Shenzhen Topband Co., Ltd.
Annual Report 2020
March 2021
Section I Important Notes, Contents and InterpretationThe Board of Directors, the Board of Supervisors and directors, supervisors and seniorexecutives of the Company hereby assure that the content set out in the Report is true, accurate andcomplete, and free from any false from any false record, misleading representation or materialomission, and are individually and collectively responsible for the content set out therein.Wu Yongqiang, the principal of the Company, Xiang Wei, accounting head, and Xiang Wei,accounting department head (the person in charge of accounting department) hereby certify that thefinancial report in the herein annual report is true, accurate and complete.All directors have attended the Board meeting at which the Report was scrutinized.There is no significant risk affecting the financial condition and sustainable profitability of theCompany, but there may be risks of declining market demand, increased competition in the industry,raw material price fluctuations, changes in export tax rebate policy and foreign exchange ratefluctuations due to the macro environment home and abroad. For detailed risk warnings, pleaserefer to the “Possible Risk Factors” in Section IV of the Report and investors are advised to payattention to investment risks.
The profit distribution plan approved by the Board of Directors is as follows: based on1,120,377,889 shares (excluding 14,838,920 treasury shares that have been repurchased), a cashdividend of 0.5 yuan (tax included) for every 10 shares should be distributed to all shareholders,with 0 bonus shares and no capital increase by way of transfer of reserved funds. If the total sharecapital of the Company changed due to the exercise of stock options and other reasons before theimplementation of the distribution plan, the total amount of distribution should be adjustedaccordingly in the principle that the distribution proportion remains unchanged. Investors areadvised to pay attention to the risk that the total distribution may be adjusted due to changes in totalshare capital.This Report has been prepared in Chinese and translated into English. Should there be anydiscrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
Chairman’s Address
Dear shareholders and all friends who are concerned about Topband,
In 2020, the Company seized the opportunity of intelligent development, overcame the adverseimpact of the external environment, and achieved good performance growth. In 2020, the salesrevenue reached 5,560,183,000 yuan, with a year-on-year growth of 35.65%; the net profitattributable to the parent company reached 533,516,800 yuan, with a year-on-year growth of
61.27%.
Looking back to 2020, the sudden COVID-19 epidemic had a broad and far-reaching impacton the world economy and the Chinese economy, bringing new challenges to the intelligent controlindustry. In order to cope with the challenges, based on the needs of customers, the Companysuccessively implemented a variety of measures, took the lead in promoting the resumption of workand production, and overcame the difficulties with customers. Under the sincere solidarity of all theTopband people, we turned the crisis into opportunity and successfully completed the growth target.
Focus on strategy to achieve the five-year "butterfly change" of Topband
In the past five years, Topband's operating income has grown rapidly at a compound growthrate of 30%+, and it has become a "hidden champion" in the field of global intelligent control. Asthe saying goes, "Three years of development depends on opportunity, and ten years ofdevelopment depends on strategy." Strategy is the key to the success or failure of an enterprise. In2016, when making the vision plan for the next ten years, Topband clearly put forward the medium-and long-term development goal by 2025. In order to achieve the strategic objectives, Topbandformulated a detailed development plan based on the industry development prospects and its owncore capabilities, focusing on the intelligent control track, anchoring four application fields of homeappliances, tools, lithium batteries and industrial control. In terms of customers, Topband focusedon top customers, stuck to the "customer-centered" value concept, and continued to create value for
customers. In terms of products, Topband practiced the concept of innovative development, builttechnical competitiveness through high R&D investment, and vigorously developed a productplatform to build product competitiveness. In terms of internal operation, Topband started from theintroduction of the IPD (Integrated Product Development) process, promoted process reform andorganizational reform successively, and built the BG-BU (Business Group - Business Unit)organization with the mission of capturing opportunities. Looking back to the past five years,Topband focused on strategy, practiced skills, and completed "butterfly change". Now Topband is ahigh-tech innovation enterprise with clear strategy, leading technology, efficient operation andabundant talents.
Firmly stick to the strategic direction to become the "leader" of intelligent controlThe greatest value of the enterprise is to promote the progress of human society and industry.Since its inception, Topband has been committed to the intelligent control industry, and has beendetermined to become the leader of the global intelligent control industry, so as to innovate inintelligent control technology, create value for customers and benefit everyone.The Company will continue to focus on the core objective of scale growth to enhance itsleading position among global intelligent control solution providers. The Company will give fullplay to the core technology advantages of "three electrics and one network", and focus on the fourmain fields of "home appliances, tools, lithium batteries and industry", so as to provide one-stopintelligent control solutions for global brand customers. In terms of home appliance business,Topband is committed to becoming the leader of intelligent control solutions for home appliances.In terms of tool business, the Company is committed to becoming the world's leading supplier ofintelligent control solutions in the tool industry. In terms of lithium battery business, the Companyis committed to becoming the industry leader in customized lithium batteries and BMS (batterymanagement system). In terms of industrial business, the Company will strive to rank among thefirst echelon of the domestic industrial control industry.
The Company will continue to implement the four strategies of "customer intimacy, innovationdriving, smart operation and organizational evolution". In terms of customers, the Company will
strengthen the strategy of customer intimacy, and vigorously develop three types of top customers,namely big customers, strategic customers and sci-tech innovation customers, and improve themarket share. In terms of innovation, the Company will deepen the innovation-driven strategy,strengthen the construction of technological innovation and product platforms, and realize thebusiness growth and upgrading driven by technological innovation. In terms of operation, theCompany will comprehensively promote the smart operation strategy, build cost advantagesthrough "three reductions and one optimization", accelerate digital transformation, and improveend-to-end efficiency. In terms of organizational construction, the Company will continue topromote the organizational evolution strategy, strengthen the construction of the talent team, andbuild a customer-centered process organization.
Deeply develop intelligentization to mine the "gold mine" of intelligent controlThe future will be an intelligent society, and intelligentization will be a long-term, lasting andfar-reaching change having a wide influence, and will deeply affect modern life, and changeproduct forms at the same time. Intelligent control is the core technology of the future intelligentsociety and the brain and nervous system of intelligent equipment, and will become the necessity ofthe intelligent society. We think that the intelligent control industry is a big industry without aceiling and the next gold mine of the intelligent society. Intelligent controllers aretechnology-intensive products including algorithm and hardware. With the continuous and in-depthdevelopment of intelligentization, the rapid iteration of technology will improve intelligentcontroller ODM (original design manufacturer) customization demands, and brand owners'requirements for technical innovation ability will become increasingly higher. Relying on 25 yearsof continued R&D investment, Topband has core competitiveness in terms of technology andproduct innovation.
According to public data, the scale of the global intelligent controller market exceeds onetrillion yuan. With the rapid development of AloT (Intelligent Internet of Things), the boundary ofthe market will continue to expand, and the industry will have broad prospects for future growth.The intelligent, healthy and high-end home appliance industry is in a state of continuous
acceleration, and the ODM demand for home appliance intelligent controllers keeps a rapid growthtrend; the "oil to electricity" and "cordless" trends in the tool industry are also accelerating, and thedemands for intelligent controllers, motors and battery packs continue to rise; the markets of energystorage and two- and three-wheeled vehicle power change in the lithium battery application industryare developing rapidly; the double opportunity of "digital transformation" and "domesticsubstitution" in the industrial control industry is coming. The Company will firmly seize theindustry development opportunities, continue to deepen the intelligent control industry, lead theforward development of the industry, and become a global leading and honored provider ofintelligent control technology.In 2021, we will actively respond to potential difficulties such as tight supply of raw materials,increased exchange rate fluctuations and labor shortage, and quickly formulate measures to addressthem. At the same time, the Company will focus on the target, seize the opportunity, operateefficiently, and achieve good performance as a return for shareholders and the community.Entrepreneurship is the most valuable part of an enterprise, and the Company is happy toprovide opportunities so that every Topband person can realize their own value. I hope thatTopband will become a place where entrepreneurs and entrepreneurship are nurtured. Lookingforward to the future, the pioneering, enterprising, diligent and innovative Topband people willcontinue to adhere to the customer-centered concept guided by entrepreneurship, and continue tocreate value for customers. Let's go forward hand in hand, contribute our strength to the intelligentsociety, and create an intelligent and bright future together.Thank you.
In the past 25 years, no matter how the global macro-environment changes, Topband hasalways adhered to the strategic development direction. With the joint efforts of the management andall the colleagues, Topband has achieved leapfrog development. We hereby sincerely thank ourcustomers, investors and partners for their long-term support to Topband.
Chairman of Shenzhen Topband Co., Ltd.
March 9, 2021
Contents
Section I Important Notes, Contents and Definitions ...... 2
Section II Company Profile and Main Financial Indicators ...... 10
Section III Business Summary of the Company ...... 15
Section IV Business Situation Discussion and Analysis ...... 24
Section V Important Matters ...... 55
Section VI Share Change and Shareholders ...... 75
Section VII Information on Preferred Shares ...... 83
Section VIII Information on Convertible Corporate Bonds ...... 84
Section IX Information on Directors, Supervisors, Senior Executives and Employees ...... 86
Section X Corporate Governance ...... 97
Section XI Information Related to Corporate Bonds ...... 105
Section XII Financial Reports ...... 106
Section XIII Catalogue of Documents for Reference ...... 279
Section I Definitions
| Term | Definitions |
| Company, the Company, Topband shares | Shenzhen Topband Co., Ltd. |
| Yuan, 10,000 yuan | Yuan, 10,000 yuan |
| CSRC | China Securities Regulatory Commission |
| Exchange | Shenzhen Stock Exchange |
| Reporting period | January 1, 2020 to December 31, 2020 |
| Articles of Association | Articles of Association of Shenzhen Topband Co., Ltd. |
| Huizhou Topband | Huizhou Topband Electrical Technology Co., Ltd. |
| YAKO Automation | Shenzhen YAKO Automation Technology Co., Ltd. |
| HCD | Shenzhen HCD Control System Co., Ltd. |
| Topband Software | Shenzhen Topband Software Technology Co., Ltd. |
| ORVIBO | Shenzhen ORVIBO Technology Co., Ltd. |
| Chongqing Yiyuan | Chongqing Topband Industrial Co., Ltd. |
| Ningbo Topband | Ningbo Topband Intelligent Control Co., Ltd. |
| Meanstone Intelligent | Shenzhen Meanstone Intelligent Technology Co., Ltd. |
| HANSC Intelligent | Shenzhen HANSC Intelligent Technology Co., Ltd. |
| IOT | Internet of Things |
| ICT | Information Communications Technology |
| T-SMART | Topband One-Stop Smart Home Solution |
| AI | Artificial Intelligence |
| AWE | Appliance & Electronics World Expo |
| BLDC Motor | Brushless DC Motor |
| BG、BU | Business Group 、Business Unit |
| IPD | Integrated Product Development |
| ISC | Integrated Supply Chain |
Section II Company Profile and Main Financial IndicatorsI. Company information
| Stock abbreviation | Topband | Stock code | 002139 |
| Listed stock exchange | Shenzhen Stock Exchange | ||
| Chinese name of the Company | Shenzhen Topband Co., Ltd. | ||
| Chinese abbreviation of the Company | Topband | ||
| Name of the Company in foreign language (if any) | Shenzhen Topband Co., Ltd | ||
| Legal representative of the Company | Wu Yongqiang | ||
| Registered address | Room 413, Block B, Research Institute of Tsinghua University, High-Tech Industrial Park, Yuehai Street, Nanshan District, Shenzhen | ||
| Postal code of registered address | 518057 | ||
| Office address | Topband Industrial Park, Keji Second Road, Shiyan Subdistrict, Baoan District, Shenzhen | ||
| Postal code of office address | 518108 | ||
| Company website | http://www.topband.com.cn | ||
| wenzh@topband.com.cn | |||
II. Contact person and contact information
| Secretary of the Board of Directors | Representative of securities affairs | |
| Name | Wen Zhaohui | Yang Qiaoqiao |
| Address | Topband Industrial Park, Tangtou Avenue, Shiyan Town, Baoan District, Shenzhen | Topband Industrial Park, Tangtou Avenue, Shiyan Town, Baoan District, Shenzhen |
| Tel | 0755-26957035 | 0755-26957035 |
| Fax | 0755-26957440 | 0755-26957440 |
| wenzh@topband.com.cn | yangqq@topband.com.cn |
III. Information disclosure and storage place
| Name of information disclosure media selected by the Company | Securities Times |
| Website designated by the CSRC where the annual report is posted | http://www.cninfo.com.cn |
| Place where the Company’s annual report is available | Office of the Board of Directors of the Company |
IV. Changes in registration
| Organization code | 91440300192413773Q |
| Changes in the main business of the Company since its listing (if any) | No change |
| Previous changes in controlling shareholders (if any) | No change |
V. Other relevant information
Accounting firm engaged by the Company
| Name of accounting firm | BAKER TILLY International Accounting Firm (Special General Partnership) |
| Office address of accounting firm | Areas A-1 and A-5, Building 68, No. 19 Chegongzhuang West Road, Haidian District, Beijing City |
| Name of undersigned accountant | Chen Zhigang, Zhao Yang |
Sponsor engaged by the Company to perform continuous supervision duties during the reporting period
√applicable □ not applicable
| Name of Sponsor | Office address of Sponsor | Name of Sponsor’s representative | Continuous supervision period |
| China Securities Co., Ltd. | Room 2203, North Tower, Shanghai Securities Building, No. 528 Pudong South Road, Shanghai | Yu Kangze, Xu Chao | March 7, 2019 – December 31, 2020 |
Financial consultant engaged by the Company to perform continuous supervision duties during the reportingperiod
□ applicable √ not applicable
VI. Main accounting data and financial indicatorsWhether the Company is required to retroactively adjust or restate the accounting data of previous years
□ Yes √ No
| 2020 | 2019 | Increase or decrease in the current year over the previous year | 2018 | |
| Operating income (yuan) | 5,560,182,998.21 | 4,098,855,380.70 | 35.65% | 3,406,697,494.04 |
| Net profit attributable to shareholders of listed companies (yuan) | 533,516,814.04 | 330,827,437.00 | 61.27% | 222,186,603.82 |
| Net profit attributable to shareholders of listed company after deducting non-recurring profit and loss (yuan) | 382,743,934.45 | 198,463,874.89 | 92.85% | 209,372,351.36 |
| Net cash flow from operating activities (yuan) | 647,900,708.38 | 404,477,700.20 | 60.18% | 240,280,589.33 |
| Basic earnings per share (yuan / share) | 0.51 | 0.33 | 54.55% | 0.22 |
| Diluted earnings per share (yuan / share) | 0.51 | 0.32 | 59.38% | 0.22 |
| Weighted average return on net assets | 19.04% | 13.92% | 5.12 % | 10.95% |
| End of 2020 | End of 2019 | Increase or decrease at the end of the current year compared with the end of the previous year | End of 2018 | |
| Total assets (yuan) | 6,808,735,037.28 | 5,121,650,811.96 | 32.94% | 3,949,037,185.87 |
| Net assets attributable to shareholders of listed companies (yuan) | 3,463,681,980.54 | 2,510,384,699.83 | 37.97% | 2,134,408,674.87 |
The lower of the Company’s net profit before or after deduction of non-recurring profit and loss for the last threefiscal years was negative, and the audit report for the latest year showed that there was uncertainty about theCompany’s ability to continue as a going concern.
□ Yes √ No
The lower of the net profit before or after deduction of non-recurring profit and loss was negative
□ Yes √ No
VII. Differences in accounting data under domestic and foreign accounting standards
1. Differences in net profit and net assets between financial reports disclosed in accordance withInternational Accounting Standards and those disclosed in accordance with PRC GAAP simultaneously
□ applicable √ not applicable
There is no difference in net profit and net assets between financial reports disclosed in accordance withInternational Accounting Standards and those disclosed in accordance with PRC GAAP during the reportingperiod.
2. Differences in net profit and net assets between financial reports disclosed in accordance with foreignaccounting standards and those disclosed in accordance with PRC GAAP simultaneously
□ applicable √ not applicable
There is no difference in net profit and net assets between financial reports disclosed in accordance with foreignaccounting standards and those disclosed in accordance with PRC GAAP during the reporting period.
VIII. Main financial indicators by quarters
Unit: Yuan
| First quarter | Second quarter | Third quarter | Fourth quarter | |
| Operating income | 770,336,210.53 | 1,227,091,690.17 | 1,599,688,059.70 | 1,963,067,037.81 |
| Net profit attributable to shareholders of listed company | 63,018,799.12 | 145,894,800.04 | 153,898,165.45 | 170,705,049.43 |
| Net profit attributable to shareholders of listed company after deducting non-recurring profit and loss | 24,432,598.30 | 108,984,398.74 | 148,549,082.51 | 100,777,854.90 |
| Net cash flow from operating activities | 27,748,613.21 | 91,387,639.98 | 48,537,398.94 | 480,227,056.25 |
Whether the above financial indicators or their sums are materially different from the relevant financial indicatorsin the disclosed quarterly and semi-annual reports of the Company
□ Yes √ No
IX. Items and amount of non-recurring profit and loss
√applicable □ not applicable
Unit: Yuan
| Items | Amount in 2020 | Amount in 2019 | Amount in 2018 | Description |
| Profit and loss on disposal of non-current assets (including the write-off portion of the provision for asset impairment) | -2,162,674.03 | -2,689,991.66 | -965,444.97 | |
| Government subsidies recognized in current profits and losses (except those closely related to the business of the enterprise and enjoyed in a fixed or quantitative amount according to the national uniform standard) | 27,326,933.85 | 40,716,240.12 | 20,004,341.88 | |
| Profit and loss from changes in fair value of trading financial assets, derivative financial assets, trading financial liabilities and derivative financial liabilities, and investment income from disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities and other creditor's rights investments, except for effective hedging business related to the normal business of the Company | 147,775,030.77 | 109,833,096.66 | -6,510,422.76 | |
| Other non-operating income and expenses other than those mentioned above | 43,836.85 | 4,385,194.03 | 50,128.06 | |
| Other profit and loss items that meet the definition of non-recurring profit and loss | 5,602,702.63 | 4,847,353.13 | 3,961,950.63 | Financing income |
| Less: amount affected by income tax | 27,106,631.22 | 23,696,511.92 | 2,562,302.92 | |
| Amount affected by minority shareholder’s interest (after tax) | 706,319.26 | 1,031,818.25 | 1,163,997.46 |
| Total | 150,772,879.59 | 132,363,562.11 | 12,814,252.46 | -- |
For the items of non-recurring profit and loss defined by the Company in accordance with the definition ofExplanatory Announcement No. 1 on Information Disclosure for Companies Offering Securities to Public -Non-Recurring Profits and Losses, the reasons why the items of non-recurring profit and loss listed asnon-recurring in Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Securitiesto Public - Non-Recurring Profits and Losses to be defined as recurring profit and loss should be explained.
□ applicable √ not applicable
During the reporting period, the items of non-recurring profit and loss defined and listed in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Securities to Public - Non-RecurringProfits and Losses are not defined as the recurring profit and loss.
Section III Summary of the Company’s BusinessI. Main businesses during the reporting period
(1) Major business scope
The Company mainly engages in R&D, production and sales of intelligent control system solutions, i.e.,providing diversified customized solutions for four industries of home appliances, tools, industry and new energy,with the “three electrics and one network” technology of electric control, motor, battery and IoT platform as itscore. The Company is a global leading provider of intelligent control technology, a pioneer of intelligent controlsolutions for the home appliances and tool industries, and an innovator in intelligent control solutions for theindustry and lithium battery industry.
1. Core technology of the Company: “three electrics and one network”: electric control, motor, batterytechnology and IoT platform.
1.1 Electric control technology. The electric control technology is a technology to achieve intelligentcontrol with the microcomputer as the core, including: sensing technology, power electronics, signal processingtechnology, communication technology, interactive technology, power and energy conversion technology,electromagnetic compatibility and so on. The Company has established hundreds of electric control technologyplatforms, which completely cover the demand range of products in four major industries.
1.2 Motor technology. The motor technology is a technology that converts electrical energy into kineticenergy. The Company has built dozens of advanced motor technology platforms around various types of motorssuch as brushless DC motors (BLDC), stepper motors, and servo motors. Among them, the Company takes the leadin the tool motor and motion control industries. Motion control refers to the real-time control of the position, speedand direction of mechanical moving parts, so that such mechanical moving parts move in accordance with theexpected trajectory and the specified motion parameters. The motion control system is generally composed ofman-machine interaction interface, controller, driver, motor and other components, which are the core componentsof intelligent manufacturing equipment, and is the premise and basis for the realization of intelligent manufacturing.
1.3 Battery technology. The battery technology is a technology for energy storage and management. TheCompany has complete design, development customization and production capacities from cell technology (CELL),battery management technology (BMS) to battery pack (PACK).
1.4 IoT platform. The IoT platform is a technology that integrates perception layer, connection layer andapplication layer, mainly including connection management, device management and application. The Companyhas formed a complete technical capability from IoT module, intelligent terminal to APP, and PaaS IoT platform,and has developed solutions for more than ten business scenarios.
2. Main products of the Company: customized system solutions to “home appliances, tools, and industryand lithium battery” industries
2.1 Intelligent control of home appliances
The Company provides brand customers in the home appliance industry with customized product concepts,design, development, manufacturing and delivery services, including the master control, power control, motordrive and control and display control of home appliances.
2.2 Tool intelligent control
The tool industry mainly includes electric tools, garden tools and other professional tools. The Companyprovides its customers with customized product concepts, design, development, manufacturing and deliveryservices. The business scope covers electronic controls, motors and batteries, and product forms includecontrollers, modules and complete machines.
2.3 Lithium battery and its intelligent control
The Company mainly provides products and system solutions, including battery cells, battery managementand control, battery packs and charging cabinets for communication base station energy storage, home energy
storage, power batteries for two- or three- wheeled vehicles and other special vehicles, mobile charging power andIoT.
2.4 Industrial intelligent control
In the industrial control industry, the Company’s main business includes research and development,production, sales of step and servo drives and control products, with focus on special industrial intelligent controlsolutions. The Company mainly provides controllers, drivers and motors for downstream automation equipmentcustomers, which are widely used in 3C electronics, robotics, medical equipment, semiconductor equipment, textilemachinery, packaging machinery, etc. The Company is committed to helping automation equipment manufacturersimprove equipment design performance, reduce equipment manufacturing costs, and speed up the development ofnew equipment.
(2) Industry development prospect, competition situation and industry status
The future will be an intelligent society, and intelligentization will be a long-term, lasting and far-reachingchange having a wide influence, and will deeply affect modern life, and change product forms at the same time.Intelligent control is the core technology of the future intelligent society and the brain and nervous system ofintelligent equipment, and will become the necessity of the intelligent society. We think that the intelligent controlindustry is a big industry without a ceiling and the next gold mine of the intelligent society. There are currentlythree trends of shift, concentration and growth in the industry:
1. There is an obvious trend that international market is shifting to China. The shift is accelerated byindustrial clusters and the advantages of the engineer bonus in China as products become increasingly complex,individualized and differentiated, requiring fast R&D and product delivery, as well as reliable and consistentquality.
2. Domestic shares are concentrated in the top enterprises. The growth rate and order concentration of topenterprises outperformed other peers in the last three years.
3. New technology and application development has created space for growth. The expansion of industryapplications and the upgrades of technology have accelerated the process of human intelligence, and newtechnologies such as 5G, IoT, and AI are driving the development of intelligent society, providing the intelligentcontrol industry a historic opportunity.
As a global leading provider of intelligent control technology, the Company focuses on the field of intelligent
control, adheres to the concept of value creation, and constantly strengthens its technical capabilities, and hasformed a comprehensive technology system of “three electrics and one network” for four industries of homeappliances, tools, lithium battery application and industry, providing intelligent control solutions for downstreammachine manufacturers. Intelligent controllers are technology-intensive products including algorithm andhardware. With the continuous and in-depth development of intelligentization, the rapid iteration of technologywill improve intelligent controller ODM (original design manufacturer) customization demands, and brandowners' requirements for technical innovation ability will become increasingly higher. Relying on 25 years ofcontinued R&D investment, the Company has core competitiveness in terms of technology and productinnovation, and it has become a leader in intelligent control solutions for the home appliance and tool industries,and an innovator in the industry and lithium battery application industry.
1. Home appliance industry
The Company is the pioneer and leader in the home appliance control segment in China. In recent years, theglobal home appliances show a trend of accelerated concentration of brands, and the “head effect” is more and moreobvious; on the other hand, a trend of increasingly mature of the IoT technology, accelerated infrastructureconstruction, and accelerated “intelligent” penetration rate can be found. As the total growth of the global homeappliance market is slowing down, in order to gain stronger market competitiveness, major home appliance brandowners are putting forward higher and more comprehensive requirements for upstream solution providers, such asdifferentiated and innovative solutions, high-quality and low-cost products, and stable and reliable delivery, etc. Inaddition, international big customers require upstream with multinational localization service capabilities becauseof increased international trade protectionism.In order to seize the opportunities mentioned above, the Company has adopted a multi-dimensionalstructured change strategy for customer structure, product structure, cost structure and operationstructure to achieve sustained and stable high growth in performance.
1.1 Customer structure: The Company has made some adjustments and optimization on the basis of the“spindle shaped” customer structure, increased the development of global integrated customers (big customers)and actively cultivated innovative customers (sci-tech innovation customers) on the basis of deep cultivation oftop customers (strategic customers) in segments.
1.2 Product structure: The Company has increased its investment in product platform and IoT platform,adopted the strategy of “technology platform + product platform + customized solutions”, systematically sorted
out hundreds of electric control technology platforms and home appliance product platforms, and increased theefforts of platform reuse to maintain the agility and efficiency of innovation while reducing the marginal cost ofcustomized R&D. The Company can now quickly provide customers with customized services in differentapplication scenarios, gradually playing the pooling effect of the platform, while ensuring the innovation of thesolutions. In addition, the IoT platform of the Company can offer customers with one-stop, scenario-based andcustomizable services, and has now accumulated nearly 100 projects, some of which have already entered the massproduction stage.
1.3 Cost structure: On the premise of maintaining the flexibility of the original procurement mode of thebusiness unit, a company-level strategic procurement department was established to increase the control of keycategories and general categories, and the advantages of batch procurement were given full play. At the same time,on the basis of ensuring quality and delivery reliability, the Company increased the efforts of cost reduction ofsolution design and material procurement by using batch production to ensure that customers are provided withhigh-quality and low-cost products to enhance the overall competitiveness in the customer end.
1.4 Operation structure: In order to meet the demand for localized and agile services for internationalizedbig customers, the Company has accelerated the construction of domestic operation bases in Yangtze River Delta(Ningbo), India (Pune) and Vietnam (Dong Nai).
2. Tool industry
The tool industry mainly includes electric tools, gardening tools and other professional tools. The user marketis mainly concentrated in Europe, the United States and other developed countries and regions, with high brandconcentration and high requirements for quality. In recent years, the tool industry has ushered in the opportunity of“oil to electricity” and “cordless” technology upgrading. Many products powered by fuel before have beengradually powered by lithium batteries instead. The battery, electric control and electric of the products motor alsoneed to be upgraded. At the same time, some domestic traditional OEMs starts to conduct industrial upgrading andbranding operations, and gradually shows up prominently. In addition, since the tools are mainly exported todeveloped regions such as Europe and the United States, and they are greatly affected by trade policies and tariffs,the Company is also required to have overseas delivery capabilities.
As the leader of tool control industry in China, the Company has the unique competitive advantage of “electriccontrol + motor + battery”. In terms of customer strategy, the Company has adopted the strategy of “internationalbig customers as the main, regional customers as a supplement”. The customers can be divided into American,
European, Japanese customers and domestic customers. The Company has cooperated with most of the topcustomers in the industry. In terms of industry chain, the Company has a unique technology combination of “electriccontrol + motor + battery + IoT platform”, providing diversified services from “controller + motor + battery pack”components to “module” and “whole machine”. In terms of product structure, the Company has focused on thedevelopment and promotion of “oil to electricity” and “cordless” solutions in the mode of “technology platform +product platform + customized solutions”, and has formed a deep cooperation relationship with customers. In termsof regional operation, the Company has accelerated the construction and operation of overseas bases such asVietnam, and actively cooperated with the departments to meet the needs for international and domesticmulti-location deliveries of overseas customers.
3. Lithium battery application industry
In the context of global energy revolution, new energy represented by lithium battery is rapidly replacingtraditional fossil energy and lead-acid batteries, etc. The lithium battery industry is divided into general andspecialized segments. The general segment mainly refers to new energy vehicle batteries, standard batteries, etc.Due to continuous progress of technology, increased competition and economies of scale, the cost of lithiumbatteries in the general segment continues to decrease, with serious homogenization and fierce price competition.The specialized segment is for a large number of customized batteries for various industries, such ascommunications, power conversion, IoT, special vehicles and ships. Although the single market size of thespecialized lithium battery is relatively small, but the added value is also relatively high. The prospect of lithiumbattery for replacing the original fuel power or lead-acid battery is very broad, and opportunities for large-scaleapplications in many market segments are produced.
The Company focuses on the specialized segment of lithium battery, with “energy storage + small-scalepower” as the main development direction, and achieves sustained rapid development in a number of marketsegments relying on safe and innovative technology and products. In the field of communications, with theconstruction of 5G and other “new infrastructure” information infrastructures, a large number of equipment thatoriginally achieve energy storage for electricity with lead-acid batteries need to be provided with lithium batteriesinstead; in the field of electricity, due to the high volatility of PV, wind power and other new energy generation, newenergy power stations are required to be provided with a certain proportion of lithium battery energy storage,bringing opportunities for market growth of energy storage on the power generation side; in the field of individualsand families, as a portable and environmentally friendly source of energy, lithium battery offers convenient and
intelligent experience for home energy management and use, low-speed vehicle power and consumer electronics,and its scope of application is gradually expanded. In terms of technology and products, combined with thecomprehensive advantages of “battery + electric control + IoT platform”, the Company has the capability ofsolution from battery cell, battery management system (BMS) to IoT system.
4. Industrial control industry
In recent years, the efforts of policy support and industrial support for the intelligent manufacturingequipment industry have been further strengthened in China, the domestic substitution has accelerated, thecapacity of domestic industrial control market has increased significantly, and the industry maintains themomentum of sound development. At present, there is still a large space for improving the overall degree oflocalization of industrial and automation equipment, and there are medium- and long-term opportunities todevelop domestic substitution for core control components. Compared to the giant companies of foreign industrialcontrol, there are absolute advantages for the localization solution in terms of cost. Once the breakthrough of coretechnology and product reliability verification is made, the domestic substitution trend will be irreversible andhave great prospects.The Company has a leading domestic market share in the field of stepper motor industrial control and is in thefirst echelon in the field of servo motor industrial control. The Company now has more than 3,000 automationequipment manufacturer customers, with whom it has established and maintained continuous and stable cooperativerelationships directly. The Company has advanced technology in servo motor control solution, and has made theproducts pass three iterations to achieve large-scale applications. The Company will actively promote servoproducts based on existing customers, and continue to develop 3C, semiconductor equipment, textile machinery,medical devices and other segments.II. Significant changes in major assets
1. Significant changes in major assets
| Major assets | Reason for significant change |
| Equity assets | No significant change |
| Fixed assets | No significant change |
| Intangible assets | Acquisition of land use rights in Dong Nai Province of Vietnam by foreign sub-subsidiary during the reporting period |
| Construction in progress | No significant change |
2. Major assets overseas
√applicable □ not applicable
| Asset details | Reasons for formation | Asset size | Location | Operation mode | Control measures to ensure the safety of assets | Earning position | Proportion of foreign assets to net assets of the Company | Whether there is a significant risk of impairment |
| Operation Center in India | Investment and establishment | 221,762,296.96 | Pune, India | R&D, production and sales | Financial supervision, external audit | Under construction | 6.40% | No |
| Operation Center in Vietnam | Investment and establishment | 287,079,362.17 | Binh Duong, Vietnam | R&D, production and sales | Financial supervision, external audit | Under construction | 8.29% | No |
III. Core competitiveness analysis
1. Platform-based technology innovation capability. With the technology as DNA and the innovation as thegene of development, the Company has formed a unique innovation leading capability. The Company hasaccumulated and formed the most complete technology platform in the industry, with capabilities for in-depthunderstanding of various control mechanisms, independent implementation and industry leading, covering allaspects of core technologies of intelligent control integration solutions, such as: intelligent control algorithms,motor electric control, sensing, man-machine interaction, image recognition, power technology, Androidtechnology, temperature control technology, heating, cooling, etc. The Company has the most abundant productlines in its industry, each of which has accumulated and formed a complete, mass-production-proven productplatform covering white home appliances, small home appliances, power tools, gardening tools, intelligenthardware, smart campus, consumer electronics and other fields, and can quickly provide customers with the best andmost guaranteed customized solutions. In addition, the Company has a unique overall solution capacity of“intelligent controller + high efficiency motor + lithium battery” in industry, further strengthening the capacity ofthe Company to lead the technology.
2. Partnership-based customer service capability The Company takes “agile innovation partner” as its
technology value proposition, and develops partnership with customers with the development concept of valueco-creation and value co-win. Relying on the advantage of leading technology capacity and based on the deepinsight of customer needs, the Company has formed the partnership-based customer service capacity with the fastestresponse and the most powerful value creation, established in-depth cooperation partnership with domestic andforeign excellent brand customers in various business fields, and formed a good reputation and brand reputation inthe industry. The partnership-based customer service capacity is widely recognized and praised by customers.
3. Systematic rapid response capability. With the development of ICT technology and the accelerated speed ofglobal innovation iteration, the services provided by the Company to customers increasingly need to be more agilein terms of operation. Based on a deep understanding of the intelligent control business, the Company has created astrong platform system from the implementation of IPD concept of R&D and design process, ISC reform of corecustomers of supply chain system, laboratory and quality assurance system, and intelligent manufacturing platformsystem, internalizing the strengths and capabilities of the Company into agile capabilities of operation, thus furtherstrengthening the differentiated capabilities of rapid innovation and response, and guarantee sustainable andhigh-speed growth of the Company.
Section IV Business Situation Discussion and AnalysisI. General
(1) 2020 business performance and core operating indicators
The year 2020 is extraordinary. The turbulence of the international situation, the shortage of upstreammaterials, the fluctuation of foreign exchange and the shortage of labor have brought severe challenges to ourestablished complex business form. The sudden epidemic has disrupted the original plan of the Company.Fortunately, the epidemic in China was quickly brought under control, and the Company quickly resumedproduction under the premise of actively responding to the epidemic prevention and control measures. Facing thecomplicated and changeable business environment in 2020, relying on the Company’s accumulated years ofproduct capability, technology platform innovation, ISC integrated supply chain and powerful systematicmanagement ability, all the Topband staff are sincere and united, turning crisis into opportunity. They have notonly completed the original business objectives but also seized the opportunity to increase market orders. In 2020,the Company’s performance has grown rapidly.Through the efforts of all the staff, the Company realized the operating income of RMB 55.6 billion in thereporting period, with a year-on-year growth of 35.65%. The net profit attributable to the listed company reachedRMB 53.4 billion, with a year-on-year growth of 61.27%, and the net profit attributable to the shareholders of thelisted company after deduction of non-recurring profit and loss reached RMB 38.3 billion, with a year-on-yeargrowth of 92.85%. The main reason was the rapid development of the intelligent society, the increase ofapplication scenarios, and the continuous improvement of the industry. The competitive advantage of China’ssupply chain in the world has been revealed, and overseas production capacity has been transferred to China andSoutheast Asia. At the same time, the industry is centralizing to the top. As a leading enterprise of intelligentcontroller, the Company’s industry position and market share are increasing year by year. The Company hasfirmly seized the historical opportunity of intelligent upgrading, focusing on home appliances, tools, lithiumbattery applications and industrial industries, to rapidly improve the opportunity identification and realizationability, and to achieve both revenue and profit growth. On the other hand, desterilization of non-tradable shares ofDynanonic subsidiaries held by the Company were lifted in April 2020, and part of the shares of Dynanonic and
ORVIBO were transferred during the reporting period, resulting in increased investment income and increased netprofit of the company.R&D investment: as a technology-based enterprise, technological innovation is the engine of growth.During the reporting period, the total R&D investment of the company was RMB 40.5 billion, with a year-on-yearincrease of 20.99%, accounting for 11.68% of the company’s net assets attributable to the parent company and
7.28% of the operating income.
Gross profit rate: the gross profit rate of the Company increased by 2.40% year on year in the reportingperiod. The main reason is that the continuous improvement of the Company’s industrial structure, the increase ofthe proportion of revenue outside the home appliance industry, and the sharply rising of the proportion ofinnovative products and high value-added products. At the same time, the Company has implemented leanimprovement and strategic cost control measures, to decrease cost and increase benefit. With the strategy of smartoperation, a number of business indicators have improved substantially.
Focusing on the business objectives set at the beginning of 2020, the Company has madebreakthroughs in the following aspects:
1. Top customers keep increasing. The customer loyalty was strengthened, and the market shareincreased steadily.
We always carry out the brand concept of “agile innovation partner”. We are worried about customers’ needs.We always feel the need of customers. Moreover, by understanding the difficulties of them, we did our best tohelp customers solve problems. In the face of the trade war, we have quickly responded to customers’ capacitytransfer plans. In response to the needs of our customers for innovation, we have internally implemented a 48Hresponse action plan. In the face of customers’ demand for rapid delivery, we have built the whole processinformation capacity and greatly improved the collaborative efficiency. In 2020, our ability to seize marketopportunities and implement the landing has been advanced by leaps and bounds, and our comprehensive abilityhas also been highly recognized by customers. The enhancement of customer stickiness has brought incrementalorder opportunities to the Company and laid a solid foundation for future share growth. In 2020, the number oftop customers increased from 53 in 2019 to 80, and the revenue proportion of top customers increased to 80%.
Definition of top customers: big customers (comprehensive brands Top10), strategic customers (professionalbrands Top5), and sci-tech innovation customers (high-growth brands Top3).
2. The product platform capacity is strengthened, and the proportion of innovative products and high
value-added products is increased.The Company insists that technology has value and hopes to create value for customers through continuousinnovation, thus bringing users a good sense of experience and convenience of life. We believe that the futurecompetition lies on innovation. The products will be even closer to the user and the sales pattern will present atrend of de-brand and de-channel. By deepening innovation ability and continuously creating value, the Companywill gain higher market share and profit space. In 2020, the number of ODM product platforms with a shipmentquantity of 100,000+ increased from 52 in 2019 to 69, among which the number of product platforms with ashipment quantity of 1 million+ increased rapidly from 4 in 2019 to 16 in 2020. The scale advantage of theplatform has gradually appeared. At the same time, the Company strengthened the protection of intellectualproperty rights. The cumulative number of patent applications exceeded 1,700, and the proportion of inventionpatent applications increased year by year.
3. Agile delivery. In the case of a shortage of upstream materials in 2020, we have ensured timelydelivery of customers’ orders through forward-looking research, advance stocking, price lock, bulkpurchase and design substitution.After experiencing the shortage of raw materials and irrational price increase in 2018, the Company hasincreased investment in the supply chain and established a professional team to study the industrial chain.Furthermore, by strengthening the prediction of industry trends and improving supply chain planning andcoordination, we have deployed response strategies in advance to ensure supply security and cost control. Wehave obtained the priority of goods distribution by advance stocking, centralized procurement and the linkage withdownstream big customers, and realized part of the domestic substitution with our ODM R&D and designadvantages. Thus, the pressure of supply shortage was alleviated effectively and the timely delivery of customerorders was ensured. Meanwhile, we have strengthened the research on the price trend of raw materials andreduced the impact of raw material price rise on the Company’s annual operating profit in 2020 through measuressuch as price lock in advance.
4. Efficiency improvement and cost reduction together with the smart operation improve the businessindicators.
In 2020, we have further implemented the integrated supply chain implementation. We have expanded thescope of centralized procurement to promote internal lean improvement, improve operational efficiency, increaseefficiency and reduce costs. The all-staff and all-cost strategic control was implemented to eliminate waste, and
improve the Company’s operating indicators, thus enhancing profitability. By 2020, the proportion of theCompany’s centralized procurement has reached more than 50%.
5. The construction and implementation of the whole process system have clarified the direction andgoals for the Company’s strategy, thus helping the Company achieve the goal.
In 2016, when the Company formulated the vision plan for the next ten years, it put forward the long-termdevelopment goal in 2025. That is to focus on the field of intelligent control, and aim at four major industriesincluding home appliances, tools, lithium battery application and industry. Through the strategic decoding, thetarget markets, target customer, core products of the Company have been clarified. Focusing on the strategic target,eight main business processes including DSTE, MM and IPD have been sorted out. A customer-centered processtype organization has been built. The process reform has been promoted. Business operation has been guaranteedin a rapid and effective way internally. In 2020, through EDI docking with partial customer side, the cooperationefficiency was greatly promoted; Through the gradual implementation of IPD process, the innovation capacity ofproducts was strengthened, and the sample presentation cycle of the development side was sharply shortened, withrapid timeliness improvement. Through the implementation of MM process, the identification capacity of marketopportunity and product transformation capacity have been strengthened. We regarded the informatization anddigitalization as the core of the future management. The current layout of the Company could facilitate thebusiness to develop in a “rapid and ordered” way.
6. The organizational reform was promoted, and the BG-BU organization oriented at capturingopportunities was established to seize opportunities in due time to make more profits.
In 2020, the Company took the product line and customers as units, established a customer serviceorganization (BU) comprised of customer manager, solution specialist team and delivery team, which was an“iron triangle” type. The original organization BG energized the front end as a middle ground, and the functionplatform served as a background to provide agile service and ensure the rapid implementation of the business. Inthe future, through continuous improvement of evolution capacity of the organization, the Company’s capacity ofcapturing opportunities and opportunity-based profit-making capacity will be rapidly improved.
7. The production capacity was improved steadily, with rapidly boosting globalization layout, ensuringthe fast growth of the business.
We are an international company with customers all over the world. Focus on the strategy of “customerintimacy”, we serve customers closely and improve the service responsiveness and the service quality further.
Based on the demand of business development, in a total of 16 regional operation centers, production &manufacturing centers, research & development centers, representative offices and others have been established inmany places globally including the America, Germany, India and Vietnam. The globalization layout has beenimpelled rapidly. The current main production capacity layout of the Company is as follows:
The Pearl River Delta: Include the Shenzhen headquarters and Huizhou. The subsidiary in Huizhou was themain production capacity source. With rapid improvement in the production efficiency in 2020, now itsproduction capacity and product quality are stable;The Yangtze River Delta: The main plant site in Ningbo operation base has been completed, which isestimated to be put into operation & service in the second half of 2021.The production capacity of plant inHangzhou was stable, and it reached the sales revenue of 160 million yuan in 2020.Southeast Asia-Vietnam: In 2020, although the subsidiary in Vietnam Binh Duong was affected by theCOVID-19, we still cared our customers, overcome numerous difficulties including the personnel and materials,rapidly improved the production capacity, helped our customers to complete the product transferring and realizedthe sales revenue above RMB 300 million in the whole year. The construction of phase II has been started at thebeginning of the year, which is expected to be completed at the end of 2021 and gradually release the productioncapacity.Southeast Asia-India: The quantity production has been realized and the product transferring of somecustomers has been completed. The Company has overcome the impact of the COVID-19. Throughtelecommuting methods such as videos and the Internet, the production capacity is increasing rapidly.
8. Capital operation.
(1) At the beginning of 2020, the Company decided to repurchase part of the Company’s shares with 20million to 40 million yuan of the owner’s capital or self-raised funds under the impact of global COVID-19 andthe background of falling A shares market, in order to maintain the interest of majority of investors, strengthen theinvestor confidence in the Company, in combination with the development strategy, operation situation andfinancial situation of the Company. Up to April 3, 2020, the Company’s repurchase plan at this time has beencompleted, with total amount of repurchase about 20 million yuan;
(2) In order to effectively relieve the strained production capacity of the Company’s lithium battery and highefficiency motor and replenish the Company’s working capital, the Company launched the private issuing ofstocks in 2020 April, planning to raise the funds of at most 1.05 billion yuan through the private issuing of stocksfor the construction or the second industrial park in Huizhou of Topband and replenishment of the Company’s
working capital. The Project was accepted and handled by CSRC in June, received feedback in July, approval bythe Issuance Examination Commission of CSRC and successful acquisition of the official document of approvalfor issuance in August;
(3) In the first half of 2020, the Company initialized the partial stake purchase project of stockholders of itsholding subsidiary YAKO Automation, purchased 18% of the equity from minority shareholder with cash of
102.6 million yuan. After the completion of this purchase, the dilution to the Company’s profits by the minoritystockholder will be reduced, which could expedite the proceeding of the Company’s development to industrialcontrol further, improve the Company’s management efficiency and realize the Company’s strategic developmentgoal better. The industrial and commercial registration of changes of this stock right purchasing has beencompleted on July 21, 2020.
(2) Execution of core strategy
During the reporting period, the Company took the “scale growth” as the goal, implemented the strategicconcept of “customer intimacy, innovation driving, agile operation and lean improvement”, which is driven byfour major core capacities.
1. Customer intimacy strategy: The Company focused on the professional strategic customer of allspecified fields, positively expanded the global comprehensive big customer and the rapidly growing customer ofthe technology innovation type, vigorously expanded three kinds of top customers including “big customers,strategic customers and sci-tech innovation customers”, built the enterprise culture focusing on the customers,established the “iron triangle” customer service organization, formed the first-class B2B brand of the intelligentcontrol and forged the all-around intimate partnership with the top customer base.
Through the building of the customer-centered enterprise culture, thus the service concept of the staff wasimproved and the customer service quality was optimized, with the strengthened harmony in the customer service.
Organization construction of the “iron triangle” of the customer service was strengthened. Taking the productline as the unit, the customer service organization including the customer manager, solution specialist team anddelivery team was established, which has improved the service capacity and responsiveness of the top customersremarkably.
The first-class B2B brand image of the intelligent control was strengthened. A large amount of brandmarketing campaigns were launched, centering on the “exhibition hall + exhibition + media”, which spreads thebrand core value of “agile innovation partner” through multiple channels.
2. Innovation-driven strategy: The customer value was driven by the technology innovation, and the
industry upgrading was driven by the business innovation, with the operation performance driven by managementinnovation.
The Company persisted in driving the creation of customer value using the technology, keepingstrengthening the research & development efforts in general technology and platform technology and creating themulti-layered and three-dimensional advanced technology system of “product scheme + product platform +technology platform”; Through scientific planning, both the near-term technology application and the mid-longterm technology reserve were considered to improve the Company’s capacity of technology leading. In terms oftechnology & product, it has aimed at providing the industry-leading solution to the intelligent control, promotionof the “high-end orientation, intellectualization and personalization” of the technology & product and continuousimprovement in the added value of products. The Company has formed dozens of core technology platforms,hundreds of key products platforms, possessing the capacity of providing thousands of product customizationsolutions.The Company has actively made use of the business innovation to drive the industry upgrading. TheCompany positively promoted the implementation of “intelligent + upgrading strategy”, took T-SMART as thecore platform, expedited the intelligent Internet of things layout, facilitated the Company’s upgrading from the“supplier of intelligent control product” to the “supplier of intelligent control scheme” and the “service provider ofintelligent system”, which improved the customers’ core competitiveness and differentiation capacity in the age ofintelligent Internet of things.The Company has continued to carry out management reform, driving the operation performanceimprovement by management innovations, carrying out a series of management reform actions at all levels of theCompany, the business unit and the product line, and continuously optimizing the management efficiency of alllevels to realize the operation performance improvement accordingly.
3. Agile operation strategy: The agile culture was popularized and efforts were made to build the coreplatform combining the agile research & development, intelligent manufacturing and agile delivery, with theimprovement in the Company’s capacity of agile operation through the digital reform.
The Company has strongly promoted the agile culture and the agile wording culture & concept at all levels ofthe Company, trained agile talents and constructed the agile organizations. Efforts were made to build the coreplatform combining the agile research & development, intelligent manufacturing and agile delivery. The capacityof systems such as the research & development, the supply chain, manufacturing and quality was continuouslyestablished and strengthened. Centering on the method combining “agile + lean”, the agile excellent operation was
realized. The global layout was expedited and the step in the construction of the introducing of the customers inIndian operation center to Ningbo operation center was rapidly promoted, with the capacity of closely servingcustomers increased.The digital reform was promoted. With the comprehensive application of the information, network andautomation and the strengthening in the intelligent operation capacity, the agile future-oriented operation capacityhas been improved.
4. Lean improvement strategy: The Company was dedicated to the all-around cost improvement and theestablishment of perfect quality verification system through the promotion of various special projects. The processcontrol and optimization were regarded as the effective means to continue the PDCA circulation improvement.Now the Company focuses on the cost reduction of the material and processing fees through various specialproject activities. In 2020, the Company has greatly benefited from the cost reduction of materials and processingfees. Meanwhile, the Company promotes the reconstruction of process-oriented organization centering on thecustomers and drives the process reform to keep improving the efficiency in an end-to-end way, improving thequality control level of all links and realizing the circulation improvement effect advocated by the quality idea of“zero defect”.
II. Main business analysis
1. Overview
Please refer to “I. Overview” in “Business Situation Discussion and Analysis”
2. Revenue and cost
(1) Composition of operating income
Unit: Yuan
| 2020 | 2019 | Year-on-year increase and decrease | |||
| Amount | Proportion in operating income | Amount | Proportion in operating income | ||
| Total operating income | 5,560,182,998.21 | 100% | 4,098,855,380.70 | 100% | 35.65% |
| Sub-industry | |||||
| Intelligent control | 5,560,182,998.21 | 100.00% | 4,098,855,380.70 | 100.00% | 35.65% |
| electronics industry | |||||
| Sub-products | |||||
| Home appliances | 2,448,154,236.57 | 44.03% | 2,023,672,701.58 | 49.37% | 20.98% |
| Tool | 1,907,770,507.50 | 34.31% | 1,268,010,809.22 | 30.94% | 50.45% |
| Lithium battery | 790,895,137.30 | 14.22% | 539,587,834.88 | 13.16% | 46.57% |
| Industry | 257,988,191.43 | 4.64% | 176,261,168.37 | 4.30% | 46.37% |
| Others | 155,374,925.42 | 2.79% | 91,322,866.65 | 2.23% | 70.14% |
| Sub-region | |||||
| Domestic | 2,495,663,711.95 | 44.88% | 1,824,191,220.59 | 44.50% | 36.81% |
| Foreign | 3,064,519,286.26 | 55.12% | 2,274,664,160.11 | 55.50% | 34.72% |
(2) The situation of industries, products or regions accounting for more than 10% of the Company’soperating income or operating profit
√applicable □ not applicable
Unit: Yuan
| Operating income | Operating cost | Gross profit rate | Increase or decrease of operating income over the same period of last year | Increase or decrease of operating costs over the same period of last year | Increase or decrease of gross profit rate over the same period of last year | |
| Sub-industry | ||||||
| Intelligent control electronics industry | 5,560,182,998.21 | 4,204,293,830.77 | 24.39% | 35.65% | 31.49% | 2.40% |
| Sub-products | ||||||
| Home appliances | 2,448,154,236.57 | 1,904,336,785.75 | 22.21% | 20.98% | 17.78% | 2.11% |
| Tool | 1,907,770,507.50 | 1,384,279,317.33 | 27.44% | 50.45% | 46.91% | 1.75% |
| Lithium battery | 790,895,137.30 | 612,353,551.50 | 22.57% | 46.57% | 38.44% | 4.55% |
| Industry | 257,988,191.43 | 172,445,418.80 | 33.16% | 46.37% | 44.44% | 0.89% |
| Sub-region | ||||||
| Domestic | 2,495,663,711.95 | 1,897,689,104.72 | 23.96% | 36.81% | 31.84% | 2.86% |
| Foreign | 3,064,519,286.26 | 2,306,604,726.05 | 24.73% | 34.72% | 31.20% | 2.02% |
(3) Whether the Company’s income from physical sales greater than that from labor services
√applicable □ not applicable
| Industry classification | Items | Unit | 2020 | 2019 | Year-on-year increase and decrease |
| Intelligent control electronics industry | Sales volume | PCS | 138,520,341 | 105,918,804 | 30.78% |
| Production output | PCS | 143,306,093 | 105,895,705 | 35.33% | |
| Inventory | PCS | 10,413,629 | 5,627,877 | 85.04% |
Note: Each PCS is the minimum shipping unit of the Company, and the corresponding sales revenue of specificsales price range in 2020 is as follows:
The sales volume of P > 200 yuan was 2.9424 million PCS, and the sales revenue was 1.209 billion yuan;The sales volume of 100 yuan ≤ P < 200 yuan was 10.165 million PCS, and the sales revenue was 1.426 billionyuan;The sales volume of 50 yuan ≤ P < 100 yuan was 13.2373 million PCS, and the sales revenue was 992 millionyuan;The sales volume of P < 50 yuan was 112.1755 million PCS, and the sales revenue was 1.916 billion yuan.Reasons for the change of more than 30% in relevant data
√applicable □ not applicable
During the reporting period, the sales volume increased by 30.78% year-on-year, mainly due to the increase ofcustomer orders and shipments during the reporting period.During the reporting period, the production increased by 35.33% year-on-year, mainly due to the increase ofcustomer orders and production capacity during the reporting period.During the reporting period, the inventory increased by 85.04% year-on-year, mainly due to the increase ofproduction capacity and Spring Festival stock.
(4) Performance of major sales contracts signed by the Company up to the reporting period
□ applicable √ not applicable
(5) Composition of operating cost
Industry and product classification
Unit: Yuan
| Industry | Items | 2020 | 2019 | Year-on-year |
| classification | Amount | Proportion in operating cost | Amount | Proportion in operating cost | increase and decrease | |
| Intelligent control electronics industry | Operating cost | 4,204,293,830.77 | 100.00% | 3,197,501,735.13 | 100.00% | 30.46% |
Unit: Yuan
| Product classification | Items | 2020 | 2019 | Year-on-year increase and decrease | ||
| Amount | Proportion in operating cost | Amount | Proportion in operating cost | |||
| Home appliances | Operating cost | 1,904,336,785.75 | 45.30% | 1,616,864,270.66 | 50.57% | 17.78% |
| Tool | Operating cost | 1,384,279,317.33 | 32.93% | 942,244,253.86 | 29.47% | 46.91% |
| Lithium battery | Operating cost | 612,353,551.50 | 14.56% | 442,312,156.78 | 13.83% | 38.44% |
| Industry | Operating cost | 172,445,418.80 | 4.10% | 119,389,625.81 | 3.73% | 44.44% |
| Others | Operating cost | 130,878,757.39 | 3.11% | 76,691,428.02 | 2.40% | 70.66% |
(6) Whether the consolidation scope has changed during the reporting period
√ Yes □ No
In 2020, seven subsidiaries and sub-subsidiaries within the scope of merger were added.
(7) Major changes or adjustments in the Company’s business, products or services during the reportingperiod
□ applicable √ not applicable
(8) Main sales customers and suppliers
Main sales customers of the Company
| Total sales amount of top five customers (yuan) | 2,247,815,386.00 |
| Proportion of total sales amount of top five customers in total annual sales | 40.43% |
| Proportion of related party sales in the top five customers’ sales in the total annual sales | 0.00% |
Top 5 customers material of the Company
| No. | Customer name | Sales amount (yuan) | Proportion of total annual sales |
| 1 | No.1 | 1,641,935,596.98 | 29.53% |
| 2 | No.2 | 207,444,572.03 | 3.73% |
| 3 | No.3 | 161,156,244.00 | 2.90% |
| 4 | No.4 | 121,769,186.85 | 2.19% |
| 5 | No.5 | 115,509,786.14 | 2.08% |
| Total | -- | 2,247,815,386.00 | 40.43% |
Other information of main customers
□ applicable √ not applicable
Main suppliers of the Company
| Total purchase amount of top five suppliers (yuan) | 1,295,057,038.01 |
| Proportion of total purchase amount of top five suppliers in total annual purchase amount | 31.99% |
| Proportion of purchase amount of related parties in total annual purchase amount of top five suppliers | 0.00% |
Top 5 suppliers of the Company
| No. | Supplier name | Purchase amount (yuan) | Proportion of total annual procurement |
| 1 | No.1 | 986,231,173.78 | 24.36% |
| 2 | No.2 | 135,957,402.54 | 3.36% |
| 3 | No.3 | 70,543,686.92 | 1.74% |
| 4 | No.4 | 54,840,239.04 | 1.35% |
| 5 | No.5 | 47,484,535.73 | 1.17% |
| Total | -- | 1,295,057,038.01 | 31.99% |
Other information of main suppliers
□ applicable √ not applicable
3. Expenses
Unit: Yuan
| 2020 | 2019 | Year-on-year increase and decrease | Description of major changes | |
| Sales expenses | 132,898,433.70 | 134,890,094.70 | -1.48% | Sales expenses: the reporting period was decreased by 1.99 million yuan compared with the same period last year, with a decrease of 1.48%, mainly due to the reclassification of freight transportation costs in sales expenses to the main business costs according to the requirements of |
| new income standards. | ||||
| Management expenses | 181,296,178.33 | 142,622,745.50 | 27.12% | |
| Financial expenses | 176,986,013.49 | 36,179,591.44 | 389.19% | Financial expenses: compared with the same period last year, it increased by 140.81 million yuan in the reporting period, with an increase of 389.19%. The main reasons are as follows: 1. Huizhou Topband generated more interest expenses in 2020 than in 2019. 2. In 2020, the exchange rate between the US dollar and RMB increased slightly in the first half of the year, and the second half of the year decreased significantly. The foreign exchange risk exposure of the Company was also expanding due to the expansion of income scale. With the combination of double effects, the change of exchange gain and loss was larger than that in 2019. |
| Research and development expenses | 313,618,277.57 | 257,795,968.95 | 21.65% |
4. Research and development investment
√applicable □ not applicable
During the reporting period, the total research and development investment of the Company was 404,570,100yuan, with a year-on-year growth of 20.99%, accounting for 11.70% of the company’s net assets attributable to theparent company and 7.28% of the operating income. With the Company’s continuous research and developmentinvestment over the years, the Company’s products are becoming increasingly intelligent, interconnected,complex and modular, and the added value of the products has been continuously improved.Research and development investment of the Company
| 2020 | 2019 | Change ratio | |
| Number of research and development personnel (person) | 1,345 | 1,218 | 10.43% |
| Proportion of research and development personnel | 21.59% | 20.77% | 0.82% |
| Research and development investment amount (yuan) | 404,570,126.86 | 334,390,292.94 | 20.99% |
| Proportion of research and development investment in operating income | 7.28% | 8.16% | -0.88% |
| Capitalization amount of research and development investment (yuan) | 90,951,849.29 | 76,586,488.60 | 18.76% |
| Proportion of capitalized research and development investment in research | 22.48% | 22.91% | -0.43% |
The reason why the proportion of total research and development investment in operating income changedsignificantly compared with that of the previous year
□ applicable √ not applicable
The reason and rationality of the great change of research and development investment capitalization rate
□ applicable √ not applicable
5. Cash flow
Unit: Yuan
and development investment
Items
| Items | 2020 | 2019 | Year-on-year increase and decrease |
| Subtotal of cash inflow from operating activities | 5,365,550,244.38 | 3,890,125,455.55 | 37.93% |
| Subtotal of cash outflow from operating activities | 4,717,649,536.00 | 3,485,647,755.35 | 35.34% |
| Net cash flow from operating activities | 647,900,708.38 | 404,477,700.20 | 60.18% |
| Subtotal of cash inflow from investment activities | 829,117,841.78 | 1,565,386,089.23 | -47.03% |
| Subtotal of cash outflow from investment activities | 1,210,840,008.02 | 1,899,254,305.17 | -36.25% |
| Net cash flow from investment activities | -381,722,166.24 | -333,868,215.94 | -14.33% |
| Subtotal of cash inflow from financing activities | 595,643,453.03 | 1,227,570,223.20 | -51.48% |
| Subtotal of cash outflow from financing activities | 390,804,539.83 | 956,002,307.79 | -59.12% |
| Net cash flow from financing activities | 204,838,913.20 | 271,567,915.41 | -24.57% |
| Net increase amount in cash and cash equivalents | 434,990,514.43 | 332,081,176.16 | 30.99% |
Description of main influencing factors of significant changes in relevant data year-on-year
□ applicable √ not applicable
Reasons for the significant difference between the net cash flow generated by the Company’s operating activitiesand the net profit of the current year in the reporting period
□ applicable √ not applicable
III. Analysis of non-main business
√applicable □ not applicable
Unit: Yuan
| Amount | Proportion in total | Explanation of formation reason | Whether it is |
| profit | sustainable | |||
| Income from investment | 258,578,241.24 | 41.30% | It mainly refers to the investment income and temporary idle capital financing income generated from the disposal of trading financial assets such as Dynanonic and ORVIBO held during the reporting period | Not sustainable |
| Profit and loss from changes in fair value | -105,561,454.64 | -16.86% | It is mainly caused by the profit and loss of fair value changes recognized in the early stage of the transfer out of trading financial assets such as Dynanonic and ORVIBO held during the reporting period | Not sustainable |
| Impairment of assets | -88,616,454.37 | -14.15% | ||
| Non-operating income | 3,091,552.14 | 0.49% | ||
| Non-operating expenses | 5,057,831.82 | 0.81% |
IV. Analysis of assets and liabilities
1. Major changes in asset composition
The Company first implements new income standards or new leasing standards since 2020 and adjusts andimplements relevant items of financial statements at the beginning of the yearApplicable
Unit: Yuan
| End of 2020 | Beginning of 2020 | Increase or decrease of proportion | Description of major changes | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Monetary capital | 1,219,095,476.50 | 17.90% | 815,641,620.85 | 15.93% | 1.97% | |
| Accounts receivable | 1,701,111,153.86 | 24.98% | 1,344,601,325.89 | 26.25% | -1.27% | |
| Inventory | 1,115,312,868.62 | 16.38% | 513,461,655.22 | 10.03% | 6.35% | Inventory: increase of 601,850,000 yuan than at the beginning of the period, with an increase of 117.21%. The main reason is that according to the judgment of the influence of COVID-19 on the upstream electronic components, the Company reasonably increased the stock of raw |
| materials, and increased the products and finished products in order to satisfy the order delivery. | ||||||
| Investment real estate | 89,238,265.71 | 1.31% | 75,980,555.48 | 1.48% | -0.17% | |
| Long-term equity investment | 6,502,528.12 | 0.10% | 6,863,474.93 | 0.13% | -0.03% | |
| Fixed assets | 1,096,875,640.94 | 16.11% | 911,874,844.52 | 17.80% | -1.69% | |
| Construction in progress | 292,474,798.41 | 4.30% | 227,919,784.95 | 4.45% | -0.15% | |
| Short-term loans | 402,151,500.00 | 5.91% | 173,000,000.00 | 3.38% | 2.53% | At the end of the reporting period, it increased by 229,150,000 yuan, with an increase rate of 132.46%, compared with the beginning of the period. The main reason is the short-term loans obtained from banks during the reporting period. |
| Long-term loans | 200,000,000.00 | 2.94% | 200,000,000.00 | 3.90% | -0.96% |
2. Assets and liabilities measured at fair value
√applicable □ not applicable
Unit: Yuan
| Items | Opening balance | Profit and loss from changes in fair value in the current period | Changes in cumulative fair value included in equity | Impairment accrued in the current period | Purchase amount in the current period | Amount sold in the current period | Other changes | Final balance |
| Financial assets | ||||||||
| 1. Trading financial assets (excluding derivative financial assets) | 389,012,845.80 | 78,107,624.33 | 62,074,391.16 | 0.00 | 534,460,000.00 | 775,088,988.03 | 0.00 | 226,491,482.10 |
| Subtotal of financial assets | 389,012,845.80 | 78,107,624.33 | 62,074,391.16 | 0.00 | 534,460,000.00 | 775,088,988.03 | 0.00 | 226,491,482.10 |
| Total of the above | 389,012,845.80 | 78,107,624.33 | 62,074,391.16 | 0.00 | 534,460,000.00 | 775,088,988.03 | 0.00 | 226,491,482.10 |
| Financial | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Contents of other changesWhether there are significant changes in the measurement attributes of the Company’s main assets during thereporting period
□ Yes √ No
3. Restricted asset rights by the end of the reporting period
liabilities
Items
| Items | Account value at the end of the period | Restricted reasons |
| Monetary capital | 22,259,641.58 | Apply to the bank for the security deposit and guarantee deposit for issuing bank acceptance bill |
| Notes receivable | 1,525,312.22 | Apply to the bank for issuing bills pledged by bank acceptance bills |
| Fixed assets | 251,597,560.32 | Mortgage housing loan |
| Total | 296,784,564.12 |
V. Investment analysis
1. General situation
√applicable □ not applicable
| Investment in the reporting period (yuan) | Investment amount in the same period of last year (yuan) | Range of change |
| 5,250,000.00 | 1,344,000.00 | 290.63% |
2. Major equity investments obtained during the reporting period
□ applicable √ not applicable
3. 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
| Security type | Security code | Security abbreviation | Initial investment cost | Accounting measurement model | Account value at the beginning of the period | Profit and loss from changes in fair value in the current period | Changes in cumulative fair value included in equity | Purchase amount in the current | Amount sold in the current period | Profit and loss in the reporting period | Account value at the end of the period | Accounting subjects | Source of capitals |
| period | |||||||||||||
| Domestic and foreign stocks | 300769 | Dynanonic | 10,000,000 | Fair value measurements | 148,195,945.80 | 70,937,025.33 | 30,241,530.48 | 0.00 | 188,098,979.13 | 115,414,440.66 | 31,033,991.99 | Trading financial assets | Own capitals |
| Total | 10,000,000 | -- | 148,195,945.80 | 70,937,025.33 | 30,241,530.48 | 0.00 | 188,098,979.13 | 115,414,440.66 | 31,033,991.99 | -- | -- | ||
| Disclosure date of announcement of Board of Directors for approval of securities investment | |||||||||||||
| Disclosure date of announcement of Shareholders’ Meeting for approval of securities investment (if any) | |||||||||||||
(2) Derivatives investment
√applicable □ not applicable
Unit: 1,0000 yuan
| Name of derivatives investment operator | Relationship | Whether it is connected transaction | Types of derivatives investment | Initial investment amount of derivatives investment | Start date | Termination date | Initial investment amount | Purchase amount during the reporting period | Amount sold during the reporting period | Amount of provision for impairment (if any) | Investment amount at the end of the period | Proportion of investment amount at the end of the period in net assets of the Company at the end of the reporting period | Actual profit and loss amount in the reporting period |
| Citibank (China) Co., Ltd. Shenzhen | Non-related party | No | Forward settlem | 34,881 | 2020/1/2 | 2020/12/31 | 34,881 | 34,881 | 34,881 | 0 | 0.00% | 2,297 |
| Branch | ent and sale of foreign exchange | |||||||||||
| Total | 34,881 | -- | -- | 34,881 | 34,881 | 34,881 | 0 | 0.00% | 2,297 | |||
| Capital sources of derivatives investment | Export collection | |||||||||||
| Litigation (if applicable) | Not applicable | |||||||||||
| Disclosure date of announcement of Board of Directors for approval of derivatives investment (if any) | January 11, 2020 | |||||||||||
| Disclosure date of Shareholders’ Meeting announcement for approval of derivatives investment (if any) | ||||||||||||
| Risk analysis and control measures of derivatives positions in the reporting period (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | 1. Market risk: changes in the domestic and international economic situation may cause substantial fluctuations in the exchange rate, and the forward foreign exchange trading business faces certain market risks. The purpose of the Company’s forward foreign exchange trading business is to lock in the price of foreign exchange settlement or sale and reduce the impact of exchange rate fluctuations on the Company’s profits. The Company will closely track the change of exchange rate. Based on the target exchange rate determined by the business, through the research and judgment of the trend of foreign exchange rate, combined with the Company’s forecast of foreign exchange receipt and payment and the bearing capacity of price change caused by exchange rate fluctuation, the Company will determine the plan of signing forward foreign exchange trading contract, and implement dynamic management of the business, so as to ensure the reasonable profit level of the Company. | |||||||||||
| The analysis of the fair value of derivatives should disclose the specific methods used and the setting of relevant assumptions and parameters | 2. Liquidity risk: All forward foreign exchange transactions of the Company are based on reasonable estimation of the Company’s future import and export business to meet the demand of trade authenticity. 3. Bank default risk: If the cooperative bank fails during the term of the contract due to its bankruptcy, the Company will not be able to deliver the original foreign exchange contract at the contract price, and there is a risk of uncertain income. Therefore, the bank that the Company chooses to carry out foreign exchange trading business is Citibank, and the risk of its bankruptcy may bring losses to the Company is very low. 4. Operational risk: The Company may have relevant risks due to improper operation of the handling personnel in the forward foreign exchange transaction business. The Company has formulated a relevant management system, and has clarified the operation process and responsible person, which is conducive to preventing and controlling risks. 5. Legal risk: The Company’s forward foreign exchange trading business may cause legal disputes due to the signing of relevant trading contracts with banks and unclear agreements. The Company will strengthen the legal review of relevant contracts, and select banks with good credit to carry out such business and control risks. | |||||||||||
| Whether the accounting policies and accounting principles of the Company’s derivatives in the reporting period have changed significantly compared with those | The Company carries out the confirmation and measurement in accordance with Chapter 7 Determination of Fair Value of Article 22 of the Accounting Standards for Business Enterprises-Recognition and Measurement of Financial Instruments, and the fair value is basically determined according to the price provided or obtained by pricing service institutions such as banks. | |||||||||||
| in the previous reporting period | The Company’s accounting for the fair value of derivatives is mainly the unexpired forward foreign exchange settlement and sale contract signed by the Company and the bank during the reporting period. According to the difference between the exchange rate agreed in the unexpired forward foreign exchange settlement and sale contract at the end of the period and the delivery exchange rate indicated in the forward contract signed by Citibank on the balance sheet date with the same term as the remaining term of the forward contract, it is recognized as trading finance assets or liabilities. During the reporting period, the actual profit and loss of forward foreign exchange contracts of the Company was 22,970,000 yuan. |
| Special opinions of independent directors on derivatives investment and risk control of the Company | None |
5. Usage of raised capitals
√applicable □ not applicable
(1) Overall usage of raised capitals
√applicable □ not applicable
Unit: 1,0000 yuan
| Year of raising capitals | Ways of raising capitals | Total amount of raised capitals | Total amount of raised capitals used in the current period | Total amount of raised capitals used | Total amount of raised capitals for change of purpose during the reporting period | Cumulative total amount of raised capitals with changed purposes | Cumulative proportion of total amount of raised capitals with changed purposes | Total amount of unused raised capitals | Purpose and destination of unused raised capitals | Amount of raised capitals which have been idle for more than two years |
| In 2016 | Non-public offering of shares | 58,800 | 479.23 | 59,770.15 | 8,000 | 13.60% | 0 | Used up | ||
| 2019 | Public offering of convertible bonds | 56,543.65 | 15,292.45 | 22,612.06 | 39.99% | 34,578.81 | Temporary replenishment and deposit in the special account for raised capitals | |||
| Total | -- | 115,343.65 | 15,771.68 | 82,382.21 | 0 | 8,000 | 6.94% | 34,578.81 | -- | 0 |
| General use of raised capitals |
| (1) Use of capitals raised by non-public offering in 2016 As of December 31, 2020, the Company has invested 597,701,500 yuan in capital-raising projects, of which 513,364,300 yuan has been directly invested in capital-raising projects and 84,337,100 yuan has been returned before the capital-raising capitals are in place. As of December 31, 2020, the account balance of the raised capitals is 0.00 yuan, and the accumulative investment, temporary replenishment and account balance are 11,387,800 yuan more than the net amount of the raised capitals, mainly including the interest income from the deposit of raised capitals of 2,388,600 yuan and the interest income from the Company’s purchase of short-term financial products and structural deposits of 8,999,200 yuan. (2) Use of capitals raised by public issuing of convertible bonds in 2019 As of December 31, 2020, the Company has invested 226,120,600 yuan in capital-raising projects. Among them, 199,885,800 yuan was directly invested in the capital-raising projects, and 26,234,800 yuan was returned before the capitals were put in place. In 2020, 300 million yuan idle raised capitals have been used to temporarily supplement the working capital; as of December 31, 2020, the balance of the raised capitals account is 45,788,100 yuan (including interest income). |
(2) Situation of projects committed when raising capitals
√applicable □ not applicable
Unit: 1,0000 yuan
| Committed investment projects and investment direction of over raised capitals | Whether the project has been changed (including some changes) | Total committed investment of raised capitals | Total investment after adjustment (1) | Investment amount in this reporting period | Accumulated investment by the end of the period (2) | Investment progress by the end of the period (3)=(2)/(1) | The date when the project is ready for use | Benefits achieved during the reporting period | Whether the expected benefits are achieved | Where there is any significant change in the feasibility of the project |
| Committed investment projects | ||||||||||
| 1. Capital increase, research and control automation have obtained 30% equity, and motion control and servo drive research and development and operation center have been built | No | 10,000 | 10,000 | 0.21 | 10,887.11 | 108.87% | 0 | Not applicable | No | |
| 2. Construction project of Topband Yiyuan (operation | No | 20,000 | 20,000 | 479.02 | 20,238.93 | 101.19% | April 1, 2018 | 0 | Not applicable | No |
| center) | ||||||||||
| 3. Acquisition of 25% equity held by former shareholders of YAKO Automation | No | 6,750 | 6,750 | 6,741.47 | 99.87% | Not applicable | No | |||
| 4. Replenish the Company’s working capital | No | 21,902.64 | 21,902.64 | 21,902.64 | 100.00% | 0 | Not applicable | No | ||
| 5. Topband East China operation center construction project | No | 56,543.65 | 56,543.65 | 15,292.45 | 22,612.06 | 39.99% | Not applicable | No | ||
| Subtotal of committed investment projects | -- | 115,196.29 | 115,196.29 | 15,771.68 | 82,382.21 | -- | -- | -- | -- | |
| Investment direction of over raised capitals | ||||||||||
| 0 | ||||||||||
| Total | -- | 115,196.29 | 115,196.29 | 15,771.68 | 82,382.21 | -- | -- | 0 | -- | -- |
| Situation and reason of failing to reach the planned progress or expected income (by specific project) | 0 | |||||||||
| Description of major changes in project feasibility | 0 | |||||||||
| Amount, use and progress of over raised capitals | Not applicable | |||||||||
| Change of implementation location of investment projects with raised capitals | Not applicable | |||||||||
| Adjustment of implementation mode of investment projects with raised capitals | Applicable | |||||||||
| Occurred in previous years | ||||||||||
| On March 23, 2018, the Company held the fourth meeting of the sixth Board of Directors and passed the Resolution on Changing Part of the Raised Capitals for Permanent Replenishment of Working Capital. The total amount of the raised capitals of the “motion | ||||||||||
| control and servo drive research and development and operation center project” was 80 million yuan (of which, 60 million yuan were originally intended for property purchase, 20 million yuan for research and development, testing and other equipment purchase) for permanent replenishment of working capital, and other purposes of the proposed raised capitals for the project remain unchanged. The Board of Supervisors, Independent Directors and Sponsor Institutions of the Company have expressed clear agreement on the matter. Finally, the matter was deliberated and approved by the 2017 Annual General Meeting of Shareholders held on April 17, 2018. | |
| Upfront investment and replacement of investment projects with raised capitals | Applicable |
| 1. The Company has invested in the sports control and servo drive research and development and operation center project with self-raised capitals of 11,959,600 yuan and the construction project of Topband Yiyuan (operation center) of 72,377,600 yuan. Ruihua Certified Public Accountants (special general partnership) conducts a special audit on the above matters, and issues the Authentication Report on the Report of Shenzhen Topband Co., Ltd. on the Investment Projects with Self-raised Capitals in Advance (RHHZ [2016] No. 48250027). On June 15, 2016, the 25th Meeting of the 5th Board of Directors of the Company deliberated and passed the Proposal on Using Raised Capitals to Replace Self-raised Capitals Invested in Advance. As of September 30, 2020, the Company has completed the replacement of self-raised capitals invested in advance. 2. The Company invested 26,234,800 yuan in advance in the operation center project of Topband East China with self-raised capitals. Ruihua Certified Public Accountants (special general partnership) conducts a special audit on the above matters, and issues the Authentication Report on the Report of Shenzhen Topband Co., Ltd. on the Investment Projects with Self-raised Capitals in Advance (RHHZ [2019] No. 48250027). On July 25, 2019, the 25th Meeting of the 5th Board of Directors of the Company deliberated and passed the proposal on using raised capitals to replace self-raised capitals invested in advance. As of September 30, 2020, the Company has completed the replacement of self-raised capitals invested in advance. The Board of Supervisors, Independent Directors and Sponsor Institutions of the Company all expressed their clear consent on the matter. | |
| Temporary replenishment of working capital with idle capitals raised | Applicable |
| On February 18, 2020, the Company held the 21st Meeting of the 6th Board of Directors, deliberated and passed the Proposal on Temporarily Replenishing Working Capital with Some Idle Raised Capitals, and agreed that the Company should temporarily replenish working capital with 400 million yuan of idle capitals raised, with a period of not more than 12 months. As of December 31, 2020, 300 million yuan of temporary supplementary current assets have been used. The Board of Supervisors, Independent Directors and Sponsor Institutions of the Company all expressed their clear consent on the matter. | |
| Amount and reasons of the balance of raised capitals in project implementation | Not applicable |
| Purpose and whereabouts of unused raised capitals | On February 18, 2020, the Company held the 21st Meeting of the 6th Board of Directors, deliberated and passed the Proposal on Temporarily Replenishing Working Capital with Some Idle Raised Capitals, and agreed that the Company should temporarily replenish working capital with 400 million yuan of idle capitals raised, with a period of not more than 12 months. As of December 31, 2020, 300 million yuan of temporary supplementary current assets have been used. The Board of Supervisors, Independent Directors and Sponsor Institutions of the Company all expressed their clear consent on the matter. |
| Problems or other situations in the | Not applicable |
(3) Change of projects with raised capitals
□ applicable √ not applicable
During the reporting period, there is no change of the project with raised capitals.VI. Sale of major assets and equity
1. Sale of major assets
□ applicable √ not applicable
The Company did not sell any major assets during the reporting period.
2. Sale of major equity
□ applicable √ not applicable
VII. Analysis of major holding and equity participating companies
√applicable □ not applicable
Situation of major subsidiaries and equity participating companies with an impact of 10% or more on net profit ofthe Company
Unit: Yuan
usage anddisclosure of raisedcapitalsCompany name
| Company name | Company type | Main business | Registered capital | Total assets | Net assets | Operating income | Operating profit | Net profit |
| Shenzhen YAKO Automation Technology Co., Ltd. | Subsidiary | R&D, production, sales, import and export of electronic parts and components | 14 million | 350,841,666.45 | 298,828,506.24 | 257,988,191.43 | 54,201,399.59 | 48,094,321.21 |
| Huizhou Topband Electrical Technology Co., Ltd. | Subsidiary | R&D, production, sales, import and export of electronic parts and components | 300 million | 2,593,262,184.28 | 917,604,583.84 | 3,401,395,609.81 | 219,316,665.50 | 192,944,808.29 |
| Shenzhen | Equity | R&D, production | 77.86 | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable |
| Dynanonic Co., Ltd. | participating companies | and sales of lithium-ion battery materials. | million |
Situation of acquisition and disposal of subsidiaries during the reporting period
√applicable □ not applicable
| Company name | Method of acquisition and disposal of subsidiaries during the reporting period | Impact on overall production and operations and results |
| TOPBAND SMART DONGNAI(VIETNAM) Co., ltd | Newly established and acquired | No significant impact on the results of the Report |
| Shenzhen Topband Supply Chain Services Co., Ltd. | Newly established and acquired | No significant impact on the results of the Report |
| Shenzhen Spark IOT Technology Co., Ltd. | Newly established and acquired | No significant impact on the results of the Report |
| Shenzhen Topband Investment Co., Ltd. | Newly established and acquired | No significant impact on the results of the Report |
| Shenzhen Tulu Innovation Co., Ltd. | Newly established and acquired | No significant impact on the results of the Report |
| Shenzhen Senxuan Technology Co., Ltd. | Newly established and acquired | No significant impact on the results of the Report |
| TOPBAND JAPAN Co., Ltd. | Newly established and acquired | No significant impact on the results of the Report |
VIII. Situation of structured entity controlled by the Company
□ applicable √ not applicable
IX. Prospects for future development of the Company
1. Be an agile innovation partner in the era of intelligence and lead the development of intelligent controlindustry.
In the future, the society is intelligent, and it will be an era of interconnection of everything. Intelligence will bea long-term sustained, extensive and far-reaching change, with intelligent control as the core technology of thefuture intelligent society, and the brain and nervous system of intelligent devices. The global intelligent control
industry is a large market with a value of over a trillion dollars. The intelligent controller of the Company is widelyused in home appliances, smart home, power tools, switch power supply, personal care, industrial control, medicaldevices and other fields, and has the ability to provide customers with one-stop electrical intelligent solutions,including controller + communication module + cloud services + APP. A huge space for growth will be generatedby the intelligence of traditional home appliances, the expansion of the pan-home appliance field, and the expansionof specialized application fields such as robotics, industrial control, and tools, thus promoting specialized divisionof labor, accelerating the transfer of industry to China, bringing innovation in business models, and enhancingmarket concentration, all of which will lead to the business growth of the Company.The main business of the Company is the R&D, production and sales of intelligent control system solutions, i.e.“three electrics and one network” technology with electric control, motor, battery and IoT platform as the core,providing various customized solutions for four industries of home appliances, tools, industry and lithium battery.The Company will continue to strengthen its core competitiveness in three areas: “partnership-based customerservice capability”, “platform-based technology innovation capability” and “systematic rapid response capability”,and to enhance the competitiveness of its products and achieve industry-leading technology leadership throughtechnological advancement and innovation; to seize the opportunity of rapid industry growth to optimize its productand business structures and enhance its partner-based customer service capability; to continuously strengthen itsplatform construction in strategy, branding, R&D and supply chain to build a strong platform system, consolidateand strengthen its leading position in the intelligent control field, and become a global leading and honored providerof intelligent control technology.
2. Business plan for 2021
(1) Scale growth as the core goal. The Company will take scale growth as its core goal, build a pyramid profitmodel, and enhance its leading position in global intelligent control solution providers. The Company will provideone-stop intelligent control solutions and services for the world’s leading brand customers with the advantage of the“three electrics and one network” technology, and focusing on four main businesses of the “home appliances + tools+ lithium battery + industry”. It will make good use of the capital market platform to achieve high growth inoperating income scale through a combination of endogenous and extended methods.In terms of home appliance business, the Company is committed to becoming a leader in intelligent controlsolutions for home appliances, providing customers with controllers, modules, complete machines and intelligentIoT solutions, etc. The Company will seize the opportunities of intelligence and IoT to strengthen breakthroughs
for top customers, vigorously cultivate and develop product lines with leading technology and high market share,and enhance the leadership position of the Company in the industry.In terms of tool business, the Company is committed to becoming the world’s leading OEM/ODM/OBMsupplier in the tool industry, providing controllers, motors, battery packs, chargers, complete tool sets andintelligent IoT solutions for customers in the tool industry. The Company will seize the opportunity of “oil toelectricity” and “cordless” in the tool industry to vigorously develop the top customers and continue to expand itsmarket share.
In terms of lithium battery business, the Company is committed to becoming an industry leader in thecustomized lithium battery and BMS, and providing customers with energy storage, light power and BMS products.The Company will seize the development opportunities in the new energy industry to improve market planning andproduct development capabilities, and continue to increase production capacity and maintain high-speed growth.In terms of industrial business, the Company will strive to enter the first echelon of the domestic industrialcontrol industry, providing downstream automation equipment customers with industrial products such as stepper,servo, control, etc. The Company will seize the key opportunity of “domestic substitution” to accelerate the overalldevelopment and become the supplier with the best reputation in the industry.In terms of innovative business, the Company will seize the development opportunities of “IoT”, “intelligence”and “new energy vehicles” to actively explore innovative businesses such as IoT and automotive electronics. Basedon the core technology capability of “three electrics and one network”, the Company will improve its marketing andproduct development capability and develop it into the second growth track of the Company.
(2) Deepen the implementation of the four strategic policies of “customer intimacy, innovation driving,smart operation and organizational evolution” to enhance the core competitiveness of the Company
Strengthen customer intimacy strategy. The Company will vigorously develop three types of top customers,namely, big customers, strategic customers and sci-tech innovation customers, to enhance its market share; buildclose customer relationships around five customer values of “quality, cost, delivery, innovation and responsiveness”to enhance customer satisfaction; and set up several overseas offices to be close to customers and provide agileservices to them.
Deepen the innovation-driven strategy. The Company will enhance technological innovation, strengthen basicand cutting-edge technology research, develop a number of black technologies and build technical control points;strengthen the construction of product line to create a greater number of ODM product platforms; promote the
protection of intellectual assets such as patents and trade secrets to build technical barriers; develop innovationgrowth engines and strengthen innovation talent training.
Fully advance of smart operation strategy. The Company will continue to optimize business processes andimprove end-to-end efficiency; build cost advantages through “three reductions and one optimization”; promote theimplementation of digital strategy and accelerate digital transformation; speed up the arrangement of overseasfactories and promote international operation.Continuously promote organizational evolution strategy. The Company will build a customer-centricprocess-oriented organization, create a more agile front-end “iron triangle type” team, strengthen the construction oftalent team, and rapidly increase the number of talents in key positions.
(3) Accelerate the construction of Ningbo Industrial Park, actively arrange its layout of overseasoperation bases, build its global delivery capability, and continue to create value for customers.
3. Fund demand and utilization plan
Since the Company is in the stage of rapid development, it has a huge fund demand in equipment upgradingand capacity expansion. With a good credit standing, the Company is able to get strong support from the banktimely. In 2020, taking into account its own development situation and development strategy, the Company hasraised the funds required for its development by various reasonable ways.
4. Possible risk factors
(1) Risk of technology upgrading
The intelligent controller industry technology, as the primary business of the Company, is developing rapidlywith fast product upgrading and short life cycle. Although the Company continues to invest in research anddevelopment and owns thousands of invention and utility patents, there is still a risk that the technology will notbe updated in time to meet market demand, or lag behind competitors in launching new products, resulting in adecline in the market share and profitability of the Company.
(2) Exchange risk
To cope with the risk of exchange rate fluctuation, the Company will reduce and hedge foreign exchange riskby conducting RMB hedging business, international procurement and re-pricing of new product.
(3) Global operation risk
The Company provides more convenient services to customers by establishing operation centers and officesin foreign countries. There are potential risks arising from changes of national conditions and policies in the
global operation.
(4) Other risks
At present, there are many uncertainties in the macro environment at home and abroad, and there are somefactors that are unfavorable to the operation of the Company, such as the rise of international trade protectionism,unexpected public health events, shortage of raw materials or price increase, which will increase the uncertainty ofthe operation of the Company.
X. Reception, investigation, communication, interview and other activities
1. Registration form of reception, investigation, communication, interview and other activities during thereporting period
√applicable □ not applicable
| Reception date | Reception location | Reception method | Type of reception object | Reception object | Major content of interview and materials provided | Index to disclosed information |
| January 7, 2020 | Conference room of the Company | Spot investigation | Organizations | China Life Insurance Asset Management Company Limited, Manulife Teda Fund Management Co., Ltd., China Post Fund Management Co., Ltd., China Merchants Fund Management Co., Ltd., Wanjia Asset Management Co., Ltd., Bank of China Investment Management Co., Ltd., Huaxi Securities Co., Ltd., Zhongtai Securities Co., Ltd., Haitong Securities Co., Ltd., Shanghai Xitai Investment Management Co., Ltd, CCB Principal Asset Management Co., Ltd. | Learn about the operation of the Company; no information provided. | http://www.cninfo.com.cn |
| May 1, 2020 | Conference room of the Company | Spot investigation | Organizations | Ping An Fund Management Co., Ltd., Industrial Securities Co., Ltd., Guotai Junan Securities Co., Ltd., Shenzhen Hillview Capital Management Co., Ltd., Right View Shenzhen Investment Management Co., Ltd. | Learn about the operation, financial situation and strategic planning of the Company; no information provided. | http://www.cninfo.com.cn |
| June 4, 2020 | Conference room of the Company | Spot investigation | Organizations | Caitong Fund Management Co., Ltd., Baoying Fund Management Co., Ltd., Wanjia Asset Management Co., Ltd., Hua An Fund Management Co., Ltd., CITIC Capital Holdings Limited, Hua Chuang Securities Co., Ltd., Panhou Dongliang (Shanghai) Capital Management Co., Ltd., INFORE Capital Management Co., Ltd., Beijing SunCapital Management Co., Ltd., and Hua Yuan Heng Dao (Shanghai) Investment Management Co., Ltd. | Learn about the operation and financial situation of the Company; no information provided. | http://www.cninfo.com.cn |
| July 27, 2020 | Conference room of the Company | Spot investigation | Organizations | Pacific Securities Co., Ltd., China Securities Co., Ltd. | Learn about the operation, financial situation and strategic planning of the Company; no information provided. | http://www.cninfo.com.cn |
| August 28, 2020 | Conference room of the Company | Spot investigation | Organizations | Shenzhen Qianhai Yiwu Asset Management Co., Ltd., Shenzhen Times Bole Venture Investment Management Co., Ltd., Everbright Xinglong Trust Co., Ltd., Guangdong Gaoqi Equity Investment Fund Management Co., Ltd., Changxin Fund Management Co., Ltd., Tefa Fuhai Equity Investment Fund Management Co., Ltd., Guangdong Luyuan Fund Management Co., Ltd., Great Wall Securities Co., Ltd. | Learn about the operation, financial situation and strategic planning of the Company; no information provided. | http://www.cninfo.com.cn |
| September 18, 2020 | Conference room of the Company | Spot investigation | Organizations | Beijing CUFE Long Ma Capital Investment Co., Ltd., Aegon-industrial Fund Management Co., Ltd., SINOLINK Securities Co., Ltd., Guotai Junan Securities Co., Ltd., Huarong Securities Co., Ltd., CICC Wealth Management Co., Ltd., Zhongrongding (Shenzhen) Investment Co., Ltd., Shenzhen Qianhai Gohedge Asset Management Company Limited | Learn about the operation, financial situation and strategic planning of the Company; no information provided. | http://www.cninfo.com.cn |
| September 23, 2020 | Conference room of the Company | Spot investigation | Organizations | Hongta Hongtu Fund Management Co., Ltd., Zheshang Securities Co., Ltd., Great Wall Securities Co., Ltd., Huaxi Securities Co., Ltd., Shanghai Boomleading Investment Management Co., Ltd. | Learn about the operation, financial situation and strategic planning of the Company; no information provided. | http://www.cninfo.com.cn |
| October 20, 2020 | Conference room of the Company | Spot investigation | Organizations | GUOSEN Securities Co., Ltd.; China Universal Asset Management Co., Ltd; Southern Asset Management Co., Ltd.; China Securities Co., Ltd.; Hua Chuang Securities Co., Ltd.; Orient Fund Management Co., Ltd.; Ping An Fund Management Co., Ltd.; Hongta Hongtu Fund Management Co., Ltd.; Shanghai Xitai Investment Management Co., Ltd; Yi-Star Investment Management Co., Ltd.; Shenzhen Gentai Investment Management Co., Ltd.; Hotland Innovation Asset Management Co., Ltd.; Shanghai Goldstate Brilliance Asset Management Co., Ltd.; First State CINDA Fund Management Co., Ltd.; Baoying Fund Management Co., Ltd.; Great Wall Securities Co., Ltd.; Hengtai Securities Co., Ltd.; Founder Securities Co., Ltd. | Learn about the operation, financial situation and strategic planning of the Company; no information provided. | http://www.cninfo.com.cn |
| October 23, | Conference room of the | Spot investiga | Organiz | Shenzhen Qianhai Junjie Asset Management Co., Ltd | Learn about the operation, financial | http://www.cni |
| 2020 | Company | tion | ations | situation and strategic planning of the Company; no information provided. | nfo.com.cn | |
| November 3, 2020 | Conference room of the Company | Spot investigation | Organizations | ADDOR Capital Service Co., Ltd.; Guotai Junan Securities Co., Ltd.; Guosheng Securities Co., Ltd.; Shenzhen ELITIMES Capital Management Co., Ltd.; Shenzhen Guangju Hengsheng Investment Management Co., Ltd.; Zhonggeng Fund Management Co., Ltd; | Learn about the operation, financial situation and strategic planning of the Company; no information provided. | http://www.cninfo.com.cn |
| November 11, 2020 | Combination of on-site meeting and teleconference | Spot investigation | Organizations | Point 72 Asset Management Limited, Credit Suisse (Hong Kong) Limited, Invesco Ltd., Millennium Management Limited, Baring Asset Management Limited. Fidelity Management & Research Corporation, UBS Asset Management Limited, Infini Asset Management Limited. Willing Capital Management Limited, Pacific Alliance Group, FountainCap Research & Investment. Government of Singapore Investment Corp., Magnolia Capital Management Limited, Centerline Investment Mgmt, Dantai Capital Limited, Guotai Asset Management Co., Ltd., Green Court Capital Management Limited, Mondrian Investment Partners Ltd. | Learn about the operation, financial situation and strategic planning of the Company; no information provided. | http://www.cninfo.com.cn |
| November 24, 2020 | Conference room of the Company | Spot investigation | Organizations | China International Capital Corporation Limited.; Shenzhen Qianhai Gohedge Asset Management Company Limited; Xizang Yuancheng Investment Management Co., Ltd.; CETC Investment Holding Co., Ltd.; TruValue Asset Management Co., Ltd.; Avic Fund Management Co., Ltd.; Brookbull Investment Management (Beijing) Co., Ltd.; Beijing Ding Investment Co., Ltd. | Learn about the operation, financial situation and strategic planning of the Company; no information provided. | http://www.cninfo.com.cn |
| December 16, 2020 | Conference room of the Company | Spot investigation | Organizations | Shenwan Hongyuan Securities Co., Ltd.; Yihe Yinfeng Investment Management Co., Ltd.; Dongguan Securities Co., Ltd.; Shenzhen Minsen Investment Co., Ltd.; Sinosafe General Insurance Co., Ltd. | Learn about the operation, financial situation and strategic planning of the Company; no information provided. | http://www.cninfo.com.cn |
Section V Important MattersI. Profit distribution of the Company’s ordinary share and conversion of capital accumulationfund into share capitalOrdinary share profit distribution policy during the reporting period, especially the formulation, implementationor adjustment of the cash dividend policy
√applicable □ not applicable
During the reporting period, the Board of Directors of the Company formulated the profit distribution proposalin 2019 after detailed consultation and listening to the opinions of the shareholders of the Company in combinationwith the Company’s profit situation and investment situation in 2019 and the investment and expenditure plans in2020, which was deliberated and approved by the 22nd Meeting of the 6th Board of Directors and the AnnualGeneral Meeting of Shareholders in 2019. The profit distribution plan of the Company in 2019 was based on thetotal share capital of 1,007,517,449 shares (excluding 11,258,320 shares of treasury stock that have beenrepurchased) of the Company and the cash dividends of 0.5 yuan (including tax) for every 10 shares was distributedto all shareholders. Besides, no share capital was converted from the accumulation fund and no bonus share wasgiven. The above profit distribution plan was implemented on June 2, 2020. The annual profit distribution plan in2019 complied with the provisions of laws, regulations, the Articles of Association and the 2017-2019 AnnualDividend Return Planning of the Company. The decision-making procedures of profit distribution have compliedwith relevant laws, regulations and rules.
| Special explanation of cash dividend policy | |
| Whether it met the requirements of the Articles of Association or the resolution of the General Meeting of Shareholders: | Yes |
| Whether the dividend standard and proportion were definite and clear: | Yes |
| Whether the relevant decision-making procedures and mechanisms were complete: | Yes |
| Whether the Independent Director performed their duties and played their due roles: | Yes |
| Whether the medium and small shareholders had the opportunity to fully express their opinions and demands and whether their legitimate rights and interests have been fully protected: | Yes |
| If the cash dividend policy is adjusted or changed, whether the conditions and procedures were compliant and transparent: | Not applicable |
The Company’s ordinary share dividend distribution plan (proposal) and capital accumulation fund convertedto share capital plan (proposal) in recent three years (including the reporting period)
Profit distribution proposal in 2020: It was based on 1,120,377,889 shares of the Company’s total share capital(excluding 14,838,920 shares of treasury stock that have been repurchased) and the cash dividends of 0.5 yuan(including tax) for every 10 shares was distributed to all shareholders. Besides, no share capital was converted fromthe accumulation fund and no bonus share was given. If the total share capital of the Company changed due to theexercise of options and other reasons before the implementation of the distribution proposal, the “total share capitalon the date of equity registration when the distribution plan is implemented in the future” would be selected as thebase and the total amount of distribution would be adjusted in accordance with the principle of unchangeddistribution proportion.
Profit distribution plan in 2019: It was based on 1,007,517,449 shares of the Company’s total share capital(excluding 11,258,320 shares of treasury stock that have been repurchased) and the cash dividends of 0.5 yuan(including tax) for every 10 shares was distributed to all shareholders. Besides, no share capital was converted fromthe accumulation fund and no bonus share was given. If the total share capital of the Company changed due to theexercise of options of stock and other reasons before the implementation of the distribution plan, the total amount ofdistribution would be adjusted in accordance with the principle of unchanged distribution proportion.
Profit distribution plan in 2018: It was based on 1,007,788,211 shares of the Company’s total share capital afterexcluding the repurchased shares and the cash of 1.006033 yuan for every 10 shares will be distributed to allshareholders. Besides, no bonus share was given and no share capital was converted from the capital accumulationfund.Table of Cash Dividends of Ordinary Share of the Company in Recent Three Years (including the ReportingPeriod)
Unit: Yuan
| Dividend year | Cash dividend amount (including tax) | Net profit attributable to common shareholders of listed companies in annual consolidated | The ratio of cash dividend amount to the net profit attributable to common shareholders of | Amount of cash dividends by other means (such as share repurchase) | The proportion of cash dividends by other means in the net profit attributable to common | Total cash dividends (including other means) | The ratio of total cash dividends (including other means) to the net profit attributable to |
| statements of dividends | listed companies in the consolidated statements | shareholders of listed companies in the consolidated statements | common shareholders of listed companies in the consolidated statements | ||||
| 2020 | 56,018,894.45 | 534,243,280.35 | 10.50% | 20,004,351.75 | 3.74% | 76,023,246.20 | 14.23% |
| 2019 | 50,375,872.45 | 330,827,437.00 | 15.23% | 55,898,367.50 | 16.90% | 106,274,239.95 | 32.12% |
| 2018 | 101,386,850.80 | 222,186,603.82 | 45.63% | 4,101,632.50 | 1.85% | 105,488,483.30 | 47.48% |
The Company made a profit during the reporting period and the profit of the parent company available forcommon shareholders’ distribution was positive, but no cash dividend distribution proposal for common shareswas proposed
□ applicable √ not applicable
II. Profit distribution and conversion of capital accumulation fund to share capital in thereporting period
√applicable □ not applicable
| Number of bonus shares send for every 10 shares (shares) | 0 |
| Number of dividend paid for every 10 shares (yuan) (including tax) | 0.50 |
| Number of conversion for every 10 shares (shares) | 0 |
| Share capital base of the distribution proposal (shares) | 1,120,377,889 |
| Cash dividend amount (yuan) (including tax) | 56,018,894.45 |
| Cash dividend amount (yuan) by other means (such as share repurchase) | 20,004,351.75 |
| Total cash dividends (including other means) (yuan) | 76,023,246.20 |
| Distributable profit (yuan) | 805,991,614.36 |
| Proportion of total cash dividends (including other means) in total profit distribution | 100.00% |
| Cash dividend situation of this time | |
| If the development stage of the Company is a growth period and there are major capital expenditure arrangements, the minimum proportion of cash dividends in this profit distribution should reach 20% during profit distribution | |
| Detailed description of the profit distribution or capital accumulation fund conversion proposal | |
III. Performance of commitments
1. Completed commitments in the reporting period and uncompleted commitments by the end of thereporting period by the Company’s actual controller, shareholders, related parties, acquirers, theCompany and other committed related parties
√applicable □ not applicable
The Company’s profit distribution proposal in 2020 was as follows: It was based on the Company’s total share capital of1,120,377,889 shares (excluding 14,838,920 shares of treasury stock that have been repurchased) and the cash dividends of 0.5 yuan(including tax) for every 10 shares were distributed to all shareholders. Besides, no share capital was converted from theaccumulation fund and no bonus share was given. If the total share capital of the Company changed before the implementation ofthe distribution proposal due to share repurchase, convertible bonds into shares and other reasons, the total amount of distributionwould be adjusted according to the principle of unchanged distribution proportion.
Reasons for commitments
| Reasons for commitments | Commitment Party | Commitment type | Commitment content | Commitment time | Commitment period | Performance |
| Share reform commitments | ||||||
| Commitments made in the acquisition report or the equity change report | ||||||
| Commitments made in asset restructuring | ||||||
| Commitments made during the initial public offering or refinancing | Wu Yongqiang | Commitments to horizontal competition | Mr. Wu Yongqiang, the actual controller of the Company, has promised that during the period of being the controlling shareholder and/or actual controller of the Company, he would not directly or indirectly engage in any business which was the same, similar or substantially competitive with the main business of the Company at present and in the future. | June 12, 2007 | Long-term effective | Fulfill the commitment strictly |
| Ji Shuhai | Commitments to horizontal competition | Ji Shuhai, a director of the Company as a shareholder, has promised not to directly or indirectly engage in any business which was the same, similar or substantially competitive with the main business of the Company at present and in the future in any way during his term of office. | June 12, 2007 | Long-term effective | Fulfill the commitment strictly | |
| Wu | Other | 1. Promise not to deliver benefits to other | March 23, | Decem | Comple |
| Yongqiang, Ji Shuhai, Peng Ganquan, Zheng Sibin, Ma Wei, Wu Hang, Hao Shiming, Hua Xiuping, Shi Yun and Wen Zhaohui | commitments | organizations or individuals free of charge or under unfair conditions and not to damage the interests of the Company in other means. 2. Promise to restrict the duty consumption behavior of directors and senior executives. 3. Promise not to use the Company’s assets to engage in investment and consumption activities that are unrelated to the performance of duties. 4. It was committed that the compensation system formulated by the Board of Directors or the Compensation Committee was linked to the implementation of the Company’s compensation return measures. 5. If the Company implemented the equity incentive plan in the future, it promised that the exercise conditions of the equity incentive plan in the future would be linked to the implementation of the Company’s compensation return measures. | 2018 | ber 31, 2020 | tion of performance |
| Wu Yongqiang | Other commitments | 1. I would not interfere in the Company’s operation and management activities beyond my authority and would not infringe the Company’s interests. 2. From the issuance date of this commitment to the completion of this public offering of convertible corporate bonds, if the China Securities Regulatory Commission (CSRC) made other new regulatory provisions on the compensation return measures and its commitment while the above commitments could not meet the requirements of the CSRC, I promised to issue a supplementary commitment in accordance with the latest provisions of the CSRC. 3. If I violated, failed to perform or fulfilled this letter of commitment completely, I would bear corresponding legal liabilities in accordance with relevant provisions of the securities regulatory institution. | August 23, 2018 | December 31, 2020 | Completion of performance |
| Wu Yongqiang, Ji Shuhai, Peng | Other commitments | 1. I would not deliver benefits to other organizations or individuals free of charge or under unfair conditions and not damage the interests of the Company in other | April 29, 2020 | On-going | Fulfill the commitment |
| Ganquan, Zheng Sibin, Ma Wei, Wu Hang, Hao Shiming, Hua Xiuping, Shi Yun, Wen Zhaohui and Xiang Wei | means. 2. I fully supported and cooperated with the Company in regulating the duty consumption behavior of directors and senior executives. Any duty consumption behaviors would occur within the scope necessary for fulfilling my duty to the Company. I strictly accepted the supervision and management of the Company to avoid extravagance or excessive consumption. 3. I would strictly abide by the relevant laws and regulations, the regulations and rules of the CSRC, the stock exchange and other regulatory institutions as well as the requirements of the Company’s rules and regulations on the code of conduct of directors and senior executives. Besides, I would not use the Company’s assets to engage in investment and consumption activities unrelated to the performance of my duties. 4. I would try my best to make the Company implement the compensation demand return measures. 5. I would work hard to link the compensation system formulated by the Board of Directors or the Compensation Committee with the implementation of the Company’s compensation return measures. At the same time, I would vote in favor of the compensation system proposal when the Board of Directors and the General Meeting of Shareholders of the Company deliberated (if I have vote/voting right). 6. If the Company would implement the employee equity incentive in the future, I would fully support the Company to link the arrangement of exercise conditions of the employee incentive with the implementation of the Company’s compensation return measures. At the same time, I would vote in favor of the employee equity incentive proposal when the Board of Directors and the General Meeting of Shareholders of the Company deliberated (if I have vote/voting right). 7. If I violate the | strictly |
| above commitments, I would make an explanation and apologize publicly at the General Meeting of Shareholders and the designated newspapers and magazines designated by the CSRC. I voluntarily accept the self-discipline supervision measures taken by the stock exchange and China Association for Public Companies. If my breach of the commitment causes losses to the Company or the shareholders, I shall be liable for compensation in accordance with the law. | |||||
| Wu Yongqiang | Other commitments | 1. I would not abuse the position of the controlling shareholder/actual controller to interfere with the operation and management activities of the Company beyond my power and would not infringe the Company’s interests under any circumstances. 2. I would try my best to make the Company implement the compensation return measures. 3. I would work hard to link the compensation system formulated by the Board of Directors or the Compensation Committee with the implementation of the Company’s compensation return measures. 4. I would work hard to link the exercise conditions (if any) of the corporate equity incentive to be published in the future with the implementation of the Company’s compensation return measures. 5. I would support the relevant proposals related to the implementation of the Company’s compensation return measures and would vote for them (if I have vote/voting right). 6. After the issuance of this commitment, if there are other requirements in the relevant provisions of the regulatory institution on the compensation return measures and its commitment and the above commitments could not meet the relevant requirements of the regulatory institution, I promise that I would issue a supplementary commitment in accordance with the relevant provisions at that time. 7. If I violate the above | April 29, 2020 | On-going | Fulfill the commitment strictly |
| commitments, I would make an explanation and apologize publicly at the General Meeting of Shareholders and the designated newspapers and magazines designated by the CSRC. I voluntarily accept the self-discipline supervision measures taken by the stock exchange and China Association for Public Companies. If my breach of the commitment causes losses to the Company or the shareholders, I shall be liable for compensation in accordance with the law. | ||||||
| Wu Yongqiang | Other commitments | If Huizhou Topband Electrical Technology Co., Ltd. (hereinafter referred to as “Huizhou Topband”), a wholly-owned subsidiary of Shenzhen Topband Co., Ltd. failed to bid for the land usage right of the plot DN-02-16 at the southeast of the intersection of Dongxin Avenue and Xing’an Road of Dongjiang High-tech Industrial Park in HZZK Hi-tech Industrial Development Zone to be used by “Huizhou Topband No. 2 Industrial Park Project” and Huizhou Topband was required to purchase or lease other lands while the Company would suffer from heavy losses, I would compensate for such losses (such as overpayment of land-transferring fees, rents). | July 30, 2020 | On-going | Fulfill the commitment strictly | |
| Equity incentive commitment | Peng Ganquan, Zheng Sibin, Ma Wei, Wen Zhaohui and Xiang Wei | Other commitments | I promise that I would not transfer all the Company’s shares (including the shares obtained from exercise and other shares) within six months after the exercise of the stock option incentive plan in 2018. | April 28, 2020 | October 28, 2020 | Completion of performance |
| Other commitments to medium and small shareholders of the Company | ||||||
| Whether the commitment was fulfilled on schedule | Yes | |||||
| If the commitment was not fulfilled within the time limit, | Not applicable | |||||
2. If there is a profit forecast for the assets or projects of the Company and the reporting period is still inthe profit forecast period, the Company will explain why the assets or projects reached the original profitforecast
□ applicable √ not applicable
IV. Non-operating capital occupation of listed companies by controlling shareholders andtheir related parties
□ applicable √ not applicable
There was no non-operating capital occupation of listed companies by controlling shareholders and their relatedparties in the reporting period of the Company.V. Description of the “non-standard audit report” of the Accounting Firm in the reportingperiod by the Board of Directors, the Board of Supervisors and the independent directors (ifany)
□ applicable √ not applicable
VI. Description of changes in accounting policies, accounting estimates and accountingmethods compared with the financial report of the previous year? Applicable □ not applicableAccounting policy changes
1. On July 5, 2017, the Ministry of Finance revised and issued the Accounting Standards for Business EnterprisesNo. 14 - Revenue (CK [2017] No. 22), requiring domestic listed enterprises to implement the new revenuestandards from January 1, 2020. According to the revised accounting standards, the Company was required tomake corresponding changes to the original accounting policies.
2. On May 9, 2019, the Ministry of Finance issued the Notice on the Issuance and Revision of the (AccountingStandards for Business Enterprises No. 7 - Exchange of Non-monetary Assets) (CK [2019] No. 8), which requiredall enterprises that implemented the accounting standards for business enterprises conducting the standards from
June 10, 2019. According to the revised accounting standards, the Company was required to make correspondingchanges to the original accounting policies.
3. On May 16, 2019, the Ministry of Finance issued the Notice on the Issuance and Revision of the (AccountingStandards for Business Enterprises No. 12 - Debt Restructuring) (CK [2019] No. 9, hereinafter referred to as“Debt Restructuring Standards”), requiring all enterprises that implemented the accounting standards for businessenterprises conducting the standards from June 17, 2019. According to the revised accounting standards, theCompany was required to make corresponding changes to the original accounting policies.
VII. Description of the major accounting error correction occurred in the reporting periodrequiring retroactive restatement
□ applicable √ not applicable
During the reporting period, there was no significant accounting error correction requiring retrospectiverestatement.VIII. Description of changes in the consolidated statements compared with the financialreport of the previous year
√applicable □ not applicable
In 2020, the Company established 7 new sub-subsidiaries
IX. Appointment and dismissal of accounting firms
Accounting firms currently employed
| Name of domestic accounting firms | BAKER TILLY International Accounting Firm (Special General Partnership) |
| Remuneration of the domestic accounting firm (10,000 yuan) | 80 |
| Continuous years of audit services of the domestic accounting firm | 2 |
| Name of the certified public accountant of the domestic accounting firm | Chen Zhigang, Zhao Yang |
| Continuous years of audit services of the certified public accountant of the domestic accounting firm | 2 |
Whether to change the current employment of the accounting firm
□ Yes √ No
Employment of internal control audit accounting firm, financial consultant or sponsor
□ applicable √ not applicable
X. Delisting after disclosure of the annual report
□ applicable √ not applicable
XI. Matters related to bankruptcy reorganization
□ applicable √ not applicable
There were no matter related to bankruptcy reorganization during the reporting period.XII. Major litigation and arbitration matters
□ applicable √ not applicable
The Company had no major litigation and arbitration matters during the reporting period.XIII. Punishment and rectification
□ applicable √ not applicable
The Company had no punishment or rectification during the reporting period.XIV. Integrity condition of the Company, its controlling shareholders and actual controllers
□ applicable √ not applicable
XV. Implementation of the Company’s equity incentive plan, employee stock ownership planor other employee incentive measures
√applicable □ not applicable
Implementation of the stock option incentive plan in 2018On October 26, 2018, the 7th Meeting of the 6th Board of Directors and the 5th Meeting of the 6th Board ofSupervisors of the Company deliberated and approved the Proposal on the Company’s 2018 Stock OptionIncentive Plan (Draft) and Its Abstract, which was approved by the Company’s first Extraordinary GeneralMeeting of Shareholders in 2018. The grant registration was completed on January 4, 2019 and a total of 684incentive objects were granted 42.887 million stock options. Among them, 684 incentive objects were all directors,middle and senior executives and core technology (business) backbones of the Company. The grant price was 3.80
yuan/share and the grant date was November 27, 2018. The stock option was locked within 12 months from thedate of grant. After meeting the exercise conditions, the incentive objects could apply for exercise in three phaseswithin 48 months after the date of grant.
On July 26, 2019, the 15th Meeting of the 6th Board of Directors and the 12th Meeting of the 6th Board ofSupervisors of the Company deliberated and approved the Proposal on Adjustment of the Exercise Price of theStock Option Incentive Plan in 2018. As the Company implemented the equity distribution in 2018, the exerciseprice was adjusted from 3.80 yuan/share to 3.70 yuan/share.On March 30, 2020, the 22nd Meeting of the 6th Board of Directors of the Company deliberated andapproved the Proposal on the First Exercise Period of 2018 Stock Option Incentive Plan Meeting the ExerciseConditions and Exercisable Rights and the Proposal on Adjustment of the Incentive Objects and the Number ofStock Options of 2018 Stock Option Incentive Plan. There were 606 incentive objects in the first exercise periodof the 2018 stock option incentive plan and a total of 12.0147 million stock options meeting the exerciseconditions could be exercised and the Company planned to adopt the independent exercise mode. Since theannouncement on March 31 to the exercise date, the 7 incentive objects, such as Fang Dikui and Zhang Rong,resigned and left the Company due to personal reasons. 142,000 stock options granted but not exercised by themcould not be exercised and would be canceled by the Company. The review procedure for adjusting the number ofthese options would be performed in the future.As of May 21, 2020, 606 incentive objects in the first exercise period have completed the exercise of 12.0147million stock options, increasing the Company’s share capital by 12,014,700 yuan.For details of the implementation of the stock option incentive plan in 2018, please refer to the Company’sannouncements disclosed in the Securities Times and CNINFO (http://www.cninfo.com.cn) on July 30, 2019,March 31, 2020 and May 11, 2020.XVI. Major related transactions
1. Related transactions connected with the daily operation
□ applicable √ not applicable
The Company had no related transactions connected with daily operations during the reporting period.
2. Related transactions arising from acquisition and sale of assets or equity
□ applicable √ not applicable
The Company had no related transaction of acquisition or sale of assets or equity during the reporting period.
3. Related transactions of joint foreign investment
□ applicable √ not applicable
The Company had no related transaction of joint foreign investment during the reporting period.
4. Related creditor’s right and debt transaction
□ applicable √ not applicable
The Company had no related creditor’s right and debt transaction during the reporting period.
5. Other major related transactions
□ applicable √ not applicable
The Company had no other major related transactions during the reporting period.XVII. Major contracts and their performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ applicable √ not applicable
The Company had no trusteeship during the reporting period.
(2) Contracting
□ applicable √ not applicable
The Company had no contracting during the reporting period.
(3) Lease
□ applicable √ not applicable
The Company had no lease during the reporting period.
2. Material guarantee
√applicable □ not applicable
(1) Guarantee
Unit: 1,0000 yuan
| External guarantee of the Company and its subsidiaries (excluding guarantee for subsidiaries) | ||||||||
| Name of guarantee object | Date of disclosure of the relevant announcement of guarantee amount limit | Guarantee amount limit | Actual date of occurrence | Actual guarantee amount | Guarantee type | Guarantee period | Whether it was completed | Whether the guarantee objects were related parties |
| Not applicable | Not applicable | |||||||
| Total amount of external guarantee approved during the reporting period (A1) | Total actual amount of external guarantee during the reporting period (A2) | |||||||
| Total amount of external guarantee approved at the end of the reporting period (A3) | Total actual balance of external guarantee at the end of the reporting period (A4) | |||||||
| Guarantee of the Company to its subsidiaries | ||||||||
| Name of guarantee object | Date of disclosure of the relevant announcement of guarantee amount limit | Guarantee amount limit | Actual date of occurrence | Actual guarantee amount | Guarantee type | Guarantee period | Whether it was completed | Whether the guarantee objects were related parties |
| Ningbo Topband | January 12, 2019 | 19,000 | Joint liability guaranty | The tentative guarantee period shall not exceed 5 years from the date of signing the formal guarantee agreement | No | No | ||
| Ningbo Topband | October 20, 2020 | 22,000 | November 5, 2020 | 22,000 | Joint liability guaranty | The tentative guarantee period shall not exceed 5 years from the date of signing | No | No |
| the formal guarantee agreement | ||||||||
| Total amount of guarantee for subsidiaries approved during the reporting period (B1) | 22,000 | Total actual amount of guarantee for subsidiaries during the reporting period (B2) | 22,000 | |||||
| Total amount of approved guarantee for subsidiaries at the end of the reporting period (B3) | 41,000 | Total actual balance of guarantee for subsidiaries at the end of the reporting period (B4) | 0 | |||||
| Guarantee of the subsidiary to its subsidiary | ||||||||
| Name of guarantee object | Date of disclosure of the relevant announcement of guarantee amount limit | Guarantee amount limit | Actual date of occurrence | Actual guarantee amount | Guarantee type | Guarantee period | Whether it was completed | Whether the guarantee objects were related parties |
| None | ||||||||
| Total amount of guarantee approved for subsidiaries during the reporting period (C1) | Total actual amount of guarantee for subsidiaries during the reporting period (C2) | |||||||
| Total amount of approved guarantee for subsidiaries at the end of the reporting period (C3) | Total actual balance of guarantee for subsidiaries at the end of the reporting period (C4) | |||||||
| Total amount of the corporate guarantee (i.e. the sum of the first three items) | ||||||||
| Total amount of guarantee approved during the reporting period (A1+B1+C1) | 22,000 | Total actual amount of guarantee during the reporting period (A2+B2+C2) | 22,000 | |||||
| Total amount of guarantee approved at the end of the reporting period (A3+B3+C3) | 41,000 | Total actual balance of guarantee at the end of the reporting period (A4+B4+C4) | 0 | |||||
| The proportion of the total actual amount of guarantee (A4+B4+C4) in the Company’s net assets | 0 | |||||||
| Including: | ||||||||
| Balance of guarantee provided for shareholders, actual controllers and their related parties (D) | 0 | |||||||
| Balance of debt guarantee provided directly or indirectly for the | 0 | |||||||
| guaranteed object with an asset-liability ratio over 70% (E) | |
| Amount of total guarantee exceeding 50% of net assets (F) | 0 |
| Total amount of the above three guarantees (D+E+F) | 0 |
| Description of the unexpired guarantee and the situation that the guarantee liability has occurred or the joint and several liability may be assumed during the reporting period (if any) | None |
| Description of providing external guarantee in violation of specified procedures (if any) | None |
(2) External guarantee in violation of regulations
□ applicable √ not applicable
The Company had no external guarantee in violation of regulations during the reporting period.
3. Cash asset management entrusted by others
(1) Entrusted financial management
√applicable □ not applicable
Overview of entrusted financial management during the reporting period
Unit: 1,0000 yuan
| Specific types | Capital source of entrusted financing | Amount of entrusted financial management | Unexpired balance | Overdue amount not recovered |
| Bank financial products | Self-owned funds and idle funds raised | 52,921 | 11,297.00 | 0 |
| Total | 52,921 | 11,297.00 | 0 | |
Specific situation of high-risk entrusted financial management with the significant single amount or low security,poor liquidity and unstable principal assurance
□ applicable √ not applicable
Entrusted financial management was expected to be unable to recover the principal or there were other situationsthat may lead to impairment
□ applicable √ not applicable
(2) Entrusted loans
□ applicable √ not applicable
There was no entrusted loan during the reporting period.
4. Major contracts for daily operation
□ applicable √ not applicable
5. Other major contracts
√applicable □ not applicable
| Name of the contracting party | Name of the other contracting party | Contract object | Contract signing date | Book value of assets involved in the Contract (10,000 yuan) (if any) | Appraisal value of assets involved in the Contract (10,000 yuan) (if any) | Name of the appraisal institution (if any) | Base date of appraisal (if any) | Pricing principle | Transaction price (10,000 yuan) | Whether it is connected transaction | Relationship | Performance as at the end of the reporting period | Date of disclosure | Disclosure index |
| Shenzhen Topband Co., Ltd. | China Mobile Communication Co., Ltd. | Lithium iron phosphate battery products for base stations outside the tower from 2017 to 2018 | January 9, 2018 | Not applicable | Not applicable | No | Not applicable | As of December 31, 2020, the cumulative delivery amount was 274,038,100 yuan (excluding tax) and the contract has been fulfilled. | January 16, 2018 | http://www.cninfo.com.cn | ||||
| Shenzhen Topband Co., Ltd. | China Mobile M2M Co., Ltd. | Smart campus terminal products | May 5, 2019 | Not applicable | Not applicable | No | Not applicable | As of December 31, 2020, the cumulative delivery amount was 21,867,300 yuan (excluding tax). The Contract was still being performed. | April 27, 2019 | http://www.cninfo.com.cn |
XVIII. Social responsibility
1. Performance of social responsibility
The full text of the Report on Environment, Social Responsibility and Corporate Governance in 2020 was
published on CNINFO (http://www.cninfo.com.cn) on March 9, 2021.
2. Implementation of social responsibility for targeted poverty alleviation
The Company has not carried out targeted poverty alleviation work in the reporting year and there was nofollow-up targeted poverty alleviation plan.
3. Situation related to environmental protection
Whether the listed companies and their subsidiaries were key pollutant discharging organizations announced bythe Environmental Protection Department
□ Yes √ No
Not applicableXIX. Description of other major matters
√applicable □ not applicable
1. Matters of the private issuing of stock in 2020
On April 28, 2020, the 23rd Meeting of the 6th Board of Directors of the Company deliberated and approvedthe Proposal on the Plan of the Company’s Private Issuing of Stock and other relevant proposals. It was proposedto approve the private issuing of stock to raise funds of no more than 1.05 billion yuan, which would be used forthe Huizhou Topband No. 2 Industrial Park Project and the supplementary working capital.On May 20, the Company held the Annual General Meeting of Shareholders in 2019 to review and approvethe matter.On June 17, the Company issued “the announcement on receiving the Acceptance Form of AdministrativeLicense Application of the CSRC” and the CSRC accepted the Company’s application for the private issuing ofstock.On July 9, the Company issued “the announcement on receiving the Notice of the First Batches of Feedbackson the Review of the Administrative License Project of the CSRC”.On July 14, the Company replied to the feedbacks and announced the Reply to the Feedbacks of theApplication Document regarding the Private Issuing of Stock.On August 25, the Company issued the Announcement on the Approval and Reply of the CSRC for thePrivate Issuing of Stock, and the application for this private issuing was approved with reply by the CSRC.
2. Acquisition of 18% equity of YAKO Automation
In the first half of 2020, the Company initialized the partial stake purchase project of the minorityshareholders of its holding subsidiary YAKO Automation and decided to acquire 18% of the minorityshareholders with cash of 102.6 million yuan. On July 2, 2020, the Company held the 25th Meeting of the 6thBoard of Directors to deliberate and approve the Proposal on the Acquisition of Minority Shareholders’ Rightsand Interests of the Holding Subsidiary. After the completion of this acquisition, the Company’s profit dilutionwould be reduced by minority equity, which could further accelerate the development of the Company to thedirection of industrial control, improvement of the management efficiency of the Company and betterachievement of the strategic development objectives of the Company. The equity acquisition had completed theindustrial and commercial change on July 21, 2020.For details, please check the announcements disclosed by the Company in the Securities Times and CNINFO(http://www.cninfo.com.cn) on April 29, May 21, June 17, July 3, July 14, July 22 and August 25, 2020.
3. On November 2, 2020, the “Topband convertible bonds” triggered conditional redemption terms. As of themarket closing on November 25, 2020, 15,553 shares were not converted to the bonds in the “Topband convertiblebonds” and the Company has redeemed all of it. “Topband convertible bonds” no longer met the listing conditionsand were delisted on Shenzhen Stock Exchange on December 7, 2020.
4. On December 29, 2020, according to the document on the Notice of Issuing the New Identification in 2020(the 27th Batch) and the List of All National Enterprise Technology Centers Issued by the National Developmentand Reform Commission, the Ministry of Science and Technology, the Ministry of Finance, the GeneralAdministration of Customs and the General Administration of Taxation (FGGJ [2020] No. 1918), the technicalcenter of Shenzhen Topband Co., Ltd. (hereinafter referred to as “the Company”) was identified as the nationaltechnical center in 2020 (the 27th batch). According to the relevant regulations of the state on the Determination andManagement Measures of the National Enterprise Technology Center, the Company could enjoy preferential taxpolicies for supporting scientific and technological innovation.
XX. Major matters of subsidiaries of the Company
√applicable □ not applicable
1. On January 6, 2020, Topband Smart (Vietnam) Dong Nai Co., Ltd. obtained the Enterprise RegistrationCertificate issued by the Dong Nai Planning and Investment Department and the wholly-owned sub-subsidiary of
Vietnam has completed the registration.
2. In March 2020, the Company invested and established a wholly-owned subsidiary Shenzhen TopbandInvestment Co., Ltd. with a registered capital of 30 million yuan, and established a wholly-owned subsidiaryShenzhen Topband Supply Chain Service Co., Ltd. with a registered capital of 5 million yuan, which has beenincluded in the scope of consolidated statements since its establishment.
3. On March 30, 2020, the 22nd Meeting of the 6th Board of Directors of the Company deliberated and approvedthe Proposal on Increasing Investment in Indian Subsidiaries to decide to increase investment in Indiansubsidiaries. After the increase of investment, the total amount of investment should not exceed USD 50 million.
4. In April 2020, Shenzhen Spark IOT Technology Co., Ltd. was established by Shenzhen Topband InvestmentCo., Ltd. and it was a wholly-owned subsidiary of the Company with a registered capital of 10 million yuan,which had been included in the scope of consolidated statements since its establishment.
5. In October 2020, the Company invested and established a wholly-owned subsidiary Shenzhen SenxuanTechnology Co., Ltd. with a registered capital of 10 million yuan, which had been included in the scope ofconsolidated statements since its establishment.
Section VI Share Change and Shareholders
I. Share change
1. Share change
Unit: share
| Before this change | Increase or decrease of the change (＋, －) | After this change | |||||||
| Quantity | Proportion | Issuance of new shares | Stock dividend | Conversion of accumulation fund into shares | Others | Subtotal | Quantity | Proportion | |
| I. Shares with non-tradable conditions | 220,462,525 | 21.64% | -22,213,228 | -22,213,228 | 198,249,297 | 17.46% | |||
| 1. Shares held by the state | 0.00% | 0.00% | |||||||
| 2. Shares held by state-owned legal persons | 0.00% | 0.00% | |||||||
| 3. Shares held by other domestic capital | 220,462,525 | 21.64% | -22,213,228 | -22,213,228 | 198,249,297 | 17.46% | |||
| Including: shares held by domestic legal persons | 0.00% | 0.00% | |||||||
| Shares held by domestic natural persons | 220,462,525 | 21.64% | -22,213,228 | -22,213,228 | 198,249,297 | 17.46% | |||
| 4. Shares held by foreign investment | 0.00% | 0.00% | |||||||
| Including: shares held by overseas legal persons | 0.00% | 0.00% | |||||||
| Shares held by overseas natural persons | 0.00% | 0.00% | |||||||
| II. Shares without non-tradable conditions | 798,313,244 | 78.36% | 138,654,268 | 138,654,268 | 936,967,512 | 82.54% | |||
| 1. RMB ordinary share | 798,313,244 | 0.00% | 138,654,268 | 138,654,268 | 936,967,512 | 82.54% | |||
| 2. Domestic listed foreign shares | 0.00% | 0.00% | |||||||
| 3. Overseas listed foreign shares | 0.00% | 0.00% | |||||||
| 4. Others | 0.00% | 0.00% | |||||||
| III. Total number of shares | 1,018,775,769 | 100.00% | 116,441,040 | 116,441,040 | 1,135,216,809 | 100.00% | |||
Reasons for share change
√applicable □ not applicable
During the reporting period, the change of the Company’s share capital was caused by the joint influence of therepurchase and cancellation of some restricted stocks, the reduction of 310,839 shares of share capital, theconversion of convertible bonds into shares and the increase of 116,210,315 shares of option exercise.
Approval of share change
√applicable □ not applicable
The above changes had been approved by the Board of Directors of the Company as required.
Transfer of share change
√applicable □ not applicable
All the above share changes had been registered in the registration and settlement company.
Implementation progress of share repurchase
√applicable □ not applicable
Progress of repurchase plan in 2020The 20th (Temporary) Meeting of the 6th Board of Directors held on February 4, 2020 deliberated andapproved the Proposal on Share Repurchase Plan of the Company. The Share Repurchase Report was disclosed onFebruary 7, 2020.On April 3, 2020, the Company repurchased 3,580,600 shares through a centralized bidding transaction,accounting for 0.3515% of the total share capital of the Company. The lowest transaction price was 5.53yuan/share and the highest transaction price was 5.63 yuan/share. The total transaction amount was 20,004,351.75yuan (excluding transaction expenses). The Company’s 2020 repurchase plan had been implemented.
Progress in the implementation of the reduction of share repurchase through centralized bidding
□ applicable √ not applicable
The impact of share changes on financial indicators such as basic earnings per share and diluted earnings per sharein the latest year and the latest period, net assets per share attributable to common shareholders of the Company,etc.
√applicable □ not applicable
| Items | January to December 2020 | 2019 | ||
| Calculation based on new share capital | Calculation based on the original share capital | Calculation based on new share capital | Calculation based on the original share capital | |
| Basic earnings per share | 0.49 | 0.54 | 0.29 | 0.32 |
| Diluted earnings per share | 0.48 | 0.50 | 0.30 | 0.31 |
| Net assets per share attributable to the parent company | 3.05 | 3.40 | 2.21 | 2.46 |
Other contents deemed necessary by the Company or required to be disclosed by the securities regulatoryinstitution
□ applicable √ not applicable
2. Changes in non-tradable shares
√applicable □ not applicable
Unit: share
| Name of shareholder | Number of non-tradable shares at the beginning of the period | Increase number of non-tradable shares in the current period | Desterilization number of non-tradable shares in the current period | Number of non-tradable shares at the end of the period | Reasons for non-trading | Desterilization of the non-tradable date |
| Wu Yongqiang | 177,756,536 | 0 | 18,750,000 | 159,006,536 | Executives lock-in shares | Not applicable |
| Ji Shuhai | 28,363,981 | 0 | 3,750,000 | 24,613,981 | Executives lock-in shares | Not applicable |
| Ma Wei | 5,501,200 | 225,000 | 0 | 5,726,200 | Executives lock-in shares | Not applicable |
| Peng Ganquan | 2,988,402 | 270,000 | 335,728 | 2,922,674 | Executives lock-in shares | Not applicable |
| Zheng Sibin | 3,752,977 | 180,000 | 0 | 3,932,977 | Executives lock-in shares | Not applicable |
| Wen Zhaohui | 1,708,595 | 135,000 | 262,500 | 1,581,095 | Executives lock-in shares | Not applicable |
| Dai Huijuan | 239,709 | 0 | 0 | 239,709 | Executives lock-in shares | Not applicable |
| Xiang Wei | 151,125 | 90,000 | 15,000 | 226,125 | Executives lock-in shares | Not applicable |
| Total | 220,462,525 | 900,000 | 23,113,228 | 198,249,297 | -- | -- |
II. Issuance and listing of securities
1. Issuance of securities (excluding preferred shares) during the reporting period
□ applicable √ not applicable
2. Description of changes in the total number of shares and shareholder structure of the Company andchanges in the structure of assets and liabilities of the Company
√applicable □ not applicable
1. Changes in the total number of shares:
During the reporting period, some restricted stocks were repurchased and canceled to reduce 310,839 shares ofshare capital. In 2018, the first exercise of stock options was encouraged to increase 12,014,700 shares of sharecapital and 104,426,340 shares of convertible bonds were converted into shares. Consequently, the total sharecapital of the Company increased by 116,441,040 shares and the share capital increased from 1,018,775,769 sharesto 1,135,216,809 shares.
2. Changes in shareholder structure:
On March 7, 2019, the Company publicly issued 5.73 million convertible bonds, which were referred to as“Topband convertible bonds”. The “Topband convertible bonds” issued by the Company could be converted intoshares of the Company from September 16, 2019.From January 1, 2020 to November 26, 2020, the cumulativenumber of shares converted from “Topband convertible bonds” was 104,426,340.
3. Changes in the structure of assets and liabilities of the Company
By the end of the period, the total share capital of the Company was 1,135,216,809 shares and the total asset ofthe Company was 6,803,891,928.56 yuan. The asset-liability ratio was 47.91%.
3. Existing situation of internal staff shares
□ applicable √ not applicable
III. Shareholders and actual controllers
1. Number of shareholders and shareholding situation of the Company
Unit: share
| Total number of common shareholders | 46,749 | Total number of common shareholders at the end of the previous month before | 52,042 | Total number of preferred shareholders with voting rights restored at the end | 0 | The total number of preferred shareholders whose | 0 |
| at the end of the reporting period | the disclosure date of the annual report | of the reporting period (if any) (see Note 8) | voting rights were restored at the end of the previous month before the disclosure date of the annual report (if any) (see Note 8) | |||||||||
| Shareholding situation of shareholders holding more than 5% or top 10 shareholders | ||||||||||||
| Name of shareholder | Nature of shareholders | Shareholding proportion | Number of shares held at the end of the reporting period | Increase and decrease in the reporting period | Number of shares with non-tradable conditions | Number of shares without non-tradable conditions | Pledge or freezing | |||||
| Share status | Quantity | |||||||||||
| Wu Yongqiang | Domestic natural person | 18.68% | 212,008,715 | 0 | 159,006,536 | 53,002,179 | Pledge | 111,670,163 | ||||
| First State Investment Management (UK) Limited - First State Global Umbrella Fund: First State Greater China Growth Fund | Others | 2.42% | 27,456,355 | 27,456,355 | 0 | 27,456,355 | ||||||
| Ji Shuhai | Domestic natural person | 2.41% | 27,318,642 | -5,500,000 | 24,613,981 | 2,704,661 | ||||||
| Xie Renguo | Domestic natural person | 1.46% | 16,605,800 | -3,119,995 | 0 | 16,605,800 | ||||||
| Hong Kong Securities Clearing Company Ltd. | Overseas legal person | 1.26% | 14,273,560 | 14,273,560 | 0 | 14,273,560 | ||||||
| Zhao Ziwei | Domestic natural person | 1.19% | 13,542,300 | -6,463,700 | 0 | 13,542,300 | ||||||
| National social security fund 412 portfolio | Others | 1.02% | 11,581,500 | 11,581,500 | 0 | 11,581,500 | ||||||
| Industrial and Commercial Bank of China Limited - Taikang strategy optimization and flexible allocation of hybrid securities investment fund | Others | 0.79% | 9,000,000 | 9,000,000 | 0 | 9,000,000 | ||||||
| UBS AG | Overseas | 0.78% | 8,897,733 | 8,897,733 | 0 | 8,897,733 | ||||||
| legal person | ||||||||||
| Sun Life Everbright Asset Management – Industrial Bank Co., Ltd. - directional asset management products from Sun Life Everbright Asset Jucai No. 121 | Others | 0.78% | 8,802,240 | 8,802,240 | 0 | 8,802,240 | ||||
| The top 10 shareholders of strategic investors or general legal persons due to placement of new shares (if any) (see Note 3) | No | |||||||||
| Description of the above shareholders’ relationship or concerted action | Not applicable | |||||||||
| Shareholding of the top 10 shareholders without non-tradable conditions | ||||||||||
| Name of shareholder | Number of shares held without non-tradable conditions at the end of the reporting period | Types of shares | ||||||||
| Types of shares | Quantity | |||||||||
| Wu Yongqiang | 53,002,179 | RMB ordinary share | 53,002,179 | |||||||
| First State Investment Management (UK) Limited - First State Global Umbrella Fund: First State Greater China Growth Fund | 27,456,355 | RMB ordinary share | 27,456,355 | |||||||
| Xie Renguo | 16,605,800 | RMB ordinary share | 16,605,800 | |||||||
| Hong Kong Securities Clearing Company Ltd. | 14,273,560 | RMB ordinary share | 14,273,560 | |||||||
| Zhao Ziwei | 13,542,300 | RMB ordinary share | 13,542,300 | |||||||
| National social security fund 412 portfolio | 11,581,500 | RMB ordinary share | 11,581,500 | |||||||
| Industrial and Commercial Bank of China Limited - Taikang strategy optimization and flexible allocation of hybrid securities investment fund | 9,000,000 | RMB ordinary share | 9,000,000 | |||||||
| UBS AG | 8,897,733 | RMB ordinary share | 8,897,733 | |||||||
| Sun Life Everbright Asset Management – Industrial Bank Co., Ltd. - directional asset management products from Sun Life Everbright Asset Jucai No. 121 | 8,802,240 | RMB ordinary share | 8,802,240 | |||||||
| Shenzhen Qianhai Wuwei Capital Management Co., Ltd. - Wuwei value selected private equity investment fund | 8,000,000 | RMB ordinary share | 8,000,000 | |||||||
| Description of the relationship or concerted action between the top 10 shareholders without non-tradable shares and between the top 10 shareholders without non-tradable shares and the top 10 shareholders | Not applicable | |||||||||
| Description of the participation of the top 10 common shareholders in securities margin trading (if any) (see Note 4) | Not applicable | |||||||||
Whether the top 10 common shareholders and the top 10 shareholders of the ordinary share without non-tradableconditions have conducted the agreed repurchase transactions during the reporting period
□ Yes √ No
The top 10 shareholders of ordinary share and the top 10 shareholders of ordinary share without non-tradableconditions did not carry out the agreed repurchase transaction during the reporting period.
2. Controlling shareholders of the Company
Nature of controlling shareholder: controlling by natural personType of controlling shareholder: natural person
| Name of controlling shareholder | Nationality | Whether the right of residence in other countries or regions was obtained |
| Wu Yongqiang | China | No |
| Main position and occupation | Since 2009, holding the post of the Chairman and General Manager of Shenzhen Topband Co., Ltd. | |
| Equity of other domestic and foreign listed companies holding shares or participating in shares during the reporting period | None | |
Change of controlling shareholders during the reporting period
□ applicable √ not applicable
The controlling shareholder of the Company did not change during the reporting period.
3. The actual controller of the Company and the person 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 the right of residence in other countries or regions was obtained |
| Wu Yongqiang | Oneself | China | No |
| Main position and occupation | Since 2009, holding the post of the Chairman and General Manager of Shenzhen Topband Co., Ltd. | ||
| Situation of listed companies both at home and abroad that have been held in the past 10 years | None | ||
Change of actual controller during the reporting period
□ applicable √ not applicable
The actual controller of the Company did not change during the reporting period.Block Diagram of Property Rights and Control Relationship between the Company and the Actual Controller
The actual controller controlled the Company through trust or other asset management methods
□ applicable √ not applicable
4. Other corporate shareholders holding more than 10% shares
□ applicable √ not applicable
5. Limited reduction of shares of controlling shareholders, actual controllers, reorganizers and othercommitted entities
□ applicable √ not applicable
Section VII Information on Preferred Shares
□ applicable √ not applicable
The Company did not have preferred shares during the reporting period.
Section VIII Information on Convertible Corporate Bonds
√applicable □ not applicable
I. Previous adjustments of the conversion priceDue to the Company's implementation of the 2018 annual equity distribution, the price of Topband'sconvertible bonds and shares has been adjusted from 5.64 yuan/share to 5.54 yuan/share, and the adjusted shareconversion price has been effective since May 29, 2019 (ex-right and ex-dividend date). For detailed information,please refer to the Announcement on Adjusting the Share Conversion Price of "Topband Convertible Bonds"(Announcement No.: 2019052) disclosed on the information disclosure media Securities Times andwww.cninfo.com.cn on May 22, 2019.
Due to the exercise of the first exercise period of the stock option incentive plan in 2018 to increase theCompany's share capital and the implementation of cash dividends in 2019 annual equity distribution, the price ofthe convertible bonds and shares of Topband has been adjusted from 5.54 yuan/share to 5.47 yuan/share, and theadjusted share conversion price has been effective since June 2, 2020 (ex-right and ex-dividend date). For details,please refer to the Announcement on Adjusting the Share Conversion Price of "Topband Convertible Bonds"(Announcement No.: 2020048) disclosed on the information disclosure media Securities Times andwww.cninfo.com.cn on May 26, 2020.II. Information on cumulative share conversion
√applicable □ not applicable
| Abbreviation of convertible bond | Duration of share conversion | Total number issued (shares) | Total issue amount | Accumulated amount of share conversion (RMB) | Accumulated number of shares converted (shares) | Proportion of the number of shares converted in the total number of shares issued by the Company prior to the commencement of share conversion | Amount of shares not yet converted (RMB) | Proportion of the amount of unconverted shares in the total issue amount |
| Topba | September 16, 2019 | 5,730,000 | 573,000,000.00 | 571,431,300.99 | 104,466,417 | 99.73% | 1,555,300.00 | 0.27% |
| nd convertible bonds | - November 26, 2020 |
Note: As of December 31, 2020, all the bonds that were converted into shares had been redeemed by theCompany due to triggering conditional redemption.
III. Information on Top 10 Convertible Bond Holders
□ applicable √ not applicable
IV. Significant changes in the profitability, assets and credit status of the guarantor
□ applicable √ not applicable
V. The Company's liabilities and credit changes at the end of the reporting period and casharrangements for debt repayment in future years
On May 27, 2020, CSCI Pengyuan Credit Rating Co., Ltd. issued the 2020 Follow-up Credit Rating Report onthe 2019 Convertible Corporate Bonds of Shenzhen Topband Co., Ltd. (Z.P.X.P [2020] G.Z. No. [65] 01),maintaining the long-term credit rating of the Company as AA and the current convertible bond credit rating as AA,and the rating outlook was maintained as stable. There is no difference from the rating results at the time of issue of"Topband Convertible Bonds".
Section IX Information on Directors, Supervisors, Senior Executives
and EmployeesI. Changes in shareholding of directors, supervisors and senior executives
| Name | Position | Position status | Gender | Age | Commencement date of tenure | Termination date of tenure | Number of shares held at the beginning (shares) | Number of additional shares held in the current period (shares) | Number of shares reduced in the current period (shares) | Other changes (shares) | Ending number of shares held (shares) |
| Wu Yongqiang | Chairman of the Board of Directors | Incumbent | Male | 56 | 2011/08/29 | 2023/9/13 | 212,008,715 | 0 | 0 | 212,008,715 | |
| Ji Shuhai | Director | Incumbent | Male | 59 | 2011/08/29 | 2023/9/13 | 32,818,642 | 0 | 5,500,000 | 27,318,642 | |
| Zheng Sibin | Director and deputy general manager | Incumbent | Male | 55 | 2011/08/29 | 2023/9/13 | 5,003,970 | 0 | 0 | 240,000 | 5,243,970 |
| Ma Wei | Director and deputy general manager | Incumbent | Male | 46 | 2005/08/1 | 2023/9/13 | 7,334,934 | 0 | 0 | 300,000 | 7,634,934 |
| Peng Ganquan | Director | Incumbent | Male | 49 | 2011/8/29 | 2023/9/13 | 3,536,900 | 0 | 0 | 360,000 | 3,896,900 |
| Wu Hang | Director | Incumbent | Male | 37 | 2014/09/12 | 2023/9/13 | 0 | 0 | 0 | 0 | |
| Hua Xiuping | Independent director | Incumbent | Female | 43 | 2017/9/9 | 2023/9/13 | 0 | 0 | 0 | 0 | |
| Shi Yun | Independent director | Incumbent | Male | 43 | 2017/9/9 | 2023/9/13 | 0 | 0 | 0 | 0 | |
| Huang Yuegang | Independent director | Incumbent | Male | 63 | 2020/9/14 | 2023/9/13 | 0 | 0 | 0 | 0 | |
| Wen Zhaohui | Deputy general manager, secretary of the board and investment director | Incumbent | Female | 47 | 2012/09/20 | 2023/9/13 | 1,928,127 | 0 | 180,000 | 2,108,127 | |
| Xiang Wei | Chief financial | Incum | Male | 44 | 2019/1/10 | 2023/9/13 | 181,500 | 120,000 | 301,500 |
| officer | bent | ||||||||||
| Dai Huijuan | Supervisor | Incumbent | Female | 45 | 2011/8/29 | 2023/9/13 | 319,612 | 0 | 0 | 319,612 | |
| Kang Weiquan | Supervisor | Incumbent | Male | 37 | 2014/09/12 | 2023/9/13 | 0 | 0 | |||
| Chen Jinzhou | Supervisor | Incumbent | Male | 43 | 2017/2/15 | 2023/9/13 | 0 | 0 | 0 | 0 | |
| Total | -- | -- | -- | -- | -- | -- | 263,132,400 | 0 | 5,500,000 | 1,200,000 | 258,832,400 |
II. Changes in directors, supervisors and senior executives of the Company
√applicable □ not applicable
| Name | Position | Type | Date | Reason |
| Hao Shiming | Independent director | Left office upon expiry of the tenure | September 13, 2020 | Left office upon expiry of the tenure |
| Huang Yuegang | Independent director | Employed | September 14, 2020 | Newly employed |
III. Position status
Professional background and main work experience of the Company's current directors, supervisors andsenior executives and their main responsibilities in the Company
(1) Members of the Board of Directors
Wu Yongqiang, male, born in 1965, holds a master's degree and has no right of permanent residence abroad.He is a local leading talent recognized by Shenzhen City. He has won the titles "Shenzhen Young Science andTechnology Leader" awarded by Shenzhen Municipal Government and "Top Ten Outstanding Young People" inNanshan District, Shenzhen. He served successively as lecturer of Harbin Institute of Technology and vicechairman of the Company. Now he serves as chairman of the Board of Directors of the Company, chairman of theBoard of Directors of Shenzhen Topband Software Technology Co., Ltd., executive director of ShenzhenTopband Lithium Battery Co., Ltd., executive (managing) director of Shenzhen Hongru Investment ManagementCo., Ltd., partner of Shenzhen Hongru Investment Enterprise (Limited Partnership), executive director ofShenzhen Yankai Electric Technology Co., Ltd., executive director and general manager of Ningbo TopbandIntelligent Control Co., Ltd., and director of Topband (Hong Kong) Co., Ltd.
Zheng Sibin: Male, born in 1966, master's degree, certified public accountant. He has no right of permanentresidence abroad. He served successively as office director and deputy factory director of Zhejiang Songyang
Brewery, financial supervisor of Nantai Electronics (Shenzhen) Co., Ltd., and manager and chief financial officerof the financial department of the Company. Now he serves as director, deputy general manager and generalmanager of the business unit of the Company, supervisor of Shenzhen Topband Software Technology Co., Ltd.and supervisor of Chongqing Topband Industrial Co., Ltd.Ma Wei: Male, born in 1974. He holds a bachelor's degree and has no right of permanent residence abroad.He served successively as technical development engineer of Shenzhen Huafa Electronics Co., Ltd., technicaldevelopment engineer and general manager of the Company. Now he serves as director, deputy general managerand general manager of the business unit of the Company.Ji Shuhai: Male, born in 1962, master's degree, senior engineer. He has no right of permanent residenceabroad. He served successively as engineer of Guangzhou Wanbao Electrical Appliance Group Company andchairman and general manager of the Company. Now he serves as director and general manager of ShenzhenShuofang Precision Machinery Co., Ltd.Peng Ganquan: Male, born in 1972, master's degree. He has no right of permanent residence abroad. Heserved successively as engineer of Hunan Instrument and Meter General Factory, development engineer, technicaldirector and deputy general manager of the electrical business unit of the Company. Now he serves as director ofthe Company, general manager and executive director of Shenzhen Allied Control System Co., Ltd., and directorof Topband India Private Limited.Wu Hang: Male, born in 1984, master's degree. He has no right of permanent residence abroad. He onceserved as assistant researcher at the Institute of Biophysics, Chinese Academy of Sciences. Now he serves asdirector of the Company and design conversion engineer of Shenzhen Mindray Bio-Medical Electronics Co., Ltd.
Huang Yuegang: Male, born in October 1958, graduated from Jilin University of Finance and Economicswith a bachelor's degree, senior accountant. He once served as deputy director of the office and deputy director ofthe Publicity Department of the Party Committee at Jilin University of Finance and Economics, chief financialofficer of Shenzhen Far East Hotel Co., Ltd., credit director of Shenzhen Branch of Guangfa Bank, president ofZhenhua Road Sub-branch, executive president of Shenzhen Golden Lighting (Group) Co., Ltd., chairman ofDalian Changxing Industrial Co., Ltd., deputy general manager of Tianjin Guangxia Real Estate Development Co.,Ltd., deputy general manager of Shenzhen Zhongnan Hotel (Group) Management Co., Ltd. and president ofShenzhen Binji Industrial Group Co., Ltd. Now he serves as independent director of Guizhou Tyre Co., Ltd.Hua Xiuping: Female, born in 1978, Ph.D. She has no right of permanent residence abroad. She servedsuccessively as researcher of China Finance Forty Forum, visiting scholar of School of Oriental and African
Studies, University of London funded by British Academy of Sciences, guest editor of European Finance Journal,part-time vice president and partner of Junrun Capital, and independent director of Happigo Home Shopping Co.,Ltd. Now she serves as independent director of the Company, professor of finance and doctoral supervisor atNottingham University Business School (China), and independent director of Bank of Dongguan Co. Ltd.Shi Yun: Male, born in 1978, master's degree, senior economist. He has no right of permanent residenceabroad. He served successively as design engineer and deputy director of the purchasing resources department atXiamen Amoi Electronics Co., Ltd., supply chain project manager of Polaroid International Trade Co., Ltd.,branch factory director of Meggitt (Xiamen) Sensors & Controls Co., Ltd., and global supply chain executive ofDell (China) Co., Ltd. Now he serves as independent director of the Company and digital supply chain productdirector of Alibaba Group.
(2) Members of the Board of Supervisors
Dai Huijuan: Dai Huijuan, female, born in 1976. She holds a bachelor's degree and has no right ofpermanent residence abroad. She served successively as supervisor and manager of the Company's humanresources department. Now she serves as chairwoman of the Board of Supervisors and director of the humanresources center at the Company, director and general manager of Huizhou Topband Electrical Technology Co.,Ltd., partner of Shenzhen Hongru Investment Enterprise (Limited Partnership), and executive director andmanager of Huizhou Topband New Energy Co., Ltd.Chen Jinzhou: Male, born in 1978, permanent resident of Hong Kong, China, and doctor of The ChineseUniversity of Hong Kong. He served successively as electronic engineer of Hong Kong Productivity Council,senior researcher of Beijing Noitom Technology Co., Ltd., and senior chief engineer of Johnson Electric. Now heserves as deputy general manager of the microelectronics business unit of the Company and supervisor of theboard of supervisors of the Company.Kang Weiquan, male, born in 1984, bachelor's degree. He has no right of permanent residence abroad. Heonce served as cost accountant of Shenzhen Yihe Precision Industry Holding Co., Ltd. Now he serves as costaccountant and employee representative supervisor at the Company.
(3) Senior executives
Wu Yongqiang, general manager. See the resumes of the members of the Board of Directors.
Peng Ganquan, deputy general manager. See the resumes of the members of the Board of Directors.
Zheng Sibin, deputy general manager. See the resumes of the members of the Board of Directors.
Ma Wei, deputy general manager. See the resumes of the members of the Board of Directors.
Wen Zhaohui: Female, born in 1974, bachelor's degree, accountant. She has no right of permanent residenceabroad. She served successively as supervisor of the financial department and manager and chief financial officerof the financial department at Shenzhen Topband Co., Ltd., director of Shenzhen Dynanonic Co., Ltd., anddirector of Shenzhen Zhongzhi Yingke Electric Technology Co., Ltd. Now she serves as deputy general manager,secretary of the Board of Directors and investment director of the Company and director of Shenzhen YuchengxinPower Technology Co., Ltd. Ms. Wen Zhaohui has been honored as "New Fortune Golden Secretary" for fiveconsecutive years. She won the titles of "Excellent Secretary" awarded by Shenzhen Securities Regulatory Bureauand "Securities Times Top 100 Board Secretaries" in 2015, 2016 and 2017, and was selected into "New FortuneHall of Fame of Golden Secretaries in 2019".Xiang Wei, male, born in 1977, bachelor's degree, senior management accountant and internationalaccountant. He has no right of permanent residence abroad. He served successively as chief accountant of NorthChina Aluminum Co., Ltd., enterprise planner, accounting officer and subsidiary financial manager of YiyangJewelry Industry Co., Ltd., and cost accountant, budget director, statement director, deputy financial manager andfinancial manager of Shenzhen Topband Co., Ltd. Now he serves as chief financial officer of the Company.
Positions in the shareholders' units
□ applicable √ not applicable
Positions in other units
√applicable □ not applicable
| Name of staff | Names of other units | Positions held in other units | Commencement date of tenure | Termination date of tenure | Are remuneration and allowances received from other units |
| Wu Yongqiang | Shenzhen Topband Software Technology Co., Ltd. | Chairman of the Board of Directors | February 26, 2004 | No | |
| Wu Yongqiang | Shenzhen Topband Lithium Battery Co., Ltd. | Executive (Managing) Director | April 29, 2009 | No | |
| Wu Yongqiang | Shenzhen Hongru Investment Management Co. Ltd. | Executive (Managing) Director | August 20, 2015 | No | |
| Wu Yongqiang | Shenzhen Hongru Investment Enterprise (Limited Partnership) | Partner | September 2, 2015 | No | |
| Wu Yongqiang | Shenzhen Topband Suzhou Intelligent Technology Co., Ltd. | Executive director and general manager | February 7, 2017 | No |
| Wu Yongqiang | Ningbo Topband Intelligent Control Co., Ltd. | Executive director and general manager | August 28, 2017 | No | |
| Ji Shuhai | Shenzhen Topband Software Technology Co., Ltd. | Director | February 26, 2004 | No | |
| Ji Shuhai | Shenzhen Shuofang Precision Machinery Co., Ltd. | Executive (Managing) director and general manager | May 24, 2010 | Yes | |
| Peng Ganquan | Shenzhen Allied Control System Co., Ltd. | Executive director | December 20, 2016 | No | |
| Peng Ganquan | TOPBAND INDIA PRIVATE LIMITED | Director | December 11, 2015 | No | |
| Zheng Sibin | Shenzhen Topband Software Technology Co., Ltd. | Supervisor | February 26, 2004 | No | |
| Zheng Sibin | Chongqing Topband Industrial Co., Ltd. | Supervisor | March 12, 2008 | No | |
| Wu Hang | Shenzhen Mindray Bio-Medical Electronics Co., Ltd. | Design conversion engineer | July 1, 2013 | Yes | |
| Hua Xiuping | Bank of Dongguan Co. Ltd. | Independent director | June 1, 2020 | Yes | |
| Hua Xiuping | Nottingham University Business School (China) | Associate Professor of Finance | July 1, 2016 | Yes | |
| Shi Yun | Zhejiang Tmall Technology Co. Ltd. | Deputy Director of Alibaba Group Supply Chain Research Center | December 1, 2017 | Yes | |
| Huang Yuegang | Guizhou Tyre Co., Ltd. | Director | March 1, 2019 | Yes | |
| Wen Zhaohui | Shenzhen Yuchengxin Power Technology Co., Ltd. | Director | July 18, 2016 | No | |
| Dai Huijuan | Huizhou Topband Electrical Technology Co., Ltd. | Executive director and general manager | November 14, 2011 | No | |
| Dai Huijuan | Huizhou Topband New Energy Co. Ltd. | Executive director and manager | December 7, 2016 | No |
Punishments imposed by securities regulatory authorities on current and outgoing directors, supervisors and seniorexecutives of the company in recent three years
□ applicable √ not applicable
IV. Remuneration of directors, supervisors and senior executivesThe decision-making procedure, determination basis and actual payment of the remuneration for directors,supervisors and senior executives
1. Decision-making procedure and determination basis of the remuneration: According to the "Salary
Management System for Directors, Supervisors and Senior Executives" approved by the resolution of the GeneralMeeting of Shareholders of the Company, salaries shall be paid to the directors, supervisors and senior executives ofthe Company. After the salary and assessment committee formulates a salary scheme for directors, it shall besubmitted to the Board of Directors for deliberation and application shall be to the General Meeting of Shareholdersfor approval.
2. The "Salary Management System for Directors, Supervisors and Senior Executives of Shenzhen TopbandCo., Ltd.", revised at the 2011 Annual General Meeting of Shareholders held on April 17, 2012, stipulates that theallowance for independent directors of the Company is RMB 84,000 per year (before tax), which will be paidaccording to the length of service and relevant regulations. The Company shall be responsible for the travelexpenses of the independent directors who attend the Board of Directors and the General Meeting of Shareholdersand the expenses required for the exercise of their functions and powers according to the Articles of Association ofthe Company.Remuneration of directors, supervisors and senior executives during the reporting period
Unit: 1,0000 yuan
| Name | Position | Gender | Age | Position status | Total pre-tax remuneration received from the Company | Is remunerations received from related parties of the Company |
| Wu Yongqiang | Chairman of the Board of Directors | Male | 56 | Incumbent | 157.70 | No |
| Ji Shuhai | Director | Male | 59 | Incumbent | 8.40 | No |
| Zheng Sibin | Director and deputy general manager | Male | 55 | Incumbent | 166.81 | No |
| Ma Wei | Director and deputy general manager | Male | 46 | Incumbent | 171.85 | No |
| Peng Ganquan | Director | Male | 49 | Incumbent | 150.94 | No |
| Wu Hang | Director | Male | 37 | Incumbent | 8.40 | No |
| Hao Shiming | Independent director | Male | 54 | Outgoing | 5.95 | No |
| Hua Xiuping | Independent director | Female | 43 | Incumbent | 8.40 | No |
| Shi Yun | Independent director | Male | 43 | Incumbent | 8.40 | No |
| Wen Zhaohui | Deputy general manager, secretary of the board and investment director | Female | 47 | Incumbent | 90.00 | No |
| Xiang Wei | Chief financial officer | Male | 44 | Incumbent | 73.03 | No |
| Dai Huijuan | Supervisor | Female | 45 | Incumbent | 95.12 | No |
| Kang Weiquan | Supervisor | Male | 37 | Incumbent | 29.89 | No |
| Chen Jinzhou | Supervisor | Male | 43 | Incumbent | 81.03 | No |
| Huang Yuegang | Independent director | Male | 63 | Incumbent | 2.45 | No |
| Total | -- | -- | -- | -- | 1,058.37 | -- |
Equity incentive granted to the Company's directors and senior executives during the reporting period
√applicable □ not applicable
Unit: share
| Name | Position | Number of shares exercisable during the reporting period | Number of shares exercised during the reporting period | Number of exercised shares and exercise price during the reporting period (yuan/share) | Market price at the end of the reporting period (yuan/share) | Number of restricted stocks held at the beginning of the period | Number of shares unlocked in the current period | Number of new restricted stocks granted during the reporting period | Grant price of restricted stocks (yuan/share) | Number of restricted stocks held at the end of the period |
| Peng Ganquan | Director and deputy general manager | 360,000 | 360,000 | 3.7 | 8.11 | 0 | 0 | 0 | 0 | |
| Zheng Sibin | Director and deputy general manager | 240,000 | 240,000 | 3.7 | 8.11 | 0 | 0 | 0 | 0 | |
| Ma Wei | Director and deputy general manager | 300,000 | 300,000 | 3.7 | 8.11 | 0 | 0 | 0 | 0 | |
| Wen Zhaohui | Deputy general manager, secretary of the board and investment director | 180,000 | 180,000 | 3.7 | 8.11 | 0 | 0 | 0 | 0 | |
| Xiang Wei | Chief financial officer | 120,000 | 120,000 | 3.7 | 8.11 | 0 | 0 | 0 | 0 | |
| Total | -- | 1,200,000 | 1,200,000 | -- | -- | 0 | 0 | 0 | -- | 0 |
V. Information on the Company's Employees
1. Number, professional composition and education level of employees
| Number of active employees of the parent company (persons) | 2,051 |
| Number of active employees of major subsidiaries (persons) | 4,178 |
| Total number of active employees (persons) | 6,229 |
| Total number of salaried employees in the current period (persons) | 6,229 |
| Number of retired employees paid by the parent company and major subsidiaries (persons) | 3 |
| Professional composition | |
| Major composition category | Number of persons of professional composition (persons) |
| Production personnel | 3,212 |
| Sales personnel | 456 |
| Technical personnel | 1,610 |
| Financial personnel | 88 |
| Administrative personnel | 380 |
| Logistics personnel | 483 |
| Total | 6,229 |
| Education level | |
| Education level category | Number (persons) |
| Bachelor's degree or above | 2,090 |
| Junior college level | 954 |
| Below junior college level | 3,185 |
| Total | 6,229 |
2. Salary policy
According to the relevant national labor laws and policies and the actualities of the Company, the Company has formulatedsalary management regulations, and the salary is assessed and paid in accordance with the salary management regulations. TheCompany strictly abides by the Labor Law and relevant national and local labor laws and regulations, signs labor contracts withemployees, and pays various employee insurance premiums according to the regulations. The overall salary of the Company consistsof the following three parts: fixed salary, performance salary and welfare allowance. Fixed salary includes basic salary, post salaryand confidential salary; performance salary includes a performance bonus, a year-end bonus and a special bonus; benefits includestatutory benefits, company benefits and allowances.
3. Training plan
The Company has established a talent training system combining professional competence and leadership, including routine
training and professional module training. The Company develops different training courses for new employees, R&D, purchasing,sales and middle and senior management personnel by stages, and implements annual training plans from the perspective ofcorporate culture, professional skills, management improvement, professional quality and mental health. Through the combination ofinternal and external training, excellent human resources support is provided for the sustainable development of the Company.In 2020, the talent development department of the Company and other relevant departments carried out a seriesof training. In order to help new employees better adapt to the new work environment and operating posts,understand relevant systems of the Company and integrate themselves into the enterprise culture, the humanresource center of the Company has specially arranged a systemic training plan for "Topband New EmployeeTraining", and the training covers the company profile, welfare, corporate culture, the information system, finance,and intellectual property rights, legal basis, ISC core ideas and professional mental health, etc. "Topband NewEmployee Training" has become the Company's systematic new employee training plan. In 2020, the Company held12 new employee training sessions.In addition to SAP system training and TC system training, the Company will also hold various professionaltraining for different positions from time to time, including financial, legal, patent, customs, procurement andsupply chain training, sales training, R&D training, manufacturing and quality training, as well as subject exchangeand sharing of various professional modules and technologies. The Company's training topics in 2020 covered R&Dmodules, manufacturing and quality modularization, power IC technology, trademarks, customs knowledge, PCBdesign specifications, prevention and response of workplace-related psychological problems, project management,supply chain strategy and plan change, supplier negotiation and other topics. At the same time, the Company willalso actively look for external quality training and exchange opportunities to effectively improve the professionalability of employees. In 2020, the Company's external exchange topics covered intelligent home applianceapplication voice interaction technology, Zigbee comparative system explanation, AI sensor technology and othertopics.
The Company puts the training plan in a more important position. In order to improve the pertinence of trainingand enhance the professional ability of personnel in all departments of the Company, the module heads of all thedepartments of the Company and the talent development department of the human resources center of the Companyhave jointly formulated the 2021 annual training plan. In order to improve the internal implementation ability ofeach department, the module heads of all departments and the corresponding lecturers ensure that the training planwill be carried out in an effective and orderly manner, and the talent development department of the humanresources center will supervise and manage the implementation. The training plan for 2021 covers topics such as
management, professional technical theory and practice, negotiation, customer development and management. Interms of course design, teaching method, training system, instructor team and other resources, the Company haseffectively guaranteed the opportunities for employees to learn and grow, safeguarding the career development ofemployees.
4. Information on labor outsourcing
□ applicable √ not applicable
Section X Corporate Governance
I. Basic situation of corporate governance
Since its listing, the Company has revised the Articles of association, the Rules of Procedure of the GeneralMeeting of Shareholders, the Rules of Procedure of the Board of Directors and the Rules of Procedure of theBoard of Supervisors and established a series of corporate governance systems such as the Management System ofRaised Funds and the Management System of Public Information Disclosure in strict accordance with therequirements of relevant laws and regulations such as the Company Law, the Securities Law, the Code on theGovernance of Listed Companies, the Guidelines for the Articles of Association of Listed Companies and theStock Listing Rules of Shenzhen Stock Exchange. During the reporting period, the corporate governance was inline with the requirements of the Code on the Governance of Listed Companies and other normative documentson corporate governance issued by the CSRC.
1. About shareholders and the General Meeting of Shareholders: The Company has convened and held theGeneral Meeting of Shareholders in strict accordance with the provisions and requirements of the Rules ofProcedure of the General Meeting of shareholders and the Normative Opinions of the General Meeting ofShareholders of the Listed Company, so as to ensure that all shareholders, especially minority shareholders canenjoy equal status and fully exercise their rights.
2. The relationship between the controlling shareholder and the listed company: The controlling shareholderregulates his behavior in strict accordance with the Code on the Governance of Listed Companies and the Articlesof Association, and is able to exercise his rights and assume corresponding obligations according to law. Thecontrolling shareholder of the Company is an individual who does not have other investment projects and does notdirectly or indirectly interfere with the Company's decision-making and business activities beyond the GeneralMeeting of Shareholders. The Board of Directors, the Board of Supervisors and the corresponding departments ofthe Company can operate normally and have independence.
3. About directors and the Board of Directors: All the directors of the Company can carry out work inaccordance with the Rules of Procedure of the Board of Directors, the Independent Director System, and theGuidelines on the Conduct of Directors of Listed Companies in the SME Board, attend relevant meetingsseriously, actively participate in training, and be familiar with relevant laws and regulations. The Company elects
directors in strict accordance with the recruitment procedures prescribed in the Articles of Association. At present,the Company has 3 independent directors and 6 non-independent directors. The composition of the Board ofDirectors complies with the requirements of laws and regulations and the Articles of Association.
4. Supervisors and the Board of Supervisors: The Board of Supervisors is formed in strict accordance withrelevant provisions of the Company Law and the Articles of Association. The Company's supervisors can, inaccordance with the Rules of Procedure of the Board of Supervisors, conscientiously perform their duties,supervise the legality and compliance of the Company's financial status and major matters in good faith andresponsibly, and safeguard the legitimate rights and interests of the Company and its shareholders.
5. Performance evaluation and incentive and restraint mechanisms: The Company has established a series ofperformance evaluation and incentive and restraint mechanisms, and the appointment of senior executives is openand transparent and complies with the requirements of relevant laws and regulations.
6. Relevant stakeholders: The Company can fully respect and safeguard the legitimate rights and interests ofrelevant stakeholders, and actively cooperate with stakeholders to jointly promote the sustainable and healthydevelopment of the Company.
7. Information disclosure and transparency: The Company conscientiously performs the obligation ofinformation disclosure in accordance with relevant laws and regulations such as the Articles of Association, theStock Listing Rules of Shenzhen Stock Exchange, and the Company Information Disclosure System. TheCompany designates Securities Times and www.cninfo.com.cn as the newspaper and website for its informationdisclosure, and ensures the timeliness and accuracy of its information disclosure.
Is there a significant difference between the actual situation of corporate governance and the normative documentson corporate governance issued by the China Securities Regulatory Commission
□ Yes √ No
There is no significant difference between the actual situation of corporate governance and the normativedocuments on corporate governance issued by the China Securities Regulatory Commission.II. The independence of the Company from the controlling shareholder in terms of business,personnel, assets, institutions, finance, etc.
The controlling shareholder of the Company is a natural person, and the controlling shareholder has no otherinvestment. The Company and the controlling shareholder are completely separated in terms of business,personnel, assets, finance, etc. The Company has stable production and operation, and can operate independentlyand normatively.
1. Independent business: The business of the Company is independent from the controlling shareholder, witha complete and independent production, supply and marketing system, and is not dependent on shareholders orany other related parties.
2. Personnel independence: The Company has an independent staff team, and has established a soundpersonnel management system. The Company's chairman, general manager, deputy general managers, boardsecretary, chief financial officer and other senior executives work full-time in the Company and receiveremuneration. They have not held any positions except directors and supervisors in the shareholder units holdingmore than 5% of the shares of the Company and their subordinate enterprises, or held any positions in otherenterprises with the same or similar business as the Company. Personnel management is independent.
3. Independent assets: The Company has independent production and operation sites, production systems,supporting facilities, land use rights and house ownership, which are not shared with the controlling shareholder.
4. Institutional independence: The Company has set up a sound organizational system and can operateindependently. There is no subordinate relationship with the controlling shareholder.
5. Financial independence: The Company has set up an independent financial accounting department andestablished an independent accounting system and financial management system, and carries out independentfinancial operations under the requirements of relevant accounting systems. The Company has separate bankaccounts, and conducts independent tax declaration and performs payment obligations according to law.
III. Competition in the same industry
□ applicable √ not applicable
IV. Information on the annual and extraordinary general meetings of shareholders heldduring the reporting period
1. Information on the General Meeting of Shareholders during this reporting period
| Meeting session | Meeting type | Investor participation ratio | Meeting date | Date of disclosure | Disclosure index |
| 2019 Annual General Meeting of Shareholders | Annual General Meeting of Shareholders | 26.49% | May 20, 2020 | May 21, 2020 | http://www.cninfo.com.cn |
| First Extraordinary General Meeting of Shareholders in 2020 | Extraordinary General Meeting of | 27.66% | September 14, 2020 | September 15, 2020 | http://www.cninfo.com.cn |
2. The preferred shareholders with restored voting rights request to convene an Extraordinary GeneralMeeting of Shareholders
□ applicable √ not applicable
V. Performance of duties by independent directors during the reporting period
1. Attendance of independent directors at board meetings and the general meetings of shareholders
ShareholdersAttendance of independent directors at board meetings and the general meetings of shareholders
| Attendance of independent directors at board meetings and the general meetings of shareholders | |||||||
| Name of independent director | Number of board meetings that shall be attended during this reporting period | Number of board meetings that shall be attended on the spot | Number of board meetings attended by means of communication | Number of times of entrusted attendance at board meetings | Number of times of absence from board meetings | Did any of them fail to attend board meetings in person for two consecutive times | Number of the general meetings of shareholders attended |
| Hao Shiming | 8 | 0 | 8 | 0 | 0 | No | 1 |
| Shi Yun | 12 | 1 | 11 | 0 | 0 | No | 0 |
| Hua Xiuping | 12 | 0 | 12 | 0 | 0 | No | 1 |
| Huang Yuegang | 4 | 1 | 3 | 0 | 0 | No | 0 |
Description of absence from board meetings for two consecutive times
2. Objections raised by independent directors to relevant matters of the CompanyDid any independent director raise any objection to relevant matters of the Company
□ Yes √ No
During the reporting period, no independent director raised any objection to relevant matters of the Company.
3. Other description of the performance of duties by independent directors
Were the relevant suggestions of independent directors to the Company adopted
√ Yes □ No
Description of the fact that the relevant suggestions of independent directors to the Company were or were notadoptedDuring the reporting period, the independent directors of the Company could make full use of their professional
advantages and pay close attention to the Company's operating conditions. They reviewed and issued independentopinions on the major events of the Company, and put forward professional opinions on the overall developmentstrategy of the Company and the market situation it faced, the forecast of daily related transactions, the non-publicoffering of stocks, the distribution of rights and interests, the change of accounting policies, the use of raisedfunds, the adjustment of stock incentive plans and other matters. The Company adopted the above opinions putforward by independent directors.
VI. Performance of the duties by special committees under the Board of Directors during thereporting period
1. Audit Committee
In 2020, the audit committee held five meetings, deliberated the quarterly and annual audit summary, work plans,quarterly financial statements, changes in the Company's accounting policies, renewal of the employment of theaccounting firm and other proposals during the reporting period, and submitted them to the Board of Directors fordeliberation.
2. Salary and Assessment Committee
In 2020, the salary and assessment committee held one meeting, deliberated and passed the "Proposal on theSalary of the Company's Directors in 2019", the "Proposal on the Salary of the Company's Senior Executives in2019" and the "Proposal on Compliance with Exercise Conditions and Vesting for the First Exercise Period of theStock Option Incentive Plan in 2018", and submitted them to the Board of Directors for deliberation.
3. Strategy Committee
In 2020, the strategy committee held two meetings, deliberating and passing the "Proposal on the Plan forNon-Public Offering of Stocks" and the matters related to the rights and interests of minority shareholders in theacquisition of the research and control automation subsidiary.
4. Nomination Committee
In 2020, the nomination committee held one meeting, deliberating and adopting the "Proposal on the Election ofthe Board of Directors".VII. Work of the Board of SupervisorsDid the Board of Supervisors find that the Company had any risk in the supervision activities during the reporting
period
□ Yes √ No
The Board of Supervisors had no objection to the supervisory matters during the reporting period.VIII. Appraisal and incentive of senior executivesThe Company implements the salary plan based on post salary and oriented by annual business performance.The appraisal of senior executives is carried out in the way of annual performance appraisal, and the restrictedstock incentive plan and the stock option incentive plan are implemented. Hence the Company forms a perfectsalary structure system consisting of fixed salary, short-term incentive and long-term incentive. All the seniorexecutives of the Company are appointed by the Board of Directors, and the salary and assessment committee ofthe Board of Directors is responsible for evaluating the working ability, performance of duties and completion ofresponsibility objectives of the senior executives of the Company. After appraisal, during the reporting period, thesenior management personnel of the Company conscientiously performed their work responsibilities with goodwork performance, and better completed the tasks confirmed this year.IX. Internal Control Evaluation Report
1. Details of major defects in internal control found during the reporting period
□ Yes √ No
2. Internal control self-evaluation report
| Date of disclosure of the full text of the internal control evaluation report | March 9, 2021 |
| Index for disclosure of the full text of the internal control evaluation report | (http://www.cninfo.com.cn) "2020 Annual Internal Control Evaluation Report" |
| The ratio of the total assets of the unit included in the evaluation scope to the total assets in the consolidated financial statement of the Company | 100.00% |
| The ratio of the operating income of the unit included in the evaluation scope to the operating income in the consolidated financial statements of the Company | 100.00% |
| Defect identification criteria | ||
| Category | Financial report | Non-financial report |
| Qualitative standard | 1. Fraud by directors, supervisors and senior executives of the Company; 2. The Company corrected the published financial report; 3. Major misstatement in the current financial report found by certified public accountants but not identified in the Company's internal control; 4. The audit committee and the audit department conducted invalid supervision over the Company's external financial reports and financial reports. | The possibility of defects was high, which would seriously reduce the work efficiency or effect, or seriously increase the uncertainty of the effect, or make it seriously deviate from the expected goal. |
| Quantitative standard | More than 1% of consolidated revenue | More than 1% of consolidated revenue |
| Number of major defects in financial reports (defects) | 0 | |
| Number of major defects in non-financial reports (defects) | 0 | |
| Number of major defects in financial reports (defects) | 0 | |
| Number of major defects in non-financial reports (defects) | 0 | |
X. Internal Control Audit Report or Authentication ReportInternal control verification report
| The deliberation opinion paragraph in the internal control authentication report | |
| Baker Tilly International Accounting Firm (Special General Partnership) deems that as of December 31, 2020, the Company maintained effective internal control related to financial statements in all material aspects in accordance with the relevant norms and standards of the "Basic Code of Internal Control of Enterprises" issued by the Ministry of Finance. | |
| Disclosure of the internal control authentication report | Disclosure |
| Date of disclosure of the full text of the internal control certification report | March 9, 2021 |
| Index for disclosure of the full text of the internal control certification report | http://www.cninfo.com.cn |
| Type of the opinion of the internal control authentication report | Standard and unqualified opinion |
| Were there major defects in the non-financial report | No |
Did the accounting firm issue an internal control authentication report with a non-standard opinion
□ Yes √ No
Is the internal control verification report issued by the accounting firm consistent with the self-evaluation report of
the Board of Directors
√ Yes □ No
Section XI Information Related to Corporate Bonds
Did the Company had corporate bonds that were publicly issued and listed on the stock exchange and were notdue or were not fully paid on the date of approval of the annual reportNo
Section XII Financial ReportsI. Audit report
| Type of audit opinion | Standard unqualified opinion |
| Date of signing of audit report | March 8, 2021 |
| Name of audit Institution | BAKER TILLY International Accounting Firm (Special General Partnership) |
| Document number of audit report | T.Z.Y.Z. [2021] No. 7532 |
| Name of certified public accountant | Chen Zhigang, Zhao Yang |
Text of audit report
T.Z.Y.Z. [2021] No. 7532All shareholders of Shenzhen Topband Co., Ltd.:
I. Audit OpinionWe have audited the financial statements of Shenzhen Topband Co., Ltd. (hereinafter referred to as "TopbandCompany"), including the consolidated and parent company's balance sheets as of December 31, 2020, theconsolidated and parent company's income statements, the consolidated and parent company's cash flowstatements and the consolidated and parent company's statements of changes in shareholders' equity for 2020, andthe relevant notes to the financial statements.In our opinion, the attached financial statements prepared in all material respects in accordance with theAccounting Standards for Business Enterprises fairly reflect the consolidated and parent company's financialposition as of December 31, 2020, and the consolidated and parent company's operating results and cash flows for2020.
II. Basis for the Formation of the Audit Opinion
We have carried out the audit according to the Audit Standards for Chinese Certified Public Accountants.Our responsibility under these standards is further described in “Certified Public Accountants’ Responsibility forthe Financial Statements” in the audit report. According to the Code of Professional Ethics of Chinese CertifiedPublic Accountants, we are independent from Topband Company and have performed other responsibilities in
terms of professional ethics. We believe that the audit evidence obtained by us is sufficient and appropriate andhas provided a basis for the expression of our audit opinion.III. Key Audit MattersKey audit matters are those which, in our professional judgment, we deem to be the most important for theaudit of the financial statements for the current period. These matters shall be handled in the context of the auditof the financial statements as a whole and the formation of an audit opinion, and we do not separately express anopinion on these matters.
| Key Audit Matters | How are the matter handled in the audit |
| 1. Revenue recognition | |
| In 2020, the operating income of Topband Company is 5,560,183,000 yuan. Considering that operating income is a key operating indicator of the Topband Company, whether the sales revenue of products is included in the appropriate accounting period may be potentially misstated, so we regard the recognition of operating income as a key audit matter. Please refer to the accounting policies described in "(24) Income" in "III. Important Accounting Policies and Accounting Estimates", "(38) Operating Income and Operating Cost" in "VI. Notes to Items in the Consolidated Financial Statements" and "(4) Operating Income and Operating Cost" in "XVII. Annotations to Major Items in the Parent Company's Financial Statements" in the notes to the financial statements. | The main audit procedures we have carried out for revenue recognition include, but are not limited to the following: (1) Understand, evaluate and test the effectiveness of the design and operation of internal control related to the sales and collection of Topband Company; (2) Understand revenue recognition policies through interviews with the management, check relevant terms of major customer contracts, analyze and evaluate whether the revenue recognition policies actually implemented are appropriate, and recheck whether relevant accounting policies are consistently used; (3) Inquire and understand the background information of major customers or new customers through open channels, such as industrial and commercial registration information, and confirm whether there is any potential unidentified related party relationship between major customers and Topband Company and its related parties; (5) Analyze the rationality of changes in the sales structure of major products, compare with the gross profit rate in the same period in history and in the same industry, analyze changes in the gross profit rate of major products and major customers, and recheck the rationality of sales revenue; (6) Verify the sales volume of major customers in combination with the audit of accounts receivable, and perform substitution tests for customers who did not reply; (7) Take samples to check the relevant documents of sales |
revenue transactions, such as sales contracts (orders), deliverynotes, receipts (warehouse receipts), customs declarations,statements of account and sales invoices, so as to verify whether theconfirmed sales revenue is true;
(8) Spot-check sales revenue transactions recorded before and
after the balance sheet date to check the supporting vouchers ofrevenue recognition under each mode, so as to evaluate whethersales revenue is recorded in the appropriate accounting period.
Key Audit Matters
| Key Audit Matters | How are the matter handled in the audit |
| 2. Impairment of accounts receivable | |
| By the end of 2020, the book value of accounts receivable of Topband Company was 1,852,497,400 yuan. Due to the large book value of accounts receivable, the assessment of bad debt provision involves the significant accounting estimation and judgment of the management. Therefore, we regard the bad debt provision of accounts receivable as a key audit matter. Please refer to the accounting policies described in "(11) Receivables" in "III. Important Accounting Policies and Accounting Estimates", "(4) Accounts Receivable " in "VI. Notes to Items in the Consolidated Financial Statements" and "(1) Receivables" in "Notes to Major Items in the Parent Company's Financial Statements" in the notes to the financial statements. | The main audit procedures we have carried out for the impairment of accounts receivable include, but are not limited to the following: (1) Understand, evaluate and test the effectiveness of the design and operation of internal control related to the credit policy and accounts receivable management of Topband Company; (2) Analyze the rationality of the accounting policies for the bad debt provision of accounts receivable, including the basis for determining the combination of accounts receivable, the expected credit loss rate, the judgment of a single item with a significant amount, the judgment of a single item with bad debt provision, and check whether it conforms to relevant accounting policies; (3) Obtain the aging analysis table and bad debt provision table of accounts receivable, analyze and check the rationality and accuracy of the aging division and bad debt provision of accounts receivable; (4) Analyze and calculate the ratio between the amount of bad debt provision and the balance of accounts receivable on the balance sheet date, compare the amount of previous bad debt provision and the actual amount incurred, and analyze whether the amount of bad debt provision of accounts receivable is sufficient; (5) Analyze the rationality of the scale of accounts receivable of major customers in combination with the credit period of accounts receivable. At the same time, understand the reasonable cause for the accounts receivable beyond the credit period, so as to identify whether there is any situation that affects the assessment result of bad debt provision for accounts receivable of Topband Company. |
IV. Other InformationThe management of Topband Company (hereinafter referred to as the "Management") is responsible forother information. Other information includes information covered in the 2020 Annual Report, but does notinclude the financial statements and our audit report.Our audit opinion on the financial statements does not cover other information, nor do we issue any form ofauthentication conclusions on other information.In conjunction with our audit of the financial statements, it is our responsibility to read other information and,in doing so, consider whether other information is materially inconsistent or appears to be materially misstatedwith the financial statements or what we have learned in the course of our audit.Based on the work we have performed, if we determine that there is a material misstatement of otherinformation, we shall report that fact. In this regard, we have nothing to report.V. Responsibilities of the Management and the Governance Body for FinancialStatements
The Management is responsible for preparing the financial statements in accordance with the AccountingStandards for Business Enterprises, causing them to realize fair presentation and designing, implementing andmaintaining necessary internal control so that the financial statements contain no misstatement caused by fraud orerrors.When the financial statements were prepared, the Management was responsible for assessing TopbandCompany’s ability to continue as a going concern, disclosing the matters related to the going concern (ifapplicable) and applying the going concern assumption unless the Management planned to conduct liquidation,terminated operation or had no other practical option.The Governance Body is responsible for overseeing the financial reporting process of Topband Company.
V. Responsibilities of Certified Public Accountants for Auditing the Financial Statements
Our objective is to obtain reasonable assurance as to whether the financial statements contain nomisstatement caused by fraud or errors on the whole and to issue an audit report including an audit opinion.Reasonable assurance is a high level of assurance, but cannot guarantee that a certain material misstatement can
always be detected in an audit carried out according to audit standards. A misstatement may be caused by fraud orerrors. Misstatements are generally deemed to be material if it is reasonably expected that they may, individuallyor collectively, influence the economic decisions made by the users of the financial statements according to thefinancial statements.
We have exercised our professional judgment and maintained our professional skepticism in carrying out theaudit according to audit standards. At the same, we have carried out the following work:
(1) We have identified and assessed the risks of material misstatements caused by fraud or errors in thefinancial statements; have designed and implemented audit procedures to cope with such risks; and have obtainedsufficient and appropriate audit evidence as a basis for the expression of the audit opinion. Because fraud mayinvolve collusion, falsification, intentional omission, misrepresentation or precedence over internal control, therisk of failure to detect material misstatements caused by fraud is higher than the risk of failure to detect materialmisstatements caused by errors.
(2) We have understood the internal control related to the audit to design appropriate audit procedures, butour purpose is not to express our opinion on the effectiveness of internal control.
(3) We have evaluated the appropriateness of the accounting polices chosen by the Management and thereasonableness of the accounting estimates and relevant disclosure made by it.
(4) We have reached a conclusion on the appropriateness of the use of the going concern assumption. At thesame time, according to the received audit evidence, we have reached a conclusion on the existence ornon-existence of material uncertainty about any matter or situation that may cast considerable doubt on TopbandCompany's ability to continue as a going concern. If our conclusion is that material uncertainty exists, the auditstandards require us to bring relevant disclosure in the financial statements to the attention of the users of thestatements in the audit report; if such disclosure is inadequate, we shall express a non-unqualified opinion. Ourconclusion is based on the information that was available as of the date of the audit report. However, futurematters or situations may cause Topband Company to lose the ability to continue as a going concern.
(5) We have evaluated the overall presentation, structure and content of the financial statements and haveevaluated whether the financial statements fairly present relevant transactions and matters.
(6) We have obtained sufficient and appropriate audit evidence for the financial information on the entity orbusiness activities of Topband Company to express our audit opinion on the financial statements. We areresponsible for guiding, supervising and implementing the group’s audit and bear full responsibility for the audit
opinion.
We have communicated with the Governance Body about the planned audit scope, timing and significantaudit discovery, including internal control defects identified by us in the audit and deserving attention.
We have also provided the Governance Body with a statement that we have complied with the professionalethics requirements relating to our independence and have communicated with the Governance Body about allrelationships and other matters that may reasonably be believed to affect our independence, as well as relevantprecautions.
From the issues we have communicated with the Governance Body, we have determined which issues are themost important to the audit of the financial statements for the current period and thus constitute key audit matters.We describe these matters in our audit report, unless laws and regulations prohibit public disclosure of suchmatters or, in rare circumstances, we determine that we shall not communicate a certain matter in our audit reportif it is reasonably expected that the negative consequences of communicating such matter in our audit report willexceed the benefits derived in the public interest.
| Beijing, China March 8, 2021 | Chinese Certified Public Accountants: (Project Partners) | |
| Chinese Certified Public Accountants: |
II. Financial Statements
The unit of statements in the financial notes is: Yuan (RMB)
1. Consolidated balance sheet
Prepared by: Shenzhen Topband Co., Ltd.
December 31, 2020
Unit: Yuan
| Items | December 31, 2020 | December 31, 2019 |
| Current assets: | ||
| Monetary funds | 1,219,095,476.50 | 815,641,620.85 |
| Settlement of provisions | ||
| Lending funds |
| Trading financial assets | 226,491,482.10 | 389,012,845.80 |
| Derivative financial asset | ||
| Notes receivable | 39,477,930.63 | 184,241,548.74 |
| Accounts receivable | 1,701,111,153.84 | 1,344,601,325.89 |
| Receivables financing | 246,656,027.27 | |
| Prepayments | 17,735,229.99 | 14,434,888.27 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserves receivable | ||
| Other receivables | 40,728,126.64 | 45,781,832.93 |
| Including: interest receivable | 7295.55 | |
| Dividends receivable | ||
| Repurchase of financial assets for resale | ||
| Inventory | 1,115,312,868.62 | 513,461,655.22 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 68,175,222.37 | 30,780,749.09 |
| Total current assets | 4,674,783,517.96 | 3,337,956,466.79 |
| Non-current assets: | ||
| Loans and advances granted | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investment | 6,502,528.13 | 6,863,474.93 |
| Investment in other equity instruments | ||
| Other non-current financial assets | ||
| Investment property | 89,238,265.71 | 75,980,555.48 |
| Fixed assets | 1,096,875,640.94 | 911,874,844.52 |
| Projects under construction | 292,474,798.41 | 227,919,784.95 |
| Productive biological assets |
| Oil and gas assets | ||
| Use right assets | ||
| Intangible assets | 309,794,540.63 | 228,997,071.35 |
| Development expenditure | 68,518,375.79 | 62,015,182.42 |
| Goodwill | 108,637,368.48 | 143,168,717.85 |
| Long-term unamortized expenses | 72,077,671.09 | 35,637,724.65 |
| Deferred income tax assets | 55,192,974.75 | 39,907,895.92 |
| Other non-current assets | 34,639,355.39 | 51,329,093.10 |
| Total non-current assets | 2,133,951,519.32 | 1,783,694,345.17 |
| Total assets | 6,808,735,037.28 | 5,121,650,811.96 |
| Current liabilities: | ||
| Short-term borrowing | 402,151,500.00 | 173,000,000.00 |
| Borrowing money from the central bank | ||
| Borrowed funds | ||
| Trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 715,574,653.91 | 376,710,352.49 |
| Accounts payable | 1,549,906,339.72 | 977,216,374.27 |
| Advance receipt | 487,267.17 | 37,054,668.04 |
| Contract liabilities | 72,576,117.56 | |
| Financial assets sold for repurchase | ||
| Deposit absorption and interbank deposit | ||
| Acting trading securities | ||
| Acting underwriting securities | ||
| Employee salary payable | 175,503,764.12 | 129,165,174.74 |
| Taxes payable | 60,256,015.60 | 24,435,371.35 |
| Other payables | 57,160,615.93 | 51,515,210.40 |
| Including: Interest payable | 2,988,309.00 | |
| Dividends payable | ||
| Service charges and commissions payable | ||
| Reinsurance accounts payable |
| Liabilities held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | ||
| Total current liabilities | 3,033,616,274.01 | 1,769,097,151.29 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowing | 200,000,000.00 | 200,000,000.00 |
| Bonds payable | 479,891,035.92 | |
| Including: Preferred shares | ||
| Perpetual bond | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term employee compensation payable | ||
| Estimated liabilities | ||
| Deferred income | 14,624,770.00 | 10,022,500.00 |
| Deferred income tax liabilities | 11,819,861.30 | 27,472,884.02 |
| Other non-current liabilities | ||
| Total non-current liabilities | 226,444,631.30 | 717,386,419.94 |
| Total liabilities | 3,260,060,905.31 | 2,486,483,571.23 |
| Owner's equity: | ||
| Share capital | 1,135,216,809.00 | 1,018,775,769.00 |
| Other equity instruments | 104,535,879.24 | |
| Including: Preferred shares | ||
| Perpetual bond | ||
| Capital reserves | 956,734,039.75 | 456,556,282.32 |
| Less: Inventory shares | 80,017,965.68 | 60,009,612.52 |
| Other comprehensive income | -24,555,229.97 | -3,059,762.06 |
| Special reserve | ||
| Surplus reserves | 151,359,957.53 | 127,284,211.74 |
| General risk provision | ||
| Undistributed profit | 1,324,944,369.91 | 866,301,932.11 |
| Total owner's equity attributable to the parent company | 3,463,681,980.54 | 2,510,384,699.83 |
| Minority equity | 84,992,151.43 | 124,782,540.90 |
| Total owners' equity | 3,548,674,131.97 | 2,635,167,240.73 |
| Total liabilities and owners' equity | 6,808,735,037.28 | 5,121,650,811.96 |
Legal Representative: Wu Yongqiang Accounting Head: Xiang Wei Accounting Department Head: Xiang Wei
2. Balance sheet of the parent company
Unit: Yuan
| Items | December 31, 2020 | December 31, 2019 |
| Current assets: | ||
| Monetary funds | 705,163,083.52 | 385,436,535.15 |
| Trading financial assets | 102,133,982.10 | 238,405,345.80 |
| Derivative financial asset | ||
| Notes receivable | 6,939,021.98 | 76,671,962.02 |
| Accounts receivable | 896,265,475.70 | 899,176,641.49 |
| Receivables financing | 217,543,679.19 | |
| Prepayments | 6,953,106.28 | 5,957,082.22 |
| Other receivables | 41,159,647.12 | 117,939,852.28 |
| Including: interest receivable | ||
| Dividends receivable | ||
| Inventory | 209,965,269.91 | 105,521,726.58 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 12,054,327.33 | 6,081,494.93 |
| Total current assets | 2,198,177,593.13 | 1,835,190,640.47 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investment | 2,200,934,231.94 | 1,805,683,606.98 |
| Investment in other equity instruments | ||
| Other non-current financial assets |
| Investment property | ||
| Fixed assets | 120,829,877.70 | 109,399,125.14 |
| Projects under construction | 2,392,458.84 | 565,615.15 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Use right assets | ||
| Intangible assets | 132,732,792.93 | 117,561,989.08 |
| Development expenditure | 44,248,718.56 | 37,718,324.75 |
| Goodwill | ||
| Long-term unamortized expenses | 27,739,322.93 | 12,217,217.91 |
| Deferred income tax assets | 27,692,977.98 | 19,876,957.58 |
| Other non-current assets | 6,997,597.90 | 14,236,345.61 |
| Total non-current assets | 2,563,567,978.78 | 2,117,259,182.20 |
| Total assets | 4,761,745,571.91 | 3,952,449,822.67 |
| Current liabilities: | ||
| Short-term borrowing | 102,151,500.00 | 165,000,000.00 |
| Trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 696,684,142.33 | 252,444,912.50 |
| Accounts payable | 471,203,775.42 | 389,218,701.89 |
| Advance receipt | 19,097,275.28 | |
| Contract liabilities | 29,103,190.50 | |
| Employee salary payable | 91,953,399.79 | 75,793,897.30 |
| Taxes payable | 28,211,920.73 | 5,254,949.29 |
| Other payables | 299,042,515.61 | 243,934,895.76 |
| Including: Interest payable | 2,976,709.00 | |
| Dividends payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | ||
| Total current liabilities | 1,718,350,444.38 | 1,150,744,632.02 |
| Non-current liabilities: | ||
| Long-term borrowing |
| Bonds payable | 479,891,035.92 | |
| Including: Preferred shares | ||
| Perpetual bond | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term employee compensation payable | ||
| Estimated liabilities | ||
| Deferred income | 10,535,500.00 | 9,567,500.00 |
| Deferred income tax liabilities | 8,106,676.00 | 24,289,411.36 |
| Other non-current liabilities | ||
| Total non-current liabilities | 18,642,176.00 | 513,747,947.28 |
| Total liabilities | 1,736,992,620.38 | 1,664,492,579.30 |
| Owner's equity: | ||
| Share capital | 1,135,216,809.00 | 1,018,775,769.00 |
| Other equity instruments | 104,535,879.24 | |
| Including: Preferred shares | ||
| Perpetual bond | ||
| Capital reserves | 1,007,315,299.41 | 457,944,801.38 |
| Less: Inventory shares | 80,017,965.68 | 60,009,612.52 |
| Other comprehensive income | 5,569,575.04 | |
| Special reserve | ||
| Surplus reserves | 151,331,439.07 | 127,255,693.28 |
| Undistributed profit | 805,337,794.69 | 639,454,712.99 |
| Total owners' equity | 3,024,752,951.53 | 2,287,957,243.37 |
| Total liabilities and owners' equity | 4,761,745,571.91 | 3,952,449,822.67 |
3. Consolidated income statement
Unit: Yuan
| Items | 2020 | 2019 |
| I. Gross operating income | 5,560,182,998.21 | 4,098,855,380.70 |
| Including: Operating income | 5,560,182,998.21 | 4,098,855,380.70 |
| Interest income | ||
| Premium earned |
| Service charge and commission income | ||
| II. Total operating costs | 5,030,783,316.55 | 3,797,327,579.71 |
| Including: Operating cost | 4,204,293,830.77 | 3,197,501,735.13 |
| Interest payment | ||
| Service charge and commission payment | ||
| Surrender value | ||
| Net compensation expenditure | ||
| Net reserve amount set aside for insurance liability contracts | ||
| Policy dividend payment | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 21,690,582.69 | 28,337,443.99 |
| Selling expenses | 132,898,433.70 | 134,890,094.70 |
| Management fees | 181,296,178.33 | 142,622,745.50 |
| Research and development costs | 313,618,277.57 | 257,795,968.95 |
| Finance charges | 176,986,013.49 | 36,179,591.44 |
| Including: Interest expense | 41,611,921.13 | 37,039,755.07 |
| Interest income | 7,457,090.20 | 7,330,866.39 |
| Plus: Other income | 35,265,593.47 | 47,420,079.04 |
| Return on investment (loss marked with "-") | 258,578,241.24 | -2,091,016.67 |
| Including: Income from investment in associated enterprises and joint ventures | -360,946.80 | 2,176,410.20 |
| Income from derecognition of financial assets measured at amortized cost | ||
| Exchange gains (loss marked with "-") | ||
| Net exposure hedge gain (loss marked with "-") | ||
| Income from changes in fair value (loss marked with "-") | -105,561,454.64 | 120,249,096.66 |
| Credit impairment loss (loss marked with "-") | 10,647,224.22 | -26,753,102.91 |
| Asset impairment loss (loss marked with "-") | -99,263,678.59 | -48,136,700.20 |
| Income from disposal of assets (loss marked with "-") | -932,817.83 | 2,736.00 |
| III. Operating profit (loss marked with "-") | 628,132,789.53 | 392,218,892.91 |
| Plus: Non-operating income | 3,091,552.14 | 5,994,977.01 |
| Less: Non-operating expenses | 5,057,831.82 | 4,929,940.67 |
| IV. Total profit (total loss marked with "-") | 626,166,509.85 | 393,283,929.25 |
| Less: Income tax expense | 74,971,425.76 | 52,647,079.38 |
| V. Net profit (net loss marked with "-") | 551,195,084.09 | 340,636,849.87 |
| (I) Classification according to business continuity | ||
| 1. Net profit from continuing operation (net loss marked with "-") | 551,195,084.09 | 340,636,849.87 |
| 2. Net profit from termination of operation (net loss marked with "-") | ||
| (II) Classification according to ownership | ||
| 1. Net profit attributable to the shareholders of the parent company | 533,516,814.04 | 330,827,437.00 |
| 2. Profits and losses of minority shareholders | 17,678,270.05 | 9,809,412.87 |
| VI. Net after-tax amount of other comprehensive income | -21,495,467.91 | -6,849,227.44 |
| Net after-tax amount of other comprehensive income attributable to the owner of the parent company | -21,495,467.91 | -6,849,227.44 |
| (I) Other comprehensive income that cannot be reclassified into profits or losses | ||
| 1. Remeasurement of changes in defined benefit plans | ||
| 2. Other comprehensive income that cannot be transferred to profits and losses under the equity method | ||
| 3. Changes in the fair value of other equity instrument investments | ||
| 4. Changes in fair value of the enterprise's own credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income that is reclassified into profits and losses | -21,495,467.91 | -6,849,227.44 |
| 1. Other comprehensive income transferable to profits and losses under the equity method | ||
| 2. Changes in the fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| (4) Provision for credit impairment of other debt investment | ||
| 5. Cash flow hedge reserve | ||
| 6. Difference in translation of foreign-currency financial statements | -27,065,042.95 | -6,849,227.44 |
| 7. Others | 5,569,575.04 | |
| Net after-tax amount of other comprehensive income attributable to minority shareholders | ||
| VII. Total comprehensive income | 529,699,616.18 | 333,787,622.43 |
| Total consolidated income attributable to the owners of the parent company | 512,021,346.13 | 323,978,209.56 |
| Total consolidated income attributable to minority shareholders | 17,678,270.05 | 9,809,412.87 |
| VIII. Earnings per share: | ||
| (I) Basic earnings per share | 0.51 | 0.33 |
| (II) Diluted earnings per share | 0.51 | 0.32 |
In case of merger of enterprises under the same control in the current period, the net profit realized by the mergedparty before the merger is 0 yuan, and the net profit realized by the merged party in the previous period is 0 yuan.Legal Representative: Wu Yongqiang Accounting Head: Xiang Wei Accounting Department Head: Xiang Wei
4. Income statement of the parent company
Unit: Yuan
| Items | 2020 | 2019 |
| I. Operating income | 3,382,368,020.38 | 3,142,124,807.33 |
| Less: Operating cost | 2,795,048,150.10 | 2,624,048,330.36 |
| Taxes and surcharges | 9,802,314.00 | 19,465,142.81 |
| Selling expenses | 85,887,555.58 | 90,889,629.95 |
| Management fees | 116,464,465.35 | 99,296,897.96 |
| Research and development costs | 139,910,160.61 | 142,762,064.99 |
| Finance charges | 137,498,249.51 | 38,691,213.83 |
| Including: Interest expense | 34,251,784.01 | 37,460,920.34 |
| Interest income | 5,563,022.74 | 5,538,876.35 |
| Plus: Other income | 19,920,775.54 | 22,916,956.82 |
| Return on investment (loss marked with "-") | 260,450,508.23 | 17,667,186.47 |
| Including: Income from investment in associated enterprises and joint ventures | -360,946.80 | 2,176,410.20 |
| Income from derecognition of financial assets measured at amortized cost (loss marked with "-") | ||
| Net exposure hedge gain (loss marked with "-") | ||
| Income from changes in fair value (loss marked with "-") | -105,561,454.64 | 116,437,345.80 |
| Credit impairment loss (loss marked with "-") | 12,890,980.63 | -7,845,573.36 |
| Asset impairment loss (loss marked with "-") | -6,126,212.74 | -897,572.25 |
| Income from disposal of assets (loss marked with "-") | -286,627.68 | 734,475.09 |
| II. Operating profit (loss marked with "-") | 279,045,094.57 | 275,984,346.00 |
| Plus: non-operating income | 2,033,271.44 | 5,090,698.61 |
| Less: non-operating expenses | 2,747,958.93 | 3,891,327.26 |
| III. Total profit (total loss marked with "-") | 278,330,407.08 | 277,183,717.35 |
| Less: Income tax expense | 37,572,949.14 | 32,684,808.08 |
| IV. Net profit (net loss marked with "-") | 240,757,457.94 | 244,498,909.27 |
| (I) Net profit from continuing operation (net loss marked with "-") | 240,757,457.94 | 244,498,909.27 |
| (II) Net profit from termination of operation (net loss is marked with "-") | ||
| V. Net after-tax amount of other comprehensive income | 5,569,575.04 | |
| (I) Other comprehensive income that cannot be reclassified into profits or losses | ||
| 1. Remeasurement of changes in defined benefit plans | ||
| 2. Other comprehensive income that cannot be transferred to profits and losses under the equity method | ||
| 3. Changes in the fair value of other equity instrument investments | ||
| 4. Changes in fair value of the enterprise's own credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income that is reclassified into profits and losses | 5,569,575.04 | |
| 1. Other comprehensive income transferable to profits and losses under the equity method | ||
| 2. Changes in the fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investment | ||
| 5. Cash flow hedge reserve | ||
| 6. Difference in translation of foreign-currency financial statements | ||
| 7. Others | 5,569,575.04 | |
| VI. Total comprehensive income | 246,327,032.98 | 244,498,909.27 |
| VII. Earnings per share: | ||
| (I) Basic earnings per share | 0.23 | 0.24 |
| (II) Diluted earnings per share | 0.23 | 0.24 |
5. Consolidated cash flow statement
Unit: Yuan
| Items | 2020 | 2019 |
| I. Cash flow from operating activities: | ||
| Cash received from selling goods and providing services | 5,029,358,595.65 | 3,624,667,545.10 |
| Net increase in customer deposits and interbank deposits | ||
| Net increase in borrowing from the central bank |
| Net increase in funds borrowed from other financial institutions | ||
| Cash from receipt of original insurance contract premiums | ||
| Receipt of net cash for reinsurance operations | ||
| Net increase in savings and investment funds of the insured | ||
| Cash from receipt of interest, service charges and commissions | ||
| Net increase in borrowed funds | ||
| Net increase in funds from repurchase operations | ||
| Net cash received for acting trading securities | ||
| Tax rebates received | 236,631,627.27 | 177,024,186.44 |
| Receipt of other cash related to operating activities | 99,560,021.46 | 88,433,724.01 |
| Subtotal of cash inflow from operating activities | 5,365,550,244.38 | 3,890,125,455.55 |
| Cash paid for purchasing goods and accepting services | 3,505,711,340.07 | 2,537,711,007.03 |
| Net increase in customer loans and advances | ||
| Net increase in deposits with central banks and interbanks | ||
| Cash for payment of claims under original insurance contracts | ||
| Net increase in lending funds | ||
| Cash for payment of interest, service charges and commissions | ||
| Cash for payment of policy dividends | ||
| Cash paid to and for employees | 915,077,720.87 | 691,964,490.19 |
| Various taxes paid | 113,556,882.14 | 77,082,028.22 |
| Other cash paid in connection with operating activities | 183,303,592.92 | 178,890,229.91 |
| Subtotal of cash outflow from operating activities | 4,717,649,536.00 | 3,485,647,755.35 |
| Net cash flow from operating activities | 647,900,708.38 | 404,477,700.20 |
| II. Cash flow from investment activities: | ||
| Cash received from investment recovery | 591,409,909.06 | 1,555,040,000.00 |
| Cash received as return on an investment | 235,969,188.04 | 6,148,573.13 |
| Net cash recovered from the disposal of fixed assets, intangible assets and other long-term assets | 1,738,744.68 | 3,694,571.59 |
| Net cash recovered from the disposal of subsidiaries and other business units | ||
| Other cash received relating to investment activities | 0.00 | 502,944.51 |
| Subtotal of cash inflow from investment activities | 829,117,841.78 | 1,565,386,089.23 |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | 573,790,008.02 | 409,024,790.94 |
| Cash paid for investment | 617,034,000.00 | 1,490,229,514.23 |
| Net increase in pledged loans |
| Net cash paid for acquiring subsidiaries and other business units | 0.00 | 0.00 |
| Other cash paid in connection with investment activities | 20,016,000.00 | 0.00 |
| Subtotal of cash outflow from investment activities | 1,210,840,008.02 | 1,899,254,305.17 |
| Net cash flow from investment activities | -381,722,166.24 | -333,868,215.94 |
| III. Cash flow from financing activities: | ||
| Cash received from absorbing investment | 44,442,375.30 | 0.00 |
| Including: Cash received by subsidiaries' absorption of minority shareholders' investment | ||
| Cash received from loans | 499,724,833.34 | 1,146,000,000.00 |
| Other cash received in connection with financing activities | 51,476,244.39 | 81,570,223.20 |
| Subtotal of cash inflow from financing activities | 595,643,453.03 | 1,227,570,223.20 |
| Cash paid to repay debts | 274,767,315.35 | 696,000,000.00 |
| Cash paid to distribute dividends, profits or pay interest | 77,989,846.88 | 142,867,869.59 |
| Including: Dividends and profits paid by subsidiaries to minority shareholders | 4,061,400.15 | 18,487,894.89 |
| Other cash paid in connection with financing activities | 38,047,377.60 | 117,134,438.20 |
| Subtotal of cash outflow from financing activities | 390,804,539.83 | 956,002,307.79 |
| Net cash flow from financing activities | 204,838,913.20 | 271,567,915.41 |
| IV. Impact of exchange rate fluctuations on cash and cash equivalents | -36,026,940.91 | -10,096,223.51 |
| V. Net increase in cash and cash equivalents | 434,990,514.43 | 332,081,176.16 |
| Plus: Balance of cash and cash equivalents at the beginning of the period | 761,845,320.49 | 429,764,144.33 |
| VI. Balance of cash and cash equivalents at the end of the period | 1,196,835,834.92 | 761,845,320.49 |
6. Cash flow statement of the parent company
Unit: Yuan
| Items | 2020 | 2019 |
| I. Cash flow from operating activities: | ||
| Cash received from selling goods and providing services | 3,371,191,145.42 | 2,904,681,047.98 |
| Tax rebates received | 156,974,447.43 | 137,944,807.75 |
| Receipt of other cash related to operating activities | 981,628,989.96 | 1,029,988,881.80 |
| Subtotal of cash inflow from operating activities | 4,509,794,582.81 | 4,072,614,737.53 |
| Cash paid for purchasing goods and accepting services | 2,594,237,500.42 | 2,257,400,937.47 |
| Cash paid to and for employees | 401,882,971.23 | 382,115,603.80 |
| Various taxes paid | 42,011,867.61 | 28,269,799.36 |
| Other cash paid in connection with operating activities | 823,048,596.85 | 1,077,225,844.00 |
| Subtotal of cash outflow from operating activities | 3,861,180,936.11 | 3,745,012,184.63 |
| Net cash flow from operating activities | 648,613,646.70 | 327,602,552.90 |
| II. Cash flow from investment activities: | ||
| Cash received from investment recovery | 171,209,909.06 | 308,500,000.00 |
| Cash received as return on an investment | 237,841,455.03 | 4,909,426.27 |
| Net cash recovered from the disposal of fixed assets, intangible assets and other long-term assets | 9,857,495.16 | 1,339,164.25 |
| Net cash recovered from the disposal of subsidiaries and other business units | 0.00 | 0.00 |
| Other cash received relating to investment activities | 0.00 | 0.00 |
| Subtotal of cash inflow from investment activities | 418,908,859.25 | 314,748,590.52 |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | 101,947,971.74 | 88,914,297.81 |
| Cash paid for investment | 503,777,500.00 | 492,055,065.22 |
| Net cash paid for acquiring subsidiaries and other business units | 0.00 | 0.00 |
| Other cash paid in connection with investment activities | 20,016,000.00 | 0.00 |
| Subtotal of cash outflow from investment activities | 625,741,471.74 | 580,969,363.03 |
| Net cash flow from investment activities | -206,832,612.49 | -266,220,772.51 |
| III. Cash flow from financing activities: | ||
| Cash received from absorbing investment | 44,442,375.30 | 0.00 |
| Cash received from loans | 102,151,500.00 | 938,000,000.00 |
| Other cash received in connection with financing activities | 18,199,609.19 | 43,016,000.42 |
| Subtotal of cash inflow from financing activities | 164,793,484.49 | 981,016,000.42 |
| Cash paid to repay debts | 166,767,315.35 | 691,000,000.00 |
| Cash paid to distribute dividends, profits or pay interest | 67,753,957.44 | 125,632,313.30 |
| Other cash paid in connection with financing activities | 28,680,695.64 | 81,601,387.13 |
| Subtotal of cash outflow from financing activities | 263,201,968.43 | 898,233,700.43 |
| Net cash flow from financing activities | -98,408,483.94 | 82,782,299.99 |
| IV. Impact of exchange rate fluctuations on cash and cash equivalents | -14,118,735.18 | -10,096,540.34 |
| V. Net increase in cash and cash equivalents | 329,253,815.09 | 134,067,540.04 |
| Plus: Balance of cash and cash equivalents at the beginning of the period | 367,236,925.95 | 233,169,385.91 |
| VI. Balance of cash and cash equivalents at the end of the period | 696,490,741.04 | 367,236,925.95 |
7. Consolidated statement of changes in owner's equity
Current amount
Unit: Yuan
| Items | 2020 | ||||||||||||||
| Owner's equity attributable to the parent company | Minority equity | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Inventory shares | Other comprehensive income | Special reserve | Surplus reserves | General risk provision | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Ending balance of last year | 1,018,775,769.00 | 104,535,879.24 | 456,556,282.32 | 60,009,612.52 | -3,059,762.06 | 127,284,211.74 | 866,301,932.11 | 2,510,384,699.83 | 124,782,540.90 | 2,635,167,240.73 | |||||
| Plus: Changes in accounting policies | 0.00 | ||||||||||||||
| Correction of previous errors | 0.00 | ||||||||||||||
| Merger of enterprises under the same control | 0.00 | ||||||||||||||
| Others | 0.00 | ||||||||||||||
| III. Balance at the beginning of the current year | 1,018,775,769.00 | 0.00 | 0.00 | 104,535,879.24 | 456,556,282.32 | 60,009,612.52 | -3,059,762.06 | 0.00 | 127,284,211.74 | 0.00 | 866,301,932.11 | 2,510,384,699.83 | 124,782,540.90 | 2,635,167,240.73 | |
| III. Amount of increase | 116,441,040.00 | 0.00 | 0.00 | -104,535,879.24 | 500,177,757.44 | 20,008,353.16 | -21,495,467.91 | 0.00 | 24,075,745.79 | 0.00 | 458,642,437.79 | 953,297,280.71 | -39,790,389.47 | 913,506,891.24 | |
| or decrease in the current period (decrease marked with "-") | |||||||||||||||
| (I) Total comprehensive income | -21,495,467.91 | 533,516,814.04 | 512,021,346.13 | 17,678,270.05 | 529,699,616.18 | ||||||||||
| (II) Capital invested and reduced by owners | 116,441,040.00 | -104,426,340.00 | 540,143,546.42 | 20,008,353.16 | 532,149,893.26 | 532,149,893.26 | |||||||||
| 1. Ordinary shares invested by owners | 12,014,700.00 | 32,428,355.38 | 44,443,055.38 | 44,443,055.38 | |||||||||||
| 2. Capital invested by holders of other equity instruments | 104,426,340.00 | -104,426,340.00 | 498,506,425.85 | 498,506,425.85 | 498,506,425.85 | ||||||||||
| 3. Amount of share payment included in owner's equity | 9,208,765.19 | 9,208,765.19 | 9,208,765.19 | ||||||||||||
| 4. Others | 20,008,353.16 | -20,008,353.16 | -20,008,353.16 | ||||||||||||
| (III) Profit distribution | 24,075,745.79 | -74,874,376.25 | -50,798,630.46 | -4,061,400.15 | -54,860,030.61 | ||||||||||
| 1. Withdrawal of surplus reserves | 24,075,745.79 | -24,075,745.79 | |||||||||||||
| 2. Withdrawal of general risk provision | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -50,798,630.46 | -50,798,630.46 | -4,061,400.15 | -54,860,030.61 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carryover |
| of owner's equity | |||||||||||||||
| 1. Conversion of capital reserves to additional capital (or share capital) | |||||||||||||||
| 2. Conversion of surplus reserves to additional capital (or share capital) | |||||||||||||||
| 3. Losses covered with surplus reserve | |||||||||||||||
| 4. Change of defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawal in the current period | |||||||||||||||
| 2. Use in the current period | |||||||||||||||
| (VI) Others | -109,539.24 | -39,965,788.98 | -40,075,328.22 | -53,407,259.37 | -93,482,587.59 | ||||||||||
| IV. Ending balance of the current period | 1,135,216,809.00 | 0.00 | 956,734,039.76 | 80,017,965.68 | -24,555,229.97 | 151,359,957.53 | 1,324,944,369.90 | 3,463,681,980.54 | 84,992,151.43 | 3,548,674,131.97 |
Amount of the previous period
Unit: Yuan
| Items | 2019 | ||||||||||||||
| Owner's equity attributable to the parent company | Minority equity | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Inventory shares | Other comprehensive income | Special reserve | Surplus reserves | General risk provision | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Ending balance of last year | 1,019,046,531.00 | 427,479,116.96 | 40,347,326.50 | 3,789,465.38 | 96,903,853.96 | 627,537,034.07 | 2,134,408,674.87 | 131,954,226.33 | 2,266,362,901.20 | ||||||
| Plus: Changes in accounting policies | 5,930,466.85 | 33,773,958.15 | 39,704,425.00 | 39,704,425.00 | |||||||||||
| Correction of previous errors | 0.00 | 0.00 | |||||||||||||
| Merger of enterprises under the same control | 0.00 | 0.00 | |||||||||||||
| Others | 0.00 | 0.00 | |||||||||||||
| III. Balance at the beginning of the current year | 1,019,046,531.00 | 0.00 | 0.00 | 0.00 | 427,479,116.96 | 40,347,326.50 | 3,789,465.38 | 0.00 | 102,834,320.81 | 0.00 | 661,310,992.22 | 2,174,113,099.87 | 131,954,226.33 | 2,306,067,326.20 | |
| III. Amount of increase or decrease in the current period (decrease marked with "-") | -270,762.00 | 0.00 | 0.00 | 104,535,879.24 | 29,077,165.36 | 19,662,286.02 | -6,849,227.44 | 0.00 | 24,449,890.93 | 0.00 | 204,990,939.89 | 336,271,599.96 | -7,171,685.43 | 329,099,914.53 | |
| (I) Total comprehensive income | -6,849,227.44 | 330,827,437.00 | 323,978,209.56 | 9,809,412.87 | 333,787,622.43 | ||||||||||
| (II) Capital invested and reduced by owners | -270,762.00 | 0.00 | 0.00 | 104,535,879.24 | 18,796,152.89 | 55,907,257.99 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 67,154,012.14 | 0.00 | 67,154,012.14 | |
| 1. Ordinary shares invested by owners | 0.00 | 0.00 | |||||||||||||
| 2. Capital invested by holders of other equity instruments | 40,077.00 | 104,535,879.24 | 181,948.75 | 104,757,904.99 | 104,757,904.99 | ||||||||||
| 3. Amount of share payment included in owner's equity | 18,940,585.09 | 18,940,585.09 | 18,940,585.09 | ||||||||||||
| 4. Others | -310,839.00 | -326,380.95 | 55,907,257.99 | -56,544,477.94 | -56,544,477.94 | ||||||||||
| (III) Profit distribution | 24,449,890.93 | -125,836,497.11 | -101,386,606.18 | -18,487,894.89 | -119,874,501.07 | ||||||||||
| 1. Withdrawal of surplus reserves | 24,449,890.93 | -24,449,890.93 | |||||||||||||
| 2. Withdrawal of general risk provision | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -101,386,606.18 | -101,386,606.18 | -18,487,894.89 | -119,874,501.07 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carryover of owner's equity | |||||||||||||||
| 1. Conversion of capital reserves to additional capital (or share capital) | |||||||||||||||
| 2. Conversion of surplus reserves to additional capital (or share capital) | |||||||||||||||
| 3. Losses covered with surplus reserve |
| 4. Change of defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawal in the current period | |||||||||||||||
| 2. Use in the current period | |||||||||||||||
| (VI) Others | 10,281,012.47 | -36,244,971.97 | 46,525,984.44 | 1,506,796.59 | 48,032,781.03 | ||||||||||
| IV. Ending balance of the current period | 1,018,775,769.00 | 104,535,879.24 | 456,556,282.32 | 60,009,612.52 | -3,059,762.06 | 127,284,211.74 | 866,301,932.11 | 2,510,384,699.83 | 124,782,540.90 | 2,635,167,240.73 |
8. Parent company's statement of changes in owner's equity
Current amount
Unit: Yuan
| Items | 2020 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Inventory shares | Other comprehensive income | Special reserve | Surplus reserves | Undistributed profit | Others | Total owners' equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Ending balance of last year | 1,018,775,769.00 | 104,535,879.24 | 457,944,801.38 | 60,009,612.52 | 127,255,693.28 | 639,454,712.99 | 2,287,957,243.37 | |||||
| Plus: Changes in accounting policies | ||||||||||||
| Correction of previous errors | ||||||||||||
| Others | ||||||||||||
| III. Balance at the beginning of the current year | 1,018,775,769.00 | 104,535,879.24 | 457,944,801.38 | 60,009,612.52 | 127,255,693.28 | 639,454,712.99 | 2,287,957,243.37 | |||||
| III. Amount of increase or decrease in the current period (decrease marked with "-") | 116,441,040.00 | -104,535,879.24 | 549,370,498.03 | 20,008,353.16 | 5,569,575.04 | 24,075,745.79 | 165,883,081.70 | 736,795,708.16 | ||||
| (I) Total comprehensive income | 5,569,575.04 | 240,757,457.94 | 246,327,032.98 | |||||||||
| (II) Capital invested and reduced by owners | 116,441,040.00 | -104,426,340.00 | 540,143,546.42 | 20,008,353.16 | 532,149,893.26 | |||||||
| 1. Ordinary shares invested by owners | 12,014,700.00 | 32,428,355.38 | 44,443,055.38 | |||||||||
| 2. Capital invested by holders of other equity instruments | 104,426,340.00 | -104,426,340.00 | 498,506,425.85 | 498,506,425.85 | ||||||||
| 3. Amount of share payment included in owner's equity | 9,208,765.19 | 9,208,765.19 | ||||||||||
| 4. Others | 20,008,353.16 | -20,008,353.16 | ||||||||||
| (III) Profit distribution | 24,075,745.79 | -74,874,376.24 | -50,798,630.45 | |||||||||
| 1. Withdrawal of surplus reserves | 24,075,745.79 | -24,075,745.79 | ||||||||||
| 2. Distribution to owners (or shareholders) | -50,798,630.45 | -50,798,630.45 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal carryover of owner's equity | ||||||||||||
| 1. Conversion of capital reserves to additional capital (or share capital) | ||||||||||||
| 2. Conversion of surplus reserves to additional capital (or share capital) | ||||||||||||
| 3. Losses covered with surplus reserve | ||||||||||||
| 4. Change of defined benefit plans carried forward to retained earnings | ||||||||||||
| 5. Other comprehensive income carried forward to retained |
| earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Withdrawal in the current period | ||||||||||||
| 2. Use in the current period | ||||||||||||
| (VI) Others | -109,539.24 | 9,226,951.61 | 9,117,412.37 | |||||||||
| IV. Ending balance of the current period | 1,135,216,809.00 | 1,007,315,299.41 | 80,017,965.68 | 5,569,575.04 | 151,331,439.07 | 805,337,794.69 | 3,024,752,951.53 |
Amount of the previous period
Unit: Yuan
| Items | 2019 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Inventory shares | Other comprehensive income | Special reserve | Surplus reserves | Undistributed profit | Others | Total owners' equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Ending balance of last year | 1,019,046,531.00 | 428,286,532.14 | 40,347,326.50 | 96,875,335.50 | 467,418,099.17 | 1,971,279,171.31 | ||||||
| Plus: Changes in accounting policies | 3,567,280.00 | 32,105,520.00 | 35,672,800.00 | |||||||||
| Correction of previous errors | ||||||||||||
| Others | ||||||||||||
| III. Balance at the beginning of the current year | 1,019,046,531.00 | 428,286,532.14 | 40,347,326.50 | 100,442,615.50 | 499,523,619.17 | 2,006,951,971.31 | ||||||
| III. Amount of increase or decrease in the current period (decrease marked with "-") | 104,576,452.47 | 20,037,501.83 | 19,662,286.02 | 27,897,484.48 | 132,849,152.76 | |||||||
| (I) Total comprehensive income | 129,284,090.67 | 129,284,090.67 | ||||||||||
| (II) Capital invested and reduced by owners | 104,576,452.47 | 10,198,829.99 | 55,907,257.99 | 58,868,024.47 | ||||||||
| 1. Ordinary shares invested by owners | ||||||||||||
| 2. Capital invested by holders of other equity instruments | 104,576,452.47 | 104,576,452.47 | ||||||||||
| 3. Amount of share payment included in owner's equity | 10,198,829.99 | 10,198,829.99 | ||||||||||
| 4. Others | 55,907,257.99 | -55,907,257.99 | ||||||||||
| (III) Profit distribution | -101,386,606.19 | -101,386,606.19 | ||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution to owners (or shareholders) | -101,386,606.19 | -101,386,606.19 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal carryover of owner's equity | ||||||||||||
| 1. Conversion of capital reserves to additional capital (or share capital) | ||||||||||||
| 2. Conversion of surplus reserves to additional capital (or share capital) | ||||||||||||
| 3. Losses covered with surplus reserve | ||||||||||||
| 4. Change of defined benefit plans carried forward to retained earnings | ||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| (VI) Others | 9,838,671.84 | -36,244,971.97 | 46,083,643.81 | |||||||||
| IV. Ending balance of the current period | 1,019,046,531.00 | 104,576,452.47 | 448,324,033.97 | 60,009,612.52 | 100,442,615.50 | 527,421,103.65 | 2,139,801,124.07 |
III. Basic information of the Company(I) Basic information of the CompanyRegistered Chinese name of the Company: Shenzhen Topband Co., LtdAddress: Room 413, Area B, Tsinghua University Research Institute, High-tech Industrial Park, Yuehai Street,Nanshan District, Shenzhen
Legal representative: Wu YongqiangRegistered capital: 1,135,216,809.00 yuanShare capital: 1,135,216,809.00 yuanCompany type: company limited by shares (Listing)Business scope: intelligent control of electrical products, intelligent power supply and control, highefficiency lighting products and its control, high efficiency precision motor and control research and development,production and sales.Business term: sustainable operationUnified social credit code: 91440300192413773Q
(II) Historical development of the Company
Shenzhen Topband Co., Ltd. (hereinafter referred to as “the Company” or “Company”) formerly known asShenzhen Topband Electronic Equipment Co., Ltd., is a limited liability Company approved by ShenzhenAdministration for Industry and Commerce on February 9, 1996. It has obtained the business license of enterpriselegal person with the registration number of 19241377-3 and the registered capital of 2 million yuan.On May 19, 1997, the registered capital of Shenzhen Topband Electronic Equipment Co., Ltd. was increasedto 3.2 million yuan after the resolution of the Shareholders’ Meeting of Shenzhen Topband Electronic EquipmentCo., Ltd. and approved by Shenzhen Administration for Industry and commerce.On January 10, 2001, with the resolution of the Shareholders’ Meeting of Shenzhen Topband ElectronicEquipment Co., Ltd. and the approval of Shenzhen Administration for Industry and Commerce (Shenzhen) namechange NZ [2001] No. 0154224 Enterprise Name Change Approval Notice, it was agreed to change the name ofShenzhen Topband Electronic Equipment Co., Ltd. to Shenzhen Topband Electronic Technology Co., Ltd.On July 15, 2002, with the approval of SFG (2002) No. 24 issued by Shenzhen Municipal People’s
Government, it was agreed that Shenzhen Topband Electronic Technology Co., Ltd. would be reorganized into ajoint stock limited Company jointly by five shareholders, namely Wu Yongqiang, Ji Shuhai, Zhuhai TsinghuaScience and Technology Park Venture Capital Co., Ltd., Qi Hongwei and Li Xianqian. After the reorganization,the total share capital of the Company is 21 million yuan. Shenzhen Pengcheng Accounting Firm issued theCapital Verification Report (SPSYZ (2002) No. 67) to verify the share capital of the Company. On August 16,2002, the Company was approved by Shenzhen Administration for Industry and Commerce to register the changeof industry and commerce, in exchange for the business license of enterprise legal person with Registration No.4403012049338. The business period is from February 9, 1996 to February 9, 2046.On November 23, 2004, the registered capital of the Company was increased to 22.8 million yuan upon theresolution of the Shareholders’ Meeting and the document of Shenzhen Municipal People’s Government “SFG[2004] No. 38” and approved by Shenzhen Administration for Industry and Commerce.On March 15, 2006, the registered capital of the Company was increased to 31.92 million yuan by theresolution of the Shareholders’ Meeting of the Company, and change in the industrial and commercial registrationwas handled on July 24, 2006.On June 26, 2007, the Company issued 18.08 million yuan ordinary shares (face value of each share is 1 yuan)to the public with an increase of registered capital of 18.08 million yuan, and the registered capital after the changeis 50 million yuan by the approval of “ZJH No. 2007135” Notice on Approving the Initial Public Offering ofShenzhen Topband Electronic Technology Co., Ltd. by China Securities Regulatory Commission. The investmentbusiness has been verified by Shenzhen Pengcheng Accounting Firm Co., Ltd. and the capital verification reportSPSYZ [2007] No. 059 has been issued.On August 29, 2008, according to the resolution of the Annual General Meeting of Shareholders in 2008, theCompany increased the registered capital by 50 million yuan with capital reserve, and the registered capital afterthe change was 100 million yuan. The capital increase has been verified by Shenzhen Pengcheng AccountingFirm Co., Ltd., and the capital verification report SPSYZ [2008] No. 179 has been issued.The 3rd Board of Directors of the Company deliberated and passed the Plan on the Distribution of Mid-termProfits in 2009 at the 6th meeting in 2009: Based on the total share capital of the Company at the end of the reportingperiod of 100 million shares, 4 shares were added in share capitals per 10 shares for all shareholders regarding thecapital reserves, and the total share capital increased by 40 million shares. After the increase by conversion, the total
share capital of the Company increased from 100 million shares to 140 million shares.On April 7, 2010, the Company held a meeting of the Board of Directors to deliberate and pass the profitdistribution plan for 2009: Based on the total share capital of 140 million shares as of December 31, 2009, theCompany will pay cash dividends of 1.50 yuan (tax included) per 10 shares, and based on the total share capital of140 million shares as of December 31, 2009, 2 shares will be added per 10 shares. After the increase by conversion,the total share capital of the Company increased from 140 million shares to 168 million shares.The Company held the 2nd meeting of the 4th Board of Directors in 2012 on March 26, 2012, deliberated andpassed the profit distribution plan for 2011: Based on the total share capital 168 million shares of the Company onDecember 31, 2011, 2 shares were additionally given to all shareholders for every 10 shares, and cash dividend of 2yuan (tax included) was distributed. 1 share was added per 10 shares for all shareholders regarding the capitalreserves. The equity distribution was completed on May 4, 2012. After the increase by conversion, the total sharecapital of the Company increased from 168 million shares to 218.4 million shares.According to the resolutions of 1st Extraordinary General Meeting of Shareholders of the Company in 2014,after the approval of ZJXK [2014] No. 1425 of China Securities Regulatory Commission, the Company’snon-public offering did not exceed 36,935,679 new shares. On February 5, 2015, the Company privately issued23,521,768 ordinary shares (A shares) in RMB to specific investors at the price of 13.63 yuan per share. After theissuance, the registered capital of the Company was increased to 241,921,768.00 yuan.According to the Revised Draft of the Second Option Incentive Plan (Draft) of Shenzhen Topband Co., Ltd.reviewed and approved by the Company in 2012 Annual General Meeting of Shareholders and the Proposal on theSecond Exercise Period of the Second Phase Stock Option Incentive Plan Meeting with the Exercise Conditions andExercisable Rights, which was deliberated and approved by the 9th meeting of the 5th Board of Directors of theCompany, the total exercise was 3,101,700 stock options in 2015, exercise price is 5.72 yuan each. After exercise,the registered capital of the Company was increased to 245,023,468.00 yuan.According to the Restricted Stock Incentive Plan (Draft) of Shenzhen Topband Co., Ltd. in 2015 approved bythe 2nd Extraordinary General Meeting of Shareholders in 2015 and the Proposal on Adjusting the Number ofRestricted Stock Incentive Plans Granted and List of Incentive Objects approved at the 18th meeting of the 5thBoard of Directors, the Company granted 359 incentive objects restricted shares 17.633 million shares. Theregistered capital of the Company was increased to 262,656,468.00 yuan after the issuance.
According to the resolution of the 3rd Extraordinary General Meeting of Shareholders of the Company in 2015,and approved by the Reply to the Approval of Non-public Development of Shares of Shenzhen Topband Co., Ltd.issued by China Securities Regulatory Commission (ZJXK [2016] No. 205), the Company non-publicly issued35,864,345 ordinary shares (A shares) in RMB to specific investors on March 28, 2016, with the issuance price of
16.66 yuan per share. The registered capital of the Company was increased to 298,520,813.00 yuan after theissuance.
According to the Revised Draft of the Second Phase Stock Option Incentive Plan (Draft) of Shenzhen TopbandCo., Ltd. deliberated and approved by the 2012 Annual General Meeting of Shareholders of the Company and theProposal on the Third Exercise Period of the Second Phase Stock Option Incentive Plan Meeting ExerciseConditions and Exercisable Rights deliberated and approved by the 23rd meeting of the 5th Board of Directors ofthe Company, a total of 4,594,000 shares were exercised in 2016. After exercise, the registered capital of theCompany was increased to 303,114,813.00 yuan.
According to the Proposal on Repurchase and Cancellation of Some Restricted Stocks deliberated and passedby the 24th meeting of the 5th Board of Directors of the Company held on April 26, 2016, as for the incentive objectwho resigned due to personal reasons and no longer met the conditions of becoming the incentive object, those72,000 restricted stocks held by the incentive object were repurchased and cancelled. After cancellation, theregistered capital of the Company was reduced to 303,042,813.00 yuan.
The Company held the 2015 Annual General Meeting of Shareholders on May 11, 2016 and approved the 2015annual equity distribution plan. Based on the Company’s current total share capital of 301,520,013 shares, theCompany distributed 1.50 yuan to all shareholders for every 10 shares. At the same time, the Company increased 5shares to all shareholders for every 10 shares with the capital accumulation fund, and the capital increased by150,760,006 yuan. After the capital is increased, the Company’s registered capital was increased to 453,802,819.00yuan.
According to the Proposal on Repurchase and Cancellation of Some Restricted Stocks deliberated and passedby the 28th meeting of the 5th Board of Directors of the Company held on October 26, 2016, as for the incentiveobject who resigned due to personal reasons and no longer met the conditions of becoming the incentive object,those 331,500 shares of restricted stocks held by the incentive object were repurchased and cancelled. Aftercancellation, the registered capital of the Company was reduced to 453,471,319.00 yuan.
The 2016 Annual General Meeting of Shareholders of the Company was held on April 11, 2017, and the 2016annual equity distribution plan was approved. Based on the Company’s existing total share capital of 453,471,319shares, the Company distributed 1.50 yuan in cash to all shareholders for every 10 shares. At the same time, theCompany increased 5 shares to all shareholders for every 10 shares with the capital reserve, and the capital increasedby 226,735,659 yuan. After the capital increased, the registered capital of the Company was increased to680,206,978.00 yuan.According to the Proposal on Repurchase and Cancellation of Some Restricted Stocks deliberated and passedby the 32nd meeting of the 5th Board of Directors of the Company held on June 13, 2017, as for the incentive objectwho resigned due to personal reasons and no longer met the conditions of becoming the incentive object, the346,500 restricted stocks held by the incentive object were repurchased and cancelled. After cancellation, theregistered capital of the Company was reduced to 679,860,478.00 yuan.
The Company held the 2017 Annual General Meeting of Shareholders on April 17, 2018 to review and pass the2017 equity distribution plan. Based on the existing total capital of 679,860,478 shares, the Company sent 1.0 yuanin cash to all shareholders every 10 shares, and transferred 5 shares to all shareholders with capital reserve fund,with an increase of 339,930,239.00 yuan. After the capital conversion, the registered capital of the Company wasincreased to 1,019,790,717.00 yuan.
According to the Proposal on Repurchase and Cancellation of Some Restricted Stocks deliberated and passedby the 6th meeting of the 6th Board of Directors of the Company held on July 27, 2018, as for the incentive objectwho resigned due to personal reasons and no longer met the conditions of becoming the incentive object, the744,186 restricted stocks held by the incentive object were repurchased and cancelled. After cancellation, theregistered capital of the Company was reduced to 1,019,046,531.00 yuan.
According to the Proposal on Repurchase and Cancellation of Some Restricted Stocks deliberated and passedby the 6th meeting of the 6th Board of Directors of the Company held on July 27, 2018, as for the incentive objectwho resigned due to personal reasons and no longer met the conditions of becoming the incentive object, the744,186 restricted stocks held by the incentive object were repurchased and cancelled. After cancellation, theregistered capital of the Company was reduced to 1,019,046,531.00 yuan.
According to the Proposal on Repurchase and Cancellation of Some Restricted Stocks deliberated and passedby the 15th meeting of the 6th Board of Directors of the Company held on July 26, 2019, as for the incentive object
who resigned due to personal reasons and no longer met the conditions of becoming the incentive object, the310,800 restricted stocks held by the incentive object were repurchased and cancelled. After cancellation, theregistered capital of the Company was reduced to 1,018,735,692 yuan. With the approval of “SZS [2019] No. 164”issued by Shenzhen Stock Exchange, the Company’s 573 million yuan convertible corporate bonds will be listedand traded in Shenzhen Stock Exchange from April 8, 2019. Since September 16, 2019, bondholders can exercisethe right to transfer shares. As of December 31, 2019, the Company has transferred 2,223.00 shares of bonds andincreased the share capital by 40,077.00 yuan. After the share transfer, the registered capital of the Company willincrease to 1,018,775,769.00 yuan.
The 22nd meeting of the 6th Board of Directors deliberated and passed the "Proposal on the First ExercisePeriod of 2018 Stock Option Incentive Plan Meeting the Exercise Conditions and Exercisable Rights" and "Proposalon Adjustment of the Incentive Objects and the Number of Stock Options of 2018 Stock Option Incentive Plan":
there are 606 incentive objects in the first exercise period of the 2018 stock option incentive plan in the Company, intotal of 12,014,700 shares of stock options, that meet the exercise conditions and can be exercised. The Companyplans to adopt the independent exercise mode. As of December 31, 2020, 606 incentive objects in the first exerciseperiod had completed the exercise of 12,014,700 stock options, increased the Company’s share capital by12,014,700 yuan, and the share capital increased to 1,030,790,469.00 yuan after the exercise of the stock options.
According to the document of “SZS [2019] No. 164” by the Shenzhen Stock Exchange, the Company’sconvertible corporate bonds of 573 million yuan are listed and traded on Shenzhen Stock Exchange from April 8,2019. Since September 16, 2019, the bondholders can exercise the equity transfer. In 2020, a total of 5,712,224.00bonds were converted into shares, increasing the share capital by 104,426,340.00 yuan. After the conversion, theregistered capital of the Company was increased to 1,135,216,809.00 yuan.(III) Submission of financial report
The financial report is approved and submitted by the Board of Directors of the Company on March 5, 2021.
From January to December 2020, there are 24 subsidiaries and sub- subsidiaries of the Company included inthe scope of merger. For details, please refer to Interests in Other Entities in Note 9. The merger scope of theCompany in this reporting period increased by 7 compared with that in the previous year. For details, please refer toNote 8 Changes in the Scope of Consolidation.
IV. Preparation basis of the financial report
1. Preparation basis
The financial statements are based on the assumption of continuation of the Company, according to the actualtransactions, in accordance with the relevant provisions of the accounting standards for business enterprises, andbased on the following important accounting policies and accounting estimates.
2. Continuation
The Company has no major doubt on the ability of continuation and other influencing factors for 12 months sincethe end of the reporting period.V. Significant accounting policies and accounting estimatesSpecific accounting policies and accounting estimates reminders:
None
1. Statement on compliance with accounting standards for business enterprisesThe financial statements prepared on the basis of above compiling foundation give a true and full view of thefinancial position, operating results, cash flow and other relevant information of the Company, conforming to therequirements of the latest accounting standards for business enterprises and its application guidelines,interpretations as well as other relevant provisions (collectively referred to as “accounting standards for businessenterprises”) issued by the Ministry of Finance.Additionally, the presentation and disclosure requirements of the No. 15 Rules for the Preparation andPresentation of Information Disclosure of Companies Offering Securities to the Public - General Provisions onFinancial Reporting (revised in 2014) (hereinafter referred to as “No. 15 Document (revised in 2014)”) and theNotice on Matters Related to the Implementation of the New Accounting Standards for Business Enterprises byListed Companies (No. 453 letter from Accounting Department [2018]) were taken as reference in these financialstatements.
2. Accounting period
The accounting year of the Company is from January 1 to December 31 of the Gregorian calendar.
3. Operating cycle
The operating cycle of the Company is from January 1 to December 31 of the Gregorian calendar.
4. Recording currency
RMB is the currency of the main economic environment in which the Company and its domestic subsidiariesoperate, so the Company and its domestic subsidiaries use RMB as the recording currency. The recordingcurrency for the foreign subsidiaries of the Company shall be determined in accordance with the currency of themain economic environment in which they operate. These financial statements of the Company are stated inRMB.
5. Accounting treatment for business combination under and not under common control
The Company, at the date of acquisition, recognizes the difference of the combination cost greater than thefair value share of the Acquiree’s net identifiable assets obtained in the combination as goodwill; if thecombination cost is less than the fair value share of the Acquiree’s net identifiable assets obtained in thecombination, the Company first re-checks the fair value of the Acquiree’s identifiable assets, liabilities andcontingent liabilities as well as the measurement of combination cost. The difference shall be included in thecurrent profits and losses, if the combination cost is still less than the fair value share of the Acquiree’s netidentifiable assets obtained in the combination.
The business combination not under common control realized step by step through multiple transactions shallbe treated as follows:
1. Adjusting the initial investment cost of long-term equity investment. If the equity held before theacquisition date is calculated with the equity method, it shall be re-measured as per the fair value of the equity atthe date of acquisition, and the difference between the fair value and its book value shall be included in the currentinvestment income; if the equity of the Acquiree held before the acquisition date involves changes in othercomprehensive income and other equity accounted under the equity method, it shall be transferred to the currentincome on the acquisition date, excluding other comprehensive income arising from changes in net liabilities ornet assets of the defined benefit plan re-measured by the investee.
2. Recognizing goodwill (or amount included in the current profits and losses). The initial investment cost oflong-term equity investment after the first step adjustment is compared with the fair value share of net identifiable
assets of subsidiaries at the date of acquisition. If the former is greater than the latter, the difference is recognizedas goodwill, otherwise, it is included in the current profits and losses.The situation of disposing equity step by step through multiple transactions to losing control over subsidiaries:
1. Judging whether the transactions in the process of disposing equity step by step to losing control oversubsidiaries belong to the principle of “package transaction”The terms, conditions and economic impact of transactions relating to disposal of equity investment insubsidiaries meet one or more of the following circumstances, which generally indicates that multiple transactionsshould be accounted for as a package transaction:
(1) These transactions were concluded simultaneously or with consideration of mutual influence;
(2) These transactions as a whole can achieve a complete business outcome;
(3) The occurrence of a transaction depends on the occurrence of at least one other transaction;
(4) A transaction is not economical by itself, but it is economical when considered in conjunction with othertransactions.
2. Accounting treatment for transactions in the process of disposing equity step by step to losing control oversubsidiaries belonging to “package transaction”
If the transactions relating to disposal of equity investment in subsidiaries to losing control over subsidiariesbelong to “package transaction”, these shall be treated as a transaction for disposing the subsidiary and losingcontrol; however, the difference between the price of every disposal and the net assets share held in the subsidiarycorresponding to the disposal of investment before losing control shall be recognized as other consolidatedincome in the consolidated financial statements, which shall be transferred to the current profits and losses at thetime of losing control.
In the consolidated financial statements, the remaining equity shall be re-measured according to its fair valueon the date of losing control. The difference between the sum of consideration obtained from equity disposal andfair value of remaining equity less the net assets share held in original subsidiary and continuously calculatedfrom the date of acquisition as per the original shareholding proportion shall be included in the investment incomeof the current period of loss of control. Other comprehensive income related to the equity investment in originalsubsidiary shall be transferred to the current investment income at the time of losing control.
3. Accounting treatment for transactions in the process of disposing equity step by step to losing control oversubsidiaries not belonging to “package transaction”If no loss of control occurs in the disposal of the investment in the subsidiary, the difference between thedisposal price and the net assets share held in the subsidiary corresponding to the disposal of investment in theconsolidated financial statements shall be included in the capital reserve (capital premium or share premium). Ifthe capital premium is insufficient to offset, the retained earnings shall be adjusted.
In case of losing control over the investment in a subsidiary, the remaining equity shall be re-measuredaccording to its fair value on the date of loss of control in the consolidated financial statements. The differencebetween the sum of consideration obtained from equity disposal and fair value of remaining equity less the netassets share held in original subsidiary and continuously calculated from the date of acquisition as per the originalshareholding proportion shall be included in the investment income of the current period of loss of control. Othercomprehensive income related to the equity investment in original subsidiary shall be transferred to the currentinvestment income at the time of losing control.
6. Compiling method of consolidated financial statements
The consolidated financial statements, based on the financial statements of the parent company and itssubsidiaries, are prepared by the Company in accordance with the Accounting Standards for Business EnterprisesNo.33-Consolidated Financial Statements and with reference to other relevant information.
During the combination, the internal equity investment and the owner’s equity of the subsidiaries, theinternal investment income and the profit distribution of the subsidiaries, the internal transactions, the internalclaims and debts are offset. The accounting policies adopted by the subsidiaries shall be consistent with thoseadopted by the parent company.
7. Classification of joint venture arrangements and accounting treatment for joint operation
1. Identification and classification of joint venture arrangements
Joint venture arrangement refers to an arrangement under joint control by two or more parties. The jointventure arrangement has the following features: 1) all parties are bound by the arrangement; 2) two or more partiesjointly control the arrangement. No single party can control the arrangement solely, and any party with joint controlover the arrangement can prevent other parties or a combination of party alliance from controlling the arrangement
alone.Joint control refers to the common control of an arrangement in accordance with relevant agreements, andthe activities related to the arrangement must be agreed upon by the parties holding control right before decisioncan be made.Joint venture arrangement includes joint operation and joint venture. Joint operation is the joint venturearrangement in which the joint venture party holds the relevant assets of the arrangement and assumes the relevantliabilities. The term “joint venture” refers to a joint venture arrangement in which the joint venture party has rightsonly to the net assets of the arrangement.
2. Accounting treatment for joint venture arrangement
Parties in joint operation shall recognize the following items related to their share of interests in joint operation,and perform accounting treatment in accordance with applicable accounting standards for business enterprises: 1)recognize the assets held separately and those held jointly as per their share; 2) recognize the liabilities assumedseparately and those assumed jointly as per their share; 3) recognize the income generated from the sale of its shareof joint operation output; 4) recognize the income from the sale of the output of the joint operation as per its share; (5)recognize the expenses incurred separately and those incurred in the joint operation as per its share.The parties of a joint venture shall make accounting treatment for the investment in the joint venture inaccordance with the Accounting Standards for Business Enterprises No.2 - Long-Term Equity Investment.
8. Standards for determining cash and cash equivalents
Cash in the cash flow statement refers to cash on hand and deposits that are available for payment at any time.Cash equivalents refer to investments with short term (generally due within three months from the date ofpurchase), strong liquidity, easy to convert into known amount of cash and low risk of value change.
9. Foreign currency transaction and foreign currency statement translation
1. Foreign currency transaction conversion
When foreign currency transactions are initially recognized, they are converted into RMB at the spotexchange rate on the transaction date. On the balance sheet date, foreign currency monetary items are translated atthe spot exchange rate on the balance sheet date. The exchange difference arising from different exchange ratesshall be included in the current profits and losses, except for the exchange difference of the principal and interest
of foreign currency special borrowings related to the acquisition and construction of assets that meet thecapitalization conditions; foreign currency non-monetary items measured at historical cost shall be translated atthe spot exchange rate on the transaction date, with the amount in RMB maintaining unchanged; foreign currencynon-monetary items measured at fair value shall be translated at the spot exchange rate on the date of determiningfair value, with the difference included in the current profits and losses or other comprehensive income.
2. Translation of foreign currency financial statements
The assets and liabilities in balance sheet shall be translated at the spot exchange rate on the balance sheet date;except for the “undistributed profit”, other items in the owner’s equity shall be converted at the spot exchange rateon the transaction date; the income and expense in the income statement shall be converted at the spot exchange rateon the transaction date. The difference in translation of foreign currency financial statements generated from theabove conversion is recognized as other comprehensive income.
10. Financial instruments
1. Recognition and de-recognition of financial instruments
The Company recognizes a financial asset or financial liability when it becomes a party to a financialinstrument contract.
The trading of financial assets in a conventional manner shall be recognized and derecognized according tothe accounting of the trading day. Conventional trading of financial assets refers to the collection or delivery offinancial assets within the time limit specified by laws and regulations or common practice in accordance with theterms of the contract. The term “trading day” refers to the date when the Company promises to buy or sellfinancial assets.
If the following conditions are met, the financial assets (or a part of financial assets, or a part of a set of similarfinancial assets) shall be derecognized, i.e., they shall be written off from its accounts and balance sheets:
(1) The right to receive cash flow of financial assets has expired;
(2) The right to receive cash flow of financial assets has been transferred, or the Company has assumed theobligation to timely pay the full amount of the cash flow received to a third party under the “transfer agreement”;and (a) has transferred substantially all the risks and rewards from the ownership of financial assets, or (b)abandoned the control of the financial asset, though almost all risks and rewards from the ownership of the financial
asset are neither transferred nor retained s.
2. Classification and measurement of financial assets
At the time of initial recognition, the financial assets of the Company are classified according to theCompany’s business model for the management of financial assets and the contractual cash flow characteristics offinancial assets as follows: financial assets measured at amortized cost, financial assets measured at fair valuethrough other comprehensive income, and financial assets measured at fair value through current profits andlosses. The subsequent measurement of financial assets depends on its classification.The classification of financial assets is based on the Company’s business model for the management offinancial assets and the cash flow characteristics of financial assets.
(1) Financial assets measured at amortized cost
Financial assets satisfying the following conditions at the same time are classified as financial assetsmeasured at amortized cost: The business model for managing such financial assets by the Company is to collectcontractual cash flows as the goal; the contract terms of the financial assets stipulate that the cash flow generatedon a specific date is only the payment of the principal and the interest based on the outstanding principal amount.For such financial assets, the effective interest rate method is adopted, and subsequent measurement is made atamortized cost, and the gains or losses arising from amortization or impairment are included in the current profitsand losses.
(2) Debt instruments investment measured at fair value with changes included in other comprehensive income
Financial assets that meet the following conditions at the same time are classified as financial assetsmeasured at fair value through other comprehensive income: The business model for managing the financialassets by the Company is to collect contractual cash flows and to sell financial assets; The contract terms of thefinancial asset stipulate that the cash flow generated on a specific date is only the payment of the principal and theinterest based on the outstanding principal amount. For such financial assets, fair value is adopted for subsequentmeasurement. The discount or premium is amortized using the effective interest rate method and recognized asinterest income or expense. Except the impairment loss and the exchange difference of foreign currency monetaryfinancial assets are recognized as the current profits and losses, the changes in the fair value of such financialassets are recognized as other comprehensive income until their accumulated gains or losses are transferred intothe current profits and losses when the financial asset is derecognized. Interest income related to such financial
assets is included in the current profits and losses.
(3) Equity instrument investment measured at fair value with changes included in other comprehensive incomeThe Company irrevocably chooses to designate part of the non-tradable equity instrument investment asfinancial assets measured at fair value through other comprehensive income. Only the relevant dividend income isincluded in the current profits and losses, and the changes in fair value are recognized as other comprehensiveincome, until their accumulated gains or losses are transferred into retained earnings when the financial asset isderecognized.
(4) Financial assets measured at fair value with changes included in the current profits and lossesThe financial assets other than the above financial assets measured at amortized cost and those at fair valuethrough other comprehensive income are classified as financial assets measured at fair value with changesincluded in the current profits and losses. At the time of initial recognition, for the purpose of elimination orsignificant reduction of accounting mismatch, financial assets can be designated as those measured at fair valuewith changes included in the current profits and losses. For such financial assets, fair value is used for subsequentmeasurement, and all changes in fair value are included in the current profits and losses.If and only when the Company changes the business model for managing financial assets, it will reclassify allthe affected financial assets.
For the financial assets measured at fair value and whose changes are included in the current profits andlosses, the relevant transaction costs are directly included in the current profits and losses, and such costs of othertypes of financial assets are included in the initial recognition amount.
3. Classification and measurement of financial liabilities
The financial liabilities of the Company are classified at the initial recognition as follows: financial liabilitiesmeasured at amortized cost and financial liabilities measured at fair value through current profits and losses.
Financial liabilities that meet one of the following conditions can be designated as financial liabilitiesmeasured at fair value through current profits and losses at the time of initial measurement: (1) such designation caneliminate or significantly reduce accounting mismatch; (2) according to the company risk management orinvestment strategy stated in formal written documents, the management and performance evaluation for thefinancial liabilities portfolio or portfolio of financial assets and financial liabilities is conducted on the basis of fair
value, which is reported to key management personnel within the Company on this basis; (3) the financial liabilitiesinclude embedded derivatives that need to be split separately.The Company determines the classification of financial liabilities at the time of the initial recognition. Forthe financial liabilities measured at fair value with changes included in the current profits and losses, the relevanttransaction costs are directly included in the current profits and losses, and such costs of other financial liabilitiesare included in the initial recognition amount.The subsequent measurement of financial liabilities depends on its classification
(1) Financial liabilities measured at amortized cost
For such financial liabilities, the effective interest rate method is adopted and the subsequent measurement isconducted as per the amortized cost.
(2) Financial liabilities measured at fair value with changes included in the current profits and losses
Financial liabilities measured at fair value through current profits and losses include trading financial liabilities(including derivatives belonging to financial liabilities) and financial liabilities designated at initial recognition asmeasured at fair value with changes included in the current profits and losses.
4. Set off of financial instruments
If the following conditions are met at the same time, financial assets and financial liabilities are presented inthe balance sheet at the net amount after offsetting each other: the Company has the legal right to offset therecognized amount, which is currently enforceable; they plan to settle at the net amount, or realize the financialassets and pay off the financial liabilities at the same time.
5. Impairment of financial assets
The Company recognizes the loss provision based on the expected credit loss for the financial assetsmeasured at the amortized cost, the debt instrument investment and financial guarantee contract measured at thefair value and whose changes are included in other comprehensive income. The term “credit loss” refers to thedifference between all the contractual cash flows that the Company discounted at the original effective interestrate and received according to the contract and all the expected cash flows, i.e., the present value of all the cashshortage.
The Company, taking into account all reasonable and well founded information (including forward-lookinginformation) estimates the expected credit losses of financial assets measured at amortized cost and financial
assets (debt instruments) measured at fair value with changes included in other comprehensive income in a singleor combined way.
(1) Measurement of expected credit loss
If the credit risk of the financial instrument has increased significantly since the initial recognition, theCompany measures its loss provision according to the amount equivalent to the expected credit loss of the financialinstrument in the whole duration; if the credit risk of the financial instrument has not increased significantly sincethe initial recognition, the Company measures its loss provision according to the amount equivalent to the expectedcredit loss of the financial instrument in the next twelve months. The increased or reversed amount of the lossprovisions arising therefrom shall be included in the current profits and losses as impairment losses or gains. Thespecific assessment of credit risk by the Company is detailed in the Note “9. Risks Associated with FinancialInstruments”.Generally, if it is overdue for more than 30 days, the Company considers that the credit risk of the financialinstrument has increased significantly, unless there is conclusive evidence to prove that the credit risk of thefinancial instrument has not increased significantly since the initial recognition.To be specific, the Company divides the credit impairment process of financial instruments that have notbeen impaired at the time of purchase or origination into three stages, with different accounting treatment for theimpairment of financial instruments at different stagesFirst stage: credit risk has not increased significantly since initial recognitionFor the financial instrument at this stage, the enterprise shall measure the loss provision according to theexpected credit loss in the next 12 months, and calculate the interest income as per its book balance (i.e. withoutdeducting the impairment provision) and the actual interest rate (if the instrument is a financial asset, the samebelow).Second stage: the credit risk has increased significantly since the initial recognition, but the creditimpairment has not occurredFor the financial instrument at this stage, the enterprise shall measure the loss provision according to theexpected credit loss of the instrument thought the whole duration, and calculate the interest income as per its bookbalance and the actual interest rate.
Third stage: credit impairment occurs after initial recognitionFor the financial instrument at this stage, the enterprise should measure the loss provision according to theexpected credit loss of the instrument thought the whole duration, but the calculation of interest income isdifferent from the financial assets at the first two stages. For the financial assets with credit impairment, theenterprise shall calculate the interest income according to its amortized cost (book balance minus accruedprovision for impairment, i.e. book value) and the actual interest rate.For the financial assets with credit impairment at the time of purchase or origination, the enterprise shall onlyrecognize the change of expected credit loss in the whole duration after initial recognition as loss provision, andcalculate the interest income as per its amortized cost and the effective interest rate adjusted by credit.
(2) For financial instruments with low credit risk on the balance sheet date, the Company directly assumes thatthe credit risk of such instruments has not increased significantly since the initial recognition, while not comparingthem with the credit risk at the time of initial recognition.A financial instrument may be considered to have a lower credit risk if the enterprise recognizes that thefinancial instruments feature low default risk, the borrower is able to fulfill its obligations to pay the contractualcash flow in the short term, and that even if there are adverse changes in economic situation and operatingenvironment over a longer period of time, it does not necessarily reduce the borrower’s ability to fulfill itsobligations to pay the contractual cash flow.
(3) Receivables and lease receivables
The Company measures the loss provisions as per the amount of expected credit losses throughout the wholeduration by the use of simplified model for expected credit loss for receivables specified in Accounting Standardsfor Business Enterprises No.14 - Income, excluding significant financing components (including cases in whichfinancing components in contracts not exceeding one year are not taken into account in accordance with thestandards).
The Company makes accounting policy choices to adopt a simplified model for expected credit loss, i.e.,measuring the loss provisions as per the amount equivalent to the expected credit loss throughout the whole durationfor receivables including significant financing components and lease receivables regulated by AccountingStandards for Business Enterprises No.21 - Leasing.
6. Transfer of financial assets
If the Company has transferred almost all risks and rewards in the ownership of financial assets to thetransferee, it shall terminate the recognition of the financial assets, and if it retains almost all risks and rewards inthe ownership of the financial assets, it shall not terminate the recognition of the financial assets.If the Company neither transfers nor retains almost all the risks and rewards in the ownership of the financialasset, the following conditions shall be referred to: if it gives up the control over the financial asset, it shallterminate the recognition of the financial asset and recognize the assets and liabilities generated; if it does notabandon the control over the financial asset, the relevant financial assets shall be recognized according to theextent to which it continues to be involved in the transferred financial asset, and the relevant liabilities shall berecognized accordingly.
If the financial guarantee is provided to the transferred financial assets to continue to be involved, the assetsgenerated from the continued involvement shall be recognized according to the lower of the book value of thefinancial assets and the amount of financial guarantee. Financial guarantee amount refers to the maximum amountthat will be required to be repaid out of consideration received.
11. Notes receivable
The Company divides notes receivable into two portfolios of bank acceptance bills and commercialacceptance bills by type of financial instrument. With respect to bank acceptance bills, the Company considers itsoverdue default risk to be 0 for it has low overdue credit loss which has not significantly increased since the initialrecognition, because the acceptance bank pays the payee or holder a certain amount unconditionally when the billis due. In respect of commercial acceptance bills, the Company believes that the probability of default iscorrelated with the aging, and the transfer provision shall be accrued according to the accounting estimate policyof expected credit loss of above accounts receivable.
12. Accounts receivable
The Company measures the loss provisions as per the amount of expected credit losses throughout the wholeduration by the use of simplified model for expected credit loss for receivables specified in Accounting Standardsfor Business Enterprises No.14 - Income, excluding significant financing components (including cases in whichfinancing components in contracts not exceeding one year are not taken into account in accordance with thestandards). The increased or reversed amount of loss provisions generated therefrom shall be included in the
current profits and losses as impairment losses or gains.The Company has implemented Accounting Standard No.22 - Recognition and Measurement of FinancialInstruments (CK [2017] No.7) since January 1, 2019. The Company believes that the probability of default is relatedto the aging, which is still a mark of whether the credit risk of the Company’s accounts receivable increasessignificantly, after it has reviewed the appropriateness of the provision for bad debts receivable in previous yearsbased on the Company’s historical bad debt losses. Therefore, credit risk loss of the Company’s accounts receivableis still estimated on the basis of aging according to the original loss ratio of previous years. The accounting policiesfor measuring overdue credit loss of accounts receivable adopted by the Company are as follows:
1. Receivables with significant individual amount and individual provision for bad debtsSignificant individual amount refers to the amount of which the ending balance of individual receivables ismore than 1 million yuan.
At the end of the period, a separate impairment test will be carried out on the individual receivables withsignificant amount. If there is objective evidence that it is impaired, the impairment loss shall be recognized withprovision for bad debts according to the difference between the present value of future cash flow and the bookvalue.
2. Receivables with provision for bad debts by portfolio
The individual receivables with not significant amount at the end of the period, together with the receivablesthat have not been impaired after separate test, are divided into several portfolios according to the aging as thecredit risk characteristics, and the impairment loss is calculated and determined according to a certain proportionof the ending balance of these receivables portfolio (the impairment test can be conducted separately), withprovision for bad debts.
Except for the receivables for which impairment provision has been made separately, the Companydetermines the proportion for following bad debt provision based on the actual loss rate of the portfolio of thesame or similar receivables in previous years with the aging of receivables as the credit risk feature and incombination with the current situation:
| Aging | Estimated loss of accounts receivable (note) | Estimated loss of other receivables |
| Within 1 year (including 1 year) | 3.10% | 5.00% |
| 1-2 years (including 2 years) | 9.04% | 10.00% |
| 2-3 years (including 3 years) | 22.11% | 30.00% |
| 3-4 years (including 4 years) | 47.51% | 50.00% |
| 4-5 years (including 5 years) | 84.26% | 80.00% |
| More than 5 years | 100.00% | 100.00% |
| Among which: those that have been determined to be irrecoverable | Write off | Write off |
Note: when measuring the expected credit loss of receivables, the Company has referred to the historicalexperience of credit loss and adjusted it based on the forward-looking estimates.
3. Receivables with not significant amount but with individual provision for bad debts
Reasons for individual provision for bad debts: the Company conducts a separate impairment test for thereceivables with the following characteristics, although its amount is not significant. If there is objective evidencethat the receivables are impaired, the impairment loss shall be recognized with provision for bad debts accordingto the difference between the present value of future cash flow and the book value; receivables that are in disputewith the other party or involved in litigation or arbitration; receivables that have obvious indications that thedebtor is likely to be unable to perform the repayment obligation, etc.Method for bad debt provision: the impairment test shall be conducted separately. If there is objective evidencethat it has been impaired, the impairment loss shall be recognized with provision for bad debts according to thedifference between the present value of future cash flow and its book value.
13. Financing of receivables
Financial assets that meet the following conditions at the same time are classified as financial assetsmeasured at fair value through other comprehensive income: The business model for managing the financialassets by the Company is to collect contractual cash flows and to sell financial assets; The contract terms of thefinancial asset stipulate that the cash flow generated on a specific date is only the payment of the principal and theinterest based on the outstanding principal amount.
If the Company transfers the receivables held by it in the form of discount or endorsement, which is frequentand involves a large amount, and its management business mode is essentially the collection and sale of thecontractual cash flow, it is classified into financial assets whose changes are measured at fair value and includedin other comprehensive income in accordance with the accounting standards of financial instruments.
14. Other receivables
Recognition method and accounting treatment for expected credit loss of other receivables
Recognition method and accounting treatment for expected credit loss of other receivablesThe Company measures the impairment loss by an amount equivalent to the expected credit loss within thenext 12 months or over the entire duration, depending on whether the credit risk of other receivables has increasedsignificantly since the initial recognition. In addition to other receivables with individual credit risk assessment,they are divided into different portfolios based on their credit risk characteristics:
| Items | Basis for determining the portfolios |
| Risk-free portfolio | This portfolio is a risk-free account receivable. |
| Aging portfolio | The credit risk of the portfolio is characterized by the aging of receivables. |
15. Inventories
1. Classification of inventories
Inventories refer to the finished products or commodities held by a company for sale, the unfinished productsin the process of production and outsourced processing, and the materials and supplies consumed for productionor rendering of labor service in daily activities of the company.The Company’s inventories mainly include raw materials (including auxiliary materials and wrappages),outside processing materials, unfinished products, self-made semi-finished products, goods on hand and low valueconsumables.
2. Valuation method of delivered inventories
The delivered inventories are subject to the weighted-average system.
3. The basis for determination of net realizable value of inventories and the method for calculation ofinventory revaluation reserves
On the balance sheet date, the inventories are measured at the lower of cost and net realizable value, and theinventory revaluation reserves are calculated at the difference between the cost of inventory category and the netrealizable value. The net realizable value of the inventories ready for sale is determined at the estimated sale priceof such inventories minus the estimated sales expenses and relevant taxes during normal production and operation,and that of the inventories to be processed is determined at the estimated sale price of the finished products minusthe costs, sales expenses and relevant taxes estimated to be incurred up to completion during normal productionand operation. On the balance sheet date, the net realizable values are determined separately and compared withthe corresponding costs to determine the amount of withdrawal or reversal of inventory revaluation reserve if apart of inventory is subject to the contractual price agreement and the rest is not.
Net realizable value refers to the amount of the estimated sale price of the inventories minus the costs, salesexpenses and relevant taxes estimated to be incurred up to completion in daily activities. For the provision ofinventory revaluation reserve, it is made based on a single inventory item for various inventories and in acombined manner for the inventories which are related to the product line produced and sold in the same region,difficult to be measured separately from other items and for the same or similar end use or purpose.
4. Inventory system
Perpetual inventory system is applied for the inventories.
5. Amortization method of low value consumables and wrappage
Both low value consumables and wrappage are amortized with one-off amortization method when they arereceived.
16. Contractual assets
None
17. Contract costs
None
18. Assets held for sale
The Company classifies corporate components (or non-current assets) that meet the following conditions as the assets held forsale: (1) The corporate components can be sold immediately under current background in accordance with thepractice of sales of such assets or disposal portfolio in similar transactions; (2) The sale is very likely to take placeand expected to be completed within one year since a resolution has been made on a sale plan and a definitepurchase commitment has been obtained (definite purchase commitment refers to a legally binding purchaseagreement that is signed by a company with other parties and indicates the important clauses with respect to thetransaction price, time and severe penalties for breach of contract to minimize the possibility of major adjustmentor revocation of the agreement.).It has been approved by the relevant authority or regulators in accordance withrelevant regulations.
The company adjusted the estimated net residual value of the asset held for sale to the net amount (not morethan the original book value of such asset held for sale) reflecting its fair value minus the sales expenses. If theoriginal book value is higher than the adjusted estimated net residual value, the difference between the two wasdeemed as the asset impairment loss and included in the current profits and losses, and the provision for
impairment of assets held for sale shall be made. For the amount of asset impairment loss recognized for thedisposal portfolio held for sale, it is necessary to offset the book value of goodwill in the disposal portfolio andthen offset the book value of the specified non-current assets in the disposal portfolio applicable for beingmeasured in accordance with the Standard in proportion.If the net amount of the fair value of the non-current assets held for sale minus the sales expenses increaseson the subsequent balance sheet date, the amount written-down previously shall be recovered and reversed withinthe amount of asset impairment loss recognized after such non-current assets are classified as the assets held forsale. The reversed amount shall be included in the current profits and losses. The asset impairment loss recognizedbefore such non-current assets are classified as the assets held for sale shall not be reversed. If the net amount ofthe fair value of the disposal portfolio held for sale minus the sales expenses increases on the subsequent balancesheet date, the amount written-down previously shall be recovered and reversed within the amount of impairmentloss recognized for the non-current assets applicable for being measured in accordance with the Standard aftersuch disposal portfolio is classified as the assets held for sale. The reversed amount shall be included in thecurrent profits and losses. It is not allowed to reverse the book value of the goodwill that has been written downand the impairment loss recognized for the non-current assets applicable for being measured in accordance withthe Standard before such assets are classified as the assets held for sale. The book value of the subsequentlyreversed amount of the asset impairment loss recognized for the disposal portfolio held for sale shall be increasedaccording to the proportion of the book value of non-current assets applicable for being measured in accordancewith the Standard except for the goodwill in the disposal portfolio.If the Company loses control over its subsidiary for some reasons such as the sale of its investment into itssubsidiary, it shall classify the entire investment into its subsidiary as the assets held for sale in the individualfinancial statement of the parent company and classify all assets and liabilities of the subsidiary as the assets heldfor sale in the consolidated financial statements provided that the investment into its subsidiary to be sold meetsthe conditions for classification of assets held for sale.
19. Debt investment
None
20. Other debt investments
None
21. Long-term receivables
None
22. Long-term equity investment
1. Determination of investment cost
(1) If the investment cost is incurred in business combination under the same control in which case thecombining party pays the combination consideration in cash, by transferring the non-cash assets, undertaking thedebts or issuing the equity securities, the initial investment cost shall be determined on the basis of the share of theowner's equity of the combined party in the book value of the ultimate controlling party's consolidated financialstatements on the combination date. For the difference between the initial investment cost of long-term equityinvestment and the book value of the consideration paid for combination or the total face value of the issuedshares, the capital reserve (capital premium or share premium shall be adjusted). If the capital reserve isinsufficient to be offset, the retained earnings shall be adjusted.
If a business combination under the same control is realized step by step, the initial investment cost shall bedetermined on the basis of the share of the owner's equity of the combining party in book that is obtained from thecombined party on the combination date and calculated at shareholding ratio. For the difference between theinitial investment cost and the sum of the book value of the original long-term equity investment plus the bookvalue of the consideration newly paid for acquiring further shares on the combination date, the capital reserve(capital premium or share premium shall be adjusted). If the capital reserve is insufficient to be offset, the retainedearnings shall be adjusted.
(2) If the investment cost is incurred in business combination under different controls, the initial investmentcost shall be determined as the fair value of the consideration paid for combination on the purchase date.
(3) Investment costs other than those incurred in business combination: The initial investment cost shall bethe purchase price paid actually if the investment is obtained by paying cash, the fair value of the issued equitysecurities if by issuing the equity securities, and the value specified in the investment contract or agreement incase of investment from an investor (unless the unfair value is specified in the contract or agreement).
2. Subsequent measurement and recognition methods for profit and loss
The long-term equity investment that the Company has the control over the investee shall be calculated with
cost method in its individual financial statement; those under the same control or significant influence shall becalculated with equity method.If cost method is applied, the long-term equity investments shall be priced at the initial investment cost. Thecash dividends or profits declared to be distributed by the investee other than those that have been declared but notdistributed and included in the price or consideration paid actually when the investment is obtained shall berecognized as the current investment profit, and it is necessary to consider whether the long-term investment isimpaired in accordance with the relevant policy of asset impairment.When the equity method is applied, if the initial investment cost of a long-term equity investment is greaterthan the share of fair value of identifiable net assets entitled from the investee at the time of investment, it shall beincluded in the initial investment cost of the long-term equity investment; otherwise, the difference shall beincluded in the current profits and losses and the cost of long-term equity investment shall be adjusted.
When the equity method is applied, the profit and loss on investment shall be recognized and the book valueof the long-term equity investment shall be adjusted according to share of the net profit and loss that should beentitled or shared and have been realized by the investee after the long-term equity investment is obtained. Whenthe share of the net profit and loss entitled from the investee is recognized, the proportion attributable to theinvestor shall be calculated at the shareholding ratio after offsetting the profits and losses of internal transactionswith associated companies and joint ventures (full amount shall be recognized if the losses of internal transactionsare the asset impairment losses) in light of the accounting policies and period of the Company on the basis of thefair value of the identifiable assets of the investee when the investment is obtained, and the net profit of theinvestee shall be recognized after adjustment. The portion to be distributed shall be calculated with reference tothe profits or cash dividends declared to be distributed by the investee, and the book value of the long-term equityinvestment shall be reduced accordingly. The Company recognizes the net loss incurred by the investee to theextent that the book value of the long-term equity investment and other long-term equity substantially constitutingthe net investment into the investee are written down to zero, unless the Company is liable for extra losses. Thebook value of the long-term equity investment was adjusted and included in the owner's equity for other changesin the owner's equity other than the net profit and loss of the investee.
3. Basis for determination of control over and significant influence on the investee
Control refers to having the power over the investee, being entitled to variable returns by participating in the
relevant activities of the investee and able to influence the amount of return by exercising the power over theinvestee. Significant influence refers to that the investor has the right to participate in decision-making in terms ofthe financial and operating policies of the investee but has no right to control or jointly control the formulation ofthese policies with other parties.
4. Disposal of long-term equity investment
(1) Partial disposal of long-term equity investments into subsidiaries without loss of controlThe difference between the disposal price and the corresponding book value of the disposed investment shallbe recognized as the current investment profit in case of partial disposal of long-term equity investments intosubsidiaries without loss of control.
(2) Loss of control over subsidiaries due to partial disposal of long-term equity investments or other reasonsIf the control over the subsidiaries is lost due to partial disposal of long-term equity investments or otherreasons, the book value of the long-term equity investment corresponding to the sold equity shall be carriedforward for the disposed equity, and the difference between the sales price and the book value of the disposedlong-term equity investment shall be recognized as investment profit (loss). In addition, the remaining equity shallbe recognized as long-term equity investment or other related financial assets at its book value. The remainingequity after disposal that has joint control or significant influence on the subsidiaries shall be subject to theaccounting treatment in accordance with the relevant regulations on the conversion from the cost method to theequity method.
5. Methods for impairment test and provision of impairment reserve
If there is any objective evidence showing that the investments into subsidiaries, affiliated companies andjoint ventures are impaired on the balance sheet date, the provision of impairment reserve shall be madeaccordingly based on the difference between the book value and the recoverable amount.
23. Investment real estate
Measurement model of investment real estateMeasurement with cost methodDepreciation or amortization method
1. Investment real estate includes leased land use rights, land use rights held and ready to be assigned after
appreciation, and leased buildings.
2. Investment real estate is measured initially at cost and subsequently with cost model. The provision fordepreciation and amortization of the investment real estate are made in the way as used for fixed assets andintangible assets. If there is any sign showing that the investment real estate is impaired on the balance sheet date,the provision of impairment reserve shall be made accordingly based on the difference between the book valueand the recoverable amount.The Company applied the cost model to subsequent measurement of investment real estate, and depreciatedor amortized it in accordance with the policy as used for the buildings or land use rights.See Note III (21) "Long-term Assets Impairment" for details of the methods for impairment test andprovision of impairment reserve applicable to investment real estate.
If the real estate for private use or inventory is converted to an investment real estate or the investment realestate is converted to a real estate for private use, the book value before such conversion shall be deemed as theentry value after the conversion.
If the purpose of an investment real estate is changed to private use, this investment real estate shall beconverted into a fixed or intangible asset from the date of change. If the purpose of a real estate is changed to rentgains or capital appreciation from private use, the fixed asset or intangible asset shall be converted into aninvestment real estate from the date of change. If any asset is converted into an investment real estate measuredwith the cost model, the book value before the conversion shall be deemed as the entry value after the conversion.If any asset is converted into an investment real estate measured with the fair value model, the fair value on theconversion date shall be deemed as the entry value after the conversion.
An investment real estate shall be de-recognized if this investment real estate is disposed of or permanentlyretired and it is expected that no economic benefits can be obtained from its disposal. The disposal income fromthe sale, transfer, scrapping or damage of an investment real estate shall be included in the current profits andlosses after deducting its book value and relevant taxes and dues.
24. Fixed assets
(1) Conditions for recognition
The fixed assets of the company refer to the tangible assets that are held for production of goods, rendering
of labor services, and leasing or operating management and have a useful life of more than one fiscal year. Fixedassets shall be recorded at the actual cost upon the acquisition and subject to the provision for straight-linedepreciation from the next month following the date when they are ready for use as intended. The straight-linemethod shall be used to calculate the depreciation of the fixed assets of the company, and the useful life anddepreciation methods of the fixed assets shall be checked at the end of each year based on the estimated netresidual value and useful life of various types of fixed assets. If there is a significant variance with the estimation,adjustment shall be made accordingly. If the provision for impairment is not considered, the depreciable life andthe yearly depreciation, according to the type, estimated economic useful life and estimated net residual value ofthe fixed assets, shall be determined respectively as follows:
(2) Depreciation method
| Category | Depreciation method | Depreciable life | Residual rate | Yearly depreciation |
| Houses and buildings | Straight-line method | 20-40 years | 5.00 | 2.375-4.75 |
| Machinery and equipment | Straight-line method | 10 years | 5.00 | 9.50 |
| Transportation equipment | Straight-line method | 5 years | 5.00 | 19.00 |
| Molds | Straight-line method | 5 years | 5.00 | 19.00 |
| Electronic equipment and other equipment | Straight-line method | 5 years | 5.00 | 19.00 |
If the provision for impairment is considered, the depreciation during each period shall be determined andcalculated according to the book value of a single fixed asset minus provision for impairment and the remainingdepreciable life. If there is any sign showing that a fixed asset is impaired on the balance sheet date, the provisionfor impairment shall be made accordingly at the difference between the book value and the recoverable amount.
(3) Basis for recognition, valuation and depreciation method of fixed assets under financing lease
Financing lease will be recognized if one or more of following criteria is or are met: ① The ownership ofthe leased asset is transferred to the lessee at the expiration of the lease term; ② It can be reasonably determinedthat the lessee will exercise the option at the start of the lease since the lessee has such option to purchase theleased asset and the agreed purchase price is expected to be much lower than the fair value of the leased assetwhen the option is exercised; ③ The lease term accounts for most of the useful life of the leased asset [generally,it accounts for more than 75% (including 75%) of the useful life of the leased asset] even if the ownership of the
asset will not be transferred; ④ The present value of the minimum lease payment made by the lessee on the startdate of lease is almost equivalent to the fair value [90% and above (including 90%)] of the leased asset on the startdate of lease; the present value of the minimum lease payment received by the lessor on the start date of lease isalmost equivalent to the fair value [90% and above (including 90%)] of the leased asset on the start date of lease;
⑤ The leased asset is of a special nature and will be only used by the lessee if no major transformation is made.The fixed assets under financing lease shall be recorded at the lower of the fair value of the leased assets on thestart date of lease and the present value of the minimum lease payment and shall be subject to provision fordepreciation in accordance with the depreciation policy of self-owned fixed assets.
25. Project under construction
1. The project under construction shall be transferred to fixed assets at the actual cost of the project when it is
ready for use as intended. If a product under construction has been ready for use as intended but has notundergone final settlement of account, this project shall be transferred to fixed assets at the estimated value first.After final settlement of account is made, the original temporary estimated value shall be adjusted according to theactual cost without adjustment of depreciation previously accrued.
2. If there is any sign showing that a project under construction is impaired on the balance sheet date, theprovision for impairment shall be made accordingly at the difference between the book value and the recoverableamount.
26. Borrowing costs
1. Recognition principle for capitalization of borrowing costs
The borrowing costs of the company that can be directly attributable to the acquisition, construction orproduction of assets that meet the conditions for capitalization shall be capitalized and included in the cost of therelevant assets, and other borrowing costs shall be recognized as expenses at the time of occurrence and includedin the current profits and losses.
2. Period of capitalization of borrowing costs
(1) The borrowing costs shall be capitalized if they meet the following conditions: 1) Asset expenditureshave been incurred; 2) Borrowing costs have been incurred; 3) Acquisition, construction or production activities
necessary for the assets to reach the usable or marketable state as intended have begun.
(2) The capitalization of borrowing costs shall be discontinued if the acquisition, construction or productionof an asset that meets the conditions for capitalization is abnormally interrupted for more than 3 successivemonths. The borrowing costs incurred during the period of interruption shall be recognized as current expensesuntil the acquisition, construction or production of assets is resumed.
(3) The capitalization of borrowing costs shall cease when the purchased, constructed or produced assets thatmeet the conditions for capitalization reaches the intended usable or marketable state.
3. Capitalized amount of borrowing costs
If special borrowings are for the purpose of purchase, construction or production of assets that meet theconditions for capitalization, the amount of interest to be capitalized shall be determined as the interest expensesactually incurred (including the amortization of discounts or premiums determined with the effective interest ratemethod) in the current period of the special borrowing minus the interest income from the unused borrowings thathave been deposited in the bank or the profit from temporary investment by the unused borrowings. If generalborrowings are used for the purpose of purchase, construction or production of assets that meet the conditions forcapitalization, the amount of interest to be capitalized shall be determined as the weighted average of assetexpenditure with accumulated asset expenditure exceeding special borrowing multiplied by capitalization rate ofthe general borrowing occupied.
27. Biological assets
None
28. Oil and gas assets
None
29. Use right assets
None
30. Intangible assets
None
(1) Valuation method, service life and impairment test
1. Intangible assets include land usage right and software, and shall be initially measured at cost.
2. Intangible assets with limited service life shall be systematically and reasonably amortized according tothe expected realization mode of economic benefits related within the service life, and in case the expectedrealization mode cannot be reliably determined, the straight-line method shall be adopted for amortization.The land usage right shall be averagely amortized within the remaining service life (generally 50 years), andthe software shall be averagely amortized within 3-5 years.
3. In case of evidence of impairment of intangible assets with defined service life on the balance sheet date,corresponding provision for impairment shall be made according to the difference between the book value and therecoverable amount; For intangible assets with uncertain service life and intangible assets that have not reachedthe serviceable state, the impairment tests shall be carried out every year, whether there are signs of impairment ornot. Currently, the Company has no intangible assets with uncertain service life.
(2) Accounting policy of internal R & D expenditure
Research stage expenditures of internal R & D projects shall be included in the current profits and losses atthe time of occurrence. In case following conditions have been met at the same time, expenditure of internal R& D projects in development stage shall be recognized as intangible assets: (1) It is technically feasible tocomplete the intangible assets for adoption and sale; (2) There is the intention to complete the intangible assets foradoption and sale; (3) There exist ways for intangible assets to generate economic benefits, including the evidencethat there is a market for products produced by using the intangible assets or for the intangible assets. If theintangible assets will be used internally, it can be proved that they are useful; (4) There are sufficient technical,financial and other resources to support the development of the intangible assets and to use or sell the intangibleassets; (5) Expenditure of the intangible assets in development stage can be measured reliably.
31. Long-term assets impairment
The enterprise shall judge whether there is any sign of possible assets impairment on the balance sheet date.
Goodwill arising from business combination and intangible assets with uncertain service life shall be testedfor impairment every year, no matter whether there is any sign of impairment.
In case of following signs, the assets may be impaired:
(1) Market price of assets falls sharply in the current period, which is significantly higher than the expecteddecline due to time or normal use; (2) There are significant changes in current and future economic, technologicalor legal environment in which the enterprise operates and the market where assets are located, bringing adverseeffects on the enterprise; (3) The market interest rate or other market return on investment has been increased inthe current period, affecting the discount rate of the enterprise to calculate the present value of the expected futurecash flow of the assets and resulting in a significant decrease in the recoverable amount of the assets; (4) Thereexists evidence showing that the assets have become obsolete or the entity has been damaged; (5) Assets havebeen or will be idle, terminated or planned to be disposed in advance; (6) Evidence in the internal report of theenterprise shows that economic performance of assets has been or will be lower than the expected, for instance,the net cash flow arising from assets or the realized operating profit (or loss) is far lower (or higher) than theexpected amount, etc. (7) Other indications showing that assets may have been impaired.In case of signs of assets impairment, corresponding recoverable amount shall be estimated.Recoverable amount shall be determined based on the higher of the net amount of fair value of assets minusthe disposal expenses and the present value of expected future cash flow of assets.Disposal expenses include legal expenses, relevant taxes and handling fees related to disposal of assets aswell as direct expenses incurred to make the assets marketable.
Present value of expected future cash flow of assets shall be determined by selecting an appropriate discountrate based on the expected future cash flow generated during continuous use and final disposal of the assets. Toestimate present value of future cash flow of assets, measures shall be taken to comprehensively consider factorsas the expected future cash flow, service life and discount rate of the assets.
In case of measurement result of recoverable amount showing that recoverable amount of the asset is lowerthan its book value, the book value shall be written down to the recoverable amount, and the written down amountshall be recognized as the loss of asset impairment and included in the current profits and losses; besides,corresponding provision for asset impairment shall be made at the same time.
32. Long-term deferred expenses
Long-term deferred expenses shall be recorded according to the actual amount, and shall be averagely
amortized in the benefit period or the specified period. In case future accounting period cannot benefit fromlong-term deferred expenses, all unamortized value of the item shall be transferred into the current profits andlosses.
33. Contractual liabilities
The Company shall list contractual assets or liabilities in the balance sheet based on the relationship betweenthe performance of obligations and customer payment. Obligation of the Company to transfer commodities orprovide services to customers for consideration received or receivable from customers shall be listed ascontractual liabilities.
34. Employee compensation
(1) Accounting treatment of short-term compensation
Employee compensation refers to various forms of remuneration or compensation provided by the Companyfor obtaining services provided by employees or dissolving labor relations. Employee compensation includesshort-term compensation, post-employment benefits, dismissal benefits and other long-term employee benefits.Benefits provided by the Company to employees’ spouses, children and dependants, family members of deceasedemployees as well as other beneficiaries shall also be included in employee compensation.
Share-based payments issued by the enterprise to its employees shall also be included in employeecompensation, and shall be handled in accordance with relevant provisions of Accounting Standards forEnterprises No.11- Share-based Payments.
1. Short-term compensation
The Company shall recognize actual short-term compensation as liabilities and include it in the currentprofits and losses or related asset costs during the accounting period when employees provide services. Where,non-monetary welfare shall be measured at fair value.
(2) Accounting treatment of post-employment benefits
(3) Accounting treatment of dismissal benefits
2. Dismissal benefits
In case the Company terminates labor relationship with employees prior to the expiration of employee’s
labor contract, or offers compensation to encourage employees to accept the layoff voluntarily, it shall confirm thecompensation for termination of labor relationship with employees and include the compensation amount in thecurrent profits and losses at the earlier time when it fails to unilaterally withdraw labor relationship terminationplan or layoff proposal and confirms costs related to reorganization involving the payment of dismissal benefits.
(4) Accounting treatment of other long-term employee benefits.
3. Defined contribution plan
Employees of the Company have accepted the social basic endowment insurance organized and implementedby the local labor and social security departments. The Company shall pay endowment insurance premium to thelocal agency handling with social basic endowment insurance on a monthly basis based on the payment base andproportion of the local social basic endowment insurance. After employee retirement, the local labor and socialsecurity department shall pay basic social pension to retired employees. The Company shall recognize amount tobe paid according to the above social security provisions as liabilities and include it into the current profits andlosses or related asset cost during the accounting period when employees provide services.
35. Lease liabilities
None
36. Estimated liabilities
None
37. Share-based payment
1. Types of share-based payment
It includes equity-settled share-based payment and cash-settled share-based payment
2. Determination method of fair value of equity instrument
(1) In case of active market, it shall be determined according to the quoted price in the active market.
(2) In case of no active market, it shall be determined by adopting valuation technologies, including referringto prices used in recent market transactions by parties familiar with the situation and willing to trade, current fairvalue of other financial instruments that are essentially the same, discounted cash flow method and option pricing
model.
3. Basis for confirming the best estimate of vesting equity instruments
Estimation shall be based on the latest available changes on vesting employee number and other subsequentinformation.
4. Accounting treatment of implementing, modifying and terminating share-based payment plan
(1) Equity-settled share-based payment
Equity-settled share-based payment in exchange for employee services that can be exercised immediatelyafter the grant shall be included in the relevant costs or expenses according to the fair value of equity instrumentson the grant date, and the capital reserve shall be adjusted accordingly. For equity-settled share-based payment inexchange for employee services only after completing service within the waiting period or reaching the specifiedperformance conditions, it is required to include the services obtained in the current period into relevant costs orexpenses according to the best estimate of number of vesting equity instruments and the fair value on the grantdate of equity instruments on each balance sheet date within the waiting period, and the capital reserve shall beadjusted accordingly.
For equity-settled share-based payment in exchange for other party’s services, if the fair value of otherparty’s services can be reliably measured, it shall be measured based on the fair value of other party’s services onthe acquisition date; In case the fair value of other party’s services cannot be reliably measured, but the fair valueof equity instruments can be reliably measured, it shall be measured based on the fair value of equity instrumentson the acquisition date and shall be included in relevant costs or expenses; besides, the owner’s equity shall beincreased accordingly.
(2) Cash-settled share-based payment
Cash-settled share-based payment in exchange for employee services that can be exercised immediately afterthe grant shall be included in relevant costs or expenses according to the fair value of the liabilities undertaken bythe Company on the grant date, and the liabilities shall be increased accordingly. For cash-settled share-basedpayment in exchange for employee services only after completing service within the waiting period or reachingthe specified performance conditions, it is required to include the services obtained in the current period intorelevant costs, expenses and corresponding liabilities according to the best estimate of vesting rights and the fairvalue of the liabilities undertaken by the Company on each balance sheet date within the waiting period.
(3) Modification and termination of share-based payment plan
In case of increase of fair value of the equity instruments granted due to modification, the Company shallrecognize the increase of services obtained based on the increase of fair value of equity instruments; In case ofincrease of the number of equity instruments granted due to modification, the Company shall recognize the fairvalue of the increased equity instruments as the increase of services obtained accordingly; Besides, if theCompany modifies vesting conditions in a way beneficial to employees, it shall consider all modified vestingconditions when dealing with the vesting conditions.In case of decrease of fair value of the equity instruments granted due to modification, the Company shallcontinue to recognize the amount of services obtained based on the fair value of equity instruments on the grantdate without considering the decrease of fair value of equity instruments; In case of decrease of the number ofequity instruments granted due to modification, the Company shall recognize the decreased part as thecancellation of granted equity instruments; Besides, if the Company modifies vesting conditions in a way notbeneficial to employees, it shall not consider the modified vesting conditions when dealing with vestingconditions.
In case the Company cancels or settles the granted equity instruments within the waiting period (except thosecancelled due to failure to meet the vesting conditions), the cancellation or settlement shall be accelerated forvesting, and the amount originally confirmed in the remaining waiting period shall be recognized immediately.
Share-based payment refers to the transaction of granting equity instruments or undertaking liabilitiesdetermined on the basis of equity instruments to obtain services provided by employees and other parties.Share-based payment can be divided into equity-settled share-based payment and cash-settled share-basedpayment
Equity-settled share-based payment in exchange for employee services shall be measured at the fair value ofequity instruments granted to employees. Cash-settled share-based payment shall be measured at the fair value ofthe Company’s liabilities calculated and determined on the basis of shares or other equity instruments.
38. Preferred shares, perpetual bonds and other financial instruments
None
39. Revenue
NoneAccounting policies adopted for revenue recognition and measurement
1. Revenue recognition
The Company’s revenue mainly includes sales revenue of intelligent controller, lithium battery, motor andcontrol system.The Company has fulfilled performance obligation in the Contract, that is, recognizing revenue when thecustomer obtains the control right of relevant commodities. Obtaining of the control right of relevant commoditiesmeans to be able to dominate the use of the commodities and obtain almost all economic benefits arisingtherefrom.
2. The Company shall judge nature of relevant performance obligations as “performance obligations fulfilledin a certain period” or “performance obligations fulfilled at a certain time point” based on relevant provisions ofrevenue standards, and shall confirm revenue according to the following principles respectively.
(1) In case the Company meets one of the following conditions, it shall fulfill the performance obligationswithin a certain period of time:
① Customers obtain and consume economic benefits arising from performance of the Company during theCompany’s performance of the Contract.
② Customers can control the assets under construction during the Company’s performance of the Contract.
③ Assets of the Company during the performance of the Contract are irreplaceable, and the Company shallbe entitled to collect money for the performance part completed so far in the whole contract period.
For performance obligations fulfilled within a certain period of time, the Company shall recognize revenueaccording to the performance progress within that period, except that the performance progress cannot bereasonably determined. The Company shall consider nature of commodities, and shall determine the properperformance progress by adopting the output method or the input method.
(2) For performance obligations fulfilled at a certain time point rather than in a certain period, the Companyshall recognize revenue at the time when customers obtain the control right of relevant commodities.
When judging whether customers have obtained the control right of relevant commodities, the Companyconsider the following signs:
① The Company shall be entitled to immediately collect revenues from commodities, which means thatcustomers have the obligation to pay for commodities.
② The Company has transferred the legal ownership of commodities to customers, which means thatcustomers have obtained the legal ownership of commodities.
③ The Company has transferred commodities in kind to customers, which means that customers havepossessed commodities in kind.
④ The Company has transferred main risks and rewards related to the ownership of commodities tocustomers, which means that customers have obtained main risks and rewards related to the ownership ofcommodities.
⑤ Customers have accepted the commodities.
⑥ Other indications that customers have obtained the control right of commodities.
3. Specific revenue recognition method of the Company
In case the sales contract between the Company and customers has been deemed as a performance obligationfulfilled at a certain time point, the specific revenue recognition method shall be formulated according to theactual situation of the Company’s product sales as follows:
Domestic sales: ① In case customers take delivery of commodities in cash, the Company shall consider thatrisks and rewards of the ownership of products have been transferred to customers, and shall confirm the salesrevenue. ② In case of advance collection and settlement, the receiving order shall be confirmed by the oppositecustomer after delivery, then the Company shall consider that risks and rewards of the ownership of products havebeen transferred to customers, and shall confirm the sales revenue. ③ In case of sale on credit, customers shallsettle according to the account period, and shall obtain the confirmation receipt from the opposite customer afterdelivery according to Customers’ order, so as to transfer risks and rewards of product ownership to customers;besides, the Company shall confirm the sales revenue.
Foreign sales: the Company shall deliver commodities according to the signed order, hold special exportinvoice, delivery note and other original documents for customs clearance and export, pass customs audit,
complete export declaration procedures, obtain relevant declaration documents to transfer risk reward, and recordthe sales revenue based on the delivery order, special export invoice and customs declaration form.
4. Measurement of revenue
The Company shall measure revenue according to the transaction price allocated to each individualperformance obligation. In determining the transaction price, the Company shall consider the influence of variableconsideration, significant financing components in the Contract, non-cash consideration, consideration payable tocustomers as well as other factors.
(1) Variable consideration
The Company shall determine the best estimate of variable consideration according to the expected value orthe most likely amount, but the transaction price including the variable consideration shall not exceed theaccumulated recognized revenue that will not be significantly reversed when relevant uncertainty is eliminated.When evaluating whether the accumulative recognized revenue is unlikely to be significantly reversed, theenterprise shall further consider the possibility and proportion of revenue reversal.
(2) Significant financing components
In case of significant financing components in the Contract, the Company shall determine the transactionprice according to the amount payable in cash when assuming that customers obtain the control right ofcommodities. Difference between the transaction price and the contract consideration shall be amortized byadopting the effective interest rate method during the contract period.
(3) Non-cash consideration
In case customers pay non-cash consideration, the Company shall determine the transaction price accordingto the fair value of the non-cash consideration. In case the fair value of non-cash consideration cannot bereasonably estimated, the Company shall indirectly determine the transaction price by referring to the separateselling price of commodities for transferring commodities to customers that it promises.
(4) Consideration payable to customers
Consideration payable to customers shall be written down against the transaction price, and the currentincome shall be offset at the later of confirming relevant income or paying (or promising to pay) customer’sconsideration, except that the consideration payable to customers is to obtain other clearly distinguishable
commodities from customers.In case the consideration payable by an enterprise to customers is to obtain other clearly distinguishablecommodities from customers, the purchased commodities shall be confirmed in a way consistent with otherpurchases of the enterprise. In case the consideration payable by an enterprise to customers exceeds the fair valueof a clearly distinguishable commodity obtained from the customer, the excess amount shall be used to offset thetransaction price. In case the fair value of clearly distinguishable commodities obtained from customers cannot bereasonably estimated, the enterprise shall offset the transaction price with the consideration payable to customersin full.Differences in revenue recognition accounting policies caused by different business models of similarbusinesses
40. Government subsidies
1. Government subsidies include government subsidies related to assets and government subsidies related toincome.
2. In case the government subsidies can be included in monetary assets, they shall be measured according tothe amount received or receivable; In case the government subsidies can be classified as non-monetary assets,they shall be measured at fair value, and once the fair value cannot be obtained reliably, they shall be measured innominal amount.
3. Government subsidies calculated by adopting the gross method
(1) Government subsidies related to assets shall be recognized as deferred income and included in profits andlosses by stages in a reasonable and systematic way within the service life of relevant assets. In case relevantassets are sold, transferred, scrapped or damaged prior to the end of their service life, the balance of relevantdeferred income that has not been allocated shall be transferred to the profits and losses of the current period ofasset disposal.
(2) Government subsidies related to income and used to compensate related expenses or losses in the laterperiod shall be recognized as deferred income, and shall be included in the current profits and losses during theperiod when related expenses are recognized; subsidies used to compensate relevant expenses or losses incurredshall be directly included in the current profits and losses.
4. Government subsidies calculated by adopting the net method
(1) Government subsidies related to assets shall be used to offset the book value of relevant assets;
(2) Government subsidies related to income and used to compensate related expenses or losses in the laterperiod shall be recognized as deferred income, and shall be used to offset related costs when related expenses arerecognized; subsidies used to compensate relevant expenses or losses incurred shall be directly used to offsetrelated costs.
5. The Company shall adopt the gross method to calculate the government subsidies received.
6. For government subsidies including asset-related part and income-related part, measures shall be taken todistinguish different parts and carry out accounting treatment separately; Part difficult to distinguish shall beclassified as government subsidies related to income.
7. The Company shall include the government subsidies related to its daily activities in other incomeaccording to the essence of economic business, and shall include the government subsidies unrelated to its dailyactivities in non-operating income and expenditure.
8. For discount interest of preferential policy loans to be obtained by the Company, two measures shall beadopted, including that the Ministry of Finance allocates the discount funds to the lending banks and that theMinistry of Finance allocates the discount funds to the Company:
(1) In case the Ministry of Finance allocates the discount funds to the lending banks, and the lending bankprovides loans to the Company at preferential policy interest rate, the Company shall choose the followingmethods for accounting treatment:
a. Taking the loan amount actually received as the entry value of the loan, and calculating relevant borrowingcosts based on the loan principal and the preferential policy interest rate.
b. Taking the fair value of loan as the entry value, calculate the loan amounts by adopting the effectiveinterest rate method, and recognizing the difference between the actual received amount and the fair value of theloan as deferred income. Deferred income shall be amortized by adopted the effective interest rate method withinthe duration of loan to offset relevant borrowing costs.
(2) In case the Ministry of Finance allocates the discount funds to the Company, the Company will writedown the corresponding discount interest against relevant borrowing costs.
41. Deferred income tax assets / Deferred income tax liabilities
1. It is required to calculate and recognize the deferred income tax assets or liabilities according to the difference
between the book value of the assets and liabilities and corresponding tax base (in case the tax base of items not
recognized as assets and liabilities can be determined according to the provisions of the tax law, the differencebetween the tax base and their book amount shall be adopted) as well as the applicable tax rate during the period ofexpected recovery of the assets or settlement of the liabilities.
2. Recognition of deferred income tax assets shall be limited to the taxable income that is likely to beobtained to offset temporary deductible differences. In case of conclusive evidence showing that sufficient taxableincome is likely to be obtained in the future to offset temporary deductible differences, the deferred income taxassets not recognized in the previous accounting period shall be recognized on the balance sheet date.
3. The book value of deferred income tax assets shall be reviewed on the balance sheet date. In case it isimpossible to obtain enough taxable income to offset the benefits of the deferred income tax assets in the future,the book value of the deferred income tax assets shall be written down. If it is likely to obtain enough taxableincome, the write down amount shall be reversed.
4. The current income tax and deferred income tax of the Company shall be recognized as income taxexpense or income, and shall be included in the current profits and losses, except for income tax arising from thefollowing circumstances: (1) business combination; (2) transactions or matters directly recognized in the owner’sequity.
42. Lease
(1) Accounting treatment of operating lease
Financial lease is a lease with all risks and rewards related to the ownership of assets transferred in essence,and its ownership may eventually be transferred or not. Leases other than financial leases shall be recognized asoperating leases.
(1) Operating lease business recorded by the Company as the lessee
Rental expenditure of operating lease shall be included in relevant asset cost or current profits and losses byadopting the straight-line method in each period of the lease term. Initial direct expenses shall be included in thecurrent profits and losses. Contingent rents shall be included in the current profits and losses at the time ofoccurrence.
(2) Operating lease business recorded by the Company as the lessor
Rental income of operating lease shall be recognized as the current profits and losses by adopting the
straight-line method in each period of the lease term. Initial direct expenses with large amount shall be capitalizedat the time of occurrence, and shall be included in the current profits and losses by stages on the same basis as therental revenue during the whole lease term; Other initial direct expenses with small amount shall be included inthe current profits and losses at the time of occurrence. Contingent rents shall be included in the current profitsand losses at the time of occurrence.
(2) Accounting treatment of financial lease
(3) Financial lease business recorded by the Company as the lessee
The lower of the fair value of the leased asset and the present value of the minimum lease payment on thebeginning date of lease term shall be taken as the entry value of the leased asset, the minimum lease payment shallbe taken as the entry value of the long-term accounts payable, and the difference of the above two shall be takenas the unrecognized financing expense at the beginning of the lease term. In addition, initial direct expenses thatcan be attributed to the leased item in the process of lease negotiation and signing the lease contract shall also beincluded in leased assets. Balance of the minimum lease payment after deducting the unrecognized financingexpenses shall be listed as long-term liabilities or long-term liabilities due within one year.During the lease term, the unrecognized financing expenses shall be calculated and recognized by adoptingthe effective interest rate method. Contingent rents shall be included in the current profits and losses at the time ofoccurrence.
(4) Financial lease business recorded by the Company as the lessor
The sum of the minimum lease receipts and the initial direct expenses on the beginning date of lease termshall be taken as the entry value of the financing lease receivables, and the unguaranteed residual value shall berecorded at the same time at the beginning of the lease term; and the sum of minimum lease collection, initialdirect cost and difference between unguaranteed residual value and its present value shall be recognized asunrealized financing income. Balance of financing lease receivables after deducting the unrealized financingincome shall be listed as long-term creditor’s right or long-term creditor’s right due within one year.
During the lease term, the unrealized financing income shall be calculated and recognized by adopting theeffective interest rate method. Contingent rents shall be included in the current profits and losses at the time ofoccurrence.
43. Other important accounting policies and accounting estimation
Hedge accountingThe hedge means the risk management activity where the enterprise designates the financial instruments asthe hedge instruments for the risk exposure due to the management of the specific risks such as foreign exchangerisk, interest rate risk, price risk, credit risk so that the fair value or the cash flow changes, which is expected tocountervail all or part of the fair value or cash flow change of the hedged projects.
1. In the hedge accounting, the hedge is divided into fair value hedge, cash flow hedge, and net investmenthedge for overseas operation.
2. Only when the fair value hedge, cash flow hedge, or net investment hedge for overseas operation meet thefollowing conditions at the same time can the hedge accounting method stipulated by the Code for handling.
(1) The hedge relationship is only composed of the hedge instruments and hedged projects that meet theconditions; (2) When the hedge begins, the enterprise officially designates the hedge instruments and hedgedprojects and prepares the written documents about hedge relationship and the risk management strategies and riskmanagement objectives related to the hedge for the enterprise. These documents at least describe the hedgeinstrument, hedged projects, nature of the hedged risks, and evaluation methods on hedge effectiveness (includingthe forming reason analysis for invalid part of the hedge and the confirmation methods of the hedge ratio) etc. (3)The hedge relationship conforms to the requirements of hedge effectiveness.
If the hedge meets the following conditions at the same time, the enterprise shall identify that the hedgerelationship conforms to the requirements of hedge effectiveness:
(a) There is the economic relationship between the hedged projects and hedge instruments. The economicrelationship makes the value of the hedge instruments and hedged projects change in the reverse direction due tothe same hedged risks.
(b) In the value change generated for the hedged projects and hedge instruments, the effect of the credit riskis not dominant.
(c) The hedge ratio of the hedge relationship shall be equal to the ratio between the hedged project quantityof the actual hedge for the enterprise and the actual quantity of the hedge instruments and shall not reflect theunbalance of the relative weight between the hedged projects and hedge instruments, which will cause the hedge
invalidation and may generate the accounting results not consistent with the hedge accounting objectives.The enterprise shall continuously evaluate whether the hedge relationship conforms to the hedgeeffectiveness requirements when the hedge begins and during sequent periods, especially for the analysis theforming reasons why it is expected to affect the hedge relationship due to the invalid part of the hedge during theresidual periods of the hedge. The enterprise shall at least evaluate the hedge relationship on the day of balancesheet and when the major changes will happen for relevant situations affecting the hedge effectivenessrequirements.
If the hedge relationship does not conform to the hedge effectiveness requirements any more due to thehedge ratio, but the risk management objective to designate the hedge relationship does not change, the enterpriseshall re-balance the hedge relationship.
3. Accounting handling of the hedge.
(1) Fair value hedge
If the fair value hedge meets the conditions of the hedge accounting methods, it shall be handled inaccordance with the provisions below:
(a) The profit or loss generated by the hedge instrument shall be incorporated into the profits and losses. Ifthe hedge instrument is used to hedge the non-tradable equity instrument investment (or its components) which ismeasured at fair value with the changes including in other comprehensive income, the profit or loss generated bythe hedge instruments shall be incorporated into other comprehensive income.
(b) The profit or loss generated by the hedged projects due to the hedge risk exposure shall be incorporatedinto the current profit or loss. At the same time, the account value shall be adjusted for the confirmed hedgedprojects measured at the fair value.
(2) Cash flow hedge
If the cash flow value hedge meets the conditions to apply the hedge accounting methods, it shall be handledin accordance with the provisions below:
(a) If the profit or loss generated by the hedge instrument belongs to the valid part of the hedge as the cashflow hedge reserve, it shall be incorporated into other comprehensive income. The amount of cash flow hedgereserve included in other comprehensive income in each period shall be the change amount of cash flow hedge
reserve in the current period.(b) If the profit or loss generated by the hedge instrument belongs to the invalid part of the hedge (that is,other profit or loss after deducting other comprehensive income), it shall be incorporated into the current profitsand losses.
(3) Net investment hedge for overseas operation
As for the net investment hedge for overseas operation, including the hedge of monetary items accounting aspart of net investment, it shall be handled in accordance with the provisions similar to the cash flow hedgeaccounting:
(a) If the profit or loss generated by the hedge instrument belongs to the valid part of the hedge, it shall beincorporated into other comprehensive income.
When all or part of the overseas business is disposed, the above profit or loss of hedge instruments includedin other comprehensive income shall be transferred out and incorporated into the current profits and losses.
If the profit or loss generated by the hedge instrument belongs to the invalid part of the hedge, it shall beincorporated into the current profits and losses.
Repurchase shares
If the Company or its subsidiaries shares are acquired due to the reduction of registered capital or reward ofemployees, the amount actually paid shall be treated as the treasury stock, and the record shall be made forreference. If the repurchase shares are cancelled, the capital reserve will be offset by the difference between thetotal par value of the cancelled shares and the number of cancelled shares and the amount paid for the actualrepurchase. If the capital reserve is insufficient to be offset, the retained earnings shall be offset; If the repurchaseshares are awarded to the employees of the Company as equity settled share payment, when the employeesexercise the right to purchase the shares of the Company or its subsidiaries and receive the price, the cost oftreasury shares delivered to the employees and the accumulated amount of capital reserve (other capital reserve)during the waiting period shall be resold, and the capital reserve (capital premium or share premium) shall beadjusted according to the difference.
44. Important accounting policy and accounting estimation changes
(1) Important accounting policy changes
√applicable □ not applicable
| Contents and reasons of the accounting policy change | Approval procedures | Remarks |
| Accounting policy change 1: According to the Accounting Standards for Business Enterprises No. 14-Income (CK [2017] No.22) revised and issued by the Ministry of Finance on July 5, 2017, it is required that the new income standards shall be implemented by enterprises listed in China as of January 1, 2020. According to the revised accounting standards, the Company was required to make corresponding changes to the original accounting policies. | Not applicable | |
| Accounting policy change 2: According to the Notice on Issuance and Revision of Accounting Standards for Business Enterprises No. 7-Non-Monetary Assets Exchange (CK [2019] No.8) revised and issued by the Ministry of Finance on May 9, 2019, it is required that the new standards shall be implemented by all enterprises implement the accounting standards of business enterprises as of June 10, 2019. According to the revised accounting standards, the Company was required to make corresponding changes to the original accounting policies. | Not applicable | |
| Accounting policy change 3: According to the Notice on Issuance and Revision of Accounting Standards for Business Enterprises No. 12-Debt Restructuring (CK [2019] No.9 hereinafter referred to as “Debt Restructuring Standards”) revised and issued by the Ministry of Finance on May 16, 2019, it is required that the new standards shall be implemented by all enterprises implement the accounting standards of business enterprises as of June 17, 2019. According to the revised accounting standards, the Company was required to make corresponding changes to the original accounting policies. | Not applicable |
1. After the accounting policy change for this time, the Company implements the new income standards. Theoriginal income and construction contract standards are incorporated into the unified income confirmation modelfor the new income standards; The risk premium transfer is replaced to the control right transfer as the judgmentstandards for income confirmation; The more specific guideline is provided for the accounting handling of thecontract arranged for multiple transactions; The specific regulations is provided for the income confirmation andmeasuring of some special transactions (or matters). The accounting policy change for this time is thecorresponding change made by the Company in accordance with the latest accounting standards revised by theMinistry of Finance. In terms of transition provisions, the cumulative impact of the first implementation of thenew income standards only adjusts the amount of retained earnings and other related items in the financialstatements at the beginning of the year when the new income standards are first implemented, and does not adjustthe information of the comparable period. After change, the accounting policy can more objectively and fairlyreflect the financial conditions and operation results of the Company and conform to the provisions of relevant
laws and regulations and the actual situation of the Company. The Company re-evaluates the confirmation andmeasuring, business accounting and reporting of the major contract income for the Company in accordance withthe new accounting standards, which has no significant impact on the financial conditions, operation results, andcash flow of the Company and is free of the damage of the benefit of the Company and shareholders.
2. According to the non-monetary assets exchange standards, the Company adjusts the non-monetary assetsexchange between January 1, 2019 and the execution date according to these Standards, and does not makeretrospective adjustment for the non-monetary assets exchange before January 1, 2019.
3. According to the debt restructuring standards, the Company adjusts the debt restructuring between January 1,2019 and the execution date according to these Standards, and does not make retrospective adjustment for the debtrestructuring before January 1, 2019.
(2) Important accounting estimation changes
□ applicable √ not applicable
(3) Relevant balance sheet account information at the beginning of the year when the new income standardsand new lease standards are implemented at the first time since 2020ApplicableWhether it is needed to adjust the balance sheet account at the beginning of the year
√ Yes □ No
Consolidated Balance Sheet
Unit: Yuan
| Items | December 31, 2019 | January 1, 2020 | Adjustment quantity |
| Current assets: | |||
| Monetary funds | 815,641,620.85 | 815,641,620.85 | |
| Settlement of provisions | |||
| Lending funds | |||
| Trading financial assets | 389,012,845.80 | 389,012,845.80 | |
| Derivative financial asset | |||
| Notes receivable | 184,241,548.74 | 184,241,548.74 | |
| Accounts receivable | 1,344,601,325.89 | 1,344,601,325.89 |
| Receivables financing | |||
| Prepayments | 14,434,888.27 | 14,434,888.27 | |
| Premiums receivable | |||
| Reinsurance accounts receivable | |||
| Reinsurance contract reserves receivable | |||
| Other receivables | 45,781,832.93 | 45,781,832.93 | |
| Including: interest receivable | 7,295.55 | 7,295.55 | |
| Dividends receivable | |||
| Repurchase of financial assets for resale | |||
| Inventory | 513,461,655.22 | 513,461,655.22 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 30,780,749.09 | 30,780,749.09 | |
| Total current assets | 3,337,956,466.79 | 3,337,956,466.79 | |
| Non-current assets: | |||
| Loans and advances granted | |||
| Debt investment | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investment | 6,863,474.93 | 6,863,474.93 | |
| Investment in other equity instruments | |||
| Other non-current financial assets | |||
| Investment property | 75,980,555.48 | 75,980,555.48 | |
| Fixed assets | 911,874,844.52 | 911,874,844.52 | |
| Projects under construction | 227,919,784.95 | 227,919,784.95 |
| Productive biological assets | |||
| Oil and gas assets | |||
| Use right assets | |||
| Intangible assets | 228,997,071.35 | 228,997,071.35 | |
| Development expenditure | 62,015,182.42 | 62,015,182.42 | |
| Goodwill | 143,168,717.85 | 143,168,717.85 | |
| Long-term unamortized expenses | 35,637,724.65 | 35,637,724.65 | |
| Deferred income tax assets | 39,907,895.92 | 39,907,895.92 | |
| Other non-current assets | 51,329,093.10 | 51,329,093.10 | |
| Total non-current assets | 1,783,694,345.17 | 1,783,694,345.17 | |
| Total assets | 5,121,650,811.96 | 5,121,650,811.96 | |
| Current liabilities: | |||
| Short-term borrowing | 173,000,000.00 | 173,000,000.00 | |
| Borrowing money from the central bank | |||
| Borrowed funds | |||
| Trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 376,710,352.49 | 376,710,352.49 | |
| Accounts payable | 977,216,374.27 | 977,216,374.27 | |
| Advance receipt | 37,054,668.04 | 459,121.98 | -36,595,546.06 |
| Contract liabilities | 36,595,546.06 | 36,595,546.06 | |
| Financial assets sold for repurchase | |||
| Deposit absorption and interbank deposit | |||
| Acting trading securities | |||
| Acting underwriting securities |
| Employee salary payable | 129,165,174.74 | 129,165,174.74 | |
| Taxes payable | 24,435,371.35 | 24,435,371.35 | |
| Other payables | 51,515,210.40 | 51,515,210.40 | |
| Including: Interest payable | 2,988,309.00 | 2,988,309.00 | |
| Dividends payable | |||
| Service charges and commissions payable | |||
| Reinsurance accounts payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | |||
| Other current liabilities | |||
| Total current liabilities | 1,769,097,151.29 | 1,769,097,151.29 | |
| Non-current liabilities: | |||
| Insurance contract reserve | |||
| Long-term borrowing | 200,000,000.00 | 200,000,000.00 | |
| Bonds payable | 479,891,035.92 | 479,891,035.92 | |
| Including: Preferred shares | |||
| Perpetual bond | |||
| Lease liabilities | |||
| Long-term payables | |||
| Long-term employee compensation payable | |||
| Estimated liabilities | |||
| Deferred income | 10,022,500.00 | 10,022,500.00 | |
| Deferred income tax liabilities | 27,472,884.02 | 27,472,884.02 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 717,386,419.94 | 717,386,419.94 |
| Total liabilities | 2,486,483,571.23 | 2,486,483,571.23 | |
| Owner's equity: | |||
| Share capital | 1,018,775,769.00 | 1,018,775,769.00 | |
| Other equity instruments | 104,535,879.24 | 104,535,879.24 | |
| Including: Preferred shares | |||
| Perpetual bond | |||
| Capital reserves | 456,556,282.32 | 456,556,282.32 | |
| Less: Inventory shares | 60,009,612.52 | 60,009,612.52 | |
| Other comprehensive income | -3,059,762.06 | -3,059,762.06 | |
| Special reserve | |||
| Surplus reserves | 127,284,211.74 | 127,284,211.74 | |
| General risk provision | |||
| Undistributed profit | 866,301,932.11 | 866,301,932.11 | |
| Total owner's equity attributable to the parent company | 2,510,384,699.83 | 2,510,384,699.83 | |
| Minority equity | 124,782,540.90 | 124,782,540.90 | |
| Total owners' equity | 2,635,167,240.73 | 2,635,167,240.73 | |
| Total liabilities and owners' equity | 5,121,650,811.96 | 5,121,650,811.96 |
Adjustment situation representation
According to the Accounting Standards for Business Enterprises No. 14-Income (CK [2017] No.22) revisedand issued by the Ministry of Finance on July 5, 2017, it is required that the new income standards shall beimplemented by enterprises listed in China as of January 1, 2020. According to the requirements of the standards,our obligation to transfer goods to customers for consideration received or receivable at the beginning of theperiod is adjusted to the presentation of contract liabilities, resulting in a decrease of 36,595,546.06 yuan at theearly period and an increase of 36,595,546.06 yuan in contract liabilities, which has no impact on other statementitems.Balance Sheet of Parent Company
Unit: Yuan
| Items | December 31, 2019 | January 1, 2020 | Adjustment quantity |
| Current assets: | |||
| Monetary funds | 385,436,535.15 | 385,436,535.15 | |
| Trading financial assets | 238,405,345.80 | 238,405,345.80 | |
| Derivative financial asset | |||
| Notes receivable | 76,671,962.02 | 76,671,962.02 | |
| Accounts receivable | 899,176,641.49 | 899,176,641.49 | |
| Receivables financing | |||
| Prepayments | 5,957,082.22 | 5,957,082.22 | |
| Other receivables | 117,939,852.28 | 117,939,852.28 | |
| Including: interest receivable | |||
| Dividends receivable | |||
| Inventory | 105,521,726.58 | 105,521,726.58 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 6,081,494.93 | 6,081,494.93 | |
| Total current assets | 1,835,190,640.47 | 1,835,190,640.47 | |
| Non-current assets: | |||
| Debt investment | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investment | 1,805,683,606.98 | 1,805,683,606.98 | |
| Investment in other equity instruments | |||
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 109,399,125.14 | 109,399,125.14 | |
| Projects under construction | 565,615.15 | 565,615.15 |
| Productive biological assets | |||
| Oil and gas assets | |||
| Use right assets | |||
| Intangible assets | 117,561,989.08 | 117,561,989.08 | |
| Development expenditure | 37,718,324.75 | 37,718,324.75 | |
| Goodwill | |||
| Long-term unamortized expenses | 12,217,217.91 | 12,217,217.91 | |
| Deferred income tax assets | 19,876,957.58 | 19,876,957.58 | |
| Other non-current assets | 14,236,345.61 | 14,236,345.61 | |
| Total non-current assets | 2,117,259,182.20 | 2,117,259,182.20 | 0.00 |
| Total assets | 3,952,449,822.67 | 3,952,449,822.67 | 0.00 |
| Current liabilities: | |||
| Short-term borrowing | 165,000,000.00 | 165,000,000.00 | |
| Trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 252,444,912.50 | 252,444,912.50 | |
| Accounts payable | 389,218,701.89 | 389,218,701.89 | |
| Advance receipt | 19,097,275.28 | -19,097,275.28 | |
| Contract liabilities | 19,097,275.28 | 19,097,275.28 | |
| Employee salary payable | 75,793,897.30 | 75,793,897.30 | |
| Taxes payable | 5,254,949.29 | 5,254,949.29 | |
| Other payables | 243,934,895.76 | 243,934,895.76 | |
| Including: Interest payable | 2,976,709.00 | 2,976,709.00 | |
| Dividends payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year |
| Other current liabilities | |||
| Total current liabilities | 1,150,744,632.02 | 1,150,744,632.02 | 0.00 |
| Non-current liabilities: | |||
| Long-term borrowing | |||
| Bonds payable | 479,891,035.92 | 479,891,035.92 | |
| Including: Preferred shares | |||
| Perpetual bond | |||
| Lease liabilities | |||
| Long-term payables | |||
| Long-term employee compensation payable | |||
| Estimated liabilities | |||
| Deferred income | 9,567,500.00 | 9,567,500.00 | |
| Deferred income tax liabilities | 24,289,411.36 | 24,289,411.36 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 513,747,947.28 | 513,747,947.28 | 0.00 |
| Total liabilities | 1,664,492,579.30 | 1,664,492,579.30 | 0.00 |
| Owner's equity: | |||
| Share capital | 1,018,775,769.00 | 1,018,775,769.00 | |
| Other equity instruments | 104,535,879.24 | 104,535,879.24 | |
| Including: Preferred shares | |||
| Perpetual bond | |||
| Capital reserves | 457,944,801.38 | 457,944,801.38 | |
| Less: Inventory shares | 60,009,612.52 | 60,009,612.52 | |
| Other comprehensive income | |||
| Special reserve | |||
| Surplus reserves | 127,255,693.28 | 127,255,693.28 | |
| Undistributed profit | 639,454,712.99 | 639,454,712.99 | |
| Total owners' equity | 2,287,957,243.37 | 2,287,957,243.37 | 0.00 |
| Total liabilities and owners' equity | 3,952,449,822.67 | 3,952,449,822.67 | 0.00 |
Adjustment situation representationAccording to the Accounting Standards for Business Enterprises No. 14-Income (CK [2017] No.22) revised andissued by the Ministry of Finance on July 5, 2017, it is required that the new income standards shall beimplemented by enterprises listed in China as of January 1, 2020. According to the requirements of the standards,our obligation to transfer goods to customers for consideration received or receivable at the beginning of theperiod is adjusted to the presentation of contract liabilities, resulting in a decrease of 19,097,275.28 yuan at theearly period and an increase of 19,097,275.28 yuan in contract liabilities, which has no impact on other statementitems.
(4) Comparison data declaration at the early stage for the traceability and adjustment for new incomestandards and new lease standards implemented from 2020 at the first time
□ applicable √ not applicable
45. Others
VI. Tax
1. Main tax type and rate
| Tax type | Taxation basis | Tax rate |
| VAT (value-added tax) | Revenue from sales of goods | 13%、9%、6%、3% |
| City maintenance and construction tax | Turnover tax paid actually | 7% |
| Corporate income tax | Taxable income | 15%、25%、16.5%、25.17%、20%、15.825%、22.46% |
| Education surcharge | Turnover tax paid actually | 3% |
| Local education surcharge | Turnover tax paid actually | 2% |
Explanation shall be made by means of disclosure where there is any taxpayer with different corporate income tax rates
| Name of taxpayer | Income tax rate |
| Shenzhen Topband Co., Ltd. | 15% |
| Shenzhen Topband Software Technology Co., Ltd. | 15% |
| Shenzhen Topband Automation Technology Co., Ltd. | 25% |
| Chongqing Topband Industrial Co., Ltd. | 25% |
| Huizhou Topband Electrical Technology Co., Ltd. | 15% |
| Shenzhen Topband Lithium Battery Co., Ltd. | 15% |
| Shenzhen YAKO Automation Technology Co., Ltd. | 15% |
| Shenzhen Yansheng Software Co., Ltd. | 12.5% |
| Topband (Hong Kong) Co., Ltd. | 16.5% |
| TOPBAND INDIA PRIVATE LIMITED | 25.17% |
| Shenzhen Allied Control System Co., Ltd. | 15% |
| Huizhou Topband Lithium Battery Co., Ltd. | 25% |
| Ningbo Topband Intelligent Control Co., Ltd. | 25% |
| Shenzhen Meanstone Intelligent Technology Co., Ltd. | 20% |
| Topband （Vietnam） Co., ltd | 20% |
| Hangzhou Zhidong Motor Technology Co., Ltd. | 25% |
| TOPBAND SMART DONGNAI(VIETNAM) Co., ltd | 20% |
| Shenzhen Topband Supply Chain Services Co., Ltd. | 25% |
| Shenzhen Spark IOT Technology Co., Ltd. | 25% |
| Shenzhen Topband Investment Co., Ltd. | 25% |
| Topband Germany GmbH | 15.825% |
| Shenzhen Senxuan Technology Co., Ltd. | 25% |
| TOPBAND JAPAN Co., Ltd. | 22.46% |
2. Tax preference
On October 31, 2017, the Company obtained the Certificate for High-tech Enterprise that is numbered
GR201744204652 and issued by Shenzhen Science and Technology Innovation Commission, Shenzhen FinanceCommission, Shenzhen Municipal Office, SAT and Shenzhen Local Taxation Administration. This Certificate isvalid within 3 years from the date of issuance. On February 5, 2021, the Company has received the Certificate forHigh-tech Enterprise jointly issued by Shenzhen Science and Technology Innovation Commission, ShenzhenFinance Bureau, and Shenzhen Tax Service, State Taxation Administration, and passed the re-certification ofhigh-tech enterprises. This certification is a renewal of the original certificate that has been expired. According torelevant regulations, the Company will be entitled to the preferential policies stated by China for the high-techenterprise income tax for three consecutive years after passing the re-certification of high-tech enterprises. That is,the company shall pay its corporate income tax at 15% of corporate income tax rate from 2020 to 2022.
On October 16, 2018, Shenzhen Yansheng Software Co., Ltd. obtained the Certificate for High-techEnterprise that is numbered GR201844200095 and issued by Shenzhen Science and Technology Innovation
Commission, Shenzhen Finance Commission and Shenzhen Tax Service, State Taxation Administration. ThisCertificate is valid within 3 years from the date of issuance. The corporate income tax rate applicable for theCompany from 2019 to 2021 is 15% in accordance with relevant provisions of the Law of the People's Republicof China on Enterprise Income Tax, Regulations of the People's Republic of China on the Implementation ofEnterprise Income Tax and the Management Measures for the Certification of High-tech Enterprises.
On November 9, 2018, Shenzhen Topband Lithium Battery Co., Ltd. obtained the Certificate for High-techEnterprise that is numbered GR201844202311 and issued by Shenzhen Science and Technology InnovationCommission, Shenzhen Finance Commission and Shenzhen Tax Service, State Taxation Administration. ThisCertificate is valid within 3 years from the date of issuance. The corporate income tax rate applicable for theCompany from 2019 to 2021 is 15% in accordance with relevant provisions of the Law of the People's Republicof China on Enterprise Income Tax, Regulations of the People's Republic of China on the Implementation ofEnterprise Income Tax and the Management Measures for the Certification of High-tech Enterprises.On November 9, 2018, Shenzhen Allied Control System Co., Ltd. obtained the Certificate for High-techEnterprise that is numbered GR201844202356 and issued by Shenzhen Science and Technology InnovationCommission, Shenzhen Finance Commission, Shenzhen Municipal Office, SAT and Shenzhen Local TaxationAdministration. This Certificate is valid within 3 years from the date of issuance. The corporate income tax rateapplicable for the Company from 2018 to 2020 is 15% in accordance with relevant provisions of the Law of thePeople's Republic of China on Enterprise Income Tax, Regulations of the People's Republic of China on theImplementation of Enterprise Income Tax and the Management Measures for the Certification of High-techEnterprises.On November 9, 2018, Shenzhen YAKO Automation Technology Co., Ltd. obtained the Certificate forHigh-tech Enterprise that is numbered GR201844204122 and issued by Shenzhen Science and TechnologyInnovation Commission, Shenzhen Finance Commission, Shenzhen Municipal Office, SAT and Shenzhen LocalTaxation Administration. This Certificate is valid within 3 years from the date of issuance. The corporate incometax rate applicable for the Company from 2018 to 2020 is 15% in accordance with relevant provisions of the Lawof the People's Republic of China on Enterprise Income Tax, Regulations of the People's Republic of China on theImplementation of Enterprise Income Tax and the Management Measures for the Certification of High-techEnterprises.
On November 9, 2018, Huizhou Topband Electrical Technology Co., Ltd. obtained the Certificate for
High-tech Enterprise that is numbered GR201844010394 and issued by the Department of Science andTechnology of Guangdong Province, the Department of Finance of Guangdong Province, and GuangdongProvincial Tax Service, State Taxation Administration. This Certificate is valid within 3 years from the date ofissuance. The corporate income tax rate applicable for the Company from 2019 to 2021 is 15% in accordance withrelevant provisions of the Law of the People's Republic of China on Enterprise Income Tax, Regulations of thePeople's Republic of China on the Implementation of Enterprise Income Tax and the Management Measures forthe Certification of High-tech Enterprises.On December 9, 2019, Shenzhen Topband Software Technology Co., Ltd. obtained the Certificate forHigh-tech Enterprise that is numbered GR201944201381 and issued by Shenzhen Science and TechnologyInnovation Commission, Shenzhen Finance Commission, Shenzhen Municipal Office, SAT and Shenzhen LocalTaxation Administration. This Certificate is valid within 3 years from the date of issuance. The corporate incometax rate applicable for the Company from 2019 to 2021 is 15% in accordance with relevant provisions of the Lawof the People's Republic of China on Enterprise Income Tax, Regulations of the People's Republic of China on theImplementation of Enterprise Income Tax and the Management Measures for the Certification of High-techEnterprises.On July 11, 2018, the Ministry of Finance and the State Taxation Administration issued CS [2018] No. 77Notice on Further Strengthening the Efforts in Preferential Income Tax Policies for Small and Low-ProfitEnterprises. According to the Notice, from January 1, 2018 to December 31, 2020, the cap of the annual taxableincome of small and low-profit enterprises shall be increased from 500,000 yuan to 1 million yuan, and the smalland low-profit enterprises with annual taxable income of less than 1 million yuan (inclusive) shall pay theircorporate income taxes at 20% of tax rate with including their incomes reduced by 50% into their taxable incomes.Shenzhen Meanstone Intelligent Technology Co., Ltd., a subsidiary of the Company, was recognized as a smalland micro business, and shall apply 20% tax rate for its corporate income tax from 2018 to 2020.According to CS [2019] No. 13 Notice on the Implementation of Inclusive Tax Relief Policies for Small andMicro Businesses, the small and micro businesses shall pay their corporate income taxes at 20% of tax rate, andreduce the portion of not more than 1 million yuan in their annual taxable incomes by 25% and that of more than 1million yuan but not more than 3 million yuan in their annual taxable incomes by 50% before including suchportion into their taxable incomes. The provisions of this Policy apply to Shenzhen Topband Investment Co., Ltd.,Shenzhen Senxuan Technology Co., Ltd., Shenzhen Spark IOT Technology Co., Ltd., Shenzhen Tulu Innovation
Co., Ltd., Huizhou Topband Lithium Battery Co., Ltd., and Shenzhen Meanstone Intelligent Technology Co., Ltd.that are subsidiaries and sub-subsidiaries.On September 15, 2020, Shenzhen Yansheng Software Co., Ltd. passed the verification carried out by theIndustry and Information Technology Bureau of Shenzhen Municipality on the preferential income tax conditionsfor the enterprises engaged in software and integrated circuit design in Shenzhen. According to the provisions ofNo. 68 Announcement of Ministry of Finance and State Taxation Administration on Corporate Income TaxPolicies for Integrated Circuit Design and Software Industry issued by the Ministry of Finance and State TaxationAdministration in 2019, Shenzhen Yansheng Software Co., Ltd. shall be entitled to the preferential tax policy ofexemptions in two years and reduction in three years, that is, its corporate income tax shall be exempted from thefirst to the second year and reduced by 50% at 25% of statutory tax rate from the third to the fifth year until theexpiration of the preferential period provided that the preferential period shall be calculated from theprofit-making year before December 31, 2018.
3. Others
Topband (Hong Kong) Co., Ltd. (hereinafter referred to as "Hong Kong Topband") is a subsidiary of theCompany. It is established in Hong Kong Special Administrative Region and is subject to 16.5% of profit tax rate.TOPBAND INDIA PRIVATE LIMITED is a subsidiary of the Company. It is established in India and issubject to 25.17% of income tax rate.Topband (Vietnam) Co., Ltd. is a sub-subsidiary of the Company. It is established in Vietnam and is subjectto 20% of income tax rate.
TOPBAND SMART DONGNAI (VIETNAM) Co., Ltd. is a sub-subsidiary of the Company. It is establishedin Vietnam and is subject to 20% of income tax rate.
Topband Germany GmbH is a sub-subsidiary of the Company. It is established in Germany and is subject to
15.825% of income tax rate.
TOPBAND JAPAN Co., Ltd. is a sub-subsidiary of the Company. It is established in Japan and is subject to
22.46% of corporate income tax rate.
VII. Notes to Items of Consolidated Financial Statements
1. Monetary capital
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Cash on hand | 604,492.12 | 1,898,597.43 |
| Bank deposit | 1,196,226,680.89 | 759,946,723.06 |
| Other monetary capital | 22,264,303.49 | 53,796,300.36 |
| Total | 1,219,095,476.50 | 815,641,620.85 |
| Including: total amount deposited abroad | 153,809,647.09 | 126,765,216.76 |
| Total amount restricted for use due to mortgage, pledge or freezing, etc. | 22,264,303.49 | 53,796,300.36 |
Other description
2. The restricted portion of other monetary capital at the end of the period was 15,538,974.44 yuan of bankacceptance deposits, 5,960,105.14 yuan of guarantee amount, and 760,562.00 yuan of frozen fund for laborarbitration. In addition to the above capital restrictions, there were no realizable restrictions or potential recoveryrisks in monetary capital at the end of the period.
2. Trading financial assets
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Financial assets measured at fair value with changes included in the current profits and losses | 226,491,482.10 | 389,012,845.80 |
| Including: | ||
| Financial products | 112,970,000.00 | 152,970,000.00 |
| Investment in equity instruments | 113,521,482.10 | 236,042,845.80 |
| Including: | ||
| Total | 226,491,482.10 | 389,012,845.80 |
3. Derivative financial assets
None
4. Notes receivable
(1) Notes receivable listed by category
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Bank acceptance bill | 33,560,579.23 | 183,920,666.71 |
| Commercial acceptance bill | 5,917,351.40 | 320,882.03 |
| Total | 39,477,930.63 | 184,241,548.74 |
Unit: Yuan
| Category | Ending balance | Beginning balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion | Amount | Proportion of provision | Amount | Proportion | Amount | Proportion of provision | |||
| Notes receivable with single provision for bad debts | 33,560,579.23 | 84.61% | 0.00% | 33,560,579.23 | 183,920,666.71 | 99.82% | 183,920,666.71 | |||
| Including: | ||||||||||
| Bank acceptance bill | 33,560,579.23 | 84.61% | 0.00% | 33,560,579.23 | 183,920,666.71 | 99.82% | 183,920,666.71 | |||
| Notes receivable with provision for bad debts by portfolio | 6,106,657.79 | 15.39% | 189,306.39 | 3.10% | 5,917,351.40 | 337,770.56 | 0.18% | 16,888.53 | 5.00% | 320,882.03 |
| Including: | ||||||||||
| Commercial acceptance bill | 6,106,657.79 | 15.39% | 189,306.39 | 3.10% | 5,917,351.40 | 337,770.56 | 0.18% | 16,888.53 | 5.00% | 320,882.03 |
| Total | 39,667,237.02 | 100.00% | 189,306.39 | 0.48% | 39,477,930.63 | 184,258,437.27 | 100.00% | 16,888.53 | 0.01% | 184,241,548.74 |
Single provision for bad debts: 0
Unit: Yuan
| Name | Ending balance | |||
| Book balance | Provision for bad debts | Proportion of provision | Reasons for provision | |
| Bank acceptance bill | 33,560,579.23 | 0.00 | 0.00% | No risk of cashing bank acceptance bill |
| Total | 33,560,579.23 | 0.00 | -- | -- |
Single provision for bad debts:
NoneProvision for bad debts by portfolio: 189,306.39
Unit: Yuan
| Name | Ending balance | ||
| Book balance | Provision for bad debts | Proportion of provision | |
| Commercial acceptance bill | 6,106,657.79 | 189,306.39 | 3.10% |
| Total | 6,106,657.79 | 189,306.39 | -- |
Description of the basis for determining the portfolio: NoneProvision for bad debts by portfolio: NoneDescription of the basis for determining the portfolio:
If the provision for bad debts on notes receivable is based on the general model of expected credit loss, theinformation about the provision for bad debts shall be disclosed by referring to the disclosure method of otherreceivables:
□ applicable √ not applicable
(2) Provision for bad debts withdrawn, recovered or reversed in current periodProvision for bad debts in current period:
Unit: Yuan
| Category | Beginning balance | Amount changed in current period | Ending balance | |||
| Provision | Recover or reversal | Write-off | Others | |||
| Provision for bad debts - notes receivable | 16,888.53 | 172,417.86 | 0.00 | 0.00 | 0.00 | 189,306.39 |
| Total | 16,888.53 | 172,417.86 | 0.00 | 0.00 | 0.00 | 189,306.39 |
Of which the amount of provision for bad debts recovered or reversed in current period is significant
□ applicable √ not applicable
(3) Notes receivable pledged by the Company at the end of the period
Unit: Yuan
| Items | Amount pledged at the end of the period |
| Bank acceptance bill | 1,525,312.22 |
| Total | 1,525,312.22 |
(4) Notes receivable endorsed or discounted by the Company at the end of the period but not yet due at thebalance sheet date
Unit: Yuan
| Items | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
| Bank acceptance bill - endorsed but not due | 39,813,557.75 | |
| Bank acceptance bill - discounted but not due | 50,289,167.9 |
(5) Notes that the Company transferred to accounts receivable at the end of the period due tonon-performance by drawer
Unit: Yuan
| Items | Amount of accounts receivable transferred at the end of the period |
| Commercial acceptance bill | 0.00 |
| Total | 0.00 |
(6) Notes receivable actually written off in current period
□ applicable √ not applicable
5. Accounts receivable
(1) Disclosure of accounts receivable by category
Unit: Yuan
| Category | Ending balance | Beginning balance | ||||
| Book balance | Provision for bad | Book value | Book balance | Provision for bad | Book value | |
| debts | debts | |||||||||
| Amount | Proportion | Amount | Proportion of provision | Amount | Proportion | Amount | Proportion of provision | |||
| Accounts receivable with provision for bad debts by single item | 3,787,463.00 | 0.21% | 3,787,463.00 | 100.00% | 0.00 | 3,186,251.80 | 0.22% | 3,186,251.80 | 100.00% | 0.00 |
| Including: | ||||||||||
| Accounts receivable with insignificant single amount but single provision made for bad debts | 3,787,463.00 | 0.21% | 3,787,463.00 | 100.00% | 0.00 | 3,186,251.80 | 0.22% | 3,186,251.80 | 100.00% | 0.00 |
| Accounts receivable with provision for bad debts by portfolio | 1,758,425,185.47 | 99.79% | 57,314,031.63 | 3.26% | 1,701,111,153.84 | 1,416,989,478.28 | 99.78% | 72,388,152.39 | 5.11% | 1,344,601,325.89 |
| Including: | ||||||||||
| Accounts receivable with provision for bad debts by aging combination | 1,758,425,185.47 | 99.79% | 57,314,031.63 | 3.26% | 1,701,111,153.84 | 1,416,989,478.28 | 99.78% | 72,388,152.39 | 5.11% | 1,344,601,325.89 |
| Total | 1,762,212,648.47 | 100.00% | 61,101,494.63 | 3.47% | 1,701,111,153.84 | 1,420,175,730.08 | 100.00% | 75,574,404.19 | 5.32% | 1,344,601,325.89 |
Single provision for bad debts: 3,787,463.00
Unit: Yuan
| Name | Ending balance | |||
| Book balance | Provision for bad debts | Proportion of provision | Reasons for provision | |
| Accounts receivable with insignificant single amount but single provision made for bad debts | 3,787,463.00 | 3,787,463.00 | 100.00% | It is difficult to recover |
| Total | 3,787,463.00 | 3,787,463.00 | -- | -- |
Single provision for bad debts:
□ applicable √ not applicable
Provision for bad debts by portfolio: 57,314,031.63
Unit: Yuan
| Name | Ending balance | ||
| Book balance | Provision for bad debts | Proportion of provision | |
| Within 1 year | 1,733,363,386.58 | 53,734,264.99 | 3.10% |
| 1 to 2 years | 20,160,968.67 | 1,822,551.56 | 9.04% |
| 2 to 3 years | 3,628,511.90 | 802,263.98 | 22.11% |
| 3 to 4 years | 592,551.52 | 281,521.22 | 47.51% |
| 4 to 5 years | 40,260.00 | 33,923.08 | 84.26% |
| More than 5 years | 639,506.80 | 639,506.80 | 100.00% |
| Total | 1,758,425,185.47 | 57,314,031.63 | -- |
Description of the basis for determining the portfolio: NoneProvision for bad debts by portfolio:
□ applicable √ not applicable
Unit: YuanIf the provision for bad debts on accounts receivable is based on the general model of expected credit loss, theinformation about the provision for bad debts shall be disclosed by referring to the disclosure method of otherreceivables:
□ applicable √ not applicable
Disclosure by aging
Unit: Yuan
| Aging | Book balance |
| Within 1 year (including 1 year) | 1,734,392,628.43 |
| 1 to 2 years | 20,639,335.42 |
| 2 to 3 years | 5,908,366.30 |
| More than 3 years | 1,272,318.32 |
| 3 to 4 years | 592,551.52 |
| 4 to 5 years | 40,260.00 |
| Over 5 years | 639,506.80 |
| Total | 1,762,212,648.47 |
(2) Provision for bad debts withdrawn, recovered or reversed in current periodProvision for bad debts in current period:
Unit: Yuan
| Category | Beginning balance | Amount changed in current period | Ending balance | |||
| Provision | Recover or reversal | Write-off | Others | |||
| Accounts receivable with provision for bad debts by single item | 3,186,251.80 | 601,211.20 | 3,787,463.00 | |||
| Accounts receivable with provision for bad debts by portfolio | 72,388,152.39 | -14,817,278.59 | 256,842.17 | 57,314,031.63 | ||
| Total | 75,574,404.19 | -14,216,067.39 | 256,842.17 | 61,101,494.63 | ||
Of which the amount of provision for bad debts recovered or reversed in current period is significant
□ applicable √ not applicable
(3) Accounts receivable actually written off in current period
Unit: Yuan
| Items | Write-off amount |
| Accounts receivable actually written off | 256,842.17 |
Of which the significant write-offs of accounts receivable
Unit: Yuan
| Name of Entity | Nature of accounts receivable | Write-off amount | Reasons for write off | Write-off procedures performed | Whether the amount was generated by related transactions |
| Shanghai Aihao Intelligent Technology Co., Ltd. | Payment for goods | 93,496.37 | It is not expected to be recovered | No | |
| Commercial Lighting Services LLC | Payment for goods | 136,354.71 | It is not expected to be recovered | No | |
| TECHTRONIC PRODUCT DEVELOPMENT LTD | Payment for goods | 23,191.79 | It is not expected to be recovered | No | |
| KH CONG CONG | Payment for goods | 3,799.30 | It is not expected to be recovered | ||
| Total | -- | 256,842.17 | -- | -- | -- |
Description of accounts receivable written off:
□ applicable √ not applicable
(4) Accounts receivable of top five ending balances grouped by debtors
Unit: Yuan
| Name of Entity | Ending balance of accounts receivable | Proportion to total ending balances of accounts receivable | Ending balance of provision for bad debts |
| No.1 | 300,967,772.85 | 17.08% | 9,330,522.57 |
| No.2 | 96,234,080.92 | 5.46% | 2,983,256.51 |
| No.3 | 62,756,189.31 | 3.56% | 1,945,441.87 |
| No.4 | 49,984,610.85 | 2.84% | 1,877,221.74 |
| No.5 | 48,958,179.62 | 2.78% | 1,517,703.59 |
| Total | 558,900,833.55 | 31.72% |
(5) Accounts receivable derecognized due to transfer of financial assets
□ applicable √ not applicable
(6) Amount of assets and liabilities formed by transferring accounts receivable and continuing to beinvolved
□ applicable √ not applicable
6. Receivables financing
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Notes receivable | 90,426,713.39 | |
| Accounts receivable | 156,229,313.88 | |
| Total | 246,656,027.27 |
Changes in increase/decrease in receivables financing and changes in fair value in current period
□ applicable √ not applicable
If the provision for bad debts on receivables financing is based on the general model of expected credit loss, theinformation about the provision for bad debts shall be disclosed by referring to the disclosure method of otherreceivables:
? Applicable □ not applicable
| Provision for bad debts | Phase 1 | Phase 2 | Phase 3 | Total |
| Expected credit loss in the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance as of 1 January 2020 | 0 | 0 | ||
| Balance as of 1 January 2020 in the current period | —— | —— | —— | —— |
| Accrued in current period | 4,843,108.73 | 4,843,108.73 |
| Balance as of December 31, 2020 | 4,843,108.73 | 4,843,108.73 |
7. Prepayments
(1) Prepayments are listed by aging
Unit: Yuan
| Aging | Ending balance | Beginning balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 16,968,264.14 | 95.68% | 13,638,186.67 | 94.48% |
| 1 to 2 years | 627,825.07 | 3.54% | 754,513.97 | 5.23% |
| 2 to 3 years | 113,188.10 | 0.64% | 33,762.64 | 0.23% |
| More than 3 years | 25,952.68 | 0.15% | 8,424.99 | 0.06% |
| Total | 17,735,229.99 | -- | 14,434,888.27 | -- |
(2) Prepayment of top five ending balance grouped by prepaid object
The total amount of prepayments of top five ending balances grouped by debtors in the year was 6,934,977.68yuan, accounting for 39.10% of the total ending balances of prepayments.
8. Other receivables
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Interest receivable | 7,295.55 | |
| Other receivables | 40,728,126.64 | 45,774,537.38 |
| Total | 40,728,126.64 | 45,781,832.93 |
(1) Interest receivable
1) Classification of interest receivable
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Term deposit | 7,295.55 | |
| Total | 7,295.55 |
2) Significant overdue interest
□ applicable √ not applicable
3) Provision for bad debts
□ applicable √ not applicable
(2) Dividends receivable
□ applicable √ not applicable
(3) Other receivables
1) Classification of other receivables by nature of amount
Unit: Yuan
| Nature of payment | Book balance at the end of the period | Book balance at the beginning of the period |
| VAT rebate | 23,817,036.82 | 4,943,914.48 |
| Employee loans | 7,886,380.07 | 8,278,397.06 |
| Margin, deposit | 11,276,827.12 | 12,429,525.03 |
| Legal fee, arbitration fee | 1,047,009.70 | |
| Compensation | 22,850,370.67 | |
| Others | 187,249.47 | 289,527.39 |
| Total | 43,167,493.48 | 49,838,744.33 |
2) Provision for bad debts
Unit: Yuan
| Provision for bad debts | Phase 1 | Phase 2 | Phase 3 | Total |
| Expected credit loss in the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance as of 1 January 2020 | 4,064,206.95 | 4,064,206.95 | ||
| Balance as of 1 January 2020 in the current period | —— | —— | —— | —— |
| Reversal in current period | 1,624,840.11 | 1,624,840.11 | ||
| Balance as of December 31, 2020 | 2,439,366.84 | 2,439,366.84 |
Changes in book balance with significant changes in loss reserves in current period
□ applicable √ not applicable
Disclosure by aging
Unit: Yuan
| Aging | Book balance |
| Within 1 year (including 1 year) | 32,003,122.58 |
| 1 to 2 years | 7,971,409.98 |
| 2 to 3 years | 1,937,168.39 |
| More than 3 years | 1,255,792.53 |
| 3 to 4 years | 1,205,151.61 |
| 4 to 5 years | 7,228.60 |
| Over 5 years | 43,412.32 |
| Total | 43,167,493.48 |
3) Provision for bad debts withdrawn, recovered or reversed in current periodProvision for bad debts in current period:
Unit: Yuan
| Category | Beginning balance | Amount changed in current period | Ending balance | |||
| Provision | Recover or reversal | Write-off | Others | |||
| Provision for bad debts | 4,064,206.95 | 0.00 | 1,624,840.11 | 2,439,366.84 | ||
| Total | 4,064,206.95 | 0.00 | 1,624,840.11 | 2,439,366.84 | ||
Of which the amount of provision for bad debts reversed or recovered in current period is significant:
□ applicable √ not applicable
4) Other receivables actually written off in current period
Unit: Yuan
| Items | Write-off amount |
Of which the significant write-offs of other receivables
Unit: Yuan
| Name of Entity | Nature of other receivables | Write-off amount | Reasons for write off | Write-off procedures performed | Whether the amount was generated by related transactions |
Description of other receivable written off:
5) Other receivables of top five ending balances grouped by debtors
Unit: Yuan
| Name of Entity | Nature of payment | Ending balance | Aging | Proportion to total ending balances of other receivables | Ending balance of provision for bad debts |
| No.1 | VAT export tax rebate | 20,264,087.02 | Within 1 year | 46.94% | |
| No.2 | VAT export tax rebate | 1,839,223.41 | Within 1 year | 4.26% | |
| No.3 | VAT export tax rebate | 1,713,726.39 | Within 1 year | 3.97% | |
| No.4 | Security deposit | 1,630,359.50 | 2~3 years | 3.78% | 489,107.85 |
| No.5 | Rental deposit | 1,520,178.00 | 1~2 years | 3.52% | 152,017.80 |
| Total | -- | 26,967,574.32 | -- | 62.47% | 641,125.65 |
6) Receivables involving government subsidies
□ applicable √ not applicable
7) Other receivables derecognized due to transfer of financial assets
□ applicable √ not applicable
8) Amount of assets and liabilities formed by transferring other receivables and continuing to be involved
□ applicable √ not applicable
9. Inventory
Whether the Company is required to comply with the disclosure requirements of the real estate industryNo
(1) Inventory classification
Unit: Yuan
| Items | Ending balance | Beginning balance | ||||
| Book balance | Provision for decline in value of inventories or provision for impairment of contract performance cost | Book value | Book balance | Provision for decline in value of inventories or provision for impairment of contract performance cost | Book value | |
| Raw material | 669,357,860.89 | 56,781,506.42 | 612,576,354.47 | 272,107,000.56 | 21,222,352.31 | 250,884,648.25 |
| Products in process | 65,058,584.18 | 65,058,584.18 | 42,378,640.51 | 42,378,640.51 | ||
| Goods on hand | 340,321,032.11 | 9,669,035.83 | 330,651,996.28 | 169,294,992.97 | 5,282,595.18 | 164,012,397.79 |
| Goods shipped in transit | 48,921,114.18 | 3,963,402.85 | 44,957,711.33 | 19,315,120.48 | 3,941,558.64 | 15,373,561.84 |
| Self-manufactured semi-finished product | 60,865,430.27 | 3,717,115.68 | 57,148,314.59 | 36,844,098.35 | 2,618,548.54 | 34,225,549.81 |
| Low-value consumables | 84,986.73 | 84,986.73 | 12,694.55 | 12,694.55 | ||
| Materials entrusted for processing | 4,834,921.04 | 4,834,921.04 | 6,574,162.47 | 6,574,162.47 | ||
| Total | 1,189,443,929.40 | 74,109,624.64 | 1,115,312,868.62 | 546,526,709.89 | 33,065,054.67 | 513,461,655.22 |
(2) Provision for decline in value of inventories and provision for impairment of contract performance cost
Unit: Yuan
| Items | Beginning balance | Increase in current period | Decrease in current period | Ending balance | ||
| Provision | Others | Reversal or write-off | Others | |||
| Raw material | 21,222,352.31 | 54,078,006.36 | 18,518,852.25 | 56,781,506.42 | ||
| Goods on hand | 5,282,595.18 | 8,778,629.53 | 4,392,188.88 | 9,669,035.8300 | ||
| Goods shipped in transit | 3,941,558.64 | 21,844.21 | 3,963,402.8500 | |||
| Self-manufactured semi-finished product | 2,618,548.54 | 1,853,849.13 | 755,281.99 | 3,717,115.6800 | ||
| Low-value consumables | ||||||
| Materials entrusted for processing | ||||||
| Total | 33,065,054.67 | 64,732,329.23 | 23,666,323.12 | 74,131,060.78 |
(3) Description of capitalized amount of borrowing costs included in ending balance of inventory
□ applicable √ not applicable
(4) Description of current amortization amount of contract performance cost
□ applicable √ not applicable
10. Contract assets
□ applicable √ not applicable
11. Assets held for sale
□ applicable √ not applicable
12. Non-current assets due within one year
□ applicable √ not applicable
13. Other current assets
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Input tax of VAT | 66,429,956.99 | 25,445,380.79 |
| Other taxes paid in advance | 1,716,313.34 | 5,321,236.23 |
| Prepaid and amortized expenses | 28,952.04 | 14,132.07 |
| Total | 68,175,222.37 | 30,780,749.09 |
14. Debt investment
□ applicable √ not applicable
Changes in book balance with significant changes in loss reserves in current period
□ applicable √ not applicable
15. Other debt investment
Significant changes in book balance
□ applicable √ not applicable
16. Long-term receivables
(1) Situation of long-term receivables
□ applicable √ not applicable
(2) Long-term receivables derecognized due to transfer of financial assets
□ applicable √ not applicable
(3) Amount of assets and liabilities formed by transferring long-term receivables and continuing to beinvolved
17. Long-term equity investment
Unit: Yuan
| Investee | Beginning balance (book value) | Changes in increase/decrease in current period | Ending balance (book value) | Ending balance of provision for impairment | |||||||
| Additional investment | Decrease in investment | Profit and loss on investment recognized under equity method | Adjustment to other comprehensive income | Other changes in equity | Declaration of distribution for cash dividends or profits | Provision for impairment | Others | ||||
| I. Joint venture | |||||||||||
| II. Associates | |||||||||||
| Shenzhen Yuchengxin Power Technology Co., Ltd. | 9,764,719.19 | 9,764,719.19 | |||||||||
| Shenzhen | 6,863,474.93 | -360,946.80 | 6,502,528.13 | ||||||||
| Daka Optoelectronics Co., Ltd. | |||||||||||
| Subtotal | 6,863,474.93 | -360,946.80 | 16,267,247.32 | 9,764,719.19 | |||||||
| Total | 6,863,474.93 | -360,946.80 | 16,267,247.32 | 9,764,719.19 |
Other description
18. Investment in other equity instruments
□ applicable √ not applicable
19. Other non-current financial assets
□ applicable √ not applicable
20. Investment property
(1) Investment property with cost measurement model
√applicable □ not applicable
Unit: Yuan
| Items | Houses and buildings | Land usage right | Construction in progress | Total |
| I. Original book value | ||||
| 1. Beginning balance | 78,840,485.22 | 78,840,485.22 | ||
| 2. Increase in current period | 16,105,071.29 | 16,105,071.29 | ||
| (1) Outsourcing | ||||
| (2) Transfer in of inventory, fixed assets and construction in progress | 16,105,071.29 | 16,105,071.29 | ||
| (3) Increase in business mergers | ||||
| 3. Decrease in current period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4. Ending balance | 94,945,556.51 | 94,945,556.51 |
| II. Accumulated depreciation and accumulated amortization | ||||
| 1. Beginning balance | 2,859,929.74 | 2,859,929.74 | ||
| 2. Increase in current period | 2,847,361.06 | 2,847,361.06 | ||
| (1) Provision or amortization | 2,847,361.06 | 2,847,361.06 | ||
| 3. Decrease in current period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4. Ending balance | 5,707,290.80 | 5,707,290.80 | ||
| III. Provision for impairment | ||||
| 1. Beginning balance | ||||
| 2. Increase in current period | ||||
| (1) Provision | ||||
| 3. Decrease in current period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4. Ending balance | ||||
| IV. Book value | ||||
| 1. Ending book value | 89,238,265.71 | 89,238,265.71 | ||
| 2. Beginning book value | 75,980,555.48 | 75,980,555.48 |
(2) Investment property with fair value measurement model
□ applicable √ not applicable
(3) Investment property without property certificate of title
Unit: Yuan
| Items | Book value | Reasons for failure to complete certificate of title |
| Chongqing Yiyuan | 89,238,265.71 | It is being carried out |
21. Fixed assets
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Fixed assets | 1,096,875,640.94 | 911,874,844.52 |
| Total | 1,096,875,640.94 | 911,874,844.52 |
(1) Fixed assets
Unit: Yuan
| Items | Houses and buildings | Machinery and equipment | Transportation equipment | Office equipment and others | Molds | Total |
| I. Original book value: | ||||||
| 1. Beginning balance | 669,923,995.13 | 399,145,854.25 | 2,444,090.81 | 121,024,972.52 | 1,192,538,912.71 | |
| 2. Increase in current period | 104,825,166.29 | 142,174,681.47 | 53,026.46 | 44,516,165.92 | 291,569,040.14 | |
| (1) Acquisition | 1,926,254.51 | 121,879,560.69 | 53,026.46 | 41,210,878.53 | 165,069,720.19 | |
| (2) Transfer in of construction in progress | 102,898,911.78 | 20,295,120.78 | 3,305,287.39 | 126,499,319.95 | ||
| (3) Increase in business mergers | ||||||
| 3. Decrease in current period | 21,754,702.05 | 13,539,653.48 | 131,170.42 | 5,133,652.34 | 40,559,178.29 | |
| (1) Disposal or scrap | 1,303,625.31 | 10,937,493.10 | 126,626.34 | 4,874,955.78 | 17,242,700.53 | |
| (2) Transfer to investment property | 16,105,071.29 | 16,105,071.29 | ||||
| (3) Impact of exchange rate changes | 4,346,005.45 | 2,602,160.38 | 4,544.08 | 258,696.56 | 7,211,406.47 | |
| 4. Ending balance | 752,994,459.37 | 527,780,882.24 | 2,365,946.85 | 160,407,486.10 | 1,443,548,774.56 | |
| II. Accumulated depreciation | ||||||
| 1. Beginning balance | 84,753,373.65 | 148,274,618.12 | 1,625,897.11 | 46,010,179.31 | 280,664,068.19 | |
| 2. Increase in current period | 17,166,099.00 | 30,518,345.77 | 399,510.73 | 32,337,177.39 | 80,421,132.89 | |
| (1) Provision | 17,166,099.00 | 30,518,345.77 | 399,510.73 | 32,337,177.39 | 80,421,132.89 | |
| 3. Decrease in current period | 1,247,284.33 | 8,967,997.75 | 120,295.02 | 4,076,490.36 | 14,412,067.46 | |
| (1) Disposal or scrap | 1,247,284.33 | 8,967,997.75 | 120,295.02 | 4,076,490.36 | 14,412,067.46 | |
| 4. Ending balance | 100,672,188.32 | 169,824,966.14 | 1,905,112.82 | 74,270,866.34 | 346,673,133.62 |
| III. Provision for impairment | ||||||
| 1. Beginning balance | ||||||
| 2. Increase in current period | ||||||
| (1) Provision | ||||||
| 3. Decrease in current period | ||||||
| (1) Disposal or scrap | ||||||
| 4. Ending balance | ||||||
| IV. Book value | ||||||
| 1. Ending book value | 652,322,271.05 | 357,955,916.10 | 460,834.03 | 86,136,619.76 | 1,096,875,640.94 | |
| 2. Beginning book value | 585,170,621.48 | 250,871,236.13 | 818,193.70 | 75,014,793.21 | 911,874,844.52 |
(2) Temporary idle fixed assets
□ applicable √ not applicable
(3) Fixed assets leased through financial lease
□ applicable √ not applicable
(4) Fixed assets leased out through operating lease
□ applicable √ not applicable
(5) Fixed assets without property certificate of title
Unit: Yuan
| Items | Book value | Reasons for failure to complete certificate of title |
| Chongqing Yiyuan | 86,475,881.50 | It is being carried out |
| India Plant | 87,054,325.09 | It is being carried out |
(6) Disposal of fixed assets
□ applicable √ not applicable
22. Construction in progress
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Construction in progress | 292,474,798.41 | 227,919,784.95 |
| Total | 292,474,798.41 | 227,919,784.95 |
(1) Situation of construction in progress
Unit: Yuan
| Items | Ending balance | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Decoration of Huizhou Plant | 19,675,613.36 | 19,675,613.36 | 13,952,963.33 | 13,952,963.33 | ||
| India Plant | 12,113,644.13 | 12,113,644.13 | 106,352,884.39 | 106,352,884.39 | ||
| Test instruments to be debugged | 34,312,847.55 | 34,312,847.55 | 29,443,263.26 | 29,443,263.26 | ||
| Ningbo Plant | 208,173,673.86 | 208,173,673.86 | 69,455,858.97 | 69,455,858.97 | ||
| Chongqing Yiyuan | 1,950,161.78 | 1,950,161.78 | 325,313.45 | 325,313.45 | ||
| Decoration project of plant in Binh Duong Industrial Park, Vietnam | 189,761.68 | 189,761.68 | 7,493,558.74 | 7,493,558.74 | ||
| Plant in Dong Nai Industrial Park, Vietnam | 14,686,143.94 | 14,686,143.94 | ||||
| Dormitory renovation of Huizhou plant | 1,372,952.11 | 1,372,952.11 | ||||
| Others | 895,942.81 | 895,942.81 | ||||
| Total | 292,474,798.41 | 292,474,798.41 | 227,919,784.95 | 227,919,784.95 | ||
(2) Changes in significant projects under construction in current period
Unit: Yuan
| Project name | Amount budgeted | Beginning balance | Increase in current period | Amount of fixed assets transferred in current period | Other decreases in current period | Ending balance | Proportion of cumulative investment in the project | Project progress | Cumulated amount of interest capitaliz | Including: capitalization amount of interest | Capitalization rate of interest in current | Source of capitals |
| to budget | ed | in current period | period | |||||||||
| Chongqing Yiyuan | 200,000,000.00 | 325,313.45 | 2,910,654.04 | 1,285,805.71 | 1,950,161.78 | 96.49% | 96.00% | Fund raising | ||||
| Decoration of Huizhou Plant | 200,000,000.00 | 13,952,963.33 | 19,160,316.65 | 9,515,774.49 | 3,921,892.13 | 19,675,613.36 | 98.39% | 98.00% | Others | |||
| India Plant | 136,004,000.00 | 106,352,884.39 | 5,216,125.12 | 93,383,137.29 | 6,072,228.09 | 12,113,644.13 | 82.03% | 82.00% | Others | |||
| Ningbo Plant | 465,704,300.00 | 69,455,858.97 | 138,717,814.89 | 208,173,673.86 | 44.70% | 45.00% | Fund raising | |||||
| Plant in Dong Nai, Vietnam | 140,000,000.00 | 14,686,143.94 | 14,686,143.94 | 10.49% | 10% | Others | ||||||
| Total | 961,708,300.00 | 190,087,020.14 | 180,691,054.64 | 102,898,911.78 | 11,279,925.93 | 256,599,237.07 | -- | -- | -- |
(3) Provision for impairment of project under construction in current period
□ applicable √ not applicable
(4) Engineering materials
□ applicable √ not applicable
23. Productive biological assets
(1) Productive biological assets with cost measurement model
□ applicable √ not applicable
(2) Productive biological assets with fair value measurement model
□ applicable √ not applicable
24. Oil and gas assets
□ applicable √ not applicable
25. Use right assets
□ applicable √ not applicable
26. Intangible assets
(1) Situation of intangible assets
Unit: Yuan
| Items | Land usage right | Patent right | Non-patented technology | Software | Trademark | Total |
| I. Original book value | ||||||
| 1. Beginning balance | 81,171,992.44 | 435,321.58 | 244,851,845.46 | 18,436,171.19 | 9,728,450.00 | 354,623,780.67 |
| 2. Increase in current period | 43,606,201.68 | 84,448,655.92 | 3,880,728.03 | 131,935,585.63 | ||
| (1) Acquisition | 43,606,201.68 | 3,880,728.03 | 47,486,929.71 | |||
| (2) Internal R&D | 84,448,655.92 | 84,448,655.92 | ||||
| (3) Increase in business merger | ||||||
| 3. Decrease in current period | 642,793.07 | 642,793.07 | ||||
| (1) Disposal | ||||||
| (2) Exchange rate changes | 642,793.07 | 642,793.07 | ||||
| 4. Ending balance | 124,135,401.05 | 435,321.58 | 329,300,501.38 | 22,316,899.22 | 9,728,450.00 | 485,916,573.23 |
| II. Accumulated amortization | ||||||
| 1. Beginning balance | 8,715,354.85 | 435,321.58 | 98,353,211.73 | 14,429,058.66 | 3,693,762.50 | 125,626,709.32 |
| 2. Increase in current period | 2,665,890.55 | 44,254,570.60 | 2,609,312.13 | 965,550.00 | 50,495,323.27 | |
| (1) Provision | 2,665,890.55 | 44,254,570.60 | 2,609,312.13 | 965,550.00 | 50,495,323.27 | |
| 3. Decrease in current period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | 11,381,245.40 | 435,321.58 | 142,607,782.33 | 17,038,370.79 | 4,659,312.50 | 176,122,032.60 |
| III. Provision for impairment | ||||||
| 1. Beginning balance | ||||||
| 2. Increase in current period | ||||||
| (1) Provision |
| 3. Decrease in current period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | ||||||
| IV. Book value | ||||||
| 1. Ending book value | 112,754,155.65 | 186,692,719.05 | 5,278,528.43 | 5,069,137.50 | 309,794,540.63 | |
| 2. Beginning book value | 72,456,637.59 | 146,498,633.73 | 4,007,112.54 | 6,034,687.50 | 228,997,071.35 |
Proportion of intangible assets formed through internal R&D in the balance of intangible assets at the end of theperiod
(2) Situation of Land usage right without property certificate of title
□ applicable √ not applicable
27. Development expenditure
Unit: Yuan
| Items | Beginning balance | Increase in current period | Decrease in current period | Ending balance | ||||
| Internal development expenditure | Others | Recognized as intangible assets | Transferred to current profit and loss | |||||
| Intelligent controller project | 42,739,096.16 | 53,572,781.57 | 51,030,673.59 | 45,281,204.14 | ||||
| Lithium battery project | 3,140,677.88 | 10,886,815.69 | 10,224,439.80 | 3,803,053.77 | ||||
| Motor and control system project | 6,169,262.82 | 11,492,023.07 | 12,004,689.32 | 5,656,596.57 | ||||
| Other projects | 9,966,145.56 | 15,000,228.96 | 11,188,853.21 | 13,777,521.31 | ||||
| Total | 62,015,182.42 | 90,951,849.29 | 84,448,655.92 | 68,518,375.79 | ||||
28. Goodwill
(1) Original book value of goodwill
Unit: Yuan
| Name of investee or matters forming goodwill | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
| Resulted from business merger | Disposal | |||||
| Shenzhen YAKO Automation Technology Co., Ltd. | 107,314,446.71 | 107,314,446.71 | ||||
| Shenzhen Allied Control System Co., Ltd. | 53,768,699.68 | 53,768,699.68 | ||||
| Shenzhen Meanstone Intelligent Technology Co., Ltd. | 3,006,892.59 | 3,006,892.59 | ||||
| Hangzhou Zhidong Motor Technology Co., Ltd. | 1,322,921.77 | 1,322,921.77 | ||||
| Total | 165,412,960.75 | 165,412,960.75 |
(2) Provision for impairment of goodwill
Unit: Yuan
| Name of investee or matters forming goodwill | Beginning balance | Increase in current period | Decrease in current period | Ending balance | ||
| Provision | Disposal | |||||
| Shenzhen Allied Control System Co., Ltd. | 22,244,242.90 | 31,524,456.78 | 53,768,699.68 | |||
| Shenzhen Meanstone Intelligent Technology Co., Ltd. | 3,006,892.59 | 3,006,892.59 | ||||
| Total | 22,244,242.90 | 34,531,349.37 | 0.00 | 0.00 | 0.00 | 56,775,592.27 |
Information about the asset group or portfolio of goodwillDescription of goodwill impairment test process, key parameters (e.g. growth rate during the forecast period,growth rate during the stabilization period, profitability, discount rate, forecast period, etc. when the present valueof future cash flow is expected) and method for recognizing impairment loss of goodwill:
Impact of goodwill impairment test
29. Long-term deferred expense
Unit: Yuan
| Items | Beginning balance | Increase in current period | Current amortization amount | Other reduced amount | Ending balance |
| Decoration cost | 35,522,908.03 | 51,591,958.90 | 15,175,055.01 | 142,428.31 | 71,797,383.61 |
| Others | 114,816.62 | 197,634.09 | 32,163.23 | 280,287.48 | |
| Total | 35,637,724.65 | 51,789,592.99 | 15,207,218.24 | 142,428.31 | 72,077,671.09 |
30. Deferred income tax assets / deferred income tax liabilities
(1) Deferred income tax assets without offset
Unit: Yuan
| Items | Ending balance | Beginning balance | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Provision for asset impairment | 149,075,252.50 | 23,312,424.21 | 121,504,959.89 | 19,131,411.66 |
| Deductible loss | 43,740,568.84 | 10,286,420.54 | 43,164,561.84 | 9,334,360.42 |
| Amortization differences on intangible assets | 36,167,726.46 | 5,441,721.65 | 20,398,573.35 | 3,092,911.36 |
| Deferred income | 14,279,770.00 | 2,141,965.50 | 9,567,500.00 | 1,435,125.00 |
| Option fee | 93,402,952.30 | 14,010,442.85 | 46,093,916.53 | 6,914,087.48 |
| Others | ||||
| Total | 336,666,270.10 | 55,192,974.75 | 240,729,511.61 | 39,907,895.92 |
(2) Deferred income tax liabilities without offset
Unit: Yuan
| Items | Ending balance | Beginning balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Valuation and appreciation of assets of business merger under non-common control | 5,279,699.53 | 791,954.93 | 7,969,479.41 | 1,195,421.90 |
| Changes in fair value of trading financial assets | 62,074,391.17 | 9,311,158.68 | 167,635,845.80 | 25,145,376.87 |
| Book-tax difference in rental income | 3,411,531.24 | 852,882.81 | 2,413,903.03 | 603,475.76 |
| Others | 3,830,509.95 | 863,864.88 | 3,524,063.25 | 528,609.49 |
| Total | 74,596,131.89 | 11,819,861.30 | 181,543,291.49 | 27,472,884.02 |
(3) Deferred income tax assets or liabilities listed by net amount after offset
Unit: Yuan
| Items | Amount of offset | Ending balance of | Amount of mutual offset | Beginning balance of |
| between deferred income tax assets and liabilities at the end of the period | deferred income tax assets or liabilities after offset | between deferred income tax assets and liabilities at the beginning of the period | deferred income tax assets or liabilities after offset | |
| Deferred income tax assets | 55,192,974.75 | 39,907,895.92 | ||
| Deferred income tax liabilities | 11,819,861.30 | 27,472,884.02 |
(4) Details of unrecognized deferred income tax assets
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Deductible loss | 14,481,679.98 | 13,420,024.85 |
| Provision for asset impairment | 3,393,804.05 | 945,612.46 |
| Total | 17,875,484.03 | 14,365,637.31 |
(5) Deductible loss of unrecognized deferred income tax assets will mature in the following years
Unit: Yuan
| Year | Ending amount | Beginning amount | Remarks |
| 2021 | |||
| 2022 | 2,246.11 | ||
| 2023 | 1,004.12 | ||
| 2024 | |||
| 2025 | |||
| No time limit | 14,481,679.98 | 3,317,394.76 | |
| Total | 14,481,679.98 | 3,320,644.99 | -- |
31. Other non-current assets
Unit: Yuan
| Items | Ending balance | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Prepaid long-term assets | 34,639,355.39 | 34,639,355.39 | 51,329,093.10 | 51,329,093.10 | ||
| Total | 34,639,355.39 | 34,639,355.39 | 51,329,093.10 | 51,329,093.10 | ||
32. Short-term loans
(1) Classification of short-term loans
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Guaranteed loan | 8,000,000.00 | |
| Credit loan | 402,151,500.00 | 165,000,000.00 |
| Total | 402,151,500.00 | 173,000,000.00 |
(2) Overdue short-term loans
□ applicable √ not applicable
33. Trading financial liabilities
□ applicable √ not applicable
34. Derivative financial liabilities
□ applicable √ not applicable
35. Notes payable
Unit: Yuan
| Category | Ending balance | Beginning balance |
| Bank acceptance bill | 715,574,653.91 | 376,710,352.49 |
| Total | 715,574,653.91 | 376,710,352.49 |
The total amount of notes payable due but unpaid at the end of the period was Yuan.
36. Accounts payable
(1) Accounts payable listed
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Within 1 year | 1,540,652,638.39 | 972,783,647.00 |
| 1~2 years | 7,398,205.08 | 2,688,671.47 |
| 2~3 years | 484,275.57 | 992,109.82 |
| More than 3 years | 1,371,220.68 | 751,945.98 |
| Total | 1,549,906,339.72 | 977,216,374.27 |
(2) Significant accounts payable aged over 1 year
□ applicable √ not applicable
37. Advances received
(1) Advances received listed
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Within 1 year | 487,267.17 | 459,121.98 |
| 1~2 years | ||
| 2~3 years | ||
| 3 years and above | ||
| Total | 487,267.17 | 459,121.98 |
(2) Significant advances received aged over 1 year
□ applicable √ not applicable
38. Contractual liabilities
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Advances from customers | 72,576,117.56 | 36,595,546.06 |
| Total | 72,576,117.56 | 36,595,546.06 |
Amount of and reasons for significant changes in book value during the reporting period
□ applicable √ not applicable
39. Employee compensation payable
(1) Employee compensation payable listed
Unit: Yuan
| Items | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
| I. Short-term compensation | 128,067,238.64 | 952,009,058.90 | 905,458,370.11 | 174,617,927.43 |
| II. Post-employment benefits - defined contribution plan | 1,097,936.10 | 36,314,385.52 | 36,526,484.93 | 885,836.69 |
| Total | 129,165,174.74 | 988,323,444.42 | 941,984,855.04 | 175,503,764.12 |
(2) Short-term compensation listed
Unit: Yuan
| Items | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
| 1. Wages, bonuses, allowances and subsidies | 125,988,816.45 | 906,677,816.28 | 859,599,609.57 | 173,067,023.16 |
| 2. Employee benefits | 180,593.11 | 14,134,375.96 | 14,053,905.28 | 261,063.79 |
| 3. Social insurance expense | 887,242.60 | 17,108,249.71 | 17,763,494.11 | 231,998.20 |
| Including: medical insurance expense | 778,499.05 | 15,573,373.85 | 16,141,178.46 | 210,694.44 |
| Industrial injury insurance expense | 22,194.70 | 311,234.80 | 319,644.25 | 13,785.25 |
| Maternity insurance expense | 86,548.85 | 1,223,641.06 | 1,302,671.40 | 7,518.51 |
| 4. Housing provident fund | 68.10 | 13,782,634.29 | 13,782,702.39 | 0.00 |
| 5. Trade union funds and staff education funds | 131.20 | 144,584.46 | 144,506.40 | 209.26 |
| 8. Others | 1,010,387.18 | 161,398.20 | 114,152.36 | 1,057,633.02 |
| Total | 128,067,238.64 | 952,009,058.90 | 905,458,370.11 | 174,617,927.43 |
(3) Defined contribution plan listed
Unit: Yuan
| Items | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
| 1. Basic endowment insurance | 1,054,192.08 | 35,638,977.77 | 35,832,123.78 | 861,046.07 |
| 2. Unemployment insurance expense | 43,744.02 | 675,407.75 | 694,361.15 | 24,790.62 |
| Total | 1,097,936.10 | 36,314,385.52 | 36,526,484.93 | 885,836.69 |
40. Taxes payable
Unit: Yuan
| Items | Ending balance | Beginning balance |
| VAT (value-added tax) | 12,524,919.27 | 6,680,386.88 |
| Corporate income tax | 41,728,458.33 | 12,970,370.57 |
| Individual income tax | 5,003,297.27 | 3,959,618.49 |
| City maintenance and construction tax | 188,254.81 | 123,276.29 |
| Education surcharge | 134,467.71 | 88,063.35 |
| Property tax | 429,548.57 | 338,604.36 |
| Other taxes | 247,069.64 | 275,051.41 |
| Total | 60,256,015.60 | 24,435,371.35 |
41. Other payables
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Interest payable | 2,988,309.00 | |
| Other payables | 57,160,615.93 | 48,526,901.40 |
| Total | 57,160,615.93 | 51,515,210.40 |
(1) Interest payable
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Corporate bond interest | 1,909,259.00 | |
| Interest payable on short-term loans | 1,079,050.00 | |
| Total | 2,988,309.00 |
□ applicable √ not applicable
(2) Dividends payable
□ applicable √ not applicable
(3) Other payables
1) Other payables listed by nature
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Payment for equipment | 23,095,663.10 | 12,707,376.53 |
| Payment for tooling | 654,303.42 | 540,858.47 |
| Transportation expenses | 7,252,963.43 | 3,576,248.55 |
| Rent and utilities | 3,105,044.79 | 1,070,709.09 |
| Margin, deposit | 7,034,660.06 | 8,199,493.63 |
| Wages for labor dispatching | 2,150,932.92 | 2,776,280.00 |
| Consultation fee | 1,515,229.67 | 2,785,900.53 |
| Fuel card fee | 1,503,438.82 | 935,296.44 |
| Payment of decoration | 6,055,915.48 | 8,700,776.74 |
| Others | 4,792,464.24 | 7,233,961.42 |
| Total | 57,160,615.93 | 48,526,901.40 |
2) Other significant payables aged over 1 year
□ applicable √ not applicable
42. Liabilities held for sale
□ applicable √ not applicable
43. Non-current liabilities due within one year
□ applicable √ not applicable
44. Other current liabilities
□ applicable √ not applicable
45. Long-term loans
(1) Classification of long-term loans
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Mortgage loan | 200,000,000.00 | 200,000,000.00 |
| Total | 200,000,000.00 | 200,000,000.00 |
46. Bonds payable
(1) Bonds payable
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Convertible corporate bonds | 479,891,035.92 | |
| Total | 479,891,035.92 |
(2) Changes in increase or decrease of bonds payable (excluding preferred shares, perpetual bonds andother financial instruments classified as financial liabilities)
Unit: Yuan
| Name of bond | Par value | Issuing date | Maturity of bond | Issuing amount | Beginning balance | Current issue | Interest accrued at par value | Amortization of premiums or discounts | Current repayment | Current share conversion | Ending balance |
| Topband convertible bonds | 100.00 | 2019-3-7 | 6 years | 573,000,000.00 | 479,891,035.92 | 2,478,640.93 | 17,968,728.33 | 1,555,300.00 | 496,304,464.25 | 0.00 | |
| Total | -- | -- | -- | 573,000,000.00 | 479,891,035.92 | 2,478,640.93 | 17,968,728.33 | 1,555,300.00 | 496,304,464.25 | 0.00 |
(3) Description of conversion conditions and time of convertible corporate bondThe Company issued 5,730,000 convertible corporate bonds with a par value of 100 yuan on March 7, 2019, as approved by theChina Securities Regulatory Commission under ZJXK [2018] No. 1842.The annual interest of the bonds rates was 0.4% in
the first year, 0.6% in the second year, 1.5% in the third year, 2.0% in the fourth year, 2.5% in the fifth year and
3.0% in the sixth year. The annual interest payment date was the date of each full year from the first day ofissuance of the convertible corporate bonds, with principal repayment due in one lump sum. The initial conversionprice of the convertible bonds issued this time was 5.64 yuan per share and the conversion period is from the firsttrading day after six months from the end of the issuance (March 13, 2019, i.e. the date when the raised funds wastransferred to the issuer’s account) to the maturity date of the convertible bonds (i.e. September 13, 2019 to March
7, 2025). In case of ex-right or ex-dividend of stock during the bond duration, the conversion price will beadjusted accordingly. The implementation of 2018 annual equity distribution plan was completed by the Companyon May 29, 2019, and the conversion price was adjusted from 5.64 yuan per share to 5.54 yuan per share, with theadjusted conversion price effective from May 30, 2019.Terms of redemption on maturity: Within five trading days after the expiration of the convertible bondsissued this time, the Company will redeem all the unconverted convertible corporate bonds at 116% of the parvalue of the convertible bonds issued this time (including the last installment of interest) from the holders of theconvertible bonds.Conditional redemption provisions: During the conversion period of the convertible bonds issued this time, ifthe closing price of the Company’s A shares for at least 15 out of 30 consecutive trading days was not less than130% of the current conversion price (including 130%), or if the unconverted balance of the convertible bondsissued this time was less than 30,000,000, the Company shall have the right to redeem all or part of theunconverted convertible bonds at the price of the par value of the bonds plus accrued interest for the period.Put provisions:
(1) Conditional put provisions: In the last two interest-bearing years of the convertible corporate bondsissued this time, if the closing price of the Company’s shares for any 30 consecutive trading days was less than70% of the current conversion price, the holders of the convertible corporate bonds shall have the right to putbonds to the Company all or part of the convertible corporate bonds held by them at the price of the par value plusaccrued interest for the period. If the conversion price has been adjusted within the above-mentioned trading daysdue to the occurrence of bonus shares, conversion of capital, issuance of new shares (excluding the increasedshare capital due to the conversion of convertible corporate bonds issued this issue), allotment of shares anddistribution of cash dividends, the trading day before the adjustment shall be calculated according to theconversion price and closing price before the adjustment, and the trading day after the adjustment shall becalculated according to the conversion price and closing price after the adjustment. In the event of a downwardcorrection of the conversion price, the above “30 consecutive trading days” shall be recalculated from the firsttrading day after the adjustment of the conversion price. In the last two interest-bearing years, the holders ofconvertible corporate bonds may exercise the put right once each year after the put conditions were satisfied forthe first time in accordance with the above-mentioned conditions. If the put conditions were satisfied for the firsttime but the holders of convertible corporate bonds did not declare and put within the put reporting period
announced by the Company at that time, the put right cannot be exercised again in that interest-bearing year, andthe partial put right cannot be exercised by the holders of convertible corporate bonds more than once.
(2) Additional put provisions: If there was a significant change in the implementation of the investmentproject of the raised funds of the convertible corporate bonds issued by the Company compared with thecommitment of the Company in the prospectus, and such change was deemed by CSRC as a change in the use ofthe raised funds, the holders of the convertible corporate bonds shall have the right to put once. The holders ofconvertible corporate bonds have the right to put to the Company all or part of their convertible bonds at the parvalue of the bonds plus accrued interest for the period (See the relevant content of the redemption provisions inArticle 11 for the calculation of accrued interest for the period). The bonds may be put by the holders within theadditional put reporting period announced by the Company after the additional put conditions are met. If thebonds were not put within that additional put reporting period, the additional put right shall not be exercised.
(4) Description of other financial instruments classified as financial liabilities
□ applicable √ not applicable
47. Lease liabilities
□ applicable √ not applicable
48. Long-term accounts payable
□ applicable √ not applicable
49. Long-term employee compensation payable
□ applicable √ not applicable
50. Estimated liabilities
□ applicable √ not applicable
51. Deferred income
Unit: Yuan
| Items | Beginning balance | Increase in current | Decrease in current | Ending balance | Reasons for formation |
| period | period | ||||
| Governmental subsidies | 10,022,500.00 | 6,160,300.00 | 1,558,030.00 | 14,624,770.00 | Governmental subsidies related to assets |
| Total | 10,022,500.00 | 6,160,300.00 | 1,558,030.00 | 14,624,770.00 | -- |
Items involving government subsidies:
Unit: Yuan
| Liability items | Beginning balance | New subsidy amount in current period | Amount included in non-operating income in current period | Amount included in other income in current period | Amount of write-down costs in current period | Other changes | Ending balance | Asset-related/revenue-related |
| Special fund for the industrialization of high-efficiency energy-saving rare-earth permanent magnet motor | 1,495,000.00 | 195,000.00 | 1,300,000.00 | Asset-related | ||||
| R&D equipment project of intelligent home management system such as IoT cloud computing technology | 657,500.00 | 263,000.00 | 394,500.00 | Asset-related | ||||
| R&D project of key technology for clean energy DC system measurement | 275,000.00 | 50,000.00 | 225,000.00 | Asset-related |
| Nano lithium iron phosphate power battery project | 1,000,000.00 | 250,000.00 | 750,000.00 | Asset-related | ||||
| Key technology research and development of 18650-2.8A.h high power battery | 765,000.00 | 204,000.00 | 561,000.00 | Asset-related | ||||
| Intelligent grid connected project of distributed photovoltaic power station | 180,000.00 | 60,000.00 | 120,000.00 | Asset-related | ||||
| R&D project of 60A solar charging controller with peak power tracking technology | 650,000.00 | 120,000.00 | 530,000.00 | Asset-related | ||||
| R&D project of unmanned Robot Cleaner | 3,000,000.00 | 3,000,000.00 | Asset-related | |||||
| Key technology research and development project of rare-earth permanent magnet brushless | 2,000,000.00 | 2,000,000.00 | 4,000,000.00 | Asset-related |
| DC motor and controller with high speed ratio and variable frequency | ||||||||
| Technological transformation supported by 2020 anti-epidemic national debt funds | 4,160,300.00 | 416,030.00 | 3,744,270.00 | Asset-related | ||||
| Total | 10,022,500.00 | 6,160,300.00 | 1,558,030.00 | 14,624,770.00 |
52. Other non-current liabilities
□ applicable √ not applicable
53. Share capital
Unit: Yuan
| Beginning balance | Increase and decrease of change this time (+, -) | Ending balance | |||||
| Issuance of new shares | Stock dividend | Conversion of accumulation fund into shares | Others | Subtotal | |||
| Total number of shares | 1,018,775,769.00 | 116,441,040.0 | 116,441,040.00 | 1,135,216,809.00 | |||
54. Other equity instruments
(1) Basic information of preferred shares, perpetual bonds and other financial instruments issued at theend of the period
□ applicable √ not applicable
(2) Changes in preferred shares, perpetual bonds and other financial instruments issued at the end of theperiod
Unit: Yuan
| Issued and outstanding financial instruments | At the beginning of the period | Increase in current period | Decrease in current period | At the end of the period | ||||
| Quantity | Book value | Quantity | Book value | Quantity | Book value | Quantity | Book value | |
| Convertible corporate bonds | 5,727,777 | 104,535,879.24 | 5,727,777 | 104,535,879.24 | 0.00 | |||
| Total | 5,727,777 | 104,535,879.24 | 5,727,777 | 104,535,879.24 | ||||
55. Capital reserve
Unit: Yuan
| Items | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
| Capital premium (share premium) | 432,470,271.26 | 540,668,536.71 | 49,192,740.63 | 923,946,067.35 |
| Other capital reserve | 24,086,011.06 | 17,834,787.32 | 9,132,825.97 | 32,787,972.40 |
| Total | 456,556,282.32 | 558,503,324.03 | 58,325,566.60 | 956,734,039.75 |
Other description, including the changes in increase and decrease in current period and the reasons for changes:
Note 1: The increase in share premium for the year was 540,668,536.71 yuan, of which: 498,506,425.85 yuanwas increased due to the conversion of convertible bonds, 7,319,817.00 yuan of option expenses previouslyincluded in other capital surplus was transferred to share premium due to the unlocking of options, and32,428,355.38 yuan of the excess of issuance proceeds received from the unlocking of options was included overthe balance of other capital surplus previously accrued. The deferred income tax of 2,413,938.48 yuancorresponding to the excess of pre-tax deductible expenses of the exercised options in the current year wasincluded in the share premium. The decrease in share premium of 49,192,740.63 yuan for the year was mainly dueto the write-down of capital surplus share premium of 49,192,740.63 yuan as a result of the acquisition ofminority interests in R&D and control of automation.Note 2: Other capital surplus was increased by 17,834,787.33 yuan during the year, of which: 11,021,774.20 yuanof share-based payment expense was recognized under the stock option plan; 6,813,013.13 yuan of deferredincome tax assets was recognized based on the pre-tax deductible stock option expense expected to be exercisedin the future. Other capital surplus was decreased by 9,132,825.99 yuan this year, of which: other capital surplus
was decreased by 7,319,817.00 yuan due to the transfer of stock option exercise to capital premium; other capitalsurplus was decreased by 1,813,008.99 yuan due to the offsetting of share-based payment expense by thedeparture of incentive recipients.
56. Treasury stock
Unit: Yuan
| Items | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
| Repurchase of company shares in competitive trading | 60,009,612.52 | 20,008,353.16 | 80,017,965.68 | |
| Total | 60,009,612.52 | 20,008,353.16 | 80,017,965.68 |
57. Other comprehensive income
Unit: Yuan
| Items | Beginning balance | Amount incurred in current period | Ending balance | |||||
| Amount before income tax in current period | Less: current profits and losses included in other comprehensive income in the previous period | Less: current retained earnings included in other comprehensive income in the previous period | Less: income tax expenses | Attributable to parent company after tax | Attributable to minority shareholders after tax | |||
| II. Other comprehensive income to be reclassified into profit and loss | -3,059,762.06 | -22,221,934.22 | -726,466.31 | -21,495,467.91 | -24,555,229.97 | |||
| Translation difference of foreign currency financial statements | -3,059,762.06 | -27,065,042.95 | -27,065,042.95 | -30,124,805.01 | ||||
| Others | 4,843,108.73 | -726,466.31 | 5,569,575.04 | |||||
| Total amount of | -3,059,762.06 | -22,221,,934.22 | -726,466.31 | -21,495,467.91 | -24,555,229.97 | |||
Other description, including the adjustment to the effective portion of the profit and loss of cash flow hedgingtransferred to the amount initially recognized for the hedged item:
58. Special reserve
□ applicable √ not applicable
59. Surplus reserve
Unit: Yuan
othercomprehensiveincome
Items
| Items | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
| Statutory surplus reserve | 127,284,211.74 | 24,075,745.79 | 151,359,957.53 | |
| Total | 127,284,211.74 | 24,075,745.79 | 151,359,957.53 |
60. Undistributed profit
Unit: Yuan
| Items | Current period | Prior period |
| Undistributed profit at the end of last period before adjustment | 866,301,932.11 | 627,537,034.07 |
| Total undistributed profit at the beginning of the period (+ for increase, - for decrease) | 33,773,958.15 | |
| Undistributed profit at the beginning of last period after adjustment | 866,301,932.11 | 661,310,992.22 |
| Plus: Net profit attributable to the owners of the parent company in current period | 533,516,814.04 | 330,827,437.00 |
| Less: withdrawal of statutory surplus reserve | 24,075,745.7900 | 24,449,890.93 |
| Common Stock dividends payable | 50,798,630.45 | 101,386,606.18 |
| Undistributed profit at the end of the period | 1,324,944,369.9100 | 866,301,932.11 |
Details of undistributed profit at the beginning of adjustment period:
1) Due to the retroactive adjustment of Accounting Standards for Business Enterprises and related new regulations,the undistributed profit at the beginning of the period was 0.00 yuan.
2) Due to the change of accounting policy, the undistributed profit at the beginning of the period was 0.00 yuan.
3) Due to the correction of major accounting errors, the undistributed profit at the beginning of the period was
0.00 yuan.
4) Due to the change in merger under the same control, the undistributed profit at the beginning of the period was
0.00 yuan.
5) The undistributed profit at the beginning of the period was 0.00 yuan with other adjustments.
61. Operating income and operating costs
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period | ||
| Income | Cost | Income | Cost | |
| Main business | 5,509,664,078.91 | 4,183,169,715.86 | 4,065,588,092.70 | 3,187,058,098.70 |
| Other business | 50,518,919.30 | 21,124,114.91 | 33,267,288.00 | 10,443,636.43 |
| Total | 5,560,182,998.21 | 4,204,293,830.77 | 4,098,855,380.70 | 3,197,501,735.13 |
Whether the lower of audited net income before or after deducting the non-recurring profit and loss is negative
□ Yes √ No
Income-related information:
□ applicable √ not applicable
62. Taxes and surcharges
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| City maintenance and construction tax | 6,324,873.31 | 11,620,278.16 |
| Education surcharge | 4,517,766.67 | 8,300,108.77 |
| Property tax | 6,798,046.02 | 5,691,202.24 |
| Land use tax | 761,833.73 | 713,133.98 |
| Stamp duty | 3,161,739.96 | 1,978,717.11 |
| Others | 126,323.00 | 34,003.73 |
| Total | 21,690,582.69 | 28,337,443.99 |
63. Sales expenses
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Employee compensation | 84,228,078.15 | 67,668,913.58 |
| Transportation expenses | 23,782,813.44 | |
| Business entertainment expenses | 11,324,256.98 | 8,822,809.60 |
| Travel expenses | 6,448,204.97 | 9,494,443.99 |
| Intermediary service expenses | 12,857,876.78 | 5,789,023.54 |
| Exhibition expenses | 1,883,321.83 | 2,837,703.49 |
| Materials expenses | 4,981,728.64 | 6,040,253.95 |
| Mail expenses | 2,083,622.84 | 1,431,377.30 |
| Option fee | 1,070,281.42 | 1,978,364.59 |
| Advertising expenses | 585,897.69 | 804,590.03 |
| Others | 7,435,164.40 | 6,239,801.19 |
| Total | 132,898,433.70 | 134,890,094.70 |
64. Administrative expenses
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Employee compensation | 101,669,023.72 | 80,240,845.75 |
| Decoration cost | 15,080,374.60 | 8,000,824.55 |
| Intermediary service expenses | 11,006,233.18 | 13,053,238.86 |
| Depreciation expense | 10,022,105.25 | 6,546,844.76 |
| Amortization of intangible assets | 5,366,794.68 | 4,272,259.57 |
| Rent and utilities | 4,678,076.32 | 4,790,022.14 |
| Low-value consumables | 4,814,426.22 | 1,025,656.80 |
| Property insurance expenses | 3,943,952.43 | 3,909,544.24 |
| Office expenses | 2,688,859.58 | 1,360,357.58 |
| Option fee | 2,161,539.30 | 3,637,827.49 |
| Travel expenses | 2,106,934.87 | 3,746,250.40 |
| Recruitment expenses | 1,761,794.56 | 2,314,075.87 |
| Others | 15,996,063.62 | 9,724,997.49 |
| Total | 181,296,178.33 | 142,622,745.50 |
65. R&D expenses
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Employee compensation | 203,174,657.25 | 163,254,464.74 |
| Amortization of intangible assets | 44,628,065.78 | 30,909,754.89 |
| Material expenses | 17,494,266.42 | 16,267,606.20 |
| Depreciation expense | 6,091,886.30 | 6,275,637.85 |
| Low-value consumables | 5,366,096.64 | 2,252,150.50 |
| Testing expense | 5,009,617.91 | 2,329,033.03 |
| Option fee | 4,721,777.37 | 10,505,635.48 |
| Tooling expense | 4,480,409.98 | 7,345,678.03 |
| Decoration cost | 3,624,175.64 | 408,020.21 |
| Travel expenses | 3,210,677.11 | 3,695,156.46 |
| Intermediary service expenses | 4,028,380.25 | 2,601,863.78 |
| Utilities | 2,880,537.35 | 2,608,134.45 |
| Rental expense | 1,876,088.61 | 2,351,404.49 |
| Others | 7,031,640.96 | 6,991,428.84 |
| Total | 313,618,277.57 | 257,795,968.95 |
66. Financial expense
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Interest expense | 41,611,921.13 | 37,039,755.07 |
| Less: Interest income | 7,457,090.20 | 7,330,866.39 |
| Profit or loss on exchange | 98,517,832.20 | -13,428,533.19 |
| Others | 44,313,350.36 | 19,899,235.95 |
| Total | 176,986,013.49 | 36,179,591.44 |
67. Other revenues
Unit: Yuan
| Source for other revenues | Amount incurred in current period | Amount incurred in prior period |
| Governmental subsidies | 27,326,933.85 | 40,717,067.89 |
| Added-value tax refund on demand | 7,158,399.28 | 6,076,408.89 |
| Return of individual income tax service charge | 766,726.03 | 620,079.09 |
| Others | 13,534.31 | 6,523.17 |
| Total | 35,265,593.47 | 47,420,079.04 |
68. Investment revenue
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Long-term equity investment revenue accounted by equity method | -360,946.80 | 2,176,410.20 |
| Investment revenue of trading financial assets during holding period | 1,301,220.00 | |
| Investment revenue from disposal of trading financial assets | 230,366,485.41 | |
| Investment revenue of financial products | 5,602,702.63 | 4,847,353.13 |
| Forward foreign exchange contract settlement profit and loss | 22,970,000.00 | -10,416,000.00 |
| Total | 258,578,241.24 | -2,091,016.67 |
69. Net exposure hedging revenue
□ applicable √ not applicable
70. Fair value change revenue
Unit: Yuan
| Source for fair value change revenue | Amount incurred in current period | Amount incurred in prior period |
| Trading financial assets | -105,561,454.64 | 120,249,096.66 |
| Total | -105,561,454.64 | 120,249,096.66 |
71. Credit impairment loss
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Bad debt loss of other receivables | 1,590,385.44 | -1,196,458.19 |
| Bad debt loss of accounts receivable | 9,229,256.64 | -25,556,644.72 |
| Bad debt loss of commercial acceptance bill | -172,417.86 | |
| Total | 10,647,224.22 | -26,753,102.91 |
72. Asset impairment loss
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| II. Loss on inventory valuation and contract performance cost impairment loss | -64,732,329.22 | -25,892,457.30 |
| XI. Goodwill impairment loss | -34,531,349.37 | -22,244,242.90 |
| Total | -99,263,678.59 | -48,136,700.20 |
73. Assets disposal revenue
Unit: Yuan
| Source of assets disposal revenue | Amount incurred in current period | Amount incurred in prior period |
| Revenue from disposal of non-current assets | -932,817.83 | 2,736.00 |
| Total | -932,817.83 | 2,736.00 |
74. Nonbusiness income
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period | Amount included in the current non-recurring profit and loss |
| Customer compensation income | 3,078,009.43 | ||
| Supplied goods deduction income | 10,645.00 | 1,043,173.17 | 10,645.00 |
| Others | 3,080,907.14 | 1,873,794.41 | 3,080,907.14 |
| Total | 3,091,552.14 | 5,994,977.01 | 3,091,552.14 |
Government subsidy included in the current profits and losses
Unit: Yuan
| Subsidy project | Grant entity | Grant reasons | Nature type | Whether the subsidy affect the profit and loss of the year | Whether it is the special subsidy | Amount incurred in the current period | Amount incurred in the last period | |
| Added-value tax refund on demand | 7,158,399.28 | 6,076,408.89 | Related to revenue | |||||
| Return of individual income tax service charge | 766,726.03 | 620,079.09 | Related to revenue | |||||
| Technological transformation supported by 2020 anti-epidemic national debt | 416,030.00 | Asset-related |
| funds | ||||||||
| Research and development equipment funding of smart home management system based on Internet of Things cloud computing technology | 263,000.00 | 263,000.00 | Asset-related | |||||
| Nano lithium iron phosphate power battery project | 250,000.00 | 250,000.00 | Asset-related | |||||
| High rate 18650-2.8Ah power battery key technology research and development project | 204,000.00 | 204,000.00 | Asset-related | |||||
| Industrialization of high efficiency energy saving motor for permanent magnet with rare earth | 195,000.00 | 195,000.00 | Asset-related | |||||
| Research and development of 60A solar charging controller with peak power tracking technology | 120,000.00 | 120,000.00 | Asset-related | |||||
| Intelligent grid connected project of distributed photovoltaic power station | 60,000.00 | 52,500.00 | Asset-related | |||||
| Clean energy projects subsidy | 50,000.00 | 57,500.00 | Asset-related | |||||
| Return of unemployment insurance premium | 5,991,047.80 | - | Related to revenue | |||||
| Training replaced for operation subsidy | 2,709,000.00 | - | Related to revenue | |||||
| Support and subsidy for enterprises to expand production and increase efficiency | 2,511,000.00 | 2,450,000.00 | Related to revenue | |||||
| Enterprise development and research funding | 2,199,800.00 | 4,733,400.00 | Related to revenue | |||||
| Export credit insurance subsidy | 2,052,992.00 | 1,953,075.00 | Related to revenue | |||||
| Industrial and commercial electricity subsidy | 1,629,404.77 | 2,216,473.00 | Related to revenue | |||||
| Two-tax financial subsidy | 1,540,000.00 | - | Related to revenue | |||||
| Position stabilization subsidy | 1,311,398.13 | 800,174.91 | Related to revenue | |||||
| Technical transformation and improvement project funding | 950,000.00 | 2,370,000.00 | Related to revenue | |||||
| Special funds for foreign trade development of enterprises | 655,162.00 | - | Related to revenue | |||||
| Support and subsidiary for emerging industries | 520,000.00 | - | Related to revenue | |||||
| Denglinghui multiplying plan subsidy | 500,000.00 | 100,000.00 | Related to revenue |
| Industrial Internet development support plan | 350,000.00 | - | Related to revenue | |||||
| Reward for scale growth of industrial enterprises | 300,000.00 | - | Related to revenue | |||||
| Project funds of discount subsidy scheme of science and technology finance in 2020 | 296,300.00 | - | Related to revenue | |||||
| Double promotion funding for technically innovative doubling special funding plan quality brand | 280,000.00 | - | Related to revenue | |||||
| Filing subsidy | 270,000.00 | - | Related to revenue | |||||
| Special fund for Huizhou industry and informatization issued by Zhongkai Economic Development Bureau | 250,000.00 | 2,500,000.00 | Related to revenue | |||||
| Subsidy for recognition of high-tech enterprises for counseling services | 200,000.00 | 20,000.00 | Related to revenue | |||||
| Steady growth subsidy | 200,000.00 | 834,600.00 | Related to revenue | |||||
| Patent subsidy | 169,500.00 | 111,510.00 | Related to revenue | |||||
| Pre-position training subsidy | 127,600.00 | 84,600.00 | Related to revenue | |||||
| Sub-item funds for energy conservation and emission reduction | 56,073.15 | 200,000.00 | Related to revenue | |||||
| Enterprise high-tech enterprise recognition award subsidy | 50,000.00 | 714,000.00 | Related to revenue | |||||
| Exhibition subsidy | 5,000.00 | 441,400.00 | Related to revenue | |||||
| Municipal Commission of Economy, Trade and Information Technology: special fund for the development of industry and information technology | - | 400,000.00 | Related to revenue | |||||
| Lithium power battery project | - | 11,155,400.00 | Related to revenue | |||||
| Financial support fund of Xinqiao Town of Songjiang District of Shanghai | - | 290,000.00 | Related to revenue | |||||
| Subsidy for advantageous industrial clusters | - | 850,000.00 | Related to revenue | |||||
| Subsidy for large-scale industrial innovation ability cultivation and promotion support plan | - | 1,000,000.00 | Related to revenue | |||||
| Subsidy for discount of import interest | - | 420,995.00 | Related to revenue |
| Reward for enterprise scale expansion | - | 3,511,300.00 | Related to revenue | |||||
| Support fund for enterprise information construction project | - | 2,180,000.00 | Related to revenue | |||||
| Other projects | 658,160.31 | 244,663.15 | Related to revenue | |||||
| Total | 35,265,593.47 | 47,420,079.04 |
75. Non-operating expenses
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period | Amount included in the current non-recurring profit and loss |
| Loss on damage and scrapping of non-current assets | 1,229,856.20 | 2,692,727.66 | 1,229,856.20 |
| Customer quality deduction expenditure | 3,257,648.65 | 1,735,670.32 | 3,257,648.65 |
| Public welfare donation expenditure | 100,000.00 | 100,000.00 | |
| Others | 470,326.97 | 501,542.69 | 470,326.97 |
| Total | 5,057,831.82 | 4,929,940.67 | 5,057,831.82 |
76. Income tax expense
(1) Table of income tax expense
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Current income tax expense | 95,921,210.40 | 34,292,792.53 |
| Deferred income tax expense | -20,949,784.64 | 18,354,286.85 |
| Total | 74,971,425.76 | 52,647,079.38 |
(2) Adjustment process of accounting profit and income tax expense
Unit: Yuan
| Items | Amount incurred in current period |
| Total profits | 626,166,509.85 |
| Income tax expenses calculated at statutory / applicable tax rates | 93,924,976.48 |
| Impact of different tax rates on subsidiaries | -1,948,555.30 |
| Effect of income tax adjustment in previous period | 270,048.91 |
| Impact of non-deductible costs, expenses and losses | 1,290,663.04 |
| Impact of deductible loss of unrecognized deferred income tax assets in previous period | -607.04 |
| Impact of deductible temporary difference or deductible loss of unrecognized deferred income tax assets in the current period | 4,228,108.00 |
| Impact of additional deductible expenses | -15,396,551.45 |
| Impact of tax exemption policy for sub-subsidiaries in Vietnam | -11,550,176.74 |
| Impact of other adjustments | 4,153,519.86 |
| Income tax expense | 74,971,425.76 |
77. Other comprehensive income
See Note 57-Other Comprehensive Income for details.
78. Items of cash flow statement
(1) Other cash received related to operating activities
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Interest income | 7,457,090.20 | 7,330,866.39 |
| Governmental subsidies | 31,929,203.85 | 40,717,067.89 |
| Deposit and margin collection | 16,606,451.15 | 14,785,131.66 |
| Return of individual income tax | 766,726.03 | 615,538.52 |
| Individual income tax collected | 12,076,403.76 | 16,534,725.48 |
| Housing subsidy for talents | 63,328.86 | 3,045,268.00 |
| Personal borrowings and expenditures | 1,188,276.23 | 2,972,383.28 |
| Others | 3,869,236.60 | 2,432,742.79 |
| Compensation | 25,603,304.78 | |
| Total | 99,560,021.46 | 88,433,724.01 |
(2) Other cash paid related to operating activities
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Service charge | 2,319,492.32 | 1,731,829.20 |
| Management expenses | 53,061,394.35 | 47,357,447.49 |
| Research and development expenses | 55,001,890.87 | 43,587,770.40 |
| Sales expenses | 47,229,489.36 | 63,321,862.91 |
| Margin and deposit expenses | 9,802,400.50 | 21,175,143.91 |
| Employee borrowings | 521,314.00 | 1,435,238.82 |
| Individual income tax of equity incentive paid | 12,076,403.76 | |
| Others | 3,291,207.76 | 280,937.18 |
| Total | 183,303,592.92 | 178,890,229.91 |
(3) Other cash received related to investment activities
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| 502,944.51 | ||
| Total | 0.00 | 502,944.51 |
(4) Other cash paid related to investment activities
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Individual income tax on acquisition of shares | 20,016,000.00 | |
| Total | 20,016,000.00 | 0.00 |
(5) Other cash received related to financing activities
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Note margin | 45,516,139.25 | 76,675,723.20 |
| Guarantee margin | 5,960,105.14 | 4,894,500.00 |
| Total | 51,476,244.39 | 81,570,223.20 |
(6) Other cash paid related to financing activities
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Note margin | 13,144,524.44 | 53,276,279.48 |
| Guarantee margin | 4,894,500.00 | 456,380.78 |
| Intermediary fee for issuing convertible bonds | 6,720,940.10 | |
| Repurchase of treasury stock | 20,008,353.16 | 55,907,257.99 |
| Restricted stock repurchasing and others | 773,579.85 | |
| Total | 38,047,377.60 | 117,134,438.20 |
79. Supplementary information of cash flow statement
(1) Supplementary information of cash flow statement
Unit: Yuan
| Supplementary information | Current amount | Amount of the previous period |
| 1. Adjusting net profit to cash flow from operating activities | -- | -- |
| Net profit | 551,195,084.0900 | 340,636,849.87 |
| Plus: Impairment of assets | 88,616,454.37 | 74,889,803.1100 |
| Depreciation of fixed assets, depletion of oil and gas assets as well as depreciation of productive biological assets | 80,597,211.85 | 64,744,439.3200 |
| Depreciation of use right assets | ||
| Amortization of intangible assets | 50,357,893.86 | 35,701,242.8200 |
| Amortization of long-term deferred expenses | 15,207,218.24 | 4,302,110.9300 |
| Losses from disposal of fixed assets, intangible assets and other long-term assets (income marked with “-”) | 932,817.83 | -2,736.0000 |
| Losses on scrapping of fixed assets (income marked with “-”) | 1,229,856.20 | 2,692,727.6600 |
| Loss from fair value change (income marked with “-”) | 105,561,454.64 | -120,249,096.6600 |
| Financial expenses (income marked with “-”) | 93,764,044.38 | 37,885,616.0200 |
| Investment loss (income marked with “-”) | -258,578,241.24 | 2,091,016.6700 |
| Decrease in deferred income tax assets (increase marked with “-”) | -5,331,660.91 | 124,001.6700 |
| Increase in deferred income tax liabilities (decrease marked with “-”) | -15,619,358.99 | 18,234,920.1500 |
| Decrease in inventory (increase marked with “-”) | -673,392,280.5900 | -47,156,515.6400 |
| Decrease in operating receivables (increase marked with “-”) | -511,359,671.27 | -623,446,751.1000 |
| Increase in operating payables (decrease marked with “-”) | 1,115,511,120.73 | 595,083,407.1500 |
| Other | 9,208,765.1900 | 18,946,664.2300 |
| Net cash flow from operating activities | 647,900,708.380 | 404,477,700.20 |
| 2．Major investment and financing activities not involving cash receipts and | -- | -- |
| payments: | ||
| Conversion of debt into capital | ||
| Convertible bonds due within one year | ||
| Fixed assets acquired under finance leases | ||
| 3．Net changes in cash and cash equivalents: | -- | -- |
| Ending balance of cash | 1,196,835,834.92 | 761,845,320.49 |
| Less: Beginning balance of cash | 761,845,320.49 | 429,764,144.33 |
| Plus: Ending balance of cash equivalents | ||
| Less: Beginning balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 434,990,514.43 | 332,081,176.16 |
(2) Net cash paid for acquirement of subsidiaries in the current period
□ applicable √ not applicable
(3) Net cash received for disposal of subsidiaries in the current period
□ applicable √ not applicable
(4) Composition of cash and cash equivalents
Unit: Yuan
| Items | Ending balance | Beginning balance |
| III. Balance of cash and cash equivalents at the end of the period | 1,196,835,834.92 | 761,845,320.49 |
80. Notes to items in change statement of owner’s equity
□ applicable √ not applicable
81. Assets with limited ownership or use right
Unit: Yuan
| Items | Account value at the end of the period | Restricted reasons |
| Monetary capital | 22,259,641.58 | Apply to the bank for the security deposit and guarantee deposit for issuing bank acceptance bill |
| Notes receivable | 22,927,362.22 | Apply to the bank for issuing bills pledged by bank acceptance bills |
| Fixed assets | 251,597,560.32 | Mortgage housing loan |
| Total | 296,784,564.12 | -- |
82. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: Yuan
| Items | Foreign currency balance at the end of the period | Conversion rate | Balance converted into RMB at the end of the period |
| Monetary capital | -- | -- | 201,574,251.97 |
| Including: USD | 20,062,692.72 | 6.5249 | 130,907,063.75 |
| Euro | 576,059.13 | 8.0250 | 4,622,874.52 |
| Hong Kong Dollar | 699,179.92 | 0.8416 | 588,457.79 |
| Indian rupee | 592,364,414.99 | 0.0891 | 52,805,773.23 |
| Vietnamese dong | 38,799,662,184.00 | 0.0003 | 10,964,698.16 |
| Japanese Yen | 26,652,295.00 | 0.0632 | 1,685,384.53 |
| Accounts receivable | -- | -- | 720,990,899.48 |
| Including: USD | 104,954,081.13 | 6.5249 | 684,814,883.97 |
| Euro | 925,597.70 | 8.0250 | 7,427,921.54 |
| Hong Kong Dollar | 19,173,963.63 | 0.8416 | 16,137,574.75 |
| Indian rupee | 99,526,623.33 | 0.0891 | 8,872,208.00 |
| Vietnamese dong | 13,231,095,669.99 | 0.0003 | 3,739,078.18 |
| Long-term loans | -- | -- | |
| Including: USD | |||
| Euro | |||
| Hong Kong Dollar | |||
| Accounts payable | 14,905,144.53 | ||
| Including: USD | 1,931,024.24 | 6.5249 | 12,599,740.06 |
| Hong Kong dollar | 35,810.06 | 0.8416 | 30,139.18 |
| Indian rupee | 4,216,523.90 | 0.0891 | 375,878.09 |
| Vietnamese dong | 6,721,173,375.73 | 0.0003 | 1,899,388.63 |
(2) Description of overseas business entities, including for important overseas business entities, disclosure ofmain overseas business locations, recording currency and selection basis as well as disclosure of reasons forchanges in recording currency.
√applicable □ not applicable
1. Topband India Private Limited, a subsidiary of the Company, is mainly located in Pune City, Maharashtra, India,with Indian Rupee as the recording currency;
2. Topband (Vietnam) Co., Ltd, a sub-subsidiary of the Company, is mainly located in Binh Duong, Vietnam, withVietnamese dong as the recording currency;
3. TOPBAND SMART DONGNAI (VIETNAM) Co., ltd, a sub-subsidiary of the Company, is mainly located inDong Nai, Vietnam, with Vietnamese dong as the recording currency;
4. Topband Germany GmbH, a sub-subsidiary of the Company, is mainly located in Unterf?hring, Germany, withEuro as the recording currency;
5. TOPBAND JAPAN Co., Ltd., a sub-subsidiary of the Company, is mainly located in Nagoya, Japan, withJapanese Yen as the recording currency;
83. Hedging
□ applicable √ not applicable
84. Government subsidies
(1) Basic information of government subsidies
Unit: Yuan
| Category | Amount | Items presented | Amount included in current profit and loss |
| Technological transformation supported by 2020 anti-epidemic national debt funds | 4,160,300.00 | Deferred income | 416,030.00 |
| Key technology research and development project of rare-earth permanent magnet brushless DC motor and controller with high speed ratio and variable frequency | 2,000,000.00 | Deferred income | 0.00 |
| Added-value tax refund on demand | 7,158,399.28 | Other income | 7,158,399.28 |
| Return of individual income tax service charge | 766,726.03 | Other income | 766,726.03 |
| Research and development equipment funding of smart home management system based on Internet of Things cloud computing | 263,000.00 | Other income | 263,000.00 |
| technology | |||
| Nano lithium iron phosphate power battery project | 250,000.00 | Other income | 250,000.00 |
| High rate 18650-2.8Ah power battery key technology research and development project | 204,000.00 | Other income | 204,000.00 |
| Industrialization of high efficiency energy saving motor for permanent magnet with rare earth | 195,000.00 | Other income | 195,000.00 |
| Research and development of 60A solar charging controller with peak power tracking technology | 120,000.00 | Other income | 120,000.00 |
| Intelligent grid connected project of distributed photovoltaic power station | 60,000.00 | Other income | 60,000.00 |
| Clean energy projects subsidy | 50,000.00 | Other income | 50,000.00 |
| Return of unemployment insurance premium | 5,991,047.80 | Other income | 5,991,047.80 |
| Training replaced for operation subsidy | 2,709,000.00 | Other income | 2,709,000.00 |
| Support and subsidy for enterprises to expand production and increase efficiency | 2,511,000.00 | Other income | 2,511,000.00 |
| Enterprise development and research funding | 2,199,800.00 | Other income | 2,199,800.00 |
| Export credit insurance subsidy | 2,052,992.00 | Other income | 2,052,992.00 |
| Industrial and commercial electricity subsidy | 1,629,404.77 | Other income | 1,629,404.77 |
| Two-tax financial subsidy | 1,540,000.00 | Other income | 1,540,000.00 |
| Position stabilization subsidy | 1,311,398.13 | Other income | 1,311,398.13 |
| Technical transformation and improvement project funding | 950,000.00 | Other income | 950,000.00 |
| Special funds for foreign trade development of enterprises | 655,162.00 | Other income | 655,162.00 |
| Support and subsidiary for emerging industries | 520,000.00 | Other income | 520,000.00 |
| Denglinghui multiplying plan subsidy | 500,000.00 | Other income | 500,000.00 |
| Industrial Internet development support plan | 350,000.00 | Other income | 350,000.00 |
| Reward for scale growth of industrial enterprises | 300,000.00 | Other income | 300,000.00 |
| Project funds of discount subsidy scheme of science and technology finance in 2020 | 296,300.00 | Other income | 296,300.00 |
| Double promotion funding for technically innovative doubling special funding plan quality brand | 280,000.00 | Other income | 280,000.00 |
| Filing subsidy | 270,000.00 | Other income | 270,000.00 |
| Special fund for Huizhou industry and informatization issued by Zhongkai Economic Development Bureau | 250,000.00 | Other income | 250,000.00 |
| Subsidy for recognition of high-tech enterprises for counseling services | 200,000.00 | Other income | 200,000.00 |
| Steady growth subsidy | 200,000.00 | Other income | 200,000.00 |
| Patent subsidy | 169,500.00 | Other income | 169,500.00 |
| Pre-position training subsidy | 127,600.00 | Other income | 127,600.00 |
| Sub-item funds for energy conservation and emission reduction | 56,073.15 | Other income | 56,073.15 |
| Enterprise high-tech enterprise recognition award subsidy | 50,000.00 | Other income | 50,000.00 |
| Exhibition subsidy | 5,000.00 | Other income | 5,000.00 |
| Other projects | 658,160.31 | Other income | 658,160.31 |
(2) Situation of government subsidies refund
□ applicable √ not applicable
Other description:
85. Others
VIII. Changes in the Scope of Consolidation
1. Merger of enterprises under different control
□ applicable √ not applicable
2. Merger of enterprises under the same control
□ applicable √ not applicable
3. Reverse purchase
Basic information of the transaction, the basis for the reverse purchase of the transaction, whether the assets andliabilities retained by the listed company constitute the business and its basis, the determination of the merger cost,the amount of the adjustment of the equity when the transaction is processed as an equity transaction and itscalculation:
4. Disposal of subsidiaries
Is there single disposal of the investment in a subsidiary which results in loss of control
□ Yes √ No
Are there are step-by-step disposal of the investment in a subsidiary through multiple transactions and loss ofcontrol in the current period
□ Yes √ No
5. Changes in the scope of merger due to other reasons
Explanations for the changes in the scope of the merger caused by other reasons (e.g., establishment of newsubsidiaries, or liquidation of subsidiaries, etc.) and relevant circumstances:
1. On January 6, 2020, Topband (Hong Kong) Co., Ltd., a subsidiary of the Company, invested in theestablishment of a wholly-owned sub-subsidiary - Topband Smart Dongnai (Vietnam) Co., Ltd. with registeredcapital of USD7.5 million, which has been included in the scope of consolidated statements since the date ofestablishment.
2. On March 13, 2020, the Company invested in the establishment of a wholly-owned subsidiary - ShenzhenTopband Supply Chain Services Co., Ltd. with registered capital of 5 million yuan, which has been included in thescope of consolidated statements since the date of establishment.
3. On March 16, 2020, the Company invested in the establishment of a wholly-owned subsidiary - ShenzhenTopband Investment Co., Ltd. with registered capital of 30 million yuan, which has been included in the scope ofconsolidated statements since the date of establishment.
4. On April 8, 2020, Shenzhen Topband Investment Co., Ltd., a subsidiary of the Company, invested in theestablishment of a wholly-owned subsidiary - Shenzhen Spark IOT Technology Co., Ltd. with registered capital of10 million yuan, which has been included in the scope of consolidated statements since the date of establishment.
5. On September 23, 2020, Topband (Hong Kong) Co., Ltd., Ltd., a subsidiary of the Company, invested in theestablishment of a wholly-owned sub-subsidiary - TOPBAND JAPAN Co., Ltd. with registered capital of 30million yen, which has been included in the scope of consolidated statements since the date of establishment.
6. On October 29, 2020, the Company invested in the establishment of a wholly-owned subsidiary - ShenzhenSenxuan Technology Co., Ltd. with registered capital of 10 million yuan, which has been included in the scope ofconsolidated statements since the date of establishment.
7. On September 7, 2020, Shenzhen Topband Investment Co., Ltd., a subsidiary of the Company, invested in theestablishment of a wholly-owned subsidiary - Shenzhen Tulu Innovation Co., Ltd. with registered capital of 10million yuan, which has been included in the scope of consolidated statements since the date of establishment.
6. Others
□ applicable √ not applicable
IX. Interests in Other Entities
1. Interests in subsidiaries
(1) Composition of the enterprise group
| Name of subsidiary | Principal place of business | Registered place | Nature of business | Shareholding proportion | Acquisition method | |
| Direct | Indirect | |||||
| Shenzhen Topband Software Technology Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 100.00% | Establishment | |
| Shenzhen Topband Lithium Battery Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 100.00% | Establishment | |
| Shenzhen Topband Automation Technology Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 100.00% | Establishment | |
| Chongqing Topband Industrial Co., Ltd. | Chongqing | Chongqing | Production and sales | 100.00% | Establishment | |
| Topband (Hong Kong) Co., Ltd. | Hong Kong | Hong Kong | Investment | 100.00% | Establishment | |
| Huizhou Topband Electrical Technology Co., Ltd. | Huizhou | Huizhou | Production and sales | 100.00% | Establishment | |
| Huizhou Topband Lithium Battery Co., Ltd. | Huizhou | Huizhou | Production and sales | 100.00% | Establishment | |
| Ningbo Topband Intelligent Control Co., Ltd. | Ningbo | Ningbo | Production and sales | 100.00% | Establishment | |
| Shenzhen Allied Control System Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 100.00% | Merger of enterprises under different control | |
| Shenzhen Meanstone Intelligent Technology Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 65.00% | Merger of enterprises under different control | |
| Topband （Vietnam) Co.,ltd | Binh Duong, Vietnam | Binh Duong, Vietnam | Production and sales | 100.00% | Establishment | |
| Topband India Private Limited | India | India | Sales | 100.00% | Establishment | |
| TOPBAND SMART DONGNAI(VIETNAM) Co., Ltd | Dong Nai Province, Vietnam | Dong Nai Province, Vietnam | Production and sales | 100.00% | Establishment | |
| Shenzhen YAKO Automation Technology Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 73.00% | Merger of enterprises under different control | |
| Hangzhou Zhidong Motor Technology Co., Ltd. | Hangzhou | Hangzhou | Production and sales | 52.50% | Merger of enterprises under different control | |
| Shenzhen Yansheng Software Co., Ltd. | Shenzhen | Shenzhen | Software development | 73.00% | Merger of enterprises under different control | |
| Topband Germany GmbH | Unterfohring, Germany | Unterfohring City, Germany | Sales | 100.00% | Establishment | |
| Shenzhen Topband Supply Chain Services Co., Ltd. | Shenzhen | Shenzhen | Sales, import and export business and supply chain management services | 100.00% | Establishment | |
| Shenzhen Spark IOT Technology Co., Ltd. | Shenzhen | Shenzhen | Research and development as well as sales | 100.00% | Establishment | |
| Shenzhen Topband Investment Co., Ltd. | Shenzhen | Shenzhen | Investment | 100.00% | Establishment | |
| Shenzhen Tulu Innovation Co., Ltd. | Shenzhen | Shenzhen | Sales, import and export business and supply chain management services | 100.00% | Establishment | |
| Shenzhen Senxuan Technology Co., Ltd. | Shenzhen | Shenzhen | Sales, import and export business and supply chain management services | 100.00% | Establishment |
| TOPBAND JAPAN Co., Ltd. | Nagoya City, Japan | Nagoya City, Japan | Sales, import and export business and supply chain management services | 100.00% | Establishment |
(2) Important non-wholly-owned subsidiaries
Unit: Yuan
| Name of subsidiary | Shareholding ratio of minority shareholders | Profits and losses attributable to minority shareholders during the current period | Dividends declared and distributed to minority shareholders during the current period | Ending balance of minority equity |
| Shenzhen YAKO Automation Technology Co., Ltd. | 27.00% | 17,864,382.53 | 4,061,400.15 | 85,332,616.02 |
(3) Major financial information of important non-wholly-owned subsidiaries
Unit: Yuan
| Name of subsidiary | Ending balance | Beginning balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Shenzhen YAKO Automation Technology Co., Ltd. | 303,827,572.37 | 47,014,094.08 | 350,841,666.45 | 50,893,109.13 | 50,893,109.13 | 263,287,387.24 | 42,069,492.02 | 305,356,879.26 | 44,477,309.49 | 44,477,309.49 | ||
Unit: Yuan
| Name of subsidiary | Amount incurred in current period | Amount incurred in prior period | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flow from operating activities | Operating income | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Shenzhen YAKO Automation Technology Co., Ltd. | 257,988,191.43 | 48,094,321.21 | 48,094,321.21 | 62,625,702.54 | 176,261,168.37 | 22,491,473.90 | 22,491,473.90 | 14,214,367.53 |
(4) Significant restrictions on the use of enterprise group assets and the liquidation of enterprise groupdebts
□ applicable √ not applicable
(5) Financial support or other support provided to structured entities included in the scope of theconsolidated financial statements
□ applicable √ not applicable
2. Transaction in respect of which the share of the owner's equity of a subsidiary is changed and thesubsidiary is still under control
□ applicable √ not applicable
3. Interests in joint venture arrangements or associated enterprises
(1) Important joint ventures or associated enterprises
□ applicable √ not applicable
(2) Major financial information of important joint ventures
□ applicable √ not applicable
(3) Major financial information of important associated enterprises
□ applicable √ not applicable
(4) Summarized financial information of unimportant joint ventures and associated enterprises
Unit: Yuan
| Ending balance/Amount incurred in the current period | Beginning balance/Amount incurred in the previous period | |
| Joint Venture: | -- | -- |
| Sum of the following items calculated according to the shareholding ratio | -- | -- |
| Associated enterprises: | -- | -- |
| Total book value of investment | 6,502,528.13 | 6,863,474.93 |
| Sum of the following items calculated | -- | -- |
| according to the shareholding ratio | ||
| - Net profit | -360,946.80 | 2,176,410.20 |
| - Total comprehensive income | -360,946.80 | 2,176,410.20 |
(5) Statement that there is a material limitation on the ability of the joint venture or associated enterprise totransfer funds to the Company
□ applicable √ not applicable
(6) Excess losses incurred by the joint venture or an associated enterprise
□ applicable √ not applicable
(7) Unconfirmed commitments related to the investment of joint ventures
□ applicable √ not applicable
(8) Contingent liabilities related to the investment of joint ventures or associated enterprises
□ applicable √ not applicable
4. Important joint operation
□ applicable √ not applicable
5. Interests in structured entities not included in the scope of the consolidated financial statements
□ applicable √ not applicable
X. Risks Associated with Financial InstrumentsThe main financial instruments of the Company include equity investment, borrowings, accounts receivable,accounts payable, etc. For the detailed description of each financial instrument, refer to relevant items in this NoteVI. The risks associated with these financial instruments and the risk management policies adopted by theCompany to mitigate these risks are described below. The Management of the Company manages and monitorsthese risk exposures to ensure that these risks are controlled within the limited scope.The Company uses sensitivity analysis technology to analyze the possible impact of reasonable and possiblechanges in risk variables on current profits and losses or shareholders' equity. Since any risk variable rarely
changes in isolation, and the correlation between the variables will have a significant effect on the final amountaffected by a change in a risk variable, the following contents are based on the assumption that changes in eachvariable are made in isolation.
(1) Risk management objective and policy
The Company's risk management objective is to strike an appropriate balance between risks and returns, reducethe negative impact of risks on the Company's business performance to the lowest level, and maximize theinterests of shareholders and other equity investors. Based on this risk management objective, the basic riskmanagement strategy of the Company is to determine and analyze various risks faced by it, establish anappropriate risk bearing bottom line and carry out risk management, and conduct timely and reliable supervisionof various risks to control risks within the limited scope.
1. Market risk
(1) Foreign exchange risk
Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations. The Company's foreignexchange risks are mainly related to US dollars and Hong Kong dollars. In addition, the Company and itssubsidiary Topband (Hong Kong) Co., Ltd. purchase some materials and sell products in US dollars and HongKong dollars. Topband India Private Limited, a subsidiary of the Company, is denominated in Indian Rupee;Topband (Vietnam) Co., Ltd. and Topband Smart Dongnai (Vietnam) Co., Ltd., sub-subsidiaries of the Company,are denominated in Vietnamese Dong; Topband Germany GmbH, a sub-subsidiary of the Company, isdenominated in Euro; Topband Japan Co., Ltd., a sub-subsidiary of the Company, is denominated in Japanese Yen.Other major business activities of the Company are denominated and settled in RMB. As of December 31, 2020,the Company's assets and liabilities were balances in RMB except that the assets or liabilities described in thetable below were balances in USD, HKD, INR and VDN. The foreign exchange risks arising from the assets andliabilities of such foreign currency balances may have an impact on the Company's operating results.
| Items | Year-end balance | Amount at the beginning of the year |
| Cash and cash equivalents | 201,574,251.97 | 155,303,503.30 |
| USD | 130,907,063.75 | 91,393,630.94 |
| Euro | 4,622,874.52 | 6,010,673.38 |
| HKD | 588,457.78 | 1,114,130.41 |
| Indian rupee | 52,805,773.23 | 54,791,984.30 |
| Vietnamese dong | 10,964,698.16 | 1,993,084.27 |
| Japanese Yen | 1,685,384.53 |
| Accounts receivable | 720,990,899.48 | 624,696,030.62 |
| USD | 684,814,883.97 | 615,222,106.47 |
| Euro | 7,427,921.54 | 2,125,735.81 |
| HKD | 16,136,807.79 | 7,348,188.34 |
| Indian rupee | 8,872,208.00 |
| Vietnamese dong | 3,739,078.18 | |
| Accounts payable | 14,905,144.53 | 4,591,733.77 |
| USD | 12,599,740.06 | 3,232,666.86 |
| HKD | 30,137.75 | 655,471.15 |
| Indian rupee | 375,878.09 | 703,595.76 |
| Vietnamese dong | 1,899,388.63 |
The Company pays close attention to the impact of exchange rate fluctuations on the Company's foreign exchangerisks. The Company currently does not take any measures to avoid foreign exchange risks.Foreign exchange risk sensitivity analysis:
Assumption of foreign exchange risk sensitivity analysis: All net investment hedging and cash flow hedging ofoverseas operations are highly effective. On the basis of the above assumption, if other variables remainunchanged, the pretax impact of possible reasonable changes in the exchange rate on the current profits and lossesand shareholders' equity is as follows:
| Items | Exchange rate changes | Current year | Last year | ||
| Impact on profits | Impact on shareholders' equity | Impact on profits | Impact on shareholders' equity | ||
| Cash and cash equivalents | Appreciate 1% against RMB | 2,015,742.52 | 2,015,742.52 | 1,553,035.03 | 1,553,035.03 |
| Cash and cash equivalents | Depreciate 1% against RMB | 2,015,742.52 | 2,015,742.52 | -1,553,035.03 | -1,553,035.03 |
| Accounts receivable | Appreciate 1% against RMB | 7,209,908.99 | 7,209,908.99 | 6,246,960.31 | 6,246,960.31 |
| Accounts receivable | Depreciate 1% against RMB | -7,209,908.99 | -7,209,908.99 | -6,246,960.31 | -6,246,960.31 |
| Accounts payable | Appreciate 1% against RMB | -149,051.45 | -149,051.45 | -45,917.34 | -45,917.34 |
| Accounts payable | Depreciate 1% against RMB | 149,051.45 | 149,051.45 | 45,917.34 | 45,917.34 |
(2) Other price risks
Investments held by the Company and classified as trading financial assets are measured at fair value on thebalance sheet date. Therefore, the Company is exposed to the risk of changes in the securities market.
2. Credit risk
As of December 31, 2020, the maximum credit risk exposure that might cause financial loss of the Companymainly came from the loss of the Company's financial assets caused by the failure of the other party to the contractto perform obligations and the financial guarantee undertaken by the Company, specifically including the carryingamount of the financial assets recognized in the consolidated balance sheet.In order to reduce credit risks, the Company has set up special positions responsible for determining credit limits,conducting credit approval, and implementing other monitoring procedures to ensure that necessary measures aretaken to recover overdue claims. In addition, the Company reviews the recovery of each individual receivables oneach balance sheet date to ensure that adequate provision is made for uncollectible amounts. As a result, theManagement of the Company believes that the credit risk assumed by the Company has been significantlyreduced.The Company's working capital is deposited in a bank with a high credit rating, so the credit risk of workingcapital is low.
(1) Aging analysis of overdue unimpaired financial assets
| Items | 2020-12-31 | |||||
| Within 1 year | 1~2 years | 2~3 years | 3-5 years | More than 5 years | Total | |
| Accounts receivable | 66,900,889.84 | 20,639,335.42 | 5,908,366.30 | 632,811.52 | 639,506.80 | 94,720,909.88 |
| Items | 2019-12-31 | |||||
| Within 1 year | 1~2 years | 2~3 years | 3-5 years | More than 5 years | Total | |
| Accounts receivable | 68,863,323.92 | 17,304,916.32 | 799,310.43 | 506,333.80 | 229,693.00 | 87,703,577.47 |
(2) The Company has adopted necessary policies to ensure that all sales customers have good credit records. The
Company has no other major credit concentration risk.
3. Flow risk
In managing liquidity risks, the Company maintains and monitors cash and cash equivalents deemed sufficient bythe Management to meet the Company's operational needs and reduce the impact of cash flow fluctuations. TheManagement of the Company monitors the use of bank loans and ensures compliance with loan agreements.The Company relies on bank loans as its main source of funds. As of December 31, 2020, the Company'sunutilized bank loan limit was 3,885,475,000 yuan (December 31, 2019: 1,715,532,800 yuan).The maturity term analysis of the financial assets held by the Company and the maturity term analysis of thefinancial liabilities based on undiscounted remaining contractual obligations are as follows:
| Items | Within 1 year | 1~2 years | 2~3 years | 3-5 years | More than 5 years | Total |
| Non-derivative financial assets and liabilities: | ||||||
| Monetary capital | 1,219,095,476.50 | 1,219,095,476.50 | ||||
| Trading financial assets | 226,491,482.10 |
| Notes receivable | 39,477,930.63 | 39,477,930.63 | ||||
| Accounts receivable | 1,762,212,648.49 | 1,762,212,648.49 |
| Receivables financing | 246,656,027.27 | 246,656,027.27 | ||||
| Other receivables | 43,167,493.47 | 43,167,493.47 |
| Short-term loans | 402,151,500.00 | 402,151,500.00 | ||||
| Notes payable | 715,574,653.91 | 715,574,653.91 |
| Accounts payable | 1,549,906,339.74 | 1,549,906,339.74 |
| Other payables | 57,160,615.93 | 57,160,615.93 | ||||
| Long-term loans | 200,000,000.00 | 200,000,000.00 |
XI. Disclosure of Fair Value
1. Ending fair value of assets and liabilities measured at fair value
Unit: Yuan
| Items | Ending fair value | |||
| The first level of fair value measurement | The second level of fair value measurement | The third level of fair value measurement | Total | |
| I. Continuous fair value measurement | -- | -- | -- | -- |
| 1. Financial assets measured at fair value and whose changes are included in the current profits and losses | 31,033,991.99 | 0.00 | 195,457,490.11 | 226,491,482.10 |
| (1) Debt instrument investment | 112,970,000.00 | 112,970,000.00 | ||
| (2) Equity instrument investment | 31,033,991.99 | 82,487,490.11 | 113,521,482.10 | |
| 2. Financial assets measured at fair value and whose changes are included in other comprehensive income | 246,656,027.27 | 246,656,027.27 | ||
| Receivables financing | 246,656,027.27 | 246,656,027.27 | ||
| (1) Bank acceptance bills | 90,426,713.39 | 90,426,713.39 | ||
| (2) Accounts receivable | 156,229,313.88 | 156,229,313.88 | ||
| Total assets continuously measured at fair value | 31,033,991.99 | 0.00 | 442,113,517.38 | 473,147,509.37 |
| II. Non-continuous fair value measurement | -- | -- | -- | -- |
2. The basis for determining the market price of continuous and non-continuous first-level fair valuemeasurement itemsThe market value of financial assets measured at fair value with the changes included in the current profitsand losses are determined mainly on the basis of the closing price at the end of the accounting period of the stockexchange.
3. Continuous and non-continuous second-level fair value measurement items, valuation techniquesadopted and qualitative and quantitative information of important parameters
4. Continuous and non-continuous third-level fair value measurement items, valuation techniques adoptedand qualitative and quantitative information of important parameters
5. Continuous third-level fair value measurement items, adjustment information between beginning andending book value and sensitivity analysis of unobservable parameters
6. For continuous fair value measurement items, if the conversion occurs among different levels in thecurrent period, the reasons for the conversion and the policies for determining the conversion time point
7. Technical changes in valuation during the current period and the reasons for such changes
8. Fair value of financial assets and financial liabilities not measured at fair value
9. Others
XII. Related Parties and Related Transactions
1. Information on the parent company of the Enterprise
| Name of parent company | Registered place | Nature of business | Registered capital | The parent company's shareholding ratio in the Enterprise | Proportion of the parent company's voting rights in the Enterprise |
| Wu Yongqiang | Shenzhen | 18.68% | 18.68% |
2. Information on the Company's subsidiaries
The information on the subsidiaries of the Enterprise is detailed in "1. Interests in subsidiaries" in "Interests inOther Entities" in Note 9 in the notes.
3. Information on the joint ventures and associated enterprises of the EnterpriseThe important joint ventures or associated enterprises of the Enterprise are detailed "3. Interests in joint venturesor associated enterprises" in "Interests in Other Entities" in Note 9 in the notes.The situations of other joint ventures or associated enterprises with a balance resulting from related transactionswith the Company during the current period or the previous period are as follows:
□ applicable √ not applicable
4. Other related parties
| Names of other related parties | Relationship between other related parties and the Enterprise |
| Shenzhen Jizhiguang Electronics Co., Ltd. | A company substantially controlled by the relative of the Company's legal representative |
| Shenzhen Lianghui Technology Co., Ltd. | A company whose shares are held by the Company |
| Shenzhen Dynanonic Co., Ltd. | A company whose shares are held by the Company |
| Foshan Dynanonic Technology Co., Ltd. | A subsidiary of the company whose shares are held by the Company |
| Shenzhen ORVIBO Technology Co., Ltd. | A company whose shares are held by the Company |
| Shenzhen HANSC Intelligent Technology Co., Ltd. | A company whose shares are held by the Company |
| Guangdong Zhongchuang Zhijia Scientific Research Co., Ltd. | A company whose shares are held by the Company |
| Guangdong Huixin Semiconductor Co., Ltd. | A company whose shares are held by the Company |
5. Related transactions
(1) Related transactions involving the purchase and sale of goods and the provision and acceptance ofservicesList of goods purchased/services received
Unit: Yuan
| Related party | Related transaction content | Amount incurred in current period | Approved transaction limit | Is the transaction limit exceeded | Amount incurred in prior period |
| Shenzhen Jizhiguang Electronics Co., Ltd. | Raw material | 15,939,982.64 | No | 10,361,563.26 | |
| Foshan Dynanonic Technology Co., Ltd. | Raw material | 13,268,725.49 | No | 11,751,856.55 | |
| Shenzhen ORVIBO Technology Co., Ltd. | Technical service | No | 389,838.14 |
List of goods sold/services provided
Unit: Yuan
| Related party | Related transaction content | Amount incurred in current period | Amount incurred in prior period |
| Shenzhen ORVIBO Technology Co., Ltd. | LED products | 13,158,867.26 |
(2) Relevant entrusted management/contracting and entrusted management/outsourcing
□ applicable √ not applicable
(3) Related lease
□ applicable √ not applicable
(4) Related guarantee
□ applicable √ not applicable
(5) Related parties' loans at call
□ applicable √ not applicable
(6) Asset transfer and debt restructuring of related parties
□ applicable √ not applicable
(7) Remuneration of key management personnel
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Remuneration of key management personnel | 10,583,700.00 | 10,064,720.00 |
(8) Other related transactions
□ applicable √ not applicable
6. Payables due to related parties
(1) Item receivable
Unit: Yuan
| Project name | Related party | Ending balance | Beginning balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Accounts receivable | Shenzhen ORVIBO Technology Co., Ltd. | 11,456,976.61 | 355,166.27 | ||
(2) Item payable
Unit: Yuan
| Project name | Related party | Book balance at the end of the period | Book balance at the beginning of the period |
| Accounts payable | Shenzhen Jizhiguang Electronics Co., Ltd. | 3,600,589.88 | 2,140,158.58 |
| Accounts payable | Foshan Dynanonic Technology Co., Ltd. | 4,573,368.10 | 5,760,730.94 |
| Notes payable | Shenzhen Jizhiguang Electronics Co., Ltd. | 1,560,000.00 | 670,000.00 |
| Notes payable | Foshan Dynanonic Technology Co., Ltd. | 1,283,800.00 | 4,004,799.91 |
7. Commitment of related parties
□ applicable √ not applicable
XIII. Share-based payment
1. General situation of share-based payment
√applicable □ not applicable
Unit: Yuan
| Total amount of equity instruments granted by the Company during the current period | 0.00 |
| Total amount of equity instruments exercised by the Company during the current period | 12,014,700.00 |
| Total amount of the Company's equity instruments that expired during the current period | 2,773,000.00 |
| The range of the exercise price of the Company's stock options outstanding at the end of the period and the remaining term of the contract | The Company granted 42.8870 million stock options to 684 incentive recipients on November 27, 2018. The performance evaluation and exercise of the Company and the individuals of the incentive objects are conducted by the year, and the evaluation is conducted once each fiscal year. The achievement of the performance evaluation target is taken as the exercise condition of the incentive objects. This plan is valid for a maximum period of 48 months from the date of authorization of stock options to the date on which all options are exercised or cancelled. After the expiration of 12 months from the authorization date of the incentive plan of the current period, the incentive objects shall exercise the stock options by stages according to the exercise proportion of 30%, 30% and 40% within the vesting date. The grant price of the stock options unlocked at the end of the period is RMB 3.70. |
Other description
1. Stock options in 2018
On November 27, 2018, the ninth meeting of the sixth Board of Directors of the Company deliberated andpassed the "Proposal on Granting Stock Options to Incentive Objects", granting 42,887,000 stock options to 684
eligible incentive objects at a grant price of RMB 3.80 per share.On July 26, 2019, the 15th meeting of the sixth Board of Directors of the Company deliberated and passedthe "Proposal on Adjusting the Stock Option Exercise Price of the 2018 Stock Option Incentive Plan", whichadjusted the exercise price of the 2018 Stock Option Incentive Plan from RMB 3.80 to RMB3.70 due to theCompany's 2018 annual equity distribution.On March 30, 2020, the Company held the 22nd meeting of the sixth Board of Directors, deliberating andpassing the "Proposal on the First Exercise Period of 2018 Stock Option Incentive Plan Meeting the ExerciseConditions and Exercisable Rights" and the "Proposal on Adjustment of the Incentive Objects and the Number ofStock Options of 2018 Stock Option Incentive Plan": In the first exercise period of the 2018 stock optionincentive plan of the Company, a total of 606 incentive objects with 12,014,700 stock options in total wereeligible for exercise. In May 2020, a total of 606 incentive objects with 12,014,700 stock options in total in thefirst exercise period completed exercise.On January 16, 2020, given that 76 original incentive objects of the Company, including Huang Xinyu andYang Shengcang, left office due to personal reasons, according to relevant provisions of the "2018 Stock OptionIncentive Plan (Revised Draft)", the above personnel did not meet the incentive conditions, and a total of2,773,000 stock options that were granted to the 76 original incentive objects but were not exercised may not beexercised. The Company completed the cancellation of such stock options on January 29, 2021.
2. Equity-settled share-based payments
√applicable □ not applicable
Unit: Yuan
| Method for determining the fair value of the equity instrument on the grant date | Black-Scholes option pricing model |
| Basis for determining the number of exercisable equity instruments | It is expected that the exercise condition can be met and the granted objects will exercise |
| Accumulated amount of equity-settled share-based payments included in capital reserves | 79,370,639.71 |
| Total amount of expenses recognized by equity-settled share-based payments in the current period | 9,208,765.19 |
3. Cash-settled share-based payments
□ applicable √ not applicable
4. Modification and termination of share-based payments
□ applicable √ not applicable
XIV. Commitments and Contingencies
1. Important commitments
Important commitments that existed on the balance sheet date
2. Contingencies
□ applicable √ not applicable
XV. Events after the Balance Sheet Date
1. Important non-adjustment matters
□ applicable √ not applicable
2. Profit distribution
Unit: Yuan
| Profits or dividends to be distributed | 56,018,894.45 |
| Profits or dividends declared to be paid after examination and approval | 56,018,894.45 |
3. Sales return
□ applicable √ not applicable
4. Description of other events after the balance sheet date
(1) New sub-subsidiary
On January 16, 2021, the fifth meeting of the seventh Board of Directors of the Company deliberated and passedthe "Proposal on the Subsidiary's Acquisition of 83.5% of the equity in Taixing Ninghui Lithium Battery Co., Ltd.through Equity Transfer and Capital Increase", agreeing that the wholly-owned subsidiary of the Company,Topband Lithium Battery, will use its own or self-raised funds of 15.40 million yuan to acquire 70% of the equityin Taixing Ninghui Lithium Battery Co., Ltd. (hereinafter referred to as "Ninghui Lithium Battery" or the "Target
Company") and increase the capital of the Target Company by 18 million yuan, and the registered capital of theTarget Company will increase from 22 million yuan to 40 million yuan. After the completion of this transaction,Topband Lithium Battery will hold 83.5% of the equity in Ninghui Lithium Battery. On February 5, 2021, theCompany received a notice from Ninghui Lithium Battery, stating that Ninghui Lithium Battery had gone throughthe relevant industrial and commercial change registration procedures.
(2) Completion of the cancellation of part of stock options
On January 14, 2021, the Company held the fifth meeting of the seventh Board of Directors and the fifth meetingof the seventh Board of Supervisors, respectively deliberating and passing the "Proposal on Cancelling the StockOptions Granted to but not Exercised by Outgoing Employees in the 2018 Stock Option Incentive Plan". In viewof the fact that 76 original incentive objects including Huang Xinyu and Yang Shengcang left the Company due topersonal reasons and no longer met the conditions for being incentive objects, we agree to cancel the total of2,773,000 unexercised stock options held by the above-mentioned 76 incentive objects. On January 29, 2021,Shenzhen Branch of China Securities Depository and Clearing Company Limited confirmed that the cancellationof the above 2,773,000 stock options had been completed.
(3) Adoption of the re-recognition as a high-tech enterprise
On February 5, 2021, the Company has received the Certificate for High-tech Enterprise jointly issued byShenzhen Science and Technology Innovation Commission, Shenzhen Finance Bureau, and Shenzhen TaxService, State Taxation Administration, and passed the re-certification of high-tech enterprises. This certificationis a renewal of the original certificate that has been expired. According to relevant regulations, the Company willbe entitled to the preferential policies stated by China for the high-tech enterprise income tax for three consecutiveyears after passing the re-certification of high-tech enterprises. That is, the company shall pay its corporateincome tax at 15% of corporate income tax rate from 2020 to 2022.XVI. Other Important Matters
1. Correction of early accounting errors
□ applicable √ not applicable
2. Debt restructuring
□ applicable √ not applicable
3. Asset replacement
□ applicable √ not applicable
4. Annuity plan
□ applicable √ not applicable
5. Termination of operation
□ applicable √ not applicable
6. Division information
□ applicable √ not applicable
7. Other important transactions and matters that have an impact on investors' decisions
□ applicable √ not applicable
XVII. Notes on Main Items in the Financial Statements of the Parent Company
1. Accounts receivable
(1) Disclosure of accounts receivable by category
Unit: Yuan
| Category | Ending balance | Beginning balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion | Amount | Proportion of provision | Amount | Proportion | Amount | Proportion of provision | |||
| Accounts receivable with provision for bad debts by single item | 70,467,909.48 | 7.62% | 597,758.70 | 0.85% | 69,870,150.78 | 28,640,372.45 | 3.03% | 0.00 | 28,640,372.45 | |
| Including: | ||||||||||
| Accounts receivable with a single | 69,868,984.66 | 7.56% | 0.00% | 69,868,984.66 | 28,350,830.32 | 3.00% | 0.00 | 0.00% | 28,350,830.32 | |
| significant amount and single bad debt provision | ||||||||||
| Accounts receivable with insignificant single amount but single provision made for bad debts | 598,924.83 | 0.06% | 597,758.70 | 99.81% | 1,166.12 | 278,592.63 | 0.03% | 0.00% | 278,592.63 | |
| Accounts receivable with provision for bad debts by portfolio | 854,095,677.91 | 92.38% | 27,700,353.00 | 3.24% | 826,395,324.92 | 917,040,068.12 | 96.97% | 46,492,849.58 | 5.07% | 870,547,218.54 |
| Including: | ||||||||||
| Total | 924,563,587.40 | 100.00% | 28,298,111.70 | 3.06% | 896,265,475.70 | 945,669,491.07 | 100.00% | 46,492,849.58 | 4.92% | 899,176,641.49 |
Single provision for bad debts: accounts receivable with a single significant amount and separate bad debtprovision at the end of the year
Unit: Yuan
| Name | Ending balance | |||
| Book balance | Provision for bad debts | Proportion of provision | Reasons for provision | |
| Shenzhen Topband Lithium Battery Co., Ltd. | 16,139,926.54 | |||
| Topband (Hong Kong) Co., Ltd. | 8,647,217.34 | |||
| Ningbo Topband Intelligent Control Co., Ltd. | 37,237,598.53 | |||
| Topband (Vietnam) Co., Ltd. | 7,844,242.25 | |||
| Total | 69,868,984.66 | -- | -- | |
Single provision for bad debts:
□ applicable √ not applicable
Bad debt provision made by the combination: accounts receivable with bad debt provision made by the aginganalysis method
Unit: Yuan
| Name | Ending balance | ||
| Book balance | Provision for bad debts | Proportion of provision | |
| Within 1 year | 840,631,173.01 | 26,059,566.36 | 3.10% |
| 1 to 2 years | 10,226,141.74 | 924,443.21 | 9.04% |
| 2 to 3 years | 3,237,019.31 | 715,704.97 | 22.11% |
| 3-4 years | 1,343.85 | 638.46 | 47.51% |
| Total | 854,095,677.91 | 27,700,353.00 | -- |
Disclosure by aging
Unit: Yuan
| Aging | Book balance |
| Within 1 year (including 1 year) | 910,501,323.80 |
| 1 to 2 years | 10,226,141.74 |
| 2 to 3 years | 3,834,778.01 |
| More than 3 years | 1,343.85 |
| 3 to 4 years | 1,343.85 |
| 4 to 5 years | 0.00 |
| Total | 924,563,587.40 |
(2) Provision for bad debts withdrawn, recovered or reversed in current periodProvision for bad debts in current period:
Unit: Yuan
| Category | Beginning balance | Amount changed in current period | Ending balance | |||
| Provision | Recover or reversal | Write-off | Others | |||
| Provision for bad debts | 46,492,849.58 | -18,101,241.51 | 93,496.37 | 28,298,111.70 | ||
| Total | 46,492,849.58 | -18,101,241.51 | 93,496.37 | 28,298,111.70 | ||
Of which the amount of provision for bad debts recovered or reversed in current period is significant
□ applicable √ not applicable
(3) Accounts receivable actually written off in current period
Unit: Yuan
| Items | Write-off amount |
| Shanghai Aihao Intelligent Technology Co., Ltd. | 93,496.37 |
Of which the significant write-offs of accounts receivable
□ applicable √ not applicable
(4) Accounts receivable of top five ending balances grouped by debtors
Unit: Yuan
| Name of Entity | Ending balance of accounts receivable | Proportion to total ending balances of accounts receivable | Ending balance of provision for bad debts |
| No.1 | 235,251,504.36 | 25.44% | 7,292,796.66 |
| No.2 | 66,857,476.23 | 7.23% | 2,072,581.76 |
| No.3 | 49,982,365.85 | 5.41% | 1,877,152.14 |
| No.4 | 41,606,424.45 | 4.50% | 1,241,282.17 |
| No.5 | 37,237,598.53 | 4.03% | |
| Total | 430,935,369.42 | 46.61% |
(5) Accounts receivable derecognized due to transfer of financial assets
□ applicable √ not applicable
(6) Amount of assets and liabilities formed by transferring accounts receivable and continuing to beinvolved
□ applicable √ not applicable
2. Other receivables
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Other receivables | 41,159,647.12 | 117,939,852.28 |
| Total | 41,159,647.12 | 117,939,852.28 |
(1) Interest receivable
□ applicable √ not applicable
(2) Dividends receivable
□ applicable √ not applicable
(3) Other receivables
1) Classification of other receivables by nature of amount
Unit: Yuan
| Nature of payment | Book balance at the end of the period | Book balance at the beginning of the period |
| Internal related transactions | 13,021,127.03 | 109,403,887.22 |
| VAT rebate | 20,264,087.02 | |
| Employee loans | 4,589,352.52 | 5,467,617.13 |
| Margin, deposit | 4,493,457.54 | 3,971,918.80 |
| Others | 62,346.03 | |
| Total | 42,430,370.14 | 118,843,423.15 |
2) Provision for bad debts
Unit: Yuan
| Provision for bad debts | Phase 1 | Phase 2 | Phase 3 | Total |
| Expected credit loss in the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance as of 1 January 2020 | 903,570.87 | 903,570.87 | ||
| Balance as of 1 January 2020 in the current period | —— | —— | —— | —— |
| Accrued in current period | 367,152.15 | 367,152.15 | ||
| Balance as of December 31, 2020 | 1,270,723.02 | 1,270,723.02 |
Changes in book balance with significant changes in loss reserves in current period
□ applicable √ not applicable
Disclosure by aging
Unit: Yuan
| Aging | Book balance |
| Within 1 year (including 1 year) | 37,334,059.83 |
| 1 to 2 years | 3,654,188.57 |
| 2 to 3 years | 202,025.81 |
| More than 3 years | 1,240,095.93 |
| 3 to 4 years | 1,193,683.61 |
| 4 to 5 years | 5,000.00 |
| Over 5 years | 41,412.32 |
| Total | 42,430,370.14 |
3) Provision for bad debts withdrawn, recovered or reversed in current periodProvision for bad debts in current period:
Unit: Yuan
| Category | Beginning balance | Amount changed in current period | Ending balance | |||
| Provision | Recover or reversal | Write-off | Others | |||
| Provision for bad debts | 903,570.87 | 367,152.15 | 1,270,723.02 | |||
| Total | 903,570.87 | 367,152.15 | 1,270,723.02 | |||
4) Other receivables actually written off in current period
□ applicable √ not applicable
5) Other receivables of top five ending balances grouped by debtors
Unit: Yuan
| Name of Entity | Nature of payment | Ending balance | Aging | Proportion to total ending balances of other receivables | Ending balance of provision for bad debts |
| No.1 | Export rebate amount | 20,264,087.02 | Within 1 year | 47.76% | |
| No.2 | Intercourse funds | 10,359,774.50 | Within 1 year | 24.42% | |
| No.3 | Rental deposit | 1,520,178.00 | 1~2 years | 3.58% | 152,017.80 |
| No.4 | Intercourse funds | 1,180,065.48 | Within 1 year | 2.78% | |
| No.5 | Intercourse funds | 1,032,592.04 | Within 1 year | 2.43% | |
| Total | -- | 34,356,697.04 | -- | 80.97% | 152,017.80 |
6) Receivables involving government subsidies
□ applicable √ not applicable
7) Other receivables derecognized due to transfer of financial assets
□ applicable √ not applicable
8) Amount of assets and liabilities formed by transferring other receivables and continuing to be involved
□ applicable √ not applicable
3. Long-term equity investment
Unit: Yuan
| Items | Ending balance | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Investment in subsidiaries | 2,194,431,703.81 | 2,194,431,703.81 | 1,798,820,132.05 | 1,798,820,132.05 | ||
| Investment in associated enterprises and joint ventures | 18,936,183.18 | 12,433,655.05 | 6,502,528.13 | 19,297,129.98 | 12,433,655.05 | 6,863,474.93 |
| Total | 2,213,367,886.99 | 12,433,655.05 | 2,200,934,231.94 | 1,818,117,262.03 | 12,433,655.05 | 1,805,683,606.98 |
(1) Investment in subsidiaries
Unit: Yuan
| Investee | Beginning balance (book value) | Changes in increase/decrease in current period | Ending balance (book value) | Ending balance of provision for impairment | |||
| Additional investment | Decrease in investment | Provision for impairment | Others | ||||
| Huizhou Topband Electrical Technology Co., Ltd. | 632,210,939.12 | 1,056,845.85 | 633,267,784.97 | ||||
| Shenzhen YAKO Automation Technology Co., Ltd. | 247,414,659.96 | 102,600,000.00 | 350,014,659.96 | ||||
| Chongqing Topband Industrial Co., Ltd. | 210,070,880.54 | 64,192.20 | 210,135,072.74 | ||||
| Shenzhen Allied Control System Co., Ltd. | 120,584,300.25 | 400,683.27 | 120,984,983.52 | ||||
| Ningbo Topband Intelligent Control Co., Ltd. | 250,021,353.55 | 100,000,000.00 | 23,342.63 | 350,044,696.18 | |||
| TOPBAND INDIA PRIVATE LIMITED | 195,026,748.97 | 195,026,748.97 | |||||
| Shenzhen Topband Software Technology Co., Ltd. | 16,068,666.68 | 975,666.35 | 17,044,333.03 | ||||
| Shenzhen Topband Automation Technology Co., Ltd. | 9,400,000.00 | 15,000,000.00 | 16,539.46 | 24,416,539.46 | |||
| Topband (Hong Kong) Co., Ltd. | 110,850,400.00 | 138,226,500.00 | 249,076,900.00 | ||||
| Shenzhen Topband Lithium Battery Co., Ltd. | 4,172,182.98 | 245,230.67 | 4,417,413.65 | ||||
| Shenzhen Meanstone Intelligent Technology Co., Ltd. | 3,000,000.00 | 3,000,000.00 | |||||
| Shenzhen Topband Supply Chain Services Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Shenzhen Topband Investment Co., Ltd. | 30,000,000.00 | 2,571.33 | 30,002,571.33 | ||||
| Shenzhen Senxuan Technology Co., Ltd. | 2,000,000.00 | 2,000,000.00 | |||||
| Total | 1,798,820,132.05 | 392,826,500.00 | 2,785,071.76 | 2,194,431,703.81 |
(2) Investment in associated enterprises and joint ventures
Unit: Yuan
| Investment unit | Beginning balance (book value) | Changes in increase/decrease in current period | Ending balance (book value) | Ending balance of provision for impairment | |||||||
| Additional investment | Decrease in investment | Profit and loss on investment recognized under equity | Adjustment to other comprehensive | Other changes in equity | Declaration of distribution for cash dividends | Provision for impairment | Others | ||||
| method | income | or profits | |||||||||
| I. Joint venture | |||||||||||
| II. Associates | |||||||||||
| Shenzhen Yuchengxin Power Technology Co., Ltd. | 12,433,655.05 | ||||||||||
| Shenzhen Daka Optoelectronics Co., Ltd. | 6,863,474.93 | -360,946.80 | 6,502,528.13 | ||||||||
| Subtotal | 6,863,474.93 | -360,946.80 | 6,502,528.13 | 12,433,655.05 | |||||||
| Total | 6,863,474.93 | -360,946.80 | 6,502,528.13 | 12,433,655.05 | |||||||
4. Operating income and operating cost
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period | ||
| Income | Cost | Income | Cost | |
| Main business | 3,260,338,225.11 | 2,683,111,915.01 | 3,088,293,913.45 | 2,582,865,482.65 |
| Other business | 122,029,795.27 | 111,936,235.09 | 53,830,893.88 | 41,182,847.71 |
| Total | 3,382,368,020.38 | 2,795,048,150.10 | 3,142,124,807.33 | 2,624,048,330.36 |
5. Return on investment
Unit: Yuan
| Items | Amount incurred in current period | Amount incurred in prior period |
| Long-term equity investment revenue accounted by equity method | -360,946.80 | 2,176,410.20 |
| Investment revenue of trading financial assets during holding period | 1,301,220.00 | |
| Investment revenue from disposal of trading financial assets | 230,366,485.41 | |
| Investment revenue of financial products | 2,511,036.11 | 2,011,890.29 |
| Forward foreign exchange contract settlement profit and loss | 22,970,000.00 | -10,416,000.00 |
| Dividends during the holding period of subsidiaries | 4,963,933.51 | 22,596,315.98 |
| Cancellation of subsidiaries | -2,650.00 | |
| Total | 260,450,508.23 | 17,667,186.47 |
XVIII. Supplementary Information
1. Schedule of current non-recurring profits and losses
√applicable □ not applicable
Unit: Yuan
| Items | Amount | Description |
| Profits and losses on disposal of non-current assets | -2,162,674.03 | |
| Government subsidies recognized in the current profits and losses (except those closely related to the business of the enterprise and enjoyed in a fixed or quantitative amount according to the national uniform standard) | 27,326,933.85 | |
| Profit and loss from changes in fair value of trading financial assets, derivative financial assets, trading financial liabilities and derivative financial liabilities, and investment income from disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities and other creditor's rights investments, except for effective hedging business related to the normal business of the Company | 147,775,030.77 | |
| Other non-operating income and expenses other than those mentioned above | 43,836.85 | |
| Other profit and loss items that meet the definition of non-recurring profit and loss | 5,602,702.63 | Financing income |
| Less: amount affected by income tax | 27,106,631.22 | |
| Impact amount of minority shareholders' equity | 706,319.26 | |
| Total | 150,772,879.59 | -- |
The reasons shall be explained for the non-recurring profit and loss items defined by the Company in accordancewith the definition of "Explanatory Announcement No. 1 on Information Disclosure of Companies PubliclyOffering Securities - Non-recurring Profits and Losses", and for the non-recurring profit and loss items listed inthe "Explanatory Announcement No. 1 on Information Disclosure of Companies Publicly Offering Securities -Non-recurring Profits and Losses" and defined as recurring profit and loss items.
□ applicable √ not applicable
2. Return on equity and earnings per share
| Profit in 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 income attributable to the common shareholders of the Company | 19.04% | 0.51 | 0.51 |
| Net profit attributable to the common shareholders of the | 13.66% | 0.37 | 0.37 |
3. Differences in accounting data under domestic and foreign accounting standards
(1) Difference between the net profit and net assets in the financial reports disclosed in accordance withboth international accounting standards and Chinese accounting standards at the same time
□ applicable √ not applicable
(2) Difference between the net profit and net assets in the financial reports disclosed in accordance withboth overseas accounting standards and Chinese accounting standards at the same time
□ applicable √ not applicable
(3) Reasons for differences in accounting data under domestic and foreign accounting standards. If the dataaudited by an overseas audit institution is adjusted for differences, the name of the overseas auditinstitution shall be indicated
□ applicable √ not applicable
Section XIII Catalogue of Documents for Reference
I. Accounting statements containing the signatures and seals of the legal representative, thefinancial head and the accounting institution head.II. The original audit report bearing the seal of the accounting firm and the signatures and seals ofthe certified public accountants.III. The originals of all the company documents publicly disclosed in newspapers designated by theCSRC during the reporting period and the original manuscripts of announcements.IV. The original of the 2020 annual report bearing the signature of the chairman.V. All the above documents are ready and complete, and are available for reference at the office ofthe Board of Directors of the Company.