Guangdong Baolihua New Energy Stock Co.Ltd(000690)
Notes to financial statements of 2021
1、 Basic information of the company
（1） Place of registration, organizational form and headquarters address of the company
Guangdong Baolihua New Energy Stock Co.Ltd(000690) (formerly known as “Guangdong Baolihua Industrial Co., Ltd.”, hereinafter referred to as “the company” or “the company”) was approved by the Guangdong Provincial People’s Government in 1996 with “Yue ban Han [1996] No. 654” document. Guangdong Baolihua Group Co., Ltd. (restructured as Guangdong baolihua Group Co., Ltd. in 2005) as the main sponsor, combined with Meixian Jinsui Industrial Development Co., Ltd., Meixian Dongfeng Enterprise Group Co., Ltd Meizhou foreign processing and assembly service company, Meizhou Guangji machinery earthwork engineering company (later renamed Guangdong Huayin Group Engineering Co., Ltd.) and other joint-stock limited companies.
The registered capital of the company is 2175887800 shares (par value of RMB 1.00 per share, the same below). The registered address of the company’s headquarters is located in baolihua complex building, Hong Kong Garden, Oct, Mei County, Guangdong Province. The unified social credit code of the business license is 914414006179309884.
When the company was established, the promoters invested 37.5 million shares; In January 1997, the company issued 12.5 million RMB common shares to the public with the approval of “Zheng Jian FA Zi [1996] No. 414” and “Zheng Jian FA Zi [1996] No. 415” of China Securities Regulatory Commission; In July 1997, the company passed a resolution in accordance with legal procedures and reported to the relevant departments for approval. According to the scheme of increasing 7.5 shares per 10 shares and sending 2.5 shares per 10 shares, the company transferred and sent 50 million shares of share capital to all shareholders; In July 1999, with the approval of the document “Zheng Jian Gong Si Zi [1999] No. 33” of the China Securities Regulatory Commission, the company allotted 7.5 million shares to public shareholders at a ratio of 10:3; In August 2000, the company passed a resolution in accordance with legal procedures and reported to the relevant departments for approval. According to the scheme of increasing 5 shares per 10 shares and sending 3 shares per 10 shares, the company transferred and sent 86 million shares to all shareholders; In October 2003, the company allotted 17.55 million shares to public shareholders at a ratio of 10:3 with the approval of “Zheng Jian FA FA Zi [2003] No. 99” of China Securities Regulatory Commission; In February 2006, the company passed a resolution in accordance with legal procedures and sent 63.315 million shares of capital stock to all shareholders according to the scheme of sending 3 shares for every 10 shares; In December 2006, the company issued 96 million non-public shares to specific objects with the approval of the notice on approving Guangdong Baolihua New Energy Stock Co.Ltd(000690) non-public offering of shares (zjfz [2006] No. 134) of China Securities Regulatory Commission; In February 2007, the company passed a resolution in accordance with legal procedures and reported to the relevant departments for approval. According to the scheme of converting 8 shares per 10 shares and sending 2 shares per 10 shares, the company transferred and sent 370365000 shares of share capital to all shareholders; According to the company’s stock option incentive plan, in December 2007, the company implemented the first exercise of stock options, with a total increase of 10.8 million shares; In February 2008, the company passed a resolution in accordance with legal procedures and reported to the relevant departments for approval. According to the scheme of converting 3 shares per 10 shares and sending 2 shares per 10 shares, the company transferred and sent 375765000 shares of share capital to all shareholders; According to the company’s stock option incentive plan, in June 2009, the company implemented the second exercise of stock options, with a total increase of 2378 shares; In March 2010, the company passed a resolution in accordance with legal procedures and reported to the relevant departments for approval. According to the scheme of converting 2 shares per 10 shares and sending 3 shares per 10 shares, the company transferred and sent 575537500 shares to all shareholders. After the above share changes, the total share capital of the company is 1726612500 yuan.
In April 2016, according to the resolution of the second extraordinary general meeting of shareholders in 2015 held on June 19, 2015 and the resolution of the third extraordinary general meeting of shareholders in 2015 held on October 28, 2015, and approved by the reply on approving Guangdong Baolihua New Energy Stock Co.Ltd(000690) non-public offering of shares [2015] No. 2871 of China Securities Regulatory Commission, the company was approved to issue 449275362 RMB ordinary shares (A shares), The total share capital of the company after the change is 2175887862 yuan.
The parent company of the company is Guangdong Baolihua Group Co., Ltd. and the final controller is Mr. Ye Huaneng.
（2） Business nature and main business activities of the company
The company belongs to the power production industry, and its main products and services are power, etc.
The business scope of the company is: clean coal combustion technology power generation and renewable energy power generation, new energy power production, sales and development (operated with qualification certificate), new energy power production technology consulting and services. Design, contracting and construction of housing construction, highway, bridge, municipal and other infrastructure projects (operated with qualification certificate), investment in new energy industry, foreign direct equity investment, venture capital, entrusted investment, entrusted management investment, investment consulting and financial consulting; Enterprise credit information collection, sorting and consulting services; Enterprise reputation evaluation service and enterprise qualification service; Leasing industry. (for projects subject to approval according to law, business activities can be carried out only after approval by relevant departments)
（3） Approval and issuance of financial statements
The financial statements were approved by the board of directors of the company on April 15, 2022.
2、 Scope of consolidated financial statements
There are 5 subsidiaries included in the scope of consolidated financial statements in the current period, including 1 structured entity and 2 subsidiaries. See “VII. Change of consolidation scope” and “VIII. Equity in other entities” in this note for details.
3、 Preparation basis of financial statements
（1） Preparation basis of financial statements
The company recognizes and measures the actual transactions and events in accordance with the accounting standards for business enterprises – Basic Standards and specific accounting standards for business enterprises, the application guide of accounting standards for business enterprises, the interpretation of accounting standards for business enterprises and other relevant provisions (hereinafter collectively referred to as “accounting standards for business enterprises”), The financial statements are prepared in accordance with the provisions of the rules for the preparation of information disclosure of companies offering securities to the public No. 15 – General Provisions on financial reports (revised in 2014) of the China Securities Regulatory Commission.
（2） Going concern
The company has evaluated the continuous operation ability for 12 months since the end of the reporting period, and no events or situations that have major doubts about the continuous operation ability are found. Therefore, the financial statements are prepared on the basis of going concern assumption.
（3） Accounting basis and pricing principle
The accounting of the company is based on the accrual basis. Except that some financial instruments are measured at fair value, the financial statements take historical cost as the measurement basis. If an asset is impaired, the corresponding impairment provision shall be withdrawn in accordance with relevant regulations. 4、 Important accounting policies and accounting estimates
（1） Tips on specific accounting policies and accounting estimates
The company determines specific accounting policies and accounting estimates according to the characteristics of production and operation, which are mainly reflected in note IV. (XI) impairment of financial instruments; Note 4. (XIV) valuation method of inventories; Note IV. (XX) depreciation of fixed assets; Note IV. (XXIV) amortization of intangible assets; Note IV. (XXXII) recognition of income, etc.
（2） Statement of compliance with accounting standards for business enterprises
The financial statements prepared by the company comply with the requirements of the accounting standards for business enterprises and truly and completely reflect the company’s financial status, operating results, cash flow and other relevant information during the reporting period.
（3） Accounting period
The fiscal year is from January 1 to December 31 of the Gregorian calendar.
（4） Business cycle
The business cycle refers to the period from the purchase of assets for processing to the realization of cash or cash equivalents. The company takes 12 months as an operating cycle and takes it as the liquidity division standard of assets and liabilities.
（5） Recording currency
RMB is adopted as the bookkeeping base currency.
（6） Accounting treatment methods for business combinations under the same control and not under the same control
1. If the terms, conditions and economic impact of each transaction in the process of business combination meet one or more of the following conditions, multiple transactions shall be treated as a package deal for accounting
(1) These transactions are concluded at the same time or in consideration of mutual influence;
(2) These transactions as a whole can achieve a complete business result;
(3) The occurrence of one transaction depends on the occurrence of at least one other transaction;
(4) A transaction is uneconomic alone, but it is economical when considered together with other transactions.
2. Business combination under the same control
The assets and liabilities obtained by the company in business combination shall be measured according to the book value of the assets and liabilities of the combined party (including the goodwill formed by the final controller’s acquisition of the combined party) in the consolidated financial statements of the final controller on the combination date. For the difference between the book value of the net assets obtained in the merger and the book value of the merger consideration paid (or the total face value of the issued shares), the capital stock premium in the capital reserve shall be adjusted. If the capital stock premium in the capital reserve is insufficient to be offset, the retained earnings shall be adjusted.
If there is contingent consideration and it is necessary to recognize the estimated liabilities or assets, the difference between the amount of the estimated liabilities or assets and the subsequent settlement amount of contingent consideration shall be adjusted to the capital reserve (capital premium or equity premium). If the capital reserve is insufficient, the retained earnings shall be adjusted. If the business combination is finally realized through multiple transactions and belongs to a package deal, each transaction shall be treated as a transaction that obtains control; If it is not a package deal, the capital reserve shall be adjusted according to the difference between the initial investment cost of the long-term equity investment on the date of obtaining the control right and the sum of the book value of the long-term equity investment before the merger plus the book value of the newly paid consideration for the shares obtained on the merger date; If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. For the equity investment held before the merger date, the other comprehensive income recognized due to the accounting of equity method or the accounting of financial instrument recognition and measurement standards will not be subject to accounting treatment until the disposal of the investment is subject to the same basis as the direct disposal of relevant assets or liabilities by the investee; Other changes in owner’s equity other than net profit and loss, other comprehensive income and profit distribution in the net assets of the investee recognized by using the equity method shall not be subject to accounting treatment until the investment is transferred to the current profit and loss when it is disposed of.
3. Business combination not under the same control
The purchase date refers to the date when the company actually obtains the control over the acquiree, that is, the date when the control over the acquiree’s net assets or production and operation decisions is transferred to the company. When the following conditions are met at the same time, the company generally believes that the transfer of control is realized:
① The business merger contract or agreement has been approved by the internal authority of the company.
② Where a business combination needs to be examined and approved by the relevant competent department of the state, it has been approved.
③ The necessary formalities for the transfer of property rights have been handled.
④ The company has paid most of the merger price and has the ability and plan to pay the remaining amount.
⑤ The company has actually controlled the financial and operating policies of the acquiree, enjoyed corresponding benefits and assumed corresponding risks.
On the acquisition date, the company measures the assets paid and liabilities incurred or assumed as the consideration for business combination at fair value, and the difference between the fair value and its book value is included in the current profit and loss.
The company recognizes the difference between the combination cost and the fair value of the identifiable net assets of the acquiree obtained in the combination as goodwill; The difference between the combination cost and the fair value of the identifiable net assets of the acquiree obtained in the combination shall be included in the current profit and loss after review.
If the business combination not under the same control realized step by step through multiple exchange transactions belongs to a package deal, each transaction shall be treated as a transaction that obtains control; If it is not a package deal and the equity investment held before the merger date is accounted by the equity method, the sum of the book value of the equity investment held by the acquiree before the acquisition date and the new investment cost on the acquisition date shall be taken as the initial investment cost of the investment; Other comprehensive income recognized for the equity investment held before the purchase date due to the adoption of the equity method shall be accounted for on the same basis as the investee’s direct disposal of relevant assets or liabilities. If the equity investment held before the merger date is accounted by the recognition and measurement standards of financial instruments, the sum of the fair value of the equity investment on the merger date plus the new investment cost shall be taken as the initial investment cost on the merger date. The difference between the fair value and book value of the originally held equity and the cumulative changes in fair value originally included in other comprehensive income shall be transferred to the current investment income on the merger date.
4. Relevant expenses incurred for merger
The intermediary expenses such as audit, legal services, evaluation and consultation and other directly related expenses incurred for business combination shall be included in the current profit and loss when incurred; The transaction costs of issuing equity securities for business combination can be deducted from equity if they are directly attributable to equity transactions.
（7） Preparation method of consolidated financial statements
1. Consolidation scope
The consolidation scope of the company’s consolidated financial statements is determined on the basis of control, and all subsidiaries (including individual entities controlled by the company) are included in the consolidated financial statements.
2. Merger procedure
The company prepares consolidated financial statements based on the financial statements of itself and its subsidiaries and other relevant materials. In preparing consolidated financial statements, the company regards the whole enterprise group as an accounting entity, and reflects the overall financial status, operating results and cash flow of the enterprise group in accordance with the recognition, measurement and presentation requirements of relevant accounting standards for business enterprises and unified accounting policies.
The accounting policies and accounting periods adopted by all subsidiaries included in the consolidation scope of the consolidated financial statements are consistent with those of the company. If the accounting policies and accounting periods adopted by subsidiaries are inconsistent with those of the company, necessary adjustments shall be made according to the accounting policies and accounting periods of the company when preparing the consolidated financial statements.
Consolidated financial statements
