Stock Code: 000725, 200725 Stock Name: BOE-A, BOE-B Announcement No. 2020-037
BOE TECHNOLOGY GROUP CO., LTD.ANNUAL REPORT 2019 (SUMMARY)Part I Important Notes
This Summary is based on the full text of the 2019 Annual Report of BOE Technology Group Co., Ltd. (together with itsconsolidated subsidiaries, the “Company”, except where the context otherwise requires). In order for a full understanding of theCompany’s operating results, financial position and future development plans, investors should carefully read the aforesaid full text,which has been disclosed together with this Summary on the media designated by the China Securities Regulatory Commission (the“CSRC”).The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management ofBOE Technology Group Co., Ltd. hereby guarantee the factuality, accuracy and completeness of the contents of this Report and itssummary, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein.Mr. Chen Yanshun, the Company’s legal representative, Mr. Liu Xiaodong, President, Ms. Sun Yun, Chief Financial Officer, and Ms.Yang Xiaoping, head of the financial department (equivalent to financial manager) hereby guarantee that the Financial Statementscarried in this Report are factual, accurate and complete.All the directors of the Company except for the following attended in person the Board meeting for the review of this Report and itssummary.
| Name | Office title | Reason for not attending the meeting in person | Proxy entrusted to attend the meeting |
| Wang Chenyang | Director | Due to work | Li Yantao |
The Board has approved a final dividend plan for the ordinary shareholders for the Reporting Period. A cash dividend of RMB0.20(tax inclusive) per 10 shares is to be distributed to all the shareholders, with no bonus issue from either profit or capital reserves.This Report has been prepared as per the Chinese Accounting Standards for Business Enterprises and other relevant regulations.KPMG Huazhen LLP has issued an independent auditor’s report with unmodified unqualified opinion for the Company.This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies ormisunderstandings between the two versions, the Chinese versions shall prevail.Part II Key Corporate Information
1. Stock Profile
| Stock name | BOE-A, BOE-B | Stock code | 000725, 200725 |
| Stock exchange for stock listing | Shenzhen Stock Exchange | |
| Contact information | Board Secretary | Securities Representative |
| Name | Liu Hongfeng | Huang Rong |
| Office Address | 12 Xihuan Middle Road, Beijing Economic-Technological Development Area, P.R.China | 12 Xihuan Middle Road, Beijing Economic-Technological Development Area, P.R.China |
| Fax | 010－64366264 | 010－64366264 |
| Tel. | 010－64318888 ext. | 010－64318888 ext. |
| E-mail address | liuhongfeng@boe.com.cn | huangrong@boe.com.cn |
2. Principal Activities or Products in the Reporting Period
Founded in April 1993, BOE Technology Group Co., Ltd. (“BOE”) is an IoT company providing intelligent interface products andservices for information interaction and human health. In 2019, BOE adhered to its strategy of transforming further towards an IoTcompany. It kept promoting transformation and growth, tapping into IoT application needs and sharpening its competitive edges inmarket segments. Working with the B2B Chief Sales Platform Officer, the OMO Chief Sales Platform Officer, the Branding andGlobal Market Center, the Information Technology Development Center, and other professional service platforms, the three majorbusiness divisions of interface devices (D), smart IoT (S) and smart medicine and engineering (H) continued to enhance marketing,technological and systematic abilities and promote fast growth.
(1) Interface Devices (D)
Division D consists of the Display and Sensor BG, and the Sensor and Application Solution BG. The Display and Sensor BG designsand manufactures related devices with a B2B model. The display device business offers TFT-LCD, AMOLED, Microdisplay andother intelligent interface devices for smartphones, tablet PCs, laptops, monitors, TVs, vehicles, electronic shelf label (ESL), tileddisplay screens, industrial control, wearable devices, VR/AR devices, electronic tags, white goods, healthcare, mobile payment,interactive whiteboards, etc. And the sensor device business provides integrated design and manufacturing services of sensor devicesfor use in medical detection, household detection, communication and transportation, smart homes, etc. The Sensor and ApplicationSolution BG provides sensor system solutions for B2B customers of medical imaging, biological detection, smart screens, microwavecommunication, fingerprint identification, industrial control and the like, with products including flat panel X-ray detectors (FPXD),digital microfluidic chips, PDLC glass, fingerprint identification systems, etc.
(2) Smart IoT (S)
Division S is divided into the Intelligent Manufacturing Service BG, the IoT Solution BG and the Digital Art IoT Platform BG. TheIntelligent Manufacturing Service BG designs and manufactures, for its global B2B partners, the most competitive whole-widgetsmart manufacturing solutions of TVs, monitors, electronic blackboards, electronic signs, commercial display products, electronictags, self-service and mobile terminals, among others. Supported by AI and big data technologies, the IoT Solution BG focuses onsegment markets and offers integrated IoT solutions of smart finance, digital hospitals, smart business offices, smart homes, smart
transportation, smart education and smart energy, empowering these industries. The Digital Art IoT Platform BG adopts an IoTplatform model. Supported by paper display, digital art cloud platform, AI and other technologies, and cooperating with artorganizations and artists, this BG offers various products and services including artistic appreciation, art knowledge, picture bookreading, photo sharing, art mall and visual aesthetics.
(3) Smart Medicine and Engineering (H)
Division H includes the Mobile Healthcare IoT Platform BG and the Smart Healthcare Service BG. The Mobile Healthcare IoTPlatform BG adopts a healthcare IoT platform model. It offers biochips, mobile detection devices and solutions, App products andservices, eco-chain products, etc. Being people-oriented, it provides mobile healthcare terminals and services based on the home,community and hospital scenarios. It is building a healthcare IoT platform featuring “family, community and hospital collaboration”.The Smart Healthcare Service BG covers digital hospitals, digital human body, regenerative medicine, healthcare parks, etc. It offersB2C customers online-and-offline integrated professional healthcare services focused on digital medical care and supplemented bysmart nursing home and healthcare park integrated solutions, as well as by industrial park operations and the like.
3. Key Financial Information
(1) Key Financial Information of the Past Three Years
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
√ Yes □ No
Reason for retrospective restatement: accounting policy changes
Unit: RMB
| Item | 2019 | 2018 | 2019-over-2018 change (%) | 2017 | |
| After | Before | After | |||
| Operating revenue (RMB) | 116,059,590,164.00 | 97,108,864,935.00 | 19.51% | 93,800,479,215.00 | 93,800,479,215.00 |
| Net profit attributable to the listed company’s shareholders (RMB) | 1,918,643,871.00 | 3,435,127,975.00 | -44.15% | 7,567,682,493.00 | 7,567,682,493.00 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | -1,166,793,317.00 | 1,517,702,353.00 | -176.88% | 6,679,211,138.00 | 6,679,211,138.00 |
| Net cash generated from/used in operating activities (RMB) | 26,083,079,194.00 | 25,684,047,196.00 | 1.55% | 26,266,986,015.00 | 26,726,929,655.00 |
| Basic earnings per share (RMB/share) | 0.05 | 0.10 | -50.00% | 0.22 | 0.22 |
| Diluted earnings per share (RMB/share) | 0.05 | 0.10 | -50.00% | 0.22 | 0.22 |
| Weighted average return on equity (%) | 2.16% | 4.00% | -1.84% | 9.25% | 9.25% |
| Item | 31 December 2019 | 31 December 2018 | Change of 31 December 2019 over 31 December 2018 (%) | 31 December 2017 | |
| After | Before | After | |||
| Total assets (RMB) | 340,412,203,308.00 | 304,028,491,385.00 | 11.97% | 256,108,741,849.00 | 256,108,741,849.00 |
| Equity attributable to the listed company’s shareholders (RMB) | 95,058,129,055.00 | 85,856,748,703.00 | 10.72% | 84,809,816,377.00 | 84,809,816,377.00 |
Reasons for the changes to the accounting policies and correction of accounting errors:
In 2018, according to the interpretations of the regulatory document CK [2018] No.15, government subsidies received in 2017,whether related to assets or income, should be presented as “cash generated from operating activities” in the cash flow statements.
(2) Key Financial Information by Quarter
Unit: RMB
| Item | Q1 | Q2 | Q3 | Q4 |
| Operating revenue | 26,454,258,554.00 | 28,584,950,133.00 | 30,682,823,546.00 | 30,337,557,931.00 |
| Net profit attributable to the listed company’s shareholders | 1,051,781,919.00 | 616,666,530.00 | 183,791,110.00 | 66,404,312.00 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses | 352,304,432.00 | 299,186,002.00 | -840,490,839.00 | -977,792,912.00 |
| Net cash generated from/used in operating activities | 6,164,241,385.00 | 5,430,742,964.00 | 4,932,005,060.00 | 9,556,089,785.00 |
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from whathave been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
4. Share Capital and Shareholder Information at the Period-End
(1) Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well asHoldings of Top 10 Shareholders
Unit: share
| Number of ordinary shareholders at the Period-end | 1,224,363 (including 1,184,812 A-shareholders and 39,551 B-shareholders) | Number of ordinary shareholders at the month-end prior to the disclosure of this Report | 1,541,954 (including 1,501,699 A-shareholders and 40,255 B-shareholders) | |||||
| Top 10 shareholders | ||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total shares held at the period-end | Restricted shares held | Shares in pledge or frozen | |||
| Status | Shares | |||||||
| Beijing State-owned Capital Operation and Management Center | State-owned legal person | 11.68% | 4,063,333,333 | 0 | N/A | 0 | ||
| Hefei Jianxiang Investment Co., Ltd. | State-owned legal person | 7.21% | 2,510,142,953 | 0 | N/A | 0 | ||
| Chongqing Ezcapital Opto-electronics Industry Investment Co., Ltd. | State-owned legal person | 5.81% | 2,020,734,641 | 0 | N/A | 0 |
| Hong Kong Securities Clearing Company Ltd. | Foreign legal person | 3.82% | 1,328,335,605 | 0 | N/A | 0 |
| Beijing Yizhuang Investment Holdings Co., Ltd | State-owned legal person | 2.63% | 915,758,000 | 0 | N/A | 0 |
| Beijing BOE Investment & Development Co., Ltd. | State-owned legal person | 2.36% | 822,092,180 | 0 | N/A | 0 |
| Beijing Electronics Holdings Co., Ltd. | State-owned legal person | 0.79% | 273,735,583 | 0 | N/A | 0 |
| GCAMC-ICBC-Generali China-Selected Stock No.18 Asset Management Product | Domestic non-state-owned legal person | 0.72% | 249,251,600 | 0 | N/A | 0 |
| Central Huijin Assets Management Co., Ltd | State-owned legal person | 0.71% | 248,305,300 | 0 | N/A | 0 |
| GCAMC-ICBC-Generali China-Silk Road No.1 Asset Management Product | Domestic non-state-owned legal person | 0.63% | 218,095,100 | 0 | N/A | 0 |
| Related or acting-in-concert parties among the shareholders above | 1. Beijing State-owned Capital Operation and Management Center held 100% equities of Beijing Electronics Holdings Co., Ltd. 2. Beijing Electronics Holdings Co., Ltd. held 66.25% equities of Beijing BOE Investment & Development Co., Ltd. and was its controlling shareholder. 3. After the non-public issuing of BOE in 2014, Hefei Jianxiang Investment Co., Ltd. and Chongqing Ezcapital Opto-electronics Industry Investment Co., Ltd, by entering into Implementation Protocol of Voting Right respectively, agreed to maintain all of the shares held by them respectively unanimous with Beijing BOE Investment & Development Co., Ltd. when executing the voting rights of the shareholders. 4. After the non-public issuing of the Company in 2014, Beijing State-owned Capital Operation and Management Center handed over 70% of the shares directly held by it to Beijing Electronics Holdings Co., Ltd. for management through Stock Management Protocol, and Beijing Electronics Holdings Co., Ltd. gained the incidental shareholders’ rights except for disposing right and usufruct of the shares, of which the rest 30% voting right maintained unanimous with Beijing Electronics Holdings Co., Ltd. through the agreement according to Implementation Protocol of Voting Right. 5. Except for the above relationships, the Company does not know any other connected party or acting-in-concert party among the top 10 shareholders. | |||||
| Shareholders involved in securities margin trading (if any) | The shares held by Beijing Yizhuang Investment Holdings Co., Ltd. in the Company decreased by 11,113,800 shares due to engaging in securities financing. | |||||
(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
(3) Ownership and Control Relations between the Actual Controller and the Company
Notes: 1. Beijing Intelligent Kechuang Technology Development Co., Ltd. (Intelligent Kechuang) is used as a platform for theCompany to implement equity incentives for its core technical and managerial personnel, who are the 20 nominal shareholders ofIntelligent Kechuang. The ratios of their capital contributions to Intelligent Kechuang do not represent their actual equity percentage.The equities of Intelligent Kechuang are jointly owned by the awardees of the Company’s equity incentive plans. The capitalcontribution ratios of the said 20 people are as follows: Wang Dongsheng 20%, Jiang Yukun 10%, Liang Xinqing 10%, ZhaoCaiyong 6.667%, Shi Dong 6.667%, Chen Yanshun 6.667%, Song Ying 6.667%, Han Guojian 6.667%, Gong Xiaoqing 3.333%,Wang Yanjun 3.333%, Wang Jiaheng 3.333%, Liu Xiaodong 3.333%, Ren Jianchang 1.667%, Sun Jiping 1.667%, Zhang Peng
1.667%, Wang Aizhen 1.667%, Mu Chengyuan 1.667%, Xu Yan 1.667%, Hua Yulun 1.667% and Zhong Huifeng 1.667%.
2. When the Company completed a private offering of shares in 2014, Beijing State-Owned Capital Operation and ManagementCenter transferred its 70% stake directly held in the Company to Beijing Electronics Holding Co., Ltd. for managing through aShares Management Agreement, and Beijing Electronics Holding Co., Ltd. obtained the shareholder’s rights other than the disposaland earnings rights attached to the 70% stake; and Beijing State-Owned Capital Operation and Management Center agreed in aVoting Rights Exercise Agreement to align itself with Beijing Electronics Holding Co., Ltd. when exercising its voting rights of theremaining 30% stake directly held by it in the Company.
5. Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of thisReport’s approval or were due but could not be redeemed in full?Yes.
(1) Bond Profile
| Bond name | Abbr. | Bond code | Maturity | Balance (RMB’0,000) | Coupon rate |
| 2019 Public Offering of Renewable Corporate Bonds of BOE (for qualified investors) (Phase I) | 19BOEY1 | 112741 | For bonds issued during this period, 3 interest-bearing years shall be regarded as a cycle. At the end of each cycle, the issuer shall have the right to conditionally extend the issue of bonds for another cycle (3 years) or choose to fully redeem the due bonds at the end of the cycle. | 800,000 | 4.00% |
| 2020 Public Offering of Renewable Corporate Bonds of BOE (for qualified investors) (Phase I) (epidemic prevention and control bonds) | 20BOEY1 | 149046 | For bonds issued during this period, 3 interest-bearing years shall be regarded as a cycle. At the end of each cycle, the issuer shall have the right to conditionally extend the issue of bonds for another cycle (3 years) or choose to fully redeem the due bonds at the end of the cycle. | 200,000 | 3.64% |
| 2020 Public Offering of Renewable Corporate Bonds of BOE (for qualified investors) (Phase II) (epidemic prevention and control bonds) | 20BOEY2 | 149065 | For bonds issued during this period, 3 interest-bearing years shall be regarded as a cycle. At the end of each cycle, the issuer shall have the right to conditionally extend the issue of bonds for another cycle (3 years) or choose to fully redeem the due bonds at the end of the cycle. | 200,000 | 3.54% |
| Interest payment during the Reporting Period | No such cases as of the approval disclosure date of this report. | ||||
(2) Latest Rating and Rating Change
Within the Reporting Period and the day of approved report issue, United Ratings Co., Ltd. conducted a rating for the Company’smature bonds, and corresponding credit rating report was disclosed via www.cninfo.com.cn. Relevant details are as follows:
| Bond name | Corporate credit rating | Outlook on corporate rating | Credit rating of corporate bonds | Letter of credit rating | Date of report disclosure |
| 19BOEY1 | AAA | Stable | AAA | LH[2019]No.2141 | 23 October 2019 |
| 20BOEY1 | AAA | Stable | AAA | LH[2020]No.236 | 25 February 2020 |
| 20BOEY2 | AAA | Stable | AAA | LHPZ[2020]No.376 | 16 March 2020 |
It is estimated that United Ratings will issue the Tracking Rating Report of the 2020 Renewable Corporate Bonds Credit Rating ofBOE Technology Group Co., Ltd. in late June 2020. The Company will disclose the tracking rating analysis report on www.szse.cn intime. And please investors pay attention to it.
(3) Selected Financial Information of the Company for the Past Two Years
Unit: RMB'0,000
| Item | 2019 | 2018 | Change |
| Debt/asset ratio | 58.56% | 60.41% | -1.85% |
| Debt/EBITDA ratio | 16.26% | 18.26% | -2.00% |
| Interest cover (times) | 1.14 | 1.62 | -29.63% |
Part III Operating Performance Discussion and Analysis
1. Business Overview of the Reporting Period
2019 saw the longest and deepest trough of the semi-conductor display industry in its history, with escalating oversupply andincreasing competition. Meanwhile, uncertainties across the world such as a string of trade frictions, rising trade protectionism andgeopolitical instability created downward pressure on the global economy. In the harsh market environment, BOE seized theopportunity to grow in this industry trough. It managed to achieve stable growth in operating revenue against a shrinking market size.For 2019, the Company recorded operating revenue of approximately RMB116.06 billion, up by around 19.51% year-on-year.
1. D, S, H Business Divisions Develop Simultaneously
The Interface Devices BD (D)The display device’s market status is steadily improved with the overall sales achieving a year-on-year growth of 16%. The marketshare of sales of smart phone LCD, tablet PC display screen, notebook computer display screen, display monitorand TV displaycontinues its first ranking status; the display and sensors BD has successfully propelled its new production line construction, and theflexible AMOLED business has achieved its breakthrough. Meanwhile, Hefei 10.5th generation TFT-LCD production line producesin a full capacity; Mianyang 6th generation flexible AMOLED production and Wuhan 10.5th generation TFT-LCD production linerealize the volume production; the pile foundation has been constructed for Chongqing 6th generation flexible AMOLED productionline. As the sales of innovative applications realize a year-on-year growth of 50%, the market occupancy is largely improved.Similarly, the sensors and solutions business grows rapidly; the medical imaging BD shipment quantity realizes an increase of 70%when compared to that in the same period; the biological detection Flowcell product core customer-side occupancy monthlyproportion exceeds 50%.The Smart IoT BD (S)With the improvement of intelligent manufacturing service and management quality, the full-screen series of products (withoutframes) have been completely introduced into various brand customers and put into volume production. The TV complete appliances’sales on the domestic market increase 180% when compared to that in the same period, and the Company has become the first-choicesupplier for various strategic customers. The volume production and delivery are also materialized for various new applicationsincluding the commercial display, electronic table card, intelligent cash register and smart watch etc.. Meanwhile, IoT solutions BDhas undertaken various demonstration projects including the National Day Performance and Daxing International Airport etc.; SmartFinance has provided over 1000 financial branches with corresponding intelligent upgrading service; smart retail overseas branchintroduces the strategic investment and enhances the strategic cooperation; the Company has won the bidding of various intelligentrenovation projects in China. As the digital art display system has been approved with the ITU international standard, it has furtherdefined the international technical specifications for the digital artwork display. The platform-based professional works exceed
30,000, and the users upload over 1.5 million works. In fact, it has obtained the authorization from the Ministry of Culture andTourism of the P.R.C to establish the national digital culture industry innovation center.The Smart Medicine and Engineering BD (H)With the improvement of the mobile health product system, more than 10 BOE brand products and 50 eco-chain products haverealized their marketing; by obtaining the omni-channel qualification for selling and operating medical devices, the Company hasimproved the construction of online and offline marketing platforms, and the annual hardware sales have achieved a new high; thebiological chip integration testing system has won the special support from Beijing Municipal Science and Technology Commission,and DEMO product development is also completed; now, great effort will be made to accelerate the implementation and applicationof various solutions including the chronic respiratory disease management, the CVD management, the diabetes management, theSmart Emergency, the Smart Health Care Community and the Smart Public Health and Physical Examination etc..In terms of the health service, the outpatient visits of OASIS International Hospital achieve a year-on-year growth of 20%; since itsopening in March, Hefei BOE Hospital has made its outpatient visits reach about 100,000. Meanwhile, it has begun to providevarious level-4 surgeries and treated and cured 100 difficult diseases, and obtained the qualification of Anhui Provincial First Batchof Internet Hospitals; the regenerative medicine heart diaphram finishes the cell detection conducted by NIFDC, the small animal testand the large animal preliminary experiment; as the health care park business is developing stably, various life science andtechnology parks are established as well in different places.
2. Progress is Made in the Development of Innovation Subdivision and Application MarketThe intelligent window subdivision of the sensors and solutions BD has launched its high-speed train intelligent window products tothe world, successfully realizing the application in Beijing-Xiong'an Intercity Railway Trains; IoT solutions BD has implementedvarious products and solutions including 5G holographic classroom solution, intelligent conference and smart home etc.; the digitalart BD has successfully launched Funbook, iGallery S3 and other new products; the mobile health BD realizes the marketing ofvarious self-developed products including the breast milk analysis meter and the sleep meter 2.0 etc., and the mobile health APP 4.0is also released to the market; the health service BD has launched the newborn baby’s umbilical cord stem cells storage products tothe market, and the digital human body APP has released its 2.0 version; the light and shadow art solutions BD appears in variousactivities to celebrate the 70th anniversary for the founding of new China.
3. The Technical Innovation Ability is Further Enhanced
In 2019, the newly-added patent applications exceeded 9,600, including over 3,600 overseas patents and over 4,000 patentapplication covering such important fields as flexible AMOLED, sensors, artificial intelligence and big data. Similarly, thenewly-added patent licenses exceeded 5,000, including over 2,000 overseas patent licenses, and great progress was made in the R&Dof transformation technology covering the sensors, artificial intelligence, big data and integration of medicine and industry. BOE nowranks the 6th in the Chinese Enterprises’ AI Technology Invention Patent Ranking List, and its image super resolution, gesture
recognition and target detection algorithm have taken the crown in the top international competition. Besides, the Company hasdirected the formulation and revision of 29 external technical standards including 13 newly-added standards. As the self-developeddigital art display system ITU international standards have been approved, it will seize the initiative in executing the internationalstandard in the digital culture field, and corresponding ITU project approval is also obtained for two UHD tele-medicine internationalstandards.
2. Significant Change to Principal Activities in the Reporting Period
□ Yes √ No
3. Product Category Contributing over 10% of Principal Business Revenue or Profit
√ Applicable □ Not applicable
Unit: RMB
| Product category | Operating revenue | Operating profit | Gross profit margin | YoY change in operating revenue (%) | YoY change in operating profit (%) | YoY change in gross profit margin (%) |
| Interface devices | 106,482,397,172 | -1,526,383,397 | 13.11% | 22.83% | -142.27% | -5.75% |
| Smart IoT | 16,730,993,983 | 136,751,751 | 13.01% | -4.39% | 34.28% | 1.98% |
4. Business Seasonality to which Special Attention should Be Paid
□ Yes √ No
5. Significant YoY Changes in Operating Revenue, Cost of Sales and Net Profit Attributable to the ListedCompany’s Ordinary Shareholders or Their Compositions
□ Applicable √ Not applicable
6. Possibility of Listing Suspension or Termination
□ Applicable √ Not applicable
7. Matters Related to Financial Reporting
(1) YoY Changes to Accounting Policies, Accounting Estimates or Measurement Methods
√ Applicable □ Not applicable
(a) Presentation of financial statementsThe Group prepared 2019 financial statements and adjusted the data in the Reporting Period according to Notes of Revising andPrinting the Format of 2019 General Enterprises Financial Statement (CK [2019] No. 6) issued by the Ministry of Finance in April
2019, and Notes of Revising and Printing the Format of Consolidated Financial Statement (CK [2019] No. 16) issued in September.(b) Non-monetary assets exchangeThe Ministry of Finance issued the Notes of Revising and Printing the Accounting Standards for Business Enterprises No. 7-Non-monetary Assets Exchange (CK [2019] No. 8) in May 2019. The Group started to implement from 10 June 2019 and adjustedthe non-monetary exchange occurred from 1 January 2019 to the date of enforcement of the standards according to the standards.(c) Debt restructuringThe Ministry of Finance issued the Notes of Revising and Printing the Accounting Standards for Business Enterprises No. 12- DebtRestructuring (CK [2019] No. 9) in May 2019. The Group started to implement from 17 June 2019 and there was no adjustment tothe debt restructuring occurred from 1 January 2019 to the date of enforcement of the standards.(d) Financial instrumentsThe Ministry of Finance revised and issued the Accounting Standards for Business Enterprises No. 22-Recognition and Measurementof Financial Instruments (revised), Accounting Standards for Business Enterprises No.23-Transfer of Financial Assets (revised),Accounting Standards for Business Enterprises No.24-Hedge Accounting (revised) and Accounting Standards for BusinessEnterprises No.37-Presentation of Financial Instruments (revised) (collectively referred to as “new standards governing financialinstruments”) in 2017. The Group started to implement the abovementioned amendment of the accounting standards to adjust therelevant content regarding the accounting policy.
(2) Retrospective Restatements due to Correction of Material Accounting Errors in the Reporting Period
□ Applicable √ Not applicable
No such cases.
(3) YoY Changes to the Scope of Consolidated Financial Statements
√ Applicable □ Not applicable
On 21 January 2019, the Company and Fuzhou BOE Display Technology Co., Ltd. signed the Agreement of Concerted Action withFuqing Urban Construction and Investment Group Co., Ltd. and Fuzhou Urban Construction and Investment Group Co., Ltd., underwhich, various parties agreed to be the persons acting in concert as suggested by the Company, and irrevocably exercise the right tovote based on the Company’s opinions without reserve. From the day on, the Company shall have the right to control Fuzhou BOEDisplay Technology Co., Ltd., and included it into the consolidation scope since 22 March 2019.
Chairman of the Board (signature): Mr. Chen Yanshun
Date of the Board’s approval of this Report: 24 April 2020