Good Friend International : SUPPPLEMENTAL ANNOUNCEMENT ON THE ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2020

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

GOOD FRIEND INTERNATIONAL HOLDINGS INC.

友 佳 國 際 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2398)

SUPPLEMENTAL ANNOUNCEMENT

ON THE ANNUAL RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2020

Reference is made to the announcement of Good Friend International Holdings Inc. (the "Company", together with its subsidiaries, the "Group") dated 31 March 2021 (the "2020 Annual Results Announcement") in relation to the unaudited annual results of the Group for the year ended 31 December 2020 (the "2020 Unaudited Annual Results").

AGREEMENT WITH THE AUDITORS ON THE 2020 ANNUAL RESULTS

The Board is pleased to announce that the Group's auditor, RSM Hong Kong, has completed its audit of the annual results of the Group for the year ended 31 December 2020 (the "2020 Audited Annual Results") in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants.

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The following set forth the audited consolidated statement of profit or loss and other comprehensive income of the Group for the year ended 31 December 2020, the audited consolidated statement of financial position of the Group as at 31 December 2020 (which have been agreed by the Group's auditor, RSM Hong Kong), the relevant corresponding figures shown in the 2020 Unaudited Annual Results and the relevant changes between the audited and the unaudited figures:

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 December 2020

		2020		2020	Change
	Notes	RMB'000	RMB'000	RMB'000
		(Audited)	(Unaudited)
Revenue		875,318		875,318	-
Cost of revenue		(678,847)	(678,847)	-
Gross profit		196,471		196,471	-
Other income		56,941		56,941	-
Distribution and selling expenses		(94,852)	(94,852)	-
Administrative expenses		(57,485)	(57,485)	-
Research and development costs		(27,750)	(27,750)	-
Impairment loss on trade receivables and contract assets		(12,985)	(12,985)	-
Other gains and losses		36,509		36,509	-
Other expenses		(22,741)	(22,741)	-
Other operating expenses		(1,398)	(1,398)	-
Finance costs		(18,635)	(18,635)	-
Share of profit of joint ventures		615		615	-
Share of loss of associates	(a)	(287,061)	(278,958)	8,103
Loss before tax		(232,371)	(224,268)	(8,103)
Income tax expense		(15,848)	(15,848)	-
Loss attributable to owners of the Company		(248,219)	(240,116)	(8,103)
Other comprehensive income:
Item that may be reclassified to profit or loss:
Exchange difference arising on translation of		12,490
foreign operations			12,394	96
Net fair value loss on receivables at fair value through
other comprehensive income ("FVTOCI")		(154)	(154)	-
Share of other comprehensive income of associates		(25,588)	(25,587)	(1)
		(13,252)	(13,347)	95
Item that will not be reclassified to profit or loss:
	(4,139)
Share of other comprehensive income of associates		(4,137)	(2)
Total comprehensive income attributable to
owners of the Company		(265,610)	(257,600)	(8,010)

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2020

		2020	2020	Change
	Notes	RMB'000			RMB'000	RMB'000
		(Audited)			(Unaudited)
Non-current assets
Property, plant and equipment		204,098	204,098	-
Right-of-use assets		122,251	122,251	-
Intangible assets		1,047	1,047	-
Investments in joint ventures		22,261	22,261	-
Investments in associates	(b)	88,274	96,284	(8,010)
Deferred tax assets		28,551	28,551
		466,482	474,492	(8,010)
Current assets
Inventories		431,164	431,164	-
Trade and other receivables and prepayments		166,688	166,688	-
Contract assets		52,653	52,653	-
Loans receivable		49,691	49,691	-
Receivables at FVTOCI		120,105	120,105	-
Amount due from ultimate holding company		1,008	1,008	-
Amount due from immediate holding company		8	8	-
Amounts due from a related company,
fellow subsidiaries and an associate of
ultimate holding company		28,087	28,087	-
Amounts due from joint ventures		644	644	-
Amounts due from associates and
subsidiaries of an associate		370,849	370,849	-
Restricted bank balances		139,426	139,426	-
Bank and cash balances		104,014	104,014	-
		1,464,337	1,464,337	-

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	2020	2020	Change
Notes	RMB'000					RMB'000	RMB'000
	(Audited)					(Unaudited)
Current liabilities
Trade and other payables and accrued expenses	471,137	471,137	-
Contract liabilities	260,711	260,711	-
Deferred income	1,410	1,410	-
Amount due to ultimate holding company	1,503	1,503	-
Amount due to immediate holding company	15,627	15,627	-
Amounts due to fellow subsidiaries	2,005	2,005	-
Amounts due to joint ventures	517	517	-
Amounts due to an associate	24,111	24,111	-
Lease liabilities	2,623	2,623	-
Provision for litigation claim	36,335	36,335	-
Refund liabilities	106,211	106,211	-
Current tax liabilities	25,272	25,272	-
Bank and other borrowings	423,814	423,814	-
Warranty provision	3,409	3,409	-
	1,374,685	1,374,685	-
Net current assets	89,652	89,652	-
Total assets less current liabilities	556,134	564,144	(8,010)
Non-current liabilities
Bank and other borrowings	38,506	38,506	-
Deferred income	72,270	72,270	-
Lease liabilities	2,489	2,489	-
	113,265	113,265	-
Net Assets	442,869	450,879	(8,010)
Capital and reserves
Share capital	4,021	4,021	-
Share premium	82,183	82,183	-
Capital reserves	77,338	77,338	-
Other reserves	53,202	53,107	95
Retained earnings	226,125	234,230	(8,105)
Total Equity	442,869	450,879	(8,010)

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The overall 2020 Audited Annual Results remain substantially the same as the 2020 Unaudited Annual Results, except for the major changes with details set out below:

Notes:

1. Share of loss of associates
   Additional share of loss of associates (RMB8.1 million).
2. Investments in associates
3. 1. Additional share of loss of associates (RMB8.1 million); offset by
   2. Exchange difference arising on translation of foreign operations (RMB0.1 million);

The 2020 annual report of the Company containing all the applicable information required by the Listing Rules will be published on the websites of Hong Kong Exchanges and Clearing Limited and the Company on 14 May 2021.

By Order of the Board

Good Friend International Holdings Inc.

Chu Chih-Yaung

Chairman

Hong Kong, 14 May 2021

As at the date of this announcement, the Board of the Company comprises (i) three executive directors, namely Mr. Chu Chih-Yaung, Mr. Chen Min-Ho and Mr. Wen Chi-Tang; and (ii) three independent non-executive directors, namely Mr. Koo Fook Sun, Louis, Mr. Yu Yu-Tang and Mr. Kao Wen-Cheng.

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