宋城演艺：2020年年度报告（英文版）

Songcheng Performance Development Co. Ltd
2020 Annual Report
April 2021
Section I Important Notes Contents And Definitions
The Board of Directors the Board of Supervisors directors supervisors and senior management members of the Company
hereby guarantee that the information presented in this annual report is authentic accurate complete and free of any false records
misleading statements or material omissions and they will bear liabilities regarding this report.Zhang Xian Chief Executive Officer (CEO) Chen Shengmin chief accountant and Zhu Shana head of accounting department
(Accounting Officer) hereby declare and warrant that the financial statements in the annual report are authentic accurate a nd
complete.
All directors attended the meeting of the Board of Directors for deliberation of this annual report.
There are specific reasons for the sharp decline in the Company’s performance during the reporting period. Risk factors that
may exist in the production and operation of the Company and countermeasures have been detailed in the sections "I. Overview "
and "IX. Prospects for Future Development of the Company" of Section IV "Discussion and Analysis on Business Situation" of this
report. Investors should be mindful to investment risks.The content concerning the future plan and performance forecast if any in this report shall not constitute the Company's
commitment to investors and relevant persons. Investors should maintain adequate risk awareness and must understand the
differences between the plans forecasts and commitments.
1. Risks of Natural Factors and Social Factors
The natural and social factors such as major natural disasters public health emergencies and large social activities will affect
the number of tourists received. The outbreak of COVID-19 in 2020 was a global public health event which resulted in stagnation of
tourist and cultural consumption on the site thereby affecting the business performances of the Company. The Company may
diffuse such risks through its strategic layout but such periodical and local risk factors are generally irresistib le once they occur.
2. Risks of Macroeconomic Fluctuation
In 2020 COVID-19 epidemic swept the world and accelerated the change of the world political and economic situation unseen
in a century. This presented the risk of change and anxiety to China's economy which was in and will remain in an important period
of strategic transformation and development for an extended period. The complicated and changeable domestic and international
macroeconomic environments may affect the level of national income and further the consumer demands thereby affecting the
operating performance of the Company.
3. Competition Risks
The competition risks include those from the same industry and those from the substitutes. The current high -quality
development of China's economy and the increasing cultural consumption demands from the general public drive the rapid
development of the live performance industry particularly the tourist performance. Seeing the enormous business opportunitie s a
large amount of social capital swarmed into the tourist performance industry. This on the one hand promotes the development of
the entire live performance industry but on the other hand inevitably intensifies the industry competition and affects the
operation of the Company. Meanwhile the performance industry in the first-tier cities has developed to a certain level presenting a
small but scattered development pattern. The Company starting as a newcomer and integrator shall undergo market adjustment
and adaptation at the initial stage.With continuous technological progress people have more choices for their cultural consumption from the emerging market of
digital cultural consumption such as short videos movies games TV shows live broadcasts and VR/AR. Despite the irreplacea ble
role of live experience digital entertainment will attract some tourists and impact the live experience to a certain extent affecting
the operation of the Company.
4. Risks in Safety Accidents
Live performances being a key component in the Company’s operation may be occasionally hindered by safety accidents.Personal safety of visitors remains a major importance to the reputation of the Company.The profit distribution proposal approved by the Board of Directors is: Taking 2614694040 as the basis RMB 0.5 (tax included)
of cash dividend and 0 bonus share (tax included) for every 10 shares will be distributed to all shareholders and 0 share ca pitalized
from the capital reserves will be distributed to all the shareholders for every 10 shares.Note:
This document is a translated version of the Chinese version 2020 Annual Report (“2020 年年度报告”) and the published annual
report in the Chinese version shall prevail. The complete published Chinese 2020 Annual Report may be obtained at
www.cninfo.com.cn.
Table of Contents
Section I Important Notes Contents And Definitions .......................................................................................................................2
Section II Company Profile and Key Financial Indicators ...................................................................................................................7
Section III Corporate Business Overview ........................................................................................................................................ 12
Section IV Discussion and Analysis on Business Circumstance ........................................................................................................ 15
Section V Significant Events........................................................................................................................................................... 39
Section VI Changes in Shares and Information about Shareholders................................................................................................. 62
Section VII Information of Preferred Shares ................................................................................................................................... 70
Section VIII Convertible Corporate Bonds ...................................................................................................................................... 71
Section IX Directors Supervisors Senior Managers and Employees ................................................................................................ 72
Section X Corporate Governance ................................................................................................................................................... 80
Section XI Corporate Bonds........................................................................................................................................................... 87
Section XII Financial Report ........................................................................................................................................................... 88
Section XIII Documents Available for Reference ........................................................................................................................... 254
Definitions
Item
Refers
To
Definitions
Company the Company
Songcheng Performance
Refers
To
Songcheng Performance Development Co. Ltd
Songcheng Holdings
Refers
To
Hangzhou Songcheng Group Holdings Co. Ltd the controlling shareholder of the Company
Songcheng Performance
Valley Company
Refers
To
Hangzhou Songcheng performance Valley technology and Culture Development Co. Ltd a
wholly-owned subsidiary of the Company
Hangzhou Paradise Company
Refers
To
Hangzhou Paradise Co. Ltd a wholly-owned subsidiary of the Company
Songcheng Art Troupe
Refers
To
Songcheng Performance Management Co. Ltd a wholly-owned subsidiary of the Company
Songcheng Tourism
Refers
To
Songcheng Tourism Development Co. Ltd a wholly-owned subsidiary of the Company
Sanya Romance Show
Company
Refers
To
Sanya Romance Tourism Performance Co. Ltd a wholly-owned subsidiary of the Company
Lijiang Chama Ancient City
Company
Refers
To
Lijiang Chama Ancient City Tourism Development Co. Ltd a wholly-owned subsidiary of the
Company
Jiuzhai Romance Show
Company
Refers
To
Aba Zhou Jiuzhai Romance Tourism Development Co. Ltd a wholly-owned subsidiary of the
Company
Shanghai Songcheng Company
Refers
To
Shanghai Songcheng World Expo Performance Development Co. Ltd a holding subsidiary of
the Company
Guilin Romance Show
Company
Refers
To
Guilin Lijiang Romance Performance Development Co. Ltd a holding subsidiary of the
Company
Zhangjiajie Romance Show
Company
Refers
To
Zhangjiajie Romance Performance Development Co. Ltd a wholly-owned subsidiary of the
Company
Xi'an Romance Show
Company
Refers
To
Xi'an Romance Performance Development Co. Ltd a holding subsidiary of the Company
Foshan Romance Show
Company
Refers
To
Foshan South Sea Qiao Mountain Cultural Tourism Development Co. Ltd a wholly-owned
subsidiary of the Company
Xitang Songcheng
Performance Valley Company
Refers
To
Zhejiang Songcheng Xitang Performance Valley Performance Development Co. Ltd a
wholly-owned subsidiary of the Company
Zhuhai Songcheng Company Refers Zhuhai Songcheng Performance Kingdom Co. Ltd a wholly-owned subsidiary of the
To Company
Songcheng International
Refers
To
Songcheng Performance International Development Co. Ltd a wholly-owned subsidiary of
the Company
Songcheng Technology
Refers
To
Hangzhou Songcheng Technology Development Co. Ltd a wholly-owned subsidiary of the
Company
Dumuqiao Travel Agency
Refers
To
Hangzhou Songcheng Dumuqiao Travel Services Co. Ltd a wholly-owned subsidiary of
Songcheng Tourism Development Co. Ltd a wholly-owned subsidiary of the Company
Songcheng Entertainment
Company (Australia)
Refers
To
Songcheng (Australia) Entertainment Pty Ltd. a wholly-owned subsidiary of Songcheng
Performance International Development Co. Ltd a wholly-owned subsidiary of the
Company
Jiuzhai Tibetan Mystery
Company
Refers
To
Jiuzhaigou Tibetan Mystery Culture Co. Ltd a holding subsidiary of the Company
Huafang Technology
Refers
To
Beijing Huafang Technology Co. Ltd a joint stock company of the Company
China Securities Regulatory
Commission (CSRC)
Refers
To
China Securities Regulatory Commission
Shenzhen Stock Exchange
(SZSE)
Refers
To
Shenzhen Stock Exchange
yuan ten thousand yuan
Refers
To
RMB RMB Ten Thousand
Section II Company Profile and Key Financial Indicators
I. Company Information
Stock Abbreviation Songcheng Performance Stock Code 300144
Company Name in Chinese 宋城演艺发展股份有限公司
Company Abbreviation in Chinese 宋城演艺
Company Name in Foreign Language (If
any)
Songcheng Performance Development Co. Ltd
Abbreviation of Company Name in Foreign
Language (If any)
Songcheng Performance
Legal Representative Zhang Xian
Registered Address 148 Zhijiang Road Hangzhou City Zhejiang Province
Post Code of Registered Address 310008
Office Address 148 Zhijiang Road Hangzhou City Zhejiang Province
Post Code of Office Address 310008
Internet Website of the Company https://www.songcn.com/Shares/
E-mail zqb@chinascyy.com
II. Contact Person and Contact Information
Secretary of the Board Representative of Securities Affairs
Name Hou Li Hou Li
Contact Address 148 Zhijiang Road Hangzhou City Zhejiang Province 148 Zhijiang Road Hangzhou City Zhejiang Province
Tel. 0571-87091255 0571-87091255
Fax 0571-87091233 0571-87091233
E-mail hl@songcn.com hl@songcn.com
III. Information Disclosure and Location
The Media Selected by the Company for Disclosure Securities Times Securities Daily
Website Designated by CSRC for Publishing Annual Report http://www.cninfo.com.cn
Location for Annual Report of the Company Securities Investment Department of the Company
IV. Other Related Information
Accounting Firm Hired by the Company
Name of the Accounting Firm BDO China Shu Lun Pan CPAs (special general partnership)
Office Address of the Accounting Firm No. 61 Nanjing East Road Shanghai
Name of Certified Public Accountant Ni Yilin Jiang Xuelian
The sponsor institution hired by the company to perform the continuous supervision in the reporting period
□ Applicable √ Not applicable
The financial adviser hired by the company to perform the continuous supervision in the reporting period
□ Applicable √ Not applicable
V. 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
2020 2019
Increase/decrease compared with
previous year
2018
Operating income (RMB) 902586125.63 2611753208.86 -65.44% 3211192814.48
Net profit attributable to
shareholders of the listed Company
(RMB)
-1752398009.60 1339790994.94 -230.80% 1287186547.41
Net profit attributable to
shareholders of the listed company
after deducting non-recurring gains
and losses (RMB)
-1767861638.68 1222100617.31 -244.66% 1279733108.31
Net cash flow generated by
operational activities (RMB)
393941899.94 1571451499.51 -74.93% 1647243748.01
Basic Earnings per Share
(RMB/Share)
-0.6702 0.5124 -230.80% 0.8861
Diluted Earnings per Share
(RMB/Share)
-0.6702 0.5124 -230.80% 0.8861
Weighted Average ROE -20.50% 14.52% -35.02% 16.38%
End of 2020 End of 2019
Increase/Decrease at the end of
the current year compared with the
end of the previous year
End of 2018
Total assets (RMB) 9195342831.06 11041076933.58 -16.72% 10817160458.62
Net assets attributable to
shareholders of the listed company
(RMB)
7412287432.06 9614069166.64 -22.90% 8471075013.49
The lower of the Company's net profit before and after deduction of non-recurring profit and loss for the last three fiscal years is
negative and the audit report for the latest year shows that there is uncertainty about the Company's ability to continue operating
□ Yes √ No
The lower of net profit before and after deduction of non-recurring profit and loss is negative
√ Yes □ No
Item 2020 2019 Notes
Operating income (RMB) 902586125.63 / Total Operating Income
Amount deducted from operating income
(RMB)
6381032.95 /
Income from personnel dispatch management and other
miscellaneous businesses
Amount of operating income after
deduction (RMB)
896205092.68 / Operating income of main business
Total share capital of the Company as at the trading date preceding the disclosure:
Total share capital of the Company as at the trading date
preceding the disclosure (share)
2614694040
Whether the share capital has been changed for issuance of new shares addition allotment exercise of equity incentives and
buy-back and whether the amount of the owners' equity is influenced from the end of the reporting period of the Company to the
disclosure date of the annual report
□ Yes √ No
Preferred stock dividends paid 0.00
Fully diluted earnings per share calculated with the latest
share capital (RMB/share)
-0.6702
VI. Key Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating income 134352197.80 148522407.15 335646114.92 284065405.76
Net profit attributable to
shareholders of the listed company
49960280.55 -10112011.86 93903527.78
-1886149806.07
Net profit attributable to
shareholders of the listed company
after deducting non-recurring gains
and losses
18467729.86 1512334.57 91357882.55 -1879199585.66
Net cash flow generated by
operating activities
-20444426.81 -103304029.48 282447994.96 235242361.27
Whether the above financial indicators or their totals are significantly different from the financial indicators disclosed in the
Company’s quarterly and semi-annual reports
□ Yes √ No
VII. 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 re ports
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 re ports
disclosed according to overseas accounting standards and Chinese accounting standards.
3. Reasons for differences in accounting data under domestic and overseas accounting standards
□ Applicable √ Not applicable
VIII. Non-recurring Gains and Losses Items and Their Amounts
√ Applicable □ Not applicable
Unit: RMB
Item Amount in 2020 Amount in 2019 Amount in 2018 Note
Profits or losses from disposal of
non-current assets (including the write-off
for the accrued impairment of assets)
-37625882.13 70970952.64 -30333257.21
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)
35618594.19 5629978.38 12326627.98
Gains or losses from investment or asset
management entrusted to others
25795007.28
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
19619586.83 52061383.80 21276486.89
Item Amount in 2020 Amount in 2019 Amount in 2018 Note
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
-509618.20 -19029327.85 -21969795.85
Less: Impact of income tax 2230795.39 -7184125.78 556654.96
Impact of minority equity (after tax) -591743.78 -873264.88 -915024.97
Total 15463629.08 117690377.63 7453439.10 --
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. 1
Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to Public - Non-recurring Gains and
Losses as recurring gains and losses items.
Section III Corporate Business Overview
I. The Principal Business of the Company during the Reporting Period
1. Vision and mission
The Company upholds the philosophy of "a drop of water in need shall be returned with a spring in deed" to provide
customers with warm on-site entertainment experiences. It is dedicated to telling global stories of Chinese culture promoting
confidence of the nation and striving to become the world's premier company in cultural performing arts.
2. Main business and products
During the reporting period the Company was mainly engaged in cultural performance business. On-site performance and
tourism and recreation are the Company's main businesses.Live performance is the Company's core business and main source of incomes and profits. Based on the Company's two
major brands of "Songcheng" and "Romantic Show" the original business mode of "theme park + cultural performance" provides
customers with theme park amusement and a variety of shows. Business income mainly comes from sales of tickets. Projects under
operation include "Romantic Show of Songcheng" "Romantic Show of Sanya" "Romantic Show of Lijiang" "Romantic Show of
Jiuzhai" "Romantic Show of Guilin" "Romantic Show of Zhangjiajie" and "Romantic Show of Xi'an". The Songcheng project in
Shanghai will be unveiled on April 29 2021 and projects under construction in Foshan Xitang and Zhuhai will also be intro duced to
the market.Tourism and recreation mainly refer to light-asset output business and online sales of tickets. Based on the Company's
business capabilities and brand accumulation over the years the light-asset output business provides partners with brand
authorization planning and design director and creation entrusted operation and other services and realizes business income by a
package of service fees and entrusted operation management fees. The light-asset output projects in operation include "Romantic
Show of Tanhe" "Romantic Show of Mingyue (Moon)" and "Romantic Show of Huangdi (Yellow Emperor)". On line sales of tickets
refer to online direct sales and distribution of tickets of performances and projects operated by the Company and sales of j oint
tickets and ticket packages with third-party tourist attractions.II. Material Changes to Major Assets
1. Major changes in main assets
Major Assets Explanation Of Material Changes
Equity assets
At the end of the reporting period the long-term equity investment decreased by RMB 1934056500 compared
with the beginning of the period which was mainly due to the impairment of the long-term equity investment of
Huafang Technology held by the Company during the reporting period.
Fixed Assets
By the end of the reporting period the fixed assets increased by RMB 197503700 compared with the beginning
of the period which was mainly due to conversion of the Company's projects in construction to fixed assets
during the reporting period.Intangible
Assets
At the end of the reporting period the intangible assets increased by RMB 381541800 compared with the
beginning of the period mainly due to the acquisition of land use rights by Zhuhai Songcheng Performance
Kingdom during the reporting period.
Projects under
Construction
By the end of the reporting period projects in construction increased by RMB 401871300 compared with the
beginning of the period which was mainly due to the increased investment in construction by the Company
during the reporting period.
2. Major overseas assets
√ Applicable □ Not applicable
Details of the
Assets
Causes Asset Size Location
Operation
Mode
Control
Measures to
Ensure Asset
Safety
Incom
e
Status
Proportion of
Foreign Assets in
Company's Net
Assets
Significant
Risk of
Impairment
Land Purchase
448900
square
meters
Gold Coast
Queensland
Australia
Theme
park + Art
performanc
e
Suspe
nded
3.80% No
Other
Information
N/A
III. Core Competitiveness Analysis
Through continuous efforts the Company has established a nationwide chain operation with more than 40 million regular
audiences per year. Our market share ranks among the top and continues to increase with rising efficiency in resource allocation
and brand influence. As a leading enterprise in China's performing arts industry the Company's core competitiveness is mainl y
reflected in the following aspects:
1. Advantages of business mode
Centering on performing arts in theme parks with creativity the Company is different from traditional companies in
performing arts and tourism. The business mode of "theme park + cultural performance" helps solve high performance costs high
traffic attraction costs and low frequency of audience replacement faced by common performing arts enterprises without
self-owned venues. For the tourism industry the mode has overcome shortcomings of insufficient core competitiveness poor
reproducibility excessive reliance on large-scale and costly amusement equipment low marginal effect homogeneous services and
weak profitability experienced by more traditional enterprises. From the Romantic Show model of "one show one park" the
Company is transforming to the performing arts kingdom of "multiple theaters shows activities and tickets" a move to expand its
business content by enriching the performing art experience for stronger competitiveness.
2. Advantages in creation and design
The Company has an experienced professional and independent team in planning design creation and performance. In the
planning and design of theme parks and creation of performance products team members can fully i ntegrate their own innovative
ideas through a deep understanding of local culture. During operation new elements can be included in a timely manner according
to changes in the industry and the market. Simultaneously inspiration and creativity are encouraged to constantly upgrade products
and services for better tourist experiences. The advantages in creation and design are an important guarantee for the Company to
advance through exciting innovation and breakthroughs.
3. Professional advantages
After years of development in the performing arts industry the Company has accumulated and trained a large number of
professional talents and established a standardized operation and management system with a strong understanding of
development laws and features of the industry. The Company has become highly skilled in project site selection investment control
performing arts creativity and design stage presentation costume props scenic spot operation viewing experience and daily
management.
4. Marketing advantages
As internet mobile internet and new media are on the rise the Company took advantage of its creative capabilities and
conducted online and offline creative marketing. Topics were made to promote spontaneous media dissemination to realize
low-cost coverage of consumers therefore providing market expansion and income growth in the process. In a time when
Generation Z has gradually become the main consumer force the Company's flexible marketing strategies ensure s target groups to
be covered through online short videos in-depth offline promotion and on-site activities.
5. Advantages in on-site experience
Internet and mobile internet have changed the business models of many traditional industries and have brought a number
of existing industries considerable impacts and challenges. However they cannot replace the enrichment gained through on-site
experience and participation to meet people's spiritual and cultural needs at higher levels. In an era with changing technolo gical
innovation the Company's advantages in outstanding on-site experiences are becoming more obvious.
6. Closed-loop advantages
The Company has closed-loop teams covering the entire industry chain from site selection planning and design investment
and construction direction and creation opening planning operation management continuous improvement event planning
ticket price system setting and marketing. The closed-loop coverage of the entire industry chain contributes in controlling costs
improving efficiency and enhancing profitability of the Company.
7. Platform advantages
Thanks to continuous development and expansion the Company has a leading position in the number of projects theaters
and seats performances and audiences. It has initially established a cultural performance platform covering first-tier tourism and
leisure destinations and urban clusters across the country. The large scale and huge tourist base will help the Company expand its
business boundaries reduce marginal costs improve operational efficiency enhance brand influence and create performance
products with brand and its exclusive and innovative features.
8. Brand advantages
As the largest performing arts group in China Songcheng Performance's "Songcheng" and "Romantic Show" have become
representative brands in live performing arts and creative industries. Our good market reputation and strong brand influence have
benefited the Company in project expansion resource control talent attraction and market development.
9. Advantages in locations
The Company took the lead in businesses in important cities and first-tier tourism and leisure destinations in the country and
has advantages in locations. As urban performing arts continue to advance the Company will gradually move into mega and larg e
cities and continue to strengthen and consolidate its position.
Section IV Discussion and Analysis on Business Circumstance
I. Overview
2020 is an extraordinary year in the history of the world a year of ups and downs. The spread of COVID-19 in more than 199
countries and regions has taken a toll on human life safety and global economic development and significantly raised the ris k of
economic recession and uncertainties through out the world. The disrupted supply chains shrinking consumption and investment
demand weakened economic activities and impaired market confidence have brought unprecedented challenges to the resilience
and governance of countries and economic entities. The year of 2020 is also full of critical challenges for the cultural and travel
industry. The industry was in a standstill the first half of the year yet managed to recover in the second half of the year when the
epidemic receded. The road was a bumpy one yet in recovery new opportunities arose.
As the last year for China to build a moderately prosperous society in an all -round way and the "13th Five-Year Plan" 2020 is a
historical transition period from the "13th Five-Year Plan" to the "14th Five-Year Plan". It is also a time for China to strive for
high-quality economic development with an optimized industrial structure by weighing the modern service industry more. To
answer the strategic call for high-quality development the cultural and tourist industries have entered a new stage for better quality
efficiency and will become the new powerhouse for further economic growth.
During the reporting period the Company's scenic spots suspended operations from January 24 2020 and resumed
operations on June 12 2020. The Company has fully prepared itself to turn crises into opportunities through well balanced
epidemic controls and strong corporate oversight. With effective epidemic prevention in place the Company has optimized and
upgraded the hardware software marketing and organizational structure during park closure. Meanwhile improvement of various
projects was also implemented. Hangzhou Songcheng as a test field was rebuilt into a new Hangzhou Songcheng Performing
Kingdom. The mode of "one show one park one ticket" was transformed and upgraded to a performing arts platform with multiple
shows and combination of a variety of tickets. Since resumption of business the Company has been fully prepared to actively
promote its market recovery of tourists and revenue through online new media short videos offline promotion special markets
and activities and other marketing methods. In terms of new projects Xi'an and the light-asset project in Zhengzhou successfully
presented first shows projects in Shanghai Foshan and Xitang were progressing the Zhuhai project started construction and the
contracgt for the light-asset project in Yan'an project was signed providing significant momentum for the Company's future growth.
During the reporting period the Company achieved operating income of RMB 902586100 a year-on-year decrease of 65.44%;
net profit attributable to shareholders of the listed company was -1752398000 a year-on-year decrease of 230.80%; net profit
attributable to shareholders of the listed company after deducting non-recurring profit and loss was -1767861600 yuan a
year-on-year decrease of 244.66%.
Excluding the financial data of the digital entertainment platform and the increase or decrease in the long-term equity
investment of Huafang Technology the Company's pro forma profit statement is as follows:
During the reporting period the Company achieved operating income of RMB 902586100 a year-on-year decrease of 59.50%;
net profit attributable to shareholders of the listed company was 113724700 yuan a year-on-year decrease of 89.11%; net profit
attributable to shareholders of the listed company after deducting non-recurring profit and loss was 98261100 yuan a
year-on-year decrease of 90.86%.The key tasks carried out by the Company during the reporting period are as follows:
(I) Hardware expansion
1. Increase the type and number of theaters
With Hangzhou Songcheng as a model the Company deeply explored existing resources of scenic spots to introduce different
types of indoor and outdoor performance venues with varied experiences. It built upgraded standard theaters walk-around
theaters cliff theaters forest theaters floating theater and other new theaters delivering new and extraordinary experiences to its
guests.No. 2 and No.3 Romantic Show Theater is an upgraded version of the Company's standard theaters. The combination of the
cliff theater and elegant music and the forest theater and popular fashion provide visitors with more choices. During the reporting
period 10 indoor and outdoor theaters and more than 10000 seats were added in the Hangzhou Songcheng scenic spot during
business suspension in response to the epidemic. No.2 and other types of theaters were added to existing or new projects to
further expand the capacity. The continuous increase in the number of theaters and seats is conducive to diversified performances
larger reception capacity and better tourist experiences. It also makes it possible in hardware to provide products content and
tickets on many different levels.
2. Extend touring routes
Taking Sanya as an example the original touring route was only a few hundred meters long. With diversion and aggregation
the route length was extended by 3 to 4 times by combining underutilized space. Another example is the restructuring of Hangzhou
Songcheng. Without expanding the area the play route was redesigned and indoor and outdoor small theaters and interactive
spaces were added with a series of new performances. These measures have improved the tourist experience and effectively
extended park visitor duration.
3. New popular sites
The Generation Z loves recommending and sharing. Growing up in the internet era their consumption is trendier and more
individual. To meet the needs of young people the Company's scenic spots have created many popular sites including "Glass
Skywalk" Setting of Marionette Sky Tree Setting of Ayue out of Bath interactive amusement park of oiled paper umbrellas love
like device sound post office and 3D printing wall. The introduction of the role play hall is also favored by young people enhancing
their experience and atmosphere of the scenic spot.
4. Improved supporting facilities
Supporting facilities were further improved in scenic spots. Landscape design and presentation were enhanced with more large
entrance halls and rest areas. While increasing the proportion of self-operated businesses the Company will continue to build
all-weather comfortable convenient and safe scenic spots for all. Hangzhou Songcheng for example two newly built large food
courts can accommodate 1500 people at the same time bringing a variety of deli cious foods to meet guests expectations. At the
same time the proportion of self-operated shops was also expanded in projects in other parks to upgrade product types quality
control and hardware.(II) Content upgrade
With continuous expansion of our commercial landscape the Company centering on "Romantic Show" and supplemented by
"Love in" and "Color" series has gradually formed a content matrix in outfield performances cooperation customization
introduction and procurement of shows.
1. "Romantic Show" series
Led by the chief director under the new organizational structure and creation model the Company's art team work hard with
an innovative spirit. Romantic Show of Xi'an and Romantic Show of Huangdi have opened and Romantic Show of Shanghai and
Romantic Show of Foshan are proceeding in an orderly manner. During the reporting period "Romantic Show of Xi'an and Romanti c
Show of Huangdi have opened. The Company expanded operation in northern areas with rising market and brand value and a
consolidated position as China's top performing arts brand and industry leader.
2. "Love in" and "Color" series
Currently the Company is stepping up preparations for the "Love in" and "Color" series. The "Love in" series focuses on the
original ecological folk culture to present local customs; the "Color" series is a boutique performing arts for tourists whi ch is a grand
interactive show filled with fashion culture technology light and shadow dreams surprises suspense and elements favored by
young people. The Company has also enabled new and young director teams from the headquarters and affiliated art troupes on
these shows cultivating a younger director team.
3. Indoor small and medium drama
In addition to the original 5D real-life drama "The Earthquake" and the holographic show "Phantom" the Company launched a
new parent-child show "Beware-Dinosaurs!" nostalgic drama "Katyusha" and walk-around performance "Shangganling" and
"'Ahoy' Captain Cook!" during the reporting period. These new performances greatly enhanced its performing arts portfolio.
4. Outdoor series
In terms of outfield performance the Company has resumed the classic traditional dramas including the martial arts drama
"Yanqing on Stage Contest" and the interactive drama "The Case of Chen Shimei" and added trendy content like cliff concerts
forest and water concerts and electronic music parties for tourists providing tourists with more entertainment options.(III) Marketing optimization
During the reporting period the Company achieved excellent results in marketing through online short videos and new media
offline field promotion and penetration into special markets.
1. Online
Build up new space in network communication and strengthen the diversified development of We media and short video
platforms. The Company has closely integrated brand promotion with marketing through content marketing online gifts and
coupons and offline diversion to maintain continuous growth of its followers and increasing their retention rate. In addition
employees were encouraged to post contents on Tik Tok to increase exposure of various scenic spots on network communication
platforms.
2. Offline
In recent years consumption of young people in small towns is on the rise. In line with local conditions the Company starte d
first round marketing in lower-level regions especially towns contributing more customers. Flyers wall paintings and promotion
materials were used to effectively expose the brand to potential customers.
3. Activities
Since resumption of business the Company has launched different seasonal and holiday themed activities according to various
festivals and timings such as surrounding tours summer night tours National Day Halloween Christmas Day and New Year's Day
and Spring Festival. Different ticket prices and product combinations have been tested in the market and subsequently a diverse
price system for the it’s performing arts venues has been instituted.
(IV) Optimized organizational structure
1. Optimizing vertical management
The Company's vertical management conducts all-around refined and standardized management of performance quality
equipment uses safety and scenic spot operation and has instituted a regular meeting system. The management system has been
running effectively now for 3 years. With the rapid increase of projects everything from lighting sound dance props
management to guest reception must have strict oversight. Standards and vertical management can reduce levels to ensure
accuracy of management points.
2. Optimizing creation team
The continuous development of the Company and the epidemic prompted the optimization adjustment and integration of the
creation team. The original direction and creation team cultivated from actors has limitation in overall quality which affects the
speed and quality of product creation. During the reporting period the Company adjusted the original team some were transferred
to the management of the art troupe and others remained in the creation team. At the same time professional talents with
experiences in large-scale performances and outstanding talents of Beijing Dance Academy and other colleges were absorbed. The
current staff structure as a result is more diverse and efficient.
3. Establishing an innovation department
The Company established the Innovation Department which is mainly responsible for creation of popular conte nt on internet
and introduction of creative devices. The department shall introduce relevant fresh information within and beyond the industry to
the Company in a timely manner and add supplement and improve new business patterns experience projects an d landscape
atmosphere to various scenic spots. At the same time it will collect information for tourism and urban performance potentials. The
department shall help solve the deficiencies of original internet applications and popular contents and serve as the Company's
front runner to reach leading projects.(V) Preparation of Shanghai project
The Shanghai project is located in the city's permanent green space Expo Park near Huangpu River. It combines elements of
Shanghai-style culture old industrial base and fashion vitality with an outstanding location convenient transportation and good
supporting facilities. In the post-epidemic era the Shanghai government has put forward a call to "build a performing arts center of
Asia". Firmly grasping this opportunity the Company will spare no effort to create a “jewel” of performing arts in Shanghai.
After more than two years of construction especially the in-depth development and model testing of the Performing Arts
Kingdom since the epidemic the Shanghai project will open with rich program content.Rooted in the magnificent history of Shanghai the main show "Romantic Show of Shanghai" tells the great chapters of the city
with profound culture passion and high-tech international stage means. The performance is divided into chapters of "The Origin of
Shenhu" "1921" "Modern Years" "Shanghai Family" and "Wind from the Sea". On the stage the audience will experience the
Songze archaeological site dating back 6000 years Sir Chunshen's manor estate granted by the emperor in the Warring States
Period the glorious history of 1st National Congress of CPC the ups and downs of the Shili Yangchang in the 1920s and 1930s the
grand atmosphere of the World Expo in the new century. On stage the core culture of the 30-year development and opening of
Pudong is proudly presented. The vivid presentation of Shanghai’s red culture Shanghai-style culture and Jiangnan culture will
bring the audience a visual and spiritual feast.
At the same time the Performing Park also launched 4 special performances for different groups with different styles including
hundreds of actors from more than ten countries. The High Show "Color" centers on the performing arts complex of Songcheng in
Shanghai and sets up multiple performance spaces with different styles on each floor. Each performance space is uniquely set up
with an independent plot in movie-level scenes which highly restores the real texture under different themes. Walking in the
performance space of "Color" the audience will encounter different characters and trigger different stories at every corner. As a
high-tech stage production the parent-child show "Beware-Dinosaurs!" is a collision of art and science filled with knowledge. The
large-scale dinner show "Samba Passion" brings together top dancers from Argentina Cuba Russia and Ukraine presenting the
purest South American flavor and beat to the audience. The brilliant show "S" will bring an electric spark to all.This venue is a brand new performance park designed to shock your imagination. "Battle of Shanghai" "The Earthquake"
"Ghost Ship" "Liaozhai Ghost House" "Storm Eye" naked-eye 3D and other large-scale interactive experience projects will impress
every tourist. It is like a world away while walking on Crossing Street Magic Street Market in Heaven and Romantic Street; every
stop is a scene in the music square. There will also be “the colorful forest” the “fairy valley” the “sky city” the glass platform and
the rattan bridge as splendid shows are staged every day at more than 20 theaters and performance venues including the standard
theater the bird show theater the forest theater and the cliff theater. As an open art district Songcheng Downtown has multiple
variable spaces and a performance square that can accommodate tens of thousands of people which is a comprehensive art
performance platform. The performance park welcomes people of all ages with daily shows and trendy activities each week.Through customized hardware diversified content creation and a circle-based pricing system the Shanghai project will cover
the overall population and with precise penetration. With rich contents and different customer groups the Shanghai project w ill
have a diversified ticket pricing system including single tickets a package ticket of Romantic Show combined tickets discounted
group tickets children's tickets and night party tickets.(VI) Live broadcast platform
In recent years the internet performance/digital entertainment industry has entered a stage of steady development with
intensified competition. The PC market continues to be eroded by the mobile market. During the reporting period people stayed
more at home due to the epidemic. As a result they spent more time on internet bringing a new wave of benefits to digital
entertainment platforms; live broadcast technology empowered offline industries live education live consultation and "Clou d
Concerts" "Cloud Wedding" and "Cloud Recruitment" have emerged. These have integrated into all aspects of people's daily life. In
the current market environment the digital entertainment industry faces both opportunities and challenges. During the report ing
period the overall business of Huafang Technology developed well with increasing paying users consumption users operating
income and operating profit. In terms of segments the performance of Six Rooms has shown fluctuation as it has entered the s tage
of business optimization and operation improvement; while Huajiao Live has shown a growth trend with a leading position in the
industry in terms of user usage time and penetration among active users.(VII) Other
In 2020 the global outbreak of COVID-19 brought the cultural travel industry almost to a halt. During this period the Company
did not stop in strategic development thinking and new project expansion and conducted a comprehensive evaluation of existing
projects and businesses. Given that the main business of Zhejiang Songcheng Longquanshan Tourism Development Co. Ltd. is
different from the Company's future strategic development plan the Company signed a contract with Longquan Tourism Investment
Development Co. Ltd. under the People's Government of Longquan Zhejiang Province in April 2021 to transfer all the equity o f
Zhejiang Songcheng Longquanshan Tourism Development Co. Ltd. at a total consideration of 276 million yuan. The implementation
of this equity transfer is conducive to a stable operation transfer of Longquanshan project and also helps the Company optim ize
capital resource allocation and asset structure and improve asset operation efficiency to focus on its main business.
II. Main Business Analysis
1. Overview
See "I. Overview" in "Discussion and Analysis on Business Circumstance".
2. Income and Costs
(1) Operating income structure
Overall operating income
Unit: RMB
2020 2019
Year-on-year
increase or decrease Amount
Proportion in
Operating Revenue
Amount
Proportion in
Operating Revenue
Total Revenue 902586125.63 100% 2611753208.86 100% -65.44%
By Industry
I. Culture and Art
Industry - Live
Performance
675872865.35 74.88% 1871167934.09 71.64% -63.88%
II. Culture and Art
Industry -
Performance on
Internet
383412284.25 14.68% -100.00%
III. Tourism Service
Industry
226713260.28 25.12% 357172990.52 13.68% -36.53%
By Product
1. Songcheng in
Hangzhou
286877405.89 31.78% 918884614.29 35.18% -68.78%
2. Songcheng in
Sanya
127098246.23 14.08% 392729155.06 15.04% -67.64%
3. Songcheng in
Lijiang
136520949.23 15.13% 333433832.57 12.77% -59.06%
4. Songcheng in
Jiuzhai
25667095.21 2.84%
5. Songcheng in
Guilin
56586027.07 6.27% 160649726.51 6.15% -64.78%
6. Songcheng in
Zhangjiajie
18120963.58 2.01% 65470605.66 2.51% -72.32%
7. Songcheng in 25002178.14 2.77%
2020 2019
Year-on-year
increase or decrease Amount
Proportion in
Operating Revenue
Amount
Proportion in
Operating Revenue
Xi'an
8. Digital
entertainment
platform
383412284.25 14.68% -100.00%
9. E-commerce
service charge
43316562.23 4.80% 180426687.71 6.91% -75.99%
10. Design and
planning fees
183396698.05 20.32% 173281416.46 6.63% 5.84%
11. Supporting
facilities and
transportation
services for scenic
spots
3464886.35 0.13% -100.00%
By Region
1. Zhejiang Province 513590666.17 56.90% 1276057604.81 48.86% -59.75%
2. Sanya Hainan
Province
127098246.23 14.08% 392729155.06 15.04% -67.64%
3. Lijiang Yunnan
Province
136520949.23 15.13% 333433832.57 12.77% -59.06%
4. Sichuan Province 25667095.21 2.84%
5. Beijing 383412284.25 14.68% -100.00%
6. Guilin Guangxi
Province
56586027.07 6.27% 160649726.51 6.15% -64.78%
7. Zhangjiajie Hunan
Province
18120963.58 2.01% 65470605.66 2.50% -72.32%
8. Xi'an Shaanxi
Province
25002178.14 2.77%
(2) Industry product or region accounting for more than 10% of the company's operating revenue or profit
√ Applicable □ Not applicable
Unit: RMB
Operating income Operating Cost Gross margin
Increase or
decrease of
operating income
compared with
the same period
of last year
Increase and
decrease of
operating cost
over the same
period of last
year
Increase or
decrease of gross
profit compared
with the same
period of last
year
By Industry
I. Culture and Art
Industry - Live
Performance
675872865.35 341549955.68 49.47% -63.88% -28.09% -25.15%
II. Tourism
Service Industry
226713260.28 11120517.74 95.09% -36.53% -89.09% 23.64%
By Product
1. Songcheng in
Hangzhou
286877405.89 186752833.49 34.90% -68.78% -35.30% -33.69%
2. Songcheng in
Sanya
127098246.23 29293691.27 76.95% -67.64% -50.29% -8.04%
3. Songcheng in
Lijiang
136520949.23 34341329.43 74.85% -59.06% -42.14% -7.35%
4. Design and
planning fees
183396698.05 8113082.55 95.58% 5.84% 100.08% -2.08%
By Region
1. Zhejiang
Province
513590666.17 197873351.23 61.47% -59.75% -49.34% -7.92%
2. Sanya Hainan
Province
127098246.23 29293691.27 76.95% -67.64% -50.29% -8.04%
3. Lijiang Yunnan
Province
136520949.23 34341329.43 74.85% -59.06% -42.14% -7.35%
When the statistical caliber of the company's main business data is adjusted in the reporting period the company's main busi ness
data should be subject to the one after the statistical caliber at the end of the reporting period is adjusted in the most recent year.
□ Applicable √ Not applicable
(3) Is the company's physical sales income greater than the labor income?
□ Yes √ No
(4) Performance of major sales contracts signed by the Company as of the reporting period
□ Applicable √ Not applicable
(5) Operating Cost Structure
Industry Classification
Unit: RMB
Industry
Classification
Item
2020 2019 Year-on-year
increase or
decrease
Amount
Proportion to
Operating Cost
Amount
Proportion to
Operating Cost
I. Culture and Art
Industry - Live
Performance
Cost of live
performance
341549955.68 96.85% 474975419.72 63.57% -28.09%
II. Culture and Art
Industry -
Performance on
Internet
Performance cost
on internet
170265034.42 22.79% -100.00%
III. Tourism
Service Industry
Cost of tourism
service industry
11120517.74 3.15% 101948847.10 13.64% -89.09%
Note
N/A
(6) Has the scope of consolidation changed during the reporting period?
√ Yes □ No
There are 5 newly merged units in this period the reasons are:
New Merged Units This Year Investment Ratio Notes
Zhuhai Songcheng Performance Kingdom Co. Ltd 100% New in 2020
Zhuhai Southern Film and Television Cultural
Industry Co. Ltd.
100% Acquire 100% equity in 2020
Zhuhai Huayin Landscaping Co. Ltd. 55% 55% holding subsidiary affiliated
Zhuhai Southern Film and Television Cultural Industry
Co. Ltd. acquired in 2020
Songcheng Brand Management Co. Ltd. 100% New in 2020
Romance Show Management Co. Ltd. 100% New in 2020
In the current period the number of merged units was reduced by 2 due to:
Reduced Merged Units This Year Investment Ratio Notes
Hangzhou Songcheng Art Troupe Co. Ltd. 100% Canceled in 2020
Zhejiang Songcheng Entertainment Culture Co.Ltd.
100% Canceled in 2020
(7) Major changes or adjustments to the company's business products or services during the reporting period
□ Applicable √ Not applicable
(8) Major Clients and Suppliers
The Company's Major Clients
Total sales amount of the top five customers 295250820.97
Proportion of the total sales amount of the top five
customers to the total annual sales
32.71%
Proportion of the total sales amount of the related
parties in the top five customers to the total annual sales
0.00%
Profiles of the Company's top five customers
No. Name of customer Sales amount (yuan) Proportion to the annual sales
1 Customer I 128933962.27 14.28%
2 Customer II 50414308.38 5.59%
3 Customer III 39108962.22 4.33%
4 Customer IV 38845104.50 4.31%
5 Customer V 37948483.60 4.20%
Total -- 295250820.97 32.71%
Other Information Notes for Major Clients
□ Applicable √ Not applicable
(8) Major suppliers
Total Purchase Amount of Top Five Suppliers (yuan) 397247387.85
Proportion of the total purchase amount of top five
suppliers to the total annual purchase amount
34.73%
Proportion of the total purchase amount of the related
parties in top five suppliers to the total annual purchase
amount
0.00%
Profiles of the Company's top five suppliers
No. Supplier Name Purchase amount (yuan)
Proportion to the total annual purchase
amount
1 Supplier I 147103879.82 12.86%
2 Supplier II 106202799.73 9.28%
3 Supplier III 57800000.00 5.05%
4 Supplier IV 49683318.00 4.34%
5 Supplier V 36457390.30 3.19%
Total -- 397247387.85 34.73%
Other Information Notes for Major Suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: RMB
2020 2019
Year-on-year
increase or
decrease
Statement on Significant Changes
Sales Expenses 63649750.30 145503636.64 -56.26%
Mainly due to the impact of the
epidemic and Huafang Technology is
no longer included in the scope of
consolidation
Administration expenses 288084167.74 188215121.23 53.06%
Mainly due to the closure of various
scenic spots of the Company during
the epidemic and the adjustment of
operating costs during the closed
period to this item
Financial Expenses -12843438.15 -17743898.84 27.62%
Mainly due to the increase in bank
loan interest and exchange gains and
losses
Research and
development expense
37487964.00 48424520.54 -22.58%
Mainly due to the fact that Huafang
Technology is no longer included in the
scope of consolidation
4. R&D Investment
√ Applicable □ Not applicable
During the reporting period the Company invested RMB 37488000 in research and development mainly input in new
technologies to improve the stage effect the background control system the production of VR content and upgrade of the ticketing
system. In the light of consistency and prudence the Company's R&D investment is fully included in the current profit and loss
without capitalization.The Company's R&D investment in the past three years and its percentage in operating income
2020 2019 2018
Number of R&D personnel 253 252 326
Percentage of R&D personnel 17.56% 17.37% 19.09%
R&D investment (yuan) 37487964.00 48424520.54 70567576.48
The proportion of R&D
investment to operating income
4.15% 1.85% 2.20%
Capitalized amount of R&D
expenditure (yuan)
0.00 0.00 0.00
Percentage of capitalized R&D
expenditure in R&D investment
0.00% 0.00% 0.00%
Percentage of capitalized R&D
expenditure in current net
profit
0.00% 0.00% 0.00%
The reason for the significant change in the proportion of the total amount of R&D investment to operating income compared with
last year
□ Applicable √ Not applicable
Reasons and rational explanations on the substantial change in capitalization rate of R&D investment
□ Applicable √ Not applicable
5. Cash Flow
Unit: RMB
Item 2020 2019
Year-on-year increase or
decrease
Subtotal of cash inflow from
operational activities
943790117.88 3146681409.32 -70.01%
Subtotal of cash outflow from
operational activities
549848217.94 1575229909.81 -65.09%
Net cash flow generated by
operating activities
393941899.94 1571451499.51 -74.93%
Subtotal of cash inflow from
investment activities
1351939517.27 1939481747.40 -30.29%
Subtotal of Cash Outflow from
Investment Activities
2292941086.10 3120852903.60 -26.53%
Net amount of cash flow
generated by investment
activities
-941001568.83 -1181371156.20 20.35%
Subtotal of cash inflow from
financing activities
420000000.00 13500000.00 3011.11%
Subtotal of cash outflow from
financing activities
306917837.81 174312936.00 76.07%
Net cash flow generated by
financing activities
113082162.19 -160812936.00 170.32%
Net additions to balance of
equivalents
-443933773.37 231761674.88 -291.55%
Description of the main factors affecting the significant changes in related data over the same period of last year
√ Applicable □ Not applicable
During the reporting period the subtotals of cash inflows and outflows from operating activities and the net cash flows fro m
operating activities decreased by 70.01% 65.09% and 74.93% respectively year-on-year mainly due to the impact of the epidemic
and the fact that Huafang Technology is no longer incorporated into the scope of the Company's consolidation.
During the reporting period the subtotals of cash inflow and outflow from investment activities decreased by 30.29% and
26.53% respectively year-on-year mainly due to the year-on-year decrease in the Company's purchase and redemption of financial
products.
During the reporting period the subtotal of cash inflow from financing activities increased by 3011.11% year-on-year mainly
due to the increase in the Company's bank loans and the receipt of capital contributions from shareholders by Xi'an Romance S how
Company.
During the reporting period the subtotal of cash outflows from financing activities increased by 76.07% year-on-year mainly
due to the year-on-year increase in the Company's repayment of bank loans and dividend distribution.Reasons for the significant difference between the net cash flow generated by the company's operating activities in the
reporting period and the net profit in the current year
√ Applicable □ Not applicable
Supplementary information Amount of this period
1. Reconciliation of net profit to cash flows from operational
activities:
Net Profit -1766945878.00
Plus: Credit impairment loss 32739976.91
Provision for Impairment of Assets 1877720155.72
Depreciation of fixed assets 201385250.67
Amortization of Intangible Assets 56669812.67
Amortization of long-term prepaid expenses 35034022.89
Losses on disposal of fixed assets intangible assets and other
long-term assets (mark "-" for incomes)
-676435.92
Losses on scrapping of fixed assets (mark "-" for incomes) 38302318.05
Losses on fair value changes (mark "-" for incomes) -247726.31
Financial expenses (mark "-" for incomes) 17775739.48
Losses on investment (mark "-" for incomes) -14014892.30
Decrease on deferred income tax assets (mark "-" for increases) -9318905.44
Increase on deferred income tax liabilities (mark "-" for
decreases)
-3137428.24
Decrease on inventories (mark "-" for increases) -1993817.28
Decrease on operational receivables (mark "-" for increases) -44275900.28
Increase on operational payables (mark "-" for decreases) -25074392.68
Others
Net cash flow generated by operating activities 393941899.94
III. Non-Core Business
√ Applicable □ Not applicable
Unit: RMB
Amount
Percentage of Total
Profit
Reason Sustainability
Investment Income 14014892.30 -0.81%
Mainly due to long-term
equity investment and
financial income calculated
by the equity method
Yes
Changes in fair
value gains and
losses
247726.31 -0.01% No
Asset Impairment -1910460132.63 109.98%
Mainly due to the
impairment of the long-term
equity investment of
Huafang Technology held by
the Company
No
Non-operating
Revenue
3242377.14 -0.19% No
Non-Operating
Expenses
41007879.43 -2.36%
Mainly due to the
Company's scenic upgrades
and renovations
No
IV. Analysis of Assets and Liabilities
1. Significant changes in assets composition
Since 2020 the Company implemented new revenue standards and new leasing standards for the first time and adjusted the items
related to financial statements at the beginning of the year.
Applicable
Unit: RMB
End of 2020 Early 2020 Proportion
increase and
decrease
Statement on Significant
Changes Amount
Proportion To
Total Assets
Amount
Proportion To
Total Assets
Cash and Bank
Balances
1337776253.98 14.55% 1785124821.87 16.17% -1.62%
Accounts
receivable
5887012.36 0.06% 5337855.43 0.05% 0.01%
Inventory 13424146.50 0.15% 6110221.56 0.06% 0.09%
Long-term
Equity
Investment
1534539625.11 16.69% 3468596165.08 31.42% -14.73%
Mainly due to the impairment
of the long-term equity
investment of Huafang
Technology held by the
Company
Fixed Assets 2508754929.16 27.28% 2311251277.89 20.93% 6.35%
Mainly due to the transfer of
the Company's project in
construction into fixed assets
Projects under
Construction
771871563.73 8.39% 370000233.10 3.35% 5.04%
Mainly due to increased input in
the Company's projects in
construction
Long-term loan 282000000.00 3.07% 0.00% 3.07%
Mainly due to increase in the
Company's bank loans
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
Item
At the
beginning of
the reporting
period
Changes in
fair value
gains and
losses in the
current
period
Cumulative
fair value
changes in
equity
Impairment
loss of the
reporting
period
Purchase
amount of
the reporting
period
Sales amount
of the reporting
period
Other
variations
At the end of
the reporting
period
Financial Assets
1. Trading
financial
assets
(excluding
derivative
financial
assets)
854108086.54 -4999569.16 814776184.30 1354628734.60 19371860.52 328627827.60
2. Derivative
financial
assets
6589730.08 6589730.08
3. Other
credit
investments
4.
Investment
in other
300959931.64 -76693334.90 224266596.74
equity
instruments
Subtotal of
financial
assets
1155068018.18 1590160.92 -76693334.90 814776184.30 1354628734.60 19371860.52 559484154.42
Total 1155068018.18 1590160.92 -76693334.90 814776184.30 1354628734.60 19371860.52 559484154.42
Financial
liabilities
0.00 0.00 0.00 0.00 0.00 0.00
Note: ① Changes in fair value recognized in profit or loss for the current period are 1590160.92 yuan which is composed of
changes in fair value recognized in profit or loss of 247726.31 yuan and converted difference in foreign currency statements
of 1342434.61 yuan; ② Other changes are accumulated investment income.
Are there any significant changes in the measurement attributes of the company's main assets during the reporting period?
□ Yes √ No
3. Restrictions on asset rights as of the end of the reporting period
As of the end of the reporting period the Company's main assets were not seized frozen mortgaged or pledged.
V. Investment analysis
1. Overview
√ Applicable □ Not applicable
Investment In The Reporting Period (RMB)
Investment Over The Corresponding
Period Of Last Year
Rate Of Change
2159030550.7 2680647888.78 -19.46%
2. Significant equity investments acquired during the reporting period
√ Applicable □ Not applicable
Unit: RMB
Invested
Company
Name
Main
businesses
Investment
Mode
Investment
Amount
Shareholding
Percentage
Capital
Source
Partner
Investment
Period
Product
type
Progress
as of
Balance
Sheet Date
Anticipated
Income
Current
Investment
Profit and Loss
Involved
in a
Lawsuit
Disclosing
Date (If
Any)
Disclosing
Index (If
Any)
Zhuhai
Southern
Film and
Television
Cultural
Industry
Co. Ltd.
Project
development
operation and
management
of film and
television
industry;
Acquisition 378000000.00 100.00%
Equity
Fund
N/A Long-term
Film and
television
culture
Completed 0.00 -16469469.80 No
Invested
Company
Name
Main
businesses
Investment
Mode
Investment
Amount
Shareholding
Percentage
Capital
Source
Partner
Investment
Period
Product
type
Progress
as of
Balance
Sheet Date
Anticipated
Income
Current
Investment
Profit and Loss
Involved
in a
Lawsuit
Disclosing
Date (If
Any)
Disclosing
Index (If
Any)
development
operation and
management
of tourism
projects; real
estate
development;
business
services and
commercial
wholesale and
retail
Total -- -- 378000000.00 -- -- -- -- -- -- 0.00 -16469469.80 -- -- --
3. Major non-equity investments underway during the reporting period
□ Applicable √ Not applicable
4. Financial assets at fair value
√ Applicable □ Not applicable
Unit: RMB
Asset Class
Initial
Investment
Cost
Changes in fair
value gains and
losses in the
current period
Cumulative
fair value
changes in
equity
Amount
purchased during
the reporting
period
Amount sold
during the
reporting period
Cumulative
investment
income
Amount at the
end of the
period
Capital
Source
Fund 110024148.79 -538080.75 103776184.30 40362625.24 -454248.84 172445378.26
Temporarily
idle own
funds
Financial
Derivatives
6589730.08 6589730.08
Temporarily
idle own
funds
Other (Bank
Financial
Products)
744083937.75 -4461488.41 711000000.00 1314266109.36 19826109.36 156182449.34
Temporarily
idle own
funds
Total 854108086.54 1590160.92 0.00 814776184.30 1354628734.60 19371860.52 335217557.68 --
Note: The current fair value change in profit and loss in the table is 1590160.92 yuan which is composed of the fair value change
in profit and loss of 247726.31 yuan and the converted difference in foreign currency statements of 1342434.61 yuan.
5. Utilization of raised funds
□ Applicable √ Not applicable
No use of funds in the reporting period of the Company
VI. Major Assets and Equity Sales
1. Major assets sales
□ Applicable √ Not applicable
No major assets sales in the reporting period of the Company
2. Major equity sales
□ Applicable √ Not applicable
VII. Analysis of Major Subsidiaries and Investees
√ Applicable □ Not applicable
Major subsidiaries and joint-stock companies with a net profit impact of over 10%.Unit: RMB
Company Name
Company
Type
Main businesses
Registered
Capital
Total Assets Net Assets
Operating
income
Operating Profit Net Profit
Sanya Romance
Tourism
Performance Co.Ltd.Subsidiary
Company
Theme park + Art
performance
490000000.00 934587240.66 898931442.88 127098246.23 79054679.57 69002874.47
Lijiang Chama
Ancient City
Tourism
Development
Co. Ltd.
Subsidiary
Company
Theme park + Art
performance
250000000.00 606265695.91 579980699.81 136520949.23 74962536.68 62836710.80
Songcheng
Tourism
Development
Co. Ltd.
Subsidiary
Company
Tourism resource
development
tourism planning
and design artistic
creation brand and
marketing planning
of tourist attractions
50000000.00 709296365.59 416014324.88 168821226.38 163040087.48 162911596.90
Beijing Huafang
Technology Co.Ltd. (formerly
known as Beijing
Joint stock
company
Internet information
service
performance
brokerage business
53333333.00
1882542983.2
7
1503710234.6
5
3777442691.4
1
9844199.94 -10799124.63
Six Rooms
Technology Co.Ltd.)
business on music
entertainment
products through
information
network
competition
activities
Major holding companies and joint stock companies;
1. The report data of Beijing Huafang Technology Co. Ltd. (formerly known as Beijing Six Rooms Technology Co. Ltd.) is
presented on the basis of the fair value of the investee's identifiable assets and liabilities when the investment is obtained.
2. This year the Company made 1861297284.90 yuan of impairment provision for the long-term equity investment in Beijing
Huafang Technology Co. Ltd.
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
Company Name
Method of acquisition and disposal of
subsidiaries during the reporting period
Impact on overall production management
and performance
Zhuhai Songcheng Performance Kingdom
Co. Ltd
New in 2020
Zhuhai Southern Film and Television
Cultural Industry Co. Ltd.
Acquire 100% equity in 2020
Zhuhai Huayin Landscaping Co. Ltd.
A 55% holding subsidiary of Zhuhai
Southern Film and Television Culture
Industry Co. Ltd. acquired in 2020
Songcheng Brand Management Co. Ltd. New in 2020
Romance Show Management Co. Ltd. New in 2020
Hangzhou Songcheng Art Troupe Co. Ltd. Canceled in 2020
Zhejiang Songcheng Entertainment Culture
Co. Ltd.
Canceled in 2020
VIII. The structured entity controlled by the Company
□ Applicable √ Not applicable
IX. Prospects for the Future Development of the Company
At the beginning of 2020 the COVID-19 pandemic swept across the world taking a considerable toll on the social order and
economic operation of all the countries especially the entertainment and service industries. As a pioneer in the nation's cu ltural
and tourism industry the Company closed all the scenic spots since January 24 under the call the CPC and government. Until the full
resumption on June 12 financial impact is inevitable due to business suspension and recovering of the industry chain.
After 20 years of development the Company has experienced difficult times such as the Southeast Asian financial crisis SARS
and the 2008 financial crisis. The history shows that every crisis is a rare development opportunity especially for companies that are
prepared. After this epidemic competitors with weak financial strength will fail those lacking creative ability will lose more shares
and new comers will become more cautious. As a subsequent result the competition pattern in the industry will be more favorable
to the Company.
As the downward trends of the cultural and travel industry slid as a result of the epidemic the Company is more aware of its
own position and weak links in the industry. During the epidemic the Company upgraded hardware against the difficult time tried
the performing arts kingdom model and achieved initial results. In the future the Company will unswervingly transform and
upgrade itself to a performance platform company and think from the perspective of social communication internet and users.
Connecting upstream and downstream sectors it will build a new value ecology and industry order and absorb more diversified
professional talents. Meanwhile a variety of economic components will be developed to constantly acti vate the creativity and
vitality of the Company making it a more vibrant and imaginative company.(I) Overview of industry background
In 2020 the entire cultural and tourism industry was hit hard by the COVID-19 epidemic and many were pushed on the verge
of bankruptcy. According to the National Bureau of Statistics there were 2.88 billion domestic tourists in 2020 a decrease of 52.1%
from the previous year. Domestic tourism revenue was 2228.6 billion yuan down by 61.1%. The Blue Book of Chinese Tourism
Economics (NO.13) issued by the China Tourism Academy (Data Center of the Ministry of Culture and Tourism) estimated that the
number of domestic tourists in 2021 will recover to 68.3% of 2019 and the revenue of domestic tourism will recover to 57.6% of
2019.
As the epidemic is gradually under control with expanding vaccination the cultural and tourism industry is slowly recovering
and market data is increasing especially that on domestic tourism. Being the epidemic is still prevalent in other countries outbound
travel will continue to be restricted. It is expected that the internal circulation of tourism and the return of tourism consumption will
continue to be the main trend of the industry in the future. In the post-epidemic era demand-side trends of the industry are as
follows:
1. Rising consumption of Generation Z
Generation Z refers to the "indigenous people" of internet born between 1995 and 2009. They grew up with computers
smartphones and instant messaging software carrying features of circle cultures ACG and niche preference. According to the
National Bureau of Statistics the total population of Generation Z in the Chinese mainland is about 260 million accounting for
about 20% of the total population. The generation is the main group of consumption upgrades with frequent consumption in
tourism. According to the survey data of Mafengwo 45.3% of Generation Z people travel 2-3 times a year and 12.4% travel more
than 4 times. The proportions are much higher than those of other age groups and nearly half of the respondents said that the
epidemic has a small impact on tourism consumption and will maintain their previous level of consumption in tourism after the
epidemic.The rise of Generation Z is an iterative update of new consumer demand and group culture and it also brings new economic
trends. In 2021 for the cultural and tourism industry hit by the COVID-19 seizing Generation Z is to grasp the incremental market
for new cultural and tourism consumption in the post-epidemic era. The ability to accurately capture the travel consumption
preferences of Generation Z is the key to success.
2. Rising popularity of surrounding travel
Long-distance travel is relatively restricted during the recovery period of the epidemic the popularity of travel around the
cities will continue to increase and exist for a long time. Overlapped with the demand back from outbound travel the surrounding
tourism markets of the Yangtze River Delta Pearl River Delta Beijing-Tianjin-Hebei and other core tourist source areas are
expanding significantly. According to the research report of the China Tourism Academy in the post-epidemic era tourists of various
scenic spots mainly come from within the province. Urban one-day trips and suburban tours have recovered and the proportion of
self-driving trips has increased. Self-guided family tours have become the main market contributor. The in-depth exploration and
repeated consumption of the population in the core cities around the scenic spot will become one of the i mportant tasks of the
market.
3. Tourism consumption from lower-level regions
According to data from the National Bureau of Statistics in recent years the growth rate of per capita consumption
expenditure in rural areas was higher than that of urban residents indicating that rural residents also begun to have more potential
for consumption. The growth rate of domestic tourist arrivals and consumption of rural residents has shown an upward trend in
recent years while that of urban residents has declined. The decline of domestic cultural and tourism consumption to third-tier and
fourth-tier cities and towns is also related to the more balanced development of the economic level which will become a long-term
trend.The Company’s performing arts kingdom model caters to the current consumption needs of Generation Z from the content
side; special events such as summer night tours to meet the surrounding tourism market; the high medium and low product system
to cope with cultural and tourism consumption from lower-level regions and the work done during the reporting period closely
focused on the current changes in market trends.(II) Development strategy planning of the Company
After more than 20 years of development the Company has established a relatively large competitive advantage in scale
market marketing technology brand and industry status. In the future tourism and cultural industries will face unpreceden ted
development opportunities in consumption upgrades. To meet market challenges and seize industry development opportunities
the Company will adhere to the differentiated and centralized development strategy give full play to its creative and innova tive
capabilities strengthen development and application of new technologies continue to make bre akthroughs in innovative business
forms and maintain integrated development. While consolidating its foundation in the performing arts the Company will seek
another leapfrog development to bring its value to a new level.
1. Adhere to differentiation and centralized development
The Company will adhere to the differentiated competition strategy uphold the banner of "performing arts" and strengthen
the development mode of "theme park + cultural performance" to avoid homogenous competition with other type s of theme parks;
value application of technological innovation to cater to the needs of young people; give full play to creativity to increase attraction
and improve experiences of performance content.It will remain committed to the strategy of centralized development and focus on the layout in first-line tourism destinations
and live entertainment fields related to performing arts; remian within its ability circle to avoid excessive development and stay
cautious in diversification.
2. Attention to creativity and innovation
Innovation is the lifeblood of the Company and only internal creativity can build a century-old Songcheng. The Company based
on market direction will adhere to performing arts as the core and focus on experience. Starting from planning it will continue to
strengthen the core competitiveness of "performance" and integrate innovation into planning and design interactive experien ce
theater matrix performance content and market planning.
3. Drive innovation in live performance with technology
Technological innovation is a powerful tool to promote the transformation and by upgrading the cultural industry and achieve
high-quality development. Technology is playing an increasingly important role in performance effects and the audience experience.The combination of cutting-edge stage machinery lighting sound and smart equipment will realize the coexistence of the real and
virtual worlds on the same stage/scene and enhance visitors/audience's experience of the real world while br inging them
unperceivable feelings. In addition live entertainment with a strong sense of immersion will innovate the overall entertainment
experience.
4. Breakthroughs in business forms
The Company has become an industry leader in tourism and performing arts. That is not enough it is actively exploring
innovative models thereby enhancing social contributions. "Tourism performance + urban performance" is advancing and the
construction of a performing arts kingdom will make it to penetrate from mass tourism to segmented population markets. The
Company will constantly challenge itself to seek a broader market scale and greater development segment. In the construction of
the Shanghai project multiple shows and diversified ticket combinations will be introduced based on the Romantic Show extending
its services to tourist groups locals and those from close regional markets.
5. Committed to integrated development
The current corporate governance has created greater possibilities for the Company's resource integration and group
operations. Integrated development is a powerful weapon to improve combat capabilities and achieve strategic goals. In the fu ture
the Company will be committed to integration of tourism and cultures cultures and technology independent investment and light
assets entertainment and vacation marketing and planning products and markets contents and platforms consumers and
producers theme scenic spots and performing arts kingdom as well as internet and the capital market.
6. Platform-based strategy for performance
The epidemic has resulted in negative impact to the industrial chain and structure but also gave birth to new opportunities.The Company is considering to become a platform for industry accumulation to gather the industrial chain shattered by the
epidemic and that squeezed out by urbanization on the Company's platform. That includes for example professional equipment
various studios performing talents and drama platforms performance management and output ticketing and international art
exchange platform. The Company will be built into a platform for social communication of young people family gatherings the
elderly and relaxing for business people. It is also a communication platform for various artists and art categories.(III) Work plan in 2021
Since the outbreak of the epidemic the Company has focused on recovery strategy and economy. After years of development
the Company has formed strong capital strength and brand influence rich intellectual resources and significant competitive
advantages. It has stronger anti-risk capabilities and a better development foundation than ever before. Through systematic review
consideration and preparation the Company is full of confidence and enthusiasm and is ready for the market repair and further
development after the epidemic is over.
1. Development of Shanghai project
2021 is the first year of the nation's 14th Five-Year Plan and also the 25th anniversary of the establishment of Songcheng
Group an important milestone for the Company's development. The Shanghai project is a key node to link the past and present.and is also an important stage for Songcheng to further consolidate and establish its top position in performance in the world. The
Company will be more tolerant and open while leveraging its closed-loop advantages. Songcheng in Shanghai will become a rich
platform for exchanges of various art forms and a platform for live entertainment. In the future the Shanghai project with its
location advantages will carry out various activities like performances festivals exhibitions and IP exhibitions through self-made
shows customization introduction cooperation and sharing. It will continuously expand circles and influence and complete the
three-dimensional concept of the performance kingdom while laying a solid foundation for its replication.
2. Upgrade of existing projects
The continuous improvement of existing projects is conducive to better product quality and user experience. The Company will
continue to renovate and upgrade existing projects by expanding and renewing travel routes adding various types of indoor and
outdoor theaters and shows and adding popular sites and rest areas. The new changes will increase return visitor attendance
potential.
3. Establish a hierarchical system for high-end medium-end and low-end products
For the core projects of "Romantic show" some adjustments were made to the "Romantic Show" in Sanya Xi'an and other
places to extract in-depth new cultural elements and integrate more stage expressions; the introduction of "Love in" and "Color"
different from the "Romantic Show" series presents culture in a newer and purer form; the existing outfield performances wer e
also improved and the features of the scenic spot were ful ly used to make a point-line-field presentation layout of outfield
performances namely a system in which tourists can watch the shows and participate in immersive interactions. The differenti ation
in the market will not only deepen the type and quality of Songcheng's performance product line but also further consolidate its
the core position in the local tourism and performance market.
4. Promotion of projects in Foshan Xitang and Zhuhai
The projects in Foshan and Xitang are the continuation of the Romantic Show product line in the Yangtze River Delta and the
Pearl River Delta. The Company will ensure the steady progress of various projects and accelerate the construction. As a flag ship
product in the future the Zhuhai project has generated high expectations for the Company and it will invest accordingly to the
planning and design engineering construction and artistic creation to ensure that the Zhuhai project will become a world-class
entertainment destination for performing arts.
5. Continue to strengthen marketing
The Company will penetrate into low-level regions to consider local cultural and market features and establish a differentiated
market mechanism according to different tourist destinations; strengthen overall layout of channels in each sce nic spot market
based on the introduction of visitor flow and build an intensive marketing network through online and offline marketing chan nels in
combination with point line and field; Combine reshaping of the brand event marketing and precise placeme nt to make a good
job in the promotion and comprehensive marketing of each project; innovate the promotion mode and find suitable partners and
internet celebrities strengthen the use of short videos and We media and activate the promotion of young peopl e on We media.
6. Improve mechanism and talent structure
The Company will focus on three key points in building a talent system in 2021:
(1) Introduction: Fully research the talents required by the post and identify the features of talents required by different posts.
Introduce high-level talents and establishment a talent pool of Songcheng through external introduction and internal exploration;
expand contacts for professional posts to provide talent support for the Company's innovation strategy.
(2) Use of talents: Today realizing self-value has become the demand of most young employees. Based on this the Company
will combine the situation of talents and posts to set up jobs that meet employees' ability development and expectations and
enable them to achieve self-satisfaction and self-realization while gaining sufficient growth. In addition a variety of incentive
channels such as joint systems and performance as well as warm and effective communication will bind talents to promote thei r
sustainable development.
(3) Cultivation: Build a stage for outstanding talents to display their skills and expand their horizons help them go beyond
limitations of the original work and give full play to their ability. The Company will implement a training plan for Songcheng's
high-potential talents integrate and upgrade the existing talent training system putting talent and the Company on the same page
in transformation and development.X. Registration Form for Reception of Research Communication Interviews and Other Activities
1. Registration Form for reception of research communication interviews and other activities during the
reporting period
√ Applicable □ Not applicable
Reception
Time
Reception
location
Reception
Method
Reception
target type
Reception
objects
Main content of
the discussion
and the
information
provided
Index of the basic information of research
August 8
2020
Company
meeting
room
Field
Investigation
Institution
Brokerage
researcher and
fund company
manager
Business
introduction in
first half of the
year and Q&A
For details please refer to the "Record of
Investor Relations Activities on August 8
2020" announced by the Company on
http://www.cninfo.com.cn on August 10
2020.
October
29 2020
Company
meeting
room
Field
Investigation
Institution
Brokerage
researcher and
fund company
manager
Business
introduction in
Q3 and Q&A
For details please refer to the "Record of
Investor Relations Activities on Thursday
October 29 2020" announced by the
Company on http://www.cninfo.com.cn on
Sunday November 1 2020.
Section V Significant Events
I. Distribution of Common Stock Profits of the Company and Capitalization of Capital Reserves
Distribution policies of the common stock profits during the reporting period especially the formulation implementation or
adjustment of the cash dividend policies
√ Applicable □ Not applicable
Reviewed and approved at the 6th meeting of the 7th Board of Directors held on April 27 2020 and at the annual
shareholders' meeting for 2019 held on May 18 2020 the company's plan for profit distribution in 2019 was: Taking the total share
capital of 1452607800 shares of 2019 as the basis RMB 2.00 (tax included) of dividend for every 10 shares was distributed to all
the shareholders with a total amount of cash dividend of RMB 290521560 and 8 shares capitalized from the capital reserves were
distributed to all the shareholders for every 10 shares with a total number of 1162086240 shares. After capitalization the total
share capital amounted to 2614694040 shares. During the reporting period the Company has completed the equity distribution.The equity registration date: May 28 2020 and the date of exclude right (XR) and exclude dividend (DR): May 29 2020.Special notes on cash dividend policies
Whether they comply with the requirements of the Company's
articles of incorporation or the resolutions of the General
Meeting of Shareholders:
Yes
Whether the dividend standards and proportions are distinct
and clear:
Yes
Whether the relevant decision-making procedures and
mechanisms are complete:
Yes
Whether the independent directors performed their duties and
played their due role:
Yes
Whether the minority shareholders have the opportunity to fully
express their opinions and appeals and whether their legitimate
rights and interests have been fully protected:
Yes
Whether relevant conditions and procedures are compliant and
transparent when the cash dividend policies are being adjusted
or changed:
Not applicable.The plan for profit distribution and capitalization of capital reserves during the reporting period is consistent with relevant
provisions in the articles of association and dividend management measures of the Company
√ Yes □ No □ Not applicable
The plan for profit distribution and capitalization of capital reserves during the reporting period is in compliance with relevant
provisions in the articles of association of the Company.Profit distribution and capitalization of capital reserves in the current year
Number of bonus shares per 10 shares (shares) 0
Number of dividend payout per 10 shares (RMB) (tax included) 0.5
Number of capitalized shares per 10 shares (shares) 0
Equity base in the distribution preplan (shares) 2614694040
The amount of cash dividends (yuan) (including tax) 130734702.00
The amount of cash dividends (yuan) in other ways (such as
share repurchase)
0.00
The total amount of cash dividends (including in other ways)
(yuan)
130734702.00
Distributable profits (RMB) 3132049591.95
The ratio of the total amount of cash dividends (including in
other ways) to the total amount of profit distribution
100.00%
Latest cash dividend
If the Company's development stage is not easy to define but there are significant capital expenditure arrangements when the
profits are being distributed the proportion of the cash dividends in this profit distribution should be at least 20%
Details of the preplans on profit distribution or capitalization of capital reserves
Audited by BDO China Shu Lun Pan CPAs (special general partnership) the net profit attributable to the shareholders of the listed
company in 2020 was RMB -1752398000. Based on the total share capital of 2614694040 shares as at December 31 2020 the
Company distributed RMB 0.50 (tax included) of dividend for every 10 shares to all the shareholders with a total cash dividend of
RMB 130734702.
The Company's common stock dividends distribution plan (preplan) and capital reserve capitalization plan (preplan) in the pas t
three years (including this reporting period)
The 2018 profit distribution plan: according to the resolution of 2018 annual shareholders' meeting the Company
implemented the 2018 profit distribution plan on May 15 2019 which was: based on the total share capital of 1452607800
shares as at December 31 2018 the Company distributed RMB 1.2 (tax included) of dividend for every 10 shares to all the
shareholders with a total cash dividend of RMB 174312900.The plan for profit distribution and capitalization of capital reserves of the Company in 2019: according to the resolution of
2019 annual shareholders' meeting the Company implemented the 2019 profit distribution plan on May 28 2020 which was:
Taking the total share capital of 1452607800 shares as at December 31 2019 as the basis RMB 2.00 (tax included) of dividend for
every 10 shares was distributed to all the shareholders with a total cash dividend of RMB 290521560 and 8 shares capitalized from
the capital reserves were distributed to all the shareholders for every 10 shares with a total number of 1162086240 shares. Upon
such capitalization the total share capital amounted to 2614694040 shares.The 2020 profit distribution preplan: the 10th meeting of the 7th Board of Directors and the 8th meeting of the 7th Board of
Supervisors held by the Company on April 22 2021 reviewed and approved the 2020 Profit Distribution Preplan. According to the
Audit Report issued by BDO China Shu Lun Pan CPAs Co. Ltd (Xin Kuai Shi Bao Zi [2021] No. ZA11461) the Company achieved a net
profit attributable to the shareholders of listed companies in the amount of RMB -1752398009.60 in 2020 plus the undistributed
profits at the end of the previous year in the amount of RMB 5176157180.79 deduct the distributed dividends for 2019 in the
amount of RMB 290521560.00 and add the retained earnings carried forward from other comprehensive income in the amount of
RMB -1356586.59 the actual distributable profit for shareholders in 2020 was RMB 3131881024.60. As at December 31 2020 the
balance of capital reserves of the Company was RMB 1211364214.86.
Based on the total share capital of 2614694040 shares at the end of 2020 the Company planned to distribute RMB 0.50 (tax
included) of dividend for every 10 shares to all the shareholders with a total cash dividend of RMB 130734702 in 2020.It is held by the Board of the Directors of the Company that although the epidemic impacted the performances of the Company
the 2020 profit distribution plan proposed by the Company was consistent with the provisions concerning profit distribution in the
Company Law the Circular of the CSRC on Further Implementation of the Matters Concerning Cash Dividends of the Listed
Companies the Guideline No. 3 of the CSRC on Regulation of the Listed Companies - Cash Dividends of the Listed Companies the
Articles of Association and other laws and regulations and was legal compliant and reasonable in view of the Company's
confidence for long-term development for better consideration of both the immediate interests and long-term interests in
accordance with the relevant provisions of the CSRC which encourage distribution of dividends and on the condition that the
healthy sustainable development of the Company was guaranteed. The Company needs to submit the above plan to 2020 annual
shareholders' meeting of the Company for review.The Company's cash dividends for common stocks in the past three years (including this reporting period)
Unit: RMB
Year
Cash dividend
amount (tax
included)
Net profit
attributable to
common stock
shareholders of
listed companies
in the
consolidated
financial
statement of the
year for dividend
distribution
The ratio of cash
dividends to the
net profit
attributable to
ordinary
shareholders of
listed companies
in the
consolidated
statements
The amount of
cash dividends in
other ways (such
as share
repurchase)
The proportion of
cash dividends in
other ways to the
net profit
attributable to
ordinary
shareholders of
listed companies
in the
consolidated
statements
Total amount of
cash dividends
(including other
ways)
The ratio of total
amount of cash
dividends
(including other
ways) to the net
profit attributable
to ordinary
shareholders of
listed companies
in the
consolidated
statements
2020 130734702.00 -1752398009.60 -7.46% 130734702.00 -7.46%
2019 290521560.00 1339790994.94 21.68% 290521560.00 21.68%
2018 174312936.00 1287186547.41 13.54% 174312936.00 13.54%
The Company's profits during the reporting period and the parent company's distribution of common stock shareholders' profits are
positive but a cash dividend distribution preplan for common stock is not proposed.
□ Applicable √ Not applicable
II. Performance of Commitments
1. Commitments made by the Company's controlling shareholders’ shareholders related parties purchasers
and purchasing companies and 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 which should be fulfilled during the reporting period as promised by the Company's actual
controller shareholders related parties purchasers and purchasing companies and those that have not been fulfilled by the end of
the reporting period.
2. If there is a profit forecast for the Company's assets or projects and the reporting period is still within the
profit forecast period the Company shall make an explanation on the fulfillment and its reasons
□ Applicable √ Not applicable
III. Occupation of the Capital of Listed Companies by Controlling Shareholders and Their Related
Parties for Non-operational Purposes
□ Applicable √ Not applicable
During the reporting period there is no non-operational capital occupation over listed companies by controlling shareholders
and their related parties.IV. Explanations Made by the Board of Directors on the Latest "Non-standard Audit Report"
□ Applicable √ Not applicable
V. Explanations Made by the Board of Directors the Board of Supervisors and Independent
Directors (If Any) on the "Non-standard Audit Report" from the Accounting Firm during the
Reporting Period
□ Applicable √ Not applicable
VI. Explanations Made by the Board of Directors on the Changes to the Accounting Polices and
Accounting Estimates or the Corrections of Significant Accounting Error during the Reporting
Period
√ Applicable □ Not applicable
1、 Changes in significant accounting policies
1) Implementation of "Accounting Standards for Business Enterprises No. 14 - Revenue" (revised in 2017) (hereinafter referred
to as "New Revenue Standards")
The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 14 - Revenue" in 2017 The revised
standards stipulate that for the first implementation of the standards the amount of retained earnings and other related items in
the financial statements at the beginning of the year should be adjusted according to the cumulative effects and the informa tion
for the comparable period should not be adjusted.This Company implemented the new revenue standards since January 1 2020. According to the standards the company only
adjusted the retained earnings and other related items in the financial statements at the beginning of the year 2020 for the
cumulative effects of contracts that have not been completed on the date of first implementation and the comparative financial
statements were not adjusted. These standards have the following major effects:
Content and Reasons for Change in Accounting
Policies
Approval process Statements
Affected
Affected Amount of Balance on
January 1 2020
Consolidated
Subsidiaries
Parent
company
(1) The advance payments related to the
contractual income are reclassified into the
The 6th meeting of the
7th Board of Directors
Received
Prepayments
-311838903.34 -731628.89
contractual liabilities. Contract
liabilities
294302487.38 710319.31
Other Current
Liabilities
17536415.96 21309.58
Compared with the original revenue standards implementation of the new revenue standards has the following effects on the
relevant items of the financial statements in 2020 (increase/(decrease)):
Balance Sheets Items Affected Affected Amount of Balance on Thursday December 31 2020
Consolidated Subsidiaries Parent company
Contract liabilities 188550237.52
Received Prepayments -192064139.60
Other Current Liabilities 3513902.08
2) Implementation of "Accounting Standards for Business Enterprises Interpretation No. 13"
The Ministry of Finance issued the "Accounting Standards Interpretation for Business Enterprises No. 13" (CaiKuai [2019] No.
21 hereinafter referred to as "Interpretation No. 13") on December 10 2019 which came into force on January 1 2020.
Retrospective adjustment was not required.① Identification of Related Parties
Interpretation No. 13 clarifies that the following circumstances constitute a related party: a joint venture or affiliated bu siness
between an enterprise and other member units (including parent companies and subsidiaries) of the enterprise group to which it
belongs; a joint venture of the enterprise and other joint ventures or affiliated business. In addition Interpretation No. 13 also
clarifies that only two or more companies that are only significantly affected by one party do not constitute a related party. It also
adds that affiliated business includes affiliated business and their subsidiaries and joint ventures include joint ventures and their
subsidiaries.
② Definition of Business
Interpretation No. 13 completes the three elements of business composition refines the judgment conditions of business
composition and at the same time introduces the "concentration ratio test" option to simplify to a certain extent the proble ms
such as judgment of whether a combination obtained under the same control constitutes a business etc.The company implemented Interpretation No. 13 since January 1 2020 and the comparative financial statements were not
adjusted. The implementation of Interpretation No. 13 did not have significant impact on the company’s financial status and
operating results.
3) Implementation of the "Interim Provisions on Accounting Treatment of Carbon Emission Rights Trading"
On December 16 2019 the Ministry of Finance issued the "Interim Provisions on Accounting Treatment of Carbon Emission
Rights Trading" (CaiKuai [2019] No. 22) which is applicable to related companies in the key emission units (hereinafter refe rred to
as key emission companies) which operate carbon emission rights trading business in accordance with the "Interim Measures forthe Management of Carbon emission Rights Trading”. This provision came into effect on January 1 2020 and key emission
companies should adopt prospective application to apply this provision.The company implemented this provision since January 1 2020 and the comparative financial statements were adjusted. The
implementation of this provision did not have significant impact on the company’s financial status and operating results.
4) Implementation of the "Provisions on accounting treatment of rent concessions related to COVID-19"
On June 19 2020 the Ministry of Finance issued the "Provisions on accounting treatment of rent concessions related to
COVID-19" (CaiKuai (2020) No. 10) which came into effect on June 19 2020 allowing companies to adjust related rent concessions
that occurred between January 1 2020 and the implementation date of this provision. According to this provision for rent
concessions directly caused by COVID-19 that meet the conditions for example rent remission and deferred payment of rent
companies can choose to adopt simplified methods for accounting treatment.The company adopts the simplified method for accounting all rent concessions within the scope the provision and adjusted
the relevant rent concessions from January 1 2020 to the date of implementation of the provision accordingly.
As the lessee this Company adopted simplified methods for treatment of relevant rent concessions in order to write down the
operating costs management expenses and sales expenses for the current period in the total amount of RMB 13042042.83.
As the lessee this Company adopted simplified methods for treatment of relevant rent concessions in order to write down the
operating costs for the current period such rent simplification had no significant impact on the Company.
2. Changes in Significant Accounting Estimates
There were no changes in significant accounting estimates during the reporting period.
3. First implementation of the new revenue standards and adjustment of related items of the financial
statements at the beginning of the year
Consolidated Balance Sheet
Item Balance at the end of
the previous year
Balance at the
beginning of the year
Adjusted amount
Re-classification Re-measurement Total
Current Assets:
Cash and Bank Balances 1785124821.87 1785124821.87
Deposit Reservation for
Balance
Loans to Banks and Other
Financial Institutions
Trading Financial Assets 854108086.54 854108086.54
Derivative Financial Assets
Note’s receivable
Accounts receivable 5337855.43 5337855.43
Receivables Financing
Prepayments 17221603.54 17221603.54
Premium Receivable
Reinsurance Accounts
Receivable
Reinsurance Contract
Reserves Receivable
Other Receivables 125573266.78 125573266.78
Buying Back the Sale of
Financial Assets
Inventory 6110221.56 6110221.56
Contract Assets Not applicable.
Holding for-sale assets
Non-current Assets Due
within 1 Year
Other Current Assets 127570975.96 127570975.96
Subtotal of Current Assets 2921046831.68 2921046831.68
Non-current Assets:
Item Balance at the end of
the previous year
Balance at the
beginning of the year
Adjusted amount
Re-classification Re-measurement Total
Granting of loans and
advances
Investment in Creditor's
Rights
Investment in Other
Creditor's Rights
Long-term Receivables
Long-term Equity Investment 3468596165.08 3468596165.08
Investment in Other Equity
Instruments
300959931.64 300959931.64
Other Non-current Financial
Assets
Investment Property
Fixed Assets 2311251277.89 2311251277.89
Projects under Construction 370000233.10 370000233.10
Productive Biological Assets
Oil and gas assets
Intangible Assets 1498490129.82 1498490129.82
Development Expenditure
Goodwill 28078665.69 28078665.69
Long-term unamortized
expenses
112440627.02 112440627.02
Deferred Income Tax Assets 9148452.39 9148452.39
Other Non-current Assets 21064619.27 21064619.27
Subtotal of Non-current
Assets
8120030101.90 8120030101.90
Total Assets 11041076933.58 11041076933.58 -
Current Liabilities:
Short-term loan
Borrowings from the Central
Bank
Borrowings from Banks and
Other Financial Institutions
Transactional financial
liabilities
Derivative Financial Liabilities
Notes Payable
Accounts Payable 300656879.62 300656879.62
Received Prepayments 351733456.28 39894552.94 -311838903.34 -311838903.34
Item Balance at the end of
the previous year
Balance at the
beginning of the year
Adjusted amount
Re-classification Re-measurement Total
Contract liabilities Not applicable. 294302487.38 294302487.38 294302487.38
Financial Assets Sold for
Repurchase
Deposit Taking and Interbank
Deposit
Receiving from Vicariously
Traded Securities
Receiving from Vicariously
Sold Securities
Payroll payable 26737888.43 26737888.43
Tax Payable 22614171.64 22614171.64
Other Payables 63299348.02 63299348.02
Service Charge and
Commission Payable
Reinsurance Accounts Payable
Holding for-sale liabilities
Non-current Liabilities Due
within 1 Year
Other Current Liabilities 17536415.96 17536415.96 17536415.96
Subtotal of Current Liabilities 765041743.99 765041743.99
Non-current Liabilities:
Insurance Contract Reserves
Long-term loan
Bonds Payable
Including: Preferred Stocks
Perpetual Bonds
Long-term Payables
Long-term payroll payable
Expected Liabilities
Deferred Income 382872318.90 382872318.90
Deferred Income Tax
Liabilities
10771548.18 10771548.18
Other Non-current Liabilities
Subtotal of Non-current
Liabilities
393643867.08 393643867.08
Total Liabilities 1158685611.07 1158685611.07
Shareholders' Equity:
Share Capital 1452607800.00 1452607800.00
Other Equity Instruments
Item Balance at the end of
the previous year
Balance at the
beginning of the year
Adjusted amount
Re-classification Re-measurement Total
Including: Preferred Stocks
Perpetual Bonds
Capital Reserves 2476312069.09 2476312069.09
Less: Treasury Share
Other Comprehensive
Incomes
-8681151.59 -8681151.59
Special Reserves
Surplus Reserves 517673268.35 517673268.35
General Risk Reserves
Undistributed Profits 5176157180.79 5176157180.79
Total Shareholders' Equity
Attributable to the Parent
Company
9614069166.64 9614069166.64
Minority Shareholders' Equity 268322155.87 268322155.87
Total Shareholders' Equity 9882391322.51 9882391322.51
Total Liabilities and
Shareholders' Equity
11041076933.58 11041076933.58
Balance Sheet of the Parent Company
Item Balance at the end of the
previous year
Balance at the beginning
of the year
Adjusted amount
Re-classification Re-measurement Total
Current Assets:
Cash and Bank Balances 645534966.84 645534966.84
Trading Financial Assets 351492520.54 351492520.54
Derivative Financial Assets
Note’s receivable
Accounts receivable 1269835.09 1269835.09
Receivables Financing
Prepayments 2458855.65 2458855.65
Other Receivables 1100294815.74 1100294815.74
Inventory 2465844.42 2465844.42
Contract Assets Not applicable
Holding for-sale assets
Non-current Assets Due
within 1 Year
Other Current Assets 1671867.65 1671867.65
Subtotal of Current Assets 2105188705.93 2105188705.93
Non-current Assets:
Investment in Creditor's
Item Balance at the end of the
previous year
Balance at the beginning
of the year
Adjusted amount
Re-classification Re-measurement Total
Rights
Investment in Other
Creditor's Rights
Long-term Receivables
Long-term Equity
Investment
6941849814.49 6941849814.49
Investment in Other Equity
Instruments
294665442.88 294665442.88
Other Non-current
Financial Assets
Investment Property
Fixed Assets 503463063.75 503463063.75
Projects under
Construction
59331122.60 59331122.60
Productive Biological Assets
Oil and gas assets
Intangible Assets 145128033.35 145128033.35
Development Expenditure
Goodwill
Long-term unamortized
expenses
10183821.75 10183821.75
Deferred Income Tax Assets 7476137.89 7476137.89
Other Non-current Assets 9838928.50 9838928.50
Subtotal of Non-current
Assets
7971936365.21 7971936365.21
Total Assets 10077125071.14 10077125071.14
Current Liabilities:
Short-term loan
Transactional financial
liabilities
Derivative Financial
Liabilities
Notes Payable
Accounts Payable 44171004.81 44171004.81
Received Prepayments 22214761.65 21483132.76 -731628.89 -731628.89
Contract liabilities Not applicable 710319.31 710319.31 710319.31
Payroll payable 12673534.31 12673534.31
Tax Payable 4818330.21 4818330.21
Other Payables 1953433149.11 1953433149.11
Item Balance at the end of the
previous year
Balance at the beginning
of the year
Adjusted amount
Re-classification Re-measurement Total
Holding for-sale liabilities
Non-current Liabilities Due
within 1 Year
Other Current Liabilities 21309.58 21309.58 21309.58
Subtotal of Current
Liabilities
2037310780.09 2037310780.09
Non-current Liabilities:
Long-term loan
Bonds Payable
Including: Preferred Stocks
Perpetual Bonds
Long-term Payables
Long-term payroll payable
Expected Liabilities
Deferred Income 5620598.89 5620598.89
Deferred Income Tax
Liabilities
9983693.86 9983693.86
Other Non-current
Liabilities
Subtotal of Non-current
Liabilities
15604292.75 15604292.75
Total Liabilities 2052915072.84 2052915072.84
Shareholders' Equity:
Share Capital 1452607800.00 1452607800.00
Other Equity Instruments
Including: Preferred Stocks
Perpetual Bonds
Capital Reserves 2478350525.70 2478350525.70
Less: Treasury Share
Other Comprehensive
Incomes
31870051.79 31870051.79
Special Reserves
Surplus Reserves 517673268.35 517673268.35
Undistributed Profits 3543708352.46 3543708352.46
Total Shareholders' Equity 8024209998.30 8024209998.30
Total Liabilities and
Shareholders' Equity
10077125071.14 10077125071.14
VII. Changes in the Scope of Consolidated Financial Statements Compared with the Financial
Report of Previous Year
√ Applicable □ Not applicable
There are 5 newly merged units in this period the reasons are:
New Merged Units This Year Investment Ratio Notes
Zhuhai Songcheng Performance Kingdom Co. Ltd 100% New in 2020
Zhuhai Southern Film and Television Cultural
Industry Co. Ltd.
100% Acquire 100% equity in 2020
Zhuhai Huayin Landscaping Co. Ltd. 55% 55% holding subsidiary affiliated
Zhuhai Southern Film and Television Cultural Industry
Co. Ltd. acquired in 2020
Songcheng Brand Management Co. Ltd. 100% New in 2020
Romance Show Management Co. Ltd. 100% New in 2020
In the current period the number of merged units was reduced by 2 due to:
Reduced Merged Units This Year Investment Ratio Notes
Hangzhou Songcheng Art Troupe Co. Ltd. 100% Canceled in 2020
Zhejiang Songcheng Entertainment Culture Co.Ltd.
100% Canceled in 2020
VIII. Appointment and Dismissal of Accounting Firms
Currently appointed accounting firms
Names of domestic accounting firms BDO China Shu Lun Pan CPAs (special general partnership)
Remuneration to domestic accounting firms (Unit: ten thousand
yuan)
130
Years of continuous audit service of domestic accounting firms 20 years
Names of Certified Public Accountants from domestic
accounting firms
Ni Yilin Jiang Xuelian
The continuous period of audit service for certified public
accountants in domestic accounting firms
2 years 2 years
Whether to employ another accounting firm
□ Yes √ No
Appointment of accounting firms financial advisers or sponsors for internal control auditing
□ Applicable √ Not applicable
IX. Delisting after Disclosure of Annual Report
□ Applicable √ Not applicable
X. Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such case as bankruptcy and reorganization related event during the reporting period.XI. Major Lawsuits and Arbitrations
□ Applicable √ Not applicable
There is no major lawsuit or arbitration in this year.XII. Penalties and Rectification
□ Applicable √ Not applicable
No such case as penalty and rectification during the reporting period.XIII. Integrity of the Company Its Controlling Shareholder and Actual Controller
√ Applicable □ Not applicable
The Company its controlling shareholder and actual controller are in good standing during the reporting period.XIV. Implementation of the Company's Equity Incentive Plan Employee Stock Ownership Plan or
Other Employee Incentive Measures
□ Applicable √ Not applicable
During the reporting period the Company has no equity incentive plan employee stock ownership plan or other employee
incentive measures and their implementation.
XV. Significant Related-party Transactions
1. Related transactions relevant to daily operations
√ Applicable □ Not applicable
Related
transaction
Relation
with
related
party
Type of
related
transaction
Content of
the related -
party
transaction
Principle
for pricing
of related
transaction
Price of
related
transaction
Amount of
related
transaction
(RMB Ten
Thousand)
Proportion
in the
number of
similar
transactions
Approved
transaction
limit (RMB
Ten
Thousand)
Whether
the
approved
limit is
exceeded
Settlement
of related
transaction
Available
market price
for similar
transactions
Date of
Disclosure
Disclosure Index
Hangzhou
First World
Hotel Co.Ltd.
Affiliated
legal
person
Recurring
related
transactions
On-line
procurement
of hotel
products
Refer to
the market
price
282.04 282.04 1.32% 37062.23 No
Cash and
Bank
Balances
282.04
Thursday
March 28
2019
http://www.cninfo.com.cn
Hangzhou
Songcheng
Industry Co.Ltd
Affiliated
legal
person
Recurring
related
transactions
On-line
procurement
of hotel
products
Refer to
the market
price
634.3 634.3 2.96% 37062.23 No
Cash and
Bank
Balances
634.3
Thursday
March 28
2019
http://www.cninfo.com.cn
Beijing Beite
Shengdi
Technology
Development
Co. Ltd.
Affiliate
Contingent
related
transactions
Delegation of
the scenic
spot-related
projects
Refer to
the market
price
2915.6 2915.60 3.02% 2915.60 No
Cash and
Bank
Balances
2915.6
Hangzhou
First World
Hotel Co.Ltd.
Affiliated
legal
person
Recurring
related
transactions
Ticket sales
Refer to
the market
price
143.58 143.58 0.67% 37062.23 No
Cash and
Bank
Balances
143.58
Thursday
March 28
2019
http://www.cninfo.com.cn
Related
transaction
Relation
with
related
party
Type of
related
transaction
Content of
the related -
party
transaction
Principle
for pricing
of related
transaction
Price of
related
transaction
Amount of
related
transaction
(RMB Ten
Thousand)
Proportion
in the
number of
similar
transactions
Approved
transaction
limit (RMB
Ten
Thousand)
Whether
the
approved
limit is
exceeded
Settlement
of related
transaction
Available
market price
for similar
transactions
Date of
Disclosure
Disclosure Index
Hangzhou
Songcheng
Industry Co.Ltd
Affiliated
legal
person
Recurring
related
transactions
Ticket sales
Refer to
the market
price
242.57 242.57 1.13% 37062.23 No
Cash and
Bank
Balances
242.57
Thursday
March 28
2019
http://www.cninfo.com.cn
Hangzhou
Songcheng
Industry Co.Ltd
Affiliated
legal
person
Recurring
related
transactions
Leasing of
the office
space
Refer to
the market
price
251.62 251.62 9.75% 402.59
No (The
rent of 4.5
months is
reduced
for related
parties
due to the
epidemic)
Cash and
Bank
Balances
251.62
Thursday
March 28
2019
http://www.cninfo.com.cn
Hangzhou
Songcheng
Industry Co.Ltd
Affiliated
legal
person
Recurring
related
transactions
Leasing of
the parking
lot
Refer to
the market
price
622.51 622.51 24.11% 996.01
No (The
rent of 4.5
months is
reduced
for related
parties
due to the
epidemic)
Cash and
Bank
Balances
622.51
Saturday
December
17 2016
http://www.cninfo.com.cn
Hangzhou
Songcheng
Industry Co.Ltd
Affiliated
legal
person
Recurring
related
transactions
Leasing of
the
operating
room in the
Refer to
the market
price
149.49 149.49 5.79% 239.18
No (The
rent of 4.5
months is
reduced
Cash and
Bank
Balances
149.49
Thursday
March 28
2019
http://www.cninfo.com.cn
Related
transaction
Relation
with
related
party
Type of
related
transaction
Content of
the related -
party
transaction
Principle
for pricing
of related
transaction
Price of
related
transaction
Amount of
related
transaction
(RMB Ten
Thousand)
Proportion
in the
number of
similar
transactions
Approved
transaction
limit (RMB
Ten
Thousand)
Whether
the
approved
limit is
exceeded
Settlement
of related
transaction
Available
market price
for similar
transactions
Date of
Disclosure
Disclosure Index
scenic spot for related
parties
due to the
epidemic)
Hangzhou
Songcheng
Industry Co.Ltd
Affiliated
legal
person
Recurring
related
transactions
Leasing of
the
dormitory
Refer to
the market
price
160.06 160.06 6.20% 256.1
No (The
rent of 4.5
months is
reduced
for related
parties
due to the
epidemic)
Cash and
Bank
Balances
160.06
Thursday
March 28
2019
http://www.cninfo.com.cn
Hangzhou
Songcheng
Industry Co.Ltd
Affiliated
legal
person
Recurring
related
transactions
Leasing of
the parking
lot
Refer to
the market
price
296.66 296.66 11.49% 474.66
No (The
rent of 4.5
months is
reduced
for related
parties
due to the
epidemic)
Cash and
Bank
Balances
296.66
Thursday
March 28
2019
http://www.cninfo.com.cn
Hangzhou
Songcheng
Industry Co.Ltd
Affiliated
legal
person
Recurring
related
transactions
Leasing of
the
operating
room in the
Refer to
the market
price
173.93 173.93 6.74% 278.28
No (The
rent of 4.5
months is
reduced
Cash and
Bank
Balances
173.93
Thursday
March 28
2019
http://www.cninfo.com.cn
Related
transaction
Relation
with
related
party
Type of
related
transaction
Content of
the related -
party
transaction
Principle
for pricing
of related
transaction
Price of
related
transaction
Amount of
related
transaction
(RMB Ten
Thousand)
Proportion
in the
number of
similar
transactions
Approved
transaction
limit (RMB
Ten
Thousand)
Whether
the
approved
limit is
exceeded
Settlement
of related
transaction
Available
market price
for similar
transactions
Date of
Disclosure
Disclosure Index
scenic spot for related
parties
due to the
epidemic)
Hangzhou
First World
Hotel Co.Ltd.
Affiliated
legal
person
Recurring
related
transactions
Leasing of
the
operating
room in the
scenic spot
Refer to
the market
price
47.25 47.25 1.83% 75.6
No (The
rent of 4.5
months is
reduced
for related
parties
due to the
epidemic)
Cash and
Bank
Balances
47.25
Monday
February
29 2016
http://www.cninfo.com.cn
Hangzhou
World Leisure
Expo Park
Co. Ltd
Affiliated
legal
person
Recurring
related
transactions
Leasing of
the parking
lot
Refer to
the market
price
431.82 431.82 16.73% 690.91
No (The
rent of 4.5
months is
reduced
for related
parties
due to the
epidemic)
Cash and
Bank
Balances
431.82
Thursday
March 28
2019
http://www.cninfo.com.cn
Hangzhou
World Leisure
Expo Park
Co. Ltd
Affiliated
legal
person
Recurring
related
transactions
Leasing of
the
dormitory
Refer to
the market
price
67.73 67.73 2.62% 108.36
No (The
rent of 4.5
months is
reduced
Cash and
Bank
Balances
67.73
Thursday
March 28
2019
http://www.cninfo.com.cn
Related
transaction
Relation
with
related
party
Type of
related
transaction
Content of
the related -
party
transaction
Principle
for pricing
of related
transaction
Price of
related
transaction
Amount of
related
transaction
(RMB Ten
Thousand)
Proportion
in the
number of
similar
transactions
Approved
transaction
limit (RMB
Ten
Thousand)
Whether
the
approved
limit is
exceeded
Settlement
of related
transaction
Available
market price
for similar
transactions
Date of
Disclosure
Disclosure Index
for related
parties
due to the
epidemic)
Total -- -- 6419.16 -- 154686.21 -- -- -- -- --
Details of major sales returned N/A
Actual performance during the reporting period
where the total amount of daily related party
transactions in the current period is estimated by
category (if any)
N/A
Reasons for the big difference between the
transaction price and the reference market price if
applicable
Not applicable.
2. Related transactions in acquisition or sale of assets or equities
□ Applicable √ Not applicable
No such case as related-party transactions arising from the acquisition or sale of assets or equity.
3. Significant related-party transactions arising from joint investments on external parties
√ Applicable □ Not applicable
Co-investor
Relation with
related party
Name of the
invested enterprise
Main business of the
invested enterprise
Registered
capital of
the invested
enterprise
Total assets
of the
invested
enterprise
(RMB Ten
Thousand)
Net asset of
the invested
enterprise
(RMB Ten
Thousand)
Net profit of
the invested
enterprise
(RMB Ten
Thousand)
Ningbo
Songcheng Qixian
Investment
Management Co.Ltd.
Affiliate
Ningno Songcheng
Performance Live
Entertainment
Investment
Partnership
(limited
partnership)
Equity investment
project investment
investment
management
enterprise
management and
investment
consultation
RMB 300
million
17550.96 17550.96 -102.44
Hangzhou
Songcheng Group
Holdings Co. Ltd
Ningbo Qixian
Internet
Investment
Management Co.Ltd.
Controlling
shareholder
affiliate
Ningno Songcheng
Internet
Entertainment
Investment
Partnership
(limited
partnership)
Project investment
investment
management
enterprise
management
consultation
investment
consultation and
equity investment
RMB 125
million
7180.58 7100.58 -1914.45
Shenzhen CGS
Fund
Management Co.Ltd. Qixian Equity
Investment
Management Co.Ltd.
Affiliated
legal person
affiliate
Ningno Meishan
Bonded Port Area
Qixian Innovation
Entertainment
Investment
Partnership
(limited
partnership)
Entertainment project
investment industrial
investment project
investment
investment
management
enterprise
management
consultation and
investment
management
RMB 155
million
7334.14 7331.64 -212.43
Progress of major projects
under construction of the
invested enterprise if any
N/A
Other notes: in September 2019 Songcheng Holdings (Thailand) Co. Ltd. a wholly -owned subsidiary of the Company and
Qiyun Holdings (Thailand) Co. Ltd. a related person jointly established Songcheng (Pattaya) International Culture Co. Ltd. with the
registered capital of THB 5 million for which the parties paid THB 3.25 million and THB 750 thousand respectively accountin g for
65.00% and 15.00%. As at December 31 2020 neither the Company nor the related persons have completed the contribution.
4. Related-party creditor's rights and debts
□ Applicable √ Not applicable
No such case as related credits and debts during the reporting period.
5. Other major related transactions
□ Applicable √ Not applicable
XVI. Major Contracts and Their Performance
1. Matters on trusteeship contracting and leasehold
(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
2. Significant guarantees
□ Applicable √ Not applicable
There is no guarantee during the reporting period.
3. Entrusting Others to Manage Cash Assets
(1) Entrusted Financing
□ Applicable √ Not applicable
No such case as entrusted financing during the reporting period.
(2) Entrusted Loans
□ Applicable √ Not applicable
No such case as entrusted loan during the reporting period.
4. Other Significant Contracts
□ Applicable √ Not applicable
No such case as other significant contract during the reporting period.XVII. Social Responsibilities
1. Fulfillment of Social Responsibilities
Since establishment he Company has been exploring in the cultural and tourist industry with the spirit of craftsmanship and
been devoted to cultivating the traditional culture and art of China with the idea of industry innovation which formed a uni que
business model and made contributions to the dissemination of Chinese culture. In the past years the Company stayed true to its
mission and insisted on fulfilling its corporate social responsibilities with the support from its operating performances su ch as
continued expansion of businesses year-on-year increase of visitors and stable profit growth. The company always adheres to the
practice of corporate social responsibility and promotes the prosperity and development of the Chinese culture and art in an
all-round three-dimensional and multi-angle manner through featured theme activities public charity and other methods so as to
make its contribution to promotion of the Chinese traditional culture.The Company brought magnificent art feasts for thousands of masses in the mountainous areas through "Songcheng Travel of
Poverty Alleviation in Cultural Caravans" donated RMB 10 million to the areas ravaged by catastrophic floods in Ningxiang Ci ty
Hunan Province helped Guilin Zhangjiajie and Xi'an in poverty alleviation in the field of culture and art through its local projects
established "Culture and Art Poverty Alleviation Fund" by donation and supported the development of the local culture. What
traditional culture gives Songcheng is not only the inexhaustible source of creation but also the special cultural feeling.In September 2018 the Company initiated and established Zhejiang Songcheng Performance Art Development Foundation to
"support the development of the national art and performance and the poverty alleviation in art". It was a new attempt of the
Company in the field of public charity to better achieve the goal of "contributing to the society". The Foundation will promo te the
prosperous development of the Chinese culture and art in an all -round three-dimensional and multi-angle manner through poverty
alleviation in art industry-university-research cooperation funding of excellent projects and talents driving of public culture
activities and external exchange in art making new efforts to carry forward the traditional culture of China.
2. Social responsibility fulfillment regarding targeted poverty alleviation
(1) Plan for Targeted Poverty Alleviation
The Company earnestly responds to the call of the national provincial and municipal authorities for poverty alleviation by
fully displaying its own advantages and the advantages in industry and by actively carrying out targeted poverty alleviation work.
(2) Overview of Annual Targeted Poverty Alleviation
During the reporting period the Company actively responded to the call of the Central Government “to win the battle againstpoverty” by carrying out the poverty alleviation work in the field of culture and art. During the reporting period the Compa ny and
its subsidiaries also participated in public welfare activities such as donation to schools and donation for poverty alleviation.
(3) Result of Targeted Poverty Alleviation
Indicator Measurement Unit Quantity/Implementation
I. Overview —— ——
II. Itemized investment —— ——
1. Poverty alleviation by industry
development
—— ——
2. Poverty alleviation by transfer and
employment
—— ——
3. Poverty alleviation by relocation —— ——
4. Educational poverty alleviation —— ——
5. Health poverty alleviation —— ——
6. Ecological poverty alleviation —— ——
7. Minimum guarantee —— ——
8. Social poverty alleviation —— ——
9. Others —— ——
III. Awards (content and level) —— ——
(4) Plan for Subsequent Targeted Poverty Alleviation
In 2021 the Company will actively respond to the call of the national provincial and municipal authorities about poverty
alleviation by cooperating with the government departments at all levels to win the battle against poverty alleviation and fu lfilling
the social responsibilities and obligations.
3.Environmental Protection-related Matters
Whether the listed company and its subsidiaries belong to the key pollutant discharging units announced by the environmental
protection department
□ Yes √ No
The listed company and its subsidiaries are not the key pollutant discharging units announced by the environmental protection
department.XVIII. Explanations to Other Significant Matters
□ Applicable √ Not applicable
There were no other significant matters for explanation during the reporting period.XIX. Major Events of the Company's Subsidiaries
□ Applicable √ Not applicable
Section VI Changes in Shares and Information about Shareholders
I. Changes in Shares
1. Changes in shares
Unit: share
Before the change Increase or decrease in the change (+ -) After the change
Number Percentage
Shares
newly
issued
Bonus
shares
Shares
converted from
capital reserves
Others Subtotal Number Percentage
I. Shares with
limited sales
condition
263918107 18.17% 0 0 180437715 -38370962 142066753 405984860 15.53%
1.
State-owned
shares
0 0.00% 0 0 0 0 0 0 0.00%
2. Shares
held by
state-owned
legal persons
0 0.00% 0 0 0 0 0 0 0.00%
3. Other
domestic
shares
263918107 18.17% 0 0 180437715 -38370962 142066753 405984860 15.53%
Including:
Shares held by
domestic legal
persons
0 0.00% 0 0 0 0 0 0 0.00%
Shares held by
domestic
natural persons
263918107 18.17% 0 0 180437715 -38370962 142066753 405984860 15.53%
4. Foreign
shares
0 0.00% 0 0 0 0 0 0 0.00%
Including:
Shares held by
overseas legal
persons
0 0.00% 0 0 0 0 0 0 0.00%
0 0.00% 0 0 0 0 0 0 0.00%
Shares held by
foreign natural
persons
II. Shares
without
restrictions
1188689693 81.83% 0 0 981648525 38370962 1020019487 2208709180 84.47%
1. RMB
ordinary shares
1188689693 81.83% 0 0 981648525 38370962 1020019487 2208709180 84.47%
2. Foreign
shares list in
China
0 0.00% 0 0 0 0 0 0 0.00%
3. Foreign
shares listed in
overseas
0 0.00% 0 0 0 0 0 0 0.00%
4. Other 0 0.00% 0 0 0 0 0 0 0.00%
III. Total 1452607800 100.00% 0 0 1162086240 0 1162086240 2614694040 100.00%
Reasons for changes in shares
√ Applicable □ Not applicable
(1) During the reporting period 38830789 shares locked by executives were unlocked and 459827 shares locked by
executives were added.
(2) During the reporting period the Company implemented 2019 equity distribution plan: Taking the total share capital of
1452607800 shares of 2019 as the basis RMB 2.00 (tax included) of dividend for every 10 shares was distrib uted to all the
shareholders with a total cash dividend of RMB 290521560 and 8 shares capitalized from the capital reserves were distributed to
all the shareholders for every 10 shares with a total number of 1162086240 shares. Upon such capitalizati on the total share
capital after conversion amounted to 2614694040 shares.
Approval for changes in shares
√ Applicable □ Not applicable
(1) On April 27 2020 the 6th meeting of the 7th Board of Directors and the 5th meeting of the 7th Board of Superv isors were
held by the Company which reviewed and approved the 2019 Proposal on Profit Distribution and Capital Reserve Capitalization. The
proposal on profit distribution and capital reserve capitalization of the Company in 2019 was: Taking the total share capital of
1452607800 shares of 2019 as the basis RMB 2.00 (tax included) of dividend for every 10 shares was distributed to all the
shareholders with a total cash dividend of RMB 290521560 and 8 shares capitalized from the capital reserves were distributed to
all the shareholders for every 10 shares with a total number of 1162086240 shares. Upon such capitalization the total sh are
capital amounted to 2614694040 shares.
(2) On May 18 2020 the annual shareholders' meeting was held by the Company in 2019 which reviewed and approved the
2019 Proposal on Profit Distribution and Capital Reserve Capitalization.
Transfer for changes in shares
√ Applicable □ Not applicable
During the reporting period the appropriate procedures for the capitali zed share capital have been completed at Shenzhen
Branch China Securities Depository and Clearing Corporation Limited.
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 comm on
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
2. Changes in restricted stocks
√ Applicable □ Not applicable
Unit: share
Name of
Shareholder
Number Of
Shares With
Limited Sales
Condition At
The Beginning
Of The Period
Number of
increased shares
with limited
sales condition
in current
period
Number of
unlocked
shares with
limited sales
condition in
current period
Number of
shares with
limited sales
condition at the
end of the
period
Reasons for
limited sales
Proposed date of lifting sales
restriction
Huang
Qiaoling
163913427 131130742 295044169
Shares locked
by executives
In respect of the shares locked
by executives 75% of the total
shares will be locked at the
beginning of each year
Huang
Qiaolong
41181934 32945547 74127481
Shares locked
by executives
Ibid
Liu Ping 17879482 15131274 33010756
Shares locked
by executives
Ibid
Liu Yan 38741884 38741884 0
Resignation of
the director
It shall be executed as per the
regulations on management of
executive shares
Zhang Xian 902767 722214 1624981
Shares locked
by executives
Ibid
Zhang
Jiankun
686103 548882 1234985
Shares locked
by executives
Ibid
Shang
Lingxia
343051 274440 617491
Shares locked
by executives
Ibid
Chen
Shengmin
180554 144443 324997
Shares locked
by executives
Ibid
Dong Xin 88905 88905
Resignation of
the secretary
It shall be executed as per the
regulations on management of
to the Board
of Directors
executive shares
Total 263918107 180897542 38830789 405984860 -- --
II. Issuance and listing of securities
1. Securities (excluding preferred share) issued in reporting period
□ Applicable √ Not applicable
2. Explanation on changes in total number of the Company's shares & the structure of shareholders and the
structure of assets and liabilities
□ Applicable √ Not applicable
3. Existing shares held by internal staff of the Company
□ Applicable √ Not applicable
III. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholdings
Unit: share
Total Number
Of Common
Shareholders
At The End Of
The Reporting
Period
39572
Total number
of common
shareholders
at the end of
previous
month before
the disclosure
date of the
annual report
53817
Total number
of preferred
shareholders
(if any) (refer
to Note 9)
whose voting
rights have
been
recovered at
the end of the
reporting
period
0
Total number of
preferred shareholders
(if any) (refer to Note 9)
with resumed voting
rights at the end of
previous month before
the disclosure date of
the annual report
0
Shareholding list of shareholders with over 5% shares or top ten shareholders
Name of
Shareholder
Nature Of
Shareholder
Shareholding
Percentage
Number of
shares held
at the end of
the
reporting
period
Changes in the
reporting
period
Number of
shares held
with limited
sales
conditions
Number of
shares held
without
limited sales
condition
Pledges or freezings
State Of
Shares
Number
Hangzhou
Songcheng
Group
Holdings Co.Ltd
Domestic
Non-state-owned
Legal Person
29.48% 770835254 342593446 0 770835254 Pledge 122400000
Huang
Qiaoling
Domestic Natural
Person
11.83% 309192225 90640989 295044169 14148056
Hong Kong
Securities
Clearing
Company Ltd.
Overseas Legal
Person
3.74% 97849470 66514862 0 97849470
Huang
Qiaolong
Domestic Natural
Person
3.28% 85836643 30927397 74127481 11709162
Industrial Bank
Co. Ltd. -
Xingquan
Trend
Investment
Hybrid Type
Securities
Investment
Fund
Others 2.21% 57764086 32388617 0 57764086
Liu Yan
Domestic Natural
Person
1.70% 44553289 2897395 0 44553289
One One Two
Combination
of National
Social Security
Fund
Others 1.53% 39889483 39889483 0 39889483
Liu Ping
Domestic Natural
Person
1.37% 35910758 12071448 33010756 2900002
One Zero Eight
Combination
of National
Social Security
Fund
Others 1.22% 32000000 32000000 0 32000000
Puxin
Investment
Company -
Customer
Fund
Overseas Legal
Person
1.16% 30416249 30416249 0 30416249
Description of the association
relationship or concerted action
of above-mentioned shareholders
Hangzhou Songcheng Group Holdings Co. Ltd and Huang Qiaoling are the controlling
shareholder and actual controller of the Company respectively; Huang Qiaolong and Liu Ping are
the related natural persons of the actual controller Mr. Huang Qiaoling.Shareholding list of top ten shareholders without limited sales condition
Name of Shareholder
Number of shares held without limited sales condition at the end of the
reporting period
Type of shares
Type of
shares
Number
Hangzhou Songcheng Group
Holdings Co. Ltd
770835254
RMB
common
stock
770835254
Hong Kong Securities Clearing
Company Ltd.
97849470
RMB
common
stock
97849470
Industrial Bank Co. Ltd. -
Xingquan Trend Investment
Hybrid Type Securities Investment
Fund
57764086
RMB
common
stock
57764086
Liu Yan 44553289
RMB
common
stock
44553289
One One Two Combination of
National Social Security Fund
39889483
RMB
common
stock
39889483
One Zero Eight Combination of
National Social Security Fund
32000000
RMB
common
stock
32000000
Puxin Investment Company -
Customer Fund
30416249
RMB
common
stock
30416249
Industrial Bank Co. Ltd. -
Xingquan New Vision Hybrid Type
Initiated Securities Investment
Fund with Flexible Setting and
Regular Availability
26279865
RMB
common
stock
26279865
Industrial and Commercial Bank
of China - Huitianfu Growth Focus
Hybrid Type Securities Investment
Fund
25500081
RMB
common
stock
25500081
Industrial and Commercial Bank
of China Company Limited -
23500000
RMB
common
23500000
Huitianfu Blue-chip Hybrid Type
Securities Investment Fund with
Stable Flexible Setting
stock
Explanation on associated
relationship or persons acting in
concert among top ten
shareholders without limited
shares and between top ten
shareholders without limited
shares and top ten shareholders
Hangzhou Songcheng Group Holdings Co. Ltd and Huang Qiaoling are the controlling
shareholder and the actual controller of the Company respectively; Huang Qiaolong and Liu Ping
are the related natural persons of the actual controller Mr. Huang Qiaoling.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.
2. Particulars about the controlling shareholder
Nature of the controlling shareholder: Natural person-owned
Type of the controlling shareholder: legal person
Name of the controlling
shareholder
Legal
representative/unit
head
Date of
establishment
Organization Code Main businesses
Hangzhou Songcheng Group
Holdings Co. Ltd
Wang Pengyu November 21 1997 91330109255712632Y Industrial investment
Equity interest of other listed
companies at home and
abroad controlled and
jointly controlled by
controlling shareholders
during the reporting period
N/A
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
3. The actual controller of the Company and persons acting in concert
Nature of the actual controller: Domestic natural person
Type of the actual controller: Natural person
Name of the actual
controller
Relationship with the actual
controller
Nationality
Whether he/she has obtained the right
of residence in another country or
region
Huang Qiaoling Himself China No
Main occupation and title
Mr. Huang Qiaoling served as the chairman and president of Songcheng Tourism Development Co.Ltd from February 1999 to December 2000. He served as the chairman of Hangzhou Songcheng
Group Holdings Co. Ltd from November 1997 to March 2013. He served as the chairman of
Hangzhou World Leisure Expo Park Co. Ltd from August 2001 to March 2013. He has been serving as
the chairman of this Company since December 2000.Information about other
listed companies at home
and abroad controlled in
the last ten years
N/A
Change of the actual controller in the reporting period
□ Applicable √ Not applicable
No change has happened to the actual controller in the reporting period
Block Digram for Property Right and Control Relationship between the Company and Actual Controllers
The actual controller controls the Company via trust or other ways of asset management
□ Applicable √ Not applicable
4. Particulars about other corporate shareholders with shareholding proportion over 10%
□ Applicable √ Not applicable
5. Particulars on share reduction restricted for controlling shareholders actual controller restructuring party
or other commitment entities
□ Applicable √ Not applicable
Section VII Information of Preferred Shares
□ Applicable √ Not applicable
There are no preferred shares in the reporting period.
Section VIII Convertible Corporate Bonds
□ Applicable √ Not applicable
There are no convertible corporate bonds in the reporting period.
Section IX Directors Supervisors Senior Managers and Employees
I. Shareholding Changes of Directors Supervisors and Senior Management
Name Post
Position
status
Gender Age
Starting
date of
tenure
Termination
Date of
tenure
Number of
shares held at
the beginning
of the period
(share)
Number of
shares
increased
in the
period
(share)
Number of
shares
decreased in
the period
(share)
Other
changes
(share)
Number of
shares held at
the end of the
period
Huang
Qiaoling
Chairman Incumbent Male 63
June 6
2010
August 8
2022
218551236 84200000 174840989 309192225
Huang
Qiaolong
Director Incumbent Male 61
June 6
2010
August 8
2022
54909246 13000000 43927397 85836643
Zhang
Xian
Director
President
Incumbent Female 47
June 6
2010
August 8
2022
1203690 962952 2166642
Zhang
Jiankun
Director
Executive
President
Incumbent Male 57
March
20 2013
August 8
2022
914804 731843 1646647
Huang
Hongming
Director Incumbent Male 49
April 26
2019
August 8
2022
Shang
Lingxia
Director
Executive Vice
President
Incumbent Female 46
August
12 2013
August 8
2022
457402 365921 823323
Lanke
Independent
Director
Incumbent Male 71
August
21 2015
August 8
2022
Liu Shuzhe
Independent
Director
Incumbent Male 64
August
8 2019
August 8
2022
Yu Qinyi
Independent
Director
Incumbent Female 41
March
24 2017
August 8
2022
Zhu Hualu Supervisor Incumbent Female 66
June 6
2010
August 8
2022
Yu Feng
Staff
Supervisor
Incumbent Female 45
August
12 2013
August 8
2022
Xu Jie Supervisor Incumbent Female 53
August
9 2016
August 8
2022
200 160 360
Zheng Qi Vice President Incumbent Male 44
October
26 2018
August 8
2022
Chen
Shengmin
Secretary to
the Board of
Directors and
Chief Financial
Officer
Incumbent Male 50
May 21
2010
August 8
2022
240739 192591 433330
Total -- -- -- -- -- -- 276277317 0 97200000 221021853 400099170
II. Changes of Directors Supervisors and Senior Management
□ Applicable √ Not applicable
III. Positions
Professional backgrounds major work experiences and current main responsibilities in the Company for incumbent directors
supervisors and senior management of the Company
1. Mr. Huang Qiaoling: 63 years old senior economist Chinese nationality without permanent residency abroad. Mr. Huang
Qiaoling served as Chairman and President of Songcheng Tourism Development Co. Ltd. from February 1999 to December 2000;
From November 1997 to March 2013 he served as Chairman of Songcheng Holdings; From August 2001 to March 2013 he se rved
as Chairman of Hangzhou World Leisure Expo Park Co. Ltd. He has been serving as the chairman of this Company since December
2000.
2. Mr. Huang Qiaolong: 61 years old college degree economist Chinese nationality without permanent residency abroad. Mr.
Huang Qiaolong served as Vice President and Chairman of Songcheng Holdings from March 2003 to November 2009. He has served
as a director of the Company since December 2000.
3. Ms. Zhang Xian: 47 years old master degree a famous person in national publicity and cultural system with the prestigious
title of "Four Excellency" talent. Chinese nationality without permanent residency abroad. Ms. Zhang Xian taught initially English
and advanced to become Deputy Director of Nanhu Revolutionary Memorial Hall. In December 2000 she joined Songcheng Group
as Deputy General Manager of Songcheng Holdings; From February 2002 to July 2003 she served as the General Manager of
Songcheng Tourism Management Branch; From August 2003 to February 2007 she served as Vice President of Songcheng Holdings;
From March 2007 to February 2009 she served as Vice President of the Company; From March 2009 to December 2010 she served
as Executive President of the Company; She has served as a director of the Company since June 201 0 and as President of the
Company since December 2010.
4. Mr. Zhang Jiankun: 57 years old college degree Chinese nationality without permanent residency abroad. From October
1994 to April 1999 Mr. Zhang Jiankun served as the director of Songcheng Real Estate Engineering Department; From May 1999 to
February 2002 he served as the Engineering Department Manager of Hangzhou Huamei Science and Technology Education
Investment Co. Ltd.; From March 2002 to February 2004 he served as Deputy General Manager of Songcheng Holding Engineering
Construction Department; From March 2004 to February 2005 he served as Deputy General Manager of Landscape Real Estate;
From March 2005 to February 2006 he served as General Manager of Songcheng Holdings Engineering Department; From March
2006 to February 2009 he served as Vice President of Landscape Real Estate; From March 2009 to February 2012 he served as V ice
President of the Company; From March 2012 to December 2013 he served as Executive Vice President of the Company; He has
been the Executive President of the Company since January 2013 and the director of the Company since February 2013.
5. Mr. Huang Hongming: 49 years old bachelor degree senior economist Chinese nationality without permanent residency
abroad. Mr. Huang Hongming has been the Deputy General Manager of Songcheng Real Estate Company; Vice Chairman and
President of Hong Kong Jinhui International Investment Group; Since September 2013 he has served as Executive President of
Songcheng Holdings Company and has served as a director of the Company since April 2019.
6. Ms. Shang Lingxia: 46 years old bachelor degree Chinese nationality without permanent residency abroad. Ms. Shang
Lingxia served as the secretary of Chairman of Songcheng Holdings from March 2001 to July 2003; From August 2003 to September
2005 she served as General Manager of Songcheng Tourism Management Subsidiary; From October 2005 to April 2008 she served
as General Manager of Hangzhou World Leisure Expo Park Co. Ltd.; From May 2008 to November 2010 she served as General
Manager of First World Hotel; From December 2010 to December 2017 she served as Vice President of the Company; She has
served as a director of the Company since August 2013 and as Executive Vice President of the Company since January 2018.
7. Mr. Lanke: 71 years old bachelor degree professor Chinese nationality without permanent residency abroad. Mr. Lanke has
been engaged in the research and teaching of Chinese folk culture for fourteen years. In 1989 he went to Shenzhen Overseas
Chinese Town to participate in the planning and construction management of the Splendid China Folk Culture Village and serve d as
General Manager of Happy Valley and the Group's Tourism Development Department; from 2000 to 2003 he w as President of
Songcheng Group; later he was Vice Chairman and senior advisor of Haichang Group and has been an independent director of th e
Company since August 2015.
8. Mr. Liu Shuzhe: 64 years old master degree senior economist Chinese nationality without permanent residency abroad. Mr.
Liu Shuzhe has served as loan officer of Jiande Sub-branch of People's Bank of China Deputy Head of Xiaoshan Sub-branch of
Industrial and Commercial Bank of China Chief Deputy Director and Vice President of Hangzhou Branch of Industrial and
Commercial Bank of China and has been an independent director of the Company since August 2019.
9. Ms. Yu Qinyi: 41 years old master degree Chinese nationality without permanent residency abroad. From July 2005 to
December 2009 she served as strategic investment consultant of Zhongxin Zhongliang Lianxing Co.Ltd.; Since January 2010 she
has been a certified public accountant of Zhejiang Herui Certified Public Accountants Co. Ltd. and has been an independent
director of the Company since March 2017.
10. Ms. Zhu Hualu: 66 years old college degree Chinese nationality without permanent residency abroad. From January 1995
to January 2005 Ms. Zhu Hualu served as Art Department Manager General Manager Assistant and Executive Deputy General
Manager of Hangzhou World City Songcheng Real Estate Co. Ltd. and Vice President of Hangzhou Songcheng Group Holdings Co.Ltd.; She has served as Chairman of the Board of Supervisors of the Company since December 2000.
11. Ms. Yu Feng: 45 years old bachelor degree Chinese nationality without permanent residency abroad. Ms. Yu Feng served
as Deputy Manager of Xiaoshan International Hotel from October 1995 to June 2003; From August 2003 to July 2004 she served as
Deputy Manager of Human Resources Department of Hangzhou Paradise; From August 2004 to November 2006 she served as HR
Manager of Hangzhou Landscape Real Estate Co. Ltd. and HR Manager of Hangzhou World Leisure Expo Park Co. Ltd.; From
December 2006 to April 2011 she served as Director of Human Resources Department and Deputy General Manager of general
manager office of Hangzhou First World Hotel Co. Ltd.; From April 2011 to December 2012 she served as Deputy Director of
Human Resources Department of Hangzhou Songcheng Group Holdings Co. Ltd.; From January 2013 to December 2015 she served
as Director of Hangzhou First World Hotel Co. Ltd. and Deputy General Manager of the administrative office; From January 201 6 to
December 2017 she served as General Manager of Hangzhou Songcheng Tourism Development Co. Ltd.; She has served as
President Assistant of the Company since January 2018 and has served as supervisor of the Company since August 2013.
12. Ms. Xu Jie 53 years old assistant ideological and political worker Chinese nationality without permanent residency abroad.
From June 1999 to February 2002 Ms. Xu Jie served as Deputy Manager of Real Estate Marketing Department of Hangzhou Xianghu
Green Valley Tourism Development Co. Ltd. From March 2002 to June 2002 she served as Deputy Manager of Early Stage
Department of Hangzhou Nandu Songcheng Real Estate Co. Ltd.; From July 2002 to May 2006 she served as Property Manager of
Hangzhou World Leisure Expo Park Co. Ltd.; From June 2006 to December 2008 she served as Property Manager of Hangzhou
Songcheng Landscape Real Estate Co. Ltd.; From February 2009 to December 2010 she served as General Manager Assistant of
Hangzhou Songcheng Group Property Services Co. Ltd.; Since January 2010 she has served as Deputy General Manager of
Hangzhou World Leisure Expo Park Co. Ltd. and since August 2016 she has served as supervisor of the Company.
13. Mr. Zheng Qi: 44 years old college degree Chinese nationality has served as Sales Manager of the mobile phone business
unit of the Market Development Department of China Putian Hangzhou Subsidiary; Manager of Jiangsu and Hubei Regions of
Mobile Communications Division of East China Representative Office of Ericsson China Investment Co. Ltd.; General Manager of
Energy Division of Aerospace Communications Holding Group Co. Ltd.; Deputy general manager of Zhejiang Aerospace Electronic
Information Industry Co. Ltd. Since December 2013 he has served as Executive Director and General Manager of Lijiang Chama
Ancient City Tourism Development Co. Ltd Chairman and General Manager of Aba Zhou Jiuzhai Romance Tourism Development Co.
Ltd Director and General Manager of Guilin Lijiang Romance Performance Development Co. Ltd Director and General Manager of
Jiuzhaigou Tibetan Mystery Culture Co. Ltd and President Assistant of Songcheng Performance Development Co. Ltd and has
served as Vice President of the Company since October 2018.
14. Mr. Chen Shengmin: 50 years old college degree accountant Chinese nationality without permanen t residency abroad.
From March 2002 to March 2004 Mr. Chen Shengmin served as the lead accountant of Finance Department of the Leyuan Tourism;
From April 2004 to February 2005 he served as the Finance Manager of the Leyuan Tourism; From March 2005 to Jul y 2007 he
served as Finance Manager of Landscape Real Estate; He has been Chief Financial Officer of the Company since July 2007 and th e
Secretary of the board of directors of the Company since May 2017.Position held in shareholders entities
√ Applicable □ Not applicable
Name
Name of shareholder
entity
Position held in
shareholders entities
Starting date
of tenure
Termination Date
of tenure
Remuneration and allowance
received from a shareholder entity
or not?
Huang
Qiaoling
Hangzhou Songcheng
Group Holdings Co. Ltd
Executive Director No
Huang
Qiaolong
Hangzhou Songcheng
Group Holdings Co. Ltd
Supervisor No
Huang
Hongming
Hangzhou Songcheng
Group Holdings Co. Ltd
Executive President Yes
Position held in other entities
√ Applicable □ Not applicable
Name Name of other entity
Position held in other
entities
Starting date
of tenure
Termination
Date of tenure
Renumeration received
from other entity or not
Yu Qinyi
Zhejiang Herui Certified Public
Accountants Co. Ltd.
Certified Public
Accountant
Yes
Liu
Shuzhe
Bank of Hangzhou CHINT Electrics Co.
Ltd. Hangzhou GREENDA Electronic
Materials Co. Ltd.Independent Director Yes
Xu Jie
Hangzhou World Leisure Expo Park Co.Ltd
Deputy General
Manager and
Supervisor
Yes
Incumbent or outgoing directors supervisors and senior management in the reporting period that have been imposed
administrative penalties by CSRC in the last three years
□ Applicable √ Not applicable
IV. Remuneration of Directors Supervisors and Senior Management
The following describes the decision-making program determination basis and actual payment of remuneration for directors
supervisors and senior management.Procedures for making decisions on the remuneration of directors supervisors and senior management personnel:
remuneration of directors and supervisors is determined by the general meeting of shareholders while remuneration of senior
managers is determined by Board of Directors. Directors supervisors and senior management personnel who perform their duties
in the Company receive remuneration according to specific positions.
Basis for determining the remuneration of directors supervisors and senior management personnel: The remuneration of
directors supervisors and senior management personnel shall be determined and distributed according to the Working Rules of
Remuneration and Appraisal Committee of the Board of Directors of the Company and based on the Company's operating
performance their own performance work ability post responsibilities and other assessments.
Actual payment of the remuneration of directors supervisors and senior management personnel: RMB 3808500
Remuneration of directors supervisors and senior management in the reporting period of the Company
Unit: ten thousand RMB
Name Post Gender Age
Position
status
Total remuneration from the
Company before tax
Whether to receive remuneration
from related parties or not
Huang
Qiaoling
Chairman Male 63 Incumbent 62.85 No
Huang
Qiaolong
Director Male 61 Incumbent Yes
Zhang Xian Director President Female 48 Incumbent 62.85 No
Zhang
Jiankun
Director Executive
President
Male 57 Incumbent 56.81 No
Huang
Hongming
Director Male 49 Incumbent Yes
Shang Lingxia
Director Executive Vice
President
Female 46 Incumbent 53.25 No
Lanke Independent Director Male 71 Incumbent 5 No
Liu Shuzhe Independent Director Male 64 Incumbent 5 No
Yu Qinyi Independent Director Female 41 Incumbent 5 No
Zhu Hualu
Chairman of the Board
of Supervisors
Female 66 Incumbent 5 No
Yu Feng Staff Supervisor Female 45 Incumbent 33.23 No
Xu Jie Supervisor Female 53 Incumbent Yes
Zheng Qi Vice President Male 44 Incumbent 48.96 No
Chen
Shengmin
CFO and Secretary of
the Board
Male 50 Incumbent 42.9 No
Total -- -- -- -- 380.85 --
Share incentives for the Company's directors supervisors and senior executives in the reporting period
□ Applicable √ Not applicable
V. Employees in the Company
1. Number profession composition and educational background of the employees
Number of incumbent employees in the parent company
(person)
143
Number of incumbent employees in major subsidiaries (person) 1298
Total number of incumbent employees (person) 1441
Number of employees receiving salaries in current period
(person)
1441
Number of retired employees requiring the parent company and
major subsidiaries to bear their costs
0
Profession composition
Type of profession composition Number of employees for profession composition (person)
Production personnel 451
Salesperson 94
Technical personnel 253
Financial personnel 85
Administrative personnel 75
Executive personnel 192
Service personnel 291
Total 1441
Educational background
Type of educational background Number of employees (person)
Junior high school and below 110
High school/technical secondary school 313
Junior college 556
Bachelor 437
Master and above 25
Total 1441
2. Remuneration policies
The Company set up an extensive "H" broadband salary system which not only provides a promotion channel and platform
for management positions but also encourages employees to get salary rises through improvement of their skills and
professionalism. We evaluate and adjust employees’ salaries based on the Company's operating performance employees’ appraisal
results work performance social and economic developments price level and regional differences and advocate a salary
confidentiality system.Salary is composed of post salary various subsidies benefits and bonuses. The salary of management personnel consists of
basic salary post salary performance salary and allowance; the salary of employee-level positions consists of basic salary
performance salary and allowance. Among them the basic salary and performance salary are verified according to the management
level and performance appraisal scheme and the performance salary of employees is closely linked with the Company's operatin g
performance. The post salaries for the management personnel at supervisor level or above are determined according to their
management level.
3. Training plan
(1) The Company is committed to building a comprehensive talent training system and a scientific talent promotion
mechanism to help the Company achieve its strategic goals and continuously improve the all-round ability of its employees. The
Company provides employees with professional development opportunities and continuously provides key employees and middle
and senior managers who conform to Songcheng's corporate culture and possess excellent professional skills and management
talents for new projects which not only provides a platform for talent growth but also facilitates the healthy development of the
Company. The cultivation and promotion of talents are the main components of the annual KPI for each manager of the Company
and also an important part in assessing the responsibility system of annual business objectives of the company. The Company
attaches great importance to the cultivation of talents and gives notices of praise and material rewards to subsidiaries that have
made outstanding contributions to the cultivation of talents.
(2) The Company has established a sound staff training system and internal trainer training system and has formulated
targeted training programs such as "Induction Training" "Job Skills Training" "General Skills Training" "Professional Skills Upgrading
Training" "Professional Skills Upgrading Training" "Management Skills Training" "Internal Trainer Training (TTT)" "Songcheng Star
Training Class " "Artistic Performance and Management" and intensive training classes within each vertical management syste m.
Especially the "Songcheng Star Training Class" focuses on training excellent managers and outstanding backbone personnel for the
Company and a number of management backbone personnel have taken up important management positions. The Company has
established ten vertical management systems held vertical management meetings regularly and carried out various forms of
training every year to improve the business and management skills of their employees within the system. Each vertical departm ent
of the Group regularly visits each subordinate company for work inspection every year. In addition to such inspections the excellent
work experience and cases of each company are also shared within the system. The Company continued to carry out various forms
of talent selection examinations and training programs in 2020 to reserve vari ous types of management-oriented talents for the
Company's strategic objectives.
(3) The Company helps the growth of talents through a combination of internal and external trainings. We have cooperated
with many external professional training institutions to constantly update and strengthen the professional knowledge and practical
skills of our talents in administration human resources finance and taxation marketing planning business and management.Moreover the Company has set up "Songcheng Group Network College" to create a good learning atmosphere for internal
employees to attend online training anytime and anywhere and the Company also encourages each department to use the
excellent courses broadcast live on the Internet for internal trainings. The Company also encourages employees to improve their
academic qualifications and participate in professional title and qualification examinations.
(4) The Company has held a variety of theme activities such as "Skills Competition" "Excellent Staff and Management Travel
Inspection" "Employee Outward Bound" "Staff Four Seasons Theme Activities" and "Internal Trainer Salon Activities" to enrich its
training programs. All skill competition programs especially the annual skill competition serve to improve the business skills and
comprehensive skills of employees. Through business skills competition debate competition host competition poetry competition
work innovation and other projects the Company cultivates talents who can "do speak write and innovate".
(5) The Company registered an official corporate culture publicity account named "Songcheng people" on WeChat so as to
display various corporate culture activities organized by the Company to employees and strengthen the publicity of award -winning
employees such as "the Most Beautiful Songcheng people" "Star Employees" and "Excellent Interns" thus creating an excellent
corporate culture atmosphere and advocating all employees to achieve excellence. Employees can also leave messages on WeChat
and any suggestions and opinions about the Company can be sent to the chairman's mailbox. In addition the Company shall
strengthen the interaction and communication between its management and the employees and implement excellent and feasible
suggestions put forward by employees. The WeChat account also has the function of points exchange employees who have signed
in may redeem the corresponding prizes enabling the employees to focus on and recognize the Company's corporate culture.
4. Labor outsourcing
√ Applicable □ Not applicable
Total hours of labor outsourcing (hours) 1210380
Total remuneration paid for labor outsourcing (RMB) 23844490.08
Section X Corporate Governance
I. Basic Situation on Corporate Governance
During the reporting period the Company further improved its corporate governance structure standardized its operations
and enhanced its corporate governance in strict compliance with the requirements of the Company Law the Securities Law the
Code of Corporate Governance of Listed Companies the Stock Listing Rules of the Shenzhen Stock Exchange the Rules Governing the
Listing of Stocks on the Growth Enterprise Market of the Shenzhen Stock Exchange and the Requirements of CSRC on relevant laws
and regulations. As at the end of the reporting period the actual situation of the Company's governance was basically in
compliance with the normative documents issued by the CSRC on the governance of listed companies.
1. About Shareholders and Shareholders’ Meetings
The Company convenes and holds shareholders' meetings in strict accordance with the provisions and requirements of the
Rules for General Meetings of Listed Companies the Articles of Association and the Rules of Procedure for General Meetings so as
to ensure that all shareholders in particular the minority shareholders are treated fairly and fully exercise their rights.
2. About the Company and the Controlling Shareholders
The Company has independent business and operation ability and is independent of the controlling shareholder in terms of
business personnel assets institutions and finance and the Company's Board of Directors Board of Supervisors and interna l
institutions operate independently. The controlling shareholders of the Company can strictly regulate their own conduct and have
not interfered directly or indirectly with the decision-making and operation activities of the Company beyond the shareholders’
meetings or the Board of Directors of the Company.
3. About the Directors and the Board of Directors
The Company elects directors in strict accordance with the selection and appointment procedures stipulated in the Articles of
Association; the Board of Directors of the Company has nine directors including three independent directors accounting for
one-third of all directors and the number and composition of the Board of Directors are in compliance with laws and regulations
and the requirements of the Articles of Association. All directors of the Company shall carry out their work in accordance with the
Rules of Procedure of the Board of Directors and the Management System of Independent Directors attend the board meetings and
shareholders' meetings timely actively participate in relevant professional training and familiarize themselves with relevant laws
and regulations.
4. About the Supervisors and Board of Supervisors
The Company shall select supervisors in strict accordance with the relevant provisions of the Company Law and the Articles of
Association etc. The Board of Supervisors of the Company has three supervisors including one staff supervisor and the number
and composition of the Board of Supervisors are in compliance with the requirements of laws and regulations. The supervisors of
the Company are able to perform their duties conscientiously in accordance with the requirements of the Rules of Procedure of the
Board of Supervisors etc. and effectively supervise and express independent opinions on the Company’s major matters connec ted
transactions financial position performance of duties of directors and managers.
5. Performance Evaluation & Incentive and Restraint Mechanism
The Company has gradually established a fair and transparent performance evaluation standards and incentive and restraint
mechanisms for directors supervisors and senior management (managers) and the appointment of senior management (managers)
of the Company is open and transparent and in compliance with the laws and regulations.
6. Relevant stakeholders
The Company fully respects and safeguards the legitimate rights and interests of relevant stakeholders and achieves a
coordinated balance of the interests of society shareholders the Company and employees to jointly promote the sustainable and
sound development of the Company.
7. Information Disclosure and Transparency
The Company has designated the Secretary of the Board of Directors as the person in charge of investor relations management
of the Company who is responsible for management of information disclosure and investor relations of the Company and reception
of visits and inquiries from shareholders; designated Securities Times Securities Daily and Cninfo as the newspapers and website for
information disclosure of the Company disclosing information truthfully accurately and timely in strict accordance with the relevant
laws and regulations and ensuring that all shareholders have fair opportunities access to information.Whether the actual status of corporate governance significantly deviates from the regulatory documents issued by the China
Securities Regulatory Commission regarding the governance of listed companies.□ Yes √ No
There is no significant difference between the actual situation of corporate governance and the regulatory documents on the
governance of listed companies issued by China Securities Regulatory Commission.II. The company's independence from the controlling shareholders in business personnel assets
organization finance etc.Since establishment the Company has been operating in strict accordance with the requirements of the Company Law the
Securities Law and other relevant laws and regulations and Articles of Association and is independent of each other in terms of
business assets personnel organization and finance and there is no situation in which the Company cannot guarantee its
independence and maintain its ability to operate independently from its controlling shareholder in terms of business personnel
assets organization and finance.III Horizontal competition
□ Applicable √ Not applicable
IV. Relevant Situation of the Annual General Meeting of Shareholders and the Extraordinary
General Meeting of Shareholders Held in the Reporting Period
1. The shareholders' meetings for this reporting period
Conference Session Conference Type
Percentage of
Investors Involved
Date of
Conference
Date of
Disclosure
Disclosure Index
Shareholders' General
Meeting in 2019
Annual General
Meeting
58.04%
Monday May
18 2020
Monday May
18 2020
http://www.cninfo.com.cn/
2. Convening of the interim shareholders' general meetings upon request of the preferred stockholders whose
voting rights are restored
□ Applicable √ Not applicable
V. The performance of the duties of independent directors during the reporting period
1. Attendance of independent directors in the board of directors and shareholders' meeting
Attendance of independent directors at the BOD meeting and shareholders' general meetings
Name of
independent
director
Number of
board
meetings to
attend during
the reporting
period
Number of
on-site
attendance of
board
meetings
Number of attendance
of board meetings by
means of
telecommunications
Number of
attendance of
board
meetings by
entrusts
Number of
absence at
board
meetings
Whether absent
from board
meetings in
person for two
consecutive
times
Number of
attendance of
shareholders'
general
meetings
Lanke 5 5 No 1
Liu Shuzhe 5 5 No 1
Yu Qinyi 5 5 No 1
2. Objections of independent directors to related issues of the company
Whether the independent directors challenge the company's related issues?
□ Yes √ No
During the reporting period independent directors did not raise objections to the company's related matters.
3. Other information on independent directors' performance of duties
Whether independent director's proposals on the company issues are accepted
√ Yes □ No
Note on the acceptance or rejection of independent director's proposals on company issues.
During the reporting period all reasonable suggestions put forward by the independent directors to the Company have been
adopted.VI. Performance of duties of the special committee under the board of directors during the
reporting period
1. Performance of Duties by the Audit Committee
According to the Rules of Work of the Audit Committee of the Board of Directors of the Company the Audit Committee has
given full play to its role of audit and supervision and is mainly responsible for financial supervision and verification work of the
Company as well as the communication and coordination with external auditors. The Audit Committee verified the internal control
of the Company in 2020 and considered that the internal control system already established by the Company is in compliance wi th
the relevant regulations and can effectively control the relevant risks. In 2020 the Audit Committee focused on the Company's
periodic financial reports production and operation control use of funds raised and capital appropriation by controlling
shareholders and related parties. The Audit Committee conducted a summary and evaluation of the work of the accounting firm
engaged in the annual audit of the Company and put forward the suggestion of renewing the employment of the accounting firm.
2. Performance of Duties of the Remuneration and Appraisal Committee
During the reporting period the Remuneration and Appraisal Committee of the Board of Directors of the Company diligently
performed its duties in accordance with relevant regulations and the provisions of the Articles of Association and the Rules of
Procedure of the Remuneration and Appraisal Committee of the Board of Directors and reviewed matters such as the remuneratio n
of directors and senior management in 2020.
3. Performance of Duties by the Nomination Committee
During the reporting period the Nomination Committee of the Board of Directors actively performed its duties in accordance
with relevant regulations and the provisions of Articles of Association and Rules of Procedure of the Nomination Committee of the
Board of Directors and put forward feasible guidance and requirements for construction of a talent team for sustainable
development of the Company.
4. Performance of Duties by the Strategy Committee
During the reporting period the Strategy Committee of the Board of Directors reviewed and summarized the implementation
of the Company's strategy in accordance with relevant regulations and the provisions of Articles of Association and Rules of
Procedure of the Strategy Committee of the Board of Directors and timely conducted a study on strategic planning according to the
market situation and the industry in which the Company is engaged in and put forward reasonable suggestions on implementatio n
of the development strategy according to the actual situation of the Company.VII. Work of the Board of Supervisors
Has Board of Supervisors discovered any risk in the company during the supervision in the reporting period
□ Yes √ No
The Board of Supervisors of the Company has no objection to the supervision matters during the reporting period.VIII. Evaluation and Incentive Mechanisms for Senior Management
In accordance with Remuneration Management System for Directors Supervisors and Senior Management the Company has
established a performance appraisal and incentive and restraint mechanism linking the remuneration of senior management with
the Company's performance and the Company has implemented a remuneration system combining basic annual salary and
year-end performance appraisal for senior management.
Based on the achievement of the Company's annual operating objectives and the performance of senior management the
Remuneration and Appraisal Committee of the Board of Directors conducts annual performance appraisal of senior management
and supervises the implementation of the remuneration system. The Company in turn pays their annual performance salary and
provides rewards and punishments based on the results of the performance appraisal. The Remuneration and Appraisal Committee
of the Board of Directors of the Company after assessing the senior management of the Company based on the actual situation
unanimously agreed that the remuneration plan of the senior management of the Company for the year 2020 has strictly
implemented the remuneration management system of the Company.
IX. Internal Control Assessment Report
1. Details of material weakness in internal control found during the reporting period
□ Yes √ No
2. Internal control self-evaluation report
Date of full-text disclosure for
internal control assessment
report
Thursday April 22 2021
Full-text disclosure index for
internal control assessment
report
For details see 2020 Annual Internal Control Self-Evaluation Report published by the company on
http://www.cninfo.com.cn on April 22 2021
Percentage of total asset from
units included in the
assessment out of the total
asset from the company's
consolidated financial
statements
63.24%
The proportion of operating
income of parties included in
the assessment to the
operating income from the
Company's consolidated
financial statements
79.38%
Defect identification criteria
Category Financial Report Non-financial reports
Qualitative standards
A material deficiency in internal control
over financial reporting is considered to
exist if:
(1) The Company's control environment is
ineffective;
(2) Fraud by any of the directors
supervisors and senior management;
(3) The Certified Public Accountant finds
that there is a material misstatement in
the current financial report however the
Company's internal control fails to detect
such misstatement in the course of
operation;
(4) Ineffective supervision of internal
The Company is deemed to have a material deficiency
in internal control not related to financial reporting if
the following circumstances occur:
(1) The Company's operating activities seriously violate
national laws and regulations;
(2) Unscientific decision-making procedures resulting
in major mistake in decision-making which causes
significant property losses to the Company;
(3) Significant loss of key management personnel or
technical personnel;
(4) Frequent occurrence of negative news or reports
which aroused great concern of regulatory authorities
and cannot be eliminated in a long period of time.Significant deficiency: A deficiency that alone or in
control by the Company's Audit
Committee and internal audit department.
Significant deficiency: A deficiency that
alone or in combination with other
deficiencies is less serious than a material
deficiency but may still cause the
Company to deviate from its control
objectives.General deficiency: Other internal control
deficiencies that do not constitute a
material deficiency or a significant
deficiency.combination with other deficiencies is less serious
than a material deficiency but may still cause the
Company to deviate from its control objectives.
General deficiency: Other internal control deficiencies
that do not constitute a material deficiency or a
significant deficiency.Quantitative standards
Potential misstatement of total profits
material deficiency: misstatement ≥ 5% of
total profits; significant deficiency: 2% of
total profits ≤ misstatement < 5% of total
profits; general deficiency: misstatement