders)
(IV) Internal
Carry-forward of
Shareholders'
Equity
Reserves
Transferred into
Capital (or Share
Capital)
Reserves
Transferred into
Capital (or Share
Capital)
Reserves Covering
Losses
retained earnings
of the variation of
the defined benefit
plan
Carry-forward
Retained Earnings
of the
Comprehensive
Income
(V) Special
Reserves
this period
Period
(VI) Others 518,754,247.99 518,754,247.99
IV. Balance at the 325,372,156.3 1,553,691,005.9 15,784,420,2
End of This Period 5 2 76.07
Amount of Previous Period
Unit: RMB
Other Equity Instruments Other
Less:
Item Capital Comprehen Special Surplus Undistributed Total Shareholders'
Share Capital Preferred Perpetual Treasury Others
Others Reserves sive Reserves Reserves Profits Equity
Stocks Bonds Share
Incomes
I. Balance at the 3,003,713,230. 1,867,489,901. 1,057,584,2 1,553,691,005.
End of Last Year 00 04 58.31 92
Add: Changes
in Accounting
Policies
Correction of
Errors in the
Previous Period
Others
II. Balance at the 3,003,713,230. 1,867,489,901. 1,057,584,2 1,553,691,005.
Start of This Year 00 04 58.31 92
III. Increases or
Decreases in This -428,452,68
-2,247,700.00 -49,250,688.72 943,415,380.93 1,320,369,675.91
Period (Mark "-" for 3.70
Decreases)
(I) Total
Comprehensive 1,340,607,756.71 1,340,607,756.71
Income
(II) Shareholders'
Contribution and -428,452,68
-2,247,700.00 -49,250,688.72 376,954,294.98
Reduction in 3.70
Capital
-119,640,368.2 -428,452,68
invested by the -2,247,700.00 306,564,615.42
owner
Invested by
Holders of Other
Equity Instruments
Share-based
Payments
Recorded into
Shareholders'
Equity
(III) Profit
-397,192,375.78 -397,192,375.78
Distribution
of Surplus
Reserves
Owners (or -397,192,375.78 -397,192,375.78
Shareholders)
(IV) Internal
Carry-forward of
Shareholders'
Equity
Reserves
Transferred into
Capital (or Share
Capital)
Reserves
Transferred into
Capital (or Share
Capital)
Reserves Covering
Losses
retained earnings
of the variation of
the defined benefit
plan
Carry-forward
Retained Earnings
of the
Comprehensive
Income
(V) Special
Reserves
this period
Period
(VI) Others
IV. Balance at the 3,001,465,530. 1,818,239,212. 629,131,574 1,553,691,005.
End of This Period 00 32 .61 92
III. Basic Information about the Company
Zhejiang Dahua Technology Co., Ltd. (hereinafter referred to as “Company” or “the Company”) was incorporated under
the official approval document No. 18 [2002] issued by Zhejiang Provincial People's Government Work Leading Group for
Enterprise Listing in June 2002, a stock company limited established on the basis of overall change of the former
Hangzhou Dahua Information Technology Co., Ltd., co-founded by 5 natural persons, Fu Liquan, Chen Ailing, Zhu
Jiangming, Liu Yunzhen and Chen Jianfeng.
On April 22, 2008, the Company issued RMB 16.8 million shares of common stock to the general public for the first time
under the approval document No. 573 [2008] Securities Regulatory Issuance, issued by China Securities Regulatory
Commission (“CSRC”). It was listed on Shenzhen Stock Exchange on May 20, 2008 with a registered capital of RMB
industry.
As of June 30, 2021, the Company has issued a total of 2,995,579,590shares, with a registered capital of RMB
address is No.1199, Bin’an Road, Binjiang District, Hangzhou. The Company's main operation activities include the
development, services & sales of computer software, the design, development, production, installation & sales of
electronic products and communication products, the development, system integration & sales of network products, the
design & installation of electronic engineering products, information technology consulting service, import & export
businesses. (Refer to the “Importer and Exporter Qualification” for the details of the scope). (For items subject to approval
according to law, business activities can only be carried out after approval by relevant departments)
The actual controllers of the Company are Fu Liquan and Chen Ailing.
This financial statement has been approved by Board of Directors on August 27, 2021.
For details of the scope of the consolidated financial statement for the current period, refer to Notes IX “Equity in Other
Entities”, and for details of the changes in the scope of the consolidated financial statement for the current period, please
refer to Notes VIII “Changes in the Scope of Consolidation”.
IV. Basis for Preparing the Financial Statement
The Company prepares the financial statement, on a going concern basis, based on actual transactions and matters, in
accordance with Accounting Standards for Business Enterprises - Basic Standards issued by the Ministry of Finance and
all specific accounting standards, application guidelines of accounting standards for business enterprises, explanations on
the accounting standards for business enterprises and other related regulations (hereinafter referred to as “Accounting
Standards for Business Enterprises” collectively, and the disclosure provisions in the Preparation Rules for Information
Disclosures by Companies Offering Securities to the Public No. 15 - General Provisions on Financial Reports issued by
CSRC.
The Company has the capability to continue operation for at least 12 months from the end of the current reporting period,
without any significant event affecting the continuing operation.
V. Significant Accounting Polices and Accounting Estimates
Notes to specific accounting policies and accounting estimates:
The following disclosures cover the specific accounting policies and accounting estimates formulated by the Company
according to the characteristics of its production and operation.
This financial statement is in compliance with the requirements on the Accounting Standards for Business Enterprises
promulgated by the Ministry of Finance and presents truly and completely the financial position of the consolidated
companies and the parent company as at June 30, 2021 and the operating results and cash flows of the consolidation and
the parent company for the first half of 2021.
The accounting period of the Company is from January 1 to December 31 of each calendar year.
The Company's operating cycle is 12 months.
For the domestic operating entities of the Company and its overseas operating entity Dahua Technology (HK) Limited, the
reporting currency is Renminbi ("RMB"). The remaining overseas operating entities determine the appropriate currency to
be their functional currency based on the currency of the primary economic environment in which they operate.
control and business combinations not involving enterprises under common control
Business combination under common control: The assets and liabilities acquired by the merging party in business
combination shall be measured at the book value of the assets, liabilities of the merged party (including goodwill incurred
in the acquisition of the merged party by ultimate controlling party) in the consolidated financial statements of the ultimate
controlling party on the date of combination. The difference between the book value of the net assets obtained and the
book value of the consideration paid for the combination (or total nominal value of the issued shares) is adjusted to capital
premium in capital reserve. Adjustments shall be made to retained earnings in the event that the share premiums in the
capital reserves are not sufficient for write-down.
Business combinations involving entities not under common control: The assets paid and liabilities incurred or committed
as a consideration of business combination by the merging party were measured at fair value on the date of acquisition
and the difference between the fair value and its book value shall be charged to the profit or loss for the period. Where the
cost of combination is higher than the fair value of the identifiable net assets acquired from the merging party in business
combination, such difference shall be recognized as goodwill; where the cost of combination is less than the fair value of
the identifiable net assets acquired from the merging party in business combination, such difference shall be charged to
the profit or loss for the period.
The fees which are directly related to the business combination shall be recognized as the profit or loss in the period when
the costs are incurred; the transaction expenses of issuing equity securities or debt securities for business merger shall be
initially capitalized for equity securities or debt securities.
(1) Scope of Consolidation
The scope of consolidation of the consolidated financial statements is based on controlling interests and includes the
Company and all the subsidiaries. Control means that the Company has the power over the investee, enjoys variable
returns by participating in the relevant activities of the investee, and has the ability to use the power over the investee to
influence its return amount.
(2) Procedures of consolidation
The Company treats the whole enterprise group as a single accounting entity and prepares consolidated financial
statements in accordance with unified accounting policies to reflect the overall financial status, operating results and cash
flow of the enterprise group. The impact of internal transactions between the Company and its subsidiaries and among the
subsidiaries shall be offset. If internal transactions indicate impairment losses of related assets, the losses shall be
recognized in full. If the accounting policies and accounting periods adopted by subsidiaries are inconsistent with those of
the company, necessary adjustments shall be made according to the accounting policies and accounting periods of the
company when preparing the consolidated financial statements.
The owner's equity, the net profit or loss and the comprehensive income attributable to minority shareholders of a
subsidiary of the current period are presented separately under the owners' equity in the consolidated balance sheet, the
net profit and the total comprehensive income in the consolidated income statement respectively. Where losses
attributable to the minority shareholders of a subsidiary of the current period exceed the minority shareholders' interest
entitled in the shareholders' equity of the subsidiary at the beginning of the period, the excess is allocated against the
minority shareholders’ interest.
① Acquisition of subsidiaries or business
During the reporting period, if there are new subsidiaries or businesses due to business consolidation under common
control, the operating results and cash flows from the beginning of the current period to the end of the reporting period of
the consolidated subsidiaries or businesses will be included in the consolidated financial statements, and at the same time,
the opening amount of the consolidated financial statements and related items in the comparison statements will be
adjusted, which will be regarded as the consolidated reporting entity that has existed since the ultimate controlling party
started to control.
If the investee under common control can be controlled due to additional investment and other reasons, the equity
investment held before gaining the control of the consolidated party is recognized as relevant profit and loss, other
comprehensive income and changes in other net assets at the later of the date of acquisition of the original equity and the
date when the consolidating and consolidated parties are under common control, and shall be written down to the opening
balance retained earnings or the current profit and loss in the comparative reporting period.
During the reporting period, if subsidiaries or businesses are added due to the consolidation of enterprises not under
common control, the fair values of identifiable assets, liabilities and contingent liabilities determined on the purchase date
shall be included in the consolidated financial statements from the acquisition date.
In connection with imposing control over the investee not under common control due to additional investment and other
reasons, the equity of acquiree held before the acquisition date shall be remeasured at the fair value of such equity on the
acquisition date and the difference between fair value and book value shall be recognized as investment income in the
current period. Other comprehensive income that can be reclassified into the profit and loss in the future and other
changes in the owner's equity under the equity method, which are related to the equity of the purchased party held before
the acquisition date, are converted into the current investment income of the acquisition date.
② Disposal of subsidiaries or business
a. General treatment
When losing control of the investee due to partial disposal of the equity investment, or any other reasons, the remaining
equity investment shall be remeasured at fair value at the date the control right is lost. The sum of consideration received
from disposal of equity investment and the fair value of the remaining equity investment, net of the difference between the
sum of the Company's previous share of the subsidiary's net assets recorded from the acquisition date or combination
date and the sum of goodwill, is recognized in investment income in the period in which control is lost. Other
comprehensive income related to the original subsidiary's equity investment and can be reclassified into profit and loss in
the future as well as other changes in the owner's equity accounted using the equity method, shall be converted into
current investment income when the control right is lost.
b. Disposal of subsidiary achieved by stages
When disposal of equity interests of subsidiaries via multiple transaction until the control is lost, generally transactions in
stages are treatment as a package deal if the transaction terms, conditions, and economic impact of disposal of the
subsidiary's equity interests comply with one or more of the following:
i. These transactions are achieved at the same time or the mutual effects on each other are considered;
ii. A complete set of commercial results can be achieved with reference to the series of transactions as a whole;
iii. Achieving a transaction depends on at least achieving of one of the other transaction;
iv. One transaction recognized separately is not economical, but it is economical when considered together with other
transactions.
If these transactions belong to a package of transactions, such transactions shall be treated as the transactions in which
the subsidiaries concerned will be disposed and the control is lost. However, the differences between price on each
disposal and disposal of investment on the subsidiary's net assets shall be recognized in other comprehensive income in
the consolidated financial statements, and included in the current profit and loss when the control right is lost.
If such transactions do not belong to a package transaction, accounting treatment for partial disposal of equity
investments of subsidiary without losing control shall be applied before the control right is lost. When the control right is
lost, general accounting treatment for disposal of a subsidiary shall be used.
③ Acquisition of minority interest of subsidiaries
The Company shall adjust the share premium in the capital reserve of the consolidated balance sheet with respect to any
difference between the long-term equity investment arising from the acquisition of minority interest and the net assets
attributing to the parent company continuously calculated on the basis of the newly increased share proportion as of the
acquisition date or date of consolidation, adjust the retained earnings if the share premium in the capital reserve is
insufficient for write-down.
④ Partial disposal of equity Investment in subsidiaries without losing control
The difference between disposal consideration and the share of net assets continuously calculated by the subsidiary from
the acquisition date or the consolidation date corresponding to the disposal of long-term equity investment shall be
adjusted to share premium in the capital reserve in the consolidated balance sheet. Adjustments shall be made to retained
earnings in the event that the share premiums in the capital reserves are not sufficient for write-down.
Operation
A joint arrangement includes a joint operation and a joint venture.
Joint operation refers to a joint arrangement in which the parties to the joint venture possess the assets related to the
arrangement and assume the liabilities related to the arrangement.
The Company recognizes the following items related to the share of interests in the joint operation:
(1) The assets held separately by the Company and the assets held jointly according to the Company's share;
(2) The liabilities borne separately by the Company and liabilities jointly borne according to the Company's share;
(3) The income generated from the sale of the Company's share of joint operating output;
(4) The income generated from the sale of output in the joint operation according to the Company's share;
(5) The expenses incurred separately, and recognize the expenses incurred in the joint operation according to the
Company's share;
The Company’s investments in joint ventures are accounted by the equity method. For details, please refer to the financial
report under this section - (V) Significant Accounting Polices and Accounting Estimates - 19. Long-term Equity Investment.
Cash refers to the Company's cash on hand and deposits that are available for payment at any time. Cash equivalents
refer to the investments held by the Company which are short-term, highly liquid, easy to be converted into known
amounts of cash and have little risk of value change.
(1) Foreign currency transactions
Foreign currency transactions shall be translated into RMB at the spot exchange rate on the day when the transactions
occurred.
Balance sheet date foreign currency monetary items shall be translated using the spot exchange rate at the balance sheet
date. The resulting exchange differences are recognized in profit or loss for the current period, except for those
differences related to the principal and interest on a specific-purpose borrowing denominated in foreign currency for
acquisitions, construction or production of the qualified assets, which should be capitalized as cost of the assets.
(2) Translation of foreign currency financial statements
All assets and liabilities items in balance sheet are translated based on spot exchange rate on the balance sheet date; the
owner’s equity items other than “undistributed profit” are translated at a spot exchange rate when incurred. Revenue and
expense items in the income statement are translated at a spot exchange rate at the transaction occurrence date.
For disposal of overseas operation, the translation difference as stated in the foreign currency financial statements
relating to overseas operation, is accounted for in the profit and loss account in the current period from owners' equity
items.
A financial asset, financial liability or equity instrument shall be recognized when the Company becomes a party to the
financial instrument contract.
(1) Classification of the financial instruments
According to the Company's business model for management of the financial assets and the contractual cash flow
features of the financial assets, the financial assets, when initially recognized, are classified as: financial assets at
amortized cost, financial assets at fair value through other comprehensive income (debt instruments) and financial assets
at fair value through profit or loss.
The financial assets that meet the following conditions and are not required to be measured at fair value and whose
changes are incorporated to the current profit and loss shall be classified by the Company as financial assets measured at
amortized cost:
- The business model aims at collecting contractual cash flow;
- The contractual cash flow is only the payment of principal and interest based on the outstanding principal amount.
The financial assets that meet the following conditions and are not required to be measured at fair value and whose
changes are included in the current profit and loss shall be classified by the Company as financial assets (debt
instruments) measured at fair value and whose changes are included in other comprehensive income:
- The business model aims at collecting contract cash flow and selling the financial assets;
- The contractual cash flow is only the payment of principal and interest based on the outstanding principal amount.
For non-trading investments in equity instruments, the Company may irrevocably designate, at the time of initial
recognition, them as financial assets at fair value through other comprehensive income (equity instruments). The
designation is made on a single investment basis, and the relevant investment meets the definition of equity instrument
from the issuer's perspective.
Except for the above-mentioned financial assets measured at amortized cost and at fair value and whose changes are
included in other comprehensive income, the Company classifies all other financial assets as financial assets measured at
fair value and whose changes are included in the current profit and loss. At the time of initial recognition, the Company
may irrevocably designate financial assets that should have been classified as amortized cost or measured at fair value
and whose changes are included in other comprehensive income as financial assets measured at fair value and whose
changes are included in the current profit and loss, provided that the accounting mismatches can be eliminated or
significantly reduced.
The financial liabilities, when initially recognized, are classified as: financial liabilities at fair value through profit or loss and
financial liabilities at amortized cost.
Financial liabilities which meet one of the following conditions will be, when initially measured, designated as financial
liabilities at fair value through profit or loss:
management and performance evaluation on the basis of fair value according to the enterprise risk management or
investment strategy contained in the formal documentations, and a report shall be made to the key management
personnel within the enterprise on this basis.
Subject to the conditions above, the Company has no such designated financial liabilities.
(2) The basis for recognition of and the method for measurement of financial instruments
① Financial assets at amortized cost
Financial assets at amortized cost include notes receivable, accounts receivable, other receivables, long-term receivables
and creditors investment, which shall be initially measured at fair value, and the relevant transaction expenses should be
initially capitalized; The accounts receivable that do not contain material financing compositions and those for which the
Company decides to not take into account the financing compositions of no more than one year shall be initially measured
at the contract transaction price.
The interest calculated by effective interest method during the holding period is recorded into the current profit and loss.
At the time of recovery or disposal, the difference between the price obtained and the book value shall be included in the
current profit or loss.
② Financial assets measured at fair value and its changes are included in other comprehensive income (debt
instruments)
Financial assets measured at fair value and its changes are included in other comprehensive income (debt instruments)
include receivables financing and investments in other creditor's rights. They are initially measured at fair value, and the
relevant transaction expenses should be initially capitalized. These financial assets are subsequently measured at fair
value, and the change in fair value, other than the interest, the impairment loss or profit and the profit or loss on foreign
exchange, shall be included in other comprehensive income.
Upon derecognition, the cumulative profits or losses previously included in other comprehensive income shall be removed
from other comprehensive income and included in the profit or loss for the period.
③ Financial assets measured at fair value and those change are included in other comprehensive income (equity
instruments)
Financial assets at fair value through other comprehensive income (equity instruments) include investment in other equity
instruments. They are initially measured at fair value, and the transaction expenses shall be initially capitalized. These
financial assets are subsequently measured at fair value, and the change in fair value shall be included in other
comprehensive income. The dividends obtained shall be included in the profit or loss for the period.
Upon derecognition, the cumulative profits or losses previously included in other comprehensive income shall be removed
from other comprehensive income and included in the carry-forward retained earnings.
④ Financial assets measured at fair value and those change are included in profit or loss in the current period
Financial assets at fair value through profit or loss include trading financial assets, derivative financial assets and other
non-current financial assets. They are initially measured at fair value, and the transaction expenses related to them are
included in the profit or loss for the period. These financial assets are subsequently measured at fair value, and the
change in fair value shall be included in the profit or loss for the period.
⑤ Financial liabilities measured in fair Value with changes recorded into current profit and loss
Financial liabilities at fair value through profit or loss include trading financial liabilities and derivative financial liabilities.
They are initially measured at fair value, and the transaction expenses related to them are included in the profit or loss for
the period. These financial liabilities are subsequently measured at fair value, and the change in fair value shall be
included in the profit or loss for the period.
Upon derecognition, the difference between their book value and the consideration paid is included in the profit or loss for
the period.
⑥ Financial liabilities at amortized cost
Financial liabilities at amortized cost include short-term loans, notes payable, accounts payable, other payables, long-term
loans, bonds payable, and long-term payables. They are initially measured at fair value, and the transaction expenses
shall be initially capitalized.
The interest calculated by effective interest method during the holding period is recorded into the current profit and loss.
Upon derecognition the difference between the consideration paid and the book value of these financial liabilities is
included in the current profit or loss.
(3) Derecognition of financial assets and transfer of financial assets
When one of the following conditions is met, the Company will derecognize the financial assets:
- The contractual right to receive cash flows from financial assets has been terminated;
- The financial assets have been transferred, and almost all risks and rewards in the ownership of financial assets have
been transferred to the transferee;
- The financial assets have been transferred, and the Company has not retained control over financial assets although it
has neither transferred nor retained almost all risks and rewards in the ownership of financial assets.
When a financial asset is transferred, the financial asset shall not be derecognized if almost all risks and rewards on the
ownership of the financial asset are retained.
The substance-over-form principle shall be adopted while making judgment on whether the transfer of financial assets
satisfies the above conditions for termination of recognition.
The transfer of financial assets can be classified into entire transfer and partial transfer. If the transfer of an entire financial
asset satisfies the conditions for termination of recognition, the difference between the two amounts below shall be
recorded into profit or loss for the period:
① The book value of the financial asset transferred;
② The consideration received as a result of the transfer, plus the accumulative amount of the change in fair value
previously recorded into the owners' equities (in cases where the transferred financial assets are financial assets (debt
instruments) measured at fair value and whose changes are included in other comprehensive income)
If the partial transfer of financial assets satisfies the conditions for termination of recognition, the overall book value of the
transferred financial asset shall be apportioned according to their respective relative fair value between the recognition
terminated part and the remaining part, and the difference between the two amounts below shall be recorded into profit or
loss for the current period:
① The book value of the recognition terminated portion;
② The sum of consideration of the recognition terminated portion and the corresponding portion of accumulated change
in fair value previously recorded into owners' equity (in cases where the transferred financial assets are financial assets
measured at fair value and whose changes are included in other comprehensive income (debt instruments)).
Financial assets will still be recognized if they fail to satisfy the conditions for termination of recognition, with the
consideration received recognized as a financial liability.
(4) Derecognition of financial liabilities
When the current obligation under a financial liability is completely or partially discharged, the recognition of the whole or
relevant portion of the liability is terminated; an agreement is entered between the Company and a creditor to replace the
original financial liabilities with new financial liabilities with substantially different terms, terminate the recognition of the
original financial liabilities as well as recognize the new financial liabilities.
If all or part of the contract terms of the original financial liabilities are substantially amended, the recognition of the original
financial liabilities will be terminated in full or in part, and the financial liabilities whose terms have been amended shall be
recognized as a new financial liability.
When recognition of financial liabilities is terminated in full or in part, the difference between the book value of the financial
liabilities terminated and the consideration paid (including transferred non-cash assets or new financial liability) is
recognized in profit or loss for the current period.
Where the Company repurchases part of its financial liabilities, the book value of such financial liabilities will be allocated
according to the relative fair value between the continued recognized part and terminated part on the repurchase date.
The difference between the book value of the financial liabilities terminated and the consideration paid (including
transferred non-cash assets or new financial liability) is recognized in profit or loss for the current period.
(5) Method for determining the fair values of financial assets and liabilities
The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active
market. The fair value of a financial instrument that is not traded in an active market is determined by using a valuation
technique. The Company uses the valuation technique when it is applicable under current conditions and there are
enough available data and other information to support and the technique should maximize the use of relevant observable.
It chooses the inputs which are consistent with the asset or liability's characteristics considered by market participants in
the transaction of the relevant asset or liability and makes the maximum use of relevant observable inputs. Unobservable
inputs are used under the circumstance that the relevant observable inputs cannot be obtained or not feasible.
(6) Test method and accounting treatment for impairment of financial assets
The Company estimates the expected credit loss on the financial assets at amortized cost and the financial assets at fair
value and whose changes are included other comprehensive income (debt instruments), either alone or in combination.
In consideration of reasonable and well-founded information about past events, current situation and forecast of future
economic situation, the Company calculates the probability weighted amount of the present value of the difference
between the cash flow receivable and the cash flow expected to be received under the Contract with the risk of default as
weight factors, and confirms the expected credit loss.
If the credit risk of this financial instrument has been significantly increased upon initial recognition, the Company shall
measure its loss provision in accordance with the amount equivalent to the expected credit loss of the financial instrument
throughout the duration. If the credit risk of this financial instrument is not significantly increased upon initial recognition,
the Company shall measure the loss provision of this financial instrument by the amount of its expected credit loss in the
profit or loss as the impairment loss or profit.
By comparing the default risk of financial instruments on the balance sheet date with the default risk on the initial
recognition date, the Company may determine the relative change of default risk during the expected duration of financial
instruments to assess whether the credit risk of financial instruments has increased significantly since the initial
recognition. If the financial instrument becomes overdue for more than 30 days, the Company will consider that the credit
risk of this financial instrument has been significantly increased, unless there are concrete evidences indicating that the
credit risk of this financial instrument has not been significantly increased upon initial recognition.
If the financial instrument carries low credit risk at the balance sheet date, the Company believes that the credit risk of this
financial instrument is not significantly increased upon initial recognition.
If there are objective evidences showing that a certain financial asset has been subject to credit impairment, the Company
will accrue impairment provision for this financial asset on the individual asset basis.
For accounts receivable and contract assets arising from transactions regulated by Accounting Standards for Business
Enterprises No. 14 - Revenue (2017), the Company always measures its loss provision at an amount equivalent to the
expected credit loss throughout the duration, regardless of whether it contains significant financing components.
The Company will always measure the loss provision for lease receivables by the amount of the expected credit loss
throughout the duration.
Where the Company no longer reasonably expects the contractual cash flow of financial assets to be fully or partially
recovered, the book balance of the financial assets shall be directly written down.
Refer to the financial report under this section - (V) Significant Accounting Polices and Accounting Estimates - 10.
Financial Instruments.
Refer to the financial report under this section - (V) Significant Accounting Polices and Accounting Estimates - 10.
Financial Instruments.
Refer to the financial report under this section - (V) Significant Accounting Polices and Accounting Estimates - 10.
Financial Instruments.
Determination method and accounting treatment for the expected credit loss of other receivables
Refer to the financial report under this section - (V) Significant Accounting Polices and Accounting Estimates - 10.
Financial Instruments.
(1) Category of inventory
Inventories are classified as raw materials, turnover materials, commodity stocks, products in progress and materials
commissioned for processing.
Inventories are initially measured at cost, which includes purchasing costs, processing costs and other expenses incurred
to bring inventories to their present location and condition.
(2) Pricing method for issuing inventories
Cost of inventories is determined using the weighted average method.
(3) Basis for the determination of net realizable value of different types of inventories
On the balance sheet date, inventories shall be measured at the lower of cost and net realizable value. Where the cost of
inventories is higher than its net realizable value, provision for inventory depreciation shall be made. The net realizable
value refers to the estimated selling price of inventory in daily activities minus the estimated cost of completion, the
estimated selling expenses and related taxes and fees.
Net realizable value of held-for-sale commodity stocks, such as finished goods, goods-in-stock, and held-for-sale raw
materials, during the normal course of production and operation, shall be determined by their estimated sales less the
related selling expenses and taxes; the net realizable value of material inventories, which need to be processed, during
the normal course of production and operation, shall be determined by the amount after deducting the estimated cost of
completion, estimated selling expenses and relevant taxes from the estimated selling price of finished goods; the net
realizable value of inventories held for execution of sales contracts or labor contracts shall be calculated on the ground of
the contracted price. If an enterprise holds more inventories than the quantity stipulated in the sales contract, the net
realizable value of the exceeding part shall be calculated on the ground of general selling price.
After the provision for inventory depreciation has been made, if the factors affecting the previous write-down of the
inventory value have disappeared, resulting in the net realizable value of inventory being higher than its book value, it
shall be reversed within the original provision for inventory depreciation, and the reversed amount shall be included in the
current profit and loss.
(4) Inventory system
The perpetual inventory system is adopted.
(5) Amortization of low-value consumables and packaging materials
① Low-value consumables are amortized using the immediate write-off method;
② Packaging materials are amortized using the immediate write-off method.
(1) Methods and standards for recognition of contract assets
The Company lists contract assets or contract liabilities in the balance sheet based on the relationship between
performance obligations and customer payments. The Company’s right to receive consideration for the goods transferred
or services provided to customers (and such right depends on factors other than the passage of time) is listed as a
contract asset. Contract assets and contract liabilities under the same contract are presented on a net basis. The
Company's right to receive consideration from customers unconditionally (depending only on the passage of time) is listed
separately as account receivable.
(2) Determination method and accounting treatment for the expected credit loss of contract assets
For the determination method and accounting treatment of the expected credit loss of contract assets, please refer to the
financial report under this section - (V) Significant Accounting Polices and Accounting Estimates - 10. Financial
Instruments.
Contract costs include the cost of fulfilling a contract and the cost for obtaining the contract.
The costs incurred by the Company for contract performance, which do not fall within the scope of relevant standards
such as inventories, fixed assets or intangible assets, shall be recognized as an asset as the costs for contract
performance when the following conditions are met:
•Such costs are directly related to a current contract or a contract expected to be obtained.
•Such costs increase the resources of the Company for fulfilling its obligations in the future.
•Such costs are expected to be recovered.
Where the incremental cost incurred by the Company for obtaining the contract is expected to be recovered, it shall be
recognized as an asset as the costs for obtaining the contract.
Assets related to contract costs are amortized on the same basis as income from goods or services related to the assets.
However, if the amortization period of the costs for obtaining the contract does not exceed one year, the Company will
include it in the current profit and loss when incurred.
Where the book value of an asset related to the contract costs is higher than the difference between the following two
items, the Company shall make provision for impairment of the excess and recognize it as an asset impairment loss:
(1) The remaining consideration expected to be obtained due to the transfer of goods or services related to such asset;
(2) The estimated cost to be incurred for the transfer of the relevant goods or services.
If the factors of impairment in the previous period change subsequently, making the aforesaid difference higher than the
book value of the said asset, the Company shall reverse the impairment reserve originally accrued and include it in the
current profit and loss, but the book value of the asset after reversal does not exceed that on the reversal date assuming
that no impairment reserve is accrued.
If the book value is recovered mainly through sale (including exchange of non-monetary assets with commercial
substance) instead of continuous use of a non-current asset or disposal group, it shall be classified as held for sale.
A non-current asset or disposed group is classified by the Company as holding for sale if it meets the following criteria at
the same time:
(1) Immediate sale could be made under the current circumstances in accordance with the practice of selling such assets
or disposal groups in similar transactions;
(2) Selling is extremely likely to occur, i.e., the Company has made a resolution on a selling plan and obtained confirmed
purchase commitments, and the selling is predicted to be completed within 1 year. If required by relevant provisions that
selling shall only be made after approved by the relevant competent authority or supervision department of the Company,
such approval should have been obtained.
Where the book value of non-current assets (excluding financial assets, deferred income tax assets and assets formed by
staff remuneration) or disposal groups classified as held for sale is higher than the net amount after fair value less
disposal expenses, the book value is written down to the net amount after fair value less disposal expenses, and the
written down amount shall be recognized as an asset impairment loss and included in the current profit and loss, while
provision for impairment of assets held for sale is made.
(1) Criteria for judgment of joint control or significant influence
Joint control is the contractually agreed sharing of control of an arrangement, and exists only when requiring the
unanimous consent of the parties sharing control before making decisions about the relevant activities of the arrangement.
The Company together with the other joint venture parties can jointly control over the investee and are entitled to the right
of the net assets of the investee, as the investee is joint venture of the Company.
Significant influence refers to the power to participate in making decisions on the financial and operating policies of an
enterprise, but not the power to control, or jointly control, the formulation of such policies with other parties. Where the
Company can exercise significant influence over the investee, the investee is an associate of the Company.
(2) Determination of initial investment cost
① Long-term equity investments formed through business consolidation
For the long-term equity investment in subsidiaries formed by business consolidation under common control: the initial
investment cost of long-term equity investments is the share with reference to the book value of the shareholders' equity
of the consolidated party in the consolidated financial statements of the ultimate controlling party on the consolidation date.
For the difference between the initial investment cost of long-term equity investment and the book value of payment
consideration, the equity premium in capital reserve shall be adjusted. When the equity premium in capital reserve is
insufficient to offset, the retained earnings shall be adjusted. If the investee under common control can be controlled due
to additional investment and other reasons, the equity premium shall be adjusted based on the difference between the
initial investment cost of the long-term equity investment recognized according to the above principles and the sum of the
book value of the long-term equity investment prior to the consolidation plus the book value of the newly paid
consideration for the shares obtained on the consolidation date. If the equity premium is insufficient to offset, the retained
earnings shall be offset.
For the long-term equity investment in subsidiaries formed by business consolidation under common control, the cost of
the consolidation ascertained on the acquisition date shall be taken as the initial investment cost of the long-term equity
investments. In connection with imposing control over the investee not under common control due to additional investment
and other reasons, the initial investment cost shall be the sum of the book value of the equity investment originally held
and the newly increased initial investment cost.
② Long-term equity investments acquired by other means other than business combination
The initial cost of a long-term equity investment obtained by cash payment shall be the purchase costs actually paid.
The initial cost of investment of a long-term equity investment obtained by means of issuance of equity securities shall be
the fair value of the equity securities issued.
(3) Subsequent measurement and recognition of profit and loss
① Long-term equity investment calculated by cost method
Long-term equity investment in subsidiaries of the Company is calculated by cost method, provided that the investment
meets the criteria for held-for-sale. except for the actual consideration paid for the acquisition of investment or the
declared but not yet distributed cash dividends or profits which are included in the consideration, investment gains are
recognized as the Company' shares of the cash dividends or profits declared by the investee.
② Long-term equity investment calculated by equity method
Long-term equity investments of associates and jointly controlled entities are calculated using equity method. Where the
initial investment cost of a long-term equity investment exceeds the investor's interest in the fair value of the investee's
identifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost. Where the initial
investment cost is less than the investor's interest in the fair value of the investee's identifiable net assets at the
acquisition date, the difference shall be included to the current profit and loss, and at the same time, the cost of long-term
equity investment is adjusted.
The Company shall recognize the investment income and other comprehensive income respectively based on the shares
of net profit and loss and other comprehensive income realized by the investee which it shall be entitled or shared, and at
the same time makes adjustment to the book value of long-term equity investments. The book value of long-term equity
investment shall be reduced by attributable share of the profit or cash dividends for distribution declared by the investee.
In relation to other changes of the owner's equity except for the investee’s net profit and loss, other comprehensive
income and profit distributions (“other changes in the owner’s equity”), the book value of long-term equity investments
shall be adjusted and included in the owner's equity.
When determining the investee’s net profit and loss, other comprehensive income and share of changes in the owner's
equity, fair value of each identifiable assets of the investee at the time when the investment is obtained shall be used as
basis, and the investee’s net profit and other comprehensive income shall be recognized after adjustment according to the
accounting policies and accounting period of the Company.
The unrealized profit and loss resulting from transactions between the Company and its affiliates or joint ventures shall be
eliminated in portion to the investor's equity interest of investee, based on which investment income or loss shall be
recognized, provided that the assets invested or sold constitute a business. Any losses resulting from transactions, which
are attributable to impairment of assets, shall be fully recognized.
The Company shall be obligated to bear additional losses incurred by net loss of joint ventures or affiliates. In addition, the
book value of long-term equity investment and other long-term interests that substantially constitute the net investment in
the joint ventures or affiliates shall be written down to zero. When the joint ventures or affiliates realize the net profit in the
future, the Company shall resume the recognition of the income share after the income share makes up for the
unrecognized loss share.
③ Disposal of long-term equity investments
For disposal of long-term equity investment, the difference between the book value and the consideration actually
received shall be included in the current profit or loss.
If the long-term equity investment calculated by equity method is partially disposed of, and the remaining equity is still
calculated by equity method, other comprehensive income recognized by the original equity method shall be carried
forward based on the corresponding proportion on the same basis as the investee directly disposes of relevant assets or
liabilities, and other changes in the owner's equity shall be transferred into the current profit and loss on a pro rata basis.
Where the joint control of or significant impacts on the investee is lost due to the disposal of equity investment, other
comprehensive income recognized by the original equity investment due to the adoption of the equity method shall be
calculated in the same way as the investee's direct disposal of related assets or liabilities at the termination of the equity
method, and all other changes in the owner's equity shall be transferred to the current profit and loss at the termination of
the equity method.
If the control right of the investee is lost due to the disposal of some equity investments and other reasons, and if the
remaining equity can exert joint control or significant influence on the investee when individual financial statements are
prepared, it shall be calculated based on the equity method instead, and the remaining equity shall be regarded as being
calculated and adjusted by the equity method immediately upon acquisition. Other comprehensive income recognized
before obtaining the control right of the investee shall be carried forward proportionally on the same basis as the direct
disposal of related assets or liabilities by the investee, and other changes in the owner's equity confirmed by the equity
method shall be transferred into the current profit and loss in proportion. If the remaining equity cannot exercise joint
control or exert significant impacts on the investee, it is recognized as a financial asset, and the difference between its fair
value and book value on the date of loss of control is included in the current profit and loss, and all other comprehensive
income and other changes in the owner's equity recognized before obtaining the control right of the investee are carried
forward.
If the equity investment of a subsidiary is disposed of step by step through multiple transactions until the control right is
lost, which belongs to a package transaction, accounting treatment shall be performed for each transaction as a
transaction that disposes of the equity investment of a subsidiary and loses the control right. The difference between the
disposal price before the loss of control right and the book value of the long-term equity investment corresponding to the
disposed equity is first recognized as other comprehensive income in individual financial statements, and then included in
the current profit and loss of the loss of control right when the control right is lost. If it is not a “package deal”, accounting
treatment shall be made for each transaction separately.
Investment property refers to the real estate held to generate rental income or capital appreciation, or both, including
leased land use rights, land use rights held for transfer after appreciation, and leased buildings (including buildings that
are leased after completion of self-construction or development activities and buildings in construction or development
that are used for rental in the future).
The Company adopts the cost mode to measure the existing investment property. Subsequent expenditures related to
investment real estate shall be included in the cost of investment real estate when the relevant economic benefits are
likely to flow in and its cost can be measured reliably. Otherwise, it shall be included in the current profit and loss when
incurred. Investment property measured at cost - buildings held for leasing shall adopt the same depreciation policy for
fixed assets of the company, land use rights held for leasing shall adopt the same amortization policy for the intangible
assets.
(1) Conditions for recognition of fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to others,
or for administrative purposes; and have a service life of more than one accounting year. Fixed asset is recognized when it
meets the following conditions: ① It is probable that the economic benefits associated with the fixed asset will flow to the
enterprise; ② Its cost can be reliably measured. Fixed assets shall be measured at cost (and considering the impact of
expected abandonment cost factors). Subsequent expenditures related to fixed assets shall be included in the cost of
fixed assets when the related economic benefits are likely to flow in and the cost can be measured reliably. The book
value of the replaced part shall be terminated. All other subsequent expenditures shall be included in the current profit and
loss when incurred.
(2) Methods for depreciation
Useful lives of Annual depreciation
Category Depreciation method Residual Ratio
depreciation rate
Housing and building Straight-line method 20 5% 4.75%
Machinery and
Straight-line method 5-10 5% 19.00%-9.50%
equipment
Means of transport Straight-line method 4-8 5% 23.75%-11.88%
Electronic and other
Straight-line method 3-5 5% 31.67%-19.00%
equipment
Fixed assets are depreciated by categories using the straight-line method, and the annual depreciation rates are
determined by categories based upon their estimated useful lives and their estimated residual values. Where the parts of
a fixed asset have different useful lives or cause economic benefits for the enterprise in different ways, different
depreciation rates or depreciation methods shall apply, and each part is depreciated separately.
(3) Disposal of fixed assets
When a fixed asset is disposed of, or no economic benefit is expected to be generated through the use or disposal, the
recognition of the fixed asset shall be terminated. The disposal income from the sale, transfer, scrapping or damage of
fixed assets after deducting their book value and relevant taxes is included in the current profit and loss.
Projects under construction are measured at the actual costs incurred. Actual costs include construction cost, installation
cost, borrowing costs eligible for capitalization, and other expenditures necessary to bring the project under construction
to its intended usable condition. When projects under construction reach the intended usable condition, they shall be
turned into fixed assets and shall be depreciated from the next month.
(1) Criteria for recognition of capitalized borrowing costs
For borrowing costs incurred by the Company that are directly attributable to the acquisition, construction or production of
assets qualified for capitalization, the costs will be capitalized and included in the costs of the related assets. Other
borrowing costs shall be recognized as expense in the period in which they are incurred and included in profit or loss for
the current period.
Assets qualified for capitalization are assets (fixed assets, investment property, inventories, etc.) that necessarily take a
substantial period of time for acquisition, construction or production to get ready for their intended use or sale.
(2) Capitalization period of borrowing costs
The capitalization period shall refer to the period between the commencement and the cessation of capitalization of
borrowing costs, excluding the period in which capitalization of borrowing costs is temporarily suspended.
Capitalization of borrowing costs begins when the following three conditions are fully satisfied:
① expenditures on assets (including cash paid, transferred non-currency assets or expenditure for holding debt liability
for the acquisition, construction or production of assets qualified for capitalization) have been incurred;
② borrowing costs have been incurred;
③ acquisition, construction or production that are necessary to enable the asset reach its intended usable or salable
condition have commenced.
Capitalization of borrowing costs shall be suspended during periods in which the qualifying asset under acquisition and
construction or production ready for the intended use or sale.
(3) Suspension of capitalization period
Capitalization of borrowing costs shall be suspended if the abnormal interruption occurs in the acquisition, construction or
production process of the assets eligible for capitalization, and such interruption lasts for 3 consecutive months or above.
If the interruption is a necessary step for making the eligible asset under acquisition and construction or production ready
for the intended use or sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred during
such period shall be recognized as profits and losses of the current period. When the acquisition and construction or
production of the asset resumes, the capitalization of borrowing costs commences.
(4) Calculation of capitalization rate and amount of borrowing costs
Specific borrowings for the acquisition, construction or production of assets qualified for capitalization, borrowing costs of
the specific borrowings actually incurred in the current period minus the interest income earned on the unused borrowing
loans as a deposit in the bank or as investment income earned from temporary investment will be used to determine the
amount of borrowing costs for capitalization.
General borrowings for the acquisition, construction or production of assets qualified for capitalization, the
to-be-capitalized amount of interests on the general borrowing shall be calculated and determined by multiplying the
weighted average asset disbursement of the part of the accumulative asset disbursements minus the specifically
borrowed loans by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated and
determined according to the weighted average interest rate of the general borrowing.
During the capitalization period, the exchange difference of the principal and interest of the special foreign currency loan
shall be capitalized and included in the cost of the assets eligible for capitalization. The exchange difference of principal
and interest of foreign currency borrowings except for special foreign currency borrowings shall be included in the current
profit and loss.
(1) Valuation method, service life, impairment test
(1) Valuation method of intangible assets
① Intangible assets are initially measured at cost upon acquisition
The costs of an externally purchased intangible asset include the purchase price, relevant taxes and expenses paid,
and other expenditures directly attributable to putting the asset into condition for its intended use.
② Subsequent measurement
The service life of intangible assets shall be analyzed and judged upon acquisition.
As for intangible assets with a finite service life, they are amortized using the straight-line method over the term in
which economic benefits are brought to the firm; If the term in which economic benefits are brought to the firm by an
intangible asset cannot be estimated, the intangible asset shall be taken as an intangible asset with indefinite service life,
and shall not be amortized.
(2) Estimated useful lives for the intangible assets with limited-service life
Item Estimated useful lives Basis
Land use rights 40 or 50 years Land use certificate
Non-patented technology 5-10 years Expected benefited period
Softwares 2-5 years Expected benefited period
Trademark rights 6 years Expected benefited period
Software copyright 10 years Expected benefited period
For an intangible asset with a finite service life, review on its service life and amortization method is performed at the
end of each end.
Upon review, service life and amortization method for the intangible assets are the same with the previous estimate
at the end of this period.
(3) The basis for judgment of intangible assets with uncertain service life and the procedure for reviewing
their service life
As at the balance sheet date, the Company has no intangible assets with uncertain service life.
(4) Specific criteria for the division of research phase and development phase
The expenses for internal research and development projects of the Company are divided into expenses in the
research phase and expenses in the development phase.
Research phase: Scheduled innovative investigations and research activities to obtain and understand scientific or
technological knowledge.
Development phase: Apply the research outcomes or other knowledge to a plan or design prior to a commercial
production or use in order to produce new or essentially-improved materials, devices, products, etc.
(5) Specific condition for capitalizing expenditure during the development phase
Expenditures in the research phase are recorded into the current profit and loss when incurred. Expenditure at the
development phase shall be recognized as intangible assets if it meeting the following conditions at the same time;
expenditure in the development phase shall be included in the current profit and loss if it fails to meet the following
conditions:
①It is technically feasible to complete such intangible asset so that it will be available for use or for sale;
②There is intention to complete the intangible asset for use or sale;
③The intangible asset can produce economic benefits, including there is evidence that the products produced using
the intangible asset has a market or the intangible asset itself has a market; if the intangible asset is for internal use, there
is evidence that there exists usage for the intangible asset;
④There is sufficient support in terms of technology, financial resources and other resources in order to complete the
development of the intangible asset, and there is capability to use or sell the intangible asset;
⑤The expenses attributable to the development stage of the intangible asset can be measured reliably.
If it is impossible to distinguish the expenditure at the research phase from the expenditure at the development
phase, all the R&D expenditure incurred shall be booked into the current profit and loss.
Long-term assets, such as long-term equity investment, investment properties, fixed assets, construction in progress,
intangible assets, oil and gas assets and other long-term assets that measured at cost are tested for impairment if there is
any indication that an asset may be impaired at the balance sheet date. If the result of the impairment test indicates that
the recoverable amount of the asset is less than its book value, a provision for impairment and an impairment loss are
recognized for the amount by which the asset's book value exceeds its recoverable amount. The recoverable amount is
the higher of an asset's fair value less costs to sell and the present value of the future cash flows expected to be derived
from the asset. Provision for asset impairment is determined and recognized on the individual asset basis. If it is not
possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which
the asset belongs to is determined. A group of assets is the smallest group of assets that is able to generate cash inflows
independently.
For the goodwill arising from business consolidation and intangible assets with uncertain service life, and intangible assets
that have not reached the usable condition, impairment test shall be conducted at the end of every year, regardless of
whether there are signs of impairment or not.
When the Company carry out impairment test to goodwill, the Company shall, as of the purchasing day, allocate on a
reasonable basis the book value of the goodwill formed by merger of enterprises to the relevant asset groups, or if there is
a difficulty in allocation, to allocate it to the sets of asset groups. Related asset groups or asset group combinations are the
asset groups or asset group combinations that can benefit from the synergistic effect of the business consolidation.
For the purpose of impairment test on the relevant asset groups or the sets of asset groups containing goodwill, if any
evidence shows that the impairment of asset groups or sets of asset groups related to goodwill is possible, an impairment
test will be made first on the asset groups or sets of asset groups not containing goodwill, thus calculating the recoverable
amount and comparing it with the relevant book value so as to recognize the corresponding impairment loss. Then, an
impairment test shall be conducted for the asset group or combination of asset groups containing goodwill, and the book
value is compared with the recoverable amount. If the recoverable amount is lower than the book value, the amount of
impairment loss shall first be offset against the book value of goodwill allocated to the asset group or combination of asset
groups. Next, based on the proportion of the book value of the assets except for goodwill in the asset group or portfolio of
the asset group, the book value of other assets shall be deducted proportionally. Once the above asset impairment loss is
recognized, it will not be reversed in the subsequent accounting periods.
Long-term deferred expenses are the expenses that have occurred but should be amortized in the current period and
subsequent periods with amortization period longer than 1 year, mainly including improvement expenditure of fixed assets
leased. Long-term deferred expenses shall be evenly amortized by installments over the expected benefit period.
The Company lists contract assets or contract liabilities in the balance sheet based on the relationship between
performance obligations and customer payments. The Company lists the obligation to transfer commodities or offer
services to customers for the consideration received or receivable from customers as contract liabilities. Contract assets
and contract liabilities under the same contract are presented on a net basis.
(1) Accountant Treatment of Short-term Remuneration
During the accounting period when the staff provides service, the Company will recognize the short-term remuneration
actually incurred as liabilities, and the liabilities would be charged into current profits and loss or costs of assets.
The Company will pay social insurance and housing funds, and will make provision of trade union funds and staff
education costs in accordance with the requirements. During the accounting period when the staff provides service, the
Company will determine the relevant amount of employee benefits in accordance with the required provision basis and
provision ratios.
The welfare expense of staff incurred in the Company shall be included in the current profits and losses at the actual
amounts incurred, in which non-monetary welfare expense shall be measured at fair value.
(2) Accountant Treatment of Retirement Benefit Plan
①Defined contribution scheme
The Company will pay basic pension insurance and unemployment insurance in accordance with the relevant provisions
of the local government for the staff. During the accounting period when the staff provides service, the Company will
calculate the amount payable in accordance with the local stipulated basis and proportions which will be recognized as
liabilities, and the liabilities would be charged into current profits and loss or costs of assets. Additionally, the Company
has also joined in the enterprise annuity plan/supplementary pension insurance fund approved by the related national
department. The Company conducts payment/payment of annuity plan to local social insurance institutions according to
certain proportion of employees' wages and corresponding expenditures are included in current profits and losses or
relevant asset costs.
②Defined benefit scheme
The welfare responsibilities generated from defined benefit scheme based on the formula determined by projected unit
credit method would be vested to the service period of the staff and charged into current profits and loss or costs of
assets.
(3) Accountant Treatment of Termination Benefits
For the dismissal welfare provided to employees, the employee compensation liabilities arising from the dismissal welfare
shall be determined at the earliest of the following two, and included in the current profits and losses: When the
Company cannot unilaterally withdraw the dismissal welfare provided due to the termination of labor relations plan or
layoff proposal; When the Company determines the costs or expenses associated with the restructuring involving the
payment of dismissal welfare.
The Company shall recognize the obligations related to contingencies as estimated liabilities, when all of the following
conditions are met:
(1) The obligations are current obligations undertaken by the Company.
(2) The performance of such obligation may cause the outflow of economic benefits from the Company.
(3) The amount of the obligation can be measured reliably.
Estimated liabilities shall be initially measured at the best estimate of the expenditure required to settle the related present
obligation.
Factors pertaining to a contingency such as risk, uncertainties, and time value of money shall be taken into account as a
whole in reaching the best estimate. Where the effect of the time value of money is material, the best estimate shall be
determined by discounting the related future cash outflow.
The expenses required have a successive range, in which the possibilities of occurrence of all results are the same, and
the best estimate shall be determined according to the middle value within the range. In other cases, the best estimate
shall be determined by the following conditions:
•Where the contingency involves a single item, the amount most likely to occur.
•Where the contingency involves multiple items, is shall be determined in accordance with various possible outcomes and
related probability.
Where some or all of the expenditure required to settle an estimated liability is expected to be reimbursed by a third party,
the reimbursement is separately recognized as an asset when it is virtually certain that the reimbursement will be received.
The amount recognized for the reimbursement is limited to the book value of the estimated liability.
On the balance sheet date, the Company reviewed the book value of the estimated liability. If there is conclusive evidence
indicating that the book value cannot reflect the current best estimate, the book value should be adjusted according to the
current best estimate.
The Company's share-based payment refers to a transaction in which an enterprise determines the liabilities on the basis
of equity instruments granting or bearing for the acquisition of service from its employees or other parties. The Company's
share-based payment is equity-settled.
Equity-settled share-based payment and equity instrument:
As to an equity-settled share-based payment in return for services of employees, calculation will be based on the fair
value of the equity instrument granted to the employees. Share-based payment vested immediately after grant shall be
included in the relevant cost or expense at the fair value of equity instrument on the date of grant, and the capital reserve
will be increased accordingly. For share-based payment vested when the services in the waiting period are offered or the
specified performance requirements are satisfied after the date of grant, the service obtained in the current period is
included in the relevant cost or expense on each balance sheet date during the waiting period based on the best estimate
of the number of vesting equity instruments and the fair value on the date of grant, and the capital reserve will be
increased accordingly.
If the terms of the equity-settled share-based payment are amended, the Company shall recognize the services received
at least based on the situation before the amendment was made. In addition, any amendment resulting in the increase of
the fair value of the equity instrument granted or changes that are beneficial to the staff on the amendment date, will be
recognized as an increase in the service received.
If the equity instrument granted is cancelled during the waiting period, it will be accounted for as accelerated exercise and
the amount recognizable in the remaining waiting period should be immediately included in the current profits and losses.
The capital reserve should also be recognized. However, if new equity instruments are vested and they are verified at the
vesting date of new equity instrument as alternatives vested to canceled equity instruments, the treatment on the new
equity instrument is in conformity with the modified treatment on disposal of equity instrument.
Accounting policies for revenue recognition and measurement
The Company shall recognize the revenue when it has performed its obligations hereunder (i.e., when the customer
obtains control over relevant goods or services). Acquiring the right of control over relevant commodities or services
means leading use of such commodities or services and obtaining almost all economic benefits from such commodities or
services.
If the contract contains two or more performance obligations, the Company shall apportion the transaction price to each
individual performance obligation on the contract commencement date according to the relative proportion of the
individual selling price of the commodities or services promised by each individual performance obligation. The Company
measures the revenue according to the transaction price apportioned to each individual performance obligation.
The transaction price refers to the amount of consideration that the Company is expected to be entitled to collect due to
the transfer of commodities or services to customers, excluding the payments collected on behalf of third parties and the
payments expected to be returned to customers. The Company determines the transaction price according to the contract
terms and in combination with old practices. When the transaction price is determined, factors such as variable
consideration, major financing components in the contract, non-cash consideration, consideration payable to a customer
shall be taken into account. The Company determines the transaction price, including variable consideration, according to
the amount by which the accumulative recognized revenue is much more unlikely to be significantly reversed when
relevant uncertainties are eliminated. If there are major financing components in the contract, the Company shall
determine the transaction price according to the amount payable in cash when the customer acquires the right of control
over the commodities or services, and amortize the difference between the transaction price and the contract
consideration by effective interest method during the contract period.
When one of the following conditions is met, it shall be deemed to perform obligation within a certain period of time,
otherwise it belongs to the performance of obligation at a certain point of time:
• The customer acquires and consumes the economic benefits arising from the Company's performance while performing
the contract.
• The customer can control the commodities in production during the Company's performance.
• The commodities produced by the Company during the performance are irreplaceable, and the company has the right to
collect payment for the accumulated performance to date during the whole contract period.
For the performance obligations performed within a certain period of time, the Company shall recognize the revenue
according to the performance progress within that period of time, except that the performance progress cannot be
reasonably recognized. In consideration of the nature of commodities or services, the Company determines the
performance progress by output method or input method. If the performance progress cannot be reasonably recognized
and the costs incurred are expected to be compensated, the Company will recognize the revenue according to the amount
of costs incurred until the performance progress can be reasonably recognized.
For the performance obligations performed at a certain point of time, the Company will recognize the revenue when the
customer acquires the right of control over relevant commodities or services. While determining whether the customer has
acquired the right of control over the commodities, the Company shall take the followings into consideration:
• The Company has the current right to collect payment for the commodity or service, that is, the customer is obligated to
pay for the commodity or service.
• The Company has transferred the legal ownership of the commodity to the customer, that is, the customer already has
the legal ownership of the commodity.
• The Company has transferred the physical commodity to the customer, that is, the customer has possessed the physical
commodity.
• The Company has transferred the major risks and rewards of the commodity ownership to the customer, that is, the
customer has acquired the major risks and rewards of the commodity ownership.
• The customer has accepted the commodity or service.
The difference in accounting policies for revenue recognition caused by same business in different business models
N/A
(1) Type
Government grants are monetary assets and non-monetary assets acquired by the Company from the government free of
charge. Government grants are classified into government grants related to assets and government grants related to
revenue.
Government grants related to assets refer to government grants acquired by the Company for the purpose of purchasing
or constructing or otherwise forming long-term assets. Government grants related to revenue refer to the government
grants other than those related to assets.
(2) Confirmation of Time Point
Government grants related to assets will be measured at the actual amount of money received at the time of receipt. The
assets (bank deposits) and deferred income shall be period by period included in the profits and losses of the current
period in a reasonable and systematic manner from the time the assets are available for use (those related to the
Company's daily activities shall be included in other income; those unrelated to the Company's daily activities shall be
recognized as non-operating income). When the relevant assets are disposed of (sold, transferred, scrapped, etc.) at or
before the end of their service life, the balance of the deferred income that has not yet been apportioned will be
transferred to the current-period income from the disposal of the assets on an one-time manner, and will not be deferred.
For government grants related to revenue, they will be recognized as profit and loss of the current period according to the
amount receivable for government grants obtained under fixed quota standards, otherwise, they will be recognized as
profit and loss of the current period when it is actually received.
(3) Accounting Treatment
Government grants related to assets shall write off the book value of relevant assets or be recognized as deferred income.
When recognized as deferred income, the government grant related to assets will be period by period credited to the
profits and losses of the current period in a reasonable and systematic manner within the service life of relevant assets
(those related to the Company's daily activities shall be recognized as other income; those unrelated to the Company's
daily activities shall be recognized as non-operating income).
The revenue-related government grants shall be recognized as deferred income if they are used to compensate relevant
expenses or losses in subsequent periods, and they shall be included in profit and loss of the current period (those related
to Company's routine activities shall be included in other income; those unrelated to the Company's routine activities shall
be included in non-operating income) or used to offset relevant expenses or losses during the recognition of related
expenses or losses; the grants used to compensate related expenses or losses incurred shall be included in profit and
loss of the current period (those related to Company's routine activities shall be included in other income; those unrelated
to the Company's routine activities shall be included in non-operating income) or used to offset relevant expenses or
losses.
The Company performs accounting treatment of policy-oriented concessional loan discount interest in the following cases:
①Where the finance allocates the discount interest funds to the lending bank, and the lending bank provides loans to the
Company at the policy preferential interest rate, the actually received loan amount shall be taken as the entry value of the
loan, and the relevant borrowing costs shall be calculated according to the loan principal and the policy preferential
interest rate.
②If the finance directly allocates the discount interest funds to the Company, the Company will offset the relevant
borrowing costs against the corresponding discount interest.
Income tax includes the current income tax and the deferred income tax. The Company includes the current income tax
and the deferred income tax into the current profits and losses, except for the income tax arising from business
combination and transactions or events directly included in the owner's equity (including other comprehensive income).
The deferred income tax assets and deferred income tax liabilities shall be calculated and recognized according to the
difference between the tax base of assets and liabilities and their book value.
Deferred income tax assets are recognized to the extent that it is probable that future taxable profits will be available
against which deductible temporary differences can be utilized. For deductible losses and tax credits that can be reversed
in the future period, deferred tax assets shall be recognized to the extent that it is probable that taxable profit will be
available in the future to offset the deductible losses and tax credits.
Save as the exceptions, deferred income tax liabilities shall be recognized for the taxable temporary difference.
The followings are special circumstances in which deferred income tax assets or deferred income tax liabilities are not
recognized:
• Initial recognition of goodwill.
• Transactions or events not involving business combination or not having influence on accounting profits and taxable
income upon occurrence of business combination (or deductible losses).
For the taxable temporary difference related to investment of subsidiaries, affiliates, and joint ventures, the deferred
income tax liabilities shall be recognized unless the reversal time of the temporary difference can be controlled and it is
unlikely to be reversed in the foreseeable future. For the deductible temporary difference related to investment of
subsidiaries, affiliates, and joint ventures, the deferred income tax assets shall be recognized if the temporary difference is
likely to be reversed in the foreseeable future and it is likely to obtain the taxable income to offset the deductible temporary
difference.
On the balance sheet date, the deferred income tax assets or deferred income tax liabilities are calculated at the
applicable tax rate during the expected recovery of the assets or settlement of the liabilities according to the tax law.
On the balance sheet date, the book value of deferred income tax assets shall be reviewed. If no sufficient taxable income
is likely to be obtained to offset the benefits of deferred income tax assets in the future, the book value of deferred incom e
tax assets shall be written down. The amount written down shall be reversed when it is likely to obtain sufficient taxable
income.
After granted the legal rights of net settlement and with the intention to use net settlement or obtain assets and repay debt
at the same time, the net amount after offsetting its current income tax assets and current income tax liabilities shall be
recorded.
On the balance sheet date, the deferred income tax assets and deferred income tax liabilities shall be presented by net
amount after offset if the following conditions are met at the same time:
• The taxpayer has the legal right to settle current income tax assets and current income tax liabilities on a net basis.
• The deferred income tax assets and the deferred income tax liabilities are related to income tax to be paid by the same
taxpayer to the same tax collection and management authority or related to different taxpayers, but the relevant taxpayer
is intended to apply net settlement of current income tax assets and liabilities or, at the same time, obtain assets, repay
debt whenever every deferred income tax asset and liability with importance would be reversed in the future.
Lease refers to the contract whereby a lessor transfers the right to use assets to a lessee in return for consideration within
a period of time.
On the commencement date of a contract, the Company shall assess whether the contract is a lease or includes a lease.
Where a party to a contract transfers the right to control the use of one or more identified assets for a certain period of time
in return for consideration, the contract is a lease or includes a lease.
Where a contract concurrently contains multiple separate leases, the lessee and lessor shall split the contract and
conduct accounting treatment respectively for all separate leases.
(1) The Lessee
①Right-of-use Assets
The Company recognizes the right-of-use assets for the lease other than short-term lease and low-value asset lease on
the lease inception date. The right-of-use assets are initially measured at cost, which includes: initial measurement
amount of lease liabilities; lease payment paid on or before the commencement of the lease term (if there are lease
incentives, the relevant amount of lease incentives enjoyed shall be deducted); initial direct costs incurred by the lessee;
the estimated cost to be incurred by the lessee for dismantling and removing the leased asset, restoring the site where the
leased asset is located or restoring the leased asset to the state agreed in the lease terms.
The Company depreciates the right-of-use assets according to the straight-line method. If it can be reasonably recognized
that the title of the leased asset is acquired at the expiration of the lease term, the Company shall accrue depreciation
within the remaining service life of the leased asset. If it cannot be reasonably recognized that the title of the leased asset
is acquired at the expiration of the lease term, the
leased assets shall be depreciated within the shorter of the lease term and the remaining service life of the leased asset.
②Lease Liabilities
On the lease inception date, the Company recognizes the lease liabilities for the lease other than short-term lease and
low-value asset lease. Lease liabilities shall be initially measured at the present value of the unpaid lease payment. Lease
payment includes: Where there are lease incentives in the fixed payment and substantial fixed payment, the amount
related to the lease incentives shall be deducted; the variable lease payment that depends on the index or ratio shall be
determined on the basis of the index or ratio on the lease inception date at the initial measurement; the exercise price of
the purchase option, provided that the Company reasonably determines that the option will be exercised; the funds to be
paid for the termination of the lease option, provided that the lease period reflects that the Company will terminate the
lease option; the funds expected to be paid on the basis of the guaranteed residual value provided by the Company. The
interest rate implicit in lease is applied as the discount rate. If the interest rate implicit in lease cannot be determined, the
Company's incremental borrowing rate shall be applied as the discount rate.
The Company shall calculate the interest expense of the lease liability during each period of the lease term at a fixed
periodic interest rate and include it into the current profits and losses or relevant asset costs. The variable lease payment
which is not included in the measurement of lease liabilities shall be included into the current profits and losses or relevant
asset costs when actually incurred.
After the lease inception date, the Company remeasures the lease liability according to the present value of the changed
lease payment in the following circumstances: Changes in the evaluation results of the call option, renewal option or lease
termination option, or inconsistency between actual exercise of the renewal option or lease termination option and the
original evaluation results; changes in the payable amount estimated according to guaranteed residual value; changes in
the index or ratio applied to determine the amount of lease payments. When remeasuring the lease liability, the Company
shall accordingly adjust the book value of right-of-use assets. If the book value of the right-of-use assets has been
reduced to zero, but the lease liability still needs to be further reduced, the remaining amount shall be included into the
current profits and losses.
③ Short-term Leases and Low-value Asset Leases
The Company does not recognize the right-of-use assets and lease liabilities for the short-term leases and low-value
asset leases, and include the relevant lease payments into the current profits and losses or relevant asset costs according
to the straight-line method during each period of the lease term. Short-term leases refer to, on the lease inception date,
the leases with a lease term of no more than 12 months and excluding the call option. Low-value asset leases refer to
leases with low value when a single leased asset is brand-new. If the Company sublets or is expected to sublet the leased
assets, the original lease shall not be recognized as the low-value asset lease.
④Lease Change
If there is a change in lease and all of the following conditions are met, the Company shall take the changed lease as an
individual lease for accounting treatment: Such lease change expands the lease scope by increasing the right of use of
one or more lease assets; the increased consideration and the separate price for the expanded lease range shall be
equivalent to the amount adjusted by the contract.
If the changed lease does not be accounted as an individual lease, on the effective date of such changed lease, the
Company shall reapportion the changed contract consideration, redetermine the lease term, and remeasures the lease
liabilities according to the changed lease payment and revised discount rate.
(2) The Lessor
On the lease inception date, the Company shall classify a lease as a finance lease or an operating lease. Finance lease
refers to the lease by which almost all the risks and rewards related to the ownership of the leased asset are essentially
transferred, regardless of whether the ownership is finally transferred or not. Operating lease refers to the lease other than
a finance lease.
As the lessor for sublease, the Company shall classify the sublease based on the right-of-use assets generated from
original lease. If the original lease is a short-term lease and the Company does not recognize the right-of-use assets and
lease liabilities for it, the Company shall classify the sublease as an operating lease.
① Accounting Treatment of Operating Lease
The lease expense received by the Company for the assets leased out shall be amortized in a straight-line basis over the
lease term without deducting the rent-free periods, and recognized as leasing income. The initial direct fee related to the
leasing transactions paid by the Company shall be included into current expenses; in case of large amount, it shall be
capitalized and included into current profits and losses evenly on the same basis as the leasing income is recognized over
the lease term.
When the Company bears the lease related expenses which should be undertaken by the lessee, the Company shall
deduct this part of expense from the rent income, and amortize the net amount over the lease term.
②Accounting Treatment of Finance Lease
On the commencement date of the lessee, the difference between the recorded amount of the leased asset and the
minimum lease receivables shall be accounted for as unrecognized finance income and recognized as rental income in
each period in which the rent will be received in the future. Initial direct costs shall be included in the initial accounting of
the lease payment receivables and deduct by the revenue recognized over the lease term.
(1) Termination of Operation
Termination of business is a separately distinguishable constituent part that satisfies one of the following conditions and
that has been disposed of or classified by the Company as held for sale:
①This constituent part represents an independent primary business or a separate principal operating area;
②This constituent part is part of an associated plan to dispose of for an independent primary business or a separate
principal operating area;
③This constituent part is a subsidiary acquired for resale.
(2) Repurchase of the Company's Shares
The Company's shares repurchased by the Company for reducing the registered capital or rewarding employees shall be
treated as the treasury shares based on the actual amount paid, and shall be checked and registered at the same time. If
the repurchased shares are canceled, the difference between the actual amount paid for the repurchase and the total par
value of shares calculated by the par value of the canceled shares and the number of canceled shares will write off the
capital reserve. If the capital reserve is insufficient, the retained income will be written off; if the repurchased shares are
awarded to the employees of the Company, it shall be categorized as equity-settled share-based payment. When the
Company receives the payment made by employees who exercise their rights to purchase such shares, the amount shall
be used to write off the cost of treasury shares delivered to employees and the capital reserve in the waiting period and
meanwhile, the capital reserve (stock premium) shall be adjusted according to the difference.
(1) Changes in Significant Accounting Policies
√ Applicable □ Not applicable
Content and Reasons for Change in
Procedure for Approval Notes
Accounting Policies
According to the new lease criteria, the
right-of-use assets and lease liabilities
for all leased assets shall be
recognized according to the minimum
present lease value of the rent payable
Accounting Standards for Enterprises
in the future (except for short-term
No.21 – Lease (CaiKuai [2018] No.35)
leases and low-value asset leases with
(hereinafter referred to as "new lease
simplified treatment), and the
criteria") issued by the Ministry of
depreciation expense and the
Finance on December 7, 2018 specify
unrecognized financing expense are
that the new lease criteria should be
Proposal on Change in Accounting also recognized separately since
implemented by the enterprises
Policies has been approved at the January 1, 2021. Since January 1,
concurrently listed at home and abroad
eleventh meeting of the seventh 2021, the Company discloses the
and those who adopt International
session of the Board of Directors of the financial statement according to the
Financial Reporting Standards (IFRS)
Company on March 23, 2021. new lease criteria, and only adjusts the
or Accounting Standards for
amount of related items in the financial
Enterprises for preparing financial
statement at the beginning of the year
statement since January 1, 2019 and
when the new lease criteria is first
by other enterprises implementing
implemented, without retroactive
Accounting Standards for Enterprises
adjustment of information in the
since January 1, 2021.
comparable periods. The changes in
accounting policies have no significant
impact on the financial position,
operating results and cash flow of the
Company.
From January 1, 2021, the Company implements Accounting Standards for Enterprises No.21 – Lease (Revised)
(hereinafter referred to as "new lease criteria") issued by the Ministry of Finance in 2018. The new lease criteria has the
following effects on the items in the financial statement as of January 1, 2021:
①Content of and Reasons for Change in Accounting Policies
For the operating lease contracts existed before first implementation of the new lease criteria, the Company
distinguishes different connection methods according to the remaining lease term:
Where the remaining lease term is longer than 1 year, the Company recognizes the lease liabilities according to the
remaining lease payment and incremental borrowing rate on January 1, 2021, and initially recognizes the right-of-use
assets according to the amount equivalent to the lease liabilities plus the prepaid rent transferred from other assets.
Where the remaining lease term is less than 1 year, the Company does not recognize the right-of-use assets and the
lease liabilities by simplified method, without significant impact on the financial statement.
For the operating lease contracts with low-value assets existed before first implementation of the new lease criteria,
the Company does not recognize the right-of-use assets and the lease liabilities by simplified method, without significant
impact on the financial statement.
② Affected Item and Amount
Item Impact on Balance on January 1, 2021
Consolidated Balance Sheet Balance Sheet of the Parent Company
Prepayments -9,255,773.15 -7,480,693.68
Other Receivables -1,452,172.37 -141,861.28
Other Current Assets 102,047.54
Right-of-use Assets 155,673,708.67 82,586,983.09
Non-current Liabilities Due within 1 Year 58,971,448.27 29,457,938.99
Lease Liabilities 86,096,362.42 45,506,489.14
(2) Changes in significant accounting estimates
□ Applicable √ Not applicable
(3) The first implementation of new lease criteria from 2021 to adjust the relevant items of the
financial statements implemented at the beginning of the year for the first time
Whether the accounts of the balance sheet at the beginning of the year shall be adjusted
√ Yes □ No
Consolidated Balance Sheet
Unit: RMB
Item December 31, 2020 January 1, 2021 Adjusted amount
Current Assets:
Cash and Bank
Balances
Deposit Reservation
for Balance
Loans to Banks and
Other Financial Institutions
Trading Financial
Assets
Derivative Financial
Assets
Notes receivable 232,857,354.55 232,857,354.55
Accounts receivable 12,857,519,110.16 12,857,519,110.16
Receivables
Financing
Prepayments 162,250,648.05 152,994,874.90 -9,255,773.15
Premium Receivable
Reinsurance
Accounts Receivable
Reinsurance Contract
Reserves Receivable
Other Receivables 970,427,893.48 968,975,721.11 -1,452,172.37
Including: interest
receivable
Dividends
Receivable
Buying Back the Sale
of Financial Assets
Inventory 4,928,019,838.00 4,928,019,838.00
Contract Assets 84,825,834.82 84,825,834.82
Holding for-sale
assets
Non-current Assets
Due within 1 Year
Other Current Assets 558,434,219.93 558,536,267.47 102,047.54
Subtotal of Current Assets 29,112,299,417.75 29,101,693,519.77 -10,605,897.98
Non-current Assets:
Granting of loans and
advances
Investment in
Creditor's Rights
Investment in Other
Creditor's Rights
Long-term
Receivables
Long-term Equity
Investment
Investment in Other
Equity Instruments
Other Non-current
Financial Assets
Investment Property 336,008,869.13 336,008,869.13
Fixed Assets 1,515,594,629.97 1,515,594,629.97
Projects under
Construction
Productive Biological
Assets
Oil and gas assets
Right-of-use Assets 155,673,708.67 155,673,708.67
Intangible Assets 406,777,323.39 406,777,323.39
Development
Expenditure
Goodwill 42,685,490.30 42,685,490.30
Long-term Deferred
Expenses
Deferred Income Tax
Assets
Other Non-current
Assets
Subtotal of Non-current
Assets
Total Assets 36,595,034,080.75 36,740,101,891.44 145,067,810.69
Current Liabilities:
Short-term loan 250,177,083.34 250,177,083.34
Borrowings from the
Central Bank
Borrowings from
Banks and Other Financial
Institutions
Transactional financial
liabilities
Derivative Financial
Liabilities
Notes Payable 3,258,552,758.17 3,258,552,758.17
Accounts Payable 6,444,787,705.28 6,444,787,705.28
Received
Prepayments
Contract liabilities 671,120,385.08 671,120,385.08
Financial Assets Sold
for Repurchase
Deposit Taking and
Interbank Deposit
Receiving from
Vicariously Traded
Securities
Receiving from
Vicariously Sold Securities
Payroll payable 1,805,464,535.31 1,805,464,535.31
Tax Payable 900,144,863.67 900,144,863.67
Other Payables 970,552,877.22 970,552,877.22
Including: interest
payable
Dividends
Payable
Service Charge and
Commission Payable
Reinsurance
Accounts Payable
Holding for-sale
liabilities
Non-current Liabilities
Due within 1 Year
Other Current
Liabilities
Subtotal of Current
Liabilities
Non-current Liabilities:
Insurance Contract
Reserves
Long-term loan 878,000,000.00 878,000,000.00
Bonds Payable
Including: Preferred
Stocks
Perpetual
Bonds
Lease Liabilities 86,096,362.42 86,096,362.42
Long-term Payables
Long-term payroll
payable
Expected Liabilities 282,427,517.82 282,427,517.82
Deferred Income 110,469,806.29 110,469,806.29
Deferred Income Tax
Liabilities
Other Non-current
Liabilities
Subtotal of Non-current
Liabilities
Total Liabilities 16,391,391,970.65 16,536,459,781.34 145,067,810.69
Shareholders' Equity:
Share Capital 2,995,579,590.00 2,995,579,590.00
Other Equity
Instruments
Including: Preferred
Stocks
Perpetual
Bonds
Capital Reserves 1,989,655,334.05 1,989,655,334.05
Less: Treasury Share 581,968,930.89 581,968,930.89
Other Comprehensive
Incomes
Special Reserves
Surplus Reserves 1,553,691,005.92 1,553,691,005.92
General Risk
Reserves
Undistributed Profits 13,754,915,904.19 13,754,915,904.19
Total Shareholders' Equity
Attributable to the Parent 19,773,030,426.40 19,773,030,426.40
Company
Minority Shareholders'
Equity
Total Shareholders' Equity 20,203,642,110.10 20,203,642,110.10
Total Liabilities and
Shareholders' Equity
Balance Sheet of the Parent Company
Unit: RMB
Item December 31, 2020 January 1, 2021 Adjusted amount
Current Assets:
Cash and Bank
Balances
Trading Financial
Assets
Derivative Financial
Assets
Notes receivable 74,284,006.99 74,284,006.99
Accounts receivable 2,740,152,239.35 2,740,152,239.35
Receivables
Financing
Prepayments 48,203,550.97 40,722,857.29 -7,480,693.68
Other Receivables 13,796,603,550.30 13,796,461,689.02 -141,861.28
Including: interest
receivable
Dividends
Receivable
Inventory 171,756,222.72 171,756,222.72
Contract Assets 8,338,657.15 8,338,657.15
Holding for-sale
assets
Non-current Assets
Due within 1 Year
Other Current Assets 12,592.38 12,592.38
Subtotal of Current Assets 20,200,768,385.19 20,193,145,830.23 -7,622,554.96
Non-current Assets:
Investment in
Creditor's Rights
Investment in Other
Creditor's Rights
Long-term
Receivables
Long-term Equity
Investment
Investment in Other
Equity Instruments
Other Non-current
Financial Assets
Investment Property 173,003,549.71 173,003,549.71
Fixed Assets 550,991,444.04 550,991,444.04
Projects under
Construction
Productive Biological
Assets
Oil and gas assets
Right-of-use Assets 82,586,983.09 82,586,983.09
Intangible Assets 156,335,152.97 156,335,152.97
Development
Expenditure
Goodwill
Long-term Deferred
Expenses
Deferred Income Tax
Assets
Other Non-current
Assets
Subtotal of Non-current
Assets
Total Assets 25,827,894,227.07 25,902,858,655.20 74,964,428.13
Current Liabilities:
Short-term loan 250,177,083.34 250,177,083.34
Transactional financial
liabilities
Derivative Financial
Liabilities
Notes Payable 303,660,579.62 303,660,579.62
Accounts Payable 752,373,890.95 752,373,890.95
Received
Prepayments
Contract liabilities 85,275,423.36 85,275,423.36
Payroll payable 1,127,500,408.14 1,127,500,408.14
Tax Payable 627,351,201.46 627,351,201.46
Other Payables 1,002,654,121.27 1,002,654,121.27
Including: interest
payable
Dividends
Payable
Holding for-sale
liabilities
Non-current Liabilities
Due within 1 Year
Other Current
Liabilities
Subtotal of Current
Liabilities
Non-current Liabilities:
Long-term loan 750,000,000.00 750,000,000.00
Bonds Payable
Including: Preferred
Stocks
Perpetual
Bonds
Lease Liabilities 45,506,489.14 45,506,489.14
Long-term Payables
Long-term payroll
payable
Expected Liabilities 8,333,634.18 8,333,634.18
Deferred Income
Deferred Income Tax 29,407,289.24 29,407,289.24
Liabilities
Other Non-current
Liabilities
Subtotal of Non-current
Liabilities
Total Liabilities 5,124,847,446.34 5,199,811,874.47 74,964,428.13
Shareholders' Equity:
Share Capital 2,995,579,590.00 2,995,579,590.00
Other Equity
Instruments
Including: Preferred
Stocks
Perpetual
Bonds
Capital Reserves 1,976,156,775.91 1,976,156,775.91
Less: Treasury Share 581,968,930.89 581,968,930.89
Other Comprehensive
Incomes
Special Reserves
Surplus Reserves 1,553,691,005.92 1,553,691,005.92
Undistributed Profits 14,759,065,785.79 14,759,065,785.79
Total Shareholders' Equity 20,703,046,780.73 20,703,046,780.73
Total Liabilities and
Shareholders' Equity
(4) Explanation of data comparison for early stage of retroactive adjustment due to first
implementation of the new lease criteria from 2021
□ Applicable √ Not applicable
Ⅵ. Taxes
Tax Type Taxation Basis Tax Rate
According to the provisions of the tax law, the sales tax shall be
calculated on the basis of the income by selling goods and
VAT rate of 5%, and simple collection
taxable services. After deducting the input tax that is allowed to
rate of 3%, 0%, tax-free
be deducted from the sales tax in the current period, the
difference shall be the value added tax
Urban
Maintenance and Actually paid turnover tax 7%、5%
Construction Tax
Enterprise Income
Calculated based on the taxable income 12.5%、15%、16.5%、20%、25%
Tax
Education
Actually paid turnover tax 3%
Surcharges
Local Education
Actually paid turnover tax 2%
Surcharges
If there are multiple taxpayers with different enterprise income tax rates, specify the situation
Name of taxpayer Income tax rate
Zhejiang Dahua Technology Co., Ltd. 15%
Zhejiang Dahua System Engineering Co., Ltd. 15%
Zhejiang Dahua Security Network Operation Service Co., Ltd. 15%
Zhejiang Huachuang Vision Technology Co., Ltd. 15%
Zhejiang HuaRay Technology Co., Ltd. 15%
Xinjiang Dahua Zhixin Information Technology Co., Ltd. 15%
Xinjiang Dahua Zhihe Information Technology Co., Ltd. 15%
Xinjiang Dahua Zhitian Information Technology Co., Ltd. 15%
Xinjiang Dahua Huayue Information Technology Co., Ltd. 15%
Xinjiang Dahua Xinzhi Information Technology Co., Ltd. 15%
Inner Mongolia Dahua Zhimeng Information Technology Co., Ltd. 15%
Guangxi Dahua Zhicheng Co., Ltd. 15%
Zhejiang Huafei Intelligent Technology CO., LTD. 15%
Zhejiang Dahua Ju'an Technology Co., Ltd. 20%
Zhejiang Huaxiao Technology Co., Ltd. 20%
Zhejiang Huaxuan Technology Co., Ltd. 20%
Sichuan Dahua Guangxun Photoelectric Technology Co., Ltd. 20%
Guangxi Dahua Technology Co., Ltd. 20%
Beijing Huayue Shangcheng Information Technology Service Co., Ltd. 20%
Shanghai Huashang Chengyue Information Technology Service Co., Ltd. 20%
Zhejiang Dahua Storage Technology Co., Ltd. 20%
Zhejiang Huakong Software Co., Ltd. 20%
Yunnan Zhili Technology Co., Ltd 20%
Guizhou Dahua Information Technology Co., Ltd. 20%
Henan Dahua Zhilian Information Technology Co., Ltd. 20%
Dahua Technology (HK) Limited 16.50%
Chengdu Dahua Zhilian Information Technology Co., Ltd. 20%
Hangzhou Xiaohua Technology CO., LTD. 20%
Chengdu Dahua Zhishu Information Technology Service Co., Ltd. 20%
Chengdu Zhichuang Yunshu Technology Co., Ltd. 20%
Chengdu Huishan Smart Network Technology Co., Ltd. 20%
Guizhou Huayi Shixin Technology Co., Ltd. 20%
Zhejiang Zhoushan Digital Development Operation Co., Ltd 20%
Tianjin Dahua Information Technology Co., Ltd. 20%
Other Domestic Companies 25%
Other Overseas Companies Applicable to local tax rate
(1) According to the "Reply on the Filing of the First Batch of High-tech Enterprises in Zhejiang Province in 2020" (Guo Ke
Huo Zi [2020] No. 251) issued by the Office of National Leading Group for Identification and Management of High-tech
Enterprises on December 29, 2020, the Company was identified as a high-tech enterprise, which is valid for 3 years. The
corporate income tax for this year was reduced at a rate of 15%.
(2) According to the "Reply on the Filing of the First Batch of High-tech Enterprises in Zhejiang Province in 2019" (Guo Ke
Huo Zi [2020] No.32) issued by the Office of National Leading Group for Identification and Management of High-tech
Enterprises on January 20, 2020, our subsidiary Zhejiang Dahua System Engineering Co., Ltd. was identified as a
high-tech enterprise, valid for 3 years. The corporate income tax of this year was reduced at the tax rate of 15%.
(3) According to the "Reply on the Filing of the First Batch of High-tech Enterprises in Zhejiang Province in 2020" (Guo Ke
Huo Zi [2020] No. 251) issued by the Office of National Leading Group for Identification and Management of High-tech
Enterprises on December 29, 2020, our subsidiary Zhejiang Dahua Security Network Operations Services Co., Ltd. was
identified as a high-tech enterprise, which is valid for 3 years. The corporate income tax of this year was reduced at the tax
rate of 15%.
(4) According to the “Notice on Publicizing Zhejiang Province's List of Proposed High-tech Enterprises in 2018” issued by
the Office for the Administration of the Certification of National High-tech Enterprises on November 30, 2018, the
subsidiary - Zhejiang Huachuang Vision Technology Co. Ltd. was certified as a high-tech enterprise, which is valid for
enterprise qualification in 2021. According to the Announcement of the State Taxation Administration on Issues
Concerning the Implementation of Preferential Policies for Income Tax of High-tech Enterprises, the enterprise income tax
of high-tech enterprises can be paid in advance temporarily at the tax rate of 15% within the year when the qualification
expires and before it is re-recognized, so the enterprise income tax of this year is calculated and paid at a reduced tax rate
of 15%.
(5) According to the “Notice on Publicizing Zhejiang Province's List of Proposed High-tech Enterprises in 2018” issued by
the Office for the Administration of the Certification of National High-tech Enterprises on November 30, 2018, the
subsidiary - Zhejiang HuaRay Technology Co., Ltd. was certified as a high-tech enterprise, which is valid for 3 years. As of
the approval date of this report, it is still in the stage of re-examination and declaration of high-tech enterprise qualification
in 2021. According to the Announcement of the State Taxation Administration on Issues Concerning the Implementation of
Preferential Policies for Income Tax of High-tech Enterprises, the enterprise income tax of high-tech enterprises can be
paid in advance temporarily at the tax rate of 15% within the year when the qualification expires and before it is
re-recognized, so the enterprise income tax of this year is calculated and paid at a reduced tax rate of 15%.
(6) According to the "Reply on the Filing of the First Batch of High-tech Enterprises in Zhejiang Province in 2020" (Guo Ke
Huo Zi [2020] No.251) issued by the Office of National Leading Group for Identification and Management of High-tech
Enterprises on December 29, 2020, our subsidiary Zhejiang Huafei Intelligence Technology Co., Ltd. was identified as a
high-tech enterprise, which is valid for 3 years. The corporate income tax for this year was reduced at the tax rate of 15%.
(7) According to the Notice on the Implementation of Inclusive Tax Reduction and Exemption Policies for Small and
Micro-Enterprises (Cai Shui [2019] No.13), the following subsidiaries should pay the corporate income tax at the tax rate
of 20% of their taxable income: Zhejiang Dahua Ju'an Technology Co., Ltd., Zhejiang Huaxiao Technology Co., Ltd.,
Zhejiang Huaxuan Technology Co., Ltd., Sichuan Dahua Guangxun Photoelectric Technology Co., Ltd., Guangxi Dahua
Technology Co. Ltd., Beijing Huayue Shangcheng Information Technology Service Co., Ltd., Shanghai Huashang
Chengyue Information Technology Service Co., Ltd., Zhejiang Dahua Storage Technology Co., Ltd., Zhejiang Huakong
Software Co., Ltd., Yunnan Zhili Technology Co., Ltd., Guizhou Dahua Information Technology Co., Ltd., Henan Dahua
Zhilian Information Technology Co., Ltd., Chengdu Dahua Zhilian Information Technology Co., Ltd., Hangzhou Xiaohua
Technology Co., Ltd., Chengdu Dahua Zhishu Information Technology Service Co., Ltd., Chengdu Zhichuang Yunshu
Technology Co., Ltd., Chengdu Huishan Smart Network Technology Co., Ltd., Guizhou Huayi Shixin Technology Co., Ltd.,
Zhejiang Zhoushan Digital Development Operation Co., Ltd., and Tianjin Dahua Information Technology Co., Ltd.
(8) According to the document (CaiShui [2011] No.58) jointly issued by the Ministry of Finance, the State Administration of
Taxation, and the General Administration of Customs, and the announcement (CaiShui [2020] No.23) issued by the
Ministry of Finance, the following subsidiaries can enjoy preferential tax policies related to the Development of the West
Regions Program from 2011 to 2030: Xinjiang Dahua Zhixin Information Technology Co., Ltd., Xinjiang Dahua Zhihe
Information Technology Co., Ltd., Xinjiang Dahua Zhitian Information Technology Co., Ltd., Xinjiang Dahua Huayue
Information Technology Co., Ltd., Xinjiang Dahua Xinzhi Information Technology Co., Ltd., Inner Mongolia Dahua
Zhimeng Information Technology Co., Ltd., and Guangxi Dahua Zhicheng Co., Ltd. The corporate income tax of this year
was reduced to a rate of 15%.
Ⅶ. Notes to the Items in the Consolidated Financial Statement
Unit: RMB
Balance at the End of the Balance at the Start of the
Item
Period Period
Cash on Hand 23,851.15 24,145.51
Bank Balance 6,444,134,464.33 7,336,459,974.17
Other Cash and Bank Balances 246,704,714.21 135,168,514.98
Total 6,690,863,029.69 7,471,652,634.66
Including: Total Amount Deposited in Overseas Banks 1,693,137,203.87 1,625,638,746.76
The total amount restricted for use due to 105,139,382.31 101,126,967.62
mortgage, pledge or freeze
The amount restricted for use due to mortgage, pledge or freeze:
Item Balance at the End of the Period Balance at the Start of the Period
Bid / Performance bond 105,139,382.31 101,126,967.62
Total 105,139,382.31 101,126,967.62
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Financial assets at fair value through profit or
loss in this period
Including:
Derivative Financial Assets 8,144,978.97 1,005,680.45
Financial products 1,470,000.00 1,470,000.00
Total 9,614,978.97 2,475,680.45
(1) Disclosure of Notes Receivable
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Bank Acceptance Notes 67,400,083.22 57,617,340.08
Commercial acceptance bill 197,737,575.69 175,240,014.47
Total 265,137,658.91 232,857,354.55
Unit: RMB
Balance at the End of the Period Balance at the Start of the Period
Book balance Bad debt provision Book balance Bad debt provision
Category
Accrued Book value Accrued Book value
Amount Percentage Amount Amount Percentage Amount
proportion proportion
Including:
Notes Receivable
with the Bad Debt
Provision Accrued 290,756,778.94 100.00% 25,619,120.03 8.81% 265,137,658.91 248,409,731.28 100.00% 15,552,376.73 6.26% 232,857,354.55
Based on
Combinations
Including:
Bank Acceptance
Notes
Commercial
acceptance bill
Total 290,756,778.94 100.00% 25,619,120.03 265,137,658.91 248,409,731.28 100.00% 15,552,376.73 232,857,354.55
Bad debt provision based on combinations
Unit: RMB
Balance at the End of the Period
Name
Book balance Bad debt provision Accrued proportion
Bank Acceptance Notes 68,775,595.12 1,375,511.90 2.00%
Commercial acceptance bill 221,981,183.82 24,243,608.13 10.92%
Total 290,756,778.94 25,619,120.03 --
If the provision for bad debts of notes receivable is accrued according to the general model of expected credit losses,
please refer to the disclosure method of other receivables for disclosure of the information relating to the bad debts
provisions:
□ Applicable √ Not applicable
(2) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
Balance at the Amount of Changes in the Current Period Balance at the
Category Start of the Recovered or End of the
Accrued Written Off Others
Period Reversed Period
Bank
Acceptance 1,175,864.09 199,647.81 1,375,511.90
Notes
Commercial
acceptance bill
Total 15,552,376.73 10,066,743.30 25,619,120.03
Significant amount of recovered or reversed bad debt provision in this period:
□ Applicable √ Not applicable
(3) Notes receivable pledged by the company at the end of the period
No notes receivable that the company has pledged at the end of the period
(4) Notes receivable endorsed or discounted by the company at the end of the period and that
have not yet expired on the balance sheet date
Unit: RMB
Item Derecognised amount at the end of period Not derecognised amount at the end of period
Bank Acceptance Notes 32,558,357.84
Total 32,558,357.84
(1) Categorical disclosure of accounts receivable
Unit: RMB
Balance at the End of the Period Balance at the Start of the Period
Book balance Bad debt provision Book balance Bad debt provision
Category
Accrued Book value Accrued Book value
Amount Percentage Amount Amount Percentage Amount
proportion proportion
Accounts receivables
with the bad debt
provision accrued based
on single item
Including:
Accounts receivable with
insignificant single
amount but accrued for 555,237,732.63 3.69% 555,237,732.63 100.00% 669,736,293.01 4.53% 313,697,573.83 46.84% 356,038,719.18
separate provision of
bad debt
Accounts receivables
with the bad debt 12,779,041,456 14,106,509,538.
provision accrued based .90 15
on combinations
Including:
Portfolio 2: Aging 12,779,041,456 14,106,509,538.
Analysis Portfolio .90 15
Total 15,037,510,181.74 100.00% 2,258,468,724.84 100.00% 1,918,726,721.00 12,857,519,110.16
.90 16
Bad debt provision based on single item
Unit: RMB
Name Balance at the End of the Period
Reason for making bad
Book balance Bad debt provision Accrued proportion
debt provision
No recovery is
Customer 1 225,140,645.36 225,140,645.36 100.00%
expected
No recovery is
Customer 2 260,153,530.00 260,153,530.00 100.00%
expected
No recovery is
Customer 3 18,790,253.00 18,790,253.00 100.00%
expected
No recovery is
Customer 4 51,153,304.27 51,153,304.27 100.00%
expected
Total 555,237,732.63 555,237,732.63 -- --
Bad debt provision based on combinations
Unit: RMB
Balance at the End of the Period
Name
Book balance Bad debt provision Accrued proportion
Within 1 year (including 1
year)
Total 14,482,272,449.11 1,703,230,992.21 --
Please refer to the disclosing methods of other receivables for the information disclosure of bad debts provisions, if the
bad debt provisions of accounts receivable are made according to the general model of expected credit losses:
□ Applicable √ Not applicable
Disclosure by age
Unit: RMB
Aging Balance at the End of the Period
Within 1 year (including 1 year) 11,166,163,761.03
Total 15,037,510,181.74
(2) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
Amount of Changes in the Current Period
Balance at the Start Balance at the
Category Recovered or
of the Period Accrued Written Off Others End of the Period
Reversed
Bad debt
provision
Total 1,918,726,721.00 353,620,673.67 12,563,422.37 -1,315,247.46 2,258,468,724.84
(3) Accounts receivable actually written off in this period
Unit: RMB
Item Write-off amount
Accounts receivable actually written off 12,563,422.37
(4) Accounts receivable of the top five closing balances collected by debtors
The accounts receivables of the top five closing balance collected by the arrears is summed up to 1,384,695,461.81 yuan,
accounting for 9.21% of the total closing balance of the accounts receivables, the closing balance of bad debt provisions
accrued is summed up to 688,274,933.44 yuan.
(5) Accounts receivable derecognized due to the transfer of financial assets
Hong Kong and JPMorgan Chase Bank in the current period, the Company transferred accounts receivable of USD
after the transfer.
Hong Kong and JPMorgan Chase Bank in the current period, the Company transferred accounts receivable of USD
receivable after the transfer.
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Bank Acceptance Notes 882,840,084.73 1,191,810,834.58
Supply chain finance 18,352,773.86 16,068,820.00
Total 901,192,858.59 1,207,879,654.58
The increase and decrease of accounts receivable financing in the current period and the changes in the fair value.
□ Applicable √ Not applicable
Please refer to the disclosing methods of other receivables for the information disclosure of depreciation provisions, if the
depreciation provisions of accounts receivable financing are made according to the general model of expected credit
losses:
□ Applicable √ Not applicable
(1) Aging analysis of prepayments is as follows
Unit: RMB
Balance at the End of the Period Balance at the Start of the Period
Aging
Amount Percentage Amount Percentage
Within 1 year 161,401,258.38 88.25% 139,389,298.38 91.11%
Total 182,899,790.83 -- 152,994,874.90 --
(2) Advance payment of the top five closing balances by prepayment parties
The total amount of the top five advance payments of closing balance collected according to the concentration ratio of
advance payment objects is RMB 55,124,551.62, accounting for 30.14% of the total closing balance of the advance
payments.
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Other Receivables 922,620,846.22 968,975,721.11
Total 922,620,846.22 968,975,721.11
Unit: RMB
Nature of the funds Closing balance Opening book balance
Deposits 193,243,653.12 149,004,407.45
Prepaid or advance expense 135,590,425.70 106,409,461.12
Equity Transfer Fund 588,000,000.00 588,000,000.00
Export refunds 100,115,398.53
Employee home loan 100,477,712.99 114,008,578.27
Others 5,828,784.85 6,018,587.80
Total 1,023,140,576.66 1,063,556,433.17
Unit: RMB
Phase One Phase Two Phase Three
Expected credit losses
Expected credit Expected credit losses
Bad debt provision for the entire extension Total
losses in the next for the entire extension
(without credit
impairment)
Balance on January 1,
Balance in the Current
Period on January 1, —— —— —— ——
--Transfer to phase two -4,310,189.22 4,310,189.22
--Transfer to phase
-10,409.96 -79,068.62 89,478.58
three
Provisions of this
period
Reversal of the current
period
Other variations -10,423.53 -10,423.53
Balance on June 30,
Book balance changes with significant changes in loss provision in the current period
□ Applicable √ Not applicable
Disclosure by age
Unit: RMB
Aging Balance at the End of the Period
Within 1 year (including 1 year) 845,320,220.80
Total 1,023,140,576.66
Provision for bad debts in the current period:
Unit: RMB
Balance at the Amount of Changes in the Current Period Balance at the
Category Start of the Recovered or End of the
Accrued Written Off Others
Period Reversed Period
Portfolio 2:
Aging Analysis 94,580,712.06 6,051,946.65 102,504.74 -10,423.53 100,519,730.44
Portfolio
Total 94,580,712.06 6,051,946.65 102,504.74 -10,423.53 100,519,730.44
There's no actual written-off accounts receivable in this period.
Unit: RMB
As a percentage of
Bad debt provision
Balance at the End total other
Name of Unit Nature of the funds Aging at the end of the
of the Period receivables at the
period
end of the period
Equity Transfer
Company 1 196,000,000.00 Within 1 year 19.16% 9,800,000.00
Fund
Equity Transfer
Company 2 107,800,000.00 Within 1 year 10.54% 5,390,000.00
Fund
Equity Transfer
Company 3 66,150,000.00 Within 1 year 6.47% 3,307,500.00
Fund
Equity Transfer
Company 4 64,680,000.00 Within 1 year 6.32% 3,234,000.00
Fund
Company 5 Equity Transfer 62,720,000.00 Within 1 year 6.13% 3,136,000.00
Fund
Total -- 497,350,000.00 -- 48.62% 24,867,500.00
There are no other accounts receivable related to government subsidies.
There are no other accounts receivable derecognized due to the transfer of financial assets.
keeps recourse or retains part of corresponding rights or interests
There are no assets and liabilities generated due to other transferred receivables that the Company still keeps recourse or
retains part of corresponding rights or interests.
(1) Categories of inventories
Unit: RMB
Balance at the End of the Period Balance at the Start of the Period
Provision for Provision for
Impairment of Impairment of
Item Inventories or Inventories or
Book balance Book value Book balance Book value
Provision for Provision for
Impairment of Impairment of
Performance Cost Performance Cost
Raw materials 2,950,939,755.21 29,768,503.82 2,921,171,251.39 1,775,145,593.83 26,591,186.48 1,748,554,407.35
Work-in-progress 1,479,391,068.29 21,306,985.49 1,458,084,082.80 1,230,145,494.18 33,254,762.89 1,196,890,731.29
Finished goods 2,679,971,318.04 80,993,196.17 2,598,978,121.87 1,904,284,563.26 87,368,092.93 1,816,916,470.33
Outsourced
work-in-progress
Total 7,444,354,153.68 132,068,685.48 7,312,285,468.20 5,075,233,880.30 147,214,042.30 4,928,019,838.00
(2) Provision for stock depreciation and for contract performance cost impairment
Unit: RMB
Balance at the Increased in the current period Decreased in the current period Balance at the
Item Start of the End of the
Accrued Others Reversals or Others
Period Period
write-offs
Raw materials 26,591,186.48 7,048,661.98 3,871,344.64 29,768,503.82
Work-in-progres
s
Finished goods 87,368,092.93 9,662,433.94 15,928,978.76 108,351.94 80,993,196.17
Total 147,214,042.30 18,755,559.87 33,792,564.75 108,351.94 132,068,685.48
Unit: RMB
Balance at the End of the Period Balance at the Start of the Period
Provision for Provision for
Item
Book balance decline in Book value Book balance decline in Book value
value value
Completed but
unsettled assets
arising from 158,780.49 3,175.61 155,604.88 1,017,240.04 28,227.92 989,012.12
construction
contracts
Operation and
maintenance 59,167,778.43 932,903.74 58,234,874.69 33,574,009.14 599,464.04 32,974,545.10
services
Quality deposit 62,327,099.97 9,434,107.37 52,892,992.60 58,308,795.21 7,446,517.61 50,862,277.60
Total 121,653,658.89 10,370,186.72 111,283,472.17 92,900,044.39 8,074,209.57 84,825,834.82
If the bad debt provisions of accounts receivable are accrued according to the general model of expected credit losses,
please refer to the disclosing methods of other receivables for disclosure of the information relating to bad debts
provisions:
□ Applicable √ Not applicable
Provisions for impairment of contract assets of this period
Unit: RMB
Provisions of this Reversal of the Offset / Write-off in
Item Causes
period current period the current period
Completed but unsettled assets
arising from construction contracts
Operation and maintenance
services
Quality deposit 1,987,589.76
Total 2,321,029.46 25,052.31 --
Item Balance at the End of the Period Balance at the Start of the Period
Long-term accounts receivables due
within 1 year
Total 622,854,205.58 635,956,549.07
Other notes:
The amount of long-term receivables due within one year pledged by the Company at the end of the period is RMB
Restricted Ownership or Right of Use”.
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Not deducted input tax 647,355,012.36 447,082,394.96
Prepaid enterprise income tax 66,520,940.04 91,891,780.90
Receivable return cost 6,225,142.23 19,562,091.61
Total 720,101,094.63 558,536,267.47
(1) Long-term receivables
Unit: RMB
Balance at the End of the Period Balance at the Start of the Period
Range of
Item Bad debt Bad debt
Book balance Book value Book balance Book value discount rate
provision provision
Installment
Payment for
Selling
Products
Including:
Unrealized
Financing
Income
Total 2,069,432,687.70 2,069,432,687.70 2,250,315,769.50 2,250,315,769.50 --
Book balance changes with significant changes in loss provision in the current period
□ Applicable √ Not applicable
(2) Assets/liabilities generated due to transferred long-term receivables that the Company still
keeps recourse or retains part of corresponding rights or interests
There are no assets/liabilities generated due to transferred long-term receivables that the Company still keeps recourse or
retains part of corresponding rights or interests.
Other notes
The amount of long-term receivables pledged by the Company at the end of the period is RMB 178,385,721.02 . For
details, please refer to “Ⅶ. Consolidated Financial Statements Project Notes /63, Assets with Restricted Ownership or
Right of Use”.
Unit: RMB
Decrease/Increase in the current period
Closing
Balance at the Investment profit
Adjustment Cash Balance at the balance of
The invested Start of the and loss Provision for
Investments Investment on other Other changes in dividends or End of the Period provision
entity Period (book recognized impairment Others
increased decreased comprehensi equity profit declared (book value) for decline
value) under the equity accrued
ve income to distribute in value
method
Ⅰ. Joint ventures
Ⅱ. Affiliates
Intelbras
S.A.
Ruicity
Digital
Technology
Co., Ltd.
China
Standard
Intelligent
Security
Technology
Co., Ltd.
Zhejiang
Zhian
Internet of
Things
Engineering
Co., Ltd.
Zhejiang
-164,798,905.92 518,754,247.99 353,955,342.07
Leapmotor
Technology
Co., Ltd.
Digital
Dongyang
Technology 2,400,000.00 -134,417.30 2,265,582.70
Operation
Co., Ltd.
Hangzhou
Juhuanyan
Information 1,148,962.20 -425,465.81 723,496.39
Technology
Co., Ltd.
Ningbo
Dahua
Anbang
Security
Services Co.,
Ltd.
Wenzhou
Dahua
Security 845,387.15 155,744.92 1,001,132.07
Services Co.,
Ltd.
Zhoushan
Dahua
Technology
Co., Ltd.
Shaoxing
Dahua
Security 524,006.45 -7,521.21 516,485.24
Services Co.,
Ltd.
Taizhou
Dahua
Security 327,520.78 53,487.51 381,008.29
Services Co.,
Ltd.
Lishui Dahua
Intelligent
Technology
Co., Ltd.
Guangdong
Dahua Zhishi
Technology
Co., Ltd.
Zhejiang
Huanuokang
Technology
Co., Ltd.
Subtotal 455,977,616.16 12,000,000.00 -155,395,120.84 518,754,247.99 8,909,387.47 -1,977,492.10 820,449,863.74
Total 455,977,616.16 12,000,000.00 -155,395,120.84 518,754,247.99 8,909,387.47 -1,977,492.10 820,449,863.74
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Equity instrument investment 373,467,039.68 360,087,786.34
Investment in financial product 564,456,541.92
Total 937,923,581.60 360,087,786.34
(1) Investment properties measured by cost method
√ Applicable □ Not applicable
Unit: RMB
Buildings and Projects under
Item Land use rights Total
constructions Construction
Ⅰ. Original book value
of the Period
Current Period
(1) Outsourcing
(2) Transfer of fixed
assets\intangible 1,849,820.55 23,027.59 1,872,848.14
assets
(3) Acquisition
Current Period
(1) Disposal
(2) Transfer of fixed
assets / intangible 8,045,870.07 1,076,293.88 9,122,163.95
assets
(3) Other transfer-out
of the Period
Ⅱ. Accumulated
Depreciation and
Amortization
of the Period
Current Period
(1) Accrual or
Amortization
(2) Transfer of fixed
assets\intangible 371,549.15 1,381.66 372,930.81
assets
Current Period
(1) Disposal
(2) Transfer of fixed
assets / intangible 1,398,299.19 69,187.01 1,467,486.20
assets
(3) Other transfer-out
of the Period
Ⅲ. Provision for
Impairment
of the Period
Current Period
(1) Accrual
Current Period
(1) Disposal
(2) Other Transfer-out
of the Period
Ⅳ. Book value
Book Value
Book Value
(2) Investment properties measured at fair value
□ Applicable √ Not applicable
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Fixed Assets 1,979,508,213.29 1,515,594,629.97
Total 1,979,508,213.29 1,515,594,629.97
(1) Fixed assets
Unit: RMB
Housing and Machinery and Means of transport Electronic and
Item Total
building equipment other equipment
Ⅰ. Original book
value:
Start of the Period
the Current Period
(1) Purchase 9,514,093.55 725,472.83 161,349,090.92 171,588,657.30
(2) Transferred
From Construction 434,610,109.22 434,610,109.22
in Progress
(3) Acquisition
(4) Investment
property transfer
the Current Period
(1) Disposal or
Scrapping
(2) Transfer to
investment 1,849,820.55 1,849,820.55
properties
Translation -134,503.60 -82,657.22 -111,408.52 -631,567.77 -960,137.11
Difference
End of the Period
II. Accumulated
depreciation
Start of the Period
the Current Period
(1) Accrual 34,197,744.28 13,380,323.54 3,153,805.14 86,050,236.24 136,782,109.20
(2) Investment
property transfer
the Current Period
(1) Disposal or
Scrapping
(2) Transfer to
investment 371,549.15 371,549.15
properties
Translation -22,193.10 -72,232.48 -66,092.09 -330,437.08 -490,954.75
Difference
End of the Period
Ⅲ. Provision for
Impairment
Start of the Period
the Current Period
(1) Accrual
the Current Period
(1) Disposal or
Scrapping
End of the Period
Ⅳ. Book value
Balance on Book 1,334,271,432.42 193,979,253.94 18,047,651.01 433,209,875.92 1,979,508,213.29
Value
Balance on Book 935,689,369.35 198,246,960.51 20,521,299.75 361,137,000.36 1,515,594,629.97
Value
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Projects under Construction 1,250,289,385.41 1,164,130,453.03
Total 1,250,289,385.41 1,164,130,453.03
(1) Details of construction in progress
Unit: RMB
Balance at the End of the Period Balance at the Start of the Period
Provision for Provision for
Item
Book balance decline in Book value Book balance decline in Book value
value value
Phase I, Urban
Intelligent
Information
Industry
Construction
Project
The Phase II
Construction
Project of the
Smart
Manufacturing
Base in
Hangzhou
Construction
Project of Xi'an 280,270,686.55 280,270,686.55 173,768,994.86 173,768,994.86
R & D Center
The
construction
project of the 120,072,023.53 120,072,023.53 66,257,152.93 66,257,152.93
marketing
center in Xi'an
Project of Smart
IoT Solution R &
D and
Industrialization
Others 43,411,953.17 43,411,953.17 12,919,851.60 12,919,851.60
Total 1,250,289,385.41 1,250,289,385.41 1,164,130,453.03 1,164,130,453.03
(2) Changes in significant construction in progress
Unit: RMB
Project Including:
Other
accumulative Accumulated capitalized Capitalization
Transfer amounts Balance at the
Balance at the Increased in the investment Project capitalized interest rate of the Capital
Item Name Budget amounts in this decreased in End of the
Start of the Period current period as a Progress interest amount in interest in the Source
period current Period
percentage amount the current current period
period
of the budget period
Project of
Smart IoT
Solution R & RMB 0.912 Equity
D and billion Fund
Industrializati
on
The Phase II
Construction
Project of the
RMB 0.827 Equity
Smart 449,783,408.47 178,454,833.99 434,595,716.37 193,642,526.09 75.96% 75.96%
billion Fund
Manufacturin
g Base in
Hangzhou
Construction RMB 0.734 Equity
Project of billion Fund
Xi'an R & D
Center
The
construction
project of the RMB 0.3 Equity
marketing billion Fund
center in
Xi'an
Phase I,
Urban
Intelligent
RMB 39.33 Equity
Information 33,127,985.19 52,787.31 33,180,772.50 84.36% 84.36%
million Fund
Industry
Construction
Project
Total 1,151,210,601.43 490,262,547.18 434,595,716.37 -- -- --
Unit: RMB
Item Buildings and constructions Total
Ⅰ. Original book value:
II. Accumulated depreciation
(1) Accrual 42,053,689.80 42,053,689.80
(1) Disposal 316,293.86 316,293.86
Ⅲ. Provision for Impairment
(1) Accrual
(1) Disposal
Ⅳ. Book value
(1) Details of intangible assets
Unit: RMB
Non-patented Trademark Software
Item Land use rights Patent right Softwares Total
technology rights copyright
Ⅰ. Original
book value
Balance at
the Start of
the Period
Increased in
the Current
Period
(1)
Purchase
(2)
Internal
research and
development
(3)
Acquisition
(4) Transfer
of
construction
in progress
(5)
Investment
property
transfer
Decreased in
the Current
Period
(1)
Disposal
(2) Transfer
to investment 23,027.59 23,027.59
properties
(3) Disposal
of
subsidiaries
Currency
-16,940.00 -277,131.29 -16,262.40 -310,333.69
Translation
Difference
Balance at
the End of
the Period
Ⅱ.
Accumulated
amortization
Balance at
the Start of
the Period
Increased in
the Current
Period
(1)
Accrual
(2)
Investment
property
transfer
Decreased in
the Current
Period
(1)
Disposal
(2) Transfer
to investment
properties
Currency
-159,447.47 -16,262.40 -175,709.87
Translation
Difference
Balance at
the End of
the Period
Ⅲ. Provision
for
Impairment
Balance at
the Start of
the Period
Increased in
the Current
Period
(1)
Accrual
Decreased in
the Current
Period
(1)
Disposal
Balance at
the End of
the Period
Ⅳ. Book
value
Closing
Balance on
Book Value
Opening
Balance on
Book Value
(2) Land Use Rights with Certificates of Title Not Granted
Unit: RMB
Reasons for certificates of title not
Item Book value
granted
In the process of obtaining the real
Chengdu Project Land 163,641,982.09
estate certificates
In the process of obtaining the real
Zhengzhou Project Land 30,396,000.00
estate certificates
(1) Original book value of goodwill
Unit: RMB
Increased in the current Decreased in the
Balance at the period current period Balance at the
The invested entity or matters
Start of the Generated from End of the
which formed goodwill
Period business Disposal Period
combination
Dahua Technology Italy S.R.L. 6,615,294.18 6,615,294.18
Lorex Technology Inc. 36,070,196.12 36,070,196.12
Total 42,685,490.30 42,685,490.30
(2) Provision of impairment in goodwill
Information about the asset group or asset group combination where the goodwill is located
The invested entity or matters Amount of Information about the asset group or asset group
which formed goodwill goodwill combination where it is located
Dahua Technology Italy S.R.L. 6,615,294.18 The asset group relating to the goodwill generated for the
acquisition of Dahua Technology Italy S.R.L., namely, the
long-term asset group, including fixed assets and
intangible assets, formed for Dahua Technology Italy
S.R.L. on June 30, 2021.
Lorex Technology Inc. 36,070,196.12 The asset group relating to the goodwill generated for the
acquisition of Lorex Technology Inc., namely, the long-term
asset group, including fixed assets and intangible assets,
formed for Lorex Technology Inc. on June 30, 2021.
Explain the goodwill impairment test process, key parameters (e.g., growth rate at forecast period, growth rate at steady
period, profit rate, discount rate, forecast period, etc. when the present value of future cash flow is estimated) and the
confirmation method of goodwill impairment loss:
The recoverable amount is determined according to the present value of the expected future cash flow of the relevant
asset group. Its future cash flows shall be determined according to the five-year financial budget from 2021 to 2025
approved by the management, and the discount rate of 15% to 18% is applied. Cash flows over 5 years are calculated on
the basis of zero growth rate. The growth rate is determined based on the growth forecast of the relevant industry and
does not exceed the long-term average growth rate of the industry. Future cash flow estimates are based on
management’s estimated sales amount, cost of sales, and operating expenses during the forecast period based on past
performance and expectations of market development.
Result of goodwill impairment test
The company has evaluated the recoverable amount of goodwill and there is no evidence that the recoverable amount of
goodwill of relevant asset groups is lower than its book value, and there is no indication of impairment.
Unit: RMB
Balance at the
Increased in the Prepaid Expenses Other Amounts Balance at the End
Item Start of the
current period in This Period Decreased of the Period
Period
Housing rent 491,299.17 491,299.17
Improvement
expenditure of fixed
assets leased by
operating lease
Total 32,280,430.67 14,665,459.69 12,635,838.44 50,838.08 34,259,213.84
(1) Deferred income tax assets not written off
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Deductible temporary Deferred Income Tax Deductible temporary Deferred Income Tax
difference Assets difference Assets
Provision for
Impairment of Assets
Unrealized Profit from
Internal Transactions
Deductible Losses 651,246,145.50 115,683,114.86 520,264,565.80 81,682,494.52
Equity incentive
expense
Expected Liabilities 235,702,333.03 35,873,648.95 249,218,594.89 37,770,815.89
Payroll payable 267,407,865.84 44,823,664.36 248,689,069.67 41,294,136.66
Costs from Tax
Increase Due to 198,411,132.06 42,493,581.51 215,743,240.70 46,777,204.87
Absence of Invoice
Changes in fair value
gains and losses
Others 39,821,318.15 6,677,242.39 4,545,104.94 1,037,210.34
Total 4,830,965,774.56 923,271,010.59 4,350,430,047.05 832,453,676.69
(2) Deferred income tax liabilities not written off
Unit: RMB
Balance at the End of the Period Balance at the Start of the Period
Item Taxable temporary Deferred Income Tax Taxable temporary Deferred Income Tax
difference Liabilities difference Liabilities
The gross profit of sales
by installments
Changes in fair value of
financial instruments
Total 469,901,237.24 74,325,425.30 416,061,403.10 67,272,768.46
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Offset
Unit: RMB
Amount of Deferred Balance of Deferred Amount of Deferred Balance of Deferred
Income Tax Assets Income Tax Assets or Income Tax Assets Income Tax Assets or
Item Offset against Liabilities after Offset Offset against Liabilities after Offset
Liabilities at the End of at the End of the Liabilities at the Start of at the Start of the
the Period Period the Period Period
Deferred Income Tax
Assets
Deferred Income Tax
Liabilities
(4) Deferred income tax assets or liabilities listed by net amount after offset
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Deductible temporary difference 327,646,206.06 335,677,986.45
Deductible Losses 778,887,491.06 666,511,990.20
Total 1,106,533,697.12 1,002,189,976.65
(5) Details of unrecognized deferred income tax assets
Unit: RMB
Amount at the end of the
Year Opening balance Notes
period
Total 778,887,491.06 666,511,990.20 --
Unit: RMB
Balance at the End of the Period Balance at the Start of the Period
Provision for Provision
Item
Book balance decline in Book value Book balance for decline Book value
value in value
Prepayments for
purchase of engineering 77,223,405.16 77,223,405.16 10,822,617.82 10,822,617.82
equipments
Advance payment for
land
Total 77,223,405.16 77,223,405.16 86,422,617.82 86,422,617.82
(1) Categories of short-term loan
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Fiduciary loans 1,099,000,000.00 250,000,000.00
Interest payable for short-term loan 5,598,520.22 177,083.34
Total 1,104,598,520.22 250,177,083.34
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Transactional financial liabilities 450,897.52
Including: Derivative financial liabilities 450,897.52
Total 450,897.52
Unit: RMB
Types Balance at the End of the Period Balance at the Start of the Period
Commercial acceptance bill 2,252,402,114.75 2,322,699,486.30
Bank acceptance bill 1,357,732,466.99 935,853,271.87
Total 3,610,134,581.74 3,258,552,758.17
(1) Details of accounts payable
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Payment for purchase of materials 6,374,629,384.82 6,186,065,780.61
Payment for engineering equipments 407,068,316.82 258,721,924.67
Total 6,781,697,701.64 6,444,787,705.28
（2）Important accounts payable aged over 1 year
There is no important account payable aged more than one year.
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Advance payment for product sales 335,633,797.01 186,958,669.05
Pre-payments from construction
projects
Points sales 25,892,534.51 25,825,807.98
Advance payment for service 66,520,028.07
Total 895,221,177.02 671,120,385.08
(1) Details of payroll payable
Unit: RMB
Balance at the Start Increased in the Decreased in the Balance at the End of
Item
of the Period current period current period the Period
Ⅰ. Short-term remuneration 1,798,899,948.47 2,830,486,976.04 3,705,444,706.05 923,942,218.46
Ⅱ. Dimission benefits -
defined contribution scheme
Ⅲ. Dismissal welfare 6,970,234.11 6,970,234.11
Total 1,805,464,535.31 2,957,326,986.45 3,831,211,412.30 931,580,109.46
(2) List of short-term remuneration
Unit: RMB
Balance at the Start of Increased in the Decreased in the Balance at the End of
Item
the Period current period current period the Period
bonuses, allowances 1,525,308,786.25 2,500,239,591.61 3,426,690,763.77 598,857,614.09
and subsidies
contributions
Including: medical
insurance
Work injury
insurance premium
Maternity
insurance premium
education funds
Total 1,798,899,948.47 2,830,486,976.04 3,705,444,706.05 923,942,218.46
(3) Defined contribution scheme (Note)
Unit: RMB
Balance at the Start of Increased in the Decreased in the Balance at the End of
Item
the Period current period current period the Period
insurance
insurance
Total 6,564,586.84 119,869,776.30 118,796,472.14 7,637,891.00
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
VAT 124,732,187.49 324,985,170.91
Enterprise Income Tax 168,714,378.96 528,220,256.03
Individual income tax 26,091,883.24 12,804,973.65
Urban Maintenance and Construction
Tax
Education surcharges (including local
education surcharges)
Sales tax 12,976,148.44 3,587,770.62
Others 6,776,409.72 3,046,315.52
Total 353,698,201.33 900,144,863.67
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Dividends Payable 17,855,221.21 12,982,399.27
Other Payables 699,917,580.17 957,570,477.95
Total 717,772,801.38 970,552,877.22
(1) Dividends payable
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Equity Incentive Restricted Stock
Dividend
Total 17,855,221.21 12,982,399.27
(2) Other payables
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Deposits 105,489,820.71 74,208,249.14
Temporarily borrowed and advance
payments
Equity Transfer Fund 29,325,000.00
Restricted share repurchase
obligations
Others 26,138,419.82 25,969,503.37
Total 699,917,580.17 957,570,477.95
There are no other important payables aged over 1 year.
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Long-term debt due within one year 175,000,000.00 150,000,000.00
Lease liabilities due within one year 81,973,170.49 58,971,448.27
Interest payable due within 1 year 1,857,336.84 1,891,709.34
Total 258,830,507.33 210,863,157.61
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
To-be-transferred sales taxes in
installments
Contract liabilities pending write-off tax 85,235,954.42 79,678,501.51
Non-derecognized notes 110,914,389.75 59,153,238.77
Total 261,106,901.25 209,401,914.77
(1) Categories of long-term loans
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Pledged loans 103,000,000.00 128,000,000.00
Fiduciary loans 1,800,000,000.00 750,000,000.00
Total 1,903,000,000.00 878,000,000.00
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Lease Liabilities 107,606,799.04 86,096,362.42
Total 107,606,799.04 86,096,362.42
Unit: RMB
Balance at the End of the Balance at the Start of the
Item Causes
Period Period
Pending litigation 1,775,746.00 Pending litigation
Others 423,933.76 Loss-making contract
Expected after-sales
maintenance cost
Expected return amount after
the period
Total 261,028,749.21 282,427,517.82 --
Unit: RMB
Increased
Balance at the Decreased in
in the Balance at the End
Item Start of the the current Causes
current of the Period
Period period
period
Governm
Received government subsidies related to
ent 110,469,806.29 3,453,971.36 107,015,834.93
assets
subsidies
Total 110,469,806.29 3,453,971.36 107,015,834.93 --
Projects related to government subsidies:
Unit: RMB
The The
Amount The Amount
amount Amount Related to
Balance at the recorded as Recorded as Balance at the
of new Written Other assets/relat
Liabilities Start of the non-operating Other End of the
subsidies off Costs variations ed to
Period revenue in Income in Period
in this in This income
this period This Period
period Period
Special
award for
Related to
industrial 52,348,286.44 1,929,499.23 50,418,787.21
assets
park
projects
Phase I
investment
financial
incentive
fund for Related to
security assets
video
surveillanc
e product
production
base
project
Funding
for
manufactur
ing
enterprise Related to
technologi assets
cal
transforma
tion
projects
Total 3,453,971.36 107,015,834.93
Other notes:
FJG【2017】No. 35 and FCQ【2017】No. 506documents, the company received 31.66 million yuan of special subsidy from
Fuyang Dahua Intelligent (IOT) Industrial Park in 2015 and 2017 respectively, a total of 63.32 million yuan, as the
government subsidy related to assets, which is recognized as deferred income, and shall be recognized as other income
in installments according to the estimated service life (20 years).
Bureau FJG【2019】No. 18, 【2020】No. 39and FCQ【2019】No. 286 documents, the company received investment
financial reward fund of 27.455 million yuan and 26.05 million yuan in 2019 and 2020 respectively for security video
surveillance product production base project phase one, as the government subsidy related to assets, which is recognized
as deferred income. As of June 30, 2020, this part of assets has not been completed and has not been amortized.
Bureau of Finance FJXC【2019】No. 49 and FCQ【2019】No. 804 documents, the company received project fund of 9.1977
million yuan for the first batch of technical renovation project of municipal manufacturing enterprises in 2019, as the
government subsidy related to assets, which is recognized as deferred income, and shall be recognized as other income
in installments according to the estimated service life (15-111 months).
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
To-be-transferred sales taxes in
installments
Other loans 110,000,000.00 110,000,000.00
Total 358,620,950.30 391,128,045.90
Other notes:
The company has reached a cooperation intention with CDB Development Fund to increase the capital of Dahua Zhilian
Co., Ltd., a subsidiary of the company. It is agreed that CDB Development Fund will not assign directors, supervisors and
other senior managers to Dahua Zhilian; The company shall pay the investment income with an annualized yield of 1.2%
to CDB Development Fund through dividends and call premium and other means, and the company shall redeem the
equity of CDB Development Fund to Dahua Zhilian from 2022 to 2024, and recognize it as other non-current liabilities.
Unit: RMB
Increased or decreased amount in this period (+/-)
Shares
Balance at the Shares Balance at the
Bonus converted
Start of the Period newly Others Subtotal End of the Period
shares from capital
issued
reserves
Total shares 2,995,579,590.00 -1,028,860.00 -1,028,860.00 2,994,550,730.00
Other notes:
According to the company's thirteenth meeting of the seventh board of directors held in April 2021 and the revised articles
of association of the company, which have passed by the company at 2020 annual general meeting of shareholders, the
company repurchased and canceled 1,028,860 restricted shares granted but not unlocked held by the resigned equity
incentive objects, reduced the registered capital by RMB 1,028,860.00 , with the company's registered capital reduced to
Unit: RMB
Balance at the Start of Increased in the Decreased in the Balance at the End of
Item
the Period current period current period the Period
Capital premium
(capital share 1,345,746,389.28 182,546,901.94 21,612,609.65 1,506,680,681.57
premium)
Other capital reserves 643,908,944.77 624,886,947.36 182,546,901.94 1,086,248,990.19
Total 1,989,655,334.05 807,433,849.30 204,159,511.59 2,592,929,671.76
Other notes, including increases or decreases in this period and their reasons:
due to the repurchase and cancellation of restricted shares held by equity incentive objects that have been granted but not
yet unlocked is RMB 3,864,873.97, and other capital reserves are increased by RMB 74,039,183.48. If the amount
deductible before tax exceeds the cost related to share-based payment recognized in the accounting standards, the
income tax impact amount is RMB 32,093,515.89, increasing other capital reserves.
objects in the current period, reduced the share capital by 1,028,860.00 yuan, and reduced the capital reserve (share
capital premium) by 7,461,896.20 yuan.
the capital reserve (capital stock premium) by 11,562,939.55 yuan.
time and the unlocking conditions for the first unlocking period reserved for the first time set in the incentive plan, except
for the incentive objects who have resigned, the restricted shares held by the incentive objects for the second unlocking
period and the restricted shares held by the incentive objects reserved for the first unlocking period are unlocked. Among
other capital reserves, the recognized related expenses of restricted shares unlocked in the current period are
related to share based payment recognized in the accounting standards is 48,521,441.35 yuan, a total of 182,546,901.94
yuan which is transferred to the capital reserve (share capital premium).
decreased, and the capital reserve (capital stock premium) decreased by 2,587,773.90 yuan.
should enjoy under the equity method in the current period increased other capital reserves by RMB 518,754,247.99.
Unit: RMB
Balance at the Start of Increased in the Decreased in the Balance at the End of
Item
the Period current period current period the Period
Restricted shares 581,968,930.89 256,596,774.54 325,372,156.35
Total 581,968,930.89 256,596,774.54 325,372,156.35
Other notes, including increases or decreases in this period and their reasons:
with a total of 1,028,860 restricted shares repurchased, a corresponding reduction in the share capital of 1,028,860.00
yuan, and a corresponding reduction in the amount of treasury shares of 8,490,756.20 yuan.
incentive plan in 2018 met the unlocking conditions, a total of 29,431,520 restricted shares were unlocked, and the
treasury shares and related liabilities were reduced by 243,233,196.40 yuan.
stock unlocked the actual distribution of some escrow cash dividends and the recovery of cash dividends distributed to
relevant resigned personnel due to employee resignation, resulting in a total reduction of treasury shares and related
liabilities of 4,872,821.94 yuan.
Unit: RMB
This Period's Amount of Occurrence
Less: recorded Less: Recorded
Balance at the into other into other Less: Attributable to Balance at the
Before tax Attributable to
Item Start of the comprehensive comprehensive Income the minority End of the
balance in this the Company
Period incomes in incomes in Tax shareholders Period
period after tax
previous period previous period Expense after tax
and transferred and transferred
to P/L in current to retained
period income in
current period
II. Other
comprehensive
income that will 61,157,523.13 29,802,949.19 29,732,921.34 70,027.85 90,890,444.47
be reclassified
into P/L
Currency
conversion 54,715,972.03 30,978,213.12 31,016,888.78 -38,675.66 85,732,860.81
difference
Others 6,441,551.10 -1,175,263.93 -1,283,967.44 108,703.51 5,157,583.66
Other
comprehensive 61,157,523.13 29,802,949.19 29,732,921.34 70,027.85 90,890,444.47
incomes in total
Unit: RMB
Balance at the Start of Increased in the Decreased in the Balance at the End of
Item
the Period current period current period the Period
Statutory surplus
reserve
Total 1,553,691,005.92 1,553,691,005.92
Unit: RMB
Item Current Period Previous Period
Undistributed Profit before Adjustment at the
End of Previous Period
Undistributed Profit after Adjustment at the
Start of the Period
Add: net profit attributable to parent
company's owner in current period
Less: s Common Stock Dividends Payable 802,815,330.12 397,654,658.45
Add: Common stock dividends corresponding
to repurchase and cancellation of restricted 500,809.81 462,282.67
stocks
Undistributed Profit at the End of the Period 14,595,777,271.43 11,219,805,643.20
(1) Operating income and operating costs
Unit: RMB
This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Item
Income Cost Income Cost
Main Business 13,306,440,228.58 7,773,003,019.77 9,602,675,069.68 4,920,046,273.00
Other businesses 198,565,505.31 137,711,909.20 235,653,783.94 179,203,877.57
Total 13,505,005,733.89 7,910,714,928.97 9,838,328,853.62 5,099,250,150.57
(2) Information about operating income and operating costs (by product)
Item This Period's Amount of Occurrence
Income Cost
Smart IoT products and solutions 11,574,586,946.32 6,477,078,712.53
Of which: software business 551,302,402.99 163,767,869.40
Innovative business 1,197,068,199.15 805,660,868.12
Others 733,350,588.42 627,975,348.32
Total 13,505,005,733.89 7,910,714,928.97
(3) Information about operating income and operating costs (by district)
Item This Period's Amount of Occurrence
Income Cost
Domestic 7,777,087,103.47 4,685,553,053.26
Overseas 5,727,918,630.42 3,225,161,875.71
Total 13,505,005,733.89 7,910,714,928.97
Information about performance of obligations:
The Company shall timely fulfill its performance obligations in accordance with the contract, and recognize the relevant
revenue when the customer obtains the control right of related commodities, which is mainly divided into fulfilling its
performance obligations at a certain point of time and performing the performance obligations within a certain period of
time.
The Company shall recognize the revenue from the sales of goods when the control over the goods is transferred, namely,
when the goods are transported to the designated place of the other party, or delivered to the carrier designated by the
other party, or when they are delivered to the other party for acceptance.
If the Company identifies part of the business as performance obligations fulfilled within a certain period of time according
to the nature of the business, the Company shall recognize the revenue according to the performance progress within that
period of time, except that the performance progress cannot be reasonably recognized. If the Company cannot
reasonably recognize the performance progress using the output method or the input method, but the costs incurred are
expected to be compensated, the revenue shall be recognized according to the amount of costs incurred until the
performance progress can be reasonably recognized.
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Urban Maintenance and Construction
Tax
Education Surcharges 31,900,534.13 16,649,481.08
House property tax 2,351,433.37 2,429,673.54
Land usage tax 656,297.10 939,532.57
Vehicle and vessel use tax 23,707.54 34,922.82
Stamp duty 5,084,326.28 4,827,847.03
Others 15,593,603.53 6,942,979.14
Total 100,270,188.53 55,143,183.10
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Labor cost 1,044,869,188.90 883,747,948.12
After-sales service expense 151,149,337.68 188,026,183.46
Transportation and vehicle expenses 228,486,216.43 162,242,677.25
Marketing expense 158,441,695.91 125,951,940.36
Taxation and insurance expense 114,258,333.64 117,797,928.06
Administrative expenses 77,325,742.64 106,886,558.37
Business entertainment 92,867,175.49 68,957,545.58
Traveling expense 85,796,783.51 62,166,335.57
Communication expense 7,644,337.28 26,252,604.63
Knowledge resource fee 25,449,407.98 21,141,479.54
Depreciation cost and asset
amortization
Others 17,499,873.06 26,415,453.24
Total 2,059,001,711.42 1,805,227,134.27
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Labor cost 272,130,616.85 258,180,429.50
Depreciation cost and asset
amortization
Administrative expenses 32,286,309.59 26,698,756.21
Knowledge resource fee 20,467,417.96 17,269,047.77
Consumables and service fees 4,673,608.79 8,690,430.41
Business entertainment 3,377,855.85 3,527,325.45
Transportation and vehicle expenses 3,149,317.93 2,405,347.17
Traveling expense 3,425,734.01 1,599,133.76
Others 12,582,093.72 1,239,825.05
Total 393,272,171.06 355,781,491.22
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Labor cost 1,238,777,601.85 1,142,032,536.26
Research consumables and service
fees
Depreciation cost and asset
amortization
Traveling expense 22,875,356.11 17,825,255.20
Administrative expenses 13,009,916.31 13,410,737.82
Communication expense 4,368,448.13 6,041,044.08
Others 2,083,292.70 2,899,674.45
Total 1,406,249,326.81 1,314,612,940.95
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Interest expense 44,547,319.17 36,633,828.03
Less: interest income 114,759,041.30 82,236,920.48
P/L on foreign exchange 131,529,465.80 5,140,375.51
Others 16,358,297.48 15,895,187.68
Total 77,676,041.15 -24,567,529.26
Unit: RMB
Sources of other incomes This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Value-added tax refund 355,601,489.70 373,851,655.76
Special subsidies 70,558,018.03 84,531,537.83
VAT additional deduction 359,764.33 163,127.65
Total 426,519,272.06 458,546,321.24
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Long-term equity investment income
-155,395,120.84 -44,335,467.10
measured by equity method
Investment income from disposal of
long-term equity investment
Investment Income from Disposal
Trading Financial Assets
Investment income from possession of
other non-current financial assets
Investment income from treasury bond
reverse repurchase
Total -127,515,259.00 -32,178,746.19
Unit: RMB
This Period's Amount of Previous Period's Amount of
Source of the income from changes in fair value
Occurrence Occurrence
Trading Financial Assets 7,123,015.25 2,431,780.82
Including: gains from changes at fair value of
derivative financial instruments
Transactional financial liabilities -450,380.67
Other Non-current Financial Assets 117,273,994.45 14,577,362.35
Total 123,946,629.03 17,009,143.17
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Bad debt losses of other receivables -5,949,441.91 -4,374,932.26
Bad debt losses of accounts receivable -353,620,673.67 -80,445,242.05
Bad debt losses from receivable
financing
Bad debt losses on notes receivable -10,066,743.30
Contract assets impairment losses -2,942,506.60
Total -368,461,594.95 -87,762,680.91
Unit: RMB
This Period's Amount of Previous Period's Amount of
Item
Occurrence Occurrence
II. Losses of inventory falling price and losses
-7,627,470.90 -42,303,107.35
of contract performance cost impairment
Ⅻ. Contract assets impairment losses -2,295,977.15
Total -9,923,448.05 -42,303,107.35
Unit: RMB
Sources of the asset disposal income This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Income from disposal of fixed assets 33,113,440.14 10,307.31
Income from disposal of right-of-use
-110,999.13
assets
Unit: RMB
Amount recorded into
This Period's Amount of Previous Period's Amount of
Item non-recurring profit and loss
Occurrence Occurrence
in current period
Government subsidies 171,808.80 877,665.31 171,808.80
Gains and losses of
non-current asset retirement
Others 5,688,387.37 4,848,241.58 5,688,387.37
Total 6,539,902.55 6,124,434.50 6,539,902.55
Government subsidies recorded into current period P/L:
Unit: RMB
Subsidies
Influence This Previous
Special Related to
Subsidy Distributing Distributing Types of Profit and period's period's
Subsidy or assets/related
items Entity Reason Nature Loss in the amount of amount of
not to income
Current occurrence occurrence
Year or not
Subsidies
received
due to
Wuzhou
engagement
City Developme
in specific
allocates nt and
industries
special Reform
and trades
funds to Bureau of Related to
Subsidy encouraged Yes No 50,000.00
actively Changzhou income
and
support and District,
supported
cultivate Wuzhou
by the State
eligible City
(obtained by
enterprises
national
policies and
regulations)
Subsidies
received
due to
engagement
Ten Merit Economic
in specific
Enterprise and
industries
(Excellent Information
and trades Related to
Entrepreneu Bureau of Reward Yes No 300,000.00
encouraged income
r) Award in Fuyang
and
Fuyang District,
supported
District, Hangzhou
by the State
Hangzhou
(obtained by
national
policies and
regulations)
Subsidies
received by
undertaking
the
Subsidies functions of
for overseas the state to
Government
employees ensure the
s of other Related to
to stay in Subsidy supply or Yes No 111,808.80 511,665.31
countries income
office during price control
overseas
the of certain
epidemic public
utilities or
socially
necessary
products
Subsidies
obtained
due to local
Subsidy for
support
the
Hangzhou policies
elimination Related to
Finance Subsidy such as Yes No 16,000.00
of old income
Bureau investment
vehicles in
promotion
Hangzhou
by local
government
s
Subsidies
received
due to
engagement
(Xiaoguwei)
in specific
"Internet +
industries
Transportati Guangdong
and trades
on" Traffic Related to
Reward encouraged Yes No 60,000.00
Innovation E-payment income
and
and Association
supported
Entrepreneu
by the State
rship
(obtained by
Competition
national
policies and
regulations)
Unit: RMB
Amount recorded into
This Period's Amount of Previous Period's Amount of
Item non-recurring profit and loss
Occurrence Occurrence
in current period
Donations 115,939.69 9,139,267.32 115,939.69
Gains and losses of
non-current asset retirement
Including: Losses on
disposal of fixed assets
Water conservancy fund 12,816.79 7,139.14
Others 3,503,104.12 2,068,747.09 3,503,104.12
Total 4,968,968.32 12,034,840.16 4,956,151.53
(1) Income tax expenses table
Unit: RMB
Previous Period's Amount of
Item This Period's Amount of Occurrence
Occurrence
Current income tax expense 10,662,968.22 140,980,035.67
Deferred income tax expense -49,114,153.99 28,579,381.06
Total -38,451,185.77 169,559,416.73
(2) Reconciliation of accounting profits and income tax expenses
Unit: RMB
Item This Period's Amount of Occurrence
Total Profit 1,636,960,340.28
Income tax expense calculated at statutory/applicable tax
rate
Impact by applying different tax rates to subsidiaries -12,634,599.61
Impact of income tax before adjustment in this period -195,277,436.51
Impact of the non-deductible costs, expenses and losses 37,271,664.04
Impact of additional deduction of the research and
-174,804,839.08
development expenses
Others 61,449,974.35
Income tax expense -38,451,185.77
See the notes to this section for details.
(1) Other cash receipts relating to operating activities
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Interest Income 31,424,004.92 17,443,454.89
Government subsidies 62,592,472.14 78,834,593.67
Tender and performance guarantee
deposit
Others 29,558,616.53 15,148,201.33
Total 149,033,785.99 139,593,191.08
(2) Other cash payments relating to operating activities
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Administrative expenses 148,852,318.30 140,230,672.86
Communication expense 19,886,351.20 15,732,684.76
Business entertainment 101,210,043.24 71,195,825.63
Traveling expense 118,402,918.50 82,296,281.44
Marketing expense 118,471,634.44 77,354,370.79
Transportation and vehicle expenses 204,194,430.33 163,643,754.38
Knowledge resource fee 43,764,104.24 34,596,983.79
Research and development
consumption and external inspection 14,958,712.93 20,323,161.02
fee
Taxation and insurance expense 8,896,959.13 24,354,809.36
Tender and performance guarantee
deposit
Incomings and outgoings and 81,594,660.65 34,877,860.45
advanced payments
Consumables and service fees 149,595,572.15 152,728,533.48
Others 12,937,463.59 16,355,741.30
Total 1,080,799,258.93 846,799,426.29
(3) Other cash receipts relating to investing activities
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Cash arising from investment in
financial derivatives
Advance payment for equity transfer 29,325,000.00 60,000,000.00
Receipts of loans from non-financial
institutions
Total 56,003,510.94 135,010,923.00
(4) Other cash payments related to investing activities
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Cash paid for investment in financial
derivatives
Net cash from disposal of subsidiaries 7,211,693.45
Total 13,107,855.82 79,560,273.93
(5) Other cash receipts related to financing activities
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Withdrawn documentary credit deposit 767,782,756.00
Equity incentive subscription 99,994,181.16
Total 867,776,937.16
(6) Other cash payments related to financing activities
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Paid documentary credit deposit 767,782,756.00
Cash paid for the repayment of lease
liabilities
Total 49,649,564.91 767,782,756.00
(1) Supplementary information about the Cash Flow Statement
Unit: RMB
Supplementary information Amount of this period Amount of Previous Period
-- --
activities:
Net Profit 1,675,411,526.05 1,370,732,897.65
Add: provision for impairment of assets 378,385,043.00 130,065,788.26
Depreciation of fixed assets, oil and gas assets,
productive biological assets
Depreciation of Right-of-use Assets 42,053,689.80
Amortization of Intangible Assets 22,637,749.57 24,767,627.82
Amortization of long-term prepaid expenses 12,635,838.44 12,452,944.39
Losses on disposal of fixed assets, intangible assets
-33,002,441.01 -10,307.31
and other long-term assets (mark "-" for incomes)
Losses on scrapping of fixed assets (mark "-" for
incomes)
Losses on fair value changes (mark "-" for incomes) -123,946,629.03 -17,009,143.17
Financial expenses (mark "-" for incomes) 52,271,024.16 15,327,107.25
Losses on investment (mark "-" for incomes) 127,515,259.00 32,178,746.19
Decrease on deferred income tax assets (mark "-"
-108,136,559.40 1,505,192.29
for increases)
Increase on deferred income tax liabilities (mark "-"
for decreases)
Decrease on inventories (mark "-" for increases) -2,369,120,273.38 -675,761,590.32
Decrease on operational receivables (mark "-" for
-230,579,623.21 1,756,139,392.57
increases)
Increase on operational payables (mark "-" for
-552,073,423.01 -2,965,863,025.21
decreases)
Others 80,843,507.92 75,045,591.95
Net cash flow generated by operating activities -871,108,797.99 -106,927,963.95
receipts and payment:
Conversion of Debt into Capital
Convertible Bonds Due within 1 Year
Fixed Assets under Finance Lease
Closing balance of cash 6,549,708,897.81 2,780,621,441.66
Less: Balance at the Start of the Period of cash 7,358,452,769.53 2,734,185,976.41
Add: closing balance of cash equivalents
Less: Balance at the Start of the Period of cash
equivalents
Net additions to balance of equivalents -808,743,871.72 46,435,465.25
(2) Composition of cash and cash equivalents
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Ⅰ. Cash 6,549,708,897.81 7,358,452,769.53
Including: cash on hand 23,851.15 24,145.51
Bank deposit for payment at any
time
Other monetary capital for
payment at any time
Ⅱ. Cash equivalents
Ⅲ. Closing balance of cash and cash
equivalents
Including: restricted cash and cash
equivalents used by the parent company
or subsidiaries within the group
Unit: RMB
Book value at the end of
Item Cause of restrictions
the period
Cash and Bank Balances 105,139,382.31 Guarantee security deposit
Notes receivable and
Pledge applied to issue bank acceptance bills; Bank acceptance
accounts receivable 807,838,701.82
bill endorsed but not derecognized
financing
Long-term Receivables 178,385,721.02 Pledge for bank loans
Non-current Assets Due
within 1 Year
Total 1,122,437,483.18 --
(1) Monetary items in foreign currencies
Unit: RMB
Closing balance in foreign Closing Balance Converted
Item Exchange rate for conversion
currencies into RMB
Cash and Bank Balances -- --
Including: USD 276,531,466.74 6.4601 1,786,420,928.29
EUR 30,332,705.33 7.6862 233,143,239.71
HKD 31,490,079.12 0.8321 26,202,210.93
INR 440,078,738.69 0.0869 38,263,158.10
ZAR 82,346,607.70 0.4501 37,061,347.36
AED 20,192,437.43 1.7587 35,511,833.94
Total amount of other
currencies
Accounts receivable -- --
Including: USD 414,254,529.88 6.4601 2,676,125,688.48
EUR 48,305,751.95 7.6862 371,287,670.64
HKD
INR 3,582,881,535.50 0.0869 311,517,804.88
PLN 62,270,833.80 1.7009 105,917,083.92
Russian ruble 724,940,450.19 0.0892 64,686,396.91
Total amount of other
currencies
Long-term loan -- --
Including: USD
EUR
HKD
Accounts Payable
Including: USD 238,225,290.88 6.4601 1,538,959,201.61
INR 1,227,728,425.79 0.0869 106,746,276.82
MXN 20,510,565.96 0.3260 6,685,975.15
EUR 729,698.63 7.6862 5,608,609.61
Australian dollar 524,672.91 4.8528 2,546,132.70
BRL 792,477.35 1.3033 1,032,827.81
Total amount of other
currencies
(2) Notes on overseas business entities, including that for the important overseas business
entities, the overseas main premises, functional currency and selection basis shall be disclosed.
If there are changes on its functional currency, the causes for the changes shall be disclosed as
well.
√ Applicable □ Not applicable
Since the Company's overseas business entity, Dahua Technology (HK) Limited, does not have autonomy over its
business activities, which are the extension of the Company's business activities. For the part constituting the Company's
business activities, RMB shall be used as its functional currency.
(1) Basic information about government subsidies
Unit: RMB
Amount taken to
Types Amount Items reported
current P&L
VAT refund 355,601,489.70 Other Incomes 355,601,489.70
District-level funding for the creation of an international
software city
Provincial Science and Technology Development Special
Fund Subsidy
Tax refund 6,023,635.39 Other Incomes 6,023,635.39
Subsidy for the central pilot project of modern supply
chain system construction in the circulation field in 6,012,500.00 Other Incomes 6,012,500.00
Hangzhou
District supporting funds for the first batch of technological
projects
Funding for provincial key industrial Internet platform
projects
Patent subsidies 4,835,720.00 Other Incomes 4,835,720.00
Special subsidies for development of the integrated circuit
industry in Hangzhou
Other special subsidies 3,745,573.60 Other Incomes 3,745,573.60
Funding for industrial chain pilot projects for emergency in
Zhejiang province
Funding for Hangzhou 5G Industry Project 2,884,000.00 Other Incomes 2,884,000.00
Fund for Hangzhou Intelligent Manufacturing
Demonstration and Manufacturing Digital Transformation 1,500,000.00 Other Incomes 1,500,000.00
Project
Return from social security 1,464,864.34 Other Incomes 1,464,864.34
Subsidies for job stability 1,438,653.34 Other Incomes 1,438,653.34
Fund for intellectual property award 1,042,000.00 Other Incomes 1,042,000.00
Subsidy funds for industrial technology basic public
service platform projects
Subsidies for high-tech enterprise 800,000.00 Other Incomes 800,000.00
Government subsidies during the epidemic 43,000.00 Other Incomes 43,000.00
VAT additional deduction 359,764.33 Other Incomes 359,764.33
Subsidies for overseas employees to stay in office during Non-operating
the epidemic Revenue
Innovation and Entrepreneurship Competition Revenue
Phase I investment financial incentive fund for security
video surveillance product production base project
Deferred income /
Fuyang Dahua Intelligent (IOT) Industrial Park 63,320,000.00 1,929,499.23
Other income
Hangzhou City's funding for technological transformation Deferred income /
of manufacturing enterprises Other income
(2) Repayment of government subsidies
√ Applicable □ Not applicable
Item Amount Causes
Preferential loan discount funds for provincial Due to the prepayment of the epidemic loan, the
epidemic prevention and control key guarantee 102,326.40 excess subsidy of the financial discount was
enterprises refunded
VIII. Changes in the Scope of Consolidation
(1) Profits or losses arising from re-measurement of the equity held before acquisition date in fair
value
Is there any transaction that leads to business consolidation achieved through multiple transactions in various stages with
control acquired within the reporting period?
□ Yes √ No
Is there any situation where disposal of investment in subsidiaries in a single transaction causes loss of control?
□ Yes √ No
Is there any situation where disposal of investment in subsidiaries is achieved through multiple transactions in various
stages, causing loss of control in this period?
□ Yes √ No
Explanations on the changes in the scope of consolidation caused by other reasons (for example, newly established
subsidiaries, subsidiaries clearing, etc.) and relevant information:
(1) The company invested and established two domestic subsidiaries, Zhejiang Huashi Zhijian Technology Limited and
Zhengzhou Dahua Zhian Information Technology Limited, as well as three overseas subsidies, Huacheng Network (Hong
Kong) Technology Limited, Dahua Technology QFZ LLC, and DAHUA TECHNOLOGY PACIFIC S.A., the above
subsidiaries have been included in the scope of consolidation since the date of establishment.
(2) Hangzhou Huajun Technology Limited, a subsidiary of the company, was canceled in the current period and will not be
included in the scope of consolidation from the date of cancellation.
IX. Equity in Other Entities
(1) Composition of the enterprise group
Main Place of Registered Shareholding Percentage Acquisition
Name of Subsidiaries Business Nature
Business Address Direct Indirect Method
Dahua System Binjiang District, Binjiang District, Electronics and
Engineering Hangzhou Hangzhou information
Dahua Vision Binjiang District, Binjiang District, Electronics and
Technology Hangzhou Hangzhou information
Dahua Security Binjiang District, Binjiang District, Electronics and
Network Hangzhou Hangzhou information
Binjiang District, Binjiang District, Electronics and
Dahua Ju'an 51% Establishment
Hangzhou Hangzhou information
Guangxi Dahua Youjiang District, Youjiang District, Electronics and
Information Baise Baise information
Binjiang District, Binjiang District,
Dahua Security Service 100% Establishment
Hangzhou Hangzhou
Qingxiu District, Qingxiu District,
Guangxi Security Service 100% Establishment
Nanning Nanning
Binjiang District, Binjiang District, Electronics and
Hangzhou Xiaohua 45% (Note 1) Establishment
Hangzhou Hangzhou information
Fuyang District, Fuyang District, Electronics and
Dahua Zhilian 90.09% (Note 2) Establishment
Hangzhou Hangzhou information
Investment &
Dahua investment Fuyang District, Fuyang District,
investment 75% Establishment
management Hangzhou Hangzhou
management
Youjiang District, Youjiang District, Electronics and
Guangxi Zhicheng 65% Establishment
Baise Baise information
Binjiang District, Binjiang District, Electronics and
Hangzhou Huacheng 51% Establishment
Hangzhou Hangzhou information
Electronics and
Xinjiang Information Shihezi, Xinjiang Shihezi, Xinjiang 92% Establishment
information
Sci-tech
Binjiang District, Binjiang District, popularization
HuaRay Technology 45.9% (Note 3) Establishment
Hangzhou Hangzhou and application
services industry
Fuyang District, Fuyang District, Electronics and
Fuyang Hua'ao 51% Establishment
Hangzhou Hangzhou information
Binjiang District, Binjiang District, Electronics and
Huafei Intelligent 45.50% (Note 4) Establishment
Hangzhou Hangzhou information
Binjiang District, Binjiang District, Electronics and
Huachuang Vision 51% Establishment
Hangzhou Hangzhou information
Guanshanhu Guanshanhu Electronics and
Guizhou Huayi 45% (Note 5) Establishment
District, Guiyang District, Guiyang information
Cele County, Cele County, Electronics and
Xinjiang Zhihe 97% Establishment
Hotan, Xinjiang Hotan, Xinjiang information
Wuzhou, Electronics and
Guangxi Huacheng Wuzhou, Guangxi 90% Establishment
Guangxi information
Meitan Dahua Electronics and
Zunyi, Guizhou Zunyi, Guizhou 100% Establishment
Technology information
New District, Bai New District, Bai
Inner Mongolia County, Chahar County, Chahar Electronics and
Zhimeng Right Wing Back Right Wing Back information
Banner Banner
Hetian County, Hetian County, Electronics and
Xinjiang Zhitian 97% Establishment
Hetian, Xinjiang Hetian, Xinjiang information
Shache County, Shache County,
Electronics and
Xinjiang Xinzhi Kashgar District, Kashgar District, 100% Establishment
information
Xinjiang Xinjiang
Kashgar, Electronics and
Xinjiang Huayue Kashgar, Xinjiang 100% Establishment
Xinjiang information
Tianjin Binhai Tianjin Binhai New Electronics and
Tianjin Dahua 65% Establishment
New Area Area information
Shuangpai Shuangpai
Electronics and
Dahua Zhilong County, County, Yongzhou 90% Establishment
information
Yongzhou City City
Fuyang District,
Fuyang District,
Hangzhou City, Electronics and
Vision Technology Hangzhou City, 100% Establishment
Zhejiang information
Zhejiang Province
Province
Fuyang District,
Fuyang District,
Hangzhou City, Electronics and
Huaxiao Technology Hangzhou City, 51% Establishment
Zhejiang information
Zhejiang Province
Province
Xi'an City,
Xi'an City, Shaanxi Electronics and
Xi'an Dahua Shaanxi 100% Establishment
Province information
Province
Electronics and
Wuxi Ruipin Wuxi City Wuxi City 51% Establishment
information
Xiaoshan
District, Xiaoshan District,
Electronics and
Huaxuan Technology Hangzhou City, Hangzhou City, 100% Establishment
information
Zhejiang Zhejiang Province
Province
Xicheng District, Xicheng District, Electronics and
Beijing Huayue 100% Establishment
Beijing Beijing information
Putuo District, Putuo District, Electronics and
Shanghai Huashang 100% Establishment
Shanghai Shanghai information
Wucheng
Wucheng District,
District, Jinhua Electronics and
Dahua Jinzhi Jinhua City, 100% Establishment
City, Zhejiang information
Zhejiang Province
Province
Business
combination
Chengdu Chengdu Electronics and
Dahua Guangxun 100% not under
High-tech Zone High-tech Zone information
common
control
Zhoushan City,
Zhoushan City, Electronics and
Zhoushan Operation Zhejiang 58.8% Establishment
Zhejiang Province information
Province
Lijiang City, Lijiang City, Electronics and
Yunnan Zhili 90% Establishment
Yunnan Province Yunnan Province information
Liuzhou City, Liuzhou City,
Guangxi Dahua Guangxi Zhuang Guangxi Zhuang Electronics and
Technology Autonomous Autonomous information
Region Region
Binjiang District, Binjiang District, Electronics and
Dahua Storage 51% Establishment
Hangzhou Hangzhou information
Binjiang District, Binjiang District, Automobile
Huaruijie 51% Establishment
Hangzhou Hangzhou manufacturing
Longquanyi
Longquanyi Electronics and
Chengdu Zhilian District, 100% Establishment
District, Chengdu information
Chengdu
Longquanyi
Longquanyi Electronics and
Chengdu Zhian District, 100% Establishment
District, Chengdu information
Chengdu
Longquanyi
Longquanyi Electronics and
Chengdu Zhishu District, 100% Establishment
District, Chengdu information
Chengdu
Longquanyi
Longquanyi Electronics and
Chengdu Zhichuang District, 100% Establishment
District, Chengdu information
Chengdu
Dayi County, Dayi County, Electronics and
Chengdu Smart 90% Establishment
Chengdu Chengdu information
Wucheng
Wucheng District, Electronics and
Huakong Software District, Jinhua 100% Establishment
Jinhua City information
City
Binjiang District, Binjiang District, Electronics and
Huacheng Software 100% Establishment
Hangzhou Hangzhou information
Nanming
Nanming District, Electronics and
Guizhou Dahua District, Guiyang 100% Establishment
Guiyang City information
City
Zhengzhou City, Zhengzhou City, Electronics and
Henan Dahua 100% Establishment
Henan Province Henan Province information
Binjiang District, Binjiang District, Electronics and
Waythcan 45% (Note 6) Establishment
Hangzhou Hangzhou information
Zhengzhou Dahua Zhengzhou City, Zhengzhou City, Electronics and
Zhian Henan Province Henan Province information
Electronics and
Dahua Hong Kong Hong Kong Hong Kong 100% Establishment
information
Electronics and
Dahua USA USA USA 100% Establishment
information
Electronics and
Dahua Europe Netherlands Netherlands 100% Establishment
information
United Arab United Arab Electronics and
Dahua Middle East 100% Establishment
Emirates Emirates information
Electronics and
Dahua Mexico Mexico Mexico 100% Establishment
information
Electronics and
Dahua Chile Chile Chile 100% Establishment
information
Electronics and
Dahua Colombia Columbia Columbia 100% Establishment
information
Electronics and
Dahua Australia Australia Australia 100% Establishment
information
Electronics and
Dahua Singapore Singapore Singapore 100% Establishment
information
Electronics and
Dahua South Africa South Africa South Africa 100% Establishment
information
Electronics and
Dahua Peru Peru Peru 100% Establishment
information
Electronics and
Dahua Brazil Brazil Brazil 100% Establishment
information
Electronics and
Dahua Russia Russia Russia 100% Establishment
information
Electronics and
Dahua Canada Canada Canada 100% Establishment
information
Electronics and
Dahua Panama Panama Panama 100% Establishment
information
Electronics and
Dahua Hungary Hungary Hungary 100% Establishment
information
Electronics and
Dahua Poland Poland Poland 100% Establishment
information
Electronics and
Dahua Tunisia Tunisia Tunisia 100% Establishment
information
Electronics and
Dahua Kenya Kenya Kenya 100% Establishment
information
Electronics and
Dahua UK UK UK 100% Establishment
information
Electronics and
Dahua Bulgaria Bulgaria Bulgaria 100% Establishment
information
Electronics and
Dahua Serbia Serbia Serbia 100% Establishment
information
Electronics and
Dahua Germany Germany Germany 100% Establishment
information
Electronics and
Dahua Malaysia Malaysia Malaysia 100% Establishment
information
Electronics and
Dahua Korea South Korea South Korea 100% Establishment
information
Electronics and
Dahua Indonesia Indonesia Indonesia 67% Establishment
information
Electronics and
Dahua India India India 100% Establishment
information
Electronics and
Dahua Turkey Turkey Turkey 100% Establishment
information
Electronics and
Dahua Czech Czech Republic Czech Republic 100% Establishment
information
Electronics and
Dahua Argentina Argentina Argentina 100% Establishment
information
Electronics and
Dahua Spain Spain Spain 100% Establishment
information
Electronics and
Dahua Kazakhstan Kazakhstan Kazakhstan 100% Establishment
information
Electronics and
Dahua Denmark Denmark Denmark 100% Establishment
information
Electronics and
Dahua France France France 100% Establishment
information
Dahua Lorex (US) Electronics and
USA USA 100% Establishment
Corporation information
Dahua Technology Electronics and
Hong Kong Hong Kong 100% Establishment
Holdings information
Electronics and
Dahua Morocco Morocco Morocco 100% Establishment
information
Business
combination
Dahua Technology Electronics and
Italy Italy 100% not under
Italy information
common
control
Electronics and
Dahua Uzbekistan Uzbekistan Uzbekistan 100% Establishment
information
Electronics and
Dahua Netherlands Netherlands Netherlands 100% Establishment
information
Electronics and
Dahua Sri Lanka Sri Lanka Sri Lanka 100% Establishment
information
Business
combination
Dahua Lorex Electronics and
Canada Canada 100% not under
(Canada) Corporation information
common
control
Electronics and
Dahua Pakistan Pakistan Pakistan 100% Establishment
information
Electronics and
Dahua New Zealand New Zealand New Zealand 100% Establishment
information
Electronics and
Dahua Thailand Thailand Thailand 99.98% Establishment
information
Electronics and
Dahua Romania Romania Romania 100% Establishment
information
Electronics and
Dahua Nigeria Nigeria Nigeria 100% Establishment
information
Electronics and
Dahua Israel Israel Israel 100% Establishment
information
Electronics and
Dahua Mexico Mexico Mexico 100% Establishment
information
Electronics and
Imou Netherlands Netherlands Netherlands 100% Establishment
information
Dahua Loris (UK) Electronics and
UK UK 100% Establishment
Corporation information
Electronics and
Dahua Japan Japan Japan 100% Establishment
information
Electronics and
Dahua Qatar Qatar Qatar 100% Establishment
information
Electronics and
Imou Hong Kong Hong Kong Hong Kong 100% Establishment
information
Dahua Panama SEM
Electronics and
Regional Panama Panama 100% Establishment
information
Headquarters
Explanations on the fact that the proportion of the shares held by a subsidiary differs from that of voting rights:
(1) The company directly holds 45% of the equity of Hangzhou Xiaohua Technology Limited, and Zhejiang Huashi
Investment Management Limited grants 12% of its voting rights to the company according to the agreement. The
company actually holds 57% of the voting rights of Hangzhou Xiaohua Technology Limited, which constitutes actual
control and include it in the scope of consolidation.
(2) According to the industrial and commercial registration data, CDB Development Fund holds the equity of the company.
According to the cooperation agreement between the company and CDB Development Fund, CDB Development Fund
shall not assign directors, supervisors and other senior managers to Dahua Zhilian; regarding its investment, the company
shall pay the investment income with an annualized rate of return of 1.2% to CDB Development Fund every year by
means of dividend and repurchase premium, etc., and the company shall redeem the equity of CDB Development Fund to
Dahua Zhilian phase by phase from 2022 to 2024, and the company regards its investment amount as other non-current
liabilities. The company actually holds 100% voting rights and interests of Dahua Zhilian.
(3) On April 30, 2021, the registered capital of Zhejiang Huarui Technology Limited increased from RMB 50 million to RMB
Huarui Technology, the original 51% equity of Huarui Technology held by the Company was diluted to 45.9%. After the
equity dilution, the Company remained the largest shareholder of Huarui, and the remaining shareholders had a low and
diversified shareholding, and Huarui was still a subsidiary of the Company. On June 26, 2021, “Zhejiang Huarui
Technology Limited.” was renamed as “Zhejiang Huarui Technology Co., Ltd.”
(4) The company directly holds 45.50% of the equity of Zhejiang Huafei Intelligent Technology Limited, and at the same
time, Zhejiang Huashi Investment Management Limited grants 16% of the voting rights to the company according to the
agreement. The company actually holds 61.50% of the voting rights of Zhejiang Huafei Intelligent Technology Limited,
which constitutes actual control and includes it in the scope of consolidation.
(5) The company directly holds 45% of the equity of Guizhou Huayi Shixin Technology Limited, and at the same time,
Guizhou Yiyun Investment Limited grants 6% of the voting rights to the company according to the agreement. The
company actually holds 51% of the voting rights of Guizhou Huayi Shixin Technology Limited, which constitutes actual
control and includes it in the scope of consolidation.
(6) The company directly hold 45% equity of Zhejiang Huashi Zhijian Technology Limited, and at the same time, Ningbo
Hualing Investment Management Partnership (limited partnership) grants 40% of the voting rights held to the company in
accordance with the agreement. The company effectively holds 85% of the voting rights of Zhejiang Huashi Zhijian
Technology Limited, which constitutes actual control and includes it in the scope of consolidation.
has working control over the subsidiary
(1) Explanation of the changes in the shareholder's equity in the subsidiaries
On April 30, 2021, the registered capital of Zhejiang Huarui Technology Limited increased from RMB 50 million to RMB
Huarui Technology, the original 51% equity of Huarui Technology held by the Company was diluted to 45.9%. After the
equity dilution, the Company remained the largest shareholder of Huarui, and the remaining shareholders had a low and
diversified shareholding. Huarui was still a subsidiary of the Company, and included in the scope of consolidation.
(1) Financial summary of non-essential joint ventures and affiliates
Unit: RMB
Closing balance / accrual of current Balance at the Start of the Period /
period accrual of previous period
Joint ventures: -- --
The total count of the following items
-- --
based on the shareholding ratios
Affiliates: -- --
Total book value of investments 820,449,863.74 455,977,616.16
The total count of the following items
-- --
based on the shareholding ratios
--Net profit -155,395,120.84 -44,335,467.10
--Other comprehensive income -1,835,013.29 -63,899.99
--Total comprehensive income -157,230,134.13 -44,399,367.09
X. Risks Relating to Financial Instruments
The company faces various financial risks in the course of operation: credit risk, liquidity risk and market risk
(including exchange rate risk, interest rate risk and other price risks).
The overall objective of the Company's risk management is to formulate risk management policies that can minimize risks
without affecting the Company's competitiveness and adaptability to changes too much.
(一) Credit risk
Credit risk refers to the risk of financial loss to the company due to the failure of the counterparty to perform its
contractual obligations. The Company is mainly facing with the customer credit risk arising from sales on account. Before
signing a new contract, the Company will assess the new customer's credit risk, including external credit rating and the
credibility letter from a bank under some circumstances (if such information is available). The Company has set a credit
limit for sales on account for each customer. Such limit shall be the maximum amount with no additional approval needed.
The Company ensures that the overall credit risk is within the controllable range through quarterly monitoring of credit
ratings of existing customers, and monthly review of aging analysis on accounts receivable. When monitoring customers'
credit risk, the Company groups them according to their credit characteristics. The customers rated as "high risk" will be
placed in the list of restricted customers, and the company can sell on credit to such company in the future only with
additional approval, otherwise they must make relevant payment in advance.
For overseas customers, the Company mainly uses wire transfer as a payment method. According to the credit
evaluation of each customer, the Company gives different credit lines and credit account periods, and agrees on the
payment method and account period in the commodity procurement contract between the two parties. After the sales of
products, the Company has a dedicated person responsible for tracking, reconciliation, and payment reminding. In
addition, the Company introduced export credit insurance to ensure that the return risk from overseas customers is within
controllable range.
(Ⅱ) Liquidity risk
Liquidity risk refers to the risk of capital shortage when an enterprise performs its obligation to settle by cash or other
financial assets.
The Company's policy is to ensure that there is sufficient cash to repay the liabilities due. The liquidity risk is under the
concentrated control of the Company's Financial Department. By monitoring the cash balance, negotiable securities
available for cash at any time and rolling forecast of cash flow in the next 12 months, the financial department ensures that
the company has sufficient funds to repay its debts under all reasonable forecasts.
The financial liabilities of the Company are listed as follows based on the undiscounted contractual cash flow:
Item June 30, 2021
Within 1 year More than 1 year Total
Short-term loan 1,104,598,520.22 1,104,598,520.22
Notes Payable 3,610,134,581.74 3,610,134,581.74
Accounts Payable 6,781,697,701.64 6,781,697,701.64
Other Payables 717,772,801.38 717,772,801.38
Non-current Liabilities Due
within 1 Year
Lease Liabilities 111,686,035.50 111,686,035.50
Long-term loan 1,903,000,000.00 1,903,000,000.00
Total 12,482,108,719.94 2,014,686,035.50 14,496,794,755.44
Item December 31, 2020
Within 1 year More than 1 year Total
Short-term loan 250,177,083.34 250,177,083.34
Notes Payable 3,258,552,758.17 3,258,552,758.17
Accounts Payable 6,444,787,705.28 6,444,787,705.28
Other Payables 970,552,877.22 970,552,877.22
Non-current Liabilities Due 151,891,709.34 151,891,709.34
within 1 Year
Long-term loan 878,000,000.00 878,000,000.00
Total 11,075,962,133.35 878,000,000.00 11,953,962,133.35
(Ⅲ) Market risk
Market risk of financial instruments refers to the risk that the fair value or future cash flow of financial instruments
fluctuates due to changes in market prices, including exchange rate risk, interest rate risk and other price risks.
Interest rate risk refers to the risk that the fair value or future cash flow of financial instruments fluctuates due to
changes in market interest rates. The interest rate risk faced with by the Company is mainly from bank loans. The
Company's assets and liabilities relating to interest rate are respectively bank deposits and short-term loans, whose
interest rate risk is low.
Exchange rate risk refers to the risk that the fair value or future cash flow of financial instruments fluctuates due to
changes in foreign exchange rates. The Company will try its best to match the revenues with the expenses in foreign
currency, to lower the exchange rate risk. In addition, the Company may also sign forward foreign exchange contracts or
currency swap contracts to avoid exchange rate risks.
The exchange rate risk faced with by the Company is mainly from financial assets and liabilities in USD. The amounts
of assets and liabilities in foreign currencies and converted into RMB are listed as below:
Item Balance at the End of the Period Balance at the Start of the Period
USD Other foreign Total USD Other foreign Total
currencies currencies
Cash and 1,786,420,928.29 535,775,944.04 2,322,196,872.33 2,066,290,327.08 722,490,474.86 2,788,780,801.94
Bank
Balances
Accounts 2,676,125,688.48 1,137,493,473.51 3,813,619,161.99 2,758,289,939.69 1,026,362,106.74 3,784,652,046.43
receivable
Accounts 1,538,959,201.61 126,180,451.19 1,665,139,652.80 1,435,207,173.38 78,343,376.34 1,513,550,549.72
Payable
Total 6,001,505,818.38 1,799,449,868.74 7,800,955,687.12 6,259,787,440.15 1,827,195,957.94 8,086,983,398.09
XI. Disclosure of Fair Values
Unit: RMB
Fair values at period-end
First level Second level Third level
Item
measurement measurement at fair measurement at Total
ata fair value value fair value
I. Constant measurement at fair value -- -- -- --
(Ⅰ). Trading financial assets 9,614,978.97 9,614,978.97
Financial assets measured at fair value and
whose changes are included in current
profits and losses
(1) Debt instrument investment
(2) Equity instrument investment
(3) Derivative financial assets 8,144,978.97 8,144,978.97
(4) Others 1,470,000.00 1,470,000.00
measured at fair value and whose changes
are included in current profits and losses
(1) Debt instrument investment
(2) Equity instrument investment
(Ⅱ) Other creditor's rights investment
(Ⅲ) Other equity instrument investment
(Ⅳ) Investment property
transfer after appreciation
(Ⅴ) Biological assets
(Ⅵ) Accounts receivables financing 901,192,858.59 901,192,858.59
(Ⅶ) Other non-current financial assets 937,923,581.60 937,923,581.60
Total assets constantly measured at fair
value
(Ⅵ) Trading financial liabilities 450,897.52 450,897.52
Including: Issued trading bonds
Derivative Financial Liabilities 450,897.52 450,897.52
Others
(Ⅶ) Financial liabilities designated to be
measured at fair value and included in
current profits or losses
Total amount of liabilities constantly 450,897.52 450,897.52
measured at their fair values
II. Non-constant measurement at fair values -- -- -- --
(Ⅰ) Assets held for sale
Total assets not continuously measured at
fair value
Total liabilities not continuously measured at
fair value
parameters for continuous and non-continuous second-level fair value measurements
The fair value of derivative financial assets shall be recognized according to the difference between the quotation of
forward foreign exchange settlement and the forward foreign exchange price;
Due to the short remaining term of the receivables financing, the book value is close to the fair value, and the nominal
amount is used as the fair value.
parameters for continuous and non-continuous third-level fair value measurements
Evaluate the value and net book assets based on the income method and asset-based method.
The fair value of financial assets and financial liabilities measured by the Company at amortized cost is equivalent to the
book value.
XII. Related Parties and Related-party Transactions
Shareholding ratio Proportion of
Name of parent Registered
Business Nature Registered Capital of the parent voting rights of the
company Address
company parent company
Fu Liquan 34.18% 34.18%
Chen Ailing 2.38% 2.38%
The ultimate controllers of the Company are Mr. Fu Liquan and Ms. Chen Ailing.
For details of subsidiaries of the Company, see Note "IX. Equities in other entities".
Here is the information about joint ventures and affiliates that have related-party transactions with the Company in the
current period or have balance from related-party transactions with the Company in the previous period:
Names of joint ventures and affiliates Relationship with the Company
Intelbras S.A. Affiliate
Guangdong Dahua Zhishi Technology Limited (Note 1) Affiliate
Lishui Dahua Intelligent Technology Co., Ltd. Affiliate
Ningbo Dahua Anbang Security Services Co., Ltd. Affiliate
Shaoxing Dahua Security Services Co., Ltd. Affiliate
Shenzhen Congwen Security Electronics Limited (Note 2) Affiliate, such relationship was terminated in June 2021.
Taizhou Dahua Security Services Co., Ltd. Affiliate
Wenzhou Dahua Security Services Co., Ltd. Affiliate
Zhejiang Zhian Internet of Things Technology Co., Ltd.
Affiliate
(Note 3)
Zhejiang Leapmotor Technology Limited and its affiliates Affiliate, and enterprise controlled by the Company's actual
(Note 4) controller
China Standard Intelligent Security Technology Co., Ltd. Affiliate
Ruicity Digital Technology Co., Ltd. and its affiliates (Note 5) Affiliate
Zhoushan Dahua Technology Co., Ltd. Affiliate
Digital Dongyang Technology Operation Co., Ltd. Affiliate
Hangzhou Juhuanyan Information Technology Co., Ltd. Affiliate
Other notes
Note 1: On July 6, 2021, Zhejiang Dahua Technology Co., Ltd. transferred all the shares held by Guangdong Dahua Zhishi
Technology Limited to Zhejiang Huashi Zhijian Technology Limited, a subsidiary within the scope of consolidation.
"Guangdong Dahua Zhishi Technology Limited" was renamed "Guangdong Zhishi Digital Technology Limited".
Note 2: Shenzhen Congwen Security Electronics Limited is an affiliate company of the company. The company
transferred its equity in June2020, but within 12 months, Shenzhen Congwen Security Electronics Limited was still
recognized as the company's associated legal person of the company, the relationship ended in June 20216.
Note 3: On April 28, 2021, “Zhejiang Dahua Zhian Internet of Things Technology Co., Ltd.” was renamed as “Zhejiang
Zhian Internet of Things Engineering Co., Ltd.”
Note 4: On April 30, 2021, “Zhejiang Leapmotor Technology Limited” was renamed as “Zhejiang Leapmotor Technology
Co., Ltd.” “Zhejiang Leapmotor Technology Co., Ltd. and its affiliates” include a total of five companies, namely Leapmotor
Automobile Limited, Hangzhou Leapmotor Automobile Sales Service Limited, Zhejiang Youchong New Energy
Technology Limited, Wuhan Lingchao Automobile Sales Service Limited, and Zhejiang Leapmotor Automobile Sales
Service Limited, which have related transactions with the Company.
Note 5: “Ruicity Digital Technology Co., Ltd. and its affiliates” include Ruicity Digital Technology Co., Ltd. and its subsidiary
Ruicity (Shandong) Digital Technology Co., Ltd.
Relationship between the Company and other related
Names of other related parties
parties
Enterprises controlled by spouses of senior executives of
Hangzhou Nuojia Technology Co., Ltd.
the company
Enterprise significantly influenced by the senior manager of
Hangzhou Xunwei Robotics Technology Co., Ltd.
the Company
Enterprise controlled by the senior manager of the
Hangzhou Xintu Technology Co., Ltd.
Company
Ningbo Hualing Investment Management Partnership
Enterprise controlled by actual controller
(Limited Partnership)
Ningxia Shendun Security Services Co., Ltd. Subsidiary of a company with shares held by the Company
Zhejiang Huanuokang Technology Co., Ltd. Company controlled by the Company's actual controller
Enterprise controlled by the senior manager of the
Zhejiang Lancable Technology Co., Ltd.
Company
Zhoushan Weixin Equity Investment Partnership (Limited Enterprises in which the actual controller has significant
Partnership) influence
Zhoushan Zhixin Equity Investment Partnership (Limited
Enterprise controlled by actual controller
Partnership)
Enterprises in which the actual controller has significant
Zhejiang Huatu Microchip Technology Limited (Note 1)
influence
Enterprises in which the actual controller has significant
Zhejiang Xinsheng Electronic Technology Limited (Note 1)
influence
Zhoushan Dahua Security Service Limited Subsidiary of the affiliate
South-North United Information Technology Co., Ltd. (Note This company shall end its affiliate relationship within the
Enterprises over which the previous senior executives have
Wangsu Technology Co., Ltd. (Note 3)
significant influence
Zhejiang Huashi Investment Management Co., Ltd. Enterprise controlled by actual controller
Zhejiang Zhihua IOT Technology Limited Subsidiaries of affiliates
Hangzhou Xianmai Technology Limited Enterprise controlled by actual controller
Enterprises over which the previous senior executives have
Zhejiang Nuojia Biotechnology Co., Ltd.
significant influence
China Mobile Communications Group Co., Ltd. and its
Groups that have important influence on the company
affiliates (Note 4)
Other notes
Note 1: Zhejiang Huatu Microchip Technology Limited and Zhejiang Xinsheng Electronic Technology Limited were
disposed by Dahua in July 2020, after the disposal, however, they remain enterprises in which the actual controller has
significant influence.
Note 2: South-North United Information Technology Co., Ltd. was disposed by Dahua in 2020, but within the 12 months
after the disposal, South-North United Information was till recognized as the company's associated legal person, and the
relationship ended in April 2021.
Note 3: Huang Siying, the original independent director of the company, served as a director of Wangsu Technology
Limited and left his post in August 2020, within the 12 months of her departure, Wangsu Technology Co., Ltd was still
recognized as the company's associated legal person.
Note 4: The company signed a share subscription agreement with effective conditions with China Mobile Capital Holdings
Co., Ltd., a wholly-owned subsidiary of China Mobile Communications Group Co., Ltd., on March 26, 2021, and signed
the "Strategic Cooperation Agreement with Effective Conditions" with China Mobile Communications Group Co., Ltd. and
China Mobile Capital Holdings Co., Ltd. After the completion of this non-public offering, China Mobile Capital will hold
more than5% of the shares of the company. According to the "Shenzhen Stock Exchange Stock Listing Rules", as a result
of signing agreements or arrangements with the listed company or its affiliates, the entity directly or indirectly holding more
than 5％ of the shares of the listed company after the agreement or arrangement takes effect or within the next 12 months
is regarded as the related party of the listed company. Therefore, the company has a related relationship with China
Mobile Communication Group Co., Ltd. and its affiliated companies since March 26, 2021.
(1) Related-party transactions involving purchase and selling of merchandise and provision and
acceptance of labor services
Merchandise purchase and acceptance of labor services
Unit: RMB
Previous
Content of the This Period's Over the
Approved Period's
Related parties related - party Amount of transaction limit or
transaction limit Amount of
transaction Occurrence not
Occurrence
Zhejiang Leapmotor
Purchase of
Technology Co., Ltd and its 35,679.20 No 1,362,577.05
materials
affiliates
Material
Hangzhou Xunwei Robotics procurement,
Technology Co., Ltd. acceptance of
service
Hangzhou Nuojia Technology Acceptance of
Co., Ltd. services
Zhejiang Huanuokang Purchase of
Technology Co., Ltd. materials
Zhoushan Dahua Security Acceptance of
Service Limited services
Shenzhen Conwin Security Acceptance of
Electronics CO., Ltd. services
Material
procurement,
Others 136,955,034.68
acceptance of
service
Sales of merchandise and provision of services
Unit: RMB
Previous Period's
Content of the related - This Period's Amount
Related parties Amount of
party transaction of Occurrence
Occurrence
Zhejiang Leapmotor Technology Co., Ltd and
Sales of merchandise 25,154,144.53 1,600,748.70
its affiliates
Ningbo Dahua Anbang Security Services Co.,
Sales of merchandise 609,380.47 74,075.23
Ltd.
Zhoushan Dahua Technology Co., Ltd. Sales of merchandise 80,051.32 12,183.18
Wenzhou Dahua Security Services Co., Ltd. Provision of services 23,584.91
Sales of merchandise and
Hangzhou Xintu Technology Co., Ltd. 236,264.22 236,913.67
provision of services
Shenzhen Conwin Security Electronics CO.,
Sales of merchandise 378,258.42
Ltd.
Guangdong Dahua Zhishi Technology Co., Ltd. Sales of merchandise 12,724,922.75 4,684,747.26
Intelbras S.A. Sales of merchandise 303,183,526.51 126,462,175.51
Hangzhou Xunwei Robotics Technology Co.,
Sales of merchandise 11,469.03 14,159.28
Ltd.
Zhejiang Lancable Technology Co., Ltd. Sales of merchandise -56,034.48
Sales of merchandise and
Hangzhou Nuojia Technology Co., Ltd. 45,893.80 104,055.89
provision of services
China Standard Intelligent Security Technology
Sales of merchandise 1,327.43 62,220.38
Co., Ltd.
Zhejiang Huanuokang Technology Co., Ltd. Sales of merchandise 1,471,146.02 292,228.09
Ruicity Digital Technology Co., Ltd. and its Sales of merchandise and
affiliates provision of services
Taizhou Dahua Security Services Co., Ltd. Sales of merchandise 69.03
Zhejiang Zhihua IOT Technology Limited Sales of merchandise 14,867.26
Zhejiang Nuojia Biotechnology Co., Ltd. Sales of merchandise 7,522.13
Sales of merchandise and
Others 59,132,012.56
provision of services
(2) Related leasing
The Company being the lessor:
Unit: RMB
Type of the leased Rental income confirmed in Rental income confirmed
Name of the lessee
assets this period in the previous period
Zhejiang Leapmotor Technology Co., Buildings and
Ltd. constructions
China Standard Intelligent Security Buildings and
Technology Co., Ltd. constructions
South-North United Information Buildings and
Technology Co., Ltd. constructions
Ruicity Digital Technology Co., Ltd. Transportation
and its affiliates equipment
Transportation
Others 15,044.25
equipment
(3) Related guarantee
The Company being the guarantor:
Unit: RMB
Guarantee
Guarantee fulfilled
Secured parties Starting date Maturity date
Amount completely
or not
Zhejiang Dahua Vision Two years after the maturity of the
Technology Co., Ltd. debts in the master contract
Zhejiang Dahua Vision
Technology Co., Ltd.
Zhejiang Dahua Vision
Technology Co., Ltd. September 21, Two years after the maturity of the
(guarantee currency is US 2018 debts in the master contract
dollar)
Zhejiang Dahua Vision
Technology Co., Ltd.
Zhejiang Dahua Vision Two years after the maturity of the
Technology Co., Ltd. debts in the master contract
Zhejiang Dahua Vision September 29, Three years after the maturity of
Technology Co., Ltd. 2019 the debts in the master contract
Zhejiang Dahua Vision 250,000,000.00 February 17, 2020 Two years after the maturity of the No
Technology Co., Ltd. debts in the master contract
Zhejiang Dahua Vision Three years after the maturity of
Technology Co., Ltd. the debts in the master contract
Zhejiang Dahua Vision
Technology Co., Ltd.
Zhejiang Dahua Vision Two years after the maturity of the
Technology Co., Ltd. debts in the master contract
Zhejiang Dahua Vision Two years after the maturity of the
Technology Co., Ltd. debts in the master contract
Zhejiang Dahua Vision Two years after the maturity of the
Technology Co., Ltd. debts in the master contract
Zhejiang Dahua Vision Two years after the maturity of the
Technology Co., Ltd. debts in the master contract
Zhejiang Dahua Vision Five years upon expiration of debt
Technology Co., Ltd. period of master contract
Zhejiang Dahua Vision September 27, Three years after the maturity of
Technology Co., Ltd. 2020 the debts in the master contract
Zhejiang Dahua Vision Three years after the maturity of
Technology Co., Ltd. the debts in the master contract
Zhejiang Dahua Vision Three years after the maturity of
Technology Co., Ltd. the debts in the master contract
Zhejiang Dahua Vision
Technology Co., Ltd.
Zhejiang Dahua Vision
Technology Co., Ltd.
Additional three years from the
effective date of the commitment
Zhejiang Dahua Vision letter to the maturity date of each
Technology Co., Ltd. note discounted by China
Merchants Bank during the credit
period
Zhejiang Dahua Zhilian Co.,
Ltd.
Zhejiang Dahua Zhilian Co., Two years after the maturity of the
Ltd. debts in the master contract
Zhejiang Dahua Zhilian Co., One years upon expiration of debt
Ltd. period of master contract
Zhejiang Dahua Zhilian One years upon expiration of debt
Limited (guaranteed currency period of master contract
is USD)
Zhejiang Dahua Zhilian Co., Two years after the maturity of the
Ltd. debts in the master contract
Zhejiang Dahua Zhilian Co., September 25, Two years after the maturity of the
Ltd. 2020 debts in the master contract
Zhejiang Dahua Zhilian Co., September 27, Three years after the maturity of
Ltd. 2020 the debts in the master contract
Zhejiang Dahua Zhilian Co., September 29, Three years after the maturity of
Ltd. 2020 the debts in the master contract
Zhejiang Dahua Zhilian Co., One years upon expiration of debt
Ltd. period of master contract
Zhejiang Dahua Zhilian
Limited (guaranteed currency 60,000,000.00 May 1, 2021 April 30, 2022 No
is USD)
Zhejiang Dahua Zhilian
Limited (guaranteed currency 55,000,000.00 April 30, 2021 May 14, 2022 No
is USD)
Additional three years from the
effective date of the commitment
Zhejiang Dahua Zhilian Co., letter to the maturity date of each
Ltd. note discounted by China
Merchants Bank during the credit
period
Zhejiang Dahua System Two years after the maturity of the
Engineering Co., Ltd. debts in the master contract
Zhejiang Dahua System November 7, Two years after the maturity of the
Engineering Co., Ltd. 2019 debts in the master contract
Zhejiang Dahua System Three years after the maturity of
Engineering Co., Ltd. the debts in the master contract
Zhejiang Dahua System Two years after the maturity of the
Engineering Co., Ltd. debts in the master contract
Additional three years from the
effective date of the commitment
Zhejiang Dahua System letter to the maturity date of each
Engineering Co., Ltd. note discounted by China
Merchants Bank during the credit
period
Dahua Technology (HK)
November 25, Two years after the maturity of the
Limited (guarantee currency 7,000,000.00 No
is US dollar)
Dahua Technology (Hong
Kong) Limited (guaranteed 1,000,000.00 April 25, 2021 April 25, 2022 No
currency is euro)
DAHUA TECHNOLOGY
MEXICO S.A. DE C.V
(guaranteed currency is
USD)
DAHUA TECHNOLOGY
MEXICO S.A. DE C.V September 01,
(guaranteed currency is 2020
USD)
Hangzhou Huacheng
Two years after the maturity of the
Network Technology Co., 50,000,000.00 August 30, 2019 No
debts in the master contract
Ltd.
Hangzhou Huacheng
Three years after the maturity of
Network Technology Co., 100,000,000.00 February 26, 2020 Yes
the debts in the master contract
Ltd.
Hangzhou Huacheng
September 25, Two years after the maturity of the
Network Technology Co., 55,000,000.00 No
Ltd.
Hangzhou Huacheng
September 27, Three years after the maturity of
Network Technology Co., 50,000,000.00 No
Ltd.
Hangzhou Huacheng Six months upon expiration of the
Network Technology Co., 20,000,000.00 February 4, 2021 debt performance period of No
Ltd. master contract
Hangzhou Huacheng
Three years after the maturity of
Network Technology Co., 100,000,000.00 February 25, 2021 No
the debts in the master contract
Ltd.
Dahua Technology UK
Limited (guaranteed currency 1,160,000.00 August 12, 2020 Sign the termination notice No
is GBP)
Zhejiang HuaRay Three years after the maturity of
Technology Co., Ltd. the debts in the master contract
Zhejiang Dahua Vision
Technology Co., Ltd. Three years after the maturity of
(guaranteed currency is the debts in the master contract
USD)
Additional three years from the
Zhejiang Dahua Storage
Technology Co., Ltd.
letter to the maturity date of each
note discounted by China
Merchants Bank during the credit
period
Zhejiang Huachuang Vision Three years after the maturity of
Technology Co., Ltd. the debts in the master contract
Additional three years from the
effective date of the commitment
Zhejiang Fengshi Technology letter to the maturity date of each
Co., Ltd. note discounted by China
Merchants Bank during the credit
period
Additional three years from the
effective date of the commitment
Wuxi Dahua Ruipin letter to the maturity date of each
Technology Co., Ltd. note discounted by China
Merchants Bank during the credit
period
Additional three years from the
effective date of the commitment
Zhejiang Huafei Intelligent letter to the maturity date of each
Technology CO., LTD. note discounted by China
Merchants Bank during the credit
period
Additional three years from the
effective date of the commitment
Zhejiang Huaxiao letter to the maturity date of each
Technology Co., Ltd. note discounted by China
Merchants Bank during the credit
period
Additional three years from the
effective date of the commitment
Zhejiang Dahua Jinzhi letter to the maturity date of each
Technology Co., Ltd. note discounted by China
Merchants Bank during the credit
period
Additional three years from the
effective date of the commitment
Xi'an Dahua Zhilian letter to the maturity date of each
Technology Co., Ltd. note discounted by China
Merchants Bank during the credit
period
(4) Asset transfer and debt restructuring of related parties
Unit: RMB
Content of the related - This Period's Amount Previous Period's
Related parties
party transaction of Occurrence Amount of Occurrence
Zhejiang Huanuokang Technology Co., Ltd. Selling of fixed assets 64,475.38
Ruicity Digital Technology Co., Ltd. and its
Selling of fixed assets 112,127.64 142,819.61
affiliates
Zhejiang Leapmotor Technology Co., Ltd
Procurement of fixed assets 1,157,719.80 196,477.09
and its affiliates
(5) Remuneration for key management personnel
Unit: RMB
Item This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Salary of key management personnel 5,430,399.52 6,528,420.50
(6) Other related-party transactions
the "Proposal on Joint Capital Increase and Related Party Transactions", and agreed that the Company and related
parties Zhang Xingming, He Chao, Ningbo Huaqi Investment Management Partnership (Limited Partnership), Hangzhou
Kangpi Enterprise Management Partnership (Limited Partnership) and non-related party Yao Weizhong to sign the
"Agreement on Equity Transfer and Capital Increase of Zhejiang Healnoc Technology Co., Ltd.". The Company and
related parties Zhang Xingming, He Chao, Ningbo Huaqi Investment Management Partnership (Limited Partnership),
Hangzhou Kangpi Enterprise Management Partnership (Limited Partnership) and non-related party Yao Weizhong
contributed RMB 50 million in total to Zhejiang Healnoc Technology Co., Ltd. (referred to as "Healnoc") as capital increase.
Among them, the Company invested RMB 20 million of its own funds, holding 20% of Healnoc equity, and Healnoc
became a shareholding company. The change of industrial and commercial registrations for the above matter was
completed in February 2021.
on Giving up Shareholding Companies' Equity Increase Rights and Related Party Transactions”. A total of 14 investors,
including Zhu Jiangming, Gao Dong, Chen Jinxia, and Ningbo Huaqi Investment Management Partnership (Limited
Partnership), made a B-1 round of capital increase in Leapmotor Technology. The related transaction amount involved in
companies giving up the right to increase capital in the same proportion was RMB 458.459 million. The change of
industrial and commercial registrations for the above matter was completed in January 2021.
the “Proposal on Giving up Shareholding Companies' Equity Increase Rights and Related Party Transactions”. A total of
(Limited Partnership), intended to make a B-2 round of capital increase in Leapmotor. The amount of related party
transactions involved in the companies' giving up the right to increase capital in the same proportion was RMB
the Same Proportion and Related Transaction" was deliberated and approved at the Fourteenth Meeting of the Seventh
Session of the Board of Directors of the Company, in which a total of 5 investors, including CICC Huarui Technology
Employee Shareholding No. 1 Single Asset Management Plan, intended to increase capital to Zhejiang Huarui
Technology Co., Ltd., with a total capital increase of RMB 9,545,783. Based on the shareholding structure after the
above capital increase, Ningbo Huayu Investment Management Partnership (Limited Partnership), shareholder of Huarui
Technology, intended to transfer its 44.10% shareholding of Huarui Technology to a total of 24investors including CICC
Huarui Technology Employee Shareholding No. 1Single Asset Management Plan, at a total price of RMB 244,309,237.
The Company waived the preferential subscription right and the preemptive right to purchase the above-mentioned equity
interests. The change of industrial and commercial registrations for the above matter was completed in April 2021.
and approved at the Sixteenth Meeting of the Seventh Board of Directors of the Company, which agreed that the
Company and the related legal person Zhejiang Huashi Investment Management Co., Ltd. jointly increased the capital of
the holding subsidiary Zhejiang Huaxiao Technology Co., Ltd. in the same proportion. The company increased its capital
by RMB10.2 million with its own funds, and after the completion of the capital increase, the registered capital of Huaxiao
Technology increased from RMB 50 million to RMB 70 million. The change of industrial and commercial registrations for
the above matter was completed in June 2021.
with Related Parties" was deliberated and approved at the Eighteenth Meeting of the Seventh Session of the Board of
Directors of the Company, which agreed to establish Zhoushan Huayan Chuangxi Equity Investment Partnership (Limited
Partnership) with a total of 19 investors, including Huayan Capital (Hangzhou) Private Equity Fund Management Co., Ltd.
The form of the Industrial Fund is a limited partnership with a total fund scale of RMB 150.1 million; Huayan Capital, as the
fund manager, contributes RMB 100,000 in currency, holding 0.07% of the shares, and Dahua Shares contributes RMB 50
million in currency, holding 33.32% of the shares. The matter is still in progress.
(1) Receivables
Unit: RMB
Balance at the End of the
Balance at the Start of the Period
Period
Item Name Related parties
Bad debt
Book balance Book balance Bad debt provision
provision
Accounts Zhejiang Leapmotor Technology
receivable Co., Ltd and its affiliates
Accounts Zhejiang Zhian Internet of Things
receivable Engineering Co., Ltd.
Accounts Guangdong Dahua Zhishi
receivable Technology Co., Ltd.
Accounts Ningbo Dahua Anbang Security
receivable Services Co., Ltd.
Accounts Hangzhou Xintu Technology Co.,
receivable Ltd.
Accounts Hangzhou Xunwei Robotics
receivable Technology Co., Ltd.
Accounts Hangzhou Nuojia Technology Co.,
receivable Ltd.
Accounts China Standard Intelligent Security
receivable Technology Co., Ltd.
Accounts Zhejiang Huanuokang Technology
receivable Co., Ltd.
Accounts
Intelbras S.A. 195,449,590.28 9,772,606.21 208,554,357.60 10,427,717.88
receivable
Accounts Shaoxing Dahua Security Services
receivable Co., Ltd.
Accounts South-North United Information
receivable Technology Co., Ltd.
Accounts Ruicity Digital Technology Co., Ltd.
receivable and its affiliates
Accounts Hangzhou Juhuanyan Information
receivable Technology Co., Ltd.
Accounts Zhoushan Dahua Technology Co.,
receivable Ltd.
Accounts 132,288,139.25 9,113,249.13 2,228,554.7 111,428.76
Others
receivable
Prepaymen
Others 20,195,635.70 9,430,662.05
t
Prepaymen Zhejiang Leapmotor Technology
t Co., Ltd and its affiliates
Other
Shenzhen Conwin Security
Receivable 8,000.00 400.00
Electronics CO., Ltd.
s
Other Ningbo Hualing Investment
Receivable Management Partnership (Limited 107,800,000.00 5,390,000.00 107,800,000.00 5,390,000.00
s Partnership)
Other Zhoushan Weixin Equity
Receivable Investment Partnership (Limited 62,720,000.00 3,136,000.00 62,720,000.00 3,136,000.00
s Partnership)
Other Zhoushan Zhixin Equity Investment
Receivable Partnership (Limited Partnership)
s
Other
Zhejiang Leapmotor Technology
Receivable 5,600.00 280.00
Co., Ltd and its affiliates
s
Other 1,247,969.22 299,940.46 54,751.47 2,737.57
Receivable Others
s
(2) Payables
Unit: RMB
Item Name Related parties Closing balance Opening book balance
Accounts Zhejiang Leapmotor Technology Co., Ltd
Payable and its affiliates
Accounts Ningxia Shendun Security Services Co.,
Payable Ltd.
Accounts
Hangzhou Nuojia Technology Co., Ltd. 1,863,441.59 2,371,466.69
Payable
Accounts
Zhejiang Huanuokang Technology Co., Ltd. 1,107,343.59 1,018,404.74
Payable
Accounts
Wangsu Technology Co., Ltd. 18,000.00 18,000.00
Payable
Accounts
Others 56,790,867.78
Payable
Contract
Hangzhou Nuojia Technology Co., Ltd. 353.98
liabilities
Contract Zhejiang Leapmotor Technology Co., Ltd
liabilities and its affiliates
Contract South-North United Information Technology
liabilities Co., Ltd.
Contract Ruicity Digital Technology Co., Ltd. and its
liabilities affiliates
Contract Hangzhou Juhuanyan Information
liabilities Technology Co., Ltd.
Contract
Zhejiang Zhihua IOT Technology Limited 2,830.19
liabilities
Contract
Hangzhou Xintu Technology Co., Ltd. 3,721.17
liabilities
Contract Others 1,478,163.34
liabilities
Other Zhejiang Leapmotor Technology Co., Ltd
Payables and its affiliates
Other
Others 720,000.00
Payables
XIII. Share-based payment
√ Applicable □ Not applicable
Unit: RMB
Total amount of equity instruments
granted by the Company in current -
period
Total amount of equity instruments 29,431,520 shares of restricted stock
exercised by the Company in current
period
Total amount of equity instruments of 1,028,860 shares of restricted stock
the Company invalidated in current
period
The first-grant price of restricted stock granted under the Restricted Stock
The range of the exercise prices of Incentive Plan in 2018 was RMB 8.17 per share, and the remaining term of the
other outstanding equity instruments contract was 20 months; the grant price of the reserved granted restricted stock
issued by Company at the end of the was 8.75 yuan per share, and the remaining term of the contract was 20 months.
period and the remaining contractual In 2020, the grant price of restricted stock granted under the Restricted Stock
term Incentive Plan is RMB 7.467 per share, the remaining period of the contract is 23
months.
√ Applicable □ Not applicable
Unit: RMB
The method for determining the fair value of equity Determined based on the stock price at the grant date
instruments on the day of granting and the grant cost of the restricted stocks
The basis for determining the amount of exercisable equity Estimated according to equity instruments held by the
instruments employees
Reason for the significant difference between the estimation
N/A
of current period and the previous period
The accumulated amount of equity-settled share-based
payment counted into the capital reserve
Amount of equity-settled share-based payment confirmed in
current period
□ Applicable √ Not applicable
XIV. Commitments and contingencies
Important commitments on the balance sheet day
As of June 30, 2021, the pledges of the company are as follows:
(1) On August 19, 2016,Xinjiang Dahua Zhixin Information Technology LLC, as a subsidiary, pledged its future accounts
receivable of RMB 351,064,980.00 incurred from the available service fee under the Franchise Agreement for the
Shihezi “Safe Shicheng” PPP Project and signed the Fixed Assets Loan Contract (Total Contract Amount: RMB
for the Company's loan (Loan Contract No.: 2016-01) amounting to RMB 230,000,000.00 (Term of Borrowing: from August,
balance of long-term receivables of RMB 178,385,721.02 and the balance of non-current assets of RMB 31,073,678.03
due within one year). The loan balance under the guarantee contract was RMB 128,000,000.00 (including the long-term
loans of RMB 103,000,000.00 and the non-current liabilities of RMB 25,000,000.00 due within one year).
(2) On June 28, 2019, Zhejiang Dahua Technology Co., Ltd. and Hangzhou Branch of Zheshang Bank Co., Ltd. entered
into the (33100000) ZSZCCZ (2019) No. 12373 Asset Pool Pledge Guarantee Contract (Contract Term: June 28, 2019 to
June 28, 2021). On June 29th, 2021, Zhejiang Dahua Technology Co., Ltd. and Hangzhou Branch of Zheshang Bank Co.,
Ltd. renewed the (33100000) ZSZCCZ (2021) No. 13431 Asset Pool Pledge Guarantee Contract (Contract Term: June 29,
Company, its subsidiary Zhejiang Dahua Vision Technology Co., Ltd., its subsidiary Zhejiang Dahua System Engineering
Co., Ltd., its subsidiary Guangxi Dahua Information Technology Co., Ltd. and Hangzhou Branch of Zheshang Bank Co.,
Ltd., with the maximum financing amount of the fund pledge pool not exceeding RMB 3 billion.
Under this note pool business, as of June 30, 2021, Zhejiang Dahua Technology Co., Ltd. has RMB 590,293,741.29 of
undue notes receivable (including RMB 580,000,000.00 of related party bills receivable within the consolidated scope), its
subsidiary Zhejiang Dahua Vision Technology Co., Ltd. has RMB 623,227,941.27 of undue notes receivable (including
RMB 100,000,000.00 of related party bills receivable within the consolidated scope), and its subsidiary Zhejiang Dahua
System Engineering Co., Ltd. has RMB 6,641,384.68 of undue notes receivable. Under the pledge, Zhejiang Dahua
Technology Co., Ltd. issued RMB 16,874,532.77 of bank acceptance bills, its subsidiary Zhejiang Dahua Vision
Technology Co., Ltd. issued RMB 1,148,501,714.35 of bank acceptance bills, and its subsidiary Zhejiang Dahua System
Engineering Co., Ltd. issued RMB 811,669.15 of bank acceptance bills.
(3) On November 23, 2020, Zhejiang Dahua Zhilian Co., Ltd. and Hangzhou Branch of Zheshang Bank Co., Ltd. entered
into the (33100000) ZSZCCZ (2020) No. 28875 Asset Pool Pledge Guarantee Contract (Contract Term: November 23,
Co., Ltd. renewed the (33100000) ZSZCCZ (2021) No. 14619 Asset Pool Pledge and Guarantee Contract (Contract Term:
from June 29, 2021 to June 29, 2022), to provide a guarantee for the Notes Pool Business Cooperation Agreement signed
by Zhejiang Dahua Zhilian Co., Ltd. and Zheshang Bank Co., Ltd. The financing amount for the fund pledge pool shall not
exceed RMB 0.5 billion.
Under this note pool business, as of June 30, 2021, Zhejiang Dahua Zhilian Co., Ltd. has RMB 23,719,523.56 of undue
notes receivable for issuing acceptance bills. Under the pledge, Zhejiang Dahua Zhilian Co., Ltd. issued RMB
（3）Zhejiang Dahua Technology Co., Ltd. and Hangzhou Branch of China Merchants Bank Co., Ltd. entered into the
Special Credit Agreement for Notes Pool Business, which promised a special credit line of RMB 2 billion for the notes pool
to be allocated to its subsidiaries: Zhejiang Dahua Vision Technology Co., Ltd., Zhejiang Dahua System Engineering Co.,
Ltd., Hangzhou Huacheng Network Technology Co., Ltd., Zhejiang Fengshi Technology Co., Ltd., Zhejiang HuaRay
Technology Co., Ltd., and Zhejiang Dahua Zhilian Co., Ltd. As of June 30, 2021, Zhejiang Dahua Technology Co., Ltd. has
RMB 2,702,695.15 of undue notes receivable, its subsidiary Zhejiang Dahua Vision Technology Co., Ltd. has RMB
consolidated scope), its subsidiary Hangzhou Huacheng Network Technology Co., Ltd. has RMB 553,230.00 of undue
notes receivable, and its subsidiary Zhejiang Fengshi Technology Co., Ltd. has RMB 2,530,000.00 of undue notes
receivable pledged for issuing bank acceptance bills. Under the pledge, its subsidiary Zhejiang Dahua Vision Technology
Co., Ltd. issued RMB 2,143,046.99 of bank acceptance bills, its subsidiary Hangzhou Huacheng Network Technology Co.,
Ltd. issued RMB 89,824,929.61 of bank acceptance bills, and its subsidiary Zhejiang Fengshi Technology Co., Ltd. issued
RMB 42,626,897.54 of bank acceptance bills.
(1) Important contingent matters on the balance sheet day
No important contingent matters on the balance sheet date
(2) Even if the company has no important contingencies to disclose, it shall give explanation
No important contingent matter needs to be disclosed by the Company.
XV. Events after the Balance Sheet Date
Events after the balance sheet date that do not need to be disclosed in the current period
XVI. Other Significant Events
(1) Basis for determining the reporting subsection and the accounting policy
The company determines its operating divisions based on the internal organizational structure, management
requirements and internal reporting system, etc. The company has only one operating division, namely the R & D,
production and sales of video IOT products. The accounting policy of the reporting subsection is consistent with that of the
Company.
(2) Financial information of the reporting subsection
Regional subsection
Unit: RMB
Item Operating income Operating Cost
Domestic 7,777,087,103.47 4,685,553,053.26
Overseas 5,727,918,630.42 3,225,161,875.71
Total 13,505,005,733.89 7,910,714,928.97
Product subsection
Unit: RMB
Item Operating income Operating Cost
Smart IoT products and 11,574,586,946.32 6,477,078,712.53
solutions
Of which: software business 551,302,402.99 163,767,869.40
Innovative business 1,197,068,199.15 805,660,868.12
Others 733,350,588.42 627,975,348.32
Total 13,505,005,733.89 7,910,714,928.97
XVII. Notes to Main Items in the Financial Statements of the Parent Company
(1) Categorical disclosure of accounts receivable
Unit: RMB
Balance at the End of the Period Balance at the Start of the Period
Book balance Bad debt provision Book balance Bad debt provision
Category
Accrued Book value Accrued Book value
Amount Percentage Amount Amount Percentage Amount
proportion proportion
Including:
Accounts receivables with
the bad debt provision 4,896,685,881.8
accrued based on 6
combinations
Including:
Portfolio 1: Related Parties 4,019,543,525.1
Portfolio 3
Portfolio 2: Aging Analysis
Portfolio
Total 4,989,564,802.09 100.00% 92,878,920.23 2,826,617,475.98 100.00% 86,465,236.63 2,740,152,239.35
Bad debt provision based on combinations
Unit: RMB
Balance at the End of the Period
Name
Book balance Bad debt provision Accrued proportion
Within 1 year 734,787,592.39 36,739,379.62 5.00%
Total 970,021,276.96 92,878,920.23 --
Please refer to the disclosing methods of other receivables for the information disclosure of bad debts provisions, if the
bad debt provisions of accounts receivable are made according to the general model of expected credit losses:
□ Applicable √ Not applicable
Disclosure by age
Unit: RMB
Aging Balance at the End of the Period
Within 1 year (including 1 year) 4,686,674,470.49
Total 4,989,564,802.09
(2) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
Balance at the Amount of Changes in the Current Period Balance at the
Category Start of the Recovered or End of the
Accrued Written Off Others
Period Reversed Period
Accrued by aging
analysis
Total 86,465,236.63 6,389,796.36 23,887.24 92,878,920.23
(3) Accounts receivable actually written off in this period
No accounts receivable actually written off in this period
(4) Accounts receivable of the top five closing balances collected by debtors
The accounts receivables of the top five closing balance collected by the arrears are summed up to
balance of bad debt provisions accrued is summed up to 8,870,616.09 yuan.
(5) Accounts receivable derecognized due to the transfer of financial assets
There are no accounts receivable derecognized due to the transfer of financial assets in this period.
(6) Amount of assets and liabilities formed by transfer of accounts receivable and continuing
involvement
Amount of assets and liabilities formed by transfer of accounts receivable and continuing involvement in the current period
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Other Receivables 12,569,808,120.45 13,796,461,689.02
Total 12,569,808,120.45 13,796,461,689.02
(1) Other accounts receivable
Unit: RMB
Nature of the funds Closing balance Opening book balance
Deposits 41,419,009.16 30,677,198.60
Prepaid or advance expense 45,589,302.55 39,286,222.84
Equity Transfer Fund 588,000,000.00 588,000,000.00
Employee home loan 77,390,223.99 86,870,816.57
Incomings and outgoings 11,869,943,982.59 13,102,867,304.50
Others 3,868,628.42 5,061,884.88
Total 12,626,211,146.71 13,852,763,427.39
Unit: RMB
Phase One Phase Two Phase Three
Expected credit losses for
Expected credit Expected credit losses
Bad debt provision the entire extension Total
losses in the next for the entire extension
(without credit
impairment)
Balance on January 1, 2021 52,038,067.76 3,625,283.30 638,387.31 56,301,738.37
Balance in the Current Period
—— —— —— ——
on January 1, 2021
--Transfer to phase two -859,905.17 859,905.17
--Transfer to phase three -7,280.00 -51,530.00 58,810.00
Provisions of this period 129,313.02 49,451.51 178,764.53
Reversal of the current period 77,476.64 77,476.64
Balance on June 30, 2021 51,300,195.61 4,356,181.83 746,648.82 56,403,026.26
Book balance changes with significant changes in loss provision in the current period
□ Applicable √ Not applicable
Disclosure by age
Unit: RMB
Aging Balance at the End of the Period
Within 1 year (including 1 year) 11,739,098,893.95
Total 12,626,211,146.71
Provision for bad debts in the current period:
Unit: RMB
Amount of Changes in the Current Period Balance at the
Balance at the Start of
Category Recovered or Written End of the
the Period Accrued Others
Reversed Off Period
Portfolio 2: Aging Analysis
Portfolio
Total 56,301,738.37 178,764.53 77,476.64 56,403,026.26
There's no actual written-off accounts receivable in this period.
Unit: RMB
As a percentage of
Bad debt provision
Name of Nature of the Balance at the End total other
Aging at the end of the
Unit funds of the Period receivables at the
period
end of the period
RMB 8,137,680,605.42 within 1
Incomings
Company year, RMB 947,894.82 for 1-2
and 8,138,628,511.25 64.46%
outgoings
years
Incomings
Company
and 1,609,097,559.05 Within 1 year 12.74%
outgoings
Incomings
Company RMB 761,614,290.09 within 1
and 818,285,111.83 6.48%
outgoings
RMB 25,596,991.82 within 1 year,
Incomings
Company RMB 30,056,859.69 for 1-2 years,
and 438,458,642.74 3.47%
outgoings
years
Incomings RMB 271,685,329.76 within 1
Company
and 320,846,120.30 year, RMB 49,160,790.54 for 1-2 2.54%
outgoings years
Total -- 11,325,315,945.17 -- 89.69%
Unit: RMB
Item Balance at the End of the Period Balance at the Start of the Period
Provision for Provision for
Book balance decline in Book value Book balance decline in Book value
value value
Investment in
subsidiaries
Investment in
affiliates and 420,832,878.31 420,832,878.31 61,493,073.68 61,493,073.68
joint ventures
Total 4,080,499,755.47 4,080,499,755.47 3,660,410,557.29 3,660,410,557.29
(1) Investment in Subsidiaries
Unit: RMB
Decrease/Increase in the current period Closing
Balance at the Start Provision Balance at the balance of
The invested
of the Period (book Investments Investment for End of the Period provision
entity Others
value) increased decreased impairment (Book value) for decline
accrued in value
Zhejiang
Dahua System
Engineering
Co., Ltd.
Zhejiang
Dahua
Security
Network 27,240,264.48 -12,754.64 27,227,509.84
Operation
Service Co.,
Ltd.
Zhejiang
Dahua Ju'an
Technology
Co., Ltd.
Guangxi
Dahua
Information 6,289,815.02 67,635.35 6,357,450.37
Technology
Co., Ltd.
Dahua
Technology 608,628,700.00 608,628,700.00
(HK) Limited
Zhejiang
Dahua
Security 180,383.54 -32,541.88 147,841.66
Service Co.,
Ltd.
Zhejiang
Dahua Vision
Technology
Co., Ltd.
Guangxi
Dahua
Security 20,002,580.76 20,002,580.76
Service Co.,
Ltd.
Hangzhou
Xiaohua
Technology
CO., LTD.
Zhejiang
Dahua Zhilian 1,001,165,918.91 292,730.38 1,001,458,649.29
Co., Ltd.
Zhejiang
Dahua
Investment 62,175,000.00 62,175,000.00
Management
Co., Ltd.
Guangxi
Dahua
Zhicheng Co.,
Ltd.
Hangzhou
Huacheng
Network 29,566,484.68 476,899.83 30,043,384.51
Technology
Co., Ltd.
Zhejiang
HuaRay
Technology
Co., Ltd.
Hangzhou
Fuyang Hua'ao
Technology
Co., Ltd.
Zhejiang
Huafei
Intelligent 25,616,346.82 254,145.78 25,870,492.60
Technology
CO., LTD.
Zhejiang
Huachuang
Vision 30,091,777.77 527,689.48 30,619,467.25
Technology
Co., Ltd.
Zhejiang
Fengshi
Technology
Co., Ltd.
Dahua
Technology
Holdings
Limited
Zhejiang
Huaxiao
Technology
Co., Ltd.
Xi'an Dahua
Zhilian
Technology
Co., Ltd.
Wuxi Dahua
Ruipin
Technology
Co., Ltd.
Zhejiang
Huaxuan
Technology
Co., Ltd.
Beijing Huayue
Shangcheng
Information 10,583,863.46 200,854.05 10,784,717.51
Technology
Service Co.,
Ltd.
Zhejiang
Dahua Jinzhi
Technology
Co., Ltd.
Shanghai
Huashang
Chengyue
Information 1,673,832.92 107,966.48 1,781,799.40
Technology
Service Co.,
Ltd.
Sichuan
Dahua
Guangxun
Photoelectric
Technology
Co., Ltd.
Zhejiang
Zhoushan
Digital
Development
Operation Co.,
Ltd
Guangxi
Dahua
Technology
Co., Ltd.
Yunnan Zhili
Technology 4,500,000.00 4,500,000.00
Co., Ltd
Zhejiang
Dahua Storage
Technology
Co., Ltd.
Zhejiang
Huaruijie
Technology
Co., Ltd.
Chengdu
Dahua Zhilian 45,851.60 20,311.42 66,163.02
Information
Technology
Co., Ltd.
Chengdu
Dahua Zhian
Information
Technology
Service Co.,
Ltd.
Chengdu
Huishan Smart
Network 5,500,000.00 5,500,000.00
Technology
Co., Ltd.
Zhejiang
Dahua
Security
Inspection
Technology
Co., Ltd.
Dahua
Technology 2,395.40 2,395.40
USA Inc.
Xinjiang
Dahua Zhixin
Information 2,055.08 2,055.08
Technology
Co., Ltd.
Guangxi
Huacheng
Technology
Co., Ltd.
Hangzhou
Huacheng
Software 478,183.81 313,618.71 791,802.52
Technology
Co., Ltd.
Dahua
Technology 96,379.20 20,534.40 116,913.60
Canada Inc.
Total 3,598,917,483.61 60,749,393.55 3,659,666,877.16
(2) Investment in affiliates and joint ventures
Unit: RMB
Decrease/Increase in the current period
Closing
Balance at the Cash
Investment profit Adjustment on Balance at the End balance of
Name of Start of the dividends or Provision for
Investments Investment and loss other Other changes of the Period (book provision for
Investees Period (book profit impairment Others
increased decreased recognized under comprehensive in equity value) decline in
value) declared to accrued
the equity method income value
distribute
Ⅰ. Joint ventures
Ⅱ. Affiliates
Ruicity Digital
Technology 57,944,111.48 -3,588,203.81 54,355,907.67
Co., Ltd.
Zhejiang
Leapmotor
-164,798,905.92 518,754,247.99 353,955,342.07
Technology
Co., Ltd.
Digital
Dongyang
Technology 2,400,000.00 -134,417.30 2,265,582.70
Operation Co.,
Ltd.
Hangzhou
Juhuanyan
Information 1,148,962.20 -425,465.81 723,496.39
Technology
Co., Ltd.
Guangdong
Dahua Zhishi
Technology
Co., Ltd.
Zhejiang
Huanuokang 12,000,000.0
-2,467,450.52 9,532,549.48
Technology 0
Co., Ltd.
Subtotal 61,493,073.68 -171,271,964.55 518,754,247.99 -142,478.81 420,832,878.31
Total 61,493,073.68 -171,271,964.55 518,754,247.99 -142,478.81 420,832,878.31
Unit: RMB
This Period's Amount of Occurrence Previous Period's Amount of Occurrence
Item
Income Cost Income Cost
Main Business 4,149,060,053.90 513,023,110.70 3,604,445,938.19 448,774,239.46
Other businesses 18,099,876.19 13,149,498.58 20,539,391.76 15,525,330.75
Total 4,167,159,930.09 526,172,609.28 3,624,985,329.95 464,299,570.21
Unit: RMB
This Period's Amount of Previous Period's Amount of
Item
Occurrence Occurrence
Long-term equity investment income
-171,271,964.55 -45,152,368.00
measured by equity method
Investment income from disposal of long-term
equity investment
Investment Income from Disposal Trading
Financial Assets
Investment income from possession of other
non-current financial assets
Investment income from treasury bond
reverse repurchase
Total -156,962,757.83 -37,634,661.64
XVIII. Supplementary Information
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gains and losses from disposal of non-current assets 32,626,494.62
The government subsidies included in the current profits and
losses (excluding the government subsidies closely related to
regular businesses of the Company and issued in the quota or
quantity based on the national standards)
Gains or losses from investment or asset management entrusted to 72,949,692.60
others
Profits and losses resulting from the changes in fair value for
holding trading financial assets, derivative financial assets and
trading financial liabilities, derivative financial liabilities and
investment income from disposal of trading financial assets,
derivative financial assets, trading financial liabilities, derivative
financial liabilities, and other obligatory right investment, excluding
the effective hedging businesses related to the regular business
operation of the Company
Non-Operating Revenue and expenses other than the above 2,069,343.56
Other gains and losses items that fit the definition of non-recurring
gains and losses
Less: Impact of income tax 42,970,480.79
Impact of minority equity 10,776,144.14
Total 203,583,840.33 --
For items defined as non-recurring gains and losses according to the No. 1 Explanatory Announcement on Information
Disclosure for Companies Offering Their Securities to Public - Non-recurring Gains and Losses, or non-recurring gains
and losses items listed in the said document defined as recurring ones, please specify the reasons.
□ Applicable √ Not applicable
Earnings per share
Weighted
Profit for the reporting period Basic Earnings per Diluted Earnings per
Average ROE
Share (RMB/Share) Share (RMB/Share)
Net profit attributable to common shareholders of the
Company
Net profit attributable to common shareholders of the
Company after deducting non-recurring gains and 6.94% 0.49 0.49
losses
(1) Differences of net profits and net assets in the financial reports disclosed according to the
international accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
(2) Differences of net profits and net assets in the financial reports disclosed according to the
overseas accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
(3) Reasons for accounting data differences under domestic and overseas accounting standards.
For difference adjustment on the data already audited by an overseas audit institution, name of
the audit institution should be noted.
□ Applicable √ Not applicable
Zhejiang Dahua Technology Co., Ltd.
Chairman: Fu Liquan
August 28, 2021
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