Hangzhou Great Star Industrial Co., Ltd. 2021 Full AnnualReport
Hangzhou Great Star Industrial Co., Ltd
The Annual Report for 2021
2022-012
April, 2022
Hangzhou Great Star Industrial Co., Ltd. 2021 Full AnnualReport
Geelong Thailand Base
| Geelong Thailand Base |
| Vietnam New BaseSouth Cambridge |
| Guangdong Zhongshan Geelong |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Section I Important Notes, Table of Contents and Interpretation
The Board of Directors, the Board of Supervisors, and the Directors,Supervisors, and senior management of the Company guarantee the truthfulness,accuracy, and completeness of the contents of the annual report, and that thereare no false records, misleading statements, or material omissions, and assumeindividual and joint legal responsibility.
Qiu Jianping, the person in charge of the company, Ni Shuyi, the person incharge of accounting work, and Ni Shuyi, the person in charge of the accountinginstitution (accounting officer in charge), declare that they guarantee thetruthfulness, accuracy, and completeness of the financial report in this annualreport.
All directors have attended the board meeting at which this report wasconsidered.
This annual report involves forward-looking statements such as futureplans, which do not constitute material commitments by the Company toinvestors. Investors and related parties should maintain sufficient riskawareness in this regard and should understand the differences between plans,forecasts, and commitments.
The Company plans not to pay cash dividends, not to grant bonus shares,and not to increase its share capital by transferring its provident fund.
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Table of Contents
Section I Important Notes, Table of Contents and Interpretation ...... 5
Section II Company Profile and Key Financial Indicators ...... 9
Section IIIDiscussion and Analysis by Management ...... 14
Section IV Corporate Governance ...... 75
Section V. Environmental and Social Responsibility .................................................................. 101
Section VI Important Matters ...... 103
Section VII. Changes in Shares and Shareholders ...................................................................... 121
Section VIII Preferred Stock Related Information ...... 130
Section IX Bond Related information ...... 131
Section XFinancial Reports ...... 132
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Catalog of Available Documents
I. Financial statements containing the signatures and seals of the person in charge of the company, the person in charge of accountingwork, and the person in charge of the accounting institution.II. The original audit report containing the seal of the accounting firm and the signature and seal of the certified public accountant.III. Original copies of all company documents and announcements that have been publicly disclosed in the newspapers designated bythe CSRC during the reporting period.
Hangzhou Great Star IndustrialCo., Ltd
Chairman: Qiu Jianping
April 11,2022
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Paraphrase
| Items | Refers to | Meaning |
| Reporting Period | Refers to | January 1,2021 – December 31, 2021 |
| Company, Our Company, Listed Company, GreatStar | Refers to | Hangzhou GreatStar Industrial Co.,Ltd |
| Sheffield, Sheffield Tools | Refers to | Hangzhou GreatStar Sheffield Tools Co., Ltd. |
| Sheffield | Refers to | Hangzhou GreatStar Sheffield Trading Co.,Ltd |
| Guozhi Robotics | Refers to | Zhejiang Guozhi Robotic Co., Ltd |
| Arrow | Refers to | Arrow Fastener Co., LLC |
| Huada Kejie | Refers to | Changzhou Huada Kejie Opto-Electro Instrument Co., Ltd. |
| OLE-SYSTEMS | Refers to | Hangzhou OLE-SYSTEMS CO., LTD Co., Ltd |
| Donghai Bank | Refers to | Ningbo Donghai Bank Co., Ltd |
| Weiming Investment | Refers to | Hangzhou Weiming Investment Management Co., Ltd |
| PT Company | Refers to | PRIM'TOOLS LIMITED |
| GreatStar Group | Refers to | GreatStar Holdings Group Co., Ltd |
| Lista | Refers to | Lista Holding AG |
| Prime-Line | Refers to | Prime-Line Products, LLC |
| United Machinery | Refers to | Hangzhou United Machinery Co., Ltd |
| Haining Intelligent Company | Refers to | Haining GreatStar Intelligent Equipment Co., LTD |
| Zhongce Haichao | Refers to | Hangzhou Zhongce Haichao Enterprise Management Co., Ltd |
| Hangcha Group | Refers to | Hangcha Group Co.,Ltd |
| Hangzhou Haichao | Refers to | Hangzhou Haichao Enterprise Management Partnership(Limited Partnership) |
| GreatStar Europe | Refers to | GreatStar Europe AG |
| JFB AG, BeA | Refers to | Joh. Friedrich Behrens AG |
| Geelong | Refers to | Geelong Holdings Limited |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Section IICompany Profile and Key Financial Indicators
I. Company Profile
| Stock Abbreviation | GreatStar | Stock Code | 002444 |
| Stock Listing Stock Exchange | The Shenzhen Stock Exchange | ||
| Chinese name of the Company | 杭州巨星科技股份有限公司 | ||
| Abbreviation of the company's Chinese name | 巨星科技 | ||
| Foreign name of the Company (if any) | HANGZHOU GREATSTAR INDUSTRIAL CO., LTD | ||
| Abbreviation of the company's foreign name (if any) | GreatStar | ||
| Legal representative of the company | Qiu Jianping | ||
| Registered address | No. 35, Jiuhuan Road, Shangcheng District, Hangzhou | ||
| Postal code of the registered address | 310019 | ||
| Historical change of the company's registered address | Changed from No. 35, Jiuhuan Road, Jianggan District, Hangzhou to No. 35, Jiuhuan Road, Shangcheng District, Hangzhou | ||
| Office address | No. 35, Jiuhuan Road, Shangcheng District, Hangzhou | ||
| Postal code of office address | 310019 | ||
| Company website | www.greatstartools.com | ||
| E-mail address | zq@greatstartools.com | ||
II. Contact Person and Contact Information
| Secretary of the Board | Securities Affairs Representative | |
| Name | Zhou Siyuan | Lu Haidong |
| Contact address | No. 35, Jiuhuan Road, Shangcheng District, Hangzhou | No. 35, Jiuhuan Road, Shangcheng District, Hangzhou |
| Phone number | 0571-81601076 | 0571-81601076 |
| Fax | 0571-81601088 | 0571-81601088 |
| E-mail address | zq@greatstartools.com | zq@greatstartools.com |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
III. Information Disclosure and Preparation Location
| Website of the stock exchange where the company discloses its annual report | http://www.szse.cn/ |
| Name and website of the media where the company discloses its annual report | Securities Times, Securities Daily, Juchao Info(http://www.cninfo.com.cn) |
| Place where the company's annual report is available | Company Board Office |
IV. Registration Change
| Organization code | 91330000731506099D |
| Changes in the main business of the Company since its listing (if any) | No change |
| Changes in controlling shareholders (if any) | No change |
V. Other Relevant Information
Accounting firm hired by the company
| Accounting firm name | Pan-China Certified Public Accountants (Special General Partnership) |
| Accounting firm office address | Block B, China Resources Building, No. 1366 Qianjiang Road, Hangzhou, Zhejiang Province |
| Name of signing CPA | Fei Fanghua, Li Qian |
The sponsor engaged by the Company to perform continuous supervision duties during the reporting period
√ Applicable □ Not Applicable
| Name of sponsor institution | Office address of the sponsor institution | Name of sponsor representative | Continuing sponsor period |
| CITIC Capital Securities Co.,Ltd | Room 2203, North Tower, Shanghai Securities Building, No. 528 Pudong South Road, Pudong New Area, Shanghai | Fu Xinxiong, Li Huajun | Completion of the issue to December 31, 2021 |
Financial advisors engaged by the Company to perform ongoing supervisory duties during the reporting period
□ Applicable √ Not Applicable
VI. Main Accounting Data and Financial IndicatorsWhether the company is required to retroactively adjust or restate the accounting data of previous years
□ Yes √ No
| FY 2021 | FY 2020 | Year-on-year increase/decrease | FY 2019 | |
| Operating income(yuan) | 10,919,683,344.37 | 8,544,440,154.30 | 27.80% | 6,625,464,121.34 |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Net profit attributable to shareholders of the listed company(yuan) | 1,270,003,396.40 | 1,350,132,516.91 | -5.93% | 895,030,139.78 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profit or loss(yuan) | 1,073,557,965.88 | 1,233,758,395.96 | -12.98% | 820,214,354.48 |
| Net cash flow from operating activities(yuan) | 18,632,169.67 | 771,150,625.24 | -97.58% | 809,887,123.60 |
| Basic earnings per share (yuan/share) | 1.13 | 1.27 | -11.02% | 0.84 |
| Diluted earnings per share (yuan/share) | 1.13 | 1.25 | -9.60% | 0.84 |
| Return on equity weighted average(ROEWA) | 12.70% | 16.67% | -3.97% | 12.54% |
| End of 2021 | End of 2020 | Increase or decrease at the end of the current year compared with the end of the previous year | End of 2019 | |
| Total assets(yuan) | 17,307,154,886.67 | 13,677,779,045.68 | 26.53% | 11,132,498,783.42 |
| Net assets attributable to shareholders of listed companies (yuan) | 10,598,896,746.70 | 8,826,190,578.28 | 20.08% | 7,430,589,865.25 |
The lower of the Company's net profit before or after deduction of non-recurring profit or loss for the last three fiscal years isnegative, and the audit report for the latest year shows that there is uncertainty about the Company's ability to continue as a goingconcern
□ Yes √ No
The lower of net income before or after deducting non-recurring gains or losses is negative
□ Yes √ No
VII. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Differences in net profit and net assets in financial reports disclosed simultaneously under IAS and underPRC GAAP
□ Applicable √ Not Applicable
There is no difference between the net profit and net assets of the company in the financial report disclosed in accordance with IASand in accordance with PRC GAAP for the reporting period.
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
2. Differences in net profit and net assets between financial reports disclosed in accordance with foreignaccounting standards and those disclosed in accordance with PRC GAAP at the same time
□ Applicable √ Not Applicable
There is no difference between the net profit and net assets of the company in the financial reports disclosed in accordance withoverseas accounting standards and in accordance with Chinese accounting standards in the reporting period.VIII. Key Financial Indicators by Quarter
Unit: Yuan
| First quarter | Second quarter | Third quarter | Fourth quarter | |
| Operating income | 1,980,467,449.72 | 2,469,386,160.66 | 3,230,013,552.58 | 3,239,816,181.41 |
| Net profit attributable to shareholders of the listed company | 256,735,674.36 | 471,372,916.18 | 422,651,002.42 | 119,243,803.44 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses | 225,880,981.89 | 354,966,464.92 | 415,931,007.91 | 76,779,511.16 |
| Net cash flow from operating activities | -67,541,515.95 | 163,624,323.18 | -414,057,204.07 | 336,606,566.51 |
Whether the above financial indicators or their sums are materially different from the relevant financial indicators in the disclosedquarterly and semi-annual reports of the Company
□ Yes √No
IX. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Not Applicable
Unit: Yuan
| Item | Amount of FY2021 | Amount of FY2020 | Amount of FY2019 | Note |
| Gains or losses on disposal of non-current assets | -4,813,678.28 | -688,830.06 | -2,121,302.12 | |
| Government subsidies recognized in current profit or loss (except those closely related to the company's normal business operations, which are in accordance with national policies and are continuously enjoyed in accordance with certain standards in fixed or quantitative amounts) | 43,080,948.70 | 30,007,164.80 | 72,827,246.21 | |
| The cost of investments in subsidiaries, associates and joint ventures acquired by an enterprise is less than the gain arising from | 82,984,773.90 | 53,341,459.79 |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| the fair value of the identifiable net assets of the investee to which the enterprise is entitled at the time the investment is acquired | ||||
| Gains or losses from entrusting others to invest or manage assets | 1,808,120.10 | 1,792,735.16 | 4,763,145.26 | |
| Gains or losses from changes in the fair value of financial assets and liabilities held for trading, and investment income from disposal of financial assets and liabilities for trading and available-for-sale financial assets, except for effective hedging activities related to the Company's normal business operations | 95,687,869.64 | 62,235,238.75 | 13,326,704.55 | |
| Non-operating income and expenses other than those mentioned above | -127,210.71 | -632,799.21 | 826,929.67 | |
| Other profit or loss items that meet the definition of non-recurring profit or loss | 502,892.56 | 267,035.13 | 28,040.91 | |
| Less: Income tax affected amount | 17,156,521.94 | 25,137,742.09 | 11,751,861.59 | |
| Amount of minority interest affected | 5,521,763.45 | 4,810,141.32 | 3,083,117.59 | |
| Total | 196,445,430.52 | 116,374,120.95 | 74,815,785.30 | -- |
Details of other profit and loss items that meet the definition of non-recurring profit or loss:
□ Applicable √ Not Applicable
The Company does not have other details of gain or loss items that meet the definition of non-recurring gain or loss.Definition of non-recurring items of profit or loss listed in "Explanatory Announcement No. 1 on Disclosure of Information byCompanies Issuing Public Securities - Non-recurring Profit or Loss" as recurring items of profit or loss
□ Applicable √ Not Applicable
The Company does not have any items of non-recurring gains and losses listed in the "Explanatory Announcement No. 1 onDisclosure of Information by Companies Issuing Public Securities - Non-recurring Gains and Losses" that are defined as items ofrecurring gains and losses.
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Section IIIDiscussion and Analysis by ManagementI. Situation of the industry in which the company operates during the reporting period
The company is in the Tools & storage industry, and its main products include Hand Tools, Power Tools,Laser Measurement, and Storage, which are mainly used in the fields of household home maintenance,construction work, vehicle repair and maintenance, and map measurement and mapping. Among them, homeconstruction and its related repair and maintenance industry is the most important application channel, which alsoaccounts for the highest percentage.In North America and most parts of Europe, the large number of detached buildings and the large area percapita have resulted in costly and time-consuming repair and maintenance of residential houses. Due to therelatively high labor cost, residents in Europe and North America are more willing to carry out the repair andmaintenance of their houses and ancillary buildings by themselves, thus giving rise to the famous DIY culture inEurope and America. At the same time, European and American families have a large number of cars, and thedaily repair and maintenance of cars, including the inspection and replacement of vehicle parts, is also animportant part of DIY in Europe and America. As one of the necessities for repair and maintenance, there is alarge demand for professional and DIY level tools in North America and Europe, thus making North America andEurope the most important and largest market for the global tool industry.
As the oldest industry, it can be said that the tool industry has developed with the birth of mankind, and hasbeen in the process of rising in size in recent centuries as the global population continues to grow. Thanks to thecharacteristics of the product just demand and short replacement cycle, the industry growth rate is relatively stable,even if encountered the financial crisis in 2008, the industry can still maintain positive growth after a short periodof volatility. During 2015-2019, the global tool market maintained a steady growth trend, with the market sizeexceeding USD 80 billion. Since the onset of the COVID-19 in 2020, the global macroeconomy has beensignificantly negatively impacted, with the European and North American economies experiencing a temporarydecline and the global tool market experiencing brief volatility; subsequently, the European and North Americaneconomies were gradually recovered and the North American and European construction industries saw strongergrowth in 2021.In 2021, the global tools market benefited from the growth of the construction industry, andindustry demand was very strong, with growth reaching a new high in the past decade and exceeding $90 billionin size for the first time. According to the Frost & Sullivan report, the global tools market is expected to maintainan annual growth rate of around 5% in the next five years, driven by continued urbanization in emergingeconomies and economic recovery in developed countries.II. Main business of the Company during the reporting period
During the reporting period, the company continued to develop its main business around the global toolconsumption field, continued to increase the market share of hand tools, rapidly developed the field of lasermeasurement and tool cabinets, and strengthened the foundation of the power tool business development.Investment in new product development continued to increase, and non-hand tool products became the keydirection of research and development.In terms of channels, in addition to continuing to maintain highdouble-digit revenue growth in the North American and European cross-border e-commerce direct sales channel,the company has also expanded its e-commerce direct sales channel targeting Southeast Asia and other regions;
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
meanwhile, with the normalization of the epidemic related to Europe and North America, the local retaildistribution channel has gradually recovered, which also brings new opportunities and challenges for thecompany's business development.
1. Hand Tools Business
During the reporting period, the Company seized the strategic opportunities brought by the changes in theglobal hand tool market demand and supply chain pattern, and continued to increase its market share with itsstable supply chain, R&D advantages and channel management capabilities. During the reporting period, thenumber of new products independently developed by the Company reached a record high and gradually enteredmore product categories. The competitive advantages of the company's products continued to be strengthened, andthe output value of independently developed new products achieved growth beyond expectations. Importantprogress was also made in new customer development and new market expansion, and the acquisition of SK, ahigh-end auto repair tool brand, was completed to strengthen the company's product and brand matrix.Althoughthe shipment volume of the Southeast Asia manufacturing base was far below expectations due to the repeatedimpact of the epidemic, the company ensured stable business growth by transferring orders from Southeast Asia todomestic shipments in a timely manner, while successfully completing the commissioning of the new base inThailand and the second phase of the base in Vietnam. As a strategic focus of the company, cross-bordere-commerce continued to maintain rapid growth and gradually went online the power tool product line, withrevenue scale exceeding USD 100 million for the first time. In FY 2021, the sales revenue of hand tool businesswas RMB 6.553 billion,an increase of 14.52% year-on-year.
2. Power Tools Business
During the reporting period, the company gradually restored the vacuum cleaner business based onshop-vac's original production capacity and utilized its own R&D and channel advantages, and acquired theEuropean power nail gun BEA business to increase the power tool product line, and utilized BEA's sales networkto strengthen the European sales network system and enhance the company's channel resources. For the onlinemarket, the company innovated and developed a 20V lithium battery platform, gradually launched a full range ofpower tool products, and achieved an important breakthrough in power tool online sales. The power tools businessachieved sales revenue of 1.021 billion yuan in FY 2021, an increase of 453.77% year-on-year.
3. Laser Measurement Business
During the reporting period, the company's laser measurement business, with several years of technologyaccumulation, gained recognition from international giants and achieved rapid growth. The smooth delivery of thecompany's new platform and new products for laser tools has enhanced the company's influence in the field oflaser tools in North America and laid the foundation for customer diversification and business increment.Meanwhile, in response to the needs of the domestic market, the Laser Division actively adjusted its productpositioning, grasped the cost performance and steadily promoted the layout of the domestic market. Special laserinstruments such as LIDAR also successfully achieved mass production and use, laying the foundation for thecompany's new future performance growth. In FY 2021, laser measurement instruments achieved sales revenue ofRMB889 million, an increase of 73.13% year-on-year.
4. Storage Cabinet Business
During the reporting period, the company's storage cabinet business market share increased significantly, theoriginal European Lista business recovered strongly, and orders in the U.S. market continued to grow; thecompany completed the acquisition of 100% of the shares of Kilon in July, and through the active integration ofresearch and development, supply chain management and production capacity, etc., became the world's leadingmanufacturer of storage cabinets. At the same time, the company actively researches and develops and expands itsstorage cabinet products. In addition to the original cabinet products for garage workplace, the company also
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
actively enters into the cabinet products for indoor living scenarios and has made significant breakthroughs.In FY2021, the storage cabinet business achieved sales revenue of RMB 2.371 billion, an increase of 152.36%year-on-year.III. Analysis of Core Competitiveness
1. Innovation Advantages
Innovation has always been the soul of the company's development. The company has a senior professionaltool research and development team, always committed to new product development and innovation, uphold theconcept of details determine success or failure, improve the functionality and added value of products to ensurethe long-term core competitiveness of the company. During the reporting period, the company invested RMB 310million in R&D, designed 1,838 new products, and applied and obtained more than 300 new patents . Thecompany's central laboratory, as one of the earliest CNAS laboratories in the domestic hand tool industry, passedthe CNAS reassessment again during the reporting period. The company innovated and developed a number ofproducts including multi-functional pipe cutters, reversible 216-tooth ratchet wrenches and dual-position squeezeguns and achieved good market feedback, winning several customer awards, including HOME DEPOT 2021Annual Innovation Award and ProTool Innovation Award. During the reporting period, the company started thelarge-scale innovation of power tools, especially lithium battery power tools, and successfully developed a largenumber of cost-effective products and put them into cross-border e-commerce channels for trial production andsales. Facing the economic fluctuations brought by the COVID-19 and the changes occurring in the global toolindustry, the company's innovation advantages ensure that the company can respond and grasp marketopportunities in a timely manner, continue to gain market share and maintain long-term stable development.
2.Channel Advantages
The company has sales channels and customer trust, which is the guarantee of the continuous development of
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
the giant star. The company's diversified product structure and continuous innovation ability not only can meet theone-stop purchasing needs of channel customers to the greatest extent, but also continuously save the purchasingcost and management cost of channel customers, and continuously improve the stickiness of channel customers.The company has become one of the largest suppliers of Tools and Storage to many large supermarket chains suchas HOME DEPOT, WALMART, LOWES, Kingfisher, CTC, and so on, and is constantly expanding new productcategories. At present, there are more than 20,000 large hardware, building materials, auto parts and othersupermarket chains selling the company's various products at the same time, which effectively ensure the rapiddevelopment of the company's various innovative products.During the reporting period, the company acquired thechannel resources of Joh. Friedrich Behrens AG in Europe through the acquisition of its relevant assets, enhancingthe company's warehouse and logistics distribution system throughout Europe and expanding its marketboundaries. These channels have effectively ensured the rapid development of the Company's various innovativeproducts. At the same time, the company continues to make efforts in the new sales channel of cross-bordere-commerce, which has become the most important sales channel for the GreatStar in addition to the traditionallarge supermarket chains. As an effective supplement to traditional channels, this channel not only provides a newmarket for the company to develop its own brand, but also allows the company to better exploit its advantages ofrapid innovation, forming a product development model with positive cycle of product development - onlinevalidation - secondary development - offline pop-ups.
3. Supply Chain Advantages
After decades of development, the Company has established a global supply chain management system withChina as the core, and has established good cooperation with thousands of suppliers worldwide, ensuring that thecompany can respond quickly to market demand and complete timely delivery of various large orders withoutbeing limited to its own production capacity. Even in the face of the adverse impact of the COVID-19, as a globaltool industry leader with roots in China, the Company can still maintain a stable supply capacity thanks to China'ssupply chain system, which is the most complete in the world in terms of basic categories, laying the foundationfor the company to continue to boost its market share. At the same time, the efficiency and flexibility brought byChina's large volume and ultra-detailed supply chain network also allows the company to centralize procurementin China and distribute it globally, which greatly reduces the comprehensive procurement cost and enhances themarket competitiveness of the company's products. At present, the company has 21 manufacturing bases aroundthe world, which can fully meet various demands and cope with the complex external environment of each.
4. Brand Advantages
The company's main products are durable consumer goods for families and industrial-grade products forprofessionals, while the brand is the most effective guarantee for the company to provide products and services toconsumers in the long term, so the company has long been committed to the creation and development of its ownbrand. During the reporting period, the company continued to improve its own brand matrix and strengthen theadvantages of its own brands. Undertook the professional-grade power fastening tool brand BeA by acquiring therelated assets of Joh. Friedrich Behrens AG and completed the acquisition of high-end auto repair tool brand SK.Own brands, especially e-commerce brands, continued to grow, with sales revenue of WORKPRO, PONYJORGENSE, DURATECH, SWISSTECH and other brands increasing significantly year-on-year and salesrevenue of own brands reaching RMB 3.8 billion for the first time. Brand advantages not only further enhance theinternational competitiveness of the company's products, but also effectively improve the company's gross profitmargin and business stability, providing assurance for the long-term healthy development of the company.
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
5. International Advantages
During the reporting period, the domestic and international economic situation was complicated. As acompany with international development layout, the company made full use of the manufacturing capacity andsales market in different regions of the world to actively cope with the risks and look for opportunities.During the reporting period, the company continued to improve its global manufacturing division of labor.Facing the background of the New Crown epidemic affecting the production capacity of the Southeast Asianmanufacturing base, the company actively promoted the production of the Southeast Asian manufacturing base assoon as possible and transferred some orders to domestic production and delivery in a timely manner, fullyreflecting the advantages of the company's international layout and the flexibility of its production capacity. At the
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
same time, in the face of the stagnant international staff flow, the company actively takes advantage of the localteam in Europe and the United States to continue to provide customers with a perfect service system in thevicinity, ensuring the mutual matching of orders and after-sales service. The internationalization advantageeffectively ensures that the company is able to compete with other international competitors by leveraging theadvantages of China's manufacturing clusters while taking advantage of manufacturing costs in Southeast Asiaand local channel services in the European and American markets, thereby building stronger core competitiveness.The company is accelerating to become a global resource allocation company integrating local services in Europeand America, manufacturing in Asian industry chain and management R&D in China.IV. Main Business Analysis
1. Overview
In 2021, the global economy produced many profound changes and continued turbulence against thebackdrop of the ongoing and repeated outbreak of COVID-19 continuing to increase its unprecedented impact onthe world and increasing international frictions, and the global tool market continued to see a number of changesin the demand and supply chain landscape that favored the Company's long-term competitiveness, which mainlyinclude the following aspects. Due to the strong growth of China's economy and excellent control of the epidemic,the value of the RMB continued to rise relative to the currencies of other major economies, objectively causing areduction in RMB revenue for Chinese foreign exporters.The U.S. real estate market continues to remain buoyantand prosperous, bringing a steady upswing in demand for various tools. Since the second quarter, the prices of rawmaterials and commodities have been rising, global freight rates have been increasing and international logisticscapacity has been tight, which has had a significant negative impact on the company's profitability but hashighlighted the advantages of the company's global layout and has continued to gain market share. Although someinternational small and medium-sized tooling companies relied on the market boom to obtain orders, due to thecost rise much faster than the rise in revenue, resulting in a continuous deterioration of cash flow, following theearly 2020, the second half of 2021 saw a wave of bankruptcy, the industry further got clear. Under theseprofound changes, the Company continued to gain market share by virtue of its comprehensive competitiveness,and its annual operating revenue achieved more than expected growth, while net profit was basically the same asthe same period last year due to three negative factors: RMB exchange rate, raw material price and internationalshipping cost. During the reporting period, the company achieved total operating revenue of 10.920 billion yuan,an increase of 27.80% year-on-year, and net profit attributable to shareholders of the listed company was 1.270billion yuan, a decrease of 5.93% year-on-year. The performance of each business segment is as follows:
1. Hand Tools Business
During the reporting period, the Company seized the opportunity of rising demand but continuous supplyvoidance in the industry, gave full play to its advantages in innovation, supply chain, brand, channel andinternationalization, accelerated product innovation and category expansion, and continued to invest incross-border e-commerce business and private brand construction, achieving further increase in market share.
During the reporting period, on the basis of the rapid growth of the existing business, the Company made abreakthrough in the expansion of innovative products and new categories, and obtained a large number of largeorders for garden hand tools and outdoor products, and the sales and share of core customers also continued toincrease, further deepening the partnership.The company's own brand sales hit a new record high, and acquiredSK, a professional-level auto repair tool brand, and continued to improve the professional-level tool brandmatrix.The company's cross-border e-commerce business maintained rapid development, and continued to carry
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
out social media promotion of brand sponsorship and public welfare activities, maintaining high growth in brandexposure and crowd reach, and increasing online brand awareness.The company also pushed forward the layout ofglobalization platform, and the number of inbound platforms and new stores continued to grow. With thecontinuous improvement of the company's own brand matrix and the continuous growth of cross-bordere-commerce business, the company's own brand sales exceeded RMB 3.8 billion for the first time, an increase of
46.06% year-on-year. Against the backdrop of sluggish global capacity additions, the company continued topromote global capacity layout, basically completed the first round of capacity layout in Southeast Asia, andacquired capacity in China and Europe through acquisitions.Finally, the company's R&D expenditure continued toreach a record high, which strongly supported the construction of the company's own brand and the acquisition ofmarket share. The hand tool business achieved sales revenue of RMB 6.553 billion for the year, an increase of
14.52% year-on-year.
2. Power Tools Business
During the reporting period, the company re-invested in the development of power tools product line,synchronized the online and offline layout, accelerated the product innovation and channel expansion of powertools with electric vacuum cleaners and power nail guns as the core products, and launched a new 20V platformwith a full range of lithium battery power tools product line. The company completed the layout and optimizationof electric vacuum cleaner production capacity at the beginning of the year and resumed sales in North America inthe second half of the year, and quickly resumed production capacity and orders for power nail guns in Europeafter completing the acquisition of BeA's assets in June, laying a good foundation for the company's power toolbusiness. At the same time, we launched a full range of power tool products online, and achieved good reputationin the market, especially the new lithium battery products once out of stock. As the first booming year of thecompany's power tools in 2021, the sales revenue of power tools business was 1.021 billion yuan, an increase of
453.77% year-on-year.
3. Laser Measurement Business
During the reporting period, the company continued to promote product development, mass production anddelivery for key customers, made breakthroughs in new products and channel expansion, obtained exclusivelong-term orders from important customers, and gradually established the international market influence of thecompany's laser tools. For the domestic market, the company readjusted its brand, product positioning andbusiness direction, innovated specific products and achieved good growth. LIDAR products continued to go tomarket and customized products continued to be landed, with deliveries increasing by more than 100%year-on-year. The annual sales revenue of laser measuring instrument business was RMB889 million, an increaseof 73.13% year-on-year.
4. Storage Cabinet Business
During the reporting period, the European market recovered well and LISTA business returned to growth,with annual revenue growth of more than 30%. Important progress was made in the expansion of new categoriesand channels in the U.S. market, and the order volume continued to increase. After completing the acquisition ofKeelong, the company and Keelong carried out full integration in the existing business. Although Keelongsuffered certain losses in the second half of the year due to raw material prices and freight costs, the companyactively optimized costs and believes it will achieve better growth in the new year. At the same time, thecompany's Thailand box and cabinet production base was fully put into operation, laying the foundation ofproduction capacity for growth in FY22. The annual storage container business achieved sales revenue of 2.371billion yuan, an increase of 152.36% year-on-year.
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
2. Income and Costs
(1) Composition of operating income
Unit: Yuan
| FY 2021 | FY 2020 | Year-on-year increase or decrease | |||
| Amount | Share of operating revenue | Amount | Share of operating revenue | ||
| Total operating income | 10,919,683,344.37 | 100% | 8,544,440,154.30 | 100% | 27.80% |
| By Industry | |||||
| Tool and storage cabinets | 10,849,925,564.41 | 99.36% | 8,502,327,129.89 | 99.51% | 27.61% |
| Other operating income | 69,757,779.96 | 0.64% | 42,113,024.41 | 0.49% | 65.64% |
| By products | |||||
| Hand Tools | 6,540,834,718.85 | 59.90% | 5,722,716,497.05 | 66.98% | 75.74% |
| Power Tools | 1,021,102,413.74 | 9.35% | 184,390,488.35 | 2.16% | 1.32% |
| Laser Measurement | 888,587,229.84 | 8.14% | 513,234,699.39 | 6.01% | 7.88% |
| Storage cabinet | 2,370,715,437.22 | 21.71% | 939,420,434.18 | 10.99% | 14.57% |
| Personal Protective Equipment | 28,685,764.76 | 0.26% | 1,142,565,010.92 | 13.37% | 0.00% |
| Other operating income | 69,757,779.96 | 0.64% | 42,113,024.41 | 0.49% | 0.48% |
| By Region | |||||
| Americas | 7,521,994,025.83 | 68.89% | 6,087,960,337.66 | 71.25% | 23.56% |
| Europe | 2,399,120,860.68 | 21.97% | 1,597,573,574.54 | 18.70% | 50.17% |
| Other | 510,223,523.81 | 4.67% | 373,208,130.61 | 4.37% | 36.71% |
| Domestic (China) | 418,587,154.09 | 3.83% | 443,585,087.08 | 5.19% | -5.64% |
| Other operating income | 69,757,779.96 | 0.64% | 42,113,024.41 | 0.49% | 65.64% |
| By sales model | |||||
| Owned Brands (OBM) | 3,836,999,428.09 | 35.14% | 2,626,930,299.06 | 30.74% | 46.06% |
| Customer Brand (ODM) | 7,012,926,136.32 | 64.22% | 5,875,396,830.83 | 68.76% | 19.36% |
| Other operating income | 69,757,779.96 | 0.64% | 42,113,024.41 | 0.49% | 65.64% |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
(2) Industries, products, regions, and sales patterns that account for more than 10% of the Company'soperating incomes or operating profits
√ Applicable □ Not Applicable
Unit: Yuan
| Operating income | Operating Costs | Gross margin | Increase or decrease in operating income over the same period of the previous year | Increase or decrease in operating costs over the same period of the previous year | Increase or decrease in gross margin over the same period of the previous year | |
| By Industry | ||||||
| Tool and storage cabinets | 10,849,925,564.41 | 8,147,389,910.45 | 24.91% | 27.61% | 37.93% | -5.62% |
| Sub-products | ||||||
| Hand Tools | 6,540,834,718.85 | 4,716,308,916.32 | 27.89% | 14.30% | 17.84% | -2.17% |
| Power Tools | 1,021,102,413.74 | 799,043,331.71 | 21.75% | 453.77% | 502.20% | -6.29% |
| Laser Measurement | 888,587,229.84 | 648,486,058.41 | 27.02% | 73.13% | 77.32% | -1.72% |
| Storage cabinet | 2,370,715,437.22 | 1,959,219,152.16 | 17.36% | 152.36% | 213.89% | -16.20% |
| Personal Protective Equipment | 28,685,764.76 | 24,332,451.85 | 15.18% | -97.49% | -96.89% | -16.38% |
| By Region | ||||||
| Americas | 7,534,636,811.76 | 5,658,997,744.63 | 24.89% | 23.76% | 33.35% | -5.40% |
| Europe | 2,399,120,860.68 | 1,750,621,444.76 | 27.03% | 50.17% | 65.09% | -6.59% |
| By sales model | ||||||
| Owned Brands (OBM) | 3,836,999,428.09 | 2,869,213,853.22 | 25.22% | 46.06% | 60.44% | -6.70% |
| Customer Brand (ODM) | 7,025,568,922.25 | 5,282,578,820.37 | 24.81% | 19.58% | 28.27% | -5.09% |
In the event that the statistical caliber of the company's main business data is adjusted in the reporting period, the company's mainbusiness data for the most recent year adjusted by the caliber at the end of the reporting period
□ Applicable √ Not Applicable
(3) Whether the company's income from physical sales is greater than its income from labor services
√ Yes□ No
| Industry | Projects | Unit | FY 2021 | FY 2020 | Year-on-year |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Classification | increase or decrease | ||||
| Tools and storage cabinets | Sales volume | PCS | 444,440,557 | 499,606,095 | -11.04% |
| Production volume | PCS | 497,037,108 | 471,227,326 | 5.48% | |
| Inventory | PCS | 113,575,793 | 60,979,242 | 86.25% |
Reasons for a year-on-year change of 30% or more in relevant data
□ Applicable √ Not Applicable
(4) Performance status of significant sales contracts and significant purchase contracts entered into by theCompany as of the reporting period
□ Applicable √ Not Applicable
(5) Composition of operating costs
Industry and Product Categories
Unit: Yuan
| Industry Classification | Items | FY 2021 | FY 2020 | Year-on-year increase or decrease | ||
| Amount | Share of operating costs | Amount | Share of operating costs | |||
| Tools and storage cabinets | 8,147,389,910.45 | 99.65% | 5,906,839,891.29 | 99.66% | 37.93% | |
| Other operating costs | 28,733,758.05 | 0.35% | 19,926,004.47 | 0.34% | 44.20% | |
Unit: Yuan
| Product Categories | Items | FY 2021 | FY 2020 | Year-on-year increase or decrease | ||
| Amount | Share of operating costs | Amount | Share of operating costs | |||
| Hand Tools | 4,716,308,916.32 | 57.69% | 4,002,226,666.13 | 67.52% | 17.84% | |
| Power Tools | 799,043,331.71 | 9.77% | 132,687,395.42 | 2.24% | 502.20% | |
| Laser Measurement | 648,486,058.41 | 7.93% | 365,707,432.15 | 6.17% | 77.32% | |
| Storage cabinet | 1,959,219,152.16 | 23.96% | 624,178,422.88 | 10.53% | 213.89% | |
| Personal Protective Equipment | 24,332,451.85 | 0.30% | 782,039,974.71 | 13.20% | -96.89% | |
| Other operating costs | 28,733,758.05 | 0.35% | 19,926,004.47 | 0.34% | 44.20% | |
Notes:
None
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
(6) Whether there was any change in the scope of consolidation during the reporting period
√ Yes□ No
For details, see Section X. Financial Reporting: VIII. Changes in Scope of Consolidation.
(7) Significant changes or adjustments to the company's business, products or services during the reportingperiod
□ Applicable √ Not Applicable
(8) Major sales customers and major suppliers
The company's major customers
| Total sales amount of the top five customers (yuan) | 5,079,793,692.55 |
| Top five customers' combined sales amount as a percentage of total annual sales | 46.51% |
| Ratio of related party sales to total annual sales of the top five customers | 0.00% |
Information on the company's top 5 customers
| Serial number | Customer Name | Sales (yuan) | Percentage of total annual sales |
| 1 | Customer I | 2,322,454,641.25 | 21.27% |
| 2 | Customer II | 1,193,948,350.96 | 10.93% |
| 3 | Customer III | 1,075,619,185.78 | 9.85% |
| 4 | Customer IV | 247,328,727.59 | 2.26% |
| 5 | Customer V | 240,442,786.97 | 2.20% |
| Total | -- | 5,079,793,692.55 | 46.51% |
Other description of major customers
□ Applicable √ Not Applicable
The company's major suppliers
| Total purchase amount of the top five suppliers (yuan) | 425,498,210.39 |
| Top five suppliers' combined purchase amount as a percentage of total annual purchase | 5.22% |
| Percentage of related party purchases among the top five suppliers' purchases to total annual purchases | 0.00% |
Information on the company's top 5 suppliers
| Serial number | Supplier Name | Purchase amount (yuan) | Percentage of total annual procurement |
| 1 | Supplier I | 106,828,258.09 | 1.31% |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| 2 | Supplier II | 99,765,980.42 | 1.23% |
| 3 | Supplier III | 75,946,664.94 | 0.93% |
| 4 | Supplier IV | 74,251,973.00 | 0.91% |
| 5 | Supplier V | 68,705,333.94 | 0.84% |
| Total | -- | 425,498,210.39 | 5.22% |
Other information on major suppliers
□ Applicable √ Not Applicable
3.Expense
Unit: Yuan
| FY 2021 | FY 2020 | Year-on-year increase or decrease | Description of significant changes | |
| Selling expenses | 593,003,103.68 | 458,274,408.65 | 29.40% | This is mainly due to the increase in the scope of consolidation in the current period. |
| Administration expenses | 686,120,731.06 | 500,999,938.00 | 36.95% | This is mainly due to the increase in the scope of consolidation in the current period. |
| Finance costs | 64,801,716.03 | 113,580,005.05 | -42.95% | This is mainly due to exchange rate fluctuations. |
| R&D expenses | 309,763,366.15 | 245,372,069.36 | 26.24% |
5. R&D Input
√ Applicable □ Not Applicable
| Name of main R&D projects | Project Purpose | Project Progress | Objectives to be achieved | Expected impact on the future development of the company |
| Study on double extrusion casting process of aluminum alloy parts for unequal thickness hand cutting tools | Increase productivity and reduce labor costs | Already completed | Reducing the number of workers | Increase the number of product line |
| Research on injection molding process of high strength fixture | Improve product performance and stability | Already completed | Ensuring product stability | Increase the number of product line |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| handle modified by stepless nanoparticles | ||||
| Research and application of constant current driving technology of LED for high power lighting | Reduce energy loss, making the product performance more stable | Already completed | Ensuring product stability | Increase the number of product line |
| Research on high-strength stainless steel sheet fine blanking-extrusion composite forming technology | Increase productivity | Already completed | Reducing the number of workers | Increase the number of product line |
| Research and application of intelligent manufacturing technology of aluminum extrusion die for handheld lighting tools | Save material and improve material utilization | Already completed | Cutting the cost | Increase the number of product line |
| Research and application of high-reliable drive power technology for single high-power LED lighting | Reduce energy loss, making the product performance more stable | Already completed | Ensuring product stability | Increase the number of product line |
| Research on the technology of multi-station progressive die for nail gun sheet metal parts with double guiding mechanism | Improved production efficiency, fewer workers, more stable products | Already completed | Reducing the number of workers | Increase the number of product line |
| Research on the fundamentals of aluminum alloy rheological | Save material and improve material utilization | Already completed | Cutting the cost | Increase the number of product line |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| extrusion casting forming technology | ||||
| Research on rapid thermal cycle injection molding technology of polymer material modified handheld fixture | Save material, improve material utilization, improve product performance and stability | Already completed | Cutting the cost | Increase the number of product line |
| Research on high power LED lighting drive and control technology | Energy saving and environmental protection | Already completed | Ensuring product stability | Increase the number of product line |
| Study on nitrogen spring type fine blanking die holder and fine blanking forming of impact parts | Improve product performance and stability | Already completed | Ensuring product stability | Increase the number of product line |
| Research on a multi-station automated welding technology and equipment | Reduce labor and increase productivity | Already completed | Reducing the number of workers | Further improvement of automatic production |
| Research on the improvement scheme and technology of LED work light luminous performance | Reduce energy loss, making the product performance more stable | Already completed | Ensuring product stability | Increase the number of product line |
| RD03(2019)Research and Development of Environmentally Friendly Waste Separation and Recycling Bins | As the phenomenon of resource scarcity is becoming more and more serious, the project of renewable energy recovery is being paid more and more attention by the society, and waste separation is one of the prerequisites for renewable energy recovery, and it is also a | Research period for this project: 07/2019-06/2022 01.07.2019 - 31.12.2019: Conduct project research, market demand analysis; 01.01.2020 - 30.06.2020: design of the product development | The project provides environmentally friendly sorting and recycling bins that separate the four categories of "dry garbage", "wet garbage", "hazardous garbage" and "recyclable garbage", and at the same time set up an active carbonization layer to purify the air, raise people's awareness of garbage sorting and increase the rate of | Separate the four categories of "dry garbage", "wet garbage", "hazardous garbage" and "recyclable garbage", and at the same time set up an active carbonization layer to purify the air, raise people's awareness of garbage sorting and increase the rate of garbage sorting and recycling. |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| reform of the traditional way of waste collection and disposal, as well as a scientific management method for the effective disposal of waste. In the face of increasing waste production and deteriorating environmental conditions, how to maximize the use of waste resources, reduce the amount of waste disposal and improve the living environment through waste separation management is one of the urgent issues of common concern in the current society. | program. 01. 07. 2020 - 31. 12. 2021: Determine the transformation plan for the new transformation process, and carry out trial production and put it into use. 01.01.2022 - 30. 06. 2022: Improve the product through market customer feedback; final program implementation. | garbage sorting and recycling. | ||
| RD01(2020)Research and Development of Quick Connect Tool Cabinet | Tool box cabinet is generally used in automotive repair, enterprise workshop equipment maintenance, instrumentation maintenance, laying a variety of lines and other work occasions. The general toolbox cabinet part of the box body is welded or riveted fixed structure, the structure of this toolbox cabinet is not removable, the processing automation degree is low, and occupies a large space in the transportation process, and it is not convenient for storage and transportation. Tool cabinet quick connection | The planned period of this project: 2020.01-2020.10 (1) 2020.01.01-2020.02.29: complete market research on quick-connect tool cabinets, conduct demand analysis, and carry out initial functional target design. (2) 2020.03.01-2020.05.30: complete the splitting of the functional modules of the quick-connect tool cabinet, and refine and analyze the design ideas of each module to form | Tool cabinets are mainly used to store tools, the existing tool cabinets are mainly fixed structure, that is, the cabinet body and so on are manufactured for the whole structure, generally using the whole bending and then welding process, the installation and disassembly is inconvenient, occupy more space, transportation costs are also higher. With the progress of science and technology, there gradually appeared disassembled tool cabinets, but the existing disassembled tool cabinets take a long time to assemble, the workload is large, and the assembled cabinet is not solid. Therefore, in response to the above problems, this project | Tool cabinets are mainly used to store tools, the existing tool cabinets are mainly fixed structure, that is, the cabinet body and so on are manufactured for the whole structure, generally using the whole bending and then welding process, the installation and disassembly is inconvenient, occupy more space, transportation costs are also higher. With the progress of science and technology, there gradually appeared disassembled tool cabinets, but the existing disassembled tool cabinets take a long time to assemble, the workload is large, and the assembled cabinet is not solid. Therefore, in response to the above problems, this project |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| technology is favored by the market at home and abroad, the current technology is mostly focused on the use of rivet nuts or bolts and slots in the structure, this type of assembly method connection is simple and can achieve rapid installation and disassembly. | the implementation plan of each part of the functionalities of the quick-connect tool cabinet. (3) 2020.06.01-2020.08.31: complete the design and development of each part of the quick-connect tool cabinet and the production of samples, and carry out detailed refinement for the parts and specific processes. (4) 2020.09.01-2020.10.31: Test the quick-connect tool cabinet, complete the acceptance of the project, and summarize, conclude and review. | develops a quick-connect tool cabinet. | develops a quick-connect tool cabinet. | |
| RD02(2020) Research and Development of Horizontal Toolbox | With the needs of people's life and production, tool boxes have been more and more widely used in people's daily life. And there is a kind of toolbox is set with a lid, the user can easily open the lid to take out the tools. But when the toolbox is in a more open environment (such as construction sites, etc.), the items in the toolbox is in an unsafe state. At present, lock | With the needs of people's life and production, tool boxes have been more and more widely used in people's daily life. And there is a kind of toolbox is set with a lid, the user can easily open the lid to take out the tools. But when the toolbox is in a more open environment (such as construction sites, | This project develops and provides a horizontal toolbox with an improved anti-pick lock system. The toolbox uses a padlock and a lock mechanism with multiple locking points that can be operated simultaneously from one end of the box. And a lock mechanism that causes damage due to moving objects into and out of the toolbox normally can be avoided, and the lock system which extends to the storage area less will be provided. | This project develops and provides a horizontal toolbox with an improved anti-pick lock system. The toolbox uses a padlock and a lock mechanism with multiple locking points that can be operated simultaneously from one end of the box. And a lock mechanism that causes damage due to moving objects into and out of the toolbox normally can be avoided, and the lock system which extends to the storage area less will be provided. |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| rings are generally set on the toolbox and lid, and then use padlocks to lock them. But the lock ring and padlock in this locking way are in an exposed state, it is easy to be destroyed by external force. | etc.), the items in the toolbox is in an unsafe state. At present, lock rings are generally set on the toolbox and lid, and then use padlocks to lock them. But the lock ring and padlock in this locking way are in an exposed state, it is easy to be destroyed by external force. | |||
| RD03(2020) Research and Development of Quick Disassembly Socket Structure | Most of the traditional tool cabinets and workbenches use screws to fix the sockets, which is inconvenient to install and dismantle and reduces the work efficiency. As an indispensable product for our production life, the socket module used in the current market is mostly made by placing the conductive copper reed inside the injection mold and then injection molding to get the final whole product, the conductive reed inside the socket module produced by this process and structure is not interchangeable and once damaged, the whole module can only be discarded. | "The planned period of this project: 2020.11-2021.10 (1) 2020.11.01-2020.12.31: Complete market research on quick-disassembly socket structure, conduct requirements analysis, and carry out initial functional target design. (2) 2021.01.01-2021.04.30: Complete the splitting of the functional modules of the quick-disassembly socket structure, and refine and analyze the design ideas of each module to form an implementation plan for the functions of each part of the quick-disassembly socket structure. | This project develops a quick-disassembly socket structure to achieve quick disassembly and interchangeability of socket modules for application to national socket standards, and with easy and fast installation and disassembly, reducing the need for distribution and saving transportation costs | This project develops a quick-disassembly socket structure to achieve quick disassembly and interchangeability of socket modules for application to national socket standards, and with easy and fast installation and disassembly, reducing the need for distribution and saving transportation costs |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| (3) 2021.05.01-2021.10.31: Complete the design, development and production of samples for each part of the quick-disassembly socket structure, with detailed refinement for parts and specific processes. (4) 2021.11.01-2021.12.31: Quickly disassemble the socket structure for testing, complete the acceptance of the project, and summarize, conclude, and review. " | ||||
| RD01(2021) Research and Development of Automatic Welding Equipment for Tool Cabinets | With the development of digital computer technology, there is a higher requirement for the precision of tool cabinets. However, the current level of automation of the welding equipment used is not high, tool cabinet welding precision is not enough, and the performance of the machinery and equipment is not enough, which can easily lead to waste of resources and instrument damage, and the security is not high, leading to increased control difficulties, | "The planned period of this project: 2021.03.01-2021.12.31 (1) 2021.03.01-2021.03.31: Market research, demand analysis, preliminary work objectives and initial functional objectives design according to the work plan. (2) 2021.04.01-2021.07.31: Complete the construction of the function module of the automatic welding equipment for the tool cabinet, | This project carries out the research and development of automatic welding equipment for tool cabinets, using computer key technologies to achieve self-adaptive control mode, greatly reducing the pressure of employment. The use of machines instead of manpower also greatly improves the work efficiency and reduces the difficulty of management and control. With the help of database technology, the welding equipment can enter the full automatic mode, which can not only randomly correct the possible deviation, improve the welding precision of the tool cabinet, but also greatly | The use of machines instead of manpower also greatly improves the work efficiency and reduces the difficulty of management and control. And with the help of database technology, the welding equipment can enter the full automatic mode, which can not only randomly correct the possible deviation, improve the welding precision of the tool cabinet, but also greatly reduce the risk problems in the production process. |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| making our company tool cabinet welding manufacturing technology limited. The use of machines instead of manual also greatly improve the efficiency, reduce control difficulties, and with the help of database technology, the welding equipment can enter the fully automatic mode, not only can randomly correct possible deviations, improve the tool cabinet welding precision, but also can greatly reduce the risk problems in the production process. | split and assemble each module of the equipment, and carry out each design according to the design function goal, focusing on the automatic welding function and automatic switching control function of the equipment. (3) 2021.08.01-2021.09.30: The test department conducts the first round of testing, evaluates the quality of the automatic control welding function of the equipment, determines the quality grade of the equipment through the analysis of product precision, analyzes and summarizes the test verification records, and points out the existing problems and deficiencies and puts forward suggestions for improvement. (4) 2021.10.01-2021.11.30: The R & D department optimizes the details of the equipment according to the results of the last round of tests, | reduce the risk problems in the production process. |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| mainly optimizing its performance problems such as switching deviation in practical application, and putting it into practical application after further improvement. This stage examines the advantages of this equipment compared with traditional equipment. (5) 2021.12.01-2021.12.31: Summarize the project, analyze the trial results, and plan for the equipment to be officially launched.” | ||||
| RD02(2021) Research and Development of Multifunctional Combined Gas Furnace | With the improvement of people's living standards and the influence of technological innovation and market competition, some new stoves have been introduced in the market in recent years, among which gas stoves and tool cabinets have received great attention from the market. A variety of new gas stoves and tool cabinets are constantly launched on the market, and the upgrading and innovation of these tools has become a development trend of stoves. However, at present, the gas stove on | "The planned period of this project: 2021.11.01-2022.10.31 (1) 2021.11.01-2021.12.31: conduct initial research, investigate market demand, refer to the characteristics of similar products in the market, and consumer feedback of similar products in the market, calculate the cost and analyze the production feasibility, and determine the direction of research and development. | In view of the shortcomings of the existing technology, the gas diversion technology and related welding technology are proposed to transform the traditional gas furnace to realize the multi-function of the gas furnace, so that it has the functions of household use, outdoor use, removable, easy to carry, adjustable heating speed and so on. And the multi-function gas furnace really realizes the integration of tool cabinet and gas furnace, which provides great convenience for users. | It realizes the multi-function of the gas furnace, makes it have the functions of household, outdoor use, disassembly, easy to carry, adjustable heating speed, etc., and the multi-function gas furnace really realizes the integration of tool cabinet and gas furnace, which provides great convenience for users. |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| the market has few functions, and most of them are only used as household gas stoves to heat food, and its simple structure makes the function of the gas stove single. And the carbon deposits and dirt on the bottom of the disk and the heater of some gas-fired gas furnaces can not be cleaned and maintained in time, which not only conducts heat slowly but also wastes effective heat energy, which directly affects the heating quality and the service life of the furnace. And the stove is relatively closed, resulting in soft fire and waste of gas, and then the furnace plate can not heat up quickly, and the ingenious combination of tool cabinet and gas furnace can not be realized. Taking up too much space and cumbersomenesswill be the biggest problem. | (2) 2022.01.01-2022.04.30: after determining the R & D direction, the R & D department develops the product, determines the function of the product category, designs the R & D sample through the relevant technology, and then the test department carries on the function test to the R & D sample to test whether its automatic temperature regulation function and other structural functions are qualified, and the R & D department will improve the sample after it is qualified. (3) 2022.05.01-2022.07.31: improve the product, refine the selling point of the product through the feedback of different users, and formulate a detailed optimization and improvement plan. (4) 2022.08.01-2022.09.30: the testing department conducts the second round of testing of the |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| product, mainly testing whether the technical specifications of the product are up to the standard and whether the performance meets the expected level, so as to ensure that it reaches the advanced level and completeness of the industry. (5) 2022.10.01-2022.10.31: complete the acceptance of the project, and summarize and review. " | ||||
| Research and Development of Processing Technology of High Strength and Environmental Protection ABS Material for Hand Tools | It can reduce material cost, save energy and materials. | Already completed | Its products can be used for a long time in low temperature environment, and have environmental protection and flame retardancy. | |
| Research and Development of Wear-resistant and Environment-friendly Nylon Material Processing Technology for Hand Tools | To seek the balance of strength, toughness and flame retardancy in the process of alloy preparation | Already completed | This kind of nylon alloy has the advantages of low water absorption, good dimensional stability, good dry and low temperature toughness, flame retardancy and heat resistance. | |
| Research and Development of Multifunctional Utility Knife Assembly Machine | Save manpower, cost and efficiency | Already completed | Improve work efficiency. | |
| Research and | Surface Oxidation | Already completed | The surface wear resistance of |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Development of New Aluminum Alloy Material Easily Oxidized | treatment of Aluminum Alloy | the aluminum alloy strip is better. | ||
| Research and Development of Heat Treatment Process of New Stainless Steel for Hand Tools | Improvement of heat treatment process of stainless steel in existing technology | Already completed | After heat treatment, the stainless steel has better quality, higher mechanical strength, less deformation and better corrosion resistance. | |
| Research and Development of Heat Treatment Process for New Powder Metallurgy Parts for Hand Tools | In the process of heat treatment, multiple tools with different shapes are heat treated at the same time. | In process | Improve work efficiency | |
| Application and Development of Uniform Visible Laser Instrument with Sensing Function | In the intelligent era, the current traditional laser instruments are added to more position, angle, temperature and other sensors to achieve intelligent sensing, alarm, self-diagnosis functions. | Already completed | In the line projector represented by MK, three laser lines perpendicular to each other form an omni-directional working face, and high-brightness laser modules produce high-visibility laser lines. For the series of products represented by SP, the leveling system of the instrument is controlled by electronic sensors, which can achieve high precision leveling; the optical path design made by visual laser and optical components makes the laser line clearly visible and easy to use when the instrument is used for a long distance. | It can effectively enhance the competitiveness of products, expand the current product line, and attract more customers in the instrument industry because these customers have higher requirements for laser instruments. Finally, it can continue to improve sales. |
| Application and Research of 3D Depth Camera in Mobile Robot | 3D (TOF) technology has rich application scenarios and has been applied in many fields. At present, the demand for 3D (TOF) | Already completed | Wide-angle molded lens; core board hardware circuit; multi-function interface board and data protocol and format; pseudo-color rendering; small | It opens up new product lines and enter the fields of robot, self-driving, intelligent warehousing, industrial security and so on. |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| depth imaging technology is becoming increasingly prominent in many industries, such as robot navigation, intelligent security, AR/VR and so on. | batch production of industrial depth camera; SDK development package | With good applications, it will continue to increase the share of non-laser tools in the next few years. | ||
| Establishment and Research of High-power and High-precision 3D Laser Architecture Instrument Platform | At present, the demand of users for high-power omni-directional 3D laser is more urgent, because there are outdoor applications or indoor applications, the current middle and low-end products are mainly the lack of laser visibility. | Pilot stage (55%) | Design of green light using high power 80mW to 140mW and red light of 200mW; mechanism design of high power temperature rise and heat dissipation optimization; design of temperature sensor and temperature control and temperature protection program; design of high capacity battery module. | It can occupy the advantage and leading position in the market competition, lead the market in the application and promotion of high-power products, and finally win the market effectively. |
| Application and Development of Panoramic Real-time Indoor and Outdoor Movable Space Laser Measuring Instrument | In order to solve the problem that it is impossible to observe and aim in indoor long-distance laser ranging, it can effectively improve the accuracy and user experience. | Pilot stage (60%) | Image output of panoramic camera, development of 4x image magnification and detail enhancement algorithm, development of high precision ranging module up to 200m working distance, supporting APP development and stereotyping | It makes a breakthrough in the professional field of long-distance ranging applications, prompting product competitiveness and enriching product lines. |
| Study on Injection Molding Process of Hand Tool Plastic Storage Box Based on Blending Modification Technology | 20% reduction in cost | Trial production in small batch | Reduce the scrap rate | Increase corporate profits |
| Study on Injection Molding Technology of Ultra-thick Wall Screwdriver Handle | Increase the original production efficiency by 1.5 to 2 times | Trial production in small batch | Improve production efficiency | Increase corporate profits |
| Study on the Production Technology of Assembled Putty | 20% increase in efficiency compared with the original production | Production in small batch | Improve production efficiency | Increase corporate profits |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Knife with Split Inner Core Structure | ||||
| Research on Riveting Process of Tail Nail Reinforced by Putty Cutter Based on Industrial Robot | 10% reduction in cost | Production in small batch | Reduce the scrap rate | Increase corporate profits |
| Study on Two-step Precision Injection Molding Process of High Weather-resistant TPE for Tool Handle | The runner increased from original 0.5MM to 1 to 2MM. | Production in small batch | Improve production efficiency | Increase corporate profits |
| Research on Non-uniform Shrinkage Control Technology of Thick-walled Plastic Parts of Long Handle Hand Tools | The scrap rate of the latter process is reduced to less than 1 ‰. | Production in small batch | Reduce the scrap rate | Increase corporate profits |
| Study on Precision Injection Molding Process of Low Color Difference Fiber-added Nylon | Reduce the molding temperature by 3% | Production in small batch | Improve production efficiency | Increase corporate profits |
| Research on the Processing Technology of Lighting Tool Lamp with Non-screw Connection Structure | Increase productivity by 30% | Production in small batch | Improve production efficiency | Increase corporate profits |
| Study on High Peel Strength Thermoplastic Elastomer for Encapsulating | Polypropylene composites filled with 20% and 40% ultra-fine talc powder | Production in small batch | Reduce the scrap rate | Increase corporate profits |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Nylon Handle of Hand Tools and Its Application | ||||
| Research on High Efficiency Stamping Production Line of Stainless Steel Sheet for Putty Knife | Make the depth of the handle plate uniform, adjusting from depth 3MM to 1.5MM | Trial production | Improve production efficiency | Increase corporate profits |
| Study on Low Shrinkage Polypropylene Composites Filled with Calcium Carbonate and Molding Process of Plastic Parts | 2. The rivet column is higher than the bottom of countersunk hole of other fittings after assembly. 1. 5 to 2MM. | Pilot run | Improve production efficiency | Increase corporate profits |
| The Picking and Unloading System of Screwdriver Arbor Manipulator Based on PLC | 10% reduction in cost | Trial production | Reduce the scrap rate | Increase corporate profits |
| Multi-specification Screwdriver Arbor Injection Mould Based on Rapid Positioning Technology | Cost reduction | Trial production | Reduce the scrap rate | Increase corporate profits |
| Study on Manufacturing Technology of Folding Assembly Plastic Operating Platform for Woodworking Decoration | Improve work efficiency | Pilot run | Improve production efficiency | Increase corporate profits |
| Research and Development of Cloud Platform for Foreign Trade Lean Supply Chain | Flexible business to realize the integration of industry and finance | Completed | Meet multi-mode business expansion |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Development and Application of Ultra-high Frequency Pulse Automatic Quenching in Cutting Tools | Increase product functions, improve product performance, and develop new products | Completed | Realize sales and expand market share | |
| Development and Research of Hybrid Power Tools | Increase product functions, improve product performance, and develop new products | Completed | Achieve sales and meet customer needs for professional-grade hybrid tools at home and abroad | |
| Research and Application of Communication Protocol in Electric Tools | Increase product functions, improve product performance, and develop new products | Under development | It meets the needs of customers of power tool series products at home and abroad, increases the export volume of the company's products, and improves the company's international reputation | |
| Application of Modified and Reinforced Thermal Conducting Plastics in Lighting Products | Increase product functions, improve product performance, and develop new products | Completed | Realize sales and expand market share | |
| Research and Development of High-precision Long-distance Bidirectional Laser Ranging Products | Increase product functions, improve product performance, and develop new products | Completed | Realize sales and expand market share of smart products | |
| Development and Application of Power Lithium Battery Pack Based on BMS Integrated Control System in Electric Tools | Increase product functions, improve product performance, and develop new products | Under development | Truly meet the customer needs of professional tool DC products, and improve the expansion and sales of the entire DC product | |
| Research and Development of a Lase Ranging Module with Image | Increase product functions, improve product performance, and develop new products | Under development | Realize sales and expand market share of smart products |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Function | ||||
| Research and Development of Tool Cabinet with Drawer Slide-rail Fixed Structure | The assembly mode is still very tedious in the thread fixing operation part, and it is still very time-consuming in assembling or disassembling and repairing each slide rail, and it is well known that there is a lack of stable assembly structure between the two outer walls of the slide rail and the drawer, so that when the drawer places many heavy tools and is used for a long time, it is easy to cause the slide rail of the drawer to be loose and damaged. In order to overcome the above disadvantages, the tool cabinet with drawer slide rail fixed structure is developed. | 2021-10-30Already completed | The placement function of the tool cabinet is enhanced, the shelves are kept at a distance between each other and can be conveniently disassembled and assembled, and the frame and the rack also have the safety function of protecting the tool cabinet body from shock and collision. | Improve the core competitiveness and creativity of enterprises, improve product quality, reduce operating costs, and promote the sustainable and healthy development of enterprises. |
| Research and Development of a Assembled Drawer Cabinet | The existing assembled bucket cabinet has a single structure and is not convenient to assemble. At present, most assembled bucket cabinets only use the cooperation of insertion boards and slots to complete the assembly and disassembly of assembled bucket cabinets. Although the assembled bucket cabinet has the characteristics of easy disassembly and | 2021-08-25Already completed | The connection mode of the roof and bottom plate is through the slot insertion and bolt fastening, and the stability of the whole is improved. Finally, the supporting foot is installed at the connection between the side plate and the front and rear door frame, which strengthens the stability between the side plate and the front door frame and the back door frame. | Improve the core competitiveness and creativity of enterprises, improve product quality, reduce operating costs, and promote the sustainable and healthy development of enterprises. |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| convenient transportation, the structure of the assembled bucket cabinet assembled in this way is unstable and prone to deformation. In order to overcome the above disadvantages, the assembled tool cabinet is developed. | ||||
| Research and Development of Large-capacity Up-down Combined Tool Cabinet | "the cabinets of traditional tool cabinets are all single-body. The structure of the tool cabinet is single, and the objects that can be stored are relatively small and single because of the limitation of the accommodation space and structure of the tool cabinet. It is often necessary to purchase multiple tool cabinets with different specifications to meet the storage needs of a variety of objects, which leads to more purchase costs of storage equipment on the one hand and low utilization of storage space on the other. In order to make better use of storage space and meet the high-capacity requirements of consumers, large-capacity up-and-down tool cabinets are developed. " | 2021-12-31Already completed | The utility model not only greatly increases the accommodation space of the tool cabinet, but also improves the utilization rate of the storage space; for example, the utility model has the advantages of simple structure, reasonable design, large accommodation space, and can store a variety of tools and articles. The utilization rate of storage space is high, which greatly reduces the purchase cost of storage equipment for users. | Improve the core competitiveness and creativity of enterprises, improve product quality, reduce operating costs, and promote the sustainable and healthy development of enterprises. |
| Development of | Increase product | Mass Production | Increase output value | Expanded product line |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Key Technology of Multi-function Fingertip Gyroscope | functionality or improve performance | |||
| Research on Automatic Printing Technology of High Precision Linear Level | Increase labor productivity | Device not completed | Reduce labor | Automated production goes a step further |
| Study on the Key Technology of Mask Production | Increase labor productivity | Mass Production | Reduce labor | Automated production goes a step further |
| Research and Development of Key Technology of High Precision Level with High Cost Performance | Increase product functionality or improve performance | Product proofing successful | Increase output value | Expanded product line |
| Study on the Technology of High Performance Aluminum Welding L-Type Gauge | Reduce energy consumption or improve energy efficiency | Device not completed | Reduce production costs | Further innovation in production technology |
| Development of Key Technologies of Two-in-one Horizontal Ruler | Increase product functionality or improve performance | Product proofing successful | Increase output value | Expanded product line |
| Research on the Key Technology of Milling the Basic Surface of Level | Save raw materials | Mass Production | Ensure stable quality | Further innovation in production technology |
| Research and Development of Automatic Assembly Technology for End Cover of Linear Level | Develop new products | Mass Production | Increase output value | Automated production goes a step further |
| Research and Development of Automatic Assembly | Increase labor productivity | Device not completed | Reduce labor | Automated production goes a step further |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Technology for L-Square | ||||
| Research and Development of Automatic Assembly Technology for Angle Square | Increase product functionality or improve performance | Device not completed | Reduce labor and ensure stable quality | Automated production goes a step further |
| Vehicle-mounted Glass Lamp | Facing users, improve the convenience of product use; improve the technical requirements of enterprise products, and gradually transform to mid-end products | Completed | The company's sales in 2021 increased by about 10 million yuan | Enable the company's products to enter the professional field smoothly; improve profit margins |
| Dry Lithium Universal Induction Head Lamp | Facing users, improve the convenience of product use; improve the technical requirements of enterprise products, and gradually transform to mid-end products | Completed | The company's sales in 2021 increased by about 20 million yuan | Enable the company's products to enter the professional field smoothly; improve profit margins |
| Solar Rechargeable Hand Three-in-one Camping Light | Facing users, improve the convenience of product use; improve the technical requirements of enterprise products, and gradually transform to mid-end products | Completed | The company's sales in 2021 increased by about 20 million yuan | Enable the company's products to enter the professional field smoothly; improve profit margins |
| Outdoor High-protection Lase Rangefinder | The market urgently needs a high-protection rangefinder product that can withstand cruel environmental tests | Completed | Actively develop laser rangefinder products that can be used in outdoor environment, at the same time, on the basis of conventional rangefinder, integrate high-precision ranging algorithm, develop an outdoor laser rangefinder with high protection and high precision. | |
| Electronic Level Laser Line | The market urgently needs a laser line | Completed | A fast and stable electronic leveling laser line catcher has |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Projector | projector product that can not be affected by high-altitude floor wind | been developed. | ||
| Wall Body Detector | The market needs an efficient instrument that can detect different substances in the wall and their exact location | Completed | Actively develop the products of wall detector, realize the identification of steel bar, wire, water pipe and other materials from the design of internal signal processing, and develop a kind of wall detector for rapid detection. | |
| Easy Maintenance Laser Line Casting Instrument | The market urgently needs a laser line projector product that quickly cleans up stucco pollution | Completed | Actively develop the corresponding easy-to-clean products, start with the structure design and protection degree, realize the water flushing cleaning of the laser window, and develop a kind of easy-to-maintain laser line-up instrument. | |
| Study on File and Planing Tool | Development of new products and processes | Small trial | Achieve breakthrough changes in existing products and processes | Increase sales |
| Development of Semi-automatic Riveting Technology for Pipe Cutter Holder | Development of new products and processes | Middle trial | Achieve breakthrough changes in existing products and processes | Increase sales |
| Development of Automatic Loading and Unloading Process for Saw Grinding Based on Robot Technology | Development of new products and processes | Small trial | Achieve breakthrough changes in existing products and processes | Increase sales |
| Research on Single-side Grinding Process of Pipe Cutter Based on Five-axis CNC Machining Technology | Development of new products and processes | Small trial | Achieve breakthrough changes in existing products and processes | Increase sales |
| Research on the | Development of new | Small trial | Achieve breakthrough | Increase sales |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Pipe Wrench with the Opening Size Quickly Adjusted According to the Outside Diameter of Pipe | products and processes | changes in existing products and processes | ||
| Research and Development of CNC Precision Single-side Grinding Process for Trowel | Development of new products and processes | Small trial | Achieve breakthrough changes in existing products and processes | Increase sales |
| Research and Development of Multi-station Tooth Cutting Process with Manual Knives and Scissors | Development of new products and processes | Smalltrial | Achieve breakthrough changes in existing products and processes | Increase sales |
| D-curve Water Pump Pliers | Open up new markets | Already in production | It is expected that the warp style will be more used in Applicable pipe construction and will have a certain market share after its launch. | After successful development, it has stable market orders and brings good benefits to the enterprise |
| WORKPRO Adjustable Wrench with Smooth Handle | Open up new markets | Already in production | Live wrench is one of the necessary tools for equipment and infrastructure installation, which is widely used in the market, and the mid-range products meet the current market demand. | After successful development, it has stable market orders and brings good benefits to the enterprise |
| New Ratchet Nipper | Open up new markets | Trial production | This high-grade live wrench is one of the company's products sold to the professional-grade live wrench market. After successful development, it has a stable market order and brings good benefits for the enterprise. | After successful development, it has stable market orders and brings good benefits to the enterprise |
| ERBAO Large Open Spring Wrench | Open up new markets | Trial production | This high-grade live wrench is one of the company's products sold to the | After successful development, it has stable market orders and brings good benefits to the |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| professional-grade live wrench market. After successful development, it has a stable market order and brings good benefits for the enterprise. | enterprise | |||
| SK Premium Adjustable Wrench | Open up new markets | Trial production | This high-grade live wrench is one of the company's main live wrench products. After successful development, it has a stable market order and brings good benefits for the enterprise. | After successful development, it has stable market orders and brings good benefits to the enterprise |
| WOPKPRO Mid-range Light Handle Adjustable Wrench | Open up new markets | Trial production | This high-grade live wrench is one of the company's products sold to the professional-grade live wrench market. After successful development, it has a stable market order and brings good benefits for the enterprise. | After successful development, it has stable market orders and brings good benefits to the enterprise |
| Erbao Adjustable Wrench | Open up new markets | Process design | This high-grade live wrench is one of the company's products sold to the professional-grade live wrench market. After successful development, it has a stable market order and brings good benefits for the enterprise. | After successful development, it has stable market orders and brings good benefits to the enterprise |
| Research and Development of Professional Ratchet Wrench | It achieves a partial market share of ratchet wrenches. | Completed | Because the shape is different from the ordinary ratchet wrench, it has a certain advantage in the ordinary ratchet wrench market and occupies part of the market share of the ratchet wrench. | It achieves a partial market share of ratchet wrenches. |
| Development of Multi-functional Slip Joint Pliers | It solves the problems that the tooth shape of ordinary carp pliers is easy to slip and cut wire pliers. | Completed | The utility model solves the problems of common carp pliers, such as easy to slip and wire cutters, etc., and is suitable for use in the process | It enhances customer satisfaction and increases the product's share in the carp tongs market. |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| of shearing size specifications. | ||||
| Research and Development of Anti-skid Water Pump Pliers | It can quickly adjust between pipes of various sizes to improve work efficiency. | Completed | The utility model solves the problems of common water pump clamp tooth bite, such as easy to slip, tedious adjustment of clamp size and so on. This product can be quickly adjusted between tubes of all sizes to improve work efficiency. It increases the market share of products in water pump pliers. | It can quickly adjust between pipes of various sizes and improve work efficiency. It increases the market share of products in pump pliers. |
| Development of Multipurpose Wrench with Quick Reversing Direction | It solve the problems that a product on the general market can only use one specification of nuts. | Completed | Quick reversing multi-purpose wrench belongs to high-end ratchet wrench, which solves the problem that only one specification nut can be used for a product in the ordinary market. It reduces customers' unnecessary choices, increases the share of products in the high-end market, increases the added value of products, and improves the profits of enterprises. | It increases the share of products in the high-end market, increases the added value of products, and improves the profitability of enterprises. |
| Research and Development of Professional Wrench with Large Torque | It realizes the company's products entering the high-end market. | Completed | Due to the different shape, torque and conventional dual-use wrench, it has certain advantages in the professional market and high-end customers, to achieve the company's products into the high-end market, enhance the status of enterprises in the industry, and guide the development direction of products. | It realizes the company's products entering the high-end market, enhances the company's position among peers, and guides the development direction of products. |
| Development of anti-dislodging oil pipe wrench | Tightening of oil pipe joint bolts to achieve good performance and enhance business benefits | Completed | Anti-disengagement oil pipe wrench is applied to the tightening of oil pipe joint bolts to achieve good | It can quickly occupy the hand tool market and enhance the business efficiency. |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| performance. This product is produced by fewer domestic manufacturers, which can quickly occupy the hand tool market and enhance enterprise benefits. | ||||
| Development of ratchet 6 pawl energy-saving quick wrench | Quick reference to improvements in other products | In process | The 6-claw energy-saving quick wrench belongs to the high-end ratchet wrench, which has no such patented product in China and is in the leading position in China. Enhance the share of the product in the high-end market. This design can also be quickly quoted in other products for improvement. | Increase the share of the product in the high-end market. This design can also be quickly quoted to improve on other products. |
| Development of CNC embossing process | Solve labor shortage, stable quality control and improve production efficiency | In process | Solve the lack of labor, stable quality control and improve production efficiency. Realize semi-automatic production and provide a new development direction for the company's production process reform. | Realize semi-automatic production and provide a new development direction for the company's production process reform. |
| Development of automatic heat dissipation type laser level for construction works | Provide a kind of automatic heat dissipation laser level meter for construction project, using heat-conducting plate and heat dissipation fan to effectively dissipate heat to the body of laser level meter and ensure the working quality of laser level meter. | Already completed | 1. Effectively improve the heat dissipation efficiency and ensure the working quality of the laser level 2. Obtain 1-2 patents conversion 3. Improve company benefit | 1. Laying the foundation for later research and development; 2. Protecting our intellectual property; 3. Improving the company's production efficiency and economic efficiency |
| Development of tunnel laser surveyor projector | The problems solved include: most of the existing laser measuring instruments cannot achieve automatic leveling, and the | Already completed | 1. The measurement data is more accurate, and the cooling fan is set to cool the laser projector well and improve the service life of the laser projector; | 1. Laying the foundation for later research and development; 2. Protecting our intellectual property; 3. Improving the company's |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| measurement angle is also relatively single, and the equipment has to be moved after measuring a direction; when the laser projector works, it is easy to generate a lot of heat, and most of the existing equipment lacks a cooling device for the laser projector, which is very inconvenient to use. | 2. Obtain 1-2 patents conversion 3. Improve company benefit | production efficiency and economic efficiency | ||
| Development of sixteen-line electronic leveling laser level technology | The problems solved include: when using the existing level meter, it requires plane ≤ 3° to the environment, and secondly, the existing level meter needs staff to look at the level meter and site at the same time, which requires dual use, resulting low work efficiency. | Already completed | 1. Through the real person voice prompts, the whole operation is guided, recording without distraction, sensing sensitive, rapid adjustment and more intelligent and faster than the existing products; 2. Obtain 1-2 patents conversion; 3. Improve the production efficiency and economic benefits of the company | 1. Laying the foundation for later research and development; 2. Protecting our intellectual property; 3. Improving the company's production efficiency and economic efficiency |
| Development of laser distance leveling system based on BIM technology | Provide a laser distance measuring level system based on BIM technology to solve the technical problem of poor measurement accuracy caused by the inability to import measurement data into computer and the difficulty in controlling the measurement direction due to the use of tape measure or laser distance measuring instrument for measurement. | Already completed | 1.The unification of field line-out and BIM model is realized, improving the efficiency and accuracy; 2. Obtain 1-2 patents conversion; 3.Improve the production efficiency and economic benefits of the company | 1. Laying the foundation for later research and development; 2. Protecting our intellectual property; 3. Improving the company's production efficiency and economic efficiency |
| R&D of pipeline | Solve the technical | Already completed | 1. It has established a | 1. Laying the foundation for |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| quality inspection technology based on laser and industrial camera | problems of high energy consumption for long-distance steel pipe inspection, and it is difficult to ensure the synchronization of the first and last movements after long-term use; if part of the steel pipe is intercepted for measurement, it is a lossy inspection, the detection efficiency is limited and the cost is high. | complete technical system of pipe size measurement structure, measurement method, evaluation index and intelligent improvement. Evaluation indicators can use different applications and site adaptability enhancement, compact structure, cost reduction. 2. Obtain 1-2 patents conversion 3. Improve the production efficiency and economic benefits of the company | later research and development; 2. Protecting our intellectual property; 3. Improving the company's production efficiency and economic efficiency | |
| Development of laser level pendulum counterweight adjustment technology | "To provide a counterweight adjustment technology applied to the pendulum body of laser level meter, to solve the problem that the existing pendulum body of laser level meter does not have a center of gravity adjustment mechanism installed on it, and the measurement accuracy of the equipment is prone to deviation after adding additional parts to the pendulum body or using it for a long time." | Already completed | 1. Provides a technology that facilitates fine adjustment and can improve the accuracy of adjusting the center of gravity to prevent deviations in the measurement accuracy of equipment after installation of the motherboard or after a long period of use 2. Obtain 1-2 patents conversion 3. Improve company benefit | 1. Laying the foundation for later research and development; 2. Protecting our intellectual property; 3. Improving the company's production efficiency and economic efficiency |
| Development of a laser level with rapid positioning for body protection in the circumferential direction | To solve the technical problem that the existing laser level meter usually needs to be installed and positioned before use, and the traditional positioning device has a more complicated structure, and the operation steps in the positioning process are | In process | 1. Clamping both sides of the laser level body by rotation, to achieve rapid positioning of the laser level body, the protection device can protect the laser level body in the circumferential direction, to prevent people from colliding with the laser level body, affecting the accuracy; | 1. Laying the foundation for later research and development; 2. Protecting our intellectual property; 3. Improving the company's production efficiency and economic efficiency |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| more and more complicated. | 2. Obtain 1-2 patents conversion 3. Improve company benefit |
Company R&D personnel
| FY 2021 | FY 2020 | Change ratio | |
| Number of R&D personnel (people) | 978 | 701 | 39.51% |
| Number of R&D personnel as a percentage | 9.07% | 9.50% | -0.43% |
| Educational structure of R&D personnel | —— | —— | —— |
| Undergraduate | 361 | 283 | 27.56% |
| Master | 20 | 21 | -4.76% |
| Age composition of R&D staff | —— | —— | —— |
| Under 30 years old | 141 | 114 | 23.68% |
| 30~40 years old | 378 | 390 | -3.08% |
Company R&D investment
| FY 2021 | FY 2020 | Change ratio | |
| Amount of R&D investment (yuan) | 309,763,366.15 | 245,372,069.36 | 26.24% |
| R&D investment as a percentage of operating revenue | 2.84% | 2.87% | -0.03% |
| Amount of R&D investment capitalized (yuan) | 0.00 | 0.00 | |
| Capitalized R&D investment as a percentage of R&D investment | 0.00% | 0.00% |
Reasons for and effects of significant changes in the composition of the Company's R&D staff
□ Applicable √ Not Applicable
Reasons for the significant change in total R&D investment as a percentage of operating revenue compared to the previous year
□ Applicable √ Not Applicable
Reasons for the significant change in capitalization rate of R&D investment and its reasonableness
□ Applicable √ Not Applicable
5. Cash Flow
Unit: Yuan
| Items | FY 2021 | FY 2020 | Year-on-year increase or |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| decrease | |||
| Subtotal cash inflow from operating activities | 11,353,982,165.74 | 8,733,248,296.13 | 30.01% |
| Subtotal cash outflow from operating activities | 11,335,349,996.07 | 7,962,097,670.89 | 42.37% |
| Net cash flows from operating activities | 18,632,169.67 | 771,150,625.24 | -97.58% |
| Subtotal cash inflow from investing activities | 576,965,254.73 | 371,506,589.54 | 55.30% |
| Subtotal cash outflow from investing activities | 1,790,034,046.53 | 770,100,603.46 | 132.44% |
| Net cash flows from investing activities | -1,213,068,791.80 | -398,594,013.92 | 204.34% |
| Subtotal cash inflow from financing activities | 4,415,766,206.58 | 3,889,710,965.44 | 13.52% |
| Subtotal cash outflow from financing activities | 2,884,992,006.99 | 2,730,585,831.23 | 5.65% |
| Net cash flows from financing activities | 1,530,774,199.59 | 1,159,125,134.21 | 32.06% |
| Net increase in cash and cash equivalents | 270,923,023.10 | 1,602,805,770.74 | -83.10% |
Explanation of the main influencing factors for the significant year-on-year change in relevant data
√ Applicable □ Not Applicable
| Item | FY 2021 | FY 2020 | Year-on-year increase or decrease | Cause of Change |
| Net cash flows from operating activities | 18,632,169.67 | 771,150,625.24 | -97.58% | Mainly due to the increase in the scope of consolidation and the increase in stock preparation during the period |
| Net cash flows from investing activities | -1,213,068,791.80 | -398,594,013.92 | 204.34% | Mainly due to the investment payment for the acquisition of Keelong and BeA during the period. |
Net cash flows from financing activities
| Net cash flows from financing activities | 1,530,774,199.59 | 1,159,125,134.21 | 32.06% | Mainly due to the receipt of loans from Qiu Jianping and Wang Lingling during the period. |
Explanation of the reasons for the significant difference between the net cash flow from operating activities and the net profit of the
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
year during the reporting period
□ Applicable √ Not Applicable
V. Analysis of Non-main business
□ Applicable √ Not Applicable
VI. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: Yuan
| End of 2021 | Beginning of 2021 | Weight gain/loss | Description of significant changes | |||
| Amount | Percentage of total assets | Amount | Percentage of total assets | |||
| Monetary Funds | 4,033,707,240.16 | 23.31% | 3,750,506,068.39 | 27.42% | -4.11% | |
| Accounts Receivable | 1,798,265,505.53 | 10.39% | 1,260,096,723.75 | 9.21% | 1.18% | This is mainly due to the increase in the scope of consolidation in the current period. |
| Contract Assets | 0.00% | 0.00% | 0.00% | |||
| Inventory | 2,835,777,996.84 | 16.39% | 1,386,320,837.86 | 10.14% | 6.25% | This is mainly due to the increase in the scope of consolidation and the increase in stock preparation due to the growth of international e-commerce business, the epidemic and the increase in raw material prices during the period. |
| Investment properties | 127,058,966.69 | 0.73% | 0.00% | 0.73% | ||
| Long-term equity investments | 2,353,942,699.80 | 13.60% | 2,207,878,459.67 | 16.14% | -2.54% | |
| Fixed Assets | 1,494,547,487.29 | 8.64% | 1,348,034,595.31 | 9.86% | -1.22% | |
| Construction in progress | 113,750,851.49 | 0.66% | 166,268,204.96 | 1.22% | -0.56% | |
| Right-of-use assets | 411,722,761.66 | 2.38% | 393,054,180.95 | 2.87% | -0.49% | |
| Short-term borrowings | 1,806,901,201.39 | 10.44% | 1,015,117,910.75 | 7.42% | 3.02% | This is mainly due to the new trade financing (U.S. dollar), which has a greater advantage of U.S. dollar |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| interest rate compared with RMB interest rate and can effectively hedge the company's exchange rate risk. | ||||||
| Contractual Liabilities | 91,235,951.19 | 0.53% | 72,490,372.55 | 0.53% | 0.00% | |
| Long-term borrowings | 1,015,445,732.07 | 5.87% | 509,555,882.91 | 3.73% | 2.14% | This is mainly due to the new merger and acquisition loans in the current period. |
| Lease obligations | 289,196,511.02 | 1.67% | 337,599,418.27 | 2.47% | -0.80% |
High percentage of foreign assets
√ Applicable □ Not Applicable
| Asset specifics | Reasons for formation | Asset Size | Location | Operating Model | Control measures to safeguard the security of assets | Earnings | Foreign assets as a percentage of the company's net assets | Whether there is a significant risk of impairment |
| Lista Holding AG 100% shareholding | Equity acquisition | 231.5341million | Switzerland | Independent accounting | Financial monitoring, commissioning external audit | Profitable | 2.14% | No |
| Arrow Fastener Co.,LLC 100% shareholding | Equity acquisition | 369.4661 million | United States | Independent accounting | Financial monitoring, commissioning external audit | Profitable | 3.42% | No |
2. Assets and liabilities measured at fair value
√ Applicable □ Not Applicable
Unit: Yuan
| Item | Opening balance | Gains or losses on changes in fair value for the period | Accumulated fair value changes included in equity | Impairment charged during the period | Purchase amount for the period | Amount sold during the period | Other changes | Closing balance |
| Financial Assets | ||||||||
| 1. Financial | 27,191,411.52 | 27,022,757.5 | ||||||
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| assets held for trading (excluding derivative financial assets) | 0 | |||||||
| 2. Derivative financial assets | 36,027,480.86 | -31,447,528.93 | 4,330,070.00 | |||||
| 3. Other debt investments | 532,386.17 | 8,814,958.09 | 9,227,687.75 | |||||
| Subtotal financial assets | 63,751,278.55 | -22,632,570.84 | 27,022,757.50 | 13,557,757.75 | ||||
| Total of the above | 63,751,278.55 | -22,632,570.84 | 27,022,757.50 | 13,557,757.75 | ||||
| Financial liabilities | 0.00 | -978,031.91 | 978,031.91 |
Other changesWhether there were any significant changes in the measurement attributes of the Company's major assets during the reporting period
□ Yes √ No
3. Restricted rights of assets as of the end of the reporting period
| Item | Carrying value at the end of the period | Restricted Reasons |
| Monetary Funds | 27,725,700.00 | Bank Acceptance Deposit |
Monetary Funds
| Monetary Funds | 2,295,252.00 | Margin for forward exchange settlement |
| Monetary Funds | 1,975,140.00 | Customs deposit |
| Monetary Funds | 492,906.98 | Project performance bond |
Monetary Funds
| Monetary Funds | 32,000.00 | ETC margin |
| Fixed Assets | 29,720,650.63 | For the opening of bankers' acceptances |
| Fixed Assets | 10,873,242.70 | Used as collateral for bank loans |
Intangible assets
| Intangible assets | 2,110,603.58 | For the opening of bankers' acceptances |
| Intangible assets | 1,483,459.51 | Used as collateral for bank loans |
100.00% equity interest in
Arrow Fastener Co., LLC[Note]
| 100.00% equity interest in Arrow Fastener Co., LLC [Note] | 388,146,927.39 | Pledge for bank loan |
| 100.00% equity interest in Geelong Orchid Holding Limited [Note] | 205,959,077.97 | Pledge for bank loan |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Total | 670,814,960.76 |
[Note] 100.00% equity interest in Arrow Fastener Co., LLC is the net assets of Arrow Fastener Co., LLC at the end ofthe reporting period；100.00% equity interest in Geelong Orchid Holding Limited is the net assets of Geelong OrchidHolding Limited at the end of the reporting period.VII. Analysis of Investment Status
1. Overall situation
√ Applicable □ Not Applicable
| Amount invested in the reporting period (yuan) | Investment amount in the same period of the previous year (yuan) | Change range |
| 1,123,031,335.02 | 540,855,823.95 | 107.64% |
2. Significant equity investments acquired during the reporting period
√ Applicable □ Not Applicable
Unit: Yuan
| Name of investee company | Main business | Investment Method | Investment amount | Shareholding ratio | Funding Sources | Partners | Investment Term | Product Type | Progress as of the balance sheet date | Expected revenue | Profit and loss on investments for the period | Whether it is involved in a lawsuit | Date of disclosure (if any) | Disclosure Index (if any) |
| BeA | Professional Fastener Tools | Acquisitions | 243,418,722.10 | 100.00% | Own funds | None | Permanent | Long-term equity investments | Already completed acquisition | 1,397,1 00.57 | 1,397,1 00.57 | No | June 03, 2021 | Announcement number: 2021-057 |
| Geelong | Toolbox cabinet | Acquisitions | 794,236,994.50 | 100.00% | Raise $13,494,200,000, the remaining part is own funds | None | Permanent | Long-term equity investments | Already completed acquisition | -19,877,804.61 | -19,877,804.61 | No | July 03, 2021 | Announcement number: 2021-068 |
| Total | -- | -- | 1,037,655,716.60 | -- | -- | -- | -- | -- | -- | -18,480 ,704.04 | -18,480 ,704.04 | -- | -- | -- |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
3. Significant non-equity investments in progress during the reporting period
□ Applicable √ Not Applicable
4. Investment in financial assets
(1) Portfolio investments
√ Applicable □ Not Applicable
Unit: Yuan
| Variety of securities | Stock Code | Stock short name | Initial investment cost | Accounting measurement model | Opening book value | Gains or losses on changes in fair value for the period | Accumulated fair value changes included in equity | Purchase amount for the period | Amount sold during the period | Profit or loss for the reporting period | Carrying value at the end of the period | Accounting accounts | Funding sources |
| Bonds | Isin:USY9896RAB79 | ZOOMLIOM | 39,592,347.31 | Fair value measurement | 20,494,906.65 | 20,312,601.90 | 599,191.32 | 0.00 | Financial assets held for trading | Own funds | |||
| Bonds | Isin:XS1839368831 | NEW METRO | 13,937,100.21 | Fair value measurement | 6,696,504.87 | 6,710,155.60 | 193,580.36 | 0.00 | Financial assets held for trading | Own funds | |||
| Total | 53,529,447.52 | -- | 27,191,411.52 | 0.00 | 0.00 | 0.00 | 27,022,757.50 | 792,771.68 | 0.00 | -- | -- | ||
| Date of disclosure of announcement of shareholders' meeting for approval of securities investment | |||||||||||||
| Date of disclosure of announcement of shareholders' meeting for approval of securities investment (if any) | |||||||||||||
(2) Investment in derivatives
√ Applicable □ Not Applicable
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Unit:10,000 yuan
| Name of derivative investment operator | Affiliations | Whether related transactions | Types of Derivatives Investments | Initial investment amount of derivative investment | Start Date | End date | Opening investment amount | Amount purchased during the reporting period | Amount sold during the reporting period | Amount of provision for impairment (if any) | End of period investment amount | Investment amount at the end of the period as a percentage of the Company's net assets at the end of the reporting period | Actual amount of gain or loss for the reporting period |
| Banks | None | No | Forward foreign exchange | 8,425.2 | February 21, 2020 | February 25, 2021 | 1,304.98 | 1,304.98 | 0.00% | 174.82 | |||
| Banks | None | No | Forward foreign exchange | 12,836.88 | May 04, 2020 | May 07, 2021 | 6,524.9 | 6,524.9 | 0.00% | 684.45 | |||
| Banks | None | No | Forward foreign exchange | 10,896.16 | September 24, 2020 | September 28, 2021 | 10,439.84 | 10,439.84 | 0.00% | 618.32 | |||
| Banks | None | No | Forward foreign exchange | 3,405.05 | September 09, 2020 | September 10, 2021 | 3,262.45 | 3,262.45 | 0.00% | 268.66 | |||
| Banks | None | No | Forward foreign exchange | 13,620.2 | September 25, 2020 | September 29th, 2021 | 13,049.8 | 13,049.8 | 0.00% | ||||
| Banks | None | No | Forward foreign exchange | 3,285.65 | March 08, 2021 | March 10, 2022 | 3,285.65 | 3,187.85 | 0.29% | ||||
| Banks | None | No | Forward foreign exchange | 3,285.65 | March 26, 2021 | July 23rd, 2021 | 3,285.65 | 3,285.65 | 0.00% | 70.39 | |||
| Banks | None | No | Forward foreign | 3,285.65 | March 29th, | July 28th, | 3,285.65 | 3,285.65 | 0.00% | 75.88 |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| exchange | 2021 | 2021 | |||||||||||
| Banks | None | No | Forward foreign exchange | 22,610.35 | June 17, 2021 | December 31, 2021 | 22,610.35 | 22,610.35 | 0.00% | 147.21 | |||
| Banks | None | No | Forward foreign exchange | 6,460.2 | July 28th, 2021 | October 29, 2021 | 6,460.2 | 6,460.2 | 0.00% | 82.21 | |||
| Banks | None | No | Forward foreign exchange | 33,724.08 | September 24, 2021 | November 03, 2021 | 33,724.08 | 33,724.08 | 0.00% | -307.53 | |||
| Banks | None | No | Swaps | 100.04 | September 28, 2021 | September 28, 2021 | 100.04 | 100.04 | 0.00% | 99.56 | |||
| Banks | None | No | Swaps | 91.5 | October 11, 2021 | October 11, 2021 | 91.5 | 91.5 | 0.00% | 91.06 | |||
| Banks | None | No | Swaps | 1,216 | October 11, 2021 | October 11, 2021 | 1,216 | 1,216 | 0.00% | 1,210.19 | |||
| Banks | None | No | Swaps | 169.4 | October 20, 2021 | October 20, 2021 | 169.4 | 169.4 | 0.00% | 168.59 | |||
| Banks | None | No | Swaps | 3,195 | October 25, 2021 | October 25, 2021 | 3,195 | 3,195 | 0.00% | 53.74 | |||
| Banks | None | No | Swaps | 6,390 | October 25, 2021 | October 25, 2021 | 6,390 | 6,390 | 0.00% | 81.61 | |||
| Banks | None | No | Swaps | 12,760 | October 27, 2021 | October 27, 2021 | 12,760 | 12,760 | 0.00% | 183.12 | |||
| Banks | None | No | Forward foreign exchange | 6,810.1 | September 18, 2020 | December 31, 2021 | 6,524.9 | 6,524.9 | 0.00% | 457.21 | |||
| Banks | None | No | Forward foreign exchange | 13,620.2 | September 21, 2020 | December 31, 2021 | 13,049.8 | 13,049.8 | 0.00% | 951.56 | |||
| Banks | None | No | Forward foreign exchange | 13,620.2 | September 23, 2020 | December 31, 2021 | 13,049.8 | 13,049.8 | 0.00% | 989.48 | |||
| Banks | None | No | Forward foreign exchange | 13,142.6 | January 13, 2021 | December 31, 2021 | 13,142.6 | 13,142.6 | 0.00% | 757.12 | |||
| Banks | None | No | Forward foreign exchange | 6,571.3 | January 14, 2021 | December 31, 2021 | 6,571.3 | 6,571.3 | 0.00% | 443.24 |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Banks | None | No | Forward foreign exchange | 6,571.3 | January 16, 2021 | December 31, 2021 | 6,571.3 | 6,571.3 | 0.00% | 425.25 | |||
| Banks | None | No | Forward foreign exchange | 6,571.3 | January 23rd, 2021 | December 31, 2021 | 6,571.3 | 6,571.3 | 0.00% | 394.02 | |||
| Banks | None | No | Forward foreign exchange | 6,571.3 | January 26, 2021 | December 31, 2021 | 6,571.3 | 6,571.3 | 0.00% | 378.18 | |||
| Banks | None | No | Forward foreign exchange | 6,571.3 | January 27, 2021 | December 31, 2021 | 6,571.3 | 6,571.3 | 0.00% | 386.47 | |||
| Banks | None | No | Forward foreign exchange | 6,571.3 | January 28, 2021 | December 31, 2021 | 6,571.3 | 6,571.3 | 0.00% | 440.11 | |||
| Banks | None | No | Forward foreign exchange | 6,571.3 | January 30, 2021 | November 15, 2021 | 6,571.3 | 6,571.3 | 0.00% | 368.29 | |||
| Banks | None | No | Forward foreign exchange | 3,285.65 | January 30, 2021 | December 07, 2021 | 3,285.65 | 3,285.65 | 0.00% | 150.8 | |||
| Banks | None | No | Forward foreign exchange | 3,285.65 | February 09, 2021 | December 13, 2021 | 3,285.65 | 3,285.65 | 0.00% | 155.85 | |||
| Banks | None | No | Forward foreign exchange | 3,285.65 | February 11, 2021 | December 07, 2021 | 3,285.65 | 3,285.65 | 0.00% | 154.3 | |||
| Banks | None | No | Forward foreign exchange | 6,571.3 | February 14, 2021 | December 07, 2021 | 6,571.3 | 6,571.3 | 0.00% | 307.6 | |||
| Banks | None | No | Forward foreign exchange | 6,571.3 | January 01, 2021 | December 21, 2021 | 6,571.3 | 6,571.3 | 0.00% | 302.9 | |||
| Banks | None | No | Forward foreign exchange | 6,571.3 | January 01, 2021 | December 21, 2021 | 6,571.3 | 6,571.3 | 0.00% | 299.1 | |||
| Banks | None | No | Forward foreign exchange | 19,713.9 | February 25, 2021 | March 10, 2021 | 19,713.9 | 19,713.9 | 0.00% | 87.6 | |||
| Banks | None | No | Forward | 12,909.2 | June 21, | Decemb | 12,909.2 | 5,258.36 | 7,650.84 | 0.71% | 236.7 |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| foreign exchange | 2021 | er 31, 2021 | 6 | ||||||||||
| Banks | None | No | Forward foreign exchange | 6,474.4 | June 25, 2021 | December 31, 2021 | 6,474.4 | 2,011.41 | 4,462.99 | 0.41% | 108.43 | ||
| Banks | None | No | Forward foreign exchange | 7,077.18 | August 15, 2021 | Aug. 18, 2021 | 7,077.18 | 7,077.18 | 0.00% | 21.67 | |||
| Banks | None | No | Forward foreign exchange | 6,421.38 | October 31, 2021 | November 01, 2021 | 6,421.38 | 6,421.38 | 0.00% | 6.33 | |||
| Banks | None | No | Options | February 09, 2021 | February 23rd, 2021 | 0.00% | 17.1 | ||||||
| Banks | None | No | Options | March 01, 2021 | March 10, 2021 | 0.00% | 9.28 | ||||||
| Banks | None | No | Forward foreign exchange | 3,605.69 | January 01, 2021 | July 22nd, 2021 | 3,605.69 | 3,605.69 | 0.00% | 65.64 | |||
| Banks | None | No | Forward foreign exchange | 5,572.43 | January 01, 2021 | July 28th, 2021 | 5,572.43 | 5,572.43 | 0.00% | 121.99 | |||
| Banks | None | No | Forward foreign exchange | 7,106.22 | July 22nd, 2021 | December 21, 2021 | 7,106.22 | 7,106.22 | 0.00% | 42.51 | |||
| Banks | None | No | Forward foreign exchange | 3,230.1 | July 22nd, 2021 | December 28, 2021 | 3,230.1 | 3,230.1 | 0.00% | 17.84 | |||
| Total | 340,630.56 | -- | -- | 67,206.47 | 257,396.57 | 309,203.56 | 15,301.68 | 1.41% | 11,798.91 | ||||
| Derivatives Investment Funding Sources | Own funds | ||||||||||||
| Involvement in lawsuits (e.g. Applicable) | Not Applicable | ||||||||||||
| Date of disclosure of board of directors' announcement for approval of derivative investments (if any) | April 15, 2021 | ||||||||||||
| Date of disclosure of announcement of shareholders' meeting for approval of derivative investment (if any) | |||||||||||||
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Risk analysis of derivative positionsand description of control measuresfor the reporting period (including butnot limited to market risk, liquidityrisk, credit risk, operational risk, legalrisk, etc.)
To prevent exchange rate risk, the Company and its subsidiaries conduct derivative business.The Company and its subsidiaries strictly implement the Foreign Exchange HedgingBusiness Management System.
| Changes in market prices or product fair values of invested derivatives during the reporting period, and the analysis of the fair value of derivatives should disclose the specific methods used and the setting of relevant assumptions and parameters | The fair value floating gain on invested derivatives at the beginning of the reporting period was RMB31,510,700 and the fair value floating gain on derivatives at the end of the reporting period was RMB-31,447,500. |
| Explanation of whether the accounting policy and specific principles of accounting for derivatives of the company in the reporting period have changed significantly compared with the previous reporting period | No change |
| Special opinion of independent directors on the company's derivative investment and risk control | It is necessary for the Company to carry out foreign exchange derivative transactions in line with the actual operation needs of the Company, which can reduce the impact of exchange rate fluctuations on the Company's profit to a certain extent. The Company has established the “Foreign Exchange Derivatives Trading Business Management System” and effective risk control measures in accordance with the requirements of relevant laws and regulations. We agree with the Company's proposal to carry out foreign exchange derivative transactions for the year 2021. |
5. Use of proceeds
√ Applicable □ Not Applicable
(1) Overall use of proceeds
√ Applicable □ Not Applicable
Unit:10,000 yuan
| Year of raising | Method of raising | Total Funds Raised | Total amount of proceeds used during the period | Total accumulated use of proceeds | Total amount of funds raised during the reporting | Total cumulative change in use of proceeds | Proportion of the total amount of proceeds from the cumulative | Total unused proceeds | Use and destination of unused proceeds | Amount of funds raised that have been idle for more than |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| period that changed use | change of use | two years | ||||||||
| 2020年 | Issuance of convertible bonds | 97,260 | 13,910.15 | 53,730.92 | 13,494.42 | 13,494.42 | 13.87% | 44,986.46 | Deposited in the special account for fund raising | 0 |
| Total | -- | 97,260 | 13,910.15 | 53,730.92 | 13,494.42 | 13,494.42 | 13.87% | 44,986.46 | -- | 0 |
| Description of the overall use of proceeds | ||||||||||
| Approved by the China Securities Regulatory Commission under license No. 2656 [2019] and agreed by the Shenzhen Stock Exchange, the Company is permitted to issue convertible bonds in public not exceeding RMB 972,600,000.00. The lead underwriter CITIC Construction Investment Securities Co., Ltd. will adopt the preferential placement to the original shareholders of the Company, and the balance after the preferential placement by the original shareholders (including the part of the original shareholders' waiver of the preferential placement) will be issued to public investors through online, and the part of the issue subscription amount less than RMB972,600,000.00 will be underwritten by the lead underwriter. The actual public offering of 9,726,000 convertible bonds with par value of RMB100.00 each, raising a total of RMB972,600,000.00, after deducting underwriting and sponsorship expenses of RMB5,188,679.25 (excluding tax), amounted to RMB967,411,320.75, which has been remitted to the Company's custody account of the proceeds by the lead underwriter, CITIC Capital Securities Co., Ltd. After deducting the underwriting and sponsorship fees, audit and capital verification fees, attorney's fees, credit rating fees, information disclosure fees for the issue, lottery fees and bond issue registration fees and other external expenses directly related to the issue of convertible bonds of RMB2,289,867.92, the net proceeds raised by the Company amounted to RMB965,121,452.83. The above-mentioned availability of proceeds was verified by Tianjian Certified Public Accountants (Special Ordinary Partnership), which issued the Verification Report (Pan-China Verification [2020] No. 244). As of December 31, 2021, the Company has invested a total of RMB 537,309,200 in the fund-raising funds, with net interest income of RMB18,123,500 and foreign exchange gain/loss of RMB-1,900,400 on the fund-raising funds in fiscal year 2021, and the balance of the fund-raising account was RMB449,864,600 as of December 31, 2021. | ||||||||||
(2) Commitment of fund-raising projects
√ Applicable □ Not Applicable
Unit:10,000 yuan
| Commitment of investment projects and investment of excess funds | Whether the project has been changed (including partial change) | Total committed investment of proceeds | Adjusted total investment(1) | Amount of input in the current reporting period | Cumulative input amount as of the end of the period(2) | Investment progress as of the end of the period (3) = (2)/(1) | Date the project reaches its intended useable state | Benefits realized in the current reporting period | Whether projected benefits are met | Whether there is a significant change in project feasibility |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Committed Investment Projects | ||||||||||
| 1. Laser measuring instrument and smart home production base construction project | No | 20,426 | 20,426 | 5,472.45 | 8,594.2 | 42.07% | December 31, 2022 | Not Applicable | No | |
| 2. Toolbox cabinet production base construction project | Yes | 26,776 | 13,281.58 | 2,556.91 | 13,281.58 | 100.00% | Not Applicable | Yes | ||
| 3. Intelligent storage and logistics base construction project | No | 22,542.15 | 22,542.15 | 495.84 | 7,470.19 | 33.14% | December 31, 2022 | Not Applicable | No | |
| 4. R&D center construction project | No | 7,768 | 7,768 | 12.36 | 12.36 | 0.16% | December 31, 2022 | Not Applicable | No | |
| 5. Supplemental working capital | No | 19,000 | 19,000 | 19,000 | 100.00% | Not Applicable | No | |||
6.Capital increase in
subsidiary andacquisition of 100%equity interest inGeelong HoldingsLimited held throughGeelong OrchidHoldings Ltd
| No | 13,494.42 | 5,372.59 | 5,372.59 | 39.81% | July 02, 2021 | -1,987.78 | Not Applicable | No | ||
| Subtotal of committed investment projects | -- | 96,512.15 | 96,512.15 | 13,910.15 | 53,730.92 | -- | -- | -1,987.78 | -- | -- |
| Investment of overraised funds | ||||||||||
| Not Applicable | ||||||||||
| Total | -- | 96,512.15 | 96,512.15 | 13,910.15 | 53,730.92 | -- | -- | -1,987.78 | -- | -- |
| Failure to meet planned progress or projected earnings and reasons (by specific project) | I. The reasons why the company's fund-raising investment projects did not reach the planned schedule are as follows: 1. The main body of the laser measuring instrument and smart home production base construction project is the wholly-owned secondary subsidiary Haining GreatStar Intelligent Equipment Co. Ltd. and the wholly-owned subsidiary Vietnam GreatStar Intelligence Co., Ltd. The implementation site is located in Lianhang Economic and Technological Development Zone, Haining City, Zhejiang Province and Nam Cameo Industrial Zone, Shuiyuan County, Hai Phong City, Vietnam, with the original construction period of two years and planned to be completed by the end of December 2020. The company added a new implementation subject Vietnam GreatStar Intelligence Co., Ltd. in the process of project implementation, which, together with the sudden outbreak of the COVID-19, had a certain impact on the company's project construction progress and delayed the completion time of the project.The Company intends to add | |||||||||
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Hangzhou GreatStar Tools Co., Ltd, a wholly-owned subsidiary, as one of the implementation subjects of the Project, add the plot No. 26 of Hangzheng Gongzhuo (2020) in Jianggan District, Hangzhou, as one of the implementation sites of the Project, and simultaneously adjust the investment structure of the Project and extend the implementation period to December 31, 2022. 2. The main body of the implementation of the intelligent storage and logistics base construction project is a wholly-owned subsidiary, Haining GreatStar Intelligent Equipment Co., Ltd., which is located in Lianhang Economic and Technological Development Zone, Haining City, Zhejiang Province, with the original construction period of two years and planned to be completed by the end of December 2020. Due to the impact of the COVID-19, the project has been affected to varying degrees in the process of infrastructure construction, logistics and transportation, equipment installation and commissioning, resulting in a delay in the project implementation schedule compared to the plan. In order to ensure the smooth implementation of the project, considering the development plan of the company and the actual construction situation of the project, the company intends to extend the implementation period of the project to December 31, 2022 under the condition that the main body of the project, total investment and construction scale of the project remains unchanged. 3. The main body of the R&D center construction project is the wholly-owned subsidiary Hangzhou United Machinery Co., Ltd, which is located at the northwest corner of the intersection of Hongpu Road and Jiuheng Road, Jiubao Street, Jianggan District, Hangzhou.The original construction period of the project was 3 years, and the procurement, installation and commissioning of the equipment were planned to be completed by December 31, 2020, and the recruitment and training of personnel were completed by the end of 2021. In early 2020, the sudden outbreak of the COVID-19 had a certain impact on the construction schedule of the project, resulting in a delay in the implementation schedule of the project compared to the original plan. In order to better integrate the company's existing innovative research and development resources and better support the development of the company's own brand and cross-border e-commerce business, the company intends to change the implementation subject of the project to Hangzhou GreatStar Technology Co., Ltd. and adjusts the investment structure, and extends the implementation period to December 31, 2022. II. The proceeds used for the toolbox cabinet production base construction project have been invested in the construction of the toolbox cabinet production base of Haining GreatStar Intelligent Equipment Co., Ltd. and Thailand New Earth Co.,Ltd(renamed as Geelong (Thailand) Co .,Ltd), which has not yet generated benefits as of the end of the period. | |
| Description of significant changes in project feasibility | The sudden outbreak of the COVID-19 has a certain impact on the construction progress of the company's toolbox cabinet production base construction project, which has delayed the completion time node of the original investment project. According to the company's long-term strategic planning and current development needs, in order to improve the efficiency of the use of funds raised, to enhance the company's existing production capacity and supply capacity more quickly, and to better meet customer demand, the company's seventh board meeting of the fifth session and the 2020 annual general meeting of shareholders considered and approved that the Company used the proceeds from the toolbox cabinet production base construction project of RMB 134,944,200 that had not been invested as of April 5, 2021 for the acquisition of 100% equity interest in Geelong Holdings Limited held through Geelong Orchid Holdings Ltd, and the original toolbox cabinet production base construction project was terminated. In order to facilitate the smooth implementation of the equity acquisition and reduce transaction costs, the Company held the tenth session of the fifth board of directors meeting on June 21, 2021, and considered and passed the "Proposal to Change the Implementation Subject of Part of the Fund Raising Project", agreeing that the Company |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| changes the implementation subject of the equity acquisition project, and the implementation subject was changed from the Company to Hong Kong GreatStar International Limited, a wholly-owned subsidiary of the Company. | |
| Amount, purpose and progress of use of over-issued funds | Not Applicable |
| Change of location for the implementation of the fund-raising investment project | Applicable |
| During the reporting period | |
| On July 22, 2020, the Company held the thirty-seventh meeting of the fourth session of the Board of Directors to consider and approve the "Resolution on Increasing the Implementation Subject and Location of Part of the Fund Raising Project and Using Part of the Fund Raising to Increase the Capital of a Wholly-Owned Subsidiary": 1. Agree to add a wholly-owned subsidiary, Vietnam GreatStar Intelligence Co., Ltd. as one of the project implementation subjects for the laser measuring instrument and smart home production base construction project, and add Nam Cambridge Industrial Zone, Shuiyuan County, Hai Phong City, Vietnam as one of the project implementation sites;2. Agree to add wholly-owned subsidiary Thailand New Earth Co., Ltd.(renamed as Geelong (Thailand) Co .,Ltd) as one of the project implementation subjects for the tool box cabinet production base construction project and add No. 54/5, Mayangpong Township 1, Baudan District, Rayong Province, Thailand as one of the project implementation sites. On April 14, 2021, the Company held the eighth meeting of the fifth session of the Board of Directors to consider and approve the "Resolution on Changing the Implementation Subject and Location of the Project, Adjusting the Investment Structure of the Project and Extending the Implementation Period": 1. Agree to add Hangzhou GreatStar Tools Co., Ltd, a wholly-owned subsidiary, as one of the implementation subjects of the Project, add the plot No. 26 of Hangzheng Gongzhuo (2020) in Jianggan District, Hangzhou, as one of the implementation sites of the Project;2. Agree that the implementation subject of R&D center construction project changed to Hangzhou GreatStar Technology Co.,Ltd. On June 21, 2021, the Company held the tenth meeting of the fifth session of the Board of Directors and considered and passed the "Resolution to Change the Implementation Subject of Part of the Fund Raising Project", agreeing that the implementation subject of the Company's acquisition of 100% equity interest in Geelong Holdings Limited held through Geelong Orchid Holdings Ltd be changed from the Company to Hong Kong GreatStar International Limited, a wholly-owned subsidiary of the Company. | |
| Adjustment of the implementation mode of the fund-raising investment projects | Not Applicable |
| Prior investment and replacement of funds raised for investment projects | Applicable |
| On July 22, 2020, the Company held the 37th meeting of the 4th Session of the Board of Directors and considered and passed the " Resolution on the Replacement of Self-financing Funds Pre-invested in the Fund Raising Project with the Fund Raising Funds". 1. Agreed that the Company shall replace the self-financing funds pre-invested in the fund-raising project with the fund-raising funds of RMB 148,254,900. 2. Agreed that the issue expenses paid by the Company with its own funds are RMB 1,723,800, which will |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| be replaced with the proceeds. | |
| Temporary replenishment of working capital with idle proceeds | Not Applicable |
| Amount and reasons for the balance of proceeds from project implementation | Not Applicable |
| The use and purpose of unused proceeds | As of the end of the period, the unused fundraising funds amounted to RMB 449,864,600 (including the accumulated interest received from bank deposits net of bank charges of RMB 24,387,300), which were deposited in the special fundraising account. |
| Problems or other circumstances in the use and disclosure of proceeds | Not Applicable |
(3) Change of fund-raising projects
√ Applicable □ Not Applicable
Unit: 10,000 Yuan
| Changed items | Corresponding original commitment items | Total amount of proceeds to be invested in the project after the change(1) | Actual amount invested in this reporting period | Actual cumulative amount invested as of the end of the period(2) | Investment progress as of the end of the period(3)=(2)/(1) | Date the project reaches its intended useable state | Benefits achieved during this reporting period | Whether the expected benefits are achieved | Whether there is a significant change in the feasibility of the project after the change |
| Capital increase in subsidiary and acquisition of 100% equity interest in Geelong Holdings Limited held through | Toolbox cabinet production base construction project | 13,494.42 | 5,372.59 | 5,372.59 | 39.81% | July 02,2021 | -1,987.78 | Not Applicable | No |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Geelong Orchid Holdings Ltd | |||||||||
| Total | -- | 13,494.42 | 5,372.59 | 5,372.59 | -- | -- | -1,987.78 | -- | -- |
| Description of reasons for changes, decision-making procedures and information disclosure (by specific project) | 1. The sudden outbreak of COVID-19 had a certain impact on the construction progress of the company's toolbox cabinet production base construction project, which delayed the completion time node of the original investment project.According to the company's long-term strategic planning and the current stage of development needs, in order to improve the efficiency of the use of the funds raised, more quickly enhance the company's existing production capacity and supply capacity, to better meet customer demand, as approved by the seventh meeting of the fifth session of the board of directors and the 2020 annual general meeting of the Company, the Company used the proceeds of RMB 134,944,200 from the toolbox cabinet production base construction project that had not been invested as of April 5, 2021 to acquire 100% equity interest in Geelong Holdings Limited held through Geelong Orchid Holdings Ltd., and the original toolbox cabinet production base construction project was terminated. In order to promote the smooth implementation of the acquisition of equity and reduce transaction costs, the Company held the tenth meeting of the fifth session of the Board of Directors on 21 June 2021 and considered and passed the " Resolution on Changing the Implementation Subject of Part of the Fund Raising Project", agreeing to change the Company's acquisition. 2. The actual benefit of Geelong Orchid Holdings Ltd for the year 2021 is the net profit achieved by Geelong Orchid Holdings Ltd from July 2, 2021, the date of purchase to December 31, 2021. Due to the recurrence of the COVID-19 and the surge in the prices of upstream steel and other bulk materials, Geelong Orchid Holdings Ltd's shipping costs and prices of main materials have increased significantly, resulting in a decrease in gross profit margin and negative net profit in the second half of 2021. 3. According to the equity acquisition agreement, the acquisition transaction amounted to RMB 128,245,000, and the funds required for this transaction were self-financed by the Company, of which RMB 134,944,200 was used from the proceeds. The transaction price was paid in cash by Hong Kong GreatStar International Limited in stages. As of the date of this report, the Company has completed the payment of the equity transfer in accordance with the agreement, and the investment progress of this project has reached 100%. | ||||||||
| Failure to meet planned progress or projected benefits and reasons (by specific project) | Not Applicable | ||||||||
| Description of significant changes in the feasibility of the changed project | Not Applicable | ||||||||
VIII. Significant Asset and Equity Sales
1. Sale of Significant Assets
□ Applicable √ Not Applicable
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
The Company did not sell any significant assets during the reporting period.
2. Sale of Significant Equity Interests
□ Applicable √ Not Applicable
IX. Analysis of Major Holding Companies and Joint Stock Companies
√ Applicable □ Not Applicable
Major subsidiaries and joint stock companies with an impact of 10% or more on the Company’s net profitUnit: CNY
| Company Name | Company Type | Main Business | Registered Capital | Total Assets | Net Assets | Operating Income | Operating Profit | Net Profit |
| Arrow | Subsidiaries | Manufacturing | -- | 549,984,017.41 | 369,466,126.39 | 664,664,008.95 | 67,783,125.83 | 50,062,384.74 |
| GreatStar Europe AG | Subsidiaries | Manufacturing | -- | 2,493,817,617.75 | 392,604,604.75 | 1,406,783,712.70 | 63,839,281.73 | 120,455,192.34 |
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not Applicable
| Company Name | Mode of acquisition and disposal of subsidiaries during the reporting period | Impact on overall production operations and results |
| BeA GmbH | Established | No significant impact |
| Hongkong Shop-Vac International Co., Limited | Established | No significant impact |
| SK Hand Tool,LLC | Established | No significant impact |
| Shenzhen Workpro Technology Co., Ltd. | Established | No significant impact |
| GreatStar Industrial Vietnam Co., Ltd | Established | No significant impact |
| Hangzhou GreatStar Power Tools Co., Ltd. | Established | No significant impact |
| Frontier Kitchen & Bath (Suzhou) Co., Ltd. | Canceled | No significant impact |
| Hangzhou GreatStar Optoelectronics Technology Co., Ltd. | Canceled | No significant impact |
| Eudura Holding Limited | Canceled | No significant impact |
Description of major holding and joint stock companies
X. Information on Structured Subjects Controlled by the Company
□ Applicable √ Not Applicable
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
XI. Prospects for the Future Development of the Company(I) Corporate Development StrategyThe overall development strategy of the company is to focus on the main business, gain a foothold in China,layout the world, and plan for the long term.
Focusing on the main business means that the Company will continue to use the existing large supermarketand e-commerce channels in Europe and the United States to focus on the main business of TOOLS as the coreproduct, while continuing to dispose of non-core business assets to recover cash and use it for the development ofthe main business. The company will also rely on outbound M&A to develop non-hand tools including powertools and outdoor products.
Based in China, the company will rely on China as the core of the supply chain network in Southeast Asiaand the Chinese engineer dividend to dominate the current round of global supply chain division of labor in thetool industry, continue to expand the leading position of the industry, lead the development of the internationaltool industry, and gradually take over the current round of Europe and the United States in the future to createcustomer demand as the core of the innovation economy era of industrial transfer.
For global deployment, the company continues to focus on strengthening the construction of its own brandservice system in Europe and the United States and the layout of production capacity in Southeast Asia, selectforeign high-quality companies for industrial mergers and acquisitions integration, better access to internationalresources and international markets, and gradually upgrade the company from an ODM company made in Chinato an international OBM company that combines Chinese design, Asian manufacturing, and local services inEurope and the United States.
Finally, planning for the long term means that the company respects the century-long development history ofthe tool industry, relies on the characteristics of stable cash flow in the field of consumer durables with a flatgrowth rate, plans its own business and development path for the long term, gradually cultivates new businessgrowth points, and finally becomes a good company that creates long-term value for society with sound operation,sustainable growth and healthy development.
(II) Business Plan
1. Overall business objectives
The company’s basic strategy is to focus on the main business, gain a foothold in China, layout the world,and plan for the long term, while actively responding to changes in the external environment and changing itsbusiness focus at the right time to seize the rare strategic development opportunities in the next three years andachieve leapfrog development. The company’s overall business goal in 2022 is to strive to achieve a 20%year-on-year growth in its main business.
2. Private brand development goals
Private brand is the long-term stable core competitiveness of the company, the company will continue tomaintain investment in the promotion of own brand products, to ensure that the sales revenue of private brandproducts in 2022 continues to increase, and strive to reach 40% of the revenue share.
3. Cross-border e-commerce development goals
Cross-border e-commerce is the core of the company’s strategy for sustained growth. The company willactively integrate its internal advantageous resources, orderly increase the product categories and service capacityof cross-border e-commerce, and continue to maintain a growth of over 50% in cross-border e-commerce businessin 2022.
4. Power tool development goals
Power tools as the company’s new business line after laser and box, will become the company’s future
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
second growth curve. The company will integrate domestic high-quality lithium resources, orderly promote powertool products with their own characteristics, and strive to achieve more than 50% growth in the power toolbusiness in 2022.(III) Possible RisksBased on the comprehensive analysis of the company’s external environment and the actual situation of theenterprise, the main business risks faced by the company include:
1. Risk of exchange rate fluctuation
At present, the company’s operating revenue basically comes from the overseas market. If the RMBexchange rate fluctuates widely, it will have certain impact on the company’s operating revenue. The majority ofthe company’s main business orders are denominated in U.S. dollars, and fluctuations in the exchange rate ofRMB against the U.S. dollar directly affect the price competitiveness of the products, which will have an impacton the company’s operating results. In this regard, the company will continue to strengthen its overseas layout andsettlement control to hedge and reduce the impact of exchange rate fluctuations on the company’s performance.
2. Risk of rising raw material prices
Recently, the company’s main raw material prices have been fluctuating, causing the company’s productioncosts to fluctuate as well. Although the company’s production capacity is mainly outsourcing production and hasstrong bargaining power with upstream outsourcing manufacturers, if raw material prices continue to rise, it maystill have a certain impact on the company’s profitability. In this regard, the company will continue to strengthenprocurement and cost control, establish strategic cooperative relationships with suppliers and sign long-termagreements to absorb the risk of raw material price fluctuations; at the same time, continue to optimize the productstructure, strengthen the research and development of new products, rely on innovative products to determinereasonable prices and maintain product gross margins.
3. Risk of trade friction
Currently, the United States is the largest single market for the company, and most of the company’s exportsto the United States are still subject to a 25% tariff, which has an adverse impact on the company’s development.In response, the company will pay close attention to the international situation, continue to implement itsinternationalization strategy, promote the construction of overseas manufacturing bases, cultivate overseas supplychains, establish a global production capacity layout and supply chain system, and ensure the stable developmentof the company’s business.
4. Shipping cycle risk
In the last 12 months, the global shipping market has seen a significant increase in shipping prices due to theepidemic and capacity cycle. The majority of the company’s products need to be transported by sea to differentregions of the world, and the increase in shipping prices and the occasional lack of capacity will lead to certainrisks in the sales of the company’s products. In response, the company actively communicates with majorshipping companies around the world to lock in capacity and freight rates in advance to ensure that the company’sbusiness will not be adversely affected by fluctuations in shipping cycles.XII. Reception of research, communication, interviews and other activities during thereporting period
√ Applicable □ Not Applicable
| Reception Date | Reception Location | Reception Mode | Reception Type | Reception | The main content of the talk and the | Index of the basic situation of the research |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| information provided | ||||||
| January 26, 2021 | Company | Telephone communication | Other | Institutional investors, individual investors | Explanation of the company’s 2020 annual results forecast and redemption of convertible bonds | Explanation of the company’s 2020 annual results forecast and redemption of convertible bonds |
| January 27, 2021 | Company | Telephone communication | Other | Institutional investors, individual investors | Explanation of the company’s 2020 annual results forecast and redemption of convertible bonds | Explanation of the company’s 2020 annual results forecast and redemption of convertible bonds |
| January 28, 2021 | Company | Telephone communication | Other | Institutional investors, individual investors | Explanation of the company’s 2020 annual results forecast and redemption of convertible bonds | Explanation of the company’s 2020 annual results forecast and redemption of convertible bonds |
| March 11, 2021 | Company | Telephone communication | Other | Institutional investors, individual investors | The company’s first quarter earnings forecast notes | The company’s first quarter earnings forecast notes |
| March 12, 2021 | Company | Telephone communication | Other | Institutional investors, individual investors | The company’s first quarter earnings forecast notes | The company’s first quarter earnings forecast notes |
| April 19, 2021 | Company | Other | Other | Other | The company’s results and operations for 2020 | Record of Investor Relations Activities of Hangzhou Great Star Industrial Co., Ltd. (No. 001 of [2021]) disclosed on the Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn/) |
| April 26, 2021 | Company | Telephone | Other | Institutional | Company’s | Company’s FY2020 |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| communication | investors, individual investors | FY2020 results, Q1 2021 results statement | results, Q1 2021 results statement | |||
| April 27, 2021 | Company | Telephone communication | Other | Institutional investors, individual investors | Company’s FY2020 results, Q1 2021 results statement | Company’s FY2020 results, Q1 2021 results statement |
| August 25, 2021 | Company | Telephone communication | Other | Institutional investors, individual investors | Company’s half-yearly results statement for 2021 | Company’s half-yearly results statement for 2021 |
| August 26, 2021 | Company | Telephone communication | Other | Institutional investors, individual investors | Company’s half-yearly results statement for 2021 | Company’s half-yearly results statement for 2021 |
| August 27, 2021 | Company | Telephone communication | Other | Institutional investors, individual investors | Company’s half-yearly results statement for 2021 | Company’s half-yearly results statement for 2021 |
| October 28, 2021 | Company | Telephone communication | Other | Institutional investors, individual investors | Company’s first three quarters of 2021 results statement | Company’s first three quarters of 2021 results statement |
| October 29, 2021 | Company | Telephone communication | Other | Institutional investors, individual investors | Company’s first three quarters of 2021 results statement | Company’s first three quarters of 2021 results statement |
| November 01, 2021 | Company | Telephone communication | Other | Institutional investors, individual investors | Company’s first three quarters of 2021 results statement | Company’s first three quarters of 2021 results statement |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Section IV Corporate GovernanceI. Basic Status of Corporate GovernanceDuring the reporting period, the Company continued to improve its corporate governance structure, establish and improve itsinternal management and control system, enhance its governance level and standardize its operation in strict accordance with therequirements of the Company Law, the Securities Law, the Code on Governance of Listed Companies and the Rules Governing theListing of Stocks on the Shenzhen Stock Exchange.As of the end of the reporting period, the actual situation of the Company’s governance basically complied with therequirements of the relevant documents on the governance of listed companies issued by the CSRC.(I) About shareholders and generalmeetings of shareholdersThe Company strictly follows the requirements of the Opinions on the Regulation of General Meetings of Listed Companies,the Articles of Association and the Rules of Procedure of General Meetings of Shareholders to regulate the procedures forconvening, holding and voting at general meetings of shareholders, treating all shareholders equally, ensuring the right of allshareholders to know and participate in important matters of the Company, and ensuring that all shareholders can fully exercisetheir rights.
(II) About the Directors and the Board of DirectorsThe Company elects its directors in strict accordance with the election procedures stipulated in the Company Law and theArticles of Association of the Company. At present, the Company has nine directors, including three independent directors,accounting for one third of all directors. The number and composition of the Board of Directors of the Company comply with therequirements of laws and regulations. The Board of Directors has four special committees, namely, the Strategy and DevelopmentCommittee, the Remuneration and Appraisal Committee, the Nomination Committee and the Audit Committee. The Board ofDirectors conducts its work in strict accordance with the Articles of Association, the Rules of Procedure of the Board of Directors,the Work System for Independent Directors, the Rules for the Work of the Secretary of the Board of Directors, the Guidelines for theStandardized Operation of Listed Companies on the Shenzhen Stock Exchange, etc., and exercises its functions and powers inaccordance with the law. All directors of the Company attended the Board of Directors and the Shareholders’ General Meeting ontime, and performed their duties as directors in an honest, trustworthy, diligent and responsible manner.
(III) About the Supervisors and the Supervisory BoardThe Board of Supervisors of the Company elects supervisors in strict accordance with the selection and engagement proceduresof the Company Law, the Articles of Association and the Rules of Procedure for the Board of Supervisors. The Supervisory Board ofthe Company is composed of three Supervisors, one of whom is an employee Supervisor, and the number and composition of theSupervisory Board of the Company are in compliance with the laws and regulations. The Company’s Supervisors conscientiouslyperform their duties and, in the spirit of responsibility to all shareholders, convene the Supervisors’ meetings, attend the shareholders’meetings and attend the Board of Directors’ meetings in accordance with the Rules of Procedure of the Supervisors’ Committee andother rules and regulations, and effectively supervise and express independent opinions on major matters, connected transactions,
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
financial conditions and the performance of duties of the Directors and the President of the Company.(IV) Regarding the relationship between controlling shareholders and listed companiesThe Company and the controlling shareholder are independent in terms of personnel, assets, finance, institutions and business,and the Board of Directors, Supervisory Committee and internal institutions of the Company can operate independently. TheCompany’s controlling shareholder acts in a standardized manner and exercises its shareholder rights and undertakes correspondingobligations through the general meeting of shareholders, without interfering directly or indirectly with the decision-making andbusiness activities of the Company beyond the general meeting of shareholders to the detriment of the legitimate rights and interestsof the Company or other shareholders.(V) About performance evaluation and incentive and restraint mechanismThe Company has established a comprehensive performance appraisal and evaluation system, and the appointment of seniormanagement is open, transparent and in compliance with relevant laws and regulations and the Company’s internal rules andregulations. The Company has established a performance evaluation system to link employees’ income to their work performance.In the future, the company will explore more forms of incentives to form a multi-level comprehensive incentive mechanism,improve performance evaluation standards, better mobilize the enthusiasm of managers, and attract and stabilize outstandingmanagement talents and technical and business backbones.(VI) About relevant stakeholdersThe company fully respects and safeguards the legitimate rights and interests of relevant stakeholders, realizes the balance ofinterests of shareholders, employees and society, attaches importance to social responsibility, and promotes the sustainable andhealthy development of the company together with stakeholders.(VII) On information disclosure and transparencyThe Company strictly follows the provisions of relevant laws and regulations and the Company’s Information DisclosureManagement System to strengthen the management of information disclosure matters and fulfill its information disclosureobligations, and designates Securities Times, Securities Daily and Cninfoas the Company’s information disclosure newspapers andwebsites to disclose information in a true, accurate, timely and complete manner to ensure that all investors have fair access to theCompany’s information. The Company will continue to improve and perfect the internal rules and regulations of corporategovernance in accordance with the requirements of the Code of Governance for Listed Companies and the Rules Governing theListing of Stocks on the Shenzhen Stock Exchange to strengthen the standardized operation and promote the sustainable and stabledevelopment of the Company.
Whether there are material differences between the actual state of corporate governance and the provisions on governance of listedcompanies issued by laws, administrative regulations and the CSRC
□ Yes √ No
The actual state of corporate governance does not differ materially from the laws, administrative regulations and regulations issuedby the CSRC regarding the governance of listed companies.II. Independence of the Company vis-à-vis the controlling shareholder and the actualcontroller in ensuring the Company’s assets, personnel, finances, institutions, business andother aspects
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
During the reporting period, the Company was completely separated from its controlling shareholder in terms of business, assets,personnel, organization and finance, etc. The Company’s production and operation were stable, its internal organization was perfectand it was able to operate independently and standardized.(I) Business independence aspects of the CompanyThe Company has independent production, procurement and sales systems and is fully independent from the controllingshareholder.(II) Independence of the Company’s personnelThe Company’s personnel, HR and salaries are completely independent. The president, vice president, secretary of the board ofdirectors, chief financial officer and other senior management personnel work for the Company and receive remuneration, and do nothold any positions and receive remuneration other than those of directors and supervisors in the controlling shareholder and itssubsidiaries.(III) The integrity of the Company’s assetsThe property rights relationship between the Company and the controlling shareholder is clear, and the Company’s funds,assets and other resources are not illegally occupied or dominated by it. The company’s assets are complete, with productionequipment, auxiliary production equipment and patents and other assets appropriate to the scope of production and operation, andthe company has full control and domination over all assets.(IV) Institutional independenceThe Board of Directors, the Supervisory Committee, the management and other internal bodies of the Company operateindependently, and each functional department is completely separated from the controlling shareholder in terms of authority,responsibility and personnel, etc. There is no superior-subordinate relationship between the controlling shareholder and itsfunctional departments and the Company and the functional departments of the Company, and there is no phenomenon that thecontrolling shareholder affects the independence of the production and operation management of the Company.(V) Financial independenceThe Company has set up an independent financial department, established a sound financial and accounting managementsystem and independent accounting, and there is no case of controlling shareholders interfering with the financial and accountingactivities of the Company. The Company has independent accounts in commercial banks and does not share bank accounts with thecontrolling shareholder. The Company is independent in making tax returns and fulfilling its tax obligations in accordance with thelaw.
III. Competition in the Same Industry
□ Applicable √ Not Applicable
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
IV. Information on the Annual General Meeting and Extraordinary General Meeting HeldDuring the Reporting Period
1. Shareholders’ meeting during the reporting period
| Sessions | Meeting Type | Investor participation ratio | Date | Date of Disclosure | Conference Resolutions |
| 2020 Annual General Meeting of Shareholders | Annual General Meeting of Shareholders | 56.56% | May 10, 2021 | May 11, 2021 | Announcement number: 2021-055 |
| First Extraordinary General Meeting of Shareholders in 2021 | Extraordinary General Meeting of Shareholders | 65.74% | September 08, 2021 | September 09, 2021 | Announcement number: 2021-083 |
| Second Extraordinary General Meeting of Shareholders in 2021 | Extraordinary General Meeting of Shareholders | 58.80% | December 20, 2021 | December 21, 2021 | Announcement number: 2021-103 |
2. Preferred shareholders whose voting rights have been restored request an Extraordinary GeneralMeeting of Shareholders
□ Applicable √ Not Applicable
V. Directors, Supervisors and Senior Management
1. Basic situation
| Name | Position | Appointment Status | Gender | Age | Term Start Date | Term Expiration Date | Shares at Beginning | Increased shares in this period | Reduced shares in this period | Other additions and deletions | Shares at Ending | Reasons for change in share |
| Qiu Jianping | President | incumbent | Male | 59 | June 16, 2008 | August 30, 2023 | 60,884,300 | 0 | 15,066,800 | 0 | 45,817,500 | Lending to the company for daily operations |
| Chi Xiaoheng | Vice Chairman and President | incumbent | Female | 46 | January 12, 2021 | August 30, 2023 | 729,950 | 0 | 0 | 0 | 729,950 | |
| Wang | Director, | incumbe | Female | 60 | June 16, | August | 17,150,9 | 0 | 4,200,00 | 0 | 12,950,9 | Lending |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Lingling | Vice President | nt | 2008 | 30, 2023 | 60 | 0 | 60 | to the company for daily operations | ||||
| Li Zheng | Director, Vice President | incumbent | Male | 62 | August 31, 2020 | August 30, 2023 | 676,470 | 0 | 0 | 0 | 676,470 | |
| Xu Zheng | Directors | incumbent | Female | 37 | June 16, 2008 | August 30, 2023 | 0 | 0 | 0 | 0 | 0 | |
| Cen Zhengping | Directors | incumbent | Male | 59 | May 24, 2019 | August 30, 2023 | 0 | 0 | 0 | 0 | 0 | |
| Wang Gang | Independent Directors | incumbent | Male | 46 | August 31, 2020 | August 30, 2023 | 0 | 0 | 0 | 0 | 0 | |
| Chen Zhimin | Independent Directors | incumbent | Female | 61 | August 31, 2020 | August 30, 2023 | 0 | 0 | 0 | 0 | 0 | |
| Shi Hong | Independent Directors | incumbent | Female | 58 | August 31, 2020 | August 30, 2023 | 0 | 0 | 0 | 0 | 0 | |
| Jiang Saiping | Chairman of the Supervisory Board | incumbent | Female | 50 | June 15, 2011 | August 30, 2023 | 0 | 0 | 0 | 0 | 0 | |
| Fu Yajuan | Supervisors | incumbent | Female | 49 | August 31, 2020 | August 30, 2023 | 0 | 0 | 0 | 0 | 0 | |
| Chen Jun | Supervisors | incumbent | Male | 41 | June 15, 2011 | August 30, 2023 | 0 | 0 | 0 | 0 | 0 | |
| Ni Shuyi | Chief Financial Officer | incumbent | Female | 45 | June 16, 2008 | August 30, 2023 | 0 | 0 | 0 | 0 | 0 | |
| Wang Weiyi | Vice President | incumbent | Male | 51 | June 16, 2008 | August 30, 2023 | 771,525 | 0 | 0 | 0 | 771,525 | |
| Wang Wei | Vice President | incumbent | Male | 50 | June 16, 2008 | August 30, 2023 | 760,200 | 0 | 0 | 0 | 760,200 | |
| Li Feng | Vice President | incumbent | Male | 46 | June 16, 2008 | August 30, 2023 | 812,977 | 0 | 0 | 0 | 812,977 |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Zhou Siyuan | Board Secretary | incumbent | Male | 36 | January 31, 2018 | August 30, 2023 | 0 | 0 | 0 | 0 | 0 | |
| Zhang Ou | Vice President | incumbent | Male | 54 | April 29, 2019 | August 30, 2023 | 0 | 0 | 0 | 0 | 0 | |
| Total | -- | -- | -- | -- | -- | -- | 81,786,382 | 0 | 19,266,800 | 0 | 62,519,582 | -- |
Whether there was any departure of directors and supervisors and dismissal of senior management during the reporting period
□ Yes √ No
Changes in directors, supervisors and senior management of the Company
√ Applicable □ Not Applicable
| Name | Position | Type | Date | Reason |
| Qiu Jianping | President | Outgoing | January 12, 2021 | Mr. Qiu Jianping resigned from the position of President of the Company due to the restructuring of the division of labor of the Company, and continued to serve as the Chairman of the Board of Directors and the Chairman of the Strategy and Development Committee of the Board of Directors after his resignation |
| Chi Xiaoheng | Vice Chairman, President | Appointments | January 12, 2021 | The Board of Directors appointed Ms. Chi Xiaoheng, Vice Chairman and Vice President, as President of the Company, while Ms. Chi Xiaoheng ceased to hold the position of Vice President of the Company. |
2. Service Situation
Professional background, major work experience and current major responsibilities in the company of the current directors,supervisors and senior management
1. Director
Mr. Qiu Jianping, Chairman of the Board of Directors of the Company. He is a Chinese national with no permanent residencyoutside China. Born in 1962, graduated from Xi’an Jiaotong University in 1985 with a postgraduate degree in mechanical casting anda master’s degree in engineering. From June 2008 to January 2021, he served as the Chairman and President of the Company. FromJanuary 2021 to present, he is the Chairman of the Board of Directors of the Company.
Ms. Chi Xiaoheng, Vice Chairman and President of the Company. She is a Chinese national with no permanent residencyoutside China. Born in 1975, with a college degree. From June 2008 to August 2020, she served as a director and vice president ofthe Company. From August 2020 to January 2021, she served as Vice Chairman and Vice President of the Company. From January2021 to present, she is the Vice Chairman and President of the Company.Mr. Li Zheng, Director and Vice President of the Company. He is a Chinese national with no permanent residency outsideChina. Born in 1959, with a college degree. From 2008 to August 2020, Mr. Li served as Vice Chairman and Vice President of the
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Company, and from August 2020 to present, he has served as Director and Vice President of the Company.Ms. Wang Lingling, Director and Vice President of the Company. She is a Chinese national with no permanent residencyoutside China. Born in 1961, with a bachelor’s degree. Since 2008, Ms. Wang has been a Director and Vice President of theCompany.
Ms. Xu Zheng, Director of the Company. She is a Chinese national with no permanent residency outside China. Born in 1984,with a bachelor’s degree. Since 2008, Ms. Xu has been the Secretary to the Chairman of the Board of Directors of GreatStar HoldingGroup Co., Ltd. Since 2011, she has been a Director of Hangcha Group. Since 2008, she has been a Director of the Company.Mr. Cen Zhengping Director of the Company, is a Hong Kong Chinese citizen, born in 1962, holds a master’s degree and is aprofessor-level senior engineer. He has been a Director of the Company since May 2019.Mr. Wang Gang, an independent director of the Company. He is a Chinese national with no permanent residency outside China.He was born in October 1975, holds a master’s degree, is a certified public accountant and a senior economist. Mr. Wang has been aDirector, Deputy General Manager and Secretary of the Board of Directors of Hangzhou ROBAMElectric Co., Ltd. He has been anindependent director of the Company since August 2020.Ms. Shi Hong, an independent director of the Company. She is of Chinese nationality and has no permanent residency outsideChina. She was born in July 1963, holds a master’s degree and is an associate professor. From September 2005 to July 2018, shewas an associate professor in the Environmental Engineering Department of the School of Marine Science and Engineering ofShanghai Maritime University, and the director of the Environmental Engineering Laboratory. She has been an independent directorof the Company since August 2020.
Ms. Chen Zhi Min, an independent director of the Company. She is a Chinese national with no permanent residency outsideChina. Born in April 1960, she has a master’s degree. She is currently a Director of Zhejiang Caitong Asset Co., Ltd, a Supervisorof Hangzhou Tigermed Consulting Co., Ltd., and an independent director of Zhejiang Canaan Technology Limited, ZhejiangWeixing Industrial Development Co., Ltd., Hangzhou Honghua Digital Technology Stock Company LTD., and Tongkun GroupCo.,Ltd. She has been an independent director of the Company since August 2020.
2. Supervisor
Ms. Jiang Saiping is the Chairman of the Supervisory Board of the Company. She is a Chinese national with no permanentresidency outside China. Born in November 1971, she has a bachelor’s degree. From 2009 to December 2013, she served as theManager of External Sales Department of the Company, and from 2013 to now, she has been the Director of External Sales of theCompany.
Ms. Fu Yajuan is a Supervisor of the Company. She is a Chinese national with no permanent residency outside China. She wasborn in September 1972, with a college degree and is a senior accountant. Since July 2008, she has been the Deputy FinancialController of the Company.
Mr. Chen Jun is a supervisor of the Company. He is a Chinese national with no permanent residency outside China. Born inAugust 1980, he has a bachelor’s degree and is a middle-level engineer. Since 2009, he has been the manager of the Industrial DesignDepartment of the company, the deputy secretary general of the Corporate Science Association of the company, and the secretary ofthe R&D Innovation Branch of the Communist Party of China.
3. Other senior management
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Mr. Zhou Siyuan, Secretary of the Board of Directors and Vice President of the Company. He is a Chinese national with nopermanent residency outside China. He was born in 1986 and has a postgraduate degree. Since January 2018, he has been theSecretary of the Board of Directors of the Company.Ms. Ni Shuyi, Chief Financial Officer of the Company. She is a Chinese national with no permanent residency outside China.Born in 1976, with a bachelor’s degree. Since 2008, she has been the Chief Financial Officer of the Company.Mr. Wang Weiyi, Vice President of the Company. He is a Chinese national with no permanent residency outside China. Bornin 1970, graduated from Zhejiang University with a bachelor’s degree in Mechanical Manufacturing and Technology. Since 2008, hehas been the Vice President of the Company, responsible for product development and quality management, and is one of the mainpersons in charge of the national laboratory of the Company.Mr. Wang Xie, Vice President of the Company. He is a Chinese national with no permanent residency outside China. He wasborn in 1971 and has a college degree. Since 2008, he has been the vice president of the company, responsible for the company’sproduct procurement business.Mr. Li Feng, Vice President of the Company. He is a Chinese national with no permanent residency outside China. He wasborn in 1975 and has a college degree. Since 2008, he has been the Vice President of the Company, responsible for the external salesof the Company’s products.Mr. Zhang Ou, Vice President of the Company, Chinese nationality, no permanent residence abroad, born in 1967, senioreconomist, professor. Since April 2019, he has been the Vice President of the Company, responsible for the operation of the laserindustry segment of the Company.
Employment with shareholders
√ Applicable □ Not Applicable
| Name of the incumbent | Name of shareholder unit | Positions held in shareholder units | Term Start Date | Term Expiration Date | Whether or not you receive compensation benefits at the shareholder unit |
| Qiu Jianping | GreatStar Holding Group Co., Ltd. | President | Aug. 10, 2009 | No | |
| Wang Lingling | GreatStar Holding Group Co., Ltd. | Vice Chairman | January 10, 2020 | No | |
| Li Zheng | GreatStar Holding Group Co., Ltd. | Director | Aug. 10, 2009 | No | |
| Chi Xiaoheng | GreatStar Holding Group Co., Ltd. | Director | Aug. 10, 2009 | No | |
| Xu Zheng | GreatStar Holding Group Co., Ltd. | Manager | January 01, 2016 | Yes | |
| Fu Yajuan | GreatStar Holding Group Co., Ltd. | Supervisor | January 10, 2020 | No | |
| Statement of | None | ||||
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Employment in other units
√ Applicable □ Not Applicable
employment inshareholderunitsName of theincumbent
| Name of the incumbent | Name of other units | Positions held in other units | Term Start Date | Term Expiration Date | Whether you receive compensation allowance in other units |
| Qiu Jianping | Zhejiang Hangcha Holding Co., Ltd. | President | February 02, 2011 | No | |
| Qiu Jianping | Hangcha Group Co., Ltd. | Director | February 02, 2011 | No | |
| Qiu Jianping | Zhejiang Zhongtai GreatStar Real Estate Co., Ltd. | Director | May 10, 2005 | No | |
| Qiu Jianping | Hangzhou GreatStar Liansheng Trading Co., Ltd. | Executive Director | March 19, 2011 | No | |
| Qiu Jianping | Hangzhou GreatStar Precision Machinery Co., Ltd. | President | December 30, 2006 | No | |
| Qiu Jianping | SMART SILVER LIMITED | Director | January 20, 2011 | No | |
| Qiu Jianping | Hong Kong Golden Deer Limited | Director | January 20, 2011 | No | |
| Qiu Jianping | Ruian Zhaowei Co., Ltd. | Director | January 20, 2011 | No | |
| Qiu Jianping | Ruian Qihao Co., Ltd. | Director | January 20, 2011 | No | |
| Qiu Jianping | Ruian Junye Co., Ltd. | Director | January 20, 2011 | No | |
| Qiu Jianping | GreatStar Industrial Co., Ltd. | Executive Director | June 20, 2013 | No | |
| Qiu Jianping | Golden Rice Investment Co., Ltd. | Director | January 20, 2011 | No | |
| Qiu Jianping | Hangzhou Xihu Tiandi Development Co., Ltd. | Director | May 13, 2011 | No | |
| Qiu Jianping | Xinjiang Lianhe Investment Limited Partnership | Managing Partner | January 10, 2012 | No | |
| Qiu Jianping | Tai Fung Limited | Director | January 20, | No |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| 2011 | |||||
| Qiu Jianping | Hangzhou Kunxia Investment Management Partnership (Limited Partnership) | Managing Partner | January 18, 2018 | No | |
| Qiu Jianping | Zhejiang Equity Services Group Co., Ltd. | Director | November 08, 2017 | No | |
| Qiu Jianping | Zhejiang Guozhi Robot Technology Co., Ltd. | Director | September 26, 2014 | No | |
| Qiu Jianping | Zhejiang Private Enterprise Joint Investment Co., Ltd. | Director | April 13, 2015 | No | |
| Qiu Jianping | Zhejiang Asteroid Investment Management Co., Ltd. | Director | June 23, 2016 | No | |
| Qiu Jianping | Hangzhou Lujing Culture Creative Co., Ltd. | Executive Director | November 26, 2015 | No | |
| Qiu Jianping | Hangzhou Xin’anjiang Hot Spring Resort Development Co., Ltd. | Director | November 28, 2011 | No | |
| Qiu Jianping | Zhejiang Youbang Microfinance Co., Ltd. | Director | December 25, 2009 | No | |
| Qiu Jianping | Hainan Haichao Good Luck Enterprise Management Partnership (Limited Partnership) | Managing Partner | April 17, 2019 | No | |
| Qiu Jianping | Hainan Haichao Weishi Enterprise Management Partnership (Limited Partnership) | Managing Partner | January 07, 2021 | No | |
| Qiu Jianping | Hainan Hai Chao Yongjin Enterprise Management Partnership (Limited Partnership) | Managing Partner | January 07, 2021 | No | |
| Qiu Jianping | Hangzhou Zhongcehaichao Enterprise Management Co., Ltd. | President | April 17, 2019 | No | |
| Qiu Jianping | Zhejiang Xin Chai Co., Ltd. | Director | December 26, 2019 | No | |
| Qiu Jianping | Zhongce Rubber Group Co., Ltd. | Director | October 21, 2019 | No | |
| Qiu Jianping | Zhejiang Zhongtai GreatStar Real Estate Co., Ltd. | Director | May 10, 2005 | No | |
| Qiu Jianping | Hangzhou Xinwin Investment Management Partnership (Limited Partnership) | Managing Partner | May 31, 2019 | No | |
| Lingling Wang | Hangzhou GreatStar Precision Machinery Co., Ltd. | Director | September 20, 2011 | No | |
| Lingling Wang | Hangzhou Fuyang Chongsheng Trading Co., | Executive | November 11, | No |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Ltd. | Director and General Manager | 2013 | |||
| Lingling Wang | Zhejiang Zhongtai GreatStar Real Estate Co., Ltd. | Supervisor | March 11, 2011 | No | |
| Lingling Wang | Zhejiang Hangcha Holding Co., Ltd. | Director | January 27, 2012 | No | |
| Li Zheng | Hangzhou GreatStar Precision Machinery Co., Ltd. | Director | September 20, 2011 | No | |
| Chi Xiaoheng | Hangzhou Kunxia Jingyuan Enterprise Management Partnership (Limited Partnership) | Managing Partner | July 10, 2019 | No | |
| Xu Zheng | Hangzhou Zhongcehaichao Enterprise Management Co., Ltd. | Supervisor | April 21, 2019 | No | |
| Xu Zheng | Hangzhou Weiming Investment Management Co., Ltd. | President and General Manager | September 01, 2017 | No | |
| Xu Zheng | Hangzhou Xinglu Trading Co., Ltd. | President | December 02, 2011 | No | |
| Xu Zheng | Hangcha Group Co., Ltd. | Director | March 25, 2011 | No | |
| Xu Zheng | Zhejiang Guozi Robot Technology Co., Ltd. | Director | September 21, 2017 | No | |
| Xu Zheng | Zhejiang Hangcha Holding Co., Ltd. | Supervisor | January 27, 2012 | No | |
| Xu Zheng | Zhongce Rubber Group Co., Ltd. | Chairman of the Supervisory Board | October 21, 2019 | No | |
| Cen Zhengping | Hanjia Design Group Co., Ltd. | President | March 18, 2007 | No | |
| Cen Zhengping | Zhejiang City Construction Group Co., Ltd. | President | February 15, 2006 | No | |
| Cen Zhengping | Shanghai Hanjia Investment Co., Ltd. | President and General Manager | September 12, 2007 | No | |
| Cen Zhengping | Zhejiang Chengjian Real Estate Group Co., Ltd. | President | September 21, 2010 | Yes | |
| Cen Zhengping | Zhejiang Hanjia Investment Co., Ltd. | Executive Director, General | October 20, 2010 | No |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Manager | |||||
| Cen Zhengping | Zhejiang Dishang Investment Co., Ltd. | President | April 04, 2006 | No | |
| Cen Zhengping | Zhejiang Zhonglian Real Estate Development Co., Ltd. | Director | July 25, 2005 | No | |
| Cen Zhengping | Hangzhou Hanjia Xinde Investment Management Partnership | Managing Partner | August 28, 2014 | No | |
| Cen Zhengping | Zhejiang Jiahao Auction Co., Ltd. | Director | February 19, 2014 | No | |
| Cen Zhengping | Zhejiang Guan Yin Art Museum | Director and Curators | September 04, 2012 | No | |
| Cen Zhengping | Hangzhou Zhenda Zinc Power Energy Co., Ltd. | Director | June 21, 2017 | No | |
| Cen Zhengping | Zhejiang Kayin Holdings Co., Ltd. | Director | April 09, 2018 | No | |
| Wang Gang | Hangzhou ROBAM Electrical Appliance Co., Ltd. | Vice President, Secretary of the Board of Director, Directorhip of Investment Director, Director | June 01, 2008 | Yes | |
| Wang Gang | Hangzhou Norbond Nonwoven Co., Ltd. | Director | January 01, 2013 | No | |
| Wang Gang | Tesar Household Appliances (Shanghai) Trading Co., Ltd. | Director | July 01, 2012 | No | |
| Wang Gang | Hangzhou Foster Deep-cooling Equipment Co., Ltd. | Director | January 01, 2018 | No | |
| Wang Gang | De Dietrich Trading (Shanghai) Co., Ltd. | Director | June 01, 2016 | No | |
| Wang Gang | Hangzhou Guoguang Travel Goods Co., Ltd. | Director | October 01, 2017 | No | |
| Wang Gang | Shanghai Qingke Information Technology Co., Ltd. | Supervisor | November 01, 2017 | No | |
| Wang Gang | Ningbo Qingfeng Investment Co., Ltd. | Director | December 01, 2017 | No | |
| Wang Gang | Hangzhou Boss Fu Chuang Investment Management Co., Ltd. | Supervisor | May 01, 2018 | No | |
| Wang Gang | Shengzhou Jindi Intelligent Kitchen Appliances Co., Ltd. | Director | July 01, 2018 | No |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Wang Gang | Hangzhou Ben Song New Material Technology Co., Ltd. | Independent Director | August 01, 2020 | Yes | |
| Wang Gang | Hangzhou Xiaodian Technology Co., Ltd. | Independent Director | September 01, 2020 | Yes | |
| Wang Gang | Hangzhou Wheeler Intelligent Technology Co., Ltd. | Director | October 01, 2020 | No | |
| Wang Gang | Hangzhou Zhu Bingren Culture and Art Co., Ltd. | Director | October 01, 2020 | No | |
| Wang Gang | Tongling Jingqiang Electronic Technology Co., Ltd. | Independent Director | December 15, 2020 | Yes | |
| Chen Zhimin | Zhejiang Caitong Asset Co., Ltd. | Director | No | ||
| Chen Zhimin | Hangzhou Tigermed Pharmaceutical Technology Co., Ltd. | Supervisor | April 22, 2020 | Yes | |
| Chen Zhimin | Zhejiang Canaan Technology Co., Ltd. | Independent Director | April 22, 2016 | Yes | |
| Chen Zhimin | Zhejiang Weixing Industrial Development Co., Ltd. | Independent Director | June 08, 2016 | Yes | |
| Chen Zhimin | Hangzhou Honghua Digital Technology Co., Ltd. | Independent Director | December 06, 2019 | Yes | |
| Chen Zhimin | Tongkun Group Co., Ltd. | Independent Director | June 23, 2020 | Yes | |
| Zhou Siyuan | Zhejiang Guozi Robot Technology Co., Ltd. | Director | September 14, 2017 | No | |
| Zhou Siyuan | Hangzhou Weiming Investment Management Co., Ltd. | Director | September 01, 2017 | No | |
| Zhou Siyuan | Hangzhou Xihu Tiandi Development Co., Ltd. | Director | May 13, 2011 | No | |
| Zhou Siyuan | Hangzhou Xihu Tiandi Management Co., Ltd. | Director | July 23, 2014 | No | |
| Zhou Siyuan | Zhejiang Hangcha Holding Co., Ltd. | Director | January 28, 2011 | No | |
| Zhou Siyuan | Ningbo Donghai Bank Co., Ltd. | Director | No |
Current and outgoing directors, supervisors and senior management of the Company in the last three years of securities regulatoryauthority penalties
□ Applicable √ Not Applicable
3. Remuneration of Directors, Supervisors and Senior Management
Decision-making procedures, basis for determining compensation for directors, supervisors and senior management, and actual
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
payments
1. Decision-making procedures for compensation of directors, supervisors and senior managementThe remuneration of directors is proposed by the Remuneration Committee for consideration and approval by the Board ofDirectors and the General Meeting of Shareholders; the remuneration of supervisors is proposed by the Human ResourcesDepartment for consideration and approval by the Supervisory Board and the General Meeting of Shareholders; the remuneration ofsenior management is proposed by the Remuneration Committee for consideration and approval by the Board of Directors;determining the annual reward principle according to the Company’s business performance, part of the performance salary iscombined with the personal performance appraisal of senior executives, which shall be issued by the chairman of the board ofdirectors after examination.
2. The basis for determining the compensation of directors, supervisors and senior managementThe directors, supervisors and senior management of the Company receive their salaries according to their positions, and at thesame time, based on the Company’s business performance, the annual reward principle is determined, combined with individualperformance appraisal, and the Chairman is authorized to issue performance salary after review.
Remuneration of directors, supervisors and senior management of the Company during the reporting periodUnit: CNY’0000
| Name | Position | Gender | Age | Appointment Status | Total pre-tax compensation received from the company | Whether or not to receive compensation from a related party in the company |
| Qiu Jianping | President | Male | 60 | incumbent | 92 | No |
| Chi Xiaoheng | Vice Chairman, President | Female | 47 | incumbent | 180 | No |
| Li Zheng | Director, Vice President | Male | 63 | incumbent | 120 | No |
| Lingling Wang | Director, Vice President | Female | 61 | incumbent | 40.67 | No |
| Cen Zhengping | Director | Male | 60 | incumbent | 0 | No |
| Xu Zheng | Director | Female | 38 | incumbent | 0 | Yes |
| Shi Hong | Independent Director | Female | 47 | incumbent | 8 | No |
| Chen Zhimin | Independent Director | Female | 59 | incumbent | 8 | No |
| Wang Gang | Independent Director | Male | 60 | incumbent | 8 | No |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Jiang Saiping | Chairman of the Supervisory Board | Female | 51 | incumbent | 67.45 | No |
| Fu Yajuan | Supervisor | Female | 50 | incumbent | 34.34 | No |
| Chen Jun | Supervisor | Male | 42 | incumbent | 37.99 | No |
| Zhou Siyuan | Secretary of the Board of Director, Vice President | Male | 37 | incumbent | 100 | No |
| Ni Shuyi | Chief Financial Officer | Female | 46 | incumbent | 100 | No |
| Wang Weiyi | Vice President | Male | 52 | incumbent | 120 | No |
| Wang Xie | Vice President | Male | 51 | incumbent | 100 | No |
| Li Feng | Vice President | Male | 47 | incumbent | 120 | No |
| Zhang Ou | Vice President | Male | 55 | incumbent | 82.82 | No |
| Total | -- | -- | -- | -- | 1,219.27 | -- |
VI. Performance of Duties by Directors During the Reporting Period
1. Board of Directors for the current reporting period
| Sessions | Date | Date of Disclosure | Conference Resolutions |
| The Fourth Meeting of the Fifth Board of Directors | January 12, 2021 | January 13, 2021 | Announcement number: 2021-001 |
| The Fifth Meeting of the Fifth Board of Directors | January 22nd, 2021 | January 23rd, 2021 | Announcement number: 2021-003 |
| The Sixth Meeting of the Fifth Board of Directors | March 29th, 2021 | March 30, 2021 | Announcement number: 2021-026 |
| The Seventh Meeting of the Fifth Board of Directors | April 06, 2021 | April 07, 2021 | Announcement number: 2021-028 |
| The Eighth Meeting of the Fifth Board of Directors | April 14, 2021 | April 15, 2021 | Announcement number: 2021-036 |
| The Ninth Meeting of the Fifth Board of Directors | April 22, 2021 | April 23rd, 2021 | Announcement number: 2021-052 |
| The Tenth Meeting of the Fifth Board of Directors | June 21, 2021 | June 22nd, 2021 | Announcement number: 2021-060 |
| The Eleventh Meeting of the Fifth Board of Directors | July 05, 2021 | July 06, 2021 | Announcement number: 2021-069 |
| The Twelfth Meeting of the | Aug. 23, 2021 | Aug. 24, 2021 | Announcement number: |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Fifth Board of Directors | 2021-078 | ||
| The Thirteenth Meeting of the Fifth Board of Directors | October 15, 2021 | October 16, 2021 | Announcement number: 2021-089 |
| The Fourteenth Meeting of the Fifth Board of Directors | October 27, 2021 | October 28, 2021 | Announcement number: 2021-093 |
| The Fifteenth Meeting of the Fifth Board of Directors | December 03, 2021 | December 04, 2021 | Announcement number: 2021-099 |
2. Attendance of directors at the board of directors’ meetings and shareholders’ meetings
| Attendance of directors at board meetings and general meetings | |||||||
| Name of Director | Number of board meetings to be attended during the reporting period | Number of board meetings attended on-site | Number of board meetings attended by correspondence | Number of board meetings attended by proxy | Number of board meetings missed | Failure to attend two consecutive board meetings in person | Number of shareholders’ meetings attended |
| Qiu Jianping | 12 | 12 | 0 | 0 | 0 | No | 3 |
| Chi Xiaoheng | 12 | 12 | 0 | 0 | 0 | No | 3 |
| Lingling Wang | 12 | 12 | 0 | 0 | 0 | No | 3 |
| Li Zheng | 12 | 12 | 0 | 0 | 0 | No | 3 |
| Xu Zheng | 12 | 12 | 0 | 0 | 0 | No | 3 |
| Cen Zhengping | 12 | 12 | 0 | 0 | 0 | No | 3 |
| Wang Gang | 12 | 12 | 0 | 0 | 0 | No | 3 |
| Chen Zhimin | 12 | 12 | 0 | 0 | 0 | No | 3 |
| Shi Hong | 12 | 12 | 0 | 0 | 0 | No | 3 |
Explanation of failure to attend two consecutive board meetings in person
3. Directors’ objections to matters relating to the Company
Whether or not the directors have objected to the relevant matters of the Company
□ Yes √ No
The directors did not raise any objection to the relevant matters of the Company during the reporting period.
4. Other descriptions of directors’ performance of duties
Whether the directors’ recommendations on the company were adopted
√ Yes □ No
Notes by the directors on the relevant recommendations of the Company adopted or not adoptedDuring the reporting period, the directors of the Company performed their duties diligently and conscientiously in strict accordance
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
with the relevant laws and regulations and the provisions of the Articles of Association and the Rules of Procedure of the Board ofDirectors of the Company, strictly implemented the resolutions of the General Meeting of Shareholders, attended the meetings of theBoard of Directors and the General Meeting of Shareholders of the Company, carefully considered the motions and activelypromoted the implementation of the resolutions of the Board of Directors. Besides, each director keeps abreast of the company’soperation and the construction of internal control and the implementation of the resolutions of the Board of Directors, activelyadvises the company, fully understands and agrees to matters such as the renewal of the appointment of financial auditors, profitdistribution, connected transactions, financial assistance and shareholder return planning that occurred during the reporting period,and promotes the sustainable development of the company’s businesses.VII. Specialized committees under the Board of Directors during the reporting period
| Committee Name | Membership | Number of meetings held | Date | Conference content | Important comments and suggestions made | Other performance of duties | Disagreement matters specific (if any) |
| Compensation and Appraisal Committee | Chen Zhimin, Shi Hong, Wang Gang, Chi Xiaoheng, Xu Zheng | 1 | April 14, 2021 | Considered and approved the Proposal on the Remuneration Package for Directors of the Company for the Year 2021 and the Proposal on the Remuneration Package for Senior Management of the Company for the Year 2021 | |||
| Audit Committee | Wang Gang, Shi Hong, Chen Zhimin, Wang Lingling, Xu Zheng | 1 | March 02, 2021 | Considered and approved the Report on the Annual Results Express 2020 | |||
| The Third Meeting of the Audit Committee of the Fifth Session of the | Wang Gang, Shi Hong, Chen Zhimin, Wang Lingling, Xu Zheng | 1 | April 14, 2021 | Considered and approved the full text of the 2020 Annual Report and its summary, the |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Board of Directors | Company’s 2020 Annual Audit Report, the Company’s 2020 Financial Accounts Report, the Company’s 2020 Annual Internal Control Self-Evaluation Report, the Proposal to Re-appoint Tianjian CPA Firm (Special Ordinary Partnership) as the Company’s Financial Auditor for 2021, the Proposal on the Company’s 2021 Annual Routine Proposal on Estimated Daily Connected Transactions for 2021, Proposal on Change of Accounting Policy, Summary of the Audit Work of the Audit Department of the Company for 2020 and Audit Work |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Plan for 2021 | |||||||
| The Fourth Meeting of the Audit Committee of the Fifth Session of the Board of Directors | Wang Gang, Shi Hong, Chen Zhimin, Wang Lingling, Xu Zheng | 1 | April 23rd, 2021 | Considered and approved the full text and body of the First Quarter Report 2021 | |||
| The Fifth Meeting of the Audit Committee of the Fifth Session of the Board of Directors | Wang Gang, Shi Hong, Chen Zhimin, Wang Lingling, Xu Zheng | 1 | Aug. 23, 2021 | Considered and approved the full text of the Half-Yearly Report for 2021 and its summary, and the Special Report on the Deposit and Use of Proceeds of the Company for the Half-Yearly Period of 2021 Considered and approved the full text of the Third Quarterly Report for 2021 and its summary | |||
| The Sixth Meeting of the Audit Committee of the Fifth Session of the Board of Directors | Wang Gang, Shi Hong, Chen Zhimin, Wang Lingling, Xu Zheng | 1 | October 27, 2021 | Considered and approved the full text and body of the Third Quarterly Report for 2021 |
VIII. Work of the Supervisory BoardWhether the Supervisory Board has identified any risks to the company in its supervisory activities during the reporting period
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
□ Yes √ No
The Supervisory Board has no objection to the supervision matters during the reporting period.IX. The Company Staff
1. Number of employees, professional composition and education level
| Number of employees of the parent company in service at the end of the reporting period (persons) | 1,319 |
| Number of employees in service of major subsidiaries at the end of the reporting period (persons) | 9,459 |
| Total number of employees in service at the end of the reporting period (persons) | 10,778 |
| Total number of employees receiving remuneration in the current period (persons) | 10,778 |
| Number of retired employees for which the parent company and major subsidiaries are required to bear expenses (persons) | 0 |
| Professional Composition | |
| Professional composition categories | Number of professional composition (persons) |
| Production staff | 7,462 |
| Sales Staff | 1,073 |
| Technical Staff | 973 |
| Finance Staff | 176 |
| Administrative staff | 1,094 |
| Total | 10,778 |
| Education Level | |
| Education level category | Number(person) |
| Master and above | 141 |
| University (including college) | 2,310 |
| High school (including secondary school, technical school) | 3,048 |
| Below high school | 5,279 |
| Total | 10,778 |
2. Compensation Policy
The Company strictly follows the relevant provisions of the national labor contract law for employee salary management and paysemployees’ salaries in full and on time before the 20th of each month. The average salary of employees in 2021 is higher than theprovincial average salary standard in Zhejiang Province in 2021, and calculates employees’ overtime salary on weekdays andweekends in full according to the regulations, and implements a comprehensive working hour system for some positions. Throughout
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
the year, we completed one general salary adjustment for all employees, three quarterly salary adjustments, and one external salarylevel survey. The calculation scheme of wages is divided into two categories: front-line employees are paid according to the overtimepay system, and hourly wages and overtime wages are calculated according to the policy provisions of national labor law;management positions are calculated according to the combination of fixed salary and performance pay.
3. Training Program
Staff training and development is an important piece of work for the company. In 2021, the training management continued to focuson three directions: new employee growth education, professional and technical training, and staff professionalism education. In2022, in order to support the long-term sustainable development of the company, the company will focus on the improvement ofmanagement skills of middle and senior managers, and the training of reserve talents. The company will also strengthen theconstruction of internal trainers and build a strong faculty to meet the growing demand for training.
4. Labor Outsourcing
□ Applicable √ Not Applicable
X. Distribution of Profits and Capitalisation of Capital Reserves of the CompanyThe formulation, implementation or adjustment of the profit distribution policy, in particular the cash dividend policy, during thereporting period
√ Applicable □ Not Applicable
During the reporting period, the Company held the 2020 Annual General Meeting of Shareholders on May 10, 2021, andconsidered and adopted the “Company’s Shareholder Return Plan for the Next Three Years (2021-2023)” and the “Proposal on theCompany’s Profit Distribution Proposal for 2020”; taking into account the Company’s profitability, development strategic plan,shareholder return, social capital cost, external financing environment and other factors, the The Board of Directors has formulatedthe “Shareholder Return Plan for the Next Three Years (2021-2023)”; taking into account the Company’s strategic development planand the business plan for 2021, in order to better safeguard the interests of the Company and all shareholders and improve theCompany’s sustainable development, the Company’s profit distribution plan for 2020 is: no cash dividends, no bonus shares, nocapitalization of capital reserves in 2020, and the remaining undistributed profits will be carried forward to the Company. Theremaining undistributed profits will be carried forward to the next year.
During the reporting period, the Company’s profit distribution policy was formulated and implemented in compliance with therelevant provisions of the Notice of the CSRC on Further Implementation of Matters Relating to Cash Dividends for ListedCompanies, the Guideline for the Supervision of Listed Companies No. 3 - Cash Dividends for Listed Companies and the Articles ofAssociation of the Company, and the relevant decision-making procedures and mechanisms were complete, and the independentdirectors were diligent and conscientious in fully safeguarding the legitimate rights and interests of the small and mediumshareholders.
| Special Note on Cash Dividend Policy | |
| Is it compliant with the provisions of the Articles of Association or the resolution of the General Meeting of Shareholders? | Yes |
| Are the criteria and percentage of dividends clear and unambiguous? | Yes |
| Are the relevant decision-making procedures and mechanisms in | Yes |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| place? | |
| Whether the independent directors have performed their duties and responsibilities and played their proper roles or not? | Yes |
| Whether small and medium shareholders have adequate opportunities to express their opinions and demands and whether their legitimate rights and interests are adequately protected or not? | Yes |
| If the cash dividend policy is adjusted or changed, are the conditions and procedures compliant and transparent? | Yes |
The Company reported a profit during the reporting period and the parent company had positive profit available for distribution toshareholders but did not propose a cash dividend distribution plan
√ Applicable □ Not Applicable
| Reasons for profitability during the reporting period and positive profit available for distribution to shareholders of the parent company but no proposed cash dividend distribution | Use of the Company’s undistributed profits and plans for their use |
| In order to better safeguard the interests of the company and all shareholders and improve the company’s sustainable development, the company will have larger capital expenditures in industrial mergers and acquisitions and new product development in FY2022, taking into account that some shares have been repurchased through the secondary market. | Industrial mergers and acquisitions and new product development , share repurchases. |
Profit distribution and capitalisation of capital reserves for the reporting period
□ Applicable √ Not Applicable
The company plans to pay no cash dividends, send no bonus shares, or increase its share capital by transferring its public reserves forthe year.XI. Implementation of the Company’s Equity Incentive Plan, Employee Stock OwnershipPlan or Other Employee Incentive Measures
□ Applicable √ Not Applicable
The Company has no share incentive plan, employee stock ownership plan or other employee incentive measures and theirimplementation during the reporting period.
XII. Construction and Implementation of Internal Control System During the ReportingPeriod
1. Internal control construction and implementation
During the reporting period, the Company continued to improve and perfect the Company’s internal control system and system instrict accordance with the requirements of the Company Law, the Securities Law, the Code of Governance for Listed Companies, theBasic Standard for Internal Control of Enterprises and relevant laws, regulations and regulatory documents, and the Board ofDirectors conducted self-evaluation of the Company’s internal control and disclosed the Internal Control Self-Evaluation Report
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
every year, and also engaged an internal control audit firm in accordance with the requirements of the Shenzhen Stock Exchange. In2021, the Company revised its Articles of Association in accordance with the new Securities Law, the Rules Governing the Listing ofStocks on the Shenzhen Stock Exchange and other laws, regulations and regulatory documents, taking into account the actualsituation of the Company, and continuously improved and enhanced the level of corporate governance in accordance with the laws,regulations, regulatory documents and the provisions and requirements of the Articles of Association.During the reporting period, there were no material weaknesses and significant deficiencies in internal control over financialreporting and non-financial reporting, and the Company has maintained effective internal control over financial reporting in allmaterial respects in accordance with the requirements of the Code of Corporate Internal Control system and related regulations.
2. Details of significant deficiencies in internal control identified during the reporting period
□ Yes √ No
XIII. Management Control of the Company’s Subsidiaries During the Reporting Period
| Company Name | Integration Plan | Integration Progress | Problems | Solutions | Progress | Follow-up plan |
| Geelong Orchid Holding Limited | Not Applicable | Not Applicable | Not Applicable | Not Applicable | Not Applicable | Not Applicable |
| BeA Corporation | Not Applicable | Not Applicable | Not Applicable | Not Applicable | Not Applicable | Not Applicable |
XIV. Internal Control Self-evaluation Report or Internal Control Audit Report
1. Internal control self-evaluation report
| Date of disclosure of the full internal control evaluation report | April 12, 2022 | |
| Full Disclosure Index of Internal Control Evaluation Report | The 2021 Annual Self-Evaluation Report on Internal Control disclosed on Cninfo (http://www.cninfo.com.cn) | |
| Total assets of units included in the scope of evaluation as a percentage of total assets of the company’s consolidated financial statements | 100.00% | |
| Operating revenues of the units included in the evaluation scope as a percentage of the operating revenues of the company’s consolidated financial statements | 100.00% | |
| Defect Identification Criteria | ||
| Category | Financial Reports | Non-financial Reporting |
| Qualitative criteria | (1) Indications of significant deficiencies in financial reporting include: (i) fraud by | The following circumstances are identified as major defects, and other |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| directors, supervisors and senior management; (ii) misstatement corrections of material errors in published financial reports; (iii) the CPA found a material misstatement in the current financial report and the company’s internal control failed to detect the misstatement in the course of operation; and (iv) ineffective supervision of internal control by the audit committee and internal audit organization. (2) Indications of significant deficiencies in financial reporting include: (i) accounting policies not selected and applied in accordance with GAAP; (ii) anti-fraud procedures and controls not established; (iii) no corresponding control mechanism established or not implemented and no corresponding compensating controls over the accounting treatment of extraordinary or special transactions; (3) Deficiencies other than significant deficiencies and material deficiencies are referred to as general deficiencies. | circumstances are identified as important defects or general defects depending on the degree of impact, respectively. (1) Unscientific decision-making procedures of the enterprise; (2) Violation of national laws and regulations, such as environmental pollution; (3) Loss of managers or technical personnel in droves; (4) Loss of managers or technical personnel in droves; (5) Results of internal control evaluation, especially significant or important deficiencies, are not rectified; and (6) Lack of system control or systemic failure of important operations. | |
| Quantitative standards | A deficiency in internal control that could result in, or result in, a loss related to profit is measured by the operating income indicator. If the amount of financial reporting misstatement that may result from the deficiency alone or together with other deficiencies is less than 1% of operating revenues, it is considered to be an ordinary deficiency; if it exceeds 1% of operating revenues but is less than 3%, it is considered to be a significant deficiency; if it exceeds 3% of operating revenues, it is considered to be a material deficiency. A deficiency in internal control that may result in or lead to a loss related to the management of assets is measured by the total assets indicator. If the amount of misstatement in financial reporting that may result from the deficiency alone or together with other deficiencies is less than 1% of total assets, it is considered a general deficiency; if it exceeds 1% but is less than 3% of total assets, it is considered a | (1) Major defects: causing direct property damage of more than 10 million yuan; (2) Important defects: causing direct property damage of 1 million - 10 million yuan (including); (3) General defects: causing direct property losses of less than 1 million yuan (included). |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| significant deficiency; if it exceeds 3% of total assets, it is considered a material deficiency. | ||
| Number of significant deficiencies in financial reporting (pcs) | 0 | |
| Number of non-financial reporting significant deficiencies (pcs) | 0 | |
| Number of significant deficiencies in financial reporting (pcs) | 0 | |
| Number of non-financial reporting significant deficiencies (pcs) | 0 | |
2. Internal control audit report
√ Applicable □ Not Applicable
| Consideration paragraph in the internal control audit report | |
| In our opinion, Hangzhou Great Star Industrial Co., Ltd. has maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, in accordance with the “Shenzhen Stock Exchange Self-regulatory Guidelines for Listed Companies No. 1 - Standardized Operation of Main Board Listed Companies” (SZSE [2022] No. 13). This conclusion was formed subject to the inherent limitations noted in the attestation report. | |
| Disclosure of internal control audit reports | Disclosed |
| Date of disclosure of the full internal control audit report | April 12, 2022 |
| Full Disclosure Index of Internal Control Audit Report | Verification Report on Internal Control of Hangzhou Great Star Industrial Co., Ltd. (Tianjian Shen (2022) No.) disclosed at http://www.cninfo.com.cn |
| Type of opinion on internal control audit report | Standard unqualified opinion |
| Whether there is a material weakness in non-financial reporting | No |
Whether the accounting firm issued a non-standard opinion on the internal control audit report
□ Yes √ No
Whether the internal control audit report issued by the accounting firm is consistent with the opinion of the Board of Directors’self-evaluation report
√ Yes □ No
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
XV. Rectification of Self-inspection Problems in Special Actions for Governance of ListedCompaniesAccording to the requirements of the document “Notice on the Special Action of Governance of Listed Companies” in ZhejiangSecurities Regulatory Bureau (No. 141 of Zhejiang Securities Regulatory Company [2020]), our company carefully combed throughthe situation of corporate governance in 2018, 2019 and 2020 against the self-examination list and carefully looked for the problemsin corporate governance. After the self-inspection, the Company has met the requirements of relevant regulations in the operation ofthe three committees, investor management and administration, construction of internal control system and quality of informationdisclosure, etc. The directors, supervisors and senior management are diligent and responsible, and the Company does not have thesituation of capital appropriation by the controlling shareholder and its related parties or irregular external guarantee. The Companywill further improve its internal control system, do a good job in information disclosure, investor relations management and otherrelated work, and continuously improve the level of corporate governance.
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Section V. Environmental and Social ResponsibilityI. Major Environmental IssuesWhether the listed company and its subsidiaries are among the key emission units announced by the environmental protectiondepartment
□ Yes √ No
Administrative penalties imposed for environmental issues during the reporting period
| Company or subsidiary name | Reasons for Penalty | Violation | Penalty | Impact on the production and operation of listed companies | Corrective measures of the company |
| None | None | None | None | None | None |
Other environmental information disclosed with reference to key emission unitsNeither the Company nor its subsidiaries are among the key emission units announced by the state environmental protectionauthorities. During the reporting period, the Company was not subject to administrative penalties for environmental issues.Measures taken to reduce its carbon emissions during the reporting period and their effectiveness
√ Applicable □ Not Applicable
In response to the national call for energy conservation and emission reduction, the company has formulated the “EnergyConservation and Emission Reduction Management System”, “Energy Management Operation Guideline”, “Greenhouse GasManagement Regulations” and other systems to integrate the concept of environmental protection into the company’s dailyproduction and operation. Besides, the company actively designs green products, builds green factories and promotes green offices toimplement the concept of energy saving and low carbon by action. The company takes environmental factors into full considerationat the product design and R&D stage, actively launches green products, continuously improves product environmental attributes, andcontinuously develops new environmental processes, thereby reducing material waste, environmental pollution and energyconsumption; in order to help prevent and control pollution, the company has established scientific waste management controlprocedures, chemical management procedures and other relevant norms, so as to strictly control pollution, minimize the impact of itsbusiness operations on the environment and realize green production; the company has promoted the green transformation andupgrading of factories and realized green development by building rooftop solar energy and using electric forklifts in accordancewith the principles of low-carbon energy and clean production; the company has advocated system upgrades around the concept ofgreen office and actively promoted the popularity of green office awareness throughout the company in collaboration with thesupport of various departments.
Reasons for not disclosing other environmental informationNone
II. Social Responsibility
(1) Protection of shareholders’ and creditors’ rights and interests
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
During the reporting period, the Company further strengthened its standardized operation, established a sound corporategovernance structure, standardized management in the convening, holding and proceedings of shareholders’ meetings, and ensuredthe shareholders’ rights to information, participation and voting on important matters of the Company; continuously improved theCompany’s internal control system and amended the Articles of Association in accordance with relevant regulations;conscientiously fulfilled its information disclosure obligations, ensured the truthfulness, accuracy, completeness, timeliness andfairness of information disclosure, and strictly implemented the system of registration of insider information informants andconfidentiality of insider information, and treated all shareholders and investors fairly; strengthened investor relations management,and communicated with investors through various means such as investor relations interactive platform and hotline, and protectedthe legitimate rights and interests of all shareholders of the Company, especially the small and medium shareholders.
(2) Employee Rights Protection
The company insists on people-oriented, takes talent strategy as the focus of enterprise development, strictly abides by theLabor Law, the Law on the Protection of Women’s Rights and Interests and other relevant laws and regulations, pays the socialinsurance for employees’ pension, medical care, unemployment, work injury and maternity on time, respects and safeguardsemployees’ personal rights and interests, and pays practical attention to employees’ health, safety and satisfaction. The companyattaches importance to the cultivation of talents, regularly organizing training on safety production knowledge, basic skills trainingfor each position, and comprehensive quality training for management personnel, so that employees can effectively improve theiroverall professionalism and comprehensive quality in addition to their own work, realize the common growth of employees andenterprises, and build a harmonious and stable labor-management relationship.
(3) Supplier, customer and consumer rights protection
The company has always followed the trading principles of “honesty and trustworthiness, mutual benefit and legal compliance”,paid attention to communication and coordination with all relevant parties, fully respected and protected the legitimate rights andinterests of suppliers and customers, and established strategic partnership with suppliers and customers. The company constantlyimproves the procurement system and process, and in the selection of suppliers, the company has established a fair and impartialevaluation system to screen out qualified suppliers. The company insists that the interests of customers are paramount, strictlycontrols product quality, constantly improves service quality, and always pays attention to product safety, so that the rights andinterests of all parties are duly protected.
(4) Environmental Protection
The Company attaches great importance to environmental protection and takes environmental protection, energy conservationand emission reduction as an important task. During the reporting period, the company strictly complied with the relevantenvironmental protection regulations and corresponding standards for the effective comprehensive management of wastewater andexhaust gas, and the wastewater and exhaust gas treatment facilities were operating normally. In order to strengthen the managementof emission reduction and pollution control, the company conducts regular inspection and the overall operation of environmentalprotection facilities is good, and the work of energy conservation and emission reduction is carried out in an orderly manner.
III. The Consolidation and Expansion of the Poverty Alleviation and Rural RevitalizationDuring the reporting period, the company did not participate in the precise consolidation and expansion of poverty eradication andrural revitalization efforts.
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Section VI Important MattersI. Implementation of Commitments
1. Commitments of the actual controller, shareholders, related parties, acquirers and the Company thathave been fulfilled during the reporting period and have not been fulfilled as of the end of the reportingperiod
√ Applicable □ Not Applicable
| Reasons for Commitment | Committed Parties | Type of Commitment | Commitment Content | Commitment Date | Commitment Period | Fulfillment |
| Share Reform Commitment | ||||||
| Commitments made in the acquisition report or the report on changes in interests | ||||||
| Commitments made at the time of the asset reorganization | GreatStar Group | Performance commitments and compensation arrangements | According to the “Letter of Commitment on Earnings Compensation” issued by GreatStar Group on June 17, 2019, and the “Earnings Compensation Agreement” and “Supplementary Earnings Compensation Agreement” signed with the listed company on August 15, 2019 and September 27, 2019, respectively, the main arrangements for the performance compensation related to this transaction are as follows: 1. The profit compensation period of the GreatStar Group to the listed company is two consecutive fiscal years in and after the date of completion of the transaction, namely | June 04, 2019 | 2021-12-31 | In strict fulfillment |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| undertakes that the total net profit of the listed company will not be less than RMB75,494,100,000 (hereinafter referred to as “the promised net profit of the Synergy Effect”) during the profit compensation period due to the Synergy Effect of the Transaction. 6. The benchmark date of the profit compensation measurement is December 31, 2021. The listed company shall, within 30 working days from the base date of the profit compensation calculation, engage an accounting firm with relevant securities and futures business qualification to conduct a special audit of the net profit from synergies achieved by the listed company in each year of the profit compensation period, and determine the difference between the actual total net profit from synergies and the promised net profit from synergies during the profit compensation period. 7. According to the special audit opinion issued by the accounting firm on the difference between the profit forecast of synergies during the profit compensation period, if the actual aggregate net profit of synergies is less than the promised net profit of synergies, the GreatStar Group shall compensate the listed company in cash, and the amount of compensation shall be = the promised net profit of synergies - the actual aggregate net profit of synergies during the profit compensation period. If the GreatStar Group is required to bear the responsibility of profit compensation according to the preceding paragraph, it shall pay the cash compensation to the bank account designated by the listed company within 30 working days after the issuance of the special audit opinion and the date of the written notice of compensation issued by the listed company. If the GreatStar Group fails to give full compensation to the listed company within the period agreed in this Agreement, the GreatStar Group shall pay to the listed company in cash for each day the compensation amount is overdue, two ten-thousandths of the late liquidated damages, until the compensation amount is paid in full by the GreatStar Group. | |||||
| Qiu Jianping; Wang Lingling | Reduction and regulation of connected | 1. I and the enterprises controlled by me will minimize the connected transactions with the listed company as far as possible and will not use my position as the actual controller of the listed company to seek to give preferential rights over other third parties in business | June 04, 2019 | Long-term validity | In strict fulfillment |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| transactions | cooperation with the listed company. 2. The Company will not use its position as the controlling shareholder of the listed company to seek the right to enter into transactions with the listed company on a priority basis. 3. If there is a necessary and unavoidable connected transaction, the Company and the enterprises controlled by the Company will enter into an agreement with the listed company in accordance with the principles of fairness, equity and equitability, and perform legal procedures, and will fulfill the obligations of information disclosure and relevant internal decision-making and approval procedures in accordance with the requirements of relevant laws, regulations and normative documents and the Articles of Association, so as to ensure that the transaction will not be carried out on terms that are unfair compared with market prices. The Company will ensure that it will not conduct transactions with the listed company on terms that are unfair compared with the market price, and will not use such transactions to engage in any acts that are detrimental to the legitimate rights and interests of the listed company and other shareholders. | ||||
| GreatStar Group | Reduction and regulation of connected transactions | 1. The Company and the enterprises controlled by the Company will minimize connected transactions with the listed company as far as possible and will not use its position as the controlling shareholder of the listed company to seek to give preferential rights over other third parties in business cooperation with the listed company. 2. The Company will not use its position as the controlling shareholder of the listed company to seek the right to enter into transactions with the listed company on a priority basis. 3. If there is a necessary and unavoidable connected transaction, the Company and the enterprises controlled by the Company will enter into an agreement with the listed company in accordance with the principles of fairness, equity and equitable compensation in accordance with the law and perform legal procedures, and will fulfill the obligations of information disclosure and relevant internal decision-making and approval procedures in accordance with the requirements of relevant laws, regulations and normative documents and the Articles of Association, so as to ensure that the transaction will not be conducted at a price that is unfair compared with the | June 04, 2019 | Long-term validity | In strict fulfillment |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| market price. The Company will not enter into any transaction with the listed company on terms that are unfair compared with the market price, and will not use such transaction to engage in any act that is detrimental to the legitimate rights and interests of the listed company and other shareholders. | |||||
| Qiu Jianping; Wang Lingling | Avoiding competition from the same industry | 1. I will not directly or indirectly engage or participate in any business that constitutes potential direct or indirect competition with the operation of the listed company and its subsidiaries; I guarantee that I will take legal and effective measures to ensure that other enterprises under my control will not engage or participate in any business that competes with the operation of the listed company and its subsidiaries. 2. If the listed company further expands its business scope, I and other enterprises under my control will not compete with the expanded business of the listed company; if they may compete with the expanded business of the listed company, I and other enterprises under my control will withdraw from the competition with the listed company in the following manner: A. Stop the business which is or may be in competition with the listed company; B. Incorporate the competing business into the listed company C. Transfer the competing business to an unrelated third party. 3. If I and other enterprises under my control have any business opportunity to engage in or participate in any activities that may compete with the operation of the listed company, they will immediately notify the listed company of the said business opportunity, and if the listed company gives an affirmative reply within a reasonable period specified in the notice that it is willing to make use of the business opportunity, they will try their best to give the listed company the business opportunity. 4. If I violate the above undertaking, I am willing to assume all responsibilities arising from it and fully compensate or indemnify all direct or indirect losses caused to the listed company as a result. | June 04, 2019 | Long-term validity | In strict fulfillment |
| GreatStar Group | Avoiding competition from the same | 1. The Company will not directly or indirectly engage or participate in any business that constitutes potential direct or indirect competition with the operation of the listed company and its subsidiaries; it guarantees that it will take legal and effective measures to ensure that | June 04, 2019 | Long-term validity | In strict fulfillment |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| industry | other enterprises controlled by the Company will not engage or participate in any business that competes with the operation of the listed company and its subsidiaries. 2. If the listed company further expands its business scope, the Company and other enterprises controlled by the Company will not compete with the expanded business of the listed company; if they may compete with the expanded business of the listed company, the Company and other enterprises controlled by the Company will withdraw from the competition with the listed company in the following manner: A. Stop the business that competes or may compete with the listed company; B. Incorporate the competing business into the operation of the listed company C. Transfer the competing business to an unrelated third party. 3. If the Company and other enterprises controlled by the Company have any business opportunity to engage in or participate in any activity that may compete with the operation of the listed company, they shall immediately notify the listed company of the said business opportunity, and if the listed company replies affirmatively within a reasonable period specified in the notice that it is willing to use the business opportunity, they shall endeavor to give the listed company the business opportunity. 4. If the above undertaking is violated, the Company is willing to assume all responsibilities arising therefrom and fully compensate or indemnify all direct or indirect losses caused to the listed company as a result. | ||||
| Qiu Jianping; Wang Lingling | Safeguarding the independence of listed companies | I undertake that after the completion of this transaction, I will ensure that the listed company will continue to improve the corporate governance structure and independent operation of the company’s management system in accordance with the relevant laws and regulations and the requirements of the Articles of Association, and continue to maintain the independence of the listed company in terms of business, assets, finance, institutions and personnel, and effectively protect the interests of all shareholders. | June 04, 2019 | Long-term validity | In strict fulfillment |
| GreatStar Group | Protecting the independence of listed | The Company undertakes that after the completion of the Transaction, it will ensure that the listed company will continue to improve its corporate governance structure and independently operated corporate management system in accordance with the relevant | June 04, 2019 | Long-term validity | In strict fulfillment |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| companies | laws and regulations and the requirements of the Articles of Association, continue to maintain the independence of the listed company in terms of business, assets, finance, institutions and personnel, and effectively protect the interests of all shareholders. | ||||
| All directors and senior management of the Company | Other commitments | 1. I promise not to transfer benefits to other units or individuals without compensation or on unfair terms, or use other means to harm the interests of the company. 2. I promise to restrain my duty consumption behavior. 3. I promise not to use the company’s assets to engage in investment or consumption activities unrelated to the performance of my duties. 4. I undertake to link the remuneration system formulated by the Board of Directors or the Remuneration and Evaluation Committee to the implementation of the Company’s measures to fill returns. If I violate the above commitment and cause losses to the company or shareholders, I will bear the compensation responsibility according to the law. | June 04, 2019 | Long-term validity | In strict fulfillment |
| GreatStar Group | Other commitments | 1. Not to interfere with the operation and management activities of the Company beyond its authority and not to encroach on the interests of the Company. 2. After the date of this undertaking and before the completion of this transaction, if the CSRC makes clear provisions on the measures to fill diluted returns and its undertakings, and if the above undertakings cannot satisfy such provisions of the CSRC, the Company undertakes to issue additional undertakings in accordance with the provisions of the CSRC at that time. 3. The Company will strictly fulfill the measures to fill the diluted immediate return, and if it fails to fulfill the measures to fill the diluted immediate return, it will publicly explain the specific reasons for not fulfilling the measures to fill the diluted immediate return and apologize to the shareholders of the Company and public investors at the general meeting of the Company; if it fails to fulfill the relevant commitments and causes the investors to suffer losses in securities trading, it will compensate according to law. If any breach of the above commitments causes losses to the Company or its shareholders, the Company will bear the responsibility of compensation in accordance with the law. | June 04, 2019 | Long-term validity | In strict fulfillment |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Qiu Jianping; Wang Lingling | Other commitments | 1. Not to interfere with the operation and management activities of the Company beyond its authority and not to encroach on the interests of the Company. 2. After the date of this undertaking and before the completion of the implementation of this transaction, if the CSRC makes clear provisions on the measures to fill the diluted immediate return and its undertakings, and if the above undertakings cannot satisfy such provisions of the CSRC, I undertake to issue additional undertakings in accordance with the provisions of the CSRC at that time. 3. I will strictly fulfill the measures to fill the diluted immediate return, and if I fail to fulfill the measures to fill the diluted immediate return, I will publicly explain the specific reasons for not fulfilling the measures to fill the diluted immediate return and apologize to the shareholders of the Company and public investors at the general meeting of the Company; if I fail to fulfill the relevant commitments and cause the investors to suffer losses in securities trading, I will compensate according to law. If the Company or its shareholders suffer losses as a result of any breach of the above commitments, I will bear the responsibility of compensation in accordance with the law. | June 04, 2019 | Long-term validity | In strict fulfillment | |
| Commitments made at the time of initial public offering or refinancing | All directors and senior management of the Company | Other Commitments | 1. We undertake not to transfer benefits to other units or individuals without compensation or on unfair terms, or use other means to harm the interests of the Company. 2. We undertake to restrain directors and senior management from spending on their duties. 3. We undertake not to use the company’s assets to engage in investment or consumption activities unrelated to the performance of their duties. 4. We commit to link the remuneration system formulated by the Board of Directors or the Remuneration Committee to the implementation of the Company’s measures to fill returns. 5. If the company implements the equity incentive plan in the future, it promises that the exercise conditions of the future equity incentive plan will be linked to the implementation of the measures to fill the return of the company. As one of the subjects responsible for the measures to fill the return, if I violate the above commitment or refuse to fulfill the above commitment, I agree to be punished or take relevant management measures in accordance with the relevant regulations and rules formulated or issued by | November 23, 2018 | Long-term validity | In strict fulfillment |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| the CSRC and the Shenzhen Stock Exchange and other securities regulators, and I am willing to bear the corresponding legal responsibilities. | |||||
| GreatStar Group | Other commitments | The Company undertakes not to interfere with the operation and management activities of the Company beyond its authority and not to encroach on the interests of the Company. As one of the responsible subjects of the measures to fill the return, if the Company violates the above commitment or refuses to fulfill the above commitment, the Company agrees to make relevant penalties or take relevant management measures in accordance with the relevant regulations and rules formulated or issued by the CSRC and the Shenzhen Stock Exchange, and is willing to bear the corresponding legal responsibilities. | November 23, 2018 | Long-term validity | In strict fulfillment |
| Qiu Jianping; Wang Lingling | Other commitments | I undertake not to interfere with the management activities of the Company beyond my authority and not to misappropriate the interests of the Company. As one of the responsible subjects of the measures to fill the return, if I violate the above commitment or refuse to fulfill the above commitment, I agree to be punished or take relevant management measures in accordance with the relevant regulations and rules formulated or issued by the CSRC and the Shenzhen Stock Exchange, and I am willing to bear the corresponding legal responsibilities. | November 23, 2019 | Long-term validity | In strict fulfillment |
| GreatStar Group | Commitments on competition, connected transactions and capital appropriation | During the period when it is the controlling shareholder of the Issuer,GreatStar Group and its future direct or indirect control enterprises will not engage in or participate in any business or activities within or outside China in any form (including, but not limited to, investment, mergers and acquisitions, joint ventures, joint ventures, cooperation, partnerships, contracting or leasing operations, purchase of shares of listed companies) business or activities that constitute or may constitute a substantial competitive relationship to the main business of the issuer. Nor will it support in any way within or outside China that the issuer and its third parties other than wholly-owned or controlling subsidiaries engage in or participate in business or activities that constitute or may constitute material competition to the main business of the Issuer. If losses are caused to the issuer due to the failure to perform the | April 05, 2009 | During the period of being the controlling shareholder of the Company | In strict fulfillment |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| promises and guarantees made in the commitment letter, GreatStar Group will compensate theIssuer for all actual losses. | ||||||
| Qiu Jianping; Wang Lingling | Commitments on competition, connected transactions and capital appropriation | During the period in which they have effective control of the Issuer, Mr. and Mrs. Qiu Jianping and any other enterprises directly or indirectly controlled by them other than the Issuer and its wholly-owned or controlled subsidiaries will not engage or participate in any business or activity in any form (including but not limited to investment, merger and acquisition, joint venture, cooperation, partnership, contracting or leasing operation, purchase of shares of listed companies) within or outside the PRC that constitutes or may constitute substantial competition to the Issuer’s principal business. The Company will not support any third party other than the Issuer and its wholly-owned or controlled subsidiaries to engage in or participate in any business or activity that constitutes or may constitute substantial competition to the Issuer’s principal business, either within or outside the PRC. Mr. and Mrs. Qiu Jianping will indemnify the Issuer for all actual losses incurred by the Issuer as a result of any failure to perform the undertakings and warranties given in the Undertaking Letter. | April 05, 2010 | Period as the actual controller of the company | In strict fulfillment | |
| Equity Incentive Commitment | ||||||
| Other commitments to small and medium-sized shareholders of the Company | ||||||
| Whether the | Yes | |||||
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
2. The company’s assets or projects have profitability forecasts and the reporting period is still in theprofitability forecast period, and the company makes a statement on the assets or projects meeting theoriginal profitability forecast and the reasons for it
□ Applicable √ Not Applicable
II. Non-operating Appropriation of Funds by Controlling Shareholders and Other RelatedParties to the Listed Company
□ Applicable √ Not Applicable
There was no non-operating appropriation of funds from controlling shareholders and other related parties to the listed companyduring the reporting period.III. Non-compliance with External Guarantees
□ Applicable √ Not Applicable
The Company has no irregularities in external guarantees during the reporting period.IV. Statement by the Board of Directors on the Latest “Non-standard Audit Report”
□ Applicable √ Not Applicable
V. Explanation by the Board of Directors, the Supervisory Committee and the IndependentDirectors (If Any) on the “Non-standard Audit Report” of the Accounting Firm for theCurrent Reporting Period
□ Applicable √ Not Applicable
VI. Description of Changes in Accounting Policies, Accounting Estimates or Corrections ofSignificant Accounting Errors Compared to the Previous Year’s Financial Report
□ Applicable √ Not Applicable
There were no changes in accounting policies, accounting estimates or corrections of material accounting errors in the reportingperiod.VII. Description of Changes in the Scope of Consolidated Statements Compared with thePrevious Year’s Financial Report
√ Applicable □ Not Applicable
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Please refer to Section X (VIII) Changes in the scope of consolidation.VIII. Appointment and Dismissal of Accounting FirmThe accounting firm currently engaged
| Name of domestic accounting firm | Tianjian Accounting Firm (Special General Partnership) |
| Compensation of domestic accounting firm (RMB million) | 88.5 |
| Consecutive years of audit services for domestic accounting firms | 13 years |
| Name of Certified Public Accountant of the domestic accounting firm | Fei Fanghua, Li Xi |
| Consecutive years of audit services of certified public accountants of domestic accounting firms | 1 year |
Whether to change the accounting firm in the current period
□ Yes √ No
Engagement of internal control audit accounting firm, financial advisor or sponsor
□ Applicable √ Not Applicable
IX. Delisting After Disclosure of Annual Report
□ Applicable √ Not Applicable
X. Bankruptcy Reorganization-related matters
□ Applicable √ Not Applicable
There were no matters related to bankruptcy reorganization during the reporting period.XI. Significant Litigation and Arbitration Matters
√ Applicable □ Not Applicable
| Basic information on litigation (arbitration) | Amount involved (CNY’0000) | Whether a projected liability is formed | Litigation (Arbitration) Progress | Outcome and impact of litigation (arbitration) hearings | Enforcement of litigation (arbitration) judgments | Date of Disclosure | Disclosure Index |
| Summary of other matters not meeting the disclosure standards for material litigation | 446.59 | No | As of December 31, 2021, the amount settled is CNY100,000; the amount involved in the case that has been | For the litigation matters, the Company will recover the amount involved in the case through: 1) winning the lawsuit or mediation; 2) requesting the unit involved in the | Cumulative return of CNY100,000 |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| (Company as plaintiff) | mediated to be recovered is CNY657,680,000; and the amount involved in the case that has been successfully arbitrated and not yet executed is CNY808,177,000. | case and its affiliated legal or natural persons to provide guarantee for the execution of the debt to secure the recovery of the amount involved in the case; and 3) accruing bad debt allowance accordingly in accordance with the accounting standards and the Company’s management system. In summary, the summary of this litigation matter has no significant impact on the Company. | |||||
| Summary of other matters that do not meet the disclosure standards for material litigation (company as defendant party) | 23.82 | No | As of December 31, 2021, the amount involved in cases that have been settled and withdrawn is CNY238,222,000 | This litigation matter has no material impact on the Company. | Not Applicable |
XII. Penalties and Rectification
□ Applicable √ Not Applicable
There are no penalties and corrections for the company in the reporting period.XIII. Integrity of the Company and Its Controlling Shareholders and Actual Controllers
√ Applicable □ Not Applicable
During the reporting period, the Company and its controlling shareholder, the GreatStar Group, and the actual controller, Mr. QiuJianping, were in good standing, and there were no cases of non-fulfillment of court judgments in force or large debts due andunpaid.
XIV. Significant Connected Transactions
1. Connected Transactions Related to Daily Operations
□ Applicable √ Not Applicable
There were no connected transactions related to the daily operation of the Company during the reporting period.
2. Connected Transactions Arising from the Acquisition or Sale of Assets or Equity
□ Applicable √ Not Applicable
The Company did not have any connected transactions of asset or equity acquisition or sale during the reporting period.
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
3. Connected Transactions of Joint Foreign Investment
□ Applicable √ Not Applicable
The Company did not have any connected transactions of joint foreign investment during the reporting period.
4. Connected Debt Transactions
□ Applicable √ Not Applicable
The company has no related debt transactions during the reporting period.
5. Transactions with finance companies with related relationships
□ Applicable √ Not Applicable
There is no deposit, loan, credit or other financial business between the company and the finance company with which therelationship exists and related parties.
6. Transactions between the finance company controlled by the company and related parties
□ Applicable √ Not Applicable
There is no deposit, loan, credit or other financial business between the finance company controlled by the Company and relatedparties.
7. Other significant connected transactions
□ Applicable √ Not Applicable
The Company had no other significant connected transactions during the reporting period.XV. Significant Contracts and Their Performance
1. Trusteeship, contracting and leasing matters
(1) Escrow status
□ Applicable √ Not Applicable
The Company has no escrow situation during the reporting period.
(2) Contracting status
□ Applicable √ Not Applicable
There was no contracting in the company’s reporting period.
(3) Leasing situation
□ Applicable √ Not Applicable
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
The Company has no leases during the reporting period.
2. Material Guarantee
√ Applicable □ Not Applicable
Unit: CNY’0000
| External guarantees of the Company and its subsidiaries (excluding guarantees to subsidiaries) | ||||||||||
| Name of the guarantee object | Date of disclosure of the announcement related to the guarantee amount | Guarantee amount | Actual date of occurrence | Actual guarantee amount | Type of guarantee | Collateral (if any) | Counter-guarantee situation (if any) | Guarantee Period | Is the performance completed | Whether to guarantee for related parties |
| Company’s guarantees to subsidiaries | ||||||||||
| Name of the guarantee object | Date of disclosure of the announcement related to the guarantee amount | Guarantee amount | Actual date of occurrence | Actual guarantee amount | Type of guarantee | Collateral (if any) | Counter-guarantee situation (if any) | Guarantee Period | Is the performance completed | Whether to guarantee for related parties |
| Arrow Fastener Co., LLC | Aug. 24, 2021 | 3,187.85 | October 11, 2021 | 3,187.85 | General Guarantee | 1 year | No | Yes | ||
| Arrow Fastener Co., LLC | October 22, 2020 | 3,187.85 | October 22, 2020 | 3,187.85 | General Guarantee | 1 year | Yes | Yes | ||
| New Earth Hardware Products Co., Ltd. | June 22, 2020 | 10,000 | January 07, 2021 | 6,800 | General Guarantee | 3 years | No | Yes | ||
| Greatstar Europe AG | July 03, 2018 | 47,650.02 | August 31, 2018 | 25,268.95 | General Guarantee | 2018/8/31-2023/7/27 | No | Yes | ||
| Greatstar Europe AG | December 04, 2021 | 24,546.98 | December 27, 2021 | General Guarantee | 2021/12/27-2027/6/30 | No | Yes | |||
| Hongkong | October 16, | 49,059.1 | October 19, | 49,059.1 | General | 2021/10/1 | Yes | Yes | ||
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| GreatStar International Co., Ltd. | 2021 | 2021 | Guarantee | 9-2028/10/18 | |||||||
| Total amount of guarantees to subsidiaries approved during the reporting period (B1) | 77,515.9 | Total actual amount incurred for guarantees to subsidiaries during the reporting period (B2) | 86,781.78 | ||||||||
| Total amount of guarantees to subsidiaries approved at the end of the reporting period (B3) | 138,353.77 | Total actual guarantee balances to subsidiaries at the end of the reporting period (B4) | 83,593.93 | ||||||||
| Subsidiaries’ guarantees to subsidiaries | |||||||||||
| Name of the guarantee object | Date of disclosure of the announcement related to the guarantee amount | Guarantee amount | Actual date of occurrence | Actual guarantee amount | Type of guarantee | Collateral (if any) | Counter-guarantee situation (if any) | Guarantee Period | Is the performance completed | Whether to guarantee for related parties | |
| Total corporate guarantees (i.e., the sum of the first three major items) | |||||||||||
| Total amount of guarantee approved during the reporting period (A1+B1+C1) | 77,515.9 | Total actual amount of guarantees incurred during the reporting period (A2+B2+C2) | 86,781.78 | ||||||||
| Total amount of approved guarantees at the end of the reporting period (A3+B3+C3) | 138,353.77 | Total actual guarantee balance at the end of the reporting period (A4+B4+C4) | 83,593.93 | ||||||||
| Total actual guarantees (i.e. A4+B4+C4) % of the company’s net assets | 7.89% | ||||||||||
| Where: | |||||||||||
The specific description of the use of composite guarantee
3. Entrusting others with cash asset management
(1) Entrusted financial management
√ Applicable □ Not Applicable
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Overview of entrusted financial management during the reporting period
Unit: CNY’0000
| Specific type | Sources of funds for entrusted wealth management | Entrusted wealth management | Outstanding balance | Amount overdue for collection | Impaired amount for overdue financial management |
| Bank Wealth Management Products | Own funds | 241,264.23 | 35,000 | 0 | 0 |
| Total | 241,264.23 | 35,000 | 0 | 0 | |
High-risk entrusted financial management with significant single amount or low security and low liquidity
□ Applicable √ Not Applicable
The entrusted financial management has an expected uncollectible principal or other circumstances that may lead to impairment
□ Applicable √ Not Applicable
(2) Entrusted loans
□ Applicable √ Not Applicable
The Company did not have entrusted loans during the reporting period.
4. Other major contracts
□ Applicable √ Not Applicable
The Company has no other significant contracts during the reporting period.XVI. Description of Other Significant Matters
√ Applicable □ Not Applicable
1. On January 22, 2021, the Company held the Fifth Meeting of the Fifth Session of the Board of Directorsand considered and passed the “Proposal on Early Redemption of the ‘GreatStar Convertible Bonds’”. TheCompany has agreed to exercise the conditional redemption right of the “GreatStar Convertible Bonds” andredeem all the unconverted “GreatStar Convertible Bonds” registered in the Shenzhen Branch of China SecuritiesDepository and Clearing Corporation after the close of business on the redemption registration date (February 23,2021) at the price of the face value of the bonds plus the accrued interest for the period. Upon completion of theredemption, the “GreatStar Convertible Bonds” will be delisted from the Shenzhen Stock Exchange from March 5,2021. For details, please refer to the Announcements No. 2021-003, 2021-004 and 2021-005 disclosed athttp://www.cninfo.com.cn on January 23, 2021, No. 2021-019 disclosed at http://www.cninfo.com.cn on February24, 2021 and No. 2021-019 disclosed at http://www.cninfo.com.cn on February 24, 2021 and No. 2021-022 and2021-023 on March 05, 2021 at http://www.cninfo.com.cn.
2. On March 29, 2021, the Sixth Meeting of the Fifth Session of the Board of Directors of the Companyconsidered and approved the “Proposal on Capital Increase and Acquisition of Assets from Wholly-ownedSubsidiary”, in which GreatStar Europe AG, a wholly-owned subsidiary of the Company, purchased the relevantassets of JFB AG by way of cash payment at a transaction price of EUR27.9 million and completed the deliveryof the assets within the reporting period. For details, please refer to the Company’s Announcements No. 2021-026
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
and 2021-027 disclosed on March 30, 2021 at http://www.cninfo.com.cn and No. 2021-057 disclosed on June 3,2021 at http://www.cninfo.com.cn.
3. At the Seventh Meeting of the Fifth Session of the Board of Directors held on April 1, 2021, the Companyconsidered and approved the “Proposal on Signing the Investment Letter of Intent”, and at the Tenth Meeting ofthe Fifth Session of the Board of Directors held on June 15, 2021, the Company considered and approved the“Proposal on Changing the Subject of Implementation of the Acquisition”, in which Hongkong GreatStarInternational Co., Ltd., a wholly-owned subsidiary of the Company, purchased 100% stake in Geelong HoldingsLimited by paying cash, and the final price of the transaction was $128.24 million. The delivery of the assets wascompleted during the reporting period. For details, please refer to the Announcement No. 2021-030, 2021-062,2021-065, 2021-068 disclosed athttp://www.cninfo.com.cn.XVII. Significant matters of the Company’s subsidiaries
□ Applicable √ Not Applicable
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Section VII. Changes in Shares and ShareholdersI. Changes in Shares
1. Change of shares
Unit: Shares
| Before this change | Increase or decrease in this change (+, -) | After this change | |||||||
| Quantity | Proportion | Issue of new shares | Share Delivery | Transfer from provident fund | Other | Subtotal | Quantity | Proportion | |
| I. Shares subject to limited sale | 62,718,689 | 5.83% | -1,378,903 | -1,378,903 | 61,339,786 | 5.36% | |||
| 1. State shareholding | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| 2. State-owned legal person shareholding | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| 3. Other domestic shareholdings | 62,718,689 | 5.83% | -1,378,903 | -1,378,903 | 61,339,786 | 5.36% | |||
| Where: shares held by domestic legal persons | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| Domestic natural person shareholding | 62,718,689 | 5.83% | -1,378,903 | -1,378,903 | 61,339,786 | 5.36% | |||
| 4. Foreign shareholding | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| Where: shares held by foreign legal persons | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| Foreign natural person shareholding | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| II. Shares with unlimited sale conditions | 1,012,529,011 | 94.17% | 69,569,695 | 69,569,695 | 1,082,098,706 | 94.64% | |||
| 1. RMB ordinary shares | 1,012,529,011 | 94.17% | 69,569,695 | 69,569,695 | 1,082,098,706 | 94.64% | |||
| 2. Domestic listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| 3. Foreign shares listed abroad | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
| 4. Other | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| III. Total number of shares | 1,075,247,700 | 100.00% | 68,190,792 | 68,190,792 | 1,143,438,492 | 100.00% |
Reasons for share changes
√ Applicable □ Not Applicable
During the reporting period, the total share capital of the Company increased by 68,190,792 shares due to the conversion of the“GreatStar Convertible Bonds”; the change in restricted shares was due to the reduction of shares held by senior management and thedeparture of supervisors upon the expiration of their terms of office.Approval of share changes
□ Applicable √ Not Applicable
Transfer of share changes
□ Applicable √ Not Applicable
Effect of share changes on financial indicators such as basic and diluted earnings per share and net assets per share attributable toordinary shareholders of the Company for the latest year and the latest period
□ Applicable √ Not Applicable
Other content that the company considers necessary or that the securities regulator requires to be disclosed
□ Applicable √ Not Applicable
2. Change of Restricted Shares
√ Applicable □ Not Applicable
Unit: Shares
| Shareholder Name | Number of restricted shares at the beginning of the period | Increase in the number of restricted shares during the period | Number of shares released from restricted sale during the period | Number of restricted shares at the end of the period | Reason for Restricted Sale | Release Date |
| Yu Wentian | 548,610 | 0 | 548,610 | 0 | Term of office expires | 2021-03-01 |
| Wang Weiyi | 771,525 | 0 | 192,881 | 578,644 | Executive lock-up shares | 2021-01-01 |
| Wang Xie | 760,200 | 0 | 190,050 | 570,150 | Executive lock-up shares | 2021-01-01 |
| Li Zheng | 676,470 | 0 | 169,118 | 507,352 | Executive lock-up shares | 2021-01-01 |
| Li Feng | 812,977 | 0 | 203,244 | 609,733 | Executive lock-up shares | 2021-01-01 |
| Chi Xiaoheng | 622,462 | 0 | 75,000 | 547,462 | Executive lock-up shares | 2021-01-01 |
| Total | 4,192,244 | 0 | 1,378,903 | 2,813,341 | -- | -- |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
II. Securities Issuance and Listing
1. Securities issuance (excluding preferred shares) during the reporting period
□ Applicable √ Not Applicable
2. Description of changes in the total number of shares and shareholder structure of the company, andchanges in the structure of the company’s assets and liabilities
√ Applicable □ Not Applicable
On January 4, 2021, the “GreatStar Convertible Bonds” entered into the conversion period, and thebondholders implemented the conversion, resulting in a change in the total share capital of theCompany. As the “GreatStar Convertible Bonds” met the conditional redemption clause, the Board ofDirectors of the Company decided to exercise the redemption right and the “GreatStar ConvertibleBonds” ceased trading and conversion on February 24, 2021 and was delisted from Shenzhen StockExchange from March 5, 2021. The total share capital of the Company increased by 68,190,792shares as a result of the conversion of the “GreatStar Convertible Bonds”, and the total share capitalof the Company increased to 1,143,438,492 shares.
3. Status of existing internal employee shares
□ Applicable √ Not Applicable
III. Shareholders and Actual Controllers
1. Number of shareholders and shareholdings of the Company
Unit: Shares
| Total number of ordinary shareholders at the end of the reporting period | 23,535 | Total number of ordinary shareholders at the end of the previous month before the date of disclosure of the annual report | 70,877 | Total number of preferred shareholders whose voting rights were restored at the end of the reporting period (if any) (See Note 8) | 0 | Total number of preferred shareholders whose voting rights were restored at the end of the previous month prior to the date of disclosure of the annual report, if any (see Note 8) | 0 | ||||||
| Shareholders holding more than 5% or the top 10 shareholders’ shareholdings | |||||||||||||
| Shareholder Name | Nature of | Sharehold | Number | Increase | Number | Number | Pledged, tagged or frozen | ||||||
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Shareholder | ing ratio | of shares held at the end of the reporting period | or decrease in the reporting period | of shares held with limited selling conditions | of shares held under unlimited sale conditions | Share Status | Quantity | |
| GreatStar Holding Group Co., Ltd. | Domestic non-state legal person | 40.56% | 463,739,864 | 0.00 | 0 | 463,739,864 | ||
| Hong Kong Securities Clearing Company Limited | Offshore legal entity | 6.89% | 78,770,242 | 45755281 | 0 | 78,770,242 | ||
| Qiu Jianping | Domestic natural persons | 4.01% | 45,817,500 | -15066800 | 45,663,225 | 154,275 | ||
| China Merchants Bank Co., Ltd - Ruiyuan Growth Value Hybrid Securities Investment Fund | Other | 2.53% | 28,900,546 | 10669061 | 0 | 28,900,546 | ||
| Industrial and Commercial Bank of China - Guangfa Stable Growth Securities Investment Fund | Other | 1.92% | 22,000,000 | 22000000 | 0 | 22,000,000 | ||
| China Merchants Bank Corporation - BOCOM Schroder New Growth Hybrid Securities Investment Fund | Other | 1.70% | 19,417,764 | 19417764 | 0 | 19,417,764 | ||
| Monetary Authority of Macau - Own Funds | Offshore legal entity | 1.38% | 15,743,339 | 14835239 | 0 | 15,743,339 | ||
| China Construction Bank Corporation - BOCOM Schroder Economic New Dynamic Hybrid Securities | Other | 1.25% | 14,303,099 | 1195059 | 0 | 14,303,099 |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| Investment Fund | ||||||||
| Agricultural Bank of China Limited - BOCOM Schroder Selection Hybrid Securities Investment Fund | Other | 1.24% | 14,200,799 | 14200799 | 0 | 14,200,799 | ||
| Agricultural Bank of China Limited - Harvest Emerging Industry Equity Fund | Other | 1.16% | 13,260,687 | -2409300 | 0 | 13,260,687 | ||
| Strategic investors or general corporations becoming top 10 shareholders as a result of the placement of new shares (if any) (see Note 3) | None | |||||||
| Description of the above shareholders’ affiliation or concerted action | GreatStar Group Co., Ltd. and Qiu Jianping are related and are parties acting in concert as defined in the “Regulations Governing the Acquisition of Listed Companies”. | |||||||
| Description of the above shareholders involved in proxy/trustee voting rights and abstention from voting rights | None | |||||||
| Special note on the existence of repurchase special accounts among the top 10 shareholders (if any) (See Note 10) | None | |||||||
| Shares held by the top 10 shareholders without selling restrictions | ||||||||
| Shareholder Name | Number of shares held under unlimited sale conditions at the end of the reporting period | Type of shares | ||||||
| Type of shares | Quantity | |||||||
| GreatStar Holding Group Co., Ltd. | 463,739,864 | RMB Ordinary Shares | 463,739,864 | |||||
| Hong Kong Securities Clearing Company Limited | 78,770,242 | RMB Ordinary Shares | 78,770,242 | |||||
| China Merchants Bank Co., Ltd - Ruiyuan Growth Value Hybrid Securities Investment Fund | 28,900,546 | RMB Ordinary Shares | 28,900,546 | |||||
| Industrial and Commercial Bank of China - Guangfa Stable Growth Securities Investment Fund | 22,000,000 | RMB Ordinary Shares | 22,000,000 | |||||
| China Merchants Bank Corporation - | 19,417,764 | RMB Ordinary | 19,417,764 | |||||
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| BOCOM Schroder New Growth Hybrid Securities Investment Fund | Shares | ||
| Monetary Authority of Macau - Own Funds | 15,743,339 | RMB Ordinary Shares | 15,743,339 |
| China Construction Bank Corporation - BOCOM Schroder Economic New Dynamic Hybrid Securities Investment Fund | 14,303,099 | RMB Ordinary Shares | 14,303,099 |
| Agricultural Bank of China Limited - BOCOM Schroder Selection Hybrid Securities Investment Fund | 14,200,799 | RMB Ordinary Shares | 14,200,799 |
| Agricultural Bank of China Limited - Harvest Emerging Industry Equity Fund | 13,260,687 | RMB Ordinary Shares | 13,260,687 |
| National Social Security Fund 106 Portfolio | 12,828,313 | RMB Ordinary Shares | 12,828,313 |
| Description of the relationship or concerted action among the top 10 shareholders with unlimited shares outstanding, and between the top 10 shareholders with unlimited shares outstanding and the top 10 shareholders | GreatStar Group Co., Ltd. and Qiu Jianping are related and are parties acting in concert as defined in the "Measures for the Administration of Takeovers of Listed Companies". | ||
| Description of the participation of the top 10 common shareholders in the financing business (if any) (See Note 4) | None | ||
Whether the top 10 ordinary shareholders and the top 10 shareholders of the Company’s ordinary shares with unlimited sellingconditions entered into agreed repurchase transactions during the reporting period
□ Yes √ No
The top 10 common shareholders and the top 10 shareholders of the Company’s common shares with unlimited selling conditions didnot enter into any agreed repurchase transactions during the reporting period.
2. Company’s controlling shareholders
Nature of controlling shareholders: natural person holdingControlling shareholder type: natural person
| Name of controlling shareholder | Nationality | Whether to obtain the right of abode in other countries or regions |
| Qiu Jianping | China | No |
| Main occupation and position | Chairman of the Board of Directors, Chairman of the Board of Directors of | |
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
| GreatStar Group | |
| Equity interests in other domestic and foreign listed companies held and participated in during the reporting period | Hangcha Holdings Group Co., Ltd., stock code: 603298, stock abbreviation: Hangcha Group, which was listed on the SSE on December 27, 2016, mainly deals with industrial vehicle products such as forklift trucks and intelligent vehicles and major parts kits. Zhejiang Xinchai Co.,Ltd., stock code: 301032, stock abbreviation: Xinchai, which was listed on the Shenzhen Stock Exchange on July 22, 2021, is mainly engaged in the research and development, production and sales of off-road diesel engines and related parts. |
Change in controlling shareholder during the reporting period
□ Applicable √ Not Applicable
There was no change in the controlling shareholder of the Company during the reporting period.
3. The actual controller of the company and his concerted action
Nature of the actual controller: domestic natural personType of beneficial owner: natural person
| Name of the actual controller | Relationship with the beneficial owner | Nationality | Whether to obtain the right of abode in other countries or regions |
| Qiu Jianping | personal | China | No |
| Main occupation and position | Chairman of the Board of Directors, Chairman of the Board of Directors of GreatStar Group | ||
| Domestic and foreign listed companies in which it had a controlling interest in the past 10 years | Mr. Qiu Jianping is the de facto controller of Hangcha Group (stock code: 603298) and Zhejiang Xinchai Co., Ltd. (stock code: 301032). | ||
Change in effective control during the reporting period
□ Applicable √ Not Applicable
There was no change in the effective control of the Company during the reporting period.Block diagram of the ownership and control relationship between the company and the actual controller
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
仇建平：Qiu Jianping仇建平、王玲玲夫妇：Qiu Jianping and Wang Lingling巨星控股集团有限公司：GreatSar Group杭州巨星科技股份有限公司：Hangzhou GreatStar Industrial Co., Ltd.
Control of the company by the beneficial owner through trust or other asset management
□ Applicable √ Not Applicable
4. The number of shares pledged by the controlling shareholder or the largest shareholder of the companyand its concert parties reaches 80% of the number of shares held by the company
□ Applicable √ Not Applicable
5. Other corporate shareholders holding more than 10% of the shares
□ Applicable √ Not Applicable
6. Restrictions on shareholding reduction by controlling shareholders, actual controllers, restructuringparties and other committed subjects
□ Applicable √ Not Applicable
IV. Specific Implementation of Share Repurchase in the Reporting PeriodProgress of implementation of share buyback
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
√ Applicable □ Not Applicable
| Program Disclosure Time | Number of shares to be repurchased | Percentage of total share capital | Amount to be repurchased | Proposed repurchase period | Repurchase Purpose | Number of shares repurchased (shares) | Number of repurchased shares as a percentage of the underlying shares covered by the equity incentive plan (if any) |
| July 06, 2021 | 180000000-360000000 | 2021-7-6 to 2022-7-6 | 40% of the repurchased shares are intended to be used as a source of shares for the employee stock ownership plan or equity incentive plan, and 60% of the repurchased shares are intended to be used for the conversion of corporate bonds issued by the company that can be converted into shares | 6,015,310 |
Progress in the implementation of share repurchase reduction by means of centralized competitive bidding
√ Applicable □ Not Applicable
As of December 31, 2021, the company repurchased 6,015,310 shares of the company through the special securities account forrepurchasing shares by centralized competitive bidding, accounting for 0.5261% of the total share capital of the company, with thehighest transaction price of RMB 32.70 per share and the lowest transaction price of RMB 27.41 per share, and the total amount offunds used was RMB 186,441,914.48 (excluding transaction fees). The source of funds for the share repurchase was the company’sown funds, and the repurchase price did not exceed the upper limit proposed in the repurchase program. The repurchase was incompliance with the requirements of relevant laws and regulations, and was in line with the established share repurchase program.
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
Section VIII Preferred Stock Related Information
□ Applicable √ Not Applicable
The Company did not have any preferred shares during the reporting period.
Section IX Bond Related information
□ Applicable √ Not Applicable
Section XFinancial Reports
1. Audit Report
| Type of audit opinion | Standard unqualified opinion |
| Audit report signing date | April 11, 2022 |
| Name of audit institution | Pan-China Certified Public Accountants (Special General Partnership) |
| Name of certified public accountant | Fei Fanghua, Li Xi |
Text of Audit ReportTo all shareholders of Hangzhou GreatStar Industrial Co., Ltd:
I. Audit OpinionsWe have audited the financial statements of Hangzhou GreatStar Industrial Co.,Ltd.(hereinafter referred to as "GreatStar Industrial"), which comprise the consolidated balancesheet and balance sheet of the parent company as at December 31, 2021, and the consolidatedincome statement, the cash flow statement and the statement of changes on owners’ equity and theincome statement, the cash flow statement and the statement of changes on owners’ equity of theparent company of 2021 and notes to the financial statements.
In our opinion, the attached financial statements are prepared, in all material respects, inaccordance with the Accounting Standards for Business Enterprises and present fairly theconsolidated and parent company financial position as of December 31, 2021, and the consolidatedand parent company results of operations and cash flows for FY 2021 of GreatStar Industrial.
II.Basis for the Audit Opinion
We conducted our audit in accordance with the Auditing Standards for Certified PublicAccountants in China. Our responsibilities under those standards are further described in the“Auditor's Responsibilities for the Audit of the Financial Statements” section of our report.According to the Code of Ethics for Chinese CPA, we are independent of your Company and wehave fulfilled our other ethical responsibilities in accordance with these requirements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion.
II. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the financialstatements of the current period. These matters wereaddressed in the context of our audit of the financial statements as a whole, andin forming ouropinion thereon, and we do not express a separate opinion on these matters.
(I)Revenue recognition
1. Description
Please refer to section V(II).1 and III(XXVI) of the notes to the financial statements for details.
The Company’s operating revenue mainly comes from sales of hand tools, power tools, lasermeasurement, storage, and personal protective equipment (PPE), etc. In 2021, the operating revenue
amounted to RMB 10,919,683,300. As operating revenue is one of the key performance indicatorsof the GreatStar Industrial, there might be inherent risks that the Company’s management (the“Management”) adopts inappropriate revenue recognition to achieve specific goals or expectations,we have identified revenue recognition as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for revenue recognition are as follows:
(1)To obtain understandings of key internal controls related to revenue recognition, assess thedesign of these controls, determine whether they had been executed, and test the effectiveness of theoperation;
(2)To check sale contracts, obtain understandings of main contractual terms or conditions, andassess whether the revenue recognition method was appropriate;
(3)To perform analysis procedure on operating revenue and gross margin by month, product,client, etc., so as to identify whether there are significant or abnormal fluctuations and find out thereason of fluctuations;
(4)To check supporting documents related to revenue recognition by sampling method,including sales contracts, orders, sales invoices, delivery lists, delivery orders, shipping documents,client acceptance receipts, etc. for revenue from domestic sales;to check supporting documentsincluding sales contracts, bills of clearance, waybills, client acceptance receipts, sales invoices, etc.by sampling methodfor revenue from overseas sales;
(5)To perform confirmation procedures on current sales amount by sampling method incombination with confirmation procedures on accounts receivable;
(6)To perform cut-off tests on the operating revenue recognized around the balance sheet date,and assess whether the operating revenue was recognized in the appropriate period; and
(7) To check whether information related to operating revenue had been presentedappropriately in the financial statements.
(II) Impairment of goodwill
1. Description of relevant events
Please refer to section III (XX) and V(I).19 of the notes to the financial statements for details.
As of December 31, 2021, the original book balance of goodwill of GreatStar Industrialamounted to 2,439,941,360.42RMB, with provision for impairment of 134,160,736.56RMB, andthe carrying amount amounted to 2,305,780,623.86RMB.
For asset group or asset group portfolio related to goodwill, if there is objective evidenceindicating impairment loss, the Management will perform impairment test on goodwill togetherwith related asset group or asset group portfolio at the end of each period, and the recoverableamount of related asset group or asset group portfolio is determined based on the estimated presentvalue of future cash flows. Key assumptions adopted in the impairment test include: revenue growthrate in detailed forecast period, growth rate in perpetual forecast period, gross margin, discount rate,etc.
As the amount of goodwill is significant and impairment test involves significant judgment ofthe Management, we have identified impairment of goodwill as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for impairment of goodwill are as follows:
(1)To obtain understandings of key internal controls related to impairment of goodwill, assessthe design of these controls, determine whether they had been executed, and test the effectiveness of
their operation;
(2)To review the present value of future cash flows estimated by the Management in previousyears and the actual operating results, and assess the accuracy of the Management’s historicalestimations;
(3)To obtain understandings of and assess the competency, professional quality and objectivityof external appraisers engaged by the Management;
(4)To assess the reasonableness and consistency of impairment test method adopted by theManagement;
(5)To assess the reasonableness of key assumptions used in impairment test and reviewwhether the relevant assumptions were consistent with overall economic environment, industrycondition, management situation, historical experience, and other assumptions related to thefinancial statements used by the Management;
(6)To test the accuracy, completeness and relativity of data used in the impairment test andreview the internal consistency of related information in the impairment test;
(7)To test whether the calculation of estimated present value of future cash flows was accurate;and
(8)To check whether information related to impairment of goodwill had been presentedappropriately in the financial statements.
IV. Other Information
The Management is responsible for the other information. The other information comprises theinformation included in the Company’s annual report, while excluding the financial statements andour auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement ofthe other information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of the Management and Those Charged with Governance for theFinancial Statements
The Management is responsible for preparing and presenting fairly the financial statements inaccordance with China Accounting Standards for Business Enterprises, as well as designing,implementing and maintaining internal control relevant to the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing matters related to going concern(asapplicable) and using the going concern basis of accounting unless the Management either intendsto liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance of GreatStar(hereinafter referred to as “the governance”) areresponsible for overseeing the Company’s financial reporting process.
VI. CPA’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with China Standards on Auditing will alwaysdetect a material misstatement when it exists. Misstatement can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financial statements.We exercise professional judgment and maintain professional skepticism throughout the auditperformed in accordance with China Standards on Auditing. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whetherdue to fraud or error, design and perform audit procedures responsive to those risks, and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resulting from error, asfraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override ofinternal control;
(2)Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Company’s internal control.
(3)Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the Management.
(4)Conclude on the appropriateness of the Management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists relatedto events or conditions that may cast significant doubt on the Company’s ability to continue as agoing concern. If we conclude that a material uncertainty exists, we are required to draw attention inour auditor’s report to the related disclosures in the financial statements or, if such disclosures areinadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up tothe date of our auditor’s report. However, future events or conditions may cause the Company tocease to continue as a going concern.
(5)Evaluate the overall presentation, structure and content of the financial statements, andwhether the financial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
(6)Obtain sufficient and appropriate audit evidence regarding the financial information of theentities or business activities within the Company to express an opinion on the financial statements.We are responsible for the direction, supervision and performance of the group audit. We remainsole responsibility for our audit opinion.
We communicate with those charged with governance regarding the planned audit scope, timeschedule and significant audit findings, including any deficiencies in internal control of concern thatwe identify during our audit.
We also provide those charged with governance with a statement that we have complied withrelevant ethical requirements regarding independence, and to communicate with them allrelationships and other matters that may reasonably be thought to bear on our independence, andwhere applicable, related safeguards.
From the matters communicated with those charged with governance, we determine thosematters that were of most significance in the audit of the financial statements of the current periodand 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 adverseconsequences of doing so would reasonably be expected to outweigh the public interest benefits ofsuch communication.II.Financial StatementsThe notes to financial statements expressed in Renminbi RMB.
1. Consolidated Balance Sheet
Compiled by: Hangzhou Great Star Industrial Co., Ltd.
December 31, 2021
Unit: Yuan
| Item | December 31, 2021 | December 31, 2020 |
| Current assets: | ||
| Cash and bank balances | 4,033,707,240.16 | 3,750,506,068.39 |
| Settlement funds | ||
| Loans to other banks | ||
| Held-for-trading financial assets | 13,557,757.75 | 63,751,278.55 |
| Derivative financial assets | ||
| Notes receivable | 6,629,914.18 | 11,530,057.49 |
| Accounts receivable | 1,798,265,505.53 | 1,260,096,723.75 |
| Receivables financing | 559,020,827.52 | 378,066,065.73 |
| Prepaid expenses | 77,743,441.90 | 80,008,380.84 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance reserve receivable | ||
| Other receivables | 96,151,003.68 | 58,613,172.02 |
| Including: Interest receivable | ||
| Dividendsreceivable | ||
| Buy-back financial assets | ||
| Inventories | 2,835,777,996.84 | 1,386,320,837.86 |
| Contract assets | ||
| Assets classified as held for sale |
| Non-current assets due within one year | 90,708.80 | 90,583.31 |
| Other current assets | 193,991,198.10 | 146,623,787.19 |
| Total current assets | 9,614,935,594.46 | 7,135,606,955.13 |
| Non-current assets: | ||
| Loans and advances paid | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | 2,721,241.71 | 2,866,819.08 |
| Long-term equity investments | 2,353,942,699.80 | 2,207,878,459.67 |
| Other equity instrument investments | 16,550,000.00 | 16,550,000.00 |
| Other non-current financial assets | ||
| Investment property | 127,058,966.69 | |
| Fixed assets | 1,494,547,487.29 | 1,348,034,595.31 |
| Construction in progress | 113,750,851.49 | 166,268,204.96 |
| Productive biological assets | ||
| Oil & gas assets | ||
| Right-of-use assets | 411,722,761.66 | 269,670,508.77 |
| Intangible assets | 671,293,451.61 | 607,716,594.78 |
| Development expenditures | ||
| Goodwill | 2,305,780,623.86 | 1,825,527,983.56 |
| Long-term prepayments | 26,745,962.25 | 16,407,174.63 |
| Deferred tax assets | 64,333,652.79 | 41,813,418.61 |
| Other non-current assets | 103,771,593.06 | 39,438,331.18 |
| Total non-current assets | 7,692,219,292.21 | 6,542,172,090.55 |
| Total assets | 17,307,154,886.67 | 13,677,779,045.68 |
| Current liabilities: | ||
| Short-term borrowings | 1,806,901,201.39 | 1,015,117,910.75 |
| Central bank loans | ||
| Loans from other banks | ||
| Held-for-trading financial | 978,031.91 |
| liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 51,728,000.00 | 24,913,000.00 |
| Accounts payable | 1,640,430,929.84 | 1,168,327,985.88 |
| Advances received | ||
| Contract liabilities | 91,235,951.19 | 72,490,372.55 |
| Sale of repurchased financial assets | ||
| Absorbing deposit and interbank deposit | ||
| Deposit for agency security transaction | ||
| Deposit for agency securityunderwriting | ||
| Employee compensation payable | 264,073,705.38 | 195,907,997.48 |
| Taxes and rates payable | 170,836,108.02 | 185,995,732.67 |
| Other payables | 676,502,987.21 | 26,425,047.57 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Handling fee and commission payable | ||
| Reinsurance accounts payable | ||
| Liabilities classified as held for sale | ||
| Non-current liabilities due within one year | 358,525,963.69 | 221,714,183.90 |
| Other current liabilities | 2,501,196.81 | |
| Total current liabilities | 5,063,714,075.44 | 2,910,892,230.80 |
| Non-current liabilities: | ||
| Insurance policy reserve | ||
| Long-term borrowings | 1,015,445,732.07 | 509,555,882.91 |
| Bonds payable | 799,729,005.89 | |
| Including: Preferred shares | ||
| Perpetualbonds |
| Lease liabilities | 289,196,511.02 | 246,303,999.08 |
| Long-term payables | 1,499,174.07 | |
| Long-term Employee compensation payable | 20,854,276.60 | 77,924,731.15 |
| Provisions | 4,924,868.93 | 3,550,413.29 |
| Deferred income | 2,802,244.63 | 3,992,738.59 |
| Deferred tax liabilities | 96,927,387.14 | 86,920,686.60 |
| Other non-current liabilities | ||
| Total non-current liabilities | 1,430,151,020.39 | 1,729,476,631.58 |
| Total liabilities | 6,493,865,095.83 | 4,640,368,862.38 |
| Equity: | ||
| Share capital | 1,143,438,492.00 | 1,075,247,700.00 |
| Other equity instruments | 190,509,257.28 | |
| Including: Preferred shares | ||
| Perpetualbonds | ||
| Capital reserve | 2,924,951,844.93 | 2,095,044,541.15 |
| Less: Treasury shares | 186,441,914.48 | 105,492,690.23 |
| Other comprehensive income | -229,774,189.10 | -105,837,346.87 |
| Special reserve | ||
| Surplus reserve | 598,543,176.63 | 521,602,764.46 |
| General risk reserve | ||
| Undistributed profit | 6,348,179,336.72 | 5,155,116,352.49 |
| Total equity attributable to the parent company | 10,598,896,746.70 | 8,826,190,578.28 |
| Non-controlling interest | 214,393,044.14 | 211,219,605.02 |
| Total owners’ equity | 10,813,289,790.84 | 9,037,410,183.30 |
| Total liabilities &owners’equity | 17,307,154,886.67 | 13,677,779,045.68 |
Legal representative:QiuJianping Officer in charge of accounting:NiShuyi Head of accounting department: NiShuyi
2. Parent company balance sheet
Unit: Yuan
| Items | December 31, 2021 | December 31, 2020 |
| Current assets: | ||
| Cash and bank balances | 2,206,647,760.44 | 2,287,675,650.67 |
| Held-for-trading financial assets | 2,805,400.00 | 13,386,400.00 |
| Derivative financial assets | ||
| Notes receivable | 3,817,503.68 | 8,314,207.49 |
| Accounts receivable | 972,916,000.96 | 1,275,860,264.50 |
| Receivables financing | 370,836,450.93 | 368,774,999.78 |
| Prepaid expenses | 15,407,186.40 | 39,010,545.50 |
| Other receivables | 1,458,883,819.83 | 883,363,518.44 |
| Including: Interest receivable | ||
| Dividendsreceivable | ||
| Inventories | 68,823,270.52 | 77,384,999.66 |
| Contract assets | ||
| Assets classified as held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 51,228,927.28 | 65,377,083.73 |
| Total current assets | 5,151,366,320.04 | 5,019,147,669.77 |
| Non-current assets: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 6,509,236,517.72 | 5,155,164,634.30 |
| Other equity instrument investments | 16,550,000.00 | 16,550,000.00 |
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | 148,222,773.14 | 142,635,599.93 |
| Construction in progress | 6,172,215.82 | 5,723,398.50 |
| Productive biological assets | ||
| Oil & gas assets |
| Right-of-use assets | ||
| Intangible assets | 16,166,495.20 | 17,746,992.84 |
| Development expenditures | ||
| Goodwill | ||
| Long-term prepayments | ||
| Deferred tax assets | 12,054,042.27 | 15,288,010.17 |
| Other non-current assets | 5,741,206.20 | 1,957,642.06 |
| Total non-current assets | 6,714,143,250.35 | 5,355,066,277.80 |
| Total assets | 11,865,509,570.39 | 10,374,213,947.57 |
| Current liabilities: | ||
| Short-term borrowings | 1,547,295,724.96 | 960,645,447.14 |
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 389,834,880.42 | 738,095,592.36 |
| Advances received | ||
| Contract liabilities | 46,268,755.74 | 39,453,211.46 |
| Employee compensation payable | 46,155,738.14 | 45,611,342.23 |
| Taxes and rates payable | 76,469,338.83 | 103,261,356.89 |
| Other payables | 585,010,369.48 | 23,933,506.71 |
| Including: Interest payable | ||
| Dividends payable | ||
| Liabilities classified as held for sale | ||
| Non-current liabilities due within one year | 82,994,001.43 | 73,585,483.86 |
| Other current liabilities | 427,742.00 | |
| Total current liabilities | 2,774,456,551.00 | 1,984,585,940.65 |
| Non-current liabilities: | ||
| Long-term borrowings | 391,626,437.89 | 220,836,522.82 |
| Bonds payable | 799,729,005.89 |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term Employee compensation payable | ||
| Provisions | ||
| Deferred income | 1,556,851.32 | 2,377,073.64 |
| Deferred tax liabilities | 1,799,743.40 | 6,363,085.38 |
| Other non-current liabilities | ||
| Total non-current liabilities | 394,983,032.61 | 1,029,305,687.73 |
| Total liabilities | 3,169,439,583.61 | 3,013,891,628.38 |
| Equity: | ||
| Share capital | 1,143,438,492.00 | 1,075,247,700.00 |
| Other equity instruments | 190,509,257.28 | |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 2,930,657,501.76 | 2,103,492,365.12 |
| Less: Treasury shares | 186,441,914.48 | 105,492,690.23 |
| Other comprehensive income | -84,939,637.21 | -27,385,736.04 |
| Special reserve | ||
| Surplus reserve | 594,794,879.72 | 517,854,467.55 |
| Undistributed profit | 4,298,560,664.99 | 3,606,096,955.51 |
| Total owners’equity | 8,696,069,986.78 | 7,360,322,319.19 |
| Total liabilities &owners’equity | 11,865,509,570.39 | 10,374,213,947.57 |
3. Consolidated income statement
Unit: Yuan
| Item | FY 2021 | FY 2020 |
| I. Total operating revenue | 10,919,683,344.37 | 8,544,440,154.30 |
| Including: Operating revenue | 10,919,683,344.37 | 8,544,440,154.30 |
| Interest income | ||
| Premium earned | ||
| Revenue from handling charges and commission | ||
| II. Total operating cost | 9,865,931,262.26 | 7,272,261,104.74 |
| Including: Operating cost | 8,176,123,668.50 | 5,926,765,895.76 |
| Interest expenses | ||
| Handling charges and commission expenditures | ||
| Surrender value | ||
| Net payment of insurance claims | ||
| Net provision of insurance policy reserve | ||
| Premium bonus expenditures | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 36,118,676.84 | 27,268,787.92 |
| Selling expenses | 593,003,103.68 | 458,274,408.65 |
| Administrative expenses | 686,120,731.06 | 500,999,938.00 |
| R&D expenses | 309,763,366.15 | 245,372,069.36 |
| Financial expenses | 64,801,716.03 | 113,580,005.05 |
| Including: Interest expenses | 59,754,089.36 | 69,915,383.28 |
| Interest income | 59,709,415.20 | 58,134,194.43 |
| Add: Other income | 47,550,853.31 | 33,486,910.24 |
| Investment income (losses shall be presented with a “-” sign) | 370,298,858.39 | 296,551,290.93 |
| Including: Investment income from associates and joint ventures | 253,722,685.68 | 260,530,217.44 |
| Gains from derecognition of financial assets at amortized cost | ||
| Gains on foreign exchange (losses shall be presented with a "-" sign) | ||
| Gains on net exposure to hedging risk (losses shall be presented with a "-" sign) | ||
| Gains on changes in fair value (losses shall be presented with a "-" sign) | -23,610,602.75 | 31,920,861.95 |
| Credit impairment loss | -44,330,212.07 | -28,131,844.44 |
| Assets impairment loss | -23,131,165.61 | -93,484,567.00 |
| Gains on asset disposal (losses shall be presented with a "-" sign) | -3,020,089.44 | -300,665.75 |
| III. Operating profit (losses shall be presented with a "-" sign) | 1,377,509,723.94 | 1,512,221,035.49 |
| Add: Non-operating revenue | 87,347,950.40 | 54,877,063.15 |
| Less: Non-operating expenditures | 6,324,391.50 | 2,823,350.71 |
| IV. Profit before tax (total loss shall be presented with a "-" sign) | 1,458,533,282.84 | 1,564,274,747.93 |
| Less: Income tax | 161,218,083.23 | 199,780,159.49 |
| V. Net profit (net loss shall be presented with a "-" sign) | 1,297,315,199.61 | 1,364,494,588.44 |
| (I) Categorized by the continuity of operations | ||
| 1. Net profit from continuing operations (net loss shall be presented with a "-" sign) | 1,297,315,199.61 | 1,364,494,588.44 |
| 2. Net profit from discontinued operations (net loss shall be presented with a "-" sign) | ||
| (II) Categorized by the portion of equity ownership | ||
| 1. Net profit attributable to owners of parent company (net loss shall be presented with a "-" sign) | 1,270,003,396.40 | 1,350,132,516.91 |
| 2. Net profit attributable to non- controlling shareholders (net loss shall be presented with a "-" sign) | 27,311,803.21 | 14,362,071.53 |
| VI. Other comprehensive income after tax | -124,287,257.00 | -250,850,396.50 |
| Items attributable to the owners of the parent company | -123,936,842.23 | -250,842,746.43 |
| (I) Not to be reclassifiedsubsequently to profit or loss | 71,842,154.00 | -81,601,512.40 |
| 1. Changes in remeasurement on the net defined benefit plan | 71,842,154.00 | -35,338,213.90 |
| 2. Items under equity method that will not be reclassified to profit or loss | ||
| 3. Changes in fair value of other equity instrument investments | 888,118.45 | |
| 4. Changes in fair value of own credit risk | ||
| 5. Others | -47,151,416.95 | |
| (II) To be reclassified subsequently to profit or loss | -195,778,996.23 | -169,241,234.03 |
| 1. Items under equity method that may be reclassified to profit or loss | -57,553,901.17 | -24,606,788.10 |
| 2. Changes in fair value of other debt investments | ||
| 3. Profit or loss from reclassification of financial assets into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedging reserve | ||
| 6. Translation reserve | -138,225,095.06 | -144,634,445.93 |
| 7. Others | ||
| Items attributable to non-controlling shareholders | -350,414.77 | -7,650.07 |
| VII. Total comprehensive income | 1,173,027,942.61 | 1,113,644,191.94 |
| Items attributable to the owners of the parent company | 1,146,066,554.17 | 1,099,289,770.48 |
| Items attributable to non-controlling shareholders | 26,961,388.44 | 14,354,421.46 |
| VIII. Earnings per share (EPS): | ||
| (I) Basic EPS (yuan per share) | 1.13 | 1.27 |
| (II) Diluted EPS (yuan per share) | 1.13 | 1.25 |
For the business combination under common control in the current period, the combined party achieved net profit XXRMB, andXXRMB last period
Legal representative: Qiu Jianping Officer in charge of accounting: Ni ShuyiHead of accounting department:Ni Shuyi
4. Parent company income statement
Unit: Yuan
| Item | FY 2021 | FY 2020 |
| I. Operating revenue | 5,221,628,054.56 | 5,365,589,947.72 |
| Less: Operating cost | 4,191,586,370.63 | 4,064,180,496.50 |
| Taxes and surcharges | 3,914,655.88 | 4,142,069.22 |
| Selling expenses | 148,931,778.67 | 138,139,974.93 |
| Administrative expenses | 149,112,457.48 | 121,245,790.31 |
| R&D expenses | 179,141,639.18 | 178,566,920.53 |
| Financial expenses | 14,697,466.10 | 172,866,787.25 |
| Including: Interest expenses | 34,320,239.29 | 58,234,894.08 |
| Interest income | 60,903,121.60 | 48,047,881.09 |
| Add: Other income | 30,673,586.63 | 11,142,990.59 |
| Investment income (losses shall be presented with a "-" sign) | 328,237,087.74 | 356,483,772.96 |
| Including: Investment income from associates and joint ventures | 254,321,468.97 | 260,562,082.75 |
| Gains fromderecognition of financial assets at amortized cost (losses shall be presented with a "-" sign) | ||
| Gains on net exposure to hedging risk (losses shall be presented with a "-" sign) | ||
| Gains on changes in fair value (losses shall be presented with a "-" sign) | -10,581,000.00 | 11,254,759.69 |
| Credit impairment loss | -14,920,249.84 | -43,237,697.59 |
| Assets impairment loss | -458,846.42 | -73,695.67 |
| Gains on asset disposal (losses shall be presented with a "-" sign) | 74,881.50 | |
| II. Operating profit (losses shall be presented with a "-" sign) | 867,269,146.23 | 1,022,018,038.96 |
| Add: Non-operating revenue | 381,632.32 | 380,675.34 |
| Less: Non-operating expenditures | 714,318.83 | 1,334,925.87 |
| III. Profit before tax (total loss shall be presented with a "-" sign) | 866,936,459.72 | 1,021,063,788.43 |
| Less: Income tax | 97,532,338.07 | 103,604,790.84 |
| IV. Net profit (net loss shall be presented with a "-" sign) | 769,404,121.65 | 917,458,997.59 |
| (I) Net profit from continuing operations (net loss shall be presented with a "-" sign) | 769,404,121.65 | 917,458,997.59 |
| (II) Net profit from discontinued operations (net loss shall be presented with a "-" sign) | ||
| V. Other comprehensive income after tax | -57,553,901.17 | -70,870,086.60 |
| (I) Not to be reclassified subsequently to profit or loss | -46,263,298.50 | |
| 1. Changes inremeasurement on the net defined benefit plan | ||
| 2. Items under equity method that will not be reclassified to profit or loss | ||
| 3. Changes in fair value of other equity instrument investments | 888,118.45 | |
| 4. Changes in fair value of own credit risk | ||
| 5. Others | -47,151,416.95 | |
| (II) To be reclassified subsequently to profit or loss | -57,553,901.17 | -24,606,788.10 |
| 1. Items under equitymethod that may be reclassified to profit or loss | -57,553,901.17 | -24,606,788.10 |
| 2. Changes in fair value of other debt investments | ||
| 3. Profit or loss from reclassification of financial assets into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedging reserve | ||
| 6. Translation reserve | ||
| 7. Others | ||
| VI. Total comprehensive income | 711,850,220.48 | 846,588,910.99 |
| VII. Earnings per share (EPS): |
| (I) Basic EPS (yuan per share) | ||
| (II) Diluted EPS (yuan per share) |
5.Consolidated cash flow statement
Unit: Yuan
| Item | FY 2021 | FY 2020 |
| I. Cash flows from operating activities: | ||
| Cash receipts from sales of goods or rendering of services | 10,523,385,725.14 | 8,062,725,580.89 |
| Net increase of client deposit and interbank deposit | ||
| Net increase of central bank loans | ||
| Net increase of loans from other financial institutions | ||
| Cash receipts from original insurance contract premium | ||
| Net cash receipts from reinsurance | ||
| Net increase of policy-holder deposit and investment | ||
| Cash receipts from interest, handling charges and commission | ||
| Net increase of loans from others | ||
| Net increase of repurchase | ||
| Net cash receipts from agency security transaction | ||
| Receipts of tax refund | 670,357,690.68 | 561,244,609.68 |
| Other cash receipts related to operating activities | 160,238,749.92 | 109,278,105.56 |
| Subtotal of cash inflows from operating activities | 11,353,982,165.74 | 8,733,248,296.13 |
| Cash payments for goods purchased and services received | 8,138,089,857.73 | 5,804,488,157.96 |
| Net increase of loans and advances to clients | ||
| Net increase of central bank deposit and interbank deposit |
| Cash payments for insuranceindemnities of original insurance contracts | ||
| Net increase of loans to others | ||
| Cash payments for interest, handling charges and commission | ||
| Cash payments for policy bonus | ||
| Cash paid to employees or payments on behalf of employees | 1,806,978,106.79 | 1,260,836,147.62 |
| Cash payments for taxes and rates | 365,159,229.48 | 250,159,571.54 |
| Other cash payments related to operating activities | 1,025,122,802.07 | 646,613,793.77 |
| Subtotal of cash outflows from operating activities | 11,335,349,996.07 | 7,962,097,670.89 |
| Net cash flows from operating activities | 18,632,169.67 | 771,150,625.24 |
| II. Cash flows from investing activities: | ||
| Cash receipts from withdrawal of investments | 399,043,604.99 | 289,698,875.26 |
| Cash receipts from investment income | 121,150,687.38 | 55,754,289.66 |
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | 50,825,512.05 | 3,231,084.97 |
| Net cash receipts from the disposal of subsidiaries & other business entities | ||
| Other cash receipts related to investing activities | 5,945,450.31 | 22,822,339.65 |
| Subtotal of cash inflows from investing activities | 576,965,254.73 | 371,506,589.54 |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 541,990,133.84 | 624,730,486.29 |
| Cash payments for investments | 321,320,000.00 | 80,000,000.00 |
| Net increase of pledged borrowings | ||
| Net cash payments for the acquisition of subsidiaries & other business entities | 923,935,753.71 | 39,098,825.84 |
| Other cash payments related toinvesting activities | 2,788,158.98 | 26,271,291.33 |
| Subtotal of cash outflows from investing activities | 1,790,034,046.53 | 770,100,603.46 |
| Net cash flows from investing activities | -1,213,068,791.80 | -398,594,013.92 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | ||
| Including: Cash received by subsidiaries from non-controlling shareholders as investments | ||
| Cash receipts from borrowings | 3,832,766,206.58 | 3,574,198,154.01 |
| Other cash receipts related to financing activities | 583,000,000.00 | 315,512,811.43 |
| Subtotal of cash inflows from financing activities | 4,415,766,206.58 | 3,889,710,965.44 |
| Cash payments for the repayment of borrowings | 2,540,690,729.79 | 2,639,719,781.54 |
| Cash payments for distribution of dividends or profits and for interest expenses | 53,626,407.90 | 44,740,777.99 |
| Including: Cash paid by subsidiaries to non-controlling shareholders as dividend or profit | 755,470.43 | 1,471,395.20 |
| Other cash payments related to financing activities | 290,674,869.30 | 46,125,271.70 |
| Subtotal of cash outflows from financing activities | 2,884,992,006.99 | 2,730,585,831.23 |
| Net cash flows from financing activities | 1,530,774,199.59 | 1,159,125,134.21 |
| IV. Effect of foreign exchange rate changes on cash & cash equivalents | -65,414,554.36 | 71,124,025.21 |
| V. Net increase in cash and cash equivalents | 270,923,023.10 | 1,602,805,770.74 |
| Add: Opening balance of cash and cash equivalents | 3,730,263,218.08 | 2,127,457,447.34 |
| VI. Closing balance of cash and cash equivalents | 4,001,186,241.18 | 3,730,263,218.08 |
6.Parent company cash flow statement
Unit: Yuan
| Item | FY 2021 | FY 2020 |
| I. Cash flows from operating activities: | ||
| Cash receipts from sale of goods and rendering of services | 5,540,994,419.37 | 4,634,619,462.59 |
| Receipts of tax refund | 539,325,024.06 | 500,601,208.07 |
| Other cash receipts related to operating activities | 105,584,100.91 | 353,529,045.37 |
| Subtotal of cash inflows from operating activities | 6,185,903,544.34 | 5,488,749,716.03 |
| Cash payments for goods purchased and services received | 4,918,942,931.09 | 4,576,674,238.66 |
| Cash paid to employees or payments on behalf of employees | 287,460,870.76 | 234,331,254.73 |
| Cash payments for taxes and rates | 130,907,197.94 | 97,173,133.15 |
| Other cash payments related to operating activities | 329,723,900.32 | 274,792,875.73 |
| Subtotal of cash outflows from operating activities | 5,667,034,900.11 | 5,182,971,502.27 |
| Net cash flows from operating activities | 518,868,644.23 | 305,778,213.76 |
| II. Cash flows from investing activities: | ||
| Cash receipts from withdrawal of investments | 53,885,922.93 | 177,154,902.28 |
| Cash receipts from investment income | 77,550,531.07 | 115,654,906.38 |
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | 256,690.72 | 18,031.00 |
| Net cash receipts from the disposal of subsidiaries & other business entities | ||
| Other cash receipts related to investing activities | 12,022,084.95 | 208,061,898.99 |
| Subtotal of cash inflows from investing activities | 143,715,229.67 | 500,889,738.65 |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 25,307,503.53 | 13,598,543.48 |
| Cash payments for investments | 1,207,408,860.00 | 230,099,280.00 |
| Net cash payments for the acquisition of subsidiaries & other business entities | ||
| Other cash payments related to investing activities | 616,537,578.64 | 458,358,211.73 |
| Subtotal of cash outflows from investing activities | 1,849,253,942.17 | 702,056,035.21 |
| Net cash flows from investing activities | -1,705,538,712.50 | -201,166,296.56 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | ||
| Cash receipts from borrowings | 2,985,778,938.56 | 3,471,565,788.00 |
| Other cash receipts related to financing activities | 583,000,000.00 | |
| Subtotal of cash inflows from financing activities | 3,568,778,938.56 | 3,471,565,788.00 |
| Cash payments for the repayment of borrowings | 2,197,497,826.00 | 2,453,724,990.00 |
| Cash payments for distribution of dividends or profits and for interest expenses | 29,988,023.43 | 33,751,970.50 |
| Other cash payments related to financing activities | 216,024,031.31 | 14,277,150.48 |
| Subtotal of cash outflows from financing activities | 2,443,509,880.74 | 2,501,754,110.98 |
| Net cash flows from financing activities | 1,125,269,057.82 | 969,811,677.02 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | -20,904,019.78 | 40,696,283.50 |
| V. Net increase in cash and cash equivalents | -82,305,030.23 | 1,115,119,877.72 |
| Add: Opening balance of cash and cash equivalents | 2,287,645,650.67 | 1,172,525,772.95 |
| VI. Closing balance of cash and cash equivalents | 2,205,340,620.44 | 2,287,645,650.67 |
7.Consolidated statement of changes in owners' equity
Current Period
Unit: Yuan
| Items | FY 2021 | ||||||||||||||
| Equity attributable to parent company | Non- control linginterest | Total equity | |||||||||||||
| Share Capital | Other equity instruments | Capital reserve | Less: Treasury shares | Othercomprehensive income | Special reserve | Surplus reserve | Genera l risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bond s | Other s | |||||||||||||
| I. Balance at the end of prior year | 1,075,247,700.00 | 190,509,257.28 | 2,095,044,541.15 | 105,492,690.23 | -105,837,346.87 | 521,602,764.46 | 5,155,116,352.49 | 8,826,190,578.28 | 211,219,605.02 | 9,037,410,183.30 | |||||
| Add: Cumulative changes of accounting policies | |||||||||||||||
| Errorcorrection of prior period | |||||||||||||||
| Business combination undercommon control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the beginning of current year | 1,075,247,700.00 | 190,509,257.28 | 2,095,044,541.15 | 105,492,690.23 | -105,837,346.87 | 521,602,764.46 | 5,155,116,352.49 | 8,826,190,578.28 | 211,219,605.02 | 9,037,410,183.30 | |||||
| III. Current period increase (decrease shall be presented with a "-" sign) | 68,190,792.00 | -190,509,257.28 | 829,907,303.78 | 80,949,224.25 | -123,936,842.23 | 76,940,412.17 | 1,193,062,984.23 | 1,772,706,168.42 | 3,173,439.12 | 1,775,879,607.54 | |||||
| (I) Total comprehensive income | -123,936,842.23 | 1,270,003,396.40 | 1,146,066,554.17 | 26,961,388.44 | 1,173,027,942.61 | ||||||||||
| (II) Capital contributed or withdrawn by owners | 68,190,792.00 | -190,509,257.28 | 818,159,478.29 | -105,492,690.23 | 801,333,703.24 | 801,333,703.24 | |||||||||
| 1. Ordinary shares contributed by owners | |||||||||||||||
| 2. Capital contributed by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payment included in equity | |||||||||||||||
| 4．Others | 68,190,792.00 | -190,509,257.28 | 818,159,478.29 | -105,492,690.23 | 801,333,703.24 | 801,333,703.24 |
| (III) Profit distribution | 76,940,412.17 | -76,940,412.17 | -755,470.43 | -755,470.43 | |||||||||||
| 1. Appropriation of surplus reserve | 76,940,412.17 | -76,940,412.17 | |||||||||||||
| 2. Appropriation of general risk reserve | |||||||||||||||
| 3. Appropriation of profit to owners | -755,470.43 | -755,470.43 | |||||||||||||
| 4．Others | |||||||||||||||
| (IV) Internal carry-over within equity | |||||||||||||||
| 1. Transfer of capital reserve to capital | |||||||||||||||
| 2. Transfer of surplus reserve to capital | |||||||||||||||
| 3. Surplus reserve to cover losses | |||||||||||||||
| 4. Changes in defined benefit plan carried over to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried |
| over to retained earnings | |||||||||||||||
| 6．others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Appropriation of current period | |||||||||||||||
| 2. Application of current period | |||||||||||||||
| (VI) others | 11,747,825.49 | 186,441,914.48 | -174,694,088.99 | -23,032,478.89 | -197,726,567.88 | ||||||||||
| IV. Balance at the end of current period | 1,143,438,492.00 | 2,924,951,844.93 | 186,441,914.48 | -229,774,189.10 | 598,543,176.63 | 6,348,179,336.72 | 10,598,896,746.70 | 214,393,044.14 | 10,813,289,790.84 |
Previous period
Unit: Yuan
| Items | FY 2021 | ||||||||||||||
| Equity attributable to parent company | Non- control linginterest | Total equity | |||||||||||||
| Share Capital | Other equity instruments | Capital reserve | Less: Treasury shares | Othercomprehensive income | Special reserve | Surplus reserve | Genera l risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bond s | Other s | |||||||||||||
| I. Balance at the end of prior year | 1,075,247,700.00 | 2,036,394,272.83 | 105,492,690.23 | 145,005,399.56 | 429,856,864.70 | 3,849,578,318.39 | 7,430,589,865.25 | 185,843,932.95 | 7,616,433,798.20 | ||||||
| Add: Cumulative changes of accounting policies | |||||||||||||||
| Errorcorrection of prior period | |||||||||||||||
| Business combination undercommon control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the beginning of current year | 1,075,247,700.00 | 2,036,394,272.83 | 105,492,690.23 | 145,005,399.56 | 429,856,864.70 | 3,849,578,318.39 | 7,430,589,865.25 | 185,843,932.95 | 7,616,433,798.20 | ||||||
| III. Current period increase (decrease shall be presented with a "-" sign) | 190,509,257.28 | 58,650,268.32 | -250,842,746.43 | 91,745,899.76 | 1,305,538,034.10 | 1,395,600,713.03 | 25,375,672.07 | 1,420,976,385.10 | |||||||
| (I) Total comprehensive income | -203,691,329.48 | 1,350,132,516.91 | 1,146,441,187.43 | 14,354,421.46 | 1,160,795,608.89 | ||||||||||
| (II) Capital contributed or withdrawn | 190,509,257.28 | 190,509,257.28 | 190,509,257.28 |
| by owners | |||||||||||||||
| 1. Ordinary shares contributed by owners | |||||||||||||||
| 2.Capital contributed by holders of other equity instruments | 190,509,257.28 | 190,509,257.28 | 190,509,257.28 | ||||||||||||
| 3.Amount of share-based payment included in equity | |||||||||||||||
| 4．Others | |||||||||||||||
| (III) Profit distribution | 91,745,899.76 | -91,745,899.76 | -1,471,395.20 | -1,471,395.20 | |||||||||||
| 1.Appropriation of surplus reserve | 91,745,899.76 | -91,745,899.76 | |||||||||||||
| 2.Appropriation of general risk reserve | |||||||||||||||
| 3.Appropriation of profit to owners | -1,471,395.20 | -1,471,395.20 | |||||||||||||
| 4．Others | |||||||||||||||
| (IV) Internal carry-over | -47,151,416. | 47,151,416.9 |
| within equity | 95 | 5 | |||||||||||||
| 1. Transfer of capital reserve to capital | |||||||||||||||
| 2. Transfer of surplus reserve to capital | |||||||||||||||
| 3. Surplus reserve to cover losses | |||||||||||||||
| 4. Changes in defined benefit plan carried over to retained earnings | |||||||||||||||
| 5.Other comprehensive income carried overto retained earnings | -47,151,416.95 | 47,151,416.95 | |||||||||||||
| 6．others | |||||||||||||||
| (V)Special reserve | |||||||||||||||
| 1. Appropriation of current period | |||||||||||||||
| 2. Application of current period | |||||||||||||||
| (VI) others | 58,650,268.32 | 58,650,268.32 | 12,492,645.81 | 71,142,914.13 |
| IV. Balance at the end of current period | 1,075,247,700.00 | 190,509,257.28 | 2,095,044,541.15 | 105,492,690.23 | -105,837,346.87 | 521,602,764.46 | 5,155,116,352.49 | 8,826,190,578.28 | 211,219,605.02 | 9,037,410,183.30 |
8. Parent company statement of changes in owners' equity
Current Period
Unit: Yuan
| Items | FY 2021 | |||||||||||
| Share Capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Others | Total equity | |||
| Preferred Shares | Perpetual bonds | Others | ||||||||||
| I. Balance at the end of prior year | 1,075,247,700.00 | 190,509,257.28 | 2,103,492,365.12 | 105,492,690.23 | -27,385,736.04 | 517,854,467.55 | 3,606,096,955.51 | 7,360,322,319.19 | ||||
| Add:Cumulative changes of accounting policies | ||||||||||||
| Error correction of prior period | ||||||||||||
| Others | ||||||||||||
| II. Balance at the beginning of current year | 1,075,247,700.00 | 190,509,257.28 | 2,103,492,365.12 | 105,492,690.23 | -27,385,736.04 | 517,854,467.55 | 3,606,096,955.51 | 7,360,322,319.19 | ||||
| III. Current period increase (or less: decrease) | 68,190,792.00 | -190,509,257.28 | 827,165,136.64 | 80,949,224.25 | -57,553,901.17 | 76,940,412.17 | 692,463,709.48 | 1,335,747,667.59 | ||||
| (I) Total comprehensive income | -57,553,901.17 | 769,404,121.65 | 711,850,220.48 | |||||||||
| (II) Capital contributed or withdrawn by owners | 68,190,792.00 | -190,509,257.28 | 818,159,478.29 | -105,492,690.23 | 801,333,703.24 | |||||||
| 1. Ordinary shares contributed by owners | ||||||||||||
| 2.Capital contributed by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payment included in equity | ||||||||||||
| 4．Others | 68,190,792.00 | -190,509,257.28 | 818,159,478.29 | -105,492,690.23 | 801,333,703.24 | |||||||
| (III) Profit distribution | 76,940,412.17 | -76,940,412.17 | ||||||||||
| 1. Appropriation of surplus reserve | 76,940,412.17 | -76,940,412.17 | ||||||||||
| 2. Appropriation of profit to owners | ||||||||||||
| 3．Others | ||||||||||||
| (IV) Internal carry-over within equity | ||||||||||||
| 1. Transfer of |
| capital reserve to capital | ||||||||||||
| 2. Transfer of surplus reserve to capital | ||||||||||||
| 3. Surplus reserve to cover losses | ||||||||||||
| 4. Changes in defined benefit plan carried over to retained earnings | ||||||||||||
| 5. Other comprehensive income carried over to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1．Appropriation of current period | ||||||||||||
| 2．Application of current period | ||||||||||||
| (VI) Others | 9,005,658.35 | 186,441,914.48 | -177,436,256.13 | |||||||||
| IV. Balanceat the end of currentperiod | 1,143,438,492.00 | 2,930,657,501.76 | 186,441,914.48 | -84,939,637.21 | 594,794,879.72 | 4,298,560,664.99 | 8,696,069,986.78 |
Previous amount
Unit: Yuan
| Items | Year 2019 | |||||||||
| Share Capital | Otherequity instruments | Capital reserve | Less: Treasury shares | Other comprehensive | Special reserve | Surplus reserve | Undistributed | Others | Total equity | |
| Income | profit | |
Preferredshares
| Preferred shares | Perpetualbonds | Others | ||||||||||
| I. Balance at the end of prior year | 1,075,247,700.00 | 2,042,882,286.04 | 105,492,690.23 | 43,484,350.56 | 426,108,567.79 | 2,733,232,440.73 | 6,215,462,654.89 | |||||
| Add:Cumulative changes of accounting policies | ||||||||||||
| Error correction of prior period | ||||||||||||
| Others | ||||||||||||
| II. Balance at the beginning of current year | 1,075,247,700.00 | 2,042,882,286.04 | 105,492,690.23 | 43,484,350.56 | 426,108,567.79 | 2,733,232,440.73 | 6,215,462,654.89 | |||||
| III. Current period increase (or less: decrease) | 190,509,257.28 | 60,610,079.08 | -70,870,086.60 | 91,745,899.76 | 872,864,514.78 | 1,144,859,664.30 | ||||||
| (I) Total comprehensive income | -23,718,669.65 | 917,458,997.59 | 893,740,327.94 | |||||||||
| (II) Capital contributed or withdrawn by owners | 190,509,257.28 | 190,509,257.28 | ||||||||||
| 1. Ordinary shares |
| contributed by owners | ||||||||||||
| 2.Capital contributed by holders of other equity instruments | 190,509,257.28 | 190,509,257.28 | ||||||||||
| 3. Amount of share-based payment included in equity | ||||||||||||
| 4．Others | ||||||||||||
| (III) Profit distribution | 91,745,899.76 | -91,745,899.76 | ||||||||||
| 1.Appropriation of surplus reserve | 91,745,899.76 | -91,745,899.76 | ||||||||||
| 2.Appropriation of profit to owners | ||||||||||||
| 3．Others | ||||||||||||
| (IV)Internalcarry-over within equity | -47,151,416.95 | 47,151,416.95 | ||||||||||
| 1. Transfer of capital reserve to capital | ||||||||||||
| 2. Transfer of surplus reserve to capital | ||||||||||||
| 3. Surplus reserve to cover losses |
| 4. Changes in defined benefit plan carried over to retained earnings | ||||||||||||
| 5. Other comprehensive income carried over to retained earnings | -47,151,416.95 | 47,151,416.95 | ||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1．Appropriation of current period | ||||||||||||
| 2．Application of current period | ||||||||||||
| (VI) Others | 60,610,079.08 | 60,610,079.08 | ||||||||||
| IV. Balanceat the end of currentperiod | 1,075,247,700.00 | 190,509,257.28 | 2,103,492,365.12 | 105,492,690.23 | -27,385,736.04 | 517,854,467.55 | 3,606,096,955.51 | 7,360,322,319.19 |
III.Company profile
Hangzhou GreatStar Industrial Co., Ltd. (the “Company”), a limited liability company by shares, wastransformed from Hangzhou Great Star Industrial Co., Ltd. It was jointly invested by natural persons 仇建平(Qiu Jianping), 王玲玲 (Wang Lingling), 李政 (Li Zheng),王伟毅 (Wang Weiyi) and 王暋 (Wang Min). Itwas registered at Hangzhou Administration for Industry and Commerce on August 9, 2001. After several equitychanges, taking March 31, 2008 as benchmark date, the Company was transformed into a limited liability byshares on an integral basis and was registered at Hangzhou Administration for Industry and Commerce on July 2,2008. Headquartered in Hangzhou, Zhejiang Province, the Company currently holds a business license withunified social credit code of91330000731506099D. As of December 31, 2021, the Company had registered capitalof RMB 1,143,438,492.00, with total share of 1,143,438,492 shares (each with par value of one(1) RMB), ofwhich, 61,339,786 shares are restricted outstanding A shares, and 1,082,098,706 shares are unrestrictedoutstanding A shares. The Company’s shares were listed at Shenzhen Stock Exchange on July 13, 2010.
The Company belongs to the tool hardware industry. The main business activities are R&D, production and
sales of hand tools and power tools, laser measurement, storage and PPE. The Company’s main products are handtools and power tools, laser measurement, storage and PPE.The financial statements were approved and authorized for issue by the seventeenth meeting of the fifthsession of the Board of Directors dated April 11, 2022.The Company has brought 89 subsidiaries including Changzhou Huada Kejie Opto-electro Instrument Co.,Ltd., Zhejiang Great Star Tools Co., Ltd., Hangzhou Great Star Tools Co.,Ltd., Prim’ Tools Limited, HongKong Great Star International Co., Ltd., Great Star Tools USA, Inc, Arrow Fastener Co., LLC, Great StarIndustrial USA,LLC, Greatstar Europe AG, Lista Holding AG, BeA GmbH and Zhongshan Geelon IndustrialCo.,Ltd. into the consolidation scope. Please refer to section XX (IX) Interest in other entities of notes to financialstatements for details.
IV. Preparation basis of the financial statements
1.Preparation basis
The financial statements have been prepared on the basis of going concern.
2.Assessment of the ability to continue as a going concern
The Company has no events or conditions that may cast significant doubts upon the Company’s ability to continueas a going concern within the 12 months after the balance sheet date.V. Significant accounting policies and estimatesDetailed significant accounting policies and estimates notes:
The Company has set up accounting policies and estimates on transactions or events such as impairment offinancial instruments, depreciation of fixed assets, depreciation of right-of-use assets, amortization of intangibleassets, and revenue recognition, etc. based on the Company’s actual production and operation features.
1. Statement of compliance
The financial statements have been prepared in accordance with the requirements of China Accounting Standardsfor Business Enterprises (CASBEs), and present truly and completely the financial position, results of operationsand cash flows of the Company.
2. Accounting period
The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.
3. Operating cycle
The Company has a relatively short operating cycle for its business, an asset or a liability is classified as current ifit is expected to be realized or due within 12 months.
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi (RMB) , while thefunctional currency of subsidiaries engaged in overseas operations including Hong Kong Great Star InternationalCo., Ltd., Great Star Tools USA, Inc and GreatStar Europe AG is the currency of the primary economicenvironment in which they operate.
5. Accounting treatments of business combination under and not under common control
1.Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combinedparty included in the consolidated financial statements of the ultimate controlling party at the combination date.Difference between carrying amount of the equity of the combined party included in the consolidated financialstatements of the ultimate controlling party and that of the combination consideration or total par value of sharesissued is adjusted to capital reserve, if the balance of capital reserve is insufficient to offset, any excess is adjustedto retained earnings.
2.Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree atthe acquisition date, the excess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilitiesand contingent liabilities, and the measurement of the combination cost are reviewed, then the difference isrecognized in profit or loss.
6. Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidatedfinancial statements are compiled by the parent company according to “CASBE 33 – Consolidated FinancialStatements”, based on relevant information and the financial statements of the parent company and itssubsidiaries.
7. Classification of joint arrangements and accounting treatment of joint operations
1.Joint arrangements include joint operations and joint ventures.
2.When the Company is a joint operator of a joint operation, it recognizes the following items in relation toits interest in a joint operation:
(1)its assets, including its share of any assets held jointly;
(2)its liabilities, including its share of any liabilities incurred jointly;
(3)its revenue from the sale of its share of the output arising from the joint operation;
(4)its share of the revenue from the sales of the assets by the joint operation; and
its expenses, including its share of any expenses incurred jointly.
8. Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cashequivalents refer to short-term, highly liquid investments that can be readily converted to cash and that are subject
to an insignificant risk of changes in value.
9. Foreign currency business and foreign currency translation
1.Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB at the spot exchange rate at thetransaction date at initial recognition. At the balance sheet date, monetary items denominated in foreign currencyare translated at the spot exchange rate at the balance sheet date with difference, except for those arising from theprincipal and interest of exclusive borrowings eligible for capitalization, included in profit or loss; non-cash itemscarried at historical costs are translated at the spot exchange rate at the transaction date, with the RMB amountsunchanged; non-cash items carried at fair value in foreign currency are translated at the spot exchange rate at thedate when the fair value was determined, with difference included in profit or loss or other comprehensiveincome.
2.Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the balance sheet date;the equity items, other than undistributed profit, are translated at the spot rate at the transaction date; the revenuesand expenses in the income statement are translated into RMB at the spot exchange rate at the transaction date.The difference arising from the aforementioned foreign currency translation is included in other comprehensiveincome.
10. Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when initially recognized: (1) financialassets at amortized cost; (2) financial assets at fair value through other comprehensive income; (3) financial assetsat fair value through profit or loss.
Financial liabilities are classified into the following four categories when initially recognized: (1) financialliabilities at fair value through profit or loss; (2) financial liabilities that arise when a transfer of a financial assetdoes not qualify for derecognition or when the continuing involvement approach applies; (3) financial guaranteecontracts not fall within the above categories (1) and (2), and commitments to provide a loan at a below-marketinterest rate, which do not fall within the above category (1); (4) financial liabilities at amortized cost.
2. Recognition criteria, measurement method and derecognition condition of financial assets and financialliabilities
(1) Recognition criteria and measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument, it is recognized as a financial asset orfinancial liability. The financial assets and financial liabilities initially recognized by the Company are measuredat fair value; for the financial assets and liabilities at fair value through profit or loss, the transaction expensesthereof are directly included in profit or loss; for other categories of financial assets and financial liabilities, thetransaction expenses thereof are included into the initially recognized amount. However, at initial recognition, foraccounts receivables that do not contain a significant financing component or in circumstances where theCompany does not consider the financing components in contracts within one year,, the Company measures theirtransaction price in accordance with “CASBE 14 – Revenues”.
(2) Subsequent measurement of financial assets
1)Financial assets measured at amortized cost
The Company measures its financial assets at the amortized costs using effective interest method. Gains orlosses on financial assets that are measured at amortized cost and are not part of hedging relationships shall beincluded into profit or loss when the financial assets are derecognized, reclassified, amortized using effectiveinterest method or recognized with impairment loss.
2)Debt instrument investments at fair value through other comprehensive income
The Company measures its debt instrument investments at fair value. Interests, impairment gains or losses,and gains and losses on foreign exchange that calculated using effective interest method shall be included intoprofit or loss, while other gains or losses are included into other comprehensive income. Accumulated gains orlosses that initially recognized as other comprehensive income should be transferred out into profit or loss whenthe financial assets are derecognized.
3)Equity instrument investments at fair value through other comprehensive income
The Company measures its equity instrument investments at fair value. Dividends obtained (other than thoseas part of investment cost recovery) shall be included into profit or loss, while other gains or losses are includedinto other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensiveincome should be transferred out into retained earnings when the financial assets are derecognized.
4)Financial assets at fair value through profit or loss
The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value(including interests and dividends) shall be included into profit or loss, except for financial assets that are part ofhedging relationships.
(3) Subsequent measurement of financial liabilities
1)Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (includingderivatives that are liabilities) and financial liabilities designated as at fair value through profit or loss. TheCompany measures such kind of liabilities at fair value. The amount of changes in the fair value of the financialliabilities that are attributable to changes in the Company’s own credit risk shall be included into othercomprehensive income, unless such treatment would create or enlarge accounting mismatches in profit or loss.Other gains or losses on those financial liabilities (including interests, changes in fair value that are attributable toreasons other than changes in the Company’s own credit risk) shall be included into profit or loss, except forfinancial liabilities that are part of hedging relationships. Accumulated gains or losses that originally recognized asother comprehensive income should be transferred out into retained earnings when the financial liabilities arederecognized.
2)Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or whenthe continuing involvement approach applies
The Company measures its financial liabilities in accordance with “CASBE 23 – Transfer of Financial Assets”
3)Financial guarantee contracts not fall within the above categories 1) and 2), and commitments to provide aloan at a below- market interest rate, which do not fall within the above category 1)
The Company measures its financial liabilities at the higher of: a. the amount of loss allowances in accordancewith impairment requirements of financial instruments; b. the amount initially recognized less the amount ofaccumulated amortization recognized in accordance with “CASBE 14 – Revenues”.
4)Financial liabilities at amortized cost
The Company measures its financial liabilities at amortized cost using effective interest method. Gains orlosses on financial liabilities that are measured at amortized cost and are not part of hedging relationships shall beincluded into profit or loss when the financial liabilities are derecognized and amortized using effective interestmethod.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when one of the following conditions is met:
a.the contractual rights to the cash flows from the financial assets expire; orb.the financial assets have been transferred and the transfer qualifies for derecognition in accordance with“CASBE 23 – Transfer of Financial Assets”.
2) Onlywhentheunderlyingpresentobligationsofafinancialliabilityarerelievedtotallyorpartlymaythefinancialliabilitybe derecognizedaccordingly.
3. Recognition criteria and measurement method of financial assetstransfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of thefinancial asset, it derecognizes the financial asset, and any right or liability arising from such transfer isrecognized independently as an asset or a liability. If it retained substantially all of the risks and rewards related tothe ownership of the financial asset, it continues recognizing the financial asset. Where the Company does nottransfer or retain substantially all of the risks and rewards related to the ownership of a financial asset, it is dealtwith according to the circumstances as follows respectively: (1) if the Company does not retain its control over thefinancial asset, it derecognizes the financial asset, and any right or liability arising from such transfer isrecognized independently as an asset or a liability; (2) if the Company retains its control over the financial asset,according to the extent of its continuing involvement in the transferred financial asset, it recognizes the relatedfinancial asset and recognizes the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between theamounts of the following two items are included in profit or loss: (1) the carrying amount of the transferredfinancial asset as of the date of derecognition; (2) the sum of consideration received from the transfer of thefinancial asset, and the accumulative amount of the changes of the fair value originally included in othercomprehensive income proportionate to the transferred financial asset (financial assets transferred refer to debtinstrument investments at fair value through other comprehensive income). If the transfer of financial assetpartially satisfies the conditions to derecognition, the entire carrying amount of the transferred financial asset is,between the portion which is derecognized and the portion which is not, apportioned according to their respectiverelative fair value, and the difference between the amounts of the following two items are included into profit orloss: (1) the carrying amount of the portion which is derecognized; (2) the sum of consideration of the portionwhich is derecognized, and the portion of the accumulative amount of the changes in the fair value originallyincluded in other comprehensive income which is corresponding to the portion which is derecognized (financialassets transferred refer to debt instrument investments at fair value through other comprehensive income).
4. Fair value determination method of financial assets andliabilities
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficientdata are available to measure fair value. The inputs to valuation techniques used to measure fair value are arrangedin the following hierarchy and used accordingly:
(1)Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that theCompany can access at the measurement date.
(2)Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the assetor liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities inactive markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs otherthan quoted prices that are observable for the asset or liability, for example, interest rates and yield curvesobservable at commonly quoted intervals; market-corroborated inputs;
(3)Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that isnot observable and cannot be corroborated by observable market data at commonly quoted intervals, historical
volatility, future cash flows to be paid to fulfill the disposal obligation assumed in business combination, andfinancial forecast developed using the Company’s own data, etc.
5. Impairment of financial instruments
(1) Measurement and accountingtreatment
The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets atamortized cost, debt instrument investments, contract assets or leases receivable at fair value through othercomprehensive income, loan commitments other than financial liabilities at fair value through profit or loss,financial guarantee contracts not belong to financial liabilities at fair value through profit or loss or financialliabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuinginvolvement approach applies.
Expected credit losses refer to the weighted average of credit losses with the respective risks of a defaultoccurring as the weights. Credit loss refers to the difference between all contractual cash flows that are due to theCompany in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cashshortfalls), discounted at the original effective interest rate. Among which, purchased or originatedcredit-impaired financial assets are discounted at the credit-adjusted effective interest rate.
At the balance sheet date, the Company shall only recognize the cumulative changes in the lifetime expectedcredit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financialassets.
For accounts receivable and contract assets resulting from transactions as regulated in “CASBE 14 –Revenues” which do not contain a significant financing component or in circumstances where the Company doesnot consider the financing components in contracts within one year,, the Company chooses simplified approach tomeasure the loss allowance at an amount equal to lifetime expected credit losses.
For financial assets other than the above, on each balance sheet date, the Company shall assess whether thecredit risk on the financial instrument has increased significantly since initial recognition. The Company shallmeasure the loss allowance for the financial instrument at an amount equal to the lifetime expected credit losses ifthe credit risk on that financial instrument has increased significantly since initial recognition; otherwise, theCompany shall measure the loss allowance for that financial instrument at an amount equal to 12-month expectedcredit loss.
Considering reasonable and supportable forward-looking information, the Company compares the risk of adefault occurring on the financial instrument as at the balance sheet date with the risk of a default occurring on thefinancial instrument as at the date of initial recognition, so as to assess whether the credit risk on the financialinstrument has increased significantly since initial recognition.
The Company may assume that the credit risk on a financial instrument has not increased significantly sinceinitial recognition if the financial instrument is determined to have relatively low credit risk at the balance sheetdate.
The Company shall estimate expected credit risk and measure expected credit losses on an individual or acollective basis. When the Company adopts the collective basis, financial instruments are grouped with similarcredit risk features.
The Company shall remeasure expected credit loss on each balance sheet date, and increased or reversedamounts of loss allowance arising therefrom shall be included into profit or loss as impairment losses or gains. Fora financial asset measured at amortized cost, the loss allowance reduces the carrying amount of such financialasset presented in the balance sheet; for a debt investment measured at fair value through other comprehensiveincome, the loss allowance shall be recognized in other comprehensive income and shall not reduce the carrying
amount of such financial asset.
(2) Financial instruments with expected credit risk assessed and expected credit losses measured on aportfolio basis
| Items | Basis for determination of portfolio | Method for measuring expected credit loss |
| Other receivables – Portfolio grouped withages | Aging | Based on historical credit loss experience,thecurrentsituationandthe forecast of future economic conditions, the Company calculates expectedcredit lossthroughexposureatdefaultand12- month or lifetime expected creditlossrate. |
Other receivables –Portfolio grouped balancedue from related partieswithin the consolidationscope
| Other receivables – Portfolio grouped balance due from related parties within the consolidation scope | Balance due from related parties within the consolidation scope | Based on historical credit loss experience,thecurrentsituationandthe forecast of future economic conditions, the Company calculates expectedcredit lossthroughexposureatdefaultand12- month or lifetime expected creditlossrate. |
(3) Accounts receivable and contract assets with expected credit losses measured on a portfoliobasis
1) Specific portfolios and method for measuring expected creditloss
| Items | Basis for determination of portfolio | Method for measuring expected credit loss |
| Bank acceptance receivable | Type of notes | Based on historical credit loss experience,thecurrentsituationandthe forecast of future economic conditions, the Company calculates expectedcredit loss through exposure at defaultandlifetime expected credit loss rate. |
| Trade acceptance receivable | ||
| Accounts receivable – Portfolio grouped withages | Ages | Based on historical credit loss experience,thecurrentsituationandthe forecast of future economic conditions, the Company prepares thecomparisontable of ages and lifetimeexpectedcredit loss rate of accounts receivable,so as to calculate expected credit loss. |
2) Accountsreceivable–comparisontableofagesandlifetimeexpectedcredit lossrateofportfoliogroupedwithages
| Ages | Expected credit loss rate(%) |
| Within 1 year (inclusive, the same hereinafter) | 5.00 |
| 1-2 years | 10.00 |
| 2-3 years | 20.00 |
3-4 years
| 3-4 years | 30.00 |
| 4-5 years | 50.00 |
| Over 5 years | 100.00 |
6. Offsetting financial assets and financialliabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset.However, the Company offsets a financial asset and a financial liability and presents the net amount in the balancesheet when, and only when, the Company:(a)currently has a legally enforceable right to set off the recognizedamounts; and (b) intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.For a transfer of a financial asset that does not qualify for derecognition, the Company does not offset thetransferred asset and the associated liability.
11. Notes Receivable
Due to the short term of notes receivable and the low risk of breach of contract, the Company has a strongability to fulfill its obligation to pay the cash flow of the contract in the short term. Therefore, the Companyregards the notes receivable as a financial instrument with lower credit risk and directly assumes that the creditrisk has not increased significantly since the initial confirmation. Considering the historical default rate is zero, theCompany's fixed bad debt reserve rate for the notes receivable is 0.
12. Accounts Receivable
Detailsrefertothe10. Financialinstrumentsofthefinancialstatements notes of SectionV.Significantaccountingpoliciesandestimates.
13. Receivables Financing
Detailsrefertothe10. Financialinstrumentsofthefinancialstatements notes of SectionV.Significantaccountingpoliciesandestimates.
14. Other Receivables
Recognition method and accounting treatment of expected credit loss of the other receivable
Detailsrefertothe10. Financialinstrumentsofthefinancialstatements notes of SectionV.Significantaccountingpoliciesandestimates.
15. Inventories
1. Classification ofinventories
Inventories include finished goods or goods held for sale in the ordinary course of business, work in processin the process of production, and materials or supplies etc. to be consumed in the production process or in therendering of services.
2.Accounting method for dispatching inventories:
Inventories dispatched from storage are accounted for with weighted average method at the end of eachmonth.
3.Basis for determining net realizable value
At the balance sheet date, inventories are measured at the lower of cost and net realizable value; provisionsfor inventory write- down are made on the excess of its cost over the net realizable value. The net realizable valueof inventories held for sale is determined based on the amount of the estimated selling price less the estimatedselling expenses and relevant taxes and surcharges in the ordinary course of business; the net realizable value ofmaterials to be processed is determined based on the amount of the estimated selling price less the estimated costsof completion, selling expenses and relevant taxes and surcharges in the ordinary course of business; at thebalance sheet date, when only part of the same item of inventories have agreed price, their net realizable value isdetermined separately and is compared with their costs to set the provision for inventory write-down to be madeor reversed.
4.Inventory system
Perpetual inventory method is adopted.
5.Amortization method of low-value consumables and packages
(1)Low-value consumables
Low-value consumables are amortized with one-off method.
(2)Packages
Packages are amortized with one-off method.
16. Contract assets
The Company presents contract assets or contract liabilities in the balance sheet based on the relationshipbetween its performance obligations and customers’ payments. Contract assets and contract liabilities under thesame contract shall offset each other and be presented on a net basis.
The Company presents an unconditional right to consideration (i.e., only the passage of time is requiredbefore the consideration is due) as a receivable, and presents a right to consideration in exchange for goods that ithas transferred to a customer (which is conditional on something other than the passage of time) as a contractasset.
17. Contract costs
Assets related to contract costs including costs of obtaining a contract and costs to fulfil a contract.
The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are expectedto be recovered. The costs of obtaining a contract shall be included into profit or loss when incurred if theamortization period of the asset is one year or less.
If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories, fixed
assets or intangible assets, etc., the Company shall recognize the costs to fulfil a contract as an asset if all thefollowing criteria are satisfied:
1.The costs relate directly to a contract or to an anticipated contract, including direct labor, direct materials,manufacturing overhead cost (or similar cost), cost that are explicitly chargeable to the customer under thecontract, and other costs that are only related to the contract;
2.The costs enhance resources of the Company that will be used in satisfying performance obligations in thefuture; and
3.The costs are expected to be recovered.
An asset related to contract costs shall be amortized on a systematic basis that is consistent with relatedgoods or services, with amortization included into profit or loss.
The Company shall make provision for impairment and recognize an impairment loss to the extent that thecarrying amount of an asset related to contract costs exceeds the remaining amount of consideration that theCompany expects to receive in exchange for the goods or services to which the asset relates less the costsexpected to be incurred. The Company shall recognize a reversal of an impairment loss previously recognized inprofit or loss when the impairment conditions no longer exist or have improved. The carrying amount of the assetafter the reversal shall not exceed the amount that would have been determined on the reversal date if no provisionfor impairment had been made previously.
18. Held for sale assets
1. Classification of non-current assets or disposal groups as held forsale
Non-current assets or disposal groups are accounted for as held for sale when the following conditions are allmet: a. the asset must be available for immediate sale in its present condition subject to terms that are usual andcustomary for sales of such assets or disposal groups; b. its sales must be highly probable, i.e., the Company hasmade a decision on the sale plan and has obtained a firm purchase commitment, and the sale is expected to becompleted within one year.
When the Company acquires a non-current asset or disposal group with a view to resale, it shall classify thenon-current asset or disposal group as held for sale at the acquisition date only if the requirement of “expected tobe completed within one year” is met at that date and it is highly probable that other criteria for held for sale willbe met within a short period (usually within three months).
An asset or a disposal group is still accounted for as held for sale when the Company remains committed toits plan to sell the asset or disposal group in the circumstance that non-related party transactions fail to becompleted within one year due to one of the following reasons: a. a buyer or others unexpectedly set conditionsthat will extend the sale period, while the Company has taken timely actions to respond to the conditions andexpects a favorable resolution of the delaying factors within one year since the setting; b. a non-current asset ordisposal group classified as held for sale fails to be sold within one year due to rare cases, and the Company hastaken action necessary to respond to the circumstances during the initial one-year period and the criteria for heldfor sale are met.
2. Measurement of non-current assets or disposal groups as held for sale
(1) Initial measurement and subsequent measurement
For initial measurement and subsequent measurement as at the balance sheet date of a non-current asset ordisposal group as held for sale, where the carrying amount is higher than the fair value less costs to sell, thecarrying amount is written down to the fair value less costs to sell, and the write-down is recognized in profit or
loss as assets impairment loss, meanwhile, provision for impairment of assets as held for sale shall be made.For a non-current asset or disposal group classified as held for sale at the acquisition date, the asset ordisposal group is measured on initial recognition at the lower of its initial measurement amount had it not been soclassified and fair value less costs to sell. Apart from the non-current asset or disposal group acquired throughbusiness combination, the difference arising from the initial recognition of a non-current asset or disposal group atthe fair value less costs to sell shall be included into profit or loss.The assets impairment loss recognized for a disposal group as held for sale shall reduce the carrying amountof goodwill in the disposal group first, and then reduce its carrying amount based on the proportion of eachnon-current asset’s carrying amount in the disposal group.
No provision for depreciation or amortization shall be made on non-current assets as held for sale ornon-current assets in disposal groups as held for sale, while interest and other expenses attributable to theliabilities of a disposal group as held for sale shall continue to be recognized.
(2) Accounting treatment of reversal of assets impairment loss
When there is a subsequent increase in fair value less costs to sell of a non-current asset as held for sale at thebalance sheet date, the write-down shall be recovered, and shall be reversed not in excess of the impairment lossthat has been recognized after the non- current asset was classified as held for sale. The reversal shall be includedinto profit or loss. Assets impairment loss that has been recognized before the classification is not reversed.
When there is a subsequent increase in fair value less costs to sell of a disposal group as held for sale at thebalance sheet date, the write-down shall be recovered, and shall be reversed not in excess of the non-current assetsimpairment loss that has been recognized after the disposal group was classified as held for sale. The reversalshall be included into profit or loss. The reduced carrying amount of goodwill and non-current assets impairmentloss that has been recognized before the classification is not reversed.
For the subsequent reversal of the impairment loss that has been recognized in a disposal group as held forsale, the carrying amount is increased based on the proportion of carrying amount of each non-current asset(excluding goodwill) in the disposal group.
(3) Non-current asset or disposal group that is no longer classified as held for sale and derecognized
A non-current asset or disposal group that does not met criteria for held for sale and no longer classified asheld for sale, or a non-current asset that removed from a disposal group as held for sale shall be measured at thelower of: a. its carrying amount before it was classified as held for sale, adjusted for any depreciation,amortization or impairment that would have been recognized had it not been classified as held for sale; and b. itsrecoverable amount.
When a non-current asset or disposal group classified as held for sale is derecognized, unrecognized gains orlosses shall be included into profit or loss.
19. Debt investments
20. Other debt investments
21. Long-term receivables
22. Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only whendecisions about the relevant activities require the unanimous consent of the parties sharing control. Significant
influence is the power to participate in the financial and operating policy decisions of the investee but is notcontrol or joint control of these policies.
2. Determination of investment cost
(1)For business combination under common control, if the consideration of the combining party is that it makespayment in cash, transfers non-cash assets, assumes its liabilities or issues equity securities, on the date ofcombination, it regards the share of the carrying amount of the equity of the combined party included in theconsolidated financial statements of the ultimate controlling party as the initial cost of the investment. Thedifference between the initial cost of the long-term equity investments and the carrying amount of the combinationconsideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve isinsufficient to offset, any excess is adjusted to retained earnings.When long-term equity investments are obtained through business combination under common controlachieved in stages, the Company determines whether it is a “bundled transaction”. If it is a “bundled transaction”,stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, onthe date of combination, investment cost is initially recognized at the share of the carrying amount of net assets ofthe combined party included the consolidated financial statements of the ultimate controlling party. The differencebetween the initial investment cost of long-term equity investments at the acquisition date and the carrying amountof the previously held long-term equity investments plus the carrying amount of the consideration paid for the newlyacquired equity is adjusted to capital reserve; if the balance of capital reserve is insufficient to offset, any excess isadjusted to retained earnings.
(2)For business combination not under common control, investment cost is initially recognized at theacquisition-date fair value of considerations paid.
When long-term equity investments are obtained through business combination not under common controlachieved in stages, the Company determined whether they are stand-alone financial statements or consolidatedfinancial statements in accounting treatment:
1)In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amountof the previously held long-term equity investments plus the carrying amount of the consideration paid for the newlyacquired equity.
2)In the case of consolidated financial statements, the Company determines whether it is a “bundledtransaction”. If it is a “bundled transaction”, stages as a whole are considered as one transaction in accountingtreatment. If it is not a “bundled transaction”, the carrying amount of the acquirer’s previously held equity interest inthe acquiree is remeasured at the acquisition-date fair value, and the difference between the fair value and thecarrying amount is recognized in investment income; when the acquirer’s previously held equity interest in theacquiree involves other comprehensive income under equity method, the related other comprehensive income isreclassified as income for the acquisition period, excluding other comprehensive income arising from changes in netliabilities or assets from remeasurement of defined benefit plan of the acquiree.
(3)Long-term equity investments obtained through ways other than business combination: the initial cost of along-term equity investment obtained by making payment in cash is the purchase cost which is actually paid; thatobtained on the basis of issuing equity securities is the fair value of the equity securities issued; that obtainedthrough debt restructuring is determined according to “CASBE 12 – Debt Restructuring”; and that obtained throughnon-cash assets exchange is determined according to “CASBE 7 – Non-cash Assets Exchange”.
3. Subsequent measurement and recognition method of profit or loss
For long-term equity investments with control relationship, it is accounted for with cost method; forlong-term equity investments with joint control or significant influence relationship, it is accounted for with equitymethod.
4. Disposal of a subsidiary in stages resulting in the Company’s loss of control
(1)Stand-alone financial statements
The difference between the carrying amount of the disposed equity and the consideration obtained thereof isrecognized in profit or loss. If the disposal does not result in the Company’s loss of significant influence or jointcontrol, the remained equity is accounted for with equity method; however, if the disposal results in theCompany’s loss of control, joint control, or significant influence, the remained equity is accounted for accordingto “CASBE 22 – Financial Instruments: Recognition and Measurement”.
(2)Consolidated financial statements
1)Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in the Company’s loss ofcontrol
Before the Company’s loss of control, the difference between the disposal consideration and theproportionate share of net assets in the disposed subsidiary from acquisition date or combination date to thedisposal date is adjusted to capital reserve (capital premium), if the balance of capital reserve is insufficient tooffset, any excess is adjusted to retained earnings.
When the Company loses control, the remained equity is remeasured at the loss-of-control-date fair value.The aggregated value of disposal consideration and the fair value of the remained equity, less the share of netassets in the disposed subsidiary held before the disposal from the acquisition date or combination date to thedisposal date is recognized in investment income in the period when the Company loses control over suchsubsidiary, and meanwhile goodwill is offset correspondingly. Other comprehensive income related to equityinvestments in former subsidiary is reclassified as investment income upon the Company’s loss of control.
2)Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in the Company’s loss ofcontrol
In case of “bundled transaction”, stages as a whole are considered as one transaction resulting in loss ofcontrol in accounting treatment. However, before the Company loses control, the difference between the disposalconsideration at each stage and the proportionate share of net assets in the disposed subsidiary is recognized asother comprehensive income at the consolidated financial statements and reclassified as profit or loss in the periodwhen the Company loses control over such subsidiary.
23. Investment property
Investment property measurement modelMeasurement by cost modelThe depreciation or amortization method
1.Investment property includes land use right of leased-out property and of property held for capitalappreciation and buildings that have been leased out.
2.The initial measurement of investment property is based on its cost, and subsequent measurement is madeusing the cost model, the depreciation or amortization method is the same as that of fixed assets and intangibleassets.
24.Fixed assets
(1) Recognition principles
Fixed assets are tangible assets held for use in the production of goods or rendering of services, for rental toothers, or for administrative purposes, and expected to be used during more than one accounting year. Fixed assets
are recognized if, and only if, it is probable that future economic benefits associated with the assets will flow tothe Company and the cost of the assets can be measured reliably.
(2) Depreciation method
| Categories | Depreciation method | Useful life (years) | Residual value proportion (%) | Annual depreciation rate (%) |
| Buildings and structures | Straight-line method | 20-25 | 0、5 | 5.00-3.80 |
| General equipment | Straight-line method | 3-10 | 0、10 | 33.33-9.00 |
| Special equipment | Straight-line method | 5-15 | 0、10 | 20.00-6.00 |
| Transport facilities | Straight-line method | 4-10 | 5、10 | 23.75-9.00 |
(3) Recognition and pricing principles of fixed assets rented-in under financelease
Finance lease is determined when one or a combination of the following conditions are satisfied: (1) theownership has been transferred to the lessee when the leasing term is due; (2) the lessee has the option to purchasethe leasing asset at a price that is much lower than its fair value, so it can be reasonably determined that the lesseewill take the option at the very beginning of the lease; (3) the leasing term accounts for most time of the useful life(ordinarily accounting for 75% or higher) even if the ownership does not transfer to the lessee; (4) the presentvalue of the minimum amount of rent that the lessee has to pay at the first day of the lease amounts to 90% orhigher of its fair value at the same date; or the present value of the minimum amount of rent that the lessorcollects at the first day of the lease amounts to 90% or higher of its fair value at the same date; and/or (5) theleased assets are of such a specialized nature that only the lessee can use them without major modifications.Fixed assets rented-in under finance lease are recorded at the lower of fair value and the present value of theminimum lease payment at the inception of the lease, and are depreciated following the depreciation policy forself-owned fixed assets.
25. Construction in progress
1.Construction in progress is recognized if, and only if, it is probable that future economic benefits associatedwith the item will flow to the Company, and the cost of the item can be measured reliably. Construction inprogress is measured at the actual cost incurred to reach its designed usable conditions.
2.Construction in progress is transferred into fixed assets at its actual cost when it reaches the designedusable conditions. When the auditing of the construction in progress was not finished while reaching the designedusable conditions, it is transferred to fixed assets using estimated value first, and then adjusted accordingly whenthe actual cost is settled, but the accumulated depreciation is not to be adjusted retrospectively.
26. Borrowing costs
1.Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition andconstruction or production of assets eligible for capitalization, it is capitalized and included in the costs of relevant
assets; other borrowing costs are recognized as expenses on the basis of the actual amount incurred, and areincluded in profit or loss.
2.Borrowing costs capitalization period
(1)The borrowing costs are not capitalized unless the following requirements are all met: 1) the assetdisbursements have already incurred; 2) the borrowing costs have already incurred; and 3) the acquisition andconstruction or production activities which are necessary to prepare the asset for its intended use or sale havealready started.
(2)Suspension of capitalization: where the acquisition and construction or production of a qualified asset isinterrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of theborrowing costs is suspended; the borrowing costs incurred during such period are recognized as expenses, andare included in profit or loss, till the acquisition and construction or production of the asset restarts.
(3)Ceasing of capitalization: when the qualified asset under acquisition and construction or production isready for the intended use or sale, the capitalization of the borrowing costs is ceased.
3.Capitalization rate and capitalized amount of borrowing costs
For borrowings exclusively for the acquisition and construction or production of assets eligible forcapitalization, the to-be- capitalized amount of interests is determined in light of the actual interest expensesincurred (including amortization of premium or discount based on effective interest method) of the specialborrowings in the current period less the interest income on the unused borrowings as a deposit in the bank or as atemporary investment; where a general borrowing is used for the acquisition and construction or production ofassets eligible for capitalization, the Company calculates and determines the to-be-capitalized amount of interestson the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulativeasset disbursements less the general borrowing by the capitalization rate of the general borrowing used.
27. Productive biological assets
28. Oil & gas assets
29. Right-of-use assets
1.Recognition principles of right-of-use asset
Right-of-use asset refers to the asset that represents the Company’s right as lessee to use an underlying assetfor the lease term. The Company recognizes a right-of-use asset at the commencement date. Right-of-use assetsare recognized only when: (a) it is probable that the economic benefits will flow to the Company; and (b) the costof the right-of-use asset can be measured reliably.
2.Initial measurement of the right-of-use asset
The right-of-use asset is measured at cost and the cost shall comprise: (1) the amount of the initialmeasurement of the lease liability; (2) any lease payments made at or before the commencement date, less anylease incentives received; (3) any initial direct costs incurred by the lessee; and (4) an estimate of costs to beincurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located orrestoring the underlying asset to the condition required by the terms and conditions of the lease.
3.Subsequent measurement of the right-of-use asset
(1)After the commencement date, the Company measures the right-of-use asset applying a cost model.
The Company shall depreciate the right-of-use asset. If it is reasonable to be certain that the ownership of theunderlying asset can be acquired by the end of the lease term, the Company depreciates the right-of-use asset from
the commencement date to the endof the useful life of the underlying asset. Otherwise, the Company depreciatesthe right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-useasset or the end of the lease term. Depreciation method of different categories of right-of-use assets are as follows:
| Categories | Depreciation method | Useful life (years) | Residual value proportion (%) | Annual depreciation rate (%) |
| Buildings and structures | Straight-line method | 5-11 | 0 | 9.09-20.00 |
| General equipment | Straight-line method | 3-5 | 0 | 20.00-33.33 |
Special equipment
| Special equipment | Straight-line method | 3-15 | 0 | 6.67-33.33 |
| Transport facilities | Straight-line method | 3-5 | 0 | 20.00-33.33 |
(3) When the Company remeasures the lease liability on the basis of the present value of the lease paymentsafter changes and adjusts the carrying amount of the right-of-use asset accordingly, if the carrying amount of theright-of-use asset is reduced to zero and there shall be a further reduction in the measurement of the lease liability,any remaining amount of the remeasurement shall be recognized in profit or loss.
30. Intangible assets
(1) Measurement method, useful life and impairmenttest
1.Intangible assets include land ownership, land use right, patent right, trademark right, propitiatorytechnology, management software, and sewage disposal right etc. The initial measurement of intangible assets isbased on its cost.
2.For intangible assets with finite useful lives, their amortization amounts are amortized within their usefullives systematically and reasonably, if it is unable to determine the expected realization pattern reliably, intangibleassets are amortized by the straight-line method with details as follows:
| Items | Amortization period (years) |
| Land use right | 50、30 |
| Patent right | 10 |
| Trademark right | 10 |
| Propitiatory technology | 5 |
| Management software | 3-10 |
| Sewage disposal right | 10 |
The Company does not amortize intangible assets with indefinite useful lives, such as land ownership andtrademark rights, and the Company reviews the useful lives of these intangible assets in each accounting period.For intangible assets with indefinite useful lives, the indefinite useful life is determined based on the inability toestimate the period over which the intangible assets will provide future economic benefits to the enterprise. TheCompany's intangible asset with indefinite useful life is land ownership.
(2) Accounting policy of expenditures onthe internal research and developmentExpenditures on the research phase of an internal project are recognized as profit or loss when they areincurred. An intangibleassetarisingfromthedevelopmentphaseofaninternalprojectisrecognizediftheCompanycandemonstrateallofthefollowings:(1) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (2) itsintention to complete the intangibleassetanduseorsellit;(3)howtheintangibleassetwillgenerateprobablefutureeconomicbenefits,amongotherthings,the Company candemonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it isto beusedinternally,theusefulnessoftheintangibleasset;(4)theavailabilityofadequatetechnical,financialandotherresourcestocompletethedevelopmentandtouseorselltheintangibleasset;and(5)itsabilitytomeasurereliablytheexpenditureattributabletotheintangible asset during itsdevelopment.
31. Impairment of part of long-term assets
For long-term assets such as long-term equity investments, investment property at cost model, fixed assets,construction in progress, right-of-use assets, intangible assets with finite useful lives, etc., if at the balance sheetdate there is indication of impairment, the recoverable amount is to be estimated. For goodwill recognized inbusiness combination and intangible assets with indefinite useful lives, no matter whether there is indication ofimpairment, impairment test is performed annually. Impairment test on goodwill is performed on related assetgroup or asset group portfolio.
When the recoverable amount of such long-term assets is lower than their carrying amount, the difference isrecognized as provision for assets impairment through profit or loss.
32. Long-term prepayments
Long-term prepayments are expenses that have been recognized but with amortization period over one year(excluding one year). They are recorded with actual cost, and evenly amortized within the beneficiary period orstipulated period. If items of long-term prepayments fail to be beneficial to the following accounting periods,residual values of such items are included in profit or loss.
33. Contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the relationshipbetween its performance obligations and customers’ payments. Contract assets and contract liabilities under thesame contract shall offset each other and be presented on a net basis.
The Company presents an obligation to transfer goods to a customer for which the Company has receivedconsideration (or the amount is due) from the customer as a contract liability.
34. Employee compensation
(1) Accounting treatment for short-term Employee compensation
The Company recognizes, in the accounting period in which an employee provides service, short-termEmployee compensation actually incurred as liabilities, with a corresponding charge to profit or loss or the cost ofa relevant asset.
(2) Accounting treatment for post-employmentbenefits
The Company classifies post-employment benefit plans as either defined contribution plans or definedbenefit plans.
(1)The Company recognizes in the accounting period in which an employee provides service the contributionpayable to a defined contribution plan as a liability, with a corresponding charge to profit or loss or the cost of arelevant asset.
(2)Accounting treatment by the Company for defined benefit plan usually involves the following steps:
1)In accordance with the projected unit credit method, using unbiased and mutually compatible actuarialassumptions to estimate related demographic variables and financial variables, measure the obligations under thedefined benefit plan, and determine the periods to which the obligations are attributed. Meanwhile, the Companydiscounts obligations under the defined benefit plan to determine the present value of the defined benefit planobligations and the current service cost;
2)When a defined benefit plan has assets, the Company recognizes the deficit or surplus by deducting the fairvalue of defined benefit plan assets from the present value of the defined benefit plan obligation as a net definedbenefit plan liability or net defined benefit plan asset. When a defined benefit plan has a surplus, the Companymeasures the net defined benefit plan asset at the lower of the surplus in the defined benefit plan and the assetceiling;
3)At the end of the period, the Company recognizes the following components of Employee compensationcost arising from defined benefit plan: a. service cost; b. net interest on the net defined benefit plan liability (asset);and c. changes as a result of remeasurement of the net defined benefit liability (asset). Item a and item b arerecognized in profit or loss or the cost of a relevant asset. Item c is recognized in other comprehensive income andis not to be reclassified subsequently to profit or loss. However, the Company may transfer those amountsrecognized in other comprehensive income within equity.
(3) Accounting treatment for terminationbenefits
Termination benefits provided to employees are recognized as an employee benefit liability for terminationbenefits, with a corresponding charge to profit or loss at the earlier of the following dates: (1) when the Companycannot unilaterally withdraw the offer of termination benefits because of an employment termination plan or acurtailment proposal; or (2) when the Company recognizes cost or expenses related to a restructuring that involvesthe payment of termination benefits.
(4) Accounting treatment for Other long-term Employee compensation
When other long-term Employee compensation provided to the employees satisfied the conditions forclassifying as a defined contribution plan, those benefits are accounted for in accordance with the requirements
relating to defined contribution plan, while other benefits are accounted for in accordance with the requirementsrelating to defined benefit plan. The Company recognizes the cost of Employee compensation arising from otherlong-term Employee compensation as the followings: a. service cost; b. net interest on the net liability or netassets of other long-term Employee compensation; and c. changes as a result of remeasurement of the net liabilityor net assets of other long-term Employee compensation. As a practical expedient, the net total of the aforesaidamounts is recognized in profit or loss or included in the cost of a relevant asset.
35. Lease obligations
At the inception date of the lease, the Company recognizes the present value of the outstanding leasepayments as a lease liability. The present value of lease payments is calculated using the interest rate embedded inthe lease as the discount rate, or if the interest rate embedded in the lease cannot be determined, the company'sincremental borrowing rate is used as the discount rate. The difference between the lease payments and theirpresent value is recognized as an unrecognized financing expense, and interest expense is recognized in eachperiod of the lease term at the discount rate used to recognize the present value of the lease payments and isincluded in profit or loss for the current period. Variable lease payments that are not included in the measurementof the lease liability are recognized in profit or loss when they are actually incurred.After the commencement date of the lease term, when there is a change in the substantive fixed payments, achange in the amount expected to be payable for the guaranteed residual value, a change in the index or rate usedto determine the lease payments, or a change in the evaluation result or actual exercise of the purchase option,renewal option or termination option, the Company remeasures the lease liability at the present value of thechanged lease payments and adjusts the carrying amount of the right-of-use asset accordingly. If the carryingamount of the right-of-use asset has been reduced to zero but the lease liability still needs to be further reduced,the remaining amount is recognized in profit or loss for the current period.
36. Projected liabilities
1. The Company recognizes a contingent obligation arising from external guarantees, litigation matters,product quality guarantees, loss-making contracts, etc. as a present obligation to be assumed by the Company, whenit is probable that an outflow of economic benefits will result from the performance of the obligation and the amountof the obligation can be measured reliably, the Company recognizes the obligation as a projected liability.
2. The company initially measures the projected liability based on the best estimate of the expenditure requiredto settle the related present obligation and reviews the carrying amount of the projected liability at the balance sheetdate.
37. Share-based payment
1.Types of share-based payment
Share-based payment consists of equity-settled share-based payment and cash-settled share-based payment.
2.Accounting treatment for settlements, modifications and cancellations of share-based payment plans
(1)Equity-settled share-based payment
For equity-settled share-based payment transaction with employees, if the equity instruments granted vestimmediately, the fair value of those equity instruments is measured at grant date and recognized as transactioncost or expense, with a corresponding adjustment in capital reserve; if the equity instruments granted do not vestuntil the counterparty completes a specified period of service, at the balance sheet date within the vesting period,
the fair value of those equity instruments measured at grant date based on the best estimate of the number ofequity instruments expected to vest is recognized as transaction cost or expense, with a corresponding adjustmentin capital reserve.For equity-settled share-based payment transaction with parties other than employees, if the fair value of theservices received can be measured reliably, the fair value is measured at the date the Company receives theservice; if the fair value of the services received cannot be measured reliably, but that of equity instruments can bemeasured reliably, the fair value of the equity instruments granted measured at the date the Company receives theservice is referred to, and recognized as transaction cost or expense, with a corresponding increase in equity.
(2)Cash-settled share-based payment
For cash-settled share-based payment transactions with employees, if share appreciation rights vestimmediately, the fair value of the liability incurred as the acquisition of services is measured at grant date andrecognized as transaction cost or expense, with a corresponding increase in liabilities; if share appreciation rightsdo not vest until the employees have completed a specified period of service, the liability is measured, at eachbalance sheet date until settled, at the fair value of the share appreciation rights measured at grant date based onthe best estimate of the number of share appreciation right expected to vest.
(3)Modifications and cancellations of share-based payment plan
If the modification increases the fair value of the equity instruments granted, the Company includes theincremental fair value granted in the measurement of the amount recognized for services received as considerationfor the equity instruments granted; similarly, if the modification increases the number of equity instrumentsgranted, the Company includes the fair value of the additional equity instruments granted, in the measurement ofthe amount recognized for services received as consideration for the equity instruments granted; if the Companymodifies the vesting conditions in a manner that is beneficial to the employee, the Company takes the modifiedvesting conditions into account.
If the modification reduces the fair value of the equity instruments granted, the Company does not take intoaccount that decrease in fair value and continue to measure the amount recognized for services received asconsideration for the equity instruments based on the grant date fair value of the equity instruments granted; if themodification reduces the number of equity instruments granted to an employee, that reduction is accounted for asa cancellation of that portion of the grant; if the Company modifies the vesting conditions in a manner that is notbeneficial to the employee, the Company does not take the modified vesting conditions into account.
If the Company cancels or settles a grant of equity instruments during the vesting period (other than thatcancelled when the vesting conditions are not satisfied), the Company accounts for the cancellation or settlementas an acceleration of vesting, and therefore recognizes immediately the amount that otherwise would have beenrecognized for services received over the remainder of the vesting period.
38. Other financial instruments such as preferred shares, perpetual bonds
39. Revenue
Revenue recognition and measurement principle
1.Revenue recognition principles
At contract inception, the Company shall assess the contracts and shall identify each performance obligationin the contracts, and determine whether the performance obligation should be satisfied over time or at a point intime.
The Company satisfies a performance obligation over time if one of the following criteria are met, otherwise,
the performance obligation is satisfied at a point in time: (1) the customer simultaneously receives and consumesthe economic benefits provided by the Company’s performance as the Company performs; (2) the customer cancontrol goods as they are created by the Company’s performance; (3) goods created during the Company’sperformance have irreplaceable uses and the Company has an enforceable right to the payments for performancecompleted to date during the whole contract period.For each performance obligation satisfied over time, the Company shall recognize revenue over time bymeasuring the progress towards complete satisfaction of that performance obligation. In the circumstance that theprogress cannot be measured reasonably, but the costs incurred in satisfying the performance obligation areexpected to be recovered, the Company shall recognize revenue only to the extent of the costs incurred until it canreasonably measure the progress. For each performance obligation satisfied at a point in time, the Company shallrecognize revenue at the time point that the client obtains control of relevant goods or services. To determinewhether the customer has obtained control of goods, the Company shall consider the following indications: (1) theCompany has a present right to payment for the goods, i.e., the customer is presently obliged to pay for the goods;
(2) the Company has transferred the legal title of the goods to the customer, i.e., the customer has legal title to thegoods; (3) the Company has transferred physical possession of the goods to the client, i.e., the customer hasphysically possessed the goods; (4) the Company has transferred significant risks and rewards of ownership of thegoods to the client, i.e., the customer has obtained significant risks and rewards of ownership of the goods; (5) thecustomer has accepted the goods; (6) other evidence indicating the customer has obtained control over the goods.
2.Revenue measurement principle
(1)Revenue is measured at the amount of the transaction price that is allocated to each performanceobligation. The transaction price is the amount of consideration to which the Company expects to be entitled inexchange for transferring goods or services to a customer, excluding amounts collected on behalf of third partiesand those expected to be refunded to the customer.
(2)If the consideration promised in a contract includes a variable amount, the Company shall confirm the bestestimate of variable consideration at expected value or the most likely amount. However, the transaction price thatincludes the amount of variable consideration only to the extent that it is high probable that a significant reversalin the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variableconsideration is subsequently resolved.
(3)In the circumstance that the contract contains a significant financing component, the Company shalldetermine the transaction price based on the price that a customer would have paid for if the customer had paidcash for obtaining control over those goods or services. The difference between the transaction price and theamount of promised consideration is amortized under effective interest method over contractual period. Theeffects of a significant financing component shall not be considered if the Company expects, at the contractinception, that the period between when the customer obtains control over goods or services and when thecustomer pays consideration will be one year or less.
(4)For contracts containing two or more performance obligations, the Company shall determine thestand-alone selling price at contract inception of the distinct good underlying each performance obligation andallocate the transaction price to each performance obligation on a relative stand-alone selling price basis.
3.Revenue recognition method
The Company’s sales of hand tools and power tools, laser measurement, storage and PPE are performanceobligations satisfied at a point in time. Revenue from domestic sales is recognized when the Company hasdelivered goods to the designated address as agreed by contract and such delivered goods have been verified foracceptance by customers, and the Company has collected the payments or has obtained the right to the payments,and related economic benefits are highly probable to flow to the Company. Revenue from overseas sales is
recognized when the Company has declared goods to the customs based on contractual agreements and hasobtained a bill of lading, and the Company has collected the payments or has obtained the right to the payments,and related economic benefits are highly probable to flow to the Company.
Revenue recognition principles’ differences may occur in the similar business but different operating models.
40. Government grants
1.Government grants shall be recognized if, and only if, the following conditions are all met: (1) theCompany will comply with the conditions attaching to the grants; (2) the grants will be received. Monetarygovernment grants are measured at the amount received or receivable. Non-monetary government grants aremeasured at fair value, and can be measured at nominal amount in the circumstance that fair value cannot beassessed.
2.Government grants related to assets
Government grants related to assets are government grants with which the Company constructs or otherwiseacquires long-term assets under requirements of government. In the circumstances that there is no specificgovernment requirement, the Company shall determine based on the primary condition to acquire the grants, andgovernment grants related to assets are government grants whose primary condition is to construct or otherwiseacquire long-term assets. They offset carrying amount of relevant assets, or they are recognized as deferredincome. If recognized as deferred income, they are included in profit or loss on a reasonable and systematic basisover the useful lives of the relevant assets. Those measured at notional amount are directly included into profit orloss. For assets sold, transferred, disposed or damaged within the useful lives, balance of unamortized deferredincome is transferred into profit or loss of the period in which the disposal occurred.
3.Government grants related to income
Government grants related to income are government grants other than those related to assets. Forgovernment grants that contain both parts related to assets and parts related to income, in which those two partsare blurred, they are thus collectively classified as government grants related to income. For government grantsrelated to income used for compensating the related future cost, expenses or losses, they are recognized asdeferred income and included in profit or loss or used to offset relevant cost during the period in which therelevant cost, expenses or losses are recognized; for government grants related to income used for compensatingthe related cost, expenses or losses incurred to the Company, they are directly included in profit or loss or used tooffset relevant cos
4. Government grants related to the ordinary course of business shall be included into other income or usedto offset relevant cost based on business nature, while those not related to the ordinary course of business shall beincluded into non-operating revenue or expenditures.
41. Deferred tax assets/Deferred tax liabilities
1.Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference betweenthe carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and tax baseof items not recognized as assets and liabilities but with their tax base being able to be determined according totax laws) and in accordance with the tax rate applicable to the period during which the assets are expected to berecovered or the liabilities are expected to be settled.
2.A deferred tax asset is recognized to the extent of the amount of the taxable income, which it is most likelyto obtain and which can be deducted from the deductible temporary difference. At the balance sheet date, if there
is any exact evidence that it is probable that future taxable income will be available against which deductibletemporary differences can be utilized, the deferred tax assets unrecognized in prior periods are recognized.
3.At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of adeferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable income will beavailable to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed tothe extent that it becomes probable that sufficient taxable income will be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or income through profitor loss, excluding those arising from the following circumstances: (a) business combination; and (b) thetransactions or items directly recognized in equity.
42. Leases
(1) Accounting treatment for operatinglease
1. The Company operates as a lessee
At the commencement date of the lease term, the Company recognizes leases with a lease term of not morethan 12 months that do not include a purchase option as short-term leases; leases with a lower value when thesingle leased asset is a brand-new asset are recognized as low-value asset leases. If the company subleases orexpects to sublease the leased assets, the original lease is not recognized as a low-value asset lease.
For all short-term leases and leases of low-value assets, the Company recognizes the lease payments as thecost of the relevant assets or current profit or loss on a straight-line basis during each period of the lease term.
Except for short-term leases and leases of low-value assets for which simplified treatment is applied asdescribed above, the Company recognizes a right-of-use asset and a lease liability for leases at the commencementdate of the lease term.
(1) Right-to-use assets
Right-of-use assets are initially measured at cost, which includes: (1) the initial measurement amount of thelease liability; (2) the amount of lease payments made on or before the commencement date of the lease, less theamount related to the lease incentive already taken, if any; (3) the initial direct costs incurred by the lessee; and; (4)costs expected to be incurred by the lessee to disassemble and remove the leased asset, restore the site where theleased asset is located, or restore the leased asset to the condition agreed upon under the terms of the lease.
The Company depreciates right-of-use assets on a straight-line basis. If it is reasonably certain that ownershipof the leased assets will be obtained at the end of the lease term, the Company depreciates the leased assets overtheir remaining useful lives. If it is not reasonably certain that ownership of the leased assets can be obtained atthe end of the lease term, the Company depreciates the leased assets over the shorter of the lease term and theremaining useful life of the leased assets.
(2) Lease liabilities
At the inception date of a lease, the Company recognizes the present value of the lease payments that havenot been paid as lease liability. When calculating the present value of the lease payments, the discount rate is theinterest rate embedded in the lease. If the interest rate embedded in the lease cannot be determined, the discountrate is the company's incremental borrowing rate. The difference between the lease payments and their presentvalue is recognized as an unrecognized financing expense, and interest expense is recognized in each period of thelease term at the discount rate used to recognize the present value of the lease payments and is included in profitor loss for the current period. Variable lease payments that are not included in the measurement of the leaseliability are recognized in profit or loss when they are actually incurred.
After the commencement date of the lease term, when there is a change in the substantive fixed payments, achange in the amount expected to be payable for the guaranteed residual value, a change in the index or rate usedto determine the lease payments, or a change in the evaluation result or actual exercise of the purchase option,lease renewal option or termination option, the Company remeasures the lease liability at the present value of thechanged lease payments and adjusts the carrying amount of the right-of-use asset accordingly. If the carryingamount of the right-of-use asset has been reduced to zero but the lease liability still needs to be further reduced,the remaining amount is recognized in profit or loss for the current period.
2. The Company acts as a lessor
At the inception date of a lease, the Company classifies a lease that transfers substantially all the risks andrewards associated with the ownership of the leased asset as a finance lease, except for those that are classified asoperating leases.
(1) Operating leases
The Company recognizes lease receipts as rental income on a straight-line basis during each period of thelease term, and the initial direct costs incurred are capitalized and apportioned on the same basis as the recognitionof rental income and recognized in profit or loss in the current period. Variable lease payments acquired by theCompany in connection with operating leases that are not included in the lease payments are recognized in profitor loss when they are actually incurred.
(2) Finance leases
At the commencement date of the lease term, the Company recognizes finance lease receivables at the netlease investment (the sum of the unguaranteed residual value and the present value of the lease payments not yetreceived at the commencement date of the lease term discounted at the interest rate embedded in the lease) andderecognizes the finance lease assets. During each period of the lease term, the Company calculates andrecognizes interest income based on the interest rate embedded in the lease.
Variable lease payments obtained by the Company that are not included in the net lease investmentmeasurement are recognized in profit or loss when they are actually incurred.
3. Sale and leaseback
(1) The Company operates as a lessee
The Company assesses whether the transfer of assets in a sale-and-leaseback transaction is a sale in accordancewith the provisions of "CASBE No. 14, "Revenue".
If the transfer of assets in a sale-and-leaseback transaction is a sale, the company measures the right-of-useasset resulting from the sale-and-leaseback at the portion of the original asset's carrying value that relates to theright-of-use acquired by the leaseback, and recognizes a gain or loss related to the right transferred to the lessoronly.
If the transfer of an asset in a sale-and-leaseback transaction is not a sale, the Company continues to recognizethe transferred asset and at the same time recognizes a financial liability equal to the transfer proceeds and accountsfor the financial liability in accordance with "CASBE No. 22 - Recognition and Measurement of FinancialInstruments".
(2) The Company operates as a lessor
The Company assesses and determines whether the transfer of assets in sale-and-leaseback transactions is asale in accordance with the provisions of "CASBE No. 14 - Revenue".
If the transfer of assets in a sale-and-leaseback transaction is a sale, the Company accounts for the purchase ofassets in accordance with other applicable CASBEs and accounts for the lease of assets in accordance with "CASBENo. 21 - Leases".
If the transfer of assets in a sale-and-leaseback transaction is not a sale, the Company does not recognize the
transferred asset, but recognizes a financial asset equal to the transfer proceeds and accounts for the financial asset inaccordance with "CASBE No. 22 - Recognition and Measurement of Financial Instruments".
(2) Accounting treatment for financelease
43. Other significant accounting policies and estimates
44. Significant changes in accounting policies and estimates
(1) Significant changes in accountingpolicies
√ Applicable □ Not Applicable
| Content and reason for changes in accounting policies | Approval procedure | Notes |
1. The Company (with the exception of Lista Holding AG and its subsidiaries) implemented the revised"CASBE No. 21-Leases" (hereinafter referred to as the new lease standard) as of January 1, 2021 (hereinafterreferred to as the first implementation date).
(1) For contracts existing before the first implementation date, the Company has elected not to reassess whetherthey are leases or contain leases.
(2) For leases for which the Company is the lessee, the Company adjusts the amount of opening retainedearnings and other related items in the financial statements for the current reporting period based on the cumulativeeffect of the implementation of the new leasing standard and the previous standard at the date of first-timeimplementation, without adjusting the information for comparable periods. The specific treatment is as follows:
For finance leases prior to the date of first-time implementation, the Company measured right-of-use assets andlease liabilities at the original carrying amounts of finance lease incoming assets and finance lease payables,respectively, at the date of first-time implementation.
For operating leases prior to the date of initial execution, the Company measures the lease liability at thepresent value of the remaining lease payments discounted at the Company's incremental borrowing rate as of thedate of initial execution based on the amount equal to the lease liability, with necessary adjustments for prepaidrentals to measure the right-to-use asset.
At the date of initial implementation, the Company tests right-of-use assets for impairment and accounts forthem accordingly in accordance with Note III(XX) to these financial statements.
1) The main effects of the implementation of the new lease standard on the Company's financial statements asof January 1, 2021 are as follows:
| Item | Balance Sheet | ||
| December 31, 2020 | Impact of new lease standard adjustment | December 31, 2021 | |
| Right-to-use assets | 269,670,508.77 | 123,383,672.18 | 393,054,180.95 |
| Other current assets | 146,623,787.19 | -758,190.43 | 145,865,596.76 |
| Other non-current assets | 39,438,331.18 | -720,572.67 | 38,717,758.51 |
| Non-current liabilities due within one year | 221,714,183.90 | 30,609,489.89 | 252,323,673.79 |
| Lease obligations | 246,303,999.08 | 91,295,419.19 | 337,599,418.27 |
2) Simplified treatment applied to operating leases prior to the date of initial execution(i) For lease contracts completed within 12 months after the date of initial execution, the company adopts thesimplified method and does not recognize right-of-use assets and lease liabilities.(ii) The company uses the same discount rate for lease contracts with similar characteristics when measuringlease liabilities.(iii) The measurement of right-of-use assets does not include initial direct costs.(iv) The company determines the lease term based on the actual exercise of the option to renew the lease or theoption to terminate the lease prior to the first execution date and other updates.(v) As a substitute for impairment testing of right-of-use assets, the company assesses whether the contractcontaining the lease is a loss-making contract prior to the date of initial execution in accordance with "CASBENo.13 - Contingencies" and adjusts the right-of-use asset based on the amount of the provision for loss recorded atthe balance sheet date prior to the date of initial execution.(vi) If a lease change occurs before the date of initial execution, the company accounts for the lease changeaccording to the final arrangement of the lease change.The above simplified treatment has no significant impact on the Company's financial statements.
3) For operating lease contracts for low-value assets existing before the date of first execution, the Companyadopts the simplified method of not recognizing right-of-use assets and lease liabilities, and accounts for them inaccordance with the new lease standard from the date of first execution.
4) For lease contracts where the Company is the lessor, the Company shall account for them in accordancewith the new leasing standard from the date of first execution.
5) Treatment of sale and leaseback transactions existing before the date of first execution
For sale and leaseback transactions existing before the date of first-time execution, the Company does notreassess whether the transfer of assets meets the requirements of "CASBE No. 14 - Revenue" for accounting as asale on the date of first-time execution.
For leaseback transactions that were accounted for as sales and finance leases prior to the date of initialexecution, the Company, as the seller (lessee), accounts for the leaseback in the same manner as other finance leasesexisting at the date of initial execution and continues to amortize the related deferred gain or loss over the lease term.
For sale and leaseback transactions that were accounted for as sales and operating leases prior to the date ofinitial execution, the Company, as the seller (lessee), accounts for the leasebacks in the same manner as otheroperating leases existing at the date of initial execution and adjusts the right-of-use assets based on the relateddeferred gains or losses recorded on the balance sheet prior to the date of initial execution.
2. The Company implemented the Interpretation of "CASBE No. 14" issued by the Ministry of Finance infiscal 2021 effective January 26, 2021, and this change in accounting policy had no impact on the Company'sfinancial statements.
3. The Company will implement the "CASBE No. 15" issued by the Ministry of Finance on December 31, 2021,and the change in accounting policy will have no impact on the Company's financial statements.
(2) Significant changes in accountingestimates
□ Applicable √ Not Applicable
(3) Adjustments of the related financial statement items at the beginning of the years since 2021preliminary use new revenue principles and new lease standards
√ Applicable □ Not Applicable
Whether need to adjust the balance sheet account at the beginning of the year
√ Yes□ No
Consolidated balance sheet
Unit: Yuan
| Items | December 31, 2020 | December 31, 2021 | Amount adjusted |
| Current assets: | |||
| Cash and bank balances | 3,750,506,068.39 | 3,750,506,068.39 | |
| Settlement funds | |||
| Loans to other banks | |||
| Held-for-trading financial assets | 63,751,278.55 | 63,751,278.55 | |
| Derivative financial assets | |||
| Notes receivable | 11,530,057.49 | 11,530,057.49 | |
| Accounts receivable | 1,260,096,723.75 | 1,260,096,723.75 | |
| Receivables financing | 378,066,065.73 | 378,066,065.73 | |
| Prepaid expenses | 80,008,380.84 | 80,008,380.84 | |
| Premiums receivable | |||
| Reinsurance accounts receivable | |||
| Reinsurance reservereceivable | |||
| Other receivables | 58,613,172.02 | 58,613,172.02 | |
| Including: interest receivable | |||
| Dividends receivable | |||
| Financial assets under reverse repo | |||
| Inventories | 1,386,320,837.86 | 1,386,320,837.86 | |
| Contract assets | |||
| Assets classified as held for sale | |||
| Non-current assets due within one year | 90,583.31 | 90,583.31 | |
| Other current assets | 146,623,787.19 | 145,865,596.76 | -758,190.43 |
| Total current assets | 7,135,606,955.13 | 7,134,848,764.70 | -758,190.43 |
| Non-current assets: | |||
| Loans and advances paid | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | 2,866,819.08 | 2,866,819.08 | |
| Long-term equity investments | 2,207,878,459.67 | 2,207,878,459.67 | |
| Other equity instrument investments | 16,550,000.00 | 16,550,000.00 | |
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 1,348,034,595.31 | 1,348,034,595.31 | |
| Construction in progress | 166,268,204.96 | 166,268,204.96 | |
| Productive biological assets | |||
| Oil & gas assets | |||
| Right-of-use assets | 269,670,508.77 | 393,054,180.95 | 123,383,672.18 |
| Intangible assets | 607,716,594.78 | 607,716,594.78 | |
| Developmentexpenditures | |||
| Goodwill | 1,825,527,983.56 | 1,825,527,983.56 | |
| Long-term prepayments | 16,407,174.63 | 16,407,174.63 | |
| Deferred tax assets | 41,813,418.61 | 41,813,418.61 | |
| Other non-current assets | 39,438,331.18 | 38,717,758.51 | -720,572.67 |
| Total non-current assets | 6,542,172,090.55 | 6,664,835,190.06 | 122,663,099.51 |
| Total assets | 13,677,779,045.68 | 13,799,683,954.76 | 121,904,909.08 |
| Current liabilities: | |||
| Short-term borrowings | 1,015,117,910.75 | 1,015,117,910.75 | |
| Central bank loans | |||
| Loans from other banks |
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 24,913,000.00 | 24,913,000.00 | |
| Accounts payable | 1,168,327,985.88 | 1,168,327,985.88 | |
| Advances received | |||
| Contract liabilities | 72,490,372.55 | 72,490,372.55 | |
| Financial liabilities under repo | |||
| Absorbing deposit and interbank deposit | |||
| Deposit for agency security transaction | |||
| Deposit for agency security underwriting | |||
| Employee compensation payable | 195,907,997.48 | 195,907,997.48 | |
| Taxes and rates payable | 185,995,732.67 | 185,995,732.67 | |
| Other payables | 26,425,047.57 | 26,425,047.57 | |
| Including: interest payable | |||
| Dividends payable | |||
| Handling fee and commission payable | |||
| Reinsurance accounts payable | |||
| Liabilities classified as held for sale | |||
| Non-current liabilities due within one year | 221,714,183.90 | 252,323,673.79 | 30,609,489.89 |
| Other current liabilities | |||
| Total current liabilities | 2,910,892,230.80 | 2,941,501,720.69 | 30,609,489.89 |
| Non-current liabilities: | |||
| Insurancepolicy reserve |
| Long-term borrowings | 509,555,882.91 | 509,555,882.91 | |
| Bonds payable | 799,729,005.89 | 799,729,005.89 | |
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Lease liabilities | 246,303,999.08 | 337,599,418.27 | 91,295,419.19 |
| Long-term payables | 1,499,174.07 | 1,499,174.07 | |
| Long-term Employee compensation payable | 77,924,731.15 | 77,924,731.15 | |
| Provisions | 3,550,413.29 | 3,550,413.29 | |
| Deferred income | 3,992,738.59 | 3,992,738.59 | |
| Deferred tax liabilities | 86,920,686.60 | 86,920,686.60 | |
| Othernon-current liabilities | |||
| Total non-current liabilities | 1,729,476,631.58 | 1,820,772,050.77 | 91,295,419.19 |
| Total liabilities | 4,640,368,862.38 | 4,762,273,771.46 | 121,904,909.08 |
| Equity: | |||
| Share capital | 1,075,247,700.00 | 1,075,247,700.00 | |
| Other equity instruments | 190,509,257.28 | 190,509,257.28 | |
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserve | 2,095,044,541.15 | 2,095,044,541.15 | |
| Less: Treasury shares | 105,492,690.23 | 105,492,690.23 | |
| Other comprehensive income | -105,837,346.87 | -105,837,346.87 | |
| Special reserve | |||
| Surplus reserve | 521,602,764.46 | 521,602,764.46 | |
| General risk reserve | |||
| Undistributed profit | 5,155,116,352.49 | 5,155,116,352.49 | |
| Total equity attributable to the parent company | 8,826,190,578.28 | 8,826,190,578.28 | |
| Non-controlling interest | 211,219,605.02 | 211,219,605.02 |
| Total owners’ equity | 9,037,410,183.30 | 9,037,410,183.30 | |
| Total liabilities & owners’ equity | 13,677,779,045.68 | 13,799,683,954.76 | 121,904,909.08 |
Instruction for adjustmentsParent company balance sheet
Unit: Yuan
| Items | December 31, 2020 | January 01, 2021 | Amount adjusted |
| Current assets: | |||
| Cash and bank balances | 2,287,675,650.67 | 2,287,675,650.67 | |
| Held-for-trading financial assets | 13,386,400.00 | 13,386,400.00 | |
| Derivative financial assets | |||
| Notes receivable | 8,314,207.49 | 8,314,207.49 | |
| Accounts receivable | 1,275,860,264.50 | 1,275,860,264.50 | |
| Receivables financing | 368,774,999.78 | 368,774,999.78 | |
| Prepaid expenses | 39,010,545.50 | 39,010,545.50 | |
| Other receivables | 883,363,518.44 | 883,363,518.44 | |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Inventories | 77,384,999.66 | 77,384,999.66 | |
| Contract assets | |||
| Assets classified as held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 65,377,083.73 | 65,377,083.73 | |
| Total current assets | 5,019,147,669.77 | 5,019,147,669.77 | |
| Non-current assets: | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity | 5,155,164,634.30 | 5,155,164,634.30 |
| investments | |||
| Other equity instrument investments | 16,550,000.00 | 16,550,000.00 | |
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 142,635,599.93 | 142,635,599.93 | |
| Construction in progress | 5,723,398.50 | 5,723,398.50 | |
| Productive biological assets | |||
| Oil & gas assets | |||
| Right-of-use assets | |||
| Intangible assets | 17,746,992.84 | 17,746,992.84 | |
| Development expenditures | |||
| Goodwill | |||
| Long-term prepayments | |||
| Deferred tax assets | 15,288,010.17 | 15,288,010.17 | |
| Other non-current assets | 1,957,642.06 | 1,957,642.06 | |
| Total non-current assets | 5,355,066,277.80 | 5,355,066,277.80 | |
| Total assets | 10,374,213,947.57 | 10,374,213,947.57 | |
| Current liabilities: | |||
| Short-term borrowings | 960,645,447.14 | 960,645,447.14 | |
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Accounts payable | 738,095,592.36 | 738,095,592.36 | |
| Advances received | |||
| Contract liabilities | 39,453,211.46 | 39,453,211.46 | |
| Employee compensation payable | 45,611,342.23 | 45,611,342.23 | |
| Taxes and rates payable | 103,261,356.89 | 103,261,356.89 |
| Other payables | 23,933,506.71 | 23,933,506.71 | |
| Including: interest payable | |||
| Dividends payable | |||
| Liabilities classified as held for sale | |||
| Non-current liabilities due within one year | 73,585,483.86 | 73,585,483.86 | |
| Other current liabilities | |||
| Total current liabilities | 1,984,585,940.65 | 1,984,585,940.65 | |
| Non-current liabilities: | |||
| Long-term borrowings | 220,836,522.82 | 220,836,522.82 | |
| Bonds payable | 799,729,005.89 | 799,729,005.89 | |
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Lease liabilities | |||
| Long-term payables | |||
| Long-term Employee compensation payable | |||
| Provisions | |||
| Deferred income | 2,377,073.64 | 2,377,073.64 | |
| Deferred tax liabilities | 6,363,085.38 | 6,363,085.38 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 1,029,305,687.73 | 1,029,305,687.73 | |
| Total liabilities | 3,013,891,628.38 | 3,013,891,628.38 | |
| Equity: | |||
| Share capital | 1,075,247,700.00 | 1,075,247,700.00 | |
| Other equity instruments | 190,509,257.28 | 190,509,257.28 | |
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserve | 2,103,492,365.12 | 2,103,492,365.12 | |
| Less: Treasury shares | 105,492,690.23 | 105,492,690.23 | |
| Other comprehensive | -27,385,736.04 | -27,385,736.04 |
| income | |||
| Special reserve | |||
| Surplus reserve | 517,854,467.55 | 517,854,467.55 | |
| Undistributed profit | 3,606,096,955.51 | 3,606,096,955.51 | |
| Total owners’equity | 7,360,322,319.19 | 7,360,322,319.19 | |
| Total liabilities &owners’equity | 10,374,213,947.57 | 10,374,213,947.57 |
Instruction for adjustments
(4) Instructions of retrospectively adjusted comparative data since 2021 preliminary adopt to new revenueprinciples and new lease standards
□ Applicable √ Not Applicable
45. Others
VI. Taxes
1. Main taxes and tax rates
| Taxes | Taxation basis | Tax rates |
| Value-added tax (VAT) | The output tax calculated based on the revenue from sales of goods or rendering of services in accordance with the tax law, net of the input tax that is allowed to be deducted in the current period,thedifference shall be the value-added taxpayable | 13%、6% |
| Urban maintenance and construction tax | Turnover tax actually paid | 7%、5% |
| Enterprise income tax | Taxable income | See the instruction of the enterprise income tax rate of the tax payers with different tax rates |
| Housing property tax | For housing property levied on the basis of price, housing property tax is levied at the rate of 1.2% ofthe balance after deducting 30% of the cost; for housing property levied on the basis of rent, housingproperty tax is levied at the rate of 12% ofrent | 1.2%、12% |
| revenue. | ||
| Education surcharge | Turnover tax actually paid | 3% |
| Local education surcharge | Turnover tax actually paid | 2% |
Different enterprise income tax rates applicable to different taxpayers:
| Taxpayers | Income tax rate |
| The Company | 15% |
| Hong Kong Great Star International Co., Ltd. | 16.50% |
| Prim' Tools Limited | 16.50% |
| HongKong Goldblatt Industrial Co.,Ltd | 16.50% |
| Hong Kong International Huada Kejie Opto-Electro Instrument Co., Ltd. | 16.50% |
| Hongkong Shop-Vac International Co., Limited | 16.50% |
| Geelong Sales Company International (HK) Limited | 16.50% |
| Changzhou Huada Kejie Opto-electro Instrument Co., Ltd. | 15% |
| Hangzhou United Electric Manufacture Co., Ltd. | 15% |
| Dongguan Ouda Electronics Ltd. | 15% |
| Hangzhou GreatStar Intelligent Technology Co., Ltd. | 15% |
| Hangzhou United Tools Co., Ltd. | 15% |
| Hangzhou United Precision Tool Company | 15% |
| Zhejiang Yiyang Tool Manufacture Co., Ltd. | 15% |
| Suzhou Xindadi Hardware Product Co., Ltd. | 15% |
| Zhongshan Geelong Industrial Co., Ltd | 15% |
| Geelong Investment Holding Limited | 15% |
| Greatstar Europe AG and its subsidiaries | 13.59%、19%、21%、23.53%、24%、26.50%、27.50%、27.90%、29.13% |
| Longyou Yiyang Forging Co., Ltd. | 20% |
| Longyou Yiyang Import & Export Trading Co., Ltd. | 20% |
| Zhejiang Guoxin Tools Co., Ltd. | 20% |
| Changzhou Huada Kejie Construction Machinery Co., Ltd. | 20% |
| Haining Great Star Hardware Tools Co., Ltd. | 20% |
| Great Star Vietnam Co.,Ltd | 20% |
| Vietnam United Co.,Ltd | 20% |
| International Storage Solutions Limited | 20% |
| TGH(Cambodia)Industrial Co.,LTD | 20% |
| Geelong (Thailand) Co .,Ltd | 20% |
| GreatStar Industrial Vietnam Co., Ltd | 20% |
| XDD Products (USA) LLC | 21% |
| Newland.LLC | 21% |
| Great Star Tools USA,Inc and its subsidiaries[Note 1] | 21.1745% |
| Great Star Japan Co.,Ltd | [Note 2] |
| GreatStar International Holdings Limited | [Note 3] |
| Geelong Orchid Holding Limited | [Note 4] |
| Geelong Holdings Limited | [Note 4] |
| Geelong Sales (Macau Commercial) Limited | [Note 5] |
| Taxpayers other than the above-mentioned | 25% |
| [Note 1]:According to the US Internal Revenue Code, Great Star Industrial USA, LLC, Arrow Fastener Co., LLC, Prime-Line Products, LLC, 4900 Highlands Parkway, LLC and Hangzhou Equipment Holdings, LLC are not required to declare and pay enterprise income tax as LLCs. The subject of taxliability is Great Star Tools USA, Inc. | |
| [Note 2]:Great Star Japan Co., Ltd. applies progressive tax rate to pay enterprise income tax. | |
| [Note 3]:GreatStarInternational Holdings Limited is a company registered in the British Virgin Islands. According to the British Virgin Islands tax system, no enterprise income tax is required. | |
| [Note 3]:Geelong Orchid Holding Limited and Geelong Holdings Limited are companies registered in the British Virgin Islands. According to the British Virgin Islands tax system, no enterprise income tax is required. | |
| [Note 5] A corporate income tax rate of 0% applies to taxable income up to MOP600,000, and a corporate income tax rate of 12% applies to any amount exceeding MOP600,000. |
2. Tax preferential policies
1. According to the relevant provisions of the “Administrative Measures for the Recognition of High-techEnterprises” (Guo Ke Fa Huo [2016] No. 32) and the “Guidelines for the Management of High-tech EnterpriseRecognition” (Guo Ke Fa Huo [2016] No.
195),theCompanywasrecognizedasahigh-techenterprise,andobtainedthe“High-techEnterpriseCertificate”withthenumberofGR201933003334 for a valid period of 3 years (from Year 2019 to Year 2021), and the enterprise incometax is calculated and levied at a tax rate of 15% in2021.
2. According to the “List of the First Batch of High-tech Enterprises to be Recognized in Jiangsu Province in2020” by the National High-tech Enterprise Certification Management Leading Group Office, the subsidiary
Changzhou Huada Kejie Opto-electro Instrument Co., Ltd. was recognized as a high-tech enterprise and obtainedthe “High-tech Enterprise Certificate” with the number of GR202032002996 for a valid period of 3 years (fromYear 2020 to Year 2022), and the enterprise income tax is calculated and levied at a tax rate of 15% in 2021.
3. According to the relevant provisions of the “Administrative Measures for the Recognition of High-techEnterprises” (Guo Ke Fa Huo [2016] No. 32) and the “Guidelines for the Management of High-tech EnterpriseRecognition” (Guo Ke Fa Huo [2016] No. 195), the sub-subsidiary Hangzhou United Electric Manufacturing Co.,Ltd. was recognized as a high-tech enterprise, and obtained the “High-tech Enterprise Certificate” with the numberof GR201933005763 for a valid period of 3 years (from Year 2019 to Year 2021), and the enterprise income tax iscalculated and levied at a tax rate of 15% in2021.
4. According to the relevant provisions of the “Administrative Measures for the Recognition of High-techEnterprises” (Guo Ke Fa Huo [2016] No. 32) and the “Guidelines for the Management of High-tech EnterpriseRecognition” (Guo Ke Fa Huo [2016] No. 195), the sub-subsidiary Dongguan Ouda Electronics Ltd. wasrecognized as a high-tech enterprise, and obtained the “High-tech Enterprise Certificate” with the number ofGR202144002851 for a valid period of 3 years (from Year 2021 to Year 2023), and the enterprise income tax iscalculated and levied at a tax rate of 15% in2021.
5.Accordingtothe“ResponsetoZhejiangProvince’s2020High-techEnterpriseRegistration”(GuoKeHuoZi[2020]No.251)bytheNationalHigh-techEnterpriseCertificationManagementLeadingGroupOffice,thesubsidiaryHangzhouGreatStarIntelligent Technology Co., Ltd. was recognized as a high-tech enterprise, and obtained the “High-tech EnterpriseCertificate” with the number of GR202033007432 for a valid period of 3 years (from Year 2020 to Year 2022), andthe enterprise income tax is calculated and levied at a tax rate of 15% in2021.
6.Accordingtothe“ResponsetoZhejiangProvince’s2020High-techEnterpriseRegistration”(GuoKeHuoZi[2020]No.251)bytheNationalHigh-techEnterpriseCertificationManagementLeadingGroupOffice,thesubsidiaryHangzhouUnitedToolsCo., Ltd. was recognized as a high-tech enterprise, and obtained the “High-tech Enterprise Certificate” withthe number of GR202133002795 for a valid period of 3 years (from Year 2021 to Year 2023), and the enterpriseincome tax is calculated and levied at a tax rate of 15% in2021.
7.Accordingtothe“ResponsetoZhejiangProvince’s2020High-techEnterpriseRegistration”(GuoKeHuoZi[2020]No.25
1) bytheNationalHigh-techEnterpriseCertificationManagementLeadingGroupOffice,thesubsidiaryHangzhouLiansheng Quantity Equipment Manufacturing Co., Ltd. was recognized as a high-tech enterprise, and obtainedthe “High-tech Enterprise Certificate” with the number of GR202133004728 for a valid period of 3 years (fromYear 2021 to Year 2023), and the enterprise income tax is calculated and levied at a tax rate of 15% in2021.
8. According to the relevant provisions of the “Administrative Measures for the Recognition of High-techEnterprises” (Guo Ke Fa Huo [2016] No. 32) and the “Guidelines for the Management of High-tech EnterpriseRecognition” (Guo Ke Fa Huo [2016] No. 195),thesub-subsidiaryZhejiang Yiyang Tool Manufacturing Co.,Ltd.wasrecognizedasahigh-techenterprise,andobtainedthe“High-techEnterpriseCertificate”withthenumberofGR201933001929foravalidperiod of3years(fromYear2019toYear2021),andthe enterprise income tax is calculated andlevied at a tax rate of 15% in2021.
9. According to the relevant provisions of the “Administrative Measures for the Recognition of High-techEnterprises” (Guo Ke Fa Huo [2016] No. 32) and the “Guidelines for the Management of High-tech EnterpriseRecognition” (Guo Ke Fa Huo [2016] No. 195),thesub-subsidiarySuzhou Xindadi Hardware Products Co.,
Ltd.wasrecognizedasahigh-techenterprise,andobtainedthe“High-techEnterpriseCertificate”withthenumberofGR202132006099foravalidperiod of3years(fromYear2019toYear2021),andthe enterprise income tax is calculated andlevied at a tax rate of 15% in2021.
10. According to the "Reply Letter on the Third Batch of High and New Technology Enterprises Recorded inGuangdong Province in 2019" (Guo Ke Huo Zi [2020] No. 54) of the Office of the National High and NewTechnology Enterprise Recognition Management Group, the sub-subsidiary Zhongshan Geelong Industrial Co.,Ltd. was recognized as a high-tech enterprise and obtained the "High and New Technology Enterprise Certificate"with the number GR201944009085, which is recognized as valid for 3 years (2019-2021) and the corporateincome tax is calculated at 15% tax rate for the year 2021.
11.In accordance with the “Notice on Issuing the Administrative Measures for VAT Preferential Policies forPromoting Employment of the Disabled” by Ministry of Finance and State Taxation Administration (Cai Shui[2016] No. 52), the subsidiaryLongyouHugongForgingThreeToolsCo.,Ltd.arrangesemploymentforthedisabled.Afterfilingwith the competent tax authority, it enjoys the preferentialpolicy of limited VAT refund upon collection in2021.
12. According to the document of the Ministry of Finance and the State Administration of Taxation on theImplementation of Preferential Income Tax Policies for Small and Micro Enterprises and Individual Entrepreneurs(Announcement No. 12 of 2021 by the Ministry of Finance and the State Administration of Taxation), fromJanuary 1, 2021 to December 31, 2022, for the part of the annual taxable income of small and slightly profitableenterprises not exceeding 1 million yuan, the taxable income shall be reduced by 12.50% and the enterpriseincome tax shall be paid at a rate of 20%; for the part of the annual taxable income exceeding 1 million yuan butnot exceeding 3 million yuan, the taxable income is reduced by 50% and the enterprise income tax is paid at a rateof 20%. From January 1, 2021 to December 31, 2021, Longyou Yiyang Forging Co., Ltd, Longyou Yiyang Import& Export Trading Co., Ltd, Zhejiang Guoxin Tools Co., Ltd, Changzhou Huada Kejie Construction MachineryCo., Ltd and Haining Great Star Hardware Tools Co., Ltd are applicable to the preferential income tax policy andpay enterprise income tax at 20% rate.
3. Other
VII. Notes to items of consolidated financial statements
1. Monetary Funds
Unit: Yuan
| Items | Closing balance | Opening balance |
| Cash on hand | 2,574,760.83 | 2,874,834.15 |
| Cash in bank | 3,983,507,419.70 | 3,722,569,979.24 |
| Other cash and bank balances | 47,625,059.63 | 25,061,255.00 |
| Total | 4,033,707,240.16 | 3,750,506,068.39 |
| Including: Deposited overseas | 802,607,925.10 | 692,993,182.89 |
| Restricted funds causedby mortgage, pledge or blocked,etc. | 32,520,998.98 | 20,242,850.31 |
Other remarks:
Other monetary funds at the end of the period included bank acceptance deposits of 27,725,700.00 RMB,securities account funds of 13,598,051.60 RMB, forward exchange settlement deposits of 2,295,252.00 RMB,ETC deposits of 32,000.00 RMB, customs duty bond deposits of 1,975,140.00 RMB, engineering performancedeposits of 492, 906.98 RMB, and deposits deposited in Alipay amounted of 1,506,009.05RMB. Othermonetary funds at the beginning of the period included bank acceptance deposits of 14,267,400.00 RMB,investment deposits deposited of 2,154,766.92 RMB, forward exchange settlement deposits of 3,295,074.50 RMB,engineering performance deposits of 495,608.89, ETC deposits of 30,000.00 RMB and deposits deposited withAlipay of 4,818,404.69 RMB.
2.Held-for-trading financial assets
Unit: Yuan
| Items | Closing balance | Opening balance |
| Including: | 13,557,757.75 | 63,751,278.55 |
| Financial assets classified as at fair value through profit or loss | ||
| Including: | 27,191,411.52 | |
| Debt instrument investments | 4,330,070.00 | 36,027,480.86 |
| Derivative financial assets | 9,227,687.75 | 532,386.17 |
| Including: | ||
| Total | 13,557,757.75 | 63,751,278.55 |
Other remarks:
3. Derivative financial assets
Unit: Yuan
| Item | Closing balance | Opening balance |
Other remarks:
4.Notes receivable
(1)Details oncategories
Unit: Yuan
| Item | Closing balance | Opening balance |
| Bank acceptance | 5,663,502.93 | 9,706,191.40 |
| Trade acceptance | 966,411.25 | 1,823,866.09 |
| Total | 6,629,914.18 | 11,530,057.49 |
Unit: Yuan
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | Proportion | Amount | Provision proportions | Amount | Proportion | Amount | Provision proportions | |||
| Receivables withprovision for baddebts made on acollective basis | 6,629,914.18 | 100.00% | 6,629,914.18 | 11,530,057.49 | 100.00% | 11,530,057.49 | ||||
| Including: | ||||||||||
| Bank acceptance | 5,663,502.93 | 85.42% | 5,663,502.93 | 9,706,191.40 | 84.18% | 9,706,191.40 | ||||
| Trade acceptance | 966,411.25 | 14.58% | 966,411.25 | 1,823,866.09 | 15.82% | 1,823,866.09 | ||||
| Including: | ||||||||||
| Total | 6,629,914.18 | 100.00% | 6,629,914.18 | 11,530,057.49 | 100.00% | 11,530,057.49 | ||||
Bad debts provision made on an individual basis
Unit: Yuan
| Name | Closing balance | |||
| Book balance | Provision for bad debts | Provision proportions | Provision reason | |
Bad debts provision made on a portfolio basis:
Unit: Yuan
| Items | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportions | |
| Bank acceptance portfolio | 5,663,502.93 | ||
| Trade acceptance portfolio | 966,411.25 | ||
| Subtotal | 6,629,914.18 | -- | |
Instructions of this portfolio recognition basisBad debts provision made on a portfolio basis:
Unit: Yuan
| Name | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportions | |
Instructions of this portfolio recognition basisProvision for bad debts of accounts receivable is made in accordance with the general model of expected credit loss, please refer to
the disclosure of other receivables to disclose the relevant information on the provision for bad debts:
□ Applicable √ Not Applicable
(2) Provision , recovered or reversed of the bad debt in currentperiod
Provision for bad debts in current period
Unit: Yuan
| Category | Opening balance | Amount | Closing balance | |||
| Provision | Reversal | Write-off | Others | |||
The major provision for bad debts reversal in current period:
□ Applicable √ Not Applicable
(3) Pledged notes receivable at end of the accountperiod
Unit: Yuan
| Item | Closing balance of pledged |
(4) Notes receivable by the Company endorsed or discounted and not due on the balance sheetdate
Unit: Yuan
| Item | Closing balance derecognized | Closing balance unrecognized |
(5) Notesreceivabletransfertoaccountsreceivableduetothefailuretoperformanceatendoftheperiod.
Unit: Yuan
| Item | Closing balance of accounts receivable transferred |
Other instructions
(6) Notes receivable actually written off in currentperiod
Unit: Yuan
| Item | Written off amount |
Including the major written off of the notes receivables:
Unit: Yuan
| Company name | Notes receivable categorized by nature | Written off amount | Written off reason | Written off procedure | Related to related party or not |
Instructions for written off the notes receivables:
5. Accounts receivable
(1) Details oncategories
Unit: Yuan
| Categories | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | Proportion | Amount | Provision proportions | Amount | Proportion | Amount | Provision proportions | |||
| Receivables with provision made on an individual basis | ||||||||||
| Including: | 1,899,008,012.88 | 100.00% | 100,742,507.35 | 5.31% | 1,798,265,505.53 | 1,331,711,858.42 | 100.00% | 71,615,134.67 | 5.38% | 1,260,096,723.75 |
| Receivables with provision made on a collective basis | ||||||||||
| Including: | 1,899,008,012.88 | 100.00% | 100,742,507.35 | 5.31% | 1,798,265,505.53 | 1,331,711,858.42 | 100.00% | 71,615,134.67 | 5.38% | 1,260,096,723.75 |
| Total | 1,899,008,012.88 | 100.00% | 100,742,507.35 | 5.31% | 1,798,265,505.53 | 1,331,711,858.42 | 100.00% | 71,615,134.67 | 5.38% | 1,260,096,723.75 |
Bad debts provision made on an individual basis:
Unit: Yuan
| Items | Closing balance | |||
| Book balance | Provision for bad debts | Provision proportions | Provision reason | |
Bad debts provision made on a portfolio basis:
Unit: Yuan
| Items | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportions | |
| Portfolio grouped with age | 1,899,008,012.88 | 100,742,507.35 | 5.31% |
| Total | 1,899,008,012.88 | 100,742,507.35 | -- |
Instructions of this portfolio recognition basisBad debts provision made on an individual basis:
Unit: Yuan
| Items | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportions | |
Instructions of this portfolio recognition basisIf the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit loss, pleasereferto the disclosure of other receivables to disclose the relevant information on the provision for bad debts:
□ Applicable √ Not Applicable
Disclosure as account receivableaging
Unit: Yuan
| Ages | Book balance |
| Within 1 year(including 1 year) | 1,877,129,081.29 |
| 1-2 years | 14,433,538.66 |
| 2-3 years | 812,352.60 |
| Over 3 years | 6,633,040.33 |
| 3-4 years | 1,005,535.43 |
| 4-5 years | 1,297,873.33 |
| Over 5 years | 4,329,631.57 |
| Total | 1,899,008,012.88 |
(2) Provision , recovered or reversed of the bad debt in current period
Provision for bad debts in current period:
Unit: Yuan
| Categories | Opening balance | Changes in provision for bad debts in current period | Closing balance | |||
| Provision | Reversal | Write-off | Others | |||
| Provision made on an individual basis | ||||||
| Provision made on a portfolio basis | 71,615,134.67 | 42,251,599.69 | 10,999,220.11 | -2,125,006.90 | 100,742,507.35 | |
| Total | 71,615,134.67 | 42,251,599.69 | 10,999,220.11 | -2,125,006.90 | 100,742,507.35 | |
The major provision for bad debts reversal in current period:
Unit: Yuan
| Company name | Reversal amount | Reversal Method |
(3) Accounts receivable actually written off in current period
Unit: Yuan
| Item | Written-off amount |
| Payment for goods | 10,999,220.11 |
Including the major written off of the account receivables:
Unit: Yuan
| Company name | Account receivable categorized by nature | Write-off amount | Write-off reason | Write-off procedure | Related party or not |
Instructions for Written off the account receivables:
(4) Details of the top 5 debtors with largest balances
Unit: Yuan
| Debtors | Closing balance of Account Receivable | %of the total closing balance | Closing balance of provision for bad debts |
(5) Transfer of accounts receivable and continued involvement in formed assets and liabilities
Other remarks:
(6) Accounts receivable terminated from recognition due to the transfer of financial assetsOther remarks:
Closing balance of top 5 debtors totaled RMB703,415,411.51, accounting for 37.04% of the total closingbalance of accounts receivable, and provision for bad debts made thereon totaled RMB35,195,516.06.
6. Receivables financing
Unit: Yuan
| Item | Closing balance | Opening balance |
| Bank acceptance | 5,278,343.13 | 9,291,065.95 |
| Accounts receivable | 553,742,484.39 | 368,774,999.78 |
| Total | 559,020,827.52 | 378,066,065.73 |
Increase/decrease of receivables financing and changes in fair value in current period
√ Applicable □ Not Applicable
(1) Details oncategories
| Items | Closing balance | Opening balance | ||
| Carrying amount | Accumulated recognized credit impairment provision | Carrying amount | Accumulated recognized credit impairment provision | |
| Bankacceptance | 5,278,343.13 | 9,291,065.95 |
Accounts receivable
| Accounts receivable | 553,742,484.39 | 29,144,341.28 | 368,774,999.78 | 19,409,210.52 |
| Total | 559,020,827.52 | 29,144,341.28 | 378,066,065.73 | 19,409,210.52 |
(2) Receivables financing credit impairment provision
| Item | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance | |||
| Accrual | Exchange fluctuations | Reversal | Write-off | Others | |||
| Provision made ona collective basis | 19,409,210.52 | 9,918,842.81 | -183,712.05 | 29,144,341.28 | |||
| Total | 19,409,210.52 | 9,918,842.81 | -183,712.05 | 29,144,341.28 | |||
(3) Endorsed or discounted but undue notes at the balance sheet date
| Items | Closing balance derecognized |
| Bank acceptance | 3,530,000.00 |
| Subtotal | 3,530,000.00 |
The acceptor of the bankers' acceptances is a commercial bank. Since commercial banks have higher credit,the possibility of non-payment of bankers' acceptances at maturity is low, so the Company derecognized the bankacceptances that have been endorsed or discounted.However, if any bank acceptance is not recoverable when it isdue, the Company still holds joint liability on such acceptance, according to the China Commercial InstrumentLaw.
(4) Accounts receivable terminated from recognition due to the transfer of financial assets:
| Items | Amount derecognized | Gains or losses related toderecognition | Ways of financial assets transfer |
| Payment for goods | 1,890,192,415.67 [Note] | -4,570,835.23 | Receivables financing transfer withoutrecourse |
| Subtotal | 1,890,192,415.67 | -4,570,835.23 |
Note: Of which, the USD amount and the RMB amount of the receivables financing transfer withoutrecourse were USD 292,987,660.28 and RMB 22,190,990.02 respectively. The USD amount of financing transferwithout recourse was translated into RMB equivalent of RMB1,868,001,425.65at the closing exchange rate.
Provision for bad debts of accounts receivable is made in accordance with the general model of expected credit loss, please refer tothe disclosure of other receivables to disclose the relevant information on the provision for bad debts:
□ Applicable √ Not Applicable
Other remarks:
7.Prepayments
(1) Ageanalysis
Unit: Yuan
| Age | Closing balance | Opening balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 74,702,657.14 | 96.09% | 75,669,455.91 | 94.58% |
| 1-2 years | 1,748,154.88 | 2.25% | 2,779,725.40 | 3.47% |
| 2-3 years | 1,075,509.98 | 1.38% | 1,260,526.85 | 1.58% |
| Over 3years | 217,119.90 | 0.28% | 298,672.68 | 0.37% |
| Total | 77,743,441.90 | -- | 80,008,380.84 | -- |
Explanations for the reason prepaid expenses with material and aged over 1 year not be settled timely:
(2) Details of the top 5 debtors with largestbalances
Other remarks:
(1)Provision for bad debts made in the current period amounted to RMB-1,461,995.24. Provision for baddebts increased by RMB-128,179.64 due to exchange rate fluctuations, and increased by RMB 1,630,713.98 dueto business combination not under common control.
(2) Prepayments actually written off in current period amounted to RMB 3,095,393.56.
8. Other receivables
Unit: Yuan
| Item | Closing balance | Opening balance |
| Other receivables | 96,151,003.68 | 58,613,172.02 |
| Total | 96,151,003.68 | 58,613,172.02 |
(1) Interest receivables
1) Interest receivables on categories
Unit: Yuan
| Item | Closing balance | Opening balance |
2) The major overdue interest receivables
Unit: Yuan
| Debtors | Closing balance | Overdue date | Overdue reason | Whether there is an impairment and its judgment basis |
Other remarks:
3) Changes in provision for bad debts
□ Applicable √ Not Applicable
(2) Dividends receivable
1) Dividends receivable on category
Unit: Yuan
| Item(or the invested unit) | Closing balance | Opening balance |
2) Material dividends receivable aged over 1 year
Unit: Yuan
| Item(or the invested unit) | Closing balance | Age | Reason for not recovered | Whether there is an impairment and its judgment basis |
3) Changes in provision for bad debts
□ Applicable √ Not Applicable
Other remarks:
(3) Other receivables
1) Other receivables categorized by nature
Unit: Yuan
| Nature of receivables | Closing balance | Opening balance |
| Export tax rebates | 61,953,922.99 | 28,999,815.42 |
| Security deposits | 24,611,560.03 | 29,411,823.59 |
| Liquidation payment of equity receivable | 6,160,202.73 | |
| Temporary advance payment receivable | 6,025,540.52 | 2,110,757.40 |
| Employee petty cash | 2,666,593.46 | 673,044.45 |
| Others | 2,653,025.72 | 1,721,743.22 |
| Total | 104,070,845.45 | 62,917,184.08 |
2) Changes in provision for bad debts
Unit: Yuan
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Opening balance | 2,946,691.76 | 122,869.18 | 1,234,451.12 | 4,304,012.06 |
| Opening balance in the current period | —— | —— | —— | —— |
| Provision made in the current period | 3,552,814.31 | 731,891.96 | 1,224,528.10 | 5,509,234.37 |
| Other changes | -1,893,404.66 | -1,893,404.66 | ||
| Closing balance | 4,606,101.41 | 854,761.14 | 2,458,979.22 | 7,919,841.77 |
The book balance movements of the material provision for bad debts in current period
□ Applicable √ Not Applicable
By age
Unit: Yuan
| Age | Book balance |
| Within 1 Year | 92,122,027.98 |
| 1-2years | 8,547,611.41 |
| 2-3ears | 823,447.61 |
| Over 3years | 2,577,758.45 |
| 3-4years | 220,257.12 |
| 4-5years | 258,577.55 |
| Over 5years | 2,098,923.78 |
| Total | 104,070,845.45 |
3) Provision , recovered or reversed of the bad debt in current period
Provision for bad debts in current period:
Unit: Yuan
| Categories | Opening balance | Changes in provision for bad debts in current period | Closing balance | |||
| Provision | Reversal | Write-off | Others | |||
| Within 1 Year | 2,946,691.76 | 3,552,814.31 | -1,893,404.66 | 4,606,101.41 | ||
| 1-2years | 122,869.18 | 731,891.96 | 854,761.14 | |||
| 2-3ears | 72,994.10 | 91,695.42 | 164,689.52 | |||
| 3-4years | 78,349.43 | -12,272.29 | 66,077.14 | |||
| 4-5years | 1,045,381.19 | -916,092.41 | 129,288.78 | |||
| Over 5years | 37,726.40 | 2,061,197.38 | 2,098,923.78 | |||
| Total | 4,304,012.06 | 5,509,234.37 | -1,893,404.66 | 7,919,841.77 |
Of which, major recovered or reversed amount in current period:
Unit: Yuan
| Debtors | recovered or reversed amount | Way to recover |
4) Other receivable actually written off in current period
Unit: Yuan
| Item | Written-off amount |
Including major written off of other receivables
Unit: Yuan
| Debtors | Nature of receivables | Written off amount | Written off reason | Written off procedure | Related party transactions or not |
Instructions for written off other Accounts receivable
5) Details of the top 5 debtors with largest balances
Unit: Yuan
| Debtors | Nature of receivables | Closing balance | Ages | Proportion to the total balance of other receivables (%) | Provision for bad debts |
| Export tax rebates | Export tax rebates | 61,953,922.99 | Within 1 year | 59.53% | 3,097,696.15 |
| Hangzhou Weiming Investment Management Co., Ltd. | Liquidation payment of equity receivable | 6,160,202.73 | Within 1 year | 5.92% | 308,010.14 |
| Cong ty Co phan Tuong Vien Grand Park | Security deposits | 4,829,000.02 | Within 1 year | 4.64% | 241,450.00 |
| Hangzhou Qiantang Intellectual City Management Committee | Security deposits | 1,007,000.00 | 1-2 year(s) | 0.97% | 100,700.00 |
| Hangzhou Qiantang Intellectual City Management Committee | Security deposits | 1,908,000.00 | Over 5years | 1.83% | 1,908,000.00 |
| Social insurance premiums paid on behalf of employees | Temporary advance payment receivable | 2,293,733.62 | Within 1 year | 2.20% | 114,686.68 |
| Total | -- | 78,151,859.36 | -- | 75.09% | 5,770,542.97 |
6) Other Accounts receivable related to government grants
Unit: Yuan
| Debtors | Government subsidy | Closing balance | Ages | Estimated collection date, amount, and basis |
7) Other accounts receivable derecognized due to financial assets transfer
8) Transfer of other accounts receivable and continued involvement in formed assets and liabilitiesOther remarks:
9.Inventory
Does the Company need to comply with the disclosure requirements of the real estate industryNo
(1) Details on categories
Unit: Yuan
| Item | Closing balance | Opening balance | ||||
| Book balance | Inventory decline or contract performance cost | Carrying amount | Book balance | Inventory decline or contract performance cost | Carrying amount | |
| impairment provision | impairment provision | |||||
| Raw materials | 828,353,943.87 | 828,353,943.87 | 366,335,310.08 | 366,335,310.08 | ||
| Work in process | 411,642,818.41 | 411,642,818.41 | 182,992,575.26 | 182,992,575.26 | ||
| Goods on hand | 1,619,622,574.68 | 47,220,974.64 | 1,572,401,600.04 | 861,447,538.76 | 32,384,531.09 | 829,063,007.67 |
| Materials onconsignment forfurther processing | 22,559,098.84 | 22,559,098.84 | 6,553,816.35 | 6,553,816.35 | ||
| Low-value consumables | 820,535.68 | 820,535.68 | 1,376,128.50 | 1,376,128.50 | ||
| Total | 2,882,998,971.48 | 47,220,974.64 | 2,835,777,996.84 | 1,418,705,368.95 | 32,384,531.09 | 1,386,320,837.86 |
(2) Inventory decline and contract performance cost impairment provision
Unit: Yuan
| Item | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance | ||||
| Accrual | Others | Write-off | Others | |||||
| 库存商品 | 32,384,531.09 | 23,005,097.06 | -1,689,922.04 | 6,478,731.47 | 47,220,974.64 | |||
| Total | 32,384,531.09 | 23,005,097.06 | -1,689,922.04 | 6,478,731.47 | 47,220,974.64 | |||
| Items | Determination basis of net realizable value | Reasons for reversal of provision for inventory write-down | Reasons for write-off of provision for inventory write-down | |||||
| Goodson hand | Estimated selling price of relevant finished goods less cost to be incurred upon completion, estimated selling expenses, and relevant taxes and surcharges | Part of inventories with provision for inventory write-down made in preceding period were sold or scrapped in the current period and write-off this partprovision for inventory | ||||||
(3) Instructions of inventory closing balance with borrowing expenses capitalization amount
(4) Instructions for the costs to fulfil a contract amortized in current period
10. Contract assets
Unit: Yuan
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
The amount and reason for the material change of the contract assets book balance :
Unit: Yuan
| Item | Increase/Decrease Amount | Cause of Change |
Provision for bad debts of contract assets is made in accordance with the general model of expected credit loss, please refer to thedisclosure of other receivables to disclose the relevant information on the provision for bad debts:
□ Applicable √ Not Applicable
Contract assets impairment in current period
Unit: Yuan
| Item | Provision made in the current period | Reversal | Write-off | Reason |
Other remarks:
11. Assets held for sale
Unit: Yuan
| Item | Closing balance | Provision for impairment | Carrying amount | Fair value | Estimated disposal costs | Estimated disposal date |
Other remarks:
12. Non-current assets due within one year
Unit: Yuan
| Item | Closing balance | Opening balance |
| Finance lease receivable | 90,708.80 | 90,583.31 |
| Total | 90,708.80 | 90,583.31 |
Major debt investments/ Other debt investments
Unit: Yuan
| Debt investments items | Closing balance | Opening balance | ||||||
| Par value | Par value interest | Effective interest rate | Maturity | Par value | Par value interest | Effective interest rate | Maturity | |
Other remarks:
13. Other current assets
Unit: Yuan
| Item | Closing balance | Opening balance |
| VAT to be credited | 160,295,028.26 | 97,366,157.47 |
| Prepaid expenses | 5,876,647.96 | 14,182,336.60 |
| Prepaid enterprise income tax | 24,135,847.39 | 13,455,322.72 |
| Interest on time deposit | 3,683,674.49 | 20,692,542.33 |
| Interest on bond investments | 169,237.64 | |
| Total | 193,991,198.10 | 145,865,596.76 |
Other remarks:
Differences between the beginning of the year and the end of the previous year (December 31, 2020) are detailed in Section X(V) 44.Notes on Changes in Significant Accounting Policies and Accounting Estimates
14. Debt investments
Unit: Yuan
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
Major debt investments
Unit: Yuan
| Item | Closing balance | Opening balance | ||||||
| Par value | Par value interest | Effective interest rate | Maturity | Par value | Par value interest | Effective interest rate | Maturity | |
Provision for impairment
Unit: Yuan
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Opening balance in the current period | —— | —— | —— | —— |
The book balance movements of the material provision for bad debts in current period
□ Applicable √ Not Applicable
Other remarks:
15. Other debt investments
Unit: Yuan
| Item | Opening balance | Interest accured | Change in fair value for the current period | Closing balance | Cost | Change in the cumulative fair value | Accumulated loss provision recognized in other comprehensi | Remark |
Major other debt investments
Unit: Yuan
ve income
Item
| Item | Closing balance | Opening balance | ||||||
| Par value | Par value interest | Effective interest rate | Maturity | Par value | Par value interest | Effective interest rate | Maturity | |
Provision for impairment
Unit: Yuan
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Opening balance in the current period | —— | —— | —— | —— |
The book balance movements of the material provision for bad debts in current period
□ Applicable √ Not Applicable
Other remarks:
16. Long-term receivables
(1) Details
Unit: Yuan
| Item | Closing balance | Opening balance | 折现率区间 | ||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | ||
| Finance lease payment | 446,386.40 | 446,386.40 | 576,205.61 | 576,205.61 | 0.75% | ||
| Including: Unrealized finance income | -14,135.20 | -14,135.20 | -17,021.38 | -17,021.38 | |||
| Deposit for land lease | 2,274,855.31 | 2,274,855.31 | 2,290,613.47 | 2,290,613.47 | |||
| Total | 2,721,241.71 | 2,721,241.71 | 2,866,819.08 | 2,866,819.08 | -- | ||
Impairment for bad debt provision
Unit: Yuan
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| 12?month expected | Lifetime expected credit | Lifetime expected credit |
| credit losses | losses (credit not impaired) | losses (credit impaired) | ||
| Opening balance in the current period | —— | —— | —— | —— |
The book balance movements of the material provision for bad debts in current period
□ Applicable √ Not Applicable
(2) Long-term receivables derecognized due to financial assets transfer
(3) Transfer of Long-term receivables and continued involvement in formed assets and liabilitiesOther instructions
17. Long-term equity investments
Unit: Yuan
| Investees | Opening balance(Carrying amount) | Increase/Decrease | Closing balance(Carrying amount) | Closing balance of provision for impairment | |||||||
| Investments increased | Investments decreased | Investment income recognize d under equity method | Adjustment in other comprehensive income | Changes in other equity | Cash dividend/ Profit declared for distribution | Provision for impairment | Others | ||||
| I. Joint ventures | |||||||||||
| II. Associates | |||||||||||
| Hangzhou Zhongce Haichao Enterprise Management Co., Ltd. | 1,169,932,406.31 | 154,907,277.48 | -53,965,729.03 | -2,008,108.15 | 1,268,865,846.61 | ||||||
| Zhejiang Hangcha Holding Co., Ltd. | 630,616,723.91 | 97,714,220.58 | -5,065,342.30 | 9,325,793.43 | 732,591,395.62 | ||||||
| Hangzhou Weiming | 58,037,63 | 59,110,20 | 1,072,569 | ||||||||
| Investment Management Co., Ltd. [Note] | 2.85 | 2.73 | .88 | ||||||||
| Zhejiang Guozhi Robotics Technology Co., Ltd. | 89,544,523.80 | -15,436,526.53 | 9,886.20 | 1,687,973.07 | 75,805,856.54 | ||||||
| Ningbo Donghai Bank Co., Ltd. | 181,319,746.49 | 8,011,052.94 | 1,230,525.43 | 190,561,324.86 | |||||||
| Changzhou Stabila Laser Instrument Co., Ltd. | 2,472,458.29 | -598,783.29 | 1,873,675.00 | ||||||||
| Hangzhou Weina Technology Co., Ltd. | 75,954,968.02 | 8,052,874.62 | 236,758.53 | 84,244,601.17 | |||||||
| Subtotal | 2,207,878,459.67 | 59,110,202.73 | 253,722,685.68 | -57,553,901.17 | 9,005,658.35 | 2,353,942,699.80 | |||||
| Total | 2,207,878,459.67 | 59,110,202.73 | 253,722,685.68 | -57,553,901.17 | 9,005,658.35 | 2,353,942,699.80 |
Other instructionsNote: According to the resolution of the shareholders' meeting of Hangzhou Weiming Investment ManagementCo., Ltd. in December 2021, it was decided to dissolve Hangzhou Weiming Investment Management Co., Ltd.and each shareholder recovered the investment with liquidation assets in proportion to the capital contribution. Asof the end of the period, the Company has recovered RMB 52,950,000 from its investment, leaving RMB6,160,200 of investment unrecovered.
18. Other equity instrument investments
Unit: Yuan
| Item | Closing balance | Opening balance |
| Hangzhou Haibang Xinhu Talent Venture Capital Investment Partnership (LP) | 16,550,000.00 | 16,550,000.00 |
| Total | 16,550,000.00 | 16,550,000.00 |
Itemized disclosure of non-trading equity instrument investments in current period
Unit: Yuan
| Items | Dividends income | Accumulative gain | Accumulative loss | Other comprehensive incometransferred to retained earnings | Reasonfor Appointedasfinancial assetsatfair value through othercomprehensive income | Reason for other comprehensive incometransferred to retained earnings |
Other remarks:
19. Other non-current financial assets
Unit: Yuan
| Item | Closing balance | Opening balance |
Other remarks:
20. Investment property
(1) Investment property measured with cost model
√ Applicable □ Not Applicable
Unit: Yuan
| Item | Houses and structures | Land use right | Construction in progress | Total |
| I. Book value | ||||
| 1.Opening balance | ||||
| 2.Amount increase in current period | 118,165,047.78 | 16,928,850.24 | 135,093,898.02 | |
| (1) External purchases | ||||
| (2) Transfer of inventories, fixed assets and construction in progress | 118,165,047.78 | 118,165,047.78 | ||
| (3) Increase in business combination | ||||
| (4) Transfer of | 16,928,850.24 | 16,928,850.24 |
| intangible assets | ||||
| 3.Amount decrease in current period | ||||
| (1) Disposal | ||||
| (2) Other transfers out | ||||
| 4.Closing balance | 118,165,047.78 | 16,928,850.24 | 135,093,898.02 | |
| II. Accumulated depreciation and cumulative amortization | ||||
| 1.Opening balance | ||||
| 2.Amount increase in current period | 6,059,898.87 | 1,975,032.46 | 8,034,931.33 | |
| (1) Accrual or amortization | 3,810,549.80 | 282,147.50 | 4,092,697.30 | |
| (2) Transfer of fixed assets | 2,249,349.07 | 2,249,349.07 | ||
| (3) Transfer of intangible assets | 1,692,884.96 | 1,692,884.96 | ||
| 3.Amount decrease in current period | ||||
| (1) Disposal | ||||
| (2) Other transfers out | ||||
| 4.Closing balance | 6,059,898.87 | 1,975,032.46 | 8,034,931.33 | |
| III. Provision for impairment | ||||
| 1.Opening balance | ||||
| 2.Amount increase in current period | ||||
| (1) Provision | ||||
| 3. Amount decrease in current period |
| (1) Disposal | ||||
| (2) Other transfers out | ||||
| 4.Closing balance | ||||
| IV. Carrying amount | ||||
| 1.Closing carrying amount | 112,105,148.91 | 14,953,817.78 | 127,058,966.69 | |
| 2.Opening carrying amount | 0.00 | 0.00 |
(2) Investment property measured with fair value model
□ Applicable √ Not Applicable
(3) Investment property with certificate of titles being unsettled
Unit: Yuan
| Item | Carrying amount | Reasons for unsettlement |
Other instructions
21. Fixed assets
Unit: Yuan
| Item | Closing balance | Opening balance |
| Fixed assets | 1,494,547,487.29 | 1,348,034,595.31 |
| Total | 1,494,547,487.29 | 1,348,034,595.31 |
(1) Details
Unit: Yuan
| Item | Buildings and structures | General equipment | Special equipment | Transport facilities | Total |
| I. Original book value | |||||
| 1.Opening balance | 1,191,732,665.13 | 124,755,449.68 | 966,232,053.97 | 31,945,064.83 | 2,314,665,233.61 |
| 2.Amount increase in current period | 186,100,038.06 | 94,304,982.40 | 396,904,841.77 | 13,537,421.68 | 690,847,283.91 |
| 1) Acquisition | 15,618,472.47 | 20,329,105.58 | 129,904,359.49 | 4,238,372.14 | 170,090,309.68 |
| 2) Transferred in from construction in progress | 130,044,371.33 | 683,676.70 | 76,608,155.69 | 207,336,203.72 | |
| 3)Business combination | 59,576,658.94 | 74,993,606.23 | 218,441,314.42 | 9,741,433.94 | 362,753,013.53 |
| 4)Effect of exchange rate fluctuations | -19,139,464.68 | -1,701,406.11 | -28,048,987.83 | -442,384.40 | -49,332,243.02 |
| 3.Amount decrease in current period | 155,972,713.45 | 10,229,137.19 | 37,873,499.07 | 1,251,463.31 | 205,326,813.02 |
| (1)Disposal/Scrapping | 39,435,571.89 | 8,601,230.97 | 37,873,499.07 | 1,251,463.31 | 87,161,765.24 |
| (2) Transfer into investment real estate | 116,537,141.56 | 1,627,906.22 | 118,165,047.78 | ||
| 4.Closing balance | 1,221,859,989.74 | 208,831,294.89 | 1,325,263,396.67 | 44,231,023.20 | 2,800,185,704.50 |
| II. Accumulated depreciation | |||||
| 1.Opening balance | 309,908,861.17 | 77,433,473.38 | 551,248,413.51 | 28,039,890.24 | 966,630,638.30 |
| 2.Amount increase in current period | 71,336,762.48 | 77,020,740.10 | 212,298,811.41 | 10,747,348.34 | 371,403,662.33 |
| (1) Accrual | 52,115,235.85 | 17,771,132.75 | 93,711,188.86 | 3,174,544.02 | 166,772,101.48 |
| (2) Increase in business combination | 24,934,992.34 | 60,165,772.35 | 128,778,214.43 | 7,940,442.86 | 221,819,421.98 |
| (3) Effect of exchange rate changes | -5,713,465.71 | -916,165.00 | -10,190,591.88 | -367,638.54 | -17,187,861.13 |
| 3.Amount decrease in current period | 4,334,165.43 | 8,062,648.72 | 19,640,316.94 | 1,141,352.76 | 33,178,483.85 |
| (1)Disposal/Scrapping | 2,226,901.31 | 7,920,563.77 | 19,640,316.94 | 1,141,352.76 | 30,929,134.78 |
| (2) Transfer into investment real estate | 2,107,264.12 | 142,084.95 | 2,249,349.07 | ||
| 4.Closing balance | 376,911,458.22 | 146,391,564.76 | 743,906,907.98 | 37,645,885.82 | 1,304,855,816.78 |
| III.Provision for impairment | |||||
| 1.Opening balance | |||||
| 2.Amount increase in current period | 782,400.43 | 782,400.43 | |||
| (1) Accrual | |||||
| (2) Increase in business combination | 782,400.43 | 782,400.43 | |||
| 3.Amount decrease in current period | |||||
| (1) Disposal/Scrapping | |||||
| 4.Closing balance | 782,400.43 | 782,400.43 | |||
| IV. Carrying amount | |||||
| 1.Closing carrying amount | 844,948,531.52 | 62,439,730.13 | 580,574,088.26 | 6,585,137.38 | 1,494,547,487.29 |
| 2.Opening carrying amount | 881,823,803.96 | 47,321,976.30 | 414,983,640.46 | 3,905,174.59 | 1,348,034,595.31 |
(2) Temporarily idle fixed assets
Unit: Yuan
| Item | Book original value | Accumulated depreciation | Provision for impairment | Carrying amount | Remarks |
(3) Fixed assets leased in under finance leases
Unit: Yuan
| Item | Carrying amount |
| Buildings and structures | 6,623,884.70 |
| Subtotal | 6,623,884.70 |
(4) Fixed assets with certificate of titles being unsettled
Unit: Yuan
| Item | Carrying amount | Reasons for unsettlement |
Other instructions
(5) Fixed assets liquidation
Unit: Yuan
| Item | Closing balance | Opening balance |
Other instructions
22. Construction in progress
Unit: Yuan
| Item | Closing balance | Opening balance |
| Construction in progress | 113,750,851.49 | 166,268,204.96 |
| Total | 113,750,851.49 | 166,268,204.96 |
(1) Details
Unit: Yuan
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Project of producing 550,000 sets of laser sensor modules per year | 27,730,496.71 | 27,730,496.71 | ||||
| Phase I plant construction project of Vietnam Smart Company | 23,839,910.93 | 23,839,910.93 | ||||
| Cambodia Phase II plant construction project | 17,095,602.29 | 17,095,602.29 | ||||
| Second phase of mesh technology reform project with an annual | 10,154,222.15 | 10,154,222.15 | ||||
| output of 1.5 million | ||||||
| Great Star Industrial Headquarters Renovation Project | 5,824,743.14 | 5,824,743.14 | ||||
| Thailand tool box cabinet production base construction project | 62,254.53 | 62,254.53 | 98,361,339.68 | 98,361,339.68 | ||
| Vietnam United Company equipment installation | 200,574.51 | 200,574.51 | 11,725,996.39 | 11,725,996.39 | ||
| Vietnam United Company Plant Construction Project | 8,565,450.70 | 8,565,450.70 | ||||
| Automated warehousing system | 20,409,451.31 | 20,409,451.31 | ||||
| Sporadic projects | 28,843,047.23 | 28,843,047.23 | 27,205,966.88 | 27,205,966.88 | ||
| Total | 113,750,851.49 | 113,750,851.49 | 166,268,204.96 | 166,268,204.96 |
(2) Changes in significant projects
Unit: Yuan
| Item | Budgets | Opening balance | Increase | Transferred to fixed assets | Other decrease | Closing balance | Accumulated input to budget | Completion percentage (%) | Accumulated amount of interest capitalization | Amount of interest capitalization in currentperiod | Annual capitalization rate (%) | Fund source |
| Project | 100,000, | 27,730,4 | 27,730,4 | 27.73% | 30.00% | Raising |
| of producing 550,000 sets of laser sensor modules per year | 000.00 | 96.71 | 96.71 | funds | ||||||||
| Phase I plant construction project of Vietnam Smart Company | 102,383,700.00 | 23,839,910.93 | 23,839,910.93 | 23.28% | 27.00% | Raising funds | ||||||
| Second phase of mesh technology reform project with an annual output of 1.5 million | 15,000,000.00 | 10,154,222.15 | 10,154,222.15 | 67.69% | 70.00% | Other | ||||||
| Cambodia Phase II plant construction project | 20,756,100.00 | 17,325,661.01 | -230,058.72 | 17,095,602.29 | 82.36% | 85.00% | Other | |||||
| Thailand tool box cabinet production base | 116,785,800.00 | 98,361,339.68 | 5,731,895.21 | 97,148,787.68 | -6,882,192.68 | 62,254.53 | 89.13% | 95.00% | Raising funds |
| construction project | ||||||||||||
| Vietnam United Company equipment installation | 17,234,300.00 | 11,725,996.39 | 5,826,355.62 | 17,234,329.98 | -117,447.52 | 200,574.51 | 101.85% | 98.00% | Other | |||
| Total | 372,159,900.00 | 110,087,336.07 | 90,608,541.63 | 114,383,117.66 | -7,229,698.92 | 79,083,061.12 | -- | -- | -- |
(3) Provision for impairment of construction in progress in current period
Unit: Yuan
| Item | Provision for impairment | Provision Reason |
Other instructions
(4) Construction materials
Unit: Yuan
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
Other remarks:
23. Productive biological assets
(1) Productive biological assets measured with Cost Model
□ Applicable √ Not Applicable
(2) Productive biological assets measured with fair value model
□ Applicable √ Not Applicable
24. Oil & gas assets
□ Applicable √ Not Applicable
25. Right-of-use assets
Unit: Yuan
| Item | Buildings and structures | General equipment | Transport facilities | Total |
| I. Book original value： | ||||
| 1.Opening balance | 411,341,526.75 | 3,004,753.42 | 4,396,270.49 | 418,742,550.66 |
| 2.Amount increase in current period | 94,003,662.29 | 1,178,979.58 | 4,910,544.92 | 100,093,186.79 |
| (1) Additions to leases | 48,904,592.50 | 833,976.80 | 1,351,083.57 | 51,089,652.87 |
| (2) Increase due to business combinations not under common control | 65,403,380.61 | 572,475.60 | 4,113,343.20 | 70,089,199.41 |
| (3) Effect of exchange rate changes | -20,304,310.82 | -227,472.82 | -553,881.85 | -21,085,665.49 |
| 3.Amount decrease in current period | 515,934.80 | 643,151.60 | 7,067.60 | 1,166,154.00 |
| (1)Expiration of leases | 515,934.80 | 643,151.60 | 7,067.60 | 1,166,154.00 |
| 4.Closing balance | 504,829,254.24 | 3,540,581.40 | 9,299,747.81 | 517,669,583.45 |
| II. Accumulated depreciation | ||||
| 1.Opening balance | 23,600,653.79 | 556,572.04 | 1,531,143.88 | 25,688,369.71 |
| 2.Amount increase in current period | 78,608,025.59 | 603,374.32 | 1,559,453.17 | 80,770,853.08 |
| (1) Accrual | 75,674,160.54 | 643,151.60 | 1,739,801.60 | 78,057,113.74 |
| (2) Increase due to business combinations not under common control | 4,965,171.10 | 4,965,171.10 | ||
| (3) Effect of exchange rate changes | -2,031,306.05 | -39,777.28 | -180,348.43 | -2,251,431.76 |
| 3.Amount decrease in current period | 487,664.40 | 17,669.00 | 7,067.60 | 512,401.00 |
| (1) Disposal | ||||
| (2) Expiration of leases | 487,664.40 | 17,669.00 | 7,067.60 | 512,401.00 |
| 4.Closing balance | 101,721,014.98 | 1,142,277.36 | 3,083,529.45 | 105,946,821.79 |
| III. Provision for impairment | ||||
| 1.Opening balance | ||||
| 2.Amount increase in current period | ||||
| (1) Accrual | ||||
| 3.Amount decrease in current period | ||||
| (1) Disposal | ||||
| 4.Closing balance | ||||
| IV. Carrying amount | ||||
| 1.Closing carrying amount | 403,108,239.26 | 2,398,304.04 | 6,216,218.36 | 411,722,761.66 |
| 2.Opening carrying amount | 387,740,872.96 | 2,448,181.38 | 2,865,126.61 | 393,054,180.95 |
Other remarks:
26. Intangible assets
(1) Details
Unit: Yuan
| Item | Land use right | Patent right | Non- Proprietary technology | Land ownership | Trademark right | Proprietary technology | Management software | Sewage disposal right | Total |
| I. Book original value | |||||||||
| 1.Opening balance | 237,743,154.32 | 4,418,189.39 | 98,200,604.98 | 275,458,758.54 | 18,478,820.35 | 103,694,779.10 | 2,648,543.69 | 740,642,850.37 | |
| 2.Amount increase in current period | 11,243,864.13 | 699,718.65 | 31,651,663.25 | 35,424,717.99 | 28,787,745.64 | 107,807,709.66 | |||
| (1) | 11,696,854. | 380,730.89 | 1,743,656.1 | 631,126.93 | 15,207,548. | 29,659,916. |
| Acquisition | 10 | 6 | 61 | 69 | |||||
| (2) Internal R&D | |||||||||
| (3) Businesscombination | 318,987.76 | 29,277,376.83 | 48,303,128.00 | 17,534,147.23 | 95,433,639.82 | ||||
| (4)Effect of exchange ratefluctuations | -452,989.97 | 630,630.26 | -13,509,536.94 | -3,953,950.20 | -17,285,846.85 | ||||
| 3.Amount decrease in current period | 16,928,850.24 | 380,355.52 | 17,309,205.76 | ||||||
| (1) Disposal | 380,355.52 | 380,355.52 | |||||||
| (2)Transfer into investment properties | 16,928,850.24 | 16,928,850.24 | |||||||
| 4.Closing balance | 232,058,168.21 | 5,117,908.04 | 129,852,268.23 | 310,883,476.53 | 18,478,820.35 | 132,102,169.22 | 2,648,543.69 | 831,141,354.27 | |
| II. Accumulative amortization | |||||||||
| 1.Opening balance | 34,989,029.67 | 2,140,159.55 | 1,502,424.72 | 9,508,892.96 | 84,366,395.89 | 419,352.80 | 132,926,255.59 | ||
| 2.Amount increase in current period | 5,968,076.98 | 494,811.02 | 3,808,096.61 | 1,755,487.93 | 16,703,560.61 | 264,854.40 | 28,994,887.55 | ||
| (1) Accrual | 5,974,713.19 | 401,886.61 | 3,886,669.28 | 1,755,487.93 | 12,364,767.57 | 264,854.40 | 24,648,378.98 | ||
| 2)Effect of exchange | -6,636.21 | -78,572.67 | -5,362,245.05 | -5,447,453.93 |
| rate fluctuation | |||||||||
| 3)Business combination | 92,924.41 | 9,701,038.09 | 9,793,962.50 | ||||||
| 3.Amount decrease in current period | 1,692,884.96 | 380,355.52 | 2,073,240.48 | ||||||
| (1) Disposal | 380,355.52 | 380,355.52 | |||||||
| (2)Transfer into investment properties | 1,692,884.96 | 1,692,884.96 | |||||||
| 4.Closing balance | 39,264,221.69 | 2,634,970.57 | 5,310,521.33 | 11,264,380.89 | 100,689,600.98 | 684,207.20 | 159,847,902.66 | ||
| III.Provision for impairment | |||||||||
| 1.Opening balance | |||||||||
| 2.Amount increase in current period | |||||||||
| (1) Accrual | |||||||||
| 3.Amount decrease in current period | |||||||||
| (1) Disposal | |||||||||
| 4.Closing balance |
| V. Carrying amount | |||||||||
| 1.Closing carrying amount | 192,793,946.52 | 2,482,937.47 | 129,852,268.23 | 305,572,955.20 | 7,214,439.46 | 31,412,568.24 | 1,964,336.49 | 671,293,451.61 | |
| 2.Opening carrying amount | 202,754,124.65 | 2,278,029.84 | 98,200,604.98 | 273,956,333.82 | 8,969,927.39 | 19,328,383.21 | 2,229,190.89 | 607,716,594.78 |
The proportion of intangible assets formed through the Company's internal research and development to the balance of intangibleassets at the end of the period
(2) Land use right with certificate of titles being unsettled
Unit: Yuan
| Item | Carrying amount | Reasons for unsettlement |
Other remarks:
27. R&D expenditures
Unit: Yuan
| Item | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance | ||||
| Internal development expenditures | Others | Recognized as intangible assets | Transferred into current profit andloss | |||||
| Total | ||||||||
Other instructions
28. Goodwill
(1) Book original value
Unit: Yuan
| Investee or events resulting ingoodwill | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance | ||
| Due to business combination | Effect of exchange rate fluctuation | Disposal | ||||
| Lista Holding AG | 1,045,579,461.13 | -59,762,737.09 | 985,816,724.04 | |||
| Geelong Orchid Holdings Ltd | 568,037,859.11 | 568,037,859.11 | ||||
| Arrow Fastener Co., LLC | 608,368,626.20 | -19,712,996.60 | 588,655,629.60 | |||
| Changzhou Huada Kejie Opto-electro Instrument Co., Ltd. | 118,076,677.01 | 118,076,677.01 | ||||
| Prim' Tools Limited | 64,448,394.77 | -1,473,693.16 | 62,974,701.61 | |||
| Suzhou Xindadi Hardware Product Co., Ltd. | 42,288,608.30 | 42,288,608.30 | ||||
| Prexiso AG | 33,475,829.64 | -1,913,395.67 | 31,562,433.97 | |||
| Prime-Line Products, LLC | 28,057,070.00 | -641,560.00 | 27,415,510.00 | |||
| Longyou Hugong Forging Three Tools Co., Ltd. | 8,072,738.29 | 8,072,738.29 | ||||
| Eudura Holding Limited | 5,677,361.84 | 5,677,361.84 | ||||
| Haining Sheffield CuttingTools Co., Ltd | 884,415.32 | 884,415.32 | ||||
| Zhejiang Guoxin Tools Co., Ltd | 308,667.41 | 308,667.41 | ||||
| Longyou Yiyang Forging Co., Ltd. | 170,033.92 | 170,033.92 | ||||
| Total | 1,955,407,883.83 | 568,037,859.11 | -83,504,382.52 | 2,439,941,360.42 |
(2) Provision for impairment
Unit: Yuan
| Investees or events resulting in goodwill | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance | ||
| Provision | Disposal | |||||
| Changzhou HuadaKejie Opto-electro Instrument Co., Ltd. | 58,591,956.96 | 58,591,956.96 | ||||
| Lista Holding AG | 70,398,887.67 | 70,398,887.67 | ||||
| Prime-Line Products, LLC | 3,311,657.93 | 3,311,657.93 | ||||
| Longyou Hugong Forging Three Tools Co., Ltd.[Note] | 889,055.64 | 444,527.83 | 1,333,583.47 | |||
| Geelong Orchid Holdings Ltd[Note] | 524,650.53 | 524,650.53 | ||||
| Total | 129,879,900.27 | 4,280,836.29 | 134,160,736.56 |
Related information of asset group or asset group portfolios which include goodwill
[Note] Provision for impairment of goodwill arising from recognition of deferred tax liabilities of relevantasset group of Longyou Hugong Forging Three Tools Co., Ltd. and Geelong Orchid Holdings Ltd was made inthe same amount due to reversal of deferred tax liabilities in the current period.
Goodwill impairment test process, key parameters (such as the growth rate of the forecast period when the present value of futurecash flows are expected, the growth rate of the stable period, the profit rate, the discount rate, the forecast period, etc.) and theconfirmation method of goodwill impairment loss
1) Lista Holding AG
①Related information of asset group or asset group portfolios which include goodwill
| Composition of asset group or asset group portfolios | Relevant asset group of Lista Holding AG |
| Carrying amount of asset group or asset group portfolios | 614,601,902.25 |
| Carrying amount of goodwill allocated to the asset group or asset group portfolios | 915,417,836.37 |
Carrying amount of asset group or asset group portfolios thatinclude goodwill
| Carrying amount of asset group or asset group portfolios that include goodwill | 1,530,019,738.62 |
| Whether asset group or asset group portfolios are consistent with those at acquisition date or goodwill impairment testin previous years | Yes |
②Impairment test process, method and conclusion of goodwill impairment loss
The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used inestimating the annual cash flows is 9.86% (FY 2020: 10.12%), and the cash flows subsequent to the estimatedperiod are expected to be stable.
Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,and other relevant expenses.
Such key data are determined by the Company based on its experience and its prediction towards marketdevelopment. The discount rate used by the Company is the pre-tax interest rate that reveals the time value ofcurrency under the current market situation and special risks of certain asset group.
Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2022] 55 issued by WanbangAssetAppraisal Co., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset groupportfolios that include goodwill totaled RMB1,670,716,544.00, and the carrying amount totaled RMB1,538,418,970.22. There is no impairment loss on goodwill.2）Geelong Orchid Holdings Ltd
①Information about the asset group or portfolio of asset groups in which the goodwill is located是
| Composition of an asset group or an asset group portfolio | Related asset groups of Geelong Orchid Holdings Ltd |
| Composition of asset group or asset group portfolios | 334,352,855.81 |
| Carrying amount of asset group or asset group portfolios | 568,037,859.11 |
| Carrying amount of goodwill allocated to the asset group or asset group portfolios | 902,390,714.92 |
Carrying amount of asset group or asset group portfolios thatinclude goodwill
| Carrying amount of asset group or asset group portfolios that include goodwill | Yes |
②Impairment test process, method and conclusion of goodwill impairment loss
The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used inestimating the annual cash flows is 12.68%, and the cash flows subsequent to the estimated period are expected tobe stable.
Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,and other relevant expenses. Such key data are determined by the Company based on its experience and itsprediction towards market development. The discount rate used by the Company is the pre-tax interest rate thatreveals the time value of currency under the current market situation and special risks of certain asset group.Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2022] 56 issued by Wanbang Asset AppraisalCo., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset group portfolios thatinclude goodwill totaled RMB947,000,000.00, and the carrying amount totaled RMB902,390,714.92, whichsuggests that the Company’s goodwill is not impaired.
3) Arrow Fastener Co., LLC
①Related information of asset group or asset group portfolios which include goodwill
| Composition of asset group or asset group portfolios | Relevant asset group of Arrow Fastener Co., LLC |
| Carrying amount of asset group or asset group portfolios | 323,345,265.14 |
| Carrying amount of goodwill allocated to the asset group or | 588,655,629.60 |
asset group portfoliosCarrying amount of asset group or asset group portfoliosthat include goodwill
| Carrying amount of asset group or asset group portfolios that include goodwill | 912,000,894.74 |
Whether asset group or asset group portfolios are consistentwith those at acquisition date or goodwill impairment testinprevious years
| Whether asset group or asset group portfolios are consistent with those at acquisition date or goodwill impairment testin previous years | Yes |
②Impairment test process, method and conclusion of goodwill impairment loss
The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used inestimating the annual cash flows is 10.51% (FY 2020: 11.01%), and the cash flows subsequent to the estimatedperiod are expected to be stable.Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,and other relevant expenses. Such key data are determined by the Company based on its experience and itsprediction towards market development. The discount rate used by the Company is the pre-tax interest rate thatreveals the time value of currency under the current market situation and special risks of certain asset group.Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2022] 56 issued by Wanbang AssetAppraisal Co., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset groupportfolios that include goodwill totaled RMB1,078,379,522.30, and the carrying amount totaledRMB912,000,894.74, which suggests that the Company’s goodwill is not impaired.
4) Changzhou Huada Kejie Opto-electro Instrument Co., Ltd.
①Related information of asset group or asset group portfolios which include goodwill
| Composition of asset group or asset group portfolios | Relevant asset group of Changzhou Huada Kejie Opto-electro Instrument Co.,Ltd. |
Carrying amount of asset group or asset group portfolios
| Carrying amount of asset group or asset group portfolios | 315,794,700.91 |
| Carrying amount of goodwill allocated to the asset group or asset group portfolios[Note] | 91,514,953.92 |
Carrying amount of asset group or asset group portfolios thatinclude goodwill
| Carrying amount of asset group or asset group portfolios that include goodwill | 407,309,654.83 |
| Whether asset group or asset group portfolios are consistent with those at acquisition date or goodwill impairment testin previous years | Yes |
[Note]It includes goodwill attributable to non-controlling shareholders
②Impairment test process, method and conclusion of goodwill impairment loss
The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used inestimating the annual cash flows is 12.86% (FY 2020: 13.59%), and the cash flows subsequent to the estimatedperiod are expected to be stable.
Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,and other relevant expenses. Such key data are determined by the Company based on its experience and itsprediction towards market development. The discount rate used by the Company is the pre-tax interest rate thatreveals the time value of currency under the current market situation and special risks of certain asset group.
Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2022] 57 issued by Wanbang Asset
Appraisal Co., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset groupportfolios that include goodwill totaled RMB464,790,000.00, and the carrying amount totaledRMB393,596,784.32, which suggests that the Company’s goodwill is not impaired.
5) Prim' Tools Limited
①Related information of asset group or asset group portfolios which include goodwill
| Composition of asset group or asset group portfolios | Relevant asset group of Prim' Tools Limited |
| Carrying amount of asset group or asset group portfolios | 114,192,890.65 |
| Carrying amount of goodwill allocated to the asset group or asset group portfolios | 62,974,701.61 |
Carrying amount of asset group or asset group portfoliosthat include goodwill
| Carrying amount of asset group or asset group portfolios that include goodwill | 177,167,592.26 |
| Whether asset group or asset group portfolios are consistent with those at acquisition date or goodwill impairment testin previous years | Yes |
②Impairment test process, method and conclusion of goodwill impairment loss
The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used inestimating the annual cash flows is 13.01% (FY 2020: 13.92%), and the cash flows subsequent to the estimatedperiod are expected to be stable.Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,and other relevant expenses.
Such key data are determined by the Company based on its experience and its prediction towards marketdevelopment. The discount rate used by the Company is the pre-tax interest rate that reveals the time value ofcurrency under the current market situation and special risks of certain asset group.
Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2022] 58issued by Wanbang AssetAppraisal Co., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset groupportfolios that include goodwill totaled RMB268,310,383.64, and the carrying amount totaledRMB178,556,018.07, which suggests that the Company’s goodwill is not impaired.
6) Prime-Line Products, LLC
①Related information of asset group or asset group portfolios which include goodwill
| Composition of asset group or asset group portfolios | Relevant asset group of Prime-Line Products, LLC |
| Carrying amount of asset group or asset group portfolios | 292,507,034.23 |
| Carrying amount of goodwill allocated to the asset group or asset group portfolios | 27,415,510.00 |
| Carrying amount of asset group or asset group portfolios that include goodwill | 319,922,544.23 |
Whether asset group or asset group portfolios areconsistent with those at acquisition date or goodwillimpairment testin previous years
| Whether asset group or asset group portfolios are consistent with those at acquisition date or goodwill impairment testin previous years | Yes |
②Impairment test process, method and conclusion of goodwill impairment loss
The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used inestimating the annual cash flows is 10.22% (FY 2020: 11.01%), and the cash flows subsequent to the estimatedperiod are expected to be stable.
Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,and other relevant expenses.
Such key data are determined by the Company based on its experience and its prediction towards marketdevelopment. The discount rate used by the Company is the pre-tax interest rate that reveals the time value ofcurrency under the current market situation and special risks of certain asset group.
Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2021] 59 issued by Wanbang AssetAppraisal Co., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset groupportfolios that include goodwill totaled RMB317,471,605.80, and the carrying amount totaledRMB320,667,978.33. RMB3,196,372.53 is recognized as goodwill impairment loss, RMB 3,196,372.53 of whichis attributable to goodwill impairment loss to be recognized.
6) Geelong Orchid Holdings Ltd
①Related information of asset group or asset group portfolios which include goodwill
| Composition of asset group or asset group portfolios | Relevant asset group of Geelong Orchid Holdings Ltd |
| Carrying amount of asset group or asset group portfolios | 334,351,877.01 |
Carrying amount of goodwill allocated to the asset groupor asset group portfolios
| Carrying amount of goodwill allocated to the asset group or asset group portfolios | 627,224,704.58 |
Carrying amount of asset group or asset group portfoliosthat include goodwill
| Carrying amount of asset group or asset group portfolios that include goodwill | 961,576,581.59 |
| Whether asset group or asset group portfolios are consistent with those at acquisition date or goodwill impairment testin previous years | Yes |
②Impairment test process, method and conclusion of goodwill impairment loss
The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used inestimating the annual cash flows is 14.23%, and the cash flows subsequent to the estimated period are expected tobe stable.
Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,and other relevant expenses.
Such key data are determined by the Company based on its experience and its prediction towards marketdevelopment. The discount rate used by the Company is the pre-tax interest rate that reveals the time value ofcurrency under the current market situation and special risks of certain asset group.
Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2022] 60 issued by Wanbang AssetAppraisal Co., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset groupportfolios that include goodwill totaled RMB1,011,293,000.00, and the carrying amount totaledRMB961,576,581.59, which suggests that the Company’s goodwill is not impaired.
7) Other companies
The Company performed impairment test on relevant asset groups of Suzhou Xindadi Hardware Product Co.,
Ltd., Prexiso AG, Longyou Hugong Forging Three Tools Co., Ltd., Eudura Holding Limited, Haining SheffieldCutting Tools Co., Ltd., Zhejiang Guoxin Tools Co., Ltd., and Longyou Yiyang Forging Co., Ltd. Therecoverable amount of asset groups or asset group portfolios that include goodwill is computed based on thepresent value of estimated future cash flows, which is based on the 5-year estimated annual cash flows approvedby the Company. The cash flows subsequent to the estimated period are expected to be stable. The discount rateused by the Company is the pre-tax interest rate that reveals the time value of currency under the current marketsituation and special risks of certain asset group. Other key data used in the impairment test include: the estimatedselling price, sales amount, cost of product, and other relevant expenses. Such key data are determined by theCompany based on its experience and its prediction towards market development. Such estimations onrecoverable amount suggest that the Company’s goodwill is not impaired.
The impact of goodwill impairment testingOther instructions
29. Long-term deferred expenses
Unit: Yuan
| Item | Opening balance | Amount increase in current period | Amortized amount in current period | Other reduced amounts | Closing balance |
| Leased-in fixed assets improvement expenses | 4,553,806.76 | 5,403,046.84 | 3,194,390.21 | 22,512.81 | 6,739,950.58 |
| Renovation expenses | 4,021,409.82 | 16,608,851.93 | 14,046,449.35 | 22,460.97 | 6,561,351.43 |
| Tooling expenses | 6,880,541.89 | 9,033,524.78 | 4,730,927.87 | 11,183,138.80 | |
| Other | 951,416.16 | 7,955,473.00 | 6,617,773.15 | 27,594.57 | 2,261,521.44 |
| Total | 16,407,174.63 | 39,000,896.55 | 28,589,540.58 | 72,568.35 | 26,745,962.25 |
Other instructions
30. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offset
Unit: Yuan
| Item | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred tax assets | Deductible temporary difference | Deferred tax assets | |
| Provision for bad debts | 126,923,687.93 | 24,804,313.63 | 100,617,084.64 | 18,425,274.76 |
| Provision for inventory write-down | 63,458,652.61 | 14,741,539.47 | 14,637,463.50 | 3,493,823.04 |
| Mold expenses | 165,257.83 | 24,788.68 | 761,879.36 | 129,530.29 |
| Amortization of intangible assets | 3,218,349.29 | 823,629.59 | ||
| Accrued expenses | 169,819,676.11 | 24,529,483.31 | 69,962,139.59 | 18,147,982.88 |
| Provision for impairment of long-term equity investments | 2,910,780.00 | 436,617.00 | ||
| Deferred income | 1,556,851.32 | 233,527.70 | 2,377,073.64 | 356,561.05 |
| Total | 361,924,125.80 | 64,333,652.79 | 194,484,770.02 | 41,813,418.61 |
(2) Deferred tax liabilities before offset
Unit: Yuan
| Item | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
| Assets appraisal appreciation due to business combination not under common control | 136,221,613.07 | 24,608,080.53 | 96,948,432.28 | 23,125,437.83 |
| Changes in fair value of held-for-trading financial assets | 2,822,612.24 | 423,391.84 | 15,998,041.01 | 2,437,850.39 |
| Interest receivable | 3,683,674.49 | 552,551.17 | 20,692,542.33 | 3,103,881.35 |
| Depreciation of fixed assets | 215,457,755.28 | 48,392,628.88 | 133,958,906.16 | 33,686,297.20 |
| Provision for inventory write-down | 17,481,348.51 | 2,452,010.77 | 17,806,826.55 | 2,434,886.06 |
| Amortization of intangible assets | 11,125,082.94 | 1,519,686.35 | ||
| Accrued expenses | 143,184,822.64 | 19,782,033.37 | 67,723,008.58 | 15,002,925.88 |
| Other | 5,266,299.15 | 716,690.58 | 54,633,302.70 | 5,609,721.54 |
| Total | 524,118,125.38 | 96,927,387.14 | 418,886,142.55 | 86,920,686.60 |
(3) Deferred tax assets or liabilities after offset
Unit: Yuan
| Item | Deferred tax assets and liabilities offset at | Closing balance of deferred tax assets or | Deferred tax assets and liabilities offset at the | Opening balance of deferred tax assets or |
| the end of the period | liabilities after offset | beginning of the period | liabilities after offset | |
| Deferred tax assets | 64,333,652.79 | 41,813,418.61 | ||
| Deferred tax liabilities | 96,927,387.14 | 86,920,686.60 |
(4) Details of unrecognized deferred tax assets
Unit: Yuan
| Item | Closing balance | Opening balance |
| Deductible losses | 268,267,176.46 | 168,911,458.43 |
| Total | 268,267,176.46 | 168,911,458.43 |
(5) Maturity years of deductible losses of unrecognized deferred tax assets
Unit: Yuan
| Maturity FYs | Closing balance | Opening balance | Notes |
| FY 2021 | 5,367,819.70 | ||
| FY 2022 | 8,794,514.34 | 10,546,843.54 | |
| FY 2023 | 13,108,405.23 | 14,557,139.03 | |
| FY 2024 | 34,197,239.43 | 34,787,819.71 | |
| FY 2025 | 34,847,410.00 | 38,209,711.39 | |
| FY 2026 | 92,940,492.11 | 2,493,654.05 | |
| FY 2027 | 7,204,355.21 | 7,204,355.21 | |
| FY 2028 | 26,243,099.31 | 30,073,191.20 | |
| FY 2029 | 7,438,617.58 | 7,438,617.58 | |
| FY 2030 | 15,081,463.76 | 18,232,307.02 | |
| FY 2031 | 28,411,579.49 | ||
| Total | 268,267,176.46 | 168,911,458.43 | -- |
Other remarks:
31. Other non-current assets
Unit: Yuan
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Prepayment for equipment | 40,432,170.46 | 40,432,170.46 | 23,212,306.28 | 23,212,306.28 | ||
| Prepayment for intangible assets | 8,370,928.98 | 8,370,928.98 | 15,505,452.23 | 15,505,452.23 | ||
| Prepayment for land purchase | 54,968,493.62 | 54,968,493.62 | ||||
| Land lease expenses | ||||||
| Total | 103,771,593.06 | 103,771,593.06 | 38,717,758.51 | 38,717,758.51 |
Other remarks:
32. Short-term borrowings
(1) Details on categories
Unit: Yuan
| Item | Closing balance | Opening balance |
| Pledged borrowings | 104,398,400.00 | |
| Secured borrowings | 14,000,000.00 | 44,400,000.00 |
| Guaranteed borrowings | 73,000,000.00 | 10,000,000.00 |
| Credit borrowings | 1,718,165,732.74 | 854,263,538.00 |
| Interest payable not yet due and accrued | 1,735,468.65 | 2,055,972.75 |
| Total | 1,806,901,201.39 | 1,015,117,910.75 |
Instructions for short-term borrowings classification:
(2) Short-term loans that have been overdue but not repaid
The total amount of short-term loans that have been overdue and not repaid at the end of the period is RMB, of which the majorshort- term loans overdue unpaid are as follows:
Unit: Yuan
| Debtors | Interest rate | Overdue days | Interest rate during overdue | Interest rate |
Other remarks:
33. Held-for-trading financial liabilities
Unit: Yuan
| Item | Closing balance | Opening balance |
| Held-for-trading financial liabilities | 978,031.91 |
| Including: | ||
| Derivative financial liabilities | 978,031.91 | |
| Including: | ||
| Total | 978,031.91 |
Other remarks:
34. Derivative financial liabilities
Unit: Yuan
| Item | Closing balance | Opening balance |
Other remarks:
35. Notes payable
Unit: Yuan
| Items | Closing balance | Opening balance |
| Bank acceptance | 51,728,000.00 | 24,913,000.00 |
| Total | 51,728,000.00 | 24,913,000.00 |
The total amount of notes payable due and not paid at the end of the period is 0.00 RMB.
36. Accounts payable
(1) Details
Unit: Yuan
| Item | Closing balance | Opening balance |
| Payable for material purchases | 1,425,489,422.83 | 973,019,822.37 |
| Payable for expenses | 164,006,095.43 | 134,706,127.18 |
| Payable for construction equipment | 50,935,411.58 | 60,602,036.33 |
| Total | 1,640,430,929.84 | 1,168,327,985.88 |
(2) Major accounts payable aged over 1 year
Unit: Yuan
| Item | Closing balance | Reason for unpaid or not carried forward |
Other remarks:
37. Advance receipt
(1) Details
Unit: Yuan
| Item | Closing balance | Opening balance |
(2) Major advance receipt aged over 1 year
Unit: Yuan
| Item | Closing balance | Reason for unpaid or not carried forward |
38. Contract liabilities
Unit: Yuan
| Item | Closing balance | Opening balance |
| Payment for goods | 91,235,951.19 | 72,490,372.55 |
| Total | 91,235,951.19 | 72,490,372.55 |
The amount and reason for the material change in the book balance during the reporting period
Unit: Yuan
| Item | Increase/Decrease Amount | Cause of Change |
39. Employee compensation payable
(1) Details of employee compensation payable
Unit: Yuan
| Item | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance |
| I. Short-term employee compensation | 194,129,903.43 | 1,741,889,227.83 | 1,677,055,275.32 | 258,963,855.94 |
| II. Post-employment benefits - defined contribution plan | 1,778,094.05 | 94,637,939.45 | 91,306,184.06 | 5,109,849.44 |
| Total | 195,907,997.48 | 1,836,527,167.28 | 1,768,361,459.38 | 264,073,705.38 |
(2) Short-term employee compensation
Unit: Yuan
| Item | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance |
| 1. Wage, bonus, allowance and subsidy | 185,932,658.42 | 1,556,395,569.35 | 1,492,396,129.36 | 249,932,098.41 |
| 2. Employee welfare fund | 71,690,516.87 | 71,690,516.87 | ||
| 3. Social insurance premium | 3,332,197.85 | 82,232,375.26 | 81,789,780.38 | 3,774,792.73 |
| Including: Medicare premium | 3,263,791.03 | 75,034,963.67 | 74,710,390.45 | 3,588,364.25 |
| Occupational injuries premium | 44,550.85 | 6,786,100.45 | 6,650,878.23 | 179,773.07 |
| Maternity premium | 23,855.97 | 411,311.14 | 428,511.70 | 6,655.41 |
| 4. Housing provident fund | 121,244.00 | 23,667,787.88 | 23,661,467.88 | 127,564.00 |
| 5. Trade union fund andemployee education fund | 4,743,803.16 | 7,902,978.47 | 7,517,380.83 | 5,129,400.80 |
| Total | 194,129,903.43 | 1,741,889,227.83 | 1,677,055,275.32 | 258,963,855.94 |
(3) Defined contribution plan
Unit: Yuan
| Item | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance |
| 1. Basic endowment insurance premium | 1,717,157.91 | 92,405,780.30 | 89,157,127.17 | 4,965,811.04 |
| 2. Unemployment insurancepremium | 60,936.14 | 2,232,159.15 | 2,149,056.89 | 144,038.40 |
| Total | 1,778,094.05 | 94,637,939.45 | 91,306,184.06 | 5,109,849.44 |
Other remarks:
40. Taxes and rates payable
Unit: Yuan
| Item | Closing balance | Opening balance |
| Value Added Tax | 10,372,853.71 | 6,485,281.06 |
| Consumption tax | 3,774,804.62 | 3,069,169.41 |
| Corporate income tax | 141,051,404.72 | 158,280,518.60 |
| Personal income Tax | 3,916,018.80 | 8,497,838.70 |
| Urban maintenance and construction tax | 1,207,760.74 | 842,381.53 |
| Property tax | 6,481,130.82 | 5,290,714.69 |
| Land use tax | 2,193,256.20 | 1,819,423.84 |
| Stamp duty | 751,473.65 | 1,040,706.33 |
| Education fee surcharge | 543,959.59 | 384,823.00 |
| Local education surcharge | 464,719.08 | 256,548.64 |
| Disabled person's guarantee fund | 65,433.09 | 26,892.81 |
| Vehicle and Boat Tax | 11,828.17 | |
| Environmental protection tax | 1,464.83 | 1,434.06 |
| Total | 170,836,108.02 | 185,995,732.67 |
Other remarks:
41. Other payables
Unit: Yuan
| Item | Closing balance | Opening balance |
| Other payables | 676,502,987.21 | 26,425,047.57 |
| Total | 676,502,987.21 | 26,425,047.57 |
(1) Interest payable
Unit: Yuan
| Item | Closing balance | Opening balance |
Significant interest overdue but not been paid:
Unit: Yuan
| Debtors | Overdue amount | Overdue reason |
Other remarks:
(2) Dividends payable
Unit: Yuan
| Item | Closing balance | Opening balance |
Other instructions，including material dividends payable aged over 1year,should disclosure the reason unpaid:
(3) Other payable
1) Other payable categorized by nature
Unit: Yuan
| Item | Closing balance | Opening balance |
| Funds borrowing | 583,570,527.78 | 16,850,810.54 |
| Equity acquisition payables | 76,724,758.42 | |
| Accrued expenses | 4,166,538.26 | 3,666,627.54 |
| Provisional receivables payable | 5,712,537.69 | 2,895,356.49 |
| Other | 3,851,856.11 | 2,790,484.05 |
| Security deposits | 2,476,768.95 | 221,768.95 |
| Total | 676,502,987.21 | 26,425,047.57 |
2) Major other payables aged over 1 year
Unit: Yuan
| Item | Closing balance | Reason for unpaid or not carried forward |
Other instructions
42. Liabilities held for sale
Unit: Yuan
| Item | Closing balance | Opening balance |
Other remarks:
43. Non-current liabilities due within one year
Unit: Yuan
| Item | Closing balance | Opening balance |
| Long-term borrowings due within one year | 231,828,892.32 | 196,000,160.14 |
| Lease liabilities due within one year | 125,724,601.18 | 56,156,361.09 |
| Accrued interest payable on undue long- term borrowings | 972,470.19 | 167,152.56 |
| Total | 358,525,963.69 | 252,323,673.79 |
Other remarks:
44. Other current liabilities
Unit: Yuan
| Item | Closing balance | Opening balance |
| Taxes to be carried forward | 2,501,196.81 | |
| Total | 2,501,196.81 |
Changes in short-term bonds payable:
Unit: Yuan
| Bonds | Par value | Issuing date | Maturity | Amount outstanding | Opening balance | Current period issuance | Par value interest | Amortization of premium discount | Repayments | Closing balance | |
| Total | -- | -- | -- |
Other remarks:
45. Long-term borrowings
(1) Details on categories
Unit: Yuan
| Item | Closing balance | Opening balance |
| Pledged borrowings | 147,120,000.00 | 220,640,000.00 |
| Guaranteed borrowings | 129,954,602.72 | 272,850,000.00 |
| Credit borrowings | 273,594,153.36 | 15,630,964.56 |
| Pledged and guaranteed borrowings | 464,565,380.50 | |
| Interest payable on long-term loans not yet due and accrued | 211,595.49 | 434,918.35 |
| Total | 1,015,445,732.07 | 509,555,882.91 |
Details on long-term borrowings:
Other instructions，contain interest period:
46. Bonds payable
(1) Details for bonds payable
Unit: Yuan
| Item | Closing balance | Opening balance |
| Convertible corporate bonds | 799,729,005.89 |
| Total | 799,729,005.89 |
(2) Current period movements(Excluding other financial instruments such as preferred stock andperpetual debt classified as financial liabilities)
Unit: Yuan
| Bonds | Par value | Issuing date | Maturity | Amount outstanding | Opening balance | Current period issuance | Par value interest | Amortization of premium discount | Repayments | Interest adjustment | Issuing expense s |
| Great Star convertible bonds | 972,600,000.00 | June 24th, 2020 | June 24, 2020 to June 23, 2026 | 972,600,000.00 | 799,729,005.89 | 324,200.00 | 3,861,935.06 | 2,581,437.71 | 801,333,703.24 | 0.00 | |
| Total | -- | -- | -- | 972,600,000.00 | 799,729,005.89 | 324,200.00 | 3,861,935.06 | 2,581,437.71 | 801,333,703.24 | 0.00 |
(3) Converting conditions and time of convertible bonds
Pursuant to the approval numbered Zheng Jian Xu Ke [2019] 2656 issued by China Securities RegulatoryCommission, the Company publicly issued 9.726 million convertible corporate bonds, each with par value ofRMB100, with total amount of RMB972.60 million and term of 6 years. RMB 972,600,000 convertible corporatebonds of the Company have been listed for trading at Shenzhen Stock Exchange since July 16, 2020. Theabbreviation of the bonds is “Great Star convertible bonds” with code number of “128115”.The conversion period of the convertible corporate bonds runs from the first trading day after six monthsfollowing the completion of the issuance to the maturity date of the bonds. The initial conversion price of theconvertible bonds was RMB 12.28/share, which was not lower than the average transaction price of theCompany’s A shares on the preceding 20 trading days prior to the announcement of the prospectus (in the case ofstock price adjustment caused by ex-right or ex-dividend, the closing price on the trading days before theadjustment shall be subject to the corresponding ex-right or ex-dividend adjustment) and the average transactionprice of the Company’s A shares on the previous trading day.According to the bond prospectus, the "Great Star Convertible Bonds" issued by the Company can beconverted into shares of the Company from January 4, 2021. As of February 23, 2021, a total of RMB970,026,800.00 of the "Great Star Convertible Bonds" have been converted into shares of the Company, with atotal of 78,990,443 shares, including 10,799,651 treasury shares for conversion and 68,190,792 new shares incirculation. The remaining untransferred "Great Star Convertible Bonds" were redeemed by the Company forRMB2,581,437.71. As a result of the above conversion, bonds payable decreased by RMB801,333,703.24, otherequity instruments decreased by RMB190,509,257.28, share capital increased by RMB68,190,792.00, treasuryshares decreased by RMB105,492,690.23, and capital surplus - share premium increased by RMB818,159,478.29.The above changes in share capital were audited by Pan-China Certified Public Accountants (Special OrdinaryPartnership), which issued the "Capital Verification Report" No. Tian Jian Yan[2021] No. 245.
(4) Instructions of other financial instruments classified as financial liabilitiesInformation of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the periodMovements of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
Unit: Yuan
| Financial instruments issued | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance | ||||
| Quantity | Carrying amount | Quantity | Carrying amount | Quantity | Carrying amount | Quantity | Carrying amount | |
Instructions for the basis of other financial instruments transferred to financial liabilitiesOther instructions
47. Lease obligations
Unit: Yuan
| Item | Closing balance | Opening balance |
| Unpaid lease payments | 296,462,213.75 | 352,192,668.14 |
| Less: Unrecognized financing expenses | -7,265,702.73 | -14,593,249.87 |
| Total | 289,196,511.02 | 337,599,418.27 |
Other instructionsDifferences between the beginning of the period and the end of the previous year (December 31, 2020) are detailed in Section X (V)
44. Notes on Changes in Significant Accounting Policies and Accounting Estimates
48. Long-term payables
Unit: Yuan
| Item | Closing balance | Opening balance |
| Long-term payables | 1,499,174.07 | |
| Total | 1,499,174.07 |
(1) Long-term payables categorized by nature
Unit: Yuan
| Item | Closing balance | Opening balance |
| Finance lease payable | 1,499,174.07 |
Other remarks:
(2) Special payables
Unit: Yuan
| Item | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance | Reason |
Other remarks:
49. Long-term employee compensation payable
(1) Details for Long-term employee compensation payable
Unit: Yuan
| Item | Closing balance | Opening balance |
| Post-employment benefits - net defined benefit liability | 71,206,293.82 | |
| Termination benefits | 20,854,276.60 | 6,718,437.33 |
| Total | 20,854,276.60 | 77,924,731.15 |
(2) Movements in defined benefit plan
Present value of obligations in defined benefit plan:
Unit: Yuan
| Item | Current period amount | Previous period amount |
| I. Opening balance | 562,947,937.93 | 505,405,191.66 |
| II. Components of defined benefit costs recognized in profit or loss | 8,714,350.80 | 10,179,212.90 |
| 1.Current service cost | 8,141,875.20 | 8,867,192.70 |
| 4.Net interest= | 572,475.60 | 1,312,020.20 |
| III. Components of defined benefit costs recognized in other comprehensive income | -22,863,686.00 | 39,367,976.90 |
| 1.Actuarial gains(loss is presented with a”-” sign) | -22,863,686.00 | 39,367,976.90 |
| IV. Other changes | -46,885,879.53 | 7,995,556.47 |
| 2.Benefitpaid | -24,100,516.00 | -16,835,135.60 |
| 3.Paid byemployees | 9,682,612.00 | 10,849,964.80 |
| 4. Translationreserves | -32,467,975.53 | 13,980,727.27 |
| V. Closing balance | 501,912,723.20 | 562,947,937.93 |
Plan assets:
Unit: Yuan
| Item | Current period amount | Previous period amount |
| I. Opening balance | 491,741,644.11 | 471,266,138.12 |
| II. Components of defined benefit costs recognized in profit or loss | -120,149.20 | 619,155.60 |
| 1. Net interest expense orincome | 466,461.60 | 1,208,827.60 |
| 2. Managementcosts | -586,610.80 | -589,672.00 |
| III. Components of defined benefit costs recognized in other comprehensive income | 56,039,000.40 | 884,508.00 |
| 3. Actuarial gains(loss is presented with a”-” sign) | 56,039,000.40 | 884,508.00 |
| IV. Other movements | -33,146,226.51 | 18,971,842.39 |
| 1.Paid byemployees | 9,682,612.00 | 10,849,964.80 |
| 2.Paid by theCompany | 9,682,612.00 | 10,849,964.80 |
| 3.Benefitpaid | -23,754,203.60 | -15,700,017.00 |
| 4.Translationreserves | -28,757,246.91 | 12,971,929.79 |
| V. Closing balance | 514,514,268.80 | 491,741,644.11 |
Net defined benefit liability(net assets)
Unit: Yuan
| Item | Current period amount | Previous period amount |
| I. Opening balance | 71,206,293.82 | 34,139,053.54 |
| II. Components of defined benefit costs recognized in profit or loss | 8,834,500.00 | 9,560,057.30 |
| III. Components of defined benefit costs recognized in other comprehensive income | -78,902,686.40 | 38,483,468.90 |
| IV. Other changes | -13,739,653.02 | -10,976,285.92 |
| V. Closing balance | -12,601,545.60 | 71,206,293.82 |
Contents and risks of defined benefit plan, and effect on amount, timing and uncertainty of future cash flows:
The Company’s defined benefit plan consists of two parts, namely the Swiss pension plan and the Germanpension plan.
1)The Swiss pension plan is operated by Pensionskasse, a foundation stipulated by the Swiss law, as well asother companies of economy and finance relevance. The plan is applicable to retired employees, disabledemployees and their family members. Pursuant to the Swiss pension law, the plan is managed by a pension trustcommittee, which is responsible for investment strategies related to fund assets. The goal of the investmentstrategies is to possess 28.00% equity, 39.00% debt, 27.00% assets and 6.00% other financial instruments andcash portfolio. The plan generally exposes the Company to actuarial risks such as inflation, interest rate risk,lifespan risk and wages risk.
2)The German pension plan lasted until 1991 and was terminated in 1991 in accordance with the German law.
The plan no longer applies to new employees and other accruals after 1991, but the remaining obligations remainon the balance sheet.The above-mentioned defined benefit plan has no significant impact on amount, timing and uncertainty offuture cash flows.
Significant actuarial assumption, reasonableness of the assumption and sensitive analysis on defined benefitplan:
Defined benefit plan liability and cost are determined through actuarial valuation. The significant actuarialassumptions for determining the defined benefit obligation are the discount rate and mortality rate.
The sensitive analysis of the Swiss pension plan is determined based on the potential reasonable changes inactuarial assumptions at the end of the reporting period.
1)If all other actuarial assumptions remain unchanged and the discount rate is higher (or lowered) by 0.5%,the defined benefit obligation of the Swiss pension plan will decrease by CHF5,068,000.00 (or increase by CHF5,766,000.00).
2)If all other actuarial assumptions remain unchanged and the life expectancy of men and women increases(or decreases) by one year, the defined benefit obligation of the Swiss pension plan will increase by CHF597,000.00 (or decrease by CHF593,000.00).Description of setting the major actuarial assumptions and sensitivity analysis results of the benefit plan:
Other remarks:
50. Projected liabilities
Unit: Yuan
| Item | Closing balance | Opening balance | Reason |
| Product Quality Assurance | 2,309,585.60 | 2,329,934.90 | |
| Soil restoration expenses | 2,615,283.33 | 1,220,478.39 | |
| Total | 4,924,868.93 | 3,550,413.29 | -- |
Other instructions, including relevant important assumptions and description of important estimated liabilities:
51. Deferred income
Unit: Yuan
| Item | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance | Reason |
| Government subsidy | 3,992,738.59 | 1,190,493.96 | 2,802,244.63 | Special subsidy | |
| Total | 3,992,738.59 | 1,190,493.96 | 2,802,244.63 | -- |
Projects involving government grants:
Unit: Yuan
| Liability | Opening | New grant amount in current period | Amount included in non- operating | Amount included in other income in the | Write down cost amount in current | Other | Asset related |
| items | balance | income in the current period | current period | period | adjustments | Closing balance | / income related | |
| Special subsidy for construction of foreign trade public service platform | 1,079,222.14 | 442,666.68 | 636,555.46 | Asset related | ||||
| Special subsidy for "machine replacement" technical transformation project | 1,355,664.75 | 270,271.68 | 1,085,393.07 | Asset related | ||||
| Special subsidy for equipment manufacturing projects in strategic emergingindustries | 919,999.76 | 230,000.04 | 689,999.72 | Asset related | ||||
| Financial subsidy for capacity expansion project of new hand tool series products | 260,000.20 | 99,999.96 | 160,000.24 | Asset related | ||||
| Special subsidy for innovation capability building project of provincial enterprise technology | 101,851.82 | 55,555.56 | 46,296.26 | Asset related |
| center | ||||||||
| Special funds for pilot and base construction of strategic emerging industries | 275,999.92 | 92,000.04 | 183,999.88 | Asset related | ||||
| Subtotal | 3,992,738.59 | 1,190,493.96 | 2,802,244.63 |
Other remarks:
Details of government grants included in current period's profit and loss are described in Section X(VII) 84. Description ofgovernment grants
52. Other non-current liabilities
Unit: Yuan
| Item | Closing balance | Opening balance |
Other remarks:
53. Equity
Unit: Yuan
| Opening balance | Increase and decrease of this change (+, -) | Closing balance | |||||
| Bonus New share issue | Bonus share | Conversion of provident fund into shares | Other | Subtotal | |||
| Total number of shares | 1,075,247,700.00 | 68,190,792.00 | 68,190,792.00 | 1,143,438,492.00 | |||
Other remarks:
The increase in share capital during the period was due to the conversion of convertible bonds, as described inSection X (VII) 46, Note on bonds payable.
54. Other equity instruments
(1) Basic information of preferred shares, perpetual bonds and other financial instruments issuedoutstanding at the end of the period
(2) Statement of changes in preferred shares, perpetual bonds and other financial instruments issuedoutstanding at the end of the period
Unit: Yuan
| Financial instruments issuedoutstanding | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance | ||||
| Quantity | Carrying amount | Quantity | Carrying amount | Quantity | Carrying amount | Quantity | Carrying amount | |
| GreatStar convertible bond | 9,726,000 | 190,509,257.28 | 9,726,000 | 190,509,257.28 | ||||
| Total | 9,726,000 | 190,509,257.28 | 9,726,000 | 190,509,257.28 | ||||
Changes of other equity instruments in the current period, reasons for changes, and basis for relevant accounting treatment:
Other remarks:
The increasing of other equity instruments in current period was due to the equity parts for convertiblecorporate bonds issued by the Company, details refer to the description of Section XX (VII) 46, Bonds payable.
55. Capital reserve
Unit: Yuan
| Item | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance |
| Share premium(equity premium) | 1,899,200,931.58 | 822,674,409.54 | 1,772,764.11 | 2,720,102,577.01 |
| Other capital reserve | 195,843,609.57 | 11,013,766.50 | 2,008,108.15 | 204,849,267.92 |
| Total | 2,095,044,541.15 | 833,688,176.04 | 3,780,872.26 | 2,924,951,844.93 |
Other instructions, including the increase and decrease of the current period and the reasons for the change:
1) Remarks on changes in capital reserve – share premium
① Increase in capital surplus-equity premium of RMB 818,159,478.29 due to conversion of corporate bondsduring the period, as described in Section X (VII) 46, Note on bonds payable.
② The Company acquired 6.73751% equity interest in Longyou Yiyang Forging Co., Ltd. held by minorityshareholders of Longyou Yiyang Forging Co., Ltd. at a price of RMB1,239,140.91. In preparing the consolidatedfinancial statements, the difference of RMB 2,097,357.38 between the newly acquired long-term equity
investment due to the purchase of minority interest and the share of net assets of Longyou Yiyang Forging Co.,Ltd. calculated on a continuing basis from the date of consolidation in accordance with the new shareholding wasrecorded as capital surplus.
③ The Company acquired 15.00% of the equity interest in Longyou Hugong Forging Three Tools Co., Ltd.held by minority shareholders of Longyou Hugong Forging Three Tools Co.Ltd. at a price of RMB18,760,859.09. In preparing the consolidated financial statements, the difference of RMB 2,417,573.87 betweenthe newly acquired long-term equity investment due to the purchase of minority interest and the share of net assetsof Longyou Hugong Forging Three Tools Co., Ltd. calculated on a continuous basis from the date ofconsolidation in accordance with the new shareholding was recorded as capital surplus.
④ The Company acquired 2.13% equity interest in Hangzhou Super Star Steel Shield Tools Co., Ltd. held byminority shareholders of Hangzhou Super Star Steel Shield Tools Co., Ltd. at a price of RMB 106,500.00. Inpreparing the consolidated financial statements, the difference of RMB32,913.57 between the newly acquiredlong-term equity investment due to the purchase of minority interest and the share of net assets of HangzhouSuper Star Steel Shield Tools Co., Ltd. calculated on a continuing basis from the date of consolidation inaccordance with the new shareholding was reduced to capital surplus.
⑤ The Company acquired 49.00% of the equity interest in PREXISO Laser Measurement Tool (Hangzhou)Co., Ltd held by the minority shareholder of PREXISO Laser Measurement Tool (Hangzhou) Co., Ltd for RMB95,000.00. In preparing the consolidated financial statements, the difference of RMB 1,739,850.54 between thenewly acquired long-term equity investment due to the purchase of minority interest and the share of net assets ofPREXISO Laser Measurement Tool (Hangzhou) Co., Ltd calculated on an ongoing basis from the date ofconsolidation in proportion to the newly acquired shareholding was reduced to capital surplus.
2) Capital reserve-Description of changes in other capital reserves
The Company's share of changes in owner's equity for the period, other than net profit or loss, othercomprehensive income and profit distribution, calculated in proportion to its shareholding in Zhejiang GuozhiRobotics Technology Company Limited, Zhejiang Hangcha Holding Company Limited and Hangzhou ZhongceHaichao Enterprise Management Company Limited, adjusted long-term equity investment and capital surplus byRMB1,687,973.07, RMB9,325,793.43, and RMB -2,008,108.15, respectively.
56. Treasury stock
Unit: Yuan
| Item | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance |
| Treasury stock | 105,492,690.23 | 186,441,914.48 | 105,492,690.23 | 186,441,914.48 |
| Total | 105,492,690.23 | 186,441,914.48 | 105,492,690.23 | 186,441,914.48 |
Other instructions, including the increase and decrease of the current period and the reasons for the change:
1) Amount increase in current period
At the eleventh meeting of the fifth session of the Board of Directors of the Company, it was agreed that theCompany shall use its own funds not less than (including) RMB180 million and not more than (including)RMB360 million to repurchase some shares of the Company by way of centralized competitive bidding. The sharerepurchase price shall not exceed RMB36 per share and the share repurchase period shall not exceed 12 monthsfrom the date of consideration and approval by the board of directors. As of the end of the period, the total number
of shares repurchased from the special account of the Company was 6,015,310 shares and the total price paid wasRMB186,441,914.48.
2) Amount decrease in current period
The decrease of treasury stock by RMB 105,492,690.23 due to the conversion of convertible bonds duringthe period. For details, please refer to Section X (VII) 46, Note on bonds payable.
57. Other comprehensive income
Unit: Yuan
| Item | Opening balance | Current period amount | Closing balance | |||||
| Current period cumulative before income tax | Less: OCI previously recognizedbuttransferred to profit or loss incurrentperiod | Less: OCI previously recognized but transferred to retained earnings in currentperiod | Less: Income tax | Attributable to parent company | Attributable to non- controlling shareholders | |||
| I. Items not to be reclassified subsequently to profit or loss | -103,399,791.08 | 78,902,686.40 | 7,060,532.40 | 71,842,154.00 | -31,557,637.08 | |||
| Including: Changes inremeasurement of the defined benefit plan | -103,399,791.08 | 78,902,686.40 | 7,060,532.40 | 71,842,154.00 | -31,557,637.08 | |||
| II. Items to be reclassified subsequently to profit or loss | -2,437,555.79 | -195,778,996.23 | -195,778,996.23 | -350,414.77 | -198,216,552.02 | |||
| Including: Other comprehensive income to be transferred to profit or loss under equity method | -27,385,736.04 | -57,553,901.17 | -57,553,901.17 | -84,939,637.21 | ||||
| Translation balance in foreign currency financial statements | 24,948,180.25 | -138,225,095.06 | -138,225,095.06 | -350,414.77 | -113,276,914.81 | |||
| Total other comprehensive income | -105,837,346.87 | -116,876,309.83 | 7,060,532.40 | -123,936,842.23 | -350,414.77 | -229,774,189.10 | ||
Other instructions, including the adjustment of the effective part of the profit and loss of cash flow hedging converted into the initialrecognition amount of the hedged item:
58. Special reserve
Unit: Yuan
| Item | Opening balance | Amount increase in | Amount decrease in | Closing balance |
| current period | current period |
Other instructions, including the increase and decrease of the current period and the reasons for the change:
59. Surplus reserve
Unit: Yuan
| Item | Opening balance | Amount increase in current period | Amount decrease in current period | Closing balance |
| Legal surplus reserves | 521,602,764.46 | 76,940,412.17 | 598,543,176.63 | |
| Total | 521,602,764.46 | 76,940,412.17 | 598,543,176.63 |
Description of surplus reserve, including changes in the current period and reasons for changes:
Pursuant to the Company’s Articles of Association, statutory surplus reserve was appropriated at 10% of thenet profit generated by parent company in the current period.
60. Undistributed profit
Unit: Yuan
| Item | 本期 | 上期 |
| Closing balance of the preceding period | 5,155,116,352.49 | 3,849,578,318.39 |
| Undistributed profit at the beginning of the period after adjustment | 5,155,116,352.49 | 3,849,578,318.39 |
| Add: Net profit attributable to owners of the parent company | 1,270,003,396.40 | 1,350,132,516.91 |
| Less: Appropriation of statutory surplus reserve | 76,940,412.17 | 91,745,899.76 |
| Add: Other comprehensive income carried forward to retained earnings | 47,151,416.95 | |
| Closing balance | 6,348,179,336.72 | 5,155,116,352.49 |
Details of undistributed profit at the beginning of adjustment period:
1). Due to the retroactive adjustment of the accounting standards for business enterprises and its related new regulations, theundistributed profits at the beginning of the period are affected.
2). Due to the change of accounting policy, the undistributed profit at the beginning of the period is affected.
3). Due to the correction of major accounting errors, the undistributed profits at the beginning of the period are affected. 4). Thechange of consolidation scope caused by the same control affects the opening undistributed profit.
5). The other adjustments affects the opening undistributed profit.
61. Operating revenue and operating costs
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Revenue | Cost | Revenue | Cost | |
| Main business | 10,849,925,564.41 | 8,147,389,910.45 | 8,502,327,129.89 | 5,906,839,891.29 |
| Other business | 69,757,779.96 | 28,733,758.05 | 42,113,024.41 | 19,926,004.47 |
| Total | 10,919,683,344.37 | 8,176,123,668.50 | 8,544,440,154.30 | 5,926,765,895.76 |
The lower of the audited net profit before and after deduction of non-recurring gains and losses is negative or not
□ Yes √ No
Related information of revenue:
Unit: Yuan
| Contract classification | Division 1 | Division 2 | Total | |
| Type of merchandise | ||||
| Including: | ||||
| By operating area | ||||
| Including: | ||||
| Market or customer type | ||||
| Including: | ||||
| Contract type | ||||
| Including: | ||||
| By the time of commodity transfer | ||||
| Including: | ||||
| By contract term | ||||
| Including: | ||||
| By sales channel | ||||
| Including: | ||||
| Total |
Information relating to performance obligations:
Performance obligations of sales of hand tools and power tools, laser measurement, storage, PPE and otherproducts are generally fulfilled within one year. The Company collects advances or provides term of credit based
on different customers. The Company acts as the main responsible person for direct sales. The Company obtainsthe unconditional right to collect payments when the following conditions are all met: 1) for domestic sales: a. theCompany delivers the product to the customer in accordance with the contract; and b. the customer has acceptedthe product; 2) for overseas sales: a. the Company has declared the product in accordance with the contract; b. theCompany has obtained the bill of lading or, the Company has shipped the product to the designated destinationand the goods are delivered to the customer; and c. the control of the goods is transferred to the customer.
Information relating to the transaction price allocated to the remaining performance obligation:
At the end of this report period, the amount of income corresponding to the performance obligations that have been signed but not yetfulfilled or not fulfilled is RMB 91,235,951.19 , of which RMB91,235,951.19 is expected to be recognized in 2022, RMBXXX isexpected to be recognized in XX year, and RMBXXX is expected to be recognized in XX year.Other instructions
61. Taxes and surcharges
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Urban maintenance and construction tax | 7,256,954.85 | 4,786,192.59 |
| Education surcharge | 3,771,830.67 | 2,328,932.48 |
| Housing property tax | 12,351,881.98 | 9,890,480.39 |
| Land use tax | 2,227,537.31 | 2,147,547.54 |
| Vehicle and vessel use tax | 86,214.28 | 76,767.27 |
| stamp duty | 7,829,087.46 | 6,480,368.19 |
| Environmental protection tax | 2,585,929.23 | 1,552,621.56 |
| Local education surcharge | 9,241.06 | 5,877.90 |
| Total | 36,118,676.84 | 27,268,787.92 |
Other remarks:
63. Selling expenses
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Salary expenses | 329,786,407.95 | 231,285,600.62 |
| Advertising and promotion expenses | 173,588,091.95 | 158,061,292.72 |
| Office expenses | 22,868,008.43 | 15,027,354.08 |
| Depreciation and amortization | 21,114,863.37 | 18,604,834.71 |
| Consulting expenses | 10,976,839.16 | 12,398,145.37 |
| Commercial inspection expenses | 7,773,433.50 | 8,444,517.79 |
| Rent | 6,737,089.27 | 2,114,137.78 |
| Insurance | 5,538,490.21 | 4,367,937.54 |
| Travel expenses | 5,472,391.88 | 5,765,621.94 |
| Other | 9,147,487.96 | 2,204,966.10 |
| Total | 593,003,103.68 | 458,274,408.65 |
Other remarks:
64. Administrative expenses
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Salary expenses | 414,247,951.75 | 317,985,417.88 |
| Consulting expenses | 88,634,883.05 | 51,273,959.59 |
| Depreciation and amortization | 67,871,799.44 | 47,961,742.13 |
| Office expenses | 73,875,810.36 | 52,019,821.23 |
| Business travelling expenses | 14,051,596.45 | 9,814,116.43 |
| Business entertainment expenses | 3,968,221.22 | 2,865,337.49 |
| Taxes and rates | 2,206,645.73 | 2,714,181.92 |
| Afforestation expenses | 3,459,791.23 | 2,989,803.38 |
| Others | 17,804,031.83 | 13,375,557.95 |
| Total | 686,120,731.06 | 500,999,938.00 |
Other remarks:
65. R&D expenses
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Salary expenses | 175,844,458.23 | 129,218,589.63 |
| Direct input | 97,611,535.85 | 87,654,200.47 |
| Depreciation and amortization | 12,408,282.37 | 13,190,352.70 |
| Others | 23,899,089.70 | 15,308,926.56 |
| Total | 309,763,366.15 | 245,372,069.36 |
Other remarks:
66. Financial expenses
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Interest expenditures | 59,754,089.36 | 69,915,383.28 |
| Interest income | -59,709,415.20 | -58,134,194.43 |
| Gains on foreign exchange | 53,973,441.25 | 94,969,455.21 |
| Bank handling charges | 10,783,600.62 | 6,829,360.99 |
| Total | 64,801,716.03 | 113,580,005.05 |
Other remarks:
67. Other income
Unit: Yuan
| Items | Current period amount | Previous period amount |
| Government grants related to assets | 1,190,493.96 | 1,196,922.60 |
| Government grants related to income | 45,857,466.79 | 32,022,952.51 |
| Refund of handling fees for withholding individual income tax | 502,892.56 | 267,035.13 |
| Total | 47,550,853.31 | 33,486,910.24 |
68. Investment income
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Gain on long-term equity investments accounted for by the equity method | 253,722,685.68 | 260,530,217.44 |
| Investment income from disposal of long-term equity investments | 40,415.45 | 266,783.83 |
| Investment income from financial assets held for trading during | 1,808,120.10 | 1,792,735.16 |
| Investment income from disposal of financial assets held for trading | 119,298,472.39 | 30,314,376.80 |
| Dividend income from investments in other equity instruments during the holding period | 3,647,177.70 | |
| Loss on discount on receivables financing | -4,570,835.23 | |
| Total | 370,298,858.39 | 296,551,290.93 |
Other remarks:
69. Net exposure hedging income
Unit: Yuan
| Item | Current period amount | Previous period amount |
Other remarks:
70. Gains on changes in fair value
Unit: Yuan
| Source | Current period amount | Previous period amount |
| Held-for-trading financial assets | -22,632,570.84 | 31,920,861.95 |
| Including: Gains on changes in fair value arising from derivative financial instruments | -31,697,410.86 | 31,510,730.07 |
| Transaction financial liabilities | -978,031.91 | |
| Total | -23,610,602.75 | 31,920,861.95 |
Other remarks:
71. Credit impairment loss
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Bad debt loss of other receivables | -4,967,019.95 | -2,272,889.16 |
| Bad debt loss of receivables financing | -9,918,842.81 | -14,269,832.52 |
| Bad debt loss of accounts receivable | -30,906,344.55 | -10,705,040.96 |
| Bad debt loss of prepayment | 1,461,995.24 | -884,081.80 |
| Total | -44,330,212.07 | -28,131,844.44 |
Other remarks:
72. Assets impairment loss
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Loss of inventory decline and contract performance cost impairment loss | -18,850,329.32 | -22,641,151.52 |
| Impairment loss of goodwill | -4,280,836.29 | -70,843,415.48 |
| Total | -23,131,165.61 | -93,484,567.00 |
Other remarks:
73. Gains on asset disposal
Unit: Yuan
| Items | Current period amount | Previous period amount |
| Gains on disposal of fixed assets | -3,020,089.44 | -300,665.75 |
| Total | -3,020,089.44 | -300,665.75 |
74. Non-operating revenue
Unit: Yuan
| Item | Current period amount | Previous period amount | Amount included in non- recurring profit or loss |
| Acceptance of donations | 221,786.41 | ||
| Gain on destruction and retirement of non-current assets | 13,785.22 | 83,056.95 | 13,785.22 |
| Unable to pay | 3,836,871.67 | 615,523.56 | 3,836,871.67 |
| Compensation income | 324,870.81 | 529,703.60 | 324,870.81 |
| Negative goodwill arising from business combination | 82,984,773.90 | 53,341,459.79 | 82,984,773.90 |
| Other | 187,648.80 | 85,532.84 | 187,648.80 |
| Total | 87,347,950.40 | 54,877,063.15 | 87,347,950.40 |
Government grants included in current profits and losses:
Unit: Yuan
| Items | Entity | Reason | nature | Grants affected current net profit or not | Special grants or not | Current amount | Previous period amount | Related to assets/Relate d to profit or loss |
Other remarks:
The formation of negative goodwill in a business combination is described in Section X(VIII) 1. Descriptionof business combinations not under common control.
75. Non-operating expenditures
Unit: Yuan
| Item | Current period amount | Previous period amount | Amount included in the current non-recurring gains and losses |
| External donations | 4,019,141.43 | 709,875.68 | 4,019,141.43 |
| Loss on destruction and scrapping of non-current assets | 1,847,789.51 | 738,005.09 | 1,847,789.51 |
| Fine expenses | 321,317.87 | 1,076,247.57 | 321,317.87 |
| Other | 136,142.69 | 299,222.37 | 136,142.69 |
| Total | 6,324,391.50 | 2,823,350.71 | 6,324,391.50 |
Other remarks:
76. Income tax expenses
(1) Details
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Current period income tax expenses | 181,379,736.40 | 187,284,921.29 |
| Deferred income tax expenses | -20,161,653.17 | 12,495,238.20 |
| Total | 161,218,083.23 | 199,780,159.49 |
(2) Reconciliation of accounting profit to income tax expenses
Unit: Yuan
| Items | Current period amount |
| Profit before tax | 1,458,533,282.84 |
| Income tax expenses based on tax rate applicable to the parent company | 218,779,992.43 |
| Effect of different tax rate applicable to subsidiaries | 26,569,270.98 |
| Effect of prior income tax reconciliation | -8,595,694.29 |
| Effect of non-taxable income | -29,372,674.81 |
| Effect of non-deductible costs, expenses and losses | 9,906,713.10 |
| Utilization of deductible losses not previously recognized as deferred tax assets | -9,684,583.92 |
| Effect of investment from long-term equity investments under equity method | 47,268,599.01 |
| Effect of deducible temporary differences or deductible losses not recognized as deferred tax assets | -38,058,402.85 |
| Effectofadditionaldeductionoftechnologydevelopmentfeesandwages for disabled employees | -55,595,136.42 |
| Income tax expenses | 161,218,083.23 |
Other instructions
77. Other comprehensive income
See Note 57, other comprehensive income for details.
78. Notes to items of cash flow statements
(1) Other cash receipts related to operating activities
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Recovery of deposits on bankers' acceptances | 14,267,400.00 | 10,786,677.30 |
| Interest income | 76,718,283.04 | 49,046,349.09 |
| Government subsidy income | 42,393,347.30 | 28,810,242.20 |
| Operating lease income | 19,564,397.37 | 15,020,862.01 |
| Recovery of guarantee deposits | 300,000.00 | |
| Other | 7,295,322.21 | 5,313,974.96 |
| Total | 160,238,749.92 | 109,278,105.56 |
Instructions of other cash received related to operating activities:
(2) Other cash payments related to operating activities
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Operating period expenses | 985,886,790.62 | 624,751,673.57 |
| Payment of bank acceptance deposit | 27,725,700.00 | 14,267,400.00 |
| Payment of customs bond deposit | 1,975,140.00 | |
| Others | 9,535,171.45 | 7,594,720.20 |
| Total | 1,025,122,802.07 | 646,613,793.77 |
Instructions of other cash paid related to operating activities:
(3) Other cash receipts related to investing activities
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Recovery of deposit for purchase of | 3,295,074.50 |
| forward exchange settlement | ||
| Recovery of project performance deposits | 495,608.89 | |
| Recovery of investment funds deposited | 2,154,766.92 | 22,822,339.65 |
| Total | 5,945,450.31 | 22,822,339.65 |
Instructions of other cash received related to investment activities:
(4) Other cash payments related to investing activities
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Deposit out investment funds | 2,154,766.92 | |
| Purchase of forward exchange settlement margin | 2,295,252.00 | 3,295,074.50 |
| Payment of land purchase deposit | 20,325,841.02 | |
| Payment of project performance bond | 492,906.98 | 495,608.89 |
| Total | 2,788,158.98 | 26,271,291.33 |
Instructions of other cash paid related to investment activities:
(5) Other cash receipts related to financing activities
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Receipt of loan from the beneficial owner of the funds | 583,000,000.00 | |
| Recovery of deposits made for the processing of notes | 300,000,000.00 | |
| Receipt of borrowings from social funds | 15,512,811.43 | |
| Total | 583,000,000.00 | 315,512,811.43 |
Instructions of other cash receipts related to financing activities:
(6) Other cash payments related to financing activities
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Funds paid for share repurchase | 186,441,914.48 | |
| Funds paid for acquisition of minority interests | 20,201,500.00 | |
| Repayment of social fund split borrowings | 16,850,810.54 |
| and interest | ||
| Repayment of lease liabilities and interest | 59,939,559.59 | 30,545,009.60 |
| Transfer fees for financing letters of guarantee and receivables financing | 4,570,835.23 | 7,997,070.51 |
| Repayment of finance lease payable by Prime-Line Products, LLC | 976,686.29 | |
| Payment of issuance costs for issuance of convertible bonds | 6,606,505.30 | |
| Redemption amount of convertible bonds | 2,581,437.71 | |
| Payment of minority shareholders' liquidation amount of Franti Kitchen & Bath (Suzhou) Co. | 88,811.75 | |
| Total | 290,674,869.30 | 46,125,271.70 |
Instructions of other cash payments related to financing activities:
79. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Unit: Yuan
| Supplement information | Current period amount | Previous period amount |
| 1) Reconciliation of net profit to cash flow from operating activities: | -- | -- |
| Net profit | 1,297,315,199.61 | 1,364,494,588.44 |
| Add: Provision for assets impairment loss | 67,461,377.68 | 121,616,411.44 |
| Depreciation of fixed assets, oil and gas assets, productive biological assets | 170,864,798.78 | 128,380,048.11 |
| Depreciation of right-of-use assets | 78,057,113.74 | 28,134,725.30 |
| Amortization of intangible assets | 24,648,378.98 | 18,637,144.15 |
| Amortization of long-term amortization | 28,589,540.58 | 5,374,280.54 |
| Loss on disposal of property, plant and equipment, intangible assets and other long-term assets (gain is presented with a "-" sign) | 3,020,089.44 | 300,665.75 |
| Loss on retirement of property, plant and equipment (gain is presented with a "-" sign) | 1,834,004.29 | 654,948.14 |
| Losses on changes in fair value (gains are presented with a "-" sign) | 23,610,602.75 | -31,920,861.95 |
| Finance costs (gains are presented with a "-" sign) | 111,747,068.72 | 166,307,558.92 |
| Loss on investments (gain is presented with a "-" sign) | -370,298,858.39 | -296,551,290.93 |
| Decrease in deferred tax assets (increase is presented with a "-" sign) | -21,863,965.98 | -21,676,277.78 |
| Increase in deferred tax liabilities (decrease is presented with a "-" sign) | 1,702,312.81 | 35,300,639.39 |
| Decrease in inventories (increase is presented with a "-" sign) | -1,209,507,080.11 | -174,121,514.47 |
| Decrease in operating receivables (increase is presented with a "-" sign) | -537,038,480.67 | -408,964,409.46 |
| Increase in operating payables (decrease is presented with a "-" sign) | 348,490,067.44 | -126,332,561.45 |
| Other | -38,483,468.90 | |
| Net cash flow from operating activities | 18,632,169.67 | 771,150,625.24 |
| 2) Significant investing and financing activities not related to cash receipts and payments: | -- | -- |
| Conversion of debt into capital | ||
| Convertible bonds due within one year | ||
| Fixed assets leased in under finance leases | ||
| 3) Net changes in cash and cash equivalents: | -- | -- |
| Cash at the end of the period | 4,001,186,241.18 | 3,730,263,218.08 |
| Less: Cash at the beginning of the period | 3,730,263,218.08 | 2,127,457,447.34 |
| Add:Cashequivalentsattheendoftheperiod | ||
| Less:Cashequivalentsatthebeginningofthe period | ||
| Net increase of cash and cash equivalents | 270,923,023.10 | 1,602,805,770.74 |
(2) Net cash payment for acquisition of subsidiaries in current period
Unit: Yuan
| Amount | |
| Cashandcashequivalentspaidincurrentperiodasconsiderationfor business combination in currentperiod | 960,930,958.18 |
| Including: | -- |
| Geelong Orchid Holding Limited | 746,263,039.85 |
| BeA | 214,667,918.33 |
| Less: Cash and cash equivalents held by the Company on the purchase date | 36,995,204.47 |
| Including: | -- |
| Geelong Orchid Holding Limited | 19,233,104.87 |
| BeA | 17,762,099.60 |
| Including: | -- |
| Net cash paid by the subsidiary companies | 923,935,753.71 |
Other remarks:
(3) Net cash received for disposal of subsidiaries in the current period
Unit: Yuan
| Amount | |
| Including: | -- |
| Including: | -- |
| Including: | -- |
Other remarks:
(4) Composition of cash and cash equivalents
Unit: Yuan
| Item | Closing balance | Opening balance |
| 1) Cash | 4,001,186,241.18 | 3,730,263,218.08 |
| Including: Cash on hand | 2,574,760.83 | 2,874,834.15 |
| Cash in bank on demand for payment | 3,983,507,419.70 | 3,722,569,979.24 |
| Other cash and bank balances on demand for payment | 15,104,060.65 | 4,818,404.69 |
| 3) Cash and cash equivalents at the end of the period | 4,001,186,241.18 | 3,730,263,218.08 |
Other remarks:
Due to liquidity restrictions, the Company treats deposits for handling bank acceptance bills, share
repurchase funds for securities accounts, construction performance deposits, forward exchange settlement deposits,customs duty guarantee deposits, ETC deposits and deposited investment funds as monetary funds that are notcash and cash equivalents. The Opening balance of these margin deposits was RMB 20,242,850.31 and theClosing balance was RMB 32,520,998.98.
80. Notes to items in statement of changes in owner's equity
Explain the name of "other" items and the amount of adjustment for the balance at the end of previous year:
81. Assets with title or use right restrictions
Unit: Yuan
| Item | Carrying amount | Reason |
| Monetary funds | 27,725,700.00 | Bank acceptance deposit |
| Fixed assets | 29,720,650.63 | Collateral for opening bank acceptance |
| Intangible assets | 2,110,603.58 | Collateral for opening bank acceptances |
| Monetary funds | 2,295,252.00 | Forward exchange settlement margin |
| Currency funds | 1,975,140.00 | Customs bond |
| Currency funds | 492,906.98 | Engineering performance bond |
| Monetary funds | 32,000.00 | ETC deposit |
| Fixed assets | 10,873,242.70 | Bank loan collateral |
| Intangible assets | 1,483,459.51 | Pledge for bank loan |
| 100.00% equity of Arrow Fastener Co.,LLC [Note] | 388,146,927.39 | Pledge for bank loan |
| 100.00% equity of Geelong Orchid Holding Limited[Note] | 205,959,077.97 | Pledge for bank loan |
| Total | 670,814,960.76 | -- |
Other remarks:
[Note] It refers to net assets ofArrow Fastener Co.,LLC and Geelong Orchid Holding Limited at the end ofthe current period.
82. Monetary items in foreign currencies
(1) Monetary items in foreign currencies
Unit: Yuan
| Item | Closing balance in foreign currencies | Exchange rate | RMBequivalentattheendofthe period |
| Monetary funds | -- | -- | 999,395,660.17 |
| Including:USD | 119,671,348.47 | 6.3757 | 762,988,616.44 |
| EUR | 13,375,062.58 | 7.2197 | 96,563,939.31 |
| HKD | 11,405,383.07 | 0.8176 | 9,325,041.20 |
| VND | 29,522,014,355.00 | 0.000280065 | 8,268,082.95 |
| JPY | 84,281,787.00 | 0.055415 | 4,670,475.23 |
| CHF | 16,298,013.68 | 6.9776 | 113,721,020.25 |
| THB | 5,012,583.45 | 0.191175346 | 958,282.38 |
| CAD | 561,931.97 | 5.0046 | 2,812,244.74 |
| Macau Dollar | 69,669.45 | 1.2625 | 87,957.68 |
| Accounts receivable | -- | -- | 1,716,248,124.39 |
| Including:USD | 222,309,533.85 | 6.3757 | 1,417,378,894.97 |
| EUR | 51,566.95 | 7.2197 | 372,297.91 |
| HKD | 82,640,703.91 | 0.8176 | 67,567,039.52 |
| VND | 102,227,456.30 | 0.000280065 | 28,630.33 |
| JPY | 72,964,947.04 | 0.055415 | 4,043,352.54 |
| CHF | 32,512,312.13 | 6.9776 | 226,857,909.12 |
| Receivables financing | 549,247,279.86 | ||
| Including:USD | 86,146,976.78 | 6.3757 | 549,247,279.86 |
| Long-term receivables | 2,274,855.31 | ||
| Including:VND | 8,122,597,646.97 | 0.000280065 | 2,274,855.31 |
| Short-term borrowing | 1,368,249,828.18 | ||
| Including:USD | 194,154,261.44 | 6.3757 | 1,237,869,324.66 |
| CHF | 8,322,580.07 | 6.9776 | 58,071,634.70 |
| EUR | 10,015,494.94 | 7.2197 | 72,308,868.82 |
| Accounts payable | 480,129,004.86 | ||
| Including:HKD | 107,647,852.07 | 0.8176 | 88,012,883.85 |
| USD | 35,822,012.15 | 6.3757 | 228,390,402.86 |
| CHF | 12,211,042.85 | 6.9776 | 85,203,772.59 |
| JPY | 12,180,765.14 | 0.055415 | 674,997.10 |
| EUR | 9,388,145.80 | 7.2197 | 67,779,596.23 |
| THB | 8,086,991.77 | 0.191175346 | 1,546,033.45 |
| VND | 30,426,218,127.93 | 0.000280065 | 8,521,318.78 |
| Non-current liabilities due | 254,007,862.22 |
| withinone year | |||
| Including:USD | 8,575,614.20 | 6.3757 | 54,675,543.45 |
| EUR | 21,611,736.90 | 7.2197 | 156,030,256.90 |
| CHF | 4,818,434.33 | 6.9776 | 33,621,107.38 |
| HKD | 823,950.39 | 0.8176 | 673,661.84 |
| VND | 32,161,436,277.35 | 0.000280065 | 9,007,292.65 |
| Long-term borrowings | -- | -- | 768,114,136.60 |
| Including:USD | 95,497,000.00 | 6.3757 | 608,860,222.90 |
| EUR | 3,033,499.57 | 6.9776 | 21,166,546.60 |
| HKD | |||
| CHF | 18,998,625.27 | 7.2197 | 137,164,374.86 |
| JPY | 16,656,000.00 | 0.055415 | 922,992.24 |
| Lease obligations | 268,272,355.80 | ||
| Including:VND | 79,129,771,083.96 | 0.000280065 | 22,161,479.34 |
| USD | 5,345,377.33 | 6.3757 | 34,080,522.24 |
| CHF | 30,387,289.93 | 6.9776 | 212,030,354.22 |
Other remarks:
(2) Description of overseas business entities, including for important overseas business entities, disclosure oftheir main overseas business locations, functional currency and selection basis, and disclosure of reasonsfor changes in functional currency.
√ Applicable □ Not Applicable
| Entities | Main operating place | Functional currency |
| BeA GmbH and its subsidiaries | Germany, Austria, Australia, Germany, France, the Czech Republic,United States, Norway, Sweden, Switzerland, Slovakia, Spain, Italy, the United Kingdom | EUR, AUD, USD, CHF, GBP |
| Great Star Tools USA,INC. and its subsidiaries | United States | USD |
| Lista Holding AG and its subsidiaries | Switzerland, Austria, Germany, France, Spain, Italy, the United Kingdom | CHF, EUR, GBP |
| Geelong Orchid Holding Limited and its subsidiaries | The British Cayman Islands, Thailand, Hong Kong, Mauritius, Macau | HKD, THB, USD |
| XDD Products (USA) LLC | United States | USD |
| TGH(Cambodia)Industrial Co.,LTD | Cambodia | USD |
| Newland.LLC | United States | USD |
Great Star Japan Co.,LTD
| Great Star Japan Co.,LTD | Japan | JPY |
| Greatstar Europe AG | Switzerland | CHF |
| Prexiso AG | Switzerland | CHF |
| Geelong (Thailand) Co .,Ltd | Thailand | THB |
| Hong Kong International Huada Kejie Opto-Electro Instrument Co., Ltd. | Hong Kong | USD |
| Hong Kong Great Star International Co., Ltd | Hong Kong | USD |
| HongKong Goldblatt Industrial Co.,Ltd | Hong Kong | USD |
| Prim' Tools Limited | Hong Kong | HKD |
| Hongkong Shop-Vac International Co., Limited | Hong Kong | USD |
| GreatStar International Holdings Limited | British Virgin Islands | USD |
| Great Star Vietnam Co.,Ltd | Vietnam | VND |
| Vietnam United Co.,Ltd | Vietnam | VND |
| GreatStar Industrial Vietnam Co., Ltd | Vietnam | VND |
83. Hedging
Disclose the qualitative and quantitative information of the hedged items and related hedging instruments and the hedged risksaccording to the types of Hedging:
84. Government grants
(1) Basic information of government grants
Unit: Yuan
| Category | Amount | Presented under | Amount recognized in the current profit and loss |
| Special subsidy for foreign tradepublicserviceplatform construction | 636,555.46 | Other income | 442,666.68 |
| Special subsidy for “substitutingmachine for human” technicaltransformation project | 1,085,393.07 | Other income | 270,271.68 |
| Special subsidy for strategic emerging industries equipment manufacturing projects | 689,999.72 | Other income | 230,000.04 |
| Financial subsidy for capacity expansion project of novel hand tool series products | 160,000.24 | Other income | 99,999.96 |
| Special subsidy for provincial enterprise technology center innovation capacityconstructionproject | 46,296.26 | Other income | 55,555.56 |
| Special fund for strategic emergingindustriesdevelopment pilot project andbase construction | 183,999.88 | Other income | 92,000.04 |
| Subtotal | 2,802,244.63 | 1,190,493.96 |
(2) Returned government grants
□ Applicable √ Not Applicable
Other remarks:
(1) Government grants related to income and used to compensate the Company for related costs or lossesalready incurred
| Item | Amount | Presented under | Basis Documents |
| Industrial support policy funds | 18,050,000.00 | Other income | Jiang Cai Fa〔2020〕No. 46, Shang Cai〔2021〕No. 6 |
| Special funds for foreign trade and economic development | 6,648,200.00 | Other income | Hang Cai Qi〔2020〕NO. 57 |
| Financial subsidies for research and development | 6,361,300.00 | Other income | Zhe Cai Ke Jiao〔2020〕No.34, Jiang Ke〔2020〕No. 10, Qiang Tang Jing Ke〔2021〕No.11, etc. |
| Value-added tax rebate | 3,967,012.05 | Other income | Cai Shui〔2016〕No.52 |
| Business development funds | 3,882,962.80 | Other income | Jiang Cai Fa〔2020〕No.92, Jiang Cai Fa〔2020〕No.96 |
| Employment stabilization subsidies | 2,117,644.30 | Other income | Hang Zheng Han〔2019〕No.19, Hang Renshe Fa﹝2020﹞No.94, etc. |
| Financial special funds | 1,655,766.63 | Other income | Hang Cai Qi〔2021〕No.33, Long Jing Xin〔2021〕No.17, Xian Wei Fa〔2021〕No.32, etc. |
| Special fund for e-commerce funding | 943,400.00 | Other income | Jiang Cai Fa〔2020〕v67 |
| Patent and intellectual property funding | 742,250.00 | Other income | Hang Shi Guan〔2020〕No.173, Hang Shi Guan〔2019〕No.186, Chang Cai Gong Mao〔2019〕No. 12, Chang Cai Gong Mao〔2019〕No.12 |
| Other | 1,488,931.01 | Other income | Relevant documents |
| Subtotal | 45,857,466.79 |
(2) In the current period, government grants included into profit or loss totaled RMB47,047,960.75.
85. Others
VIII. Changes in the consolidation scope
1. Business combination not under common control
(1) Business combination not under common control in current period
Unit: Yuan
| Acquirees | Equity acquisition date | Equity acquisition cost | Proportion of equity acquired (%) | Equity acquisition method | Acquisition date | Determine basisfor acquisition date | Acquiree’s incomefrom acquisition date to period end | Acquiree’s net profitfromacquisition date to period end |
| Acquisition of related operating assets and subsidiary equity of Joh. Friedrich Behrens AG [Note] | June 01, 2021 | 243,418,722.10 | 100.00% | Equity transfer agreement | June 01, 2021 | Transfer of control right | 631,177,117.72 | 84,381,874.47 |
| Geelong Orchid Holding Limited and its subsidiaries | July 02,2021 | 794,236,994.50 | 100.00% | Equity transfer agreement | July 02,2021 | Transfer of control right | 1,124,647,458.44 | -19,877,804.61 |
Other remarks:
[Note] Joh. Friedrich Behrens AG related operating assets and its subsidiaries equity shall be referred to asBeA Company, Geelong Orchid Holding Limited and its subsidiarie shall be referred to as Geelong OrchidHolding Limited.
(2) Combination costs and goodwill
Unit: Yuan
| Combination costs | BeA | Geelong Orchid Holding Limited |
| -- Cash | 243,418,722.10 | 794,236,994.50 |
| --Fair value of non-cash assets | ||
| --Fair value of debt issued or assumed | ||
| --Fair value of equity securities issued |
| -- Fair value of contingent consideration | ||
| -- Fair value of equity interests held prior to the date of purchase at the date of purchase | ||
| --Other | ||
| Total consolidated cost | 243,418,722.10 | 794,236,994.50 |
| Less: Share of fair value of identifiable net assets acquired | 326,403,496.00 | 226,199,135.39 |
| Amount by which goodwill/consolidation cost is less than the share of fair value of identifiable net assets acquired | -82,984,773.90 | 568,037,859.11 |
The illustration of Combination costs fair value determination method , contingent consideration and its movements. Main reason forthe formation of the large amount goodwill:
Other remarks:
(3) Acquisition-date identifiable assets and liabilities of acquirees
Unit: Yuan
| BeA | Geelong Orchid Holding Limited | |||
| Acquisition-date fair value | Acquisition-date carrying amount | Acquisition-date fair value | Acquisition-date carrying amount | |
| Assets: | ||||
| Money funds | 17,762,099.60 | 17,762,099.60 | 19,233,104.87 | 19,233,104.87 |
| Receivables | 105,999,380.10 | 105,999,380.10 | 217,859,223.83 | 217,859,223.83 |
| Inventory | 223,562,467.90 | 223,562,467.90 | 257,110,486.15 | 257,110,486.15 |
| Fixed assets | 71,687,528.27 | 71,687,528.27 | 68,463,662.85 | 44,701,030.31 |
| Intangible assets | 85,414,108.00 | 37,110,980.00 | 225,569.32 | 225,569.32 |
| Prepayments | 10,669,488.40 | 10,669,488.40 | 30,983,565.74 | 30,983,565.74 |
| Other receivables | 6,374,178.60 | 6,374,178.60 | 9,168,702.04 | 9,168,702.04 |
| Right-of-use assets | 49,777,106.80 | 49,777,106.80 | 15,346,921.51 | 15,346,921.51 |
| Long-term amortization | 9,268,206.76 | 4,782,578.96 | ||
| Other Assets | 14,750,071.13 | 14,750,071.13 | 48,998,718.81 | 48,998,718.81 |
| Liabilities: | ||||
| Borrowings | 70,834,397.20 | 70,834,397.20 | ||
| Payables | 91,333,755.90 | 91,333,755.90 | 368,245,573.31 | 368,245,573.31 |
| Deferred income tax liabilities | ||||
| Lease obligations | 49,777,106.80 | 49,777,106.80 | ||
| Employee compensation payable | 16,476,782.98 | 16,476,782.98 | ||
| Taxes payable | 9,046,468.09 | 9,046,468.09 | ||
| Other payables | 33,089,500.28 | 33,089,500.28 | ||
| Other liabilities | 47,647,672.90 | 38,856,503.60 | 23,600,701.83 | 19,363,462.78 |
| Net assets | 326,403,496.00 | 286,891,537.30 | 226,199,135.39 | 202,188,114.10 |
| Less: Minority interests | ||||
| Net assets acquired | 326,403,496.00 | 286,891,537.30 | 226,199,135.39 | 202,188,114.10 |
The fair value determination method of identifiable assets and liabilities:
Determined by reference to the analysis of the fair value of each identifiable asset and liability assessed bythe asset valuer using the asset-basis approach.
The contingent liabilities of the acquirees assumed in the business combination:
Other remarks:
(4) Gain/loss of equity held prior to acquisition-date remeasured at fair value
Whether exists any business combination achieved in stages and gain control during the reporting period or not
□ Yes √ No
(5) Related instructions on that cannot reasonably determine the combination consideration or the fairvalue of the acquiree’s identifiable assets and liabilities at the acquisition date or at the end of theacquisition period.
(6) Other instructions
2. Business combination under common control
(1) Business combination under common control in current period
Unit: Yuan
| Combined party | Proportion of equity arising from business combination | Determination basis of business combination under common control | Combination date | Determination method of combination date | Revenue of the combined party from beginning ofthecombinationto the combinationdate | Net profit of the combined party from beginning of the combination to the combinationdate | Revenue of the combined party during the comparison period | Net profit of the combined party during the comparison period |
Other remarks:
(2) Combination cost
Unit: Yuan
| Combinationcost | |
| --Cash | |
| --Carrying amount of non-cash assets | |
| --Carrying amount of debt issued or assumed | |
| --Notional value of equity securities issued | |
| --Contingent consideration |
Instructions of contingent consideration and its movements:
Other remarks:
(3) Carrying amount of combined party assets and liabilities on the combination date
Unit: Yuan
| Combination date | End of previous period | |
| Assets: | ||
| Money funds | ||
| Receivables | ||
| Inventory | ||
| Fixed assets | ||
| Intangible assets | ||
| Liabilities: | ||
| Borrowings | ||
| Payables | ||
| Net assets | ||
| Less: Minority interests | ||
| Net assets acquired | ||
The contingent liabilities of the acquirees assumed in the business combination:
Other remarks:
3. Reverse purchase
Basic information of the transaction, basis for reverse purchase, whether the assets and liabilities retained by the listed company
constitute business and its basis, determination of combination cost, adjusted amounts and calculation according to the processing ofequity transaction.
4. Disposal of the subsidiaries
Whether exists single disposal of a subsidiary resulting in the Company’s loss of control or not
□ Yes √ No
Whether exists disposal of a subsidiary in stages resulting in the Company’s loss of control or not
□ Yes √ No
5. Changes in the consolidation scope due to other reasons
Explain the changes in the consolidation scope resulting from other causes (such as new subsidiaries, liquidation subsidiaries, etc. )and related information:
1. The scope of combination increased
| Company name | Equity acquisition method | Time point for equity acquisition | Capital contribution | Capital contribution proportion |
| BeA GmbH | Set up | March 18, 2021 | 25,000.00 EUR | 100.00% |
| Hongkong Shop-Vac International Co., Limited | Set up | March 5, 2021 | [Note] | 100.00% |
SK Hand Tool,LLC
| SK Hand Tool,LLC | Set up | May 25, 2021 | [Note] | 100.00% |
| Shenzhen Wankebao Technology Co., Ltd | Set up | March 29, 2021 | 2,828,600.00 RMB | 100.00% |
| GreatStar Industrial Vietnam Co., Ltd | Set up | February 9, 2021 | 17,000,000.00 USD | 100.00% |
| Hangzhou Great Star Power Tool Co., LTD | Set up | September 16, 2021 | 2,000,000.00 RMB | 100.00% |
[Note]As of the balance sheet date, the subsidiary Hong Kong Great Star International Co., Ltd. has not paidin capital contribution in Hongkong Shop-Vac International Co., Limited, and the subsidiary Great Star Tools USA,Inc has not paid in capital contribution in SK Hand Tool,LLC.
2. Entities excluded from the consolidation scope
| Company Name | Equity acquisition method | Time point for equity acquisition | Disposal-date net assets | Net profit from the period beginning to the disposal date |
| Falandi Kitchen & bathroom (Suzhou) Co., Ltd | Cancellation | September 28, 2021 | 2,613,283.77 | |
| Hangzhou Great Star Photoelectric Technology Co., LTD | Cancellation | September 9, 2021 | ||
| Eudura Holding Limited | Cancellation | April 8, 2021 |
6. Others
IX. Interest in other entities
1. Interest in significant subsidiaries
(1) Composition of the Group Company
| Subsidiaries | Mainoperating place | Place of registration | Business nature | Shareholding ratio | Acquisition method | |
| Direct | Indirect | |||||
| Changzhou Huada Kejie Opto-electro Instrument Co., Ltd. | Changzhou, Jiangsu | Changzhou, Jiangsu | Manufacturing | 65.00% | Business combination not under common control | |
| Hangzhou Great Star Tools Co., Ltd. | Hangzhou,Zhejiang | Hangzhou, Zhejiang | Manufacturing | 100.00% | Set up | |
| Hangzhou Great Star Tools Co., Ltd. | Hangzhou,Zhejiang | Hangzhou, Zhejiang | Manufacturing | 100.00% | Business combinationunder common control | |
| Prim' Tools Limited | Hong Kong | Hong Kong | Commerce | 86.96% | Business combination not under common control | |
| Hong Kong Great Star International Co., Ltd. | Hong Kong | Hong Kong | Commerce | 100.00% | Set up | |
| Great Star Tools USA, Inc | United States | United States | Commerce | 100.00% | Set up | |
| Arrow Fastener Co., LLC | United States | United States | Manufacturing | 100.00% | Business combination not under common control | |
| Great Star Industrial USA,LLC | United States | United States | Commerce | 100.00% | Set up | |
| Greatstar Europe AG | Switzerland | Switzerland | Commerce | 100.00% | Set up | |
| Lista Holding AG | Switzerland | Switzerland | Manufacturing | 100.00% | Business | |
| combination not under common control | ||||||
| BeA GmbH | Germany | Germany | Manufacturing | 100.00% | Set up | |
| Zhongshan Geelong Industrial Co., Ltd. | Zhongshan, Guangdong | Zhongshan, Guangdong | Manufacturing | 100.00% | Business combination not under common control |
Instructions if the shareholding proportion differs from the voting rights proportion over the subsidiary:
Basis of holding half or less voting rights but still control the investee and holding more than half of the voting rights but do notcontrol the investee:
The basis of control for the important structured entity included in the scope of consolidation:
The basis for determining whether the Company is an agent or a principal:
Other remarks:
(2) Significant not wholly-owned subsidiaries
Unit: Yuan
| Subsidiaries | Holding proportion of non-controlling shareholders | Non-controlling shareholders’ profit or loss | Dividend declared to non-controlling shareholders | Closing balance of non-controlling interest |
| Changzhou Huada Kejie Opto-electro Instrument Co., Ltd. | 35.00% | 19,955,450.09 | 109,175,474.55 | |
| Prim' Tools Limited | 13.04% | 3,198,578.87 | 755,470.43 | 17,291,627.52 |
Instructions if the non-controlling shareholders proportion differs from the voting rights proportion over the subsidiary:
Other remarks:
(3) Main financial information of significant not wholly-owned subsidiaries
Unit: Yuan
| Subsidiaries | Closing balance | Opening balance | ||||||||||
| Current assets | Non- current assets | Total assets | Current liabilities | Non- current liabilities | Total liabilities | Current assets | Non- current assets | Total assets | Current liabilities | Non- current liabilities | Total liabilities | |
| Changzhou Huada Kejie Opto-ele | 392,051,512.99 | 76,900,365.45 | 468,951,878.44 | 173,686,804.52 | 631,034.97 | 174,317,839.49 | 256,720,509.75 | 78,381,978.16 | 335,102,487.91 | 98,408,432.31 | 10,303.76 | 98,418,736.07 |
| ctro Instrument Co., Ltd. | ||||||||||||
| Prim' Tools Limited | 97,160,819.71 | 10,895,556.96 | 108,056,376.67 | 22,413,209.48 | 22,413,209.48 | 85,971,795.30 | 10,593,060.14 | 96,564,855.44 | 11,249,420.93 | 11,249,420.93 | ||
| Dongguan Ouda Electronics Ltd. | 55,292,072.18 | 10,634,338.67 | 65,926,410.85 | 12,586,952.25 | 1,086,722.10 | 13,673,674.35 | 48,144,058.35 | 7,993,913.58 | 56,137,971.93 | 18,119,854.82 | 18,119,854.82 |
Unit: Yuan
| Subsidiaries | Current period amount | Previous period amount | ||||||
| Operating revenue | Net profit | Totalcomprehensive income | Cash flows fromoperating activities | Operating revenue | Net profit | Totalcomprehensive income | Cash flows fromoperating activities | |
| Changzhou Huada Kejie Opto-electro Instrument Co., Ltd. | 554,110,840.03 | 57,950,287.11 | 57,950,287.11 | 30,233,194.67 | 277,741,153.27 | 21,995,099.11 | 21,995,099.11 | 13,311,165.86 |
| Prim' Tools Limited | 288,470,625.69 | 8,311,220.20 | 8,311,220.20 | 6,104,141.24 | 167,093,194.15 | 9,266,042.10 | 4,523,437.66 | 4,068,305.99 |
| Dongguan Ouda Electronics Ltd. | 172,937,118.80 | 14,234,619.39 | 14,234,619.39 | -9,893,790.30 | 108,579,831.16 | 8,884,587.30 | 8,884,587.30 | 2,478,629.98 |
Other remarks:
(4) Significant restrictions on the use of company assets and the settlement of company debt
(5) Financial support or other support to structured entities included in the consolidated financialstatementsOther remarks:
2. Transactions resulting in changes in subsidiaries’ equity but without losing control
(1) Description of the changes in the owner's equity share in a subsidiary
| Subsidiaries | Date of change | Holding proportion before change | Holding proportion after change |
| Longyou Yiyang Forging Co., Ltd. | August 2021 | 85.1775% | 91.9150% |
| Longyou Huguang Forging Three Tools Co., Ltd. | August 2021 | 67.00% | 82.00% |
| Hangzhou Great Star Sheffield Tools Co., Ltd. | May 2021 | 66.00% | 68.13% |
| PREXISO Laser Measurement Tool (Hangzhou) Co., Ltd | June 2021 | 51.00% | 100.00% |
(2) Effect of transactions on non-controlling interest and equity attributable to parent company
Unit: Yuan
| Longyou Yiyang Forging Co., Ltd. | Longyou Huguang Forging Three Tools Co., Ltd. | Hangzhou Great Star Sheffield Tools Co., Ltd. | PREXISO Laser Measurement Tool (Hangzhou) Co., Ltd | |
| Purchase cost/disposal consideration | ||||
| --Cash | 1,239,140.91 | 18,760,859.09 | 106,500.00 | 95,000.00 |
| --Fair value of non-cash assets | ||||
| Total purchase cost/disposal consideration | 1,239,140.91 | 18,760,859.09 | 106,500.00 | 95,000.00 |
| Less: Share of net assets of subsidiaries based on percentage of equity acquired/disposed | 3,336,498.29 | 21,178,432.96 | 73,586.43 | -1,644,850.54 |
| Difference | -2,097,357.38 | -2,417,573.87 | 32,913.57 | 1,739,850.54 |
| Including:Adjust capital reserves | -2,097,357.38 | -2,417,573.87 | -32,913.57 | -1,739,850.54 |
| Adjust surplus reserves | ||||
| Adjust the undistributed profits |
Other instructions
3. Interest in joint ventures and associates
(1) Significant joint ventures and associates
| Associates | Main operating place | Place of registration | Business nature | Shareholding ratio (%) | Accounting treatment on investments in joint ventures and associates | |
| Direct | Indirect | |||||
| Hangzhou Zhongce Haichao Enterprise Management Co., Ltd. | Hangzhou, Zhejiang | Hangzhou, Zhejiang | Manufacturing | 27.86% | Equity method | |
| Zhejiang Hangcha Holding Co., Ltd. | Hangzhou, Zhejiang | Hangzhou, Zhejiang | Manufacturing | 20.00% | Equity method | |
| Zhejiang Guozi Robotics Co., Ltd. | Hangzhou, Zhejiang | Hangzhou, Zhejiang | Manufacturing | 21.95% | Equity method | |
| Ningbo Donghai Bank Co., Ltd. | Ningbo, Zhejiang | Ningbo, Zhejiang | Finance | 19.00% | Equity method | |
| Shanghai Reno Opto-electronics Technology Co., Ltd. | Shanghai | Shanghai | Commerce | 26.00% | Equity method[Note] | |
| Changzhou Stabila Laser Instrument Company Limited | Changzhou, Jiangsu | Changzhou, Jiangsu | Manufacturing | 31.85% | Equity method[Note] | |
| Hangzhou Weina Technologies Co., Ltd. | Hangzhou, Zhejiang | Hangzhou, Zhejiang | Manufacturing | 32.53% | Equity method | |
Instructions if the holding proportion differs from the voting rights proportion over the associates or joint ventures :
[Note]The Company holds 26.00% and 31.85% equity of Shanghai Reno Opto-electronics Technology Co.,Ltd. and Changzhou Stabila Laser Instrument Company Limited, respectively, through Changzhou Huada KejieOpto-electro Instrument Co., Ltd.
Basis for significant influence over an entity on which the Company held less than 20% voting rights:
The Company holds 19.00% equity of Ningbo Donghai Bank Co., Ltd., making it its second largestshareholder. The Company has representatives in its Board of Directors who have the power to participate indecision-making on its financial and operating policies.
(2) Main financial information of significant joint ventures
Unit: Yuan
| Closing balance/Current period amount | Opening balance/Previous period amount | |
| Current assets | ||
| Including:Cash and cash equivalents | ||
| Non-current assets | ||
| Total assets | ||
| Current liabilities | ||
| Non-current liabilities | ||
| Total liabilities | ||
| Minority interests | ||
| Equity attributable to shareholders of the parent company | ||
| Share of net assets based on percentage of shareholding | ||
| Adjustments | ||
| --goodwill | ||
| --Unrealized profit on internal transactions | ||
| --Other | ||
| Carrying value of equity investments in joint ventures | ||
| Fair value of equity investments in joint ventures for which publicly quoted prices exist | ||
| Operating income | ||
| Finance costs | ||
| Income tax expense | ||
| Net profit | ||
| Net profit from discontinued operations | ||
| Other comprehensive income | ||
| Total comprehensive income | ||
| Dividends received from joint ventures for this year |
Other instructions
(3) Main financial information of significant associates
Unit: Yuan
| Closing balance/Current period amount | Opening balance/Previous period amount | |||
| Zhejiang Hangcha Holding Co., Ltd. | Hangzhou Zhongce Haichao Enterprise Management Co., Ltd. | Zhejiang Hangcha Holding Co., Ltd. | Hangzhou Zhongce Haichao Enterprise Management Co., Ltd. | |
| Current assets | 7,418,780,740.77 | 14,948,356,801.94 | 5,266,602,511.85 | 11,919,303,863.72 |
| Non-current assets | 3,731,133,085.89 | 19,969,457,376.52 | 3,320,081,434.69 | 17,365,495,939.83 |
| Total assets | 11,149,913,826.66 | 34,917,814,178.46 | 8,586,683,946.54 | 29,284,799,803.55 |
| Current liabilities | 3,477,650,918.98 | 15,446,567,589.35 | 2,699,270,768.05 | 11,153,905,066.11 |
| Non-current liabilities | 961,010,530.12 | 7,448,879,770.24 | 66,317,470.95 | 6,656,783,282.56 |
| Total liabilities | 4,438,661,449.10 | 22,895,447,359.59 | 2,765,588,239.00 | 17,810,688,348.67 |
| Minority interests | 3,593,193,876.73 | 7,467,456,772.20 | 3,212,910,476.72 | 6,674,388,762.33 |
| Equity attributable to shareholders of the parent company | 3,118,058,500.83 | 4,554,910,046.67 | 2,608,185,230.82 | 4,799,722,692.55 |
| Share of net assets based on percentage of shareholding | 623,611,700.17 | 1,268,865,846.61 | 521,637,046.16 | 1,169,932,406.31 |
| Adjustments | 108,979,700.00 | 108,979,700.00 | ||
| --Goodwill | 108,979,700.00 | 108,979,700.00 | ||
| --Unrealized profit on internal transactions | ||||
| --Other | ||||
| Carrying amount of equity investments in associates | 732,591,400.17 | 1,268,865,846.61 | 630,616,746.16 | 1,169,932,406.31 |
| Fair value of equity investments in associates for which publicly quoted prices exist | ||||
| Operating income | 14,493,418,510.34 | 30,285,690,427.77 | 11,455,727,931.42 | 28,148,326,923.56 |
| Net profit | 488,571,114.34 | 556,078,278.04 | 396,530,359.13 | 720,788,625.43 |
| Net profit from | ||||
| discontinued operations | ||||
| Other comprehensive income | -25,326,711.49 | -193,723,391.25 | -10,646,148.27 | -90,602,055.61 |
| Total comprehensive income | 463,244,402.85 | 362,354,886.79 | 385,884,210.86 | 630,186,569.82 |
| Dividends received from associates for this year | 20,000,000.00 |
Other instructions
(4) Aggregate financial information of immaterial joint ventures and associates
Unit: Yuan
| Closing balance/Current period amount | Opening balance/Previous period amount | |
| Joint ventures: | -- | -- |
| Total of the following in proportion to shareholding | -- | -- |
| Associates: | -- | -- |
| Total investment carrying amount | 352,485,457.57 | 407,329,329.45 |
| Total amount of the following items in proportion to shareholding | -- | -- |
| --Net profit | 1,101,187.62 | 5,531,925.43 |
| --Other comprehensive income | 1,477,170.16 | -393,307.40 |
| -- Total comprehensive income | 2,578,357.78 | 5,138,618.03 |
Other instructions
(5) Instructions of significant restrictions on the ability of joint ventures or associates to transfer funds tothe Company
(6) Excess losses incurred by joint ventures and associates
Unit: Yuan
| Associates | Accumulated unrecognized prior period losses | Unrecognized current period losses (netprofit shared in currentperiod) | Unrecognized losses at the balance sheet date |
| Shanghai Reno Opto-electronics Technology Co.,Ltd. | -700,243.68 | 6,412.23 | -693,831.45 |
Other instructions
(7) Unconfirmed commitment related to the joint venture investment
(8) Contingent liabilities related to the joint venture and associates investment
4. Major joint operations
| Joint operations name | Main locations | Registered address | Business nature | Holding proportion /Share | |
| Direct | Indirect | ||||
Instructions if the shareholding proportion differs from the voting rights proportion over the joint operations:
If the joint operation is a single entity, notify the basis classified as joint operation:
Other instructions
5.The equity of the structured entity not involved in the scope of consolidationRelated instructions for the structured entity not involved in the scope of consolidation.
6. Others
X. Risks related to financial instrumentsIn risk management, the Company aims to seek the appropriate balance between the risks and benefits fromits use of financial instruments and to mitigate the adverse effects that the risks of financial instruments have onthe Company’s financial performance, so as to maximize the profits of shareholders and other equity investors.Based on such risk management objectives, the Company’s risk management policies are established to identifyand analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks andadherence to limits on a timely and reliable basis.The Company has exposure to the following risks from its use of financial instruments, which mainly include:
credit risk, liquidity risk, and market risk. The Management has deliberated and approved policies concerningsuch risks, and details are:
(I) Credit riskCredit risk is the risk that one party to a financial instrument will cause a financial loss for the other party byfailing to discharge an obligation.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each balance sheet date, the Company assesses whether the credit risk on a financial instrument hasincreased significantly since initial recognition. When assessing whether the credit risk has increased significantlysince initial recognition, the Company takes into account reasonable and supportable information, which isavailable without undue cost or effort, including qualitative and quantitative analysis based on historical data,external credit risk rating, and forward-looking information. The Company determines the changes in default riskof financial instruments during the estimated lifetime through comparison of the default risk at the balance sheetdate and the initial recognition date, on an individual basis or a collective basisThe Company considers the credit risk on a financial instrument has increased significantly when one ormore of the following qualitative and quantitative standards are met:
1)Quantitative standard mainly relates to the scenario in which, at the balance sheet date, the probability ofdefault in the remaining lifetime has risen by more than a certain percentage compared with the initial recognition
2)Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financialposition, present or expected changes in technology, market, economy or legal environment that will havesignificant adverse impact on the debtor’s repayment ability
(2) Definition of default and credit-impaired assets
A financial instrument is defined as defaulted when one or more following events have occurred, of whichthe standard is consistent with that for credit-impairment:
1)significant financial difficulty of the debtor；
2)a breach of binding clause of contract；
3)it is very likely that the debtor will enter bankruptcy or other financial reorganization；
4)the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty,having granted to the debtor a concession(s) that the creditor would not otherwise consider。
2.Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default, loss rate ofdefault, and exposure to default risk. The Company develops a model of the probability of default, loss rate ofdefault, and exposure to default risk on the basis of quantitative analysis of historical data (e.g. counterparty rating,guarantee measures and collateral type, payment method, etc.) and forward-looking information。
3.Please refer to section V (I) 4, 5, and 7 of the notes to the financial statements for details on thereconciliation table of openingbalance and closing balance of provision for losses of financial instrument
4.Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order tocontrol such risks, the Company has taken the following measures
(1)Cash and bank balances
The Company deposits its bank balances and other cash and bank balances in financial institutions withrelatively high credit levels, hence, its credit risk is relatively low.
(2)Receivables
The Company performs credit assessment on customers using credit settlement on a continuous basis. TheCompany selects credible and well-reputed customers based on credit assessment result, and conducts ongoingmonitoring on balance of receivables, to avoid significant risks in bad debts.
As the Company only conducts business with credible and well-reputed third parties, collateral is notrequired from customers. The Company manages credit risk aggregated by customers. As of December 31, 2021,the Company has certain concentration of credit risk, and 37.03% (December 31, 2020: 36.10%) of the totalaccounts receivable was due from the five largest customers of the Company. The Company held no collateral orother credit enhancement on balance of receivables.
The maximum amount of exposure to credit risk of the Company is the carrying amount of each financialasset at the balance sheet.
(II) Liquidity risk
Liquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligationsassociated with cash or other financial assets settlement, which is possibly attributable to failure in sellingfinancial assets at fair value on a timely basis, or failure in collecting liabilities from counterparties of contracts, orearly redemption of debts, or failure in achieving estimated cash flows.
In order to control such risk, the Company comprehensively utilized financing tools such as notes settlement,bank borrowings, etc. and adopts long-term and short-term financing methods to optimize financing structures,
and finally maintains a balance between financing sustainability and flexibility. The Company has obtained creditlimit from several commercial banks to meet working capitalrequirements and expenditures.Financial liabilities classified based on remaining time period till maturity
| Item | Closing balance | ||||
| Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 year(s) | Over 3 years | |
| Bank borrowings | 3,055,148,295.97 | 3,139,533,799.57 | 2,057,990,775.73 | 494,435,452.74 | 587,107,571.10 |
Tradingfinancialliabilities
| Trading financial liabilities | 978,031.91 | 978,031.91 | 978,031.91 | ||
| Notes payable | 51,728,000.00 | 51,728,000.00 | 51,728,000.00 | ||
| Accounts payable | 1,640,430,929.84 | 1,640,430,929.84 | 1,640,430,929.84 | ||
| Other payables | 676,502,987.21 | 676,502,987.21 | 676,502,987.21 | ||
| Lease obligations | 414,921,112.20 | 422,186,814.93 | 125,724,601.18 | 140,362,949.63 | 156,099,264.12 |
Subtotal
| Subtotal | 5,839,709,357.13 | 5,931,360,563.46 | 4,553,355,325.87 | 634,798,402.37 | 743,206,835.22 |
| Item | Opening balance | ||||
| Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 year(s) | Over 3 years | |
| Bank borrowings | 1,720,841,106.36 | 1,859,165,409.05 | 1,334,629,400.52 | 441,933,719.49 | 82,602,289.04 |
Notes payable
| Notes payable | 24,913,000.00 | 24,913,000.00 | 24,913,000.00 | ||
| Accounts payable | 1,168,327,985.88 | 1,168,327,985.88 | 1,168,327,985.88 | ||
| Other payables | 26,425,047.57 | 26,425,047.57 | 26,425,047.57 | ||
| Lease obligations | 271,850,870.28 | 271,850,870.28 | 25,546,871.20 | 48,895,764.20 | 197,408,234.88 |
| Long-term payables | 1,499,174.07 | 1,499,174.07 | 703,214.57 | 795,959.50 | |
| Bonds payable | 799,729,005.89 | 1,121,084,289.21 | 25,116,810.36 | 109,548,195.96 | 986,419,282.89 |
Subtotal
| Subtotal | 4,013,586,190.05 | 4,473,265,776.06 | 2,605,662,330.10 | 601,173,639.15 | 1,266,429,806.81 |
(III) Market riskMarket risk is the risk that the Company may encounter fluctuation in fair value or future cash flows offinancial instruments due to changes in market price. Market risk mainly includes interest risk and foreigncurrency risk.
1. Interest risk
Interest risk is the risk that an enterprise may encounter fluctuation in fair value or future cash flows offinancial instruments due to changes in market interest. The Company’s fair value interest risks arise fromfixed-rate financial instruments, while the cash flow interest risks arise from floating-rate financial instruments.
The Company determines the proportion of fixed-rate financial instruments and floating-rate financial instrumentsbased on the market environment, and maintains a proper financial instruments portfolio through regular reviewand monitoring. The Company’s interest risk in cash flows relates mainly to bank borrowings with floatinginterest rate.
As of December 31, 2021, balance of borrowings with interest accrued at floating interest rate totaledRMB929,187,140.36 (December 31, 2020: RMB1,009,781,140.56). If interest rates had been 50 basis pointshigher/lower and all other variables were heldconstant, the Company’s gross profit and equity will not besignificantly affected
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in fair value or future cash flows of financialinstrument resulted from changes in exchange rate. The Company’s foreign currency risk relates mainly to foreigncurrency monetary assets and liabilities. When short-term imbalance occurred to foreign currency assets andliabilities, the Company may trade foreign currency at market exchange rate when necessary, in order to maintainthe net risk exposure within an acceptable level.
Please refer to section V (IV) 2 of notes to financial statements for details in foreign currency financial assetsand liabilities at the end of the period
IX. Fair value disclosure
1. Details of fair value of assets and liabilities at fair value at the balance sheet date
Unit: Yuan
| Item | Fair value as of the balance sheet date | |||
| Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total | |
| I. Continuing fair value measurement | -- | -- | -- | -- |
| (I) Trading financial assets | 9,227,687.75 | 4,330,070.00 | 13,557,757.75 | |
| 1. Financial assets at fair value through profit or loss | 9,227,687.75 | 4,330,070.00 | 13,557,757.75 | |
| (2) Investments in equity instruments | 9,227,687.75 | 9,227,687.75 | ||
| (3) Derivative financial assets | 4,330,070.00 | 4,330,070.00 | ||
| (3) Investments in other equity instruments | 16,550,000.00 | 16,550,000.00 | ||
| (iv) Receivables financing | 559,020,827.52 | 559,020,827.52 | ||
| Total assets continuously measured at fair value | 9,227,687.75 | 4,330,070.00 | 575,570,827.52 | 589,128,585.27 |
| (vi) Financial liabilities | 978,031.91 | 978,031.91 | ||
| for trading | ||||
| Derivative financial liabilities | 978,031.91 | 978,031.91 | ||
| Total liabilities measured at fair value on a continuing basis | 978,031.91 | 978,031.91 | ||
| II. Non-continuing fair value measurements | -- | -- | -- | -- |
2. Basis for determining level 1 fair value at recurring and non-recurring fair measurement
Debt instrument investments are measured using market quotes as a reasonable estimate of fair value.
3. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 2 fair valueat recurring and non-recurring fair measurement
Derivative financial assets are measured using valuation notices provided by banks and securities companiesas a reasonable estimate of fair value.
4. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 3 fair valueat recurring and non-recurring fair measurement
1. As receivables financing is within 1 year, whose time value has no significant impact on the fair value, it isrecognized that the fair value of receivables financing mentioned above is approximately equal to its carryingamount.
2. Equity instrument investments and other equity instrument investments (Hangzhou Haibang Xinhu Talent
Venture Capital Investment Partnership (LP)), are measured using investment cost as a reasonable estimate of fairvalue, based on overall consideration of business environment and operating conditions.
5.Continuous third level fair value measurement items, adjustment information between opening balanceand closing balance and sensitivity analysis of the non-observable parameter
6.Continuous fair value measurement items, the reasons for conversion and the policy for conversion timedetermination if it occurs different levels’ conversion during current period
7.Valuation techniques changing and its reason in current period
8.The fair value of financial assets and financial liabilities not measured with fair value.
9. Others
XII. Related party relationships and transactions
1. Parent Company
| Parent company | Place of registration | Business nature | Registered capital | Holding proportion over the Company (%) | Voting right proportion over the Company (%) |
| Greatstar Holding Group.Ltd | Hangzhou | Industrial investment | 100 million yuan | 40.56% | 40.56% |
Instructions for the parent company:
The Company’s ultimate controlling party is Qiu Jianping.
The ultimate controller of the enterprise is:
Other remarks:
2. Subsidiaries of the Company
See note IX, Interest in significant subsidiaries.
3. Associates and joint ventures of the Company
See note IX, Interest in joint venture and associates.The information of other associates or joint ventures with related party transactions to the Company or existing carrying amount withthe Company in previous periods are as follows:
| Associates/ joint ventures names | Relationship with the Company |
Other instructions
4. Other related parties of the Company
| Other related parties | Relationships with the Company |
| Wang Lingling | Actual control person spouse, act in concert person |
| Hangzhou Great Star Precision Machinery Co., Ltd. | Controlled by the same actual controller |
| Hangcha Group Co., Ltd.and its affiliated companies | Controlled by the same actual controller |
| Zhongce Rubber Group Company Limited.and its affiliated companies | Companies controlled by the Company's associate, Hangzhou Zhongce Haichao Enterprise Management Co.,Ltd. |
| Hangzhou Weiming Investment Management Co., Ltd. | The original joint venture of the company |
Other instructions
5. Related party transactions
(1) Purchase and sale of goods, rendering and receiving of services
Purchase of goods and receiving of services
Unit: Yuan
| Related parties | Content of transaction | Current period amount | Approval amount | Exceed the limitation or not | Previous period amount |
| Shanghai Reno Opto-electronics Technology Co., Ltd. | Material | 7,192.04 | 100,000.00 | No | 70,094.25 |
| Zhejiang Guozi Robotics Co., Ltd. | Product and service | 785,830.34 | 15,000,000.00 | No | 1,840,830.51 |
| Hangcha Group Co., Ltd. and its affiliated companies | Forklift, spare parts and maintenance | 9,749,969.30 | 30,770,000.00 | No | 6,054,457.09 |
| Hangcha Group Co., Ltd. and its affiliated companies | Automatic storage system | 781,280.21 | 30,770,000.00 | No | 1,296,460.17 |
| Changzhou Stabila Laser Instrument Company Limited | Material | 10,000,000.00 | No | 129,853.95 | |
| Changzhou Stabila Laser Instrument Company Limited | Labour service | 10,000,000.00 | No | 23,722.40 | |
| Zhongce Rubber Group Company Limited.and its affiliated companies | Spare parts and maintenance costs | 1,050,065.29 | 400,000,000.00 | No | 612,489.60 |
| Hangzhou Weina Technology Co., | Software and hardware | 37,168.14 | 500,000.00 | No |
| Ltd. | |||||
| No |
Sale of goods and rendering of services
Unit: Yuan
| Related parties | Content of transaction | Current period amount | Previous period amount |
| Changzhou Stabila Laser Instrument Company Limited | Laser measurement product | 8,802,699.15 | 5,003,092.51 |
| Changzhou Stabila Laser Instrument Company Limited | Water and electricity | 117,404.10 | 123,594.90 |
| Changzhou Stabila Laser Instrument Company Limited | Consulting service | 2,520,746.47 | 2,593,278.97 |
| Changzhou Stabila Laser Instrument Company Limited | Labour service | 29,940.00 | |
| Shanghai Reno Opto-electronics Technology Co., Ltd. | Sale of goods | 1,937,505.66 | |
| Zhongce Rubber GroupCompany Limited | Hand tool | 14,409.98 | 301,911.46 |
| Hangcha Group Co., Ltd. and its affiliated companies | Hand tool and spare parts | 16,188,555.01 | 15,177,595.81 |
| Hangcha Group Co., Ltd. and its affiliated companies | Operating service | 2,535,515.08 | 1,250,867.26 |
| Zhejiang Guozi Robotics Co., Ltd.and its affiliated companies | Hand tool | 9,957,102.80 | 4,387,224.01 |
| Hangzhou Weina Technologies Co., Ltd. | Technical service | 75,943.40 |
Instructions for purchase and sale of goods, rendering and receiving of services
(2) Situation for related entrusted management/contracting and entrusting management/subcontractingThe situation for entrusted management/contracting
Unit: Yuan
| Name of the entrusting party/subcontract or | Name of the entrusted party/contractor | Asset types for entrusted/contracting | The starting date of entrusting/contracting | The expiry date of entrusted/contracting | Pricing basis for entrusting income/contracting income | Entrusting income/contracting income confirmed in current period |
Instructions for related entrusting/contracting situationThe situation table for entrusting management/subcontracting
Unit: Yuan
| Name of the entrusting party/subcontract or | Name of the entrusted party/contractor | Asset types for entrusting/subcontracting | The starting date of entrusting/subcontracting | The expiry date of entrusting/subcontracting | Pricing basis for entrusted fee/subcontracting fee | Entrusted fee/subcontracting fee confirmed in current period |
Instructions for related management/subcontracting situation
(3) Related party leases
The Company as the lessor:
Unit: Yuan
| Lessees | Types of asset leased | Lease income for Year 2021 | Lease income for Year 2021 |
| Changzhou Stabila Laser Instrument Company Limited | Buildings | 176,106.15 | 185,392.35 |
The Company as the lessee:
Unit: Yuan
| Lessor | Types of asset leased | Lease expenses for Year 2021 | Lease expenses for Year 2020 |
| Hangzhou Great Star Precision Machinery Co., Ltd. | Buildings | 1,264,476.19 | 1,296,000.00 |
| Hangcha Group Co., Ltd. and its affiliated company Shanghai Hangcha Forklift Sales Co., Ltd. | Transport facilities | 243,840.42 | 241,057.06 |
Instructions for related party leases
(4) Related party guarantee
The Company as the guarantor
Unit: Yuan
| Guaranteed party | Amount | Starting date | Maturity | Performance completed or not |
The Company as the guaranteed party
Unit: Yuan
| Guarantor | Amount | Starting date | Maturity | Performance completed or not |
Instructions for related party guarantee:
The Company issued letter of guarantee for bank loans of GreatStar Europe AG, a wholly-owned subsidiary,and GreatStar Greatstar Holding Group. Ltd provided suretyship guarantee for the letter of guarantee issued by theCompany. As of December 31, 2021, the balance of bank loans under the letter of guarantee totaled EUR34,000,000.00, with payment maturity between February 28, 2022 and June 26, 2023.
(5) Fund borrowing from related parties
Unit: Yuan
| Related party | Amount | Starting date | Maturity | Notes |
| Borrow | ||||
| Mr.Qiu Jianping and his concerted action person, Ms.Wang Lingling | 583,000,000.00 | As resolved at the fifteenth meeting of the fifth session of the Board of Directors and the second extraordinary general meeting of 2021, the Company accepts financial assistance from Qiu Jianping, the de facto controller, and Wang Lingling, the person acting in concert with him, in the principal amount of not more than RMB583 million, for a term of not more than one year from the date of approval at the general meeting of the Company, which can be used on a revolving basis during the validity period, and the Company can repay the amount in advance according to actual needs. The interest rate is not higher than the interest rate of bank loans in the same period. | ||
| Lend | ||||
(6) Assets exchange or debt restructuring between the related parties
Unit: Yuan
| Related party | Related party transaction items | Current period amount | Previous period amount |
(7) Key management’s emoluments
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Key management’s emoluments | 12,192,656.29 | 9,162,360.40 |
(8) Other transactions with related parties
6. Balance due to or from related parties
(1) Receivables
Unit: Yuan
| Item | Related Party | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Receivable | Changzhou Stabila Laser Instrument Company Limited | 8,233,675.28 | 411,683.76 | 2,161,820.67 | 108,091.03 |
| Receivable | Shanghai Reno Opto-electronics Technology Co., Ltd. | 3,779,983.57 | 188,999.18 | 1,684,295.07 | 84,214.75 |
| Receivable | Hangcha Group Co., Ltd. and its affiliates | 1,229,141.76 | 61,457.09 | 1,903,592.60 | 95,179.63 |
| Receivable | Zhejiang Guozi Robotics Co., Ltd. and its affiliates | 10,664,320.29 | 533,216.01 | 3,390,261.58 | 169,513.08 |
| Subtotal | 23,907,120.90 | 1,195,356.04 | 9,139,969.92 | 456,998.49 | |
| Receivables financing-Bank acceptance | Zhejiang Guozi Robotics Co., Ltd. | 0.00 | 0.00 | 2,800,000.00 | 0.00 |
| Subtotal | 0.00 | 0.00 | 2,800,000.00 | 0.00 | |
| Notes receivable | Zhejiang Guozi Robotics Co., Ltd. | 20,702.51 | 0.00 | 0.00 | |
| Subtotal | 20,702.51 | 0.00 | 0.00 | ||
| Prepayments | Zhejiang Guozi Robotics Co., Ltd. | 0.00 | 0.00 | 414,974.87 | 20,748.74 |
| Subtotal | 0.00 | 0.00 | 414,974.87 | 20,748.74 | |
| Other receivables | Hangzhou Weiming Investment Management Co., Ltd. | 6,160,202.73 | 308,010.14 | ||
| Subtotal | 6,160,202.73 | 308,010.14 |
(2) Payables
Unit: Yuan
| Item | Related Party | Closing balance | Opening balance |
| Accounts payable | Hangzhou Zhongce Auto Space Automobile Service Co., Ltd. | 2,064.00 | 156,708.54 |
| Accounts payable | Zhejiang Guozi Robotics Co., Ltd. and its affiliates | 920,220.37 | 3,800,654.70 |
| Accounts payable | Hangcha Group Co., Ltd. and its affiliates | 2,595,530.60 | 6,305,294.00 |
| Accounts payable | Hangzhou Great Star Precision Machinery Co., Ltd. | 124,000.00 | 240,500.00 |
| Subtotal | 3,641,814.97 | 10,503,157.24 | |
| Other payables | Hangzhou Great Star Precision Machinery Co., Ltd. | 0.00 | 12,000.00 |
| Qiu Jianping, Wang Lingling | 583,570,527.78 | ||
| Subtotal | 583,570,527.78 | 12,000.00 |
7. Related party commitments
8. Other
XIII. Share-based payment
1. Overall situation of Share-based payment
□ Applicable √ Not Applicable
2. Equity-settled share-based payment
□ Applicable √ Not Applicable
3. Cash-settled share-based payment
□ Applicable √ Not Applicable
4. Amendment and termination of share-based payment
5. Others
XIV. Commitments and contingencies
1. Important commitments
Significant commitments on balance sheet dateAs of the approved issuing date of this report, the Company has no significant commitments to be disclosed
2. Contingencies
（1）Important contingent matters as at the balance sheet date
As of the approved issuing date of this report, the Company has no significant contingencies to be disclosed.
（2）The Company has no important contingent matters to disclose, and also should make illustrationThere are no significant contingent matters to be disclosed.
3. Other
XV. Events after the balance sheet date
1. Important non-adjustment matters
Unit: Yuan
| Item | Content | Amount of impacts on financial position and operating results | Reasons for failure to estimate impact |
2. Distribution of profits
Unit: Yuan
3. Sales return
4. Other events after the balance sheet date
Profit distribution after the balance sheet dateOn April 11, 2022, the 8th meeting of the 5th session of the Board of Directors of the Company consideredand approved the "Proposal on the Company's Profit Distribution Proposal for the Year 2021". In 2021, theCompany will not pay cash dividends, will not send bonus shares, will not increase capital by capital reserve, andthe remaining undistributed profits will be carried forward to the next year.
XVI. Other significant matters
1. Accounting error correction for previous period
(1) The retrospectively adjusted method
Unit: Yuan
| Content of accounting error correction | Processing procedure | Each effected report items of comparative period | Accumulative effected amount |
(2) Prospective application method
| Content of accounting error correction | Approval procedure | Reason |
2.Debt restructuring
3.Assets Exchange
（1）Non-cash Assets Exchange
（2）Other assets Exchange
4.Annuity Plan
5. Discontinued operations
Unit: Yuan
| Item | Revenue | Expenses | Profit before tax | Income tax | Net profit | Net discontinued operations profit attributable to owners of the parent company |
Other instructions
6. Segment information
(1) Determination basis and accounting policy of the reportable segments
Reportable segments are identified according to the structure of the Company’s internal organization,management requirements and internal reporting system, and based on product segments. Assets and liabilitiesshared by different segments are allocated among segments proportionate to their respective sizes.The Company determines the reporting segments on the basis of the regional segments, the main operatingrevenue and the main operating cost shall be divided by the actual sales place, and the assets and liabilities shall
be divided by the location of the operating entity.
(2) Financial information of product segments
Unit: Yuan
| Item | Hand Tools | Power Tools | Laser Measurement | Storage | PPE | Offset | Total |
| Revenue from main operations | 6,540,834,718.85 | 1,021,102,413.74 | 888,587,229.84 | 2,370,715,437.22 | 28,685,764.76 | 10,849,925,564.41 | |
| Cost of main operations | 4,716,308,916.32 | 799,043,331.71 | 648,486,058.41 | 1,959,219,152.16 | 24,332,451.85 | 8,147,389,910.45 | |
| Total assets | 13,179,632,291.26 | 1,179,709,194.26 | 638,231,863.17 | 2,304,979,653.36 | 4,601,884.62 | 17,307,154,886.67 | |
| Total liabilities | 4,253,567,577.01 | 1,116,595,607.66 | 213,533,614.09 | 910,168,297.07 | 6,493,865,095.83 |
(3) If the Company has no reporting segments or cannot disclose the total assets and liabilities of eachreporting segments, the reasons shall be explained
(4) Other instructions
7.Other important transactions and matters that can affect investor decision - making 8、Others
8.Other
(II) Lease
1. The company as lessee
(1)Please refer to section V (I) 17 of notes to financial statements for details on right-of-use assets.
(2) Please refer to section III (29) of notes to financial statements for details on the Company’s accountingpolicies on short- term leases and leases for which the underlying asset is of low value. The amounts of short-termleases and low-value asset leases included into profit or loss are as follows
| Item | Current period amount | Amount of the same period last year |
| Short term rental fees | 44,003,860.27 | 582,301.10 |
| Low-value asset lease fee (except for short-term lease) | 657,286.80 | 228,497.90 |
Total
| Total | 44,661,147.07 | 810,799.00 |
(3) Current profit and loss and cash flow related to the lease
| Item | Current period amount |
Interest expense for the lease liability
| Interest expense for the lease liability | 9,721,218.32 |
| Total cash outflow related to the lease | 59,939,559.59 |
(4) Please refer to the description of note VIII (2) of the lease liabilities and the corresponding liquidity risk
management.
2. The company as a lessor
(1) Operating lease
1) Lease income
| Item | Current period amount | Amount of the same period last year |
Lease income
| Lease income | 18,779,421.23 | 11,727,101.90 |
2) Operating leased assets
| Item | Closing balance |
| Fixed assets | 6,623,884.70 |
| Investment real estate | 127,058,966.69 |
Subtotal
| Subtotal | 133,682,851.39 |
Please refer to Note V(1) 15 of the operating leased fixed assets.
3) Uncancellation of the future outstanding lease proceeds under the lease contract with the lessee
| Remaining period | Closing balance | Opening balance |
| Within 1 year | 17,983,746.50 | 515,963.00 |
Over 1 year
| Over 1 year | 157,079,216.00 | 523,333.90 |
| Total | 175,062,962.50 | 1,039,296.90 |
(2) Finance lease
1) Current period profit or loss related to finance lease
| Item | Current period amount | Amount of the same period last year |
| Finance income on the net investment in the lease | 84,811.20 | 2,255,495.40 |
2) Undiscounted lease payments to be received arising from non-cancellable leases based on the leasecontract signed with lessee
| Remaining years | Closing balance | Opening balance |
Within 1 year
| Within 1 year | 90,708.80 | 95,821.70 |
| 1-2 years | 90,708.80 | 95,821.70 |
| 2-3 years | 90,708.80 | 95,821.70 |
| 3-4 years | 90,708.80 | 95,821.70 |
4-5 years
| 4-5 years | 90,708.80 | 95,821.70 |
| Over 5 years | 97,686.40 | 204,701.80 |
| Total | 551,230.40 | 683,810.30 |
3) Reconciliation of undiscounted lease payments to net investment in the lease
| Item | Closing balance | Opening balance |
| Undiscounted lease payments | 551,230.40 | 683,810.30 |
Less: Unrealized finance income relating to lease payments
| Less: Unrealized finance income relating to lease payments | 14,135.20 | 17,021.38 |
| Net investment in the lease | 537,095.20 | 666,788.92 |
XVII. Notes to the Principal Items in the Financial Statements of the Parent Company
1. Accounts receivables
(1) Accounts receivables disclosed by categories
Unit: Yuan
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | Proportion | Amount | Provision proportions | Amount | Proportion | Amount | Provision proportions | |||
| Among which: | ||||||||||
| Accounts receivable with provision for bad debts by portfolio | 1,030,064,717.88 | 100.00% | 57,148,716.92 | 5.55% | 972,916,000.96 | 1,352,861,821.37 | 100.00% | 77,001,556.87 | 5.69% | 1,275,860,264.50 |
| Among which: | ||||||||||
| Total | 1,030,064,717.88 | 100.00% | 57,148,716.92 | 5.55% | 972,916,000.96 | 1,352,861,821.37 | 100.00% | 77,001,556.87 | 5.69% | 1,275,860,264.50 |
Provision made on an individual basis：
Unit: Yuan
| Name | Closing balance | |||
| Book balance | Provision for bad debts | Provision proportions | Provision reason | |
Provision made on a portfolio basis：
Unit: Yuan
| Name | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportions | |
| Age portfolio | 1,030,064,717.88 | 57,148,716.92 | 5.55% |
| Total | 1,030,064,717.88 | 57,148,716.92 | -- |
Illustration of this portfolio recognition basis:
Provision made on a portfolio basis：
Unit: Yuan
| Name | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportions | |
Illustration of this portfolio recognition basis:
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit loss, please
refer to the disclosure of other receivables to disclose the relevant information on the provision for bad debts:
□ Applicable √ Not Applicable
Disclosure as account receivable aging
Unit: Yuan
| Age | Book balance |
| Within 1 year(including 1 year) | 1,007,048,960.45 |
| 1-2 years | 10,919,739.81 |
| 2-3 years | 3,922,817.49 |
| Over 3 years | 8,173,200.13 |
| 3-4 years | 2,354,257.02 |
| 4-5 years | 3,210,977.60 |
| Over 5 years | 2,607,965.51 |
| Subtotal | 1,030,064,717.88 |
(2) Provision , recovered or reversed of the bad debt in current period
Provision for bad debts in current period:
Unit: Yuan
| Categories | Opening balance | Increase/Decrease Amount | Closing balance | |||
| Provision | Reversal | Write-off | Others | |||
| Within 1 year | 66,487,243.46 | -16,134,795.49 | 50,352,447.97 | |||
| 1-2 year(s) | 839,468.91 | 252,505.11 | 1,091,974.02 | |||
| 2-3 years | 471,887.20 | 312,676.31 | 784,563.51 | |||
| 3-4 years | 970,066.93 | -263,789.82 | 706,277.11 | |||
| 4-5years | 896,380.23 | 709,108.57 | 1,605,488.80 | |||
| Over 5years | 7,336,510.14 | -4,081,104.43 | 647,440.20 | 2,607,965.51 | ||
| Total | 77,001,556.87 | -19,205,399.75 | 0.00 | 647,440.20 | 0.00 | 57,148,716.92 |
The major provision for bad debts reversal in current period:
Unit: Yuan
| Company name | Reversal amount | Reversal Method |
(3) Accounts receivable actually written off in current period
Unit: Yuan
| Item | Written-off amount |
Including the major written off of the account receivables:
Unit: Yuan
| Company name | Account Receivable categorized by nature | Write-off amount | Write-off reason | Write-off procedure | Related party or not |
Instructions for Written off the account receivables:
(4) Details of the top 5 debtors with largest balances
Unit: Yuan
| Debtors | Closing balance of Account Receivable | %of the total closing balance | Closing balance of provision for bad debts |
(5) Transfer of accounts receivable and continued involvement in formed assets and liabilitiesOther remarks:
(6) Accounts receivable terminated from recognition due to the transfer of financial assetsOther remarks:
Closing balance of top 5 debtors totaled RMB 614,740,724.38, accounting for 59.68 % of the total closing balanceof accounts receivable, and provision for bad debts made thereon totaled RMB30,761,781.69.
2. Other receivables
Unit: Yuan
| Item | Closing balance | Opening balance |
| Other receivables | 1,458,883,819.83 | 883,363,518.44 |
| Total | 1,458,883,819.83 | 883,363,518.44 |
（1）Interest receivables
1）Interest receivables on categories
Unit: Yuan
| Item | Closing balance | Opening balance |
2) The major overdue interest receivables
Unit: Yuan
| Debtors | Closing balance | Overdue date | Overdue reason | Whether there is an impairment and its |
Other remarks:
3) Changes in provision for bad debts
□ Applicable √ Not Applicable
(2) Dividends receivable
1) Dividends receivable on category
Unit: Yuan
judgment basisItem(or the invested unit)
| Item(or the invested unit) | Closing balance | Opening balance |
2) Material dividends receivable aged over 1 year
Unit: Yuan
| Item(or the invested unit) | Closing balance | Age | Reason for not recovered | Whether there is an impairment and its judgment basis |
3) Changes in provision for bad debts
□ Applicable √ Not Applicable
Other remarks:
(3) Other receivables
1) Other receivables categorized by nature
Unit: Yuan
| Nature of receivables | Closing balance | Opening balance |
| Accounts receivable from related parties within the scope of the merger | 1,519,230,520.47 | 903,148,614.64 |
| Export tax rebates | 22,067,723.30 | 25,792,468.24 |
| Equity disposal payment receivable | 6,160,202.73 | |
| Security deposits | 5,173,827.26 | 13,833,823.47 |
| Temporary advance payment receivable | 1,175,931.64 | 966,599.78 |
| Employee petty cash | 188,025.00 | |
| Other | 396,240.11 | |
| Total | 1,553,808,205.40 | 944,325,771.24 |
2) Changes in provision for bad debts
Unit: Yuan
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Opening balance | 45,880,793.31 | 2,495,511.26 | 12,585,948.23 | 60,962,252.80 |
| Opening balance in the current period | —— | —— | —— | —— |
| Provision made in the current period | 30,368,134.51 | -2,277,997.01 | 5,871,995.27 | 33,962,132.77 |
| Closing balance | 76,248,927.82 | 217,514.25 | 18,457,943.50 | 94,924,385.57 |
The book balance movements of the material provision for bad debts in current period
□ Applicable √ Not Applicable
Disclosure as account receivable aging
Unit: Yuan
| Age | Book balance |
| Within 1 year(including 1 year) | 1,551,627,863.31 |
| 1-2 years | 1,268,167.51 |
| 2-3 years | 659,300.00 |
| Over 3 years | 252,874.58 |
| 3-4 years | 92,326.25 |
| 4-5 years | 125,000.00 |
| Over 5 years | 35,548.33 |
| Total | 1,553,808,205.40 |
3) Provision , recovered or reversed of the bad debt in current period
Provision for bad debts in current period:
Unit: Yuan
| Categories | Opening balance | Increase/Decrease Amount | Closing balance | |||
| Provision | Reversal | Write-off | Others | |||
| Portfoliogrouped with balances due from related parties withintheconsolidation scope | 58,798,022.81 | 34,122,072.66 | 92,920,095.47 | |||
| Portfoliogroupedwithages | ||||||
| Within 1 year | 2,010,479.16 | -390,612.02 | 1,619,867.14 | |||
| 1-2 year(s) | 70,202.50 | 56,614.25 | 126,816.75 | |||
| 2-3 years | 21,000.00 | 110,860.00 | 131,860.00 | |||
| 3-4 years | 37,500.00 | -9,802.12 | 27,697.88 | |||
| 4-5 years | 10,500.00 | 52,000.00 | 62,500.00 | |||
| Over 5years | 14,548.33 | 21,000.00 | 35,548.33 | |||
| Total | 60,962,252.80 | 33,962,132.77 | 94,924,385.57 |
Of which, major recovered or reversed amount in current period:
Unit: Yuan
| Debtors | Recovered or reversed amount | Way to recover |
4) Other receivable actually written off in current period
Unit: Yuan
| Item | Written-off amount |
Including major written off of other receivables
Unit: Yuan
| Debtors | Nature of receivables | Written off amount | Written off reason | Written off procedure | Related party or not |
Instructions for written off other Accounts receivable
5) Details of the top 5 debtors with largest balances
Unit: Yuan
| Debtors | Nature of receivables | Closing balance | Ages | Proportion to the total balance of other receivables (%) | Provision for bad debts |
| Great Star Tools USA,INC. | Balance due from related parties within theconsolidation scope | 616,542,888.20 | Within 1 year | 39.68% | 30,827,144.41 |
| Hong Kong GreatStar International Ltd | Balance due from related parties within theconsolidation | 317,883,356.35 | Within 1 year | 20.46% | 15,894,167.82 |
| scope | |||||
| Hangzhou United Machinery Co., Ltd. | Balance due from related parties within theconsolidation scope | 157,630,944.24 | Within 1 year | 10.14% | 7,881,547.21 |
| Haining GreatStar Intelligent Equipment Co., Ltd. | Balance due from related parties within theconsolidation scope | 130,000,000.00 | Within 1 year | 8.37% | 6,500,000.00 |
| Guangdong Shiwanke Electric Co., Ltd | Balance due from related parties within theconsolidation scope | 55,000,000.00 | Within 1 year | 3.54% | 2,750,000.00 |
| Total | -- | 1,277,057,188.79 | -- | 82.19% | 63,852,859.44 |
6) Other Accounts receivable related to government grants
Unit: Yuan
| Debtors | Government subsidy | Closing balance | Ages | Estimated collection date, amount, and basis |
7) Other accounts receivable derecognized due to financial assets transfer
8) Transfer of other accounts receivable and continued involvement in formed assets and liabilities
Other remarks:
3. Long-term equity investments
Unit: Yuan
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investmentsin subsidiaries | 4,157,167,492.92 | 4,157,167,492.92 | 2,949,758,632.92 | 2,949,758,632.92 | ||
| Investmentsin joint ventures and associates | 2,352,069,024.80 | 2,352,069,024.80 | 2,205,406,001.38 | 2,205,406,001.38 | ||
| Total | 6,509,236,517.72 | 6,509,236,517.72 | 5,155,164,634.30 | 5,155,164,634.30 |
(1) Investments in subsidiaries
Unit: Yuan
| Investees | Opening balance(Carrying amount) | Increase/ Decrease | Closing balance(Carrying amount) | Closing balance of provision for impairment | |||
| Increase | Decrease | Provision for impairment | Others | ||||
| Longyou Yiyang ForgingCo., Ltd. | 48,437,846.12 | 48,437,846.12 | |||||
| Hangzhou GreatStar Sheffield Tools Co., Ltd. | 3,300,000.00 | 106,500.00 | 3,406,500.00 | ||||
| Hangzhou United Electric Manufacture Co., Ltd. | 21,185,561.86 | 21,185,561.86 | |||||
| Hangzhou UnitedTools Co., Ltd. | 12,804,728.00 | 12,804,728.00 | |||||
| Hangzhou GreatStar Sheffield TradingCo.,Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Ningbo Fenghua Great Star Tools Co., Ltd. | 22,558,141.65 | 22,558,141.65 | |||||
| Zhejiang GuoxinTools Co., Ltd. | 25,750,000.00 | 25,750,000.00 | |||||
| Zhejiang Great Star Tools Co., Ltd. | 464,800,000.00 | 464,800,000.00 | |||||
| Hangzhou Juye Tools Co., Ltd. | 120,000,000.00 | 120,000,000.00 | |||||
| Hangzhou Great Star Tools Co., Ltd. | 63,772,246.86 | 63,772,246.86 | |||||
| Hong Kong | 227,854,794.6 | 669,838,900.0 | 897,693,694.66 | ||||
| Great Star International Co., Ltd. | 6 | 0 | |||||
| Changzhou HuadaKejie Opto-electro Instrument Co., Ltd. | 200,864,082.56 | 200,864,082.56 | |||||
| Hangzhou GreatStarIntelligent Technology Co., Ltd. | 22,000,000.00 | 22,000,000.00 | |||||
| Hangzhou Ole- Systems Co., Ltd. | 9,600,000.00 | 9,600,000.00 | |||||
| Great Star Tools USA, Inc | 627,095,000.00 | 328,565,000.00 | 955,660,000.00 | ||||
| Hangzhou GreatStar Craftsman Tools Co., Ltd. | 4,250,000.00 | 4,250,000.00 | |||||
| Hangzhou United Precision Tool Company | 10,030,288.26 | 10,030,288.26 | |||||
| Greatstar Europe AG | 732,567,215.00 | 732,567,215.00 | |||||
| Hangzhou United Machinery Co., Ltd. | 7,677,294.07 | 7,677,294.07 | |||||
| Longyou Hugong Forging Three Tools Co., Ltd. | 84,612,153.88 | 20,000,000.00 | 104,612,153.88 | ||||
| Haining Great Star Hardware Tools Co., Ltd. | 2,000,000.00 | 2,000,000.00 | |||||
| Suzhou Xindadi Hardware | 60,000,000.00 | 60,000,000.00 |
| Product Co., Ltd. | |||||||
| Geelong(Thailand) Co.,Ltd | 123,599,280.00 | 72,478,660.00 | 196,077,940.00 | ||||
| Guangdong Shiwanke Electrical Appliance Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| PREXISO Laser Measurement Tool (Hangzhou) Co., Ltd | 3,920,000.00 | 3,920,000.00 | |||||
| GreatStar Industrial Vietnam Co.,Ltd | 110,499,800.00 | 110,499,800.00 | |||||
| Hangzhou GreatStar Power Tool Co., LTD | 2,000,000.00 | 2,000,000.00 | |||||
| Total | 2,949,758,632.92 | 1,207,408,860.00 | 4,157,167,492.92 |
(2) Investments in joint ventures and associates
Unit: Yuan
| Investees | Opening balance(Carrying amount) | 本期增减变动 | Closing balance(Carrying amount) | Closing balance of provision for impairment | |||||||
| Increase | Decrease | Investments increased | Investments decreased | Investment income recognize dunder equity method | Adjustment in other comprehensive income | Changes inother equity | Cash dividend/ Profit declared for distribution | ||||
| I. Joint ventures | |||||||||||
| II. Associates | |||||||||||
| Hangzhou Zhongce Haichao Enterprise | 1,169,932,406.31 | 154,907,277.48 | -53,965,729.03 | -2,008,108.15 | 1,268,865,846.61 | ||||||
| Managem ent Co., Ltd. | |||||||||||
| Zhejiang Hangcha Holdings Co., Ltd. | 630,616,723.91 | 97,714,220.58 | -5,065,342.30 | 9,325,793.43 | 732,591,395.62 | ||||||
| Hangzhou Weiming Investment Management Co., Ltd. | 58,037,632.85 | 59,110,202.73 | 1,072,569.88 | 0.00 | |||||||
| Zhejiang Guozi Robotics Co., Ltd. | 89,544,523.80 | -15,436,526.53 | 9,886.20 | 1,687,973.07 | 75,805,856.54 | ||||||
| Ningbo Donghai Bank Co., Ltd. | 181,319,746.49 | 8,011,052.94 | 1,230,525.43 | 190,561,324.86 | |||||||
| Hangzhou Weina Technology Co., Ltd. | 75,954,968.02 | 8,052,874.62 | 236,758.53 | 84,244,601.17 | |||||||
| Subtotal | 2,205,406,001.38 | 0.00 | 59,110,202.73 | 254,321,468.97 | -57,553,901.17 | 9,005,658.35 | 0.00 | 0.00 | 0.00 | 2,352,069,024.80 | |
| Total | 2,205,406,001.38 | 0.00 | 59,110,202.73 | 254,321,468.97 | -57,553,901.17 | 9,005,658.35 | 0.00 | 0.00 | 0.00 | 2,352,069,024.80 |
(3) Other instructions
4. Operating revenue and cost
Unit: Yuan
| Item | Current period amount | Previous period amount | ||
| Revenue | Cost | Revenue | Cost | |
| Main operations | 5,212,156,918.90 | 4,187,985,128.21 | 5,361,055,983.42 | 4,061,291,433.13 |
| Other operations | 9,471,135.66 | 3,601,242.42 | 4,533,964.30 | 2,889,063.37 |
| Total | 5,221,628,054.56 | 4,191,586,370.63 | 5,365,589,947.72 | 4,064,180,496.50 |
Relevant information:
Unit: Yuan
| Contract classification | Division 1 | Division 2 | Total | |
| Type of merchandise | ||||
| Including: | ||||
| By operating area | ||||
| Including: | ||||
| Market or customer type | ||||
| Including: | ||||
| Contract type | ||||
| Including: | ||||
| By the time of commodity transfer | ||||
| Including: | ||||
| By contract term | ||||
| Including: | ||||
| By sales channel | ||||
| Including: | ||||
| Total |
Information relating to performance obligations:
Performance obligations of sales of hand tools and power tools, laser measurement, storage, PPE and otherproducts are generally fulfilled within one year. The Company collects advances or provides term of credit basedon different customers. The Company acts as the main responsible person for direct sales. The Company obtainsthe unconditional right to collect payments when the following conditions are all met: 1) for domestic sales: a. theCompany delivers the product to the customer in accordance with the contract; andb. the customer has acceptedthe product; 2) for overseas sales: a. the Company has declared the product in accordance with the contract;b. theCompany has obtained the bill of lading or, the Company has shipped the product to the designated destination
and the goods are delivered to the customer; and c. the control of the goods is transferred to the customer.
Information relating to the transaction price allocated to the remaining performance obligation:
At the end of this report period, the amount of income corresponding to the performance obligations that have been signed but not yetfulfilled or not fulfilled is RMB 46,268,755.74 , of which RMB 46,268,755.74 is expected to be recognized in 2022, RMB XXX isexpected to be recognized in XX year, and RMBXXX is expected to be recognized in XX year.Other remarks:
5. Investment income
Unit: Yuan
| Item | Current period amount | Previous period amount |
| Income from long-term equity investments accounted for under the cost method | 82,000,000.00 | |
| Income from long-term equity investments accounted for under the equity method | 254,321,468.97 | 260,562,082.75 |
| Investment income from disposal of long-term equity investments | 266,783.83 | |
| Investment income from trading financial assets during the holding period | 3,647,177.70 | |
| Investment income from disposal of financial assets held for trading | 78,486,454.00 | 10,007,728.68 |
| Loss on discount on receivables financing | -4,570,835.23 | |
| Total | 328,237,087.74 | 356,483,772.96 |
6. Other
XVIII. Supplementary Information
1. Current non-recurring profit and loss statement
√ Applicable □ Not applicable
Unit: Yuan
| Item | Amount | Note |
| Gains or losses on disposal of non-current assets | -4,813,678.28 | |
| Government subsidies recognized in current profit or loss (except those closely related to the company's normal business operations, which are in accordance with national policies and are continuously enjoyed in | 43,080,948.70 |
| accordance with certain standards in fixed or quantitative amounts) | ||
| The cost of investments in subsidiaries, associates and joint ventures acquired by an enterprise is less than the gain arising from the fair value of the identifiable net assets of the investee to which the enterprise is entitled at the time the investment is acquired | 82,984,773.90 | |
| Gains or losses from entrusting others to invest or manage assets | 1,808,120.10 | |
| Gains or losses from changes in the fair value of financial assets and liabilities held for trading, and investment income from disposal of financial assets and liabilities for trading and available-for-sale financial assets, except for effective hedging activities related to the Company's normal business operations | 95,687,869.64 | |
| Non-operating income and expenses other than those mentioned above | -127,210.71 | |
| Other profit or loss items that meet the definition of non-recurring profit or loss | 502,892.56 | |
| Less: Income tax affected amount | 17,156,521.94 | |
| Amount of minority interest affected | 5,521,763.45 | |
| Total | 196,445,430.52 | -- |
Details of other profit and loss items that meet the definition of non-recurring profit or loss:
□ Applicable √ Not applicable
There are no other specific cases of gain or loss items that meet the definition of non-recurring gain or loss for the Company.Information on the definition of non-recurring gain or loss items listed in "Explanatory Announcement No. 1 on InformationDisclosure by Companies Issuing Public Securities - Non-recurring Profit or Loss" as recurring profit or loss items
□ Applicable √ Not applicable
2. Return on equity and earnings per share
| Profit for the reporting period | Return on equity weighted average(ROEWA) | Earnings per share | |
| Basic earnings per share (RMB / share) | Diluted earnings per share (yuan / share) | ||
| Net profit attributable to ordinary shareholders of the Company | 12.51% | 1.13 | 1.13 |
| Net profit attributable to ordinary shareholders of the Company after | 10.58% | 0.95 | 0.95 |
3. Differences in accounting data under domestic and foreign accounting standards
(1) Differences in net profit and net assets in financial reports disclosed simultaneously under IAS andunder PRC GAAP
□ Applicable √ Not applicable
(2) Differences in net profit and net assets between financial reports disclosed in accordance with foreignaccounting standards and those disclosed in accordance with PRC GAAP at the same time
□ Applicable √ Not applicable
(3) Explanation of the reasons for differences in accounting data under domestic and foreign accountingstandards, and the name of the foreign institution should be indicated if the data that has been audited bythe foreign auditor has been reconciled for differences
4. Miscellaneous
2. Calculation process of the return on equity weighted average(ROEWA)
deduction of non-recurring gainsand lossesItem
| Item | Serial No. | Current Amount | |
| Net income attributable to ordinary shareholders of the Company | A | 1,270,003,396.40 | |
| Non-recurring profit or loss | B | 196,445,430.52 | |
| Net income attributable to ordinary shareholders of the Company after deducting non-recurring gains and losses | C=A-B | 1,073,557,965.88 | |
| Net assets attributable to ordinary shareholders of the Company at the beginning of the period | D | 8,826,190,578.28 | |
| Net assets attributable to ordinary shareholders of the Company arising from the issuance of new shares or debt-to-equity swaps | E | 801,333,703.24 | |
| Cumulative number of months from the month following the addition of net assets to the end of the reporting period | F | 10 | |
| Decrease in net assets attributable to ordinary shareholders of the Company, such as cash dividends | G1 | ||
| Cumulative number of months from the month following the decrease in net assets to the end of the reporting period | H1 | ||
| Decrease in net assets attributable to shareholders of the Company's common stock due to share repurchases | G2 | 186,441,914.48 | |
| Cumulative number of months from the month following the decrease in net assets to the end of the reporting period | H2 | 3, 4, 5 | |
| Other | Translation differences on foreign currency statements | I1 | -138,225,095.06 |
| Accumulated number of months from the month | J1 | 6 | |
| following the increase or decrease in net assets to the end of the reporting period | ||
| Share in other comprehensive income of Hangzhou Zhongce Haichao Enterprise Management Co.,Ltd | I2 | -53,965,729.03 |
| Accumulated number of months from the month following the increase or decrease in net assets to the end of the reporting period | J2 | 6 |
| Share in other comprehensive income of Ningbo Donghai Bank Co.,Ltd | I3 | 1,230,525.43 |
| Accumulated number of months from the month following the increase or decrease in net assets to the end of the reporting period | J3 | 6 |
| Share in other comprehensive income of Zhejiang Hangcha Holding Co.,Ltd | I4 | -5,065,342.30 |
| Accumulated number of months from the month following the increase or decrease in net assets to the end of the reporting period | J4 | 6 |
| Share in other comprehensive income of Hangzhou Nano Sic Technology Co.,Ltd | I5 | 236,758.53 |
| Accumulated number of months from the month following the increase or decrease in net assets to the end of the reporting period | J5 | 6 |
| Share in other comprehensive income of Zhejiang Guozi Robotic Technology Co., Ltd | I6 | 9,886.20 |
| Accumulated number of months from the month following the increase or decrease in net assets to the end of the reporting period | J6 | 6 |
| Share of changes in owner's equity in Zhejiang Guozhi Robotics Co., Ltd. accounted for under the equity method, other than net profit or loss, other comprehensive income and earnings distribution | I7 | 1,687,973.07 |
| Accumulated number of months from the month following the increase or decrease in net assets to the end of the reporting period | J7 | 6 |
| Share of changes in owner's equity inZhejiang Hangcha Holding Co.,Ltd accounted for under the equity method, other than net profit or loss, other comprehensive income and earnings distribution | I8 | 9,325,793.43 |
| Accumulated number of months from the month following the increase or decrease in net assets to the end of the reporting period | J8 | 9 |
| Share of changes in owner's equity inHangzhou Zhongce Haichao Enterprise Management Co.,Ltd | I9 | -2,008,108.15 |
accounted for under the equity method, other than netprofit or loss, other comprehensive income and earningsdistributionAccumulated number of months from the monthfollowing the increase or decrease in net assets to theend of the reporting period
| Accumulated number of months from the month following the increase or decrease in net assets to the end of the reporting period | J9 | 6 |
| Adjustment to capital surplus for consideration paid for the acquisition of minority interest in Longyou Yiyang Forging Co.,Ltd | I10 | 2,097,357.38 |
| Accumulated number of months from the month following the increase or decrease in net assets to the end of the reporting period | J10 | 4 |
Adjustment to capital surplus for consideration paid forthe acquisition of minority interest in Longyou HugongForging No.3 Tools Co., LTD
| Adjustment to capital surplus for consideration paid for the acquisition of minority interest in Longyou Hugong Forging No.3 Tools Co., LTD | I11 | 2,417,573.87 |
| Accumulated number of months from the month following the increase or decrease in net assets to the end of the reporting period | J11 | 4 |
| Adjustment to capital surplus for consideration paid for the acquisition of minority interest in Hangzhou GreatStarSheffield Tool Co., Ltd | I12 | -32,913.57 |
Accumulated number of months from the monthfollowing the increase or decrease in net assets to theend of the reporting period
| Accumulated number of months from the month following the increase or decrease in net assets to the end of the reporting period | J12 | 7 |
| Adjustment to capital surplus for consideration paid for the acquisition of minority interest in PREXISO Laser Measurement Tool (Hangzhou) Co., Ltd | I13 | -1,739,850.54 |
| Accumulated number of months from the month following the increase or decrease in net assets to the end of the reporting period | J13 | 6 |
| Remeasurement of changes in defined benefit plans | I14 | 71,842,154.00 |
Accumulated number of months from the monthfollowing the increase or decrease in net assets to theend of the reporting period
| Accumulated number of months from the month following the increase or decrease in net assets to the end of the reporting period | J14 | 6 | |
| Number of months in the reporting period | K | 12 | |
| Weighted average net assets | L= D+A/2+ E×F/K-G×H/K＋I×J/K | 9,998,271,289.13 | |
| Weighted average return on net assets | M=A/L | 12.70% | |
| Weighted average return on net assets after deducting non-recurring gains and losses | N=C/L | 10.74% | |
3. Procedure for calculating basic and diluted earnings per share
(1) The calculation process of basic earnings per share
| Item | No. | Current Amount |
| Net income attributable to ordinary shareholders of the Company | A | 1,270,003,396.40 |
| Non-recurring profit or loss | B | 196,445,430.52 |
| Net profit attributable to ordinary shareholders of the Company after deducting non-recurring gains and losses | C=A-B | 1,073,557,965.88 |
| Total number of shares at the beginning of the period [Note] | D | 1,064,448,049 |
| Increase in shares due to transfer of capital from provident fund or distribution of stock dividends, etc. | E | |
| Increase in number of shares due to issuance of new shares or conversion of debt to shares | F | 68,190,792 |
| Cumulative number of months from the month following the increase in shares to the end of the reporting period | G | 10 |
| Number of shares increased by treasury shares at the beginning of the period for conversion of debts, etc. | H | 10,799,651 |
| Cumulative number of months from the month following the increase in shares to the end of the reporting period | I | 10 |
| Decrease in shares due to buyback, etc. | J | 6,015,310 |
| Cumulative number of months from the month following share reduction to the end of the reporting period | K | 3, 4, 5 |
| Number of share reduction in the reporting period | L | |
| Number of months in the reporting period | M | 12 |
| Weighted average number of common shares outstanding | N=D+E+F×G/M+H×I/M-J×K/M-L | 1,127,818,705.67 |
| Basic earnings per share | O=A/N | 1.13 |
| Basic earnings per share, net of non-recurring gains and losses | P=C/N | 0.95 |
[Note] Total number of shares at the beginning of the period excluding the number of repurchased shares
(2) The procedure for calculating diluted earnings per share is the same as that for basic earnings per share.