广东东方精工科技股份有限公司
英文年报披露说明近年来中国资本市场持续加大对外开放力度，鼓励境外投资者更多参与，东方精工科技股份有限公司（以下简称“公司”）为更好地服务越来越多的境外投资者，让境外投资者更便捷地获取公司经营与财务等方面信息，同时也更充分地向境外投资者传递公司的投资价值，提升公司国际化水平，公司发布披露《2019年年度报告》的英文版本。本次英文版年报翻译中，涉及众多瓦楞包装机械行业和财会方面的专业术语。虽然公司已尽力确保原文内容得到准确的转译，但仍可能会存在不恰当之处。公司在此声明：如果您在阅读《2019年年度报告》的中文、英文文本的过程中，在对文本的理解上发生歧义时，以中文文本为准。
In recent years, China's capital market continues to open to the outside world and encouragedforeign investors to participate in the financial market of China. Guangdong Dongfang PrecisionScience & Technology Co., Ltd. (hereinafter referred to as ”the company”) discloses its 2019Annual Report in English for the first time, that we believe can enables for foreign investors toobtain information about the company's operation and finance more conveniently, and fully conveythe investment value of the company to them, and at the same time help continuously improving thecompany's international level.As the annual report involves many professional terms translation of Corrugated packagingmachinery industry and financial accounting, the company has made great efforts to ensure theaccurate translation of the original content, but there may still be some inadequacies.The company hereby declares that in case of any ambiguity in your understanding of the Chineseversion and English version of the 2019 annual report, the Chinese version shall prevail.
Guangdong Dongfang Precision Science&Technology Co.,Ltd.
2019 Annual Report
April 2020
Section 1 Important Notes, Table of contents and Interpretation
The company's board of directors, board of supervisors, directors, supervisors,and senior management ensure that the contents of the annual report are true,accurate, and complete, that there are no false records, misleading statements,or major omissions, and if there are any, we shall bear individual and joint legalresponsibilities.Tang Zhuolin, person in charge of the company, Qiu Yezhi, chief in charge ofaccounting work, and Qiu Yezhi, head of accounting institution (accountingofficer) hereby confirm that the financial report in the annual report is true,accurate and complete.Apart from the following director, other directors attended the board meeting toreview this annual report in person.
| The name of director who did not attend in person | The post of director who did not attend in person | Reasons for not attending the meeting in person | Consignee’s name |
| Peng Xiaowei | Independent Director | To take care of his own work | Mai Zhirong |
The forward-looking statements such as the prediction of future operatingperformance involved in this annual report are all planned matters of thecompany and do not constitute a substantial commitment of the company toinvestors. There are certain uncertainties. Investors are advised to pay attention
to investment risks.The relevant risks that may exist in the company's operation and developmentare described in detail in “4.The risks that the company may face in thedevelopment process” in “IX. Prospects for the company's future development”in Section 4 “Discussion and Analysis of Business Situation” of this report.Investors are advised to read this part.The company plans not to distribute cash dividends, neither give away bonusshares, nor capitalize from public reserve.
Table of Contents
Section 1 Important Notes, Table of contents and Interpretation ...... 1
Section 2 Company Profile and Main Financial Indicators ...... 7
Section 3 Company Business Overview ...... 14
Section 4 Discussion and Analysis of Business Situation ...... 36
Section 5 Important Matters ...... 101
Section 6 Changes in Shares and Shareholders ...... 150
Section 7 Preference Shares ...... 164
Section 8 Relevant Information on Convertible Corporate Bonds ...... 165
Section 9 Directors, Supervisors, Senior Management and Employees ...... 166
Section 10 Corporate Governance ...... 179
Section 11 Corporate Bonds ...... 190
Section 12 Financial Report ...... 191
Section 13 catalogue of documents for reference. ....................................................................... 448
Interpretation
| Interpretation Item | Refers to | Interpretation |
| Company, Dongfang Precision, the company | Refers to | Guangdong Dongfang Precision Science&Technology Co.,Ltd. |
| Dongfang Precision（China） | Refers to | Guangdong Dongfang Precision Science&Technology Co.,Ltd. Corrugated Box Printing Machine Division |
| Fosber Group | Refers to | Fosber S.p.A. |
| Fosber Asia | Refers to | Guangdong Fosper Intelligent Equipment Co., Ltd. |
| Fosber US | Refers to | Fosber America, Inc. |
| Fosber Tianjin | Refers to | Fosberg (Machinery) Tianjin Co., Ltd. |
| Tiruna Group | Refers to | Tiruna Group Industrial, S.L. |
| Tiruna S.L.U | Refers to | Tiruna S.L.U. |
| Tiruna US | Refers to | Tiruna America inc. |
| Dongfang Precision（Europe）/Italy EDF | Refers to | EDF Europe s.r.l. |
| Dongfang Precision（Netherland） | Refers to | Dong Fang Precision (Netherland) Cooperatief U.A. |
| Dongfang Precision（HK） | Refers to | Dongfang Precision (Hong Kong) Co., Ltd. |
| Parsun Power | Refers to | Suzhou Parsun Power Machine Co.,Ltd. |
| Shunyi Investment | Refers to | Suzhou Shunyi Investment Co., Ltd. |
| Yinglian Digital | Refers to | Foshan Yinglian Digital Printing Equipment Co., Ltd. |
| Jiateng Robot | Refers to | Guangdong Jiateng Robot Automation Co., Ltd. |
| Pride, Beijing Pride | Refers to | Beijing Pride New Energy Battery Technology Co., Ltd. |
| Changzhou Pride | Refers to | Changzhou Pride New Energy Battery Technology Co., Ltd. |
| Pulead | Refers to | Pulead Technology Industry Co.,Ltd. |
| BAIC | Refers to | Beijing Automotive Group Industry Investment Co.,Ltd. |
| CATL | Refers to | Contemporary Amperex Technology Co. Limited |
| Foton Motor | Refers to | Beiqi Foton Motor Co., Ltd. |
| Qinghai Puren | Refers to | Qinghai Puren Intelligent Technology R & D Center (Limited Partnership) |
| BJEV | Refers to | Beijing Electric Vehicle Co., Ltd. |
| Corrugated box | Refers to | Corrugated cardboard is made into corrugated boxes by printing, grooving, die-cutting and sticking boxes; corrugated boxes are the most widely used packaging products. |
| Corrugated box printing complete production line | Refers to | A complete set of corrugated paper box printing machinery equipment that integrates all or part of the functions of leading edge paper feeding, printing, grooving, die cutting, and forming. It has the characteristics of highly integrated functions, high automation level, and intensive technology. It can save capital investment, manual investment, reduce labor intensity and increase production efficiency of carton production enterprises. This type of product has strong requirements on equipment manufacturers' design level, scientific research and innovation capabilities, assembly technology, and spare parts finishing. |
| Corrugated board production line | Refers to | The roll base paper goes through a production line consisting of corrugating, gluing, bonding, paper-dividing and lining, and cutting into specification paperboard. It is mainly composed of two relatively independent process sections: wet-end equipment and dry-end equipment. |
| Outboard motor | Refers to | Refers to the propulsion engine installed on the outside of the hull (side of the ship), usually suspended on the outside of the transom, also known as the outboard engine. |
| Power Battery | Refers to | A chemical power source that provides electrical energy for devices such as power tools, electric bicycles, and electric cars. Commonly used power batteries include lead-acid batteries, nickel-metal hydride batteries, and lithium-ion batteries. |
| PACK | Refers to | The process of connecting a single battery cell in series or parallel and connecting it to a BMS makes the single battery cell an integrated product with functions such as intelligent charge and discharge control. As the key link of the power battery system industry chain, PACK's core difficulty lies in customized development technology. High-quality PACK plays an important role in the safety, performance debugging, energy density, reliability, environmental adaptability of the power battery system and the performance of the power battery system and the vehicle. |
| CSRC | Refers to | China Securities Regulatory Commission |
| Shenzhen Exchange, Exchange | Refers to | Shenzhen Stock Exchange |
| Yuan, 10,000 yuan, 100 million yuan | Refers to | RMB Yuan, RMB 10,000 yuan, RMB 100 million yuan |
| Reporting period, this reporting period | Refers to | January 1, 2019 to December 31, 2019 |
Section 2 Company Profile and Main Financial Indicators
I. Company Information
| Stock abbreviation | Dongfang Precision | Stock code | 002611 |
| Stock exchange where the stock is listed | Shenzhen Stock Exchange | ||
| The Chinese name of the company | 广东东方精工科技股份有限公司 | ||
| The Chinese abbreviation name of the company | 东方精工 | ||
| The company's foreign name (if any) | GUANGDONG DONGFANG PRECISION SCIENCE & TECHNOLOGY CO., LTD | ||
| Abbreviation of the company's foreign name (if any) | DONGFANG PRECISION | ||
| The company's legal representative | Tang Zhuolin | ||
| Registered address | No. 2 Qiangshi Road, Shishan Town, Nanhai District, Foshan City, Guangdong Province (office building, plant A, plant B) | ||
| Registered address postal code | 528225 | ||
| Office address | 25th Floor, Hisense South Building, 1777 Chuangye Road, Nanshan District, Shenzhen, Guangdong | ||
| Office address postal code | 518000 | ||
| Company website | http://www.df-global.cn/ | ||
| ir@vmtdf.com | |||
II. Contact person and contact information
| Secretary of the Board | Securities Affairs Representative | |
| Name | Zhou Wenhui | Zhu Hongyu |
| Contact address | 25th Floor, Hisense South Building, 1777 Chuangye Road, Nanshan District, Shenzhen, Guangdong | 25th Floor, Hisense South Building, 1777 Chuangye Road, Nanshan District, Shenzhen, Guangdong |
| Phone | 0755-36889712 | 0755-36889712 |
| Fax | 0755-36889822 | 0755-36889822 |
| ir@vmtdf.com | ir@vmtdf.com |
III. Information Disclosure and Preparation Location
| Name of information disclosure media selected by the company | "China Securities News", "Securities Times" |
| URL of website designated by China Securities Regulatory Commission to publish annual report | http://www.cninfo.com.cn |
| Where to prepare the company's annual report | Corporate Securities Department |
IV. Registration Changes
| Organization Code | 914406002318313119 |
| Changes in the main business of the company since its listing (if any) | No change |
| Changes of previous controlling shareholders (if any) | No change |
V. Other Relevant InformationAccounting firm hired by the company
| Name of accounting firm | BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP. |
| Office Address of accounting firm | 16th Floor, Building A, CIC International Business Center, 1061 Xiangmei Road, Futian District, Shenzhen (Headquarters Address: No. 61 Nanjing East Road, Shanghai) |
| Name of the signed accountant | Chen Yanbai, Song Baojun |
Sponsors hired by the company to perform continuous supervision responsibilities during the reporting period
□ Applicable √ Not applicable
Financial consultants employed by the company to perform continuous supervision duties during the reporting period
√ Applicable □ Not applicable
| Name of Financial Advisor | Office Address of Financial Advisor | Name of person-in-charge of Financial Advisor | Continuous supervision period |
| CITIC Construction Investment Co., Ltd. | No. 188 Chaoyangmen Nei Street, Dongcheng District, Beijing | Zhu Lin, Gu Zhongjie | December 25, 2019 to December 31, 2020 |
VI. Main Accounting Data and Financial Indicators
Does the company need to retroactively adjust or restate previous year's accounting data
□ YES √ NO
| 2019 | 2018 | Increase or decrease by...than the previous year | 2017 | |
| Operating income (yuan) | 9,973,503,602.19 | 6,621,349,618.40 | 50.63% | 4,684,845,398.24 |
| Net profit attributable to shareholders of listed companies (yuan) | 1,838,018,805.50 | -3,875,995,219.91 | 147.42% | 490,498,337.12 |
| Net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses (yuan) | 438,715,870.86 | -3,905,407,016.45 | 111.23% | 353,115,982.47 |
| Net cash flow from operating activities (yuan) | 281,297,787.01 | 721,724,801.12 | -61.02% | -95,224,885.04 |
| Basic earnings per share (yuan / share) | 1.01 | -2.11 | 147.87% | 0.31 |
| Diluted earnings per share (yuan / share) | 1.01 | -2.11 | 147.87% | 0.31 |
| Weighted average return on net assets | 36.87% | -67.71% | 104.59% | 8.85% |
| End of 2019 | End of 2018 | Increase or decrease by...than the previous year | End of 2017 | |
| Total assets (yuan) | 6,273,516,157.31 | 8,986,973,675.89 | -30.19% | 12,437,799,208.64 |
| Net assets attributable to shareholders of listed companies (yuan) | 4,337,064,607.87 | 4,026,565,236.20 | 7.71% | 7,670,809,269.32 |
VII. Differences in accounting data under domestic and foreign accounting standards
1.The difference between net profit and net assets in financial reports disclosed in accordance withinternational accounting standards and in accordance with Chinese accounting standards at the same time
□ Applicable √ Not applicable
During the reporting period, there was no discrepancy between the net profit and net assets in the financial reports disclosed inaccordance with international accounting standards and in accordance with Chinese accounting standards.
2.The difference between net profit and net assets in financial reports disclosed in accordance with overseasaccounting standards and in accordance with Chinese accounting standards at the same time
□ Applicable √ Not applicable
There was no discrepancy between the net profit and net assets in the financial report disclosed in accordance with overseasaccounting standards and in accordance with Chinese accounting standards during the reporting period.
VIII. Major financial indicators by quarter
Unit: yuan
| Q1 | Q2 | Q3 | Q4 | |
| Operating income | 1,199,609,998.96 | 3,191,739,295.93 | 3,360,816,595.53 | 2,221,337,711.77 |
| Net profit attributable to shareholders of listed companies | 26,225,836.51 | 156,165,299.88 | 212,791,166.02 | 1,442,836,503.09 |
| Net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses | 23,381,604.22 | 142,773,952.59 | 198,631,530.02 | 73,928,784.03 |
| Net cash flow from operating activities | 419,627,201.97 | 999,613,550.00 | 101,010,721.08 | -1,238,953,686.04 |
Whether the above financial indicators or their totals are significantly different from the financial indicators disclosed in thecompany’s quarterly and semi-annual reports
□ Yes √ No
IX. Non-recurring items and amounts
√ Applicable □ Not applicable
Unit: yuan
| Item | 2019 amount | 2018 amount | 2017 amount | Explanation |
| Gains and losses from disposal of non-current assets (including write-offs of asset impairment provisions) | -95,745,648.97 | 1,792,860.48 | 95,244,311.61 | Mainly to deal with the profit and loss of 100% equity of Pride |
| Government subsidies included in the current profit and loss (closely related to the business of the enterprise, except for government subsidies that are fixed or quantified according to the national unified standard) | 22,854,061.39 | 9,052,705.37 | 25,140,802.38 | For details, please refer to notes VII.46 and VII.52 of the financial report |
| In addition to the effective hedging business related to the company's normal business operations, holding transactional financial assets, derivative financial assets, transactional financial liabilities, fair value changes in derivative financial liabilities, and disposal of transactional financial assets and derivative financial investment income from assets, trading financial liabilities, | 1,473,114,508.83 | 24,082,095.44 | 13,705,471.69 | Mainly for the performance compensation of Pride's original shareholders and bank wealth management income |
| derivative financial liabilities and other debt investments | ||||
| Other non-operating income and expenses other than the above | 9,007,522.57 | 890,902.50 | 31,772,720.83 | |
| Deduct: the amount of income tax impact | 9,881,032.32 | 6,371,800.11 | 28,467,463.96 | |
| Minority shareholders' equity impact (after tax) | 46,476.86 | 34,967.14 | 13,487.90 | |
| In total | 1,399,302,934.64 | 29,411,796.54 | 137,382,354.65 | -- |
For the company's non-recurring gains and losses items defined by the "Announcement No. 1 of Information Disclosure byCompanies Offering Securities to the Public — Non-recurring Gains and Losses" and the non-recurring gains and losses itemsdefined by "Announcement No. 1 of Information Disclosure by Companies Offering Securities to the Public —Non-recurring Gainsand Losses" as recurring gains and losses, the reasons should be explained
□ Applicable √ Not applicable
During the reporting period of the company, there were no situations in which the non-recurring gains and losses items listed inaccordance with the definition of "Announcement No. 1 of Information Disclosure by Companies Offering Securities to the Public —Non-recurring Gains and Losses" were defined and listed as recurring gains and losses.
Section 3 Company Business Overview
I. The main business of the company during the reporting periodThe current global economic system is facing profound changes and reconstruction. The newgeneration of information technology is showing explosive growth. Emerging technologiesrepresented by cloud computing, big data, artificial intelligence and 5G communication technologyare booming. Manufacturing and the new generation of information technology witnesses deepintegration, and a new round of industrial revolution is being conceived.Intelligent manufacturing based on the deep integration of new generation informationcommunication technology and advanced manufacturing technology runs through the design,production, management and service of manufacturing activities. Its technology includesautomation, informatization, Internet and intelligence.The "Made in China 2025" issued by the State Council indicates that it will focus on implementingthe strategy of making China a manufacturing power, and intelligent manufacturing is the toppriority. Smart manufacturing-related industries will not only become key industries supported anddeveloped by China, but also be the backbone of China's economic transformation and upgrading,innovative development, and the realization of building China a "manufacturing power". With itssuperior geographic location, strong national support and strong manufacturing base, GuangdongProvince has great advantages in the transformation and upgrading of manufacturing industries andthe implementation of intelligent manufacturing.Dongfang Precision takes "smart manufacturing" as its strategic vision and business core, and is oneof the earliest companies engaged in R&D, design and production of intelligent corrugated cartonpackaging equipment in China. Since its listing in 2011, the company has used the capital market toexpand the industry chain of corrugated box packaging equipment. At present, it has become aleading domestic and international leading supplier of intelligent corrugated box packagingequipment. In 2019, the company carried out various business activities around the core smartcorrugated box packaging equipment business and the annual business plan. The layout and
operation of the main business sectors are as follows:
1. Smart packaging equipment business
During the reporting period, the company's business of intelligent packaging equipment focused onthe design, R & D, production, sales and service of "intelligent corrugated box packagingautomation equipment and production lines". It has business entities focusing on the field of smartpackaging equipment, such as Dongfang Precision (China), Dongfang Precision (Europe), FosberGroup, and Fosber Asia.
1.1 Main products and uses
As a typical midstream industry, the corrugated cardboard packaging industry uses corrugatedcardboard base paper produced by upstream paper companies as raw materials to producecorrugated cardboard finished products, which are widely used in household appliances, electronicproducts, IT, food and beverage, books, daily chemical, textile and other downstream consumerindustries and logistics express companies. Compared with metal, plastic, and glass packagingproducts, corrugated cardboard boxes are degradable, easy to recycle and reuse, and are recognizedas "green packaging products".Dongfang Precision is the earliest company engaged in the R&D, design and production ofintelligent corrugated box packaging equipment in China. It provides high-tech content, highperformance and high-quality cardboard production and printing and packaging equipment.
At present, the company has expanded from the corrugated box printing equipment in the initialstage of listing to three major product lines that can provide customers with high-end corrugatedcardboard production lines, corrugated cardboard printing slotting die-cutting machines, andcorrugated cardboard printing slotted sticking box linkage lines and the solution of the wholeindustrial chain equipment including pre-press and post-press intelligent automatic packagingequipment.
Schematic diagram of a corrugated carton packaging intelligent model factory(1-10 are the company's existing products, 11 is the company's strategic expansion link)
The main products of the company's intelligent packaging equipment business include: corrugatedcardboard production line, corrugated box printing complete production line, pre-press andpost-press intelligent automation equipment (including multi-color complete printing slottingdie-cutting machine, pre-feeder, waste conveying equipment, intelligent stack Stacking equipment,gluing equipment, etc.), as well as automated logistics systems.
1.1.1 Corrugated board production line
The company's complete production line for corrugated cardboard includes raw paper holders andsplicing machines, single-sided machines, glue coating machines, double-sided machines, rotary
cutters, slitting and crimping machines, cross-cutting machines, stacking machines, production lineintelligent management systems, and noise prevention units. The complete production line ofcorrugated cardboard is a large-scale automation equipment, and the average unit price of the entireproduction line ranges from 30 million to 60 million yuan (3.5 million to 7.5 million euros).The company's corrugated board production line is positioned at the high end, and it is superior todomestic counterparts in terms of speed, width, energy saving, safety, and operation automation,and has reached the world's leading level. The intelligent design and smooth linear process includedin the company's products can effectively reduce labor costs for downstream corrugated boardmanufacturers, greatly improve production efficiency, reduce management pressure, and improvebusiness efficiency.The company's corrugated board production line business is facing the global market. The companydevelops, produces and sells corresponding products for the performance requirements of differentcustomers in the Asian, European and American markets.
Schematic diagram of the company's corrugated board production line
1.1.2 Complete production line for corrugated box printing
The company's corrugated box printing complete production line products include corrugated boxprinting linkage line, printing stand-alone products, and intelligent automatic equipment before andafter printing.Corrugated box printing linkage line is divided into sticking box linkage line and fully automaticprinting linkage line according to the linkage of pre-press and post-press automation equipment.The average selling price of the company's corrugated box printing complete production line is 4million to 15 million yuan. At present, the company develops and produces two series of productionand sales for different customers in Asia, Europe, and the United States. Corrugated carton printingcomplete production line equipment, including: Asia-Pacific Star Series (APSTAR), mainly
exported to Europe and the United States and other developed markets; TOPRA series (TOPRA),mainly for domestic large and medium-sized group customers or listed companies. At present, thecompany's printing equipment business revenue is basically the same in domestic and overseasmarkets.
Schematic diagram of the company's printing equipment stand-alone products
Schematic diagram of the company's up-printing fixed sticky box linkage line (left)
and down-printing open and closed sticky box linkage line (right)
Schematic diagram of the company's down-printing automatic printing linkage line product
The company's two series of products have the characteristics of leading design concepts, highlyintegrated functions, higher automation, less manpower investment, lower labor intensity, energysaving and environmental protection, etc. They have obvious competitive advantages in the aspectsof printing quality, printing efficiency, overprint accuracy, printing width and other overallperformance and product cost performance.The company's complete production line for corrugated box printing is exported to more than 30countries and regions in Europe, America, Southeast Asia and India. At present, the company hasbecome a high-profile corrugated box printing equipment manufacturer in the global market andChina.
1.2 Main business model
1.2.1 Business model summary
Dongfang Precision's intelligent packaging equipment business adopts the "design and development+ production + sales + service one-stop" business model, and implements "differentiated" operationand service-oriented manufacturing.Fosber Group, Fosber Asia’s corrugated board production line business under Dongfang Precision,and corrugated box printing equipment business of Dongfang Precision (China) and DongfangPrecision (Europe), all have mastered the core technology of the product, have the product designand R&D strength, and have the production capacity to meet sales demand.In terms of "differentiated" operation, on the one hand, the company's corrugated board productionline business and corrugated box printing complete production line business are positioned at themid-to-high end, and the market is oriented to large and medium-sized customers. The product hashigh technical content, high intelligence, stable quality and good reliability; On the one hand, the
company provides high-quality after-sales services to customers through professional technicalteams, spare parts preparation, remote monitoring, and technical support, and uses services toempower manufacturing.The company has been working hard in the industry for many years. Both the Fosber corrugatedcardboard production line brand and Dongfang Precision corrugated box printing equipment brandhave high visibility and brand influence in the industry, which helps the company obtain a premiumfor brands, products and services from the market.
1.2.2 Procurement model
The company mainly purchases electrical components, standard parts, raw materials and auxiliarymaterials from external suppliers; the core machining parts are produced by the company itself; theequipment automation control program is developed by the company itself.
1.2.3 Production model
The company adopts 90% of orders to organize production according to customer orders and 10%according to market forecast orders. Through the combination of the two production modes, thecompany can not only better meet the customer's order needs, but also adjust the production rhythmthrough reasonable warehouse regulation to ensure that the company can respond in a timelymanner and meet customer needs.
1.2.4 Sales model
The company mainly adopts the direct sales model in the domestic market, and adopts the directsales plus channel agent sales model in the foreign market to carry out business sales.From the perspective of payment and settlement methods, the company is a professional equipmentsupplier and has a high brand awareness in the industry. Both domestic and foreign corrugated boxprinting equipment sales adopts the payment and settlement method of the customer first prepay,pay another part when delivery, and pay for the remaining part after installation and commissioning.From the perspective of product form, the company simultaneously sells the whole machine and thesales of accessories and services, each of which has its own value. The whole machine is a one-timesale with a large single amount; accessories and services can be sold repeatedly in the life cycle of
the whole machine, with a higher gross profit margin. The increasing market share of the company'smachine products has led to a rigid increase in the demand for accessories and services; at the sametime, high-quality after-sales service in turn promotes the sales of machine products. The twocomplement each other and achieve mutual success, driving the continuous growth of thecompany's overall business.
1.3 Key performance drivers
The downstream industry of the company's smart packaging equipment business has providedstrong support for the corrugated box production industry. In turn, the growth of corrugated boxproduction and consumption has provided strong support for the demand for smart corrugated boxpackaging equipment.
With the rapid development of online shopping, express delivery and other industries, thecontinuous improvement of environmental standards, the international advocacy of circulareconomy (such as the domestic "plastic restriction order"), and the huge gap between the domesticper capita consumption of corrugated packaging and that of developed countries, the marketdemand for carton packaging products represented by corrugated carton packaging has steadilyincreased.In recent years, China’s demographic dividend has gradually disappeared, labor costs havecontinued to rise, and supply-side reforms, environmental protection, production limits, industrial
upgrades, and centralized industrial production capacity have gradually become the trend.Theproduction equipment of the downstream paper product printing and packaging industry has a largedemand for upgrading to middle and high-end intelligent corrugated box packaging equipment.Inboth the domestic market and the emerging markets at home and abroad, there is a considerabledemand for upgrading of existing equipment and incremental equipment. In addition, with theexpansion of the company's operating scale, the stock of equipment sold by the company in themarket has increased, and the customer's demand for equipment spare parts and technical support isincreasing. At the same time, as the proportion of spare parts sales and technical support services inthe company's business structure increases, its higher gross profit margin will drive the company'soverall gross profit margin.The downstream industry's continuous upgrade demand for smart packaging equipment,incremental demand in emerging markets, customer demand for spare parts and technical support,after-sales service and the resulting increase in the company's overall profitability have become themain driver of business growth for the company's smart packaging equipment.
2. Outboard motor business
The main body of the company's outboard motor business is Parsun Power. Parsun Power is ahigh-tech enterprise focused on providing high-quality, cost-effective water power products for theglobal market, and is currently the largest manufacturer of outboard motor products in China.
2.1 Main products and uses
Parsun Power's main products are outboard motors, which mainly include four-stroke, two-stroke,electric and special-purpose water-jet propulsion outboard motors. There are currently more than 20categories and more than 200 models, of which four-stroke covers 2.6 horsepower -115 horsepower,two strokes cover a full range of 2hp-90hp outboard motors. It is the manufacturer with the mostcomplete models and the largest power range among domestic brands. Some models have maturelyused EFI technology, and the product performance indicators have reached the internationaladvanced level and can meeet the needs of high-end customers in Europe and America. In addition,Parsun Power continues to develop new products with higher horsepower outboard motors, so as tobreak the monopoly of foreign outboard motors on medium-horsepower outboard motors.
All outboard motor products of Parsun Power are independently developed. The company haspassed the ISO9001 quality management system certification and ISO14001 environmentalmanagement system certification. The products have passed the EU CE certification, the US EPAcertification, and the CCS certification of the authoritative unit China Classification Society. Thecompany is also the first drafting unit of the domestic outboard engine industry standard "TechnicalConditions for Outboard Engine Gasoline Engines" (JB/T11875-2014).Outboard motors can be widely used in leisure and entertainment industries (yachts, speedboats,etc.), maritime patrols (patrol boats, etc.), military uses (assault boats, landing craft), fishing, andwater transportation.
Schematic diagram of outboard motor products
2.2 Main business model
Parsun Power's outboard motor business adopts the "design R&D + production + sales" businessmodel, and implements a "differentiation + cost-leading" business strategy, and adopts a direct salesplus channel agent sales model to carry out business sales.Parsun Power can independently develop and produce various types of outboard motor products,and focus on small and medium horsepower outboard motor products. At the same time, it canmake full use of the domestic perfect manufacturing industry chain and its own productionexperience to provide customers with cost-effective water power products to seize the market.
2.3 Key performance drivers
With economic development and growth in per capita income, emerging markets such as Asia,Africa, Oceania, and Latin America (especially China) will gradually become the main incrementalmarkets for outboard motors and their applications. In addition, various specialized markets (suchas emergency rescue, military) also have considerable market potential in the future.The continued growth in the demand for outboard motors and downstream watercraft in emergingmarkets and specialized markets is the main performance driver of Parsun Power’s main businessdevelopment.
3. Automotive core parts business
During the reporting period, the company's core auto parts segment focused on new energy vehiclepower battery systems, and its main business was Pride. Pride specializes in the design,development, production, sales and service of new energy vehicle power battery pack systems, andis committed to providing new energy vehicle manufacturers with integrated power batterysolutions.The company sold 100% equity of Pride in December 2019, and will no longer operate the newenergy vehicle power battery system business.
3.1 Main products and uses
Pride's main products are power battery pack products, which are used in various types of newenergy vehicles such as passenger cars and commercial vehicles. In addition, the power battery packcan also be used in fields such as energy storage and step utilization.
3.2 Main business model
Pride's power battery pack business adopts the "R&D + production + sales" business model.Pride itself has certain Pack design and R&D capabilities, and can support different models anddifferent types of models from the OEM to provide corresponding Pack products.As for the production mode, Pride, as a third-party Pack manufacturer, does not produce batteriesitself, and all rely on outsourcing. Its own production mode focuses on the module design, assemblyand integration of Pack products.
The sales model mainly adopts the direct management model.II. Major changes in major assets
1.Major changes in main assets
| Main assets | Major changes |
| Equity assets | The balance of long-term equity investment decreased by 9.28% compared with the end of last year, mainly due to the acquisition of 70% equity of Tiruna Group, and the joint venture company Tiruna USA was included in the merger. |
| Fixed assets | The balance of fixed assets decreased by 14.52% compared with the end of last year, which was mainly due to the disposal of 100% equity of Pride. |
| Intangible assets | The balance of intangible assets decreased by 26.73% compared with the end of last year, mainly due to the disposal of 100% equity of Pride. |
| Construction in progress | The balance of construction in progress decreased by 53.82% from the end of last year, which was mainly due to the reduction of construction in progress caused by the disposal of 100% equity of Pride, and the completion of the office decoration project carried forward this year. |
| Trading financial assets | Trading financial assets increased by 100% compared with the end of last year, mainly due to the purchase of bank wealth management products at the end of the year. |
| bill receivable | The balance of bill receivable decreased by 100% compared with the end of last year, which was mainly due to the disposal of 100% equity of Pride and the reclassification of the balance of bill receivable to receivable financing. |
| Receivable financing | The balance of receivable financing increased by 100% compared with the end of last year, mainly due to the reclassification of the balance of bills receivable to receivable financing. |
| accounts receivable | The balance of accounts receivable decreased by 60.07% from the end of last year, which |
| was mainly due to the disposal of 100% equity of Pride. | |
| stock | The inventory balance decreased by 28.25% from the end of last year, mainly due to the disposal of 100% equity of Pride. |
| Other current assets | The balance of other current assets decreased by 59.10% compared with the end of last year, mainly due to the disposal of 100% equity of Pride. |
| Goodwill | The balance of goodwill decreased by 54.25% compared with the end of last year, which was mainly due to the disposal of 100% equity of Pride to reduce goodwill and the provision of goodwill impairment provision for EDF. |
| Deferred tax assets | The balance of deferred income tax assets decreased by 58.86% from the end of last year, mainly due to the disposal of 100% equity of Pride. |
2. Main overseas assets
√ Applicable □ Not applicable
| Asset specific content | Cause of formation | Asset size | Location | Operating model | Control measures to ensure asset security | Income status | The proportion of overseas assets in the company's net assets | Whether there is a significant risk of impairment |
| Holds 100% equity of Fosber S.p.A. | M & A investment | 1,239,337,572.33 | Italy | produce and market all by oneself | Operation management | good | 10.10% | No |
| Holds 100% equity of EDF S.R.L | M & A investment | 173,485,999.38 | Italy | produce and market all by oneself | Operation management and performance commitment | general | 0.96% | No |
III.Analysis of core competitiveness
1. Comprehensive industrial chain layout, providing overall solutionsDongfang Precision is one of the global leaders in the field of intelligent corrugated box packagingequipment. It has a full industry chain layout within the industry and has the ability to providehigh-end intelligent corrugated box packaging equipment solutions.Dongfang Precsion undertakes corrugated board production line and unit equipment businessthrough its subsidiaries Fosber Group, Fosber Asia and Fosber Group's holding subsidiary TirunaGroup; undertakes corrugated box printing complete production line business through DongfangPrecsion (China) and Dongfang Precsion (Europe); through joint stock company Jiateng Robot tolay out an automated logistics system business.Schematic diagram of the overall solution of the company's intelligent corrugated packaging equipment
1.1 Medium and high-end printing equipment has been deeply cultivated for many years, withcomplete product types and specificationsAs the main business of Dongfang Precision when it went public, the corrugated box printingcomplete production line is the cornerstone of the company's business development. After morethan 20 years of hard work, the company has continuously carried out independent innovations onmid-to-high-end corrugated box packaging equipment, and has continuously upgraded, expanded,and extended products and can be able to meet the extensive needs of customers in the globalmarket.Other competing companies are not capable of designing and producing products in some links.International peer companies can provide lower-print products suitable for markets in Europe,America, and Japan, but basically no upper-print products suitable for Asian markets.In addition, like Dongfang Precision, the Swiss Bobst company also has the ability to provide major
products in the industrial chain, but its specifications and quantity in each type of product are not ascomplete as Dongfang Precision products. Taking the product specifications of the above printer asan example, Dongfang Precision can provide 26 different sizes of machine products, while Bobstcan only provide 2 specifications.The above-mentioned product advantages of Dongfang Precision are the result of the company'shard work and aggressiveness in the industry over the years. It is difficult for other competitors tocopy and build in the short term. It is one of the core competitive advantages of DongfangPrecision.
1.2 Entering high-end corrugated cardboard production line and its components, efficientlyintegrated with Fosber Group's overseas mergers and acquisitionsIn March 2014 and September 2017, Dongfang Precision acquired 60% and 40% shares of FosberGroup, respectively, and entered the field of high-end corrugated board production lines. FosberGroup's products are mainly sold to Europe, the United States, and Asia and other countries. It isthe world's top two brands in the corrugated board production line industry.In 2014, Dongfang Precision and the original shareholders of Fosber Group jointly invested to setup a joint venture Fosber Asia in Foshan City, Guangdong Province. Its main business ismid-to-high-end corrugated board production lines, mainly for Asian markets, especially China andIndia. Fosber Asia's R&D team completed the drawing design of the entire corrugated boardproduction line in a short period of time through continuous on-site learning and communication atFosber Group, and made special designs and adjustments to meet the needs of customers in theAsian market to achieve localization. The new product was launched on the market in 2017 and hasbeen highly recognized by customers.The overseas M&A model of "acquisition + joint ventures" has realized the localization andeffective transfer of overseas high-quality technological assets, which is an important manifestationof Dongfang Precision's strategic thinking and an effective method to promote the transformationand upgrading of China's industries.At the same time, in order to further improve the company's "smart packaging equipment" industrychain layout, at the end of May 2019, Fosber Group completed the acquisition of 70% of the
corrugated roll supplier Tiruna Group. The amount of the merger and acquisition transaction wasapproximately 16.1 million euros, which did not meet the information disclosure standardsstipulated in the "Shenzhen Stock Exchange Stock Listing Rules", and the company has performedthe necessary internal approval procedures for the merger and acquisition.Tiruna Group is a company with a long history and specialized in providing corrugated rollers,pressure rollers and other key core components for the corrugated equipment industry. It hasproduction bases in Europe and the United States and is the second largest corrugated roller supplierin the world. Tiruna Group and Fosber Group have decades of strategic partnership. Through thisacquisition, the Fosber Group further strengthened its cooperation with the Tiruna Group, so thatthe supply of key components for its corrugated board production line business was firmlyguaranteed.
1.3 Deepen the global R&D layout, research and upgrade the high-end corrugated boxprinting complete production lineIn July 2016, the company completed the acquisition of 100% equity of EDF in Italy, and adjustedthe company's position within the group, renamed it as Dongfang Precision (Europe), and used it asthe research and development of Dongfang Precision high-end corrugated box printing completeproduction line in Europe And production base, not only realize the research and development andupgrade of the company's existing printing equipment series products, but also realize the researchand development and production of high-end models in Europe, further drive the company's globalsales of products, practice the company's positioning in the high-end market, and look at theinternational Development strategy for a global layout and balanced allocation of global assets.
1.4 Equity participation in Jiateng robot to layout intelligent logistics, "packaging-intelligentlogistics" integration is ready to goIn July 2014, the company acquired a 20% stake in Jiateng Robot, and deployed in the field ofintelligent logistics. After years of resource integration and R&D support, the company hasaccumulated more experience and strength in the field of "package-intelligent logistics" integratedsolutions. As downstream customers' demand for subsequent logistics automation equipment forprinting equipment production lines increases, the company's advantage in the layout of smart
logistics in advance will gradually emerge.
2. Efficient and reliable, intelligent leading products, promote the transformation ofintelligent manufacturingThe company's intelligent packaging business segment's corrugated box printing completeproduction line has leading design concepts, highly integrated functions, high degree of automation,and advanced overall performance. Leading competitors in terms of overall performance andproduct cost performance such as operating stability and life, printing quality, printing efficiency,overprint accuracy, and printing width.At the same time, the company independently develops a production management systemembedded in the corrugated box printing complete production line, links with the customer's ERPsystem, performs intelligent automated order and production management on the corrugated boxprinting, and fully improves the production efficiency of customers. After years of practice anditerative updates, the system has mature functions and is currently sold separately as a company'sfeatured product.
The company's automatic corrugated box printing complete production line greatly saves labor costs
Fosber Group, a subsidiary of the company's Intelligent Packaging Equipment segment, focuses oncorrugated cardboard production lines and equipment. It is an important high-end corrugatedcardboard production line manufacturer in the European and American markets. It is one of the
world's two largest companies in the field of high-speed wide-width corrugated cardboardproduction lines . Its simple equipment design, stable performance, low failure rate, and high degreeof intelligence reflect the characteristics of its equipment design leadership, high degree ofmechanical and electrical integration, energy saving and environmental protection, and is in aleading position in the industry in Europe and North America.At the same time, Fosber Group actively promotes the upgrade of smart manufacturing. Itscorrugated cardboard production line has a brain that collects and analyzes data, and can solveproblems autonomously through algorithms like human brains and continuously learn.Pro-Syncro, which is embedded in the corrugated cardboard production line by Fosber Group, is thecore control system of the production line, and can interact with highly automated equipment units.Through more than 200 various sensors installed on the corrugated cardboard production line, itmonitors and collects the production data of the entire line in real time. According to the collectedreal-time data and the designed parameter settings, the equipment automatically makes necessaryadjustments; Each client in the laboratory computer or production line issues instructions to controlthe target equipment to make corresponding adjustments. According to the production datacollected in real time and the setting of the program algorithm, the machine can identify abnormalproduction data in real time and make a diagnosis, and immediately, the system automaticallyrealizes the alarm. In addition, the system will predict and provide corresponding solutions to thedevelopment of the problem. At the same time, Fosber Group's remote technical support team Proteam continuously solves problems and provides corresponding solutions to the system. Supportedby the accumulation of a large number of cases and data, the system can realize intelligentidentification, intelligent diagnosis, intelligent correction and self-learning.
Fosber Group corrugated board production line intelligent manufacturing application
related links and process diagram
3. Advanced after-sales service solutions to promote service manufacturing transformationBy combining traditional corrugated cardboard production equipment with advanced artificialintelligence, virtual reality, 3D simulation and other technologies, Fosber Group has developedintelligent systems such as Pro Care and Pro Syncro to realize the operation of the entire productionline and individual equipment Intelligent monitoring and control. Based on the application ofintelligent manufacturing in the corrugated cardboard production line, Fosber Group realizesintelligent diagnosis, automatic production planning and management equipment maintenance byautomatically analyzing the collected machine operation data.Fosber Group remotely helps customers monitor the running status of equipment and machines inreal time. It can detect the operating parameters obtained through the remote control service beforethe customer finds the problem, detect and predict possible problems in advance, contact thecustomer in advance, and then provide customers with more efficient and better technical supportservices.In order to ensure the timely and professional service, Fosber Group provides 24/7 telephone andremote technical support services, and has an expert team composed of mechanical engineers,electrical engineers and software development engineers, which provide comprehensive technicalsolutionsin accordance with customer requirements worldwide.
Schematic diagram of Fosber remote real-time monitoring system interface
For the high-tech and high-value corrugated board production line special equipment sold by FosberGroup, the service manufacturing model based on intelligent manufacturing is a very important andunique business model, which improves customer efficiency and experience while bringing anincrease of added value of the company's products.
4. International brand competitiveness and industry influence
Dongfang Precision's intelligent packaging equipment products have considerable brand awarenessand industry influence through its precise product positioning and stable product quality. ItsDongfang Precision corrugated box printing equipment, Fosber, Tiruna, etc., among whichDongfang Precision corrugated box printing equipment are domestic first-line brand in the industry,which enjoys a high reputation in the relevant global market; the Fosber brand is one of the leadingbrands in the global corrugated board production line industry; the Tiruna brand also hasconsiderable visibility and influence in the corrugated roller segment.The company's intelligent packaging equipment products are well-known in the industry for highperformance, high stability and reliability. At the same time, the service-based manufacturingmodel based on intelligent manufacturing brings high-quality technical support and after-salesservice to customers, allowing the company's products to obtain better brand premium.
5. High-quality customer resources and solid strategic cooperation relations help thecompany's sustainable development
Dongfang Precision's smart corrugated box packaging equipment business adheres to the marketpositioning for mid- to high-end customers. As the business model develops from a single productmanufacturing to an integrated overall solution provider model, end customers have placed higherand stricter requirements on product quality, timeliness of delivery, and sustainability of long-termcooperation. The company continues to increase R & D and innovation efforts to improve thequality of products and services, so as to establish a long-term and stable strategic cooperativerelationship with well-known domestic and foreign brands.In the "smart packaging equipment" business area, the company focused on specialization,implemented solution delivery, and realized a differentiated competitive strategy, and established aclose and stable cooperative partnership with major domestic and foreign customers and largegroups such as Hexing Packaging, Hezhong Chuangya, Shanying Paper, Xintonglian, ShengdaPackaging, Zhengye International, International Paper, Smurfit Kappa, Mpact, Modern, and Orora.
6. The management team with rich management experience and professional technical talentteam lays the foundation for the stable development of the companyDongfang Precision has an experienced management team with rich industry accumulation and adeep understanding of the company's product development, design, and manufacturing. Theexperienced and broad management team enables the company to have forward-lookingdeployments in the global economic operating cycle and the overall development trend of theintelligent packaging equipment manufacturing industry.At the same time, Dongfang Precision is a company with standardized operation and stableoperation. It has been strengthened through a variety of methods (including core senior managementteam building, organizational structure design, management and control system, financialmanagement system, leadership, mid- and long-term incentives, corporate culture construction, etc.)The construction and upgrading of the company's organizational capabilities, continue to improvethe management capabilities, resource integration capabilities of various functional departments andthe ability to help subsidiaries' businesses, and improve the company's overall management andoperational efficiency.The company has established a sound long-term incentive and restraint mechanism. In order to fully
eliminate the negative impact of the Pride incident on the company, attract and retain excellenttalents, and fully mobilize the enthusiasm of the company's senior management personnel and coretechnology and business backbone personnel, lay the foundation for the company's future healthyand sustainable development and improve the company's operating performance and value creationcapabilities, the company launched its 2020 restricted stock incentive plan in March 2020. Theincentive plan sets strict conditions for the realization of incentive income, and deeply binds thecore backbone team’s self-interest with the company’s healthy and sustainable development,operating performance, and shareholder return in the next three years, thereby achieving the goal ofthe incentive plan to have a “stable team”.
Section 4 Discussion and Analysis of Business Situation
I. OverviewIn 2019, China's GDP growth rate reached 6.1%. The GDP growth rate remained within areasonable range. The overall operation of the national economy was stable, progressed steadily,and the effects of economic structural transformation and upgrading showed. According to datafrom the National Bureau of Statistics, the cumulative growth rate of industrial added value in 2019was 5.7% year-on-year, lower than 0.5 percentage points in 2018; the cumulative growth rate ofmanufacturing investment in 2019 was 3.1% year-on-year, a drop of 6.4 percentage points from2018. Overall manufacturing investment slided at the beginning of the year to maintain a lowvolatility. Against the backdrop of the global economic slowdown leading to continued decline inexternal demand and continued decline in domestic demand due to debt structural problems, China'smanufacturing industry is in a process of sustained low bottoming.During the reporting period, facing the complex internal and external environment, under theleadership of the company's management, Dongfang Precision continued to insist on the businesspurpose of committed to becoming the world's leading provider of integrated solutions forintelligent packaging equipment and the supply of high-end core components, fully grasp theinternal and external positive factors in the development process, with strong perseverance anddetermination to deal with the problems encountered in the development process, with a positiveand pragmatic attitude to promote all aspects of work, keeping in mind the original intention andmarching forward.During the reporting period, the company's consolidated statements achieved a total operatingincome of about 9.974 billion yuan. After deducting the sold Pride from January to November 2019,it will be included in the consolidated range of about 7.106 billion yuan in revenue. It achievedoperating income of approximately 2.868 billion yuan, a growth rate of approximately 20.64%compared to 2018, and achieved steady growth.The company achieved a net profit attributable to shareholders of listed companies ofapproximately 1.838 billion yuan, which turned losses into profit year-on-year. The implementation
of a package solution increased the company's total profit in 2019 to approximately 1.355 billionyuan (including the sale of Pride and the cancellation of performance compensation shares Income).The company's "high-end smart equipment" business segment benefited from the increased marketconcentration of the downstream industry and the trend of increasing demand in the internationalmarket, continuing the growth momentum since 2018, and achieving steady growth in revenue andprofits.Since 2019, Dongfang Precision has mainly focused on the promotion of the following work:
1.Getting off burden and starting again, Pride's performance compensation dispute wassuccessfully resolvedIn 2019, the company had disputes with Pride and the original shareholders of Pride about thecompletion of Pride's 2018 annual performance commitments and profit compensation matters. Inthe course of disputes, the board of directors and management of Dongfang Precision have enduredtremendous pressure from the inside and outside of the company, but they have always adhered tothe bottom line, adhered to principles, overcome various difficulties, and actively took the premiseof respecting the principles of marketization and legalization of the securities market to carry outcommunication with the government, supervision, arbitration tribunal and investors, present the truesituation and seek understanding and support. It adhered to the premise of legal compliance,properly sought dispute resolution solutions, resolved the potential huge risks of listed companies,and protected the legitimate interests of listed companies and the company's large and smallinvestors. On November 25, 2019, Dongfang Precision and Pride and the original shareholders ofPride signed the "Agreement" to reach a "package solution" to resolve the previous Prideperformance compensation dispute. The plan was approved by the December 2019 interim generalmeeting of shareholders, and the company and relevant parties confirmed on December 25, 2019that the delivery items agreed in the "Agreement Package" of the "Package Solution" have beenimplemented. 1.5 billion yuan transfer of 100% equity of Pride by Dongfang Precision; on January8, 2020, the company received a notice from Shenzhen Branch of China Securities Depository andClearing Co., Ltd. that five former Pride shareholders held 293,520,139 A share ordinary stock ofDongfang Precision perform performance compensation obligations to Dongfang Precision, and therelevant performance compensation shares repurchase and cancellation work of Dongfang Precision
at a consideration of 1 yuan have all been implemented. On the delivery date, Dongfang Precisionalso exempted Pride's original shareholders under the "Profit Compensation Agreement" for the2019 performance commitment and the end of 2019 impairment test compensation obligations.The completion of the implementation of the above-mentioned package solution has had thefollowing positive impact on the company's subsequent operations:
1.1 Get cash back, effective improvement of financial situation and profitabilityFirst, the implementation of the package solution increased the company’s total profit in 2019 byapproximately 1.355 billion yuan (including the proceeds from the sale of Pride and the cancellationof performance compensation shares), which has effectively mitigated the negative impact of thecompany's provision of Pride's goodwill impairment provision on undistributed profits in 2018.Secondly, through this transaction, the company stripped off the core auto parts business andrecovered 1.5 billion yuan in cash, which greatly improved the company's financial situation. Afterthe sale of Pride, the company's net assets have further increased in size, its asset-liability structurehas been further optimized, and its solvency indicators such as current ratio and quick ratio havebeen enhanced.Again, as shown in the following table, although the company's operating income has decreasedafter the completion of this transaction, the company's operating efficiency and quality have beensignificantly improved, and its gross profit margin has increased significantly.
| Item | 2019 （including Pride） | 2019 （excluding Pride） |
| Operating income (ten thousand yuan) | 997,350.36 | 286,740.63 |
| Operating cost (ten thousand yuan) | 828,643.21 | 205,647.77 |
| Operating gross profit (ten thousand yuan) | 168,707.15 | 81,092.86 |
| Gross margin | 16.92% | 28.28% |
1.2 Protect shareholders' rights and resolve potential major risksSince the performance compensation dispute between Dongfang Precision and the originalshareholders of Pride, the two parties have continued to show contradictions and confrontation. Ifthe performance compensation disputes cannot be properly resolved in a manner acceptable to allparties, and the contradiction between the two parties will continue until 2020, the company willface the possibility of continuing to respond to the risk of litigation and arbitration that is indefiniteand undetermined. Under such circumstances, the normal operating activities, financial status,operating performance and even team members of Dongfang Precision will be severely andnegatively affected, which in turn may cause the company's stock price to fluctuate and damage thevital interests of the majority of small and medium investors.The company adheres to principles, overcomes all kinds of difficulties, and on the premise of legalcompliance, in 2019, a package of solutions was used to properly resolve the performancecompensation dispute with Pride, which resolved the potential huge risks of listed companies andsafeguarded the majority of listed companies and companies. The legitimate interests of small andmedium investors.
1.3 Adjust the layout to focus on high-end smart equipment
During the reporting period, Dongfang Precision was mainly engaged in the business of "intelligentpackaging equipment" and "outboard machinery equipment", and the business of "automobile coreparts" was mainly the business of "power battery system" (sold at the end of the reporting period).Although the revenue of the sold power battery system segment accounted for a relatively highrevenue in the reporting period, the gross profit margin of this type of business was low, whichlowered the company's overall operating gross profit margin. After selling 100% equity of Pride,Dongfang Precision will, on the one hand, divest the "power battery system" business with largefluctuations in operating performance and low profitability, on the other hand, it will still beengaged in "smart packaging equipment" and "outboard machinery equipment " business, and thiskind of business will be more concentrated and prominent.The company successfully adjusted its main business development strategy in a timely mannerthrough this successful settlement of Pride's performance compensation disputes, returned to focus
on high-end smart equipment business, and further became bigger and stronger, which in turn wasbeneficial to the future long-term healthy and sustainable development of Dongfang Precision toimprove the company's operating performance and company quality; and then help to protect theinterests of the company's majority of small and medium investors.
2.Focus on the core business and build a global leading enterprise in the field of intelligentcorrugated box packaging equipmentAfter the sale of Pride, Dongfang Precision focused on its core main business—smart packagingequipment business, and provided complete solutions for high-end smart corrugated packagingequipment to downstream customers with a complete entire industrial chain layout, high-endintelligent products, and a leading service model.As an equipment supplier of downstream corrugated box packaging manufacturers, the companyhas the characteristics of business focus, resource advantages (research and development andinnovation capabilities), stable performance growth, and leading market share. This makesDongfang Precision the number one domestic leader in the field of intelligent corrugated boxpackaging equipment and the top three leading companies in the world.
2.1 Corrugated board production line business
The company's corrugated board production line business consists of Fosber Group and Fosber Asia.During the reporting period, the corrugated board production line business achieved operatingincome of approximately 2.064 billion yuan, accounting for a relatively large proportion of thecompany's high-end intelligent equipment business segment.Fosber Group is the world's leading supplier of corrugated board production lines, focusing ontechnological innovation and product design. In a constantly changing and increasingly competitivemarket, Fosber Group can provide customers with the most advanced technology to ensure thatcustomers achieve corrugated board production. At the same time as high efficiency, it can greatlyachieve high-quality flexible production.
2.1.1 Operating performance
In 2019, Fosber Group continued the momentum of steady growth in operating income and net
profit in 2018, and revenue and profit hit a new high. Operating income reached 239 million euros,a year-on-year increase of approximately 24%, and net profit of approximately 22.17 million euros,a year-on-year increase of approximately 21%.
2.1.2 Income composition
From the perspective of revenue type, during the reporting period, Fosber Group’s various types ofcorrugated cardboard production lines have a total line product and stand-alone product salesrevenue of approximately 160 million euros, accounting for approximately 67% of revenue. Theincome ratio contributed by spare parts sales and technical support services remained at around 30%,and the overall gross profit margin remained stable compared with 2018.The achievements of Fosber Group in the sales of the entire line of products in 2019 fully illustrateits competitiveness and market position in the global corrugated packaging equipment market, andits global market share has steadily increased to about 30%.From the perspective of regional revenue sources, Fosber Group has maintained steady growth inthe two major markets of the United States and Europe by virtue of its global layout of R & D,production and services during the reporting period, and has not been negatively affected bychanges in the international trade environment. It has maintained relatively stable cooperativerelations with major global corrugated board manufacturers such as Smurfit, IP, DS Smith, etc.Fosber US maintained its leading position in the US market in 2019. In 2019, its market share in theNorth American high-end tile line market reached about 50%, and its operating income and orderdelivery increased by approximately 26% year-on-year.Fosber Asia is committed to providing high-quality corrugated product production lines and relatedtechnical support services for the Chinese and Asian markets. It continued the sales growthmomentum in 2019 and achieved operating income of approximately 190 million yuan, an increaseof nearly 60% year-on-year. The order delivery volume in 2019 increased by 50% year-on-year.During the reporting period, Fosber Asia continued to promote and successfully realized thelocalization of the Pro-line, the mid-to-high-end product of the Fosber Group, reducingmanufacturing costs by approximately 25%. At the same time, Fosber's overseas business in Asiahas also developed rapidly, with a breakthrough in overseas orders from scratch in 2019.
2.2 Corrugated box printing complete production line business
The corrugated box printing complete production line business is composed of Dongfang Precision(China) and Dongfang Precision (Europe). During the reporting period, the company's corrugatedbox printing complete production line business contributed a total of approximately 622 millionyuan in operating income.Corrugated box printing complete production line business is the cornerstone of the company's mainbusiness development. During the reporting period, Dongfang Precision (China) achieved revenueof 454 million yuan in its main business, which increased steadily. Such business results are hard tocome by in the context of the domestic macroeconomic downturn in 2019 and the continued severeinternational trade situation.From the perspective of revenue product composition, during the reporting period, the sales of spareparts and technical support services for the corrugated box printing complete production linebusiness maintained relatively rapid growth, which also drove the company's corrugated boxprinting complete production line operation growth; the company's corrugated carton printinglinkage line product sales increased by more than 30% year-on-year. In terms of market expansion,during the reporting period, the company's corrugated box printing complete production linebusiness continued to grow in the international market, especially in Southeast Asia and Africa andother emerging countries. During the reporting period, the company made breakthroughs incooperation with large enterprises in the domestic paper product packaging and printing industry,and successfully reached cooperative relations with Meiyingsen, Yongfengyu and other groupcustomers.During the reporting period, Dongfang Precision (Europe) achieved operating income ofapproximately 168 million yuan and achieved steady growth. During the reporting period, severalhigh-end new product designs were completed. In terms of market expansion, while continuing toconsolidate and increase its European market share, Dongfang Precision (Europe) actively exploresthe US market through various measures to achieve new revenue growth points.
3.Focusing on Industry 4.0, leading the "new infrastructure" of the corrugated box industryDuring the reporting period, Fosber Group actively implemented the Industry 4.0 model. With the
help of Fosber Group's industrial 4.0 technology layout in the four fields of intelligent recognition,intelligent diagnosis, intelligent correction and self-learning, it uses hard and soft integration andintegrated output to provide key support for new infrastructure construction and integration ofinnovative applications in the downstream corrugated packaging industry.Industry 4.0 is based on the foundation of computerization and network connection, and uses bigdata and algorithms as means to realize the self-learning and intelligent production of machines.The machine's self-learning and intelligent production are divided into four stages: visualizationstage (intelligent identification problem), transparency stage (intelligent analysis problem),prediction stage (intelligent prediction problem trend), and adaptive stage (artificial intelligenceprovides solutions). At present, Fosber has completed the functional design of the above fourstages.
Schematic diagram of Fosber Group's stage in the application of Industry 4.0 technology
Fosber Group Industry 4.0 products include PRO series family products, in which PRO/ SYNCROcollects production data of corrugated cardboard production line; PRO/CARE conducts in-depthanalysis based on relevant data; PRO/QUALITY monitors products in real time to ensure quality;PRO/REMOTE realizes the secure connection of data through the Internet of Thingscommunication technology, so that the machine data is no longer an island; PRO/SERVICE onlineand offline continue to support and extend all the functions of the Fosber Group Industry 4.0 PRO/series of family products at the beginning, and finally achieve smart and sustainable production.At the same time, after diagnosing production line problems, the system will directly issuecorresponding parts replacement suggestions and operation guidelines and deliver them to Fosber
Group customers in a timely manner. Fosber Group uses virtual reality, 3D technology, visualrecognition and other corresponding technologies to provide a good guarantee for the operation ofthe corrugated cardboard production line.In addition to the data cycle and artificial intelligence learning inside the machine, Fosber GroupIndustry 4.0 has also strengthened the connection between the machine and humans, whilemaximizing the stability of the machine, greatly reducing the dependence on the operator's personallevel and improving production flexibility and adaptability, reducing customer cost input.
4.Leading service manufacturing, building an industrial ecological closed loopWith the emergence of a new round of industrial revolution, service-oriented manufacturing hasbecome a world trend. The United States has put forward strategies such as revitalizingmanufacturing, "re-industrialization", and "jobs returning to US". Germany proposes Industry 4.0 toenhance the manufacturing level through the in-depth application of CPS new technologies such asthe Internet and the Internet of Things. China's manufacturing industry is facing huge challenges:
first, China's manufacturing industry is large but not strong, and it is at the low end of the globalindustrial value chain; second, under the new normal, it enters a strategic period of industrialrestructuring. Carrying out service-oriented manufacturing is an important path for Chinesemanufacturing companies, especially leading companies in the industry, to break through thelow-end lock-in and extend to the high-end of the value chain, improve the closed-loop of themanufacturing ecosystem, and strengthen the control and voice of the international market. It is alsoa key way for China to transform from big to strong in manufacturing.Fosber Group continues to strive to improve the reliability and automation of its products, and toprovide customers with high-level technical support and after-sales service. In the context ofIndustry 4.0 becoming the future development trend of the manufacturing industry, Fosber Groupcontinues to increase the level of intelligence in its products and technical services. The PRO/CARE intelligent technical support service it launched, based on Internet intelligent monitoringtechnology, can capture and collect data related to machine operation and cardboard production inreal time and continuously during the operation of the machine, which can be used for eachequipment unit on the entire line to plan and manage all necessary maintenance work, so as to
achieve the replacement of traditional manual production line maintenance.During the reporting period, Fosber Group focused on building customer service centers,simplifying work processes, improving after-sales service efficiency, and providing customers withmore "specialized" after-sales service, spare parts supply, and technical support.
Fosber Group's high level of technical support and customer service
In order to ensure the timely and professional service, Fosber Group provides 24/7 telephone andremote technical support services, and has a technical support team composed of highly specializedand experienced technical experts to provide comprehensive technical solutions and customizedservices according to customer requirements worldwide.In terms of spare parts supply, in the past few years, Fosber Group and Toyota Academy havecontinued to cooperate in depth, implement the JIT (lean production management) concept inproduction and customer service, with its innovative fully automated spare parts inventorymanagement system, and forms a good partnership with major transportation companies and postalcompanies, so as to achieve a variety of spare parts products to customers at any time of the day.
5. Improve industrial puzzles and continue to lay out the “Belt and Road” initiativeIn order to further improve the company's "smart packaging equipment" industrial chain layout, atthe end of May 2019, the company's wholly-owned subsidiary Fosber Group completed theacquisition of a 70% stake in corrugated roll supplier Tiruna Group, continuously improving thecompany's industrial distribution in smart packaging equipment field.In addition, during the reporting period, in order to cope with the decline in sales in the US marketcaused by changes in the global trading environment, the company's corrugated box printingcomplete production line business has also made breakthrough progress in the expansion of
emerging country markets and the Belt and Road countries. The direct sales in Africa, SoutheastAsia and South Asia markets have doubled compared with 2018, and the growth momentum isexpected to continue.The company seizes a historic opportunity provided by the "Belt and Road" initiative for theinternationalization of China's manufacturing industry, and takes advantage of China's equipmentmanufacturing industry in countries and regions along the "Belt and Road" to continue to deploy inemerging markets and deliver high-end smart packaging equipment products and services to the“Belt and Road” countries and regions to further expand the company's business market space.Facing the new challenges brought by Chinese enterprises' "going global" to product R&D,management, manufacturing and marketing, the company has continuously improved its productpower, technological innovation and marketing capabilities, and further promoted thetransformation and upgrading and high-quality development of the smart packaging equipmentindustry.
6.The outboard motor business develops steadily, accumulating strength for futuredevelopmentDuring the reporting period, the subsidiary Parsun Power maintained the industry position of thelargest domestic outboard supplier. Under the guidance of the business purpose of providinghigh-quality, highly reliable and cost-effective water power products for the Chinese market and theinternational market, Parsun Power focuses on outboard motor series products. Its operatingperformance maintained a stable development trend and its outboard engine production and sales hita record high, and its operating performance maintained a steady growth. The annual operatingincome achieved was 299 million yuan.In 2019, Parsun Power actively responds to market changes and adjusts its strategies to increase thedevelopment of the domestic market. During the reporting period, domestic market sales increased by30%. From the perspective of product type, the sales revenue of outboard motor products with apower of over 40 horsepower sold by Parsun Power during the reporting period increased by 30%compared with last year.While continuing to consolidate and enhance the market share and status of small and
medium-horsepower outboard motor products, Parsun Power is also orderly advancing the researchand development of high-horsepower outboard motors. During the reporting period, Parsun Power'shigh-power F115 outboard motor with independent intellectual property rights was successfullyignited. It is the largest horsepower model among domestic outboard motors. It has madebreakthroughs in advanced technologies such as electronic fuel injection technology andcylinder-less technology, and is expected to become Parsun Power’s new sources of performancegrowth in the future.Outboard planes are also widely used in military equipment. With the implementation of thenational military-civilian integration policy, in 2019 Parsun Power will continue to develop themilitary market, and has made significant progress in products and orders. In the future, militaryproducts business will also become an important support for Parsun Power's development.
II. Main Business Analysis
1.Overview
See "1. Overview" in "Discussion and Analysis of Business Situation".
2.Income and cost
2.1 Operating income composition
unit: yuan
| 2019 | 2018 | YoY increase and decrease | |||
| Amount | % Of operating income | Amount | % Of operating income | ||
| Total operating income | 9,973,503,602.19 | 100% | 6,621,349,618.40 | 100% | 50.63% |
| By sector | |||||
| High-end smart | 2,867,406,250.70 | 28.75% | 2,376,890,214.84 | 35.90% | 20.64% |
| equipment | |||||
| Automobile core parts (already sold) | 7,106,097,351.49 | 71.25% | 4,244,459,403.56 | 64.10% | 67.42% |
| By Product | |||||
| Intelligent packaging equipment and related parts | 2,374,061,883.51 | 23.80% | 1,971,434,963.29 | 29.77% | 20.42% |
| Power plant | 287,420,038.60 | 2.88% | 236,275,034.15 | 3.57% | 21.65% |
| Other main business | 105,982,490.24 | 1.06% | 96,272,779.85 | 1.45% | 10.09% |
| Power battery system (already sold) | 7,080,281,233.19 | 70.99% | 4,223,547,366.49 | 63.79% | 67.64% |
| Other business | 125,757,956.65 | 1.26% | 93,819,474.62 | 1.42% | 34.04% |
| By region | |||||
| Domestic | 7,496,120,829.52 | 75.16% | 4,594,127,918.26 | 69.38% | 63.17% |
| Overseas | 2,477,382,772.67 | 24.84% | 2,027,221,700.14 | 30.62% | 22.21% |
2.2 Industry, product or region that accounts for more than 10% of the company's operating income oroperating profit
√ Applicable □ Not applicable
unit: yuan
| Operating income | Operating cost | Gross margin | Operating income increased or decreased compared with the same period | Operating cost increased or decreased compared with the same period | Gross margin increased or decreased compared with the same period |
| of last year | of last year | of last year | ||||
| By sector | ||||||
| High-end smart equipment | 2,867,406,250.70 | 2,056,477,689.76 | 28.28% | 20.64% | 20.71% | -0.04% |
| Automobile core parts (already sold) | 7,106,097,351.49 | 6,229,954,385.16 | 12.33% | 67.42% | 65.18% | 1.19% |
| By Product | ||||||
| Intelligent packaging equipment and related parts | 2,374,061,883.51 | 1,704,614,629.96 | 28.20% | 20.42% | 20.89% | -0.28% |
| Power battery system (already sold) | 7,080,281,233.19 | 6,229,240,701.90 | 12.02% | 67.64% | 65.23% | 1.28% |
| By region | ||||||
| Domestic | 7,496,120,829.52 | 6,431,409,520.24 | 14.20% | 63.17% | 61.74% | 0.76% |
| Overseas | 2,477,382,772.67 | 1,855,022,554.68 | 25.12% | 22.21% | 23.76% | -0.94% |
When the statistical caliber of the company's main business data is adjusted during the reporting period, the company's main businessdata adjusted in accordance with the caliber of the end of the reporting period in the past year
□ Applicable √ Not applicable
2.3 Whether the company's sales revenue in kind is greater than the labor service income
√ Yes □ No
| Category | Item | Unit | 2019 | 2018 | YoY increase and |
| decrease | |||||
| High-end smart equipment | Sales | set | 210,542 | 174,599 | 20.59% |
| Production | set | 212,800 | 174,516 | 21.94% | |
| Inventory | set | 11,451 | 9,209 | 24.35% | |
| Automobile core parts | Sales | set | 116,735 | 85,541 | 36.47% |
| Production | set | 123,769 | 84,597 | 46.30% | |
| Inventory | set | 3,063 | 1,414 | 116.62% |
The reason why the relevant data has changed by more than 30% year-on-year
√ Applicable □ Not applicable
During the reporting period, the company's core auto parts segment focused on new energy vehicle power batterysystems. Its main business was Pride, and its business growth was driven by the growth of domestic new energyvehicle power battery installed capacity.
2.4 The performance of the company's signed major sales contract as of the reporting period
□ Applicable √ Not applicable
2.5 Operating cost composition
Industry and product classification
unit: yuan
| Industry Category | Item | 2019 | 2018 | YoY increase and decrease | ||
| Amount | % Of operating costs | Amount | % Of operating costs | |||
| High-end smart equipment | Operating cost | 2,056,477,689.76 | 24.82% | 1,703,700,112.89 | 31.12% | 20.71% |
| Automobile core | Operating cost | 6,229,954,385.16 | 75.18% | 3,771,595,245.35 | 68.88% | 65.18% |
unit: yuan
parts (alreadysold)Product Category
| Product Category | Item | 2019 | 2018 | YoY increase and decrease | ||
| Amount | % Of operating costs | Amount | % Of operating costs | |||
| Intelligent packaging equipment and related parts | Operating cost | 1,704,614,629.96 | 20.57% | 1,410,006,919.35 | 25.75% | 20.89% |
| Power plant | Operating cost | 220,349,507.12 | 2.66% | 170,713,125.22 | 3.12% | 29.08% |
| Other main business | Operating cost | 74,318,981.15 | 0.90% | 60,353,779.91 | 1.10% | 23.14% |
| Power battery system (already sold) | Operating cost | 6,229,240,701.90 | 75.17% | 3,769,972,041.68 | 68.85% | 65.23% |
| Other business | Operating cost | 57,908,254.79 | 0.70% | 64,249,492.08 | 1.17% | -9.87% |
Explanation
2.6 Whether the scope of consolidation has changed during the reporting period
√ YES □ NO
1. During the reporting period, the company sold 100% of Pride's equity. The delivery of the relevant equity sale was completed onDecember 25, 2019. After the completion of the delivery, Pride will not be included in the company's consolidated financialstatements for the 2019 annual financial report.
2. The subsidiary Fosber Group acquired 70% of the equity of the Spanish Tiruna Group. The delivery of the equity acquisition wascompleted on May 30, 2019. After the completion of the delivery, the Tiruna Group was included in the company's consolidated
financial statements for the 2019 annual financial report.
3. In March 2019, Parsun US completed the cancellation and will no longer be included in the company's consolidated financialstatements for the 2019 annual financial report from the date of cancellation.
4. In October 2019, Guangdong Flando completed the cancellation and will no longer be included in the company's consolidatedfinancial statements for the 2019 annual financial report since the date of cancellation.
2.7 Significant changes or adjustments in the company's business, products or services during the reportingperiod
√ Applicable □ Not applicable
In the first 11 months of 2019, Dongfang Precision's main business has a "dual main business" structure: high-end smart equipmentbusiness segment (including "smart packaging equipment" and "outboard machine equipment" business, and "automobile core partsbusiness segment" , The main business is Pride's "power battery system" business.After the sale of Pride at the end of December 2019, the company's overall main business has undergone major changes, and theprevious "dual main business" structure has become focused on the "high-end intelligent professional" main business, and theproducts and services provided have also changed to provide intelligent packaging equipment related products and services, as wellas outboard machine products and related services.
2.8 Main sales customers and main suppliers
The company's main sales customers
| Total sales amount of the top five customers (yuan) | 7,624,070,010.26 |
| The proportion of the total sales of the top five customers to the total annual sales | 76.44% |
| The sales of related parties accounted for the proportion of total annual sales in the sales of the top five customers | 72.46% |
Top 5 customer information of the company
| Serial number | Client's name | Sales (yuan) | % Of total annual sales |
| 1 | Customer One | 7,035,281,416.23 | 70.54% |
| 2 | Customer Two | 234,382,839.09 | 2.35% |
| 3 | Customer Three | 191,309,657.54 | 1.92% |
| 4 | Customer Four | 82,311,942.12 | 0.83% |
| 5 | Customer Five | 80,784,155.28 | 0.81% |
| In total | -- | 7,624,070,010.26 | 76.44% |
Major customers' other information
□ Applicable √ Not applicable
The company's main suppliers
| Total purchase amount of the top five suppliers (yuan) | 6,578,523,590.96 |
| The proportion of the total purchase amount of the top five suppliers to the total annual purchase | 71.71% |
| Proportion of purchases by related parties in the top five suppliers' purchases as a percentage of total annual purchases | 65.42% |
Company Top 5 Supplier Information
| Serial number | Supplier name | Purchase amount (yuan) | Percentage of total annual purchase |
| 1 | Supplier One | 6,001,951,518.81 | 65.42% |
| 2 | Supplier Two | 271,302,082.89 | 2.96% |
| 3 | Supplier Three | 129,880,736.26 | 1.42% |
| 4 | Supplier Four | 91,640,559.19 | 1.00% |
| 5 | Supplier Five | 83,748,693.81 | 0.91% |
| In total | -- | 6,578,523,590.96 | 71.71% |
Other facts about major suppliers
□ Applicable √ Not applicable
3. Cost
unit: yuan
| 2019 | 2018 | YoY increase and decrease | Description of major changes | |
| Sales cost | 414,527,474.88 | 520,723,396.56 | -20.39% | This is mainly due to the consolidation of Beijing Pride's January-November 2019 data and the decrease in Pride's sales expenses this year. |
| Management cost | 365,218,611.72 | 286,222,575.20 | 27.60% | Mainly due to the disposal of the related expenses incurred by Pride and the increase in management costs brought about by business growth this year. |
| Financial cost | -16,869,846.12 | 23,145,620.29 | -172.89% | Mainly due to the increase in interest income this year. |
| R&D cost | 156,654,915.42 | 218,476,516.42 | -28.30% | This is mainly due to the merger of Beijing Pride's January-November 2019 data and the decrease in Pride's research and development expenses this year. |
4.R&D Investment
√ Applicable □ Not applicable
Company R & D investment
| 2019 | 2018 | Change ratio | |
| Number of R&D personnel (person) | 392 | 447 | -12.30% |
| Proportion of R&D personnel | 23.99% | 20.33% | 3.66% |
| R&D investment amount (yuan) | 169,319,720.80 | 229,067,274.61 | -26.08% |
| R&D investment as a percentage of operating income | 1.70% | 3.46% | -1.76% |
| Amount of capitalized R&D investment (yuan) | 12,664,805.38 | 10,590,758.19 | 19.58% |
| Capitalized R&D investment as a percentage of R&D investment | 7.48% | 4.62% | 2.86% |
The reason for the significant change in the proportion of total R & D investment in operating income compared with the previousyear
√ Applicable □ Not applicable
The main reason for the change in the ratio of R & D investment to operating income is that this year, only Pride's January-November2019 data was merged and Pride's research and development expenses decreased.The main reason for the decrease in the number of R & D personnel was that the company transferred Pride's equity during thereporting period and did not include Pride in the number of employees.Reasons for the substantial change in the capitalization rate of R & D investment and its rationality
□ Applicable √ Not applicable
5.Cash flow
unit: yuan
| Item | 2019 | 2018 | YoY increase and decrease |
| Subtotal of cash inflow from operating activities | 5,971,827,830.59 | 5,264,537,409.33 | 13.43% |
| Subtotal of cash outflow from operating activities | 5,690,530,043.58 | 4,542,812,608.21 | 25.26% |
| Net cash flow from operating activities | 281,297,787.01 | 721,724,801.12 | -61.02% |
| Subtotal of cash inflow from investment activities | 4,858,499,596.17 | 3,793,281,802.05 | 28.08% |
| Subtotal of cash outflow from investment activities | 4,736,987,401.92 | 2,948,145,345.71 | 60.68% |
| Net cash flows from investing activities | 121,512,194.25 | 845,136,456.34 | -85.62% |
| Subtotal of cash inflows from financing activities | 362,807,582.84 | 1,423,283,210.38 | -74.51% |
| Subtotal of cash outflows from financing activities | 605,506,468.14 | 1,830,987,393.84 | -66.93% |
| Net cash flow from financing activities | -242,698,885.30 | -407,704,183.46 | 40.47% |
| Net increase in cash and cash equivalents | 168,727,295.04 | 1,158,966,100.91 | -85.44% |
Explanation of the main influencing factors of significant changes in relevant data year-on-year
√ Applicable □ Not applicable
1. The net cash flow generated by the company's operating activities decreased by 61.02%, which was mainly dueto the increase in cash from Pride's procurement expenditure.
2. The net cash flow generated by the company's investment activities decreased by 85.62%, which was mainlydue to the disposal of Pride to recover cash and purchase financial products at the end of the year.
3. The net cash flow generated by the company's financing activities increased by 40.47%, which was mainly dueto the decrease in the bank acceptance deposit.
4. The company's net increase in cash and cash equivalents decreased by 85.44%, mainly due to the increase incash outflows from operating activities and investment outflows.Explanation of the reasons for the significant difference between the net cash flow generated by the company's operating activitiesduring the reporting period and the current year's net profit
√ Applicable □ Not applicable
The main reason for the significant difference between the net cash flow generated by the company’s operatingactivities during the reporting period and the current year’s net profit was the disposal of 100% equity of Prideand the accounting treatment of the performance compensation of the original shareholders of Pride.
III. Non-main business analysis
√ Applicable □ Not applicable
unit: yuan
| Amount | % Of total profit | Description of formation | Is it sustainable | |
| Investment income | 1,384,907,790.71 | 68.78% | It is mainly due to the disposal of 100% equity of Pride and the income generated by the performance compensation of the original shareholders of Pride, the | NO |
| income recognized by the joint venture under the equity method and the income of wealth management products. | ||||
| Changes in fair value gains and losses | -302,415.26 | -0.02% | Mainly due to changes in the fair value of derivative financial assets. | NO |
| Asset impairment | -109,839,858.68 | -5.45% | Mainly due to the acquisition of EDF to form impairment of goodwill accrual and inventory depreciation reserve. | NO |
| Non-operating income | 12,570,847.05 | 0.62% | Mainly due to the acquisition of Tiruna. | NO |
| Non-operating expenses | 8,756,961.53 | 0.43% | Mainly due to Pride's disposal of fixed assets. | NO |
IV. Analysis of assets and liabilities
1.Significant changes in asset composition
The company will implement the new financial instruments standards, new income standards or new lease standards for the first timesince 2019 and adjust and implement the relevant items of the financial statements at the beginning of the year
√ Applicable □ Not applicable
unit: yuan
| End of 2019 | Early 2019 | Increase or | Description of major changes | |||
| Amount | % Of total | Amount | % Of total | |||
| assets | assets | decrease in proportion | ||||
| Money funds | 2,356,703,434.60 | 37.57% | 2,547,345,874.57 | 28.34% | 9.23% | Mainly due to the disposal of 100% equity of Pride. |
| accounts receivable | 597,431,210.02 | 9.52% | 1,496,368,415.86 | 16.65% | -7.13% | Mainly due to the disposal of 100% equity of Pride. |
| stock | 671,432,701.11 | 10.70% | 935,775,074.07 | 10.41% | 0.29% | No major changes |
| Investment real estate | 0.00% | 0.00% | ||||
| Long-term equity investment | 72,372,355.03 | 1.15% | 79,771,169.72 | 0.89% | 0.26% | No major changes |
| Fixed assets | 585,754,900.75 | 9.34% | 685,262,087.53 | 7.63% | 1.71% | No major changes |
| Construction in progress | 4,839,241.48 | 0.08% | 10,480,100.82 | 0.12% | -0.04% | No major changes |
| short-term loan | 117,888,353.14 | 1.88% | 250,525,029.95 | 2.79% | -0.91% | No major changes |
| long-term loan | 224,146,667.48 | 3.57% | 536,358,921.02 | 5.97% | -2.40% | Mainly due to the reclassification of loans due within one year to "non-current liabilities due within one year". |
| Trading financial | 1,164,039,381. | 18.55% | 0.00 | 0.00% | 18.55% | Mainly due to the purchase of bank wealth management products at the end |
| assets | 59 | of the year. | ||||
| bill receivable | 0.00 | 0.00% | 1,835,883,950.01 | 20.43% | -20.43% | Mainly due to the disposal of 100% equity interest in Pride and the reclassification of the balance of bills receivable to receivables financing. |
| Goodwill | 306,633,631.93 | 4.89% | 670,286,756.52 | 7.46% | -2.57% | Mainly due to the disposal of 100% equity of Pride to reduce goodwill and accrued goodwill impairment provision for EDF. |
| Estimated liabilities | 78,650,466.48 | 1.25% | 452,856,804.45 | 5.04% | -3.79% | Mainly due to the disposal of 100% equity of Pride. |
2.Assets and liabilities measured at fair value
√ Applicable □ Not applicable
unit: yuan
| Item | Opening number | Profit and loss from changes in fair value in the current period | Accumulated changes in fair value included in equity | Impairment accrued in the current period | Current purchase amount | Current sales amount | Other changes | Final number |
| Monetary assets | ||||||||
| 1. Transactional financial | 0.00 | 4,442,648,750.00 | 3,279,648,750.00 | 1,163,000,000.00 | ||||
| assets (excluding derivative financial assets) | ||||||||
| 2. Derivative financial assets | 800,160.93 | -302,415.26 | 541,635.92 | 1,039,381.59 | ||||
| Subtotal of financial assets | 800,160.93 | -302,415.26 | 4,443,190,385.92 | 3,279,648,750.00 | 1,164,039,381.59 | |||
| In total | 800,160.93 | -302,415.26 | 4,443,190,385.92 | 3,279,648,750.00 | 1,164,039,381.59 | |||
| Financial liabilities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Other changesNot applicableDuring the reporting period, has the company's main asset measurement attributes changed significantly?
□ YES √ NO
3.At the end of the reporting period, asset rights are restricted
| Item | Book value at the end of the period | Restricted cause |
| Money funds | 129,978,697.21 | Margin |
| Fixed assets | 11,981,751.80 | Loan mortgage |
| In total | 141,960,449.01 |
V. Investment status analysis
1.Overall situation
√ Applicable □ Not applicable
| Investment during the reporting period (yuan) | Investment amount in the same period of last year (yuan) | Variation |
| 123,995,066.16 | 35,840,000.00 | 245.97% |
2.Significant equity investment during the reporting period
□ Applicable √ Not applicable
3.The major non-equity investments in progress during the reporting period
□ Applicable √ Not applicable
4.Financial assets measured at fair value
√ Applicable □ Not applicable
unit: yuan
| Asset type | Initial investment cost | Profit and loss from changes in fair value in the current period | Accumulated changes in fair value included in equity | Amount purchased during the reporting period | Amount sold during the reporting period | Cumulative investment income | Amount at the end of the period | Sources of funds |
| Financial derivatives | 800,160.93 | -302,415.26 | 4,443,190,385.92 | 3,279,648,750.00 | 1,164,039,381.59 | private capital | ||
| In total | 800,160.93 | -302,415.26 | 0.00 | 4,443,190,385.92 | 3,279,648,750.00 | 0.00 | 1,164,039,381.59 | -- |
5.Use of raised funds
√ Applicable □ Not applicable
5.1 Overall use of raised funds
√ Applicable □ Not applicable
Unit: ten thousand yuan
| Year raised | Ways to raise | Total funds raised | The total amount of raised funds used in this period | The accumulated use of raised funds | Total funds raised during the reporting period for changes in use | Accumulated total amount of funds raised for changing purposes | Proportion of total funds raised for cumulative changes in use | The total amount of funds raised has not been used | The purpose and destination of the raised funds have not been used | The amount of funds raised after being idle for more than two years |
| 2011 | Initial public offering | 49,200.06 | 1,077.82 | 51,776.39 | 3,683.48 | 7.49% | 0 | Not applicable | 0 | |
| 2016 | Non-public offering | 48,699.47 | 1.57 | 49,674.6 | 20,356.56 | 40.81% | 0 | Not applicable | 0 | |
| 2017 | Reorganization of supporting shares to raise | 283,616.53 | 0 | 187,902.15 | 110,623.17 | (1) The company uses part of the idle raised funds to | 110,623.17 |
| funds | purchase capital-guaranteed wealth management products within the scope authorized by the board of directors. (2) In addition to the matters mentioned above, the remaining unused raised funds are deposited in a special account for raised funds. (3) The amount of raised funds received from Beijing Pride New Energy Battery |
| Technology Co., Ltd. (hereinafter referred to as “Pride”) was 61.8841 million yuan this year, and the net interest received from Pride's returned funds was 6.0403 million yuan, stored in a special account for raised funds. | ||||||||||
| In total | -- | 381,516.06 | 1,079.39 | 289,353.14 | 0 | 24,040.04 | 6.30% | 110,623.17 | -- | 110,623.17 |
| Description of the overall use of raised funds | ||||||||||
| 1. The initial public offering of shares as of December 31, 2019, the cumulative amount of funds raised by the company's raised funds was 517.7639 million yuan, of which: (1) The amount of accumulated use of raised funds in the previous year was 506.9857 million yuan, of which: the amount of the company's initial investment of raised funds with its own funds before the replacement of the raised funds was 63.3309 million yuan; In addition to the replacement of the initial investment of self-owned funds after the raised funds are in place, the | ||||||||||
5.2 Raised capital commitment project
√ Applicable □ Not applicable
Unit: ten thousand yuan
previous year was 1940.9055 million yuan; (2) Received in Beijing this year The amount of raised funds returned by Pride New Energy Battery Technology Co., Ltd. (hereinafter referred to as“Pride”) was 61.8841 million yuan.. As of December 31, 2019, the net amount of bank deposit interest received by the company after deduction of bank handling fees, etc. Was 79.2128 millionyuan, and the net interest received from Praid returned by the raised funds was 6.0403 million yuan, and the balance of the raised funds It was 1106.2317 million yuan.For details of the company ’s use of raised funds, please refer to the “Special Report on the Storage and Use of Raised Funds for 2019” disclosed by the company and the 2019 Annual Reportand the “Guangdong Dongfang Precision Technology” issued by Lixin Certified Public Accountants (Special General Partnership) "Assessment Report on the Annual Deposit and Use of RaisedFunds as of December 31, 2019."
Commitment to investmentprojects and investment funds
direction
| Commitment to investment projects and investment funds direction | Whether the item has been changed (including some changes) | Raised funds promised total investment | Adjusted total investment (1) | Amount invested during the reporting period | Cumulative investment amount as of the end of the period (2) | Investment progress as of the end of the period (3) = (2) / (1) | The date when the project reaches the intended usable status | Benefits achieved during the reporting period | Whether the expected benefits are achieved | Whether the project feasibility has changed significantly |
| Commitment to investment projects | ||||||||||
| Corrugated box printing machinery and its complete | YES | 37,100 | 40,421.25 | 42,751.34 | 105.76% | November | Not | NO | ||
| equipment project | 1, 2014 | applicable | ||||||||
| R&D Center Construction Project | YES | 1,400 | 180.25 | 180.25 | 100.00% | June 1, 2015 | Not applicable | NO | ||
| Information construction project | NO | 1,847 | 1,847 | 1,015.42 | 54.98% | June 1, 2017 | Not applicable | NO | ||
| Technical transformation project of regional marketing center | YES | 2,200 | 98.5 | 98.5 | 100.00% | June 1, 2015 | Not applicable | NO | ||
| Supplementary liquidity | YES | 48,699.47 | 28,342.91 | 29,318.04 | 103.44% | Not applicable | NO | |||
| Repayment of bank loans | YES | 20,356.56 | 20,356.56 | 100.00% | Not applicable | NO | ||||
| Pay cash consideration | NO | 180,500 | 180,500 | 180,500 | 100.00% | Not applicable | NO | |||
| Pay intermediary fees | NO | 9,500 | 9,500 | 7,402.15 | 77.92% | Not applicable | NO |
| Pride Liyang Base New Energy Vehicle Battery R&D and Industrialization Project | NO | 100,000 | 100,000 | 0 | 0.00% | Not applicable | NO | |||
| Subtotal of committed investment projects | -- | 381,246.47 | 381,246.47 | 281,622.26 | -- | -- | -- | -- | ||
| Over-raised funds | ||||||||||
| Payment of the deposit for the purchase of a 60% equity M& A loan from Fosberg (Italy) | NO | |||||||||
| Supplementary liquidity (if any) | -- | 7,730.88 | -- | -- | -- | -- | ||||
| Sub-total raised funds | -- | 7,730.88 | -- | -- | -- | -- | ||||
| In total | -- | 381,246.47 | 381,246.47 | 0 | 289,353.14 | -- | -- | 0 | -- | -- |
| The situation and reasons for not reaching the planned progress or expected benefits (by specific projects) | NONE | |||||||||
| Description of major changes in project feasibility | NONE |
| The amount, purpose and use progress of over-raised funds | Applicable |
| The company's initial public offering of shares actually raised net proceeds of 492,000,624.08 yuan, of which excess raised funds were 66,530,624.08 yuan. On February 21, 2014, the 11th meeting of the second session of the Board of Directors and the 8th meeting of the second session of the Supervisory Committee reviewed and approved the "Proposal on Using Super Raised Funds to Provide Overseas Guaranteed Loans for Payment of Bank Margins for Overseas Wholly-owned Subsidiaries”. In order to smoothly promote the company’s acquisition of 60% of the Italian Fosberg company ’s shares, expand the company ’s merger and acquisition funding sources, and reduce corporate financing, the board of directors and the board of supervisors agreed that the company is an overseas wholly-owned subsidiary, Dong Fang Precision (Netherlands) Company Co?peratief UA provides guarantees (internal guarantee and external loans) and uses over-raised funds of 66.5306 million yuan to pay bank deposits. The above matters were approved at the first extraordinary general meeting of shareholders in 2014. In March 2018, the pledge was released due to the expiration of the domestic insurance contract and the repayment of the loan by the company. The company held the twenty-third meeting of the third board of directors and the seventeenth meeting of the third board of supervisors on April 25, 2018, and reviewed and approved the "Proposal on the Permanent Replenishment of Liquidity Funds Using Over-raised Funds." The over-raised fund of public offering of shares was 66.5306 million yuan and the interest accumulated from it was 10.7782 million yuan, and the total amount of 77.3088 million yuan was used for permanent replenishment of working capital, which was approved by the resolution of the 2017 Annual General Meeting of Shareholders held on May 17, 2018. | |
| Changes in the implementation location of investment projects | Not applicable |
| with raised funds | |
| The adjustment of the implementation method of the fund-raising investment project | Not applicable |
| Prophase investment and replacement of investment projects with raised funds | Applicable |
| (1) The initial public offering of common stock raised funds in order to ensure the smooth progress of the raised capital investment project, the company invested in the corrugated box printing machinery and its complete equipment projects in advance with self-raised funds. As of August 31, 2011, a total of 63.3309 million yuan was invested. On September 21, 2011, the ninth meeting of the first board of directors of the company reviewed and approved the "Proposal on Using Raised Funds to Replace Self-Funded Funds That Have Been Pre-invested in Investment Projects." and invested self-raised funds of 63.3309 million yuan. On September 27, 2011, the company has completed the replacement. (2) In 2017, the non-public offering of shares raised funds. On September 25, 2017, the company held the 17th meeting of the third board of directors and reviewed and approved the "Proposal on the Use of Raised Funds to Replace Self-funded Funds that Have Been Pre-invested in the Raised Investment Project", Agreed that the company use the raised capital of 61.8841 million yuan to replace the self-raised funds that have been previously invested in the investment project, and the replacement was completed on September 28, 2017. | |
| Use idle raised funds to temporarily supplement working capital | Not applicable |
| The amount and reason of the balance of funds raised during project implementation | Applicable |
| The company's initial public offering raised funds to invest in four projects, namely "corrugated box printing machinery and its complete equipment project", "R & D center construction project", "informatization construction project" and "regional marketing center technical transformation project", of which Under the "Information Construction Project", the SAP information system was fully implemented. By June 2017, it had passed the operation test of the SAP information system after it went online, and reached the originally scheduled usable state. Because the project involves many aspects and links such as the company's finances, operations, human resources, and IT, the implementation period is long, and the market environment has also undergone major changes. The company's professional team has continuously strengthened the project through reasonable scheduling and optimized configuration. The control, supervision and management of expenses have reasonably reduced the cost of the project, thus resulting in savings in project capital investment. In July 2017, the fifteenth meeting of the third board of directors of the company and the eleventh meeting of the third board of supervisors reviewed and approved the "Proposal on the Closing of Initial Public Offering Projects and the Use of Surplus Raised Funds to Permanently Replenish Working Capital , The surplus raised funds and interest of 15.5563 million yuan for the initial public offering will be used to permanently supplement working capital. | |
| The purpose and destination of the unused raised funds | The part of the unused raised funds of the non-public offering of funds in 2017 was used to purchase stable, low-risk, high-liquidity financial products within 12 months. As of December 31, 2019, all purchased wealth management products have expired, and the remaining unused raised funds are still deposited in the special account for raised funds. |
| Problems or other situations in the use and disclosure of raised funds | None |
5.3 Raised funds to change projects
√ Applicable □ Not applicable
Unit: ten thousand yuan
| Changed items | Corresponding original commitment project | The total amount of funds to be raised by the project after the change (1) | Actual investment amount during the reporting period | As of the end of the period, the actual cumulative investment amount (2) | Investment progress as of the end of the period (3) = (2) / (1) | The date when the project reaches the intended usable status | Benefits achieved during the reporting period | Whether the expected benefits are achieved | Whether the feasibility of the changed project has changed significantly |
| Corrugated box printing machinery and its complete equipment project | Regional marketing center technical renovation project/R &D center construction project | 40,421.25 | 0 | 42,751.34 | 105.76% | November 1, 2014 | Not applicable | NO | |
| Repayment of bank loan | Supplementary liquidity | 20,356.56 | 0 | 20,356.56 | 100.00% | Not applicable | NO | ||
| In total | -- | 60,777.81 | 0 | 63,107.9 | -- | -- | 0 | -- | -- |
| Explanation of reasons for changes, decision-making procedures and information disclosure (by specific items) | 1. IPO raised funds change project One of the company’s initial public offerings, one of the fundraising projects, the Corrugated Box Printing Machinery and Complete Equipment Project, mainly invested in the purchase of the company’s new factory land, plant construction and decoration, and the purchase of fixed assets such as electromechanical power equipment and mechanical processing equipment. The new factory there has been ready for use on November 1, 2014. The project has a long construction period, considering the increase in construction costs such as labor and civil construction during the construction period, the price increase due to the selection of electromechanical power equipment and mechanical processing equipment, and considering the improvement of It is estimated that the total amount of the project payable and the warranty deposit, etc., will be approximately RMB 420 million, which exceeds the original investment promised by the funds raised. The company's first listing and investment project "Regional Marketing Center Technical Transformation Project" aims to serve the expansion of the company's production capacity and the development of domestic and foreign markets after the "corrugated box printing machinery and its complete equipment project" is put into production. After the company's listing, it gradually builds a perfect domestic Sales network, and through the acquisition of Italian Fosber Group and Italian EDF company to further deepen the international marketing network layout, including Europe and the Americas, can meet the future product sales volume and sales area expansion. The company's first listing and investment project "R & D Center Construction Project" aims to achieve "upgrading of existing products and strengthening the research and development of complete sets of CNC servo electromechanical equipment technology through investment in infrastructure to ensure the company's leading position in the industry." Strive for the |
| This change in the use of funds raised has been approved by the company ’s 35th meeting of the second board of directors and the 2016 second extraordinary general meeting of shareholders. | |
| The situation and reasons for not reaching the planned progress or expected benefits (by specific projects) | Not applicable |
| Explanation of major changes in the project feasibility after the change | Not applicable |
During the reporting period of the company, there was no change in the project of raised funds.
VI. Major asset and equity sale
1.Sales of major assets
□ Applicable √ Not applicable
The company did not sell any significant assets during the reporting period.
2.Sale of major equity
√ Applicable □ Not applicable
| Counterparty | Sold equity | Sale day | Transaction price (ten thousand yuan) | Net profit contributed by the equity to the listed company from the beginning of the current period to the date of sale (ten thousand yuan) | The impact of the sale on the company | The proportion of the net profit contributed by the sale of equity to the listed company in the total net profit | Equity sale pricing principles | Whether it is a connected transaction | Relationship with counterparties | Whether the equity involved has been transferred | Whether it is implemented as planned, if it is not implemented as planned, the reasons and the measures the company has taken should be explained | Disclosure date | Disclosure index |
| Tianjin CDH Ruixiang Equity Investment Fund Partnership (Limited Partnership), Tianjin CDH Ruipu Equity Investment Fund Partnership (Limited Partnership) | Pride 100% equity | December , 25, 2019 | 150,000 | 31,081.34 | The implementation of the package deal increased the company's total profit in 2019 by approximately 1.355 billion yuan (including the proceeds from the sale of Pride and the proceeds from the cancellation of performance compensation shares) | 73.70% | Based on the equity value of the 100% equity of Pride assessed by the assessment agency it has entrusted with securities business qualification on July 31, 2019, it is determined to sell the 100% equity of Pride at RMB 1.5 billion; | NO | Not applicable | YES | Not applicable | December, 26, 2019 | Juchao Information Network |
VII. Analysis of major holding companies
√ Applicable □ Not applicable
Major subsidiaries and shareholding companies that affect more than 10% of the company's net profit
unit: yuan
| Company name | Company type | Company type | Registered capital | Total assets | Net assets | Operating income | Operating profit | Net profit |
| Fosber S.p.A. | Subsidiary | R&D, processing, manufacturing, sales: corrugated cardboard production line and accessories, and provide after-sales service. | 1.56 million euros | 1,239,337,572.33 | 492,141,725.74 | 1,873,185,800.77 | 222,258,167.45 | 173,792,809.89 |
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
| Company name | Effect of acquisition and disposal of subsidiaries during the reporting period | Impact on overall production, operation and performance |
| Pride | equity transfer | The implementation of a package transaction increased the company's total profit in 2019 by approximately 1.355 billion yuan (including the proceeds from |
Description of major holding companies
VIII. The situation of the structured main body controlled by the company
□ Applicable √ Not applicable
IX. Prospects for the company's future development
1. Industry pattern and trends
1.1 Industry pattern and company industry status
1.1.1 Industry development history and pattern
More than 160 years ago, the British discovered the corrugated structure and invented corrugatedpaper packaging. After more than half a century of perfection, the scientific development of thecorrugated structure has become more perfect and mature, and finally occupied half of thecommodity packaging.China's corrugated box industry started late, and the use of corrugated boxes began to be promotedin 1954, 40 years later than Japan and 60 years later than the United States. At this stage, China'stechnical starting point was low. At the beginning, it used the single machine used in Japan in theearly days. All the processes were connected by hand, and there was no pipeline operation. In 1975,Beijing Carton Factory took the lead in introducing the first automatic corrugated paper productionline in China-D3 type double corrugated board production line to Uchida Manufacturing Co., Ltd.In 1982, the Capital Aerospace Machinery Company affiliated to the China Launch VehicleTechnology Research Institute successfully developed China's first 1.2-meter corrugated cardboardautomated production line, and China's corrugated box industry began to take off.Since the reform and opening up, China's corrugated box industry has developed rapidly, showing
great vitality, and the output value created by it has accounted for about 85% of the overall outputvalue of China's paper packaging industry. The growth rate is also the highest among all countries.At present, the market volume has surpassed that of the United States, becoming the world's largestcorrugated box market.Corrugated cardboard packaging is widely used in downstream consumer industries such as homeappliances, electronic products, IT, food and beverage, books, daily chemicals, textiles and logisticsexpress companies.With the rapid development of the global economy, the demand for commodity packaging isgradually increasing, and the demand is driving development. Corrugated carton factories continueto increase capital investment to transform backward production equipment and improve the qualityof corrugated carton to meet consumer demand.In terms of products, the corrugated board production line at the upstream of the industrial chainhad global sales of approximately RMB 15 billion in 2018, and its main sales areas are concentratedin Europe, America and the Asia-Pacific region. Among them, the income in Europe and America isabout 7.7 billion yuan, accounting for 51%; the revenue in the Asia-Pacific region is about 6.6billion yuan, accounting for 44%; the other regions are 600 million yuan, accounting for 4%. Froma global perspective, the corrugated board production line industry is highly concentrated. The mainbrands (ranked by revenue) are German BHS, Italian Fosber Group (a wholly-owned subsidiary ofDongfang Precision), and Marquip (a wholly-owned subsidiary of the American Barry-Wehmillergroup) .The corrugated box printing complete production line in the middle of the industry chain has aglobal market size of about 30 billion yuan in 2018, of which 50% are mid- to high-end products.Among them, the Asian market is about 15 billion yuan, accounting for 50%; the US market isabout 7.5 billion yuan, accounting for 25%; the European and Japanese markets are about 7.5billion yuan, accounting for 25%. From a global perspective, the concentration of the industry islow, even if the industry leader Swiss Bobst has a market share of less than 10%. The major brandmanufacturers in the industry (ranked by revenue) include Bobst (Switzerland), Gopfert (Germany),Dongfang Precision, and Ward (a wholly-owned subsidiary of the American Barry-Wehmiller
Group).
1.1 2 Industry competition landscape and company industry statusA. Corrugated board production line market segment: Dongfang Precision subsidiary FosberGroup ranks second in global market shareIn the field of corrugated board production lines, Fosber Group is an important supplier of high-endcorrugated board production lines in the European and American markets. It is one of the world'stwo largest companies in the field of high-speed wide-width corrugated board production lines, andits market share in the world At around 30%. Clients cover well-known large-scale packagingcompanies such as International Paper and Smurfit Kappa Turnhout. They are important globalhigh-end corrugated cardboard production line technology promoters and innovators, and have avery high reputation and influence in the global market.Fosber Group's main competitor and benchmarking company in the global corrugated boardproduction line industry market is German BHS. BHS has a history of more than 60 years incorrugated machinery. Through years of development and accumulation, BHS has established areliable brand value and deep customer relationships in the field of corrugated cardboard productionlines. At the same time, relying on its long-term accumulation, it occupies about 35% of the marketshare. According to the financial statements publicly disclosed by BHS, the company's revenue in2018 was 575 million euros and its net profit was 30 million euros.Comparative analysis of Fosber Group and benchmarking competitor BHS:
a) In recent years, Fosber Group has grown faster than BHSAfter being acquired by Dongfang Precision in 2014, Fosber Group has achieved rapid growth inrevenue scale and profitability through strategic and financial support. Its growth rate exceededBHS in 2017-2018.b) Higher operational efficiency and stronger cost control capabilitiesWith the establishment and development of Fosber Asia, the integration of the Fosber Group'ssupply chain system in China and emerging Asian markets will be further improved, which will bebeneficial to cost control, customer collaboration and supply chain collaboration.
c) R&D strength is not too muchIn terms of product and technical strength, Fosber Group has a strong global R & D team, andthrough efficient and flexible R&D management and accurate market positioning, it hascontinuously reduced the difference between BHS and the product library layout. At present, bothparties can provide the market with the most advanced high-speed wide-width corrugated cardboardmanufacturing equipment, each with advantages in product quality and efficiency.d) Fosber Group continues to improve the layout of the industrial chain and enhance itscomprehensive competitivenessIn 2019, the Fosber Group completed the acquisition of the Spanish corrugated roll manufacturerTiruna Group, the core component supplier of the corrugated board production line; through thisacquisition, the Fosber Group has provided a solid guarantee for the supply of key components forits corrugated board production line business.In early 2020, Fosber Group set up a subsidiary to establish a new holding subsidiary QuantumCorrugated S.r.l., and used it as the main body of the acquisition to complete the acquisition ofrelated business assets of the old Italian corrugated board manufacturer Agnati. After thecompletion of the acquisition, Fosber Group holds a 60% stake in Quantum Corrugated S.r.l.Agnati's history in the corrugated board production line industry can be traced back to the 1930s,and has more than 90 years of development so far. As a pioneer in the international industry, Agnatihas pioneered many landmark technologies and products in the design and manufacture ofcorrugated board production lines, and has cumulatively sold and installed more than 3,000 productequipment in 82 countries across five continents; Quantum high-speed intelligent corrugated boardproduction line series products have been widely praised by customers in the market. The uniquedesign of Quantum's high-speed intelligent corrugated cardboard production line is very suitable forthe embedding of digital printing technology, and it is very popular with digital printing packagingcustomers.Through the above layout, Fosber Group not only has the supply and production capacity of corespare parts corrugated rolls for corrugated cardboard production line equipment through theacquisition of Tiruna Group, but also has acquired the world-leading and more suitable for
customers by acquiring Agnati related business and assets. The ability of corrugated boardproduction line combined with digital printing technology. The Fosber Group's layout in the field ofcorrugated board production lines continues to improve, and its comprehensive competitiveness isfurther enhanced.e) Excellent service ability and technology application of Industry 4.0Another major advantage of Fosber Group is its complete Industry 4.0 system. Through in-depthpractice of Industry 4.0 technology, it greatly improves the production efficiency and flexibility ofcustomers. The Fosber brand's technical support services are well-known and unique in theindustry.B. Corrugated box printing equipment market segment: Dongfang Precision (China) is the"invisible champion" of the domestic industry and has the strength to compete with the globalindustry leadersCompared with foreign industries, the corrugated box printing equipment industry in China startedlate. Most enterprises lacked technological innovation and relied on imitation. The corrugated boxprinting equipment produced was of low quality. Therefore, although the domestic corrugated boxprinting equipment industry has a large number of enterprises, it is mostly small and medium-sizedenterprises with single product functions and low technical level. It mainly meets the overallindustry status of downstream small and medium-sized corrugated box manufacturers.The only domestic large-scale and high-tech corrugated box printing equipment manufacturers areonly a few such as Dongfang Precision and Taiwan Changsheng. They focus on the developmentand production of high-end corrugated box printing equipment. The product quality is ahead ofdomestic counterparts and meets international At the same level, we have exported medium andhigh-end corrugated box printing equipment in batches to mature markets such as Europe and theUnited States, and the price is more competitive, gradually leading China's corrugated box printingequipment manufacturers to move closer to the international advanced level.Among them, Dongfang Precision relies on the advantages of global resource coordination, withleading design concepts and overall R&D strength, standardized whole-process quality managementsystem, leading production process level and system integration capabilities, it can provide
personalized/flexible/specialized production service, the most complete product echelon andproduct chain in the domestic industry, the brand advantage and first-mover market advantage ofA-share listed companies, customer-centric full-process technical support and after-sales servicesystem, etc, so as to become the "invisible champion" in the corrugated box printing equipmentindustry.Globally, Dongfang Precision's main competitor and benchmarking company in the field ofcorrugated box printing equipment is Bobst, Switzerland. Bobst is the world's largest processingequipment and service provider for substrate processing, bottom-printing slotting die-cuttingmachine, printing slotting sticking box linkage line, and carton folder-gluing machine, with ahistory of more than 120 years. Most of its products are printing-slotting die-cutting machines andprinting-slotting stick-box linkage line products suitable for the European and American markets.Its main markets are in Europe and the United States, and a small amount in Asia. Its high-endproduct positioning and global sales network have laid a solid foundation for occupying the topposition in the global industry.
The comparison analysis of the products that Dongfang Precision and international competitors
can provide is as follows:
It can be seen that in the subdivided field of corrugated box printing equipment, Dongfang Precisioncovers the main product types, such as the upper printing type, the lower printing type, thepre-feeder, the gluer, the stacker, and the stacking machine. It has strong design, production andsales capabilities. As a business leader, Swiss Bobst also specifically provides the ability to providemajor products in the value chain. The main products of other competitors are concentrated in
individual links of the value chain.Comparative analysis of the business of Dongfang Precision Corrugated Box Printing Equipmentand its benchmark competitor Bobst:
a. In recent years, in the field of corrugated box printing equipment industry, especially in theinternational market, the influence of Dongfang Precision brand has gradually increased, and the gapwith Bobst and other first-tier European and American brands is rapidly narrowing. At the same time,Dongfang Precision depends on the domestic complete supply chain system and efficient operationmanagement, its product profit margin far exceeds other competitors in the same industry.b. Compared with its international counterparts, Dongfang Precision's product advantage is that thecompany's printing slotting die cutting machine and printing slotting sticking box linkage line havecomplete specifications, including down-print products suitable for markets in Europe, America, andJapan. At the same time, it also includes print-on products suitable for the Asian market. DongfangPrecision can provide more complete product types and product lines, such as: the productspecifications of the printing machine, Dongfang Precision can provide 26 different sizes (from 6 *18 to 25 * 40) of machine products, while Bobst can only provide 2 Specifications (6 * 18 and 8 * 21respectively). International competitors have provided lower-print products suitable for markets inEurope, America, and Japan, but lacked upper-print products suitable for Asian markets.c. Dongfang Precision was established in 1996, compared with Bobst's 120 years of development, itis still in its infancy. In spite of this, Dongfang Precision's R & D strength has been closelyfollowing the first-line European and American manufacturers. Its high-end corrugated cardboardprinting and slotting die-cutting equipment has been dominant in the domestic market and has a largeleading advantage. Through high-quality stability and high output capacity, it has been graduallyaccepted by European and American overseas customers.
1.2 Industry Development Trends and Opportunities
1.2.1 Multiple factors contributed to the growth of the corrugated box industry, which ismainly driven by the express delivery industry.Although the current supply and demand in the paper-making industry is basically balanced, the
development of market segments is still uneven, and structural gaps remain. According to thestatistics of the China Paper Association, in 2018, national total output of boxboard and corrugatedbase paper was 42.5 million tons, and the total consumption was 45.58 million tons, with a gap ofnearly 3.08 million tons.From 2009 to 2018, the average annual growth rate of national cardboard production was 2.42%,and that rate for consumption was 2.93%. From 2009 to 2018, the average annual growth rate ofnational corrugated base paper production was 2.30%, and that rate for consumption was 2.59% . Inthe past 10 years, the annual gap between the two has reached 1.11 million tons. This marketsegment is strong in demand but witnesses a gap between supply and demand currently.Benefiting from the macroeconomic prosperity, the increase in per capita consumption, thedevelopment of the express delivery industry and the government’s preferential policies, China'scorrugated packaging industry will continue to expand in its scale.In terms of per capita consumption, compared with countries such as Japan and the UnitedStates, that figure for corrugated paper packaging in China is still relatively small. Accordingto the data in 2017, the per capita consumption of corrugated paper packaging in China is 50.8square meters per person, compared with 108.5 square meters per person in the United States and
110.6 square meters per person in Japan. That figure in China has a broad space for improvement,which has the potential to be almost doubled.
Comparison of Per Capita Consumption of Corrugated Packaging
From 2012 to 2017 (square meters / person)
Data source: International Corrugated Case Association (ICCA), Wind Consulting
China's online consumption habits are gradually maturing, and the growth of the expressdelivery industry is an important increase in the corrugated packaging industry. According tothe data of "China Paper", in 2018, the top three downstream areas of corrugated packaging inChina were electronic products (accounting for 26.0%), beverages (accounting for 21.2%), food(accounting for 20.3%); express industry Currently only 13%.The domestic health security incident in 2020 has accelerated the development of many fields, andonline retail is a very representative field. With the rapid development of emerging consumptionmodels, China's express delivery industry has also entered a period of rapid development.According to data from the State Post Bureau, China's express delivery volume exceeded 40 billionin 2017; China's express delivery volume exceeded 50 billion in 2018; in 2019, the nationwideexpress delivery service business volume totaled 63.52 billion, a year-on-year increase of 25.3%.
2008-2019 National Express Service Enterprises Business Volume and Growth
Data source: State Post BureauAccording to the "13th Five-Year" development indicators of the express delivery industry, China'sexpress delivery volume will reach the goal of 75 billion pieces in 2020, and the express deliveryper capita will increase from 0.01 in 2000 to about 50 pieces in 2020. The average compoundgrowth rate reached 38.5%.
The rapid development of China's express delivery industry has prompted the market size of theexpress packaging industry to continue to rise. In 2018, the express corrugated packaging marketreached 33 billion yuan.
2013-2018 China Express Corrugated Packaging Market Size and Growth
Data source: China Paper AssociationUnder the background of consumption upgrade, industrial upgrade drive and service industryleadership, with the increase in the richness of express service application scenarios, the deepeningof the depth of embedded production and life, and the expansion of the industry involved, theexpress industry has great potential and space for development. According to the forecast of theProspective Industry Research Institute, the scale of China's express delivery corrugated papermarket will continue to increase in 2020-2025, and is expected to reach 86.4 billion yuan in 2025.In terms of government policy, policies such as the “plastic restriction order” are encouraged toencourage the development of environmentally friendly and recyclable packaging materials. ,Corrugated packaging products contain 93% recyclable materials at the same time. Corrugatedpackaging products are light-weight, recyclable, and easily degradable. They are considered "greenpackaging", which is in line with China's low-carbon circular economy and the goals of energysaving and emission reduction.
1.2.2 Integration of corrugated carton packaging industry, accelerating the upgrading of
packaging plant equipmentAffected by the low entry threshold and limited service radius of the packaging industry, most smalland medium-sized packaging factories have scattered production capacity in the industry and lowmarket concentration. In recent years, due to factors such as supply-side reforms, stricterenvironmental protection, and high labor and raw material costs, SMEs in the corrugated boxpackaging industry have accelerated their liquidation, and the market share of large enterprises hasincreased. The number of enterprises above designated size in the paper and cardboard containermanufacturing industry (industrial corporations with an annual operating income of more than 20million) decreased from 2,696 in 2013 to 2,391 in 2018, and the industry consolidation trend isobvious.At the same time, since 2016, the capacity utilization rate of the company's product downstreamcustomer industry leading companies (Jiulong Paper, Shanying Paper, etc.) has continued toincrease to more than 90%, and market share has actually accelerated to concentrate on leadingcompanies. However, compared with the market share of CR5 of 40% to 70% in Europe and theUnited States and other countries, the domestic corrugated box factory industry CR5 is less than10%, and there is still much room for improvement in the concentration.
2017 CR5 international comparison of corrugated packaging industry
Data source: Frost & Sullivan, Wind Consulting
With the tightening of domestic environmental protection policies, rising labor costs, thedevelopment of e-commerce, and the continuous improvement of manufacturers' automation levels,end customers have placed increasingly higher requirements on the quality, delivery speed, andcost-effectiveness of corrugated packaging products. Large-scale carton factories prefer to purchasemedium-to-high-end corrugated cardboard intelligent packaging production lines based onconsiderations such as high efficiency, high quality, cost reduction, environmental protection andenergy saving. Market demand will promote the upgrading of industry technology and equipment,and accelerate the integration of the industry. This trend will be further transmitted to corrugatedboard manufacturing equipment and corrugated board printing equipment, accelerating the furtherincrease of industry concentration in the equipment industry, and eliminating outdated equipmentmanufacturers with low technological content and low production efficiency.
1.2.3 Accelerate the implementation of intelligent manufacturing and lead the transformationof manufacturing serviceThe intelligent manufacturing industry chain covers intelligent equipment (robots, CNC machinetools, service robots, other automation equipment), industrial Internet (machine vision, sensors,RFID, industrial Ethernet), industrial software (ERP/MES/DCS, etc.), 3D printing and automaticsystem integration and production line integration that organically combine the above links.Intelligent manufacturing equipment is the main carrier of intelligent manufacturing. The industrialscale, industrial robots, 3D printing equipment, CNC machine tools, intelligent control systems,sensors and other major industries involved in intelligent manufacturing equipment have achievedrapid growth in industrial scale.From 2010 to 2018, China's smart manufacturing equipment industry maintained a relatively rapidgrowth rate. In 2018, the output value of the smart manufacturing equipment industry wasapproximately 1,748.011 billion yuan, a year-on-year increase of 16.55%.
2010-2018 China Smart Manufacturing Equipment Industry Output Value Scale Comparison
Source: Prospective Industry Research InstituteWith the accelerated penetration of Internet technology and ideas, manufacturing companies havebegun to promote multi-faceted transformations such as business models and organizationalmethods. At the same time, in the face of the urgent needs of smart manufacturing development andmarket space, domestic companies in various fields have entered the field of system solutions.At the same time, intelligent manufacturing runs through the entire process of productmanufacturing. Downstream customers can not only obtain personalized customized products, butalso participate in them from the product design stage. At the same time, based on the Internetintelligent monitoring technology, the equipment provider can remotely monitor the operation statusof the equipment during the operation of the machine, collect real-time machine operation andproduction related data, and then automatically analyze the collected machine operation data toachieve remote diagnosis and automatic production planning and management equipmentmaintenance and other functions, to achieve the replacement of traditional manual production linemaintenance. Intelligent manufacturing producers not only provide products or "products +additional services", but also provide a package of "product service packages", the role of which haschanged from a product provider to a service provider.
2. Company development strategy
2.1 Vision
The company's business purpose: committed to becoming the world's leading provider of integrated
solutions for intelligent packaging equipment and high-end core parts suppliers; with the mission ofbecoming an industry group with high influence, customer trust, shareholder trust, and employeerespect in its field; adhering to the business philosophy of "integrity, innovation, excellence", toachieve a win-win situation for customers, shareholders, employees and society.
2.2 Development strategy
The transformation and upgrading of enterprises has become a key link for the Chinese economy togo through the old cycle and enter a new cycle to achieve a stable recovery. The company conformsto the development trend of the times, actively implements strategic transformation andmanagement reform measures, adopts an endogenous + epitaxial integration method, continuouslystrengthens overall planning and prospective deployment, and completes the whole industry of"smart packaging equipment" globally The strategic layout of the chain has realized the globalallocation of group resources. At the same time, the company is actively advancing the direction ofthe new infrastructure and service manufacturing to build an industrial ecological closed loop in theIntelligent Manufacturing Industry 4.0, and continues to explore the upgrade path of China'smanufacturing industry from mid-end to high-end.According to the development plan in the third five-year strategic development period (2018 ~2022), the company will use 2020 as a new starting point, adhere to the main business developmentstrategy of focusing on "high-end intelligent equipment", and further promote "synergy","Extension" and "globalization" development strategies, strengthen, refine, and enlarge the existingmain business, at the same time, based on China's global vision, deepen resource allocation, andgradually extend the company's high-end intelligent business equipment business to the entireindustry chain , And then realize the strategic transformation from traditional manufacturingenterprises to manufacturing service and innovative manufacturing enterprises.
3. Business plan
3.1Take the intelligent packaging equipment sector as the core, strengthen, refine and enlargethe existing main business
3.1.1 Business model, overall solution
In terms of business model, from providing "products" to laying out an "industrial chain", frommanufacturing a single device to providing one-stop procurement services for complete sets ofequipment, the company unswervingly follows the development direction of intelligentmanufacturing and Industry 4.0 for customers and provides a "smart packaging equipment" overallsolution to lead the intelligent development of the entire industry.Dongfang Precision Corrugated Box Printing Complete Production Line Business: In the future, wewill continue to increase the research and development and promotion of new products such ashigh-end and intelligent linkage lines, continue to strengthen the technology and productdevelopment of complete equipment to provide customers with overall solutions, and activelycultivate new achievement growth point. Future development goal: Become a global industryfirst-line smart corrugated packaging equipment supplier who can rival Bobst.Dongfang Precision Corrugated Board Production Line Business: The company's Fosber Group willcontinue to consolidate and maintain its leading edge as a world-leading corrugated boardproduction line related product and technical service provider, continue technological innovation,promote the application of Industry 4.0, and continue to strengthen competitive advantages inwhole-line products and other aspects. Future development goal: to surpass BHS and become theworld's first high-end corrugated board production line manufacturer.Based on the huge development potential of China's domestic market and emerging markets, FosberAsia will adhere to the Asian market, absorb advanced European technologies, take full advantageof China's local manufacturing industry chain, increase technological innovation, and developproducts that meet the needs of customers in emerging markets; make full use of China'shigh-quality supply chain to improve production efficiency, reduce raw materials and delivery costs,achieve high cost-effective core competitive advantages of "big brand quality, inexpensive price",expand the Asian market, and become a strong participant in the Asian market.
3.1.2 Technology innovation, digital transformation
The company is currently actively promoting smart manufacturing upgrades. Its Fosber Group hasaccumulated considerable experience in industrial 4.0 applications such as intelligent identification,intelligent diagnosis, intelligent correction, and self-learning of corrugated board production lines.
All intelligent applications must be completed based on the collection, analysis and mining ofproduction data. Digital transformation is the only way to achieve intelligent manufacturing.If Industry 4.0 is abstract and driven by 5G and artificial intelligence technologies, then the digitaltransformation of manufacturing is endogenous and driven by enterprise value creation.On the one hand, the operation efficiency and health status of production equipment can bemonitored in real time through device digitization, and equipment suppliers can provide variousvalue-added services such as remote diagnosis and technical support; on the other hand, productionenterprises can use digital equipment for production organization, Through the digitization of theproduction process, cloud platform order taking, cost analysis and intelligent scheduling, productionautomation management, and worker performance management can be achieved to fully improveproduction efficiency.With the acceleration of the company's downstream corrugated box packaging industry integration,the continuous improvement of concentration, and the domestic end customers' requirements for thequality, production efficiency, cost efficiency, and delivery speed of corrugated packaging products,large corrugated box factories are increasingly coming The more inclined to purchase medium andhigh-end corrugated cardboard intelligent packaging production lines.The company will accelerate its technological innovation, promote the development of equipmentdigital software systems and the digitalization of intelligent packaging equipment based on years ofdeep manufacturing experience in the field of intelligent packaging equipment, a deepunderstanding of downstream customers' production processes, and mature practices of thedeveloped intelligent production management system. upgrade.Combining the production process process, mass data of production equipment and algorithmanalysis and processing, the company will further enhance the intelligence of the company's smartpackaging equipment by means of hard and soft integration and integrated output, prompting theupgrading and industry of smart packaging equipment and technology Innovate to meet theequipment upgrade needs of large downstream corrugated carton factories, accelerate theintegration of the corrugated box packaging industry from top to bottom The integration ofpackaging equipment industry and the further increase of concentration.
3.1.3 Service empowerment manufacturing
With the increase of the equipment sold, the company will actively grasp the trend of increasingcustomer demand for spare parts, after-sales maintenance, and technical support services, andactively develop customer service business. At the same time, on the basis of the continuousdeepening of the Fosber Group's Industry 4.0 application, it continuously improves Pro-care andPro-service and other technical services, and continues to increase the revenue of spare parts salesand technical service support business.Both Fosber Group and Dongfang Precision (China) have upgraded their customer service centers.In the future, the company will adhere to the strategy of driving equipment sales through services,creating value-added space with services, and increasing the sales of technical services and spareparts.
3.1.4 Global resource allocation
The company focuses on mainstream customers in Europe, America and China withmid-to-high-end equipment products. In the future, it will continue to dig deeper into mainstreammarkets such as China, Europe and North America. Grasp the huge development opportunities inemerging markets, increase the global market share, realize the global resource allocation of themarketing system and service system, and continue to enhance business synergy in the samebusiness segment.
3.1.5 Strategic layout, industrial chain integration
The company will be down-to-earth, strictly control risks, invest steadily, pay attention tohigh-quality companies in the global and Chinese industrial chain, implement M & A around theindustrial chain according to business development needs and the actual situation of the company,and strengthen the horizontal and vertical integration of the industrial chain. The company willstrengthen the strategic layout of the smart packaging equipment business in China, Europe andNorth America and the global market through strategic mergers and acquisitions.
3.2 Comprehensively promote the implementation of the "synergy" strategy and continuouslyimprove the group operation and group management and control capabilities
Based on the experience and lessons learned from the 2019 Pride incident, the company's board ofdirectors and management deeply understand the importance of group management and controlcapabilities. In the third five-year strategic development plan, the company has clearly proposed a"synergy strategy", the connotation and purpose of which is to enhance the group's operationalcapabilities and group management and control capabilities, and to continuously optimize thecollaboration between existing business segments.Specifically, the company will continue to build a value-based group headquarters, continue tostrengthen the headquarters and the industry sector in industrial investment, strategic management,risk control, brand management, human resources, financial management, and informationmanagement, to provide professional expertise value services such as guidance and resourcecoordination for subsidiaries .
3.3 Strengthen the resource support for the subsidiary's Parsun Power outboard motorbusiness and support further enlargement and strengtheningAs the core power equipment of small and medium-sized watercrafts such as yachts, outboardmotors, with the continuous development of emerging markets such as China, and the continuousgrowth of demand in emerging markets, its sales market and application fields will continue to growThe market demand will continue to grow. Overall, in emerging markets such as Asia, Oceania, andLatin America, the Chinese market has attracted much attention due to its large market capacitypotential and high growth rate.Parsun Power is the largest supplier of marine power products based on outboard motors in China.According to the company's overall development strategic plan from 2020 to 2022, Dongfang
Precision will fully support Parsun Power to further strengthen, refine, and expand the mainbusiness of outboard engines, consolidate its competitive advantage in the small horsepower modelmarket, and actively expand medium-horsepower models market, increase market share; in thecontext of high-end, electrification become the trend of the outboard motor industry, increaseinvestment in research and development, cut into high-horsepower models, develop electricoutboard motor technology, become high-end high-horsepower outboard powerful participants inthe aircraft and electric outboard motor market; focus on expanding the Chinese market and otheremerging markets, launching cost-effective products, continuously increasing market share;strengthening the expansion of outboard motors in new industries and new application markets, andcultivating new business.At the same time, based on the company's "synergy" development strategy, Dongfang Precision willcontinue to strengthen its resource support for Parsun Power, further enhance the managementsynergy between the Group and its subsidiaries, and help Parsun Power optimize sales, branding, R&D, and supply the construction of management systems in areas such as chain, production,information system, human resources, and finance has improved the overall standardized operationlevel, which in turn helps Parsun Power continue to enhance its comprehensive competitiveness.
4. The risks that the company may face in the development process
4.1 Risk of macroeconomic changes and cyclical fluctuations in downstream industriesIn 2020, the uncertainties in the world trade situation and the global macroeconomic slowdown arecontinuing. The spread of the new coronavirus epidemic around the world in early 2020 has causeda certain impact on the global real economy. Europe and the United States and other countries andregions Under the impact of the epidemic situation, the normal operation in all aspects of society,economy and life has not yet been fully restored.The transmission of the overall changes in the external macro-economy to the micro level willinevitably be reflected in the changes in the enterprise's capital investment intentions. For DongfangPrecision, there is a close linkage between the main business and the customer market in thedownstream industry. If the macroeconomic growth rate continues to slow down in the future, andthe operating conditions of downstream manufacturers will decline, it may cause domestic and
foreign industry customers to be more cautious about their capital expenditure requirements, whichin turn will have a certain negative impact on the company's order acquisition.
4.2 Risks in globalization and internationalization
With years of development, the company's degree of "globalization" continues to increase. Theexisting overseas subsidiaries of Dongfang Precision are distributed in countries such as Italy, Spain,the Netherlands and the United States. The company is faced with the problem of how to adapt andbe familiar with the overseas legal environment, business environment, and cultural environment, aswell as how to better communicate and cooperate with the overseas management team.After the outbreak of the new coronavirus in 2020, although the domestic epidemic prevention andcontrol situation continued to improve and the production and living order accelerated, the globalspread of the epidemic had a major impact on the economic development of countries such asEurope and the United States. Among the operating locations and customer distribution of thecompany's foreign subsidiaries, the European and American markets occupy an important position.The development of the epidemic situation in Europe and the United States and regions and thechanges in the economic restart and recovery are expected to have a certain uncertain impact on thecompany's foreign subsidiary operations in 2020.
4.3 Fluctuation risk of main raw material prices
The main raw materials required for the manufacturing and production of the company's intelligentpackaging equipment are electrical components, standard parts, machined parts, other raw materialsand auxiliary materials. During the reporting period, the purchase amount of these main rawmaterials accounted for a relatively high proportion of the company's main business costs. Theproduction budget arrangement will be greatly affected, and the company will face the risk of risingoperating costs and falling gross profit margins, which may adversely affect the company'sprofitability.The company will continue to pay attention to fluctuations in the prices of major raw materials,establish supplier strategic cooperation mechanisms, and optimize and upgrade the supply chainmanagement system.
X. Receiving research, communication, interviews and other activities
1. Registration form for receiving research, communication, interviews and other activities during thereporting period
□ Applicable √ Not applicable
During the reporting period, the company did not receive reception research, communication, interviews and other activities.
Section 5 Important Matters
I. The company's common stock profit distribution and capital accumulation fund transfer toshare capitalDuring the reporting period, the common stock profit distribution policy, especially the formulation, implementation oradjustment of the cash dividend policy
√ Applicable □ Not applicable
The company has formulated "Guangdong Dongfang Precision Science&Technology Co., Ltd. Dividend ManagementSystem" and "Guangdong Dongfang Precision Science&Technology Co., Ltd. Shareholder Return Plan for the NextThree Years (2018-2020)", which clarifies the profit distribution method, cash dividend conditions, cash dividend timeand proportion, standardize profit distribution decision-making procedures and procedures for adjusting or changingprofit distribution, and can fully protect the legitimate rights and interests of small and medium investors.During the reporting period, the company's profit distribution policy has not been adjusted.
| Special explanation of cash dividend policy | |
| Whether it meets the requirements of the company's articles of association or the resolution of the shareholders' general meeting: | YES |
| Whether the dividend standard and proportion are clear and clear: | YES |
| Whether relevant decision-making procedures and mechanisms are complete: | YES |
| Whether the independent directors perform their duties and fulfill their due roles: | YES |
| Do small and medium shareholders have the opportunity to fully express their opinions and demands, and are their | YES |
| legal rights and interests fully protected: | |
| If the cash dividend policy is adjusted or changed, are the conditions and procedures compliant and transparent: | Not applicable |
The company's common stock dividend distribution plan (preplan) and capital reserve fund to share capital increase plan (preplan) inthe past 3 years (including this reporting period)
1. The plan for profit distribution and capital reserve conversion to share capital increase in 2017: based on the total sharecapital of 1,149,154,435 shares, the company will distribute a cash dividend of RMB 0.45 (including tax) for every 10 shares to allshareholders, and a total of 51,711,949.58 yuan (tax included); The capital reserve fund will be transferred to all shareholders forevery 10 shares, and the total number of company shares will be increased to 1,838,647,096 shares after the conversion.
2. Profit distribution plan for 2018: After deliberation and approval by the board of directors, the company plans not todistribute cash dividends in 2018, not to send bonus shares, and not to use the provident fund to increase its share capital.According to the "Shenzhen Stock Exchange Rules for Listed Companies Repurchasing Shares", if a listed company uses cash as theconsideration and buys back shares through an offer method or a centralized auction method, the amount of shares repurchased thatyear has been implemented as a cash dividend amount and is included in the year Calculation of the relevant proportion of cashdividends.In 2018, the company repurchased 13,113,660 shares in a centralized auction transaction, accounting for about 0.71% of thecompany's total share capital, and the total amount paid was about 63.5975 million yuan (excluding transaction costs). In 2018, thecompany distributed a cash dividend of 63.5975 million yuan by repurchasing shares.
3. The profit distribution plan for 2019: After deliberation and approval by the board of directors, the company plans not todistribute cash dividends in 2019, nor to send bonus shares, nor to convert capital reserve into share capital.According to the "Shenzhen Stock Exchange Rules for Listed Companies Repurchasing Shares", if a listed company uses cash as theconsideration and buys back shares through an offer method or a centralized auction method, the amount of shares repurchased thatyear has been implemented as a cash dividend amount and is included in the year Calculation of the relevant proportion of cashdividends.In 2019, the company repurchased 21,886,403 shares in a centralized auction transaction, accounting for approximately 1.19% of thecompany's total share capital, and the cumulative total amount paid was approximately 96.4915 million yuan (excluding transactionfees). In 2019, the company distributed cash dividends of 96.4915 million yuan by way of share repurchase.
The company's common stock cash dividends in the past three years (including this reporting period)
unit: yuan
| Dividend year | Cash dividend amount (including tax) | Net profit attributable to common shareholders of listed companies in the consolidated annual dividend statement | The ratio of the amount of cash dividends to the net profit attributable to ordinary shareholders of listed companies in the consolidated statement | The amount of cash dividends in other ways (such as repurchase of shares) | Proportion of cash dividends in other ways in the consolidated statement of net profit attributable to shareholders of common stock of listed companies | Total cash dividends (including other methods) | The ratio of the total cash dividends (including other methods) to the net profit attributable to shareholders of common shares of listed companies in the consolidated statement |
| 2019 | 0.00 | 1,838,018,805.50 | 0.00% | 96,491,469.85 | 5.25% | 96,491,469.85 | 5.25% |
| 2018 | 0.00 | -3,875,995,219.91 | 0.00% | 63,597,455.75 | -1.64% | 63,597,455.75 | -1.64% |
| 2017 | 51,711,949.58 | 490,498,337.12 | 10.54% | 0.00 | 0.00% | 51,711,949.58 | 10.54% |
The company was profitable during the reporting period and the parent company's common shareholder's profit distribution waspositive but no common stock cash dividend distribution plan was proposed.
□ Applicable √ Not applicable
II. Profit distribution and capitalization of capital reserves in the reporting period
□ Applicable √ Not applicable
The company does not distribute cash dividends in the planned year, does not send bonus shares, and does not convert capital reserveinto share capital.
III. Implementation of commitments
1. The company's actual controllers, shareholders, related parties, purchasers, and the company's commitments related parties havefulfilled their commitments during the reporting period and have not fulfilled their commitments as of the end of the reporting period
√ Applicable □ Not applicable
| Commitment reason | Commitment party | Commitment type | Commitment content | Commitment time | Commitment term | Implementation |
| Stock reform commitments | ||||||
| Commitments made in the acquisition report or equity change report | ||||||
| Commitments made during asset reorganization | Cen Meiling; Chen Huiyi; He Weifeng; Mai Zhirong; Peng Xiaowei; Qiu Yezhi; Tang Zhuolin; Tang | Share reduction commitment | From the date of signing this commitment letter to the completion of the transaction, I have no plan to reduce the shares of listed companies. | November, 25, 2019 | Until December 25, 2019 | Fulfilled |
| Zhuomian; Xie Weiwei; Zhao Xiuhe; Zhou Wenhui | |||||
| Tang Zhuolin; Tang Zhuomian | Commitments on industry competition, related party transactions, and capital occupation | 1. At present, the undertaking party and other enterprises controlled by the undertaking party do not have the same, similar and competing business as the listed company and its controlled enterprise, and will not engage in or assist other parties in engaging with the listed company and its The business operations of the controlled enterprise constitute or may constitute competition, nor will it directly or indirectly influence the acquisition or conduct of other enterprises that constitute the operation of the listed company and its controlled enterprise or may compete with other enterprises (or Joint control) investment. 2. If the listed company is engaged in a new business area, the undertaking party will not engage in business activities that form a competitive relationship with the listed | November, 25, 2019 | long term effective | fulfilling |
| company's new business, except with the prior written consent of the listed company. 3. If any business opportunity obtained by the promised party from any third party competes with or may compete with the business operated by the listed company and its controlled enterprise, the promised party will immediately notify the listed company and give the business opportunity Listed company. 4. The promised party will not use the information or other resources obtained from the listed company to make any action that harms the interests of the listed company in any way. 5. If the committed party violates this commitment and causes the listed company to suffer losses, the committed party will make full, timely and full compensation for all losses caused to the listed company, and guarantee to actively eliminate any resulting Negative Effects. | |||||
| Tang Zhuolin; Tang Zhuomian | Commitments on industry | 1. The undertaking party will avoid all acts of illegally occupying the funds and assets of the listed company. | November, 25, 2019 | long term effective | fulfilling |
| competition, related party transactions, and capital occupation | Under no circumstances will the listed company be required to provide any form of guarantee to the undertaking party or other enterprises controlled by the undertaking party. 2. The promised party will avoid and reduce related transactions with listed companies as much as possible. For related transactions that cannot be avoided or have reasonable grounds, it will follow voluntary, fair, and reasonable market pricing principles, and be conducted in accordance with normal market transaction conditions and in accordance with the law. Sign agreements, perform legal procedures, and perform relevant internal decision-making and approval procedures in accordance with relevant laws, regulations, other regulatory documents, and articles of association of listed companies, and perform information disclosure obligations in a timely manner, to ensure fair and reasonable pricing of connected transactions and transactions The conditions are fair, and it is guaranteed not to use connected transactions to |
| engage in any actions that damage the legitimate rights and interests of listed companies and other shareholders. 3. If the promised party violates this commitment and causes losses to the listed company, the promised party will make full, timely and full compensation for all losses caused to the listed company, and guarantee to actively eliminate any adverse effects caused thereby . | |||||
| Tang Zhuolin; Tang Zhuomian | Other commitments | 1. Do not exceed the authority to intervene in the operation and management activities of Dongfang Precision, do not encroach on the interests of Dongfang Precision, and effectively implement the relevant measures for filling the diluted immediate returns to Dongfang Precision. 2. After the China Securities Regulatory Commission and the Shenzhen Stock Exchange separately publish relevant opinions and implementation rules to fill dilutive immediate return measures and their commitments, if the relevant systems and commitments of Dongfang Precision do not comply with these regulations, they will immediately follow The | November, 25, 2019 | long term effective | fulfilling |
| requirements of the China Securities Regulatory Commission and Shenzhen Stock Exchange issued a supplementary commitment to meet the requirements of the China Securities Regulatory Commission and the Shenzhen Stock Exchange. 3. I promise to fulfill the relevant return measures formulated by the listed company and the relevant commitments made by me. If I violate these commitments and cause losses to the listed company or investors, I am willing to bear the corresponding liability for compensation according to law. | |||||
| Tang Zhuolin; Tang Zhuomian | Other commitments | 1. After this transaction, the undertaking party will continue to maintain the independence of listed companies in terms of personnel, assets, business, organization, and finance in accordance with the requirements of relevant laws, regulations, and regulatory documents. The act of independence and integrity of assets, business independence, institutional independence, and financial independence does not | November, 25, 2019 | long term effective | fulfilling |
| harm the interests of listed companies and other shareholders, and effectively protects the independence of listed companies in terms of personnel, assets, business, institutions, and finance. 2. This letter of commitment is effective from the date of the signing party's signature and cannot be undone. The undertaking party guarantees that this undertaking is fulfilled effectively, and the listed company has the right to supervise the performance of this undertaking letter; if the undertaking party fails to implement this undertaking letter effectively, and thus causes any actual losses to the listed company, the undertaking party will compensate the listed company accordingly all direct or indirect losses caused by the company. | |||||
| He Weifeng; Mai Zhirong; Peng Xiaowei; Qiu Yezhi; Tang Zhuolin; Xie | Other commitments | As a director / senior manager of the company, I will perform my duties faithfully and diligently, safeguard the legitimate rights and interests of the company and all shareholders, and make a commitment that the company ’s return measures can be effectively fulfilled: | November, 25, 2019 | long term effective | fulfilling |
| Weiwei; Zhou Wenhui | 1, not free or unfair to other Units or individuals convey interests without damaging the company's interests in other ways; 2. Restrain their job consumption behavior; 3. Do not use company assets to engage in investment or consumption activities that are unrelated to the performance of their duties; 4. The board or remuneration The remuneration system established by the committee is linked to the implementation of the company's return measures; 5. If the company implements the equity incentive plan, the exercise conditions of the company's equity incentives to be announced will be linked to the implementation of the company's return measures; 6. After the commitment is issued, if the regulatory authority makes other requirements on the replenishment measures and the relevant provisions of its commitment, and the above commitment does not meet the new regulatory requirements of the regulatory authority, I promise that I will issue a supplement in accordance with the latest |
| regulations of the regulatory authority Commitment; 7. I promise to fulfill the company Set about filling return measures and commitments I made, if I breach these commitments and caused losses to the company or investor, I am willing to bear the corresponding liability law. | |||||
| Beijing Automotive Group Industry Investment Co.,Ltd. Contemporary Amperex Technology Co. Limited | Share sales limit commitment | If Pride’s accumulated actual net profit after deduction in 2016, 2017, and 2018 is not less than the cumulative promised net profit after deduction, or Pride's cumulative actual net profit after deduction in 2016, 2017, and 2018 is lower than the cumulative promised net profit after deduction, but has fulfilled the corresponding performance compensation obligations and obtained by holding the subscription of Pride's equity Dongfang Precision Co., Ltd. After deducting the number of compensated shares (if any), the ban can be lifted after thirty-six months from the listing date. | April 25, 2017 | Until April 24, 2020 | Fulfilled |
| Qinghai Puren Intelligent | Share sales limit | If Pride ’s accumulated actual net profit after deduction in 2016, 2017, and 2018 is not less than the cumulative | April 25, 2017 | Until April 24, | Fulfilled |
| Technology R & D Center (Limited Partnership) | commitment | promised net profit after deduction, Or Pride's cumulative actual net profit after deduction in 2016, 2017, and 2018 is lower than the cumulative promised net profit after deduction, but has fulfilled the corresponding performance compensation obligations and obtained by holding the subscription of Pride's equity 40% of the shares of Dongfang Precision, After deducting the amount of the compensated shares (if any), the ban will be lifted after 36 months from the listing date | 2020 | ||
| Qinghai Puren Intelligent Technology R&D Center (Limited Partnership) | Share sales limit commitment | The total number of 80% of the shares of Dongfang Precision acquired by subscription of shares held by Pride can be lifted after 48 months from the listing date of the shares after deducting the number of compensated shares (if any) | April 25, 2017 | Until April 24, 2021 | fulfilling |
| Qinghai Puren Intelligent Technology R&D | Share sales limit commitment | The number of remaining shares of Dongfang Precision acquired by subscription of shares held by Pride can be lifted after 60 months from the date of listing | April 25, 2017 | Until April 24, 2022 | fulfilling |
| Center (Limited Partnership) | |||||
| Pulead Technology Industry Co.,Ltd.;Beiqi Foton Motor Co., Ltd. | Share sales limit commitment | If Pride's cumulative actual net profit after deduction in 2016 and 2017 is not less than the cumulative promised net profit after deduction, or Pride's cumulative actual net profit after deduction in 2016 and 2017 is less than cumulative commitment deduction Net profit, but has fulfilled the corresponding performance compensation obligations, 40% of Dongfang Precision shares acquired by holding the shares of Pride, after deducting the number of compensated shares (if any), from the date of share listing You can lift the ban after 24 months. | April 25, 2017 | Until April 24, 2019 | Fulfilled |
| Pulead Technology Industry Co.,Ltd.;Beiqi Foton Motor Co., Ltd. | Share sales limit commitment | If Pride's cumulative actual net profit after deduction in 2016, 2017, and 2018 is not less than the cumulative promised net profit after deduction, or Pride's cumulative actual net profit after deduction in 2016, 2017, and 2018 is low after accumulating commitments to deduct non-post-net profits, but having fulfilled the corresponding performance compensation obligations, | April 25, 2017 | Until April 24, 2020 | Fulfilled |
| the remaining shares in Dongfang Precision shares acquired through the subscription of shareholdings in Pride, after deducting the number of compensated shares (if any) , the ban can be lifted after 36 months from the listing date | |||||
| Beijing Pride New Energy Battery Technology Co., Ltd. | Commitments on industry competition, related party transactions, and capital occupation | The unit will standardize operations in related transactions with CATL, BAIC New Energy, Foton Motor, and actively perform internal control procedures. The prices of related transactions are strictly priced based on market prices to avoid adversely affecting the independence of listed companies. | April 25, 2017 | Long term effective | fulfilling |
| Pulead Technology Industry Co.,Ltd. | Commitments on industry competition, related party transactions, and capital occupation | During the performance commitment period and within five years from the expiration of the performance commitment period, Pulead will not compete directly or indirectly with Pride in the automotive power battery system business. | April 25, 2017 | December, 31, 2024 | Fulfilling |
| Pulead Technology | Commitments on | 1. For the related transactions between the company, the | April 25, 2017 | Long term | Fulfilling |
| Industry Co.,Ltd. Beijing Automotive Group Industry Investment Co.,Ltd. Beiqi Foton Motor Co., Ltd.Contemporary Amperex Technology Co. Limited.Qinghai Puren Intelligent Technology R&D Center (Limited Partnership) | industry competition, related party transactions, and capital occupation | company controlled by the company and other companies actually controlled by the company's controlling shareholders, and Dongfang Precision and its holding subsidiaries that cannot be avoided or have reasonable reasons, they will strictly abide by the market principles. In accordance with the general principles of equality, mutual benefit and equal pay, fair and reasonable conduct. For related transactions between the company, the company controlled by the company, and the company's controlling shareholders who actually control other companies and Dongfang Precision and its holding subsidiaries, an agreement will be signed in accordance with the law, legal procedures will be performed, and relevant laws, regulations, and regulatory documents , Articles of Association of Dongfang Precision Co., Ltd. and other relevant provisions of corporate governance system to fulfill the obligation of information disclosure, and to ensure that the legal rights of listed companies and the majority of | effective |
| independent and complete asset structure and business system; after the completion of this transaction, the unit will continue to maintain the general Pride's independent operation guarantees that the company or its related parties and its transactions are regulated in their transactions, actively perform internal control procedures, and the transaction prices are strictly priced based on market prices to avoid adversely affecting the independence of listed companies. | |||||
| Tang Zhuolin; Tang Zhuomian | Commitments on industry competition, related party transactions, and capital occupation | 1. For affiliated transactions between me, other companies under my control and Dongfang Precision and its holding subsidiaries that are unavoidable or have reasonable causes, we will strictly abide by the principles of the market, and follow the general principles of equality and mutual benefit and equal pay, Fair and reasonable. For related transactions between me, other enterprises under my control and Dongfang Precision and its holding subsidiaries, we will sign an agreement in accordance with the law and perform legal | April 25, 2017 | Long term effective | Fulfilling |
| procedures, in accordance with relevant laws, regulations, regulatory documents, and articles of association of Dongfang Precision, etc. Relevant regulations to fulfill the obligation of information disclosure and guarantee not to damage the legitimate rights and interests of listed companies and the majority of small and medium shareholders through connected transactions; Obligations, and the transaction must be carried out after deliberation and approval by the competent authority; 3. I promise not to obtain any illegitimate benefits through affiliated transactions or make Dongfang Precision and its holding subsidiaries assume any undue obligations. In case of loss of Dongfang Precision and its holding subsidiaries due to violation of the above commitments, I shall be liable for compensation for losses of Dongfang Precision and its holding subsidiaries. | |||||
| Pulead Technology Industry Co.,Ltd. | Commitments on industry | 1. The enterprise, the enterprise controlled by the enterprise and other enterprises actually controlled by | April 25, 2017 | Long term effective | Fulfilling |
| Qinghai Puren Intelligent Technology R & D Center (Limited Partnership) | competition, related party transactions, and capital occupation | the controlling shareholder of the enterprise will not engage in the same direct or indirect way as the main business of Dongfang Precision and its subsidiaries, Pride and its subsidiaries Similar business will not be engaged in the same or similar business as the main business of Dongfang Precision and its subsidiaries, Pride and its subsidiaries through investment, acquisition, joint venture, merger, or entrusted operation in China. 2. Any business opportunities that the company, the company controlled by the company, and other companies actually controlled by the company's controlling shareholder will obtain from any third party in the future are related to the main business of Dongfang Precision and its subsidiaries, Pride and its subsidiaries. If there is competition or there may be competition, the enterprise, the enterprise controlled by the enterprise and other enterprises actually controlled by the controlling shareholder of the enterprise will immediately notify Dongfang Precision and its |
| subsidiaries, Pride and its subsidiaries, and try their best to give the business opportunity Ferry to Dongfang Precision and its subsidiaries, Pride and its subsidiaries. 3. If the enterprise, the enterprise controlled by the enterprise and other enterprises actually controlled by the controlling shareholder of the enterprise cause losses to Dongfang Precision and its related parties due to failure to perform or improperly perform the above commitments, the enterprise shall bear the full amount in cash and other losses. | |||||
| Pulead Technology Industry Co.,Ltd. Beijing Automotive Group Industry Investment Co.,Ltd. Beiqi Foton Motor Co., Ltd.Contemporary | Other commitments | 1. Since the completion of this reorganization, the newly issued shares issued by Dongfang Precision to the company will be registered within the name of the company within 36 months. The company and the company acting in concert will not increase the shares of Dongfang Precision. 2. Since the completion of this reorganization, within 36 months from the date when the newly-increased shares issued by Dongfang Precision to the company are registered under the name of the | April 25, 2017 | Until April 24, 2020 | Fulfilled |
| Amperex Technology Co. Limited.Qinghai Puren Intelligent Technology R&D Center (Limited Partnership) | company, the company and the person acting in concert with the company will not seek any control position. 3. This commitment takes effect as soon as it is made and cannot be revoked. If the above commitments are violated, the company will assume corresponding legal responsibilities | ||||
| Tang Zhuolin; Tang Zhuomian | Other commitments | 1. Within 60 months from the completion of this transaction, I promise not to give up the actual control of Dongfang Precision. 2. In order to continue to share the business results of Dongfang Precision, I have the intention to hold shares of Dongfang Precision for a long time. Under this premise, I further undertake to select the appropriate time to increase or reduce holdings of Dongfang Precision based on my own capital holdings and capital demand, while ensuring that the actual controller of Dongfang Precision does not change The relevant transactions shall be carried out in accordance with the relevant regulations of the China Securities | April 25, 2017 | Until April 24, 2022 | Fulfilling |
| Regulatory Commission and Shenzhen Stock Exchange. 3. This commitment takes effect as soon as it is made and cannot be revoked. If the above commitment is violated, I will bear the corresponding legal responsibility. | |||||
| Pulead Technology Industry Co.,Ltd. Beijing Automotive Group Industry Investment Co.,Ltd. Beiqi Foton Motor Co., Ltd.Contemporary Amperex Technology Co. Limited.Qinghai Puren Intelligent Technology R & D | Other commitments | When the company implemented a major asset reorganization to acquire 100% equity of Beijing Pride, Beijing Pride's original shareholders Pulead, Qinghai Puren, BAIC Investment, Foton Motor, CATL promised: 1. Except BAIC Investment and Foton Motor forming a concerted action relationship, Pulead and Qinghai Puren formed a concerted action relationship, the original shareholders of Beijing Pride ensured that they did not sign a concerted action agreement as of the date of signing the "Issuance of Shares and Cash Payment for Asset Purchase Agreement" Concerted action agreement. 2. The former shareholders of Beijing Pride will not attempt to re-elect the board of directors of Dongfang Precision through the shareholders' meeting. | July 28 2016 | Long term effective | Fulfilling |
| Center (Limited Partnership) | ||||||
| Commitments made during initial public offering or refinancing | Construction Investment Investment Co., Ltd .; Sheng Ji Equity Investment Fund (Shanghai) Co., Ltd .; Tang Zhuolin; Tibet Autonomous Region Investment Co., Ltd. | Share sales limit commitment | The non-publicly issued shares of the company it subscribed for shall not be transferred within 36 months from the date of listing | March 4, 2016 | Until March, 3, 2019 | Fulfilled |
| The controlling shareholder and actual controller Tang Zhuolin, Tang Zhuomian | Commitments on industry competition, related party transactions, and | Until the fact that I (or the company) is the main shareholder of the issuer changes, I (or the company) will not be directly or indirectly in any way (including but not limited to operating alone, joint ventures and ownership in other companies or enterprises Shares or equity) engaged in business or activities that compete | August 18, 2010 | Long term effective | Fulfilling |
| capital occupation | with or may constitute competition with the issuer ’s business. If the issuer loses due to failure to fulfill its commitment to avoid competition in the industry, I (the company) will compensate the issuer for the losses suffered. | ||||
| The controlling shareholder and actual controller Tang Zhuolin, Tang Zhuomian | Other commitments | If the relevant government department or judicial authority determines that Dongfang Precision or Waco ASEAN needs to make up for the housing provident fund for employees, or that Dongfang Precision , Waco ASEAN bears any late fees, fines or losses due to failure to pay housing provident fund for some employees, it will be unconditional Bear all the responsibilities for the aforementioned repayment of fees, late fees and fines. | August 15, 2011 | Long term effective | Fulfilling |
| Company | Other commitments | 1. The company, its controlling subsidiaries, and the actual controller of the company did not provide financial assistance directly or indirectly to CCIC Investment Co., Ltd., Sheng Ji Equity Investment Fund (Shanghai) Co., Ltd., Tibet Autonomous Region Investment Co., Ltd., Guo Xu Or compensation, there is | June 25, 2015 | March, 3, 2019 | Fulfilled |
| Use of Raised Funds of Listed Companies "and the company's" Procedures for the Management of Raised Funds "(storage, approval, decision-making, use, etc.) for management. After the funds raised by this non-public offering are in place, the company will disclose information on the use of the funds raised in strict accordance with the requirements of relevant laws and regulations. | ||||||
| Equity incentive commitment | ||||||
| Other commitments made to the company's small and medium shareholders | ||||||
| Whether the promise is fulfilled on time | YES | |||||
2. There is a profit forecast for the company's assets or projects, and the report period is still in the profit forecast period. The company makes anexplanation about the asset or project reaching the original profit forecast and its reasons
□ Applicable √ Not applicable
IV. Non-operating capital occupation of listed companies by controlling shareholders and their related parties
□ Applicable √ Not applicable
During the reporting period of the company, there was no non-operating capital occupation of the listed company by the controlling shareholder and its related parties.
V. Explanation of the board of directors, board of supervisors and independent directors (if any) on the “non-standard audit report” ofthe accounting firm during the reporting period
□ Applicable √ Not applicable
VI. Explanation of changes in accounting policies, accounting estimates and accounting methods compared to the previous year’s
financial report
√ Applicable □ Not applicable
On April 29, 2019, the company convened the thirty-sixth (interim) meeting of the third board of directors and the twenty-third (interim) meeting of the third board of supervisors to consider
and approve the "Proposal on Changes in Accounting Policies". In 2017, the Ministry revised and issued "Accounting Standards for Business Enterprises No. 22-Recognition and Measurementof Financial Instruments" (Caihui [2017] No. 7), and "Accounting Standards for Business Enterprises No. 23-Financial Asset Transfer" (Caiku [2017] 8 No. 4), "Accounting Standards forEnterprises No. 24-Hedging Accounting" (Caihui [2017] No. 9) and "Accounting Standards for Enterprises No. 37-Presentation of Financial Instruments" (Caihui [2017] No. 14) Fortool-related accounting standards, the company decided to implement the above new financial instrument standards from January 1, 2019, and will disclose the financial statements inaccordance with the requirements of the new financial instrument standards from the company's first quarterly report for 2019.On August 21, 2019, the company convened the 38th meeting of the third session of the Board of Directors and the 24th meeting of the third session of the Supervisory Committee, andreviewed and approved the "Proposal on Changes in Accounting Policies". (1) The "Notice on Revising and Printing the Format of General Financial Statements for 2019" (Caihui [2019] No. 6)was issued on April 30, 2015, and non-financial enterprises that require the implementation of corporate accounting standards should prepare the 2019 interim financial statements and For thefinancial statements and subsequent financial statements, the company decided to implement the new financial statement format for the 2019 interim financial statements, annual financialstatements and subsequent financial statements; (2) In view of the Ministry of Finance ’s May 9, 2019 issue of the “Accounting Standards for Enterprises No. 7-Exchange of Non-MonetaryAssets (2019 Revision) (Caihui [2019] No. 8), issued on May 16, 2019 Amended "Accounting Standards for Business Enterprises No. 12-Debt Restructuring (2019 Revision)" (Caiku [2019 〕No. 9) Notice, the revised “Accounting Standards for Business Enterprises No. 7-Exchange of Non-Monetary Assets (2019 Revision)”, Standards No. 12 - Debt Restructuring (revised 2019) ",respectively, since June 10, 2019, June 17, 2019 implementation of the company in accordance with the requirements of the Ministry of Finance of the corresponding execution.
VII. Explanation on the situation of correction of major accounting errors during the reporting period requiring retrospectiverestatement
□ Applicable √ Not applicable
During the reporting period, there was no major accounting error correction that required retrospective restatement.
VIII. Description of changes in the scope of consolidated statements compared to last year ’s financial report
√ Applicable □ Not applicable
1. During the reporting period, the company sold 100% of Pride's equity. The delivery of the relevant equity sale was completed on December 25, 2019. After the completion of the delivery,Pride will not be included in the company's consolidated financial statements for the 2019 annual financial report.
2. The subsidiary Fosber Group acquired 70% of the equity of the Spanish Tiruna Group. The delivery of the equity acquisition was completed on May 30, 2019. After the completion of thedelivery, the Tiruna Group was included in the company's consolidated financial statements for the 2019 annual financial report.
3. In March 2019, Parsun USA completed the cancellation and will no longer be included in the company's consolidated financial statements for the 2019 annual financial report from the date ofcancellation.
4. In October 2019, Guangdong Flando completed the cancellation and will no longer be included in the company's consolidated financial statements for the 2019 annual financial report sincethe date of cancellation.
IX. Appointment and dismissal of accounting firms
Currently engaged accounting firm
| Name of domestic accounting firm | BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP |
| Remuneration of domestic accounting firm (ten thousand yuan) | 95 |
| The consecutive years of audit services of domestic accounting firms | 8 years |
| Name of certified public accountant of domestic accounting firm | Chen Yanbai, Song Baojun |
| The consecutive years of auditing services of certified public accountants of domestic accounting firms | Chen Yanbai serves the first year, Song Baojun serves the third year |
Whether to reappoint an accounting firm in the current period
□ Yes √ No
Engagement of internal control audit accounting firms, financial advisors or sponsors
√ Applicable □ Not applicable
During the year, the company engaged CITIC Construction Investment Co., Ltd. as a financial advisor due to major asset restructuring matters, during which it paid a total of 9 million yuan infinancial advisory fees.
X. After the disclosure of the annual report, it faces the suspension of listing and the termination of listing
□ Applicable √ Not applicable
XI. Matters related to bankruptcy and reorganization
□ Applicable √ Not applicable
There were no bankruptcy and reorganization related matters during the reporting period.
XII. Major litigation and arbitration
√ Applicable □ Not applicable
| Litigation (arbitration) basic situation | Amount involved (ten thousand yuan) | Whether to form estimated liabilities | Litigation (arbitration) progress | Litigation (arbitration) trial results and impact | Litigation (arbitration) judgment execution | Disclosure date | Disclosure index |
| On July 1, 2019, the Shanghai Branch of China International Economic and Trade Arbitration Commission (hereinafter referred to as "China CITIC Shanghai Branch") accepted the applicant Guangdong Dongfang Precision Technology Co., Ltd. (hereinafter referred to as "Company" or "Dongfang | 264,459.46 | Peaceful settlement of cases, no liability to the company | On December 25, 2019, the company received the China International Economic and Trade Arbitration Commission Mediation Letter ([2019] China Trade Zhongjing (Shanghai) Di Zi | The company was able to recover approximately 1.5 billion yuan in cash, and its financial situation in terms of net assets, solvency and cash flow was greatly improved. | The mediation case "letter of conciliation" has been completed. | December 31, 2019 | "Announcement on the completion of the transfer registration process of the target assets of major asset sales" (Announcement No.2019-092) is published on the Juchao Information |
| Precision"). The respondent Pulead Technology Industry Co., Ltd., the respondent Contemporary Amperex Technology Co. Limited, the respondent Beijing Automobile Group Industry Investment Co., Ltd., the respondent Beiqi Foton Motor Co., Ltd. And the respondent Qinghai Puren Intelligent Technology R&D Center (Limited Partnership) filed an arbitration application concerning disputes on performance commitments and profit compensation. | No. 0470 issued by China CIETAC Shanghai Branch. | Network. |
XIII.Penalties and rectification
□ Applicable √ Not applicable
There were no penalties and rectifications during the reporting period.
XIV.The integrity of the company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XV.Implementation of the company's equity incentive plan, employee stock ownership plan or other employee incentive measures
□ Applicable √ Not applicable
During the reporting period, the company had no equity incentive plan, employee stock ownership plan or other employee incentive measures and their implementation.
XVI.Major Related Party Transactions
1. Related transactions related to daily operations
√ Applicable □ Not applicable
| Related party | Connection relation | Related transaction types | Related transaction content | Related party pricing principles | Related transaction price | Amount of related transactions (ten thousand yuan) | Percentage of similar transactions | Approved transaction amount (ten thousand yuan) | Whether it exceeds the approved quota | Related party settlement methods | Available market prices for similar transactions | Disclosure date | Disclosure index |
| CATL | As of December | Procurement of goods and | Purchase power | Pride and CATL | 538,248.25 | 86.40% | 513,532.9 | YES | Settlement method | Not applicable | April 17, 2019 | Juchao Information |
| 31, 2019, it was a shareholder with a shareholding ratio of more than 5% of Dongfang Precision | services | battery cells and BMS; accept related services | agreed on product specifications, quantities, prices, etc. in accordance with the agreement, and subsequently, according to the procurement scale and cooperatio | agreed in relevant contract | Network |
| n, etc., after negotiation between both parties, a rebate agreement was signed to adjust the price. | |||||||||||||
| BAIC | Became in concert with BAIC Investment, a shareholder with a shareholding ratio of more | Sell goods and services | Sell power battery system and provide related after-sales service | Pride and BAIC New Energy agreed on product model, quantity, price and | 701,796.47 | 98.76% | 653,400 | 是 | Pride's credit policy for related parties is 60-70 days per month, including: Pride's | Not applicable | April 17, 2019 | Juchao Information Network |
| than 5% of Dongfang Precision as of December 31, 2019 | other specific information according to the agreement, and then determined the product settlement price in accordance with the "Parts Purchase Price Agreement", the price | credit policy for BAIC New Energy is 60 days per month. |
| between the two parties. | ||||||||||
| In total | -- | -- | 1,240,044.72 | -- | 1,166,932.9 | -- | -- | -- | -- | -- |
| Details of large sales returns | There were no large sales returns during the reporting period. | |||||||||
| If the total amount of daily connected transactions that will occur in the current period is estimated by category, the actual performance during the reporting period (if any) | Not applicable | |||||||||
| Reasons for the large difference between the transaction price and the market reference price (if applicable) | Not applicable | |||||||||
2. Related transactions in the acquisition or sale of assets or equity
□ Applicable √ Not applicable
During the reporting period, the company did not have any related party transactions related to the acquisition or sale of assets or equity.
3. Related transactions of joint foreign investment
□ Applicable √ Not applicable
During the reporting period, there was no related party transaction involving joint foreign investment.
4. Related credit and debt transactions
√ Applicable □ Not applicable
Whether there are non-operating related claims and debts
□ Yes √ No
There were no non-operating related claims and debt transactions during the reporting period.
5. Other major related party transactions
□ Applicable √ Not applicable
There were no other major related transactions during the reporting period.
XVII. Major contracts and their performance
1. Entrustment, contracting and leasing matters
1.1 Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
1.2 Contracting situation
□ Applicable √ Not applicable
There was no contracting during the reporting period.
1.3 Lease situation
□ Applicable √ Not applicable
There were no leases during the reporting period.
2. Material guarantee
√Applicable □ Not applicable
2.1 Guarantee situation
Unit: ten thousand yuan
| External guarantees of the company and its subsidiaries (excluding guarantees for subsidiaries) | ||||||||
| Name of guarantee object | Announcement of the relevant amount of guarantee amount | Guarantee amount | Actual date | Actual guarantee amount | Type of guarantee | Warranty period | Whether the performance is completed | Whether guarantee for related parties |
| Total amount of external guarantees approved during the | 0 | Total actual amount of external guarantees during | 0 | |||||
| reporting period (A1) | the reporting period (A2) | |||||||
| The total amount of external guarantees approved at the end of the reporting period (A3) | 0 | Total actual external guarantee balance at the end of the reporting period (A4) | 0 | |||||
| Company guarantees to subsidiaries | ||||||||
| Name of guarantee object | Announcement of the relevant amount of guarantee amount | Guarantee amount | Actual date | Actual guarantee amount | Type of guarantee | Warranty period | Whether the performance is completed | Whether guarantee for related parties |
| Dongfang Precision（Netherland） | June 28, 2017 | 27,354.25 | August 10, 2017 | 27,354.25 | Joint liability guarantee | 36 months | NO | NO |
| Dongfang Precision（Netherland）） | January 26, 2018 | 35,075.96 | February 12, 2018 | 35,075.96 | Joint liability guarantee | 40 months | NO | NO |
| The total amount of guarantees approved for subsidiaries during the reporting period (B1) | 0 | Total actual amount of guarantees issued to subsidiaries during the reporting period (B2) | 62,430.21 | |||||
| The total amount of guarantees for subsidiaries approved at the end of the reporting period (B3) | 62,430.21 | Total actual guarantee balance of subsidiaries at the end of the reporting period (B4) | 62,430.21 | |||||
| Subsidiary to subsidiary guarantee | ||||||||
| Name of guarantee object | Announcement of the | Guarantee amount | Actual date | Actual guarantee | Type of guarantee | Warranty period | Whether the | Whether guarantee |
| relevant amount of guarantee amount | amount | performance is completed | for related parties | ||||
| The total amount of guarantees approved for subsidiaries during the reporting period (C1) | 0 | Total actual amount of guarantees to subsidiaries during the reporting period (C2) | 0 | ||||
| The total amount of guarantees approved for subsidiaries at the end of the reporting period (C3) | 0 | Total actual guarantee balance of subsidiaries at the end of the reporting period (C4) | 0 | ||||
| Total company guarantee (ie the sum of the top three items) | |||||||
| The total amount of guarantees approved during the reporting period (A1 + B1 + C1) | 0 | Total actual guarantee amount during the reporting period (A2 + B2 + C2) | 62,430.21 | ||||
| The total amount of guarantees approved at the end of the reporting period (A3 + B3 + C3) | 62,430.21 | Total actual guarantee balance at the end of the reporting period (A4 + B4 + C4) | 62,430.21 | ||||
| The proportion of the actual total guarantee (ie A4 + B4 + C4) to the company ’s net assets | 14.39% | ||||||
| among them: | |||||||
| Balance of guarantee for shareholders, actual controllers and their related parties (D) | 0 |
| The balance of debt guarantee provided directly or indirectly for the guaranteed object with an asset-liability ratio exceeding 70% (E) | 62,430.21 |
| The amount of the guarantee amount exceeding 50% of the net assets (F) | 0 |
| Total amount of the above three guarantees (D + E + F) | 0 |
| Explanation of unexpired guarantees, during the reporting period, a guarantee liability has occurred or may be jointly and severally liable (if any) | Not applicable |
| Instructions for providing external guarantees in violation of prescribed procedures (if any) | Not applicable |
Description of the specific situation of using a composite guaranteeNot applicable
2.2 External guarantees in violation of regulations
□ Applicable √ Not applicable
During the reporting period, the company had no violations of external guarantees.
3. Entrust others to manage cash assets
3.1 Entrusted financial management
√Applicable □ Not applicable
Overview of entrusted financial management during the reporting period
Unit: ten thousand yuan
| Specific type | Source of funds for entrusted financing | Entrusted financial management | Outstanding balance | Overdue amount not recovered |
| Bank wealth management products | Own funds | 157,000 | 166,300 | 0 |
| Bank wealth management products | Funds raised | 75,000 | 0 | 0 |
| In total | 232,000 | 166,300 | 0 | |
The specific situation of high-risk entrusted financial management with large single amount or low security, poor liquidity andnon-guaranteed capital
□ Applicable √ Not applicable
The entrusted financial management has expected that the principal cannot be recovered or there are other situations that may causeimpairment
□ Applicable √ Not applicable
3.2 Entrusted loans
□ Applicable √ Not applicable
There were no entrusted loans during the reporting period.
4. Other major contracts
□ Applicable √ Not applicable
There were no other major contracts during the reporting period.
XVIII. Social Responsibility
1. Performance of social responsibilities
The company attaches great importance to the fulfillment of social responsibilities in its daily operations, and intends to promote theharmony and common prosperity of the company and its stakeholders, actively act in the protection of shareholders and creditors, the
protection of the rights and interests of employees, the protection of the rights and interests of suppliers, customers and clients,environmental protection and sustainable development, public relations and social welfare, and strive to realize the society includingthe sustainable development of the company The overall benefit is maximized.
(1) During the reporting period, the company strictly followed the requirements of laws and regulations such as the "Company Law","Securities Law", and "Government Standards for Listed Companies", continuously improved the corporate governance structure,and improved the internal control system. The decision-making system with the board of directors, the board of supervisors and themanagement as the main structure, and at the same time fulfill the information disclosure obligations in a timely manner inaccordance with the law and regulations, and effectively protect the rights and interests of all shareholders.
(2) The company strictly abides by the relevant laws and regulations of the "Labor Law" and "Labor Contract Law", puts people first,pays attention to the needs of employees, strives to improve the working and living environment of employees, and sets up laborunions to effectively protect the interests of employees. Configure labor protection articles according to the hazards of job exposure,organize employees to conduct occupational health examinations (before going on duty, on the job, and before leaving the job), andpurchase "safety and liability insurance" for the jobs with larger risk factors.
(3) The company has long been adhering to the principles of "integrity management" and "mutual benefit and win-win", activelybuild and develop strategic partnerships with suppliers and customers, jointly build a platform of trust and cooperation, andeffectively implement the company's supplier 1. Social responsibility to consumers. The company's contracts with suppliers andcustomers have performed well, and the rights and interests of all parties have received high attention and due protection.
(4) In terms of environmental protection: the company samples and tests quarterly and issues a third-party test report. It has reachedthe zero-emissions requirements approved by environmental protection, and strictly transfers hazardous waste in accordance withnational requirements. Treatment facilities, wastewater treatment facilities), and passed the "OHSAS18001: 2007 occupational healthand safety management system", "ISO14001: 2005 environmental management system" certification.
(5) Social public welfare: The company organizes condolences to the employees in need and the lonely elderly in the place where itoperates, and participates in public welfare activities organized by external parties.
(6) Anti-epidemic and anti-epidemic aspects: Since the outbreak of the new coronavirus pneumonia around the Spring Festival in2020, the company has actively participated in social anti-epidemic activities and took the following actions:
A. Doing its own epidemic prevention work: The company organized and established the epidemic prevention committee with thegeneral manager as the general commander for the first time, and made all-round deployment arrangements for various prevention
and control work; actively carried out the collection and deployment of epidemic prevention materials, and equipped staff Masks,temperature guns, disinfectants and other epidemic prevention materials.B. Actively respond to the government's call for orderly resumption of production and production under the premise of goodepidemic prevention and control work, formulate a thorough plan for resumption of production and compaction of related work,implement various prevention and control measures, and pass the on-site acceptance of government departments Afterwards, the saferesumption of work was successfully achieved;C. Actively fulfill social responsibilities, go through the same path of "epidemic" road: the company actively fulfills its socialresponsibilities and responsibilities as an influential listed company, actively donates cash and donated epidemic prevention materialsto relevant associations, hospitals, and public welfare organizations, and supports them with practical actions Anti-epidemic frontline;and donated anti-epidemic materials to the company's subsidiaries and agents in Italy, the United States and Spain.
(7) Social honors: During the reporting period, the company won the honorary awards such as "Guangdong May Day LaborCertificate" and "Foshan Benchmark High-tech Enterprise".
2. Performance of social responsibility for targeted poverty alleviation
During the reporting year, the company has not carried out targeted poverty alleviation work, and has no follow-up targeted povertyalleviation plan.
3. Environmental protection related situation
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmentalprotection departmentNONeither the company nor its subsidiaries belong to the key pollutant discharge units announced by the environmental protectiondepartment.
XIX. Explanation of other major issues
√Applicable □ Not applicable
1. The listing and circulation of non-publicly issued restricted shares in 2016
On March 4, 2019, Tang Zhuolin, CCIC Investment Co., Ltd., Sheng Ji Equity Investment Fund (Shanghai) Co., Ltd., and TibetAutonomous Region Investment Co., Ltd. and other companies were 2016 non-public offering targets. 98,039,214 shares withrestricted sales were lifted. For details, please refer to the “Informative Announcement Concerning the Listing and Circulation ofNon-publicly Issued Restricted Shares in 2016” disclosed by the company on March 1, 2019 (announcement number: 2019-021).
2. Adjust the share repurchase plan
On April 8, 2019, the company convened the 33rd (interim) meeting of the third session of the Board of Directors, which reviewed andapproved the "Proposal on Adjusting the Plan for Repurchasing Shares by Centralized Auction Transaction", clarifying that therepurchased shares will be used for equity Incentive or employee stock ownership plan; clear repurchase price range not exceeding 6yuan / share and not less than 3 yuan / share; clear repurchase capital range not exceeding 200 million yuan and not less than 100million yuan; widening the repurchase Source of funds; follow-up arrangements for newly repurchased shares. For details, please referto the company's "Publishing Scheme for Central Stock Auctions" (Announcement Number: 2019-028) and "Announcement onAdjusting the Plan for Buying Stocks Centralized Auctions" (Announcement) disclosed on April 10, 2019 Number: 2019-027).
XX. Major matters of the company's subsidiaries
□ Applicable √ Not applicable
Section 6 Changes in Shares and Shareholders
I. Changes in shares
1. Changes in shares
Unit: shares
| Before this change | Increase and decrease of this change (+,-) | After this change | |||||||
| Number | percentage | Issuing new shares | Stock giving | Provident Fund Conversion to shares | others | In total | number | percentage | |
| I.Shares with restricted sales | 810,960,567 | 44.11% | 0 | 0 | 0 | -79,101,091 | -79,101,091 | 731,859,476 | 39.80% |
| 1. National holdings | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2. State-owned legal person holding shares | 246,953,111 | 13.43% | 0 | 0 | 0 | 109,916,454 | 109,916,454 | 356,869,565 | 19.41% |
| 3. Other domestic-funded shares | 564,007,456 | 30.68% | 0 | 0 | 0 | -189,017,545 | -189,017,545 | 374,989,911 | 20.39% |
| Among them: domestic legal person holding shares | 343,652,172 | 18.69% | 0 | 0 | 0 | -188,347,825 | -188,347,825 | 155,304,347 | 8.45% |
| Domestic natural person | 220,355,284 | 11.98% | 0 | 0 | 0 | -669,720 | -669,720 | 219,685,564 | 11.95% |
| holding shares | |||||||||
| 4. Foreign shareholding | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Among them: Overseas legal person holding shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Overseas natural person holdings | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| II.Unrestricted shares | 1,027,686,529 | 55.89% | 0 | 0 | 0 | 79,101,091 | 79,101,091 | 1,106,787,620 | 60.20% |
| 1. RMB common stock | 1,027,686,529 | 55.89% | 0 | 0 | 0 | 79,101,091 | 79,101,091 | 1,106,787,620 | 60.20% |
| 2. Domestically listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 3. Foreign-listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 4.Others | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| III.Total shares | 1,838,647,096 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,838,647,096 | 100.00% |
Reasons for changes in shares
√Applicable □ Not applicable
1. The non-public issuance of restricted shares in 2016 was listed and circulated on March 4, 2019On March 4, 2019, Tang Zhuolin, CCIC Investment Co., Ltd., Sheng Ji Equity Investment Fund (Shanghai) Co., Ltd., and TibetAutonomous Region Investment Co., Ltd. and other companies were 2016 non-public offering targets, and the companies held were
2016 non-public offerings. 98,039,214 shares with restricted sales were lifted.Among them, Mr. Tang Zhuolin's number of shares released for sale this time was 19,607,843 shares. Mr. Tang Zhuolin currentlyserves as the company's chairman. During his tenure, he calculates the transferable statutory quota based on 25% of the shares held atthe end of the previous year. Therefore, after the lifting of the restricted sales, Mr. Tang Zhuolin ’s transferable statutory quota willnot change. The shares released this time will be locked by Zhongdeng Company according to law, and the nature of the 19,607,843shares held by Mr. Tang Zhuolin will change from the restricted shares after the initial launch executives lock stocks.
2. The shares of the company held by the senior executives who left during the reporting period were locked according to lawMr. Xiang Xianqing has resigned from the company's head of finance since January 11, 2019 due to personal reasons. After resigning,he will not hold other positions in the company. For personal reasons, Ms. Yang Yali resigned from the company's board of directors onJanuary 28, 2019. After resigning, she did not hold other positions in the company. According to the provisions of laws and regulations,the shares of the company held by the above-mentioned personnel shall be locked according to law from the date of declaration ofresignation.
3. The register of company shareholders provided by the “issuer E channel” system of China Securities Depository andClearing Co., Ltd. Shenzhen Branch: during the reporting period, the nature of the shareholders of Peking University, whichheld more than 5% of the shares, became “state-owned legal person”After inquiring the company's shareholder register through the “issuer E channel” system of China Securities Depository andClearing Co., Ltd. Shenzhen Branch, the company found that: During the reporting period, the nature of the shareholders of Pulead,which held more than 5% of the shareholders, changed from “domestic non-state-owned legal person” It is a "state-owned legalperson". Regarding the change in the nature of this share, the company has first learned from shareholders Beijing University thereason for the change and the specific situation. As of the date of disclosure of this report, the company has not received anyfeedback from Peking University regarding this change.According to relevant regulations, the share data disclosed by listed companies shall be subject to the information contained in theregister of shareholders provided by China Securities Depository and Clearing Corporation Limited. The company disclosed thechanges in the company's shares during the reporting period based on the register of shareholders provided by China SecuritiesDepository and Clearing Corporation Limited.
4. The shares held by some outgoing executives were released during the reporting periodAccording to data from the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd., from December 16, 2019, part
of the company's outgoing executives held 100% of the shares held by the company.Approval of share changes
□ Applicable √ Not applicable
Transfer of share changes
□ Applicable √ Not applicable
Implementation progress of share repurchase
√ Applicable □ Not applicable
The company held the twenty-fifth meeting of the third board of directors and the second extraordinary general meeting of shareholderson July 2, 2018 and July 27, 2018, respectively, and reviewed and approved the Share Proposal Proposal, agreeing to the companywithin a 12-month period from the date of consideration and approval of the share repurchase plan at the general meeting ofshareholders, to repurchase the company ’s shares through a centralized auction transaction, the repurchase price shall not exceed 10yuan / share, and use its own funds No more than RMB 200 million.According to the "Implementation Rules for the Repurchase of Shares of Listed Companies on the Shenzhen Stock Exchange" andrelated requirements, the company convened the 33rd (temporary) meeting of the third session of the Board of Directors on April 8,2019. The Proposal of Share Repurchase Scheme by Trading Method, the adjusted share repurchase scheme clarifies the upper andlower limits of the total capital of repurchased shares (upper limit is RMB 200 million and the lower limit is RMB 100 million) and theprice range of repurchased shares (no More than RMB 6 yuan / share, not less than RMB 3 yuan / share), and clarified the purpose andpurpose of the share repurchase (the shares repurchased for the company's equity incentive plan or employee stock ownership plan).On April 29, 2019, the company received the “Letter on the Provisional Proposal for the Increase of the 2018 Annual General Meetingof Shareholders of Guangdong Dongfang Precision Technology Co., Ltd.” from Beiqi Investment, a shareholder holding more than 5%of the shares. Temporary proposal "Proposal on Terminating the Company's Repurchase of Shares". On April 30, 2019, thethirty-seventh (interim) meeting of the third board of directors of the company made a resolution and agreed to submit the interimproposal "Proposal on Terminating the Company's Share Repurchase" to the company's 2018 annual shareholders' meeting forconsideration. On May 10, 2019, the company's 2018 annual shareholders' meeting made a resolution, and after the shareholders votedat the meeting, it reviewed and rejected the "Proposal on Terminating the Company's Share Repurchase". The resolution on the sharerepurchase made by the company's second extraordinary general meeting in 2018 is still legal and valid.
As of the close of business on July 26, 2019, the implementation period of the company's share repurchase expired.In the interval from July 28, 2018 to July 26, 2019, the company accumulated 35,000,063 shares repurchased in a centralized auctiontransaction, and the proportion of repurchased shares accounted for about 1.90% of the company's total share capital; the highestturnover of repurchased shares The price is 5.07 yuan / share, the lowest transaction price is 4.14 yuan / share, and the averagetransaction price is 4.57 yuan / share; the cumulative use of funds to buy back shares is about 160 million yuan.Progress in the implementation of centralized bidding to reduce holdings of repurchased shares
□ Applicable √ Not applicable
The impact of share changes on financial indicators such as basic earnings per share and diluted earnings per share in the most recentyear and the most recent period, and net assets per share attributable to the company's common shareholders
□ Applicable √ Not applicable
Other content deemed necessary by the company or required by the securities regulatory agency
□ Applicable √ Not applicable
2. Changes in restricted shares
√Applicable □ Not applicable
Unit: shares
| Name of shareholder | Number of shares at the beginning of the period | Increase the number of restricted shares in the current period | Number of shares with restricted sales lifted in the current period | Number of restricted shares at the end of the period | Reasons for restriction | Lift date |
| Xiang Xianqing | 43,200 | 14,400 | 57,600 | 0 | Since January 11, 2019, he ceased to serve as a senior manager of the | 25% will be unlocked from |
| company, and the shares of the company he holds are locked according to law from the date of declaration of resignation. The shares transferred each year within six months after the expiration of the original term of office shall not exceed 25% of the total shares held by the company. | July 11, 2019; 75% will be unlocked from December 16, 2019; a total of 43,200 shares will be released. | |||||
| Xu Zhen | 153,600 | 153,600 | 0 | Since September 25, 2017, he ceased to be a senior management of the company. The shares held by the company shall be locked according to law from the date of declaration of resignation. The shares transferred each year within six months after the expiration of the original term of office shall not exceed 25% of the total shares held by the company. | Since March 28, 2018, 32,000 shares have been lifted; from December 16, 2019, 153,600 shares have been lifted. | |
| Yang Yali | 472,920 | 157,640 | 630,560 | 0 | Since January 28, 2019, he will no longer serve as the company's senior management. The shares held by the company shall be locked according to law from the date of declaration of resignation. The shares transferred each year within six months after the expiration of the original term of office shall not exceed 25% of the | From July 29, 2019, 25% of locks will be released; from December 16, 2019, 75%; 472,920 shares will be released. |
| total shares held by the company. | ||||||
| Construction Investment Investment Co., Ltd. | 39,215,685 | 39,215,685 | 0 | Due to participating in the company's non-public offering of shares, and promising that the company's non-public offering of shares it subscribes shall not be transferred within 36 months from the listing date (March 4, 2016) | March, 4, 2019 | |
| Sheng Ji Equity Investment Fund (Shanghai) Co., Ltd. | 19,607,843 | 19,607,843 | 0 | Due to participating in the company's non-public offering of shares, and promising that the company's non-public offering of shares it subscribes shall not be transferred within 36 months from the listing date (March 4, 2016) | March, 4, 2019 | |
| Tibet Autonomous Region Investment Co., Ltd. | 19,607,843 | 19,607,843 | 0 | Due to participating in the company's non-public offering of shares, and promising that the company's non-public offering of shares it subscribes shall not be transferred within 36 months from the listing date (March 4, 2016) | March, 4, 2019 | |
| In total | 79,101,091 | 172,040 | 79,273,131 | 0 | -- | -- |
II. Securities issuance and listing
1. Securities issuance (excluding preferred shares) during the reporting period
□ Applicable √ Not applicable
2. Explanation of changes in the total number of company shares and shareholder structure, changes in company assets andliability structure
□ Applicable √ Not applicable
3. The existing internal employee shares
□ Applicable √ Not applicable
III. Shareholders and actual controllers
1. The number of company shareholders and shareholdings
Unit: shares
| Total number of ordinary shareholders at the end of the reporting period | 47,778 | The total number of ordinary shareholders at the end of the previous month before the disclosure date of the annual report | 50,278 | Total number of preferred shareholders with voting rights restored at the end of the reporting period (if any) (see Note 8) | 0 | Total number of preferred shareholders with voting rights restored at the end of the previous month prior to the disclosure of the annual report (if any) (see Note 8) | 0 |
| Shareholders holding more than 5% of the shares or the top 10 shareholders | ||||||||
| Name of shareholder | Nature of shareholders | Shareholding ratio | Number of shares held at the end of the reporting period | Changes during the reporting period | Number of shares with limited sales conditions | Number of shares holding unlimited sales | Pledge or freeze situation | |
| Share status | Quantity | |||||||
| Tang Zhuolin | Domestic natural person | 14.72% | 270,737,568 | 203,053,176 | 67,684,392 | Pledge | 183,200,000 | |
| Pulead Technology Industry Co.,Ltd. | State-owned legal person | 10.24% | 188,347,825 | 188,347,825 | Freeze | 188,347,825 | ||
| Tang Zhuomian | Domestic natural person | 7.39% | 135,885,134 | 135,885,134 | ||||
| Beijing Automotive Group Industry Investment Co.,Ltd. | State-owned legal person | 6.47% | 118,956,522 | 118,956,522 | Freeze | 48,511,689 | ||
| Contemporary Amperex Technology Co. Limited | Domestic non-state-owned legal person | 6.20% | 114,000,000 | 114,000,000 | Freeze | 46,490,368 | ||
| Beiqi Foton Motor Co., Ltd. | State-owned legal person | 2.70% | 49,565,218 | 49,565,218 | Freeze | 20,213,204 | ||
| Ruan Huili | Domestic natural person | 2.46% | 45,170,332 | 45,170,332 | ||||
| Qinghai Puren Intelligent Technology R & D Center (Limited Partnership) | Domestic non-state-owned legal person | 2.25% | 41,304,347 | 41,304,347 | Freeze | 26,628,340 | ||
| Construction Investment Investment Co., Ltd. | State-owned legal person | 2.13% | 39,215,685 | 39,215,685 | ||||
| Luzhou Industrial Investment Group Co., Ltd. | State-owned legal person | 1.73% | 31,770,010 | 31,770,010 | ||||
| Strategic investors or general legal persons become top 10 shareholders due to placing new shares (if any) (see note 3) | None | |||||||
| Explanation of the above-mentioned shareholders' related relationship or concerted action | Mr. Tang Zhuolin and Mr. Tang Zhuomian are brothers. On August 18, 2010, the two signed a "Consistent Action Agreement." Pulead Technology Industry Co., Ltd. and Qinghai Puren Intelligent Technology R & D Center (Limited Partnership) are parties acting in concert. Beijing Automotive Group Industrial Investment Co., Ltd. and Beiqi Foton Motor Co., Ltd. are parties acting in concert. The company is not aware of whether there is an associated relationship or concerted action among other shareholders. | |||||||
| Shareholdings of the top 10 shareholders with unlimited sales | ||||||||
| Name of shareholder | Number of shares with unlimited sales held at the end of the reporting period | Types of shares | ||||||
| Types of shares | Quantity | |||||||
| Tang Zhuomian | 135,885,134 | RMB common stock | 135,885,134 | |||||
| Tang Zhuolin | 67,684,392 | RMB common stock | 67,684,392 | |||||
| Ruan Huili | 45,170,332 | RMB common | 45,170,332 | |||||
| stock | |||
| Construction Investment Investment Co., Ltd. | 39,215,685 | RMB common stock | 39,215,685 |
| Luzhou Industrial Investment Group Co., Ltd. | 31,770,010 | RMB common stock | 31,770,010 |
| Huarong Securities-China Merchants Securities-Huarong Youzhi No. 1 Collective Asset Management Plan | 31,372,549 | RMB common stock | 31,372,549 |
| Sheng Ji Equity Investment Fund (Shanghai) Co., Ltd. | 19,607,843 | RMB common stock | 19,607,843 |
| Chen Lijun | 14,928,100 | RMB common stock | 14,928,100 |
| Ruan Weixing | 14,704,108 | RMB common stock | 14,704,108 |
| Hong Kong Securities Clearing Company Limited | 11,900,418 | RMB common stock | 11,900,418 |
| Explanation of the relationship or concerted action among the top 10 shareholders of unrestricted shares outstanding, and between the top 10 shareholders of unrestricted shares | Mr. Tang Zhuolin and Mr. Tang Zhuomian are brothers. On August 18, 2010, the two signed a "Consistent Action Agreement." The company is not aware of whether there is an associated relationship or a concerted action among the other top 10 shareholders with unrestricted shares outstanding and the top 10 shareholders, or between the top 10 | ||
| outstanding and the top 10 shareholders | shareholders with unrestricted shares outstanding. |
| Explanation of the top 10 common stock shareholders' participation in financing and securities lending business (if any) (see Note 4) | Not applicable |
Whether the top 10 ordinary shareholders of the company and the top 10 ordinary shareholders of unrestrictedshares in the report period conducted agreed repurchase transactions
□ Yes √ No
The top 10 common stock shareholders of the company and the top 10 common stock shareholders withunrestricted sales conditions did not engage in agreed buyback transactions during the reporting period.
2. The company's controlling shareholder
Nature of controlling shareholder: natural person holdingType of controlling shareholder: natural person
| Name of controlling shareholder | Nationality | Whether to obtain the right of abode in other countries or regions |
| Tang Zhuolin | CHINA | NO |
| Main occupations and positions | Chairman of Dongfang Precision | |
| During the reporting period, the shareholding of other domestic and foreign listed companies holding and participating in the stock | Not applicable | |
Controlling shareholder changes during the reporting period
□ Applicable √ Not applicable
The controlling shareholder of the company has not changed during the reporting period.
3. The actual controller of the company and its persons acting in concert
Nature of actual controller: domestic natural personType of actual controller: natural person
| Name of actual controller | Relationship with actual controller | Nationality | Whether to obtain the right of abode in other countries or regions |
| Tang Zhuolin | himself | China | NO |
| Tang Zhuomian | Concerted action (including agreement, relatives, same control) | China | NO |
| Main occupations and positions | Mr. Tang Zhuolin's main position is Chairman of Dongfang Precision | ||
| List of domestic and foreign listed companies that have controlled in the past 10 years | Not applicable | ||
Change of actual controller during the reporting period
□ Applicable √ Not applicable
During the reporting period, the actual controller has not changed.
Block diagram of the property rights and control relationship between the company and the actual controller
The actual controller controls the company through trust or other asset management methods
□ Applicable √ Not applicable
4. Other corporate shareholders holding more than 10% of the shares
√ Applicable □ Not applicable
| Name of legal shareholder | Legal representative / person in charge | Date of establishment | Registered capital | Main business or management activities |
| Pulead Technology Industry Co.,Ltd. | Gao li | December, 10, 1999 | 80 million yuan | Mainly engaged in the research and development, production, sales and service of lithium-ion battery materials, electric vehicle power battery packs, and energy storage battery packs. |
5. Controlling shareholders, actual controllers, restructuring parties and other undertaking entities to limitthe reduction of shares
□ Applicable √ Not applicable
Section 7 Preference Shares
□ Applicable √ Not applicable
During the reporting period, the company did not have preferred shares.
Section 8 Relevant Information on Convertible Corporate Bonds
□ Applicable √ Not applicable
There was no convertible corporate bonds in the company during the reporting period.
Section 9 Directors, Supervisors, Senior Management and Employees
I. Changes in shareholding of directors, supervisors and senior management
| Name | Job title | Job status | Gender | Age | Term start date | End of term date | Number of shares held at the beginning of the period (shares) | Number of shares increased in the current period (shares) | Number of shares decreased in the current period (shares) | Other changes (shares) | Number of shares held at the end of the period (shares) |
| Tang Zhuolin | Chairman of the Board | Current | Male | 56 | July 22, 2010 | June 16, 2019 | 270,737,568 | 270,737,568 | |||
| Qiu Yezhi | Director and General Manager | Current | Female | 47 | July 22, 2010 | June 16, 2019 | 22,176,518 | 22,176,518 | |||
| Xie Weiwei | Director and Deputy General Manager | Current | Male | 45 | June 16, 2016 | June 16, 2019 | |||||
| Mai Zhirong | Independent Director | Current | Male | 48 | June 16, 2016 | June 16, 2019 | |||||
| Peng Xiaowei | Independent Director | Current | Male | 48 | June 16, 2016 | June 16, 2019 | |||||
| He Weifeng | Independent Director | Current | Male | 58 | June 16, 2016 | June 16, 2019 |
| Zhou Wenhui | Board Secretary | Current | Male | 46 | January 29, 2019 | June 16, 2019 | |||||
| Chen Huiyi | Chairman of the Supervisory Board | Current | Female | 34 | May 19, 2017 | June 16, 2019 | 480 | 480 | |||
| Zhao Xiuhe | Employee Representative Supervisor | Current | Male | 48 | June 16, 2016 | June 16, 2019 | |||||
| Cen Meiling | Supervisor | Current | Female | 40 | May 10, 2013 | June 16, 2019 | |||||
| Yang Yali | Secretary of the Board of Directors | Left | Female | 41 | October 24, 2013 | January 28, 2019 | 630,560 | 630,560 | |||
| Xiang Xianqing | Chief Financial Officer | Left | Male | 44 | June 20, 2016 | January 11, 2019 | 57,600 | 57,600 | |||
| Zhu Yu | Chief Financial Officer | Left | Female | 36 | January 11, 2019 | April 29, 2019 | |||||
| In total | -- | -- | -- | -- | -- | -- | 293,602,726 | 0 | 0 | 0 | 293,602,726 |
II. The company's directors, supervisors, senior management personnel changes
√Applicable □ Not applicable
| Name | Position | Type | Date | Reason |
| Xiang Xianqing | Head of Finance | Left | January 11, 2019 | Personal reasons |
| Zhu Yu | Head of Finance | Left | April 29, 2019 | Personal reasons |
| Qiu Yezhi | Head of Finance | Appointment | April 29, 2019 | In order to adapt to the company's international management requirements and efficiently coordinate the coordination of the financial management of molecular companies worldwide, to ensure efficient decision-making and effective implementation of related matters, the board of directors decided that the company's general manager Qiu Ms. Zhi also serves as the company's chief financial officer. |
| Yang Yali | Secretary of the Board of Directors | Left | January 28, 2019 | Personal reasons |
| Zhou Wenhui | Secretary of the Board of Directors | Appointment | January 28, 2019 | All directors voted unanimously and decided to appoint Mr. Zhou Wenhui as the company's board secretary. |
III.The position
The current background of the company's current directors, supervisors, senior management personnel, major work experience andthe main responsibilities in the company
1. Board members
Tang Zhuolin: Male, Chinese nationality, born in 1963, no right of permanent residence abroad. He used to be director of NanhaiGuicheng Donger Plastic Textile Factory and director of Nanhai Guicheng Donger Printing Machinery Factory. Since 1996, he hasserved successively as chairman, general manager and chief engineer of Dongfang Precision, and currently serves as chairman of thecompany, director of Dongfang Precision (Hong Kong) Co., Ltd., director of Dongfang Precision (Netherlands) Co., Ltd., and deputyof Beijing Pride New Energy Battery Technology Co., Ltd. Chairman, Director of Italian Fosber Group, Chairman of Suzhou Parsun
Power Machinery Co., Ltd., Chairman of Guangdong Fosper Intelligent Equipment Co., Ltd., member of the CPPCC Nanhai District,executive director of the Ninth Council of the China Packaging Federation, Guangdong Food and Executive Director of PackagingMachinery Industry Association, Vice Chairman of Foshan Machinery Equipment Industry Association, Honorary Chairman ofNanhai Machinery Equipment Industry Association, Vice Chairman of Foshan High-tech Zone Chamber of Commerce, ViceChairman of Foshan Nanhai District Listing Association.Qiu Yezhi: Female, Chinese nationality, born in 1972, Master of Business Administration, no right of permanent residence abroad.Since 1996, he has successively served as Director of the Office of General Manager of Dongfang Precision, Assistant to GeneralManager, General Manager of Operations, Deputy General Manager, and General Manager. From July 2010 to October 2013, heserved as the company's general manager and board secretary. He is currently the director and general manager of the company, thevice chairman of the Italian Fosber Group, the director of the American Fosber, the director of Suzhou Parsun Power Machinery Co.,Ltd., and the director of Guangdong Fosber Intelligent Equipment Co., Ltd.Xie Weiwei: Male, Chinese nationality, born in 1974, graduated from Huazhong University of Science and Technology in 2008,Master of Business Administration. He used to be the executive deputy general manager of Foshan United TransportationCorporation, chairman of Foshan East Freight Yard Railway Logistics Co., Ltd., deputy chief of the reform and development sectionof Foshan SASAC, deputy director of investment department and director of asset management department of Foshan FinancialInvestment Holding Co., Ltd. He is currently the deputy general manager of the company and a director of Parsun Power.Mai Zhirong: Male, Chinese nationality, born in 1971, graduated from the CPC Guangdong Provincial Party School in 1999,graduated from the Central Radio and Television University in 2007 with a bachelor degree in accounting, and is a certified publicaccountant, registered asset appraiser, and registered tax accountant. He has served as the accountant of Nanhai Branch ofGuangdong Development Bank and the auditor of Nanhai Auditor's Office. He is currently the deputy director of Foshan NanhaiJunlang Certified Public Accountants Co., Ltd., an independent director of Dongfang Precision, and an independent director ofHanlan Environmental Co., Ltd.Peng Xiaowei: Male, Chinese nationality, born in December 1971, graduated with a bachelor's degree in industrial chemistry fromShanghai Electric Power University in 1995, graduated and assigned to work in Foshan Power System. He was named a chemicalengineer in 2001 and passed the first national judicial examination in 2002. From 2003 to 2015, he worked as a full-time lawyer andpartner in Guangzhou Jinpeng Law Firm. He is currently a senior partner of Beijing Yingke (Guangzhou) Law Firm and anindependent director of Guangdong Shenglu Communication Technology Co., Ltd.He Weifeng: Male, Chinese nationality, born in 1961. Master of Mechanical Engineering, Guangdong University of Technology, is
currently an associate professor of Guangdong University of Technology, deputy director of the Department of PackagingEngineering of the School of Mechanical and Electrical Engineering, and an independent director of Dongfang Precision. Mr. HeWeifeng has been engaged in teaching and research of packaging engineering and printing technology for 20 years. He has designedand developed packaging and printing machinery and equipment such as bag-type packaging machines, pillow-type packagingmachines and box-making machines.
2. Members of the Supervisory Board
Chen Huiyi, female, Chinese nationality, born in 1985, university degree. He used to be the assistant of quality control department ofDongfang Plastic Products Co., Ltd. He joined Dongfang Precision in 2010 and is currently the secretary of the company's generalmanager and chairman of the company's board of supervisors.Cen Meiling, female, Chinese nationality, born in 1979, college degree, once worked in Foshan Weida Metal Products Co., Ltd.Since 2004, he has been a nuclear price engineer in the office of General Manager of Dongfang Precision. He has served as thecompany's supervisor since May 2013.Zhao Xiuhe, male, Chinese nationality, born in 1971, technical secondary school education, joined Dongfang Precision in February2006 as executive director of the printing press business department. He has served as the company's employee representativesupervisor since June 2016.
1.Senior management
Qiu Yezhi, the current general manager of the company, see the relevant description in "1. Board members" above.Xie Weiwei, the current deputy general manager of the company, see the relevant description in "1. Board members" above for hisresume.Zhou Wenhui: Male, Chinese nationality, born in 1973, without permanent residency abroad, master's degree. He has served as theinvestment director of Beijing Taiying Investment Management Co., Ltd., the head of the wealth center of Guoxin Securities BeijingManagement Headquarters, the investment director of Beijing Zhongcai Venture Capital Co., Ltd., and the manager of ChinaAviation Technology Industry Co., Ltd. He joined Guangdong Dongfang Precision Technology Co., Ltd. in August 2018 and iscurrently the vice president and secretary of the board of directors.Position in shareholder units
□ Applicable √ Not applicable
Position in other units
√ Applicable □ Not applicable
| Name of staff | Name of other organization | Positions held in other organization | Term start date | Term end date | Whether to receive remuneration allowance in other organization |
| Tang Zhuolin | Dongfang Precision（HK） | director | January, 30, 2013 | NO | |
| Tang Zhuolin | Dongfang Precision（Netherland） | director | October, 29,2013 | NO | |
| Tang Zhuolin | Fosber Group | director | September,1,2017 | YES | |
| Tang Zhuolin | Dongfang Precision（Europe） | Chairman | June, 1, 2016 | NO | |
| Tang Zhuolin | Yinglian Digital | director | May, 11, 2017 | NO | |
| Tang Zhuolin | Fosber Asia | Legal representative, chairman | September, 30, 2014 | NO | |
| Tang Zhuolin | Parsun Power | Legal representative, chairman | December, 11, 2018 | Feburary,26, 2020 | NO |
| Tang Zhuolin | Suzhou Shunyi Investment Co., Ltd. | Legal representative, executive director, general | July, 2, 2015 | NO |
| manager | |||||
| Tang Zhuolin | Shenzhen Xianglin Venture Capital Co., Ltd. | General Manager, Executive Director | June, 26, 2015 | NO | |
| Tang Zhuolin | Shenzhen Zhiquan Venture Capital Co., Ltd. | Supervisor | May, 26, 2016 | YES | |
| Tang Zhuolin | Shenzhen Zhiwei Venture Capital Co., Ltd. | Supervisor | May, 17, 2016 | November, 4, 2019 | NO |
| Tang Zhuolin | Shenzhen Shenghui Venture Capital Co., Ltd. | Supervisor | May, 28,2016 | NO | |
| Qiu Yezhi | Fosber Group | director | September, 1, 2017 | YES | |
| Qiu Yezhi | Fosber US | director | September, 1, 2017 | YES | |
| Qiu Yezhi | Fosber Asia | director | September,30, 2014 | NO | |
| Qiu Yezhi | Dongfang Precision（Europe） | director | June, 1, 2016 | NO | |
| Qiu Yezhi | Yinglian Digital | director | May, 11,2017 | NO | |
| Qiu Yezhi | Parsun Power | director | May,24,2015 | NO | |
| Qiu Yezhi | Shenzhen Xianglin Venture Capital Co., Ltd. | Supervisor | May, 26, 2016 | NO | |
| Qiu Yezhi | Shenzhen Shenghui Venture Capital Co., Ltd. | General Manager, Executive Director | May,18,2015 | YES |
| Xie Weiwei | Parsun Power | director | May,24,2015 | NO | |
| Xie Weiwei | Suzhou Shunyi Investment Co., Ltd. | Supervisor | July,2,2015 | NO | |
| Xie Weiwei | Jiateng Robot | director | January,20,2018 | YES | |
| Mai Zhirong | Foshan Nanhai Junlang Certified Public Accountants Co., Ltd. | vice director | January,1,2000 | YES | |
| Mai Zhirong | Hanlan Environmental Co., Ltd. | Independent Director | July,1,2014 | YES | |
| Mai Zhirong | Foshan Xinshengda Taxation Firm Co., Ltd. | Manager, Executive Director | November, 4, 2002 | NO | |
| Mai Zhirong | Foshan Tianshun Management Consulting Co., Ltd. | Manager, Executive Director | January,9,2000 | NO | |
| Peng Xiaowei | Beijing Yingke (Guangzhou) Law Firm | Senior Partner | July,1,2015 | YES | |
| Peng Xiaowei | Guangdong Shenglu Communication Technology Co., Ltd. | Independent Director | January,29,2015 | YES | |
| Peng Xiaowei | Guilin Hengtong Energy Development Co., Ltd. | Vice Chairman | May, 10, 2016 | NO | |
| He Weifeng | Guangzhou University of Technology | Associate Professor | July,1,1985 | YES | |
| Description of the position in other units | Not applicable | ||||
Penalties of the company's current directors, supervisors and senior managers and those who have left the company within the
reporting time for the past three years
□ Applicable √ Not applicable
IV. Remuneration of directors, supervisors and senior managementDecision-making procedures, basis for determination, and actual payment of directors, supervisors, and senior managersThe remuneration of directors, supervisors and senior management personnel must be reviewed and approved by the Remunerationand Appraisal Committee and submitted to the Board of Directors for review and approval. The decision-making procedures are inaccordance with the relevant provisions of the Company Law, the Articles of Association and the Implementation Rules of theRemuneration and Appraisal Committee of the Board of Directors. During the reporting period, the company has paid theremuneration to the directors, supervisors and management personnel in full.The remuneration of directors, supervisors and senior management during the reporting period
Unit: ten thousand yuan
| Name | Title | Gender | Age | Position | Total pre-tax remuneration received from the company | Whether to obtain remuneration from related parties of the company |
| Tang Zhuolin | Chairman | male | 56 | Current | 524.91 | YES |
| Qiu Yezhi | Director, General Manager | female | 47 | current | 465.06 | YES |
| Xie Weiwei | Director and Deputy General Manager | male | 45 | current | 103.35 | NO |
| Mai Zhirong | Independent Director | male | 48 | current | 6 | NO |
| Peng Xiaowei | Independent Director | male | 48 | current | 6 | NO |
| He Weifeng | Independent Director | male | 58 | current | 6 | NO |
| Chen Huiyi | Chairman of the Supervisory Board | female | 34 | current | 17.4 | NO |
| Zhao Xiuhe | Employee Supervisor | male | 48 | current | 11.9 | NO |
| Cen Meiling | Supervisor | female | 40 | current | 9.33 | NO |
| Zhou Wenhui | Secretary of the Board | male | 47 | current | 139.59 | NO |
| Zhu Yu | Chief Financial Officer | female | 37 | left | 54.8 | NO |
| Yang Yali | Secretary of the Board | female | 42 | left | 8.37 | NO |
| In total | -- | -- | -- | -- | 1,352.71 | -- |
Directors and senior executives of the company are granted equity incentives during the reporting period
□ Applicable √ Not applicable
V. Company employees
1. Number of employees, professional composition and education level
| Number of employees in the parent company (person) | 540 |
| Number of employees in major subsidiaries (person) | 1,094 |
| Total number of active employees (person) | 1,634 |
| Total number of employees receiving salary in the current period (person) | 1,783 |
| Number of retired employees who need to bear the expenses of the parent company and major subsidiaries (person) | 0 |
| Professional composition | |
| Professional composition category | Professional composition number (person) |
| Production staff | 969 |
| salesperson | 100 |
| Technical staff | 392 |
| Financial officer | 42 |
| administration staff | 131 |
| In total | 1,634 |
| Education level | |
| Education category | Quantity (person) |
| Master degree and above | 45 |
| Undergraduate | 289 |
| College | 447 |
| High school and below | 853 |
| Total | 1,634 |
2. Salary policy
During the year, the company's remuneration policy continued to be guided by the principles of fixed salary, performanceremuneration, job change salary and total amount control, and formed and further improved a competitive comprehensive salarysystem to retain and attract the talents needed for the company's sustainable development.
1. Set salary by position: Determine the relative value of the position according to the duties of the position, and determinethe salary range of the position based on the company's value orientation and the relative value of the position.
2. Performance can be remunerated: the company determines its basic salary part according to the relative value of theposition and individual ability; determines the performance salary in the individual salary structure according to the individualperformance; adjusts the salary according to the employee's individual ability and comprehensive performance.
3. Job change salary: the salary and job position are strictly matched, and the salary is moved to make the salary systemsupport the career development of employees.
4. The principle of total amount control: The total amount of remuneration should be controlled within the scope recognizedby the company. The growth rate of remuneration is lower than the growth rate of sales revenue and profit. Consider the company'sability to pay, so that the company's operating performance supports the growth of total labor costs.
3. Training plan
Dongfang Precision China: The company is equipped with a diverse team of lecturers composed of senior management personnel,backbones of professional skills of various departments and outstanding general skills. Targeted training courses for new employees are100 days, professional ability courses and general ability courses. A total of 53 training sessions were conducted this year, with a totalof 1015 trainees and a total of 332 training hours. Production training takes the form of "teaching with teachers", with differentemphasis on the characteristics and needs of employees at different stages of growth. The production training of the high-end smartequipment business is operated in the form of a project system, emphasizing the cultivation of comprehensive competence qualitiessuch as professional competence, creativity, and execution ability of core R & D positions, and focusing on the reserve of seniortechnical talents. The production training of the core parts business (Parsun Power) adopts a combination of outbound training andinternal training, focusing on the systematic inheritance of talents, rapid development and own beneficial practices.Dongfang Precision's overseas business entity: In 2019, Fosber Group attaches great importance to employee training, especiallyin terms of work safety, process improvement, technical training and English. A total of 17 training courses have been implemented.The cumulative training market has reached 5,000 hours and more than 400 participants . The training duration of the Tiruna Group alsoexceeds 5,000 hours, and the employee participation rate exceeds 85%.
4. Labor outsourcing
√ Applicable □ Not applicable
| Total hours of labor outsourcing (hours) | 6,971 |
| Total remuneration paid for labor outsourcing (yuan) | 288,282.00 |
Section 10 Corporate Governance
I. The basic situation of corporate governanceDuring the reporting period, the company strictly followed the laws of the "Company Law", "Securities Law", "GovernmentGuidelines for Listed Companies", "Shenzhen Stock Exchange Stock Listing Rules", "Shenzhen Stock Exchange SME Board ListedCompanies Standard Operation" and other laws , Regulations, and the requirements of regulations and regulatory documents of theregulatory authorities, constantly improve the corporate governance structure of the company, establish and improve internalmanagement and control systems, and further improve the level of corporate governance.
(1) About shareholders and shareholders meeting
During the reporting period, the company strictly complied with laws and regulations and convened and convened shareholders'meetings in a standardized manner. The convening and convening procedures of the shareholders' general meeting, the qualificationsof the personnel attending the shareholders' general meeting and the voting procedures of the shareholders' general meeting are incompliance with the provisions of the "Company Law", "Rules of General Meetings of Listed Companies", "Articles of Association"and "Rules of Procedure of the General Meeting of Shareholders" Witnessing by lawyers and issuing legal opinions on their legalitycan ensure that all shareholders, especially small and medium shareholders, enjoy equal status and fully exercise their rights.
(2) About the company and the controlling shareholder
During the reporting period, the company correctly handled the relationship with the controlling shareholder in accordance with the"Company Law", "Securities Law", "Articles of Association" and the relevant regulations of the securities regulatory authority. Thecompany ’s controlling shareholder is able to exercise its rights in accordance with the law and assume corresponding obligations.There is no direct or indirect intervention in the company ’s decision-making and business activities beyond the company ’sshareholders’ meeting. The company is independent from the controlling shareholder in terms of business, personnel, assets,organization, and finance. The company has independent and complete business and independent operation capabilities. Thecompany's board of directors, board of supervisors, and internal institutions can operate independently.
(3) About directors and board of directors
During the reporting period, the company elected directors in strict accordance with the procedures for selecting and appointingdirectors as stipulated in the "Articles of Association". The company's board of directors is composed of 6 directors, including 3independent directors. The number and composition of the board of directors meet the requirements of laws and regulations. During
the reporting period, all directors of the company can actively and strictly attend the board meeting and shareholders' meeting inaccordance with the provisions of the "Company Law", "Articles of Association" and "Rules of Procedure of the Board of Directors",actively participate in the training of relevant knowledge and improve business knowledge, Diligent and responsible. The proceduresfor the convening, convening and voting of board meetings of the company are standardized and the daily operations arestandardized.During the reporting period, the company's implementation of the "Rules for the Implementation of the Remuneration and AppraisalCommittee of the Board of Directors", "Implementation Rules for the Audit Committee of the Board of Directors", "ImplementationRules for the Nomination Committee of the Board of Directors", "Management System for the Financial Responsible Person","Entrusted Financial Management System", and "Internal Matters The “Reporting System” and other system rules of the company ’sboard of directors ’special committees and related aspects of the company ’s work have been revised in accordance with the latestspirits and requirements of the current laws, regulations, departmental rules and regulatory documents, and formally becomeeffective after deliberation and approval by the board of directors, continuously improving corporate governance And the degree ofstandardization of operations and the level of scientific and rationalization of related decisions.
(4) About supervisors and board of supervisors
During the reporting period, the company elected supervisors in strict accordance with the selection and appointment proceduresstipulated in the "Articles of Association". The company's board of supervisors consisted of three supervisors, one of whom was anemployee representative supervisor. The number and composition of the board of supervisors met the requirements of laws andregulations. Supervisors perform their duties conscientiously and, in a responsible attitude to shareholders, supervise the company ’sfinances and the legal and compliance performance of the company ’s directors and senior executives to protect their legal rights andinterests. The procedures for the convening, convening and voting of the meetings of the board of supervisors comply with theprovisions of the "Company Law", "Articles of Association" and "Rules of Procedure of the Board of Supervisors".
(5) About the operation of independent directors and special committees of the board of directorsDuring the reporting period, the independent directors of the company performed their duties honestly, diligently and independently inaccordance with the "Company Law" and the regulations of other departments, normative documents and system rules, activelyattended relevant meetings, and seriously considered various proposals of the board of directors. The matter issued independentopinions, effectively safeguarded the interests of the company and shareholders, especially small and medium shareholders, and playeda better role in the supervision of independent directors. Special committees of the company's board of directors also perform theirduties in accordance with the implementation rules of their respective committees.
(6) Information disclosure and transparency
During the reporting period, the company strictly performed relevant information disclosure obligations in accordance with therelevant laws and regulations and the "Information Disclosure Management Measures"; the company could disclose informationtruthfully, accurately, completely and in a timely manner, without false records, misleading statements and major omissions, to ensureAll investors and stakeholders have equal access to company information, which increases company transparency and effectivelyprotects the right of small and medium investors to know.Are there any significant differences between the actual status of corporate governance and the regulatory documents issued by theChina Securities Regulatory Commission on listed company governance
□ Yes √ No
There is no significant difference between the actual status of corporate governance and the regulatory documents issued by the ChinaSecurities Regulatory Commission on the governance of listed companies.
II. The company's independence relative to the controlling shareholder in terms of business,personnel, assets, institutions, finance, etc.Since its establishment, the company has operated in strict accordance with the laws and regulations such as the "Company Law","Securities Law" and the "Articles of Association", and has established and perfected its corporate governance structure. The companyis completely separated from the controlling shareholder and actual controller in terms of business, personnel, assets, institutions,finance, etc. It has an independent and complete business system and the ability to operate independently for the market. All thecompany's production operations or major matters are discussed and determined by the management, the board of directors, and theshareholders' general meeting in accordance with the "Articles of Association" and related systems.
1. Asset independence
The company was changed from a limited liability company as a whole. Before the shareholding restructuring, all assets and personnelentered the joint-stock company and had independent and complete operating assets. After the overall change, the company has all theproduction and operation assets required for production and operation, and there is no dispute about property rights. The company hasproduction systems, auxiliary production systems and supporting facilities related to production and operation, as well as independentraw material procurement and product sales systems. The company's assets are strictly separated from the shareholders and actualcontrollers, and there is no infringement of company assets by shareholders and actual controllers.
2. Independence of personnel
The company has a completely independent management system of labor, personnel, and wages, as well as an independent workforce.It also signs labor contracts with company employees in accordance with the relevant provisions of the Labor Law and the company'slabor management system. Company directors, supervisors and senior management personnel are elected in strict accordance with theprovisions of the "Company Law" and the "Articles of Association". The general manager, deputy general manager, chief financialofficer and secretary to the board of directors and other senior management personnel work full-time in the company salary. The actualcontroller of the company, Mr. Tang Zhuolin, is the chairman of the company. During the process of participating in the management ofthe company, the actual controller exercises its powers in accordance with the relevant provisions of the "Company Law" and "Articlesof Association".
3. Financial independence
The company has an independent financial department, is equipped with full-time financial personnel, has established an independentand perfect financial accounting system, has a standardized financial system, and has implemented an effective financial supervisionand management system and internal control system, which can be based on the "Articles of Association" In accordance with relevantregulations of the company and its own circumstances, it makes independent financial decisions, independently accounts for, and bearsits own profits and losses. The company opens a bank account independently, and there is no situation of sharing the bank account withthe controlling shareholder and the actual controller. As an independent taxpayer, the company independently makes tax declarationsand fulfills payment obligations in accordance with the law, and there is no mixed tax payment with the shareholder unit.
4. Institutional independence
According to the requirements of the "Company Law" and the "Articles of Association", the company has set up a general meeting ofshareholders as the highest authority, the board of directors as the decision-making body, and the board of supervisors as thesupervisory body. The company has a complete internal management system, with corresponding offices and operating departments,and the functional departments divide and collaborate to form an organic independent operating body without interference from thecontrolling shareholder and the actual controller.
5. Business independence
The company's business is independent of the controlling shareholder. It has an independent and complete supply, production and salessystem. It independently decides its business policies and business plans. It can independently control and use human, financial, andphysical elements to smoothly organize and implement production and operation activities. The company is completely independent in
business, there is no reliance on the largest shareholder and actual controller; the company's controlling shareholder does not have ahorizontal competition relationship with the company in business, and the company's controlling shareholder has promised not to carryout operations and the company may occur Competitive business.
III. Competition in the industry
□ Applicable √ Not applicable
IV. Relevant information about the annual general meeting and the extraordinary generalmeeting held during the reporting period
1. The general meeting of shareholders during the reporting period
| Session | Conference type | Investor participation ratio | Convening Date | Disclosure Date | Disclosure index |
| 2018 Annual General Meeting | Annual general meeting | 70.89% | May, 10,2019 | May, 11,2019 | Juchao Information Network (http://www.cninfo.com.cn), Announcement of Resolutions of the Annual General Meeting of 2018 (Announcement Number: 2019-060) |
| The first temporary general meeting in 2019 | Temporary general meeting | 31.43% | December 23,2019 | December 24,2019 | Juchao Information Network (http://www.cninfo.com.cn), the |
2. The shareholders with preferred shares whose voting rights have been restored request an extraordinarygeneral meeting
□ Applicable √ Not applicable
V. The performance of independent directors in the reporting period
1. The status of independent directors attending the board of directors and shareholders' meeting
announcement of theresolution of the firsttemporary generalmeeting of 2019(announcementnumber: 2019-088)Independent directors' attendance at the board of directors and shareholders' meeting
| Independent directors' attendance at the board of directors and shareholders' meeting | |||||||
| Name of Independent Director | Number of participations in the board of directors during the reporting period | Number of on-site board meetings | Number of participation in the board of directors by means of communication | Number of delegates to the board of directors | Absence of the board of directors | Whether you have not attended the board meeting in person for two consecutive times | Number of attending shareholders' meetings |
| Mai Zhirong | 13 | 4 | 9 | 0 | 0 | NO | 2 |
| Peng Xiaowei | 13 | 4 | 9 | 0 | 0 | NO | 2 |
| He Weifeng | 13 | 4 | 7 | 2 | 0 | NO | 2 |
Instructions for not attending the board in person for two consecutive times
2. The situation of independent directors' objections to the company's related matters
Whether the independent director disputes the company's related matters
□ Yes √ No
During the reporting period, the independent directors did not raise any objections to the company's related matters.
3. Other instructions for independent directors to perform their duties
Whether the independent director's recommendations on the company have been adopted
√ Yes □ No
The independent director's explanation of whether the company's recommendations have been adopted or notDuring the reporting period, independent directors of the company performed their duties conscientiously in accordance with relevantlaws and regulations, signed mid-to-long-term deepened strategic cooperation agreements with the company's wholly-ownedsubsidiaries, used idle self-owned funds to purchase financial management product quotas, adjusted the plan to buy back shares throughcentralized auction transactions External guarantees, daily connected transaction estimates, changes in accounting policies and othermatters that should be expressed have issued independent opinions or pre-approval opinions, and are handled in the company to dealwith Pride's performance compensation disputes and are resolved with a package of "Agreement" In the process of disputes,standardize the performance of the duties of independent directors and express opinions on relevant major issues. During the reportingperiod, independent directors' independent opinions and related suggestions based on their professionalism, independence, and thestandpoint of safeguarding the legitimate rights and interests of the majority of small and medium-sized investors were reasonablyadopted by the company.
VI. The special committee under the board of directors performed its duties during thereporting periodThe company's board of directors has three special committees: the audit committee, the nomination committee, and theremuneration and assessment committee. During the reporting period, the Audit Committee of the Board of Directors activelyperformed the duties of the Audit Committee in accordance with the "Articles of Association" and "Implementation Rules of theAudit Committee of the Board of Directors". The committee members focused on the company's financial information and itsdisclosure, the establishment and implementation of internal control system, the progress of internal audit work, the storage and use
of raised funds, the purchase of wealth management products, the provision of guarantees for overseas subsidiaries, etc. The externalaudit agency made the necessary communication and supervision.
VII. Work of the Supervisory CommitteeThe board of supervisors discovered whether the company is at risk during the monitoring activities during the reporting period
□ Yes √ No
The Supervisory Board has no objection to the supervision matters during the reporting period.
VIII. Evaluation and incentives of senior managersThe company has established a complete performance evaluation system and remuneration system for senior management personnel,and has established key performance indicators (KPIs) that are consistent with each job position. The income of the company'smanagement and employees at all levels is linked to their work performance. During the reporting period, the company has assessedand evaluated the senior executives' work capabilities, performance of duties, and fulfillment of responsibility targets in accordancewith key performance indicators, and their remuneration levels are closely linked to the company's operating performance.
IX. Internal control evaluation report
1. The specific situation of major defects in internal control discovered during the reporting period
□ Yes √ No
2. Self-evaluation report of internal control
| Date of full disclosure of internal control evaluation report | April 28, 2020 |
| Internal Control Evaluation Report Full Text Disclosure Index | Published on Juchao Information Network www.cninfo.com.cn |
| The ratio of the total assets of the unit | 97.00% |
| included in the evaluation scope to the total assets of the company's consolidated financial statements | ||
| The ratio of the operating income of the unit included in the evaluation scope to the operating income of the company's consolidated financial statements | 95.00% | |
| Defect identification standard | ||
| category | financial report | Non-financial report |
| Qualitative standards | 1) Signs of major deficiencies in the financial report include: ① the company ’s directors, supervisors, and senior executives ’fraud; ② the company corrects the published financial report; Major misreporting; ④The audit committee and audit department have no effect on the company ’s external financial reports and internal control over financial reports. 2) Signs of important deficiencies in financial reporting include: ① failure to select and apply accounting policies in accordance with generally accepted accounting standards; ② failure to establish anti-fraud procedures and control measures; ③ no corresponding control mechanism or There is no implementation and no corresponding compensatory control; ④ There are one or more defects in the control of the financial | Quantitative standards take operating income and total assets as measurement indicators. If the internal control defects may cause or result in losses related to the profit statement, they shall be measured by operating income indicators. If the defect alone or together with other defects may result in a financial report misreporting amount of less than 0.5% of operating income, it is regarded as a general defect; if it exceeds 0.5% of operating income but less than 1%, it is regarded as an important defect; if it exceeds the operating income 1% is considered as a major defect. If the internal control defects may cause or result in losses related to asset management, they shall be measured by total assets. If the defect alone or |
| reporting process at the end of the period and there is no reasonable guarantee that the prepared financial statements will achieve the true and complete goals. 3) General defects refer to control defects other than the above major defects and important defects. | together with other defects may result in a financial report misreporting amount less than 0.5% of the total assets, it is regarded as a general defect; if it exceeds 0.5% of the total assets but less than 1%, it is regarded as an important defect; if it exceeds 1 of the total assets % Is considered as a major defect. | |
| Quantitative standard | Quantitative judgment is made on the basis of the company's pre-tax profits. Misreports with an amount exceeding 5% of total pre-tax profits are considered as major misstatements, and misstatements with an amount exceeding 3% of total pre-tax profits are considered as major misstatements, and the rest are general Misstatement. | The determination of defects in non-financial reports is mainly based on the extent to which defects affect the effectiveness of business processes and the probability of occurrence. 1) Major defects If the possibility of defects is high, it will seriously reduce the work efficiency or effect, or increase the uncertainty of the effect, or make it seriously deviate from the expected goal. It is a major defect; in addition, the following signs usually indicate non-financial reports There may be major deficiencies in internal control: ① violation of national laws and regulations, such as unqualified product quality; ② management personnel or key technical personnel have been lost; ③ frequent negative news in the media; ④ the results of internal control evaluation are particularly serious or important |
| deficiencies get rectified; | ||
| Number of major defects in financial reports (pieces) | 0 | |
| Number of major defects in non-financial reports (pieces) | 0 | |
| Number of important defects in financial reports (pieces) | 0 | |
| Number of important defects in non-financial reports (pieces) | 0 | |
X. Internal control audit report or assurance reportNot applicable
Section 11 Corporate Bonds
Whether the company has publicly issued and listed on the stock exchange, and has not matured or failed to fully redeem thecorporate bonds on the date of approval of the annual reportno
Section 12 Financial Report
I.Audit report
| Types of audit opinions | Standard unreserved opinion |
| Audit report signing date | April 27, 2020 |
| Audit institution name | BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP |
| Audit report document number | BDO Report [2020] No. ZI10254 |
| CPA name | Chen Yanbo, Song Baojun |
Audit ReportAll shareholders of Guangdong Dongfang Precision Science & Technology Co., Ltd .:
1. Audit opinion
We audited the financial statements of Guangdong Dongfang Precision Science & Technology Co.,Ltd. (hereinafter referred to as "Dongfang Precision"), including the consolidated and parentcompany’s balance sheet on December 31, 2019, the consolidated and parent company’s profitstatement, consolidation and parent company cash flow statement, consolidated and parent companyowner's equity changes statement and notes to related financial statements.We believe that the attached financial statements have been prepared in accordance with therequirements of the Accounting Standards for Business Enterprises in all material respects, and fairlyreflect the financial status of Dongfang Precision’s merger and parent company on December 31,2019 and the 2019 merger and parent company’s operating results and cash flow.
2. The basis for forming the audit opinion
We carried out the audit work in accordance with the provisions of the Auditing Standards forChinese Certified Public Accountants. The "Responsibility of Certified Public Accountants for theAudit of Financial Statements" section of the audit report further elaborated our responsibilities underthese standards. In accordance with the Code of Professional Ethics of Chinese Certified PublicAccountants, we are independent of Dongfang Precision and fulfill other ethical responsibilities. Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
3. Key audit matters
The key audit matters are the matters that we believe are the most important for the audit of thefinancial statements of the current period based on professional judgment. The response to thesematters is based on the audit of the entire financial statements and the formation of audit opinions. Wedo not express separate opinions on these matters. We determined that the following items are the keyaudit items that need to be communicated in the audit report.
| Key audit matters | How did the matter respond in the audit |
| (1) Verifying income | |
| Please refer to the accounting policies mentioned in "Five, Important Accounting Policies and Accounting Estimates" / (24) of the notes to the financial statements, "VII. Notes to the Items of Consolidated Financial Statements" / (40) and "XVII. Financial Statements of the Parent Company" Main project notes "/ (4). Dongfang Precision's 2019 revenue includes | For revenue recognition, we perform the following procedures: (1) Understand, evaluate and test management's internal control related to sales and collection; (2) Check the contract terms and conditions related to the risks and reward transfers in the ownership of the goods, and evaluate whether the company's income confirmation timing meets the requirements |
| new energy battery business, corrugated printing machine business, corrugated board production line business and power machine business. Revenue is mainly derived from the new energy battery business of its subsidiary Beijing Pride New Energy Battery Technology Co., Ltd. (hereinafter referred to as "Beijing Pride"). Its revenue is 7.106 billion yuan, accounting for 71.25% of Dongfang Precision's operating income. The revenue recognition process of the new energy battery business is complex. Revenue is one of the key indicators for evaluating the performance of the management. There is an inherent risk that the management manipulates the timing of revenue recognition to achieve specific goals or expectations. Therefore, we recognize the revenue of the new energy battery business as a key audit matter. | of the enterprise accounting standards; (3) Obtain the sales list of the year, select samples of the revenue transactions recorded this year, check the supporting documents such as sales contracts, final settlement price contracts, invoices, warehouse receipts, signing receipts, customer confirmed settlement statements, etc. Confirm whether it complies with the company's accounting policies; (4) Conduct a cut-off test on the income transactions recorded around the balance sheet date; (5) Implement letter verification procedures for major customers; (6) Pay attention to the fairness of connected transactions. |
| (2) Accounting treatment of the transfer of Beijing Pride's equity and performance compensation | |
| Please refer to the notes to the financial statements "VII. Notes to the consolidated financial statements" / (35) / (47) and "VIII. Changes in the scope of consolidation" / (2). The company transferred the entire share capital of Beijing Pride at a consideration of 1.5 billion | For the accounting treatment of the transfer of equity in Beijing Pride and the acquisition of performance compensation, we perform the following procedures: (1) Obtain and check the agreement and approval |
| yuan. After the disposal, this part will no longer be included in the scope of the merger. At the same time, it received a performance compensation of 1.447 billion yuan from the original shareholders of Beijing Prade. Accounting treatment is more complicated. Therefore, we confirmed the accounting treatment of the transfer of Beijing Pride's equity and the performance compensation payment as a key audit matter. | documents related to this transaction; (2) Check whether the transaction processing related to the transaction complies with the relevant provisions of the "Accounting Standards for Enterprises"; (3) Check whether the presentation and disclosure of this transaction in the financial report are sufficient and appropriate. |
4. Other information
The management team of Dongfang Precision (hereinafter referred to as "management") isresponsible for other information. Other information includes the information covered in DongfangPrecision's 2019 annual report, but does not include the financial statements and our audit report.Our audit opinions on the financial statements do not cover other information, and we do not expressany form of assurance conclusions on other information.In conjunction with our audit of the financial statements, our responsibility is to read otherinformation. In this process, consider whether the other information is significantly inconsistent withthe financial statements or what we learned during the audit or it appears that there are majormisstatements.Based on the work we have performed, if we determine that there is a material misstatement of otherinformation, we should report that fact. In this regard, we have nothing to report.
5. Management and governance responsibilities for financial statementsThe management is responsible for preparing financial statements in accordance with the Accounting
Standards for Business Enterprises to achieve a fair response, and to design, implement and maintainthe necessary internal controls so that there are no major misstatements in the financial statementsdue to fraud or errors.In preparing the financial statements, the management is responsible for assessing the ability ofDongfang Precision to continue operations, disclosing matters related to continuing operations (ifapplicable), and applying the assumption of continuing operations unless liquidation, termination ofoperations or other practical options are planned.The governance layer is responsible for overseeing the financial reporting process of DongfangPrecision.
6. Certified Public Accountants' Responsibility for Auditing Financial StatementsOur goal is to obtain reasonable assurance on whether the overall financial statements are free ofmajor misstatements due to fraud or errors, and to issue audit reports containing audit opinions.Reasonable assurance is a high level of assurance, but it does not guarantee that an audit performedin accordance with the auditing standards will always be discovered when a major misstatementexists. Misreporting may be caused by fraud or error. If it is reasonably expected that themisreporting alone or in combination may affect the economic decisions made by users of thefinancial statements based on the financial statements, the misreporting is generally considered tobe significant.In the process of performing audit work in accordance with auditing standards, we use professionaljudgment and maintain professional suspicion. At the same time, we also perform the followingtasks:
(1) Identify and evaluate the risks of major misstatement of financial statements due to fraud orerrors, design and implement audit procedures to deal with these risks, and obtain sufficient andappropriate audit evidence as the basis for issuing audit opinions. Since fraud may involve collusion,forgery, intentional omissions, misrepresentation, or overriding internal control, the risk of failing todetect major misstatements due to fraud is higher than the risk of failing to detect major
misstatements due to errors.
(2) To understand the internal control related to auditing in order to design appropriate auditingprocedures, but the purpose is not to express an opinion on the effectiveness of internal control.
(3) Evaluate the appropriateness of management's selection of accounting policies and therationality of accounting estimates and related disclosures.
(4) To draw conclusions on the appropriateness of management's use of continuous operationassumptions. At the same time, based on the audit evidence obtained, it is concluded whether thereare significant uncertainties in matters or situations that may cause significant doubts about theability of Dongfang Precision to continue to operate. If we conclude that there is significantuncertainty, the auditing standards require us to draw the attention of the users of the statements tothe relevant disclosures in the financial statements in the audit report; if the disclosures areinsufficient, we should issue a non-unqualified opinion. Our conclusion is based on the informationavailable as of the date of the audit report. However, future events or circumstances may preventDongfang Precision from continuing its operations.
(5) Evaluate the overall presentation (including disclosure), structure and content of the financialstatements, and evaluate whether the financial statements fairly reflect related transactions andevents.
(6) Obtain sufficient and appropriate audit evidence on the financial information of the entities orbusiness activities in Dongfang Precision to express audit opinions on the financial statements. Weare responsible for guiding, supervising and executing group audits, and assume full responsibility foraudit opinions.We communicate with the management on the planned audit scope, schedule and major audit findings,including the internal control deficiencies that we identified in the audit that are worthy of attention.We also provide a statement to the governance regarding compliance with professional ethicsrequirements related to independence, and communicate with the governance about all relationshipsand other matters that may be reasonably considered to affect our independence, as well as relatedpreventive measures (if applicable).
From the matters communicated with the governance layer, we determine which matters are mostimportant for the audit of the financial statements of the current period and thus constitute key auditmatters. We describe these matters in the audit report, unless laws and regulations prohibit publicdisclosure of these matters, or in rare cases, if it is reasonably expected that the negativeconsequences of communicating an event in the audit report exceed the benefits in the public interest,we determine the matter should not be communicated in the audit report.
BDO SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP
Chinese Certified Public Accountant: Chen Yanbai(Project partner)
Chinese Certified Public Accountant: Song BaojunChina?Shanghai
April, 27, 2020
II. Financial StatementsThe unit of the statement in the financial notes is: yuan
1. Consolidated balance sheet
Prepared by: Guangdong Dongfang Precision aScience&Technology Co., Ltd.December 31, 2019
Unit: yuan
| Item | December 31, 2019 | December 31, 2018 |
| Current assets: |
| Money funds | 2,356,703,434.60 | 2,547,345,874.57 |
| Settlement provisions | ||
| Dismantling funds | ||
| Trading financial assets | 1,164,039,381.59 | |
| Financial assets measured at fair value and their changes are included in the current profit and loss | 800,160.93 | |
| Derivative financial assets | ||
| bill receivable | 1,835,883,950.01 | |
| accounts receivable | 597,431,210.02 | 1,496,368,415.86 |
| Receivable financing | 55,447,099.32 | |
| Prepayments | 25,901,123.85 | 39,723,410.14 |
| Premium receivable | ||
| Receivable reinsurance account | ||
| Provision for reinsurance contract receivable | ||
| Other receivables | 79,573,114.49 | 104,911,299.69 |
| Among them: interest receivable | 721,935.36 | 7,885,209.04 |
| Dividend receivable | ||
| Buy back resale financial assets | ||
| Stock | 671,432,701.11 | 935,775,074.07 |
| Contract assets |
| Holding assets for sale | ||
| Non-current assets due within one year | 356,983.48 | |
| Other current assets | 22,346,314.29 | 54,636,044.13 |
| Total current assets | 4,973,231,362.75 | 7,015,444,229.40 |
| Non-current assets: | ||
| Loans and advances | ||
| Debt investment | ||
| Available for sale financial assets | ||
| Other debt investments | ||
| Held to maturity investments | ||
| Long-term receivables | 11,623,598.01 | |
| Long-term equity investment | 72,372,355.03 | 79,771,169.72 |
| Investment in other equity instruments | ||
| Other non-current financial assets | 20,559,159.34 | |
| Investment real estate | ||
| Fixed assets | 585,754,900.75 | 685,262,087.53 |
| Construction in progress | 4,839,241.48 | 10,480,100.82 |
| Productive biological assets | ||
| oil and gas asset | ||
| Right-of-use asset | ||
| Intangible assets | 249,882,429.53 | 341,038,319.94 |
| Development expenditure |
| Goodwill | 306,633,631.93 | 670,286,756.52 |
| Long-term prepaid expenses | 8,699,236.33 | 45,188,773.09 |
| Deferred tax assets | 49,025,021.61 | 119,163,031.39 |
| Other non-current assets | 2,518,818.56 | 8,715,609.47 |
| Total non-current assets | 1,300,284,794.56 | 1,971,529,446.49 |
| total assets | 6,273,516,157.31 | 8,986,973,675.89 |
| Current liabilities: | ||
| Short-term loan | 117,888,353.14 | 250,525,029.95 |
| Borrowing from the Central Bank | ||
| Borrowed funds | ||
| Transactional financial liabilities | ||
| Financial liabilities measured at fair value and whose changes are included in the current profit and loss | ||
| Derivative financial liabilities | ||
| Bills payable | 43,973,859.51 | 990,875,308.24 |
| accounts payable | 472,862,744.45 | 1,588,338,349.43 |
| Advance payment | 286,511,724.62 | 403,630,155.02 |
| Contract liabilities | ||
| Selling back financial assets | ||
| Deposits and Interbank deposit | ||
| Agent trading securities |
| Agent underwriting securities | ||
| Staff payable | 106,677,329.95 | 107,225,672.90 |
| Taxes payable | 48,928,229.51 | 298,253,035.20 |
| Other payables | 90,950,443.16 | 150,463,325.70 |
| Of which: interest payable | 1,410,745.58 | 3,332,499.94 |
| Dividend payable | ||
| Fees and commissions | ||
| Reinsurance accounts payable | ||
| Holding liabilities for sale | ||
| Non-current liabilities due within one year | 353,399,238.29 | 95,200,648.23 |
| Other current liabilities | 59,244.51 | |
| Total current liabilities | 1,521,191,922.63 | 3,884,570,769.18 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long term loan | 224,146,667.48 | 536,358,921.02 |
| Bonds payable | ||
| Of which: preferred stock | ||
| Perpetual debt | ||
| Lease liability | ||
| Long-term payables | ||
| Long-term payable employee | 12,252,657.36 | 10,163,946.95 |
| compensation | ||
| Estimated liabilities | 78,650,466.48 | 452,856,804.45 |
| Deferred income | 18,275,808.90 | 41,528,340.45 |
| Deferred income tax liabilities | 16,915,692.91 | 29,261,746.53 |
| Other non-current liabilities | ||
| Total non-current liabilities | 350,241,293.13 | 1,070,169,759.40 |
| Total Liabilities | 1,871,433,215.76 | 4,954,740,528.58 |
| Owners' equity: | ||
| Share capital | 1,838,647,096.00 | 1,838,647,096.00 |
| Other equity instruments | ||
| Of which: preferred stock | ||
| Perpetual debt | ||
| Capital reserve | 3,862,377,838.84 | 5,298,075,978.80 |
| Minus: treasury shares | 160,088,925.60 | 63,597,455.75 |
| Other comprehensive income | 24,971,085.32 | 20,300,909.34 |
| Special reserves | ||
| Surplus reserve | 51,830,974.45 | 51,830,974.45 |
| General risk preparation | ||
| undistributed profit | -1,280,673,461.14 | -3,118,692,266.64 |
| Total equity attributable to owners of parent company | 4,337,064,607.87 | 4,026,565,236.20 |
| Minority shareholder interest | 65,018,333.68 | 5,667,911.11 |
| Total owner's equity | 4,402,082,941.55 | 4,032,233,147.31 |
| Total Liabilities and Owner's Equity | 6,273,516,157.31 | 8,986,973,675.89 |
Legal representative: Tang Zhuolin Chief in charge of accounting work: Qiu Yezhi Head of accounting institution: Qiu Yezhi
2.Parent Company Balance Sheet
Unit: yuan
| Item | December 31, 2019 | December 31, 2018 |
| Current assets: | ||
| Monetary fund. | 1,899,380,375.38 | 1,570,620,697.54 |
| Transactional financial assets. | 1,163,000,000.00 | |
| Financial assets measured at fair value and whose changes are included in the profits and losses of the current period. | ||
| Derivative financial assets. | ||
| Notes receivable. | 54,212,840.07 | |
| Accounts receivable. | 151,096,214.10 | 121,118,535.06 |
| Receivable financing. | 51,139,322.12 | |
| Advance payment. | 3,233,763.27 | 2,479,601.45 |
| Other receivables. | 36,670,496.12 | 108,624,755.41 |
| Among them: interest receivable. | 7,684,542.37 | |
| Dividend receivable. | ||
| Inventory. | 111,225,290.10 | 136,007,118.35 |
| Contract assets. |
| Hold assets for sale. | ||
| Non current assets due within one year. | 356,983.48 | |
| Other current assets. | 4,961,417.06 | 826,850.50 |
| Total current assets. | 3,421,063,861.63 | 1,993,890,398.38 |
| Non-current assets: | ||
| Debt investment. | ||
| Available-for-sale financial assets. | ||
| Other creditor's rights investment. | ||
| Hold-to-maturity investment. | ||
| Long-term receivables. | 11,623,598.01 | |
| Long-term equity investment. | 439,638,782.00 | 1,339,624,909.25 |
| Investment in other equity instruments. | ||
| Other illiquid financial assets. | ||
| Investment real estate. | ||
| Fixed assets. | 340,791,611.76 | 351,626,001.28 |
| Project under construction. | 83,070.80 | 3,311,436.39 |
| Productive biological assets. | ||
| Oil and gas assets. | ||
| Right to use assets. | ||
| Intangible assets. | 60,733,612.10 | 59,453,607.94 |
| Development expenditure. | ||
| goodwill. |
| Long-term prepaid expenses. | 3,335,014.92 | 3,672,675.03 |
| Deferred income tax assets. | 4,923,465.18 | 3,184,523.16 |
| Other non-current assets. | 585,189.00 | 591,489.00 |
| Total non-current assets. | 850,090,745.76 | 1,773,088,240.06 |
| Total assets. | 4,271,154,607.39 | 3,766,978,638.44 |
| Current liabilities: | ||
| Short-term loan. | 90,000,000.00 | 140,000,000.00 |
| Transactional financial liabilities. | ||
| Financial liabilities measured at fair value and whose changes are included in the profits and losses of the current period. | ||
| Derivative financial liabilities. | ||
| Notes payable. | 43,843,859.51 | 65,409,402.46 |
| Accounts payable. | 70,687,704.41 | 62,615,627.84 |
| Advance payment. | 17,451,789.10 | 24,602,458.76 |
| Contractual liability. | ||
| Salary payable to staff and workers. | 26,144,254.56 | 14,558,039.50 |
| Taxes payable. | 1,921,575.57 | 5,090,075.19 |
| Other payables. | 50,214,415.95 | 59,251,915.06 |
| Among them: interest payable. | ||
| Dividend payable. |
| Hold unsold liabilities. | ||
| Non-current liabilities due within one year. | ||
| Other current liabilities. | ||
| Total current liabilities. | 300,263,599.10 | 371,527,518.81 |
| Non-current liabilities: | ||
| Long-term loan. | ||
| Bonds payable. | ||
| Among them: preferred stock. | ||
| Perpetual debt. | ||
| Lease liability. | ||
| Long-term payable. | ||
| Long-term salary payable to staff and workers. | ||
| Estimated liability. | ||
| Deferred return. | 14,423,631.66 | 15,540,291.66 |
| Deferred income tax liability. | ||
| Other non-current liabilities. | ||
| Total non-current liabilities. | 14,423,631.66 | 15,540,291.66 |
| Total liabilities. | 314,687,230.76 | 387,067,810.47 |
| Owner's equity: | ||
| Capital stock. | 1,838,647,096.00 | 1,838,647,096.00 |
| Other equity instruments. | ||
| Among them: preferred stock. | ||
| Perpetual debt. | ||
| Capital reserve. | 3,608,591,602.42 | 5,055,665,185.99 |
| Minus: inventory stock. | 160,088,925.60 | 63,597,455.75 |
| Other comprehensive income. | ||
| Special reserve. | ||
| Surplus reserve. | 51,830,974.45 | 51,830,974.45 |
| Undistributed profit. | -1,382,513,370.64 | -3,502,634,972.72 |
| Total owner's equity. | 3,956,467,376.63 | 3,379,910,827.97 |
| Total liabilities and owners' equity | 4,271,154,607.39 | 3,766,978,638.44 |
3.Consolidated Income Statement
Unit: yuan
| Item | 2019 | 2018 |
| 1. Total operating income | 9,973,503,602.19 | 6,621,349,618.40 |
| Of which: operating income | 9,973,503,602.19 | 6,621,349,618.40 |
| Interest income | ||
| Premiums earned | ||
| Fee and commission income | ||
| 2. Total operating cost | 9,227,719,587.75 | 6,565,839,150.17 |
| Among them: operating cost. | 8,286,432,074.92 | 5,475,295,358.24 |
| Interest expense. |
| Payment of fees and commission. | ||
| Surrender fund. | ||
| Net indemnity expenditure. | ||
| Draw the net reserve of insurance liability contract. | ||
| Policy dividend expense. | ||
| Reinsurance cost. | ||
| Taxes and surcharges. | 21,756,356.93 | 41,975,683.46 |
| selling expenses. | 414,527,474.88 | 520,723,396.56 |
| Administrative expenses. | 365,218,611.72 | 286,222,575.20 |
| Research and development expenses. | 156,654,915.42 | 218,476,516.42 |
| Financial expenses. | -16,869,846.12 | 23,145,620.29 |
| Among them: interest expense. | 31,945,338.53 | 46,977,084.68 |
| Interest income. | 55,020,801.87 | 27,882,940.18 |
| Plus: other income. | 22,814,061.39 | 7,163,908.20 |
| Investment income (loss with "-" sign). | 1,384,907,790.71 | 32,162,216.90 |
| Among them: the return on investment in collaborative ventures and joint ventures. | 2,541,133.81 | 1,954,952.54 |
| Termination of recognition of income from financial assets measured at amortized cost. | ||
| Exchange gain (loss with "-" sign). | ||
| Net exposure hedging gain (loss with "-" |
| sign). | ||
| Fair value change income (loss with "-" sign). | -302,415.26 | 449,024.86 |
| Loss of credit impairment (loss is listed with "-" sign). | -34,097,839.70 | |
| Loss on impairment of assets (loss with "-" sign). | -109,839,858.68 | -3,955,901,600.48 |
| Income from asset disposal (loss with "-" sign). | 538,255.27 | -677,688.93 |
| 3 Operating profit (losses are listed with "-" sign). | 2,009,804,008.17 | -3,861,293,671.22 |
| Plus: non-operating income. | 12,570,847.05 | 4,458,950.79 |
| Minus: non-operating expenses. | 8,756,961.53 | 5,782,895.49 |
| 4 the total profit (the total loss shall be filled in with the sign "-"). | 2,013,617,893.69 | -3,862,617,615.92 |
| Minus: income tax expenses. | 174,271,939.88 | 6,419,017.76 |
| 5. Net profit (net loss is listed with "-" sign). | 1,839,345,953.81 | -3,869,036,633.68 |
| (1) classified by business sustainability. | ||
| 1. Net profit from continuing operations (net loss with "-" sign). | 1,839,345,953.81 | -3,869,036,633.68 |
| 2.Net profit from termination of operation (net loss with "-" sign). | ||
| (2) Classification according to |
| ownership. | ||
| 1.Net profit attributable to the owner of the parent company. | 1,838,018,805.50 | -3,875,995,219.91 |
| 2.Minority shareholders' profit and loss. | 1,327,148.31 | 6,958,586.23 |
| 6.Net after tax of other comprehensive income. | 4,664,988.99 | 3,824,460.89 |
| Net after tax of other comprehensive income attributable to the owner of the parent company. | 4,670,175.98 | 3,823,913.99 |
| (1) other comprehensive income that cannot be reclassified into profit or loss. | -468,239.41 | 458,290.71 |
| 1. Re-measure the change in the benefit plan. | -468,239.41 | 458,290.71 |
| 2.Other comprehensive income that cannot be transferred to profit or loss under the equity method. | ||
| 3. Changes in fair value of investments in other equity instruments. | ||
| 4. Fair value change of enterprise's own credit risk. | ||
| 5.Other. | ||
| (2)other comprehensive income reclassified into profit or loss. | 5,138,415.39 | 3,365,623.28 |
| 1. Other comprehensive income that can be transferred to profit or loss under the |
| equity method. | ||
| 2.Changes in fair value of other creditor's rights investments. | ||
| 3.Profit or loss on changes in the fair value of available-for-sale financial assets. | ||
| 4.The amount of financial assets reclassified to other comprehensive income. | ||
| 5.Investment held to maturity is reclassified as profit or loss of available-for-sale financial assets. | ||
| 6.Provision for credit impairment of other creditor's rights investment. | ||
| 7.Cash flow hedging reserve. | 159,647.91 | |
| 8.Translation difference of foreign currency financial statements. | 5,138,415.39 | 3,921,223.20 |
| 9.Other. | -715,247.83 | |
| Net after tax of other consolidated income attributable to minority shareholders. | -5,186.99 | 546.90 |
| 7 Total comprehensive income. | 1,844,010,942.80 | -3,865,212,172.79 |
| Total consolidated income attributable to the owner of the parent company. | 1,842,688,981.48 | -3,872,171,305.92 |
| Total consolidated income attributable to | 1,321,961.32 | 6,959,133.13 |
| minority shareholders. | ||
| 8. Earnings per share: | ||
| (1) basic earnings per share. | 1.01 | -2.11 |
| (2) diluted earnings per share | 1.01 | -2.11 |
In the case of a business merger under the same control in the current period, the net profit realized by the merged party before themerger is: yuan, and the net profit realized by the merged party in the previous period is: yuan.Legal representative: Tang Zhuolin, chief in charge of accounting work: Qiu Yizhi, head of accounting institution: Qiu Yizhi
4. Parent company profit statement
Unit: yuan
| Item | 2019 | 2018 |
| I. Business income. | 454,758,259.30 | 435,714,268.65 |
| Minus: operating cost. | 262,093,105.17 | 281,055,010.99 |
| Taxes and surcharges. | 6,236,254.83 | 5,470,394.48 |
| Selling expenses. | 34,298,441.55 | 31,778,183.15 |
| Administrative expenses. | 138,720,475.22 | 66,656,275.04 |
| Research and development expenses. | 32,059,854.28 | 19,557,375.91 |
| Financial expenses. | -12,467,479.41 | -17,440,270.24 |
| Among them: interest expense. | 2,600,209.85 | 9,592,434.48 |
| Interest income. | 15,831,155.76 | 20,495,588.45 |
| Plus: other income. | 12,907,310.77 | 4,844,724.32 |
| Investment income (loss with "-" sign). | 2,131,539,957.20 | 36,704,278.89 |
| Among them: the return on investment in joint ventures and combined ventures. | 2,492,655.15 | 1,071,203.98 |
| Termination of recognition of gains on financial assets measured at amortised cost (loss with "-" sign). | ||
| Net exposure hedging gain (loss with "-" sign). | ||
| Fair value change income (loss with "-" sign). | ||
| Loss of credit impairment (loss is listed with "-" sign). | -2,394,961.06 | |
| Loss on impairment of assets (loss with "-" sign). | -15,761,304.34 | -3,891,904,346.10 |
| Income from asset disposal (loss with "-" sign). | 2,282.78 | -927,211.53 |
| 2. operating profit (loss shall be listed with "-" sign). | 2,120,110,893.01 | -3,802,645,255.10 |
| Plus: non-operating income. | 471,217.36 | 267,324.41 |
| Minus: non-operating expenses. | 1,561,582.33 | 654,697.42 |
| 3. the total profit (the total loss shall be filled in with the sign "-"). | 2,119,020,528.04 | -3,803,032,628.11 |
| Minus: income tax expenses. | -1,101,074.04 | 13,276,379.69 |
| 4. net profit (net loss is listed with "-" | 2,120,121,602.08 | -3,816,309,007.80 |
| sign). | ||
| (1) net profit from continuing operation (net loss with "-" sign). | 2,120,121,602.08 | -3,816,309,007.80 |
| (2) net profit from termination of operation (net loss with "-" sign). | ||
| 5. net after tax of other comprehensive income. | ||
| (1) other comprehensive income that cannot be reclassified into profit or loss. | ||
| 1. Re-measure the change in the benefit plan. | ||
| 2 Other comprehensive income that cannot be transferred to profit or loss under the equity method. | ||
| 3. Changes in fair value of investments in other equity instruments. | ||
| 4. Fair value change of enterprise's own credit risk. | ||
| 5. Other. | ||
| (2) other comprehensive income reclassified into profit or loss. | ||
| 1. Other comprehensive income that can be transferred to profit or loss under the equity method. |
| 2 Changes in fair value of other creditor's rights investments. | ||
| 3. Profit or loss on changes in the fair value of available-for-sale financial assets. | ||
| 4. The amount of financial assets reclassified to other comprehensive income. | ||
| 5. Investment held to maturity is reclassified as profit or loss of available-for-sale financial assets. | ||
| 6. Provision for credit impairment of other creditor's rights investment. | ||
| 7. Cash flow hedging reserve. | ||
| 8. Conversion difference of foreign currency financial statements. | ||
| 9. Other | ||
| 6. Total comprehensive income. | 2,120,121,602.08 | -3,816,309,007.80 |
| 7. Earnings per share: | ||
| (1) basic earnings per share. | ||
| (2) diluted earnings per share |
5. Consolidated statement of cash flows
Unit: yuan
| Item | 2019 | 2018 |
| 1. Cash flow generated by business activities: | ||
| Cash received from the sale of goods and the provision of services. | 5,761,214,275.00 | 5,143,728,487.67 |
| Net increase in customer deposits and interbank deposits. | ||
| Net increase in borrowing from the central bank. | ||
| Net increase in funds transferred to other financial institutions. | ||
| Cash received from the premium of the original insurance contract. | ||
| Net cash received from reinsurance business. | ||
| Net increase in depositors' deposits and investment funds. | ||
| Cash that collects interest, commission and commission. | ||
| Net increase in borrowed funds. | ||
| Net increase in funds for repurchase business. | ||
| Net cash received by agents buying and selling securities. |
| Tax refund received. | 56,214,687.70 | 41,596,820.90 |
| Receipt of other cash related to business activities. | 154,398,867.89 | 79,212,100.76 |
| Subtotal cash inflows from operating activities. | 5,971,827,830.59 | 5,264,537,409.33 |
| Cash paid for the purchase of goods and services. | 4,191,776,389.52 | 3,569,267,888.21 |
| Net increase in customer loans and advances. | ||
| Net increase in central bank and interbank deposits. | ||
| Cash to pay the indemnity of the original insurance contract. | ||
| Net increase in loan funds | ||
| Cash for the payment of interest, fees and commissions. | ||
| Cash for the payment of policy dividends. | ||
| Cash paid to and for employees. | 616,716,506.72 | 479,239,903.98 |
| Taxes and fees paid. | 538,853,364.60 | 224,518,779.74 |
| Payment of other cash related to business activities. | 343,183,782.74 | 269,786,036.28 |
| Subtotal cash outflow from operating activities. | 5,690,530,043.58 | 4,542,812,608.21 |
| Net cash flow from operating activities. | 281,297,787.01 | 721,724,801.12 |
| 2. Cash flow generated by investment activities: | ||
| Recover the cash received from the investment. | 50,155,610.55 | |
| Cash received from investment income. | 86,362,638.82 | 31,212,081.72 |
| Net cash recovered from disposal of fixed assets, intangible assets and other long-term assets. | 813,403.84 | 2,743,109.78 |
| Disposal of net cash received by subsidiaries and other business units. | 1,441,474,803.51 | |
| Receipt of other cash related to investment activities. | 3,329,848,750.00 | 3,709,171,000.00 |
| Subtotal cash inflows from investment activities. | 4,858,499,596.17 | 3,793,281,802.05 |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets. | 138,131,940.70 | 70,012,587.09 |
| Cash paid for investment. | 36,900,193.48 | 53,132,758.62 |
| Net increase in pledged loans. | ||
| Obtain net cash paid by subsidiaries and other business units. | 98,967,727.73 | |
| Payment of other cash related to investment activities. | 4,462,987,540.01 | 2,825,000,000.00 |
| Subtotal cash outflow from investment activities. | 4,736,987,401.92 | 2,948,145,345.71 |
| Net cash flow from investment activities. | 121,512,194.25 | 845,136,456.34 |
| 3 Cash flow generated by fund-raising activities: | ||
| Absorb the cash received by the investment. | 23,429,873.60 | |
| Among them: the subsidiary absorbs the cash received from the investment of minority shareholders. | ||
| Cash received for obtaining loans. | 201,906,337.33 | 852,673,436.34 |
| Receipt of other cash related to fund-raising activities. | 160,901,245.51 | 547,179,900.44 |
| Subtotal cash inflows from fund-raising activities. | 362,807,582.84 | 1,423,283,210.38 |
| Cash paid to repay debts. | 411,199,705.69 | 1,167,241,455.12 |
| Cash paid for the distribution of dividends, profits, or interest payments. | 90,133,272.77 | 106,985,583.26 |
| Among them: dividends and profits paid by subsidiaries to minority shareholders. | 3,000,000.00 | |
| Payment of other cash related to fund-raising activities. | 104,173,489.68 | 556,760,355.46 |
| Subtotal cash outflow from fund-raising | 605,506,468.14 | 1,830,987,393.84 |
| activities. | ||
| Net cash flow from fund-raising activities. | -242,698,885.30 | -407,704,183.46 |
| 4. The impact of exchange rate changes on cash and cash equivalents. | 8,616,199.08 | -190,973.09 |
| 5. net increase in cash and cash equivalents. | 168,727,295.04 | 1,158,966,100.91 |
| Plus: balance of cash and cash equivalents at the beginning of the period. | 2,057,997,442.35 | 899,031,341.44 |
| 6 Balance of cash and cash equivalents at the end of the period | 2,226,724,737.39 | 2,057,997,442.35 |
6.Parent company cash flow statement
Unit: yuan
| Item | 2019 | 2018 |
| 1. Cash flow generated by business activities: | ||
| Cash received from the sale of goods and the provision of services. | 444,873,626.35 | 407,311,750.84 |
| Tax refund received. | 19,746,348.95 | 13,318,277.32 |
| Receipt of other cash related to business activities. | 97,820,120.67 | 26,241,555.25 |
| Subtotal cash inflows from operating activities. | 562,440,095.97 | 446,871,583.41 |
| Cash paid for the purchase of goods and services. | 265,624,733.00 | 274,427,636.33 |
| Cash paid to and for employees. | 85,050,092.27 | 73,539,657.99 |
| Taxes and fees paid. | 20,194,213.41 | 22,637,036.00 |
| Payment of other cash related to business activities. | 102,153,093.47 | 54,491,223.17 |
| Subtotal cash outflow from operating activities. | 473,022,132.15 | 425,095,553.49 |
| Net cash flow from operating activities. | 89,417,963.82 | 21,776,029.92 |
| 2. Cash flow generated by investment activities: | ||
| Recover the cash received from the investment. | ||
| Cash received from investment income. | 85,531,992.66 | 35,633,070.58 |
| Net cash recovered from disposal of fixed assets, intangible assets and other long-term assets. | 13,015.56 | 1,366,649.00 |
| Disposal of net cash received by subsidiaries and other business units. | 1,500,000,000.00 | |
| Receipt of other cash related to investment activities. | 3,339,848,750.00 | 3,718,171,000.00 |
| Subtotal cash inflows from investment activities. | 4,925,393,758.22 | 3,755,170,719.58 |
| Cash paid for the purchase and construction of fixed assets, intangible | 6,938,291.51 | 11,094,970.99 |
| assets and other long-term assets. | ||
| Cash paid for investment. | 36,900,193.48 | 43,807,958.62 |
| Obtain net cash paid by subsidiaries and other business units. | ||
| Payment of other cash related to investment activities. | 4,502,648,750.00 | 2,775,000,000.00 |
| Subtotal cash outflow from investment activities. | 4,546,487,234.99 | 2,829,902,929.61 |
| Net cash flow from investment activities. | 378,906,523.23 | 925,267,789.97 |
| 3. Cash flow generated by fund-raising activities: | ||
| Absorb the cash received by the investment. | ||
| Cash received for obtaining loans. | 90,000,000.00 | 140,000,000.00 |
| Receipt of other cash related to fund-raising activities. | 18,702,498.63 | 187,781,849.60 |
| Subtotal cash inflows from fund-raising activities. | 108,702,498.63 | 327,781,849.60 |
| Cash paid to repay debts. | 140,000,000.00 | 250,000,000.00 |
| Cash paid for the distribution of dividends, profits, or interest payments. | 2,307,471.27 | 63,055,655.22 |
| Payment of other cash related to fund-raising activities. | 96,510,768.15 | 66,190,959.98 |
| Subtotal cash outflow from fund-raising activities. | 238,818,239.42 | 379,246,615.20 |
| Net cash flow from fund-raising activities. | -130,115,740.79 | -51,464,765.60 |
| 4. The impact of exchange rate changes on cash and cash equivalents. | ||
| 5.net increase in cash and cash equivalents. | 338,208,746.26 | 895,579,054.29 |
| Plus: balance of cash and cash equivalents at the beginning of the period. | 1,432,283,149.36 | 536,704,095.07 |
| 6. Balance of cash and cash equivalents at the end of the period | 1,770,491,895.62 | 1,432,283,149.36 |
7.Consolidated statement of changes in owners' equity
Current amount
Unit: yuan
| Item | 2019 | ||||||||||||||
| Belong to the owner's equity of the parent company | Minority shareholders' rights and interests | Total owner's equity | |||||||||||||
| Capital stock | Other equity instruments | Capital reserve | Minus: inventory stock | Other comprehensive income | Special reserve | Surplus reserve | General risk preparation | Undistributed profit | Other | In total | |||||
| Preferred stock | Perpetual debt | Other | |||||||||||||
| I. the balance at the end of last year | 1,838,647,096.00 | 5,298,075,978.80 | 63,597,455.75 | 20,300,909.34 | 51,830,974.45 | -3,118,692,266.64 | 4,026,565,236.20 | 5,667,911.11 | 4,032,233,147.31 | ||||||
| Plus: | |||||||||||||||
| accounting policy change | |||||||||||||||
| Prophase error correction | |||||||||||||||
| Business merger under the same control | |||||||||||||||
| other | |||||||||||||||
| 2 Balance at the | 1,838,647,096.00 | 5,298,075,978.80 | 63,597,455.75 | 20,300,909.34 | 51,830,974.45 | -3,118,692,266.64 | 4,026,565,236.20 | 5,667,911.11 | 4,032,233,147.31 |
| beginning of the current year | |||||||||||||||
| 3 The amount of change in the current period (to be filled in with the sign "-") | -1,435,698,139.96 | 96,491,469.85 | 4,670,175.98 | 1,838,018,805.50 | 310,499,371.67 | 59,350,422.57 | 369,849,794.24 | ||||||||
| (I) Total consolidated income | 96,491,469.85 | 4,670,175.98 | 1,838,018,805.50 | 1,746,197,511.63 | 1,321,961.32 | 1,747,519,472.95 |
| (2)owners' investment and reduction of capital | -1,435,698,139.96 | -1,435,698,139.96 | 58,344,033.37 | -1,377,354,106.59 | |||||||||||
| 1. Common stock invested by the owner | |||||||||||||||
| 2．Capital invested by holders of other equity instrume |
| nts | |||||||||||||||
| 3．The amount of share payment included in the owner's equity | |||||||||||||||
| 4．other | -1,435,698,139.96 | -1,435,698,139.96 | 58,344,033.37 | -1,377,354,106.59 | |||||||||||
| (3) profit distribution | |||||||||||||||
| 1. Draw surplus reserve |
| 2. Extract general risk preparedness | |||||||||||||||
| 3. Allocation to owners (or shareholders) | |||||||||||||||
| 4．other | |||||||||||||||
| (4) Internal carry-over of owners' |
| rights and interests | |||||||||||||||
| 1. Capital reserve to increase capital (or equity) | |||||||||||||||
| 2. Transfer of surplus reserve to capital (or equity) | |||||||||||||||
| 3. Surplus reserve to |
| make up for losses | |||||||||||||||
| 4. Set the amount of changes in the benefit plan to carry forward retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward |
| retained earnings | |||||||||||||||
| 6．other | |||||||||||||||
| (5) Special reserve | |||||||||||||||
| 1. Current extraction | |||||||||||||||
| 2. Current use | |||||||||||||||
| (6)other | -315,572.12 | -315,572.12 | |||||||||||||
| 3.TThe balance at the end | 1,838,647,096.00 | 3,862,377,838.84 | 160,088,925.60 | 24,971,085.32 | 51,830,974.45 | -1,280,673,461.14 | 4,337,064,607.87 | 65,018,333.68 | 4,402,082,941.55 |
Previous period amount
Unit: yuan
of thecurrentperiod
Item
| Item | 2018 | ||||||||||||||
| Belong to the owner's equity of the parent company | Minority shareholders' rights and interests | Total owner's equity | |||||||||||||
| Capital stock | Other equity instruments | Capital reserve | Minus: inventory stock | Other comprehensive income | Special reserve | Surplus reserve | General risk preparation | Undistributed profit | Other | In total | |||||
| Preferred stock | Perpetual debt | Other | |||||||||||||
| I. the balance at the end of last year | 1,149,154,435.00 | 5,644,338,848.99 | 16,476,995.35 | 51,830,974.45 | 809,008,015.53 | 7,670,809,269.32 | 41,957,402.70 | 7,712,766,672.02 | |||||||
| Plus: accounting | |||||||||||||||
| policy change | |||||||||||||||
| Prophase error correction | |||||||||||||||
| Business merger under the same control | |||||||||||||||
| other | |||||||||||||||
| 2 Balance at the beginning of the current year | 1,149,154,435.00 | 5,644,338,848.99 | 16,476,995.35 | 51,830,974.45 | 809,008,015.53 | 7,670,809,269.32 | 41,957,402.70 | 7,712,766,672.02 | |||||||
| 3 The amount of change in | 689,492,661.00 | -346,262,870.19 | 63,597,455.75 | 3,823,913.99 | -3,927,700,282.17 | -3,644,244,033.12 | -36,289,491.59 | -3,680,533,524.71 |
| the current period (to be filled in with the sign "-") | |||||||||||||||
| (I) Total consolidated income | 3,823,913.99 | -3,875,995,219.91 | -3,872,171,305.92 | 6,959,133.13 | -3,865,212,172.79 | ||||||||||
| (2)owners' investment and reduction of capital | 343,229,790.81 | 63,597,455.75 | 279,632,335.06 | 279,632,335.06 | |||||||||||
| 1. Common stock invested by the owner | |||||||||||||||
| 2．Capital invested by |
| holders of other equity instruments | |||||||||||||||
| 3．The amount of share payment included in the owner's equity | |||||||||||||||
| 4．other | 343,229,790.81 | 63,597,455.75 | 279,632,335.06 | 279,632,335.06 | |||||||||||
| (3) profit distribution | -51,705,062.26 | -51,705,062.26 | -3,000,000.00 | -54,705,062.26 | |||||||||||
| 1. Draw surplus reserve | |||||||||||||||
| 2. Extract |
| general risk preparedness | |||||||||||||||
| 3. Allocation to owners (or shareholders) | -51,705,062.26 | -51,705,062.26 | -3,000,000.00 | -54,705,062.26 | |||||||||||
| 4．other | |||||||||||||||
| (4) Internal carry-over of owners' rights and interests | 689,492,661.00 | -689,492,661.00 | |||||||||||||
| 1. Capital reserve to increase capital (or | 689,492,661.00 | -689,492,661.00 |
| equity) | |||||||||||||||
| 2. Transfer of surplus reserve to capital (or equity) | |||||||||||||||
| 3. Surplus reserve to make up for losses | |||||||||||||||
| 4. Set the amount of changes in the benefit plan to carry forward retained earnings |
| 5. Other comprehensive income carried forward retained earnings | |||||||||||||||
| 6．other | |||||||||||||||
| (5) Special reserve | |||||||||||||||
| 1. Current extraction | |||||||||||||||
| 2. Current use | |||||||||||||||
| (6) other | -40,248,624.72 | -40,248,624.72 | |||||||||||||
| 4.The balance at | 1,838,647,096.00 | 5,298,075,978.80 | 63,597,455.75 | 20,300,909.34 | 51,830,974.45 | -3,118,692,266.64 | 4,026,565,236.20 | 5,667,911.11 | 4,032,233,147.31 |
8、Statement of changes in owners' equity of the parent company
Current amount
Unit: yuan
the end ofthe currentperiod
Item
| Item | 2019 | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Minus: inventory stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Other | Total owner's equity | |||
| Preferred stock | Perpetual debt | Other | ||||||||||
| I. the balance at the end of last year | 1,838,647,096.00 | 5,055,665,185.99 | 63,597,455.75 | 51,830,974.45 | -3,502,634,972.72 | 3,379,910,827.97 | ||||||
| Plus: accounting policy change | ||||||||||||
| Prophase error | ||||||||||||
| correction | ||||||||||||
| Other | ||||||||||||
| 2 Balance at the beginning of the current year | 1,838,647,096.00 | 5,055,665,185.99 | 63,597,455.75 | 51,830,974.45 | -3,502,634,972.72 | 3,379,910,827.97 | ||||||
| 3 The amount of change in the current period (to be filled in with the sign "-") | -1,447,073,583.57 | 96,491,469.85 | 2,120,121,602.08 | 576,556,548.66 | ||||||||
| (I) Total consolidated income | 2,120,121,602.08 | 2,120,121,602.08 | ||||||||||
| (II) Owners' investment and reduction of capital | -1,447,073,583.57 | 96,491,469.85 | -1,543,565,053.42 | |||||||||
| 1. Common stock invested by the owner | ||||||||||||
| 2. Capital invested by |
| holders of other equity instruments | ||||||||||||
| 3. The amount of share payment included in the owner's equity | ||||||||||||
| 4．Other | -1,447,073,583.57 | 96,491,469.85 | -1,543,565,053.42 | |||||||||
| (3) profit distribution | ||||||||||||
| 1. Draw surplus reserve | ||||||||||||
| 2. Allocation to owners (or shareholders) | ||||||||||||
| 3．Other | ||||||||||||
| (4) Internal carry-over of owners' rights and interests |
| 1. Capital reserve to increase capital (or equity) | ||||||||||||
| 2. Transfer of surplus reserve to capital (or equity) | ||||||||||||
| 3. Surplus reserve to make up for losses | ||||||||||||
| 4. Set the amount of changes in the benefit plan to carry forward retained earnings | ||||||||||||
| 5. Other comprehensive income carried forward retained earnings |
| 6．Other | ||||||||||||
| (5) Special reserve | ||||||||||||
| 1. Current extraction | ||||||||||||
| 2. Current use | ||||||||||||
| (6) other | ||||||||||||
| 4 The balance at the end of the current period | 1,838,647,096.00 | 3,608,591,602.42 | 160,088,925.60 | 51,830,974.45 | -1,382,513,370.64 | 3,956,467,376.63 |
Previous period amount
Unit: yuan
| Item | 2018 | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Minus: inventory stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Other | Total owner's equity | |||
| Preferred | Perpetual debt | Other | ||||||||||
| stock | ||||||||||||
| I. the balance at the end of last year | 1,149,154,435.00 | 5,745,173,828.91 | 51,830,974.45 | 365,379,097.34 | 7,311,538,335.70 | |||||||
| Plus: accounting policy change | ||||||||||||
| Prophase error correction | ||||||||||||
| Other | ||||||||||||
| 2 Balance at the beginning of the current year | 1,149,154,435.00 | 5,745,173,828.91 | 51,830,974.45 | 365,379,097.34 | 7,311,538,335.70 | |||||||
| 3 The amount of change in the current period (to be filled in with the sign "-") | 689,492,661.00 | -689,508,642.92 | 63,597,455.75 | -3,868,014,070.06 | -3,931,627,507.73 | |||||||
| (I) Total consolidated income | -3,816,309,007.80 | -3,816,309,007.80 |
| (II) owners' investment and reduction of capital | -15,981.92 | 63,597,455.75 | -63,613,437.67 | |||||||||
| 1. Common stock invested by the owner | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. The amount of share payment included in the owner's equity | ||||||||||||
| 4．Other | -15,981.92 | 63,597,455.75 | -63,613,437.67 | |||||||||
| (3)profit distribution | -51,705,062.26 | -51,705,062.26 | ||||||||||
| 1. Draw surplus reserve |
| 2. Allocation to owners (or shareholders) | -51,705,062.26 | -51,705,062.26 | ||||||||||
| 3．Other | ||||||||||||
| (4)Internal carry-over of owners' rights and interests | 689,492,661.00 | -689,492,661.00 | ||||||||||
| 1. Capital reserve to increase capital (or equity) | 689,492,661.00 | -689,492,661.00 | ||||||||||
| 2.Transfer of surplus reserve to capital (or equity) | ||||||||||||
| 3. Surplus reserve to make up for losses | ||||||||||||
| 4. Set the amount of |
| changes in the benefit plan to carry forward retained earnings | ||||||||||||
| 5.Other comprehensive income carried forward retained earnings | ||||||||||||
| 6．Other | ||||||||||||
| (5) Special reserve | ||||||||||||
| 1. Current extraction | ||||||||||||
| 2. Current use | ||||||||||||
| (6) other | ||||||||||||
| 4 The balance at the end of the current period | 1,838,647,096.00 | 5,055,665,185.99 | 63,597,455.75 | 51,830,974.45 | -3,502,634,972.72 | 3,379,910,827.97 |
III. Basic information of the companyGuangdong Dongfang Precision Science& Technology Co., Ltd. (hereinafter referred to as "the Company" or“Company"), formerly known as Nanhai Dongfang Carton Machinery Industry Co., Ltd., was established onDecember 9, 1996. and obtained the registration number 440682000040868 "enterprise legal person businesslicense". With the approval of the Securities Regulatory Commission of China Securities Regulatory Commission[2011] No. 1237 on approval of the initial Public offering of Guangdong Dongfang Precision Science&Technology Co., Ltd., the Company issued RMB ordinary shares to the public and was listed on the ShenzhenStock Exchange in August 2011. Since 2016, the company has adopted the unified social credit code:
914406002318313119.The company belongs to the intelligent packaging equipment industry.As of December 31st, 2019, the cumulative total issued share capital of the Company is 1838647096.00 shares,registered at No. 2 Qiangshi Road, Shishan Town, Nanhai District, Foshan City, Foshan City, GuangdongProvince (Office Building, Factory A, B), Headquarter address: No. 2 Qiangshi Road, Shishan Town, NanhaiDistrict, Foshan City, Guangdong Province.The company's main business scope is: processing, manufacturing, sales: carton printing presses and accessories,general machinery and accessories, providing after-sales services, brokerage services, technical consultingservices, installation services; import and export of goods, technology import and export (except for projectsprohibited by laws and administrative regulations; projects restricted by laws and administrative regulations mustobtain permission before operating).The actual control of the company is Tang Zhuolin and Tang Zhuomian.This financial statement has been approved by all the directors of the company on April 27, 2020.
As of December 31, 2019, the subsidiaries within the scope of the consolidated financial statements of theCompany are as follows:
| Dongfang Precision (Hong Kong) Co., Ltd. (hereinafter referred to as "Dongfang Precision (Hong Kong)"). |
| Dong Fang Precision(Netherland)Cooperatief U.A.(hereinafter referred to as "Dongfang Precision (Netherlands)"). |
| Guangdong Fossberg Intelligent equipment Co., Ltd. (hereinafter referred to as "Fosber Asia"). |
| Suzhou Shunyi Investment Co., Ltd. (hereinafter referred to as "Shunyi Investment"). |
| Beijing Pride* |
As of 31 December 2019, the subsidiaries indirectly held by the Company within the consolidated financialstatements are as follows:
| Name of subsidiary indirectly held. |
| Fosber S.p.A.(hereinafter referred to as "Fosber Group"). |
| Fosber America, Inc.(hereinafter referred to as "Fosber USA"). |
| Fosber (Machinery) Tianjin Co., Ltd. (hereinafter referred to as "Fosber Tianjin"). |
| Suzhou Parsun Power Machinery Co., Ltd. (hereinafter referred to as "Parsun Power"). |
| Changzhou Pride New Energy Battery Technology Co., Ltd. (hereinafter referred to as "Changzhou Pride"). |
| EDF EUROPE S.R.L (hereinafter referred to as "Italian EDF"). |
| Tiruna Group Industrial, S.L. (hereinafter referred to as "Tiruna Group"). |
| Tiruna S.L.U. |
| Tratatamientos Industriales Tiruna S.A.U. |
| Tiruna Brazil |
| Tiruna France SARL |
| SCI Candan |
| Tiruna UK Ltd |
| Guangdong Tiruna |
| Tiruna America inc.(hereinafter referred to as "Tiruna USA") |
*During the current period, the company disposed of 100% of the equity of Beijing Pride, and the delivery wascompleted on December 25, 2019. From December 26, 2019, Beijing Pride will no longer be included in themerger.The scope and changes of the consolidated financial statements for the current period are detailed in this note"VIII. Changes in the consolidated scope" and "IX. Interests in other subjects".
IV. The basis for the preparation of financial statements.
1. The basis of establishment.
On the basis of continuous operation, according to the actual transactions and events, in accordance with theAccounting Standards for Enterprises-basic Standards issued by the Ministry of Finance and various specificaccounting standards, guidelines for the application of accounting standards for enterprises, interpretation ofaccounting standards for enterprises and other relevant provisions (hereinafter collectively referred to as"accounting standards for enterprises"), And the disclosure provisions of the China Securities RegulatoryCommission "rules No. 15 on Information Disclosure of companies issuing Securities publicly-General provisionson Financial reports" for the preparation of financial statements.
2. Continuous operation.
There are no matters affecting the continuing operation ability of the Company, and it is expected that the Companywill have the continuing operation ability in the next 12 months. The financial statements of the Company areprepared on the basis of the continuing operation assumption.
V Important accounting policies and accounting estimates.
Tips for specific accounting policies and accounting estimates:
The following disclosures have covered the specific accounting policies and accounting estimates formulated by theCompany according to the characteristics of actual production and operation. See "V, (24) income" in this note fordetails.
1. Declaration of compliance with accounting standards for enterprises.
These financial statements meet the requirements of the accounting standards for enterprises issued by the Ministryof Finance and truly and completely reflect the merger of the Company on December 31, 2019 and the financialposition of the parent company, as well as the operating results and cash flow of the parent company in 2019.
2. Accounting period.
It is a fiscal year from January 1 to December 31 of the Gregorian calendar.
3. Business cycle.
The business cycle of our company is 12 months.
4、Bookkeeping standard currency
| Company name | Bookkeeping standard currency |
| The Company and its subsidiaries in China | RMB |
| Fosber Group | EURO |
| Fosber US | US DOLLARS |
| Dongfang Precision (Hongkong) | US DOLLARS |
| Dongfang Precision (Netherland) | EURO |
| Italian EDF | EURO |
| Tiruna Group | EURO |
| Tiruna S.L.U. | EURO |
| Tratatamientos Industriales Tiruna S.A.U. | EURO |
| Tiruna Brazil | Real |
| Tiruna France SARL | Franc |
| SCI Candan | Franc |
| Tiruna UK Ltd | British Pound |
| Tiruna US | US DOLLARS |
5. The accounting treatment of business combination under the same control and non-same control.Business merger under the same control: the assets and liabilities acquired by the merging party in the businesscombination shall be measured according to the book value of the assets and liabilities of the merged party(including the goodwill formed by the acquisition of the merged party by the ultimate controlling party) in theconsolidated financial statements of the ultimate controlling party on the merger date. The difference between thebook value of the net assets obtained in the merger and the book value of the consolidated consideration paid (or thetotal par value of the shares issued) shall be adjusted, the equity premium in the capital reserve shall be adjusted, andif the equity premium in the capital reserve is insufficient to be offset, the retained earnings shall be adjusted.Business merger under different control: on the date of purchase, the assets paid and liabilities incurred or assumedby the purchaser as consideration for the merger shall be measured at fair value, and the difference between the fairvalue and its book value shall be recorded into the profits and losses of the current period. The difference of the fairvalue share of the identifiable net assets obtained by the purchaser in the merger shall be recognized as goodwill ifthe merger cost is greater than the fair value share of the identifiable net assets obtained in the merger; the merger
cost shall be less than the difference in the fair value share of the identifiable net assets acquired in the merger andshall be recorded in the profits and losses of the current period.The directly related expenses incurred for the business merger shall be recorded into the profits and losses of thecurrent period when they occur; the transaction costs for issuing equity securities or debt securities for the enterprisemerger shall be included in the initial recognition amount of the equity securities or debt securities.
6. The method of compiling consolidated financial statements.
1. Merge scope.
The consolidated scope of the consolidated financial statements is determined on the basis of control, whichincludes the Company and all subsidiaries.
2 Merge program.The company prepares consolidated financial statements on the basis of the financial statements of itself and itssubsidiaries and on the basis of other relevant information. The company prepares consolidated financialstatements and regards the entire enterprise group as an accounting entity, in accordance with the recognition,measurement and presentation requirements of the relevant enterprise accounting standards and in accordancewith unified accounting policies, reflect the overall financial position, operating results and cash flow of theenterprise group.If the accounting policies and accounting periods adopted by all subsidiaries included in the consolidated financialstatements are consistent with those of the company, if the accounting policies and accounting periods adopted bythe subsidiaries are inconsistent with those of the company, necessary adjustments shall be made in accordancewith the company's accounting policies and accounting periods when preparing the consolidated financialstatements. For subsidiaries acquired by non-merger under the same control, the financial statements shall beadjusted on the basis of the fair value of identifiable net assets on the date of purchase. For a subsidiary acquiredby a merger under the same control, the financial statements shall be adjusted on the basis of the book value of itsassets and liabilities (including the goodwill formed by the acquisition of the subsidiary by the ultimatecontrolling party) in the financial statements of the ultimate controlling party.
The minority shareholders' shares of subsidiary owners' equity, current net profit and loss and currentcomprehensive income are separately shown under the owner's equity item in the consolidated balance sheet,under the net profit item in the consolidated income statement and under the total comprehensive income item.The current loss shared by the minority shareholders of the subsidiary exceeds the balance formed by the minorityshareholders' share in the initial owner's equity of the subsidiary, deducting the minority shareholders' rights andinterests.
(1) Increase the number of subsidiaries or businesses.
During the reporting period, if a subsidiary or business is increased as a result of a business merger under thesame control, the beginning of the consolidated balance sheet shall be adjusted, and the income, expenses andprofits of the subsidiary or business combination from the beginning of the current period to the end of thereporting period shall be included in the consolidated income statement. The cash flow from the beginning of thecurrent period to the end of the reporting period of the subsidiary or business combination shall be included in theconsolidated cash flow statement, and the relevant items of the comparative statement shall be adjusted as if thecombined report subject has been in existence since the final control party began to control.If it is possible to control the investee under the same control due to additional investment and other reasons, theparties involved in the merger shall be deemed to adjust in their current state when the final controlling partybegins to control. For equity investments held prior to the acquisition of control of the merged party, the relevantprofit and loss, other comprehensive income and other changes in net assets have been recognized between thedate of acquisition of the original equity and the date of control of the merged party and the merged party, thechanges in profit and loss, other comprehensive income and other net assets have been offset against the initialretained earnings or current profits and losses in the comparative statement period, respectively.During the reporting period, if a subsidiary or business is increased as a result of a merger not under the samecontrol, the beginning of the consolidated balance sheet period shall not be adjusted; the income, expenses andprofits of the subsidiary or business from the purchase date to the end of the reporting period shall be included inthe consolidated income statement; the cash flow of the subsidiary or business from the purchase date to the endof the reporting period shall be included in the consolidated cash flow statement.If it is possible to control the investee who is not under the same control due to additional investment and otherreasons, the company shall re-measure the equity held before the purchase date according to the fair value of the
equity on the purchase date, the difference between the fair value and its book value shall be included in theinvestment income of the current period. Where the equity held by the acquiree before the date of purchaseinvolves changes in other comprehensive income under the equity method and other owners' equity except netprofit and loss, other comprehensive income and profit distribution, the related changes in other comprehensiveincome and other owners' equity shall be converted into the investment income of the current period on the date ofpurchase, Except for other comprehensive income arising from the re-measurement of net liabilities or changes innet assets of the benefit plan by the invested party.
(2) Disposal of subsidiaries or businesses.
1 General treatment methods.If the company disposes of a subsidiary or business during the reporting period, the income, expenses and profits ofthe subsidiary or business from the beginning of the business period to the disposal date shall be included in theconsolidated income statement; the cash flow from the beginning of the business period to the disposal date of thebusiness period shall be included in the consolidated cash flow statement.When the control over the investee is lost due to the disposal of part of the equity investment or other reasons, thecompany shall re-measure the remaining equity investment after disposal according to its fair value at the date ofloss of control. The sum of the consideration obtained from the disposal of the shares and the fair value of theremaining shares minus the difference between the share of the net assets and the goodwill that should becontinuously calculated by the original subsidiary from the date of purchase or merger, it shall be included in theinvestment income of the period in which the control is lost. Other comprehensive income related to the equityinvestment of the original subsidiary or other changes in owners' equity except net profit and loss, othercomprehensive income and profit distribution shall be converted into current investment income when control is lost,with the exception of other comprehensive income arising from the re-measurement of the net liabilities or changesin net assets of the benefit plan of the invested party.If the company loses control due to the decrease in the proportion of shares held by the company as a result of theincrease in capital of the subsidiary by other investors, the accounting treatment shall be carried out in accordancewith the above-mentioned.2 Disposal of subsidiaries step by step.
If the equity investment in a subsidiary is disposed of step by step through multiple transactions until the loss ofcontrol, the terms, conditions and economic impact of the disposal of each transaction in the equity investment ofthe subsidiary conform to one or more of the following situations, it is usually indicated that multiple transactionsshould be treated as a package of transactions:
I. These transactions are entered into at the same time or taking into account the influence of each other;II. These transactions as a whole can achieve a complete business result;III. The occurrence of a transaction depends on the occurrence of at least one other transaction;A transaction is uneconomical on its own, but it is economical when it is considered with other transactions.Where the disposal of each transaction of equity investment in a subsidiary until the loss of control belongs to apackage transaction, the company shall treat each transaction as a transaction of disposal of the subsidiary and lossof control; However, before the loss of control, the difference between the disposal price and the share of the netassets of the subsidiary corresponding to the disposal investment shall be recognized as other comprehensiveincome in the consolidated financial statements, when the loss of control is transferred to the profit or loss of theperiod in which the control is lost.Where the disposal of all transactions on the equity investment of a subsidiary until the loss of control is not apackage transaction, before the loss of control, accounting treatment shall be carried out according to the relevantpolicies of partial disposal of the equity investment of the subsidiary without the loss of control; in the event of lossof control, accounting treatment shall be carried out in accordance with the general treatment method of disposing ofthe subsidiary.
(3) Purchase minority shares in subsidiaries.
The difference between the company's newly acquired long-term equity investment in the purchase of minorityshares and the share of net assets that should be continuously calculated by the subsidiary from the date of purchase(or merger date), adjust the equity premium in the capital reserve in the consolidated balance sheet, and if the equitypremium in the capital reserve is insufficient to offset, the retained earnings shall be adjusted.
(4) Partial disposal of equity investment in subsidiaries without losing control.Without losing control, the difference between the disposal price obtained from the partial disposal of the long-term
equity investment in the subsidiary and the disposal of the long-term equity investment corresponds to the share ofthe net assets continuously calculated by the subsidiary since the date of purchase or merger, the equity premium inthe capital reserve in the consolidated balance sheet shall be adjusted, and if the equity premium in the capitalreserve is insufficient to be offset, the retained earnings shall be adjusted.
7. Classification of joint venture arrangement and accounting treatment of joint operation.Joint venture arrangements are divided into joint ventures and joint ventures.When the company is a joint venture party to the joint venture arrangement, it is a joint operation when it enjoys therelevant assets and bears the relevant liabilities of the joint venture arrangement.The company recognizes the following items related to the share of interests in the joint operation, and carries outaccounting treatment in accordance with the provisions of the relevant accounting standards for enterprises:
(1) to recognize the assets held separately by the Company and the assets jointly held according to the share of theCompany;
(2) to recognize the liabilities borne separately by the Company and the liabilities jointly borne according to theshare of the Company;
(3) to recognize the income generated from the sale of the company's share of joint operating output;
(4) to recognize the income generated by the joint operation from the sale of output according to the share of thecompany;
(5) to recognize the expenses incurred separately and the expenses incurred by the joint operation according to theshare of the company.The company's accounting policy on joint venture investment can be found in this note "V, (XIII) long-term equityinvestment".
8. Criteria for determining cash and cash equivalents.
When preparing the statement of cash flows, the cash in stock of the company and the deposits that can be used for
payment at any time shall be recognized as cash. Investments with short term (due within three months from the dateof purchase), strong liquidity, easy to convert into known cash and low risk of value change are identified as cashequivalents.
9. Conversion of foreign currency business and foreign currency statements.
1. Foreign currency business.
The foreign currency business uses the spot exchange rate on the date of the transaction as the conversion rate toconvert the amount of foreign currency into RMB for bookkeeping.The balance of foreign currency monetary items on the balance sheet date is converted at the spot exchange rate onthe balance sheet date, and the resulting exchange differences, except for the exchange differences arising fromspecial foreign currency loans related to the acquisition and construction of assets that meet the capitalizationconditions, shall be recorded into the profits and losses of the current period except for the exchange differencesarising from special foreign currency loans related to the acquisition and construction of assets that meet thecapitalization conditions in accordance with the principle of capitalization of borrowing costs.
2. Conversion of foreign currency financial statements.
The assets and liabilities in the balance sheet shall be converted at the spot exchange rate on the balance sheet date;except for the "undistributed profit" items, other items shall be converted at the spot exchange rate at the time ofoccurrence. The income and expense items in the income statement shall be converted at the spot exchange rate onthe date of the transaction.When disposing of an overseas operation, the difference in the translation of the foreign currency financialstatements related to the overseas operation shall be transferred from the owner's equity project to the disposal of theprofits and losses of the current period.
10. Financial instruments.
Financial instruments include financial assets, financial liabilities and equity instruments.
1. Classification of financial instruments.
Accounting policies applicable as of January 1, 2019.According to the business model of the Company's management of financial assets and the contractual cash flowcharacteristics of financial assets, at the time of initial recognition, financial assets are classified as financial assetsmeasured at amortised cost, financial assets (debt instruments) measured at fair value and their changes included inother comprehensive income, and financial assets measured at fair value and their changes included in the profitsand losses of the current period.The business model aims to collect the contract cash flow and the contract cash flow is only the payment of principaland interest based on the outstanding principal amount, which is classified as financial assets measured at amortisedcost. Where the business model aims to receive both the contractual cash flow and the sale of the financial asset, andthe contractual cash flow is only the payment of principal and interest based on the outstanding principal amount, itis classified as financial assets (debt instruments) that are measured at fair value and whose changes are included inother comprehensive income; other financial assets are classified as financial assets measured at fair value andwhose changes are included in the profits and losses of the current period.For investments in non-transactional equity instruments, the Company determines at the initial recognition whetherthey are designated as financial assets (equity instruments) that are measured at fair value and whose changes areincluded in other comprehensive income. At the time of initial recognition, in order to eliminate or significantlyreduce accounting mismatch, financial assets can be designated as financial assets measured at fair value and whosechanges are included in the profits and losses of the current period.At the time of initial recognition, financial liabilities are classified as: financial liabilities measured at fair value andtheir changes included in the profits and losses of the current period and financial liabilities measured at amortizedcost.
Financial liabilities that meet one of the following conditions may, at the time of initial measurement, be designatedas financial liabilities measured at fair value and whose changes are included in the profits and losses of the currentperiod:
1) this designation can eliminate or significantly reduce accounting mismatch.
2) to manage and evaluate the financial liability portfolio or the financial asset and financial liability portfolio on thebasis of fair value in accordance with the enterprise risk management or investment strategy set out in the officialwritten document, and report to key managers within the enterprise on this basis.
3) the financial liability includes embedded derivatives that need to be split separately.
Accounting policies applicable before January 1, 2019.Financial assets and financial liabilities are classified at the time of initial recognition as: financial assets or financialliabilities measured at fair value and whose changes are included in the profits and losses of the current period,including transactional financial assets or financial liabilities and financial assets or financial liabilities directlydesignated to be measured at fair value and whose changes are included in the profits and losses of the current period;investments held to maturity; receivables; available-for-sale financial assets; other financial liabilities, etc.
2. Confirmation basis and Measurement method of Financial Instruments.
Accounting policies applicable as of January 1, 2019.(I) Financial assets measured at amortized cost.Financial assets measured at amortized cost, including notes receivable, accounts receivable, other receivables,long-term receivables, debt investments, etc., are initially measured at fair value, and the relevant transaction costsare included in the initial recognition amount; accounts receivable that does not include a significant financingcomponent and the company decides not to consider accounts receivable with financing components not exceedingone year shall be initially measured at the contract transaction price.The interest calculated by the effective interest rate method during the holding period shall be recorded in the profitsand losses of the current period.At the time of recovery or disposal, the difference between the price obtained and the book value of the financialasset shall be recorded into the profits and losses of the current period.
(2) Financial assets (debt instruments) that are measured at fair value and whose changes are included in othercomprehensive income.Financial assets (debt instruments) measured at fair value and whose changes are included in other comprehensiveincome, including accounts receivable financing, other debt investments, etc., shall be initially measured at fairvalue, and the relevant transaction costs shall be included in the initial recognition amount. The financial asset issubsequently measured at fair value, and changes in fair value are included in other comprehensive income exceptfor interest, impairment losses or gains and exchange gains and losses calculated by the effective interest ratemethod.When the recognition is terminated, the accumulated gains or losses previously included in other comprehensiveincome are transferred from other comprehensive income and included in the profits and losses of the currentperiod.
(3) Financial assets (equity instruments) that are measured at fair value and whose changes are included in othercomprehensive income.Financial assets (equity instruments) measured at fair value and whose changes are included in other comprehensiveincome, including investments in other equity instruments, shall be initially measured at fair value, and the relevanttransaction costs shall be included in the initial recognition amount. The financial assets are subsequently measuredat fair value, and changes in fair value are included in other comprehensive income. The dividends earned shall berecorded in the profits and losses of the current period.At the time of termination of recognition, the cumulative gains or losses previously included in other comprehensiveincome are transferred from other comprehensive income and included in retained earnings.
(4) Financial assets measured at fair value and whose changes are included in the profits and losses of the currentperiod.Financial assets measured at fair value and whose changes are included in the profits and losses of the current period
include transactional financial assets, derivative financial assets and other non-current financial assets, which areinitially measured at fair value, and the relevant transaction costs are recorded in the profits and losses of the currentperiod. The financial assets are subsequently measured at fair value, and the changes in fair value are recorded in theprofits and losses of the current period.
(5) Financial liabilities measured at fair value and whose changes are included in the profits and losses of the currentperiod.Financial liabilities measured at fair value and whose changes are included in the profits and losses of the currentperiod include transactional financial liabilities, derivative financial liabilities, etc., which are initially measured atfair value, and the relevant transaction costs are recorded in the profits and losses of the current period. The financialliability is subsequently measured at fair value, and the change in fair value is recorded in the profits and losses ofthe current period.When the recognition is terminated, the difference between the book value and the consideration paid shall berecorded in the profits and losses of the current period.
(6) Financial liabilities measured at amortized cost.
Financial liabilities measured at amortized cost include short-term loans, notes payable, accounts payable, otherpayables, long-term loans, bonds payable and long-term payables, which are initially measured at fair value, and therelevant transaction costs are included in the initial recognition amount.The interest calculated by the effective interest rate method during the holding period shall be recorded in the profitsand losses of the current period.When the recognition is terminated, the difference between the consideration paid and the book value of thefinancial liability shall be recorded into the profits and losses of the current period.
Accounting policies applicable before January 1, 2019.
(1) Financial assets (financial liabilities) that are measured at fair value and whose changes are included in the
profits and losses of the current period.At the time of acquisition, the fair value (deducting cash dividends declared but not yet paid or interest on bondsthat have been paid but not yet received) is taken as the initial recognized amount, and the relevant transactioncosts are recorded in the profits and losses of the current period.During the holding period, the interest or cash dividend earned will be recognized as investment income, and thechange in fair value will be included in the profit or loss of the current period at the end of the period.At the time of disposal, the difference between the fair value and the initial amount recorded shall be recognizedas investment income, and the profit or loss of fair value changes shall be adjusted at the same time.
(2) hold-to-maturity investment.
The sum of the fair value (deducting the interest on the bonds that have reached the interest payment date but notyet received) and the relevant transaction costs shall be taken as the initial recognized amount at the time ofacquisition.During the holding period, the recognized interest income shall be calculated according to the amortized cost andthe effective interest rate, which shall be included in the investment income. The effective interest rate isdetermined at the time of acquisition and remains unchanged for the expected duration or for such shorter periodas may be applicable.At the time of disposal, the difference between the price obtained and the book value of the investment shall beincluded in the investment income.
(3) accounts receivable.
The company's claims receivable resulting from the sale of goods or the provision of labor services, and theclaims of other enterprises held by the company, which do not include debt instruments quoted in the activemarket, including notes receivable, accounts receivable, other receivables, long-term receivables, etc., shall takethe contract or agreement price receivable from the buyer as the initial recognition amount; if it is of a financingnature, it shall be initially recognized according to its present value.At the time of recovery or disposal, the difference between the price obtained and the book value of thereceivables shall be recorded into the profits and losses of the current period.
(4) available-for-sale financial assets.
At the time of acquisition, the sum of the fair value (deducting the declared but not yet paid cash dividends or theinterest on bonds that have reached the interest payment date but not yet received) and the relevant transaction costsis taken as the initial recognized amount.The interest or cash dividend earned during the holding period is recognized as investment income. At the end of theperiod, it is measured at fair value and changes in fair value are included in other comprehensive income. However,investments in equity instruments that are not quoted in an active market and whose fair value cannot be measuredreliably, and derivative financial assets linked to the equity instrument and settled through the delivery of the equityinstrument, are measured at cost.At the time of disposal, the difference between the price obtained and the book value of the financial asset shall beincluded in the investment profit and loss; at the same time, the amount of the cumulative amount of fair valuechanges originally directly included in other comprehensive income corresponding to the disposal part shall betransferred out and included in the profit and loss of the current period.
(5) other financial liabilities.
The sum of its fair value and related transaction costs shall be taken as the initial recognized amount. The amortizedcost is used for follow-up measurement.
3. Confirmation basis and Measurement method of Financial assets transfer.
When a company transfers financial assets, if almost all the risks and rewards in the ownership of the financial assetshave been transferred to the transferee, the recognition of the financial assets shall be terminated; if almost all therisks and rewards in the ownership of the financial assets are retained, the recognition of the financial asset shall notbe terminated.In judging whether the transfer of financial assets meets the above-mentioned conditions for termination ofrecognition of financial assets, the principle of substance over form shall be adopted.The company divides the transfer of financial assets into the overall transfer and partial transfer of financial assets.
If the overall transfer of financial assets meets the conditions for termination of recognition, the difference betweenthe following two amounts shall be recorded into the profits and losses of the current period:
(1) the book value of the transferred financial assets;
(2) the sum of the consideration received as a result of the transfer and the cumulative amount of changes in fairvalue that were originally directly included in the owners' equity (the financial assets involved in the transfer arefinancial assets (debt instruments) whose changes are measured at fair value and whose changes are included inother comprehensive income, and financial assets available for sale.
If the partial transfer of financial assets meets the conditions for termination of recognition, the book value of thetransferred financial assets as a whole shall be apportioned according to their respective relative fair values betweenthe terminated recognition part and the unterminated recognition part, and the difference between the following twoamounts shall be included in the profits and losses of the current period:
(1) to terminate the book value of the recognition part;
(2) the consideration of the termination recognition part, the sum of the amount corresponding to the cumulativeamount of fair value changes that were originally directly included in the owners' equity (the financial assetsinvolved in the transfer are financial assets (debt instruments) whose changes are measured at fair value and whosechanges are included in other comprehensive income, financial assets available for sale.If the transfer of a financial asset does not meet the conditions for termination of recognition, the financial asset shallcontinue to be recognized, and the consideration received shall be recognized as a financial liability.
4. Conditions for termination of recognition of financial liabilities.
If the current obligation of a financial liability has been discharged in whole or in part, the recognition of thefinancial liability or part thereof shall be terminated; if the Company signs an agreement with the creditors to replacethe existing financial liability by assuming a new financial liability, and if the contract terms of the new financialliability are substantially different from those of the existing financial liability, the recognition of the existingfinancial liability shall be terminated and the new financial liability shall be recognized at the same time.
Where substantial changes are made to all or part of the terms of the contract for the existing financial liabilities, therecognition of the existing financial liabilities or part of them shall be terminated, and the financial liabilities afterthe revised terms shall be recognized as a new financial liability.When the recognition of financial liabilities is terminated in whole or in part, the difference between the book valueof the financial liabilities terminated and the consideration paid (including transferred non-cash assets or newfinancial liabilities assumed) shall be included in the profits and losses of the current period.If the company buys back part of the financial liability, it shall allocate the book value of the financial liability as awhole according to the relative fair value of the continued recognition part and the termination recognition part onthe repurchase date. The difference between the book value allocated to the termination of recognition and theconsideration paid (including transferred non-cash assets or new financial liabilities assumed) shall be included inthe profits and losses of the current period.
5. The method of determining the fair value of financial assets and financial liabilities.There are financial instruments in an active market, whose fair value is determined by quotations in the activemarket. There are no financial instruments that activate the market, and valuation techniques are used to determinetheir fair value. In valuation, the Company adopts valuation techniques that are applicable in the currentcircumstances and are supported by sufficient available data and other information, select input values that areconsistent with the characteristics of assets or liabilities considered by market participants in the transactions of therelevant assets or liabilities, and give priority to the relevant observable inputs. The unobservable input value is usedonly if the relevant observable input value cannot be obtained or is impracticable.
6. Test method and Accounting treatment method of impairment of Financial assets.Accounting policies applicable as of January 1, 2019.The Company takes into account all reasonable and justified information, including forward-looking information,estimates, individually or in combination, the expected credit losses of financial assets measured at amortised costand financial assets (debt instruments) measured at fair value and whose changes are included in othercomprehensive income. The measurement of expected credit loss depends on whether the credit risk of financial
assets increases significantly after the initial recognition.If the credit risk of the financial instrument has increased significantly since the initial recognition, the Companymeasures its loss provision at the amount equivalent to the expected credit loss of the financial instrumentthroughout its lifetime; if the credit risk of the financial instrument does not increase significantly since the initialrecognition, the Company measures its loss provision at the amount equivalent to the expected credit loss of thefinancial instrument in the next 12 months. The increase or reversal amount of the loss provision resulting therefromshall be recorded into the profit or loss of the current period as an impairment loss or gain.Usually more than 30 days overdue, the Company considers that the credit risk of the financial instrument hasincreased significantly, unless there is conclusive evidence that the credit risk of the financial instrument has notincreased significantly since the initial recognition.If the credit risk of a financial instrument is low on the balance sheet date, the Company considers that the credit riskof the financial instrument has not increased significantly since its initial recognition.If there is objective evidence that a financial asset has been impaired in credit, the company shall make provision forimpairment of the financial asset on an individual basis.
(1) Impairment of receivables.
1 Accounts receivable.For accounts receivable, regardless of whether it is due to the sale of products or the provision of services orcontains a significant financing component, the Company always measures its loss provision at an amountequivalent to the expected credit loss over the entire lifetime, the resulting increase or reversal of the loss provisionis recorded in the profits and losses of the current period as an impairment loss or gain.Based on all reasonable and valid information, including forward-looking information, the company makesprovision for bad debts for accounts receivable in accordance with the combination of related parties and thecombination of age analysis within the scope of merger, and the combination of related parties within the scope ofmerger does not make provision for bad debts, the combination of age analysis calculates its expected credit loss onthe basis of age, as follows:
| Account age | Proportion of accounts receivable (%) | ||
| Corrugated board line related business | Power engine service | New energy battery business | |
| Within 1 year (including 1 year) | 1.00 | 5.00 | 1.00 |
| 1 to 2 years (including 2 years) | 5.00 | 10.00 | 10.00 |
| 2 to 3 years (including 3 years) | 10.00 | 30.00 | 30.00 |
| 3 to 4 years (including 4 years) | 30.00 | 50.00 | 100.00 |
| 4 to 5 years (including 5 years) | 50.00 | 80.00 | 100.00 |
| More than 5 years | 100.00 | 100.00 | 100.00 |
If there is objective evidence that a credit impairment has occurred in an account receivable,the company makes a provision for bad debts and recognizes the expected credit loss on the account receivable.
②Other receivables
Other receivables are based on the assumption that their credit risk has not increased significantly since the initialrecognition, and the loss provision is measured according to the expected credit loss over the next 12 months. Inaddition to other receivables for individual assessment of credit risk, they are divided into different combinationsbased on the characteristics of credit risk:
| Combination name. | Provision ratio. |
| Account age analysis combination. | Using age analysis method. |
| Combination of related parties within the scope of merger. | Excluding the provision for bad debts. |
| Risk-free portfolio. | Excluding the provision for bad debts |
In the combination, the age analysis combination calculates its expected credit loss on the basis of book age, asfollows:
| Account age | Proportion of accounts receivable (%) | ||
| Corrugated board line related business | Power engine service | New energy battery business | |
| Within 1 year (including 1 year) | 1.00 | 5.00 | 1.00 |
| 1 to 2 years (including 2 years) | 5.00 | 10.00 | 10.00 |
| 2 to 3 years (including 3 years) | 10.00 | 30.00 | 30.00 |
| 3 to 4 years (including 4 years) | 30.00 | 50.00 | 100.00 |
| 4 to 5 years (including 5 years) | 50.00 | 80.00 | 100.00 |
| More than 5 years | 100.00 | 100.00 | 100.00 |
(2) Other receivables.
For lease receivables or long-term receivables formed by the company through the sale of goods or the provisionof services, the Company chooses to always measure its provision for loss at an amount equivalent to the expectedcredit loss over the entire lifetime.The negotiable instruments obtained by the company shall be divided into financial institutions and otherenterprises according to the acceptor. If the acceptor is a negotiable instrument of a financial institution, thecompany expects no credit loss; if the acceptor is a negotiable instrument of other enterprises, the companyregards the negotiable instrument as accounts receivable to determine the expected credit loss.
Accounting policies applicable before January 1, 2019.Except for the financial assets measured at fair value and whose changes are included in the profits and losses ofthe current period, the company examines the book value of the financial assets on the balance sheet date, and ifthere is objective evidence that a certain financial asset is impaired, provision for impairment shall be made.
(1) Provision for impairment of available-for-sale financial assets:
If at the end of the period there is a serious decline in the fair value of the investment in available-for-sale equityinstruments, or if such a downward trend is expected to be non-temporary after a comprehensive consideration ofvarious relevant factors, it shall be deemed that the impairment has occurred, and the cumulative loss caused bythe decline in the fair value of the owner's equity originally directly included in the owner's equity shall betransferred out together to recognize the impairment loss.For available-for-sale debt instruments that have recognized impairment losses, if the fair value has increased inthe subsequent accounting period and is objectively related to the events that occurred after the recognition of theoriginal impairment loss, the originally recognized impairment loss shall be reversed and recorded in the profitsand losses of the current period.The impairment loss on the investment of available-for-sale equity instruments shall not be reversed throughprofit or loss.
(2) Provision for bad debts of receivables:
1 Receivables with significant individual amounts and separate provisions for bad debts:
The basis or standard for judging the significant amount of a single item:
Accounts for more than 10% (including 10%) of the balance of accounts receivable or other receivables.The method of calculating the provision for bad debts with a large amount and a separate provision for bad debts:
If the impairment test is carried out separately, if there is objective evidence that the impairment has occurred, theprovision for bad debts shall be made according to the difference between the present value of the expected futurecash flow and its book value, which shall be included in the profits and losses of the current period. Separately testthe receivables without impairment and classify them into the corresponding combination to make provision forbad debts.
(2) to calculate the provision for bad debt receivables according to the combination of credit risk characteristics:
| A method of calculating and allocating provision for Bad debts according to the combination of Credit risk characteristics. | |
| Age analysis combination. | Using age analysis method. |
| Combination of related parties within the scope of merger. | Excluding the provision for bad debts. |
| Risk-free portfolio. | Excluding the provision for bad debts. |
In the combination, the age analysis method is used to make provision for bad debts:
| Account age | Corrugated board line related business(%) | Power engine service(%) | New energy battery business(%) |
| Within 1 year (including 1 | 1.00 | 5.00 | 1.00 |
| year) | |||
| 1 to 2 years (including 2 years) | 5.00 | 10.00 | 10.00 |
| 2 to 3 years (including 3 years) | 10.00 | 30.00 | 30.00 |
| 3 to 4 years (including 4 years) | 30.00 | 50.00 | 100.00 |
| 4 to 5 years (including 5 years) | 50.00 | 80.00 | 100.00 |
| More than 5 years | 100.00 | 100.00 | 100.00 |
③ Receivables in which a single amount is not significant but a separate provision for bad debts is made:
Reasons for making separate provisions for bad debts:
There is objective evidence that impairment may occur, such as cancellation, bankruptcy or death of the debtor,unable to recover his bankruptcy property or estate after liquidation, serious lack of cash flow, and so on.The method of calculating the provision for bad debts:
For receivables that have objective evidence that impairment may have occurred, separate them from the relevantportfolio and test the impairment separately. According to the difference between the present value of future cashflow and its book value, the impairment loss is confirmed and the provision for bad debts is made.
(3) Provision for impairment of investments held to maturity:
The measurement of the impairment loss of investment held to maturity shall be treated in accordance with themeasurement method of impairment loss of accounts receivable.
11. Inventory.
1. Classification of inventory.
Inventory is classified into: raw materials, products in process, goods in stock, goods issued, semi-finished products,
materials commissioned for processing, etc.
2. Pricing method for issuing inventory.
The costs of inventory, delivery and production include raw materials, direct labour, other direct costs and indirectproduction costs apportioned in proportion to normal production capacity, as well as related interest expenses. Thepurchase and storage of all kinds of inventory are priced at actual cost and issued on a weighted average basis.
3. The basis for determining the net realizable value of different types of inventory.In the course of normal production and operation, the net realizable value of goods directly used for sale, such asfinished goods, goods in stock and materials used for sale, shall be determined on the basis of the estimated sellingprice of the inventory minus the estimated sales expenses and related taxes and fees. For the inventory of materialsthat need to be processed, in the normal process of production and operation, the net realizable value shall bedetermined on the basis of the estimated selling price of the finished goods produced minus the estimated cost to beincurred at the time of completion, the estimated sales expenses and the amount of relevant taxes and fees. The netrealizable value of the inventory held for the execution of the sales contract or labor contract is calculated on thebasis of the contract price. If the quantity of the inventory held exceeds the quantity ordered under the sales contract,the net realizable value of the excess inventory is calculated on the basis of the general sales price.At the end of the period, provision for inventory decline is made according to a single inventory item; however, forinventory with a large number and lower unit price, provision for inventory decline is made according to inventorycategory; inventory with the same or similar end-use or purpose related to product lines produced and sold in thesame region and difficult to be measured separately from other items shall be combined with the provision forinventory decline.Except that there is clear evidence that the market price on the balance sheet date is abnormal, the net realizablevalue of inventory items is determined on the basis of the market price on the balance sheet date.The net realizable value of the inventory items at the end of the period is determined on the basis of the market priceon the balance sheet date.
4. Inventory system.
The perpetual inventory system is adopted.
5. Amortization methods for low-value consumables and packaging.
The main results are as follows: (1) the method of one-time resale is adopted for low-value consumable goods;
(2) the package adopts the method of one-time resale.
12. Hold assets for sale.
The company classifies non-current assets or disposal groups that meet the following conditions into categories ofholding for sale:
(1) in accordance with the practice of selling such assets or disposal groups in similar transactions, they can besold immediately under the current circumstances;
(2) the sale is very likely to occur, that is, the Company has made a decision on a sale plan and has obtained a firmpurchase commitment, and the sale is expected to be completed within one year. If the relevant regulations requirethe relevant authorities or regulatory authorities of the company to approve the sale, it has been approved.
13. Long-term equity investment.
1. Criteria for judging joint control and significant influence.
Joint control refers to the common control over an arrangement in accordance with the relevant agreement, and therelevant activities of the arrangement can only be made with the unanimous consent of the participants who sharethe control. Where the Company exercises joint control over the invested entity and enjoys rights over the net assetsof the invested entity together with other joint ventures, the invested entity shall be a joint venture of the Company.Major impact refers to the right to participate in the financial and business decisions of an enterprise, but not to
control or work with other parties to control the formulation of these policies. If the company can exert significantinfluence on the invested entity, the invested entity shall be an associated enterprise of the company.
2. Determination of initial investment cost.
(1) long-term equity investment formed by enterprise merger.
Business combination under the same control: where a company pays cash, transfers non-cash assets or assumesdebts, and issues equity securities as merger consideration, the initial investment cost of the long-term equityinvestment shall be taken as the initial investment cost of the long-term equity investment in accordance with theshare of the book value of the owner's equity of the merged party in the consolidated financial statements of theultimate controlling party on the merger date. If it is possible to control the invested unit under the same control dueto additional investment and other reasons, it shall enjoy the share of the book value of the merged party's net assetsin the consolidated financial statements of the final controlling party on the merger date, determine the initialinvestment cost of long-term equity investment. The difference between the initial investment cost of the long-termequity investment on the merger date and the sum of the book value of the long-term equity investment before themerger plus the book value of the newly paid consideration for further acquired shares on the merger date, if theequity premium is adjusted and the equity premium is insufficient to be offset, offset the retained earnings.Business merger under different control: the company takes the merger cost determined on the purchase date as theinitial investment cost of the long-term equity investment. If it is possible to control the invested units that are notunder the same control due to additional investment and other reasons, the sum of the book value of the originalequity investment plus the new investment cost shall be taken as the initial investment cost calculated according tothe cost method.
(2) long-term equity investment obtained by other means.
The long-term equity investment obtained by means of cash payment shall be taken as the initial investment costaccording to the purchase price actually paid.The long-term equity investment obtained by issuing equity securities shall be taken as the initial investment costaccording to the fair value of the equity securities issued.When the exchange of non-monetary assets has a commercial essence, and the fair value of the exchanged assets or
exchanged assets can be measured reliably, it shall be measured on the basis of fair value. If the fair value of both theexchanged assets and the exchanged assets can be measured reliably, for the exchanged long-term equity investment,the fair value of the exchanged assets and the relevant taxes payable shall be taken as the initial investment cost ofthe converted long-term equity investment, unless there is conclusive evidence that the fair value of the convertedassets is more reliable. Where the exchange of non-monetary assets does not have a commercial substance, or thefair value of both the exchanged assets and the exchanged assets cannot be measured reliably, for the exchangedlong-term equity investment, the book value of the exchanged assets and the relevant taxes payable shall be taken asthe initial investment cost of the long-term equity investment.The long-term equity investment obtained through debt restructuring shall be recorded at other costs such as the fairvalue of the abandoned creditor's rights and taxes directly attributable to the asset, and the difference between thefair value and the book value of the abandoned creditor's rights shall be included in the profits and losses of thecurrent period.
3. Follow-up measurement and profit and loss recognition method.
(1) long-term equity investment calculated by cost method.
The company's long-term equity investment in subsidiaries shall be accounted for by the cost method. Except forthe declared but not yet paid cash dividends or profits included in the price or consideration actually paid at thetime of the investment, the company recognizes the current investment income in accordance with the cashdividends or profits declared by the invested entity.
(2) long-term equity investment accounted for by equity method.
The equity method shall be used to calculate the long-term equity investment of joint ventures and joint ventures.When the initial investment cost is greater than the investment, it shall enjoy the difference in the fair value shareof the identifiable net assets of the invested unit, and shall not adjust the initial investment cost of the long-termequity investment; when the initial investment cost is less than the investment, it shall enjoy the difference in thefair value share of the identifiable net assets of the invested unit, which shall be included in the profits and lossesof the current period.The company recognizes the investment income and other comprehensive income respectively according to the
share of the net profit and loss and other comprehensive income realized by the invested unit, and adjusts the bookvalue of the long-term equity investment; the book value of the long-term equity investment shall be reducedaccordingly according to the profits or cash dividends declared and distributed by the invested unit. For otherchanges in the owner's equity of the invested unit except net profit and loss, other comprehensive income andprofit distribution, the book value of the long-term equity investment shall be adjusted and included in the owner'sequity.When recognizing the share of the net profit and loss of the invested unit, it shall be based on the fair value of theidentifiable net assets of the invested unit at the time of the investment, and in accordance with the company'saccounting policy and accounting period, the net profit of the invested unit is recognized after adjustment. Duringthe period of holding investment, where the invested entity prepares the consolidated financial statements, it shallbe accounted for on the basis of the changes in net profit, other comprehensive income and other owners' equity inthe consolidated financial statements attributable to the invested unit.The unrealized internal transaction gains and losses between the company, the joint venture and the joint ventureshall be calculated and offset in accordance with the proportion to which the company is entitled, and theinvestment income shall be recognized on this basis. If the unrealized internal transaction loss with the investedentity belongs to the asset impairment loss, it shall be recognized in full. Where a transaction occurs between acompany, an associated enterprise or a joint venture in which assets constitute business, accounting treatmentshall be conducted in accordance with the relevant policies disclosed in this note "5. (5) Accounting methods forbusiness mergers under the same control and under different controls" and "5. (6) methods for the preparation ofconsolidated financial statements".When the company confirms that it should share the losses incurred by the invested unit, it shall be dealt with inthe following order: first, write down the book value of the long-term equity investment. Secondly, if the bookvalue of the long-term equity investment is not enough to offset, the book value of the long-term equity of the netinvestment of the invested unit shall continue to be recognized to the limit of the book value of the net investmentof the invested unit, and the book value of the long-term receivables shall be offset. Finally, after the abovetreatment, if the enterprise still bears additional obligations in accordance with the investment contract oragreement, the estimated liabilities shall be recognized according to the expected obligations, which shall beincluded in the investment losses of the current period.
(3) disposal of long-term equity investment.
The difference between the book value of the long-term equity investment and the actual price obtained shall beincluded in the profits and losses of the current period.When dealing with the long-term equity investment calculated by the equity method, the investment shall be treatedon the same basis as the relevant assets or liabilities directly disposed of by the invested unit, and the part originallyincluded in other comprehensive income shall be treated according to the corresponding proportion. The owner'sequity recognized as a result of changes in owners' equity other than net profit and loss, other comprehensiveincome and profit distribution of the invested unit shall be carried forward pro rata to the profits and losses of thecurrent period, with the exception of other comprehensive income arising from the re-measurement of the netliabilities or changes in net assets of the benefit plan of the invested party.If the common control or significant influence on the invested unit is lost due to the disposal of part of the equityinvestment, the remaining equity after disposal shall be accounted for in accordance with the criteria for therecognition and measurement of financial instruments, the difference between the fair value and the book value onthe date of loss of common control or significant influence shall be recorded in the profits and losses of the currentperiod. Other comprehensive income recognized by the original equity investment due to the use of the equitymethod shall be treated on the same basis as the relevant assets or liabilities directly disposed of by the invested unitwhen the application of the equity method is terminated. The owner's equity recognized as a result of changes inowners' equity other than net profit and loss, other comprehensive income and profit distribution of the investedparty shall be transferred to the profits and losses of the current period when the accounting method of equity isterminated.If the company loses its control over the invested unit due to the disposal of part of the equity investment or thedecrease of the proportion of shares held by the company due to the increase of capital of the subsidiary by otherinvestors, when preparing individual financial statements, if the remaining equity can exercise joint control orsignificant influence on the invested unit, it shall be accounted for according to the equity method, and theremaining equity shall be adjusted by the equity method as soon as it is acquired. Where the remaining equity cannotexercise joint control or exert significant influence on the invested unit, the accounting treatment shall be carried outin accordance with the relevant provisions of the standards for the recognition and measurement of financial
instruments, and the difference between the fair value and the book value on the date of loss of control shall berecorded into the profits and losses of the current period.The disposed equity is acquired through enterprise merger due to additional investment and other reasons, and whenpreparing individual financial statements, the remaining equity after disposal is calculated by cost method or equitymethod, the other comprehensive income and other owners' equity recognized by the equity method before the dateof purchase are carried forward in proportion to the other comprehensive income and other owners' rights andinterests recognized by the equity method. If the remaining equity after disposal is changed to accounting inaccordance with the standards for recognition and measurement of financial instruments, all other comprehensiveincome and other owners' equity are carried forward.
14. Investment real estate.
Measurement model of investment real estate.Cost method measurement.Depreciation or amortization method.Investment real estate refers to real estate held to earn rent or capital appreciation, or both, including leased landuse rights, land use rights held and ready to be transferred after appreciation, leased buildings (including buildingsfor rental after the completion of self-construction or development activities and buildings that are being rented inthe process of construction or development).The company adopts the cost model to measure the existing investment real estate. The investment realestate-rental buildings measured according to the cost model shall adopt the same depreciation policy as thecompany's fixed assets, and the leased land use rights shall be carried out in accordance with the sameamortization policy as the intangible assets.
15. Fixed assets.
(1) Confirmation conditions.
Fixed assets refer to tangible assets that are held for the production of goods, the provision of labor services,leasing or management, and have a useful life of more than one fiscal year. Fixed assets are recognized when thefollowing conditions are met at the same time: (1) the economic benefits related to the fixed assets are likely toflow into the enterprise; (2) the cost of the fixed assets can be measured reliably.
(2) Depreciation method
| Category. | Depreciation method. | Depreciation life. | Residual value rate. | Annual depreciation rate. |
| Houses and buildings. | Life averaging method | 20-40 | 5.00% | 2.375%-4.75% |
| machinery equipment. | Life averaging method | 5-18 | 5.00% | 5.28%-19.00% |
| Transport equipment. | Life averaging method | 5-10 | 5.00% | 9.5%-19.00% |
| Electronic equipment. | Life averaging method | 3-10 | 5.00% | 9.5%-31.67% |
| Office equipment. | Life averaging method | 3-10 | 5.00% | 9.5%-31.67% |
| Other equipment. | Life averaging method | 5-10 | 5.00% | 9.5%-19.00% |
The depreciation of fixed assets shall be classified and calculated by the life-span average method, and thedepreciation rate shall be determined according to the category of fixed assets, the expected service life and theexpected net salvage rate. If the service life of each component of the fixed asset is different or provides economicbenefits for the enterprise in different ways, choose different depreciation rates or depreciation methods tocalculate depreciation respectively.If the fixed assets leased by financial leasing can be reasonably determined that the ownership of the leased assetswill be acquired at the expiration of the lease term, depreciation shall be calculated within the useful life of theleased assets; if it is impossible to reasonably determine that the ownership of the leased assets can be obtained atthe expiration of the lease term, depreciation shall be calculated within the shorter period of the lease term and theuseful life of the leased assets.
(3) The identification basis, valuation and depreciation methods of financial leasing fixed assets.If one of the following conditions is stipulated in the terms of the lease agreement between the company and thelessee, it is recognized as a financial leased asset: (1) the ownership of the leased asset belongs to the companyafter the expiration of the lease term; (2) the company has the option to purchase the asset, the purchase price ismuch lower than the fair value of the asset when the option is exercised; (3) the lease term accounts for most ofthe useful life of the leased asset; (4) there is no significant difference between the present value of the minimumlease payment on the lease start date and the fair value of the asset. At the beginning of the lease, the companytakes the lower of the fair value of the leased asset and the present value of the minimum lease payment as theaccounting value of the leased asset, and the minimum lease payment as the accounting value of the long-termpayable, the difference is regarded as an unrecognized financing fee.
16. Projects under construction.
According to the necessary expenditure incurred before the construction of the asset reaches its intended usable state,
the project under construction shall be regarded as the accounting value of the fixed asset. If the built fixed assetshave reached the intended usable state in the project, but the final accounts of the construction have not yet beenhandled, from the date of reaching the scheduled usable state, according to the project budget, cost or actual cost ofthe project, the fixed assets shall be transferred to the fixed assets according to the estimated value, and thedepreciation of the fixed assets shall be calculated in accordance with the company's fixed assets depreciation policy,and the original provisional estimated value shall be adjusted according to the actual cost after handling the finalaccounts for completion. However, the original depreciation amount shall not be adjusted.
17. Borrowing costs.
1. Confirmation principle of capitalization of borrowing costs.
Borrowing costs, including interest on loans, amortization of discounts or premiums, ancillary expenses andexchange differences arising from foreign currency loans.If the borrowing costs incurred by a company can be directly attributed to the purchase, construction or productionof assets that meet the conditions for capitalization, they shall be capitalized and included in the cost of the relevantassets; other borrowing costs shall be recognized as expenses according to the amount incurred at the time ofoccurrence, it shall be recorded in the profits and losses of the current period.Assets that meet the capitalization conditions refer to fixed assets, investment real estate, inventory and other assetsthat take quite a long time of purchase, construction or production activities to reach the intended state of use or sale.Capitalization begins when borrowing costs meet the following conditions at the same time:
(1) Asset expenditure has been incurred, which includes expenditure in the form of cash payment, transfer ofnon-cash assets or undertaking interest-bearing debt for the purchase, construction or production of assets that meetthe capitalization conditions;
(2) The cost of borrowing has been incurred;
(3) The purchase, construction or production activities necessary to make the assets available for use or sale havebegun.
2. Period of capitalization of borrowing costs.
The capitalization period refers to the period from the beginning of capitalization of borrowing costs to the time ofcessation of capitalization, excluding the period of suspension of capitalization of borrowing costs.When the assets of acquisition, construction or production that meet the conditions for capitalization reach theintended state of use or sale, the borrowing costs shall cease to be capitalized.When part of the assets of acquisition, construction or production that meet the capitalization conditions arerespectively completed and can be used separately, the borrowing costs of that part of the assets shall cease to becapitalized.If each part of the asset of purchase, construction or production is completed separately, but can be used or sold onlyafter the overall completion, the capitalization of borrowing costs shall be stopped when the asset is completed as awhole.
3. Suspension of capitalization period.
If there is an abnormal interruption of assets that meet the capitalization conditions in the process of purchase,construction or production, and the interruption time exceeds 3 months, the borrowing costs shall be suspended; ifthe interruption is a procedure necessary for the acquisition, construction or production of assets eligible forcapitalization to reach the intended usable state or marketable state, the borrowing costs shall continue to becapitalized. Borrowing costs incurred during the interruption period are recognized as profits and losses of thecurrent period and continue to be capitalized after the resumption of the purchase and construction of assets orproduction activities.
4. The calculation method of the capitalization rate and capitalization amount of borrowing costs.For special loans borrowed for the acquisition, construction or production of assets that meet the capitalizationconditions, the borrowing costs actually incurred in the current period shall be used to determine the capitalizationamount of the borrowing costs by deducting the interest income earned by the unused loan funds deposited in thebank or the investment income from temporary investments.For general loans occupied for the acquisition, construction or production of assets that meet the capitalization
conditions, the amount of borrowing costs that should be capitalized shall be calculated and determined according tothe weighted average of the accumulated asset expenditure exceeding the portion of the special loans multiplied bythe capitalization rate of the general loans occupied. The capitalization rate is calculated based on the weightedaverage interest rate of general borrowing.
18. Intangible assets.
(1) valuation method, service life and impairment test.
1. Valuation method of intangible assets.
(1) The company carries on the initial measurement according to the cost when it acquires the intangible assets;The cost of purchasing an intangible asset, including the purchase price, related taxes and fees, and other expensesdirectly attributable to the intended use of the asset. If the price of the purchase of intangible assets exceeds thenormal credit conditions and the payment is deferred and has the nature of financing in essence, the cost of theintangible assets shall be determined on the basis of the present value of the purchase price.The debt restructuring shall obtain the intangible assets used by the debtor to repay the debts, and determine itsentry value on the basis of the fair value of the abandoned claims and other costs such as taxes directly attributableto the intended use of the assets, and the difference between the fair value and the book value of the abandonedclaims shall be recorded into the profits and losses of the current period.When the exchange of non-monetary assets has a commercial essence, and the fair value of the exchanged assetsor exchanged assets can be measured reliably, it shall be measured on the basis of fair value. If the fair value ofboth the exchanged assets and the exchanged assets can be measured reliably, for the exchanged intangible assets,the fair value of the exchanged assets and the relevant taxes payable shall be taken as the initial investment cost ofthe exchanged intangible assets, unless there is conclusive evidence that the fair value of the converted assets ismore reliable. Where the exchange of non-monetary assets does not have a commercial substance, or the fairvalue of both the exchanged assets and the exchanged assets cannot be reliably measured, for the exchangedintangible assets, the book value of the exchanged assets and the relevant taxes payable shall be taken as the initialinvestment cost of the intangible assets.
(2) Follow-up measurement.
Analyze and judge the service life of intangible assets when acquiring them.Intangible assets with limited service life shall be amortized according to the straight-line method within the periodof bringing economic benefits to the enterprise; if it is impossible to foresee the period for which intangible assetsbring economic benefits to the enterprise, they shall be regarded as intangible assets with uncertain service life andshall not be amortized.
2. Estimation of the useful life of intangible assets with limited useful life:
| Item | Expected service life. | Amortization method. | According to |
| Land use right. | 40-50 years | Land use right for the term of use of the land certificate. | Land ownership. |
| Land ownership. | Permanent. | Overseas land certificate. | Land ownership. |
| Trademarks and patents. | 5-10 years | Service life. | Trademarks and patents |
At the end of each year, the useful life and amortization methods of intangible assets with limited service life arereviewed.After review, the useful life and amortization method of intangible assets at the end of this year are not differentfrom previous estimates.
3. The basis for judging intangible assets with uncertain service life and the procedure for reviewing theirservice life.The land ownership of the subsidiary Fosber Group in Italy has a permanent term, and the company believes that theland ownership will be used in the foreseeable future and will bring expected economic benefits to the company, soit is determined that its useful life is uncertain.The trademarks registered by subsidiaries Fosber Group and Fosber United States have a service life as required bylaw, but Fosber Group and Fosber United States may apply for extension at a lower fee at the expiration of the term
of protection. In addition, the relevant survey shows that the market demand for the products attached to the abovetrademark rights is long-term, and the company will benefit from the above-mentioned trademark products for along time.Therefore, the company recognizes the right to use the trademark as an intangible asset with uncertain service life.At the end of each year, the service life of intangible assets with uncertain service life is reviewed.After review, the service life of the above intangible assets is still uncertain.
(2) Accounting policy for internal R & D expenditure.
1. Specific criteria for dividing the research phase and the development phase.The expenditure of research and development projects within the company is divided into research phaseexpenditure and development phase expenditure.Research stage: the stage of original planned investigation and research activities carried out in order to acquire andunderstand new scientific or technical knowledge.Development phase: the stage in which research or other knowledge is applied to a plan or design to produce new orsubstantially improved materials, devices, products, etc., prior to commercial production or use.
2. Specific conditions for the capitalization of expenditure in the development stage.The expenditure in the development phase of an internal research and development project is recognized asintangible assets when the following conditions are met:
(1) it is technically feasible to complete the intangible asset so that it can be used or sold;
(2) have the intention to complete the intangible asset and use or sell it;
(3) the ways in which intangible assets generate economic benefits, including the ability to prove that the productsproduced by the intangible assets exist in the market or the intangible assets themselves exist in the market, and thatthe intangible assets will be used internally can prove their usefulness;
(4) there are sufficient technical, financial and other resources to support the development of the intangible asset and
the ability to use or sell the intangible asset;
(5) the expenditure attributed to the development stage of the intangible assets can be measured reliably.If the expenditure in the development stage does not meet the above conditions, it shall be recorded into the profitsand losses of the current period when it occurs. The expenditure of the research stage shall be recorded into theprofits and losses of the current period when it occurs.
19. Impairment of long-term assets.
Long-term assets such as long-term equity investment, investment real estate measured by cost model, fixed assets,projects under construction and intangible assets with limited service life shall be tested if there are signs ofimpairment on the balance sheet date. If the impairment test results show that the recoverable amount of the asset islower than its book value, the impairment provision shall be calculated according to the difference and theimpairment loss shall be included. The recoverable amount is the higher between the net amount of the fair value ofthe asset minus the disposal expenses and the present value of the expected future cash flow of the asset. Theprovision for impairment of assets shall be calculated and confirmed on the basis of individual assets. If it is difficultto estimate the recoverable amount of individual assets, the recoverable amount of the asset group shall bedetermined on the basis of the asset group to which the asset belongs. An asset group is the smallest portfolio thatcan independently generate cash inflows.Goodwill, intangible assets with uncertain useful life, and intangible assets that have not yet reached the serviceablestate shall be tested for impairment at least at the end of each year.The company conducts a goodwill impairment test, and the book value of goodwill resulting from a business mergershall be apportioned to the relevant asset group in a reasonable manner from the date of purchase; if it is difficult tobe apportioned to the relevant asset group, it shall be apportioned to the relevant asset group portfolio. Whenapportion the book value of goodwill, the company allocates according to the relative benefits that the relevant assetgroups or asset groups can get from the synergy of business merger, and carries on the goodwill impairment test onthis basis.When conducting an impairment test on a relevant asset group or combination of asset groups containing goodwill,if there are signs of impairment in the asset group or combination of asset groups related to goodwill, first carry out
an impairment test on the asset group or combination of assets that do not include goodwill, calculate therecoverable amount, and compare it with the relevant book value to confirm the corresponding impairment loss.Then carry on the impairment test to the asset group or asset group combination including goodwill, and comparethe book value of these relevant asset groups or asset groups (including the book value portion of the apportionedgoodwill) with their recoverable amount. If the recoverable amount of the relevant asset group or asset groupcombination is lower than its book value, the impairment loss of goodwill shall be confirmed. Once the impairmentloss of the above-mentioned assets is recognized, it shall not be reversed in the subsequent accounting period.
20. Long-term prepaid expenses.
Long-term prepaid expenses are expenses that have been incurred but should be borne by the current and subsequentperiods for a period of more than one year.
1. Amortization method.
Long-term prepaid expenses are amortized evenly during the beneficial period.
2. Amortization life.
(1) the expenditure for the improvement of fixed assets shall be amortized over the remaining useful life of the fixedasset;
(2) other expenses shall be amortized averagely from 3 to 5 years according to the number of years of benefit.
21. Salary of staff and workers.
(1) The accounting treatment of short-term compensation.
During the accounting period in which employees provide services to the Company, the Company recognizes theactual short-term compensation as liabilities and includes it in the profits and losses or related asset costs of thecurrent period.The social insurance premium and housing accumulation fund paid by the company for the staff and workers, as
well as the trade union funds and staff education funds drawn in accordance with the provisions, during theaccounting period during which the staff and workers provide services for the company, the corresponding amountof salary of the staff and workers shall be calculated and determined according to the prescribed basis andproportion.If the welfare expenses of staff and workers are non-monetary welfare, if they can be measured reliably, they shallbe measured at fair value.
(2) Accounting treatment of after-service benefits.
(1) set up a withdrawal plan.
The company shall pay basic old-age insurance and unemployment insurance for its employees in accordance withthe relevant provisions of the local government. During the accounting period in which the staff and workersprovide services for the company, the amount payable shall be calculated according to the local payment base andproportion, which shall be recognized as liabilities, and shall be included in the profits and losses of the currentperiod or the cost of related assets.In addition to the basic old-age insurance, the company has also established an enterprise annuity contributionsystem (supplementary old-age insurance) / enterprise annuity plan according to the relevant policies of the nationalenterprise annuity system. The company shall pay a certain proportion of the total wages of the employees to thelocal social insurance institutions / annuity plan, and the corresponding expenditure shall be included in the profitsand losses of the current period or the cost of related assets.
(2) setting up a benefit plan.
According to the formula determined by the expected cumulative benefit unit method, the Company ascribes thewelfare obligations arising from the established benefit plan to the period during which the employee providesservices, which is included in the current profit or loss or related asset costs.The deficit or surplus resulting from the present value of the set benefit plan obligations minus the fair value of theset benefit plan assets is recognized as a net liability or net asset of a set benefit plan. If there is a surplus in thebenefit plan, the company shall measure the net assets of the benefit plan by which of the two items: the surplus ofthe benefit plan and the asset ceiling.
All obligations to set benefit plans, including those expected to be paid within 12 months after the end of the annualreporting period for the provision of services by employees, are discounted according to the market yield of treasurybonds or high-quality corporate bonds in an active market that match the balance sheet date with the duration andcurrency of the set benefit plan obligations.The service costs arising from the establishment of the benefit plan and the net interest of the net liabilities or netassets of the benefit plan shall be included in the current profit or loss or the cost of related assets; The changesresulting from the re-measurement of the net liabilities or net assets of the benefit plan are included in othercomprehensive income and do not return to profit or loss in subsequent accounting periods, all the parts originallyincluded in other comprehensive income are carried forward to undistributed profits within the scope of equity at thetermination of the original benefit plan.When setting up the settlement of the benefit plan, the settlement gain or loss shall be confirmed according to thedifference between the present value of the obligation of the set benefit plan and the settlement price determined onthe balance sheet date.
(3) Accounting treatment of dismissal benefits.
When the Company cannot unilaterally withdraw the dismissal benefits provided by the termination plan or theproposed reduction, or recognize the costs or expenses associated with the restructuring involving the payment ofthe severance benefits, whichever is earlier, the employee emoluments liabilities arising from the terminationbenefits are recognized and included in the profits and losses of the current period.
(4) Accounting methods for other long-term employee welfare
22. Estimated liabilities.
1. Recognition criteria for estimated liabilities.
When the obligations related to litigation, debt guarantee, loss contract, restructuring and other contingent mattersmeet the following conditions at the same time, the company is recognized as an estimated liability:
(1) the obligation is a current obligation of the Company;
(2) the performance of this obligation is likely to lead to the outflow of economic benefits from the company;
(3) the amount of the obligation can be measured reliably.
2. The method of measuring all kinds of estimated liabilities.
The Company expects that the liabilities are initially measured on the basis of the best estimate of the expenditurerequired to meet the relevant current obligations.In determining the best estimates, the Company takes into account such factors as risks, uncertainties and the timevalue of money associated with contingencies. If the time value of money has a significant impact, the best estimateis determined by discounting the relevant future cash outflows.The best estimates are dealt with in the following cases:
If there is a continuous range (or interval) of the required expenditure, and the possibility of various results withinthat range is the same, the best estimate is determined according to the middle value of the range, that is, the averageof the upper and lower limits.Where there is no continuous range (or interval) of expenditure requirements, or although there is a continuousrange, the possibility of various outcomes within that range is different, if a contingent event involves a singleproject, the best estimate is determined on the basis of the amount most likely to occur; if a contingent eventinvolves multiple projects, the best estimate is determined on the basis of various possible outcomes and relatedprobabilities.If all or part of the expenses required for the Company's settlement of the estimated liabilities are expected to becompensated by a third party, the amount of compensation shall be recognized separately as assets when it isbasically determined that it can be received, and the amount of compensation recognized shall not exceed the bookvalue of the estimated liabilities.
23. Share payment.
The company's share-based payment is a transaction in which equity instruments are granted or liabilitiesdetermined on the basis of equity instruments in order to obtain services provided by employees or other parties.The company's share-based payments are equity-settled share-based payments.Where the share-based payment settled by equity is exchanged for services provided by the staff and workers, thefair value of the equity instruments granted to the staff and workers shall be measured. If the company pays forshares in restricted shares, the staff and workers shall contribute to subscribe for the shares, and the shares shall notbe listed, circulated or transferred until the unlocking conditions are met and unlocked; if the unlocking conditionsstipulated in the final equity incentive plan are not met, then the company buys back the shares at the agreed price inadvance. When the Company obtains the payment made by the employee to subscribe for restricted shares, itrecognizes the share capital and capital reserve (equity premium) in accordance with the subscription obtained, andat the same time recognizes a liability in full with respect to the repurchase obligation and recognizes the inventorystock. On each balance sheet day during the waiting period, the Company makes the best estimate of the number ofexercisable equity instruments on the basis of the latest follow-up information such as [changes in the number ofworkable employees] and [whether or not the prescribed performance conditions are met]. According to the fairvalue on the date of the grant, the services obtained in the current period shall be included in the relevant costs orexpenses, and the capital reserve shall be increased accordingly. No adjustments will be made to the recognizedrelevant costs or expenses and the total amount of owners' equity after the date of exercise. However, if the right canbe exercised immediately after the grant, the relevant costs or expenses shall be included in accordance with the fairvalue on the date of the grant, and the capital reserve shall be increased accordingly.For the share payment that fails to exercise the right in the end, the cost or fee is not recognized, unless the exercisecondition is a market condition or a non-exercisable condition, regardless of whether or not the market condition ornon-exercisable condition is met, as long as the non-market conditions in all the conditions of the exercisable rightare met, it is regarded as the exercisable right.If the terms of equity-settled share payments are modified, at least the services obtained are confirmed in accordancewith the unmodified terms. In addition, any change that increases the fair value of the equity instrument granted, orany change that is beneficial to the employee on the modification date, recognizes the increase in access to services.If the equity-settled share payment is cancelled, it will be treated as an accelerated exercise on the cancellation date,and the amount that has not yet been recognized shall be recognized immediately. If the employee or other party
may choose to meet the conditions of the non-exercisable right but not during the waiting period, it shall be treatedas canceling the share payment settled on the basis of equity. However, if a new equity instrument is granted and itis determined on the date of the grant that the new equity instrument is used to replace the cancelled equityinstrument, the granted alternative equity instrument is dealt with in the same manner as the modification of theterms and conditions of the original equity instrument.
24. Income.
Whether the new income criteria have been implemented.
□ Yes √ No
1. General principles for the recognition of income from the sale of goods.
(1) the company has transferred the main risks and rewards in the ownership of the goods to the buyer;
(2) the company does not retain the right of continued management, which is usually associated with ownership, nordoes it exercise effective control over the goods that have been sold;
(3) the amount of income can be measured reliably;
(4) the relevant economic benefits are likely to flow into the company;
(5) the related, incurred or to be incurred costs can be measured reliably.
2. Specific principles.
(1) Corrugated printing press related business.
Domestic sales mode: domestic sales take the date of receipt of goods as the time point of revenue recognition, anddomestic accessories sales take the goods out of warehouse as the time point of revenue recognition.Export mode: the revenue of the whole export machine and accessories is confirmed by the customs declaration ofthe goods and obtaining the customs declaration approved by the customs, the shipment of the goods and the bill oflading of the goods.
(2) Domestic power engine business.
Domestic sales mode: the monthly closing customer takes the invoice after the sales reconciliation as therecognition time point of the income, and the other customers take the invoice after the exit of the warehouse as therecognition time point of the income.Export mode: the time point of revenue recognition is to declare the goods and obtain the customs declarationapproved by the customs, the goods are shipped and the bill of lading is obtained.
(3) Corrugated board production line related business.
Corrugated board production line business income is divided into machine sales revenue and installation serviceincome.Machine sales: 1) domestic sales model: machines arrive at customers and sign for receipt as the time point ofrevenue confirmation;
2) Export mode: the revenue recognition time is based on the declaration of the goods and obtaining the customsdeclaration approved by the customs, the shipment of the goods and the bill of lading.Installation service revenue: confirm the revenue after the completion of the installation and trial operation of themachine.
(4) Domestic new energy battery business.
Revenue from sales: after the customer checks the product quantity, product name, test report and other factors, thecompany applies to the customer for settlement and recognizes the income when obtaining the right of collection.Income from providing labor services: after the implementation of the R & D service provided by the company, thecompany applies to the customer for settlement after the R & D results are checked and accepted by the customer,and the income is recognized when the collection right is obtained.
25. Government subsidy.
1. Types.
Government subsidy is the monetary and non-monetary assets obtained by the company from the government free
of charge. It is divided into assets-related government subsidies and income-related government subsidies.The government subsidy related to assets refers to the government subsidy obtained by the company for thepurchase, construction or other formation of long-term assets. Government subsidies related to income refer togovernment subsidies other than those related to assets.
The company divides government subsidies into specific standards related to assets as follows: the use of the moneyis clearly defined in the government documents, and the direction in which the money is expected to be used isexpected to form the relevant assets.The company divides the government subsidy into specific criteria related to revenue as follows: the use is notspecified in the government documents, and the money is expected to be used in the direction of supplementaryliquidity.If the subsidy object is not clearly specified in the government documents, the company classifies the governmentsubsidy as asset-related or income-related judgment on the basis of: except that the company designates its use asasset-related, it will be included in the profits and losses of the current period.
2. Confirm time point.
When the relevant government subsidy is received, it shall be recognized as the government subsidy.
3. Accounting treatment.
Government subsidies related to assets shall write down the book value of the related assets or be recognized asdeferred income. If it is recognized as deferred income, it shall be recorded into the profits and losses of the currentperiod according to a reasonable and systematic method during the useful life of the relevant assets (other income ifit is related to the daily activities of the company; non-operating income if it has nothing to do with the dailyactivities of the company);Government subsidies related to revenue, which are used to compensate the Company for related costs or losses insubsequent periods, shall be recognized as deferred income, and during the period during which the relevant costs or
losses are recognized, it shall be included in the profits and losses of the current period (those related to the dailyactivities of the Company, other income; non-operating income if not related to the daily activities of the Company)or write-off related costs or losses; If it is used to compensate for the related costs or losses incurred by the Company,it shall be directly included in the profits and losses of the current period (those related to the daily activities of theCompany shall be included in other income; those not related to the daily activities of the Company shall beincluded in non-operating income) or offset by related costs or losses.
26. Deferred income tax assets / deferred income tax liabilities.
The deferred income tax assets recognized as deductible temporary differences shall be limited to the amount oftaxable income that is likely to be obtained in the future period to offset the deductible temporary differences. Fordeductible losses and tax credits that can be carried forward in subsequent years, the corresponding deferred incometax assets are recognized to the extent that future taxable income is likely to be used to offset deductible losses andtax credits.For taxable temporary differences, except in special circumstances, deferred income tax liabilities shall berecognized.Special cases in which deferred income tax assets or deferred income tax liabilities are not recognized include:
initial recognition of goodwill; other transactions or events that occur other than a business merger that affect neitheraccounting profits nor taxable income (or deductible losses).When there is a legal right to settle in net, and it is intended to settle assets in net or to acquire assets and liquidateliabilities at the same time, the current income tax assets and current income tax liabilities shall be reported with thenet amount after offsetting.When you have the legal right to settle current income tax assets and current income tax liabilities with net amount,and deferred income tax assets and deferred income tax liabilities are related to the income tax levied by the sametax collection and administration department on the same taxpayer or on different taxpayers, but during the period ofreversal of each important deferred income tax asset and liability in the future, When the taxpayers involved intendto settle the current income tax assets and liabilities with net amount or acquire assets and pay off liabilities at thesame time, the deferred income tax assets and deferred income tax liabilities shall be reported as the net amount after
offsetting.
27. Lease
(1) Accounting treatment method of operating lease
(1) The lease fee paid by the company for renting assets shall be apportioned on the straight-line method over theentire lease period without deducting the rent-free period and included in the current expenses. The initial directcosts paid by the company related to the lease transaction are included in the current expenses.When the asset lessor bears the expenses related to the lease that should be borne by the company, the companydeducts part of the expenses from the total rent, and allocates the deducted rental expenses within the lease period tobe included in the current expenses.
(2) The lease fee charged by the company for the lease of assets shall be apportioned on the straight-line methodover the entire lease period without deducting the rent-free period, and shall be recognized as lease-related income.The initial direct costs related to the lease transaction paid by the company are included in the current expenses; ifthe amount is larger, they are capitalized and included in the current income in installments on the same basis as thelease-related revenue recognition throughout the entire lease period.When the company has undertaken the lease-related expenses that should be borne by the lessee, the companydeducts this part of the total rental income from the rent, and allocates the deducted rental expenses within the leaseperiod.
(2) The accounting treatment of financial leasing.
(1) Financing leased-in assets: at the beginning of the lease, the company takes the lower of the fair value of theleased assets and the present value of the minimum lease payment as the accounting value of the leased asset, andthe minimum lease payment as the accounting value of long-term payables, the difference is regarded as anunrecognized financing expense. The company uses the effective interest rate method to amortize the unrecognizedfinancing expenses during the lease period of the asset, which shall be included in the financial expenses. The initialdirect expenses incurred by the company shall be included in the value of the leased assets.
(2) Financing leased-out assets: at the beginning of the lease, the company recognizes the difference between thesum of the unsecured residual value of the financial lease receivable and its present value as unrealized financingincome and as lease income in each period in which the rent is received in the future. The initial direct expensesincurred by the company related to the rental transaction shall be included in the initial measurement of the financiallease receivable and reduce the amount of income recognized during the lease term.
28. Other important accounting policies and accounting estimates.
1. Termination of operation.
Termination of operation is a separable component that meets one of the following conditions, and has beendisposed of by the Company or classified as holding for sale by the Company:
(1) the component represents a separate major business or a separate major area of business;
(2) this component is part of an associated plan to dispose of a separate major business or a separate major businessarea;
(3) the component is a subsidiary acquired exclusively for resale.
2. Segment report.
The company determines the operating segment on the basis of the internal organizational structure, managementrequirements and internal reporting system, determines the reporting segment and discloses the segmentinformation on the basis of the operating segment.Operating segment refers to the components of the company that meet the following conditions at the same time:
(1) this component can generate income and expenses in daily activities;
(2) the management of the company can regularly evaluate the operating results of this component in order to decideto allocate resources to it and evaluate its performance;
(3) the company can obtain relevant accounting information such as financial position, operating results and cashflow of this component. If two or more operating divisions have similar economic characteristics and meet certain
conditions, they can be merged into one operating segment.
29. Changes in important accounting policies and accounting estimates.
(1) Important accounting policy changes.
√ Applicable □ not applicable
| The contents and causes of the change of Accounting Policy | Approval procedure | Notes |
| (1) in the balance sheet, "notes receivable and accounts receivable" are split into "notes receivable" and "accounts receivable"; "notes payable and accounts payable" are split into "notes payable" and "accounts payable"; comparative data are adjusted accordingly. | Examined and approved by the board of directors | (1) merger: "notes receivable and accounts receivable" are divided into "notes receivable" and "accounts receivable". The balance of "notes receivable" at the end of last year is 1,835,883,950.01 yuan, and that of "accounts receivable" is 1,496,368,415.86 yuan at the end of last year. "notes payable and accounts payable" are divided into "notes payable" and "accounts payable", and the balance of "notes payable" at the end of last year is 990,875,308.24 yuan. "accounts payable" at the end of the previous year balance of 1,588,338,349.43 yuan. (2) parent company: "notes receivable and accounts receivable" are divided into "notes receivable" and "accounts receivable". The balance of "notes receivable" is 54,212,840.07 yuan at the end of the previous year, and the balance of "accounts |
| receivable" is 121,118,535.06 yuan at the end of the previous year. "notes payable and accounts payable" are divided into "notes payable" and "accounts payable". The balance of "notes payable" is 65,409,402.46 yuan at the end of last year, and the balance of "accounts payable" is 62,615,627.84 yuan at the end of last year. | ||
| (2) adjust the income statement "reduction: asset impairment loss" to "plus: asset impairment loss (loss filled in"-")". The comparative data are adjusted accordingly. | Examined and approved by the board of directors | (1) merger: the amount of "asset impairment loss" is -109,839,858.68 yuan in 2019 and -3,955,901,600.48 yuan in 2018. (2) parent company: the amount of "asset impairment loss" is -15,761,304.34 yuan in 2019 and -3,891,904,346.10 yuan in 2018. |
| (3) add "credit impairment loss" to the income statement, count the expected credit loss formed by the impairment provision of financial assets into the account of "credit impairment loss", and the comparative data will no longer be adjusted retroactively. | Examined and approved by the board of directors | (1) merger: the amount of "credit impairment loss" in 2019 is -34,097,839.70 yuan. (2) parent company: the amount of "credit impairment loss" in 2019 is -2,394,961.06 yuan. |
| (4) due to the change of the item name of the statement, "financial assets measured at fair value and whose changes are included in the profits and losses of the current period" are reclassified to "transactional financial assets". | Examined and approved by the board of directors | (1) consolidation: financial assets measured at fair value and whose changes are included in the profits and losses of the current period: a decrease of 800160.93 yuan |
| (5) reclassify some "receivables" to "financial assets (debt instruments) measured at fair value and whose changes are included in other comprehensive income" | Examined and approved by the board of directors | (1) merger: notes receivable: reduced by 1,803,558,515.85 yuan, accounts receivable financing: increased by 1,803,558,515.85 yuan. (2) parent company: notes receivable: reduced by 51,480,607.78 yuan, accounts receivable financing: increased by 51,480,607.78 yuan. |
(1) implement the Circular of the Ministry of Finance on revising and issuing the format of General EnterpriseFinancial statements for 2019 and the Circular on revising and issuing the format of Consolidated Financialstatements (2019 Edition).On April 30, 2019 and September 19, 2019, the Ministry of Finance issued the notice on revising and issuing theformat of General Enterprise Financial statements in 2019 (Finance (2019) No. 6) and on the revision of the formatof Consolidated Financial statements (2019 Edition). Notice (Finance and Accounting (2019) No. 16), the format ofgeneral enterprise financial statements has been revised.
(2) implementation of "Accounting Standards for Enterprises No. 22-recognition and Measurement of FinancialInstruments", "Accounting Standards for Enterprises No. 23-transfer of Financial assets", "Accounting Standardsfor Enterprises No. 24-hedging Accounting" and "Accounting Standards for Enterprises No. 37-presentation ofFinancial Instruments" (revised in 2017).In 2017, the Ministry of Finance revised "Accounting Standards for Enterprises No. 22-recognition andMeasurement of Financial Instruments", "Accounting Standards for Enterprises No. 23-transfer of Financial assets","Accounting Standards for Enterprises No. 24-hedging Accounting" and "Accounting Standards for Enterprises No.37-presentation of Financial Instruments". The revised guidelines stipulate that for financial instruments that havenot been terminated for recognition on the first implementation date, if the previous recognition and measurementare inconsistent with the requirements of the revised standards, they shall be adjusted retroactively. If the data of theprevious comparative financial statements are inconsistent with the requirements of the revised standards, there isno need to adjust. The Company will adjust the retained earnings and other consolidated income at the beginning of
the year due to the cumulative impact of retroactive adjustments.
(3) implementation of Accounting Standards for Enterprises No. 7-Exchange of non-Monetary assets (revised in2019).The Ministry of Finance issued Accounting Standards for Enterprises No. 7-Exchange of non-monetary assets(revised in 2019) (Accounting (2019) No. 8) on May 9, 2019. The revised standards will come into effect on June 10,2019. The exchange of non-monetary assets that occurred between January 1, 2019 and the date of implementationof this standard shall be adjusted in accordance with this standard. Non-monetary asset exchanges that took placebefore January 1, 2019 do not need to be adjusted retroactively in accordance with the provisions of these Standards.The implementation of the above standards by the Company had no significant impact during the reporting period.
(4) implementation of Accounting Standards for Enterprises No. 12-debt restructuring (revised in 2019).The Ministry of Finance issued the Accounting Standards for Enterprises No. 12-debt restructuring (revised in 2019)(Finance and Accounting (2019) No. 9) on May 16, 2019. The revised standards will come into effect on June 17,2019. The debt restructuring that occurs between January 1, 2019 and the date of implementation of this standardshall be adjusted in accordance with this standard. Debt restructuring that occurred before January 1, 2019 does notneed to be adjusted retroactively in accordance with the provisions of these Standards. The implementation of theabove standards by the Company had no significant impact during the reporting period.
（2）Changes in important accounting estimates
□ Applicable √ not applicable
（3）Since 2019, the implementation of new financial instruments standards, new income standards or newlease standards will be adjusted to implement the projects related to the financial statements at thebeginning of the year.
√ Applicable □ not applicable
Consolidated balance sheet.
Unit: yuan
| Item | December 31, 2018 | January 1, 2019 | Adjust integer |
| Current assets: | |||
| Money funds | 2,547,345,874.57 | 2,547,345,874.57 | |
| Settlement provisions | |||
| Dismantling funds | |||
| Trading financial assets | 800,160.93 | 800,160.93 | |
| Financial assets measured at fair value and their changes are included in the current profit and loss | 800,160.93 | -800,160.93 | |
| Derivative financial assets | |||
| Bill receivable | 1,835,883,950.01 | 1,835,883,950.01 | -1,803,558,515.85 |
| Accounts receivable | 1,496,368,415.86 | 1,496,368,415.86 | |
| Receivable financing | 1,803,558,515.85 | 1,803,558,515.85 | |
| Prepayments | 39,723,410.14 | 39,723,410.14 | |
| Premium receivable | |||
| Receivable reinsurance account | |||
| Provision for reinsurance contract receivable | |||
| Other receivables | 104,911,299.69 | 104,911,299.69 | |
| Among them: interest | 7,885,209.04 | 7,885,209.04 |
| receivable | |||
| Dividend receivable | |||
| Buy back resale financial assets | |||
| Stock | 935,775,074.07 | 935,775,074.07 | |
| Contract assets | |||
| Holding assets for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 54,636,044.13 | 54,636,044.13 | |
| Total current assets | 7,015,444,229.40 | 7,015,444,229.40 | |
| Non-current assets: | |||
| Loans and advances | |||
| Debt investment | |||
| Available for sale financial assets | |||
| Other debt investments | |||
| Held to maturity investments | |||
| Long-term receivables | 11,623,598.01 | 11,623,598.01 | |
| Long-term equity investment | 79,771,169.72 | 79,771,169.72 | |
| Investment in other equity instruments | |||
| Other non-current financial |
| assets | |||
| Investment real estate | |||
| Fixed assets | 685,262,087.53 | 685,262,087.53 | |
| Construction in progress | 10,480,100.82 | 10,480,100.82 | |
| Productive biological assets | |||
| oil and gas asset | |||
| Right-of-use asset | |||
| Intangible assets | 341,038,319.94 | 341,038,319.94 | |
| Development expenditure | |||
| Goodwill | 670,286,756.52 | 670,286,756.52 | |
| Long-term prepaid expenses | 45,188,773.09 | 45,188,773.09 | |
| Deferred tax assets | 119,163,031.39 | 119,163,031.39 | |
| Other non-current assets | 8,715,609.47 | 8,715,609.47 | |
| Total non-current assets | 1,971,529,446.49 | 1,971,529,446.49 | |
| total assets | 8,986,973,675.89 | 8,986,973,675.89 | |
| Current liabilities: | |||
| Short-term loan | 250,525,029.95 | 250,525,029.95 | |
| Borrowing from the Central Bank | |||
| Borrowed funds | |||
| Transactional financial liabilities |
| Financial liabilities measured at fair value and whose changes are included in the current profit and loss | |||
| Derivative financial liabilities | |||
| Bills payable | 990,875,308.24 | 990,875,308.24 | |
| Accounts payable | 1,588,338,349.43 | 1,588,338,349.43 | |
| Advance payment | 403,630,155.02 | 403,630,155.02 | |
| Contract liabilities | |||
| Selling back financial assets | |||
| Deposits and Interbank deposit | |||
| Agent trading securities | |||
| Agent underwriting securities | |||
| Staff payable | 107,225,672.90 | 107,225,672.90 | |
| Taxes payable | 298,253,035.20 | 298,253,035.20 | |
| Other payables | 150,463,325.70 | 150,463,325.70 | |
| Of which: interest payable | 3,332,499.94 | 3,332,499.94 | |
| Dividend payable | |||
| Fees and commissions | |||
| Reinsurance accounts payable | |||
| Holding liabilities for sale |
| Non-current liabilities due within one year | 95,200,648.23 | 95,200,648.23 | |
| Other current liabilities | 59,244.51 | 59,244.51 | |
| Total current liabilities | 3,884,570,769.18 | 3,888,825,075.66 | |
| Non-current liabilities: | |||
| Insurance contract reserve | |||
| Long term loan | 536,358,921.02 | 536,358,921.02 | |
| Bonds payable | |||
| Of which: preferred stock | |||
| Perpetual debt | |||
| Lease liability | |||
| Long-term payables | |||
| Long-term payable employee compensation | 10,163,946.95 | 10,163,946.95 | |
| Estimated liabilities | 452,856,804.45 | 452,856,804.45 | |
| Deferred income | 41,528,340.45 | 41,528,340.45 | |
| Deferred income tax liabilities | 29,261,746.53 | 29,261,746.53 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 1,070,169,759.40 | 1,065,915,452.92 | |
| Total Liabilities | 4,954,740,528.58 | 4,954,740,528.58 | |
| Owners' equity: |
| Share capital | 1,838,647,096.00 | 1,838,647,096.00 | |
| Other equity instruments | |||
| Of which: preferred stock | |||
| Perpetual debt | |||
| Capital reserve | 5,298,075,978.80 | 5,298,075,978.80 | |
| Minus: treasury shares | 63,597,455.75 | 63,597,455.75 | |
| Other comprehensive income | 20,300,909.34 | 20,300,909.34 | |
| Special reserves | |||
| Surplus reserve | 51,830,974.45 | 51,830,974.45 | |
| General risk preparation | |||
| Undistributed profit | -3,118,692,266.64 | -3,118,692,266.64 | |
| Total equity attributable to owners of parent company | 4,026,565,236.20 | 4,026,565,236.20 | |
| Minority shareholder interest | 5,667,911.11 | 5,667,911.11 | |
| Total owner's equity | 4,032,233,147.31 | 4,032,233,147.31 | |
| Total Liabilities and Owner's Equity | 8,986,973,675.89 | 8,986,973,675.89 |
Adjustment description.Parent company balance sheet.
Unit: yuan
| Item | December 31, 2018 | January 1, 2019 | Adjust integer |
| Current assets: |
| Monetary fund. | 1,570,620,697.54 | 1,570,620,697.54 | |
| Transactional financial assets. | |||
| Financial assets measured at fair value and whose changes are included in the profits and losses of the current period. | |||
| Derivative financial assets. | |||
| Notes receivable. | 54,212,840.07 | 2,732,232.29 | -51,480,607.78 |
| Accounts receivable. | 121,118,535.06 | 121,118,535.06 | |
| Receivable financing. | 51,480,607.78 | 51,480,607.78 | |
| Advance payment. | 2,479,601.45 | 2,479,601.45 | |
| Other receivables. | 108,624,755.41 | 108,624,755.41 | |
| Among them: interest receivable. | 7,684,542.37 | 7,684,542.37 | |
| Dividend receivable. | |||
| Inventory. | 136,007,118.35 | 136,007,118.35 | |
| Contract assets. | |||
| Hold assets for sale. | |||
| Non current assets due within one year. | |||
| Other current assets. | 826,850.50 | 826,850.50 |
| Total current assets. | 1,993,890,398.38 | 1,993,890,398.38 | |
| Non-current assets: | |||
| Debt investment. | |||
| Available-for-sale financial assets. | |||
| Other creditor's rights investment. | |||
| Hold-to-maturity investment. | |||
| Long-term receivables. | 11,623,598.01 | 11,623,598.01 | |
| Long-term equity investment. | 1,339,624,909.25 | 1,339,624,909.25 | |
| Investment in other equity instruments. | |||
| Other illiquid financial assets. | |||
| Investment real estate. | |||
| Fixed assets. | 351,626,001.28 | 351,626,001.28 | |
| Project under construction. | 3,311,436.39 | 3,311,436.39 | |
| Productive biological assets. | |||
| Oil and gas assets. | |||
| Right to use assets. | |||
| Intangible assets. | 59,453,607.94 | 59,453,607.94 | |
| Development expenditure. | |||
| goodwill. |
| Long-term prepaid expenses. | 3,672,675.03 | 3,672,675.03 | |
| Deferred income tax assets. | 3,184,523.16 | 3,184,523.16 | |
| Other non-current assets. | 591,489.00 | 591,489.00 | |
| Total non-current assets. | 1,773,088,240.06 | 1,773,088,240.06 | |
| Total assets. | 3,766,978,638.44 | 3,766,978,638.44 | |
| Current liabilities: | |||
| Short-term loan. | 140,000,000.00 | 140,000,000.00 | |
| Transactional financial liabilities. | |||
| Financial liabilities measured at fair value and whose changes are included in the profits and losses of the current period. | |||
| Derivative financial liabilities. | |||
| Notes payable. | 65,409,402.46 | 65,409,402.46 | |
| Accounts payable. | 62,615,627.84 | 62,615,627.84 | |
| Advance payment. | 24,602,458.76 | 24,602,458.76 | |
| Contractual liability. | |||
| Salary payable to staff and workers. | 14,558,039.50 | 14,558,039.50 | |
| Taxes payable. | 5,090,075.19 | 5,090,075.19 |
| Other payables. | 59,251,915.06 | 59,251,915.06 | |
| Among them: interest payable. | |||
| Dividend payable. | |||
| Hold unsold liabilities. | |||
| Non-current liabilities due within one year. | |||
| Other current liabilities. | 1,116,666.67 | ||
| Total current liabilities. | 371,527,518.81 | 371,527,518.81 | |
| Non-current liabilities: | |||
| Long-term loan. | |||
| Bonds payable. | |||
| Among them: preferred stock. | |||
| Perpetual debt. | |||
| Lease liability. | |||
| Long-term payable. | |||
| Long-term salary payable to staff and workers. | |||
| Estimated liability. | |||
| Deferred return. | 15,540,291.66 | 15,540,291.66 | |
| Deferred income tax liability. | |||
| Other non-current liabilities. |
| Total non-current liabilities. | 15,540,291.66 | 15,540,291.66 | |
| Total liabilities. | 387,067,810.47 | 387,067,810.47 | |
| Owner's equity: | |||
| Capital stock. | 1,838,647,096.00 | 1,838,647,096.00 | |
| Other equity instruments. | |||
| Among them: preferred stock. | |||
| Perpetual debt. | |||
| Capital reserve. | 5,055,665,185.99 | 5,055,665,185.99 | |
| Minus: inventory stock. | 63,597,455.75 | 63,597,455.75 | |
| Other comprehensive income. | |||
| Special reserve. | |||
| Surplus reserve. | 51,830,974.45 | 51,830,974.45 | |
| Undistributed profit. | -3,502,634,972.72 | -3,502,634,972.72 | |
| Total owner's equity. | 3,379,910,827.97 | 3,379,910,827.97 | |
| Total liabilities and owners' equity | 3,766,978,638.44 | 3,766,978,638.44 |
Adjustment description.
（4）Retrospective adjustment of new financial instruments standards or new leasing standards since 2019
□ Applicable √ Not applicable
VI.Taxes.
1. Main taxes and tax rates
| Tax category | Tax basis | Tax rate |
| Value added tax | The output tax is calculated on the basis of the income from the sale of goods and taxable services calculated according to the provisions of the tax Law. after deducting the input tax allowed to be deducted in the current period, the difference is value-added tax payable. | 16%、13%、6% |
| Urban maintenance and construction tax | Calculated and levied on the basis of value-added tax and consumption tax actually paid | 7%、5% |
| corporate income tax | Calculated and levied on the basis of taxable income | See the table below |
| Additional education fees | Calculated and levied on the basis of value-added tax and consumption tax actually paid | 3% |
| Local education addition | Calculated and levied on the basis of value-added tax and consumption tax actually paid | 2% |
| Property tax | If it is levied ad valorem, it shall be paid at 1.2% of the remaining value after deducting 30% of the original value of the property at once; if levied from rent, it | 1.2%、12% |
| shall be paid at 12% of the rental income. | ||
| Land use tax | The area of land registered in the land use right certificate | 3 yuan per square meter |
If there are different tax payers of enterprise income tax rates, the disclosure shall be explained.
| Name of tax subject | Income tax rate |
| Our company * 1 | 15% |
| Dongfang Precision（HK） | 16.50% |
| Dongfang Precision（Netherland） | 20% |
| Fosber Group | 24% |
| Fosber US | 21% |
| Fosber Tianjin | 25% |
| Shunyi Investment | 25% |
| Parsun Power*2 | 15% |
| Italian EDF | 24% |
| Fosber Asia*3 | 15% |
| Tiruna Group | 28% |
| Tiruna S.L.U. | 28% |
| Tratatamientos Industriales Tiruna S.A.U. | 28% |
| Tiruna Brazil | 34% |
| Tiruna France SARL | 15% |
| SCI Candan | 15% |
| Tiruna UK Ltd | 19% |
| Guangdong Tiruna | 25% |
| Tiruna US | 21% |
| Beijing Pride | 15% |
| Changzhou Pride | 25% |
2. Tax preference.
* 1 The Company passed the review of the High-tech Enterprises of Guangdong Provincial Department of Scienceand Technology, Guangdong Provincial Department of Finance, Guangdong State Taxation Bureau and GuangdongLocal Taxation Bureau in November 2017 and obtained the jointly issued "High-tech Enterprise Certificate"(Certificate No.: GR201744002995), which is valid for three years. The enterprise income tax shall be calculatedand paid at a reduced tax rate of 15% within the period of validity.
* 2 Parsun Power, a subsidiary of the company, passed the review of high-tech enterprises of Jiangsu ProvincialDepartment of Science and Technology, Jiangsu Provincial Department of Finance and Jiangsu State TaxationBureau on November 7, 2019 and obtained the high-tech enterprise certificate (certificate number:
GR201932000339), which is valid for three years, and the enterprise income tax shall be reduced by 15% within theperiod of validity.
* 3 Fosber Asia, a subsidiary of the Company, approved and obtained the "High-tech Enterprise Certificate"(Certificate No.: GR201844003599) jointly issued by the Department of Science and Technology of GuangdongProvince, the Department of Finance of Guangdong Province and the State Taxation Bureau of GuangdongProvince on November 28th, 2018, valid for three years, and the enterprise income tax shall be reduced by 15%during the period of validity.
VII. Project Notes for Consolidated Financial statements.
1. Monetary funds.
Unit: yuan
| Item | Closing balance | Opening balance. |
| Cash in stock | 249,951.68 | 136,697.03 |
| Bank deposit | 2,224,849,135.20 | 2,107,860,745.32 |
| Funds in other currencies | 131,604,347.72 | 439,348,432.22 |
| total | 2,356,703,434.60 | 2,547,345,874.57 |
| Of which: the total amount of money deposited abroad | 340,057,779.28 | 416,074,231.51 |
Other instructions.Among them, the details of the currency funds that are restricted by mortgage, pledge or freeze, as well as those placed abroad andsubject to restrictions on the repatriation of funds are as follows:
| Item | Closing balance | Balance at the end of last year. |
| Bank acceptance margin | 4,397,386.30 | 307,393,582.64 |
| Loan guarantee | 124,024,093.46 | 131,273,400.00 |
| Pledged time deposit | 480,000.00 | 480,000.00 |
| Deposit for prepaid account. | 526,000.00 |
| Long-term deposit for settlement and sale of foreign exchange. | 551,217.45 | 201,449.58 |
| Total | 129,978,697.21 | 439,348,432.22 |
2. Transactional financial assets.
Unit: yuan
| Item | Closing balance | Opening balance. |
| Financial assets measured at fair value and whose changes are included in the profits and losses of the current period. | 1,039,381.59 | 800,160.93 |
| Among them: | ||
| Derivative financial assets | 1,039,381.59 | 800,160.93 |
| Financial assets that are designated to be measured at fair value and whose changes are included in the profits and losses of the current period. | 1,163,000,000.00 | |
| Among them: | ||
| Bank investment in wealth management products | 1,163,000,000.00 | |
| Total | 1,164,039,381.59 | 800,160.93 |
Other instructions:
3. Notes receivable.
(1) classified presentation of bills receivable.
Unit: yuan
| Item | Closing balance | Opening balance. |
| Bank acceptance bill | 1,803,558,515.85 |
| Commercial acceptance bill | 32,325,434.16 | |
| Total | 1,835,883,950.01 |
If the provision for bad debts of notes receivable is calculated according to the general model of expected credit loss, please refer tothe disclosure methods of other receivables to disclose the relevant information about the provision for bad debts:
□ Applicable √ not applicable
(2) Notes receivable that have been endorsed or discounted by the company at the end of the period and have not yet maturedon the balance sheet date.
Unit: yuan
| Item | Termination recognition amount at the end of the period. | Unterminated recognition amount at the end of the period. |
| Bank acceptance bill. | 35,526,147.05 | |
| Total | 35,526,147.05 |
4. Accounts receivable
(1) Classified disclosure of accounts receivable
unit: yuan
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage | Amount | Withdrawal ratio | Amount | Percentage | Amount | Withdrawal ratio | |||
| Accounts receivable that make provision for bad debts on a single basis | 1,088,998.63 | 0.18% | 1,088,998.63 | 100.00% | 253,258,629.96 | 16.29% | 35,362,783.70 | 217,895,846.26 | ||
| Among them: | ||||||||||
| Accounts receivable for which individual amounts are significant and provision for bad debts is made separately. | 242,106,495.85 | 15.58% | 24,210,649.59 | 10.00% | 217,895,846.26 | |||||
| Accounts receivable in which individual amounts are not significant but provision for bad debts is made separately. | 1,088,998.63 | 1,088,998.63 | 11,152,134.11 | 0.71% | 11,152,134.11 | 100.00% | 0.00 | |||
| Accounts receivable made by combination of provisions for bad debts | 613,715,620.08 | 99.82% | 16,284,410.06 | 2.65% | 597,431,210.02 | 1,301,050,905.13 | 83.71% | 22,578,335.53 | 1.74% | 1,278,472,569.60 |
| Among them: | ||||||||||
| Credit risk feature combination | 1,301,050,905.13 | 83.71% | 22,578,335.53 | 1.74% | 1,278,472,569.60 | |||||
| Age analysis combination | 613,715,620.08 | 16,284,410.06 | 597,431,210.02 | |||||||
| Total | 614,804,618.71 | 100.00% | 17,373,408.69 | 597,431,210.02 | 1,554,309,535.09 | 100.00% | 57,941,119.23 | 1,496,368,415.86 |
Provision for bad debts on a single basis: accounts receivable that are not significant in a single amount but set aside the provision for bad debts separately.
Unit: yuan
| Name | Ending balance | |||
| Book balance | Bad debt provision | Withdrawal ratio | Withdrawal reason | |
| TECHSERVICE-KHABAROVSK CJSC | 1,088,998.63 | 1,088,998.63 | 100.00% | The customer goes bankrupt and is unable to pay off the maturing debt |
| Total | 1,088,998.63 | 1,088,998.63 | -- | -- |
Make provision for bad debts on a single basis:
Unit: yuan
| Name | Ending balance | |||
| Book balance | Bad debt provision | Withdrawal ratio | Withdrawal reason | |
Provision for bad debts by combination: aging analysis combination.
Unit: yuan
| Name | Ending balance | ||
| Book balance | Bad debt provision | Withdrawal ratio | |
| Within 1 year (including 1 year) | 569,470,250.59 | 14,107,722.48 | 2.48% |
| 1 to 2 years (inclusive) | 28,435,925.54 | 155,721.54 | 0.55% |
| 2 to 3 years (inclusive) | 5,658,734.95 | 234,054.25 | 4.14% |
| 3 to 4 years (inclusive) | 2,943,649.11 | 59,415.90 | 2.02% |
| 4 to 5 years (inclusive) | 2,150,918.82 | 335,339.38 | 15.59% |
| More than 5 years | 5,056,141.07 | 1,392,156.51 | 27.53% |
| Total | 613,715,620.08 | 16,284,410.06 | -- |
The description that determines the basis of the combination:
Set aside provisions for bad debts according to the combination:
Unit: yuan
| Name | Ending balance | ||
| Book balance | Bad debt provision | Withdrawal ratio | |
The description that determines the basis of the combination:
If the provision for bad debts of accounts receivable is calculated according to the general model of expected credit loss, please referto the disclosure methods of other receivables to disclose the relevant information about the provision for bad debts:
□ Applicable √ not applicable
Disclosure by age.
Unit: yuan
| Account age | Book balance |
| Within 1 year (including 1 year) | 538,200,317.40 |
| 1 to 2 years | 57,597,031.52 |
| 2 to 3 years | 8,856,560.79 |
| More than 3 years | 10,150,709.00 |
| 3 to 4 years | 2,943,649.11 |
| 4 to 5 years | 2,150,918.82 |
| more than 5 years | 5,056,141.07 |
| Total | 614,804,618.71 |
(2) provision for bad debts made, recovered or transferred in the current period.
Provision for bad debts in the current period:
Unit: yuan
| Category | Opening balance | Current change amount | Ending balance | |||
| Provision | To take back or turn back. | Write-off | Other | |||
| Make provision for bad debts on a single basis | 35,362,783.70 | 23,182,364.20 | -57,456,149.27 | 1,088,998.63 | ||
| Set aside provisions for bad debts according to the combination. | 22,578,335.53 | 5,198,708.94 | 26,065.47 | -11,466,568.94 | 16,284,410.06 | |
| Total | 57,941,119.23 | 28,381,073.14 | 26,065.47 | -68,922,718.21 | 17,373,408.69 |
Among them, the amount of bad debts to be recovered or transferred back in the current period is important:
Unit: yuan
| Unit name | Recover or return the amount | Recovery mode |
(3) the actual write-off of accounts receivable in the current period.
Unit: yuan
| Item | Write-off amount |
| Actual write-off of accounts receivable | 26,065.47 |
(4) the status of the top five accounts receivable collected by the defaulting party at the end of the period.
Unit: yuan
| Unit name | Final balance of accounts receivable | As a percentage of the total balance of accounts receivable at the end of the period | Final balance of provision for bad debts |
| CARTONSTRONG ITALIA S.R.L. | 48,818,739.20 | 7.94% | |
| CARTOGRAF S.A. DE C.V. | 27,637,475.90 | 4.50% | |
| EVEREST CORRUGATED (PTY) | 26,790,400.75 | 4.36% |
| LTD | |||
| SARL COMPEX IMPORT EXPORT COOPERATIVE IMMOBILIERE | 20,898,616.05 | 3.40% | |
| International Paper | 17,326,211.49 | 2.82% | |
| Total | 141,471,443.39 | 23.02% |
5. Accounts receivable financing.
Unit: yuan
| Item | Ending balance | Opening balance |
| Notes receivable | 55,447,099.32 | 1,803,558,515.85 |
| Total | 55,447,099.32 | 1,803,558,515.85 |
Changes in the current period of financing of receivables and changes in fair value
√ Applicable □ not applicable
| Item | Balance at the beginning of the year | Added in this time | Termination confirmation of the current period | Other changes | Ending balance |
| Notes receivable | 1,803,558,515.85 | 11,593,989,485.39 | 12,351,634,595.31 | -990,466,306.61 | 55,447,099.32 |
| Total | 1,803,558,515.85 | 11,593,989,485.39 | 12,351,634,595.31 | -990,466,306.61 | 55,447,099.32 |
If the financing impairment provision for receivables is calculated according to the general model of expected credit loss, please referto the disclosure methods of other receivables to disclose the relevant information about the impairment provision:
□ Applicable √ not applicable
Other instructions:
6. Advance payment.
(1) prepayments are shown by age.
Unit: yuan
| Account age | Ending balance | Opening balance | ||
| Amount | Percentage | Amount | Percentage | |
| Within 1 year | 24,221,885.95 | 93.52% | 38,250,140.85 | 96.29% |
| 1 to 2 years | 1,367,636.64 | 5.28% | 353,286.27 | 0.89% |
| 2 to 3 years | 56,688.15 | 0.22% | 716,013.27 | 1.80% |
| More than 3 years | 254,913.11 | 0.98% | 403,969.75 | 1.02% |
| Total | 25,901,123.85 | -- | 39,723,410.14 | -- |
Explanation of the reasons for the non-timely settlement of prepayments with an age of more than one year and important amounts:
(2) the advance payment of the top five balances collected by the prepaid object at the end of the period
| Prepaid object | Ending balance | Percentage of total balance of prepayments at the end of the period (%) |
| Unico, Inc. | 3,051,603.24 | 11.78 |
| Sun Corp. | 2,519,963.44 | 9.73 |
| GUDEMA TECNOLOGIE SRL | 1,722,093.61 | 6.65 |
| CARPINOX SRL | 996,163.63 | 3.85 |
| Shanghai Dasong Corrugated Roller Co., Ltd. | 886,162.55 | 3.42 |
| Total | 9,175,986.47 | 35.43 |
7. Other receivables.
Unit: yuan
| Item | Ending balance | Opening balance |
| Interest receivable | 721,935.36 | 7,885,209.04 |
| Other receivables | 78,851,179.13 | 97,026,090.65 |
| Total | 79,573,114.49 | 104,911,299.69 |
(1) interest receivable.
1) Classification of interest receivable.
Unit: yuan
| Item | Ending balance | Opening balance |
| Time deposit | 721,935.36 | 7,290,688.49 |
| Financial products | 594,520.55 | |
| Total | 721,935.36 | 7,885,209.04 |
2）Provision for bad debts
□ Applicable √ not applicable
(2) other receivables.
1) Classification of other receivables by nature of the amount.
Unit: yuan
| Nature of payment | Book balance at the end of the period | Opening book balance |
| Current payment | 1,587,414.17 | 72,584.67 |
| Margin, Deposit | 10,743,022.49 | 6,860,644.42 |
| Export tax rebate | 2,110,960.29 | 18,376,442.10 |
| Prepaid service charge | 5,314,977.17 | 7,139,744.74 |
| Other | 14,117,024.25 | 15,976,166.48 |
| Equity transfer | 41,031,375.00 | 41,198,325.00 |
| Employee loans, petty cash | 986,143.77 | 1,411,572.49 |
| Performance compensation | 8,200,000.00 | 8,500,000.00 |
| Total | 84,090,917.14 | 99,535,479.90 |
2) provision for bad debts.
Unit: yuan
| Provision for bad debts | Phase 1 | Phase 2 | Phase 3 | Total |
| Expected credit loss over the next 12 months | Expected credit loss over the entire lifetime (no credit impairment occurs) | Expected credit loss over the entire lifetime (credit impairment has occurred) | ||
| Balance of January 1, 2019 | 2,509,389.25 | 2,509,389.25 | ||
| The balance of January 1, 2019 is in the current period. | —— | —— | —— | —— |
| --moving on to the second stage | -850,000.00 | 850,000.00 | ||
| Current provision | 4,095,756.87 | 1,610,000.00 | 5,705,756.87 | |
| Other change | 2,975,408.11 | 2,975,408.11 | ||
| Balance of 31 December 2019 | 2,779,738.01 | 2,460,000.00 | 5,239,738.01 |
Loss provision changes in book balances with significant changes in the current period
□ Applicable √ not applicable
Disclosure by age.
Unit: yuan
| Account age | Book balance |
| Within 1 year (including 1 year) | 29,859,345.91 |
| 1 to 2 years | 43,855,797.79 |
| 2 to 3 years | 9,043,027.93 |
| More than 3 years | 1,332,745.51 |
| 3 to 4 years | 685,639.96 |
| 4 to 5 years | 369,509.02 |
| more than 5 years | 277,596.53 |
| Total | 84,090,917.14 |
3) Provision for bad debts made, recovered or transferred in the current period.Provision for bad debts in the current period:
Unit: yuan
| Category | Opening balance | Current change amount | Ending balance | ||||||
| Provision | To take back or turn back. | Write-off | Other | ||||||
| Make provision for bad debts on a single basis | 850,000.00 | 2,095,330.00 | -485,330.00 | 2,460,000.00 | |||||
| Set aside provisions for bad | 1,659,389.25 | 3,610,426.87 | -2,490,078.11 | 2,779,738.01 | |||||
| debts according to the combination. | ||||||
| Total | 2,509,389.25 | 5,705,756.87 | -2,975,408.11 | 5,239,738.01 |
4) Other receivables in the top five of the ending balances collected by the defaulting party.
Unit: yuan
| Unit name | The nature of the money | Ending balance | Account age | As a percentage of the total balance of other receivables at the end of the period | Final balance of provision for bad debts |
| 3F IMMOBILIARE SRL | Equity transfer | 41,031,375.00 | 1-2 years | 48.79% | 2,051,568.75 |
| Jiateng Robot (shareholder) | Performance compensation | 8,200,000.00 | 2-3 years | 9.75% | 2,460,000.00 |
| N.E. ENGINEERING | Supplier cash rebate | 1,457,334.25 | Within 1 year | 1.73% | |
| Export rebate receivable | Export rebate receivable | 1,051,258.91 | Within 1 year | 1.25% | |
| Hisense South Co., Ltd. | Deposit | 768,814.00 | 1-2 years | 0.91% | 38,440.70 |
| Total | -- | 52,508,782.16 | -- | 62.43% | 4,550,009.45 |
8. Inventory.
Whether the new income criteria have been implemented.
□ Yes √ No
(1) inventory classification.
Unit: yuan
| Item | Ending balance | Opening balance | ||||
| Book balance. | Price reduction reserve. | Book value. | Book balance. | Price reduction reserve. | Book value. | |
| Raw materials. | 248,492,417.64 | 13,394,596.44 | 235,097,821.20 | 428,354,693.54 | 66,818,123.04 | 361,536,570.50 |
| In product. | 379,351,397.96 | 25,945,105.34 | 353,406,292.62 | 359,882,947.36 | 14,232,978.28 | 345,649,969.08 |
| Inventory goods. | 25,948,936.98 | 103,897.01 | 25,845,039.97 | 55,060,195.62 | 2,177,067.67 | 52,883,127.95 |
| Send out goods. | 43,439,406.00 | 43,439,406.00 | 132,544,524.75 | 5,165,565.57 | 127,378,959.18 | |
| Commissioned processing materials. | 1,873,908.29 | 1,873,908.29 | 35,981,186.22 | 35,981,186.22 | ||
| Semi-finished product. | 12,014,421.40 | 244,188.37 | 11,770,233.03 | 12,564,774.67 | 219,513.53 | 12,345,261.14 |
| Total | 711,120,488.27 | 39,687,787.16 | 671,432,701.11 | 1,024,388,322.16 | 88,613,248.09 | 935,775,074.07 |
(2) provision for inventory price decline.
Unit: yuan
| Item | Opening balance | The amount increased in the current period | Reduced amount in the current period | Ending balance | ||
| Provision | Other | Turn back or. Resale | Other | |||
| Raw materials. | 66,818,123.04 | 20,620,097.36 | 21,615,657.10 | 52,427,966.86 | 13,394,596.44 | |
| In product. | 14,232,978.28 | 17,837,425.37 | 6,125,298.31 | 25,945,105.34 | ||
| Inventory goods. | 2,177,067.67 | 377,756.29 | 1,993,175.46 | 457,751.49 | 103,897.01 | |
| Send out goods. | 5,165,565.57 | 3,516,096.42 | 29,336,219.23 | 1,743,574.72 | 36,274,306.50 | |
| Semi-finished product. | 219,513.53 | 113,098.32 | 88,423.48 | 244,188.37 | ||
| Total | 88,613,248.09 | 42,464,473.76 | 29,336,219.23 | 31,566,129.07 | 89,160,024.85 | 39,687,787.16 |
"current reduction amount-other" mainly includes the provision for the disposal of subsidiary transfer inventory price reduction.
(3) the ending balance of inventory contains the capitalization amount of borrowing costs.
(4) the completed unsettled assets formed by the construction contract at the end of the period.
9. Non-current assets maturing within one year.
Unit: yuan
| Item | Ending balance | Opening balance |
| Long-term receivables due within one year | 356,983.48 | |
| Total | 356,983.48 |
Important debt investments / other debt investments.
Unit: yuan
| Creditor's rights project. | Ending balance | Opening balance | ||||||
| Face value. | Coupon rate. | Real interest rate. | Expiration date. | Face value. | Coupon rate. | Real interest rate. | Expiration date. | |
Other instructions:
10. Other current assets.
Whether the new income criteria have been implemented.
□ Yes √ No
Unit: yuan
| Item | Ending balance | Opening balance |
| VAT to be deducted input tax. | 492,892.14 | |
| Value-added tax allowance. | 2,209,523.18 | 2,096,552.17 |
| Withholding tax. | 14,404,806.23 | 50,420,266.46 |
| Prepaid interest expense. | 129,649.62 | 599,403.65 |
| Prepaid expenses. | 207,209.64 | |
| Other. | 5,395,125.62 | 1,026,929.71 |
| Total | 22,346,314.29 | 54,636,044.13 |
Other instructions:
11. Long-term receivables.
(1) long-term receivables.
Unit: yuan
| Item | Ending balance | Opening balance | Discount rate range | ||||
| Book balance. | Provision for bad debts. | Book value | Book balance. | Provision for bad debts. | Book value | ||
| Sell goods by installments | 11,623,598.01 | 11,623,598.01 | |||||
| Total | 11,623,598.01 | 11,623,598.01 | -- | ||||
Impairment of provision for bad debts.
Unit: yuan
| Provision for bad debts | Phase 1 | Phase 2 | Phase 3 | Total |
| Expected credit loss over the next 12 months | Expected credit loss over the entire lifetime (no credit impairment occurs) | Expected credit loss over the entire lifetime (credit impairment has occurred) | ||
| The balance of January 1, 2019 in the current period. | —— | —— | —— | —— |
Loss provision changes in book balances with significant changes in the current period
□ Applicable √ not applicable
12. Long-term equity investment.
Unit: yuan
| Invested unit. | Opening balance (book value). | Changes in the current period. | Final balance (book value) | Impairment provision final balance | |||||||
| Make an additional investment. | Reduce investment. | Investment profit and loss recognized under the equity method. | Other comprehensive income adjustment. | Changes in other rights and interests. | Declare a cash dividend or profit. | Provision for impairment. | Other | ||||
| I. Joint Venture | |||||||||||
| Tiruna US | 11,176,541.90 | 7,424,725.00 | 141,074.84 | -58,004.61 | -18,684,337.13 | 0.00 | |||||
| Foshan Yinglian Digital Printing equipment Co., Ltd. (hereinafter | 9,761,430.71 | 1,060,193.48 | -310,888.72 | 10,510,735.47 | |||||||
| referred to as "Yinglian Digital") | |||||||||||
| Total | 20,937,972.61 | 8,484,918.48 | -169,813.88 | -58,004.61 | -18,684,337.13 | 10,510,735.47 | |||||
| II. Combined venture | |||||||||||
| Jiateng robot | 57,333,197.11 | 2,803,543.87 | 60,136,740.98 | ||||||||
| Talleres Tapre | 1,535,856.50 | 189,406.64 | -384.56 | 1,724,878.58 | |||||||
| Beijing BAIC Wisdom Energy Technology Co., Ltd. (hereinafter referred to as "BAIC Wisdom") | 1,500,000.00 | -282,002.82 | -1,217,997.18 | ||||||||
| Subtotal | 58,833,197.11 | 1,535,856.50 | 2,710,947.69 | -384.56 | -1,217,997.18 | 61,861,619.56 | |||||
| Total | 79,771,169.72 | 10,020,774.98 | 2,541,133.81 | -58,389.17 | -19,902,334.31 | 72,372,355.03 |
Other instructions
13. Other non-current financial assets.
Unit: yuan
| Item | Ending balance | Opening balance |
| Financial assets measured at fair value and whose changes are included in the profits and losses of the current period | 20,559,159.34 | |
| Total | 20,559,159.34 |
Other instructions
14. Fixed assets.
Unit: yuan
| Item | Ending balance | Opening balance |
| Fixed assets | 585,754,900.75 | 685,262,087.53 |
| Total | 585,754,900.75 | 685,262,087.53 |
(1) fixed assets.
Unit: yuan
| Item | Houses and buildings. | machinery equipment. | Transport equipment | Office equipment. | Electronic equipment. | Other equipment | Total |
| I. the original book value: | |||||||
| 1. Opening balance. | 487,297,686.05 | 350,651,913.35 | 36,265,773.11 | 12,789,682.10 | 9,058,682.48 | 51,911,495.14 | 947,975,232.23 |
| 2.The amount increased in the current period. | 88,211,177.90 | 321,948,827.69 | 2,200,581.59 | 257,660.27 | 3,169,061.79 | 27,918,267.21 | 443,705,576.45 |
| (1) purchase. | 3,606,194.67 | 5,910,257.21 | 431,710.56 | 257,660.27 | 2,705,260.15 | 17,605,142.81 | 30,516,225.67 |
| (2) transfer of projects under construction. | 238,887.31 | 52,158,104.89 | 1,199,609.38 | 463,801.64 | 9,732,724.73 | 63,793,127.95 | |
| (3) increase in business consolidation. | 83,903,179.90 | 263,638,992.19 | 508,734.33 | 746,318.74 | 348,797,225.16 | ||
| (4) the impact | 462,916.02 | 241,473.40 | 60,527.32 | -165,919.07 | 598,997.67 |
| of exchange rate changes. | |||||||
| 3. Reduced amount in the current period. | 1,110,902.98 | 226,845,560.66 | 13,760,976.43 | 165,025.37 | 7,309,053.72 | 46,353,173.84 | 295,544,693.00 |
| (1) disposal or scrap | 9,983,080.74 | 1,192,834.78 | 165,025.37 | 665,736.99 | 1,107,638.74 | 13,114,316.62 | |
| (2) Sale of assets and transfer of assets. | 1,108,740.37 | 213,673,110.66 | 12,568,141.65 | 6,601,350.90 | 45,196,078.51 | 279,147,422.09 | |
| (3) other. | 2,162.61 | 3,189,369.26 | 41,965.83 | 49,456.59 | 3,282,954.29 | ||
| 4.Final balance. | 574,397,960.97 | 445,755,180.38 | 24,705,378.27 | 12,882,317.00 | 4,918,690.55 | 33,476,588.51 | 1,096,136,115.68 |
| 2 Accumulated depreciation. | |||||||
| 1.Opening balance. | 88,172,136.51 | 123,917,305.26 | 22,998,053.24 | 4,340,779.28 | 5,363,710.35 | 17,921,160.06 | 262,713,144.70 |
| 2.The amount increased in the current period. | 64,788,911.78 | 242,277,833.65 | 4,188,251.17 | 1,108,163.76 | 2,139,053.94 | 9,467,162.00 | 323,969,376.30 |
| （1）provision. | 16,962,367.41 | 35,140,902.07 | 3,748,775.92 | 1,108,163.76 | 2,139,053.94 | 8,940,580.63 | 68,039,843.73 |
| （2）increase in business consolidation. | 47,688,024.94 | 206,992,947.05 | 399,695.46 | 435,278.96 | 255,515,946.41 |
| （3）the impact of exchange rate changes. | 138,519.43 | 143,984.53 | 39,779.79 | 91,302.41 | 413,586.16 | ||
| 3.Reduced amount in the current period. | 30,721.33 | 50,143,676.44 | 9,300,954.74 | 164,195.45 | 4,885,146.25 | 11,776,611.86 | 76,301,306.07 |
| （1）disposal or scrap. | 4,564,424.30 | 1,085,157.15 | 164,195.45 | 597,643.61 | 561,887.72 | 6,973,308.23 | |
| （2）Sale of assets and transfer of assets. | 30,721.33 | 45,579,252.14 | 8,215,797.59 | 4,287,502.64 | 11,214,724.14 | 69,327,997.84 | |
| （3）other. | |||||||
| 4.Final balance. | 152,930,326.96 | 316,051,462.47 | 17,885,349.67 | 5,284,747.59 | 2,617,618.04 | 15,611,710.20 | 510,381,214.93 |
| 3、Provision for impairment. | |||||||
| 1.Opening balance. | |||||||
| 2.The amount increased in the current period. | |||||||
| （1）provision. | |||||||
| 3.Reduced |
| amount in the current period. | |||||||
| （1）disposal or scrap. | |||||||
| 4.Final balance. | |||||||
| 4 Book value. | |||||||
| 1. Final book value. | 421,467,634.01 | 129,703,717.91 | 6,820,028.60 | 7,597,569.41 | 2,301,072.51 | 17,864,878.31 | 585,754,900.75 |
| 2.Book value at the beginning of the period | 399,125,549.54 | 226,734,608.09 | 13,267,719.87 | 8,448,902.82 | 3,694,972.13 | 33,990,335.08 | 685,262,087.53 |
15. Projects under construction.
Unit: yuan
| Item | Ending balance | Opening balance |
| Projects under construction | 4,839,241.48 | 10,480,100.82 |
| Total | 4,839,241.48 | 10,480,100.82 |
(1) Projects under construction.
Unit: yuan
| Item | Ending balance | Opening balance |
| Book balance. | Impairment reserve. | Book value | Book balance. | Impairment reserve. | Book value | |
| Building expansion. | 2,697,286.87 | 2,697,286.87 | ||||
| Equipment installation | 4,756,170.68 | 4,756,170.68 | 2,610,612.82 | 2,610,612.82 | ||
| Liyang project construction. | 2,623,573.25 | 2,623,573.25 | ||||
| Beijing Pride equipment installation and Engineering Project. | 834,927.30 | 834,927.30 | ||||
| Software installation. | 83,070.80 | 83,070.80 | 235,223.78 | 235,223.78 | ||
| Fosber Asia office decoration | 1,478,476.80 | 1,478,476.80 | ||||
| Total | 4,839,241.48 | 4,839,241.48 | 10,480,100.82 | 10,480,100.82 |
(2) Changes in the current period of important projects under construction.
Unit: yuan
| Project name. | Budget. | Opening balance. | The amount increased in the | The amount of fixed assets | Other reductions in the current | Final balance. | The cumulative investme | Project progress. | Cumulative amount of | Among them: the capitalized | Current interest capitalization | Source of funds |
| current period. | transferred in the current period. | period. | nt of the project accounts for the proportion of the budget. | interest capitalization. | amount of interest in the current period. | rate. | ||||||
| Installation and renovation of Dongfang Precision equipment. | 3,311,436.39 | 3,137,187.66 | 4,645,190.67 | 1,720,362.58 | 83,070.80 | Other | ||||||
| Beijing Prideequipment installation and Engineering Project. | 834,927.30 | 37,930.30 | 317,942.01 | 554,915.59 | Other | |||||||
| Liyang project construction. | 650,476,000.00 | 2,623,573.25 | 60,143,731.34 | 56,603,093.02 | 6,164,211.57 | Fundraising |
| Fosber Asia office decoration. | 1,478,476.80 | 1,478,476.80 | Other | |||||||||
| Parsun Power equipment installation and Engineering Project. | 2,146,551.72 | 1,354,686.81 | 2,226,902.25 | 1,274,336.28 | Other | |||||||
| Fosber Group equipment installation | 85,136.06 | 6,663,405.66 | 3,266,707.32 | 3,481,834.40 | Other | |||||||
| Total | 650,476,000.00 | 10,480,101.52 | 71,336,941.77 | 63,793,127.95 | 13,184,673.86 | 4,839,241.48 | -- | -- | -- |
16. Intangible assets.
(1) Intangible assets.
Unit: yuan
| Item | Land use right. | right of patent. | Non-patented technology. | Land ownership | Trademark. | Software. | Total |
| I. the original book value: | |||||||
| 1. Opening balance. | 95,890,550.53 | 52,434,511.04 | 16,789,326.21 | 226,232,495.19 | 22,252,776.65 | 413,599,659.62 | |
| 2.The amount increased in the current period. | 2,955,688.00 | 12,543,487.67 | -68,036.21 | 222,915.32 | 11,972,928.18 | 27,626,982.96 | |
| (1) purchase. | 2,955,688.00 | 12,754,597.45 | 697,031.55 | 5,107,790.03 | 21,515,107.03 | ||
| (2) transfer of projects under construction. | |||||||
| (3) increase in business consolidation. | 6,842,829.76 | 6,842,829.76 | |||||
| (4) the impact of exchange rate changes. | -211,109.78 | -68,036.21 | -474,116.23 | 22,308.39 | -730,953.83 | ||
| 3. Reduced amount in the current period. | 109,183,100.00 | 8,212,327.59 | 117,395,427.59 | ||||
| (1) disposal or scrap | 183,224.71 | 183,224.71 | |||||
| (2) Sale of assets and | 109,183,100.00 | 8,029,102.88 | 117,212,202.88 |
| transfer of assets. | |||||||
| (3) other. | 98,846,238.53 | 64,977,998.71 | 16,721,290.00 | 117,272,310.51 | 26,013,377.24 | 323,831,214.99 | |
| 4. Final balance. | |||||||
| 2 Accumulated depreciation. | 15,433,650.64 | 28,944,803.19 | 19,218,240.06 | 8,964,645.79 | 72,561,339.68 | ||
| 1. Opening balance. | 2,097,039.40 | 9,277,522.40 | 10,041,176.68 | 10,964,027.79 | 32,379,766.27 | ||
| 2.The amount increased in the current period. | 2,097,039.40 | 9,394,026.49 | 10,041,425.94 | 4,565,877.34 | 26,098,369.17 | ||
| （1）provision. | 6,379,995.85 | 6,379,995.85 | |||||
| （2）increase in business consolidation. | -116,504.09 | -249.26 | 18,154.60 | -98,598.75 | |||
| （3）the impact of exchange rate changes. | 29,115,493.33 | 1,876,827.16 | 30,992,320.49 | ||||
| 3.Reduced amount in the current period. | 177,755.73 | 177,755.73 | |||||
| （1）disposal or scrap. | 29,115,493.33 | 1,699,071.43 | 30,814,564.76 | ||||
| （2）Sale of | 17,530,690.04 | 38,222,325.59 | 143,923.41 | 18,051,846.42 | 73,948,785.46 |
| assets and transfer of assets. | |||||||
| （3）other. | |||||||
| 4.Final balance. | |||||||
| 3、Provision for impairment. | |||||||
| 1.Opening balance. | |||||||
| 2.The amount increased in the current period. | |||||||
| （1）provision. | |||||||
| 3.Reduced amount in the current period. | |||||||
| （1）disposal or scrap. | |||||||
| 4.Final balance. | 81,315,548.49 | 26,755,673.12 | 16,721,290.00 | 117,128,387.10 | 7,961,530.82 | 249,882,429.53 | |
| 4 Book value. | 80,456,899.89 | 23,489,707.85 | 16,789,326.21 | 207,014,255.13 | 13,288,130.86 | 341,038,319.94 |
The proportion of intangible assets formed by internal research and development of the company to the balance of intangible assets at
the end of this period.
17. Goodwill.
(1) Original book value of goodwill.
Unit: yuan
| The name of the investee or the formation of goodwill. | Opening balance. | Increase in this period. | Decrease in this period. | Final balance | ||
| Formed by the merger of enterprises. | The impact of exchange rate changes. | Disposal. | The impact of exchange rate changes. | |||
| Fosber Group | 161,109,612.59 | -652,872.41 | 160,456,740.18 | |||
| Parsun Power | 208,031,946.10 | 208,031,946.10 | ||||
| Italian EDF | 68,893,042.76 | -279,178.66 | 68,613,864.09 | |||
| Beijing Pride | 4,142,269,073.77 | 4,142,269,073.77 | ||||
| Total | 4,580,303,675.22 | -932,051.08 | 4,142,269,073.77 | 437,102,550.37 | ||
(2) provision for impairment of goodwill.
Unit: yuan
| The name of the investee or the formation of goodwill. | Opening balance | Increase in this period | Decrease in this period | Final balance | ||
| Provision | The impact of exchange rate changes | Disposal | The impact of exchange rate changes | |||
| Parsun Power | 61,855,054.35 | 61,855,054.35 | ||||
| Italian EDF | 68,753,453.43 | -139,589.34 | 68,613,864.09 | |||
| Beijing Pride | 3,848,161,864.35 | 3,848,161,864.35 | ||||
| Total | 3,910,016,918.70 | 68,753,453.43 | -139,589.34 | 3,848,161,864.35 | 130,468,918.44 |
Information about the asset group or asset group portfolio where goodwill is located.Explain the goodwill impairment testing process, the key parameters (such as the forecast period growth rate, stable period growthrate, profit margin, discount rate, forecast period, etc.) and the confirmation method of goodwill impairment loss when predicting thepresent value of future cash flow.
（1）Goodwill Testing Process of Fosber Group
| Item | Goodwill testing process of Fosber Group |
| The formation of goodwill | In March 2014 (hereinafter referred to as the "acquisition date"), the Company acquired a 60 per cent stake in Fosber Group at a consideration of RMB 355.7081 million, and the fair value of the identifiable net assets of the company on the merger date was equivalent to RMB 181.9708 million, and the difference in the merger cost greater than the share of identifiable net assets acquired in the merger was equivalent to RMB 173.7373 million, which was recognized as goodwill in the consolidated balance sheet. |
| Identification of asset group | The acquisition of Japanese Fosber Group's "corrugated board production line business" as the only asset group. At the end of this year, the asset group in which goodwill is located is the same as the asset group determined when goodwill was formed on the date of acquisition, and its composition has not changed. |
| Recoverable amount of asset group | It is determined according to the present value of the expected future cash flow of the asset group. Based on the five-year financial budget of the above asset group approved by management, the future cash flow is estimated, and the annual growth rate of operating income in the next five years varies from 4% to 5%. The sustainable cash flow after five years is determined according to the level of the last year of the detailed forecast period and combined with factors such as the development trend of the industry. The discount rate for calculating the present value is 12%, which is the pre-tax discount rate that reflects the specific risk of the relevant asset group. |
| Goodwill impairment test results | Taking December 31, 2019 as the benchmark date of goodwill impairment test, on the premise that the above assumptions are established, the recoverable amount of the Fosber Group asset group related to goodwill held by the Company is equivalent to RMB 1.0027372 billion, the book value of the Fosber Group asset group held by the Company is equivalent to RMB 298.3588 million yuan, and the book value of all goodwill is equivalent to RMB 267.4282 million. Since the recoverable amount of the asset group related to goodwill is greater than |
（2）Parsun Power Goodwill Test process
the sum of the book value of the asset group of Fosber and the book value of all goodwill, there is no need tomake provision for impairment of goodwill in the current period.Item
| Item | Parsun Power Goodwill Test process |
| The formation of goodwill | In July 2015 (hereinafter referred to as the "acquisition date"), the Company acquired an 80 per cent stake in Parsun Power at a consideration of RMB 376.1044 million, and the fair value of the identifiable net assets of the company obtained on the merger date was RMB 168.0725 million yuan. The difference between the merger cost and the share of identifiable net assets obtained in the merger is RMB 208.0319 million yuan, which is recognized as goodwill in the consolidated balance sheet. |
| Identification of asset group | The acquisition of the "power engine business" owned by Parsun Power is the only asset group. At the end of this year, the asset group in which goodwill is located is the same as the asset group determined when goodwill was formed on the date of acquisition, and its composition has not changed. |
| Recoverable amount of asset group | It is determined according to the present value of the expected future cash flow of the asset group. Based on the five-year financial budget of the above asset group approved by management, the future cash flow is estimated, and the annual growth rate of operating income in the next five years ranges from-3.77% to 14.17%. The sustainable cash flow after five years is determined according to the level of the last year of the detailed forecast period and combined with factors such as the development trend of the industry. The discount rate for calculating the present value is 14.81%, which is the pre-tax discount rate that reflects the specific risks of the relevant asset groups. |
| Goodwill impairment test results | Taking December 31, 2019 as the benchmark date of goodwill impairment test, under the premise of the above assumptions, the recoverable amount of Parsun Power asset group related to goodwill held by the Company is RMB 286.0105 million yuan. The book value of Parsun Power Asset Group held by the Company is RMB 102.817 million yuan, and the book value of all goodwill is RMB 182.7211 million yuan. Provision for impairment of goodwill is required of RMB 472400. The provision for impairment of goodwill has been set aside for RMB 61.8551 million in the previous period, so there is no need to replenish the provision for |
（3）Italian EDF goodwill testing process
impairment of goodwill in the current period.Item
| Item | Italian EDF goodwill testing process |
| The formation of goodwill | In July 2016 (hereinafter referred to as the "acquisition date"), the Company acquired the equity interest in Italian EDF100% of Italy at a consideration of RMB 69.6938 million, the fair value of the identifiable net assets of the company obtained on the merger date was equivalent to RMB 4.9471 million, and the difference in the merger cost greater than the share of identifiable net assets acquired in the merger was equivalent to RMB 64.7466 million, which was recognized as goodwill in the consolidated balance sheet. |
| Identification of asset group | The "corrugated printing press business" owned by Italian EDF on the date of acquisition is the only asset group. At the end of this year, the asset group in which goodwill is located is the same as the asset group determined when goodwill was formed on the date of acquisition, and its composition has not changed. |
| Recoverable amount of asset group | It is determined according to the present value of the expected future cash flow of the asset group. Based on the five-year financial budget of the above asset group approved by management, the future cash flow is estimated, and the annual growth rate of operating income in the next five years is-2.43% and 6.50%. The sustainable cash flow after five years is determined according to the level of the last year of the detailed forecast period and combined with factors such as the development trend of the industry. The discount rate for calculating the present value is 12.01%, which is the pre-tax discount rate that reflects the specific risks of the relevant asset groups. |
| Goodwill impairment test results | Taking December 31, 2019 as the benchmark date for goodwill impairment test, on the premise of the above assumptions, the recoverable amount of the Italian EDF asset group held by the Company related to goodwill is equivalent to RMB 36.9865 million, the book value of the Italian EDF asset group held by the Company is equivalent to RMB 37.232 million, and the book value of all goodwill is equivalent to RMB 68.6139 million. Since the recoverable amount of the asset group related to goodwill is less than the sum of the book value of the Italian EDF asset group and the book value of all goodwill, it is necessary to make provision for goodwill impairment of RMB 6885.93. As the goodwill impairment amount is larger than the original goodwill value, |
The influence of Goodwill impairment Test.Other instructions.
18. Long-term prepaid expenses.
Unit: yuan
the goodwill impairment amount for the current period is RMB 68.6139 million.
Item
| Item | Opening balance | The amount increased in the current period. | Amortization amount for the current period. | Other reduced amounts | Final balance |
| Expenditure on supporting projects of factory buildings. | 11,093,222.35 | 4,223,600.34 | 4,962,735.02 | 10,352,256.64 | 1,831.03 |
| Plant security system engineering. | 3,347,217.64 | 843,890.11 | 775,364.20 | 3,415,743.55 | 0.00 |
| Office network construction. | 28,675.69 | 137,871.05 | 36,477.10 | 91,685.06 | 38,384.58 |
| Expenditure on plant decoration. | 25,629,400.17 | 4,812,060.75 | 3,961,566.24 | 21,577,362.92 | 4,902,531.76 |
| CE certification service fee. | 32,311.33 | 4,245.29 | 28,066.04 | ||
| After-sale maintenance equipment. | 1,669,467.22 | 1,224,275.97 | 445,191.25 | 0.00 | |
| Amortization of leased assets. | 101,429.06 | 3,838,299.27 | 3,852,863.88 | 86,864.45 |
| Shenzhen Office. | 3,287,049.63 | 156,879.76 | 477,566.44 | 2,966,362.95 | |
| Mold amortization | 881,513.80 | 206,318.28 | 675,195.52 | ||
| Total | 45,188,773.09 | 14,894,115.08 | 15,501,412.42 | 35,882,239.42 | 8,699,236.33 |
Other instructions.The other decrease is mainly due to the transfer of 35,807,386.14 yuan of long-term prepaid expenses from the disposal of BeijingPride in the current period.
19. Deferred income tax assets / deferred income tax liabilities.
(1) Unoffset deferred income tax assets.
Unit: yuan
| Item | Final balance | Opening balance | ||
| Deductible temporary difference. | Deferred income tax assets | Deductible temporary difference. | Deferred income tax assets | |
| Provision for impairment of assets. | 40,047,445.90 | 7,625,373.36 | 136,277,343.04 | 20,707,327.56 |
| Unrealized profit from insider trading. | 35,104,949.11 | 7,347,281.21 | 30,830,831.09 | 8,333,183.73 |
| Deductible loss | 32,046,890.02 | 8,501,046.65 | 22,923,051.48 | 3,438,457.72 |
| Credit impairment reserve. | 8,003,088.75 | 501,069.70 | ||
| Deferred return. | 26,277,954.05 | 6,306,709.91 | 41,587,584.96 | 7,231,209.37 |
| Estimated liability-after-sales maintenance service fee. | 65,787,362.65 | 16,007,718.04 | 443,243,172.46 | 71,674,879.92 |
| Withholding expenses. | 7,338,871.73 | 1,834,719.89 | 30,715,178.02 | 5,153,745.41 |
| Inventory price adjustment. | 5,015,452.70 | 1,304,017.23 | ||
| Other | 3,081,562.71 | 901,102.85 | 5,521,305.35 | 1,320,210.45 |
| Total | 217,688,124.92 | 49,025,021.61 | 716,113,919.10 | 119,163,031.39 |
(2) Unoffset deferred income tax liability.
Unit: yuan
| Item | Final balance | Opening balance | ||
| Deductible temporary difference. | Deferred income tax assets | Deductible temporary difference. | Deferred income tax assets | |
| Value-added evaluation of assets of non-identical control enterprises' merger. | 55,686,591.83 | 10,912,760.98 | 160,031,163.71 | 26,916,251.53 |
| Depreciation difference of fixed assets. | 10,397,629.99 | 2,636,973.15 | 6,044,939.98 | 1,571,680.79 |
| Government subsidy difference. | 1,006,278.22 | 241,506.77 | 593,895.04 | 156,451.62 |
| Prepaid account. | 1,669,971.57 | 418,570.04 | 871,105.23 | 226,488.77 |
| Financial assets measured at fair value and whose changes are included in the profits and losses of the current | 2,378,966.50 | 580,080.66 | 449,024.86 | 67,353.73 |
| period. | ||||
| Other | 7,202,199.04 | 2,125,801.31 | 317,070.16 | 323,520.09 |
| Total | 78,341,637.15 | 16,915,692.91 | 168,307,198.98 | 29,261,746.53 |
(3) deferred income tax assets or liabilities shown in net offset.
Unit: yuan
| Item | Deferred income tax assets or liabilities ending balance after set-off. | Deferred income tax assets or liabilities ending balance after set-off. | Deferred income tax assets and liabilities offset at the beginning of the period. | Deferred income tax asset or liability balance at the beginning of the period after set-off |
| Deferred income tax assets | 49,025,021.61 | 119,163,031.39 | ||
| Deferred income tax liability | 16,915,692.91 | 29,261,746.53 |
(4) details of unrecognized deferred income tax assets.
Unit: yuan
| Item | Ending balance | Opening balance |
| Deductible temporary difference | 14,250,399.21 | 12,786,413.53 |
| Deductible loss | 16,609,352.68 | |
| Total | 14,250,399.21 | 29,395,766.21 |
(5) deductible losses on unrecognised deferred income tax assets will expire in the following years.
Unit: yuan
| Year | Ending balance | Opening balance | Remarks |
| 2020 | 3,510,209.30 | ||
| 2021 | 13,027,803.86 | ||
| 2022 | 71,339.52 | ||
| Total | 16,609,352.68 | -- |
Other instructions:
20. Other non-current assets.
Whether the new income criteria have been implemented.
□ YES √ NO
Unit: yuan
| Item | Ending balance | Opening balance |
| Prepaid purchase of long-term assets. | 38,700.00 | 3,812,139.46 |
| Deferred income-unrealized after-sale leaseback profit or loss. | 278,794.57 | |
| Financing fees related to prepaid long-term loans | 2,480,118.56 | 4,624,675.44 |
| Total | 2,518,818.56 | 8,715,609.47 |
Other instructions:
21. Short-term borrowing.
(1) Classification of short-term borrowings.
Unit: yuan
| Item | Ending balance | Opening balance |
| Pledge loan. | 100,000,000.00 | |
| Credit loan | 117,888,353.14 | 150,525,029.95 |
| Total | 117,888,353.14 | 250,525,029.95 |
Description of the classification of short-term borrowings:
22. Notes payable.
Unit: yuan
| Category | Ending balance | Opening balance |
| Bank acceptance bill | 43,973,859.51 | 990,875,308.24 |
| Total | 43,973,859.51 | 990,875,308.24 |
The total amount of notes payable due and unpaid at the end of the current period is RMB.
23. Accounts payable.
(1) Presentation of accounts payable.
Unit: yuan
| Item | Ending balance | Opening balance |
| Long-term asset payments. | 69,749.79 | 723,901.72 |
| Freight. | 6,325,091.66 | |
| Purchase inventory. | 470,629,176.02 | 1,574,282,157.00 |
| Processing fee | 712,857.59 | 862,031.53 |
| Other | 1,450,961.05 | 6,145,167.52 |
| Total | 472,862,744.45 | 1,588,338,349.43 |
24. Payment received in advance.
Whether the new income criteria have been implemented.
□ YES √ NO
(1) Presentation of advance receipts.
Unit: yuan
| Item | Ending balance | Opening balance |
| Within 1 year (including 1 year). | 254,027,005.07 | 385,932,215.89 |
| 1 to 2 years (inclusive). | 29,263,151.54 | 13,556,984.10 |
| 2 to 3 years (inclusive). | 830,688.85 | 2,057,247.07 |
| More than 3 years | 2,390,879.16 | 2,083,707.96 |
| Total | 286,511,724.62 | 403,630,155.02 |
(2) The status of settled and unfinished projects formed by the final construction contract.
Unit: yuan
| Item | Amount |
Other instructions:
25. Salary payable to staff and workers.
(1) List of salaries payable to staff and workers.
Unit: yuan
| Item | Opening balance | Increase in this period | Decrease in this period | Ending balance |
| 1. short-term salary. | 100,483,960.87 | 561,063,004.44 | 562,791,919.79 | 98,755,045.52 |
| 2.after-service benefits-set up a | 6,741,712.03 | 74,111,238.98 | 72,930,666.58 | 7,922,284.43 |
(2) Presentation of short-term remuneration.
Unit: yuan
| Item | Opening balance | Increase in this period | Decrease in this period | Ending balance |
| 1. Wages, bonuses, allowances and subsidies. | 97,028,659.07 | 492,924,651.36 | 495,850,252.04 | 94,103,058.39 |
| 2. Welfare expenses for staff and workers. | 1,557,769.29 | 31,215,568.76 | 28,912,664.61 | 3,860,673.44 |
| 3. Social insurance premium. | 517,830.81 | 26,722,832.50 | 27,150,694.24 | 89,969.07 |
| Among them: medical insurance premium. | 497,621.04 | 23,364,746.29 | 23,772,398.26 | 89,969.07 |
| Industrial injury insurance premium. | 19,908.68 | 2,560,241.82 | 2,580,150.50 | |
| Maternity insurance premium. | 301.09 | 797,844.39 | 798,145.48 | 0.00 |
| 4. Housing provident fund. | 171.00 | 7,867,877.64 | 7,868,048.64 | |
| 5. Funds for trade unions and education for staff and workers | 1,379,530.70 | 2,332,074.18 | 3,010,260.26 | 701,344.62 |
| Total | 100,483,960.87 | 561,063,004.44 | 562,791,919.79 | 98,755,045.52 |
| withdrawal plan | ||||
| Total | 107,225,672.90 | 635,174,243.42 | 635,722,586.37 | 106,677,329.95 |
(3) Set up the withdrawal plan and list it.
Unit: yuan
| Item | Opening balance | Increase in this period | Decrease in this period | Ending balance |
| 1. Basic old-age insurance. | 6,707,536.17 | 73,338,638.98 | 72,123,890.72 | 7,922,284.43 |
| 2. Unemployment insurance premium | 34,175.86 | 772,600.00 | 806,775.86 | |
| Total | 6,741,712.03 | 74,111,238.98 | 72,930,666.58 | 7,922,284.43 |
Other instructions:
26. Taxes payable.
Unit: yuan
| Item | Ending balance | Opening balance |
| Value added tax. | 7,909,778.04 | 239,105,457.76 |
| corporate income tax. | 27,833,282.53 | 24,550,253.57 |
| individual income tax. | 7,786,676.05 | 6,182,800.02 |
| Urban maintenance and construction tax. | 667,743.61 | 13,737,738.17 |
| Additional education fees. | 476,959.72 | 11,532,397.41 |
| Stamp duty | 810,738.35 | 822,020.86 |
| Property tax | 211,158.54 | 202,425.45 |
| Land use tax | 34,530.60 | 28,775.49 |
| Other | 3,197,362.07 | 2,091,166.47 |
| Total | 48,928,229.51 | 298,253,035.20 |
Other instructions:
27. Other payables.
Unit: yuan
| Item | Ending balance | Opening balance |
| Interest payable. | 1,410,745.58 | 3,332,499.94 |
| Other payables | 89,539,697.58 | 147,130,825.76 |
| Total | 90,950,443.16 | 150,463,325.70 |
(1) Interest payable.
Unit: yuan
| Item | Ending balance | Opening balance |
| Interest payable on short-term loans. | 1,792,562.50 | |
| Interest payable on long-term loans | 1,410,745.58 | 1,539,937.44 |
| Total | 1,410,745.58 | 3,332,499.94 |
Important overdue interest payments:
Unit: yuan
| Loan unit. | Overdue amount. | Overdue reason |
Other instructions:
(2) Dividends payable.
Unit: yuan
| Item | Ending balance | Opening balance |
Other statements, including important dividends payable unpaid for more than one year, shall disclose the reasons for non-payment:
(3) Other payables.
1) List other payables by nature of the amount.
Unit: yuan
| Item | Ending balance | Opening balance |
| Security deposit. | 205,000.00 | 5,387,659.47 |
| Current payment. | 10,392,785.36 | 6,265,359.60 |
| Withholding expenses. | 46,603,711.83 | 32,622,924.70 |
| Outstanding investment. | 1,000,000.00 | |
| Far East international rent. | 8,551.82 | 9,507.15 |
| Equity acquisition funds. | 25,869,305.00 | 61,814,563.00 |
| Rent. | 5,444,098.72 | |
| Equipment engineering fund. | 637,290.63 | 24,496,255.57 |
| Other | 5,642,575.78 | 10,090,457.55 |
| Petty cash | 180,477.16 | |
| Total | 89,539,697.58 | 147,130,825.76 |
2) Other important payables with an age of more than one year.
Unit: yuan
| Item | Ending balance | Reasons for non-repayment or carryover |
| Former shareholder of Italian EDF | 25,869,305.00 | Missed the agreed time of payment |
| Total | 25,869,305.00 | -- |
Other instructions.
28. Non-current liabilities due within one year.
Unit: yuan
| Item | Ending balance | Opening balance |
| A long-term loan due within one year | 353,399,238.29 | 95,200,648.23 |
| Total | 353,399,238.29 | 95,200,648.23 |
Other instructions:
29. Other current liabilities.
Whether the new income criteria have been implemented.
□ YES √ NO
Unit: yuan
| Item | Ending balance | Opening balance |
| Sales tax to be resold | 59,244.51 | |
| Total | 59,244.51 |
Changes in the increase or decrease in short-term bonds payable:
Unit: yuan
| Bond name | Face value. | Date of issue. | Bond maturity. | Issued amount. | Opening balance. | Current issue. | Interest at face value. | Amortization of premium and discount. | Current repayment. | Final balance |
Other instructions:
30. Long-term loan.
(1) Classification of long-term loans.
Unit: yuan
| Item | Ending balance | Opening balance |
| Mortgage loan | 9,645,245.56 | 357,781.95 |
| Guaranteed loan | 191,323,440.00 | 527,652,452.00 |
| Credit loan | 23,177,981.92 | 8,348,687.07 |
| Total | 224,146,667.48 | 536,358,921.02 |
Description of the classification of long-term borrowings:
| Loan unit. | Currency. | Loan start date. | Loan termination date. | Interest rate (%). | Original currency balance. | Equivalent to RMB balance | loan conditions. | Pledge. | Pledge amount |
| BANCO BPM | EUR | 2019/5/10 | 2022/6/30 | 1.75 | 253,273.88 | 1,979,462.01 | Credit loan | ||
| BANCA IMOLA | EUR | 2010/9/6 | 2031/2/6 | 2.40 | 370,643.42 | 2,896,763.65 | Credit loan |
| PR?STAMO BANKINTER | EUR | 2014/8/5 | 2021/8/5 | 0.82 | 148,989.63 | 1,164,428.45 | Mortgage loan | machinery equipment | 2,938,003.54 |
| PRESTAMO CAJA RURAL | EUR | 2019/4/29 | 2022/4/29 | 0.79 | 153,515.95 | 1,199,803.91 | Mortgage | machiner | 1,901,120.38 |
| loan | y equipment |
| PRESTAMO SANTANDER | EUR | 2015/4/29 | 2022/4/29 | 0.79 | 136,549.66 | 1,067,203.87 | Mortgage loan | machinery equipment | 189,525.88 |
| PRESTAMO CAJA RURAL | EUR | 2016/11/24 | 2023/11/24 | 0.80 | 435,430.42 | 3,403,106.45 | Mortgage loan | machinery equipment | 2,397,154.14 |
| CDTI 2017 | EUR | 2017/9/14 | 2028/10/17 | 0.00 | 130,300.16 | 1,018,360.90 | Credit loan | - |
| PR?STAMO CAIXABANK | EUR | 2012/1/20 | 2025/9/30 | 0.70 | 359,631.87 | 2,810,702.88 | Mortgage loan | machinery equipment | 4,555,947.87 |
| MEDIOCREDITO | EUR | 2019/7/17 | 2026/12/31 | 0.80 | 2,211,425.42 | 17,283,395.36 | Credit loan | ||
| Bank of China (Hong Kong) Limited | EUR | 2018/2/23 | 2021/2/23 | 1.10 | 24,480,000.00 | 191,323,440.00 | Guaranteed loan | ||
| Total | 224,146,667.48 | 11,981,751.81 |
Other instructions, including the interest rate range:
31. Long-term salary payable to staff and workers.
(1) Long-term salary scale payable to staff and workers.
Unit: yuan
| Item | Ending balance | Opening balance |
| I. after-service benefits-setting net liabilities for benefit plans | 12,252,657.36 | 10,163,946.95 |
| Total | 12,252,657.36 | 10,163,946.95 |
(2) Set up changes in the benefit plan.
Set the present value of benefit plan obligations:
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| I. opening balance. | 10,163,946.95 | 10,367,298.56 |
| II. The set benefit cost that is included in the profits and losses of the current period. | 1,923,772.98 | -263,145.32 |
| 4. Net interest. | 1,923,772.98 | -263,145.32 |
| IV. Other changes. | 164,937.43 | 59,793.71 |
| 3. Exchange rate change. | 164,937.43 | 59,793.71 |
| V. final balance | 12,252,657.36 | 10,163,946.95 |
32. Estimated liabilities.
Whether the new income criteria have been implemented.
□ YES √ NO
Unit: yuan
| Item | Ending balance | Opening balance | Cause of formation |
| Product quality assurance. | 73,639,095.36 | 443,239,907.67 | |
| Other. | 5,011,371.12 | 2,507,581.17 | |
| Product salvage recovery fund | 7,109,315.61 | ||
| Total | 78,650,466.48 | 452,856,804.45 | -- |
Other notes, including important assumptions and estimated statements relating to important estimated liabilities:
33. Deferred returns.
Unit: yuan
| Item | Opening balance | Increase this time | Decrease this time | Ending balance | Formation cause |
| Goverment subsidy | 41,528,340.45 | 8,652,850.00 | 31,905,381.55 | 18,275,808.90 | |
| Total | 41,528,340.45 | 8,652,850.00 | 31,905,381.55 | 18,275,808.90 | -- |
Projects involving government subsidies:
Unit: yuan
| Debt item. | Opening balance. | The amount of new subsidy in this period. | The amount of non-operating income in the current period. | The amount of other income will be included in the current period. | The amount of deduction of costs and expenses in the current period. | Other changes. | Final balance. | Related to assets / earnings |
| Compensation for demolition and relocation of the old factory building on Jinfeng Road. | 4,149,837.87 | 297,660.63 | 3,852,177.24 | Related to assets | ||||
| Beijing Advanced Industrial Development Fund Industrial Innovation Cluster funding Project. | 11,000,000.00 | 366,869.29 | 10,633,130.71 | 0.00 | Related to assets | |||
| Construction | 600,000.00 | 600,000.00 | 0.00 | Related to |
| of two nodes for Internet logo analysis in automobile industry. | assets | |||||||
| Research on key Technologies and vehicle Application of Power platform for N2/N3 High performance Pure Electric Commercial vehicle. | 649,000.00 | 225,250.00 | 874,250.00 | 0.00 | Related to assets | |||
| The fusion of the two modernizations. | 300,000.00 | 300,000.00 | Related to assets | |||||
| Equipment subsidy of Liyang Project Investment by the | 9,289,210.92 | 8,427,600.00 | 1,507,691.87 | 16,209,119.05 | 0.00 | Related to assets |
| Management Committee of Jiangsu Zhongguancun Science and Technology Industrial Park. | ||||||||
| Amortized deferred income (4 Mitsubishi gantry machining centers, 3 fixed beam gantry machining centers) | 15,540,291.66 | 1,116,660.00 | 14,423,631.66 | Related to assets | ||||
| Total | 41,528,340.45 | 8,652,850.00 | 3,588,881.79 | 28,316,499.76 | 18,275,808.90 | Related to assets |
Other instructions:
Other changes are mainly due to the transfer of deferred income of 28316499.76 yuan from the disposal of Beijing Pryder in thecurrent period.
34. Share capital.
Unit: yuan
| Opening balance | This change increases or decreases (+, -) | Final balance | |||||
| Issue new shares | Send shares. | Conversion of provident fund into stock. | Other | Subtotal | |||
| Total number of shares | 1,838,647,096.00 | 1,838,647,096.00 | |||||
Other instructions:
35. Capital reserve.
Unit: yuan
| Item | Opening balance | Increase this period | Decrease this period | Ending balance |
| Capital premium (equity premium) | 5,297,788,424.33 | 11,375,443.61 | 1,447,073,583.57 | 3,862,090,284.37 |
| Other capital reserve | 287,554.47 | 287,554.47 | ||
| Total | 5,298,075,978.80 | 11,375,443.61 | 1,447,073,583.57 | 3,862,377,838.84 |
Other explanations, including the changes in the current period and the reasons for the changes:
The increase this year is as follows:
(1) There is an unfair situation in the related party transaction between Beijing Pride and the non-controllingshareholder, which shall be dealt with in accordance with the principle of equity transaction, and the differencebetween the fair value of the consideration and the actual transaction price shall be increased by increasing thecapital reserve-equity premium, the amount is 11,375,443.61yuan.The reduction this year is as follows:
(2) The handling fee paid by the company to buy back shares in 2019, reducing the capital reserve-equitypremium of 19298.30 yuan.
(3) Dongfang Precision takes 1 yuan to buy back a fixed number of its own equity instruments as the
consideration for performance compensation, while recognizing transactional financial assets and investmentincome, and classifies the transactional financial assets as equity instruments, write off the capital reserve-equitypremium of 1,447,054,285.27 yuan.
36. Inventory stock.
Unit: yuan
| Item | Opening balance | Increase this period | Decrease this period | Ending balance |
| Share repurchase | 63,597,455.75 | 96,491,469.85 | 160,088,925.60 | |
| Total | 63,597,455.75 | 96,491,469.85 | 160,088,925.60 |
Other explanations, including the changes in the current period and the reasons for the changes:
The increase in treasury shares is due to the repurchase of shares by the company in the current period.
37. Other comprehensive income.
Unit: yuan
| Item | Opening balance | Current occurrence amount | Ending balance | |||||
| The amount incurred before the income tax of the current period. | Minus: the previous period is included in other comprehensive income and transferred to profit or loss in the current period. | Minus: in the prior period, it is included in other comprehensive income and transferred to retained earnings in the current period. | Minus: income tax expenses. | Belong to the parent company after tax. | Belong to minority shareholders after tax | |||
| I. other comprehensive income that cannot be reclassified into profit or loss. | 661,069.30 | -468,239.41 | -468,239.41 | 192,829.89 | ||||
| Among them: re-measure the amount of change in the benefit plan. | 661,069.30 | -468,239.41 | -468,239.41 | 192,829.89 | ||||
| 2Other comprehensive income that is reclassified into profit or loss. | 19,639,840.04 | 5,133,228.40 | 5,138,415.39 | -5,186.99 | 24,778,255.43 | |||
| Cash flow hedging reserve. | 460,113.12 | 460,113.12 | ||||||
| Translation difference of foreign currency financial statements. | 19,683,812.11 | 5,133,228.40 | 5,138,415.39 | -5,186.99 | 24,822,227.50 | |||
| Other. | -504,085.19 | -504,085.19 | ||||||
| Total other comprehensive income | 20,300,909.34 | 4,664,988.99 | 4,670,175.98 | -5,186.99 | 24,971,085.32 |
Other instructions, including the conversion of the effective portion of the hedging profit or loss of cash flow to the initial recognitionamount of the hedged item:
38. Surplus reserve.
Unit: yuan
| Item | Opening balance | Increase this period | Decrease this period | Ending balance |
| Statutory surplus reserve | 51,830,974.45 | 51,830,974.45 | ||
| Total | 51,830,974.45 | 51,830,974.45 |
A description of the surplus reserve, including the changes in the current period and the reasons for the changes:
39. Undistributed profits.
Unit: yuan
| Item | Current period. | Last period |
| Undistributed profit at the end of the previous period before adjustment. | -3,118,692,266.64 | 809,008,015.53 |
| Adjust the initial undistributed profit in the later period. | -3,118,692,266.64 | 809,008,015.53 |
| Plus: net profit attributable to the owner of the parent company for the current period. | 1,838,018,805.50 | -3,875,995,219.91 |
| Dividends payable on common shares. | 51,705,062.26 | |
| Undistributed profit at the end of the period | -1,280,673,461.14 | -3,118,692,266.64 |
Details of undistributed profits at the beginning of the adjustment period:
1) due to the retroactive adjustment of the Accounting Standards for Enterprises and its related new regulations, the undistributedprofit at the beginning of the period was affected by 0.00 yuan.
2) due to the change of accounting policy, the undistributed profit at the beginning of the period is 0.00 yuan.
3) due to the correction of major accounting errors, the undistributed profit at the beginning of the period was affected by 0.00 yuan.
4), due to the change of the merger scope caused by the same control, the undistributed profit at the beginning of the period is
affected by 0.00 yuan.
5) other adjustments affect the undistributed profit at the beginning of the period by 0.00 yuan.
40. Operating income and operating costs.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period | ||
| Income. | Cost | Income | Cost | |
| Main business. | 9,847,745,645.54 | 8,228,523,820.13 | 6,527,530,143.78 | 5,411,045,866.16 |
| Other business | 125,757,956.65 | 57,908,254.79 | 93,819,474.62 | 64,249,492.08 |
| Total | 9,973,503,602.19 | 8,286,432,074.92 | 6,621,349,618.40 | 5,475,295,358.24 |
Whether the new income criteria have been implemented.
□ Yes √ No
Other instructions.
41. Taxes and surcharges.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Urban maintenance and construction tax. | 5,305,701.26 | 17,814,995.05 |
| Additional education fees. | 4,575,005.13 | 14,939,845.56 |
| Property tax. | 4,382,315.92 | 4,079,504.20 |
| Land use tax. | 479,368.81 | 452,159.22 |
| Vehicle and vessel use tax. | 635,862.27 | 30,155.00 |
| Stamp duty. | 6,215,513.43 | 4,646,755.86 |
| Environmental protection tax | 77,509.78 | 1,356.66 |
| Other | 85,080.33 | 10,911.91 |
| Total | 21,756,356.93 | 41,975,683.46 |
Other instructions:
42. Sales expenses.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Staff and workers' salary. | 56,567,481.19 | 38,701,187.40 |
| Travel expenses | 14,192,497.81 | 12,415,895.09 |
| Transportation fee. | 63,389,259.45 | 53,487,591.26 |
| Commission and agency fee. | 48,998,758.52 | 49,278,855.80 |
| Advertising and exhibition fees. | 13,124,552.50 | 8,979,879.43 |
| Office expenses and other things. | 22,740,557.50 | 6,098,039.92 |
| Product quality deposit. | 190,832,558.76 | 346,638,762.80 |
| Depreciation amortization expense | 4,681,809.15 | 5,123,184.86 |
| Total | 414,527,474.88 | 520,723,396.56 |
Other instructions:
43. Administrative expenses.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Staff and workers' salary. | 174,333,946.78 | 147,475,855.27 |
| Depreciation amortization expense. | 41,902,217.00 | 50,359,203.18 |
| Tax and fee. | 3,072,845.58 | 2,883,836.10 |
| Travel expenses and business hospitality expenses. | 12,750,784.75 | 15,252,522.21 |
| Intermediary fee. | 65,984,973.26 | 9,889,906.36 |
| Office expenses and other things | 67,173,844.35 | 60,361,252.08 |
| Total | 365,218,611.72 | 286,222,575.20 |
Other instructions:
44. Research and development expenses.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Staff and workers' salary. | 67,481,755.14 | 86,243,768.36 |
| Material cost. | 31,357,724.77 | 86,044,805.44 |
| Utilities. | 2,194,303.18 | 2,655,043.95 |
| Depreciation amortization expense | 14,869,894.79 | 8,107,337.74 |
| Assembly inspection and commissioning fee. | 8,287,240.29 | 11,959,301.97 |
| Technology license fee. | 23,253,278.02 | 5,886,825.84 |
| Other costs | 9,210,719.23 | 17,579,433.12 |
| Total | 156,654,915.42 | 218,476,516.42 |
Other instructions:
45. Financial expenses.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Interest expense. | 20,712,697.63 | 27,848,603.36 |
| Minus: interest income. | 55,020,801.87 | 27,882,940.18 |
| Exchange profit and loss. | 1,288,171.81 | -48,637.70 |
| Other. | 4,917,445.41 | 4,100,113.49 |
| Discounted interest | 11,232,640.90 | 19,128,481.32 |
| Total | -16,869,846.12 | 23,145,620.29 |
Other instructions:
46. Other income.
Unit: yuan
| Sources of other income. | Current occurrence amount. | The occurrence amount of the previous period |
| 4 Mitsubishi gantry machining centers and 3 fixed beam gantry machining centers. | 1,116,660.00 | 1,116,660.00 |
| Subsidies for key scientific and technological projects of Foshan Nanhai Economic and Science and Technology Promotion Bureau in 2018 (benchmarking high-tech) enterprises. | 1,000,000.00 | |
| Special funds for Enterprise Research and Development in Foshan Nanhai District | 246,300.00 |
| Economic and Science and Technology Promotion Bureau in 2016 and 2017. | ||
| Foshan Nanhai Shishan town treasury payment center Beidou enterprise support reward (town-level part). | 4,800,000.00 | |
| Special funds for the demonstration Enterprise Project of "Intelligent Manufacturing and essential Safety" of Foshan production Safety Supervision and Administration Bureau. | 480,000.00 | |
| Special fund for promoting economic development of Nanhai District Economic Promotion Bureau of Foshan City in 2019 (promoting the insurance of export credit insurance). | 9,491.02 | |
| Financial support funds of Nanhai District Economic Promotion Bureau of Foshan City (Municipal Engineering Center). | 200,000.00 | |
| Foshan Nanhai District Economic and Science and Technology Promotion Bureau 2017 Special support Award for the Development of High-tech Enterprises. | 153,000.00 | |
| Foshan Nanhai District Economic and Science and Technology Promotion Bureau 2018 subsidy funds for Foshan top 50 benchmarking high-tech enterprises. | 1,000,000.00 |
| Special funds for Foreign Trade Cooperation of Foshan Nanhai District economy and Science and Technology Promotion Bureau in 2018. | 200,000.00 | |
| Foshan Nanhai District economy and Science and Technology Promotion Bureau 2018 Science and Technology Innovation platform support Award funds. | 500,000.00 | |
| Shishan Town Economic Promotion Bureau "Big Dipper Enterprise" support reward (district level). | 3,200,000.00 | |
| Refund of income tax service fee. | 120,839.33 | |
| Special funds for Science and Technology Information of the Bureau for the Promotion of economy and Science and Technology of the State Treasury of Nanhai District. | 5,600.00 | |
| Government subsidy for special funds for foreign economic cooperation of the Bureau for the Promotion of economy and Technology. | 1,800,000.00 | |
| Domestic and foreign economic and trade development and port construction funds to promote credit insurance project funds in 2017. | 5,600.00 | |
| Special funds for Provincial Science and Technology Development in the past 17 | 585,000.00 |
| years. | ||
| Stable post allowance. | 234,166.52 | 232,798.62 |
| Funding at the municipal level for the establishment of a project by the provincial engineering center in 2017. | 200,000.00 | |
| Foshan industrial product quality improvement support funds (quality development). | 50,000.00 | |
| Support funds for improving the quality of industrial products in Foshan in 2018. | 40,000.00 | |
| Subsidy funds for high-tech enterprises in Foshan in 2017. | 100,000.00 | |
| Insurance premium subsidy for production safety liability insurance. | 56,163.70 | |
| Support funds for technological transformation of enterprises by promoting the Bureau. | 200,000.00 | |
| Special funds for the development of foreign trade and economic cooperation. | 241,500.00 | |
| Special fund for promoting economic development in 2018 ("going out"). | 411,402.00 | |
| Patent funding for the Council for the Promotion of economy and Technology in 2017. | 15,000.00 | |
| The Bureau of Science and Technology | 100,000.00 |
| recognized the subsidy funds for high-tech enterprises in 2018. | ||
| 2018 Foshan City "four top" enterprises to cultivate incentives and support funds. | 100,000.00 | |
| Compensation for demolition and relocation of the old factory building on Jinfeng Road. | 297,660.63 | 297,660.63 |
| Domestic and foreign patent funding for high-tech zones in 2018. | 35,200.00 | |
| Special funds for Business Development in 2019 (Export Credit guarantee subsidy). | 216,700.00 | |
| Declaration of funds by high-tech enterprises in 2019. | 30,000.00 | |
| Provincial Special funds for intellectual property Rights in 2019. | 3,000.00 | |
| Slicing funds for Class B Air pollution Prevention and Control Project in 2018. | 390,000.00 | |
| Support funds for small and medium-sized development projects of the Ministry of Commerce. | 58,500.00 | |
| Reward for Advanced Enterprises in Hushuguan Development Zone in 2018. | 30,000.00 | |
| International Market Development funds for small and medium-sized Enterprises in the third quarter of 2017 (High-tech | 20,000.00 |
| Finance Bureau). | ||
| 2017 newly recognized national and provincial high-tech product awards. | 40,000.00 | |
| 2018 Business Development Special Fund (the first batch) Export Credit Insurance. | 171,000.00 | |
| 2017 Advanced Enterprise Award (Management Committee of Hushuguan Development Zone). | 80,000.00 | |
| Special funds for Business Development in Suzhou in 2017. | 123,623.50 | |
| International Market Development funds for SMEs in the fourth quarter of 2017 (Finance Bureau of High-tech Zone) International Market Development funds for small and medium-sized Enterprises (sales). | 54,000.00 | |
| 2018 regional trademark subsidy. | 1,600.00 | |
| The first batch of newly recognized provincial private science and technology enterprises reward funds in 2018. | 50,000.00 | |
| Equipment subsidy of Liyang Project Investment by the Management Committee of Jiangsu Zhongguancun Science and Technology Industrial Park. | 1,507,691.87 | 744,719.75 |
| 2019 the government subsidy for the first batch of science and technology grant | 100,000.00 |
| funds in Liyang. | ||
| 2018 Award for promoting Scientific and technological Innovation. | 180,500.00 | |
| Beijing Advanced Industrial Development Fund Industrial Innovation Cluster funding Project. | 366,869.29 | |
| The fusion of the two modernizations. | 300,000.00 | |
| Intellectual property subsidy. | 12,000.00 | |
| Patent subsidy. | 5,950.00 | |
| Adopt and cultivate government tax incentive funds. | 200,000.00 | |
| Research and development funds for key projects of the Finance Bureau. | 300,000.00 | |
| Patent subsidy reward | 40,080.00 | |
| Scientific and technological innovation reward. | 96,500.00 | |
| Foreign government subsidies | 5,704,532.73 | |
| Total | 22,814,061.39 | 7,163,908.20 |
47. Return on investment.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Long-term equity investment income calculated by equity method. | 2,541,133.81 | 1,954,952.54 |
| Investment income from the disposal of long-term equity investments. | -91,050,267.19 | 6,574,193.78 |
| Bank wealth management product income. | 26,362,638.82 | 23,633,070.58 |
| Performance compensation | 1,447,054,285.27 | |
| Total | 1,384,907,790.71 | 32,162,216.90 |
Other instructions:
48. Income from changes in fair value.
Unit: yuan
| The source of income from changes in fair value | Current occurrence amount. | The occurrence amount of the previous period |
| Transactional financial assets | -302,415.26 | 449,024.86 |
| Total | -302,415.26 | 449,024.86 |
Other instructions:
49. Loss of credit impairment.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Losses on bad debts of other receivables. | -5,710,766.56 | |
| Impairment loss on financing of receivables. | -6,000.00 | |
| Loss of bad debts on accounts receivable | -28,381,073.14 |
| Total | -34,097,839.70 |
Other instructions:
50. Loss of impairment of assets.
Whether the new income criteria have been implemented.
□ YES √ NO
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| 1 loss of bad debts. | -31,104,074.41 | |
| 2 Loss of inventory price. | -41,086,405.25 | -38,392,588.22 |
| 3 Loss of impairment of goodwill | -68,753,453.43 | -3,886,404,937.85 |
| Total | -109,839,858.68 | -3,955,901,600.48 |
51. Income from asset disposal.
Unit: yuan
| Sources of income from asset disposal. | Current occurrence amount. | The occurrence amount of the previous period |
| Disposal of other non-current assets | 538,255.27 | -677,688.93 |
| Total | 538,255.27 | -677,688.93 |
52.Non-operating income.
Unit: yuan
Government subsidies included in the profits and losses of the current period:
Unit: yuan
| Subsidy project. | Issuing subject. | Reasons for distribution. | Nature type. | Does the subsidy affect the profits and losses of the current year? | Is it a special subsidy? | Amount incurred in the current period. | Amount incurred in the previous period. | Related to assets / earnings |
| Foreign government subsidy income | Subsidy | NO | NO | 1,888,797.17 | Related to revenue | |||
| Outstanding contribution enterprise reward | Reward | NO | NO | 40,000.00 | Related to revenue |
| Item | Current occurrence amount. | The occurrence amount of the previous period | The amount included in the non-recurring profit and loss of the current period |
| Government subsidy. | 40,000.00 | 1,888,797.17 | 40,000.00 |
| Value-added tax rebate. | 116,902.51 | ||
| Fine income. | 431,229.18 | 7,372.97 | 431,229.18 |
| Other | 12,099,617.87 | 2,445,878.14 | 12,099,617.87 |
| Total | 12,570,847.05 | 4,458,950.79 | 12,570,847.05 |
| Total | 40,000.00 | 1,888,797.17 | Related to revenue |
53. Non-operating expenses.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period | The amount included in the non-recurring profit and loss of the current period |
| Foreign donation. | 105,090.50 | 129,089.56 | 105,090.50 |
| Loss on disposal of non-current assets. | 5,233,637.05 | 4,103,644.37 | 5,233,637.05 |
| Breach of contract expenditure. | 753,917.00 | 753,917.00 | |
| Sponsorship expenditure. | 196,898.00 | 41,375.92 | 196,898.00 |
| Late fee. | 28,561.06 | 3,887.69 | 28,561.06 |
| Fine expenditure. | 500.00 | 47,796.01 | 500.00 |
| Other | 2,438,357.92 | 1,457,101.94 | 2,438,357.92 |
| Total | 8,756,961.53 | 5,782,895.49 | 8,756,961.53 |
54. Income tax expenses.
(1) Statement of income tax expenses.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Current income tax expenses. | 215,161,306.67 | 69,731,256.93 |
| Deferred income tax expenses | -40,889,366.79 | -63,312,239.17 |
| Total | 174,271,939.88 | 6,419,017.76 |
(2) The adjustment process of accounting profit and income tax expenses.
Unit: yuan
| Item | Current occurrence amount. |
| Total profit. | 2,013,617,893.69 |
| Income tax expenses at statutory / applicable tax rates. | 302,042,684.05 |
| The influence of different tax rates on subsidiaries. | 189,260,535.61 |
| Adjust the impact of income tax in previous periods. | 2,184,114.60 |
| The impact of non-taxable income. | -340,335,162.68 |
| The impact of undeductible costs, expenses and losses. | 22,307,654.67 |
| The impact of deductible losses on the use of unrecognized deferred income tax assets in the previous period. | -1,583,417.04 |
| The effect of deductible temporary differences or deductible losses on deferred income tax assets not recognized in the current period. | 11,741,275.00 |
| Research and development plus deduction. | -11,345,744.33 |
| Income tax expense | 174,271,939.88 |
55. Other comprehensive income.
See note 37 for details.
56. Cash flow statement items.
(1) Other cash received related to business activities.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Government subsidy. | 27,918,029.60 | 26,287,364.99 |
| Interest income. | 51,713,851.09 | 29,435,518.64 |
| Current money and other. | 74,176,495.35 | 23,489,217.13 |
| Receive a letter of guarantee | 590,491.85 | |
| Total | 154,398,867.89 | 79,212,100.76 |
(2) Other cash related to business activities paid.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Pay cash sales expenses. | 145,334,515.96 | 114,997,752.84 |
| Pay cash management expenses. | 132,074,384.83 | 78,620,804.53 |
| Deposit paid by letter of guarantee. | 526,000.00 | |
| Current money and other. | 36,384,723.70 | 29,792,280.55 |
| Deposit Margin. | 8,317,055.21 | 2,046,755.88 |
| Pay cash for research and development | 20,547,103.04 | 44,328,442.48 |
| Total | 343,183,782.74 | 269,786,036.28 |
(3) Other cash received related to investment activities.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Performance compensation. | 200,000.00 | 1,500,000.00 |
| Bank financing | 3,329,648,750.00 | 3,707,671,000.00 |
| Total | 3,329,848,750.00 | 3,709,171,000.00 |
(4) Other cash paid in connection with investment activities.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Bank financing | 4,462,987,540.01 | 2,825,000,000.00 |
| Total | 4,462,987,540.01 | 2,825,000,000.00 |
(5) Other cash received related to fund-raising activities.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Letter of guarantee deposit. | 16,502,736.75 | 189,121,589.60 |
| Deposit for bank acceptance of bill of exchange | 144,398,508.76 | 358,058,310.84 |
| Total | 160,901,245.51 | 547,179,900.44 |
(6)Other cash paid related to fund-raising activities.
Unit: yuan
| Item | Current occurrence amount. | The occurrence amount of the previous period |
| Stock repurchase fund. | 96,510,768.15 | 63,613,437.67 |
| Deposit for bank acceptance of bill of exchange. | 7,662,721.53 | 483,984,131.46 |
| Financial lease fee | 9,162,786.33 | |
| Total | 104,173,489.68 | 556,760,355.46 |
57. Supplementary information on the statement of cash flows.
(1) Supplementary information on the statement of cash flows.
Unit: yuan
| Supplementary information | Current amount. | Previous period amount |
| 1. Adjust net profit to cash flow of operating activities: | -- | -- |
| Net profit. | 1,839,345,953.81 | -3,869,036,633.68 |
| Plus: provision for impairment of assets. | 143,937,698.38 | 3,955,901,600.48 |
| Depreciation of fixed assets, oil and gas assets and productive biological assets. | 68,039,843.73 | 52,895,689.51 |
| Amortization of intangible assets. | 26,098,369.17 | 21,930,826.62 |
| Amortization of long-term prepaid expenses. | 15,501,412.42 | 36,673,952.19 |
| Losses on the disposal of fixed assets, intangible assets and other long-term assets | -538,255.27 | 677,688.93 |
| (income is given with "-" sign). | ||
| Scrapping loss of fixed assets (income is listed with "-" sign). | 5,233,637.05 | 4,103,644.37 |
| Loss of fair value change (income is listed with "-" sign). | 302,415.26 | -449,024.86 |
| Financial expenses (income is given with "-" sign). | 31,945,338.53 | 46,977,084.68 |
| Investment loss (income is listed with "-" sign). | -1,384,907,790.71 | -32,162,212.57 |
| Deferred income tax assets decrease (increase with "-" sign). | -50,201,552.00 | -65,523,017.55 |
| Increase in deferred income tax liabilities (reduced with "-" sign). | 571,989.59 | -2,900,956.58 |
| Reduction of inventory (increase in "-" sign). | -546,145,845.44 | 46,467,834.96 |
| Decrease in operating receivables (increase with "-" sign). | -221,590,998.95 | -594,698,150.58 |
| Increase in operating payables (reduced with "-" sign). | 356,387,828.69 | 1,120,782,989.35 |
| Other. | -2,682,257.25 | 83,485.85 |
| Net cash flow from operating activities. | 281,297,787.01 | 721,724,801.12 |
| 2. Major investments and fund-raising activities that do not involve cash receipts and payments: | -- | -- |
| 3. Net changes in cash and cash equivalents: | -- | -- |
| The closing balance of cash. | 2,226,724,737.39 | 2,057,997,442.35 |
| Less: the opening balance of cash. | 2,057,997,442.35 | 899,031,341.44 |
| Net increase in cash and cash equivalents | 168,727,295.04 | 1,158,966,100.91 |
(2) The net cash paid by the acquired subsidiary in the current period.
Unit: yuan
| Amount | |
| Cash or cash equivalents paid in the current period when a business merger occurs in the current period. | 123,995,066.16 |
| Of which: | -- |
| Of which: ：Tiruna Grounp | 123,995,066.16 |
| Minus: cash and cash equivalents held by the company on the date of purchase. | 26,748,538.29 |
| Of which: | -- |
| Of which: Tiruna Grounp | 26,748,538.29 |
| Of which: | -- |
| Obtain the net cash paid by the subsidiary | 97,246,527.87 |
Other instructions:
The difference between the net cash paid by subsidiaries in the current period and the consolidated cash flowstatement item "net cash paid by subsidiaries and other business units" is mainly due to the difference in exchangerate conversion.
(3) The net cash received for the disposal of subsidiaries in the current period.
Unit: yuan
| Amount | |
| Current disposal of cash or cash equivalents received by subsidiaries in the current period. | 1,500,000,000.00 |
| Of which: | -- |
| Beijing Pride | 1,500,000,000.00 |
| Minus: cash and cash equivalents held by the company on the date of loss of control. | 58,525,196.49 |
| Of which: | -- |
| Beijing Pride | 58,525,196.49 |
| Of which: | -- |
| Disposal of net cash received by subsidiaries | 1,441,474,803.51 |
(4) Composition of cash and cash equivalents.
Unit: yuan
| Item | Ending balance | Opening balance |
| 1. Cash. | 2,226,724,737.39 | 2,057,997,442.35 |
| Among them: cash in stock. | 249,951.68 | 136,697.03 |
| A bank deposit that can be used for payment at any time. | 2,224,849,135.20 | 2,057,860,745.32 |
| Other monetary funds that can be used for payment at any time. | 1,625,650.51 | |
| 3. Balance of cash and cash equivalents at the end of the period | 2,226,724,737.39 | 2,057,997,442.35 |
58. Assets with restricted ownership or use rights.
Unit: yuan
| Item | Final book value | Limited reasons |
| Monetary fund | 129,978,697.21 | Margin |
| Fixed assets | 11,981,751.80 | Loan mortgage |
| Total | 141,960,449.01 | -- |
59. Foreign currency monetary items.
(1) Foreign currency monetary items.
Unit: yuan
| Item | Foreign currency balance at the end of the period | Converted exchange rate | Conversion of RMB balance at the end of the period |
| Monetary fund. | -- | -- | 366,851,119.14 |
| Among them: US Dollar. | 25,474,974.03 | 6.9762 | 177,718,513.83 |
| Euro. | 24,174,278.31 | 7.8155 | 188,934,072.13 |
| Hong Kong Dollar. | 221,631.63 | 0.8958 | 198,533.18 |
| Notes receivable. | 56,743,777.57 | ||
| Among them: euro. | 7,260,415.53 | 7.8155 | 56,743,777.57 |
| Accounts receivable. | -- | -- | 491,858,968.41 |
| Among them: US Dollar. | 5,428,709.29 | 6.9762 | 37,871,761.75 |
| Euro. | 58,088,056.64 | 7.8155 | 453,987,206.66 |
| Hong Kong Dollar. | |||
| Other receivables. | 58,019,821.21 | ||
| Among them: euro. | 7,423,686.42 | 7.8155 | 58,019,821.21 |
| Accounts payable. | 336,380,088.36 | ||
| Among them: US Dollar. | 58,760.76 | 6.9762 | 409,926.81 |
| Euro. | 42,985,872.45 | 7.8155 | 335,956,086.13 |
| British Pound | 1,538.28 | 9.1501 | 14,075.42 |
| Short-term loan. | 27,888,353.14 | ||
| Among them: euro. | 3,568,338.96 | 7.8155 | 27,888,353.14 |
| Non-current liabilities due within one year. | 19,208,458.30 | ||
| Among them: euro. | 2,457,738.89 | 7.8155 | 19,208,458.30 |
| Long-term loan. | -- | -- | 32,823,227.49 |
| Among them: US Dollar. | |||
| Euro. | 4,199,760.41 | 7.8155 | 32,823,227.49 |
| Hong Kong Dollar. | |||
| Other payables. | 45,097,183.11 | ||
| Among them: US Dollar. | 34,591.36 | 6.9762 | 241,316.24 |
| Euro. | 5,739,347.05 | 7.8155 | 44,855,866.87 |
| Interest payable. | 2,626,376.27 | ||
| Among them: euro | 336,047.12 | 7.8155 | 2,626,376.27 |
60. Government subsidy.
(1) Basic situation of government subsidies.
Unit: yuan
| Category | Amount | Presentation of items | The amount included in the profits and losses of the current period |
| Compensation for demolition and relocation of the old factory building on Jinfeng Road. | 5,340,480.38 | Deferred return | 297,660.63 |
| Equipment subsidy of Liyang Project Investment by the Management Committee of Jiangsu Zhongguancun Science and Technology Industrial Park. | 18,565,150.00 | Deferred return | 1,507,691.87 |
| Beijing Advanced Industrial Development Fund Industrial Innovation Cluster funding Project. | 11,000,000.00 | Deferred return | 366,869.29 |
| The fusion of the two modernizations. | 300,000.00 | Deferred return | 300,000.00 |
| 4 Mitsubishi gantry machining centers and 3 fixed beam gantry machining centers. | 20,100,000.00 | Deferred return | 1,116,660.00 |
| Subsidies for key scientific and technological projects of Foshan Nanhai Economic and | 1,000,000.00 | Other income | 1,000,000.00 |
| Science and Technology Promotion Bureau in 2018 (benchmarking high-tech) enterprises. | |||
| Special funds for Enterprise Research and Development in Foshan Nanhai District Economic and Science and Technology Promotion Bureau in 2016 and 2017. | 246,300.00 | Other income | 246,300.00 |
| Foshan Nanhai Shishan town treasury payment center Beidou enterprise support reward (town-level part). | 4,800,000.00 | Other income | 4,800,000.00 |
| Special funds for the demonstration Enterprise Project of "Intelligent Manufacturing and essential Safety" of Foshan production Safety Supervision and Administration Bureau. | 480,000.00 | Other income | 480,000.00 |
| Special fund for promoting economic development of Nanhai District Economic Promotion Bureau of Foshan City in 2019 (promoting the insurance of export credit insurance).） | 9,491.02 | Other income | 9,491.02 |
| Financial support funds of Nanhai District Economic Promotion Bureau of Foshan City (Municipal Engineering Center). | 200,000.00 | Other income | 200,000.00 |
| Foshan Nanhai District Economic and Science and Technology Promotion Bureau 2017 Special support Award for the Development of High-tech Enterprises. | 153,000.00 | Other income | 153,000.00 |
| Foshan Nanhai District Economic and Science and Technology Promotion Bureau 2018 subsidy funds for Foshan top 50 benchmarking high-tech enterprises. | 1,000,000.00 | Other income | 1,000,000.00 |
| Special funds for Foreign Trade Cooperation of Foshan Nanhai District economy and Science and Technology Promotion Bureau in 2018. | 200,000.00 | Other income | 200,000.00 |
| Foshan Nanhai District economy and Science and Technology Promotion Bureau 2018 Science and Technology Innovation platform support Award funds. | 500,000.00 | Other income | 500,000.00 |
| Shishan Town Economic Promotion Bureau "Big Dipper Enterprise" support reward (district level). | 3,200,000.00 | Other income | 3,200,000.00 |
| Refund of income tax service fee. | 120,839.33 | Other income | 120,839.33 |
| Special funds for Science and Technology Information of the Bureau for the Promotion of economy and Science and Technology of the State Treasury of Nanhai District. | 5,600.00 | Other income | |
| Government subsidy for special funds for foreign economic cooperation of the Bureau for the Promotion of economy and Technology. | 1,800,000.00 | Other income | |
| Domestic and foreign economic and trade development and port construction funds to promote credit insurance project funds in 2017. | 5,600.00 | Other income | |
| Special funds for Provincial Science and Technology Development in 2017 | 585,000.00 | Other income | |
| Stable post allowance. | 466,965.14 | Other income | 234,166.52 |
| Funding at the municipal level for the establishment of a project by the provincial engineering center in 2017. | 200,000.00 | Other income | |
| Foshan industrial product quality improvement support funds (quality development). | 50,000.00 | Other income | |
| Support funds for improving the quality of industrial products in Foshan in 2018. | 40,000.00 | Other income | |
| Subsidy funds for high-tech enterprises in Foshan in 2017. | 100,000.00 | Other income | |
| Insurance premium subsidy for production safety liability insurance. | 56,163.70 | Other income | |
| Support funds for technological transformation of enterprises by promoting the Bureau. | 200,000.00 | Other income | |
| Special funds for the development of foreign trade and economic cooperation. | 241,500.00 | Other income | |
| Special fund for promoting economic development in 2018 ("going out"). | 411,402.00 | Other income | |
| Patent funding for the Council for the Promotion of economy | 15,000.00 | Other income | 15,000.00 |
| and Technology in 2017. | |||
| The Bureau of Science and Technology recognized the subsidy funds for high-tech enterprises in 2018. | 100,000.00 | Other income | 100,000.00 |
| 2018 Foshan City "four top" enterprises to cultivate incentives and support funds. | 100,000.00 | Other income | |
| Domestic and foreign patent funding for high-tech zones in 2018. | 35,200.00 | Other income | 35,200.00 |
| Special funds for Business Development in 2019 (Export Credit guarantee subsidy). | 216,700.00 | Other income | 216,700.00 |
| Declaration of funds by high-tech enterprises in 2019. | 30,000.00 | Other income | 30,000.00 |
| Provincial Special funds for intellectual property Rights in 2019. | 3,000.00 | Other income | 3,000.00 |
| Slicing funds for Class B Air pollution Prevention and Control Project in 2018. | 390,000.00 | Other income | 390,000.00 |
| Support funds for small and medium-sized development projects of the Ministry of Commerce. | 58,500.00 | Other income | 58,500.00 |
| Reward for Advanced Enterprises in Hushuguan Development Zone in 2018. | 30,000.00 | Other income | 30,000.00 |
| International Market Development funds for small and medium-sized Enterprises in the third quarter of 2017 (High-tech Finance Bureau). | 20,000.00 | Other income | |
| 2017 newly recognized national and provincial high-tech product awards. | 40,000.00 | Other income | |
| 2018 Business Development Special Fund (the first batch) Export Credit Insurance. | 171,000.00 | Other income | |
| 2017 Advanced Enterprise Award (Management Committee of Hushuguan Development Zone). | 80,000.00 | Other income | |
| Special funds for Business Development in Suzhou in 2017. | 123,623.50 | Other income | |
| International Market Development funds for SMEs in the fourth quarter of 2017 (Finance Bureau of High-tech Zone) International Market Development funds for small | 54,000.00 | Other income |
| and medium-sized Enterprises (sales). | |||
| 2018 regional trademark subsidy. | 1,600.00 | Other income | |
| The first batch of newly recognized provincial private science and technology enterprises reward funds in 2018. | 50,000.00 | Other income | |
| The government subsidy for the first batch of science and technology grant funds in Liyang in 2019 | 100,000.00 | Other income | 100,000.00 |
| 2018 Award for promoting Scientific and technological Innovation. | 180,500.00 | Other income | 180,500.00 |
| Intellectual property subsidy. | 12,000.00 | Other income | 12,000.00 |
| Patent subsidy. | 5,950.00 | Other income | 5,950.00 |
| Adopt and cultivate government tax incentive funds. | 200,000.00 | Other income | 200,000.00 |
| Research and development funds for key projects of the Finance Bureau. | 300,000.00 | Other income | |
| Patent subsidy reward. | 40,080.00 | Other income | |
| Scientific and technological | 96,500.00 | Other income |
| innovation reward. | |||
| Outstanding contribution enterprise reward. | 40,000.00 | Non-operating income | 40,000.00 |
| Foreign government subsidies | 7,593,329.90 | Other income / non-operating income | 5,704,532.73 |
VIII. Changes in the scope of the merger.
1. Business merger under different control.
(1) The merger of enterprises under different control occurred in the current period.
Unit: yuan
| Name of the acquiree. | Time point of equity acquisition. | Equity acquisition cost. | Equity acquisition ratio. | Mode of equity acquisition. | Purchase date. | Basis for determining the date of purchase. | Income of the acquiree from the date of purchase to the end of the period. | Net profit of the acquiree from the date of purchase to the end of the period |
| Tiruna Group | May 30, 2019 | 123,995,066.16 | 70.00% | Purchase | May 30, 2019 | Completion of equity transfer | 85,937,991.69 | -11,546,342.26 |
Other instructions:
(2) Combined cost and goodwill.
Unit: yuan
| Combined cost. | Tiruna Group |
| --Cash. | 123,995,066.16 |
| Total combined cost. | 123,995,066.16 |
| Minus: fair value share of identifiable net assets obtained. | 130,859,277.67 |
| Goodwill / merger cost less than the fair value share of identifiable net assets acquired | -6,864,211.51 |
(3) The acquiree can identify assets and liabilities on the date of purchase.
Unit: yuan
| Tiruna Group | ||
| Fair value on the date of purchase | Daily book value of purchase | |
| Assets: | 253,100,668.54 | 253,100,668.54 |
| Monetary fund. | 26,748,538.29 | 26,748,538.29 |
| Receivables. | 46,167,360.10 | 46,167,360.10 |
| Stock. | 63,604,991.10 | 63,604,991.10 |
| Fixed assets. | 87,052,673.35 | 87,052,673.35 |
| Intangible assets. | 455,709.74 | 455,709.74 |
| Liabilities: | 66,158,843.30 | 66,158,843.30 |
| Borrowing money. | 33,530,933.66 | 33,530,933.66 |
| Accounts payable. | 33,496,174.44 | 33,496,174.44 |
| Deferred income tax liability. | 1,716,106.55 | 1,716,106.55 |
| Net assets. | 186,941,825.25 | 186,941,825.25 |
| Minus: minority interests. | 56,082,547.57 | 56,082,547.57 |
| Net assets acquired | 130,859,277.67 | 130,859,277.67 |
2. Disposal of subsidiaries.
Is there a situation in which a single disposal loses control over the investment of a subsidiary?
√ Yes □ No
Unit: yuan
| Subsidiary name. | Equity disposal price. | Proportion of equity disposal. | Equity disposal mode. | The point at which control is lost. | The basis for determining the time point of loss of control. | The difference in the share of the subsidiary's net assets at the level of the consolidated financial statements corresponding to the disposal price and the disposal investment. | Proportion of remaining equity on the date of loss of control. | Book value of remaining equity at the date of loss of control. | Fair value of remaining equity at the date of loss of control. | The gain or loss arising from the remaining equity is remeasured according to fair value. | The determination method and main hypothesis of the Fair value of residual Equity on the date of loss of Control. | The amount of other comprehensive income related to atomic company's equity investment transferred to investment profit and loss |
| Pride | 1,500,000,000.00 | 100.00% | Transfer | December 26, 2019 | Industrial and commercial change | -91,523,625.38 |
Is there a situation in which the investment in the subsidiary is disposed of step by step through multiple transactions and the control islost in the current period?
□ Yes √ No
3. Changes in the scope of merger for other reasons.
Explain the changes in the scope of the merger caused by other reasons (for example, newly established subsidiaries, liquidationsubsidiaries, etc.) and their related information:
1. In March 2019, Parsun of the United States completed its cancellation.
2. In September 2019, Guangzhou Pride completed its cancellation.
3. In October 2019, Guangdong Frando completed the cancellation.
IX. Rights and interests in other subjects.
1. Interests in subsidiaries.
(1) The composition of enterprise groups
| Subsidiary name. | Main operating place | Place of registration. | Nature of business. | Shareholding ratio. | Mode of acquisition | |
| Direct | Indirect | |||||
| Dongfang Precision（HK） | HK | HK | Trading enterprise | 100.00% | Set up | |
| Dongfang Precision（Netherland） | Netherland | Netherland | Trading enterprise | 90.00% | 10.00% | Set up |
| Fosber Group | Italy | Italy | Manufacturing industry | 100.00% | Business merger under different control | |
| Fosber US | US | US | Manufacturing industry | 100.00% | Business merger under different control | |
| Fosber Tianjin | Tianjin, China | Tianjin, China | Manufacturing industry | 100.00% | Business merger under different control | |
| Fosber Asia | Foshan City, Guangdong Province, China | Foshan City, Guangdong Province, China | Manufacturing industry | 56.40% | 设立 | |
| Parsun Power | Suzhou City, Jiangsu Province, China | Suzhou City, Jiangsu Province, China | Manufacturing industry | 35.00% | 65.00% | Business merger under different control |
| Suzhou Shunyi | Suzhou City, Jiangsu Province, China | Suzhou City, Jiangsu Province, China | Investment company | 100.00% | Business merger under different control | |
| Italian EDF | Italy | Italy | Manufacturing industry | 100.00% | Business merger under different control | |
| Tiruna Group | Spain | Spain | Manufacturing industry | 70.00% | Business merger under different control | |
| Tiruna S.L.U. | Spain | Spain | Manufacturing industry | 70.00% | Business merger under different |
| control | ||||||
| Tratatamientos Industriales Tiruna S.A.U. | Spain | Spain | Manufacturing industry | 70.00% | Business merger under different control | |
| Tiruna Brazil | Brazil | Brazil | Manufacturing industry | 70.00% | Business merger under different control | |
| Tiruna France SARL | France | France | Manufacturing industry | 70.00% | Business merger under different control | |
| SCI Candan | France | France | Manufacturing industry | 70.00% | Business merger under different control | |
| Tiruna UK Ltd | UK | UK | Manufacturing industry | 70.00% | Business merger under different control | |
| Guangdong Tiruna | Guangdong Province, China | Guangdong Province, China | Manufacturing industry | 66.30% | Business merger under different control | |
| Tiruna US | US | US | Manufacturing industry | 85.00% | Business merger under different control |
(2) Important non-wholly owned subsidiaries.
Unit: yuan
| Subsidiary name. | Minority shareholders' shareholding ratio. | Profits and losses attributable to minority shareholders for the current period. | Declaration of dividends to minority shareholders in the current period. | Balance of minority shareholders' rights and interests at the end of the period |
| Fosber Asia | 43.60% | 4,801,578.69 | 11,035,039.52 | |
| Tiruna Group | 30.00% | -3,463,902.68 | 53,003,332.11 |
An explanation that the proportion of shares held by minority shareholders of a subsidiary is different from the proportion of votingrights:
Other instructions:
(3) The main financial information of important non-wholly-owned subsidiaries.
Unit: yuan
| Subsidiary name. | Ending balance | Opening balance | ||||||||||
| current assets. | Non-current assets. | Total assets. | current assets. | Non-current assets. | Total liabilities | current assets. | Non-current assets. | Total assets. | current assets. | Non-current assets. | Total liabilities | |
| Fosber Asia | 126,925,006.60 | 5,087,285.73 | 132,012,292.33 | 99,295,633.40 | 7,406,935.25 | 106,702,568.65 | 97,452,578.16 | 2,945,689.21 | 100,398,267.37 | 86,101,338.85 | 86,101,338.85 | |
| Tiruna Group | 113,311,370.00 | 116,986,573.42 | 230,297,943.42 | 37,452,755.36 | 16,167,413.79 | 53,620,169.15 | ||||||
Unit: yuan
| Subsidiary name | Current occurrence amount | The occurrence amount of the previous period | ||||||
| business income. | Net profit. | Total comprehensive income. | Cash flow from operating | business income. | Net profit. | Total comprehensive income. | Cash flow from operating | |
| activities | activities | |||||||
| Fosber Asia | 190,588,488.02 | 11,012,795.16 | 11,012,795.16 | 39,095,214.21 | 123,481,662.67 | 1,256,190.68 | 1,256,190.68 | 10,691,312.04 |
| Tiruna Group | 85,937,991.69 | -11,546,342.26 | -11,546,342.26 | 13,248,654.03 |
Other instructions:
(4) Significant restrictions on the use of enterprise group assets and the settlement of enterprise groupdebts.
(5) Financial or other support provided to structured entities that fall within the scope of the consolidatedfinancial statements.Other instructions:
2. Interests in combined venture arrangements or joint ventures.
(1) An important joint venture or combined venture
| Name of joint venture or combined venture. | Main operating place | Place of registration. | Nature of business. | Shareholding ratio. | Accounting treatment of investment in joint ventures or combined ventures | |
| Direct | Indirect | |||||
| Jiateng robot | Foshan City, Guangdong Province, China | Foshan City, Guangdong Province, China | Manufacturing industry | 20.00% | Equity method | |
| Yinglian Digital | Foshan City, Guangdong Province, China | Foshan City, Guangdong Province, China | Manufacturing industry | 50.00% | Equity method | |
| Talleres Tapre, S.L. | Spain | Spain | Manufacturing industry | 14.00% | Equity method |
(2) Main financial information of important joint ventures.
Unit: yuan
| Balance at the end of the period / amount incurred in the current period | Opening balance / previous period occurrence amount | |
| Yinglian Digital (RMB) | Yinglian Digital (RMB) | |
| current assets. | 8,319,156.14 | 23,058,103.08 |
| Among them: cash and cash equivalents. | 36,386.33 | 8,317,964.70 |
| Non-current assets. | 13,810,304.61 | 47,673.99 |
| Total assets. | 22,129,460.75 | 23,105,777.07 |
| floating liability. | 920,225.25 | 3,395,151.10 |
| Total liabilities. | 920,225.25 | 3,395,151.10 |
| Vested in the shareholders' rights and interests of the parent company. | 21,209,235.50 | 19,710,625.97 |
| business income. | 392,307.62 | |
| Financial expenses. | 80,454.26 | -12,597.06 |
| Income tax expense. | -74,930.42 | |
| Net profit. | -621,777.43 | -4,356,187.50 |
| Total comprehensive income | -621,777.43 | -4,356,187.50 |
(3) Main financial information of important combined associates.
Unit: yuan
| Balance at the end of the period / amount incurred in the current period | Opening balance / previous period occurrence amount | |
| Jiateng robot（RMB) | Jiateng robot（RMB) | |
| current assets. | 219,472,243.57 | 215,629,059.12 |
| Among them: cash and cash equivalents. | 113,320,858.41 | 88,024,257.25 |
| Non-current assets. | 332,793,101.98 | 303,653,316.37 |
| Total assets. | 136,413,860.90 | 163,172,720.36 |
| floating liability. | 28,053,156.84 | 27,053,156.84 |
| Total liabilities. | 164,467,017.74 | 190,225,877.20 |
| Vested in the shareholders' rights and interests of the parent company. | 168,326,084.24 | 113,427,439.17 |
| business income. | 153,097,991.65 | 126,116,584.05 |
| Financial expenses. | 14,017,719.34 | 16,246,488.63 |
| Income tax expense. | 14,017,719.34 | 16,246,488.63 |
(4) Summary financial information of unimportant joint ventures and combined ventures.
Unit: yuan
| Balance at the end of the period / amount incurred in the current period | Opening balance / previous period occurrence amount | |
| Joint venture: | -- | -- |
| Total book value of investment. | 1,724,878.58 |
| The total number of the following items calculated by shareholding ratio. | -- | -- |
| --net profit. | 189,406.64 | |
| --other comprehensive income | -384.56 | |
| --Total consolidated income | 189,022.08 | |
| Combined venture: | -- | -- |
| The total number of the following items calculated by shareholding ratio | -- | -- |
X. Risks related to financial instruments
The company faces various financial risks during its operation: credit risk, market risk and liquidity risk. Thecompany's board of directors is fully responsible for the determination of risk management objectives and policies,and assumes ultimate responsibility for the risk management objectives and policies. However, the board ofdirectors has authorized the company's presidential office to design and implement procedures that ensure theeffective implementation of risk management objectives and policies. The board of directors reviews theeffectiveness of the implemented procedures and the rationality of risk management objectives and policies throughthe monthly report submitted by the fund manager. The company's internal auditors also audit risk managementpolicies and procedures, and report relevant findings to the audit committee.The overall goal of the company's risk management is to formulate a risk management policy that minimizes riskswithout excessively affecting the company's competitiveness and resilience.
1. Credit risk
Credit risk refers to the risk that one party to a financial instrument fails to perform its obligations and causes theother party to incur financial losses. The company mainly faces customer credit risk caused by credit sales. Beforesigning a new contract, the company will assess the credit risk of new customers, including external credit ratings
and bank credit certificates in certain cases (when this information is available). The company has set a credit limitfor each customer, which is the maximum amount that does not require additional approval.The company uses quarterly monitoring of existing customers' credit ratings and monthly review of aging analysisof accounts receivable to ensure that the company's overall credit risk is within controllable limits. Whenmonitoring customers 'credit risk, they are grouped according to customers' credit characteristics. Customers whoare rated as "high risk" will be placed on the list of restricted customers, and only with additional approval will thecompany be able to sell them on credit in the future period, otherwise they must be required to pay in advance.
2. Market risk
Market risk of financial instruments refers to the risk that the fair value or future cash flow of financial instrumentswill fluctuate due to changes in market prices, including exchange rate risk, interest rate risk, and other price risks.
(1) Interest rate risk
Interest rate risk refers to the risk that the fair value of financial instruments or future cash flows will fluctuate due tochanges in market interest rates. The interest rate risk faced by the company mainly comes from bank loans.As of December 31, 2019, while other variables remained unchanged, if the borrowing rate calculated at floatingrates rose or fell by 50 basis points, the company's net profit would decrease or increase by RMB 22,906.37.Management believes that the 50 basis points reasonably reflect the reasonable range in which interest rates maychange in the next year.
(2) Exchange rate risk
Exchange rate risk refers to the risk that the fair value of financial instruments or future cash flows will fluctuate dueto changes in foreign exchange rates. As far as possible, the company matches foreign currency income with foreigncurrency expenditure to reduce exchange rate risk. In addition, the company may also sign forward foreignexchange contracts or currency swap contracts to avoid exchange rate risk. During the current period and theprevious period, the Company did not sign any forward foreign exchange contracts or currency swap contracts.The exchange rate risk faced by the company mainly comes from financial assets and financial liabilitiesdenominated in US dollars. The amounts of foreign currency financial assets and foreign currency financial
liabilities converted into RMB are listed below:
| Item | Ending balance | Balance at the end of last year | ||||||
| US dollars | Euro | Other foreign currencies | Total | US dollars | Euro | Other foreign currencies | Total | |
| Monetary fund | 177,718,513.83 | 188,934,072.13 | 198,537.61 | 366,851,123.57 | 244,180,556.45 | 309,293,006.03 | 1,809.62 | 553,475,372.10 |
| Notes receivable | 56,743,777.57 | 56,743,777.57 | 29,593,201.87 | 29,593,201.87 |
| Accounts receivable | 37,871,761.75 | 453,987,206.67 | 491,858,968.42 | 33,058,048.67 | 260,433,995.63 | 293,492,044.30 | ||
| Other receivables | - | 58,019,821.22 | 58,019,821.22 | 68,473,552.08 | 68,473,552.08 | |||
| Subtotal. | 272,334,053.15 | 700,941,100.02 | 198,537.61 | 973,473,690.78 | 277,238,605.12 | 667,793,755.61 | 1,809.62 | 945,034,170.35 |
| Subtotal | 409,926.81 | 335,956,086.13 | 14,075.42 | 336,380,088.36 | 70,058.45 | 259,832,333.09 | 9,077.82 | 259,911,469.36 |
| Short-term loan | 27,888,353.14 | 27,888,353.14 | 6,525,029.95 | 6,525,029.95 |
| Non-current liabilities due within one year | 19,208,458.29 | 19,208,458.29 | 1,060,783.60 | 94,139,858.07 | 95,200,641.67 | |||
| Long-term loan | 32,823,227.48 | 32,823,227.48 | 357,778.62 | 94,139,858.07 | 94,497,636.69 | |||
| Other | 241,316.25 | 44,855,866.87 | 45,097,183.12 | 216,611.10 | 41,153,444.49 | 41,370,055.59 | ||
| payables | ||||||||
| Interest payable. | - | 2,626,376.27 | 2,626,376.27 | 1,587,011.19 | 1,587,011.19 | |||
| Subtotal | 651,243.06 | 463,358,368.18 | 14,075.42 | 464,023,686.66 | 1,705,231.77 | 497,377,534.86 | 9,077.82 | 499,091,844.45 |
| Total | 271,682,810.09 | 237,582,731.84 | 184,462.19 | 509,450,004.12 | 275,533,373.35 | 170,416,220.75 | -7,268.20 | 445,942,325.90 |
On December 31, 2019, while all other variables remain unchanged, if the RMB appreciates or depreciates by 2%against the US dollar, the company will increase or decrease its net profit by 3,595,794.73 yuan (31 December 2018:
4,442,363.44 yuan) . Management believes that 2% reasonably reflects the reasonable range of possible changes inRMB against the US dollar in the next year.
3. Liquidity risk
Liquidity risk refers to the risk of a shortage of funds when an enterprise fulfills its obligation to settle cash or otherfinancial assets. The company's policy is to ensure that it has sufficient cash to repay its due debts. Liquidity risk iscentrally controlled by the company's financial department. The finance department monitors cash balances,securities that can be cashed at any time, and rolling forecasts of cash flows over the next 12 months to ensure thatthe company has sufficient funds to repay debts under all reasonable forecasts.The undiscounted contract cash flows of the financial liabilities of the Company are shown as follows:
| Item | Ending balance | ||||
| Within 6 months | 6 months to 1 year | 1 to 5 years | More than 5 years | Total | |
| Short-term loan. | 117,337,912.48 | 550,440.66 | 117,888,353.14 | ||
| Notes payable. | 43,973,859.51 | 43,973,859.51 | |||
| Accounts payable. | 472,862,744.45 | 472,862,744.45 | |||
| Other payables. | 90,950,443.16 | 90,950,443.16 |
| Non-current liabilities due within one year. | 4,598,623.32 | 348,800,614.97 | 353,399,238.29 | ||
| Long-term loan | 203,034,208.34 | 21,112,459.14 | 224,146,667.48 | ||
| Total | 729,723,582.92 | 349,351,055.63 | 203,034,208.34 | 21,112,459.14 | 1,303,221,306.03 |
| Item | Balance at the end of last year | ||||
| Within 6 months | 6 months to 1 year | 1 to 5 years | More than 5 years | Total | |
| Short-term loan. | 160,525,029.95 | 90,000,000.00 | 250,525,029.95 | ||
| Notes payable. | 990,875,308.24 | 990,875,308.24 | |||
| Accounts payable. | 1,588,338,349.43 | 1,588,338,349.43 | |||
| Other payables. | 233,704,487.17 | 3,310,000.00 | 237,014,487.17 | ||
| Non-current liabilities due within one year. | 47,974,468.55 | 47,226,179.68 | 95,200,648.23 | ||
| Long-term loan | 536,279,767.66 | 79,153.36 | 536,358,921.02 | ||
| Total | 3,021,417,643.34 | 137,226,179.68 | 539,589,767.66 | 79,153.36 | 3,698,312,744.04 |
XI.Disclosure of fair value.
1. The end-of-period fair value of assets and liabilities measured at fair value.
Unit: yuan
| Item | Fair value at the end of the term | |||
| Fair value measurement at the first level | Fair value measurement at the second level | Fair value measurement at the third level | Total | |
| I. continuous fair value measurement. | -- | -- | -- | -- |
| (1) transactional financial assets. | 1,039,381.59 | 1,163,000,000.00 | 1,164,039,381.59 | |
| 1. Financial assets measured at fair value and whose changes are included in the profits and losses of the current period. | 1,039,381.59 | 1,039,381.59 | ||
| (3) derivative financial assets. | 1,039,381.59 | 1,039,381.59 | ||
| 2.Financial assets that are designated to be measured at fair value and whose changes are included in the profits and losses of the current period. | 1,163,000,000.00 | 1,163,000,000.00 | ||
| (1) Investment in debt instruments. | 1,163,000,000.00 | 1,163,000,000.00 | ||
| Receivable financing. | 55,447,099.32 | 55,447,099.32 | ||
| Other illiquid financial assets. | 20,559,159.34 | 20,559,159.34 | ||
| Total assets continuously measured at fair value. | 1,039,381.59 | 1,218,447,099.32 | 20,559,159.34 | 1,240,045,640.25 |
| 2 Unsustainable fair value measurement | -- | -- | -- | -- |
XII. Related parties and related transactions.
1. The situation of the parent company of the enterprise
| Name | Relationship with our company | Shareholding ratio (%) |
| Tang Zhuolin (natural person). | The controlling shareholder of the company and one of the actual controllers | 14.72 |
| Tang Zhuomian (natural person) | The controlling shareholder of the company and one of the actual controllers | 7.39 |
The ultimate control of this enterprise is. Tang Zhuolin, Tang Zhuomian.
2. The situation of the subsidiaries of the enterprise.
The details of the subsidiaries of this enterprise can be found in note 9, the rights and interests in other subjects.
3. The situation of joint ventures and combined ventures.
For details of the important joint ventures or combined ventures of the enterprise, see note 9, rights and interestsin other subjects.
4. Other related parties
| Names of other related parties. | Relationship between other related parties and the enterprise |
| Qiu Yezhi. | Director, General Manager, Chief Financial Officer |
| Zhou Wenhui. | Deputy general manager and secretary of the board of directors. |
| Xie Weiwei. | Director and deputy general manager. |
| Mai Zhirong. | independent director. |
| Peng Xiaowei. | independent director. |
| He Weifeng. | independent director. |
| Chen Huiyi. | Chairman of the board of supervisors. |
| Cen Meiling. | Supervisor. |
| Zhao Xiuhe. | Supervisor. |
| BAIC | Shareholders holding more than 5% of shares. |
| CATL | Shareholders holding more than 5% of shares. |
| SMART SHOT INC LIMITED (hereinafter referred to as "SMART SHOT"). | Minority shareholders of the company's controlling subsidiary. |
| BAIC new energy. | More than 5% of the company's Northeast Auto Investment belongs to a brother enterprise under the same control, which constitutes a consistent actor with BAIC. |
| Foton Motor | Shareholders of the Company. |
| Beijing Baowo Automobile Co., Ltd. (hereinafter referred to as "Bowo Automobile"). | The subsidiary controlled by Foton Motor, the shareholder of the Company. |
| Bowo Automobile (China) Co., Ltd. (hereinafter referred to as "Bowo China"). | The subsidiary controlled by Foton Motor, the shareholder of the Company. |
| Beijing Hyundai Automobile Co., Ltd. (hereinafter referred to as "Beijing Hyundai"). | A fraternal enterprise under the same control as BAIC New Energy, a shareholder of the company. |
| Pride | A subsidiary which has been transfered for less than 12 months |
| Changzhou Pride | A subsidiary which has been transfered for less than 12 months |
5. Related party transactions.
(1) Related transactions for the purchase and sale of goods and the provision and receipt of services.List of goods purchased / services received.
Unit: yuan
| Related party. | Related party transaction content. | Current occurrence amount. | Approved trading quota. | Whether it exceeds the trading quota. | The occurrence amount of the previous period |
| Contemporary Amperex Technology Co. | Purchase products and services | 5,382,482,492.26 | 2,992,946,047.95 |
| Limited | |||||
| Jiateng robot | Purchase products and services | 42,947.42 |
Statement on the sale of goods / provision of services.
Unit: yuan
| Related party. | Related party transaction content. | Current occurrence amount. | The occurrence amount of the previous period |
| BAIC new energy. | Sell products | 7,017,964,740.18 | 3,983,238,141.48 |
| Foton Motor | Sell products | 183,966,713.54 | 236,483,332.92 |
| Beijing Baowo. | Sell products | 13,557,432.64 | 9,991,112.78 |
| Baowo China. | Sell products | 11,794.87 | |
| Yinglian Digital | Sell products and services | 80.00 |
(2) Related leases.
As the lessor, the Company:
Unit: yuan
| Lessee name. | Types of leased assets. | Lease income recognized in the current period | Lease income recognized in the previous period |
| Yinglian Digital | Housing | 244,219.05 | 613,087.48 |
As the lessee, the Company:
Unit: yuan
| Lessor name | Types of leased assets | Lease fee confirmed in the current period | Lease fee confirmed in the previous period |
| BAIC new energy | Housing | 3,828,160.48 | 5,407,243.85 |
(3) Related party guarantee.
Our company acts as the guarantor.
Unit: yuan
| Guaranteed party. | Guarantee amount | guarantee start date | guarantee expiration date | whether the guarantee has been completed |
| Dongfang Precision（Netherland） | 273,542,500.00 | August，10，2017 | August，17，2020 | NO |
| Dongfang Precision（Netherland） | 350,759,640.00 | February 20, 2018 | June 20, 2021 | NO |
(4) Key management personnel compensation
unit: yuan
| Item | Current amount | Amount in the previous period |
| Key management personnel compensation | 13,526,996.13 | 9,532,744.17 |
6. Receivables due from related parties
(1) Receivable items
unit: yuan
| Item name | Related party | Ending balance | Opening balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| accounts receivable | BAIC New Energy | 762,228,587.41 | 7,622,285.87 | ||
| accounts receivable | Foton Motor | 168,083,523.27 | 1,680,835.23 | ||
| accounts receivable | Yinglian Digital | 660,000.00 | 66,000.00 | 1,100,000.00 | 55,000.00 |
| accounts receivable | Beijing Hyundai | 3,837.01 | 3,837.01 | ||
| accounts receivable | Beijing Baowo | 724,882.03 | 7,248.82 | ||
| Other receivables | Yinglian Digital | 11,467.93 | 114.68 | ||
| Other receivables | SMART SHOT | 58,227.04 | 5,822.70 | 58,227.04 | 2,911.35 |
(2) Items payable
unit: yuan
| Item name | Related party | Book balance at the end of the period | Book balance at the start of the period |
| accounts receivable | CATL | 752,208,918.70 | |
| accounts receivable | Jiateng robot | 81,180.00 | |
| Other receivables | Yinglian digital | 200,876.88 | |
| Other receivables | SMART SHOT | 43,500.00 |
XIII. Share payment.
1. General situation of share payment.
□ Applicable √ not applicable.
2. Equity-settled share payments.
□ Applicable √ not applicable.
3. Share payments settled in cash.
□ Applicable √ not applicable.
4. Modification and termination of share payment.
5. Other.
XIV. Commitments and contingencies.
1. Important commitments.
Important commitments that exist on the balance sheet date.
(1) operating lease commitment.
According to the irrevocable operating lease contract signed, the minimum lease payment payable by theCompany after the balance sheet date is as follows:
| Remaining lease term | Minimum lease payment |
| Within 1 year (including 1 year) | 5,276,493.00 |
| 1 to 2 years (including 2 years) | 5,540,403.00 |
| 2 to 3 years (including 3 years) | 5,901,525.00 |
| over 3 years | 14,788,626.00 |
| Total | 31,507,047.00 |
2. Contingencies.
(1) important contingent matters existing on the balance sheet date.
1. Dongfang Precision and Minsheng Bank Co., Ltd. Foshan Branch signed a letter of guarantee / standby letter ofcredit contract on August 10, 2017. to guarantee the equity and loan of 35 million euros acquired by DongfangPrecision (Netherland) from the Amsterdam branch of Industrial and Commercial Bank of China (Europe) Co., Ltd.Dongfang Precision pledged 110.11 million yuan as a deposit in Foshan Branch of Minsheng Bank of China. Theguarantee period is from August 10, 2017 to August 17, 2020.
2. In January 2018, Dongfang Precision and Bank of China (Hong Kong) Co., Ltd. signed a letter of guarantee /standby letter of credit contract to provide a total guarantee of not more than 44.88 million euros for overseassubsidiary Dongfang Precision (Holland) to obtain loans from Bank of China (Hong Kong) Co., Ltd., with aguarantee period from February 20, 2018 to June 20, 2021.
XV.Events after the balance sheet date.
1. Other statements of events after the balance sheet date.
1. Repurchase and cancellation of performance compensation shares.
According to the agreement signed between the company and Pride's original shareholders, the company buys backthe performance compensation shares that should be borne by Pride's original shareholders at a price of RMB 1, andthe total number of repurchase and cancellation of performance compensation shares is 293520139 shares. Thecompany received the confirmation of Securities transfer Registration issued by Shenzhen Branch of ChinaSecurities Registration and Clearing Co., Ltd. on January 7, 2020, and received a notice from Shenzhen Branch ofChina Securities Registration and Clearing Co., Ltd. on January 8, 2020, the relevant work related to the repurchaseand cancellation of the performance compensation shares has been completed.After the completion of the repurchase and cancellation of the performance compensation shares, the total sharecapital of the company has changed from 1838647096 shares to 1545126957 shares.
2. On authorizing the management to apply for comprehensive credit from the bank in 2020.On January 10, 2020, the company held the 42nd (interim) meeting of the third session of the board of directors toexamine and approve the "Resolution on authorizing the Management to apply for Comprehensive Credit from theBank in 2020". The total amount of comprehensive credit applied to the bank for the year 2020 shall not exceed 3billion yuan, which is valid for 2 years. Within the term of validity, the quota can be recycled and rolled over, andthe board of directors authorizes the management of the company to be responsible for specificimplementation-related matters.
3. Use idle self-owned funds to purchase bank wealth management products.
On January 10, 2020, the company held the 42nd (interim) meeting of the third session of the board of directors and
examined and adopted the "proposal on using idle self-owned funds to purchase financial products in 2020." it isagreed that in 2020, the company will use idle self-funds to purchase financial products with a low-and medium-riskrisk level and a holding period of no more than 12 months. The amount that occurred during the year (that is, themaximum daily balance of purchasing wealth management products with idle self-funds from January to December2020) shall not exceed 2 billion yuan, and the financial management quota purchased during the year can be used ona rolling basis, the board of directors authorizes the management of the company to be responsible for specificimplementation-related matters.
4. Provide guarantee for overseas wholly-owned subsidiaries.
On January 10, 2020, the company held the 42nd (interim) meeting of the third session of the board of directors toexamine and approve the "Bill on providing guarantee for overseas wholly-owned subsidiaries" and agreed tore-sign the relevant guarantee agreement with the Bank of China Foshan Branch to apply for a credit line of no morethan 600 million yuan from the Bank of China Foshan Branch with its own real estate and land mortgage guarantee.And continue to provide guarantee for the Dutch subsidiary of Dongfang Precision with a total amount notexceeding 44.88 million euros.
5. The investment project on raising funds is terminated and the savings raised are permanently replenished to theworking capital.On March 11, 2020, the company held the 43th (interim) meeting of the third session of the board of directors toexamine and approve the motion on terminating the fund-raising investment project and permanently replenishingthe working capital with the savings raised. It is agreed that the investment project of the company's raised fundswill be terminated and 1.10779 billion yuan of surplus raised funds will be used to permanently replenish currentfunds, and this bill needs to be submitted to the general meeting of the company for consideration and approval.
6. On the company's implementation of a restricted stock incentive plan in 2020.On March 11, 2020, the company held the forty-third (interim) meeting of the third session of the board of directorsto deliberate and pass the motion on the draft and summary of the company's 2020 restricted stock incentive plan,
the bill on the implementation of the 2020 restricted stock incentive plan, and the motion on requesting the generalmeeting of shareholders to authorize the board of directors to handle matters related to the company's 2020restricted stock incentive plan. The number of restricted shares to be granted under this incentive plan is 27 millionshares, of which 22.85 million shares are granted for the first time, 4.15 million shares are reserved, and the grantprice is 1 yuan per share. This motion still needs to be submitted to the general meeting of shareholders of thecompany for consideration and approval.
XVI. Other important matters
1. Termination of business
unit: yuan
| Item | Income | Cost | Total profit | Income tax expense | Net profit | Profit attributable to the owner of the parent company |
| Pride | 7,106,097,351.49 | 6,635,980,332.99 | 421,268,666.68 | 110,455,237.91 | 310,813,428.77 | 310,813,428.77 |
Other instructions.
2. Segment information.
(1) The basis for determining the reporting segment and accounting policy.
The company determines the operating division on the basis of internal organizational structure, management requirements, internalreporting system, etc. The operating division of a company refers to the components that meet the following conditions at the sametime:
(1) This component can generate income and expenses in daily activities;
(2) Management can regularly evaluate the operating results of this component in order to decide to allocate resources to it andevaluate its performance;
(3) The relevant accounting information such as financial situation, operating results and cash flow of the component can be obtained
through analysis.The company determines the reporting segment on the basis of industry segment / product segment, and the assets and liabilitiescommonly used with each segment are distributed among different segments in proportion to their size.
(2) Report the financial information of the segment.
Unit: yuan
| Item | Domestic company | Foreign company | Inter-segment elimination | Total |
| Operating income | 7,860,469,494.28 | 2,207,388,037.90 | -94,353,929.99 | 9,973,503,602.19 |
| Operating cost | 6,717,295,986.48 | 1,694,193,810.44 | -125,057,722.00 | 8,286,432,074.92 |
| Total assets | 4,691,025,284.89 | 1,978,249,353.80 | -395,758,481.38 | 6,273,516,157.31 |
| Total liabilities | 494,264,450.35 | 1,545,727,634.67 | -168,558,869.26 | 1,871,433,215.76 |
XVII. Notes on the main items of the parent company's financial statements
1. Accounts receivable
(1) Classified disclosure of accounts receivable
Unit: yuan
| category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| amount | percentage | amount | Withdrawal ratio | amount | percentage | amount | Withdrawal ratio | |||
| Among them: | ||||||||||
| Accounts receivable for bad debt provision by combination | 153,764,344.60 | 100.00% | 2,668,130.50 | 1.74% | 151,096,214.10 | 123,107,045.24 | 100.00% | 1,988,510.18 | 1.62% | 121,118,535.06 |
| Among them: | ||||||||||
| account age combination | 57,569,287.50 | 37.44% | 2,668,130.50 | 4.63% | 54,901,157.00 | |||||
| Combination of related parties in the scope of consolidation | 96,195,057.10 | 62.56% | 96,195,057.10 | |||||||
| Total | 153,764,344.60 | 100.00% | 2,668,130.50 | 151,096,214.10 | 123,107,045.24 | 100.00% | 1,988,510.18 | 121,118,535.06 |
Provision for bad debts by single item:
unit: yuan
| Name | Ending balance | |||
| Book balance | Bad debt provision | Withdrawal ratio | Reason for accrual | |
Provision for bad debts by combination: account age combination
unit: yuan
| Name | Ending balance | ||
| Book balance | Bad debt provision | Withdrawal ratio | |
| account age combination | 57,569,287.50 | 2,668,130.50 | 4.63% |
| Among them: | |||
| Within 1 year (including 1 year) | 49,878,639.93 | 498,786.40 | 1.00% |
| 1 to 2 years (including 2 years) | 3,114,430.74 | 155,721.54 | 5.00% |
| 2 to 3 years (including 3 years) | 2,339,439.00 | 233,943.90 | 10.00% |
| 3 to 4 years (including 4 years) | 173,942.57 | 52,182.77 | 30.00% |
| 4 to 5 years (including 5 years) | 670,678.75 | 335,339.38 | 50.00% |
| More than 5 years | 1,392,156.51 | 1,392,156.51 | 100.00% |
| Combination of related parties in the scope of consolidation | 96,195,057.10 | ||
| Total | 153,764,344.60 | 2,668,130.50 | -- |
Provision for bad debts by combination: combination of related parties within the scope of consolidation
unit: yuan
| Name | Ending balance | ||
| Book balance | Bad debt provision | Withdrawal ratio | |
| Combination of related parties in the scope of consolidation | 96,195,057.10 | ||
| Total | 96,195,057.10 | -- | |
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, pleaserefer to the disclosure of other receivables to disclose relevant information about bad debts:
□ Applicable √ Not applicable
Disclosure by age
Unit: yuan
| Account age | Book balance |
| Within 1 year (including 1 year) | 114,803,763.84 |
| 1 to 2 years | 32,275,536.72 |
| 2 to 3 years | 4,448,266.21 |
| over 3 years | 2,236,777.83 |
| 3 to 4 years | 173,942.57 |
| 4 to 5 years | 670,678.75 |
| More than 5 years | 1,392,156.51 |
| Total | 153,764,344.60 |
(2) The provision for bad debts withdrawn, recovered or transferred back in the current periodProvision for bad debts in the current period:
Unit: yuan
| Category | Opening balance | Amount of changes in the current period | Ending balance | |||
| Accrual | Take back or turn back | Write off | Other | |||
| Provision for bad debts by combination | 1,988,510.18 | 679,620.32 | 2,668,130.50 | |||
| Total | 1,988,510.18 | 679,620.32 | 2,668,130.50 | |||
unit: yuan
| Company name | Amount recovered or transferred back | Recovery method |
(3) The top five accounts receivable according to the ending balance collected by the arrears
Unit: yuan
| Company name | Closing balance of accounts receivable | Proportion of total closing balance of accounts receivable | Bad debt preparation period ending balance |
| Dongfang Precision（Netherland） | 46,224,476.33 | 30.06% | |
| Dongfang Precision（HK） | 39,018,627.72 | 25.38% | |
| SARL COMPEX IMPORT EXPORT | 13,406,498.41 | 8.72% | 134,064.98 |
| Fosber Asia | 9,859,563.34 | 6.41% | |
| Italian EDF | 5,012,252.35 | 3.26% | |
| Total | 113,521,418.15 | 73.83% |
2. Other receivables
unit: yuan
| Item | Ending balance | Opening balance |
| Interest receivable | 0 | 7,684,542.37 |
| Other receivables | 36,670,496.12 | 100,940,213.04 |
| Total | 36,670,496.12 | 108,624,755.41 |
(1) Interest receivable
1) Classification of interest receivable
Unit: yuan
| Item | Ending balance | Opening balance |
| Time deposit | 0.00 | 7,090,021.82 |
| Financial product | 0.00 | 594,520.55 |
| Total | 0.00 | 7,684,542.37 |
(2) Other receivables
1) Other receivables are classified according to the nature of the money
Unit: yuan
| Nature of payment | Book balance at the end of the period | Book balance at the beginning of the period |
| Current payment | 1,390,770.29 | 33,867.93 |
| Security deposit | 1,522,182.68 | 1,849,612.81 |
| Export tax rebate | 1,051,258.91 | 4,941,630.64 |
| Performance compensation | 8,200,000.00 | 8,500,000.00 |
| Prepaid service charge | 333,362.86 | |
| Internal related parties | 24,488,538.25 | 81,962,968.60 |
| Employee loans, reserves | 843,783.19 | |
| Other | 1,827,886.33 | 4,924,078.71 |
| Total | 39,657,782.51 | 102,212,158.69 |
2) Provision for bad debts
Unit: yuan
| Provision for bad debts | Phase 1 | Phase 2 | Phase 3 | Total |
| Expected credit loss over the next 12 months | Expected credit loss over the entire lifetime (no credit impairment occurs) | Expected credit loss over the entire lifetime (credit impairment has occurred) |
| Balance of January 1, 2019 | 1,271,945.65 | 1,271,945.65 | ||
| The balance of January 1, 2019 is in the current period. | —— | —— | —— | —— |
| -- moving on to the second stage | -850,000.00 | 850,000.00 | ||
| Current provision | 105,340.74 | 1,610,000.00 | 1,715,340.74 | |
| Other change | 527,286.39 | 2,460,000.00 | 2,987,286.39 |
Changes in the book balance of significant changes in the loss provision in the current period
□ Applicable √ Not applicable
Disclosure by age
Unit: yuan
| Account age | Book balance |
| Within 1 year (including 1 year) | 28,833,971.68 |
| 1 to 2 years | 1,518,890.62 |
| 2 to 3 years | 8,640,379.72 |
| More than 3 years | 664,540.49 |
| 3 to 4 years | 414,540.49 |
| 4 to 5 years | 250,000.00 |
| more than 5 years | 39,657,782.51 |
3) Bad debt provision in the current period of withdrawal, recovery or reversal
Provision for bad debts in the current period:
Unit: yuan
| Category | Opening balance | Amount of changes in the current period | Ending balance | |||
| Accrual | Take back or turn back | Write off | Other | |||
| Provision for bad debts by single item | 850,000.00 | 1,610,000.00 | 2,460,000.00 | |||
| Provision for bad debts by combination | 421,945.65 | 105,340.74 | 527,286.39 | |||
| Total | 1,271,945.65 | 1,715,340.74 | 2,987,286.39 | |||
4) Other receivables in the top five of the ending balance collected by the arrears
Unit: yuan
| Company name | Nature of payment | Ending balance | Account age | Proportion of total closing balance of other receivables | Bad debt preparation period ending balance |
| Dongfang Precision（Netherland） | Current payment | 11,724,915.62 | Within 1 year | 29.57% | |
| Fosber Asia | Current payment | 11,547,630.94 | Within 1 year | 29.12% | |
| Guangdong Jiateng Robot Automation Co., Ltd. shareholders Chen You, Chen Hongbo, Fu Zhiyun, Huang Pingping | Performance compensation | 8,200,000.00 | 2-3years | 20.68% | 2,460,000.00 |
| Export tax receivable | Export tax receivable | 1,051,258.91 | Within 1 year | 2.65% | |
| Hisense South Co., Ltd. | deposit | 768,814.00 | 1-2years | 1.94% | 38,440.70 |
| Total | -- | 33,292,619.47 | -- | 83.96% | 2,498,440.70 |
3. Long-term equity investment
Unit: yuan
| Item | Ending balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Investment in subsidiaries | 430,846,359.90 | 61,855,054.35 | 368,991,305.55 | 5,182,547,200.13 | 3,910,016,918.70 | 1,272,530,281.43 |
| Investment in joint ventures and combined ventures | 70,647,476.45 | 70,647,476.45 | 67,094,627.82 | 67,094,627.82 | ||
| Total | 501,493,836.35 | 61,855,054.35 | 439,638,782.00 | 5,249,641,827.95 | 3,910,016,918.70 | 1,339,624,909.25 |
(1) Investment in subsidiaries
Unit: yuan
| Invested unit | Opening balance (book value) | Changes in the current period | Ending balance (book value) | Impairment preparation period ending balance | |||
| Additional investment | Reduce investment | Provision for impairment | Other | ||||
| Dongfang Precision（HK） | 1,856,010.00 | 1,856,010.00 | |||||
| Dongfang Precision（Netherland） | 307,666.80 | 307,666.80 | |||||
| Fosber Asia | 16,738,279.20 | 16,738,279.20 | |||||
| Shunyi Investment | 305,584,828.17 | 305,584,828.17 | |||||
| Parsun Power | 44,504,521.38 | 44,504,521.38 | 61,855,054.35 | ||||
| Guangdong Frando | 882,444.00 | 882,444.00 | |||||
| Beijing Pride | 902,656,531.88 | 902,656,531.88 | |||||
| Total | 1,272,530,281.43 | 903,538,975.88 | 368,991,305.55 | 61,855,054.35 | |||
(2) Investment in associates and joint ventures
Unit: yuan
| Invested unit | Opening balance (book value) | Changes in the current period | Ending balance (book value) | Impairment preparation | |||||||
| Additional investment | Reduce investment | Investment gains and losses recognized under the | Other comprehensive income adjustment | Other equity changes | Declare cash dividends or profits | Provision fo | Other | ||||
| equity method | r impairment | period ending balance | |||||||||
| 1. Joint venture | |||||||||||
| Yinglian Digital | 9,761,430.71 | 1,060,193.48 | -310,888.72 | 10,510,735.47 | |||||||
| Total | 9,761,430.71 | 1,060,193.48 | -310,888.72 | 10,510,735.47 | |||||||
| 2.Associates | |||||||||||
| Jiateng robot | 57,333,197.11 | 2,803,543.87 | 60,136,740.98 | ||||||||
| Subtotal | 57,333,197.11 | 2,803,543.87 | 60,136,740.98 | ||||||||
| Total | 67,094,627.82 | 1,060,193.48 | 2,492,655.15 | 70,647,476.45 | |||||||
4. Operating income and operating costs
Unit: yuan
| Item | Current amount | Amount in the previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 439,412,077.02 | 262,077,447.56 | 426,299,315.81 | 281,017,958.82 |
| Other business | 15,346,182.28 | 15,657.61 | 9,414,952.84 | 37,052.17 |
| Total | 454,758,259.30 | 262,093,105.17 | 435,714,268.65 | 281,055,010.99 |
Whether the new income standard has been implemented
□ Yes √ No
5. Investment income
Unit: yuan
| Item | Current amount | Amount in the previous period |
| Cost method of long-term equity investment income | 60,000,000.00 | 12,000,000.00 |
| Long-term equity investment income calculated by equity method | 2,492,655.15 | 1,071,203.98 |
| Disposal of investment income from long-term equity investment | 596,461,024.12 | 4.33 |
| Bank wealth management product income | 25,531,992.66 | 23,633,070.58 |
| Performance compensation | 1,447,054,285.27 | |
| Total | 2,131,539,957.20 | 36,704,278.89 |
XVIII. Supplementary Information
1. Breakdown of current non-recurring gains and losses
√ Applicable □ Not applicable
Unit: yuan
| Item | Amount | Explanation |
| Non-current asset disposal gains and losses | -95,745,648.97 | Mainly to deal with the profit and loss of 100% equity of Pride |
| Government subsidies included in the current profit and loss (closely related to the business of the enterprise, except for government subsidies that are fixed or quantified according to the national unified standard) | 22,854,061.39 | For details, please refer to notes VII (46) and VII (52) of the financial report |
| In addition to the effective hedging business related to the company's normal business operations, holding transactional financial assets, derivative financial assets, transactional financial liabilities, fair value changes in derivative financial liabilities, and disposal of transactional financial assets and derivative financial Investment income from assets, trading financial liabilities, derivative financial liabilities and other debt investments | 1,473,114,508.83 | Mainly for the performance compensation of Pride's original shareholders and bank wealth management income |
| Other non-operating income and expenses other than the above | 9,007,522.57 | |
| Minus: the amount of income tax impact | 9,881,032.32 | |
| Effect of minority shareholders' equity | 46,476.86 | |
| Total | 1,399,302,934.64 | -- |
For the company's non-recurring profit and loss items defined by the "Announcement of Information Disclosureby Companies Offering Securities to the Public No. 1-Non-recurring Gains and Losses" and the "AnnouncementNo. 1 of Information Disclosure by Companies Offering Securities to the Public" —Non-recurring gains andlosses ”The non-recurring gains and losses items listed in the report are defined as recurring gains and losses, andthe reasons should be explained.
□ Applicable √ Not applicable
2. Return on net assets and earnings per share
| Profit during the reporting period | Weighted average return on net assets | Earnings per share | |
| Basic earnings per share (yuan / share) | Diluted earnings per share (yuan / share) | ||
| Net profit attributable to common shareholders of the company | 36.87% | 1.01 | 1.01 |
| Net profit attributable to ordinary shareholders of the company after deducting non-recurring gains and losses | 8.80% | 0.24 | 0.24 |
Section 13 catalogue of documents for reference.
1 Financial statements signed and sealed by the legal representative, chief in charge of accounting work and head ofaccounting institution.
2. The original audit report containing the seal of the accounting firm and the signature and seal of the certified publicaccountant.3 The original copies of all company documents and announcements publicly disclosed in the newspapers designated bythe CSRC during the reporting period.
4. The text of the 2019 annual report of the company containing the signature of the legal representative.
5. The location of the above documents for reference: the securities department of the company.