2021
ANNUAL REPORT
2021 ANNUAL REPORT
EVENTS
EVENTS
2
Corporate Overview
4
Major Events
6
Corporate Information
7
Financial Highlights
8
Chairman
’
s Statement
11
Chief Executive
’
s Statement
14
Honours and Awards
15
Geographic Coverage
16
Management Discussion and Analysis
31
Directors and Senior Management
45
Corporate Governance Report
55
Directors
’
Report
67
Independent Auditor
’
s Report
71
Consolidated Statement of Profit or Loss
72
Consolidated Statement of Comprehensive Income
73
Consolidated Statement of Financial Position
75
Consolidated Statement of Changes in Equity
77
Consolidated Statement of Cash Flows
79
Notes to Financial Statements
144
Four-Year Financial Summary
Contents
2
Annual Report 2021Jinmao Property Services Co., Limited
CORPORATE OVERVIEW
We are a fast-growing upscale
property management and
city operation service provider
in China. According to China
Index Academy, we are an
industry-leading company in
terms of multiple indicators in
the three dimensions of scope
of service, service standards
and service fees. In 2021, we
were ranked 17th among the
Top 100 Property Management
Companies in China
by overall strength,
and were recognized as a
Leading Enterprise in Property
Technology Empowerment in
China
and a Leading Enterprise
in Smart City Services in China
, according to China Index
Academy. We were ranked first
in the Top 10 High-End Property
Service Force Enterprises in
China TOP10
, according to CRIC Research.
Covering
48cities
175
properties under
management
Annual Report 2021
3
Jinmao Property Services Co., Limited
CORPORATE OVERVIEW
Our history can be traced back to 1993 when we were
established as a subsidiary of Sinochem Group Co. Ltd
(
”
Sinochem Group
“
) to provide property management
services in Beijing, the PRC for properties developed by
the predecessor of China Jinmao Holdings Group Limited
(
“
China Jinmao
”
) and its subsidiaries (
“
Jinmao Group
“
).
China Jinmao, our controlling shareholder, is a leading
comprehensive property developer in China, and its shares
are listed on the Main Board of The Stock Exchange
of Hong Kong Limited (the
“
Stock Exchange
”
, stock
code: 00817). Over the years, We provide a full spectrum
of property management services to a broad range of
properties, and we have established a nationwide business
in China, with a strong focus on high-end properties in
core cities. As of 31 December 2021, our total contracted
gross floor area (the
“
GFA
”
) reached approximately 57.6
million sq.m., covering 48 cities across 22 provinces,
municipalities and autonomous regions in China, and
we managed 175 properties in China with a total GFA
under management of approximately 36.4 million sq.m.,
including 113 residential communities and 62 non-
residential properties.
Our property management services cover a wide range
of property types, including residential communities,
commercial properties primarily comprising office
buildings, shopping malls, as well as public properties
such as schools, government facilities and other public
spaces. In addition to property management services, we
provide value-added services to non-property owners,
including sales assistance services to property developers,
and consultancy and other value-added services. We
also provide community value-added services mainly to
property owners and residents of our managed properties
to address their daily lifestyle needs, which mainly consist
of platform services for interior decoration, community
living services, community space operation services, and
real estate brokerage services.
Contracted GFA of
57.6million sq.m.
4
Annual Report 2021Jinmao Property Services Co., Limited
MAJOR EVENTS
On 15 January 2021, Sinochem Jinmao Property
Management (Beijing) Co., Ltd (
“
Jinmao Property
“
)
and the Management Committee of Jiashan Economic
and Technological Development Zone officially signed a
strategic cooperation agreement to jointly create a
“
city
operation
”
governance model and achieve a breakthrough
of
“
zero
”
in the urban operation project of Jinmao
Services.
On 13 May 2021, Jinmao Property signed a strategic
cooperation agreement with Zhoushan Donggang
Investment Development Group Co., Ltd. to continue
to deepen the urban property strategy and help urban
industrial upgrading to create a new benchmark for urban
operation services.
On 13 August 2021, Jinmao Property signed an equity
cooperation agreement with Beijing Zhongguancun
Science City Construction Holding Co., Ltd. to jointly
invest in the establishment of a professional property
service platform company to deeply cultivate the operation
of various space services in the city and create a new
future.
On 7 September 2021, Jinmao Services launched a new
brand of
“
adhering to long-term doctrine and promoting
long-term value growth
”
, and launched a new brand
slogan
“
Think Far, Grow Further
”
.
Annual Report 2021
5
Jinmao Property Services Co., Limited
MAJOR EVENTS
On 15 September 2021,
“
2021 White Paper on High-
end Property Service Development
”
jointly compiled by
Jinmao Property and China Index Academy was officially
released on the meeting of China
’
s real estate brand value
research.
On 27 September 2021, Jinmao Property and Nanjing
Xinyao New Town Management Committee officially
achieved a strategic cooperation to further deepen the
development of the
“
urban operation
”
strategy and help
improve the efficiency of urban management and refine
the grass-roots governance.
On 28 September 2021, Jinmao Property signed a
strategic cooperation agreement with Chongqing Dongtie
Real Estate Development Co., Ltd. to take over a number
of urban comprehensive business projects and continue to
deepen the diversified cooperation between the parties.
On 2 October 2021, Chuangmao Technology (Beijing) Co.,
Ltd. obtained the certification of high-tech enterprise,
which promoted the transformation of enterprise towards
science and technology.
On 31 December 2021, Jinmao Property and Pingyang
Xinao City Construction Co., Ltd. officially signed
a strategic agreement, under which the parties are
committed to promoting the integration of industry
development and urban development and injecting more
impetus into the township model of the Aojiang Common
Prosperity Demonstration Zone.
6
Annual Report 2021Jinmao Property Services Co., Limited
CORPORATE INFORMATION
Legal Name of the Company
Jinmao Property Services Co., Limited
Stock Code
00816
Date of Listing
10 March 2022
Principal Place of Business In the PRC
6F, YouAn International Tower
Unit 2, Xitieying Middle Ave
Fengtai, Beijing, PRC
Registered Office
Rm 4702-03, 47/F
Office Tower Convention Plaza
1 Harbour Road, Wanchai
Hong Kong
Executive Directors
Mr. Xie Wei
(Chief Executive Officer)
Ms. Zhou Liye
Non-executive Directors
Mr. Jiang Nan
(Chairman)
Ms. He Yamin
Ms. Qiao Xiaojie
Independent Non-executive Directors
Dr. Chen Jieping
Dr. Han Jian
Mr. Sincere Wong
Audit Committee
Dr. Chen Jieping
(Chairman)
Mr. Sincere Wong
Ms. Qiao Xiaojie
Remuneration and Nomination
committee
Dr. Han Jian
(Chairman)
Dr. Chen Jieping
Ms. He Yamin
Strategy and Investment committee
Mr. Jiang Nan
(Chairman)
Mr. Xie Wei
Ms. Zhou Liye
Mr. Sincere Wong
Company Secretary
Ms. Ho Wing Tsz Wendy
Authorised Representatives
Ms. Zhou Liye
Ms. Ho Wing Tsz Wendy
Hong Kong Share Registrar and
Transfer Office
Computershare Hong Kong Investor Services Limited
Shops 1712-1716, 17/F., Hopewell Centre
183 Queen
’
s Road East
Hong Kong
Auditor
Ernst & Young
Registered Public Interest Entity Auditor
27/F, One Taikoo Place
979 King
’
s Road
Quarry Bay
Hong Kong
Legal Advisor
Latham & Watkins LLP
18/F, One Exchange Square
8 Connaught Place
Central, Hong Kong
Compliance Advisor
First Shanghai Capital Limited
19/F., Wing On House
71 Des Voeux Road Central
Hong Kong
PRINCIPAL BANKS
DBS Bank Ltd., Hong Kong Branch
Bank of China, Hong Kong Branch
Investor and Media Relations
Tel: 010-56973014
Email: [email protected]
Website: www.jinmaowy.com
Annual Report 2021
7
Jinmao Property Services Co., Limited
FINANCIAL HIGHLIGHTS
FINANCIAL SUMMARY
Consolidated Results
2021 2020
RMB
’
000 RMB
’
000 Changes
Revenue 1,515,525 944,210 60.5%
Gross profit 470,034 234,789 100.2%
Gross profit margin (%) 31.0% 24.9% 6.1 pts
Profit for the year 179,011 77,124 132.1%
Net profit margin (%) 11.8% 8.2% 3.6 pts
Profit attributable to owners of the parent 177,977 77,124 130.8%
Basic and diluted earnings per share (RMB) 0.22 0.10 120.0%
Consolidated Financial Position
2021 2020
RMB
’
000 RMB
’
000 Changes
Total assets 1,359,052 2,135,235 -36.4%
Total equity 203,981 49,134 315.2%
Equity attributable to owners of the parent 195,397 49,134 297.7%
Cash resources
1
554,897 270,818 104.9%
Gearing ratio (%)
2
– 2,200.1% -2,200.1 pts
Current ratio (times) 1.1 1.1 –
Notes:
1. Including the restricted cash.
2. Interest-bearing borrowings excluding lease liabilities divided by total equity, multiplied by 100%.
8
Annual Report 2021Jinmao Property Services Co., Limited
CHAIRMAN
’
S STATEMENT
Based on the new starting point
of listing, Jinmao Services will
keep the long-term faith, adhere
to customer-centered business
model, constantly improve the
service quality and enterprise
management level, lead the
innovation and development
of the industry, create greater
value, and strive to achieve
future human habitats and city
dreams.
Dear shareholders:
Jinmao Property Services Co., Limited (
“
Jinmao
Services
”
, the
“
Company
”
or
“
our Company
”
, together
with and its subsidiaries, the
“
Group
”
,
“
our Group
”
or
“
We
”
) is a fast-growing upscale property management
and city operation service provider in China. We adhere
to customer-centered business model, and focus on
providing customers with high-end and high-quality
services; we attach great importance to staff training
and development, improve and enhance their technical
and service skills, so as to improve service quality; we
strive to create reasonable returns for shareholders
and continuously improve the level of operation and
management; we endeavour to create value for the
society and actively participate in the operation of public
resources and people
’
s livelihood services.
After nearly 30 years of unremitting efforts, we have
established our own market position and brand influence
in China
’
s property management industry. In 2021,
we were ranked 17th among the Top 100 Property
Management Companies in China by overall strength
and were recognized as a
“
Leading Enterprise in Property
Technology Empowerment in China
”
and a
“
Leading
Enterprise in Smart City Services in China
”
, according to
China Index Academy. In 2021, we were ranked first in
the Top 10 High-End Property Service Force Enterprises
in China, according to CRIC Research. On 10 March
2022, we were successfully listed on the Main Board of
the Stock Exchange, opening a new chapter in enterprise
development.
Chairman of the Board and Non-executive Director
Jiang Nan
Annual Report 2021
9
Jinmao Property Services Co., Limited
CHAIRMAN
’
S STATEMENT
Strategic positioning
Through its long-term development, operation and
business practice, Jinmao Services has built its core
competitive advantage of
“
high, comprehensive,
innovative and fast
”
.
High: Jinmao Services focuses on high-quality projects
and high net worth customers in high-energy cities, and
creates industry-leading high-end customized services
through the unique residential MOCO service system
and commercial golden service system. Through the
establishment of brand trust, Jinmao Services may reduce
transaction costs, establish brand awareness, create
transaction premium, establish brand value, and obtain
external resources, so as to realize a high virtuous circle.
Comprehensive: Jinmao Services adheres to the
“
city
operator
”
strategy of China Jinmao, the controlling
shareholder. Its business scope includes residential,
commercial, industrial park, public property and other
business forms, and covers the whole life cycle of assets
from development to sales to delivery. Jinmao Services
cares for the owner
’
s life in the whole field from the
demand. Relying on the brand advantages of China
Jinmao and the state-owned background, Jinmao Services
continues to deepen its cooperation with governments
and step up its efforts in the development of urban
operation services business.
Innovative: Jinmao Services builds a smart community
with innovative technology and advanced technology,
supports the touch of digital services with smart
operation, realizes cost reduction and efficiency increase
of business, and provides intelligent and convenient
services and care around the owner
’
s life to improve the
owner
’
s experience.
Fast: Relying on the strategic positioning of
“
high
”
and
“
comprehensive
”
and the core driving force of
“
innovative
”
, Jinmao Services has effectively grasped the
project reserve opportunities and rapid and sustainable
growth opportunities; at the same time, we will continue
to improve our outreach capacity and strive to achieve
high-quality and rapid development.
Organization construction
We continue to strengthen organizational
construction and continuously improve the operation
level. Based on the principle of taking customers as
the center, focusing on the market and establishing
an interactive coordination mechanism, the Company
optimizes the organizational system at all levels,
deepens the functional management requirements of
the headquarters, sets up four centers, carries out line
penetration management and
“
empowers
”
all business
units; the business unit is positioned as the dispatched
office of the headquarters to comprehensively undertake
the business line management of the headquarters and
various business achievements within the jurisdiction;
each business unit has a management center to carry
out regional operation and coordinate relevant resources
between projects to ensure the achievement of operation
objectives at all stages of the project.
Personnel training
We continue to strengthen team building and
encourage team enthusiasm by creating a high-
performance culture. Jinmao Services regularly hosts
comprehensive internal staff training programs to improve
and enhance their technical and service skills. Jinmao
Services formulated competitive compensation plans and
incentive schemes to attract external talents as well as
retaining employees and management for its business
expansion. In combination with the Company
’
s business
development needs, we upgraded the staffing standards,
formulated
“
one post and one list
”
, sorted out and
completed the list of 42 posts in four major professional
sequences, and formed tabular training materials, so
as to strengthen the ability of grass-roots employees,
promote the implementation of standards, and create a
lean and efficient organizational echelon. Through
“
high
performance incentive
”
, we encourage value creation and
value sharing, and stimulate team enthusiasm, so as to
attract and retain talents.
10
Annual Report 2021Jinmao Property Services Co., Limited
CHAIRMAN
’
S STATEMENT
Facing the future, all employees of Jinmao Services will
adhere to the long-term doctrine, never forget the original
intention, keep moving forward with determination,
adhere to customer-centered business model and continue
to create high-quality services. On behalf of the board of
directors (the
“
Board
”
), I would like to express my sincere
gratitude to the shareholders, customers and the society
for their trust and support.
JINMAO PROPERTY SERVICES CO., LIMITED
Chairman of the Board and Non-executive Director
Jiang Nan
Sustainable development
As a state-owned enterprise and listed company,
Jinmao Services adheres to the concept of
sustainable development and social responsibility.
Relying on the strict HSE management system and
practical exploration in the field of smart community,
the Company sticks to the concept of low-carbon,
environmental protection and green sustainable
development through technical energy conservation,
management energy conservation and other measures.
In terms of social welfare, inspired by the responsibility
of symbiosis with the community, environment, city and
society, the Company has launched public welfare projects
such as
“
Walking with Neighbors, Warming Children
’
s
Hearts
”
caring for left behind children in Western Hunan,
and
“
Spring Bud Plan – Dream Choir
”
jointly with
China Children and Teenagers
’
Fund, through which the
Company expressed its care and received good social
response.
Looking forward
In March 2021, the 14th Five Year Plan for National
Economic and Social Development of the People
’
s Republic
of China and the Outline of Long-term Objectives for
2035 were officially released. The plan aims to improve
the supervision of property services, further standardize
the business behavior of property enterprises, effectively
safeguard the legitimate rights and interests of owners,
and continuously improve the coverage of property
services. The plan is also intended to continuously improve
the standardization level and service quality of property
services, and drive diversified and high-quality services
consumption. Looking forward to the future, the property
service industry will continue to experience an accelerated
period of quality and efficiency improvement driven by
scale acceleration, service boundary extension, science and
technology empowerment and standardized operation.
Annual Report 2021
11
Jinmao Property Services Co., Limited
CHIEF EXECUTIVE
’
S STATEMENT
Under the background of the
upgrade of property service
mode and the intensification of
competition, Jinmao Services will
adhere to the original aspiration
of providing high-quality
services, carrying out services
to meet customer needs,
strengthening the advantages of
urban operation services, deeply
integrating smart technology,
and constantly enhancing its
competitiveness.
Dear shareholders:
On 10 March 2022, we have successfully entered the
capital market. I am pleased to present the business
review and outlook of the Group for the year ended 31
December 2021 to the shareholders.
A LOOK BACK AT 2021
For the year ended 31 December 2021, the Group
’
s
revenue was approximately RMB1,515.5 million,
representing an increase of 60.5% as compared to that in
2020. Gross profit was approximately RMB470.0 million,
representing a year-on-year increase of approximately
100.2%. Profit for the year was approximately
RMB179.0 million, increasing approximately 132.2%
from 2020. Gross profit margin was 31.0%, increasing
by approximately 6.1 pts as compared to 2020. Profits
attributable to owners of the Company rose from
approximately RMB77.1 million in 2020 to approximately
RMB179.0 million in 2021, representing a growth of
approximately 132.2%. Basic earnings per share was
RMB0.22, representing a growth of approximately
120.0%. Net cash flow from operating activities of the
Group increased from approximately RMB136.2 million
for the year ended 31 December 2020 to approximately
RMB347.4 million for the year ended 31 December
2021. As at 31 December 2021, the Group
’
s GFA under
management and contracted GFA were approximately
36.4 million sq.m. and approximately 57.6 million
sq.m., respectively, increasing by 105.6% and 42.2%,
respectively, as compared to 31 December 2020.
We have nationwide coverage with a focus on high-
end properties in core cities. As at 31 December 2021,
our property management portfolio covered 22 provinces
and 48 cities, and we managed 175 properties in China
with 36.4 million sq.m. of GFA under management, of
which approximately 98.7% are in the first-tier, new first-
tier and second-tier cities. The strong influence of China
Jinmao in upper tier cities provides us with a first mover
advantage in many markets that we believe have growth
potentials.
Executive Director and Chief Executive Officer
Xie Wei
12
Annual Report 2021Jinmao Property Services Co., Limited
CHIEF EXECUTIVE
’
S STATEMENT
We actively promote the diverse property profile
and actively promote the expansion of city operation
service projects. Up to now, our service business covers
residential buildings, office buildings, shopping centers,
industrial parks, government office buildings, international
schools and other public spaces, including the 421-meter
Shanghai Jinmao Tower (one of the ten tallest skyscrapers
in the world at the time of completion), the 313-meter
Lanzhou Asia-Europe International Building (the tallest
skyscraper in China
’
s northwestern region), and the
250-meter Meixi Lake Twin Towers in Changsha. With
our rich experience in multi business and high-quality
city operation services, we actively expand city operation
service projects and build a multi-dimensional city
operation service management mechanism. In February
2021, we established a joint venture with Jiashan
Economic Development Zone Property Management
Co., Ltd. ( ) to provide
city operation services for Jiashan
’
s 60 sq.km. economic
development zone.
We focus on quality management and service
innovation to create a high-quality life service
experience. we have positioned ourselves as a quality
living service provider and have established a proprietary
MOCO high-quality service system. On the one hand, we
provide specialized one-stop property care services and
value-added services, which cover the full life cycle of
properties under our management and owners
’
assets;
on the other hand, we increase the iterative upgrade of
MOCO service system, pay attention to the emotional
needs of customers, and connect the owners through
community construction and operation. For example, we
have launched the first owner
’
s Spring Festival Gala on
line in 2021, allowing the owners to participate in it. In
2021, we were awarded
“
China
’
s Leading Specialized
Property Management Service Enterprise – MOCO Service
System
”
(
“
–MOCO
”
)
by China Index Academy.
Through advanced technology and digitization, we
continuously improve customer satisfaction and
business level. Jinmao Services continues to promote
its digital transformation and upgrade its service with
science and technology to improve service efficiency
and user experience. In terms of smart community, we
employ technologies such as IoT, AI, big data analytics
and cloud computing to establish a smart community
covering various application scenarios such as security,
cleaning, parking, billing, etc., and provide our residents
a safe, convenient and comfortable living environment. In
terms of smart operation, we promote the digitization of
property management to improve operational efficiency,
space utilization and demand response ability. In terms
of smart life, we will continue to leverage
“
Home
”
(
) APP as a platform to build a closed-loop smart living
ecosystem for property owners and residents.
Outlook for 2022
The market demand for high-quality services will
grow rapidly, and customers
’
recommendations will
act as a long-term driving force for capturing market
share. The role of property services in asset preservation
and appreciation, business operation empowerment and
enhancement of residents
’
quality of life have been widely
recognized by the government, market and customers,
and gradually applied to the levels of policy guidance
and consumption selection. The Group will focus on
developing high-energy cities in great depth and continue
to acquire high-quality projects, so as to achieve a higher
density of projects in regions. The Group will consistently
strengthen the management of customer experience
and increase investment in services design, research and
development, with an aim to preserve the quality of
projects through the adoption of its long-term doctrine.
With its industry position consistently staying at the
forefront in terms of customers
’
recommendations, the
Group will solidify its status as a leader in the high-quality
services sector and reinforce the core growth logic of
“
high virtuous circle
”
.
Annual Report 2021
13
Jinmao Property Services Co., Limited
CHIEF EXECUTIVE
’
S STATEMENT
High-quality property management companies
will become a new driver for enhancing urban city
services and urban governance capability. The
“
14th
Five-Year Development Plan
”
has outlined the direction
for the enhancement of urban governance capability,
which will trigger the demand for delicacy management
of cities and integrated services in core urban areas,
and high-quality property management companies with
advanced planning for city operation services will enter
a period of rapid growth with ample opportunities. With
adherence to the
“
customer-centric
”
core value and
based on its profound insights into customers
’
demand,
the Group will accelerate the ecological layout planning
for value-added business and the building of industrial
capacity, make a segmentation of office building services
from city operation services, consistently consolidate
its diverse service capability that covers the whole life
cycle and whole field, with a view to realizing corporate
value through the growth of value of customers and the
upstream and downstream businesses along the industry
chain.
The lean management capability based on
digitalization and services research and development
will become a decisive factor for transformation
from
“
area
”
to
“
operating results
”
. The rapid growth
of the business scale of property management companies
and the diversified expansion of their business scope will
create significant challenges for the design of innovative
services and the delivery of stable services. In long run,
the lean management capability will become a key factor
for structuring the industry into different levels. The
Group will concentrate on empowering customer services,
business operations and corporate governance by way of
digitalization, and devote great efforts in implementing
the three-year action plan on
“
lean management
”
.
With the further improvement of stability of services
delivery, efficiency of management and accuracy of
asset allocation, as well as the promotion of more data-
driven research on customers, the Group will develop
new models, platforms and ecosystems for its services,
achieving the growth in both revenue and gross profit
margin.
The robust development of the parent company will
offer a solid guarantee for the steady growth of the
listed property management company. The real estate
sector witnesses a
“
polarized
”
development, which will
result in the circumstance of
“
polarization
”
where the
parent company can exert influence on its subsidiaries
engaged in property management. High-quality real
estate companies will serve as a comprehensive booster
for their subsidiaries engaged in property management in
various aspects, such as resources, talents, markets and
capabilities. The Group will stick to the growth strategy
focusing on four major aspects, namely
“
Individual
Expansion, Strategic Alliance, City Operation, and
Investment in Merger and Acquisition
”
, and aim for high-
quality growth in business scale by building upon the
strong support from Sinochem Group and the robust
growth of China Jinmao, taking advantage of the good
customers
’
recommendations and brand reputation
accumulated over a long period of time, relying on the
footprint of city operation services that have already been
established and remain in rapid expansion, and depending
on alliance partners with a long-term relationship of
cooperation.
Looking forward to the
“
14th Five Year Plan
”
, guided
by the vision of
“
achieving future human habitats and
city dreams
”
, and facing the ardent expectations of
customers, employees, shareholders and the society, we
will continue to strengthen the foundation of business,
enhance the brand influence, think far, grow further, and
create greater and more profound value for our property
services with perseverance and persistence!
JINMAO PROPERTY SERVICES CO., LIMITED
Executive Director and Chief Executive Officer
Xie Wei
14
Annual Report 2021Jinmao Property Services Co., Limited
HONOURS AND AWARDS
With its leading position in the field of high level services, and its outstanding performance in service quality, customer
satisfaction, urban operation services and digital construction, Jinmao Services has been recognized by many industry
authorities and won dozens of honors in 2021.
Annual Report 2021
15
Jinmao Property Services Co., Limited
GEOGRAPHIC COVERAGE
绍兴
舟山
Northern
region
Beijing
Tianjin
Shijiazhuang
Baoding
Zhangjiakou
Taiyuan
Central
region
Changsha
Zhuzhou
Yueyang
Wuhan
Zhengzhou
Southern
region
Guangzhou
Shenzhen
Zhuhai
Shantou
Foshan
Dongguan
Sanya
Southwestern
region
Chengdu
Chongqing
Kunming
Lijiang
Guiyang
Northwestern
region
Xi
’
an
Lanzhou
Eastern
region
Shanghai Changzhou
Hangzhou Suzhou
Ningbo Nantong
Wenzhou Taizhou
Shaoxing Jinan
Jiaxing Qingdao
Jinhua Weifang
Taizhou Fuzhou
Zhoushan Xiamen
Nanjing Hefei
Wuxi Nanchang
Xuzhou
The map below illustrates the geographic coverage of the properties under our management as at 31 December 2021 in
terms of (i) GFA under management, and (ii) contracted GFA, respectively, and the cities in China where our contracted
properties and properties under management are located:
16
Annual Report 2021Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
A discussion and analysis of the Group for the year ended
31 December 2021 is set out below:
BUSINESS REVIEW
Business overview
We are engaged in three business lines, namely property
management services, value-added services to non-
property owners, and community value-added services.
We also provide city operation services, the scope of
which spans across our three business lines.
Property management services
We provide a range of property management services
to property owners and residents, as well as property
developers, including, among others, security, cleaning,
greening, gardening and repair and maintenance services
for the operation of common area facilities.
Our property management portfolio covers residential
properties, in particular, high-end ones, and a wide
range of non-residential properties, including commercial
properties, such as office buildings and shopping
malls, and public and other properties, such as schools,
government facilities and other public spaces.
During the year ended 31 December 2021, we charged
property management fees for property management
services substantially on a lump sum basis, with a small
portion charged on a commission basis.
Value-added services to non-property owners
We provide value-added services to non-property owners,
including sales assistance services to property developers
to assist with their sales and marketing activities at
property sales venues and display units, and consultancy
and other value-added services such as predelivery and
consultancy services, mainly to property developers.
Community value-added services
We provide community value-added services mainly to
property owners and residents of our managed properties
to address their daily lifestyle needs, which mainly consist
of platform services for interior decoration, community
living services such as housekeeping, new retail and
catering services, community space operation services
such as elevator advertising services and car park space
management services, and real estate brokerage services.
Additionally, we provide city operation services in
multiple forms to assist governments and enterprises in
the optimization, innovation and distribution of urban
resources and the delivery of value-added public services
to citizens. The service scope of our city operation services
spans across our three business lines.
Annual Report 2021
17
Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
Property management services
We insist on rapid development to achieve rapid growth of contracted GFA and GFA under management. As of
31 December 2021, our contracted GFA was approximately 57.6 million sq.m., and GFA under management was
approximately 36.4 million sq.m., representing an increase of approximately 42.2% and approximately 105.6%,
respectively, as compared to 31 December 2020. Our undelivered GFA, as the main source of the GFA under
management, was approximately 21.2 million sq.m., laying a solid foundation for the stable growth of the Group.
We focus on diversified business lines in first-tier, new first-tier and second-tier cities with prominent advantages of
high-end commercial properties. Our diversified property management portfolio extends to an increasing variety of office
buildings and shopping malls, industrial parks and public properties such as central government facilities, international
schools and other public spaces. Our all-inclusive property portfolio maximizes synergies across different property types
under our management, and enhances the vitality of our multi-dimensional service offerings. In particular, we have
gained rich property management experience in the field of high-end commercial and office buildings, such as the
service experience in benchmark projects including Shanghai Jinmao Tower (Shanghai), Chemsunny World Trade Center
(Beijing), Sinochem Tower (Beijing), Asia-Europe International Building (Lanzhou), Jinmao ICC (Changsha), etc.
The table below sets forth the breakdown of our GFA under management on the dates indicated and revenue from
property management services by property type for the years ended 31 December 2021 and 2020:
As at 31 December or for the years ended 31 December
2021 2020
GFA under
management
’
000 sq.m.
Revenue
RMB
’
000
%
GFA under
management
’
000 sq.m.
Revenue
RMB
’
000
%
Residential properties 23,460 482,537 58.6 14,456 276,914 48.8
Non-residential properties 12,960 340,692 41.4 3,196 290,567 51.2
Total 36,420 823,229 100.0 17,652 567,481 100.0
We explore new projects based on our existing projects, and continue to tap the potential scale of independent markets.
While receiving strong support from China Jinmao and Sinochem Holdings Corporation Ltd. (the ultimate controlling
shareholder of China Jinmao,
“
Sinochem Holdings
”
), we are also actively working towards the open market in
diversified ways. We will take the projects we have already obtained as the starting point and continue to penetrate into
the local regions, so as to achieve the expansion of the scale of GFA under management and the density increase of
projects in the local cities. We have gained our market share by expanding resources to independent markets. In 2021,
a total of approximately 10.26 million sq.m. was added to our GFA under management, representing an increase of
approximately 475.2% as compared to that of 2020.
18
Annual Report 2021Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
The table below sets forth the breakdown of our GFA under management on the dates indicated and revenue from
property management services by the source of the projects for the years ended 31 December 2021 and 2020:
As at 31 December or for the years ended 31 December
2021 2020
GFA under
management
’
000 sq.m.
%
Revenue
RMB
’
000
%
GFA under
management
’
000 sq.m.
%
Revenue
RMB
’
000
%
– Properties developed by Jinmao Group and
Sinochem Group (and their respective joint
ventures and associates) 24,004 65.9 756,251 91.9 15,493 87.8 524,854 92.5
– Properties developed by independent third parties 12,416 34.1 66,978 8.1 2,159 12.2 42,627 7.5
Total 36,420 100.0 823,229 100.0 17,652 100.0 567,481 100.0
As a pioneer in city operation service sector in China, we have rapidly scale up and further diversify our city operation
property portfolio and service offerings. Leveraging our solid property management and customer service capabilities,
we step beyond traditional property management services to provide specialized, standardized and digital city operation
solutions for customers from all walks of life. Our well-rounded capabilities and deep-rooted connection with Jinmao
Group have enabled us to continuously capitalize on Jinmao Group
’
s strong project pipeline in the city operation
sector. As of 31 December 2021, we had entered into preliminary property management contracts for 22 city operation
projects of Jinmao Group, representing a diverse portfolio of office building complexes, new towns, cultural towns and
smart cities in Shanghai, Changsha, Lijiang, Qingdao, Nanjing, Sanya, Wenzhou, Tianjin, etc., among which 12 projects
were in operation.
City operation has high barriers to entry in terms of technology and experience due to the scope and complexity
of services involved. As the upscale property management arm of Jinmao Group, and benefiting from our extensive
experience in multi-format and premium-grade city operation services, we believe we are well positioned to capitalize
on future market opportunities from independent third parties in the city operation service sector by expanding our
management scale and diversifying our city operation portfolio and service offerings. We typically seek to enter into
strategic cooperation agreements with government authorities and state-owned enterprises, optimize the allocation of
social resources, and have built a multi-dimensional management mechanism for city operation services. For the year
of 31 December 2021, We have established cooperative relations with Jiaxing, Zhoushan and Nanjing governments to
provide city operation services for areas of approximately 80 sq.km.
Our projects cover 48 cities across 22 provinces, municipalities and autonomous regions in China as of 31 December
2021, with a strong focus on high-end properties in core cities, and the proportionate share of GFA under management
in the first-tier, new first-tier and second-tier cities reached 98.7%. We have significant advantages in Eastern region
and Northern region and established a nationwide business in China. GFA under management of Eastern region,
Northern region, Central region, Southern region, Southwestern region and Northwestern region accounted for 67.7%,
10.9%, 9.4%, 6.2%, 5.1% and 0.7% of our total GFA under management as at 31 December 2021.
Annual Report 2021
19
Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
The table below sets forth a breakdown of our GFA under management by geographic location on the dates indicated
and revenue generated from property management services for the years ended 31 December 2021 and 2020
respectively:
As at 31 December or for the years ended 31 December
2021 2020
GFA under
management
’
000 sq.m.
Revenue
RMB
’
000
%
GFA under
management
’
000 sq.m.
Revenue
RMB
’
000
%
Eastern region
(1)
24,670 402,195 48.9 8,048 235,502 41.5
Northern region
(2)
3,953 238,731 29.0 3,110 199,655 35.2
Central region
(3)
3,442 100,203 12.2 2,834 81,746 14.4
Southern region
(4)
2,244 35,695 4.3 1,972 15,130 2.7
Southwestern region
(5)
1,851 44,868 5.5 1,587 35,448 6.2
Northwestern region
(6)
260 1,537 0.1 101 – –
Total 36,420 823,229 100.0 17,652 567,481 100.0
Notes:
(1)
“
Eastern region
”
refers to Shanghai, Zhejiang province, Jiangsu province, Jiangxi province, Shandong province, Fujian
province and Anhui province;
(2)
“
Northern region
”
refers to Beijing, Tianjin, Shanxi province, Hebei province and the central area of Inner Mongolia
(Hohhot, Baotou and Ulanqab);
(3)
“
Central region
”
refers to Hubei province, Hunan province and Henan province;
(4)
“
Southern region
”
refers to Guangxi Zhuang autonomous region, Guangdong province and Hainan province;
(5)
“
Southwestern region
”
refers to Chongqing, Sichuan province, Yunnan province, Guizhou province and Tibet;
(6)
“
Northwestern region
”
refers to Gansu province, Ningxia Hui autonomous region, Shaanxi province, Xinjiang Uygur
autonomous region and the western area of Inner Mongolia autonomous region (Alxa League, Bayannur, Wuhai and
Ordos).
20
Annual Report 2021Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
According to the city classification by China Business Network in 2021, the table below sets out the GFA under
management in different city-tiers where our projects are mainly located as at 31 December 2021:
GFA under
management
’
000 sq.m. %
First-tier cities¹ 6,843 18.8
New first-tier cities² 21,762 59.7
Second-tier cities³ 7,340 20.2
Other cities 475 1.3
Total 36,420 100.0
Notes:
1) First-tier cities include Beijing, Shanghai, Guangzhou and Shenzhen.
2) New first-tier cities include Chengdu, Hangzhou, Chongqing, Wuhan, Xi
’
an, Suzhou, Tianjin, Nanjing, Changsha,
Zhengzhou, Dongguan, Qingdao, Hefei and Foshan.
3) Second-tier cities include Ningbo, Kunming, Wuxi, Fuzhou, Xiamen, Jinan, Wenzhou, Nanning, Guiyang, Nanchang,
Changzhou, Nantong, Jiaxing, Xuzhou, Lanzhou, Shaoxing and Weifang.
We seek growth with both quality and efficiency, and maintain a high charging rates. While we are growing rapidly,
we keep following the overall high-quality development standards by continuously optimizing our projects under
management. For the year ended 31 December 2021, our overall average property management fees was approximately
RMB4.64/sq.m./month.
In 2021, the Group has focused on the high-quality services based on the needs of owners, and therefore the loyalty
and satisfaction of owners have continued to improve. According to FG Consulting, an independent researcher focused
on real estate customer relationship, the overall satisfaction rate of the Group
’
s property services in 2020 was 89%. In
2021 we maintained this satisfaction rate, which was higher than the industry average. At the same time, the Group
adhered to the management concept of price matching quality, and raised the prices for some projects during the year
to improve the sustainable development capabilities of existing projects. In terms of third-party expansion, the Group
has made active efforts to enter first-tier, new first-tier and second-tier key cities with good development prospects to
develop diverse projects.
The revenue from the property management business of the Group is mainly collected under lump sum basis, accounting
for approximately 98.7% (2020: 98.5%) of the revenue from the property management business. The Group adopts the
lump sum basis for a majority of its projects to help improve service quality and operational efficiency.
Annual Report 2021
21
Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
Value-added services to non-property owners
Our revenue from value-added services to non-property owners for the year ended 31 December 2021 was
approximately RMB539.3 million, an increase of approximately 83.2% as compared to last year, accounting for
approximately 35.6% of the Group
’
s total revenue.
2021 2020
RMB
’
000 % RMB
’
000 %
Sales assistance services 234,429 43.5 228,446 77.6
Consultancy and other value-added services
to non-property owners 304,842 56.5 65,955 22.4
Total 539,271 100.0 294,401 100.0
Community value-added services
Our revenue from community value-added services for the year ended 31 December 2021 was approximately RMB153.0
million, an increase of approximately 85.9% year-on-year, accounting for approximately 10.1% of the Group
’
s total
revenue, which increased by approximately 1.4 percentage points as compared to the previous year.
2021 2020
RMB
’
000 % RMB
’
000 %
Community space operation services
1
111,278 72.7 61,101 74.3
Community living services 24,924 16.3 16,401 19.9
Platform services for interior decoration 11,223 7.3 3,802 4.6
Real estate brokerage services 5,600 3.7 1,024 1.2
Total 153,025 100.0 82,328 100.0
Note:
1 Includes gross rental income from investment properties operating leases.
FUTURE OUTLOOK
Future development plans
We will continue to focus on selecting major cities for our further growth and development. We will strive to develop
and enhance our systemic capability of providing premium services and to enhance our branding in the industry.
Moving towards lean management and technology empowerment, we aim to further expand our community value-
added services and promote our city operation services. We strive to become one of the most competitive upscale
comprehensive property management and city operation service providers in China.
Further expand and diversify our portfolio under management through various channels,
achieving economies of scale
We will continue to leverage the abundant land and project reserves held by Jinmao Group. We plan to actively secure
projects to be developed by Jinmao Group in the future to scale rapidly. Leveraging our premium services and brand, we
also seek to obtain more engagements from third-party property developers. We have established professional market
development teams at both our headquarters and regional subsidiaries and plan to further refine the organizational
structure of our business development team to encourage cooperation and improve the skills and professionalism of
business development team members.
22
Annual Report 2021Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
We plan to explore strategic investment and acquisition
opportunities with companies engaging in property
management and/or community operations, and we
also intend to invest in and acquisitions of companies
that provide community value-added services which are
complementary to ours.
We plan to diversify the types of properties under
our management and to expand our business scale
by obtaining more engagements from non-residential
properties, including commercial properties, government
and public facilities, educational institutions, airport
lounges, elderly-care facilities, hospitals, museums and
industrial parks.
Leveraging our status as a state-owned enterprise, we
seek to further expand our city operation services by
deepening our cooperation with local governments and
large companies in space management, public resources
operation and comprehensive services with multiple
use case scenarios including greening and cleaning,
infrastructure and facility maintenance, social governance,
public space operation, urban ecology management, social
and livelihood services, auxiliary public services and urban
planning. We plan to establish long-term relationships
with them by entering into strategic cooperation
agreements and setting up more joint ventures with them.
We also plan to expand our local community management
services by implementing a mediation mechanism in
connection with dispute resolutions for residents.
Continue to focus on select major cities with
high growth potential, optimize our premium
services and further improve our brand
recognition and influence
We intend to continue to grow our presence in major
cities with relatively high population density and per-
capita income. We plan to continue focusing on quality
residential communities in select major cities and to
increase the number of managed projects to capitalize on
our geographic focus and economies of scale.
We have also established a strong brand and reputation
among our customers, and will continue to adhere to
our service philosophy and seek to further enhance our
comprehensive system capabilities, including the
“
Home
( )
”
APP service system, quality control standardization
system, and employee training, assessment and
incentives system. By offering premium services to
create a pleasant and comfortable living experience, we
intend to reinforce and increase our brand influence
and customer satisfaction. We believe this will enhance
customer loyalty, attract new customers and allow us
to increase market share and explore additional value-
added services. Moreover, we strive to pursue additional
project opportunities for commercial properties and
public properties. We intend to cooperate with more
local government investment vehicles that are usually
not equipped with property management experience.
We expect these efforts to help us further expand our
business scale in those areas as an upscale comprehensive
property management and city operation service provider,
and further enhance our overall strengths, market
position, brand recognition and influence in the property
management industry.
Further develop a wide variety of distinguished
new value-added services to diversify our
sources of income and to increase our customer
loyalty
Value-added services are an increasingly important
aspect of property management services for modern
communities. In particular, the high-end communities in
our select major cities show strong demand for diversified
and distinguished new value-added services. We intend
to continue enhancing our service diversity and value
creation capability by deepening and broadening our
value-added services provided to property owners and
residents as well as property developers in order to
satisfy the diversifying needs of customers and to build a
personalized community ecosphere. We plan to introduce
services that satisfy both daily living needs, as well as
customized needs for parent-child bonding, healthcare,
education, recreation and real estate brokerage services,
thereby creating an ecosystem comprising individuals,
families and communities.
Leveraging our professional property management team
and our various service platforms, we plan to make life
more convenient for property owners and residents
and enhance their well-being by further developing
community value-added services. In order to optimize
the living experience and satisfaction of property owners
and residents, we intend to diversify our revenue stream
of community value-added services by expanding our
real estate brokerage services and car park space sales
agency services as well as community space operation
services such as the management of advertising spaces
and common facilities. We seek to increase the number
of service points in the residential communities under our
management and organize a series of marketing activities
to attract more property owners and residents so as to
expand the coverage of our real estate brokerage services.
Annual Report 2021
23
Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
Moreover, we will continue to enhance our existing
community living services such as interior decoration,
new retail and housekeeping and cleaning services as
well as expanding the coverage of our community living
services based on the feedback from property owners and
residents.
For property developers, we intend to provide full-lifecycle
value-added services to non-property owners addressing
their needs from preliminary consultancy for property
development to post-delivery management. Leveraging
our extensive customer base and our know-how and
experience in smart management, we intend to strengthen
our pre-delivery services and consultancy services provided
to the non-property owners and further expand our
business scale. In particular, we seek to customize and
expand our consultancy services to include consultation on
project planning, design and management, construction
management and marketing management. In addition, we
plan to improve our pre-delivery services by strengthening
our cleaning, security inspection, maintenance and
concierge reception provided at the property sales site, so
as to attract more collaboration with third-party property
developers. We believe the provision of such value-
added services to property developers will help us obtain
additional property management engagements.
Continue to enhance our technological
capabilities, thereby increasing service quality
and operational efficiency
Property management is a labor-intensive industry. In
light of the rapid expansion of our scale, we not only
have to develop sophisticated capability in managing
our high-quality services system, but also have to
continue to control costs and improve operational
efficiency. Meanwhile, continuous investment in
smart technology will remain crucial for the property
management industry. We therefore intend to continue
to enhance our standardized management system
and adhere to the approach of lean management.
We seek to ensure effective implementation of high-
quality business standards and satisfactory user
experience among customers, and to effectively identify
inefficient operations, minimize wastage and control
costs reasonably. We plan to upgrade the features
and functionalities of our data middle office, and to
strengthen our data analytics and application capabilities.
We plan to introduce features that allow us to predict
collection rates, expected costs and customer satisfaction
rates in connection with new mandates, which will offer
meaningful support and insight to our decision-making
processes.
We expect to enhance our capabilities in city operation
services. We intend to foster our investment and team
building in city operation sector, with a focus on the
application of IoT and AI technologies in different use
case scenarios. We aim to develop a centralized smart
city management platform that embraces urban cleaning,
energy management, landscape maintenance, facility
maintenance and government services. We also plan
to further invest in smart facilities and research and
development in management platforms in our existing city
operation projects to build a leading brand of smart city
operations.
We also intend to increase the use of technology to
enhance user experience and satisfaction, effectively
reduce the amount of manual work which is subject to
greater deviations in service quality, enhance operational
efficiency and results, and strengthen on-site quality
control. We also plan to leverage big data to analyze
customer preferences and offer more targeted services.
Continue to improve our talent training and
incentive mechanisms to support sustainable
and rapid growth of our business
We intend to maintain effective talent training and
incentive mechanisms to identify, select and cultivate
employees across our organization. Through systematic
training and development mechanisms, we plan to
nurture teams of competent employees at various levels.
We intend to formulate and continually adjust targeted
performance assessment and promotion mechanisms,
based on the development stage and the specific nature
of the business, with a view to promoting positive
competition internally. We will continue to stimulate
employee creativity and value by performance evaluation
and assessment system to achieve our performance
sharing culture. For key employees, we may provide
them with long-term incentive opportunities to ensure
the stability of talents. We will enhance the introduction
of professional talents through recruitment and referral
to maintain high-quality talent reserves for our business
development, in particular, our value-added services. We
will continue to build our human resources management
system to create a good corporate culture and working
atmosphere.
24
Annual Report 2021Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
FINANCIAL REVIEW
Revenue
Our Group
’
s revenue was generated from (i) property management services; (ii) value-added services to non-property
owners; and (iii) community value-added services.
The following table sets out the breakdown of our total revenue by business lines for the years ended 31 December
2021 and 2020 respectively:
2021 2020 Changes
RMB
’
000 % RMB
’
000 % %
Property management services 823,229 54.3 567,481 60.1 45.1
Value-added services to non-property owners 539,271 35.6 294,401 31.2 83.2
Community value-added services
(1)
153,025 10.1 82,328 8.7 85.9
Total 1,515,525 100.0 944,210 100.0 60.5
Note:
(1) Includes gross rental income from investment properties operating leases.
Revenue from property management services increased by approximately 45.1% to approximately RMB823.2 million in
2021 from approximately RMB567.5 million in 2020. This increase was mainly attributable to an increase in our GFA
under management, which increased to approximately 36.4 million sq.m. as of 31 December 2021 from approximately
17.7 million sq.m. as of 31 December 2020, as a result of our business expansion.
Revenue from value-added services to non-property owners increased by approximately 83.2% to approximately
RMB539.3 million in 2021 from approximately RMB294.4 million in 2020. The increase was primarily due to the increase
in revenue from the preliminary planning and design services and post-delivery services as we have expanded our service
offerings.
Revenue from community value-added services increased by approximately 85.9% to approximately RMB153.0 million
in 2021 from approximately RMB82.3 million in 2020. This increase was primarily due to (i) an increase in the number
of properties under our management as a result of our expansion of business scale, which increased to 175 as of
31 December 2021 from 97 as of 31 December 2020; and (ii) increased revenue from community space operation
services and community living services, as a result of the increased GFA under our management, which increased to
approximately 36.4 million sq.m. as of 31 December 2021 from approximately 17.7 million sq.m. as of 31 December
2020.
Cost of sales
Cost of sales increased by approximately 47.4% to approximately RMB1,045.5 million for the year ended 31 December
2021 from approximately RMB709.4 million for the year ended 31 December 2020. Such increase was in line with
our growth in revenue for the year and was primarily due to the increase in the number of properties under our
management.
Annual Report 2021
25
Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
Gross profit and gross profit margin
Gross profit increased by approximately 100.2% to approximately RMB470.0 million for the year ended 31 December
2021 from approximately RMB234.8 million for the year ended 31 December 2020. Our overall gross profit margin
increased to approximately 31.0% for the year ended 31 December 2021 from approximately 24.9% for the year ended
31 December 2020 primarily due to the contribution from our new value-added service offerings such as preliminary
planning and design services and post-delivery services which typically generate a higher profit margin.
Gross profit and gross profit margin of the Group by business lines were as follows:
2021 2020
Gross profit
Gross profit
margin Gross profit
Gross profit
margin
RMB
’
000 % RMB
’
000 %
Property management services 149,941 18.2 100,978 17.8
Value-added services to non-property owners 258,491 47.9 101,170 34.4
Community value-added services
(1)
61,602 40.3 32,641 39.6
Total 470,034 31.0 234,789 24.9
Note:
(1) Includes gross rental income from investment properties operating leases.
Gross profit margin for property management services increased slightly to approximately 18.2% for the year ended
31 December 2021 from approximately 17.8% for the year ended 31 December 2020, primarily attributable to our
enhanced economies of scale and improved cost-saving measures and operational efficiency.
Gross profit margin for value-added services to non-property owners increased to approximately 47.9% for the year
ended 31 December 2021 from approximately 34.4% for the year ended 31 December 2020 primarily due to the
expanded service offerings including preliminary planning and design services and post-delivery services, which typically
generate higher profit margins compared to other value added services we offered to the non-property owners.
Gross profit margin for community value-added services increased slightly to approximately 40.3% for the year ended
31 December 2021 from approximately 39.6% for the year ended 31 December 2020, primarily due to an increase in
revenue contribution from community space operation services which generally generate a higher gross profit margin as
we can utilize our existing resources from the provision of property management services and incur less direct cost, in
particular, staff cost.
Other income and gains
Other income and gains include (i) bank interest income; (ii) loan interest income; (iii) tax incentives on value-added tax;
(iv) government grants; and (v) others such as late fees charged to customers who failed to make timely payments. Our
other income and gains decreased by approximately RMB29.4 million or 39.3% from approximately RMB74.9 million
for the year ended 31 December 2020 to approximately RMB45.5 million for the year ended 31 December 2021. Such
decrease was mainly due to the decreased loan interest income as a subsidiary of China Jinmao repaid a loan extended
by us using the proceeds from the asset-based securities (the
“
ABS
”
) arrangement entered into by us in 2018.
26
Annual Report 2021Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
Selling and distribution expenses
Selling and distribution expenses increased by
approximately 716.7% to approximately RMB14.7 million
for the year ended 31 December 2021 from approximately
RMB1.8 million for the year ended 31 December 2020.
The significant increase was because (i) we incurred less
selling and distribution expenses in 2020 as a result of
the decreased selling and marketing activities during
the COVID-19 outbreak in 2020; and (ii) the number of
our selling distribution staff increased by approximately
364.3% from 14 as of 31 December 2020 to 65 as of
31 December 2021, which was in line with our increased
efforts to expand business into properties developed by
independent third parties starting from 2021.
Administrative expenses
Administrative expenses increased by approximately
55.2% to approximately RMB209.4 million for the year
ended 31 December 2021 from approximately RMB134.9
million for the year ended 31 December 2020. This
increase was mainly attributable to (i) an increase in staff
costs primarily as a result of our business expansion, and
(ii) an increase in our listing expenses of approximately
RMB16.0 million.
Finance costs
Finance costs decreased by approximately 47.5% to
approximately RMB33.7 million for the year ended 31
December 2021 from approximately RMB64.2 million
for the year ended 31 December 2020. This decrease
was primarily due to the decreased interest on the ABS
arrangement entered into by us in 2018 as we have repaid
the principal during the year ended 31 December 2021.
Income tax expenses
Income tax expenses increased by approximately 127.3%
to approximately RMB69.1 million for the year ended 31
December 2021 from approximately RMB30.4 million for
the year ended 31 December 2020. This increase was
primarily attributable to an increase in pre-tax profit to
approximately RMB248.1 million for the year ended 31
December 2021 from approximately RMB107.5 million for
the year ended 31 December 2020.
Profit for the year
As a result of the foregoing, our profit for the year
increased by approximately 132.2% to approximately
RMB179.0 million for the year ended 31 December 2021
from approximately RMB77.1 million for the year ended
31 December 2020 and net profit margin increased to
approximately 11.8% for the year ended 31 December
2021 from approximately 8.2% for the year ended 31
December 2020.
Property, plant and equipment
Property, plant and equipment mainly consists of
electronic equipment, leasehold improvements, and
furniture and office equipment. Property, plant and
equipment increased from approximately RMB33.6 million
as of 31 December 2020 to approximately RMB54.7
million as of 31 December 2021, primarily due to the
procurement of electronic equipment, office equipment
and IoT equipment for our business operations.
Investment properties
Our investment properties consist of car park spaces
owned by our wholly-owned subsidiary Nanjing Ninggao
International Property Consultancy Co., Ltd. Our
investment properties decreased from approximately
RMB10.6 million as of 31 December 2020 to
approximately RMB9.4 million as of 31 December 2021
mainly due to the decreased fair value of the car park
spaces as the remaining term of the lease agreement was
shortened over a period of time.
Right-of-use assets
Leases are recognized as a right-of-use asset and a
corresponding liability at the date at which the leased
asset is available for use by us. Assets arising from a
lease are initially measured at cost, less any accumulated
depreciation and any impairment losses, and adjusted
for any remeasurement of lease liabilities. The right-
of-use asset is depreciated over the shorter of the
estimated asset
’
s useful life and the lease term on a
straight-line basis. Our right-of-use assets increased from
approximately RMB16.0 million as of 31 December 2020
to approximately RMB32.5 million as of 31 December
2021, mainly due to the increased number of property
leases as a result of the increasing demand for employee
dormitories and office properties as we expanded our
business.
Annual Report 2021
27
Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
Prepayments, other receivables and
other assets
Prepayments, other receivables and other assets mainly
include (i) amounts due from related parties; (ii) deposits
of ABS arrangement; (iii) prepayments primarily in relation
to utility fees and lease payments; (iv) deposits placed for
contract performance, tender and bidding process and
leases; (v) advances to employees; (vi) payments on behalf
of residents and tenants; and (vii) others.
We had current portion of prepayments, other receivables
and other assets of approximately RMB644.2 million
and approximately RMB267.3 million as of 31 December
2020 and 2021, respectively. Such decrease was primarily
attributable to the settlement of the balances due from
related parties. Non-current portion of other receivables
and other assets decreased from approximately RMB941.6
million as of 31 December 2020 to approximately RMB2.7
million as of 31 December 2021 mainly attributable to
repayment of approximately RMB937.0 million due from
related parties.
Trade payables
Trade payables primarily represent our obligations to
pay for goods or services that have been acquired
in the ordinary course of business from suppliers.
The increase in trade payables to third parties from
approximately RMB111.3 million as of 31 December 2020
to approximately RMB166.5 million as of 31 December
2021 was primarily due to the expansion of our business,
reflecting an increase in the procurement of security
and cleaning services and facilities and equipment
maintenance services. Trade payables to related parties
were in relation to procurement of information technology
services, dining services and other goods and services
from related parties.
Intangible assets
Our intangible assets comprise software, information
technology infrastructure and other smart management
systems for properties under our management. Our
intangible assets decreased from approximately RMB7.1
million as of 31 December 2020 to approximately
RMB6.4 million as of 31 December 2021 mainly due to
amortization during the year.
Inventories
Our inventories mainly comprise consumables, spare
parts and general merchandise. The decrease from
approximately RMB5.2 million as of 31 December 2020 to
approximately RMB4.5 million as of 31 December 2021
was primarily attributable to the impairment of long-aged
inventory amounting to approximately RMB0.5 million.
Trade receivables
Trade receivables comprise receivables from property
management services, community space operation services
and sales assistance services. We typically do not grant
a credit term to individual customers for our property
management services and customers for our community
value-added services. We typically grant a credit term of
90 days to 180 days to property developers.
Our trade receivables from related parties are primarily
related to value-added services to non-property owners,
the balances of which increased from approximately
RMB129.1 million as of 31 December 2020 to
approximately RMB281.1 million as of 31 December
2021 along with the increase in revenue from our value-
added services to non-property owners. Our trade
receivables from third parties are primarily related to
property management fees and the balances of which
increased from approximately RMB78.2 million as of 31
December 2020 to approximately RMB139.2 million as
of 31 December 2021. This was mainly attributable to
an increase in our property management revenue as we
expanded our business with an increase in our GFA under
management during the year ended 31 December 2021.
28
Annual Report 2021Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
Other payables and accruals
Other payables and accruals represent (i) amounts due
to related parties; (ii) receipts on behalf of residents and
tenants; (iii) deposits and temporary receipts primarily
in relation to bidding and renovation; (iv) payroll and
welfare payables; (v) other tax payables, and (vi) other
payables relating to stored value cards that employees use
in cafeterias. Our other payables and accruals amounted
to approximately RMB629.8 million and RMB644.3
million as at 31 December 2021 and 31 December 2020,
respectively. The dividend payable included in non-current
other payables as of 31 December 2020 was reclassified to
amounts due to related parties in current other payables
as of 31 December 2021 according to the resolutions of
the board of directors of Jinmao Property on 23 November
2021.
Indebtedness
As at 31 December 2021, we had no outstanding
borrowings (31 December 2020: RMB1,081.0 million).
Our Group did not have any banking facilities as at
31 December 2021 and we had lease liabilities of
approximately RMB34.3 million as at 31 December 2021
(31 December 2020: RMB17.8 million).
Contingent liabilities
As at 31 December 2021, we did not have any
outstanding guarantees or other material contingent
liabilities.
Pledge of assets
As at 31 December 2021, none of the assets of our Group
was pledged.
Capital commitment and capital
expenditure
As at 31 December 2021, the Group did not have any
capital commitment.
The Group
’
s capital expenditure for the year ending 31
December 2022 is expected to be financed mainly by
proceeds from the Global Offering (as defined below) and
working capital generated from the operating activities of
the Group.
Liquidity and capital resources
In order to manage the Group
’
s cash, maintain a strong
and healthy liquidity and ensure that the Group is well
placed to take advantage of future growth opportunities,
the Group has adopted comprehensive treasury policies
and internal control measures to review and monitor its
financial resources and has maintained stable financial
condition and sufficient liquidity throughout.
As at 31 December 2021, the Group
’
s cash and cash
equivalents amounted to approximately RMB553.6 million,
representing an increase of approximately 104.4% as
compared with approximately RMB270.8 million as at 31
December 2020. This was primarily attributable to the
increased net cash flows from operating activities as a
result of our expansion of business scale. The Group
’
s
net cash flows from operating activities increased to
approximately RMB347.4 million for the year ended 31
December 2021 from approximately RMB136.2 million for
the year ended 31 December 2020.
As of 31 December 2021, the Group had no bank
borrowings (31 December 2020: RMB144.0 million of
current interest-bearing borrowing and approximately
RMB937.0 million of non-current interest-bearing
borrowing). The management believes that the Group
’
s
financial resources and future revenue will be sufficient
to support the current working capital requirement and
future expansion of the Group.
Annual Report 2021
29
Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
USE OF PROCEEDS FROM THE GLOBAL OFFERING
The Company was listed on the Main Board of the Stock Exchange on 10 March 2022 (the
“
Listing
”
) with the global
offering of ordinary shares of the Company, including a public offering in Hong Kong of 10,142,000 shares and an
international offering of 91,269,500 shares, in each case at a price of HK$8.14 per share (collectively the
“
Global
Offering
”
). On 1 April 2022, the international underwriters of the Global Offering partially exercised the over-
allotment option, as a result of which an aggregate of 2,777,500 shares were issued and allotted by the Company at
HK$8.14 per share. After deducting the underwriting fees and relevant expenses, net proceeds from the Global Offering
(including the number of shares issued and allotted pursuant to the partial exercise of over-allotment option) amounted
to approximately HK$781.9 million. Since the Listing on the Stock Exchange only took place on 10 March 2022 (the
“
Listing Date
”
), the net proceeds have not been used. Such proceeds will be applied in the manner consistent with
that in the prospectus of the Company dated 25 February 2022 (the
“
Prospectus
”
):
Usage
% of Total
Proceeds
Planned
allocation of
net proceeds
Utilized
net proceeds
up to
the date of
this report
Unutilized
net proceeds
up to
the date of
this report
Expected
timeline for
full utilization
of the balance
HK$ million
(approximately)
HK$ million
(approximately)
HK$ million
(approximately)
(A) Pursue selective strategic investment
and acquisition opportunities with
companies engaged in property
management, city operation services
and/or community operations and to
expand our business scale and solidify
our leading industry position.
55% 430.0 0 430.0 By the end
of 2023
(B) Upgrade our systems for smart
management services and for the
development of our smart communities
and smart city solutions, aiming to offer
a higher-quality living experience with
more convenience for our property
owners and residents and further
enhance cost efficiency for our property
management and city operation services.
22% 172.0 0 172.0 By the end
of 2024
(C) Develop our community value-added
services in an effort to diversify
our service offering and enhance
profitability.
13% 101.6 0 101.6 By the end
of 2024
(D) Working capital and general corporate
purpose.
10% 78.2 0 78.2 By the end
of 2024
The net proceeds is currently held in bank deposits and it is intended that it will be applied in the manner consistent
with the proposed allocations in the Prospectus. For further information, please refer to the section headed
“
Future
Plans and Use of Proceeds
”
in the Prospectus.
30
Annual Report 2021Jinmao Property Services Co., Limited
MANAGEMENT DISCUSSION AND ANALYSIS
EMPLOYEES AND REMUNERATION
POLICIES
As at 31 December 2021, the Group had 2,658 full-time
employees (as at 31 December 2020: 1,897 full-time
employees). For the year ended 31 December 2021, the
total staff costs were approximately RMB0.4 billion (2020:
approximately RMB0.3 billion).
The Group determines and regularly reviews remuneration
and benefits of its employees according to the profitability
of the Group, market practice and the relevant employee
’
s
performance. The Group has deepened the reform of
the human resource system and explored the possibility
of establishing remuneration systems for high-quality
personnel and corporate executives that are compatible
with competitive selection and recruitment. The Group
has implemented various types of motivation plan for
different levels of employees with reference to employee
performance and contributions. According to the relevant
regulations, the Group is required to pay social insurance
and housing fund on behalf of its employees.
The Group places a strong emphasis on recruiting
high-quality personnel and provides employees with
continuous training programmes and career development
opportunities. Due to the COVID-19 outbreak, the
Company organized online and onsite training on various
subjects in 2021. Such measures ensured the general
employees
’
ability in performing their duties and increased
the management level of management cadres at all
levels, thus provided timely and effective support for the
Company
’
s business development.
Annual Report 2021
31
Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Directors
Non-executive Directors
Mr. Jiang Nan, aged 48, is a non-executive Director and the chairman
of the Board. He was appointed as a non-executive Director in August
2021. He is mainly responsible for formulation of business strategies
and providing guidance for the overall development of our Group.
Mr. Jiang Nan graduated with a bachelor
’
s degree in finance from
China Institute of Finance ( ) (now known as School of
Banking and Finance of the University of International Business and
Economics ( )) in Beijing, the PRC in July
1995. He then obtained a master
’
s degree in finance from Central
University of Finance and Economics in September 2003. He obtained
the Accounting Qualification Certificate from the Ministry of Personnel
of the PRC in May 1999, and has been an affiliated member and an
associate member of the Association of International Accountants since
September 2008 and May 2020, respectively.
From July 1995, Mr. Jiang Nan worked in the finance department of
Sinochem Group, as a member of the overseas finance division from
July 1995 to September 1999 and as a deputy manager of the finance
division from September 1999 to August 2002. From August 2002 to
January 2006, he served as the manager of the finance department of
Sinochem Hong Kong (Group) Company Limited (
“
Sinochem Hong
Kong
”
), the offshore investment platform enterprise of Sinochem
Group, where he was responsible for the operation of overseas funds
of Sinochem Group.
Mr. Jiang Nan joined Jinmao Group in January 2006 as the chief
financial officer of China Jinmao. Mr. Jiang Nan served as an executive
director of China Jinmao from 2007 to 2011, and has since August
2015 been re-appointed as an executive director of China Jinmao.
He has been in charge of strategic management, accounting and
finance, budget assessment, capital market and investor relations of
Jinmao Group. He has also been concurrently serving as the general
manager of Jinmao Capital Holdings Limited since June 2019, where
he is responsible for its overall operation and management. He has also
served as a non-executive director of Jinmao (China) Hotel Investments
and Management Limited, a company whose share stapled units were
listed on the Stock Exchange prior to its privatization in October 2020
with the stock code before delisting of 6139, since March 2014.
Mr. Jiang Nan
32
Annual Report 2021Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Directors
Ms. He Yamin (with the former name of He Liyuan ( )) aged
50, is a non-executive Director. She was appointed as a non-executive
Director in August 2021. She is mainly responsible for formulation of
business strategies and providing guidance for the overall development
of our Group.
Ms. He Yamin obtained a bachelor
’
s degree in education majoring
in political education from Beijing Normal University ( )
in Beijing, the PRC in July 1994. She then completed a postgraduate
program in applied psychology also in Beijing Normal University in
October 2005.
Prior to joining our Group and Jinmao Group, Ms. He Yamin worked
in the Chinese People
’
s Liberation Army from September 1994 to July
1995, in the management bureau of the general staff department.
From August 1995 to August 1996, she worked in Hong Kong Wanguo
Trade City Company ( ). From September 1996
to September 1997, she worked in Beijing Personal Data Assistant
Electronics Group ( ). From September 1997 to
February 2005, she worked in Lenovo Group Ltd., a multinational
technology company whose shares are listed on the Stock Exchange
with the stock code of 992, in the human resources department. From
February 2005 to December 2010, she worked in the human resources
department of the Sinochem Group.
Ms. He Yamin joined Jinmao Group in December 2010, where she
served as the general manager of the human resources department of
China Jinmao up until September 2014, and has been serving as the
human resources director of China Jinmao since September 2014. Ms.
He Yamin was appointed as a director of Jinmao Property in February
2013.
Ms. He Yamin
Annual Report 2021
33
Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Ms. Qiao Xiaojie (with the former Chinese name of ), aged
47, is a non-executive Director. She was appointed as a non-executive
Director in August 2021. She is mainly responsible for formulation of
business strategies and providing guidance for the overall development
of our Group.
Ms. Qiao Xiaojie obtained a bachelor
’
s degree in accounting from
North China University of Technology ( ) in Beijing, the
PRC in July 1995. She then obtained a master
’
s degree in accounting
from Central University of Finance and Economics in December 2006.
She obtained the senior accountant qualification from Beijing Senior
Specialized Technique Qualification Evaluation Committee of the PRC
in February 2007, and has been a member of The Chinese Institute of
Certified Public Accountants ( ) since May 1999 and
a member of The Institute of Certified Management Accountants of the
Institute of Management Accountants United States of America since
September 2011.
Prior to joining our Group and Jinmao Group, Ms. Qiao Xiaojie worked
in Beijing Three Gorges Economic Development Group (
), a company which provides economic and technological
support to the development of the Three Gorges, as the accounting
head of the finance department, from July 1995 to August 1997.
From August 1997 to February 2008, she held accounting head and
deputy general manager positions in the finance department of China
Resources Land (Beijing) Company Ltd. ( ( ) ),
a real estate developer in the PRC.
Ms. Qiao Xiaojie joined Jinmao Group in February 2008, where
she served as the general manager of the financial management
department of China Jinmao up until January 2013. She then joined
Sinochem Group in January 2013, where she served as the deputy
general manager of the accounting management department from
January 2013 to February 2014, the deputy general manager in charge
of daily operations of the analysis and valuation department from
February 2014 to May 2015, the general manager of the analysis
and valuation department from May 2015 to December 2016 and
the deputy director of the strategy implementation department from
December 2016 to September 2017. She subsequently rejoined Jinmao
Group in September 2017, where she has been serving as the deputy
financial controller of China Jinmao.
Ms. Qiao Xiaojie
34
Annual Report 2021Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Directors
Executive Directors
Mr. Xie Wei, aged 48, is an executive Director and the chief executive
officer of our Company. He was appointed as an executive Director
in August 2021. He is mainly responsible for the daily operations,
formulation of the overall strategy, business planning and operation
decisions of our Group.
Mr. Xie Wei graduated with an Executive Master of Business
Administration (EMBA) from Nankai University ( ) in Tianjin, the
PRC in December 2012.
Prior to joining our Group and Jinmao Group, from 2001 to 2015, he
was a chairman of the board and CEO of Beijing Vanke Real Estate
Management Co., Ltd. ( ), a real estate
service provider in the PRC. Mr. Xie Wei joined Jinmao Group in July
2015 and served as a vice president of China Jinmao from October
2015 to March 2022 where he was responsible for customer relations
and property management business. He has concurrently served as a
director and the chairman of Jinmao Property since October 2015 and
the general manager of Jinmao Property since November 2016, where
he is responsible for the overall operation and management of property
management business. He was appointed as a director of Jinmao
(Shanghai) Property Management Co., Ltd. in April 2021.
Mr. Xie Wei has been serving as the vice chairman of the Beijing
Property Management Association ( ) since 2008,
and the executive director of China Property Management Institute (
) since April 2011 and then its deputy secretary-general
since April 2016.
Mr. Xie Wei
Annual Report 2021
35
Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Ms. Zhou Liye, aged 48, is an executive Director and the chief
financial officer of our Company. She was appointed as an executive
Director in August 2021. She is mainly responsible for the overall
financial and cost management, internal audit, tax planning and capital
market-related matters of our Group.
Ms. Zhou Liye obtained a post-graduate master
’
s degree in accounting
from Central University of Finance and Economics ( ) in
Beijing, the PRC in March 2001. She then obtained a post-graduate
doctoral degree in accounting also from Central University of Finance
and Economics in June 2008. She has been a member (and currently
a non-practicing member) of The Chinese Institute of Certified Public
Accountants ( ) since August 2002, and obtained
the senior accountant qualification from the Beijing Advanced
Professional and Technical Qualification Evaluation Committee (
) in February 2008. Ms. Zhou Liye has
been a member of the first expert committee of the China Real Estate
Finance Association ( ) since January
2020, and the vice chairman of the financial professional committee of
the China Real Estate Association ( )
since April 2018.
From April 2001 to October 2006, Ms. Zhou Liye worked in Sinochem
Fertilizer Company Limited ( ), a company principally
engaged in fertilizer production and trading in the PRC, in the finance
department. From November 2006 to February 2008, she worked in
Sinochem Group in the accounting management department.
Ms. Zhou Liye joined Jinmao Group in April 2008. From April 2008
to September 2016, she successively served in the capital market
department of China Jinmao as deputy general manager, general
manager and capital market director. From September 2016 to May
2021, she successively served as general manager of JM Capital Limited
( ) and deputy general manager of Jinmao Capital
Holdings Limited ( ). Ms. Zhou Liye joined our
Group in May 2021 as the financial controller of Jinmao Property.
Ms. Zhou Liye
36
Annual Report 2021Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Directors
Independent Non-executive Directors
Dr. Chen Jieping, aged 68, is an independent non-executive Director
and his appointment took effect from the Listing Date. He is mainly
responsible for providing independent advice on the operation and
management of our Group.
Dr. Chen Jieping obtained a bachelor of science majoring in hotel and
restaurant management and a master of hospitality management from
the University of Houston in Texas, the United States in August 1990.
He then obtained a master of business administration and a doctoral
degree in business administration also from the University of Houston
in May 1992 and August 1995, respectively.
Dr. Chen Jieping has over 20 years of experience in accounting. From
September 1995 to August 2008, he was a faculty member of the
Department of Accountancy at the City University of Hong Kong, and
between November 2005 and August 2008 he served as the Head of
the department. He was a professor of accounting at China Europe
International Business School from August 2008 to December 2018 and
is currently an emeritus professor.
Dr. Chen Jieping has served as an independent non-executive director
in Huafa Property Services Group Company Limited (a company
listed on the Stock Exchange with the stock code of 982) and Saurer
Intelligent Technology Co. Ltd. (a company listed on the Shanghai
Stock Exchange with the stock code of 600545), since July 2014
and September 2017, respectively. He also served as an independent
non-executive director in each of Shenzhen Worldunion Properties
Consultancy Incorporated (a company listed on the Shenzhen Stock
Exchange with the stock code of 2285) from September 2013 to
October 2019, Xinjiang La Chapelle Fashion Co., Ltd. (formerly known
as Shanghai La Chapelle Fashion Co., Ltd., a company listed on the
Stock Exchange with the stock code of 6116 and on the Shanghai
Stock Exchange with the stock code of 603157) from April 2016 to
October 2019, and Jinmao (China) Hotel Investments and Management
Limited (a company whose share stapled units were listed on the Stock
Exchange prior to its privatization in October 2020 with the stock code
before delisting of 6139) from March 2014 to October 2020.
Dr. Chen Jieping
Annual Report 2021
37
Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Dr. Han Jian, aged 48, is an independent non-executive Director
and her appointment took effect from the Listing Date. She is mainly
responsible for providing independent advice on the operation and
management of our Group.
Dr. Han Jian obtained a bachelor
’
s degree in English language and
literature from Renmin University of China ( ) in Beijing,
the PRC in July 1995. She then obtained the degree of doctor of
philosophy majoring in human resources management from the School
of Industrial and Labor Relations of Cornell University in New York
State, the United States in January 2005.
Dr. Han Jian has been a Professor of Management at China Europe
International Business School since 2008. Dr. Han Jian has been an
independent non-executive director of Midea Group Co., Ltd. (
a company listed on the Shenzhen Stock Exchange
with the stock code of 333), since September 2018. She also served
as an external director of Shenzhen Jiang & Associates Creative Design
Co., Ltd. ( , a company listed on the
Shenzhen Stock Exchange with the stock code of 300668) from June
2015 to June 2018.
Dr. Han Jian
38
Annual Report 2021Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Directors
Mr. Sincere Wong, aged 57, is an independent non-executive Director
and his appointment took effect from the Listing Date. He is mainly
responsible for providing independent advice on the operation and
management of our Group.
Mr. Sincere Wong received his bachelor
’
s degree in social science from
The Chinese University of Hong Kong in December 1986. He passed
the Common Professional Examination at Wolverhampton Polytechnic
(now known as University of Wolverhampton) in the United Kingdom
in July 1990, and the Solicitors
’
Final Examination of the Law Society
of England and Wales with first class honours in October 1991. He
was then admitted as a solicitor of the High Court of Hong Kong in
October 1993 and a solicitor of the Supreme Court of England & Wales
in February 1994.
From September 1996 to January 2005, Mr. Sincere Wong served as
an in-house legal counsel of Hutchison Whampoa Group (
), a multinational conglomerate engaging mainly in ports and
related services, property and hotels, retail, infrastructure, energy and
telecommunications, where he was involved in cross-border acquisitions
and day-to-day commercial transactions of a container terminal
operator. From February 2005 to November 2006, he served as an
in-house legal counsel of China Resources Enterprise, Limited (now
known as China Resources Beer (Holdings) Company Limited, whose
shares are listed on the Stock Exchange with the stock code of 291 and
whose business focus is on the manufacturing, sales and distribution of
beer products). From November 2006 to June 2010, he served as the
chief legal officer of Shui On Construction and Materials Limited (now
known as SOCAM Development Limited, whose shares are listed on the
Stock Exchange with the stock code of 983 and whose business focus
is on construction and property businesses in the PRC, Hong Kong and
Macau). From July 2010 to May 2011, he served as the vice president
of the legal department and company secretary of Sateri Holdings
Limited (a global specialty cellulose producer subsequently renamed
as Bracell Limited, whose shares were listed on the Stock Exchange
with the stock code of 1768 prior to its privatization and delisting in
October 2016).
From August 2011 to April 2016, he worked at the Listing Department
of Hong Kong Exchanges and Clearing Limited, and he served as a
vice president at the time of his departure, primarily responsible for
reviewing IPO applications and making recommendations to the Listing
Committee. In May 2016, he became the founding partner of Wong
Heung Sum & Lawyers ( ) (formerly known as Sincere
Wong & Co. ( )). Mr. Sincere Wong has served as
an independent non-executive director of Bank of Gansu Co., Ltd (a
company listed on the Stock Exchange with the stock code of 2139), U
Banquet Group Holding Limited (now known as Net-a-Go Technology
Company Limited, a company listed on the Stock Exchange with the
stock code of 1483) and Fulu Holdings Limited (a company listed on
the Stock Exchange with the stock code of 2101), since August 2017,
September 2018, and August 2020, respectively. From January 2019 to
March 2020, he also served as a non-executive director of MOS House
Group Limited (a retailer and supplier of overseas manufactured tiles in
Hong Kong and Macau, whose shares are listed on the Stock Exchange
with the stock code of 1653).
Mr. Sincere Wong
Annual Report 2021
39
Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Mr. Li Yulong, aged 35, has been a deputy general
manager of Jinmao Property since May 2016 and a vice
president of our Company since August 2021. He is
primarily responsible for the business innovation, strategic
planning, technology development, customer research and
quality management of our Group.
Mr. Li Yulong graduated with bachelor
’
s degrees in
computer science and technology and agricultural and
forestry economics from Shanxi Agricultural University
( ) in Shanxi, the PRC in June 2009 and July
2009, respectively. He then obtained a post-graduate
master of business administration from Peking University
( ) in Beijing, the PRC in July 2021. He obtained
the intermediate business management economist
qualification from Beijing Municipal Human Resources and
Social Security Bureau of the PRC (
) in November 2014.
Prior to joining our Group, Mr. Li Yulong served as the
director of the cooperation and development department
of Beijing Vanke Real Estate Service Co., Ltd. (
), a property management company
in the PRC, from July 2009 to May 2016, where he was
responsible for market expansion, investment mergers and
acquisitions and equity cooperation.
Mr. Li Yulong joined our Group in May 2016, and has
been serving in his current position in Jinmao Property
since.
Senior Management
Mr. Wang Yongli, aged 58, has been a deputy general
manager of Jinmao Property since May 2015 and a vice
president of our Company since August 2021. He is
primarily responsible for the engineering management,
the health, safety and environment management, and
smart community of our Group.
Mr. Wang Yongli graduated from Beijing Finance
Management Cadre School ( )
in Beijing, the PRC in July 2005, majoring in corporate
management.
Prior to joining our Group, Mr. Wang Yongli worked in
Beijing Xiangshan Hotel ( ), as the manager
of the front office department, from March 1979 to
November 2000. From November 2000 to November
2001, he served as the deputy general manager of
Haihang Hotel ( ) under Huahai Real Estate
Development Company ( ), where
he was responsible for the management of the daily
operations of Haihang Hotel.
Mr. Wang Yongli joined our Group in February 2003,
where he held various positions in Jinmao Property
such as project manager, director of the client relations
department and deputy general manager, prior to his
promotion to his current position.
Senior Management
40
Annual Report 2021Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Senior Management
Mr. Wei Dong, aged 53, has been a deputy general
manager of Jinmao Property since May 2017 and a
vice president of our Company since August 2021. He
is primarily responsible for the administrative affairs
management of our Group.
Mr. Wei Dong graduated with a diploma in economics
and trade from the Party School of Beijing Municipal
Committee of the Chinese Communist Party (
) in Beijing, the PRC in July 1999. He then
completed a training program in business management
from Capital University of Economics and Business (
) in Beijing, the PRC in August 2006.
Prior to joining our Group, Mr. Wei Dong worked in The
Great Wall Sheraton Hotel Beijing ( ),
as the assistant manager of the housekeeping department,
from September 1987 to December 2002. From December
2002 to June 2006, he worked in Scitech Hotel (
), as the manager of the housekeeping department.
From August 2006 to August 2011, he served as the
operations director of Wangfujing Hotel Management Co.,
Ltd. ( ), a hospitality company in
the PRC. From August 2011 to August 2013, he worked
in Beijing Eastern Garden International Conference Co.,
Ltd. ( ), a subsidiary
of Sinochem Group engaged in the operation of the
accommodation and other facilities within Eastern Garden,
a hotel and conference center, as the manager of the
room division department.
Mr. Wei Dong joined our Group in August 2013, where
he successively served as the assistant to the general
manager and deputy general manager in Jinmao
Property taking charge of health, safety and environment
management and smart community management, prior to
his promotion to his current position.
Annual Report 2021
41
Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Mr. Cai Yun, aged 43, has been a deputy general
manager of Jinmao Property since January 2020 and a
vice president of our Company since August 2021. He is
primarily responsible for the operation and management
of the business of our Group in Shanghai, Nanjing
and Changsha regions and office building business
management.
Mr. Cai Yun graduated with a bachelor
’
s degree in
modern building electronics ( ) from Shanghai
University of Engineering Science ( ) in
Shanghai, the PRC in July 2001. He then obtained a post-
graduate master of business administration from Shanghai
International Studies University ( ) in
Shanghai, the PRC in June 2017.
Prior to joining our Group, from August 2001 to April
2003, Mr. Cai Yun served as the deputy project manager
of the project department of Cornell Properties Services
(Shanghai) Co., Ltd. ( ( ) ),
a property management company in the PRC, where
he assisted the project manager in the operation and
management of property management projects. From
April 2003 to May 2004, he served as the deputy project
manager of the project department of Shanghai Lianyang
Gangli Property Management Co., Ltd. (
), a property management company
in the PRC, where he was responsible for the operation
and management of property management projects.
From May 2004 to May 2005, he served as the project
officer of the engineering department of Hutchison Estate
Service & Agency (Shanghai) Limited ( ( )
) (now known as Cayley Property Management
(Shanghai) Co., Ltd. ( ( ) )), a
property management company in the PRC, where he
was responsible for the engineering management of
properties. From May 2005 to May 2006, he served as the
deputy project manager of the engineering department
of Shanghai Shimao Real Estate Co., Ltd. (
), a real estate company in the PRC, where he
was responsible for the management of the engineering
business segment of the company. From May 2006 to
November 2006, he worked in Savills Property Services
(Shanghai) Company Limited (
( ) ), an integrated property services provider
in the PRC, as the engineering manager. From November
2006 to June 2010, he worked in Shanghai China
Merchants Property Management Co., Ltd. (
), a property management company
in the PRC, as the engineering manager of the quality
management department. From August 2010 to June
2013, he worked in Cheung Kong Holdings (Shanghai)
Enterprises Management Company Limited (
( ) ), a property management and
consultancy company in the PRC, as the engineering
manager of the property department. From June 2013
to December 2016, he served as the assistant general
manager of Shanghai Vanke Real Estate Service Co., Ltd.
( ), a property management
company and property services provider in the PRC,
as well as the general manager of the commercial and
office management centre where he was responsible for
the operation and management of the non-residential
business.
Mr. Cai Yun joined our Group in December 2016, where
he held various positions in Jinmao Property such as
regional general manager being responsible for the overall
operation and management of the Shanghai region, and
assistant to general manager and deputy general manager
being responsible for the operation and management of
business in the Shanghai, Nanjing and Changsha regions,
prior to his promotion to his current position. Since
April 2021, he has also served as a director of Jinmao
(Shanghai) Property Management Co., Ltd. where he is
responsible for its overall operation and management.
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Annual Report 2021Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Senior Management
management. From April 2016 to September 2019, he
held executive director and investment director positions
of CMIG Futurelife Holdings Group Company Limited (
), a community value-added
service provider and resource integrator in the property
management industry which is subordinate to China
Minsheng Investment Group in the PRC, where he was
responsible for investment mergers and acquisitions of
property companies and community value-added project
investment. From September 2019 to March 2021, he
worked in Sichuan Languang Justbon Services Group Co.,
Ltd. ( ), a property
management service provider in the PRC whose shares are
listed on the Stock Exchange with the stock code of 2606,
as the general manager of the investment development
centre, where he was responsible for investment mergers
and acquisitions of property companies and market
expansion.
Mr. Zhan Yu joined our Group in March 2021, and has
been serving in his current position in Jinmao Property
since.
Mr. Zhan Yu, aged 39, has been a deputy general
manager of Jinmao Property since March 2021 and a
vice president of our Company since August 2021. He
is primarily responsible for the investment and market
development of our Group.
Mr. Zhan Yu graduated with a bachelor
’
s degree in law
from North China University of Technology in January
2004. He then obtained a post-graduate master
’
s degree
in economic law from Beijing Jiaotong University (
) in Beijing, the PRC in July 2007. Prior to joining
our Group, Mr. Zhan Yu worked in Shanxi Securities
Co., Ltd. ( ), a securities company
in the PRC whose shares are listed on the Shenzhen
Stock Exchange with the stock code of 002500, in the
office of the board of directors, from July 2007 to May
2012, where he was responsible for pushing forward the
company
’
s listing and its corporate governance. From May
2012 to April 2016, he worked as the general manager
of the investment department in Shanzheng Investment
Co., Ltd. ( ), a company engaging
in investment and asset management in the PRC, where
he was responsible for equity investment and fund
Annual Report 2021
43
Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Ms. Zhao Meihua, aged 43, has been the assistant to the
general manager of Jinmao Property since June 2015 and
an assistant to president of our Company since August
2021. She is primarily responsible for the human resource
management of our Group, as well as the operation and
management of the business of our Group in Beijing,
Qingdao, Chongqing, Guangzhou and Fuzhou regions.
Ms. Zhao Meihua obtained a bachelor
’
s degree in
economics, majoring in corporate management from
Renmin University of China ( ) in Beijing,
the PRC in July 1999. She then obtained a post-graduate
master
’
s degree in management also from Renmin
University of China in January 2010. She obtained the
intermediate human resources management economist
qualification from Beijing Municipal Human Resources
and Social Security Bureau of the PRC in November 2010,
and the level 1 corporate human resource management
qualification and the level 1 corporate trainer qualification
from Vocational Skills Appraisal Centre of Human
Resources and Social Security Bureau of the PRC (
) in March 2011
and December 2013, respectively. She also obtained the
senior economist qualification from Sinochem Holdings
Corporation Ltd. Professional and Technical Position
Qualification Evaluation Committee of the PRC in March
2022.
Prior to joining our Group and Jinmao Group, from
July 1999 to July 2002, she worked in Beijing Yanlong
Consulting Co., Ltd. ( ), an
information and corporate management consultancy
and talent development company in the PRC, as the
administration and human resources manager of the
administration department. From July 2002 to October
2004, she served as an assistant consultant in Guangzhou
Zhiren Consulting Service Co., Ltd., Beijing Branch (
), a corporate management and
human resources consultancy company in the PRC, where
she was responsible for human resources consultancy.
From November 2004 to September 2005, she worked in
Jinyindao (Beijing) Network Technology Co., Ltd. (
( ) ), an e-commerce company in
the PRC, as the manager of human resources department.
From October 2005 to December 2006, she worked in
Wangfujing Hotel Management Co., Ltd., as the assistant
to the manager of the human resources department.
From December 2006 to March 2008, she worked in
Xinda Huawang Communication Technology Co., Ltd.
( ), as the manager of the
human resources department. In April 2008, she rejoined
Wangfujing Hotel Management Co., Ltd., as the director
of the human resources department, up until February
2013.
Ms. Zhao Meihua joined Jinmao Group in February 2013,
where she served as the senior manager of the human
resources department of China Jinmao up until June 2015.
She then joined our Group in June 2015, and has been
serving in her current position in Jinmao Property since.
44
Annual Report 2021Jinmao Property Services Co., Limited
DIRECTORS AND SENIOR MANAGEMENT
Senior Management
COMPANY SECRETARY
Ms. Ho Wing Tsz Wendy is the company secretary of
our Company and her appointment took effect from the
Listing Date. She is also an executive director of corporate
services division of Tricor Services Limited, a global
professional services provider specializing in integrated
business, corporate and investor services.
Ms. Ho Wing Tsz Wendy has over 25 years of experience
in the corporate secretarial field and has been providing
professional corporate services to Hong Kong listed
companies as well as multinational, private and offshore
companies. She is currently the company secretary or
joint company secretary of six listed companies on the
Stock Exchange, namely, Wynn Macau, Limited (stock
code: 1128), Bank of Chongqing Co., Ltd. (stock code:
1963), China Everbright Water Limited (stock code: 1857),
China Merchants Bank Co., Ltd. (stock code: 3968), Brii
Biosciences Limited (stock code: 2137) and Angelalign
Technology Inc. (stock code: 6699).
Ms. Ho Wing Tsz Wendy is a Chartered Secretary, a
Chartered Governance Professional and a fellow of
both The Hong Kong Chartered Governance Institute
(
“
HKCGI
”
) and The Chartered Governance Institute
(formerly known as The Institute of Chartered Secretaries
and Administrators in the United Kingdom). She is a
Council Member of HKCGI. She has obtained a master of
business administration from The Hong Kong Polytechnic
University in September 2019.
Mr. Yang Hexing, aged 43, has been the vice president
of the Company since March 2022. He is primarily
responsible for the operation and management of the
Group
’
s community value-added business.
Mr. Yang Hexing graduated from Xidian University (
) in Xi
’
an, China in July 2001 with a bachelor
’
s
degree in industrial automation. Later, he obtained a
master
’
s degree in Business Administration from Beijing
Institute of Technology ( ) in July 2011.
Prior to joining our Group, from September 2004 to
December 2015, Mr. Yang Hexing served as the director
of the sales and commerce department of Lenovo (Beijing)
Co., Ltd. ( ), a diversified development
group in China
’
s information industry, responsible for
the sales management of Lenovo
’
s northern and western
regions, the order center management in China and the
operation management of e-commerce strategic projects.
From December 2015 to December 2018, he served as the
general manager of the home decoration, home repair
and cleaning service department of Lianjia Ziru Life Service
Co., Ltd. ( ), a Chinese housing
brokerage service management company, responsible
for the operation and management of decoration
configuration, maintenance, cleaning and other life
service businesses. From February 2019 to February 2022,
he served as the general manager of home community
life service department in Longfor Smart Service Group
Co., Ltd. ( ), a Chinese
property management service provider, responsible for
the operation and management of platform services for
interior decoration business.
Annual Report 2021
45
Jinmao Property Services Co., Limited
CORPORATE GOVERNANCE REPORT
The Board is pleased to present the corporate governance
report of the Company for the year ended 31 December
2021.
CORPORATE GOVERNANCE PRACTICES
Commitment to corporate governance
Since its establishment, the Company has been committed
to enhancing the level of its corporate governance.
The Company has adopted the Corporate Governance
Code as set out in Appendix 14 to the Listing Rules (the
“
Corporate Governance Code
”
) as its own code of
corporate governance. The principles of the Company
’
s
corporate governance are to promote effective internal
control measures and to enhance the transparency and
accountability of the Board to all the shareholders.
The Company will continue to improve its corporate
governance practices, focusing on maintenance and
enhancement of the management quality of the Board,
internal control and high transparency to shareholders,
so as to increase the confidence of shareholders in the
Company. The Company believes that good corporate
governance is crucial to maintaining its long-term healthy
and sustainable development and is vital for the interests
of its shareholders.
Compliance with the Corporate
Governance Code
As the Company was not a listed company during the year
ended 31 December 2021, the Corporate Governance
Code was not applicable to the Company during that
period, but has been applicable to it since the Listing
Date. The Board has reviewed the Company
’
s corporate
governance practices and is satisfied that the Company
has been in compliance with code provisions set out in the
Corporate Governance Code during the period between
the Listing Date and the date of this report.
DIRECTORS
’
SECURITIES
TRANSACTIONS
The Company has adopted the Model Code for Securities
Transactions by Director of Listed Issuers as set out in
Appendix 10 to the Listing Rules (the
“
Model Code
”
) as
its own code of conduct regarding Directors
’
dealings in
the securities of the Company. As the Company
’
s shares
were not listed on the Stock Exchange during the year
ended 31 December 2021, related rules under the Model
Code that Directors shall observe do not apply to the
Company for the year ended 31 December 2021. The
Company has made specific enquiry to all Directors and
all Directors have confirmed that they have complied with
the Model Code since the Listing Date.
The Company has also established written guidelines for
securities transactions by employees who are likely to be
in possession of inside information of the Company on
terms no less exacting than the Model Code. No incident
of non-compliance with such guidelines by relevant
employees has been noted by the Company.
THE BOARD
The Board is accountable to the shareholders and is
responsible for the Group
’
s overall strategy, internal
control and risk management system. In order to fulfil its
responsibilities, the Board has established and adhered
to explicit operating policies and procedures, reporting
hierarchy and delegated authority. The management is
authorised to handle the daily operations of the Group.
Responsibilities of the Board
The Board is responsible for managing the overall business
of the Company and overseeing the functions performed
by the subordinate special committees, which mainly
include:
• management and monitoring of the Group
’
s assets,
liabilities, revenues and expenditures as well as
proposing changes in areas critical to the Group
’
s
performance;
• financial and operational performance – through
overall strategic planning, the implementation and
maintenance of the effective financial management
system and the improvement of the performance-
driven operational monitoring system;
• management of relationship with stakeholders of
the Company – through frequent communication
with partners, governments, customers and other
parties who have legal interests in the business of
the Company;
46
Annual Report 2021Jinmao Property Services Co., Limited
CORPORATE GOVERNANCE REPORT
• risk management – continuous risk management
through review of the reports from the Risk
Management and Audit Department to identify,
evaluate and appropriately manage the risks faced
by the Company; and
• corporate governance – development and review of
the Company
’
s corporate governance policies and
practices; review and monitoring of the training and
continuous professional development of Directors
and senior management; review and monitoring of
the Company
’
s policies and practices in relation to
compliance with laws and regulatory requirements;
formulation, review and monitoring of the code
of conduct for employees and Directors; as well
as review of the Company
’
s compliance with the
Corporate Governance Code and disclosure in the
Corporate Governance Report.
Board Diversity Policy
We have adopted the board diversity policy (the
“
Board
Diversity Policy
”
) which sets out the objective and
approach to achieve and maintain diversity on our Board
in order to enhance the effectiveness of our Board. The
Board Diversity Policy provides that our Company should
endeavour to ensure that our Board members have the
appropriate balance of skills, experience and diversity of
perspectives that are required to support the execution
of our business strategies. Pursuant to the Board Diversity
Policy, we seek to achieve Board diversity through
the consideration of a number of factors, including
but not limited to talent, skills, gender, age, cultural
and educational background, ethnicity, professional
experience, independence, knowledge and length of
service. Our Remuneration and Nomination Committee
is delegated by our Board to be responsible for the
compliance with relevant code governing board diversity
under the Corporate Governance Code. After Listing, our
Remuneration and Nomination Committee will review the
Board Diversity Policy and its implementation from time
to time to ensure its continued effectiveness and we will
disclose in our corporate governance report about the
implementation of the Board Diversity Policy on an annual
basis.
Our Board comprises eight members, including two
executive Directors, three non-executive Directors and
three independent non-executive Directors. Our Directors
have a balanced mix of experiences, including overall
management and strategic development, business and risk
management, and finance and accounting experiences.
Our Board has a wide range of age, ranging from 47 to
68 years old. Furthermore, we recognize the particular
importance of gender diversity with the presence of four
female Directors out of a total of eight Board members.
We have taken and will continue to take steps to promote
and enhance gender diversity at all levels of our Company,
including but without limitation at our Board and senior
management levels. After due consideration, our Board
believes that based on the meritocracy of our Directors,
the composition of our Board satisfies the Board Diversity
Policy.
The composition of the Board is as follows:
Executive Directors:
Mr. Xie Wei
Ms. Zhou Liye
Non-executive Directors:
Mr. Jiang Nan (Chairman)
Ms. He Yamin
Ms. Qiao Xiaojie
Independent Non-executive Directors:
Dr. Chen Jieping
Dr. Han Jian
Mr. Sincere Wong
Nomination Procedures
The Company has a nomination procedure for election
of Directors in place, which provides guidance to the
Board on nomination and appointment of Directors
of the Company. In assessing the suitability and the
potential contribution to the Board of a proposed
candidate, the Remuneration and Nomination Committee
may make reference to certain selection criteria, such
as reputation for integrity, professional qualifications
and skills, accomplishment and experience in the
industry, commitment and relevant contribution, with
the Company
’
s Board Diversity Policy in mind, and take
into account the strategic and commercial challenges
and opportunities faced by the Company and the skills
and expertise needed by the Company in the future. The
Remuneration and Nomination Committee will report its
findings and make recommendations to the Board on the
appointment of appropriate candidate for directorship
for decision and succession planning. The ultimate
responsibility for selection and appointment of Directors
rests with the entire Board.
Annual Report 2021
47
Jinmao Property Services Co., Limited
CORPORATE GOVERNANCE REPORT
Board Meetings
The Company adopts the practice of holding Board
meetings regularly, at least four times a year either in
person or through electronic means of communication
and at approximately quarterly intervals. Notices of not
less than fourteen days are given for all regular Board
meetings to provide all Directors with an opportunity
to attend and include matters in the agenda for regular
Board meetings.
For other Board meetings and Board committees meetings,
reasonable notice is generally given. Minutes of meetings
are kept by the company secretary of the Company with
copies circulated to all Directors for information and
records.
The Company was not listed on the Stock Exchange
during the year ended 31 December 2021. Since the
Listing Date and up to the date of this report, one Board
meeting was held on 25 March 2022. All members of the
Board attended such meeting to approve, among other
things, the annual results of the Group for the year ended
31 December 2021.
Chairman and Chief Executive Officer
The Company fully supports the division of responsibility
between the Chairman of the Board and the Chief
Executive Officer to ensure a balance of power and
authority. Their respective responsibilities are clearly
defined. The Chairman provides leadership and is
responsible for the effective functioning of the Board in
accordance with good corporate governance practice.
The Chief Executive Officer focuses on implementing
objectives, policies and strategies approved and delegated
by the Board. As at the date of this report, the posts of
Chairman and Chief Executive Officer of the Company
were held by Mr. Jiang Nan and Mr. Xie Wei, respectively,
and there is a clear division of power and responsibility
between them.
Independent Non-executive Directors
Since the Listing Date and up to the date of this report,
the Board at all times met the requirements of the
Listing Rules relating to the appointment of at least three
independent non-executive Directors representing no less
than one-third of the Board with one of whom possessing
appropriate professional qualifications or accounting or
related financial management expertise.
Supply of and Access to Information and
Resource
Written procedures are in place for Directors to seek, at
the Company
’
s expenses, independent professional advice
in performing their duties. The Company has arranged
appropriate insurance to cover the liabilities of the
Directors arising from corporate activities. The insurance
coverage is reviewed on an annual basis. The management
provides the Board and its committees with adequate,
complete and reliable information in a timely manner to
enable them to make informed decisions.
Continuing Development
Directors shall keep abreast of the responsibilities as
a Director and of the conduct, business activities and
development of the Company.
Every newly appointed Director of the Company
has received a comprehensive, formal and tailored
induction on the first occasion of his appointment, and
subsequently such briefing and professional development
are also available as necessary, to ensure that he/she has
a proper understanding of the operations and business
of the Company and that he/she is fully aware of his/her
responsibilities under statute and common law, the Listing
Rules, applicable legal requirements and other regulatory
requirements and the business and governance policies of
the Company.
Pursuant to the applicable code provisions as set out in
the Corporate Governance Code, all Directors should
participate in continuous professional development to
develop and refresh their knowledge and skills. This is
to ensure that their contribution to the Board remains
informed and relevant. During the year ended 31
December 2021 and prior to the Listing, all Directors,
namely, the executive Directors Mr. Xie Wei and Ms. Zhou
Liye, the non-executive Directors Mr. Jiang Nan, Ms. He
Yamin and Ms. Qiao Xiaojie, and the independent non-
executive Directors Dr. Chen Jieping, Dr. Han Jian and Mr.
Sincere Wong have participated in continuous professional
development by attending training course or external
seminars to develop and refresh their knowledge and skills
in relation to their contribution to the Board.
48
Annual Report 2021Jinmao Property Services Co., Limited
CORPORATE GOVERNANCE REPORT
The following lists out the membership and responsibilities
of the Audit Committee, the Remuneration and
Nomination Committee and the Strategy and Investment
Committee.
Audit Committee
The Board has established the Audit Committee with
effect from the Listing Date.
Membership and Responsibilities
The Audit Committee currently consists of two
independent non-executive Directors, Dr. Chen
Jieping (chairman of the Audit Committee) and Mr.
Sincere Wong, and one non-executive Director, Ms.
Qiao Xiaojie. Dr. Chen Jieping possesses appropriate
professional qualifications on accounting or related
financial management expertise as required under Rules
3.10(2) and 3.21 of the Listing Rules. None of the Audit
Committee members is a member of the previous or
existing auditor of the Company.
The terms of reference of our Audit Committee set out
its authority, responsibilities, membership and frequency
of meetings, which are posted on the Company
’
s website
and the Stock Exchange
’
s website and are in compliance
with the Corporate Governance Code. The primary
duties of the Audit Committee include, among others,
(i) assisting the Board in ensuring that our Group has an
effective financial reporting, risk management and internal
control system in compliance with the Listing Rules; (ii)
overseeing the integrity of the financial statements of
our Group; (iii) selecting, and assessing the independence
and qualifications of, our Company
’
s external auditor; (iv)
ensuring effective communication between our Directors
and the internal and external auditors of our Company;
(v) providing advice and comments to our Board; and (vi)
performing other duties and responsibilities as may be
assigned by the Board.
The Company has received written confirmation from
each of the independent non-executive Directors in
respect of his/her independence in accordance with the
independence guidelines set out in Rule 3.13 of the Listing
Rules. The Company is of the view that all independent
non-executive Directors are independent.
Appointment and Re-election
The Board may from time to time appoint any person
to be a Director either to fill a casual vacancy or as an
additional Director. Any Director so appointed shall
hold office only until the first annual general meeting
of the Company after his/her appointment and shall
then be eligible for re-election. According to the article
of association of the Company adopted on 18 February
2022, which has become effective on the Listing Date
(the
“
Articles of Association
”
), at each annual general
meeting one-third of the Directors for the time being,
or, if their number is not a multiple of three, then the
number nearest to but greater than one-third, shall retire
from office by rotation provided that every Director
(including those appointed for a specific term) shall be
subject to retirement by rotation at least once every three
years.
Each of the Directors (including the non-executive
Directors) has entered into an appointment letter with
the Company. The term of office of executive Directors
and non-executive Directors shall be three years after the
date of appointment by the Board, and the term of office
of independent non-executive Directors shall be three
years after the Listing Date. They are subject to retirement
and re-election in accordance with the provisions of the
Articles of Association as mentioned above.
BOARD COMMITTEES
The Board has established the Audit Committee, the
Remuneration and Nomination Committee and the
Strategy and Investment Committee to oversee key
aspects of its affairs.
In order to discharge their dedicated functions, each of
our Board committees may seek professional advice if
necessary and will be provided with sufficient resources at
our cost.
Annual Report 2021
49
Jinmao Property Services Co., Limited
CORPORATE GOVERNANCE REPORT
Membership and Responsibilities
The Remuneration and Nomination Committee currently
consists of two independent non-executive Directors, Dr.
Han Jian (chairman of the Remuneration and Nomination
Committee), Dr. Chen Jieping, and one non-executive
Director, Ms. He Yamin, which is in compliance with Rules
3.25 and 3.27A of the Listing Rules.
The terms of reference of the Remuneration and
Nomination Committee set out its authority,
responsibilities, membership and frequency of meetings,
which are posted on the Company
’
s website and the
Stock Exchange
’
s website and are in compliance with the
Corporate Governance Code. The primary duties of the
Remuneration and Nomination Committee include, among
others, (i) establishing, reviewing and providing advices
to our Board on our policy and structure concerning
remuneration of our Directors and senior management
and on the establishment of a formal and transparent
procedure for developing policies concerning such
remuneration; (ii) determining the terms of the specific
remuneration package of each Director and senior
management; (iii) reviewing and approving performance-
based remuneration by reference to corporate goals and
objectives resolved by our Directors from time to time;
(iv) reviewing the structure, size and composition of our
Board on a regular basis and make recommendations
to the Board regarding any proposed changes to the
composition of our Board; (v) identifying, selecting or
making recommendations to our Board on the selection
of individuals nominated for directorship, and ensure
the diversity of our Board members; (vi) assessing
the independence of our independent non-executive
Directors; and (vii) making recommendations to our Board
on relevant matters relating to the appointment, re-
appointment and removal of our Directors and succession
planning for our Directors.
As our Company was listed on the Stock Exchange on 10
March 2022 and the Audit Committee was established
with effect from the Listing Date, no Audit Committee
meeting was held during the year ended 31 December
2021.
Since the Listing Date and up to the date of this report,
one meeting of the Audit Committee was held on 24
March 2022. All members of the Audit Committee
attended such meeting to review, among others, our
Group
’
s consolidated financial statements for the year
ended 31 December 2021, including the accounting
principles and practices, in conjunction with our
Company
’
s external auditor, the appropriateness and
effectiveness of risk management and internal control
systems for the year ended 31 December 2021 and the
effectiveness of the internal audit function. The Audit
Committee endorsed the accounting treatment adopted
by our Company, and the Audit Committee had to the
best of its ability assured itself that the disclosure of the
financial information in this report has complied with the
applicable accounting standards, the Listing Rules and
the Companies Ordinance (Chapter 622 of the laws of
Hong Kong, the
“
Companies Ordinance
”
). The Audit
Committee therefore resolved to recommend for the
Board
’
s approval the consolidated financial statements for
the year.
Remuneration and Nomination
Committee
The Board has established the Remuneration and
Nomination Committee with effect from the Listing Date.
50
Annual Report 2021Jinmao Property Services Co., Limited
CORPORATE GOVERNANCE REPORT
Strategy and Investment Committee
The Board has established the Strategy and Investment
Committee on 26 August 2021.
Membership and Responsibilities
The Strategy and Investment Committee currently consists
of one non-executive Director, Mr. Jiang Nan (chairman
of the Strategy and Investment Committee), and one
independent non-executive Director, Mr. Sincere Wong,
and two executive Directors, Mr. Xie Wei and Ms. Zhou
Liye.
The terms of reference of the Strategy and Investment
Committee sets out its authority, responsibilities,
membership and frequency of meetings. The primary
duties of the Strategy and Investment Committee include,
among others, (i) formulating the Group
’
s development
strategies; (ii) evaluating investment projects; (iii) studying
material strategic cooperation projects; and (iv) performing
other duties and responsibilities as may be assigned by the
Board.
Two meetings of the Strategy and Investment Committee
were held during the year ended 31 December 2021.
All members of the Strategy and Investment Committee
attended the meetings to consider several investment
projects in 2021.
Since the Listing Date and up to the date of this report,
no Strategy and Investment Committee meeting was held.
As the Company was listed on the Stock Exchange on
10 March 2022 and the Remuneration and Nomination
Committee was established with effect from the Listing
Date, no Remuneration and Nomination Committee
meeting was held during the year ended 31 December
2021.
Since the Listing Date and up to the date of this report,
the Remuneration and Nomination Committee passed
written resolutions to recommend a candidate as a senior
management member and to determine the remuneration
package of the senior management, to review the
structure, size and composition of the Board and the
independence of the independent non-executive Directors,
and to consider the qualifications of the retiring directors
standing for election at the forthcoming annual general
meeting (the
“
AGM
”
).
For the year ended 31 December 2021, the annual
remuneration of four of the executive Directors and other
members of senior management of the Company fell
within the band of below HK$1 million and the annual
remuneration of four of them fell within the band of
above HK$1 million.
Annual Report 2021
51
Jinmao Property Services Co., Limited
CORPORATE GOVERNANCE REPORT
performance of the Group, the economic conditions and
other internal or external factors, the Group
’
s business
strategies and operations, the current and future liquidity
position and capital requirements, etc. The Board may
also consider the issuance of bonus shares on a basis as
permitted by the applicable laws and regulations. The
recommendation of the payment of dividend is subject to
the absolute discretion of the Board, and any declaration
of final dividend for the year will be subject to the
approval of the shareholders.
The Board will continue to review and amend the dividend
policy as appropriate and from time to time.
Anti-Money Laundering Policy
The anti-money laundering policy is in place to combat
money laundering and terrorist financing activities, and
formalise such procedures and systems. Compliance of
the policy by internal control departments is monitored
and administered by the Risk Management and Audit
Department.
INTERNAL CONTROL AND RISK
MANAGEMENT
Risk Management and Internal Control
The Company is of the view that effective risk
management and internal control system are integral
and indispensable to the Group
’
s achievement of long-
term business growth and sustainable development. Such
systems are designed to manage rather than eliminate the
risk of failure to achieve business objectives, and can only
provide reasonable and not absolute assurance against
material misstatement or loss.
The Board has the overall responsibility for evaluating and
determining the nature and extent of the risks it is willing
to take in achieving the Company
’
s strategic objectives,
and establishing and maintaining appropriate and
effective risk management and internal control systems.
The Board acknowledges its responsibility for reviewing
the effectiveness of the Group
’
s risk management and
internal control systems.
The Audit Committee assists the Board in leading the
management and overseeing their design, implementation
and monitoring of the risk management and internal
control systems.
EXTERNAL AUDITOR AND AUDITOR
’
S
REMUNERATION
Ernst & Young, Hong Kong, Certified Public Accountants,
were engaged as the Company
’
s external auditor for
the year ended 31 December 2021. There had been
no change in auditor of the Company in the past three
years. External auditor may provide certain non-audit
services to the Group as long as these services do not
involve any management or decision making functions
for and on behalf of the Group, or performing self-
assessments or action as an advocacy role for the Group.
Before any engagement with external auditor for non-
audit services, external auditor must comply with the
independence requirements under Code of Ethics for
Professional Accountants issued by Hong Kong Institute
of Certified Public Accountants. The statement of
the independent auditor of the Company about their
reporting responsibilities on the financial statements is set
out in the Independent Auditor
’
s Report of this report.
During the year ended 31 December 2021, the
remunerations paid or payable to Ernst & Young regarding
the audit and non-audit services are set out as follows:
RMB
’
000
Audit services 254
Non-audit services
Services in relation to the Listing
and internal control review 8,596
Total 8,850
DIVIDEND POLICY
The dividend policy incorporates the guidelines for the
Board to determine whether to pay a dividend and
the level of such dividend to be paid. In general, it is
the policy of the Company to allow its shareholders to
participate in the Company
’
s profits whilst retaining
adequate reserves for future growth. Normally, the
Company pays dividends once a year, which is final
dividend. The Board may also declare special dividends
in addition to such dividends as it considers appropriate.
The policy also contains a number of factors for which
the Board has to consider in determining the frequency,
amount and form of any dividend in any financial year/
period, including the actual and expected financial
52
Annual Report 2021Jinmao Property Services Co., Limited
CORPORATE GOVERNANCE REPORT
During 2021, based on changes in both internal and
external environments, and taking into account the
Company
’
s business nature, operational features and
strategic goals, the Company has established the risk
assessment criteria applicable to the Company, including
qualitative and quantitative considerations in aspects of
strategy, finance, personnel etc., and formulated risk maps
including risk identification, risk analysis, risk assessment,
risk control measures and risk preventive measures.
The Company continued to monitor and manage risks
to improve the efficiency and standardization of risk
management.
The management has confirmed to the Board and the
Audit Committee on the effectiveness and adequateness
of the risk management and internal control systems for
the year ended 31 December 2021.
The Board, as supported by the Audit Committee as
well as the management report and the internal audit
findings, reviewed the risk management and internal
control systems, including the financial, operational and
compliance controls, for the year ended 31 December
2021, and considered that such systems are effective and
adequate. The annual review is performed once a year and
covers the internal control systems, the financial reporting
and internal audit function and staff qualifications,
experiences and relevant resources.
Inside Information
The Company adopted an inside information disclosure
policy on 26 August 2021 which sets out the procedures
for the handling and dissemination of inside information
with a view to preventing uneven, inadvertent or
selective dissemination of inside information and ensuring
shareholders and the public are provided with full,
accurate and timely information about the activities and
the financial condition of the Company. The Company
has communicated with all relevant staff regarding the
implementation of the procedures and relevant trainings
are also provided.
Risk Management Structure of the
Company
The Company adopts multi-layer management for its
comprehensive risk management works. Such framework
includes the general manager and the functional
departments of the Company and its subsidiaries.
Risk Management and Audit Department
The general manager (the decision – making level)
guides the Company
’
s comprehensive risk management
works. He is responsible for ensuring that the Company
establishes and maintains suitable and effective risk
management and internal control systems, and is held
accountable for the effectiveness of the comprehensive
risk management.
The functional departments of the Company and its
subsidiaries (the implementation level) is responsible for
the identification, evaluation, report analysis and handling
work for comprehensive risk management. They are
responsible for pushing forward and implementing specific
risk management measures, monitoring various risks of
the business.
Risk Management and Audit Department (the supervision
level) is responsible for establishing a sound supervision
and evaluation system of comprehensive risk management
to facilitate supervision and evaluation.
Internal Control
The Company has formulated a complete internal
management system. Various departments at the
headquarters are responsible for making amendments
and updates to the system, including 341 management
standards and 700 record lists in 23 categories on
administration, legal management, brand management,
purchasing management, project management, FHSE
(facilities, health, safety, environment) management,
system management, financial management, data
management, party and mass administration, human
resources management, early intervention management,
early management, project management, environmental
management, customer service management, order
management, demonstration area management,
club management, market management, business
management, risk control management. It added 233 and
revised 167 new management standards and record lists.
Annual Report 2021
53
Jinmao Property Services Co., Limited
CORPORATE GOVERNANCE REPORT
COMMUNICATION WITH
SHAREHOLDERS/INVESTOR RELATIONS
The Company considers that effective communication
with shareholders is essential for enhancing investor
relations and investors
’
understanding of the Company
’
s
business, performance and strategies. The Company also
recognizes the importance of timely and non-selective
disclosure of information, which will enable shareholders
and investors to make informed investment decisions. To
promote effective communication, the Company maintains
the website at www.jinmaowy.com where up-to-date
information on the Company
’
s business operations
and developments, financial information, corporate
governance practices and other information are available
for public access. Latest information on the Group
including annual and interim reports, announcements and
press releases are updated on the Company
’
s website in a
timely fashion.
The Board endeavours to maintain an on-going dialogue
with our shareholders, uses annual general meetings
or other general meetings to communicate with our
shareholders in particular and encourages them to
participate in these meetings. All annual general meeting
materials including but not limited to circular, notice and
proxy form will be sent to shareholders in time which
contain all adequate information according to the Listing
Rules.
SHAREHOLDERS
’
RIGHT
To safeguard shareholder interests and rights, a separate
resolution is proposed for each matter to be considered at
shareholder meetings, including the election of individual
Directors. All resolutions put forward at shareholder
meetings will be voted on by poll pursuant to the Listing
Rules and poll results will be posted on the websites
of the Company and of the Stock Exchange after each
shareholder meeting.
Procedures for shareholders to convene
a general meeting
General meetings may be convened by the Board on
requisition of shareholder(s) of the Company representing
at least 5% of the total voting rights of all the
shareholders having a right to vote at general meetings
or by such shareholder(s) who made the requisition (as
the case may be) pursuant to Sections 566 and 568 of
DIRECTORS
’
RESPONSIBILITY
IN RESPECT OF THE FINANCIAL
STATEMENTS
The Directors acknowledge their responsibility for
preparing the financial statements of the Company for the
year ended 31 December 2021.
The Directors are not aware of any material uncertainties
relating to events or conditions that may cast significant
doubt upon the Company
’
s ability to continue as a going
concern.
The statement of the independent auditors of the
Company about their reporting responsibilities on
the financial statements is set out in the Independent
Auditors
’
Report on pages 67 to 70.
COMPANY SECRETARY
Ms. Ho Wing Tsz Wendy has been appointed as the
Company
’
s company secretary. Ms. Ho is an executive
director of corporate services division of Tricor Services
Limited, a global professional services provider specializing
in integrated business, corporate and investor services.
All Directors have access to the advice and services
of the company secretary on corporate governance
and board practices and matters. Ms. Zhou Liye, the
executive Director, has been designated as the primary
contact person at the Company which would work and
communicate with Ms. Ho on the Company
’
s corporate
governance and secretarial and administrative matters.
Ms. Zhou Liye and Ms. Ho Wing Tsz Wendy also serve
as our Company
’
s authorized representatives for the
purpose of Rule 3.05 of the Listing Rules to serve as the
Company
’
s principal channel of communication with the
Stock Exchange.
For the year ended 31 December 2021, Ms. Ho has
undertaken not less than 15 hours of relevant professional
training respectively in compliance with Rule 3.29 of the
Listing Rules.
54
Annual Report 2021Jinmao Property Services Co., Limited
CORPORATE GOVERNANCE REPORT
the Companies Ordinance. Shareholders should follow the
requirements and procedures as set out in the Companies
Ordinance for convening a general meeting.
Procedures for putting forward proposals
at general meetings
Pursuant to Sections 580 and 615 of the Companies
Ordinance, shareholders representing at least 2.5% of
the total voting rights of all shareholders, or at least 50
shareholders (as the case may be) who have a right to
vote at the relevant general meeting, may put forward
proposals for consideration at a general meeting by
sending requests in writing to the Company. Shareholders
should follow the requirements and procedures as set out
in the Companies Ordinance for circulating a resolution
for general meeting.
Shareholders
’
enquiries
If the shareholders are in any doubt about their
shareholdings, the shareholders shall inquire the
Company
’
s share registrar directly. Shareholders and the
investment community may at any time make a request
for the Company
’
s information to the extent that such
information is publicly available. Shareholders may also
make enquiries to the Board by writing to the Company
at the Company
’
s registered office in Hong Kong at Room
4702-03, 47/F, Office Tower Convention Plaza, 1 Harbour
Road, Wanchai, Hong Kong or at the Company
’
s principal
place of business in the PRC at 6/F, YouAn International
Tower, Unit 2, Xitieying Middle Ave, Fengtai, Beijing, the
PRC.
CONSTITUTIONAL DOCUMENTS
In preparation for the Listing, the Company has adopted
the Articles of Association pursuant to a special resolution
passed by the shareholders on 18 February 2022. Since
then, the Company has not made any changes to its
Articles of Association. An up-to-date version of the
Company
’
s Articles of Association is also available on the
Company
’
s website and the Stock Exchange
’
s website.
On behalf of the Board
JIANG Nan
Chairman
Annual Report 2021
55
Jinmao Property Services Co., Limited
DIRECTORS
’
REPORT
The Board of the Company submits its report together
with the audited financial statements of the Group for the
year ended 31 December 2021.
Principal Business
The principal activities of the Company is investment
holding. The activities of its principal subsidiaries are the
provision of property management services in the PRC,
details of which are set out in note 1 to the consolidated
financial statements. The Group is engaged in three
business lines, namely (i) property management services,
(ii) value-added services to non-property owners, and (iii)
community value-added services.
Results and Dividends
The results of the Group for the year ended 31 December
2021 are set out in the consolidated statement of profit
or loss of this report.
The state of affairs of the Group as at 31 December
2021 is set out in the consolidated statement of financial
position of this report.
Considering the business development of the Group, no
dividend was recommended by the Board for the year
ended 31 December 2021.
As at the date of this report, there was no arrangement
under which a shareholder had waived or agreed to waive
any dividends.
Closure of Register of Members
The register of members of the Company will be closed
from Monday, 30 May 2022 to Thursday, 2 June 2022,
both dates inclusive, during which period no transfer
of shares will be registered. In order to qualify for the
right to attend and vote at the AGM, all transfers of
shares accompanied by the relevant share certificates
must be lodged with the Company
’
s share registrar,
Computershare Hong Kong Investor Services Limited at
Shops 1712-1716, 17th Floor, Hopewell Centre, 183
Queen
’
s Road East, Wan Chai, Hong Kong for registration
not later than 4:30 p.m. on Friday, 27 May 2022.
Directors
’
and Chief Executives
’
Interests and Short Positions in
Shares, Underlying Shares or
Debentures
The Company
’
s shares were listed on the Stock Exchange
on 10 March 2022. Accordingly, the Listing Rules and the
Securities and Futures Ordinance (the
“
SFO
”
) were not
applicable to the Company as at 31 December 2021.
56
Annual Report 2021Jinmao Property Services Co., Limited
DIRECTORS
’
REPORT
As at the date of this report, the interests or short positions of the Directors and the chief executives of the Company in
the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning
of Part XV of the SFO) which were to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and
8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such
provisions of the SFO) or which were required, pursuant to section 352 of the SFO, to be entered in the register referred
to therein or which were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange
were as follows:
Interests in our Company
Name of Director/
chief executive of
our Company
Capacity/Nature
of interest
Number of
shares held
Approximate %
shareholding interest
in our Company
Jiang Nan Beneficial owner 54,380(L) 0.01%
Interests in our associated corporations
Name of
Director/chief
executive of our
Company
Name of
associated
corporation
Capacity/Nature
of Interest
Number of
shares held in
the associated
corporation
Number of
underlying
shares held in
the associated
corporation
(1)
Approximate %
shareholding
interest in the
associated
corporation
(2)
Jiang Nan China Jinmao Beneficial owner 3,600,000(L) 3,500,000(L) 0.056%
Xie Wei China Jinmao Beneficial owner – 2,500,000(L) 0.020%
Zhou Liye China Jinmao Beneficial owner – 1,618,000(L) 0.013%
He Yamin China Jinmao Beneficial owner – 2,202,000(L) 0.017%
Qiao Xiaojie China Jinmao Beneficial owner – 1,334,000(L) 0.011%
Notes:
The Letter
“
L
”
denotes the entity
’
s long position in the shares.
1. This refers to underlying shares covered by share options granted pursuant to the share option scheme of China Jinmao,
such options being unlisted physically settled equity derivatives.
2. This represents the percentage of the aggregate long positions in the shares and underlying shares to the total number
of issued shares of China Jinmao as at the date of this report.
Save as disclosed above, as at the date of this report, none of the Directors or chief executives of the Company had or
was deemed to have any interests or short positions in the shares, underlying shares or debentures of the Company or
any of its associated corporations as recorded in the register which were required to be kept by the Company under
section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.
Save as disclosed above, none of the Directors or their spouses or children under the age of 18, had been granted
any right to subscribe for the equity or debt securities of the Company or any of its associated corporations, or had
exercised any such right for the year ended 31 December 2021.
Annual Report 2021
57
Jinmao Property Services Co., Limited
DIRECTORS
’
REPORT
Deed of Non-Competition with China Jinmao and Directors
’
Interest in
Competing Business
To protect our Group from potential competition in the future with respect to our provision of property management
business, China Jinmao has entered into a deed of non-competition in favour of our Company (for itself and as trustee
for each of the members of our Group) on 21 February 2022 (the
“
Deed of Non-Competition
”
). For details, please
refer to the section headed
“
Relationship with China Jinmao Deed of Non-Competition
”
in the Prospectus.
In compliance with the Deed of Non-Competition, China Jinmao will make an annual declaration on its compliance
with the Deed of Non-Competition. The independent non-executive Directors did not review the status of compliance
stated in the Deed of Non-Competition for the year ended 31 December 2021 as the Deed of Non-Competition was
entered in February 2022. As of the date of this report, the Company is not aware of any other matters regarding the
compliance of the undertakings in the Deed of Non-Competition that are required to be brought to the attention of the
shareholders of the Company.
During the year, none of the Directors or their respective close associates (as defined in the Listing Rules) had any
interest in a business that competed or was likely to compete, either directly or indirectly, with the business of the
Group, other than holding overlapping position(s) in China Jinmao (in particular, Mr. Jiang Nan being the executive
director and the chief financial officer of China Jinmao; Ms. He Yamin being the human resources director of China
Jinmao; and Ms. Qiao Xiaojie being the deputy financial controller of China Jinmao).
Substantial Shareholders
’
Interests and Short Positions in Shares and
Underlying Shares
As at the date of this report, so far as is known to the Directors, the following persons, not being a Director or chief
executive of the Company, had interests or short positions in the shares or underlying shares of the Company which
would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:
Name of Shareholder Capacity
Number of
shares
(1)
Approximately
percentage of
issued shares
China Jinmao Beneficial owner 608,319,969(L) 67.28%(L)
Sinochem Hong Kong Interest in controlled
corporation
(2)
608,319,969(L) 67.28%(L)
Beneficial owner 67,616,133(L) 7.48%(L)
Sinochem Corporation Interest in controlled
corporation
(2)
675,936,102(L) 74.76%(L)
Sinochem Group Interest in controlled
corporation
(2)
675,936,102(L) 74.76%(L)
Sinochem Holdings Interest in controlled
corporation
(2)
675,936,102(L) 74.76%(L)
58
Annual Report 2021Jinmao Property Services Co., Limited
DIRECTORS
’
REPORT
Reserves
Details of movements in the reserves of the Company
during the year are set out in note 34 to the consolidated
financial statements of this report.
Donations
During the year, the Group made charitable and other
donations totalling RMB18,297 (2020: RMB60,000).
Audit Committee
The Audit Committee of the Company, comprising Dr.
Chen Jieping as chairman and Mr. Sincere Wong and Ms.
Qiao Xiaojie as members, has reviewed, together with
the participation of the management, the accounting
principles and practices adopted by the Group and
discussed auditing and financial reporting matters
including the review of the audited financial statements of
the Group for the year ended 31 December 2021.
Employees and Remuneration Policy
As at 31 December 2021, the Group had 2,658 full-time
employees (as at 31 December 2020: 1,897 full-time
employees). For the year ended 31 December 2021, the
total staff costs were approximately RMB0.4 billion (2020:
approximately RMB0.3 billion).
The Group regularly reviews remuneration and benefits
of its employees according to the profitability of the
Group, market practice and the relevant employee
’
s
performance. The Group has deepened the reform of
the human resource system and explored the possibility
of establishing remuneration systems for high-quality
personnel and corporate executives that are compatible
with competitive selection and recruitment. The Group
has implemented various types of motivation plan for
different levels of employees with reference to employee
performance and contributions. According to the relevant
regulations, the Group is required to pay social insurance
and housing fund on behalf of its employees.
The Group places a strong emphasis on recruiting
high-quality personnel and provides employees with
continuous training programmes and career development
opportunities. Due to the COVID-19 outbreak, the
Company organized online and onsite training on various
Notes:
(1) The Letter
“
L
”
denotes the entity
’
s long position in the
shares.
(2) Sinochem Holdings held the entire equity interests
in Sinochem Group, which in turn held the entire
equity interests in Sinochem Corporation. Sinochem
Corporation held the entire equity interests in Sinochem
Hong Kong, which in turn held an approximately
35.3% interest in China Jinmao as of the date of this
report. For the purpose of the SFO, Sinochem Holdings,
Sinochem Group, Sinochem Corporation and Sinochem
Hong Kong are all deemed to be interested in the
shares of the Company beneficially owned by China
Jinmao, and Sinochem Holdings, Sinochem Group and
Sinochem Corporation are all deemed to be interested
in the shares beneficially owned by Sinochem Hong
Kong.
(3) The calculation is based on the total number of issued
shares of the Company (i.e. 904,189,000 shares)
following the partial exercise of the over-allotment
option.
Save as disclosed above, as at the date of this report,
according to the register of interests required to be kept
by the Company under Section 336 of the SFO, there was
no person (not being a Director or chief executive of the
Company) who had any interest or short position in the
shares or underlying shares of the Company which would
fall to be disclosed to the Company under the provisions
of Divisions 2 and 3 of Part XV of the SFO.
Share Option Scheme and Share
Award Scheme
As at the date of this report and as at the Listing Date,
the Company has not adopted any share option scheme
and share award scheme.
Equity-linked Agreement
No equity-linked agreements that will or may result in
the Company issuing shares or that require the Company
to enter into any agreements that will or may result in
the Company issuing shares were entered into by the
Company during the year ended 31 December 2021 or
subsisted as at 31 December 2021.
Annual Report 2021
59
Jinmao Property Services Co., Limited
DIRECTORS
’
REPORT
Contracts between the Company and
its Controlling Shareholders
Save as disclosed in this report, no contract of
significance, whether for provision of service or otherwise,
has been entered into between the Company or any of
its subsidiaries and the controlling shareholders or any of
the controlling shareholders
’
subsidiaries during the year
ended 31 December 2021.
Indebtedness
As at 31 December 2021, we had no outstanding
borrowings. Our Group did not have any banking facilities
as at 31 December 2021 and we had lease liabilities of
approximately RMB34.3 million as at 31 December 2021.
Contingent Liabilities
As at 31 December 2021, we did not have any
outstanding guarantees or other material contingent
liabilities.
Property, Plant and Equipment
Details of the movements in the property, plant and
equipment of the Group and the Company for the year
ended 31 December 2021 are set out in note 13 to the
financial statements. No assets of the Group are charged
during the year ended 31 December 2021.
Principal Properties
During the year ended 31 December 2021, the Group has
not held any properties for development and/or sale or
for investment purposes of which the percentage ratios
exceeds 5%.
Management Contract
No contracts, other than the employment contracts,
concerning the management and administration of the
whole or any substantial part of the business of the Group
were entered into or existed during the year ended 31
December 2021.
Key Relationships with Employees,
Customers and Suppliers
Details of the key relationships between the Company and
its employees, customers and suppliers are set out in the
paragraph headed
“
Employees and Remuneration Policy
”
and
“
Major Customers and Suppliers
”
in this report.
subjects in 2021. Such measures ensured the general
employees
’
ability in performing their duties and increased
the management level of management cadres at all
levels, thus provided timely and effective support for the
Company
’
s business development.
Pension Plan
Full-time employees of the Company are covered by
various government-sponsored pension plans, under
which the employees are entitled to a monthly pension
based on certain formulae. These government agencies
are responsible for the pension liability to these employees
upon retirement. The Company contributes on a monthly
basis to these pension plans. All contributions made
under the government-sponsored pension plans described
above are fully attributable to employees at the time of
the payment and the Company is unable to forfeit any
amounts contributed by it to such plans.
Subsidiaries
Details of the Company
’
s principal subsidiaries as at 31
December 2021 are set out in note 1 to the financial
statements.
Significant Investments, Acquisitions
and Disposals of Subsidiaries,
Associates and Joint Ventures
As at 31 December 2021, save for the right-of-use assets
recognised as investment properties in accordance with
HKFRS 16 in respect of various lease agreements, details
of which are set out in the Prospectus of the Company
dated 25 February 2022, the Company has no other
significant investments or significant acquisitions, and has
no disposal of subsidiaries, associates and joint ventures
during the year ended 31 December 2021.
Future Plans for Material Investments
or Capital Assets
The Group intends to utilise the net proceeds raised from
the Global Offering according to the plans set out in the
section headed
“
Future Plans and Use of Proceeds
”
in the
Prospectus.
Save as disclosed in this report, the Company did not have
other plans for material investments or capital assets as at
the date of this report.
60
Annual Report 2021Jinmao Property Services Co., Limited
DIRECTORS
’
REPORT
Share Capital
Details of the movements in share capital of the Company for the year ended 31 December 2021 are set out in note 25
to the financial statements.
Directors
Up to the date of this report, the Board comprised eight Directors, of which two were executive Directors, three were
non-executive Directors and three were independent non-executive Directors, whose names are as follows:
APPOINTMENT DATE
EXECUTIVE DIRECTORS
Mr. Xie Wei ( ) 26 August 2021
Ms. Zhou Liye ( ) 26 August 2021
NON-EXECUTIVE DIRECTORS
Mr. Jiang Nan ( )
(Chairman)
26 August 2021
Ms. He Yamin ( ) 26 August 2021
Ms. Qiao Xiaojie ( ) 26 August 2021
INDEPENDENT NON-EXECUTIVE DIRECTORS
Dr. Chen Jieping ( ) 10 March 2022
Dr. Han Jian ( ) 10 March 2022
Mr. Sincere Wong ( ) 10 March 2022
The list of Directors (by category) is also disclosed in all corporate communications issued by the Company pursuant to
the Listing Rules from time to time.
To the best knowledge of the Company, there is no relationship (including financial, business, family or other material/
relevant relationship(s)) among the members of the Board.
In accordance with the Articles of Association of the Company, Ms. He Yamin, Ms. Qiao Xiaojie and Ms. Zhou Liye will
retire at the forthcoming AGM of the Company and, being eligible, will offer themselves for re-election.
None of the Directors who are proposed for re-election at the forthcoming AGM has a service contract with the
Company or any of its subsidiaries which is not determinable within one year without payment of compensation, other
than statutory compensation.
Directors
’
and Senior Management
’
s Biographies
Biographical details of the Directors and the senior management of the Group are set out on pages 31 to 44 of this
report.
Annual Report 2021
61
Jinmao Property Services Co., Limited
DIRECTORS
’
REPORT
Major Customers and Suppliers
We have a large, growing and loyal customer base
primarily consisting of (i) property owners and residents
for our property management and community value-
added services, (ii) property developers for our value-
added services to non-property owners and property
management services, and (iii) other customers such as
advertising companies for our community value-added
services.
For the year ended 31 December 2021, the five largest
customers of the Group accounted for approximately
51.1% of the total revenue, while the largest customer
accounted for approximately 47.2% of the total revenue.
China Jinmao is the controlling shareholder of our
Company for the purpose of the Listing Rules. Sinochem
Group is an indirect controlling shareholder of China
Jinmao and consolidated the accounts of China Jinmao
and its subsidiaries. When calculating our five largest
customers for the year ended 31 December 2021, we
aggregated revenue contribution from customers under
common control and their subsidiaries, joint ventures and
associates. As a result, our single largest customer for
the year ended 31 December 2021 was Sinochem Group
and its subsidiaries, joint ventures and associates, which
include China Jinmao and its subsidiaries (excluding our
Group), joint ventures and associates. For further details,
see note 29 of the financial statements in this report.
Save as disclosed above, none of the Directors of
the Company or any of their close associates or any
shareholders (which, to the best knowledge of the
Directors, own more than 5% of the number of issued
shares of the Company) had any beneficial interest in the
Group
’
s five largest customers.
During the year ended 31 December 2021, most of our
five largest suppliers were sub-contractors providing
cleaning.
For the year ended 31 December 2021, the five largest
suppliers of the Group accounted for approximately
38.6% of the total purchases, while the largest supplier
accounted for approximately 25.8% of the total
purchases.
Remuneration of Directors and Senior
Management
The remuneration of the Directors and senior
management of the Company are determined by the
Remuneration and Nomination Committee by reference
to the Company
’
s operating results, market rate and
individual performance. In particular, the Remuneration
and Nomination Committee will consider factors such as (i)
salaries paid by comparable companies, time commitment
and responsibilities and employment conditions of
the Group; (ii) appointment and termination terms for
Directors and senior management to ensure they are fair;
(iii) compensation arrangements relating to dismissal or
removal of Directors for misconduct to ensure they are
reasonable and appropriate; (iv) company culture and
other non-financial key performance indicators; and (v)
whether the remuneration package for an independent
non-executive Directors may affect his/her objectivity
and independence. No Director is allowed to take part in
deciding his own remuneration.
For the year ended 31 December 2021, details of the
remuneration of the Directors and senior management
of the Company are set out in notes 8 and 29 to
the financial statements. There was no arrangement
under which a Director waived or agreed to waive any
remuneration during the year ended 31 December 2021.
Interests of the Directors in Contracts
Save as disclosed in this report, no
Directors
had
any
direct
or
indirect
material
interests
in
any transactions,
arrangements or contracts
of
significance
to
the
business
of
the
Group
to
which
the
Company
or
any
of
its
subsidiaries
was
a
party
at
the
end
of
the
year
or
at
any
time
during
the
year
ended
31
December
2021.
Sufficiency of Public Float
Based on the information that is publicly available to the
Company and within the knowledge of the Board, the
Board confirms that the Company has maintained the
public float as required by the Listing Rules as at the date
of this report.
Purchase, Sale or Redemption of the
Company
’
s Listed Securities
As the Company
’
s shares were not listed on the Stock
Exchange during the year ended 31 December 2021,
neither the Company nor any of its subsidiaries has
purchased, sold or redeemed any of the Company
’
s listed
securities during the year ended 31 December 2021.
62
Annual Report 2021Jinmao Property Services Co., Limited
DIRECTORS
’
REPORT
Permitted Indemnity Provision
The permitted indemnity provision for the benefit of the
Directors is currently in force. Pursuant to the Articles of
Association of the Company, every Director, company
secretary or other officer of the Company shall be entitled
to be indemnified by the Company against all costs,
charges, losses, expenses and liabilities (to the fullest
extent permitted by the Companies Ordinance) which he
may incur in the execution and discharge of his duties or
in relation thereto. The Company has taken out insurance
against all loss and liabilities associated with defending
any proceedings which may be brought against Directors
and other officers of the Company.
Related Party Transactions
Details of the related party transactions undertaken in the
normal course of business are provided under note 29 to
the consolidated financial statements of this report, which
do not constitute connected transaction nor continuing
connected transaction as defined under the Listing Rules
during the year ended 31 December 2021 because the
shares of the Company were not listed on the Stock
Exchange during the year.
CONNECTED TRANSACTIONS
Upon Listing, transactions between members of the
Group and the Company
’
s connected persons have
become connected transactions or continuing connected
transactions of the Company under Chapter 14A of
the Listing Rules. Details of the non-exempt continuing
connected transactions are set out below:
Property Management Services
Framework Agreement
On 21 February 2022, our Company entered into a
property management services framework agreement with
China Jinmao (the
“
Property Management Services
Framework Agreement
”
), pursuant to which our
Company (for itself and on behalf of our Group) agreed
to provide property management services to China Jinmao
and its associates (the
“
Jinmao Connected Persons
”
),
in respect of property units developed by the Jinmao
Connected Persons which have been sold but not yet
been delivered to the buyers of such property units,
and properties owned, used or operated by the Jinmao
Connected Persons.
None of the Directors of the Company or any of their
close associates or any shareholders (which, to the best
knowledge of the Directors, own more than 5% of
the number of issued shares of the Company) had any
beneficial interest in the Group
’
s five largest suppliers.
Business Review
A review of the business of the Group during the year
ended 31 December 2021, a description of the principal
risks and uncertainties that the Group may be facing, a
discussion on the Group
’
s future business development
and an analysis of the Group
’
s performance during
the year ended 31 December 2021 using key financial
performance indicators are contained in the section
headed
“
Management Discussion and Analysis
”
on pages
16 to 21 of this report.
Environmental Policies and
Performance
The Group acknowledges the great importance of
environment protection. To minimise the impact on
the environment and natural resources generated
from the operation of the Group, the Group has
broadly implemented resource-recycling and energy-
saving practices in its offices. Specifically, the Group (i)
encouraged double-sided printing and multi-pages-per-
sheet printing for office documents; (ii) encouraged its
employees to collect waste paper and used batteries for
recycling purpose; and (iii) encourage its employees to
turn off lights and computers before leaving the office.
A separate Environmental, Social and Governance Report
for the year ended 31 December 2021 will be published
on the websites of the Company and the Stock Exchange
in due course in compliance with ESG Reporting Guide as
set out in Appendix 27 to the Listing Rules.
Compliance with Relevant Laws and
Regulations
During the year ended 31 December 2021, as far as the
Company is aware, there was no material breach of or
non-compliance with applicable laws and regulations by
our Group that has a significant impact on the business
and operations of the Group.
Annual Report 2021
63
Jinmao Property Services Co., Limited
DIRECTORS
’
REPORT
The fees charged by us to the Jinmao Connected Persons
shall not be higher than the standard fees designated by
the relevant regulatory authorities (if applicable), and the
terms offered by us to the Jinmao Connected Persons shall
not be less favorable to our Group than the terms offered
by us to our independent customers for the same or
similar type and scope of property management services.
The Property Management Services Framework Agreement
took effect from the Listing Date and will expire on 31
December 2023. For the two years ending 31 December
2022 and 2023, the annual caps of fees chargeable by our
Group in relation to the property management services
are RMB140 million and RMB182 million, respectively.
Sales Assistance Services Framework
Agreement
On 21 February 2022, our Company entered into a sales
assistance services framework agreement (the
“
Sales
Assistance Services Framework Agreement
”
) with
China Jinmao, pursuant to which our Company (for itself
and on behalf of our Group) agreed to provide sales
assistance service to the Jinmao Connected Persons with
respect to properties developed by them, to assist with
their sales and marketing activities at property sales
venues and display units.
The terms offered by us to the Jinmao Connected Persons
shall not be less favorable to our Group than the terms
offered by us to our independent customers for the same
or similar type and scope of sales assistance services.
The Sales Assistance Services Framework Agreement
took effect from the Listing Date and will expire on 31
December 2023. For the two years ending 31 December
2022 and 2023, the annual caps of fees chargeable by
our Group in relation to the sales assistance services are
RMB330 million and RMB390 million, respectively.
Property Agency Services Framework
Agreement
On 21 February 2022, our Company entered into a
property agency services framework agreement (the
“
Property Agency Services Framework Agreement
”
)
with China Jinmao, pursuant to which our Company
(for itself and on behalf of our Group) agreed to provide
property agency services to the Jinmao Connected
Persons, by sourcing potential purchasers and providing
assistance in entering into sales contracts with buyers,
with respect to (i) newly developed properties and
(ii) unsold car park spaces developed by the Jinmao
Connected Persons.
With respect to newly developed properties, our Group
will charge a commission calculated at a fixed percentage
of the sales price of the relevant properties. With respect
to car park spaces, our Group will charge either (a) a
commission calculated at a fixed percentage of the sales
price of the relevant car park spaces or a fixed amount on
top of the sales price of the relevant car park spaces, or (b)
the difference between the actual sales price paid by the
purchaser and the pre-determined minimum sales price.
The Property Agency Services Framework Agreement
took effect from the Listing Date and will expire on 31
December 2023. For the two years ending 31 December
2022 and 2023, (i) the annual caps of fees chargeable
by our Group in relation to the property agency services
for newly developed properties are RMB10 million and
RMB20 million, respectively, and (ii) the annual caps of
fees chargeable by our Group in relation to the property
agency services for car park spaces are RMB150 million
and RMB200 million, respectively.
Consultancy and Other Value-added
Services Framework Agreement
On 21 February 2022, our Company entered into a
consultancy and other value-added services framework
agreement (the
“
Consultancy and Other Value-
added Services Framework Agreement
”
) with China
Jinmao, pursuant to which our Company (for itself
and on behalf of our Group) agreed to provide certain
consultancy and other value-added service to the Jinmao
Connected Persons, including but not limited to (i)
consultancy services from the perspective of property
management with respect to property development site
selection, positioning, preliminary planning and design,
engineering and construction, (ii) pre-delivery services,
such as site clearing, assistance with preparatory work
and maintenance of order, and pre-delivery inspection
and assessment, (iii) post-delivery services mainly
comprising repair and maintenance services during the
post-delivery warranty periods, (iv) engineering services
for the upgrade of smart management hardware, and (v)
community value-added services as may be required by
64
Annual Report 2021Jinmao Property Services Co., Limited
DIRECTORS
’
REPORT
the Jinmao Connected Persons from time to time, such as
management and operation services in respect of car park
spaces owned by the Jinmao Connected Persons.
The terms offered by us to the Jinmao Connected Persons
shall not be less favorable to our Group than the terms
offered by us to our independent customers for the same
or similar type and scope of value-added services.
The Consultancy and Other Value-added Services
Framework Agreement took effect from the Listing Date
and will expire on 31 December 2023. For the two years
ending 31 December 2022 and 2023, the annual caps
of fees chargeable by our Group in relation to the value-
added services are RMB536 million and RMB615 million,
respectively.
Sinochem Framework Agreement
On 21 February 2022, our Company entered into a
framework agreement with Sinochem Holdings (the
“
Sinochem Framework Agreement
”
), pursuant to
which our Company (for itself and on behalf of our
Group) agreed to provide certain services to Sinochem
Holdings and its associates (the
“
Sinochem Connected
Persons
”
), including (i) property management services
in respect of the industrial parks, research institutes and
office buildings held by the Sinochem Connected Persons,
as well as office spaces used by the Sinochem Connected
Persons, and (ii) community value-added services as may
be required by the Sinochem Connected Persons from
time to time, such as management services in respect of
car park spaces used by the Sinochem Connected Persons.
The fees charged by us to the Sinochem Connected
Persons shall not be higher than the standard fees
designated by the relevant regulatory authorities (if
applicable), and the terms offered by us to the Sinochem
Connected Persons shall not be less favorable to our
Group than the terms offered by us to our independent
customers for the same or similar type and scope of
services.
The Sinochem Framework Agreement took effect from the
Listing Date and will expire on 31 December 2023. For
the two years ending 31 December 2022 and 2023, (i) the
annual caps of fees chargeable by our Group in relation
to the property management services are RMB60 million
and RMB78 million, respectively, and (ii) the annual caps
of fees chargeable by our Group in relation to the value-
added services are RMB4 million and RMB5 million,
respectively.
As China Jinmao is the controlling shareholder of the
Company and Sinochem Holdings is the ultimate holding
company of China Jinmao, each of China Jinmao and
Sinochem Holdings is a connected person of the Company
under Chapter 14A of the Listing Rules.
As the Company was not a listed company during the
year ended 31 December 2021, the annual review and
reporting requirements under Chapter 14A of the Listing
Rules were therefore not applicable to the Company for
the year ended 31 December 2021. The Company will
comply with the relevant requirements under the Listing
Rules in its subsequent annual reports.
Auditor
The consolidated financial statements of the Company for
the year ended 31 December 2021 has been audited by
Ernst & Young. The Board proposed to re-appoint them as
the Company
’
s auditor for the year 2022 and a resolution
for their re-appointment as the auditor of our Company
will be proposed at the AGM.
Principal Risks and Uncertainties
The Group
’
s financial condition, results of operations,
businesses and prospects may be affected by a number
of risks and uncertainties. The key risks and uncertainties
identified by the Group are set out as follows:
1. A substantial portion of the
properties under our management
during the year ended 31 December
2021 were developed by Jinmao
Group
As we do not have control over the management
strategy of Jinmao Group, any measures that the
PRC government may adopt to further regulate the
real estate market, or the macro-economic or other
Annual Report 2021
65
Jinmao Property Services Co., Limited
DIRECTORS
’
REPORT
factors that may affect the business operations
and prospects of Jinmao Group, any adverse
development in the operations of Jinmao Group or
its ability to develop new properties may affect our
ability to procure the relevant new service contracts
for property management services, value-added
services to non-property owners and community
value-added services. We cannot assure you that
Jinmao Group will continue to engage us to provide
property management services, value-added services
to non-property owners or community value-added
services for any properties they develop, particularly
because the appointment of property management
companies for the preliminary property management
service contracts of residential and non-residential
properties in the same property management area
is generally subject to a tender and bidding process
under the Regulations on Property Management
(2018 Revision) ( ) (2018 ) and
the Interim Measures for Bid-Inviting and Bidding
Management of Preliminary Property Management
( ).
Going forward, we plan to (i) enter into more
cooperation arrangements with regional
governments to expand our management scale and
diversify our city operation portfolio and service
offerings, (ii) establish strategic alliance with
other independent third-party developers to fully
collaborate and utilize their resources in the field
of property management and related services, (iii)
leveraging our brand reputation and track record,
continue to secure new contracts by participating in
the tendering and bidding process and commercial
negotiation, and (iv) use the proceeds from the
Global Offering for acquisition and investment in
suitable property management companies. As a
result, it is expected that we will continue to capture
new contracts from independent third parties, and
our GFA under management in respect of properties
developed by independent third parties and revenue
generated from services provided to independent
third parties will continue to increase.
2. Our business operations and
financial performance have been and
may continue to be affected by the
outbreak of COVID-19
While there has been improvement in the
COVID-19 situation in the PRC where we operate,
we are uncertain as to when the outbreak of
COVID-19 will continue to be contained, and we
also cannot predict if the impact will be long-
lasting. Furthermore, there is no assurance that
another major COVID-19 or other disease outbreak
will not happen in the future. In particular, the
recent emergence of the Omicron virus variant, a
COVID-19 virus variant which is significantly more
infectious than its predecessors, has created more
uncertainties for our business operations under
the COVID-19 pandemic. This could materially and
adversely affect the overall business sentiment,
cause our business to suffer in ways that we cannot
predict and affect our business, financial condition
and results of operations. Over a longer term, if
the outbreak continues and impacts the broader
economy, some of the property owners may face
difficulty in honoring their payment obligations
under our property management contracts. If any
of these events eventuate, our business, financial
condition and results of operations may be adversely
affected.
3. The growth of property management
and commercial operation service
markets depends on general
economic and market conditions
Changes in the general economic and market
conditions including changes in international,
national, regional and local economic conditions,
market volatility, declining demand for residential
or commercial real estate, falling real estate values,
disruption to the global capital or credit markets
may also negatively affect the PRC property
management and commercial operational service
markets which could, in turn, have a material
adverse effect on the PRC property management
and commercial operational service markets which
could, in turn, have a material adverse effect on the
Group.
66
Annual Report 2021Jinmao Property Services Co., Limited
DIRECTORS
’
REPORT
Important Events after the Reporting
Period
Save for the subsequent events as described in note 33
to the financial statements in this report, there were
no other significant events affecting the Group which
occurred after 31 December 2021 and up to the date of
this report.
By order of the Board
Jiang Nan
Chairman
Annual Report 2021
67
Jinmao Property Services Co., Limited
INDEPENDENT AUDITOR
’
S REPORT
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
Independent auditor
’
s report
To the members of Jinmao Property Services Co., Limited
(Incorporated in Hong Kong with limited liabilities)
Opinion
We have audited the consolidated financial statements of Jinmao Property Services Co., Limited (the
“
Company
”
) and its
subsidiaries (the
“
Group
”
) set out on pages 71 to 143, which comprise the consolidated statement of financial position
as at 31 December 2021, and the consolidated statement of profit or loss, the consolidated statement of comprehensive
income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then
ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of
the Group as at 31 December 2021, and of its consolidated financial performance and its consolidated cash flows for
the year then ended in accordance with Hong Kong Financial Reporting Standards (
“
HKFRSs
”
) issued by the Hong Kong
Institute of Certified Public Accountants (
“
HKICPA
”
) and have been properly prepared in compliance with the Hong
Kong Companies Ordinance.
Basis for opinion
We conducted our audit in accordance with Hong Kong Standards on Auditing (
“
HKSAs
”
) issued by the HKICPA.
Our responsibilities under those standards are further described in the
Auditor
’
s responsibilities for the audit of
the consolidated financial statements
section of our report. We are independent of the Group in accordance with
the HKICPA
’
s
Code of Ethics for Professional Accountants
(the
“
Code
”
), and we have fulfilled our other ethical
responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in
that context.
We have fulfilled the responsibilities described in the
Auditor
’
s responsibilities for the audit of the consolidated financial
statements
section of our report, including in relation to these matters. Accordingly, our audit included the performance
of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial
statements. The results of our audit procedures, including the procedures performed to address the matters below,
provide the basis for our audit opinion on the accompanying consolidated financial statements.
68
Annual Report 2021Jinmao Property Services Co., Limited
INDEPENDENT AUDITOR
’
S REPORT
Key audit matters (Continued)
Key audit matter How our audit addressed the key audit matter
Impairment assessment of trade receivables
As at 31 December 2021, the gross amount
of the Group
’
s trade receivables amounted to
RMB420,360,000, against which allowances for
impairment of RMB5,883,000, was made based on
the expected credit loss approach under Hong Kong
Financial Reporting Standard 9
Financial Instruments
.
Management assessed the expected credit losses of
trade receivables based on assumptions about risk
of default and expected credit loss rates. It involved
significant judgments and estimates when management
made these assumptions and selected the inputs to
the impairment calculation, based on the Group
’
s past
history, ageing profile of the receivables, existing market
conditions as well as forward-looking estimates at the
end of the reporting period.
Relevant disclosures are included in notes 2.4, 3 and 19
to the consolidated financial statements.
Our procedures in relation to management
’
s impairment
assessment on trade receivables included assessing the
credit loss provisioning methodology and the estimated
credit loss rates adopted by management by considering
historical cash collection performance and movements
of the ageing of trade receivables and taking into
account of the existing market conditions. We also
tested, on a sample basis, the ageing analysis of trade
receivables prepared by management, recalculated the
provision for loss allowance and assessed the adequacy
of the Group
’
s disclosures in the consolidated financial
statements.
Other information included in the Annual Report
The directors of the Company are responsible for the other information. The other information comprises the
information included in the Annual Report, other than the consolidated financial statements and our auditor
’
s report
thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Annual Report 2021
69
Jinmao Property Services Co., Limited
INDEPENDENT AUDITOR
’
S REPORT
Responsibilities of the directors for the consolidated financial statements
The directors of the Company are responsible for the preparation of the consolidated financial statements that give a
true and fair view in accordance with HKFRSs issued by the HKICPA and the Hong Kong Companies Ordinance, and
for such internal control as the directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors of the Company are responsible for assessing the
Group
’
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors of the Company either intend to liquidate the Group or to cease
operations or have no realistic alternative but to do so.
The directors of the Company are assisted by the Audit Committee in discharging their responsibilities for overseeing
the Group
’
s financial reporting process.
Auditor
’
s responsibilities for the audit of the consolidated financial
statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor
’
s report that includes our
opinion. Our report is made solely to you, as a body, in accordance with section 405 of the Hong Kong Companies
Ordinance, and for no other purpose. We do not assume responsibility towards or accept liability to any other person
for the contents of this report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
HKSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group
’
s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
70
Annual Report 2021Jinmao Property Services Co., Limited
INDEPENDENT AUDITOR
’
S REPORT
• Conclude on the appropriateness of the directors
’
use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group
’
s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor
’
s report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor
’
s report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible for
the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
regarding independence and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Audit Committee, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor
’
s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
The engagement partner on the audit resulting in this independent auditor
’
s report is Wong Kwok Yin.
Ernst & Young
Certified Public Accountants
Hong Kong
25 March 2022
Annual Report 2021
71
Jinmao Property Services Co., Limited
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Year ended 31 December 2021
2021 2020
Notes RMB
’
000 RMB
’
000
REVENUE 5 1,515,525 944,210
Cost of sales (1,045,491) (709,421)
Gross profit 470,034 234,789
Other income and gains 5 45,512 74,908
Selling and distribution expenses (14,688) (1,808)
Administrative expenses (209,351) (134,920)
Other expenses, net (9,665) (1,258)
Finance costs 7 (33,707) (64,186)
PROFIT BEFORE TAX 6 248,135 107,525
Income tax expense 10 (69,124) (30,401)
PROFIT FOR THE YEAR 179,011 77,124
Attributable to:
Owners of the parent 177,977 77,124
Non-controlling interests 1,034 –
179,011 77,124
EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY
EQUITY HOLDERS OF THE PARENT
Basic and diluted 12 0.22 0.10
72
Annual Report 2021Jinmao Property Services Co., Limited
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December 2021
2021 2020
RMB
’
000 RMB
’
000
PROFIT FOR THE YEAR 179,011 77,124
OTHER COMPREHENSIVE INCOME
Other comprehensive income that will not be reclassified to
profit or loss in subsequent periods:
Exchange differences on translation
of financial statements of the Company 254 –
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX 254 –
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 179,265 77,124
Attributable to:
Owners of the parent 178,231 77,124
Non-controlling interests 1,034 –
179,265 77,124
Annual Report 2021
73
Jinmao Property Services Co., Limited
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 2021
2021 2020
Notes RMB
’
000 RMB
’
000
NON-CURRENT ASSETS
Property, plant and equipment 13 54,704 33,615
Investment properties 14 9,379 10,590
Right-of-use assets 15(a) 32,473 15,970
Intangible assets 16 6,392 7,084
Deferred tax assets 17 4,708 2,457
Other receivables and other assets 20 2,693 941,593
Total non-current assets 110,349 1,011,309
CURRENT ASSETS
Inventories 18 4,523 5,199
Trade receivables 19 414,477 203,713
Prepayments, other receivables and other assets 20 267,293 644,196
Prepaid tax 7,513 –
Restricted cash 21 1,278 –
Cash and cash equivalents 21 553,619 270,818
Total current assets 1,248,703 1,123,926
CURRENT LIABILITIES
Trade payables 22 170,944 112,036
Other payables and accruals 23 629,830 520,641
Contract liabilities 5 313,937 206,391
Interest-bearing borrowings 24 – 144,000
Lease liabilities 15(a) 8,972 5,572
Tax payable 4,359 22,735
Total current liabilities 1,128,042 1,011,375
74
Annual Report 2021Jinmao Property Services Co., Limited
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 2021
2021 2020
Notes RMB
’
000 RMB
’
000
NET CURRENT ASSETS 120,661 112,551
TOTAL ASSETS LESS CURRENT LIABILITIES 231,010 1,123,860
NON-CURRENT LIABILITIES
Other payables 23 – 123,657
Interest-bearing borrowings 24 – 936,992
Lease liabilities 15(a) 25,342 12,224
Deferred tax liabilities 17 1,687 1,853
Total non-current liabilities 27,029 1,074,726
Net assets 203,981 49,134
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT
Share capital 25 66,947 –*
Reserves 26 128,450 49,134
195,397 49,134
Non-controlling interests 8,584 –
Total equity 203,981 49,134
* The amount is less than RMB1,000.
.......................................................................... ..........................................................................
Xie Wei Zhou Liye
Director Director
Annual Report 2021
75
Jinmao Property Services Co., Limited
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 31 December 2021
Attributable to owners of the parent
Share
capital
Merge
reserve*
Other
reserve*
PRC
statutory
surplus
reserve*
Exchange
fluctuation
reserve*
Retained
profits* Total
Non-
controlling
interests Total equity
RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000
Note 26(a) Note 26(b) Note 26(c)
At 1 January 2021 – 25,000 16,087 6,268 – 1,779 49,134 – 49,134
Profit for the year – – – – – 177,977 177,977 1,034 179,011
Other comprehensive
income for the year:
Exchange differences on
translation of financial
statements – – – – 254 – 254 – 254
Total comprehensive
income for the year – – – – 254 177,977 178,231 1,034 179,265
Transfer to merger
reserve – 1,630 – (1,630) – – – – –
Deemed distribution
for acquisition of
subsidiaries under
common control
(note 26(a))
– (21,484) – – – – (21,484) – (21,484)
Issuance of ordinary
shares
(note 25)
66,947 (66,947) – – – – – – –
Transfer to PRC statutory
surplus reserve – – – 762 – (762) – – –
Capital contribution
from non-controlling
shareholders – – – – – – – 7,550 7,550
Distribution to parent – (14,467) – – – – (14,467) – (14,467)
Contribution from the
immediate holding
company – – 3,983 – – – 3,983 – 3,983
At 31 December 2021 66,947 (76,268) 20,070 5,400 254 178,994 195,397 8,584 203,981
* These reserve accounts comprised the reserves of RMB128,450,000 and RMB49,134,000 in the consolidated statements
of financial position as at 31 December 2021 and 31 December 2020, respectively.
76
Annual Report 2021Jinmao Property Services Co., Limited
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 31 December 2021
Share
capital
Merger
reserve*
Other
reserve*
PRC
statutory
surplus
reserve*
Retained
profits*
Total
equity
RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000
Note 26(a) Note 26(b) Note 26(c)
At 1 January 2020 – 15,000 10,091 6,184 76,556 107,831
Profit and total comprehensive income
for the year – – – – 77,124 77,124
Dividends declared by the subsidiaries
to the then shareholders
(note 11)
– – – – (151,817) (151,817)
Transfer to PRC statutory surplus reserve – – – 84 (84) –
Contribution from the immediate
holding company – – 5,996 – – 5,996
Capital injection upon establishment of
a subsidiary by the then shareholder – 10,000 – – – 10,000
At 31 December 2020 – 25,000 16,087 6,268 1,779 49,134
Annual Report 2021
77
Jinmao Property Services Co., Limited
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 December 2021
2021 2020
Notes RMB
’
000 RMB
’
000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 248,135 107,525
Adjustments for:
Finance costs 7 33,707 64,186
Bank interest income 5 (3,433) (1,313)
Loan interest income 5 (32,408) (63,750)
Fair value loss on investment properties 6 1,211 1,050
Impairment losses of trade receivables 6 2,262 372
Impairment losses/(write-back of impairment losses) of other
receivables 6 1,831 (196)
Impairment of inventory 6 467 –
Loss on disposal of items of property, plant and equipment, net 6 510 17
Depreciation of property, plant and equipment 6 9,631 5,369
Depreciation of right-of-use assets 6 9,253 3,750
Amortisation of intangible assets 6 3,102 1,795
Equity-settled share option expenses 29(a) 1,646 3,631
Management
’
s remuneration borne by the immediate holding
company 29(b) 2,337 2,365
278,251 124,801
Decrease in inventories 209 294
Increase in trade receivables (213,026) (48,794)
Decrease/(increase) in prepayments, other receivables and other assets 149,506 (89,000)
Decrease in other non-current assets 1,908 –
Increase in restricted cash (1,278) –
Increase in trade payables 58,908 21,381
Increase in contract liabilities 107,546 59,474
Increase in other payables and accruals 59,407 92,087
Cash generated from operations 441,431 160,243
Interest received 3,433 1,313
Income tax paid (97,430) (25,310)
Net cash flows from operating activities 347,434 136,246
78
Annual Report 2021Jinmao Property Services Co., Limited
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 December 2021
2021 2020
Notes RMB
’
000 RMB
’
000
CASH FLOWS FROM INVESTING ACTIVITIES
Loan interest income received 32,408 63,484
Purchase of items of property, plant and equipment (34,510) (23,857)
Purchase of items of intangible assets (2,723) (3,111)
Proceeds from disposal of items of property, plant and equipment 280 –
Proceeds from disposal of intangible assets – 29
Repayment from related parties 1,080,992 134,005
Net cash flows from investing activities 1,076,447 170,550
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of interest-bearing borrowings (1,080,992) (134,005)
Principal portion of lease payments 27(b) (7,848) (3,166)
Interest paid (34,677) (63,920)
Dividend paid (5,255) –
Capital injection by the then shareholder – 10,000
Capital contribution from non-controlling shareholders 7,550 –
Acquisition of subsidiaries under common control (19,858) –
Net cash flows used in financing activities (1,141,080) (191,091)
NET INCREASE IN CASH AND CASH EQUIVALENTS 282,801 115,705
Cash and cash equivalents at beginning of the year 270,818 155,113
CASH AND CASH EQUIVALENTS AT END OF YEAR 553,619 270,818
ANALYSIS OF CASH AND CASH EQUIVALENTS
Cash and bank balances as stated in the consolidated statements
of financial position and statement of cash flows 21 553,619 270,818
Annual Report 2021
79
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
1. CORPORATE AND GROUP INFORMATION
General information
Jinmao Property Services Co., Limited (the
“
Company
”
, formerly known as Hanmao Limited and Jinmao Property
Development Co., Limited) is a limited liability company incorporated in Hong Kong on 14 September 2020. The
registered office of the Company is located at Rooms 4702-03, 47/F, Office Tower, Convention Plaza, 1 Harbour
Road, Wanchai, Hong Kong.
The Company is an investment holding company. During the year, the Company and its subsidiaries (collectively
the
“
Group
”
) were involved in the provision of property management services and value-added services to non-
property owners and community value-added services in the People
’
s Republic of China (the
“
PRC
”
) (the
“
Listing
Business
”
).
The Company
’
s shares became listed on the main board of the Stock Exchange of Hong Kong Limited (the
“
Stock
Exchange
”
) on 10 March 2022 (the
“
Listing
”
).
In the opinion of the Company
’
s directors, the immediate holding company of the Company is China Jinmao
Holdings Group Limited (
“
China Jinmao Group
”
), a company incorporated in Hong Kong and its shares are listed
on the Stock Exchange. The ultimate holding company of the Company is Sinochem Group Co., Ltd. (
“
Sinochem
Group
”
), a company established in the PRC and is a state-owned enterprise under the supervision of the State-
owned Assets Supervision and Administration Commission in the PRC.
Prior to the incorporation of the Company and the completion of the reorganisation as described below (the
“
Reorganisation
”
), the Listing Business was operated through various subsidiaries in the PRC.
In preparation for the listing of the Company
’
s shares on the Main Board of the Stock Exchange, the
Reorganisation was undertaken, pursuant to which the Listing Business and/or the related entities operating the
Listing Business were transferred to the Company. For further details with regard to the Reorganisation, please see
“
History, Reorganization and Corporate Structure
”
in the prospectus of the Company dated 25 February 2022 (the
“
Prospectus
”
).
Information about subsidiaries
Particulars of the Company
’
s subsidiaries are as follows:
Name
Place and date of
registration and
place of operations
Registered
share capital
Percentage of equity
attributable to the
Company
Principal activitiesDirect Indirect
Sinochem Jinmao Property
Management (Beijing) Co., Ltd.
(
“
Sinochem Jinmao
”
)
#*
PRC/
Mainland China
16 January 2007
RMB5,000,000 100 – Property management
Jinmao (Shanghai) Property
Management Co., Ltd.
#**
PRC/
Mainland China
18 September 1995
RMB6,630,000 – 100 Property management
Nanjing Ninggao International
Property Consultancy Co., Ltd.
#**
PRC/
Mainland China
23 April 2004
RMB5,000,000 – 100 Property management
Chuangmao Technology (Beijing)
Co., Ltd.
#**
PRC/
Mainland China
14 February 2020
RMB10,000,000 – 100 Technology development
and services
80
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
Name
Place and date of
registration and
place of operations
Registered
share capital
Percentage of equity
attributable to the
Company
Principal activitiesDirect Indirect
Yuelin (Hangzhou) Real Estate Agents
Co., Ltd.
#**
PRC/
Mainland China
29 July 2020
RMB1,000,000 – 100 Real estate brokerage service
Jiashan Jiamao City Public Resources
Management Co., Ltd.
#**
PRC/
Mainland China
9 February 2021
RMB5,000,000 – 49
^
Property management
and city operation services
Huimao Building Technology (Beijing)
Co., Ltd.
#**
PRC/
Mainland China
5 March 2021
RMB20,000,000 – 100 Smart community
management
Maotong Property Management
(Shanghai) Co., Ltd.
#**
PRC/
Mainland China
8 March 2021
RMB2,000,000 – 100 Property management
Zhoushan Dongda Jinmao Urban
Property Services Co., Ltd.
#**
PRC/
Mainland China
19 July 2021
RMB5,000,000 – 49
^
Property management
and city operation services
Zhejiang Zhonglan Xinmao Park
Management Co., Ltd.
#**
PRC/
Mainland China
19 August 2021
RMB10,000,000 – 51 Property management and
city operation services
Beijing Zijin Xinmao Property Services
Co., Ltd.
#**
PRC/
Mainland China
30 September 2021
RMB1,000,000 – 51 Property management
Guangdong Tumao Commercial
Property Operation Co., Ltd.
#**
PRC/
Mainland China
6 December 2021
RMB5,000,000 – 70 Property management
Nanjing Xinmao Asset Management
Co., Ltd.
#**
PRC/
Mainland China
13 December 2021
RMB5,000,000 – 90 Property management
and city operation services
#
The English names of all group companies registered in the PRC represent the best efforts made by the directors of
the Company to translate the Chinese names of these companies as they do not have official English names.
* This entity is registered as a wholly-foreign-owned enterprise under the PRC law.
** These entities are registered as limited liability companies under the PRC law.
^
The Group controls the boards of directors of these entities by virtue of its power to cast the majority of votes at
the meetings of the respective boards. The rights of shareholders
’
meetings are all delegated to the meetings of
the board except for certain protective rights, and therefore the Group has the power to exercise control over the
entities
’
operating and financing activities.
1. CORPORATE AND GROUP INFORMATION (Continued)
Information about subsidiaries (Continued)
Annual Report 2021
81
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.1 BASIS OF PREPARATION
These financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards
(
“
HKFRSs
”
) (which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards
(
“
HKASs
”
) and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants (
“
HKICPA
”
),
accounting principles generally accepted in Hong Kong and the Hong Kong Companies Ordinance. They have been
prepared under the historical cost convention, except for investment properties which have been measured at fair
value. These financial statements are presented in Renminbi (
“
RMB
”
) and all values are rounded to the nearest
thousand except when otherwise indicated.
Basis of consolidation
The consolidated financial statements of the Group have been prepared as if the Group had always been in
existence throughout both years presented, rather than from the date when the Company became the holding
company of the subsidiaries of the Group pursuant to the Reorganisation.
The consolidated financial statements include the financial statements of the Company and its subsidiaries for
the year ended 31 December 2021. A subsidiary is an entity (including a structured entity), directly or indirectly,
controlled by the Company. Control is achieved when the Group is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns through its power over the investee
(i.e., existing rights that give the Group the current ability to direct the relevant activities of the investee).
When the Company has, directly or indirectly, less than a majority of the voting or similar rights of an investee,
the Group considers all relevant facts and circumstances in assessing whether it has power over an investee,
including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group
’
s voting rights and potential voting rights.
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using
consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Group
obtains control, and continue to be consolidated until the date that such control ceases.
Profit or loss and each component of other comprehensive income are attributed to the owners of the parent of
the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit
balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control described above. A change in the ownership interest of a
subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises (i) the assets (including goodwill) and liabilities of the
subsidiary, (ii) the carrying amount of any non-controlling interest and (iii) the cumulative translation differences
recorded in equity; and recognises (i) the fair value of the consideration received, (ii) the fair value of any
investment retained and (iii) any resulting surplus or deficit in profit or loss. The Group
’
s share of components
previously recognised in other comprehensive income is reclassified to profit or loss or retained profits, as
appropriate, on the same basis as would be required if the Group had directly disposed of the related assets or
liabilities.
82
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.2 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
The Group has adopted the following revised HKFRSs for the first time for the current year
’
s financial statements.
Amendments to HKFRS 9,
HKAS 39, HKFRS 7,
HKFRS 4 and HKFRS 16
Interest Rate Benchmark Reform – Phase 2
Amendment to HKFRS 16
Covid-19-Related Rent Concessions beyond 30 June 2021 (early adopted)
The nature and the impact of the revised HKFRS are described below:
(a) Amendments to HKFRS 9, HKAS 39, HKFRS 7, HKFRS 4 and HKFRS 16 address issues not dealt with in the
previous amendments which affect financial reporting when an existing interest rate benchmark is replaced
with an alternative risk-free rate (
“
RFR
”
). The Phase 2 amendments provide a practical expedient to allow
the effective interest rate to be updated without adjusting the carrying amount of financial assets and
liabilities when accounting for changes in the basis for determining the contractual cash flows of financial
assets and liabilities, if the change is a direct consequence of the interest rate benchmark reform and
the new basis for determining the contractual cash flows is economically equivalent to the previous basis
immediately preceding the change. In addition, the amendments permit changes required by the interest
rate benchmark reform to be made to hedge designations and hedge documentation without the hedging
relationship being discontinued. Any gains or losses that could arise on transition are dealt with through
the normal requirements of HKFRS 9 to measure and recognise hedge ineffectiveness. The amendments
also provide a temporary relief to entities from having to meet the separately identifiable requirement when
an RFR is designated as a risk component. The relief allows an entity, upon designation of the hedge, to
assume that the separately identifiable requirement is met, provided the entity reasonably expects the RFR
risk component to become separately identifiable within the next 24 months. Furthermore, the amendments
require an entity to disclose additional information to enable users of financial statements to understand the
effect of interest rate benchmark reform on an entity
’
s financial instruments and risk management strategy.
The amendments did not have any impact on the financial position and performance of the Group as the
Group does not have any interest-bearing bank and other loans as at 31 December 2021.
(b) Amendment to HKFRS 16 issued in April 2021 extends the availability of the practical expedient for lessees
to elect not to apply lease modification accounting for rent concessions arising as a direct consequence of
the covid-19 pandemic by 12 months. Accordingly, the practical expedient applies to rent concessions for
which any reduction in lease payments affects only payments originally due on or before 30 June 2022,
provided the other conditions for applying the practical expedient are met. The amendment is effective
retrospectively for annual periods beginning on or after 1 April 2021 with any cumulative effect of initially
applying the amendment recognised as an adjustment to the opening balance of retained profits at the
beginning of the current accounting period. Earlier application is permitted. The Group has early adopted the
amendment on 1 January 2021. However, the Group has not received covid-19-related rent concessions and
plans to apply the practical expedient when it becomes applicable within the allowed period of application.
Annual Report 2021
83
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.3 ISSUED BUT NOT YET EFFECTIVE HKFRSs
The Group has not applied the following new and revised HKFRSs, that have been issued but are not yet effective,
in these financial statements.
Amendments to HKFRS 3
Reference to the Conceptual Framework
1
Amendments to HKFRS 10 and
HKAS 28 (2011)
Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture
3
HKFRS 17
Insurance Contracts
2
Amendments to HKFRS 17
Insurance Contracts
2, 5
Amendments to HKAS 1
Classification of Liabilities as Current or Non-current
2, 4
Amendments to HKAS 1 and
HKFRS Practice Statement 2
Disclosure of Accounting Policies
2
Amendments to HKAS 8
Definition of Accounting Estimates
2
Amendments to HKAS 12
Deferred Tax related to Assets and Liabilities arising from
a Single Transaction
2
Amendments to HKAS 16
Property, Plant and Equipment: Proceeds before Intended Use
1
Amendments to HKAS 37
Onerous Contracts – Cost of Fulfilling a Contract
1
Annual Improvements to HKFRSs
2018-2020
Amendments to HKFRS 1, HKFRS 9, Illustrative Examples accompanying HKFRS
16, and HKAS 41
1
1
Effective for annual periods beginning on or after 1 January 2022
2
Effective for annual periods beginning on or after 1 January 2023
3
No mandatory effective date yet determined but available for adoption
4
As a consequence of the amendments to HKAS 1, Hong Kong Interpretation 5
Presentation of Financial Statements
– Classification by the Borrower of a Term Loan that Contains a Repayment on Demand Clause
was revised in
October 2020 to align the corresponding wording with no change in conclusion
5
As a consequence of the amendments to HKFRS 17 issued in October 2020, HKFRS 4 was amended to extend the
temporary exemption that permits insurers to apply HKAS 39 rather than HKFRS 9 for annual periods beginning
before 1 January 2023
Further information about those HKFRSs that are expected to be applicable to the Group is described below.
(a) Amendments to HKFRS 3 are intended to replace a reference to the previous
Framework for the Preparation
and Presentation of Financial Statements
with a reference to the
Conceptual Framework for Financial
Reporting
issued in June 2018 without significantly changing its requirements. The amendments also add
to HKFRS 3 an exception to its recognition principle for an entity to refer to the Conceptual Framework to
determine what constitutes an asset or a liability. The exception specifies that, for liabilities and contingent
liabilities that would be within the scope of HKAS 37 or HK(IFRIC)-Int 21 if they were incurred separately
rather than assumed in a business combination, an entity applying HKFRS 3 should refer to HKAS 37 or
HK(IFRIC)-Int 21 respectively instead of the Conceptual Framework. Furthermore, the amendments clarify
that contingent assets do not qualify for recognition at the acquisition date. The Group expects to adopt
the amendments prospectively from 1 January 2022. Since the amendments apply prospectively to business
combinations for which the acquisition date is on or after the date of first application, the Group will not be
affected by these amendments on the date of transition.
84
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.3 ISSUED BUT NOT YET EFFECTIVE HKFRSs (Continued)
(b) Amendments to HKAS 1
Classification of Liabilities as Current or Non-current
clarify the requirements for
classifying liabilities as current or non-current. The amendments specify that if an entity
’
s right to defer
settlement of a liability is subject to the entity complying with specified conditions, the entity has a right to
defer settlement of the liability at the end of the reporting period if it complies with those conditions at that
date. Classification of a liability is unaffected by the likelihood that the entity will exercise its right to defer
settlement of the liability. The amendments also clarify the situations that are considered a settlement of a
liability. The amendments are effective for annual periods beginning on or after 1 January 2023 and shall
be applied retrospectively. Earlier application is permitted. The amendments are not expected to have any
significant impact on the Group
’
s financial statements.
(c) Amendments to HKAS 1
Disclosure of Accounting Policies
require entities to disclose their material
accounting policy information rather than their significant accounting policies. Accounting policy information
is material if, when considered together with other information included in an entity
’
s financial statements,
it can reasonably be expected to influence decisions that the primary users of general purpose financial
statements make on the basis of those financial statements. Amendments to HKFRS Practice Statement
2 provide non-mandatory guidance on how to apply the concept of materiality to accounting policy
disclosures. Amendments to HKAS 1 are effective for annual periods beginning on or after 1 January 2023
and earlier application is permitted. Since the guidance provided in the amendments to HKFRS Practice
Statement 2 is non-mandatory, an effective date for these amendments is not necessary. The Group is
currently assessing the impact of the amendments on the Group
’
s accounting policy disclosures.
(d) Amendments to HKAS 8 clarify the distinction between changes in accounting estimates and changes in
accounting policies. Accounting estimates are defined as monetary amounts in financial statements that
are subject to measurement uncertainty. The amendments also clarify how entities use measurement
techniques and inputs to develop accounting estimates. The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and apply to changes in accounting policies and changes in
accounting estimates that occur on or after the start of that period. Earlier application is permitted. The
amendments are not expected to have any significant impact on the Group
’
s financial statements.
(e) Amendments to HKAS 12 narrow the scope of the initial recognition exception so that it no longer applies
to transactions that give rise to equal taxable and deductible temporary differences, such as leases and
decommissioning obligations. Therefore, entities are required to recognise a deferred tax asset and a
deferred tax liability for temporary differences arising from these transactions. The amendments are effective
for annual reporting periods beginning on or after 1 January 2023 and shall be applied to transactions
related to leases and decommissioning obligations at the beginning of the earliest comparative period
presented, with any cumulative effect recognised as an adjustment to the opening balance of retained
profits or other component of equity as appropriate at that date. In addition, the amendments shall be
applied prospectively to transactions other than leases and decommissioning obligations. Earlier application
is permitted. The amendments are not expected to have any significant impact on the Group
’
s financial
statements.
Annual Report 2021
85
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.3 ISSUED BUT NOT YET EFFECTIVE HKFRSs (Continued)
(f) Amendments to HKAS 16 prohibit an entity from deducting from the cost of an item of property, plant
and equipment any proceeds from selling items produced while bringing that asset to the location and
condition necessary for it to be capable of operating in the manner intended by management. Instead,
an entity recognises the proceeds from selling any such items, and the cost of those items, in profit or
loss. The amendments are effective for annual periods beginning on or after 1 January 2022 and shall be
applied retrospectively only to items of property, plant and equipment made available for use on or after
the beginning of the earliest period presented in the financial statements in which the entity first applies
the amendments. Earlier application is permitted. The amendments are not expected to have any significant
impact on the Group
’
s financial statements.
(g) Amendments to HKAS 37 clarify that for the purpose of assessing whether a contract is onerous under HKAS
37, the cost of fulfilling the contract comprises the costs that relate directly to the contract. Costs that relate
directly to a contract include both the incremental costs of fulfilling that contract (e.g., direct labour and
materials) and an allocation of other costs that relate directly to fulfilling that contract (e.g., an allocation of
the depreciation charge for an item of property, plant and equipment used in fulfilling the contract as well
as contract management and supervision costs). General and administrative costs do not relate directly to a
contract and are excluded unless they are explicitly chargeable to the counterparty under the contract. The
amendments are effective for annual periods beginning on or after 1 January 2022 and shall be applied to
contracts for which an entity has not yet fulfilled all its obligations at the beginning of the annual reporting
period in which it first applies the amendments. Earlier application is permitted. Any cumulative effect of
initially applying the amendments shall be recognised as an adjustment to the opening equity at the date of
initial application without restating the comparative information. The amendments are not expected to have
any significant impact on the Group
’
s financial statements.
(h)
Annual Improvements to HKFRSs 2018-2020
sets out amendments to HKFRS 1, HKFRS 9, Illustrative
Examples accompanying HKFRS 16, and HKAS 41. Details of the amendments that are expected to be
applicable to the Group are as follows:
• HKFRS 9
Financial Instruments
: clarifies the fees that an entity includes when assessing whether the
terms of a new or modified financial liability are substantially different from the terms of the original
financial liability. These fees include only those paid or received between the borrower and the lender,
including fees paid or received by either the borrower or lender on the other
’
s behalf. An entity
applies the amendment to financial liabilities that are modified or exchanged on or after the beginning
of the annual reporting period in which the entity first applies the amendment. The amendment is
effective for annual periods beginning on or after 1 January 2022. Earlier application is permitted. The
amendment is not expected to have a significant impact on the Group
’
s financial statements.
• HKFRS 16
Leases
: removes the illustration of payments from the lessor relating to leasehold
improvements in Illustrative Example 13 accompanying HKFRS 16. This removes potential confusion
regarding the treatment of lease incentives when applying HKFRS 16.
86
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fair value measurement
The Group measures its investment properties at the end of each reporting period. Fair value is the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or
liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The
principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a
liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant
’
s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial information are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1 – based on quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 – based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is observable, either directly or indirectly
Level 3 – based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are recognised in the financial information on a recurring basis, the Group determines
whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Annual Report 2021
87
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for an asset is required (other than
inventories, deferred tax assets, financial assets and investment properties), the asset
’
s recoverable amount is
estimated. An asset
’
s recoverable amount is the higher of the asset
’
s or cash-generating unit
’
s value in use and its
fair value less costs of disposal, and is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable
amount is determined for the cash-generating unit to which the asset belongs.
An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. An impairment loss is charged to profit or loss in the period in which it arises in those expense categories
consistent with the function of the impaired asset.
An assessment is made at the end of each reporting period as to whether there is an indication that previously
recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the
recoverable amount is estimated. A previously recognised impairment loss of an asset other than goodwill is
reversed only if there has been a change in the estimates used to determine the recoverable amount of that
asset, but not to an amount higher than the carrying amount that would have been determined (net of any
depreciation/amortisation) had no impairment loss been recognised for the asset in prior years. A reversal of
such an impairment loss is credited to profit or loss in the period in which it arises, unless the asset is carried at
a revalued amount, in which case the reversal of the impairment loss is accounted for in accordance with the
relevant accounting policy for that revalued asset.
88
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person
’
s family and that person
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow
subsidiary of the other entity);
(iii) the entity and the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or an
entity related to the Group;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity); and
(viii) the entity, or any member of a group of which it is a part, provides key management personnel
services to the Group or to the parent of the Group.
Annual Report 2021
89
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property, plant and equipment and depreciation
Items of property, plant and equipment are stated at cost less accumulated depreciation and any impairment
losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly
attributable costs of bringing the asset to its working condition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs
and maintenance, is normally charged to profit or loss in the period in which it is incurred. In situations where the
recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of
the asset as a replacement. Where significant parts of property, plant and equipment are required to be replaced
at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates them
accordingly.
Depreciation is calculated on a straight-line basis to write off the cost of each item of property, plant and
equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are
as follows:
Plant and machinery 9% to 33%
Leasehold improvements 20% to 50%
Furniture, fixtures and office equipment 9% to 20%
Motor vehicles 18% to 25%
Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is
allocated on a reasonable basis among the parts and each part is depreciated separately. Residual values, useful
lives and the depreciation method are reviewed, and adjusted if appropriate, at least at each financial year end.
An item of property, plant and equipment including any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal
or retirement recognised in profit or loss in the year the asset is derecognised is the difference between the net
sales proceeds and the carrying amount of the relevant asset.
Investment properties
Investment properties are interests in land and buildings (including the leasehold property held as a right-of-use
asset which would otherwise meet the definition of an investment property) held to earn rental income and/or
for capital appreciation, rather than for use in the production or supply of goods or services or for administrative
purposes; or for sale in the ordinary course of business. Such properties are measured initially at cost, including
transaction costs. Subsequent to initial recognition, investment properties are stated at fair value, which reflects
market conditions at the end of the reporting period.
Gains or losses arising from changes in the fair values of investment properties are included in profit or loss in the
year in which they arise.
Any gains or losses on the retirement or disposal of an investment property are recognised in profit or loss in the
year of the retirement or disposal.
90
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Intangible assets (other than goodwill)
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets
acquired in a business combination is the fair value at the date of acquisition. The useful lives of intangible assets
are assessed to be either finite or indefinite. Intangible assets with finite lives are subsequently amortised over the
useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be
impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are
reviewed at least at each financial year end.
Software is stated at cost less any impairment loss and is amortised on the straight-line basis over its estimated life
of 3 to 5 years.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and
leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets. At inception or on reassessment of a contract that contains a
lease component and non-lease component(s), the Group adopts the practical expedient not to separate non-lease
component(s) and to account for the lease component and the associated non-lease component(s) (e.g., property
management services for leases of properties) as a single lease component.
(a) Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease (that is the date the underlying
asset is available for use). Right-of-use assets (relate to the office properties and staff quarters) are measured
at cost, less any accumulated depreciation and any impairment losses, and adjusted for any remeasurement
of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the commencement date less any lease
incentives received. Where applicable, the cost of a right-of-use asset also includes an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located. Right-of-use assets are depreciated and amortised on a straight-line basis over the shorter of the
lease terms and the estimated useful lives of the assets as follows:
Office properties and staff quarters 1.5 to 5 years
If ownership of the leased asset transfers to the Group by the end of the lease term or the cost reflects the
exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
Annual Report 2021
91
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Leases (Continued)
Group as a lessee (Continued)
(b) Lease liabilities
Lease liabilities are recognised at the commencement date of the lease at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-
substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments
also include the exercise price of a purchase option reasonably certain to be exercised by the Group and
payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to
terminate the lease. The variable lease payments that do not depend on an index or a rate are recognised as
an expense in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the
lease commencement date because the interest rate implicit in the lease is not readily determinable. After
the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured
if there is a modification, a change in future lease payments arising from a change in an index or rate, a
change in the lease term, a change in the in-substance fixed lease payments or a change in assessment to
purchase the underlying asset.
(c) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of buildings and
equipment (that is those leases that have a lease term of 12 months or less from the commencement date
and do not contain a purchase option). When the Group enters into a lease in respect of a low-value asset,
the Group decides whether to capitalise the lease on a lease-by-lease basis. Lease payments on short-term
leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease
term.
Group as a lessor
When the Group acts as a lessor, it classifies at lease inception (or when there is a lease modification) each of its
leases as either an operating lease or a finance lease.
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an
asset are classified as operating leases. When a contract contains lease and non-lease components, the Group
allocates the consideration in the contract to each component on a relative stand-alone selling price basis. Rental
income is accounted for on a straight-line basis over the lease terms and is included in revenue in profit or loss
due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added
to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income.
Contingent rents are recognised as revenue in the period in which they are earned.
Leases that transfer substantially all the risks and rewards incidental to ownership of an underlying asset to the
lessee, are accounted for as finance leases.
92
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Leases (Continued)
Group as a lessor (Continued)
When the Group is an intermediate lessor, a sublease is classified as a finance lease or operating lease with
reference to the right-of-use asset arising from the head lease. If the head lease is a short-term lease to which
the Group applies the on-balance sheet recognition exemption, the Group classifies the sublease as an operating
lease.
Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through
other comprehensive income (
“
OCI
”
), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset
’
s contractual cash flow
characteristics and the Group
’
s business model for managing them. With the exception of trade receivables that
do not contain a significant financing component or for which the Group has applied the practical expedient of
not adjusting the effect of a significant financing component, the Group initially measures a financial asset at
its fair value, plus in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade
receivables that do not contain a significant financing component or for which the Group has applied the practical
expedient are measured at the transaction price determined under HKFRS 15 in accordance with the policies set
out for
“
Revenue recognition
”
below.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs
to give rise to cash flows that are solely payments of principal and interest (
“
SPPI
”
) on the principal amount
outstanding. Financial assets with cash flows that are not SPPI are classified and measured at fair value through
profit or loss, irrespective of the business model.
The Group
’
s business model for managing financial assets refers to how it manages its financial assets in order
to generate cash flows. The business model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are
held within a business model with the objective to hold financial assets in order to collect contractual cash flows,
while financial assets classified and measured at fair value through other comprehensive income are held within
a business model with the objective of both holding to collect contractual cash flows and selling. Financial assets
which are not held within the aforementioned business models are classified and measured at fair value through
profit or loss.
All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the
Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial
assets that require delivery of assets within the period generally established by regulation or convention in the
marketplace.
Annual Report 2021
93
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Investments and other financial assets (Continued)
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest method and are subject
to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or
impaired.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised (i.e., removed from the Group
’
s consolidated statement of financial position) when:
• the rights to receive cash flows from the asset have expired; or
• the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a
“
pass-through
”
arrangement;
and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group
has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if and to what extent it has retained the risk and rewards of ownership of the asset.
When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred
control of the asset, the Group continues to recognise the transferred asset to the extent of the Group
’
s
continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset
and the associated liability are measured on a basis that reflects the rights and obligations that the Group has
retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
of the original carrying amount of the asset and the maximum amount of consideration that the Group could be
required to repay.
94
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Impairment of financial assets
The Group recognises an allowance for expected credit losses (
“
ECLs
”
) for all debt instruments not held at
fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due
in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an
approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale
of collateral held or other credit enhancements that are integral to the contractual terms.
General approach
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased
significantly since initial recognition. When making the assessment, the Group compares the risk of a default
occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial
instrument as at the date of initial recognition and considers reasonable and supportable information that is
available without undue cost or effort, including historical and forward-looking information.
In certain cases, the Group may consider a financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into
account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows.
Financial assets at amortised cost are subject to impairment under the general approach and they are classified
within the following stages for measurement of ECLs except for trade receivables which apply the simplified
approach as detailed below.
Stage 1 – Financial instruments for which credit risk has not increased significantly since initial recognition and
for which the loss allowance is measured at an amount equal to 12-month ECLs
Stage 2 – Financial instruments for which credit risk has increased significantly since initial recognition but that
are not credit-impaired financial assets and for which the loss allowance is measured at an amount
equal to lifetime ECLs
Stage 3 – Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated
credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs
Annual Report 2021
95
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Impairment of financial assets (Continued)
Simplified approach
For trade receivables that do not contain a significant financing component or when the Group applies the
practical expedient of not adjusting the effect of a significant financing component, the Group applies the
simplified approach in calculating ECLs. Under the simplified approach, the Group does not track changes in
credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has
established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking
factors specific to the debtors and the economic environment.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as loans and borrowings or payables, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Group
’
s financial liabilities include trade payables, other payables and accruals, lease liabilities and interest-
bearing borrowings.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at amortised cost
After initial recognition, financial liabilities at amortised cost are subsequently measured at amortised cost, using
the effective interest rate method unless the effect of discounting would be immaterial, in which case they are
stated at cost. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as
through the effective interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance
costs in profit or loss.
96
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as
a derecognition of the original liability and a recognition of a new liability, and the difference between the
respective carrying amounts is recognised in profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial
position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to
settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in, first-
out basis. Net realisable value is based on the estimated selling prices less any estimated costs to be incurred to
completion and disposal.
Cash and cash equivalents
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand
and demand deposits, and short term highly liquid investments that are readily convertible into known amounts of
cash, are subject to an insignificant risk of changes in value, and have a short maturity of generally within three
months when acquired, less bank overdrafts which are repayable on demand and form an integral part of the
Group
’
s cash management.
For the purpose of the consolidated statements of financial position, cash and cash equivalents comprise cash on
hand and at banks, including term deposits, and assets similar in nature to cash, which are not restricted as to
use.
Provisions
A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event
and it is probable that a future outflow of resources will be required to settle the obligation, provided that a
reliable estimate can be made of the amount of the obligation.
When the effect of discounting is material, the amount recognised for a provision is the present value at the end
of the reporting period of the future expenditures expected to be required to settle the obligation. The increase in
the discounted present value amount arising from the passage of time is included in finance costs in profit or loss.
Annual Report 2021
97
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss is
recognised outside profit or loss, either in other comprehensive income or directly in equity.
Current tax assets and liabilities for the current and prior year are measured at the amount expected to be
recovered from or paid to the taxation authorities, based on tax rates and tax laws that have been enacted or
substantively enacted by the end of each of the reporting period, taking into consideration interpretations and
practices prevailing in the countries in which the Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
• when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
• in respect of taxable temporary differences associated with investments in subsidiaries, when the timing of
the reversal of the temporary differences can be controlled and it is probable that the temporary differences
will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, and the carryforward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences, and the carryforward of unused tax
credits and unused tax losses can be utilised, except:
• when the deferred tax asset relating to the deductible temporary differences arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax
assets are only recognised to the extent that it is probable that the temporary differences will reverse in
the foreseeable future and taxable profit will be available against which the temporary differences can be
utilised.
The carrying amount of deferred tax assets is reviewed at the end of reporting period and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are
recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or
part of the deferred tax asset to be recovered.
98
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income tax (Continued)
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of each of the reporting period.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right to
set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities
which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are
expected to be settled or recovered.
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant will
be received and all attaching conditions will be complied with. When the grant relates to an expense item, it is
recognised as income on a systematic basis over the periods that the costs, for which it is intended to compensate,
are expensed.
Revenue recognition
Revenue from contracts with customers
The Group provides property management services, value-added services to non-property owners and community
value-added services to property developers, property owners or tenants, property owners
’
associations or
residents. Revenue from contracts with customers is recognised when control of goods or services is transferred to
the customers at an amount that reflects the consideration to which the Group expects to be entitled in exchange
for those goods or services.
When the consideration in a contract includes a variable amount, the amount of consideration is estimated to
which the Group will be entitled in exchange for transferring the goods or services to the customer. The variable
consideration is estimated at contract inception and constrained until it is highly probable that a significant
revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty
with the variable consideration is subsequently resolved.
When the contract contains a financing component which provides the customer with a significant benefit of
financing the transfer of goods or services to the customer for more than one year, revenue is measured at the
present value of the amount receivable, discounted using the discount rate that would be reflected in a separate
financing transaction between the Group and the customer at contract inception. When the contract contains
a financing component which provides the Group with a significant financial benefit for more than one year,
revenue recognised under the contract includes the interest expense accreted on the contract liability under the
effective interest method. For a contract where the period between the payment by the customer and the transfer
of the promised goods or services is one year or less, the transaction price is not adjusted for the effects of a
significant financing component, using the practical expedient in HKFRS 15.
Annual Report 2021
99
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue recognition (Continued)
Revenue from contracts with customers (Continued)
(i) Property management services mainly includes security, cleaning, greening, repair and maintenance and file
management services to owners or tenants of properties. For property management services, the Group bills
a fixed amount for services provided on a monthly basis and recognises as revenue in the amount to which
the Group has a right to invoice and that corresponds directly with the value of performance completed.
The Group recognises the service fee received or receivable as its revenue over time in the period in which
the customer simultaneously receives and consumes the benefits provided by the services performed by the
Group.
(ii) Value-added services to non-property owners mainly include (a) sales assistance services, mainly including
pre-sale preparation, marketing, cleaning, security and maintenance services at property sales venues and
display units, (b) consultancy services, including preliminary planning and design services, construction
consultancy services, pre-delivery services prior to delivery of properties to end buyers (mainly clearing,
cleaning, assistance at property delivery venues (
“
Start-up Services
”
), and property inspection services and
the follow-up with rectification services (
“
Inspection and Follow-up Services
”
)), post-delivery services (mainly
repair and maintenance), and other consultancy services (mainly sales agency services with respect to newly
developed properties and carpark spaces). The Group agrees the price for each service with customers
upfront and issues monthly or quarterly bills to customers which vary based on the actual level of service
completed. Revenue from sales assistance services, construction consultancy services, Start-up Services and
post-delivery services is recognised over time, in the amount to which the Group has a right to invoice,
because the customer simultaneously receives and consumes the benefits provided by the Group. Revenue
from preliminary planning and design consultancy services, Inspection and Follow-up Services and sales
agency services is recognised at the point in time when the services are rendered and accepted by the
property developers.
(iii) Community value-added services mainly include community space operation services, community living
services (mainly housekeeping, cleaning, retail and catering services), real estate agency services with respect
to secondary sale or rental transactions of properties, and platform services for interior decoration. Revenue
from community space operation services and community living services is recognised when the related
services are rendered. Revenue from catering services is recognised at the point in time when control of the
food and beverages is transferred to the customers, generally on the acceptance of the food and beverages.
Revenue from real estate agency services and platform services for interior decoration is recognised at the
point in time when the services are rendered and accepted by the customers.
For property management service income from properties managed on a lump sum basis, where the Group acts
as principal and is primarily responsible for providing the property management services to the property owners,
the Group recognises the fee received or receivable from property owners as its revenue and all related property
management costs as its cost of services. For property management service income from properties managed on
a commission basis, the Group recognises the revenue, which is calculated by a certain percentage of the total
property management fee received or receivable from the properties units on behalf of the property owners, for
arranging and monitoring the services as provided by other suppliers to the property owners.
100
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue recognition (Continued)
Revenue from other sources
Rental income is recognised on a time proportion basis over the lease terms. Variable lease payments that do not
depend on an index or a rate are recognised as income in the accounting period in which they are incurred.
Other income
Interest income is recognised on an accrual basis using the effective interest method by applying the rate that
exactly discounts the estimated future cash receipts through the expected life of the financial instrument or a
shorter period, when appropriate, to the net carrying amount of the financial asset.
Contract liabilities
A contract liability is recognised when a payment is received or a payment is due (whichever is earlier) from a
customer before the Group transfers the related goods or services. Contract liabilities are recognised as revenue
when the Group performs under the contract (i.e., transfers control of the related goods or services to the
customer).
Employee benefits
Pension scheme
The employees of the Group
’
s subsidiaries which operate in Mainland China are required to participate in a
central pension scheme operated by the local municipal governments. These subsidiaries are required to contribute
a certain portion of their payroll to the central pension scheme. The contributions are charged to profit or loss as
they become payable in accordance with the rules of the central pension scheme.
Borrowing costs
Borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and
other costs that an entity incurs in connection with the borrowing of funds.
Dividends
Final dividends are recognised as a liability when they are approved by the shareholders of the Company in a
general meeting.
Interim dividends are simultaneously proposed and declared, because the Company
’
s memorandum and articles
of association grant the directors the authority to declare interim dividends. Consequently, interim dividends are
recognised immediately as a liability when they are proposed and declared.
Annual Report 2021
101
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Foreign currencies
The financial statements is presented in RMB, while the Company
’
s functional currency is Hong Kong dollar. Each
entity in the Group determines its own functional currency and items included in the financial information of
each entity are measured using that functional currency. Foreign currency transactions recorded by the entities
in the Group are initially recorded using their respective functional currency rates prevailing at the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the functional
currency rates of exchange ruling at the end of the reporting period. Differences arising on settlement or
translation of monetary items are recognised in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss
arising on translation of a non-monetary item measured at fair value is treated in line with the recognition of
the gain or loss on change in fair value of the item (i.e., translation difference on the item whose fair value gain
or loss is recognised in other comprehensive income or profit or loss is also recognised in other comprehensive
income or profit or loss, respectively).
In determining the exchange rate on initial recognition of the related asset, expense or income on the
derecognition of a non-monetary asset or non-monetary liability relating to an advance consideration, the date
of initial transaction is the date on which the Group initially recognises the non-monetary asset or non-monetary
liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Group
determines the transaction date for each payment or receipt of the advance consideration.
As at the end of the reporting period, the assets and liabilities of the Company and any foreign operations are
translated into RMB at the exchange rates prevailing at the end of the reporting period and the profit or loss of
the Company is translated into RMB at the exchange rates that approximate to those prevailing at the dates of the
transactions. The resulting exchange differences are recognised in other comprehensive income and accumulated
in the exchange reserve. On disposal of a foreign operation, the component of other comprehensive income
relating to that particular foreign operation is recognised in profit or loss.
For the purpose of the consolidated statement of cash flows, the cash flows of the Company and any foreign
operations are translated into RMB at the exchange rates ruling at the dates of the cash flows. Frequently
recurring cash flows of the Company which arise throughout the year are translated into RMB at the weighted
average exchange rates for the year.
102
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group
’
s financial information requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could
result in outcomes that could require a material adjustment to the carrying amounts of the assets or liabilities
affected in the future.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the
reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year, are described below.
Provision for expected credit losses (
“
ECLs
”
) on trade receivables and other receivables
The Group uses a provision matrix to calculate ECLs for trade receivables and other receivables. The provision rates
are based on days past due for groupings of various customer segments that have similar loss patterns (i.e. by
service type, customer type and rating).
The provision matrix is initially based on the Group
’
s historical observed default rates. The Group will calibrate
the matrix to adjust the historical credit loss experience with forward-looking information. For instance, if forecast
economic conditions are expected to deteriorate over the next year which can lead to an increased number of
defaults in the property development sector, the historical default rates are adjusted. At each reporting date, the
historical observed default rates are updated and changes in the forward-looking estimates are analysed.
The assessment of the correlation among historical observed default rates, forecast economic conditions and
ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and forecast economic
conditions. The Group
’
s historical credit loss experience and forecast of economic conditions may also not be
representative of a customer
’
s actual default in the future. The information about the ECLs on the Group
’
s trade
receivables and other receivables is disclosed in notes 19 and 20 to the financial statements.
Impairment of non-financial assets
The Group assesses whether there are any indicators of impairment for all non-financial assets (including the right-
of-use assets) at the end of each reporting period. An impairment exists when the carrying value of an asset or a
cash-generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and
its value in use. The calculation of the fair value less costs of disposal is based on available data from binding sales
transactions in an arm
’
s length transaction of similar assets or observable market prices less incremental costs for
disposing of the asset. When value in use calculations are undertaken, management must estimate the expected
future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate
the present value of those cash flows.
Annual Report 2021
103
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (Continued)
Estimation uncertainty (Continued)
Leases — Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in a lease, and therefore, it uses an incremental
borrowing rate (
“
IBR
”
) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay
to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value
to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group
“
would
have to pay
”
, which requires estimation when no observable rates are available (such as for subsidiaries that do
not enter into financing transactions) or when it needs to be adjusted to reflect the terms and conditions of the
lease (for example, when leases are not in the subsidiary
’
s functional currency). The Group estimates the IBR using
observable inputs (such as market interest rates) when available and is required to make certain entity-specific
estimates (such as the subsidiary
’
s stand-alone credit rating).
Estimation of fair value of investment properties
In the absence of current prices in an active market for similar leased properties, the Group considers information
from discounted cash flow projections based on reliable estimates of future cash flows, supported by the terms
of any existing lease and other contracts and (when possible) by external evidence such as current market rents
for similar properties in the same location and condition, and using discount rates that reflect current market
assessments of the uncertainty in the amount and timing of the cash flows.
The carrying amount of investment properties at 31 December 2021 was RMB9,379,000 (2020: RMB10,590,000).
Further details, including the key assumptions used for the fair value measurement, are given in note 14 to the
financial statements.
Useful lives of property, plant and equipment
The Group
’
s management determines the estimated useful lives. This estimate is based on the historical experience
of the actual useful lives of property, plant and equipment of similar nature and functions. Management will
increase the depreciation charge where useful lives are less than previously estimated lives, or will write off or
write down technically obsolete or non-strategic assets that have been abandoned or sold. Periodic review could
result in a change of depreciable lives and therefore depreciation charge in the future periods.
Recognition of deferred tax liabilities for withholding taxes
Deferred tax liabilities are recognised for withholding tax levied on dividends declared to foreign investors from
the foreign investment enterprise established in Mainland China. Significant management judgement is required to
determine the amount of deferred tax liabilities that can be recognised, based upon the likely dividends declared.
Further details are contained in note 17 to the financial statements.
104
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
4. OPERATING SEGMENT INFORMATION
The Group is principally engaged in the provision of property management services, value-added services to non-
property owners, community value-added services. Information reported to the Group
’
s chief operating decision
maker, for the purpose of resource allocation and performance assessment, focuses on the operating results of
the Group as a whole as the Group
’
s resources are integrated and no discrete operating segment information is
available. Accordingly, no operating segment information is presented.
Geographical information
The Group
’
s revenue from customers is derived solely from its operations and services rendered in Mainland
China, and the non-current assets of the Group are located in Mainland China.
Information about major customers
For the years ended 31 December 2021, RMB525,971,000 (2020: RMB260,668,000) of revenue was derived from
the ultimate holding company and the fellow subsidiaries. Other than the revenue from the ultimate holding
company and the fellow subsidiaries, no revenue derived from sales to a single customer or a group of customers
under common control amounted to 10% or more of the Group
’
s revenue for the year ended 31 December 2021
(2020: Nil).
5. REVENUE, OTHER INCOME AND GAINS
An analysis of revenue is as follows:
2021 2020
RMB
’
000 RMB
’
000
Revenue from contracts with customers
1,509,746 940,323
Revenue from other sources
Gross rental income from investment properties operating leases:
Fixed lease payments 5,779 3,887
1,515,525 944,210
Annual Report 2021
105
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
5. REVENUE, OTHER INCOME AND GAINS (Continued)
Revenue from contracts with customers
(a) Disaggregated revenue information
2021 2020
RMB
’
000 RMB
’
000
Types of services
Property management services 823,229 567,481
Value-added services to non-property owners 539,271 294,401
Community value-added services 147,246 78,441
Total revenue from contracts with customers 1,509,746 940,323
Timing of revenue recognition
Revenue from contracts with customers recognised over time 1,343,506 909,473
Revenue from contracts with customers recognised at a point in time 166,240 30,850
Total 1,509,746 940,323
Contract liabilities
The Group recognised the following revenue-related contract liabilities:
2021 2020
RMB
’
000 RMB
’
000
Third parties 290,680 183,829
Related parties
(note 29)
23,257 22,562
Contract liabilities 313,937 206,391
Contract liabilities of the Group mainly arise from the advance payments received from customers for
services yet to be provided. The increase in contract liabilities as at 31 December 2021 was mainly due
to the increase in short term advances received from customers in relation to the provision of property
management services at the end of the year.
106
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
5. REVENUE, OTHER INCOME AND GAINS (Continued)
Revenue from contracts with customers (Continued)
(a) Disaggregated revenue information (Continued)
Contract liabilities (Continued)
The following table shows the revenue related to carrying forward contract liabilities recognised during the
years ended 31 December 2021 and 2020:
2021 2020
RMB
’
000 RMB
’
000
Revenue recognised that was included in the contract liability
balance at the beginning of the reporting period: 205,447 146,917
(b) Performance obligations
Information about the Group
’
s performance obligations is summarised below:
For residential property management services and non-residential property management services, the
Group recognises revenue in the amount that equals to the rights to invoices which corresponds directly
with the value to the customers of the Group
’
s performance to date. The Group has elected the practical
expedient of not to disclose the remaining performance obligations for these types of contracts because the
performance obligation is part of a contract that has an original expected duration of one year or less, and
there was unsatisfied performance obligation at the end of the respective periods.
An analysis of other income and gains is as follows:
2021 2020
RMB
’
000 RMB
’
000
Other income and gains
Bank interest income 3,433 1,313
Loan interest income 32,408 63,750
Tax incentives on value-added tax 7,042 5,458
Government grants 2,102 3,364
Others 527 1,023
45,512 74,908
Annual Report 2021
107
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
6. PROFIT BEFORE TAX
The Group
’
s profit before tax is arrived at after charging/(crediting):
2021 2020
Notes RMB
’
000 RMB
’
000
Cost of services provided 1,045,491 709,421
Depreciation of property, plant and equipment 13 9,631 5,369
Depreciation of right-of-use assets 15 9,253 3,750
Amortisation of intangible assets 16 3,102 1,795
Listing expenses 16,048 –
Auditors
’
remuneration 254 137
Fair value loss on investment properties* 14 1,211 1,050
Loss on disposal of items of property, plant and equipment, net* 510 17
Penalties*^ 3,384 15
Employee benefit expense (excluding directors
’
and
chief executive
’
s remuneration
(note 8)
):
Wages and salaries 385,251 308,755
Pension scheme contributions 35,243 5,323
Equity-settled share option expense 1,237 3,185
421,731 317,263
Impairment losses/(write-back of impairment losses) of
financial assets*:
– Trade receivables 19 2,262 372
– Other receivables 20 1,831 (196)
Rental expense
Short-term leases and low-value leases 15(b) 9,663 8,473
Impairment of inventories* 467 –
* These items are included in
“
Other expenses, net
”
in the consolidated statements of profit or loss.
^
The penalties for the year ended 31 December 2021 were the fines charged by relevant local government
authorities for unauthorised mark-up of electricity fee charged to the tenants and property owners of the Group.
108
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
7. FINANCE COSTS
An analysis of finance costs is as follows:
2021 2020
RMB
’
000 RMB
’
000
Interest on other borrowings 32,737 63,750
Interest on lease liabilities
(note 15(b)
) 970 436
33,707 64,186
8. DIRECTORS
’
AND CHIEF EXECUTIVE
’
S REMUNERATION
Directors
’
and chief executive
’
s remuneration for the year, disclosed pursuant to the Listing Rules, section 383(1)
(a), (b), (c) and (f) of the Hong Kong Companies Ordinance and Part 2 of the Companies (Disclosure of Information
about Benefits of Directors) Regulation, is as follows:
2021 2020
RMB
’
000 RMB
’
000
Fees:
Directors – –
Other emoluments:
Salaries, allowances and benefits in kind 1,871 902
Performance related bonuses 1,474 1,444
Equity-settled share option expense* 409 446
Pension scheme contributions 57 19
3,811 2,811
* During the years ended 31 December 2016 and 31 December 2019, Mr. Xie Wei was granted share options, in
respect of his services to the Group and China Jinmao Group, under the share option scheme of China Jinmao
Group. The fair value of such options, which has been recognised in profit or loss over the vesting period, was
determined as at the date of grant and the amount included in the financial statements for the current year is
included in the above directors
’
and chief executive
’
s remuneration disclosures.
(a) Independent non-executive directors
Dr. Chen Jieping, Dr. Han Jian and Mr. Sincere Wong were appointed as independent non-executive
directors of the Company on 10 March 2022. There was no emolument payable to the independent non-
executive directors during the years ended 31 December 2021 and 2020.
Annual Report 2021
109
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
8. DIRECTORS
’
AND CHIEF EXECUTIVE
’
S REMUNERATION (Continued)
(b) Executive directors
Salaries,
allowances
and benefits
in kind
Performance
related
bonuses
Equity-settled
share option
expense
Pension
scheme
contributions
Total
remuneration
RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000
2021
Executive directors:
Mr. Xie Wei
(note (i))
903 1,408 245 26 2,582
Ms. Zhou Liye
(note (ii))
968 66 164 31 1,229
Mr. Li Congrui
(note (iii))
– – – – –
1,871 1,474 409 57 3,811
2020
Executive directors:
Mr. Xie Wei
(note (i))
902 1,444 446 19 2,811
Ms. Zhou Liye
(note (ii))
– – – – –
Mr. Li Congrui
(note (iii))
– – – – –
902 1,444 446 19 2,811
Notes:
(i) Mr. Xie Wei was appointed as an executive director and the chief executive officer of the Company on 26
August 2021. Certain emoluments of Mr. Xie Wei were paid by China Jinmao Group and recorded in profit
or loss of the Group in relation to his services rendered to the Group for the years ended 31 December 2021
and 2020.
(ii) Ms. Zhou Liye was appointed as an executive director of the Company on 26 August 2021. The emoluments
of Ms. Zhou Liye before her appointment as executive director of the Company were borne by China Jinmao
Group as she did not provide services to the Group for such period.
(iii) The first director of the Company was Mr. Li Congrui, who was appointed on 14 September 2020 and
resigned with effect from 26 August 2021. The emoluments of Mr. Li Congrui were borne by China Jinmao
Group as he did not provide services to the Group during the years ended 31 December 2021 and 2020.
(c) Non-executive directors
Mr. Jiang Nan, Ms. He Yamin and Ms. Qiao Xiaojie were appointed as non-executive directors of the
Company on 26 August 2021. There was no emolument payable to the non-executive directors during the
years ended 31 December 2021 and 2020.
No directors waived any emoluments during the years ended 31 December 2021 and 2020.
110
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
9. FIVE HIGHEST PAID EMPLOYEES
The five highest paid employees during the year included one director (2020: one director), details of whose
remuneration are set out in note 8 above. Details of the remuneration for the year of the remaining four (2020:
four) highest paid employees who are neither a director nor chief executive of the Company are as follows:
2021 2020
RMB
’
000 RMB
’
000
Salaries, allowances and benefits in kind 3,049 2,847
Performance related bonuses 3,383 2,383
Equity-settled share option expense 491 1,556
Pension scheme contributions 216 82
7,139 6,868
The number of non-director and non-chief executive highest paid employees whose remuneration fell within the
following bands is as follows:
Number of employees
2021 2020
HK$1,500,001 to HK$2,000,000 2 2
HK$2,000,001 to HK$2,500,000 2 2
4 4
During the year ended 31 December 2021, no highest paid employees waived or agreed to waive any
remuneration (2020: Nil).
In prior years, share options were granted to certain non-director and non-chief executive highest paid employees
in respect of their services to the Group, under the share option scheme of China Jinmao Group. The fair value
of such options, which has been recognised in the statement of profit or loss over the vesting period, was
determined as at the date of grant and the amounts included in the financial statements for the years ended 31
December 2021 and 2020 are included in the above non-director and non-chief executive highest paid employees
’
remuneration disclosures.
Annual Report 2021
111
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
10. INCOME TAX
The Group is subject to income tax on an entity basis on profits arising in or derived from the tax jurisdictions in
which members of the Group are domiciled and operate. The Company is not liable for income tax as it did not
generate any assessable profits arising in Hong Kong during the year.
The income tax provision of the Group in respect of its operation in Mainland China was calculated at the tax
rate of 25% on the assessable profits for the reporting period, if applicable, based on the existing legislation,
interpretations and practice in respect thereof.
2021 2020
RMB
’
000 RMB
’
000
Current 71,541 31,384
Deferred
(note 17)
(2,417) (983)
Total tax charge for the year 69,124 30,401
A reconciliation of the tax expense applicable to profit before tax at the statutory rates for the jurisdictions in
which the Company
’
s subsidiaries are domiciled to the tax charge for the year is as follows:
2021 2020
Hong Kong
Mainland
China Total
Mainland
China
RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000
Profit before tax (15,312) 263,447 248,135 107,525
Tax at the statutory tax rate (2,526) 65,862 63,336 26,881
Tax effect of preferential tax rates – (587) (587) –
Adjustments in respect of current tax of
previous years – (201) (201) –
Expenses not deductible for tax 2,526 2,918 5,444 2,625
Tax losses not recognised – 1,132 1,132 895
Tax charge for the year – 69,124 69,124 30,401
112
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
11. DIVIDENDS
(a) Dividends paid or declared by the Company
No dividends have been paid or declared by board of directors the Company during the year ended 31
December 2021.
(b) Dividends paid or declared by the subsidiaries of the Company to their then
shareholders
On 31 July 2020, Sinochem Jinmao declared dividends with an aggregated amount of RMB78,675,000 to its
then shareholders, China Jinmao Group and Beijing Chemsunny Property Co., Ltd. which is a wholly-owned
subsidiary of China Jinmao Group.
On 30 November 2020, Sinochem Jinmao declared dividends with an aggregated amount of RMB44,982,000
to its then shareholders, China Jinmao Group and Beijing Chemsunny Property Co., Ltd. which is a wholly-
owned subsidiary of China Jinmao Group.
On 30 November 2020, Jinmao (Shanghai) Property Management Co., Ltd. declared a dividend in the
amount of RMB28,160,000 to its then shareholder, China Jin Mao Group Co., Ltd., which is a wholly-owned
subsidiary of China Jinmao Group.
Except for the dividends declared by Jinmao (Shanghai) Property Management Co., Ltd,. the dividends
declared by the subsidiaries of the Company to their then shareholders have not been paid as at 31
December 2021.
12. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF
THE PARENT
The calculation of the basic earnings per share amounts is based on the profit for the year attributable to ordinary
equity holders of the parent, and the weighted average number of ordinary shares of 800,000,000 (2020:
800,000,000) in issue during the year, as adjusted to reflect those 799,999,998 ordinary shares of the Company
issued under the bonus issue occurred after the reporting period, as if the issuance of these additional shares
under the bonus issue had been completed throughout the years ended 31 December 2021 and 2020.
2021 2020
RMB
’
000 RMB
’
000
Earnings
Profit attributable to ordinary equity holders of the parent used in
the basic earnings per share calculation 177,977 77,124
Number of shares
2021 2020
Shares
Weighted average number of ordinary shares in issue during the year
used in the basic earnings per share calculation 800,000,000 800,000,000
Annual Report 2021
113
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
12. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF
THE PARENT (Continued)
The Group had no potentially dilutive ordinary shares in issue during the years ended 31 December 2021 and
2020.
13. PROPERTY, PLANT AND EQUIPMENT
Plant and
machinery
Leasehold
improvements
Furniture,
fixtures
and office
equipment
Motor
vehicles Total
RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000
31 December 2021
At 1 January 2021
Cost 12,849 9,140 28,988 991 51,968
Accumulated depreciation (2,977) (2,628) (12,015) (733) (18,353)
Net carrying amount 9,872 6,512 16,973 258 33,615
At 1 January 2021, net of
accumulated depreciation 9,872 6,512 16,973 258 33,615
Additions 7,842 13,181 10,132 355 31,510
Disposals (28) (412) (321) (29) (790)
Depreciation provided during
the year (2,089) (2,767) (4,688) (87) (9,631)
At 31 December 2021, net of
accumulated depreciation 15,597 16,514 22,096 497 54,704
At 31 December 2021:
Cost 20,506 21,246 38,266 1,312 81,330
Accumulated depreciation (4,909) (4,732) (16,170) (815) (26,626)
Net carrying amount 15,597 16,514 22,096 497 54,704
114
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
13. PROPERTY, PLANT AND EQUIPMENT (Continued)
Plant and
machinery
Leasehold
improvements
Furniture,
fixtures
and office
equipment
Motor
vehicles Total
RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000
31 December 2020
At 1 January 2020:
Cost 5,361 5,834 18,852 873 30,920
Accumulated depreciation (2,431) (1,189) (8,707) (704) (13,031)
Net carrying amount 2,930 4,645 10,145 169 17,889
At 1 January 2020, net of
accumulated depreciation 2,930 4,645 10,145 169 17,889
Additions 7,490 3,306 10,198 118 21,112
Disposals – – (17) – (17)
Depreciation provided during
the year (548) (1,439) (3,353) (29) (5,369)
At 31 December 2020, net of
accumulated depreciation 9,872 6,512 16,973 258 33,615
At 31 December 2020:
Cost 12,849 9,140 28,988 991 51,968
Accumulated depreciation (2,977) (2,628) (12,015) (733) (18,353)
Net carrying amount 9,872 6,512 16,973 258 33,615
14. INVESTMENT PROPERTIES
Leased properties
2021 2020
RMB
’
000 RMB
’
000
Carrying amount at 1 January 10,590 11,640
Loss from a fair value adjustment
(note 6)
(1,211) (1,050)
Carrying amount at 31 December 9,379 10,590
(a) Valuation processes of the Group
The Group
’
s investment properties are carpark spaces situated in Mainland China. The Group measures
its investment properties at fair value. The Group
’
s investment properties were revalued on 31 December
2021 based on valuations performed by Beijing Zhuoxindahua Appraisal Co., Ltd., an independent and
professionally qualified valuer, at RMB9,379,000.
The investment properties are leased to third parties under operating leases, further summary details of
which are included in note 15 to the financial statements.
Annual Report 2021
115
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
14. INVESTMENT PROPERTIES (Continued)
(b) Valuation techniques
The valuation methodology adopted in valuation is the discounted cash flow method.
Under the discounted cash flow method, fair value is estimated using assumptions regarding the benefits
and liabilities of ownership over the asset
’
s life including an exit or terminal value. This method involves the
projection of a series of cash flows on a property interest. A market-derived discount rate is applied to the
projected cash flow in order to establish the present value of the income stream associated with the asset.
The exit yield is normally separately determined and differs from the discount rate.
The duration of the cash flows and the specific timing of inflows and outflows are determined by events
such as rent reviews, lease renewal and related reletting, redevelopment or refurbishment. The appropriate
duration is driven by market behaviour that is a characteristic of the class of property. The periodic cash
flow is estimated as gross income less vacancy, non-recoverable expenses, collection losses, lease incentives,
maintenance costs, agent and commission costs and other operating and management expenses. The series
of periodic net operating income, along with an estimate of the terminal value anticipated at the end of the
projection period, is then discounted.
A significant increase (decrease) in the estimated rental value and the market rent growth rate per annum
in isolation would result in a significant increase (decrease) in the fair value of the investment properties. A
significant increase (decrease) in the discount rate in isolation would result in a significant decrease (increase)
in the fair value of the investment properties. Generally, a change in the assumption made for the estimated
rental value is accompanied by a directionally similar change in the rental growth per annum and the
discount rate.
(c) Information about fair value measurements using significant unobservable
inputs (Level 3)
2021 2020
Estimated rental value (RMB per square metre per annum) 4,200 3,647
Rental growth per annum 15% (36%)
Discount rate 6.4% 6.4%
(d) During the reporting period, there were no transfers of fair value measurements between Level 1 and Level
2 and no transfers into or out of Level 3.
116
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
15. LEASES
The Group as a lessee
The Group has lease contracts for various items of office properties and staff quarters and other equipment used
in its operations. Leases of office properties and staff quarters generally have lease terms between 1 and 5 years.
Other equipment generally has lease terms of 12 months or less and/or is individually of low value. Generally, the
Group is restricted from assigning and subleasing the leased assets outside the Group.
(a) Right-of-use assets and lease liabilities
The carrying amounts of the Group
’
s right-of-use assets and lease liabilities and the movements during the
year are as follows:
Right-of-use
assets
Lease
liabilities
Office
properties and
staff quarters
RMB
’
000 RMB
’
000
At 1 January 2020 2,433 5,463
New leases 17,287 15,499
Depreciation charge (3,750) –
Accretion of interest recognised during the year – 436
Payments – (3,602)
At 31 December 2020 15,970 17,796
At 1 January 2021 15,970 17,796
New leases 25,756 24,366
Depreciation charge (9,253) –
Accretion of interest recognised during the year – 970
Payments – (8,818)
At 31 December 2021 32,473 34,314
Annual Report 2021
117
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
15. LEASES (Continued)
The Group as a lessee (Continued)
(a) Right-of-use assets and lease liabilities (Continued)
2021 2020
RMB
’
000 RMB
’
000
Lease liabilities analysed into:
Current portion 8,972 5,572
Non-current portion 25,342 12,224
Total 34,314 17,796
(b) The amounts recognised in profit or loss in relation to leases are as follows:
2021 2020
RMB
’
000 RMB
’
000
Interest on lease liabilities
(note 7)
970 436
Depreciation charge of right-of-use assets
(note 6)
9,253 3,750
Expense relating to short-term leases and leases of
low-value assets
(note 6)
9,663 8,473
Total amount recognised in profit or loss 19,886 12,659
(c) The total cash outflow for leases is disclosed in note 27(c) to the financial statements.
The Group as a lessor
The Group leases its investment properties (note 14) consisting of car park spaces in Mainland China under
operating lease arrangements. The terms of the leases generally require the tenants to provide for periodic
rent adjustments according to the then prevailing market conditions. Rental income recognised by the Group
during the year was RMB5,779,000 (2020: RMB3,887,000), details of which are included in note 5 to the
financial statements.
118
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
16. INTANGIBLE ASSETS
Computer
software
RMB
’
000
31 December 2021
At 1 January 2021:
Cost 9,594
Accumulated amortisation (2,510)
Net carrying amount 7,084
Cost at 1 January 2021, net of accumulated amortisation 7,084
Additions 2,410
Amortisation provided during the year
(note 6)
(3,102)
At 31 December 2021 6,392
At 31 December 2021:
Cost 12,003
Accumulated amortisation (5,611)
Net carrying amount 6,392
31 December 2020
At 1 January 2020:
Cost 6,877
Accumulated amortisation (722)
Net carrying amount 6,155
Cost at 1 January 2020, net of accumulated amortisation 6,155
Additions 2,753
Disposals (29)
Amortisation provided during the year
(note 6)
(1,795)
At 31 December 2020 7,084
At 31 December 2020:
Cost 9,594
Accumulated amortisation (2,510)
Net carrying amount 7,084
Annual Report 2021
119
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
17. DEFERRED TAX ASSETS AND LIABILITIES
The movements in deferred tax liabilities and assets are as follows:
Deferred tax liabilities
Revaluation of
investment
properties
Right-of-use
assets Total
RMB
’
000 RMB
’
000 RMB
’
000
At 1 January 2020 2,910 401 3,311
Deferred tax (credited)/charged to profit or loss
during the year (263) 2,921 2,658
At 31 December 2020 and 1 January 2021 2,647 3,322 5,969
Deferred tax (credited)/charged to profit or loss
during the year (303) 3,872 3,569
At 31 December 2021 2,344 7,194 9,538
Deferred tax assets
Allowance for
impairment
Unrealised
profits from
intra group
transactions
Lease
liabilities Total
RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000
At 1 January 2020 1,577 – 1,355 2,932
Deferred tax credited to profit or loss
during the year 44 576 3,021 3,641
At 31 December 2020 and 1 January 2021 1,621 576 4,376 6,573
Deferred tax credited to profit or loss
during the year 1,140 715 4,131 5,986
At 31 December 2021 2,761 1,291 8,507 12,559
120
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
17. DEFERRED TAX ASSETS AND LIABILITIES (Continued)
Deferred tax assets (Continued)
For presentation purposes, certain deferred tax assets and liabilities have been offset in the statements of financial
position. The following is an analysis of the deferred tax balances of the Group for financial reporting purposes:
2021 2020
RMB
’
000 RMB
’
000
Net deferred tax assets recognised in the consolidated statement of
financial position 4,708 2,457
Net deferred tax liabilities recognised in the consolidated statements of
financial position (1,687) (1,853)
Net deferred tax assets 3,021 604
Pursuant to the PRC Corporate Income Tax Law, a 10% withholding tax is levied on dividends declared to foreign
investors from the foreign investment enterprises established in Mainland China. The requirement is effective from
1 January 2008 and applies to earnings after 31 December 2007. A lower withholding tax rate may be applied
if there is a tax treaty between Mainland China and the jurisdiction of the foreign investors. For the Group, the
applicable rate is 10%. The Group is therefore liable for withholding taxes on dividends distributed by those
subsidiaries established in Mainland China in respect of earnings generated from 1 January 2008.
At 31 December 2021, no deferred tax has been recognised for withholding taxes that would be payable on the
unremitted earnings that are subject to withholding taxes of the Group
’
s subsidiaries established in Mainland
China. In the opinion of the directors of the Company, the Group
’
s fund will be retained in Mainland China for
the expansion of the Group
’
s operation, so it is not probable that these subsidiaries will distribute such earnings
in the foreseeable future. The aggregate amounts of temporary differences associated with investments in
subsidiaries in Mainland China for which deferred tax liabilities have not been recognised totalled approximately
RMB199,025,000 as at 31 December 2021 (2020: RMB7,775,000).
The Group has not recognised deferred tax assets in respect of tax losses arising in the PRC of RMB5,168,000
(2020: RMB1,261,000), that will expire in one to five years, as they have arisen in subsidiaries that have been loss-
making for some time and it is not considered probable that taxable profits will be available against which the tax
losses can be utilised.
18. INVENTORIES
2021 2020
RMB
’
000 RMB
’
000
Consumables and spare parts 4,231 4,801
General merchandise 292 398
Total 4,523 5,199
Annual Report 2021
121
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
19. TRADE RECEIVABLES
2021 2020
RMB
’
000 RMB
’
000
Related parties
(note 29)
281,135 129,148
Third parties 139,225 78,186
Trade receivables 420,360 207,334
Less: Allowance for impairment of trade receivables (5,883) (3,621)
414,477 203,713
Trade receivables mainly represent receivables from property management services and other related services
to property developers. For trade receivables from property management services, the Group charges property
management fees on a monthly or quarterly basis and the payment is generally due upon the issuance of demand
notes. For trade receivables from other services to property developers, the Group
’
s trading terms with its
customers are mainly on credit and the credit period is generally 90 to 180 days. The Group seeks to maintain
strict control over its outstanding receivables. Overdue balances are reviewed regularly by management. Other
than trade balances due from Sinochem Group and its subsidiaries, the Group
’
s trade receivables relate to a large
number of diversified customers, there is no significant concentration of credit risk. The Group does not hold
any collateral or other credit enhancements over its trade receivable balances. Trade receivables are non-interest-
bearing.
The amounts due from the related parties are repayable on credit terms similar to those offered to other major
customers of the Group.
An ageing analysis of the trade receivable as at the end of each of the reporting period, based on the invoice date
and net of loss allowance, is as follows:
2021 2020
RMB
’
000 RMB
’
000
Within 1 year 377,319 172,392
1 to 2 years 22,743 26,192
2 to 3 years 11,247 2,667
Over 3 years 3,168 2,462
414,477 203,713
122
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
19. TRADE RECEIVABLES (Continued)
The movements in provision for impairment of trade receivables are as follows:
2021 2020
RMB
’
000 RMB
’
000
At beginning of the year 3,621 3,249
Impairment losses recognised
(note 6)
2,262 372
At end of the year 5,883 3,621
As at the end of the year, all trade receivables were denominated in RMB, and the fair values of trade receivables
approximated to their carrying amounts.
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit
losses. The provision rates are based on days past due for groupings of various customer segments with similar
loss patterns (i.e., by customer type). The calculation reflects the probability-weighted outcome, the time value
of money and reasonable and supportable information that is available at the reporting date about past events,
current conditions and forecasts of future economic conditions.
Set out below is the information about the credit risk exposure on the Group
’
s trade receivables using a provision
matrix:
At 31 December 2021
Third parties – past due
Less than
1 year
1 to 2
years
2 to 3
years
Over 3
years
Related
parties Total
Expected credit loss rate 1.60% 4.66% 20.30% 73.48% 0.07% 1.40%
Gross carrying amount (RMB
’
000) 113,506 16,127 7,356 2,236 281,135 420,360
Expected credit losses (RMB
’
000) (1,812) (751) (1,493) (1,643) (184) (5,883)
At 31 December 2020
Third parties – past due
Less than 1 to 2 2 to 3 Over 3 Related
1 year years years years parties Total
Expected credit loss rate 1.61% 2.42% 9.21% 87.74% – 1.75%
Gross carrying amount (RMB
’
000) 45,226 26,269 4,603 2,088 129,148 207,334
Expected credit losses (RMB
’
000) (730) (635) (424) (1,832) – (3,621)
The expected credit loss of trade receivables from related parties was immaterial considering there were no recent
history of default and no significant credit risks of the related parties of the Group.
Annual Report 2021
123
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
20. PREPAYMENTS, OTHER RECEIVABLES AND OTHER ASSETS
2021 2020
RMB
’
000 RMB
’
000
Current
Amounts due from related parties
(note 29)
160,377 569,813
Deposits of ABS arrangement
(note)
– 5,837
Prepayments 17,780 19,410
Deposits 11,688 8,040
Advances to employees 1,531 4,265
Other receivables 32,315 14,966
Payments on behalf of residents/tenants 41,004 23,415
Others 5,979 –
270,674 645,746
Impairment allowance (3,381) (1,550)
267,293 644,196
Non-current
Amounts due from related parties
(note 29)
– 936,992
Other assets 2,693 4,601
2,693 941,593
Note
: The amount represented the deposits placed by the Group for the purpose of the ABS arrangement as further
defined and disclosed in note 24 to the financial statements.
Payments on behalf of residents/tenants represent the current accounts with the residents/tenants of communities/
properties managed by the Group. Amounts due from related parties mainly represent performance guarantees
placed with related parties and receivables in relation to payments made on behalf of related parties. The Group
has assessed that the credit risk of the financial assets included in the above balances excluding payments on
behalf of residents/tenants and amounts due from related parties has not increased significantly since initial
recognition and measured the impairment based on 12-month expected credit loss. The Group considers the
historical loss rate and adjusts for forward-looking macro-economic data in calculating the expected credit loss
rate. As at 31 December 2020 and 2021, the Group estimated that the expected loss rate and the loss allowance
for these receivables were minimal under the 12-month expected loss method.
124
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
20. PREPAYMENTS, OTHER RECEIVABLES AND OTHER ASSETS (Continued)
The movements in provision for impairment of payments on behalf of residents/tenants and amounts due from
related parties are as follows:
2021 2020
RMB
’
000 RMB
’
000
At beginning of the year 1,550 1,746
Impairment losses recognised in profit or loss/(write-back of
impairment losses)
(note 6)
1,831 (196)
At end of the year 3,381 1,550
Expected credit losses are estimated by applying a loss rate approach with reference to the days past due for
groupings of parties with similar loss patterns. The loss rate is adjusted to reflect the current conditions and
forecasts of future economic conditions, as appropriate.
The following table provides information about the exposure to credit risk and ECLs for payments on behalf of
residents/tenants and amounts due from related parties which are assessed collectively based on an estimated
average credit loss rate as at 31 December 2020 and 2021.
31 December 2021 31 December 2020
Category
Average
loss rate
Gross
carrying
amount
Impairment
loss
allowance
Average
loss rate
Gross
carrying
amount
Impairment
loss
allowance
RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000
Credit-impaired 8.25% 41,004 3,381 6.62% 23,415 1,550
21. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
2021 2020
RMB
’
000 RMB
’
000
Cash and bank balances 554,897 270,818
Less: Restricted cash (1,278) –
Cash and cash equivalents 553,619 270,818
Cash and bank balances denominated in RMB 554,897 270,818
Annual Report 2021
125
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
21. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH (Continued)
The RMB is not freely convertible into other currencies, however, under Mainland China
’
s Foreign Exchange
Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the
Group is permitted to exchange RMB for other currencies through banks authorised to conduct foreign exchange
business.
Cash at banks earns interest at floating rates based on daily bank deposit rates. The bank balances are deposited
with creditworthy banks with no recent history of default.
Restricted cash represented cash at bank frozen for performance guarantee deposits and pre-litigation preservation
of property.
Included in the Group
’
s cash and cash equivalents were bank balances of RMB369,130,000 as at 31 December
2021 (2020: RMB120,490,000) placed with Sinochem Group Finance Co., Ltd. (
“
Sinochem Finance
”
), which
is a subsidiary of Sinochem Group and a financial institution approved by the People
’
s Bank of China. The
interest rates on these deposits ranged from 0.35% to 1.90% per annum. Further details of the interest income
attributable to the deposits placed with Sinochem Finance are set out in note 29 to the financial statements.
22. TRADE PAYABLES
2021 2020
RMB
’
000 RMB
’
000
Trade payables
– Related parties
(note 29)
4,440 687
– Third parties 166,504 111,349
170,944 112,036
An ageing analysis of the Group
’
s trade payables at the end of reporting period, based on the invoice date, is as
follows:
2021 2020
RMB
’
000 RMB
’
000
Within 1 year 163,366 107,183
1 to 2 years 4,106 1,459
2 to 3 years 532 1,665
More than 3 years 2,940 1,729
170,944 112,036
Trade payables are unsecured, interest-free and normally settled within 90 days.
126
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
23. OTHER PAYABLES AND ACCRUALS
2021 2020
Notes RMB
’
000 RMB
’
000
Current
Amounts due to related parties (i) 233,107 231,567
Receipts on behalf of residents/tenants 158,326 132,938
Deposits and temporary receipts 69,520 48,259
Payroll and welfare payables 46,844 30,021
Other tax payables 46,821 23,283
Other payables (ii) 75,212 54,573
629,830 520,641
Non-current
Dividend payable – 123,657
Notes:
(i) The amounts due to related parties included dividend payable to related parties of RMB118,402,000 as at 31
December 2021 (2020: RMB28,160,000).
(ii) The other payables are unsecured, interest-free and have an average term of three months.
Annual Report 2021
127
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
24. INTEREST-BEARING BORROWINGS
2021 2020
Effective
interest
rate (%) Maturity RMB
’
000
Effective
interest
rate (%) Maturity RMB
’
000
Current
Current portion of long term
loans from third parties N/A N/A – 4.88-5.50 2021 144,000
Non-current
Loans from third parties N/A N/A – 4.88-5.50 2027 936,992
– 1,080,992
2021 2020
RMB
’
000 RMB
’
000
Analysed into:
Loans repayable:
Within one year or on demand – 144,000
In the second year – 153,000
In the third to fifth years, inclusive – 517,000
Beyond five years – 266,992
– 1,080,992
The interest-bearing borrowings of the Group as at 31 December 2020 represented the asset-backed securities
arrangement (
“
ABS
”
) of the Group to transfer the right of receipt of the management fees, including the future
management fee receivables, from certain properties managed by the Group, which are denominated in RMB
and bear interest at annual rates of 4.88% to 5.50%. Under the ABS arrangement, the Group is still exposed to
default risks of the management fee receivables after the transfer, and accordingly, it continued to recognise the
full carrying amounts of the management fee receivables. The ABS arrangement is accounted for as borrowings of
the Group, and these borrowings are due and repayable by several tranches before 15 July 2027 and can be early
repaid before the expected due date at the option of the Group at certain predetermined prices in certain specific
periods prior to the maturity date of each tranche. On 15 July 2021, the Group early repaid all the remaining
borrowings under the ABS arrangement.
128
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
25. SHARE CAPITAL
2021 2020
RMB
’
000 RMB
’
000
Issued and fully paid:
2 (2020: 1) ordinary shares 66,947 –*
* The amount is less than RMB1,000.
A summary of movements in the Company
’
s share capital is as follows:
Number of
shares in issue Share capital
RMB
’
000
On 14 September 2020 (the date of incorporation) – –
New issue
(note (a))
1 –*
At 31 December 2020 and 1 January 2021 1 –*
New issue
(note (b))
1 66,947
At 31 December 2021 2 66,947
* The amount is less than RMB1,000.
Notes:
(a) The Company was incorporated on 14 September 2020 and one ordinary share was issued on the same date to
China Jinmao Group.
(b) On 13 April 2021, one ordinary share was further allotted and issued as fully paid to China Jinmao Group, to
acquire for China Jinmao Group
’
s 85% equity interest in Sinochem Jinmao as part of the Reorganisation, and the
issued share capital of the Company was increased to RMB66,947,000.
Annual Report 2021
129
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
26. RESERVES
The amounts of the Group
’
s reserves and the movements therein for the current and prior years are presented in
the consolidated statements of changes in equity.
(a) Merger reserve
The merger reserve of the Group represents the difference between the aggregate of the paid-up share
capital of the subsidiaries now comprising the Group and the consideration paid by the Group for the
business combination under common control.
“
Deemed distribution for acquisition of subsidiaries under common control
”
was arising from acquisitions
of certain subsidiaries (
“
Acquirees
”
) under common control. During the year ended 31 December 2021,
the Group acquired (a) 15% equity interests in Sinochem Jinmao from Beijing Chemsunny Property Co.,
Ltd., a wholly-owned subsidiary of China Jinmao Group, at a consideration of RMB1,630,000; (b) 100%
equity interests in Jinmao (Shanghai) Property Management Co., Ltd. from China Jin Mao Group Co., Ltd.,
a wholly-owned subsidiary of China Jinmao Group, at a consideration of RMB7,890,000; and (c) 15%
and 85% equity interests in Chuangmao Technology (Beijing) Co., Ltd. from Beijing Chuangmao Future
Information Services Center (Limited Partnership) and Jinmao Huichuang Enterprise Management (Tianjin)
Partnership (Limited Partnership), which are both non-wholly-owned subsidiaries of China Jinmao Group,
respectively, at a total consideration of RMB11,964,000. The total consideration of RMB21,484,000 paid or
payable for the above transactions was regarded as a deemed distribution to the then equity holders of the
Acquirees. Further details of the transactions are included in the Reorganisation as set out in the paragraph
headed
“
Reorganization
”
in the section headed
“
History, Reorganization and Corporate Structure
”
in the
prospectus of the Company dated on 25 February 2022.
(b) Other reserve
The other reserve of the Group represents the contributions from China Jinmao Group for equity-settled
share option expenses related to the share options granted by China Jinmao Group to certain employees of
the Group and of China Jinmao Group who worked for the Group and for remuneration of a director of the
Company settled by a subsidiary of China Jinmao Group for his service rendered to the Group.
(c) PRC statutory surplus reserve
In accordance with the PRC Company Law and the articles of association of the Company
’
s subsidiaries
established in the PRC, the Group is required to appropriate 10% of its net profit after tax, as determined
under the Chinese Accounting Standards, to the statutory surplus funds until the reserve balance reaches
50% of its registered capital. Subject to certain restrictions set out in the relevant PRC regulations and in the
articles of association of these subsidiaries, the statutory surplus funds may be used either to offset losses,
or to be converted to increase the share capital of the subsidiaries provided that the balance after such
conversion is not less than 25% of the registered capital of them. The reserve cannot be used for purposes
other than those for which it is created and is not distributable as cash dividends.
130
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
27. NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(a) Major non-cash transactions
During the year, the Group had non-cash additions to right-of-use assets and lease liabilities of
approximately RMB24,366,000 (2020: RMB15,499,000) and RMB24,366,000 (2020: RMB15,499,000),
respectively, in respect of lease arrangements for buildings.
(b) Changes in liabilities arising from financing activities
The reconciliation of liabilities arising from financing activities is as follows:
2021
Interest-
bearing
borrowings
Lease
liabilities
RMB
’
000 RMB
’
000
At 1 January 2021 1,080,992 17,796
Changes from financing cash flows (1,080,992) (7,848)
New leases – 24,366
Interest expense – 970
Interest paid classified as financing cash flows – (970)
At 31 December 2021 – 34,314
2020
Interest-
bearing
borrowings
Lease
liabilities
RMB
’
000 RMB
’
000
At 1 January 2020 1,214,997 5,463
Changes from financing cash flows (134,005) (3,166)
New leases – 15,499
Interest expense – 436
Interest paid classified as financing cash flows – (436)
At 31 December 2020 1,080,992 17,796
(c) Total cash outflow for leases
The total cash outflow for leases included in the statement of cash flows is as follows:
2021 2020
RMB
’
000 RMB
’
000
Within operating activities 10,805 9,413
Within financing activities 8,818 3,602
Total 19,623 13,015
Annual Report 2021
131
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
27. NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(d) During the year, the Group had recorded non-cash expenses of RMB1,646,000 (2020: RMB3,631,000) in
respect of management
’
s and staffs
’
services to the Group under the share option scheme of China Jinmao
Group and management
’
s remuneration of RMB2,337,000 (2020: RMB2,365,000) borne by the immediate
holding company of the Company.
28. COMMITMENTS
At the end of the reporting period, the Group did not have any material capital commitment and Group, as a
lessee, had no lease contracts that have not yet commenced as at the end of the reporting period.
29. RELATED PARTY TRANSACTIONS
(1) Transactions with related parties
In addition to the transactions detailed elsewhere in the financial statements, the Group entered into the
following transactions with related parties during the year:
(a) Property management service income, value-added service income to non-property owners, community
value-added service income, lease expenses, information technology expenses, equity-settled share
option expenses, management
’
s remuneration borne by the immediate holding company and interest
income
2021 2020
RMB
’
000 RMB
’
000
Property management service income:
Other subsidiaries of China Jinmao Group* 85,228 54,837
Joint ventures of China Jinmao Group 11,756 6,169
Associates of China Jinmao Group 7,262 1,119
Other subsidiaries of Sinochem Group** 37,608 34,586
Other joint ventures of Sinochem Group
#
5,103 5,335
Other associates of Sinochem Group
#
563 565
147,520 102,611
Value-added service income to non-property owners:
China Jinmao Group and its other subsidiaries* 362,126 142,712
Joint ventures of China Jinmao Group 89,582 68,564
Associates of China Jinmao Group 68,235 66,850
Other subsidiaries of Sinochem Group** 534 1,484
520,477 279,610
132
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
29. RELATED PARTY TRANSACTIONS (Continued)
(1) Transactions with related parties (Continued)
(a) (Continued)
2021 2020
Notes RMB
’
000 RMB
’
000
Community value-added service income:
Other subsidiaries of China Jinmao Group* 38,118 25,249
Joint ventures of China Jinmao Group 5,540 1,443
Associates of China Jinmao Group 1,600 71
Other subsidiaries of Sinochem Group** 2,357 1,800
Other joint ventures of Sinochem Group
#
2 2
Other associates of Sinochem Group
#
8 3
47,625 28,568
Lease expenses:
Other subsidiaries of China Jinmao Group* 7,136 2,528
Information technology expenses:
Other subsidiaries of China Jinmao Group* 5,549 1,767
Other subsidiaries of Sinochem Group** – 761
5,549 2,528
Equity-settled share option expenses:
China Jinmao Group (i) 1,646 3,631
Management
’
s remuneration borne by the
immediate holding company:
China Jinmao Group (ii) 2,337 2,365
Interest income:
Other subsidiaries of China Jinmao Group* (iii) 32,408 63,750
Sinochem Finance (iv) 224 173
32,632 63,923
Annual Report 2021
133
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
29. RELATED PARTY TRANSACTIONS (Continued)
(1) Transactions with related parties (Continued)
(a) (Continued)
Notes:
* Other subsidiaries of China Jinmao Group are entities that are controlled by China Jinmao Group Co.,
Ltd., excluding the Group.
** Other subsidiaries of Sinochem Group are entities that are controlled by Sinochem Group Co., Ltd.,
excluding China Jinmao Group and its subsidiaries.
# Other joint ventures and associates of Sinochem Group are joint ventures and associates of Sinochem
Group, excluding the joint ventures and associates of China Jinmao Group.
(i) In prior years, certain management of the Group and Mr. Xie Wei, who was appointed as an executive
director and the chief executive officer of the Company subsequent to the end of the reporting period,
were granted share options, in respect of their services to the Group and China Jinmao Group, under
the share option scheme of China Jinmao Group. Ms. Zhou Liye, who was appointed as an executive
director and the chief financial officer of the Company subsequent to the end of reporting period,
was granted share options in respect of her services to China Jinmao Group, under the share option
scheme of China Jinmao Group. She joined the Group in May 2021 and the related equity-settled
share option expenses were borne by the Group since then. The fair value of such options, which has
been recognised in profit or loss of the Group over the vesting period, was determined as at the date
of grant.
(ii) Certain emoluments of certain management of the Group and Mr. Xie Wei were paid by China Jinmao
Group and recorded in profit or loss of the Group in relation to their services rendered to the Group.
(iii) Interest income from other subsidiaries of China Jinmao Group was determined at rates of 4.88% to
5.50% per annum.
(iv) Interest income from Sinochem Finance was at the rates of 0.35% to 1.90% per annum.
(v) The pricing for other transactions above were determined in accordance with the terms mutually
agreed by the contracting parties.
(b) During the years ended 31 December 2021 and 2020, the Group was entitled to use some trademarks
of China Jinmao Group for free.
134
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
29. RELATED PARTY TRANSACTIONS (Continued)
(2) Outstanding balances with related parties
As at 31 December
2021 2020
RMB
’
000 RMB
’
000
Prepayments and receivables from related parties
Trade receivables
Other subsidiaries of Sinochem Group** 670 1,615
Joint ventures of Sinochem Group
#
72 –
China Jinmao Group and its other subsidiaries* 208,131 89,154
Joint ventures of China Jinmao Group 46,493 25,275
Associates of China Jinmao Group 25,769 13,104
281,135 129,148
Prepayments and other receivables
Other subsidiaries of Sinochem Group** 7,894 638
Joint ventures of Sinochem Group 60 –
Other subsidiaries of China Jinmao Group* 128,405 1,505,744
Joint ventures of China Jinmao Group 20,030 423
Associates of China Jinmao Group 3,988 –
160,377 1,506,805
Cash and cash equivalents
Deposits placed with Sinochem Finance
(note 21)
369,130 120,490
Payables to related parties
Trade payables
Other subsidiaries of Sinochem Group** 107 109
Other subsidiaries of China Jinmao Group* 4,333 578
4,440 687
Annual Report 2021
135
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
29. RELATED PARTY TRANSACTIONS (Continued)
(2) Outstanding balances with related parties (Continued)
As at 31 December
2021 2020
RMB
’
000 RMB
’
000
Other payables
Other subsidiaries of Sinochem Group** 15,462 4,391
Joint ventures of Sinochem Group
#
643 –
Associates of Sinochem Group
#
329 809
China Jinmao Group and its other subsidiaries* 207,129 349,616
Joint ventures of China Jinmao Group 7,994 348
Associates of China Jinmao Group 1,550 60
233,107 355,224
Lease liabilities
Other subsidiaries of China Jinmao Group* 31,326 15,632
Contract liabilities
Other subsidiaries of Sinochem Group** 2,601 407
Joint ventures of Sinochem Group
#
61 –
Other subsidiaries of China Jinmao Group* 11,931 15,491
Joint ventures of China Jinmao Group 5,097 4,347
Associates of China Jinmao Group 3,567 2,317
23,257 22,562
136
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
29. RELATED PARTY TRANSACTIONS (Continued)
(2) Outstanding balances with related parties (Continued)
The Group
’
s outstanding balances of trade receivables, trade payables, prepayments, lease liabilities and
contract liabilities with related parties and deposits placed with Sinochem Finance are trade in nature. The
outstanding balances of other receivables and other payables with related parties are non-trade in nature,
and these balances are unsecured, interest-free and has no fixed terms of repayment.
(3) Compensation of key management personnel of the Group
2021 2020
RMB
’
000 RMB
’
000
Salaries, allowances and benefits in kind 6,012 4,288
Pension scheme contributions 364 127
Performance related bonuses 5,114 4,164
Equity-settled share option expense 1,390 2,238
12,880 10,817
Further details of directors
’
and the chief executive
’
s emoluments are included in note 8 to the financial
statements.
(4) Transactions and balances with other state-owned entities
The Group is indirectly controlled by the PRC government and operates in an economic environment
predominated by entities directly or indirectly owned or controlled by the government through its agencies,
affiliates or other organisations (collectively
“
State-owned Entities
”
(
“
SOEs
”
)). During the reporting period,
the Group had transactions with other SOEs to provide property management services. The directors of the
Company consider that these transactions with other SOEs are activities conducted in the ordinary course
of business and that the dealings of the Group have not been significantly or unduly affected by the fact
that the Group and the other SOEs are ultimately controlled or owned by the PRC government. The Group
has also established pricing policies for its products and services and such pricing policies do not depend on
whether or not the customers are SOEs.
Annual Report 2021
137
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
30. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments as at the end of reporting period are as
follows:
2021 2020
RMB
’
000 RMB
’
000
Financial assets – Financial assets at amortised cost
Trade receivables 414,477 203,713
Financial assets included in prepayments, other receivables and other assets 239,685 1,557,118
Restricted cash 1,278 –
Cash and cash equivalents 553,619 270,818
1,209,059 2,031,649
2021 2020
RMB
’
000 RMB
’
000
Financial liabilities – Financial liabilities at amortised cost
Trade payables 170,944 112,036
Interest-bearing borrowings – 1,080,992
Lease liabilities 34,314 17,796
Financial liabilities included in other payables and accruals 536,165 590,994
741,423 1,801,818
31. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS
Management has assessed that the fair values of cash and cash equivalents, restricted cash, trade receivables,
financial assets included in current portion of prepayments, other receivables and other assets, trade payables,
current portion of interest-bearing borrowings, and financial liabilities included in current portion of other
payables and accrual, approximate to their carrying amounts largely due to the short term maturities of these
instruments.
The fair values of the non-current portion of interest-bearing borrowings, financial assets included in other
receivables and other assets and financial liabilities included in other payables, have been calculated by discounting
the expected future cash flows using rates currently available for instruments with similar terms, credit risk and
remaining maturities. The resulting fair value amounts of these assets and liabilities are closed to their carrying
amounts as at the end of the reporting period.
Fair value hierarchy
The Group did not hold any financial assets and liabilities measured at fair value as at 31 December 2021 and
2020.
138
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group
’
s principal financial instruments comprise cash and cash equivalents, restricted cash, trade and other
receivables, trade and other payables, which arise directly from its operations. The Group has other financial
liabilities such as interest-bearing borrowings. The main purpose of these financial instruments is to raise finance
for the Group
’
s operations.
The main risks arising from the Group
’
s financial instruments are credit risk, liquidity risk, interest rate risk and
foreign currency risk. The Group
’
s overall risk management programme focuses on minimising potential adverse
effects of these risks, with a material impact, on the Group
’
s financial performance. The board of directors of the
Company reviews and agrees policies for managing each of these risks and they are summarised below.
(a) Credit risk
The Group is exposed to credit risk in relation to its trade receivables, other receivables, cash and cash
equivalents and restricted cash.
The Group expects that there is no significant credit risk associated with cash and cash equivalents and
restricted cash since they are substantially deposited at state-owned banks, other medium or large-sized
listed banks and other financial institutions in Mainland China. Management does not expect that there will
be any significant losses from non-performance by these banks.
The Group expects that the credit risk associated with trade receivables and other receivables due from
related parties is low, since the related parties have strong capacity to meet contractual cash flow obligations
in the near term. Thus, management does not expect that there will be any significant impairment for the
trade receivables and other receivables due from related parties.
The Group trades only with recognised and creditworthy third parties. Concentrations of credit risk are
managed by analysis by customer/counterparty. There are no significant concentrations of credit risk from
third parties as the customer bases of the Group
’
s trade receivables and other receivables are widely
dispersed. In addition, receivable balances are monitored on an ongoing basis.
Maximum exposure and year-end staging
The tables below show the credit quality and the maximum exposure to credit risk based on the Group
’
s
credit policy, which is mainly based on past due information unless other information is available without
undue cost or effort, and year-end staging classification as at 31 December. The amounts presented are
gross carrying amounts for financial assets.
Annual Report 2021
139
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
(a) Credit risk (Continued)
As at 31 December 2021
12-month
ECLs
Stage 1
Lifetime ECLs
Stage 2 Stage 3
Simplified
approach Total
RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000
Trade receivables* – – – 420,360 420,360
Financial assets included in
prepayments, other receivables
and other assets
– Normal** 202,062 – – – 202,062
– Doubtful** – 41,004 – – 41,004
Restricted cash
– Not yet past due 1,278 – – – 1,278
Cash and cash equivalents
– Not yet past due 553,619 – – – 553,619
756,959 41,004 – 420,360 1,218,323
As at 31 December 2020
12-month
ECLs
Stage 1
Lifetime ECLs
Stage 2 Stage 3
Simplified
approach Total
RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000
Trade receivables* – – – 207,334 207,334
Financial assets included in
prepayments, other receivables
and other assets
– Normal** 1,535,253 – – – 1,535,253
– Doubtful** – 23,415 – – 23,415
Cash and cash equivalents
– Not yet past due 270,818 – – – 270,818
1,806,071 23,415 – 207,334 2,036,820
* For trade receivables to which the Group applies the simplified approach for impairment, information based
on the provision matrix is disclosed in note 19 to the financial statements.
** The credit quality of the financial assets included in prepayments, other receivables and other assets is
considered to be
“
normal
”
when they are not past due and there is no information indicating that the
financial assets had a significant increase in credit risk since initial recognition. Otherwise, the credit quality
of the financial assets is considered to be
“
doubtful
”
.
140
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
(b) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to
shortage of funds. The Group
’
s exposure to liquidity risk arises primarily from mismatches of the maturities
of financial assets and liabilities. The Group
’
s objective is to maintain a balance between continuity of
funding to finance its working capital needs as well as capital expenditure in respect of this management
projects, and flexibility through the use of stand-by credit facilities.
The table below analyses the maturity profile of the Group
’
s financial liabilities as at the end of reporting
period, which is based on contractual undiscounted payments.
As at 31 December 2021
Within 1 year
or on demand
1 to 5
years
Over
5 years Total
RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000
Trade payables 170,944 – – 170,944
Lease liabilities 11,104 27,132 – 38,236
Financial liabilities included in
other payables and accruals 536,165 – – 536,165
718,213 27,132 – 745,345
As at 31 December 2020
Within 1 year
or on demand
1 to 5
years
Over
5 years Total
RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000
Trade payables 112,036 – – 112,036
Interest-bearing borrowings 198,312 809,055 280,261 1,287,628
Lease liabilities 6,690 12,752 – 19,442
Financial liabilities included in
other payables and accruals 467,337 123,657 – 590,994
784,375 945,464 280,261 2,010,100
(c) Interest rate risk and foreign currency risk
The Group is not exposed to material interest rate risk as the Group has no long term debt obligations with
a floating interest rate.
The Group is not exposed to material foreign currency risk as its business is principally conducted in
Mainland China and all the transactions are denominated in RMB.
Annual Report 2021
141
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
(d) Capital management
The Group
’
s primary objectives for managing capital are to safeguard the Group
’
s ability to continue
as a going concern and to maintain healthy capital ratio in order to support its business and maximise
shareholders
’
value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic
conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure,
the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new
shares. No change was made in the objectives, policies or processes for managing capital during the years
ended 31 December 2021 and 2020.
The Group monitors capital using a current ratio, which is total current assets divided by total current
liabilities, and a liabilities to assets ratio, which is total liabilities divided by total assets. The current ratios
and liabilities to assets ratios as at the end of each of the reporting periods are as follows:
2021 2020
RMB
’
000 RMB
’
000
Total current assets 1,248,703 1,123,926
Total current liabilities 1,128,042 1,011,375
Total assets 1,359,052 2,135,235
Total liabilities 1,155,071 2,086,101
Current ratio 1.11 1.11
Liabilities to assets ratio 0.85 0.98
33. EVENTS AFTER THE REPORTING PERIOD
On 26 January 2022, China Jinmao Group made a capital injection of HK$125,000,000 (equivalent to
RMB101,538,000) to the Company, and the share capital of the Company was increased by the same amount
without allotment and issuance of any new shares.
On 9 March 2022, 799,999,998 ordinary shares of the Company were issued for nil consideration to China Jinmao
Group as bonus issue and the number of issued ordinary shares of the Company became 800,000,000 after the
bonus issue.
On 10 March 2022, the ordinary shares of the Company were listed on the Stock Exchange, and in connection
with the Company
’
s listing, 101,411,500 ordinary shares (before any exercise of the over-allotment option) of the
Company were issued through global offering to public and international investors at the offer price of HK$8.14
per share for aggregate cash proceeds before expenses of HK$825,490,000 (approximately RMB666,187,000).
142
Annual Report 2021Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
34. STATEMENT OF FINANCIAL POSITION OF THE COMPANY
Information about the statement of financial position of the Company at the end of the reporting period is as
follows:
2021 2020
RMB
’
000 RMB
’
000
NON-CURRENT ASSET
Investment in a subsidiary 68,476 –
CURRENT ASSETS
Other assets 4,832 –*
CURRENT LIABILITIES
Other payables and accruals 21,520 –
NET CURRENT LIABILITIES (16,688) –*
Net assets 51,788 –*
EQUITY
Share capital 66,947 –*
Reserves
(note)
(15,159) –*
Total equity 51,788 –*
* The amount is less than RMB1,000.
.......................................................................... ..........................................................................
Xie Wei Zhou Liye
Director Director
Annual Report 2021
143
Jinmao Property Services Co., Limited
NOTES TO FINANCIAL STATEMENTS
31 December 2021
34. STATEMENT OF FINANCIAL POSITION OF THE COMPANY (Continued)
Note:
A summary of the Company
’
s reserves is as follows:
Exchange
reserve
Accumulated
losses Total
RMB
’
000 RMB
’
000 RMB
’
000
At 14 September 2020 (date of incorporation) – – –
Total comprehensive loss for the period –* –* –*
At 31 December 2020 and 1 January 2021 –* –* –*
Total comprehensive loss for the year 254 (15,413) (15,159)
At 31 December 2021 254 (15,413) (15,159)
* The amount is less than RMB1,000.
35. APPROVAL OF THE FINANCIAL STATEMENTS
The financial statements were approved and authorised for issue by the board of directors on 25 March 2022.
144
Annual Report 2021Jinmao Property Services Co., Limited
FOUR-YEAR FINANCIAL SUMMARY
2021 2020 2019 2018
RMB
’
000 RMB
’
000 RMB
’
000 RMB
’
000
Revenue 1,515,525 944,210 788,323 574,503
Gross profit 470,034 234,789 151,523 115,034
Profit attributable to owners of the parent 177,977 77,124 22,624 17,487
Total assets 1,359,052 2,135,235 1,986,219 1,940,502
Total liabilities 1,155,071 2,086,101 1,878,388 1,860,847
Equity attributable to owners of the parent 195,397 49,134 107,831 79,655
Total equity 203,981 49,134 107,831 79,655
2021 ANNUAL REPORT
