ANNUAL REPORT 2019
April 2020
BOE Technology Group Co., Ltd. Annual Report 2019
Part I Important Notes, Table of Contents and DefinitionsThe Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,supervisors and senior management of BOE Technology Group Co., Ltd. (hereinafter referredto as the “Company”) hereby guarantee the factuality, accuracy and completeness of thecontents of this Report and its summary, and shall be jointly and severally liable for anymisrepresentations, misleading statements or material omissions therein.Mr. Chen Yanshun, the Company’s legal representative, Mr. Liu Xiaodong, President, Ms.Sun Yun, Chief Financial Officer, and Ms. Yang Xiaoping, head of the financial department(equivalent to financial manager) hereby guarantee that the Financial Statements carried inthis Report are factual, accurate and complete.All the directors of the Company except for the following attended in person the Boardmeeting for the review of this Report and its summary.
| Name | Office title | Reason for not attending the meeting in person | Proxy entrusted to attend the meeting |
| Wang Chenyang | Director | Due to work | Li Yantao |
Any plans for the future and other forward-looking statements mentioned in this Report shallNOT be considered as absolute promises of the Company to investors. Investors, amongothers, shall be sufficiently aware of the risk and shall differentiate between plans andforecasts and promises.The Board has approved a final dividend plan for the Reporting Period. Based on theCompany’s total shares of 34,798,398,763, a cash dividend of RMB0.20 (tax inclusive) per 10shares is to be distributed to all the shareholders, with no bonus issue from either profit orcapital reserves.This Report has been prepared as per the Chinese Accounting Standards for BusinessEnterprises and other relevant regulations. KPMG Huazhen LLP has issued an independentauditor’s report with unmodified unqualified opinion for the Company.This Report and its summary have been prepared in both Chinese and English. Should therebe any discrepancies or misunderstandings between the two versions, the Chinese versionsshall prevail.
BOE Technology Group Co., Ltd. Annual Report 2019
Table of Contents
Part I Important Notes, Table of Contents and Definitions ...... 2
Part II Corporate Information and Key Financial Information ...... 5
Part III Business Summary ...... 12
Part IV Operating Performance Discussion and Analysis ...... 15
Part V Significant Events ...... 39
Part VI Share Changes and Shareholder Information ...... 64
Part VII Preferred Shares ...... 77
Part VIII Convertible Corporate Bonds ...... 78
Part IX Directors, Supervisors, Senior Management and Staff ...... 79
Part X Corporate Governance ...... 97
Part XI Corporate Bonds ...... 107
Part XII Financial Statements ...... 113
Part XIII Documents Available for Reference ...... 114
BOE Technology Group Co., Ltd. Annual Report 2019
Definitions
| Term | Definition |
| “BOE”, the “Company”, the “Group” or “we” | BOE Technology Group Co., Ltd. and its consolidated subsidiaries, except where the context otherwise requires |
| The cninfo website | http://www.cninfo.com.cn/ |
| CSRC | The China Securities Regulatory Commission |
| The Stock Listing Rules | The Stock Listing Rules of the Shenzhen Stock Exchange (Revised in November 2018) |
| SZSE, the Stock Exchange | The Shenzhen Stock Exchange |
| The Articles of Association | The Articles of Association of BOE Technology Group Co., Ltd. |
| The Company Law | The Company Law of the People’s Republic of China |
| The Securities Law | The Securities Law of the People’s Republic of China |
| OASIS Hospital | OASIS International Hospital |
| KPMG | KPMG Huazhen LLP |
| Microdisplay | Microdisplay technology |
| AMOLED | Active-matrix Organic Light Emitting Diode |
| OLED | Organic Light Emitting Diode |
| VR/AR | Virtual Reality /Augmented Reality |
| IoT | Internet of Things |
| LCD | Liquid Crystal Display |
| ITU | International Telecommunication Union |
| ICT | Information and Communication Technology |
| OEE | Overall Equipment Effectiveness |
| MRP | Material Requirement Planning |
BOE Technology Group Co., Ltd. Annual Report 2019
Part II Corporate Information and Key Financial InformationI Corporate Information
| Stock name | BOE-A, BOE-B | Stock code | 000725, 200725 |
| Changed stock name (if any) | N/A | ||
| Stock exchange for stock listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 京东方科技集团股份有限公司 | ||
| Abbr. | 京东方 | ||
| Company name in English (if any) | BOE TECHNOLOGY GROUP CO., LTD. | ||
| Abbr. (if any) | BOE | ||
| Legal representative | Chen Yanshun | ||
| Registered address | 10 Jiuxianqiao Road, Chaoyang District, Beijing, P.R.China | ||
| Zip code | 100015 | ||
| Office address | 12 Xihuan Middle Road, Beijing Economic-Technological Development Area, P.R.China | ||
| Zip code | 100176 | ||
| Company website | www.boe.com | ||
| Email address | web.master@boe.com.cn | ||
II Contact Information
| Item | Board Secretary | Securities Representative |
| Name | Liu Hongfeng | Huang Rong |
| Office Address | 12 Xihuan Middle Road, Beijing Economic-Technological Development Area, P.R.China | 12 Xihuan Middle Road, Beijing Economic-Technological Development Area, P.R.China |
| Tel. | 010－64318888 ext. | 010－64318888 ext. |
| Fax | 010－64366264 | 010－64366264 |
| E-mail address | liuhongfeng@boe.com.cn | huangrong@boe.com.cn |
III Media for Information Disclosure and Place where this Report Is Lodged
| Newspapers designated by the Company for information disclosure | China Securities Journal, Shanghai Securities News, Securities Times, Ta Kung Pao (HK) |
BOE Technology Group Co., Ltd. Annual Report 2019
| Website designated by CSRC for publication of this Report | http://www.cninfo.com.cn/ |
| Place where this Report is lodged | Board Secretary’s Office |
IV Changes to Company Registered Information
| Unified social credit code | No change |
| Change to principal activity of the Company since going public (if any) | No change |
| Every change of controlling shareholder since incorporation (if any) | No change |
V Other Information
The independent audit firm hired by the Company:
| Name | KPMG Huazhen LLP |
| Office address | 8/F, KPMG Tower, Oriental Plaza, 1 East Chang An Avenue, Beijing, P.R.China |
| Accountants writing signatures | Zhang Huan and Chai Jing |
The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable √ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable √ Not applicable
VI Key Financial InformationIndicate by tick mark whether there is any retrospectively restated datum in the table below.
√ Yes □ No
Reason for retrospective restatement: accounting policy changes
| Item | 2019 | 2018 | 2019-over-2018 change (%) | 2017 | |
| After | Before | After | |||
| Operating revenue (RMB) | 116,059,590,164.00 | 97,108,864,935.00 | 19.51% | 93,800,479,215.00 | 93,800,479,215.00 |
| Net profit attributable to the listed company’s shareholders (RMB) | 1,918,643,871.00 | 3,435,127,975.00 | -44.15% | 7,567,682,493.00 | 7,567,682,493.00 |
BOE Technology Group Co., Ltd. Annual Report 2019
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | -1,166,793,317.00 | 1,517,702,353.00 | -176.88% | 6,679,211,138.00 | 6,679,211,138.00 |
| Net cash generated from/used in operating activities (RMB) | 26,083,079,194.00 | 25,684,047,196.00 | 1.55% | 26,266,986,015.00 | 26,726,929,655.00 |
| Basic earnings per share (RMB/share) | 0.05 | 0.10 | -50.00% | 0.22 | 0.22 |
| Diluted earnings per share (RMB/share) | 0.05 | 0.10 | -50.00% | 0.22 | 0.22 |
| Weighted average return on equity (%) | 2.16% | 4.00% | -1.84% | 9.25% | 9.25% |
| Item | 31 December 2019 | 31 December 2018 | Change of 31 December 2019 over 31 December 2018 (%) | 31 December 2017 | |
| After | Before | After | |||
| Total assets (RMB) | 340,412,203,308.00 | 304,028,491,385.00 | 11.97% | 256,108,741,849.00 | 256,108,741,849.00 |
| Equity attributable to the listed company’s shareholders (RMB) | 95,058,129,055.00 | 85,856,748,703.00 | 10.72% | 84,809,816,377.00 | 84,809,816,377.00 |
Reasons for the changes to the accounting policies and correction of accounting errors:
In 2018, according to the interpretations of the regulatory document CK [2018] No.15, government subsidies received in 2017,whether related to assets or income, should be presented as “cash generated from operating activities” in the cash flow statements.
VII Accounting Data Differences under China’s Accounting Standards for BusinessEnterprises (CAS) and International Financial Reporting Standards (IFRS) and ForeignAccounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
BOE Technology Group Co., Ltd. Annual Report 2019
VIII Key Financial Information by Quarter
Unit: RMB
| Item | Q1 | Q2 | Q3 | Q4 |
| Operating revenue | 26,454,258,554.00 | 28,584,950,133.00 | 30,682,823,546.00 | 30,337,557,931.00 |
| Net profit attributable to the listed company’s shareholders | 1,051,781,919.00 | 616,666,530.00 | 183,791,110.00 | 66,404,312.00 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses | 352,304,432.00 | 299,186,002.00 | -840,490,839.00 | -977,792,912.00 |
| Net cash generated from/used in operating activities | 6,164,241,385.00 | 5,430,742,964.00 | 4,932,005,060.00 | 9,556,089,785.00 |
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from whathave been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
IX Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
| Item | 2019 | 2018 | 2017 | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | 20,340,136.00 | -25,632,761.00 | -87,930,698.00 | N/A |
| Tax rebates, reductions and exemptions given with ultra vires approval or in lack of official approval documents | 0.00 | 0.00 | 0.00 | N/A |
| Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) | 2,640,634,861.00 | 2,073,709,661.00 | 962,283,001.00 | N/A |
| Capital occupation charges on non-financial enterprises that are charged to current profit or loss | 0.00 | 0.00 | 0.00 | N/A |
BOE Technology Group Co., Ltd. Annual Report 2019
| Gain equal to the amount by which investment costs for the Company to obtain subsidiaries, associates and joint ventures are lower than the Company’s enjoyable fair value of identifiable net assets of investees when making investments | 0.00 | 0.00 | 0.00 | N/A |
| Gain or loss on non-monetary asset swaps | 0.00 | 0.00 | 0.00 | N/A |
| Gain or loss on assets entrusted to other entities for investment or management | 0.00 | 0.00 | 0.00 | N/A |
| Allowance for asset impairments due to acts of God such as natural disasters | 0.00 | 0.00 | 0.00 | N/A |
| Gain or loss on debt restructuring | 0.00 | 0.00 | 0.00 | N/A |
| Restructuring costs in staff arrangement, integration, etc. | 0.00 | 0.00 | 0.00 | N/A |
| Gain or loss on the over-fair value amount as a result of transactions with distinctly unfair prices | 0.00 | 0.00 | 0.00 | N/A |
| Current profit or loss on subsidiaries obtained in business combinations involving enterprises under common control from the period-beginning to combination dates, net | 0.00 | 0.00 | 0.00 | N/A |
| Gain or loss on contingencies that do not arise in the Company’s ordinary course of business | 0.00 | 0.00 | 0.00 | N/A |
| Gain or loss on fair-value changes in held-for-trading and derivative financial assets and liabilities & income from disposal of held-for-trading and derivative financial assets and liabilities and other investments in debt obligations (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | 112,668,244.00 | 315,279,377.00 | 134,810,181.00 | N/A |
| Reversed portions of impairment allowances for accounts receivable and contract assets which are tested individually for impairment | 1,498,805.00 | 1,779,710.00 | 2,616,024.00 | N/A |
| Gain or loss on loan entrustments | 0.00 | 0.00 | 0.00 | N/A |
| Gain or loss on fair-value changes in investment property of which subsequent measurement is carried out using the fair value method | 0.00 | 0.00 | 0.00 | N/A |
BOE Technology Group Co., Ltd. Annual Report 2019
| Effects of all adjustments required by taxation, accounting and other applicable laws and regulations on current profit or loss | 0.00 | 0.00 | 0.00 | N/A |
| Income from charges on entrusted management | 0.00 | 0.00 | 0.00 | N/A |
| Non-operating income and expense other than the above | 96,799,305.00 | 63,734,628.00 | 46,503,917.00 | N/A |
| Other gains and losses that meet the definition of exceptional gain/loss | 795,126,980.00 | 0.00 | 0.00 | N/A |
| Less: Income tax effects | 285,904,312.00 | 328,634,385.00 | 126,533,931.00 | N/A |
| Non-controlling interests effects (net of tax) | 295,726,831.00 | 182,810,608.00 | 43,277,139.00 | N/A |
| Total | 3,085,437,188.00 | 1,917,425,622.00 | 888,471,355.00 | -- |
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/LossItems:
√ Applicable □Not applicable
| Item | Amount involved (RMB) | Explanation of why |
| Other gains and losses that meet the definition of exceptional gain/loss | 795,126,980.00 | The Company is obliged to acquire through a stock-for-stock swap the capital contribution of the minority shareholder to subsidiary Hefei Xinsheng Optoelectronics Technology Co., Ltd. (hereinafter referred to as “Hefei Xinsheng”). According to the accounting standards governing financial instruments, such obligations are recorded in financial liabilities. During the Reporting Period, the Company signed an Equity Transfer Agreement with Hefei Heping Investment Co., Ltd. (hereinafter referred to as “Hefei Heping”). According to the Agreement, the Company would acquire the 15.3846% interest held by Hefei Heping in Hefei Xinsheng. Upon the completion of the deal, Hefei Xinsheng would become a wholly-owned subsidiary of the Company. According to the applicable accounting standard, the difference of RMB795,126,980.00 between the cash payment and the carrying amount of the financial liability is recorded in current profit or loss. |
BOE Technology Group Co., Ltd. Annual Report 2019
Part III Business SummaryI Principal Activity of the Company in the Reporting PeriodFounded in April 1993, BOE Technology Group Co., Ltd. (“BOE”) is an IoT company providing intelligent interface products andservices for information interaction and human health. In 2019, BOE adhered to its strategy of transforming further towards an IoTcompany. It kept promoting transformation and growth, tapping into IoT application needs and sharpening its competitive edges inmarket segments. Working with the B2B Chief Sales Platform Officer, the OMO Chief Sales Platform Officer, the Branding andGlobal Market Center, the Information Technology Development Center, and other professional service platforms, the three majorbusiness divisions of interface devices (D), smart IoT (S) and smart medicine and engineering (H) continued to enhance marketing,technological and systematic abilities and promote fast growth.
1. Interface Devices (D)
Division D consists of the Display and Sensor BG, and the Sensor and Application Solution BG. The Display and Sensor BG designsand manufactures related devices with a B2B model. The display device business offers TFT-LCD, AMOLED, Microdisplay andother intelligent interface devices for smartphones, tablet PCs, laptops, monitors, TVs, vehicles, electronic shelf label (ESL), tileddisplay screens, industrial control, wearable devices, VR/AR devices, electronic tags, white goods, healthcare, mobile payment,interactive whiteboards, etc. And the sensor device business provides integrated design and manufacturing services of sensor devicesfor use in medical detection, household detection, communication and transportation, smart homes, etc. The Sensor and ApplicationSolution BG provides sensor system solutions for B2B customers of medical imaging, biological detection, smart screens, microwavecommunication, fingerprint identification, industrial control and the like, with products including flat panel X-ray detectors (FPXD),digital microfluidic chips, PDLC glass, fingerprint identification systems, etc.
2. Smart IoT (S)
Division S is divided into the Intelligent Manufacturing Service BG, the IoT Solution BG and the Digital Art IoT Platform BG. TheIntelligent Manufacturing Service BG designs and manufactures, for its global B2B partners, the most competitive whole-widgetsmart manufacturing solutions of TVs, monitors, electronic blackboards, electronic signs, commercial display products, electronictags, self-service and mobile terminals, among others. Supported by AI and big data technologies, the IoT Solution BG focuses onsegment markets and offers integrated IoT solutions of smart finance, digital hospitals, smart business offices, smart homes, smarttransportation, smart education and smart energy, empowering these industries. The Digital Art IoT Platform BG adopts an IoTplatform model. Supported by paper display, digital art cloud platform, AI and other technologies, and cooperating with artorganizations and artists, this BG offers various products and services including artistic appreciation, art knowledge, picture bookreading, photo sharing, art mall and visual aesthetics.
3. Smart Medicine and Engineering (H)
Division H includes the Mobile Healthcare IoT Platform BG and the Smart Healthcare Service BG. The Mobile Healthcare IoTPlatform BG adopts a healthcare IoT platform model. It offers biochips, mobile detection devices and solutions, App products andservices, eco-chain products, etc. Being people-oriented, it provides mobile healthcare terminals and services based on the home,community and hospital scenarios. It is building a healthcare IoT platform featuring “family, community and hospital collaboration”.The Smart Healthcare Service BG covers digital hospitals, digital human body, regenerative medicine, healthcare parks, etc. It offersB2C customers online-and-offline integrated professional healthcare services focused on digital medical care and supplemented bysmart nursing home and healthcare park integrated solutions, as well as by industrial park operations and the like.
BOE Technology Group Co., Ltd. Annual Report 2019
II Significant Changes in Major Assets
1. Significant Changes in Major Assets
| Major assets | Main reason for significant changes |
| Equity assets | N/A |
| Fixed assets | N/A |
| Intangible assets | N/A |
| Construction in progress | Construction in progress increased because new construction projects had not yet been transferred to fixed assets. |
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness AnalysisRelying on the display and sensor technologies based on the optoelectronic technology development as the core, BOE is the largestmanufacturer of display devices and one of the largest manufacturers of intelligent terminals in the world. It is the resourceaccumulated by BOE in these years, and also serves as the base and core advantage for its industrial development. However, BOEalways adheres to the IoT transformation strategy, deeply integrates the core technologies including the semiconductor display andsensor, industrial resources and professional abilities with the IoT industry and energizes various segmented application scenarios soas to provide various products and service combining the software and hardware.
1. Continuously Enhance the Technical Innovation Ability
In 2019, the newly-added patent applications exceeded 9,600, including over 3,600 overseas patents and over 4,000 patentapplication covering such important fields as flexible AMOLED, sensors, artificial intelligence and big data. Similarly, thenewly-added patent licenses exceeded 5,000, including over 2,000 overseas patent licenses, and great progress was made in the R&Dof transformation technology covering the sensors, artificial intelligence, big data and integration of medicine and industry. Up to2019, BOE’s cumulative independent patent applications exceeded 55,000 and licensed patents 27,000. By virtue of its positiveresearch and rapid development in the field of artificial intelligence, BOE now ranks the 6th in the Chinese Enterprises’ AITechnology Invention Patent Ranking List, and its image super resolution, gesture recognition and target detection algorithm havetaken the crown in the top international competition. Besides, as the self-developed digital art display system ITU internationalstandards have been approved, it will seize the initiative in executing the international standard in the digital culture field, andcorresponding ITU project approval is also obtained for two UHD tele-medicine international standards.
2. Steadily Improved Market Status and Innovative Business Development Capability
The display business’s leading market status in the world has been further enhanced. For example, the display device’s shipment areahas achieved a year-on-year growth of 19% and the shipped quantity 16%. The market share of sales of smart phone LCD, tablet PCdisplay screen, notebook computer display screen, display panel and TV display continues its first ranking status. In addition, theinnovative application sales area achieves a year-on-year growth of 72% and the sales 49%. As the sales of complete highvalue-added products related to the intelligent manufacturing increases, the sales of TV complete appliances on the domestic marketrealize a year-on-year growth of 180%.
BOE Technology Group Co., Ltd. Annual Report 2019
As the innovation and transformation business revenue and market shares maintain a relatively high growth rate, the development ofvarious transformation businesses also accelerates including the sensors and solutions, IoT solutions, smart retail, digital art, mobilehealth and health service etc.. As a result, the revenue increases 60% when compared to that in the same period and the industryinfluence and brand awareness have been steadily improved.
3. Advanced Lean Management Level and Operating Efficiency
Great effort has been made to deeply develop the production-line technique capability, establish the OEE management system,continuously optimize the bottleneck operation and promote the further improvement of the production capacity and the productionline operational capability. For example, Hefei 6th generation TFT-LCD production line’s profitability tops the world; the shippingrate of various products of Chongqing 8.5th generation TFT-LCD production line reaches the highest level in the history; Fuzhou
8.5th generation TFT-LCD production line sets a new high record of the monthly capacity of BOE 8.5th production line. Meanwhile,the product centralization is effectively promoted, and the production line and product structure are further optimized. By introducingthe modular and automatic production, the intelligent manufacturing can help save human labor and improve the working efficiency.In order to completely enhance the customer delivery satisfaction, the Company has established the 24-hour delivery abnormalityresponse system to accelerate the handling of abnormalities. As a result, the quality management level is further improved; thedisplay device ranks first in terms of the quality performance among 16 strategic customer terminals, and the Company has wonvarious Annual Outstanding Quality Gold Awards and Gold Supplier from various brand customers. As the cost competitiveness isincreasing, the display business division will improve the supplier strategic cooperation linkage mechanism and continuouslyoptimize the supplier resource pool so as to guarantee the steady supply of various resources and materials. Furthermore, the onlinesupply and sales collaboration platform will be established for the intelligent manufacturing service to achieve 100% MRP orderconversion rate.
BOE Technology Group Co., Ltd. Annual Report 2019
Part IV Operating Performance Discussion and AnalysisI Overview
2019 saw the longest and deepest trough of the semi-conductor display industry in its history, with escalating oversupply andincreasing competition. Meanwhile, uncertainties across the world such as a string of trade frictions, rising trade protectionism andgeopolitical instability created downward pressure on the global economy. In the harsh market environment, BOE seized theopportunity to grow in this industry trough. It managed to achieve stable growth in operating revenue against a shrinking market size.For 2019, the Company recorded operating revenue of approximately RMB116.06 billion, up by around 19.51% year-on-year.
1. D, S, H Business Divisions Develop Simultaneously
The Interface Devices BD (D)The display device’s market status is steadily improved with the overall sales achieving a year-on-year growth of 16%. The marketshare of sales of smart phone LCD, tablet PC display screen, notebook computer display screen, display monitorand TV displaycontinues its first ranking status; the display and sensors BD has successfully propelled its new production line construction, and theflexible AMOLED business has achieved its breakthrough. Meanwhile, Hefei 10.5th generation TFT-LCD production line producesin a full capacity; Mianyang 6th generation flexible AMOLED production and Wuhan 10.5th generation TFT-LCD production linerealize the volume production; the pile foundation has been constructed for Chongqing 6th generation flexible AMOLED productionline. As the sales of innovative applications realize a year-on-year growth of 50%, the market occupancy is largely improved.Similarly, the sensors and solutions business grows rapidly; the medical imaging BD shipment quantity realizes an increase of 70%when compared to that in the same period; the biological detection Flowcell product core customer-side occupancy monthlyproportion exceeds 50%.The Smart IoT BD (S)With the improvement of intelligent manufacturing service and management quality, the full-screen series of products (withoutframes) have been completely introduced into various brand customers and put into volume production. The TV complete appliances’sales on the domestic market increase 180% when compared to that in the same period, and the Company has become the first-choicesupplier for various strategic customers. The volume production and delivery are also materialized for various new applicationsincluding the commercial display, electronic table card, intelligent cash register and smart watch etc.. Meanwhile, IoT solutions BDhas undertaken various demonstration projects including the National Day Performance and Daxing International Airport etc.; SmartFinance has provided over 1000 financial branches with corresponding intelligent upgrading service; smart retail overseas branchintroduces the strategic investment and enhances the strategic cooperation; the Company has won the bidding of various intelligentrenovation projects in China. As the digital art display system has been approved with the ITU international standard, it has furtherdefined the international technical specifications for the digital artwork display. The platform-based professional works exceed30,000, and the users upload over 1.5 million works. In fact, it has obtained the authorization from the Ministry of Culture andTourism of the P.R.C to establish the national digital culture industry innovation center.The Smart Medicine and Engineering BD (H)With the improvement of the mobile health product system, more than 10 BOE brand products and 50 eco-chain products haverealized their marketing; by obtaining the omni-channel qualification for selling and operating medical devices, the Company hasimproved the construction of online and offline marketing platforms, and the annual hardware sales have achieved a new high; thebiological chip integration testing system has won the special support from Beijing Municipal Science and Technology Commission,and DEMO product development is also completed; now, great effort will be made to accelerate the implementation and applicationof various solutions including the chronic respiratory disease management, the CVD management, the diabetes management, the
BOE Technology Group Co., Ltd. Annual Report 2019
Smart Emergency, the Smart Health Care Community and the Smart Public Health and Physical Examination etc..In terms of the health service, the outpatient visits of OASIS International Hospital achieve a year-on-year growth of 20%; since itsopening in March, Hefei BOE Hospital has made its outpatient visits reach about 100,000. Meanwhile, it has begun to providevarious level-4 surgeries and treated and cured 100 difficult diseases, and obtained the qualification of Anhui Provincial First Batchof Internet Hospitals; the regenerative medicine heart diaphram finishes the cell detection conducted by NIFDC, the small animal testand the large animal preliminary experiment; as the health care park business is developing stably, various life science andtechnology parks are established as well in different places.
2. Progress is Made in the Development of Innovation Subdivision and Application MarketThe intelligent window subdivision of the sensors and solutions BD has launched its high-speed train intelligent window products tothe world, successfully realizing the application in Beijing-Xiong'an Intercity Railway Trains; IoT solutions BD has implementedvarious products and solutions including 5G holographic classroom solution, intelligent conference and smart home etc.; the digitalart BD has successfully launched Funbook, iGallery S3 and other new products; the mobile health BD realizes the marketing ofvarious self-developed products including the breast milk analysis meter and the sleep meter 2.0 etc., and the mobile health APP 4.0is also released to the market; the health service BD has launched the newborn baby’s umbilical cord stem cells storage products tothe market, and the digital human body APP has released its 2.0 version; the light and shadow art solutions BD appears in variousactivities to celebrate the 70th anniversary for the founding of new China.
3. The Technical Innovation Ability is Further Enhanced
In 2019, the newly-added patent applications exceeded 9,600, including over 3,600 overseas patents and over 4,000 patentapplication covering such important fields as flexible AMOLED, sensors, artificial intelligence and big data. Similarly, thenewly-added patent licenses exceeded 5,000, including over 2,000 overseas patent licenses, and great progress was made in the R&Dof transformation technology covering the sensors, artificial intelligence, big data and integration of medicine and industry. BOE nowranks the 6th in the Chinese Enterprises’ AI Technology Invention Patent Ranking List, and its image super resolution, gesturerecognition and target detection algorithm have taken the crown in the top international competition. Besides, the Company hasdirected the formulation and revision of 29 external technical standards including 13 newly-added standards. As the self-developeddigital art display system ITU international standards have been approved, it will seize the initiative in executing the internationalstandard in the digital culture field, and corresponding ITU project approval is also obtained for two UHD tele-medicine internationalstandards.II Core Business Analysis
1. Overview
See “I Overview” above.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
| Item | 2019 | 2018 | Change (%) | ||
| Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
BOE Technology Group Co., Ltd. Annual Report 2019
| Total | 116,059,590,164.00 | 100% | 97,108,864,935.00 | 100% | 19.51% |
| By operating division | |||||
| Interface devices | 106,482,397,172.00 | 91.75% | 86,688,426,362.00 | 89.27% | 22.83% |
| Smart IoT | 16,730,993,983.00 | 14.42% | 17,499,500,352.00 | 18.02% | -4.39% |
| Smart medicine and engineering | 1,357,484,751.00 | 1.17% | 1,151,844,468.00 | 1.19% | 17.85% |
| Others | 5,262,960,973.00 | 4.53% | 3,569,024,583.00 | 3.68% | 47.46% |
| Offset | -13,774,246,715.00 | -11.87% | -11,799,930,830.00 | -12.15% | 16.73% |
| By product category | |||||
| Interface devices | 106,482,397,172.00 | 91.75% | 86,688,426,362.00 | 89.27% | 22.83% |
| Smart IoT | 16,730,993,983.00 | 14.42% | 17,499,500,352.00 | 18.02% | -4.39% |
| Smart medicine and engineering | 1,357,484,751.00 | 1.17% | 1,151,844,468.00 | 1.19% | 17.85% |
| Others | 5,262,960,973.00 | 4.53% | 3,569,024,583.00 | 3.68% | 47.46% |
| Offset | -13,774,246,715.00 | -11.87% | -11,799,930,830.00 | -12.15% | 16.73% |
| By operating segment | |||||
| Mainland China | 59,444,025,767.00 | 51.22% | 42,942,349,994.00 | 44.22% | 38.43% |
| Other regions in Asia | 45,030,859,656.00 | 38.80% | 44,256,356,951.00 | 45.57% | 1.75% |
| Europe | 4,511,337,220.00 | 3.89% | 3,488,264,284.00 | 3.59% | 29.33% |
| America | 6,911,922,720.00 | 5.96% | 6,354,884,816.00 | 6.54% | 8.77% |
| Other regions | 161,444,801.00 | 0.14% | 67,008,890.00 | 0.07% | 140.93% |
(2) Operating Division, Product Category or Operating Segment Contributing over 10% of OperatingRevenue or Operating Profit
√ Applicable □ Not applicable
Unit: RMB
| Item | Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) | |
| By operating division | |||||||
| Interface devices | 106,482,397,172.00 | 92,524,045,122.00 | 13.11% | 22.83% | 31.54% | -5.75% | |
| Smart IoT | 16,730,993,983.00 | 14,553,859,142.00 | 13.01% | -4.39% | -6.52% | 1.98% | |
| By product category | |||||||
| Interface devices | 106,482,397,172.00 | 92,524,045,122.00 | 13.11% | 22.83% | 31.54% | -5.75% | |
BOE Technology Group Co., Ltd. Annual Report 2019
| Smart IoT | 16,730,993,983.00 | 14,553,859,142.00 | 13.01% | -4.39% | -6.52% | 1.98% |
| By operating segment | ||||||
| Mainland China | 59,444,025,767.00 | 50,441,969,510.00 | 15.14% | 38.43% | 47.96% | -5.47% |
| Other regions in Asia | 45,030,859,656.00 | 37,685,447,593.00 | 16.31% | 1.75% | 6.60% | -3.81% |
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable√ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
√ Yes □ No
| Operating division | Item | Unit | 2019 | 2018 | Change (%) |
| TFT-LCD | Unit sales | K㎡ | 50,316 | 42,232 | 19.14% |
| Output | K㎡ | 50,118 | 42,548 | 17.79% | |
| Inventory | K㎡ | 2,427 | 2,229 | 8.88% |
Reason for any over 30% YoY movements in the data above
□ Applicable √ Not applicable
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
By operating division and product category
Unit: RMB
| By operating division | Item | 2019 | 2018 | Change (%) | ||
| Cost of sales | As % of total cost of sales (%) | Cost of sales | As % of total cost of sales (%) | |||
| Interface devices | Materials, labor costs, depreciation, etc. | 92,524,045,122.00 | 93.98% | 70,337,005,047.00 | 90.98% | 31.54% |
| Smart IoT | Materials, labor costs, depreciation, etc. | 14,553,859,142.00 | 14.78% | 15,568,843,342.00 | 20.14% | -6.52% |
| Smart medicine and engineering | Materials, labor costs, depreciation, etc. | 668,875,829.00 | 0.68% | 470,618,522.00 | 0.61% | 42.13% |
| Others | Materials, labor costs, depreciation, etc. | 19,722,159.00 | 0.02% | 31,925,209.00 | 0.04% | -38.22% |
BOE Technology Group Co., Ltd. Annual Report 2019
| Offset | Materials, labor costs, depreciation, etc. | -9,320,232,956.00 | -9.47% | -9,102,167,832.00 | -11.77% | 2.40% |
Unit: RMB
| By product category | Item | 2019 | 2018 | Change (%) | ||
| Cost of sales | As % of total cost of sales (%) | Cost of sales | As % of total cost of sales (%) | |||
| Interface devices | Materials, labor costs, depreciation, etc. | 92,524,045,122.00 | 93.98% | 70,337,005,047.00 | 90.98% | 31.54% |
| Smart IoT | Materials, labor costs, depreciation, etc. | 14,553,859,142.00 | 14.78% | 15,568,843,342.00 | 20.14% | -6.52% |
| Smart medicine and engineering | Materials, labor costs, depreciation, etc. | 668,875,829.00 | 0.68% | 470,618,522.00 | 0.61% | 42.13% |
| Others | Materials, labor costs, depreciation, etc. | 19,722,159.00 | 0.02% | 31,925,209.00 | 0.04% | -38.22% |
| Offset | Materials, labor costs, depreciation, etc. | -9,320,232,956.00 | -9.47% | -9,102,167,832.00 | -11.77% | 2.40% |
Note: N/A
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√ Yes □ No
The changes in the scope of consolidated financial statements for the Reporting Period had no significant impact on segmentdata.
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
Major customers:
| Total sales to top five customers (RMB) | 49,537,712,553.00 |
| Total sales to top five customers as % of total sales of the Reporting Period (%) | 42.68% |
| Total sales to related parties among top five customers as % of total sales of the Reporting Period (%) | 0.00% |
BOE Technology Group Co., Ltd. Annual Report 2019
Information about top five customers:
| No. | Customer | Sales revenue contributed for the Reporting Period (RMB) | As % of total sales revenue (%) |
| 1 | Customer A | 15,558,544,056.00 | 13.41% |
| 2 | Customer B | 15,421,790,690.00 | 13.29% |
| 3 | Customer C | 6,512,748,927.00 | 5.61% |
| 4 | Customer D | 6,275,998,098.00 | 5.41% |
| 5 | Customer E | 5,768,630,782.00 | 4.97% |
| Total | -- | 49,537,712,553.00 | 42.68% |
Other information about major customers:
□ Applicable √ Not applicable
Major suppliers:
| Total purchases from top five suppliers (RMB) | 16,186,612,673.00 |
| Total purchases from top five suppliers as % of total purchases of the Reporting Period (%) | 16.44% |
| Total purchases from related parties among top five suppliers as % of total purchases of the Reporting Period (%) | 0.00% |
Information about top five suppliers:
| No. | Supplier | Purchase in the Reporting Period (RMB) | As % of total purchases (%) |
| 1 | Supplier A | 6,375,183,272.00 | 6.48% |
| 2 | Supplier B | 2,884,087,120.00 | 2.93% |
| 3 | Supplier C | 2,672,050,602.00 | 2.71% |
| 4 | Supplier D | 2,496,257,468.00 | 2.54% |
| 5 | Supplier E | 1,759,034,211.00 | 1.79% |
| Total | -- | 16,186,612,673.00 | 16.44% |
Other information about major suppliers:
□ Applicable √ Not applicable
3. Expense
Unit: RMB
| Item | 2019 | 2018 | Change (%) | Reason for any significant change |
| Selling expense | 2,917,865,380.00 | 2,891,056,969.00 | 0.93% | N/A |
| Administrative expense | 5,214,948,027.00 | 4,959,184,197.00 | 5.16% | N/A |
BOE Technology Group Co., Ltd. Annual Report 2019
| Finance costs | 1,994,150,258.00 | 3,196,695,890.00 | -37.62% | Repayment of the carrying amount of debt that was convertible to stock |
| R&D expense | 6,699,973,240.00 | 5,039,927,435.00 | 32.94% | Increasement of R&D investment |
4. R&D Expense
√ Applicable □ Not applicable
Details about R&D input:
| Item | 2019 | 2018 | Change (%) |
| Number of R&D personnel | 19,617 | 19,627 | -0.05% |
| R&D personnel as % of total employees | 30.17% | 28.73% | 1.44% |
| R&D expense (RMB) | 8,748,156,031.00 | 7,238,202,290.00 | 20.86% |
| R&D expense as % of operating revenue | 7.54% | 7.45% | 0.09% |
| Capitalized R&D expense (RMB) | 2,048,182,791.00 | 2,198,274,855.00 | -6.83% |
| Capitalized R&D expense as % of total R&D expense | 23.41% | 30.37% | -6.96% |
Reasons for any significant YoY change in the percentage of R&D expense in operating revenue:
□ Applicable √ Not applicable
Reason for any sharp variation in the percentage of capitalized R&D expense and rationale:
□ Applicable √ Not applicable
5. Cash Flows
Unit: RMB
| Item | 2019 | 2018 | Change (%) |
| Subtotal of cash generated from operating activities | 145,523,323,441.00 | 115,069,347,790.00 | 26.47% |
| Subtotal of cash used in operating activities | 119,440,244,247.00 | 89,385,300,594.00 | 33.62% |
| Net cash generated from/used in operating activities | 26,083,079,194.00 | 25,684,047,196.00 | 1.55% |
| Subtotal of cash generated from investing activities | 35,949,685,082.00 | 68,276,730,240.00 | -47.35% |
| Subtotal of cash used in investing activities | 83,365,812,518.00 | 115,340,265,598.00 | -27.72% |
| Net cash generated from/used in investing activities | -47,416,127,436.00 | -47,063,535,358.00 | -- |
| Subtotal of cash generated from financing activities | 75,724,272,107 | 42,994,273,471.00 | 76.13% |
| Subtotal of cash used in financing activities | 47,945,626,777.00 | 27,427,703,081.00 | 74.81% |
| Net cash generated from/used in financing activities | 27,778,645,330.00 | 15,566,570,390.00 | 78.45% |
| Net increase in cash and cash equivalents | 6,919,625,053.00 | -4,562,591,063.00 | -- |
Explanation of why any of the data above varies significantly:
√ Applicable □ Not applicable
BOE Technology Group Co., Ltd. Annual Report 2019
Net cash generated from financing activities increases 78% compared with that of last year, which is mainly caused by the issue ofrenewable corporate bonds by the Company and the capital increase to new projects by minority shareholder.
Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period
√ Applicable □Not applicable
Mainly because the depreciation amount of equipment in the display industry is high, causing a gap between net cash generated fromoperating activities and net profit.III Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
| Item | Amount | As % of total profit | Source/Reason | Recurrent or not |
| Return on investment | 342,620,691.00 | 68.01 % | Income recognized from associates and wealth management products | Not |
| Gain/loss on changes in fair value | 137,473,077.00 | 27.29% | Changes in the fair value of wealth management products during the holding period | Not |
| Asset impairments | -2,584,183,258.00 | -512.99% | Amount provided for inventory falling price impairment according to market conditions | Not |
| Non-operating income | 208,430,198.00 | 41.38% | Government subsidies and revenue from sale of waste products | Not |
| Non-operating expense | 103,349,078.00 | 20.52% | Loss on retirement of fixed assets | Not |
| Other income | 2,605,658,711.00 | 517.25% | Governmental subsidies received in the Reporting Period | Not |
BOE Technology Group Co., Ltd. Annual Report 2019
IV Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
The Company adopts the new accounting standards governing financial instruments, revenue and leases in 2019 for the first time and restates the relevant financial statement items at thebeginning of the year of the adoption.
√ Applicable □ Not applicable
Unit: RMB
| Item | 31 December 2019 | 1 January 2019 | Change in percentage (%) | Reason for any significant change | ||
| Amount | As % of total assets | Amount | As % of total assets | |||
| Monetary assets | 56,972,723,239.00 | 16.74% | 51,481,539,711.00 | 16.93% | -0.19% | N/A |
| Accounts receivable | 18,135,687,806.00 | 5.33% | 19,874,790,758.00 | 6.54% | -1.21% | N/A |
| Inventories | 12,396,194,762.00 | 3.64% | 11,985,398,172.00 | 3.94% | -0.30% | N/A |
| Investment property | 1,241,242,850.00 | 0.36% | 1,283,867,651.00 | 0.42% | -0.06% | N/A |
| Long-term equity investments | 2,718,037,934.00 | 0.80% | 2,389,166,886.00 | 0.79% | 0.01% | N/A |
| Fixed assets | 125,786,241,938.00 | 36.95% | 128,157,730,995.00 | 42.15% | -5.20% | N/A |
| Construction in progress | 87,376,782,527.00 | 25.67% | 56,423,354,887.00 | 18.56% | 7.11% | Construction in progress increased because new construction projects had not yet been transferred to fixed assets. |
| Short-term borrowings | 6,366,717,121.00 | 1.87% | 5,449,954,885.00 | 1.79% | 0.08% | N/A |
| Long-term borrowings | 107,730,595,615.00 | 31.65% | 94,780,077,864.00 | 31.18% | 0.47% | N/A |
| Current portion of non-current liabilities | 18,849,281,019.00 | 5.54% | 5,597,563,204.00 | 1.84% | 3.70% | Transfer from long-term borrowings |
BOE Technology Group Co., Ltd. Annual Report 2019
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
| Item | Beginning amount | Gain/loss on fair-value changes in the Reporting Period | Cumulative fair-value changes charged to equity | Impairment allowance for the Reporting Period | Purchased in the Reporting Period | Sold in the Reporting Period | Other changes | Ending amount |
| Financial assets | ||||||||
| 1. Held-for-trading financial assets (excluding derivative financial assets) | 4,433,393,359.00 | 66,473,077.00 | 66,473,077.00 | 0.00 | 26,100,982,659.00 | 24,791,664,101.00 | 0.00 | 5,809,184,994.00 |
| 2.Derivative financial assets | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 3. Investments in other debt obligations | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 4. Investments in other equity instruments | 721,155,927.00 | 0.00 | -330,732,259.00 | 0.00 | 9,935,636.00 | 84,227,710.00 | 0.00 | 632,076,647.00 |
| Subtotal of financial assets | 5,154,549,286.00 | 66,473,077.00 | -264,259,182.00 | 0.00 | 26,110,918,295.00 | 24,875,891,811.00 | 0.00 | 6,456,048,847.00 |
| Investment property | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Productive living assets | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Others | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total of the above | 5,154,549,286.00 | 66,473,077.00 | -264,259,182.00 | 0.00 | 26,110,918,295.00 | 24,875,891,811.00 | 0.00 | 6,456,048,847.00 |
| Financial liabilities | 71,000,000.00 | -71,000,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Contents of other changes: N/ASignificant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
BOE Technology Group Co., Ltd. Annual Report 2019
3. Restricted Asset Rights as at the Period-End
| Item | Ending carrying value | Reason for restriction |
| Monetary capital | 6,702,401,666.00 | As pledge for guarantee and as security deposits |
| Notes receivable | 57,102,517.00 | Endorsed and transferred with right of recourse, as pledge for opening notes payable |
| Inventories | 0.00 | N/A |
| Fixed assets | 93,007,772,827.00 | As mortgage for guarantee |
| Intangible assets | 1,534,385,843.00 | As mortgage for guarantee |
| Construction in progress | 57,083,458,981.00 | As mortgage for guarantee |
| Investment property | 43,396,671.00 | As mortgage for guarantee |
| Financial assets held for trading | 24,000,000.00 | As mortgage for guarantee |
| Total | 158,452,518,505.00 | -- |
V Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
| Investments made in this Reporting Period (RMB) | Investments made in the prior year (RMB) | Change (%) |
| 123,621,675.00 | 183,852,785.00 | -32.76% |
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
BOE Technology Group Co., Ltd. Annual Report 2019
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
| Variety of securities | Code of securities | Name of securities | Initial investment cost | Accounting measurement model | Beginning carrying value | Profit/loss on fair value changes in this Reporting Period | Cumulative fair value changes charged to equity | Purchased in this Reporting Period | Sold in this Reporting Period | Profit/loss in this Reporting Period | Ending carrying value | Accounting title | Source of investment funds |
| Domestic/overseas stock | HK00903 | TPV Technology | 134,658,158.00 | Fair value method | 25,613,279.00 | 0.00 | -50,430,448.00 | 0.00 | 84,227,710.00 | 471,354.00 | 0.00 | Other equity instrument investment | Self-owned funds |
| Domestic/overseas stock | SH600658 | Electronic Zone | 90,160,428.00 | Fair value method | 83,995,943.00 | 0.00 | -17,574,736.00 | 0.00 | 0.00 | 1,883,379.00 | 72,585,692.00 | Other equity instrument investment | Self-owned funds |
| Domestic/overseas stock | HK01963 | Bank of Chongqing | 120,084,375.00 | Fair value method | 98,705,067.00 | 0.00 | -31,995,940.00 | 0.00 | 0.00 | 3,881,382.00 | 105,407,103.00 | Other equity instrument investment | Self-owned funds |
| Domestic/overseas stock | HK06066 | China Securities | 70,041,364.00 | Fair value method | 44,412,575.00 | 0.00 | -1,891,238.00 | 0.00 | 0.00 | 2,055,835.00 | 68,545,920.00 | Other equity instrument investment | Self-owned funds |
BOE Technology Group Co., Ltd. Annual Report 2019
| Domestic/overseas stock | HK01518 | New Century Healthcare | 140,848,850.00 | Fair value method | 125,909,253.00 | 0.00 | -89,754,410.00 | 0.00 | 0.00 | 0.00 | 53,586,259.00 | Other equity instrument investment | Self-owned funds |
| Other securities investments held at the period-end | 0.00 | -- | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -- | -- | ||
| Total | 555,793,175.00 | -- | 378,636,117.00 | 0.00 | -191,646,772.00 | 0.00 | 84,227,710.00 | 8,291,950.00 | 300,124,974.00 | -- | -- | ||
| Disclosure date of the announcement about the board’s consent for the securities investment | N/A | ||||||||||||
| Disclosure date of the announcement about the general meeting’s consent for the securities investment (if any) | N/A | ||||||||||||
(2) Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
Unit: RMB’0,000
| Counterparty | Relationship with the Company | Related-party transaction or not | Type of derivative | Initial investment amount | Start date | End date | Beginning investment amount | Purchased in the Reporting Period | Sold in the Reporting Period | Impairment allowance (if any) | Ending investment amount | Ending investment amount as % of the Company’s ending net asset value | Actual gain/loss in the Reporting Period |
| Bank | Not a related party | Not | Foreign exchange forward | 13,254.78 | January 1, 2019 | December 31, 2019 | 13,254.78 | 118,595.40 | 53,716.74 | - | 78,133.44 | 0.55% | 390.78 |
BOE Technology Group Co., Ltd. Annual Report 2019
| contract | |||||||||||
| Total | 13,254.78 | -- | -- | 13,254.78 | 118,595.40 | 53,716.74 | - | 78,133.44 | 0.55% | 390.78 | |
| Funding source | Self-funded | ||||||||||
| Legal matters involved (if applicable) | N/A | ||||||||||
| Analysis of risks and control measures associated with the derivative investments held in the Reporting Period (including but not limited to market, liquidity, credit, operational and legal risks, etc.) | As of the end of the reporting period, the financial derivatives held by the company are foreign exchange forward contracts, and the risks faced are related to the uncertainty of the foreign exchange market in the future. The company's control measures for the financial derivatives are as follows: the company controls the types of derivative transactions, reasonably matches the scale of derivative transactions, and the transactions must match the company's production, operation and development planning, mainly for the purpose of cost locking and risk prevention. | ||||||||||
| Changes in market prices or fair value of derivative investments in the Reporting Period (fair value analysis should include measurement methods and related assumptions and parameters) | The fair value of the invested derivatives at the end of the reporting period shall be determined by reference to the market quotation of the external financial institutions. | ||||||||||
| Significant changes in accounting policies and specific accounting principles adopted for derivative investments in the Reporting Period compared to the last reporting period | No major changes | ||||||||||
| Opinion of independent directors on derivative investments and risk control | N/A | ||||||||||
BOE Technology Group Co., Ltd. Annual Report 2019
5. Use of Funds Raised
√ Applicable □ Not applicable
(1) Overall Usage of Funds Raised
√ Applicable □ Not applicable
Unit: RMB’0,000
| Year | Way of raising | Total funds raised | Total funds used in the Current Period | Accumulative fund used | Total funds with usage changed | Accumulative funds with usage changed | Proportion of accumulative funds with usage changed | Total unused funds | The usage and destination of unused funds | Amount of funds raised idle for over two years |
| 2019 | Renewable corporate bonds | 800,000 | 749,870 | 749,870 | 0 | - | 0.00% | 50,130 | Using according to project investment plan | 0 |
| Total | -- | 800,000 | 749,870 | 749,870 | 0 | - | 0.00% | 50,130 | -- | 0 |
| Explanation of overall usage of funds raised | ||||||||||
| The total amount of 19BOEY1bond raised in the Reporting Period was RMB8,000,000,000, and the net capital amount after deducting issuance cost was RMB7,956,000,100, which was used to capital increase to subsidiary and repayment of the Company’s debt. In the Reporting Period, the fund raised was used according to project investment plan, conforming to the promise in the bond offering prospectus. | ||||||||||
(2) Commitment Projects of Fund Raised
√ Applicable □ Not applicable
Unit: RMB’0,000
| Committed investment project and super raise fund arrangement | Changed or not (including partial changes) | Committed investment amount | Investment amount after adjustment (1) | Investment amount in the Reporting Period | Accumulative investment amount as of the period-end (2) | Investment schedule as the period-end (3)＝(2)/(1) | Date of reaching intended use of the project | Realized income in the Reporting Period | Whether reached anticipated income | Whether occurred significant changes in project feasibility |
| Committed investment project | ||||||||||
| Chengdu BOE Optoelectronics Technology Co., Ltd. | Not | 175,000 | 172,000 | 172,000 | 172,000 | 100.00% | No | N/A | N/A | Not |
BOE Technology Group Co., Ltd. Annual Report 2019
| Mianyang BOE Optoelectronics Co., Ltd | Not | 50,000 | 50,000 | 50,000 | 50,000 | 100.00% | No | N/A | N/A | Not |
| Chongqing BOE Display Technology Co., Ltd. | Not | 50,000 | 48,600 | 48,600 | 48,600 | 100.00% | No | N/A | N/A | Not |
| Wuhan BOE Optoelectronics Technology Co., Ltd. | Not | 100,000 | 100,000 | 51,370 | 51,370 | 51.37% | No | N/A | N/A | Not |
| BOE Health Investment Management Co., Ltd. | Not | 75,000 | 75,000 | 73,500 | 73,500 | 98.00% | No | N/A | N/A | Not |
| Return of bank loan | Not | 350,000 | 350,000 | 350,000 | 350,000 | 100.00% | No | N/A | N/A | Not |
| Subtotal of committed investment project | -- | 800,000 | 795,600 | 745,470 | 745,470 | -- | -- | -- | -- | -- |
| Super raise fund arrangement | ||||||||||
| - | 0 | 0 | 0 | 0 | 0.00% | 0 | ||||
| Total | -- | 800,000 | 795,600 | 745,470 | 745,470 | -- | -- | 0 | -- | -- |
| Condition and reason for not reaching the schedule and anticipated income (by specific items) | No such cases in the Reporting Period. | |||||||||
| Notes of condition of significant changes occurred in project feasibility | Naught | |||||||||
| Amount, usage and schedule of super raise fund | N/A | |||||||||
| Changes in implementation address of investment project | N/A | |||||||||
| Adjustment of implementation mode of investment project | N/A | |||||||||
| Upfront investment and | Applicable | |||||||||
BOE Technology Group Co., Ltd. Annual Report 2019
| transfer of investment project | The 2nd Extraordinary General Meeting held on 12 September 2019 reviewed and approved that the Company increase capital of RMB650 million to Chengdu BOE Optoelectronics Technology Co., Ltd. through self-owned fund, RMB135 million to BOE Health Investment Management Co., Ltd., totaling RMB785 million. The raised fund of RMB785 million was transferred to the Company’s account of self-owned fund on 7 November 2019 and 8 November 2019 respectively. |
| Idle fund supplementing the current capital temporarily | N/A |
| Amount of surplus in project implementation and the reasons | N/A |
| Usage and destination of unused funds | The unused fund is planned to be invested in item of fund prospectus successively. |
| Problems incurred in fund using and disclosure or other condition | Naught |
(3) Changes in Items of Funds Raised
□ Applicable √ Not applicable
No such cases in the Reporting Period.VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
BOE Technology Group Co., Ltd. Annual Report 2019
VII Major Subsidiaries
√ Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the Company’s net profit:
Unit: RMB
| Name | Relationship with the Company | Principal activity | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Hefei BOE Optoelectronics Technology Co., Ltd. | Subsidiary | Investment construction, R&D, Production, and sales of relevant products of TFT-LCD and its matching products. | 9,000,000,000.00 | 16,853,388,416.00 | 13,001,561,413.00 | 12,454,642,901.00 | 1,932,070,767.00 | 1,685,906,336.00 |
| Chongqing BOE Optoelectronics Technology Co., Ltd. | Subsidiary | R&D, Production, and sales of semi-conductor display device, complete machine, and relevant products; import and export business and technology consulting of goods. | 19,226,000,000.00 | 39,464,468,756.00 | 26,232,151,552.00 | 20,493,258,263.00 | 991,668,325.00 | 884,388,330.00 |
Subsidiaries obtained or disposed in this Reporting Period
□ Applicable √ Not applicable
Information about major majority- and minority-owned subsidiaries: Naught
BOE Technology Group Co., Ltd. Annual Report 2019
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX ProspectsIn 2020, the IoT Market segmentation and scenario application will become much richer, further propel the booming of relatedindustry and provide possible opportunities to urge the transformation of IoT; as the improvement of people’s health awareness andlife quality, the public health industry will transform from “the treatment of disease” to “the prevention of disease”; the sharpincrease in the demand for health management and high-quality medical service will pose huge opportunity for the development ofSmart Medicine and Engineering.
1. Intelligent System Innovation Center
BOE Intelligent System Innovation Center Project will focus on various cutting-edge technologies including the artificial intelligence,big data and cloud computing to establish five major platforms--Software and Hardware Integration Technology DevelopmentPlatform, Product and Service Marketing, Promotion and Presentation Platform, New Materials and Equipment IndustrialTransformation Platform, International Talents Exchange and Training Platform, and Open Technology and Market CooperationPlatform and launch six major products (Intelligent Car Networking, Smart Retail, Smart Finance, Smart Medicine and Engineering,Industrial IoT and Smart City Public Service) and continuously explore and work out much more IoT innovative products andsolutions.
2. The Interface Devices BD (D)
The display and sensors BD will pay special attention to accelerate the LCD traditional application structure optimization andinnovation transformation so as to break through the OLED professional ability, enhance the customer stickiness and set a record forthe sales of supersize products.The sensors and solutions BD will make unremitting effort to promote the innovation transformation and pay special attention todevelop such businesses as medical imaging, intelligent window, fingerprint recognition, biological detection, microwavecommunication and application scheme etc., providing the customers with diversified products and services featuring outstandingperformance.
3. The Smart IoT BD (S)
The Intelligent Manufacturing Service BD will speed up the innovation transformation, strengthen the lean management, meet thedemand for subdivided application scenario solutions and provide the ecological partners with various ICT terminal products andservice.The IoT Solutions BD will continuously develop various benchmark projects in the subdivided fields including Smart Gov, Edu.Solution, Smart Park, Intelligent Transportation, Business Office, Digital Hospital and Intelligent Energy etc., cultivate the SmartFinance, enhance the ecological cooperation and quickly release a batch of software & hardware integration core products and keysolutions. In the meantime, Smart Retail will emphasize the reconstruction of personnel and freight yard, develop various systemsand solutions, link the online with the offline, provide the all-round service and materialize the brand-new smart retail concept(Retail=Service).The digital art BD will further optimize various platform functions, enrich the terminal product cluster, produce quality goods,expand the market and cultivate the user group.
4. The Smart Medicine and Engineering BD (H)
The mobile health BD will pay special attention to the development and application of various technologies including the biologicalchips, IoT, big data and artificial intelligence etc., improve the ability to develop technical products and urge the innovationtransformation of medicine and engineering, launch the self-developed core IoT detection terminals, enhance the product ecosystemconstruction, optimize the mobile health App user experience, formulate various platform solutions based on the health IoT includingthe chronic disease integrated management and intelligent medical service, and facilitate the implementation of variousdemonstration projects and the rapid replication of success mode.In addition, the health service BD will further enhance various core capabilities involving the digital hospital key disciplines, themarket channel development and the group-based operation and management, promote the performance growth of OASISInternational Hospital and Hefei BOE Hospital, establish the clinic-to-clinic innovation transformation system, accelerate thetechnical R&D and product transformation related to the digital human body, regenerative medicine, medicine and engineeringinnovation and transformation center, and steadily promote the life science and technology industry base and innovation center
BOE Technology Group Co., Ltd. Annual Report 2019
project in Chengdu and Beijing.X Communications with the Investment Community such as Researches, Inquiries andInterviews
1. During the Reporting Period
√ Applicable □ Not applicable
| Date | Way of communication | Type of communication party | Index to main information communicated |
| 17 January 2019 | One-site visit | Institution |
| 21 January 2019 | One-site visit | Institution | |
| 22 January 2019 | One-site visit | Institution | |
| 15 February 2019 | One-site visit | Institution | |
| 25 February 2019 | One-site visit | Institution | |
| 25 February 2019 | One-site visit | Institution | |
| 26 March 2019 | One-site visit | Institution | |
| 24 May 2019 | One-site visit | Institution | |
| 24 July 2019 | One-site visit | Institution | |
| 27 August 2019 | One-site visit | Institution | Main contents: 1. The interim performance in 2019, and the main situations of the industry 2. Main operating information of the Company 3. Innovations of technology and products For details, see www.cninfo.com.cn |
| 4 September 2019 | One-site visit | Institution | |
| 12 September 2019 | One-site visit | Institution | |
| 25 September 2019 | One-site visit | Institution | |
| 25 September 2019 | One-site visit | Institution | |
| 26 September 2019 | One-site visit | Individual | |
| 31 October 2019 | By phone | Institution | Main contents: 1. The performance in the third quarter of 2019 of the Company, and the main situations of the industry 2. Main operating information of the Company 3. Innovations of technology and products For details, see www.cninfo.com.cn |
| 1 November 2019 | One-site visit | Institution | |
| 4 November 2019 | One-site visit | Institution | |
| 6 November 2019 | One-site visit | Institution | |
| 8 November 2019 | One-site visit | Institution | |
| 12 November 2019 | One-site visit | Institution | |
| 14 November 2019 | One-site visit | Institution | |
| 19 November 2019 | One-site visit | Institution | |
| 20 November 2019 | One-site visit | Institution | |
| 22 November 2019 | One-site visit | Institution |
BOE Technology Group Co., Ltd. Annual Report 2019
| 2 December 2019 | One-site visit | Institution | ||
| 3 December 2019 | One-site visit | Institution | ||
| 4 December 2019 | One-site visit | Institution | ||
| 4 December 2019 | One-site visit | Individual | ||
| 9 December 2019 | One-site visit | Institution | ||
| 10 December 2019 | One-site visit | Institution | ||
| 11 December 2019 | One-site visit | Institution | ||
| 13 December 2019 | One-site visit | Institution | ||
| 16 December 2019 | By phone | Institution | ||
| 16 December 2019 | By phone | Institution | ||
| 18 December 2019 | One-site visit | Institution | ||
| 20 December 2019 | One-site visit | Institution | ||
| 26 December 2019 | By phone | Institution | ||
| 26 December 2019 | By phone | Institution | ||
| 26 December 2019 | By phone | Institution | ||
| Times of visit | 41 | |||
| Number of visiting institutions | 552 | |||
| Number of visiting individuals | 2 | |||
| Number of other visitors | 0 | |||
| Significant undisclosed information disclosed, revealed or leaked | No | |||
BOE Technology Group Co., Ltd. Annual Report 2019
Part V Significant Events
I Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)How the profit distribution policy, especially the cash dividend policy, for ordinary shareholders was formulated, executed or revisedin the Reporting Period:
□ Applicable √ Not applicable
The profit distributions to ordinary shareholders, either in the form of cash or stock, in the past three years (including the ReportingPeriod) are summarized as follows:
For 2017, based on the total shares of 34,798,398,763, the Company distributed, with the undistributed profit, a cash dividend ofRMB0.50 (tax inclusive) per 10 shares to all its shareholders, with the total distributed amount reaching RMB1,739,919,938.15. Andno bonus share was granted, nor was any capital reserve converted into share capital.For 2018, based on the total shares of 34,798,398,763, the Company distributed, with the undistributed profit, a cash dividend ofRMB0.30 (tax inclusive) per 10 shares to all its shareholders, with the total distributed amount reaching RMB1,043,951,962.89. Andno bonus share was granted, nor was any capital reserve converted into share capital.For 2019, based on the total shares of 34,798,398,763, the Company planned to distribute, with the undistributed profit, a cashdividend of RMB0.20 (tax inclusive) per 10 shares to all its shareholders, with the total distributed amount reachingRMB695,967,975.26. And no bonus share was granted, nor was any capital reserve converted into share capital.Cash dividend for ordinary shareholders in the past three years (including the Reporting Period):
Unit: RMB
| Year | Cash dividends (tax inclusive) (A) | Net profit attributable to ordinary shareholders of the listed company in consolidated statements for the year (B) | A as % of B (%) | Cash dividends in other forms (such as share repurchase) (C) | C as % of B (%) | Total cash dividends (including those in other forms) (D) | D as % of B (%) |
| 2019 | 695,967,975.26 | 1,918,183,400 | 36.27% | 0.00 | 0.00% | 695,967,975.26 | 37.38% |
| 2018 | 1,043,951,962.89 | 3,435,127,975.00 | 30.39% | 0.00 | 0.00% | 1,043,951,962.89 | 30.39% |
| 2017 | 1,739,919,938.15 | 7,567,682,493.00 | 22.99% | 0.00 | 0.00% | 1,739,919,938.15 | 22.99% |
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for the ordinary shareholders despite thefacts that the Company has made profits in the Reporting Period and the profits of the Company as the parent distributable to theordinary shareholders are positive.
□ Applicable √ Not applicable
II Final Dividend Plan for the Reporting Period
√ Applicable □ Not applicable
BOE Technology Group Co., Ltd. Annual Report 2019
| Bonus shares for every 10 shares (share) | 0 |
| Dividend for every 10 shares (RMB) (tax inclusive) | 0.2 |
| Additional shares to be converted from capital reserve for every 10 shares (share) | 0 |
| Total shares as the basis for the profit distribution proposal (share) | 34,798,398,763 |
| Cash dividends (RMB) (tax inclusive) | 695,967,975.26 |
| Cash dividends in other forms (such as share repurchase) (RMB) | 0.00 |
| Total cash dividends (including those in other forms) (RMB) | 695,967,975.26 |
| Attributable profit (RMB) | 4,795,142,710.00 |
| Total cash dividends (including those in other forms) as % of total profit distribution (%) | 100% |
| Cash dividend policy adopted | |
| If the Company is in a growth stage and has any plan for significant expenditure, in profit distribution, the proportion of cash dividends shall be 20% or above. | |
| Details about the proposal for profit distribution and converting capital reserve into share capital | |
| Based on the total shares of 34,798,398,763, the Company planned to distribute a cash dividend of RMB0.20 (tax inclusive) per 10 shares to the shareholders, with no share dividend converted either from retained earnings or from capital reserves. The said proposal is in compliance with the Company’s Articles of Association and relevant approval procedure, and the independent directors have expressed their independent opinion on the proposal, which fully protects the legal rights and interests of the minority investors. | |
III Fulfillment of Commitments
1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as wellas the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Where there had been an earnings forecast for an asset or project and the Reporting Period was stillwithin the forecast period, explain why the forecast has been reached for the Reporting Period.
□ Applicable √ Not applicable
IV Occupation of the Company’s Capital by the Controlling Shareholder or Its RelatedParties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
BOE Technology Group Co., Ltd. Annual Report 2019
V Explanations Given by the Board of Directors, the Supervisory Board and the IndependentDirectors (if any) Regarding the Independent Auditor's “Modified Opinion” on the FinancialStatements of the Reporting Period
□ Applicable √ Not applicable
VI YoY Changes to Accounting Policies, Estimates and Methods
√ Applicable □ Not applicable
(a) Presentation of financial statementsThe Group prepared 2019 financial statements and adjusted the data in the Reporting Period according to Notes of Revising andPrinting the Format of 2019 General Enterprises Financial Statement (CK [2019] No. 6) issued by the Ministry of Finance in April2019, and Notes of Revising and Printing the Format of Consolidated Financial Statement (CK [2019] No. 16) issued in September.(b) Non-monetary assets exchangeThe Ministry of Finance issued the Notes of Revising and Printing the Accounting Standards for Business Enterprises No. 7-Non-monetary Assets Exchange (CK [2019] No. 8) in May 2019. The Group started to implement from 10 June 2019 and adjustedthe non-monetary exchange occurred from 1 January 2019 to the date of enforcement of the standards according to the standards.(c) Debt restructuringThe Ministry of Finance issued the Notes of Revising and Printing the Accounting Standards for Business Enterprises No. 12- DebtRestructuring (CK [2019] No. 9) in May 2019. The Group started to implement from 17 June 2019 and there was no adjustment tothe debt restructuring occurred from 1 January 2019 to the date of enforcement of the standards.(d) Financial instrumentsThe Ministry of Finance revised and issued the Accounting Standards for Business Enterprises No. 22-Recognition and Measurementof Financial Instruments (revised), Accounting Standards for Business Enterprises No.23-Transfer of Financial Assets (revised),Accounting Standards for Business Enterprises No.24-Hedge Accounting (revised) and Accounting Standards for BusinessEnterprises No.37-Presentation of Financial Instruments (revised) (collectively referred to as “new standards governing financialinstruments”) in 2017. The Group started to implement the abovementioned amendment of the accounting standards to adjust therelevant content regarding the accounting policy.VII Retrospective Restatements due to Correction of Material Accounting Errors in theReporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.VIII YoY Changes to the Scope of the Consolidated Financial Statements
√ Applicable □ Not applicable
On 21 January 2019, Fuzhou BOE Display Technology Co., Ltd. (hereinafter referred to as “Fuzhou BOE Display”) signed theAgreement of Concerted Action with Fuqing Urban Construction and Investment Group Co., Ltd. and Fuzhou Urban Constructionand Investment Group Co., Ltd., under which, various parties agreed to be the persons acting in concert as suggested by the Company,and irrevocably exercise the right to vote based on the Company’s opinions without reserve. From the day on, the Company shallhave the right to control Fuzhou BOE Display, and included it into the consolidation scope since 22 March 2019.
BOE Technology Group Co., Ltd. Annual Report 2019
IX Engagement and Disengagement of Independent AuditorCurrent independent auditor
| Name of the domestic independent auditor | KPMG Huazhen (LLP) |
| The Company’s payment to the domestic independent auditor (RMB’0,000) | 1,035 |
| How many consecutive years the domestic independent auditor has provided audit service for the Company | 15 years |
| Names of the certified public accountants from the domestic independent auditor writing signatures on the auditor’s report | Zhanghuan and Chai Jing |
| How many consecutive years the certified public accountants from the domestic independent auditor have provided audit service for the Company | Zhanghuan 3 years and Chai Jing 1 years |
| Name of the foreign independent auditor (if any) | N/A |
| The Company’s payment to the foreign independent auditor (RMB’0,000) (if any) | N/A |
| How many consecutive years the foreign independent auditor has provided audit service for the Company (if any) | N/A |
| Names of the certified public accountants from the foreign independent auditor writing signatures on the auditor’s report (if any) | N/A |
| How many consecutive years the certified public accountants from the foreign independent auditor have provided audit service for the Company (if any) | N/A |
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
□ Yes √ No
Independent auditor, financial advisor or sponsor engaged for internal control audit
□ Applicable √ Not applicable
X Possibility of Listing Suspension or Termination after Disclosure of this Report
□ Applicable √ Not applicable
BOE Technology Group Co., Ltd. Annual Report 2019
XI Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Major Legal Matters
BOE Technology Group Co., Ltd. Annual Report 2019
√ Applicable □ Not applicable
| General information | Involved amount (RMB’0,000) | Provision | Progress | Decisions and effects | Execution of decisions | Disclosure date | Index to disclosed information |
| Disputes case of sales contract that BOE Technology (HK) Limited sued LeTV Mobile Intelligent Information Technology (Beijing) Co., Ltd, LeTV Holdings (Beijing) Co., Ltd., Le Sai Mobile Technology (Beijing) Co., Ltd. and Mr. JiaYueting | 28,471.43 | No | Beijing High People’s Court has made the first instance judgment on 19 February 2020. BOE Technology (HK) Limited received the appellate petition submitted by the defendant LeTV Holdings (Beijing) Co., Ltd. to the court on 17 March 2020. | The first instance judgment result: I. The defendant (LETV Mobile Intelligent Information Technology (Beijing) Co., Ltd.) shall pay the plaintiff (BOE Technology (HK) Limited) the owed principal USD36,940,476.77 and the resulting interests (regarding the principal USD12,871,274.5 as the interest basis from 8 September 2016 to 1 March 2017, USD12,144,001.77 from 2 March 2017 to the actual payment day, USD16,172,935 from 13 October 2016 to the actual payment day, USD8,488,690 from 10 November 2016 to the actual payment day, and US134,850 from 8 December 2016 to the actual payment day; the annual interest rate shall be 6% (365 days) ), as well as the liquidated damages (regarding the principal USD2,052,248.71 as the basis from 30 April 2017 to 1 July 2017, USD2,052,248.71 from May 31, 2017 to July 1, 2017, USD2,052,248.71 from 30 June 2017 to 1 July 2017, and USD36,940,476.77 from July 2, 2017 to the actual payment day; the penalty standard was 0.03% per day); under the Installment Payment Agreement within 10 days after the judgment took effect; II. The defendant LETV Holdings (Beijing) Co., Ltd. shall burden the joint and several guarantee for the debt owed by LETV Mobile Intelligent Information Technology (Beijing) Co., Ltd. Defined in the judgment (Item I); III. After the Defendant LETV Holdings (Beijing) Co., Ltd. burdens the joint and several guarantee related to Item II, LETV Holdings (Beijing) Co., Ltd. shall have the right to claim compensation from LETV Mobile Intelligent Information Technology (Beijing) Co., Ltd.; IV. The defendant (LETV Mobile Intelligent Information Technology (Beijing) Co., Ltd.) shall pay the plaintiff (BOE Technology (HK) Limited) the owed principal USD2,459,090.91 and the resulting interests (regarding the principal USD2,459,090.91 as the interest basis from 27 May 2017 to 19 August 2019 with the PBC’s benchmark interest rate for loan during the same period as the standard; | N/A | 29 August 2017; 24 April 2018; 28 August 2018; 26 March 2019; 27 August 2019. | For details, see Interim Report 2017 of BOE Technology Group Co., Ltd., 2017 Annual Report, of BOE Technology Group Co., Ltd., Interim Report 2018 of BOE Technology Group Co., Ltd., 2018 Annual Report, of BOE Technology Group Co., Ltd. and Interim Report 2019 of BOE Technology Group Co., Ltd. disclosed on www.cninfo.com.cn. |
BOE Technology Group Co., Ltd. Annual Report 2019
| USD2,459,090.91 from 20 August 2019 to the actual payment day with the quoted interest rate of the loan market issued by the national inter-bank offer center as the standard; the year shall have 365 days) under the Purchase Order with the goods payment USD2.75 million; V. Other claims of the plaintiff (BOE Technology (HK) Limited) shall be rejected. If the Defendant LETV Mobile Intelligent Information Technology (Beijing) Co., Ltd. and LETV Holdings (Beijing) Co., Ltd. fails to fulfill their payment obligation as scheduled in the judgment, the Defendant shall pay the double debt interests during the delayed period according to Article 253 of Civil Procedure Law of the People’s Republic of China. On 17 March 2020, BOE Technology (HK) Limited received the petition for appeal submitted by LETV Holdings (Beijing) Co., Ltd. to the court. Now, the court’s notice is pending. | |||||||
| Litigations for 2019 (including carryforwards in previous years ) | 9,925.2 | No | N/A | N/A | N/A | N/A | N/A |
XIII Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.XIV Credit Quality of the Company as well as Its Controlling Shareholder and Actual Controller
□ Applicable √ Not applicable
XV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
BOE Technology Group Co., Ltd. Annual Report 2019
XVI Major Related-Party Transactions
1. Continuing Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Other Major Related-Party Transactions
√ Applicable □ Not applicable
NaughtIndex to the public announcements about the said related-party transactions disclosed
| Title of public announcement | Disclosure date | Disclosure website |
| Announcement on the Prediction of 2019 Annual Routine Connected Transaction | 26 March 2019 | www.cninfo.com.cn |
BOE Technology Group Co., Ltd. Annual Report 2019
XVII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major Guarantees
√ Applicable □ Not applicable
(1) Guarantees
BOE Technology Group Co., Ltd. Annual Report 2019
Unit: RMB'0,000
| Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries) | ||||||||
| Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| N/A | ||||||||
| Guarantees provided by the Company as the parent for its subsidiaries | ||||||||
| Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Hefei XinSheng Optoelectronics Technology Co., Ltd. | 14 August 2014 | 1,290,597 | 15 January 2015 | 572,355 | Joint-liability | 6 January 2014 to 6 January 2022 | Not | Not |
| Ordos YuanSheng Optoelectronics Co., Ltd. | 30 November 2016 | 551,155 | 15 March 2017 | 360,000 | Joint-liability | 17 March 2017 to 17 March 2025 | Not | Not |
| Chengdu BOE Optoelectronics Technology Co., Ltd. | 25 April 2017 | 2,312,984 | 30 August 2017 | 1,911,028 | Joint-liability | 6 September 2017 to 6 September 2027 | Not | Not |
| Chengdu BOE Optoelectronics Technology Co., Ltd. | 25 April 2017 | 450,000 | 30 August 2017 | 171,950 | Joint-liability | Opening date of the letter of guarantee to 31 July 2023 | Not | Not |
| Chongqing BOE Optoelectronics Technology Co., Ltd. | 14 August 2014 | 1,478,413 | 29 September 2014 | 727,885 | Joint-liability | 5 November 2014 to 5 November 2022 | Not | Not |
| Hefei BOE Display Technology Co., Ltd. | 1 December 2016 | 1,701,474 | 30 August 2017 | 1,543,721 | Joint-liability | 7 September 2017 to 7 September 2025 | Not | Not |
| Fuzhou BOE Optoelectronics Technology Co., Ltd. | 10 December 2015 | 1,348,340 | 8 November 2016 | 1,175,946 | Joint-liability | 19 December 2016 to 19 December 2024 | Not | Not |
BOE Technology Group Co., Ltd. Annual Report 2019
| Fuzhou BOE Optoelectronics Technology Co., Ltd. | 10 December 2015 | 300,000 | 8 November 2016 | 132,000 | Joint-liability | Opening date of the letter of guarantee to 28 December 2023 | Not | Not |
| Mianyang BOE Optoelectronics Co., Ltd. | 18 May 2018 | 2,134,116 | 18 September 2018 | 1,615,244 | Joint-liability | 26 September 2018 to 26 September 2028 | Not | Not |
| Mianyang BOE Optoelectronics Co., Ltd. | 18 May 2018 | 460,000 | 22 June 2018 | 180,000 | Joint-liability | Opening date of the letter of guarantee to 31 October 2027 | Not | Not |
| Wuhan BOE Optoelectronics Co., Ltd. | 25 March 2019 | 2,028,990 | 23 August 2019 | 771,392 | Joint-liability | 23 August 2019 to 23 August 2029 | Not | Not |
| Wuhan BOE Optoelectronics Co., Ltd. | 25 March 2019 | 450,000 | N/A | N/A | Joint-liability | Contract not signed yet | Not | Not |
| Total approved line for such guarantees in the Reporting Period (B1) | 2,478,990 | Total actual amount of such guarantees in the Reporting Period (B2) | 915,808 | |||||
| Total approved line for such guarantees at the end of the Reporting Period (B3) | 14,056,067 | Total actual balance of such guarantees at the end of the Reporting Period (B4) | 9,161,522 | |||||
| Guarantees provided between subsidiaries | ||||||||
| Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Guangtai Solar Energy Technology (Suzhou) Co., Ltd. | N/A | 5,450 | 20 December 2017 | 4,716 | Joint-liability | 20 December 2017 to 6 April 2027 | Not | Not |
| Huanda Trading (Hebei) Co., Ltd. | N/A | 14,600 | 24 May 2017 | 10,005 | Joint-liability | 15 June 2017 to 16 January 2029 | Not | Not |
BOE Technology Group Co., Ltd. Annual Report 2019
| Yangyuan Photovoltaic Power Generation (Huanggang) Co., Ltd. | N/A | 4,552 | 11 September 2017 | 4,364 | Joint-liability | 11 September 2017 to 11 September2027 | Not | Not |
| Yaoguang New Energy (Shouguang) Co., Ltd. | N/A | 4,192 | 31 October 2017 | 4,184 | Joint-liability | 31 October 2017 to 31 October 2027 | Not | Not |
| Suzhou Industrial Park Taijing Photovoltaic Co., Ltd. | N/A | 3,484 | 1 December 2017 | 3,464 | Joint-liability | 1 December 2017 to 1 December 2027 | Not | Not |
| Qingmei Solar Energy Technology (Lishui) Co., Ltd. | N/A | 4,678 | 21 December 2017 | 4,658 | Joint-liability | 21 December 2017 to 21 December 2027 | Not | Not |
| Qinghong Solar Energy Technology (Jinhua) Co., Ltd. | N/A | 2,374 | 21 December 2017 | 2,354 | Joint-liability | 21 December 2017 to 21 December 2027 | Not | Not |
| Qinghui Solar Energy Technology (Jinhua) Co., Ltd. | N/A | 3,666 | 15 December 2017 | 1,435 | Joint-liability | 15 December 2017 to 15 December 2027 | Not | Not |
| Hefei Hexu Technology Co., Ltd. | N/A | 538 | 18 May 2018 | 528 | Joint-liability | 18 May 2018 to 10 May 2028 | Not | Not |
| Hefei Chenneng Technology Co., Ltd. | N/A | 1,068 | 18 May 2018 | 1,058 | Joint-liability | 18 May 2018 to 10 May 2028 | Not | Not |
| Rongke New Energy (Hefei) Co., Ltd. | N/A | 1,400 | 18 December 2017 | 1,382 | Joint-liability | 18 December 2017 to 18 December 2029 | Not | Not |
| Tianchi New Energy (Hefei) Co., Ltd. | N/A | 1,100 | 18 December 2017 | 1,082 | Joint-liability | 18 December 2017 to 18 December 2029 | Not | Not |
| Qinghao Solar Energy Technology (Jinhua) Co., Ltd. | N/A | 890 | 18 December 2017 | 844 | Joint-liability | 18 December 2017 to 18 December 2029 | Not | Not |
| Xiangqing Solar Energy Technology (Dongyang) Co., Ltd | N/A | 3,476 | 18 December 2017 | 2,797 | Joint-liability | 18 December 2017 to 18 December 2029 | Not | Not |
| Qingyue Solar Energy Technology (Wuyi) Co., Ltd | N/A | 960 | 18 December 2017 | 773 | Joint-liability | 18 December 2017 to 18 December 2029 | Not | Not |
BOE Technology Group Co., Ltd. Annual Report 2019
| Qingyou Solar Energy Technology (Longyou) Co., Ltd | N/A | 2,210 | 18 December 2017 | 2,119 | Joint-liability | 18 December 2017 to 18 December 2029 | Not | Not |
| Qingfan Solar Energy Technology (Quzhou) Co., Ltd | N/A | 1,855 | 18 December 2017 | 1,493 | Joint-liability | 18 December 2017 to 18 December 2029 | Not | Not |
| Anhui BOE Energy Investment Co., Ltd | N/A | 13,575 | 27 December 2017 | 12,876 | Joint-liability | 27 December 2017 to 27 December 2029 | Not | Not |
| Taihang Electric Power Technology (Ningbo) Co., Ltd | N/A | 600 | 19 December 2017 | 450 | Joint-liability | 19 December 2017 to 18 December 2025 | Not | Not |
| Guoji Energy (Ningbo) Co., Ltd. | N/A | 2,740 | 19 December 2017 | 2,121 | Joint-liability | 19 December 2017 to 18 December 2025 | Not | Not |
| Hongyang Solar Energy Power Generation (Anji) Co., Ltd. | N/A | 3,500 | 14 December 2017 | 2,897 | Joint-liability | 14 December 2017 to 13 December 2025 | Not | Not |
| Ke’en Solar Energy Power Generation (Pingyang) Co., Ltd. | N/A | 2,400 | 14 December 2017 | 1,858 | Joint-liability | 14 December 2017 to 13 December 2025 | Not | Not |
| Dongze Photovoltaic Power Generation (Wenzhou) Co., Ltd. | N/A | 2,100 | 14 December 2017 | 1,626 | Joint-liability | 14 December 2017 to 13 December 2025 | Not | Not |
| Aifeisheng Investment and Management (Wenzhou) Co, Ltd. | N/A | 1,400 | 14 December 2017 | 1,084 | Joint-liability | 14 December 2017 to 13 December 2025 | Not | Not |
| Hengchuang New Energy Technology (Hong’an) Co., Ltd. | N/A | 6,892 | 31 January 2018 | 6,495 | Joint-liability | 31 January 2018 to 31 January 2030 | Not | Not |
| Anhui BOE Energy Investment Co., Ltd. | N/A | 2,060 | 25 April 2018 | 1,993 | Joint-liability | 25 April 2018 to 10 March 2030 | Not | Not |
| Junlong New Energy Technology (Huaibin) Co., Ltd. | N/A | 8,459 | 25 April 2018 | 8, 182 | Joint-liability | 25 April 2018 to 10 March 2030 | Not | Not |
| Shaoxing Guangnian New Energy Co., Ltd. | N/A | 16,000 | 13 December 2018 | 15,936 | Joint-liability | 13 December 2018 to 12 December 2030 | Not | Not |
BOE Technology Group Co., Ltd. Annual Report 2019
| Shaoxing Xuhui New Energy Co., Ltd. | N/A | 4,500 | 13 December 2018 | 4,482 | Joint-liability | 13 December 2018 to 12 December 2030 | Not | Not |
| BOE Technology (HK) Limited | N/A | 110,199 | 31 October 2017 | 110,199 | Pledge | 12 December 2017 to 7 December 2020 | Not | Not |
| Hefei BOE Hospital Co., Ltd. | 27 April 2018 | 130,000 | 27 April 2018 | 76,000 | Joint-liability | 27 April 2018 to 26 April 2033 | Not | Not |
| Total approved line for such guarantees in the Reporting Period (C1) | 0 | Total actual amount of such guarantees in the Reporting Period (C2) | -1,702 | |||||
| Total approved line for such guarantees at the end of the Reporting Period (C3) | 360,918 | Total actual balance of such guarantees at the end of the Reporting Period (C4) | 293,454 | |||||
| Total guarantee amount (total of the three kinds of guarantees above) | ||||||||
| Total guarantee line approved in the Reporting Period (A1+B1+C1) | 2,478,990 | Total actual guarantee amount in the Reporting Period (A2+B2+C2) | 914,106 | |||||
| Total approved guarantee line at the end of the Reporting Period (A3+B3+C3) | 14,416,985 | Total actual guarantee balance at the end of the Reporting Period (A4+B4+C4) | 9,454,976 | |||||
| Total actual guarantee amount (A4+B4+C4) as % of the Company’s net assets | 99.47% | |||||||
| Of which: | ||||||||
| Balance of guarantees provided for shareholders, actual controller and their related parties (D) | 0 | |||||||
| Balance of debt guarantees provided directly or indirectly for obligors with an over 70% debt/asset ratio (E) | 172,553 | |||||||
| Amount by which the total guarantee amount exceeds 50% of the Company’s net assets (F) | 4,702,070 | |||||||
| Total of the three amounts above (D+E+F) | 4,702,070 | |||||||
BOE Technology Group Co., Ltd. Annual Report 2019
| Joint responsibilities possibly borne or already borne in the Reporting Period for undue guarantees (if any) | N/A |
| Provision of external guarantees in breach of the prescribed procedures (if any) | N/A |
Compound guarantees:
None.
BOE Technology Group Co., Ltd. Annual Report 2019
(2) Irregularities in Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Overviews of cash entrusted for wealth management during the Reporting Period
Unit: RMB'0,000
| Specific type | Capital resources | Amount incurred | Undue balance | Overdue amount |
| Bank financial products and structured deposit | Self-owned funds | 695,800 | 695,800 | 0 |
| Total | 695,800 | 695,800 | 0 | |
Note: Amount incurred refers to the maximum balance of cash entrusted for wealth management in the single day during theReporting PeriodParticulars of entrusted cash management with single significant amount or low security, bad liquidity, and no capital preservation
□ Applicable √ Not applicable
Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment forentrusted asset management
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVIII Corporate Social Responsibility (CSR)
1. Measures Taken to Fulfill CSR Commitment
BOE discloses its Corporate Social Responsibility Report every year. As of 2019, BOE had consecutively disclosed SocialResponsibility Report for 10 years. Please view and download such report via official website of BOE www.boe.com.
BOE Technology Group Co., Ltd. Annual Report 2019
2. Measures Taken for Targeted Poverty Alleviation
(1) Plans
In response to the national targeted poverty alleviation policy, BOE will carry forward the non-profit educational projects, such asincluding “Light up Your Growth”, “Dream Space”, and “Summer Camp with Dream” with educational poverty alleviation as thedirection, as well as popularized the medical and health knowledge and helped the poor and sick by relying on the advantages andaccumulation of smart medicine & engineering integration business.
(2) Summary of the Related Work Done in the Reporting Period
In 2019, BOE donated RMB1.5 million to China Voluntary Service Fund for education, culture, public welfare program, and etc.With regard to educational poverty alleviation, BOE put RMB455,024 to subsidize the poor students, and improve educationalresources in the poor areas. For example, BOE carried forward various educational poverty alleviation projects, like “Light up YourGrowth”, “Summer Camp with Dream” and “Rain and Dew Plan”, etc. In terms of the health poverty alleviation, in 2019, Hefei BOEHospital Co., Ltd. donated RMB1 million to the Red Cross of Anhui to help the patients with cataract and diabetes in the wholeprovince; additionally, BOE launched a series of volunteer health examination and voluntary clinics aimed at poverty-stricken area .in terms of voluntary services, BOE continued to set up voluntary service system covering all entities, among which BOE hasimplemented donations and assistant activities for about 180 times this year, and donated 6,007kg of worn clothes and second-handbooks. BOE volunteers practiced what they preached to actively help the vulnerable groups and spread love and faith.
(3) Results
| Indicator | Measurement unit | Quantity/Progress |
| 1. General results | —— | —— |
| Of which: 1. Capital | RMB’0,000 | 229.5 |
| 2. Itemized results | —— | —— |
| 1. Out of poverty by employment transfer | —— | —— |
| Of which: 1.1 Investment in vocational training | RMB’0,000 | 0 |
| 1.2 Number of vocational training participators | Person | 0 |
| 1.3 Number of persons out of poverty which were helped to set up file card | Person | 552 |
| 2. Out of poverty by education | —— | —— |
| Of which: 4.1 Invested amounts to subsidize poor students | RMB’0,000 | 45.5 |
| 4.2 Number of poor students subsidized | Person | 829 |
| 3. Health poverty alleviation | —— | —— |
| Of which: 5.1 Investment in health resources in poverty-stricken area | RMB’0,000 | 100 |
| 9. Other items | —— | —— |
| Of which: 9.1 Numbers of items | Number | 12 |
| 9.2 Invested amounts | RMB’0,000 | 84 |
| 9.3. Number of persons out of poverty which were helped to set up file card | Person | 0 |
BOE Technology Group Co., Ltd. Annual Report 2019
| 3. Accolades received (for what and at what level) | —— | —— |
(4) Subsequent Plans
In 2020, BOE will continuously carry forward the educational poverty alleviation project focused on “Light up Your Growth”,carrying out summer camp activities, materials support, and voluntary activities, etc, taking the location of BOE production line asthe main place to carry out these activities and gradually expand coverage scale of projects; additionally, by relying on theadvantages and accumulation of smart medicine & engineering integration business, BOE will carry out new projects on healthpoverty alleviation to help poor patients; meanwhile, taking the BOE employees volunteers system as the platform to continuouslyconduct activities of helping the poor and various donations.
3. Issues Related to Environmental Protection
Indicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by the environmental protectionauthorities.Yes
| Name of polluter | Name of major pollutants | Way of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration | Discharge standards implemented | Total discharge (t) | Approved total discharge | Excessive discharge |
| Beijing BOE Optoelectronics Technology Co., Ltd. | COD | Standard emission after being treated by sewage treatment system | 2 | South gate of factory, northwest corner of factory | 137 mg/L | 500mg/L | 324.014t | 828.418t | None |
| Ammonia nitrogen | 7.8 mg/L | 45mg/L | 18.656t | 59.173t | |||||
| The 4.5th generation TFT-LCD production line of Chengdu BOE Optoelectronics Technology Co., Ltd. | COD | Standard emission after being treated by sewage treatment system | 1 | North side of factory | 123.96mg/L | 500mg/L | 129.77t | 490.51t | None |
| Ammonia nitrogen | 16.94mg/L | 45mg/L | 17.73t | 25.249t | |||||
| Hefei BOE | COD | Standard | 1 | Northwest | 46.41mg/L | 380mg/L | 186.54t | 1059t | None |
BOE Technology Group Co., Ltd. Annual Report 2019
| Optoelectronics Technology Co., Ltd. | Ammonia nitrogen | emission after being treated by sewage treatment system | corner of factory | 3.11mg/L | 30mg/L | 13.99t | 99.2t | ||
| Beijing BOE Display Technology Co., Ltd. | COD | Standard emission after being treated by sewage treatment system | 1 | East gate of factory | 152.25mg/L | 500mg/l | 810.31t | 1618.8t | None |
| Ammonia nitrogen | 13.81mg/L | 45mg/l | 73.29t | 134.4t | |||||
| COD | 1 | South gate of dormitory area | 41.33mg/L | 500mg/l | 4.83t | 80.76t | None | ||
| Ammonia nitrogen | 9.39mg/L | 45mg/l | 1.02t | 6.06t | |||||
| Hefei Xinsheng Optoelectronics Technology Co., Ltd. | COD | Standard emission after being treated by sewage treatment system | 1 | Northeast gate of factory | 65mg/L | 380mg/L | 332.02t | 1621.97t | None |
| Ammonia nitrogen | 14.65mg/L | 30mg/L | 84.69t | 128.08t | |||||
| Erdos Yuansheng Optoelectronics Co., Ltd. | COD | Standard emission after being treated by sewage treatment system | 1 | North side of factory | 46.6mg/L | 500mg/L | 102.78t | 713.81t | None |
| Ammonia nitrogen | 1.97mg/L | - | 4.44t | 76.82t | |||||
| The 6th generation flexible AMOLED production line of Chengdu BOE Optoelectronics Technology Co., Ltd. | COD | Standard emission after being treated by sewage treatment system | 1 | North side of factory | 18.88mg/L | 500mg/L | 73.89t | 2213.78t | None |
| Ammonia nitrogen | 1.14mg/L | 45 mg/L | 4.46t | 214.4t | |||||
| Chongqing | COD | Standard | 1 | South side of | 109.86 mg/L | 400mg/L | 534.864t | 727.080t | None |
BOE Technology Group Co., Ltd. Annual Report 2019
| BOE Optoelectronics Technology Co., Ltd. | Ammonia nitrogen | emission after being treated by sewage treatment system | factory | 4.72 mg/L | 30 mg/L | 22.948t | 79.424t | ||
| Hefei BOE Display Technology Co., Ltd. | COD | Standard emission after being treated by sewage treatment system | 1 | North side of factory | 49.71mg/L | 400mg/L | 462.91t | 1189.88t | None |
| Ammonia nitrogen | 8.08mg/L | 35mg/L | 75.24t | 118.98t | |||||
| Fuzhou BOE Optoelectronics Technology Co., Ltd. | COD | Standard emission after being treated by sewage treatment system | 1 | Northeast side of factory | 71.94 mg/L | 500mg/L | 385.90t | 510.35t | None |
| Ammonia nitrogen | 0.85 mg/L | 45mg/L | 4.53t | 68.05t | |||||
| Mianyang BOE Optoelectronics Technology Co., Ltd. | COD | Standard emission after being treated by sewage treatment system | 1 | North side of factory | 41mg/L | 500mg/L | 128.78t | 8990.82t | None |
| Ammonia nitrogen | 1.18mg/L | 45mg/L | 3.71t | 809.17t | |||||
| BOE Technology Group Co., Ltd. | COD | Standard emission after being treated by sewage treatment system | 1 | East side of factory | 64mg/L | 500mg/L | 1.23t | 11.114t | None |
| Ammonia nitrogen | 17mg/L | 45mg/L | 0.33t | 0.341t | |||||
| BOE (Heibei) Mobile Display Technology Co., Ltd. | COD | Discharged into sewage treatment plant through municipal | 2 | Southeast side of factory | 14mg/L | 500mg/L | 0.632t | 13.554t | None |
| Ammonia nitrogen | Southeast side of factory | 1.11mg/L | 45mg/L | 0.05t | 1.01t | ||||
| COD | North side of factory | 136mg/L | 500mg/L | 18.427t | 74.937t |
BOE Technology Group Co., Ltd. Annual Report 2019
| Ammonia nitrogen | pipes | North side of factory | 25.3mg/L | 45mg/L | 3.428t | 6.744t |
Construction of pollution prevention equipment and operation conditionDuring report period, the Company did not have important environmental problem. The Company built strict environmentalmanagement system, and established internal organizational structure to supervise overall environmental performance of theCompany, formulated environmental management regulations and targets, carried out regular supervision for the environmentalmanagement condition of subordinate enterprises to promote the implementation of environmental management work.Currently, the waste water which is generated by each subordinate enterprise of the Company can be divided in to industrial wastewater and household waste water. Rain water-waste water shunting system is adopted for drainage system to drain water separatelyaccording to different natures. After collecting, the rain water is discharged into rain water pipeline of factory; after the rain water iscollected by rain water pipe network, the rain water is discharged. After being treated by sewage treatment system in factory,industrial waste water is discharged into sewage treatment factory through municipal pipe network for intense treatment. Householdwaste water comprises household fecal waste water and canteen oily waste water etc, after pretreatment, the waste water isdischarged into municipal sewage treatment factory. All industrial and household waste water is not discharged directly, and theconcentration and total amount of drainage satisfy the requirements of national and local relevant standards.In additional, the exhaust gas which is emitted by each subordinate enterprise mainly comes from technology exhaust gas duringproduction process, generally including general exhaust gas, acid exhaust gas, alkaline exhaust gas, special exhaust gas and organicexhaust gas etc. Various exhaust gas can be emitted after being treated by independent emission treatment system. The emissionconcentration and total amount satisfy the national and local relevant standards.“4R concept” for the use of materials has been used by the Company since 2007, that is recycle (Recycle), reduction (Reduce),renewal (Renew) and responsibility (responsibly). The Company promises that the used materials are all in accordance withrequirements of national relevant environmental regulations and the registration, assessment, permission and restriction system ofchemicals. In additional, the Company promotes the recycle of package materials constantly. The waste materials which aregenerated by each subordinate enterprise can be divided into general industrial solid waste, hazardous waste materials and householdwaste materials, and they all handed over to qualified recycler for regular treatment.The Company focuses on the recycle of water resource and advanced cleaning methods such as adverse cleaning etc are adopted forprocessing equipment. Most high purity water and chemicals are recycled, reducing the consumption of high purity water, chemicaland other materials maximally and reducing the discharge of waste water and waste materials.At present, each subordinate enterprise formulates various management methods such as water pollution management, air pollutionmanagement standard, hazardous waste materials management standard, energy management standard etc. The methods specify theoperation and maintenance regulations and requirements of pollutant treatment system, establish regular monitoring and supervisingmechanism, in order to ensure the continuous stable operation of each system.In recent years, the environmental emission index of the Company is up to national standards such as Sewage ComprehensiveDischarge Standard, Air Pollutant Comprehensive Emission Standard, Industrial Enterprise Environmental Noise Emission Standardwithin Factory Boundary, etc and local standards. The Company will continue to promote the environmental management, devote toforging green factory and improve environmental management level constantly.Environmental Impact Assessment on Construction Project and Other Administrative Licenses for Environmental ProtectionAt present, corresponding environmental impact assessments have been conducted for all construction projects under the control ofthe Company in conformity with applicable national and local laws and regulations, and corresponding administrative licenses havealso been obtained.Contingency Plan for Emergent Environmental IncidentsThe Company has formulated and filed corresponding contingency plan for emergent environmental incidents in the environmentalprotection agency according to relevant local requirements. However, such contingency plan consists of comprehensive plan, special
BOE Technology Group Co., Ltd. Annual Report 2019
plan and on-site disposal plan, and involves various aspects such as waste water, exhaust gas, hazardous wastes and dangerouschemicals etc. Meanwhile, drills must be conducted regularly.Self-monitoring PlanCurrently, major pollutant-discharging units subordinated to the Company have worked out corresponding self-monitoring planaccording to relevant requirements put forward by the local environmental protection agency. The self-monitoring plans respectivelyformulated by Beijing BOE Display Technology Co., Ltd. and Beijing BOE Optoelectronics Technology Co., Ltd. have beenpublished via the company’s official website.Other environment information that should be disclosed: NoOther related environment protection information: No
XIX Other Significant Events
√ Applicable □ Not applicable
1. The corporate bonds (Phase I) of BOE Technology Group Co., Ltd. issued to public qualified investors from 21 March 2016 to 22March 2016 reached 3 full years by 21 March 2019. According to regulations, the interest should be paid once per year during theinterest-bearing period. According to relevant put provisions stipulated in Raising Instruction Book on the Public-issued CorporationBonds (Phase I) by the Company to Qualified Investors in 2016, the Company respectively issued The First Advisory Notice on theNon-adjustment “16BOE01” Corporate Bonds Nominal Interest Rate and the Investor Put-back Implementation Measures(No.2019-001), The Second Advisory Notice on the Non-adjustment “16BOE01” Corporate Bonds Nominal Interest Rate and theInvestor Put-back Implementation Measures (No.2019-003) and The Third Advisory Notice on the Non-adjustment “16BOE01”Corporate Bonds Nominal Interest Rate and the Investor Put-back Implementation Measures (No.2019-004) on 31 January 2019, 1February 2019 and 12 February 2019. Within the put-back registration period, the investors could wholly or partially sell their“16BOE01” shares back to the Company with the put price at RMB100/piece (excluding the interest). According to correspondingdata provided by CSDC Shenzhen, the put-back quantity of “16BOE01” was 96,705,976, and the put-back amount reachedRMB9,975,221,424.40 (including the interest). The remaining quantity subject to the trusteeship was 3,294,024. On 14 March 2019,the Company disclosed 2019 “16BOE01” Interest Payment Announcement (No.2019-009). The interest payment scheme should beRMB31.5 (taxes included) paid to every 10 bonds. On 21 March 2019 was the day for paying the declared put-back funds andinterests, and the Company paid corresponding put-back principal and current interests to the validly-declared put-back “16BOE01”bond holder. On 28 March 2019, the Company held the first bonds holder meeting in 2019 for the 2016 corporate bonds. At thismeeting, The Proposal on Advance Payment of 2016 Corporate Bonds of BOE was reviewed and approved, and on 29 March 2019,The Announcement on the First Bonds Holder Meeting Resolution in 2019 for 2016 Corporate Bonds (No. 2019-022) was issued. On3 April 2019, the Company paid corresponding interests of “16BOE01” bonds incurred from 21 March 2019 to 2 April 2019.However, the delisting date was on 3 April 2019 and the interest payment and claims registration day was on 2 April 2019. From theday 3 April 2019 on, “16BOE01” bonds were delisted and relevant transactions were discontinued via SZSE.
2. The Company issued Pre-disclosure Announcement on Stock Reduction of Shareholders with More than 5% Stocks(Announcement No.: 2019-007) and Pre-disclosure Announcement on Stock Reduction of Shareholders with More than 5% Stocks(Announcement No.: 2019-008) on 6 March 2019 respectively; shareholders of the Company as Hefei Jianxiang Investment Co., Ltd.and Chongqing Ezcapital Opto-electronics Industry Investment Co., Ltd. planned to reduce no more than 1.00% of general capital ofthe Company by means of centralized competitive bidding within 3 months after 15 working days since the issuance of eachAnnouncement. Aforementioned stock reduction plans were completed by 26 June 2019.
3. The Company issued Announcement on 2018 Implementation of Annual Interest Distribution (Announcement No. 2019-030) on25 May 2019. The annual interest distribution plan 2018 was reviewed and adopted in 2018 Annual General Meeting held on 26April 2019. According to the distribution plan, the Company shall allocated annual corporate benefits in 2018 by means of RMB0.3for every 10 shares (where, the B-share benefit distribution shall be completed with Hong Kong dollar as per conversion rate from
BOE Technology Group Co., Ltd. Annual Report 2019
RMB to HKD published by People’s Bank of China on the first working day after Shareholders Meeting of the Company) withoutdistributing bonus share or transferring shares in the name of public reserve funds.
4. The Company disclosed the Announcement on Resolutions of the 1
stExtraordinary General Meeting of 2019 (Announcement No.:
2019-037), Announcement on Resolutions of the 1
st Meeting of the 9
thBoard of Directors (Announcement No.: 2019-039) andAnnouncement on Resolutions of the 1
st Meeting of the 9
thSupervisory Committee (Announcement No.: 2019-040) on 29 June 2019.Those meetings reviewed and approved proposals related to the general election and the general election has been completed. Fordetails, please refer to relevant announcements.
5. On 18 October 2019, the Company disclosed the Announcement on the Company’s Application for CSRC’s Approval for itsPublic Issue of Renewable Corporate Bonds (Announcement No. 2019-052), and the Company received the No. [2019] 1801Approval from CSRC. Based on the approval, the Company could publicly issue the renewable corporate bonds with the nominalvalue no more than RMB30 billion to qualified investors. On October 29, 2019, the Company disclosed the Announcement on theResult of Public Issue of Renewable Corporate Bonds (to Qualified Investors) (the First Issue) in 2019 (No. 2019-057), and theperiod during which the Company publicly issued renewable corporate bonds (to qualified investors) (the first issue) (“19BOEY1”for short; Code: 112741) was from 28 October 2019 to 29 October 2019. However, the issuing scale was RMB8 billion, and thebonds’ ultimate nominal interest rate was 4.0%.
6. The Company’s wholly-owned subsidiary BOE Technology (HK) Limited filed a lawsuit on the sales contract dispute to thesuperior people’s court in Beijing, and the defendants included LETV Mobile Intelligent Information Technology (Beijing) Co., Ltd.(hereinafter referred to as “LETV Mobile”), LETV Holdings (Beijing) Co., Ltd., Le Sai Mobile Technology (Beijing) Co., Ltd. andJia Yueting with the claimed amount of USD41.84 million in total. However, Beijing Municipal Superior People’s Court respectivelyissued the Notice of Acceptance and the Civil Ruling Paper on Property Preservation on July 6, 2017 and July 31, 2017. LETVMobile ever put forward the jurisdiction objection to Beijing Municipal Superior People’s Court, which was rejected, and thenlaunched a lawsuit on the judgment of the jurisdiction objection to the Supreme People’s Court. Finally, the Supreme People’s Courtmade the final ruling, rejected the appeal of LETV Mobile and affirmed the original judgment. On 8 March 2019, the first hearingwas held in Beijing Municipal Superior People’s Court. On 19 February 2020, Beijing Municipal Superior People’s Court issued thefirst instance judgment:
I. The defendant (LETV Mobile Intelligent Information Technology (Beijing) Co., Ltd.) shall pay the plaintiff (BOE Technology (HK)Limited) the owed principal USD36,940,476.77 and the resulting interests (regarding the principal USD12,871,274.5 as the interestbasis from 8 September 2016 to 1 March 2017, USD12,144,001.77 from 2 March 2017 to the actual payment day, USD16,172,935from October 13, 2016 to the actual payment day, USD8,488,690 from November 10, 2016 to the actual payment day, andUS134,850 from 8 December 2016 to the actual payment day; the annual interest rate shall be 6% (365 days)), as well as theliquidated damages (regarding the principal USD2,052,248.71 as the basis from 30 April 2017 to 1 July 2017, USD2,052,248.71from 31 May 2017 to 1 July 2017, USD2,052,248.71 from 30 June 2017 to 1 July 2017, and USD36,940,476.77 from 2 July 2017 tothe actual payment day; the penalty standard was 0.03% per day); under the Installment Payment Agreement within 10 days after thejudgment took effect;II. The defendant LETV Holdings (Beijing) Co., Ltd. shall burden the joint and several guarantee for the debt owed by LETV MobileIntelligent Information Technology (Beijing) Co., Ltd. Defined in the judgment (Item I);III. After the Defendant LETV Holdings (Beijing) Co., Ltd. burdens the joint and several guarantee related to Item II, LETVHoldings (Beijing) Co., Ltd. shall have the right to claim compensation from LETV Mobile Intelligent Information Technology(Beijing) Co., Ltd.;IV. The defendant(LETV Mobile Intelligent Information Technology (Beijing) Co., Ltd.) shall pay the plaintiff (BOE Technology(HK) Limited) the owed principal USD2,459,090.91 and the resulting interests (regarding the principal USD2,459,090.91 as theinterest basis from 27 May 2017 to 19 August 2019 with the PBC’s benchmark interest rate for loan during the same period as thestandard; USD2,459,090.91 from August 20, 2019 to the actual payment day with the quoted interest rate of the loan market issuedby the national inter-bank offer center as the standard; the year shall have 365 days) under the Purchase Order with the goods
BOE Technology Group Co., Ltd. Annual Report 2019
payment USD2.75 million;V. Other claims of the plaintiff (BOE Technology (HK) Limited) shall be rejected.If the defendant LETV Mobile Intelligent Information Technology (Beijing) Co., Ltd. and LETV Holdings (Beijing) Co., Ltd. fails tofulfill their payment obligation as scheduled in the judgment, the Defendant shall pay the double debt interests during the delayedperiod according to Article 253 of Civil Procedure Law of the People’s Republic of China.The litigation fee was RMB1,465,371.63, of which, RMB5,371.63 shall be paid by the plaintiff BOE Technology (HK) Limited(already paid), and RMB1.46 million shall be jointly burdened by LETV Mobile Intelligent Information Technology (Beijing) Co.,Ltd. and LETV Holdings (Beijing) Co., Ltd. (payment within 7 days after the judgment took effect); the preservation fee wasRMB5000, which shall be jointly burdened by LETV Mobile Intelligent Information Technology (Beijing) Co., Ltd. and LETVHoldings (Beijing) Co., Ltd. (payment within 7 days after the judgment took effect).On 17 March 2020, BOE Technology (HK) Limited received the petition for appeal submitted by LETV Holdings (Beijing) Co., Ltd.to the court. Now, the court’s notice is pending. The Company has calculated corresponding bad-debt provision for the accountreceivables equaling the above-mentioned claimed amount according to the accounting standards, which has uncertain influence onthe Company.
| Overview of significant events | Disclosure date | Index to disclosure website for interim report |
| Announcement on Construction of Beijing BOE Life Science and Technology Industrial Base (Phase I) via Investment | 26 March 2019 | www.cninfo.com.cn |
| Announcement on Signature of Cooperation Agreement and Supplemental Agreement (II) about Project of Life Science and Technology Industrial Base | 8 September 2019 | www.cninfo.com.cn |
| Announcement on Signature of Cooperation Agreement of BOE (Suzhou) Life Science and Technology Industrial Base Project Investment | 19 December 2019 | www.cninfo.com.cn |
| Announcement on Construction of Production Line of 12 inch OLED Microdisplay Device via Investment | 27 December 2019 | www.cninfo.com.cn |
XX Significant Events of Subsidiaries
□ Applicable √ Not applicable
BOE Technology Group Co., Ltd. Annual Report 2019
Part VI Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
| Before | Increase/decrease (+/-) | After | |||||||
| Number | Percentage | New issues | Bonus shares | Bonus issue from profit | Other | Subtotal | Number | Percentage | |
| I. Restricted shares | 2,536,393 | 0.01% | 0 | 0 | 0 | -811,632 | -811,632 | 1,724,761 | 0.00% |
| 1. Shares held by the state | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0.00% | |
| 2. Shares held by state-owned corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0.00% | |
| 3. Shares held by other domestic investors | 2,536,393 | 0.01% | 0 | 0 | 0 | -811,632 | -811,632 | 1,724,761 | 0.00% |
| Among which: shares held by domestic corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by domestic individuals | 2,536,393 | 0.01% | 0 | 0 | 0 | -811,632 | -811,632 | 1,724,761 | 0.00% |
| 4. Shares held by foreign investors | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Among which: Shares held by foreign corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by foreign individuals | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| II. Non-restricted shares | 34,795,862,370 | 99.99% | 0 | 0 | 0 | 811,632 | 811,632 | 34,796,674,002 | 100.00% |
| 1. RMB ordinary shares | 33,859,748,882 | 97.30% | 0 | 0 | 0 | 811,632 | 811,632 | 33,860,560,514 | 97.30% |
| 2. Domestically listed foreign shares | 936,113,488 | 2.69% | 0 | 0 | 0 | 0 | 0 | 936,113,488 | 2.69% |
BOE Technology Group Co., Ltd. Annual Report 2019
| 3. Overseas listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 4. Other | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| III. Total shares | 34,798,398,763 | 100.00% | 0 | 0 | 0 | 0 | 0 | 34,798,398,763 | 100.00% |
Reasons for share changes:
√ Applicable □ Not applicable
The Company accomplished the change in the term of office on 28 June 2019. Restrictions on trading of shares totaling 879,657 shares held by former directors, supervisors and seniormanagement were relieved. 75% of shares held by new directors, supervisors and senior management were transferred to restricted shares totaling 68,025 shares. The lock-in shares of seniormanagement decreased 811,632 shares.Approval of share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchase:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the Company’s ordinary shareholders and other financial indicators of the prior year and theprior accounting period, respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
√ Applicable □ Not applicable
Unit: Share
BOE Technology Group Co., Ltd. Annual Report 2019
| Name of the shareholders | Restricted shares amount at the period-begin | Restricted shares increased of the period | Restricted shares relieved of the period | Restricted shares amount at the period-end | Restricted reasons | Restricted shares relieved date |
| Shares locked by senior executives | 2,536,393 | 68,025 | 879,657 | 1,724,761 | Change the term of office | - |
| Total | 2,536,393 | 68,025 | 879,657 | 1,724,761 | -- | -- |
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□ Applicable √ Not applicable
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
□ Applicable √ Not applicable
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III Shareholders and Actual Controller
1. Total Number of Shareholders and Their Shareholdings
Unit: share
BOE Technology Group Co., Ltd. Annual Report 2019
| Number of ordinary shareholders at the Period-end | 1,224,363 (including 1,184,812 A-shareholders and 39,551 B-shareholders) | Number of ordinary shareholders at the month-end prior to the disclosure of this Report | 1,541,954 (including 1,501,699 A-shareholders and 40,255 B-shareholders) | ||||||
| 5% or greater shareholders or top 10 shareholders | |||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total shares held at the period-end | Increase/decrease in the Reporting Period | Restricted shares held | Unrestricted shares held | Shares in pledge or frozen | ||
| Status | Shares | ||||||||
| Beijing State-owned Capital Operation and Management Center | State-owned legal person | 11.68% | 4,063,333,333 | 0 | 0 | 4,063,333,333 | N/A | 0 | |
| Hefei Jianxiang Investment Co., Ltd. | State-owned legal person | 7.21% | 2,510,142,953 | 0 | 0 | 2,510,142,953 | N/A | 0 | |
| Chongqing Ezcapital Opto-electronics Industry Investment Co., Ltd. | State-owned legal person | 5.81% | 2,020,734,641 | -632,265,400 | 0 | 2,020,734,641 | N/A | 0 | |
| Hong Kong Securities Clearing Company Ltd. | Foreign legal person | 3.82% | 1,328,335,605 | 845,127,240 | 0 | 1,328,335,605 | N/A | 0 | |
| Beijing Yizhuang Investment Holdings Co., Ltd | State-owned legal person | 2.63% | 915,758,000 | -325,665,641 | 0 | 915,758,000 | N/A | 0 | |
| Beijing BOE Investment & Development Co., Ltd. | State-owned legal person | 2.36% | 822,092,180 | 0 | 0 | 822,092,180 | N/A | 0 | |
| Beijing Electronics Holdings Co., Ltd. | State-owned legal person | 0.79% | 273,735,583 | 0 | 0 | 273,735,583 | N/A | 0 | |
| GCAMC-ICBC-Generali China-Selected Stock No.18 Asset Management Product | Domestic non-state-owned legal person | 0.72% | 249,251,600 | 249,251,600 | 0 | 249,251,600 | N/A | 0 | |
BOE Technology Group Co., Ltd. Annual Report 2019
| Central Huijin Assets Management Co., Ltd | State-owned legal person | 0.71% | 248,305,300 | 0 | 0 | 248,305,300 | N/A | 0 | |
| GCAMC-ICBC-Generali China-Silk Road No.1 Asset Management Product | Domestic non-state-owned legal person | 0.63% | 218,095,100 | 218,095,100 | 0 | 218,095,100 | N/A | 0 | |
| Strategic investors or general corporations becoming top-ten shareholders due to placing of new shares (if any) (see Note 3) | Naught | ||||||||
| Related or acting-in-concert parties among the shareholders above | 1. Beijing State-owned Capital Operation and Management Center held 100% equities of Beijing Electronics Holdings Co., Ltd. 2. Beijing Electronics Holdings Co., Ltd. held 66.25% equities of Beijing BOE Investment & Development Co., Ltd. and was its controlling shareholder. 3. After the non-public issuing of BOE in 2014, Hefei Jianxiang Investment Co., Ltd. and Chongqing Ezcapital Opto-electronics Industry Investment Co., Ltd, by entering into Implementation Protocol of Voting Right respectively, agreed to maintain all of the shares held by them respectively unanimous with Beijing BOE Investment & Development Co., Ltd. when executing the voting rights of the shareholders. 4. After the non-public issuing of the Company in 2014, Beijing State-owned Capital Operation and Management Center handed over 70% of the shares directly held by it to Beijing Electronics Holdings Co., Ltd. for management through Stock Management Protocol, and Beijing Electronics Holdings Co., Ltd. gained the incidental shareholders’ rights except for disposing right and usufruct of the shares, of which the rest 30% voting right maintained unanimous with Beijing Electronics Holdings Co., Ltd. through the agreement according to Implementation Protocol of Voting Right. 5. Except for the above relationships, the Company does not know any other connected party or acting-in-concert party among the top 10 shareholders. | ||||||||
| Shareholdings of the top ten unrestricted shareholders | |||||||||
| Name of shareholder | Number of unrestricted shares held at the period-end | Shares by type | |||||||
| Type | Shares | ||||||||
| Beijing State-owned Capital Operation and Management Center | 4,063,333,333 | RMB ordinary share | 4,063,333,333 | ||||||
| Hefei Jianxiang Investment Co., Ltd. | 2,510,142,953 | RMB ordinary share | 2,510,142,953 | ||||||
BOE Technology Group Co., Ltd. Annual Report 2019
| Chongqing Ezcapital Opto-electronics Industry Investment Co.,Ltd. | 2,020,734,641 | RMB ordinary share | 2,020,734,641 |
| Hong Kong Securities Clearing Company Ltd. | 1,328,335,605 | RMB ordinary share | 1,328,335,605 |
| Beijing Yizhuang Investment Holdings Co., Ltd | 915,758,000 | RMB ordinary share | 915,758,000 |
| Beijing BOE Investment & Development Co., Ltd. | 822,092,180 | RMB ordinary share | 822,092,180 |
| Beijing Electronics Holdings Co., Ltd. | 273,735,583 | RMB ordinary share | 273,735,583 |
| GCAMC-ICBC-Generali China-Selected Stock No.18 Asset Management Product | 249,251,600 | RMB ordinary share | 249,251,600 |
| Central Huijin Assets Management Co., Ltd | 248,305,300 | RMB ordinary share | 248,305,300 |
| GCAMC-ICBC-Generali China-Silk Road No.1 Asset Management Product | 218,095,100 | RMB ordinary share | 218,095,100 |
| Related or acting-in-concert parties among top 10 unrestricted public shareholders, as well as between top 10 unrestricted public shareholders and top 10 shareholders | 1. Beijing State-owned Capital Operation and Management Center held 100% equities of Beijing Electronics Holdings Co., Ltd. 2. Beijing Electronics Holdings Co., Ltd. held 66.25% equities of Beijing BOE Investment & Development Co., Ltd. and was its controlling shareholder. 3. After the non-public issuing of BOE in 2014, Hefei Jianxiang Investment Co., Ltd. and Chongqing Ezcapital Opto-electronics Industry Investment Co., Ltd., by entering into Implementation Protocol of Voting Right respectively, agreed to maintain all of the shares held by them respectively unanimous with Beijing BOE Investment & Development Co., Ltd. when executing the voting rights of the shareholders. 4. After the non-public issuing of the Company in 2014, Beijing State-owned Capital Operation and Management Center handed over 70% of the shares directly held by it to Beijing Electronics Holdings Co., Ltd. for management through Stock Management Protocol, and Beijing Electronics Holdings Co., Ltd. gained the incidental shareholders’ rights except for disposing right and usufruct of the shares, of which the rest 30% voting right maintained unanimous with Beijing Electronics Holdings Co., Ltd. through the agreement according to Implementation Protocol of Voting Right. 5. Except for the above relationships, the Company does not know any other connected party or acting-in-concert party among the top 10 shareholders. | ||
| Top 10 ordinary shareholders involved in securities margin trading (if any) (see note 4) | The shares held by Beijing Yizhuang Investment Holdings Co., Ltd. in the Company decreased by 11,113,800 shares due to engaging in securities financing. | ||
BOE Technology Group Co., Ltd. Annual Report 2019
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during the ReportingPeriod.
□ Yes √ No
No such cases in the Reporting Period.
BOE Technology Group Co., Ltd. Annual Report 2019
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a local state-owned legal personType of the controlling shareholder: legal person
| Name of controlling shareholder | Legal representative/person in charge | Date of establishment | Unified social credit code | Principal activity |
| Beijing Electronics Holdings Co., Ltd. | Wang Yan | 8 April 1997 | 91110000633647998H | Operation and management of state-owned assets within authorization; communications equipments, audio & visual products for broadcasting and television,computer and its supporting equipments and the applied products, electronic raw material and components, home electric appliances and electronic products, electronic surveying instruments and meters, mechanical and electric equipments, electronic transportation products and investment in business fields other than electronics and its management, development of real estate, lease and sales of commodity apartments, property management. (The company shall independently choose business items and carry out business activities according to law. For items requiring approval according to law, the company must obtain approval from related authorities before carrying out the |
BOE Technology Group Co., Ltd. Annual Report 2019
| business activities. The company shall not engage in business activities that are banned and restricted in the municipal industrial policies.) | ||
| Controlling shareholder’s holdings in other listed companies at home or abroad in the Reporting Period | Beijing Electronic Shareholding Co., Ltd. held 508,801,304 shares of A share of Electronic City (Stock Code: 600658), which was of 45.49% of the total shares amount of Electronic City; it held 51,983,223 shares of A share of NAURA Technology Group Co., Ltd. (original Beijing Sevenstar Electronics Co., Ltd. ) (Stock Code: 002371), which accounted for 10.59% of the total shares of NAURA Technology Group Co., Ltd. Beijing Electronic Shareholding Co., Ltd. held 178,175,721 shares of A share of NAURA Technology Group Co., Ltd. through holding the wholly-owned subsidiary Beijing Seven Star Huadian Technology Group Co., Ltd, which covered 38.90% of the total shares amount of NAURA Technology Group Co., Ltd. Beijing Electronic Shareholding Co., Ltd. held 50,610,116 shares of A shares of BAIC BluePark New Energy Technology Co.,Ltd. (Stock Code: 600733), which accounted for 1.45% of the total shares of BAIC BluePark New Energy Technology Co.,Ltd. | |
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
BOE Technology Group Co., Ltd. Annual Report 2019
3. Actual Controller and Its Acting-in-Concert Parties
Nature of the actual controller: Local institution for state-owned assets managementType of the actual controller: legal person
| Name of actual controller | Legal representative/person in charge | Date of establishment | Unified social credit code | Principal activity |
| Beijing Electronics Holdings Co., Ltd. | Wang Yan | 8 April 1997 | 91110000633647998H | Operation and management of state-owned assets within authorization; communications equipments, audio & visual products for broadcasting and television, computer and its supporting equipments and the applied products, electronic raw material and components, home electric appliances and electronic products, electronic surveying instruments and meters, mechanical and electric equipments; electronic transportation products and investment in business fields other than electronics and its management, development of real estate, lease and sales of commodity apartments, property management. (The company shall independently choose business items and carry out business activities according to law. For items requiring approval according to law, the company must obtain approval from related authorities before carrying out the business activities. The company shall not engage in business activities that are banned and restricted in the municipal industrial policies.) |
BOE Technology Group Co., Ltd. Annual Report 2019
| Other listed companies at home or abroad controlled by the actual controller in the Reporting Period | Beijing Electronic Shareholding Co., Ltd. held 508,801,304 shares of A share of Electronic City (Stock Code: 600658), which was of 45.49% of the total shares amount of Electronic City; it held 51,983,223 shares of A share of NAURA Technology Group Co., Ltd. (original Beijing Sevenstar Electronics Co., Ltd. ) (Stock Code: 002371), which accounted for 10.59% of the total shares of NAURA Technology Group Co., Ltd. Beijing Electronic Shareholding Co., Ltd. held 178,175,721 shares of A share of NAURA Technology Group Co., Ltd. through holding the wholly-owned subsidiary Beijing Seven Star Huadian Technology Group Co., Ltd, which covered 38.90% of the total shares amount of NAURA Technology Group Co., Ltd. |
Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
BOE Technology Group Co., Ltd. Annual Report 2019
Ownership and control relations between the actual controller and the Company:
Notes: 1. Beijing Intelligent Kechuang Technology Development Co., Ltd. (Intelligent Kechuang) is used as a platform for theCompany to implement equity incentives for its core technical and managerial personnel, who are the 20 nominal shareholders ofIntelligent Kechuang. The ratios of their capital contributions to Intelligent Kechuang do not represent their actual equity percentage.The equities of Intelligent Kechuang are jointly owned by the awardees of the Company’s equity incentive plans. The capitalcontribution ratios of the said 20 people are as follows: Wang Dongsheng 20%, Jiang Yukun 10%, Liang Xinqing 10%, ZhaoCaiyong 6.667%, Shi Dong 6.667%, Chen Yanshun 6.667%, Song Ying 6.667%, Han Guojian 6.667%, Gong Xiaoqing 3.333%,Wang Yanjun 3.333%, Wang Jiaheng 3.333%, Liu Xiaodong 3.333%, Ren Jianchang 1.667%, Sun Jiping 1.667%, Zhang Peng
1.667%, Wang Aizhen 1.667%, Mu Chengyuan 1.667%, Xu Yan 1.667%, Hua Yulun 1.667% and Zhong Huifeng 1.667%.
2. When the Company completed a private offering of shares in 2014, Beijing State-Owned Capital Operation and ManagementCenter transferred its 70% stake directly held in the Company to Beijing Electronics Holding Co., Ltd. for managing through aShares Management Agreement, and Beijing Electronics Holding Co., Ltd. obtained the shareholder’s rights other than the disposaland earnings rights attached to the 70% stake; and Beijing State-Owned Capital Operation and Management Center agreed in aVoting Rights Exercise Agreement to align itself with Beijing Electronics Holding Co., Ltd. when exercising its voting rights of theremaining 30% stake directly held by it in the Company.Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.
□ Applicable √ Not applicable
4. Other 10% or Greater Corporate Shareholders
√ Applicable □ Not applicable
BOE Technology Group Co., Ltd. Annual Report 2019
| Name of corporate shareholder | Legal representative/person in charge | Date of establishment | Registered capital | Principal activity |
| Beijing State-owned Capital Management Administrative Center | Zhang Guilin | 30 December 2008 | RMB35,000 million | Investment and investment management; assets management; organize the reorganization as well as the merger and acquisition of the enterprise assets. |
5. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
BOE Technology Group Co., Ltd. Annual Report 2019
Part VII Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
BOE Technology Group Co., Ltd. Annual Report 2019
Part VIII Convertible Corporate Bonds
□ Applicable √ Not applicable
No convertible corporate bonds in the Reporting Period.
BOE Technology Group Co., Ltd. Annual Report 2019
Part IX Directors, Supervisors, Senior Management and StaffI Change in Shareholdings of Directors, Supervisors and Senior Management
| Name | Office title | Incumbent/Former | Gender | Age | Start of tenure | End of tenure | Beginning shareholding (share) | Increase in the Reporting Period (share) | Decrease in the Reporting Period (share) | Other increase/decrease (share) | Ending shareholding (share) |
| Chen Yanshun | Chairman of the Board, Chief of Executive Committee | Incumbent | Male | 54 | 28 June 2019 | 27 June 2022 | 600,000 | 0 | 0 | 0 | 600,000 |
| Pan Jinfeng | Vice Chairman of the Board | Incumbent | Male | 40 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Liu Xiaodong | Vice Chairman of the Board, President, Vice Chairman of Executive Committee | Incumbent | Male | 55 | 28 June 2019 | 27 June 2022 | 250,000 | 0 | 0 | 0 | 250,000 |
| Wang Chenyang | Director | Incumbent | Male | 50 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Song Jie | Director | Incumbent | Male | 52 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
BOE Technology Group Co., Ltd. Annual Report 2019
| Sun Yun | Director, member of Executive Committee, Executive vice president, CFO | Incumbent | Female | 50 | 28 June 2019 | 27 June 2022 | 223,981 | 0 | 0 | 0 | 223,981 |
| Gao Wenbao | Director, member of Executive Committee, Executive vice president, CEO of the Display and Sensor BG | Incumbent | Male | 44 | 28 June 2019 | 27 June 2022 | 90,700 | 0 | 0 | 0 | 90,700 |
| Li Yantao | Director | Incumbent | Male | 38 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Lyu Tingjie | Independent director | Incumbent | Male | 64 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Wang Huacheng | Independent director | Incumbent | Male | 56 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Hu Xiaolin | Independent director | Incumbent | Male | 41 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Li Xuan | Independent director | Incumbent | Male | 51 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Yang Xiangdong | Chairman of the Supervisory Committee | Incumbent | Male | 58 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Xu Tao | Supervisor | Incumbent | Male | 55 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Wei Shuanglai | Supervisor | Incumbent | Male | 52 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
BOE Technology Group Co., Ltd. Annual Report 2019
| Chen Xiaobei | Supervisor | Incumbent | Female | 47 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Shi Hong | Supervisor | Incumbent | Female | 37 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Xu Yangping | Employee supervisor | Incumbent | Male | 45 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| He Daopin | Employee supervisor | Incumbent | Male | 50 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Yan Jun | Employee supervisor | Incumbent | Male | 48 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Teng Jiao | Employee supervisor | Incumbent | Male | 37 | 28 June 2019 | 27 June 2022 | 0 | 0 | 0 | 0 | 0 |
| Yao Xiangjun | Member of Executive Committee, Executive vice president, CEO of the Digital Art IoT Platform BG | Incumbent | Male | 42 | 28 June 2019 | 27 June 2022 | 100,000 | 0 | 0 | 0 | 100,000 |
| Zhang Zhaohong | Member of Executive Committee, Executive vice president, CEO of the Mobile Healthcare IoT Platform BG | Incumbent | Male | 49 | 28 June 2019 | 27 June 2022 | 328,700 | 0 | 0 | 0 | 328,700 |
BOE Technology Group Co., Ltd. Annual Report 2019
| Zhong Huifeng | Member of Executive Committee, Executive vice president, Chief Human Resource Officer | Incumbent | Male | 49 | 28 June 2019 | 27 June 2022 | 150,000 | 0 | 0 | 0 | 150,000 |
| Feng Liqiong | Member of Executive Committee, Executive vice president, lead counsel | Incumbent | Female | 47 | 28 June 2019 | 27 June 2022 | 200,000 | 0 | 0 | 0 | 200,000 |
| Xie Zhongdong | Member of Executive Committee, Senior vice president, Auditor General, Chief Risk Officer | Incumbent | Male | 49 | 28 June 2019 | 27 June 2022 | 200,000 | 0 | 0 | 0 | 200,000 |
| Miao Chuanbin | Member of Executive Committee, vice president, Chief Culture Officer | Incumbent | Male | 46 | 28 June 2019 | 27 June 2022 | 1,800 | 0 | 0 | 0 | 1,800 |
| Liu Hongfeng | Vice president, Secretary of the Board | Incumbent | Male | 41 | 28 June 2019 | 27 June 2022 | 154,500 | 0 | 0 | 0 | 154,500 |
BOE Technology Group Co., Ltd. Annual Report 2019
| Wang Dongsheng | Chairman of the Board | Former | Male | 62 | 20 May 2016 | 28 June 2019 | 299,905 | 0 | 0 | 0 | 299,905 |
| Xie Xiaoming | Vice Chairman of the Board | Former | Male | 60 | 20 May 2016 | 28 June 2019 | 7,680 | 0 | 0 | 0 | 7,680 |
| Zhao Wei | Supervisor | Former | Male | 51 | 20 May 2016 | 28 June 2019 | 0 | 0 | 0 | 0 | 0 |
| Zhuang Haoyu | Supervisor | Former | Male | 35 | 20 May 2016 | 28 June 2019 | 0 | 0 | 0 | 0 | 0 |
| Chen Zhaozhen | Supervisor | Former | Male | 36 | 28 May 2018 | 28 June 2019 | 900 | 0 | 0 | 0 | 900 |
| Dong Youmei | Senior management | Former | Female | 56 | 20 May 2016 | 28 June 2019 | 226,400 | 0 | 0 | 0 | 226,400 |
| Yue Zhanqiu | Senior management | Former | Male | 52 | 20 May 2016 | 28 June 2019 | 220,000 | 0 | 0 | 0 | 220,000 |
| Feng Qiang | Senior management | Former | Male | 43 | 20 May 2016 | 28 June 2019 | 120,000 | 0 | 0 | 0 | 120,000 |
| Yang Anle | Senior management | Former | Male | 49 | 20 May 2016 | 28 June 2019 | 150,000 | 0 | 0 | 0 | 150,000 |
| Tong Guanshan | Senior management | Former | Male | 51 | 20 May 2016 | 28 June 2019 | 0 | 0 | 0 | 0 | 0 |
| Jing Linfeng | Senior management | Former | Male | 41 | 20 May 2016 | 28 June 2019 | 145,000 | 0 | 0 | 0 | 145,000 |
| Total | -- | -- | -- | -- | -- | -- | 3,469,566 | 0 | 0 | 0 | 3,469,566 |
BOE Technology Group Co., Ltd. Annual Report 2019
II Change of Directors, Supervisors and Senior Management
√Applicable □ Not applicable
| Name | Office title | Type of change | Date of change | Reason for change |
| Wang Dongsheng | Chairman of the Board | Left for term expiration | 28 June 2019 | Change the term of office |
| Xie Xiaoming | Vice Chairman of the Board | Left for term expiration | 28 June 2019 | Change the term of office |
| Zhao Wei | Supervisor | Left for term expiration | 28 June 2019 | Change the term of office |
| Zhuang Haoyu | Supervisor | Left for term expiration | 28 June 2019 | Change the term of office |
| Chen Zhaozhen | Supervisor | Left for term expiration | 28 June 2019 | Change the term of office |
| Miao Chuanbin | Employee supervisor | Left for term expiration | 28 June 2019 | Change the term of office |
| Dong Youmei | Senior management | Left for term expiration | 28 June 2019 | Change the term of office |
| Yue Zhanqiu | Senior management | Left for term expiration | 28 June 2019 | Change the term of office |
| Feng Qiang | Senior management | Left for term expiration | 28 June 2019 | Change the term of office |
| Yang Anle | Senior management | Left for term expiration | 28 June 2019 | Change the term of office |
| Tong Guanshan | Senior management | Left for term expiration | 28 June 2019 | Change the term of office |
| Jing Linfeng | Senior management | Left for term expiration | 28 June 2019 | Change the term of office |
| Chen Yanshun | Chairman of the Board | Appointed and dismissed | 28 June 2019 | Change the term of office |
| Pan Jinfeng | Vice Chairman of the Board | Appointed and dismissed | 28 June 2019 | Change the term of office |
| Liu Xiaodong | Vice Chairman of the Board | Appointed and dismissed | 28 June 2019 | Change the term of office |
| Chen Xiaobei | Supervisor | Appointed and dismissed | 28 June 2019 | Change the term of office |
| Wei Shuanglai | Supervisor | Appointed and dismissed | 28 June 2019 | Change the term of office |
BOE Technology Group Co., Ltd. Annual Report 2019
| Yan Jun | Employee supervisor | Appointed and dismissed | 28 June 2019 | Change the term of office |
| Teng Jiao | Employee supervisor | Appointed and dismissed | 28 June 2019 | Change the term of office |
| Miao Chuanbin | Senior management | Appointed and dismissed | 28 June 2019 | Change the term of office |
III Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors, supervisors andsenior managementDirectorMr. Chen Yanshun, Master of Economics, senior accountant, he had served in the Company from the year of 1993, has taken theposts of Secretary of the Board of the 1
st Board of Directors of the Company, Secretary of the 2
nd
Board of Directors and VicePresident, Executive Director of the 3
rd Board of Directors and Senior Vice President, Executive Director of the 4
th,
thand the 6
th
Board of Directors and President, and Vice Chairman of the 7
th
Board of Directors and President, Vice Chairman of the 8
th
Board ofDirectors, Chairman of Executive Committee (CEO), and Chairman of the Board of Beijing BOE Vision-electronic Technology Co.,Ltd, Beijing BOE Optoelectronics Technology Co., Ltd, Hefei BOE Optoelectronics Technology Co., Ltd, Ordos YuanshengOptoelectronics Co., Ltd., Chongqing BOE Optoelectronics Technology Co., Ltd. and Hefei Xinsheng Optoelectronics TechnologyCo., Ltd., Director of BOE Health Investment Management Co., Ltd.Now he takes the posts of Chairman of the 9
thBoard of Directors of the Company and Chief of Executive Committee, BOEOptoelectronics Technology Co., Ltd. and BOE Technology (Hong Kong) Co., Ltd., Vice Chairman of Beijing BOE InvestmentDevelopment Co., Ltd. and Chairman of Beijing Kechuang Intelligent Technology Development Co., Ltd.
Mr. Pan Jinfeng, senior management, MBA, senior economist. He once acted as a staff and a staff of Corporate PlanningDepartment of Shanghai Sales Company, the general sales corporation of Beijing Zhaowei Electronics (Group) Co., Ltd., DeputyManager, Manager of Operation Department, Manager of Zhaowei Building Project Department, Assistant of GM, Deputy GM, GMof Zhaowei Industrial Corporation of Beijing Zhaowei Electronics (Group) Co., Ltd. Executive Deputy President of Beijing ZhaoweiElectronics (Group) Co., Ltd., Deputy Secreatry of Party Committee, GM of Beijing Yiheng Electronics Group Co., Ltd., Assistantof GM and Minister of Park Real Estate Department of Beijing Electronics Holding Co., Ltd.Now, he acts as the Vice Chairman of the 9
thBoard of Directors of the Company, Deputy GM of Beijing Electronics Holding Co.,Ltd. & Deputy Chairman of the Board of NAURA Technology Group Co., Ltd., Chairman of the Board of BE New EnergyTechnology (Jiangsu) Co., Ltd., Director of Beijing Electronics Holding & SK Technology Co., Ltd. and Chairman of the Board ofBE Aisite (Jiangsu) Technology Co., Ltd.
Mr. Liu Xiaodong, Bachelor’ degree, Engineer, he ever worked in Research Institute of Beijing Information Optics Apparatus. Hesuccessively took the posts of Director, Deputy General Manager and Secretary of CPC of Beijing Matsushita Color CRT Co., Ltd.,Vice President of the Company and concurrently Director and General Manager of Beijing BOE Optoelectronics Technology Co.,Ltd., Director and General Manager of Hefei BOE Optoelectronics Technology Co., Ltd. Chairman of the Board of Beijing BOEVision-electronic Technology Co., Ltd. and GM of Hefei Xinsheng Optoelectronics Technology Co., Ltd., Deputy Chairman of theBoard of Chongqing BOE Optoelectronics Technology Co., Ltd., President of Beijing BOE Multimedia Science and Technology Co.,Ltd. and Beijing BOE Technology Wisdom Commerce Co., Ltd, Director of the 7
thBoard of Directors, Executive Vice President,COO, Director of the 8
thBoard of Directors, Deputy Chairman of Executive Committee, President & COO of the Company.
BOE Technology Group Co., Ltd. Annual Report 2019
Now he takes the posts of Vice Chairman of the 9
thBoard of Director, President, Deputy Chairman of Executive Committee of theCompany, Chairman of Mianyang BOE Optoelectronics Technology Co., Ltd., Chongqing BOE Display Technology Co., Ltd.,Wuhan BOE Optoelectronics Technology Co., Ltd., Kunming BOE Display Technology Co., Ltd. and Beijing BOE SensorTechnology Co., Ltd., Fuzhou BOE Display Technology Co., Ltd. and Director of TPV Display Technology (China) Co., Ltd.
Mr. Wang Chenyang, Master, senior political division. He has served as division-head level and deputy-bureau level cadre in theGeneral Office of Beijing Municipal Government and Director of the 8
thBoard of Directors of the Company.Now he takes the posts of Director of the 9
thBoard of Directors of the Company and Deputy GM of Beijing State-owned CapitalManagement Center.
Mr. Song Jie, Senior Economist, MBA of Peking University, Countries travelled visiting scholar of University of Sydney from Feb,2005 to Mar. 2006. He once worked as Assistant Engineer of Design Institute Wire Plant of Shougang Corporation, Officer ofProject examination and approval of Beijing Economic and Technological Development Zone Management Committee, Officer ofForeign Investment Service Center, the Director of Yi Da Tong Paging Center, Deputy General Manager of Chinese Human GenomeResearch Center, Beijing (SinoGenoMax Co., Ltd.), Project Manager of East Zone Sewage project of Beijing Yizhuang InvestmentHoldings Co., Limited, Director of the 7
th Board of Directors of the Company, Director of the 8
thBoard of Directors of the Company.Now he is the Director of the 9
th
Board of Directors of the Company, Manager of Department of Investment Development of BeijingYizhuang Investment Holdings Co., Limited.
Ms. Sun Yun, Master of Business, a Senior Accountant. She successively took the posts of Deputy Chief, Chief of FinanceDepartment of the Company, as well as Deputy CFO and Chief Auditor of the Company, Director of the 8
thBoard of Directors.Now she is Director of the 9
th
Board of Directors, Member of Executive Committee, Executive Vice President and CFO of theCompany, Director of Beijing BOE Land Co., Ltd., Director of Beijing Yinghe Century Land Co., Ltd., Director of BOE SmartTechnology Co., Ltd., and Chairman of the Board of BOE Innovation Investment Co., Ltd.
Mr. Gao Wenbao, doctor of MSE. He joined the Company in 2003, and once acted as the section chief and minister of producttechnology division, Deputy Technical Director, Deputy GM in Beijing BOE Optoelectronics Technology Co., Ltd., GM of TPCSBU, GM of Chongqing BOE Optoelectronics Technology Co., Ltd.Now, he acts as the Director of the 9
th
Board of Directors and Member of Executive Committee, Executive Vice President of theCompany, CEO of the Display and Sensor BG, Executive Director & Chairman of the Board in BOE Varitronix Co., Ltd.
Mr. Li Yantao, Master Degree Candidate, MBA in Financial Accounting of Tsinghua University-Chinese University of Hong Kong,Intermediate Economist, PMP. He once worked as an engineer of Module Technology Department and Section Chief of PublicRelations of Administrative Security Department in Beijing BOE Optoelectronics Technology Co., Ltd., Section Chief of TenderApproval of Commerce Group, noviate vice minister of Engineering Cost Control Department and Bidding Contract ManagementSection of Engineering Cost Control Department in Beijing BOE Display Technology Co., Ltd., Secretary of Youth LeagueCommittee, minister of Corporate Culture/Party Work Department of Corporate Culture Centre and Chief of Corporate CultureSection and Group Work Section, Vice Minister (Assistant Director Level) of Planning & Coordination Department and Director ofOffice for Promotion of Major Projects, Minister of Market & New Business Planning Department, Head of Planning &Coordination Centre (Deputy Director Level) and Minister of Market Insight Department, Minister of Strategic Planning Department,Minister of Performance Management Department, Minister of Office for Promotion of Major Projects and Minister of KnowledgeManagement & Training Department in the Company, Director of the 8
th
Directors of the Board of the Company
BOE Technology Group Co., Ltd. Annual Report 2019
Now he serves as the Director of the 9
thDirectors of the Board of the Company, Director of Strategic Development Department ofBeijing Electronics Holdings Co., Ltd., Director and GM of Beijing Electronic Control Industry Investment Co., Ltd., Chairman ofthe Board of Beijing Nuohua Capital Investment Management Co., Ltd. and Director of Office for Promotion of Old Industrial BaseTransformation in Beijing Electronics City.
Independent DirectorMr. Lyu Tingjie, Doctor Degree, Professor and Doctorial Tutor, Assistant, Lecturer, Associate Professor, Professor, Doctorial Tutor,Vice Dean, Standing vice President and President, and Assistant Principal of Beijing University of Posts and Telecommunications.Social part-time job: Executive Director of Union International Telecommunications, Vice Chairman of Information EconomySociety of China, Deputy Director of the Ministry of Education Electronic Commerce Teaching Committee, Standing Director ofChina Institute of Communications (Director of the Communication Management Branch) Standing Director of China Association ofCommunication Enterprises, Standing Director of Chinese Research Council of Technical Economy (Director of CommunicationsTechnology and Economy), Member of Ministry of Industry and Information Science Committee and Telecom Economic ExpertsCommittee. He was once the Independent Director of the 7
th Board of Directors of the Company, Independent Director of the 8
th
Board of Directors of the CompanyNow he is the Independent Director of the 9
thBoard of Directors of the Company. He has been working in Beijing University ofPosts and Telecommunications since May 1985, and he acts as the Independent Director of Gohigh Data Networks Technology Co.,Ltd, Shenzhen Ai Shide Co., Ltd. and China Unicom.
Mr. Wang Huacheng, Doctoral Candidate Degree, Professor Doctoral Supervisor, In July 1985, graduate from Department ofFinance, Renmin University of China, obtained bachelor of economics degree, in July 1988, graduated from Department ofAccounting, Renmin University of China, obtained master's degree in economics, in July 1998, graduated from Department ofAccounting, Renmin University of China, obtained PhD degree. Since September 1988, worked as a teacher in Renmin University ofChina, He successively worked as teaching assistant, lecturer, associate professor, professor, PhD supervisor, social appointments:
Director of the institute of Chinese accounting. He once was the Independent Director of the 7
th
Board of Directors of the Company,Independent Director of the 8
th
Board of Directors of the Company.Now he is the Independent Director of the 9
thBoard of Directors of the Company, Professor of Renmin University of China, HXBand China Railway Construction Corporation Limited.
Mr. Hu Xiaolin, doctor, associate professor of Tsinghua University, artificial intelligence professor, used to be the independentdirector of the 8
thBoard of Directors of the Company.Now he serves as the Independent Director of the 9
thBoard of Directors of the Company, Director of Hubei Bairun MaterialTechnology Co., Ltd., Editorial Board Member of IEEE Transactions on Image Processing and Cognitive Neurodynamics.
Mr. Li Xuan, doctor of laws, associate professor, graduate student tutor. He once worked as the Vice President of School of Law ofCentral University of Finance and Economics, Vice Dean of Public Decision Research Center of China University of PoliticalScience and Law, Executive Member of Lawyer Law Study Institute of China Law Society, Independent Director of Beijing Da BeiNong Science and Technology Group Co., Ltd. and China Minzu Securities Co., Ltd., Independent Director of the 8
thBoard ofDirectors of the Company.Now he serves as the Independent Director of the 9
th
board of directors of the Company, Chief of Central University of Finance andEconomics Master of Laws (J.M) Education Center, Executive Dean of Public Policy-Making Research Center of China Universityof Political Science and Law, Deputy Chief of Committee for Social and Legal Affairs of Beijing Municipal Committee of the CDL,
BOE Technology Group Co., Ltd. Annual Report 2019
vice chairman of Case Study Association of China Law Society, Executive Director of Arbitration Law Research Institute of ChinaLaw Society, government legal advisor of State Administration of Coal Mine Safety, Independent Director of China ShengmuOrganic Milk Limited (listed in Hong Kong Exchange) and Independent Supervisor of China National Building Materials CompanyLimited (listed in Hong Kong Exchange), and part-time arbitrator and lawyer.
SupervisorMr. Yang Xiangdong, postgraduate. He once worked as chief of Technology Security Section, minister of Sales Department andminister of Materials Department in Beijing TV Accessories Third Factory, Deputy GM of Beijing Jile Electronics Group Co., Ltd.,Deputy GM of Beijing Sevenstar Electronics Co., Ltd., and Deputy GM of Beijing North Microelectronics Co., Ltd., Chairman ofthe 8thSupervisory Committee (convener),Now he serves as the Chairman of the 9
thSupervisory Committee, assigned full-time Chairman of Supervisory Committee of BeijingElectronics Holdings Co., Ltd., Chairman of Supervisory Committee of Beijing Zhaowei Electronic (Group) Co., Ltd., Chairman ofSupervisory Committee of Beijing Yandong Microelectronics Co., Ltd., Chairman of Supervisory Committee of Beijing Seven StarHuadian Technology Group Co., Ltd., supervisor of Beijing Electronics Holding & SK Technology Co., Ltd., supervisor of BeijingElectronics New Energy Technology (Jiangsu) Co., Ltd. and supervisor of BEST.
Mr. Xu Tao, master degree, Senior Accountant, Minister of Finance Department of Beijing TV Accessories Third Factory, ChiefAccountant and CFO of Beijing Jile Economics Group Co., Ltd, Minister of Finance Department, Head of FinanceDepartment/Settlement Center of Beijing Electronics Holding Co., Ltd. and Supervisor of the 7
th and 8thSupervisory Committee ofthe Company.Currently, he serves as the Supervisor of the 9
thSupervisory Committee of the Company, Director of the Financial Department ofBeijing Electronics Holdings Co., Ltd. and Chairman of the Board of Beijing BOE Investment & Development Co., Ltd.
Mr. Wei Shuanglai, MBA, senior Engineer. He once acted as a staff of Beijing BBEF Electronics Group Co., Ltd., deputy directorof Technology Center, director of General Labor Office, Deputy GM of Beijing BBEF Digital Broadcasting and Television Co., Ltd.,president assistant & minister of Television Department, Executive President & Strategic Director, Deputy GM & ExecutivePresident, Deputy Secretary of Party Committee, Director, GM in Beijing BBEF Science & Technology Co., Ltd., Vice Minister ofTechnology Industry Department, Minister of Market Department, Head of Smart Equipment and System Business Department inBeijing Electronics Holding Co., Ltd. and Deputy GM of Beijing Zhaowei Electronics (Group) Co., Ltd.Now, he acts as the Supervisor of the 9
thSupervisory Committee of the Company, Director of Operation Management Department ofBeijing Electronics Holding Co., Ltd. & Director of Beijing Zhaowei Electronics (Group) Co., Ltd.Beijing BBEF Science & Technology Co., Ltd.
Ms. Chen Xiaobei, bachelor, economist. She once acted as deputy director of general office, director of General Office (PartyCommittee Office), Board Secreatry and Supervisor in Hefei Construction and Investment Holding (Group) Co., Ltd.Now, she acts as the Supervisor of the 9
thSupervisory Committee of the Company, Member of the Party Committee, Director,Deputy GM and Board Secretary in Hefei Construction and Investment Holding (Group) Co., Ltd.
Ms. Shi Hong, Master of Economics, Senior Economist, Supervisor of the 7
thSupervisory Committee of the Company, Supervisor ofthe 8
th
Supervisory Committee of the Company.Now he is the Supervisor of the 9
thSupervisory Committee of the Company, worked as Deputy Manager in Department of InvestmentDevelopment of Beijing Yizhuang Investment Holdings Limited. Member of Investment Decision Committee of China Reform Fund
BOE Technology Group Co., Ltd. Annual Report 2019
Management Co., Ltd. Director of Beijing Jinyuan Jingkai Limited Liability Company for Sewage Treatment and Supervisor ofBeijing Boda Xinyuan House Real Estate Development Co., Ltd..
Mr. Xu Yangping, Master of Civil and Commercial Law. He was former Deputy Minister, Minister of the Company’s LegalDepartment, and Employee Supervisor of the 7
th
Supervisory Committee of the Company, Employee Supervisor of the 8
th
Supervisory Committee of the CompanyNow he acts as Employee Supervisor of the 9
th
Supervisory Committee of the Company, Chief of the Group’s Legal Center, SeniorChief Officer and the Director of Board of Directors of Gaochuang (Suzhou) Electronics Co., Ltd, Director of Beijing BOE EnergyTechnology Co., Ltd., Director of Orient Chengqi (Beijing) Business Technology Co., Ltd., Supervisor of BOE InnovationInvestment Co., Ltd., Supervisor of Beijing BOE Vacuum Electric Appliance Co., Ltd and Beijing BOE Technology DevelopmentCo., Ltd.
Mr. He Daopin, master. He once worked as Production Supervisor, Purchasing Supervisor, Financial Manager, Vice GeneralManager of Beijing Oriental Aristocratic Paper Co., Ltd., Vice General Manager, General Manager of Industrial Gas UnderwritingCompany of Business Department of Park of the Company, Management Representative of Business Department of Park, Chief ofHR and Administrative Department, Chief of Property Department and Chief of Labor Union, Deputy Chief, Chief of Party MassWork Department of the Company, Corporate Cultural Center, Employee Supervisor of the 8
thSupervisory Committee of theCompany,He now serves as Employee Supervisor of the 9
th
Supervisory Committee of the Company, Chairman of Labor Union and Secretaryof Committee for Discipline Inspection of Beijing BOE Display Technology Co., Ltd., Head of the North China Regional CorporateCulture Center & Head of Labor Department of the North China Regional Enterprise Cultural Center, and the deputy head of theNew Business Enterprise Culture / Party Group, Chief of Corporate Culture of the Display and Sensor BG, Chief of CorporateCulture of Beijing BOE Display Technology Co., Ltd. and Vice Chairman of Labor Union of the Group.
Mr. Yan Jun, bachelor. He once acted as the Deputy GM of Beijing Nissin Electronic Precision Components Co., Ltd., Minister ofCorporate Culture/Party Affairs Department, Chairman of Labor Union in Chongqing BOE Optoelectronics Technology Co., Ltd. andDeputy Director of General Office of the Group.Now he acts as the Employee Supervisor of the 9
th
Supervisory Committee, Deputy Head of Corporate Culture Center, DeputySecreatry of Discipline and Inspection Committee, Deputy Chairman of Labor Union in the Company.
Mr. Teng Jiao, bachelor of Administration. He once acted as the Deputy Minister of Planning and Finance Department, Minister ofPerformance Analysis of the Company and Minister of Accounting Department of Beijing BOE Display Technology Co., Ltd.Now, he acts as the Employee Supervisor of the 9
th
Supervisory Committee, Head of Finance Organization Accounting TaxationCenter, Senior Director of the Company, Director of Beijing Asahi Electronic Materials Co., Ltd., Beijing BOE Vacuum Electric Co.,Ltd., Beijing BOE Special Display Technology Co., Ltd., Director of Beijing BOE Matsushita Color CRT Innovation Co., Ltd.,Hefei BOE Hospital Co., Ltd., Chengdu BOE Hospital Co., Ltd., Suzhou BOE Hospital Co., Ltd. and Suzhou BOE InformationTechnology Co., Ltd.
Senior ManagementMr. Yao Xiangjun, MBA, Chinese CPA. He once worked as Minister and Chief Inspector of Financing Departmentof the Company, CFO of Hefei BOE Optoelectronics Technology Co., Ltd., Director of Business Planning Center, ChiefStrategic Officer of the Company, CEO of Intelligent System Business Group.
BOE Technology Group Co., Ltd. Annual Report 2019
Now he serves as member of Executive Committee, Executive Vice President and CEO of the Digital Art IoT Platform BG of theCompany, Director of SES-imgotag, and Chairman of the Board of Beijing BOE Living Technology Co., Ltd., Beijing BOE YiyunTechnology Co., Ltd., and BOE Smart Retail (Hong Kong) Co., Limited.
Mr. Zhang Zhaohong, bachelor of inorganic nonmetallic materials, engineer. He joined in the Company in 1992, he once worked asChairman of the Board of Beijing BOE Optoelectronics Technology Co., Ltd., Chengdu BOE Optoelectronics Technology Co., Ltd.,Hefei BOE Optoelectronics Technology Co., Ltd., Beijing BOE Display Technology Co., Ltd., Erdos Yuansheng Optoelectronics Co.,Ltd., Fuzhou BOE Optoelectronics Technology Co., Ltd. and BOE (Hebei) Mobile Display Technology Co., Ltd., Director of WuhanBOE Optoelectronics Technology Co., Ltd., GM of Beijing BOE Display Technology Co., Ltd., Chinese GM of Beijing Asahi GlassCo., Ltd., GM of Chengdu BOE Optoelectronics Technology Co., Ltd. and Chief Executive Officer of BOE Display Device BusinessGroup.Now he serves as the member of Executive Committee, Executive Vice President and CEO of the Mobile Healthcare IoT PlatformBG, Chairman of the Board of BOE Health Investment Management Co., Ltd., and Vice President of Beijing BOE SensorTechnology Co., Ltd.
Mr. Zhong Huifeng, Master Degree, awarded certification on Secretary of the Board of Shenzhen Stock Exchange. He ever tookposts of Securities Affairs Representative and Manager of Security Department of the 2
nd
Board of Directors, Secretary to the Boardof the 3
rd, 4th and 5
th Board of Directors of the Company, Employee Supervisor of the 6
th
Supervisory Committee and EmployeeSupervisor of the 7
th
Supervisory Committee, Supervisor of Beijing Orient Top Victory Electronics Co., Ltd.. and Vice Secretary ofthe CPC, Secretary of Discipline Inspection Commission and Principal of Labor Union of the Company, member of the ThirdNational Committee of China’s Defense of Posts and Telecommunications Union.Now he acts as member of Executive Committee, Executive Vice President and CHO of the Company, President of BOE Universityand Director of Beijing BOE Investment Development Co., Ltd.
Ms. Feng Liqiong, Bachelor Degree and Lawyer of the Company, she has served as Senior Vice President and Minister of LegalAffairs Department of the Company, and as Secretary of the 5
th and 6thBoard of Directors.Now she is member of Executive Committee, Executive Vice President, Chief Counsel and Director of Beijing BOE Land Co., Ltd.and Beijing Yinghe Science & Century Technology Development Co., Ltd.
Mr. Xie Zhongdong, Master, CIA. He has ever taken posts of Deputy Chief of Basic Construction Office in the Yi-Shu-Si WaterConservancy Administration of Huaihe Water Resources Commission under the Ministry of Water Resource of P.R.C, Chief andDeputy Auditor of Auditing & Supervision Division of the Company, Vice Chief and Chief of Auditing & Supervision Division ofBeijing BOE Optoelectronics Technology Co., Ltd.Now he acts as member of Executive Committee, Senior Vice President, Chief Audit Officer and Chief Risk Control Officer of theCompany, Vice President of Beijing Internal Audit Association, Supervisor of Beijing BOE Optoelectronics Technology Co., Ltd.,Beijing BOE Display Technology Co., Ltd., Erdos Yuansheng Optoelectronics Co., Ltd., Chongqing BOE OptoelectronicsTechnology Co., Ltd., Hefei BOE Optoelectronics Technology Co., Ltd., Chengdu BOE Optoelectronics Technology Co., Ltd.,Chongqing BOE Display Technology Co., Ltd., Beijing BOE Sensor Technology Co., Ltd., Beijing BOE Video Technology Co., Ltd.,Gaochuang (Suzhou) Electronics Co., Ltd., Hefei BOE Video Technology Co., Ltd. and BOE Health Investment Management Co.,Ltd.
Mr. Miao Chuanbin, Master degree, once worked as Manager of Market Department Beijing Wireless Power Plant PutaiTechnology Company, Secretary of Party Committee Work Department and Deputy Secretary of Beijing Wireless Power Plan,
BOE Technology Group Co., Ltd. Annual Report 2019
Deputy General Manager of Beijing Ether-led Electronic Group Co., Ltd., Secretary of Party Committee Work Department,Enterprise Minister of Culture of Beijing Electronics Holdings Co., Ltd, Employee Supervisor of the 7
thSupervisory Committee ofthe Company, Employee Supervisor of the 8
thSupervisory Committee of the Company,.Now he is the member of Executive Committee, vice president, CCO of the Company, Deputy Secretary of CPC, Secretary of theCommission for Discipline Inspection, Union Chairman of the Company, Deputy Chairman of Beijing Industry (National Defense)Labor Union, member of Beijing Electronic Union and member of the Commission for Discipline Inspection in Beijing ElectronicsHolding Co., Ltd.
Mr. Liu Hongfeng, master. He once worked as the Deputy Chief of the Finance Department of the Company, the Deputy Chief andChief of the BOD Office, the Securities Representative and the Secretary of the 7
thBoard of the Company.Now he is a vice president and the Secretary of the 9
th
Board of Directors of the Company, as well as a director of Beijing NissinElectronics Precision Component Co., Ltd. and Supervisor of Beijing Yinghe Century Land Co., Ltd.
Offices held concurrently in shareholding entities:
√Applicable □Not applicable
| Name | Shareholding entity | Office held in the shareholding entity | Start of tenure | End of tenure | Remuneration or allowance from the shareholding entity |
| Pan Jinfeng | Beijing Electronics Holdings Co., Ltd. | Vice GM | 22 January 2016 | -- | Yes |
| Wang Chenyang | Beijing State-owned Capital Management Center | Vice GM | 19 November 2014 | -- | Yes |
| Song Jie | Beijing Yizhuang Investment Holdings Limited | Manager of Investment Development Department | 23 August 2018 | -- | Yes |
| Li Yantao | Beijing Electronics Holdings Co., Ltd. | Minister of Strategic Department | 12 August 2016 | -- | Yes |
| Yang Xiangdong | Beijing Electronics Holdings Co., Ltd. | Full-time Chairman of the Dispatched Supervisory Committee | 17 April 2015 | -- | No |
| Xu Tao | Beijing Electronics Holdings Co., Ltd. | Finance Minister | 26 October 2012 | -- | Yes |
| Wei Shuanglai | Beijing Electronics Holdings Co., Ltd. | Minister of Operation and Management Department | 16 January 2019 | -- | Yes |
| Shi Hong, | Beijing Yizhuang Investment Holdings Limited | Deputy Manager of Investment Development Department | 23 August 2018 | -- | Yes |
BOE Technology Group Co., Ltd. Annual Report 2019
| Notes to post-holding in shareholder’s unit | The documents for holding the posts of shareholders entities haven’t listed the expiry date. |
Offices held concurrently in other entities:
√Applicable □Not applicable
| Name | Other entity | Office held in the entity | Start of tenure | End of tenure | Remuneration or allowance from the entity |
| Lyu Tingjie | Beijing University of Posts and Telecommunications | Doctor Advisor | -- | -- | Yes |
| Wang Huacheng | Renmin University of China | Doctor Advisor | -- | -- | Yes |
| Hu Xiaolin | Tsinghua University | Associate professor | -- | -- | Yes |
| Li Xuan | The Central University of Finance and Economics | Post-graduate Tutor | -- | -- | Yes |
| Chen Xiaobei | Hefei Construction Investment Holding (Group) Co., Ltd. | Director, member of CPC Committee, Deputy GM, Secretary of the Board | -- | -- | Yes |
| Notes to post-holding in other unit | Due to the above personnel’s units were special, their start dates and ending dates of the office terms have not been fixed. | ||||
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and seniormanagement as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
IV Remuneration of Directors, Supervisors and Senior ManagementDecision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and seniormanagement:
(1) Determining Basis and Decision-making Procedure of Remuneration of Directors, Supervisors and Senior ManagementProposal on Adjustment of Allowance for Directors and Supervisors was reviewed and approved on the 1
st
Extraordinary GeneralMeeting of 2019 held by the Company on 28 June 2019, of which, the allowance for independent directors was adjusted to RMB0.2million (before tax) per year from RMB0.15 million; the allowance for the Company’s executive directors and employee supervisorsas well as directors and supervisors holding posts in shareholder’s unit was cancelled.
(2) Up to the end of the Reporting Period, the current directors, supervisors and senior management drew their remuneration from theCompany totaled RMB51.7245 million (before tax). Allowance for independent directors is RMB0.175 million (before tax) per yearin 2019. For details please referred to the statement below.Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB'0,000
BOE Technology Group Co., Ltd. Annual Report 2019
| Name | Office title | Gender | Age | Incumbent/Former | Total before-tax remuneration from the Company | Any remuneration from related party |
| Chen Yanshun | Chairman of the Board, Chief of Executive Committee | Male | 53 | Incumbent | 424.25 | No |
| Pan Jinfeng | Vice Chairman of the Board | Male | 40 | Incumbent | 0 | |
| Liu Xiaodong | Vice Chairman of the Board, President, Vice Chairman of Executive Committee | Male | 55 | Incumbent | 382.6 | No |
| Wang Chenyang | Director | Male | 50 | Incumbent | 0 | |
| Song Jie | Director | Male | 52 | Incumbent | 0 | |
| Sun Yun | Director,executive vice president, CFO, member of Executive Committee | Female | 50 | Incumbent | 326.14 | No |
| Gao Wenbao | Director,executive vice president, member of Executive Committee, CEO of the Display and Sensor BG | Male | 44 | Incumbent | 326.75 | No |
| Li Yantao | Director | Male | 38 | Incumbent | 0 | |
| Lyu Tingjie | Independent director | Male | 64 | Incumbent | 17.5 | |
| Wang Huacheng | Independent director | Male | 56 | Incumbent | 17.5 | |
| Hu Xiaolin | Independent director | Male | 41 | Incumbent | 17.5 | |
| Li Xuan | Independent director | Male | 51 | Incumbent | 17.5 | |
| Yang Xiangdong | Chairman of the Supervisory Committee | Male | 58 | Incumbent | 0 | |
| Xu Tao | Supervisor | Male | 55 | Incumbent | 0 | |
| Wei Shuanglai | Supervisor | Male | 52 | Incumbent | 0 | |
| Chen Xiaobei | Supervisor | Female | 47 | Incumbent | 0 | |
| Shi Hong | Supervisor | Female | 37 | Incumbent | 0 | |
| Xu Yangping | Employee supervisor | Male | 45 | Incumbent | 89.14 | No |
| He Daopin | Employee supervisor | Male | 50 | Incumbent | 70.68 | No |
| Yan Jun | Employee supervisor | Male | 48 | Incumbent | 52.75 | No |
| Teng Jiao | Employee supervisor | Male | 37 | Incumbent | 136.74 | No |
| Yao Xiangjun | Executive vice president, member of Executive Committee, CEO of the Digital Art IoT Platform BG | Male | 42 | Incumbent | 254 | No |
| Zhang Zhaohong | Member of Executive Committee, Executive vice president, CEO of the Mobile Healthcare IoT Platform BG | Male | 49 | Incumbent | 269.52 | No |
BOE Technology Group Co., Ltd. Annual Report 2019
| Zhong Huifeng | Member of Executive Committee, Executive vice president, Chief Human Resource Officer | Male | 49 | Incumbent | 234.48 | No |
| Feng Liqiong | Executive vice president, lead counsel, member of Executive Committee | Female | 47 | Incumbent | 255.43 | No |
| Xie Zhongdong | Senior vice president,Chief Risk Officer, Auditor General and member of Executive Committee | Male | 49 | Incumbent | 203.07 | No |
| Miao Chuanbin | Member of Executive Committee, vice president, Chief Culture Officer | Male | 46 | Incumbent | 96.6 | No |
| Liu Hongfeng | Vice president, Secretary of the Board | Male | 41 | Incumbent | 353.57 | No |
| Wang Dongsheng | Chairman of the Board | Male | 62 | Former | 190.14 | |
| Xie Xiaoming | Vice Chairman of the Board | Male | 60 | Former | 0 | |
| Zhao Wei | Supervisor | Male | 51 | Former | 0 | |
| Zhuang Haoyu | Supervisor | Male | 35 | Former | 4 | |
| Chen Zhaozhen | Supervisor | Male | 36 | Former | 0 | |
| Dong Youmei | Senior management | Female | 56 | Former | 101.14 | |
| Yue Zhanqiu | Senior management | Male | 52 | Former | 210.29 | |
| Feng Qiang | Senior management | Male | 43 | Former | 352.78 | |
| Yang Anle | Senior management | Male | 49 | Former | 323.11 | |
| Tong Guanshan | Senior management | Male | 51 | Former | 242.65 | |
| Jing Linfeng | Senior management | Male | 41 | Former | 202.62 | |
| Total | -- | -- | -- | -- | 5,172.45 | -- |
Equity incentives for directors, supervisors and senior management in the Reporting Period:
□ Applicable √ Not applicable
V Employees
1. Number, Functions and Educational Backgrounds of Employees
| Number of in-service employees of the Company as the parent | 2,491 |
| Number of in-service employees of major subsidiaries | 57,158 |
| Total number of in-service employees | 65,017 |
| Total number of paid employees in the Reporting Period | 65,017 |
| Number of retirees to whom the Company as the parent or its major subsidiaries need to pay retirement pensions | 24 |
| Functions | |
BOE Technology Group Co., Ltd. Annual Report 2019
| Function | Employees |
| Production | 37,254 |
| Sales | 1,956 |
| Technical | 22,830 |
| Financial | 653 |
| Administrative | 305 |
| Manager | 1,730 |
| Other | 289 |
| Total | 65,017 |
| Educational backgrounds | |
| Educational background | Employees |
| Doctor and post-doctorate | 385 |
| Master | 8,725 |
| Bachelor | 16,635 |
| College | 17,569 |
| Technical secondary school | 9,079 |
| Other | 12,624 |
| Total | 65,017 |
2. Employee Remuneration Policy
The Company has established the remuneration system based on the position, ability and business performance, paid attention to theexternal competitive compensation and internal fairness, strengthening the control of the group as well as considering the differenceamong all business groups and subsidiaries.
3. Employee Training Plans
For the purpose that exploiting and inheriting the intelligent assets with BOE genes and forming the talent cultivation mode withBOE features, BOE University was set-up in July, 2015, which with the purpose of “Academic drive and professional guide” and avision of “being international competitive and respectful Industrial University”. And it undertakes the strategy and service as mainline, driving the development of the Company personnel training system’s further improvement and upgrade and forms trainingproducts line including four categories of leaders, managers, professionals and industry personnel as well as provides targetedsolutions for talent growth at different stages.Training organized and implemented by BOE in 2019 empowered aspects of the Group such as the leadership, management strength,marketing strength, expertise force and general professional capacities. Centering on the strategic transformation objective, BOE hasdesigned and implemented a series of strategic transformation talent cultivation projects, helped the management change their mindsand enhance their sense of operation, explored and cultivated a batch of backup young cadres and software-hardware professionaltechnicians for the Group, promoting transformation development of the Group; As for business pain points and demands, the Groupdesigned and implemented a batch of performance improvement projects in the way of training + tuition, directly promoting the
BOE Technology Group Co., Ltd. Annual Report 2019
implementation of technical improvement and marketing scheme by the business department and assisting in solving practicalbusiness problems; Focusing on cultivation of standardized talents, BOE sticks to promoting innovation of training contents andmodes and has finished a new turn of project optimization, iteration and implementation, cultivating eligible management cadres,marketing operators, purchase professionals and industrial talents for each organization of the Group.
4. Labor Outsourcing
□ Applicable √ Not applicable
BOE Technology Group Co., Ltd. Annual Report 2019
Part X Corporate GovernanceI General Information of Corporate Bonds
1. Standardized Operation and Perfection of Corporate Governance Structure of the Company in the Reporting PeriodThe Company has stringently followed laws and rules such as Company Law, Securities Laws, Code of Corporate Governance forListed Companies, etc., and requirements of Guidelines of the Shenzhen Stock Exchange for the Standardized Operation of Companies,to continuously improve the corporate governance of the Company, to perfect internal control system as well as to promote corporategovernance level of the Company.Within the Reporting Period, the Company changed the term of office for the Board of Directors, the Supervisory Committee and theExecutive Committee, and the Company’s management team smoothly completed the inter-generational alteration, reflecting that theCompany’s market-based governance mechanism established in these years is increasingly improved and the scientific and efficientgovernance mechanism will serve as an important guarantee for the Company’s future management and development. DuringReporting Period, the Company’s board of directors, board of supervisors and senior executives strictly in line with the requirement ofrelated laws and Company rules and regulations perform their obligations; ensure the standardization and effectiveness of corporategovernance. During the Reporting Period, the Company revised the Articles of Association and Rules of Procedure of the Board andnewly set up Financing Business Management System, Implementing Rules for the Enterprise Annuity Plan Further promote thestandardization of the corporate governance level. During the Reporting Period, the Company continued to promote the Company’sgovernance in many ways. Actively arranged the Company's new directors, supervisors to join special training organized by theSecurities regulatory bureau of Beijing, regularly carry out the theme of the franco-prussian propaganda inside the Company. TheCompany preserved the related party fund transaction, external guarantee and regularly self-inspection of the shareholding and itschanges of the directors, supervisors and senior executives, through maintaining and perfecting the Shenzhen Stock Exchange InvestorsInteractive Platform to strengthen the communication of the investors.In the Reporting Period, corporate governance of the Company was perfected and operated normally, which was in total compliancewith various requirements on corporate governance of listed companies. No problems such as horizontal competition or illegalrelated-party transactions caused by partial restructuring or other reasons were found. The Company will continue to follow the conceptof “honesty, standard, transparency and responsibility”, regulate itself and continuously improve the level of governance.Main governance of the Company was as follows:
(1) About Shareholders and Shareholders’ General Meetings
As per the Company’s Articles of Association, shareholders enjoyed rights and assumed obligations according to the shares they held.Organizing and convening procedures of the Company’s shareholders’ general meetings were in compliance with laws and regulations.The Company paid high attention to legal interests of its shareholders, especially its minority shareholders. Meanwhile, on the basis ofensuring legitimacy and validity of shareholders’ general meetings, actively provided conveniences including internet voting forminority shareholders’ joining the general meeting of the shareholders.
(2) About Relationship between the Controlling Shareholder and the Company
The Company was independent from the controlling shareholder and the actual controller in terms of personnel, assets, financing,organization and business. The controlling shareholder and actual controller of the Company was able to strictly control its behaviors,with no direct or indirect intervention in the Company’s decision-making, production and operating activities by violating relevant laws,regulations and the Articles of Association, no behaviors in relation to occupying significant funds of the Company, and no behaviors inrelation to asking the Company to provide guarantees for it or other parties.
(3) About Directors and the Board of Directors
BOE Technology Group Co., Ltd. Annual Report 2019
During the Reporting Period, the Company conducted the election for the change of term of office of the Board of Directors and itsspecial committee, and further improved the standard operation level of the Board of Directors and its special committee. Thecomposition of the Board of Directors of the Company was in line with requirements of regulations and the Company’s actual situation.All directors possessed necessary knowledge, skills and quality for duty performance. They all performed their duties as stipulated inthe Articles of Association honestly, faithfully and diligently. They learned about and kept a constant focus on the Company’sproduction and operation, its financial status and influence and risks of significant events. They also took the initiative to search forinformation needed in their decision-making so as to ensure efficient operation and scientific decision-making of the Board of Directors.Board sessions were organized and convened in strict compliance with the Articles of Association and Rules of Procedure for the Boardof Directors. There were three special committees under the Board of Directors, namely, the Strategic Committee, the Nomination,Remuneration and Appraisal Committee and the Risk Control and Audit Committee. The Company also formulated rules of procedurefor all the said special committees so that they could perform better.
(4) About Supervisors and the Supervisory Committee
Within the Reporting Period, the Company conducted the election for the change of term of office of the Supervisory Committee, inwhich, the Supervisory Committee has enhanced its ability to supervise the legality and compliance of duty performance of theCompany’s financial staffs, directors and senior managers. By way of attending shareholders’ general meetings, sitting in on boardsessions, checking the Company’s compliance with laws and finance periodically, issuing its opinions on relevant matters, etc., theSupervisory Committee supervised the Company’s finance, duty performance of directors and senior management staffs, managementand capital flows between the Company and its related parties, and safeguarded the legitimate interests and rights of the Company andits shareholders. Sessions of the Supervisory Committee were organized and convened in strict compliance with the Articles ofAssociation and the Rules of Procedure for the Supervisory Committee so as to ensure the Supervisory Committee’s activities for dutyperformance were rightful and valid.
(5) About Information Disclosure and Transparency
According to the Company Law, the Stock Listing Rules of the Shenzhen Stock Exchange, the Guidelines of the Shenzhen StockExchange for the Standardized Operation of Companies, Companies Publicly Issuing Securities Information Disclosure Standards onthe Contents and Formats No.1 - Content And Format of the Annual Report, the Disclosure of Information A Business Memo No. 21 -Regular Report Disclosure Related Matters. The Articles of Association and Management Methods for Information Disclosure andother requirements, the Company disclosed information in a timely and fair manner and ensured the factuality, accuracy andcompleteness of the information disclosed.The Company attached importance to communication with investors through investor visits reception, investors interaction platform,online business performance explanation session, telephone and attending the investment strategy session organized by the securitiesbrokers, etc. Except for the aforesaid services, the Company’s senior management joined in the investor conference held by largeinternational investment institutions, actively communicated with the global institutional investors and discussed the situation anddevelopment strategy of the Company with investors and analyst, so as to promote the open, transparent, efficient and consistentcommunication between the Company, investors and analyst of securities, made them known more about the strategy, operation anddevelopment of the Company. As unremitting effort was made to establish the investor relations communication platform, theCompany innovated and developed the investor relations mini APP. While the communication will become more convenient betweenthe investor and the Company via the digital platform, the compliance and fairness of the investor relations work can also beguaranteed.
2. Governance Systems of the Company Revised during the Reporting Period
During the Reporting Period, based on the development demand, the Company revised a number of governance systems which hadbeen disclosed on Cninfo and details were presented in the following table:
| Diclosure date | Name of system | Established/Revised |
BOE Technology Group Co., Ltd. Annual Report 2019
| 26 March 2019 | Management System for Outside Investments | Revised |
| 27 April 2019 | Articles of Association | Revised |
| 27 April 2019 | Rules of Procedure for the Board of Directors | Revised |
| 27 April 2019 | Rules of Procedure for the Supervisory Committee | Revised |
| 29 June 2019 | Articles of Association | Revised |
| 29 June 2019 | Rules of Procedure for the Board of Directors | Revised |
| 29 June 2019 | Composition and Rules of Procedure for Strategic Committee under the Board of Directors | Revised |
| 29 June 2019 | Composition and Rules of Procedure for Risk Control and Audit Committee under the Board of Directors | Revised |
| 29 June 2019 | Composition and Rules of Procedure for Nomination, Remuneration and Appraisal Committee under the Board of Directors | Revised |
| 29 June 2019 | Composition and Rules of Procedure for Strategic Advisory Committee under the Board of Directors | Revised |
| 29 June 2019 | Composition and Rules of Procedure for Executive Committee | Revised |
| 29 June 2019 | Working Rules for Chairman of Executive Committee | Revised |
| 27 August 2019 | Measures for Administration of External Guarantees | Revised |
| 27 August 2019 | Composition and Rules of Procedure for Executive Committee | Revised |
| 30 November 2019 | Management system for Professional Managers | Established |
Indicate by tick market whether there is any material incompliance with the regulatory documents issued by the CSRC governing thegovernance of listed companies.
□ Yes √ No
No such cases in the Reporting Period.II The Company’s Independence from Its Controlling Shareholder in Business, Personnel,Asset, Organization and Financial AffairsThe Company was independent from the controlling shareholder and the actual controller in terms of business, personnel, assets,organization and financing, with independent & complete business and capability to operate independently.
1. In business, the Company was independent from the controlling shareholder and the actual controller, with its own production andbusiness departments and management system, the Company had the capability to make its own decisions, assume sole responsibilityfor its profits and losses, and operate independently with independent and complete business.
2. In personnel, the Company was completely independent in labor, staff and remunerations. The Company had its own operatingmanagement team. CEO, President, Chief Financial Officer, Secretary of the Board as well as other senior management staffs of theCompany all worked on full-time basis in the Company and did not hold any post in or receive any remuneration in the controllingshareholder unit.
3. In assets, the Company had independent and complete assets. With clear ownership on its assets, the Company independentlyowned the production system, ancillary production system as well as supporting facilities for major businesses, as well as assets like
BOE Technology Group Co., Ltd. Annual Report 2019
land use rights and intellectual property rights, etc.. Neither the controlling shareholder nor the actual controller appropriated anyassets of the Company.
4. In organization, the Company had established its organization completely independent from the controlling shareholder and theactual controller, with independent and sound organs and corporate governance structure. The Company had not handled any officialaffairs jointly with the controlling shareholder or the actual controller. There were no subordinate relationships between thecontrolling shareholder & its functional departments and the Company & its functional departments.
5. In financing, the Company had established independent financial departments, with full-time finance personnel. The Company hadalso formulated a standard and independent finance accounting system as well as financial measurement system, established thecorporate financial management archives and deployed relevant administrative personnel for them, opened independent account inbank, and paid tax independently.
III Horizontal Competition
□ Applicable √ Not applicable
IV Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
| Meeting | Type | Investor participation ratio | Date of the meeting | Disclosure date | Index to disclosed information |
| The 2018 Annual General Meeting | Annual General Meeting | 33.98% | 26 April 2019 | 27 April 2019 | Announcement on Resolution of the 2018 Annual General Meeting (2019-024) disclosed on China Securities Journal, Shanghai Securities News, Securities Times and Ta Kung Pao as well as http://www.cninfo.com.cn. |
| The 1st Extraordinary General Meeting of 2019 | Extraordinary General Meeting | 33.99% | 28 June 2019 | 29 June 2019 | Announcement on Resolution of the 1st Extraordinary General Meeting of 2019 (2019-037) disclosed on China Securities Journal, Shanghai Securities News, Securities |
BOE Technology Group Co., Ltd. Annual Report 2019
| Times and Ta Kung Pao as well as http://www.cninfo.com.cn. | |||||
| The 2nd Extraordinary General Meeting of 2019 | Extraordinary General Meeting | 34.09% | 12 September 2019 | 16 September 2019 | Announcement on Resolution of the 2nd Extraordinary General Meeting of 2019 (2019-051) disclosed on China Securities Journal, Shanghai Securities News, Securities Times and Ta Kung Pao as well as http://www.cninfo.com.cn. |
2. Extraordinary General Meetings Convened at the Request of Preferred Shareholders with ResumedVoting Rights
□ Applicable √ Not applicable
V Performance of Duty by Independent Directors in the Reporting Period
1. Attendance of Independent Directors at Board Meetings and General Meetings
| Attendance of independent directors at board meetings and general meetings | |||||||
| Independent director | Total number of board meetings the independent director was eligible to attend | Board meetings attended on site | Board meetings attended by way of telecommunication | Board meetings attended through a proxy | Board meetings the independent director failed to attend | The independent director failed to attend two consecutive board meetings (yes/no) | General meetings attended |
| Lyu Tingjie | 16 | 3 | 12 | 1 | 0 | No | 2 |
| Wang Huacheng | 16 | 4 | 12 | 0 | 0 | No | 3 |
| Hu Xiaolin | 16 | 4 | 12 | 0 | 0 | No | 3 |
| Li Xuan | 16 | 3 | 12 | 1 | 0 | No | 3 |
Why any independent director failed to attend two consecutive board meetings:
Not applicable.
BOE Technology Group Co., Ltd. Annual Report 2019
2. Objections Raised by Independent Directors on Matters of the Company
Indicate by tick mark whether any independent directors raised any objections on any matter of the Company.
□ Yes √ No
No such cases in the Reporting Period.
3. Other Information about the Performance of Duty by Independent DirectorsIndicate by tick mark whether any suggestions from independent directors were adopted by the Company.
√ Yes □ No
Suggestions from independent directors adopted or not adopted by the CompanyThe Company has four current independent directors, who are experts and scholars in the fields of finance, law and industry. Duringthe Reporting Period, in accordance with Company Law, Securities Law, Stock Listing Rules, Guidance on Establishing IndependentDirector System for Listed Companies, Articles of Association and Independent Director System, the independent directors paidspecial attention to the standardized operation of the Company, performed their duties independently and diligently, issued manyprecious professional advice in terms of the perfection of systems and routine operating decision-making, etc., and issued theirindependent and fair opinion as independent directors on the related-party transactions, engagement of audit firm, decision of annualremuneration of senior management staffs, external guarantee and other events needing their opinion occurred in the ReportingPeriod, as well as played their due roles in perfecting the supervisory mechanism of the Company, protecting the legal right of theCompany and the whole shareholders.VI Performance of Duty by Specialized Committees under the Board in the Reporting Period
1. Duty fulfillment of the Strategy Committee under Board of Directors
In the Reporting Period, the Strategy Committee under Board of Directors conscientiously controlled the strategic guidance, significantprojects, and production and operation activities. During the recess of the board session, the Strategy Committee was in charge ofworking out the operating strategies of the Company, planning its significant investment and financing projects, and monitoring itsmajor operation activities, which played an important role in ensuring the Company’s stable and smooth operation in the year.
2. Duty fulfillment of the Audit Committee under Board of Directors
In the Reporting Period, the Audit Committee conscientiously performed its routine duties, and actively advanced the launch of theaudit work for Y2018. Before the periodic reports were submitted to the Board for review, the Audit Committee convened specialsessions to discuss the reports. At the sessions, the committee members listened to relevant reports, expressed their opinions and putforward constructive advices concerning the Company’s internal control, financial auditing and so on.The Committee will quarterly examine the Company’s risk management, auditing and supervision work, and supervise the internalcontrol’s effective implementation. Meanwhile, the committee will also hold the annual report audit communication meeting so as todeliberate the annual internal control evaluation report and make relevant decisions.The 2019 annual audit work on financial report of the Audit Committee was detailed as follows:
1) Before the audit, the Committee discussed and decided the schedule of audit work for the 2019 annual report with KPMG HuazhenCertified Public Accountants (LLP) (hereinafter referred to as “KPMG”);
2) Before the presence of KPMG, the Committee reviewed the financial statements prepared by the Company and issued a writtenopinion;
3) Upon the presence of KPMG, the Audit Committee convened meetings to communicate with KPMG, reviewed the Company’s
BOE Technology Group Co., Ltd. Annual Report 2019
financial statements following the preliminary audit opinion issued by KPMG, and issued the written opinion concerned. Before theBoard reviewed the annual report, the Committee reviewed the annual financial statements, the employment of the CPAs firm, etc., andmade resolutions for further review by the Board.
4) In the audit process, the Committee issued a written Audit Urge Letter to KPMG, asking KPMG to finish the audit in an orderlymanner in strict accordance with the set schedule, so as to submit the annual audit report on time;The Audit Committee is of the opinion that the Financial Report is complete and factual with complete consolidated entities andstatements, an accurate consolidation basis, a steady and consistent accounting policy, proper application of the accounting policy andreasonable accounting estimates, which is in line with the Enterprise Accounting Standards and other regulations promulgated by theMinistry of Finance.
3. Duty fulfillment of Nomination & Remuneration & Appraisal Committee under Board of DirectorsIn the Reporting Period, in accordance with relevant rules and laws, the Nomination & Remuneration & Appraisal Committeeconscientiously performed its duties endowed by the Board through strictly executing the appointment procedure of directors, andsenior management. And it reviewed the basic remuneration of senior managerial of the Company.VII Performance of Duty by the Supervisory CommitteeIndicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in the ReportingPeriod.
□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.
VIII Appraisal of and Incentive for Senior ManagementAccording to the performance appraisal method of the Company, senior management sign an Annual Target Responsibility Paperwith the Company which sets the annual operation targets, key performance indicators (KPI) as well as the evaluation, reward andpunishment standards. As for the accomplishment of the targets, quarterly analyses, semi-annual reports and annual appraisal will beconducted. The examination and evaluation results will determine the remunerations, position changes as well as the trainings toreceive of senior management.IX Internal Control
1. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes √ No
BOE Technology Group Co., Ltd. Annual Report 2019
2. Internal Control Self-Evaluation Report
| Disclosure date of the internal control self-evaluation report | 28 April 2020 | |
| Index to the disclosed internal control self-evaluation report | On 28 April 2020, the Company disclosed 2019 Internal Control Appraisal Report, refer to www.cninfo.com.cn for details. | |
| Evaluated entities’ combined assets as % of consolidated total assets | 93.00% | |
| Evaluated entities’ combined operating revenue as % of consolidated operating revenue | 96.00% | |
| Identification standards for internal control weaknesses | ||
| Type | Weaknesses in internal control over financial reporting | Weaknesses in internal control not related to financial reporting |
| Nature standard | The nature standards of internal control deficiency evaluation over financial reporting determined by the Company are as follows: Material weakness: In case of the following situations, it will be deemed as that major defects (including but not limited to the following situations) may occur: (1) Directors, supervisors and Senior Management make the malpractices; (2) The enterprise corrects the released financial statements; (3) The certified public accountant finds that there is a material misstatement in the current financial report, but the internal control fails to find the misstatement in the process of operation; (4) Supervision of the risk control and audit committee and the internal audit organization for internal control is ineffective. Serious weakness refers to one or combination of several control items, and its severity and economic consequence are lower than those of the material weaknesses but may still affect the real and | Evaluation standards for internal defects not related to financial reporting specified by the Company are as below: Material weakness: (1) The business scope of the Company violates national laws and regulations seriously; (2) The decision-making procedure is not scientific, major decision errors are released, the development strategies of the Company are deviated from severely and major property losses are caused for the Company; (3) Safety and environmental accidents occur, resulting in major negative effects on the Company; (4) A lot of senior management personnel and key technicians leave the Company; (5) Important business lacks system control or the system is failure; (6) Material weaknesses or serious weaknesses are not |
BOE Technology Group Co., Ltd. Annual Report 2019
| accurate objective of the financial report. The common weakness refers to other internal control weaknesses except for material weaknesses and serious weaknesses. | corrected. Serious weakness refers to one or combination of several control items, and its severity and economic consequence are lower than those of the material weaknesses but may still affect the enterprise to deviate from the control goal. The common weakness refers to other internal control defects except for material weaknesses and Serious weakness. | |
| Quantitative standard | The quantitative standards of internal control deficiency evaluation over financial reporting determined by the Company are as follows: Material weakness: The amount reported incorrectly is ≥1‰* total amount of assets of the Group (operating revenue) Serious weakness: 0.5‰*total amount of assets of the Group (operating revenue)≤ the amount reported incorrectly<1‰*total amount of assets of the Group (operating revenue) Common weakness: 0.1‰*total group assets (operating revenue)≤ the amount reported incorrectly <0.5‰*total group assets (operating revenue) | The quantitative standards for internal control defects not related to financial reporting determined by the Company are consistent with those over the financial reporting. See the left side for details. |
| Number of material weaknesses in internal control over financial reporting | 0 | |
| Number of material weaknesses in internal control not related to financial reporting | 0 | |
| Number of serious weaknesses in internal control over financial reporting | 0 | |
| Number of serious weaknesses in internal control not related to financial reporting | 0 | |
BOE Technology Group Co., Ltd. Annual Report 2019
X Independent Auditor’s Report on Internal Control
√ Applicable □ Not applicable
| Opinion paragraph in the independent auditor’s report on internal control | |
| We believe that the Company and important subsidiaries make valid internal control on financial report in all significant aspects on 31 December 2019 according to the Basic Rules on Enterprise Internal Control and other relevant stipulations. | |
| Disclosed | |
| Disclosure date | 28 April 2020 |
| Index to such report disclosed | The Company disclosed the Audit Report on Internal Control on 28 April 2020, for details, please refer to http://www.cninfo.com.cn |
| Type of the auditor’s opinion | Standard unqualified opinion |
| Material weaknesses in internal control not related to financial reporting | No |
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the Company’s internal control.
□ Yes √ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent with the internal control self-evaluation report issued by the Company’s Board.
√ Yes □ No
BOE Technology Group Co., Ltd. Annual Report 2019
Part XI Corporate BondsDoes the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of thisReport’s approval or were due but could not be redeemed in full?Yes
I. Basic Information of the Corporate Bonds
| Name | Abbr. | Code | Release date | Maturity | Bonds balance (RMB’0,000) | Interest rate | Way of redemption |
| 2019 Public Offering of Renewable Corporate Bonds of BOE (for qualified investors) (Phase I) | 19BOEY1 | 112741 | 28 October 2019 | For bonds issued during this period, 3 interest-bearing years shall be regarded as a cycle. At the end of each cycle, the issuer shall have the right to conditionally extend the issue of bonds for another cycle (3 years) or choose to fully redeem the due bonds at the end of the cycle. | 800,000 | 4.00% | If the issuer does not execute its right in the deferred interest payment, corresponding interests shall be paid for this issue of bonds yearly, and the last installment of interest shall be paid with the redemption of principal. |
| 2020 Public Offering of Renewable Corporate Bonds of BOE (for qualified investors) (Phase I) (epidemic prevention and control bonds) | 20BOEY1 | 149046 | 27 February 2020 | For bonds issued during this period, 3 interest-bearing years shall be regarded as a cycle. At the end of each cycle, the issuer shall have the right to conditionally extend the issue of bonds for another cycle (3 years) or choose to fully redeem the due bonds at the end of the cycle. | 200,000 | 3.64% | If the issuer does not execute its right in the deferred interest payment, corresponding interests shall be paid for this issue of bonds yearly, and the last installment of interest shall be paid with the redemption of principal. |
| 2020 Public Offering of Renewable Corporate Bonds of BOE (for qualified investors) (Phase II) (epidemic prevention and control bonds) | 20BOEY2 | 149065 | 18 March 2020 | For bonds issued during this period, 3 interest-bearing years shall be regarded as a cycle. At the end of each cycle, the issuer shall have the right to conditionally extend the issue of bonds for another cycle (3 years) or choose to fully redeem the due bonds at the end of the cycle. | 200,000 | 3.54% | If the issuer does not execute its right in the deferred interest payment, corresponding interests shall be paid for this issue of bonds yearly, and the last installment of interest shall be paid with the redemption of principal. |
BOE Technology Group Co., Ltd. Annual Report 2019
| Listed or transferred trading place of the Company bonds | List on the SZSE. |
| Appropriate arrangement of the investors | the qualified investors |
| Interest payment during the Reporting Period | No such cases as of the approval disclosure date of this report. |
| Execution of the relevant regulations during the Reporting Period such as the affiliated option clause of the issuers or investors, special clauses such as the exchangeable regulations of the Company bonds (if applicable) | For the renewable corporate bonds “19BOEY1”, “20BOEY1” and “20BOEY2”, 3 interest-bearing years shall be regarded as a cycle. At the end of each cycle, the issuer shall have the right to conditionally extend the issue of bonds for another cycle (3 years) or choose to fully redeem the due bonds at the end of the cycle. All bonds issued in the Reporting Period entitle the issuer the right in the deferred interest payment. As of the approval quotation date of the Annual Report, these bonds have not yet been executed. |
II. List of the Bond Trustee and the Rating Organization
| Bond trustee: | ||||||||
| Name | China Securities Co., Ltd. | Office address | Rm. 2203, North Tower, Shanghai Securities Plaza, 528 Pudong Road South, Shanghai | Contact person | Zhu Mingqiang, Han Yong, Liao Ling, Xu Tianquan | Contact number | 021-68801569 | |
| Rating organization executed the tracking rating of the corporate bonds of the Reporting Period: | ||||||||
| Name | United Ratings Co., Ltd. | Office address | 12/F, PICC Building, No.2 Jianwai Street, Chaoyang District, Beijing | |||||
| Alternation reasons, execution process and influences on the investors’ interests etc. if there was alternation of the bond trustees and the credit rating agencies engaged by the Company during the Reporting Period (if applicable) | Not applicable | |||||||
BOE Technology Group Co., Ltd. Annual Report 2019
III. List of the Usage of the Raised Funds of the Corporate Bonds
| List of the usage of the raised funds and the execution process of the Company bonds | The Company executed the internal decision-making process strictly according to the applications committed by the prospectus as well as the review and approval regulations of the Board of Directors and meetings of shareholders of the Company. |
| Ending balance (RMB’0,000) | 50365.42 |
| Operating situation of the raised funds special account | The Company signed the Agreement on BOE’s Public Issue of Renewable Corporate Bonds Account and Three-party Supervision of Funds with Beijing Branch of Ping An Bank, CITIC Bank Beijing Branch, BDA Sub-branch of ABC Bank, and BDA Sub-branch of ICBC Bank and opened a special bank account for the raised fund so as to earmark the fund for its specified purpose only. |
| Whether the usage of the raised funds met with the usage, using plan and other agreements committed on the prospectus | Yes |
IV. Rating Situation of the Corporate Bonds Information
Within the Reporting Period and the day of approved report issue, United Ratings Co., Ltd. conducted a rating for the Company’smature bonds, and corresponding credit rating report was disclosed via www.cninfo.com.cn. Relevant details are as follows:
| Bond name | Corporate credit rating | Outlook on corporate rating | Credit rating of corporate bonds | Letter of credit rating | Date of report disclosure |
| 19BOEY1 | AAA | Stable | AAA | LH[2019]No.2141 | 23 October 2019 |
| 20BOEY1 | AAA | Stable | AAA | LH[2020]No.236 | 25 February 2020 |
| 20BOEY2 | AAA | Stable | AAA | LHPZ[2020]No.376 | 16 March 2020 |
It is estimated that United Ratings will issue the Tracking Rating Report of the 2020 Renewable Corporate Bonds Credit Rating ofBOE Technology Group Co., Ltd. in late June 2020. The Company will disclose the tracking rating analysis report on www.szse.cn intime. And please investors pay attention to it.
V. Credit-adding Mechanism, Repayment Plan and Other Repayment Guarantee Measures ofthe Corporate Bonds“19BOEY1”, “20BOEY1” and “20BOEY2” renewable corporate bonds are unsecured bonds without any other credit enhancementmeasures.“19BOEY1” Bond Retirement Plan can be described as follows: (1) the value date of this issue of bonds is 29 October 2019; (2) ifthe issuer does not execute the right of deferred payment of interest, corresponding interests shall be paid yearly upon matured, andeach October 29 (in case of official holidays or weekends, it shall postpone to the next working day) within the existing period shallbe the interest payment day for the previous interest-bearing year; (3) the issuer of corporate bonds shall have the option for renewal.If the issuer chooses to extend the bonds’ duration in the renewal option execution year, the bonds’ duration shall extend for anothercycle from the interest payment day of the interest-bearing year. If the issuer chooses to fully redeem the bonds in the renewal optionexecution year, the interest payment day of the interest-bearing year shall be the bonds’ redemption day.
BOE Technology Group Co., Ltd. Annual Report 2019
“20BOEY1” Bond Retirement Plan can be described as follows: (1) the value date of this issue of bonds is 28 February 2020; (2) ifthe issuer does not execute the right of deferred payment of interest, corresponding interests shall be paid yearly upon matured, andeach October 29 (in case of official holidays or weekends, it shall postpone to the next working day) within the existing period shallbe the interest payment day for the previous interest-bearing year; (3) the issuer of corporate bonds shall have the option for renewal.If the issuer chooses to extend the bonds’ duration in the renewal option execution year, the bonds’ duration shall extend for anothercycle from the interest payment day of the interest-bearing year. If the issuer chooses to fully redeem the bonds in the renewal optionexecution year, the interest payment day of the interest-bearing year shall be the bonds’ redemption day.“20BOEY2” Bond Retirement Plan can be described as follows: (1) the value date of this issue of bonds is 19 March 2020; (2) if theissuer does not execute the right of deferred payment of interest, corresponding interests shall be paid yearly upon matured, and eachOctober 29 (in case of official holidays or weekends, it shall postpone to the next working day) within the existing period shall be theinterest payment day for the previous interest-bearing year; (3) the issuer of corporate bonds shall have the option for renewal. If theissuer chooses to extend the bonds’ duration in the renewal option execution year, the bonds’ duration shall extend for another cyclefrom the interest payment day of the interest-bearing year. If the issuer chooses to fully redeem the bonds in the renewal optionexecution year, the interest payment day of the interest-bearing year shall be the bonds’ redemption day.The repayment guarantee measures of the corporate bonds of “19BOEY1”, “20BOEY1” and “20BOEY2”: to formulate the MeetingRegulations of the Bondholders and the repayment guarantee measures; to formulate and strictly carry out the funds managementplans; to fully exert the functions of the bond trustees; to strictly disclose the information; at the same time, when expected to fail torepay the principals and interest of the bonds on time or failed to repay the principals and interest of the bonds when expired, theCompany will at least adopt the measures of the execution of the capital expenditures projects such as to postpone the significantexternal investment and the purchase as well as merger and so on that guarantee the repayment of the debts.During the Reporting Period and before the approval quotation date of the Annual Report, there was no alternation of thecredit-adding mechanism, debt repayment plan and other repayment guarantee measures of the corporate bonds.
VI. Convene Situation of the Bonds Holders Meeting during the Reporting PeriodThe Company entrusted China Securities to manage its bonds and securities. According to relevant provisions stated in the CompanyLaw of the People’s Republic of China, Bondholders’ Meeting Regulations and Prospectus, China Securities convened and held thefirst bondholders’ meeting in 2019 to discuss the advance redemption of 2016 corporate bonds, and the on-site meeting was held on28 March 2019 (10:00) at the Meeting Room (No.12, West Ring Central Road, BDA, Beijing). For the meeting, the method of on-sitevoting and postal or fax, the voting was applied, and the Proposal on Advance Redemption of 2016 BOE Corporate Bonds waspassed and approved on the meeting.
VII. List of the Duty Execution of the Bonds Trustee during the Reporting Period
As the bond trustee of the Reporting Period, China Securities Co., Ltd. constantly paid attention to the operating, finance and creditsituation of the Company strictly according to the relevant laws and regulations such as the Regulations of the Offering and Tradingof the Corporate Bonds, Professional Code of Conduct of the Bond Trustee of the Corporate Bonds and vigorously executed theresponsibilities as a trustee as well as maintained the legal interests of the bondholders; there was no any situation conflicted to theCompany’s interests when executing the relevant responsibilities of the trustee.VIII. The Major Accounting Data and the Financial Indicators of the Recent 2 Years of theCompany up the Period-end
Unit: RMB’0,000
BOE Technology Group Co., Ltd. Annual Report 2019
| Item | 2019 | 2018 | Change rate of the same period |
| EBITDA | 2,201,586 | 2,130,534 | 3.33% |
| Current ratio | 1.33 | 1.60 | -26.94% |
| Asset-liability ratio | 58.56% | 60.41% | -1.85% |
| Quick ratio | 1.17 | 1.41 | -17.02% |
| Total debt ratio of EBITDA | 16.26% | 18.26% | -2.00% |
| Times interest earned | 1.14 | 1.62 | -29.63% |
| Times interest earned of cash | 5.80 | 7.66 | -24.28% |
| Times interest earned of EBITDA | 6.03 | 4.67 | 29.12% |
| Loan repayment rate | 100.00% | 100.00% | 0.00% |
| Interest coverage | 100.00% | 100.00% | 0.00% |
Main reason of the above accounting data and the financial indicators with the YoY change exceeded 30%
□ Applicable √ Not applicable
IX. List of the Interest Payment of Other Bonds and Debt Financing Instruments during theReporting PeriodThe Company paid interest of the corporate bond 16BOE01 for the period from 21 March 2018 to 20 March 2019 on 21 March 2019.The Company paid interest and principal of the corporate bond 16BOE01 for the period from 21 March 2019 to 2 April 2019 on 3April 2019.The Company paid interest of the private placement bond Euro PP for the period from 24 December 2018 to 23 December 2019 on24 December 2019.X. List of the Acquired Bank Credit Lines, Usage and the Repayment of the Bank Loans
The company has standardized operation, good reputation, strong profitability and solvency. It has a good credit status with majorbanks. It has maintained long-term partnership with major domestic commercial banks, obtained higher credit lines from variousbanks, and has indirect debt financing capabilities Strong.Up to 31 December 2019, the total amount of credit lines from major bankswas RMB47.6 billion with the used credit lines of RMB22.1 billion and the unused credit lines of RMB25.5 billion. The Companyhas a good record of debt repayment. The principals and the interest of bank loans were repaid on time. No bank loans were extendedin the Reporting Period.XI. List of the Execution of the Agreements or the Commitments Related to the CompanyBonds Raising Specification during the Reporting PeriodUp to the approval quotation date of the Annual Report, the Company strictly carried out each agreement and commitment of thecurrent bond prospectus, and there was no any situation of the inefficient execution of the relevant agreements or commitmentsaccording to the bond prospectus by the Company that caused the negative influences on the bonds investors.
BOE Technology Group Co., Ltd. Annual Report 2019
XII. Significant Events Occurring during the Reporting Period
As of the approval quotation date of the Annual Report, no significant events presented in Article 45 of Measures for theAdministration of Corporate Bond Issuance and Trading occurred.XIII. Whether there Was Guarantor of the Corporate Bonds
□ Yes √ No
BOE Technology Group Co., Ltd. Annual Report
2019
Page 1 of 9
Part XII Financial Statements
I Independent Auditor’s Report
| Type of the independent auditor’s opinion | Standard unqualified audit opinion |
| Date of signing this report | 24 April 2020 |
| Name of the independent auditor | KPMG Huazhen Certified Public Accountants (LLP) |
| Reference number of auditor’s report | KPMGHZSZ No. 2002383 |
| Name of the certified public accountants | Zhang Huan, Chai Jing |
AUDITORS’ REPORT
毕马威华振审字第2002383号
All Shareholders of BOE Technology Group Co., Ltd.:
Opinion
We have audited the accompanying financial statements of BOE Technology Group Company Limited (“BOE”), whichcomprise the consolidated and parent company’s balance sheet as at 31 December 2019, the consolidated and parentcompany’s income statement, the consolidated and parent company’s cash flow statement, and the consolidated and parentcompany’s statement of changes in shareholders’ equity for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and parentcompany’s financial position of BOE as at 31 December 2019, and its consolidated and parent company’s financialperformance and cash flows of BOE for the year then ended in accordance with Accounting Standards for BusinessEnterprises issued by the Ministry of Finance of the People’s Republic of China.
Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing for Certified Public Accountants (“CSAs”). Ourresponsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the FinancialStatements section of our report. . We are independent of BOE in accordance with the China Code of Ethics for CertifiedPublic Accountants (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
BOE Technology Group Co., Ltd. Annual Report 2019
Page 2 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financialstatements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, andin forming our opinion thereon, and we do not provide a separate opinion on these matters.
| Revenue recognition | |
| Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and accounting estimates” 22 and “V. Notes to the consolidated financial statements” 42. | |
| The Key Audit Matter | How the matter was addressed in our audit |
| The revenue of BOE and its subsidiaries (“BOE Group”) is mainly derived from the sales of products relating to display device across the domestic and overseas market. The sales contracts/orders signed between BOE Group and its customers (mainly electronic equipment manufacturers) contain various trading terms. BOE Group judges the transfer timing of major risks and rewards according to the trading terms, and recognizes revenue accordingly. Depending on the trading terms, the income is usually recognized when the goods are delivered and received, or when they are received by the carrier. We identified the recognition of BOE Group’s revenue as a key audit matter because revenue, as one of BOE Group’s key performance indicators, involves various trading terms, and there is an inherent risk that revenue may not be recognized in a correct period. | Our audit procedures to evaluate revenue recognition included the following: ? Evaluate the design and operation effectiveness of key internal controls related to revenue recognition; ? Check key sales contracts/orders on a sampling basis to identify relevant trading terms, and evaluate whether the accounting policies for revenue recognition of BOE Group meet the requirements of the Enterprise Accounting Standards; ? On a sampling basis and according to different trading terms, reconcile the revenue recorded in the current year to relevant supporting files such as relevant orders, shipping orders, sales invoices, customs declarations, delivery receipts, etc. to evaluate whether revenue is recognized in accordance with the accounting policy of BOE Group; ? On a sampling basis and according to different trading terms, cross check the revenue recorded before and after the balance sheet date against relevant supporting files such as relevant orders, shipping orders, sales invoices, customs declarations, delivery receipts, etc. to evaluate whether revenue is recorded in the appropriate period; |
BOE Technology Group Co., Ltd. Annual Report 2019
Page 3 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Key Audit Matters (continued)
| Revenue recognition | |
| Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and accounting estimates” 22 and “V. Notes to the consolidated financial statements” 42. | |
| The Key Audit Matter | How the matter was addressed in our audit |
| ? Select a sample based on the characteristics and nature of customer's transaction, and perform certification on the balance of accounts receivable as at the balance sheet date and the sales transaction amount during the current year; ? On a sampling basis, check the written-back of revenue after the balance sheet date (including sales discounts and sales returns, etc.) with relevant supporting documents to assess whether revenue is recorded in the appropriate period; ? Select revenue accounting entries that meet specific risk criteria and check related supporting documents. | |
BOE Technology Group Co., Ltd. Annual Report 2019
Page 4 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Key Audit Matters (continued)
| Book value of fixed assets and construction in progress | |
| Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and accounting estimates” 13, 14 and “V. Notes to the consolidated financial statements” 14, 15. | |
| The Key Audit Matter | How the matter was addressed in our audit |
| BOE Group continued to invest in building production lines of display device to expand its production capacity. As at 31 December 2019, the book value of fixed assets and construction in progress amounted to RMB 213.16 billion. The judgement made by the management on the following aspects will affect the book value of fixed assets and construction in progress, including: ? Determine which type of expenditures are qualified for capitalization; ? Determine the timing for transferring construction in progress to fixed assets and making depreciation; ? Estimate the useful life and residual value of corresponding fixed assets. We identified the book value of fixed assets and construction in progress of BOE Group as a key audit matter because the valuation of the book value of fixed assets and construction in progress involves significant judgement from the management and it is of importance to the consolidated financial statements. | Our audit procedures to assess the book value of fixed assets and construction in progress included the following: ? Evaluate the design and operation effectiveness of key internal controls (including estimating useful life and residual values, etc.) related to the integrity, existence and accuracy of fixed assets and construction in progress; ? Check the physical status of construction in progress and fixed assets on a sampling basis; ? Check capital expenditures with relevant supporting documents (including purchase agreements/orders, acceptance orders, engineering construction contracts, project progress reports, etc.) on a sampling basis; ? Assess whether the capitalized commissioning expenses for the current year are in compliance with relevant capitalization conditions; check the commissioning expenses with relevant supporting documents on a sampling basis; ? On the basis of sampling, assess the timing for transferring construction in progress to fixed assets, through the inspection of commissioning situation and the documents for transferring construction in progress to fixed assets; ? Based on our understanding of industry practices and actual operating conditions of assets, we evaluate the management's estimation of the useful life and residual value of fixed assets. |
BOE Technology Group Co., Ltd. Annual Report 2019
Page 5 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Key Audit Matters (continued)
| Impairment of fixed assets and intangible assets | |
| Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and accounting estimates” 19 and “V. Notes to the consolidated financial statements” 14, 16. | |
| The Key Audit Matter | How the matter was addressed in our audit |
| BOE Group principally generates revenue from the production and sale of display panels. Due to the fluctuation of supply-demand relationship in the display panel industry and the influence of technology upgrading, the profit level is unstable. As at 31 December 2019, the book value of fixed assets and intangible assets amounted to RMB 133.20 billion, the judgement on impairment indications and impairment test are material to BOE Group’s financial statements. The management classifies asset groups based on the smallest identifiable group of assets that generates cash inflows that are independent, and continuously monitors the trend of market of supply and demand as well as the technology evolution; comprehensively judges impairment indications of each asset group in accordance with market trends, operating conditions of production lines and technological advanced performance, and performs impairment test on asset groups if any impairment indication exists. | Our audit procedures to assess the impairment of fixed assets and intangible assets included the following: ? Evaluate management’s identification of asset groups, assessment of impairment indications, and assess the design and operation effectiveness of key internal controls for impairment tests; ? Based on our understanding of BOE Group’s businesses and relevant accounting standards, evaluate management’s classification basis of asset groups and judgement basis of impairment indications; ? For asset groups with impairment indications, based on our understanding of the industry, compare the key assumptions in the calculation of recoverable amounts used by management with external available data and historical analysis, including future selling prices, sales volume and discount rate used by management, evaluate the key assumptions and estimations used by the management; ? For asset groups with significant impairment risk, assess the competence, professional quality and objectivity of experts hired by the management; and adopt oun own valuation experts’ work, assess if discount rates used for estimating the present value of future cash flows by management are within the range used by other companies in the same industry; |
BOE Technology Group Co., Ltd. Annual Report 2019
Page 6 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Key Audit Matters (continued)
| Impairment of fixed assets and intangible assets | |
| Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and accounting estimates” 19 and “V. Notes to the consolidated financial statements” 14, 16. | |
| The Key Audit Matter | How the matter was addressed in our audit |
| For asset groups with impairment indications, the management assesses whether the book value of fixed assets and intangible assets as at 31 December 2019 were impaired by calculating the present value of expected future cash flows. Calculating the present value of expected future cash flows requires management to make significant judgements, especially for the estimation of future selling prices, sales volume and applicable discount rate. We identified the impairment of fixed assets and intangible assets as a key audit matter because the book value of fixed assets and intangible assets is significant to the financial statements; management’s significant judgements and estimations are involved in assessing the classification basis of asset groups, existence of impairment indications and impairment test of asset groups with impairment indications, which may exist errors or potential management bias. | Our audit procedures to assess the impairment of fixed assets and intangible assets included the following: ? Compare estimations used for calculating the present value of expected future cash flows in the previous year by the management with the actual situation in this year to consider the historical accuracy of management’s forecast results; ? Perform sensitivity analysis on key assumptions, including future selling prices, sales volume and discount rates, used in the calculation of recoverable amount by the management; assess how changes in key assumptions (individually or collectively) will lead to different results and assess whether there are indications of management bias in the selection of key assumptions; ? Consider whether the disclosure of impairment of fixed assets and intangible assets in the financial statements is consistant with relevant accounting policy. |
BOE Technology Group Co., Ltd. Annual Report 2019
Page 7 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Other Information
BOE’s management is responsible for the other information. The other information comprises all the information included in 2019annual report of BOE, other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusionthereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, considerwhether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are requiredto report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with the AccountingStandards for Business Enterprises, and for the design, implementation and maintenance of such internal control necessary to enablethat the financial statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the ability of BOE to continue as a going concern,disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless BOE either intendsto liquidate or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process of BOE.
BOE Technology Group Co., Ltd. Annual Report 2019
Page 8 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with CSAs will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgement and maintain professional scepticism throughoutthe audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resultingfrom error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internalcontrol.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on theBOE’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to drawattention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.However, future events or conditions may cause BOE to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
BOE Technology Group Co., Ltd. Annual Report 2019
Page 9 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Auditor’s Responsibilities for the Audit of the Financial Statement (continued)
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
BOE to express an opinion on the financial statements. We are responsible for the instruction, supervision and execution ofConch Group’s audit, and assume full responsibility for the audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit andsignificant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regardingindependence and communicate with them all relationships and other matters that may reasonably be thought to bear on ourindependence and, where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance inthe audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, wedetermine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably beexpected to outweigh the public interest benefits of such communication.
KPMG Huazhen LLP Certified Public AccountantsRegistered in the People’s Republic of China
Zhang Huan (Engagement Partner)
Beijing, China Chai Jing
24 April 2020
BOE Technology Group Co., Ltd. Annual Report 2019
Page 10 of 9
Part XIII Documents Available for Reference
(I) The financial statements signed and sealed by the Company’s legal representative, President, Chief Financial Officer and head ofthe financial department (equivalent to financial manager); and(II) The originals of all the documents and announcements that the Company disclosed on www.cninfo.com.cn during the ReportingPeriod.All the above mentioned documents are available at the Board Secretary’s Office of the Company.
Chairman of the Board (signature): Mr. Chen Yanshun
Date of the Board’s approval of this Report: 24 April 2020
BOE Technology Group Co., Ltd.
ENGLISH TRANSLATION OF FINANCIAL STATEMENTSFOR THE YEAR 1 JANUARY 2019 TO 31 DECEMBER 2019IF THERE IS ANY CONFLICT OF MEANING BETWEEN THE CHINESE VERSIONAND ENGLISH TRANSLATION, THE CHINESE VERSION WILL PREVAIL
Page 1 of 9
AUDITORS’ REPORT
毕马威华振审字第2002383号
All Shareholders of BOE Technology Group Co., Ltd.:
Opinion
We have audited the accompanying financial statements of BOE Technology Group Company Limited (“BOE”), whichcomprise the consolidated and parent company’s balance sheet as at 31 December 2019, the consolidated and parentcompany’s income statement, the consolidated and parent company’s cash flow statement, and the consolidated and parentcompany’s statement of changes in shareholders’ equity for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and parentcompany’s financial position of BOE as at 31 December 2019, and its consolidated and parent company’s financialperformance and cash flows of BOE for the year then ended in accordance with Accounting Standards for BusinessEnterprises issued by the Ministry of Finance of the People’s Republic of China.
Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing for Certified Public Accountants (“CSAs”). Ourresponsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the FinancialStatements section of our report. . We are independent of BOE in accordance with the China Code of Ethics for CertifiedPublic Accountants (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Page 2 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financialstatements of the current period. These matters were addressed in the context of our audit of the financial statements as awhole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
| Revenue recognition | |
| Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and accounting estimates” 22 and “V. Notes to the consolidated financial statements” 42. | |
| The Key Audit Matter | How the matter was addressed in our audit |
| The revenue of BOE and its subsidiaries (“BOE Group”) is mainly derived from the sales of products relating to display device across the domestic and overseas market. The sales contracts/orders signed between BOE Group and its customers (mainly electronic equipment manufacturers) contain various trading terms. BOE Group judges the transfer timing of major risks and rewards according to the trading terms, and recognizes revenue accordingly. Depending on the trading terms, the income is usually recognized when the goods are delivered and received, or when they are received by the carrier. We identified the recognition of BOE Group’s revenue as a key audit matter because revenue, as one of BOE Group’s key performance indicators, involves various trading terms, and there is an inherent risk that revenue may not be recognized in a correct period. | Our audit procedures to evaluate revenue recognition included the following: ? Evaluate the design and operation effectiveness of key internal controls related to revenue recognition; ? Check key sales contracts/orders on a sampling basis to identify relevant trading terms, and evaluate whether the accounting policies for revenue recognition of BOE Group meet the requirements of the Enterprise Accounting Standards; ? On a sampling basis and according to different trading terms, reconcile the revenue recorded in the current year to relevant supporting files such as relevant orders, shipping orders, sales invoices, customs declarations, delivery receipts, etc. to evaluate whether revenue is recognized in accordance with the accounting policy of BOE Group; ? On a sampling basis and according to different trading terms, cross check the revenue recorded before and after the balance sheet date against relevant supporting files such as relevant orders, shipping orders, sales invoices, customs declarations, delivery receipts, etc. to evaluate whether revenue is recorded in the appropriate period; |
Page 3 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Key Audit Matters (continued)
| Revenue recognition | |
| Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and accounting estimates” 22 and “V. Notes to the consolidated financial statements” 42. | |
| The Key Audit Matter | How the matter was addressed in our audit |
| ? Select a sample based on the characteristics and nature of customer's transaction, and perform certification on the balance of accounts receivable as at the balance sheet date and the sales transaction amount during the current year; ? On a sampling basis, check the written-back of revenue after the balance sheet date (including sales discounts and sales returns, etc.) with relevant supporting documents to assess whether revenue is recorded in the appropriate period; ? Select revenue accounting entries that meet specific risk criteria and check related supporting documents. | |
Page 4 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Key Audit Matters (continued)
| Book value of fixed assets and construction in progress | |
| Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and accounting estimates” 13, 14 and “V. Notes to the consolidated financial statements” 14, 15. | |
| The Key Audit Matter | How the matter was addressed in our audit |
| BOE Group continued to invest in building production lines of display device to expand its production capacity. As at 31 December 2019, the book value of fixed assets and construction in progress amounted to RMB 213.16 billion. The judgement made by the management on the following aspects will affect the book value of fixed assets and construction in progress, including: ? Determine which type of expenditures are qualified for capitalization; ? Determine the timing for transferring construction in progress to fixed assets and making depreciation; ? Estimate the useful life and residual value of corresponding fixed assets. We identified the book value of fixed assets and construction in progress of BOE Group as a key audit matter because the valuation of the book value of fixed assets and construction in progress involves significant judgement from the management and it is of importance to the consolidated financial statements. | Our audit procedures to assess the book value of fixed assets and construction in progress included the following: ? Evaluate the design and operation effectiveness of key internal controls (including estimating useful life and residual values, etc.) related to the integrity, existence and accuracy of fixed assets and construction in progress; ? Check the physical status of construction in progress and fixed assets on a sampling basis; ? Check capital expenditures with relevant supporting documents (including purchase agreements/orders, acceptance orders, engineering construction contracts, project progress reports, etc.) on a sampling basis; ? Assess whether the capitalized commissioning expenses for the current year are in compliance with relevant capitalization conditions; check the commissioning expenses with relevant supporting documents on a sampling basis; ? On the basis of sampling, assess the timing for transferring construction in progress to fixed assets, through the inspection of commissioning situation and the documents for transferring construction in progress to fixed assets; ? Based on our understanding of industry practices and actual operating conditions of assets, we evaluate the management's estimation of the useful life and residual value of fixed assets. |
Page 5 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Key Audit Matters (continued)
| Impairment of fixed assets and intangible assets | |
| Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and accounting estimates” 19 and “V. Notes to the consolidated financial statements” 14, 16. | |
| The Key Audit Matter | How the matter was addressed in our audit |
| BOE Group principally generates revenue from the production and sale of display panels. Due to the fluctuation of supply-demand relationship in the display panel industry and the influence of technology upgrading, the profit level is unstable. As at 31 December 2019, the book value of fixed assets and intangible assets amounted to RMB 133.20 billion, the judgement on impairment indications and impairment test are material to BOE Group’s financial statements. The management classifies asset groups based on the smallest identifiable group of assets that generates cash inflows that are independent, and continuously monitors the trend of market of supply and demand as well as the technology evolution; comprehensively judges impairment indications of each asset group in accordance with market trends, operating conditions of production lines and technological advanced performance, and performs impairment test on asset groups if any impairment indication exists. | Our audit procedures to assess the impairment of fixed assets and intangible assets included the following: ? Evaluate management’s identification of asset groups, assessment of impairment indications, and assess the design and operation effectiveness of key internal controls for impairment tests; ? Based on our understanding of BOE Group’s businesses and relevant accounting standards, evaluate management’s classification basis of asset groups and judgement basis of impairment indications; ? For asset groups with impairment indications, based on our understanding of the industry, compare the key assumptions in the calculation of recoverable amounts used by management with external available data and historical analysis, including future selling prices, sales volume and discount rate used by management, evaluate the key assumptions and estimations used by the management; ? For asset groups with significant impairment risk, assess the competence, professional quality and objectivity of experts hired by the management; and adopt oun own valuation experts’ work, assess if discount rates used for estimating the present value of future cash flows by management are within the range used by other companies in the same industry; |
Page 6 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Key Audit Matters (continued)
| Impairment of fixed assets and intangible assets | |
| Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and accounting estimates” 19 and “V. Notes to the consolidated financial statements” 14, 16. | |
| The Key Audit Matter | How the matter was addressed in our audit |
| For asset groups with impairment indications, the management assesses whether the book value of fixed assets and intangible assets as at 31 December 2019 were impaired by calculating the present value of expected future cash flows. Calculating the present value of expected future cash flows requires management to make significant judgements, especially for the estimation of future selling prices, sales volume and applicable discount rate. We identified the impairment of fixed assets and intangible assets as a key audit matter because the book value of fixed assets and intangible assets is significant to the financial statements; management’s significant judgements and estimations are involved in assessing the classification basis of asset groups, existence of impairment indications and impairment test of asset groups with impairment indications, which may exist errors or potential management bias. | Our audit procedures to assess the impairment of fixed assets and intangible assets included the following: ? Compare estimations used for calculating the present value of expected future cash flows in the previous year by the management with the actual situation in this year to consider the historical accuracy of management’s forecast results; ? Perform sensitivity analysis on key assumptions, including future selling prices, sales volume and discount rates, used in the calculation of recoverable amount by the management; assess how changes in key assumptions (individually or collectively) will lead to different results and assess whether there are indications of management bias in the selection of key assumptions; ? Consider whether the disclosure of impairment of fixed assets and intangible assets in the financial statements is consistant with relevant accounting policy. |
Page 7 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Other Information
BOE’s management is responsible for the other information. The other information comprises all the information included in2019 annual report of BOE, other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assuranceconclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained inthe audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we arerequired to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with theAccounting Standards for Business Enterprises, and for the design, implementation and maintenance of such internal controlnecessary to enable that the financial statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the ability of BOE to continue as a goingconcern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unlessBOE either intends to liquidate or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process of BOE.
Page 8 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assuranceis a high level of assurance, but is not a guarantee that an audit conducted in accordance with CSAs will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis ofthese financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgement and maintain professional scepticismthroughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher thanfor one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significantdoubt on the BOE’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we arerequired to draw attention in our auditor’s report to the related disclosures in the financial statements or, if suchdisclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor’s report. However, future events or conditions may cause BOE to cease to continue as a goingconcern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fairpresentation.
Page 9 of 9
AUDITOR’S REPORT (continued)
毕马威华振审字第2002383号
Auditor’s Responsibilities for the Audit of the Financial Statement (continued)
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within BOE to express an opinion on the financial statements. We are responsible for the instruction, supervision andexecution of Conch Group’s audit, and assume full responsibility for the audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirementsregarding independence and communicate with them all relationships and other matters that may reasonably be thought tobear on our independence and, where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of mostsignificance in the audit of the financial statements of the current period and are therefore the key audit matters. We describethese matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, inextremely rare circumstances, we determine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
KPMG Huazhen LLP Certified Public AccountantsRegistered in the People’s Republic of China
Zhang Huan (Engagement Partner)
Beijing, China Chai Jing
24 April 2020
BOE Technology Group Co., Ltd.Consolidated balance sheetas at 31 December 2019(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| Asset | ? | ? | ? | ? |
| ? | ? | ? | ? | ? |
| Current assets: | ? | ? | ? | ? |
| Cash at bank and on hand | V.1 | 56,972,723,239 | ? | 51,481,539,711 |
| Financial assets held for trading | V.2 | 5,809,184,994 | ? | - |
| Bills receivable | V.3 | 331,145,492 | ? | 656,781,577 |
| Accounts receivable | V.4 | 18,135,687,806 | ? | 19,880,680,518 |
| Prepayments | V.5 | 626,985,706 | ? | 770,633,448 |
| Other receivables | V.6 | 706,171,112 | ? | 2,454,174,971 |
| Inventories | V.7 | 12,396,194,762 | ? | 11,985,398,172 |
| Assets held for sale | V.8 | 173,910,820 | ? | - |
| Other current assets | V.9 | 9,296,637,067 | ? | 12,463,073,779 |
| ? | ? | ? | ? | ? |
| Total current assets | ? | 104,448,640,998 | ? | 99,692,282,176 |
| ? | ? | ? | ? | ? |
| Non-current assets: | ? | ? | ? | ? |
| Available-for-sale financial assets | V.10 | - | ? | 734,022,359 |
| Long-term equity investments | V.11 | 2,718,037,934 | ? | 2,389,166,886 |
| Investments in other equity instruments | V.12 | 632,076,647 | ? | - |
| Investment properties | V.13 | 1,241,242,850 | ? | 1,283,867,651 |
| Fixed assets | V.14 | 125,786,241,938 | ? | 128,157,730,995 |
| Construction in progress | V.15 | 87,376,782,527 | ? | 56,423,354,887 |
| Intangible assets | V.16 | 7,416,416,829 | ? | 5,937,679,394 |
| Goodwill | V.17 | 707,603,856 | ? | 904,370,509 |
| Long?term deferred expenses | V.18 | 345,424,409 | ? | 360,640,853 |
| Deferred tax assets | V.19 | 248,153,761 | ? | 252,373,622 |
| Other non-current assets | V.20 | 9,491,581,559 | ? | 7,893,002,053 |
| ? | ? | ? | ? | ? |
| Total non-current assets | ? | 235,963,562,310 | ? | 204,336,209,209 |
| ? | ||||
| ? | ? | ? | ? | ? |
| Total assets | ? | 340,412,203,308 | ? | 304,028,491,385 |
| ? |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Consolidated balance sheetas at 31 December 2019 (continued)
(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| Liabilities and shareholders’ equity | ? | ? | ? | ? |
| ? | ? | ? | ? | ? |
| Current liabilities | ? | ? | ? | ? |
| Short-term loans | V.21 | 6,366,717,121 | ? | 5,449,954,885 |
| Bills payable | V.22 | 2,028,917,980 | ? | 591,109,272 |
| Accounts payable | V.23 | 21,183,567,553 | ? | 22,213,956,616 |
| Advance payments received | V.24 | 1,260,732,785 | ? | 1,218,934,743 |
| Employee benefits payable | V.25 | 2,373,745,454 | ? | 2,224,931,171 |
| Taxes payable | V.26 | 730,996,129 | ? | 970,108,298 |
| Other payables | V.27 | 24,570,589,610 | ? | 22,956,979,828 |
| Non-current liabilities due within one year | V.28 | 18,849,281,019 | ? | 5,597,563,204 |
| Other current liabilities | V.29 | 1,013,738,515 | ? | 1,004,557,061 |
| ? | ? | ? | ? | ? |
| Total current liabilities | ? | 78,378,286,166 | ? | 62,228,095,078 |
| ? | ? | ? | ? | ? |
| Non-current liabilities: | ? | ? | ? | ? |
| Long-term loans | V.30 | 107,730,595,615 | ? | 94,780,077,864 |
| Debentures payable | V.31 | 387,878,384 | ? | 10,288,666,233 |
| Long-term payables | V.32 | 984,520,824 | ? | 1,416,092,239 |
| Provisions | V.33 | 16,457,010 | ? | 16,457,010 |
| Deferred income | V.34 | 2,204,400,566 | ? | 2,187,558,533 |
| Deferred tax liabilities | V.19 | 1,451,825,357 | ? | 1,419,373,545 |
| Other non-current liabilities | V.35 | 8,200,542,412 | ? | 11,334,873,322 |
| ? | ? | ? | ? | ? |
| Total non-current liabilities | ? | 120,976,220,168 | ? | 121,443,098,746 |
| ? | ||||
| ? | ? | ? | ? | ? |
| Total liabilities | ? | 199,354,506,334 | ? | 183,671,193,824 |
| ? | ||||
| ? | ? | ? | ? | ? |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Consolidated balance sheetas at 31 December 2019 (continued)
(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| Liabilities and shareholders’ equity (continued) | ? | ? | ? | ? |
| ? | ? | ? | ? | ? |
| Shareholders’ equity | ? | ? | ? | ? |
| Share capital | V.36 | 34,798,398,763 | ? | 34,798,398,763 |
| Other equity instruments | V.37 | 8,013,156,853 | ? | - |
| Capital reserve | V.38 | 38,353,242,364 | ? | 38,213,100,596 |
| Other comprehensive income | V.39 | (4,566,639) | ? | (125,258,252) |
| Surplus reserve | V.40 | 1,516,139,709 | ? | 1,152,626,310 |
| Retained earnings | V.41 | 12,381,758,005 | ? | 11,817,881,286 |
| ? | ? | ? | ? | ? |
| Total equity attributable to shareholders of the Company | ? | 95,058,129,055 | ? | 85,856,748,703 |
| ? | ? | ? | ? | ? |
| Non-controlling interests | ? | 45,999,567,919 | ? | 34,500,548,858 |
| ? | ? | ? | ? | ? |
| Total shareholders’ equity | ? | 141,057,696,974 | ? | 120,357,297,561 |
| ? | ||||
| ? | ? | ? | ? | ? |
| Total liabilities and shareholders’ equity | ? | 340,412,203,308 | ? | 304,028,491,385 |
These financial statements were approved by the Board of Directors of the Company on 24 April 2020.
?
| Chen Yanshun Chairman of the Board | Liu Xiaodong Chief Executive Officer | Sun Yun Chief Financial Officer | Yang Xiao Ping The head of the accounting department | (Company stamp) | ||||
| (Signature and stamp) | (Signature and stamp) | (Signature and stamp) | (Signature and stamp) |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Company balance sheetas at 31 December 2019(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| Assets | ? | ? | ? | ? |
| ? | ? | ? | ? | ? |
| Current assets: | ? | ? | ? | ? |
| Cash at bank and on hand | XIV.1 | 3,680,770,048 | ? | 3,829,814,050 |
| Bills receivable | ? | 84,230,531 | ? | 1,500,000 |
| Accounts receivable | XIV.2 | 646,533,115 | ? | 36,952,623 |
| Prepayments | ? | 77,682,682 | ? | 25,020,734 |
| Other receivables | XIV.3 | 4,827,398,094 | ? | 2,015,828,460 |
| Inventories | ? | 13,935,401 | ? | 9,289,141 |
| Non-current assets due within one year | ? | - | ? | 450,000,000 |
| Other current assets | XIV.4 | 109,497,897 | ? | 47,805,096 |
| ? | ? | ? | ? | ? |
| Total current assets | ? | 9,440,047,768 | ? | 6,416,210,104 |
| ? | ? | ? | ? | ? |
| Non-current assets: | ? | ? | ? | ? |
| Available-for-sale financial assets | ? | - | ? | 128,297,254 |
| Long-term equity investments | XIV.5 | 159,389,864,760 | ? | 143,499,733,485 |
| Investments in other equity instruments | ? | 79,405,724 | ? | - |
| Investment properties | ? | 280,525,802 | ? | 290,253,475 |
| Fixed assets | ? | 949,104,308 | ? | 969,371,352 |
| Construction in progress | ? | 358,933,667 | ? | 251,314,313 |
| Intangible assets | XIV.6 | 1,493,632,264 | ? | 514,186,496 |
| Long?term deferred expenses | ? | 109,216,398 | ? | 99,701,797 |
| Deferred tax assets | XIV.7 | 360,268,466 | ? | 290,794,548 |
| Other non-current assets | ? | 162,516,190 | ? | 284,243,667 |
| ? | ? | ? | ? | ? |
| Total non-current assets | ? | 163,183,467,579 | ? | 146,327,896,387 |
| ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? |
| Total assets | ? | 172,623,515,347 | ? | 152,744,106,491 |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Company balance sheetas at 31 December 2019 (continued)
(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| Liabilities and shareholders’ equity | ? | ? | ? | ? |
| ? | ? | ? | ? | ? |
| Current liabilities: | ? | ? | ? | ? |
| Short-term loans | ? | 1,220,000,000 | ? | 1,000,000,000 |
| Accounts payable | ? | 27,919,341 | ? | 35,322,286 |
| Advance payments received | XIV.8 | 2,117,568,995 | ? | 1,577,035,515 |
| Employee benefits payable | XIV.9 | 252,206,075 | ? | 201,139,261 |
| Taxes payable | ? | 107,287,957 | ? | 250,558,556 |
| Other payables | XIV.10 | 5,260,470,974 | ? | 8,209,736,090 |
| Non-current liabilities due within one year | ? | 5,490,440,787 | ? | 2,590,000,000 |
| Other current liabilities | ? | 1,423,133 | ? | - |
| ? | ? | ? | ? | ? |
| Total current liabilities | ? | 14,477,317,262 | ? | 13,863,791,708 |
| ? | ? | ? | ? | ? |
| Non-current liabilities: | ? | ? | ? | ? |
| Long-term loans | XIV.11 | 33,310,701,574 | ? | 26,520,000,000 |
| Debentures payable | ? | - | ? | 9,976,533,425 |
| Deferred income | XIV.12 | 4,627,393,256 | ? | 5,523,949,841 |
| Other non-current liabilities | ? | 33,297,240,830 | ? | 20,954,104,125 |
| ? | ? | ? | ? | ? |
| Total non-current liabilities | ? | 71,235,335,660 | ? | 62,974,587,391 |
| ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? |
| Total liabilities | ? | 85,712,652,922 | ? | 76,838,379,099 |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Company balance sheetas at 31 December 2019 (continued)(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| Liabilities and shareholders’ equity (continued) | ? | ? | ? | ? |
| ? | ? | ? | ? | ? |
| Shareholders’ equity: | ? | ? | ? | ? |
| Share capital | V.36 | 34,798,398,763 | ? | 34,798,398,763 |
| Other equity instruments | V.37 | 8,013,156,853 | ? | - |
| Capital reserve | XIV.13 | 37,608,039,685 | ? | 37,590,966,191 |
| Other comprehensive income | XIV.14 | 193,638,576 | ? | (28,507,585) |
| Surplus reserve | V.40 | 1,516,139,709 | ? | 1,152,626,310 |
| Retained earnings | XIV.15 | 4,781,488,839 | ? | 2,392,243,713 |
| ? | ? | ? | ? | ? |
| Total shareholders’ equity | ? | 86,910,862,425 | ? | 75,905,727,392 |
| ? | ||||
| ? | ? | ? | ? | ? |
| Total liabilities and shareholders’ equity | ? | 172,623,515,347 | ? | 152,744,106,491 |
These financial statements were approved by the Board of Directors of the Company on 24 April 2020.
?
| Chen Yanshun Chairman of the Board | Liu Xiaodong Chief Executive Officer | Sun Yun Chief Financial Officer | Yang Xiao Ping The head of the accounting department | (Company stamp) | ||||
| (Signature and stamp) | (Signature and stamp) | (Signature and stamp) | (Signature and stamp) |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Consolidated income statementfor the year ended 31 December 2019(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| I. Operating income | V.42 | 116,059,590,164 | ? | 97,108,864,935 |
| ? | ? | ? | ? | ? |
| II. Less: Operating costs | V.42 | 98,446,269,296 | ? | 77,306,224,288 |
| Taxes and surcharges | V.43 | 861,100,605 | ? | 778,606,126 |
| Selling and distribution expenses | V.44 | 2,917,865,380 | ? | 2,891,056,969 |
| General and administrative expenses | V.45 | 5,214,948,027 | ? | 4,959,184,197 |
| Research and development costs | V.46 | 6,699,973,240 | ? | 5,039,927,435 |
| Finance expenses | V.47 | 1,994,150,258 | ? | 3,196,695,890 |
| Including: Interest expense | ? | 2,525,136,209 | ? | 3,265,732,314 |
| Interest income | ? | 840,190,118 | ? | 748,004,557 |
| Add: Other income | V.48 | 2,605,658,711 | ? | 2,000,573,631 |
| Investment income | V.49 | 342,620,691 | ? | 306,887,579 |
| Including: Income / (Losses) from investment in associates and joint ventures | ? | 200,020,686 | ? | (13,925,731) |
| Gains from changes in fair value | V.50 | 137,473,077 | ? | 2,061,153 |
| Credit losses | V.51 | (28,262,627) | ? | - |
| Impairment losses | V.52 | (2,584,183,258) | ? | (1,239,588,763) |
| Gains from asset disposals | V.53 | 79,029 | ? | 1,067,273 |
| ? | ? | ? | ? | |
| III. Operating profit | ? | 398,668,981 | ? | 4,008,170,903 |
| ? | ? | ? | ? | ? |
| Add: Non-operating income | V.54 | 208,430,198 | ? | 169,429,515 |
| Less: Non-operating expenses | V.54 | 103,349,078 | ? | 55,310,251 |
| ? | ? | ? | ? | ? |
| IV. Profit before income tax | ? | 503,750,101 | ? | 4,122,290,167 |
| ? | ? | ? | ? | ? |
| Less: Income tax expenses | V.55 | 979,991,504 | ? | 1,242,416,094 |
| ? | ? | ? | ? | ? |
| V. Net (loss) / profit for the year | ? | (476,241,403) | ? | 2,879,874,073 |
| ? | ? | ? | ? | ? |
| Net profit attributable to shareholders of the Company | ? | 1,918,643,871 | ? | 3,435,127,975 |
| Non-controlling interests | ? | (2,394,885,274) | ? | (555,253,902) |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Consolidated income statementfor the year ended 31 December 2019 (continued)
(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| VI. Other comprehensive income, net of tax | V.39 | 228,445,653 | ? | (249,814,869) |
| (1) Other comprehensive income (net of tax) attributable to shareholders of the Company | ? | 236,859,881 | ? | (275,861,185) |
| 1 Items that will not be reclassified to profit or loss: | ? | |||
| a. Other comprehensive income recognised under equity method | 366,930,596 | - | ||
| b. Changes in fair value of investments in other equity instruments | ? | (36,688,762) | ? | - |
| 2 Items that may be reclassified to profit or loss | ? | |||
| a. Share of other comprehensive income of the equity-accounted investee that may be reclassified to profit or loss | ? | - | ? | (202,998,615) |
| b. Gains or losses arising from changes in fair value of available for-sale financial assets | ? | - | ? | (136,009,652) |
| c. Translation differences arising from translation of foreign currency financial statements | ? | (93,381,953) | ? | 63,147,082 |
| (2) Other comprehensive income (net of tax) attributable to non- controlling interests | ? | (8,414,228) | ? | 26,046,316 |
| ? |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Consolidated income statementfor the year ended 31 December 2019 (continued)
(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| VII. Total comprehensive income for the year | ? | (247,795,750) | ? | 2,630,059,204 |
| ? | ? | ? | ? | ? |
| Total comprehensive income attributable to shareholders of the Company | ? | 2,155,503,752 | ? | 3,159,266,790 |
| Total comprehensive income attributable to non-controlling interests | ? | (2,403,299,502) | ? | (529,207,586) |
| ? | ? | ? | ? | ? |
| VIII. Earnings per share | ? | ? | ? | ? |
| (1) Basic earnings per share | V.56 | 0.05 | ? | 0.10 |
| (2) Diluted earnings per share | V.56 | 0.05 | ? | 0.10 |
| ? | ? | ? | ? | ? |
These financial statements were approved by the Board of Directors of the Company on 24 April 2020.
?
| Chen Yanshun Chairman of the Board | Liu Xiaodong Chief Executive Officer | Sun Yun Chief Financial Officer | Yang Xiao Ping The head of the accounting department | (Company stamp) | ||||
| (Signature and stamp) | (Signature and stamp) | (Signature and stamp) | (Signature and stamp) |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Company income statementfor the year ended 31 December 2019(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| I. Operating income | XIV.16 | 4,785,387,719 | ? | 4,048,349,688 |
| ? | ? | ? | ? | ? |
| II. Less: Operating costs | ? | 29,852,957 | ? | 51,274,428 |
| Taxes and surcharges | XIV.17 | 41,488,521 | ? | 44,129,874 |
| Selling and distribution expenses | ? | - | ? | 561,601 |
| General and administrative expenses | ? | 741,464,420 | ? | 744,597,442 |
| Research and development costs | XIV.18 | 2,184,751,287 | ? | 1,247,889,953 |
| Finance expenses | XIV.19 | 903,880,632 | ? | 1,014,420,709 |
| Including: Interest expense | ? | 934,776,554 | ? | 1,055,792,484 |
| Interest income | ? | 41,156,445 | ? | 44,583,524 |
| Add: Other income | XIV.20 | 945,400,212 | ? | 995,284,363 |
| Investment income | XIV.21 | 2,185,769,102 | ? | 928,309,899 |
| Including: Income/(Losses) from investment in associates and joint ventures | ? | 244,595,829 | ? | (12,001,705) |
| Credit losses | XIV.22 | (62,558,750) | ? | - |
| Impairment losses | ? | (32,000,000) | ? | - |
| ? | ? | ? | ? | ? |
| III. Operating profit | ? | 3,920,560,466 | ? | 2,869,069,943 |
| ? | ? | ? | ? | ? |
| Add: Non-operating income | XIV.23 | 4,120,515 | ? | 4,336,405 |
| Less: Non-operating expenses | XIV.23 | 8,305,483 | ? | 8,668,410 |
| ? | ? | ? | ? | ? |
| IV. Profit before income tax | ? | 3,916,375,498 | ? | 2,864,737,938 |
| ? | ? | ? | ? | ? |
| Less: Income tax expenses | XIV.24 | 230,811,042 | ? | 234,879,588 |
| ? | ? | ? | ? | ? |
| V. Net profit for the year | ? | 3,685,564,456 | ? | 2,629,858,350 |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Company income statementfor the year ended 31 December 2019 (continued)
(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| VI. Other comprehensive income, net of tax | XIV.14 | 389,401,782 | ? | (220,605,074) |
| (1) Items that will not be reclassified to profit or loss | ? | ? | ? | ? |
| 1. Other comprehensive income recognised under equity method | 366,930,596 | - | ||
| 2. Changes in fair value of investments in other equity instruments | ? | 22,471,186 | ? | - |
| (2) Items that may be reclassified to profit or loss | ? | ? | ? | ? |
| 1. Other comprehensive income recognised under equity method | ? | - | ? | (202,778,999) |
| 2. Gains or losses arising from changes in fair value of available-for-sale financial assets | ? | - | ? | (17,826,075) |
| ? | ||||
| ? | ? | ? | ? | ? |
| VII. Total comprehensive income for the year | ? | 4,074,966,238 | ? | 2,409,253,276 |
These financial statements were approved by the Board of Directors of the Company on 24 April 2020.
?
| Chen Yanshun Chairman of the Board | Liu Xiaodong Chief Executive Officer | Sun Yun Chief Financial Officer | Yang Xiao Ping The head of the accounting department | (Company stamp) | ||||
| (Signature and stamp) | (Signature and stamp) | (Signature and stamp) | (Signature and stamp) |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Consolidated cash flow statementfor the year ended 31 December 2019
(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| I. Cash flows from operating activities: | ? | ? | ? | ? |
| Proceeds from sale of goods and rendering of services | ? | 131,939,100,428 | ? | 105,589,411,120 |
| Refund of taxes | ? | 9,211,921,444 | ? | 6,513,812,910 |
| Government grants | ? | 4,220,459,216 | ? | 2,195,202,400 |
| Proceeds from other operating activities | ? | 151,842,353 | ? | 770,921,360 |
| ? | ? | ? | ? | ? |
| Sub-total of cash inflows | ? | 145,523,323,441 | ? | 115,069,347,790 |
| ? | ? | ? | ? | ? |
| Payment for goods and services | ? | (103,103,588,751) | ? | (75,700,548,251) |
| Payment to and for employees | ? | (11,274,232,340) | ? | (9,162,421,738) |
| Payment of various taxes | ? | (2,151,136,164) | ? | (1,619,256,288) |
| Payment for other operating activities | ? | (2,911,286,992) | ? | (2,903,074,317) |
| ? | ? | ? | ? | ? |
| Sub-total of cash outflows | ? | (119,440,244,247) | ? | (89,385,300,594) |
| ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? |
| Net cash inflows from operating activities | V.57(1) | 26,083,079,194 | ? | 25,684,047,196 |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Consolidated cash flow statementfor the year ended 31 December 2019 (continued)(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| II. Cash flows from investing activities: | ? | ? | ? | ? |
| Proceeds from disposal of investments | ? | 33,515,656,910 | ? | 59,211,537,932 |
| Investment returns received | ? | 93,386,997 | ? | 356,050,182 |
| Net proceeds from disposal of fixed assets, intangible assets and other long-term assets | ? | 19,822,394 | ? | 98,644,621 |
| Net amount received from subsidiaries | V.57(2) | 33,640,033 | ? | 6,801,508,810 |
| Proceeds from other investing activities | ? | 2,287,178,748 | ? | 1,808,988,695 |
| ? | ? | ? | ? | ? |
| Sub-total of cash inflows | ? | 35,949,685,082 | ? | 68,276,730,240 |
| ? | ? | ? | ? | ? |
| Payment for acquisition of fixed assets, intangible assets and other long-term assets | ? | (49,415,897,698) | ? | (54,520,544,965) |
| Payment for acquisition of investments | ? | (33,949,914,820) | ? | (60,819,720,633) |
| ? | ? | ? | ? | ? |
| Sub-total of cash outflows | ? | (83,365,812,518) | ? | (115,340,265,598) |
| ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? |
| Net cash outflows from investing activities | ? | (47,416,127,436) | ? | (47,063,535,358) |
| ? | ? | ? | ? | ? |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Consolidated cash flow statementfor the year ended 31 December 2019 (continued)(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| III. Cash flows from financing activities: | ? | ? | ? | ? |
| Proceeds from investors | ? | 14,066,343,889 | ? | 4,294,161,400 |
| Including: Proceeds from non-controlling shareholders of subsidiaries | ? | 14,066,343,889 | ? | 4,294,161,400 |
| Proceeds from issuance of debentures | ? | 8,075,977,975 | ? | - |
| Proceeds from borrowings | ? | 53,575,950,243 | ? | 38,368,279,407 |
| Net amount of monetary movements for pledging loans | ? | - | ? | 176,637,743 |
| Proceeds from other financing activities | ? | 6,000,000 | ? | 155,194,921 |
| ? | ? | ? | ? | ? |
| Sub-total of cash inflows | ? | 75,724,272,107 | ? | 42,994,273,471 |
| Repayments of borrowings | ? | (36,944,543,462) | ? | (21,274,318,530) |
| Payment for dividends or interest | ? | (6,746,163,635) | ? | (5,806,323,938) |
| Including: Dividends paid to non-controlling shareholders of subsidiaries | ? | (10,911,242) | ? | (4,319,286) |
| Net amount of monetary movements for pledging loans | ? | (287,261,600) | ? | - |
| Payment for other financing activities | ? | (3,967,658,080) | ? | (347,060,613) |
| ? | ? | ? | ? | ? |
| Sub-total of cash outflows | ? | (47,945,626,777) | ? | (27,427,703,081) |
| ? | ? | ? | ? | ? |
| ? | ? | ? | ? | |
| Net cash inflow from financing activities | ? | 27,778,645,330 | ? | 15,566,570,390 |
| ? | ? | ? | ? | ? |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Consolidated cash flow statementfor the year ended 31 December 2019 (continued)
(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | ? | 474,027,965 | ? | 1,250,326,709 |
| ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? |
| V. Net increase / (decrease) in cash and cash equivalents | V.57(1) | 6,919,625,053 | ? | (4,562,591,063) |
| ? | ? | ? | ? | ? |
| Add: Cash and cash equivalents at the beginning of the year | ? | 43,350,696,520 | ? | 47,913,287,583 |
| ? | ? | ? | ? | ? |
| VI. Cash and cash equivalents at the end of the year | V.57(3) | 50,270,321,573 | ? | 43,350,696,520 |
These financial statements were approved by the Board of Directors of the Company on 24 April 2020.
| Chen Yanshun Chairman of the Board | Liu Xiaodong Chief Executive Officer | Sun Yun Chief Financial Officer | Yang Xiao Ping The head of the accounting department | (Company stamp) | ||||
| (Signature and stamp) | (Signature and stamp) | (Signature and stamp) | (Signature and stamp) |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Company cash flow statementfor the year ended 31 December 2019
(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| I. Cash flows from operating activities: | ? | ? | ? | ? |
| Proceeds from sale of goods and rendering of services | ? | 6,487,868,213 | ? | 4,053,318,155 |
| Refund of taxes | ? | - | ? | 23,508,537 |
| Proceeds from other operating activities | ? | 53,961,183 | ? | 1,705,344,020 |
| ? | ? | ? | ? | ? |
| Sub-total of cash inflows | ? | 6,541,829,396 | ? | 5,782,170,712 |
| ? | ? | ? | ? | ? |
| Payment for goods and services | ? | (1,576,266,273) | ? | (976,219,250) |
| Payment to and for employees | ? | (942,542,615) | ? | (957,780,812) |
| Payment of various taxes | ? | (528,982,127) | ? | (284,079,728) |
| Payment for other operating activities | ? | (1,042,770,921) | ? | (102,575,476) |
| ? | ? | ? | ? | ? |
| Sub-total of cash outflows | ? | (4,090,561,936) | ? | (2,320,655,266) |
| ? | ? | |||
| ? | ? | |||
| Net cash inflows from operating activities | XIV.25(1) | 2,451,267,460 | ? | 3,461,515,446 |
| ? | ? | ? | ? | ? |
| II. Cash flows from investing activities: | ? | ? | ? | ? |
| Proceeds from disposal of investments | ? | 191,270,404 | ? | 506,145,151 |
| Investment returns received | ? | 1,006,558,146 | ? | 971,599,836 |
| Net proceeds from disposal of fixed assets | ? | 2,791,799 | ? | 6,384,696 |
| Proceeds from other investing activities | ? | 3,334,425,767 | ? | 3,333,764,245 |
| ? | ? | ? | ? | ? |
| Sub-total of cash inflows | ? | 4,535,046,116 | ? | 4,817,893,928 |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Company cash flow statementfor the year ended 31 December 2019 (continued)(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| II. Cash flows from investing activities: (continued): | ? | ? | ? | ? |
| Payment for acquisition of fixed assets, intangible assets and other long-term assets | ? | (1,158,649,934) | ? | (295,214,844) |
| Payment for acquisition of investments | ? | (15,438,773,685) | ? | (22,553,409,200) |
| Payment for other investing activities | ? | (5,866,921,400) | ? | (257,000,000) |
| ? | ? | ? | ? | ? |
| Sub-total of cash outflows | ? | (22,464,345,019) | ? | (23,105,624,044) |
| ? | ? | ? | ||
| ? | ? | ? | ? | ? |
| Net cash outflows from investing activities | ? | (17,929,298,903) | ? | (18,287,730,116) |
| ? | ? | ? | ? | ? |
| III. Cash flows from financing activities: | ? | ? | ? | ? |
| Proceeds from issuance of debentures | ? | 8,000,000,000 | ? | - |
| Proceeds from borrowings | ? | 19,341,142,361 | ? | 11,367,000,000 |
| Proceeds from other financing activities | ? | 14,869,430,596 | ? | 19,698,642,218 |
| ? | ? | ? | ? | ? |
| Sub-total of cash inflows | ? | 42,210,572,957 | ? | 31,065,642,218 |
| ? | ? | ? | ? | ? |
| Repayments of borrowings | ? | (17,830,000,000) | ? | (4,597,640,000) |
| Payment for dividends and interest | ? | (2,289,037,712) | ? | (2,795,130,756) |
| Payment for other financing activities | ? | (6,801,944,858) | ? | (8,150,000,000) |
| ? | ? | ? | ? | ? |
| Sub-total of cash outflows | ? | (26,920,982,570) | ? | (15,542,770,756) |
| ? | ? | ? | ||
| ? | ? | ? | ? | ? |
| Net cash inflows from financing activities | ? | 15,289,590,387 | ? | 15,522,871,462 |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Company cash flow statementfor the year ended 31 December 2019 (continued)(Expressed in Renminbi Yuan)
| ? | Note | 2019 | ? | 2018 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | ? | 39,397,054 | ? | 142,355,757 |
| ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? |
| V. Net (decrease)/increase in cash and cash equivalents | XIV.25(1) | (149,044,002) | ? | 839,012,549 |
| ? | ? | ? | ? | ? |
| Add: Cash and cash equivalents at the beginning of the year | ? | 3,829,814,050 | ? | 2,990,801,501 |
| ? | ? | ? | ? | ? |
| VI. Cash and cash equivalents at the end of the year | XIV.25(2) | 3,680,770,048 | ? | 3,829,814,050 |
These financial statements were approved by the Board of Directors of the Company on 24 April 2020.
?
| Chen Yanshun Chairman of the Board | Liu Xiaodong Chief Executive Officer | Sun Yun Chief Financial Officer | Yang Xiao Ping The head of the accounting department | (Company stamp) | ||||
| (Signature and stamp) | (Signature and stamp) | (Signature and stamp) | (Signature and stamp) |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Consolidated statement of changes in shareholders’ equityfor the year ended 31 December 2019(Expressed in Renminbi Yuan)
| ? | Equity attributable to shareholders of the Company | ? | ? | ? | ? | |||||||||||||
| ? | Note | Share capital | ? | Other equity instruments | ? | Capital reserve | ? | Other comprehensive income | ? | Surplus reserve | ? | Retained earnings | ? | Sub-total | ? | Non-controlling interests | ? | Total shareholders’ equity |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| I. Balance at the beginning of the year | ? | 34,798,398,763 | ? | - | ? | 38,213,100,596 | ? | (125,258,252) | ? | 1,152,626,310 | ? | 11,817,881,286 | ? | 85,856,748,703 | ? | 34,500,548,858 | ? | 120,357,297,561 |
| Add: Changes in accounting policies | III.33 | - | ? | - | ? | - | ? | (166,598,716) | ? | - | ? | 159,238,247 | ? | (7,360,469) | ? | (1,122,360) | ? | (8,482,829) |
| Adjusted balance at the beginning of the year | ? | 34,798,398,763 | ? | - | ? | 38,213,100,596 | ? | (291,856,968) | ? | 1,152,626,310 | ? | 11,977,119,533 | ? | 85,849,388,234 | ? | 34,499,426,498 | ? | 120,348,814,732 |
| II. Changes in equity during the year | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| (1) Total comprehensive income | ? | - | ? | - | ? | - | ? | 236,859,881 | ? | - | ? | 1,918,643,871 | ? | 2,155,503,752 | ? | (2,403,299,502) | ? | (247,795,750) |
| (2) Shareholders’ contributions | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - |
| 1. Contribution by non-controlling interests | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | 14,066,343,889 | ? | 14,066,343,889 |
| 2. Non-controlling shareholders’ decrease of capital | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | (40,233,450) | ? | (40,233,450) |
| 3. Contribution by holders of other equity instruments | V.37 | - | ? | 7,957,047,264 | ? | - | ? | - | ? | - | ? | - | ? | 7,957,047,264 | ? | - | ? | 7,957,047,264 |
| 4. Business combinations involving entities not under common control | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | 11,310,000 | ? | 11,310,000 |
| 5. Change in shareholding ratio of subsidiaries | V.38 | - | ? | - | ? | 123,068,274 | ? | - | ? | - | ? | - | ? | 123,068,274 | ? | (123,068,274) | ? | - |
| (3) Appropriation of profits | V.41 | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| 1. Appropriation for surplus reserve | ? | - | ? | - | ? | - | ? | - | ? | 368,556,446 | ? | (368,556,446) | ? | - | ? | - | ? | - |
| 2. Distributions to shareholders | ? | - | ? | - | ? | - | ? | - | ? | - | ? | (1,043,951,963) | ? | (1,043,951,963) | ? | (10,911,242) | ? | (1,054,863,205) |
| 3. Accrued interest on holders of other equity instruments | - | 56,109,589 | - | - | - | (56,109,589) | - | - | - | |||||||||
| (4) Transfers within equity | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| 1.Transfer of other | V.12 | - | ? | - | ? | - | ? | 50,430,448 | ? | (5,043,047) | ? | (45,387,401) | ? | - | ? | - | ? | - |
| comprehensive income to retained earnings | ||||||||||||||||||
| 2.Others | V.38 | - | ? | - | ? | 17,073,494 | ? | - | ? | - | ? | - | ? | 17,073,494 | ? | - | ? | 17,073,494 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| III. Balance at the end of the year | ? | 34,798,398,763 | ? | 8,013,156,853 | ? | 38,353,242,364 | ? | (4,566,639) | ? | 1,516,139,709 | ? | 12,381,758,005 | ? | 95,058,129,055 | ? | 45,999,567,919 | ? | 141,057,696,974 |
These financial statements were approved by the Board of Directors of the Company on 24 April 2020.
| Chen Yanshun Chairman of the Board | Liu Xiaodong Chief Executive Officer | Sun Yun Chief Financial Officer | Yang Xiao Ping The head of the accounting department | (Company stamp) | ||||
| (Signature and stamp) | (Signature and stamp) | (Signature and stamp) | (Signature and stamp) |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Consolidated statement of changes in shareholders’ equityfor the year ended 31 December 2018(Expressed in Renminbi Yuan)
| ? | ? | Equity attributable to shareholders of the Company | ? | ? | ? | ? | ||||||||||
| ? | Share capital | ? | Capital reserve | ? | Other comprehensive income | ? | Surplus reserve | ? | Retained earnings | ? | Sub-total | ? | Non-controlling interests | ? | Total shareholders’ equity | |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| I. Balance at the beginning of the year | ? | 34,798,398,763 | ? | 38,585,515,122 | ? | 150,602,933 | ? | 889,640,475 | ? | 10,385,659,084 | ? | 84,809,816,377 | ? | 19,474,446,456 | ? | 104,284,262,833 |
| II. Changes in equity during the year | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| (1) Total comprehensive income | ? | - | ? | - | ? | (275,861,185) | ? | - | ? | 3,435,127,975 | ? | 3,159,266,790 | ? | (529,207,586) | ? | 2,630,059,204 |
| (2) Shareholders’ contributions of capital | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| 1. Contribution by non-controlling interests | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | 4,494,161,400 | ? | 4,494,161,400 |
| 2. Business combinations involving entities not under common control | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | 11,541,782,339 | ? | 11,541,782,339 |
| 3. Change in shareholding ratio of subsidiaries | - | ? | 3,754,159 | ? | - | ? | - | ? | - | ? | 3,754,159 | ? | (3,402,793) | ? | 351,366 | |
| (3) Appropriation of profits | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | |
| 1. Appropriation for surplus reserve | ? | - | ? | - | ? | - | ? | 262,985,835 | ? | (262,985,835) | ? | - | ? | - | ? | - |
| 2. Distributions to shareholders | ? | - | ? | - | ? | - | ? | - | ? | (1,739,919,938) | ? | (1,739,919,938) | ? | (18,316,894) | ? | (1,758,236,832) |
| (4) Others | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| 1. Equity changes arising from acquisition of non-controlling interests | - | ? | (378,593,283) | ? | - | ? | - | ? | - | ? | (378,593,283) | ? | (458,914,064) | ? | (837,507,347) | |
| 2. Others | - | ? | 2,424,598 | ? | - | ? | - | ? | - | ? | 2,424,598 | ? | - | ? | 2,424,598 | |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| III. BalanceC at the end of the year | ? | 34,798,398,763 | ? | 38,213,100,596 | ? | (125,258,252) | ? | 1,152,626,310 | ? | 11,817,881,286 | ? | 85,856,748,703 | ? | 34,500,548,858 | ? | 120,357,297,561 |
These financial statements were approved by the Board of Directors of the Company on 24 April 2020.
?
| Chen Yanshun Chairman of the Board | Liu Xiaodong Chief Executive Officer | Sun Yun Chief Financial Officer | Yang Xiao Ping The head of the accounting department | (Company stamp) | ||||
| (Signature and stamp) | (Signature and stamp) | (Signature and stamp) | (Signature and stamp) |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Company statement of changes in shareholders’ equityfor the year ended 31 December 2019(Expressed in Renminbi Yuan)
| ? | ?Note | Share capital | ? | Other equity instruments | ? | Capital reserve | ? | Other comprehensive income | ? | Surplus reserve | ? | Retained earnings | ? | Total shareholders’ equity |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| I. Balance at the beginning of the year | ? | 34,798,398,763 | ? | -? | ? | 37,590,966,191 | ? | (28,507,585) | ? | 1,152,626,310 | ? | 2,392,243,713 | ? | 75,905,727,392 |
| Add: Changes in accounting policies | III.33 | - | ? | - | ? | - | ? | (217,686,069) | ? | - | ? | 217,686,069 | ? | - |
| Adjusted balance at the beginning of the year | ? | 34,798,398,763 | ? | - | ? | 37,590,966,191 | ? | (246,193,654) | ? | 1,152,626,310 | ? | 2,609,929,782 | ? | 75,905,727,392 |
| II. Changes in equity during the year | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| (1) Total comprehensive income | ? | - | ? | - | ? | - | ? | 389,401,782 | ? | - | ? | 3,685,564,456 | ? | 4,074,966,238 |
| (2) Shareholders’ contributions of capital | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Contribution by holders of other equity instruments | ? | - | ? | 7,957,047,264 | ? | - | ? | - | ? | - | ? | - | ? | 7,957,047,264 |
| (3) Appropriation of profits | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| 1. Appropriation for surplus reserve | ? | - | ? | - | ? | - | ? | - | ? | 368,556,446 | ? | (368,556,446) | ? | - |
| 2. Distributions to shareholders | ? | - | ? | - | ? | - | ? | - | ? | - | ? | (1,043,951,963) | ? | (1,043,951,963) |
| 3. Accrued interest on holders of other equity instruments | - | 56,109,589 | - | - | - | (56,109,589) | - | |||||||
| (4) Transfers within equity | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| 1. Transfer of other comprehensive income to retained earnings | ? | - | ? | - | ? | - | ? | 50,430,448 | ? | (5,043,047) | ? | (45,387,401) | ? | - |
| 2. Others | ? | - | ? | - | ? | 17,073,494 | ? | - | ? | - | ? | - | ? | 17,073,494 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| III. Balance at the end of the year | ? | 34,798,398,763 | ? | 8,013,156,853 | ? | 37,608,039,685 | ? | 193,638,576 | ? | 1,516,139,709 | ? | 4,781,488,839 | ? | 86,910,862,425 |
These financial statements were approved by the Board of Directors of the Company on 24 April 2020.
?
| Chen Yanshun Chairman of the Board | Liu Xiaodong Chief Executive Officer | Sun Yun Chief Financial Officer | Yang Xiao Ping The head of the accounting department | (Company stamp) | ||||
| (Signature and stamp) | (Signature and stamp) | (Signature and stamp) | (Signature and stamp) |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Company statement of changes in shareholders’ equityfor the year ended 31 December 2018
(Expressed in Renminbi Yuan)
| ? | ? | Share capital | ? | Capital reserve | ? | Other comprehensive income | ? | Surplus reserve | ? | Retained earnings | ? | Total shareholders’ equity |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| I. Balance at the beginning of the year | ? | 34,798,398,763 | ? | 37,588,541,593 | ? | 192,097,489 | ? | 889,640,475 | ? | 1,765,291,136 | ? | 75,233,969,456 |
| II. Changes in equity during the year | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| (1) Total comprehensive income | ? | - | ? | - | ? | (220,605,074) | ? | - | ? | 2,629,858,350 | ? | 2,409,253,276 |
| (2) Appropriation of profits | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| 1. Appropriation for surplus reserve | ? | - | ? | - | ? | - | ? | 262,985,835 | ? | (262,985,835) | ? | - |
| 2. Distributions to shareholders | ? | - | ? | - | ? | - | ? | - | ? | (1,739,919,938) | ? | (1,739,919,938) |
| (3) Others | ? | - | ? | 2,424,598 | ? | - | ? | - | ? | - | ? | 2,424,598 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| III. Balance at the end of the year | ? | 34,798,398,763 | ? | 37,590,966,191 | ? | (28,507,585) | ? | 1,152,626,310 | ? | 2,392,243,713 | ? | 75,905,727,392 |
These financial statements were approved by the Board of Directors of the Company on 24 April 2020.
?
| Chen Yanshun Chairman of the Board | Liu Xiaodong Chief Executive Officer | Sun Yun Chief Financial Officer | Yang Xiao Ping The head of the accounting department | (Company stamp) | ||||
| (Signature and stamp) | (Signature and stamp) | (Signature and stamp) | (Signature and stamp) |
The notes on pages 24 to 164 form part of these financial statements.
BOE Technology Group Co., Ltd.Notes to the financial statements(Expressed in Renminbi Yuan unless otherwise indicated)
I. Company status
BOE Technology Group Company Limited (the “Company”) is a company limited by shares established on 9 April 1993 inBeijing, with its head office located at Beijing. The parent of the Company and the Company’s ultimate holding company isBeijing Electronics Holdings Co., Ltd. (“Electronics Holdings”).
The Company and its subsidiaries (referred to as “the Group”) comprise three main business segments: Display device andsensor device business, Smart system business and Healthcare service business. For information about the subsidiaries of theCompany, refer to Note VII. During the reporting period, the information about increases and decreases in the Group’ssubsidiaries is disclosed in Note VI.
II. Basis of preparation
The financial statements have been prepared on the going concern basis.
The Group has adopted the revised “Accounting Standard for Business Enterprises No. 22 – Financial Instruments:
Recognition and Measurement” and related new financial instruments standards, issued by the Ministry of Finance (“MOF”)of the People’s Republic of China in 2017, since 1 January 2019 (see Note III.33).
Certain overseas subsidiaries of the Group have adopted the revised “Accounting Standard for Business Enterprises No. 14 –Revenue” and “Accounting Standard for Business Enterprises No. 21 – Leases”, issued by the Ministry of Finance (“MOF”)of the People’s Republic of China in 2017 and 2018 respectively. The adoption of the above standards do not have a materialimpact on the Group ’s consolidated financial position and consolidated financial performance.
III. Significant accounting policies and accounting estimates
1 Statement of compliance
The financial statements have been prepared in accordance with the requirements of Accounting Standards for BusinessEnterprises or referred to as China Accounting Standards (“CAS”). These financial statements present truly and completelythe consolidated financial position and financial position of the Company as at 31 December 2019, and the consolidatedfinancial performance and financial performance and the consolidated cash flows and cash flows of the Company for the yearthen ended.
These financial statements also comply with the disclosure requirements of “Regulation on the Preparation of InformationDisclosures by Companies Issuing Securities, No. 15: General Requirements for Financial Reports” as revised by the ChinaSecurities Regulatory Commission (“CSRC”) in 2014.
2 Accounting period
The accounting period is from 1 January to 31 December.
3 Operating cycle
The Company takes the period from the acquisition of assets for processing to until the ultimate realisation of cash or cashequivalents as a normal operating cycle. The operating cycle of the Company is usually less than 12 months.
4 Functional currency
The Company’s functional currency is Renminbi and these financial statements are presented in Renminbi. Functionalcurrency is determined by the Company and its subsidiaries on the basis of the currency in which major income and costs aredenominated and settled. Some of the Company’s subsidiaries have functional currencies that are different from theCompany’s functional currency. Their financial statements have been translated based on the accounting policy set out inNote III.8.
5 Accounting treatments for business combinations involving entities under common control and not under common control
(1) Business combinations involving entities under common control
A business combination involving entities under common control is a business combination in which all of the combiningentities are ultimately controlled by the same party or parties both before and after the business combination, and that controlis not transitory. The assets acquired and liabilities assumed are measured based on their carrying amounts in the consolidatedfinancial statements of the ultimate controlling party at the combination date. The difference between the carrying amount ofthe net assets acquired and the consideration paid for the combination (or the total par value of shares issued) is adjustedagainst share premium in the capital reserve, with any excess adjusted against retained earnings. Any costs directlyattributable to the combination are recognized in profit or loss when incurred. The combination date is the date on which onecombining entity obtains control of other combining entities.
(2) Business combinations involving entities not under common control
A business combination involving entities not under common control is a business combination in which all of the combiningentities are not ultimately controlled by the same party or parties both before and after the business combination. Where (1)the aggregate of the acquisition-date fair value of assets transferred (including the acquirer’s previously held equity interest inthe acquiree), liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of theacquiree, exceeds (2) the acquirer’s interest in the acquisition-date fair value of the acquiree’s identifiable net assets, thedifference is recognized as goodwill (see Note III.17). If (1) is less than (2), the difference is recognized in profit or loss forthe current period. Acquisition-related costs are expensed when incurred. The acquiree’s identifiable asset, liabilities andcontingent liabilities, if the recognition criteria are met, are recognized by the Group at their acquisition-date fair value. Theacquisition date is the date on which the acquirer obtains control of the acquiree.
For a business combination involving entities not under common control and achieved in stages, the Group remeasures itspreviously-held equity interest in the acquiree to its acquisition-date fair value and recognises any resulting differencebetween the fair value and the carrying amount as investment income or other comprehensive income for the current period.In addition, any amount recognised in other comprehensive income and other changes in the owners’ equity under equityaccounting in prior reporting periods relating to the previously-held equity interest that may be reclassified to profit or lossare transferred to investment income at the date of acquisition (see Note III.11(2)(b)); Any previously-held equity interest thatis designated as equity investment at fair value through other comprehensive income, the other comprehensive incomerecognised in prior reporting periods is transferred to retained earnings and surplus reserve at the date of acquisition.
6 Consolidated financial statements
(1) General principles
The scope of consolidated financial statements is based on control and the consolidated financial statements comprise theCompany and its subsidiaries. Control exists when the investor has all of following: power over the investee; exposure, orrights, to variable returns from its involvement with the investee and has the ability to affect those returns through its powerover the investee. When assessing whether the Group has power, only substantive rights (held by the Group and other parties)are considered. The financial position, financial performance and cash flows of subsidiaries are included in the consolidatedfinancial statements from the date that control commences until the date that control ceases.
Non-controlling interests are presented separately in the consolidated balance sheet within shareholders’ equity. Net profit orloss attributable to non-controlling shareholders is presented separately in the consolidated income statement below the netprofit line item. Total comprehensive income attributable to non-controlling shareholders is presented separately in theconsolidated income statement below the total comprehensive income line item.
When the amount of loss for the current period attributable to the non-controlling shareholders of a subsidiary exceeds thenon-controlling shareholders’ share of the opening owners’ equity of the subsidiary, the excess is still allocated against thenon-controlling interests.
When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Companymakes necessary adjustments to the financial statements of the subsidiary based on the Company’s own accounting period oraccounting policies. Intra-group balances and transactions, and any unrealised profit or loss arising from intra-grouptransactions, are eliminated when preparing the consolidated financial statements. Unrealised losses resulting fromintra-group transactions are eliminated in the same way as unrealised gains, unless they represent impairment losses that arerecognised in the financial statements.
(2) Subsidiaries acquired through a business combination
Where a subsidiary was acquired during the reporting period, through a business combination involving entities undercommon control, the financial statements of the subsidiary are included in the consolidated financial statements based on thecarrying amounts of the assets and liabilities of the subsidiary in the financial statements of the ultimate controlling party as ifthe combination had occurred at the date that the ultimate controlling party first obtained control. The opening balances andthe comparative figures of the consolidated financial statements are also restated.
Where a subsidiary was acquired during the reporting period, through a business combination involving entities not undercommon control, the identifiable assets and liabilities of the acquired subsidiaries are included in the scope of consolidationfrom the date that control commences, based on the fair value of those identifiable assets and liabilities at the acquisitiondate.
(3) Disposal of subsidiaries
When the Group loses control over a subsidiary, any resulting disposal gains or losses are recognised as investment incomefor the current period. The remaining equity interests is re-measured at its fair value at the date when control is lost, anyresulting gains or losses are also recognised as investment income for the current period.
When the Group loses control of a subsidiary in multiple transactions in which it disposes of its long-term equity investmentin the subsidiary in stages, the following are considered to determine whether the Group should account for the multipletransactions as a bundled transaction:
- arrangements are entered into at the same time or in contemplation of each other;- arrangements work together to achieve an overall commercial effect;- the occurrence of one arrangement is dependent on the occurrence of at least one other arrangement;- one arrangement considered on its own is not economically justified, but it is economically justified when consideredtogether with other arrangements.
If each of the multiple transactions does not form part of a bundled transaction, the transactions conducted before the loss ofcontrol of the subsidiary are accounted for in accordance with the accounting policy for partial disposal of equity investmentin subsidiaries where control is retained (see Note III.6(4)).
If each of the multiple transactions forms part of a bundled transaction which eventually results in the loss of control in thesubsidiary, these multiple transactions are accounted for as a single transaction. In the consolidated financial statements, thedifference between the consideration received and the corresponding proportion of the subsidiary’s net assets (calculatedcontinuously from the acquisition date) in each transaction prior to the loss of control shall be recognised in othercomprehensive income and transferred to profit or loss when the parent eventually loses control of the subsidiary.
(4) Changes in non-controlling interests
Where the Company acquires a non-controlling interest from a subsidiary’s non-controlling shareholders or disposes of aportion of an interest in a subsidiary without a change in control, the difference between the proportion interests of thesubsidiary’s net assets being acquired or disposed and the amount of the consideration paid or received is adjusted to thecapital reserve (share premium) in the consolidated balance sheet, with any excess adjusted to retained earnings.
7、 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily withdraw on demand, and short-term, highlyliquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changein value.
8、 Foreign currency transactions and translation of foreign currency financial statements
When the Group receives capital in foreign currencies from investors, the capital is translated to Renminbi at the spotexchange rate at the date of the receipt. Other foreign currency transactions are, on initial recognition, translated to Renminbiat the spot exchange rates on the dates of the transactions.
Monetary items denominated in foreign currencies are translated to Renminbi at the spot exchange rate at the balance sheetdate. The resulting exchange differences are generally recognised in profit or loss, unless they arise from the re-translation ofthe principal and interest of specific borrowings for the acquisition and construction of qualifying assets (see Note III.15).Non-monetary items that are measured at historical cost in foreign currencies are translated to Renminbi using the exchangerate at the transaction date. Non-monetary items that are measured at fair value in foreign currencies are translated using theexchange rate at the date the fair value is determined. The resulting exchange differences are recognised in profit or loss,except for the differences arising from the re-translation of equity investments at fair value through other comprehensiveincome, which are recognised in other comprehensive income.
In translating the financial statements of a foreign operation, assets and liabilities of foreign operation are translated toRenminbi at the spot exchange rate at the balance sheet date. Equity items, excluding retained earnings and the translationdifferences in other comprehensive income, are translated to Renminbi at the spot exchange rates at the transaction dates.Income and expenses of foreign operation are translated to Renminbi at the spot exchange rates at the transaction dates. Theresulting translation differences are recognised in other comprehensive income. The translation differences accumulated inshareholders’ equity with respect to a foreign operation are transferred to profit or loss in the period when the foreignoperation is disposed.
9、 Financial instruments
Financial instruments include cash at bank and on hand, investments in debt and equity securities other than those classifiedas long-term equity investments (see Note III.11), receivables, payables, loans and borrowings, debentures payable and sharecapital.
(1) Recognition and initial measurement of financial assets and financial liabilities
A financial asset or financial liability is recognised in the balance sheet when the Group becomes a party to the contractualprovisions of a financial instrument.
Financial assets (unless it is a trade receivable without a significant financing component) and financial liabilities is measuredinitially at fair value. For financial assets and financial liabilities at fair value through profit or loss, any related directlyattributable transaction costs are charged to profit or loss; for other categories of financial assets and financial liabilities, anyrelated directly attributable transaction costs are included in their initial costs. A trade receivable without a significantfinancing component is initially measured at the transaction price according to Note III.22.
(2) Classification and subsequent measurement of financial assets
(a) Classification of financial assets
The classification of financial assets is generally based on the business model in which a financial asset is managedand its contractual cash flow characteristics. On initial recognition, a financial asset is classified as measured atamortised cost, at fair value through other comprehensive income (“FVOCI”), or at fair value through profit or loss(“FVTPL”).
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its businessmodel for managing financial assets in which case all affected financial assets are reclassified on the first day of thefirst reporting period following the change in the business model.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as atFVTPL:
- it is held within a business model whose objective is to hold assets to collect contractual cash flows; and- its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as atFVTPL:
- it is held within a business model whose objective is achieved by both collecting contractual cash flows andselling financial assets; and- its contractual terms give rise on specified dates to cash flows that are solely payments of principal and intereston the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to presentsubsequent changes in the investment’s fair value in other comprehensive income. This election is made on aninvestment-by-investment basis. The instrument meets the definition of equity from the perspective of the issuer.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured atFVTPL. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets therequirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantlyreduces an accounting mismatch that would otherwise arise.
The business model refers to how the Group manages its financial assets in order to generate cash flows. That is, theGroup’s business model determines whether cash flows will result from collecting contractual cash flows, sellingfinancial assets or both. The Group determines the business model for managing the financial assets according to thefacts and based on the specific business objective for managing the financial assets determined by the Group’s keymanagement personnel.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers thecontractual terms of the instrument. For the purposes of this assessment, ‘principal’ is defined as the fair value of thefinancial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for thecredit risk associated with the principal amount outstanding during a particular period of time and for other basiclending risks and costs, as well as a profit margin. The Group also assesses whether the financial asset contains acontractual term that could change the timing or amount of contractual cash flows such that it would not meet thiscondition.
(b) Subsequent measurement of financial assets
- Financial assets at FVTPL
These financial assets are subsequently measured at fair value. Net gains and losses, including any interest ordividend income, are recognised in profit or loss unless the financial assets are part of a hedging relationship.
- Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss on afinancial asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised inprofit or loss when the financial asset is derecognised, through the amortisation process or in order to recogniseimpairment gains or losses.
- Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest income calculated using the effective interestmethod, impairment and foreign exchange gains and losses are recognised in profit or loss. Other net gains andlosses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in othercomprehensive income are reclassified to profit or loss.
- Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss. Othernet gains and losses are recognised in other comprehensive income. On derecognition, gains and lossesaccumulated in other comprehensive income are reclassified to retained earnings.
(3) Classification and subsequent measurement of financial liabilities
Financial liabilities are classified as measured at FVTPL or amortised cost.
- Financial liabilities at FVTPL
A financial liability is classified as at FVTPL if it is classified as held-for-trading (including derivative financial liability)or it is designated as such on initial recognition.
Financial liabilities at FVTPL are subsequently measured at fair value and net gains and losses, including any interestexpense, are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship.
- Financial liabilities at amortised cost
These financial liabilities are subsequently measured at amortised cost using the effective interest method.
(4) Offsetting
Financial assets and financial liabilities are generally presented separately in the balance sheet, and are not offset. However, afinancial asset and a financial liability are offset and the net amount is presented in the balance sheet when both of thefollowing conditions are satisfied:
- The Group currently has a legally enforceable right to set off the recognised amounts; and- The Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liabilitysimultaneously.
(5) Derecognition of financial assets and financial liabilities
Financial asset is derecognised when one of the following conditions is met:
- the Group’s contractual rights to the cash flows from the financial asset expire;- the financial asset has been transferred and the Group transfers substantially all of the risks and rewards of ownership ofthe financial asset; or；- the financial asset has been transferred, although the Group neither transfers nor retains substantially all of the risks and
rewards of ownership of the financial asset, it does not retain control over the transferred asset.
Where a transfer of a financial asset in its entirety meets the criteria for derecognition, the difference between the twoamounts below is recognised in profit or loss:
- the carrying amount of the financial asset transferred measured at the date of derecognition;- the sum of the consideration received from the transfer and, when the transferred financial asset is a debt investment at
FVOCI, any cumulative gain or loss that has been recognised directly in other comprehensive income for the partderecognised.
The Group derecognises a financial liability (or part of it) only when its contractual obligation (or part of it) is extinguished.
(6) Impairment
The Group recognises loss allowances for expected credit loss (ECL) on:
- financial assets measured at amortised cost;- Debt investments at FVOCI
Financial assets measured at fair value, including debt investments or equity securities at FVTPL, equity securities designatedat FVOCI and derivative financial assets, are not subject to the ECL assessment.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cashshortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows thatthe Group expects to receive).
The maximum period considered when estimating ECLs is the maximum contractual period (including extension options)over which the Group is exposed to credit risk.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after thebalance sheet date (or a shorter period if the expected life of the instrument is less than 12 months).
Loss allowances for trade receivables are always measured at an amount equal to lifetime ECL. ECLs on these financialassets are estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors thatare specific to the debtors and an assessment of both the current and forecast general economic conditions at the balancesheet date.
Except for trade receivables, the Group measures loss allowance at an amount equal to 12-month ECL for the followingfinancial instruments, and at an amount equal to lifetime ECL for all other financial instruments.
- If the financial instrument is determined to have low credit risk at the balance sheet date;- If the credit risk on a financial instrument has not increased significantly since initial recognition.
Financial instruments that have low credit risk
The credit risk on a financial instrument is considered low if the financial instrument has a low risk of default, the borrowerhas a strong capacity to meet its contractual cash flow obligations in the near term and adverse changes in economic andbusiness conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractualcash flow obligations.
Significant increases in credit risk
In assessing whether the credit risk of a financial instrument has increased significantly since initial recognition, the Groupcompares the risk of default occurring on the financial instrument assessed at the balance sheet date with that assessed at thedate of initial recognition.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and whenestimating ECL, the Group considers reasonable and supportable information that is relevant and available without unduecost or effort, including forward-looking information. In particular, the following information is taken into account:
- failure to make payments of principal or interest on their contractually due dates;- an actual or expected significant deterioration in a financial instrument’s external or internal credit rating (if available);- an actual or expected significant deterioration in the operating results of the debtor; and- existing or forecast changes in the technological, market, economic or legal environment that have a significant adverseeffect on the debtor’s ability to meet its obligation to the Group.
Depending on the nature of the financial instruments, the assessment of a significant increase in credit risk is performed oneither an individual basis or a collective basis. When the assessment is performed on a collective basis, the financialinstruments are grouped based on shared credit risk characteristics, such as past due status and credit risk ratings.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
Credit-impaired financial assets
At each balance sheet date, the Group assesses whether financial assets carried at amortised cost and debt investments atFVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact onthe estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includesthe following observable data:
- significant financial difficulty of the borrower or issuer;- a breach of contract, such as a default or delinquency in interest or principal payments;- for economic or contractual reasons relating to the borrower’s financial difficulty, the Group having granted to the
borrower a concession that would not otherwise consider;- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or- the disappearance of an active market for that financial asset because of financial difficulties.
Presentation of allowance for ECL
ECLs are remeasured at each balance sheet date to reflect changes in the financial instrument’s credit risk since initialrecognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss. The Grouprecognises an impairment gain or loss for all financial instruments with a corresponding adjustment to their carrying amountthrough a loss allowance account, except for debt investments that are measured at FVOCI, for which the loss allowance isrecognised in other comprehensive income.
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realisticprospect of recovery. A write-off constitutes a derecognition event. This is generally the case when the Group determines thatthe debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject tothe write-off. However, financial assets that are written off could still be subject to enforcement activities in order to complywith the Group’s procedures for recovery of amounts due.
Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit or lossin the period in which the recovery occurs.
(7) Equity instrument
The consideration received from the issuance of equity instruments net of transaction costs is recognised in shareholders’equity. Consideration and transaction costs paid by the Company for repurchasing self-issued equity instruments are deductedfrom shareholders’ equity.
When the Company repurchases its own shares, those shares are treated as treasury shares. All expenditure relating to therepurchase is recorded in the cost of the treasury shares, with the transaction recording in the share register. Treasury sharesare excluded from profit distributions and are presented as a deduction under shareholders’ equity in the balance sheet.
When treasury shares are cancelled, the share capital should be reduced to the extent of the total par value of the treasuryshares cancelled. Where the cost of the treasury shares cancelled exceeds the total par value, the excess is deducted fromcapital reserve (share premium), surplus reserve and retained earnings sequentially. If the cost of treasury shares cancelled isless than the total par value, the difference is credited to the capital reserve (share premium).
When treasury shares are disposed of, any excess of proceeds above cost is recognised in capital reserve (share premium);otherwise, the shortfall is deducted against capital reserve (share premium), surplus reserve and retained earningssequentially.
(8) Perpetual bonds
At initial recognition, the Group classifies the perpetual bonds issued or their components as financial assets, financialliabilities or equity instruments based on their contractual terms and their economic substance after considering the definitionof financial assets, financial liabilities and equity instruments.
Perpetual bonds issued that should be classified as equity instruments are recognised in equity based on the actual amountreceived. Any distribution of dividends or interests during the instruments’ duration is treated as profit appropriation. Whenthe perpetual bonds are redeemed according to the contractual terms, the redemption price is charged to equity.
10、 Inventories
(1) Classification and cost
Inventories include raw materials, work in progress, finished goods and reusable materials. Reusable materials includelow-value consumables, packaging materials and other materials, which can be used repeatedly but do not meet the definitionof fixed assets.
Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversion and otherexpenditure incurred in bringing the inventories to their present location and condition. In addition to the purchase cost ofraw materials, work in progress and finished goods include direct labour costs and an appropriate allocation of productionoverheads.
(2) Measurement method of cost of inventories
Cost of inventories recognised is calculated using the weighted average method.
Consumables including low-value consumables and packaging materials are charged to profit or loss upon receipt. Theamortisation charge is included in the cost of the related assets or recognised in profit or loss for the current period.
(3) Basis for determining the net realisable value and method for provision for obsolete inventories
At the balance sheet date, inventories are carried at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion andthe estimated costs necessary to make the sale and relevant taxes. The net realisable value of materials held for use in theproduction is measured based on the net realisable value of the finished goods in which they will be incorporated. The netrealisable value of the inventory held to satisfy sales or service contracts is measured based on the contract price, to the extentof the quantities specified in sales contracts, and the excess portion of inventories is measured based on general selling prices.
Any excess of the cost over the net realisable value of each category of inventories is recognised as a provision for obsoleteinventories, and is recognised in profit or loss.
(4) Inventory count system
The Group maintains a perpetual inventory system.
11 Long-term equity investments
(1) Investment cost of long-term equity investments
(a) Long-term equity investments acquired through a business combination
- The initial cost of a long-term equity investment acquired through a business combination involving entitiesunder common control is the Company’s share of the carrying amount of the subsidiary’s equity in theconsolidated financial statements of the ultimate controlling party at the combination date. The differencebetween the initial investment cost and the carrying amount of the consideration given is adjusted to the sharepremium in the capital reserve, with any excess adjusted to retained earnings. For a long-term equity investmentin a subsidiary acquired through a business combination achieved in stages which do not form a bundledtransaction and involving entities under common control, the Company determines the initial cost of theinvestment in accordance with the above policies. The difference between this initial cost and the sum of thecarrying amount of previously-held investment and the consideration paid for the shares newly acquired isadjusted to capital premium in the capital reserve, with any excess adjusted to retained earnings.
- For a long-term equity investment obtained through a business combination not involving entities under commoncontrol, the initial cost comprises the aggregate of the fair value of assets transferred, liabilities incurred orassumed, and equity securities issued by the Company, in exchange for control of the acquiree. For a long-termequity investment obtained through a business combination not involving entities under common control andachieved through multiple transactions in stages which do not form a bundled transaction, the initial costcomprises the carrying amount of the previously-held equity investment in the acquiree immediately before theacquisition date, and the additional investment cost at the acquisition date.
(b) Long-term equity investments acquired other than through a business combination
- A long-term equity investment acquired other than through a business combination is initially recognised at theamount of cash paid if the Group acquires the investment by cash, or at the fair value of the equity securitiesissued if an investment is acquired by issuing equity securities.
(2) Subsequent measurement of long-term equity investment
(a) Investments in subsidiaries
In the Company’s separate financial statements, long-term equity investments in subsidiaries are accounted for usingthe cost method for subsequent measurement unless the investment is classified as held for sale (see Note III.27).Except for cash dividends or profit distributions declared but not yet distributed that have been included in the priceor consideration paid in obtaining the investments, the Company recognises its share of the cash dividends or profitdistributions declared by the investee as investment income for the current period.
The investments in subsidiaries are stated in the balance sheet at cost less accumulated impairment losses.
For the impairment of the investments in subsidiaries, refer to Note III.19.
In the Group’s consolidated financial statements, investments in subsidiaries are accounted for in accordance with thepolicies described in Note III.6.
(b) Investment in joint ventures and associates
A joint venture is an arrangement whereby the Group and other parties have joint control (see Note III.11(3)) andrights to the net assets of the arrangement.
An associate is an entity over which the Group has significant influence (see Note III.11(3)).
An investment in a joint venture or an associate is accounted for using the equity method for subsequentmeasurement, unless the investment is classified as held for sale (see Note III.27).
The accounting treatments under the equity method adopted by the Group are as follows:
- Where the initial cost of a long-term equity investment exceeds the Group’s interest in the fair value of theinvestee’s identifiable net assets at the date of acquisition, the investment is initially recognised at cost. Where theinitial investment cost is less than the Group’s interest in the fair value of the investee’s identifiable net assets atthe date of acquisition, the investment is initially recognised at the investor’s share of the fair value of theinvestee’s identifiable net assets, and the difference is recognised in profit or loss.
- After the acquisition of the investment, the Group recognises its share of the investee’s profit or loss and othercomprehensive income as investment income or losses and other comprehensive income respectively, and adjuststhe carrying amount of the investment accordingly. Once the investee declares any cash dividends or profitdistributions, the carrying amount of the investment is reduced by the amount attributable to the Group. Changesin the Group’s share of the investee’s owners’ equity, other than those arising from the investee’s net profit orloss, other comprehensive income or profit distribution (referred to as “other changes in owners’ equity”), isrecognised directly in the Group’s equity, and the carrying amount of the investment is adjusted accordingly.
- In calculating its share of the investee’s net profits or losses, other comprehensive income and other changes in
owners’ equity, the Group recognises investment income and other comprehensive income after makingappropriate adjustments to align the accounting policies or accounting periods with those of the Group based onthe fair value of the investee’s identifiable net assets at the date of acquisition. Unrealised profits and lossesresulting from transactions between the Group and its associates or joint ventures are eliminated to the extent ofthe Group’s interest in the associates or joint ventures. Unrealised losses resulting from transactions between theGroup and its associates or joint ventures are eliminated in the same way as unrealised gains but only to theextent that there is no impairment.
- The Group discontinues recognising its share of further losses of the investee after the carrying amount of thelong-term equity investment and any long-term interest that in substance forms part of the Group’s net investmentin the joint venture or associate is reduced to zero, except to the extent that the Group has an obligation to assumeadditional losses. If the joint venture or associate subsequently reports net profits, the Group resumes recognisingits share of those profits only after its share of the profits has fully covered the share of losses not recognised.
For the impairment of the investments in joint ventures and associates, refer to Note III.19.
(3) Criteria for determining the existence of joint control or significant influence over an investee
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about therelevant activities (activities with significant impact on the returns of the arrangement) require the unanimous consent of theparties sharing control.
The following factors are usually considered when assessing whether the Group can exercise joint control over an investee:
- Whether no single participant party is in a position to control the investee’s related activities unilaterally;- Whether strategic decisions relating to the investee’s related activities require the unanimous consent of all participantparties that sharing of control.
Significant influence is the power to participate in the financial and operating policy decisions of an investee but does nothave control or joint control over those policies.
12 Investment properties
Investment properties are properties held either to earn rental income or for capital appreciation or for both. Investmentproperties are accounted for using the cost model and stated in the balance sheet at cost less accumulated depreciation,amortisation and impairment losses. The cost of investment property, less its estimated residual value and accumulatedimpairment losses, is depreciated or amortised using the straight-line method over its estimated useful life, unless theinvestment property is classified as held for sale (see Note III.27). For the impairment of the investment properties, refer toNote III.19.
The estimated useful lives, residual value rates and depreciation rates of each class of investment properties are as follows:
| ? | Estimated useful life (years) | ? | Residual value rate (%) | ? | Depreciation rate (%) |
| ? | ? | ? | ? | ? | ? |
| Land use rights | 32 – 50 years | ? | 0.0% | ? | 2.0% - 3.1% |
| Buildings | 25 – 40 years | ? | 3.0% - 10.0% | ? | 2.3% - 3.9% |
13 Fixed assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Group for use in production of goods for use in supply of services forrental or for administrative purposes with useful lives over one accounting year.
The cost of a purchased fixed asset comprises the purchase price, related taxes, and any directly attributable expenditure forbringing the asset to working condition for its intended use. The cost of self-constructed assets is measured in accordancewith the policy set out in Note III.14.
Where the parts of an item of fixed assets have different useful lives or provide benefits to the Group in a different pattern,thus necessitating use of different depreciation rates or methods, each part is recognised as a separate fixed asset.
Any subsequent costs including the cost of replacing part of an item of fixed assets are recognised as assets when it isprobable that the economic benefits associated with the costs will flow to the Group, and the carrying amount of the replacedpart is derecognised. The costs of the day-to-day maintenance of fixed assets are recognised in profit or loss as incurred.
Fixed assets are stated in the balance sheet at cost less accumulated depreciation and impairment losses.
(2) Depreciation of fixed assets
The cost of a fixed asset, less its estimated residual value and accumulated impairment losses, is depreciated using thestraight-line method over its estimated useful life, unless the fixed asset is classified as held for sale (see Note III.27).
The estimated useful lives, residual value rates and depreciation rates of each class of fixed assets are as follows:
| Category | Estimated useful life (years) | ? | Residual value rate (%) | ? | Depreciation rate (%) |
| ? | ? | ? | ? | ? | ? |
| Plant and buildings | 10 - 50年 | ? | 3% - 10% | ? | 1.8% - 9.7% |
| Equipment | 2 - 25年 | ? | 0 - 10% | ? | 3.6% - 50% |
| Others | 2 - 10年 | ? | 0 - 10% | ? | 9.0% - 50% |
Useful lives, estimated residual values and depreciation methods are reviewed at least at each year-end.
(3) For the impairment of the fixed assets, refer to Note III.19.
(4) For the recognition, measurement and depreciation of fixed assets acquired under finance leases, refer to Note III.26(3).
(5) Disposal of fixed assets
The carrying amount of a fixed asset is derecognised:
- when the fixed asset is holding for disposal; or- when no future economic benefit is expected to be generated from its use or disposal.
Gains or losses arising from the retirement or disposal of an item of fixed asset are determined as the difference between thenet disposal proceeds and the carrying amount of the item, and are recognised in profit or loss on the date of retirement ordisposal.
14 Construction in progress
The cost of self-constructed assets includes the cost of materials, direct labour, capitalised borrowing costs (see Note III.15),and any other costs directly attributable to bringing the asset to working condition for its intended use.
A self-constructed asset is classified as construction in progress and transferred to fixed asset when it is ready for its intendeduse. No depreciation is provided against construction in progress.
Construction in progress is stated in the balance sheet at cost less accumulated impairment losses (see Note III.19).
15 Borrowing costs
Borrowing costs incurred directly attributable to the acquisition and construction of a qualifying asset are capitalised as partof the cost of the asset. Other borrowing costs are recognised as financial expenses when incurred.
During the capitalisation period, the amount of interest (including amortisation of any discount or premium on borrowing) tobe capitalised in each accounting period is determined as follows:
- Where funds are borrowed specifically for the acquisition and construction of a qualifying asset, the amount of interest tobe capitalised is the interest expense calculated using effective interest rates during the period less any interest incomeearned from depositing the borrowed funds or any investment income on the temporary investment of those funds beforebeing used on the asset.
- To the extent that the Group borrows funds generally and uses them for the acquisition and construction of a qualifying
asset, the amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation rate to theweighted average of the excess amounts of cumulative expenditure on the asset over the above amounts of specificborrowings. The capitalisation rate is the weighted average of the interest rates applicable to the general-purposeborrowings.
The effective interest rate is determined as the rate that exactly discounts estimated future cash flow through the expected lifeof the borrowing or, when appropriate, a shorter period to the initially recognised amount of the borrowings.
During the capitalisation period, exchange differences related to the principal and interest on a specific-purpose borrowingdenominated in foreign currency are capitalised as part of the cost of the qualifying asset. The exchange differences related tothe principal and interest on foreign currency borrowings other than a specific-purpose borrowing are recognised as afinancial expense when incurred.
The capitalisation period is the period from the date of commencement of capitalisation of borrowing costs to the date ofcessation of capitalisation, excluding any period over which capitalisation is suspended. Capitalisation of borrowing costscommences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities of acquisitionand construction that are necessary to prepare the asset for its intended use are in progress, and ceases when the assetsbecome ready for their intended use. When the parts of the qualifying assets acquired or constructed that are eligible forcapitalisation are completed separately, and each part is available for use in other parts of the construction process or can besold externally, and for the purpose of making the parts of the assets ready for use or necessary for the sales status, theacquisition or construction activities have been substantially completed, the Group ceases the capitalization of the borrowingcosts related to the parts of the assets. Capitalisation of borrowing costs is suspended when the acquisition and constructionactivities are interrupted abnormally for a period of more than three months.
16 Intangible assets
Intangible assets are stated in the balance sheet at cost less accumulated amortisation (where the estimated useful life isfinite) and impairment losses (see Note III.19). For an intangible asset with finite useful life, its cost estimated less residualvalue and accumulated impairment losses is amortised on the straight-line method over its estimated useful life, unless theintangible asset is classified as held for sale (see Note III.27).
The respective amortisation periods for intangible assets are as follows:
| Item | Amortisation period (years) |
| ? | ? |
| Land use rights | 20 - 50 years |
| Patent and technology rights | 5 - 20 years |
| Computer software | 3 - 10 years |
| Others | 5 - 20 years |
An intangible asset is regarded as having an indefinite useful life and is not amortised when there is no foreseeable limit tothe period over which the asset is expected to generate economic benefits for the Group. At the balance sheet date, the Groupdoes not have any intangible assets with indefinite useful lives.
Expenditure on an internal research and development project is classified into expenditure incurred during the research phaseand expenditure incurred during the development phase.
Expenditure during the research phase is expensed when incurred. Expenditure during the development phase is capitalised ifdevelopment costs can be measured reliably, the product or process is technically and commercially feasible, and the Groupintends to and has sufficient resources to complete the development. Capitalised development costs are stated in the balancesheet at cost less impairment losses (see Note III.19). Other development expenditure is recognised as an expense in theperiod in which it is incurred.
17 Goodwill
The initial cost of goodwill represents the excess of cost of acquisition over the acquirer’s interest in the fair value of theidentifiable net assets of the acquiree under a business combination not involving entities under common control.
Goodwill is not amortised and is stated in the balance sheet at cost less accumulated impairment losses (see Note III.19). Ondisposal of an asset group or a set of asset groups, any attributable goodwill is written off and included in the calculation ofthe profit or loss on disposal.
18 Long-term deferred expenses
Long-term deferred expenses are amortised using a straight-line method within the benefit period. The respectiveamortisation periods for such expenses are as follows:
| Item | Amortisation period (years) |
| ? | ? |
| Payment for public facilities construction and use | 10 - 15 years |
| Cost of operating lease assets improvement | 2 - 10 years |
| Others | 2 - 10 years |
19 Impairment of assets other than inventories and financial assets
The carrying amounts of the following assets are reviewed at each balance sheet date based on internal and external sourcesof information to determine whether there is any indication of impairment:
- fixed assets- construction in progress- intangible assets- investment properties measured using a cost model- long-term equity investments- goodwill- long-term deferred expenses, etc.
If any indication exists, the recoverable amount of the asset is estimated. In addition, the Group estimates the recoverableamounts of goodwill at each year-end, irrespective of whether there is any indication of impairment. Goodwill is allocated toeach asset group, or set of asset groups, that is expected to benefit from the synergies of the combination for the purpose ofimpairment testing.
The recoverable amount of an asset (or asset group, set of asset groups) is the higher of its fair value (see Note III.21) lesscosts to sell and its present value of expected future cash flows.
An asset group is composed of assets directly related to cash-generation and is the smallest identifiable group of assets thatgenerates cash inflows that are largely independent of the cash inflows from other assets or asset groups.
The present value of expected future cash flows of an asset is determined by discounting the future cash flows, estimated tobe derived from continuing use of the asset and from its ultimate disposal, to their present value using an appropriate pre-taxdiscount rate.
An impairment loss is recognised in profit or loss when the recoverable amount of an asset is less than its carrying amount. Aprovision for impairment of the asset is recognised accordingly. Impairment losses related to an asset group or a set of assetgroups are allocated first to reduce the carrying amount of any goodwill allocated to the asset group or set of asset groups,and then to reduce the carrying amount of the other assets in the asset group or set of asset groups on a pro rata basis.However, such allocation would not reduce the carrying amount of an asset below the highest of its fair value less costs tosell (if measurable), its present value of expected future cash flows (if determinable) and zero.
Once an impairment loss is recognised, it is not reversed in a subsequent period.
20 Fair value measurement
Unless otherwise specified, the Group measures fair value as follows:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction betweenmarket participants at the measurement date.
When measuring fair value, the Group takes into account the characteristics of the particular asset or liability (including thecondition and location of the asset and restrictions, if any, on the sale or use of the asset) that market participants wouldconsider when pricing the asset or liability at the measurement date, and uses valuation techniques that are appropriate in thecircumstances and for which sufficient data and other information are available to measure fair value. Valuation techniquesmainly include the market approach, the income approach and the cost approach.
21 Provisions
A provision is recognised for an obligation related to a contingency if the Group has a present obligation that can beestimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation.Where the effect of the time value of money is material, provisions are determined by discounting the expected future cashflows. Factors pertaining to a contingency such as the risks, uncertainties and time value of money are taken into account as awhole in reaching the best estimate. Where there is a continuous range of possible outcomes for the expenditure required, andeach possible outcome in that range is as likely as any other, the best estimate is the mid-point of that range. In other cases,the best estimate is determined according to the following circumstances:
- Where the contingency involves a single item, the best estimate is the most likely outcome.
- Where the contingency involves a large population of items, the best estimate is determined by weighting all possible
outcomes by their associated probabilities.
The Group reviews the carrying amount of a provision at the balance sheet date and adjusts the carrying amount to thecurrent best estimate.
22 Revenue recognition
Revenue is the gross inflow of economic benefits arising in the course of the Group’s ordinary activities when the inflowsresult in increase in shareholders’ equity, other than increase relating to contributions from shareholders. Revenue isrecognised in profit or loss when it is probable that the economic benefits will flow to the Group, the revenue and costs canbe measured reliably and the following conditions are met:
(1) Sale of goods
Revenue is recognised when the general conditions stated above and the following conditions are satisfied:
- Significant risks and rewards of ownership of goods have been transferred to the buyer;
- The Group retains neither continuing managerial involvement to the degree usually associated with ownership noreffective control over the goods sold.
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable under the salescontract or agreement.
The sales contracts/orders signed between the Company and its customers (mainly electronic equipment manufacturers)contain various trading terms. The Company judges the transfer timing of major risks and rewards according to the tradingterms, and recognises revenue accordingly. Depending on the trading terms, the income is usually recognized when the goodsare delivered and received, or when they are received by the carrier.
(2) Rendering of services
Revenue is measured at the fair value of the consideration received or receivable under the contract or agreement.
Where the outcome of a transaction involving the rendering of services can be estimated reliably, revenue is recognised byreference to the stage of completion based on the progress of work performed.
Where the outcome cannot be estimated reliably, revenues are recognised to the extent of the costs incurred that are expectedto be recoverable, and an equivalent amount is charged to profit or loss as service cost; otherwise, the costs incurred arerecognised in profit or loss and no service revenue is recognised.
(3) Revenue from construction contracts
Where the outcome of a construction contract can be estimated reliably, contract revenue and contract expenses associatedwith the construction contract are recognised using the percentage of completion method.
The stage of completion of a contract is determined based on the proportion of contract costs incurred for work performed todate to the estimated total contract costs.
When the outcome of a construction contract cannot be estimated reliably:
- If the contract costs can be recovered, revenue is recognised to the extent of contract costs incurred that can be recovered,and the contract costs are recognised as contract expenses when incurred;
- Otherwise, the contract costs are recognised as contract expenses immediately when incurred, and no contract revenue isrecognised.
(4) Interest income
Interest income is recognised on a time proportion basis with reference to the principal outstanding and the applicableeffective interest rate.
(5) Royalties from intangible assets
Royalty income from intangible assets is determined according to the period and fee calculation method as stipulated in therelevant contracts or agreements.
23 Employee benefits
(1) Short-term employee benefits
Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,maternity insurance and housing fund, measured at the amount incurred or accured at the applicable benchmarks and rates,are recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in thecost of assets where appropriate.
(2) Post-employment benefits – defined contribution plans
Pursuant to the relevant laws and regulations of the People’s Republic of China, the Group participated in a definedcontribution basic pension insurance plan and unemployment insurance plan in the social insurance system established andmanaged by government organisations, and annuity plan established by the Group in compliance with the national policy ofthe corporation annuity. The Group makes contributions to basic pension insurance plan and unemployment insurance basedon the applicable benchmarks and rates stipulated by the government. Annuity is accrued based on the gross salaries of theemployees. Basic pension insurance contributions payable are recognised as a liability as the employee provides services,with a corresponding charge to profit or loss or included in the cost of assets where appropriate.
(3) Post-employment benefits - defined benefit plans
During the reporting period, the Group did not have defined benefit plans.
(4) Termination benefits
When the Group terminates the employment with employees before the employment contracts expire, or providescompensation under an offer to encourage employees to accept voluntary redundancy, a provision is recognised with acorresponding expense in profit or loss at the earlier of the following dates:
- When the Group cannot unilaterally withdraw the offer of termination benefits because of an employee termination plan
or a curtailment proposal;
- When the Group has a formal detailed restructuring plan involving the payment of termination benefits and has raised avalid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcingits main features to those affected by it.
24 Government grants
Government grants are non-reciprocal transfers of monetary or non-monetary assets from the government to the Groupexcept for capital contributions from the government in the capacity as an investor in the Group.
A government grant is recognised when there is reasonable assurance that the grant will be received and that the Group willcomply with the conditions attaching to the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If agovernment grant is in the form of a transfer of a non-monetary asset, it is measured at fair value.
Government grants related to assets are grants whose primary condition is that the Group qualifying for them shouldpurchase, construct or otherwise acquire long-term assets. Government grants related to income are grants other than thoserelated to assets.
Those related to daily activities of the Company are included in other income or used to write off related cost based on thenature of economic businesses, or included in non-operating income and expense in respect of those not related to dailyactivities of the Company.
With respect to the government grants related to assets, if the Group first obtains government grants related to assets and thenrecognizes the long-term assets purchased and constructed, deferred income is included in profit and loss based on areasonable and systematic approach by stages when related assets are initially depreciated or amortized; or the deferredincome is written off against the carrying amount of the asset when the asset becomes ready for its intended status or intendeduse. If the Group obtains government grants related to the assets after relevant long-term assets are put into use, deferredincome is included in profit and loss based on a reasonable and systematic approach by stages within the remaining usefullife of relevant assets, or the deferred income is written off against the carrying amount of relevant asset when the grants areobtained; the assets shall be depreciated or amortized based on the carrying amount after being offset and the remaininguseful life of relevant assets.
For the government grants related to income which are used to compensate for related costs or losses of the Group in thefuture period, it shall be recognized as deferred income, and included in profit and loss or used to offset related costs;otherwise it shall be directly included in profit and loss or used to offset related costs.
In respect of the policy-based preferential loan interest subsidy obtained by the Group, if the interest subsidy is appropriatedto the lending bank which shall provide loans to the Group at the policy-based preferential interest rate, the actual loanamount is used as the entry value and relevant borrowing costs are calculated on the basis of the loan principal and thepreferential interest rate. If the interest subsidy is directly appropriated to the Group, relevant borrowing costs shall be offsetby corresponding interest subsidy. If borrowing costs are capitalized as part of the cost of the asset (see Note III. 15), theinterest subsidy shall be used to offset relevant asset costs.
25 Income tax
Current tax and deferred tax are recognised in profit or loss except to the extent that they relate to a business combination oritems recognised directly in equity (including other comprehensive income).
Current tax is the expected tax payable calculated at the applicable tax rate on taxable income for the year, plus anyadjustment to tax payable in respect of previous years.
At the balance sheet date, current tax assets and liabilities are offset only if the Group has a legally enforceable right to setthem off and also intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Deferred tax assets and deferred tax liabilities arise from deductible and taxable temporary differences respectively, being thedifferences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases, whichinclude the deductible losses and tax credits carried forward to subsequent periods. Deferred tax assets are recognised to theextent that it is probable that future taxable profits will be available against which deductible temporary differences can beutilised.
Deferred tax is not recognised for the temporary differences arising from the initial recognition of assets or liabilities in atransaction that is not a business combination and that affects neither accounting profit nor taxable profit (or deductible loss).Deferred tax is not recognised for taxable temporary differences arising from the initial recognition of goodwill.
At the balance sheet date, deferred tax is measured based on the tax consequences that would follow from the expectedmanner of recovery or settlement of the carrying amounts of the assets and liabilities, using tax rates enacted at the balancesheet date that are expected to be applied in the period when the asset is recovered or the liability is settled.
The carrying amount of a deferred tax asset is reviewed at each balance sheet date, and is reduced to the extent that it is nolonger probable that the related tax benefits will be utilised. Such reduction is reversed to the extent that it becomes probablethat sufficient taxable profits will be available.
At the balance sheet date, deferred tax assets and deferred tax liabilities are offset if all of the following conditions are met:
- the taxable entity has a legally enforceable right to offset current tax liabilities and assets, and
- they relate to income taxes levied by the same tax authority on either:
- the same taxable entity; or
- different taxable entities which intend either to settle the current tax liabilities and current tax assets on a net basis, orto realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts ofdeferred tax liabilities or deferred tax assets are expected to be settled or recovered.
26 Operating leases and finance leases
A lease is classified as either a finance lease or an operating lease. A finance lease is a lease that transfers substantially all therisks and rewards incidental to ownership of a leased asset to the lessee, irrespective of whether the legal title to the asset iseventually transferred. An operating lease is a lease other than a finance lease.
(1) Operating lease charges
Rental payments under operating leases are recognised as part of the cost of another related asset or as expenses on astraight-line basis over the lease term.
(2) Assets leased out under operating leases
Fixed assets leased out under operating leases, except for investment properties (see Note III.12), are depreciated inaccordance with the Group’s depreciation policies described in Note III.13(2). Impairment losses are recognised inaccordance with the accounting policy described in Note III.19. Income derived from operating leases is recognised in profitor loss using the straight-line method over the lease term. If initial direct costs incurred in respect of the assets leased out arematerial, the costs are initially capitalised and subsequently amortised in profit or loss over the lease term on the same basisas the lease income. Otherwise, the costs are charged to profit or loss immediately.
(3) Assets acquired under finance leases
At the commencement of the lease term, the minimum lease payments are recorded as long-term payables. The differencebetween the carrying amount of the leased assets and the minimum lease payments is accounted for as unrecognised financecharges. Initial direct costs attributable to a finance lease that are incurred by the Group are added to the carrying amount ofthe leased asset. Depreciation and impairment losses are accounted for in accordance with the accounting policies describedin Notes III.13(2) and III.19, respectively.
If there is reasonable certainty that the Group will obtain ownership of a leased asset at the end of the lease term, the leasedasset is depreciated over its estimated useful life. Otherwise, the leased asset is depreciated over the shorter of the lease termand its estimated useful life.
Unrecognised finance charges arising from a finance lease are recognised using an effective interest method over the leaseterm. The amortisation is accounted for in accordance with the principles of borrowing costs (see Note III.15).
At the balance sheet date, the long-term payables arising from finance leases, net of the unrecognised finance charges, areanalysed and separately presented as long-term payables or non-current liabilities due within one year.
27 Assets held for sale
The Group classified a non-current asset or disposal group as held for sale when the carrying amount of a non-current asset ordisposal group will be recovered through a sale transaction rather than through continuing use,.
A disposal group refers to a group of assets to be disposed of, by sale or otherwise, together as a whole in a single transactionand liabilities directly associated with those assets that will be transferred in the transaction.
A non-current asset or disposal group is classified as held for sale when all the following criteria are met:
- According to the customary practices of selling such asset or disposal group in similar transactions, the non-current assetor disposal group must be available for immediate sale in their present condition subject to terms that are usual andcustomary for sales of such assets or disposal groups;- Its sale is highly probable, that is, the Group has made a resolution on a sale plan and has obtained a firm purchase
commitment. The sale is to be completed within one year.
Non-current assets or disposal groups held for sale are stated at the lower of carrying amount and fair value (see Note III.20)less costs to sell (except financial assets (see Note III.9) and deferred tax assets (see Note III.25)) initially and subsequently.Any excess of the carrying amount over the fair value (see Note III.20) less costs to sell is recognised as an impairment lossin profit or loss.
28 Hedge accounting is a method which recognises in profit or loss (or other comprehensive income) the gain or loss on the
hedging instrument and the hedged item in the same accounting period(s) to represent the effect of risk management.
Hedged items are items that expose the Group to risks of changes in fair value or cash flows and that are designated as beinghedged and can be reliably measured. The Group’s hedged items include fixed-rate borrowings that expose the Group to therisk of changes in fair value, a firm commitment that is settled with a fixed amount of foreign currency and that exposes theGroup to foreign currency risk.
A hedging instrument is a designated financial instrument whose changes in fair value or cash flows are expected to offsetchanges in the fair value or cash flows of the hedged item. For a hedge of foreign currency risk, the foreign currency riskcomponent of a non-derivative financial asset or non-derivative financial liability may also be designated as a hedginginstrument provided that it is not an investment in an equity instrument for which an entity has elected to present changes inthe fair value in other comprehensive income.
The Group assesses at the inception of a hedging relationship, and on an ongoing basis, whether the hedging relationshipmeets the hedge effectiveness requirements. A hedging relationship is regarded as having met the hedge effectivenessrequirements if all of the following conditions are satisfied:
- There is an economic relationship between the hedged item and the hedging instrument.- The effect of credit risk does not dominate the value changes that result from the economic relationship.- The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that theentity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of thehedged item.
When a hedging relationship no longer meets the hedge effectiveness requirements due to the hedge ratio, but the riskmanagement objective of the designated hedging relationship remains unchanged, the Group rebalances the hedgingrelationship. Rebalancing refers to the adjustments made to the designated quantities of the hedged item or the hedginginstrument of an already existing hedging relationship for the purpose of maintaining a hedge ratio that complies with thehedge effectiveness requirements.
The Group discontinues applying hedge accounting in any of the following circumstances:
- The hedging relationship no longer meets the risk management objective on the basis of which it qualified for hedgeaccounting.
- The hedging instrument expires or is sold, terminated or exercised.
- There is no longer an economic relationship between the hedged item and the hedging instrument or the effect of credit
risk starts to dominate the value changes that result from that economic relationship.
- The hedging relationship no longer meets other criteria for applying hedge accounting.
Cash flow hedges
A cash flow hedge is a hedge of the exposure to variability in cash flows. The portion of the gain or loss on a hedginginstrument that is determined to be an effective hedge is recognised in other comprehensive income as a cash flow hedgereserve. The amount of the cash flow hedge reserve is adjusted to the lower of the following (in absolute amounts):
the cumulative gain or loss on the hedging instrument from inception of the hedge;
the cumulative change in present value of the expected future cash flows on the hedged item from inception of the hedge.
The change in the amount of the cash flow hedge reserve is recognised in other comprehensive income in each period.
The portion of the gain or loss on the hedging instrument that is determined to be ineffectiveness is recognised in profit orloss.
If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or ahedged forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for which fairvalue hedge accounting is applied, the Group removes that amount from the cash flow hedge reserve and includes it in theinitial cost or other carrying amount of the asset or liability.
For cash flow hedges other than those covered above, that amount is reclassified from the cash flow hedge reserve to profit orloss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows affectprofit or loss.
When the Group discontinues hedge accounting for a cash flow hedge, the amount of the accumulated cash flow hedgereserve recognised in other comprehensive income is accounted for as follows:
If the hedged future cash flows are still expected to occur, that amount will remain in the cash flow hedge reserve, and beaccounted for in accordance with the above policy.
If the hedged future cash flows are no longer expected to occur, that amount is immediately reclassified from the cash flowhedge reserve to profit or loss as a reclassification adjustment.
29 Profit distributions
Dividends or profit distributions proposed in the profit appropriation plan, which will be approved after the balance sheetdate, are not recognised as a liability at the balance sheet date but are disclosed in the notes separately.
30 Related parties
If a party has the power to control, jointly control or exercise significant influence over another party, or vice versa, or wheretwo or more parties are subject to common control or joint control from another party, they are considered to be relatedparties. Related parties may be individuals or enterprises. Enterprises with which the Company is under common control onlyfrom the State and that have no other related party relationships are not regarded as related parties.
In addition to the related parties stated above, the Company determines related parties based on the disclosure requirementsof Administrative Procedures on the Information Disclosures of Listed Companies issued by the CSRC.
31 Segment reporting
Reportable segments are identified based on operating segments which are determined based on the structure of the Group’sinternal organisation, management requirements and internal reporting system after taking the materiality principle intoaccount. Two or more operating segments may be aggregated into a single operating segment if the segments have similareconomic characteristics and are same or similar in respect of the nature of products and services, the nature of production
processes, the types or classes of customers for the products and services, the methods used to distribute the products orprovide the services, and the nature of the regulatory environment. Reportable segments are identified based on operatingsegments taking into account of materiality principle.
Inter-segment revenues are measured on the basis of the actual transaction prices for such transactions for segment reporting,and segment accounting policies are consistent with those for the consolidated financial statements.
32 Significant accounting estimates and judgements
The preparation of the financial statements requires management to make estimates and assumptions that affect theapplication of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results maydiffer from these estimates. Estimates as well as underlying assumptions and uncertainties involved are reviewed on anongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in anyfuture periods affected.
Except for accounting estimates relating to depreciation and amortisation of assets such as fixed assets and intangible assets(see Notes III.13 and 16) and provision for impairment of various types of assets (see Notes V.4, 6, 7, 11, 14, 15, 16, and 17,and Note XIV.2, 3, 5 and 6). Other significant accounting estimates are as follows:
(i) Note V. 19 – Recognition of deferred tax assets;(ii) Note V. 29 – Warranty provisions;(iii) Note VIII. – Valuation of fair value of financial instruments.
Significant judgements made by the Group in the application of accounting policies are as follows:
(i) Note V. 35 – Convertible debt and equity investment with redemption provisions terms are categorised as financial
liabilities; and(ii) Note VI. 1(1) – Significant judgements and assumptions in determining control over other entity.
33 Changes in accounting policies
Description and reasons of changes in accounting policies
In 2019, the Group has adopted the following revised accounting standards issued by the MOF recently:
- CAS No.22 - Financial Instruments: Recognition and Measurement (Revised), CAS No.23 - Transfer of Financial Assets(Revised), CAS No.24 - Hedge Accounting (Revised) and CAS No.37 - Presentation and Disclosures of FinancialInstruments (Revised) (collectively “new financial instruments standards”)- Notice on Revision of the 2019 Illustrative Financial Statements (Caikuai [2019] No.6)- Notice on Revision of the Formats of Consolidated Financial Statements (2019 Edition) (Caikuai [2019] No.16)- CAS No.7 – Exchange of Non-monetary Assets (Revised) (“CAS 7 (2019)”)- CAS No.12 – Debt Restructuring (Revised) (“CAS 12 (2019)”)
(a) Presentation of financial statements
The Group has prepared financial statements for the year ended 31 December 2019 in accordance with the financial
statement format specified in Caikuai [2019] No.6 and Caikuai [2019] No.16. The Group has applied the new
presentation requirements retrospectively.
Affected assets and liabilities items in the consolidated and company balance sheets as at 31 December 2018:
| ? | ? | The Group | ||||
| ? | ? | Before adjustments | ? | Adjustments | ? | After adjustments |
| ? | ? | ? | ? | ? | ? | ? |
| Bills and accounts receivable | ? | 20,537,462,095 | ? | (20,537,462,095) | ? | - |
| Bills receivable | ? | - | ? | 656,781,577 | ? | 656,781,577 |
| Accounts receivable | ? | - | ? | 19,880,680,518 | ? | 19,880,680,518 |
| Bills and accounts payable | ? | (22,805,065,888) | ? | 22,805,065,888 | ? | - |
| Bills payable | ? | - | ? | (591,109,272) | ? | (591,109,272) |
| Accounts payable | ? | - | ? | (22,213,956,616) | ? | (22,213,956,616) |
| ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | - | ? | ? |
| ? | ? | The Company | ||||
| ? | ? | Before adjustments | ? | Adjustments | ? | After adjustments |
| ? | ? | ? | ? | ? | ? | ? |
| Bills and accounts receivable | ? | 38,452,623 | ? | (38,452,623) | ? | - |
| Bills receivable | ? | - | ? | 1,500,000 | ? | 1,500,000 |
| Accounts receivable | ? | - | ? | 36,952,623 | ? | 36,952,623 |
| Bills and accounts payable | ? | (35,322,286) | ? | 35,322,286 | ? | - |
| Accounts payable | ? | - | ? | (35,322,286) | ? | (35,322,286) |
| ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | - | ? | ? |
(b) New financial instrument standards
New financial instruments standards revise CAS No.22 - Financial instruments: Recognition and measurement, CASNo.23 - Transfer of Financial assets and CAS No.24 - Hedging issued by the MOF in 2006 and CAS No.37 -Presentation and Disclosures of Financial Instruments (collecting “previous financial instruments standards”).
New financial instruments standards contain three principal classification categories for financial assets: measured atamortised cost, FVOCI and FVTPL. The classification of financial assets under new financial instruments standards isgenerally based on the business model in which a financial asset is managed and its contractual cash flowcharacteristics. New financial instruments standards cancel the previous categories of held to maturity investments,loans and receivables and available for sale financial assets under previous financial instruments standards. Under newfinancial instruments standards, derivatives embedded in contracts where the host is a financial asset are neverseparated. Instead, the hybrid financial instrument as a whole is assessed for classification.
New financial instruments standards replace the “incurred loss” model in previous financial instruments standards withthe ECL model. The ECL model requires an ongoing measurement of credit risk associated with a financial asset andtherefore recognises ECLs earlier than under the “incurred loss” accounting model in previous financial instrumentsstandards.
The Group retroactively adjusts the classification and measurement (including impairment) of financial instrumentsthat have not been derecognised on the implementation date of new financial instrument standards (i.e. 1 January 2019)in accordance with transition provisions of the new financial instrument standards. The Group has not adjustedcomparative figures, and recognised any difference between the previous carrying amount under previous financialinstruments standards and the carrying amount at the beginning of the annual reporting period that includes the date ofinitial application in the opening retained earnings or other comprehensive income.
(i) The impact of adoption new financial instrument standards on the consolidated and company balance sheets
based on the financial statements for the year ended 31 December 2018 after retrospective adjustments inaccordance with Caikuai [2019] No.6 and Caikuai [2019] No.16 are summarised as follows:
| ? | The Group | |||||
| ? | 31 December 2018 | ? | 1 January 2019 | ? | Adjustments | |
| Assets: | ? | ? | ? | ? | ? | |
| ? | ? | ? | ? | ? | ? | |
| Current assets: | ? | ? | ? | ? | ? | |
| Cash at bank and on hand | 51,481,539,711 | ? | 51,481,539,711 | ? | - | |
| Financial assets held for trading | Note 1, 2 | - | ? | 4,433,393,359 | ? | 4,433,393,359 |
| Bills receivable | 656,781,577 | ? | 656,781,577 | ? | - | |
| Accounts receivable | Note 4 | 19,880,680,518 | ? | 19,874,790,758 | ? | (5,889,760) |
| Prepayments | 770,633,448 | ? | 770,633,448 | ? | - | |
| Other receivables | Note 4 | 2,454,174,971 | ? | 2,451,581,902 | ? | (2,593,069) |
| Inventories | 11,985,398,172 | ? | 11,985,398,172 | ? | - | |
| Assets held for sale | - | ? | - | ? | - | |
| Other current assets | Note 1 | 12,463,073,779 | ? | 8,042,546,852 | ? | (4,420,526,927) |
| ? | ? | ? | ? | ? | ? | |
| Total current assets | 99,692,282,176 | ? | 99,696,665,779 | ? | 4,383,603 | |
| ? | ? | ? | ? | ? | ? | |
| Non-current assets: | ? | ? | ? | ? | ? | |
| Available-for-sale financial assets | Note 2, 3 | 734,022,359 | ? | - | ? | (734,022,359) |
| Long-term equity investments | 2,389,166,886 | ? | 2,389,166,886 | ? | - | |
| Investments in other equity instruments | Note 3 | - | ? | 721,155,927 | ? | 721,155,927 |
| Investment properties | 1,283,867,651 | ? | 1,283,867,651 | ? | - | |
| Fixed assets | 128,157,730,995 | ? | 128,157,730,995 | ? | - | |
| Construction in progress | 56,423,354,887 | ? | 56,423,354,887 | ? | - | |
| Intangible assets | 5,937,679,394 | ? | 5,937,679,394 | ? | - | |
| Goodwill | 904,370,509 | ? | 904,370,509 | ? | - | |
| Long-term deferred expenses | 360,640,853 | ? | 360,640,853 | ? | - | |
| Deferred tax assets | 252,373,622 | ? | 252,373,622 | ? | - | |
| Other non-current assets | 7,893,002,053 | ? | 7,893,002,053 | ? | - | |
| ? | ? | ? | ? | ? | ? | |
| Total non-current assets | 204,336,209,209 | ? | 204,323,342,777 | ? | (12,866,432) | |
| ? | ||||||
| ? | ? | ? | ? | ? | ? | |
| Total assets | 304,028,491,385 | ? | 304,020,008,556 | ? | (8,482,829) | |
| ? | The Group | ||||
| ? | 31 December 2018 | ? | 1 January 2019 | ? | Adjustments |
| Liabilities and shareholders’ equity | ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? | ? |
| Current liabilities: | ? | ? | ? | ? | ? |
| Short-term loans | 5,449,954,885 | ? | 5,449,954,885 | ? | - |
| Bills payable | 591,109,272 | ? | 591,109,272 | ? | - |
| Accounts payable | 22,213,956,616 | ? | 22,213,956,616 | ? | - |
| Advance payments received | 1,218,934,743 | ? | 1,218,934,743 | ? | - |
| Employee benefits payable | 2,224,931,171 | ? | 2,224,931,171 | ? | - |
| Taxes payable | 970,108,298 | ? | 970,108,298 | ? | - |
| Other payables | 22,956,979,828 | ? | 22,956,979,828 | ? | - |
| Non-current liabilities due within one year | 5,597,563,204 | ? | 5,597,563,204 | ? | - |
| Other current liabilities | 1,004,557,061 | ? | 1,004,557,061 | ? | - |
| ? | ? | ? | ? | ? | ? |
| Total current liabilities | 62,228,095,078 | ? | 62,228,095,078 | ? | - |
| ? | ? | ? | ? | ? | ? |
| Non-current liabilities: | ? | ? | ? | ? | ? |
| Long-term loans | 94,780,077,864 | ? | 94,780,077,864 | ? | - |
| Debentures payable | 10,288,666,233 | ? | 10,288,666,233 | ? | - |
| Long-term payables | 1,416,092,239 | ? | 1,416,092,239 | ? | - |
| Provisions | 16,457,010 | ? | 16,457,010 | ? | - |
| Deferred income | 2,187,558,533 | ? | 2,187,558,533 | ? | - |
| Deferred tax liabilities | 1,419,373,545 | ? | 1,419,373,545 | ? | - |
| Other non-current liabilities | 11,334,873,322 | ? | 11,334,873,322 | ? | - |
| ? | ? | ? | ? | ? | ? |
| Total non-current liabilities | 121,443,098,746 | ? | 121,443,098,746 | ? | - |
| ? | ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? | ? |
| Total liabilities | 183,671,193,824 | ? | 183,671,193,824 | ? | - |
| ? | ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? | ? |
| Shareholders’ equity: | ? | ? | ? | ? | ? |
| Share capital | 34,798,398,763 | ? | 34,798,398,763 | ? | - |
| Capital reserve | 38,213,100,596 | ? | 38,213,100,596 | ? | - |
| Other comprehensive income | (125,258,252) | ? | (291,856,968) | ? | (166,598,716) |
| Surplus reserve | 1,152,626,310 | ? | 1,152,626,310 | ? | - |
| Retained earnings | 11,817,881,286 | ? | 11,977,119,533 | ? | 159,238,247 |
| ? | ? | ? | ? | ? | ? |
| Total equity attributable to shareholders of the Company | 85,856,748,703 | ? | 85,849,388,234 | ? | (7,360,469) |
| ? | ? | ? | ? | ? | ? |
| Non-controlling interests | 34,500,548,858 | ? | 34,499,426,498 | ? | (1,122,360) |
| ? | ? | ? | ? | ? | ? |
| Total shareholders' equity | 120,357,297,561 | ? | 120,348,814,732 | ? | (8,482,829) |
| ? | ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? | ? |
| Total liabilities and shareholders’ equity | 304,028,491,385 | ? | 304,020,008,556 | ? | (8,482,829) |
| ? | The Company | ||||
| ? | 31 December 2018 | ? | 1 January 2019 | ? | Adjustments |
| Assets: | ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? | ? |
| Current assets: | ? | ? | ? | ? | ? |
| Cash at bank and on hand | 3,829,814,050 | ? | 3,829,814,050 | ? | - |
| Bills receivable | 1,500,000 | ? | 1,500,000 | ? | - |
| Accounts receivable | 36,952,623 | ? | 36,952,623 | ? | - |
| Prepayments | 25,020,734 | ? | 25,020,734 | ? | - |
| Other receivables | 2,015,828,460 | ? | 2,015,828,460 | ? | - |
| Inventories | 9,289,141 | ? | 9,289,141 | ? | - |
| Non-current assets due within one year | 450,000,000 | ? | 450,000,000 | ? | - |
| Other current assets | 47,805,096 | ? | 47,805,096 | ? | - |
| ? | ? | ? | ? | ? | ? |
| Total current assets | 6,416,210,104 | ? | 6,416,210,104 | ? | - |
| ? | ? | ? | ? | ? | ? |
| Non-current assets: | ? | ? | ? | ? | ? |
| Available-for-sale financial assets | 128,297,254 | ? | - | ? | (128,297,254) |
| Long-term equity investments | 143,499,733,485 | ? | 143,499,733,485 | ? | - |
| Investments in other equity instruments | - | ? | 128,297,254 | ? | 128,297,254 |
| Investment properties | 290,253,475 | ? | 290,253,475 | ? | - |
| Fixed assets | 969,371,352 | ? | 969,371,352 | ? | - |
| Construction in progress | 251,314,313 | ? | 251,314,313 | ? | - |
| Intangible assets | 514,186,496 | ? | 514,186,496 | ? | - |
| Long-term deferred expenses | 99,701,797 | ? | 99,701,797 | ? | - |
| Deferred tax assets | 290,794,548 | ? | 290,794,548 | ? | - |
| Other non-current assets | 284,243,667 | ? | 284,243,667 | ? | - |
| ? | ? | ? | ? | ? | ? |
| Total non-current assets | 146,327,896,387 | ? | 146,327,896,387 | ? | - |
| ? | |||||
| ? | ? | ? | ? | ? | ? |
| Total assets | 152,744,106,491 | ? | 152,744,106,491 | ? | - |
| ? | |||||
| ? | The Company | ||||
| ? | 31 December 2018 | ? | 1 January 2019 | ? | Adjustments |
| Liabilities and shareholders’ equity | ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? | ? |
| Current liabilities: | ? | ? | ? | ? | ? |
| Short-term loans | 1,000,000,000 | ? | 1,000,000,000 | ? | - |
| Accounts payable | 35,322,286 | ? | 35,322,286 | ? | - |
| Advance payments received | 1,577,035,515 | ? | 1,577,035,515 | ? | - |
| Employee benefits payable | 201,139,261 | ? | 201,139,261 | ? | - |
| Taxes payable | 250,558,556 | ? | 250,558,556 | ? | - |
| Other payables | 8,209,736,090 | ? | 8,209,736,090 | ? | - |
| Non-current liabilities due within one year | 2,590,000,000 | ? | 2,590,000,000 | ? | - |
| ? | ? | ? | ? | ? | ? |
| Total current liabilities | 13,863,791,708 | ? | 13,863,791,708 | ? | - |
| ? | ? | ? | ? | ? | ? |
| Non-current liabilities: | ? | ? | ? | ? | ? |
| Long-term loans | 26,520,000,000 | ? | 26,520,000,000 | ? | - |
| Debentures payable | 9,976,533,425 | ? | 9,976,533,425 | ? | - |
| Deferred income | 5,523,949,841 | ? | 5,523,949,841 | ? | - |
| Other non-current liabilities | 20,954,104,125 | ? | 20,954,104,125 | ? | - |
| ? | ? | ? | - | ? | - |
| Total non-current liabilities | 62,974,587,391 | ? | 62,974,587,391 | ? | - |
| ? | |||||
| ? | ? | ? | ? | ? | ? |
| Total liabilities | 76,838,379,099 | ? | 76,838,379,099 | ? | - |
| ? | ? | ? | ? | ? | ? |
| Shareholders’ equity: | ? | ? | ? | ? | ? |
| Share capital | 34,798,398,763 | ? | 34,798,398,763 | ? | - |
| Capital reserve | 37,590,966,191 | ? | 37,590,966,191 | ? | - |
| Other comprehensive income | (28,507,585) | ? | (246,193,654) | ? | (217,686,069) |
| Surplus reserve | 1,152,626,310 | ? | 1,152,626,310 | ? | - |
| Retained earnings | 2,392,243,713 | ? | 2,609,929,782 | ? | 217,686,069 |
| ? | ? | ? | ? | ? | ? |
| Total shareholders’ equity | 75,905,727,392 | ? | 75,905,727,392 | ? | - |
| ? | ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? | ? |
| Total liabilities and shareholders’ equity | 152,744,106,491 | ? | 152,744,106,491 | ? | - |
Note 1: On 31 December 2018, the carrying amount of bank wealth management products at FVTOCI held
by the Group was RMB 4,420,526,927. On 1 January 2019, the Group reclassified them to financialassets held for trading according to the new financial instrument standards, valued at fair value.
Note 2: On 31 December 2018, the carrying amount of available-for-sale debt instruments was RMB
12,866,432. On 1 January 2019, the Group reclassified them to financial assets held for tradingaccording to the new financial instrument standards, valued at fair value.
Note 3: On 31 December 2018, the carrying amount of listed equity instruments investment at FVTPL was
RMB 378,636,117. On 1 January 2019, the Group designated them as financial assets at FVTOCI
out of the intention of establishing or maintaining a long-term investment for strategic reasons,presenting as investments in other equity instruments. On 31 December 2018, the carrying amount ofunlisted equity instruments investment at amortised cost was RMB 342,519,810. On 1 January 2019,the Group designated them as financial assets at FVTOCI for the consideration of long-term strategicinvestments, presenting as investments in other equity instruments.
Note 4: The Group retrospectively adjusted the financial statements as at 1 January 2019 according to the
ECL model, refer to Note III.33(b)(iii).
(ii) Impact of financial instrument classification
On 31 December 2018, the carrying amount of listed equity investments at fair value held by the Group wasRMB 378,636,117, and the accumulated impairment provision was RMB 150,099,655. On 1 January 2019,for the consideration of long-term strategic investments, the Group chose to designate the equity investmentsas financial assets at FVOCI, which are presented as investments in other equity instruments. Accordingly, theGroup transferred the accumulated impairment provision less the income tax expenses of RMB 127,584,707from retained earnings at the beginning of the year to other comprehensive income at the beginning of theyear.
On 31 December 2018, the carrying amount of unlisted equity investments at cost held by the Group wasRMB 342,519,810, and the accumulated impairment provision was RMB 34,495,952. On 1 January 2019, forthe consideration of long-term strategic investments, the Group chose to designate the equity investments asfinancial assets at FVOCI, which are presented as investments in other equity instruments. Accordingly, theGroup transferred the accumulated impairment provision less the income tax expenses of RMB 29,321,559from retained earnings at the beginning of the year to other comprehensive income at the beginning of theyear. On 1 January 2019, the fair value measurement of this part of equity investments did not give rise tochanges in the carrying amount of other equity instruments.
On 31 December 2018, the carrying amount of bank wealth management products at FVTOCI held by theGroup was RMB 4,420,526,927 and the accumulated gain or loss that has been recognised directly in othercomprehensive income was RMB 9,692,450. On 1 January 2019, the Group reclassified them to financialassets held for trading according to the new financial instrument standards, valued at fair value. Accordingly,the Group transferred fair value movements of RMB 9,692,450 accumulated in other comprehensive incometo retained earnings.
The Group did not designate or de-designate any financial asset or financial liability at FVTPL at 1 January2019.
The results for the classification and measurement of financial assets under new financial instrument standardsand previous financial instrument standards based on the financial statements for the year ended 31 December2018 after retrospective adjustments in accordance with Caikuai [2019] No.6 and Caikuai [2019] No.16 aresummarised as follows:
The Group
| Previous financial instrument standards (31 December 2018) | ? | New financial instrument standards (1 January 2019) | ||||||||
| Item | ? | Measurement category | ? | Carrying amount | ? | Item | ? | Measurement category | ? | Carrying amount |
| Cash at bank and on hand | ? | Amortised cost (loans and receivables) | ? | 51,481,539,711 | ? | Cash at bank and on hand | ? | Amortised cost | ? | 51,481,539,711 |
| Bills receivable | ? | Amortised cost (loans and receivables) | ? | 656,781,577 | ? | Bills receivable | ? | Amortised cost | ? | 656,781,577 |
| Accounts receivable | ? | Amortised cost (loans and receivables) | ? | 19,880,680,518 | ? | Accounts receivable | ? | Amortised cost | ? | 19,874,790,758 |
| Other receivables | ? | Amortised cost (loans and receivables) | ? | 2,454,174,971 | ? | Other receivables | ? | Amortised cost | ? | 2,451,581,902 |
| Other current assets - wealth management products | ? | FVOCI (debt instruments) | ? | 1,113,886,639 | ? | Other current assets | ? | Amortised cost | ? | 1,113,886,639 |
| Other current assets - wealth management products | ? | FVOCI (debt instruments) | ? | 4,420,526,927 | ? | Financial assets held for trading | ? | FVTPL | ? | 4,420,526,927 |
| Available-for-sale financial assets – Debt instruments at fair value | ? | FVOCI (debt instruments) | ? | 12,866,432 | ? | Financial assets held for trading | ? | FVTPL | ? | 12,866,432 |
| Available-for-sale financial assets – equity instruments at fair value | ? | FVOCI (equity instruments) | ? | 378,636,117 | ? | Investments in other equity instruments | ? | FVOCI | ? | 378,636,117 |
| Available-for-sale financial assets – equity instruments at cost | ? | At cost (equity instruments) | ? | 342,519,810 | ? | Investments in other equity instruments | ? | FVOCI | ? | 342,519,810 |
The Company
?Previous financial instrument standards
| Previous financial instrument standards | ? | New financial instrument standards | ||||||||
| (31 December 2018) | ? | (1 January 2019) | ||||||||
| Item | Measurement category | Carrying amount | ? | Item | Measurement category | Carrying amount | ||||
| Cash at bank and on hand | Amortised cost (loans and receivables) | 3,829,814,050 | ? | Cash at bank and on hand | Amortised cost | 3,829,814,050 | ||||
| Bills receivable | Amortised cost (loans and receivables) | 1,500,000 | ? | Bills receivable | Amortised cost | 1,500,000 | ||||
| Accounts receivable | Amortised cost (loans and receivables) | 36,952,623 | ? | Accounts receivable | Amortised cost | 36,952,623 | ||||
| Other receivables | Amortised cost (loans and receivables) | 2,015,828,460 | ? | Other receivables | Amortised cost | 2,015,828,460 | ||||
| Available-for-sale financial assets – equity instruments at fair value | FVOCI (equity instruments) | 109,609,222 | ? | Investments in other equity instruments | FVOCI | 109,609,222 | ||||
| Available-for-sale financial assets – equity instruments at cost | At cost (equity instruments) | 18,688,032 | ? | Investments in other equity instruments | FVOCI | 18,688,032 | ||||
Reconciliation between the original carrying amount of financial assets and the carrying amount of new financial assets under the classification and measurement requirements ofnew financial instrument standards based on the financial statements for the year ended 31 December 2018 after retrospective adjustments in accordance with Caikuai [2019]No.6 and Caikuai [2019] No.16 are summarised as follows:
The Group
| ?? | Carrying amout under the previous financial instruments standards (31 December 2018) | Reclassification | Remeasurement | Carrying amout under the new financial instruments standards (1 January 2019) | ||||
| Amortised cost | ? | ? | ? | ? | ? | ? | ||
| Cash at bank and on hand | ? | ? | ? | ? | ? | ? | ? | ? |
| Balances under previous financial instrument standards and new financial instrument standards | ? | 51,481,539,711 | ? | - | ? | - | ? | 51,481,539,711 |
| Bills receivable | ? | ? | ? | ? | ? | ? | ? | ? |
| Balances under previous financial instrument standards and new financial instrument standards | ? | 656,781,577 | ? | - | ? | - | ? | 656,781,577 |
| Accounts receivable | ? | ? | ? | ? | ? | ? | ? | ? |
| Balance under the previous financial instrument standards | ? | 19,880,680,518 | ? | ? | ? | ? | ? | ? |
| Remeasurement: allowance for ECL | ? | ? | ? | ? | ? | (5,889,760) | ? | ? |
| Balance under the new financial instrument standards | ? | ? | ? | ? | ? | ? | ? | 19,874,790,758 |
| Other receivables | ? | ? | ? | ? | ? | ? | ? | ? |
| Balance under the previous financial instrument standards | ? | 2,454,174,971 | ? | ? | ? | ? | ? | ? |
| Remeasurement: allowance for ECL | ? | ? | ? | ? | ? | (2,593,069) | ? | ? |
| Balance under the new financial instrument standards | ? | ? | ? | ? | ? | ? | ? | 2,451,581,902 |
| Other current assets - wealth management products (new financial instrument standards) | ? | ? | ? | ? | ? | ? | ? | ? |
| Balance under the previous financial instrument standards | ? | - | ? | ? | ? | ? | ? | ? |
| Add: transferred from other current assets (available-for-sale financial assets) | ? | ? | ? | 1,113,886,639 | ? | ? | ? | ? |
| Balance under the new financial instrument standards | ? | ? | ? | ? | ? | ? | ? | 1,113,886,639 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total financial assets measured at amortised cost | ? | 74,473,176,777 | ? | 1,113,886,639 | ? | (8,482,829) | ? | 75,578,580,587 |
| ? | Carrying amout under the | ? | Reclassification | ? | Remeasurement | ? | Carrying amout under the | |
| ? | previous financial instruments standards | ? | ? | ? | new financial instruments standards | |||
| ? | (31 December 2018) | ? | ? | ? | (1 January 2019) | |||
| FVTPL | ? | ? | ? | ? | ? | ? | ? | ? |
| Financial assets held for trading (including other non-current financial assets) | ? | ? | ? | ? | ? | ? | ? | ? |
| Balance under the previous financial instrument standards | ? | - | ? | ? | ? | ? | ? | ? |
| Add: transferred from available-for-sale financial assets (previous financial instrument standards) | ? | ? | ? | 12,866,432 | ? | ? | ? | ? |
| Add: transferred from other current assets (available-for-sale financial assets) | ? | ? | ? | 4,420,526,927 | ? | ? | ? | ? |
| Balance under the new financial instrument standards | ? | ? | ? | ? | ? | ? | ? | 4,433,393,359 |
| ? | Carrying amout under the | ? | Reclassification | ? | Remeasurement | ? | Carrying amout under the | |
| ? | previous financial instruments standards | ? | ? | ? | new financial instruments standards | |||
| ? | (31 December 2018) | ? | ? | ? | (1 January 2019) | |||
| FVOCI | ? | ? | ? | ? | ? | ? | ? | ? |
| Other current assets - wealth management products | ? | ? | ? | ? | ? | ? | ? | ? |
| Balance under the previous financial instrument standards | ? | 5,534,413,566 | ? | ? | ? | ? | ? | ? |
| Less: transferred to FVTPL (new financial instrument standards) | ? | ? | ? | (4,420,526,927) | ? | ? | ? | ? |
| Less: transferred to amortised cost (new financial instrument standards) | ? | ? | ? | (1,113,886,639) | ? | ? | ? | ? |
| Balance under the new financial instrument standards | ? | ? | ? | ? | ? | ? | ? | - |
| Available-for-sale financial assets | ? | ? | ? | ? | ? | ? | ? | ? |
| Balance under the previous financial instrument standards | ? | 734,022,359 | ? | ? | ? | ? | ? | ? |
| Less: transferred to FVTPL as required (new financial instrument standards) | ? | ? | ? | (12,866,432) | ? | ? | ? | ? |
| Less: transferred to FVOCI as designated (new financial instrument standards) | ? | ? | ? | (721,155,927) | ? | ? | ? | ? |
| Balance under the new financial instrument standards | ? | ? | ? | ? | ? | ? | ? | - |
| Investments in other equity instruments | ? | ? | ? | ? | ? | ? | ? | ? |
| Balance under the previous financial instrument standards | ? | - | ? | ? | ? | ? | ? | ? |
| Add: transferred from available-for-sale financial assets (previous financial instrument standards) | ? | ? | ? | 721,155,927 | ? | ? | ? | ? |
| Remeasurement: from cost to fair value | ? | ? | ? | ? | ? | - | ? | ? |
| Balance under the new financial instrument standards | ? | ? | ? | ? | ? | ? | ? | 721,155,927 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total financial assets at FVOCI | ? | 6,268,435,925 | ? | (5,547,279,998) | ? | - | ? | 721,155,927 |
The Company
| ? | Carrying amout under | ? | Reclassification | ? | Remeasurement | ? | Carrying amout under | |
| ? | the previous financial instruments standards | ? | ? | ? | the new financial instruments standards | |||
| ? | (31 December 2018) | ? | ? | ? | (1 January 2019) | |||
| Amortised cost | ? | ? | ? | ? | ? | ? | ? | ? |
| Cash at bank and on hand | ? | ? | ? | ? | ? | ? | ? | ? |
| Balances under previous financial instrument standards and new financial instrument standards | ? | 3,829,814,050 | ? | - | ? | - | ? | 3,829,814,050 |
| Bills receivable | ? | ? | ? | ? | ? | ? | ? | ? |
| Balances under previous financial instrument standards and new financial instrument standards | ? | 1,500,000 | ? | - | ? | - | ? | 1,500,000 |
| Accounts receivable | ? | ? | ? | ? | ? | ? | ? | ? |
| Balances under previous financial instrument standards and new financial instrument standards | ? | 36,952,623 | ? | - | ? | - | ? | 36,952,623 |
| Other receivables | ? | ? | ? | ? | ? | ? | ? | - |
| Balances under previous financial instrument standards and new financial instrument standards | ? | 2,015,828,460 | ? | - | ? | - | ? | 2,015,828,460 |
| Total financial assets at amortised cost | ? | 5,884,095,133 | ? | - | ? | - | ? | 5,884,095,133 |
| ? | Carrying amout under | ? | Reclassification | ? | Remeasurement | ? | Carrying amout under | |
| ? | the previous financial instruments standards | ? | ? | ? | the new financial instruments standards | |||
| ? | (31 December 2018) | ? | ? | ? | (1 January 2019) | |||
| FVOCI | ? | ? | ? | ? | ? | ? | ? | ? |
| Available-for-sale financial assets | ? | ? | ? | ? | ? | ? | ? | ? |
| Balance under the previous financial instrument standards | ? | 128,297,254 | ? | ? | ? | ? | ? | ? |
| Less: transferred to FVOCI as designated (new financial instrument standards) | ? | ? | ? | (128,297,254) | ? | ? | ? | ? |
| Balance under the new financial instrument standards | ? | ? | ? | ? | ? | ? | ? | - |
| Investments in other equity instruments | ||||||||
| Balance under the previous financial instrument standards | ? | - | ? | ? | ? | ? | ? | ? |
| Add: transferred from available-for-sale financial assets (previous financial instrument standards) | ? | ? | ? | 128,297,254 | ? | ? | ? | ? |
| Remeasurement: from cost to fair value | ? | ? | ? | ? | ? | - | ? | ? |
| Balance under the new financial instrument standards | ? | ? | ? | ? | ? | ? | ? | 128,297,254 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total financial assets at FVOCI | ? | 128,297,254 | ? | - | ? | - | ? | 128,297,254 |
(iii) Impact of adopting the ECL model
The Group applies the new ECL model to the following items:
- financial assets measured at amortised cost;- debt investments at FVOCI
The new ECL model do not apply to investments in equity instruments.
Reconciliation between the closing amount of original impairment provision for financial assets and the new loss allowance for financial assets under the classification andmeasurement requirements of new financial instrument standards based on the financial statements for the year ended 31 December 2018 after retrospective adjustments inaccordance with Caikuai [2019] No.6 and Caikuai [2019] No.16 are summarised as follows:
The Group
| Measurement category | ? | Loss allowance under the previous financial instrument standards/ provisions recognised under the contingency standard (31 December 2018) | ? | Reclassification | ? | Remeasurement | ? | Loss allowance under the new financial instrument standards (1 January 2019) |
| Loans and receivables (previous financial instrument standards)/financial assets at amortised cost (new financial instrument standards) | ? | ? | ? | ? | ? | ? | ? | ? |
| Accounts receivable | ? | (319,321,830) | ? | - | ? | (5,889,760) | ? | (325,211,590) |
| Other receivables | ? | (340,512) | ? | - | ? | (2,593,069) | ? | (2,933,581) |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | (319,662,342) | ? | - | ? | (8,482,829) | ? | (328,145,171) |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Available-for-sale financial assets (previous financial instrument standards)/financial assets at FVOCI (new financial instrument standards) | ? | ? | ? | ? | ? | ? | ? | ? |
| Available-for-sale financial assets | ? | (184,595,607) | ? | 184,595,607 | ? | - | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | (504,257,949) | ? | 184,595,607 | ? | (8,482,829) | ? | (328,145,171) |
The Company
| Measurement category | ? | Loss allowance under the previous financial instrument standards/ provisions recognised under the contingency standard (31 December 2018) | ? | Reclassification | ? | Remeasurement | ? | Loss allowance under the new financial instrument standards (1 January 2019) |
| Loans and receivables (previous financial instrument standards)/financial assets at amortised cost (new financial instrument standards) | ? | ? | ? | ? | ? | ? | ? | ? |
| Accounts receivable | ? | (2,889,866) | ? | - | ? | - | ? | (2,889,866) |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Available-for-sale financial assets (previous financial instrument standards)/financial assets at FVOCI (new financial instrument standards) | ? | ? | ? | ? | ? | ? | ? | ? |
| Available-for-sale financial assets | ? | (256,101,258) | ? | 256,101,258 | ? | - | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | (258,991,124) | ? | 256,101,258 | ? | - | ? | (2,889,866) |
(c) CAS 7 (2019)
CAS 7 (2019) further clarifies the scope of the standard, specifies the timing for recognition of assets received andderecognition of assets given up, and the accounting treatment for cases in which the timing of recognition andderecognition are inconsistent. The standard modifies the principle of measurement for multiple assets received orgiven up simultaneously in exchanges of non-monetary assets measured at fair value. It also requires the disclosureof whether exchanges of non-monetary assets have commercial substance and the reasons why they do or do not havecommercial substance.
The CAS 7 (2019) took effect on 10 June 2019. Exchange of non-monetary assets between 1 January 2019 and theimplementation date should be adjusted based on the revised standard. Retrospective adjustment is not required forthe exchange of non-monetary assets prior to 1 January 2019. The adoption of CAS 7 (2019) has no material effect onthe consolidated financial position and consolidated financial performance of the Group as well as the financialposition and financial performance of the Company.
(d) CAS 12 (2019)
CAS 12 (2019) modifies the definition of debt restructuring to specify the scope of this standard, as well as theapplication of relevant financial instruments standards with respect to the recognition, measurement and presentationof financial instruments involved in debt restructuring. For debt restructuring in which a debt is settled by the transferof assets, CAS 12 (2019) modifies the principle of measurement for initial recognition of non-financial assetsreceived by the creditor, and gains or losses of the debtor from debt restructuring are recognised withoutdistinguishing whether they are gains or losses from asset transfer or debt restructuring. For debt restructuring inwhich a debt is settled by the issuance of equity instruments to the creditor, CAS 12 (2019) revises the principle ofmeasurement for initial recognition of its share of equity by the creditor, and provides more guidance on the principleof measurement for initial recognition of equity instruments by the debtor.
The effective date of CAS 12 (2019) is 17 June 2019. Debt restructuring that occurred between 1 January 2019 andthe effective date shall be adjusted according to CAS 12 (2019). Retrospective adjustment is not required for debtrestructuring prior to 1 January 2019. The adoption of CAS 12 (2019) has no material effect on the consolidatedfinancial position and consolidated financial performance of the Group as well as the financial position and financialperformance of the Company.
IV. Taxation
1 Main types of taxes and corresponding tax rates
| Tax type | ? | Tax basis | ? | Tax rate |
| ? | ? | ? | ? | ? |
| Value-added tax (VAT) | ? | Output VAT is calculated on product sales and taxable services revenue. The basis for VAT payable is to deduct input VAT from the output VAT for the period | ? | 6%，9%，10%，11%，13%， 16%，17% |
| City maintenance and construction tax | ? | Based on VAT paid, VAT exemption and offset for the period | ? | 7%，5% |
| Education surcharges and local education surcharges | ? | Based on VAT paid, VAT exemption and offset for the period | ? | 3%，2% |
| Corporate income tax | ? | Based on taxable profits | ? | 10% - 33% |
2 Corporate income tax
The income tax rate applicable to the Company for the year is 15% (2018: 15%).
Pursuant to the Corporate Income Tax Law of the People’s Republic of China treatment No.28, corporate income tax for keyadvanced and high-tech enterprises supported by the State is applicable to a preferential tax rate of 15%.
On 25 October 2017, the Company renewed the High-tech Enterprise Certificate No. GR201711002584, which was entitledjointly by Beijing Municipal Science and Technology Commission, Beijing Municipal Financial Bureau, Beijing MunicipalState Administration of Taxation and Beijing Municipal Local Administration of Taxation. The Company is subject tocorporate income tax rate of 15% since the date of certification with the valid period of three years.
The income tax rate applicable to other subsidiaries of the Group is 25% other than the following subsidiaries and theoverseas subsidiaries which subject to the local income tax rate.
The subsidiaries that are entitled to preferential tax treatments are as follows:
| Company name | Preferential rate | ? | Reason |
| ? | ? | ? | ? |
| Beijing BOE Optoelectronics Technology Co., Ltd. (BOE OT) | 15% | ? | High-tech Enterprise |
| Chengdu BOE Optoelectronics Technology Co., Ltd (Chengdu Optoelectronics) | 15% | ? | High-tech Enterprise |
| Hefei BOE Optoelectronics Technology Co., Ltd. (Hefei BOE) | 15% | ? | High-tech Enterprise |
| Beijing BOE Display Technology Co., Ltd. (BOE Display) | 15% | ? | High-tech Enterprise |
| Hefei Xinsheng Optoelectronics Technology Co., Ltd. (Hefei Xinsheng) | 15% | ? | High-tech Enterprise |
| Ordos Yuansheng Optoelectronics Co., Ltd. (Yuansheng Optoelectronics) | 15% | ? | Encouraged enterprise in Western Regions |
| Chongqing BOE Optoelectronics Co., Ltd. (Chongqing BOE) | 15% | ? | Encouraged enterprise in Western Regions |
| BOE (Hebei) Mobile Technology Co., Ltd. (BOE Hebei) | 15% | ? | High-tech Enterprise |
| BOE Optical Science and technology Co., Ltd (Optical Technology) | 15% | ? | High-tech Enterprise |
| Beijing BOE CHATANI ElectronicsCo., Ltd. (Beijing CHATANI) | 15% | ? | High-tech Enterprise |
| Hefei BOE Display Lighting Co., Ltd. (Hefei Display Lighting) | 15% | ? | High-tech Enterprise |
| Chongqing BOE Display Lighting Co., Ltd. (Chongqing Display Lighting) | 15% | ? | High-tech Enterprise |
| BOE Semi-conductor Co., Ltd. (BOE Semiconductor) | 15% | ? | High-tech Enterprise |
| Hefei BOE Semiconductor Co., Ltd. (Hefei Semiconductor) | 15% | ? | High-tech Enterprise |
| Beijing BOE Special Display Technology Co., Ltd. (Special Display) | 15% | ? | High-tech Enterprise |
| Beijing BOE Vacuum Electronics Co., Ltd. (Vacuum Electronics) | 15% | ? | High-tech Enterprise |
| Beijing Asahi Electronic Materials Co., Ltd. (Asahi Materials) | 15% | ? | High-tech Enterprise |
| Beijing BOE Vacuum Technology Co., Ltd. (Vacuum Technology) | 15% | ? | High-tech Enterprise |
| Beijing BOE Energy Technology Co., Ltd. (BOE Energy) | 15% | ? | High-tech Enterprise |
| Beijing BOE multimedia Technology Co., Ltd. (BOE multimedia) | 15% | ? | High-tech Enterprise |
| Fuzhou BOE Optoelectronics Technology Co., Ltd. (Fuzhou BOE) | 15% | ? | High-tech Enterprise |
| Hefei BOE Display Technology Co., Ltd. (Hefei Display Technology) | 15% | ? | High-tech Enterprise |
| Mianyang BOE Optoelectronics Technology Co., Ltd. (Mianyang BOE) | 15% | ? | Encouraged enterprise in Western Regions |
| BOE Smart IOT Technology Co., Ltd (Smart IOT) | 15% | ? | High-tech Enterprise |
| Company name | Preferential rate | ? | Reason |
| K-Tronics (Suzhou) Technology Co., Ltd. (Suzhou K-Tronics) | 15% | ? | High-tech Enterprise |
| Beijing BOE Sensing Technology Co., Ltd. (Sensing Technology) | 15% | ? | High-tech Enterprise |
| Chongqing BOE Smart Electronic System Co., Ltd (Chongqing Smart Electronic) | 15% | ? | Encouraged enterprise in Western Regions |
| Beijing BOE Health Technology Co., Ltd (Health Technology) | 15% | ? | High-tech Enterprise |
| Chongqing BOE Electronic Technology Co., Ltd (Chongqing Electronic Technology) | 15% | ? | Encouraged enterprise in Western Regions |
V. Notes to the consolidated financial statements
1 Cash at bank and on hand
??
| ? | 2019 | ? | 2018 | ||||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents | ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Cash on hand: | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| RMB | ? | ? | ? | ? | 352,736 | ? | ? | ? | ? | ? | 285,407 |
| USD | 1,927 | ? | 6.9762 | ? | 13,443 | ? | 1,364 | ? | 6.8632 | ? | 9,361 |
| HKD | 96,829 | ? | 0.8958 | ? | 86,739 | ? | 56,603 | ? | 0.8762 | ? | 49,596 |
| JPY | 51,485 | ? | 0.0641 | ? | 3,300 | ? | 1,668,876 | ? | 0.0619 | ? | 103,303 |
| KRW | 490,690 | ? | 0.0060 | ? | 2,944 | ? | 490,686 | ? | 0.0061 | ? | 2,993 |
| Other foreign currencies | ? | ? | ? | ? | 79,176 | ? | ? | ? | ? | ? | 87,145 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | ? | ? | ? | 538,338 | ? | ? | ? | ? | ? | 537,805 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Bank Deposits: | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| RMB | ? | ? | ? | ? | 22,108,949,641 | ? | ? | ? | ? | ? | 19,526,770,243 |
| USD | 3,793,451,398 | ? | 6.9762 | ? | 26,463,875,643 | ? | 3,215,270,076 | ? | 6.8632 | ? | 22,067,041,586 |
| HKD | 17,880,803 | ? | 0.8958 | ? | 16,017,623 | ? | 36,614,201 | ? | 0.8762 | ? | 32,081,363 |
| JPY | 11,996,438,527 | ? | 0.0641 | ? | 768,971,710 | ? | 15,077,127,145 | ? | 0.0619 | ? | 933,274,170 |
| KRW | 700,598,718 | ? | 0.0060 | ? | 4,203,592 | ? | 1,274,695,127 | ? | 0.0061 | ? | 7,775,640 |
| EUR | 110,515,896 | ? | 7.8155 | ? | 863,736,985 | ? | 94,362,955 | ? | 7.8473 | ? | 740,494,417 |
| Other foreign currencies | ? | ? | ? | ? | 43,452,413 | ? | ? | ? | ? | ? | 32,708,963 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | ? | ? | ? | 50,269,207,607 | ? | ? | ? | ? | ? | 43,340,146,382 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Other monetary funds: | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| RMB | ? | ? | ? | ? | 3,728,439,717 | ? | ? | ? | ? | ? | 4,883,082,015 |
| USD | 421,172,173 | ? | 6.9762 | ? | 2,938,181,313 | ? | 473,193,118 | ? | 6.8632 | ? | 3,247,619,007 |
| HKD | 3,156 | ? | 0.8958 | ? | 2,827 | ? | 11,423,973 | ? | 0.8762 | ? | 10,009,685 |
| JPY | 567,260,199 | ? | 0.0641 | ? | 36,353,437 | ? | 2,339,530 | ? | 0.0619 | ? | 144,817 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | ? | ? | ? | 6,702,977,294 | ? | ? | ? | ? | ? | 8,140,855,524 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | - | ? | ? | ? | 56,972,723,239 | ? | ? | ? | ? | ? | 51,481,539,711 |
Including: Total overseas deposits were equivalent to RMB 5,864,466,250 (2018: RMB 5,012,219,357).
As at 31 December 2019, other monetary funds were pledged by the Group amounting to USD 342,000,000 for short-termloans, RMB 151,840,291 and and USD 7,500,000 were pledged for long-term loans. The rest of other restricted monetaryfunds, amounting to RMB 4,112,379,475, were the deposits in commercial banks as security.
As at 31 December 2018, other monetary funds were pledged by the Group amounting to USD 305,000,000 for short-termloans, RMB142,547,192 and and USD 18,500,000 were pledged for long-term loans. The rest of other restricted monetaryfunds, amounting to RMB 5,768,050,799, were the deposits in commercial banks as security.
2 Financial assets held for trading
| Item | 31 December 2019 | ? | 1 January 2019 |
| ? | ? | ? | ? |
| Financial assets at fair value through profit or loss | 5,809,184,994 | ? | 4,433,393,359 |
| Including: Wealth management products | 5,809,184,994 | ? | 4,420,526,927 |
| Debt instruments | - | ? | 12,866,432 |
| ? | ? | ? | ? |
| Total | 5,809,184,994 | ? | 4,433,393,359 |
3 Bills receivable
(1) Classification of bills receivable
?Item
| Item | ? | 31 December 2019 | ? | 1 January 2019 | ? | 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? |
| Bank acceptance bills | ? | 331,145,492 | ? | 655,081,577 | ? | 655,081,577 |
| Commercial acceptance bills | ? | - | ? | 1,700,000 | ? | 1,700,000 |
| ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 331,145,492 | ? | 656,781,577 | ? | 656,781,577 |
All of the above bills are due within one year.
(2) The pledged bills receivable of the Group at the end of the year
As at 31 December 2019, there is no pledged bills for the Group (2018: RMB 6,605,869).
(3) Outstanding endorsed or discounted bills that have not matured at the end of the year:
?Item
| Item | ? | Amount derecognised at year end | ? | Amount not-derecognised at year end |
| ? | ? | ? | ? | ? |
| Bank acceptance bills | ? | 7,172,846 | ? | 57,102,517 |
| ? | ? | ? | ? | ? |
| Total | ? | 7,172,846 | ? | 57,102,517 |
For the year ended 31 December 2019, there was no amount transferred to accounts receivable from bills receivable due tonon-performance of the issuers of the Group (2018: nil).
4 Accounts receivable
(1) The Group’s accounts receivable by customer type:
| Item | ? | 31 December 2019 | ? | 1 January 2019 | ? | 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? |
| Amounts due from related parties | ? | 1,960,247 | ? | 52,246 | ? | 52,246 |
| Amounts due from other customers | ? | 18,481,732,857 | ? | 20,199,950,102 | ? | 20,199,950,102 |
| ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | 18,483,693,104 | ? | 20,200,002,348 | ? | 20,200,002,348 |
| ? | ? | ? | ? | ? | ? | ? |
| Less: Provision for bad and doubtful debts | ? | 348,005,298 | ? | 325,211,590 | ? | 319,321,830 |
| ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 18,135,687,806 | ? | 19,874,790,758 | ? | 19,880,680,518 |
(2) The Group’s accounts receivable by currency type:
??
| ? | 2019 | ? | 2018 | ||||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents | ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| RMB | ? | ? | ? | ? | 8,041,480,485 | ? | ? | ? | ? | ? | 7,253,239,876 |
| USD | 1,438,995,152 | ? | 6.9762 | ? | 10,038,717,980 | ? | 1,800,476,186 | ? | 6.8632 | ? | 12,357,028,161 |
| JPY | 25,172,988 | ? | 0.0641 | ? | 1,613,589 | ? | 36,523,949 | ? | 0.0619 | ? | 2,260,467 |
| Other foreign currencies | ? | ? | ? | ? | 401,881,050 | ? | ? | ? | ? | ? | 587,473,844 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | ? | ? | ? | 18,483,693,104 | ? | ? | ? | ? | ? | 20,200,002,348 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Less: Provision for bad and doubtful debts | ? | ? | ? | ? | 348,005,298 | ? | ? | ? | ? | ? | 319,321,830 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | ? | 18,135,687,806 | ? | ? | ? | ? | ? | 19,880,680,518 |
(3) The ageing analysis of accounts receivable is as follows:
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Within 1 year (inclusive) | ? | 17,872,807,760 | ? | 19,748,808,258 |
| 1 to 2 years (inclusive) | ? | 233,485,656 | ? | 136,291,482 |
| 2 to 3 years (inclusive) | ? | 68,549,411 | ? | 279,756,940 |
| Over 3 years | ? | 308,850,277 | ? | 35,145,668 |
| ? | ? | ? | ? | ? |
| Sub-total | ? | 18,483,693,104 | ? | 20,200,002,348 |
| ? | ? | ? | ? | ? |
| Less: Provision for bad and doubtful debts | ? | 348,005,298 | ? | 319,321,830 |
| ? | ? | ? | ? | ? |
| Total | ? | 18,135,687,806 | ? | 19,880,680,518 |
The ageing is counted starting from the date when accounts receivable are recognised.
(4) Accounts receivable by provisioning method
| ? | ? | 2019 | ||||||||
| ? | ? | Book value | ? | Provision for impairment | ? | ? | ||||
| Category | ? | Amount | ? | Percentage (%) | ? | Amount | ? | Percentage (%) | ? | Carrying amount |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Individual assessment | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| - Customers with high credit risk | ? | 334,464,437 | ? | 2% | ? | 334,419,437 | ? | 100% | ? | 45,000 |
| - Customers with low credit risk | ? | 1,398,318,800 | ? | 7% | ? | 38,734 | ? | 0% | ? | 1,398,280,066 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Collective assessment | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| - Customers with moderate credit risk | ? | 16,750,909,867 | ? | 91% | ? | 13,547,127 | ? | 0% | ? | 16,737,362,740 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 18,483,693,104 | ? | 100% | ? | 348,005,298 | ? | 2% | ? | 18,135,687,806 |
??
| ? | ? | 2018 | ||||||||
| ? | ? | Book value | ? | Provision for impairment | ? | ? | ||||
| Category | ? | Amount | ? | Percentage (%) | ? | Amount | ? | Percentage (%) | ? | Carrying amount |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Accounts receivables that are collectively assessed for impairment based on credit risk characteristics | ? | 20,149,872,554 | ? | 100% | ? | 275,864,448 | ? | 1% | ? | 19,874,008,106 |
| Individually insignificant but assessed for impairment individually | ? | 50,129,794 | ? | 0% | ? | 43,457,382 | ? | 87% | ? | 6,672,412 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 20,200,002,348 | ? | 100% | ? | 319,321,830 | ? | 2% | ? | 19,880,680,518 |
(a) Criteria for collective assessment in 2019 and details:
?Customer group?
| Customer group? | Basis | |
| ?Customers with high credit risk | With special matters, litigations or the deterioration of customers’ credit status | |
| Customers with low credit risk | Banks, insurance companies, large state-owned enterprises and public institutions | |
| Customers with moderate credit risk | Customers not included in Groups above |
(b) Assessment of ECLs on accounts receivable in 2019:
At all times the Group measures the impairment loss for accounts receivable at an amount equal to lifetime ECLs,
and the ECLs are based on the number of overdue days and the loss given default. According to the Group’s historicalexperience, different loss models are applicable to different customer groups.
(5) Movements of provisions for bad and doubtful debts:
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Balance under the previous financial instrument standards | ? | 319,321,830 | ? | 304,687,117 |
| Adjustment on initial application of the new financial instrument standards | ? | 5,889,760 | ? | - |
| Balance at the beginning of the year after adjustment | ? | 325,211,590 | ? | 304,687,117 |
| Charge during the year | ? | 23,510,271 | ? | 5,005,871 |
| Recoveries during the year | ? | 1,493,365 | ? | 1,779,710 |
| Written-off during the year | ? | 4,211,814 | ? | 2,475,273 |
| Translation differences | ? | 4,988,616 | ? | 13,883,825 |
| ? | ? | ? | ? | ? |
| Balance at the end of the year | ? | 348,005,298 | ? | 319,321,830 |
(6) Five largest accounts receivable by debtor at the end of the year
The total of five largest accounts receivable of the Group at the end of the year was RMB 8,182,469,728, representing 45% ofthe total accounts receivable, and no provision was made for bad and doubtful debts after assessment.
5 Prepayments
(1) The Group’s prepayments by category:
?
?
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Prepayment for inventory | ? | 107,673,472 | ? | 252,434,159 |
| Prepayment for electricity and water | 271,295,136 | 189,744,046 | ||
| Others | ? | 248,017,098 | ? | 328,455,243 |
| ? | ? | ? | ? | ? |
| Total | ? | 626,985,706 | ? | 770,633,448 |
(2) The ageing analysis of prepayments is as follows:
| ? | 2019 | ? | 2018 | ||||
| Ageing | Amount | ? | Percentage (%) | ? | Amount | ? | Percentage (%) |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Within 1 year (inclusive) | 459,763,565 | ? | 73% | ? | 721,657,321 | ? | 94% |
| 1 to 2 years (inclusive) | 148,351,079 | ? | 24% | ? | 46,363,026 | ? | 6% |
| 2 to 3 years (inclusive) | 17,719,439 | ? | 3% | ? | 2,035,569 | ? | - |
| Over 3 years | 1,151,623 | ? | - | ? | 577,532 | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 626,985,706 | ? | 100% | ? | 770,633,448 | ? | 100% |
The ageing is counted starting from the date when prepayments are recognised.
The total of five largest prepayments of the Group at the end of the year is RMB286,829,522, representing 46% of the totalprepayments.
6、 Other receivables
?
?
| ? | Note | 31 December 2019 | ? | 1 January 2019 | ? | 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? |
| Interest receivable | ? | 215,977,831 | ? | 140,597,317 | ? | 140,597,317 |
| Dividends receivable | ? | - | ? | 3,711,768 | ? | 3,711,768 |
| Others | (1) | 490,193,281 | ? | 2,307,272,817 | ? | 2,309,865,886 |
| ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 706,171,112 | ? | 2,451,581,902 | ? | 2,454,174,971 |
(1) Others
(a) The Group’s other receivable by customer type:
?Customer type
| Customer type | ? | 31 December 2019 | ? | 1 January 2019 | ? | 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? |
| Amounts due from related parties | ? | 603,515 | ? | 12,148 | ? | 12,148 |
| Amounts due from other customers | ? | 498,225,877 | ? | 2,310,194,250 | ? | 2,310,194,250 |
| ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | 498,829,392 | ? | 2,310,206,398 | ? | 2,310,206,398 |
| ? | ? | ? | ? | ? | ? | ? |
| Less: Provision for bad and doubtful debts | ? | 8,636,111 | ? | 2,933,581 | ? | 340,512 |
| ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 490,193,281 | ? | 2,307,272,817 | ? | 2,309,865,886 |
(b) The Group’s other receivable by currency type:
| ? | 2019 | ? | 2018 | ||||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents | ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| RMB | ? | ? | ? | ? | 457,159,067 | ? | ? | ? | ? | ? | 2,278,359,260 |
| USD | 3,966,373 | ? | 6.9762 | ? | 27,670,211 | ? | 1,511,739 | ? | 6.8632 | ? | 10,375,364 |
| JPY | 42,000,525 | ? | 0.0641 | ? | 2,692,234 | ? | 35,383,000 | ? | 0.0619 | ? | 2,189,854 |
| Other foreign currencies | ? | ? | ? | ? | 11,307,880 | ? | ? | ? | ? | ? | 19,281,920 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | ? | ? | ? | 498,829,392 | ? | ? | ? | ? | ? | 2,310,206,398 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Less: Provision for bad and doubtful debts | ? | ? | ? | ? | 8,636,111 | ? | ? | ? | ? | ? | 340,512 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | ? | 490,193,281 | ? | ? | ? | ? | ? | 2,309,865,886 |
(c) The ageing analysis of the Group’s other receivables is as follows:
?
?
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Within 1 year (inclusive) | ? | 209,994,098 | ? | 2,015,309,595 |
| 1 to 2 years (inclusive) | ? | 25,165,256 | ? | 29,027,513 |
| 2 to 3 years (inclusive) | ? | 14,546,942 | ? | 28,652,382 |
| Over 3 years | ? | 249,123,096 | ? | 237,216,908 |
| ? | ? | ? | ? | ? |
| Sub-total | ? | 498,829,392 | ? | 2,310,206,398 |
| ? | ? | ? | ? | ? |
| Less: Provision for bad and doubtful debts | ? | 8,636,111 | ? | 340,512 |
| ? | ? | ? | ? | ? |
| Total | ? | 490,193,281 | ? | 2,309,865,886 |
The ageing is counted starting from the date when other receivables are recognized.
(d) Other receivables by provisioning method
??
| ? | 2019 | ||||||||
| ? | Book value | ? | Provision for bad and doubtful debts | ? | ? | ||||
| Category | Amount | ? | Percentage (%) | ? | Amount | ? | Percentage (%) | ? | Carrying amount |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Individual assessment | 8,636,111 | ? | 2% | ? | 8,636,111 | ? | 100% | ? | - |
| Collective assessment | 490,193,281 | 98% | - | - | 490,193,281 | ||||
| Total | 498,829,392 | ? | 100% | ? | 8,636,111 | ? | 2% | ? | 490,193,281 |
| ? | 2018 | ||||||||
| ? | Book value | ? | Provision for bad and doubtful debts | ? | ? | ||||
| Category | Amount | ? | Percentage (%) | ? | Amount | ? | Percentage (%) | ? | Carrying amount |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Accounts receivables that are collectively assessed for impairment based on credit risk characteristics | 2,309,865,886 | ? | 100% | ? | - | ? | - | ? | 2,309,865,886 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Individually insignificant but assessed for impairment individually | 340,512 | ? | 0% | ? | 340,512 | ? | 100% | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 2,310,206,398 | ? | 100% | ? | 340,512 | ? | 0% | ? | 2,309,865,886 |
(e) Movements of provisions for bad and doubtful debts
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Balance under the previous financial instrument standards | ? | 340,512 | ? | 509,257 |
| Adjustment on initial application of the new financial instrument standards | ? | 2,593,069 | ? | - |
| Balance at the beginning of the year after adjustment | ? | 2,933,581 | ? | 509,257 |
| Charge during the year | ? | 6,251,161 | ? | 1,273,563 |
| Recoveries during the year | ? | 5,440 | ? | - |
| Written-off during the year | ? | 543,191 | ? | 1,442,308 |
| ? | ? | ? | ? | ? |
| Balance at the end of the year | ? | 8,636,111 | ? | 340,512 |
(f) The Group’s other receivables categorised by nature
?
Nature
| Nature | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| VAT refunds and export tax rebate | ? | 10,648,330 | ? | 415,687,566 |
| Amount due from equity transfer | ? | 200,000,000 | ? | 200,000,000 |
| Deposits | ? | 178,899,557 | ? | 148,893,918 |
| Wealth management receivables | ? | - | ? | 1,408,094,816 |
| Others | ? | 109,281,505 | ? | 137,530,098 |
| ? | ? | ? | ? | ? |
| Sub-total | ? | 498,829,392 | ? | 2,310,206,398 |
| ? | ? | ? | ? | ? |
| Less: Provision for bad and doubtful debts | ? | 8,636,111 | ? | 340,512 |
| ? | ? | ? | ? | ? |
| Total | ? | 490,193,281 | ? | 2,309,865,886 |
(g) Five largest other receivables by debtor at the end of the year
The total of five largest other receivables of the Group at the end of the year was RMB 299,820,059, most of whichare amount due from equity transfer, deposits and quality indemnity. No provision is made for bad and doubtful debtsafter assessment.
7 Inventories
(1) The Group’s inventories by category:
| ? | 2019 | ? | 2018 | ||||||||
| ? | Book value | ? | Provision for impairment of inventories | ? | Carrying amount | ? | Book value | ? | Provision for impairment of inventories | ? | Carrying amount |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Raw materials | 4,663,835,151 | ? | 288,351,560 | ? | 4,375,483,591 | ? | 4,350,466,710 | ? | 293,435,033 | ? | 4,057,031,677 |
| Work in progress | 1,750,768,537 | ? | 372,043,796 | ? | 1,378,724,741 | ? | 1,442,498,808 | ? | 150,867,947 | ? | 1,291,630,861 |
| Finished goods | 7,671,273,928 | ? | 1,152,223,633 | ? | 6,519,050,295 | ? | 7,770,574,684 | ? | 1,244,503,744 | ? | 6,526,070,940 |
| Consumables | 122,936,135 | ? | - | ? | 122,936,135 | ? | 113,493,354 | ? | 2,828,660 | ? | 110,664,694 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 14,208,813,751 | ? | 1,812,618,989 | ? | 12,396,194,762 | ? | 13,677,033,556 | ? | 1,691,635,384 | ? | 11,985,398,172 |
As at 31 December 2019, there was no amount of capitalised borrowing cost in the Group’s closing balance of inventories(2018: nil).
As at 31 December 2019, the Group had no inventory used as collateral (2018: nil).
(2) An analysis of provision for impairment of inventories of the Group is as follows:
??
| ? | ? | ? | ? | ? | Decrease during the year | ? | ? | ||
| ? | Balance at the beginning of the year | ? | Charge during the year | ? | Reversal | ? | Written-off | ? | Balance at the end of the year |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Raw materials | 293,435,033 | ? | 248,988,643 | ? | (139,725,615) | ? | (114,346,501) | ? | 288,351,560 |
| Work in progress | 150,867,947 | ? | 301,956,660 | ? | (67,743,603) | ? | (13,037,208) | ? | 372,043,796 |
| Finished goods | 1,244,503,744 | ? | 2,348,636,152 | ? | (702,933,346) | ? | (1,737,982,917) | ? | 1,152,223,633 |
| Consumables | 2,828,660 | ? | - | ? | (2,828,660) | ? | - | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 1,691,635,384 | ? | 2,899,581,455 | ? | (913,231,224) | ? | (1,865,366,626) | ? | 1,812,618,989 |
8 Assets held for sale
2019
| ? | Non-current assets held for sale | |||
| ? | Carrying amount | ? | Fair value | |
| Fixed assets | ? | 144,680,734 | ? | 328,796,100 |
| Intangible assets | ? | 29,230,086 | ? | 55,251,000 |
| ? | ? | ? | ? | ? |
| Total of assets held for sale | ? | 173,910,820 | ? | 384,047,100 |
In March 2018, Suzhou K-Tronics entered into the Recovery Agreement of Land and Properties with ManagementCommittee of Wujiang Economic and Technological Development Zone to sell properties and other attachments located inWujiang Economic and Technological Development Zone. Suzhou K-Tronics and the Management Committee of WujiangEconomic and Technological Development Zone agreed that the recovery price of the subject matter is RMB 384,047,100,which is determined according to the evaluation report. The expected selling period is 2020 and the agreement has beenapproved by the resolution of the Board of Directors of the Group. The above non-current assets proposed for sale ispresented as a non-current asset held for sale in the financial statements.
9 Other current assets
??
| ? | ? | 31 December 2019 | ? | 1 January 2019 | 31 December 2018 | |
| ? | ? | ? | ? | ? | ? | |
| VAT on tax credits | ? | 5,979,120,265 | ? | 4,841,165,133 | 4,841,165,133 | |
| Input tax to be verified or deducted | ? | 1,984,055,118 | ? | 1,773,794,503 | 1,773,794,503 | |
| Income taxes prepaid | ? | 45,154,225 | ? | 132,824,503 | 132,824,503 | |
| Wealth management products | ? | 1,162,273,445 | ? | 1,113,886,639 | 5,534,413,566 | |
| Others | ? | 126,034,014 | ? | 180,876,074 | 180,876,074 | |
| ? | ? | ? | ? | ? | ? | |
| Total | ? | 9,296,637,067 | ? | 8,042,546,852 | 12,463,073,779 | |
| ? | ||||||
As at 31 December 2019, all of the wealth management products owned by the Group are structured deposits due within oneyear, which are measured at amortised cost.
10 Available-for-sale financial assets
(1) Available-for-sale financial assets
| ? | 2018 | ||||
| Item | Book value | ? | Provision for impairment | ? | Carrying amount |
| ? | ? | ? | ? | ? | ? |
| Available-for-sale debt instruments | 12,866,432 | ? | - | ? | 12,866,432 |
| Available-for-sale equity instruments | ? | ? | ? | ? | ? |
| - Measured at fair value | 528,735,772 | ? | 150,099,655 | ? | 378,636,117 |
| - Measured at cost | 377,015,762 | ? | 34,495,952 | ? | 342,519,810 |
| ? | ? | ? | ? | ? | ? |
| Total | 918,617,966 | ? | 184,595,607 | ? | 734,022,359 |
(2) Available-for-sale financial assets at fair value at the end of 2018:
??
| ? | ? | Available-for-sale equity instruments | ? | Available-for-sale debt instruments | ? | Total |
| ? | ? | ? | ? | ? | ? | ? |
| Cost of equity instruments/amortized cost of debt instruments | ? | 555,793,175 | ? | 12,565,172 | ? | 568,358,347 |
| Fair value | ? | 378,636,117 | ? | 12,866,432 | ? | 391,502,549 |
| Accumulated fair value movements in other comprehensive income | ? | (27,057,403) | ? | 301,260 | ? | (26,756,143) |
| Provision for impairment | ? | (150,099,655) | ? | - | ? | (150,099,655) |
(3) Available-for-sale financial assets at cost at the end of 2018:
| ? | Book value | ? | Provision for impairment | ? | ? | ||||||||||||||
| Investee | Balance at the beginning of the year | ? | Increase during the year | ? | Decrease during the year | ? | Translation differences | ? | Balance at the end of the year | ? | Balance at the beginning of the year | ? | Increase during the year | ? | Translation differences | ? | Balance at the end of the year | ? | Percentage of shareholding in investees (%) |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Teralane Semiconductor Inc | 11,868,000 | ? | - | ? | - | ? | - | ? | 11,868,000 | ? | - | ? | - | ? | - | ? | - | ? | 7.29% |
| Zhejiang BOE Display Technology Co., Ltd. | 321,256 | ? | - | ? | - | ? | - | ? | 321,256 | ? | - | ? | - | ? | - | ? | - | ? | 7.03% |
| Zhejiang Qiusheng Photoelectric Technology Co., Ltd. | 248,776 | ? | - | ? | - | ? | - | ? | 248,776 | ? | - | ? | - | ? | - | ? | - | ? | 5.09% |
| National Engineering Laboratory of Digital Television (Beijing) Co., Ltd. | 6,250,000 | ? | - | ? | - | ? | - | ? | 6,250,000 | ? | - | ? | - | ? | - | ? | - | ? | 12.50% |
| Meta Company | 32,670,951 | ? | - | ? | - | ? | 1,645,001 | ? | 34,315,952 | ? | - | ? | 33,130,452 | ? | 1,185,500 | ? | 34,315,952 | ? | 5.66% |
| Danhua Capital, L. P. | 24,503,250 | ? | - | ? | - | ? | 1,233,750 | ? | 25,737,000 | ? | - | ? | - | ? | - | ? | - | ? | 5.48% |
| Danhua Capital II, L.P. | 34,304,550 | ? | 26,419,000 | ? | - | ? | 2,761,050 | ? | 63,484,600 | ? | - | ? | - | ? | - | ? | - | ? | 3.29% |
| Kateeva Inc. | 78,051,019 | ? | - | ? | - | ? | 3,929,905 | ? | 81,980,924 | ? | - | ? | - | ? | - | ? | - | ? | 3.00% |
| DEPICT INC. | 13,068,400 | ? | - | ? | - | ? | 658,000 | ? | 13,726,400 | ? | - | ? | - | ? | - | ? | - | ? | 22.20% |
| MOOV INC. | 26,244,971 | ? | - | ? | - | ? | 1,321,446 | ? | 27,566,417 | ? | - | ? | - | ? | - | ? | - | ? | 7.69% |
| ZGLUE INC. | 9,801,289 | ? | - | ? | - | ? | 493,499 | ? | 10,294,788 | ? | - | ? | - | ? | - | ? | - | ? | 6.00% |
| Fabord Ltd. | 910 | ? | - | ? | (910) | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - |
| Hefei Xin Jing Yuan Electronic Materials Co., Ltd. | 3,000,000 | ? | - | ? | (3,000,000) | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - |
| Nanosys INC | 49,006,500 | ? | - | ? | - | ? | 2,467,500 | ? | 51,474,000 | ? | - | ? | - | ? | - | ? | - | ? | 3.14% |
| Ceribell INC | 8,494,453 | ? | - | ? | - | ? | 427,699 | ? | 8,922,152 | ? | - | ? | - | ? | - | ? | - | ? | 2.05% |
| Baebies INC | 28,709,230 | ? | - | ? | - | ? | 1,445,523 | ? | 30,154,753 | ? | - | ? | - | ? | - | ? | - | ? | 9.05% |
| Illumina Fund I,L.P. | 5,605,265 | ? | 4,433,785 | ? | - | ? | 451,694 | ? | 10,490,744 | ? | - | ? | - | ? | - | ? | - | ? | 2.14% |
| Others | 180,000 | ? | - | ? | - | ? | - | ? | 180,000 | ? | 180,000 | ? | - | ? | - | ? | 180,000 | ? | ? |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 332,328,820 | ? | 30,852,785 | ? | (3,000,910) | ? | 16,835,067 | ? | 377,015,762 | ? | 180,000 | ? | 33,130,452 | ? | 1,185,500 | ? | 34,495,952 | ? | ? |
11 Long-term equity investments
(1) The Group’s long-term equity investments by category:
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Investments in associates | ? | 3,495,896,246 | ? | 2,926,303,858 |
| ? | ? | ? | ? | ? |
| Sub-total | ? | 3,495,896,246 | ? | 2,926,303,858 |
| ? | ? | ? | ? | ? |
| Less: Provision for impairment | ? | 777,858,312 | ? | 537,136,972 |
| ? | ? | ? | ? | ? |
| Total | ? | 2,718,037,934 | ? | 2,389,166,886 |
(2) Movements of long-term equity investments during the year are as follows:
| Investee | Balance at the beginning of the year | ? | Increase in investments | Decrease in investments | ? | Investment income recognised under equity method | ? | Other comprehensive income | ? | Other equity movements | ? | Declared distribution of cash dividends or profits | Translation differences arising from translation of foreign currency financial statements | ? | Balance at the end of the year | ||
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | |||
| Beijing Nissin Electronics Precision Component Co., Ltd. | 538,489 | ? | - | - | ? | (1,698,667) | ? | - | ? | 1,643,426 | ? | - | - | ? | 483,248 | ||
| Beijing Nittan Electronic Co., Ltd. | 61,733,085 | ? | - | - | ? | 6,075,670 | ? | - | ? | - | ? | (3,000,000) | - | ? | 64,808,755 | ||
| Erdos BOE Energy Investment Co., Ltd. | 907,458,312 | ? | - | - | ? | (110,086) | ? | - | ? | - | ? | - | - | ? | 907,348,226 | ||
| Beijing Infi-Hailin Venture Investment Co., Ltd. | 435,828 | ? | - | - | ? | 227,387 | ? | - | ? | - | ? | - | - | ? | 663,215 | ||
| Beijing Infi-Hailin Venture Investment (Limited Partnership) | 82,336,933 | ? | - | (10,000,000) | ? | (14,927,922) | ? | 16,975,941 | ? | - | ? | - | - | ? | 74,384,952 | ||
| TPV Display Technology (China) Limited | 23,001,359 | ? | - | - | ? | 1,544,305 | ? | - | ? | - | ? | - | - | ? | 24,545,664 | ||
| Beijing Xindongneng Investment Fund (Limited Partnership) | 1,455,174,877 | ? | - | (129,089,011) | ? | 268,474,328 | ? | 349,954,655 | ? | - | ? | - | - | ? | 1,944,514,849 | ||
| Beijing Xindongneng Investment Management Co., Ltd. | 5,188,862 | ? | - | - | ? | 2,221,199 | ? | - | ? | - | ? | - | - | ? | 7,410,061 | ||
| Shenzhen Yunyinggu Technology Co., Ltd. | 15,481,506 | ? | - | (10,800,923) | ? | (17,043,172) | ? | - | ? | 25,077,673 | ? | - | - | ? | 12,715,084 | ||
| Beijing Xloong Technologies Co., Ltd | 22,609,211 | ? | - | - | ? | (372,167) | ? | - | ? | - | ? | - | - | ? | 22,237,044 | ||
| Beijing Innovation Industry Investment Co., Ltd | - | ? | 100,000,000 | - | ? | 363,345 | ? | - | ? | - | ? | - | - | ? | 100,363,345 | ||
| Beijing Electric Control Industry Investment Co., Ltd | - | ? | 17,000,000 | - | ? | (158,391) | ? | - | ? | - | ? | - | - | ? | 16,841,609 | ||
| New on Technology Co.Ltd. | 3,185,494 | ? | - | - | ? | (377,351) | ? | - | ? | - | ? | - | (80,537) | ? | 2,727,606 | ||
| Cnoga Medical Co.Ltd. | 343,160,000 | ? | - | - | ? | (40,804,586) | ? | - | ? | - | ? | - | 5,151,489 | ? | 307,506,903 | ||
| Beijing Zhonglianhe Ultra HD ollaborative Technology Center Co., Ltd. | 3,000,000 | ? | - | - | ? | (284,740) | ? | - | ? | - | ? | - | - | ? | 2,715,260 | ||
| Hefei Xin Jing Yuan Electronic Materials Co., Ltd. | 2,999,902 | ? | - | - | ? | (2,999,902) | ? | - | ? | - | ? | - | - | ? | - | ||
| Shenzhen Jiangcheng Technology Co., Ltd. | - | ? | 6,738,989 | - | ? | (108,564) | ? | - | ? | - | ? | - | - | ? | 6,630,425 | ||
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | |||
| Sub-total | 2,926,303,858 | ? | 123,738,989 | (149,889,934) | ? | 200,020,686 | ? | 366,930,596 | ? | 26,721,099 | ? | (3,000,000) | 5,070,952 | ? | 3,495,896,246 | ||
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | |||
| Less: Provision for impairment | 537,136,972 | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | 777,858,312 | |||
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | |||
| Total | 2,389,166,886 | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | 2,718,037,934 |
As at 31 December 2019, Hefei Xin Jing Yuan Electronic Materials Co., Ltd. suffered continuous loss and the Group does not have an obligation to assume additional losses. Therefore, theCompany discontinues recognising its share of further losses after the carrying amount of long-term equity investment is reduced to zero. As at 31 December 2019, the accumulated unrecognisedinvestment losses was RMB 17,817,673 (2018: nil).
12 Investments in other equity instruments
| Item | 31 December 2019 | ? | 1 January 2019 |
| ? | ? | ? | ? |
| Listed equity instruments investment | ? | ? | ? |
| - TPV Technology Limited* | - | ? | 25,613,279 |
| - Beijing Electronic City High Tech Group Co., Ltd | 72,585,692 | ? | 83,995,943 |
| - Bank of Chongqing Co., Ltd. | 105,407,103 | ? | 98,705,067 |
| - CSC Securities Co., Ltd | 68,545,920 | ? | 44,412,575 |
| - New century medical Holding Co., Ltd | 53,586,259 | ? | 125,909,253 |
| Unlisted equity instruments investment | ? | ? | ? |
| - Teralane Semiconductor Inc | - | ? | 11,868,000 |
| - Zhejiang BOE Display Technology Co., Ltd. | 321,256 | ? | 321,256 |
| - Zhejiang Qiusheng Photoelectric Technology Co., Ltd. | 248,776 | ? | 248,776 |
| - National Engineering Laboratory of Digital Television (Beijing) Co., Ltd. | 6,250,000 | ? | 6,250,000 |
| - Meta Company | - | ? | - |
| - Danhua Capital, L. P. | 26,160,750 | ? | 25,737,000 |
| - Danhua Capital II, L.P. | 64,529,850 | ? | 63,484,600 |
| - Kateeva Inc. | 83,330,709 | ? | 81,980,924 |
| - DEPICT INC. | - | ? | 13,726,400 |
| - MOOV INC. | 28,020,288 | ? | 27,566,417 |
| - ZGLUE INC. | 10,464,288 | ? | 10,294,788 |
| - Nanosys INC | 52,321,500 | ? | 51,474,000 |
| - Ceribell INC | 9,069,052 | ? | 8,922,152 |
| - Baebies INC | 30,651,239 | ? | 30,154,753 |
| - Illumina Fund I,L.P. | 17,181,203 | ? | 10,490,744 |
| - ACQIS Technology, Inc. | 1,395,242 | ? | - |
| - KA IMAGING INC. | 2,007,520 | ? | - |
| - Beijing Dongfang Electronic Industry Co., Ltd | - | ? | - |
| ? | ? | ? | ? |
| Total | 632,076,647 | ? | 721,155,927 |
Note*: TPV Technology Limited delisted on 14 November 2019, paid most of the shareholders at SEHK at 3.86 HK dollar
per share except several shareholders. The Company received Bank acceptance bills of 94,030,377 HK dollar inNovember 2019.
(1) Investments in other equity instruments:
| Item | Reason for being designated at fair value through other comprehensive income | ? | Dividend income recognised for the year | ? | Accumulated gains or losses recognised in other comprehensive income (“-” for losses) | ? | Amount transferred from other comprehensive income to retained earnings | ? | Reason for transferring from other comprehensive income to retained earnings |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Listed equity instruments investment | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| - TPV Technology Limited | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | 471,354 | ? | - | ? | 50,430,448 | ? | Disposal |
| - Beijing Electronic City High Tech Group Co., Ltd | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | 1,883,379 | ? | (17,574,736) | ? | - | ? | Not applicable |
| - Bank of Chongqing Co., Ltd. | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | 3,881,382 | ? | (14,677,272) | ? | - | ? | Not applicable |
| - CSC Securities Co., Ltd | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | 2,055,835 | ? | (1,495,444) | ? | - | ? | Not applicable |
| - New century medical Holding Co., Ltd | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | (87,262,590) | ? | - | ? | Not applicable |
| Unlisted equity instruments investment | ? | ? | ? | ||||||
| - Teralane Semiconductor Inc | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | (11,868,000) | ? | - | ? | Not applicable |
| - Zhejiang BOE Display Technology Co., Ltd. | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | - | ? | - | ? | Not applicable |
| - Zhejiang Qiusheng Photoelectric Technology Co., Ltd. | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | - | ? | - | ? | Not applicable |
| - National Engineering Laboratory of Digital Television (Beijing) Co., Ltd. | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | - | ? | - | ? | Not applicable |
| - Meta Company | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | (34,684,948) | ? | - | ? | Not applicable |
| - Danhua Capital, L. P. | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | 1,692,255 | ? | 147,000 | ? | - | ? | Not applicable |
| - Danhua Capital II, L.P. | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | 1,989,674 | ? | - | ? | Not applicable |
| - Kateeva Inc. | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | 468,243 | ? | - | ? | Not applicable |
| - DEPICT INC. | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | (13,874,000) | ? | - | ? | Not applicable |
| - MOOV INC. | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | 157,449 | ? | - | ? | Not applicable |
| - ZGLUE INC. | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | 58,800 | ? | - | ? | Not applicable |
| - Nanosys INC | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | 1,972,500 | ? | - | ? | Not applicable |
| - Ceribell INC | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | 406,770 | ? | - | ? | Not applicable |
| - Baebies INC | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | 1,527,685 | ? | - | ? | Not applicable |
| - Illumina Fund I,L.P. | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | 577,382 | ? | - | ? | Not applicable |
| - ACQIS Technology, Inc. | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | (168,720) | ? | - | ? | Not applicable |
| - KA IMAGING INC. | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | - | ? | - | ? | Not applicable |
| - Beijing Dongfang Electronic Industry Co., Ltd | With the intention of establishing or maintaining a long-term investment for strategic reasons | ? | - | ? | (180,000) | ? | - | ? | Not applicable |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | 9,984,205 | ? | (174,480,207) | ? | 50,430,448 | ? | ? |
13 Investment properties
| ? | ? | Land use rights | ? | Buildings | ? | Total |
| ? | ? | ? | ? | ? | ? | ? |
| Cost | ? | ? | ? | ? | ? | ? |
| Balance at the beginning of the year | ? | 687,434,677 | ? | 1,012,158,845 | ? | 1,699,593,522 |
| Additions during the year | ? | - | ? | 3,657,282 | ? | 3,657,282 |
| ? | ? | ? | ? | ? | ? | ? |
| Balance at the end of the year | ? | 687,434,677 | ? | 1,015,816,127 | ? | 1,703,250,804 |
| ? | ? | ? | ? | ? | ? | ? |
| Less: Accumulated depreciation or amortization | ? | ? | ? | ? | ? | ? |
| Balance at the beginning of the year | ? | 127,149,702 | ? | 288,576,169 | ? | 415,725,871 |
| Charge for the year | ? | 13,622,701 | ? | 32,659,382 | ? | 46,282,083 |
| ? | ? | ? | ? | ? | ? | ? |
| Balance at the end of the year | ? | 140,772,403 | ? | 321,235,551 | ? | 462,007,954 |
| ? | ||||||
| ? | ? | ? | ? | ? | ? | ? |
| Carrying amounts | ? | ? | ? | ? | ? | ? |
| At the end of the year | ? | 546,662,274 | ? | 694,580,576 | ? | 1,241,242,850 |
| ? | ? | ? | ? | ? | ? | ? |
| At the beginning of the year | ? | 560,284,975 | ? | 723,582,676 | ? | 1,283,867,651 |
14 Fixed assets
(1) Analysis of the Group’s fixed assets are as follows:
| Item | Plant and buildings | ? | Equipment | ? | Others | ? | Total |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Cost | ? | ? | ? | ? | ? | ? | ? |
| Balance at the beginning of the year | 36,749,694,289 | ? | 152,959,161,443 | ? | 3,253,525,318 | ? | 192,962,381,050 |
| Additions during the year | ? | ? | ? | ? | ? | ? | ? |
| - Purchase | 153,590,639 | ? | 797,702,827 | ? | 586,734,795 | ? | 1,538,028,261 |
| - Transfer from construction in progress | 2,560,907,495 | ? | 11,348,612,986 | ? | 1,271,722,362 | ? | 15,181,242,843 |
| Disposals or written-off during the year | (18,248,457) | ? | (354,692,916) | ? | (37,340,323) | ? | (410,281,696) |
| Transfer to assets held for sale during the year | (286,546,396) | ? | (19,062,161) | ? | (19,776,266) | ? | (325,384,823) |
| Other decreases | (94,115,518) | ? | (233,187,518) | ? | - | ? | (327,303,036) |
| Translation differences | 1,064,852 | ? | 16,368,778 | ? | 196,506 | ? | 17,630,136 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Balance at the end of the year | 39,066,346,904 | ? | 164,514,903,439 | ? | 5,055,062,392 | ? | 208,636,312,735 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Less: Accumulated depreciation | ? | ? | ? | ? | ? | ? | ? |
| Balance at the beginning of the year | 4,287,202,025 | ? | 58,402,866,713 | ? | 1,461,718,975 | ? | 64,151,787,713 |
| Charge during the year | 1,005,246,569 | ? | 16,553,957,538 | ? | 864,384,030 | ? | 18,423,588,137 |
| Disposals or written-off during the year | (4,695,117) | ? | (307,561,970) | ? | (36,873,915) | ? | (349,131,002) |
| Transfer to assets held for sale during the year | (164,215,666) | ? | (5,640,910) | ? | (10,847,513) | ? | (180,704,089) |
| Translation differences | 517,901 | ? | 12,159,063 | ? | 157,104 | ? | 12,834,068 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Balance at the end of the year | 5,124,055,712 | ? | 74,655,780,434 | ? | 2,278,538,681 | ? | 82,058,374,827 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Less: Provision for impairment | ? | ? | ? | ? | ? | ? | ? |
| Balance at the beginning of the year | 1,085,094 | ? | 644,638,064 | ? | 7,139,184 | ? | 652,862,342 |
| Charge during the year | - | ? | 160,307,953 | ? | 37,081 | ? | 160,345,034 |
| Disposals or written-off during the year | (11,713) | ? | (20,109,323) | ? | (1,390,370) | ? | (21,511,406) |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Balance at the end of the year | 1,073,381 | ? | 784,836,694 | ? | 5,785,895 | ? | 791,695,970 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Carrying amount | ? | ? | ? | ? | ? | ? | ? |
| At the end of the year | 33,941,217,811 | ? | 89,074,286,311 | ? | 2,770,737,816 | ? | 125,786,241,938 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| At the beginning of the year | 32,461,407,170 | ? | 93,911,656,666 | ? | 1,784,667,159 | ? | 128,157,730,995 |
(2) Fixed assets acquired under finance leases
| ? | 2019 | ? | 2018 | ||||||||||||
| Item | Original book value | ? | Accumulated depreciation | ? | Provision for impairment | ? | Carrying amount | ? | Original book value | ? | Accumulated depreciation | ? | Provision for impairment | ? | Carrying amount |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Plant and buildings | 11,291,665 | ? | 4,610,694 | ? | - | ? | 6,680,971 | ? | 11,291,665 | ? | 4,357,005 | ? | -? | ? | 6,934,660 |
| Machinery and equipment | 111,358,145 | ? | 10,816,754 | ? | - | ? | 100,541,391 | ? | 111,358,145 | ? | 4,815,787 | ? | - | ? | 106,542,358 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 122,649,810 | ? | 15,427,448 | ? | - | ? | 107,222,362 | ? | 122,649,810 | ? | 9,172,792 | ? | - | ? | 113,477,018 |
The Group’s fixed assets under finance leases represented a youth apartment under finance lease for the Company, which isused for the purposes of the staff dormitory and machinery and equipment under finance leases.
(3) Fixed assets pending certificates of ownership
On 31 December 2019, fixed assets pending certificates of ownership totalled RMB 8,208,580,798 and certificates ofownership is still being processed.
15、 Construction in progress
(1) Analysis of the Group’s construction in progress is as follows:
??
| ? | 2019 | ? | 2018 | ||||||||
| Item | Book value | ? | Provision for impairment | ? | Carrying amount | ? | Book value | ? | Provision for impairment | ? | Carrying amount |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| The 6th generation AMOLED project - Mianyang | 34,753,609,842 | ? | - | ? | 34,753,609,842 | ? | 23,065,639,272 | ? | - | ? | 23,065,639,272 |
| The 6th generation LTPS / AMOLED project - Chengdu | 19,490,899,526 | ? | - | ? | 19,490,899,526 | ? | 15,759,483,392 | ? | - | ? | 15,759,483,392 |
| The 10.5th generation TFT-LCD project - Hefei | 622,207,613 | ? | - | ? | 622,207,613 | ? | 5,599,769,733 | ? | - | ? | 5,599,769,733 |
| The 10.5th generation TFT-LCD project - Wuhan | 24,749,508,699 | ? | - | ? | 24,749,508,699 | ? | 5,226,487,285 | ? | - | ? | 5,226,487,285 |
| Others | 7,760,556,847 | ? | - | ? | 7,760,556,847 | ? | 6,771,975,205 | ? | - | ? | 6,771,975,205 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 87,376,782,527 | ? | - | ? | 87,376,782,527 | ? | 56,423,354,887 | ? | - | ? | 56,423,354,887 |
(2) Movements of major construction projects in progress during the year
| Item | Budget | ? | Balance at the beginning of the year | ? | Increase during the year | ? | Transfers to fixed assets | ? | Transfer to intangible assets | ? | Balance at the end of the year | ? | Percentage of actual cost to budget (%) | ? | Accumulated capitalised interest at the end of the year | ? | Interest capitalised in 2019 | ? | Interest rate for capitalisation in 2019 (%) | ? | Sources of funding |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| The 6th generation AMOLED project - Mianyang | 44,500,000,000 | ? | 23,065,639,272 | ? | 11,849,171,781 | ? | (161,201,211) | ? | - | ? | 34,753,609,842 | ? | 78.90% | ? | 613,132,029 | ? | 556,855,158 | ? | 4.51% | ? | Self-raised funds and borrowings |
| The 6th generation LTPS / AMOLED project - Chengdu | 44,800,000,000 | ? | 15,759,483,392 | ? | 5,534,324,202 | ? | (1,800,721,546) | ? | (2,186,522) | ? | 19,490,899,526 | ? | 86.07% | ? | 837,160,130 | ? | 454,186,034 | ? | 4.84% | ? | Self-raised funds and borrowings |
| The 10.5th generation TFT-LCD project - Hefei | 42,937,000,000 | ? | 5,599,769,733 | ? | 1,098,716,081 | ? | (6,076,083,329) | ? | (194,872) | ? | 622,207,613 | ? | 86.17% | ? | - | ? | - | ? | - | ? | Self-raised funds and borrowings |
| The 10.5th generation TFT-LCD project - Wuhan | 44,000,000,000 | ? | 5,226,487,285 | ? | 20,161,031,012 | ? | (638,009,598) | ? | - | ? | 24,749,508,699 | ? | 58.63% | ? | 93,594,026 | ? | 93,594,026 | ? | 3.73% | ? | Self-raised funds and borrowings |
16 Intangible assets
(1) Intangible assets
| ? | Land use rights | ? | Patent and proprietary technology | ? | Computer software | Others | Total | ||
| ? | ? | ? | ? | ? | ? | ? | |||
| Original book value | ? | ? | ? | ? | ? | ? | |||
| Balance at the beginning of the year | 2,685,702,901 | ? | 3,290,629,308 | 902,371,299 | 1,226,628,617 | 8,105,332,125 | |||
| Additions during the year | ? | ? | ? | ? | ? | ? | |||
| - Purchase | 1,443,397,986 | ? | 428,922,849 | 25,771,138 | 79,110,712 | 1,977,202,685 | |||
| - Transfer from construction in progress | - | ? | - | 115,360,282 | - | 115,360,282 | |||
| Disposals during the year | - | ? | - | (892,159) | - | (892,159) | |||
| Transfers to assets held for sale during the year | (37,857,218) | - | - | - | (37,857,218) | ||||
| Other decreases | - | ? | (997,041) | - | - | (997,041) | |||
| ? | ? | ? | ? | ? | ? | ? | |||
| Balance at the end of the year | 4,091,243,669 | ? | 3,718,555,116 | 1,042,610,560 | 1,305,739,329 | 10,158,148,674 | |||
| ? | ? | ? | ? | ? | ? | ? | |||
| Less: Accumulated amortisation | ? | ? | ? | ? | ? | ? | |||
| Balance at the beginning of the year | 228,473,302 | ? | 1,285,634,672 | 535,554,303 | 117,990,454 | 2,167,652,731 | |||
| Charge during the year | 83,860,043 | ? | 316,063,422 | 117,440,369 | 66,138,252 | 583,502,086 | |||
| Disposals during the year | - | ? | - | (795,840) | - | (795,840) | |||
| Transfers to assets held for sale during the year | (8,627,132) | ? | - | - | - | (8,627,132) | |||
| ? | ? | ? | ? | ? | ? | ? | |||
| Balance at the end of the year | 303,706,213 | ? | 1,601,698,094 | 652,198,832 | 184,128,706 | 2,741,731,845 | |||
| ? | ? | ? | ? | ? | ? | ? | |||
| ? | ? | ? | ? | ? | ? | ? | |||
| Carrying amount | ? | ? | ? | ? | ? | ? | ? | ||
| At the end of the year | 3,787,537,456 | ? | 2,116,857,022 | ? | 390,411,728 | 1,121,610,623 | 7,416,416,829 | ||
| ? | ? | ? | ? | ? | ? | ? | ? | ||
| At the beginning of the year | 2,457,229,599 | ? | 2,004,994,636 | ? | 366,816,996 | ? | 1,108,638,163 | 5,937,679,394 |
(2) Land use rights pending certificates of ownership
As at 31 December 2019, the company has land use rights pending certificates of ownership RMB 614,842,056 in total.
17 Goodwill
(1) Changes in goodwill
| Name of investee | Balance at the beginning of the year | ? | Increase during the year | ? | Balance at the end of the year | |
| ? | ? | ? | ? | ? | ? | ? |
| Book value | ? | ? | ? | ? | ? | ? |
| Beijing Yinghe Century Co., Ltd. | ? | 42,940,434 | ? | - | ? | 42,940,434 |
| K-Tronics (Suzhou) Technology Co., Ltd. | ? | 8,562,464 | ? | - | ? | 8,562,464 |
| Beijing BOE Optoelectronics Technology Co., Ltd. | ? | 4,423,876 | ? | - | ? | 4,423,876 |
| BOE Healthcare Investment & Management Co., Ltd. | ? | 146,460,790 | ? | - | ? | 146,460,790 |
| SES Imagotag SA Co.Ltd. | 706,406,821 | ? | - | ? | 706,406,821 | |
| ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | 908,794,385 | ? | - | ? | 908,794,385 |
| ? | ? | ? | ? | ? | ? | ? |
| Provision for impairment | ? | 4,423,876 | ? | 196,766,653 | ? | 201,190,529 |
| ? | ? | ? | ? | ? | ? | ? |
| Carrying amount | ? | 904,370,509 | ? | (196,766,653) | ? | 707,603,856 |
(2) Provision for impairment of goodwill
The recoverable amount of Beijing Yinghe Century Co., Ltd. (“Yinghe Century”), Suzhou K-Tronics, BOE HealthcareInvestment & Management Co., Ltd. (“Health Investment”) and SES Imagotag SA Co.Ltd. is determined based on thepresent value of expected future cash flows. When predicting the present value of cash flow, the cash flow in the next 5 yearsis determined based on the financial budget approved by the management. The cash flow in the years after the 5-yearfinancial budget will remain stable. The pre-tax discount rate is determined with reference to comparable companies andrelated capital structures.
On 31 December 2019, as the present value of SES Imagotag SA Co.Ltd.’s future cash flow is lower than the carryingamount of the asset groups, the Group made impairment provision of RMB 196,766,653 for goodwill in 2019.
18 Long-term deferred expenses
| ? | Balance at the beginning of the year | ? | Increase during the year | ? | Decrease during the year | ? | Balance at the end of the year |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Payment for public facilities construction and use | 98,072,789 | ? | - | ? | (15,370,223) | ? | 82,702,566 |
| Cost of operating lease assets improvement | 20,351,453 | ? | 26,109,654 | ? | (18,394,852) | ? | 28,066,255 |
| Others | 242,216,611 | ? | 90,153,351 | ? | (97,714,374) | ? | 234,655,588 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 360,640,853 | ? | 116,263,005 | ? | (131,479,449) | ? | 345,424,409 |
19 Deferred tax assets/deferred tax liabilities
(1) Deferred tax assets and liabilities
??
| ? | 2019 | ? | 2018 | ||||
| Item | Deductible/ (taxable) temporary differences | ? | Deferred tax assets/(liabilities) | ? | Deductible/ (taxable) temporary differences | ? | Deferred tax assets/(liabilities) |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Deferred tax assets: | ? | ? | ? | ? | ? | ? | ? |
| Provision for impairment of assets | 131,848,265 | ? | 29,587,380 | ? | 391,727,136 | ? | 69,662,802 |
| Changes in fair value of other equity instruments | 135,444,338 | ? | 20,316,651 | ? | - | ? | - |
| Depreciation of fixed assets | 147,798,525 | ? | 25,764,520 | ? | 125,811,735 | ? | 22,699,045 |
| Assessed value added by investing real estate in subsidiaries | 136,556,956 | ? | 34,139,239 | ? | 142,110,808 | ? | 35,527,702 |
| Accumulated losses | 361,764,556 | ? | 111,182,956 | ? | 230,110,593 | ? | 67,447,589 |
| Advance payments received | - | ? | - | ? | 290,000,000 | ? | 43,500,000 |
| Others | 214,882,405 | ? | 40,237,079 | ? | 219,548,492 | ? | 42,572,983 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | 1,128,295,045 | ? | 261,227,825 | ? | 1,399,308,764 | ? | 281,410,121 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Amount offset | ? | ? | (13,074,064) | ? | ? | ? | (29,036,499) |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Balance after offsetting | ? | ? | 248,153,761 | ? | ? | ? | 252,373,622 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Deferred tax liabilities: | ? | ? | ? | ? | ? | ? | ? |
| Revaluation due to business combinations involving entities not under common control | (2,594,143,798) | ? | (772,597,483) | ? | (2,777,250,385) | ? | (835,036,150) |
| Depreciation of fixed assets | (4,178,779,443) | ? | (643,417,497) | ? | (3,248,856,623) | ? | (517,769,740) |
| Changes in fair value of available-for-sale financial assets | - | ? | - | ? | (53,218,430) | ? | (8,058,902) |
| Long-term equity investments | (120,141,687) | ? | (18,021,253) | ? | (360,863,027) | ? | (54,129,454) |
| Interest on debentures | - | ? | - | ? | (71,525,943) | ? | (10,728,891) |
| Others | (161,910,113) | ? | (30,863,188) | ? | (223,118,577) | ? | (22,686,907) |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | (7,054,975,041) | ? | (1,464,899,421) | ? | (6,734,832,985) | ? | (1,448,410,044) |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Amount offset | ? | ? | 13,074,064 | ? | ? | ? | 29,036,499 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Balance after offsetting | ? | ? | (1,451,825,357) | ? | ? | ? | (1,419,373,545) |
(2) Details of unrecognised deferred tax assets
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Deductible temporary differences | ? | 9,708,406,691 | ? | 9,073,884,112 |
| Deductible losses | ? | 15,354,248,296 | ? | 6,752,930,780 |
| ? | ? | ? | ? | ? |
| Total | ? | 25,062,654,987 | ? | 15,826,814,892 |
As at 31 December 2019, the deductible temporary differences are mainly provisions for the subsidiaries’ impairment ofassets. Due to the uncertainty that there will be sufficient taxable income to cover these deductible differences in futureperiods, the deferred income tax assets were not recognized in consideration of prudence.
(3) Expiration of deductible tax losses for unrecognized deferred tax assets:
?Year
| Year | Note | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| 2019 | ? | -? | ? | 38,076,038 |
| 2020 | ? | 58,901,625 | ? | 59,149,932 |
| 2021 | ? | 80,449,618 | ? | 52,190,671 |
| 2022 | ? | 435,146,446 | ? | 528,642,251 |
| 2023 | ? | 605,118,016 | ? | 669,677,506 |
| 2024 | ? | 1,028,882,595 | ? | 125,649,689 |
| 2025 | ? | 494,894,618 | ? | 512,243,532 |
| 2026 | ? | 227,711,720 | ? | 233,283,462 |
| 2027 | ? | 133,673,301 | ? | 133,672,001 |
| 2028 | ? | 4,215,818,107 | ? | 4,296,683,816 |
| 2029 | ? | 7,359,029,807 | ? | -? |
| Others | (a) | 714,622,443 | ? | 103,661,882 |
| ? | ? | ? | ? | ? |
| Total | ? | 15,354,248,296 | ? | 6,752,930,780 |
(a) According to the applicable local tax laws, Loss of some overseas subsidiaries of the
Group has indefinite carry-over period to deduct the future taxable income.
20 Other non-current assets
| ? | Note? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Deferred VAT for imported equipment | ? | 5,027,130,119 | ? | 3,187,164,914 |
| VAT on tax credits | ? | 2,482,410,097 | ? | 1,488,605,413 |
| Prepayments for fixed assets | ? | 1,159,943,991 | ? | 2,896,176,554 |
| Gains from transfer of exploration right | (a)? | 512,802,600 | ? | - |
| Prepayments for construction | ? | 43,162,425 | ? | 155,970,966 |
| Others | ? | 266,132,327 | ? | 165,084,206 |
| ? | ? | ? | ? | ? |
| Total | ? | 9,491,581,559 | ? | 7,893,002,053 |
(a)? On 31 December 2019, gains from transfer of exploration right are amount for the transfer of exploration paid by theGroup through Erdos BOE Energy Investment Co., Ltd. to Ministry of Natural Resources of Inner Mongolia.
21 Short-term loans
??
| ? | 2019 | ||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/RMB equivalents | ? | Credited/ collateralised guaranteed/ pledged |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Bank loans | ? | ? | ? | ? | ? | ? | ? |
| - RMB | ? | ? | ? | ? | 1,706,000,000 | ? | Pledged |
| - RMB | ? | ? | ? | ? | 3,570,500,000 | ? | Credited |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | ? | ? | ? | 5,276,500,000 | ? | ? |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Foreign currency bank loans | ? | ? | ? | ? | ? | ? | ? |
| - USD | 75,000,000 | ? | 6.9762 | ? | 523,215,000 | ? | Pledged |
| - USD | 74,983,524 | ? | 6.9762 | ? | 523,100,057 | ? | Credited |
| - JPY | 685,049,220 | ? | 0.0641 | ? | 43,902,064 | ? | Credited |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | ? | ? | ? | 1,090,217,121 | ? | ? |
| ? | ? | ? | ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | ? | 6,366,717,121 | ? | ? |
| ? | 2018 | ||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/RMB equivalents | ? | Credited/ collateralised guaranteed/ pledged |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Bank loans | ? | ? | ? | ? | ? | ? | ? |
| - RMB | ? | ? | ? | ? | 110,033,961 | ? | Pledged |
| - RMB | ? | ? | ? | ? | 1,399,800,000 | ? | Credited |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | ? | ? | ? | 1,509,833,961 | ? | ? |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Foreign currency bank loans | ? | ? | ? | ? | ? | ? | ? |
| - USD | 314,573,510 | ? | 6.8632 | ? | 2,158,980,914 | ? | Pledged |
| - USD | 47,369,984 | ? | 6.8632 | ? | 325,109,671 | ? | Collateralised |
| - USD | 139,129,343 | ? | 6.8632 | ? | 954,872,507 | ? | Credited |
| - JPY | 313,000,000 | ? | 0.0619 | ? | 19,370,631 | ? | Collateralised |
| - JPY | 7,784,950,000 | ? | 0.0619 | ? | 481,787,201 | ? | Credited |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | ? | ? | ? | 3,940,120,924 | ? | ? |
| ? | |||||||
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | ? | 5,449,954,885 | ? | ? |
The interest rate of short-term loans for the Group ranged from 0.40% to 4.35% in 2019 (2018: 1.28% to 4.95%).
As at 31 December 2019, no short-term loan was past due (2018: nil).
22 Bills payable
?
?
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Bank acceptance bills | ? | 1,812,309,507 | ? | 326,575,254 |
| Commercial acceptance bills | ? | 216,608,473 | ? | 264,534,018 |
| ? | ? | ? | ? | ? |
| Total | ? | 2,028,917,980 | ? | 591,109,272 |
There is no due but unpaid bill payable at the end of the year. The above bills are all due within one year.
23 Accounts payable
(1) The Group’s accounts payable by category are as follows:
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Payables to related parties | ? | 77,847,042 | ? | 30,361,810 |
| Payables to third parties | ? | 21,105,720,511 | ? | 22,183,594,806 |
| ? | ? | ? | ? | ? |
| Total | ? | 21,183,567,553 | ? | 22,213,956,616 |
(2) The Group’s accounts payable by currency are as follows:
??
| ? | 2019 | ? | 2018 | ||||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents | ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| - RMB | ? | ? | ? | ? | 14,353,247,507 | ? | ? | ? | ? | ? | 14,305,998,594 |
| - USD | 869,901,566 | ? | 6.9762 | ? | 6,068,607,305 | ? | 959,572,576 | ? | 6.8632 | ? | 6,585,738,505 |
| - JPY | 10,667,212,793 | ? | 0.0641 | ? | 683,768,340 | ? | 13,279,275,766 | ? | 0.0619 | ? | 821,987,170 |
| - Other foreign currencies | ? | ? | ? | ? | 77,944,401 | ? | ? | ? | ? | ? | 500,232,347 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | ? | 21,183,567,553 | ? | ? | ? | ? | ? | 22,213,956,616 |
As at 31 December 2019, the Group had no individually significant accounts payable ageing more than one year.
24 Advance payments received
?
Item
| Item | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Advances from related parties | ? | 60,990 | ? | 1,111 |
| Advances from third parties | ? | 1,260,671,795 | ? | 1,218,933,632 |
| ? | ? | ? | ? | ? |
| Total | ? | 1,260,732,785 | ? | 1,218,934,743 |
As at 31 December 2019, the Group’s significant advance payments received with ageing of more than one year were RMB122,565,830, which were mainly advances for research and development.
25 Employee benefits payable
(1) Employee benefits payable:
| ? | Note | Balance at 1 January 2019 | ? | Increase during the year | ? | decrease during the year | ? | Balance at 31 December 2019 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Short-term employee benefits | (2) | 2,175,807,665 | ? | 11,808,187,563 | ? | (11,666,042,336) | ? | 2,317,952,892 |
| Post-employment benefits | ? | ? | ? | ? | ? | ? | ? | ? |
| - defined contribution plans | (3) | 34,353,845 | ? | 892,704,459 | ? | (896,248,589) | ? | 30,809,715 |
| Termination benefits | ? | 14,769,661 | ? | 21,224,469 | ? | (11,011,283) | ? | 24,982,847 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 2,224,931,171 | ? | 12,722,116,491 | ? | (12,573,302,208) | ? | 2,373,745,454 |
?
?
| ? | Note | Balance at 1 January 2018 | ? | Increase during the year | ? | decrease during the year | ? | Balance at 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Short-term employee benefits | (2) | 2,167,235,414 | ? | 10,681,611,152 | ? | (10,673,038,901) | ? | 2,175,807,665 |
| Post-employment benefits | ? | ? | ? | ? | ? | ? | ? | ? |
| - defined contribution plans | (3) | 34,854,644 | ? | 860,558,928 | ? | (861,059,727) | ? | 34,353,845 |
| Termination benefits | ? | 14,976,886 | ? | 6,091,402 | ? | (6,298,627) | ? | 14,769,661 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 2,217,066,944 | ? | 11,548,261,482 | ? | (11,540,397,255) | ? | 2,224,931,171 |
(2) Short-term employee benefits
?
?
| ? | Balance at 1 January 2019 | ? | Increase during the year | ? | decrease during the year | ? | Balance at 31 December 2019 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Salaries, bonuses, allowances | 1,817,946,511 | ? | 9,760,123,875 | ? | (9,693,967,582) | ? | 1,884,102,804 |
| Staff welfare | - | ? | 726,894,238 | ? | (726,894,238) | ? | - |
| Social insurance | 31,310,324 | ? | 506,406,607 | ? | (505,393,082) | ? | 32,323,849 |
| Medical insurance | 27,150,184 | ? | 458,152,049 | ? | (456,765,159) | ? | 28,537,074 |
| Work-related injury insurance | 2,048,914 | ? | 24,547,049 | ? | (25,003,774) | ? | 1,592,189 |
| Maternity insurance | 2,111,226 | ? | 23,707,509 | ? | (23,624,149) | ? | 2,194,586 |
| Housing fund | 22,081,660 | ? | 534,751,562 | ? | (529,329,478) | ? | 27,503,744 |
| Labour union fee, staff and workers’ education fee | 274,477,650 | ? | 258,158,151 | ? | (187,489,314) | ? | 345,146,487 |
| Staff bonus and welfare fund | 7,282,591 | ? | - | ? | - | ? | 7,282,591 |
| Other short-term employee benefits | 22,708,929 | ? | 21,853,130 | ? | (22,968,642) | ? | 21,593,417 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 2,175,807,665 | ? | 11,808,187,563 | ? | (11,666,042,336) | ? | 2,317,952,892 |
?
?
| ? | Balance at 1 January 2018 | ? | Increase during the year | ? | decrease during the year | ? | Balance at 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Salaries, bonuses, allowances | 1,840,923,550 | ? | 8,737,680,189 | ? | (8,760,657,228) | ? | 1,817,946,511 |
| Staff welfare | - | ? | 776,550,030 | ? | (776,550,030) | ? | - |
| Social insurance | 33,561,796 | ? | 436,106,436 | ? | (438,357,908) | ? | 31,310,324 |
| Medical insurance | 30,110,821 | ? | 384,231,011 | ? | (387,191,648) | ? | 27,150,184 |
| Work-related injury insurance | 1,419,661 | ? | 31,115,109 | ? | (30,485,856) | ? | 2,048,914 |
| Maternity insurance | 2,031,314 | ? | 20,760,316 | ? | (20,680,404) | ? | 2,111,226 |
| Housing fund | 17,201,305 | ? | 430,417,142 | ? | (425,536,787) | ? | 22,081,660 |
| Labour union fee, staff and workers’ education fee | 246,372,990 | ? | 242,263,166 | ? | (214,158,506) | ? | 274,477,650 |
| Staff bonus and welfare fund | 7,282,591 | ? | - | ? | - | ? | 7,282,591 |
| Other short-term employee benefits | 21,893,182 | ? | 58,594,189 | ? | (57,778,442) | ? | 22,708,929 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 2,167,235,414 | ? | 10,681,611,152 | ? | (10,673,038,901) | ? | 2,175,807,665 |
(3) Post-employment benefits - defined contribution plans
| ? | Balance at 1 January 2019 | ? | Increase during the year | ? | decrease during the year | ? | Balance at 31 December 2019 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Basic pension insurance | 29,206,273 | ? | 835,731,675 | ? | (838,665,990) | ? | 26,271,958 |
| Unemployment insurance | 964,893 | ? | 30,896,288 | ? | (30,789,104) | ? | 1,072,077 |
| Annuity | 4,182,679 | ? | 26,076,496 | ? | (26,793,495) | ? | 3,465,680 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 34,353,845 | ? | 892,704,459 | ? | (896,248,589) | ? | 30,809,715 |
?
?
| ? | Balance at 1 January 2018 | ? | Increase during the year | ? | decrease during the year | ? | Balance at 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Basic pension insurance | 28,831,475 | ? | 815,071,236 | ? | (814,696,438) | ? | 29,206,273 |
| Unemployment insurance | 1,155,250 | ? | 25,252,494 | ? | (25,442,851) | ? | 964,893 |
| Annuity | 4,867,919 | ? | 20,235,198 | ? | (20,920,438) | ? | 4,182,679 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 34,854,644 | ? | 860,558,928 | ? | (861,059,727) | ? | 34,353,845 |
26 Taxes payable
?
?
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Value-added tax | ? | 104,968,721 | ? | 112,292,699 |
| Corporate income tax | ? | 225,781,442 | ? | 387,053,187 |
| Individual income tax | ? | 46,299,098 | ? | 39,659,862 |
| City maintenance and construction tax | ? | 159,162,466 | ? | 205,222,860 |
| Education surcharges and local education surcharges | ? | 114,515,524 | ? | 148,544,558 |
| Others | ? | 80,268,878 | ? | 77,335,132 |
| ? | ? | ? | ? | ? |
| Total | ? | 730,996,129 | ? | 970,108,298 |
27 Other payables
??
| ? | Note | 31 December 2019 | ? | 31 December 2018 |
| ? | ? | ? | ? | ? |
| Interest payable | ? | 721,325,540 | ? | 1,016,761,921 |
| Dividends payable | 14,568,242 | ? | 23,648,778 | |
| Others | (1) | 23,834,695,828 | ? | 21,916,569,129 |
| ? | ? | ? | ? | ? |
| Total | ? | 24,570,589,610 | ? | 22,956,979,828 |
(1) Others
(a) The Group’s other payables by category are as follows:
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Projects and equipment | ? | 19,265,984,958 | ? | 18,042,357,713 |
| Deferred VAT for imported equipment | ? | 2,277,269,457 | ? | 1,400,000,000 |
| Accrued water and electricity charges and freight | ? | 475,398,269 | ? | 606,071,394 |
| Deposits | ? | 565,971,653 | ? | 440,792,988 |
| External agency fee | ? | 95,525,591 | ? | 53,393,714 |
| Others | ? | 1,154,545,900 | ? | 1,373,953,320 |
| ? | ? | ? | ? | ? |
| Total | ? | 23,834,695,828 | ? | 21,916,569,129 |
The Group’s significant other payables aged over one year are payables of projects and equipment.
(b) The Group’s other payables by currency are as follows:
??
| ? | 2019 | ? | 2018 | ||||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents | ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| RMB | ? | ? | ? | ? | 14,900,017,469 | ? | ? | ? | ? | ? | 15,064,792,480 |
| USD | 939,445,424 | ? | 6.9762 | ? | 6,553,759,167 | ? | 724,117,103 | ? | 6.8632 | ? | 4,969,760,500 |
| JPY | 36,516,333,058 | ? | 0.0641 | ? | 2,340,696,949 | ? | 29,183,294,045 | ? | 0.0619 | ? | 1,806,445,901 |
| Other foreign currencies | ? | ? | ? | ? | 40,222,243 | ? | ? | ? | ? | ? | 75,570,248 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | ? | 23,834,695,828 | ? | ? | ? | ? | ? | 21,916,569,129 |
28 Non-current liabilities due within one year
As at 31 December, the non-current liabilities due within one year for the Group were long-term loans and long-termpayables due within one year.
??
| ? | 2019 | ||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/RMB equivalents | ? | Credited /collateralised guaranteed /pledged |
| Bank loans | ? | ? | ? | ? | ? | ? | ? |
| - RMB | ? | ? | ? | ? | 3,548,760,000 | ? | Collateralised |
| - RMB | ? | ? | ? | ? | 5,660,431,884 | ? | Credited |
| - RMB | ? | ? | ? | ? | 27,187,500 | ? | Pledged |
| - USD | 1,192,400,000 | ? | 6.9762 | ? | 8,318,420,880 | ? | Collateralised |
| - EUR | 144,950,000 | ? | 7.8155 | ? | 1,132,856,725 | ? | Pledged |
| - EUR | 415,746 | ? | 7.8155 | ? | 3,249,263 | ? | Credited |
| Sub-total | 18,690,906,252 | ||||||
| Long-term payables | ? | ? | ? | ? | 158,374,767 | ? | Collateralised |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | ? | 18,849,281,019 | ? | ? |
| ? | 2018 | ||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/RMB equivalents | ? | Credited /collateralised guaranteed /pledged |
| Bank loans | ? | ? | ? | ? | ? | ? | ? |
| - RMB | ? | ? | ? | ? | 37,743,750 | ? | Pledged |
| - RMB | ? | ? | ? | ? | 1,702,180,000 | ? | Collateralised |
| - RMB | ? | ? | ? | ? | 990,000,000 | ? | Credited |
| - USD | 378,624,409 | ? | 6.8632 | ? | 2,598,575,044 | ? | Collateralised |
| - EUR | 3,694,262 | ? | 7.8473 | ? | 28,989,985 | ? | Credited |
| - EUR | 3,950,000 | ? | 7.8473 | ? | 30,996,836 | ? | Pledged |
| Sub-total | 5,388,485,615 | ||||||
| Long-term payables | ? | ? | ? | ? | 209,077,589 | ? | Collateralised |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | ? | 5,597,563,204 | ? | ? |
The interest rate of RMB long-term loans due within one year for the Group ranged from 0% to 5.64% in 2019 (2018: from0% to 5.88%).
29 Other current liabilities
The other current liabilities of the Group were warranty provision. The warranty provision mainly relates to the expectedafter-sales repair warranty to the customers. The provision is estimated by the Management, based on historical claimexperience and current actual sales outcomes.
30 Long-term loans
??
| ? | 2019 | ||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/RMB equivalents | ? | Credited /collateralised guaranteed /pledged |
| Bank loans | ? | ? | ? | ? | ? | ? | ? |
| - RMB | ? | ? | ? | ? | 590,727,344 | ? | Pledged |
| - RMB | ? | ? | ? | ? | 45,290,913,200 | ? | Collateralised |
| - RMB | ? | ? | ? | ? | 760,000,000 | ? | Guaranteed |
| - RMB | ? | ? | ? | ? | 38,988,142,361 | ? | Credited |
| - USD | 5,603,270,000 | ? | 6.9762 | ? | 39,089,532,174 | ? | Collateralised |
| - EUR | 3,721,275 | ? | 7.8155 | ? | 29,083,625 | ? | Credited |
| - EUR | 214,075,000 | ? | 7.8155 | ? | 1,673,103,163 | ? | Pledged |
| Less: Long-term loans due within one year | ? | ? | ? | ? | 18,690,906,252 | ? | ? |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | ? | 107,730,595,615 | ? | ? |
??
| ? | 2018 | ||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/RMB equivalents | ? | Credited /collateralised guaranteed /pledged |
| Bank loans | ? | ? | ? | ? | ? | ? | ? |
| - RMB | ? | ? | ? | ? | 640,180,000 | ? | Pledged |
| - RMB | ? | ? | ? | ? | 32,190,024,533 | ? | Collateralised |
| - RMB | ? | ? | ? | ? | 660,000,000 | ? | Guaranteed |
| - RMB | ? | ? | ? | ? | 27,697,000,000 | ? | Credited |
| - USD | 5,422,274,409 | ? | 6.8632 | ? | 37,214,153,724 | ? | Collateralised |
| - EUR | 7,172,652 | ? | 7.8473 | ? | 56,285,953 | ? | Credited |
| - EUR | 218,025,000 | ? | 7.8473 | ? | 1,710,919,269 | ? | Pledged |
| Less: Long-term loans due within one year | ? | ? | ? | ? | 5,388,485,615 | ? | ? |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | ? | 94,780,077,864 | ? | ? |
The interest rate of RMB long-term loans for the Group ranged from 0% to 5.64% in 2019 (2018: from 0% to 5.88%).
31 Debentures payable
(1) Debentures payable
?Item
| Item | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Debentures payable | 387,878,384 | ? | 10,288,666,233 |
| Less: Debentures payable due within one year | - | ? | - |
| ? | ? | ? | ? |
| Total | 387,878,384 | ? | 10,288,666,233 |
(2) The movements of debentures payable:
| Debenture | Par value | ? | Issuance date | ? | Maturity period | ? | Issuance amount | ? | Balance at the beginning of the year | ? | Increase during the year | ? | Interest at par value | ? | Amortisation of discounts or premium | ? | Translation differences | ? | Repayment during the period | ? | Balance at the end of the year |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| 16BOE01 | RMB10,000,000,000 | ? | 2016.03.21 | ? | 5 years | ? | RMB10,000,000,000 | ? | 9,976,533,425 | ? | - | ? | 68,547,672 | ? | 23,466,575 | ? | - | ? | (10,068,547,672) | ? | - |
| Euro PP | EUR10,000,000 | ? | 2016.12.29 | ? | 7 years | ? | EUR10,000,000 | ? | 78,470,471 | ? | - | ? | 2,704,800 | ? | 102,502 | ? | (898,623) | ? | (2,704,800) | ? | 77,674,350 |
| Euro PP | EUR30,000,000 | ? | 2017.03.29 | ? | 6 years | ? | EUR30,000,000 | ? | 233,662,337 | ? | - | ? | 8,114,400 | ? | 378,388 | ? | (895,244) | ? | (8,114,400) | ? | 233,145,481 |
| Euro PP | EUR10,000,000 | ? | 2019.07.22 | ? | 6 years | ? | EUR10,000,000 | ? | - | ? | 75,977,975 | ? | 1,560,633 | ? | 75,028 | ? | 1,005,550 | ? | (1,560,633) | ? | 77,058,553 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| 合计 | ? | ? | ? | ? | ? | ? | ? | ? | 10,288,666,233 | ? | 75,977,975 | ? | 80,927,505 | ? | 24,022,493 | ? | (788,317) | ? | (10,080,927,505) | ? | 387,878,384 |
From 21 March 2016 to 22 March 2016, with the Approval document No. 469 [2016] of CSRC, the Group successfully issued a corporate bond of RMB 10 billion to qualified investors viaShenzhen Stock Exchange. The full name of the bond was Corporate Bond Issued Publicly by BOE Technology Group Co., Ltd. to Qualified Investors in 2016 (the First Phase), which referredto as 16BOE01. The total amount of the bond in the current period is RMB 10 billion issued at a par value of RMB 100, with a maturity of 5 years from 21 March 2016 to 21 March 2021.Interest starts to accrue on 21 March 2016 and the interest payments are made annually. The company will pay out the last interest payment with the principle amount of the bond when itbecomes mature. The coupon rate is 3.15% which is fixed in the first 3 years, after which the company has a right to raise the rate and so are the investors to sell back the bond to the company.On 30 January 2019, the company has decided that the coupon rate remains unchanged and the investors may exercise the put option considering the market environment at the time. A numberof 96,705,976 bonds were sold back to the company at a total value of RMB 9,975,221,424.40 with interests included. In April 2019, the remaining 3,294,024 bonds were honoured in advancewhose amount is RMB 329,698,071.60 with interests included. The bond has been terminated on the trading system of Shenzhen Stock Exchange on 3 April 2019.
SES issued two private placement bonds with a total face value of 40 million euro to institutional investors on 29 December 2016 and 29 March 2017. The coupon rate of the bonds is 3.5% andthe maturity date is 29 December 2023. Interest payments are made annually and the principle amount will be paid when the bonds become due.
SES issued a private placement bond with a total face value of 10 million euro to institutional investors on 22 July 2019. The coupon rate of the bond is 4.55% and the maturity date is 22 July2025. Interest payments are made annually, and the principle amount will be paid when the bond become due.
32 Long-term payables
| Item | Note | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Obligations under finance leases | (1) | 1,142,895,591 | ? | 1,625,169,828 |
| Less: Obligations under finance leases due within one year | ? | 158,374,767 | ? | 209,077,589 |
| ? | ? | ? | ? | ? |
| Total | ? | 984,520,824 | ? | 1,416,092,239 |
(1) Details of obligations under finance leases included in long-term payables
As at 31 December, the total future minimum lease payments under finance leases were as follows:
?Minimum lease payments
| Minimum lease payments | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Within 1 year (inclusive) | 240,790,871 | ? | 310,816,661 |
| After 1 year but within 2 years (inclusive) | 211,473,668 | ? | 362,741,342 |
| After 2 years but within 3 years (inclusive) | 198,335,280 | ? | 345,762,549 |
| Over 3 years | 866,709,073 | ? | 1,096,208,635 |
| ? | ? | ? | ? |
| Sub-total | 1,517,308,892 | ? | 2,115,529,187 |
| ? | ? | ? | ? |
| Less: Unrecognised finance charges | 374,413,301 | ? | 490,359,359 |
| ? | ? | ? | ? |
| Total | 1,142,895,591 | ? | 1,625,169,828 |
The Group leased back some of its sold machinery equipment and constructions in progress. The sales of the assets arerelated to the leases, and the Group basically can ensure to buy back the asset after lease term. Therefore, the Group adoptsthe accounting treatment of collateral loans.
33 Provisions
?Name of investee
| Name of investee | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Pending implementation of the agreement | 16,457,010 | ? | 16,457,010 |
In 2009, the Group ceased producing several products and stopped fulfilling the purchase contract related to production. Dueto the indemnity incurred accordingly, the Group accrued provisions according to reasonable estimation of loss.
34 Deferred income
| Item | Balance at the beginning of the year | ? | Government grants newly increased during the year | ? | Amount included in other income | ? | Other changes | ? | Balance at the end of the year |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Related to assets | 1,919,750,983 | ? | 615,717,141 | ? | (316,744,767) | ? | (259,201,083) | ? | 1,959,522,274 |
| Related to income | 267,807,550 | ? | 644,082,160 | ? | (665,011,418) | ? | (2,000,000) | ? | 244,878,292 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 2,187,558,533 | ? | 1,259,799,301 | ? | (981,756,185) | ? | (261,201,083) | ? | 2,204,400,566 |
35 Other non-current liabilities
?
Item
| Item | Note | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Convertible debts | (1) | - | ? | 4,175,131,508 |
| Contribution of minority shareholders with redemption provisions | (2) | 3,699,127,228 | ? | 3,700,737,154 |
| Deferred VAT for imported equipment | ? | 4,409,269,015 | ? | 3,187,164,914 |
| Others | ? | 92,146,169 | ? | 271,839,746 |
| ? | ? | ? | ? | ? |
| Total | ? | 8,200,542,412 | ? | 11,334,873,322 |
(1) Convertible debts
Convertible debts mainly result from the Company’s capital commitment and conversion obligations to the minorityshareholders of Hefei Xinsheng, the Company has repurchased relevant equities in cash in 2019.
(2) Contribution of minority shareholders with redemption provisions
The Contribution of minority shareholders with redemption provisions is mainly due to the redemption obligation of thecompany to the minority shareholders of Fuzhou BOE and BOE Smart Retail (Hong Kong) Co., Ltd. The companyrecognizes the above minority shareholder contribution as a financial liability which is subsequently measured at the cost ofamortization. The book balance on 31 December 2019 is RMB 3,699,127,228.
36 Share capital
??
| ? | Balance at The beginning of the year | ? | Balance at the end of the year |
| ? | ? | ? | ? |
| Total shares | 34,798,398,763 | ? | 34,798,398,763 |
37 Other equity instruments
(1) Financial instruments (including perpetual bonds) that remain outstanding at the end of the year are set out as follows:
| Outstanding financial instruments | Issuance date | ? | Accounting classification | ? | Dividend rate | ? | Issuance price | ? | Quantity | ? | Amount | ? | Maturity date or renewal status | ? | Conditions for conversion | ? | Conversion status | |
| 19BOEY1 | 29 October 2019 | ? | Equity instrument | ? | 4.0% | ? | RMB 100/bond | ? | 80 million | ? | RMB 8 billion | ? | 3+N years | ? | N/A | ? | N/A |
(2) Major terms
On 29 October 2019, with the approval document No. 1801 [2019] of CSRC, the Company successfully issued a renewablecorporate bond to qualified investors. The full name of the bond was Renewable Corporate Bond Publicly Issued by BOETechnology Group Co., Ltd. (to qualified investors) in 2019 (the First Phase), which referred to as 19BOEY1.
The current bond has a base term of 3 years and takes every three interest-bearing years as a period. The Company is entitledto choose to extend the maturity by 1 period at the end of each period, or choose to fully redeem the bond at the end of thematurity. The nominal interest rate of the bond is fixed during the first period, and then is reset once every period. Thenominal interest rate in the first period is the initial benchmark interest rate plus the initial spread, and the nominal interestrate in the subsequent period is adjusted to the current benchmark interest rate plus the initial spread and 300 basis points.Therefore, when the Company exercises the renewal option, the nominal interest rate will significantly increase, and thecorresponding nominal interest will also increase sharply. The bond has an issuer’s right to defer the payment of interest.Unless a mandatory interest payment event occurs (including distributions to ordinary shareholders and decrease of registeredcapital). At each interest payment date of the bond, the Company may choose at its discretion whether to defer the paymentof the current interest as well as all the deferred interests and the yields under this term until the next interest payment datewithout being subjected to any limit on the number of interest deferring attempts.
The actual issuance of the bonds for the current period amounted to RMB 8,000,000,000, and the Company considers that therenewable corporate bonds do not meet the definition of financial liabilities, and therefore will charge the total amount of theissue to other equity instruments at RMB 7,957,047,264 after deducting underwriting fees and other transaction costs.
(3) Movement of the financial instruments (including perpetual bonds) that remain outstanding at the end of the year:
| Outstanding financial instruments | At the beginning of the year | ? | Increase during the year | Accumulated interest | ? | At the end of the year | |||||||
| Quantity | ? | Carrying amount | ? | Quantity | ? | Carrying amount | Charge for the year | ? | Quantity | Carrying amount | |||
| 19BOEY1 | - | ? | - | ? | 80,000,000 | ? | 7,957,047,264 | 56,109,589 | ? | 80,000,000 | 8,013,156,853 | ||
(4) Relevant information of amounts attributable to holders of equity instruments
?
?
| ? | 2019 |
| Equity attributable to shareholders of the Company | 95,058,129,055 |
| - Equity attributable to ordinary shareholders of the Company | 87,044,972,202 |
| - Equity attributable to holders of the Company’s other equity instruments | 8,013,156,853 |
| Equity attributable to non-controlling shareholders | 45,999,567,919 |
| - Equity attributable to non-controlling ordinary shareholders | 45,999,567,919 |
| - Equity attributable to non-controlling shareholders of other equity instruments | - |
(5) Accrued interest on holders of other equity instruments
On 31 December 2019, as the above-mentioned issued renewable corporate bond is cumulative other equity instruments, theCompany accrued RMB 56,109,589 of interest on renewable corporate bonds from undistributed profits.
38 Capital reserve
?Item
| Item | ? | Share premiums | ? | Other capital reserves | ? | Total |
| ? | ? | ? | ? | ? | ? | ? |
| Balance at the beginning of the year | ? | 37,546,517,053 | ? | 666,583,543 | ? | 38,213,100,596 |
| Add: Change in shareholding ratio of subsidiaries | ? | - | ? | 123,068,274 | ? | 123,068,274 |
| Other movements in equity of investee | ? | - | ? | 26,721,099 | ? | 26,721,099 |
| Less: Other equity movements arising from the disposal of equities transferred from associates | ? | - | ? | 9,647,605 | ? | 9,647,605 |
| ? | ? | ? | ? | ? | ? | ? |
| Balance at the end of the year | ? | 37,546,517,053 | ? | 806,725,311 | ? | 38,353,242,364 |
39 Other comprehensive income
| ? | Balance at the end of the previous year attributable to shareholders of the Company | ? | Changes in accounting policies | ? | ? | ? | Movements during the year | ? | ? | ||||||||
| Item | ? | ? | Balance of other comprehensive income at the beginning of the year after adjustment | ? | Before-tax amount | ? | Less: Income tax expenses | ? | Net-of-tax amount attributable to the parent company | ? | Net-of-tax amount attributable to non-controlling interests | ? | Transfer of other comprehensive income to retained earnings | ? | Balance at the end of the year attributable to shareholders of the Company | ||
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Items that will not be reclassified to profit or loss | - | ? | (240,595,947) | ? | (240,595,947) | ? | 343,106,828 | ? | 12,864,994 | ? | 330,241,834 | ? | - | ? | 50,430,448 | ? | 140,076,335 |
| Including: Other comprehensive income recognised under equity method | - | ? | (58,383,948) | ? | (58,383,948) | ? | 366,930,596 | ? | - | ? | 366,930,596 | ? | - | ? | - | ? | 308,546,648 |
| Changes in fair value of investments in other equity instruments | - | ? | (182,211,999) | ? | (182,211,999) | ? | (23,823,768) | ? | 12,864,994 | ? | (36,688,762) | ? | - | ? | 50,430,448 | ? | (168,470,313) |
| Items that may be reclassified to profit or loss | (125,258,252) | ? | 73,997,231 | ? | (51,261,021) | ? | (101,796,181) | ? | ? | ? | (93,381,953) | ? | (8,414,228) | ? | - | ? | (144,642,974) |
| Including: Other comprehensive income recognised under equity method | (58,383,948) | ? | 58,383,948 | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - |
| Gains or losses arising from changes in fair value of available-for-sale financial assets | (25,305,733) | ? | 25,305,733 | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - |
| Fair value changes in wealth management products | 9,692,450 | ? | (9,692,450) | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - |
| Translation differences arising from translation of foreign currency financial statements | (51,261,021) | ? | - | ? | (51,261,021) | ? | (101,796,181) | ? | - | ? | (93,381,953) | ? | (8,414,228) | ? | - | ? | (144,642,974) |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | (125,258,252) | ? | (166,598,716) | ? | (291,856,968) | ? | 241,310,647 | ? | 12,864,994 | ? | 236,859,881 | ? | (8,414,228) | ? | 50,430,448 | ? | (4,566,639) |
40 Surplus reserve
| Item | Balance at the beginning of the year | ? | Increase during the year | ? | Decreases during the year | ? | Balance at the end of the year |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Statutory surplus reserve | 862,955,001 | ? | 368,556,446 | ? | (5,043,047) | ? | 1,226,468,400 |
| Discretionary surplus reserve | 289,671,309 | ? | - | ? | - | ? | 289,671,309 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 1,152,626,310 | ? | 368,556,446 | ? | (5,043,047) | ? | 1,516,139,709 |
| ? | |||||||
41 Retained earnings
| Item | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Retained earnings at the beginning of the year (before adjustment) | ? | 11,817,881,286 | ? | 10,385,659,084 |
| Add: Changes in accounting policies | ? | 159,238,247 | ? | - |
| Retained earnings at the beginning of the year (after adjustment) | ? | 11,977,119,533 | ? | 10,385,659,084 |
| Add: Net profits for the year attributable to shareholders of the Company | ? | 1,918,643,871 | ? | 3,435,127,975 |
| Less: Appropriation for statutory surplus reserve | ? | 368,556,446 | ? | 262,985,835 |
| Dividends to ordinary shares | ? | 1,043,951,963 | ? | 1,739,919,938 |
| Interest of holders of other equity instruments | 56,109,589 | - | ||
| Transfer of other comprehensive income to retained earnings | ? | 45,387,401 | ? | - |
| ? | ? | ? | ? | ? |
| Retained earnings at the end of the year | ? | 12,381,758,005 | ? | 11,817,881,286 |
According to the Annual Shareholders’ Meeting for 2018 held on 26 April 2019, the Company distributed cash dividends toall shareholders on 31 May 2019, with RMB 0.3 every 10 shares (2018: RMB 0.5) and a total dividend of RMB1,043,951,963 (2018: RMB 1,739,919,938) distributed.
As at 31 December 2019, the consolidated retained earnings attributable to the Company included an appropriation of RMB2,197,635,471 (2018: RMB 2,028,756,975) to surplus reserve made by the subsidiaries.
42 Operating income and operating costs
| ? | 2019 | ? | 2018 | ||||
| Item | Income | ? | Cost | ? | Income | ? | Cost |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Principal activities | 112,869,129,027 | ? | 96,547,463,221 | ? | 94,629,547,884 | ? | 75,771,556,938 |
| Other operating activities | 3,190,461,137 | ? | 1,898,806,075 | ? | 2,479,317,051 | ? | 1,534,667,350 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 116,059,590,164 | ? | 98,446,269,296 | ? | 97,108,864,935 | ? | 77,306,224,288 |
Details of operating income:
?
?
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Operating income from principal activities | ? | ? | ? | ? |
| - Sale of goods | ? | 112,869,129,027 | ? | 94,629,547,884 |
| Other operating income | ? | ? | ? | ? |
| - Sales of raw materials | ? | 1,049,219,352 | ? | 936,524,913 |
| - Rental income of investment properties | ? | 1,164,355,875 | ? | 1,023,141,383 |
| - Others | ? | 976,885,910 | ? | 519,650,755 |
| ? | ? | ? | ? | ? |
| Total | ? | 116,059,590,164 | ? | 97,108,864,935 |
Information on income, expenses and profit of principal activities has been included in Note XIII.
43 Taxes and surcharges
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Property tax | ? | 352,251,436 | ? | 311,354,873 |
| City maintenance and construction tax | ? | 190,993,833 | ? | 192,007,248 |
| Education surcharges and local education surcharges | ? | 136,854,543 | ? | 137,643,535 |
| Stamp duty | ? | 108,178,185 | ? | 84,381,357 |
| Land use tax | ? | 43,676,217 | ? | 28,005,681 |
| Others | ? | 29,146,391 | ? | 25,213,432 |
| ? | ? | ? | ? | ? |
| Total | ? | 861,100,605 | ? | 778,606,126 |
44 Selling and distribution expenses
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Warranty provisions | ? | 927,748,774 | ? | 1,068,015,463 |
| Staff cost | ? | 698,586,373 | ? | 582,456,239 |
| Logistics | ? | 589,504,713 | ? | 530,295,839 |
| Others | ? | 702,025,520 | ? | 710,289,428 |
| ? | ? | ? | ? | ? |
| Total | ? | 2,917,865,380 | ? | 2,891,056,969 |
45 General and administrative expenses
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Staff cost | ? | 2,456,007,113 | ? | 2,304,932,925 |
| Repair expense | ? | 1,221,489,432 | ? | 1,155,436,163 |
| Depreciation and amortisation | ? | 586,695,417 | ? | 445,659,627 |
| Others | ? | 950,756,065 | ? | 1,053,155,482 |
| ? | ? | ? | ? | ? |
| Total | ? | 5,214,948,027 | ? | 4,959,184,197 |
46 Research and development costs
?
?
| ? | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Staff cost | 2,764,095,983 | ? | 2,337,224,942 |
| Material expenses | 1,517,000,923 | ? | 888,449,869 |
| Depreciation and amortisation | 1,234,104,120 | ? | 662,379,702 |
| Others | 1,184,772,214 | ? | 1,151,872,922 |
| ? | ? | ? | ? |
| Total | 6,699,973,240 | ? | 5,039,927,435 |
47 Financial expenses
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Interest expenses from loans | ? | 3,651,979,758 | ? | 4,566,725,543 |
| Less: Borrowing costs capitalised | ? | 1,126,843,549 | ? | 1,300,993,229 |
| Interest income from bank deposits | ? | (840,190,118) | ? | (748,004,557) |
| Net exchange losses | ? | 226,570,667 | ? | 544,018,382 |
| Other financial expenses | ? | 82,633,500 | ? | 134,949,751 |
| ? | ? | ? | ? | ? |
| Total | ? | 1,994,150,258 | ? | 3,196,695,890 |
The interest rate per annum, at which the borrowing costs were capitalized by the Group, was 3.73% ~ 4.84% (2018: 3.88% ~
5.06% for the year).
48 Other income
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Government grants related to assets | ? | 316,744,767 | ? | 514,836,515 |
| Government grants related to income | ? | 2,287,022,704 | ? | 1,485,737,116 |
| Others | ? | 1,891,240 | ? | - |
| ? | ? | ? | ? | ? |
| Total | ? | 2,605,658,711 | ? | 2,000,573,631 |
The amount of government subsidies received by the Group in 2019 and directly included in other income was RMB1,622,011,286.
49 Investment income
??
| ? | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Income / (losses) from long-term equity investments accounted for using equity method | 200,020,686 | ? | (13,925,731) |
| Investment income / (losses) from disposal of long-term equity investments | 48,846,682 | ? | (3,948,640) |
| Investment income from holding available-for-sale financial assets | - | ? | 11,543,726 |
| Dividend income from investments in other equity instruments | 9,984,205 | ? | - |
| Including: Dividend income from investments in other equity instruments derecognised during the year | 471,354 | ? | - |
| Dividend income from investments in other equity instruments held at the balance sheet date | 9,512,851 | ? | - |
| Investment income from wealth management products on maturity | 83,769,118 | ? | 313,218,224 |
| ? | ? | ? | ? |
| Total | 342,620,691 | ? | 306,887,579 |
50 Gains from changes in fair value
?Item
| Item | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Financial assets held for trading | 66,473,077 | ? | - |
| Gains from changes in fair value of derivative financial liabilities | 71,000,000 | ? | 2,061,153 |
| ? | ? | ? | ? |
| Total | 137,473,077 | ? | 2,061,153 |
51 Credit losses
| Item | 2019 |
| ? | ? |
| Accounts receivable | 22,016,906 |
| Other receivables | 6,245,721 |
| ? | ? |
| Total | 28,262,627 |
52 Impairment losses
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Losses of bad and doubtful debts | ? | - | ? | 4,499,724 |
| Impairment losses of inventories | ? | 1,986,350,231 | ? | 1,201,958,587 |
| Impairment losses of fixed assets | ? | 160,345,034 | ? | - |
| Impairment losses of Long-term equity investments | ? | 240,721,340 | ? | - |
| Impairment losses of goodwill | 196,766,653 | - | ||
| Impairment losses of Available-for-sale financial assets | ? | - | ? | 33,130,452 |
| ? | ? | ? | ? | ? |
| Total | ? | 2,584,183,258 | ? | 1,239,588,763 |
53 Gains from asset disposals
?
Item
| Item | 2019 | ? | 2018 | ? | Amount recognised in extraordinary gain and loss in 2019 |
| ? | ? | ? | ? | ? | ? |
| Gains from disposal of fixed assets | 79,029 | ? | 1,067,273 | ? | 79,029 |
| ? | ? | ? | ? | ? | ? |
| Total | 79,029 | ? | 1,067,273 | ? | 79,029 |
54 Non-operating income and non-operating expenses
(1) Non-operating income by item is as follows:
?
Item
| Item | 2019 | ? | 2018 | ? | Amount recognised in extraordinary gain and loss in 2019 |
| ? | ? | ? | ? | ? | ? |
| Government grants | 36,867,390 | ? | 73,136,030 | ? | 36,867,390 |
| Others | 171,562,808 | ? | 96,293,485 | ? | 171,562,808 |
| ? | ? | ? | ? | ? | ? |
| Total | 208,430,198 | ? | 169,429,515 | ? | 208,430,198 |
Government grants recognised in profit or loss for the current period
| Item | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Policy incentives and others | ? | 36,867,390 | ? | 73,136,030 |
(2) Non-operating expenses
??
| ? | 2019 | ? | 2018 | ? | Amount recognised in extraordinary gain and loss in 2019 |
| ? | ? | ? | ? | ? | ? |
| Donations provided | 9,985,603 | ? | 8,931,099 | ? | 9,985,603 |
| Losses from damage or scrapping of non-current assets | 31,048,028 | ? | 25,378,178 | ? | 31,048,028 |
| Others | 62,315,447 | ? | 21,000,974 | ? | 62,315,447 |
| ? | ? | ? | ? | ? | ? |
| Total | 103,349,078 | ? | 55,310,251 | ? | 103,349,078 |
55 Income tax expenses
??
| ? | Note | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Current tax expense for the year based on tax law and regulations | ? | 956,184,825 | ? | 1,114,931,211 |
| Changes in deferred tax | (1) | 23,806,679 | ? | 127,484,883 |
| ? | ? | ? | ? | ? |
| Total | ? | 979,991,504 | ? | 1,242,416,094 |
(1) The analysis of changes in deferred tax assets/liabilities is set out below:
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Origination and reversal of temporary differences | ? | 23,806,679 | ? | 127,484,883 |
(2) Reconciliation between income tax expense and accounting profit is as follows:
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Profit before taxation | ? | 503,750,101 | ? | 4,122,290,167 |
| Expected income tax expense at tax rate of 15% | ? | 75,562,515 | ? | 618,343,525 |
| Add: Effect of different tax rates applied by subsidiaries | ? | 7,640,088 | ? | (8,605,091) |
| Effect of non-deductible costs, expense and losses | ? | 58,923,605 | ? | 57,787,173 |
| Tax effect of weighted deduction and tax preference | ? | (590,392,743) | ? | (326,776,754) |
| Utilisation of prior year tax losses | ? | (20,942,179) | ? | (42,090,199) |
| Tax effect of deductible losses of deferred tax assets not recognised | ? | 1,358,934,997 | ? | 801,853,138 |
| Tax effect of deductible temporary differences of deferred tax assets not recognised | ? | 106,073,260 | ? | 167,943,845 |
| Effect of tax rates changes on deferred tax | ? | (15,808,039) | ? | (26,039,543) |
| ? | ? | ? | ? | ? |
| Income tax expenses | ? | 979,991,504 | ? | 1,242,416,094 |
According to the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and TechnologyFinance and Taxation [2018] No. 99 Notice on Increasing the Pre-tax Deduction Ratio of Research and DevelopmentExpenses, in order to further encourage enterprises to increase investment in research and development, support scientific andtechnological innovation, enterprises actually carry out research and development activities. The research and developmentexpenses which are not resulted in intangible assets but in the current profits and losses, are deducted on the basis of theregulations truthfully. Besides, during January 1, 2018 and December 31 2020, extra deduction will be added to the researchand development expenses before taxation according to 75% of the actual amount.
56 Basic earnings per share and diluted earnings per share
Basic earnings per share is calculated as dividing consolidated net profit attributable to ordinary shareholders of the Companyby the weighted average number of ordinary shares outstanding. The Group does not have any potential dilutive ordinaryshares for the listed years.
?
?
| ? | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Net profit attributable to the Company’s shareholders | 1,918,643,871 | 3,435,127,975 | |
| Less: Current interest of other equity instruments | 56,109,589 | - | |
| Consolidated net profit attributable to ordinary shareholders of the Company | 1,862,534,282 | ? | 3,435,127,975 |
| Weighted average number of ordinary shares outstanding (share) | 34,798,398,763 | ? | 34,798,398,763 |
| Basic earnings per share (RMB/share) | 0.05 | ? | 0.10 |
57 Supplementary information on cash flow statement
(1) Supplement to cash flow statement
| ? | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| (a) Reconciliation of net profit to cash flows from operating activities: | ? | ? | ? |
| ? | ? | ? | ? |
| Net (loss)/profit | (476,241,403) | ? | 2,879,874,073 |
| Add: Credit loss | 28,262,627 | ? | - |
| Impairment loss | 2,584,183,258 | ? | 1,239,588,763 |
| Depreciation of fixed assets and investment properties | 18,357,209,097 | ? | 13,335,938,485 |
| Amortisation of intangible assets | 505,881,147 | ? | 439,474,291 |
| Amortisation of long-term deferred expenses | 123,883,157 | ? | 141,908,077 |
| Gains from disposal of fixed assets, intangible assets, and other long-term assets | (79,029) | ? | (3,694,057) |
| Losses from scrapping of fixed assets and intangible assets | 28,585,575 | ? | 25,378,178 |
| Financial expenses | 2,849,179,043 | ? | 2,568,053,826 |
| Gains from changes in fair value | (137,473,077) | ? | (2,061,153) |
| Investment income | (342,620,691) | ? | (306,887,579) |
| Change in deferred income | 276,854,045 | ? | 87,642,739 |
| Increase in deferred tax assets | (9,992,167) | ? | (97,760,872) |
| Increase in deferred tax liabilities | 33,798,846 | ? | 841,185,989 |
| Increase in inventories | (2,397,146,821) | ? | (3,709,307,660) |
| Decrease in operating receivables | 1,113,154,602 | ? | 828,109,193 |
| Increase in operating payables | 3,545,640,985 | ? | 7,416,604,903 |
| ? | ? | ? | ? |
| Net cash flows from operating activities | 26,083,079,194 | ? | 25,684,047,196 |
| (b) Net changes in cash and cash equivalents: | ? | ? | ? |
| ? | ? | ? | ? |
| ? | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Cash and cash equivalents at the end of the year | 50,270,321,573 | ? | 43,350,696,520 |
| Less: Cash and cash equivalents at the beginning of the year | 43,350,696,520 | ? | 47,913,287,583 |
| ? | ? | ? | ? |
| Net increase/(decrease) in cash and cash equivalents | 6,919,625,053 | ? | (4,562,591,063) |
(2) Information on acquisition of subsidiaries during the year
Information on acquisition of subsidiaries:
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Cash and cash equivalents paid during the year for acquiring subsidiaries during the year | ? | - | ? | - |
| Less: Cash and cash equivalents held by subsidiaries | ? | 33,640,033 | ? | 6,801,508,810 |
| ? | ? | ? | ? | ? |
| Net cash paid for the acquisition | ? | (33,640,033) | ? | (6,801,508,810) |
(3) Details of cash and cash equivalents
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Cash on hand | ? | 538,338 | ? | 537,805 |
| Bank deposits available on demand | ? | 50,269,207,607 | ? | 43,340,146,382 |
| Other monetary funds available on demand | ? | 575,628 | ? | 10,012,333 |
| ? | ? | ? | ? | ? |
| Cash and cash equivalents at the end of the year | ? | 50,270,321,573 | ? | 43,350,696,520 |
Note: Cash and cash equivalents disclosed above exclude other monetary fund with restricted usage.
58 Assets with restrictive ownership title or right of use
?Item
| Item | Balance at the beginning of the year | ? | Increase during the year | ? | Decrease during the year | ? | Balance at the end of the year | ? | Reason for restriction |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Cash at bank and on hand | 8,130,843,191 | ? | 6,330,578,381 | ? | (7,759,019,906) | ? | 6,702,401,666 | ? | Pledged as collateral and margin deposit |
| Bills receivable | 208,324,414 | ? | 65,247,847 | ? | (216,469,744) | ? | 57,102,517 | ? | Discounted with recourse, endorsed with resource and pledged for drawing bill |
| Financial assets held for trading | - | 24,000,000 | - | 24,000,000 | Pledged for drawing bill | ||||
| Investment properties | 217,435,561 | ? | - | ? | (174,038,890) | ? | 43,396,671 | ? | Mortgaged as collateral |
| Fixed assets | 98,251,866,706 | ? | 15,518,033,137 | ? | (20,762,127,016) | ? | 93,007,772,827 | ? | Mortgaged as collateral |
| Construction in progress | 34,117,974,254 | ? | 29,774,500,251 | ? | (6,809,015,524) | ? | 57,083,458,981 | ? | Mortgaged as collateral |
| Intangible assets | 1,216,927,485 | ? | 743,427,450 | ? | (425,969,092) | ? | 1,534,385,843 | ? | Mortgaged as collateral |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 142,143,371,611 | ? | 52,455,787,066 | ? | (36,146,640,172) | ? | 158,452,518,505 | ? | ? |
59 Details of provision for impairment of assets
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | Decrease during the year | ? | ? | ||||
| Item | Note | Balance at 31 December 2018 | ? | Impact of change in accounting policy | ? | Balance at 1 January 2019 | ? | Increase during the year | ? | Reversal | ? | Transferred out | ? | Translation differences | ? | Balance at the end of the year |
| ? | ? | RMB | ? | ? | ? | ? | ? | RMB | ? | RMB | ? | RMB | ? | RMB | ? | RMB |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Provision for bad and doubtful debts | V.4, 6 | 319,662,342 | ? | 8,482,829 | ? | 328,145,171 | ? | 29,761,432 | ? | (1,498,805) | ? | (4,755,005) | ? | 4,988,616 | ? | 356,641,409 |
| Provision for impairment of inventories | V.7 | 1,691,635,384 | ? | - | ? | 1,691,635,384 | ? | 2,899,581,455 | ? | (913,231,224) | ? | (1,866,910,805) | ? | 1,544,179 | ? | 1,812,618,989 |
| Provision for impairment of available-for-sale financial assets | V.10 | 184,595,607 | ? | (184,595,607) | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - |
| Provision for impairment of held-to-maturity investments | ? | 17,960,946 | ? | (17,960,946) | ? | - | ? | - | ? | - | ? | - | ? | - | ? | - |
| Provision for impairment of long-term equity investments | V.11 | 537,136,972 | ? | - | ? | 537,136,972 | ? | 240,721,340 | ? | - | ? | - | ? | - | ? | 777,858,312 |
| Provision for impairment of fixed assets | V.14 | 652,862,342 | ? | - | ? | 652,862,342 | ? | 160,345,034 | ? | - | ? | (21,511,406) | ? | - | ? | 791,695,970 |
| Provision for impairment of goodwill | V.17 | 4,423,876 | ? | - | ? | 4,423,876 | ? | 196,766,653 | ? | - | ? | - | ? | - | ? | 201,190,529 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 3,408,277,469 | ? | (194,073,724) | ? | 3,214,203,745 | ? | 3,527,175,914 | ? | (914,730,029) | ? | (1,893,177,216) | ? | 6,532,795 | ? | 3,940,005,209 |
For reasons of recognition of impairment losses, refer to the notes of relevant assets.
VI. Interests in other entities
1 Interests in subsidiaries
(1) Composition of the Group
| ? | ? | ? | ? | ? | ? | ? | ? | ? | Shareholding (or similar equity interest) percentage | ? | ? | ||
| Name of the Subsidiary | Principal place of business | ? | Registered place | ? | Business nature | ? | Registered capital | ? | Direct | ? | Indirect | ? | Acquisition method |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Beijing BOE Optoelectronics Technology Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Research and development, design and manufacture of TFT-LCD | ? | USD 649,110,000 | ? | 82.49% | ? | 17.51% | ? | Founded by investment |
| Chengdu BOE Optoelectronics Technology Co., Ltd. | Chengdu, China | ? | Chengdu, China | ? | Research and development, design, manufacture, and sale of new display devices and components | ? | RMB 25,000,000,000 | ? | 100% | ? | - | ? | Business combinations involving entities not under common control |
| Hefei BOE Optoelectronics Technology Co., Ltd. | Hefei, China | ? | Hefei, China | ? | Investing, researching, manufacturing and promoting TFT-LCD products and accessory products | ? | RMB 9,000,000,000 | ? | 100% | ? | - | ? | Business combinations involving entities not under common control |
| Beijing BOE Display Technology Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Development of TFT-LCD, manufacture and sale of LCD | ? | RMB 17,882,913,500 | ? | 97.17% | ? | 2.83% | ? | Founded by investment |
| Hefei Xinsheng Optoelectronics Technology Co., Ltd | Hefei, China | ? | Hefei, China | ? | Investing, researching, manufacturing and promoting TFT-LCD products and accessory products | ? | RMB 19,500,000,000 | ? | 99.97% | ? | 0.03% | ? | Business combinations involving entities not under common control |
| Ordos Yuansheng Optoelectronics Co., Ltd. | Ordos, China | ? | Ordos, China | ? | The production and operation of AMOLED and relevant products | ? | RMB 11,804,000,000 | ? | 100% | ? | - | ? | Founded by investment |
| Chongqing BOE Optoelectronics Co., Ltd. | Chongqing, China | ? | Chongqing, China | ? | Research, development, manufacture and sales of semiconductor display devices, machine and relevant products, import and export of goods and technical consulting | ? | RMB 19,226,000,000 | ? | 100% | ? | - | ? | Business combinations involving entities not under common control |
| Fuzhou BOE Optoelectronics Technology Co., Ltd. | Fuzhou, China | ? | Fuzhou, China | ? | Investing, researching, manufacturing and promoting TFT-LCD products and accessory products | ? | RMB 17,600,000,000 | ? | 81.25% | ? | - | ? | Business combinations involving entities not under common control |
| Beijing BOE Vision-electronic Technology Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Research, manufacture and sales of terminal products of LCD monitor and TV etc. | ? | RMB 4,093,500,000 | ? | 100% | ? | - | ? | Founded by investment |
| Beijing BOE Vacuum Electronics Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Manufacture and sales of vacuum electronic products | ? | RMB 35,000,000 | ? | 55% | ? | - | ? | Founded by investment |
| Beijing BOE Vacuum Technology Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Manufacture and sales of vacuum tubes | ? | RMB 32,000,000 | ? | 100% | ? | - | ? | Founded by investment |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | Shareholding (or similar equity interest) percentage | ? | ? | ||
| Name of the Subsidiary | Principal place of business | ? | Registered place | ? | Business nature | ? | Registered capital | ? | Direct | ? | Indirect | ? | Acquisition method |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Beijing BOE Special Display Technology Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Development of display products and sales of electronic products | ? | RMB 100,000,000 | ? | 100% | ? | - | ? | Founded by investment |
| Beijing Yinghe Century Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Engineering project management, real estate development, mobile vehicle parking lot services and marketing research | ? | RMB 233,105,200 | ? | 100% | ? | - | ? | Founded by investment |
| BOE Optical Science and technology Co., Ltd. | Suzhou, China | ? | Suzhou, China | ? | Development, manufacture and sales of backlight and related parts and components for LCD | ? | RMB 826,714,059 | ? | 95.17% | ? | - | ? | Founded by investment |
| BOE Hyundai LCD Inc. | Beijing, China | ? | Beijing, China | ? | Development of display products and sales of electronic products | ? | USD 5,000,000 | ? | 75% | ? | - | ? | Founded by investment |
| BOE (Hebei) Mobile Technology Co., Ltd. | Langfang, China | ? | Langfang, China | ? | Manufacture and sales of mobile flat screen display technical products and related services | ? | RMB 1,358,160,140 | ? | 100% | ? | - | ? | Founded by investment |
| Beijing BOE multimedia Technology Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Sales of computer software and Hardware, the numeral regards the audio frequency technology | ? | RMB 400,000,000 | ? | 100% | ? | - | ? | Founded by investment |
| Beijing BOE Energy Technology Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Design, consultation and services of solar battery, photovoltaic system, wing turbine system and photo-thermal system, and energy saving service | ? | RMB 850,000,000 | ? | 100% | ? | - | ? | Founded by investment |
| Beijing BOE Life Technology Co., Ltd | Beijing, China | ? | Beijing, China | ? | Technology poromotion services, property management, sales of electronic products | ? | RMB 24,000,000 | ? | 100% | ? | - | ? | Founded by investment |
| Beijing Zhongxiangying Technologies Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Technology poromotion services, property management, sales of electronic products | ? | RMB 10,000,000 | ? | 100% | ? | - | ? | Founded by investment |
| Ordos City Haosheng Energy Investment Co., Ltd. | Ordos, China | ? | Ordos, China | ? | Investment in enegy | ? | RMB 30,000,000 | ? | - | ? | 100% | ? | Founded by investment |
| BOE Semi-conductor Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Processing, production, and sales of goods, primarily comprising sales of precision electronic metal parts and semiconductor devices, in addition to micromodules, microelectronic devices and electronic materials; import and export of goods | ? | RMB 11,250,000 | ? | 84% | ? | - | ? | Founded by investment |
| BOE Optoelectronics Holding Co., Ltd | Hong Kong, China | ? | British Virgin Islands | ? | Design, manufacturing and sales of electronic-information industry related products, investment and financing businesses | ? | USD 260,809,100 | ? | 100% | ? | - | ? | Founded by investment |
| Beijing Asahi Electronic Materials Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Sales of Supports and glass bar for TV and CTV low melting sealing frit | ? | RMB 61,576,840 | ? | 100% | ? | - | ? | Business combinations involving entities not under common control |
| BOE Health Investment & Management Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Investment management and investment | ? | RMB 3,000,000,000 | ? | 100% | ? | - | ? | Business combinations involving entities not under common control |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | Shareholding (or similar equity interest) percentage | ? | ? | ||
| Name of the Subsidiary | Principal place of business | ? | Registered place | ? | Business nature | ? | Registered capital | ? | Direct | ? | Indirect | ? | Acquisition method |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Beijing·Matsushita Color Innovation Co., Ltd | Beijing, China | ? | Beijing, China | ? | Color TV, display tube, color rear projection TV projection tube and electronic component materials, property management, parking services, etc. | ? | RMB 325,754,049 | ? | 88.80% | ? | - | ? | Business combinations involving entities not under common control |
| Hefei BOE Display Technology Co., Ltd. | Hefei, China | ? | Hefei, China | ? | Investing, researching, manufacturing and promoting TFT-LCD products and accessory products | ? | RMB 24,000,000,000 | ? | 8.33% | ? | - | ? | Business combinations involving entities not under common control |
| Beijing BOE Technology Development Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Development, transfer, consultation and services of technologies | ? | RMB 1,000,000 | ? | 100% | ? | - | ? | Founded by investment |
| BOE smart IOT Technology Co., Ltd | Beijing, China | ? | Beijing, China | ? | Development, transfer, consultation, services and promotion of technologies | ? | RMB 142,000,000 | ? | 100% | ? | - | ? | Founded by investment |
| Hefei BOE Zhuoyin Technology Co., Ltd. | Hefei, China | ? | Hefei, China | ? | Investing, researching, manufacturing and promoting TFT-LCD products and accessory products | ? | RMB 800,000,000 | ? | 75% | ? | - | ? | Founded by investment |
| Beijing BOE Land Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Development, construction, property management and supporting services of industrial plants and supporting facilities, information and consultation of real estates, lease of commercial facilities, service staff and other supporting facilities and public parking area services for vehicles | ? | RMB 55,420,000 | ? | 70% | ? | - | ? | Founded by investment |
| Beijing BOE Sales Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Sales of communication devices, computer hardware and software and accessory devices and electronic products and equipment maintenance; development, transfer, consultation and services of technologies; import and export of goods, import and export agency, import and export of technologies; Consigned processing of electronic products and LCD | ? | RMB 50,000,000 | ? | 100% | ? | - | ? | Founded by investment |
| Kunming BOE Display Technology Co., Ltd. | Yunnan, China | ? | Yunnan, China | ? | Development, promotion, transfer, consultation and services of display technology; computer software, hardware and network system services; the construction, operations and management of e-commerce platform; product design; conference services; undertaking exhibitions and presentation activities; computer animation design; production, R&D and sales of OLED microdisplays and AR/VR complete machines; warehousing services; I-type Xuanmu investment and management of investment projects | ? | RMB 3,040,000,000 | ? | 69.43% | ? | - | ? | Founded by investment |
| Mianyang BOE Optoelectronics Technology Co., Ltd. | Mianyang, China | ? | Mianyang, China | ? | research and development, production and sales of flexible AMOLED, the products are mainly used in smart phones, wearable devices, car display, AR/VR, etc. | ? | RMB 24,000,000,000 | ? | 68.72% | ? | - | ? | Business combinations involving entities not under common control |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | Shareholding (or similar equity interest) percentage | ? | ? | ||
| Name of the Subsidiary | Principal place of business | ? | Registered place | ? | Business nature | ? | Registered capital | ? | Direct | ? | Indirect | ? | Acquisition method |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Beijing BOE Sensing Technology Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Formation of X-ray sensors, microfluidic chips, biochemical chips, gene chips, security sensors, microwave antennas, biosensors, logistics network technology and other semiconductor sensors, technology testing, technical consulting, technical services, technology transfer | ? | RMB 50,000,000 | ? | 100% | ? | - | ? | Founded by investment |
| Beijing BOE Yiyun Science &Technology Co., Ltd. | Beijing, China | ? | Beijing, China | ? | Technology development, technology transfer, technical consulting, technical services; technology intermediary services; information system integration; basic software services; application software services; software development | ? | RMB 200,000,000 | ? | 95.92% | ? | - | ? | Business combinations involving entities not under common control |
| Wuhan BOE Optoelectronics Technology Co., Ltd. (“Wuhan BOE”) | Wuhan, China | ? | Wuhan, China | ? | Investing, researching, manufacturing and promoting TFT-LCD products and accessory products | ? | RMB 19,523,000,000 | ? | 23.08% | ? | - | ? | Business combinations involving entities not under common control |
| Chongqing BOE Display Technology Co., Ltd. (Chongqing BOE Display) | Chongqing, China | ? | Chongqing, China | ? | Research, development, manufacture and sales of semiconductor display devices, machine and relevant products, import and export of goods and technical consulting | ? | RMB 6,010,000,000 | ? | 38.46% | ? | - | ? | Business combinations involving entities not under common control |
| Fuzhou BOE Display Technology Co., Ltd. (“Fuzhou BOE Display”) | Fuzhou, China | ? | Fuzhou, China | ? | Mainly engaged in the research and development, production and sales of semiconductor display device-related products and related products; import or export of goods or technology; display device and component, other electronic components, and technology development, technology transfer, technical consulting, related fields related to display devices and electronic products, Technical services; business management consulting; property management; house leasing; machinery and equipment leasing | ? | RMB 50,000,000 | ? | 43.46% | ? | - | ? | Business combinations involving entities not under common control |
| SES Imagotag SA Co.Ltd. | Nanterre, France | ? | Nanterre, France | ? | Supports color electronic paper, segment LCD, TFT-LCD display, covering ESL multi-frequency protocol, Wi-Fi, BLE and NFC; multiple communication methods, integrated electronic paper supply chain resources and downstream software around electronic shelf labels Platform, image recognition and big data analytics resources to create a complete solution for the retail industry | ? | EUR 31,512,216 | ? | - | ? | 68.48% | ? | Business combinations involving entities not under common control |
The Company and the shareholder of Hefei Display Technology, Hefei Core Screen Industrial Investment Fund (Limited Partnership) signed a concerted action agreement on November 30,2016, Hefei Core Screen Industrial Investment Fund (Limited Partnership) agreed to act as a concerted action according to the wishes of the Company, and exercised the voting rightsunconditionally and irrevocably in accordance with the opinions of the Company. Therefore, the Company's voting right ratio to Hefei is 71.67%.
The Company and Shareholder of Wuhan BOE, Wuhan Airport Economic Development Zone Industrial Development Investment Group Co., Ltd. signed a concerted action agreement on 25December 2018. Wuhan Airport Economic Development Zone Industrial Development Investment Group Co., Ltd. agreed to follow the Company's will to act as a concerted action,unconditionally and irrevocably exercising voting rights in accordance with the opinions of the company, the voting rights of the Company to Wuhan BOE is 61.95%.
The Company and shareholders of Chongqing BOE Display, Chongqing Strategic Emerging Industry Equity Investment Fund Partnership (Limited Partnership) and Chongqing YuziOptoelectronic Industry Investment Co., Ltd. signed a concerted action agreement on 25 December 2018, Chongqing Strategic Emerging Industry Equity Investment Fund Partnership (LimitedPartnership) and Chongqing Yuzi Optoelectronic Industry Investment Co., Ltd. agreed to act as a concerted action according to the will of the Company, and exercise the voting rightsunconditionally and irrevocably in accordance with the opinions of the Company. Therefore, the proportion of voting rights displayed by the Company on Chongqing BOE is 100%.
The Company and Shareholder of Fuzhou BOE Display, Fuqing City Invested-Construction Investment Group Co., Ltd and Fuzhou Urban Construction Investment Group Co., Ltd signed aconcerted action agreement on 21 January 2019. Fuqing City Invested-Construction Investment Group Co., Ltd and Fuzhou Urban Construction Investment Group Co., Ltd agreed to act as aconcerted action according to the will of the Company, and exercise the voting rights unconditionally and irrevocably in accordance with the opinions of the Company. Therefore, the proportionof voting rights displayed by the Company on Fuzhou BOE Display is 100%.
(2) Material non-wholly owned subsidiaries
| Name of subsidiaries | Shareholding percentage of non-controlling interests | ? | Losses attributable to non-controlling interests during the year | ? | Dividend declared to non-controlling shareholders during the year | ? | Balance of non-controlling interests at the end of the year |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Hefei Display Technology | 91.67% | ? | (2,244,850,606) | ? | - | ? | 19,288,976,939 |
| Mianyang BOE | 31.28% | ? | (60,432,308) | ? | - | ? | 6,574,587,034 |
(3) Key financial information about material non-wholly owned subsidiaries
The following table sets out the key financial information of the above subsidiaries without offsetting internal transactions,but with adjustments made for the fair value adjustment at the acquisition date and any differences in accounting policies:
??
| ? | ? | Hefei Display Technology | ? | Mianyang BOE | ? | |||||||||||||
| ? | ? | 2019 | ? | 2018 | ? | 2019 | ? | 2018 | ||||||||||
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ||||||||||
| Current assets | ? | 11,633,732,300 | ? | 11,725,102,123 | ? | 3,644,261,703 | ? | 2,773,489,555 | ||||||||||
| Non-current assets | ? | 33,264,338,502 | ? | 36,531,775,939 | ? | 39,751,190,014 | ? | 25,796,166,533 | ||||||||||
| ? | ? | ? | ? | ? | ? | |||||||||||||
| Total assets | ? | 44,898,070,802 | ? | 48,256,878,062 | ? | 43,395,451,717 | ? | 28,569,656,088 | ||||||||||
| ? | ? | ? | ? | ? | ? | |||||||||||||
| Current liabilities | ? | 9,069,027,029 | ? | 7,708,059,063 | ? | 4,971,407,195 | ? | 4,403,438,719 | ||||||||||
| Non-current liabilities | ? | 14,787,288,631 | ? | 16,968,627,760 | ? | 17,405,543,775 | ? | 7,155,140,937 | ||||||||||
| ? | ? | ? | ? | ? | ? | |||||||||||||
| Total liabilities | ? | 23,856,315,660 | ? | 24,676,686,823 | ? | 22,376,950,970 | ? | 11,558,579,656 | ||||||||||
| ? | ? | ? | ? | ? | ? | |||||||||||||
| Operating income | ? | 11,455,196,518 | ? | 3,318,954,798 | ? | 110,313,244 | ? | 479,530 | ||||||||||
| Net loss | ? | (2,448,838,884) | ? | (406,216,942) | ? | (252,575,687) | ? | (113,788,845) | ||||||||||
| Total comprehensive income | ? | (2,448,838,884) | ? | (412,759,853) | ? | (252,575,687) | ? | (113,788,845) | ||||||||||
| Cash flows from operating activities | ? | 912,437,769 | ? | 407,026,027 | ? | 184,012,366 | ? | (524,307,111) | ||||||||||
2 Transactions that cause changes in the Group’s interests in subsidiaries that do not result in loss of control
(1) Changes in the Group’s interests in subsidiaries:
| ? | ? | Before changes of interests | ? | after changes of interests |
| ? | ? | ? | ? | ? |
| BOE Semi-conductor Co., Ltd. | ? | 80.77% | ? | 84.00% |
| Kunming BOE Display Technology Co., Ltd. | ? | 45.11% | ? | 69.43% |
| Mianyang BOE Optoelectronics Technology Co., Ltd. | ? | 81.35% | ? | 68.72% |
| Wuhan BOE Optoelectronics Technology Co., Ltd. | ? | 14.58% | ? | 23.08% |
| Fuzhou BOE Display Technology Co., Ltd. | ? | 65.77% | ? | 43.46% |
| SES Imagotag SA Co., Ltd. | ? | 73.93% | ? | 68.48% |
(2) Impact from transactions with non-controlling interests and equity attributable to the shareholders of the Company:
The changes in the shareholding of the Company in the owners of above-mentioned other subsidiaries were caused by thecapital increase of the Company and its non-controlling interests, which results to the increase of capital reserver by RMB123,068,274 (Note V.38).
3 Interests in joint ventures or associates
Please see Note V.11 (2) for details of the summarized financial information of the associates and joint ventures.
No material restrictions on transfers of funds from investees to the Group. The judgment basis of the Company and itssubsidiaries to hold lower than 20% of the voting rights of other entities but have significant influence on the entity is due tothe fact that the Company and its subsidiaries have seats in the board of directors of the entity, and the Company andSubsidiaries of the Company may have significant influence on the entity through the representation of the directors in theprocess of formulating financial and operating policies.
VII. Risk related to financial instruments
The Group has exposure to the following main risks from its use of financial instruments in the normal course of the Group’soperations:
- Credit risk- Liquidity risk- Interest rate risk- Foreign currency risk- Other price risks
The following mainly presents information about the Group’s exposure to each of the above risks and their sources, theirchanges during the year, and the Group’s objectives, policies and processes for measuring and managing risks, and theirchanges during the year.
The Group aims to seek appropriate balance between the risks and benefits from its use of financial instruments and tomitigate the adverse effects that the risks of financial instruments have on the Group’s financial performance. Based on suchobjectives, the Group’s risk management policies are established to identify and analyse the risks faced by the Group, to setappropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems arereviewed regularly to reflect changes in market conditions and the Group’s activities. The internal audit department of theGroup undertakes both regular and ad-hoc reviews of risk management controls and procedures.
(1) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing todischarge an obligation. The Group’s credit risk is primarily attributable to receivables. Exposure to these credit risks aremonitored by management on an ongoing basis.
The cash at bank of the Group is mainly held with well-known financial institutions. Management does not foresee anysignificant credit risks from these deposits and does not expect that these financial institutions may default and cause lossesto the Group.
In respect of receivables, the Group has established a credit policy under which individual credit evaluations are performedon all customers to determine the credit limit and terms applicable to the customers. These evaluations focus on thecustomers’ financial position, the external ratings of the customers and the record of previous transactions. Receivables aredue within 15 to 120 days from the date of billing. Debtors with balances that are past due are requested to settle alloutstanding balances before any further credit is granted. Normally, the Group does not obtain collateral from customers.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer rather than theindustry, country or area in which the customers operate and therefore significant concentrations of credit risk arise primarilywhen the Group has significant exposure to individual customers. At the balance sheet date, the Group and the Company’saccounts receivable and other receivables due from the top five customers account for 43% and 0.07% of the total accountsreceivable respectively (2018: 40% and 0.06%). In addition, the accounts receivable not overdue or impaired is mainlyrelated to many clients who don’t have payment in arrears records recently.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet. Asmentioned in Note XI, as at 31 December 2019 the Group does not provide any external guarantees which would expose theGroup or the Company to credit risk.
(2) Liquidity risk
Liquidity risk is the risk that an enterprise will encounter difficulty in meeting obligations that are settled by delivering cashor another financial asset. The Company and its individual subsidiaries are responsible for their own cash management,including short-term investment of cash surpluses and the raising of loans to cover expected cash demands (subject toapproval by the Company’s board when the borrowings exceed certain predetermined levels). The Group’s policy is toregularly monitor its liquidity requirements and its compliance with lending covenants, to ensure that it maintains sufficientreserves of cash, readily realisable marketable securities and adequate committed lines of funding from major financialinstitutions to meet its liquidity requirements in the short and longer term.
| ? | 2019 Contractual undiscounted cash flow | ? | ? | ||||||||
| ? | Within 1 year or on demand | ? | More than 1 year but less than 3 years | ? | More than 3 years but less than 5 years | ? | More than 5 years | ? | Total | ? | Carrying amount of balance sheet |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Financial liabilities | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Short-term loans | 6,458,040,008 | ? | - | ? | - | ? | - | ? | 6,458,040,008 | ? | 6,366,717,121 |
| Bills payable | 2,028,917,980 | ? | - | ? | - | ? | - | ? | 2,028,917,980 | ? | 2,028,917,980 |
| Accounts payable | 21,183,567,553 | ? | - | ? | - | ? | - | ? | 21,183,567,553 | ? | 21,183,567,553 |
| Other payables | 24,570,589,610 | ? | - | ? | - | ? | - | ? | 24,570,589,610 | ? | 24,570,589,610 |
| Non-current liabilities due within one year | 19,473,884,018 | ? | - | ? | - | ? | - | ? | 19,473,884,018 | ? | 18,849,281,019 |
| Long-term loans | 4,478,877,485 | ? | 8,296,257,569 | ? | 26,580,720,126 | ? | 94,478,027,383 | ? | 133,833,882,563 | ? | 107,730,595,615 |
| Long-term payables | - | ? | 409,808,948 | ? | 328,617,676 | ? | 538,091,397 | ? | 1,276,518,021 | ? | 984,520,824 |
| Debentures payable | 14,497,753 | ? | 28,995,505 | ? | 330,673,806 | ? | 3,556,053 | ? | 377,723,117 | ? | 387,878,384 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 78,208,374,407 | ? | 8,735,062,022 | ? | 27,240,011,608 | ? | 95,019,674,833 | ? | 209,203,122,870 | ? | 182,102,068,106 |
| ? | 2018 Contractual undiscounted cash flow | ? | ? | ||||||||
| ? | Within 1 year or on demand | ? | More than 1 year but less than 3 years | ? | More than 3 years but less than 5 years | ? | More than 5 years | ? | Total | ? | Carrying amount of balance sheet |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Financial liabilities | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Short-term loans | 5,542,824,867 | ? | - | ? | - | ? | - | ? | 5,542,824,867 | ? | 5,449,954,885 |
| Bills payable | 591,109,272 | ? | - | ? | - | ? | - | ? | 591,109,272 | ? | 591,109,272 |
| Accounts payable | 22,213,956,616 | ? | - | ? | - | ? | - | ? | 22,213,956,616 | ? | 22,213,956,616 |
| Other payables | 22,956,979,828 | ? | - | ? | - | ? | - | ? | 22,956,979,828 | ? | 22,956,979,828 |
| Non-current liabilities due within one year | 6,081,520,241 | ? | - | ? | - | ? | - | ? | 6,081,520,241 | ? | 5,597,563,204 |
| Long-term loans | 4,283,202,579 | ? | 9,376,015,293 | ? | 14,959,103,283 | ? | 92,225,178,032 | ? | 120,843,499,187 | ? | 94,780,077,864 |
| Long-term payables | - | ? | 708,503,891 | ? | 399,396,820 | ? | 696,811,815 | ? | 1,804,712,526 | ? | 1,416,092,239 |
| Debentures payable | 325,986,220 | ? | 10,651,972,440 | ? | 335,864,440 | ? | - | ? | 11,313,823,100 | ? | 10,288,666,233 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 61,995,579,623 | ? | 20,736,491,624 | ? | 15,694,364,543 | ? | 92,921,989,847 | ? | 191,348,425,637 | ? | 163,294,400,141 |
(3) Interest rate risk
Interest-bearing financial instruments at variable rates and at fixed rates expose the Group to cash flow interest rate risk andfair value interest risk, respectively. The Group determines the appropriate weightings of the fixed and floating rateinterest-bearing instruments based on the current market conditions and performs regular reviews and monitoring to achievean appropriate mix of fixed and floating rate exposure. The Group does not enter into financial derivatives to hedge interestrate risk.
(a) As at 31 December, the Group held the following interest-bearing financial instruments:
Fixed rate instruments:
??
| ? | 2019 | ? | 2018 | ||||
| Item | Effective interest rate | ? | Amount | ? | Effective interest rate | ? | Amount |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Financial assets | ? | ? | ? | ? | ? | ? | ? |
| - Cash at bank and on hand | 0.20%~3.74% | ? | 26,721,273,607 | ? | 0.20% ~ 3.74% | ? | 21,898,508,469 |
| Financial liabilities | ? | ? | ? | ? | ? | ? | ? |
| - Short-term loans | 0.40%-4.35% | ? | (4,643,502,121) | ? | 1.28% ~ 4.95% | ? | (2,927,190,124) |
| - Non-current liabilities due within one year | 0%-5.64% | ? | (9,071,034,895) | ? | 0% ~ 5.88% | ? | (2,967,991,325) |
| - Debentures payable | 3.50%~4.55% | ? | (387,878,384) | ? | 3.15% ~ 3.50% | ? | (10,288,666,233) |
| - Long-term payables | 4.24%~7.09% | ? | (984,520,824) | ? | 3.56% ~ 7.09% | ? | (1,416,092,239) |
| - Long-term loans | 0%-5.64% | ? | (59,667,474,395) | ? | 0% ~ 5.88% | ? | (58,484,576,750) |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | (48,033,137,012) | ? | ? | ? | (54,186,008,202) |
Variable rate instruments:
??
| ? | 2019 | ? | 2018 | ||||
| Item | Effective interest rate | ? | Amount | ? | Effective interest rate | ? | Amount |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Financial assets | ? | ? | ? | ? | ? | ? | ? |
| - Cash at bank and on hand | 0.0001%~3.90% | ? | 30,250,911,294 | ? | 0.0001% ~ 3.90% | ? | 29,582,493,437 |
| Financial liabilities | ? | ? | ? | ? | ? | ? | ? |
| - Short-term loans | 3.56%~3.92% | ? | (1,723,215,000) | ? | 3.44%-4.39% | ? | (2,522,764,761) |
| - Non-current liabilities due within one year | 1.04%-6.38% | ? | (9,619,871,357) | ? | 5.37% ~ 7.18% | ? | (2,629,571,879) |
| - Long-term loans | 3.00%~6.38% | ? | (48,063,121,220) | ? | 1.04% ~ 7.18% | ? | (36,295,501,114) |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | (29,155,296,283) | ? | ? | ? | (11,865,344,317) |
(b) Sensitivity analysis
As at 31 December 2019, it is estimated that a general increase/decrease of 100 basis points in interest rates of variablerate instrument, with all other variables held constant, would decrease/increase the Group’s net profit and equity byRMB 251,370,000 (2018: RMB 104,380,000).
In respect of the exposure to cash flow interest rate risk arising from floating rate non-derivative instruments held bythe Group at the balance sheet date, the impact on the net profit and equity is estimated as an annualised impact oninterest expense or income of such a change in interest rates. The analysis is performed on the same basis for theprevious year.
(4) Foreign currency risk
In respect of cash at bank and on hand, accounts receivable and payable, short-term loans and other assets and liabilitiesdenominated in foreign currencies other than the functional currency, the Group ensures that its net exposure is kept to anacceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.
(a) The Group’s exposure as at 31 December to currency risk arising from recognized
foreign currency assets or liabilities is mainly denominated in US dollar. The amount ofthe USD exposure is net liabilities exposure USD 1,791,577,868 (2018 net liabilitiesexposure: USD 2,098,686,634), translated into RMB 12,498,405,521 (2018: RMB14,403,706,106), using the spot rate at the balance sheet date. Differences resultingfrom the translation of the financial statements denominated in foreign currency areexcluded.
(b) The following are the exchange rates for Renminbi against US dollar applied by the
Group:
| ? | Average rate | ? | Reporting date mid-spot rate | ||||
| ? | 2019 | ? | 2018 | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| USD | 6.9197 | ? | 6.6987 | ? | 6.9762 | ? | 6.8632 |
Assuming all other risk variables remained constant, a 5% strengthening/weakening of the Renminbi against the USdollar at 31 December would have increased/decreased both the Group’s equity and net profit by the amount RMB197,336,145 (2018: RMB 506,911,356).
The sensitivity analysis above assumes that the change in foreign exchange rates had been applied to re-measure thosefinancial instruments held by the Group which expose the Group to foreign currency risk at the balance sheet date. Theanalysis excludes differences that would result from the translation of the financial statements denominated in foreigncurrency. The analysis is performed on the same basis for the previous year.
(5) Other price risks
Other price risks include stock price risk, commodity price risk and others.
VIII. Fair value disclosure
The following table presents the fair value information and the fair value hierarchy, at the end of the current reporting period,of the Group’s assets and liabilities which are measured at fair value at each balance sheet date on a recurring ornon-recurring basis. The level in which fair value measurement is categorised is determined by the level of the fair valuehierarchy of the lowest level input that is significant to the entire fair value measurement. The levels of inputs are defined asfollows:
Level 1 inputs: unadjusted quoted prices in active markets that are observable at the measurement date for identical
assets or liabilities;
Level 2 inputs: inputs other than Level 1 inputs that are either directly or indirectly observable for underlying assets or
liabilities;
Level 3 inputs: inputs that are unobservable for underlying assets or liabilities.
1 Fair value of assets measured at fair value at the end of the year
| ? | ? | 31 December 2019 | ||||||
| Assets | Notes | Level 1 Fair value measurement | ? | Level 2 Fair value measurement | ? | Level 3 Fair value measurement | ? | Total |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Recurring fair value measurements | ? | ? | ? | ? | ? | ? | ? | ? |
| - Financial assets held for trading | - | - | 5,809,184,994 | ? | 5,809,184,994 | |||
| Including: Wealth management products | V.2 | - | - | 5,809,184,994 | ? | 5,809,184,994 | ||
| - Investments in other equity instruments | V.12 | 300,124,974 | - | 331,951,673 | ? | 632,076,647 | ||
| ? | ? | ? | ? | ? | ? | ? | ||
| Total assets measured at fair value on a recurring basis | ? | 300,124,974 | - | 6,141,136,667 | ? | 6,441,261,641 | ||
?
?
| ? | ? | 31 December 2018 | ||||||
| Assets | Notes | Level 1 Fair value measurement | ? | Level 2 Fair value measurement | ? | Level 3 Fair value measurement | ? | Total |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Recurring fair value measurements | ? | ? | ? | ? | ? | ? | ? | ? |
| - Wealth management products | V.9 | - | ? | - | ? | 5,534,413,566 | ? | 5,534,413,566 |
| - Available-for-sale financial assets | V.10 | ? | ? | ? | ? | - | ? | - |
| Including: Debt instruments | ? | - | ? | - | ? | 12,866,432 | ? | 12,866,432 |
| Equity instruments | ? | 378,636,117 | ? | - | ? | - | ? | 378,636,117 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total assets measured at fair value on a recurring basis | ? | 378,636,117 | ? | - | ? | 5,547,279,998 | ? | 5,925,916,115 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| - Equity of redemption terms-Swap obligation | ? | - | ? | - | ? | (71,000,000) | ? | (71,000,000) |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total liabilities measured at fair value on a recurring basis | ? | - | ? | - | ? | (71,000,000) | ? | (71,000,000) |
2 Basis of determining the market price for recurring and non-recurring fair value measurements categorised within Level 1
The Group uses the active market quote as the fair value of financial assets within Level 1.
3 Valuation techniques used and the qualitative and quantitative information of key parameters for recurring and non-recurring
fair value measurements categorised within Level 3
Financial assets held for trading at recurring fair value within Level 3 are bank wealth management products. For wealthmanagement products measured at fair value, the fair value is determined based on the discounted cash flow method.
Investments in other equity instruments at recurring fair value within Level 3 are unlisted equity investments held by theGroup, including:
(i) For those who raised a new round of financing in 2019, the Group used the financing price as the best estimates of theirfair value;
(ii) For other investments in other equity instruments, since the operating environment, operating conditions and financialstatus of the investee have not changed significantly during the year, the Group uses the book investment cost as a reasonableestimate of fair value for measurement.
On 31 December 2018, the fair value of available-for-sale equity instruments and available-for-sale debt instruments isdetermined by market price on the balance sheet date. The fair value of financial products is determined using discountedcash flow method,whose amortised cost is not significantly different from the fair value on the balance sheet date. The fair value of Equity ofredemption terms-Swap obligation is determined by Monte Carlo method.
4 During 2019, there were no changes in valuation technique of fair value. As at 31 December, there were no significant
discrepancies between the book value and fair value of all the financial assets and financial liabilities except the above assetsmeasured at fair value and the non-current assets held for sale presented in Note V.8.
IX. Related parties and related party transactions
1 Information about the parent of the Company
| Company name | Registered place | ? | Business nature | ? | Registered capital | ? | Shareholding percentage (%) | ? | Percentage of voting rights (%) | ? | Ultimate controlling party of the Company |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Beijing Electronics Holding Co., Ltd. | No. 12, Jiuxianqiao Road Chaoyang District, Beijing | ? | Operation and management of state-owned assets within authorization, etc. | ? | RMB 2,418,350,000 | ? | 0.79% | ? | 27.85% | ? | Yes |
2 Information about the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VI.1.
3 Information about joint ventures and associates of the Company
Associates and Joint ventures that have related party transactions with the Group during this year or the previous year are asfollows:
?
Name of entity
| Name of entity | Relationship with the Company |
| ? | ? |
| TPV Display Technology (China) Limited | Associate of the Group and the Company |
| Beijing Xindongneng Investment Management Co., Ltd. | Associate of the Group and the Company |
| Shenzhen Yunyinggu Technology Co., Ltd. | Associate of the Group and the Company |
| Beijing Nittan Electronic Co., Ltd. | Associate of the Group and the Company |
| Beijing Zhonglianhe Ultra HD Collaborative Technology Center Co., Ltd. | Associate of the Group |
| Hefei Xin Jing Yuan Electronic Materials Co., Ltd. | Associate of the Group |
| Cnoga Medical Ltd. | Associate of the Group |
4 Information on other related parties
| Name of other related parties | Related party relationship |
| ? | ? |
| Beijng NAURA Microelectronics Equipment Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing Zhengdong Electronic Power Group Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing Yandong Microelectronic Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing Dongdian Industrial Development Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing Sevenstar PV Group Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Sevenstar Semiconductor Technologies Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| NAURA Technology Group Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing Zhaowei Electronic Group Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing Zhaowei Technology Development Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing BBEF Science & Technology Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing C&W Intelligent Equipment Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| New Vision Micro.(Hong Kong) Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing Ether Electronics Group Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing Yansong Economic and Trade Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing BOE Investment Development Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing Ripeness Sanyuan Instrumentation Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing Electronics Holding & SK Technology Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing Electronics ST (Jiangsu) Technology Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Yandong Microelectronic Technology Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| Beijing Electronics Holding Jiuyi Industrial Development Co., Ltd. | Enterprises that are controlled by the Company’s ultimate holding company |
| BAIC Motor Corporation., Ltd. | Other related parties |
| China United Network Communications Limited | Other related parties |
| Hefei ESWIN IC Technology Co., Ltd | Other related parties |
| Chengdu ESWIN IC Design Co., Ltd. | Other related parties |
5 Transactions with related parties
The transactions below with related parties were conducted under normal commercial terms or agreements.
(1) Purchase of goods, equipments, and receiving of services (excluding remuneration of key management personnel)
The Group
| Nature of transaction | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Purchase of goods | 480,284,012 | ? | 141,966,350 |
| Procurement of equipment | 397,005,152 | ? | 601,680,874 |
| Receiving services | 17,744,265 | ? | 19,901,930 |
| ? | ? | ? | ? |
| Total | 895,033,429 | ? | 763,549,154 |
The Company
?Nature of transaction
| Nature of transaction | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Purchase of goods | 12,379,363 | ? | 11,854,329 |
| Receiving services | 844,688,884 | ? | 96,670,167 |
| Payment of interest expenses | 65,689,459 | ? | 544,410,236 |
| ? | ? | ? | ? |
| Total | 922,757,706 | ? | 652,934,732 |
(2) Sale of goods/rendering of services
The Goup
?Nature of transaction
| Nature of transaction | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Sales of goods | 2,846,583 | ? | 45,676,373 |
| Rendering of services | 4,670,427 | ? | 10,166,253 |
| ? | ? | ? | ? |
| Total | 7,517,010 | ? | 55,842,626 |
The Company
| Nature of transaction | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Rendering of services | 4,635,072,473 | ? | 3,864,353,230 |
| Interest income received | 318,036 | ? | 511,825 |
| ? | ? | ? | ? |
| Total | 4,635,390,509 | ? | 3,864,865,055 |
(3) Leases
(a) As the lessor
The Group
?Type of assets leased
| Type of assets leased | Lease income recognized in 2019 | ? | Lease income recognized in 2018 |
| ? | ? | ? | ? |
| Investment properties | 1,176,283 | ? | 2,485,506 |
The Company
?
Type of assets leased
| Type of assets leased | Lease income recognized in 2019 | ? | Lease income recognized in 2018 |
| ? | ? | ? | ? |
| Investment properties | 63,700,904 | ? | 17,972,397 |
(b) As the lessee
The Group
?Type of assets leased
| Type of assets leased | Lease expense recognized in 2019 | ? | Lease expense recognized in 2018 |
| ? | ? | ? | ? |
| Fixed assets | 3,082,942 | ? | 2,441,711 |
The Company
| Type of assets leased | Lease expense recognized in 2019 | ? | Lease expense recognized in 2018 |
| ? | ? | ? | ? |
| Fixed assets | - | ? | 1,936,219 |
(4) Funding from related party
The Company
?Name of related party
| Name of related party | Amount of funding | ? | Inception date | ? | Maturity date |
| ? | ? | ? | ? | ? | ? |
| Funds from | ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? | ? |
| Subsidiary of the parent company | 500,000,000 | ? | 28/05/2019 | ? | 31/12/2020 |
| Subsidiary of the parent company | 500,000,000 | ? | 13/09/2015 | ? | Non-fixed term |
| Subsidiary of the parent company | 2,000,000,000 | ? | 09/06/2017 | ? | 31/12/2020 |
| Subsidiary of the parent company | 700,000,000 | ? | 13/04/2018 | ? | 31/12/2020 |
| Subsidiary of the parent company | 1,600,000,000 | ? | 27/05/2019 | ? | 31/12/2020 |
| Subsidiary of the parent company | 1,200,000,000 | ? | 30/09/2015 | ? | Non-fixed term |
| Subsidiary of the parent company | 650,000,000 | ? | 25/04/2018 | ? | 31/12/2020 |
| Subsidiary of the parent company | 3,500,000,000 | ? | 01/08/2018 | ? | 01/08/2023 |
| Subsidiary of the parent company | 1,500,000,000 | ? | 24/05/2019 | ? | 31/12/2020 |
| Subsidiary of the parent company | 200,000,000 | ? | 28/07/2017 | ? | 31/12/2020 |
| Subsidiary of the parent company | 1,600,000,000 | ? | 04/12/2017 | ? | 31/12/2020 |
| Subsidiary of the parent company | 3,800,000,000 | ? | 19/07/2018 | ? | 19/07/2023 |
| Subsidiary of the parent company | 800,000,000 | ? | 26/07/2019 | ? | 31/12/2020 |
| Subsidiary of the parent company | 4,000,000,000 | ? | 09/06/2017 | ? | 31/12/2020 |
| Subsidiary of the parent company | 1,000,000,000 | ? | 23/12/2016 | ? | 31/12/2020 |
| Subsidiary of the parent company | 3,000,000,000 | ? | 27/04/2018 | ? | 31/12/2020 |
| Subsidiary of the parent company | 2,370,579,024 | ? | 31/08/2018 | ? | 19/12/2023 |
| Subsidiary of the parent company | 3,000,000,000 | ? | 28/05/2018 | ? | 28/05/2023 |
| Subsidiary of the parent company | 1,200,000,000 | ? | 21/05/2019 | ? | 31/12/2020 |
| Name of related party | Amount of funding | ? | Inception date | ? | Maturity date |
| ? | ? | ? | ? | ? | ? |
| Funds to | ? | ? | ? | ? | ? |
| ? | ? | ? | ? | ? | ? |
| Subsidiary of the parent company | 50,000,000 | ? | 27/03/2015 | ? | 26/12/2021 |
| Subsidiary of the parent company | 30,000,000 | ? | 21/01/2016 | ? | 21/01/2022 |
| Subsidiary of the parent company | 5,000,000 | ? | 19/08/2016 | ? | Non-fixed term |
| Subsidiary of the parent company | 2,000,000 | ? | 16/12/2016 | ? | Non-fixed term |
| Subsidiary of the parent company | 100,000,000 | ? | 13/12/2019 | ? | 13/12/2022 |
| Subsidiary of the parent company | 150,000,000 | ? | 20/12/2019 | ? | 19/12/2022 |
| Subsidiary of the parent company | 100,000,000 | ? | 24/12/2019 | ? | 24/12/2022 |
| Subsidiary of the parent company | 50,000,000 | ? | 13/12/2019 | ? | 13/12/2022 |
| Subsidiary of the parent company | 800,000,000 | ? | 17/12/2019 | ? | 17/12/2022 |
| Subsidiary of the parent company | 550,000,000 | ? | 20/12/2019 | ? | 19/12/2022 |
| Subsidiary of the parent company | 100,000,000 | ? | 20/12/2019 | ? | 19/12/2022 |
| Subsidiary of the parent company | 100,000,000 | ? | 24/12/2019 | ? | 24/12/2022 |
| Subsidiary of the parent company | 250,000,000 | ? | 13/12/2019 | ? | 13/12/2022 |
| Subsidiary of the parent company | 350,000,000 | ? | 20/12/2019 | ? | 19/12/2022 |
| Subsidiary of the parent company | 100,000,000 | ? | 20/12/2019 | ? | 19/12/2022 |
| Subsidiary of the parent company | 50,000,000 | ? | 24/12/2019 | ? | 24/12/2022 |
| Subsidiary of the parent company | 150,000,000 | ? | 25/12/2019 | ? | 17/12/2022 |
| Subsidiary of the parent company | 400,000,000 | ? | 13/12/2019 | ? | 13/12/2022 |
| Subsidiary of the parent company | 120,000,000 | ? | 24/12/2019 | ? | 17/12/2022 |
| Subsidiary of the parent company | 180,000,000 | ? | 24/12/2019 | ? | 24/12/2022 |
(5) Remuneration of key management personnel
The Group and the Company
?Item
| Item | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Remuneration of key management personnel | 49,799,000 | ? | 65,765,000 |
6 Receivables from and payables to related parties
Receivables from related parties
The Group
?
?
| ? | 2019 | ? | 2018 | ||||
| Item | Book value | ? | Provision for bad and doubtful debts | ? | Book value | ? | Provision for bad and doubtful debts |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Accounts receivable | 1,960,247 | ? | - | ? | 52,246 | ? | - |
| Prepayments | 2,259,308 | ? | - | ? | 2,814,000 | ? | - |
| Other receivables | 603,515 | ? | - | ? | 12,148 | ? | - |
The Company
| ? | 2019 | ? | 2018 | ||||
| Item | Book value | ? | Provision for bad and doubtful debts | ? | Book value | ? | Provision for bad and doubtful debts |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Accounts receivable | 659,753,039 | ? | 14,979,329 | ? | 36,108,800 | ? | 473,228 |
| Prepayments | 833,053 | ? | - | ? | 79,660 | ? | - |
| Dividends receivable | 941,634,611 | ? | - | ? | 14,115,915 | ? | - |
| Other receivables | 3,889,934,009 | ? | 41,038,073 | ? | 1,967,828,693 | ? | - |
| Other non-current assets | 156,920,400 | ? | - | ? | 280,000,000 | ? | - |
| Non-current assets due within one year | - | ? | - | ? | 450,000,000 | ? | - |
Payables to related parties
The Group
?Item
| Item | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Accounts payable | ? | 77,847,042 | ? | 30,361,810 |
| Advance payments received | ? | 60,990 | ? | 1,111 |
| Other payables | ? | 166,424,203 | ? | 294,554,788 |
The Company
?Item
| Item | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Accounts payable | ? | 1,093,063 | ? | 3,119,036 |
| Advance payments received | ? | 2,108,152,470 | ? | 1,563,300,806 |
| Other payables | ? | 4,739,212,844 | ? | 7,690,814,090 |
| Other non-current liabilities | ? | 33,297,240,830 | ? | 20,954,104,125 |
7 Commitments of the related parties
As at balance sheet date, the commitments of the related parties, which are signed but not listed in financial statement are asfollowing:
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Procurement of equipment | ? | 133,794,504 | ? | 370,768,209 |
X. Capital management
The Group’s primary objectives when managing capital are to safeguard its ability to continue as a going concern, so that itcan continue to provide returns for shareholders, by pricing products and services commensurately with the level of risk andby securing access to finance at a reasonable cost.
The Group defines “capital” as including all components of equity, less unaccrued proposed dividends. The balances ofrelated party transactions are not regarded by the Group as capital.
The Group’s capital structure is regularly reviewed and managed to achieve an optimal structure and return for shareholders.Factors for the Group’s consideration include: its future funding requirements, capital efficiency, actual and expectedprofitability, expected cash flows, and expected capital expenditure. Adjustments are made to the capital structure in light ofchanges in economic conditions affecting the Group.
The Group’s capital structure is monitored on the basis of an adjusted net debt-to-capital ratio (total liabilities divided by totalassets). The capital management strategies exerted by the Group remained unchanged from 2018. In order to maintain oradjust the ratio, the Group may adjust the amount of dividends paid to shareholders, request new loans, issue new shares, orsell assets to reduce debt.
As at 31 December 2019 and 31 December 2018, the Group’s asset-liability ratios are as follows:
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Asset-liability ratio | ? | 58.56% | ? | 60.41% |
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
XI. Commitments and contingencies
1 Significant commitments
(1) Capital commitments
?
The Group
| The Group | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Contracts entered into but not performed or partially performed | ? | 59,347,872,614 | ? | 61,515,573,632 |
| Contracts authorized but not entered into | ? | 102,974,551,619 | ? | 84,789,129,465 |
| ? | ? | ? | ? | ? |
| Total | ? | 162,322,424,233 | ? | 146,304,703,097 |
The Group’s contracts authorised but not entered into mainly included the fixed assets that Chongqing Display Technology,Fuzhou BOE Display, Health Investment and Wuhan BOE planned to purchase in subsequent years and project equipmentthat the Group planned to purchase in subsequent years.
| The Company | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Contracts entered into but not performed or partially performed Total | ? | 36,732,291,172 | ? | 39,666,849,756 |
The Company’s contracts entered into but not performed or partially performed mainly included guaranteed investments inChongqing Display Technology, Fuzhou BOE Display, Health Investment and Wuhan BOE.
(2) Operating lease commitments
As at 31 December, the total future minimum lease payments under non-cancellable operating leases of the Group‘sproperties were payable as follows:
?Item
| Item | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Within 1 year (inclusive) | ? | 56,919,248 | ? | 53,187,055 |
| After 1 year but within 2 years (inclusive) | ? | 34,440,482 | ? | 30,220,405 |
| After 2 years but within 3 years (inclusive) | ? | 31,151,809 | ? | 21,345,206 |
| Over 3 years | ? | 61,129,358 | ? | 82,499,050 |
| ? | ? | ? | ? | ? |
| Total | ? | 183,640,897 | ? | 187,251,716 |
As at 31 December 2019, the Company had no significant operating lease commitments.
2 Guarantee
(1) The Group as the guarantor
As at 31 December 2019, the Group did not have guarantees provided for external enterprises.
(2) The Company as the guarantor
On 31 December 2019, Chengdu Optoelectronics used the land use right with the carrying amount of RMB 42,097,694, theconstruction in progress of RMB 14,770,912,709, the machinery and equipment of RMB 13,141,613,512 and its plant andbuildings of RMB 2,392,317,974 as collateral to obtain long-term loans of USD 712,000,000 and RMB 14,000,000,000, theCompany provides joint and several liability guarantee for the above loans. In addition, the Company also provides joint andseveral liability guarantee for the letter of credit issued but not accepted of USD 15,294,879 and JPY 569,940,000 and thelong-term guarantee letter of issued but not accepted of RMB 1,719,500,000.
On 31 December 2019, Yuansheng Optoelectronics used its plant and buildings with the carrying amount of RMB2,267,182,300, machinery and equipment of RMB 11,205,995,635 and the land use right of RMB 46,724,309 as collateral toobtain long-term loans of RMB 3,600,000,000, the Company provides joint and several liability guarantee for the aboveloans.
On 31 December 2019, Hefei Xinsheng used the land use right with the carrying amount of RMB 116,727,860, its plant andbuildings of RMB 3,551,280,865 and its equipment of RMB 5,497,655,251 as collateral to obtain long-term loans due within1 year of USD 418,260,000 and the long-term loans of USD 402,180,000, the Company provides joint and several liabilityguarantee for the above loans.
On 31 December 2019, Chongqing BOE Display used the land use right with the carrying amount of RMB 135,431,145 andits machineries and buildings of RMB 12,220,493,020 as collateral, and also used its deposit receipt of USD 7,500,000 aspledge to obtain long-term loans of USD 952,030,000 and RMB 637,300,000, the Company provides joint and severalliability guarantee for the above loans.
On 31 December 2019, Fuzhou BOE used the land use right with the carrying amount of RMB 211,688,367, the machineryand equipment of RMB 13,674,922,143 and the construction in progress of RMB 264,633,031 as collateral to obtainlong-term loans of USD 933,000,000 and RMB 5,250,670,000, the Company provides joint and several liability guarantee forthe above loans. In addition, the Company also provides joint and several liability guarantee for the long-term letter ofguarantee issued but not accepted of RMB 1,320,000,000.
On 31 December 2019, Hefei Display Technology used the land use right with the carrying amount of RMB 293,021,262, theplant and buildings of RMB 4,342,039,221 and machinery and equipment of RMB 21,939,732,132 as collateral to obtainlong-term loans of USD 1,470,800,000 and RMB 5,001,721,200, the Company provides joint and several liability guaranteefor the above loans. In addition, the Company also provides joint and several liability guarantee for the letter of credit issuedbut not accepted of JPY 2,729,040,000.
On 31 December 2019, Mianyang BOE used the land use right with the carrying amount of RMB 392,595,952, the plant andbuildings of RMB 472,566,951, the machinery and equipment of RMB 146,684,699 and the construction in progress of RMB25,199,606,849 as collateral to obtain long-term loans of USD 385,000,000 and RMB 12,300,000,000, the company providesjoint and several liability guarantee for the above loans. In addition, the company also provides joint and several liabilityguarantee for the letter of credit issued but not accepted of USD 164,363,778 and JPY 311,570,000 and the long-term letter ofguarantee issued but not accepted of RMB 1,800,000,000.
On 31 December 2019, Wuhan BOE used the machinery and equipment with the carrying amount of RMB 160,883,379, theland use right of RMB 260,167,834 and the construction in progress of RMB 16,530,866,018 as collateral to obtain long-termloans of USD 330,000,000 and RMB 4,000,000,000, the Company provides joint and several liability guarantee for the aboveloans. In addition, the Company also provides joint and several liability guarantee for the letter of credit issued but notaccepted of USD 114,956,888 and JPY 9,515,590,800.
XII. Subsequent events
On 28 February 2020, the Company has completed the public issuance of corporate bonds (first phase) (plague preventionbonds) to qualified investors, the short name of the bond is “20BOEY1”, with a total of RMB 2 billion, and the nominalinterest rate is 3.64%.
On 19 March 2020, the Company has completed the public issuance of corporate bonds (second phase) (plague preventionbonds) to qualified investors, the short name of the bond is “20BOEY2”, with a total of RMB 2 billion, and the nominalinterest rate is 3.54%.
Both ‘20BOEY1’ and ‘20BOEY2’ have 3 interest-bearing years as a cycle. At the end of each cycle, the Company has theright to extend the bond period by 1 cycle (i.e. 3 years) or choose to fully pay the bond at the end of the cycle. The nominalinterest rate of the bond is fixed in the first period, and then resets every period thereafter. The nominal interest rate in thefirst period is the initial benchmark rate plus the initial spread, and the nominal interest rate in the subsequent period isadjusted to the current benchmark rate plus the initial spread plus 300 basis points. Therefore, when the Company exercisesthe renewal option, the nominal interest rate will increase sharply, and the corresponding nominal interest will also increasesignificantly. Both ‘20BOEY1’ and ‘20BOEY2’ set the right for the issuers to delay the payment of interest. At every interestpayment day, the Company can choose to delay the current interest to next interest payment day along with the accumulatedinterests delayed under this term, with no restrictions to how many times interests have been delayed, unless mandatoryinterest payment event is triggered (including dividends-payment to oridinary shareholders or reducing registered capital).The Company classified the bonds to other equity instruments at the total issuing amount lessing the related transaction feesas these bonds don not meet the definition of financial liabilities.
On 22 April 2020, the Company announced that they are planning to issue to qualified investors the corporate bonds (thirdphase) (plague prevention bonds), the short name of the bond is “20BOEY3”, with a total of no more than RMB 2 billion, theissue is now in progress.
XIII. Segment reporting
(1) Segment reporting considerations
The Group management reviews the operation performance and allocates resources according to the business segmentsbelow.
(a) Display and Sensor Devices — This business mainly leading the innovation and
development of TFT-LCD technologies, has been committed to speeding up thedevelopment of AMOLED, flexible display, VR/AR and other new display devices andsensors, promoting the development of gene sequencing, molecular antenna, multi-signsensor, photoelectric sensing, fingerprint identification and security, and upgradinginformation exchange ports and related sensors on the basis of the display, so as tooffer better products and services in smart phones, tablet PCs, laptops, displays,televisions, industrial control, health care, VR/AR and other applications.
(b) Smart systems — This business mainly expanding its business in digital art exhibition,
supermarket retailing services, financial retailing services, smart equipment design andmanufacturing services, photovoltaic facilities construction and operation &maintenance, vehicle-based display and Internet of Vehicles (IoV). It provides smartsolutions for smart retailing, smart manufacturing services, smart energy and smartInternet of Vehicles.
(c) Healthcare service — This business mainly dedicate to integrate the accumulated four
core technologies - display, sensor, artificial intelligence and large data with medicaland life science, leading to the integration of medical-manufacturing innovation, buildingthe innovation platform including artificial intelligence, life data detection, cellengineering, medical technology innovation transformation, focusing on thedevelopment of mobile health, digital hospitals, regenerative medicine and health park
four business, providing intelligent port products and professional services for humanhealth.
(d) Others — Other service mainly includes technical development service and patent
maintenance service.
The main reason to separate the segments is that the Group independently manages the port devices business, thesmart IoT business, and healthcare service businesses and other businesses. Because the business segmentsmanufacture and distribute different products, apply different manufacturing processes and specifies in gross profit,the business segments are managed independently. The management evaluates the performance and allocatesresources according to the profit of each business segment and does not take financing cost and investment incomeinto account.
(2) Accounting policy for the measurements of segment profit or loss, assets and liabilities
For the purposes of assessing segment performance and allocating resources between segments, the Group’s managementregularly reviews the assets, liabilities, revenue, expenses and financial performance, attributable to each reportable segmenton the following bases:
Segment assets include all tangible, intangible, other non-current and current assets, such as accounts receivable, with theexception of deferred tax assets and other unallocated corporate assets. Segment liabilities include payables, bank borrowingsand other long-term liabilities attributable to the individual segments, but exclude deferred tax liabilities and otherunallocated corporate liabilities.
Segment financial performance is operating income (including operating income from external customers and inter-segmentoperating income) after deducting expenses, depreciation, amortisation, impairment losses, gains or losses from changes infair value, investment gain, non-operating income and expenses and income tax expenses attributable to the individualsegments. The transfer pricing of inter-segment sales are determined with reference to prices charged to external parties forsimilar orders.
| 2019 | |||||||||||||
| Port devices business | ? | Smart IoT business | ? | Healthcare business | ? | Others | ? | Elimination | ? | Remaining items? | ? | Total | |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | |
| Operating income | 106,482,397,172 | 16,730,993,983 | 1,357,484,751 | 5,262,960,973 | (13,774,246,715) | - | 116,059,590,164 | ||||||
| Including: Operating income from external customers | 100,778,601,586 | 13,935,054,419 | 1,345,934,159 | - | - | - | 116,059,590,164 | ||||||
| Inter-segment operating income | 5,703,795,586 | 2,795,939,564 | 11,550,592 | 5,262,960,973 | (13,774,246,715) | - | - | ||||||
| Operating cost | 108,008,780,569 | 16,594,242,232 | 1,123,629,522 | 3,785,333,911 | (13,733,637,535) | (117,427,516) | 115,660,921,183 | ||||||
| Operating profit/(loss) | (1,526,383,397) | 136,751,751 | 233,855,229 | 1,477,627,062 | (40,609,180) | 117,427,516 | 398,668,981 | ||||||
| Total profit/(loss) | (1,393,005,461) | 104,921,003 | 242,071,137 | 1,472,945,085 | (40,609,179) | 117,427,516 | 503,750,101 | ||||||
| Income tax expense | 380,914,122 | 8,143,666 | 135,651,930 | 230,811,042 | 224,470,744 | - | 979,991,504 | ||||||
| Net profit/(Net loss) | (1,773,919,583) | 96,777,337 | 106,419,207 | 1,242,134,043 | (265,079,923) | 117,427,516 | (476,241,403) | ||||||
| ? | |||||||||||||
| Total assets | 350,305,878,604 | 19,415,889,134 | 5,441,026,033 | 173,127,013,027 | (208,125,757,251) | 248,153,761 | 340,412,203,308 | ||||||
| Total liabilities | 148,276,976,000 | 9,552,989,323 | 1,818,817,378 | 123,295,513,891 | (85,041,615,615) | 1,451,825,357 | 199,354,506,334 | ||||||
| ? | |||||||||||||
| Other items: | |||||||||||||
| - Impairment losses for the current period | 2,000,077,299 | 343,287,595 | 97,024 | 272,721,340 | (32,000,000) | - | 2,584,183,258 | ||||||
| - Depreciation and amortization expenses | 18,470,214,433 | 542,273,031 | 162,767,435 | 407,624,581 | (413,244,169) | - | 19,169,635,311 | ||||||
| - Long-term equity investments in associates | - | - | - | 2,718,037,934 | - | - | 2,718,037,934 | ||||||
| - Capital outlay | 45,706,204,449 | 1,945,555,530 | 1,388,008,828 | 1,448,025,153 | (264,404,946) | - | 50,223,389,014 | ||||||
| - Losses from investment in associates and joint ventures | - | - | - | 200,020,686 | - | - | 200,020,686 | ||||||
| - Net interest expenses | 2,015,878,182 | 251,235,580 | 28,042,780 | 468,441,166 | - | (155,827,999) | 2,607,769,709 | ||||||
| 2018 | |||||||||||||
| Port devices business | ? | Smart IoT business | ? | Healthcare business | ? | Others | ? | Elimination | ? | Remaining items | ? | Total | |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | |
| Operating income | 86,688,426,362 | ? | 17,499,500,352 | ? | 1,151,844,468 | ? | 3,569,024,583 | ? | (11,799,930,830) | ? | - | ? | 97,108,864,935 |
| Including: Operating income from external customers | 81,265,815,692 | ? | 14,734,461,467 | ? | 1,108,587,776 | ? | - | ? | - | ? | - | ? | 97,108,864,935 |
| Inter-segment operating income | 5,422,610,670 | ? | 2,765,038,885 | ? | 43,256,692 | ? | 3,569,024,583 | ? | (11,799,930,830) | ? | - | ? | - |
| Operating cost | 83,077,714,485 | ? | 17,397,663,021 | ? | 862,984,461 | ? | 2,197,359,466 | ? | (11,483,372,588) | ? | 1,048,345,187 | ? | 93,100,694,032 |
| Operating profit/(loss) | 3,610,711,877 | ? | 101,837,331 | ? | 288,860,007 | ? | 1,371,665,117 | ? | (316,558,242) | ? | (1,048,345,187) | ? | 4,008,170,903 |
| Total profit/(loss) | 3,718,100,703 | ? | 106,837,228 | ? | 296,075,661 | ? | 1,366,180,004 | ? | (316,558,242) | ? | (1,048,345,187) | ? | 4,122,290,167 |
| Income tax expense | 624,917,163 | ? | 16,151,805 | ? | 90,102,577 | ? | 234,879,588 | ? | 276,364,961 | ? | - | ? | 1,242,416,094 |
| Net profit/(Net loss) | 3,093,183,540 | ? | 90,685,423 | ? | 205,973,084 | ? | 1,131,300,416 | ? | (592,923,203) | ? | (1,048,345,187) | ? | 2,879,874,073 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total assets | 306,849,853,351 | ? | 21,967,564,757 | ? | 5,852,144,685 | ? | 151,623,442,496 | ? | (182,516,887,526) | ? | 252,373,622 | ? | 304,028,491,385 |
| Total liabilities | 122,453,918,956 | ? | 13,679,315,017 | ? | 2,384,123,956 | ? | 103,650,272,046 | ? | (59,915,809,696) | ? | 1,419,373,545 | ? | 183,671,193,824 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Other items: | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| - Impairment losses for the current period | 1,198,177,937 | ? | 39,528,417 | ? | 1,882,409 | ? | - | ? | - | ? | - | ? | 1,239,588,763 |
| - Depreciation and amortization expenses | 13,511,852,315 | ? | 507,380,278 | ? | 92,219,472 | ? | 238,099,764 | ? | (156,607,616) | ? | - | ? | 14,192,944,213 |
| - Long-term equity investments in associates | - | ? | - | ? | - | ? | 2,389,166,886 | ? | - | ? | - | ? | 2,389,166,886 |
| - Capital outlay | 55,330,404,250 | ? | 1,672,461,272 | ? | 815,566,097 | ? | 232,876,486 | ? | (283,237,527) | ? | - | ? | 57,768,070,578 |
| - Losses from investment in associates and joint ventures | - | ? | - | ? | - | ? | (13,925,731) | ? | - | ? | - | ? | (13,925,731) |
| - Net interest expenses | 2,409,003,425 | ? | 161,469,304 | ? | 9,616,358 | ? | 197,583,788 | ? | - | ? | 623,009,190 | ? | 3,400,682,065 |
(3) Secondary segment reporting (regional segments)
(a) The geographical information is based on the location of customers receiving services
or goods.
The information of the Group’s external transactions based by locations is as follows:
| ? | ? | Operating income from external customers | ||
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Chinese mainland | ? | 59,444,025,767 | ? | 42,942,349,994 |
| Other Asian countries and regions | ? | 45,030,859,656 | ? | 44,256,356,951 |
| Europe | ? | 4,511,337,220 | ? | 3,488,264,284 |
| America | ? | 6,911,922,720 | ? | 6,354,884,816 |
| Other regions | ? | 161,444,801 | ? | 67,008,890 |
| ? | ? | ? | ? | ? |
| Total | ? | 116,059,590,164 | ? | 97,108,864,935 |
(b) Divided based on asset locations
The geographical location of the specified non-current assets is based on the physical location of the asset, in the caseof fixed assets; the location of the operation to which they are allocated, in the case of intangible assets and goodwill;and the location of operations, in the case of interests in associates and jointly controlled enterprises. Most of thenon-current assets in the Group are located in Chinese mainland.
(4) Major customers
Operating income of Display and Sensor Devices from which is over 10% of the Group’s total operating income ended upwith two customers. The operating income from these customers represented RMB 30,980,334,746 (2018: RMB16,287,833,781), which was approximately 27% (2018: 17%) of the Group’s total operating income.
XIV. Notes of financial statements of the Company
1 Cash at bank and on hand
| ? | 2019 | ? | 2018 | ||||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents | ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Cash on hand: | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| RMB | ? | ? | ? | ? | - | ? | ? | ? | ? | ? | 339 |
| USD | 5 | ? | 6.9762 | ? | 35 | ? | 5 | ? | 6.8632 | ? | 34 |
| HKD | 165 | ? | 0.8958 | ? | 148 | ? | 165 | ? | 0.8762 | ? | 145 |
| JPY | 51,325 | ? | 0.0641 | ? | 3,290 | ? | 51,325 | ? | 0.0619 | ? | 3,176 |
| KRW | 420,000 | ? | 0.0060 | ? | 2,520 | ? | 420,000 | ? | 0.0061 | ? | 2,562 |
| Other foreign currencies | ? | ? | ? | ? | 16,943 | ? | ? | ? | ? | ? | 16,337 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | ? | ? | ? | 22,936 | ? | ? | ? | ? | ? | 22,593 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Bank deposits: | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| RMB | ? | ? | ? | ? | 1,355,519,593 | ? | ? | ? | ? | ? | 1,333,209,249 |
| USD | 333,055,313 | ? | 6.9762 | ? | 2,323,460,475 | ? | 363,428,749 | ? | 6.8632 | ? | 2,494,284,193 |
| HKD | 1,972,588 | ? | 0.8958 | ? | 1,767,044 | ? | 2,622,706 | ? | 0.8762 | ? | 2,298,015 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | ? | ? | ? | 3,680,747,112 | ? | ? | ? | ? | ? | 3,829,791,457 |
| ? | |||||||||||
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | ? | 3,680,770,048 | ? | ? | ? | ? | ? | 3,829,814,050 |
Including: Total overseas deposits were equivalent to RMB 161,168 (2018: RMB 158,521).
2 Accounts receivable
(1) The Company’s accounts receivable by customer type:
??
| ? | ? | 31 December 2019 | ? | 1 January 2019 | ? | 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? |
| Amounts due from subsidiaries | ? | 659,753,039 | ? | 36,108,800 | ? | 36,108,800 |
| Amounts due from other customers | ? | 7,044,176 | ? | 3,733,689 | ? | 3,733,689 |
| ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | 666,797,215 | ? | 39,842,489 | ? | 39,842,489 |
| ? | ? | ? | ? | ? | ? | ? |
| Less: Provision for bad and doubtful debts | ? | 20,264,100 | ? | 2,889,866 | ? | 2,889,866 |
| ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 646,533,115 | ? | 36,952,623 | ? | 36,952,623 |
(2) The ageing analysis of accounts receivable is as follows:
| Ageing | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Within 1 year (inclusive) | ? | 646,534,878 | ? | 3,889,195 |
| 1 to 2 years (inclusive) | ? | 2,866,370 | ? | - |
| 2 to 3 years (inclusive) | ? | - | ? | - |
| Over 3 years | ? | 17,395,967 | ? | 35,953,294 |
| ? | ? | ? | ? | ? |
| Sub-total | ? | 666,797,215 | ? | 39,842,489 |
| ? | ? | ? | ? | ? |
| Less: Provision for bad and doubtful debts | ? | 20,264,100 | ? | 2,889,866 |
| ? | ? | ? | ? | ? |
| Total | ? | 646,533,115 | ? | 36,952,623 |
The ageing is counted starting from the date when accounts receivable are recognised.
(3) Accounts receivable by category
??
| ? | ? | 2019 | ||||||||
| ? | ? | Book value | ? | Provision for bad and doubtful debts | ? | ? | ||||
| Category | ? | Amount | ? | Percentage (%) | ? | Amount | ? | Percentage (%) | ? | Carrying amount |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Individual assessment | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| - Customers with high credit risk | ? | 5,283,008 | ? | 1% | ? | 5,283,008 | ? | 100% | ? | - |
| - Customers with low credit risk | ? | 660,348,948 | ? | 99% | ? | 14,979,329 | ? | 2% | ? | 645,369,619 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Collective assessment | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| - Customers with moderate credit risk | ? | 1,165,259 | ? | - | ? | 1,763 | ? | - | ? | 1,163,496 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 666,797,215 | ? | 100% | ? | 20,264,100 | ? | 3% | ? | 646,533,115 |
??
| ? | ? | 2018 | ||||||||
| ? | ? | Book value | ? | Provision for bad and doubtful debts | ? | ? | ||||
| Category | ? | Amount | ? | Percentage (%) | ? | Amount | ? | Percentage (%) | ? | Carrying amount |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Accounts receivables that are collectively assessed for impairment based on credit risk characteristics | ? | 2,416,638 | ? | 6% | ? | 2,416,638 | ? | 100% | ? | - |
| Individually insignificant but assessed for impairment individually | ? | 37,425,851 | ? | 94% | ? | 473,228 | ? | 1% | ? | 36,952,623 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| ? | ? | 39,842,489 | ? | 100% | ? | 2,889,866 | ? | 7% | ? | 36,952,623 |
(4) Additions and recoveries of provision for bad and doubtful debts during the year:
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Balance under the previous financial instrument standards | ? | 2,889,866 | ? | 2,889,866 |
| Adjustment on initial application of the new financial instrument standards | ? | - | ? | -? |
| Balance at the beginning of the year after adjustment | ? | 2,889,866 | ? | 2,889,866 |
| Charge during the year | ? | 17,416,444 | ? | - |
| Written-off during the year | ? | 42,210 | ? | - |
| ? | ? | ? | ? | ? |
| Balance at the end of the year | ? | 20,264,100 | ? | 2,889,866 |
For the year ended 31 December 2019, the Company had no individually significant write-off or recovery of doubtful debtswhich had been fully or substantially made in prior years.
(5) Five largest accounts receivable by debtor at the end of the year
The five largest accounts receivable of the Company amounted to RMB 535,748,206, amounting to 80% of the total accountsreceivable at the end of the year, and no provisions for bad and doubtful debts were made at the end of the year.
3 Other receivables
??
| ? | Note | 31 December 2019 | ? | 1 January 2019 | ? | 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? |
| Interest receivable | ? | 11,884,080 | ? | 9,659,279 | ? | 9,659,279 |
| Dividends receivable | (1) | 941,634,611 | ? | 14,115,915 | ? | 14,115,915 |
| Others | (2) | 3,873,879,403 | ? | 1,992,053,266 | ? | 1,992,053,266 |
| ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 4,827,398,094 | ? | 2,015,828,460 | ? | 2,015,828,460 |
(1) Dividends receivable
??
| ? | ? | 31 December 2019 | ? | 1 January 2019 | ? | 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? |
| Yinghe Century | ? | 572,694,778 | ? | 8,204,147 | ? | 8,204,147 |
| Hefei BOE | ? | 350,000,000 | ? | - | ? | - |
| Beijing BOE Land Co., Ltd. | ? | 18,939,833 | ? | - | ? | - |
| Vacuum Electronics | ? | - | ? | 2,200,000 | ? | 2,200,000 |
| Beijing Electronics Zone Investment and Development Co., Ltd. | ? | - | ? | 3,711,768 | ? | 3,711,768 |
| ? | ? | ? | ? | ? | ? | ? |
| Balance at the end of the year | ? | 941,634,611 | ? | 14,115,915 | ? | 14,115,915 |
(2) Others
(a) The Company’s other receivables by customer type:
| Customer type | ? | 31 December 2019 | ? | 1 January 2019 | ? | 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? |
| Amounts due from subsidiaries | ? | 3,889,330,494 | ? | 1,967,828,693 | ? | 1,967,828,693 |
| Amounts due from other related parties | ? | 603,515 | ? | - | ? | - |
| Amounts due from other customers | ? | 28,545,610 | ? | 24,224,573 | ? | 24,224,573 |
| ? | ? | ? | ? | |||
| Sub-total | ? | 3,918,479,619 | ? | 1,992,053,266 | ? | 1,992,053,266 |
| ? | ? | ? | ? | ? | ? | ? |
| Less: Provision for bad and doubtful debts | ? | 44,600,216 | ? | - | ? | -? |
| ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 3,873,879,403 | ? | 1,992,053,266 | ? | 1,992,053,266 |
(b) The Company’s other receivables by currency:
??
| ? | 2019 | ? | 2018 | ||||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents | ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| RMB | ? | ? | ? | ? | 3,918,456,962 | ? | ? | ? | ? | ? | 1,992,041,781 |
| HKD | 25,293 | ? | 0.8958 | ? | 22,657 | ? | 13,107 | ? | 0.8762 | ? | 11,485 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | ? | ? | ? | ? | 3,918,479,619 | ? | ? | ? | ? | ? | 1,992,053,266 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Less: Provision for bad and doubtful debts | ? | ? | ? | ? | 44,600,216 | ? | ? | ? | ? | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | ? | 3,873,879,403 | ? | ? | ? | ? | ? | 1,992,053,266 |
(c) The ageing analysis of other receivables of the Company is as follows:
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Within 1 year (inclusive) | ? | 3,722,971,295 | ? | 1,649,255,313 |
| 1 to 2 years (inclusive) | ? | 59,484,488 | ? | 94,152,814 |
| 2 to 3 years (inclusive) | ? | 56,743,629 | ? | 11,422,640 |
| Over 3 years | ? | 79,280,207 | ? | 237,222,499 |
| ? | ? | ? | ? | ? |
| Sub-total | ? | 3,918,479,619 | ? | 1,992,053,266 |
| ? | ? | ? | ? | ? |
| Less: Provision for bad and doubtful debts | ? | 44,600,216 | ? | - |
| ? | ? | ? | ? | ? |
| Total | ? | 3,873,879,403 | ? | 1,992,053,266 |
The ageing is counted starting from the date when other receivable are recognised.
(d) Others by method of provisioning
| ? | ? | 2019 | ||||||||
| ? | ? | Book value | ? | Provision for bad and doubtful debts | ? | ? | ||||
| Category | ? | Amount | ? | Percentage (%) | ? | Amount | ? | Percentage (%) | ? | Carrying amount |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Individual assessment | 44,600,216 | 1% | 44,600,216 | 100% | - | |||||
| Collective assessment | ? | 3,873,879,403 | ? | 99% | ? | - | ? | - | ? | 3,873,879,403 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 3,918,479,619 | ? | 100% | ? | 44,600,216 | ? | 1% | ? | 3,873,879,403 |
(e) Movements of provisions for bad and doubtful debts
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Balance under the previous financial instrument standards | ? | - | ? | - |
| Adjustment on initial application of the new financial instrument standards | ? | - | ? | ? |
| Balance at the beginning of the year after adjustment | ? | - | ? | - |
| Charge for the year | ? | 45,142,306 | ? | - |
| Written-off during the year | ? | 542,090 | ? | - |
| ? | ? | ? | ? | ? |
| Balance at the end of the year | ? | 44,600,216 | ? | - |
(d) Other receivables categorized by nature
?
Nature
| Nature | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Transaction amount | ? | 3,889,330,494 | ? | 305,938,861 |
| Rent | ? | - | ? | 227,919,843 |
| Royalty fee | ? | - | ? | 1,441,130,049 |
| Others | ? | 29,149,125 | ? | 17,064,513 |
| ? | ? | ? | ? | ? |
| Sub-total | ? | 3,918,479,619 | ? | 1,992,053,266 |
| ? | ? | ? | ? | ? |
| Less: Provision for bad and doubtful debts | ? | 44,600,216 | ? | - |
| ? | ? | ? | ? | ? |
| Total | ? | 3,873,879,403 | ? | 1,992,053,266 |
(e) Five largest other receivables by debtor at the end of the year
Other receivables at the end of the year due from the top five debtors of the Company amounted to RMB3,681,661,508 in total, most of which are borrowings and royalty fees. No provision is made for bad and doubtfuldebts after assessment.
4 Other current assets
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| VAT on tax credits | ? | 17,011,521 | ? | 1,127,650 |
| Others | ? | 92,486,376 | ? | 46,677,446 |
| ? | ? | ? | ? | ? |
| Total | ? | 109,497,897 | ? | 47,805,096 |
5 Long-term equity investments
(1) The Company’s long-term equity investments by category:
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Investments in subsidiaries | ? | 157,203,548,708 | ? | 141,883,775,023 |
| Investments in associates and joint ventures | ? | 2,278,316,052 | ? | 1,675,958,462 |
| ? | ? | ? | ? | ? |
| Sub-total | ? | 159,481,864,760 | ? | 143,559,733,485 |
| ? | ? | ? | ? | ? |
| Less: Provision for impairment | ? | 92,000,000 | ? | 60,000,000 |
| ? | ? | ? | ? | ? |
| Total | ? | 159,389,864,760 | ? | 143,499,733,485 |
In previous year, the Company provided full impairment losses for investments in its subsidiary, Special Display, whichamounted to RMB 60,000,000. In 2019, the Company provided the impairment provision of RMB 32,000,000 for itssubsidiary – Vacuum Technology.
(2) Investments in subsidiaries:
| Subsidiary | Balance at the beginning of the year | ? | Increase during the year | ? | Decrease during the year | ? | Balance at the end of the year | ? | Balance of provision for impairment at the beginning of the year | ? | Balance of provision for impairment at the end of the year |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Beijing BOE Optoelectronics Technology Co., Ltd. | 4,172,288,084 | ? | - | ? | - | ? | 4,172,288,084 | ? | - | ? | - |
| Chengdu BOE Optoelectronics Technology Co., Ltd. | 19,283,149,991 | ? | 3,420,000,000 | ? | - | ? | 22,703,149,991 | ? | - | ? | - |
| Hefei BOE Optoelectronics Technology Co., Ltd. | 9,000,000,000 | ? | - | ? | - | ? | 9,000,000,000 | ? | - | ? | - |
| Beijing BOE Display Technology Co., Ltd. | 17,418,713,599 | ? | - | ? | - | ? | 17,418,713,599 | ? | - | ? | - |
| Hefei Xinsheng Optoelectronics Technology Co., Ltd. | 16,575,150,000 | ? | 3,507,829,185 | ? | - | ? | 20,082,979,185 | ? | - | ? | - |
| Ordos Yuansheng Optoelectronics Co., Ltd. | 11,804,000,000 | ? | - | ? | - | ? | 11,804,000,000 | ? | - | ? | - |
| Chongqing BOE Optoelectronics Co., Ltd. | 19,565,354,599 | ? | - | ? | - | ? | 19,565,354,599 | ? | - | ? | - |
| Fuzhou BOE Optoelectronics Technology Co., Ltd. | 14,300,042,079 | ? | - | ? | - | ? | 14,300,042,079 | ? | - | ? | - |
| Beijing BOE Vision-electronic Technology Co., Ltd. | 3,020,000,000 | ? | 845,344,500 | ? | - | ? | 3,865,344,500 | ? | - | ? | - |
| Beijing BOE Vacuum Electronics Co., Ltd. | 19,250,000 | ? | - | ? | - | ? | 19,250,000 | ? | - | ? | - |
| Beijing BOE Vacuum Technology Co., Ltd. | 32,000,000 | ? | - | ? | - | ? | 32,000,000 | ? | - | ? | 32,000,000 |
| Beijing BOE Special Display Technology Co., Ltd. | 100,000,000 | ? | - | ? | - | ? | 100,000,000 | ? | 60,000,000 | ? | 60,000,000 |
| Beijing Yinghe Century Co., Ltd. | 333,037,433 | ? | - | ? | - | ? | 333,037,433 | ? | - | ? | - |
| BOE Optical Science and Technology Co., Ltd. | 658,961,914 | ? | - | ? | - | ? | 658,961,914 | ? | - | ? | - |
| BOE Hyundai LCD (Beijing) Display Technology Co., Ltd. | 31,038,525 | ? | - | ? | - | ? | 31,038,525 | ? | - | ? | - |
| BOE (Hebei) Mobile Technology Co., Ltd. | 1,353,651,020 | ? | - | ? | - | ? | 1,353,651,020 | ? | - | ? | - |
| Beijing BOE multimedia Technology Co., Ltd. | 400,000,000 | ? | - | ? | - | ? | 400,000,000 | ? | - | ? | - |
| Beijing BOE Energy Technology Co., Ltd. | 850,000,000 | ? | - | ? | - | ? | 850,000,000 | ? | - | ? | - |
| Beijing BOE Life Technology Co., Ltd. | 10,000,000 | ? | - | ? | - | ? | 10,000,000 | ? | - | ? | - |
| Beijing Zhongxiangying Technology Co., Ltd. | 10,000,000 | ? | - | ? | - | ? | 10,000,000 | ? | - | ? | - |
| Erdos Haosheng Energy Investment Co., Ltd. | 2,000,000 | ? | - | ? | (2,000,000) | ? | - | ? | - | ? | - |
| BOE Semi-conductor Co., Ltd. | 9,450,000 | ? | - | ? | - | ? | 9,450,000 | ? | - | ? | - |
| BOE Optoelectronics Holding Co., Ltd. | 2,768,662,024 | ? | - | ? | - | ? | 2,768,662,024 | ? | - | ? | - |
| Beijing Asahi Electronic Materials Co., Ltd. | 30,888,470 | ? | - | ? | - | ? | 30,888,470 | ? | - | ? | - |
| BOE Health Investment & Management Co., Ltd | 1,743,154,069 | ? | 1,210,000,000 | ? | - | ? | 2,953,154,069 | ? | - | ? | - |
| Hefei BOE Display Technology Co., Ltd. | 1,998,765,323 | ? | - | ? | - | ? | 1,998,765,323 | ? | - | ? | - |
| Technology Development | 1,000,000 | ? | - | ? | - | ? | 1,000,000 | ? | - | ? | - |
| BOE smart IOT Technology Co., Ltd | 50,000,000 | ? | 40,670,000 | ? | - | ? | 90,670,000 | ? | - | ? | - |
| Hefei BOE Zhuoyin Technology Co., Ltd. | 600,000,000 | ? | - | ? | - | ? | 600,000,000 | ? | - | ? | - |
| Beijing BOE Land Co., Ltd. | 7,731,474 | ? | - | ? | - | ? | 7,731,474 | ? | - | ? | - |
| Beijing BOE Marketing Co., Ltd. | 30,500,000 | ? | - | ? | - | ? | 30,500,000 | ? | - | ? | - |
| BOE KOREA Co., Ltd. | 788,450 | ? | - | ? | - | ? | 788,450 | ? | - | ? | - |
| Kunming BOE Display Technology Co., Ltd. | 202,800,000 | ? | 467,200,000 | ? | - | ? | 670,000,000 | ? | - | ? | - |
| Mianyang BOE Optoelectronics Technology Co., Ltd. | 13,936,980,083 | ? | 760,000,000 | ? | - | ? | 14,696,980,083 | ? | - | ? | - |
| Sensing Technology | 50,000,000 | ? | - | ? | - | ? | 50,000,000 | ? | - | ? | - |
| Beijing BOE Yiyun Science &Technology Co., Ltd. | 90,000,000 | ? | - | ? | - | ? | 90,000,000 | ? | - | ? | - |
| Wuhan BOE Optoelectronics Technology Co., Ltd. | 1,230,860,516 | ? | 2,933,700,000 | ? | - | ? | 4,164,560,516 | ? | - | ? | - |
| Chongqing BOE Display Technology Co., Ltd. | 193,557,370 | ? | 2,115,300,000 | ? | - | ? | 2,308,857,370 | ? | - | ? | - |
| Fuzhou BOE Display Technology Co., Ltd. | - | ? | 21,730,000 | ? | - | ? | 21,730,000 | ? | - | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 141,883,775,023 | ? | 15,321,773,685 | ? | (2,000,000) | ? | 157,203,548,708 | ? | 60,000,000 | ? | 92,000,000 |
For information about the major subsidiaries of the Company, refer to Note VI. 1.
(3) Investments in associates:
| ? | ? | ? | Movements during the year | ? | ? | ? | |||||||||||
| Investee | Balance at the beginning of the year | ? | Increase in investments | ? | Decrease in investments | ? | Investment income recognized under equity method | ? | Other comprehensive income | ? | Changes in other equity movements | ? | Cash dividends or profit declared | ? | Balance at the end of the year | ? | Balance of provision for impairment at the end of the year |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Beijing Nissin Electronics Precision Component Co., Ltd. | 538,489 | ? | - | ? | - | ? | (1,698,667) | ? | - | ? | 1,643,426 | ? | - | ? | 483,248 | ? | - |
| Beijing Nittan Electronic Co., Ltd. | 61,733,085 | ? | - | ? | - | ? | 6,075,670 | ? | - | ? | - | ? | (3,000,000) | ? | 64,808,755 | ? | - |
| Erdos BOE Energy Investment Co., Ltd. | 9,458,312 | ? | - | ? | - | ? | (110,086) | ? | - | ? | - | ? | - | ? | 9,348,226 | ? | - |
| Beijing Infi-Hailin Venture Investment Co., Ltd. | 435,828 | ? | - | ? | - | ? | 227,387 | ? | - | ? | - | ? | - | ? | 663,215 | ? | - |
| Beijing Infi-Hailin Venture Investment (Limited Partnership) | 82,336,933 | ? | - | ? | (10,000,000) | ? | (14,927,922) | ? | 16,975,941 | ? | - | ? | - | ? | 74,384,952 | ? | - |
| TPV Display Technology (China) Limited | 23,001,359 | ? | - | ? | - | ? | 1,544,305 | ? | - | ? | - | ? | - | ? | 24,545,664 | ? | - |
| Beijing Xindongneng Investment Fund (Limited Partnership) | 1,455,174,877 | ? | - | ? | (129,089,011) | ? | 268,474,328 | ? | 349,954,655 | ? | - | ? | - | ? | 1,944,514,849 | ? | - |
| Beijing Xindongneng Investment Management Co., Ltd. | 5,188,862 | ? | - | ? | - | ? | 2,221,199 | ? | - | ? | - | ? | - | ? | 7,410,061 | ? | - |
| Shenzhen Yunyinggu Technology Co., Ltd. | 15,481,506 | ? | - | ? | (10,800,923) | ? | (17,043,172) | ? | - | ? | 25,077,673 | ? | - | ? | 12,715,084 | ? | - |
| Beijing Xloong Technologies Co., Ltd. | 22,609,211 | ? | - | ? | - | ? | (372,167) | ? | - | ? | - | ? | - | ? | 22,237,044 | ? | - |
| Beijing Innovation Industry Investment Co., Ltd | - | ? | 100,000,000 | ? | - | ? | 363,345 | ? | - | ? | - | ? | - | ? | 100,363,345 | ? | - |
| Beijing Electric Control Industry Investment Co., Ltd | - | ? | 17,000,000 | ? | - | ? | (158,391) | ? | - | ? | - | ? | - | ? | 16,841,609 | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 1,675,958,462 | ? | 117,000,000 | ? | (149,889,934) | ? | 244,595,829 | ? | 366,930,596 | ? | 26,721,099 | ? | (3,000,000) | ? | 2,278,316,052 | ? | - |
6 Intangible assets
| ? | Land use rights | ? | Patent and proprietary technology | ? | Computer software | ? | Others | ? | Total |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Book value | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Balance at the beginning of the year | 95,016,083 | ? | 744,014,962 | ? | 216,319,003 | ? | 37,741,956 | ? | 1,093,092,004 |
| Additions during the year | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| - Purchases | 699,922,964 | ? | 359,536,786 | ? | 5,429,461 | ? | 41,788,042 | ? | 1,106,677,253 |
| - Transfers from construction in progress | - | ? | - | ? | 77,517,509 | ? | - | ? | 77,517,509 |
| Other decreases | - | ? | (997,041) | ? | - | ? | - | ? | (997,041) |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Balance at the end of the year | 794,939,047 | ? | 1,102,554,707 | ? | 299,265,973 | ? | 79,529,998 | ? | 2,276,289,725 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Less: Accumulated amortisation | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Balance at the beginning of the year | 26,780,283 | ? | 462,088,390 | ? | 89,534,990 | ? | 501,845 | ? | 578,905,508 |
| Charge during the year | 25,715,225 | ? | 133,757,561 | ? | 44,157,040 | ? | 122,127 | ? | 203,751,953 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Balance at the end of the year | 52,495,508 | ? | 595,845,951 | ? | 133,692,030 | ? | 623,972 | ? | 782,657,461 |
| ? | |||||||||
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Carrying amount | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| At the end of the year | 742,443,539 | ? | 506,708,756 | ? | 165,573,943 | ? | 78,906,026 | ? | 1,493,632,264 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| At the beginning of the year | 68,235,800 | ? | 281,926,572 | ? | 126,784,013 | ? | 37,240,111 | ? | 514,186,496 |
7 Deferred tax assets/deferred tax liabilities
??
| ? | 2019 | ? | 2018 | ||||
| Item | Deductible/ (taxable) temporary differences | ? | Deferred tax assets/(liabilities) | ? | Deductible/ (taxable) temporary differences | ? | Deferred tax assets/(liabilities) |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Deferred tax assets: | ? | ? | ? | ? | ? | ? | ? |
| Provisions for impairment losses of assets | 179,981,612 | ? | 26,997,242 | ? | 342,108,420 | ? | 51,316,263 |
| Changes in fair value of other equity instruments | 135,444,338 | 20,316,651 | |||||
| Depreciation of fixed assets | 111,653,214 | ? | 16,747,982 | ? | 87,117,936 | ? | 13,067,690 |
| Advance payments received | 1,906,248,410 | ? | 285,937,261 | ? | 1,551,798,448 | ? | 232,769,767 |
| Others | 155,622,634 | ? | 23,343,394 | ? | 151,182,178 | ? | 22,677,327 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | 2,488,950,208 | ? | 373,342,530 | ? | 2,132,206,982 | ? | 319,831,047 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Amount offset | ? | ? | (13,074,064) | ? | ? | ? | (29,036,499) |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Balance after offsetting | ? | ? | 360,268,466 | ? | ? | ? | 290,794,548 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Deferred tax liabilities: | ? | ? | ? | ? | ? | ? | ? |
| Interest on debentures | - | ? | - | ? | (71,525,943) | ? | (10,728,891) |
| Others | (87,160,432) | ? | (13,074,064) | ? | (122,050,720) | ? | (18,307,608) |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Sub-total | (87,160,432) | ? | (13,074,064) | ? | (193,576,663) | ? | (29,036,499) |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Amount offset | ? | ? | 13,074,064 | ? | ? | ? | 29,036,499 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Balance after offsetting | ? | ? | - | ? | ? | ? | - |
As at 31 December 2019, the Company estimated that the amount of taxable income is expected to be available in the futureperiod that the deductible temporary differences are reversed, thereby confirming the relevant deferred tax assets.
8 Advances payments received
| Item | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Advances from related parties | ? | 2,108,152,470 | ? | 1,563,300,806 |
| Advances from third parties | ? | 9,416,525 | ? | 13,734,709 |
| ? | ? | ? | ? | ? |
| Total | ? | 2,117,568,995 | ? | 1,577,035,515 |
9 Employee benefits payable
(1) Employee benefits payable:
??
| ? | Note | Balance at 1 January 2019 | ? | Increase during the year | ? | Decrease during the year | ? | Balance at 31 December 2019 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Short-term employee benefits | (2) | 191,160,309 | ? | 912,098,158 | ? | (861,874,008) | ? | 241,384,459 |
| Post-employment benefits | ? | ? | ? | ? | ? | ? | ? | ? |
| - defined contribution plans | (3) | 9,978,952 | ? | 83,250,064 | ? | (82,407,400) | ? | 10,821,616 |
| Termination benefits | ? | - | ? | 2,780,894 | ? | (2,780,894) | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 201,139,261 | ? | 998,129,116 | ? | (947,062,302) | ? | 252,206,075 |
??
| ? | Note | Balance at 1 January 2018 | ? | Increase during the year | ? | Decrease during the year | ? | Balance at 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Short-term employee benefits | (2) | 271,338,126 | ? | 807,603,371 | ? | (887,781,188) | ? | 191,160,309 |
| Post-employment benefits | ? | ? | ? | ? | ? | ? | ? | ? |
| - defined contribution plans | (3) | 11,662,067 | ? | 77,656,828 | ? | (79,339,943) | ? | 9,978,952 |
| Termination benefits | ? | - | ? | 547,277 | ? | (547,277) | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 283,000,193 | ? | 885,807,476 | ? | (967,668,408) | ? | 201,139,261 |
(2) Short-term employee benefits
??
| ? | ? | Balance at 1 January 2019 | ? | Increase during the year | ? | Decrease during the year | ? | Balance at 31 December 2019 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Salaries, bonuses and allowances | ? | 149,498,505 | ? | 664,206,819 | ? | (625,106,651) | ? | 188,598,673 |
| Staff welfare | ? | - | ? | 46,521,914 | ? | (46,521,914) | ? | - |
| Social insurance | ? | ? | ? | ? | ? | ? | ? | ? |
| Medical insurance | ? | 13,027,783 | ? | 44,619,713 | ? | (42,958,955) | ? | 14,688,541 |
| Work-related injury insurance | ? | 939,307 | ? | 2,862,644 | ? | (2,697,062) | ? | 1,104,889 |
| Maternity insurance | ? | 1,445,194 | ? | 3,536,732 | ? | (3,204,200) | ? | 1,777,726 |
| Housing fund | ? | 2,846,017 | ? | 54,005,271 | ? | (52,996,464) | ? | 3,854,824 |
| Labour union fee, staff and workers’ education fee | ? | 23,403,503 | ? | 26,939,926 | ? | (18,983,623) | ? | 31,359,806 |
| Others | ? | - | ? | 69,405,139 | ? | (69,405,139) | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 191,160,309 | ? | 912,098,158 | ? | (861,874,008) | ? | 241,384,459 |
| ? | ? | Balance at 1 January 2018 | ? | Increase during the year | ? | Decrease during the year | ? | Balance at 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Salaries, bonuses and allowances | ? | 232,610,577 | ? | 622,616,346 | ? | (705,728,418) | ? | 149,498,505 |
| Staff welfare | ? | - | ? | 37,159,393 | ? | (37,159,393) | ? | - |
| Social insurance | ? | ? | ? | ? | ? | ? | ? | ? |
| Medical insurance | ? | 13,533,102 | ? | 36,532,908 | ? | (37,038,227) | ? | 13,027,783 |
| Work-related injury insurance | ? | 963,123 | ? | 2,603,687 | ? | (2,627,503) | ? | 939,307 |
| Maternity insurance | ? | 1,363,607 | ? | 2,921,927 | ? | (2,840,340) | ? | 1,445,194 |
| Housing fund | ? | 3,136,970 | ? | 43,830,388 | ? | (44,121,341) | ? | 2,846,017 |
| Labour union fee, staff and workers’ education fee | ? | 19,730,747 | ? | 29,224,557 | ? | (25,551,801) | ? | 23,403,503 |
| Others | ? | - | ? | 32,714,165 | ? | (32,714,165) | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 271,338,126 | ? | 807,603,371 | ? | (887,781,188) | ? | 191,160,309 |
(3) Post-employment benefits - defined contribution plans
??
| ? | ? | Balance at 1 January 2019 | ? | Increase during the year | ? | Decrease during the year | ? | Balance at 31 December 2019 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Basic pension insurance | ? | 9,772,407 | ? | 73,613,317 | ? | (71,896,321) | ? | 11,489,403 |
| Unemployment insurance | ? | 206,545 | ? | 3,449,922 | ? | (3,354,369) | ? | 302,098 |
| Annuity | ? | - | ? | 6,186,825 | ? | (7,156,710) | ? | (969,885) |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 9,978,952 | ? | 83,250,064 | ? | (82,407,400) | ? | 10,821,616 |
?
?
| ? | ? | Balance at 1 January 2018 | ? | Increase during the year | ? | Decrease during the year | ? | Balance at 31 December 2018 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Basic pension insurance | ? | 11,238,473 | ? | 69,320,207 | ? | (70,786,273) | ? | 9,772,407 |
| Unemployment insurance | ? | 249,227 | ? | 2,917,729 | ? | (2,960,411) | ? | 206,545 |
| Annuity | ? | 174,367 | ? | 5,418,892 | ? | (5,593,259) | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 11,662,067 | ? | 77,656,828 | ? | (79,339,943) | ? | 9,978,952 |
10 Other payables
?
?
| ? | Note | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Interest payable | ? | 95,859,218 | ? | 330,964,989 |
| Dividends payable | ? | 6,451,171 | ? | 6,451,171 |
| Others | (1) | 5,158,160,585 | ? | 7,872,319,930 |
| ? | ? | ? | ? | ? |
| Total | ? | 5,260,470,974 | ? | 8,209,736,090 |
(1) Others
(a) The Company’s other payables by category are as follows:
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Projects, equipment and intangible assets | ? | 345,872,758 | ? | 52,308,258 |
| External agency fee | ? | 18,171,708 | ? | 17,476,002 |
| Transaction amount with subsidiaries | ? | 4,739,139,471 | ? | 7,690,628,499 |
| Others | ? | 54,976,648 | ? | 111,907,171 |
| ? | ? | ? | ? | ? |
| Total | ? | 5,158,160,585 | ? | 7,872,319,930 |
(b) The Company’s other payables by currency:
??
| ? | 2019 | ? | 2018 | ||||||||
| ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents | ? | Amount in original currency | ? | Exchange rate | ? | RMB/ RMB equivalents |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| RMB | ? | ? | ? | ? | 2,257,788,363 | ? | ? | ? | ? | ? | 5,082,657,694 |
| USD | 414,300,937 | ? | 6.9762 | ? | 2,890,246,197 | ? | 406,452,150 | ? | 6.8632 | ? | 2,789,562,393 |
| JPY | 157,972,312? | ? | 0.0641? | ? | 10,126,025 | ? | 1,612,973 | ? | 0.0619 | ? | 99,843 |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | ? | ? | ? | 5,158,160,585 | ? | ? | ? | ? | ? | 7,872,319,930 |
11 Long-term loans
??
| ? | ? | 2019 | ? | 2018 | ||||
| ? | ? | RMB | ? | Credited /collateralised guaranteed /pledged | ? | RMB | ? | Credited /collateralised guaranteed /pledged |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Bank loans | ? | ? | ? | ? | ? | ? | ? | ? |
| - RMB | ? | 38,801,142,361 | ? | Credited | ? | 27,510,000,000 | ? | Credited |
| Less: Long-term loans due within one year | ? | 5,490,440,787 | ? | Credited | ? | 990,000,000 | ? | Credited |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | ? | 33,310,701,574 | ? | ? | ? | 26,520,000,000 | ? | ? |
The interest rate of RMB long-term loans for the Company ranged from 0% to 4.75% in 2019 (2018: 0% to 4.75%).
12 Deferred income
| Item | Balance at the beginning of the year | ? | Increase during the year | ? | Amount included in other income | ? | Balance at the end of the year |
| ? | ? | ? | ? | ? | ? | ? | ? |
| - related to assets | 5,416,944,049 | ? | - | ? | (901,541,269) | ? | 4,515,402,780 |
| - related to income | 107,005,792 | ? | 12,915,866 | ? | (7,931,182) | ? | 111,990,476 |
| ? | ? | ? | ? | ? | ? | ? | ? |
| Total | 5,523,949,841 | ? | 12,915,866 | ? | (909,472,451) | ? | 4,627,393,256 |
13 Capital reserve
?Item
| Item | ? | Share premiums | ? | Other capital reserves | ? | total |
| ? | ? | ? | ? | ? | ? | ? |
| Balance at the beginning of the year | ? | 37,546,517,053 | ? | 44,449,138 | ? | 37,590,966,191 |
| Add: Changes in other equity of investees | ? | - | ? | 26,721,099 | ? | 26,721,099 |
| Less: Disposal of changes in other equity transferred from equity of associate | - | 9,647,605 | 9,647,605 | |||
| ? | ? | ? | ? | ? | ? | ? |
| Balance at the end of the year | ? | 37,546,517,053 | ? | 61,522,632 | ? | 37,608,039,685 |
14 Other comprehensive income
?Item
| Item | Balance at the end of the previous year attributable to shareholders of the Company | ? | Changes in accounting policies | ? | ? | ? | Movements during the year | ? | Balance at the end of the year attributable to shareholders of the Company | ||||
| ? | ? | ? | Balance of other comprehensive income at the beginning of the year after adjustment | ? | Before-tax amount | ? | Less: Income tax expenses | ? | Transfer of other comprehensive income to retained earnings | ? | |||
| Items that will not be reclassified to profit or loss | - | ? | (246,193,654) | ? | (246,193,654) | ? | 402,266,776 | ? | 12,864,994 | ? | 50,430,448 | ? | 193,638,576 |
| Including: Other comprehensive income recognised under equity method | - | ? | (58,164,332) | ? | (58,164,332) | ? | 366,930,596 | ? | - | ? | - | ? | 308,766,264 |
| Changes in fair value of investments in other equity instruments | - | ? | (188,029,322) | ? | (188,029,322) | ? | 35,336,180 | ? | 12,864,994 | ? | 50,430,448 | ? | (115,127,688) |
| Items that may be reclassified to profit or loss | (28,507,585) | ? | 28,507,585 | ? | - | ? | - | ? | - | ? | - | ? | - |
| Including: Other comprehensive income recognised under equity method | (58,164,332) | ? | 58,164,332 | ? | - | ? | - | ? | - | ? | - | ? | - |
| Gains or losses arising from changes in fair value of available-for-sale financial assets | 29,656,747 | ? | (29,656,747) | ? | - | ? | - | ? | - | ? | - | ? | - |
| ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| Total | (28,507,585) | ? | (217,686,069) | ? | (246,193,654) | ? | 402,266,776 | ? | 12,864,994 | ? | 50,430,448 | ? | 193,638,576 |
15 Retained earnings
| Item | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Retained earnings at the beginning of the year (before adjustment) | ? | 2,392,243,713 | ? | 1,765,291,136 |
| Add: Changes in accounting policies | ? | 217,686,069 | ? | - |
| Retained earnings at the beginning of the year (after adjustment) | ? | 2,609,929,782 | ? | 1,765,291,136 |
| Add: Net profits for the year | ? | 3,685,564,456 | ? | 2,629,858,350 |
| Less: Appropriation for statutory surplus reserve | ? | 368,556,446 | ? | 262,985,835 |
| Dividends to ordinary shares | ? | 1,043,951,963 | ? | 1,739,919,938 |
| Interest of holders of other equity instruments | 56,109,589 | - | ||
| Transfer of other comprehensive income to retained earnings | ? | 45,387,401 | ? | - |
| ? | ? | ? | ? | ? |
| Retained earnings at the end of the year | ? | 4,781,488,839 | ? | 2,392,243,713 |
16 Operating income
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Rental income of investment properties | ? | 122,723,329 | ? | 180,927,207 |
| Technology development income | ? | 4,103,362,231 | ? | 3,326,012,588 |
| Others | ? | 559,302,159 | ? | 541,409,893 |
| ? | ? | ? | ? | ? |
| Total | ? | 4,785,387,719 | ? | 4,048,349,688 |
17 Taxes and surcharges
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Property tax | ? | 33,323,560 | ? | 36,681,107 |
| Land use tax | ? | 2,849,332 | ? | 2,864,304 |
| Stamp duty | ? | 4,682,297 | ? | 2,218,487 |
| City maintenance and construction tax | ? | 353,192 | ? | 706,057 |
| Education surcharges and local education surcharges | ? | 252,276 | ? | 343,357 |
| Others | ? | 27,864 | ? | 1,316,562 |
| ? | ? | ? | ? | ? |
| Total | ? | 41,488,521 | ? | 44,129,874 |
18 Research and development costs
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Staff costs | ? | 544,087,165 | ? | 458,279,616 |
| Material expenses | ? | 74,036,997 | ? | 70,658,415 |
| Depreciation and amortisation | ? | 242,794,178 | ? | 186,406,973 |
| Commissioned and cooperative development | ? | 853,951,463 | ? | 103,980,007 |
| Others | ? | 469,881,484 | ? | 428,564,942 |
| ? | ? | ? | ? | ? |
| Total | ? | 2,184,751,287 | ? | 1,247,889,953 |
19 Financial expenses
?
?
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Interest expenses from loans | ? | 934,776,554 | ? | 1,055,792,484 |
| Interest income from bank deposits | ? | (41,156,445) | ? | (44,583,524) |
| Net exchange losses | ? | 7,509,490 | ? | 1,797,658 |
| Other financial expenses | ? | 2,751,033 | ? | 1,414,091 |
| ? | ? | ? | ? | ? |
| Total | ? | 903,880,632 | ? | 1,014,420,709 |
20 Other income
?
?
| ? | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Government grants related to assets | 901,541,269 | ? | 913,120,098 |
| Government grants related to income | 43,858,943 | ? | 82,164,265 |
| ? | ? | ? | ? |
| Total | 945,400,212 | ? | 995,284,363 |
The amount of government subsidies received by the Company in 2019 and directly included in other income was RMB35,927,761.
21 Investment income
| ? | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Income from long-term equity investments accounted for using cost method | 1,889,790,465 | ? | 936,394,420 |
| Long-term equity investments gains/(loss) under equity method | 244,595,829 | ? | (12,001,705) |
| Investment income from disposal of long-term equity investments | 49,028,075 | ? | - |
| Investment income from available-for-sale financial assets during the holding period | - | ? | 3,917,184 |
| Dividend income from investments in other equity instruments | 2,354,733 | ? | - |
| Including: Dividend income from investments in other equity instruments derecognised during the year | 471,354 | ? | - |
| Dividend income from investments in other equity instruments held at the balance sheet date | 1,883,379 | ? | - |
| ? | ? | ? | ? |
| Total | 2,185,769,102 | ? | 928,309,899 |
22 Credit losses
?Item
| Item | 2019 |
| ? | ? |
| Accounts receivable | 17,416,444 |
| Other receivables | 45,142,306 |
| ? | ? |
| Total | 62,558,750 |
23 Non-operating income and non-operating expenses
(1) Non-operating income by item is as follows:
??
| Item | 2019 | ? | 2018 | ? | ||||
| ? | ? | ? | ? | |||||
| Others | 4,120,515 | ? | 4,336,405 | |||||
| ? | ? | ? | ? | |||||
| Total | 4,120,515 | ? | 4,336,405 | |||||
(2) Non-operating expenses
| Item | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Donations provided | 7,838,720 | ? | 7,830,588 |
| Others | 466,763 | ? | 837,822 |
| ? | ? | ? | ? |
| Total | 8,305,483 | ? | 8,668,410 |
| ? | |||
24 Income tax expenses
| ? | Note | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Current tax expense based on tax law and regulations | ? | 313,149,954 | ? | 372,322,173 |
| Changes in deferred tax | (1) | (82,338,912) | ? | (137,442,585) |
| ? | ? | ? | ? | ? |
| Total | ? | 230,811,042 | ? | 234,879,588 |
(1) The analysis of changes in deferred tax assets/liabilities is set out below:
??
| ? | ? | 2019 | ? | 2018 |
| ? | ? | ? | ? | ? |
| Origination and reversal of temporary differences | ? | (82,338,912) | ? | (137,442,585) |
(2) Reconciliation between income tax expense and accounting profit is as follows:
?Item
| Item | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Profit before taxation | 3,916,375,498 | ? | 2,864,737,938 |
| Expected income tax expense at tax rate of 15% | 587,456,325 | ? | 429,710,691 |
| Add: Non-deductible expenses | 5,063,076 | ? | 4,554,071 |
| Non-taxable income | (279,640,682) | ? | (139,246,485) |
| Tax deduction for R&D activities | (74,503,110) | ? | (60,138,689) |
| Others | (7,564,567) | ? | - |
| ? | ? | ? | ? |
| Income tax expenses | 230,811,042 | ? | 234,879,588 |
25 Supplementary information on cash flow statement
(1) Supplement to cash flow statement
| ? | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| (a) Reconciliation of net profit to cash flows from operating activities: | ? | ? | ? |
| ? | ? | ? | ? |
| Net profit | 3,685,564,456 | ? | 2,629,858,350 |
| Add: Credit loss | 62,558,750 | ? | - |
| Impairment loss | 32,000,000 | - | |
| Depreciation of fixed assets and investment properties | 122,776,599 | ? | 125,672,901 |
| Amortisation of intangible assets | 180,015,643 | ? | 112,898,414 |
| Amortisation of long-term deferred expenses | 34,805,818 | ? | 34,008,232 |
| Financial expenses | 996,740,951 | ? | 1,041,426,618 |
| Investment income | (2,185,769,102) | ? | (928,309,899) |
| Increase in deferred tax assets | (69,473,918) | ? | (140,588,363) |
| (Increase) / decrease in inventories | (4,646,260) | ? | 3,462,706 |
| Decrease/ (increase) in operating receivables | 465,794,325 | ? | (315,481,253) |
| (Decrease) / increase in operating payables | (869,099,802) | ? | 898,567,740 |
| ? | ? | ? | ? |
| Net cash flows from operating activities | 2,451,267,460 | ? | 3,461,515,446 |
?
(b) Net changes in cash and cash equivalents:
| (b) Net changes in cash and cash equivalents: | ? | ? | ? |
| ? | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Cash and cash equivalents at the end of the year | 3,680,770,048 | ? | 3,829,814,050 |
| Less: Cash and cash equivalents at the beginning of the year | 3,829,814,050 | ? | 2,990,801,501 |
| ? | ? | ? | ? |
| Net (decrease) / increase in cash and cash equivalents | (149,044,002) | ? | 839,012,549 |
(2) Details of cash and cash equivalents
| ? | 2019 | ? | 2018 |
| ? | ? | ? | ? |
| Cash on hand | 22,936 | ? | 22,593 |
| Bank deposits available on demand | 3,680,747,112 | ? | 3,829,791,457 |
| ? | ? | ? | ? |
| Cash and cash equivalents at the end of the year | 3,680,770,048 | ? | 3,829,814,050 |
Note: Cash and cash equivalents disclosed above exclude other monetary fund with restricted usage.
26 Assets with restrictive ownership title
As at 31 December 2019, the Company has no assets with restrictive ownership title.
XV. Extraordinary gains and losses in 2019
??
| ? | 2019 | ? | 2018 | |
| ? | ? | ? | ? | ? |
| Investment income / (losses) from disposal of long-term equity investments | ? | 48,846,682 | ? | (3,948,640) |
| Losses from disposal of non-current assets | ? | (28,506,546) | ? | (21,684,121) |
| Government grants recognized in current profit or loss (except for government subsidies that are closely related to the normal business operations of the company and that are in compliance with national policies and are subject to constant or fixed amount according to certain standards) | ? | 2,640,634,861 | ? | 2,073,709,661 |
| Fair value changes in Financial assets held for trading, and investment income from the disposal of Financial assets held for trading and Available-for-sale financial assets | ? | 112,668,244 | ? | 315,279,377 |
| Reversal of provision for bad and doubtful debts of receivables assessed on an individual basis | ? | 1,498,805 | ? | 1,779,710 |
| Other non-operating income and expenses besides items above | ? | 96,799,305 | ? | 63,734,628 |
| Other items qualified as extraordinary gain and loss | Note2 | 795,126,980 | ? | - |
| Less: Tax effect | ? | 285,904,312 | ? | 328,634,385 |
| ? | ? | ? | ? | ? |
| Total | ? | 3,381,164,019 | ? | 2,100,236,230 |
| ? | ? | ? | ? | ? |
| Including: Extraordinary gains affecting net profit of equity shareholders of the Company | ? | 3,085,437,188 | ? | 1,917,425,622 |
| Extraordinary gains affecting net profit of equity shareholders of the non-controlling shareholders | ? | 295,726,831 | ? | 182,810,608 |
Note 1: Extraordinary gain and loss item listed above are presented in the amount before taxation.
Note 2: The company’s capital commitment and conversion obligations to the minority shareholders of Hefei Xinsheng is
included in financial liabilities in accordance with the relevant accounting standards for financial instruments.During the reporting period, the Company and Hefei Heping Investment Co., Ltd. ("Hefei Heping") signed an"Equity Transfer Agreement", which agreed to transfer 15.3846% of the equity held by Hefei Heping, after which,
Hefei Xinsheng becomes a wholly-owned subsidiary of the company. According to the requirements of theAccounting Standard, the difference of RMB 795,126,980 between the cash payment and the book value of thisfinancial liability is included in the current profit and loss.
XVI. Return on net assets and earnings per share
In accordance with Regulation on the Preparation of Information Disclosures by Companies Issuing Securities No.9 –Calculation and Disclosure of the Return on Net Assets and Earnings Per Share (2010 revised) issued by the CSRC andrelevant accounting standards, the Group’s return on net assets and earnings per share are calculated as follows:
| Profit for the reporting period | Weighted average return on net assets (%) | ? | Basic earnings per share | ? | Diluted earnings per share |
| ? | ? | ? | ? | ? | ? |
| Net profit attributable to the Company’s ordinary equity shareholders | 2.16% | ? | 0.05 | ? | 0.05 |
| Net profit excluding extraordinary gain and loss attributable to the Company’s ordinary equity shareholders | (1.42%) | ? | (0.04) | ? | (0.04) |