中衡设计(603017) - 2024 Q2 - 季度财报

Section 1 Definitions Definitions of Common Terms This section defines common terms used in the report, ensuring clarity and consistency by covering key terms like the reporting period and company names - The reporting period refers to January 1, 2024, to June 30, 2024[5] - Zhongheng Design, the Company, and this Company all refer to Zhongheng Design Group Co., Ltd[5] - Lists several holding or wholly-owned subsidiaries including Saipu Growth, Zhuochuang Design, Zhongheng Consulting, and Industrial Park Planning Institute[5] Section 2 Company Profile and Key Financial Indicators Company Information This section provides the company's basic registration details, including its Chinese name, legal representative, registered address, contact information, and official disclosure channels - The company's Chinese name is Zhongheng Design Group Co., Ltd., abbreviated as Zhongheng Design[6] - The legal representative is Feng Zhenggong, and the company's registered and office address is 111 Bada Street, Suzhou Industrial Park[6][8] - The company's designated information disclosure newspapers are Shanghai Securities News and China Securities Journal, with the semi-annual report published on www.sse.com.cn[9](index=9&type=chunk) Company Stock Profile This section outlines the company's basic stock information, including its type, listing exchange, abbreviation, code, and previous abbreviation - The company's stock type is A-shares, listed on the Shanghai Stock Exchange[10] - The stock abbreviation is Zhongheng Design, stock code is 603017, and the previous abbreviation was Yuanqu Design[10] Key Accounting Data and Financial Indicators During the reporting period, the company experienced a decline in operating revenue and net profit attributable to the parent company, but operating cash flow significantly increased year-on-year due to reduced subcontractor payments, while EPS and ROE decreased Key Accounting Data (Jan-Jun 2024 vs. Prior Year Period) | Indicator | Current Period (Jan-Jun) | Prior Year Period | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 666,728,119.27 Yuan | 755,234,040.40 Yuan | -11.72 | | Net Profit Attributable to Shareholders of Listed Company | 71,059,841.77 Yuan | 81,601,263.40 Yuan | -12.92 | | Net Profit Attributable to Shareholders of Listed Company Excluding Non-Recurring Gains and Losses | 56,466,818.72 Yuan | 65,458,564.60 Yuan | -13.74 | | Net Cash Flow from Operating Activities | 38,843,127.74 Yuan | -15,742,516.12 Yuan | Not Applicable | Key Financial Indicators (Jan-Jun 2024 vs. Prior Year Period) | Indicator | Current Period (Jan-Jun) | Prior Year Period | Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/share) | 0.2590 | 0.2958 | -12.44 | | Diluted Earnings Per Share (Yuan/share) | 0.2590 | 0.2958 | -12.44 | | Basic EPS Excluding Non-Recurring Gains and Losses (Yuan/share) | 0.2058 | 0.2372 | -13.24 | | Weighted Average Return on Net Assets (%) | 4.79 | 5.63 | Decrease 0.84 percentage points | | Weighted Average ROE Excluding Non-Recurring Gains and Losses (%) | 3.81 | 4.52 | Decrease 0.71 percentage points | - Net cash flow from operating activities for the first half of 2024 increased by 54.5856 million Yuan year-on-year, primarily due to a reduction in subcontractor payments by the headquarters during the period[12] Non-Recurring Gains and Losses Items and Amounts This section details the company's non-recurring gains and losses for the reporting period, totaling 14,593,023.05 Yuan, primarily from fair value changes in financial assets, government grants, and other non-operating income Non-Recurring Gains and Losses Items and Amounts | Non-Recurring Gains and Losses Item | Amount (Yuan) | | :--- | :--- | | Gains and Losses from Disposal of Non-Current Assets | -98,755.93 | | Government Grants Recognized in Current Profit and Loss | 915,397.54 | | Gains and Losses from Fair Value Changes and Disposal of Financial Assets and Liabilities | 5,250,976.64 | | Reversal of Impairment Provisions for Receivables Subject to Separate Impairment Testing | 3,777,954.69 | | Gains and Losses from Debt Restructuring | -1,060,895.67 | | Other Non-Operating Income and Expenses Apart from the Above | 7,664,644.84 | | Less: Income Tax Impact | -1,748,527.12 | | Minority Interest Impact (After Tax) | -107,771.94 | | Total | 14,593,023.05 | Section 3 Management Discussion and Analysis Description of the Company's Industry and Main Business During the Reporting Period The architectural design industry, closely linked to the macroeconomy, is undergoing transformation towards high-quality urbanization, low-carbon green building, digitalization, AI, prefabricated construction, EPC, and full-process engineering consulting, with the company's main business covering engineering design, EPC, project management, and supervision, aiming to provide full-chain technical services and maintain a leading position - The construction industry is a pillar of the national economy, playing a crucial role in promoting investment, stabilizing growth, and ensuring employment[15] - New urbanization construction is shifting from pursuing speed and scale to focusing on quality, with urban renewal, shantytown renovation, and underground pipeline improvements creating significant development opportunities[16][17] - The construction industry shows clear trends in transformation and upgrading, including low-carbon green buildings, digital transformation (digital cities, AI), prefabricated construction, EPC, and full-process engineering consulting[18][19][20][21][22][23][24] - The company's main business is engineering technical services, including engineering design and consulting (including green, low-carbon, and smart building design), EPC, project management, and engineering supervision, focusing on public, high-end industrial, and civil buildings[25][26] - The company is Jiangsu Province's largest architectural design enterprise, the first IPO listed company in China's architectural design sector, and Chairman Feng Zhenggong was elected a National Engineering Survey and Design Master[28][27] - The company ranked 40th in the '2023 China Engineering Design Enterprises Top 60', is one of the earliest domestic enterprises to engage in design-led EPC general contracting, and has been recognized as a 'National Prefabricated Building Industrial Base'[28] - The company was selected by the Ministry of Housing and Urban-Rural Development as one of the first 40 national pilot enterprises for full-process engineering consulting, and its subsidiary Zhongheng Consulting holds the highest national engineering supervision qualification, the comprehensive engineering supervision qualification[28][29] (1) Industry Overview The architectural design industry is significantly influenced by macroeconomics and policies, with new urbanization, low-carbon green buildings, digital transformation, AI, prefabricated construction, EPC, full-process engineering consulting, and architect responsibility systems being key development trends and opportunities - New urbanization construction will shift from pursuing speed and scale to focusing more on quality, with key initiatives including urban renewal, public infrastructure development, and shantytown renovation[16][17] - Low-carbon green buildings are a crucial path to achieving carbon peaking and carbon neutrality, making the transformation and upgrading of the construction industry imperative[18][19] - Digital transformation is an inevitable trend in the construction industry, where the digital economy will drive changes in production, living, and governance, making digital capabilities critical for industry competition[20] - Artificial intelligence (AI) will bring profound changes to the architectural design industry, with emerging technologies like cloud computing, metaverse, and AIGC penetrating the construction industry chain[21] - Developing prefabricated buildings has become a national strategy, with increasing policy support and a goal for prefabricated buildings to account for over 30% of new construction during the '14th Five-Year Plan' period[22] - The EPC general contracting model is encouraged and supported by national and local governments due to its advantages in optimizing solutions, accelerating progress, controlling costs, and improving quality[23] - The full-process engineering consulting service model is encouraged to develop, aiming to increase industrial intensification and industry concentration, becoming an inevitable direction for the construction industry's development[24] - The architect responsibility system is being promoted in civil building engineering, aiming to coordinate various disciplines and stages during the design phase and implement full-process management and services[25] (2) Main Business Operations The company's main business includes engineering design and consulting, EPC, project management, and engineering supervision, providing full-chain engineering technical services, holding a significant industry position as Jiangsu Province's largest architectural design enterprise, actively expanding EPC and full-process consulting, and possessing multiple national-level qualifications and honors - The company belongs to the engineering technical services industry, primarily engaged in engineering design and consulting, EPC, project management, and engineering supervision related to industrial services and urban-rural construction quality improvement[25] - The company provides full-chain engineering technical services, including preliminary planning, conceptual design, construction drawing design, and post-operation consulting, while also developing full-cycle industrial consulting services[25][26] - The company's business model is centered on engineering design, offering one-stop services, primarily undertaking projects through public bidding, invited bidding, and direct client commissions[27] - Company Chairman Feng Zhenggong was elected a National Engineering Survey and Design Master, significantly enhancing the company's brand and industry influence[27] - The company is Jiangsu Province's largest architectural design enterprise, the first IPO listed company in China's architectural design sector, ranking 40th in the '2023 China Engineering Design Enterprises Top 60'[28] - The company is one of the earliest domestic enterprises to engage in design-led EPC general contracting and has obtained the 'Class A General Contractor for Building Engineering Construction' qualification[28] - The company is one of the first batch of 'National Prefabricated Building Industrial Bases', with over 80% of its projects including prefabricated building design[28] - The company was selected by the Ministry of Housing and Urban-Rural Development as one of the first 40 national pilot enterprises for full-process engineering consulting, and its subsidiary Zhongheng Consulting holds a comprehensive engineering supervision qualification[28][29] Analysis of Core Competitiveness During the Reporting Period The company's core competitiveness lies in technological innovation, dual-carbon technology, prefabricated construction, BIM/digital/AI/metaverse applications, talent reserves, high-end clients, extensive experience, standardized management, and national strategic layout with regional expansion capabilities, collectively supporting its leading position and sustainable development in architectural design and engineering services - The company prioritizes core business technological innovation and R&D investment, possessing professional advantages in modern industrial buildings, urban renewal, cultural, educational, and healthcare buildings, industrial parks, and super high-rise buildings[31] - The company has established a 'Dual-Carbon Technology Research Center' and other initiatives, with its R&D center building receiving the 'National Green Building Innovation Award First Prize' and LEED Platinum certification, positioning it as a leader in low-carbon green buildings[32][33] - The company provides integrated design solutions for prefabricated buildings, holds multiple patents and software copyrights, and is one of the first national prefabricated building industrial bases[34] - The company holds advantages in BIM, digital twin, AI, and metaverse-related technologies, independently developing multiple design management software and investing in tech companies like Guanghui City[35][36][37] - The company boasts a high-caliber talent team, including National Engineering Survey and Design Masters and provincial-level masters, and has established a comprehensive talent development and incentive system[38][39] - The company has established long-term partnerships with high-quality international clients, continuously gaining insights into industry and technological advancements to drive its own innovation[40] - The company has cultivated deep roots in Suzhou Industrial Park for many years, accumulating comprehensive service experience in advanced development zone construction projects and engineering design experience in high-end buildings[41] - The company expands into new markets and businesses through investment, mergers, acquisitions, and strategic layouts, achieving complementary advantages and synergistic effects, having successfully invested in multiple listed companies[43][44] Discussion and Analysis of Operating Performance In the first half of 2024, despite macroeconomic challenges, the company maintained healthy and stable development by strengthening market expansion, international presence, core competitiveness, cost reduction, efficiency improvement, and accounts receivable collection; although revenue and net profit declined, operating cash flow significantly improved, and multiple qualifications and honors were obtained Operating Performance for H1 2024 | Indicator | Amount (100 million Yuan) | Year-on-Year Change | | :--- | :--- | :--- | | Operating Revenue | 6.67 | Decrease 11.72% | | Design Revenue | 3.39 | Decrease 11.37% | | EPC Revenue | 1.74 | Decrease 18.60% | | Net Profit Attributable to Parent Company | 0.7106 | Decrease 12.92% | | Net Cash Flow from Operating Activities | 0.3884 | Increase 54.5856 million Yuan | - The company obtained Class A qualification for urban and rural planning, won bids for major design projects such as the Central China Intelligent Aircraft Industrial Base and Wuhu Yihang Industrial Park, and maintained stable new contract value[47] - The company actively expanded into overseas markets, winning bids for the Enco Medical Indonesia project and Jiangxi Naipu Mining Peru project, and established a joint venture engineering consulting company in Saudi Arabia, enhancing international competitiveness[47] - The company continuously strengthened R&D in AI, BIPV, energy-saving and green buildings, and prefabricated construction technologies, successfully hosting events like the China Steel Construction Society expert seminar to expand its industry influence[48] - The company was awarded the title of 'Jiangsu Province Leading Enterprise for High-Quality Development in Modern Service Industry', and Suzhou International Conference Hotel was listed among the ARCHINA 2023 Annual Architecture Awards TOP10[48] - Zhongheng Design Group R&D Center obtained global LEED V4.1 O+M Platinum certification, becoming China's first project to simultaneously achieve 'Green Building Three-Star Operation + Healthy Building Three-Star Operation + LEED Platinum Operation'[48][49] - The company and several of its holding subsidiaries were recognized as High-Tech Enterprises, enhancing overall technical strength[49] - The company strictly adheres to laws and regulations, improved its corporate governance structure, repurchased 3.5 million shares through centralized bidding transactions totaling 30.052 million Yuan, maintaining stock price stability[50] Key Operating Performance During the Reporting Period This section details the company's key operating performance during the reporting period, including changes in financial statement items, asset and liability status, overseas assets, and restricted assets; significant increases were observed in financial assets held for trading and prepayments, while notes receivable and taxes payable decreased substantially, and short-term borrowings and provisions showed considerable changes Analysis of Changes in Financial Statement Items (Current Period vs. Prior Year Period) | Item | Current Period Amount (Yuan) | Prior Year Period Amount (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 666,728,119.27 | 755,234,040.40 | -11.72 | | Operating Costs | 492,603,120.02 | 552,315,802.86 | -10.81 | | Selling Expenses | - | - | - | | Administrative Expenses | 59,861,278.94 | 66,487,671.90 | -9.97 | | Financial Expenses | 2,870,209.92 | 3,121,854.33 | -8.06 | | R&D Expenses | 39,768,072.38 | 42,003,914.33 | -5.32 | | Net Cash Flow from Operating Activities | 38,843,127.74 | -15,742,516.12 | Not Applicable | | Net Cash Flow from Investing Activities | -185,842,554.47 | -75,747,999.35 | Not Applicable | | Net Cash Flow from Financing Activities | 82,042,632.26 | 9,286,804.71 | 783.43 | - Net cash flow from operating activities increased by 54.5856 million Yuan year-on-year, primarily due to a reduction in subcontractor payments by the headquarters during the period[51] - Net cash flow from investing activities decreased year-on-year, mainly due to a reduction in net redemptions and purchases of wealth management products during the period[51] - Net cash flow from financing activities increased by 783.43% year-on-year, primarily due to a decrease in loan repayments and an increase in payments for share repurchases during the period[51] Changes in Assets and Liabilities (Period-End vs. Prior Year-End) | Item Name | Current Period-End Amount (Yuan) | Prior Year-End Amount (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 333,536,041.19 | 401,191,151.06 | -16.86 | | Financial Assets Held for Trading | 536,999,708.03 | 406,162,615.65 | 32.21 | | Notes Receivable | 9,965,550.03 | 32,679,718.44 | -69.51 | | Prepayments | 31,363,239.80 | 18,799,899.20 | 66.83 | | Other Receivables | 102,431,412.51 | 63,919,896.00 | 60.25 | | Short-Term Borrowings | 370,238,262.50 | 249,798,777.78 | 48.21 | | Employee Benefits Payable | 179,392,230.70 | 269,261,730.38 | -33.38 | | Taxes Payable | 15,128,114.18 | 39,706,012.12 | -61.90 | | Provisions | 2,075,480.82 | 10,176,660.82 | -79.61 | - Financial assets held for trading increased by 32.21%, primarily due to increased purchases of bank wealth management products during the period[53] - Notes receivable decreased by 69.51%, mainly due to maturity and endorsement of bills held during the period[53] - Short-term borrowings increased by 48.21%, primarily due to new working capital loans during the period[53] - Provisions decreased by 79.61%, mainly due to the reversal of provisions following successful litigation during the period[53] - Overseas assets amounted to 47,416,239.75 Yuan, representing 1.42% of total assets[54] Major Restricted Assets (Period-End Balance) | Item | Period-End Balance (Yuan) | | :--- | :--- | | Bank Acceptance Bill Deposits | 202.86 | | Performance Deposits | 1,698,333.33 | | Bank Deposits Frozen by Court | 1,910,325.48 | | Properties Without Completed Property Certificates | 18,554,231.03 | | Total | 22,163,092.70 | (1) Analysis of Main Business This section analyzes changes and primary reasons for operating revenue, operating costs, administrative expenses, financial expenses, R&D expenses, and net cash flows from operating, investing, and financing activities during the reporting period, using a financial statement item change analysis table Analysis of Changes in Financial Statement Items (Current Period vs. Prior Year Period) | Item | Current Period Amount (Yuan) | Prior Year Period Amount (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 666,728,119.27 | 755,234,040.40 | -11.72 | | Operating Costs | 492,603,120.02 | 552,315,802.86 | -10.81 | | Selling Expenses | - | - | - | | Administrative Expenses | 59,861,278.94 | 66,487,671.90 | -9.97 | | Financial Expenses | 2,870,209.92 | 3,121,854.33 | -8.06 | | R&D Expenses | 39,768,072.38 | 42,003,914.33 | -5.32 | | Net Cash Flow from Operating Activities | 38,843,127.74 | -15,742,516.12 | Not Applicable | | Net Cash Flow from Investing Activities | -185,842,554.47 | -75,747,999.35 | Not Applicable | | Net Cash Flow from Financing Activities | 82,042,632.26 | 9,286,804.71 | 783.43 | - Net cash flow from operating activities increased year-on-year, primarily due to a reduction in subcontractor payments by the headquarters during the period[51] - Net cash flow from investing activities decreased year-on-year, mainly due to a reduction in net redemptions and purchases of wealth management products during the period[51] - Net cash flow from financing activities increased significantly year-on-year, primarily due to a decrease in loan repayments and an increase in payments for share repurchases during the period[51] (3) Analysis of Assets and Liabilities This section details the company's period-end asset and liability composition and changes; financial assets held for trading, prepayments, other receivables, and short-term borrowings significantly increased, while notes receivable, employee benefits payable, taxes payable, and provisions substantially decreased, with overseas assets representing a small portion of total assets and some assets being restricted Changes in Assets and Liabilities (Period-End vs. Prior Year-End) | Item Name | Current Period-End Amount (Yuan) | Prior Year-End Amount (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 333,536,041.19 | 401,191,151.06 | -16.86 | | Financial Assets Held for Trading | 536,999,708.03 | 406,162,615.65 | 32.21 | | Notes Receivable | 9,965,550.03 | 32,679,718.44 | -69.51 | | Prepayments | 31,363,239.80 | 18,799,899.20 | 66.83 | | Other Receivables | 102,431,412.51 | 63,919,896.00 | 60.25 | | Short-Term Borrowings | 370,238,262.50 | 249,798,777.78 | 48.21 | | Employee Benefits Payable | 179,392,230.70 | 269,261,730.38 | -33.38 | | Taxes Payable | 15,128,114.18 | 39,706,012.12 | -61.90 | | Provisions | 2,075,480.82 | 10,176,660.82 | -79.61 | - Financial assets held for trading increased by 32.21%, primarily due to increased purchases of bank wealth management products during the period[53] - Notes receivable decreased by 69.51%, mainly due to maturity and endorsement of bills held during the period[53] - Short-term borrowings increased by 48.21%, primarily due to new working capital loans during the period[53] - Provisions decreased by 79.61%, mainly due to the reversal of provisions following successful litigation during the period[53] - Overseas assets amounted to 47,416,239.75 Yuan, representing 1.42% of total assets[54] Major Restricted Assets (Period-End Balance) | Item | Period-End Balance (Yuan) | | :--- | :--- | | Bank Acceptance Bill Deposits | 202.86 | | Performance Deposits | 1,698,333.33 | | Bank Deposits Frozen by Court | 1,910,325.48 | | Properties Without Completed Property Certificates | 18,554,231.03 | | Total | 22,163,092.70 | (4) Analysis of Investment Status This section analyzes the company's investment status, including external equity investments and financial assets measured at fair value; the company participated in establishing Suzhou Yuanchuang Ziyu Equity Investment Fund Partnership with a subscribed capital of 143.964 million Yuan, and holds substantial financial assets measured at fair value, primarily floating-rate wealth management products and equity instrument investments - The company joined Suzhou Yuanchuang Ziyu Equity Investment Partnership (Limited Partnership), with a subscribed capital of 143.964 million Yuan and a 39.99% stake, having paid 5.9985 million Yuan as of the end of the reporting period[56][57] Financial Assets Measured at Fair Value (Period-End Balance) | Asset Category | Period-End Amount (Yuan) | | :--- | :--- | | Financial Assets Measured at Fair Value Through Profit or Loss | 536,999,708.03 | | Of which: Equity Instrument Investments | 144,272,069.00 | | Floating-Rate Wealth Management Products | 536,999,708.03 | | Total | 681,271,777.03 | - Current period fair value change gains and losses totaled 5,250,976.64 Yuan, with floating-rate wealth management products generating 7,784,441.80 Yuan in gains and equity instrument investments incurring 2,533,465.16 Yuan in losses[59] (6) Analysis of Major Holding and Participating Companies This section presents financial information for the company's major holding and participating companies, including total assets, net assets, operating revenue, and net profit; Zhongheng Consulting and Suzhou Huazao performed well, while Zhongheng Zhuochuang International Engineering Design Co., Ltd. reported negative net assets Financial Indicators of Major Holding and Participating Companies (Current Period) | Company Name | Registered Place | Business Nature | Shareholding Ratio (%) | Total Assets (Yuan) | Net Assets (Yuan) | Operating Revenue (Yuan) | Net Profit (Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Zhongheng Design Group Engineering Consulting Co., Ltd. | Suzhou Industrial Park | Construction Supervision | 83.25 | 125,420,944.63 | 45,683,936.47 | 98,044,248.45 | 14,068,002.12 | | Zhongheng Zhuochuang International Engineering Design Co., Ltd. | Chongqing | Engineering Consulting and Design | 99 | 176,724,633.08 | -93,249,693.74 | 22,943,878.55 | -6,100,274.83 | | Suzhou Huazao Architectural Design Co., Ltd. | Suzhou Wuzhong Economic Development Zone | Engineering Consulting and Design | 100 | 177,356,493.90 | 68,210,381.40 | 31,415,462.43 | 3,530,109.12 | | Zhejiang Province Engineering Consulting Co., Ltd. | Hangzhou, Zhejiang Province | Engineering Consulting | 90 | 176,456,167.61 | 124,073,263.82 | 61,112,360.71 | 443,419.64 | Other Disclosure Matters This section discloses potential risks the company faces, including macroeconomic policies, market competition, EPC business management, human resources, and goodwill impairment, advising investors to be aware of investment risks - The company faces force majeure risks arising from changes in macroeconomic conditions, national policies, and fixed asset investment scale[61] - The engineering technical services industry is highly competitive, which may lead to a decline in market share and impact the growth rate of operating performance[61] - The expansion of EPC general contracting business brings management risks in project management, schedule management, operational management, procurement, and construction subcontracting, as well as risks from raw material price fluctuations and capital advances[62] - Knowledge-intensive enterprises face human resource risks, where the cultivation and retention of core technical and management personnel are crucial for the company's sustainable development[62] - Goodwill formed from the company's external investments and acquisitions carries impairment risk, and a deterioration in the operating conditions of acquired subsidiaries could adversely affect current period profit and loss[62] Section 4 Corporate Governance Overview of Shareholders' Meetings This section describes the company's 2023 Annual Shareholders' Meeting, where several important proposals were approved, including the work reports of the Board of Directors and Supervisory Board, financial final accounts and budget reports, profit distribution plan, and director and supervisor remuneration proposals - The company held its 2023 Annual Shareholders' Meeting on May 16, 2024[63] - The meeting approved 9 proposals, including the 2023 work reports of the Board of Directors and Supervisory Board, financial final accounts report, 2024 financial budget report, and 2023 profit distribution plan[63] Profit Distribution or Capital Reserve Conversion Plan This section states that the company has no plan for profit distribution or capital reserve conversion into share capital during the current reporting period - The company will not carry out profit distribution or capital reserve conversion into share capital during the current reporting period[65] Section 5 Environmental and Social Responsibility Environmental Information The company actively practices ESG principles, becoming a founding member of the Suzhou Industrial Park ESG Alliance, committed to green, low-carbon, and circular development; it established a 'Dual-Carbon Technology Research Center' to provide environmental solutions to clients and applies green, low-carbon design concepts in urban renewal and beautiful rural projects, supporting national carbon peaking and carbon neutrality strategies - The company became one of the founding members of the 'Suzhou Industrial Park ESG Alliance', actively promoting exchanges and cooperation in the ESG field[66] - The company has established a 'Dual-Carbon Technology Research Center' and a 'Low-Carbon Building Design Research Center', engaged in R&D and design of low-carbon green buildings, BIPV, and energy conservation and environmental protection[66] - The company's R&D center building is the first project in China to receive both Green + Healthy Building Dual Three-Star Operation labels, and was awarded the 'National Green Building Innovation Award First Prize'[67] - The company fully applies green and low-carbon design concepts in urban renewal, beautiful rural, biomedical, big health, and advanced manufacturing projects, contributing to the achievement of national carbon peaking and carbon neutrality strategic goals[68] Specific Progress in Consolidating Poverty Alleviation Achievements and Rural Revitalization The company actively responds to national strategies, committing to rural revitalization; led by National Engineering Survey and Design Master Mr. Feng Zhenggong, it completed planning and design for several characteristic pastoral villages and received the 'Jiangsu Province Rural Planning and Construction Research and Practice Outstanding Contribution Award' - The company actively responds to national strategies such as the 'Belt and Road' initiative, Yangtze River Economic Belt, and rural revitalization, contributing to regional development[69] - The company completed the planning and design of several characteristic pastoral villages, including Suining Liyu Village, Suzhou Huangshu Village, and Suzhou Tiandubang Village[69] - Company Chairman Mr. Feng Zhenggong received the 'Jiangsu Province Rural Planning and Construction Research and Practice Outstanding Contribution Award' in 2021[69] Section 6 Significant Matters Fulfillment of Commitments This section discloses the share lock-up and reduction commitments made by the company's actual controller Feng Zhenggong and controlling shareholder Saipu Growth during the initial public offering, confirming strict adherence during the reporting period - The company's actual controller Feng Zhenggong committed not to transfer directly or indirectly held company shares within 36 months from the listing date, and not to transfer more than 25% of the total shares annually during his tenure[70] - Controlling shareholder Saipu Growth committed that within two years after the lock-up period, the share reduction would not exceed 2% of the company's total share capital in the first year, and not exceed 5% in total within two years[71] - During the reporting period, all committing parties strictly fulfilled their respective commitments in a timely manner[70][71] Alleged Violations, Penalties, and Rectification by Listed Company, Directors, Supervisors, Senior Management, Controlling Shareholders, and Actual Controllers During the reporting period, the company and Board Secretary Hu Yixin received warning letters from the Jiangsu Securities Regulatory Bureau and regulatory warnings from the Shanghai Stock Exchange due to alleged violations, with the company actively rectifying and submitting a rectification report - The company and Board Secretary Hu Yixin received warning letters from the Jiangsu Securities Regulatory Bureau and regulatory warnings from the Shanghai Stock Exchange in July 2024[73] - The company has actively undertaken rectification and submitted rectification reports to relevant regulatory authorities[73] Significant Related Party Transactions This section discloses the progress of the company's EPC general contracting project related party transaction with Suqian Xinshengjie Cultural Tourism Development Co., Ltd., and related party fund lending with Guangxi China-Malaysia Qinzhou Industrial Park Investment Holding Group Co., Ltd. and Suzhou Hengran Energy Saving Technology Co., Ltd - The company won the bid for the Xinshengjie Area Renovation Project EPC General Contracting Project from related party Suqian Xinshengjie Cultural Tourism Development Co., Ltd., with a contract value of approximately 1.55 billion Yuan, and recognized 717,400 Yuan in management fee income during the current reporting period[74] - The company lent 4,857,143.00 Yuan in principal to Guangxi China-Malaysia Qinzhou Industrial Park Investment Holding Group Co., Ltd. at an annual interest rate of 8.5%[327] - The company's wholly-owned subsidiary Zhongheng Energy Saving lent 9,114,000.00 Yuan in principal to Suzhou Hengran Energy Saving Technology Co., Ltd. at an annual interest rate of 6%[327] Significant Contracts and Their Performance This section discloses significant guarantees performed and unfulfilled by the company during the reporting period, primarily involving guarantees for subsidiaries, with a period-end guarantee balance of 0 Yuan Company's Total Guarantee Amount (Including Guarantees for Subsidiaries) | Indicator | Amount (Yuan) | | :--- | :--- | | Total Guarantee Amount for Subsidiaries During Reporting Period | 14,000,000.00 | | Total Guarantee Balance for Subsidiaries at Period-End (B) | 0.00 | | Total Guarantee Amount (A+B) | 0.00 | | Ratio of Total Guarantee Amount to Company's Net Assets (%) | 0.00 | - On May 18, 2023, the company's 2022 Annual Shareholders' Meeting approved a proposal to provide a maximum guarantee limit of 50 million Yuan for its wholly-owned subsidiary Zhongheng Zhuochuang (Chongqing) Engineering Design Co., Ltd., with a period-end guarantee balance of 0 Yuan[76] - On February 24, 2022, the company's Fourth Board of Directors' Twenty-First Meeting approved a proposal to provide a maximum guarantee limit of 195 million Yuan for its wholly-owned subsidiary Zhongheng Design Group Central China Headquarters (Hubei) Co., Ltd., with a period-end guarantee balance of 0 Yuan[76] Section 7 Share Changes and Shareholder Information Changes in Share Capital During the reporting period, the company's total share capital and equity structure remained unchanged and stable - During the reporting period, the company's total share capital and equity structure remained unchanged[77] Shareholder Information As of the end of the reporting period, the company had 26,989 common shareholders; controlling shareholder Suzhou Saipu Growth Investment Management Co., Ltd. held 36.77% of shares, while actual controller Feng Zhenggong directly and indirectly held 20.69% of the company's equity; during the period, the company's share repurchase special securities account increased its holdings by 3.5 million shares, accounting for 1.27% of total share capital - As of the end of the reporting period, the total number of common shareholders was 26,989[77] Top Ten Shareholders' Shareholding as of Period-End | Shareholder Name | Period-End Shareholding (shares) | Ratio (%) | Share Status | Amount (shares) | | :--- | :--- | :--- | :--- | :--- | | Suzhou Saipu Growth Investment Management Co., Ltd. | 101,450,008 | 36.77 | Pledged | 44,100,000 | | Feng Zhenggong | 19,755,714 | 7.16 | None | 0 | | Zhang Jin | 7,260,460 | 2.63 | None | 0 | | Suzhou Radio and Television Media Group Co., Ltd. | 6,355,932 | 2.30 | None | 0 | | Zhongheng Design Group Co., Ltd. - First Phase Employee Stock Ownership Plan | 5,429,948 | 1.97 | None | 0 | | Zhongheng Design Group Co., Ltd. Repurchase Special Securities Account | 3,500,000 | 1.27 | None | 0 | | Suzhou Historical and Cultural City Development Group Venture Capital Co., Ltd. | 3,177,966 | 1.15 | None | 0 | | Lu Xuejun | 3,042,964 | 1.10 | None | 0 | | Liao Chen | 2,569,228 | 0.93 | None | 0 | | Zhu Dan | 2,182,300 | 0.79 | None | 0 | - The company's actual controller Feng Zhenggong directly and indirectly holds a total of 20.69% of the company's equity[110] - The company's share repurchase special securities account increased its holdings by 3,500,000 shares compared to the end of 2023, accounting for 1.27% of the company's total share capital[80] Section 8 Preferred Shares Related Information Preferred Shares Related Information The company had no preferred shares related information during the reporting period - The company had no preferred shares related information during the current reporting period[81] Section 9 Bonds Related Information Corporate Bonds (Including Enterprise Bonds) and Non-Financial Enterprise Debt Financing Instruments The company had no corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments during the reporting period - The company had no corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments during the current reporting period[82] Convertible Corporate Bonds The company had no convertible corporate bonds related information during the reporting period - The company had no convertible corporate bonds during the current reporting period[82] Section 10 Financial Report Audit Report This semi-annual report is unaudited - This semi-annual report is unaudited[2][83] Financial Statements This section provides the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity, comprehensively presenting the company's financial position and operating results at the end of the reporting period, with key financial data summarized in Section 2 - The consolidated balance sheet shows total assets of 3,340,253,414.33 Yuan and net assets attributable to shareholders of the listed company of 1,504,887,028.59 Yuan at period-end[11][85] - The consolidated income statement shows current period operating revenue of 666,728,119.27 Yuan and net profit attributable to parent company shareholders of 71,059,841.77 Yuan[11][91] - The consolidated cash flow statement shows net cash flow from operating activities of 38,843,127.74 Yuan, net cash flow from investing activities of -185,842,554.47 Yuan, and net cash flow from financing activities of 82,042,632.26 Yuan[11][97] Company Basic Information This section details the company's overview, including its establishment background, share capital change history, business scope, and subsidiaries within the consolidated financial statement scope; since its listing in 2014, the company's total share capital has reached 275,905,778.00 shares through multiple share capital changes and equity incentives, continuously expanding its business scope - The company changed its name from Suzhou Industrial Park Design Institute Co., Ltd. in August 2015 and was listed on the Shanghai Stock Exchange in December 2014[108] - As of June 30, 2024, the company's total issued share capital was 275,905,778.00 shares, with a registered capital of 275,373,728.00 Yuan[110] - The company's business scope includes engineering consulting, engineering design, engineering supervision, project management, and EPC for various domestic and international civil construction projects and industrial engineering projects[110] - As of June 30, 2024, the company's consolidated financial statement scope includes 16 subsidiaries, such as Zhongheng Consulting, Yuanqu Planning, Zhuochuang Design, and Huazao Design[110][111][112] - The company's actual controller is Feng Zhenggong, who directly and indirectly holds a total of 20.69% of the company's equity[110] Basis of Financial Statement Preparation This section states that the company's financial statements are prepared on a going concern basis, adhering to the Accounting Standards for Business Enterprises issued by the Ministry of Finance and relevant regulations of the China Securities Regulatory Commission - The company's financial statements are prepared on a going concern basis, complying with the requirements of Accounting Standards for Business Enterprises[113][114][115] - There are no matters or circumstances that could cast significant doubt on the company's ability to continue as a going concern within 12 months from the end of the reporting period[114] Significant Accounting Policies and Estimates This section elaborates on the significant accounting policies and estimates followed by the company in preparing its financial statements, covering business combinations, consolidated financial statements, financial instruments, inventories, contract assets, long-term equity investments, fixed assets, intangible assets, employee benefits, revenue recognition, government grants, deferred income tax, and leases, ensuring the truthfulness and accuracy of financial reporting - The company adheres to Accounting Standards for Business Enterprises, with its accounting year running from January 1 to December 31 of the Gregorian calendar, and its functional currency being Renminbi[115][116][118] - Business combinations are classified into those under common control and those not under common control, measured at carrying value and fair value, respectively[120] - Financial assets are classified as measured at amortized cost, at fair value through other comprehensive income, or at fair value through profit or loss[125] - The company estimates expected credit losses for financial assets measured at amortized cost and financial assets (debt instruments) measured at fair value through other comprehensive income[132] - Revenue is recognized when the customer obtains control of the related goods or services, classified as performance over time or at a point in time based on the nature of the performance obligation[168][169] - Government grants are classified as asset-related or income-related, either reducing the carrying amount of assets or recognized as deferred income, or directly recognized in current profit and loss[172][173] - As a lessee, the company recognizes right-of-use assets and lease liabilities for leases other than short-term leases and leases of low-value assets[175] Taxation This section lists the company's main tax categories and rates, including VAT, urban maintenance and construction tax, corporate income tax, education surcharge, and local education surcharge; the company and several subsidiaries enjoy a 15% corporate income tax preferential rate due to high-tech enterprise certification or Western Development policy Main Tax Categories and Rates | Tax Category | Taxable Basis | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax (VAT) | Sales of Goods and Taxable Services Revenue | 5%, 6%, 9%, 13% | | Urban Maintenance and Construction Tax | Actual VAT Paid | 5%, 7% | | Corporate Income Tax | Taxable Income | 15%, 25%, Overseas Tax Rate | | Education Surcharge | Actual VAT Paid | 3% | | Local Education Surcharge | Actual VAT Paid | 2% | - The company and its wholly-owned subsidiary Suzhou Huazao Architectural Design Co., Ltd., and holding subsidiaries Zhejiang Province Engineering Consulting Co., Ltd., Zhongheng Zhuochuang (Chongqing) Engineering Design Co., Ltd., and Zhongheng Design Group Engineering Consulting Co., Ltd. all enjoy a 15% corporate income tax preferential rate due to high-tech enterprise certification or Western Development policy[181][182] Notes to Consolidated Financial Statement Items This section provides detailed notes to consolidated financial statement items, including cash and cash equivalents, financial assets held for trading, notes receivable, accounts receivable, contract assets, other receivables, long-term equity investments, fixed assets, construction in progress, goodwill, short-term borrowings, employee benefits payable, provisions, operating revenue and costs, and various expenses and gains; financial assets held for trading and short-term borrowings significantly increased, while notes receivable and provisions substantially decreased, reflecting changes in the company's wealth management investments and litigation resolutions Changes in Major Consolidated Financial Statement Items (Period-End vs. Period-Beginning) | Item | Period-End Balance (Yuan) | Period-Beginning Balance (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 333,536,041.19 | 401,191,151.06 | -16.86 | | Financial Assets Held for Trading | 536,999,708.03 | 406,162,615.65 | 32.21 | | Notes Receivable | 9,965,550.03 | 32,679,718.44 | -69.51 | | Accounts Receivable | 671,187,435.98 | 773,644,255.91 | -13.24 | | Prepayments | 31,363,239.80 | 18,799,899.20 | 66.83 | | Other Receivables | 102,431,412.51 | 63,919,896.00 | 60.25 | | Short-Term Borrowings | 370,238,262.50 | 249,798,777.78 | 48.21 | | Employee Benefits Payable | 179,392,230.70 | 269,261,730.38 | -33.38 | | Taxes Payable | 15,128,114.18 | 39,706,012.12 | -61.90 | | Provisions | 2,075,480.82 | 10,176,660.82 | -79.61 | - Financial assets held for trading increased by 32.21%, primarily due to increased purchases of bank wealth management products during the period[53][184] - Notes receivable decreased by 69.51%, mainly due to maturity and endorsement of bills held during the period[53][185] - Short-term borrowings increased by 48.21%, primarily due to new working capital loans during the period[53][247] - Provisions decreased by 79.61%, mainly due to the reversal of provisions following successful litigation during the period[53][265] - Net cash flow from operating activities increased by 54.5856 million Yuan year-on-year, primarily due to a reduction in subcontractor payments by the headquarters during the period[12][296] - The company processed non-recourse accounts receivable factoring, derecognizing accounts receivable with a carrying amount of 65,718,213.14 Yuan[314] Research and Development Expenses This section details the company's R&D expenses for the reporting period, totaling 39,768,072.38 Yuan, primarily composed of personnel costs, with all R&D expenses expensed R&D Expenses by Nature of Expense | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Personnel Expenses | 35,569,637.72 | 36,893,073.52 | | Direct Input | 2,525,504.92 | 3,853,306.45 | | Asset Depreciation and Amortization | 939,354.16 | 986,605.63 | | External R&D Outsourcing | 733,575.58 | 270,928.73 | | Total | 39,768,072.38 | 42,003,914.33 | | Of which: Expensed R&D Expenses | 39,768,072.38 | 42,003,914.33 | | Capitalized R&D Expenses | - | - | - Total R&D expenses for the current period amounted to 39,768,072.38 Yuan, a year-on-year decrease of 5.32%[50][300] - All R&D expenses were expensed and not capitalized[300] Changes in Consolidation Scope This section discloses changes in the company's consolidation scope, with the company deregistering its wholly-owned subsidiary Zhongheng Design Group Engineering Construction Co., Ltd. during the reporting period - The company completed the industrial and commercial deregistration of its wholly-owned subsidiary Zhongheng Design Group Engineering Construction Co., Ltd. on June 11, 2024[302] Interests in Other Entities This section details the company's interests in subsidiaries, joint ventures, and associates, including each subsidiary's main operating location, registered capital, business nature, and shareholding ratio, as well as key financial information for significant non-wholly-owned subsidiaries and associates; the company owns 16 subsidiaries and holds interests in associates such as Guangxi China-Malaysia, Guanghui City, and Yuanqu Surveying and Mapping - The company owns 16 subsidiaries, including Zhongheng Consulting, Yuanqu Planning, Zhuochuang Design, and Huazao Design, with shareholding ratios ranging from 51% to 100%[303][111][112] Key Financial Information of Significant Non-Wholly-Owned Subsidiaries (Current Period Amount) | Subsidiary Name | Minority Shareholding Ratio (%) | Current Period Profit/Loss Attributable to Minority Shareholders (Yuan) | Period-End Minority Interest Balance (Yuan) | | :--- | :--- | :--- | :--- | | Zhongheng Design Group Engineering Consulting Co., Ltd. | 16.75 | 2,356,390.36 | 6,170,793.93 | | Zhejiang Province Engineering Consulting Co., Ltd. | 10 | 8,503.18 | 14,238,148.50 | - The company accounts for its investments in associates such as Guangxi China-Malaysia Yuanqu Lianheng Planning and Design Institute Co., Ltd., Guanghui City (Chongqing) Technology Co., Ltd., and Yuance Information Technology Co., Ltd. using the equity method[307] Key Financial Information of Significant Associates (Current Period Amount) | Associate Name | Operating Revenue (Yuan) | Net Profit (Yuan) | | :--- | :--- | :--- | | Guangxi China-Malaysia | 2,296,755.78 | -1,429,227.03 | | Guanghui City | 12,946,890.11 | 1,486,940.12 | | Yuanqu Surveying and Mapping | 201,523,180.84 | -258,372.59 | Government Grants This section discloses that the company's total government grants recognized in current profit and loss during the reporting period amounted to 915,397.54 Yuan, primarily income-related grants Government Grants Recognized in Current Profit and Loss | Type | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Income-Related | 915,397.54 | 6,665,293.03 | | Total | 915,397.54 | 6,665,293.03 | Risks Related to Financial Instruments This section describes the company's exposure to credit risk, liquidity risk, and market risk (including foreign exchange risk, interest rate risk, and other price risks), and outlines the risk management policies and procedures adopted by the Board of Directors and management to mitigate these risks - The company faces credit risk, liquidity risk, and market risk (foreign exchange risk, interest rate risk, and other price risks)[312][313] - The company's Board of Directors is responsible for setting risk management objectives and policies, while management is responsible for designing and implementing risk management procedures[312] - Liquidity risk is managed by monitoring cash balances, marketable securities, and 12-month cash flow forecasts[312] - During the current reporting period, the company processed non-recourse accounts receivable factoring, derecognizing accounts receivable with a carrying amount of 65,718,213.14 Yuan[314] Disclosure of Fair Value This section discloses the period-end fair value of the company's assets and liabilities measured at fair value, primarily including financial assets held for trading and other equity instrument investments, and explains the valuation techniques and parameters for Level 3 fair value measurements Period-End Fair Value of Assets and Liabilities Measured at Fair Value | Item | Level 3 Fair Value Measurement (Yuan) | Total (Yuan) | | :--- | :--- | :--- | | Financial Assets Held for Trading | 536,999,708.03 | 536,999,708.03 | | Other Equity Instrument Investments | 144,272,069.00 | 144,272,069.00 | | Total Assets Continuously Measured at Fair Value | 681,271,777.03 | 681,271,777.03 | - For financial instruments not traded in active markets, the company uses valuation techniques such as the discounted cash flow model, recent financing price method, and cost method to determine fair value[317] - Key inputs for valuation techniques primarily include risk-free rate, benchmark interest rate, expected rate of return, equity risk premium, illiquidity discount, financing price, and net assets[317] Reconciliation Information for Recurring Level 3 Fair Value Measurements | Item | Prior Year-End Balance (Yuan) | Total Gains or Losses Recognized in Profit or Loss for the Current Period (Yuan) | Purchases, Issuances, Sales, and Settlements of Purchases (Yuan) | Settlements (Yuan) | Period-End Balance (Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Financial Assets Held for Trading | 406,162,615.65 | 7,784,441.80 | 398,999,427.95 | 275,946,777.37 | 536,999,708.03 | | Other Non-Current Financial Assets | 140,807,034.16 | -2,533,465.16 | 5,998,500.00 | - | 144,272,069.00 | | Total | 546,969,649.81 | 5,250,976.64 | 404,997,927.95 | 275,946,777.37 | 681,271,777.03 | Related Parties and Related Party Transactions This section discloses the company's parent company, subsidiaries, joint ventures, associates, and other related parties, and details significant related party transactions during the reporting period, including purchases/sales of goods/acceptance of services, provision of services, related party fund lending, EPC general contracting projects, and accounts receivable factoring - The company's parent company is Suzhou Saipu Growth Investment Management Co., Ltd., with a 36.77% shareholding, and the ultimate controlling party is Feng Zhenggong[319] - Details of the company's subsidiaries are provided in Note 'X. Interests in Other Entities'[320] - Significant joint ventures or associates of the company include Yuance Information Technology Co., Ltd., Guangxi China-Malaysia Yuanqu Lianheng Planning and Design Institute Co., Ltd., and others[321][322] Related Party Transactions for Purchases/Sales of Goods/Acceptance of Services (Current Period Amount) | Related Party | Related Party Transaction Content | Current Period Amount (Yuan) | | :--- | :--- | :--- | | Suzhou Hengxing Property Service Management Co., Ltd. | Labor Procurement | 2,093,518.87 | | Suzhou Xinjianyuan Geotechnical Engineering Co., Ltd. | Labor Procurement | 22,641.51 | Related Party Transactions for Provision of Services (Current Period Amount) | Related Party | Related Party Transaction Content | Current Period Amount (Yuan) | | :--- | :--- | :--- | | Suzhou Hengxing Property Service Management Co., Ltd. | Parking Fee Income | 505,727.66 | | Suqian Xinshengjie Cultural Tourism Development Co., Ltd. | Provision of Project Management Services | 717,427.20 | | Suqian Xinshengjie Cultural Tourism Development Co., Ltd. | Provision of Design Services | 227,811.32 | | Guangxi China-Malaysia Qinzhou Industrial Park Hengchuang Construction Development Co., Ltd. | Advance Interest Income | 194,743.92 | - The company signed a loan agreement with Guangxi China-Malaysia Qinzhou Industrial Park Investment Holding Group Co., Ltd., lending 4,857,143.00 Yuan in principal at an annual interest rate of 8.5%[327] - The company's wholly-owned subsidiary Zhongheng Energy Saving lent 9,114,000.00 Yuan in principal to Suzhou Hengran Energy Saving Technology Co., Ltd. at an annual interest rate of 6%[327] - The company signed an EPC general contracting agreement with related party Suqian Xinshengjie Cultural Tourism Development Co., Ltd., with the cumulative net amount of engineering work applied for settlement (company remuneration) totaling 17,633,570.88 Yuan in the current period[328] - The company engaged in non-recourse accounts receivable factoring with Suqian Chanfa Commercial Factoring Co., Ltd., transferring 60 million Yuan of accounts receivable from Xinshengjie Cultural Tourism[328][329] Share-Based Payment This section discloses the implementation of the company's 2022 stock option incentive plan and employee stock ownership plan, including grantees, exercise prices, exercisable quantities, and share-based payment expenses recognized in the current period; during the reporting period, the company recognized 3,123,383.51 Yuan in share-based payment expenses for the employee stock ownership plan - The company's 2022 stock option incentive plan granted 5.05 million stock options to 146 grantees, with an exercise price of 9.35 Yuan per share[333] - The company's 2022 employee stock ownership plan granted 5,429,948.00 shares to 105 grantees, with a grant price of 4.43 Yuan per share[333] - On August 25, 2024, the second exercise period of the company's 2022 stock option incentive plan met the exercise conditions, with 2.431 million options exercisable this time[334] Current Period Share-Based Payment Expenses | Grantee Category | Equity-Settled Share-Based Payment Expenses (Yuan) | | :--- | :--- | | Employee Stock Ownership | 3,123,383.51 | | Total | 3,123,383.51 | Commitments and Contingencies This section states that the company had no significant commitments or contingencies requiring disclosure as of the balance sheet date - The company had no significant commitments requiring disclosure