中船科技(600072) - 2019 Q4 - 年度财报

Definitions This section provides definitions for key professional terms and company abbreviations used throughout the report - This chapter defines key professional terms and company abbreviations, including CSSC Group, CSSC Ninth Design and Research Institute, PPP, and EPC, to enhance report comprehension[9] Company Profile and Key Financial Indicators This section presents the company's fundamental information and a summary of its financial performance over the past three years Company Information and Contact Details This section provides the company's basic business information, stock profile, contact details, and information disclosure channels - The company's full name is CSSC Technology Co., Ltd., with stock code 600072, listed on the Shanghai Stock Exchange[10][14] - The company's domestic accounting firm is Tianjian Certified Public Accountants (Special General Partnership)[15] Key Accounting Data and Financial Indicators for the Past Three Years In 2019, the company achieved operating revenue of 3.328 billion yuan, a year-on-year increase of 1.96%, with net profit attributable to shareholders significantly growing by 110.54% to 137.75 million yuan, primarily due to asset disposal gains, and net cash flow from operating activities turning positive at 256.06 million yuan Main Accounting Data | Main Accounting Data | 2019 (Yuan) | 2018 (Yuan) | YoY Change (%) | 2017 (Yuan) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 3,328,387,821.20 | 3,264,373,125.15 | 1.96 | 4,263,628,598.18 | | Net Profit Attributable to Shareholders of the Listed Company | 137,750,838.39 | 65,427,430.33 | 110.54 | 30,419,191.59 | | Net Profit Attributable to Shareholders of the Listed Company After Deducting Non-recurring Gains and Losses | -74,182,215.06 | -78,412,167.69 | Not Applicable | 7,702,375.42 | | Net Cash Flow from Operating Activities | 256,063,314.56 | -333,901,731.36 | Not Applicable | -1,054,616,839.10 | | Net Assets Attributable to Shareholders of the Listed Company | 3,882,673,958.99 | 3,718,262,301.58 | 4.42 | 3,653,201,662.71 | | Total Assets | 9,195,870,028.85 | 10,527,625,393.33 | -12.65 | 10,945,048,146.16 | Key Financial Indicators | Key Financial Indicators | 2019 | 2018 | YoY Change (%) | 2017 | | :--- | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (yuan/share) | 0.187 | 0.089 | 110.11 | 0.041 | | Weighted Average Return on Net Assets (%) | 3.62 | 1.78 | Increased by 1.84 percentage points | 0.84 | - Significant changes in financial indicators are attributed to: Net profit significantly increased due to substantial asset disposal gains from the transfer of Changxing Island land and 50% equity in Yangzhou Sanwan Investment Development Co., Ltd[19] Total assets decreased following the deconsolidation of Yangzhou Sanwan after the equity transfer[19] Net operating cash flow turned positive primarily due to increased collections from CSSC Ninth Design and Research Institute's general contracting business[19] Non-recurring Gains and Losses Items and Amounts In 2019, the company's total non-recurring gains and losses amounted to 211.93 million yuan, constituting a major portion of the net profit for the year, with non-current asset disposal gains and losses reaching 232.80 million yuan, primarily from the transfer of subsidiary equity and land assets Non-recurring Gains and Losses Items and Amounts | Non-recurring Gains and Losses Item | 2019 Amount (Yuan) | 2018 Amount (Yuan) | 2017 Amount (Yuan) | | :--- | :--- | :--- | :--- | | Non-current Asset Disposal Gains and Losses | 232,799,047.26 | 146,810,093.43 | -2,906,826.56 | | Government Subsidies Included in Current Profit/Loss | 9,425,414.29 | 14,642,070.29 | 22,389,132.59 | | Other Non-operating Income and Expenses | -3,433,175.63 | 5,141,511.04 | 1,875,585.09 | | Total | 211,933,053.45 | 143,839,598.02 | 22,716,816.17 | - Non-current asset disposal gains primarily stemmed from the transfer of 50% equity in Yangzhou Sanwan Company by subsidiary CSSC Ninth Design and Research Institute and the disposal of Changxing Island land and structures by the company's headquarters[22] Company Business Overview This section outlines the company's core businesses, operating model, and relevant industry conditions, highlighting its strategic focus and competitive advantages Main Business, Operating Model, and Industry Conditions The company's core business, primarily through CSSC Ninth Design and Research Institute, encompasses engineering design, general contracting, and land development, with a strategic focus on marine-related projects amidst a slowing construction sector and challenging shipbuilding industry - The company's core business is primarily conducted by its wholly-owned subsidiary, CSSC Ninth Design and Research Institute, covering engineering design, survey, consulting, supervision, general contracting, and land development services[25] - CSSC Ninth Design and Research Institute is implementing a "3+2" strategic layout, expanding from traditional design consulting, general contracting, and urbanization construction to include technology industrialization and smart factory digital platform construction[26] - Industry analysis indicates a slowdown in construction output growth and a severe decline in new vessel demand for the shipbuilding industry in 2019, impacted by global economic conditions[28] Explanation of Major Changes in Main Assets During the reporting period, the company undertook two significant asset sales, including the transfer of 50% equity of Yangzhou Sanwan Investment Development Co., Ltd. for 456 million yuan and the sale of Changxing Island land use rights for approximately 118 million yuan - The company successfully transferred 50% equity in Yangzhou Sanwan Investment Development Co., Ltd. for 456 million yuan through public listing[30] - The company transferred state-owned construction land use rights on Changxing Island to related party Jiangnan Heavy Industry Co., Ltd. for approximately 118 million yuan via a non-public agreement[30] Analysis of Core Competitiveness The company's core competitiveness primarily resides in its wholly-owned subsidiary CSSC Ninth Design and Research Institute, which holds a leading position in marine engineering planning and design, possessing top-tier qualifications across 21 industries, supported by 219 effective patents - CSSC Ninth Design and Research Institute holds comprehensive Grade A engineering design and survey qualifications, enabling it to provide construction engineering services across 21 industries, including overseas general contracting and Level 1 confidentiality[32][34][36] - The company's comprehensive business layout spans design consulting, general contracting, investment and financing, technology industrialization, and smart factory digital platform innovation, establishing a complete industrial chain service capability[31][33] - Strong technological innovation is evidenced by 219 effective patents (including 68 invention patents), establishing core advantages in smart shipyards, luxury cruise interiors, and energy-saving environmental protection, supporting business expansion[33] Discussion and Analysis of Operations This section provides a detailed discussion and analysis of the company's operating performance, key financial metrics, investment activities, and future development plans Discussion and Analysis of Operations In 2019, the company's operating revenue grew by 1.96% to 3.328 billion yuan, driven by increases in engineering design and general contracting, while land development revenue declined, and subsidiaries advanced strategic projects and market positions - Company operating revenue showed stable growth, primarily driven by engineering design, consulting, and supervision services (+24.16%) and engineering general contracting services (+5.94%)[37] - Land development business revenue significantly declined due to policy and market shifts, leading to changes in development models, with the company mitigating impact by transferring related project equity[37] - Subsidiaries CSSC Ninth Design and Research Institute and CSSC Huahai achieved new progress, with the former securing multiple design and general contracting projects and the latter signing several marine channel equipment contracts[37][38] Key Operating Performance During the Reporting Period In 2019, the company achieved operating revenue of 3.328 billion yuan, a 1.96% year-on-year increase, and net profit attributable to parent company shareholders of 137.75 million yuan, up 110.54%, with profit growth mainly driven by approximately 231 million yuan in non-recurring gains and losses from asset disposals, and engineering general contracting remaining the primary revenue source Business Segments Revenue Breakdown | Business Segment | Operating Revenue (Yuan) | Proportion of Total Revenue (%) | | :--- | :--- | :--- | | Engineering Design, Survey, Consulting, and Supervision | 523,786,142.69 | 15.7 | | Engineering General Contracting | 2,706,993,686.19 | 81.4 | | Land Development Services | 14,215,236.29 | 0.4 | | Marine Equipment | 55,529,062.76 | 1.7 | - Net profit attributable to parent company shareholders significantly increased, primarily driven by non-recurring gains and losses totaling approximately 231 million yuan, from the transfer of Changxing Island land and 50% equity in Yangzhou Sanwan[38] - Non-recurring net profit loss narrowed, primarily due to subsidiary CSSC Huahai's strategic contraction of its loss-making marine equipment business[38] Analysis of Main Business In 2019, engineering general contracting was the largest revenue component with a low gross margin, while engineering design and consulting revenue grew but with declining gross margin; land development and marine equipment revenues significantly decreased, though marine equipment's gross margin improved, and financial expenses notably declined due to reduced interest, with R&D investment increasing to 110 million yuan Key Financial Data Comparison | Item | Current Period (Yuan) | Prior Period (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 3,328,387,821.20 | 3,264,373,125.15 | 1.96 | | Operating Cost | 3,048,016,914.76 | 2,935,504,343.97 | 3.83 | | Financial Expenses | 54,382,707.99 | 173,524,118.88 | -68.66 | | Net Cash Flow from Operating Activities | 256,063,314.56 | -333,901,731.36 | Not Applicable | Revenue, Cost, and Gross Margin by Product | By Product | Operating Revenue (Yuan) | Operating Cost (Yuan) | Gross Margin (%) | YoY Change in Operating Revenue (%) | | :--- | :--- | :--- | :--- | :--- | | Engineering Design, Survey, Consulting, and Supervision | 523,786,142.69 | 431,527,182.11 | 17.61 | 24.16 | | Engineering General Contracting | 2,706,993,686.19 | 2,546,128,149.29 | 5.94 | 3.86 | | Land Development Services | 14,215,236.29 | 0 | 100.00 | -85.98 | | Marine Equipment | 55,529,062.76 | 47,479,230.91 | 14.50 | -49.81 | - Sales to the top five customers constituted 53.73% of total annual sales, with related party sales at 19.63%, indicating a degree of reliance on key clients and affiliates[47] R&D Investment | R&D Investment | Amount (Yuan) | | :--- | :--- | | Current Period Capitalized R&D Investment | 109,713,680.59 | | Total R&D Investment as % of Operating Revenue | 3.30% | | Number of Company R&D Personnel | 270 | | Proportion of R&D Personnel to Total Company Personnel (%) | 17.40% | Analysis of Assets and Liabilities As of the end of 2019, the company's total assets decreased by 12.65% to 9.196 billion yuan, with significant changes in asset structure including a substantial increase in cash and cash equivalents and a decrease in prepayments, inventories, and long-term receivables due to asset disposals, while the liability structure saw a reduction in short-term liabilities and an increase in long-term borrowings, reflecting debt optimization Asset Items Changes | Asset Item | Period-end (Yuan) | Period-beginning (Yuan) | Change (%) | Main Reason | | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 2,354,000,000 | 1,287,000,000 | 82.87 | Increased collection of project payments | | Prepayments | 211,000,000 | 1,065,000,000 | -80.21 | Disposal of Yangzhou Sanwan equity | | Inventories | 734,000,000 | 1,293,000,000 | -43.19 | Disposal of Yangzhou Sanwan equity | | Long-term Receivables | 1,644,000,000 | 2,346,000,000 | -29.94 | Disposal of Yangzhou Sanwan equity | Liability Items Changes | Liability Item | Period-end (Yuan) | Period-beginning (Yuan) | Change (%) | Main Reason | | :--- | :--- | :--- | :--- | :--- | | Notes Payable | 11,000,000 | 218,000,000 | -94.89 | Decrease in notes payable | | Accounts Payable | 1,248,000,000 | 831,000,000 | 50.15 | Increase in project payables | | Non-current Liabilities Due Within One Year | 201,000,000 | 950,000,000 | -78.83 | Decrease in long-term borrowings due within 1 year | | Long-term Borrowings | 2,113,000,000 | 1,260,000,000 | 67.70 | Increase in long-term borrowings | Analysis of Investment Status and Major Asset Sales During the reporting period, the company's investment activities included a planned but terminated major asset restructuring to acquire Haiying Group, and two successful major asset sales: the transfer of 50% equity in Yangzhou Sanwan for 456 million yuan and Changxing Island land for approximately 118 million yuan, which generated significant non-recurring gains - The company's planned major asset restructuring to acquire 100% equity of Haiying Enterprise Group Co., Ltd. by issuing shares was not approved by the CSRC and terminated in December 2019[68] - The company successfully completed two major asset sales: transferring 50% equity in Yangzhou Sanwan for 456 million yuan and transferring Changxing Island land to a related party for approximately 118 million yuan[70][71] Analysis of Major Holding and Associate Companies The company's primary profit contributor is its wholly-owned subsidiary CSSC Ninth Design and Research Institute, which reported a net profit of 105 million yuan in 2019, while another wholly-owned subsidiary, CSSC Huahai Marine Equipment Co., Ltd., incurred a net loss of 41.15 million yuan, and its associate companies, Shanghai Jiangnan Shipbuilding Pipe Industry Co., Ltd. and Guangzhou Longxue Pipe Industry Co., Ltd., were profitable Major Holding and Associate Companies Performance | Investee Name | Shareholding (%) | 2019 Operating Revenue (Ten Thousand Yuan) | 2019 Net Profit (Ten Thousand Yuan) | Main Business | | :--- | :--- | :--- | :--- | :--- | | CSSC Ninth Design and Research Institute Co., Ltd. | 100.00 | 325,852 | 10,500 | Engineering survey, design, consulting, general contracting | | CSSC Huahai Marine Equipment Co., Ltd. | 100.00 | 4,629 | -4,115 | Marine cargo access equipment, etc | | Shanghai Jiangnan Shipbuilding Pipe Industry Co., Ltd. | 45.00 | 21,182 | 39 | Metal pipe fabrication and surface treatment | | Guangzhou Longxue Pipe Industry Co., Ltd. | 28.57 | 17,817 | 247 | Metal pipe fabrication design, manufacturing, etc | Discussion and Analysis of Company's Future Development Looking ahead, the company anticipates the global shipbuilding industry to remain at a low point in 2020, but infrastructure investment is expected to rebound, offering opportunities for the construction sector, with the company focusing on improving development quality and strengthening market value management, while addressing key risks including policy, cash flow, human resources, production management, and legal disputes - Industry trends indicate limited global new vessel transactions in 2020, but a potential rebound in domestic infrastructure investment, with urban clusters and new infrastructure offering opportunities for the construction sector[74] - The 2020 operating plan projects approximately 1.75 billion yuan in operating revenue (adjusted for accounting standard changes), focusing on enhancing development quality, strengthening accounts receivable collection, improving market value management, and subsidiaries expanding core businesses and markets[76] - Key risks include policy risks from strict PPP project controls, cash flow risks due to long government project collection cycles, human resources risks from talent loss, production management risks in large-scale projects, and potential legal dispute risks from complex project relationships[77][78] Significant Matters This section details the company's key events during the reporting period, including profit distribution, changes in accounting policies, major litigation, and significant related party transactions Profit Distribution and Dividends The company's board of directors proposed a 2019 cash dividend plan to distribute 0.57 yuan (tax inclusive) per 10 shares based on the total share capital, totaling approximately 41.97 million yuan in cash, representing 30.47% of the net profit attributable to parent company shareholders for the year, subject to shareholder approval Dividend Distribution Plan | Dividend Year | Dividend per 10 Shares (Yuan, Tax Incl.) | Cash Dividend Amount (Yuan, Tax Incl.) | Ratio to Net Profit Attributable to Ordinary Shareholders (%) | | :--- | :--- | :--- | :--- | | 2019 | 0.57 | 41,966,243.33 | 30.47 | | 2018 | 0.2 | 14,724,997.66 | 22.50 | | 2017 | 0 | 0 | 0 | Changes in Accounting Policies and Estimates During the reporting period, the company implemented significant accounting policy changes as required by the Ministry of Finance, including adopting new financial statement formats with retrospective adjustments and transitioning to the "expected credit loss model" for financial asset impairment measurement from January 1, 2019, also with retrospective adjustments to opening balances - The company adopted the 2019 revised financial statement format by the Ministry of Finance, retrospectively adjusting 2018 statement items[87][88] - Effective January 1, 2019, the company adopted new financial instrument standards (CAS 22, 23, 24, 37), transitioning from an "incurred loss model" to an "expected credit loss model" for financial asset impairment measurement[88] - Implementation of new financial instrument standards led to adjustments in the January 1, 2019 financial statements, with retained earnings reduced by 19.21 million yuan and other comprehensive income increased by 49.90 million yuan[90] Major Litigation and Arbitration Matters During the reporting period, the company was involved in two major lawsuits: an engineering contract dispute with Beijing Zhongguancun for 90.50 million yuan, where the company won partial compensation in the first instance but faces an appeal, and a construction contract dispute where subsidiary CSSC Ninth Design and Research Institute was sued by Shandong Construction Group for 95.53 million yuan, with the case awaiting trial - The company is involved in a 90.50 million yuan engineering fee dispute with Beijing Zhongguancun for the Xinjiang Cultural and Sports Center project; while the first instance awarded 41.32 million yuan plus interest to the company, the opposing party has appealed[101][102] - Subsidiary CSSC Ninth Design and Research Institute faces a lawsuit from Shandong Construction Group over a construction contract dispute, with claims for engineering fees and interest totaling 95.53 million yuan for the Weifang Changle Jiulong Lake Community Resettlement Housing project[102] Major Related Party Transactions The company engaged in significant related party transactions during the period, including the transfer of Changxing Island land, a planned but terminated asset restructuring with CSSC Group, and extensive daily operational transactions for goods and services, particularly the provision of labor to related parties - The company's non-public agreement to transfer Changxing Island land to related party Jiangnan Heavy Industry Co., Ltd. constituted a major asset sale related party transaction[114] - The company engaged in extensive daily operating related party transactions with CSSC Group and its subsidiaries, including procurement, sales, and labor provision, with total transaction amounts exceeding 1 billion yuan[113] - Significant creditor-debtor relationships existed with related parties from normal operations, with 839 million yuan in funds provided to and 350 million yuan received from related parties at period-end[125] Changes in Ordinary Shares and Shareholder Information This section details the company's share capital stability, the lifting of restricted shares held by the controlling shareholder, and the composition of its major shareholders Share Capital Changes and Shareholder Information During the reporting period, the company's total share capital remained unchanged, while the controlling shareholder CSSC Group's 135.47 million restricted shares were lifted on November 4, 2019, with the company having 110,129 shareholders at period-end, and its top two shareholders being state-owned legal entities with related party relationships - The company's total ordinary shares and share capital structure remained unchanged during the reporting period[148] - Controlling shareholder CSSC Group's 135,471,113 restricted shares were lifted on November 4, 2019[150] Top Shareholders | Shareholder Name | Shares Held at Period-end | Proportion (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | | China State Shipbuilding Corporation Limited | 275,204,726 | 37.38 | State-owned Legal Entity | | Jiangnan Shipyard (Group) Co., Ltd. | 28,727,521 | 3.90 | State-owned Legal Entity | Controlling Shareholder and Actual Controller Information The company's controlling shareholder is China State Shipbuilding Corporation Limited (CSSC Group), which directly and indirectly controls 41.28% of voting rights, and its actual controller is the State-owned Assets Supervision and Administration Commission of the State Council - The controlling shareholder, China State Shipbuilding Corporation Limited (CSSC Group), directly and indirectly controls 41.28% of the company's voting rights[504] - CSSC Group primarily focuses on R&D, design, production, and investment management across weapons equipment, shipbuilding, and marine engineering sectors[157] Directors, Supervisors, Senior Management, and Employees This section provides an overview of the company's board of directors, supervisors, senior management, and employee structure, including their remuneration and professional composition Holdings and Remuneration of Directors, Supervisors, and Senior Management During the reporting period, all current and former directors, supervisors, and senior management held no company shares, with their total pre-tax remuneration from the company amounting to 8.3638 million yuan, and some not receiving remuneration due to their positions in related parties - All directors, supervisors, and senior management held zero shares at both the beginning and end of the reporting period[162] Remuneration of Directors, Supervisors, and Senior Management | Name | Position | Total Pre-tax Remuneration from Company (Ten Thousand Yuan) | Receives Remuneration from Related Party | | :--- | :--- | :--- | :--- | | Zhou Hui | Chairman, Party Secretary, General Manager | 134.27 | No | | Gao Kang | Director | 140.71 | No | | Wang Jun | Director | / | Yes | | Jin Yi | Chairman of Supervisory Board, Secretary of Discipline Inspection Commission, Chairman of Labor Union | 95.26 | No | | Shen Liang | Chief Accountant | 80.67 | No | | Total | / | 836.38 | / | Employee Information As of the end of the reporting period, the company and its main subsidiaries had a total of 1,552 employees, with technicians comprising 71.4% and over 80% holding a bachelor's degree or higher, reflecting the company's technology-intensive nature, supported by a performance-linked remuneration policy and continuous training programs Employee Professional Structure | Professional Category | Number of Employees | Proportion (%) | | :--- | :--- | :--- | | Technical Personnel | 1,108 | 71.4% | | Production Personnel | 157 | 10.1% | | Administrative Personnel | 194 | 12.5% | | Financial Personnel | 44 | 2.8% | | Sales Personnel | 49 | 3.2% | | Total | 1,552 | 100% | Employee Education Level | Education Level Category | Number of Employees | Proportion (%) | | :--- | :--- | :--- | | Postgraduate | 315 | 20.3% | | Bachelor's Degree | 928 | 59.8% | | Associate Degree | 212 | 13.7% | | Technical Secondary School and Below | 97 | 6.2% | | Total | 1,552 | 100% | - The company's remuneration policy is linked to profit assessment, complemented by multi-level training programs for employees, including directors, supervisors, senior management, and professional technical staff[171][172] Corporate Governance This section details the company's adherence to corporate governance principles, the operational effectiveness of its governance bodies, and its internal control framework Overview of Corporate Governance The company maintained a sound corporate governance structure in 2019, adhering to legal requirements with clear responsibilities across its shareholder meeting, board, supervisory board, and management, and its internal controls were deemed effective - The company's corporate governance structure is sound, complying with the Company Law and CSRC regulations, with no significant discrepancies[174] - A total of 12 board meetings were held during the reporting period, comprising 3 in-person and 9 via communication[178] - The board's audit, nomination, and remuneration and appraisal committees all approved relevant proposals and provided professional opinions[180] - The company's internal control self-assessment and audit reports concluded that effective internal controls over financial reporting were maintained in all material aspects, with no significant deficiencies identified[183][184] Financial Report This section encompasses the independent audit report, the company's consolidated financial statements, and detailed notes providing further context and breakdowns of financial information Audit Report Tianjian Certified Public Accountants issued a standard unqualified audit opinion on the company's 2019 financial statements, confirming their fair presentation and highlighting accounts receivable impairment and revenue recognition as key audit matters - Tianjian Certified Public Accountants issued a standard unqualified audit opinion[187] - Key audit matter one: Impairment of accounts receivable, identified due to its significant amount (1.133 billion yuan book balance) and the substantial management judgment involved in impairment assessment[189][190] - Key audit matter two: Revenue recognition for engineering general contracting, which constitutes 81.33% of total revenue and uses the percentage-of-completion method, involves significant management judgment and inherent risks as a key performance indicator[191] Consolidated Financial Statements This section presents the company's 2019 consolidated balance sheet, income statement, cash flow statement, and statement of changes in owners' equity, providing a comprehensive overview of its financial position, operating results, and cash flows Consolidated Balance Sheet Highlights | Consolidated Balance Sheet Item | 2019 Year-end (Yuan) | 2018 Year-end (Yuan) | | :--- | :--- | :--- | | Total Assets | 9,195,870,028.85 | 10,527,625,393.33 | | Total Liabilities | 5,198,360,336.78 | 6,313,057,189.74 | | Equity Attributable to Parent Company Owners | 3,882,673,958.99 | 3,718,262,301.58 | Consolidated Income Statement Highlights | Consolidated Income Statement Item | 2019 Annual (Yuan) | 2018 Annual (Yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 3,328,387,821.20 | 3,264,373,125.15 | | Total Profit | 118,935,327.91 | 50,305,672.49 | | Net Profit Attributable to Parent Company Shareholders | 137,750,838.39 | 65,427,430.33 | Consolidated Cash Flow Statement Highlights | Consolidated Cash Flow Statement Item | 2019 Annual (Yuan) | 2018 Annual (Yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 256,063,314.56 | -333,901,731.36 | | Net Cash Flow from Investing Activities | 100,671,364.73 | 289,584,630.88 | | Net Cash Flow from Financing Activities | -131,272,192.30 | -256,593,895.32 | | Net Increase in Cash and Cash Equivalents | 226,313,819.74 | -299,656,694.09 | Notes to Financial Statements The notes to financial statements provide detailed information on the company's basic situation, basis of financial statement preparation, significant accounting policies and estimates, and detailed explanations for major items in the consolidated financial statements, covering key accounting policies, related party transactions, contingent liabilities, and subsequent events - The company implemented new financial instrument standards and revised financial statement formats from January 1, 2019, with related impacts retrospectively adjusted in opening balances[290][291][292] - Revenue recognition policy: Engineering general contracting revenue is recognized using the percentage-of-completion method, while land development services revenue is recognized based on client-confirmed project volume[280][281] - The scope of consolidation changed due to the disposal of 50% equity in subsidiary Yangzhou Sanwan Company, leading to its deconsolidation, and the deregistration of subsidiary Jiuyin Investment Company[471][472] Reference Documents This section lists the reference documents available for inspection, including the original annual report signed by the legal representative, audited financial statements, original audit report, and originals of all publicly disclosed documents from the reporting period - This section lists available reference documents, including the original annual report signed by the legal representative, audited financial statements, original audit report, and originals of all publicly disclosed documents from the reporting period[584]