Stock Code: 603195 Stock Name: Gongniu Group
公牛集团股份有限公司GONGNIU GROUP CO., LTD.
Annual Report 2021
April 2022
Important Notes
1. The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,supervisors and senior management of Gongniu Group Co., Ltd. (hereinafter referred to as the“Company”) hereby guarantee that the contents of this Report are true, accurate and completeand free of any misrepresentations, misleading statements or material omissions, and collectivelyand individually accept legal responsibility for such contents.
2. All the directors of the Company attended the board meeting for the review of this Report.
3. Pan-China Certified Public Accountants LLP has issued an independent auditor’s report withunmodified unqualified opinion for the Company.
4. Ruan Liping, the Company’s legal representative, Zhang Lina, the Company’s Chief FinancialOfficer, and Luo Yuebo, head of the Company’s financial department (equivalent to financialmanager) hereby guarantee that the financial statements carried in this Report are true, accurateand complete.
5. Final dividend plan approved by the Board of Directors
As audited by Pan-China Certified Public Accountants LLP, net profit attributable to shareholdersof the Company as the parent stood at RMB2,780,360,732.66 for 2021, and the cumulative distributableprofit of the Company as the parent was RMB3,726,954,923.09 as at 31 December 2021.The 2021 final dividend plan is as follows: Based on the total share capital at the record date of thedividend payout, the Company intends to pay a cash dividend of RMB24 (tax inclusive) per 10 shares toshareholders. According to the total share capital of 601,180,520 shares at the date when this Report wasauthorized for issue, the total cash dividend payout is expected to be RMB1,442,833,248.00, accountingfor 51.89% of the net profit attributable to the listed company’s shareholders during 2021. Where anychange occurs to the total share capital at the record date of the dividend payout due to a repurchase ofrestricted shares, etc., the cash dividend per share shall remain the same while the total payout amountshall be adjusted accordingly.
The final dividend plan is subject to final approval by the general meeting of shareholders.
6. Risk warning regarding forward-looking statements
√ Applicable □ Not applicable
Any plans, development strategies and other forward-looking statements mentioned in this Reportshall not be considered as promises to investors. Investors and those concerned shall be sufficientlyaware of the risks and understand the differences between plans and forecasts and promises.
7. Indicate whether any of the controlling shareholder or its related parties occupied theCompany’s capital for non-operating purpose.N/A
8. Indicate whether the Company provided any guarantee for any external party in violation of theprescribed decision-making procedure.N/A
9. Indicate whether over half of the directors refused to guarantee the truthfulness, accuracy andcompleteness of this Report.N/A
10. Major risk warning
The Company has described the possible risks in this Report. For further information, please referto contents under the heading “Possible risks” under Item VI (IV) in “Part III Management Discussionand Analysis”.
11. Other information
□ Applicable √ Not applicable
To Shareholders
The year 2021 saw recurrent waves of the COVID-19 pandemic and a volatilebusiness environment. Amid a complex external environment and numerous difficulties, weaccepted the challenges, forged ahead and achieved steady growth in operating results.Thus, our operating revenue increased 23.22% year on year to RMB12.385 billion and thenet profit attributable to our shareholders amounted to RMB2.78 billion, up 20.18% fromthe previous year.
Stay true to original aspiration and show resilience
Amid the difficult market conditions of 2021, we remained true to our originalaspiration, focused on improvements in products and services, and devoted ourselves to theattainment of higher performance in all aspects of our operation. We demonstrated ourresilience through various achievements, including the steady development in variousbusinesses, the further enhancement of product market share, brand recognition andreputation while further consolidating our industry leadership with adaptors and wallswitches, the rapid growth of LED lighting, domestic electrical appliances and low-voltageelectricals. Consequently, we laid the foundation for our long-term sustainabledevelopment.
Innovation and growth fueled by ecosystem synergy
We strengthened the ecosystem synergy of products and channels by centering on thetwo segments in 2021, namely the smart home ecosystem and new energy. With homelighting as the core, we further expanded our offering of LED lighting products anddeveloped smart solutions that integrate healthy lighting, professional lighting effect andsmart control, doing so in an effort to bring consumers a healthier, smarter and morecomfortable lighting experience. A string of household products was launched forhousehold electricity consumption scenarios. Moreover, to provide a broader range of high-quality products and services, we extended our service scope from inside the house to thecourtyard and aimed at the smart security segment. We increased our market presence inelectric connection for new energy and developed multiple related products such ascharging plugs and charging points.
Given the trend of consumption upgrading and one-stop shopping among youngpeople, we constantly evolved the channel system by embracing change and proactiveinnovation. With reliance on the Company's edges in powerful channel management and
multicategory integration, we upgraded our physical stores and established a network ofexclusive centers and stores for multicategory integrated sales covering wall switches, LED,bathroom heaters, low-voltage electrical products and smart clothes drying racks. As aresult, strong sales performance was attained. In response to the trend among industrychannels to pursue the business side and the emergence of invisible channels, the Companyput much effort in top corporate customers and has currently established a solid partnershipwith many top real estate and home decoration enterprises. In addition, the Companyembraces new trends as it explores new paths and platforms for online e-commercechannels and overseas online channels.Driven by technological innovation and empowered by digital and intelligenttransformation
Over the past year, we have persisted with a “professional and dedicated” attitude andincreased R&D investments to enhance our hard power. Specifically, R&D and operationheadquarters were established in Shenzhen and Shanghai to carry out hardware andsoftware R&D, industrial design and IoT platform construction, through which theCompany won many international and domestic design awards during the year, includingfive iF Design Awards, and the Design Intelligence Award. Meanwhile, we were granted470 patents. We employed our R&D achievements as the means to propel business reform.We actively embraced digital transformation to empower the production and salessystem. With the support of the information technology, we have enhanced the finemanagement capabilities of channels and sales with higher efficiency. Substantialimprovements in operating capacity have been achieved through the promotion of a lean,automatic, digital and smart supply-chain system.BBS was constantly deepened and capability was cultivated to go furtherWe also applied the Bull Business System (BBS) to a larger part of the Group during2021. Through the introduction of a series of lean management tools, our lean managementcapabilities in innovative growth, cost reduction and efficiency improvement and riskcontrol have been improved with excellent results, providing a strong guarantee for theGroup to "go further”.Systematic strengthening of ESG effortsIn 2021, we strengthened our ESG efforts to promote social welfare by investing morethan RMB32 million in public-welfare programs with respect to culture and education,health and hygiene, helping the poor and those in need. When Hong Kong was hit by the
pandemic, we promptly organized a task group to offer our help, donated more than 20,000pieces of products in various categories and supported the construction of Hong Kong’smakeshift hospitals and efforts to fight the pandemic. Meanwhile, we continued to optimizethe corporate governance structure, promoted the implementation of measures related to“carbon neutrality and carbon emission peak” and ensured the deeper implementation ofthe ESG strategy. This year, we have disclosed our first ESG report.We have accumulated experience in product, marketing, supply chain and brandingthrough 27 years of development. And we will continue to build comprehensivecompetitive edges in pursuit of sustainable growth, and repay shareholders with betterresults. As always, we will take vigorous actions and forge ahead towards the goal of“Becoming a Leader in the International Civil Electric Industry”.
The Board of Directors of Gongniu Group Co., Ltd
11 April 2022
Contents
Part I Definitions ...... 8
Part II General Information of the Company and Key Financial Indicators ...... 10
Part III Management Discussion and Analysis ...... 15
Part IV Corporate Governance ...... 45
Part V Environmental and Social Responsibility ...... 71
Part VI Significant Events ...... 76
Part VII Changes in Ordinary Shares and Information about Shareholders ...... 98
Part VIII Relevant Information of Preference Shares ...... 110
Part IX Relevant Information of Corporate Bonds ...... 111
Part X Financial Statements ...... 111
| Documents available for reference | The financial statements for the year ended 31 December 2021 signed and stamped by the legal representative, the Chief Financial Officer, and the head of the financial department |
| The Independent Auditor’s Report for the year ended 31 December 2021 stamped by the CPA firm, as well as signed and stamped by the relevant certified public accountants | |
| The originals of all the Company’s documents and announcements disclosed on newspapers and websites designated by CSRC during the Reporting Period |
Part I Definitions
I DefinitionsThe expressions in the left column in the table below refer to the contents in the right column unlessotherwise specified.
| Definitions of frequently used terms | ||
| The “Company”, “Gongniu”, or “we” | refers to | Gongniu Group Co., Ltd. |
| Reporting Period | refers to | The period from 1 January 2021 to 31 December 2021 |
| Liangji Industrial | refers to | Ningbo Liangji Industrial Co., Ltd., the Company’s controlling shareholder |
| Xiaozhou Investment | refers to | Shenzhen Xiaozhou Investment Co., Ltd., the Company’s shareholder |
| Hillhouse Daoying | refers to | Zhuhai Hillhouse Daoying Investment Partnership (Limited Partnership) , the Company’s shareholder |
| Ninghui Investment | refers to | Ningbo Ninghui Investment Management Partnership (Limited Partnership) , the Company’s shareholder |
| Suiyuan Investment | refers to | Ningbo Suiyuan Investment Management Partnership (Limited Partnership) , the Company’s shareholder |
| Bowei Investment | refers to | Anji Bowei Enterprise Management Partnership (Limited Partnership) , the Company’s shareholder |
| Qiyuanbao | refers to | Ningbo Qiyuanbao Investment Management Partnership (Limited Partnership) , the Company’s shareholder |
| Cixi Gongniu | refers to | Cixi Gongniu Electrics Co., Ltd. |
| Shanghai Gongniu | refers to | Shanghai Gongniu Electrics Co., Ltd. |
| Ningbo Gongniu | refers to | Ningbo Gongniu Electrics Co., Ltd. |
| Banmen Electric Appliance | refers to | Ningbo Banmen Electric Appliance Co., Ltd. |
| Gongniu Photoelectric | refers to | Ningbo Gongniu Photoelectric Technology Co., Ltd. |
| Gongniu Precision | refers to | Ningbo Gongniu Precision Manufacturing Co., Ltd. |
| Gongniu Digital | refers to | Ningbo Gongniu Digital Technology Co., Ltd. |
| Bull International Trading | refers to | Ningbo Bull International Trading Co., Ltd. |
| Xingluo Trading | refers to | Ningbo Xingluo Trading Co., Ltd. |
| Electric Sales | refers to | Ningbo Gongniu Electric Sales Co., Ltd. |
| Bull HK | refers to | Bull International Trading (HK) Limited |
| Gongniu Low Voltage | refers to | Ningbo Gongniu Low Voltage Electric Co., Ltd. |
| Baidi Electrics | refers to | Shanghai Baidi Electrics Co., Ltd. |
| Hangniu Hardware | refers to | Hangzhou Hangniu Hardware and Electrical Co., Ltd. |
| Liangniu Hardware | refers to | Hangzhou Liangniu Hardware and Electrical Co., Ltd. |
| Feiniu Hardware | refers to | Hangzhou Feiniu Hardware and Electrical Co., Ltd. |
| Niuweiwang Trading | refers to | Suzhou Niuweiwang Trading Co., Ltd. |
| Cixi Libo | refers to | Cixi Libo Electric Co., Ltd. |
| Yaoyang Trading | refers to | Yichang Yaoyang Trading Co., Ltd. |
| Huantian Trading | refers to | Hubei Huantian Technology Co., Ltd. |
| Jianke Trading | refers to | Changde Jianke Trading Co., Ltd. |
| Chenhao Electronic | refers to | Beijing Chenhao Electronic Technology Co., Ltd. |
| Dalitek | refers to | Dalitek Intelligent Technology (Shanghai) Inc. |
| Hainan Dacheng | refers to | Hainan Dacheng Supply Chain Management Co., Ltd. |
| Domestic Electrical Appliance | refers to | Ningbo Gongniu Domestic Electrical Appliance Co., Ltd. |
| The “Articles of Association” | refers to | The Articles of Association of Gongniu Group Co., Ltd. |
| The “Company Law” | refers to | The Company Law of the People’s Republic of China |
| The “Securities Law” | refers to | The Securities Law of the People’s Republic of China |
| A-stock | refers to | RMB-denominated ordinary stock |
| CSRC | refers to | China Securities Regulatory Commission |
| The Ministry of Finance | refers to | The Ministry of Finance of the People’s Republic of China |
| STA | refers to | The State Taxation Administration of the People’s Republic of China |
| Sinolink Securities | refers to | Sinolink Securities Co., Ltd. |
| PCCPA or the “Independent Auditor” | refers to | Pan-China Certified Public Accountants LLP |
| RMB RMB’000 RMB’0,000 RMB’00,000,000 | refers to | Expressed in the Chinese currency of Renminbi Expressed in thousands of Renminbi Expressed in tens of thousands of Renminbi Expressed in hundreds of millions of Renminbi |
II Terminology
| Civil electrical appliances | refers to | Products that are typically purchased at the discretion of consumers and are suitable for use at home, in the office and on other occasions for power connection, transmission, storage, conversion, control and other functions, such as adaptors, wall switches and sockets, circuit breakers, distribution boxes, LED lamps, etc. |
| Adaptors | refers to | Products that are produced in accordance with GB/T 2099.3-2015 Plugs and Socket-outlets for Household and Similar Purposes -- Parts 2-5: Particular Requirements for Adaptors, GB/T 2099.7-2015 Plugs and Socket-outlets for Household and Similar Purposes -- Parts 2-7: Particular Requirements for Extension-cord Sockets and GB/T 2099.1-2008 Plugs and Socket-outlets for Household and Similar Purposes -- Part 1: General Requirements, as well as similar foreign standards, and are commonly referred to as adaptors in the Company. Consumers or peer companies often call adaptors socket-outlets, power strips, portable sockets, extension-cord sockets, or power converters. |
| PDU | refers to | Power Distribution Unit. PDU is an electric connection product suitable for power distribution at the data center end that can make power distribution more orderly, reliable, safe, professional and beautiful and make power supply maintenance more convenient and reliable. |
| Wall switches and sockets | refers to | Wall switches and wall sockets. Specifically, a wall switch refers to a device mounted on the wall for switching on/off the current of one or more circuits and is commonly used to control the on/off status of lighting lamps. A wall socket, also known as a fixed socket, is an electrical accessory mounted on the wall, with a socket inserted with a pin of a plug and installed with terminals for connecting soft cables and hard wires, and is often used to provide a power supply interface for electrical products. |
| Smart ecosystem | refers to | A novel, intelligent household appliance network that builds an interconnected smart home ecosystem. |
| LED lighting | refers to | Light sources that are produced using light-emitting diodes (such as LED bulb lamps), or luminaries that are produced using LED as a light source. |
| No-main-lamp lighting | refers to | A lighting design style and lighting without the main light source, that is, a lighting design technique through which downlights, spotlights, light belts, track lights and other luminaries are used to create a light (light and shadow) atmosphere in a point-line-surface combination manner. |
| Charging plugs | refers to | Portable chargers that are suitable for AC charging of new energy vehicles and special protectors used to connect household sockets and electric vehicles, with such functions as over-voltage and under-voltage protection, over-current protection and leakage protection. |
| Charging points | refers to | Fixed charging devices for AC charging of new energy vehicles that often require special wiring and installation in garages and special parking spaces, with such functions as over-voltage and under-voltage protection, over-current protection, leakage protection, insulation detection, |
| electricity billing, timed charging and reserved charging. | ||
| Digital accessories | refers to | Accessories that are used directly or indirectly in the use of digital products, such as USB cables, chargers and portable chargers. |
| Circuit breakers | refers to | A mechanical switching device that can connect, carry and disconnect the current both under normal circuit conditions and under specified abnormal circuit conditions. They are also known as automatic switches and are widely used in households, factories and other distribution circuits. |
| Embedded products | refers to | Products that are embedded in objects such as furniture and used to provide solutions for power supply, electricity consumption, lighting and signal transmission. |
| Distribution, delivery, visit and sales | refers to | A sales model in which specialized vehicles are used to provide retail stores with goods distribution, goods delivery, visit services and door-to-door sales on a regular basis along a fixed planned route. |
| BBS | refers to | Bull Business System |
Part II General Information of the Company and Key Financial
Indicators
I Corporate Information
| Company name in Chinese | 公牛集团股份有限公司 |
| Abbr. | 公牛集团 |
| Company name in English | GONGNIU GROUP CO.,LTD. |
| Abbr. | GONGNIU |
| Legal representative | Ruan Liping |
II Contact Information
| Board Secretary | Securities Representative | |
| Name | Liu Shengsong | Jin Xiaoxue |
| Address | Tower 20, Baoshi Plaza, 487 Tianlin Road, Xuhui District, Shanghai | Tower 20, Baoshi Plaza, 487 Tianlin Road, Xuhui District, Shanghai |
| Tel. | 021-33561091 | 021-33561091 |
| Fax | 021-33561091 | 021-33561091 |
| E-mail address | liushengsong@gongniu.cn | jinxx@gongniu.cn |
III General Company Information
| Registered address | East Zone of Guanhaiwei Town Industrial Park, Cixi City, Zhejiang Province |
| Changes of registered address | N/A |
| Office address | Tower 20, Baoshi Plaza, 487 Tianlin Road, Xuhui District, Shanghai |
| Zip code | 201103 |
| Company website | http://www.gongniu.cn |
| Email address | ir@gongniu.cn |
IV Media for Information Disclosure and Place where this Report Is Lodged
| Media and websites where this Report is disclosed | China Securities Journal, Shanghai Securities News, Securities Daily, and Securities Times |
| Stock exchange website where this Report is disclosed | http://www.sse.com.cn |
| Place where this Report is lodged | The Securities Department of the Company |
V Stock Profile
| Stock profile | ||||
| Class of stock | Stock exchange | Stock name | Stock code | Formerly used stock name |
| A-stock | Shanghai Stock exchange | Gongniu Group | 603195 | / |
VI Other Information
| Domestic CPA firm appointed by the Company | Name | Pan-China Certified Public Accountants LLP |
| Office address | Block B, China Resources Building, 1366 Qianjiang Road, Jianggan District, Hangzhou | |
| Accountants writing signatures | Qian Zhongxian, and Chen Hui | |
| Sponsor that exercised supervision over the Company in the Reporting Period | Name | Sinolink Securities Co., Ltd. |
| Office address | 23/F, Zizhu International Plaza, 1088 Fangdian Road, Pudong New District, Shanghai | |
| Representatives writing signatures | Du Chunjing, and Feng Bing | |
| Supervision period | From 6 February 2020 to 31 December 2022 |
VII Key Financial Information for the Past Three Years(I) Key accounting information
Unit: RMB
| Key accounting information | 2021 | 2020 | 2021-over-2020 change (%) | 2019 |
| Operating revenue | 12,384,916,337.51 | 10,051,128,834.05 | 23.22 | 10,040,439,724.07 |
| Net profit attributable to the listed company’s shareholders | 2,780,360,732.66 | 2,313,430,074.14 | 20.18 | 2,303,722,676.44 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses | 2,632,476,489.56 | 2,221,818,427.52 | 18.48 | 2,223,572,707.11 |
| Net cash generated from/used in operating activities | 3,014,326,741.14 | 3,437,202,711.65 | -12.30 | 2,297,332,006.05 |
| 31 December 2021 | 31 December 2020 | Change of 31 December 2021 over 31 December 2020 (%) | 31 December 2019 | |
| Equity attributable to the listed company’s shareholders | 10,755,751,576.63 | 9,137,392,569.09 | 17.71 | 5,551,303,841.96 |
| Total assets | 15,473,904,666.62 | 12,437,541,574.38 | 24.41 | 7,416,562,760.11 |
(II) Key financial indicators
| Key financial indicator | 2021 | 2020 | 2021-over-2020 change (%) | 2019 |
| Basic earnings per share (RMB/share) | 4.63 | 3.89 | 19.02 | 4.27 |
| Diluted earnings per share (RMB/share) | 4.63 | 3.89 | 19.02 | 4.27 |
| Basic earnings per share before exceptional gains and losses (RMB/share) | 4.39 | 3.73 | 17.69 | 4.12 |
| Weighted average return on equity (%) | 28.28 | 26.87 | Up by 1.41 percentage points | 52.36 |
| Weighted average return on equity before exceptional gains and losses (%) | 26.77 | 25.81 | Up by 0.96 percentage point | 50.54 |
Explanations about the key accounting and financial information for the past three years:
□ Applicable √ Not applicable
VIII Accounting Data Differences under China’s Accounting Standards for Business Enterprises(CAS) and International Financial Reporting Standards (IFRS) and Foreign AccountingStandards(I) Differences in net profit and equity attributable to the listed company’s shareholders underCAS and IFRS
□ Applicable √ Not applicable
(II) Differences in net profit and equity attributable to the listed company’s shareholders underCAS and foreign accounting standards
□ Applicable √ Not applicable
(III) Reasons for accounting data differences above
□ Applicable √ Not applicable
IX Key Financial Information for 2021 by Quarter
Unit: RMB
| Q1 (January-March) | Q2 (April-June) | Q3 (July-September) | Q4 (October-December) | |
| Operating revenue | 2,574,274,208.31 | 3,245,498,210.56 | 3,192,748,363.27 | 3,372,395,555.37 |
| Net profit attributable to the listed company’s shareholders | 606,926,576.50 | 814,485,351.00 | 784,888,414.96 | 574,060,390.20 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses | 558,179,910.56 | 762,665,900.61 | 774,913,239.77 | 536,717,438.62 |
| Net cash generated from/used in operating activities | 355,943,367.97 | 1,235,659,159.38 | 581,991,433.98 | 840,732,779.81 |
Indicate whether any of the quarterly financial data in the table above differs from what have beendisclosed in the Company’s past periodic reports.
□ Applicable √ Not applicable
X Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
| Item | 2021 | Notes (if applicable) | 2020 | 2019 |
| Gain or loss on disposal of non-current assets | -9,714,625.18 | -669,979.13 | -3,929,202.33 | |
| Exceptional tax rebates, reductions and exemptions given with ultra vires approval, in lack of official approval documents or for other reasons | ||||
| Government grants through profit or loss (exclusive of government grants consistently given in the Company’s ordinary course of business at fixed quotas or amounts as per governmental policies or standards) | 388,196,973.94 | 126,164,339.75 | 65,476,712.73 | |
| Capital occupation charges on non-financial enterprises that are recognized in profit or loss | 8,121,324.51 | 407,671.23 | 1,032,715.90 | |
| 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 | ||||
| Gain or loss on non-monetary asset swaps | ||||
| Gain or loss on assets entrusted to other entities for investment or management | 171,623,256.63 | 166,225,979.47 | 105,161,168.16 | |
| Allowance for asset impairments due to acts of God such as natural disasters | ||||
| Gain or loss on debt restructuring | ||||
| Restructuring costs in staff arrangement, integration, etc. | ||||
| Gain or loss on the over-fair value amount as a result of transactions with distinctly unfair prices | ||||
| Current profit or loss on subsidiaries obtained in business combinations involving entities under common control from the period-begin to combination dates, net | ||||
| Gain or loss on contingencies that do not arise in the Company’s ordinary course of business |
| Gain or loss on fair-value changes on held-for-trading and derivative financial assets and liabilities & income from disposal of held-for-trading and derivative financial assets and liabilities and other debt investments (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | 11,107,836.63 | -114,631,050.00 | -129,159.06 | |
| Reversed portions of impairment allowances for receivables and contract assets which are tested individually for impairment | ||||
| Gain or loss on loan entrustments | ||||
| Gain or loss on fair-value changes in investment property of which subsequent measurement is carried out using the fair value method | ||||
| Effects of all adjustments required by taxation, accounting and other applicable laws and regulations on current profit or loss | ||||
| Income from charges on entrusted management | ||||
| Non-operating income and expense other than the above | -327,898,293.86 | RMB295 million was paid for the fine imposed by the anti-trust decision Zhe Shi Jian An (2021) No. 4. | -47,932,397.93 | -73,067,799.01 |
| Other gains and losses that meet the definition of exceptional gain/loss | 2,739,167.53 | 1,014,971.00 | ||
| Less: Income tax effects | 96,291,397.10 | 38,967,887.77 | 14,394,467.06 | |
| Non-controlling interests effects (net of tax) | ||||
| Total | 147,884,243.10 | 91,611,646.62 | 80,149,969.33 |
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listedin the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering TheirSecurities to the Public—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
XI Items Measured at Fair Value
√ Applicable □ Not applicable
Unit: RMB
| Item | Opening balance | Closing balance | Change in the period | Effect on current profit |
| Held-for-trading financial assets | 2,863,300,000.00 | 5,926,600,000.00 | 3,063,300,000.00 | |
| Derivative financial assets | 27,159,170.00 | 3,613,050.00 | -23,546,120.00 | |
| Total | 2,890,459,170.00 | 5,930,213,050.00 | 3,039,753,880.00 |
XII Other Information
□ Applicable √ Not applicable
Part III Management Discussion and Analysis
I Discussion and Analysis on OperationsAmid a complex business environment in 2021, the Company achieved steady growth in operatingresults. For the year, operating revenue increased 23.22% year on year to RMB12.385 billion and the netprofit attributable to the Company’s shareholders amounted to RMB2.78 billion, up 20.18% from theprevious year.In 2021, the Company continued to strengthen BBS and improve its own operating capability. Itmaintained robust growth in core advantageous businesses of adaptors and wall switches and sockets,accelerated business development with respect to new energy and the smart ecosystem, and successfullylaunched a string of new products to the market, demonstrating a strong growth momentum.In 2021, the Bull brand was once again among the “China’s 500 Most Valuable Brands” releasedby World Brand Lab, with an increase of RMB1.852 billion in brand value compared with 2020,reaching RMB17.634 billion. In addition, the Company and its subsidiaries, Ningbo Gongniu, GongniuPhotoelectric and Gongniu Digital, were certified as high-tech enterprises again in the year. Meanwhile,the Company was honored as “National Industry-Education Integration Enterprise” by the NationalDevelopment and Reform Commission and the Ministry of Education, granted the “AAAAA GoodStandardizing Practice Certificate” by the China Association for Standardization, and recognized as Top100 Manufacturing Enterprises of Zhejiang Province, First Batch of Cloud Enterprises in ManufacturingIndustry of Zhejiang Province, Seventh Batch of Enterprises in Zhejiang Province for Big DataDemonstrative Application and Advanced Entity of Quality Management in Zhejiang Province in 2021.In 2021, the Company achieved sound results in the following aspects:
(I) With deep insight into user needs, the Company continued to launch innovative productssuch as smart and ecosystem-based home appliances and new energy-based electrical products.In 2021, the Company firmly captured the major trends of consumption upgrade, intelligenttransformation, and new energy. With deep insight into user needs, it continued to launch innovativeproducts such as smart and ecosystem-based home appliances and new energy-based electrical products.Throughout the year, up to five design awards were earned at home and abroad. As of the date of thisreport, the Company has won a total of 51 design awards at home and abroad, including the Red DotAward (Germany), the iF Award (Germany), the IDEA Award, the Red Star Design Award (China), the
AWE Award, and the Design Intelligence Award. In addition, technical strengths were further enhanced,with 470 new patents and 13 new software copyrights granted in 2021. As of the date of this report, theCompany boasts 1,956 valid patents and 41 software copyrights.
1. The electric connection business
In 2021, the electric connection business continued with individualized innovation with regard toelectricity consumption scenarios according to user needs and actively expanded into the sectors ofindustrial electric power distribution and new energy-based electric connection. The business recordedrevenue of RMB6.413 billion in the year, an increase of 15.58% year on year.With user needs as its core, the Company further strengthened the individualized innovation ofadapters in electricity consumption scenarios to highlight the idea of "better homes through space andfunction integration". Track sockets were launched and topped the Tmall chart within three months. Anew electric connection technology platform was built to offer a new comprehensive solution for theelectricity usage scenarios in different functional areas. According to users' diverse needs for temporaryelectricity usage, the Company introduced retractable power strips in 2021, providing users with a safe,comfortable comprehensive solution for subdivided scenarios through a range of functions, includingautomatic pop up, access to electricity on both sides, a nearly 360-degree rotation, being retractable for10,000 times, wireless charging, and anti-collision and anti-pinch protection. Based on the insights intousers' need for smart electricity usage, the Company released the "safe core" product series thatintegrated the protection and monitoring of power supplies to improve the socket's overall protection ofelectrical equipment and achieve it in a digital and visible way. In addition, focusing on youngconsumers' yearning for individual expression and a better life, the Company launched the "retro powerstrip series" that gained popularity and recognition.
Under the wave of new infrastructure, the Company focused on industrial electric powerdistribution with "green technology and energy conservation", "smart interconnection", and "safety andreliability" at its core. A range of electric connection products suitable for data centers, such as PDU,busbar, and industrial connector, was launched to provide customers with a comprehensive solution forsmart power distribution for data centers.
In 2021, the Company captured the trend of new energy and gave full play to its electric connectiontechnology and brand advantage to gain breakthroughs in new energy electric connection. Withtechnology innovation to address the pain points in usage, it launched a variety of portable chargers fornew energy vehicles and household AC charging points, which received wide appreciation for theirexcellent technology, vehicle-grade quality, and innovative appearance and experience design.Specifically, the portable charger won the German Design Award-Gold 2021.
Furthermore, by leveraging its hardware channels, the Company continued to develop rootedbusinesses such as electrical tape and wire reels, thereby achieving accurate inbound marketing,enhancing channel and customer royalty, and systematically arranging electric connection products.
2. The smart electrical lighting business
In the smart electrical lighting business, the Company focuses on the process before householddecoration is completed (referred to as "pre-decoration"), providing wall switches and sockets, LEDlighting, bathroom heaters, circuit breakers, and smart door locks to meet consumers' upgraded needs forwhole-house smart home appliances. In 2021, the business reported revenue of RMB5.551 billion, anincrease of 36.90% year on year.
(1) Wall switches and sockets
In 2021, the Company's wall switches and sockets continued to lead the decorative products. Theproduct layout was optimized under the strategy of "improvement in basic, upgrade in middle-end, andbreakthrough in high-end", and the construction of different product systems was deepened according tothe differentiated needs of customers in different channels. The revenue generated from wall switchesand sockets in 2021 increased by 29.55% year on year.
Following the successful release of the PIANO series of decorative switches, the Company directedits planning to the combination of intelligence, material/technology, and industrial design to producehigh-end, high-tech products. Based on the arrangement in the "Bull Smart Single-fire Switch", itdeveloped and launched the "Light Smart Wireless Remote Control Switch" in 2021, which allowsremote control at home without rewiring and accessing the Internet.
As large panels have become the industry trend, the Company made active efforts in differentiateddecorative large panels within mainstream price segments. At the same time, with a focus on electricalinstallation experience, it carried out a new platform design and creatively used the IPD (integratedproduct development) idea and the BPD (trending production creation) methodology to connect demandmanagement, project initiation, development, and other critical processes and stages, thereby managingthe whole process of product development.
With the development of different e-commerce platforms, the Company closely followed the trendof channels to identify the changes in the needs of consumers on different platforms and activelyconduct product planning and layout. A specific series of products aimed at mainstream e-commerceplatforms were launched in 2021.
In addition, in response to the needs of ToB customers, platform-based modular structure designwas further strengthened to improve product flexibility and scalability. Market competitivenesscontinued to rise by matching the differentiated needs of different customers in the business market witha portfolio of basic, high-end, and smart products.
(2) LED lighting
Adhering to the positioning of "eye-caring", and oriented to meet the needs for light in space andbehavior, the Company has continued to push forward the research of "light" and the innovation andapplication of optical design. From developing technologies such as "anti-surge", "visible flicker-free",and "high-quality lamp bead" to exploring the needs of subdivided groups and in different applicationscenarios, the Company is committed to providing consumers with a comfortable, healthy lightenvironment. In 2021, revenue from LED lighting increased by 38.53% year on year.
The decorative lighting segment responded to consumption upgrades by making greater efforts insmart products. More than 10 types of "light smart" decorative lamps, such as X16 Dawn and X18 Ultra,were launched in 2021, allowing users to control them from mobile phones via Bluetooth. In addition,these lamps ensured even, smooth dimming by setting professional dimming curves and using ultra-high-precision dimming chips.Keeping up with market trends, the basic lighting segment continued to enrich products fordifferent scenarios in order to meet the needs for diverse, high-quality lighting. A variety of productswere developed and launched, such as the High-Brightness Cylindrical Light, PB01 Office Flat Light,XB01 Linear Light, and those for fire emergency, forming a matrix product layout with different levels,covering households, industries, offices, hotels, hospitals, supermarkets, department stores, andfranchises.To let consumers experience eye-caring lighting more closely, Gongniu expanded its mobilelighting segment in 2021, striving to maximize the lighting experience. Based on the surveys andinsights of the user research team, the newly-released Bull Eye-caring Desk Lamp SR Pro creativelyused optical subtraction and triple anti-glare technologies to offer lighting experience that is “eye-friendly and ghosting-free”. The product received positive feedback from consumers and won theGerman Design Award-Winner. In addition, the Company contributed to industrial regulations by jointlydrafting the group standard, the Specifications for Evaluating the Subtraction Effect of Table Lamps forPaper Task, with the China Household Electrical Appliances Research Institute.
With a focus on consumers' upgraded needs for minimalist decoration and smart lighting effects,Gongniu established the smart commercial lighting team striving for a comfortable lighting environmentfor each family. A modular lighting product design integrated with a simple, delicate, and light luxurystyle reshaped the household space lighting experience. The Company launched a range of no-main-lamp lighting products such as downlights, magnetic lamps, and liner lamps, which are suitable forrecessed and surface mounted scenarios, and provided multiple lighting solutions to meet the needs forbasic, key, and decorative lighting functions.
As an active promoter of the "anti-flicker" idea, the Company equipped its lighting products withthe "anti-surge" technology to address current instability, conveying its brand philosophy of "care, trust,and companionship" to consumers.
(3) Other products
To meet consumers' needs for one-stop shopping during pre-decoration and give full play to itsbrand and channel advantages, the Company incubated and launched bathroom heaters, smart door locks,smart clothes drying racks, smart curtain machines, and other smart ecosystem products. In this respect,operating revenue recorded a year-on-year increase of 139.56% in 2021.
Continuously expanding the definitions of heating and cooling appliances, the Company aimed tobuild a healthy home environment in terms of temperature, humidity, purity, freshness, and atmosphereand to upgrade it with smart technologies. As a result, a range of products such as bathroom heaters,coolers, ventilating fans, and ceiling fan lights was launched.
In 2021, the Company's smart ecosystem products were launched one after another and made agood start. In terms of smart door locks, new series of handle-type smart locks such as ZA, X50, K, andZB as well as new series of automatic smart locks such as X70 and QA01 were launched in 2021. Thosewith WIFI and Bluetooth were all connected to the "Bull Smart Home" app, improving user experiencefrom software and hardware. The Company established the ability to integrate research, production, andsales, deepened the vertical supply chain ability, and completed an over-1,000-square-meter laboratoryspecialized for smart door locks to fully practice its quality-first philosophy. As an important entrancefor smart control of home scenarios, smart door locks laid the foundation for the Company's strategy insmart home ecology. Smart clothes drying racks and smart curtain machines were introduced in severalseries, whose differentiated layout was quickly completed through platform-based development.
Focusing on users' needs for light effects and quality, the Company continued to optimize thecontrol system of Bull Smart Home, further improving the convenience, safety, and stability of the "BullSmart Home" app from the perspective of users. It accelerated the development of smart modules andBull Cloud, expanded the openness of the mid-office in the business line, and deepened the partnershipwith Alibaba, Baidu, JD, Xiaomi, and other Internet of Things platforms that support the voice control ofa range of mainstream smart speakers, thereby quickly improving the product strengths andtechnological capabilities of the Company's smart products. To further enhance its competitiveness insmart lighting control technology, the Company invested in Dalitek Intelligent Technology (Shanghai)Inc. in 2021. Dalitek introduced smart lighting control to China at an earlier period. It provides smartcontrol system solutions in lighting, hotel room, and smart home for hotels, office buildings, and houseswith fine decoration, and has completed various benchmark projects for high-end hotels. The smartlighting control system is its core advantage. Based on Dalitek's lighting control capabilities, Gongniuwill combine its smart industry research to create a smart home ecosystem with no-main-lamp lightingproducts as the core.
In terms of circuit breakers, in 2021, the Company started from user needs to keep innovating,developing, and manufacturing based on the existing technology platforms. Its product lines wereenriched by launching narrow body leakage protectors, upgraded home terminal distribution boxes,busbars, and double-handle integrated circuit breakers with leakage protection. The revenue generatedfrom circuit breakers in 2021 increased by 52.16% year on year.
3. Digital accessories
In 2021, the Company's digital accessories generated revenue of RMB373 million, a year-on-yeardecrease of 10.79%, primarily due to the impact of the time-to-market of new products and changes inonline and offline consumer traffic. As an extension of the Company's electric connection business, thedigital accessories segment has been actively promoting product innovation and upgrades in digital fastcharging and new energy storage, laying the foundation for future sustainable development.
Adhering to the philosophy of providing consumers with "exquisite, stylish, and young" high-quality third-party digital accessories, the Company closely followed the industry trend and acceleratedthe improvement of the fast charging product layout, with the release of a range of products suitable for
mobile phones and laptops. At present, the layout of fast charging products with power segments of 18Wto 100W has been completed, and a widely applicable, standardized charger power platform has beenlaunched, effectively improving product standardization, stability, and safety. Meanwhile, the Companyprovided consumers with higher-quality charging products by further upgrading the overchargeprotection technology to better extend battery life and reduce charging power consumption.
In addition, product opportunities in the new energy sector were continuously explored. In terms ofoutdoor energy storage, the Company conducted in-depth research on critical technologies such asbattery pack management and low power-consumption, high-efficiency fast chargers and inverters andgave full play to its advantages in strong electric connection and digital fast charging. It launchedoutdoor portable chargers with power segments of 300W, 600W, and 1000W that meet the nationalsafety standard of 220V sine wave AC output and the need for 60WPD two-way fast charging.Compatible with various digital devices, these products provided consumers with safer, more convenientelectricity usage in outdoor leisure and entertainment scenarios.In response to the widely differing product performance and quality, and under the principle ofelectricity safety, the Company actively participated in the formulation of national and industrystandards as well as enterprise certification to promote industrial progress. It has established channels fortechnology exchange with China Electronics Standardization Institute, China Electronic Energy SavingTechnology Association, China Communications Standards Association, and China Quality CertificationCentre, and joined the National Electronic Safety Standardization Technical Committee. In 2021, theCompany participated in the revision or drafting of more than 10 national or industry standards as themajor drafter. These documents include Audio/Video, Information and Communication TechnologyEquipment -- Part 1: Safety Requirements, Audio/Video, Information and Communication TechnologyEquipment -- Part 2: Explanatory Information related to IEC 62368-1, Technical Requirements andTesting Methods for Power Adapters for Multimedia Equipment, Technical Specifications of DC PowerAdapter for Vehicle Use, Technical Requirements for Wireless Noise-canceling Headphones, GeneralSpecifications for Hand Wearable Products - Smart Bracelets, General Specifications for HandWearable Products - Smart Watches, and Performance Specifications for Lithium-ion Battery andBattery Packs for Distributed Energy Storage - Part 1: Home Energy Storage. As its product qualityreceived ongoing recognition from the market and the industry, the Company was granted honors suchas "Leader of Charger Enterprise Standards" and "Full Member of China Communications StandardsAssociation".(II) Channel integration and lean marketing were fully promoted, with the expansion of allchannels, including e-commerce and ToB, accelerated
In 2021, the Company continued to promote marketing reforms according to the changes inconsumer needs, further establishing the ToC and ToB marketing systems and clarifying the synergy andcomplementarity strategies of channels including offline hardware, decoration, digital, and online e-commerce. The hardware channel was primarily for the sales of electric connection products such asadaptors, as well as circuit breakers and light source-related lighting products. Serving as a shared
channel for all categories in smart electrical lighting, the decoration channel focused on the sales ofdomestic decorative products, including wall switches and sockets, LED lighting, circuit breakers,bathroom heaters, smart door locks, smart clothes drying racks, and smart curtain machines. The digitalchannel was primarily for the sales of digital accessories.In terms of the consumer-side decoration channel, to meet the needs for one-stop purchase duringpre-decoration, the Company further pushed forward a specialized and comprehensive decorationchannel, introducing a range of electrical lighting products such as Bull wall switches and sockets, LEDlighting, circuit breakers, domestic electrical appliances, and smart door locks. At present, more than18,000 retail stores have been developed.
Meanwhile, lean marketing was further deepened in the decoration channel. Dealer operationquality was enhanced by establishing and improving the refined management and empowerment systemas well as by initiating the lean market planning for dealers. With a focus on sales outlets andhypermarkets, precision advertising was maintained, along with various new forms of digital marketing,to further improve brand power.For the consumer-side hardware channel with traditional advantages, the Company furthercultivated super sales outlets to improve the efficiency and output of a single store. In addition, with thehelp of dealers across China, it developed supermarkets and convenient stores, entered online deliveryplatforms, government-enterprise platforms, and B2B centralized procurement platforms, and acquiredmajor customers such as trading companies and office supply stores to continuously increase saleschannels and optimize the market structure.For the consumer-side digital channel, a range of forms was introduced, including mobile phonerepair stores, digital accessories stores, small supermarket and convenient stores, the points mall, and thegifts channel. The Company prioritized to improve the operation quality of terminal outlets, using CRMdigital tools, innovating the mini-app product management system, and upgrading the model of"distribution, delivery, visit and sales" to manage digital channel operation in real-time, efficient manner.
For business-side channels, the Company established three independent refined developmentsystems with decoration enterprises, engineering projects, and fine-decoration houses at the core.Business-side organization capability was rapidly improved by introducing professionals. Meanwhile,life cycle management covering research and development, production, delivery, and after-sales wasenhanced according to customer needs, thereby continuously fostering expertise in business-sidedevelopment and services. Specifically, regarding domestic decoration, the Company leveraged itsmulti-category product portfolio to rapidly develop the domestic and industrial decoration markets. Astable partnership was established with more than 120 national and regional well-known decorationcompanies and platforms such as Shengdu, Yenova, and KE holdings, covering more than 10,000decoration enterprise outlets. Revenue generated from business-side channels in 2021 increased by
175.20% year on year.
The Company actively promoted the e-commerce strategy of all-category, all-channel digitalmarketing, created new benchmark stores for new categories, strengthened the exploration and
integration of specialized dealer resource, and strove to improve the produce planning capabilities of thee-commerce channel. In terms of products, the increasingly-segmented changes in consumer needs weremonitored and examined in real time. As a result, products were accurately positioned to meet and createthe different needs of online consumers. In 2021, a range of trending new products such as rack sockets,retro power strips, and new energy charging plugs was launched. In terms of marketing, online brandcommunication, product recommendation, and inbound marketing were carried out holistically onDouyin, Xiaohongshu, Bilibili, and other digital platforms. A closed loop of resources inside and outsidethese websites was completed by helping them achieve scale increment, marketing innovation, andbrand building. According to the data of Info Master, the market shares of the Company's converters andwall switches and sockets on Tmall remained the first in 2021. In 2021, revenue generated from the e-commerce channel increased by 31.82% year on year.(III) Ongoing efforts were made to promote a lean, automated, and digital supply chain aswell as the transformation and upgrade to smart manufacturing in order to build a high-quality,low-cost, and efficient green supply chainIn 2021, with ongoing adherence to the philosophy of lean and flexible manufacturing, theCompany continued to improve the levels of factory lean, automation, and informatization, andintensified smart and green manufacturing capabilities to further enhance quality and cost advantages.It continued to promote lean improvement. The converter factory adopted the 3P methodology tocomplete relocation with minimal downtime, transfer and upgrade its manufacturing system, and quicklyreached the planned operation level. The wall switch and socket factory pushed forward regional/all-channel inventory sharing to build a channel logistics model of "logistics center + nationwide cloudwarehouse", reducing the average delivery time from seven to three days, transforming to a supply chaindriven by market needs. The LED lighting segment continued to push forward the building of leanfactories, with more than 60 lean lines built and renovated in 2021, achieving flexible production. Withthe mission of building a fast-response lean and flexible factory, the digital factory carried out OEE(Overall Equipment Efficiency) improvements. As a result, production efficiency and yield wereeffectively raised through SMT (Surface Mount Technology) program optimization, innovativeapplication of through-hole reflow process, SMED (Single-minute Exchange of Die) research, and PCBassembly optimization. The domestic electrical appliance factory used the 3P tool methodology tocreatively build U-shaped production lines of ceiling fan lamps and clothes drying racks. The newenergy electric connection factory built a new production workshop and continued to improve productquality by combining new product BPD improvements and lean improvements such as Standard Workand PSP quality foolproof and upgrades. The smart door locks segment innovated the leanmanufacturing model of "large line to Y-shaped line" to achieve a human-efficiency ratio faroutperforming the industry. Aiming at cost reduction, the hardware factory continued to explore theintegration of in-mold riveting technology and process. The overall equipment OEE reached a high levelthrough abnormal fast processing, and material and labor costs dropped further through material costreduction, mold development, and equipment technical transformation, as well as the advancement of
production processes such as head and tail material welding and unitization. Through lean tools such asBMS, SMED, TPM, and DM, the molding factory reduced the turnover inventory of injection moldedparts by 40%, shortened the delivery cycle by 50%, and built a range of industry-leading models such asdirect delivery with leveling logistics, plastic spray integration, and energy management.The Company firmly promoted automation upgrade and transformation to improve productefficiency. In 2021, the converter factory explored the opportunities for automation expansion. Its robothand application technology gained breakthroughs in testing, welding, assembly, and material supply. Atotal of 214 automation equipment was introduced to considerably improve equipment flexibility andavailability. The wall switch and socket factory continued to promote automation applications, with theproportion of automated production capacity further increased. Its labor efficiency and output per capitarose by 23.6% and 28%, respectively. It continued to deepen quality management reform, verified AI+visual and AI+ automatic testing, carried the first automatic detection of product appearance defects andswitch feel, and established an online quality inspection system. The LED lighting factory introducedautomatic plug-ins and inspected the product lines, increasing production efficiency by 52%. It alsoimproved its electronic manufacturing capabilities by introducing multi-automatic riveting machines andautomatic plug-in machines. The digital factory focused on developing highly flexible robot hands andvisual positioning technology and promoted their applications in electronic factories. By introducingrobot hand plug-ins and dispensing, automatic online testing, and automatic conformal coating, it builtthe first DIP automation benchmark line, increasing the maximum single product efficiency by 62%.The molding factory built an automatic injection molding factory with a scale of more than 1,000 unitsby introducing automatic code wheels, automatic packing, CCD, AGV, and self-developed robot hands.In the meantime, all factories continued to increase investment in informatization to build digitalfactories. In 2021, the converter factory completed the online information system for direct delivery andstrove to develop a direct delivery model for finished products. The wall switch and socket factorycompleted a multi-system collaborative smart delivery system which connected ERP (EnterpriseResource Planning, PLM (Product Life-cycle Management), WMS (Warehouse Management System),and QMS (Quality Management System) based on MES (Manufacturing Execution System), increasingthe single order delivery rate by 60%, reducing the inventory sluggish rate by 94%, and passing the on-site acceptance of the provincial digital factory project. With MES at the core, the molding factoryintegrated ERP, PLM, and other software and hardware systems to build a digital smart factory with"integration of design and manufacturing, automation of production and processing, transparentproduction process, and precise logistics control". The hardware factory strove to create a fully digitalhardware supply system by initiating a system to collect digital factory data.(IV) Intensive efforts were made to build the Bull Business System (BBS), push forwardinnovation in organization and business processes, and strengthen the digitization of a whole-industry chainIn recent years, Gongniu has deeply studied world-leading business management methods andaimed to build the Bull Business System (BBS) to reduce costs, improve efficiency, and promote
organizational change as well as achieve business innovation and growth, and implement strategic goals.This philosophy has become an important methodology and operation system for the Company to drivegrowth. In 2021, by improving its practices, the Company gained considerable improvements in QDC(quality, delivery, cost) indicators, created 12 best practices as the lean benchmark, exported 21 Gongniufundamental methodologies, developed 10 black-belt and 546 green-belt talents, and increased leantransformation from two points to three points. As a result, the Company's business managementcontinued to rise.
Currently, the BBS has empowered the entire value chain covering research and development,manufacturing, and sales. Starting from the strategic deployment of goal-driven breakthroughs, theCompany used the BBS methods (such as 3P rapid self-production, BPD trending product development,and lean marketing) to help enhance the competitiveness of core business and incubate strategic newbusinesses rapidly. In the meantime, the BBS was used to empower newly-acquired companies to helpthem fit in and develop in order to better gain strategic synergy.To further develop its business, the Company set up the Pearl River Delta Center in Shenzhen andthe Shanghai Center in Shanghai in 2021, two cities with intensive technology and talents. Thedevelopment and innovation, as well as business development of the smart and new energy segments,were carried out to solidify the foundation of strategic new businesses.
The Company continued to strengthen its teams by carrying out the ability development plan basedon the Bull Leadership Model for management talents at all levels. Meanwhile, with a large number ofoutstanding talents joining the Company, it strengthened the incentives in the restricted equity incentivescheme for core management and technical backbones as well as in the equity ownership scheme forspecial talents. By doing so, it integrated the interests of shareholders and the Company and the personalinterests of the core team, thereby better attracting and retaining talents that contribute to organizationaldevelopment.
In the meantime, the Company continued to vigorously push forward a digital whole-industry chainand firmly promote process management, process digitalization, and data asset management. In additionto the aforementioned digitization of the supply chain, MRO (Maintenance Repair and Operations) cameinto operation in 2021. The first regional cloud warehouse pilot was successfully run and began toexpand across the country. Digital marketing tools continued to empower dealers and outlets, withCRM+AI management achieved in all hardware and digital channels. Moreover, the Company furtherdeepened and optimized the e-commerce middle-office system and strengthened the coordination withexternal e-commerce platforms and their warehouse platforms in order to improve e-commerceoperation efficiency and boost the sustainable development of online business.II Introduction of the Industry where the Company Operates during the Reporting Period
1. Development stage and periodic characteristics of the industry
According to the Guidelines for the Industry Classification of Listed Companies revised by theCSRC in 2012, the business of the Company is assigned to “Manufacturing Industry of C38 ElectricMachine and Equipment”. Besides, according to the Industry Classification of National Economy (GB/T
4754--2017) issued by the National Bureau of Statistics, the main type of the Company's business isassigned to “Manufacturing Industry of C38 Electric Machine and Equipment”. Among them, adaptors,wall switches and sockets, and digital accessories are all assigned to the specific type of “3899 OtherNot Classified Manufacture of Electric Machine and Equipment”. LED lighting is assigned to thespecific type of “3872 Manufacture of Lighting Devices”.With the continuous increase of the resident discretionary income and consumption level in China,industries such as household appliances, consumer electronics, real estate and fixtures growcontinuously and rapidly, promoting the market demand for products in electric connection, electricallighting and digital accessories. Nowadays, China is the main producing base of adaptors across theworld. The brands of wall switches and sockets in China’s market are nationally leading as well asinternationally famous. In the field of lighting, China has become the workshop of the world withproducts sold to around 220 countries and regions. Comprehensively, electric connection products withadaptors as the core and electrical lighting products with wall switches and sockets and LED lighting asthe core have entered the mature period of industrial development. Among them, new energy electricity,household intelligence and household ecosystem have become the new development trend. Theconsumer electronics industry represented by smart phones and digital accessory industry both increaserapidly.
Products of electric connection, smart electrical lighting and digital accessories all have closeconnection to people’s lives with no obvious characteristics of industry cycle and regions. Among them,products of electric connection and smart electrical lighting have been affected by some factorsincluding cessation of business in major retail terminal end outlets (such as hardware stores, specializedmarkets and so on) and the reduction of housing fixtures during the Spring Festival. Therefore, the firstquarter always has the fewer sales volume all over the year.
2. The Company’s position in the industry
The Company is specialized in the civil electrical industry, and has been recognized as one of the“Top 100 Manufacturing Enterprises of Zhejiang Province” for a few consecutive years. Since itsestablishment in 1995, the reputation of the Bull brand has increased constantly and its sales volume hasalways been leading. In 2021, the brand was once again among the “China’s 500 Most Valuable Brands”released by World Brand Lab, with a brand value of RMB17.634 billion.
The Company always adheres to the operating philosophy of “Be Professional and Concentrated,Strive for No. 1 and Go Further”. According to the data provided by Info Master, in 2021, theCompany’s products such as adaptors and wall switches and sockets had the No. 1 online sales volumein Tmall market. In June 2021, the Company successively launched new products such as new energyvehicle charging plugs and charging points for e-commerce platforms, with the sales volume in a leadingposition among third-party brands.III Principal Activities of the Company’s Business during the Reporting Period
1. Principal activities
During the Reporting Period, the Company focused on three areas: electric connection, smartelectrical lighting and digital accessories. The main products of electric connection are adaptors (powerstrips), new energy vehicle charging plugs/points, data center PDU, busbars and so on. The products ofsmart electrical lighting mainly include wall switches and sockets, LED lighting, circuit breakers,bathroom heaters, smart door locks, smart clothes drying racks, smart curtain machines and so on. Theproducts of digital accessories mainly include mobile equipment chargers such as phones, portablechargers, outdoor portable chargers and so on.
The Company adheres to the vision of “Becoming a Leader in the International Civil ElectricIndustry”, the mission of “providing safe and comfortable electricity experience for customers” and thedevelopment philosophy of “be professional, concentrated and go further”. Since its establishment in1995, the Company has always adhered to the guidance of consumer demand and the base of productquality. The Company started to from the segmentation of power strips, constantly promoting theinnovation of functions, technology and design, and developing batches of new products popular amongconsumers. Focusing on innovation, the Company has the comprehensive advantages of product R&D,marketing, supply chain and branding. After years of developing and expanding, the Company hasformed three major business segments: electric connection, smart electrical lighting and digitalaccessories. Besides, it has also formed sustainable business layout in the fields of civil electricalindustry and lighting. Facing the consumers’ upgrading demand for smart and ecosystem-basedhousehold products, and the consumer trend of green and low carbon products, the Company set thestrategic goal of “Smart Ecosystem + New Energy Strategy” in 2021. Besides, the Company hasconstantly built firmer competitive edge in line with the trends of the times to achieve the business goaland vision.
2. Business models
(1) Procurement model: The procurement business of the Company mainly includes theprocurement of operating supplies including copper, silver, aluminum, tin, plastic granule, paper pulp,
| Electric Connection | Smart Electrical Lighting | Digital Accessories |
etc., and the procurement of non-operating supplies such as IT materials, administrative supplies and soon. The Company has established a procurement strategy with quality as the core. It has selected themain supplier through the mechanism of strict supplier entrance and regular examination and inspection.Besides, the Company established strategic cooperating relationships with the main suppliers to ensurethe quality and delivery. The Company has set up a procurement sharing platform with professionalpersonnel at the group level. It improves the ability of negotiating prices and debasing procurement coststhrough central procurement. Furthermore, the Company has optimized and improved the suppliersmanagement system, ERP system, manufacturing and storage system, etc. Meanwhile, it has improvedthe management of procurement and constantly improved the procurement efficiency.
The Company has performed central procurement of bulk raw materials such as copper, silver,aluminum, tin, plastic granules, paper pulp and so on. In addition, the Company has locked the tradingprice through ways such as forward hedging to reduce the uncertain risk brought by the price fluctuationin spot market of raw materials.
(2) Production model: The Company has adopted the manufacturing model of “Market Forecast +Safe Inventory”. Products are mainly self-made. Some new products and supporting products have beenmade by adopting the OEM manufacturing mode. Every factory is responsible for the production ofcorresponding products and parts. They have ensured product quality, efficient management and on-timedelivery at the same time. Meanwhile, the Company has constantly promoted the innovation ofmanufacturing mode. It has ensured the product quality, improved the flexible manufacturing efficiencyand reduced cost by continuously improving the level of specialization, automation and informatization.
(3) Sales model: The Company has established online and offline integrated sales model throughomnichannel. The offline sales model is mainly based on distribution and partially based on directselling. The Company has promoted the innovative offline sales mode of “distribution, delivery, visitand sales” in the field of civil electrical appliances and implemented refined management of channels.Through efficiently organizing and transferring dealer resources around the country, and long-termaccumulation, the Company has established distribution network with 1.1 million retail stores coveringnational urban and rural areas. The online channel has covered the mainstream e-commerce platformsthrough direct selling + distribution, with which we have made every effort to build the flagship storesinto a brand promotion window. The Company has actively implemented digital marketing to realize“diversion outside the online channel and sales inside the channel” with the help of each traffic inlet. Atthe same time, the Company has accelerated the development strength of ToB channels such asdecoration and engineering projects. Besides, it has actively explored overseas markets to speed up theglobal layout.IV Analysis on Core Competitiveness during the Reporting Period
√ Applicable □ Not applicable
The Company has always adhered to the core values of “Honest, Faithful, Professional andConcentrated”. It has gradually established strong and comprehensive competitive edges throughcontinual and comprehensive innovation and reform in product development, quality control, channel
development, marketing and supply chain construction. During the Reporting Period, the Company’score edges were continuously strengthened.(I) The Company has established an edge of innovative product development based onconsumer demand, enabling constant product launches.
For long, the Company has attached great importance to research on consumer demand and theinnovation of product planning and research. It has always viewed the promotion of consumerexperience as the primary goal in product research. The Company has established an integratedinnovation system and teams of forward research, product planning and research. It has created andapplied all kinds of new technologies, materials and crafts. Through the constant superposition of microinnovation, the Company has promoted a batch of products of electric connection, smart electricallighting and digital accessories with new and different characteristics in the aspects of design,performance, technology and function, which are popular among consumers. For years, the Companyhas participated in drafting 93 national standards, industry standards and association standards. It is thevice chairman unit of the Electrical Accessories and Household Controller Branch of the ChinaElectrical Equipment Industry Association. It is also the vice chairman unit of the National TechnicalCommittee for Standardization of Electrical Accessories. What’s more, it is the first electrical enterprisein the industry to draft the “Made in Zhejiang” standard and attain certification.As of the date of this report, the Company holds 1,956 valid patents. During the Reporting Period,the Company has applied for 451 patents and been granted 470 new patents. At the same time, theCompany is a national industrial design center approved by the Ministry of Industry and InformationTechnology of the People's Republic of China. It is also a unit of national postdoctoral workstation.(II) The Company has always adhered to the philosophy of winning through high quality andput in place an efficient quality control system.Since its founding, the Company has aimed to manufacture high-quality products. The idea ofwinning through high quality has gained support among all in the Company. The Company hasestablished a good brand image and reputation on the market with reliable product quality.
In the aspects of selecting raw materials, procurement, research and production process control,product testing and after-sales service, the Company has established a comprehensive and perfect qualitymanagement system of product planning -- product design -- procurement -- production in batch quantity-- post-sale strictly in line with the national standards, related laws and regulations, and enterprisestandards. In order to ensure the highly efficient operation of the quality management system, theCompany has been equipped with more than 900 professional personnel in quality management,experiment testing, analysis and quality control. It has also had more than 7,000 sets of testingequipment for experiment and production line automation, and established 10 high-standard laboratoriesfor R&D, development and quality testing in the industry. The related laboratories have acquired CNASNational Laboratory Certification, UL WTDP Laboratory Certification and other product certificatessuch as CCC, VDE, UL, NF, CE, and so on. It assures solid resources for management and control ofproduct quality.
With long-term accumulation, the Company has formed an efficient and systematic qualitymanagement and control system. It has achieved the management system certification of IS09001,ISO14001 and OHSAS18001. Besides, it has been successively awarded 20 prizes related to qualitysuch as “National Qualified Products of Stable Quality”, “Products with Reliable Quality”,“Demonstration Enterprise of Export Quality and Safety in China”, “Famous Brand Products inZhejiang” and “Ningbo Mayor Quality Award”.(III) The Company always adapts itself to market changes. Supported by the offlinemarketing network of more than 1.1 million outlets covering urban and rural areas, as well as aprofessional online marketing network, the Company has established a marketing systemfeaturing coordinative online and offline channels in the civil electrical industry.The Company has implemented an innovative offline sales model featuring “distribution, delivery,visit and sales” in the civil electrical industry. In China, it has already developed more than 750,000hardware channel retailers (including hardware stores, grocery stores, office supplies stores,supermarkets and so on), more than 120,000 specialized decoration and lamp decoration retailers, andmore than 250,000 digital accessories channel retailers. These channels have expanded the selling pointsto stores, large market places, professional markets in urban and rural areas, forming an offlinemarketing network hard to be duplicated. At the same time, the Company has established a professionale-commerce direct selling operational team and an online distributor system with strong ability.Nowadays, the Company has comprehensively entered the leading e-commerce platforms such as Tmall,Taobao, JD.com, Vipshop, Pinduoduo, and so on. It has efficiently explored dozens of online authorizeddistributors, actively implemented digital marketing and achieved “diversion outside the online channeland sales inside the channel” with the help of each traffic inlet.” According to the data provided by InfoMaster, in 2021, the Company’s products of adaptors and wall switches and sockets had the largestmarket share in Tmall.The high quality coordinated development between offline and online channels has helped theCompany establish a comprehensive, multilevel and stereoscopic marketing network, which is theadvantage of the Company to maintain sustainable development and competitiveness in the industry.Simultaneously, the Company has always adhered to the refined management of channels for years,developing established systems in the aspects of development, management, operation, and so on. It hashad the advantage of exploring new channels.(IV) The Company has put in place an integrated branding model with selling pointpromotion as the core, making “Bull” a household name.The Company has adhered to the branding model with selling point promotion as the core. Over thepast 20 years, the Company has made constant efforts to support the distributors to put the brand of Bullin retail stores and put advertising resources such as display inside and outside the stores, in so doing thebrand of Bull has been disseminated to cities, towns and counties. It has formed a simple, efficient andunique branding model. With an increasingly strong presence, Bull has become a household name.Meanwhile, the Company has constantly enriched the brand connotation and improved the brand’s
penetration and stickiness among different consumers with the help of diversified, intelligent and youngnew products and the Internet new media promotion.During the Reporting Period, the Bull brand was once again among the “China’s 500 MostValuable Brands” released by World Brand Lab. It has come out in front in the light industry group in2021 China Brand Value Evaluation Information launched by China Council for Brand Development.
(V) The Company boasts a supply chain system featuring advanced manufacturingtechnologies and automation, helping it stay competitive with respect to quality, efficiency and cost.
The Company has regarded manufacturing technology as the important carrier of corecompetitiveness in the supply chain. It has been equipped with a professional mold factory. The factoryhas designed, developed and manufactured all kinds of high-precision mold for the Company’sdiversified products by adopting high-precision tolerance grade technology, advanced automatic pouringtechnology and 3D print technology. At the same time, the factory has adopted manipulator technologyand post processing free technology to achieve automation of injection molding production and moldingintegration as well as to greatly improve the product quality, production efficiency and productioninnovation. At the same time, the Company has established a dust free electronic factory which hasadopted 3D image analysis technology and phase shifting AOI technology. The factory has also beenequipped with an independently developed four-axis manipulator. It has ensured the quality of PCBAboard products through image comparison after firing, greatly supporting the Company’s manufacturingof digital accessories, lighting and smart products.
The Company has constantly improved the fine, automatic and smart manufacturing level andestablished an industrial automatic team of integrated research, design and manufacturing. Theindependent development and design, and the assembly application capability of automatic devices andsmart assembly devices have constantly improved. The flexible production mode of “man-machineintegration” has been promoted rapidly. With the help of a leading automatic stereoscopic warehouseand smart sorting shipment system, the Company has achieved the mechanization and automation ofwarehouse work, which greatly improves the speed of distribution and delivery, and the customerresponse ability. The automatic stereoscopic warehouse has efficiently connected the front-endautomatic production. The smart manufacturing system for the whole process of feedstock -- production-- storage -- shipment has been established, providing solid support for the sustainable development ofthe Company’s business.
(VI) The Company has established the Bull Business System (BBS) with innovation andgrowth as the core, driving growth and breakthroughs to create a stream of business growthpoints.
The Company has continuously summarized and iterated, and built the unique Bull BusinessSystem (BBS) by importing and extracting the essence of advanced management modes at home andabroad, and combining it with its own best experience. It has also established a whole value chain ofR&D, manufacturing and marketing with value creation as the core, innovation increase as the key pointand cost reduction, efficiency increase as the base. Gongniu BBS takes “empowering everyone and
every business of Gongniu in pursuit of faster, higher and further growth” as the mission. It hasconstantly strengthened the system development and promoted the ability internalization. Focusing onthe Company’s strategic goal, Gongniu has fully used the BBS instrumental methodology mode (such as3P quick self-manufacturing, BPD development of popular products, fine marketing and so on).Gongniu BBS has driven the Company to constantly make breakthrough to promote the development ofnew business, and facilitate the cost reduction and efficiency increase of the traditional business, and theinnovation development. It has also promoted the achievement of high performance objectives, creatinga stream of business growth points for the Company.V Major Operations during the Reporting PeriodFor the Reporting Period, the Company recorded operating revenue of RMB12.385 billion, up
23.22% year-on-year; and a net profit attributable to its shareholders of RMB2.78 billion, up 20.18%year-on-year.(I) Analysis of Principal Operations
1. Changes in consolidated income statement and cash flow statement items
Unit: RMB
| Item | 2021 | 2020 | Change (%) |
| Operating revenue | 12,384,916,337.51 | 10,051,128,834.05 | 23.22 |
| Cost of sales | 7,808,540,666.84 | 6,018,606,539.57 | 29.74 |
| Selling expense | 560,187,002.80 | 517,846,532.13 | 8.18 |
| Administrative expense | 427,615,556.97 | 430,706,547.54 | -0.72 |
| Finance costs | -87,842,281.32 | -35,737,486.54 | Not applicable |
| R&D expense | 471,015,016.82 | 401,181,690.28 | 17.41 |
| Net cash generated from/used in operating activities | 3,014,326,741.14 | 3,437,202,711.65 | -12.30 |
| Net cash generated from/used in investing activities | -1,588,987,931.15 | -4,249,591,758.14 | Not applicable |
| Net cash generated from/used in financing activities | -700,808,446.71 | 1,925,600,149.55 | -136.39 |
The change in operating revenue was primarily driven by the steady growth in the traditional corebusiness and the fast growth in new businesses in the year.The change in cost of sales was primarily driven by the increased costs along with the increased revenue.The change in selling expense was primarily driven by the increased advertising and marketing expenses.No significant change occurred to administrative expense.The change in finance costs was primarily driven by the increased interest income from bank deposits inthe year.The change in R&D expense was primarily driven by the increased R&D investments.The change in net cash generated from/used in operating activities was primarily driven by the increasedprocurement amount as a result of the rising prices of bulk materials.The change in net cash generated from/used in investing activities was primarily driven by the decreasedpurchases of financial products in the year.The change in net cash generated from/used in financing activities was primarily driven by the arrival ofraised funds last year.Particulars about any significant change to the Company’s business nature, profit composition or sourcesin the current period.
□ Applicable √ Not applicable
2. Revenue and cost analysis
√ Applicable □ Not applicable
In 2021, the Company continued to implement individualized innovation in electricity scenariosand develop products based on customer demands for its electric connection business, and the business
saw steady growth as a result. For the smart electrical lighting business, the Company actively expandednew product categories and accelerated the construction of a smart home ecosystem with no-main-lamplighting as the core, which resulted in rapid growth in the business. The revenue from the digitalaccessories business showed a slight decline, primarily driven by the time-to-market of the new productsand the change in online and offline traffics.
(1) Principal operations by operating division, product category, operating segment and salesmodel
Unit: RMB
| Principal operations by operating division | ||||||
| Operating division | 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 (%) |
| Civil electrical appliances | 12,336,870,690.29 | 7,790,762,754.47 | 36.85 | 23.11 | 29.70 | Decrease by 3.21 percentage points |
| Principal operations by product category | ||||||
| Operating division | 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 (%) |
| Electric connection products | 6,413,208,065.02 | 4,300,354,553.32 | 32.95 | 15.58 | 27.33 | Decrease by 6.18 percentage points |
| Smart electrical lighting products | 5,550,984,279.10 | 3,218,338,798.71 | 42.02 | 36.90 | 39.62 | Decrease by 1.13 percentage points |
| Digital accessories | 372,678,346.17 | 272,069,402.44 | 27.00 | -10.79 | -16.11 | Increase by 4.63 percentage points |
| Principal operations by operating segment | ||||||
| Operating division | 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 (%) |
| Domestic | 12,059,354,004.16 | 7,536,455,016.87 | 37.51 | 22.71 | 28.91 | Decrease by 3.00 percentage points |
| Overseas | 277,516,686.13 | 254,307,737.60 | 8.36 | 43.06 | 58.41 | Decrease by 8.89 percentage points |
Note: Electric connection products include adaptors, electrical tape, new energy vehicle chargingplugs/points, wire coil and couplers. Smart electrical lighting products include wall switches and sockets,LED lighting, circuit breaker, bathroom heaters, smart door locks, smart clothes drying racks, smartcurtain machines and other smart ecosystem products. Digital accessories include digital accessories,digital gift boxes and outdoor portable chargers.The performance of the Company’s principal businesses by operating division, product category,operating segment and sales model:
① For electric connection products, the revenue amounted to RMB6,413 million, up 15.58% year onyear, while the cost of sales stood at RMB4,300 million, up 27.33% year on year. Supported by thebrand advantage and the hardware channel advantage, the electric connection business, as theCompany's core business, maintained a steady growth.
② For smart electrical lighting products, the revenue amounted to RMB5,551 million, up 36.90% yearon year, while the cost of sales stood at RMB3,218 million, up 39.62% year on year. In this business, theCompany accelerated the development of new business and decoration channels were expanded duringthe Reporting Period, achieving strong growth in all operations.
③ For digital accessories, the revenue amounted to RMB373 million, decrease 10.79% year on year,while the cost of sales stood at RMB272 million, decrease 16.11% year on year. This was mainlyderived from the impact of time-to-market of the new products and the change in online and offlinetraffics.
(2) Output and unit sales analysis
√ Applicable □ Not applicable
| Primary products | Unit | Output | Unit sales | Inventory | YoY change in output (%) | YoY change in unit sales (%) | YoY change in inventory (%) |
| Electricity connecting products | 0,000 pieces | 54,626.38 | 53,465.18 | 3,433.70 | 29.94 | 21.48 | 61.67 |
| Smart electrical lighting products | 0,000 pieces | 71,632.68 | 66,935.42 | 7,798.60 | 43.45 | 28.30 | 136.37 |
| Digital accessories | 0,000 pieces | 3,070.48 | 3,361.83 | 268.73 | -17.26 | -2.50 | -55.73 |
Notes:
In the current period, the inventories of electric connection products and smart electrical lightingproducts both showed a significant increase compared with last year, mainly due to the strategic re-stocking due to strong sales this year. In contrast, the inventory of digital accessories showed asubstantial decrease compared with last year, mainly due to product transition and optimization ofinventory management.
(3) Execution of significant purchase or sales contracts
□ Applicable √ Not applicable
(4) Cost analysis
Unit: RMB
| By operating division | |||||||
| Operating division | Cost category | 2021 | As % of total costs in 2021 (%) | 2020 | As % of total costs in 2020 (%) | Change in amount (%) | Note |
| Civil electrical appliances | Direct materials | 6,440,815,836.34 | 82.48 | 4,621,904,048.89 | 76.79 | 39.35 | |
| Direct labor cost | 494,515,730.18 | 6.33 | 451,436,344.13 | 7.50 | 9.54 | ||
| Manufacturing expense | 855,431,187.95 | 10.96 | 933,363,840.19 | 15.51 | -8.35 | ||
Notes:
The cost of direct materials increased during 2021 compared to 2020, primarily driven by the risingprices of bulk materials.
(5) Changes to the consolidation scope due to changed ownership in principal subsidiaries in theReporting Period
□ Applicable √ Not applicable
(6) Significant changes to the business scope or product or service range in the Reporting Period
□ Applicable √ Not applicable
(7) Major customers and suppliers
A. Major customersSales to the top five customers stood at RMB1,592.7148 million, accounting for 12.86% of the totalannual sales. Sales to the related-parties among the top five customers stood at RMB0, accounting for0% of the total annual sales.Indicate whether sales to a single customer accounted for over 50% of the total sales, there was any newcustomer in the top five customers, or the Company heavily relied on a few number of customers in theReporting Period.
□ Applicable √ Not applicable
B. Major suppliersPurchases from the top five suppliers stood at RMB2,261.6093 million, accounting for 22.23% of thetotal annual purchases. Purchases from the related-parties among the top five suppliers stood at RMB0,accounting for 0% of the total annual purchases.Indicate whether purchases from a single supplier accounted for over 50% of the total purchases, therewas any new supplier in the top five suppliers, or the Company heavily relied on a few number ofsuppliers in the Reporting Period.
□ Applicable √ Not applicable
Other information:
N/A
3. Expense
√ Applicable □ Not applicable
| Item | 2021 | 2020 | Amount of change | Change (%) |
| Selling expense | 560,187,002.80 | 517,846,532.13 | 42,340,470.67 | 8.18% |
| Administrative expense | 427,615,556.97 | 430,706,547.54 | -3,090,990.57 | -0.72% |
| R&D expense | 471,015,016.82 | 401,181,690.28 | 69,833,326.54 | 17.41% |
| Finance costs | -87,842,281.32 | -35,737,486.54 | -52,104,794.78 | Not applicable |
(1) Selling expense increased primarily driven by the increased advertising and marketing expenses.
(2) R&D expense increased primarily driven by the increased R&D investments.
(3) Finance costs decreased primarily driven by the increased interest income from bank deposits in the
year.
4. R&D investments
(1) R&D investments
√ Applicable □ Not applicable
Unit: RMB
| Expensed R&D investments in the current period | 471,015,016.82 |
| Capitalized R&D investments in the current period | |
| Total R&D investments | 471,015,016.82 |
| Total R&D investments as % of operating revenue | 3.80 |
| Capitalized R&D investments as % of total R&D investments |
(2) R&D personnel
√ Applicable □ Not applicable
| Number of R&D personnel | 1,431 |
| R&D personnel as % of total employees | 11.56 |
| Educational background of R&D personnel | |
| Educational background | Number of employees |
| Doctoral degree | 1 |
| Master’s degree | 76 |
| Bachelor’s degree | 783 |
| Junior colleges | 512 |
| Senior high school and below | 59 |
| Age structure of R&D personnel | |
| Age | Number of employees |
| Below 30 (exclusive) | 411 |
| 30-40 (inclusive of 30 and exclusive of 40) | 826 |
| 40-50 (inclusive of 40 and exclusive of 50) | 182 |
| 50-60(inclusive of 50 and exclusive of 60) | 12 |
| 60 and beyond | |
(3) Other information
√ Applicable □ Not applicable
The Company, as a national industrial design center and a national postdoctoral workstation, hasalways attached importance to product development and technological innovation. By establishing aleading scientific research innovation platform and innovating mechanism, the Company focuses on theresearch of industry basic and key common technologies to continuously improve product developmentand technological innovation capability. Meanwhile, with great emphasis on cultivation and introductionof talents of R&D and product planning as well as adhering to market demand-oriented principle, theCompany continues to strengthen the insight and research on the potential consumer demands andscenario-based requirements, constantly expands the areas by launching products that meet consumerdemands to lead the industry development. In addition, the Company continues reinforcing theconstruction of the standardization system and the strategic layout of intellectual property rights, andconstantly promotes open innovation to set an excellent example with respect to innovation capability.
(4) Reasons for any significant change to the composition of R&D personnel and the impact on theCompany
□ Applicable √ Not applicable
5. Cash flows
√ Applicable □ Not applicable
| Item | 2021 | 2020 | Amount of change | Change |
| Net cash generated from/used in operating activities | 3,014,326,741.14 | 3,437,202,711.65 | -422,875,970.51 | -12.30% |
| Net cash generated from/used in investing activities | -1,588,987,931.15 | -4,249,591,758.14 | 2,660,603,826.99 | 62.61% |
| Net cash generated from/used in financing activities | -700,808,446.71 | 1,925,600,149.55 | -2,626,408,596.26 | -136.39% |
(1) Net cash generated from operating activities decreased primarily driven by the increasedprocurement amount as a result of the rising prices of bulk materials.
(2) Net cash used in investing activities decreased primarily driven by the decreased purchases offinancial products in the year.
(3) Net financing cash inflow last year changed to outflow in the current year primarily driven by thearrival of raised funds last year.
(II) Significant changes in profit incurred by non-core business
□ Applicable √ Not applicable
(III) Analysis of assets and liabilities
√ Applicable □ Not applicable
1. Assets and Liabilities
Unit: RMB
| Item | Closing amount | As % of closing total assets (%) | Opening amount | As % of opening total assets (%) | Change (%) | Note |
| Held-for-trading financial assets | 5,926,600,000.00 | 38.30 | 2,863,300,000.00 | 23.02 | 106.98 | |
| Derivative financial assets | 3,613,050.00 | 0.02 | 27,159,170.00 | 0.22 | -86.7 | |
| Notes receivable | 750,723.35 | 0.00 | Not applicable | |||
| Receivables financing | 927,023.00 | 0.01 | 161,562.83 | 0.00 | 473.78 | |
| Other receivables | 195,924,505.99 | 1.27 | 126,043,394.07 | 1.01 | 55.44 | |
| Inventories | 1,376,987,122.60 | 8.90 | 788,240,060.31 | 6.34 | 74.69 | |
| Other current assets | 1,126,520,898.44 | 7.28 | 2,741,389,939.38 | 22.04 | -58.91 | |
| Right-of-use assets | 18,809,799.71 | 0.12 | Not applicable | |||
| Long-term prepaid expense | 17,750,835.99 | 0.11 | 3,150,000.00 | 0.03 | 463.52 | |
| Deferred income tax assets | 116,456,369.78 | 0.75 | 66,903,177.28 | 0.54 | 74.07 | |
| Notes payable | 2,333,774.75 | 0.02 | Not applicable | |||
| Accounts payable | 1,701,686,564.14 | 11.00 | 1,285,822,466.71 | 10.34 | 32.34 | |
| Contract liabilities | 437,999,921.93 | 2.83 | 333,741,780.65 | 2.68 | 31.24 | |
| Other payables | 430,813,760.10 | 2.78 | 219,091,086.62 | 1.76 | 96.64 | |
| Other current liabilities | 56,939,989.86 | 0.37 | 43,285,234.93 | 0.35 | 31.55 | |
| Current portion of non-current liabilities | 673,911,937.53 | 4.36 | Not applicable | |||
| Long-term borrowings | 160,037,333.33 | 1.29 | -100 | |||
| Lease liabilities | 5,089,837.39 | 0.03 | Not applicable | |||
| Other non-current liabilities | 46,125,187.50 | 0.30 | 28,037,156.40 | 0.23 | 64.51 |
| Treasury shares | 80,711,540.00 | 0.52 | 46,728,594.00 | 0.38 | 72.72 | |
| Other comprehensive income | 7,537,390.37 | 0.05 | 28,863,769.91 | 0.23 | -73.89 | |
| Retained earnings | 6,010,878,918.97 | 38.85 | 4,431,669,986.31 | 35.63 | 35.63 |
Other notes:
Held-for-trading financial assets increased primarily driven by the increased closing balance of financialproducts with increased floating income.Derivative financial assets decreased primarily driven by the decreased carrying closing amount offloating income of hedges.Notes receivable increased primarily driven by the increased closing balance of trade acceptance notesreceivable.Receivables financing increased primarily driven by the increased closing balance of bank acceptancenotes receivable.Other receivables increased primarily driven by the increased closing balance of security depositpayments.Inventories increased primarily driven by the strategic re-stocking at the end of the year.Other current assets decreased primarily driven by the decreased closing balance of structured depositsheld.Right-of-use assets increased primarily driven by the adoption of the new accounting standard for leases.Long-term prepaid expense increased primarily driven by the new addition of the equity incentives thathad been granted to awardees under the special talent stock ownership plan but were not yet amortized.Deferred income tax assets increased primarily driven by the closing accrued deductible temporarydifferences arising from sales discounts.Notes payable increased primarily driven by the increased closing balance of notes payable.Accounts payable increased primarily driven by the increased procurement in the year.Contract liabilities increased primarily driven by the increased closing amount of advancements fromcustomers.Other payables increased primarily driven by the increased closing balance of accrued sales discounts.Other current liabilities increased primarily driven by the increased output VAT to be written off.Current portion of non-current liabilities increased primarily driven by the increased current portion oflong-term borrowings.Long-term borrowings decreased primarily driven by the transfer of long-term borrowings to the currentportion of non-current liabilities.Lease liabilities increased primarily driven by the adoption of the new accounting standard for leases.Other non-current liabilities increased primarily driven by the increased repurchase obligations ofrestricted shares that were over one year.Treasury shares increased primarily driven by the increased equity incentives.Other comprehensive income decreased primarily driven by the decreased net gain (exclusive of tax)recognized on futures contracts for hedging purposes.Retained earnings increased primarily driven by the increased profit in the year.
2. Overseas assets
□ Applicable √ Not applicable
3. Major restricted assets as at the period-end
□ Applicable √ Not applicable
4. Other information
□ Applicable √ Not applicable
(IV) Industry Environment Analysis
√ Applicable □ Not applicable
For details, see “(I) Industry landscape and trends” under “VI Outlook Discussion and Analysis” ofPart III Management Discussion and Analysis”.
(V) Investments madeEquity investments in other entities
□ Applicable √ Not applicable
1. Significant equity investments
□ Applicable √ Not applicable
2. Significant non-equity investments
√ Applicable □ Not applicable
For details, see “(2) Changes in significant constructions in progress in the current period” under “22.Construction in progress” in “VII Notes to the Consolidated Financial Statements” of “Part X FinancialStatements”.
3. Financial assets measured at fair value
√ Applicable □ Not applicable
For details, see “XI Items Measured at Fair Value” in “Part II Corporate Information and Key FinancialInformation”.
4. Progress on any major asset restructuring in the Reporting Period
□ Applicable √ Not applicable
(VI) Sale of significant assets and equity investments
□ Applicable √ Not applicable
(VII) Principal subsidiaries
√ Applicable □ Not applicable
1. Principal subsidiaries
Unit: RMB’0,000
| Full name of subsidiary | Principal activities | Registered capital | Total assets | Net assets | Operating revenue | Net profit |
| Ningbo Gongniu Electrics Co., Ltd. | Household appliances manufacturing; manufacturing of mechanical and electrical equipment; manufacturing of distribution switch control equipment; lighting apparatus manufacturing; general merchandising of hardware products; electrical materials manufacturing; manufacturing of electronic components and electromechanical components and equipment; manufacturing of intelligent home consumption equipment; communication equipment manufacturing; network equipment manufacturing; IoT equipment manufacturing; technical services, technical development, technical consulting, technical communication, technical transfer, and technical promotion (business activities shall be conducted independently in accordance with laws with the business license, except the items that require approval in accordance with laws). Items permitted: Import and export of products; and import and | 10,000 | 408,822.28 | 141,799.30 | 397,884.87 | 134,317.07 |
| export of technologies (business activities that require approval in accordance with laws shall be subject to the approval by relevant authorities. Specific business items are indicated on the approval results). | ||||||
| Ningbo Gongniu Precision Manufacturing Co., Ltd. | Manufacturing, processing and sales of mold, plastic products, hardware accessories, and electronic components. | 10,000 | 84,080.80 | 14,783.30 | 277,083.95 | 3,508.58 |
| Ningbo Gongniu Electric Sales Co., Ltd. | General merchandising, retailing and online sales of electrical materials, electronic products, hardware products, household appliances, communication apparatus, lamps, and articles of everyday use; import and export businesses of self-owned and commissioned goods and technologies (excluding those limited or prohibited by state laws and regulations). (business activities that require approval in accordance with laws shall be subject to the approval by relevant authorities) | 10,000 | 186,086.35 | 8,271.96 | 1,170,818.39 | 26,553.98 |
2. New subsidiaries
Unit: RMB’0,000
| Full name of subsidiary | Principal activities | How it was obtained | Registered capital | Closing net assets | Net profit in the current period |
| Hainan Dacheng Supply Chain Management Co., Ltd. | Import and export of products; import and export of technologies; import-export agency services; and patent agency (business activities that require approval in accordance with laws shall be subject to the approval by relevant authorities) General items: Enterprise management; supply chain management services; consultation planning services; technical services, technical development, technical consulting, technical communication, technical transfer, and technical promotion; human resource services (excluding job agency activities and labor dispatch services); IT consultant services; information consultant services(excluding the information consultant services requiring any license); sales of electronic products; general merchandising of hardware products; sales of daily-use goods; sales of lamps; sales of plastic products; sales of non-ferrous alloy; sales of packaging materials and products; sales of mechanical equipment; sales of household appliances; sales of | Incorporated | 1,000 | -256.01 | -1,934.04 |
| communication equipment; sales of office equipment; sales of intelligent power transmission and distribution and control equipment; sales of engineering plastics and synthetic resins (exclusive of licensing businesses, independent operation of businesses that are non-prohibited or non-restricted by laws and regulations is allowed) | |||||
| Ningbo Gongniu Intelligent Technology Co., Ltd. | Technical services, technical development, technical consulting, technical communication, technical transfer, and technical promotion; manufacturing of hardware products; manufacturing of security protection equipment; manufacturing of security protection equipment; manufacturing of information security equipment; lighting apparatus manufacturing; development of artificial intelligence application software; information system operation and maintenance services; technology consultant services for the public service platform of artificial intelligence; import and export of technologies; import-export agency; import and export of products; software development; manufacturing of distribution switch control equipment; manufacturing of electronic components and electromechanical components and equipment; manufacturing of power electronic devices and components; communication equipment manufacturing; manufacturing of metalwork for security and fire control; manufacturing of intelligent home consumption equipment; furniture instalment and repairing services; instalment services of household appliances; repairing of electrical equipment; repairing of metalwork (business activities shall be conducted independently in accordance with laws with the business license, except the items that require approval in accordance with laws). | Incorporated | 1,000 | 99.84 | -0.16 |
(VIII) Structured entities controlled by the Company
□ Applicable √ Not applicable
VI Discussion and Analysis on the Company’s Futrue Development(I) Industry landscape and trends
√ Applicable □ Not applicable
Data from the National Bureau of Statistics show that in 2021, China’s GDP increased by 8.1%year on year; the sales area of commercial housing in China was 1,794.33 million square meters, a year-on-year increase of 1.9%; sales reached RMB18,193 billion, an increase of 4.8% year on year. In 2021,the nationwide per capita disposable income of residents reached RMB35,128, an increase of 8.1% yearon year; the per capita residential consumption expenditure was RMB5,641, a year-on-year increase of
8.2%. In 2021, both the national GDP and per capita disposable income of residents have achieved asteady growth of over 8%. At the same time, the Government Work Report points out that in 2022, it issignificant to strive to meet people's housing needs, support the commercial housing market to bettermeet the reasonable housing needs of buyers, keep the prices of land and housing as well as marketexpectations stable, and promote a virtuous circle and healthy development of the housing market byadopting city-specific policies. It is expected that the steady growth of the national economy and thesmooth operation of the real estate industry can provide a sound environment for the Company'ssustained and healthy development.The domestic lighting market size is more than RMB200 billion, but the industrial pattern isscattered. Under the dual influence of the pandemic and rising prices of bulk raw materials, small andmedium-sized lighting enterprises are facing greater survival pressure while the advantages of leadingenterprises become more prominent. With the popularization of LED lighting technology, consumerspay more attention to luminous efficiency and light quality. Intelligent transformation has become thedirection of revolution in the next stage of the lighting industry. Gongniu will integrate consumers'pursuit of minimalist decorating style to increase its business on smart no-main-lamp lighting productsand quickly improve its ability of key lines through internal technology research and development andthe integration of external resources to grasp the opportunities brought by intelligent transformation andmake breakthroughs.
With the increasing maturity of smart home solutions on the supply side and the gradual increase ofconsumer acceptance on the demand side, the smart home industry is moving forward from the stage ofsingle smart product to the stage of whole-house intelligence. According to the monitoring data ofAowei Cloud Network, in 2021, the scale of refined decoration projects supporting smart homes inChina's residential real estate reached 2.547 million sets, and the smart home configuration rate reached89%, increased by 4.8 percentage points over last year. There are huge market opportunities behind therapid development of smart homes. The Company's smart ecosystem-based single products have beenlaunched constantly. Accelerating the promotion of whole-house smart home ecosystem with no-main-lamp lighting products as the core will be the Company's next key development direction.2021 has witnessed an explosive growth in the new energy vehicle industry. According to the ChinaAssociation of Automobile Manufacturers, in 2021, the sales of new energy vehicles in China amountedto 3.521 million, a year-on-year increase of 1.6 times, taking 13.4% of the total vehicle sales, comparedwith a share of 5.4% in 2021. According to the New Energy Automobile Development Plan (2021-2035)issued by the General Office of the State Council, by 2025, the sales of new energy vehicles will reachabout 20% of the total sales of new vehicles, and by 2035, pure electric vehicles will become themainstay of new sales vehicles, and all vehicles used for public services will be electrically powered.With the support of policies and technologies, the new energy vehicle industry in China will accelerateits growth. The Company will keep up with the development trend of the industry and quickly arrangenew energy vehicle charging plugs and charging points, which has achieved a good momentum. In thefuture, the Company will accelerate technical reserves and product innovation based on its existing new
energy vehicle charging plugs and charging points, actively explore new business, and seize thehistorical opportunities for the development of the new energy industry.With the popularization and upgrading of smart devices, consumers have put forward higherrequirements for the battery life of these devices. As the battery capacity of smart devices graduallyincreases, the slow charging speed has become the biggest pain point for consumers. Fast chargingtechnology can complete charging in a short time, providing consumers with a better chargingexperience, and therefore, it will become the new trend in the future. In addition, as the popularity ofoutdoor leisure activities and the need for emergency power supply in case of natural disasters continueto grow, the market of portable energy storage products expands rapidly and is developing towards highpower, light weight, and intelligence. The Company's digital accessories segment will focus on fastcharging products and portable energy storage products to speed up the business layout.(II) Development strategies of the Company
√ Applicable □ Not applicable
With the vision of “Becoming a Leader in the International Civil Electric Industry”, the Companywill grasp the opportunities brought by consumption upgrading, intelligent transformation, and newenergy. To be specific, it will focus on smart ecosystem and new energy, lay out its business plan basedon its core advantages, and build the whole-house smart ecosystem with no-main-lamp lighting productsas the core, while contributing to the development of the new energy industry by providing consumerswith more and better electrical products and services.(III) Business plans
√ Applicable □ Not applicable
In order to achieve its operating goals in 2022, the Company will work on the following priorities:
1. The electric connection business comprising adaptors is the foundation of the Company. TheCompany will continue to focus on customer needs to drive scenario-based and individualizedinnovation so as to provide consumers with electric connection products for home, office, commercialand other specific scenarios and strengthen its position as a leader and expert in power strips. TheCompany will focus on new electrical appliances for the layout of electric connection products andtechnical reserves, accelerate the arrangement of new energy vehicle charging plugs and charging pointsin the field of new energy electric connection, and enrich product lines quickly to meet the demandbrought by the rapid increase of new energy vehicles in urban and rural markets. The Company will alsoleverage its comprehensive advantages in products, channels, supply chain, and brand to strive toprovide consumers with quality, reliable, and safe products. Moreover, the Company will speed up theresearch and development of cutting-edge technologies in the fields of fast charging and storagecharging to provide consumers with more and better electrical products and services.
2. With respect to the smart electrical lighting business, the Company will focus on the needs ofconsumption upgrade for home improvement and put forward the whole-house smart home solutionswith no-main-lamp lighting products as the core. As for wall switches and sockets, the Company willfurther cultivate the decorative product line and at the same time, produce switches that match the no-main-lamp lighting products. It will also quickly arrange smart products and lead the consumption
upgrade of the industry as a whole. The lighting business will continue to enrich the basic lightingproduct line and produce decorative lighting products for different market needs; the light sourcebusiness will focus on such subdivided fields as outdoor, office, and commercial chain to further lay outthe product line; no-main-lamp lighting products' core function is to provide consumers with acomfortable light space and the business of no-main-lamp lighting products will be promoted; mobilelighting will focus on the writing scenario and provide consumers with eye-caring lamps that are “eye-friendly and ghosting-free”. In terms of domestic electrical appliances, the Company will focus on suchdimensions as intelligent transformation and scenario expansion to advance product innovation and leadthe development of the industry through innovation and quality. The circuit breaker business will remainsafety-oriented, continuously research and develop and manufacture products based on new technologyplatforms, develop and improve power distribution and industrial control product lines to expand saleschannels and customer groups. The smart ecosystem business will focus on "Cloud-Edge-End" tocontinue to research and develop and integrate resources, strengthen the supporting role of the BullCloud platform for various businesses, optimize smart interactive experience, and leverage itscomprehensive advantages in products, channels, supply chain, and brand to accelerate the constructionof the whole-house smart ecosystem with no-main-lamp lighting products as the core.
3. In the digital accessories business, the Company will adhere to the third-party boutique strategy,focus on such categories as digital fast charging and outdoor power supply to create a fine-looking fastcharging series equipped with advanced technology, and at the same time, take outdoor power supply asa starting point to accelerate the development and arrangement of outdoor energy storage business.
4. The Company will deepen the reform of decoration channels, expand new channels on the basisof the specialty stores and comprehensive stores, focus on digging deep into lower-tier markets, and atthe same time, establish the luminous efficiency design capability system of smart no-main-lamplighting products and distributor market planning and after-sales installation capability system. TheCompany will strengthen the efforts to expand business-side channels, build a professional business-sideservice provider system, quickly penetrate into home improvement, engineering and real estatebusinesses through multi-category and systematic product solutions to create benchmark projects; use e-commerce channels to keep up with changes in consumer buying habits, improve product planningabilities, strengthen efforts in digital marketing, and increase the exposure frequency and conversion rateof various traffic platforms to promote the coordinated development of all categories. At the same time,the CRM+AI system will be covered for distributors to improve the digital management ability ofdistributors and retail stores.
5. In 2022, the Company will upgrade its brand strategy comprehensively and focus on improvingits brand power on the basis of its existing advantages in product power and channel power. Whilecontinuing to consolidate and strengthen its leading role in industries of safety sockets and decorativeswitches, it will also enhance consumer awareness and enrich brand connotation in more new categories.
6. The Company will continue to optimize hedges and take other measures to reduce the costimpact caused by sharp fluctuations in raw materials; further tap its advantages in electronics, hardware,
and mold components to continue to empower itself using technology; promote digital transformation,construct an end-to-end supply chain system, and promote the coordinated cooperation of research,production, and sales; continue to implement the cloud warehouse project, gain insight into marketchanges, optimize the coordination of production and sales, and improve the comprehensivecompetitiveness of the supply chain.
7. The Company will refine the Bull Business System, speed up the construction of the whole valuechain business management system, and achieve the overall improvement of the Company's productpower, sales power, and brand power. Further, it will strengthen the construction of talent teams and theinnovation of organizational mechanisms, move close to talent-gathering cities, effectively integrate theadvantages of talents, technology, and supply chain, and continuously improve the business innovationcapability and value creation capability.(IV) Possible risks
√ Applicable □ Not applicable
1. Risk associated with the sluggish macroeconomic growth
Domestic and overseas political and economic environments are undergoing profound changes. Themain products of the Company are consumer goods widely used at home, office, and other placesneeding electricity. The cyclical fluctuation of economy will directly influence the actual discretionaryincome of consumers, consumers' income structure, and the consumer confidence index. Then,consumers' demand for consumer goods including electric connection products, smart electrical lightingproducts, and digital accessories will be influenced. If the growth rate of the domestic macroeconomy issluggish or slides, it will lead to a decrease in discretionary income and the power of consumption ofresidents. It will also decrease consumers' demand and purchasing capacity for the Company's products.As a result, the business development and the growth of results of the Company.
2. Risk of intensified market competition
The civil electrical industry demonstrates full market competition. There are not only manydomestic enterprises, but also some famous international brands. Meanwhile, adaptors, wall switchesand sockets, and other products, as the main controlled entrance of future smart home, also haveattracted many powerful new enterprises to join in the competition. In the future, the civil electrical andlighting industry is expected to remain its relatively fierce competition. There are uncertainties in thechanges of market competition. If the Company cannot adapt to the new competition situation, intensifyand expand its original competition advantages, it will face the risk of losing market shares.
3. Risk of the new business development failing to reach expectation
At the time of intensifying and expanding the original competition advantages, centering on thescenarios of electric vehicle charging and home decoration, the Company developed new business suchas charging plugs/points, circuit breakers, bathroom heaters, smart door locks, smart clothes drying racks,and smart curtain machines. However, considering uncertain factors including the development trend,market competition, and changes of consumer preferences in relevant fields, the possibility that thedevelopment of new businesses will fail to reach expectation cannot be excluded.
4. Risk of the new channel development failing to reach expectation
According to the differences and changes of consumers' purchasing habits, the Company continuedto improve the layout of channels, and vigorously extended the business-side business channel withdecoration companies as the core. However, the overlap of this channel and current competitive channelsis relatively low. The possibility that the development of new channels will fail to reach expectationcannot be excluded.
5. Risk of fluctuations in main material prices
The main materials that the Company needs for production are copper, plastic, assembly, hardware,packaging materials, electronic parts, etc. There is certain relevance between the procurement prices ofraw materials and the prices of bulk commodities such as copper and plastic. The procurement prices ofraw materials have a relatively big impact on the cost of sales of the Company. If the procurement pricesof raw materials rise significantly or fluctuate sharply in the future, it will be harmful to the cost controlof the Company and then influence the Company's results.
6. Risk of failing to recover a small amount of receivables
There is a small amount of undue loans for some real estate enterprises in other receivables of theCompany. The Company has disclosed it in the periodic report and the bad debt provision has beenaccrued with prudence. The possibility that such receivables will not be recovered cannot be excluded.(V) Other information
□ Applicable √ Not applicable
VII Explanation of circumstances and reasons for non-disclosure by the company inconsiderationof inapplicable regulations,state secrets and commercial secrets.
□ Applicable √ Not applicable
Part IV Corporate GovernanceI Overview of Corporate Governance
√ Applicable □ Not applicable
In accordance with the requirements of the Company Law, the Securities Law, the Code ofCorporate Governance for Listed Companies and other relevant national laws and regulations, and basedon the business development, the Company has established a governance structure consisting of theGeneral Meeting of Shareholders, the Board of Directors, the Supervisory Committee and the SeniorManagement, and formed a mechanism of mutual coordination and checks and balances among theauthority, decision-making body, supervisory body and the management to promote modern corporategovernance and system building.
In accordance with the relevant laws and regulations and the Articles of Association, the Companyhas formulated policies such as the Rules of Procedure of the General Meeting of Shareholders, theRules of Procedure of the Board of Directors, the Rules of Procedure of the Supervisory Committee, theWork Policy for Independent Directors, the Working Rules for the Board Secretary, the Working Rulesfor the General Manager (President), the Related-Party Transaction Management System, ForeignInvestment Management System and the External Guarantee Management System, and amended the
Articles of Association during the Reporting Period to comply with the latest laws and regulations andfurther improve the management level.
(I) General Meeting of ShareholdersThe General Meeting of Shareholders of the Company has clear duties and rules of procedure,which are effectively implemented. The procedures for convening, holding and proposing the GeneralMeeting of Shareholders of the Company are in line with laws and regulations and the Company'sinternal systems and other relevant regulations.(II) Directors and the Board of DirectorsThe duties of the Board of Directors of the Company are clear and all directors are able to performtheir duties conscientiously and responsibly. The procedures for convening and holding the meeting ofthe Board of Directors are in line with relevant laws, regulations and systems.
During their tenure, all directors were diligent and attended the meeting of the Board of Directorsconscientiously and responsibly. They were familiar with the relevant laws and regulations, and able tofully exercise and perform their rights, obligations and responsibilities as directors, safeguarding thelegitimate rights and interests of the Company and all shareholders.In order to meet the needs of the Company's development, the Company has set up specializedcommittees under the Board of Directors, including the Strategy Committee, Nomination Committee,Remuneration and Appraisal Committee and Audit Committee. Except for the Strategy Committee, allother specialized committees are chaired by independent directors, who play an important role in theperformance of major decision-making and monitoring functions by the Board of Directors, making theCompany's decision-making more efficient, standardized and scientific.(III) Supervisors and the Supervisory CommitteeThe duties of the Supervisory Committee of the Company are clear and all supervisors are able toperform their duties conscientiously and responsibly. The procedures for convening and holding themeeting of the Supervisory Committee are in line with relevant laws, regulations and systems.
During the tenure, the Supervisors were diligent, actively attended the meetings of the SupervisoryCommittee of the Company and performed their duties conscientiously. In line with the attitude of beingresponsible to shareholders, they supervised the financial affairs of the Company as well as the legalityand compliance of the performance of duties by directors and senior management personnel of theCompany, and safeguarded the legitimate rights and interests of the Company and all shareholders.
In addition, the Company has established a relatively sound internal management and controlsystem, and has formulated relevant management systems in the areas of technology research anddevelopment, procurement management, safe production, marketing management, quality control andfinancial accounting. It conducted internal audit and supervision of the organization and management,operating activities, financial revenues and expenditures and economic benefits of its subsidiaries, andregularly inspected and evaluated the establishment and implementation of its internal control system toensure the effectiveness of internal control.
Indicate whether there was any material incompliance with the applicable laws and regulations, as wellas the CSRC’s requirements in corporate governance. If yes, please explain.
□ Applicable √ Not applicable
II Specific Measures Taken by the Controlling Shareholder and Actual Controller to Guaranteethe Asset, Personnel, Financial, Organizational and Business Independence of the Company, aswell as Solutions, Progress and Subsequent Plans when the Company’s Independence IsIntervened
√ Applicable □ Not applicable
The Company is independent of its controlling shareholder in assets, personnel, finance, organization,business, etc.
Indicate whether the controlling shareholder, the actual controller, or any entity under their control isengaged in the same or similar business with the Company. Please explain the impact of horizontalcompetition or any significant change to horizontal competition on the Company, solutions taken,progress and subsequent plans.
□ Applicable √ Not applicable
III General Meetings of Shareholders
| Meeting | Date | Index to disclosed resolutions | Disclosure date | Resolutions |
| The First Extraordinary General Meeting of Shareholders of 2021 | 7 January 2021 | http://www.sse.com.cn | 8 January 2021 | The Proposal on the Change of Registered Capital and Amendment to the Articles of Association, Proposal on the Election of Non-Independent Directors of the Second Board of Directors of the Company, Proposal on the Election of Independent Directors of the Second Board of Directors of the Company and Proposal on the Election of Non-Employee Supervisors of the Second Supervisory Committee of the Company were approved by the resolution. For details, please refer to the Announcement on the Resolutions of the First Extraordinary General Meeting of Shareholders of 2021 (Announcement No.: 2021-001) published by the Company on the website of the Shanghai Stock Exchange. |
| The 2020 Annual General Meeting of Shareholders | 20 May 2021 | http://www.sse.com.cn | 21 May 2021 | The Proposal on the Work Report of the Board of Directors in 2020, Proposal on the Work Report of the Supervisory Committee in 2020, Proposal on the Financial Final Account Report of 2020, Proposal on the Annual Report and its Summary for 2020, Proposal on the Profit Distribution Plan for 2020, Proposal on the Renewal of the Annual Auditor for 2021, Proposal on the Use of Equity Funds for Entrusting Wealth Management, Proposal on the Compensation Scheme for Directors, Proposal on the Compensation Scheme for Supervisors, Proposal on the Restricted Share Incentive Scheme for 2021 (Draft Revised) and its Summary, Proposal on the Management Measures for the Assessment of the Restricted Share Incentive Scheme for 2021 (Revised), Proposal on the Request to the General Meeting to Authorize the Board of Directors to Handle Share Incentive-Related Matters, Proposal on the Change of Registered Capital and Amendment to the Articles of Association and Proposal on the Election of Non-Independent Directors of the Second Board of Directors of the Company were approved by the resolution. For details, please refer to the Announcement on the Resolutions of the 2020 |
| Annual General Meeting of Shareholders (Announcement No.: 2021-048) published by the Company on the website of the Shanghai Stock Exchange. | ||||
| The Second Extraordinary General Meeting of Shareholders of 2021 | 15 November 2021 | http://www.sse.com.cn | 16 November 2021 | The Proposal on Changing Some Investment Projects with Raised Funds and Proposal on the Change of Registered Capital and Amendment to the Articles of Association were approved by the resolution. For details, please refer to the Announcement on the Resolutions of the Second Extraordinary General Meeting of Shareholders of 2021 (Announcement No.: 2021-102) published by the Company on the website of the Shanghai Stock Exchange. |
Extraordinary general meetings of shareholders convened at the request of preference shareholders withresumed voting rights:
□ Applicable √ Not applicable
Notes to general meetings of shareholders:
√ Applicable □ Not applicable
On 7 January 2021, the Company held the First Extraordinary General Meeting of Shareholder of2021, and deliberated and approved the proposals to change the registered capital and amend the Articlesof Association, elect the directors of the Second Board of Directors of the Company and elect the non-employee supervisors of the Second Supervisory Committee of the Company.On 20 May 2021, the Company held its 2020 Annual General Meeting of Shareholders, anddeliberated and approved the proposals on the work report of the Board of Directors, the work report ofthe Supervisory Committee, the financial final accounts, the 2020 annual report, the profit distributionplan, the renewal of the annual auditor, the entrustment of wealth management with equity funds, theremuneration scheme for directors and supervisors, the restricted share incentive scheme and theamendment to the Articles of Association of the Company.On 15 November 2021, the Company held the Second Extraordinary General Meeting ofShareholders of 2021, and deliberated and approved the proposal to change some investment projectswith raised funds and amend the Articles of Association of the Company.For details, please refer to the Announcement on the Resolutions of the First Extraordinary GeneralMeeting of Shareholders of 2021 (Announcement No.: 2021-001), the Announcement on the Resolutionsof the 2020 Annual General Meeting of Shareholders (Announcement No.: 2021-048) and theAnnouncement on the Resolutions of the Second Extraordinary General Meeting of Shareholders of 2021(Announcement No.: 2021-102) published by the Company on the website of the Shanghai StockExchange (http://www.sse.com.cn).
IV Directors, Supervisors and Senior Management(I) Shareholding changes and remunerations of incumbent directors, supervisors and senior management and those who resigned before the end of theirtenures during the Reporting Period
√ Applicable □ Not applicable
Unit: share
| Name | Office title (note) | Gender | Age | Start of tenure | End of tenure | Opening shareholding (share) | Closing shareholding (share) | Change in shareholding in the Reporting Period (share) | Reason for change | Total pre-tax remuneration received from the Company in the Reporting Period (RMB’ 0,000) | Remuneration received from any of the Company’s related parties (yes/no) |
| Ruan Liping | Chairman of the Board and President | Male | 58 | 2017-12-23 | 2024-1-6 | 96,864,199 | 96,864,199 | 0 | Not applicable | 301.12 | No |
| Ruan Xueping | Vice Chairman of the Board | Male | 50 | 2017-12-23 | 2024-1-6 | 96,864,199 | 96,864,199 | 0 | Not applicable | 248.00 | No |
| Cai Yingfeng | Director and Vice President | Male | 59 | 2017-12-23 | 2024-1-6 | 12,500 | 25,300 | 12,800 | Grant of equity incentives | 247.12 | No |
| Liu Shengsong | Director, Vice President and Board Secretary | Male | 52 | 2017-12-23 | 2024-1-6 | 18,800 | 18,800 | 0 | Not applicable | 284.04 | No |
| Zhou Zhenghua | Director and Vice President | Male | 50 | 2017-12-23 | 2024-1-6 | 13,100 | 13,100 | 0 | Not applicable | 361.42 | No |
| Zhou Wenchuan | Director | Female | 38 | 2021-5-20 | 2024-1-6 | 0 | 0 | 0 | Not applicable | - | No |
| Xie Tao | Independent Director | Male | 59 | 2017-12-23 | 2024-1-6 | 0 | 0 | 0 | Not applicable | 10.00 | No |
| Zhang Zeping | Independent Director | Male | 49 | 2017-12-23 | 2024-1-6 | 0 | 0 | 0 | Not applicable | 10.00 | No |
| He Hao | Independent Director | Female | 46 | 2017-12-23 | 2024-1-6 | 0 | 0 | 0 | Not applicable | 10.00 | No |
| Shen Huiyuan | Chairman of the Supervisory Committee | Male | 58 | 2017-12-23 | 2024-1-6 | 0 | 0 | 0 | Not applicable | 252.94 | No |
| Guan Xuejun | Supervisor | Male | 44 | 2017-12-23 | 2024-1-6 | 0 | 0 | 0 | Not applicable | 189.81 | No |
| Li Yu | Employee Supervisor | Male | 39 | 2017-12-23 | 2024-1-6 | 0 | 0 | 0 | Not applicable | 92.21 | No |
| Li Guoqiang | Vice President | Male | 55 | 2017-12-23 | 2024-1-6 | 13,800 | 24,400 | 10,600 | Grant of equity incentives | 268.31 | No |
| Zhang Lina | Vice President and CFO | Female | 62 | 2017-12-23 | 2024-1-6 | 7,500 | 7,500 | 0 | Not applicable | 161.66 | No |
| Cao Wei | Director (former) | Male | 44 | 2017-12-23 | 2021-4-12 | 0 | 0 | 0 | Not applicable | - | No |
| Total | / | / | / | / | / | 193,794,098 | 193,817,498 | 23,400 | / | 2,436.63 | / |
| Name | Main work experience |
| Ruan Liping | Born in 1964, Bachelor's degree, Chinese nationality, with permanent residence in Singapore and a Hong Kong Identity Card. He once served as an engineer at Hangzhou Mechanical Design Institute of the Ministry of Water Resources, and Chairman of the Board and President of Gongniu Group Co., Ltd. (the former private company). He is currently the Chairman of the Board and President of Gongniu Group and a member of the 13th National People's Congress of Zhejiang Province, and mainly concurrently the Executive Director and General Manager of Ningbo Gongniu, the Executive Director and General Manager of Gongniu Photoelectric, the Executive Director and General Manager of Gongniu Digital and the Executive Director of Liangji Industrial. |
| Ruan Xueping | Born in 1972, junior secondary education, Chinese nationality, with permanent residence in Singapore and a Hong Kong Identity Card. He once served as the Production Manager of Cixi Gongniu, Vice Chairman of the Board of Gongniu Group Co., Ltd. (the former private company). He is currently the Vice Chairman of the Board of Gongniu Group, and mainly concurrently the Executive Director of Cixi Gongniu, the General |
| Manager of Shanghai Gongniu and the Supervisor of Liangji Industrial. | |
| Cai Yingfeng | Born in 1963, Bachelor's degree, professor-level senior engineer, Chinese nationality, with permanent residence in Singapore. He once served as the Director Engineer of the Crane Room of Hangzhou Mechanical Design Institute of the Ministry of Water Resources, Senior Engineer of Portek International Pte Ltd (Singapore), Vice President and Chief Engineer of Gongniu Group Co., Ltd. (the former private company). He is currently a director and Vice President of Gongniu Group. |
| Liu Shengsong | Born in 1970, Bachelor's degree, engineer, Chinese nationality, no permanent residence abroad. He once served as the Director's Assistant of the Science and Technology Department of Kmk Group, Senior Manager of Midea Group Co., Ltd., Director of strategic operations and Deputy General Manager of the Business Division of AUX Group Co., Ltd., President's Assistant and General Manager of the Business Division of Jiangxi Zhengbang Technology Co., Ltd., and Vice President of Gongniu Group Co., Ltd. He is currently a director, Vice President and Board Secretary of Gongniu Group, with the professional qualification of Board Secretary of the Shanghai Stock Exchange. |
| Zhou Zhenghua | Born in 1972, Master's degree, Chinese nationality, no permanent residence abroad. He once served as a technician of incoming material quality control (IQC) at Zhongshan Kawa Electronic(Group)Co., Ltd., the Managing Officer of quality control (QC) at One Earth Group Limited, General Manager of the product company of Midea Group Co., Ltd., and Vice President of Gongniu Group Co., Ltd. (the former private company). He is currently a director, Vice President and General Manager of the Wall Opening Division of Gongniu Group. |
| Zhou Wenchuan | Born in 1983, Master's degree, Ph.D. in progress, permanent resident of Hong Kong. She is currently the Vice Chairman and President of Meilleure Health International Group, Assistant President of U-Home Group, General Manager of Shenzhen Xiaozhou Investment Co., Ltd., and a member of the Standing Executive Committee of Shenzhen Federation of Industry & Commerce (Chamber of Commerce), and a director of Gongniu Group. |
| Xie Tao | Born in 1983, Bachelor's degree, member of the Institute of Chartered Accountants, Singaporean nationality. He once served as a partner of PwC, the Chief Executive Officer of Agria Corporation, a partner of Ernst & Young, and the Chief Executive Officer of Hunan Dakang International Food & Agriculture Co., Ltd. He is currently a director of Shanghai Vico Precision Mold &Plastics Co., Ltd., an independent director of China Yuchai International Limited, Zhejiang Wanfeng Auto Wheel Co., Ltd. and Gongniu Group. |
| Zhang Zeping | Born in 1973, doctoral degree, Chinese nationality, no permanent residence abroad. He once served as a teacher at the School of Basic Education of Shanghai University of Engineering Science, a teacher at the School of International Law of East China University of Political Science and Law, and the Director of the Consular Department of the China Embassy in Macedonia. He is currently a professor at the School of International Law of East China University of Political Science and Law, an arbitrator of Shanghai International Economic and Trade Arbitration Commission (SHIAC), Shanghai Arbitration Commission and Shenzhen Court of International Arbitration, a part-time lawyer of Shanghai Zhonglian Law Firm, an independent director of Kunshan Xiefu New Material Co., Ltd., an independent director of Shenzhen Soocas Technology Co., Ltd., a director of Suzhou Kelinyuan Electronics Co., Ltd. and an independent director of Gongniu Group. |
| He Hao | Born in 1976, Master's degree, Chinese nationality, no permanent residence abroad. He once served as a senior auditor of Arthur Andersen LLP, an audit manager of PwC LLP, Vice President of Deutsche Bank (China) Co., Ltd., and Chief Controller of the Corporate Customer Department of Standard Chartered Bank (China) Limited. He is currently the Executive President of Red Star Macalline Holding Group Co., Ltd., Chairman of Shanghai Xingshan Investment Management Co., Ltd., a managing partner of Shanghai Xingduo Investment Partnership Enterprise (Limited Partnership), executive director of Shanghai Xingdun Technology Co., Ltd., an executive director of Shanghai Xingyuxin Business Management Co., Ltd., executive director and manager of Beijing Xinghao Kairui Technology Co., Ltd., executive director of Shanghai Lihao Creative Design Co., Ltd., director of Shanghai Meilong Interactive Entertainment Technology Co., Ltd., director of Chongqing Meiji Financial Leasing Co., Ltd., |
| director of Shanghai Xingduo Hotel Management Co., Ltd., supervisor of Tibet Yiying Enterprise Management Co., Ltd., supervisor of Changzhou Yinghong Investment Co., Ltd., supervisor of Shanghai Jiajinsuo Financial Information Service Co., Ltd., supervisor of Shanghai Xingqin Brand Management Co., Ltd. and independent director of Gongniu Group. | |
| Shen Huiyuan | Born in 1964, Bachelor's degree, Chinese nationality, no permanent residence abroad. He once served as the project leader of the International Electrical Development Department of TCL Group Co., Ltd, head of the Electrical R&D Department of Huizhou IDV Electrical Technology Co., Ltd., head of Electrical Accessories Department of Gongniu Group Co., Ltd. (the former private company), Executive Deputy General Manager and Deputy General Manager of R&D of Ningbo Gongniu Electrics Co., Ltd., and Director of the Research Institute of Gongniu Group Co., Ltd. (the former private company). He is currently the Chairman of the Supervisory Committee of Gongniu Group Co., Ltd., head of the R&D and Technology Management Center and Director of the Research Institute of Gongniu Group. |
| Guan Xuejun | Born in 1978, Master's degree, Chinese nationality, no permanent residence abroad. He once served as the procurement manager of Foshan Shunde District MiTAC Computer (Shunde) Limited, senior procurement manager of Ningbo Franta Kitchenware Co., Ltd., senior procurement manager of Quanyou Furniture Co., Ltd., and Director of the New Business Management Center of Gongniu Group Co., Ltd. (the former private company). He is currently a supervisor of Gongniu Group and the General Manager of the decoration channel marketing system. |
| Li Yu | Born in 1983, Bachelor's degree, intermediate auditor, international certified internal auditor, Chinese nationality, no permanent residence abroad. He once served as the Manager of the Audit Department, Manager of the Operation Department, Executive President of Gongniu University and Director of Human Resources Center of Gongniu Group Co., Ltd. (the former private company). He is currently the General Manager of the Low-voltage Electrical Appliances Division of Gongniu Group. |
| Li Guoqiang | Born in 1967, junior college degree, Chinese nationality, no permanent residence abroad. He once served as the Regional Manager of TCL International Electrical (Huizhou) Co., Ltd., Marketing Director of IDV International Electrical (Huizhou) Co., Ltd. and Vice President of Marketing of Gongniu Group Co., Ltd. (the former private company). He is currently the Vice President of Marketing of Gongniu Group. |
| Zhang Lina | Born in 1960, junior college degree, Chinese nationality, no permanent residence abroad. She once served as the Finance Controller of China Telecom Co., Ltd. Cixi Branch, Financial Manager and Chief Financial Officer of Gongniu Group Co., Ltd. (the former private company). She is currently the Vice President and Chief Financial Officer of Gongniu Group. |
Other information:
□ Applicable √ Not applicable
(III) Offices held by incumbent directors, supervisors and senior management and those who resigned before the end of their tenures during the ReportingPeriod
1. Offices held concurrently in shareholding entities
√ Applicable □ Not applicable
| Name | Shareholding entity | Office held in the shareholding entity | Start of tenure | End of tenure |
| Ruan Liping | Ningbo Liangji Industrial Co., Ltd. | Executive Director | November 2011 | Currently ongoing |
| Ruan Xueping | Ningbo Liangji Industrial Co., Ltd. | Supervisor | November 2011 | Currently ongoing |
| Note | Not applicable | |||
2. Offices held concurrently in other entities
√ Applicable □ Not applicable
| Name | Other entity | Office held in other entity | Start of tenure | End of tenure |
| Ruan Liping | Ningbo Gongniu Electrics Co., Ltd. | Executive Director and General Manager | December 2008 | Currently ongoing |
| Ruan Liping | Cixi Gongniu Electrics Co., Ltd. | General Manager | January 2008 | Currently ongoing |
| Ruan Liping | Ningbo Gongniu Digital Technology Co., Ltd. | Executive Director and General Manager | October 2016 | Currently ongoing |
| Ruan Liping | Ningbo Gongniu Precision Manufacturing Co., Ltd. | Executive Director and General Manager | September 2015 | Currently ongoing |
| Ruan Liping | Ningbo Bull International Trading Co., Ltd. | Executive Director and General Manager | March 2017 | Currently ongoing |
| Ruan Liping | Ningbo Gongniu Supply Chain Management Co., Ltd. | Executive Director and General Manager | December 2016 | Currently ongoing |
| Ruan Liping | Ningbo Gongniu Electric Sales Co., Ltd. | Executive Director | August 2017 | Currently ongoing |
| Ruan Liping | Ningbo Xingluo Trading Co., Ltd. | Executive Director | August 2017 | Currently ongoing |
| Ruan Liping | Ningbo Gongniu Photoelectric Technology Co., Ltd. | Executive Director and General Manager | June 2014 | Currently ongoing |
| Ruan Liping | Ningbo Gongniu Low Voltage Electric Co., Ltd. | Executive Director and Manager | June 2019 | Currently ongoing |
| Ruan | Shanghai Minshen Property Co., Ltd. | Vice Chairman of the Board | July 1999 | Currently ongoing |
| Liping | ||||
| Ruan Liping | Wuhan Gongniu Investment Management Co., Ltd. | Chairman of the Board | August 2011 | October 2021 |
| Ruan Liping | Cixi Shenghui Electronics Co., Ltd. | Executive Director | January 2016 | Currently ongoing |
| Ruan Liping | Ningbo Gongniu Property Co., Ltd. | Executive Director | June 2010 | Currently ongoing |
| Ruan Liping | Ningbo Golden Mango Ecological Manor Co., Ltd. | Executive Director | December 2013 | Currently ongoing |
| Ruan Liping | Wuhan Gongniu Ventures Investment Co., Ltd. | Chairman of the Board | October 2011 | March 2021 |
| Ruan Liping | Ningbo Fenggu Real Estate Co., Ltd. | Director | April 2011 | January 2022 |
| Ruan Liping | Cixi Golden Mango Microcredit Co., Ltd. | Chairman of the Board | June 2012 | April 2021 |
| Ruan Liping | Qingdao Haili Commercial Appliances Co., Ltd. | Director | May 2009 | Currently ongoing |
| Ruan Liping | Wuhan Fenjin Power Tech Co., Ltd. | Executive Director | December 2006 | Currently ongoing |
| Ruan Liping | Ningbo Meishan Bonded Port Shuojin Investment Management Co., Ltd. | Executive Director | November 2017 | Currently ongoing |
| Ruan Liping | Wuhan Zhongjia Hongyi Technology Information Industrial Park Co., Ltd. | Director | January 2019 | Currently ongoing |
| Ruan Liping | Ningbo Gongniu Domestic Electrical Appliance Co., Ltd. | Executive Director and Manager | April 2020 | Currently ongoing |
| Ruan Liping | Shanghai Gongniu Information Technology Co., Ltd. | Executive Director and General Manager | February 2022 | Currently ongoing |
| Ruan Liping | Ningbo Gongniu Smart Technology Co., Ltd. | Executive Director and Manager | October 2021 | Currently ongoing |
| Ruan Xueping | Ningbo Meishan Bonded Port Shuojin Investment Management Co., Ltd. | Supervisor | November 2017 | Currently ongoing |
| Ruan Xueping | Cixi Gongniu Electrics Co., Ltd. | Executive Director | January 1995 | Currently ongoing |
| Ruan Xueping | Shanghai Minshen Property Co., Ltd. | Director | July 1999 | Currently ongoing |
| Ruan Xueping | Shanghai Dumin Real Estate Co., Ltd. | Chairman of the Board | March 2006 | Currently ongoing |
| Ruan Xueping | Wuhan Gongniu Investment Management Co., Ltd. | Supervisor | August 2011 | October 2021 |
| Ruan Xueping | Shanghai Minshen Real Estate Management Co., Ltd. | Director | August 2005 | Currently ongoing |
| Zhou Wenchuan | Meilleure Health International Group Co., Ltd. | Vice Chairman of the Board and President | August 2013 | Currently ongoing |
| Zhou Wenchuan | U-Home Group Co., Ltd. | Supervisor | June 2010 | Currently ongoing |
| Zhou Wenchuan | Shenzhen Xiaozhou Investment Co., Ltd. | General Manager | January 2009 | Currently ongoing |
| Zhou Wenchuan | Yunnan Hansu Biotechnology Co., Ltd. | Director | June 2018 | Currently ongoing |
| Zhou Wenchuan | Shenzhen Yinguan Biological Technology Co., Ltd. | Director | February 2019 | Currently ongoing |
| Zhou Wenchuan | Shenzhen Meiray Vap Technology Co., Ltd. | Chairman of the Board | December 2019 | Currently ongoing |
| Zhou Wenchuan | Zhuhai Fuhai Canyang Investment Development Co., Ltd. | Director | December 2009 | Currently ongoing |
| Zhou Wenchuan | Wuhu Meilleure Health Management Co., Ltd. | General Manager | April 2018 | Currently ongoing |
| Zhou Wenchuan | Shenzhen Skin Analysis Medical Beauty Clinic | Chairman of the Board | June 2017 | Currently ongoing |
| Zhou Wenchuan | Shenzhen Ruima Electric Technology Co., Ltd. | General Manager | September 2019 | Currently ongoing |
| Zhou Wenchuan | Beijing Meiaikang Technology Co., Ltd. | Director | February 2020 | Currently ongoing |
| Zhou Wenchuan | Wuhu Xiaozhou Investment Co., Ltd. | General Manager | October 2019 | Currently ongoing |
| Xie Tao | Shanghai Vico Precision Mold &Plastics Co., Ltd. | Director | May 2021 | Currently ongoing |
| Xie Tao | China Yuchai International Limited | Independent Director | September 2020 | Currently ongoing |
| Xie Tao | Zhejiang Wanfeng Auto Wheel Co., Ltd. | Independent Director | June 2020 | Currently ongoing |
| Zhang Zeping | Kunshan Xiefu New Material Co., Ltd. | Independent Director | June 2015 | Currently ongoing |
| Zhang Zeping | Shenzhen Soocas Technology Co., Ltd. | Independent Director | October 2020 | Currently ongoing |
| Zhang Zeping | Suzhou Kelinyuan Electronics Co., Ltd. | Director | January 2022 | Currently ongoing |
| He Hao | Red Star Macalline Holding Group Co., Ltd. | CEO | February 2017 | Currently ongoing |
| He Hao | Shanghai Xingduo Investment Partnership Enterprise (Limited Partnership) | Executive Partner | July 2018 | Currently ongoing |
| He Hao | Shenzhen Red Star Macalline Gaosheng City Industrial Development Co., Ltd. | Chairman of the Board | March 2019 | Currently ongoing |
| He Hao | Shanghai Xingyuxin Business Management Co., Ltd. | Executive Director | August 2018 | Currently ongoing |
| He Hao | Shanghai Xingshan Investment Management Co., Ltd. | Chairman of the Board | February 2019 | Currently ongoing |
| He Hao | Shanghai Xingdun Technology Co., Ltd. | Executive Director | March 2018 | Currently ongoing |
| He Hao | Tibet Yiying Enterprise Management Co., Ltd. | Supervisor | June 2017 | Currently ongoing |
| He Hao | Changzhou Yinghong Investment Co., Ltd. | Supervisor | May 2017 | Currently ongoing |
| He Hao | Shanghai Jiajinsuo Financial Information Service Co., Ltd. | Supervisor | May 2017 | Currently ongoing |
| He Hao | Shanghai Meilong Interactive Entertainment Technology Co., Ltd. | Director | July 2017 | Currently ongoing |
| He Hao | Shanghai Xingqin Brand Management Co., Ltd. | Supervisor | August 2018 | Currently ongoing |
| He Hao | Shanghai Aegean Outlets Business Management Co., Ltd. | Supervisor | September 2018 | Currently ongoing |
| He Hao | Chongqing Meiji Financial Leasing Co., Ltd. | Director | November 2017 | Currently ongoing |
| He Hao | Beijing Xinghao Kairui Technology Co., Ltd. | Executive Director and Manager | December 2018 | Currently ongoing |
| He Hao | Shanghai Xingduo Hotel Management Co., Ltd. | Director | May 2019 | Currently ongoing |
| He Hao | Shanghai Lihao Creative Design Co., Ltd. | Executive Director | July 2019 | Currently ongoing |
| Liu Shengsong | Wuhan Yangtze Optical Electronic Co., Ltd. | Director | January 2020 | Currently ongoing |
| Liu Shengsong | Wuhan Gongniu Investment Management Co., Ltd. | Supervisor | October 2021 | Currently ongoing |
| Li Yu | Ningbo Gongniu Electrics Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu | Cixi Gongniu Electrics Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu | Ningbo Gongniu Low Voltage Electric Co., Ltd. | Supervisor | June 2019 | Currently ongoing |
| Li Yu | Ningbo Banmen Electric Appliance Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu | Ningbo Gongniu Digital Technology Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu | Ningbo Bull International Trading Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu | Ningbo Gongniu Supply Chain Management Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu | Ningbo Gongniu Photoelectric Technology Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu | Shanghai Gongniu Electrics Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu | Ningbo Gongniu Precision Manufacturing Co., Ltd. | Supervisor | November 2019 | Currently ongoing |
| Li Yu | Ningbo Gongniu Domestic Electrical Appliance Co., Ltd. | Supervisor | April 2020 | Currently ongoing |
| Note | Not applicable | |||
(IV) Remunerations of directors, supervisors and senior management
√ Applicable □ Not applicable
| Decision-making procedures for the remuneration of directors, supervisors and senior management personnel | The remuneration of directors and supervisors shall be deliberated and determined by the General Meeting of Shareholders. The remuneration of senior management personnel shall be reviewed and determined by the Board of Directors. |
| Basis for determining the remuneration of directors, supervisors and senior management personnel | Internal directors, supervisors and senior management personnel are paid remuneration in accordance with the specific management positions they hold in the Company, taking into account the Company's business picture, relevant remuneration system and results of performance appraisals. The remuneration of independent directors is based on an allowance system, and directors who do not hold specific management positions in the Company will not receive remuneration. |
| Actual payment of remuneration for directors, supervisors and senior management personnel | The earnings disclosed in the report represent the actual remuneration of the directors, supervisors and senior management personnel. |
| Total actual remuneration received by all directors, supervisors and senior management personnel at the end of the Reporting Period | RMB24,366,300 |
(V) Changes of directors, supervisors and senior management
√ Applicable □ Not applicable
| Name | Office title | Type of change | Reason for change |
| Cao Wei | Director | Resignation | Personal reasons |
| Zhou Wenchuan | Director | Elected | Elected |
Mr. Cao Wei, a former director of the Company, resigned as a director and a member of the Strategy Committee of the Board of Directors on 12 April 2021 forpersonal reasons. Upon his resignation, Mr. Cao Wei no longer holds any position in the Company.
Upon the deliberation and approval at the Third Meeting of the Second Board of Directors of the Company and the 2020 Annual General Meeting, and theinspection of the Nomination Committee of the Board of Directors of the Company, the Board of Directors agreed to elect Mrs. Zhou Wenchuan as a non-independent director of the Second Board of Directors and a member of the Strategy Committee of the Second Board of Directors.(VI) Punishments imposed by securities regulators in the past three years
□ Applicable √ Not applicable
(VII) Other information
□ Applicable √ Not applicable
V Board Meetings Convened during the Reporting Period
| Meeting | Date | Resolutions |
| The First Meeting of the Second Board of Directors | 7 January 2021 | Reviewed and approved the Proposal on the Election of the Chairman of the Board and Vice Chairman of the Board of the Company, Proposal on the Election of Members of the Specialized Committee of the Board of Directors, Proposal on the Appointment of the President, Board Secretary and Securities Representative of the Company, Proposal on the Appointment of the Vice President and Chief Financial Officer of the Company, Proposal on the Continued Use of Part of Temporarily Idle Raised Funds for Cash Management, Proposal on the Continued Use of Part of Idle Raised Funds for Temporary Replenishment of Working Capital, Proposal on Conducting Bulk Raw Material Futures Business and Proposal on the Application for Comprehensive Credit Line from Banks. For details, please refer to the Announcement on the Resolutions of the First Meeting of the Second Board of Directors (Announcement No.: 2021-002) published by the Company on the website of the Shanghai Stock Exchange. |
| The Second Meeting of the Second Board of Directors | 30 March 2021 | Reviewed and approved the Proposal on Estimated Continuing Related-Party Transactions for 2021. For details, please refer to the Announcement on the Resolutions of the Second Meeting of the Second Board of Directors (Announcement No.: 2021-018) published by the Company on the website of the Shanghai Stock Exchange. |
| The Third Meeting of the Second Board of Directors | 28 April 2021 | Reviewed and approved the Proposal on the Work Report of the General Manager in 2020, Proposal on the Work Report of the Board of Directors in 2020, Proposal on the Financial Final Account Report of 2020, Proposal on the Annual Report and its Summary for 2020, Proposal on the Profit Distribution Plan for 2020, Proposals on the 2020 Annual Internal Control Evaluation Report, Proposal on the Annual Social Responsibility Report, Proposal on the Work Report of Independent Directors for 2020, Proposal on the Report on the Performance of the Audit Committee of the Board of Directors for 2020, Proposal on the Renewal of the Annual Auditor for 2021, Proposal on the Use of Equity Funds for Entrusting Wealth Management, Proposal on the Compensation Schemes for Directors and Senior Management Personnel, Proposal on the Restricted Share Incentive Scheme for 2021 (Draft) and its Summary, Proposal on the Management Measures for the Assessment of the Restricted Share Incentive Scheme for 2021, Proposal on the Request to the General Meeting to Authorize the Board of Directors to Handle Share Incentive-Related Matters, Proposal on Adjusting Matters Related to the Special Talent Shareholding Plan for 2020, Proposal on Repurchase and Cancellation of Some Restricted Shares, Proposal on the Change of Registered Capital and Amendment to the Articles of Association, |
| Proposal on the Special Report on the Deposit and Actual Use of Raised Funds for 2020, Proposal on the 2021 Q1 Report, Proposal on the Election of Candidates for Non-Independent Directors of the Second Board of Directors of the Company and Proposal on the Convening of the 2020 Annual General Meeting. For details, please refer to the Announcement on the Resolutions of the Third Meeting of the Second Board of Directors (Announcement No.: 2021-024) published by the Company on the website of the Shanghai Stock Exchange. | ||
| The Fourth Meeting of the Second Board of Directors | 10 May 2021 | Reviewed and approved the Proposal on the Restricted Share Incentive Scheme for 2021 (Draft Revised) and its Summary, Proposal on the Management Measures for the Assessment of the Restricted Share Incentive Scheme for 2021 (Revised) and Proposal on the Cancellation of Some Proposals of the 2020 Annual General Meeting of Shareholders. For details, please refer to the Announcement on the Resolutions of the Fourth Meeting of the Second Board of Directors (Announcement No.: 2021-040) published by the Company on the website of the Shanghai Stock Exchange. |
| The Fifth Meeting of the Second Board of Directors | 4 June 2021 | Reviewed and approved the Proposal on the Adjustment of the List of Incentive Targets, Grant Number and Grant Price of the Restricted Share Incentive Scheme for 2021 and Proposal on Granting Restrictive Shares to Incentive Targets. For details, please refer to the Announcement on the Resolutions of the Fifth Meeting of the Second Board of Directors (Announcement No.: 2021-054) published by the Company on the website of the Shanghai Stock Exchange. |
| The Sixth Meeting of the Second Board of Directors | 22 June 2021 | Reviewed and approved the Proposal on the Achievement of Lifting the Restriction Conditions in the First Lifting Restriction Period of the 2020 Restricted Share Incentive Scheme and Proposal on the Adjustment of the Repurchase Price of the 2020 Restricted Share Incentive Scheme. For details, please refer to the Announcement on the Resolutions of the Sixth Meeting of the Second Board of Directors (Announcement No.: 2021-059) published by the Company on the website of the Shanghai Stock Exchange. |
| The Seventh Meeting of the Second Board of Directors | 17 August 2021 | Reviewed and approved the Proposal on the Semi-Annual Report for 2021 and its Summary, Special Report on the Deposit and Actual Use of Raised Funds for the Semi-Annual Period of 2021 and Proposal on the Formulation of Accountability Policy for Material Errors in Information Disclosure of the Annual Report. For details, please refer to the Announcement on the Resolutions of the Seventh Meeting of the Second Board of Directors (Announcement No.: 2021-080) published by the Company on the website of the Shanghai Stock Exchange. |
| The Eighth Meeting of the Second Board of Directors | 28 October 2021 | Reviewed and approved the Proposal on the 2021 Q3 Report of the Company, Proposal on Changing Some Investment Projects with Raised Funds, Proposal on the Change of Registered Capital and Amendment to the Articles of Association, Proposal on Repurchase and Cancellation of Some Restricted Shares and Proposal on the Convening of the Second Extraordinary General Meeting of Shareholders of 2021. For details, please refer to the Announcement on the Resolutions of the Eighth Meeting of the Second Board of Directors (Announcement No.: 2021-090) published by the Company on the website of the Shanghai Stock Exchange. |
| The Ninth Meeting of the Second Board of Directors | 27 December 2021 | Reviewed and approved the Proposal on the Continued Use of Part of Temporarily Idle Raised Funds for Cash Management, Proposal on the Continued Use of Part of Idle Raised Funds for Temporary Replenishment of Working Capital, Proposal on Conducting Bulk Raw Material Futures Business, Proposal on the Application for Comprehensive Credit Line from Banks, Proposal on the Change of Registered Capital and Amendment to the Articles of Association and Proposal on the Convening of the First Extraordinary General Meeting of Shareholders of 2022. For details, please refer |
to the Announcement on the Resolutions of the Ninth Meeting of the Second Board of Directors (Announcement No.:
2021-112) published by the Company on the website of the Shanghai Stock Exchange.
VI Performance of Duty by Directors(I) Attendance of directors at board meetings and general meetings of shareholders during the Reporting Period
| Name of director | Independent director or not | Attendance at board meetings | Attendance at general meetings of shareholders | |||||
| Total number of board meetings the director was supposed to attend | Board meetings attended on site | Board meetings attended by way of telecommunication | Board meetings attended through a proxy | Absence | The director failed to attend two consecutive board meetings (yes/no) | Total number of general meetings of shareholders the director was supposed to attend | ||
| Ruan Liping | No | 9 | 9 | 4 | 0 | 0 | No | 3 |
| Ruan Xueping | No | 9 | 9 | 5 | 0 | 0 | No | 3 |
| Cai Yingfeng | No | 9 | 9 | 5 | 0 | 0 | No | 3 |
| Liu Shengsong | No | 9 | 9 | 4 | 0 | 0 | No | 3 |
| Zhou Zhenghua | No | 9 | 9 | 5 | 0 | 0 | No | 3 |
| Zhou Wenchuan | No | 5 | 5 | 5 | 0 | 0 | No | 1 |
| Xie Tao | Yes | 9 | 9 | 8 | 0 | 0 | No | 2 |
| Zhang Zeping | Yes | 9 | 9 | 8 | 0 | 0 | No | 3 |
| He Hao | Yes | 9 | 9 | 7 | 0 | 0 | No | 2 |
| Cao Wei (former) | No | 2 | 2 | 2 | 0 | 0 | No | 0 |
Explain why any director failed to attend two consecutive board meetings.
□ Applicable √ Not applicable
| Total number of board meetings convened in the Reporting Period | 9 |
| Of which: on-site meetings | 0 |
| Meetings convened by way of telecommunication | 4 |
| Meetings where on-site attendance and attendance by telecommunication were both allowed | 5 |
(II) Objections raised by directors on matters of the Company
□ Applicable √ Not applicable
(III) Other information
□ Applicable √ Not applicable
VII Specialized Committees under the Board of Directors
√ Applicable □ Not applicable
(1) Members of the specialized committees
| Specialized committee | Members |
| Audit Committee | He Hao (convener), Xie Tao, and Ruan Xueping |
| Nomination Committee | Xie Tao (convener), Ruan Liping, and Zhang Zeping |
| Remuneration and Appraisal Committee | Zhang Zeping (convener), Ruan Liping, and He Hao |
| Strategy Committee | Ruan Liping (convener), Liu Shengsong, Zhou Zhenghua, Zhou Wenchuan, and Xie Tao |
(2) The Audit Committee held five meetings during the Reporting Period.
| Date | Contents | Important comments and suggestions | Other performance of duties |
| 26 January 2021 | Reviewed and approved the proposal on the Annual Report Audit Plan of the Company. | The Audit Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. It put forward relevant opinions based on the reality of the Company. Upon full communication and discussion, all proposals were unanimously approved. | For details, please refer to the Report of Gongniu Group Co., Ltd. On the Duty Performance of the Audit Committee of the Board of Directors in 2021. |
| 14 April 2021 | Reviewed and approved the proposals on the 2020 Annual Report of the Company, 2021 Q1 Report of the Company, Financial Final Account Report of 2020, Special Report on the Deposit and Actual Use of Raised Funds for 2020, Proposal on the Renewal of the Annual Auditor for 2021, 2020 Annual Internal Control Evaluation Report and Internal Audit Plan for 2021. | The Audit Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. It put forward relevant opinions based on the reality of the Company. Upon full communication and discussion, all proposals were unanimously approved. | For details, please refer to the Report of Gongniu Group Co., Ltd. On the Duty Performance of the Audit Committee of the Board of Directors in 2021. |
| 6 August 2021 | Reviewed and approved the proposals on the 2021 Semi-annual Report of the Company, Special Report on the Semi-annual Deposit and Actual Use of Raised Funds for 2021 and Semi-annual Work Summary and Work Planning of the Audit Supervision Department for the Second Half of 2021. | The Audit Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. It put forward relevant opinions based on the reality of the Company. Upon full communication and discussion, all proposals were unanimously approved. | For details, please refer to the Report of Gongniu Group Co., Ltd. On the Duty Performance of the Audit Committee of the Board of Directors in 2021. |
| 21 October 2021 | Reviewed and approved the proposal on the 2021 Q3 Report of the Company. | The Audit Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. It put forward relevant opinions based on the reality of the Company. Upon full communication and discussion, all proposals were unanimously approved. | For details, please refer to the Report of Gongniu Group Co., Ltd. On the Duty Performance of the Audit Committee of the Board of Directors in 2021. |
| 27 December 2021 | Reviewed and approved the proposal on the Annual Report Audit Plan of the Company. | The Audit Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. It put forward relevant opinions based on the reality of the Company. Upon full communication and discussion, all proposals were unanimously approved. | For details, please refer to the Report of Gongniu Group Co., Ltd. On the Duty Performance of the Audit Committee of the Board of Directors in 2021. |
(3) The Remuneration and Appraisal Committee held two meetings during the Reporting Period.
| Date | Contents | Important comments and suggestions | Other performance of duties |
| 28 April 2021 | Reviewed and approved the Proposal on the Remuneration Schemes for Directors and Senior Management Personnel, Proposal on the Restricted Share Incentive Scheme for 2021 (Draft) and its Summary of the Company, Proposal on the Management Measures for the Appraisal of the Restricted Share Incentive Scheme for 2021 and Proposal on the Request to the General Meeting to Authorize the Board of Directors to Handle Share Incentive-Related Matters. | The Remuneration and Appraisal Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. It put forward relevant opinions based on the reality of the Company. Upon full communication and discussion, all proposals were unanimously approved. | |
| 21 June 2021 | Reviewed and approved the Proposal on the Achievement of Lifting the Restriction Conditions in the First Lifting Restriction Period of the 2020 Restricted Share Incentive Scheme. | The Remuneration and Appraisal Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. It put forward relevant opinions based on the reality of the Company. Upon full |
communication anddiscussion, all proposals wereunanimously approved.
(4) The Nomination Committee held one meeting during the Reporting Period.
| Date | Contents | Important comments and suggestions | Other performance of duties |
| 28 April 2021 | Reviewed and approved Proposal on the Election of Candidates for Non-Independent Directors of the Second Board of Directors of the Company. | The Nomination Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. It put forward relevant opinions based on the reality of the Company. Upon full communication and discussion, all proposals were unanimously approved. |
(5) Objections
□ Applicable √ Not applicable
VIII Risks Detected by the Supervisory Committee
□ Applicable √ Not applicable
The Supervisory Committee raised no objections during the Reporting Period.IX Employees of the Company as the Parent and Its Principal Subsidiaries at the Period-end(I) Employees
| Number of in-service employees of the Company as the parent | 4,081 |
| Number of in-service employees of principal subsidiaries | 8,302 |
| Total number of in-service employees | 12,383 |
| Number of retirees to whom the Company as the parent or its principal subsidiaries need to pay retirement pensions | 0 |
| Functions | |
| Function | Employees |
| Production | 8,154 |
| Sales | 1,471 |
| Technical | 1,576 |
| Financial | 119 |
| Administrative | 1,063 |
| Total | 12,383 |
| Educational background | |
| Educational background | Employees |
| Bachelor’s degree and above | 2,040 |
| Junior college | 1,941 |
| Technical secondary school and below | 8,402 |
| Total | 12,383 |
(II) Remuneration policy
√ Applicable □ Not applicable
The Company further improved its remuneration management and incentive mechanism by revisingthe management system related to remuneration and benefits to enhance the competitiveness ofemployee remuneration returns. Based on the development of performance, the Company has conducteda comprehensive and objective evaluation of employees from dimensions such as job value, personal
performance and personal ability, and continued to improve the performance-oriented system ofassessment, training, promotion and incentive, fully mobilizing the creativity and enthusiasm ofemployees and promoting the Company's performance growth and personal career development whileimproving the remuneration and benefits.(III)Training plans
√ Applicable □ Not applicable
The Company takes the needs of strategic development as the input for learning and development,and is committed to the training of the Group's leadership cadres and cultural heritage. It systematicallytrains practical and innovative talent in a stratified and graded manner with the two-wheel drive of "leantools and methodologies" and "leadership development". The Company insists on the learning conceptof "practical benchmark" and "combination of training and practice" to build a line of accelerateddevelopment and competency in personnel training. The Company has successfully developedleadership development programs at various levels, such as the Niu Program (school admissionsprogram), Mou Programme, Yan Program and Ben Program, and promoted leadership development atmanaging officer/manager/director/general manager levels, as well as general skill enhancement andprofessional capability development programs such as the integration of new employees and the trainingof skilled talent, so as to promote the construction of a learning organization. At the same time, theGongniu Online platform carries a large amount of learning resources, supplementing internal andexternal resources to create a shared learning atmosphere.(IV) Labor outsourcing
□ Applicable √ Not applicable
X Dividend Payouts(I) Formulation, execution and adjustments of the cash dividend policy
√ Applicable □ Not applicable
1. Formulation of the cash dividend policy
The Articles of Association clarifies the decision-making procedures and mechanism for profitdistribution, the principles of profit distribution, the conditions and proportion of cash dividends, etc.,ensuring the transparency and operability of cash dividends to effectively safeguard the legitimate rightsand interests of small and medium shareholders and investors. The Company's profit distribution plan isstrictly implemented in accordance with the provisions of the Articles of Association and the resolutionsof the Company's General Meeting of Shareholders.
2. Execution of the cash dividend policy
In order to share with investors the Company’s operating results of 2020, the Board of Directorsdeclared a cash dividend of RMB20.00 (tax inclusive) per 10 shares to shareholders based on the totalshare capital at the record date of the dividend payout. The dividend payout in the total amount ofRMB1,201,151,800 was completed on 3 June 2021.(II) Special statement on the cash dividend policy
√ Applicable □ Not applicable
| In compliance with the Company’s Articles of Association or the relevant resolutions of general meeting of shareholders | √ Yes □ No |
| Specific and clear dividend standards and ratios | √ Yes □ No |
| Complete decision-making procedure and mechanism | √ Yes □ No |
| Independent directors have faithfully performed their duties and played their due role | √ Yes □ No |
| Non-controlling shareholders are able to fully express their opinion and demand and their legal rights and interests are fully protected | √ Yes □ No |
(III) Where the Company fails to put forward a cash dividend proposal despite the facts that theCompany has made profits in the Reporting Period and the profits of the Company as the parentdistributable to shareholders are positive, it shall give a detailed explanation of why, as well as ofthe purpose and use plan for the retained earnings.
□ Applicable √ Not applicable
XI Status and Impact of Share Incentive Schemes, Employee Shareholding Plan or OtherIncentive Measures for Employees(I)Relevant incentive matters disclosed in current announcement with no subsequent progress orchange
√ Applicable □ Not applicable
| Overview | Index to the disclosed information |
| On 10 February 2021, 21 incentive targets including Wu Jun had lost their qualification for the share incentive due to their departure from the Company, and the Company repurchased and canceled 37,900 restricted shares held by them which had been granted but not lifted from restricted sales. | For details, please refer to the Announcement on the Implementation of the Repurchase and Cancellation of Some Restricted Incentive Shares (Announcement No.: 2021-014) on the website of the SSE (www.sse.com.cn). |
| On 28 April 2021, the Company held the 3rd meeting of the 2nd Board of Directors and the 3rd meeting of the 2nd Supervisory Committee, and reviewed and approved the Proposal on the Restricted Share Incentive Scheme for 2021 (Draft) and its Summary, Proposal on the Management Measures for the Assessment of the Restricted Share Incentive Scheme for 2021, Proposal on Adjusting Matters Related to the Special Talent Shareholding Plan for 2020, and Proposal on Repurchase and Cancellation of Some Restricted Shares. The independent directors of the Company expressed their independent opinions and agreed to the repurchase and cancellation of these restricted shares, and Shanghai Renying Law Firm issued a legal opinion on the repurchase and cancellation. The Supervisory Committee of the Company held that the repurchase and cancellation of these restricted shares are in line with the relevant regulations and do not prejudice the interests of the Company and all shareholders, in particular the small and medium shareholders. | For details, please refer to the Announcement on the Resolutions of the 3rd Meeting of the 2nd Board of Directors (Announcement No.: 2021-024) and Announcement on the Resolutions of the 3rd Meeting of the 2nd Supervisory Committee (Announcement No.: 2021-025) on the website of the SSE (www.sse.com.cn). |
| On 29 April 2021, the Company notified its creditors of the repurchase of restricted shares. During the public announcement period, the Company did not receive any request from the creditors for early settlement of debts or provision of corresponding guarantees to the Company, nor did it receive any objection from any creditor to the repurchase. | For details, please refer to the Announcement on Notifying Creditors of the Repurchase and Cancellation of Some Restricted Shares (Announcement No.: 2021-033) on the website of the SSE (www.sse.com.cn). |
| On 29 April 2021, the Company made a public announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) and within the Company on the list of incentive targets from 29 April 2021 to 8 May 2021. During the public announcement period, the | For details, please refer to the List of Incentive Targets of 2021 Restricted Share Incentive Scheme and Explanation of the Supervisory Committee on the Announcement of the List of Incentive |
| Supervisory Committee of the Company did not receive any objection from any organization or individual. In addition, the Supervisory Committee of the Company verified the list of targets of this incentive scheme and announced the Explanation of the Supervisory Committee of Gongniu Group Co., Ltd. on the Announcement of the List of Incentive Targets of the 2021 Restricted Share Incentive Scheme and Verification Opinions on 11 May 2021. | Targets of the 2021 Restricted Share Incentive Scheme and Verification Opinions on the website of the SSE (www.sse.com.cn). |
| On 10 May 2021, the Company held the 4th meeting of the 2nd Board of Directors and the 4th meeting of the 2nd Supervisory Committee, and reviewed and approved the Proposal on the Restricted Share Incentive Scheme for 2021 (Draft Revised) and its Summary and Proposal on the Management Measures for the Assessment of the Restricted Share Incentive Scheme for 2021 (Revised). | For details, please refer to the Announcement on the Resolutions of the 4th Meeting of the 2nd Board of Directors (Announcement No.: 2021-040) and Announcement on the Resolutions of the 4th Meeting of the 2nd Supervisory Committee (Announcement No.: 2021-041) on the website of the SSE (www.sse.com.cn). |
| On 20 May 2021, the Company held its 2020 Annual General Meeting, and reviewed and approved the Proposal on the Restricted Share Incentive Scheme for 2021 (Draft Revised) and its Summary, Proposal on the Management Measures for the Assessment of the Restricted Share Incentive Scheme for 2021 (Revised) and Proposal on the Request to the General Meeting to Authorize the Board of Directors to Handle Share Incentive-Related Matters. | For details, please refer to the Announcement on the Resolutions of the 2020 Annual General Meeting (Announcement No.: 2021-048) on the website of the SSE (www.sse.com.cn). |
| On 4 June 2021, the Company held the 5th Meeting of the 2nd Board of Directors and the 5th Meeting of the 2nd Supervisory Committee, and reviewed and approved the Proposal on the Adjustment of the List of Incentive Targets, Grant Number and Grant Price of the Restricted Share Incentive Scheme for 2021 and Proposal on Granting Restrictive Shares to Incentive Targets. The independent directors of the Company consented to this matter. The Board of Directors determined that the grant date of the Company's 2021 Restricted Share Incentive Scheme is 4 June 2021, which is in line with the relevant provisions of the Administrative Measures for Equity Incentive of Listed Companies and the 2021 Restricted Share Incentive Scheme for grant date. The Supervisory Committee of the Company verified the adjusted list of incentive targets again and expressed its clear consent. | For details, please refer to the Announcement on the Resolutions of the 5th Meeting of the 2nd Board of Directors (Announcement No.: 2021-054), Announcement on the Resolutions of the 5th Meeting of the 2nd Supervisory Committee (Announcement No.: 2021-055) and Verification Opinions of the Supervisory Committee on the List of Incentive Targets of the 2021 Restricted Share Incentive Scheme (Announcement No.: 2021-058) on the website of the SSE (www.sse.com.cn). |
| On 22 June 2021, the Company held the 6th meeting of the 2nd Board of Directors and the 6th meeting of the 2nd Supervisory Committee, and reviewed and approved the Proposal on the Achievement of Lifting the Restriction Conditions in the First Lifting Restriction Period of the 2020 Restricted Share Incentive Scheme and Proposal on the Adjustment of the Repurchase Price of the 2020 Restricted Share Incentive Scheme. The independent directors of the Company consented to this matter. In accordance with the Administrative Measures for Equity Incentive of Listed Companies, the Company's 2020 Restricted Share Incentive Scheme (Draft) and the authorization by the 2019 Annual General Meeting, the Board of Directors believed that the Company has made | For details, please refer to the Announcement on the Resolutions of the 6th Meeting of the 2nd Board of Directors (Announcement No.: 2021-059), Announcement on the Resolutions of the 6th Meeting of the 2nd Supervisory Committee (Announcement No.: 2021-060) and Announcement on the Achievement of Lifting the Restriction Conditions in the First Lifting Restriction Period of the 2020 Restricted Share Incentive Scheme (Announcement No.: 2021-061) and Announcement on the Adjustment of the Repurchase Price of the 2020 Restricted |
| an achievement of lifting the restriction conditions in the first lifting restriction period of the 2020 Restricted Share Incentive Scheme, and agreed that the Company should handle the relevant matters required for the lifting of the restricted sales of restricted shares for incentive targets who met the conditions. In addition, as the company paid cash drains on June 3, 2021 based on the total share capital of 600,575,900 shares, according to relevant regulations such as the Administrative Measures for Equity Incentive of Listed Companies, the Company's 2020 Restricted Share Incentive Scheme (Draft), the repurchase price of restricted shares are required to be adjusted accordingly, i.e., the repurchase price of restricted shares under the Restricted Share Incentive Scheme was adjusted from RMB76.13 per share to RMB74.13 per share. | Share Incentive Scheme (Announcement No.: 2021-062) on the website of the SSE (www.sse.com.cn). |
| On 2 July 2021, 21 incentive targets including Wen Bin had lost their qualification for the share incentive due to their departure from the Company, and the Company repurchased and canceled 31,000 restricted shares held by them which had been granted but not lifted from restricted sales. | For details, please refer to the Announcement on the Implementation of the Repurchase and Cancellation of Some Restricted Incentive Shares (Announcement No.: 2021-064) on the website of the SSE (www.sse.com.cn). |
| On 9 July 2021, the Company has made an achievement of lifting the restriction conditions in the first lifting restriction period of the 2020 Restricted Share Incentive Scheme, and the actual number of restricted shares that could be applied for lifting and trading in the market during the first lifting restriction period was 215,520 shares. | For details, please refer to the Announcement on Lifting the Restriction Conditions in the First Lifting Restriction Period of the 2020 Restricted Share Incentive Scheme and Trading in the Market (Announcement No.: 2021-069) on the website of the SSE (www.sse.com.cn). |
| On 28 October 2021, the Company held the 8th meeting of the 2nd Board of Directors and the 8th meeting of the 2nd Supervisory Committee, and reviewed and approved the Proposal on Repurchase and Cancellation of Some Restricted Shares. The independent directors of the Company consented to this matter. As some incentive targets of the 2020 Restricted Share Incentive Scheme left the Company, the Company agreed to repurchase and cancel 18,880 restricted shares under the 2020 Restricted Share Incentive Scheme at RMB74.13 per share. As some incentive targets of the 2021 Restricted Share Incentive Scheme left the company, the Company agreed to repurchase and cancel 13,900 restricted shares under the 2021 Restricted Share Incentive Scheme at RMB88.15 per share. | For details, please refer to the Announcement on the Resolutions of the 8th Meeting of the 2nd Board of Directors (Announcement No.: 2021-090), Announcement on the Resolutions of the 8th Meeting of the 2nd Supervisory Committee (Announcement No.: 2021-091), Announcement on the Repurchase and Cancellation of Some Restricted Shares (Announcement No.: 2021-094) and Announcement on Notifying Creditors of the Repurchase and Cancellation of Some Restricted Shares (Announcement No.: 2021-095). |
| On 24 December 2021, as 28 incentive targets including Zhang Hong and Wang Na had lost their qualification for the share incentive due to their departure from the Company and some of the incentive targets had lost the qualification of the incentive scheme due to their departure, the Company repurchased and canceled 32,780 restricted shares held by them which had been granted but not lifted from restricted sales. | For details, please refer to the Announcement on the Implementation of the Repurchase and Cancellation of Some Restricted Incentive Shares (Announcement No.: 2021-110) on the website of the SSE (www.sse.com.cn). |
(II) Incentive plans undisclosed in current announcements or disclosed but with new progressEquity incentive plans:
□ Applicable √ Not applicable
Other information:
□ Applicable √ Not applicable
Employee stock ownership plans:
□ Applicable √ Not applicable
Other incentive measures:
(III) Equity incentives granted to directors and senior management during the Reporting Period
√ Applicable □ Not applicable
Unit: share
| Name | Office title | Restricted shares held at the period-begin | Restricted shares granted in the Reporting Period | Grant price (RMB) | Unlocked shares | Shares still in lockup | Restricted shares held at the period-end | Closing market price (RMB) |
| Cai Yingfeng | Director | 12,500 | 12,800 | 88.15 | 5,000 | 20,300 | 20,300 | 167.30 |
| Li Guoqiang | Senior management | 13,800 | 10,600 | 88.15 | 5,520 | 18,880 | 18,880 | 167.30 |
| Total | / | 26,300 | 23,400 | / | 10,520 | 39,180 | 39,180 | / |
(IV) Establishment and formulation of appraisal and incentive mechanisms for seniormanagement during the Reporting Period
√ Applicable □ Not applicable
The remuneration of the senior management personnel of the Company is implemented based on theactual operations and the relevant rules of the Company.XII Development and Implementation of Internal Control Systems During the Reporting Period
√ Applicable □ Not applicable
In strict compliance with the Company Law, Securities Law, Code of Corporate Governance forListed Companies, Guidelines for Evaluation of Enterprise Internal Control and other relevant laws andregulations, the Company continuously establishes and improves its internal control system andenhances the level of internal control management.During the Reporting Period, in order to further promote the standardized operation of theCompany, enhance the authenticity, accuracy, completeness and timeliness of information disclosure ofthe annual report, and improve the quality and transparency of information disclosure of the annualreport, the Company formulated the Accountability Policy for Material Errors in Information Disclosureof the Annual Report. The Company intensified auditing and supervision, implemented special audits forwealth management and seal management, and provided timely feedback on problems found to businessdepartments for rectification. In addition, the Company has conducted knowledge publicity of internalcontrol for employees to raise their awareness of internal control and promote the development ofinternal control culture.Explanation of material weaknesses in internal control during the Reporting Period:
□ Applicable √ Not applicable
XIII Management and Control over Subsidiaries during the Reporting Period
√ Applicable □ Not applicable
During the reporting period, the Company strictly followed the requirements of the Shanghai StockExchange and various rules and regulations of the Board of Directors of the Company to regulate the
management and risk control of subsidiaries. Subsidiaries reported significant information such asoperations to the Company, and there were no undisclosed matters that should have been disclosed.XIV Independent Auditor’s Report on Internal Control
√ Applicable □ Not applicable
Upon audit, Pan-China Certified Public Accountants LLP is of the opinion that Gongniu maintained,in all material respects, effective internal control over financial reporting as of 31 December 2021, basedon the Basic Rules on Enterprise Internal Control and other applicable regulations.Whether the Independent Auditor’s Report on Internal Control is disclosed: YesType of the independent auditor’s opinion: Unmodified unqualified opinionXV Remediation of Problems Identified by Self-inspection in the Special Action on theGovernance of Listed CompaniesIn order to implement the spirit of the Opinions of the State Council on Further Improving theQuality of Listed Companies, the CSRC launched a special action on the governance of listed companies.According to the unified deployment and guidance of the CSRC Ningbo Bureau, the Companycompleted the first phase of self-inspection and actively carried out remediation of problems identifiedin the self-inspection list of corporate governance by carefully identifying the causes and formulating aremediation plan to complete the remediation. The details are as follows:
Analysis of the causes of the problems identified in the self-inspection and remediation plan:
(I) Basic information of the listed company
1. Whether the listed company has a board of directors that has expired without timely renewal.
Cause analysis: The 1st Board of Directors of the Company expired on 22 December 2020, and therenewal meeting was postponed as some directors returned from abroad and were quarantined forpandemic prevention and control.
Remediation measures: First, after the above problems were identified, the Company activelycontacted the relevant directors to determine the quarantine and the earliest time to attend the meetingsof the board of directors, the supervisory committee or the general meeting upon the end of thequarantine (determined to be 7 January 2021), and promoted the normal replacement procedure tominimize the impact as far as possible.
Remediation time: January 2021
Remediation effect: The Company has completed all the work for the change of term on 7 January2021. The future change of term will be timely carried out in strict accordance with the requirements.
(II) Shareholders, directors, supervisors and senior management personnel
2. Whether the directors, supervisors and senior management personnel of the listed company havethe following circumstances:
(A) Failure to attend or appoint another person to attend on behalf of him/her at the general meeting,the meeting of the board of directors or supervisory committee as required.
Cause analysis: Director Cai Yingfeng was absent from the1st Extraordinary General Meeting of2020 for a business trip, and Mr. Cao Wei and Mr. Xie Tao were unable to attend the meeting on-sitedue to the impact of the pandemic in Beijing at that time.
Remediation measures: The Company coordinated the time of the directors and supervisors inadvance and informed them that they should attend the General Meeting in accordance with theregulations.Remediation time: May 2021Remediation effect: All directors, supervisors and senior management personnel of the Companyattended the subsequent General Meeting of the Company (the 2020 Annual General Meeting), andexercised their powers and duties fully and diligently.
3. Whether there are cases where the independent directors have worked on-site for less than 10working days.
Cause analysis: Independent directors are mainly involved in the work of the Company throughconference seminars, and due to the pandemic, they often worked online, with less time for on-site work.
Remediation measures: First, the Company clarified to the independent directors the requirementson the duty performance of independent directors in the Guidelines on the Duty Performance ofIndependent Directors of Listed Companies (2020 Revision) and other business guidelines, requiringthem to work on-site for not less than 10 working days. Second, the Company actively promoted theshift of the independent directors' office performance from online to on-site, flexibly arranged for officesat the Group's headquarters (Cixi) and Shanghai to create more convenient and efficient conditions foron-site work, and adequately recorded the on-site work time of independent directors. The Companyattached importance to the corporate governance opinions put forward by the independent directors tofurther strengthen the standardized governance of the Company.
Remediation time: 2021
Improving the corporate governance mechanism is a long-term task. The Company will take thisself-inspection as an opportunity to conduct a comprehensive self-inspection and assessment of theCompany, and remedy the problems identified in the self-inspection in strict accordance with relevantlaws and regulations and regulatory requirements, so as to promote the construction of a long-termcorporate governance mechanism and further improve the Company's corporate governance.XVI Other information
□ Applicable √ Not applicable
Part V Environmental and Social ResponsibilityI Environment information(I) Description of the environmental protection of the company and its major subsidiaries that arekey emission units as declared by the environmental protection authorities
√ Applicable □ Not applicable
1. Discharge information
√ Applicable □ Not applicable
Ningbo Gongniu Electrics Co., Ltd. is a key unit supervised for soil environmental pollution inNingbo, with a commissioned disposal volume of 483.4 tons of hazardous waste in 2021. During theReporting Period, the Company discharged in strict accordance with the requirements of the
implemented pollutant discharge standards, with no environmental pollution incidents and no penaltiesimposed by the environmental protection authorities.None of the Company's units, other than Ningbo Gongniu Electrics Co., Ltd., is a key emission unitas declared by the environmental protection authorities.
2. Construction and operation of pollution control facilities
√ Applicable □ Not applicable
The Company actively implements the green development strategy, practices the concept of green,low-carbon and ecological development, increases investment in safety and environmental protection,applies green technologies of green, energy conservation, environmental protection and resource reuse,promotes innovation and transformation in manufacturing processes and business procedures, reduceswastewater, waste gas emissions and noise pollution, vigorously carries out energy-saving technologyreform and eliminates backward equipment with high energy consumption, and continuously develops agreen manufacturing system. In 2021, the Company invested a total of RMB18.85 million in operationcosts of environmental protection equipment, and the waste gas pollution treatment facilities have beenupgraded to the international advanced “zeolite rotary adsorption + RTO combustion” technology, withthe treatment effect of VOC reduced to 30mg/m3 and below.
3. Assessment of the environmental impact of construction projects and other administrativelicenses of environmental protection
√ Applicable □ Not applicable
All the Company's construction projects have fulfilled the environmental impact evaluation andother environmental protection administrative licensing procedures in accordance with the requirementsof national environmental protection laws and regulations.
4. Contingency plan for environmental emergencies
√ Applicable □ Not applicable
The Company has established an effective emergency response mechanism for environmentalemergencies, and the chemical intermediate warehouse of each base and each plant involving hazardouswaste and hazardous chemicals rehearse the contingency plan at least twice a year. In order to improvethe corporate ability to respond to environmental pollution accidents, the Company formulated theContingency Plan of Ningbo Gongniu Electrics Co., Ltd. for Environmental Emergencies (File No.330282-2021-029-L) in accordance with relevant legal provisions such as the requirements of theEnvironmental Protection Law of the People's Republic of China and based on the actual situation.During the Reporting Period, the Company optimized and revised the Safe Production Input ProtectionSystem, EHS Laws, Regulations and Other Management Regulations, Policy for Safety Management ofDangerous Operations and Management Regulations on BSS Provisions and Operation of GongniuSafety System.
5. Environmental self-monitoring plan
√ Applicable □ Not applicable
In accordance with the requirements of self-monitoring of environmental protection, the Companyhas formulated the Management System for Self-monitoring of Pollution Sources and regularly carriesout self-monitoring work. In 2021, it commissioned qualified third-party testing units to orderly carryout tests on spraying exhaust gas, noise at the factory boundary, domestic sewage, soil and groundwater,and the test reports issued showed that none of the pollutants exceeded the standards.
6. Administrative penalties imposed for environmental issues during the Reporting Period
□ Applicable √ Not applicable
7. Other environmental information that should be disclosed
√ Applicable □ Not applicable
Ningbo Gongniu Electrics Co., Ltd. Was included in the first batch of Ningbo 2022 positive list ofenterprises for ecological and environmental supervision and enforcement. Ningbo Gongniu ElectricsCo., Ltd. Was rated as A in the environmental credit evaluation of enterprises in Zhejiang Province in2021.(II) Environmental protection of companies other than key emission units
√ Applicable □ Not applicable
1. Administrative penalties for environmental problems
□ Applicable √ Not applicable
2. Other environmental information disclosed with reference to key emission units
√ Applicable □ Not applicable
Except for Ningbo Gongniu Electrics Co., Ltd., all other units of the Group are not key emissionunits and have strictly implemented relevant laws and regulations on environmental protection, installedadditional environmental protection equipment for processes that generate environmental pollution inaccordance with the requirements of the environmental credit evaluation, which passed the acceptanceand met the discharge standards. All three wastes were discharged in accordance with the standard.There was no environmental pollution accident and no punishment by the environmental protectionauthorities, and all the units were rated as A in the annual environmental credit evaluation of enterprisesin Zhejiang Province.
In particular, Ningbo Gongniu Photoelectric Technology Co., Ltd. Was included in the first batchof Ningbo 2022 positive list of enterprises for ecological and environmental supervision andenforcement.
3. Reasons for not disclosing other environmental information
□ Applicable √ Not applicable
(III) Information that is conducive to ecological protection, pollution prevention andenvironmental responsibility performance
√ Applicable □ Not applicable
To strengthen the awareness of environmental protection among employees, the Companyorganized a World Environment Day event on 5 June 2021 to publicize environmental protectionthrough cycling and walking activities; to further strengthen the environmental management of the
spraying line, the Company built a new spraying plant and upgraded the exhaust gas pollution treatmentfacilities from “activated carbon adsorption + catalytic combustion” to the current internationaladvanced “zeolite rotary adsorption + RTO combustion. Currently, the construction and relocation of thenew spraying plant have been completed.
In order to practice a circular economy and make effective use of resources, the molding plant hasset up a recycling mechanism for plastic pellets and reused at least 8,500 tons of plastic pellets throughshredding in 2021.(IV) Measures taken to reduce carbon emissions during the Reporting Period and their effects
√ Applicable □ Not applicable
The "14th Five-Year Plan" period is critical for China to achieve the peak in carbon emissions andpromote high-quality economic development and sustainable improvement of ecological andenvironmental quality. In order to conscientiously implement the national work requirements for carbonemission reduction, achieve peak carbon emissions and high-quality economic development, theCompany mainly works on the following aspects:
(1) The Company continuously promoted the construction of "green factories". In December 2020,Ningbo Gongniu Electrics Co., Ltd., a wholly-owned subsidiary of the Group, was accredited as a"National Green Factory" by the Ministry of Industry and Information Technology, and in August 2021,Ningbo Gongniu was again selected as one of the first five-star green factories in Ningbo. NingboGongniu actively implements the green development strategy, practices the concept of green, low-carbon and ecological development, increases investment in safety and environmental protection, appliesgreen technologies of green, energy conservation, environmental protection and resource reuse,promotes innovation and transformation in manufacturing processes and business procedures, reduceswastewater, waste gas emissions and noise pollution, vigorously carries out energy-saving technologyreform and eliminates backward equipment with high energy consumption, and continuously develops agreen manufacturing system.
(2) The Company has launched new energy vehicle charging plugs and points. Closely followingthe policy and industry development trend, the Company has expanded its electric connection businessfrom the home scenario to the new energy vehicle sector, and supported the development of the newenergy vehicle industry by providing consumers with better quality products and services throughtechnology and material innovation.II Fulfillment of Social Responsibility
√ Applicable □ Not applicable
For details, please refer to the 2021 Environmental, Social and Governance Report of GongniuGroup Co., Ltd. Published by the Company on the website of the Shanghai Stock Exchange(http://www.sse.com.cn).III Efforts in Poverty Alleviation, Rural Revitalization, etc
√ Applicable □ Not applicable
During the Reporting Period, the Company maintained sound development while taking practicalactions to actively consolidate and extend the achievements of poverty alleviation and support theimplementation of the rural revitalization strategy. In terms of poverty alleviation and bailout, theCompany actively responded to the planning requirements of the Zhejiang Provincial Government onthe "Shanhai Collaboration Project" by donating RMB1 million to Guotang Village in ChangshanCounty through the Cixi Charity Federation to help the poor and needy, while firmly supporting theorganization of poverty alleviation in the pair counties of Cixi City - Anlong and Xingren in Guizhou. Interms of giving back to the hometown, the Company donated RMB1 million to Guyaopu village, thebirthplace of the Company, for villagers' health check-ups and environmental hygiene construction, andsent an RMB1,000 New Year pocket to the elderly aged 70 or above before the Chinese New Year. TheCompany will continue to actively practice its corporate social responsibility based on the actualsituation.
Part VI Significant Events
I Fulfillment of Commitments(I) Commitments of the Company's actual controller, shareholders, related parties and acquirers, as well as the Company and other entities during theReporting Period or commitments continuing to the Reporting Period
√ Applicable □ Not applicable
| Commitment background | Commitment Category | Promisor | Commitment Contents | Time of commitment making and term | Whether there is a deadline for performance | Whether it is timely and strictly performed | If it is not timely performed, the specific reasons shall be stated | If it is not timely performed, the plan for the next step shall be stated |
| Commitments related to IPO | Restricted share sales | Liangji Industrial, Ninghui Investment, Suiyuan Investment | Within 36 months from the date of listing of the Company's shares, the promisor will not transfer or entrust others to manage the shares he/she directly or indirectly holds in the Company which were issued before the IPO, nor will the Company repurchase such shares. If the shares held by the promisor are reduced within two years after the expiry of the lock-up period, the price of such reduction shall not be lower than the issue price of the IPO (if the Company's shares are subject to ex-rights and ex-dividend matters such as dividend distribution, share bonus and capital reserves to share capital, the issue price will be adjusted ex-rights and ex-dividend, the same below); if the closing price of the Company's shares for 20 consecutive trading days is lower than the issue price within six months after the listing of the Company, or the closing price at the end of six months after the listing is lower than the | Within 36 months from the date of listing of the Company's shares | Yes | Yes | Not applicable | Not applicable |
| issue price, the lock-up period for holding the Company's shares will be automatically extended for at least six months. | |||||||
| Restricted share sales | Qiyuanbao | Within 36 months from the date of listing of the Company's shares, the promisor will not transfer or entrust others to manage the shares he/she directly or indirectly holds in the Company which were issued before the IPO, nor will the Company repurchase such shares. | Within 36 months from the date of listing of the Company's shares | Yes | Yes | Not applicable | Not applicable |
| Restricted share sales | Hillhouse Daoying, Xiaozhou Investment, Bowei Investment, Sun Rongfei | Within 12 months from the date of listing of the Company's shares, the promisor will not transfer or entrust others to manage the shares he/she directly or indirectly holds in the Company which were issued before the IPO, nor will the Company repurchase such shares. | Within 12 months from the date of listing of the Company's shares | Yes | Yes | Not applicable | Not applicable |
| Restricted share sales | Ruan Liping, Ruan Xueping, Cai Yingfeng, Liu Shengsong, Zhou Zhenghua, Li Guoqiang, Zhang Lina | Within 36 months from the date of listing of the Company's shares, the promisor will not transfer or entrust others to manage the shares he/she directly or indirectly holds in the Company which were issued before the IPO, nor will the Company repurchase such shares. If the Company's shares directly or indirectly held by the promisor are reduced within two years after the expiry of the lock-up period, the price of such reduction shall not be lower than the issue price (if the Company's shares are subject to ex-rights and ex-dividend matters such as dividend distribution, share bonus and capital reserves to share capital, the issue price will be adjusted ex-rights and ex-dividend, the same below); if the closing price of the Company's shares for 20 consecutive trading | Within 36 months from the date of listing of the Company's shares | Yes | Yes | Not applicable | Not applicable |
| days is lower than the issue price within six months after the listing of the Company, or the closing price at the end of six months after the listing is lower than the issue price, the lock-up period for holding the Company's shares will be automatically extended for at least six months. After the expiry of the above-mentioned commitment lock-up period, during my term of office as a director, supervisor or senior management personnel of the Company, if I leave the Company before the expiry of my term of office, during the term of office determined at the time of my assumption of office and within six months after the expiry of my term of office: 1) I will transfer no more than 25% of the total number of shares of the Company held directly or indirectly by me each year; 2) I will not transfer the shares of the Company held directly or indirectly by me within six months after leaving the Company; 3) (iii) I will comply with laws, administrative regulations, departmental rules and regulations, regulatory documents and other regulations for the transfer of shares by directors, supervisors and senior management personnel of the business rules of the stock exchange. | |||||||
| Restricted share sales | Shen Huiyuan, Guan Xuejun, Li Yu | Within 36 months from the date of listing of the Company's shares, the promisor will not transfer or entrust others to manage the shares he/she directly or indirectly holds in the Company which were issued before the IPO, nor will the Company repurchase such shares. After the expiry of the above-mentioned commitment lock-up period, during my term of office as a director, supervisor or senior | Within 36 months from the date of listing of the Company's shares | Yes | Yes | Not applicable | Not applicable |
| management personnel of the Company, if I leave the Company before the expiry of my term of office, during the term of office determined at the time of my assumption of office and within six months after the expiry of my term of office: 1) I will transfer no more than 25% of the total number of shares of the Company held directly or indirectly by me each year; 2) I will not transfer the shares of the Company held directly or indirectly by me within six months after leaving the Company; 3) (iii) I will comply with laws, administrative regulations, departmental rules and regulations, regulatory documents and other regulations for the transfer of shares by directors, supervisors and senior management personnel of the business rules of the stock exchange. | ||||||||
| Commitments related to share incentives | Others | Gongniu Group | The Company will not provide loans and any other forms of financial assistance, including provision of guarantees for loans, to the incentive targets of the 2020 Restricted Share Incentive Scheme of Gongniu Group for acquiring the relevant restricted shares under this incentive scheme. | No | Yes | Not applicable | Not applicable | |
| Others | Incentive targets of the 2020 Restricted Share Incentive Scheme | If the Company is not eligible for the grant of equity or exercise of equity arrangement due to a false record, misleading statement, or material omission in the information disclosure document, the incentive target shall return to the Company all the benefits received from the share incentive scheme after the false record, misleading statement or material omission are confirmed in relevant information disclosure documents. | No | Yes | Not applicable | Not applicable | ||
| Others | Gongniu | The Company will not provide loans and any | No | Yes | Not | Not |
| Group | other forms of financial assistance, including the provision of guarantees for loans, to the incentive targets of the 2021 Restricted Share Incentive Scheme of Gongniu Group for acquiring the relevant restricted shares under this incentive scheme. | applicable | applicable | |||||
| Others | Incentive targets of the 2021 Restricted Share Incentive | If the Company is not eligible for the grant of equity or exercise of equity arrangement due to a false record, misleading statement or material omission in the information disclosure document, the incentive target shall return to the Company all the benefits received from the share incentive scheme after the false record, misleading statement or material omission are confirmed in relevant information disclosure documents. | No | Yes | Not applicable | Not applicable | ||
| Other undertakings | Others | Liangji Industrial | In strict accordance with the Proposal on the Stabilization of Share Price within Three Years of Listing, Ningbo Liangji Industrial Co., Ltd. will fully and effectively fulfill its obligations and responsibilities under the Proposal, and strongly urge the joint stock company and the relevant parties to fully and effectively fulfill their obligations and responsibilities under the Proposal. When the General Meeting of the Company resolves on the repurchase of shares in accordance with the provisions of the Proposal, Ningbo Liangji Industrial Co., Ltd. undertakes to vote in favor of the proposal on the repurchase at the General Meeting. | Three years from the date of listing of the Company | Yes | Yes | Not applicable | Not applicable |
| Others | Ruan Liping, Ruan Xueping | In strict accordance with the Proposal on the Stabilization of Share Price within Three Years of Listing, I will fully and effectively fulfill its obligations and responsibilities under the Proposal, and strongly urge the company and | Three years from the date of listing of the Company | Yes | Yes | Not applicable | Not applicable |
| the relevant parties to fully and effectively fulfill the obligations and responsibilities under the Proposal. When the General Meeting of the Company resolves on the repurchase of shares in accordance with the provisions of the Proposal, I undertake that I and those acting in concert will vote in favor of the proposal on the repurchase at the General Meeting. | |||||||
| Others | Cai Yingfeng, Liu Shengsong, Zhou Zhenghua, Cao Wei, Zhang Zeping, He Hao, Xie Tao, Li Guoqiang, Zhang Lina | In strict accordance with the Proposal on the Stabilization of Share Price within Three Years of Listing, I will fully and effectively fulfill its obligations and responsibilities under the Proposal, and strongly urge the company and the relevant parties to fully and effectively fulfill the obligations and responsibilities under the Proposal. | Three years from the date of listing of the Company | Yes | Yes | Not applicable | Not applicable |
| Others | Liangji Industrial | (1) The company undertakes not to transfer benefits to other entities or individuals free of charge or on unfair terms, nor to impair the interests of the issuer by any other means. (2) The company undertakes not to intervene in the issuer's management activities, and not to encroach on its interests. (3) The company undertakes to exercise the rights of shareholders as stipulated in the laws, regulations and regulatory documents in accordance with the law and not to prejudice the legitimate rights and interests of the issuer and other shareholders. In the event of any breach of the above commitments, the | No | Yes | Not applicable | Not applicable |
| company agrees to accept relevant penalties or management measures in accordance with the relevant regulations and rules formulated or issued by the China Securities Regulatory Commission and the Shanghai Stock Exchange and other securities regulatory authorities, and bear individual and joint and several liability to the issuer and investors for any losses caused to the issuer and investors by the company. | ||||||||
| Other undertakings | Settlement of horizontal competition | Liangji Industrial | (1) The company and companies or other organizations controlled by the company are not engaged in the same or similar business as the issuer and its subsidiaries, with no horizontal competition. (2) The company and companies or other organizations controlled by the company will not engage in the same or similar business as the existing business of the issuer and its subsidiaries in any form outside China, including not investing in, acquiring or merging with companies or other economic organizations outside China that compete with the existing principal business of the issuer and its subsidiaries. (3) If the issuer and its subsidiaries engage in new business in the future, the company and companies or other organizations controlled by the company will not engage in business activities in direct competition with the new business of the issuer and its subsidiaries by share holding or participating in but having substantial control over the shares of the issuer and its subsidiaries within or outside China, including investing in, acquiring or merging with companies or other economic organizations within or outside China that directly compete with the new | No | Yes | Not applicable | Not applicable |
| business of the issuer and its subsidiaries in the future. (4) If the company and legal entities controlled by the company have business operations in direct competition with the issuer and its subsidiaries, the issuer and its subsidiaries shall have the right to centralize the competing businesses to the operations of the issuer and its subsidiaries through preferential acquisition or entrustment. (5) The company undertakes not to use its position as a shareholder of the issuer and its subsidiaries to seek improper benefits and thereby harm the rights and interests of other shareholders of the issuer and its subsidiaries. If the rights and interests of the issuer and its subsidiaries are damaged due to a breach of the above statements and commitments by the company and companies or other organizations controlled by the company, the company agrees to be liable to the issuer and its subsidiaries for the corresponding damages. | ||||||||
| Other undertakings | Settlement of horizontal competition | Ruan Liping, Ruan Xueping | (1) I and companies or other organizations controlled by me are not engaged in the same or similar business as the issuer and its subsidiaries, with no horizontal competition. (2) I and companies or other organizations controlled by me will not engage in the same or similar business as the existing business of the issuer and its subsidiaries in any form outside China, including not investing in, acquiring or merging with companies or other economic organizations outside China that compete with the existing principal business of the issuer and its subsidiaries. (3) If the issuer and its subsidiaries engage in new business in the | No | Yes | Not applicable | Not applicable |
| future, I and companies or other organizations controlled by me will not engage in business activities in direct competition with the new business of the issuer and its subsidiaries by share holding or participating in but having substantial control over the shares of the issuer and its subsidiaries within or outside China, including investing in, acquiring or merging with companies or other economic organizations within or outside China that directly compete with the new business of the issuer and its subsidiaries in the future. (4) If I and legal entities controlled by me have business operations in direct competition with the issuer and its subsidiaries, the issuer and its subsidiaries shall have the right to centralize the competing businesses to the operations of the issuer and its subsidiaries through preferential acquisition or entrustment. (5) I undertake not to use its position as a shareholder of the issuer and its subsidiaries to seek improper benefits and thereby harm the rights and interests of other shareholders of the issuer and its subsidiaries. If the rights and interests of the issuer and its subsidiaries are damaged due to a breach of the above statements and commitments by me and companies or other organizations controlled by me, I agree to be liable to the issuer and its subsidiaries for the corresponding damages. | ||||||||
| Other undertakings | Settlement of related-party transactions | Liangji Industrial | The company will minimize and standardize the related-party transactions with Gongniu Group Co., Ltd. and its wholly-owned or controlled subsidiaries. For related-party transactions that are inevitable or occur for | No | Yes | Not applicable | Not applicable |
| reasonable reasons, the company will strictly comply with the provisions of relevant laws, regulations and the Articles of Association of the company, follow the principles of equitable, remunerative and fair transactions, perform legal procedures, and determine the transaction prices in accordance with reasonable prices recognized by the market to ensure the fairness of the related-party transactions. The company will not leverage its shareholder status to induce the General Meeting or the Board of Directors of the Company to make resolutions that infringe upon the legitimate rights and interests of the Company and other shareholders. In operating decisions, the company will strictly follow the relevant provisions of the Company Law and the Articles of Association to implement the avoidance system of related shareholders to safeguard the legitimate rights and interests of all shareholders. | ||||||||
| Other undertakings | Settlement of related-party transactions | Ruan Liping, Ruan Xueping | I will minimize and standardize the related-party transactions with Gongniu Group Co., Ltd. and its wholly-owned or controlled subsidiaries. For related-party transactions that are inevitable or occur for reasonable reasons, I will strictly comply with the provisions of relevant laws, regulations and the Articles of Association of the company, follow the principles of equitable, remunerative and fair transactions, perform legal procedures, and determine the transaction prices in accordance with reasonable prices recognized by the market to ensure the fairness of the related-party transactions. I will not leverage its | No | Yes | Not applicable | Not applicable |
shareholder status to induce the GeneralMeeting or the Board of Directors of theCompany to make resolutions that infringeupon the legitimate rights and interests of theCompany and other shareholders. In operatingdecisions, I will strictly follow the relevantprovisions of the Company Law and theArticles of Association to implement theavoidance system of related shareholders tosafeguard the legitimate rights and interests ofall shareholders.
(II) Where there had been an earnings forecast for an asset or project and the Reporting Period was still within the forecast period, explain why theforecast has or has not been reached for the Reporting Period.
□ Forecast reached □ Forecast unreached √ Not applicable
(III) Fulfillment of performance commitments and the impact on goodwill impairment tests
□ Applicable √ Not applicable
II Occupation of the Company’s Capital by the Controlling Shareholder or Other Related Parties for Non-Operating Purposes during the ReportingPeriod
□ Applicable √ Not applicable
III Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
IV Explanation Given by the Board of Directors Regarding “Independent Auditor’s Report withModified Opinion”
□ Applicable √ Not applicable
V Reasons for Accounting Policy or Estimate Changes or Correction of Material AccountingErrors and the Impact(I) Reasons for accounting policy or estimate changes and the impact
√ Applicable □ Not applicable
For details, see “44. Changes to critical accounting policies and estimates” under “V CriticalAccounting Policies and Estimates” of “Part X Financial Statements”.(II) Reasons for correction of material accounting errors and the impact
□ Applicable √ Not applicable
(III) Communications with the former CPA firm
□ Applicable √ Not applicable
(IV) Other information
□ Applicable √ Not applicable
VI Appointment and Dismissal of CPA Firm
Unit: RMB’0,000
| In service | |
| Name of the domestic CPA firm | Pan-China Certified Public Accountants LLP |
| The Company’s payment to the domestic CPA firm | 195.00 |
| How many years the domestic CPA firm has provided audit service for the Company | 9 |
| Name | Payment | |
| CPA firm for the audit of internal control | Pan-China Certified Public Accountants LLP | 50.00 |
| Sponsor | Sinolink Securities Co., Ltd. |
Appointment and dismissal of CPA firm:
√ Applicable □ Not applicable
As resolved by the 2020 Annual General Meeting of Shareholders, the Company decided to re-appoint Pan-China Certified Public Accountants LLP as the independent auditor for the financialstatements and internal control of 2021.Change of the CPA firm during the audit:
□ Applicable √ Not applicable
VII Delisting Risk(I) Reasons for the delisting risk warning
□ Applicable √ Not applicable
(II) The Company’s response
□ Applicable √ Not applicable
(III) Risk of termination of listing and the reasons
□ Applicable √ Not applicable
VIII Insolvency and Reorganization
□ Applicable √ Not applicable
IX Significant Legal Matters
√ The Company has material litigation and arbitration this year
□The Company has no material litigation and arbitration this year
(I) Litigation and arbitration matters disclosed in current announcement with no subsequentprogress
□ Applicable √ Not applicable
(II) Litigation and arbitration not disclosed in current announcement or with subsequent progress
√ Applicable □ Not applicable
Unit: RMB'0,000
| During the Reporting Period: | |||||||||
| Plaintiff (accuser) | Defendant (accused) | Joint-and-several liable party | Type of litigation and arbitration | Basic Information on litigation (arbitration) | Amount involved in litigation (arbitration) | Whether the litigation (arbitration) resulted in provisions and amount | Litigation (arbitration) progress | Litigation (arbitration) results and influences | Execution of litigation (arbitration) judgment |
| Shenzhen Lanse Feiwu Technology Co., Ltd. | Ningbo Gongniu | Litigation of invention patent disputes | In November 2017, Shenzhen Lanse Feiwu Technology Co., Ltd. filed litigation against Ningbo Gongniu as the defendant in a dispute over infringement of invention patent rights, case No. (2019) ZH. 02 M.CH. No. 13 [original case No. (2017) Y. 73 M.CH. No. 4526]. Invention patent involved is "control method and equipment for self-powered electronic fixtures subject to reset" (Patent | 82.50 | No | The second trial has been decided | The second trial ruled that Ningbo Gongniu should cease its infringement and pay a compensation of RMB300,000. | The company has executed and will recover from the relevant suppliers at the same time in accordance with the contractual agreements and relevant legal provisions. | |
| No. ZL201280076997.8) | |||||||||
| Shenzhen Lanse Feiwu Technology Co., Ltd. | Ningbo Gongniu | Litigation of invention patent disputes | In March 2018, Shenzhen Lanse Feiwu Technology Co., Ltd. filed litigation against Ningbo Gongniu as the defendant in a dispute over infringement of invention patent rights, case No. (2018) Y. 03 M.CH. No. 222. The invention patent involved is "control method and equipment for self-powered electronic fixtures subject to reset" (Patent No. ZL201280076997.8) | 150.00 | No | The second trial has been decided | The second trial ruled that Ningbo Gongniu should cease the manufacture, sale and promise to sell and destroy its stock of infringing products. The plaintiff was paid RMB600,000 for economic loss and reasonable costs to defend its rights. | The company has executed and will recover from the relevant suppliers at the same time in accordance with the contractual agreements and relevant legal provisions. |
(III) Other information
□ Applicable √ Not applicable
X Punishments on the Company as well as Its Directors, Supervisors, Senior Management,Controlling Shareholder and Actual Controller for Violation of Laws or Regulations, as well as theRelevant Rectifications
□ Applicable √ Not applicable
XI Credit Standings of the Company as well as Its Controlling Shareholder and Actual Controllerduring the Reporting Period
□ Applicable √ Not applicable
XII Major Related-Party Transactions(I) Continuing related-party transactions
1. Already disclosed in current announcement without new progress or changes
□ Applicable √ Not applicable
2. Disclosed in current announcement but with new progress or changes
√ Applicable □ Not applicable
| Transaction overview | Index to the disclosed information |
| The Proposal on Estimated Continuing Related-Party Transactions for 2021 was approved at the Second Meeting of the Second Board of Directors. For details, see the Announcement on Estimated Continuing Related-Party Transactions for 2021 (Announcement No. 2021-020) disclosed by the Company during the Reporting Period. For the actual execution of the aforesaid estimated related-party transactions, see the Announcement on Estimated Continuing Related-Party Transactions for 2022 (Announcement No. 2022-024). | www.sse.com.cn (website of the Shanghai Stock Exchange) |
3. Undisclosed in current announcement
□ Applicable √ Not applicable
(II) Related-party transactions regarding purchase or sale of assets or equity investments
1. Already disclosed in current announcement without new progress or changes
□ Applicable √ Not applicable
2. Disclosed in current announcement but with new progress or changes
□ Applicable √ Not applicable
3. Undisclosed in current announcement
□ Applicable √ Not applicable
4. Where a performance commitment is involved in such a related-party transaction, theperformance results for the Reporting Period shall be disclosed.
□ Applicable √ Not applicable
(III) Major related-party transactions regarding joint investments in third parties
1. Already disclosed in current announcement without new progress or changes
□ Applicable √ Not applicable
2. Disclosed in current announcement but with new progress or changes
□ Applicable √ Not applicable
3. Undisclosed in current announcement
□ Applicable √ Not applicable
(IV) Amounts due to and from related parties
1. Already disclosed in current announcement without new progress or changes
□ Applicable √ Not applicable
2. Disclosed in current announcement but with new progress or changes
□ Applicable √ Not applicable
3. Undisclosed in current announcement
□ Applicable √ Not applicable
(V) Financial transactions between the Company and related finance companies, or betweenfinance companies under the Company’s control and related parties
□ Applicable √ Not applicable
(VI) Other information
□ Applicable √ Not applicable
XIII Major Contracts and the Execution(I) Entrustment, Contracting and Leases
1. Entrustment
□ Applicable √ Not applicable
2. Contracting
□ Applicable √ Not applicable
3. Leases
□ Applicable √ Not applicable
(II) Guarantees
□ Applicable √ Not applicable
(III) Cash entrusted to other entities for management
1. Cash entrusted for wealth management
(1) Total cash entrusted for wealth management
√ Applicable □ Not applicable
Unit: RMB’0,000
| Type | Funding source | Amount | Undue amount | Unrecovered overdue amount |
| Bank’s financial product | Self-funded | 460,660.00 | 460,660.00 | |
| Bank’s financial product | Raised funds | 62,000.00 | 20,000.00 | |
| Structured deposits | Self-funded | 140,001.00 | 50,001.00 | |
| Structured deposits | Raised funds | 128,000.00 | 60,000.00 | |
| Trust product | Self-funded | 200,000.00 | 112,000.00 |
Other information
□ Applicable √ Not applicable
(2) Single Wealth Management Entrustment
√ Applicable □ Not applicable
Unit: RMB’0,000
| Consignee | Type of financial product | Amount | Start date | End date | Funding source | Investment direction | Way of repayment | Annualized rate of return | Expected returns (if any) | Actual gain/loss in the Reporting Period | Recovery/payment of gain/loss in the Reporting Period | Through the statutory procedure or not | Continuing wealth management plans or not | Impairment allowance (if any) |
| CITIC Trust Co., Ltd. | Trust product | 3,000.00 | 2021-8-19 | 2022-2-21 | Self-funded | Principal repayment with all interest upon maturity | 4.50% | Undue | Yes | Yes | ||||
| Agricultural Bank of China, Cixi Shiqiao Sub-branch | Bank’s financial product | 6,900.00 | 2021-11-9 | Infinite | Self-funded | Principal repayment with all interest upon maturity | 2.5%-2.8% | Undue | Yes | Yes | ||||
| Agricultural | Structure | 30,000.00 | 2021 | 2022- | Raised | Principal | 1.8-3.5% | Undue | Yes | Yes |
| Bank of China, Cixi Shiqiao Sub-branch | d deposits | -1-22 | 1-20 | funds | repayment with all interest upon maturity | |||||||||
| Agricultural Bank of China, Cixi Shiqiao Sub-branch | Bank’s financial product | 3,350.00 | 2021-9-16 | 2022-1-7 | Self-funded | Principal repayment with all interest upon maturity | 2.5%-3.05% | Undue | Yes | Yes | ||||
| China Minsheng Bank Co., Ltd., Ningbo Cixi Sub-branch | Bank’s financial product | 47,200.00 | 2021-12-30 | Infinite | Self-funded | Principal repayment with all interest upon maturity | 2.79%-2.90% | Undue | Yes | Yes | ||||
| China Minsheng Bank Co., Ltd., Ningbo Cixi Sub-branch | Bank’s financial product | 20,000.00 | 2021-8-25 | 2022-2-21 | Self-funded | Principal repayment with all interest upon maturity | 3.3-4.5% | Undue | Yes | Yes | ||||
| China Construction Bank, Shanghai Branch | Structured deposits | 10,000.00 | 2021-2-4 | 2022-2-4 | Raised funds | Principal repayment with all interest upon maturity | 2.1-3.5% | Undue | Yes | Yes | ||||
| China Everbright Bank Co., Ltd., Ningbo Cixi Sub-branch | Bank’s financial product | 5,000.00 | 2021-12-31 | Infinite | Self-funded | Principal repayment with all interest upon maturity | 3.00% | Undue | Yes | Yes |
| Industrial and Commercial Bank of China Limited, Cixi Henghe Sub-branch | Structured deposits | 50,000.00 | 2021-6-1 | 2022-11-17 | Self-funded | Principal repayment with all interest upon maturity | 1.5-3.8% | Undue | Yes | Yes | ||||
| China Merchants Bank Co., Ltd., Ningbo Hangzhou Bay New Area Sub-branch | Bank’s financial product | 12,520.00 | 2021-12-29 | Infinite | Self-funded | Principal repayment with all interest upon maturity | 2.80% | Undue | Yes | Yes | ||||
| Xingye Securities Co., Ltd. | Securities firm’s financial product | 10,000.00 | 2021-12-23 | 2022-6-23 | Raised funds | Principal repayment with all interest upon maturity | 0.5%-5.9% | Undue | Yes | Yes | ||||
| Shanghai Yongzheng Asset Management Co., Ltd. | Securities firm’s financial product | 20,000.00 | 2021-8-30 | 2022-8-30 | Self-funded | Principal repayment with all interest upon maturity | 4.80% | Undue | Yes | Yes | ||||
| Shanghai Haitong Asset Management Co., Ltd. | Securities firm’s financial product | 55,000.00 | 2021-4-27 | 2022-7-6 | Self-funded | Principal repayment with all interest upon maturity | 5%-5.3% | Undue | Yes | Yes | ||||
| Shanghai International Trust Co., Ltd. | Trust product | 4,000.00 | 2021-10-26 | Infinite | Self-funded | Principal repayment with all interest upon | 4.60% | Undue | Yes | Yes |
| maturity | ||||||||||||||
| Shanghai International Trust Co., Ltd. | Trust product | 20,000.00 | 2021-7-7 | 2022-7-6 | Self-funded | Principal repayment with all interest upon maturity | 4.65% | Undue | Yes | Yes | ||||
| Shanghai Everbright Securities Asset Management Co., Ltd. | Securities firm’s financial product | 142,000.00 | 2021-4-23 | 2023-1-31 | Self-funded | Principal repayment with all interest upon maturity | 4.5%-5.15% | Undue | Yes | Yes | ||||
| Bank of Ningbo Co., Ltd., Cixi Sub-branch | Bank’s financial product | 97,000.00 | 2020-8-12 | 2023-10-25 | Self-funded | Principal repayment with all interest upon maturity | 3.6-4.6% | Undue | Yes | Yes | ||||
| Lujiazui International Trust Co., Ltd. | Trust product | 35,000.00 | 2021-1-14 | 2022-1-17 | Self-funded | Principal repayment with all interest upon maturity | 5.05%-5.3% | Undue | Yes | Yes | ||||
| Bank of Communications, Ningbo Xincheng Sub-branch | Structured deposits | 20,000.00 | 2021-1-21 | 2022-1-21 | Raised funds | Principal repayment with all interest upon maturity | 1.75-3.2% | Undue | Yes | Yes | ||||
| Huatai Securities (Shanghai) Asset Management | Securities firm’s financial product | 40,000.00 | 2021-7-13 | 2022-9-6 | Self-funded | Principal repayment with all interest | 4.80% | Undue | Yes | Yes |
| Co., Ltd. | upon maturity | |||||||||||||
| Huaneng Guicheng Trust Co., Ltd. | Trust product | 30,000.00 | 2021-8-19 | 2022-8-25 | Self-funded | Principal repayment with all interest upon maturity | 6.00% | Undue | Yes | Yes | ||||
| Everbright Securities Co., Ltd. | Securities firm’s financial product | 5,000.00 | 2021-11-10 | 2022-2-11 | Raised funds | Principal repayment with all interest upon maturity | 1.8%-6.3% | Undue | Yes | Yes | ||||
| China Everbright Bank, Minhang Sub-branch | Structured deposits | 1.00 | 2020-12-21 | Infinite | Self-funded | Principal repayment with all interest upon maturity | 1.50% | Undue | Yes | Yes | ||||
| Everbright Xinglong Trust Co., Ltd. | Trust product | 20,000.00 | 2021-1-14 | 2022-3-24 | Self-funded | Principal repayment with all interest upon maturity | 5.35% | Undue | Yes | Yes | ||||
| Industrial and Commercial Bank of China, Xinzhuang Sub-branch | Bank’s financial product | 1,690.00 | 2019-9-16 | Infinite | Self-funded | Principal repayment with all interest upon maturity | 2.24%-2.27% | Undue | Yes | Yes | ||||
| Founder Securities Co., Ltd. | Securities firm’s financial product | 10,000.00 | 2021-11-10 | 2022-11-10 | Self-funded | Principal repayment with all | 4.50% | Undue | Yes | Yes |
| interest upon maturity | ||||||||||||||
| Founder Securities Co., Ltd. | Securities firm’s financial product | 5,000.00 | 2021-12-28 | 2022-9-8 | Raised funds | Principal repayment with all interest upon maturity | 3.90% | Undue | Yes | Yes |
Other information:
□ Applicable √ Not applicable
(3) Impairment allowances for wealth management entrustment
□ Applicable √ Not applicable
2. Entrusted Loans
(1) Total Entrusted Loans
□ Applicable √ Not applicable
Other information:
□ Applicable √ Not applicable
(2) Single Entrustment Loans
□ Applicable √ Not applicable
Other information:
□ Applicable √ Not applicable
(3) Impairment allowances for entrusted loans
□ Applicable √ Not applicable
3. Other information
□ Applicable √ Not applicable
(IV) Other significant contracts
□ Applicable √ Not applicable
XIV Other Significant Events for Investors’ Judgement of Value and Investment Decision-making
□ Applicable √ Not applicable
Part VII Changes in Ordinary Shares and Information about Shareholders
I Share Changes(I) Share changes
1. Share changes
Unit: share
| Before | Increase/decrease in the current period (+/-) | After | |||||||
| Shares | Percentage (%) | New issue | Bonus issue from profit | Bonus issue from capital reserves | Other | Subtotal | Shares | Percentage (%) | |
| I Restricted shares | 540,613,800 | 90.01 | 668,400 | -15,702,694 | -15,034,294 | 525,579,506 | 87.42 | ||
| 1. Shares held by the state | |||||||||
| 2. Shares held by state-owned corporations | |||||||||
| 3. Shares held by other domestic investors | 540,613,800 | 90.01 | 668,400 | -15,702,694 | -15,034,294 | 525,579,506 | 87.42 | ||
| Including: Shares held by domestic corporations | 345,819,079 | 57.58 | -14,932,971 | -14,932,971 | 330,886,108 | 55.04 | |||
| Shares held by domestic individuals | 194,794,721 | 32.43 | 668,400 | -769,723 | -101,323 | 194,693,398 | 32.38 | ||
| 4. Shares held by overseas investors | |||||||||
| Including: | |||||||||
| Shares held by overseas corporations | |||||||||
| Shares held by overseas individuals | |||||||||
| II Unrestricted shares | 60,000,000 | 9.99 | 15,601,014 | 15,601,014 | 75,601,014 | 12.58 | |||
| 1. RMB-denominated ordinary shares | 60,000,000 | 9.99 | 15,601,014 | 15,601,014 | 75,601,014 | 12.58 | |||
| 2. Domestically listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III Total shares | 600,613,800 | 100.00 | 668,400 | -101,680 | 566,720 | 601,180,520 | 100.00 |
2. Description of changes in shares
√ Applicable □ Not applicable
(1) The 15,385,494 IPO restricted shares in total held by four shareholders, Zhuhai Hillhouse Daoying Investment Partnership (Limited Partnership), ShenzhenXiaozhou Investment Co., Ltd., Cixi Bowei Investment Partnership (Limited Partnership) (later renamed as Anji Bowei Enterprise Management Partnership(Limited Partnership)) and Sun Rongfei, were traded in the market on 8 February 2021 upon the expiry of the lock-up period. For details, please refer to theAnnouncement of Gongniu Group on the Trading in the Market of Some IPO Restricted Shares (Announcement No.: 2021-012) disclosed by the Company on thewebsite of the Shanghai Stock Exchange (www.sse.com.cn) on 30 January 2021.
(2) 21 incentive targets including Wu Jun had lost their qualification for the share incentive due to their departure from the Company, and the Companyrepurchased and canceled 37,900 restricted shares held by them which had been granted but not lifted from restricted sales on 10 February 2021. For details, pleaserefer to the Announcement of Gongniu Group on the Repurchase and Cancellation of Some Restricted Incentive Shares (Announcement No.: 2021-014) disclosed bythe Company on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 6 February 2021.
(3) Repurchase and cancellation of some restricted incentive shares
According to the provisions of the 2020 Restricted Share Incentive Scheme (Draft) of Gongniu Group Co., Ltd., 21 incentive targets including Wen Bin hadlost the incentive qualification of the Incentive Scheme due to their departure from the Company, and the Company completed the repurchase and cancellation of31,000 restricted shares held by them which had been granted but not lifted from restricted sales on 2 July 2021. Upon completion of the cancellation, the totalnumber of shares of the Company was changed from 600,575,900 shares to 600,544,900 shares. For details, please refer to the Announcement of Gongniu Group onthe Repurchase and Cancellation of Some Restricted Incentive Shares (Announcement No.: 2021-064) disclosed by the Company on the website of the ShanghaiStock Exchange (www.sse.com.cn) on 30 June 2021.
(4) Grant of 2021 Restricted Share Incentive Scheme
On 28 April 2021, the Company held the 3rd Meeting of the 2nd Board of Directors and the 3rd Meeting of the 2nd Supervisory Committee, and reviewed andapproved the Proposal on the Restricted Share Incentive Scheme for 2021 (Draft) and its Summary of the Company and the Proposal on the Management Measuresfor the Assessment of the Restricted Share Incentive Scheme for 2021. The grant date of the restricted shares was 4 June 2021, and Pan-China Certified PublicAccountants LLP issued the Capital Verification Report of Gongniu Group Co., Ltd. (T.J.Y. [2021] No. 343) on 5 July 2021, which verified the newly registeredcapital and paid-in share capital as at 22 June 2021. The Company has received a total amount of RMB58,919,460.00 from 523 incentive targets for the subscriptionof restricted shares in monetary assets. Of this amount, RMB668,400.00 is included in paid-in share capital and RMB58,251,060.00 is included in capital reserves(share capital premium).
On 15 July 2021, the Company completed the registration of the grant of the 2021 Restricted Share Incentive Scheme and granted a total of 668,400 restrictedshares to 523 incentive targets, increasing the total share capital of the Company from 600,544,900 shares to 601,213,300 shares. For details, please refer to theAnnouncement of Gongniu Group on the Grant Results of the 2021 Restricted Share Incentive Scheme (Announcement No.: 2021-072) disclosed by the Companyon the website of the Shanghai Stock Exchange (www.sse.com.cn) on 17 July 2021.
(5) Repurchase and cancellation of some restricted incentive shares
According to the provisions of the 2020 Restricted Share Incentive Scheme (Draft) of Gongniu Group Co., Ltd. and 2021 Restricted Share Incentive Scheme(Draft Revised) of Gongniu Group Co., Ltd., 28 incentive targets including Zhang Hong and Wang Na had lost the incentive qualification of the Incentive Schemedue to their departure from the Company, and the Company completed the repurchase and cancellation of 32,780 restricted shares held by them which had beengranted but not lifted from restricted sales on 24 December 2021. Upon completion of the cancellation, the total number of shares of the Company was changed
from 601,213,300 to 601,180,520 shares. For details, please refer to the Announcement of Gongniu Group on the Repurchase and Cancellation of Some RestrictedIncentive Shares (Announcement No.: 2021-110) disclosed by the Company on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 22 December2021.
3. Impact of share changes on financial indicators such as earnings per share and net asset value per share for the most recent year and the most recentperiod (if any)
√ Applicable □ Not applicable
During the Reporting Period, the Company’s share capital changed from 600,613,800 shares to 601,180,500 shares due to the grant of restricted shares. If theimpact of this change is not taken into account, based on the share capital of 600,613,800 shares before the change, the basic earnings per share and net asset valueper share for 2021 would be RMB4.63 per share and RMB17.90 per share, respectively; based on the total share capital of 601,180,500 shares at the end of the year,the basic earnings per share and net asset value per share for 2021 would be RMB4.63 per share and RMB17.88 per share, respectively.
4. Other information necessary to be disclosed or required to be disclosed
□ Applicable √ Not applicable
(II) Change of restricted shares
√ Applicable □ Not applicable
Unit: Share
| Name of shareholder | Opening restricted shares | Number of shares lifted from restrictions during the year | Number of new restricted shares during the year | Closing restricted shares | Reasons for restricted sales | Date of lifting restrictions |
| Zhuhai Hillhouse Daoying Investment Partnership (Limited Partnership) | 12,067,042 | 12,067,042 | 0 | 0 | IPO | 8 February 2021 |
| Shenzhen Xiaozhou Investment Co., Ltd. | 1,508,385 | 1,508,385 | 0 | 0 | IPO | 8 February 2021 |
| Cixi Bowei Investment Partnership (Limited Partnership) [Note 1] | 1,357,544 | 1,357,544 | 0 | 0 | IPO | 8 February 2021 |
| Sun Rongfei | 452,523 | 452,523 | 0 | 0 | IPO | 8 February 2021 |
| Incentive targets of the 2020 Share Incentive Scheme | 613,800 | 317,200 [Note 2] | 0 | 296,600 | Restricted shares granted | 9 July 2021 6 July 2022 |
| to share incentive recipients during the lock-up period | 6 July 2023 | |||||
| Incentive targets of the 2021 Share Incentive Scheme | 0 | 0 | 668,400 | 668,400 | Restricted shares granted to share incentive recipients during the lock-up period | 15 July 2022 15 July 2023 15 July 2024 |
| Total | 15,999,294 | 15,702,694 | 668,400 | 965,000 | / | / |
Note 1: Cixi Bowei Investment Partnership (Limited Partnership) was subsequently renamed as Anji Bowei Enterprise Management Partnership (LimitedPartnership)Note 2: Of which, the number of restricted shares lifted from restriction and traded in the market was 215,520 shares and the number of restricted shares repurchasedand canceled by the Company was 101,680 shares.II Issuance and Listing of Securities(I) Securities issued during the Reporting Period
√ Applicable □ Not applicable
Unit: Share Currency: RMB
| Class of stock and its derivative securities | Issue date | Issue price (or interest rate) | Number of shares issued | Listing date | Number of shares allowed for public trading | Final trading date |
| Ordinary share | ||||||
| Restricted share (A-stock) | 15 July 2021 | RMB88.15 per share | 668,400 | 15 July 2021 | 668,400 | - |
Description of securities issued during the Reporting Period (for bonds with different interest rates over the lifetime, please specify separately):
√ Applicable □ Not applicable
The registration date of the Company's 2021 Restricted Share Incentive Scheme is 15 July 2021, with a total of 668,400 restricted shares granted to 523incentive targets, and the unlocking dates are 12 months, 24 months and 36 months respectively from the date of completion of registration of the grant, and theproportion of unlocked shares for each period is 40%, 30% and 30%.
(II) Changes in Total Shares and Shareholder Structure, as well as in Asset and Liability Structures
√ Applicable □ Not applicable
For changes in the shareholder structure, see “(I) Share changes” under “I Share Changes” of “Part VII Share in Ordinary Shares and Information aboutShareholders”.For changes in asset and liabilities structures, see “(III) Analysis of assets and liabilities” under “V Business Overview for the Reporting Period” of “Part IIIManagement Discussion and Analysis”.(III) Existing staff-held shares
□ Applicable √ Not applicable
III Shareholders and Actual Controller(I) Total number of shareholders
| Number of ordinary shareholders at the period-end | 29,644 |
| Number of ordinary shareholders at the month-end prior to the disclosure of this Report | 29,678 |
| Number of preference shareholders with resumed voting rights at the period-end | 0 |
| Number of preference shareholders with resumed voting rights at the month-end prior to the disclosure of this Report | 0 |
(II) Top 10 shareholders and public shareholders (or unrestricted shareholders) at the period-end
Unit: share
| Top 10 shareholders | |||||||
| Full name of shareholder | Shareholding increase/decrease in the Reporting Period | Closing shareholding | Shareholding percentage (%) | Restricted shares held | Shares in pledge, marked or frozen | Nature of shareholder | |
| Status | Shares | ||||||
| Ningbo Liangji Industrial Co., Ltd. | 0 | 324,000,000 | 53.89 | 324,000,000 | N/A | 0 | Domestic non-state-owned corporation |
| Ruan Xueping | 0 | 96,864,199 | 16.11 | 96,864,199 | N/A | 0 | Domestic individual |
| Ruan Liping | 0 | 96,864,199 | 16.11 | 96,864,199 | N/A | 0 | Domestic individual |
| Hong Kong Securities Clearing Company Limited | 13,777,768 | 14,042,552 | 2.34 | 0 | N/A | 0 | Unknown |
| Ningbo Ninghui Investment Management Partnership (Limited Partnership) | 0 | 4,072,954 | 0.68 | 4,072,954 | N/A | 0 | Other |
| China Merchants Bank Co., Ltd.－Xingquan Herun Mixed Securities Investment Fund | 3,470,675 | 3,470,675 | 0.58 | 0 | N/A | 0 | Unknown |
| Zhuhai Hillhouse Daoying Investment Partnership (Limited Partnership) | 8,780,677 | 3,286,365 | 0.55 | 0 | N/A | 0 | Other | |
| China Merchants Bank Co., Ltd.－Xingquan Heyi Dynamic Asset Allocation Mixed Securities Investment Fund (LOF) | 2,600,615 | 2,600,615 | 0.43 | 0 | N/A | 0 | Unknown | |
| Schroder Investment Management (Hong Kong) Limited－Schroder International Selection Fund -Emerging Asia (ETF) | 0 | 2,465,095 | 0.41 | 0 | N/A | 0 | Unknown | |
| Industrial Bank Co., Ltd.－Xingquan New View Dynamic Asset Allocation Regularly Open-ended Mixed Initiated Securities Investment Fund | 1,868,375 | 1,868,375 | 0.31 | 0 | N/A | 0 | Unknown | |
| Top 10 unrestricted shareholders | ||||||||
| Name of shareholder | Unrestricted public shares held | Type and number of shares | ||||||
| Class | Shares | |||||||
| Hong Kong Securities Clearing Company Limited | 14,042,552 | RMB-denominated ordinary stock | 14,042,552 |
| China Merchants Bank Co., Ltd.－Xingquan Herun Mixed Securities Investment Fund | 3,470,675 | RMB-denominated ordinary stock | 3,470,675 |
| Zhuhai Hillhouse Daoying Investment Partnership (Limited Partnership) | 3,286,365 | RMB-denominated ordinary stock | 3,286,365 |
| China Merchants Bank Co., Ltd.－Xingquan Heyi Dynamic Asset Allocation Mixed Securities Investment Fund (LOF) | 2,600,615 | RMB-denominated ordinary stock | 2,600,615 |
| Schroder Investment Management (Hong Kong) Limited－Schroder International Selection Fund -Emerging Asia (ETF) | 2,465,095 | RMB-denominated ordinary stock | 2,465,095 |
| Industrial Bank Co., Ltd.－Xingquan New View Dynamic Asset Allocation Regularly Open-ended Mixed Initiated Securities Investment Fund | 1,868,375 | RMB-denominated ordinary stock | 1,868,375 |
| China Everbright Bank Company Limited Co., Ltd.－Xingquan Business Model Selected Mixed Securities Investment Fund (LOF) | 1,514,643 | RMB-denominated ordinary stock | 1,514,643 |
| Schroder Investment Management (Hong Kong) Limited－Schroder International Selection Fund -Greater China (ETF) | 1,076,041 | RMB-denominated ordinary stock | 1,076,041 |
| Basic Endowment Insurance Fund—Portfolio 807 | 935,151 | RMB-denominated ordinary stock | 935,151 |
| Schroder Investment Management (Hong Kong) Limited－Schroder International Selection Fund -China A (ETF) | 892,520 | RMB-denominated ordinary stock | 892,520 |
| Share repurchase account among the top 10 shareholders | Not applicable | ||
| Shareholders above entrusting/entrusted with or waiving voting rights | Not applicable | ||
| Related or acting-in-concert parties among shareholders above | Ruan Liping and Ruan Xueping are brothers and acting-in-concert parties. They jointly control Ningbo Liangji Industrial Co., Ltd., the Company’s controlling shareholder. Ningbo Meishan Bonded Port Area Shuo Jin Investment Management Co., Ltd., under the joint control of Ruan Liping and Ruan Xueping, is an executive partner of Ningbo Ninghui Investment Management Partnership (Limited Partnership), one of the Company’s shareholders. Save as disclosed above, the Company is not aware of any other related parties or acting-in-concert parties as defined in the Administration Methods for Acquisition of Listed Companies among the shareholders above. |
| Preference shareholders with resumed voting rights and their shareholdings | Not applicable |
Shareholdings of the top 10 restricted shareholders and the restrictions:
√ Applicable □ Not applicable
Unit: share
| No. | Name of restricted shareholder | Restricted shares held | Restricted shares allowed for public trading | Restriction | |
| Date when public trading is allowed | Increase in restricted shares allowed for public trading | ||||
| 1 | Ningbo Liangji Industrial Co., Ltd. | 324,000,000 | 2023-02-06 | 0 | Non-tradable for 36 months from the IPO |
| 2 | Ruan Xueping | 96,864,199 | 2023-02-06 | 0 | Non-tradable for 36 months from the IPO |
| 3 | Ruan Liping | 96,864,199 | 2023-02-06 | 0 | Non-tradable for 36 months from the IPO |
| 4 | Ningbo Ninghui Investment Management Partnership (Limited Partnership) | 4,072,954 | 2023-02-06 | 0 | Non-tradable for 36 months from the IPO |
| 5 | Ningbo Suiyuan Investment Management Partnership (Limited Partnership) | 1,787,442 | 2023-02-06 | 0 | Non-tradable for 36 months from the IPO |
| 6 | Ningbo Qiyuanbao Investment Management Partnership (Limited Partnership) | 1,025,712 | 2023-02-06 | 0 | Non-tradable for 36 months from the IPO |
| 7 | Xie Weiwei | 21,900 | 2021-07-09 | 5,000 | Restricted shares granted as equity incentives in 2020 and 2021, non-tradable for 12 months, 24 months or 36 months from the date when ownership of the shares is registered under the awardee |
| 2022-07-06 | 0 | ||||
| 2023-07-06 | 0 | ||||
| 2022-07-15 | 0 | ||||
| 2023-07-15 | 0 | ||||
| 2024-07-15 | 0 | ||||
| 8 | Cai Yingfeng | 20,300 | 2021-07-09 | 5,000 | Restricted shares granted as equity incentives in 2020 and 2021, non-tradable for 12 months, 24 months or 36 months from the date when ownership of the shares is registered under the awardee |
| 2022-07-06 | 0 | ||||
| 2023-07-06 | 0 | ||||
| 2022-07-15 | 0 | ||||
| 2023-07-15 | 0 | ||||
| 2024-07-15 | 0 | ||||
| 9 | Li Guoqiang | 18,880 | 2021-07-09 | 5,520 | Restricted shares granted as equity incentives in 2020 and 2021, non-tradable for 12 months, 24 months or 36 months from the date when ownership of the shares is registered under the awardee |
| 2022-07-06 | 0 | ||||
| 2023-07-06 | 0 | ||||
| 2022-07-15 | 0 | ||||
| 2023-07-15 | 0 | ||||
| 10 | Wang Qingwang | 12,640 | 2021-07-09 | 3,960 | Restricted shares granted as equity incentives in 2020 and 2021, non-tradable for 12 months, 24 months or 36 months from the date when ownership of the shares is registered under the awardee |
| 2022-07-06 | 0 | ||||
| 2023-07-06 | 0 | ||||
| 2022-07-15 | 0 | ||||
| 2023-07-15 | 0 | ||||
| Related or acting-in-concert parties among shareholders above | Ruan Liping and Ruan Xueping are brothers and acting-in-concert parties. They jointly control Ningbo Liangji Industrial Co., Ltd., the Company’s controlling shareholder. Ningbo Meishan Bonded Port Area Shuo Jin Investment Management Co., Ltd., under the joint control of Ruan Liping and Ruan Xueping, is an executive partner of Ningbo Ninghui Investment Management Partnership (Limited Partnership) and Ningbo Suiyuan Investment Management Partnership (Limited Partnership), both shareholders of the Company. Save as disclosed above, the Company is not aware of any other related parties or acting-in-concert parties as defined in the Administration Methods for Acquisition of Listed Companies among the shareholders above. The Company’s shareholder Ningbo Qiyuanbao Investment Management Partnership (Limited Partnership) is under the control of Ruan Shuhong and Zhu Funing, both near relatives of Ruan Liping. Cai Yingfeng, a director of the Company, is a limited partner of the Company’s shareholder Ningbo Suiyuan Investment Management Partnership (Limited Partnership). Li Guoqiang, a senior executive of the Company, is a limited partner of the Company’s shareholder Ningbo Suiyuan Investment Management Partnership (Limited Partnership). Wang Qingwang is a limited partner of the Company’s shareholder Ningbo Suiyuan Investment Management Partnership (Limited Partnership). Save as disclosed above, the Company is not aware of any other related parties or acting-in-concert parties as defined in the Administration Methods for Acquisition of Listed Companies among the shareholders above. | ||||
(III) Indicate whether any strategic investor or general corporation has become a top-10shareholder in a rights issue.
□ Applicable √ Not applicable
IV Controlling Shareholder and Actual Controller(I) Controlling shareholder
1. Corporation
√ Applicable □ Not applicable
| Name | Ningbo Liangji Industrial Co., Ltd. |
| Legal representative/company principal | Ruan Liping |
| Date of establishment | 23 November 2011 |
| Principal activities | Investment management |
| Interests held in other domestically and overseas listed companies in the Reporting Period | Not applicable |
| Other information | Not applicable |
2. Individual
□ Applicable √ Not applicable
3. Special statement regarding the fact that the Company does not have a controlling shareholder
□ Applicable √ Not applicable
4. Change of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
5. Illustration of the controlling shareholder’s ownership in the Company
√ Applicable □ Not applicable
(II) Actual controller
1. Corporation
□ Applicable √ Not applicable
2. Individual
√ Applicable □ Not applicable
| Name | Ruan Liping |
| Nationality | Chinese |
| Residency in other countries or regions (yes/no) | Yes |
| Main occupations and positions | Chairman of the Board and President of Gongniu Group Co., Ltd. |
| Controlling interests in other domestically and overseas listed companies in the past 10 years | Not applicable |
| Name | Ruan Xueping |
| Nationality | Chinese |
| Residency in other countries or regions (yes/no) | Yes |
Ningbo Liangji Industrial Co., Ltd.
Ningbo Liangji Industrial Co., Ltd.Gongniu Group Co., Ltd.
Gongniu Group Co., Ltd.
53.89%
| Main occupations and positions | Vice Chairman of the Board of Gongniu Group Co., Ltd. and General Manager of Shanghai Gongniu Electrics Co., Ltd. |
| Controlling interests in other domestically and overseas listed companies in the past 10 years | Not applicable |
3. Special statement regarding the fact that the Company does not have an actual controller.
□ Applicable √ Not applicable
4. Change of the actual controller in the Reporting Period
□ Applicable √ Not applicable
5. Illustration of the actual controller’s ownership in the Company
√ Applicable □ Not applicable
6. Indicate whether the actual controller controls the Company via trust or other ways of assetmanagement.
□ Applicable √ Not applicable
(III) Other information about the controlling shareholder and the actual controller
□ Applicable √ Not applicable
V Indicate whether the cumulative number of shares put in pledge by the Company’s controllingshareholder or the largest shareholder and its acting-in-concert parties accounts for over 80% oftheir shareholdings in the Company.
□ Applicable √ Not applicable
VI Other 10% or Greater Corporate Shareholders
□ Applicable √ Not applicable
VII Restrictions on Shareholding Reduction
□ Applicable √ Not applicable
VIII Share Repurchases during the Reporting Period
□ Applicable √ Not applicable
Part VIII Relevant Information of Preference shares
□ Applicable √ Not applicable
Ningbo Meishan Bonded Port Area ShuoJin Investment Management Co., Ltd.
Ruan Liping
| Ruan Liping | Ruan Xueping |
Ningbo Liangji Industrial Co., Ltd.
Ningbo Liangji Industrial Co., Ltd.
Gongniu Group Co., Ltd.
Part IX Relevant Information of Corporate BondsI Enterprise Bonds, Corporate Bonds and Debt Financing Instruments of Non-financialEnterprise
□ Applicable √ Not applicable
II Convertible Corporate Bonds
□ Applicable √ Not applicable
Part X Financial Statements
I Independent Auditor’s Report
√ Applicable □ Not applicable
Independent Auditor’s Report
PCCPA Audit〔2022〕No. 2228To the shareholders of Gongniu Group Co., Ltd.:
I OpinionWe have audited the financial statements of Gongniu Group Co., Ltd. (“Gongniu” or the“Company”), which comprise the consolidated and parent company (the Company as the parentexclusive of subsidiaries) balance sheets as at 31 December 2021, the consolidated and parent companystatements of income, cash flows and changes in owners’ equity for the year then ended, as well as thenotes to the financial statements.In our opinion, the financial statements referred to above present fairly, in all material respects, theconsolidated and parent company financial position of the Company at 31 December 2021, and theconsolidated and parent company operating results and cash flows for the year then ended, in conformitywith the Chinese Accounting Standards (CAS).
II Basis for OpinionWe conducted our audits in accordance with the Audit Standards for Chinese RegisteredAccountants. Our responsibilities under those standards are further described in the Auditor’sResponsibilities for Audit of Financial Statements section of our report. We are independent of theCompany in accordance with the China Code of Ethics for Certified Public Accountants, and we havefulfilled our other ethical responsibilities in accordance with the said Code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.III Key Audit MattersKey audit matters are matters that, based on our professional judgment, are deemed most importantto the audit of the financial statements of the current period. These matters were addressed in the contextof our audit of the financial statements as a whole, and in forming our opinion thereon, and we do notprovide a separate opinion on these matters.(I) Revenue recognition
1. Description
For relevant information disclosed, please refer to "38. Revenue" in "V Significant AccountingPolicies and Accounting Estimates" and "61. Operating revenue and cost of sales" in "VII Notes to theConsolidated Financial Statements" of "Part X Financial Statements".The revenue of Gongniu Group is mainly derived from the sale of adaptors, wall switches, LEDsand digital accessories. In 2021, Gongniu Group achieved operating revenue of RMB12.385 billion.Gongniu Group has identified different specific methods of revenue recognition for different salesmethods.As operating revenue is one of the key performance indicators of Gongniu Group, we haveidentified revenue recognition as a key audit matter.
2. Audit response
The audit procedures we performed in relation to revenue recognition primarily include:
1. Understanding the key internal controls relating to revenue recognition, evaluating the design ofthose controls, determining whether they are implemented and testing the effectiveness of the operationof the relevant internal controls;
2. Examining major sales contracts for major contractual terms and evaluating whether the revenuerecognition policy is in line with the provisions of the Accounting Standard for Business Enterprises;
3. Implementing substantive analysis procedures for operating revenue and gross margin on amonthly, product and customer basis to identify any significant or abnormal fluctuations and analyze thecauses of fluctuations;
4. For domestic sales revenue, conducting sample-check on supporting documents related torevenue recognition, including sales contracts, orders, sales invoices, outbound delivery orders, deliverynotes, transportation orders and customer sign-off sheets; for export revenue, obtaining electronic portinformation and reconciling it with the carrying records, and checking supporting documents such assales contracts, export customs declarations, freight bills of lading and sales invoices on a sample basis;
5. Confirming with key customers on a sample basis regarding sales for the period based on theaccounts receivable letter;
6. Verifying operating revenue recognized around the balance sheet date on a sample basis tosupporting documents such as outbound delivery orders, delivery notes, customer sign-off sheets andfreight bills of lading, and evaluating whether operating revenue is recognized in the appropriate period;
7. Checking whether the information relating to operating revenue is properly presented in thefinancial statements.
(II) Recognition, measurement and presentation of wealth management products
1. Description
For relevant information disclosed, please refer to "10. Financial instruments" in "V SignificantAccounting Policies and Accounting Estimates" and "2. "Held-for-trading financial assets", "13. Othercurrent assets" and "68. Return on investment" in "VII Notes to the Consolidated Financial Statements"of "Part X Financial Statements".
As at 31 December 2021, the wealth management balance of held-for-trading financial assets ofGongniu Group was RMB5,927 million, the wealth management balance of other current assets wasRMB1,115 million, and the cumulative return on investment for wealth management products in 2021amounted to RMB172 million. We determined the recognition, measurement and presentation of wealthmanagement products as a key audit matter due to the large amount of wealth management products andthe fact that the return on investment of the relevant products is an important item in the net profit ofGongniu Group for 2021.
2. Audit response
The audit procedures we performed in relation to the recognition, measurement and presentation ofwealth management products primarily include:
(1) Understanding the key internal controls relating to investments in wealth management products,evaluating the design of those controls, determining whether they are implemented and testing theeffectiveness of the operation of the relevant internal controls;
(2) Checking whether the classification of wealth management products is correct based on thecontractual cash flow characteristics of the wealth management products and the business model ofGongniu Group in managing the wealth management products;
(3) Obtaining statements of account related to wealth management products, reconciling them withthe carrying amount and writing to banks, securities companies and trust companies to confirm the assetbalance and the existence of balances of wealth management products;
(4) Checking the supporting documents for increase and reduction in wealth management productsduring the period on a sample basis, checking whether they have been authorized and approved, andconfirming that the amounts relating to the purchase, sale and return on investment of wealthmanagement products are correct and fully recorded;
(5) Reviewing the valuation method of wealth management products to check whether the basis forobtaining their fair value, the measurement of their value at the end of the period and the accountingtreatment are correct;
(6) Checking whether information related to the recognition, measurement and presentation ofwealth management products has been properly presented in the financial statements.
IV Other Information
The Company’s management is responsible for the other information. The other informationcomprises all of the information included in the Company’s 2021 Annual Report other than the financialstatements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not expressany form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact. We have nothing to report in this regard.V Responsibilities of Management and Those Charged with Governance for FinancialStatements
The Company’s management is responsible for the preparation of the financial statements that givea fair view in accordance with CAS, and for designing, implementing and maintaining such internalcontrol as the management determines is necessary to enable the preparation of financial statements thatare free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’sability to continue as a going concern, disclosing, as applicable, matters related to going concern (ifapplicable) and using the going concern basis of accounting unless the management either intends toliquidate the Company or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reportingprocess.
VI Auditor’s Responsibilities for Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an auditor’s report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with CAS will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with CAS, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error, as fraud may involvecollusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the management.
(IV) Conclude on the appropriateness of the management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists related toevents or conditions that may cast significant doubt on the Company’s ability to continue as a goingconcern. If we conclude that a material uncertainty exists, we are required by CAS to draw users’attention in our auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor’s report. However, future events or conditions may cause theCompany to cease to continue as a going concern.(V) Evaluate the overall presentation, structure and content of the financial statements, and whetherthe financial statements represent the underlying transactions and events in a manner that achieves fairpresentation.(VI) Obtain sufficient appropriate audit evidence regarding the financial information of the entitiesor business activities within the Company to express an opinion on the financial statements. We areresponsible for the direction, supervision and performance of the Company audit. We remain solelyresponsible for our audit opinion.We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any noteworthy deficiencies ininternal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied withrelevant ethical requirements regarding independence, and communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and where applicable, relatedsafeguards.From the matters communicated with those charged with governance, we determine those mattersthat were of most significance in the audit of the financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor’s report unless law orregulation 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 ofdoing so would reasonably be expected to outweigh the public interest benefits of such communication.
Pan-China Certified Public Accountants LLP Chinese certified public accountant: Qian Zhongxian(engagement partner)
Hangzhou·China Chinese certified public accountant: Chen Hui
11 April 2022
II Financial Statements
Consolidated Balance Sheet
31 December 2021Prepared by Gongniu Group Co., Ltd.
Unit: RMB
| Item | Note | 31 December 2021 | 31 December 2020 |
| Current assets： | |||
| Monetary assets | 4,377,228,556.74 | 3,752,857,861.42 | |
| Settlement reserve | |||
| Loans to other banks and financial institutions | |||
| Held-for-trading financial assets | 5,926,600,000.00 | 2,863,300,000.00 | |
| Derivative financial assets | 3,613,050.00 | 27,159,170.00 | |
| Notes receivable | 750,723.35 | ||
| Accounts receivable | 219,259,743.25 | 183,928,613.94 | |
| Receivables financing | 927,023.00 | 161,562.83 | |
| Prepayments | 29,140,223.00 | 34,711,617.31 | |
| Premiums receivable | |||
| Reinsurance receivables | |||
| Receivable reinsurance contract reserve | |||
| Other receivables | 195,924,505.99 | 126,043,394.07 | |
| Of which: Interest receivable | |||
| Dividends receivable | |||
| Financial assets purchased under resale agreements | |||
| Inventories | 1,376,987,122.60 | 788,240,060.31 | |
| Contract assets | |||
| Assets held for sale | |||
| Current portion of non-current assets | |||
| Other current assets | 1,126,520,898.44 | 2,741,389,939.38 | |
| Total current assets | 13,256,951,846.37 | 10,517,792,219.26 | |
| Non-current assets： | |||
| Loans and advances to customers | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | |||
| Other equity investments | |||
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 1,493,733,120.82 | 1,181,783,418.51 | |
| Construction in progress | 198,364,136.97 | 278,130,656.14 | |
| Productive living assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 18,809,799.71 | ||
| Intangible assets | 295,769,642.48 | 299,981,403.19 | |
| Development costs | |||
| Goodwill | |||
| Long-term prepaid expense | 17,750,835.99 | 3,150,000.00 | |
| Deferred income tax assets | 116,456,369.78 | 66,903,177.28 | |
| Other non-current assets | 76,068,914.50 | 89,800,700.00 | |
| Total non-current assets | 2,216,952,820.25 | 1,919,749,355.12 | |
| Total assets | 15,473,904,666.62 | 12,437,541,574.38 | |
| Current liabilities： | |||
| Short-term borrowings | 500,430,555.55 | 500,344,611.11 | |
| Borrowings from the central bank | |||
| Loans from other banks and financial institutions | |||
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 2,333,774.75 | ||
| Accounts payable | 1,701,686,564.14 | 1,285,822,466.71 | |
| Advances from customers | |||
| Contract liabilities | 437,999,921.93 | 333,741,780.65 | |
| Financial assets sold under repurchase agreements | |||
| Customer deposits and deposits from other banks and financial institutions | |||
| Payables for acting trading of securities | |||
| Payables for underwriting of securities | |||
| Employee benefits payable | 279,463,472.43 | 244,138,167.00 | |
| Taxes and levies payable | 533,077,969.51 | 437,873,048.07 | |
| Other payables | 430,813,760.10 | 219,091,086.62 | |
| Of which: Interest payable | |||
| Dividends payable | |||
| Fees and commissions payable | |||
| Reinsurance payables | |||
| Liabilities directly associated with assets held for sale | |||
| Current portion of non-current liabilities | 673,911,937.53 | ||
| Other current liabilities | 56,939,989.86 | 43,285,234.93 | |
| Total current liabilities | 4,616,657,945.80 | 3,064,296,395.09 | |
| Non-current liabilities： | |||
| Insurance contract reserve | |||
| Long-term borrowings | 160,037,333.33 | ||
| Bonds payable | |||
| Of which: Preference shares | |||
| Perpetual bonds | |||
| Lease liabilities | 5,089,837.39 | ||
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions | |||
| Deferred income | |||
| Deferred income tax liabilities | 50,280,119.30 | 47,778,120.47 | |
| Other non-current liabilities | 46,125,187.50 | 28,037,156.40 | |
| Total non-current liabilities | 101,495,144.19 | 235,852,610.20 | |
| Total liabilities | 4,718,153,089.99 | 3,300,149,005.29 | |
| Owners’ equity (or shareholders’ equity)： | |||
| Paid-in capital (or share capital) | 601,180,520.00 | 600,613,800.00 | |
| Other equity instruments | |||
| Of which: Preference shares | |||
| Perpetual bonds | |||
| Capital reserves | 3,914,068,288.56 | 3,820,175,608.14 | |
| Less: Treasury shares | 80,711,540.00 | 46,728,594.00 | |
| Other comprehensive income | 7,537,390.37 | 28,863,769.91 | |
| Specific reserve | |||
| Surplus reserves | 302,797,998.73 | 302,797,998.73 | |
| General reserve | |||
| Retained earnings | 6,010,878,918.97 | 4,431,669,986.31 | |
| Total equity attributable to owners (or shareholders) of the Company as the parent | 10,755,751,576.63 | 9,137,392,569.09 | |
| Non-controlling interests | |||
| Total owners’ equity (or shareholders’ equity) | 10,755,751,576.63 | 9,137,392,569.09 | |
| Total liabilities and owners’ equity (or shareholders’ equity) | 15,473,904,666.62 | 12,437,541,574.38 | |
Legal representative: Ruan Liping Chief Financial Officer: Zhang LinaHead of the financial department: Luo Yuebo
Balance Sheet of the Company as the Parent
31 December 2021Prepared by Gongniu Group Co., Ltd.
Unit: RMB
| Item | Note | 31 December 2021 | 31 December 2020 |
| Current assets： | |||
| Monetary assets | 2,815,595,132.13 | 2,252,978,143.19 | |
| Held-for-trading financial assets | 1,700,000,000.00 | 1,130,000,000.00 | |
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | 3,783,723.14 | 12,752,174.13 | |
| Receivables financing | |||
| Prepayments | 302,683,310.52 | 24,746,283.47 | |
| Other receivables | 3,038,980,082.79 | 1,686,576,004.18 | |
| Of which: Interest receivable | |||
| Dividends receivable | 2,000,000,000.00 | 1,000,000,000.00 | |
| Inventories | 409,900,890.43 | 210,415,165.34 | |
| Contract assets | |||
| Assets held for sale | |||
| Current portion of non-current assets | |||
| Other current assets | 610,271,780.82 | 1,406,276,164.38 | |
| Total current assets | 8,881,214,919.83 | 6,723,743,934.69 | |
| Non-current assets： | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | 441,959,500.17 | 405,057,095.11 | |
| Other equity investments | |||
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 805,605,614.22 | 444,710,486.62 | |
| Construction in progress | 171,842,155.89 | 272,695,407.86 | |
| Productive living assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 7,057,187.09 | ||
| Intangible assets | 258,323,362.23 | 260,448,329.50 | |
| Development costs | |||
| Goodwill | |||
| Long-term prepaid expense | 17,750,835.99 | 3,150,000.00 | |
| Deferred income tax assets | 3,735,033.97 | 1,628,056.37 | |
| Other non-current assets | 72,827,494.50 | 68,746,505.00 | |
| Total non-current assets | 1,779,101,184.06 | 1,456,435,880.46 | |
| Total assets | 10,660,316,103.89 | 8,180,179,815.15 | |
| Current liabilities： | |||
| Short-term borrowings | 500,344,611.11 | ||
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 100,000,000.00 | ||
| Accounts payable | 450,634,960.80 | 350,846,830.56 | |
| Advances from customers | |||
| Contract liabilities | 424,645,030.61 | 10,061,976.43 | |
| Employee benefits payable | 101,482,634.41 | 94,117,188.55 | |
| Taxes and levies payable | 205,109,507.99 | 97,437,178.10 | |
| Other payables | 126,829,316.67 | 136,920,122.46 | |
| Of which: Interest payable | |||
| Dividends payable | |||
| Liabilities directly associated with assets held for sale | |||
| Current portion of non-current liabilities | 666,081,836.66 | ||
| Other current liabilities | 55,203,853.98 | 1,308,056.94 | |
| Total current liabilities | 2,129,987,141.12 | 1,191,035,964.15 | |
| Non-current liabilities： | |||
| Long-term borrowings | 160,037,333.33 | ||
| Bonds payable | |||
| Of which: Preference shares | |||
| Perpetual bonds | |||
| Lease liabilities | 2,163,270.25 | ||
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions | |||
| Deferred income | |||
| Deferred income tax liabilities | 22,249,738.30 | 16,296,016.31 | |
| Other non-current liabilities | 46,125,187.50 | 28,037,156.40 | |
| Total non-current liabilities | 70,538,196.05 | 204,370,506.04 | |
| Total liabilities | 2,200,525,337.17 | 1,395,406,470.19 | |
| Owners’ equity (or shareholders’ equity)： | |||
| Paid-in capital (or share capital) | 601,180,520.00 | 600,613,800.00 | |
| Other equity instruments | |||
| Of which: Preference shares | |||
| Perpetual bonds | |||
| Capital reserves | 3,909,568,864.90 | 3,815,676,184.48 | |
| Less: Treasury shares | 80,711,540.00 | 46,728,594.00 | |
| Other comprehensive income | |||
| Specific reserve | |||
| Surplus reserves | 302,797,998.73 | 302,797,998.73 | |
| Retained earnings | 3,726,954,923.09 | 2,112,413,955.75 | |
| Total owners’ equity (or shareholders’ equity) | 8,459,790,766.72 | 6,784,773,344.96 | |
| Total liabilities and owners’ equity (or shareholders’ equity) | 10,660,316,103.89 | 8,180,179,815.15 | |
Legal representative: Ruan Liping Chief Financial Officer: Zhang LinaHead of the financial department: Luo Yuebo
Consolidated Income StatementJanuary-December 2021
Unit: RMB
| Item | Note | 2021 | 2020 |
| I Total revenues | 12,384,916,337.51 | 10,051,128,834.05 | |
| Of which: Operating revenue | 12,384,916,337.51 | 10,051,128,834.05 | |
| Interest income | |||
| Insurance premium income | |||
| Fee and commission income | |||
| II Total costs and expenses | 9,262,301,258.59 | 7,412,932,169.72 | |
| Of which: Cost of sales | 7,808,540,666.84 | 6,018,606,539.57 | |
| Interest expense | |||
| Fee and commission expense | |||
| Surrenders | |||
| Net insurance claims paid | |||
| Net amount provided as insurance contract reserve | |||
| Expenditure on policy dividends |
| Reinsurance premium expense | |||
| Taxes and levies | 82,785,296.48 | 80,328,346.74 | |
| Selling expense | 560,187,002.80 | 517,846,532.13 | |
| Administrative expense | 427,615,556.97 | 430,706,547.54 | |
| R&D expense | 471,015,016.82 | 401,181,690.28 | |
| Finance costs | -87,842,281.32 | -35,737,486.54 | |
| Of which: Interest expense | 39,763,491.76 | 9,718,888.89 | |
| Interest income | 128,887,165.64 | 49,748,785.37 | |
| Add: Other income | 390,936,141.47 | 127,179,310.75 | |
| Return on investment (“－” for loss) | 190,025,308.81 | 52,002,600.70 | |
| Of which: Share of profit or loss of joint ventures and associates | |||
| Income from the derecognition of financial assets at amortized cost | |||
| Exchange gain (“－” for loss) | |||
| Net gain on exposure hedges (“－” for loss) | |||
| Gain on changes in fair value (“－” for loss) | |||
| Credit impairment loss (“－” for loss) | -24,746,561.94 | -7,435,665.10 | |
| Asset impairment loss (“－” for loss) | -16,257,123.26 | -6,675,595.59 | |
| Asset disposal income (“－” for loss) | -11,308,464.89 | -669,979.13 | |
| III Operating profit (“－” for loss) | 3,651,264,379.11 | 2,802,597,335.96 | |
| Add: Non-operating income | 4,353,269.76 | 2,982,456.22 | |
| Less: Non-operating expense | 330,657,723.91 | 50,914,854.15 | |
| IV Gross profit (“－” for gross loss) | 3,324,959,924.96 | 2,754,664,938.03 | |
| Less: Income tax expense | 544,599,192.30 | 441,234,863.89 | |
| V Net profit (“－” for net loss) | 2,780,360,732.66 | 2,313,430,074.14 | |
| (I) By operating continuity | |||
| 1.Net profit from continuing operations (“－” for net loss) | 2,780,360,732.66 | 2,313,430,074.14 | |
| 2.Net profit from discontinued operations (“－” for net loss) | |||
| (II) By ownership | |||
| 1.Net profit attributable to owners of the Company as the parent (“－” for net loss) | 2,780,360,732.66 | 2,313,430,074.14 | |
| 2.Net profit attributable to non-controlling interests (“－” for net loss) | |||
| VI Other comprehensive income, net of tax | -21,326,379.54 | 28,853,958.05 | |
| (I) Other comprehensive income, net of tax attributable to owners of the Company as the parent | -21,326,379.54 | 28,853,958.05 | |
| 1．Other comprehensive income that will not be reclassified to profit or loss | |||
| （1）Changes caused by remeasurements on defined benefit schemes | |||
| （2）Other comprehensive income that will not be reclassified to profit or loss under the equity method | |||
| （3）Changes in the fair value of other equity investments | |||
| （4）Changes in the fair value arising from changes in own credit risk | |||
| 2．Other comprehensive income that will be reclassified to profit or loss | -21,326,379.54 | 28,853,958.05 | |
| （1）Other comprehensive income that will be reclassified to profit or loss under the equity method | |||
| （2）Changes in the fair value of other debt investments | |||
| （3）Other comprehensive income arising from the reclassification of financial assets | |||
| （4）Credit impairment allowance for other debt investments | |||
| （5）Reserve for cash flow hedges | -21,324,986.08 | 28,871,218.29 | |
| （6）Differences arising from the translation of foreign currency-denominated financial statements | -1,393.46 | -17,260.24 | |
| （7）Others | |||
| (II) Other comprehensive income, net of tax attributable to non-controlling interests | |||
| VII Total comprehensive income | 2,759,034,353.12 | 2,342,284,032.19 | |
| (I) Total comprehensive income attributable to owners of the Company as the parent | 2,759,034,353.12 | 2,342,284,032.19 | |
| (II) Total comprehensive income attributable to non-controlling interests | |||
| VIII Earnings per share： | |||
| (I) Basic earnings per share (RMB/share) | 4.63 | 3.89 | |
| (II) Diluted earnings per share (RMB/share) | 4.63 | 3.89 | |
Where business combinations involving entities under common control occurred in the current period,the net profit achieved by the acquirees before the combinations was RMB0.00, with the amount for lastyear being RMB0.00.
Legal representative: Ruan Liping Chief Financial Officer: Zhang LinaHead of the financial department: Luo Yuebo
Income Statement of the Company as the Parent
January-December 2021
Unit: RMB
| Item | Note | 2021 | 2020 |
| I Operating revenue | 5,306,290,224.15 | 4,431,826,844.17 | |
| Less: Cost of sales | 3,876,062,056.48 | 3,200,232,443.74 | |
| Taxes and levies | 27,736,575.48 | 28,032,068.03 | |
| Selling expense | 22,442,913.93 | 41,230,202.68 | |
| Administrative expense | 237,296,868.57 | 227,914,385.78 | |
| R&D expense | 190,443,988.85 | 163,577,005.90 | |
| Finance costs | -31,504,593.32 | -16,888,303.67 | |
| Of which: Interest expense | 24,790,531.90 | 6,413,194.44 | |
| Interest income | 56,305,098.21 | 23,400,740.83 | |
| Add: Other income | 266,969,614.03 | 19,424,769.79 | |
| Return on investment (“－” for loss) | 2,079,124,417.58 | 1,048,583,434.64 | |
| Of which: Share of profit or loss of joint ventures and associates | |||
| Income from the derecognition of financial assets at amortized cost | |||
| Net gain on exposure hedges (“－” for loss) | |||
| Gain on changes in fair value (“－” for loss) | |||
| Credit impairment loss (“－” for loss) | -18,213,104.15 | -37,097,495.37 | |
| Asset impairment loss (“－” for loss) | -2,744,147.10 | -541,797.39 | |
| Asset disposal income (“－” for loss) | -3,937,217.96 | -18,183.95 | |
| II Operating profit (“－” for loss) | 3,305,011,976.56 | 1,818,079,769.43 | |
| Add: Non-operating income | 602,007.58 | 438,745.58 | |
| Less: Non-operating expense | 317,803,063.92 | 30,606,525.57 | |
| III Gross profit (“－” for gross loss) | 2,987,810,920.22 | 1,787,911,989.44 | |
| Add: Income tax expense | 172,118,152.88 | 108,900,526.54 | |
| IV Net profit (“－” for net loss) | 2,815,692,767.34 | 1,679,011,462.90 | |
| (I) Net profit from continuing operations (“－” for net loss) | 2,815,692,767.34 | 1,679,011,462.90 | |
| (II) Net profit from discontinued operations (“－” for net loss) | |||
| V Other comprehensive income, net of tax | |||
| (I) Other comprehensive income that will not be reclassified to profit or loss | |||
| 1. Changes caused by remeasurements on defined benefit schemes | |||
| 2. Other comprehensive income that will not be reclassified to profit or loss under the equity method | |||
| 3. Changes in the fair value of other equity investments |
| 4. Changes in the fair value arising from changes in own credit risk | |||
| (II) Other comprehensive income that will be reclassified to profit or loss | |||
| 1. Other comprehensive income that will be reclassified to profit or loss under the equity method | |||
| 2. Changes in the fair value of other debt investments | |||
| 3. Other comprehensive income arising from the reclassification of financial assets | |||
| 4. Credit impairment allowance for other debt investments | |||
| 5. Reserve for cash flow hedges | |||
| 6. Differences arising from the translation of foreign currency-denominated financial statements | |||
| 7. Others | |||
| VI Total comprehensive income | 2,815,692,767.34 | 1,679,011,462.90 | |
| VII Earnings per share： | |||
| (I) Basic earnings per share (RMB/share) | |||
| (II) Diluted earnings per share (RMB/share) | |||
Legal representative: Ruan Liping Chief Financial Officer: Zhang LinaHead of the financial department: Luo Yuebo
Consolidated Cash Flow Statement
January-December 2021
Unit: RMB
| Item | Note | 2021 | 2020 |
| I Cash flows from operating activities: | |||
| Proceeds from sale of goods and rendering of services | 14,169,320,101.49 | 11,511,903,915.40 | |
| Net increase in customer deposits and deposits from other banks and financial institutions | |||
| Net increase in borrowings from the central bank | |||
| Net increase in loans from other financial institutions | |||
| Premiums received on original insurance contracts | |||
| Net proceeds from reinsurance | |||
| Net increase in deposits and investments of policy holders | |||
| Interest, fees and commissions received | |||
| Net increase in loans from other banks and financial institutions | |||
| Net increase in proceeds from repurchase transactions | |||
| Net proceeds from acting trading of securities | |||
| Tax and levy rebates | 25,804,052.16 | 17,284,864.61 | |
| Cash generated from other operating activities | 525,426,517.23 | 223,463,038.80 | |
| Subtotal of cash generated from operating activities | 14,720,550,670.88 | 11,752,651,818.81 | |
| Payments for goods and services | 7,589,799,374.35 | 5,101,230,609.76 | |
| Net increase in loans and advances to customers | |||
| Net increase in deposits in the central bank and other banks and financial institutions | |||
| Payments for claims on original insurance contracts | |||
| Net increase in loans to other banks and financial institutions | |||
| Interest, fees and commissions paid | |||
| Policy dividends paid | |||
| Cash paid to and for employees | 1,741,129,477.86 | 1,555,279,980.16 | |
| Taxes and levies paid | 1,161,567,823.93 | 819,545,329.90 | |
| Cash used in other operating activities | 1,213,727,253.60 | 839,393,187.34 | |
| Subtotal of cash used in operating activities | 11,706,223,929.74 | 8,315,449,107.16 | |
| Net cash generated from/used in operating activities | 3,014,326,741.14 | 3,437,202,711.65 | |
| II Cash flows from investing activities: | |||
| Proceeds from disinvestment | 10,000,000.00 | ||
| Return on investment | 203,660,051.16 | 119,850,083.88 | |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-term assets | 22,285,265.83 | 2,287,593.12 | |
| Net proceeds from the disposal of subsidiaries and other business units | |||
| Cash generated from other investing activities | 11,281,533,253.72 | 24,819,596,262.00 | |
| Subtotal of cash generated from investing activities | 11,507,478,570.71 | 24,951,733,939.00 | |
| Payments for the acquisition and construction of fixed assets, intangible assets and other long-term assets | 475,375,845.86 | 418,935,697.14 | |
| Payments for investments | |||
| Net increase in pledged loans granted | |||
| Net payments for the acquisition of subsidiaries and other business units | |||
| Cash used in other investing activities | 12,621,090,656.00 | 28,782,390,000.00 | |
| Subtotal of cash used in investing activities | 13,096,466,501.86 | 29,201,325,697.14 | |
| Net cash generated from/used in investing activities | -1,588,987,931.15 | -4,249,591,758.14 | |
| III Cash flows from financing activities: | |||
| Capital contributions received | 58,919,460.00 | 3,567,124,820.42 | |
| Of which: Capital contributions by non-controlling interests to subsidiaries | |||
| Borrowings received | 1,229,444,657.64 | 956,694,305.55 | |
| Cash generated from other financing activities | |||
| Subtotal of cash generated from financing activities | 1,288,364,117.64 | 4,523,819,125.97 | |
| Repayment of borrowings | 733,145,768.73 | 300,000,000.00 | |
| Interest and dividends paid | 1,235,638,745.39 | 2,286,031,250.00 | |
| Of which: Dividends paid by subsidiaries to non-controlling interests | |||
| Cash used in other financing activities | 20,388,050.23 | 12,187,726.42 | |
| Subtotal of cash used in financing activities | 1,989,172,564.35 | 2,598,218,976.42 | |
| Net cash generated from/used in financing activities | -700,808,446.71 | 1,925,600,149.55 | |
| IV Effect of foreign exchange rate changes on cash and cash equivalents | -1,365,206.44 | -2,982,481.80 | |
| V Net increase in cash and cash equivalents | 723,165,156.84 | 1,110,228,621.26 | |
| Add: Cash and cash equivalents, beginning of the period | 1,829,551,296.70 | 719,322,675.44 | |
| VI Cash and cash equivalents, end of the period | 2,552,716,453.54 | 1,829,551,296.70 | |
Legal representative: Ruan Liping Chief Financial Officer: Zhang LinaHead of the financial department: Luo Yuebo
Cash Flow Statement of the Company as the Parent
January-December 2021
Unit: RMB
| Item | Note | 2021 | 2020 |
| I Cash flows from operating activities: | |||
| Proceeds from sale of goods and rendering of services | 6,475,570,410.73 | 4,792,667,952.81 | |
| Tax and levy rebates | |||
| Cash generated from other operating activities | 338,813,300.33 | 425,476,489.30 | |
| Subtotal of cash generated from operating activities | 6,814,383,711.06 | 5,218,144,442.11 | |
| Payments for goods and services | 4,252,140,785.92 | 2,983,263,301.71 | |
| Cash paid to and for employees | 622,109,797.27 | 570,574,072.87 | |
| Taxes and levies paid | 262,378,388.50 | 260,167,559.31 | |
| Cash used in other operating | 898,019,962.90 | 1,206,376,854.94 | |
| activities | |||
| Subtotal of cash used in operating activities | 6,034,648,934.59 | 5,020,381,788.83 | |
| Net cash generated from/used in operating activities | 779,734,776.47 | 197,762,653.28 | |
| II Cash flows from investing activities: | |||
| Proceeds from disinvestment | 10,000,000.00 | ||
| Return on investment | 1,095,128,801.14 | 1,254,671,774.57 | |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-term assets | 17,822,095.19 | 2,013,719.94 | |
| Net proceeds from the disposal of subsidiaries and other business units | |||
| Cash generated from other investing activities | 4,390,001,001.00 | 8,634,924,351.94 | |
| Subtotal of cash generated from investing activities | 5,502,951,897.33 | 9,901,609,846.45 | |
| Payments for the acquisition and construction of fixed assets, intangible assets and other long-term assets | 351,818,203.17 | 273,896,576.96 | |
| Payments for investments | 11,000,000.00 | 1,000,000.00 | |
| Net payments for the acquisition of subsidiaries and other business units | |||
| Cash used in other investing activities | 3,906,990,656.00 | 11,067,530,000.00 | |
| Subtotal of cash used in investing activities | 4,269,808,859.17 | 11,342,426,576.96 | |
| Net cash generated from/used in investing activities | 1,233,143,038.16 | -1,440,816,730.51 | |
| III Cash flows from financing activities: | |||
| Capital contributions received | 58,919,460.00 | 3,567,124,820.42 | |
| Borrowings received | 633,145,768.73 | 660,000,000.00 | |
| Cash generated from other financing activities | |||
| Subtotal of cash generated from financing activities | 692,065,228.73 | 4,227,124,820.42 | |
| Repayment of borrowings | 633,145,768.73 | ||
| Interest and dividends paid | 1,225,366,634.27 | 2,286,031,250.00 | |
| Cash used in other financing activities | 11,332,303.38 | 12,187,726.42 | |
| Subtotal of cash used in financing activities | 1,869,844,706.38 | 2,298,218,976.42 | |
| Net cash generated from/used in financing activities | -1,177,779,477.65 | 1,928,905,844.00 | |
| IV Effect of foreign exchange rate changes on cash and cash equivalents | |||
| V Net increase in cash and cash equivalents | 835,098,336.98 | 685,851,766.77 | |
| Add: Cash and cash equivalents, beginning of the period | 894,111,904.74 | 208,260,137.97 | |
| VI Cash and cash equivalents, | 1,729,210,241.72 | 894,111,904.74 | |
end of the period
Legal representative: Ruan Liping Chief Financial Officer: Zhang LinaHead of the financial department: Luo Yuebo
Consolidated Statements of Changes in Owners’ Equity
January-December 2021
Unit: RMB
| Item | 2021 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I Balance as at the end of the prior year | 600,613,800.00 | 3,820,175,608.14 | 46,728,594.00 | 28,863,769.91 | 302,797,998.73 | 4,431,669,986.31 | 9,137,392,569.09 | ||||||||
| Add: Adjustments for changes in accounting policies | |||||||||||||||
| Adjustments for correction of previous errors | |||||||||||||||
| Adjustments for business combinations involving entities under common control | |||||||||||||||
| Other adjustments | |||||||||||||||
| II Balance | 600,613,8 | 3,820,175,6 | 46,728,59 | 28,863,76 | 302,797,9 | 4,431,669,9 | 9,137,392,5 | ||||||||
| as at the beginning of the year | 00.00 | 08.14 | 4.00 | 9.91 | 98.73 | 86.31 | 69.09 | ||||||||
| III Increase/decrease in the period (“-” for decrease) | 566,720.00 | 93,892,680.42 | 33,982,946.00 | -21,326,379.54 | 1,579,208,932.66 | 1,618,359,007.54 | |||||||||
| (I) Total comprehensive income | -21,326,379.54 | 2,780,360,732.66 | 2,759,034,353.12 | ||||||||||||
| (II) Capital increased and reduced by owners | 566,720.00 | 93,892,680.42 | 33,982,946.00 | 60,476,454.42 | |||||||||||
| 1．Ordinary shares increased by owners | 566,720.00 | 50,544,523.60 | 51,111,243.60 | ||||||||||||
| 2．Capital increased by other equity holders | |||||||||||||||
| 3．Share-based payments recognized in owners’ equity | 43,348,156.82 | 33,982,946.00 | 9,365,210.82 | ||||||||||||
| 4．Others | |||||||||||||||
| (III) Profit distribution | -1,201,151,800.00 | -1,201,151,800.00 | |||||||||||||
| 1．Appropriation to surplus reserves | |||||||||||||||
| 2．Appropriation to |
| general reserve | |||||||||||||||
| 3．Appropriation to owners (or shareholders) | -1,201,151,800.00 | -1,201,151,800.00 | |||||||||||||
| 4．Others | |||||||||||||||
| (IV) Transfers within owners’ equity | |||||||||||||||
| 1．Increase in capital (or share capital) from capital reserves | |||||||||||||||
| 2．Increase in capital (or share capital) from surplus reserves | |||||||||||||||
| 3．Surplus reserves used to offset loss | |||||||||||||||
| 4．Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 5．Other comprehensive income transferred |
| to retained earnings | |||||||||||||||
| 6．Others | |||||||||||||||
| (V) Specific reserve | |||||||||||||||
| 1．Increase in the period | |||||||||||||||
| 2．Used in the period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV Balance as at the end of the period | 601,180,520.00 | 3,914,068,288.56 | 80,711,540.00 | 7,537,390.37 | 302,797,998.73 | 6,010,878,918.97 | 10,755,751,576.63 | 10,755,751,576.63 |
| Item | 2020 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I Balance as at the end of the prior year | 540,000,000.00 | 310,256,119.20 | 9,811.86 | 302,797,998.73 | 4,398,239,912.17 | 5,551,303,841.96 | |||||||||
| Add: Adjustments for changes in accounting policies | |||||||||||||||
| Adjustments for correction of previous errors | |||||||||||||||
| Adjustments for business combinations involving entities under common control | |||||||||||||||
| Other adjustments | |||||||||||||||
| II Balance as at the beginning of the year | 540,000,000.00 | 310,256,119.20 | 9,811.86 | 302,797,998.73 | 4,398,239,912.17 | 5,551,303,841.96 | |||||||||
| III Increase/decrease in the period (“-” for decrease) | 60,613,800.00 | 3,509,919,488.94 | 46,728,594.00 | 28,853,958.05 | 33,430,074.14 | 3,586,088,727.13 | |||||||||
| (I) Total comprehensive income | 28,853,958.05 | 2,313,430,074.14 | 2,342,284,032.19 | ||||||||||||
| (II) Capital increased and reduced by owners | 60,613,800.00 | 3,509,919,488.94 | 46,728,594.00 | 3,523,804,694.94 | |||||||||||
| 1．Ordinary shares increased by owners | 60,613,800.00 | 3,489,323,294.00 | 3,549,937,094.00 | ||||||||||||
| 2．Capital increased by other equity holders | |||||||||||||||
| 3．Share-based payments recognized in owners’ equity | 20,596,194.94 | 46,728,594.00 | -26,132,399.06 |
| 4．Others | |||||||||||||||
| (III) Profit distribution | -2,280,000,000.00 | -2,280,000,000.00 | |||||||||||||
| 1．Appropriation to surplus reserves | |||||||||||||||
| 2．Appropriation to general reserve | |||||||||||||||
| 3．Appropriation to owners (or shareholders) | -2,280,000,000.00 | -2,280,000,000.00 | |||||||||||||
| 4．Others | |||||||||||||||
| (IV) Transfers within owners’ equity | |||||||||||||||
| 1．Increase in capital (or share capital) from capital reserves | |||||||||||||||
| 2．Increase in capital (or share capital) from surplus reserves | |||||||||||||||
| 3．Surplus reserves used to offset loss |
| 4．Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 5．Other comprehensive income transferred to retained earnings | |||||||||||||||
| 6．Others | |||||||||||||||
| (V) Specific reserve | |||||||||||||||
| 1．Increase in the period | |||||||||||||||
| 2．Used in the period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV Balance as at the end of the period | 600,613,800.00 | 3,820,175,608.14 | 46,728,594.00 | 28,863,769.91 | 302,797,998.73 | 4,431,669,986.31 | 9,137,392,569.09 | 9,137,392,569.09 |
Legal representative: Ruan Liping Chief Financial Officer: Zhang Lina Head of the financial department: Luo Yuebo
Statements of Changes in Owners’ Equity of the Company as the Parent
January-December 2021
Unit: RMB
| Item | 2021 | ||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Total owners’ equity | |||
| Preference shares | Perpetual bonds | Others | |||||||||
| I Balance as at the end of the prior year | 600,613,800.00 | 3,815,676,184.48 | 46,728,594.00 | 302,797,998.73 | 2,112,413,955.75 | 6,784,773,344.96 | |||||
| Add: Adjustments for changes | |||||||||||
| in accounting policies | |||||||||||
| Adjustments for correction of previous errors | |||||||||||
| Other adjustments | |||||||||||
| II Balance as at the beginning of the year | 600,613,800.00 | 3,815,676,184.48 | 46,728,594.00 | 302,797,998.73 | 2,112,413,955.75 | 6,784,773,344.96 | |||||
| III Increase/ decrease in the period (“-” for decrease) | 566,720.00 | 93,892,680.42 | 33,982,946.00 | 1,614,540,967.34 | 1,675,017,421.76 | ||||||
| (I) Total comprehensive income | 2,815,692,767.34 | 2,815,692,767.34 | |||||||||
| (II) Capital increased and reduced by owners | 566,720.00 | 70,456,679.24 | 33,982,946.00 | 37,040,453.24 | |||||||
| 1．Ordinary shares increased by owners | 566,720.00 | 50,544,523.60 | 51,111,243.60 | ||||||||
| 2．Capital increased by other equity holders | |||||||||||
| 3．Share-based payments recognized in owners’ equity | 19,912,155.64 | 33,982,946.00 | -14,070,790.36 | ||||||||
| 4．Others | |||||||||||
| (III) Profit distribution | -1,201,151,800.00 | -1,201,151,800.00 | |||||||||
| 1．Appropriation to surplus reserves | |||||||||||
| 2．Appropriation to owners (or shareholders) | -1,201,151,800.00 | -1,201,151,800.00 | |||||||||
| 3．Others | |||||||||||
| (IV) Transfers within owners’ equity | |||||||||||
| 1．Increase in capital (or share capital) from capital reserves | |||||||||||
| 2．Increase in capital (or share capital) from surplus reserves | |||||||||||
| 3．Surplus reserves used to offset loss | |||||||||||
| 4．Changes in defined benefit |
| schemes transferred to retained earnings | |||||||||||
| 5．Other comprehensive income transferred to retained earnings | |||||||||||
| 6．Others | |||||||||||
| (V) Specific reserve | |||||||||||
| 1．Increase in the period | |||||||||||
| 2．Used in the period | |||||||||||
| (VI) Others | 23,436,001.18 | 23,436,001.18 | |||||||||
| IV Balance as at the end of the period | 601,180,520.00 | 3,909,568,864.90 | 80,711,540.00 | 302,797,998.73 | 3,726,954,923.09 | 8,459,790,766.72 |
| Item | 2020 | ||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Total owners’ equity | |||
| Preference shares | Perpetual bonds | Others | |||||||||
| I Balance as at the end of the prior year | 540,000,000.00 | 305,756,695.54 | 302,797,998.73 | 2,713,402,492.85 | 3,861,957,187.12 | ||||||
| Add: Adjustments for changes in accounting policies | |||||||||||
| Adjustments for correction of previous errors | |||||||||||
| Other adjustments | |||||||||||
| II Balance as at the beginning of the year | 540,000,000.00 | 305,756,695.54 | 302,797,998.73 | 2,713,402,492.85 | 3,861,957,187.12 | ||||||
| III Increase/ decrease in the period (“-” for decrease) | 60,613,800.00 | 3,509,919,488.94 | 46,728,594.00 | -600,988,537.10 | 2,922,816,157.84 | ||||||
| (I) Total comprehensive income | 1,679,011,462.90 | 1,679,011,462.90 | |||||||||
| (II) Capital increased and reduced by owners | 60,613,800.00 | 3,498,708,038.69 | 46,728,594.00 | 3,512,593,244.69 | |||||||
| 1．Ordinary shares increased by owners | 60,613,800.00 | 3,489,323,294.00 | 3,549,937,094.00 | ||||||||
| 2．Capital increased by other | |||||||||||
| equity holders | |||||||||||
| 3．Share-based payments recognized in owners’ equity | 9,384,744.69 | 46,728,594.00 | -37,343,849.31 | ||||||||
| 4．Others | |||||||||||
| (III) Profit distribution | -2,280,000,000.00 | -2,280,000,000.00 | |||||||||
| 1．Appropriation to surplus reserves | |||||||||||
| 2．Appropriation to owners (or shareholders) | -2,280,000,000.00 | -2,280,000,000.00 | |||||||||
| 3．Others | |||||||||||
| (IV) Transfers within owners’ equity | |||||||||||
| 1．Increase in capital (or share capital) from capital reserves | |||||||||||
| 2．Increase in capital (or share capital) from surplus reserves | |||||||||||
| 3．Surplus reserves used to offset loss | |||||||||||
| 4．Changes in defined benefit schemes transferred to retained earnings | |||||||||||
| 5．Other comprehensive income transferred to retained earnings | |||||||||||
| 6．Others | |||||||||||
| (V) Specific reserve | |||||||||||
| 1．Increase in the period | |||||||||||
| 2．Used in the period | |||||||||||
| (VI) Others | 11,211,450.25 | 11,211,450.25 | |||||||||
| IV Balance as at the end of the period | 600,613,800.00 | 3,815,676,184.48 | 46,728,594.00 | 302,797,998.73 | 2,112,413,955.75 | 6,784,773,344.96 |
Legal representative: Ruan Liping Chief Financial Officer: Zhang Lina Head of the financial department: Luo Yuebo
III Company Profile
1. Company overview
√ Applicable □ Not applicable
Gongniu Group Co., Ltd (hereinafter referred to as “the Company” or “Gongniu”) is a joint stocklimited company transformed from the former Gongniu Group Limited with 31 August 2017 as the basedate. It was registered with Ningbo Municipal Market Supervision Administration on 27 December 2017and is headquartered in Ningbo City, Zhejiang Province. The Company now holds a business licensewith a unified social credit code of 91330282671205242Y, with a registered capital of RMB601,180,500and a total of 601,180,500 shares (each with a par value of RMB1). Among them, there are 525,579,500restricted public A-shares and 75,601,000 unrestricted public A-shares. The Company’s shares werelisted for public trading on the Shanghai Stock Exchange on 6 February 2020.The Company pertains to the electrical machinery and equipment manufacturing industry. It ismainly engaged in the research, development, production and sales of power connection and powerextension products such as adaptors, wall switches and sockets, LED lighting and digital accessories.Products mainly include adaptors, wall switches and sockets, LED lighting and digital accessories.These financial statements have been authorized for issue by the Tenth Meeting of the SecondBoard of Directors of the Company on 11 April 2022.
2. Scope of consolidated financial statements
√ Applicable □ Not applicable
The Company included 16 subsidiaries, including Ningbo Gongniu Electrics Co., Ltd., CixiGongniu Electrics Co., Ltd. and Shanghai Gongniu Electrics Co., Ltd. in the scope of consolidatedfinancial statements for the current period. For details, please refer to the notes of "VIII. Changes inConsolidation Scope" and "IX. Interests in Other Entities" in "Section 10 Financial Report" of thisannual report.IV Preparation Basis of Financial Statement
1. Basis of preparation
The financial statements of the Company are based on continuing operations.
2. Continuing operations
√ Applicable □ Not applicable
The Company does not undergo any event or situation which may cause great concern about sustainableoperation ability within 12 months since the end of the reporting period.V Significant Accounting Policies and Accounting EstimatesSpecific accounting policies and accounting estimation hint:
□ Applicable √ Not applicable
1. Statement on Compliance with Accounting Standards for Business Enterprises
The Company’s Financial Statements are prepared in accordance with Accounting Standards forBusiness Enterprises, and indicate relevant information about the Company's financial status, businessresults and cash flow truly and completely.
2. Accounting period
The fiscal year of the Company is from January 1 to December 31 of every calendar year.
3. Operating cycle
√ Applicable □ Not applicable
The operating cycle of the Company is short, and 12 months is taken as the liquidity criterion for assetsand liabilities.
4. Standard currency for accounting
The standard currency for accounting is RMB.
5. Accounting treatment of business combination under the same control and businesscombination not under the same control
√ Applicable □ Not applicable
(1) Accounting methods of business combination under the same control
The Company’s assets and liabilities acquired from business combinations will be measuredaccording to the carrying value of the acquiree in financial statement of the final controlling party. TheCompany will adjust capital reserves according to proportion of the acquiree’s carrying value inconsolidated financial statement of the final controlling party and the balance between carrying valueand the carrying value paid for combination consideration or total nominal value of issued shares; if thecapital reserve is insufficient to offset such difference, the difference will be offset against retainedearnings.
(2) Accounting methods of business combination not under the same control
On the acquisition date, the difference between the combined cost and the fair value share of theidentifiable net assets of the acquiree obtained in the merger is recognized as goodwill. If the combinedcost is less than the fair value share of the identifiable net assets of the acquiree obtained in thecombination, firstly, the fair value of identifiable assets, liabilities and contingent liabilities of theacquiree and the measurement of combined cost are reviewed. If the combined cost is still less than thefair value share of identifiable net assets of the acquiree obtained in the merger after review, thedifference is recorded in profit and loss of the current period.
6. Method of preparation of consolidated financial statements
√ Applicable □ Not applicable
(1) The Company as the parent brings all subsidiaries under its control into the consolidated scopeof the consolidated financial statements. The consolidated financial statements are based on the financialstatements of the Company as the parent and its subsidiaries and are prepared by the Company as theparent according to other relevant information and Accounting Standards for Enterprises No. 33 -Consolidated Financial Statements.
(2) Relevant accounting treatment methods for buying and re-selling or selling and re-buying theequity of the same subsidiary in two consecutive fiscal years
7. Classification of joint arrangements and accounting of joint operations
□ Applicable √ Not applicable
8. Criteria for recognition of cash and cash equivalents
Cash listed in cash flow statement refers to cash on hand and reserves always available for payment.Cash equivalents refer to investments that are held for short term, highly liquid, and readily convertibleto known amounts of cash and subject to insignificant risk of change in value.
9. Foreign currency business and conversion of foreign currency statement
√ Applicable □ Not applicable
(1) Conversion of foreign currency business
At the initial recognition of foreign currency transactions, foreign currency shall be converted intoRMB at the approximate exchange rate of the spot exchange rate on the transaction date. On the balancesheet date, foreign currency monetary items are converted at the spot exchange rate on the balance sheetdate, and the exchange difference arising from different exchange rates is recorded in profit and loss ofthe current period except the exchange difference between the principal and interest of foreign currencyspecial loans related to the purchase and construction of assets eligible for capitalization. Foreigncurrency non-monetary items measured at historical cost are still converted at the spot exchange rate onthe transaction date, without changing their RMB amount. Foreign currency non-monetary itemsmeasured at fair value shall be converted at the spot exchange rate on the date when the fair value isdetermined, and the difference shall be recorded in the profit and loss of the current period or othercomprehensive income.
(2) Conversion of foreign currency financial statements
Assets and liabilities in the balance sheet shall be converted at the spot exchange rate on thebalance sheet date. Except for the “undistributed profit” item, other items of owner’s equity items areconverted at the spot exchange rate on the transaction date; the income and expense items in the incomestatement are converted at the spot exchange rate on the transaction date. The differences arising fromthe above conversion of foreign currency-denominated financial statements shall be recorded in othercomprehensive income.
10. Financial instruments
√ Applicable □ Not applicable
(1) Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when they are initially recognized:
a) Financial assets measured at amortized cost; b) financial assets at fair value through othercomprehensive income; c) financial assets at fair value through current profit or loss.
Financial liabilities are classified into the following four categories when they are initiallyrecognized: a) Financial liabilities at fair value through current profit or loss; b) financial liabilitiesarising from the transfer of financial assets not meeting the de-recognition criteria or from the continuinginvolvement in the transferred assets; c) financial guarantee contracts which do not fall within thecategory of (1) or (2) above, and loan commitments which do not fall within category (1) above andmade at an interest rate lower than the market rate; d) financial liabilities measured at amortized cost.
(2) Recognition basis, measurement methods and derecognition conditions for financial assets andfinancial liabilities
a) Determination basis and measuring methods for financial assets and financial liabilities
A financial instrument is recognized as an asset or liability when the Company becomes a partythereto. For financial assets or financial liabilities measured at fair value through profit or loss, the
transaction expenses are directly included in profit and loss of the current period; for financial assets orfinancial liabilities in other categories, the transaction expenses are included in the amount initiallyrecognized. However, accounts receivable initially recognized by the Company that do not include asignificant financing component or where the Company does not consider the financing component in acontract with a term not exceeding one year will be initially measured at the transaction price defined inAccounting Standard for Business Enterprises No.14-Income.b) Subsequent measurement of financial assetsA. Financial assets measured at amortized costFinancial assets are subsequently measured at amortized cost by the effective interest method.Gains or losses arising from a financial asset measured at amortized cost which does not form part ofany hedging relationship are recorded in current profit or loss at the time of de-recognition,reclassification, amortization according to the effective interest method or recognition of impairment.B. Investments in debt instruments at fair value through other comprehensive incomeSuch financial assets shall be subsequently measured at fair value. Interest, impairment loss or gainand exchange gain/loss calculated using the effective interest method are recorded in current profit orloss, other gains or losses are recorded in other comprehensive income. On derecognition, cumulativegains or losses that were previously recorded in other comprehensive income are transferred from othercomprehensive income and recorded in current profit or loss.C. Investments in equity instruments at fair value through other comprehensive incomeSuch financial assets shall be subsequently measured at fair value. Dividend received (except forthe portion which forms part of investment cost recovered) is recorded in current profit or loss, othergains or losses are recorded in other comprehensive income. On derecognition, cumulative gains orlosses that were previously recorded in other comprehensive income are transferred from othercomprehensive income and recorded in retained earnings.D. Financial assets at fair value through profit or lossGains or losses (including interest income and dividend income) arising from the subsequentmeasurement at fair value are recorded in current profit or loss, unless the financial asset forms part of ahedging relationship.c) Method for the subsequent measurement of financial liabilitiesA. Financial liabilities measured at fair value through profit and loss of the current periodSuch financial liabilities include transactional financial liabilities (including derivative instrumentswhich belong to the category of financial liabilities) and financial liabilities designated as at fair valuethrough current profit or loss. Such financial liabilities are subsequently measured at fair value. Theamount of changes in the fair value of financial liabilities designated as at fair value through profit orloss, which arise from the change in the credit risk of the Company, is recorded in other comprehensiveincome, unless such accounting treatment would result in or increase the accounting mismatch of gainand loss. Other gains or losses (including interest expense, except for the fair value changes arising fromthe change in credit risk of the Company) on such financial liabilities are recorded in current profit or
loss, unless such financial liabilities form part of a hedging relationship. On derecognition, cumulativegains or losses that were previously recorded in other comprehensive income are transferred from othercomprehensive income and recorded in retained earnings.
B. Financial liabilities resulting from the transfer of financial assets which does not satisfy the de-recognition criteria or from the continuing involvement in the transferred assets are measured accordingto the relevant provisions of the Accounting Standard for Business Enterprises No.23-Transfer ofFinancial Assets.C. Financial guarantee contracts that do not fall within the category of A or B above, and loancommitments that do not fall within the category of A above and made at an interest rate lower than themarket rate, are subsequently measured at the higher of the two following amounts after initialrecognition: a. The amount of loss provision determined according to the rules related to the impairmentof financial instruments; b. The remaining balance of the initially recognized amount after deducting theamount of cumulative amortization determined according to relevant rules of the Accounting Standardfor Business Enterprises No.14-Income.D. Financial liabilities measured at amortized costSuch financial liabilities are measured at amortized cost using the effective interest method. Gainsor losses arising from a financial liability measured at amortized cost which does not form part of anyhedging relationship are recorded in current profit or loss at the time of de-recognition or amortizationaccording to the effective interest method.d) Derecognition of financial assets and financial liabilitiesFinancial assets are derecognized when any of the following criteria is met:
a. The contractual rights to receive the cash flows from the financial assets terminate; or
b. The financial asset has been transferred, and such transfer satisfies the criteria set out in theAccounting Standard for Business Enterprises No.23-Transfer of Financial Assets regarding the de-recognition of financial assets.
B. Where the present obligation of a financial liability (or a portion thereof) has been discharged,the Company de-recognizes the financial liability (or a portion thereof).
(3) Recognition basis and measurement method of financial asset transfer
If the Company has transferred substantially all risks and rewards of ownership of the financialasset, the financial asset is de-recognized, and the right and obligation arising from or retained in thetransfer are individually recognized as an asset or liability. If substantially all risks and rewards ofownership of the financial asset are retained, the financial asset transferred remains recognized. If theCompany has not transferred or retained nearly all the risks and remunerations of ownership of the creditassets, different measures should be taken in accordance with the following circumstances respectively:
If the Company gives up the control of the financial assets, these financial assets shall be derecognized;if the Company does not give up the control of the financial assets, the relevant financial assets shall berecognized and the relevant liabilities shall be recognized accordingly in accordance with the extent oftheir continued involvement in the transferred financial assets.
If the overall transfer of financial assets meets the conditions for derecognition, the differencebetween the following two amounts shall be recorded in profit and loss of the current period: A. Thecarrying value of the transferred financial asset as of the date of derecognition; B. Sum of theconsideration received for the transfer of the financial asset, and the portion of the cumulative amount offair value changes previously recorded in other comprehensive income that corresponds with the portionof the asset de-recognized (the transferred financial asset is an investment in debt instruments at fairvalue through other comprehensive income). Where a portion of the financial asset has been transferredand the transferred portion as a whole satisfies the derecognition criteria, the carrying value of thefinancial asset as a whole prior to its transfer is allocated between the portion of the asset derecognizedand the portion that remains recognized, according to their relative fair value as of the transfer date, andthe difference between the two amounts mentioned below is recorded in current profit or loss: (1) Thecarrying value of the derecognized portion; (2) Sum of the consideration received for the derecognitionportion, and the portion of the cumulative amount of fair value changes previously recorded in othercomprehensive income, which corresponds with the derecognized portion (the transferred financial assetis an investment in debt instruments at fair value through other comprehensive income).
(4) Methods for determining the fair value of financial assets and financial liabilities
The Company applies valuation techniques that are applicable in the current situation and aresupported by sufficient available data and other information to determine the fair value of relevantfinancial assets and financial liabilities. The Company classifies the inputs of valuation techniques intothe following levels and applies them accordingly:
a) Level 1 inputs are the unadjusted quotation of the same assets or liabilities available on the activemarket on the measurement day;
b) Level 2 inputs are inputs for the relevant assets or liabilities other than the level 1 inputs, whichare directly or indirectly observable, including quotations for similar assets or liabilities in an activemarket; quotations for the same or similar assets or liabilities in an inactive market; other observableinputs other than quotations, such as interest rate and yield curve observable during normal quotationintervals; and market-tested inputs;
c) Level 3 inputs are non-observable inputs for the relevant assets or liabilities, including interestrate and stock volatility which cannot be directly observed or cannot be verified by observable marketdata, the future cash flow of a retirement obligation assumed in a business combination, and financialforecast performed based on internal data.
(5) Impairment of financial instruments
a) Measurement and accounting treatment of impairment of financial instruments
Based on the expected credit loss, for financial assets measured in amortized cost, investment indebt instruments measured at fair value and whose changes are recorded in other comprehensive income,contract assets, lease receivables, loan commitments classified as financial liabilities measured at fairvalue and whose changes are recorded in profit and loss of the current period, financial guaranteecontracts that do not belong to financial liabilities measured at fair value and whose changes are
recorded in the profits and losses of the current period or financial liabilities formed by the transfer offinancial assets that do not meet the conditions for derecognition or continue to be involved in thetransferred financial assets shall be impaired and loss reserves shall be recognized.Expected credit loss refers to the weighted average of credit loss of financial instruments weightedwith default risks. Credit loss refers to the difference between all contractual cash flow receivable by theCompany under contracts which are discounted according to the original effective interest rate, and allthe cash flow expected to be received, namely the present value of all cash shortfall. Specifically,financial assets acquired or derived to which credit impairment has occurred are discounted by theCompany according to the credit-adjusted effective interest rate.For the acquired or derived financial assets with credit impairment, the Company only recognizesthe cumulative change of expected credit loss over the lifetime after initial recognition as the loss reserveon the balance sheet date.
For receivables and contract assets formed by transactions regulated by Accounting Standards forBusiness Enterprises No.14-Income, which do not contain significant financing components or theCompany does not consider the financing components in contracts not exceeding one year, the Companyuses simplified measurement methods to measure the loss reserve according to the expected credit lossamount over the lifetime.
For financial assets other than the above measurement methods, at each balance sheet date, theCompany assesses the financial assets to see if the credit risk has significantly increased after initialrecognition. If the credit risk has significantly increased after initial recognition, the Company calculatesprovision for loss according to the amount of expected credit loss over the lifetime of the assets; if creditrisk has not significantly increased after initial recognition, the Company calculates loss provision basedon expected credit loss in the future 12 months.
The Company uses available reasonable and well-founded information, including forward-lookinginformation, to determine whether the credit risk of financial instruments has increased significantlysince the initial recognition by comparing the default risk of financial instruments on the balance sheetdate with the default risk on the initial recognition date.
On the balance sheet date, if the Company judges that the financial instrument only has low creditrisk, it is assumed that the credit risk of the financial instrument has not increased significantly since theinitial recognition.
The Company assesses the expected credit risk and measures the expected credit loss on the basisof single financial instrument or portfolios of financial instruments. When based on the portfolio offinancial instruments, the Company classifies the financial instruments into different portfoliosaccording to the common risk characteristics.
The Company re-measures expected credit loss at each balance sheet date, and the amount ofincrease in loss provision or the written-back amount of loss provision arising from re-measurement isrecorded in current profit or loss as an impairment loss or gain. For financial assets measured atamortized cost, impairment losses were allocated to offset the carrying value of the financial asset
presented in the balance sheet. For the debt investments measured at fair value through othercomprehensive income, the Company recognized its loss reserves in other comprehensive income butdid not offset the carrying value of the financial asset.
b) Financial instruments for assessing expected credit risk and measuring expected credit loss byportfolio
| Item | Basis for portfolio recognition | Measurement of expected credit loss |
| Other receivables-aging portfolio | Aging portfolio | With reference to historical credit loss experience, combined with the current situation and the forecast of future economic conditions, the expected credit loss is calculated through default risk exposure and the expected credit loss rate in the next 12 months or over the lifetime. |
c) Receivables and contract assets with expected credit losses measured by portfolio
A. Specific combination and method of measuring expected credit loss
| Item | Basis for portfolio recognition | Measurement of expected credit loss |
| Notes receivable--trade acceptance portfolio | Type of notes | With reference to historical credit loss experience, combined with the current situation and the forecast of future economic conditions, the expected credit loss is calculated through default risk exposure and the expected credit loss rate or over the lifetime. Commercial acceptance bills receivable |
| Notes receivable--bank acceptance portfolio | Type of notes | With reference to historical credit loss experience, combined with the current situation and the forecast of future economic conditions, the expected credit loss is calculated through default risk exposure and the expected credit loss rate or over the lifetime. Commercial acceptance bills receivable |
| Accounts receivable--aging portfolio | Aging portfolio | With reference to historical credit loss experience, combined with the current situation and the forecast of future economic conditions, the comparison table between the aging of accounts receivable and the expected credit loss rate over the lifetime is prepared to calculate the expected credit loss. |
B. Accounts receivable--comparison of aging portfolio with expected credit loss rate over thelifetime
| Aging | Accounts receivable Expected credit losses (%) |
| Within 1 year (inclusive, the same below) | 5.00 |
| Aging | Accounts receivable Expected credit losses (%) |
| 1 to 2 years | 10.00 |
| 2 to 3 years | 50.00 |
| Over 3 years | 100.00 |
(6) Offsetting financial assets and financial liabilities
The financial assets and financial liabilities are respectively listed in the balance sheet, notoffsetting each other. However, when all the following criteria are met, financial assets and liabilities areshown on a net basis after offsetting: A. The Company has the statutory right to offset the recognizedamounts, and such right is currently enforceable; B. The Company intends to settle the financial assetsand liabilities on a net basis, or to realize the assets and settle the liabilities simultaneously.For the transfer of financial assets where the derecognition criteria are not met, the Company may notoffset the financial assets transferred against the related liabilities.
11. Notes receivable
Determination methods and accounting methods of the expected credit losses of notes receivable
□ Applicable √ Not applicable
12. Accounts receivable
Determination methods and accounting methods of the expected credit losses of accountsreceivable
□ Applicable √ Not applicable
13. Receivables financing
□ Applicable √ Not applicable
14. Other receivables
Determination methods and accounting methods of the expected credit losses of other receivables
□ Applicable √ Not applicable
15. Inventories
√ Applicable □ Not applicable
1. Classification of inventories
Inventories refer to finished goods or commodities for sale held in daily activities, unfinished goodsin manufacturing process, and materials and supplies consumed in process of manufacturing products orproviding services, etc.
2. Valuation method of inventories upon delivery
The cost measurement for the inventories delivered is made with a one-time weighted averagemethod at the end of the month.
3. Basis for determining the net realizable value of various categories of inventories
On the balance sheet date, inventories should be measured whichever is lower in accordance withthe cost and net reliable value, and the provision for decline in value of inventories shall be madeaccording to the difference that the cost of each item of inventories higher than the net realizable value.For inventories directly used for sale, the net realizable value shall be determined by the estimated
selling price of the inventory minus the estimated selling expenses and relevant taxes and fees in thenormal production and operation process. For materials inventory requiring processing during normalprocess of production and operation, the net realizable value shall be determined by deducting estimatedcosts occurring during completion, estimated selling expenses and related taxes from estimated saleprice of finished products. On the balance sheet date, some of the same inventory have contract priceagreed, others not; their net realizable value shall be recognized respectively and compared with thecorresponding cost to determine the amount of provision or write-back of inventory depreciation reserve.
4. Inventory system of inventories
The perpetual inventory system is adopted for the inventories of the Company.
5. Amortization of low-value consumables and packing materials
(1) Low-value consumables
Low-value consumables are amortized with a one-time write-off method.
(2) Packing materials
Packing materials are amortized with a one-time write-off method.
16. Contract assets
(1). Method and criteria for determining contract assets
√ Applicable □ Not applicable
The Company presented contract assets or contract liabilities on the balance sheet in accordancewith the relationship between performance obligations and customer payment. The Company will set offthe contract assets and contract liabilities under the same contract and present them in net amount.The right of the Company to receive consideration from its customers unconditionally (i.e. onlydepending on the passage of time) is presented as receivables, and the right to receive consideration forgoods transferred to its customers (depending on factors other than the passage of time) is presented ascontract assets.
(2). Determination methods and accounting methods of the expected credit losses of contract assets
□ Applicable √ Not applicable
17. Assets held for sale
□ Applicable √ Not applicable
18. Debt investments
(1). Determination methods and accounting methods of the expected credit losses of debtinvestments
□ Applicable √ Not applicable
19. Other debt investments
(1). Determination methods and accounting methods of the expected credit losses of other debtinvestments
□ Applicable √ Not applicable
20. Long-term receivables
(1). Determination methods and accounting methods of the expected credit losses of long-termreceivables
□ Applicable √ Not applicable
21. Long-term equity investments
√ Applicable □ Not applicable
1. Judgment criteria for joint control and significant influence
Joint control refers to the control the Company shares with other entities over a certain arrangementfollowing relevant agreements by which any activity under the arrangement may be conducted only withthe unanimous agreement of all participants sharing the power of control. Significant influence refers tothe power to participate in making decisions on the financial and operating policies of an investee, butnot to control or do joint control together with other parties over the formulation of these policies.
2. Determination of investment cost
(1) In case of a business combination under the same control, if the acquirer pays cash, transfersnon-cash assets, assumes debts or issues equity securities as merger consideration, the share of theowner’s equity of the acquiree obtained on combination date in the carrying value of the financialstatements of the ultimate controlling party is deemed as an initial investment cost. Capital reserve isadjusted based on the difference between initial investment cost of long-term equity investment andcarrying value of paid combination consideration or total nominal value of issued share; if the capitalreserve is insufficient to offset such difference, the difference will be offset against retained earnings.
If business combination under the same control is realized step by step through multipletransactions, whether the multiple transactions is a “Package Deal” is determined. If the deals fell into a"Package Deal", all transactions shall be treated as a transaction to gain control. If it is not a “packagedeal”, on the combination date, the initial investment cost of the long-term equity investment shall bedetermined based on the share of net assets’ carrying value of the acquiree in the consolidated financialstatements of the ultimate controlling party. The capital reserve is adjusted based on the differencebetween the initial investment cost of the long-term equity investment on the combination date and thesum of the carrying value of the long-term equity investment before the acquisition and the carryingvalue of the new payment consideration on the acquisition date. If the capital reserve is insufficient tooffset such difference, the difference will be offset against retained earnings.
(2) For business combinations not under the same control, the fair value of the combinationconsideration paid by it on the acquisition date shall be its initial investment cost.
For long-term equity investment formed by a business combination achieved step by step throughmultiple transactions, relevant accounting treatment is performed with distinctions made betweenseparate financial statements and consolidated financial statements:
1) In the separate financial statements, the sum of the fair value of the originally held equityinvestment and the additional investment cost shall be taken as the initial investment cost whenconverting to using the cost method.
2) In the consolidated financial statements, it is determined whether it is a “package deal”. If thedeals fell into a "Package Deal", all transactions shall be treated as a transaction to gain control. If it isnot a “Package Deal”, the equity of the acquiree held prior to the acquisition date shall be re-measuredaccording to the fair value of the equity at the acquisition date, and the difference between the fair value
and the carrying value shall be recorded in the current investment income. Where the equity of theacquiree held prior to the acquisition date involves other comprehensive income accounted for based onthe equity method, etc., the other comprehensive income related to it shall be converted into the currentinvestment income of the acquisition date. However, other comprehensive income arising from the re-measurement of net liabilities or changes in net assets of defined benefit plans by the investee isexcluded.
(3) Except for business combination: If it is acquired by paying cash, the actual acquisition priceshall be taken as its initial investment cost; if it is acquired by issuing equity securities, the fair value ofthe issued equity securities shall be taken as its initial investment cost; if it is acquired by means of debtrestructuring, the initial investment cost shall be determined according to the Accounting Standards forBusiness Enterprises No. 12-Debt Restructuring; if it is acquired by exchange of non-monetary assets,the initial investment cost shall be determined according to the Accounting Standards for BusinessEnterprises No. 7-Exchange of Non-monetary Assets.
3. Method for subsequent measurement and recognition of profit or loss
The long-term equity investment controlled by the investee shall be accounted for by the costmethod; the long-term equity investment of associated enterprises and joint ventures shall be accountedfor by the equity method.
4. Treatment method of investing in subsidiaries until loss of control right step by step throughmultiple transactions
(1) Separate financial statements
For the disposal of long-term equity investments, the difference between the carrying value and theactual price acquired shall be recorded into profit and loss of the current period. For the remaining equity,if it still has a significant impact on the investee or implements joint control with other parties, it shall beaccounted for by the equity method; if it is no longer possible to exercise control, joint control orsignificant influence on the investee, accounting shall be carried out in accordance with the relevantprovisions of Accounting Standards for Business Enterprises No. 22-Recognition and Measurement ofFinancial Instruments.
(2) Consolidated financial statements
1) The Company disposes of investment in subsidiaries step by step through multiple transactionsuntil loss of control right. If it is not a "package deal", before the loss of control right, the differencebetween the disposal price and the share of net assets is continuously calculated by the subsidiary fromthe acquisition date or combination date corresponding to the disposal of long-term equity investmentshall be adjusted, and the capital reserve (capital premium) shall be adjusted. If the capital premium isinsufficient to offset, the retained earnings shall be offset.
In case of loss of control over the original subsidiary, the remaining equity shall be re-measuredaccording to its fair value on the date of loss of control. The aggregate of the consideration obtained bydisposing of the equity and the fair value of the remaining equity less the portion of the net assets of thesubsidiary that has been measured, as calculated at the original shareholding proportion, from the
acquisition date or combination date is recognized in profit and loss of the current period on investmentsin which the control is lost, and goodwill shall be offset. Other comprehensive income, etc. related to theoriginal subsidiary’s equity investment will be converted into income from investment for the currentperiod when the control is lost.
2) The Company disposes of investment in subsidiaries step by step through multiple transactionsuntil loss of control right. If it is a “package deal”, the Company treats each transaction as a transactionthat disposes of a subsidiary and loses control. However, the difference between each disposal pricebefore losing control and the share of subsidiaries’ net assets corresponding to the disposed investmentshall be recognized as other comprehensive income in the consolidated financial statements, and shall betransferred into the profits and losses of the current period in case of loss of control.
22. Investment property
Not applicable
23. Fixed assets
(1). recognition criteria
√ Applicable □ Not applicable
The fixed assets of the Company refer to tangible assets held for production of goods, provision oflabor services, lease or business with a service life of over a fiscal year. Fixed assets shall be recognizedwhen the economic benefits are flowing in and the cost can be measured reliably.
(2). Depreciation method
√ Applicable □ Not applicable
| Category | Depreciation method | Depreciable life (year) | Residual value rate | Annual depreciation rate |
| Houses and buildings | Straight-line depreciation method | 20 | 3 | 4.85 |
| Machinery equipment | Straight-line depreciation method | 4-10 | 3 | 9.70-24.25 |
| Means of transportation | Straight-line depreciation method | 2-10 | 3 | 9.70-48.50 |
| Electronic and other equipment | Straight-line depreciation method | 2-10 | 3 | 9.70-48.50 |
| Fixed assets fixtures | Straight-line depreciation method | 5 | 0 | 20 |
(3). Recognition basis, valuation and depreciation method for fixed assets under financing lease
□ Applicable √ Not applicable
24. Construction in progress
√ Applicable □ Not applicable
1. Fixed assets shall be recognized when the economic benefits are flowing in and the cost can bemeasured reliably. The construction in progress is measured according to the actual cost incurred beforethe construction of the asset reaches its intended serviceable condition.
2. When construction in progress reaches expected serviceable conditions, it will be carried forward
into fixed assets based on its actual cost. For those that have reached their intended serviceable status buthave not yet completed the settlement, they shall be transferred to fixed assets according to the estimatedvalue, and the original provisional value shall be adjusted according to the actual cost after the finalaccounts are completed, but the depreciation already accrued shall not be adjusted.
25. Borrowing costs
√ Applicable □ Not applicable
1. Recognition principles for the capitalization of borrowing costs
The borrowing costs that have occurred and can be directly attributed to the acquisition,construction or production of assets eligible for capitalization are capitalized by the Company andrecorded in relevant cost of assets; other borrowing costs are recognized as expenses based on theamount incurred when they occur, and shall be recorded in profit and loss of current period.
2. Period for capitalization of borrowing costs
(1) When all the following conditions are met by the borrowing costs, capitalization will start: 1)asset expenditure has occurred; 2) borrowing costs have occurred; 3) acquisition, construction orproduction activities have started in order to make the fixed asset be ready for the intended use or sale.
(2) If the acquisition, construction or production of an asset eligible for capitalization iscontinuously suspended for over 3 months for abnormal reasons, capitalization of the borrowing costsshall be suspended; borrowing costs incurred during the suspension shall be recognized as the currentexpenses until the acquisition, construction or production of the asset is resumed.
(3) When the assets with the purchase, construction or production meeting the capitalizationconditions reach the expected available or marketable state, the borrowing cost ceases to be capitalized.
3. Capitalization rate and capitalization amount of borrowing costs
For a specifically borrowed fund for the acquisition, construction or production of an asset eligible forcapitalization, the amount of interest that shall be capitalized is determined based on the interestexpenses incurred in the period when a specifically borrowed fund is obtained (including theamortization of discounts or premiums recognized according to the effective interest method) less anyincome earned on the unused borrowing fund as a deposit in a bank or as a temporary investment. Wherea general borrowing is used for the acquisition, construction and production of an asset eligible forcapitalization, the amount of interest that shall be capitalized is determined by multiplying the part of theaccumulative asset disbursements in excess of the weighted average asset disbursement for thespecifically borrowed fund by the capitalization rate of the general borrowing used.
26. Biological assets
□ Applicable √ Not applicable
27. Oil and gas assets
□ Applicable √ Not applicable
28. Right-of-use assets
□ Applicable √ Not applicable
29. Intangible assets
(1). Pricing method, service life, and impairment test
√ Applicable □ Not applicable
1. Intangible assets include land use rights, patent rights, and non-patent technology, which areinitially measured at costs.
2. Intangible assets with limited service life are properly amortized within the service life based onthe expected method to realize economic benefits relating to the intangible assets. Where the expectedrealization method cannot be reliably determined, Straight-line Amortization Method is adopted. Thedetailed period is as follows:
| Item | Amortization period (year) |
| Land use right | Duration of land use |
| Software | 2-5 |
(2). Accounting policies for internal research and development costs
√ Applicable □ Not applicable
The expenditures occurring during the research period of internal R&D items are included in theprofit or loss for the current period at the time of occurrence. Expenditure on internal research anddevelopment projects in the research stage shall be recognized as intangible assets when the followingconditions are met at the same time: (1) It is technically feasible to complete the intangible assets so thatthey can be used or sold; (2) it has the intention of completing the intangible asset and using or selling it;
(3) the ways in which intangible assets generate economic benefits include the existence of a market forthe products produced by using such intangible assets or the existence of a market for the intangibleassets themselves, and intangible assets that will be used internally shall be proven their usefulness; (4)there should be sufficient technical, financial and other resources to complete the development of theintangible asset and have the ability to use or sell the intangible assets; (5) the expenditure attributed tothe development stage of intangible assets can be measured reliably.
30. Long-term assets impairment
√ Applicable □ Not applicable
For long-term equity investments, fixed assets, construction in progress, right-of-use assets, long-term assets with limited service life and other long-term assets, if there are signs of impairment on thebalance sheet date, the recoverable amount shall be estimated. Goodwill and intangible assets withuncertain service life formed by business combinations are tested for impairment every year regardlessof whether there are signs of impairment.
If the recoverable amount of the above-mentioned long-term assets is lower than its carrying value,the asset impairment reserve shall be recognized according to the difference and recorded in profit andloss of the current period.
31. Long-term prepaid expense
√ Applicable □ Not applicable
Long-term prepaid expenses are accounted for all expenses that have been paid and have anamortization period of more than one year (excluding one year). The long-term prepaid expenses areaccounted for according to the actual amount incurred and are amortized averagely over the benefitperiod or the specified period. If the long-term deferred expenses item cannot bring benefit in thesubsequent accounting period, the amortized value of the item that has not been amortized will betransferred to the profit or loss for the current period.
32. Contract liabilities
(1). Method for determining contract liabilities
√ Applicable □ Not applicable
The Company presented contract assets or contract liabilities on the balance sheet in accordancewith the relationship of performance obligations and customer payment. The Company will set off thecontract assets and contract liabilities under the same contract and present them in net amount.
The obligations of transferring goods to customers as a result of the consideration that the Companyhad received or shall receive from customers were presented as contract liabilities.
33. Employee remuneration
(1). Accounting treatment methods of short-term remuneration
√ Applicable □ Not applicable
Within the accounting period when employees provide service, the actual short-term remunerationshall be recognized as liabilities and be recorded in profit and loss of the current period or relevant assetcosts.
(2). Accounting treatment method for post-employment benefits
√ Applicable □ Not applicable
The Company classifies post-employment benefit plans into the defined contribution plan and thedefined benefit plan.
(1) During the accounting period in which the employees provide services to the Company, theamount to be contributed as calculated according to the defined contribution plan is recognized as aliability and recorded in the profit or loss for the current period or the related asset costs.
(2) The accounting handling of the defined benefit plan usually includes the following steps:
1) Based on the projected unit credit method, related demographic variables and financial variablesare estimated by using unbiased and mutually compatible actuarial assumptions, the obligations underthe defined benefit plan are measured, and the periods to which relevant obligations are attributed aredetermined. Meanwhile, the Company will discount the obligations incurred from a defined benefit plan,to determine present value of defined benefit plan and current service cost.
2) The deficit or surplus formed by present value of obligations to the defined benefit plan minusthe fair value of assets of the defined benefit plans is recognized as one net liabilities or net profits of thedefined benefit plans. If the defined benefit plans have a surplus, the Company shall measure the netprofit of the defined benefit plans according to whichever is lower between the surplus and upper limiton the assets of the defined benefit plans.
3) At the end of the period, the employee compensation cost incurred in the defined benefit plan isrecognized as service cost, net interest arising from the net liabilities and net assets of the defined benefitplan, and changes in the net liabilities or net assets of the remeasured defined benefit plan. Of which, thenet interest arising from the net liabilities or net assets of the defined benefit plan is recorded in profitand loss of the current period or related asset cost, and changes in the net liabilities or net assets of theremeasured defined benefit plan are recorded in other comprehensive income, and is not written-back toprofits and losses in subsequent accounting periods. But these amounts recognized in othercomprehensive income can be transferred within the scope of equity.
(3). Accounting treatment method for dismissal benefits
√ Applicable □ Not applicable
If the Company provides the employee with dismissal benefits, the Company shall recognize theemployee remuneration liabilities and record them in profit or loss for the current period on thefollowing dates (whichever is earlier): (1) the date when the Company may not unilaterally withdrawdismissal benefits provided due to termination of labor relationship plans or layoff proposals; (2) thedate when the Company recognizes costs or expenses relating to the restructure of payments of dismissalbenefits.
(4). Accounting treatment method for other long-term employee benefits
√ Applicable □ Not applicable
If other long-term benefits provided by the Company to employees meet the conditions of thedefined contribution plan, accounting treatment shall be carried out according to the relevant provisionsof defined contribution plan. Except for that, the other long-term benefits shall be subject to theaccounting handling according to the defined benefit plan. To simplify the related accounting treatment,employee compensation cost incurred in the defined benefit plan is recognized as service costs. Netinterests of net liabilities or net assets of other long-term employee benefits, as well as the total netamount of changes caused by re-measurement of net liabilities or net assets of other long-term employeebenefits, will be recorded in profit and loss of the current period or the related asset costs.
34. Lease liabilities
□ Applicable √ Not applicable
35. Provisions
□ Applicable √ Not applicable
36. Share-based payment
√ Applicable □ Not applicable
1. Category of share-based payment
The Company's share-based payment includes equity-settled share-based payment and cash-settledshare-based payment.
2. Relevant accounting processing for the implementation, modification, and termination of share-based payment plans
(1) Equity-settled share-based payment
For an equity-settled share-based payment in return for services of employees, if the right can beexercised immediately after the grant, the fair value of the equity instruments shall, on the grant date, berecorded in the relevant costs or expenses and the capital reserve shall be adjusted accordingly. For anequity-settled share-based payment in return for employee services, if the right cannot be exercised onlyafter completing the service during the vesting period or meeting the prescribed performance conditions,then on each balance sheet date within the vesting period, the services acquired in the current periodshall, based on the best estimate of the number of vested equity instruments, be recorded in the relevantcosts or expenses at the fair value of the equities instruments on the grant date, and the capital reserveshall be increased accordingly.For an equity-settled share-based payment in return for the service of any other party, if the fairvalue of the service of any other party can be reliably measured, it shall be measured at the fair value ofthe service of any other party on the acquisition date; if the fair value of the service of any other partycan not be reliably measured, but the fair value of the equity instruments can be reliably measured, itshall be measured at the fair value of the equity instruments on the acquisition date and recorded in therelevant costs or expenses, and the owner's equity shall be increased correspondingly.
(2) Cash-settled share payment
For a cash-settled share-based payment in return for services of employees, if the right can beexercised immediately after the grant, the fair value of liabilities assumed by the Company shall, on thegrant date, be recorded in the relevant costs or expenses and the liabilities shall be increased accordingly.For a cash-settled share-based payment, if the right cannot be exercised only after completing the serviceduring the vesting period or meeting the prescribed performance conditions, on each balance sheet datewithin the vesting period, the services acquired in the current period shall, based on the best estimate ofthe information about the vesting right, be recorded in the relevant costs or expenses and thecorresponding liabilities at the fair value of the liabilities assumed by the Company.
(3) Modification and termination of share-based payment plans
If the modification increases the fair value of the granted equity instruments, the Company shallrecognize the increase of the services acquired according to the increase of the fair value of the equityinstruments. If the modification increases the number of the granted equity instruments, the Companyshall recognize the increased fair value of equity instruments as the increase of the services acquired. Ifthe Company modifies the vesting conditions in a way that is favorable to employees, the Company shallconsider the modified vesting conditions when processing vesting conditions.
If the modification reduces the fair value of the granted equity instruments, the Company shallcontinue to recognize the amount of the service acquired based on the fair value of the equityinstruments on the grant date, and shall not consider the decrease of the fair value of the equityinstruments. If the modification reduces the number of equity instruments, the Company shall processequity instruments by reducing some of them as the cancellation of the granted equity instruments. If thevesting conditions are modified in a way that is unfavorable to employees, the Company shall notconsider the modified vesting conditions when processing vesting conditions.
If the Company cancels the granted equity instruments or settles the granted equity instruments (notincluding those canceled due to failure to meet vesting conditions) during the vesting period, thecancellation or settlement shall be processed as the vested right and the amount to be recognized withinthe remaining vesting period originally shall be recognized immediately.
37. Preference shares, perpetual bonds and other financial instruments
□ Applicable √ Not applicable
38. Revenue
(1). Accounting policy for recognition and measurement of revenue
√ Applicable □ Not applicable
1. Principles of revenue recognition
On the commencement date of a contract, the Company shall assess the contract, identify eachsingle performance obligation in the contract, and determine that each single performance obligation issatisfied whether within a certain period of time or at a certain point in time.
When one of the following conditions is met, it belongs to fulfilling the performance obligationwithin a certain period of time, otherwise, it belongs to fulfilling the performance obligation at a certainpoint in time: (1) The customer obtains and consumes the economic benefits brought by the Company'sperformance while the Company performs the obligation; (2) The customer can control the goods underconstruction during the performance of the Company; (3) The goods produced during the performanceof the Company have irreplaceable uses, and the Company has the right to collect amount for thecumulative performance completed so far during the whole contract period.
For the performance obligations performed within a certain period of time, the Company recognizesthe revenue according to the performance progress within that period of time. When the performanceprogress cannot be reasonably determined, if the cost incurred is expected to be compensated, therevenue shall be recognized according to the amount of the cost incurred until the performance progresscan be reasonably determined. For performance obligations performed at a certain point in time, revenueis recognized at the time when the customer obtains control over related goods or services. To decidewhether the customer has obtained the control over goods, the Company takes into account the followingsigns: (1) the enterprise has the present right to collection for the goods, meaning the customer bears thepresent obligation to payment for the goods; (2) the enterprise has passed the legal title to the goods tothe customer, meaning the customer has had the legal title to the goods; (3) the enterprise has transferredthe physical possession of the goods to the customer, meaning the customer has had the physicalpossession of the goods; (4) the enterprise has transferred the major risks and remunerations concerningthe title to the goods to the customer, meaning the customer has obtained the major risks andremunerations concerning the title to the goods; (5) the customer has accepted the goods; (6) other signsto show that the customer has obtained the control over the goods.
2. Principles of revenue measurement
(1) The Company measures revenue on the basis of the transaction price allocated to eachperformance obligation. Transaction price is the amount of consideration that the Company is expected
to be entitled to receive for transferring goods or services to customers, excluding the amount receivedon behalf of third parties and the amount expected to be refunded to customers.
(2) If there is variable consideration in a contract, the Company shall determine the best estimate ofthe variable consideration according to the expected value or the most likely amount, but the transactionprice including the variable consideration shall not exceed the amount that the cumulative recognizedincome will most likely not be significantly written-back when the relevant uncertainty is eliminated.
(3) If there is a significant financing component in a contract, the Company shall determine thetransaction price according to the amount payable in cash when the customer assumes control of thegoods or services. The difference between the transaction price and the contract consideration shall beamortized by the effective interest rate method during the contract period. On the commencement date ofa contract, if the Company expects that the interval between the customer obtaining the control right ofgoods or services and the customer paying the price will not exceed one year, the major financingcomponents in the contract will not be considered.
(4) If a contract contains two or more performance obligations, the Company shall allocate thetransaction price to each single performance obligation according to the relative proportion of the singleselling price of the goods promised by each single performance obligation on the commencement date ofthe contract.
3. Specific methods for revenue recognition
The Company mainly sells adaptors, wall switches and sockets, LED lighting and digitalaccessories. In addition to meeting the general principles of revenue recognition, the sales of productsunder different sales situations are generally recognized after meeting the following conditions.
(1) The specific time points for revenue recognition of various domestic sales methods of theCompany are as follows:
1) Distribution method: Revenue is recognized when the goods are sent to the designated place andthe distributor receives the goods.
2) Direct sales: For direct sales by supermarkets and e-commerce, when the buyer receives thegoods and publishes the information on the quantity and amount of goods received on its supplierplatform, the Company recognizes the revenue when it completes the reconciliation. For sales byopening an online shop on the e-commerce platform, the Company recognizes the revenue when thecustomer receives the goods and confirms such receipt on the e-commerce platform. For the sales by realestate developers or decoration companies, the Company recognizes the revenue when the buyer hasreceived the goods and both parties complete the reconciliation. For offline direct sales such as Shanghaiarea, the Company recognizes the revenue when the goods are delivered to the buyer.
3) Consignment method: The Company recognizes the revenue when receiving the consignment list.
(2) The Company recognizes its revenue when it has completed the customs declaration formalitiesand obtained the bill of lading.
(2). Different business models are adopted for different businesses, which may lead to thedifferences in the accounting policy for recognition of revenue
□ Applicable √ Not applicable
39. Contract costs
□ Applicable √ Not applicable
40. Government grants
√ Applicable □ Not applicable
1. Government grants are recognized when all the criteria below are satisfied: (1) The Company isable to satisfy all the conditions attached to such government grant; (2) The Company is able to receivethe grants from the government. Government grants were measured at the amount received or receivableif they were monetary assets. Non-monetary government grants were measured at fair value; if the fairvalue could not be reliably obtained, they were measured at the nominal amount.
2. Judgment basis and accounting treatment method for government grants related to assets
Government documents stipulate that government grants used to purchase, build or otherwise formlong-term assets are classified as government grants related to assets. If the government documentsconcerning a government grant do not specify the target of the grant, it should be determined based onthe basic conditions that must be met in order to receive the grant, and government grants which areconditional upon a long-term asset acquired, constructed or otherwise formed are classified as asset-related government grants. Government grants related to assets are used to offset carrying value of assetsor are recognized as deferred income. If recognized as deferred income, government grants related toassets shall be recorded in the profit and loss in stages in a reasonable and systematic manner within theuseful life of the relevant asset. Government grants measured at nominal amount were directlyrecognized as profit or loss for the current period. If the underlying assets were sold, transferred,scrapped, or damaged before the end of the useful life, the unallocated balance of the relevant deferredincome was transferred to the profit or loss for the period of assets disposal.
3. Judgment basis and accounting treatment method for government grants related to income
Government grants other than government grants related to assets were classified as governmentgrants related to income. For government grants, including both asset-related parts and income-relatedparts that are difficult to be distinguished, overall government grants shall be classified as governmentgrants related to income. Government grants related to income shall be recognized as deferred income ifthey are used to compensate related future expenses or losses and recorded in profit and loss of thecurrent period during the period when relevant expenses are recognized, or shall be recognized ascurrent profit and loss or offset the related costs if they are used to compensate related expenses or lossesincurred.
4. Government grants related to daily activities are recognized as other income or used to offsetrelevant costs according to the substance of business activities. Government grants that are not related todaily activities are recognized as non-operating income and expenses.
41. Deferred income tax assets/Deferred income tax liabilities
√ Applicable □ Not applicable
1. Based on the difference between the carrying value of assets and liabilities and their tax bases(the difference between the tax base and the carrying value, where tax bases of items that are not
recognized as assets and liabilities can be determined according to the tax law), deferred income taxassets or deferred income tax liabilities are recognized in accordance with the applicable tax rates duringthe expected period in which such assets are to be recovered or such liabilities are to be settled.
2. Deferred income tax assets shall be recognized to the extent of the amount of the taxable incomethat is likely to be obtained and deducted from deductible temporary difference. On the balance sheetdate, if there is conclusive evidence that it is probable that sufficient taxable income will be available tooffset the deductible temporary differences in the future, the deferred income tax assets that have notbeen recognized in the previous accounting period shall be recognized.
3. The Company reviews carrying values of deferred tax assets on the balance sheet date. If it isdetermined that the Company is not Period likely to obtain adequate taxable income to offset benefitsfrom deferred tax assets, the carrying values of deferred tax assets are written down. Such write-downsare reversed when it becomes probable that sufficient taxable income should be available.
4. The current income tax and deferred income tax of the Company shall be recorded in profit andloss of the current period as income tax expenses or incomes, excluding the income taxes incurred in thefollowing circumstances: (1) Business combination; (2) Transactions or events directly recognized in theowner's equity.
42. Leases
(1). Accounting treatment method for operating lease
√ Applicable □ Not applicable
1. The Company as the leasee
On the beginning date of the lease term, the Company will recognize the lease with a lease term notexceeding 12 months and excluding the purchase option as a short-term lease. Leases with lower valuewhen a single leased asset is a brand-new asset are identified as low-value asset leases. If the Companysublets or expects to sublet the leased assets, the original lease shall not be deemed as a low-value assetlease.
The Company records the payments of short-term and low-value asset leases incurred during eachperiod of the lease term in the relevant asset costs or the profit or loss for the current period by thestraight-line method.
The Company will recognize right-of-use assets and lease liabilities on the inception date of thelease term, excluding the above short-term and low-value asset leases.
(1) Right-of-use assets
Right-of-use assets are initially measured at costs, including: 1) The initial measurement amount oflease liabilities; 2) If there is a lease incentive for the lease payment paid on or before the start date ofthe lease term, the relevant amount of the lease incentive already enjoyed shall be deducted; 3) Initialdirect expenses incurred by the lessee; 4) The expected cost to be borne by the lessee in order todismantle and remove the assets leased, restore original state of the place where the assets leased are in,or restore the assets leased to the state stipulated in the lease terms.
The Company depreciates right-of-use assets on a straight-line basis. If it is reasonably certain that
ownership of the leased asset(s) will be obtained at the end of the lease term, the Company depreciatesthe leased asset(s) over its/their remaining service life. If it is not reasonably certain that the ownershipof the leasehold property will be obtained at the end of the lease term, the Company will depreciate theleased asset(s) over the lease term or the remaining service life, whichever is shorter.On the balance sheet date, if there is any sign that right-of-use assets are impaired, thecorresponding impairment reserve shall be made according to the difference between the carrying valueand the recoverable amount.
(2) Lease liabilities
On the start date of the lease term, the Company recognizes the present value of the outstandinglease payments as lease liabilities. The Company regards the interest rate implicit in lease as the rate ofdiscount when calculating the present value of the lease payment. The incremental lending rate of thelessee will be deemed as the rate of discount, if the interest rate implicit in lease cannot be confirmed.The difference between the lease payment and its present value is regarded as an unrecognized financingexpense. Interest expense is recognized at the discount rate of the present value of the recognized leasepayment during each period of the lease term and is recorded in the profits and losses of the currentperiod. Variable lease payments that are not recorded in the lease liabilities measurement are recorded inprofits and losses of the current period when they are actually incurred.After the start of the lease term, in case of any changes in actual fixed payment amount, theexpected payable amount of the guarantee residual value, the index or ratio used to determine the leasepayment amount, and the evaluation result or actual exercise of the purchase option, renewal option ortermination option, the Company will re-calculate the lease obligation using the present value of thechanged lease payment, and adjusts the carrying value of right-of-use assets accordingly. If the carryingvalue of right-of-use assets has been reduced to zero, while lease liabilities still needs to be furtherreduced, the remaining amount will be recorded in the profits and losses of the current period.
2. The Company as lessor
On the start date of the lease term, the Company divides the lease that substantially transfers almostall risks and rewards related to the ownership of the leased assets into finance leases, except foroperating leases.
The Company recognizes the lease payments receivable as rental earnings in each period within thelease term on a straight-line basis. The initial direct costs related to the operating lease are capitalized,amortized within the lease term on the same basis as the recognition of rental earnings, and included inthe profit or loss for the current period. Variable lease payments obtained by the Company in relation tooperating leases that are not included in the lease receivable are included in the profit or loss for thecurrent period when they are actually incurred.
(2). Accounting treatment method for finance lease
□ Applicable √ Not applicable
(3). Definition method and accounting treatment method of lease under the new lease standards
□ Applicable √ Not applicable
43. Other important accounting policies and accounting estimation
□ Applicable √ Not applicable
44. Changes in important accounting policies and accounting estimation
(1). Changes in important accounting policy
√ Applicable □ Not applicable
| Contents of and reasons for the changes to accounting policies | Approval procedure | Remarks (Name and amount of items in the statement suffering significant influence) |
| Changes in accounting policies caused by changes in Accounting Standards For Business Enterprises | Implement new standards | Refer to other notes |
Other notes:
From 1 January 2021 (hereinafter referred to as the "date of initial adoption"), the Company startedto adopt the revised Accounting Standards for Business Enterprises No. 21 – Leases (hereinafter referredto as the "new lease standards").For a contract already existing prior to the date of initial adoption, the Company will decide not toreassess whether it is a lease or includes any lease.
For the lease contract for which the Company is the lessee, the Company adjusts the retainedearnings at the beginning of the reporting period and the amount of other related items in the financialstatements according to the cumulative impact of the implementation of the new lease standards and theoriginal standards on the date of initial adoption, and does not adjust the information of comparableperiods. The specific accounting processing is as follows:
For a finance lease before its date of initial adoption, the lessee shall, on the date of initial adoption,measure the right-of-use asset and the lease liability respectively according to the original carrying valueof the assets acquired under finance lease and the finance lease payable.
For operating leases prior to the date of initial adoption, the Company measures lease liabilities atthe present value of the remaining lease payments discounted at the Company's incremental borrowingrate at the date of initial adoption, and measures right-of-use assets at an amount equal to lease liabilities,with necessary adjustments based on prepaid rent.
On the date of initial adoption, the Company shall test the impairment of right-of-use assets andcarry out corresponding accounting treatment in accordance with the aforesaid provisions on impairmentof long-term assets in this section.
The main impacts of the implementation of the new lease standards on the Company's financialstatements on 1 January 2021 are as follows:
| Item | Balance Sheet | ||
| 31 December 2020 | New lease standards adjustment impact | 1 January 2021 | |
| Right-of-use assets | 21,484,142.88 | 21,484,142.88 | |
| Current portion of non-current liabilities | 9,622,886.25 | 9,622,886.25 | |
| Lease liabilities | 11,861,256.63 | 11,861,256.63 | |
(2). Key changes in accounting estimates
□ Applicable √ Not applicable
(3). Adjustments to the financial statements at the beginning of the year of implementation of thenew lease standards for the first time since 2021
√ Applicable □ Not applicable
Consolidated Balance Sheet
Unit: RMB Currency: RMB
| Item | 31 December 2020 | 1 January 2021 | Adjustment number |
| Right-of-use assets | 21,484,142.88 | 21,484,142.88 | |
| Current portion of non-current liabilities | 9,622,886.25 | 9,622,886.25 | |
| Lease liabilities | 11,861,256.63 | 11,861,256.63 |
Explanation of adjustments of each item:
□ Applicable √ Not applicable
(4). Explanation of retroactive adjustment of previous comparative data for the first time since2021
□ Applicable √ Not applicable
45. Other information
√ Applicable □ Not applicable
Hedge accounting
1. The hedging relationship is classified into fair value hedge, cash flow hedge and hedge of netinvestment in foreign operations.
2. For hedging that meets the following conditions, hedging accounting methods are used to dealwith it: (1) The hedging relationship is only composed of qualified hedging instruments and hedgedinstruments; (2) At the beginning of hedging, the Company formally designated hedging instruments andhedged items, and prepared written documents on hedging relationship and risk management strategiesand risk management objectives of the Company engaged in hedging; (3) The hedging relationshipmeets the requirements of hedging effectiveness.
When the hedging meets the following conditions at the same time, the Company determines thatthe hedging relationship meets the requirements of hedging effectiveness: (1) There is an economicrelationship between the hedged item and the hedging instrument; (2) Credit risk does not play adominant role in the value changes caused by the economic relationship between hedged items andhedging instruments; (3) The hedging ratio of the hedging relationship is equal to the ratio of the numberof hedged items actually hedged by the Company to the actual number of hedging instruments, but doesnot reflect the imbalance of the relative weights of hedged items and hedging instruments.
The Company continuously evaluates whether the hedging relationship meets the hedgingeffectiveness requirements on and after the hedging start date. If the hedging relationship no longermeets the requirements of hedging effectiveness due to the hedging ratio, but the risk managementobjectives of the designated hedging relationship have not changed, the Company shall rebalance thehedging relationship.
3. Hedging accounting treatment
(1) Fair value hedge
1) Gain or loss arising from a hedging instrument shall be recorded in profit and loss of the currentperiod. If the hedging instrument is used to hedge a non-trading equity instrument (or a component
thereof) that is chosen to be measured at fair value and whose changes are included in othercomprehensive income, the gains or losses arising from the hedging instrument are included in othercomprehensive income.
2) Gain or loss of a hedged item arising from hedged risk exposure shall be recorded in profit andloss of the current period and meanwhile the carrying value of the hedged item not measured at fairvalue shall be adjusted. If a hedged item is classified as financial assets (or a component thereof) that aremeasured at fair value and whose changes are recorded in other comprehensive income according toArticle 18 of Accounting Standards for Business Enterprises No.22-Recognition and Measurement ofFinancial Instruments, its gains or losses due to hedged risk exposure are recorded in profit and loss ofthe current period, and its carrying value has been measured at fair value and will not be adjusted. If thehedged item is a non-trading equity instrument investment (or a component thereof) that the Companychooses to measure at fair value and its changes are recorded in other comprehensive income, the gainsor losses arising from the hedged risk exposure are recorded in other comprehensive income, and itscarrying value has been measured at fair value and will not be adjusted.If a hedged item is an unrecognized firm commitment (or a component thereof), the cumulativechanges in the fair value arising from hedged risk after the designation of hedging relationship shall berecognized as an asset or liability, and the related gain or loss shall be recorded in profit and loss of therespective periods. In case of acquiring assets or bearing liabilities for performing a firm commitment,the initially recognized amount of the assets or liabilities shall be adjusted to include the cumulativechanges in the fair value of the recognized hedged item.If a hedged item is a financial instrument (or a component thereof) at measured amortized cost, theadjustment to the carrying value of the hedged item shall be amortized based on the actual interest raterecalculated on the commencement date of amortization and recorded in profit and loss of the currentperiod. If a hedged item is classified as financial assets (or a component thereof) that are measured atfair value and whose changes are recorded in other comprehensive income according to Article 18 ofAccounting Standards for Business Enterprises No.22-Recognition and Measurement of FinancialInstruments, cumulative recognized hedging gains or losses are amortized in the same manner andrecorded in profit and loss of the current period, but the carrying value of financial assets (or theircomponents) is not adjusted.
(2) Cash flow hedge
1) The part of the gain or loss of the hedging instrument that belongs to the effective hedging isincluded in the other comprehensive income as a reserve for cash flow hedges, and the invalid part isincluded in profit and loss of the current period. The amount of reserve for cash flow hedges isrecognized as the absolute amount of the lower of the following two items: A. The cumulative gains orlosses of hedging instruments since hedging; B. The cumulative change in the present value of theestimated future cash flows of the hedged item since hedging.
2) If a hedged item is a forecast transaction and the forecast transaction leads the Company tosubsequently recognize a non-financial asset or non-financial liability, or the forecast transaction of thenon-financial asset or non-financial liability forms a recognized commitment to which fair value hedgeaccounting is applicable, the original amount of reserve for cash flow hedges recognized in othercomprehensive income shall be transferred out and recorded in the initially recognized amount of suchnon-financial asset or non-financial liability.
3) For other cash flow hedges, the amount of reserve for cash flow hedges originally included inother comprehensive income is transferred out during the same period when the hedged expectedtransaction affects the profit and loss, and is recorded in the profit and loss of the current profit.
(3) Net investment hedge in a foreign operation
The part of the gains or losses formed by hedging instruments that belong to effective hedging isrecognized as other comprehensive income, and when disposing of foreign operations, it is transferredout and recorded in the profit and loss of the current profit. The part of the gains or losses resulting fromhedging instruments that belong to invalid hedging shall be recorded in profit and loss of the currentperiod.VI Taxation
1. Main taxes and tax rates
Major types of taxes and tax rates
√ Applicable □ Not applicable
| Tax | Tax basis | Tax rate |
| VAT | Revenue from commodity sales and taxable services calculated according to the tax law are the basic calculation of output tax. After deducting the amount of input tax which is allowed to be deducted in the current period, the difference is the VAT payable. | 13%, 9%, 6%, 5% [Note 1] |
| Real estate tax | Ad valorem tax: levied at 1.2% of the remaining value after deducting 30% from the original value of the housing property; Tax levied from rent: levied at 12% of the rental income. | 1.2%, 12% |
| Urban maintenance and construction tax | Turnover tax paid | 5%, 7% [Note 2] |
| Educational fee | Turnover tax paid | 3% |
| Local educational fee | Turnover tax paid | By 2% |
| Enterprise income tax | Amount of taxable income | 25%, 20%, 15%, 8.25% |
[Note 1] The tax of the Company's main products is levied at the tax rate of 13%, and VAT ofinterest income is levied at the tax rate of 6%; VAT of the real estate rental income of subsidiariesBanmen Electric Appliance and Shanghai Gongniu is levied at a tax rate of 5% according to the simplemethod; VAT of Lingbo Gongniu's real estate rental income is partly levied at a tax rate of 5% andpartly at 9% according to the simple method.
[Note 2] Electric Sales is levied at a tax rate of 7%, and other companies at a tax rate of 5%Explanation of disclosure if different income tax rates apply to different corporate taxpayers
√ Applicable □ Not applicable
| Name of taxpayer | Income tax rate (%) |
| The Company | 15 |
| Ningbo Gongniu | 15 |
| Gongniu Photoelectric | 15 |
| Gongniu Digital | 15 |
| Bull HK | 8.25 |
| Xingluo Trading | 20 |
| Other taxpayers except the above | 25 |
2. Tax concessions
√ Applicable □ Not applicable
1. According to the Notice on Publishing the List of High-tech Enterprises in Ningbo in 2019(YGQRL [2020] No.1) issued by the Leading Group for the Identification and Management of High-techEnterprises in Ningbo on 15 January 2020, the Company was identified as a high-tech enterprise inNingbo in 2019, and its qualification is valid for 3 years. From 2019 to 2021, the Company enjoys apreferential corporate income tax rate of 15%.
2. According to the Notice on Publishing the List of High-tech Enterprises in Ningbo in 2020(YGQRL [2020] No.1) issued by Beilun District Science and Technology Bureau of Ningbo on 15January 2021, Gongniu Digital was recognized as a high-tech enterprise in Ningbo in 2020, and itsqualification is valid for 3 years. From 2020 to 2022, Gongniu Digital enjoys a preferential corporateincome tax rate of 15%.
3. According to the Notice on Publishing the List of High-tech Enterprises in Ningbo in 2021 issuedby Beilun District Science and Technology Bureau of Ningbo on 19 January 2022, Ningbo Gongniu andGongniu Photoelectric were recognized as high-tech enterprises in Ningbo in 2020, and theirqualification is valid for 3 years. From 2021 to 2023, Ningbo Gongniu and Gongniu Photoelectric enjoya preferential corporate income tax rate of 15%.
4. In accordance with the Notice on Implementing Inclusive Tax Credit Policies for Small andMicro Enterprises (C.SH. [2019] No. 13) issued by the Ministry of Finance and the State TaxationAdministration and the Announcement on Issues Related to Implementing Inclusive Income TaxReduction and Exemption Policy for Small Low-profit Enterprises (State Administration of TaxationAnnouncement No. 2 in 2019) issued by the State Administration of Taxation, from 1 January 2019 to31 December 2021, the annual taxable revenue of small low-profit enterprises with a value of less thanRMB1 million (including RMB1 million) shall be included in the taxable revenue at a reduced rate of25%, and the corporate revenue tax shall be levied at the tax rate of 20%. The part that the annualtaxable revenue exceeds RMB1 million but not more than RMB3 million shall be included in the taxablerevenue at a reduced rate of 50%, and the corporate revenue tax shall be levied at the tax rate of 20%.According to the Announcement on the Implementation of Preferential Income Tax Policies for Small-and Micro-sized Enterprises and Individual Industrial and Commercial Entities (No. 12 of 2021) issuedby the Ministry of Finance and the State Taxation Administration, from 1 January 2021 to 31 December2022, the portion of the annual taxable income of small- and micro-sized enterprises not exceedingRMB1 million, the corporate income tax will be levied by half on the basis of the preferential policiesstipulated in Article 2 of the Tax Credit Policies for Small and Micro Enterprises (C.SH. [2019] No. 13)issued by the Ministry of Finance and the State Taxation Administration.
Xingluo Trading meets the recognition criteria of small low-profit enterprises, and pays corporateincome tax at the preferential tax rate of small low-profit enterprises.
3. Other information
□ Applicable √ Not applicable
VII Notes to the Consolidated Financial Statements
1. Monetary assets
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Cash on hand | ||
| Bank deposits | 4,230,383,599.91 | 3,659,966,981.92 |
| Other monetary assets | 87,372,876.35 | 80,072,357.23 |
| Interest receivable | 59,472,080.48 | 12,818,522.27 |
| Total | 4,377,228,556.74 | 3,752,857,861.42 |
| Of which: Total amount deposited overseas | 217,966.13 | 267,996.52 |
Other notes:
The closing balance of other monetary assets includes futures margin of RMB25,988,465.80, cashdeposits for L/G of RMB6,654,782.17, bank acceptance margin of RMB2,333,774.75, and accountmargin for third-party payment platform of RMB63,000.00.
2. Held-for-trading financial assets
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Financial assets at fair value through profit or loss | 5,926,600,000.00 | 2,863,300,000.00 |
| Of which: | ||
| Banking WM products | 1,936,600,000.00 | 2,213,300,000.00 |
| Details of trust products | 1,120,000,000.00 | 650,000,000.00 |
| Asset management plan | 2,670,000,000.00 | |
| Securities return voucher | 200,000,000.00 | |
| Total | 5,926,600,000.00 | 2,863,300,000.00 |
Other notes:
√Applicable □Not applicable
(1) Description of held-for-trading financial assets with restrictions on realizationThe closing balance of held-for-trading financial assets includes closed-end wealth managementproducts worth RMB3,722,000,000.00.
(2) Details of banking wealth management products
| Item | Closing balance | Opening balance | Category |
| CMBC Tiantian Zengli | 372,000,000.00 | Non-principal-guaranteed floating income | |
| CMBC Fuzhu Bond, Automatically Renewed Public Wealth Management Products, with a Holding Period of 182 Days | 200,000,000.00 | Non-principal-guaranteed floating income | |
| 2020 Closed-end Net-value Private Placement Products of Bank of Ningbo | 200,000,000.00 | 950,000,000.00 | Non-principal-guaranteed floating income |
| Ningxin Semi-annual Regular Open Wealth Management Product No. 6 with Fixed Income of BNB Wealth Management Co., Ltd., Bank of Ningbo | 180,000,000.00 | Non-principal-guaranteed floating income |
| Ningxin One-year Regular Open Wealth Management Product No. 34 with Fixed Income of BNB Wealth Management Co., Ltd., Bank of Ningbo | 170,000,000.00 | Non-principal-guaranteed floating income | |
| CMBC Corporate Wealth Management Product Ririxin 80008 | 125,200,000.00 | Non-principal-guaranteed floating income | |
| Ningxin Closed Wealth Management Product No. 75 with Fixed Income of BNB Wealth Management Co., Ltd., Bank of Ningbo | 120,000,000.00 | Non-principal-guaranteed floating income | |
| CMBC Extraordinary Asset Management Daily Profit-increasing Wealth Management Products (Institutional Funds) | 100,000,000.00 | Non-principal-guaranteed floating income | |
| Ningxin Closed Wealth Management Product No. 183 with Fixed Income of BNB Wealth Management Co., Ltd., Bank of Ningbo | 100,000,000.00 | Non-principal-guaranteed floating income | |
| Ningxin One-year Regular Open Wealth Management Product No. 32 with Fixed Income of BNB Wealth Management Co., Ltd., Bank of Ningbo | 100,000,000.00 | Non-principal-guaranteed floating income | |
| "ABC Pay at Any Time" Open RMB Wealth Management Products of ABC Wealth Management | 92,500,000.00 | Non-principal-guaranteed floating income | |
| Everbright Cash A of Everbright Bank | 50,000,000.00 | Non-principal-guaranteed floating income | |
| 2021 Closed-end Net-value Private Placement Products of Bank of Ningbo | 50,000,000.00 | Non-principal-guaranteed floating income | |
| Ningxin Semi-annual Regular Open Wealth Management Product No. 1 with Fixed Income of BNB Wealth Management Co., Ltd., Bank of Ningbo | 50,000,000.00 | 100,000,000.00 | Non-principal-guaranteed floating income |
| ICBC "TLB" Net-value Wealth Management Products | 16,900,000.00 | 18,000,000.00 | Non-principal-guaranteed floating income |
| ABC "Golden Key, Anxin Profits 90 Days" RMB Wealth Management Products | 10,000,000.00 | Non-principal-guaranteed floating income | |
| ABC Huilifeng "2020 No. 4249 RMB Structured Deposit Products | 620,000,000.00 | Non-principal-guaranteed floating income |
| Customized for Corporates" | |||
| ABC "Golden Key, Anxin Express" Open RMB Wealth Management Products with Daily Profits Earning | 213,300,000.00 | Non-principal-guaranteed floating income | |
| Net-value Wealth Management Product No. 1 of Bank of Ningbo | 138,000,000.00 | Non-principal-guaranteed floating income | |
| CMBC Structural Deposits with Linked Interest Rate | 60,000,000.00 | Non-principal-guaranteed floating income | |
| Jingyao One-year Regular Open Wealth Management Product No. 1 with Fixed Income of BNB Wealth Management Co., Ltd., Bank of Ningbo | 50,000,000.00 | Non-principal-guaranteed floating income | |
| Intelligent Regular Wealth Management Product No. 11 of Bank of Ningbo | 50,000,000.00 | Non-principal-guaranteed floating income | |
| CCB "Qianyuan-Daily Profit Increase" RMB Wealth Management Products with Open-ended Asset Portfolio | 14,000,000.00 | Non-principal-guaranteed floating income | |
| Subtotal | 1,936,600,000.00 | 2,213,300,000.00 |
(3) Details of trust products
| Item | Closing balance | Opening balance | Category |
| Financial City Hongyu No. 1 of Lujiazui International Trust | 350,000,000.00 | 300,000,000.00 | Non-principal-guaranteed floating income |
| Xicheng Profit Increase - Fund Trust of Huaneng Guicheng Trust | 300,000,000.00 | Non-principal-guaranteed floating income | |
| Xinyue Fengli Series Collective Fund Trust Plan of Shanghai Trust | 240,000,000.00 | Non-principal-guaranteed floating income | |
| Everbright Securities Everbright Trust - Shengyuan Profit-increasing Bond Collective Fund Trust Plan | 200,000,000.00 | 50,000,000.00 | Non-principal-guaranteed floating income |
| Xinxiang Bond Investment Collective Fund Trust Plan of CITIC Trust | 30,000,000.00 | Non-principal-guaranteed floating income | |
| "Ruby" Safe and Stable Series Investment Fund Trust Plan of Shanghai Trust | 300,000,000.00 | Non-principal-guaranteed floating income | |
| Subtotal | 1,120,000,000.00 | 650,000,000.00 |
(4) Asset management plan
| Item | Closing balance | Opening balance | Category |
| Yuexiang No. 1 Collective Asset Management Plan of Everbright Securities Asset | 800,000,000.00 | Non-principal-guaranteed floating income |
| Management, Everbright Securities | |||
| Niannianwang Collective Asset Management Plan of Haitong Securities Asset Management | 400,000,000.00 | Non-principal-guaranteed floating income | |
| Huatai Zijin Collective Asset Management Plan of Huatai Securities | 400,000,000.00 | Non-principal-guaranteed floating income | |
| Yuxiang No. 1 Collective Asset Management Plan of Everbright Securities Asset Management, Everbright Securities | 250,000,000.00 | Non-principal-guaranteed floating income | |
| Yuxiang No. 2 Collective Asset Management Plan of Everbright Securities Asset Management, Everbright Securities | 220,000,000.00 | Non-principal-guaranteed floating income | |
| Yongxin Single Asset Management Plan of Yongxing Securities Asset Management, Yongxing Securities | 200,000,000.00 | Non-principal-guaranteed floating income | |
| Niannianwang No.88 Collective Asset Management Plan of Haitong Securities Asset Management | 150,000,000.00 | Non-principal-guaranteed floating income | |
| Financing Business, Debt Income Right Transfer and Forward Transfer Contract of Founder Securities | 100,000,000.00 | Non-principal-guaranteed floating income | |
| Everbright Sunshine Big Dipper Star No. 7 Collective Asset Management Plan of Everbright Securities | 90,000,000.00 | Non-principal-guaranteed floating income | |
| Everbright Sunshine Big Dipper Star No. 6 Collective Asset Management Plan of Everbright Securities | 60,000,000.00 | Non-principal-guaranteed floating income | |
| Subtotal | 2,670,000,000.00 |
(5) Securities return voucher
| Item | Closing balance | Opening balance | Category |
| Xingdong Series Automatically-redeemed Floating Return Voucher No. 65 of Industrial Securities (CSI 500 Long) | 50,000,000.00 | Principal-guaranteed floating income | |
| Return Voucher "JinTianli" No. D184 of Founder Securities | 50,000,000.00 | Principal-guaranteed floating income | |
| Guangjing Series Return Voucher No. 30 of | 50,000,000.00 | Principal-guaranteed floating income |
| Everbright Securities | |||
| Xingzhi Series Dansha Floating Return Voucher No. 107of Industrial Securities (Ningbo) (CSI 500 Long) | 50,000,000.00 | Principal-guaranteed floating income | |
| Subtotal | 200,000,000.00 |
3. Derivative financial assets
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Hedge instruments - Commodity future contract | 3,613,050.00 | 27,159,170.00 |
| Total | 3,613,050.00 | 27,159,170.00 |
Other notes:
The Company hedged raw materials such as copper and plastic particles purchased, performedaccounting treatment as cash flow hedges, and recorded the profit on the book in the derivative financialassets.
4. Notes receivable
(1). Notes receivable listed by category
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance bill | ||
| Commercial acceptance bill | 750,723.35 | |
| Total | 750,723.35 |
(2). Notes receivable pledged by the Company at the end of the period
□Applicable √Not applicable
(3). Notes receivable endorsed by the Company or discounted and not due on the balance sheet
date at the end of the period
□Applicable √Not applicable
(4). Notes transferred to accounts receivable because the drawer failed to execute the contract or
agreement at the end of the period
□Applicable √Not applicable
(5). Classified disclosure based on the bad debt provision method
√Applicable □Not applicable
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Carrying balance | Bad debt provision | Carrying value | Carrying balance | Bad debt provision | Carrying value | |||||
| Amount | Proportion (%) | Amount | Accrued proportion (%) | Amount | Proportion (%) | Amount | Accrued proportion (%) | |||
| Bad debt provision accrued by item | 361,810.71 | 31.41 | 361,810.71 | 100.00 | ||||||
| Of which: | ||||||||||
| Bank acceptance bill | ||||||||||
| Trade acceptance | 361,810.71 | 100.00 | 361,810.71 | 100.00 | ||||||
| Bad debt provision accrued by portfolio | 790,235.11 | 68.59 | 39,511.76 | 5.00 | 750,723.35 | |||||
| Of which: | ||||||||||
| Bank acceptance bill | ||||||||||
| Trade acceptance | 790,235.11 | 100.00 | 39,511.76 | 5.00 | 750,723.35 | |||||
| Total | 1,152,045.82 | / | 401,322.47 | / | 750,723.35 | / | / | |||
Bad debt provision accrued by item:
√Applicable □Not applicable
Unit: RMB
| Name | Closing balance | |||
| Carrying balance | Bad debt provision | Accrued proportion (%) | Reason for accruing | |
| Tianjin Qirun Real Estate Development Co., Ltd. | 150,000.00 | 150,000.00 | 100.00 | Expected to be unrecoverable |
| Kaiping Fulin No.2 Textile & Garment Co., Ltd. | 135,456.06 | 135,456.06 | 100.00 | Expected to be unrecoverable |
| Dongguan Rongda Real Estate Development Co., Ltd. | 50,885.73 | 50,885.73 | 100.00 | Expected to be unrecoverable |
| Hainan Huafeng Huarui Industrial Co., Ltd. | 25,468.92 | 25,468.92 | 100.00 | Expected to be unrecoverable |
| Total | 361,810.71 | 361,810.71 | 100.00 | / |
Notes to bad debt provision accrued by item:
□Applicable √Not applicable
Bad debt provision accrued by portfolio:
√Applicable □Not applicable
Item for which bad debt provision is accrued by portfolio: Trade acceptance
Unit: RMB
| Name | Closing balance | ||
| Notes receivable | Bad debt provision | Accrued proportion (%) | |
| Trade acceptance portfolio | 790,235.11 | 39,511.76 | 5.00 |
| Total | 790,235.11 | 39,511.76 | 5.00 |
Criteria and explanation of bad debt provision accrued by portfolio
□Applicable √Not applicable
To accrue bad debt provision under the expected general model of credit loss, please refer to thedisclosure of other receivables:
□Applicable √Not applicable
(6). Status of bad debt provision
√Applicable □Not applicable
Unit: RMB
| Category | Opening balance | Changes for the current period | Closing balance | ||
| Accrued amount | Reversed or recovered | Charged-off or written-off | |||
| Bad debt provision accrued by item | 361,810.71 | 361,810.71 | |||
| Bad debt provision accrued by portfolio | 39,511.76 | 39,511.76 | |||
| Total | 401,322.47 | 401,322.47 |
Of which significant amount of recovered or transferred-back bad debt provision for the current period:
□Applicable √Not applicable
(7). Written-off notes receivable for the current period
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
5. Accounts receivable
(1). Disclosure by aging
√Applicable □Not applicable
Unit: RMB
| Aging | Closing carrying amount |
| Within one year | |
| Of which: Sub-items within one year | |
| Subtotal within one year | 229,304,992.42 |
| 1 to 2 years | 1,436,567.23 |
| 2 to 3 years | 254,179.91 |
| Total | 230,995,739.56 |
(2). Classified disclosure based on the bad debt provision method
√Applicable □Not applicable
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Carrying balance | Bad debt provision | Carrying value | Carrying balance | Bad debt provision | Carrying value | |||||
| Amount | Proportion (%) | Amount | Accrued proportion (%) | Amount | Proportion (%) | Amount | Accrued proportion (%) | |||
| Bad debt provision accrued by item | ||||||||||
| Bad debt provision accrued by portfolio | 230,995,739.56 | 100.00 | 11,735,996.31 | 5.08 | 219,259,743.25 | 193,692,531.23 | 100.00 | 9,763,917.29 | 5.04 | 183,928,613.94 |
| Total | 230,995,739.56 | 100.00 | 11,735,996.31 | 5.08 | 219,259,743.25 | 193,692,531.23 | 100.00 | 9,763,917.29 | 5.04 | 183,928,613.94 |
Bad debt provision accrued by item:
□Applicable √Not applicable
Bad debt provision accrued by portfolio:
√Applicable □Not applicable
Unit: RMB
| Name | Closing balance | ||
| Accounts receivable | Bad debt provision | Accrued proportion (%) | |
| Within one year | 229,304,992.42 | 11,465,249.63 | 5.00 |
| 1 to 2 years | 1,436,567.23 | 143,656.72 | 10.00 |
| 2 to 3 years | 254,179.91 | 127,089.96 | 50.00 |
| Total | 230,995,739.56 | 11,735,996.31 | 5.08 |
Criteria and explanation of bad debt provision accrued by portfolio:
□Applicable √Not applicable
To accrue bad debt provision under the expected general model of credit loss, please refer to thedisclosure of other receivables:
□Applicable √Not applicable
(3). Status of bad debt provision
√Applicable □Not applicable
Unit: RMB
| Category | Opening balance | Changes for the current period | Closing balance | |||
| Accrued amount | Reversed or recovered | Charged-off or written-off | Other changes | |||
| Bad debt provision accrued by portfolio | 9,763,917.29 | 2,796,678.02 | 824,599.00 | 11,735,996.31 | ||
| Total | 9,763,917.29 | 2,796,678.02 | 824,599.00 | 11,735,996.31 | ||
Of which significant amount of recovered or transferred-back bad debt provision for the current period:
□Applicable √Not applicable
(4). Status of written-off accounts receivable for the current period
√Applicable □Not applicable
Unit: RMB
| Item | Written-off amount |
| Written-off accounts receivable | 824,599.00 |
Of which the writing-off of significant accounts receivable
□Applicable √Not applicable
Notes to written-off accounts receivable:
□Applicable √Not applicable
(5). Status of accounts receivable of the top five closing balances by the parties in arrears
√Applicable □Not applicable
Unit: RMB
| Name of entity | Closing balance | Proportion in total closing balances of accounts receivable (%) | Closing balance of bad debt provision |
| Beijing Jingdong Century Trading Co., Ltd. | 90,004,162.29 | 38.96 | 4,500,208.11 |
| ALPHA.LTD | 38,031,684.76 | 16.46 | 1,901,584.24 |
| BELKIN INTERNATIONAL, INC. | 13,364,748.07 | 5.79 | 668,237.40 |
| Zhejiang TMALL Technology Co., Ltd. | 12,454,042.05 | 5.39 | 622,702.10 |
| Beijing Jingdong Yaohong Trading Co., Ltd. | 7,934,433.33 | 3.43 | 396,721.67 |
| Total | 161,789,070.50 | 70.04 | 8,089,453.52 |
(6). Accounts receivable derecognized due to transfers of financial assets
□Applicable √Not applicable
(7). Amount of assets and liabilities formed due to transfer of accounts receivable and continuousinvolvement
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
6. Receivables financing
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance bill | 927,023.00 | 161,562.83 |
| Total | 927,023.00 | 161,562.83 |
Increase or decrease of receivables financing and changes in fair value for the current period:
□Applicable √Not applicable
To accrue bad debt provision under the expected general model of credit loss, please refer to thedisclosure of other receivables:
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
7. Prepayments
(1). Prepayments listed by aging
√Applicable □Not applicable
Unit: RMB
| Aging | Closing balance | Opening balance | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within one year | 28,765,116.10 | 98.71 | 34,254,737.26 | 98.68 |
| 1 to 2 years | 319,248.90 | 1.10 | 273,025.05 | 0.79 |
| 2 to 3 years | 18,358.00 | 0.06 | 183,855.00 | 0.53 |
| Over 3 years | 37,500.00 | 0.13 | ||
| Total | 29,140,223.00 | 100.00 | 34,711,617.31 | 100.00 |
(2). Status of the top five advance payments in the closing balances by prepaid subject
√Applicable □Not applicable
| Name of entity | Closing balance | Proportion in total closing balances of prepayments (%) |
| Jiangxi Chishuo Technology Co., Ltd. | 4,445,822.06 | 15.26 |
| Guangxi Jingdong Xinjie E-commerce Co., Ltd. | 3,349,855.52 | 11.50 |
| Hangzhou Fan Jia Technology Co., Ltd. | 3,241,422.52 | 11.12 |
| Hangzhou Alimama Software Service Co., Ltd. | 1,549,790.32 | 5.32 |
| Jiangsu Jingdong Information Technology Co., Ltd. | 962,098.31 | 3.30 |
| Total | 13,548,988.73 | 46.50 |
Other notes:
□Applicable √Not applicable
8. Other receivables
List of items
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividends receivable | ||
| Other receivables | 195,924,505.99 | 126,043,394.07 |
| Total | 195,924,505.99 | 126,043,394.07 |
Other notes:
□Applicable √Not applicable
Interest receivable
(1). Category of interest receivables
□Applicable √Not applicable
(2). Significant overdue interest
□Applicable √Not applicable
(3). Status of accrued bad debt provision
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
Dividends receivable
(1). Dividends receivable
□Applicable √Not applicable
(2). Significant dividends receivable aged over one year
□Applicable √Not applicable
(3). Status of accrued bad debt provision
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
Other receivables
(1). Disclosure by aging
√Applicable □Not applicable
Unit: RMB
| Aging | Closing carrying amount |
| Within one year | |
| Of which: Sub-items within one year | |
| Subtotal within one year | 107,279,727.87 |
| 1 to 2 years | 114,836,517.79 |
| 2 to 3 years | 3,311,797.07 |
| Over 3 years | 4,841,063.05 |
| Total | 230,269,105.78 |
(2). Classification by nature of payments
√Applicable □Not applicable
Unit: RMB
| Nature | Closing carrying amount | Opening carrying amount |
| Call money | 111,000,000.00 | 110,407,671.23 |
| Guaranteed deposit | 101,781,134.68 | 7,024,541.50 |
| Housing loan for employees | 16,817,779.29 | 19,980,032.65 |
| Refund of tax for export receivable | 1,087,066.88 | |
| Others | 670,191.81 | 440,120.15 |
| Total | 230,269,105.78 | 138,939,432.41 |
(3). Status of accrued bad debt provision
√Applicable □Not applicable
Unit: RMB
| Bad debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit loss in the next 12 months | Expected loss for the entire duration (without credit impairment) | Expected credit losses for the entire duration (with credit impairment) | ||
| Balance as at January 1, 2021 | 6,113,832.87 | 757,910.65 | 6,024,294.82 | 12,896,038.34 |
| Balance on January 1, |
| 2021 for the current period | ||||
| - Transferred to Stage 2 | -5,741,825.89 | 5,741,825.89 | ||
| - Transferred to Stage 3 | -815,286.01 | 815,286.01 | ||
| - Transferred back to Stage 2 | ||||
| - Transferred back to Stage 1 | ||||
| Amount accrued for the current period | 4,991,979.44 | 16,799,201.25 | -242,619.24 | 21,548,561.45 |
| Amount transferred-back for the current period | ||||
| Amount charged-off for the current period | ||||
| Amount written-off for the current period | 100,000.00 | 100,000.00 | ||
| Other changes | ||||
| Balance as at 31 December 2021 | 5,363,986.42 | 22,483,651.78 | 6,496,961.59 | 34,344,599.79 |
Notes to significant changes in the carrying amount of other receivables for which changes in the lossreserve for the current period occurred:
□Applicable √Not applicable
The amount of bad debt provision for the current period and the basis for assessing whether the creditrisk of financial instruments has increased significantly:
□Applicable √Not applicable
(4). Status of bad debt provision
√Applicable □Not applicable
Unit: RMB
| Category | Opening balance | Changes for the current period | Closing balance | |||
| Accrued amount | Reversed or recovered | Charged-off or written-off | Other changes | |||
| Bad debt provision accrued by item | 22,000,000.00 | 22,000,000.00 | ||||
| Bad debt provision accrued by portfolio | 12,896,038.34 | -451,438.55 | 100,000.00 | 12,344,599.79 | ||
| Total | 12,896,038.34 | 21,548,561.45 | 100,000.00 | 34,344,599.79 | ||
Of which the bad debt provision recovered or transferred-back with significant amount during theReporting Period:
□Applicable √Not applicable
(5). Status of written-off other receivable for the current period
√Applicable □Not applicable
Unit: RMB
| Item | Written-off amount |
| Written-off other receivables | 100,000.00 |
Status of written-off other significant receivables:
□Applicable √Not applicable
Notes of writing-off of other receivables:
□Applicable √Not applicable
(1). Status of other receivables of the top five closing balances by the parties in arrears
√Applicable □Not applicable
Unit: RMB
| Name of entity | Nature | Closing balance | Aging | Proportion in total closing balances of other receivables (%) | Bad debt provision Closing balance |
| Sunac Real Estate Group [Notes] | Call money | 110,000,000.00 | 1 to 2 years | 47.77 | 22,000,000.00 |
| Interest on call money | 1,000,000.00 | Within one year | 0.43 | 50,000.00 | |
| Shanghai Caohejing Development Zone Zhaoxiang Emerging Industry Economic Development Co., Ltd. | Guaranteed deposit | 87,400,852.00 | Within one year | 37.96 | 4,370,042.60 |
| Cixi Public Resources Trading Center | Guaranteed deposit | 8,700,000.00 | Within one year | 3.78 | 435,000.00 |
| Administrative Committee of Zhejiang Cixi Binhai Economic Development Zone | Guaranteed deposit | 1,000,000.00 | Within one year | 0.43 | 50,000.00 |
| 250,000.00 | Over 3 years | 0.11 | 250,000.00 | ||
| Beijing Jingdong Century Trading Co., Ltd. | Guaranteed deposit | 800,000.00 | Within one year | 0.35 | 40,000.00 |
| Total | / | 209,150,852.00 | / | 90.83 | 27,195,042.60 |
(6). Accounts receivable involving government grants
□Applicable √Not applicable
(7). Other receivables derecognized due to transfers of financial assets
□Applicable √Not applicable
(8). Amount of assets and liabilities formed due to transfer of other receivables and continuous
involvement
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
9. Inventories
(1). Classification of inventories
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Carrying balance | Shrinkage reserves for inventories/depreciation reserves for contract performance costs | Carrying amount | Carrying balance | Shrinkage reserves for inventories/depreciation reserves for contract performance costs | Carrying amount | |
| Raw materials | 124,009,445.42 | 124,009,445.42 | 119,277,030.91 | 119,277,030.91 | ||
| Goods in process | 163,087,929.27 | 163,087,929.27 | 121,129,823.11 | 121,129,823.11 | ||
| Merchandise on hand | 893,826,248.24 | 9,387,709.01 | 884,438,539.23 | 416,382,203.12 | 6,675,595.59 | 409,706,607.53 |
| Merchandise shipped | 130,428,496.71 | 130,428,496.71 | 83,307,664.02 | 83,307,664.02 | ||
| Commissioned products | 57,323,866.45 | 57,323,866.45 | 39,638,756.02 | 39,638,756.02 | ||
| Packaging material | 7,400,437.04 | 7,400,437.04 | 6,210,944.73 | 6,210,944.73 | ||
| Low-value consumables | 10,298,408.48 | 10,298,408.48 | 8,969,233.99 | 8,969,233.99 | ||
| Total | 1,386,374,831.61 | 9,387,709.01 | 1,376,987,122.60 | 794,915,655.90 | 6,675,595.59 | 788,240,060.31 |
(2). Shrinkage reserves for inventories/depreciation reserves for contract performance costs
√Applicable □Not applicable
Unit: RMB
| Item | Opening balance | Increased amount for the current period | Decreased amount for the current period | Closing balance | ||
| Accrued amount | Others | Transferred-back or charged-off | Others | |||
| Merchandise on hand | 6,675,595.59 | 7,512,895.82 | 4,800,782.40 | 9,387,709.01 | ||
| Total | 6,675,595.59 | 7,512,895.82 | 4,800,782.40 | 9,387,709.01 | ||
Other notes:
The specific basis for determining the net realizable value, the reasons for the shrinkage reserves fortransferred-back or charged-off inventories for the current period
| Item | The specific basis for determining the net realizable value | The reasons for shrinkage reserves for transferred-back inventories for the current period | The reasons for shrinkage reserves for charged-off inventories for the current period |
| Merchandise on hand | The net realizable value is determined by estimated selling price | For the current period, the inventories, which accrued shrinkage |
| deducting the estimated selling expense and the relevant taxes | reserves, have been sold |
(3). Notes of the amount of capitalized borrowing cost in the closing balance of inventories
□Applicable √Not applicable
(4). Notes of the amount of contract performance costs amortized for the current period
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
10. Contract assets
(1). Status of contract assets
□Applicable √Not applicable
(2). The amount and reason for significant changes in carrying value during the Reporting Period
□Applicable √Not applicable
(3). Status of depreciation reserves accrued for contract assets for the current period
□Applicable √Not applicable
To accrue bad debt provision under the expected general model of credit loss, please refer to thedisclosure of other receivables:
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
11. Assets held for sale
□Applicable √Not applicable
12. Current portion of non-current assets
□Applicable √Not applicable
Significant debt investments and other debt investments at the end of the period:
□Applicable √Not applicable
13. Other current assets
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Contract acquisition costs | ||
| Refund costs receivable | ||
| Structural bank deposits | 1,114,551,150.68 | 2,726,587,945.21 |
| Input VAT to be credited | 10,534,966.75 | 3,721,828.78 |
| Advance payment of enterprise income tax | 1,434,781.01 | 11,080,165.39 |
| Total | 1,126,520,898.44 | 2,741,389,939.38 |
14. Debt investments
(1). Status of debt investments
□Applicable √Not applicable
(2). Significant debt investments at the end of the period
□Applicable √Not applicable
(3). Status of accrued depreciation reserves
□Applicable √Not applicable
The amount of the depreciation reserves for the current period and the basis for assessing whether thecredit risk for financial instruments has increased significantly
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
15. Other debt investments
(1). Status of other debt investments
□Applicable √Not applicable
(2). Significant other debt investments at the end of the period
□Applicable √Not applicable
(3). Status of accrued depreciation reserves
□Applicable √Not applicable
The amount of the depreciation reserves for the current period and the basis for assessing whether thecredit risk for financial instruments has increased significantly
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
16. Long-term receivables
(1). Status of long-term receivables
□Applicable √Not applicable
(2). Status of accrued bad debt provision
□Applicable √Not applicable
The amount of the bad debt reserves for the current period and the basis for assessing whether the creditrisk for financial instruments has increased significantly
□Applicable √Not applicable
(3). Long-term receivables derecognized due to transfers of financial assets
□Applicable √Not applicable
(4). Amount of assets and liabilities formed due to transfer of long-term receivables andcontinuous involvement
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
17. Long-term equity investments
□Applicable √Not applicable
18. Other equity investments
(1). Status of other equity investments
□Applicable √Not applicable
(2). Status of an equity investment that is not held for trading
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
19. Other non-current financial assets
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
20. Investment property
Measurement model of investment propertyNot applicable
21. Fixed assets
List of items
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 1,489,874,874.31 | 1,180,444,953.99 |
| Fixed assets liquidation | 3,858,246.51 | 1,338,464.52 |
| Total | 1,493,733,120.82 | 1,181,783,418.51 |
Other notes:
□Applicable √Not applicable
Fixed assets
(1). Status of fixed assets
√Applicable □Not applicable
Unit: RMB
| Item | Houses and buildings | Machinery equipment | Means of transportation | Electronic and other equipment | Fixed assets fixtures | Total |
| I. Original Carrying Value: | ||||||
| 1. Opening balance | 828,101,501.88 | 848,155,548.70 | 33,262,974.36 | 112,720,068.52 | 57,954,323.61 | 1,880,194,417.07 |
| 2. Increased amount for the current period | 357,359,333.97 | 176,023,514.99 | 4,930,975.31 | 18,463,495.63 | 4,434,459.19 | 561,211,779.09 |
| (1) Purchase | 8,319,491.27 | 42,340,120.21 | 4,930,975.31 | 5,211,659.58 | 1,702,184.56 | 62,504,430.93 |
| (2) Transfer-in of construction in progress | 349,039,842.70 | 133,683,394.78 | 13,251,836.05 | 2,732,274.63 | 498,707,348.16 | |
| 3. Decreased amount for the current period | 7,218,308.80 | 73,931,026.90 | 5,482,643.10 | 5,773,217.88 | 92,405,196.68 | |
| (1) Disposed or scrapped | 7,218,308.80 | 73,931,026.90 | 5,482,643.10 | 5,773,217.88 | 92,405,196.68 | |
| (2) Other decreases | ||||||
| 4. Closing balance | 1,178,242,527.05 | 950,248,036.79 | 32,711,306.57 | 125,410,346.27 | 62,388,782.80 | 2,349,000,999.48 |
| II. Accumulated Depreciation | ||||||
| 1. Opening balance | 192,680,701.18 | 353,172,524.37 | 28,268,035.05 | 92,501,359.88 | 33,126,842.60 | 699,749,463.08 |
| 2. Increased amount for the current period | 53,127,442.69 | 120,515,881.73 | 5,416,662.87 | 18,428,269.98 | 8,935,983.90 | 206,424,241.17 |
| (1) Accrued amount | 53,127,442.69 | 120,515,881.73 | 5,416,662.87 | 18,428,269.98 | 8,935,983.90 | 206,424,241.17 |
| 3. Decreased amount for the current period | 1,013,624.27 | 44,264,126.81 | 4,875,103.40 | 5,638,952.04 | 55,791,806.52 | |
| (1) Disposed | 1,013,624.27 | 44,264,126.81 | 4,875,103.40 | 5,638,952.04 | 55,791,806.52 | |
| or scrapped | ||||||
| (2) Other decreases | ||||||
| 4. Closing balance | 244,794,519.60 | 429,424,279.29 | 28,809,594.52 | 105,290,677.82 | 42,062,826.50 | 850,381,897.73 |
| III. Depreciation Reserves | ||||||
| 1. Opening balance | ||||||
| 2. Increased amount for the current period | 8,124,587.26 | 619,640.18 | 8,744,227.44 | |||
| (1) Accrued amount | 8,124,587.26 | 619,640.18 | 8,744,227.44 | |||
| 3. Decreased amount for the current period | ||||||
| (1) Disposed or scrapped | ||||||
| 4. Closing balance | 8,124,587.26 | 619,640.18 | 8,744,227.44 | |||
| IV. Carrying Value | ||||||
| 1. Closing carrying value | 933,448,007.45 | 512,699,170.24 | 3,901,712.05 | 19,500,028.27 | 20,325,956.30 | 1,489,874,874.31 |
| 2. Opening carrying value | 635,420,800.70 | 494,983,024.33 | 4,994,939.31 | 20,218,708.64 | 24,827,481.01 | 1,180,444,953.99 |
(2). Status of temporarily idle fixed assets
□Applicable √Not applicable
(3). Status of fixed assets obtained by finance lease
□Applicable √Not applicable
(4). Fixed assets rented out by operating lease
√Applicable □Not applicable
Unit: RMB
| Item | Closing carrying value |
| Houses and buildings | 2,705,236.81 |
| Subtotal | 2,705,236.81 |
(5). Status of fixed assets without certificate of title
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
Fixed assets liquidation
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Scrapped machinery equipment yet to be completely disposed | 3,858,246.51 | 1,338,464.52 |
| Total | 3,858,246.51 | 1,338,464.52 |
22. Construction in progress
List of items
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
Construction in progress
(1). Status of construction in progress
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Carrying balance | Depreciation reserves | Carrying amount | Carrying balance | Depreciation reserves | Carrying amount | |
| R&D center and headquarters base construction project | 73,430,650.25 | 73,430,650.25 | 3,208,264.20 | 3,208,264.20 | ||
| Base construction project for annual output of 180 million sets of LED lamps | 71,757,502.31 | 71,757,502.31 | 19,240,623.12 | 19,240,623.12 | ||
| Construction project for automation upgrading of annual output of 400 million sets of converters | 14,280,038.14 | 14,280,038.14 | 132,436,589.06 | 132,436,589.06 | ||
| Information construction project | 3,539,851.67 | 3,539,851.67 | 1,659,106.72 | 1,659,106.72 | ||
| Base construction project for annual output of 410 million sets of wall switches and sockets | 2,156,275.13 | 2,156,275.13 | 113,087,757.59 | 113,087,757.59 | ||
| Equipment to be installed | 28,504,645.70 | 28,504,645.70 | 3,772,450.17 | 3,772,450.17 | ||
| Other small projects | 4,695,173.77 | 4,695,173.77 | 4,725,865.28 | 4,725,865.28 | ||
| Total | 198,364,136.97 | 198,364,136.97 | 278,130,656.14 | 278,130,656.14 | ||
(2). Significant changes in the construction in progress for the current period
√Applicable □Not applicable
Unit: RMB
| Project | Budget | Opening balance | Increased amount for the current period | Amount of fixed assets transferred-in for the current period | Other decreased amount | Closing balance | Proportion of project investment to budget (%) | Job schedule | Accumulated amount of capitalized interest | Of which: Amount of capitalized interests for the current period | Capitalization rate of interest for the current period (%) | Source of fund |
| R&D center and headquarters base construction project | 708,225,600.00 | 3,208,264.20 | 71,438,099.85 | 1,215,713.80 | 73,430,650.25 | 10.55 | 10.55 | Fund raising | ||||
| Base construction project for annual output of 180 million sets of LED lamps | 743,810,500.00 | 19,240,623.12 | 83,949,551.08 | 31,432,671.89 | 71,757,502.31 | 13.87 | 13.87 | Fund raising | ||||
| Construction project for automation upgrading of annual output of 400 million sets of converters | 999,036,300.00 | 132,436,589.06 | 105,897,216.90 | 224,053,767.82 | 14,280,038.14 | 25.19 | 25.19 | Fund raising |
| Information construction project | 240,350,000.00 | 1,659,106.72 | 4,524,397.93 | 2,643,652.98 | 3,539,851.67 | 2.57 | 2.57 | Fund raising | ||||
| Base construction project for annual output of 410 million sets of wall switches and sockets | 1,204,528,600.00 | 113,087,757.59 | 52,456,993.84 | 163,388,476.30 | 2,156,275.13 | 21.75 | 21.75 | Fund raising | ||||
| Equipment to be installed | 3,772,450.17 | 91,552,886.44 | 66,820,690.91 | 28,504,645.70 | Equity fund | |||||||
| Other small projects | 4,725,865.28 | 9,121,682.95 | 9,152,374.46 | 4,695,173.77 | Equity fund | |||||||
| Total | 3,895,951,000.00 | 278,130,656.14 | 418,940,828.99 | 498,707,348.16 | 198,364,136.97 |
(3). Status of accrued depreciation reserves for construction in progress for the current
period
□Applicable √Not application
Other notes:
□Applicable √Not applicable
Engineering materials
(4). Status of engineering materials
□Applicable √Not applicable
23. Productive living assets
(1). Productive living assets measured at cost
□Applicable √Not applicable
(2). Productive living assets measured at fair value
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
24. Oil and gas assets
□Applicable √Not applicable
25. Right-of-use assets
√Applicable □Not applicable
Unit: RMB
| Item | Houses and buildings | Total |
| I. Original Carrying Value | ||
| 1. Opening balance | 21,484,142.88 | 21,484,142.88 |
| 2. Increased amount for the current period | 8,570,641.70 | 8,570,641.70 |
| Rented | 8,570,641.70 | 8,570,641.70 |
| 3. Decreased amount for the current period | ||
| Disposed amount | ||
| 4. Closing balance | 30,054,784.58 | 30,054,784.58 |
| II. Accumulated Depreciation | ||
| 1. Opening balance | ||
| 2. Increased amount for the current period | 11,244,984.87 | 11,244,984.87 |
| (1) Accrued amount | 11,244,984.87 | 11,244,984.87 |
| 3. Decreased amount for the current period | ||
| (1) Disposed amount | ||
| 4. Closing balance | 11,244,984.87 | 11,244,984.87 |
| III. Depreciation Reserves | ||
| 1. Opening balance | ||
| 2. Increased amount for the current period | ||
| (1) Accrued amount | ||
| 3. Decreased amount for the current period | ||
| (1) Disposed amount | ||
| 4. Closing balance | ||
| IV. Carrying Value | ||
| 1. Closing carrying value | 18,809,799.71 | 18,809,799.71 |
| 2. Opening carrying value | 21,484,142.88 | 21,484,142.88 |
Other notes:
The difference between the opening amount for the period and the year-end balance of theprevious year (December 31, 2020) is detailed in the notes of "Important Accounting Policies andAccounting Estimates" and "44. Changes in Significant Accounting Policies and AccountingEstimates" in the "Section 10 Financial Report" of the Annual Report.
26. Intangible assets
(1). Status of intangible assets
√Applicable □Not applicable
Unit: RMB
| Item | Land use right | Patent right | Non-patent technologies | Software | Patent and know-how | Total |
| I. Original Carrying Value | ||||||
| 1. Opening balance | 311,759,224.07 | 72,393,811.06 | 30,283,018.69 | 414,436,053.82 | ||
| 2. Increased amount for the current period | 12,324,352.31 | 12,324,352.31 | ||||
| (1) Purchase | 12,324,352.31 | 12,324,352.31 | ||||
| (2) Internal R&D | ||||||
| (3) Increase of business integration | ||||||
| (4) Transfer-in of construction in progress | ||||||
| 3. Decreased amount for the current period | 227,707.36 | 227,707.36 | ||||
| (1) Disposed amount | 227,707.36 | 227,707.36 | ||||
| 4. Closing balance | 311,759,224.07 | 84,490,456.01 | 30,283,018.69 | 426,532,698.77 | ||
| II. Accumulated Amortization | ||||||
| 1. Opening balance | 33,775,738.53 | 50,395,893.41 | 30,283,018.69 | 114,454,650.63 | ||
| 2. Increased amount for the current period | 6,176,756.89 | 10,281,457.79 | 16,458,214.68 | |||
| (1) Accrued amount | 6,176,756.89 | 10,281,457.79 | 16,458,214.68 | |||
| 3. Decreased amount for the | 149,809.02 | 149,809.02 | ||||
| current period | ||||||
| (1) Disposed amount | 149,809.02 | 149,809.02 | ||||
| 4. Closing balance | 39,952,495.42 | 60,527,542.18 | 30,283,018.69 | 130,763,056.29 | ||
| III. Depreciation Reserves | ||||||
| 1. Opening balance | ||||||
| 2. Increased amount for the current period | ||||||
| (1) Accrued amount | ||||||
| 3. Decreased amount for the current period | ||||||
| (1) Disposed amount | ||||||
| 4. Closing balance | ||||||
| IV. Carrying Value | ||||||
| 1. Closing carrying value | 271,806,728.65 | 23,962,913.83 | 295,769,642.48 | |||
| 2. Opening carrying value | 277,983,485.54 | 21,997,917.65 | 299,981,403.19 | |||
At the end of the period, the intangible assets formed through internal R&D of the Companyaccounted for 0.00% of the balance of intangible assets.
(2). Status of land use right without certificate of title
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
27. Development costs
□Applicable √Not applicable
28. Goodwill
(1). Original carrying value of goodwill
□Applicable √Not applicable
(2). Depreciation reserves for goodwill
□Applicable √Not applicable
(3). Information related to cash-generating units or groups of cash-generating units wheregoodwill is in
□Applicable √Not applicable
(4). Describe the goodwill depreciation testing process, key parameters (e.g., expect growth
rate during the forecast period when the present value of future cash flows, growth rateduring the stabilization period, profit margin, discount rate, forecast period, etc., ifapplicable) and the method of recognizing impairment losses of goodwill.
□Applicable √Not applicable
(5). Impact of the goodwill impairment test
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
29. Long-term prepaid expense
√Applicable □Not applicable
Unit: RMB
| Item | Opening balance | Increased amount for the current period | Amortization amount of the period | Other decreased amount | Closing balance |
| 2020 Special Talent Shareholding Plan | 3,150,000.00 | 26,592,932.00 | 6,701,548.01 | 5,290,548.00 | 17,750,835.99 |
| Total | 3,150,000.00 | 26,592,932.00 | 6,701,548.01 | 5,290,548.00 | 17,750,835.99 |
Other notes:
For details of the 2020 Special Talent Shareholding Plan, please refer to "5. Others" in "XIII.Share-based Payment" of "Section 10 Financial Report" of the Annual Report.
30. Deferred income tax assets/Deferred income tax liabilities
(1). Deferred income tax assets not offset
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred income tax Assets | Deductible temporary differences | Deferred income tax Assets | |
| Allowance for impairment losses on assets | ||||
| Unrealized profit of intra-company transaction | 131,943,914.81 | 32,868,900.61 | 105,549,134.11 | 26,374,103.51 |
| Deductible losses | ||||
| Discount on sale accrued in advance | 285,699,608.15 | 71,424,902.04 | 118,865,777.96 | 29,622,780.68 |
| Uncovered losses | 15,579,787.48 | 3,894,946.87 | ||
| Restricted share incentive scheme | 40,618,629.47 | 6,833,658.60 | 20,061,461.90 | 3,402,553.14 |
| Shrinkage reserves for inventories | 9,387,709.01 | 1,686,199.27 | 6,675,595.59 | 1,181,675.31 |
| Bad debt provision for accounts receivable | 11,005,073.06 | 2,741,024.17 | 9,763,917.29 | 2,360,617.77 |
| 2020 Special Talent Shareholding Plan | 5,569,298.01 | 901,685.09 | 410,000.00 | 66,500.00 |
| Total | 484,224,232.51 | 116,456,369.78 | 276,905,674.33 | 66,903,177.28 |
(2). Deferred income tax liabilities not offset
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred income tax LIABILITIES | Taxable temporary difference | Deferred income tax LIABILITIES | |
| Estimated added value of assets not under the same control | ||||
| Changes in the fair value of other debt investments | ||||
| Changes in the fair value of other equity investments | ||||
| Depreciation policy on fixed assets subject to tax variances | 309,268,738.92 | 50,024,829.68 | 246,146,941.29 | 38,154,381.04 |
| Gain and loss of hedge instrument included in the other comprehensive income | 1,021,158.47 | 255,289.62 | 38,494,957.72 | 9,623,739.43 |
| Total | 310,289,897.39 | 50,280,119.30 | 284,641,899.01 | 47,778,120.47 |
(3). Deferred income tax assets or liabilities listed by net debt after being offset
□Applicable √Not applicable
(4). Details of deferred income tax assets details were not confirmed
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Deductible temporary differences | 43,819,750.48 | 13,795,210.70 |
| Deductible losses | 46,483,443.12 | 11,515,440.62 |
| Total | 90,303,193.60 | 25,310,651.32 |
(5). Deductible losses from unrecognized deferred income tax assets will mature in thefollowing years
√Applicable □Not applicable
Unit: RMB
| Year | Closing amount | Opening amount | Remarks |
| 2025 | 11,515,440.62 | 11,515,440.62 | |
| 2026 | 34,968,002.50 | ||
| Total | 46,483,443.12 | 11,515,440.62 | / |
Other notes:
□Applicable √Not applicable
31. Other non-current assets
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Carrying balance | Depreciation reserves | Carrying amount | Carrying balance | Depreciation reserves | Carrying amount | |
| Contract acquisition | ||||||
| costs | ||||||
| Contract performance costs | ||||||
| Refund costs receivable | ||||||
| Contract assets | ||||||
| Prepayment for equipment acquisition | 21,722,939.50 | 21,722,939.50 | 43,400,700.00 | 43,400,700.00 | ||
| 2020 Special Talent Shareholding Plan | 27,355,319.00 | 27,355,319.00 | 46,400,000.00 | 46,400,000.00 | ||
| Prepayment for investment | 26,990,656.00 | 26,990,656.00 | ||||
| Total | 76,068,914.50 | 76,068,914.50 | 89,800,700.00 | 89,800,700.00 |
Other notes:
1. For details of the 2020 Special Talent Shareholding Plan, please refer to "5. Others" in "XIII.Share-based Payment” of "Section 10 Financial Report" of the Annual Report. 2. On August 18,2021, the Company signed the Equity Transfer Agreement with Dalitek Intelligent Technology(Shanghai) Inc. (hereinafter referred to as "Dalitek") and its shareholders BRIDGESELECTRONIC TECHNOLOGY CO., LTD. and Shanghai Houqi Investment Center (LimitedPartnership) and natural person shareholders Pan Xiaobin and Zhang Wenying, agreeing that 70%of the equity interests of the Company held by the shareholders be transferred at the price ofRMB91 million, the down payment of RMB63.7 million shall be made within 10 business daysafter the completion of the relevant procedures and the delivery of the assets, and the remainingequity transfer payment shall be made in three years in line with the completion of theperformance commitment. As at 13 December 2021, the Company had paid a total ofRMB26.9907 million for the equity transfer, which had not yet reached 50% of the amountpayable, so Dalitek was not included in the Company's 2021 consolidated financial statements. On21 January 2022, the Company made the remaining equity transfer payment of RMB36.7093million for the down payment, which completed the down payment for the equity transfer.
32. Short-term borrowings
(1). Classification of short-term borrowings
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Pledged loans | ||
| Mortgage loans | ||
| Guaranteed loans | 500,000,000.00 | |
| Unsecured loans | 500,000,000.00 | |
| Interest payable on short-term borrowings | 430,555.55 | 344,611.11 |
| Total | 500,430,555.55 | 500,344,611.11 |
(2). Status of short-term borrowings that have been overdue but not repaid
□Applicable √Not applicable
Of which, the status of significant overdue short-term borrowings that are not repaid is as follows:
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
33. Held-for-trading financial liabilities
□Applicable √Not applicable
34. Derivative financial liabilities
□Applicable √Not applicable
35. Notes payable
(1). List of notes payable
√Applicable □Not applicable
Unit: RMB
| Category | Closing balance | Opening balance |
| Trade acceptance | ||
| Bank acceptance bill | 2,333,774.75 | |
| Total | 2,333,774.75 |
The total amount of notes payable that has expired but remained unpaid at the end of the period isRMB0.00.
36. Accounts payable
(1). List of accounts payable
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Payment for goods | 1,580,297,065.42 | 1,206,190,690.42 |
| Payment for engineering equipment | 69,316,617.33 | 30,578,679.95 |
| Payment for expense | 52,072,881.39 | 49,053,096.34 |
| Total | 1,701,686,564.14 | 1,285,822,466.71 |
(2). Significant accounts payable aged over one year
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
37. Advances from customers
(1). List of advance receipts
□Applicable √Not applicable
(2). Significant advances from customers aged over one year
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
38. Contract liabilities
(1). Status of contract liabilities
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Advance receipt of payment for goods | 437,999,921.93 | 333,741,780.65 |
| Total | 437,999,921.93 | 333,741,780.65 |
(2). Significant changes in the amount of carrying value and the reason in the ReportingPeriod
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
39. Employee benefits payable
(1). List of employee benefits payable
√Applicable □Not applicable
Unit: RMB
| Item | Opening balance | Increase for the current period | Decrease for the current period | Closing balance |
| I. Short-term Employee Benefits | 238,790,661.64 | 1,678,352,557.29 | 1,645,835,739.01 | 271,307,479.92 |
| II. Post-employment Benefit - Defined Contribution Plan | 5,347,505.36 | 94,322,709.77 | 91,514,222.62 | 8,155,992.51 |
| III. Termination Benefits | 3,653,347.34 | 3,653,347.34 | ||
| IV. Other Benefits That Expire within One Year | ||||
| Total | 244,138,167.00 | 1,776,328,614.40 | 1,741,003,308.97 | 279,463,472.43 |
(2). List of short-term employee benefits
√Applicable □Not applicable
Unit: RMB
| Item | Opening balance | Increase for the current period | Decrease for the current period | Closing balance |
| I. Salary, Bonus, Allowance and Subsidy | 237,762,951.90 | 1,499,741,472.25 | 1,471,513,049.54 | 265,991,374.61 |
| II. Employee Benefits Cost | 53,064,392.19 | 53,064,392.19 | - | |
| III. Social Insurance Premiums | 916,967.74 | 59,994,623.21 | 55,728,192.64 | 5,183,398.31 |
| Of which: Medical insurance premiums | 653,849.91 | 55,521,502.58 | 51,356,500.41 | 4,818,852.08 |
| Work-related injury insurance premiums | 263,117.83 | 4,473,120.63 | 4,371,692.23 | 364,546.23 |
| Maternity insurance premiums | ||||
| IV. Housing Allowance | 110,742.00 | 43,832,256.05 | 43,810,291.05 | 132,707.00 |
| V. Labor Union Expense and Employee Education Budget | 21,719,813.59 | 21,719,813.59 | ||
| VI. Short-term Paid Absence | ||||
| VII. Short-term Profit Sharing Plan | ||||
| Total | 238,790,661.64 | 1,678,352,557.29 | 1,645,835,739.01 | 271,307,479.92 |
(3). List of defined contribution plan
√Applicable □Not applicable
Unit: RMB
| Item | Opening balance | Increase for the current period | Decrease for the current period | Closing balance |
| 1. Basic pension insurance | 5,163,110.86 | 91,093,851.01 | 88,379,820.80 | 7,877,141.07 |
| 2. Unemployment insurance premiums | 184,394.50 | 3,228,858.76 | 3,134,401.82 | 278,851.44 |
| 3. Supplementary pension payment | ||||
| Total | 5,347,505.36 | 94,322,709.77 | 91,514,222.62 | 8,155,992.51 |
Other notes:
□Applicable √Not applicable
40. Taxes and levies payable
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| VAT | 195,348,236.75 | 213,100,996.81 |
| Consumption tax | ||
| Business tax | ||
| Enterprise income tax | 305,914,943.40 | 195,359,429.80 |
| Personal income tax | ||
| Urban maintenance and construction tax | 5,836,578.13 | 7,757,698.51 |
| Real estate tax | 10,692,552.05 | 7,294,975.55 |
| Land use tax | 4,695,105.35 | 4,549,989.64 |
| Personal income tax withheld and remitted | 4,038,032.19 | 4,164,201.08 |
| Educational fee | 2,387,890.63 | 2,763,217.77 |
| Local educational fee | 1,591,927.11 | 1,842,145.19 |
| Stamp duty | 877,508.40 | 896,168.00 |
| Disability insurance | 1,695,195.50 | 144,225.72 |
| Total | 533,077,969.51 | 437,873,048.07 |
41. Other payables
List of items
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Interest payable | ||
| Dividends payable |
| Other payables | ||
| Discount on sale accrued in advance | 285,699,608.15 | 118,865,777.96 |
| Guaranteed deposit | 61,020,316.08 | 56,445,206.58 |
| Accrued expenses | 46,433,533.02 | 22,268,751.16 |
| Obligations of restricted stock repurchase within one year | 34,586,352.50 | 18,691,437.60 |
| Temporary receipts and advances payable | 3,073,950.35 | 2,819,913.32 |
| Total | 430,813,760.10 | 219,091,086.62 |
Other notes:
□Applicable √Not applicable
Interest payable
(1). List by category
□Applicable √Not applicable
Dividends payable
(2). List by category
□Applicable √Not applicable
Other payables
(1). List of other payables by nature of payment
□Applicable √Not applicable
(2). Significant other payables aged over one year
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
42. Liabilities directly associated with assets held for sale
□Applicable √Not applicable
43. Non-current liabilities due within one year
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Long-term borrowings due within one year | 660,000,000.00 | |
| Bonds payable due within one year | ||
| Long-term payables due within one year | ||
| Lease liabilities due within one year | 13,225,048.63 | 9,622,886.25 |
| Long-term borrowings due within one year -- interest payable | 686,888.90 | |
| Total | 673,911,937.53 | 9,622,886.25 |
Other notes:
The difference between the opening amount for the period and the year-end balance of theprevious year (31 December 2020) is detailed in the notes of "V. Significant Accounting Policies
and Accounting Estimates" and "44. Changes in important accounting policies and accountingestimation" in "Section 10 Financial Report" of the Annual Report.
44. Other current liabilities
Status of other current liabilities
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Short-term bonds payable | ||
| Refunds payable | ||
| Output VAT to be charged off | 56,939,989.86 | 43,285,234.93 |
| Total | 56,939,989.86 | 43,285,234.93 |
Increase/decrease of short-term bonds payable:
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
45. Long-term borrowings
(1). Classification of long-term borrowings
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Pledged loans | ||
| Mortgage loans | ||
| Guaranteed loans | 160,000,000.00 | |
| Unsecured loans | ||
| Interest payable on long-term borrowings | 37,333.33 | |
| Total | 160,037,333.33 |
Other notes, including interest rate range:
□Applicable √Not applicable
46. Bonds payable
(1). Bonds payable
□Applicable √Not applicable
(2). Changes in bonds payable: (excluding other financial instruments such as preferenceshares and perpetual bonds, which are classified as financial liabilities)
□Applicable √Not applicable
(3). Notes of the conditions for the conversion of convertible corporation bonds and the timeof conversion
□Applicable √Not applicable
(4). Notes of other financial instruments classified as financial liabilities
Basic information about other financial instruments outstanding such as preference shares andperpetual bonds at the end of the period
□Applicable √Not applicable
Changes in financial instruments outstanding such as preference shares and perpetual bonds at theend of the period
□Applicable √Not applicable
Notes of basis for the classification of other financial instruments as financial liabilities:
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
47. Lease liabilities
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| The amount of the lease payment that has not yet been made | 5,208,552.97 | 12,202,180.90 |
| Minus: Unrecognized financing expenses | 118,715.58 | 340,924.27 |
| Total | 5,089,837.39 | 11,861,256.63 |
Other notes:
The difference between the opening amount for the period and the year-end balance of theprevious year (31 December 2020) is detailed in the notes of "V. Significant Accounting Policiesand Accounting Estimates" and "44. Changes in important accounting policies and accountingestimation" in "Section 10 Financial Report" of the Annual Report.
48. Long-term payables
List of items
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
Long-term payables
(1). Long-term payables listed by nature of payment
□Applicable √Not applicable
Specific payables
(2). Special payables listed by nature of payments
□Applicable √Not applicable
49. Long-term employee benefits payable
□Applicable √Not applicable
50. Provisions
□Applicable √Not applicable
51. Deferred income
Status of deferred income
□Applicable √Not applicable
Item involving government grants:
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
52. Other non-current liabilities
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Contract liabilities | ||
| Obligations of restricted stock repurchase for over one year | 46,125,187.50 | 28,037,156.40 |
| Total | 46,125,187.50 | 28,037,156.40 |
53. Share capital
√Applicable □Not applicable
Unit: RMB
| Opening balance | Increase/Decrease (+/-) | Closing balance | |||||
| Issuance New shares | Bonus shares | Provident fund Conversion of capital | Others | Subtotal | |||
| Total shares | 600,613,800 | 668,400 | -101,680 | 566,720 | 601,180,520 | ||
Other notes:
According to the resolution of the Company's 2020 Annual General Meeting and the FifthMeeting of the Second Board of Directors, the Company granted 668,400 restricted shares to 523incentive subjects at a grant price of RMB88.15 per share. The Company raisedRMB58,919,460.00 from employees, which was included in share capital of RMB668,400.00 andcapital reserves (share capital premium) of RMB58,251,060.00.In 2021, due to the departure of employees participating in the restricted share incentivescheme, the Company repurchased 101,680 shares of restricted shares, reducing share capital byRMB101,680.00 and capital reserves (share capital premium) by RMB7,706,536.40.
54. Other equity instruments
(1). Basic information about other financial instruments outstanding such as preference
shares and perpetual bonds at the end of the period
□Applicable √Not applicable
(2). Changes in financial instruments outstanding such as preference shares and perpetual
bonds at the end of the period
□Applicable √Not applicable
Increase and decrease of other equity instruments for the current period, the reason for the changes,and the basis of the relevant accounting treatment:
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
55. Capital reserves
√Applicable □Not applicable
Unit: RMB
| Item | Opening balance | Increase for the current period | Decrease for the current period | Closing balance |
| Additional paid-in capital (Additional share capital) | 3,705,839,350.19 | 58,251,060.00 | 7,706,536.40 | 3,756,383,873.79 |
| Other capital reserves | 114,336,257.95 | 43,348,156.82 | 157,684,414.77 | |
| Total | 3,820,175,608.14 | 101,599,216.82 | 7,706,536.40 | 3,914,068,288.56 |
Other notes, including a description of the increase or decrease for the current period and thereasons for the change:
The increase in the Company's capital reserves (share capital premium) was attributable tothe restricted share premium of RMB58,251,060.00; the decrease in the Company's capitalreserves (share capital premium) was attributable to the reduction of RMB7,706,536.40 from theCompany's repurchase of restricted shares.
Based on the performance appraisal conditions and service vesting period of the restrictedshares, the Company recognized the share incentive cost of RMB41,090,453.82, which wasincluded in capital reserves (other capital reserves) of RMB41,090,453.82. Based on the grant ofthe 2020 Special Talent Shareholding Plan, the Company transferred part of the granted share ofthe 2020 Special Talent Shareholding Plan to the long-term prepaid expense by vesting period,increasing the long-term prepaid expense by RMB21,302,384.00, increasing capital reserves byRMB2,257,703.00, and reducing the other non-current assets RMB19,044,681.00.
56. Treasury shares
√Applicable □Not applicable
Unit: RMB
| Item | Opening balance | Increase for the current period | Decrease for the current period | Closing balance |
| Treasury shares | 46,728,594.00 | 58,919,460.00 | 24,936,514.00 | 80,711,540.00 |
| Total | 46,728,594.00 | 58,919,460.00 | 24,936,514.00 | 80,711,540.00 |
Other notes, including a description of the increase or decrease for the current period and thereasons for the change:
The increase in treasury shares for the current period is the result of the Company's 2021restricted share incentive scheme, as detailed in the description in "53. Share capital" in "VII.Notes to Items in the Consolidated Financial Statements" of "Section 10 Financial Report".
The decrease of treasury shares for the current period is due to the repurchase of restrictedshares of resigned employees, a decrease of treasury shares worth RMB7,907,976.40; the partialunlocking of the 2020 restricted share incentive scheme caused a decrease of treasury shares worthRMB16,407,537.60; the cash dividend of RMB2 (including tax) per share in 2021 caused decreaseof treasury shares worth RMB621,000.00.
57. Other comprehensive income
√Applicable □Not applicable
Unit: RMB
| Item | Opening balance | Amount for the current period | Closing balance | |||||
| Amount before deducting income tax for the current period | Minus: Profits and losses of other comprehensive income recorded for the previous period and transferred to the current period | Minus: Retained earnings of other comprehensive income recorded for the previous period and transferred to the current period | Minus: Income tax expense | Attributable to the Company as the parent after tax | Attributable minority shareholders after tax | |||
| I. Other Comprehensive Income That Will Not Be Reclassified to Profit or Loss | ||||||||
| Of which: Changes caused by remeasurements on defined benefit schemes | ||||||||
| Other comprehensive income that will not be reclassified to profit or loss under the equity method | ||||||||
| Changes in the fair value of other equity investments | ||||||||
| Changes in the fair value arising from changes in own credit risk | ||||||||
| II. Other Comprehensive Income That Will Be Reclassified to Profit or Loss | 28,863,769.91 | -30,694,829.35 | -9,368,449.81 | -21,326,379.54 | 7,537,390.37 | |||
| Of which: Other comprehensive income that will | ||||||||
| be reclassified to profit or loss under the equity method | ||||||||
| Changes in the fair value of other debt investments | ||||||||
| Other comprehensive income arising from the reclassification of financial assets | ||||||||
| Credit impairment allowance for other debt investments | ||||||||
| Reserve for cash flow hedges | 28,871,218.29 | -30,693,435.89 | -9,368,449.81 | -21,324,986.08 | 7,546,232.21 | |||
| Differences arising from the translation of foreign currency-denominated financial statements | -7,448.38 | -1,393.46 | -1,393.46 | -8,841.84 | ||||
| Other comprehensive income in total | 28,863,769.91 | -30,694,829.35 | -9,368,449.81 | -21,326,379.54 | 7,537,390.37 |
58. Specific reserve
□Applicable √Not applicable
59. Surplus reserves
√Applicable □Not applicable
Unit: RMB
| Item | Opening balance | Increase for the current period | Decrease for the current period | Closing balance |
| Statutory surplus reserves | 302,797,998.73 | 302,797,998.73 | ||
| Any surplus reserves | ||||
| General reserves | ||||
| Enterprise expansion fund | ||||
| Others | ||||
| Total | 302,797,998.73 | 302,797,998.73 |
60. Retained earnings
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Last closing retained earnings before adjustment | ||
| Total opening retained earnings adjustment (increase +, decrease -) | ||
| Opening retained earnings after adjustment | 4,431,669,986.31 | 4,398,239,912.17 |
| Plus: Net profit attributable to the owners of the parent at the beginning of the current period | 2,780,360,732.66 | 2,313,430,074.14 |
| Minus: Withdrawal of statutory surplus reserves | ||
| Withdrawal of any surplus reserves | ||
| Withdrawal of general reserve | ||
| Dividends of common shares payable | 1,201,151,800.00 | 2,280,000,000.00 |
| Dividends of common shares converted to share capital | ||
| Closing retained earnings | 6,010,878,918.97 | 4,431,669,986.31 |
Other notes:
On 20 May 2021, the Company held the 2020 Annual General Meeting and deliberated andapproved the 2020 annual profit distribution plan, and based on the total share capital registeredon the record date of the implementation of the equity distribution, distributed a cash drain ofRMB20.00 (including tax) to all shareholders for every 10 shares, for a total ofRMB1,201,151,800.00.
61. Operating revenue and cost of sales
(1). Status of operating revenue and cost of sales
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 | ||
| Revenue | Cost | Revenue | Cost | |
| Principal business | 12,336,870,690.29 | 7,790,762,754.47 | 10,021,281,624.73 | 6,006,704,233.21 |
| Others | 48,045,647.22 | 17,777,912.37 | 29,847,209.32 | 11,902,306.36 |
| Total | 12,384,916,337.51 | 7,808,540,666.84 | 10,051,128,834.05 | 6,018,606,539.57 |
(2). Status of contract revenue
□Applicable √Not applicable
Details of contract revenue:
□Applicable √Not applicable
(3). Details of obligation for contract performance
□Applicable √Not applicable
(4). Details of the apportionment to the remaining obligations for contract performance
□Applicable √Not applicable
Other notes:
None
62. Taxes and levies
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Business tax | ||
| Urban maintenance and construction tax | 31,545,703.77 | 32,659,124.77 |
| Educational fee | 17,945,609.53 | 18,179,685.07 |
| Local educational fee | 12,118,900.15 | 12,119,789.99 |
| Tax on natural resources | ||
| Real estate tax | 10,754,950.02 | 7,691,038.95 |
| Land use tax | 4,791,701.11 | 4,582,664.97 |
| Vehicle and vessel usage tax | 53,029.46 | 44,571.09 |
| Stamp duty | 5,560,108.84 | 5,051,471.90 |
| Environment protection tax | 15,293.60 | |
| Total | 21,175,083.03 | 80,328,346.74 |
63. Selling expense
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Employee remuneration | 261,647,749.30 | 253,150,571.42 |
| Marketing expense | 217,339,450.58 | 175,830,273.21 |
| Travel expense | 34,695,865.40 | 38,247,815.04 |
| Administrative expense | 32,909,137.36 | 24,066,926.31 |
| Lease rental | 1,976,612.98 | 11,404,814.01 |
| Advertising expense | 5,339,637.47 | 9,815,456.12 |
| Others | 6,278,549.71 | 5,330,676.02 |
| Total | 560,187,002.80 | 517,846,532.13 |
64. Administrative expense
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Employee remuneration | 214,964,097.72 | 203,445,228.96 |
| Administrative expense | 56,125,085.23 | 44,504,315.74 |
| Depreciation and amortization | 43,934,085.95 | 92,318,399.02 |
| Expense for restricted share incentive scheme | 41,090,453.82 | 20,596,194.94 |
| House and equipment maintenance expense | 26,859,235.14 | 25,849,556.26 |
| Consultant service expense | 20,597,126.42 | 17,561,464.44 |
| Expense for 2020 Special Talent Shareholding Plan | 6,701,548.01 | 450,000.00 |
| Entertainment expense | 5,788,268.11 | 5,579,623.46 |
| Lease rental | 2,455,152.98 | 8,437,527.58 |
| Tax | 2,864,245.72 | 3,466,884.55 |
| Others | 6,236,257.87 | 8,497,352.59 |
| Total | 427,615,556.97 | 430,706,547.54 |
65. R&D expense
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| R&D of converters | 204,811,830.81 | 175,510,933.90 |
| R&D of wall switches and sockets | 141,889,975.17 | 125,115,667.60 |
| R&D of LED | 53,911,159.57 | 49,714,843.43 |
| R&D of digital accessories | 41,413,616.82 | 43,749,365.85 |
| R&D of circuit breakers | 11,834,088.08 | 7,090,879.50 |
| R&D of domestic electrical appliance | 17,154,346.37 |
| Total | 471,015,016.82 | 401,181,690.28 |
66. Finance costs
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Interest expense | 39,763,491.76 | 9,718,888.89 |
| Interest income | -128,887,165.64 | -49,748,785.37 |
| Exchange gain or loss | 1,365,206.44 | 3,282,033.90 |
| Auxiliary expense | 1,194,046.81 | 1,010,376.04 |
| Cash discount | -1,277,860.69 | |
| Total | -87,842,281.32 | -35,737,486.54 |
67. Other income
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Government grants related to income | 388,196,973.94 | 126,164,339.75 |
| Employment VAT reduction or exemption for veterans and key groups | 416,950.00 | 544,850.00 |
| Return of auxiliary expense for individual income tax withheld | 2,322,217.53 | 470,121.00 |
| Total | 390,936,141.47 | 127,179,310.75 |
Other notes:
The government grants included in other income for the current period are detailed in theexplanation in "84. Government grants" in "VII. Notes to Items in the Consolidated FinancialStatements" of "Section 10 Financial Report" of the Annual Report
68. Return on investment
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Earnings of long-term equity investments accounted for by the equity method | ||
| Disposal of return on investment resulting from long-term equity investments | ||
| Return on investment of held-for-trading financial assets for the holding period | ||
| Dividend income of other equity investments gained for the holding period | ||
| Interest income of debt investments gained for the holding period | 364,239.73 | |
| Interest income of other debt investments for the holding period | ||
| Return on investment gained from disposal of held-for-trading financial assets | ||
| Return on investment gained from disposal of other equity investments | ||
| Return on investment gained from disposal of debt investments | ||
| Return on investment gained from disposal of |
| other debt investments | ||
| Earnings of debt restructuring | ||
| Return on investment of bank financing | 171,623,256.63 | 165,861,739.74 |
| Investment in futures | 11,107,836.63 | -114,631,050.00 |
| Interest income of call money | 7,294,215.55 | 407,671.23 |
| Total | 190,025,308.81 | 52,002,600.70 |
69. Net gain on exposure hedges
□Applicable √Not applicable
70. Gain on changes in fair value
□Applicable √Not applicable
71. Credit impairment loss
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Bad debt provision for notes receivable | ||
| Bad debt provision for accounts receivable | ||
| Bad debt provision for other receivables | ||
| Depreciation reserves for debt investments | ||
| Depreciation reserves for other debt investments | ||
| Bad debt losses for long-term receivables | ||
| Depreciation losses for contract assets | ||
| Bad debt loss | -24,746,561.94 | -7,435,665.10 |
| Total | -24,746,561.94 | -7,435,665.10 |
72. Asset impairment loss
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| I. Bad Debt Loss | ||
| II. Inventories Shrinkage Loss and Depreciation Loss of Contract Performance Cost | -7,512,895.82 | -6,675,595.59 |
| III. Depreciation Loss of Long-term Equity Investments | ||
| IV. Depreciation Loss of Investment Property | ||
| V. Depreciation Loss of Fixed Assets | -8,744,227.44 | |
| VI. Depreciation Loss of Engineering Materials | ||
| VII. Depreciation Loss of Construction in Progress | ||
| VIII. Depreciation Loss of Productive Living Assets | ||
| IX. Depreciation Loss of Oil and Gas Assets |
| X. Depreciation Loss of Intangible Assets | ||
| XI. Depreciation Loss of Goodwill | ||
| XII. Miscellaneous | ||
| Total | -16,257,123.26 | -6,675,595.59 |
73. Asset disposal income
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Earnings from disposal of fixed assets | -11,308,464.89 | -669,979.13 |
| Total | -11,308,464.89 | -669,979.13 |
74. Non-operating income
Status of Non-operating income
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 | Amount recorded in the current non-recurring profit or loss |
| Total earnings from disposal of non-current assets | |||
| In which: Earnings from disposal of fixed assets | |||
| Earnings from disposal of intangible assets | |||
| Gains on exchange of non-monetary assets | |||
| Donation accepted | |||
| Government subsidies | |||
| Default revenue of dealers | 362,538.90 | 319,850.97 | 362,538.90 |
| Default revenue of suppliers | 931,382.02 | 1,144,128.54 | 931,382.02 |
| Payment not required to be made | 701,484.58 | 361,119.08 | 701,484.58 |
| Damages for infringement | 2,254,500.38 | 1,136,369.43 | 2,254,500.38 |
| Others | 103,363.88 | 20,988.20 | 103,363.88 |
| Total | 4,353,269.76 | 2,982,456.22 | 4,353,269.76 |
Government grants recorded in profit or loss for the current period
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
75. Non-operating expense
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 | Amount recorded in the current non-recurring profit or loss |
| Total loss caused by disposal of non-current assets | 1,593,839.71 | 18,258.05 | 1,593,839.71 |
| Of which: Loss caused by disposal of fixed assets | |||
| Loss caused by intangible assets | |||
| Loss caused by exchange of non-monetary assets | |||
| Donation | 32,185,534.91 | 50,539,870.31 | 32,185,534.91 |
| Fines expenditure | 294,810,000.00 | 294,810,000.00 | |
| Payments cannot be recovered | 175,600.00 | ||
| Compensation expense | 2,025,121.90 | 114,400.00 | 2,025,121.90 |
| Others | 43,227.39 | 66,725.79 | 43,227.39 |
| Total | 330,657,723.91 | 50,914,854.15 | 330,657,723.91 |
Other notes:
Details of donations:
| Item | 2021 | 2020 |
| Red Cross Society of China Cixi Branch | 11,583,534.91 | 16,850,000.00 |
| Peking University Education Foundation | 10,000,000.00 | |
| Cixi General Institution of Charity | 7,402,000.00 | 25,175,000.00 |
| Red Cross Society of China Ningbo Branch | 2,000,000.00 | |
| Sichuan Province Leshan Normal University Education Development Foundation | 1,000,000.00 | |
| Red Cross Society of China Zhejiang Branch | 8,000,000.00 | |
| Other petty donations | 200,000.00 | 514,870.31 |
| Total | 32,185,534.91 | 50,539,870.31 |
76. Income tax expense
(1). Table of income tax expense
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Income tax expense for the current period | 582,281,936.16 | 450,216,636.03 |
| Deferred income tax expense | -37,682,743.86 | -8,981,772.14 |
| Total | 544,599,192.30 | 441,234,863.89 |
(2). Process of adjusting accounted profit and income tax expense
√Applicable □Not applicable
Unit: RMB
| Item | 2021 |
| Gross profit | 3,324,959,924.96 |
| Income tax expense by statutory/applicable rates of tax | 498,743,988.74 |
| Influence of applying different tax rates by subsidiaries | 45,229,334.65 |
| Influence of income tax before adjustment | -859,475.32 |
| Influence of non-taxable income | |
| Influence of non-deductible costs, expenses and losses | 44,935,451.86 |
| Influence of using deductible losses from previously unconfirmed deferred income tax assets | |
| Influence of no deductible temporary differences or deductible losses in deferred income tax assets unconfirmed for the current period | 18,011,462.09 |
| Influence of R&D and deductions | -61,461,569.72 |
| Income tax expense | 544,599,192.30 |
Other notes:
□Applicable √Not applicable
77. Other comprehensive income
□Applicable □Not applicable
78. Cash flow statement
(1). Other cash received from business activities
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Income from government subsidy | 390,519,191.47 | 124,834,460.75 |
| Deposit received | 46,881,551.84 | 55,469,419.20 |
| Interest income | 82,233,607.43 | 36,930,263.10 |
| Return of housing loan for employees | 2,447,354.41 | 3,233,861.00 |
| Others | 3,344,812.08 | 2,995,034.75 |
| Total | 525,426,517.23 | 223,463,038.80 |
(2). Cash payments related to other operating activities
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Out-of-pocket expense | 705,132,660.86 | 664,628,863.42 |
| Fine payment | 294,810,000.00 | |
| Deposit payment | 173,494,360.86 | 61,160,771.18 |
| Donation expenditure | 32,185,534.91 | 50,539,870.31 |
| 2020 Special Talent Shareholding Plan | 50,000,000.00 |
| Housing loan for employees | 4,840,000.00 | 6,700,000.00 |
| Others | 3,264,696.97 | 6,363,682.43 |
| Total | 1,213,727,253.60 | 839,393,187.34 |
(3). Other cash received from investment activities
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Redemption of investments such as bank wealth management | 11,033,100,000.00 | 24,676,180,000.00 |
| Recovery of futures deposit | 241,233,253.72 | 143,416,262.00 |
| Received interest on call money | 7,200,000.00 | |
| Total | 11,281,533,253.72 | 24,819,596,262.00 |
(4). Other cash paid for investment activities
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Investment expenditure such as bank wealth management | 12,413,600,000.00 | 28,393,490,000.00 |
| Payment for futures deposit | 180,500,000.00 | 278,900,000.00 |
| Payment for equity transfer | 26,990,656.00 | |
| Call money to other parties | 110,000,000.00 | |
| Total | 12,621,090,656.00 | 28,782,390,000.00 |
(5). Other cash received from funding activities
□Applicable √Not applicable
(6). Other cash paid for funding activities
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Repayment for lease liabilities | 12,579,833.83 | |
| Repurchase of share incentive | 7,808,216.40 | |
| Payment for listing | 12,187,726.42 | |
| Total | 20,388,050.23 | 12,187,726.42 |
79. Supplemental information for cash flow statement
(1). Supplemental information for cash flow statement
√Applicable □Not applicable
Unit: RMB
| Supplemental information | 2021 | 2020 |
| 1. Reconcile net profit to cash flow from operating activities: | ||
| Net profit | 2,780,360,732.66 | 2,313,430,074.14 |
| Add: Provision for impairment of assets | 16,257,123.26 | 6,675,595.59 |
| Credit impairment loss | 24,746,561.94 | 7,435,665.10 |
| Depreciation of fixed assets, oil and gas assets, and productive living assets | 206,424,241.17 | 185,398,562.77 |
| Amortization of right-of-use assets | 11,244,984.87 | |
| Amortization of intangible assets | 16,458,214.68 | 48,155,030.75 |
| Amortization of long-term prepaid expense | 6,701,548.01 | 450,000.00 |
| Loss caused by disposal of fixed assets, intangible assets and other long-term assets (gains represented by "-") | 11,308,464.89 | 669,979.13 |
| Losses caused by scrapping fixed assets (gains represented by "-") | 1,593,839.71 | 18,258.05 |
| Losses from changes in fair value (gains represented by "-") | ||
| Finance costs (gains represented by "-") | 41,128,698.20 | 13,000,922.79 |
| Investment loss (gains represented by "-") | -190,025,308.81 | -52,002,600.70 |
| Decrease in deferred income tax assets (increase represented by "-") | -49,553,192.50 | -15,527,276.42 |
| Increase in deferred income tax liabilities (decrease represented by "-") | 11,870,448.64 | 6,545,504.28 |
| Decrease in inventories (increase represented by "-") | -596,259,958.11 | 184,355,682.23 |
| Decrease in accounts receivable generated from operating activities (gains represented by "-") | -190,636,989.81 | -45,335,926.56 |
| Increase in accounts payable used in operating activities (decrease represented by "-") | 869,359,175.52 | 763,337,045.56 |
| Others | 43,348,156.82 | 20,596,194.94 |
| Net cash generated from/used in operating activities | 3,014,326,741.14 | 3,437,202,711.65 |
| 2. Significant investing and financing activities without involvement of cash receipts and payments | ||
| Conversion of debt to capital | ||
| Convertible corporate bonds matured within 1 year | ||
| Fixed assets financing lease | ||
| 3. Net increase/decrease of cash and cash equivalent: | ||
| Closing balance of cash | 2,552,716,453.54 | 1,829,551,296.70 |
| Less: Opening balance of cash | 1,829,551,296.70 | 719,322,675.44 |
| Plus: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 723,165,156.84 | 1,110,228,621.26 |
(2). Net cash paid for the current period to acquire subsidiaries
□Applicable √Not applicable
(3). Net cash received for the disposal of subsidiaries for the current period
□Applicable √Not applicable
(4). Composition of cash and cash equivalents
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| I. Cash | 2,552,716,453.54 | 1,829,551,296.70 |
| Including: Cash on hand | ||
| Bank deposits on demand | 2,500,383,599.91 | 1,827,166,981.92 |
| Other monetary assets on demand | 52,332,853.63 | 2,384,314.78 |
| Due from central banks that can be used for payment | ||
| Due from banks and other financial institutions | ||
| Interbank withdrawal | ||
| II. Cash Equivalents | ||
| Of which: Investment in bonds due within three months | ||
| III. Cash and Cash Equivalents, End of the Period | 2,552,716,453.54 | 1,829,551,296.70 |
Other notes:
√Applicable □Not applicable
As at 31 December 2021, the balance of monetary assets was RMB4,377,228,556.74, thebalance of cash and cash equivalents was RMB2,552,716,453.54, the difference wasRMB1,824,512,103.20, which was the futures deposits of RMB25,988,465.80 not belonging tocash and cash equivalents, the cash deposits for L/G was RMB6,654,782.17, and the bill depositswas RMB2,333,774.75. The third party pays the platform deposit of RMB63,000.00, and the fixeddeposit of RMB1,730,000,000.00 and the interest of RMB59,472,080.48 that cannot be withdrawnat any time.
As at 31 December 2020, the balance of monetary assets was RMB3,752,857,861.42, thebalance of cash and cash equivalents was RMB1,829,551,296.70, the difference wasRMB1,923,306,564.72, which was the futures deposits of RMB75,613,882.89 not belonging tocash and cash equivalents, the cash deposits for L/G was RMB1,802,489.23, and the bill depositswas RMB2,333,774.75. The third party pays the platform deposit of RMB171,000.00 and depositfor contract performance of RMB100,670.33, and the fixed deposit of RMB1,832,800,000.00 andthe interest of RMB12,818,522.27 that cannot be withdrawn at any time.
80. Notes to changes in owners' equity
Notes to the name of “Other” of closing balance of the same period of last year adjusted and theamount adjusted:
□Applicable √Not applicable
81. Assets with restricted ownership or right to use
√Applicable □Not applicable
Unit: RMB
| Item | Closing carrying value | Reason for restriction |
| Monetary assets | 35,040,022.72 | Deposits that cannot be |
| withdrawn at any time | ||
| Total | 35,040,022.72 | / |
82. Foreign currency monetary items
(1). Foreign currency monetary items
√Applicable □Not applicable
Unit: RMB
| Item | Closing foreign currency balance | Exchange rate | Closing balance converted to RMB balance |
| Monetary assets | - | - | |
| Of which: USD | 471,197.43 | 6.3757 | 3,004,213.45 |
| EUR | |||
| HKD | 31,664.30 | 0.8176 | 25,888.73 |
| Accounts receivable | - | - | |
| Of which: USD | 9,564,990.25 | 6.3757 | 60,983,508.34 |
| EUR | |||
| HKD | |||
| Long-term borrowings | - | - | |
| Of which: USD | |||
| EUR | |||
| HKD | |||
| Accounts payable | |||
| Of which: USD | 6,034.74 | 6.3757 | 38,475.69 |
(2). Notes to overseas operating entities, including: for important overseas operating entities,
their main overseas business location, bookkeeping base currency and basis forselection should be disclosed, and the reasons for changes in the bookkeeping basecurrency should also be disclosed
√Applicable □Not applicable
As Bull HK was established and carries out its operating activities in Hong Kong, itsbookkeeping base currency is HKD.
83. Hedge
√Applicable □Not applicable
The hedge items, related hedging instruments, and qualitative and quantitative information abouthedged risks are disclosed by hedging category:
The Company used commodity future contracts to hedge the Company's exposure to rawmaterial price risks. The future contracts used by the Company are mainly the cathode copperfuture standard contracts of the Shanghai Futures Exchange and the polypropylene standardcontracts of the Dalian Commodity Exchange.
| Hedged items | Expected bulk-purchase of raw materials such as copper and plastic particles |
| Hedging instruments | Commodity future contracts |
| Hedging method | Commodity future purchase contracts locked in changes of price in expected raw materials bulk-purchase contract |
The Company used commodity future contracts to hedge the expected bulk-purchase of rawmaterials of copper and plastic particles to avoid the risk of fluctuations in the expected futurecash flows caused by the fluctuations in the market price of the above raw materials.As at 31 December 2021, the pre-tax profit arising from the change in fair value of cash flowhedging instruments that has been included in other comprehensive income wasRMB3,613,050.00. The futures have been delivered but the pre-tax profit of the inventories thathas not yet been deposited is RMB4,188,471.83.
84. Government subsidies
(1). Basic information on government subsidy
√Applicable □Not applicable
Unit: RMB
| Category | Amount | Listed items | Amount recorded in the current profit or loss |
| Cixi City Cultivation Incentives for Billion-scale Enterprises | 258,647,000.00 | Other income | 258,647,000.00 |
| Financial subsidy for Ningbo Meishan Bonded Port Area | 66,730,000.00 | Other income | 66,730,000.00 |
| The 2020 fiscal liquidation subsidy is in place | 37,430,000.00 | Other income | 37,430,000.00 |
| 2020 Cixi Special Award for Industrial Technology Transformation Investment | 5,311,800.00 | Other income | 5,311,800.00 |
| 2020 Ningbo Digital Workshop and Industrial Investment Technology Transformation Award | 5,280,000.00 | Other income | 5,280,000.00 |
| The 5th batch of incentive funds for key technology research and development in Ningbo in 2021 | 1,800,000.00 | Other income | 1,800,000.00 |
| Industrial Economy Awards in 2020 | 908,000.00 | Other income | 908,000.00 |
| 2020 Ningbo Digital Workshop and Industrial Investment Technology Transformation Award | 850,000.00 | Other income | 850,000.00 |
| Award for key manufacturing enterprises whose output value growth rate reached the standard and the new manufacturing enterprises above designated size in Ningbo in the fourth quarter of 2020 | 800,000.00 | Other income | 800,000.00 |
| Postdoctoral funding from the Human Resources and Social Security Bureau | 625,000.00 | Other income | 625,000.00 |
| 2021 Ningbo Characteristic Chinese Software City Subsidy | 600,000.00 | Other income | 600,000.00 |
| 2020 Annual Policy Incentive for Industrial Enterprises in Binhai District | 541,100.00 | Other income | 541,100.00 |
| 2020 Cixi Subsidy for Enterprise Informatization Projects | 500,000.00 | Other income | 500,000.00 |
| 2020 Ningbo Award for Green Manufacturing Project Enterprises | 500,000.00 | Other income | 500,000.00 |
| Cixi as hidden champion of exquisitely manufactured products in Zhejiang, while Ningbo as champion of single items in 2020 | 500,000.00 | Other income | 500,000.00 |
| Output value growth rate standard rewards for key manufacturing enterprises in Ningbo in the fourth quarter of 2020 | 500,000.00 | Other income | 500,000.00 |
| 2020 Cixi Special Award for Industrial Technology Transformation Investment | 413,000.00 | Other income | 413,000.00 |
| Output value growth rate standard rewards for key manufacturing enterprises in Ningbo in the fourth quarter of 2020 | 400,000.00 | Other income | 400,000.00 |
| New apprenticeship training in July and | 396,000.00 | Other income | 396,000.00 |
| November 2021 | |||
| Cixi's introduction of scientific management model awards in 2020 | 360,300.00 | Other income | 360,300.00 |
| 2020 Cixi Industrial Design Award | 354,000.00 | Other income | 354,000.00 |
| Independent brand products online sales incentives for consumer goods industry enterprises in Ningbo | 350,000.00 | Other income | 350,000.00 |
| Rewards for the growth rate of key enterprises in the third quarter | 350,000.00 | Other income | 350,000.00 |
| Industrial Economics Awards in 2020 | 256,000.00 | Other income | 256,000.00 |
| Award for high-strength and high-conductivity XYK-32 copper alloy application research projects | 240,000.00 | Other income | 240,000.00 |
| Subsidies for work-based training | 212,000.00 | Other income | 212,000.00 |
| Award for compliance and pilot demonstration of integrated management system of informatization and industrialization and excellent industrial APPs in Cixi in 2020 | 200,000.00 | Other income | 200,000.00 |
| The 1st batch of domestic authorized invention patent awards in Cixi City in 2021 | 200,000.00 | Other income | 200,000.00 |
| Subsidy for short-term export credit insurance | 193,000.00 | Other income | 193,000.00 |
| Cash-in reward for service policy implementation to Guanhaiwei Town Government | 187,475.80 | Other income | 187,475.80 |
| Subsidy for Enterprise Informatization Projects in Cixi in 2020 | 183,300.00 | Other income | 183,300.00 |
| 2020 Cixi R&D Institution Incentive Fund | 170,000.00 | Other income | 170,000.00 |
| Industrial Economy Awards in 2020 | 147,100.00 | Other income | 147,100.00 |
| 2020 Cixi Subsidy for Open Economy | 143,405.00 | Other income | 143,405.00 |
| Financial support funds for Xinzhuang Industrial Zone in 2020 | 130,000.00 | Other income | 130,000.00 |
| The 1st batch of domestic authorized invention patent awards in Cixi City in 2021 | 120,000.00 | Other income | 120,000.00 |
| 2020 Cixi Subsidy for Industrial Design Award | 112,100.00 | Other income | 112,100.00 |
| Subsidy for further accelerating the economic transformation and development | 110,000.00 | Other income | 110,000.00 |
| The research and development expenses of enterprises with the incentive deducted in Cixi in 2020 | 101,006.00 | Other income | 101,006.00 |
| Rewards for enterprises that retained employees, hired talents, steadily developed and enhanced investment in the first quarter in Ningbo | 100,000.00 | Other income | 100,000.00 |
| Others | 1,245,387.14 | Other income | 745,387.14 |
| Subtotal | 388,196,973.94 | 387,696,973.94 |
(2). Return of government subsidy
□Applicable √Not applicable
85. Other information
□Applicable √Not applicable
VIII Changes in Consolidation Scope
1. Business combinations involving entities not under common control
□Applicable √Not applicable
(1). Business combinations involving entities not under common control for the current
period
□Applicable √Not applicable
(2). Consolidation cost and goodwill
□Applicable √Not applicable
(3). The acquiree can identify the assets and liabilities on the date of purchase
□Applicable √Not applicable
(4). Gains or losses resulting from the remeasurement of equity held prior to the date ofpurchase at fair valueWhether there is a transaction that through multiple transaction step by step to realize businesscombination and gaining the control during the Reporting Period
□Applicable √Not applicable
(5). Notes to reasonable consideration or fair value of identifiable assets and liabilities of theAcquiree that cannot be determined on the date of purchase or at the end of the merger
□Applicable √Not applicable
(6). Other notes:
□Applicable √Not applicable
2. business combinations involving entities under common control
□Applicable √Not applicable
(1). Business combinations involving entities under common control for the current period
□Applicable √Not applicable
(2). Combination cost
□Applicable √Not applicable
(3). Carrying value of assets and liabilities of the combined party on the date of
consolidation
□Applicable √Not applicable
Other notes:
3. Counter purchase
□Applicable √Not applicable
4. Disposal of subsidiary
Whether there was a single disposal of an investment in a subsidiary that resulted in a loss ofcontrol
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
5. Changes in combination scope for other reasons
Describe other changes in the consolidation scope (e.g., new subsidiaries, liquidation ofsubsidiaries, etc.) and relevant situations:
√Applicable □Not applicable
| Name | Way to gain equity | Time and place of gaining equity | Contribution amount | Contribution proportion |
| Hainan Dacheng | Set-up | January 2021 | RMB10 million | 100.00% |
| Intelligent Technology | Set-up | October 2021 | RMB1 million | 100.00% |
Hainan Dacheng completed the business registration procedures on 21 January 2021, andobtained a business license with a unified social credit code of 91469001MA5TUL9A2F, with a
registered capital of RMB10,000,000 and a shareholding ratio of 100% of the Company. As at 31December 2021, the Company's paid-up capital contribution was RMB10,000,000. Therefore,since the date of its establishment, Hainan Dacheng has been included in the scope of theconsolidated financial statements.On 18 October 2021, Intelligent Technology completed the business registration procedures,and obtained a business license with a unified social credit code of 91330282MA7BJRX4XL, witha registered capital of RMB10,000,000 and a shareholding ratio of 100% of the Company. As at31 December 2021, the Company's paid-up capital contribution was RMB1000,000. Therefore,since the date of its establishment, Intelligent Technology has been included in the scope of theconsolidated financial statements.
6. Other information
□Applicable √Not applicable
IX Interests in Other Entities
1. Interests in subsidiaries
(1). Subsidiaries
√Applicable □Not applicable
| Subsidiary Name | Main operating place | Registration place | Nature of business | Shareholding ratio (%) | Acquisition Method | |
| Directly | Indirectly | |||||
| Ningbo Gongniu | Ningbo, Zhejiang | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Merge under common control | |
| Gongniu Photoelectric | Ningbo, Zhejiang | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Set-up | |
| Gongniu Digital | Ningbo, Zhejiang | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Set-up | |
| Banmen Electric Appliance | Ningbo, Zhejiang | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Set-up | |
| Gongniu Precision | Ningbo, Zhejiang | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Set-up | |
| Electric Sales | Ningbo, Zhejiang | Ningbo, Zhejiang | Commercial | 100.00 | Merge under common control | |
| Cixi Gongniu | Ningbo, Zhejiang | Ningbo, Zhejiang | Commercial | 100.00 | Merge under common control | |
| Shanghai Gongniu | Shanghai | Shanghai | Commercial | 100.00 | Merge under common control | |
| Gongniu Management | Ningbo, Zhejiang | Ningbo, Zhejiang | Commercial | 100.00 | Set-up | |
| Bull International Trading | Ningbo, Zhejiang | Ningbo, Zhejiang | Commercial | 100.00 | Set-up | |
| Bull HK | Hong Kong | Hong Kong | Commercial | 100.00 | Merge under common control | |
| Xingluo Trading | Ningbo, Zhejiang | Ningbo, Zhejiang | Commercial | 100.00 | Merge under common control | |
| Gongniu Low Voltage | Ningbo, Zhejiang | Ningbo, Zhejiang | Commercial | 100.00 | Set-up | |
| Domestic Electrical Appliance | Ningbo, Zhejiang | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Set-up | |
| Hainan Dacheng | Sanya, Hainan | Sanya, Hainan | Commercial services | 100.00 | Set-up | |
| Intelligent Technology | Ningbo, Zhejiang | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Set-up |
(2). Significant non-wholly-owned subsidiary
□Applicable √Not applicable
(3). The main financial information of significant not wholly-owned subsidiary
□Applicable √Not applicable
(4). Significant restrictions on the use of assets and the settlement of debts of the Group
□Applicable √Not applicable
(5). Financial or other support to structured entities included in the scope of consolidated
financial statements
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
2. Changes occur in the owner's equity of the subsidiary, but the subsidiary's transactionsare still controlled by the Company
□Applicable √Not applicable
(1). Notes to changes in owners' equity in the subsidiary
□Applicable √Not applicable
(2). Influence of transactions on non-controlling interests and equity attributable to ownersof the Company as the parent
□Applicable √Not applicable
3. Equity in joint ventures or associated enterprises
□Applicable √Not applicable
(1). Significant joint ventures or associated enterprises
□Applicable √Not applicable
(2). Main financial information for significant joint ventures
□Applicable √Not applicable
(3). Main financial information for significant associated enterprises
□Applicable √Not applicable
(4). Summary of financial information of insignificant joint ventures or associated
enterprises
□Applicable √Not applicable
(5). Notes to significant limitations on the ability of joint ventures or associated enterprises
to transfer funds to the Company
□Applicable √Not applicable
(6). Excess losses incurred by joint ventures or associated enterprises
□Applicable √Not applicable
(7). Unconfirmed commitments related to investments of joint ventures
□Applicable √Not applicable
(8). Contingent liabilities related to investments of joint ventures or associated enterprises
□Applicable √Not applicable
4. Significant co-operation
□Applicable √Not applicable
5. Rights and interests in structured entities where not included in the consolidatedfinancial statementsNotes to the structured entity excluded in the scope of consolidated financial statements:
□Applicable √Not applicable
6. Other information
□Applicable √Not applicable
X Risks Related to Financial Instruments
√Applicable □Not applicable
The Company is engaged in risk management to achieve balance between risks and returns,minimizing the negative effects of risks on its operation performance and maximizing the interestsof its shareholders and other equity investors. Based on that risk management goal, thefundamental strategy of its risk management is to identify and analyze various risks facing theCompany, establish an appropriate risk bottom line, carry out risk management and monitorvarious risks in a timely and reliable manner to control them within a restricted scope.The Company faces various risks related to financial instruments in its routine activities,mainly including credit risk, liquidity risk market risk. The management has reviewed andapproved the policies of managing those risks, which are summarized as follows.
(I) Credit risk
Credit risk means the risk of financial losses incurred to the other party when one party of afinancial instrument is unable to fulfill its obligations.
1. Practices of credit risk management
(1) Methods for evaluating credit risk
On each balance sheet date, the Company shall evaluate whether the credit risk of relevantfinancial instruments has increased significantly since the initial recognition. After determiningwhether the credit risk has increased significantly since the initial recognition, the Company shallconsider obtaining reasonable and reliable information without paying unnecessary extra costs orefforts, including qualitative and quantitative analysis based on historical data, external credit riskrating and forward-looking information. On the basis of the single financial instrument orcombination of financial instruments with similar credit risk characteristics, the Companycompares the risk of default of financial instruments on the balance sheet date with the risk ofdefault on the initial recognition date to determine the change of default risk of financialinstruments during their expected duration.
When one or more of the following quantitative and qualitative criteria prevails, theCompany shall believe the credit risk of financial instruments has increased significantly:
1) The quantitative criteria are mainly that the probability of default in the remaining periodat the balance sheet date increases by more than a certain percentage from the time of initialrecognition;
2) The qualitative criteria are mainly material adverse changes in the debtor's operating orfinancial status, changes in the existing or expected technical, market, economic or legalenvironment that will have a material adverse impact on the debtor's ability to repay the Company.
(2) Definition of default and asset with credit impairment
When a financial instrument meets one or more of the following conditions, the Companyshall define the financial asset as having defaulted, and its criteria are consistent with thedefinition of having incurred credit impairment:
1) The debtor has major financial difficulties;
2) The debtor violates the binding clauses of the contract against the debtor;
3) The debtor is likely to go bankrupt or undergo other financial restructuring;
4) The creditor, out of economic or contractual considerations related to the debtor's financialdifficulties, gives concessions to the debtor which would not have been made in any othercircumstances.
2. Measurement of expected credit losses
The key parameters for measuring expected credit loss included default probability, lossgiven default and exposure at default. The Company considered quantitative analysis and forward-looking information of historical statistical data (such as counterparty rating, guarantee method,repayment method, etc.) to establish a model of probability of default, default loss ratio anddefault risk exposure.
3. The reconciliation of opening balances and closing balances of the provision for losses offinancial instruments is detailed in the "4. Notes receivable", "5. Accounts receivable", and "8.Other receivables" in "VII. Notes to Items in the Consolidated Financial Statements" of "Section10 Financial Reports" of the Annual Report.
4. Credit risk exposure and credit risk concentrations
The Company's credit risk is primarily derived from monetary assets and amounts receivable.To control the aforementioned relevant risks, the Company has adopted the following measures.
(1) Monetary assets
The Company deposited the bank deposit and other monetary assets to finance institutionswith higher credit rating, which lowered the credit risk.
(2) Accounts receivable
The Company continuously conducted credit assessments for customers who trade on creditlines. Based on the credit assessment result, the Company chooses to trade with recognizedcustomers with good credit and monitor the balance of the accounts receivable from them toensure that the Company will not face any significant bad debt risk.
Due to the Company merely trades with the authorized third party with good credit, theguarantee is not required. Credit risk concentration is managed in accordance with the customers.As at 31 December 2021, the Company was has certain credit concentration risks, with 70.04% ofthe Company's accounts receivable (31 December 2020: 48.77%) originating from the top fivecustomers on balance. The Company did not hold any collateral or other credit enhancements onthe balance of accounts receivable.
The maximum credit risk exposure the Company undertook shall be the carrying value ofeach financial asset on balance sheet.
(II) Liquidity risk
Liquidity risk refers to the risk of fund shortage occurring when the Company fulfills thesettlement obligation in the mode of cash delivery or other financial assets. Liquidity risk mayoriginate from the failure to sell financial assets at fair value as soon as possible; or from the otherparty’s failure to pay off its contractual debts; or from the earlier maturity of debts; or from thefailure to generate the expected cash flow.
To control the risk, the Company comprehensively used a variety of financing methods suchas bank clearing and bank borrowing, and adopted the appropriate combination of long-term andshort-term financing methods to optimize the financing structure and maintain a balance betweenfinancing sustainability and flexibility. The Company has obtained the line of credit from anumber of commercial banks to satisfy its operation fund needs and capital expenditure.
Financial liabilities classified by remaining maturity
| Item | Closing balance | ||||
| Carrying amount | Undiscounted contract amount | Within one year | 1-3 years | Over 3 years | |
| Banking borrowings | 1,161,117,444.45 | 1,172,065,444.45 | 1,172,065,444.45 | ||
| Notes payable | 2,333,774.75 | 2,333,774.75 | 2,333,774.75 | ||
| Accounts payable | 1,701,686,564.14 | 1,701,686,564.14 | 1,701,686,564.14 | ||
| Other payables | 430,813,760.10 | 430,813,760.10 | 430,813,760.10 | ||
| Current portion of non-current liabilities | 13,225,048.63 | 13,759,081.13 | 13,759,081.13 | ||
| Lease liabilities | 5,089,837.39 | 5,208,552.97 | 5,208,552.97 | ||
| Subtotal | 3,314,266,429.46 | 3,325,867,177.54 | 3,320,658,624.57 | 5,208,552.97 | |
(Continued)
| Item | Year-end balance of last year | ||||
| Carrying amount | Undiscounted contract amount | Within one year | 1-3 years | Over 3 years | |
| Banking borrowings | 660,381,944.44 | 670,962,082.19 | 510,630,684.93 | 160,331,397.26 | |
| Item | Year-end balance of last year | ||||
| Carrying amount | Undiscounted contract amount | Within one year | 1-3 years | Over 3 years | |
| Accounts payable | 1,285,822,466.71 | 1,285,822,466.71 | 1,285,822,466.71 | ||
| Other payables | 219,091,086.62 | 219,091,086.62 | 219,091,086.62 | ||
| Subtotal | 2,165,295,497.77 | 2,175,875,635.52 | 2,015,544,238.26 | 160,331,397.26 | |
(III) Market riskMarket risk refers to the risk of fluctuations in the fair value or future cash flows of financialinstruments arising from changes in market prices. Market risk mainly includes interest rate riskand foreign exchange risk.
1. Interest rate risk
Interest rate risk refers to the risk of fluctuations in the fair value or future cash flows offinancial instruments arising from changes in market interest rates. Interest-bearing financialinstruments with fixed interest rates may bring the fair value interest rate risk to the Company,while those with floating interest rate may bring the cash flow interest rate risk to the Company.The Company will determine the proportion between the financial instruments with fixed interestrate and those with floating interest rate in combination with market environment, and maintain anappropriate portfolio of financial instruments through regular review and monitoring. The interestrate risk of cash flows facing the Company is mainly related to the bank loans calculated byfloating interest rate of the Company.As at 31 December 2021, the Company had borrowed RMB1,160,000,000.00 from banks andthe interest rate change would not have a significant influence on the Company's gross profit andshareholders' equity.
2. Foreign exchange risk
Foreign exchange risk refers to the risk that may lead to the changes of fair value of financialinstruments or future cash flows due to fluctuation in exchange rate. The Company operates inmainland China, and the main activities are recorded by RMB. Thus, the foreign exchange marketrisk undertaken is insignificant for the Company.
The Company's foreign currency monetary assets and liabilities at the end of the period aredetailed in "82. Foreign currency monetary items" in "VII. Notes to Items in ConsolidatedFinancial Statements" of "Section 10 Financial Report" of the Annual Report.XI The Disclosure of Fair Value
1. Closing fair value of assets and liabilities measured at fair value
√Applicable □Not applicable
Unit: RMB
| Item | Closing fair value | |||
| Fair value measurement items at level 1 | Fair value measurement items at level 2 | Fair value measurement items at level 3 | Total | |
| I. Consistent fair value measurement | ||||
| (I) Held-for-trading financial assets | ||||
| 1. Financial assets measured at fair value through profit or loss for the current period | ||||
| (1) Debt instrument investments | ||||
| (2) Equity instruments investments | ||||
| (3) Derivative financial assets | 3,613,050.00 | 3,613,050.00 | ||
| (4) Asset management plan | 2,670,000,000.00 | 2,670,000,000.00 | ||
| (5) Banking WM product | 1,936,600,000.00 | 1,936,600,000.00 | ||
| (6) Trust product | 1,120,000,000.00 | 1,120,000,000.00 | ||
| (7) Securities return voucher | 200,000,000.00 | 200,000,000.00 | ||
| 2. Designated financial assets at fair value through profit or loss | ||||
| (1) Debt instrument investments | ||||
| (2) Equity instruments investments | ||||
| (II) Other debt investments | ||||
| (III) Other equity investments | ||||
| (IV) Investment property | ||||
| 1. Land use right for rent | ||||
| 2. Buildings for rent | ||||
| 3. Land use right held and to be transferred after appreciation | ||||
| (V) Biological assets | ||||
| 1. Consumptive biological assets | ||||
| 2. Productive living assets | ||||
| The total amount of assets consistently measured at fair value | 3,613,050.00 | 5,926,600,000.00 | 5,930,213,050.00 | |
| (VI) Held-for-trading financial liabilities | ||||
| 1. Financial liabilities measured at fair value through profit or loss for the current period | ||||
| Of which: Issued trading bonds | ||||
| Derivative financial liabilities | ||||
| Others | ||||
| 2. Designated as a financial liabilities measured at fair value through profit or loss for the current period | ||||
| Total amount of liabilities at fair value | ||||
| II. Inconsistent Fair Value Measurement | ||||
| (II) Assets held for sale | ||||
| Total assets of inconsistent fair value measurement | ||||
| Total liabilities of inconsistent fair value measurement |
1.1 Basis for determining the market prices of consistent and inconsistent fair valuemeasurement items at Level 1
√Applicable □Not applicable
The Company's first-level item measured at fair value is derivative financial assets (futurescontract), which determines the fair value based on the public quotation of the futures market.
2. Valuation technique adopted and qualitative and quantitative information of important
parameters for consistent and inconsistent fair value measurement items at Level 2
□Applicable √Not applicable
3. Valuation technique adopted and qualitative and quantitative information of important
parameters for consistent and inconsistent fair value measurement items at Level 3
√Applicable □Not applicable
The Company's third-level items measured at fair value are bank wealth managementproducts and trust products, etc., with a low expected yield rate and a small change in fair value,so the initial recognition cost is used as its fair value.
4. Reconciliation information between opening and closing carrying value, and sensitivity
analysis of unobservable parameters of third-level items measured consistently at fair
value
□Applicable √Not applicable
5. The reason for the conversion and the policy for determining the timing of the
conversion, where there is a conversion between the various levels for the current
period in items consistently measured at fair value
□Applicable √Not applicable
6. Technical changes in valuation techniques that occurred for the current period and the
reasons for the changes
□Applicable √Not applicable
7. Fair value of financial assets and financial liabilities not measured at fair value
□Applicable √Not applicable
8. Other information
□Applicable √Not applicable
XII Related Party and Related-party Transaction
1. The Company as the parent of the Company
√Applicable □Not applicable
Unit: RMB
| Name | Registration place | Nature of business | Registered capital | Shareholding percentage held by the Company as the parent to the Company | Proportion of voting rights owned by the Company as the parent to the Company (%) |
| Liangji Industrial | Ningbo, Zhejiang | Investment | 500,000,000.00 | 53.89 | 53.89 |
Notes: Information on the Company as the parent
Ruan Liping and Ruan Xueping are the joint actual controllers of the Company, and the twojointly hold 100% of the equity of Liangji Industrial, 53.89% of the equity of the Companythrough Liangji Industrial, and directly hold 32.22% of the equity of the Company through theNingbo Ninghui Investment Management Partnership (Limited Partnership), indirectly holds
0.68% of the voting rights of the Company and indirectly holds 0.30% of the voting rights of theCompany through the Ningbo Suiyuan Investment Management Partnership (Limited Partnership).The ultimate controllers of the Company are Ruan Liping and Ruan Xueping.
2. Subsidiaries of the Company
Details of the subsidiaries of the Company are in the notes
√Applicable □Not applicable
The Company's subsidiaries are detailed in "IX. Interests in Other Entities" of "Section 10Financial Report" of the Annual Report
3. Joint ventures and associated enterprises of the Company
Details of joint ventures and associated enterprises of the Company are in the notes
□Applicable √Not applicable
The following are the circumstances of other joint ventures or associated enterprises that have abalance with the Company for the current period or that have formed balances from related-partytransactions with the Company for the previous period
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
4. Other related party
√Applicable □Not applicable
| Name of other related party | Relationship with the Company |
| Ruan Shuhong | Daughter of the actual controller Ruan Liping |
| Ying Jianguo | Brother-in-law of Director Cai Yingfeng |
| Xia Zhonggui | Brother of Supervisor Li Yu's spouse |
| Yu Shoufu | Father of Director Cai Yingfeng's daughter Cai Mengshu's spouse |
| Baidi Electrics | A company controlled by Sun Xiaoping, the spouse of the actual controller, Ruan Xueping |
| Liangniu Hardware | A company controlled by the actual controller, Ruan Liping's wife's brother Pan Minfeng and his wife Xu Yirong |
| Hangniu Hardware | A company controlled by the actual controller, Ruan Liping's wife's brother Pan Minfeng and his wife Xu Yirong |
| Feiniu Hardware | The actual controller Ruan Liping's wife's brother Pan Minfeng and his wife Xu Yirong's son Pan Qianliang holds 55% of the shares, and Xu Yirong holds 45% of the shares |
| Niuweiwang Trading | A company controlled by Yu Shoufu, father of Director Cai Yingfeng's daughter's spouse |
| Cixi Libo | The main body controlled by Cai Libo, sister of Director Cai Yingfeng |
| Jianke Trading | A company controlled by the Ying Jianguo, brother-in-law of Director Cai Yingfeng |
| Yaoyang Trading | Zhang Meina, sister of Senior Executive Zhang Lina, holds 40% of the shares, and Xu Yanhao, son of Zhang Meina, holds 60% of the shares |
| Huantian Trading | Zhang Meina, sister of Senior Executive Zhang Lina, holds 1.33% of the shares, and Xu Yanhao, son of Zhang Meina, holds 98.67% of the shares< |
| Chenhao Electronic | A company controlled by Xia Zhonggui, brother of Supervisor Li Yu's spouse, and his spouse Zeng Minhui |
5. Related-party transactions
(1). Related-party transactions of purchase and sale of goods, provision and acceptance of
servicesInformation on acquisition of goods and reception of labor service
□Applicable √Not applicable
Information of sales of goods and provision of labor service
√Applicable □Not applicable
Unit: RMB
| Related party | Content | 2021 | 2020 |
| Liangniu Hardware | Adapters, wall switches, LEDs, digital products | 19,286,108.43 | 25,692,578.69 |
| Hangniu Hardware | Adapters, wall switches, LEDs, digital products | 35,795,907.44 | 35,572,317.82 |
| Feiniu Hardware | Adapters, digital products | 1,282,944.42 | 2,727,584.86 |
| Subtotal of Hangniu Hardware [note] | 56,364,960.29 | 63,992,481.37 | |
| Huantian Trading | Adapters, LEDs, digital products | 12,206,053.32 | 8,896,692.07 |
| Niuweiwang Trading | Adapters, LEDs | 21,108,464.96 | 18,101,438.63 |
| Jianke Trading | Adapters, LEDs, digital products | 10,814,536.24 | 12,085,364.10 |
| Cixi Libo | Adapters, LEDs, digital products | 11,075,424.86 | 10,617,022.78 |
| Chenhao Electronic | Digital products, Adapters | 894,547.84 | 784,582.86 |
| Subtotal | 112,463,987.51 | 114,477,581.81 |
Notes to acquisition of goods and reception of labor service
√Applicable □Not applicable
[Note] Hangniu Hardware includes Hangniu Hardware, Liangniu Hardware, and Feiniu Hardware.Liangniu Hardware and Hangniu Hardware are controlled by Pan Minfeng and his spouse XuYirong; Feiniu Hardware is 55% owned by Pan Minfeng's son Pan Qianliang and 45% owned byXu Yirong.
(2). Related entrusted management/contracting and entrusted management/outsourcingLists of trusteeship/contract:
□Applicable √Not applicable
Notes:
□Applicable √Not applicable
Entrusted management/contracting of the Company
□Applicable √Not applicable
Notes:
□Applicable √Not applicable
(3). Information on related-party lease
The Company was lessor:
□Applicable √Not applicable
The Company was lessee:
√Applicable □Not applicable
Unit: RMB
| Name of lessor | Category of leased assets | The lease fee confirmed in the Reporting Period | The lease fee confirmed in the same period of last year |
| Ruan Shuhong | Houses and buildings | 799,598.46 | 624,000.00 |
| Baidi Electrics | Vehicle | 81,471.29 | |
| Total | 799,598.46 | 705,471.29 |
Notes:
□Applicable √Not applicable
(4). Information on related-party guarantee
The Company was guarantor:
□Applicable √Not applicable
The Company was secured party
√Applicable □Not applicable
Unit: RMB'0,000
| Guarantor: | Amount of guarantee | Start date | End date | Execution accomplished or not |
| Liangji Industrial | 16,000.00 | 28 December 2020 | 27 January 2022 | Yes |
| Liangji Industrial | 50,000.00 | 8 April 2021 | 7 May 2022 | No |
Notes:
√Applicable □Not applicable
Guarantees that have expired before the reporting date are processed as completed.
(5). Borrowings of funds
□Applicable √Not applicable
(6). Information on assets transfer and debt restructuring by related party
□Applicable √Not applicable
(7). Remuneration for key management personnel
√Applicable □Not applicable
Unit: RMB'0,000
| Item | 2021 | 2020 |
| Remuneration for key management personnel | 2,436.63 | 2,089.16 |
(8). Other related transaction
□Applicable √Not applicable
6. Accounts receivable and payable of related party
(1). Accounts receivable
□Applicable √Not applicable
(2). Accounts payable
√Applicable □Not applicable
Unit: RMB
| Project | Related party | Closing carrying | Opening carrying amount |
| amount | |||
| Contract liabilities | Liangniu Hardware | 1,500,950.96 | 32,690.76 |
| Contract liabilities | Jianke Trading | 322,837.70 | 934,206.12 |
| Contract liabilities | Cixi Libo | 157,748.83 | 709,155.01 |
| Contract liabilities | Hangniu Hardware | 96,061.89 | 1,045,591.50 |
| Contract liabilities | Huantian Trading | 28,959.98 | 2,156,284.68 |
| Contract liabilities | Niuweiwang Trading | 13,432.85 | 1,520,723.27 |
| Contract liabilities | Feiniu Hardware | 11,914.81 | 234.58 |
| Contract liabilities | Yaoyang Trading | 3,461.19 | 3,461.19 |
| Contract liabilities | Chenhao Electronic | 2,727.19 | 13,855.94 |
| Subtotal | 2,138,095.40 | 6,416,203.03 | |
| Other current liabilities | Liangniu Hardware | 195,123.62 | 4,249.80 |
| Other current liabilities | Jianke Trading | 41,968.90 | 121,446.79 |
| Other current liabilities | Cixi Libo | 20,507.35 | 92,190.15 |
| Other current liabilities | Hangniu Hardware | 12,488.05 | 135,926.89 |
| Other current liabilities | Huantian Trading | 3,764.80 | 280,317.01 |
| Other current liabilities | Niuweiwang Trading | 1,746.27 | 197,694.02 |
| Other current liabilities | Feiniu Hardware | 1,548.92 | 30.49 |
| Other current liabilities | Yaoyang Trading | 449.95 | 449.95 |
| Other current liabilities | Chenhao Electronic | 354.53 | 1,801.27 |
| Subtotal | 277,952.39 | 834,106.39 | |
| Other payables | Hangniu Hardware | 70,000.00 | 70,000.00 |
| Other payables | Liangniu Hardware | 70,000.00 | 70,000.00 |
| Other payables | Cixi Libo | 30,000.00 | 30,000.00 |
| Other payables | Yaoyang Trading | 30,000.00 | 30,000.00 |
| Other payables | Jianke Trading | 20,000.00 | 20,000.00 |
| Other payables | Niuweiwang Trading | 20,000.00 | 20,000.00 |
| Other payables | Feiniu Hardware | 20,000.00 | 20,000.00 |
| Other payables | Huantian Trading | 20,000.00 | 20,000.00 |
| Other payables | Chenhao Electronic | 10,000.00 | 10,000.00 |
| Subtotal | 290,000.00 | 290,000.00 |
7. Commitments of related party
□Applicable √Not applicable
8. Other information
□Applicable √Not applicable
XIII Share-based Payment
1. Overall status of share payments
√Applicable □Not applicable
Unit: Share
| The total amount of equity instruments granted by the Company for the current period | 668,400.00 |
| The total amount of the Company's equity instruments exercised for the current period | 215,520.00 |
| The total amount of equity instruments of the Company losing efficacy for the current period | |
| The range of exercise prices of stock options issued and outstanding at the end of the period of the Company and the remaining term of the contract | |
| The scope of exercise prices of other equity instruments issued by the Company at the end of the reporting period and the remaining term of contracts | The exercise price of restricted shares in 2020 was: RMB76.13; the remaining contract term was: 1.5 years; the exercise price of restricted shares in 2021 was: RMB88.15; the remaining contract term was: 2.5 years. |
Other notes:
(1) Restricted share incentive scheme in 2020
The Company held the 12th Meeting of the 1st Board of Directors of the Company and the2019 Annual General Meeting, where the Proposal on the Company's Restricted Share IncentiveScheme in 2020 (Draft) and Its Summary, Proposal on Adjusting the List of Incentive Targets, theNumber of Grants and the Grant Price of the Restricted Share Incentive Scheme in 2020 and theProposal on Granting Restrictive Shares to Incentive Targets were deliberated and adopted. TheCompany decided to grant 613,800 restricted shares to 441 incentive subjects who met theconditions for the grant at a price of RMB76.13 per share, with an equity grant date of 3 June2020.The main performance appraisal requirements for restricted shares: For the first releaseperiod, the performance appraisal target was the operating revenue or net profit attributable to theshareholders of the listed company in 2020 was not less than the average of the previous threefiscal years (i.e. 2017 - 2019); for the second release period, the performance appraisal target wasthe operating revenue or net profit attributable to the shareholders of the listed company in 2021was not lower than the average of the previous three fiscal years (i.e. 2018 - 2020); for the thirdrelease period, the performance appraisal target was the operating revenue or net profit attributableto the shareholders of the listed company in 2022 was not lower than the average of the previousthree fiscal years (i.e. 2019 - 2021).In 2021, the Company's restricted share incentive scheme in 2020 recognized equityincentive expenses of RMB18,904,562.82.
(2) Restricted share incentive scheme in 2021
The Company held the 5th Meeting of the 2nd Board of Directors of the Company and the2020 Annual General Meeting, where the Proposal on the Company's Restricted Share IncentiveScheme in 2021 (Draft) and Its Summary, Proposal on Adjusting the List of Incentive Targets, theNumber of Grants and the Grant Price of the Restricted Share Incentive Scheme in 2021 and theProposal on Granting Restrictive Shares to Incentive Targets were deliberated and adopted. TheCompany decided to grant 668,400 restricted shares to 523 incentive subjects who met theconditions for the grant at a price of RMB88.15 per share, with an equity grant date of 4 June2021.
The main performance appraisal requirements for restricted shares: For the first releaseperiod, the performance appraisal target was the operating revenue or net profit attributable to theshareholders of the listed company in 2021 was not less than 110% of the average of the previousthree fiscal years (i.e. 2018 - 2020); for the second release period, the performance appraisal targetwas the operating revenue or net profit attributable to the shareholders of the listed company in2022 was not lower than 110% of the average of the previous three fiscal years (i.e. 2019 - 2021);for the third release period, the performance appraisal target was the operating revenue or netprofit attributable to the shareholders of the listed company in 2023 was not lower than 110% ofthe average of the previous three fiscal years (i.e. 2020 - 2022).
As at 22 June 2021, the Company has received a total of RMB58,919,460.00 in restrictedshare subscription payments from 523 incentive subjects in monetary assets, of whichRMB668,400.00 is included in the paid-up share capital, and RMB58,251,060.00 in capitalreserves (share capital premium). The matter was examined by Pan-China Certified PublicAccountants LLP, which issued the Capital Verification Report (T.J.Y. [2021] No. 343).
In 2021, the Company's restricted share incentive scheme in 2021 included in the equityincentive expense of RMB22,185,891.00.
2. Equity-settled share payments
√Applicable □Not applicable
Unit: RMB
| Methods for determining the fair value of equity instruments on the grant date | The fair value of the restricted shares is the closing price on the grant date |
| Basis for determining the number of feasible right equity instruments | The number of people expected to exercise the rights is multiplied by the number granted per person |
| Reasons for the significant discrepancy between |
| the current period estimates and the previous estimates | |
| Equity-settled share-based payments were included in the cumulative amount of capital reserves | RMB61,686,648.76 |
| The total amount of the expense recognized for the current period paid on equity-settled shares | RMB41,090,453.82 |
Other notes:
The Company accounts for the above share payments in line with the relevant provisions ofshare-based payments in Accounting Standard for Business Enterprises as equity-settled share-based payments, and on each balance sheet date of the waiting period, on the basis of the bestestimate of the number of viable equity instruments, the services received in the current period areincluded in the administrative expense based on the fair value of the equity instruments granted onthe grant date, and the capital reserves (other capital reserves) of RMB41,090,453.82 are added.
3. Cash-settled share payments
□Applicable √Not applicable
4. Modification or termination of share payments
□Applicable √Not applicable
5. Others
√Applicable □Not applicable
On 23 April 2020, the Company held the 11th Meeting of the 1st Board of Directors, wherethe Special Talent Shareholding Plan was deliberated and adopted, which granted shares of theSpecial Talent Shareholding Plan to eligible employees of the Company. The number of peopleinvolved included supervisors, specially introduced talents and talents with special contribution,and the number of people did not exceed 23. The source of funds for the shareholding plan is thespecial fund of the shareholding plan accrued by the Company, and the total amount of funds forthe shareholding plan is RMB50,000,000, RMB1 per share. The source of stock in theshareholding plan is the A-share common stock of the Company acquired in the secondary market.
After the Company's performance evaluation target under the current shareholding plan isachieved, the corresponding interests of the underlying stock of the holders will be vested to theholders in batches in line with the evaluation situation in the year of attribution. If there is anyremaining unallocated underlying stock and its corresponding dividends (if any), they will allbelong to the Company.
The duration of the shareholding plan is 60 months, counting from the date of completion ofthe acquisition of the underlying stock announced by the Company. Before the expiration of theduration, it may be extended after the shareholding plan management committee submits it to theBoard of Directors for deliberation and adoption.
The lock-up period for each batch of the subject shares under the shareholding plan is 12months, 24 months, 36 months and 48 months, respectively, and the lock-up period is calculatedfrom the date of the Company's disclosure of the completion of the stock acquisition in thesecondary market, and no transactions shall be carried out during the lock-up period.
After the expiration of the lock-up period, it is divided into four batches, and the specificattribution arrangement of each batch is as follows: Attribution of the 1st batch: 12 months fromthe date of completion of the Company's announcement of the completion of the stock acquisition,the planned attribution amount is 25% of the total number of stock subject to the shareholdingplan. Attribution of the 2nd batch: 24 months from the date of completion of the stock acquisitionannounced by the Company, the planned attribution amount is 25% of the total number of stocksubject to the shareholding plan. Attribution of the 3rd batch: 36 months from the date ofcompletion of the stock acquisition announced by the Company, the planned attribution amount is25% of the total number of stock subject to the shareholding plan. Attribution of the 4th batch: 48months from the date of completion of the stock acquisition announced by the Company, theplanned attribution amount is 25% of the total number of stock subject to the shareholding plan.
The evaluation target for the attribution of each batch under the shareholding plan is that theoperating revenue or net profit for the current year is not lower than the average of the previousthree fiscal years.
On 25 September 2020, Sinolink Securities Co., Ltd., the manager entrusted by the Company,has completed the stock acquisition of the 2020 Special Talent Shareholding Plan through the2020 Special Talent Shareholding Single Asset Management Plan of Sinolink Securities andGongniu Group, with a total acquisition of 322,000 shares, a transaction amount ofRMB50,002,409, and an average transaction price of RMB155.29 per share.
The Company actually granted 3,600,000 shares of the 2020 employee shareholding plan and26,592,932.00 shares of the 2021 employee shareholding plan, and recovered 5,290,548.00 sharesdue to the resignation of employees. The Company presents the granted share of the plan as the
long-term prepaid expense, confirmed the amortization of share payment by the evaluation period,and presents the portion not granted as the other non-current assets. In 2021, the Company'samortization by service period was included in the administrative expense of RMB6,701,548.01for the current period.XIV. Commitment and Contingency
1. Significant commitment
√Applicable □Not applicable
The external significant commitments, nature and amounts that exist on the balance sheet dateAs at 31 December 2021, the Company's public offerings to raise funds for investment itemsare as follows:
| Project | Fund raising Investment amount (RMB'0,000) | Amount used Raised fund (RMB'0,000) |
| Base construction project for annual output of 410 million sets of wall switches and sockets | 75,452.86 | 24,948.38 |
| Construction project for automation upgrading of annual output of 400 million sets of converters | 58,883.63 | 30,147.31 |
| Base, R&D center and headquarters base construction project for an annual output of 180 million sets of LED lamps | 115,203.61 | 32,096.12 |
| Information construction project | 16,035.00 | 8,762.33 |
| Channel terminal construction and brand promotion projects | 84,745.75 | 25,603.52 |
| Total | 350,320.85 | 121,557.66 |
2. Contingency
(1). Significant contingencies existing on the balance sheet date
□Applicable √Not applicable
(2). If the Company does not have significant contingencies to be disclosed, it should also bestated:
□Applicable √Not applicable
3. Others
□Applicable √Not applicable
XV Subsequent Events after the Balance Sheet Date
1. Significant non-adjusting event
□Applicable √Not applicable
2. Profit distribution
√Applicable □Not applicable
Unit: RMB
| Profit or dividend to be distributed | 1,442,833,248.00 |
| Profit or dividend announced to issue |
after review and approval
3. Sales Returns
□Applicable √Not applicable
4. Notes to other events after balance sheet date
√Applicable □Not applicable
(1) Profit appropriation after balance sheet date
On 11 April 2022, the Company held the 10th Meeting of the 2nd Board of Directors, wherethe 2021 Annual Profit Appropriation Plan was passed. Based on the total share capital registeredon the record date of the implementation of the equity appropriation, and the Company intended toallocate a cash dividend of RMB24 (including tax) to all shareholders for every 10 shares,calculated based on the total share capital of the Company as at the date of approval of the report,with a total cash dividend of RMB1,442,833,248.00 to be allocated.
(2) Restricted shared incentive scheme in 2022
In line with the Restricted Share Incentive Scheme in 2022 approved at the 10th Meeting ofthe Company's 2nd Board of Directors on 11 April 2022, the Company granted a total of 1.55million restricted shares to 670 incentive subjects at a certain price. The restricted share incentivescheme shall be implemented after the approval of the Company's General Meeting.
The restricted shares granted by the incentive scheme shall be evaluated for performance inthree years during the release period and the restriction will be released, to achieve theperformance evaluation target as the condition for releasing the restriction on the incentivesubjects. For the 1st release period, the operating revenue or net profit in 2022 is not less than theaverage of the previous three fiscal years (i.e. 2019 - 2021) and not less than 110% of the averageof the previous two fiscal years (i.e. 2020 - 2021); for the 2nd release period, the operatingrevenue or net profit in 2023 is not less than the average of the previous three fiscal years (i.e.2020 - 2022) and not less than 110% of the average of the previous two fiscal years (i.e. 2021 -2022); for the third release period, the operating revenue or net profit in 2024 is not less than theaverage of the previous three fiscal years (i.e. 2021 - 2023) and not less than 110% of the averageof the previous two fiscal years (i.e. 2022 - 2023).
(3) The Company's stock repurchase scheme
The Company held the 10th Meeting of the 2nd Board of Directors on 11 April 2022, whereit intended to repurchase its shares through a call auction transaction with its own funds, and the
repurchase price shall not exceed RMB203 per share (inclusive); the total amount of repurchaseshall not be less than RMB200,000,000 (inclusive) and shall not exceed RMB300,000,000(inclusive), and the repurchase period shall be within 12 months from the date when theCompany's Board of Directors deliberates and adopts the repurchase scheme.The shares repurchased by the Company will be used for equity incentives at an appropriatetime in the future, and will be transferred within three years after the date of the announcement ofthe implementation of the share repurchase and the announcement of the change of shares. If it isnot transferred, the Company will perform the procedures for deducting the registered capital inaccordance with the law, and the shares not transferred will be canceled.XVI Other Significant Events
1. Correction of prior-period accounting errors
(1). Retrospective restatement
□Applicable √Not applicable
(2). Prospective application
□Applicable √Not applicable
2. Debt reorganization
□Applicable √Not applicable
3. Asset replacement
(1). Exchange of non-monetary assets
□Applicable √Not applicable
(2). Replacement of other assets
□Applicable √Not applicable
4. Annuity plan
□Applicable √Not applicable
5. Termination of business
□Applicable √Not applicable
6. Segment information
(1). Basis for the determination of the reporting segment and accounting policies
√Applicable □Not applicable
The Company determines the reporting segment on the basis of the regional division, theincome from principal businesses and the cost of principal business are divided based on the finalsales place, and the assets and liabilities are divided based on the location of the operating entity.
(2). Financial information of reporting segment
√Applicable □Not applicable
Unit: RMB
| Item | Domestic | Overseas | Offset among segment | Total | |
| Domestic company | Overseas company | ||||
| Principal business revenue | 12,059,354,004.16 | 277,516,686.13 | 12,336,870,690.29 | ||
| Principal operating cost | 7,536,455,016.87 | 254,307,737.60 | 7,790,762,754.47 | ||
| Total assets | 15,473,709,339.85 | 195,326.77 | 15,473,904,666.62 | ||
| Total liabilities | 4,718,130,450.63 | 22,639.36 | 4,718,153,089.99 | ||
(3). If the Company does not report the segment, or cannot disclose the total assets andliabilities of each reporting segment, the reasons should be explained
□Applicable √Not applicable
(4). Other notes:
√Applicable □Not applicable
On 18 August 2021, the Company signed the Equity Transfer Agreement with DalitekIntelligent Technology (Shanghai) Inc. (hereinafter referred to as "Dalitek") and its shareholdersBRIDGES ELECTRONIC TECHNOLOGY CO., LTD., Shanghai Houqi Investment Center(Limited Partnership) and natural person shareholders Pan Xiaobin and Zhang Wenying, agreeingthat 70% of the equity interests of the Company held by the shareholders be transferred at theprice of RMB91,000,000, the down payment of RMB63,700,000 shall be made within 10 businessdays after the completion of the relevant procedures and the delivery of the assets, and theremaining equity transfer payment shall be made in three years in line with the completion of theperformance commitment.As at 13 December 2021, the Company had paid a total of RMB26.9907 million for theequity transfer, which had not yet reached 50% of the amount payable, so Dalitek was notincluded in the Company's 2021 consolidated financial statements.On 21 January 2022, the Company made the remaining equity transfer payment ofRMB36.7093 million for the down payment, which completed the down payment for the equitytransfer.
7. Other significant transactions and events that have an influence on investors' decisions
□Applicable √Not applicable
8. Other information
□Applicable √Not applicable
XVII. Notes to Main Items in the Financial Statements of the Company as the Parent
1. Accounts receivable
(1). Disclosure by aging
√Applicable □Not applicable
Unit: RMB
| Aging | Closing carrying amount |
| Within one year | |
| Of which: Sub-items within one year | |
| Subtotal within one year | 3,982,866.46 |
| 1 to 2 years | |
| 2 to 3 years | |
| Over 3 years | |
| 3 to 4 years | |
| 4 to 5 years | |
| Over 5 years | |
| Total | 3,982,866.46 |
(2). Classified disclosure based on the bad debt provision method
√Applicable □Not applicable
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Carrying balance | Bad debt provision | Carrying value | Carrying balance | Bad debt provision | Carrying value | |||||
| Amount | Proportion (%) | Amount | Accrued proportion (%) | Amount | Proportion (%) | Amount | Accrued proportion (%) | |||
| Bad debt provision accrued by item | ||||||||||
| Of which: | ||||||||||
| Bad debt provision accrued by portfolio | 3,982,866.46 | 100.00 | 199,143.32 | 5.00 | 3,783,723.14 | 13,423,341.19 | 100.00 | 671,167.06 | 5.00 | 12,752,174.13 |
| Of which: | ||||||||||
| Total | 3,982,866.46 | 100.00 | 199,143.32 | 5.00 | 3,783,723.14 | 13,423,341.19 | 100.00 | 671,167.06 | 5.00 | 12,752,174.13 |
Bad debt provision accrued by item:
□Applicable √Not applicable
Bad debt provision accrued by portfolio:
√Applicable □Not applicable
Unit: RMB
| Name | Closing balance | ||
| Accounts receivable | Bad debt provision | Accrued proportion (%) | |
| Within one year | 3,982,866.46 | 199,143.32 | 5.00 |
| Total | 3,982,866.46 | 199,143.32 | 5.00 |
Criteria and explanation of bad debt provision accrued by portfolio:
□Applicable √Not applicable
To accrue bad debt provision under the expected general model of credit loss, please refer to thedisclosure of other receivables:
□Applicable √Not applicable
(3). Status of bad debt provision
√Applicable □Not applicable
Unit: RMB
| Category | Opening balance | Changes for the current period | Closing balance | |||
| Accrued amount | Reversed or recovered | Charged-off or written-off | Other changes | |||
| Bad debt provision accrued by portfolio | 671,167.06 | -472,023.74 | 199,143.32 | |||
| Total | 671,167.06 | -472,023.74 | 199,143.32 | |||
Of which significant amount of recovered or transferred-back bad debt provision for the currentperiod:
□Applicable √Not applicable
(4). Status of written-off accounts receivable for the current period
□Applicable √Not applicable
Of which the writing-off of significant accounts receivable
□Applicable √Not applicable
(5). Status of accounts receivable of the top five closing balances by the parties in arrears
√Applicable □Not applicable
Unit: RMB
| Name of entity | Closing balance | Proportion in total closing balances of accounts receivable (%) | Closing balance of bad debt provision |
| Ningbo Gongniu | 2,677,692.31 | 67.23 | 133,884.62 |
| Credit Card Center of China Construction Bank Co., Ltd. | 1,195,144.00 | 30.01 | 59,757.20 |
| Bull International Trading | 39,150.76 | 0.98 | 1,957.54 |
| National Super Computer Center in Tianjin | 31,954.00 | 0.80 | 1,597.70 |
| Retail customers | 23,533.14 | 0.59 | 1,176.66 |
| Total | 3,967,474.21 | 99.61 | 198,373.72 |
(6). Accounts receivable derecognized due to transfers of financial assets
□Applicable √Not applicable
(7). Amount of assets and liabilities formed due to transfer of accounts receivable andcontinuous involvement
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
2. Other receivables
List of items
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividends receivable | 2,000,000,000.00 | 1,000,000,000.00 |
| Other receivables | 1,038,980,082.79 | 686,576,004.18 |
| Total | 3,038,980,082.79 | 1,686,576,004.18 |
Other notes:
□Applicable √Not applicable
Interest receivable
(1). Category of interest receivables
□Applicable √Not applicable
(2). Significant overdue interest
□Applicable √Not applicable
(3). Status of accrued bad debt provision
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
(4). Dividends receivable
√Applicable □Not applicable
Unit: RMB
| Project (or investee) | Closing balance | Opening balance |
| Ningbo Gongniu | 1,000,000,000.00 | 1,000,000,000.00 |
| Electric Sales | 700,000,000.00 | |
| Gongniu Photoelectric | 300,000,000.00 | |
| Total | 2,000,000,000.00 | 1,000,000,000.00 |
(5). Significant dividends receivable aged over one year
□Applicable √Not applicable
(6). Status of accrued bad debt provision
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
Other receivables
(1). Disclosure by aging
√Applicable □Not applicable
Unit: RMB
| Aging | Closing carrying amount |
| Within one year | |
| Of which: Sub-items within one year | |
| Subtotal within one year | 1,091,314,971.96 |
| 1 to 2 years | 1,611,099.90 |
| 2 to 3 years | 1,561,739.04 |
| Over 3 years | 2,381,885.77 |
| 3 to 4 years | |
| 4 to 5 years | |
| Over 5 years | |
| Total | 1,096,869,696.67 |
(2). Classification by nature of payments
√Applicable □Not applicable
Unit: RMB
| Nature | Closing carrying amount | Opening carrying amount |
| Intercourse funds | 1,000,999,087.76 | 714,572,754.19 |
| Guaranteed deposit | 88,048,852.00 | 2,650,000.00 |
| Housing loan for employees | 7,347,019.79 | 8,475,021.98 |
| Others | 474,737.12 | 82,714.00 |
| Total | 1,096,869,696.67 | 725,780,490.17 |
(3). Status of accrued bad debt provision
√Applicable □Not applicable
Unit: RMB
| Bad debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit loss in the next 12 months | Expected loss for the entire duration (without credit impairment) | Expected credit losses for the entire duration (with credit impairment) | ||
| Balance as at January 1, 2021 | 35,870,635.01 | 430,662.54 | 2,903,188.44 | 39,204,485.99 |
| Balance on January 1, 2021 for the current period | —— | —— | —— | |
| - Transferred to Stage 2 | -80,555.00 | 80,555.00 | ||
| - Transferred to Stage 3 | -394,362.48 | 394,362.48 | ||
| - Transferred back to Stage 2 | ||||
| - Transferred back to Stage 1 | ||||
| Amount accrued for the current period | 18,775,668.59 | 44,254.93 | -134,795.63 | 18,685,127.89 |
| Amount transferred-back for the current period | ||||
| Amount charged-off for the current period | ||||
| Amount written-off for the current period | ||||
| Other changes | ||||
| Balance as at 31 | 54,565,748.60 | 161,109.99 | 3,162,755.29 | 57,889,613.88 |
December 2021
Notes to significant changes in the carrying amount of other receivables for which changes in theloss reserve for the current period occurred:
□Applicable √Not applicable
The amount of bad debt provision for the current period and the basis for assessing whether thecredit risk of financial instruments has increased significantly:
□Applicable √Not applicable
(4). Status of bad debt provision
□Applicable √Not applicable
(5). Status of written-off other receivable for the current period
□Applicable √Not applicable
(6). Status of other receivables of the top five closing balances by the parties in arrears
√Applicable □Not applicable
Unit: RMB
| Name of entity | Nature | Closing balance | Aging | Proportion in total closing balances of other receivables (%) | Bad debt provision Closing balance |
| Gongniu Photoelectric | Intercourse funds | 657,729,993.64 | Within one year | 59.96 | 32,886,499.68 |
| Gongniu Digital | Intercourse funds | 120,660,975.62 | Within one year | 11.00 | 6,033,048.78 |
| Cixi Gongniu | Intercourse funds | 96,700,000.00 | Within one year | 8.82 | 4,835,000.00 |
| Shanghai Caohejing Development Zone Zhaoxiang Emerging Industry Economic Development Co., Ltd. | Guaranteed deposit | 87,400,852.00 | Within one year | 7.97 | 4,370,042.60 |
| Hainan Dacheng | Intercourse funds | 65,458,355.42 | Within one year | 5.97 | 3,272,917.77 |
| Total | / | 1,027,950,176.68 | 93.72 | 51,397,508.83 |
(7). Accounts receivable involving government grants
□Applicable √Not applicable
(8). Other receivables derecognized due to transfers of financial assets
□Applicable √Not applicable
(9). Amount of assets and liabilities formed due to transfer of other receivables and
continuous involvement
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
3. Long-term equity investments
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Carrying balance | Depreciation reserves | Carrying amount | Carrying balance | Depreciation reserves | Carrying amount | |
| Investment to subsidiaries | 441,959,500.17 | 441,959,500.17 | 405,057,095.11 | 405,057,095.11 | ||
| Investment to joint ventures and associated enterprises | ||||||
| Total | 441,959,500.17 | 441,959,500.17 | 405,057,095.11 | 405,057,095.11 | ||
(1). Investment to subsidiaries
√Applicable □Not applicable
Unit: RMB
| Investee | Opening balance | Increase for the current period | Decrease for the current period | Closing balance | Depreciation reserves accrued for the current period | Closing balance of depreciation reserve |
| Ningbo Gongniu | 134,194,532.81 | 8,525,964.85 | 142,720,497.66 | |||
| Gongniu Photoelectric | 11,523,525.00 | 4,612,468.74 | 16,135,993.74 | |||
| Gongniu Digital | 11,629,320.88 | 3,047,808.26 | 14,677,129.14 | |||
| Banmen Electric Appliance | 10,713,034.88 | 833,107.38 | 11,546,142.26 | |||
| Gongniu Precision | 100,638,808.63 | 1,502,630.20 | 102,141,438.83 | |||
| Cixi Gongniu | 41,711,794.50 | 687,392.00 | 42,399,186.50 | |||
| Shanghai Gongniu | 39,224,724.63 | 1,277,474.00 | 40,502,198.63 | |||
| Gongniu Management | 30,000,000.00 | 41,028.00 | 30,041,028.00 | |||
| Bull International Trading | 3,110,000.00 | 3,110,000.00 | ||||
| Electric Sales | 9,826,346.54 | 3,558,899.37 | 13,385,245.91 | |||
| Xingluo | 9,910,274.20 | 9,910,274.20 |
| Trading | ||||||
| LV Electric | 1,248,151.13 | 550,933.98 | 1,799,085.11 | |||
| Domestic Electrical Appliance | 1,326,581.91 | 1,264,698.28 | 2,591,280.19 | |||
| Hainan Dacheng | 10,000,000.00 | 10,000,000.00 | ||||
| Intelligent Technology | 1,000,000.00 | 1,000,000.00 | ||||
| Total | 405,057,095.11 | 36,902,405.06 | 441,959,500.17 |
Other notes:
1) The Company established Hainan Dacheng with a registered capital of RMB10,000,000and an actual capital contribution of RMB10,000,000 as at 31 December 2021, and IntelligentTechnology with a registered capital of RMB10,000,000 for the current period, and an actualcontribution of RMB1000,000 as at 31 December 2021
2) For the current period, the Company granted restricted shares to the employees of thesubsidiaries, increasing the long-term equity investments of the subsidiaries byRMB23,436,001.18; the Company granted the shares of the 2020 Special Talent ShareholdingPlan Fund to the core managers of the subsidiaries, increasing the long-term equity investments ofthe subsidiaries by RMB2,466,403.88.
(2). Investment to joint ventures and associated enterprises
□Applicable √Not applicable
4. Operating revenue and cost of sales
(1). Status of operating revenue and cost of sales
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 | ||
| Revenue | Cost | Revenue | Cost | |
| Principal business | 5,196,022,727.01 | 3,782,944,961.56 | 4,382,278,159.34 | 3,156,072,624.63 |
| Others | 110,267,497.14 | 93,117,094.92 | 49,548,684.83 | 44,159,819.11 |
| Total | 5,306,290,224.15 | 3,876,062,056.48 | 4,431,826,844.17 | 3,200,232,443.74 |
| Of which: Revenue generated by contracts with customers | 5,292,184,752.33 | 3,867,282,763.40 | 4,424,933,809.19 | 3,194,189,103.44 |
(2). Status of contract revenue
□Applicable √Not applicable
(3). Details of obligation for contract performance
□Applicable √Not applicable
(4). Details of the apportionment to the remaining obligations for contract performance
□Applicable √Not applicable
Other notes:
None
5. Return on investment
√Applicable □Not applicable
Unit: RMB
| Item | 2021 | 2020 |
| Long-term equity investments returns calculated by cost accounting | 2,000,000,000.00 | 1,000,000,000.00 |
| Earnings of long-term equity investments accounted for by the equity method | ||
| Disposal of return on investment resulting from long-term equity investments | ||
| Return on investment of held-for-trading financial assets for the holding period | 79,124,417.58 | 80,364,389.36 |
| Dividend income of other equity investments gained for the holding period | ||
| Interest income of debt investments gained for the holding period | 364,239.73 | |
| Interest income of other debt investments for the holding period | -3,305,694.45 | |
| Return on investment gained from disposal of held-for-trading financial assets | ||
| Return on investment gained from disposal of other equity investments | -28,839,500.00 | |
| Return on investment gained from disposal of debt investments | ||
| Return on investment gained from disposal of other debt investments | ||
| Earnings of debt restructuring | ||
| Total | 2,079,124,417.58 | 1,048,583,434.64 |
Other notes:
None
6. Other information
√Applicable □Not applicable
R&D expense:
| Item | 2021 | 2020 |
| Employee remuneration | 119,019,111.86 | 100,927,352.11 |
| Direct investment | 44,047,037.17 | 43,314,601.05 |
| Depreciation and amortization | 5,049,216.83 | 4,815,821.33 |
| Others | 22,328,622.99 | 14,519,231.41 |
| Total | 190,443,988.85 | 163,577,005.90 |
XVIII Supplementary Information
1. Schedule of exceptional gains and losses in the current period
√Applicable □Not applicable
Unit: RMB
| Item | Amount | Note |
| Gain or loss on disposal of non-current assets | -9,714,625.18 | |
| Exceptional tax rebates, reductions and exemptions given with ultra vires approval, in lack of official approval documents or for other reasons | ||
| Government grants through profit or loss (exclusive of government grants consistently given in the Company’s ordinary course of business at fixed quotas or amounts as per governmental policies or standards) | 388,196,973.94 | |
| Capital occupation charges on non-financial enterprises that are recognized in profit or loss | 8,121,324.51 | |
| 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 | ||
| Gain or loss on non-monetary asset swaps | ||
| Gain or loss on assets entrusted to other entities for investment or management | 171,623,256.63 | |
| Allowance for asset impairments due to acts of God such as natural disasters | ||
| Gain or loss on debt restructuring | ||
| Restructuring costs in staff arrangement, integration, etc. | ||
| Gain or loss on the over-fair value amount as a result of transactions with distinctly unfair prices | ||
| Current profit or loss on subsidiaries obtained in business combinations involving entities under common control from the period-begin to combination dates, net | ||
| Gain or loss on contingencies that do not arise in the Company’s ordinary course of business | ||
| Gain or loss on fair-value changes on held-for-trading and derivative financial assets and liabilities & income from disposal of held-for-trading and derivative financial assets and liabilities and other debt investments (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | 11,107,836.63 | |
| Reversed portions of impairment |
| allowances for receivables and contract assets which are tested individually for impairment | ||
| Gain or loss on loan entrustments | ||
| Gain or loss on fair-value changes in investment property of which subsequent measurement is carried out using the fair value method | ||
| Effects of all adjustments required by taxation, accounting and other applicable laws and regulations on current profit or loss | ||
| Income from charges on entrusted management | ||
| Non-operating income and expense other than the above | -327,898,293.86 | RMB295 million was paid for the fine imposed by the anti-trust decision Zhe Shi Jian An (2021) No. 4. |
| Other gains and losses that meet the definition of exceptional gain/loss | 2,739,167.53 | |
| Less: Income tax effects | 96,291,397.10 | |
| Non-controlling interests effects (net of tax) | ||
| Total | 147,884,243.10 |
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined orlisted in the Explanatory Announcement No. 1 on Information Disclosure for Companies OfferingTheir Securities to the Public—Exceptional Gain/Loss Items:
□Applicable √Not applicable
2. Return on equity (ROE) and earnings per share (EPS)
√Applicable □Not applicable
| Profit of the Reporting Period | Weighted average ROE (%) | EPS | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to ordinary shareholders | 28.28 | 4.63 | 4.63 |
| Net profit attributable to ordinary shareholders before exceptional gains and losses | 26.77 | 4.39 | 4.38 |
3. Accounting data differences under China’s and foreign accounting standards
□Applicable √Not applicable
4. Other information
□Applicable √Not applicable
Chairman of the Board: Ruan LipingDate when this Report was authorized for issue: 11 April 2022
Revised information:
□Applicable √Not applicable