Shenzhen Fountain Corporation(000005) : announcement of the resolution of the board of supervisors

Securities code Shenzhen Fountain Corporation(000005) Securities abbreviation: St Xingyuan Announcement No.: 2022008 Shenzhen Fountain Corporation(000005) board of supervisors resolution announcement

The 11th board of supervisors of the company held a meeting on April 25, 2022. Five supervisors should attend the meeting and five actually attended the meeting. The meeting considered and adopted the following resolution with 5 votes in favor, 0 against and 0 abstention:

1、 Work report of the board of supervisors in 2021.

See the work report of the board of supervisors disclosed on the same day for details.

2、 After reviewing the financial audit report issued by China Audit Asia Pacific Certified Public Accountants, the report truly reflects the company's financial situation and operating results. The annual report of the company for 2021 prepared by the board of directors has been approved. 3、 Financial report of 2021.

4、 Proposal on convening the 2021 annual general meeting of shareholders and matters submitted to the general meeting of shareholders for deliberation.

5、 Opinions on self-evaluation of the company's internal control system.

See the opinions of the board of supervisors on the evaluation report of the company's internal control disclosed on the same day for details.

6、 Proposal on withdrawing asset impairment:

According to the provisions of the accounting standards for Business Enterprises No. 8 - asset impairment, an impairment test shall be conducted on the assets with signs of impairment. If the impairment test results show that the recoverable amount of the assets is lower than the book value, the book value of the assets shall be written down to the recoverable amount.

1. Credit impairment loss

The provision for credit impairment loss in the current period is 6743851329 yuan.

2. Inventory falling price loss

The provision for inventory falling price in the current period is 1440078635 yuan.

3. Provision for impairment loss of goodwill

The company entrusts Beijing Yachao Assets Appraisal Co., Ltd. to evaluate the recoverable amount of the asset group related to Bosch China's goodwill. According to the evaluation results of Beijing Yachao Ping Bao Zi (2022) No. A120 evaluation report issued by Beijing Yachao Assets Appraisal Co., Ltd., an impairment loss of 13 Shenzhen Genvict Technologies Co.Ltd(002869) 00 yuan is accrued for this asset this year.

4. Impairment loss of contract assets

The impairment loss of contract assets accrued in the current period is 148061938 yuan.

7、 Opinions on matters related to the qualified opinions of the board of directors on the audit report

China Audit Asia Pacific Certified Public Accountants issued a qualified audit report for the company. The board of directors of the company has explained the matters involved. After review by the board of supervisors, the board of directors agreed to the explanation of the matters.

8、 Proposal on correction of previous accounting errors

(1) Shenzhen Century Xingyuan Property Development Co., Ltd., a subsidiary of the company, reported accounts receivable on December 31, 2020 - Hunan Tianjing Mingyuan Real Estate Co., Ltd., with an original value of 1088393438 yuan and a bad debt provision of 115988055 yuan. Hunan Tianjing Mingyuan Real Estate Co., Ltd. has repaid 879881070 yuan in December 2020, which is collected by Shenzhen East Coast Industrial Development Co., Ltd. and can offset the current debt of the company to Shenzhen East Coast Industrial Development Co., Ltd. the company has not made accounting treatment for this business. To correct this error, reduce the opening accounts receivable - the original value of Hunan Tianjing Mingyuan Real Estate Co., Ltd. by 879881070 yuan, and reduce the opening other accounts payable - Shenzhen East Coast Industrial Development Co., Ltd. by 879881070 yuan; The bad debt provision of accounts receivable at the beginning of the period was reduced by 105435309 yuan, the undistributed profit at the beginning of the period was increased by 105435309 yuan, and the credit impairment loss in 2020 was increased by 105435309 yuan.

(2) Shenzhen Century Xingyuan Property Development Co., Ltd., a subsidiary of the company, Holds 36% of the equity of the associated enterprise Shenzhen Zhonghuan Xingyuan Real Estate Development Co., Ltd. and adopts the equity method for accounting. For other equity changes of Shenzhen Zhonghuan Xingyuan Real Estate Development Co., Ltd. -2046331081 yuan in 2018, the equity method is not calculated according to the shareholding ratio. This error was corrected by reducing the opening long-term equity investment by 736679189 yuan and the opening capital reserve by 736679189 yuan.

(3) Shenzhen Century Xingyuan Property Development Co., Ltd., a subsidiary of the company, has a contract liability of 557739000 yuan for Shenzhen Jinju fire electromechanical Co., Ltd. on December 31, 2020. The nature of the payment is not advance collection, but current accounts payable to Shenzhen East Coast Industrial Development Co., Ltd. This error was corrected by reducing the opening contract liabilities by 557739000 yuan and increasing the opening other payables - Shenzhen East Coast Industrial Development Co., Ltd. by 557739000 yuan.

(4) Shenzhen smart space Property Management Service Co., Ltd., a subsidiary of the company, reported a short-term loan of 19.5 million yuan on December 31, 2020. This loan is a loan from Shenzhen Lanhai village bank with a term of 3 years and a maturity date of 2023. According to the contract, 1 million yuan shall be repaid in 2021 and 2022 respectively. This error was corrected by reducing the opening short-term loan of 19.5 million.00 yuan, increasing the opening long-term loan of 18.5 million.00 yuan, and increasing the non current liability of 100000000 yuan within one year.

(5) Shenzhen smart space Property Management Service Co., Ltd., a subsidiary of the company, reported an advance payment of 941821107 yuan to Shenzhen Hezhong Architectural Decoration Engineering Co., Ltd. on December 31, 2020. The nature of the payment is not an advance payment, but a current payment, which should be reported in other receivables. This error was corrected by reducing the opening prepayment by 941821107 yuan, increasing the opening other receivables by 941821107 yuan, increasing the opening other receivables bad debt provision by 47091055 yuan, and reducing the period undistributed profit by 47091055 yuan (reducing the credit impairment loss in 2020 by 47091055 yuan).

Report item name and cumulative affected amount in each comparison period affected.

The correction of accounting errors will affect the profit statement of 2020 on January 1, 2021

Content of balance sheet item name

Cumulative impact of report item name cumulative impact of report item name

(+ increase decrease) (+ increase decrease)

(1) Accounts receivable issued by Shenzhen Century Xingyuan property -774445761

Exhibition Co., Ltd., accounts receivable - Lake other accounts payable -879881070

Nantianjing Mingyuan Real Estate Co., Ltd

Undistributed profit of the company 105435309 credit impairment loss 105435309 (2) Group subsidiary Shenzhen Century

Long term equity investment of Xingyuan Property Development Co., Ltd. - 736679189

Shenzhen Zhonghuan Xingyuan Real Estate Development Co., Ltd

Capital reserve of long-term equity investment of China Development Co., Ltd. - 736679189

Equity method accounting

(3) Group subsidiary Shenzhen Century contract liabilities -557739000

Xingyuan Property Development Co., Ltd

Same liabilities - other payables of Shenzhen Jinju fire engine 557739000

Power Co., Ltd

Short term loan -1950000000

(4) Group subsidiary Shenzhen wisdom

Long term loan of space Property Management Service Co., Ltd. 1850000000

For the company, the presentation of short-term borrowings corrects the non current loans due within one year

Liabilities 100000000

(5) Other receivables of Shenzhen smart Group subsidiary 894730052

Prepayment of space Property Management Service Co., Ltd. - 941821107

Prepayment, Shenzhen hezhongjian

Undistributed profit of Building Decoration Engineering Co., Ltd. -47091055 credit impairment loss -47091055

The correction of accounting errors made by the company on some items of the financial statements in 2020 complies with the provisions of the accounting standards for business enterprises issued by the state, and the correction results objectively reflect the financial situation of the company on January 1, 2021 and the operating results in 2020.

9、 Proposal on changing accounting policies

On December 7, 2018, the Ministry of Finance issued the accounting standards for Business Enterprises No. 21 - leasing (revised in 2018) (CK [2018] No. 35) (hereinafter referred to as the "new leasing standards"). Through the resolution of the board of directors of the company, the group began to implement the above-mentioned new leasing standards from January 1, 2021, and changed relevant accounting policies in accordance with the provisions of the new leasing standards.

According to the provisions of the new lease standards, the group chooses not to reassess whether the contract that already exists before the first execution date is a lease or includes a lease. For the lease contract as the lessee, the group chooses to adjust only the cumulative impact of the lease contract that has not been completed on January 1, 2021. For the cumulative impact amount of the first execution, adjust the retained earnings and other relevant items in the financial statements at the beginning of the current period (i.e. January 1, 2021) of the first execution, and do not adjust the information of the comparable period. Among them, for the financial lease on the first execution date, the group, as the lessee, measures the right to use assets and lease liabilities respectively according to the original book value of the financial lease in assets and the financial lease payable; For the operating lease on the first execution date, the lessee shall measure the lease liability as the present value discounted by the incremental loan interest rate on the first execution date according to the remaining lease payment; The unpaid rent payable accrued on the accrual basis under the original lease standards shall be included in the remaining lease payments.

According to each lease option, the group measures the right of use assets according to one of the following two: A. It is assumed that the book value of the new lease standard is adopted from the beginning of the lease term (the incremental loan interest rate on the first execution date is used as the discount rate); B. An amount equal to the lease liability and adjusted as necessary according to the prepaid rent. In accordance with the provisions of the accounting standards for Business Enterprises No. 8 - asset impairment, the impairment test of use right assets shall be carried out and the corresponding accounting treatment shall be carried out.

The adjustment of the company complies with the provisions and requirements of relevant national laws and regulations, and can objectively and fairly reflect the financial status and operating results of the company. The changes of the above accounting policies are in line with the interests of the company and all shareholders, no damage to the interests of the company and minority shareholders is found, and the decision-making procedures are in line with the provisions of relevant laws, regulations and the articles of association.

The impact of the above accounting policy changes on the financial statements on January 1, 2021 is as follows:

Amount statement items on December 31, 2020 (before change) and January 1, 2021 (after change)

Consolidated statement company statement consolidated statement company statement other current assets 251494224201544224

Right of use assets 0 01096265338392024700 accounts payable 3186839949773178562531570805497434191625 other accounts payable 2254008729822511318942

Non 5743089831247571264396240249 due within one year 0

current liabilities

Lease liabilities 0699415413293378451

10、 Report for the first quarter of 2022.

Item 1 of the above resolution shall be submitted to the 2021 annual general meeting of shareholders for deliberation.

It is hereby announced.

Shenzhen Fountain Corporation(000005)

Board of supervisors

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