Stock Code: 688007 Stock Short Name: Appotronics
Appotronics Corporation Limited
Annual Report 2021
本报告为深圳光峰科技股份有限公司自愿披露的《2021年年度报告（英文版）》，对本报告的中英文版本理解上发生歧义时，以中文版本为准。
Annual Report 2021 is voluntarily disclosed by Appotronics Corporation Limited, and if themeaning of the translated version is different than the Chinese version, the Chinese version willcontrol.
Appotronics: Embarking on a New Journey
Dear Shareholders,Appotronics, like many other companies, experienced an extremely challenging year in2021. We achieved positive growth in operating incomes in this year, but at a slower growthrate.Despite the astonishing performance growth of Appotronics between 2016 and 2018,especially in 2018 when our operating incomes increased by up to 72% year on year, thegrowth rate of our performance slowed down after the Company get listed in 2019. After thelast three years of growing at a slow pace, we have moved to the 16
thyear from theestablishment of Appotronics, encountering another crossroad - it’s time for us to start a newjourney.
Personally, the year 2022 is a new starting point for me. Coming back to the forefrontas the CEO of the Company, I have more responsibilities on my shoulders and more couragefor fighting in my heart, as if I were in 2016. Looking back to 2016, Appotronics decided toenter a strange field - cinema projection, and created the unique cinema SAAS mode relyingon our enthusiasm. Thanks to our strong technology advantages and the unique businessmodel, Appotronics moved forward with an overwhelming momentum on the cinema marketand achieved “explosive” growth with installations of our cinema projections solutionsincreasing year by year.The year 2022 is also a new start for Appotronics. To achieve another “explosive”growth of Appotronics, we have established four major measures: 1. To enhance our productcapability by keeping sufficiently sensitive to market demands while striving for extreme
cost reduction, hence creating more hot-selling products; 2. To continuously promote thebuilding of a hierarchical team with more young talents and transform the incentivemechanism to help young outstanding management and professional staff distinguishthemselves, hence improving the competitiveness of the team; 3. To innovate the cooperationmode for cooperating with leading customers in various fields for rapidly acquiring market;and 4. To keep our keenness as a pioneer by sufficiently staying alerted to emerging marketopportunities in pursuit of rapid breakthrough.
Thanks to the great efforts made by the Company on the consumer market, we achievedthe growth by nearly 50% in 2021 year on year for our Formovie own-brand business,accompanied with obvious increase in the gross margin. According to a report from IDC,Formovie ranked third in 2021 in terms of shipments on the overall household market. Inaddition, we are accelerating the pace of business layout in the field of vehicle-mounteddisplays, and have entered into cooperation with several vehicle manufacturers and tier-1suppliers. The IATF 16949 certification achieved by the Company recently indicates that wehave acquired the admission permit for entering the supply chain of global vehiclemanufacturers.Standing in a world experiencing drastic changes, we encounter the fourth technologicalrevolution consisting of “new display technologies, artificial intelligence, 5G, etc.”, in whichlaser display is one of the major “racetracks” in the fourth technological revolution.Appotronics is at the front line of this investment hot spot, and therefore should actimmediately to seize the opportunities.
Naturally, we should also keep a clear vision of the current conditions. The year 2022is extremely extraordinary - “black swan” events occurring one after the other, repeatedoutbreak of the COVID-19 epidemic both in China and overseas, and the combat against theepidemic turning into a “protracted war” - the rising uncertainties lead to in-depth changesin the external environment. The hard external environment requires us to work morediligently and constantly enhance our resilience to move forward. Luckily, being dedicated
to original innovation since its establishment, Appotronics is always making its way into the“unpopulated area” of technologies, and is never lack of the determination and confidence insolve tough problems. The evolution of technologies is leading to more and more newapplication scenarios, such as vehicle-mounted displays, aerospace projection display, andaugmented reality (AR), which will create a trillion-level market. We have taken the lead inmaking layout for these fields.In this year, we upgraded the regular CSR report to the ESG report for the first time,which reflected our active efforts in fulfilling social responsibilities under the continuousmission of being an accountable and responsible listed company. Lastly, I’d like to presentsome of my personal opinions. The changes on the market have drawn much attentionrecently; however, despite the many factors that may lead to the fluctuation in stock priceswithin a short period of time, the true value of an enterprise eventually relies on thefundamental aspect of the company in the long run. We may pay back to investors in a bettermanner only by continuously focusing on the development of the Company, making everyeffort to improve the operation of the Company, and enhancing the intrinsic value of theCompany.Last but not least, I would like to thank all shareholders and friends who have beencaring for Appotronics!
Time tells everything!
LI YiApril 2022
Important NoteI. The Board of Directors, the Board of Supervisors, directors, supervisors and senior officers ofthe Company hereby warrant that the information contained in this Annual Report is true,accurate and complete and this Annual Report is free from any misrepresentation, misleadingstatement or material omission, and agree to assume joint and several liability for this AnnualReport.II. The Company did not make profits at the time of getting listed, and has not made profits bynow
□ Yes √ No
III. Alert of significant risks
The Company has described in detail the risks that may exist in the production and operation of theCompany. Refer to “Section III Discussion and Analysis of the Management- Risk factors” for the relevantrisks. We draw the attention of investors to such risks in making investments.IV. All directors of the Company attended the meeting of the Board of Directors.V. Pan-China Certified Public Accountants (Special General Partnership) issued a standardunqualified auditor’s report to the Company.VI. LI Yi, Principal of the Company, WANG Yingxia, Person in Charge of the Accounting Body,
and WANG Yingxia, Chief Accountant, hereby represent that the financial statements contained
in this Annual Report are true, accurate and complete.VII. Profit distribution proposal or proposal for capitalization of capital reserve approved by the
Board of Directors during the reporting period
Upon consideration at the 11
thmeeting of the second Board of Directors of the Company, it isapproved to make profit distribution on the basis of the total shares on the record date of interestdistribution, deducted by shares in the special securities account for repurchase by the Company - theCompany proposed to distribute to all shareholders a cash dividend of RMB 1.05 (tax inclusive) for every10 shares. As of April 25, 2022, the Company has a total of 452,756,901 shares and 0 shares in the specialsecurities account for repurchase, leading to the total cash dividend of RMB 47,539,474.61 (tax inclusive).The cash dividends proposed by the Company for this year account for 20.37% of the net profitsattributable to the shareholders of the listed company in the current consolidated financial statements ofthe Company.
In the event of any change in the total shares of the Company after deducting the shares in the specialsecurities account for repurchase by the Company due to relevant events prior to the record date of interestdistribution, the Company intends to keep the total amount of distribution unchanged whilecorrespondingly change the distribution proportion for each share.
No capitalization of the capital reserve or bonus shares will be made or distributed in the profitdistribution. The preliminary plan for profit distribution is still subject to approval at the general meetingof shareholders of the Company.VIII. Is there any material event concerning any special arrangement of corporate governance?
□ Applicable √ N/A
IX. Risk statement regarding forward-looking statements
√ Applicable □ N/A
The forward-looking statements contained herein regarding the future plans, development strategiesor other matters of the Company do not constitute any substantive covenant made by the Company to theinvestors. Investors and relevant personnel should have sufficient know about the risks in this aspect, andunderstand the differences among plans, predictions, and promises. The investors should be aware of therisk of investment.X. Is there any non-operating occupation of funds by the controlling shareholder or its affiliates?NoXI. Is there any external guarantee provided in contravention of the stipulated decision-making
procedureNoXII. Are the majority of the directors unable to guarantee the truthfulness, accuracy and
completeness of the Annual Report disclosed by the Company?NoXIII. Others
□ Applicable √ N/A
Table of Contents
Section I Definitions ...... 8
Section II Company Profile and Financial Highlights ...... 9
Section III Discussion and Analysis of the Management ...... 15
Section IV Corporate Governance ...... 48
Section V Environment, Social Responsibility, and Other Corporate Governance ...... 82
Section VI Significant Matters ...... 93
Section VII Changes in Shares and Shareholders ...... 125
Section VIII Preferred Shares ...... 135
Section IX Corporate Bonds ...... 136
Section X Financial Report ...... 137
| List of Documents Available for Inspection | Financial Statements with seals and signatures of the Principal of the Company, the Person in Charge of the Accounting Body, and Chief Accountant |
| Original Auditor’s Report with seals of the accounting firm and seals and signatures of the certified public accountants | |
| All original documents and announcements of the Company publicly disclosed in the websites designated by the Company as of the reporting period |
Section I Definitions
I. DefinitionsFor purpose of this report, unless the context otherwise requires, the following terms shall have themeanings indicated below:
| Terms | ||
| Company or Appotronics | means | Appotronics Corporation Limited |
| Appotronics Ltd. | means | Appotronics Corporation Ltd., the former name of the Company |
| CINEAPPO | means | CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd. |
| Formovie | means | Formovie (Chongqing) Innovative Technology Co., Ltd. |
| Appotronics HK | means | Appotronics Hong Kong Limited |
| Appotronics Daye | means | Shenzhen Appotronics Daye Investment Partnership (LP) |
| Appotronics Deye | means | Shenzhen Appotronics Deye Consulting Partnership (LP) |
| Appotronics Hongye | means | Shenzhen Appotronics Hongye Investment Partnership (LP) |
| Blackpine | means | Blackpine Investment Corp. Ltd. |
| Jinleijing | means | Shenzhen Jinleijing Investment Limited Partnership (LP) |
| Appotronics Chengye | means | Shenzhen Appotronics Chengye Consulting Partnership (LP) |
| XGIMI | means | Chengdu XGIMI Technology Co., Ltd. |
| Anker | means | Anker Innovations Technology Co., Ltd. |
| Zebao | means | Shenzhen Sunvalley Innovation Technology Company Limited |
| Dangbei | means | Hangzhou Dangbei Network Technology Co., Ltd. |
| Delta Electronics, Delta | means | Delta Electronics, Inc. |
| CINIONIC | means | Cinionic Limited (previously known as Barco Cineappo Limited) |
| WeCast | means | WeCast Technology Corp. |
| GDC BVI | means | GDC Technology Limited (British Virgin Islands) |
| GDC Cayman | means | GDC Technology Limited (Cayman Islands) |
| DCI | means | Digital Cinema Initiatives of the United States |
| DLP | means | Digital Light Processing |
| PCT | means | Patent Cooperation Treaty |
| AR | means | Augmented Reality |
| IDC | means | International Data Corporation |
| AVC | means | All View Cloud |
Section II Company Profile and Financial Highlights
I. Company profile
| Chinese name | 深圳光峰科技股份有限公司 |
| Short name in Chinese | 光峰科技 |
| English name | Appotronics Corporation Limited |
| Short name in English | Appotronics |
| Legal representative | LI Yi |
| Registered address | 20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road, Yuehai Street, Nanshan District, Shenzhen |
| Historical changes of the Company’s registered address | 1. October 24, 2006, Room 10, 14/F, Fangda Building, Keji South 12th Road, South Area, High-tech Industrial Zone, Nanshan District, Shenzhen 2. September 6, 2007, Room 03, 17/F, Overseas Chinese High-tech Venture Building, South Area, High-tech Industrial Zone, Nanshan District, Shenzhen 3. June 7, 2011, Area A, 1/F, Building 13, Xili Wenguang Industrial Zone, Nanshan District, Shenzhen 4. October 24, 2012, 401 Shenzhen IC Design and Application Industrial Park, South to Chaguang Road, Xili Township, Nanshan District, Shenzhen 5. December 14, 2017, 21-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road, Yuehai Street, Nanshan District, Shenzhen 6. August 1, 2018, 20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road, Yuehai Street, Nanshan District, Shenzhen |
| Office address | 20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road, Yuehai Street, Nanshan District, Shenzhen |
| Postal code of office address | 518052 |
| Website | http://www.appotronics.com |
| ir@appotronics.cn |
II. Contact person and contact information
| Board Secretary (Domestic representative for information disclosure) | Securities affairs representative | |
| Name | YAN Li | CHEN Yasha |
| Address | 20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road, Yuehai Street, Nanshan District, Shenzhen | 20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road, Yuehai Street, Nanshan District, Shenzhen |
| Telephone | 0755-32950536 | 0755-32950536 |
| Facsimile | 0755-86186299 | 0755-86186299 |
| ir@appotronics.cn | ir@appotronics.cn |
III. Media for information disclosure and place for keeping the annual reports
| Name and website of the media on which the Company discloses its annual report | China Securities Journal (https://www.cs.com.cn) Shanghai Securities News (https://www.cnstock.com) Securities Times (http://www.stcn.com) Securities Daily (http://www.zqrb.cn) |
| Website of the securities exchange on which the Company discloses its annual report | Shanghai Stock Exchange website (http://www.sse.com.cn) |
| Place for keeping the annual reports | Office of the Board of Directors |
IV. Stock and depository receipts of the Company(I) Stock of the Company
√ Applicable □ N/A
| Stock of the Company | ||||
| Type of stock | Stock exchange and board | Stock short name | Stock code | Former stock short name |
| A-shares | Shanghai Stock Exchange, STAR Market | Appotronics | 688007 | N/A |
(II) Depository receipts of the Company
□ Applicable √ N/A
V. Other related information
| Domestic accounting firm appointed by the Company | Name | Pan-China Certified Public Accountants (Special General Partnership) |
| Office address | 6/F, No. 128 Xixi Road, Xihu District, Hangzhou, Zhejiang | |
| Accountants signing the report | WEI Biaowen, NIU Chunjun | |
| Sponsor performing the duty of continuous supervision within the reporting period | Name | Huatai United Securities Co., Ltd. |
| Office address | 5/F (01A, 02, 03 and 04), 17A, 18A, 24A, 25A and 26A, Hong Kong China Travel Service Building, Central Plaza, Futian District, Shenzhen | |
| Sponsor representatives signing the report | ZHANG Guanfeng, QIN Lin | |
| Period of continuous supervision | From July 22, 2019 to December 31, 2022 |
VI. Main accounting data and financial highlights in the past three years
(I) Main accounting data
In RMB
| Main accounting data | 2021 | 2020 | % Change (2021 v 2020) | 2019 |
| Operating income | 2,498,228,401.78 | 1,948,884,176.83 | 28.19 | 1,979,148,918.89 |
| Net profit attributable to shareholders of the listed company | 233,364,344.09 | 113,847,873.06 | 104.98 | 186,457,276.71 |
| Net profit attributable to shareholders of the listed company after deduction of non-recurring profit or loss | 124,279,830.79 | 40,289,988.80 | 208.46 | 134,218,640.96 |
| Net cash flow from operating activities | 58,337,226.84 | 52,390,430.42 | 11.35 | 243,000,903.71 |
| December 31, 2021 | December 31, 2020 | % Change (2021 v 2020) | December 31, 2019 | |
| Net assets attributable | 2,438,064,581.44 | 2,091,599,671.75 | 16.56 | 1,974,559,837.64 |
| to shareholders of the listed company | ||||
| Total assets | 4,097,230,955.90 | 3,226,204,326.69 | 27.00 | 3,099,508,090.85 |
(II) Financial highlights
| Financial highlights | 2021 | 2020 | % Change (2021 v 2020) | 2019 |
| Basic earnings per share (RMB/share) | 0.52 | 0.25 | 108.00 | 0.45 |
| Diluted earnings per share (RMB/share) | 0.51 | 0.25 | 104.00 | 0.45 |
| Basic earnings per share after deduction of non-recurring profit or loss (RMB/share) | 0.27 | 0.09 | 200.00 | 0.33 |
| Weighted average return on net assets (%) | 10.26 | 5.62 | +4.64 percentage points | 14.84 |
| Weighted average return on net assets after deduction of non-recurring profit or loss (%) | 5.46 | 1.99 | +3.47 percentage points | 10.68 |
| Proportion of R&D investments to operating income (%) | 9.47 | 10.49 | -1.02 percentage points | 10.19 |
Explanation about the main accounting data and financial highlights in the past three years
√ Applicable □ N/A
During the reporting period, the net profit attributable to shareholders of the listed company and thenet profit attributable to shareholders of the listed company after deduction of non-recurring profit or lossincreased 104.98% and 208.46%, respectively; the basic earnings per share, diluted earnings per share,and basic earnings per share after deduction of non-recurring profit or loss decreased by 108.00%,
104.00%, and 200.00%, primarily due to the following:
1. During the reporting period, the consolidated gross margin was improved due to the gradualresumption of incomes from the cinema business with a higher gross margin, and the growth in incomesfrom the core device business, household business, and large venue business.
2. During the reporting period, the non-recurring profit or loss increased year on year, primarily dueto the performance compensation recognized in the profit or loss for the current period in the amount ofRMB 37.9278 million, the government grants of RMB 87.7165 million recognized in the profit or loss forthe current period.
VII. Differences in accounting data under Chinese accounting standards and overseas accounting
standards(I) Differences in net profit and net assets attributable to shareholders of the listed company
disclosed on the financial statements according to the international accounting standards andthe Chinese accounting standards
□ Applicable √ N/A
(II) Differences in net profit and net assets attributable to shareholders of the listed companydisclosed on the financial statements according to the overseas accounting standards and theChinese accounting standards
□ Applicable √ N/A
(III) Explanation about the difference between overseas and Chinese accounting standards
□ Applicable √ N/A
VIII. Financial highlights in 2021 by quarter
In RMB
| 1st quarter (Jan. - Mar.) | 2nd quarter (Apr. - Jun.) | 3rd quarter (Jul. - Sep.) | 4th quarter (Oct. - Dec.) | |
| Operating income | 524,967,989.26 | 579,721,254.33 | 555,932,526.47 | 837,606,631.72 |
| Net profit attributable to shareholders of the listed company | 54,409,294.00 | 97,004,626.79 | 59,936,820.19 | 22,013,603.11 |
| Net profit attributable to shareholders of the listed company after deduction of non-recurring profit or loss | 36,659,661.66 | 30,302,274.42 | 41,093,330.65 | 16,224,564.06 |
| Net cash flow from operating activities | 106,223,261.88 | 64,436,052.02 | -191,576,197.71 | 79,254,110.65 |
The high net profit attributable to shareholders of the listed company in the 2
ndquarter are caused bythe performance compensation from GDC; the less net cash flow from operating activities in the 3
rd
quarterwas primarily due to stock building for preparation of peak sales period and payment for due notes; theless net profit attributable to shareholders of the listed company in the 4
thquarter was primarily due to thechange in the product portfolio, decrease in the gross margin, and the increase in marketing expenses andpersonnel expenses.Explanation about the difference between quarterly data and the data disclosed on regular reports
□ Applicable √ N/A
IX. Items and amounts of non-recurring profit or loss
√ Applicable □ N/A
In RMB
| Item of non-recurring profit or loss | 2021 | Note (if applicable) | 2020 | 2019 |
| Gain or loss on disposal of non-current assets | 1,437,535.03 | -1,112,121.13 | -3,214,488.06 | |
| Government grants recognized in profit or loss for the current period (excluding government grants that are closely related to the business of the Company and are provided in fixed amount or quantity continuously according to the applicable polices and standards of the country) | 87,716,471.20 | 40,750,823.51 | 25,782,112.48 | |
| Profit or loss on entrusted investments or assets management | 9,776,977.44 | 18,624,853.96 | ||
| Net profit or loss of subsidiaries from the beginning of the period up to the business combination | 14,561,407.47 | 23,593,500.83 | 23,321,528.06 |
| date recognized as a result of business combination of enterprises involving enterprises under common control | ||||
| Profit or loss on changes in the fair value of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities and derivative financial liabilities and investment income on disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and other debt investments, other than those used in the effective hedging activities relating to normal operating business | 40,127,764.00 | 9,552,990.98 | ||
| Reversal of impairment loss on accounts receivable and contract assets tested for impairment individually | 238,836.00 | |||
| Other non-operating income and expenses | 865,330.69 | 2,429,083.25 | 2,981,778.07 | |
| Other gains or losses meeting the definition of non-recurring profit or loss | -9,823,212.01 | 323,003.17 | ||
| Less: Effect of income taxes | 7,304,758.42 | 9,068,330.19 | 4,532,639.92 | |
| Effects attributable to minority interests (after tax) | 28,273,002.10 | 1,982,929.14 | 1,891,481.86 | |
| Total | 109,084,513.30 | 73,557,884.26 | 52,238,635.75 |
Description of defining non-recurring profit or loss items illustrated in Information Disclosure andPresentation Rules for Companies Making Public Offering of Securities No. 1－Non-recurring Profit orLoss as recurring profit or loss items
□ Applicable √ N/A
X. Items at fair value
√ Applicable □ N/A
In RMB
| Item | Opening balance | Closing balance | Change | Effect on profit for the current period |
| Held-for-trading financial assets | 114,000,000.00 | 417,200,000.00 | 303,200,000.00 | 49,904,741.44 |
| Receivables financing | 11,959,000.00 | 244,860.00 | -11,714,140.00 | |
| Investment in other equity instruments | 11,975,419.38 | 7,075,419.38 | -4,900,000.00 | |
| Total | 137,934,419.38 | 424,520,279.38 | 286,585,860.00 | 49,904,741.44 |
XI. Explanation about performance indicators not under the Accounting Standards for Business
Enterprises
√ Applicable □ N/A
The table below lists relevant indicators about the net profit excluding the effect of share-basedpayment expenses:
In RMB
| Item | 2021 | 2020 | Change (%) |
| Net profit excluding the effect of share-based payment expenses | 276,503,475.36 | 107,381,419.72 | 157.50 |
| Net profit attributable to shareholders of the listed company excluding the effect of share-based payment expenses | 277,641,613.32 | 132,777,391.31 | 109.10 |
| Net profit attributable to shareholders of the listed company after deduction of non-recurring profit or loss excluding the effect of share-based payment expenses | 164,481,340.03 | 59,219,507.05 | 177.75 |
Section III Discussion and Analysis of the Management
I. Discussion and Analysis of Business Situations
Given the transformation of the Chinese economy from the stage of high growth to the stage of high-quality development, promoting the development of high-technology industries have been improved tothe level of the national strategy, in which laser display is one of the national strategic emerging industries.During the reporting period, closely following the guidelines of the national strategy and under thestrategic layout focusing on the main line of “core technologies + core devices + application scenarios”,the Company actively cultivates new growth curves while optimizing the business structure, and achievedstable growth in the operating performance to provide a strong momentum for the development of theCompany in the next 3 to 5 years.
1. Rapid growth of the own-brand household business to start a new era of laser smart projection
During the reporting period, the Company made great efforts for the To C business. The subsidiaryachieved the growth of 50% year on year for its own-brand business, which accounted for nearly 50% ofthe total operating income of for the first time with obvious increase the in gross margin. Moreover,enhanced market investment to actively expand offline channels. The first offline experience store wasopened in Chongqing in May 2021; and more experience stores opened in the year shortened the distancebetween consumers and our products.
In terms of market shares, the Company is improving rapidly in the ranking for the household smartprojection market. According to the IDC report, the brand ranked third in terms of sales volume on theoverall household projection market of 2021.
The subsidiary achieved significant breakthrough in product R&D and brand marketing. During thereporting period, launched R1 Nano, X1, and several other new household laser mini projector products,and cooperated with a globally renowned audio brand Bowers & Wilkins to release T1, the firstpanchromatic laser TV, which started a new era for laser projection. During the period of November 11,achieved the gross merchandise value (GMV) of over RMB 200 million throughout China as the championfor four consecutive years in both the online sales value and the sales volume of laser TVs.
2. Diversified innovative core device businesses to inject new power for continuous growth
2.1 Business of household core devices
During the reporting period, the Company achieved growth for the business of household coredevices, covering all leading domestic projector brands.
With respect to laser mini projectors, the Company cooperated with partners such as Dangbei andAnker to integrated the upstream and downstream for jointly expanding the racetrack of laser miniprojectors. During the reporting period, the Company provided laser mini projectors to Dangbei; the long-throw laser projection product X3 launched by Dangbei, positioned as a high-end flagship model,continuously ranked the first among hot products sold in JD.com, hence becoming one of the hot-sellingprojector products of the year in the industry with warm response from consumers.
With respect to laser TV light generators and complete equipment, the Company provides laser TVsfor partners such as XGIMI and Hewlett-Packard, provides laser TV complete equipment for Zebao,
ViewSonic, Haier, and other partners, to assist partners in expanding the market space while acceleratingthe rapid popularization of our core technologies in the household field. For the overseas market, theCompany has projects established for 4 targeted laser TV products with reference to customer demands,so as to show our strength on the overseas market focusing on high-quality projects.Meanwhile, the Company continuously expands the scope of partners along the ecology chain, hencepromoting the overall development of the entire ecology and the positive development of the industry bymaking use of our core devices and technology advantages.
2.2 Business of innovative core devices
Relying on our technology advantages in the laser display field, the Company has been activelyexploring new application scenarios to create new performance growth points for the Company. Duringthe reporting period, the Company took the lead in making layout for vehicle-mounted display, aviationdisplay, cloud display, AR, and other innovative businesses.
(1) For vehicle display, the Company has taken intelligent cockpit as the main coverage scenario toapply laser display in HUD, vehicle window projection, vehicle canopy by virtue of features such as smallsize, high brightness, low energy consumption and low heat dissipation. During the reporting period, theCompany was included in the list of outstanding partners for Huawei Intelligent Automotive Solution, andprovided the vehicle-mounted canopy for the demo vehicle with the latest cockpit of Huawei, namely theimmersive projection on the vehicle roof. Moreover, the Company has entered into cooperation withseveral domestic and foreign vehicle manufacturers and tier-1 suppliers to continuously expand thecustomer base of vehicle-mounted display.
(2) For aviation display, the Company has signed a strategic cooperation agreement with Airbus toexplore various possibilities in aviation applications based on the laser light source technology and laserdisplay solutions. In Zhuhai Airshow held in September 2021, the Company exhibited the laser displayproduct prototype intended for civil aviation display applications, which is the first one launched on theworld and first one exhibited in China.
(3) In “book in the sky”, one of the innovative application projects of the Company, individual laserdevices may reach the ultra high brightness of 100,000 lumens; relying on the extra-long projectiontechnology, they can exceed the distance limit of 500 meters of conventional projection technologies, andcan achieve far-distance imaging in the air at the distance of up to 3,000 meters. In the future, this solutionmay be used in dissemination projects of major events or government activities; we will continue toexplore diversified scenarios of laser lighting.
(4) AR display is one of the emerging display fields under active exploration by the Company. TheCompany makes uses of its advantages in original core technologies and devote human and materialresources in the exploration for the AR display field, which have achieved stage-specific results. Duringthe reporting period, the Company completed the demonstration of ultra-light, high-efficiency, high-definition AR modules. It’s expected to release the progress in the display effects and technology routsfor various AR modules step by step in 2022. Given the constant optimization of AR modules, it’sexpected that the DEMO modes and products of some AR modules may be launched by the end of 2022.
3. Sound development of the fundamental business of the Company to make stable contributions forperformance
During the reporting period, the Company kept the overall sound development of its fundamentalbusinesses, i.e. the cinema projector business, the laser large venue business, and business educationbusiness.
With respect to cinema projection, given the recovery of China from the COVID-19 epidemic in 2021,we built high-brightness theaters to facilitate differentiated operation by cinemas, and provided contentvideo and audio ecological and other solutions. As a result, this business division achieved the operatingincome of RMB 360 million, up by about 110% year on year. Relying on the nearly 5,000 new installationsof laser cinema light sources throughout China, we maintained the absolute leading position on the market.
With respect to laser large venue projectors, we released the T series products in 2021, the 33,000-lumen laser large venue projector with the smallest size, lightest weight, best color, and lowest noise onthe market for domestic independently developed 3DLP solutions. The Company doubled the incomesfrom the large venue projector business. According to the Market Survey Report on the Laser ProjectMarket of Chinese Mainland in 2021 of All View Cloud, Appotronics ranked second in terms of salesvalue and third in terms of product shipment on the Chinese Mainland large venue laser projection marketin 2021.
With respect to business education, the continuous achievements of our own brands lead to effectiveincrease in both the market shares and gross margin of this business. According to the Market SurveyReport on the Laser Project Market of Chinese Mainland in 2021 of All View Cloud, Appotronics rankedfirst in terms of shipment and held leading market shares on the education projector market in 2021.II. Main business, business model, status of industry and R&D activities during the reporting
period(I) Main business and main products or services
1. Main business
As a globally leading technology enterprise for laser display, the Company mainly engages in theresearch, development, production and sales of laser display core devices and complete machines andapplication of laser display technology to different scenarios based on ALPD? laser display technologyand architecture. By now, our businesses have been implemented in the household display, cinemaprojection, business education, large venue, and other application scenarios, and are expanding to theaviation, vehicle-mounted display, AR, and other fields.
2. Main products
Our products may be classified into core laser display devices and complete laser display equipment.The core devices can be further classified into laser light source (cinema light source and large venue lightsource), laser mini projector, vehicle-mounted laser display devices and systems, laser TV light generatorand laser projection screen. Complete equipment can be further classified into laser mini projector, laserTV, laser cinema projector, large venue laser projector, laser education projector, etc.
2.1 Products of core devices
Our core devices, including the laser light source and light generator, reflect various advantages and
characteristics of ALPD? technology, such as high brightness, wide color gamut, high contrast andrelatively low cost. The quality and performance of such products have received recognition ofdownstream customers, which helps us establish our position as a core supplier on the industry chain oflaser display.
Figure 1: Laser light source and laser light generatorWith respect to household mini projector, ALPD? laser light sources, as the mainstream light sourcefor projection and display products, have the advantages of high energy efficiency, health, andenvironment friendliness; they are better than mini projector products with conventional light sources interms of brightness, contrast ratio, product shape, etc., and have the comprehensive advantages of beingthe brightest with the same size, and having the smallest size at the same brightness.With respect to vehicle-mounted display, the vehicle-mounted laser display device we designed andmanufactured have the advantages of high brightness, small size, high stability, and compatibility withlong-throw and ultra short throw display. They can project display images on any surface without affectingthe permeability, hence creating mobile, large-screen, and immersive interactive experience in a vehicle.
2.2 Products of complete equipment
On the basis of laser light sources and light generator, we further developed complete equipment,which has been successfully used in both the household and commercial fields.
2.2.1 Household field
In recent years, laser TV, smart mini projector and other household projector products have beendeveloping rapidly, due to the ever increasing acceptance of the new mode of movie watching by theconsumers, and rapid decrease of the costs and prices and better performance of products. With leadingmarket shares for household products and rapid growth of our own-brand household business, we willcreate a new laser mini projector racetrack.
Figure 2: New products of : laser projector R1 Nano and X1
Figure 3: New product of : Panchromatic Laser TV T1
2.2.2 Commercial market
In the field of cinema projection, we have created a product portfolio of laser cinema light sourcescovering multiple ranges of lumens from 5,000 lumens to 55,000 lumens, which are compatible with allprojection equipment brands on the market for wide application in large-, medium- and small-sizedcinemas. Thanks to the low operating power, the laser cinema light source reduces electricity consumptionby 50% compared with the xenon lamp; moreover, since no bulb replacement is required, it helps cinemasto minimize their operating costs. As of the disclosure date of this Report, the installations of our lasercinema light sources have exceeded 26,000 sets in China.In the large venue display field, Appotronics’ large venue projector series covers the range of 5,000-60,000 lumens, hence suitable for outdoor lighting, cultural and tourism lighting, theme exhibition halls,corporate exhibition rooms, theater performance, 4D dining hall, conference control, rail transit, and otherscenarios, which have the advantages of no damage to landscape, convenient installation and dismantling,repeated use in multiple places, etc.
In the business education field, our serial products of laser business education projectors havemultiple projection throw segments including ultra short throw, short throw, and long throw, and thebrightness of 3,300-6,000 lumens; they may be used in multiple scenarios, such as education, commercialexhibition, etc. The Company has developed a series of solutions for smart classrooms and commercialpresentation, including laser smart all-in-one teaching device, laser synchronous classroom solution, laserinterconnected dual-board solution, high-definition high-brightness conference system, etc.
3. Main services
3.1 Laser cinema projection services
CINEAPPO, a controlled subsidiary of the Company, provides laser cinema projection services todownstream cinema customers (“laser as a service”), and charges service fees according to the length ofuse of light source by the cinemas (the fees are charged by the hour or a certain period of time), while thecinemas do not need to purchase light source equipment, thereby effectively easing their capital pressureand reducing their labor and maintenance costs.
3.2 Smart large-screen ecology system Feng OS
, a controlled subsidiary of the Company, independently developed Feng OS - a smart large-screen
ecology system, which is compatible with various household display products. The Feng OS system maybe used for broadcasting of large-scale events. It has completed a total of 25,000+ film and TV works and25,000+ in-depth process of film characteristics, hence effectively supporting the effects of large-screenpresentation. At present, we are leading in the industry in terms of paid members.(II) Main business modelThe Company builds its core competitiveness closely around technology R&D and patent layout. Wehave an independent and complete system of R&D, procurement, production, sales, and services to providecustomers with products or services of laser display core devices and complete equipment products.
1. R&D mode
We mainly adopt the independent R&D mode, and separate technology development from productdevelopment in organization structure and development process.
? Our technology development focuses on creating and mastering core technologies and key
technologies. When a kind of technology becomes relatively mature, it will be applied in productdevelopment. We value user demands to assist product designing, and develop technologiesrequired for products in the next 1 to 5 years, so as to keep our core competitiveness intechnology and leading position in the industry.
? Our product development is driven by product planning, and mainly divided into stages offeasibility, EVT, DVT, PVT and MP. We set up product lines and product development teamsby market segment, and develop series products based on product platform, to rapidly respondto market demands.
2. Procurement mode
Our Procurement Management Department is responsible for procurement, of which, theMaterial Sourcing Branch is responsible for the selection of suppliers, determination ofpurchasing prices, building of business system and supplier platform and other front-endprocurement affairs, while the Procurement Implementation Branch is responsible for preparingand placing purchase orders, delivery, payment, and other back-end affairs.
3. Production mode
We mainly reply on own production, supplemented by OEM, mainly because of the differentproduction capacity required by different manufacturing processes and different products andconsideration of cost-effectiveness. Our core devices for light sources and light generators soldor used to provide projection services are manufactured by us. Mini projectors, laser miniprojectors, and laser TVs in the To-C business are mainly produced in the OEM mode, whileother complete equipment products are produced by the Company.
4. Sales mode
The Company has established a multi-level sales system integrating direct sales, distribution,and commissioned sales for both online and offline sales.
(III) Industry in which the Company operates
1. Development stage, basic characteristics and main technical barriers of the industry
(1) Development stage of the industry
As an emerging industry, laser display is at the stage of rapid development. The growth drivers mainlycome from four aspects: Firstly, the demand end, especially the household market and the innovativeapplication field. Secondly, new large-scale application scenarios generated on the basis of technologyadvancement. At present, the laser display technology has been applied to vehicle-mounted display,aviation display, and other fields, creating the new large-scale application scenarios. This is purely newcreation from zero with huge potential for market explosion. Thirdly, driver of innovation at the supplyend. Manufacturers in the industry constantly upgrade their technologies and products to accelerate thepenetration of laser display products. Fourthly, policy support. In 2021, being listed in priorities for the
thFive-year Plan, such as the “New Display and Strategic Electronic Materials” of the Ministry ofScience and Technology, laser display has strong support from the state.
(2) Basic characteristics of the industry
In terms of technology, the ALPD? technology created by Appotronics has become the mainstreamtechnology route. In principle, the ALPD? laser display technology is compatible with various chip andtechnology routes, and is suitable for the DLP, LCOS, and LCD technologies. In 2007, the ALPD?technology created by Appotronics’ R&D team made a breakthrough in the application of core devicesand imaging solutions of laser display, hence becoming the mainstream technical route for the laserprojector industry and widely used in household, cinema, large venue, commercial, and education fields.
In terms of market, the overall size of the laser display industry has been expanding continuously.During the reporting period, laser display has been increasing in both shipment and market shares on thehousehold, large venue, business, and cinema markets.
(3) Main technical barriers
Laser display products involve several fields, including optics, electronics, materials, physics,mechanical designing, precision manufacturing. The improvement in product performance relies on thecore device (light source and light generator), while the research, development, and iteration of coredevices are subject to high technical barriers and strong patent barriers.
In addition, in terms of specific applications, the technical barriers for To C market and innovativeapplication market are high efficiency, small size and high cost effectiveness, while the technical barriersfor To B market are continuous upgrading of performance in brightness, color, dynamic range, etc.
2. Analysis of the position of the Company in the industry and changes therein
The laser display technology has a broad prospect of application. As a new-general displaytechnology, thanks to the advantages of high brightness, small size, long service life, wide color gamut,environment friendliness, the laser display technology has a broad space for market application. Besidesthe conventional display field, it can be expanded to the aviation, vehicle-mounted, AR, and other fields.The Laser display technology is becoming more and more important in the display field.
As a leading in the laser display industry, Appotronics has created a strong patent moat around theunderlying technical architecture of laser phosphor display technologies, which is hard to be bypassed bycompanies in the industry entering the route of laser phosphor technologies. In addition, since itsestablishment, the Company spared no effort in R&D investment, which lead to a strong technology barrier.We have been committed in the breakthroughs, innovations, expansion of application scenarios, andindustrialization of laser display technology, and created technology reserves and patent portfolioscovering the whole technology chain of laser display from key system architecture, core devices to keyalgorithm. Relying on the core competitive advantages consisting of “patent moat + technical barriers”,the Company has its voice at the upstream core device stage in the laser display industry, and has becomethe first choice for many customers.Appotronics is a pioneer of laser smart mini projectors. In 2021, the Company released the high-lumen laser mini projector light generator and multiple laser smart mini projector products to start a newera of laser projection in all aspects. Therefore, the year 2021 is referred to as the “first year of laser miniprojector” in the industry.According to the Market Tracking Report of the Chinese Projector Market in 2021 Q4, , a controlledsubsidiary of the Company, ranked third in the industry in terms of shipment of household projectors inChina.According to the Market Survey Report on the Laser Project Market of Chinese Mainland in 2021 ofAll View Cloud, Appotronics ranked second in terms of sales value and third in terms of product shipmenton the Chinese mainland large venue laser projection market in 2021.
According to the Market Survey Report on the Laser Project Market of Chinese Mainland in 2021 ofAll View Cloud, Appotronics ranked first in terms of shipment and second in terms of sales value on theeducation projector market in 2021.
3. Development of new technologies, new industries, new types of operation and new modes
during the reporting period and future trend
(1) Accelerated technology upgrade of smart projection leads to new products
Given the technology advancement and diversified demands of various applications for diversifieddisplays, smart projection is in the trend of rapid development for more applications and more modes.Smart projector devices have become the largest market segment for projector devices in China on thebasis of the rapid increase in sales thanks to their cost effectiveness and portability compared with large-screen TVs, and are increasing in terms of market shares in the projector device field. While keeping therapid growth of laser TVs and smart mini projectors, we released the first portable laser smart miniprojector in 2021, which created a new mode of smart projection.
In the Guidelines for Myopia Prevention in Children and Adolescents during COVID-19 Epidemic(Updated Version) released by the National Health Commission, projectors are recommended as the firstchoice of devices for use during the teaching sessions. Compared with conventional liquid crystal screens,some projectors equipped with advanced laser technologies can protect consumers during long-time onlinework and study and reduce the harm due to eye fatigue. It’s possible that such products may replace tablet
computers, and become a new terminal device for remote classroom, remote companion, and smarttutoring. According to IDC, it is expected that the projector device market of China will grow at thecompound growth rate of 14% between 2020 and 2024.Given the rapid development of new energy vehicles in the past years, there is a trend of vehicleintellectualization for the future vehicle field, creating various display demands. Thanks to the advantagesof small size, high efficiency, and capability of transforming any surface into projected images, laserdisplay drew the attention of the vehicle industry after entering the vehicle-mounted display field. Bycreating various intelligent and diversified innovative applications, projector devices will create a newmarket.In the future, on the basis of the development in fundamental hardware technologies such as lightsources, lighting technologies, and lens technologies, the optimization of overall device design, and thedevelopment of software technologies such as smart sensing capabilities and image quality optimizationtechnologies, the smart projector market and vehicle-mounted display will further expand thanks to thegreatly improved display performance and use experience of projector devices, technical upgrade, andreduced costs.
(2) Laser display is integrated with new technologies for expansion into new display fieldsGiven the compatibility between the laser display technology and cutting-edge technologies,including human-machine interaction, smart recognition, Internet of Things, cloud platform, and big data,the wide application of 5G mobile phones will create potential demands for supporting laser displayproducts. Therefore, it’s expected there will be huge market demands for supporting mobile productsfeaturing high efficiency, small size and low cost in the future. The development of intelligent vehiclesand smart cockpits lead to more demands for vehicle-mounted display. It’s expected that there willobjective market demands for laser display products meeting vehicle standard with features of highbrightness, small size, and high energy efficiency ratio, which can be installed in small spaces in a vehicle.In the short term, the trend remains unchanged in the development priority of the current display marketwill witness the development of laser display technology towards advantages in cost-performance ratio,high portability, high dynamic range, wide color gamut, and high brightness for integration with ultra shortthrow and anti-ambient light screen technologies.
(IV) Core technologies and progress in R&D of technologies
1. Core technologies and their advancement, and changes during the reporting periodWe have been committed in the breakthroughs, innovations, expansion of application scenarios, andindustrialization of laser display technology, and created technology reserves and patent portfolioscovering the whole technology chain of laser display from key system architecture, core devices to keyalgorithm. With the ALPD?4.0 technology matured and the ALPD? 5.0 and 6.0 technology underdevelopment at the same time, we constantly maintain our leading advantages compared with followersand competitors in the industry. As a Leader Level Member of the Laser Illuminated Projector Association(LIPA), we have participated in the preparation of the international laser display standard.The Company has devoted many R&D resources in the preparation and processing for the
miniaturization of laser display systems, light source architecture, complete equipment structure, machineperception, thin film material. The big data, algorithm and design solutions accumulated by us over theyears will enable us to rapidly develop products and solutions meeting the requirements of differentapplication scenarios, such as cinema projection, home entertainment, outdoor exhibition, ultra large-sizeddisplay, and immersive display. We have achieved breakthrough in, and started the marketing of, ultra-small portable laser light generators, vehicle-specification laser light generators, and light generators ofwide color gamut high dynamic range.With respect to cutting-edge technology, ALPD? 5.0 makes use of the characteristics of laser, and iscombined with content preparation to achieve display within a high dynamic range, so as to improve visualexperience. The prototype has been successfully developed. At present, we are performing more in-depthoptimization to bring this technology to the stage of product development. The ALPD? 6.0 is planned tomake breakthrough in the existing display architecture to further reduce the cost of laser display systems,hence laying the ground for industrialization. In the field of smart vehicle-mounted applications, we havecompleted the assessment of the prototype in various application scenarios in a vehicle, and have startedthe R&D efforts for mass production of vehicle-specification light generators. With respect to AR, wehave completed the reasoning of ultra-thin high-efficiency AR modules, and achieved preliminary resultsin the prototype. It’s expected that the prototype may be released in 2022.National scientific and technology awards
□ Applicable √ N/A
Qualification of national “little giant” enterprises in specialized, refinement, differential, and innovation,and “leading enterprise” in the manufacturing industry
□ Applicable √ N/A
2. R&D achievements during the reporting period
During the reporting period, the Company made the following achievements in technology andproduct innovation:
1. Core devices
During the reporting period, we completed the product development and released for mass productionfor the full series of products based on the ALPD? 4.0 technology, including the laser cinema light sourceplatform covering 10,000-50,000 lumen, and the laser TV light generator platform compatible withtrichromatic, dual colors, and single color, hence providing more abundant and more competitive solutionsof core devices for the cinema industry and the laser TV industry. Meanwhile, in the racetrack of smartmini projectors, the Company developed laser mini projectors compatible with various product modes anddifferent performance parameters, which can greatly improve the brightness and energy efficiency whileimproving color presentation. During the reporting period, the Company provided laser mini projectorcore devices for several new customers, including Dangbei.
The Company achieved further innovative breakthrough in flexible laser display screens andsuccessfully developed multiple products: (1) ultra short throw diaphragms for speckle reduction used inthree-color laser projectors, achieving speckle reduction contrast below 10%, taking the lead in theindustry; (2) ultra short throw diaphragms with high contract, with an opacity of more than 95%, superiorto 85% of competitive products in the industry, which can greatly reduce the effect of ambient light; (3)
high-gain direct projection anti-light screens with the smart mini projector, achieving the 2.5x high-gainfactor and the ambient light obscuring rate of 80%, which supports the projection effect of the projectiondevice to increase the brightness by 2.5 times, and achieves a viewing angle close to 180 degrees ascompared to projecting on a white wall; and (4) flexible foldable ultra short throw anti-ambient light screen,and rising flexible ultra short throw anti-ambient light screen, which are more convenient fortransportation and installation.In terms of innovative applications, the Company engaged in strategic cooperation with Airbus, andjointly released the prototype for aviation laser display applications. In the future, the parties will engagein cooperation in aviation laser display modules. In terms of smart vehicle-mounted devices, during thereporting period, the Company start efforts for the vehicle-specification laser display modules required forthe development of smart cockpits, so as to develop vehicle-mounted laser display applications.
2. Complete equipment
We developed high-, medium-, and low-end laser TV products to cater for different user demands onthe household market. Having the highest brightness of 4,000 lumens, covering the REC.709, DCI, andREC.2020 color gamuts, and with the maximum color gamut area of 158% NTSC, our products are at thehighest level in the industry. During the reporting period, as the subsidiary launched a new laser TVproduct, Cinema 2, which has a 10% increase in screen brightness compared to the previous generation,has a 4K resolution and can project 80-150 inches of super-large screens. also released the firstpanchromatic Laser TV - T1, which adopted the ALPD? RGB+ panchromatic laser display technology toachieve Bt.2020 ultra-wide color gamut, 4K resolution; it is equipped with the Bowers & Wilkinscustomized audio to greatly improve the sound and color effects.During the reporting period, the Company developed multiple laser smart mini projector products.
(1) Series of portable ultra short throw smart mini projectors: R1 and R1 nano, which reduced the size ofultra short throw smart mini projectors to the size of a mini projector product. While maintaining high-brightness output, it has the size much smaller than a laser TV. This is a new mode of household smartmini projector, which will create new application scenarios. (2) Series of ultra-portable laser smart miniprojectors: X1 and P1, which maintain the same brightness as a common LED mini projector product; ithas the size of a mobile phone, and is driven by a battery.
In the business field, the Company newly developed S4 product with less than 10cm of a slim bodyand a light weight of less than 9.2kg, can produce 5,000-6,000 lumens of brightness and 4K resolution,and also present high-quality projection images in bright environment and project 300 inches of super-large screen at largest. This product is cost-effective. Based on the compact modular body of S4 platformand in conjunction with the one-button automatic stacking system, this product can achieve morebrightness, larger screen and more free application.
During the reporting period, as the first Chinese enterprise independently researching and developing3DLP high-lumen large venue projectors, during the reporting period, the Company launched the T seriesof high-brightness large venue projectors adopting a high-efficiency liquid cooling system and 3DLPimaging technology to achieve 33,000 lumens of high brightness. At present, this is the world’s smallest
and lightest large venue projector with the same brightness range. The multi-picture splicing and fusionsystem is embedded in it. In addition, it has 120Hz refresh rate to support constant brightness mode, canbe configured with more than 6 motorized lenses and support 360-degree installation, easy to use.During the reporting period, the Company release the 100,000-lumen projector light, which adoptedthe ALPD4.0 ultra high-brightness compact light source to achieve the lighting distance of over 3km. It isused for the opening ceremony of the Winter Olympics and Lantern Festival activities, hence achievingmass production and market-based application of high-brightness projector lights.
3. Software
We have completed 13 version iterations for the Feng OS system. At present, over 20 mass producedhousehold products are equipped with this system. We are leading in terms of paid members in the industry,with the penetration rate up to 26%, which is greater than Xiaomi TV, iQiyi, etc. We have completed atotal of 25,000+ film and TV works and 25,000+ in-depth process of film characteristics, hence effectivelysupporting the effects of large-screen presentation.During the reporting period, the Company implemented an omnidirectional automatic correctionalgorithm to provide customers with the intelligent auxiliary functions such as automatic obstacleavoidance and screen alignment. The Feng OS system adds machine recommendation algorithms to morepages, making it easier for users to discover their personalized preferences faster and more accurately. InMarch 2022, the Feng OS system took the lead in releasing the function of screen matching for takingpictures by a mobile phone, so that keystone correction may be performed by the camera in the mobilephone instead of human eyes, hence providing more intelligent and more convenient functions for uses.
List of intellectual property rights acquired during the reporting period
| Newly added in the current year | Total | |||
| Applications (pcs) | Granted (pcs) | Applications (pcs) | Granted (pcs) | |
| Patent for invention | 183 | 217 | 1,459 | 818 |
| Patent for utility model | 148 | 68 | 565 | 451 |
| Patent for design | 32 | 28 | 184 | 165 |
| Software copyright | 25 | 30 | 113 | 111 |
| Others | 212 | 171 | 1047 | 825 |
| Total | 600 | 514 | 3,368 | 2,370 |
Note: 1. “Others” in the table above refer to trademarks of the Company; 2. during the reporting period,the Company filed 211 PCT international patent applications.
3. R&D investments
In RMB
| Current year | Last year | Change (%) | |
| R&D investments expensed | 236,702,224.29 | 204,443,369.10 | 15.78 |
| R&D investments capitalized | |||
| Total R&D investments | 236,702,224.29 | 204,443,369.10 | 15.78 |
| Proportion of R&D investments to operating income (%) | 9.47 | 10.49 | -1.02 percentage points |
| Proportion of R&D investments |
capitalized (%)
Reason for the material change in the total R&D investments compared with last year
□ Applicable √ N/A
Reasons of the great change in the proportion of R&D investments capitalized and explanationabout the rationality thereof
□ Applicable √ N/A
4. R&D staff
In RMB 0’000
| Basic information | ||
| Amount of the current period | Previous period | |
| Number of R&D staff (persons) | 456 | 369 |
| Proportion of R&D staff to total employees of the Company (%) | 29.14 | 31.54 |
| Total compensation of R&D staff | 14,761.07 | 12,090.48 |
| Average compensation of R&D staff | 32.37 | 32.77 |
| Academic structure of the R&D staff | |
| Academic category | Person in the academic category |
| Master and above | 131 |
| Bachelor and below | 325 |
| Age structure of the R&D staff | |
| Age category | Person in the age category |
| Below 30 (exclusive) | 175 |
| 30-40 (including 30, excluding 40) | 210 |
| 40 and above | 71 |
Reason for material changes in the composition of the R&D staff, and impact on the future development of the Company
□ Applicable √ N/A
5. Other information
□ Applicable √ N/A
6. R&D projects
√ Applicable □ N/A
In RMB
| No. | Item | Estimated total investment | Investment in the current period | Aggregate investment | Progress or interim results | Goals | Technological level | Application scenario |
| 1 | Trichromatic Laser Display Complete Equipment Production Demonstration Line | 102,840,000.00 | 45,085,590.93 | 69,620,698.27 | Pilot test | This project will research the industrialization of the technology of RGB trichromatic laser with phosphor to satisfy the market demands for RGB trichromatic laser display, build a mass production line for trichromatic laser display complete equipment, acquire proprietary IP, and realize large-scale application of trichromatic laser display products. | This project will greatly promote the industrial upgrading of trichromatic laser display technology, and gain international competitive edge for proprietary trichromatic laser display technology. | This project will establish a trichromatic laser display complete equipment production demonstration line. |
| 2 | Laser TV | 74,200,000.00 | 54,472,476.45 | 54,472,476.45 | Mass production | Combined with the new-generation light generator technology, equipped with the independently developed FengOS system and screen, with obvious improvement in cost effectiveness, color gamut, and ease of use. | Take the lead in the industry. | 4K household laser TVs. |
| 3 | Core device light source and light generator project | 57,680,000.00 | 28,050,016.32 | 28,050,016.32 | Mass production | The iterated light generator technology is adopted to create a light source light generator with lower costs, higher color gamut, and higher brightness; reduced costs and improved performance on the basis of the first Fresnel flexible screen; developed products for innovative applications by taking advantage of the ALPD technology. | Take the lead in the industry; the cost effectiveness, color gamut, light effect, and other performance are greatly improved, to better satisfy the demands of customers. | Upgrading of light source for small-sized cinema projectors, trichromatic laser TV, flexible screen, vehicle-mounted display, |
| AR, and other fields. | ||||||||
| 4 | High-performance mini projector | 50,910,000.00 | 19,115,838.56 | 19,115,838.56 | Mass production | Provide laser mini projector products of high performance and high cost effectiveness. | Take the lead in the industry. | House mini projector market. |
| 5 | Laser cinema projector | 48,140,000.00 | 42,462,156.47 | 42,462,156.47 | Mass production | Develop a laser cinema projector featuring low cost, being DCI-compliant, and meeting the requirements for use by high-end families. | The proprietary DCI compliant projector in China to meet high-end family demands. | DCI compliant small cinema projectors intended for the high-end household market. |
| 6 | Other complete equipment (large venue + business education) | 48,250,000.00 | 15,574,702.96 | 15,574,702.96 | Mass production | The automatic stacking scheme renders the linear superposition of brightness and cost to achieve a leading technical advantage and cost-effective advantage on the market when the product is applied to high-lumen use scenes. | Take the lead in the industry. | High-end large venue projector, business education projector and other fields. |
| 7 | Key Enterprise Laboratory for Laser Display in Guangdong Province | 34,000,000.00 | 31,941,442.59 | 47,982,340.40 | Mass production | Development of laser phosphor display optical engine, high-performance fluorescent materials and fluorescent components, portable laser display technology, and laser display technology with high contrast and high color reproduction. | The development of key laser display technology and devices based on laser phosphor technology takes the lead in the industry. | Through transformation of lab R&D results, develop multiple laser display terminal products, and promote the development of the entire display industry chain. |
| Total | / | 416,020,000.00 | 236,702,224.28 | 277,278,229.43 | / | / | / | / |
RemarkThe Trichromatic Laser Display Complete Equipment Production Demonstration Line is under the “Strategic Advanced Electronic Materials” in the NationalKey Research and Development Programs, for which Appotronics is the undertaking unit, while and CINEAPPO are the cooperating units. The expenditure budgetsplanned by the three companies are RMB 95.18 million, RMB 4.22 million, and RMB 3.44 million, respectively.III. Analysis of core competitiveness during the reporting period
(I) Analysis of core competitiveness
√ Applicable □ N/A
1. Strong patent moat
Appotronics has created a strong patent moat around the underlying technical architecture of laserdisplay technologies, which is hard to be bypassed by companies in the industry entering the route of laserphosphor technologies. By the end of 2021, Appotronics had a total of 2,419 patent applications and 1,434granted patents worldwide. As the underlying key architecture technology, the ALPD? technologyinvented by the Company has been cited more than 600 times by industry giants such as Philips of theNetherlands, Osram of Germany, Epson of Japan, and NEC etc.
2. Voice in the industry supported by core devices
Since its establishment, the Company spared no effort in R&D investment, which lead to a strongtechnology barrier. We have been committed in the breakthroughs, innovations, expansion of applicationscenarios, and industrialization of laser display technology, and created technology reserves and patentportfolios covering the whole technology chain of laser display from key system architecture, core devicesto key algorithm. These efforts lead to the strong voice of the Company in the laser display industry,making the Company the first choice for customers. Meanwhile, the stable base of major customers fromvarious industries also contribute to the continuously increasing market shares of Appotronics around theworld.
3. Forward-looking strategic layout and head start advantages
With reference to our advantages in core devices, the Company made forward-looking layout for newapplication scenarios, such as vehicle-mounted display, aviation display, AR, etc., to promote innovationapplication of core devices in new fields. Such forward-looking layout leads to the head start advantagesof the Company in the racetrack, hence injecting new power for the medium- and long-term developmentof Appotronics and expanding more space for growth.
(II) Events occurred during the reporting period that have a material effect on the Company’s core
competitiveness, analysis of the effect and countermeasures
□ Applicable √ N/A
IV. Risk factors(I) Risk of not making a profit
□ Applicable √ N/A
(II) Risk of significant decrease in operating performance or loss
□ Applicable √ N/A
(III) Risk related to core competitiveness
√ Applicable □ N/A
Risk of the technology R&D and innovation falling short of expectations
The core of our development is technical innovation. If we fail to effectively judge the direction oftechnical innovations, or to make continuous technical innovations, or to make effective R&D investmentsdue to limited funds, or to successfully commercialize the technologies developed by us, our corecompetitiveness in technical innovation may be impaired, and we may encounter technological risks infuture development.
(IV) Operating risk
√ Applicable □ N/A
1. Risks of the COVID-19 epidemic
The repeated outbreak of the epidemic in China may cause planned product releases, customer visits,on-site technology commissioning, etc. to be postponed or cancelled, delaying or preventing the Companyfrom participating in exhibitions as expected, and additional difficulties in order acquisition. With respectto the supply chain, epidemic control measures lead to blocked logistics, increasing logistics costs,prolonged period for purchase of raw materials, which intensified the difficulties in supply chainmanagement and smooth sales. The cinema projection service business of the Company may also beaffected to a certain extent due to closedown of some cinemas and postponed showing of films. Epidemicprevention and control, if no improvement is achieved, may result in uncertainties for the production andoperation of the Company.
2. Risk related to the supply of important raw materials
Under the impact of tension in the supply chain, there are risks that core suppliers cannot supply partspromptly at the expected quality and quantity. This may slow down the growth of the Company’s To Cbusiness, and postponed shipment of some core devices or complete equipment products may result inrisks of failing to achieve the expected growth rate in operating performance of the Company.(V) Financial risk
√ Applicable □ N/A
1. Risk of impairment of accounts receivable
As of the end of the reporting period, the carrying amount of our accounts receivable was RMB
403.1345 million, accounting for 9.84% of our total assets. Our products are generally delivered afterreceiving the payment therefor. We give certain credit period to some major customers. In case of anymaterial adverse change in the business condition of our customers, we may be unable to recover certainaccounts receivable, which may have an adverse effect on our operating performance in the future.
2. Risk of impairment of inventories
As of the end of the reporting period, the carrying amount of our inventories was RMB 769.6211million, accounting for 18.78% of our assets. Our inventories mainly comprise raw materials and goodsin stock. If any significant change in the competition pattern of the industry, material innovation in laserdisplay technology and products or the impact of COVID-19 results in a large quantity of unsalableproducts, the recoverable amount of the inventories will be lower than their carrying amount. Theimpairment of inventories will have a negative effect on our earnings.
3. Risks of impairment of fixed assets
As of the end of the reporting period, the carrying amount of our fixed asset was RMB 470.4105million, accounting for 11.48% of our assets. Our fixed assets mainly consist of production equipment andcinema projector light sources for lease, where the cinema projector light sources account for 78.17%. Ifthe COVID-19 epidemic results in prolonged closedown of cinemas, the cinema projector light sourcesmay be idle, causing risks of impairment of fixed assets and adverse effects to the operation of theCompany.
4. Risks related to government grants
During the reporting period, the Company received government grants in accordance with relevantstate policies, which are special funds or wards for R&D projects. The decrease in government grants tobe received by the Company in the future may result in adverse effects to the profitability and cash flowof the Company.(VI) Industrial risk
√ Applicable □ N/A
Risk of increasingly fierce market competition
Laser display is a new and thriving field in the display device industry. A lot of international anddomestic companies have entered the field, further heating up the market competition. If we cannotmaintain our competitive advantages in technology, product, cost, service and other areas, or thecompetitors combine their advantages and resources through acquisition and merger, or the top technologycompanies in the world increase their investment in the field of laser display, we may face the risks ofdecrease in the profitability and market share.(VII) Risk of macro-environment
√ Applicable □ N/A
The prolonged COVID-19 epidemic, constant trade friction between China and the US, andincreasing geopolitical risks lead to variability, uncertainty, complexity, and vagueness for the world. Theaccelerated restructuring of the global economic pattern will cause constant adjustment in the industrialchain. Although China basically maintained the stable fundamental aspects of the macro economy, thiscannot eliminate the potential risks that may be caused by the uncertainties in the macro economy to thedevelopment of the Company.(VIII) Risk related to depository receipts
□ Applicable √ N/A
(IX) Other significant risks
√ Applicable □ N/A
1. Risks in intellectual property rights
In consideration of the strategy of long-lasting development, the Company always emphasizes theindependent research and development of intellectual property rights, and has established a scientific R&Dsystem and an intellectual property protection system. However, this still cannot protect the Companyfrom malicious litigation initiated by competitors or third parties, which may hinder market expansion ofthe Company; and cannot avoid the possibility of other intellectual property disputes between theCompany and competitors or third parties. Such disputes over intellectual property rights may causeadverse effects to the normal operating activities of the Company.
2. Risks in implementing investment projects
Under the impact of force majeure, such as the COVID-19 epidemic, during the process ofimplementing investment projects, the Company faces risks of slowing speed for production capacityexpansion, delayed construction of the head office building, etc. In March 2022, the Company madepostpone adjustment to investment projects according to the actual implementation conditions ofinvestment projects. Despite the efforts of the Company in implementing the investment projects and
constantly monitoring the progress of such investment projects, in the actual implementation, this cannotavoid situation like delayed construction compared with the plan, or adjustment to the implementationplan or solution in response to industry and market development. Upon the occurrence of suchcircumstances, the Company will make decisions in accordance with relevant provisions and promptlyfulfil its obligations for information disclosure.
3. Risk related to the management of cinema light source
In the business of laser cinema projection services, we enter into an agreement with a customer,pursuant to which, we charge a service fee on the customer based on the duration of use of the light source,while the customer uses the light source and pays fees therefor, and is responsible for the day-to-daysafekeeping and maintenance of the light source and damages thereto, but we do not collect any depositor other similar fees for the light source. The cinemas will use their best endeavors to maintain the lightsource in good condition in order to ensure normal projection of films and continuity of their businessoperation. However, we still face the risk of impairment of assets due to damage or loss of light sourcecaused by improper safekeeping on the part of the cinemas.
4. Risks in the arbitration with relevant parties of the participating company GDC BVI
At present, the Company is in the process of arbitration and counter arbitration with relevant partiesof GDC concerning the rights and interests of the parties. Because GDC Cayman, GDC BVI, Mr. ZHANGWanneng and his management team violated the provisions of the Shareholders’ Agreement andSettlement Agreement, including but not limited to the appointment of directors in violation of corporategovernance regulations, violation of protective provisions for the Company, and failing to purchase theminimum quantity of C5 projectors and core device parts by the end of 2021. As a result, the cooperationon the purchase business for cinema hardware products between the Company and GDC BVI is subject touncertainty. The the trial of this case has not been started, the impact of such case on the profit or loss ofthe Company cannot be determined at present; the eventual actual impact depends on the award of thearbitration tribunal or the negotiation between the parties.
V. Main business activities during the reporting period
During the reporting period, our operating income was RMB 2.498 billion, increased by 28.19% yearon year; the net profits attributable to the shareholders of the listed company was RMB 233 million, up
104.98% year on year; The net profit attributable to shareholders of the listed company after deduction ofnon-recurring profit or loss was RMB 124 million, up by 208.46% year on year. The total assets of theCompany as of the end of the reporting period was RMB 4.097 billion, up by 27.00% from the beginningof the reporting period; and the net assets attributable to shareholders of the listed company was RMB
2.438 billion, up by 16.56% from the beginning of the reporting period.
(I) Analysis of main business
1. Analysis of changes in statement of income and statement of cash flows lines
In RMB
| Item | Amount of the current | Amount of the prior | % Change |
| period | period | ||
| Operating income | 2,498,228,401.78 | 1,948,884,176.83 | 28.19 |
| Operating costs | 1,651,089,557.25 | 1,393,075,043.93 | 18.52 |
| Selling expenses | 252,854,103.31 | 133,588,234.60 | 89.28 |
| Administrative expenses | 187,933,417.27 | 135,757,276.26 | 38.43 |
| R&D expenses | 236,702,224.29 | 204,443,369.10 | 15.78 |
| Financial expenses | 1,300,380.36 | 9,224,974.20 | -85.90 |
| Net cash flow from operating activities | 58,337,226.84 | 52,390,430.42 | 11.35 |
| Net cash flows from investment activities | -444,906,406.98 | 205,906,256.46 | -316.07 |
| Net cash flows from financing activities | 295,570,009.05 | -99,126,552.86 | N/A |
Description of reasons for changes in the operating income: primarily due to the increase in incomes fromthe cinema service business, core devices, and sales of household and large venue products;Description of reasons for changes in the operating costs: primarily due to the increase of operating costscorresponding to the increase in operating incomes;Description of reasons for changes in the selling expenses: primarily due to increased investments in ownbrands of the Company, which resulted in the increase in selling expenses year on year; meanwhile, theremunerations for the sales staff also increased;Description of reasons for changes in the administrative expenses: primarily due to the equity incentiveplans launched by the Company, which resulted in great increase in the share-based payment expenses;the management team expands along with the business growth of the Company, hence leading toincreasing employee benefits year on year;Description of reasons for changes in the financial expenses: primarily due to the increase in incomes ofinterests on the Company’s deposits, and the decrease in loan costs, which lead to the decrease in interestexpenses;Description of reasons for changes in the R&D expenses: primarily due to increase in the investment ofR&D personnel;Description of reasons for changes in the net cash flows from operating activities: primarily due tocollection of sales value and receipt of government grants;Description of reasons for changes in the net cash flows from investment activities: primarily due to thepurchase of structural deposits in the reporting period and expenditures for the construction of the headoffice building of the Company;Description of reasons for changes in the net cash flow from financing activities: primarily due toadditional bank loans in the current period and receipt of strategic investment by subsidiaries.
Detailed description of major changes in the business types, profit composition or profit sources of theCompany
□ Applicable √ N/A
2. Analysis of revenue and costs
√ Applicable □ N/A
During the reporting period, our operating income was RMB 2.498 billion, increased by 28.19% year onyear.
(1). Main business by industry, product, region, and sales mode
In RMB 0’000
| Main business by industry | ||||||
| Industry | Operating income | Operating costs | Gross margin (%) | % Change in operating | % Change in operating cost | % Change in gross margin |
| income | ||||||
| Laser display | 249,822.84 | 165,108.96 | 33.91 | 28.19 | 18.52 | +5.39 percentage points |
| Main business by product | ||||||
| Product | Operating income | Operating costs | Gross margin (%) | % Change in operating income | % Change in operating cost | % Change in gross margin |
| 1. Sales | 211,933.18 | 149,589.02 | 29.42 | 21.51 | 16.74 | +2.89 percentage points |
| (1) Laser optical engine | 28,881.33 | 14,420.24 | 50.07 | 42.48 | 76.87 | -9.71 percentage points |
| (2) Complete laser projector | 170,804.20 | 125,709.18 | 26.40 | 16.57 | 9.14 | +5.01 percentage points |
| Laser cinema projector | 6,252.91 | 3,426.83 | 45.20 | 110.57 | 123.03 | -3.06 percentage points |
| Laser TV | 56,184.98 | 39,524.07 | 29.65 | 2.64 | -0.84 | +2.47 percentage points |
| Laser business education projector | 29,435.19 | 19,985.49 | 32.10 | 9.56 | 3.71 | +3.83 percentage points |
| Laser large venue projector | 21,722.94 | 9,714.34 | 55.28 | 113.55 | 99.27 | +3.21 percentage points |
| Smart mini projector | 57,208.18 | 53,058.45 | 7.25 | 10.51 | 6.90 | +3.13 percentage points |
| (3) Other products | 12,247.65 | 9,459.60 | 22.76 | 60.69 | 96.59 | -14.11 percentage points |
| 2. Cinema projection service | 36,062.20 | 14,312.88 | 60.31 | 109.99 | 32.83 | +23.06 percentage points |
| 3. Other business | 1,827.46 | 1,207.06 | 33.95 | -44.67 | 210.49 | -54.28 percentage points |
| Total | 249,822.84 | 165,108.96 | 33.91 | 28.19 | 18.52 | +5.39 percentage points |
| Main business by region | ||||||
| Region | Operating income | Operating costs | Gross margin (%) | % Change in operating income | % Change in operating cost | % Change in gross margin |
| Domestic | 231,854.75 | 155,390.51 | 32.98 | 24.95 | 14.59 | +6.06 percentage points |
| Overseas | 17,968.09 | 9,718.45 | 45.91 | 92.66 | 162.53 | -14.40 percentage points |
| Total | 249,822.84 | 165,108.96 | 33.91 | 28.19 | 18.52 | +5.39 percentage |
| points | ||||||
| Main business by sales mode | ||||||
| Sales mode | Operating income | Operating costs | Gross margin (%) | % Change in operating income | % Change in operating cost | % Change in gross margin |
| Direct sales | 154,237.61 | 112,202.50 | 27.25 | 7.70 | 5.54 | +1.48 percentage points |
| Distribution | 58,085.08 | 37,324.45 | 35.74 | 71.60 | 72.46 | -0.32 percentage points |
| Commissioned sales | 1,437.95 | 1,269.13 | 11.74 | 120.72 | 118.25 | -1.00 percentage points |
| Projection services | 36,062.20 | 14,312.88 | 60.31 | 109.99 | 32.83 | +23.06 percentage points |
| Total | 249,822.84 | 165,108.96 | 33.91 | 28.19 | 18.52 | +5.39 percentage points |
Description of main business by sector, product, region, and sales mode:
1. Our laser display products have been used in cinema projection, household display, educationinteraction, commercial application, cultural and tourism, security and surveillance, and other fields.Thanks to the high consumption demands on the domestic and overseas market and the temporary relieveof the COVID-19 epidemic, the Company achieved the year-on-year growth of 28.19% in total operatingincome in 2021.
2. The overall gross margin is 33.91% in 2021, up by 5.39 percentage points compared with 2020,primarily due to the adjustment made by the Company in the product portfolio. Other business mainlycovers the patent license fees, development service fees, etc. received in this year.
3. With the business of the Company mainly deployed in the Chinese mainland, incomes fromdomestic and overseas businesses account for 92.81% and 7.19%, respectively.
4. The Company classifies the business into product sales and projection services, where the productsales are classified into direct sales, distribution, and commissioned sales.
(2). Analysis of output and sales volume
√ Applicable □ N/A
| Main products | Unit | Output | Sales volume | Stock | % Change in output | % Change in sales volume | % Change in stock |
| Optical engine and complete equipment | Set | 524,110.00 | 456,848.00 | 94,123.00 | 47.68 | 26.85 | 250.41 |
| Total | 524,110.00 | 456,848.00 | 94,123.00 | 47.68 | 26.85 | 250.41 |
Explanation about output and sales volume
We supplied part of laser light source produced under operating leases, used part of laser TV lightgenerators produced to manufacture laser TV products, and used part of laser mini projector lightgenerators for production laser mini projectors, which were not included in the production and salesvolume.
(3). Performance of significant procurement contracts and significant sales contracts
□ Applicable √ N/A
Performance by the end of the reporting period of significant sales contracts entered into by the Company
□ Applicable √ N/A
Performance by the end of the reporting period of significant procurement contracts entered into by theCompany
□ Applicable √ N/A
(4). Analysis of costs
In RMB 0’000
| Costs by industry | |||||||
| Industry | Components of cost | Amount for the current period | Ratio in total costs for the current period (%) | Amount of the prior period | Ratio in total costs for the prior period (%) | % Change in amount | Situation Description |
| Laser display | 165,108.96 | 100.00 | 139,307.50 | 100.00 | 18.52 | ||
| Costs by product | |||||||
| Product | Components of cost | Amount for the current period | Ratio in total costs for the current period (%) | Amount of the prior period | Ratio in total costs for the prior period (%) | % Change in amount | Situation Description |
| 1. Sales | Direct materials | 134,461.73 | 89.89 | 114,782.91 | 89.57 | 17.14 | |
| Direct labor | 4,054.86 | 2.71 | 3,144.71 | 2.45 | 28.94 | ||
| Indirect expenses | 11,072.43 | 7.40 | 10,215.82 | 7.98 | 8.39 | ||
| Subtotal | 149,589.02 | 100 | 128,143.44 | 100 | 16.74 | ||
| 2. Cinema projection business | Depreciation of light source | 7,665.61 | 53.56 | 7,484.65 | 69.46 | 2.42 | |
| Software license fee | 1,439.08 | 10.05 | 844.05 | 7.83 | 70.50 | ||
| Technical service fee | 4,434.46 | 30.98 | 2,070.54 | 19.22 | 114.17 | ||
| Labor cost | 773.73 | 5.41 | 376.07 | 3.49 | 105.74 | ||
| Subtotal | 14,312.88 | 100.00 | 10,775.31 | 100.00 | 32.83 | ||
| 3. Other business | 1,207.06 | 100.00 | 388.75 | 100.00 | 210.50 | ||
| Total | 165,108.96 | 100.00 | 139,307.50 | 100.00 | 18.52 | ||
Explanation about cost analysis
1. Sales costs mainly comprise direct materials, direct labor and indirect expenses, of which, the costsof direct materials account for 89.89%.
2. In the business of lease services, the increase in variable costs, such as technology service fees,software use fees, and human costs, are primarily due to the increase in the duration of cinema projection;depreciation of light sources is made by using the straight line method, which is irrelevant to whether theyare in use, hence experienced no material change year on year.
3. Costs of other businesses increased by 210.5% year on year, primarily due to the increase ininstallation and transformation costs.
(5). Change in the scope of consolidation due to changes in equity interests held in majorsubsidiaries during the reporting period
√ Applicable □ N/A
(Chongqing) Innovative Technology Co., Ltd. is a wholly-owned subsidiary established by theCompany on December 29, 2020; it was not included in the scope of consolidation in 2020 since it had nosubstantial operating business. In this year, by equity transfer and receiving strategic investment,(Chongqing) Innovative Technology Co., Ltd. is transferred into a subsidiary of the Company, in whichthe Company holds 39.19% equity interests. The Company and Shenzhen Fengye Investment ConsultingLimited Partnership (Limited Partnership), a party acting in concert with the Company, hold a total of
53.6250% voting rights in (Chongqing) Innovative Technology Co., Ltd., for which the voting rights areexercised according to the opinions of the Company. Since the voting rights are sufficient to exercisesignificant influence on the resolution of the general meeting of (Chongqing) Innovative Technology Co.,Ltd., the Company becomes the controlling shareholder of (Chongqing) Innovative Technology Co., Ltd.(Chongqing) Innovative Technology Co., Ltd. was included in the scope of consolidation from 2021.
Limited was established on November 10, 2020 by Fengmi (Beijing) Technology Co., Ltd., acontrolled subsidiary of the Company; it was not included in the scope of consolidation in 2020 since ithad no substantial operating business. After the equity transfer in this year, it became a wholly-ownedsubsidiary of (Chongqing) Innovative Technology Co., Ltd., and was included in the scope ofconsolidation from 2021.
Chongqing Ewei Ecommerce Co., Ltd. is established on August 20, 2021 by (Chongqing) InnovativeTechnology Co., Ltd., a controlled subsidiary of the Company, with the registered capital of RMB 10,000;it is a wholly-owned subsidiary of (Chongqing) Innovative Technology Co., Ltd., and was included in thescope of consolidation since its establishment.
Chongqing Guangbo Ecommerce Co., Ltd. is established on August 20, 2021 by (Chongqing)Innovative Technology Co., Ltd., a controlled subsidiary of the Company, with the registered capital ofRMB 10,000; it is a wholly-owned subsidiary of (Chongqing) Innovative Technology Co., Ltd., and wasincluded in the scope of consolidation since its establishment.
Shenzhen Orange Juice Energy Technology Co., Ltd. is established on December 29, 2021 jointly by(Chongqing) Innovative Technology Co., Ltd., a controlled subsidiary of the Company, and ShenzhenOrange Juice Enterprise Management Co., Ltd. (Limited Partnership), with the registered capital of RMB
5.0000 million; with 85% equity interests held by (Chongqing) Innovative Technology Co., Ltd., it wasincluded in the scope of consolidation since its establishment.
Fabulus Technology Hong Kong Limited is a wholly-owned subsidiary established by AppotronicsHong Kong Limited, a subsidiary of the Company; it was deregistered on July 30, 2021.
Fabulus Display (Beijing) Co., Ltd. is a controlled subsidiary jointly established by the Company andBeijing SiShield Security Co., Ltd. with the registered capital of RMB 30.0000 million, and 90% equityinterests held by the Company. It was deregistered on November 25, 2021.
(6). Significant changes in or adjustments to the businesses, products, or services of the Companyduring the reporting period
□ Applicable √ N/A
(7). Main customers and main suppliers
A. The Company’s major customers of the salesThe sales to top 5 customers were RMB 1,014.5155 million, representing 40.61% of the total annual sales,of which the sales to related parties were RMB 625.1358 million, representing 25.02% of the total annualsales.
Top 5 customers
√ Applicable □ N/A
In RMB 0’000
| No. | Customer | Sales | % of total annual sales | Related to the listed company or not |
| 1 | Customer 1 | 59,277.41 | 23.73 | Yes |
| 2 | Customer 2 | 13,048.28 | 5.22 | No |
| 3 | Customer 3 | 10,764.07 | 4.31 | No |
| 4 | Customer 4 | 9,551.75 | 3.82 | No |
| 5 | Customer 5 | 8,810.04 | 3.53 | No |
| Total | / | 101,451.55 | 40.61 | / |
Description of sales to a single customer accounting for over 50% of the total sales value, newcustomer in the top 5 customers, or serious dependance on a small number of customers during thereporting period
√ Applicable □ N/A
Customer 3 and customer 4 were newly counted in the top 5 customers.
B. Information on major suppliers of the CompanyThe purchases from top 5 suppliers were RMB 848.4775 million, representing 35.88% of the total annualpurchase cost, of which the purchases from related parties were RMB 244.8159 million, representing 10.35%of the total annual purchase cost.
Top 5 suppliers
√ Applicable □ N/A
In RMB 0’000
| No. | Supplier | Procurement cost | % of total annual purchase cost | Related to the listed company or not |
| 1 | Supplier 1 | 24,481.59 | 10.35 | Yes |
| 2 | Supplier 2 | 18,365.59 | 7.77 | No |
| 3 | Supplier 3 | 16,143.54 | 6.83 | No |
| 4 | Supplier 4 | 16,133.96 | 6.82 | No |
| 5 | Supplier 5 | 9,723.07 | 4.11 | No |
| Total | / | 84,847.75 | 35.88 | / |
Description of purchase from a single supplier accounting for over 50% of the total sales value, newsupplier in the top 5 suppliers, or serious dependance on a small number of suppliers during thereporting period
√ Applicable □ N/A
Supplier 3 was newly counted in the top 5 suppliers.
3. Expenses
√ Applicable □ N/A
Unit: In RMB
| Item | Amount of the current period | Amount of the prior period | % Change |
| Selling expenses | 252,854,103.31 | 133,588,234.60 | 89.28 |
| Administrative expenses | 187,933,417.27 | 135,757,276.26 | 38.43 |
| R&D expenses | 236,702,224.29 | 204,443,369.10 | 15.78 |
| Financial expenses | 1,300,380.36 | 9,224,974.20 | -85.90 |
(1) The total selling expenses in 2021 were RMB 252.8541 million, up by 89.28% year on year,primarily due to increased investments in own brands of the Company, which resulted in the increase inselling expenses year on year; meanwhile, the remunerations for the sales staff also increased;
(2) The total administrative expenses in 2021 were RMB 187.9334 million, up by 38.43% year onyear, primarily due to the equity incentive plans launched by the Company, which resulted in great increasein the share-based payment expenses; the management team expands along with the business growth ofthe Company, hence leading to increasing employee benefits year on year;
(3) The total R&D expenses in 2021 were RMB 236.7022 million, up by 15.78% year on year,primarily due to increase in the investment of R&D personnel;
(4) The total financial expenses in 2021 were RMB 1.3004 million, decreased by 85.90% year onyear, primarily due to the increase in incomes of interests on the Company’s deposits, and the decrease inloan costs, which lead to the decrease in interest expenses.
4. Cash flow
√ Applicable □ N/A
Unit: In RMB
| Item | Amount of the current period | Amount of the prior period | % Change |
| Net cash flow from operating activities | 58,337,226.84 | 52,390,430.42 | 11.35 |
| Net cash flows from investment activities | -444,906,406.98 | 205,906,256.46 | -316.07 |
| Net cash flows from financing activities | 295,570,009.05 | -99,126,552.86 | N/A |
Description of reasons for changes in the net cash flows from operating activities: The net cash flowsfrom operating activities were RMB 58.3372 million, increased by RMB 5.9468 million year on year,primarily due to the increase in the sales revenue and government grants received.
Description of reasons for changes in the net cash flows from investment activities: The net cashflows from investment activities were RMB -444.9064 million, decreased by RMB 650.8127 million yearon year, primarily due to the purchase of structural deposits in the reporting period and expenditures forthe construction of the head office building of the Company;
Description of reasons for changes in the net cash flow from financing activities: The net cash flowsfrom financing activities were RMB 295.5700 million, up by RMB 394.6966 million over the previousyear, primarily due to additional bank loans in the current period and receipt of strategic investment bysubsidiaries.
(II) Explanation about material change in profit due to non-main business
□ Applicable √ N/A
(III) Analysis of assets and liabilities
√ Applicable □ N/A
1. Status of assets and liabilities
In RMB
| Item | Balance at the end of the period | % of total assets at | Balance as at December 31, 2020 | % of total assets as at | % Change in amount | Explanation |
| the end of the period | December 31, 2020 | |||||
| Held-for-trading financial assets | 417,200,000.00 | 10.18 | 114,000,000.00 | 3.53 | 265.96 | Primarily due to the increase in financial products and equity instrument investments |
| Notes receivable | 5,256,603.03 | 0.13 | 3,726,328.91 | 0.12 | 41.07 | Primarily due to the increase in bank's acceptance bills and commercial acceptance bills received during this period |
| Receivables financing | 244,860.00 | 0.01 | 11,959,000.00 | 0.37 | -97.95 | Primarily due to the collection of matured bank acceptance bills |
| Prepayments | 98,116,970.83 | 2.39 | 47,447,601.43 | 1.47 | 106.79 | Primarily due to the increase in advance payments for goods during the reporting period |
| Other receivables | 30,875,345.66 | 0.75 | 12,534,062.15 | 0.39 | 146.33 | Primarily due to dividends receivable from participating companies and performance compensation |
| Inventories | 769,621,133.00 | 18.78 | 418,812,140.80 | 12.98 | 83.76 | Primarily due to the increase in risk-based stock, raw materials, and goods on hand |
| Non-current assets due within one year | 3,473,049.18 | 0.08 | N/A | Primarily due to the reclassification of long-term receivables due within one year | ||
| Other current assets | 52,761,820.83 | 1.29 | 13,002,195.46 | 0.40 | 305.79 | Primarily due to the increase in the input VAT to be deducted |
| Long-term accounts receivable | 5,793,552.74 | 0.14 | 13,196,087.78 | 0.41 | -56.10 | Primarily due to the collection in the current period and the reclassification of long-term |
| receivables due within one year | ||||||
| Construction in progress | 148,620,511.35 | 3.63 | 51,576,850.72 | 1.60 | 188.15 | Primarily due to the increase in the investment for the construction in progress of the headquarters building during the reporting period |
| Right-of-use assets | 26,803,910.76 | 0.65 | N/A | Primarily due to the impact of implementing the New Lease Standard | ||
| Other non-current assets | 10,998,641.77 | 0.27 | 6,299,781.06 | 0.20 | 74.59 | Primarily due to the increase in advance payments for fixed assets |
| Short-term borrowings | 5,570,878.11 | 0.14 | 88,778,852.86 | 2.75 | -93.72 | Primarily due to the repayment of due short-term borrowings |
| Accounts payable | 419,966,567.27 | 10.25 | 226,494,815.90 | 7.02 | 85.42 | Primarily due to the increase in amounts of goods payable corresponding to increase in purchase |
| Advance from customers | 130,288,312.62 | 3.18 | 153,258,189.88 | 4.75 | -14.99 | Primarily due to the decrease in advance payments of recharge fees for the business of cinema projection services |
| Contract liabilities | 45,541,629.55 | 1.11 | 31,518,312.59 | 0.98 | 44.49 | Primarily due to the increase in receipts in advance under contracts |
| Employee benefits payable | 64,119,087.51 | 1.56 | 46,105,566.15 | 1.43 | 39.07 | Primarily due to the increase in employee benefits |
| Other current liabilities | 19,561,104.12 | 0.48 | 3,045,831.07 | 0.09 | 542.23 | Primarily due to the increase in amounts payable for goods returned |
| Long-term borrowings | 368,635,614.64 | 9.00 | 64,845,281.53 | 2.01 | 468.48 | Primarily due to the increase in |
| long-term loans due to the adjustment of the loan structure, and the increase in the special loans for the head office building | ||||||
| Leasing liabilities | 10,789,352.69 | 0.26 | N/A | Primarily due to the impact of implementing the New Lease Standard | ||
| Deferred income | 10,266,982.08 | 0.25 | 16,723,257.15 | 0.52 | -38.61 | Primarily due to the transfer of government grants received in previous periods into the profit or loss for the current period |
Other informationNone
2. Overseas assets
√ Applicable □ N/A
(1) Size of assets
Where: The overseas assets were RMB 458.8494 million, representing 11.20% of the total assets.
(2) Explanation about the high proportion of overseas assets
□ Applicable √ N/A
3. Encumbrances on assets as of the end of the reporting period
√ Applicable □ N/A
Unit: In RMB
| Item | Amount | Reason |
| Other monetary funds | 26,131,913.19 | Margins |
| Bank deposits | 40,000,000.00 | Term deposits |
| Bank deposits | 402,750.00 | Interests provided |
| Land use rights | 292,056,499.86 | Loan mortgage |
4. Other information
□ Applicable √ N/A
(IV) Analysis of operation information of the industry
√ Applicable □ N/A
Please refer to the relevant content in “Section III Discussion and Analysis of the Management - II.Main business, business model, status of industry and R&D activities during the reportingperiod”.
(V) Analysis of investmentsOverall analysis of external equity investments
√ Applicable □ N/A
As of the end of the reporting period, the balance of long-term equity investments was RMB293,601,085.27, increased by 11.74% year on year.
1. Material equity investments
√ Applicable □ N/A
| Name of investee | Opening book value (RMB) | Closing book value (RMB) | Shareholding ratio in the investee (%) | Accounting account |
| Cinionic Limited | 131,406,424.64 | 126,924,427.39 | 20.00 | Long-term equity investment |
| GDC Technology Limited (British Virgin Islands) | 131,338,347.84 | 166,676,657.88 | 44.00 | Long-term equity investment |
2. Material non-equity investments
□ Applicable √ N/A
3. Financial assets at fair value
√ Applicable □ N/A
For details, please refer to “Section II Company Profile and Financial Highlights - X. Items at fair value”.
4. Specific progress of material assets restructuring and integration during the reporting period
□ Applicable √ N/A
(VI) Sale of material assets and equities
□ Applicable √ N/A
(VII) Analysis of major investees
√ Applicable □ N/A
In RMB 0’000
| Company | Main business | Registered capital | Shareholding percentage | Total assets | Net assets | Operating income | Net profit |
| CINEAPPO | Provision of cinema laser light source lease service and sales of projectors | 10,000.00 | 63.20% | 96,972.25 | 43,094.08 | 47,700.20 | 9,383.34 |
| Foremovie | R&D and sale of household display products | 7,017.54 | 39.19% | 96,559.36 | 5,704.05 | 113,844.20 | -8,138.38 |
| Appotronics HK | R&D and sale of laser light source | 30,116.15 | 100.00% | 45,067.75 | 36,098.19 | 10,004.44 | 4,399.21 |
(VIII) Structured entities controlled by the Company
□ Applicable √ N/A
VI. Discussion and analysis of future development of the Company
(I) Structure and trend of the industry
√ Applicable □ N/A
1. Main racetrack: high demands in the household racetrack
Given the obvious trend of large screens on the household display market, smart projection is on therise for rapid growth. The IDC report shows that the shipment of household projectors in 2021 reached
3.48 million sets, up by 16%, leading to the sales value of over RMB 12.4 billion, up by 18.3%.
As one of the development priorities of China, and one of the mainstream display technologies forthe future, laser display is one of the fields with support from the state. In 2021, the Ministry of Industryand Information Technology stated to enhance support for the laser display industry in accordance withthe 14thFive-year Plan. In addition, there are continuous policies favorable to the smart projection market- the state encourages the “Intelligence+” consumption ecology, and encourages content supply, whichwill promote the release of consumer’s demands.
In the short term, the year 2022 is a major year of sports - from the Beijing Winter Olympics to theWorld Cup in Qatar, to the Asian Games in Hangzhou - abundant sports events will lead to high demandsof consumers for large-size screens. In the medium term, in the post-economic era featuring repeatedoutbreaks, projectors are included as one of the products of online classes for study at home recommendedby Shenzhen Health Commission; moreover, the “home economy” is also drives the sales of householdfilm and entertainment devices, such as projectors. In the long term, young consumers, including, amongothers, the Generation Z pursue personalization and immersive experience, and are willing to replace TVswith projectors, or take projectors as one of the alternative options.
In addition, laser mini projectors, as a new product developed by the Company in 2021, has theadvantages in brightness and color. Given the continuous expansion of the racetrack, the continuousimprovement of the industrial chain, and rapid reduction in product costs, it’s expected to receiveexplosive growth with a huge market space.
2. Racetrack for future growth:
(1) Promising future in the vehicle-mounted display racetrack
The extremely huge vehicle industry contains many trillion-level enterprises. According to the dataof China Association of Automobile Manufacturers, China has been ranking the first in the sales volumeof vehicles on the world for 13 consecutive years, and has made great progress in the transformation toelectric vehicles, Internet-connected vehicles, and intelligent vehicles.
Vehicle-mounted display is one of the core fields for smart cockpits. According to the survey data ofHuachuang Securities, it’s predicted that the size of the global vehicle-mounted display market will reachUSD 17.7 billion in 2022. Vehicle-mounted display includes vehicle widow projection, HUD, console,and many other display application scenarios in vehicles. In vehicle-mounted applications, laser lightsources can output greater brightness at higher efficiency, low heat radiation, and low consumption witha smaller size, hence it is more likely to develop into the mainstream technologies for vehicle-mounteddisplay. The application of laser projection display in vehicles is an emerging blue-sea market; theCompany has implemented cooperation for pre-shipment installations.
(2) Emerging large-sale innovative application scenarios
Given the compatibility between the laser display technology and cutting-edge technologies,including human-machine interaction, smart recognition, Internet of Things, cloud platform, and big data,the wide application of 5G mobile phones will create potential demands for supporting laser displayproducts. Therefore, it’s expected there will be huge market demands for supporting mobile productsfeaturing high efficiency, small size and low cost in the future. In the short term, the trend remainsunchanged in the development priority of the current display market will witness the development of laserdisplay technology towards advantages in cost-performance ratio, high portability, high dynamic range,wide color gamut, and high brightness for integration with ultra short throw and anti-ambient light screentechnologies.
(II) Development strategy of the Company
√ Applicable □ N/A
Facing the future, Appotronics is dedicated to becoming a pioneer in the display industry; under themission of “New light, New Life”, the Company insists on the strategic direction of “core technologies +core devices + application scenario” to continuously promote breakthrough innovation of laser displaytechnologies, accelerate the expansion of application scenarios, and enhance the in-depth industrializationof laser display technologies. Focusing on the business of core devices, the Company will work with majorcustomers to expand and strengthen the ecology of the laser display industry.
(III) Business plan
√ Applicable □ N/A
In 2022, under the impact and challenge of repeated local outbreak of the epidemic, global inflation,geopolitical tension, and shortage of chips in the industry, Mr. LI Yi, founder and Chairman of theCompany, returned to the first time to take the position of CEO. The Company will start the plan of dual-engine growth - with the mini projector business and core device business as the core direction forbreakthrough in 2022, we can take opportunities of the industry and stimulate more growth energy for theCompany.
1. Expanding the new racetrack of laser mini projectors
Firstly, we will minimize costs to promote popularization of such products. Laser mini projectorshave the inherent advantages of “high brightness, wide color gamut, and large screen”; in the future, theCompany will reduce costs through technology iteration, through optimization of the supply chain, andthrough scale effects, so as to reduce the retail prices of terminals, hence promoting the rapid expansionin shipment and population of laser mini projector products.
Secondly, we will implement two strategies to improve the competitive of our own-brand products.On one hand, we will implement the strategy of product matrix to release differentiated products intendedfor various user demands, so as to explore the smart mini projector market. On the other hand, we willimplement the strategy of flagship products to actively build flagship products, take comprehensivemeasures in product experience, staffing, brand marketing, and channel expansion, so as to achieve
substantial breakthrough in both the brand and sales volume.
2. Continuous expansion of the core device business
The Company has made obvious achievements in the field of household core devices. We haveestablished projects for several new products, have the reservation for high-quality projects intended foroverseas markets, and continuously expand the scope of partners along the ecology chain, so as to jointlyexpand and strengthen the ecology of the laser display industry.
We insist on the route of working with leading customers to promote the early large-scaleimplementation of the vehicle-mounted display business. In the future, we will work with leadingcustomers on the pre-shipment market and post-shipment market for our vehicle-mounted products, whichwill be released stage by stage. Meanwhile, we will work for breakthrough in technology route to reducecosts, hence promoting the popularization of vehicle-mounted display products.
We will constantly explore new application scenarios. Besides aviation projection and AR, we willcontinue to explore new application scenarios to expand our core technologies and core device productsto more application fields, such as smart household, 3D industry, and other fields.(IV) Others
□ Applicable √ N/A
VII. Information not disclosed according to the standard due to inapplicability of the standard,
involving State secrets or trade secrets or other reasons, and explanation about the relevant
reasons
□ Applicable √ N/A
Section IV Corporate Governance
I. Corporate governance
√ Applicable □ N/A
We have continuously improved our corporate governance structure and operated in accordance withthe requirement of the Company Law, the Securities Law, the Rules Governing the Listing of Stocks onthe Science and Technology Innovation Board of Shanghai Stock Exchange, the Articles of Association(“AOA”), and relevant rules and regulations, taking into account our actual business situations, andestablished a corporate governance structure comprising the general meeting of shareholders, the Boardof Directors, the Board of Supervisors and the management, and a mechanism in which the highestauthority, the decision-making body, the supervisory body and the management coordinate with and holdup each other. We have established a sound corporate governance system, to effectively protect theinterests of investors.(I) Shareholders and the general meeting of shareholdersThe general meeting of shareholders is the highest authority of the Company. During the reportingperiod, we have convened and held general meetings of shareholders in strict accordance with our AOA,the Rules of Procedure of the General Meeting of Shareholders and other applicable laws and regulations.The notices, convening, resolutions, voting, signing and information disclosures in respect of the generalmeeting of shareholders comply with the relevant provisions of the Company Law, the Securities Law, theCSRC and the SSE, and the resolutions of the general meeting of shareholders are legal and valid. Wehave fully protected the rights of all shareholders, especially the minority shareholders, and ensured thateach shareholder can enjoy the right to know and participate in the affairs of the Company and exercisehis voting rights according to law.(II) Directors and the Board of DirectorsThe Board of Directors is the standing decision-making and management body of the Company, andhas set up four committees, namely the Strategy Committee, the Compensation and PerformanceAssessment Committee, the Nomination Committee and the Audit Committee. During the reporting period,the Board of Directors has exercised its functions and powers in strict accordance with the requirementsof the applicable laws and regulations, the AOA, the Rules of Procedure of the Board of Directors, andthe Work Regulations for Independent Directors, and each director has been assiduous in his duties andactively received the relevant training. In order to improve the objectivity and scientificity of the decisionsmade by the Board of Directors, we have appointed the independent directors to participate in andsupervise the decision-making process of the Board of Directors. The independent directors haveperformed their duties independently, actively safeguarded the interests of the Company and theshareholders, and expressed their opinions on important and material matters of the Company. Thecommittees of the Board of Directors have fully exercised their relevant functions, to ensure that the Boardof Directors makes scientific and reasonable decisions for the Company.(III) Supervisors and the Board of Supervisors
The Board of Supervisors is the supervisory body of the Company and comprises three supervisors.The Board of Supervisors has exercised its functions and powers according to the procedures set forth inthe AOA and the Rules of Procedure of the Board of Supervisors, effectively supervised the legal andregulatory compliance of the performance of duties by the financial staff, directors and senior officers ofthe Company, and actively safeguarded the interests of the Company and the shareholders.(IV) Management of information disclosuresDuring the reporting period, we have disclosed the relevant information truthfully, accurately,promptly, fairly and completely, and duly performed our obligation of information disclosure inaccordance with the Rules Governing the Listing of Stocks on the Sci-tech Innovation Board of theShanghai Stock Exchange, the Administrative Measures for Information Disclosure by the ListedCompanies and other applicable laws and regulations, and our Information Disclosure Policy, to ensurethat all shareholders and other stakeholders have equal access to the information of the Company.
(V) Registration of insiders
During the reporting period, we have registered and filed the insiders in connection with the mattersdisclosed in our regular reports in strict accordance with the applicable laws and regulations and ourInsider Management Policy.
During the reporting period, we have defined the respective responsibilities of the general meetingof shareholders, the Board of Directors, the Board of Supervisors and the management. According to therequirements of the Board of Directors, the management has continuously improved the managementcycle “led by mechanism, guaranteed by system, guided by culture and supported by capacity”. Ourmanagement level and governance capability have been improved remarkably, providing further assurancefor our healthy and sustainable development. The directors, supervisors and senior officers have beenassiduous in their duties, and seriously exercised the rights and performed the obligations under theCompany Law and the AOA, to ensure the safe, steady and sustainable development of the Company andsafeguard the interests of the shareholders to the maximum extent practicable.
Is there major deviation in the corporate governance from laws, administrative regulations, and theregulations of CSRC on the governance of listed companies; if yes, specify the reasons.
□ Applicable √ N/A
II. Give an explanation if the Company cannot guarantee its independence and ability to operate
independently due to its relationship with the controlling shareholder in business, personnel,
assets, organization, financial and other affairs.
□ Applicable √ N/A
Information about the business identical or similar to that of the Company operated by the controllingshareholder, actual controller, and other units under their control, impact of horizontal competition ormajor changes in horizontal competition on the Company, measures that have been taken, solutionprogress, and subsequent solution plans.
□ Applicable √ N/A
Information about horizontal competition operated by the controlling shareholder, actual controller, andother units under their control causing material adverse effects to the Company.
□ Applicable √ N/A
III. General meetings of shareholders held
| Session | Date of meeting | Reference to resolutions published on the designated website | Date of disclosure of resolutions | Resolution |
| 1st extraordinary general meeting of shareholders in 2021 | February 25, 2021 | www.sse.com.cn | February 26, 2021 | All proposals have been reviewed and passed. |
| 2nd extraordinary general meeting of shareholders in 2021 | April 12, 2021 | www.sse.com.cn | April 13, 2021 | All proposals have been reviewed and passed. |
| Annual general meeting of shareholders in 2020 | May 14, 2021 | www.sse.com.cn | May 15, 2021 | All proposals have been reviewed and passed. |
| 3rd extraordinary general meeting of shareholders in 2021 | August 3, 2021 | www.sse.com.cn | August 4, 2021 | All proposals have been reviewed and passed. |
| 4th extraordinary general meeting of shareholders in 2021 | October 25, 2021 | www.sse.com.cn | October 26, 2021 | All proposals have been reviewed and passed. |
| 5th extraordinary general meeting of shareholders in 2021 | November 22, 2021 | www.sse.com.cn | November 23, 2021 | All proposals have been reviewed and passed. |
Extraordinary general meetings convened at the request of preferred shareholders with resumed votingrights
□ Applicable √ N/A
Explanation about the general meetings of shareholders
□ Applicable √ N/A
IV. Implementation of and changes in arrangements of differentiated voting rights during the reporting period
□ Applicable √ N/A
V. Governance of red-chip structure companies
□ Applicable √ N/A
VI. Directors, supervisors, and senior officers(I) Changes in shareholding and remunerations of current directors, supervisors, senior officers and key technical staff and the former directors,supervisors, senior officers and key technical staff who left the Company during the reporting period
√ Applicable □ N/A
Unit: Share
| Name | Title (Note) | Gender | Age | Beginning date of term of office | Expiry date of term of office | Number of shares held as at January 1, 2020 | Number of shares held as at December 31, 2020 | Change in shareholding | Cause of change | Total remuneration (inclusive of tax) received from the Company during the reporting period (in RMB 0’000) | Whether or not receive any remuneration from any affiliate of the Company |
| LI Yi | Chairman, General Manager, key technical staff | Male | 51 | Acting as the Chairman from July 18, 2018; as the General Manager from December 31, 2021 | August 2, 2024 | / | / | / | / | 306.84 | No |
| YU Zhuoping | Director | Male | 62 | March 29, 2022 | August 2, 2024 | / | / | / | / | / | No |
| ZHANG Wei | Director, Deputy General | Male | 46 | Acting as the director from August 3, | August 2, 2024 | / | / | / | / | 23.14 | No |
| Manager | 2021; as the Deputy General Manager from December 31, 2021 | ||||||||||
| NING Xiangdong | Independent director | Male | 56 | July 18, 2018 | August 2, 2024 | / | / | / | / | 18.00 | No |
| TANG Guliang | Independent director | Male | 59 | July 18, 2018 | August 2, 2024 | / | / | / | / | 18.00 | No |
| CHEN Youchun | Independent director | Male | 46 | August 3, 2021 | August 2, 2024 | / | / | / | / | 7.43 | No |
| WANG Yingxia | Director, Financial Director | Female | 40 | August 3, 2021 | August 2, 2024 | 15,420 | 6,000 | -9,420 | Personal reason (Note 3) | 34.66 | No |
| GAO Lijing | Chairperson of the Board of Supervisors | Female | 42 | July 18, 2018 | August 2, 2024 | / | / | / | / | 83.10 | No |
| SUN Hongdeng | Supervisor | Male | 41 | August 3, 2021 | August 2, 2024 | 8,000 | 3,000 | -5,000 | Personal reason (Note 3) | 32.62 | No |
| WANG Yanyun | Supervisor | Female | 45 | July 18, 2018 | August 2, 2024 | / | / | / | / | 35.47 | No |
| LIANG Guanning | Deputy General Manager | Male | 42 | December 31, 2021 | August 2, 2024 | / | / | / | / | 0.8 | No |
| YAN Li | Board Secretary | Female | 38 | May 19, 2020 | August 2, 2024 | 15,000 | 15,000 | / | / | 69.20 | No |
| HU Fei | Key technical staff, Deputy General Manager (left) | Male | 41 | Acting as the Deputy General Manager from July 18, 2018 | Left the post of Deputy General Manager on August 3, 2021 | 30,000 | 30,000 | / | / | 135.01 | No |
| YU Xin | Key technical | Male | 42 | / | / | 15,000 | 15,000 | / | / | 103.96 | No |
| staff | |||||||||||
| WANG Lin | Key technical staff | Male | 41 | / | / | 15,000 | 15,000 | / | / | 90.99 | No |
| WANG Zeqin | Key technical staff | Male | 45 | August 23, 2021 | / | 16,500 | 0 | -16,500 | Personal reason (Note 4) | 48.27 | No |
| GUO Zuqiang | Key technical staff | Male | 32 | / | / | 0 | / | / | / | 75.37 | No |
| BO Lianming | Director (retired), General Manager (retired) | Male | 59 | July 18, 2018 | Retired from General Manager on December 31, 2021; retired from director on March 11, 2022 | 30,000 | 30,000 | / | / | 332.40 | No |
| YAN Yan | Director (retired) | Male | 65 | July 18, 2018 | August 3, 2021 | / | / | / | / | 8.86 | No |
| WU Bin | Director (retired) | Male | 51 | July 18, 2018 | August 3, 2021 | / | / | / | / | / | No |
| LIANG Rong | Supervisor (retired) | Male | 51 | July 18, 2018 | August 3, 2021 | / | / | / | / | 26.21 | No |
| WU Bin | Deputy General Manager (retired) | Male | 57 | July 18, 2018 | August 3, 2021 | 30,000 | 30,000 | / | / | 58.33 | No |
| LI Lu | Deputy General Manager (retired) | Male | 51 | July 18, 2018 | August 3, 2021 | 30,000 | 30,000 | / | / | 60.68 | No |
| ZHAO Ruijin | Financial Director (retired) | Male | 44 | July 18, 2018 | August 3, 2021 | 15,000 | 30,050 | +15,050 | Personal reason | 50.96 | No |
| WU Xiliang | Key technical staff (retired) | Male | 47 | / | August 23, 2021 | 9,000 | 0 | -9,000 | Personal reason | 39.75 | No |
| Total | / | / | / | / | / | 228,920 | 204,050 | -24,870 | / | 1,660.05 | / |
Note: (1) The table above shows shares directly held by the directors, supervisors, senior officers, and key technical staff personally in the Company.
(2) As of the end of the reporting period, indirect shareholding is as follows: LI Yi holds shares as described in “Section VII - IV(II) Actual controller”; YANYan holds 1,771,894 shares in the Company indirectly through Light Zone, decreased by 590,606 shares compared the opening quantity; BO Lianming holds sharesin the Company by directly and indirectly holding shares in Appotronics Daye; WU Bin holds shares in the Company indirectly through Appotronics Hongye, LiansongCapital, and Jinleijing; HU Fei, GAO Lijing, LIANG Rong, WANG Yanyun, WU Xiliang, and WANG Yingxia hold shares in the Company through AppotronicsHongye and by indirectly holding shares in Appotronics Daye; ZHAO Ruijin holds shares in the Company by indirectly holding shares in Appotronics Daye; YU Xinand GUO Zuqiang hold shares in the Company indirectly through Appotronics Daye; WANG Lin holds shares in the Company indirectly through Appotronics Hongye.except for Light Zone, which experienced changes in its shareholding during the reporting period, no change occurred to the indirect shareholding above during thereporting period.
(3) The Company held the 3
rdextraordinary general meeting of 2021 on August 3, 2021, at which Mr. SUN Hongdeng was elected as a supervisor of the Company;the Company held an employee representative meeting on July 15, 2021, at which Ms. WANG Yingxia was elected as the employee director; moreover, at the 1
st
meeting of the second Board of Directors held on August 3, 2021, Ms. WANG Yingxia was engaged as the Financial Director. According to the self inspection, Mr.SUN Hongdeng and Ms. WANG Yingxia traded shares of the Company prior to their appointment; therefore, their acts are in compliance with laws without tradingby making use of insider information.
(4) On August 23, 2021, in consideration of the leadership, participation, past posts held, acquisition of patents for invention, and other factors, under the approvalof the Chairman, the Company identified Mr. WANG Zeqin as a key technical personnel of the Company. According to the self inspection, Mr. WANG Zeqqin tradedshares of the Company prior to his appointment; therefore, his acts are in compliance with laws without trading by making use of insider information.
(5) Newly engaged and retired directors, supervisors, senior officers, and key technical staff during the reporting period, disclosure of the remunerations acquiredduring their term of office.
| Name | Main work experience |
| LI Yi | Mr. LI Yi holds a bachelor’s degree from Tsinghua University, and a master’s degree and a doctor’s degree from the University of Rochester. He founded the Company in October 2006 and has served as Chairman of the Company since December 2010. From 2020 to 2021, Mr. LI Yi was granted the “2020 Shenzhen Mayor Award of Science and Technology”, “2021 Leader in Quality Development”, and other honors. |
| YU Zhuoping | Mr. YU Zhuoping holds a bachelor’s degree and a master’s degree in Mechanical Engineering from Tongji University, and a doctor’s degree in |
| Vehicle Engineering from Tsinghua University. He is currently holding various positions, including Director of the Collaborative Innovation Center of Intelligent New Energy Vehicle at Tongji University; Vice President of China Society of Automotive Engineers; Deputy President and Director of the expert commission of China Hydrogen Alliance; Chairman of Tongji Automotive Design and Research Institute Co., Ltd.; Chairman of Nanchang Jiling New Energy Technology Co., Ltd.; Chairman of Shanghai Motor Vehicle Inspection Certification & Tech Innovation Center Co., Ltd.; director of Beijing Guoqing Zhonglian Hydrogen Energy Technology Research Institute Co., Ltd.; Chairman and General manager of Shanghai AI NEV Innovative Platform Co., Ltd.; non-executive director of Huazhong In-Vehicle Holdings Co., Ltd.; independent director of Shanghai Highly (Group) Co., Ltd., Weichai Power Co., Ltd., Ningbo Shenglong Automotive Powertrain System Co., Ltd., and Huayu Automotive Systems Co., Ltd. He has been a Director of the Company since March 2022. | |
| ZHANG Wei | Mr. ZHANG Wei holds a doctor’s degree from Indiana University and a lawyer certificate in New York, the USA. He was previously Legal Director of Legend Holdings Corporation, General Manager of the Legal Affairs Department of China Vanke Co., Ltd., and Vice President of Qifei International Development Co., Ltd. Before joining the Company, Mr. ZHANG Wei was the Vice President of 360 Group. He was an independent director from July 2018 to August 2021; and has been a non-independent director of the Company since August 2021. Based on his confidence in the future development of the Company, he joined the management of the Company in December 2021, acting as the Deputy General Manager of the Company. |
| WANG Yingxia | Ms. WANG Yingxia holds a bachelor’s degree. She was the financial head and financial manager at Shenzhen YLX Technology Development Co., Ltd. from January 2007 to April 2017, and acted as the Vice Financial Director of the Company from April 2017 to August 2021. She has been a director and Financial Director of the Company since August 2021. |
| NING Xiangdong | Mr. NING Xiangdong holds a doctor’s degree from Tsinghua University. He previously served as teaching assistant, lecturer and associate professor at Tsinghua University and Executive Deputy Director of National Center for Economic Research, Tsinghua University, and currently is a professor and doctoral tutor of Tsinghua University, School of Economic and Management. He has been an independent director of the Company since July 2018. |
| TANG Guliang | Mr. TANG Guliang holds a doctor’s degree from Chinese Academy of Fiscal Sciences. He previously served as Dean and professor of Beijing Technology and Business University, School of Accounting (formerly known as Beijing College of Commerce), and currently is a professor and doctoral tutor of the Business School, University of International Business and Economics. He has been an independent director of the Company since July 2018. |
| CHEN Youchun | Mr. CHEN Youchun holds a bachelor’s degree from Southwest University of Political Science and Law and University of Northumbria in the UK, a master’s degree from Wuhan University, and a doctor’s degree from Southwest University of Political Science and Law. He is currently holding various positions, including Partner of Beijing Junzejun (Shenzhen) Law Firm, and independent director of Nuode Investment Co., Ltd., Xinrongmao Group Co., Ltd., and Shenzhen ValueHD Technology Co., Ltd. He has been an independent director of the Company since August 2021. |
| GAO Lijing | Ms. GAO Lijing is a master candidate at the Chinese University of Hong Kong, and has acquired the Legal Professional Qualification Certificate after passing the National Judicial Examination. She previously worked at Southern China IP Office of Foxconn Technology Group, and Center for IP and Legal Affairs of Netac Technology Co., Ltd. She has served as a supervisor of Netac Technology Co., Ltd. from 2008 to 2020, and joined the Company in 2013. She is current the Deputy General Manager at the Legal Affairs Center of the Company, and has been the chairperson of the Board of Supervisors since July 2018. |
| SUN Hongdeng | Mr. SUN Hongdeng is a master candidate at the Open University of Hong Kong. He worked at Huawei Technologies Co., Ltd. from January 2006 to |
| June 2018, and joined the Company in November 2018. He is the Director of the Audit Department at present, and has been a supervisor of the Company since August 2021. | |
| WANG Yanyun | Ms. WANG Yanyun holds a bachelor’s degree. She has been a senior manager of the Company since July 2013, and a Supervisor of the Company since July 2018. |
| LIANG Guanning | Mr. LIANG Guanning holds a bachelor’s degree in the Science of Management from Sun Yat-sen University; he is also a senior member of the Association of Chartered Certified Accountants. He workded at KPMG Accounting Firm in China and Singapore as the audit manager from 2002 to 2008, and hold senior management posts at GCL-Poly Energy Holdings and Weibo. He was the Financial Director and Board Secretary of Yangtze Optical Fibre and Cable Co., Ltd. from February 2017 to October 2021. Mr. LIANG joined the Company in October 2021, and has been acting as the Deputy General Manager of the Company since December 2021. |
| YAN Li | Ms. YAN Li holds a master’s degree. She previously worked as the securities affairs representative at Midea Appliances (000527) and Midea Group (000333), and board secretary at Yinghe Technology (300457). She joined Appotronics in May 2017, and has been working as the Board Secretary since May 2020. |
| HU Fei | Mr. HU Fei holds a bachelor’s degree and a master’s degree from Tsinghua University and a master’s degree from Rensselaer Polytechnic Institute. He was previously a software engineer at Optical Research Associates, and Deputy President, R&D of Shenzhen YLX Technology Development Co., Ltd. and Appotronics Ltd. He has served as CTO of the Company since February 2018, and Deputy General Manager of the Company since July 2018. |
| YU Xin | Mr. YU Xin holds a doctor’s degree from Tsinghua University. He was previously a senior software engineer at Schlumberger Ltd. and senior researcher at Shenzhen Lighting Institute. He joined the Company in February 2018, and used to hold posts as the Senior Researcher, General Manager of the Cinema Solution Business Division, General Manager of the Innovation Center and Cinema Business Division; he is currently a Vice President of the Company. |
| WANG Lin | Mr. WANG Lin holds a bachelor’s degree from University of Science and Technology of China, a master’s degree from Tsinghua University, and a doctor’s degree from Universidad Politécnica de Madrid. He was previously a senior optical engineer at Shanghai Phillips Lighting (China) Investment Co., Ltd. He has been a senior optical research of the Company since February 2017. |
| WANG Zeqin | Mr. WANG Zeqin holds a bachelor’s degree in Optoelectronics Technology from Jilin University. From November 2002 to August 2013, he worked at O-net Communications (Shenzhen) Co., Ltd. as the research and development engineer, research and development export, etc. He worked at Shenzhen YLX Technology Development Co., Ltd. from September 2013 to April 2017, and used to be a research at the Company’s research and development center from May 2017. At present, he is the R&D Director of the Company, responsible for the core device R&D center and complete equipment development center of the Company. |
| GUO Zuqiang | Mr. GUO Zuqiang holds a master’s degree from Tsinghua University. He was previously an optical engineer at Shenzhen YLX Technology Development Co., Ltd. He used to be the R&D manager from March 2017; currently he is the responsible person of the core device R&D center. |
| BO Lianming | Mr. BO Lianming holds a doctor’s degree from Xi’an Jiaotong University. He was previously Chief Accountant of Shenzhen Airlines Co., Ltd., President and CEO of Shenzhen Chinastar Optoelectronic Co., Limited, Director and President of TCL Technology Group Corporation and Chairman and CEO of TCL Multimedia Technology Holdings Limited. He joined the Company in March 2018, responsible for the management and operation of the Company. He has been the General Manager of the Company since July 2018, and a director of the Company from July 2018 to March 2022. |
| YAN Yan | Mr. YAN Yan holds a master’s degree from Princeton University. He was previously Economist of Washington Headquarter of the World Bank, |
| researcher of American Thinker Hudson Institute, Director of Strategic Planning and Business Development of Sprint International Corporation in Asia Pacific, Managing Director of Emerging Markets Partnership in the Management Company of AIG Asian Infrastructure Investment Fund and Director of Hong Kong Office. He has served as Founding Managing Partner of SAIF Partners since October 2001. He was a director of the Company from December 2016 to August 2021. | |
| WUBIN | Mr. WUBIN holds a master’s degree from Stanford University. He was previously Global Associate Director of McKinsey & Company and Chief Inspector of Legend Holdings Corporation. He has served as Managing Director of CITIC Private Equity Funds since 2010. He was a director of the Company from December 2016 to August 2021. |
| LIANG Rong | Mr. LIANG Rong holds a master’s degree from Shanghai University of Finance and Economics. He joined the Company in 2013, and served as Assistant to Chairman of Appotronics Ltd. He has been Director of Public Affairs of the Company since March 2018, He was a Supervisor of the Company from November 2017 to August 2021. |
| WU Bin | Mr. WU Bin holds amaster’s degree from Party School of the CPC. He was previously a non-executive director of Shenzhen Gotonly Investment Ltd. and Vice President of Shenzhen Lighting Institute. He was a Deputy General Manager of the Company from October 2018 to August 2021. |
| LI Lu | Mr. LI Lu holds amaster’s degree from Cheung Kong Graduate School of Business. He was previously Deputy President of TCL Multimedia Technology Holdings Limited., General Manager of TCL (China) Sales Company, and General Manager of White Goods Business Division of TCL Technology Group Corporation. He was a Deputy General Manager of the Company from October 2018 to August 2021. |
| ZHAO Ruijin | Mr. ZHAO Ruijin holds a master’s degree from Peking University. He was previously Financial Manager of ZTE Corporation, Financial Director and Assistant to General Manager of Shenzhen ZNV Technology Co., Ltd. He joined the Company in February 2018 as Director of the Department of Financial Management, He was the Financial Director of the Company from July 2018 to August 2021. |
| WU Xiliang | Mr. WU Xiliang holds a bachelor’s degree from Huazhong University of Science and Technology. He served as R&D Manager and Technology Director of the Company between 2007 and 2016, and has been Deputy General Manager of Fengmi since 2016. |
Other information
□ Applicable √ N/A
(II) Posts held by current directors, supervisors and senior officers and the former directors, supervisors and senior officers who left the Company duringthe reporting period
1. Posts held at corporate shareholders of the Company
√ Applicable □ N/A
| Name | Corporate shareholder | Posts held at corporate shareholder | Beginning date of term of office | Expiry date of term of office |
| LI Yi | Shenzhen Appotronics Holdings Limited | Executive Director & General Manager | January 2014 | / |
| LI Yi | Shenzhen Appotronics Daye Investment Partnership (LP) | Representative of Managing Partner | October 2016 | / |
| LI Yi | Shenzhen Appotronics Hongye Investment Partnership (LP) | Representative of Managing | December 2015 | / |
| Partner | ||||
| LI Yi | Shenzhen Jinleijing Investment Limited Partnership (LP) | Representative of Managing Partner | October 2016 | / |
| LI Yi | Shenzhen Yuanshi Laser Industrial Investment Consulting Partnership (LP) | Representative of Managing Partner | June 2016 | / |
| LI Yi | Shenzhen Appotronics Chengye Consulting Partnership (LP) | Representative of Managing Partner | July 2017 | / |
| LI Yi | Blackpine Investment Corp. Limited | Director | September 2018 | / |
| YAN Yan (Former director) | SAIF IV Hong Kong (China Investments) Limited | Director | August 2013 | / |
| YAN Yan (Former director) | Light Zone Limited | Director | March 2017 | / |
| WUBIN (Former director) | Beijing Panmao Consulting Co., Ltd. | Managing Director | January 2010 | / |
| Explanation about the posts held at corporate shareholders of the Company | None | |||
2. Posts held at other entities
√ Applicable □ N/A
| Name | Other entity | Posts held at other entity | Beginning date of term of office | Expiry date of term of office |
| LI Yi | Shenzhen Appotronics Deye Consulting Partnership (LP) | Representative of Managing Partner | May 2018 | |
| LI Yi | CINIONIC | Director | November 2018 | |
| LI Yi | Shenzhen Appotronics Technical Consulting Co., Ltd. | Executive Director & General Manager | October 2017 | |
| LI Yi | Jiangsu Yisheng Technology Co., Ltd. | Chairman | September 2017 | January 2021 |
| LI Yi | Shenzhen YLX Technology Development Co., Ltd. | Chairman | January 2007 | |
| LI Yi | Shenzhen Qingda Yifeng Equity Investment Fund Management Enterprise (LP) | General Manager & Executive Director | January 2017 | |
| LI Yi | Shenzhen Qingda Yifeng Investment Consulting Partnership (LP) | Managing Partner | October 2016 |
| LI Yi | APEX Fund Managed Limited | Director | November 2013 | |
| LI Yi | Atria Light Ltd. | Director | April 2018 | |
| LI Yi | Atria Light Hong Kong Limited | Director | April 2018 | |
| LI Yi | Long Pine Investment Ltd. | Director | September 2016 | |
| LI Yi | Longpines Financial Investment Ltd. | Director | May 2018 | |
| LI Yi | YLX (Hong Kong) Limited | Director | June 2008 | |
| LI Yi | WeCast Technology Corp. | Executive Director | August 2020 | |
| YU Zhuoping | Tongji Automotive Design and Research Institute Co., Ltd. | Legal representative, General Manager | December 2017 | |
| YU Zhuoping | Shanghai AI NEV Innovative Platform Co., Ltd. | Legal Representative & Chairman | March 2018 | |
| YU Zhuoping | Weichai Power Co., Ltd. | Independent director | July 2020 | |
| YU Zhuoping | Nanchang Jiling New Energy Technology Co., Ltd. | Legal Representative & Chairman | August 2020 | |
| YU Zhuoping | Shanghai Highly (Group) Co., Ltd. | Independent director | September 2020 | |
| YU Zhuoping | Ningbo Shenglong Automotive Powertrain System Co., Ltd. | Independent director | October 2020 | |
| YU Zhuoping | Beijing Guoqing Zhonglian Hydrogen Energy Technology Research Institute Co., Ltd. | Director | October 2020 | |
| YU Zhuoping | Shanghai Motor Vehicle Inspection Certification & Tech Innovation Center Co., Ltd. | Director | April 2021 | |
| YU Zhuoping | Huayu Automotive Systems Co., Ltd. | Independent director | July 2021 | |
| YU Zhuoping | Jiangling Motors Corporation Limited | Independent director | October 2021 | |
| YU Zhuoping | Huazhong In-Vehicle Holdings Co., Ltd. | Non-executive Director | August 2019 | |
| ZHANG Wei | Qifei International Development Co. Limited | Vice President | February 2019 | September 2021 |
| ZHANG Wei | 360 Group | Vice President | February 2019 | September 2021 |
| ZHANG Wei | AVIC Vanke Co., Ltd. | Director | January 2018 | |
| ZHANG Wei | Hengqin Vanke Cloudland Commercial Services Co., Ltd. | Director & General Manager | May 2017 | |
| ZHANG Wei | Shenzhen Wanhu Management Consulting Co., Ltd. | Supervisor | November 2017 | |
| ZHANG Wei | Shenzhen Wanhu Quanyuan Management Consulting Co., Ltd. | Supervisor | November 2017 | |
| ZHANG Wei | Shenzhen Wanshuzhimiao Management Consulting Co., Ltd. | Supervisor | November 2017 |
| ZHANG Wei | Shenzhen Wanqing Management Consulting Co., Ltd. | Supervisor | November 2017 | |
| ZHANG Wei | Shenzhen Wanmazhengxian Management Consulting Co., Ltd. | Supervisor | November 2017 | |
| ZHANG Wei | Dongguan Vanke City Development Co., Ltd. | Supervisor | May 2018 | |
| ZHANG Wei | Dongguan Vanke Real Estate Co., Ltd. | Supervisor | October 2015 | |
| ZHANG Wei | Yangshuo Banyan Tree Hotel Co., Ltd. | Director | September 2018 | |
| ZHANG Wei | Lijiang Banyan Tree Property Services Co., Ltd. | Director | May 2018 | |
| ZHANG Wei | Lijiang Banyan Tree Hotel Co., Ltd. | Director | March 2018 | |
| ZHANG Wei | Lijiang Banyan Tree International Travel Agency Co., Ltd. | Director | March 2018 | |
| ZHANG Wei | Lijiang Angsana Real Estate Development Co., Ltd. | Director | July 2018 | |
| ZHANG Wei | Huangshan Banyan Tree Property Management Co., Ltd. | Director | September 2018 | |
| ZHANG Wei | Huangshan Banyan Tree Tourism Development Co., Ltd. | Director | September 2018 | |
| ZHANG Wei | Chengdu Banyan Tree No. 1 Real Estate Co., Ltd. | Director | June 2018 | |
| ZHANG Wei | Chengdu Banyan Tree No. 3 Real Estate Co., Ltd. | Director | June 2018 | |
| ZHANG Wei | Chengdu Banyan Tree No. 4 Real Estate Co., Ltd. | Director | June 2018 | |
| ZHANG Wei | 360 Security Technology Inc. | Vice President | February 2019 | September 2021 |
| ZHANG Wei | 360 Technology Group Co., Ltd. | Director | January 2021 | |
| ZHANG Wei | Tianjin 360 Technology Development Co., Ltd. | Director | February 2021 | |
| ZHANG Wei | Hangzhou Qifei Huachuang Technology Co., Ltd. | Director | January 2021 | |
| ZHANG Wei | Shanghai Jiehu Network Technology Co., Ltd. | Executive Director & Manager & Legal Representative | January 2021 | |
| ZHANG Wei | Shenzhen Zhuoying Technology Co., Ltd. | Director | June 2020 | |
| ZHANG Wei | Zhenro Services Group Co., Ltd. | Director | June 2020 | |
| ZHANG Wei | Lida Lianma (Zhuhai) Equity Investment Management Co., Ltd. | Director | July 2020 | August 2021 |
| ZHANG Wei | Tian’an Xincheng Development (Hengqin) Co., Ltd. | Director | July 2017 | September 2021 |
| ZHANG Wei | Shanghai 360 Changfeng Technology Co., Ltd. | Director & Legal Representative | November 2020 | December 2021 |
| NING Xiangdong | Tsinghua University | Professor & Doctoral Tutor | 1990 | |
| NING Xiangdong | Sinopec Sales Co., Ltd. | Independent director | December 2018 | |
| NING Xiangdong | China Life Asset Management Co., Ltd. | Independent director | March 2018 |
| NING Xiangdong | Sinochem Energy Co., Ltd. | Independent director | August 2018 | |
| NING Xiangdong | MH Robot & Automation Co., Ltd. | Independent director | December 2021 | |
| NING Xiangdong | Xiamen Bank Co., Ltd. | Director | July 2017 | |
| NING Xiangdong | Shandong Heavy Industry Group Co., Ltd. | Director | January 2018 | |
| TANG Guliang | University of International Business and Economics | Professor | March 2006 | |
| TANG Guliang | China JIC Leasing Co., Ltd. | Independent director | April 2017 | |
| TANG Guliang | Three Gorges Capital Holdings Co., Ltd. | Independent director | February 2018 | |
| TANG Guliang | Shanghai Fosun Pharmaceutical (Group) Co., Ltd. | Independent director | March 2019 | |
| TANG Guliang | Jointown Pharmaceutical Group Co., Ltd. | Independent director | November 2020 | |
| CHEN Youchun | Beijing Junzejun (Shenzhen) Law Firm | Partner | July 2004 | |
| CHEN Youchun | Nuode Investment Co., Ltd. | Independent director | February 2018 | |
| CHEN Youchun | Xinrongmao Group Co., Ltd. | Independent director | February 2018 | |
| CHEN Youchun | Shenzhen ValueHD Technology Co., Ltd. | Independent director | July 2020 | |
| WANG Yingxia | Shenzhen Yixingzhijia Trade Co., Ltd. | Supervisor | January 2018 | |
| LIANG Guanning | Sichuan Lefei Optoelectric Technology Co., Ltd. | Director | June 2017 | |
| LIANG Guanning | Zhejiang Lianfei Optical Fiber & Optical Cable Co., Ltd. | Director | May 2019 | April 2022 |
| LIANG Guanning | Changfei (Wuhan) Optical System Co., Ltd. | Director | March 2021 | |
| LIANG Guanning | AVIC Baosheng Ocean Engineering Cable Co., Ltd. | Director | December 2018 | |
| LIANG Guanning | Baosheng YOFC Marine Engineering Co., Ltd. | Director | December 2018 | |
| LIANG Guanning | Wuhan Fenjin Smart Machine Co., Ltd. | Vice Chairman | September 2019 | |
| LIANG Guanning | Wuhan Changfei Capital Management Co., Ltd. | Manager | October 2018 | April 2022 |
| LIANG Guanning | Yangtze Optical Fiber and Cable (Shanghai) Co., Ltd. | Supervisor | May 2019 | |
| LIANG Guanning | EverPro (Wuhan) Technology Co., Ltd. | Supervisor | November 2020 | February 2022 |
| BO Lianming (Former director, and former General Manager) | GDC Technology Limited (British Virgin Islands) | Director | March 2021 | |
| YAN Yan (Former director) | SAIF Investment Management Consulting (Shanghai) Co., Ltd. | General Manager | June 2002 | |
| YAN Yan (Former director) | SAIF Partners | Founding Managing Partner | October 2001 |
| YAN Yan (Former director) | Atria Light Ltd. | Director | May 2018 | |
| YAN Yan (Former director) | Beijing Daotong Changjing Investment Management Center (LP) | Representative of Managing Partner | July 2011 | |
| YAN Yan (Former director) | Beijing SAIF Chuangyuan Investment Center (LP) | Representative of Managing Partner | August 2010 | |
| YAN Yan (Former director) | Beijing SAIF Hongyuan Investment Center (LP) | Representative of Managing Partner | October 2010 | |
| YAN Yan (Former director) | Beijing SAIF Xiangrui Investment Center (LP) | Representative of Managing Partner | April 2010 | |
| YAN Yan (Former director) | Changzhou SAIF High-Tech Venture Capital Center (LP) | Representative of Managing Partner | December 2009 | |
| YAN Yan (Former director) | Guangzhou SAIF Guangdong Fortune Radio and Television Network Investment Limited Partnership (LP) | Representative of Managing Partner | December 2011 | |
| YAN Yan (Former director) | Hefei SAIF Heyuan Venture Capital Center (LP) | Representative of Managing Partner | January 2011 | |
| YAN Yan (Former director) | Qingdao Haier-Saifu Intelligent Family Venture Capital Center (LP) | Representative of Managing Partner | October 2014 | |
| YAN Yan (Former director) | SAIF Songyuan (Shanghai) Equity Investment Fund Partnership (LP) | Representative of Managing Partner | September 2012 | |
| YAN Yan (Former director) | Xiamen SAIF Equity Investment Partnership (LP) | Representative of Managing Partner | August 2012 | |
| YAN Yan (Former director) | Xiamen SAIF Keyuan Equity Investment Partnership (LP) | Representative of Managing Partner | August 2012 | |
| YAN Yan (Former director) | Tianjin SAIF Venture Capital Fund (LP) | Representative of Managing Partner | July 2008 | |
| YAN Yan (Former director) | Tianjin SAIF Composite Equity Investment Center (LP) | Representative of Managing Partner | May 2010 | |
| YAN Yan (Former director) | Tianjin SAIF Hanyuan Equity Investment Partnership (LP) | Representative of Managing Partner | June 2010 | |
| YAN Yan (Former director) | Tianjin SAIF Shengyuan Investment Management Center (LP) | Representative of Managing Partner | July 2008 |
| YAN Yan (Former director) | Hefei SAIF Venture Capital Management Co., Ltd. | Legal Representative & Executive Director & General Manager | November 2010 | |
| YAN Yan (Former director) | Nanjing SAIF Hengzhun Venture Capital Fund (LP) | Representative of Managing Partner | July 2017 | |
| YAN Yan (Former director) | China Resources Land Limited | Independent Non-executive Director | July 2006 | |
| YAN Yan (Former director) | Shanghai SAIF Yanyuan Equity Fund Management Co. Ltd. | Legal Representative & Executive Director & General Manager | January 2013 | |
| YAN Yan (Former director) | Tianjin Himalaya Investment Consulting Co. Ltd. | Legal Representative & Executive Director & Manager | June 2008 | |
| YAN Yan (Former director) | Qingdao SAIF Investment Management Co. Ltd. | Legal Representative & Chairman & General Manager | September 2014 | |
| YAN Yan (Former director) | Changzhou SAIF High-Tech Venture Capital Management Co. Ltd. | Legal Representative & Chairman | October 2009 | |
| YAN Yan (Former director) | Tianjin SAIF Zhongyuan Investment Advisory Co. Ltd. | Legal Representative & Chairman | July 2008 | |
| YAN Yan (Former director) | Shenzhen SAIF Qianyuan Equity Investment Fund Management Co. Ltd. | Legal Representative & Chairman | August 2013 | |
| YAN Yan (Former director) | Beijing Softbank SAIF Investment Advisory Co., Ltd. | Chairman | February 2001 | |
| YAN Yan (Former director) | Huangshan SAIF Fund Management Co., Ltd. | Chairman | November 2016 | |
| YAN Yan (Former director) | Youth Happy (Beijing) Business Management Co., Ltd. | Chairman | July 2012 | |
| YAN Yan (Former director) | Shanghai TopxGun Robotics Co., Ltd. | Chairman | September 2015 | |
| YAN Yan (Former director) | CYPA (Beijing) Investment Management Co., Ltd. | Chairman | June 2012 | |
| YAN Yan (Former director) | Xi’an Maike Metal International Group Co., Ltd. | Vice Chairman | April 2014 | |
| YAN Yan (Former director) | SAIF IV Mauritius (China Investment) Ltd. | Director | July 2010 |
| YAN Yan (Former director) | Anqing SAIF Huanxin Enterprise Management Consultant Co., Ltd. | Director | November 2014 | |
| YAN Yan (Former director) | Beijing Hanyuan Capital Management Co., Ltd. | Director | December 2015 | |
| YAN Yan (Former director) | Beijing Xiaodu Entertainment Technology Co., Ltd. | Director | January 2018 | |
| YAN Yan (Former director) | Guangdong Cable Co., Ltd. | Director | February 2017 | |
| YAN Yan (Former director) | Guangzhou SAIF Heyin Asset Management Co., Ltd. | Director | August 2013 | |
| YAN Yan (Former director) | Heilongjiang Dazheng Derun Investment Management Co., Ltd. | Director | February 2017 | |
| YAN Yan (Former director) | Heilongjiang Dazheng SAIF Investment Management Co., Ltd. | Director | November 2009 | |
| YAN Yan (Former director) | Pacoo (Beijing) Technology Co., Ltd. | Director | September 2016 | |
| YAN Yan (Former director) | Xiamen SAIF Venture Capital Management Co., Ltd. | Director | February 2012 | |
| YAN Yan (Former director) | Shanghai Wenxi Enterprise Management Co., Ltd. | Director | June 2017 | |
| YAN Yan (Former director) | Xinyong Computing Information Technology (Shanghai) Co., Ltd. | Director | September 2017 | |
| YAN Yan (Former director) | Shenzhen Shuwei Big Data Technology Co., Ltd. | Director | October 2018 | |
| YAN Yan (Former director) | ATA Creativity Global | Director | March 2005 | |
| YAN Yan (Former director) | Yinda International Holding Company Limited | Director | August 2014 | |
| YAN Yan (Former director) | Wisers Information Holdings Company Limited | Director | May 2016 | |
| YAN Yan (Former director) | 360 Finance Inc. | Independent director | July 2019 | |
| YAN Yan (Former director) | Jiaxing Tengyuan Investment Partnership (Limited Partnership) | Entrusted representative | January 2021 |
| YAN Yan (Former director) | Xi’an Zhigui Internet Technology Co., Ltd. | Director | August 2020 | |
| YAN Yan (Former director) | China Southern Airlines Company Limited | Independent Non-executive Director | April 2021 | |
| YAN Yan (Former director) | Shanghai Jinhui Information Technology Co., Ltd. | Chairman | December 2021 | |
| WUBIN (Former director) | Shaanxi Xifeng 15-Year and 6-Year Liquor Marketing Co., Ltd. | Director | 2013 | April 2021 |
| WUBIN (Former director) | Yunnan Green A Biological Project Co., Ltd. | Director | July 2018 | |
| WUBIN (Former director) | Hangzhou BroadLink Electronic Technology Co., Ltd. | Director | December 2020 | |
| WUBIN (Former director) | Pine Medical Limited | Director | 2019 | |
| WUBIN (Former director) | Hong Kong Excellence Limited | Director | 2019 | |
| WU Bin (Former senior officer) | Shenzhen Shangzuo Charity Foundation | Deputy Director | November 2015 | |
| WU Bin (Former senior officer) | Shenzhen Lighting Institute | Director | November 2016 | |
| Explanation about the posts held at other entities | None | |||
(III) Remunerations of directors, supervisors, senior officers and key technical staff
√ Applicable □ N/A
In RMB 0’000
| Decision-making procedure regarding the remunerations of directors, supervisors and senior officers | Pursuant to the Company’s Articles of Association, the Compensation and Performance Assessment Committee consider and review the compensation policy and proposal for directors and senior officers; the compensation proposal for senior officers is implemented after being approved by the Board of Directors; the compensation proposal for directors is implemented after being adopted by the Board of Directors and then approved by the general meeting of shareholders; and the compensation proposal for supervisors is implemented after being adopted by the Board of Supervisors and then approved by the general meeting of shareholders. |
| Basis for determining the remunerations of | The Company’s directors and supervisors who hold posts in the Company shall receive remunerations for such |
| directors, supervisors and senior officers | posts pursuant to the relevant provisions of the Company, but will not receive remunerations in their capacity as director or supervisor. Each independent director will receive a fixed amount of director’s emoluments. Non-independent directors not holding posts in the Company will receive director’s emoluments pursuant to the compensation proposal approved by the general meeting of shareholders. Remunerations paid to senior officers comprise salaries and bonuses, where the salaries are paid on a monthly basis according to the ranks and duties of the senior officers, and the bonuses are paid according to the operating results of the Company and their performance in the given year. |
| Remunerations actually paid to directors, supervisors and senior officers | During the reporting period, the remunerations actually paid to directors, supervisors and senior officers are consistent with the relevant information disclosed by the Company. |
| Total remunerations paid to directors, supervisors and senior officers as of the end of the reporting period | 1,234.62 |
| Total remunerations paid to key technical staff as of the end of the reporting period | 800.19 |
Note: Dr. LI Yi, Chairman of the Company, and Dr. HU Fei, former Deputy General Manager of the Company, are key technical staff of the Company, and theremunerations actually paid to key technical staff as of the end of the reporting period contain their remunerations.
(IV) Changes in directors, supervisors, senior officers and key technical staff
√ Applicable □ N/A
| Name | Position | Change | Cause of change |
| ZHANG Wei | Director | Elected | Elected at the general meeting |
| CHEN Youchun | Independent director | Elected | Elected at the general meeting |
| WANG Yingxia | Employee representative director | Elected | Elected at the employee representative meeting |
| SUN Hongdeng | Supervisor | Elected | Elected at the general meeting |
| LI Yi | General Manager | Recruited | Engaged by the Board of Directors |
| ZHANG Wei | Deputy General Manager | Recruited | Engaged by the Board of Directors |
| LIANG Guanning | Deputy General Manager | Recruited | Engaged by the Board of Directors |
| WANG Yingxia | Financial Director | Recruited | Engaged by the Board of Directors |
| WANG Zeqin | Key technical staff | Recruited | Adjusted according to the specific standards for key technical personnel |
| YAN Yan | Former director | Left the Company | Expiry of the term of office |
| WUBIN | Former director | Left the Company | Expiry of the term of office |
| LIANG Rong | Former supervisor | Left the Company | Expiry of the term of office |
| BO Lianming | Former General Manager | Left the Company | Personal reason |
| WU Bin | Former Deputy General Manager | Left the Company | Expiry of the term of office |
| LI Lu | Former Deputy General Manager | Left the Company | Expiry of the term of office |
| HU Fei | Former Deputy General Manager | Left the Company | Expiry of the term of office |
| ZHAO Ruijin | Former Financial Director | Left the Company | Expiry of the term of office |
| WU Xiliang | Former key technical staff | Left the Company | Adjusted according to the specific standards for key technical personnel |
(V) Penalties imposed by the securities regulatory authorities in the past three years
□ Applicable √ N/A
(VI) Others
□ Applicable √ N/A
VII. Board meetings held during the reporting period
| Session | Date of meeting | Resolution |
| 29th meeting of the first Board of Directors | February 9, 2021 | The meeting reviewed and passed several proposals, including the Proposal on Adjusting the Plan of Increasing the Capital of a Controlled Subsidiary by Issuing Additional Shares & Related-party Transaction, the Proposal on Expected Daily Related-party Transactions in 2021, and the Proposal on Requesting Comprehensive Facility and Providing Guarantee by the Company and Subsidiaries in 2021. |
| 30th meeting of the first Board of Directors | March 26, 2021 | The meeting reviewed and passed several proposals, including the Proposal on the “2021 Restricted Share Incentive Plan (Draft)” and Summary Thereof and the Proposal on the Management Measures for the Appraisal of the “2021 Restrict Share Incentive Plan”. |
| 31st meeting of the first Board of Directors | April 22, 2021 | The meeting reviewed and passed several proposals, including the Proposal on the “2020 Work Report of the Board of Directors”, the Proposal on the “2020 Annual Financial Final Report”, and the Proposal on the “2020 Annual Report” and the Summary thereof. |
| 32nd meeting of the first Board of Directors | July 15, 2021 | The meeting reviewed and passed several proposals, including the Proposal on the Election of Non-independent Director Candidates of the Second Board of Directors of the Company, the Proposal on the Election of Independent Director Candidates of the Second Board of Directors of the Company, and the Proposal on Director Remunerations of the Second Board of Directors of the Company. |
| 1st meeting of the second Board of Directors | August 3, 2021 | The meeting reviewed and passed several proposals, including the Proposal on Electing the Chairperson for the Second Board of Directors of the Company, the Proposal on Electing Members for Specific-purpose Committees under the Board of Directors of the Company, and the Proposal on Engaging Senior Officers and Securities Representatives of the Company. |
| 2nd meeting of the second Board of Directors | August 24, 2021 | The meeting reviewed and passed several proposals, including the Proposal on the “2021 Semi-annual Report” and the Summary Thereof, and the Proposal on the “2021 Semi-annual Special Report on the Deposit and Use of Offering Proceeds”. |
| 3rd meeting of the second Board of Directors | September 30, 2021 | The meeting reviewed and passed several proposals, including the Proposal on the “2021 Second Restricted Share Incentive Plan (Draft)” and Summary Thereof and the Proposal on the Management Measures for the Appraisal of the “2021 Second Restrict Share Incentive Plan”, and the Proposal on Requesting the General Meeting to Authorize the Board of Directors to Handle Matters Related to the 2021 Second Restricted Share Incentive Plan. |
| 4th meeting of the second Board of Directors | October 22, 2021 | The meeting reviewed and passed the Proposal on the “2021 Third Quarter Report”, and the Proposal on Discarding Certain Restricted Shares Granted but Not Vested. |
| 5th meeting of the second Board of Directors | November 5, 2021 | The meeting reviewed and passed the Proposal on Increasing the Expected Amount of Day-to-day Related-party Translations for 2021 and the Proposal on Holding the 5th Extraordinary General Meeting of 2021. |
| 6th meeting of the second Board of Directors | December 7, 2021 | The meeting reviewed and passed the Proposal on Initially Granting Restricted Shares to Grantees. |
| 7th meeting of the second Board of Directors | December 31, 2021 | The meeting reviewed and passed several proposals, including the Proposal on Engaging Mr. LI Yi as the General Manager of the Company, the Proposal on Engaging Mr. ZHANG Wei as the Deputy General Manager of the Company, and the Proposal on Engaging Mr. LIANG Guanning as the Deputy General Manager of the Company. |
VIII. Performance of duties by the directors(I) Attendance by the directors of the meetings of the Board of Directors and shareholders
| Name of the Director | Whether or not an independent director | Attendance of the meetings of the Board of Directors | Attendance of the general meetings of shareholders | |||||
| Meetings the director should have attended in 2021 | Meetings attended in person | Meetings attended through communication equipment | Meetings attended by proxy | Absence times | Whether the director has been absent from two consecutive meetings | General meetings of shareholders attended | ||
| LI Yi | No | 11 | 11 | 9 | 0 | 0 | No | 6 |
| ZHANG Wei | No | 11 | 11 | 9 | 0 | 0 | No | 6 |
| NING Xiangdong | Yes | 11 | 11 | 11 | 0 | 0 | No | 6 |
| TANG Guliang | Yes | 11 | 11 | 9 | 0 | 0 | No | 6 |
| CHEN Youchun | Yes | 7 | 7 | 7 | 0 | 0 | No | 2 |
| WANG Yingxia | No | 7 | 7 | 7 | 0 | 0 | No | 2 |
| BO Lianming (former director) | No | 11 | 11 | 9 | 0 | 0 | No | 6 |
| YAN Yan (Former director) | No | 4 | 4 | 4 | 0 | 0 | No | 4 |
| WUBIN (Former director) | No | 4 | 4 | 3 | 0 | 0 | No | 4 |
Explanation about absence from two consecutive meetings of the Board of Directors
□ Applicable √ N/A
| Meetings of the Board of Directors held in 2019 | 11 |
| Where: Face-to-face meetings | 0 |
| Meeting held through communication equipment | 9 |
| Meetings held both in the form of face-to-face meeting and through communication equipment | 2 |
(II) Objections raised by directors to matters of the Company
□ Applicable √ N/A
(III) Others
□ Applicable √ N/A
IX. Specific-purpose committees under the Board of Directors
√ Applicable □ N/A
(1).Members of specific-purpose committees under the Board of Directors
| Category of specific-purpose committee | Members |
| Audit Committee | TANG Guliang (chairperson), CHEN Youchun, LI Yi |
| Nomination Committee | CHEN Youchun (chairperson), NING Xiangdong, LI Yi |
| Compensation and Performance Assessment Committee | NING Xiangdong (chairperson), TANG Guliang, ZHANG Wei |
| Strategy Committee | LI Yi (chairperson), BO Lianming, NING Xiangdong |
(2).The Audit Committee held 6 meetings during the reporting period
| Date of meeting | Content of meeting | Major opinions and suggestions | Performance of other duties |
| February 6, 2021 | Reviewed the proposal on issuing additional shares by subsidiaries, etc. | All proposals are reviewed and passed | None |
| March 23, 2021 | Reviewed the proposal on external investment by subsidiaries, etc. | All proposals are reviewed and passed | None |
| April 12, 2021 | Reviewed the proposal on the 2020 Annual Report, etc. | All proposals are reviewed and passed | None |
| August 20, 2021 | Reviewed the proposal on the 2021 Semi-annual Report, etc. | All proposals are reviewed and passed | None |
| October 19, 2021 | Reviewed the proposal on the 2021 Third Quarter Report, etc. | All proposals are reviewed and passed | None |
| November 2, 2021 | Reviewed the proposal on increasing the expected amount of day-to-day related-party transactions for 2021, etc. | All proposals are reviewed and passed | None |
(3).The Nomination Committee held 3 meetings during the reporting period
| Date of meeting | Content of meeting | Major opinions and suggestions | Performance of other duties |
| July 11, 2021 | Reviewed the proposal on the nomination of directors for the second Board of Directors, etc. | All proposals are reviewed and passed | None |
| August 3, 2021 | Reviewed the proposal on engaging senior officers, etc. | All proposals are reviewed and passed | None |
| December 29, 2021 | Reviewed the proposal on engaging senior officers, etc. | All proposals are reviewed and passed | None |
(4).The Remuneration and Appraisal Committee held 7 meetings during the reporting period
| Date of meeting | Content of meeting | Major opinions and suggestions | Performance of other duties |
| March 23, 2021 | Reviewed the proposal on the 2021 Restricted Share Incentive Plan, etc. | All proposals are reviewed and passed | None |
| April 12, 2021 | Reviewed the proposal on the remunerations of directors and senior officers, etc. | All proposals are reviewed and passed | None |
| July 11, 2021 | Reviewed the proposal on the remunerations of directors, etc. | All proposals are reviewed and passed | None |
| August 3, 2021 | Reviewed the proposal on the remunerations of senior officers, etc. | All proposals are reviewed and passed | None |
| September 27, 2021 | Reviewed the proposal on the 2021 Second Restricted Share Incentive Plan, etc. | All proposals are reviewed and passed | None |
| October 19, 2021 | Reviewed the proposal on discarding equity incentives, etc. | All proposals are reviewed and passed | None |
| December 31, 2021 | Reviewed the proposal on the remunerations of senior officers, etc. | All proposals are reviewed and passed | None |
(5).The Strategy Committee held 2 meetings during the reporting period
| Date of meeting | Content of meeting | Major opinions and suggestions | Performance of other duties |
| February 6, 2021 | Reviewed the proposal on issuing additional shares by subsidiaries, etc. | All proposals are reviewed and passed | None |
| March 23, 2021 | Reviewed the proposal on external investment by subsidiaries, etc. | All proposals are reviewed and passed | None |
(6).Specific description of objections
□ Applicable √ N/A
X. Risks of the Company identified by the Board of Supervisors
□ Applicable √ N/A
The Board of Supervisors raised no objections with respect to matters under supervision during thereporting period.
XI. Employees of the parent company and major subsidiaries as of the end of the reporting period(I) Employees
| Number of active employees of the parent company | 1,143 |
| Number of active employees of major subsidiaries | 422 |
| Total number of active employees | 1,565 |
| Number of retired employees for whom the parent company and major subsidiaries need to pay certain expenses | 0 |
| Profession | |
| Category | Number of employees |
| Production staff | 712 |
| Sales staff | 204 |
| Technology staff | 456 |
| Financial staff | 41 |
| Management staff and administrative staff | 152 |
| Total | 1,565 |
| Education | |
| Level of education | Number |
| Master and above | 184 |
| Undergraduate | 628 |
| College or below | 753 |
| Total | 1,565 |
(II) Compensation policy
√ Applicable □ N/A
The Company has designed a comprehensive remuneration system based on posts, competence, andperformance according to internationally universal remuneration system designing ideas and approacheswith reference to the strategic objectives, talent strategy, market competition, and other factors, of theCompany.The Company has always advocated joint innovation, sharing, and result-orientation, andcontinuously optimizes its incentive policies to gradually implement differentiated incentives for differentbusinesses and groups, hence motivating employees to make sustainable efforts focusing on the businessand customer needs to create value for customers; meanwhile, the Company enhances the managementover qualifications to improve employees’ professional competence and contributions for performance toenhance the sense of gain by employees along with the development of the Company; the Company caresabout employees by providing comprehensive benefits, hence building a better working and livingenvironment for employees.
(III) Training programs
√ Applicable □ N/A
The Company achieved outstanding achievements in the development of training and learningproducts in recent years. The Appotronics “R&D Management Training Camp” in 2021, which
participated for the first time in the 6
thLearning Design Competition conducted by China Society forTalent Development (CSTD) won the silver award and the most popularity award, continuously assists inthe talent building of the Company by providing high-quality “resources” to effectively support the sounddevelopment of the Company.In 2021, Appotronics’ learning system operated smoothly by integrating a series of company-leveltraining programs, center-level general capability training, and department-level professional capabilitytraining, hence effectively support both the organizations and individuals to make improvement andachieve performance objectives. We achieved the score of 9 out of 10 in the overall employee satisfactionfor training. We organized 574 training sessions lasting for a total of nearly 12,000 hours involving nearly5,500 participants this year. 90% trainees responded that the learning courses they participated are veryhelpful for improving their personal performance; the trainees stated that 70-80% knowledge and contentare effectively transferred and put into practice, which meet their needs both for personal competence ofemployees and the competence improvement of the organizations.In 2021, the Company continued the efforts for building the lecturer system. Nearly 300 internallecturers went to the stage, including 29 persons participating in the procedure of internal training lecturerreview and got promoted to intermediate lecturers. Every one worked actively to share the courses withintheir departments or crossing teams. The system of internal lecturers provides a stage for backboneemployees to share their knowledge and experience, and helps to cultivate the team atmosphere of sharingwith and learning from each other.2022 will be a new stage for us to improve our training system - with the core objective of improvingthe organization performance and product development intended for solving problems, we will empowerkey personnel with capabilities to solve actual problems and develop various professional knowledge/skillcourses for backbone elites in various fields. By the wide use of a digital platform, we may effectivelyoperate the knowledge assets of Appotronics by explicitly revealing implicit knowledge in a centralizedmanner, so as to achieve technology sharing and exchange more effectively, promote technologicalinnovation and transformation, build a learning organization, and assist in talent training and development,hence assisting the leap-forward development of the Company by talent reservation.
(IV) Outsourced workers
√ Applicable □ N/A
| Total man-hours of outsourced workers | 312,944.50 hours |
| Total remunerations paid to outsourced workers | RMB 7,321,162.63 |
XII. Proposals for profit distribution and capitalization of the capital reserve(I) Establishment, implementation or adjustment of the cash dividend policy
√ Applicable □ N/A
1. Cash dividend policy
Pursuant to our Articles of Association and the Statement of Appotronics Corporation LimitedRegarding the Initial Public Offering of RMB-denominated Ordinary Shares (A-shares) and the Plan forDistribution of Dividends to Shareholders within Three Years Following the Listing on the STAR Market,
we will focus on long-term and sustainable development, and establish a clear profit distribution policytaking into consideration our strategic development plan, actual business situation, development objectives,future profitability, status of cash flows, shareholder return, cost of social capital, external financingenvironment and other relevant factors, and the balance between the reasonable returns on investment forshareholders and our sustainable development, to ensure the consistency and stability of the profitdistribution policy and ensure that we are able to operate continuously and healthily in the long run.Subject to the satisfaction of the conditions for distributing cash dividends, we will distribute not lessthan 10% of the distributable profit made in each year in cash.The Board of Directors will adopt the following differential cash dividend policy according to theprocedures set forth in our Articles of Association, giving comprehensive consideration to thecharacteristics of the industry in which we operate, our development stage, business model and earnings,material capital expenditure arrangements and other relevant factors:
(1) If the Company is at the mature stage and does not have any material capital expenditurearrangement, at least 80% of the distributable profit will be distributed in cash;
(2) If the Company is at the mature stage and has certain material capital expenditure arrangements,at least 40% of the distributable profit will be distributed in cash; or
(3) If the Company is at the growth stage and has certain material capital expenditure arrangements,at least 20% of the distributable profit will be distributed in cash.
If it is hard to determine the development stage but there are certain material capital expenditurearrangements, the policy set forth above may apply.
We will formulate or adjust the shareholder returns plan subject to the profit distribution policy setforth above, according to our actual situations and the opinions of the shareholders (in particular, theminority shareholders) and the independent directors.
2. Preliminary plan on profit distribution for 2021
According to our 2021 consolidated financial statements as audited by Pan-China Certified PublicAccountants (Special General Partnership), Appotronics Corporation Limited (hereinafter referred to asthe Company) realized the net profit of RMB 221,534,817.14 in the consolidated financial statements for2021, of which the net profit attributable to owners of the parent company is RMB 233,364,344.09, andthe distributable profit of the parent company is RMB 453,996,135.72.
In accordance with the provision of the Notice of China Securities Regulatory Commission onFurther Implementing Cash Dividend Distribution by Listed Companies, the Guidelines of Shanghai StockExchange on Cash Dividend Distribution by Listed Companies, Regulatory Guidelines for ListedCompanies No. 3 - Cash Dividend Distribution by Listed Companies, and the Articles of Association, inconsideration of the current overall operation and development stage, the Company proposes to distributethe cash dividend of RMB 1.05 (tax-inclusive) per 10 shares to all shareholders on the basis of the totalshares on the record date of interest distribution for 2021, deducted by shares in the special securitiesaccount for repurchase by the Company. As of April 25, 2022, the Company has a total of 452,756,901shares and 0 shares in the special securities account for repurchase, leading to the total cash dividend of
RMB 47,539,474.61 (tax-inclusive). The cash dividends proposed by the Company for this year accountfor 20.37% of the net profits attributable to the shareholders of the listed company in the currentconsolidated financial statements of the Company. No capitalization of the capital reserve or bonus shareswill be made or distributed in the profit distribution.In the event of any change in the total shares of the Company after deducting the shares in the specialsecurities account for repurchase by the Company due to relevant events prior to the record date of interestdistribution, the Company intends to keep the total amount of distribution unchanged whilecorrespondingly change the distribution proportion for each share. In the event of changes in the totalshares, an announcement will be separately released to disclose the specific adjustment.Reasons for distribution of cash dividends lower than 30% of the distributable profit: Being in thegrowth stage, the Company needs a large amount of funds. We plan to use the undistributed profit tosatisfy the working capital requirements in our R&D and marketing activities and day-to-day management,and support the implementation of our medium-to-long term development strategy and continuous andhealthy development.
The profit distribution proposal for the year of 2021 has been approved at the 11
th
meeting of thesecond Board of Directors and the 10
thmeeting of the second Board of Supervisors of the Company. Theindependent directors of the Company have reviewed the preliminary plan on profit distribution, expressedtheir independent opinions on and given explicit consent to the proposal. The preliminary plan for profitdistribution is still subject to approval at the general meeting of shareholders of the Company.
3. Implementation of the policy on cash dividend distribution
During the reporting period, the Company has strictly complied with the dividend principles andpolicies. Our dividend distribution criteria and ratio are clear, and the relevant decision-making proceduresand mechanism comply with the applicable regulations. Our independent directors have duly performedtheir duties in the review of the preliminary plan on profit distribution by the Board of Directors, to ensurethat the legitimate rights and interests of the minority shareholders are fully protected.
(II) Special explanation about the cash dividend policy
√ Applicable □ N/A
| Whether the policy is in compliance with the provisions of the Articles of Association or the requirements of resolutions passed at the general meeting | √ Yes □ No |
| Are the distribution standards and ratios specific and clear | √ Yes □ No |
| Are the relevant decision-making procedure and mechanism complete | √ Yes □ No |
| Whether independent directors perform their duties and roles | √ Yes □ No |
| Whether small- and medium-sized shareholders have sufficient opportunities to express their opinions and requests, and are their legitimate rights and interests under sufficient protection | √ Yes □ No |
(III) If the Company made a profit in the reporting period and there’s profit distributable by the
parent company to the shareholders, but the Company does not propose to distribute profits in
cash, the Company shall explain the reason in detail and use of the undistributed profit.
□ Applicable √ N/A
XIII. Share incentive plan, employee stock ownership plan and other employee incentive measuresof the Company and their effect(I) Overview of share incentives
√ Applicable □ N/A
1.Share incentive plan during the reporting period
In RMB
| Name of plan | Type of incentive | Number of target shares | Proportion of target shares (%) | Number of grantees | Proportion of grantees (%) | Price of target shares granted |
| 2019 Restricted Share Incentive Plan | Type II restricted shares | 5,500,000 | 1.21 | 206 | 17.61 | 17.37 |
| 2021 Restricted Share Incentive Plan | Type II restricted shares | 18,500,000 | 4.09 | 224 | 19.15 | 17.445; 18.445; 20.945 |
| 2021 Second Restricted Share Incentive Plan | Type II restricted shares | 10,500,000 | 2.32 | 55 | 4.70 | 20.00; 23.00 |
Note: (1) The proportion of grantees is calculated with the total number of employees of the Company asof December 31, 2020 described in the 2020 Annual Report as the denominator;
(2) The price at which the target shares are granted under the equity incentive plan above has been adjustedaccording to the implementation of past profit distributions.
2.Implementation progress of the share incentive during the reporting period
√ Applicable □ N/A
1. On March 26, 2021, the Company held the 30
th meeting of the first Board of Directors and the 17
th
meeting of the first Board of Supervisors, which reviewed and passed the Proposal on the “2021Restricted Share Incentive Plan (Draft)” and Summary Thereof and the Proposal on the ManagementMeasures for the Appraisal of the “2021 Restrict Share Incentive Plan”.The incentive plan grants 18.5000 million restricted shares, accounting for 4.09% of the total amountshare capital 452.7569 million shares of the Company at the time of releasing the draft of the incentiveplan, including 17.1000 million shares granted for the first time, accounting for 3.78% of the total sharecapital of 452.7569 million shares of the Company as of the announcement date of the incentive plan, and
1.4000 million shares reserved, account for 0.31% of the total share capital of 452.7569 million shares ofthe Company as of the announcement date of the incentive plan. There are a total of 224 new grantees ofshare incentives under the incentive plan.
2. On April 22, 2021, the Company held the 31
st
meeting of the first Board of Directors and the 18
th
meeting of the first Board of Supervisors, which reviewed and passed the Proposal on the Adjustment ofthe 2021 Restricted Share Incentive Plan and the Proposal on Initial Grant of Restricted Shares.
(1) Given that 1 grantee determined in the incentive plan left the company and 3 grantees decided notto participate in the incentive plan due to personal reasons, after the adjustment, the number of grantees
under the incentive plan is changed from 224 persons to 220 persons, while the total 18.5000 millionrestricted shares granted and 17.1000 million restricted shares granted initially shall remain unchanged.
(2) Since the conditions provided in the incentive plan for granting the restricted shares have beensatisfied, it’s determined that 17.1000 million restricted shares were granted to 220 grantees who met thegrant conditions on the grant date of April 22, 2021.
3. On September 30, 2021, the Company held the 3
rdmeeting of the second Board of Directors andthe 3
rd
meeting of the second Board of Supervisors, which reviewed and passed the Proposal on the “2021Second Restricted Share Incentive Plan (Draft)” and Summary Thereof and the Proposal on theManagement Measures for the Appraisal of the “2021 Second Restrict Share Incentive Plan”.
The 2021 Second Restricted Share Incentive Plan grants 10.5000 million restricted shares, accountingfor 2.32% of the total amount share capital 452.7569 million shares of the Company at the time of releasingthe draft of the incentive plan, including 8.4000 million shares granted for the first time, accounting for
1.86% of the total share capital of 452.7569 million shares of the Company as of the announcement dateof the incentive plan, and 2.1000 million shares reserved, account for 0.46% of the total share capital of
452.7569 million shares of the Company as of the announcement date of the incentive plan. There are atotal of 55 new grantees of share incentives under the incentive plan.
4. On October 22, 2021, the Company held the 4
thmeeting of the second Board of Directors and the
thmeeting of the second Board of Supervisors, which reviewed and passed the Proposal on DiscardingCertain Restricted Shares Granted but Not Vested.
(1) Considering that 1 grantee of share incentives in the initial grant under the 2019 Restricted ShareIncentive Plan have left the Company, and 1 grantee has become a supervisor of the Company, inaccordance with the relevant provisions of the 2019 Restricted Share Incentive Plan (Draft), such granteesare no longer qualified as grantees. Therefore, the restricted shares granted but not vested should not bevested, but should be invalidated by the Company.
(2) The 2019 Restricted Share Incentive Plan (Draft) and the Management Measures for theAppraisal of the 2019 Restricted Share Incentive Plan, specified the vesting conditions that “with theoperating income of 2018 as the basis, the growth rate of 2020 shall be no less than 50%”. According tothe audited Annual Report 2020 of the Company, the growth rate in operating income failed to reach thisindicator. As a result, the Board of Directors of the Company decided to discard the restricted shares thatcannot be vested this time.
5. On December 7, 2021, the Company held the 6
thmeeting of the second Board of Directors and the
th
meeting of the second Board of Supervisors, which reviewed and passed the Proposal on InitialGranting Restricted Shares to Grantees.
Since the conditions provided in the second restricted share incentive plan for granting the restrictedshares have been satisfied, it’s determined that 8.4000 million restricted shares were granted to 55 granteeswho met the grant conditions on the grant date of December 7, 2021.
3.Share-based payment recognized due to the share incentive during the reporting period
In RMB
| Total share-based payment recognized for the current period | 63,345,172.32 |
(II) Incentives already disclosed in the interim announcements about which no new information isavailable
√ Applicable □ N/A
| Summary | Reference |
| On March 26, 2021, the Company held the 30th meeting of the first Board of Directors and the 17th meeting of the first Board of Supervisors, which reviewed and passed the Proposal on the “2021 Restricted Share Incentive Plan (Draft)” and Summary Thereof and the Proposal on the Management Measures for the Appraisal of the “2021 Restrict Share Incentive Plan”. | For details, please refer to the relevant announcement issued on the website of Shanghai Stock Exchange (www.sse.com.cn) on March 27, 2021. |
| On April 22, 2021, the Company held the 31st meeting of the first Board of Directors and the 18th meeting of the first Board of Supervisors, which reviewed and passed the Proposal on the Adjustment of the 2021 Restricted Share Incentive Plan and the Proposal on Initial Grant of Restricted Shares. | For details, please refer to the relevant announcement issued on the website of Shanghai Stock Exchange (www.sse.com.cn) on April 24, 2021. |
| On September 30, 2021, the Company held the 3rd meeting of the second Board of Directors and the 3rd meeting of the second Board of Supervisors, which reviewed and passed the Proposal on the “2021 Second Restricted Share Incentive Plan (Draft)” and Summary Thereof and the Proposal on the Management Measures for the Appraisal of the “2021 Second Restrict Share Incentive Plan”. | For details, please refer to the relevant announcement issued on the website of Shanghai Stock Exchange (www.sse.com.cn) on October 8, 2021. |
| On October 22, 2021, the Company held the 4th meeting of the second Board of Directors and the 4th meeting of the second Board of Supervisors, which reviewed and passed the Proposal on Discarding Certain Restricted Shares Granted but Not Vested. |
For details, please refer to the relevantannouncement issued on the websiteof Shanghai Stock Exchange(www.sse.com.cn) on October 23,2021.
On December 7, 2021, the Company held the 6
thmeeting ofthe second Board of Directors and the 6
thmeeting of thesecond Board of Supervisors, which reviewed and passed theProposal on Initial Granting Restricted Shares to Grantees.For details, please refer to the relevantannouncement issued on the websiteof Shanghai Stock Exchange(www.sse.com.cn) on December 9,2021.
Other information
□ Applicable √ N/A
Employee stock ownership plan
□ Applicable √ N/A
Other incentives
□ Applicable √ N/A
(III) Share incentives granted to directors, senior officers and key technical staff during the
reporting period
1.Share options
□ Applicable √ N/A
2.Type I restricted shares
□ Applicable √ N/A
3.Type II restricted shares
√ Applicable □ N/A
Unit: Share
Note: The table above presents the granting and vesting of Type II restricted shares for directors,supervisors, senior officers, and key technical staff existing on the disclosure date of this Report, andthe share price at which the restricted shares are granted has not been adjusted according to the plan forprofit distribution implemented in the past.(IV) Performance assessment mechanism for senior officers and the establishment and
implementation of incentive mechanism for senior officers during the reporting period
√ Applicable □ N/A
The remunerations of the senior officers comprise salaries and bonuses. The Compensation and
Performance Assessment Committee of the Board of Directors is responsible for formulating and
implementing the compensation proposal and performance assessment proposal for senior officers. The
compensation proposal for senior officers has been reviewed in accordance with the AOA and other
| Name | Title | Number of restricted shares already granted as at the beginning of the reporting period | Number of restricted shares granted during the reporting period | Exercise price of the restricted shares granted (RMB per share) | Number of restricted shares that could be vested in the reporting period | Number of restricted shares actually vested in the reporting period | Number of restricted shares already granted as of the end of the reporting period | Market price as of the end of the reporting period (RMB per share) |
| LI Yi | Chairman, General Manager, key technical staff | 0 | 3,500,000 | 21.00 | 0 | 0 | 3,500,000 | 34.35 |
| WANG Yingxia | Director, Financial Director | 20,560 | 350,000 | 18.50; 23.00 | 0 | 0 | 370,560 | 34.35 |
| YAN Li | Board Secretary | 70,000 | 530,000 | 18.50; 23.00 | 0 | 0 | 600,000 | 34.35 |
| HU Fei | Key technical staff | 40,000 | 350,000 | 18.50 | 0 | 0 | 390,000 | 34.35 |
| YU Xin | Key technical staff | 20,000 | 500,000 | 18.50; 20.00 | 0 | 0 | 520,000 | 34.35 |
| WANG Lin | Key technical staff | 20,000 | 400,000 | 18.50; 20.00 | 0 | 0 | 420,000 | 34.35 |
| WANG Zeqin | Key technical staff | 22,000 | 400,000 | 18.50; 20.00 | 0 | 0 | 422,000 | 34.35 |
| GUO Zuqiang | Key technical staff | 16,000 | 400,000 | 18.50; 20.00 | 0 | 0 | 416,000 | 34.35 |
| Total | / | 208,560 | 6,430,000 | / | 0 | 0 | 6,638,560 | / |
relevant corporate governance policies. During the reporting period, the remunerations paid to the seniorofficers of the Company have been reviewed and approved by the Board of Directors. During the reportingperiod, the senior officers have been assiduous in their duties in strict accordance with the requirementsof the Company Law and other applicable laws and regulations and the AOA, and continuously enhancedinternal management of the Company under the guidance of the Board of Directors, to lay a solidfoundation for future development of the Company.
XIV. Measures and implementation for building internal control regulations during thereporting period
√ Applicable □ N/A
For details, refer to the 2021 Audit Report on Internal Controls of Appotronics Corporation Limiteddisclosed on the website of Shanghai Stock Exchange on April 27, 2022.
Explanation about material loopholes in internal controls during the reporting period
□ Applicable √ N/A
XV. Management and control over subsidiaries during the reporting period
√ Applicable □ N/A
The Company has formulated the Internal Control Management Regulations and the Regulations forInternal Reporting of Significant Information in accordance with relevant provisions of the Company Law,the Securities Law, and the AOA. During the reporting period, the Company managed subsidiaries inaspects of compliant operation, personnel management, operation management, financial management,etc. At present, all subsidiaries are in normal operation under proper management and control of theCompany over controlled subsidiaries.
XVI. Explanation about the auditor’s report on internal controls
√ Applicable □ N/A
For details, refer to the 2021 Audit Report on Internal Controls of Appotronics Corporation Limiteddisclosed on the website of Shanghai Stock Exchange on April 27, 2022.Whether an auditor’s report on internal controls has been disclosed: YesOpinions in the audit report on internal controls: Standard unqualified opinion
XVII. Rectification of issues detected during the self-inspection of governance of the listed
company
Issue existing and reasons thereof: After sorting out the attendance of the general meeting by directors,supervisors, and senior officers, it’s detected that some senior officers were absent from the generalmeeting due to business or other reasons.
Specific rectification: Upon detection of such an issue, the Company has required relevant seniorofficers to submit a supplementary Request for Absence. In order to further improve the procedures forthe attendance of directors, supervisors, and senior officers as voting or non-voting participants, theCompany will send an attendance notice to directors, supervisors, and senior officers prior to each generalmeeting; any director, supervisor, or senior officer who cannot attend the general meeting due to businessor other reasons shall submit a statement on request for absence signed in person, which request for
absence shall be retained by the office of the Board of Directors. The Company implemented suchrectification measures in May 2021, and the directors, supervisors, and senior officers supported andcooperated in the rectification; the rectification measures were properly implemented in subsequentgeneral meetings of the Company.
XVIII. Others
□ Applicable √ N/A
Section V Environment, Social Responsibility, and Other Corporate
Governance
I. Statement of the Board of Directors on ESGThe Company attaches great importance to ESG matters. Since its listing in 2019, the Company hasreleased social responsibility reports for two consecutive years, and incorporated the social value as acorporate citizen into its daily operating activities to build a model for the laser display industry; moreover,the social responsibility report has been upgraded to the more comprehensive strategic management ofenvironment, society, and corporate governance during the reporting period.
In order to effectively implement ESG efforts, the Company has gradually established and improvedan integrated ESG management, communication, and coordination mechanism. The Chairman, as the firstresponsible person, is responsible for reviewing and deciding the strategy and objective of the Company’sESG efforts; and the functional departments, business departments, subsidiaries, and branches areresponsible for making corresponding working objectives and plans to implement the Company’s strategy,and to keep communication with internal and external stakeholders. This results in an approach featuringreview and decision-making, coordination and supervision, and step-by-step implementation.
(I) Striving to achieve the carbon peaking and carbon neutrality goals by green technologies
The Company created the ALPD? phosphor laser display technology in 2007. Compared withconventional display technologies, this technology has advantages of high brightness, wide color gamut,high contrast, high reliability, high light effect, energy conservation, and environment friendliness. Wedevelop green products by making use of such green technology to achieve technological industrialization.
As of December 31, 2021, the Company has achieved over 2.5 installations of the laser projectionsolution in China, creating “win-win” solutions intended for both economic benefits and environmentprotection benefits for customer. According to incomplete statistics, ALPD? laser projection solutionsran 188 million hours in total, saving a total of 338 million kWh power consumption, and reducing about148 million cubic meters of carbon dioxide emissions arising from power generation, which establishedan industry model for energy conservation and emission reduction to achieve the “carbon neutrality” goals.
Moreover, given the great importance attached to environment protection management, we have noenvironmental violations in 2021, with the total emissions of waste gas and wastewater not exceeding thestandards. We implement the green operation philosophy by continuously improving production processesto strive for energy conservation and consumption reduction; improve the rate of resource recycling andutilization by “trade-in” practices; and advocate thrift and green office among employees.
(II) Fulfilling responsibilities actively to serve society
The Company attaches great importance to its responsibilities as a corporate citizen. Holdingtechnological innovation as the sole of the Company’s development, the Company continuously promotestechnological innovation and transformation of achievements by laying out the industrial chain around theinnovation chain. During the reporting period, the Company released new applications of laser display inaviation, vehicle display, and other fields, and entered into cooperation with leading enterprises like Airbus,
Huawei, etc. to fulfill its responsibilities in striving for breakthrough for the industry as the leader in thelaser display industry.
With emphasis on the protection of intellectual property rights, the Company has won the GoldAward of Guangdong Patent Award for four consecutive years to widen the patent moat.The Company actively advocates and always implements the value concept of being “people-oriented”and insists on equal opportunity for employment. We establish a series of formal and informalcommunication methods such as the trade union employee representative conference, quarterly employeecommunication conference, democratic life meeting, new employee colloquium, performance counselingand evaluation communication, so as to actively encourage our employees to participate in corporatemanagement; moreover, the Company launched two restricted share incentive plans during the reportingperiod. We establish a learning and exchange platform for employees to cultivate all-round talents requiredby our business, thus achieving a win-win result of corporate development and personal development.With adherence to engage in social welfare deeply, the Company continuously promotes thepopularization of scientific knowledge. During the reporting period, the Company supported Shenzhengovernment for the urban strategic construction of a “child-friendly city”, receiving 5 batches of 97 visitorsfrom the Children’s Public Welfare Visit Project of the Children’s Science Alliance in Nanshan District,Shenzhen. We actively convey love and warmth to the society, and make contributions to theestablishment of adolescent creative space which acts as a local service site for the young in Qianxi City,Guizhou Province, as to help revitalize rural talents. We strive to realize the integration of corporatebusiness value and social value to gives back to the society with practical actions.(III) Improving governance for long-lasting operationThe Company has established a diversified governance structure to fully mobilize the resources ofall parties for coordination and continuously raise the level of corporate governance. The Board ofDirectors has four special committees established under it, namely, the Strategy Committee, theCompensation and Performance Assessment Committee, the Nomination Committee, and the AuditCommittee, which are responsible for monitoring specific tasks of the Company and assisting the Boardof Directors in performing its duties, hence ensuring diligent and efficient decision-making of theCompany. The Company establishes good investor relations by disclosing corporate information in a true,accurate, complete and timely manner, and establishing a sound mechanism for the protection ofshareholders’ rights and interests. We insist on thinking about worst-case scenarios and strengthening red-line awareness, and incorporate risk prevention and control into the whole process of enterprise operationto safeguard the long-lasting operation of the Company.(IV) Striving for innovation in fulfilling responsibilities for safety managementIn 2021, the Company continued to improve the safety management mechanism and promote thesafety production system construction. We set up a safety management committee with a safetymanagement committee office, and arrange the Company’s R&D center and supply chain center to beresponsible for the specific implementation. We promote the Company’s headquarters platform and R&Dassessment department to sign the safety responsibility letter with the signing rate reaching 100%. At the
same time, we have completed the safety hazards investigation and remediation and the preparation ofemergency plans for production safety accidents, and obtained the “Safety Production StandardizationCertificate” issued by the Safety Production Association of Nanshan District, Shenzhen in April 2021,which promoted the Company’s safety production standardization.The Company has disclosed its 2021 Environmental, Social and Governance (ESG) Report on thewebsite of Shanghai Stock Exchange (www.sse.com.cn) on April 27, 2022. For details, please refer tosuch report.
II. Environment(I) Whether the Company is a major polluter identified by the environmental protection authority
□ Yes √ No
The Company mainly engages in the research, development, production and sales of laser displaycore devices and complete machines and application of laser display technology to different scenariosbased on ALPD? laser display technology and architecture, and provides laser cinema projection services.During the reporting period, the Company has no production or operating entity included in the list ofmajor polluters identified by the environmental protection authority.(II) Administrative penalties imposed due to environmental issues during the reporting period
During the reporting period, the Company experienced no administrative penalty imposed due toenvironmental issues.(III) Information of resource and energy consumption and emissions
√ Applicable □ N/A
The Company mainly engages in the research, production, and sales of core devices and terminalproducts for laser display, which is a low energy consumption industry. During its production and dailyoperation, the Company mainly consumes electricity, water, and other resources, and mainly emits wastegas and waste water. During the reporting period, the Company has no environmental violations with thetotal emissions of waste gas and wastewater not exceeding the standards. Moreover, the laser displaytechnology developed by the Company is a green technology, which can help other enterprises in energyconservation and emission reduction.
1. Green-house gas emission
√ Applicable □ N/A
The Company does not directly emit carbon dioxide, methane, or other green-house gases in its dailyproduction activities. However, the Company consumes electricity and other resources, which are in thescope of equivalent emission of green-house gas. The Company strives to reduce carbon emission byinnovating production technologies, advocating green office, etc.
2. Energy and resource consumption
√ Applicable □ N/A
Focused on innovative production technology, the Company has achieved low-carbon andenvironmental-friendly production by improving production efficiency and process. In 2021, for theCompany’s Shenzhen Bao’an Plant, the average water consumption and the average electricityconsumption per product decreased by 33.33% and 28.61% on a year-on-year basis respectively, and theworking hours for manufacturing a product decreased by 18%.
During the reporting period, given the great increase in office staff of the Company and the lease ofan additional floor of office space, the Company emphasizes the improvement of utilization efficiency inthe consumption of water, electricity, and other major resources to minimize energy consumption. Thespecific environmental performance is as follows:
| Indicator | Unit | 2020 | 2021 | Year-on-year decrease |
| Office water consumption per capita | Ton | 8.20 | 8.10 | 1.17% |
| Office electricity consumption per capita | kWh | 1066.35 | 963.24 | 9.67% |
3. Emission of wastes and pollutants
√ Applicable □ N/A
In 2021, the Company has no environmental violations, with the total emissions of waste gas andwastewater not exceeding the standards, and all discharge indicators achieving 100% compliance rate.Management regulations of the Company for environment protection
√ Applicable □ N/A
In strict compliance with requirements in the Environmental Protection Law of the People’s Republicof China and other laws and regulations, Approtronics strengthens environmental management in multipledimensions, such as organization, supervision and assessment, statistical accounting of indicators,education and training, hidden danger investigation and control, and accident emergency response plans,as to minimize the impact of our operations on the environment.(IV) Measures taken to reduce carbon emissions during the reporting period and their effect
√ Applicable □ N/A
During the reporting period, the Company established an online work platform system, through whichwe cooperated with I-Yin Technology to conduct electronic printing sheet for contract seal, so that weeliminated the printing link and saved paper costs effectively. Meanwhile, through the SaaS cloud serviceoperation model in the Company’s ERP/CRM system, we achieved an 11% reduction in overall energysaving and emission reduction for the internal data center in terms of server energy consumption, storageservice energy consumption, air conditioning energy and emission, and network energy consumption.(V) New technologies, new products, and new services for carbon emission reduction
√ Applicable □ N/A
The Company has always attached great importance to the research and development ofenvironmental-friendly products, and is committed to providing customers with product solutions withenvironmental benefits. As of December 31, 2021, more than 25,000 sets of ALPD? laser projectionsolutions of CINEAPPO, a subsidiary of the Company, have been installed in total. The ALPD? laserprojection solutions ran 188 million hours in total, saving a total of 338 million kWh power consumption,and reducing about 148 million cubic meters of carbon dioxide emissions arising from power generation.
(VI) Relevant information conducive to protecting ecology, preventing pollution and fulfillingenvironmental responsibilities
√ Applicable □ N/A
The Company attaches importance to improving the efficiency of resource use and ensures theresources are used efficiently, so as to reduce the effect of production and operation to environment.During the reporting period, , a controlled subsidiary of the Company, launched the “trade-in”function through its mini program, which may help improve the overall energy efficiency of homeappliances, reduce environmental pollution, and use recyclable steel, non-ferrous metals, plastics andrubber in waste home appliances fully and effectively, thus promoting the development of recyclingeconomy. This measure is conducive to improving the efficiency of energy resources utilization, reducingenvironmental pollution, and promoting energy conservation, emission reduction and recycling economydevelopment.III. Performance of social responsibilities(I) Social contributions of the main business and industry key indicators
The Company mainly engages in the research, development, production and sales of laser displaycore devices and complete machines based on ALPD? laser display technology and architecture. TheCompany created the ALPD? phosphor laser display technology in 2007, which can emit high-qualityhigh-brightness light with a small volume. This technology is considered to be a core technology for next-generation mobile display technologies represented by AR, and therefore has great market potential. Fromthe viewpoint of technology leadership, this technology has become the mainstream technology in thefield of laser display, and as the underlying key architecture technology, has been cited more than 600times by industry giants such as Philips of the Netherlands, Osram of Germany, Epson of Japan, and NECetc.
At the national level, the laser display industry has always been one of the focuses of the state, fromthe 863 Program (National High-tech R&D Program) which included laser display in the 1980s, to theDevelopment Plan for National Strategic Emerging Industry in the 12
thFive-year Plan, to the New Displayand Strategic Electronic Materials of the Ministry of Science and Technology and other key projects inthe 14thFive-year Plan listing laser display, new display, and the third-generation in 2021, and the NationalKey Research and Development Programs of the Ministry of Science and Technology containing laserdisplay for chips in 2021. The ALPD? laser display technology of the Company not only broke themonopoly of foreign enterprises, but also maintained the leading position of the Chinese technologythroughout the world.
As a leader in the laser display industry, the Company took the lead in undertaking the “RGB LaserDisplay Machine Product Model Line” supported by the National Key R&D Program of China. On thebasis of the ALPD? laser display technology, at the end of 2019, the laser phosphor digital cinemaprojector developed by the Company for the first time in China and certified according to the DCI standard- C5 was put into mass production, introducing the technology from China for the digital cinema industry.
The Company fully utilized its leading advantages to integrate the industry chain from the upstreamto the downstream, and provides core devices or complete equipment to XGIMI, Dangbei, Anker, VAVA,
and many other enterprises to promote the development of the industry. As the only Chinese brand in theLaser Illuminated Projector Association (LIPA), the Company speaks for Chinese technologies. Moreover,the Company took lead in formulating multiple industrial standards for laser TVs, smart projection, etc.to promote the formulation and implementation of national standards for laser safety.
(II) Types of and contributions for public charity activities
| Type | Quantity | Remark |
| Rural revitalization | / | None |
| Where: Funds (RMB 0’000) | / | None |
| Value of materials (RMB 0’000) | 8 | Donated laser display devices to make contributions to the establishment of adolescent creative space which acts as a local service site for the young in Qianxi City, Guizhou Province, as to help revitalize rural talents |
1. Specific information about public charity activities
√ Applicable □ N/A
With adherence to engage in social welfare deeply, the Company continues to promote thepopularization of scientific knowledge, pay attention to social disadvantaged groups, and actively conveyslove and warmth to the society, striving to realize the integration of corporate business value and socialvalue to gives back to the society with practical actions.During the reporting period, the Company supported Shenzhen government for the urban strategicconstruction of a “child-friendly city”, receiving 5 batches of 97 visitors from the Children’s PublicWelfare Visit Project of the Children’s Science Alliance in Nanshan District, Shenzhen. The Companyvigorously promote the traditional virtues of the Chinese nation, actively advocate all employees to offercare, help and condolence to the elderly, the disabled, the left-behind children and other special groups,so as to convey the public welfare concepts and actions of Appotronics.
2. Information on consolidation and expansion of the results of poverty alleviation, rural
revitalization and other specific work
√ Applicable □ N/A
To actively respond to the national policy of “culture-to-the countryside activity” and support therural film projections, the Company develops two models of laser light source cinema projectionequipment, which can realize mobile movie screening or fixed screening in vast rural areas, and helps therevitalization of rural culture using advanced laser display technology.
At the same time, the Company actively supports and guides young people to start their ownbusinesses and create employment appropriately by virtue of its own industry resources and advantages,and makes contributions to the establishment of adolescent creative space which acts as a local servicesite for the young in Qianxi City, Guizhou Province, as to help revitalize rural talents.(III) Protection of the rights and interests of shareholders and creditors
During the reporting period, the Company continuously improved its corporate governance structurefocusing on regulated operation of the Company in accordance with the requirements of laws andregulations, including the Company Law and the Securities Law. The Company has established a
diversified governance structure to fully mobilize the resources of all parties for coordination andcontinuously raise the level of corporate governance.The Board of Directors of the Company is mainly responsible for formulating overall strategies andpolicies of the group, setting performance and management goals, assessing the performance of thebusinesses, and supervising the performance of the management. The Board of Directors has four specialcommittees established under it, namely, the Strategy Committee, the Compensation and PerformanceAssessment Committee, the Nomination Committee, and the Audit Committee, which are responsible formonitoring specific tasks of the Company and assisting the Board of Directors in performing its duties,hence ensuring diligent and efficient decision-making of the Company.(IV) Protection of the rights and interests of employeesWe strictly abide by the Labor Law of the People’s Republic of China, the Contract Law of thePeople’s Republic of China and other laws and regulations, eliminate the employment of child labor andother forced labor, and combat harassment and abuse. With great attention to the employment of personswith disabilities, we actively create jobs to promote the employment of the disabled, and strive to build adiverse and inclusive talent team. With adherence to equal employment, we treat employees fairlyregardless of nationalities, races, religions, genders and ages, and create a diverse, inclusive, fair andreasonable work environment for employees. We insist on equal pay for equal work and executeemployment contracts with employees in accordance with the law.During the reporting period, despite complicated impact from the COVID-19 epidemic, we activelyresponded to the national deployment of “stabilizing employment”. The total number of our employeesreached 1,565, up nearly 34% over that of the previous year.
We attach great importance to the demands and opinions of employees, and continue to improve thechannels and mechanisms for communication. At the company level, we establish a series of formal andinformal communication methods such as trade union employee representative conference, quarterlyemployee communication conference, democratic life meeting, new employee colloquium, performancecounseling and evaluation communication, so as to actively encourage our employees to participate incorporate management, and safeguard employees’ rights to information and participation.The Company places talent development at a strategic height. We evaluate and select talents by usingscientific methods, cultivate talents in all aspects and at multiple levels, fully tap the potential of employees,improve the professional ability and leadership of employees at all levels, and build career developmentchannels for employees, so as to promote the continuous growth of employees. During the reporting period,the Company launched two restricted share incentive plans.
With adherence to the employee-oriented concept, the Company cares for the work and life of everyemployee, pays attention to solving the problems that employees care about, and improves the workingenvironment for employees. We actively carry out entertainment and leisure activities according to theemployees’ needs, and provide irregular condolences to employees in financial difficulties, so thatemployees can truly feel the warmth of “home”. We care about the health and safety of employees, and
take all measures to prevent occupational hazards, striving to create a safe and comfortable workingenvironment for employees.
Employee share ownership
| Number of employees owning shares (persons) | 228 |
| Ratio of employees owning shares to the total number of employees (%) | 14.57 |
| Number of shares owned by employees (0’000 shares) | 2,536.45 |
| Ratio of shares owned by employees to the total share capital (%) | 5.6 |
(V) Protection of the rights and interests of suppliers, customers and consumersThe Company attaches great importance to cooperation with suppliers and strategic partners. Weactively implement clean and responsible procurement, choose to purchase environmentally friendly rawmaterials, actively deploy core areas and links of the industrial chain and deem them as an importantcomponent of the Company’s production and operation. By strengthening the management of suppliers’corporate responsibility and standardizing procurement transactions, we have improved sustainablecompetitiveness of the supply chain. We are working together with our suppliers to develop and build aresponsible value chain.The Company focuses on the authenticity and compliance of the Company’s products and services,we strengthen comprehensive product training for publicity channel personnel, introduce productparameters and services in a true and objective manner, and specify in the contract that after-sales andsimilar terms are restricted and protected by laws and regulations, so as to ensure that the product andservice information provided to the market and society is compliant, truthful and transparent.
(VI) Product safetyIn order to provide the public with safer and more assured products with better quality, the Companyhas established a DQA laboratory with a safety testing laboratory in strict accordance with relevantinternational standards, which is fully responsible for product design quality assurance and safetyassurance. The design quality and safety testing assurance capabilities of the DQA laboratory have beenrecognized by various world authoritative certification and testing organizations such as CNAS, UL, TUV,ITS, etc., demonstrating positive actions and effective practices made by Appotronics in building a safer,more reliable world under sustainable development. At the same time, Appotronics attaches greatimportance to the safe use of products by customers, and actively popularize product function and riskknowledge to domestic and foreign customers by carrying out knowledge lectures, special education andtraining, and other activities, so as to eliminate safety risks and raise product service levels.(VII) Other information about the performance of social responsibilities
√ Applicable □ N/A
As an industry leader in the laser display industry, the Company actively carries out cross-bordercooperation to build a wide range of cooperation platforms, and strives to cooperate sincerely withimportant cities, key enterprises, scientific research institutions, and financial institutions for mutual
benefits and common development, so as to support for the sustainable development of economy andsociety.For cooperation with city governments, during the reporting period, the Company cooperated withChongqing, Chengdu, Hangzhou, Xining and other cities to jointly explore more excellent light andshadow effects, energize and invigorate economic development of cities, and help create characteristicbusiness cards.For cooperation with universities, the Company funded the Photoelectric Design Competition ofShenzhen University in order to support college students to explore and research photoelectric science;moreover, the Company worked with cooperative universities and research institutes to further promotethe integration of production, education, research and application.
For cooperation with other enterprises, the Company reached a strategic cooperation with Airbus,and demonstrated laser product prototypes that can be applied in the field of civil aviation display inZhuhai Airshow for the first time. Giving full play to respective professional advantages, we have exploreda more efficient, pragmatic and innovative cooperation model with relevant industry leading enterprises.IV. Other corporate governance
(I) Party building
√ Applicable □ N/A
The Party organization of the Company was established in September 2016, and was upgraded intoa Party Committee in September 2020. As of the end of the reporting period, the Party Committee has 4Party branches and 63 Party members.
In recent years, the Party Committee of the Company emphasized “three combinations”, that is, thecombination of Party building efforts with the operating goals of the Company, with the corporate culturebuilding, and with the practice of social responsibilities, so as to give full play to the role of Party membersleading and setting a model and the safeguarding role of the Party organization. We insisted on the drivingforce based on innovation and substantial strength improvement by technologies, hence making ourcontributions as a private company in the independent technology development of the “Shenzhen team”,and illuminate the world with light from China.
At the beginning of 2021, the Party Committee of the Company called on employees who are Partymembers to actively practice corporate social responsibilities, and established the Appotronics VolunteerAssociation to join the Nanshan Volunteer Association for active participation in various public charityactivities. In July 2021, at the 100
thanniversary of the Communist Party of China, the Party Committee ofAppotronics won the honor of “Advanced Grass-root Party Organization of Shenzhen” as an outstandingrepresentative of innovative technology enterprises in Shenzhen.
(II) Investor relation and protection
| Type | Times | Remark |
| Convening performance briefings | 2 | The Company held two performance briefings in May 2021 and September 2021, respectively, which were presided over by the Chairman, to help investors gain an in-depth understanding of the operating performance of the Company, and respond to hot issues of concern. This leads to the 2020 Award of Outstanding Practical Case of |
| Performance Briefing granted by China Association for Public Companies. | ||
| Conduct investor relation management activities through new media | 27 | Given the feature of transforming from print media to video for the dissemination of popular information, the Company operated a video account, under which 27 videos were released. This innovative dissemination channel provides abundant information to investors and builds a comprehensive image of the listed company. |
| Column of investor relation on the official website | √ Yes □ No | https://www.appotronics.com/investor_team.html |
Specific information about investor relation management and investor protection
√ Applicable □ N/A
The Company is dedicated to establishing good investor relations by disclosing corporate informationin a true, accurate, complete and timely manner, and establishing a sound mechanism for the protection ofshareholders’ rights and interests. We actively provided suggestions and communication services withregulatory agencies, and disclosed a total of 209 announcement documents in 2021. In 2021, we organized2 performance briefing sessions, 4 online live broadcasts/Q&A activities, and more than 150 surveys andreverse roadshows, answered more than 480 calls, replied more than 70 questions on the SSE e-interactiveplatform, and held 3 public online investor reception day activities actively, so as to effectively respondto the expectations and suggestions of small and medium investors.Explanation about communication with investors by other means
√ Applicable □ N/A
The Company obtained in-depth coverage of 7 tier-1 securities companies including China Fund,Zhongtai Securities, China Merchants Securities, Guoxin Securities, etc. and released 7 in-depth researchreports. Besides, the Company obtained seven seller-side securities companies, and released 13 researchreports on the Company’s semi-annual report, third quarter report, new product release, and otherperformance-related events or material events, to help investors better understand the Company’sbusinesses.
(III) Transparency of information disclosure
√ Applicable □ N/A
In strict compliance with the provisions of the Administrative Measures for Information Disclosureby the Listed Companies and the Management Regulations of Information Disclosure of the Company, theCompany discloses relevant information in a prompt and fair manner in accordance with laws, regulations,and the AOA to practice true, accurate, and complete information disclosure, and safeguard the legitimaterights and interests of the Company, investors, creditors, and other stakeholders.(IV) Protection of intellectual property rights and information security
√ Applicable □ N/A
With great importance to intellectual property protection, the Company spares no effort to ensure thatintellectual property management is in place. In compliance with the requirements of laws and regulationssuch as the Trademark Law of the People’s Republic of China, the Patent Law of the People’s Republic ofChina, and the Anti-Unfair Competition Law of the People’s Republic of China, we have established alegal center consisting of an intellectual property department and a legal department, and formulated the
Patent Management Regulations, the Patent Application Review Measures and the TrademarkManagement Regulations, through which the intellectual property management system have beengradually established and improved to create high-value patents and widen the patent moat continuously.At the same time, with adherence to openness and cooperation attitudes, the Company steadily promotepatent rights protection and safeguard legitimate rights and interests to protect intellectual property rightsfrom infringement.
In 2021, the Company’s patents filed and granted both increased compared with that of the previousyear. As of December 31, 2021, Appotronics has been issued with 1,434 patents, and filed 774 domesticand oversea patent applications (of which 641 cases are invention applications) and 211 PCT patentapplications, resulting in a total of 2,419 patents filed or granted cumulatively all over the world.
The Company continues to establish and improve the information security system, andcomprehensively improves its capabilities on information confidentiality and data security, and oninformation leakage monitoring. In strict accordance with the Personal Information Protection Law of thePeople’s Republic of China, , a subsidiary of Appotronics, has formulated different regulatory systemsand process documents around FengOS user privacy protection such as Information (Data) ManagementProcess System of , and Information Security Management Code and Confidentiality System of , and a newversion of user privacy agreement to ensure that the user data is collected legally and compliantly. At thesame time, actively carries out training on user personal information protection to continuously improvethe awareness of information protection among employees.(V) Information about participation of institutional investors in corporate governance
√ Applicable □ N/A
During the reporting period, in one aspect, institutional investors of the Company activelyparticipated in voting at the general meetings of the Company, and fully exercised their right of information,voting right, and other shareholder’s rights provided in the Company Law, so as to enhance the supervisionover and suggestions for corporate governance of the Company. In another aspect, with full awareness ofthe Company about the continuity and importance of institutional investors in promoting the governancecapability of the Company, the Company keeps active mutual communication with institutional investorsto present information about the Company to and receive suggestions about the development of theCompany from institutional investors, assisting the management in making adjustment and decisions in afaster and more accurate manner and continuously improving corporate governance.
For example, considering the multiple applications for the Company’s technologies, an institutionalinvestor suggested the Company to break down businesses in the annual report with reference to theprospectus to keep consistency in the study of the Company. The management of the Company respondedrapidly after learning such suggestion, and resumed to present the businesses in the same manner as in theprospectus. This helped investors better understand the operating performance of the Company, and washighly praised by investors, hence effectively optimizing the governance of the Company.(VI) Other corporate governance
□ Applicable √ N/A
Section VI Significant MattersI. Fulfillment of covenants
(I) Covenants made by the actual controller, shareholders, affiliates and acquirer of the Company, the Company itself and other related parties during thereporting period or the outstanding covenants made by them in the prior periods
√ Applicable □ N/A
| Background of covenant | Covenant Type | Covenantor | Covenant Content | Validity period of covenant | Whether there’s a time limit for the fulfillment of the covenant | Whether the covenant has been strictly fulfilled on time | Reason for failure to fulfill the covenant on time (if applicable) | Action plan if failing to fulfill the covenant on time |
| Covenant relating to IPO | Restriction on the sale of shares | Covenant by the controlling shareholder regarding restriction on the sale of shares held by him, voluntary lock-up of such shares, extension of lock-up period, intention to hold and dispose of shares and other issues | Refer to IPO Prospectus | 36 months after completion of the IPO and the extended period stated below | Yes | Yes | N/A | N/A |
| Restriction on the sale of shares | Covenant by the actual controller regarding restriction on the sale of shares held by him, voluntary lock-up of such shares, extension of lock-up period, intention to hold and dispose of shares and other issues | Refer to IPO Prospectus | 36 months after completion of the IPO and the extended period stated below, and 6 months after termination of employment with the Company | Yes | Yes | N/A | N/A |
| Restriction on the sale of shares | Covenant by the concert parties of the actual controller regarding restriction on the sale of shares held by them, voluntary lock-up of such shares, extension of lock-up period, intention to hold and dispose of shares and other issues | Refer to IPO Prospectus | 36 months after completion of the IPO and the extended period stated below | Yes | Yes | N/A | N/A |
| Restriction on the sale of shares | Covenant by the directors regarding restriction on the sale of shares held by them, voluntary lock-up of such shares, extension of lock-up period, intention to hold and dispose of shares and other issues | Refer to IPO Prospectus | 12 months after completion of the IPO and the extended period stated below | Yes | Yes | N/A | N/A |
| Restriction on the sale of shares | Covenant by the supervisors regarding restriction on the sale of shares held by them, voluntary lock-up of such shares, extension of lock-up period, intention to hold and dispose of shares and other issues | Refer to IPO Prospectus | 12 months after completion of the IPO | Yes | Yes | N/A | N/A |
| Restriction on the sale of shares | Covenant by HU Fei, as a senior officer and member of key technical staff, regarding restriction on the sale of shares held by him, voluntary lock-up of such shares, extension of lock-up period, intention to hold and dispose of shares and other issues | Refer to IPO Prospectus | 12 months after completion of the IPO and the extended period stated below, and 6 months after termination of employment | Yes | Yes | N/A | N/A |
| with the Company | |||||||
| Restriction on the sale of shares | Covenant by the senior officers BO Lianming and others regarding restriction on the sale of shares held by them, voluntary lock-up of such shares, extension of lock-up period, intention to hold and dispose of shares and other issues | Refer to IPO Prospectus | 12 months after completion of the IPO and the extended period stated below | Yes | Yes | N/A | N/A |
| Restriction on the sale of shares | Covenant by the key technical staff YU Xin and others regarding restriction on the sale of shares held by them, voluntary lock-up of such shares, extension of lock-up period, intention to hold and dispose of shares and other issues | Refer to IPO Prospectus | 12 months after completion of the IPO and listing of stock and the extended period stated below | Yes | Yes | N/A | N/A |
| Restriction on the sale of shares | Covenant by the holders of more than 5% shares regarding restriction on the sale of shares held by them, voluntary lock-up of such shares, extension of lock-up period, intention to hold and dispose of shares and other issues | Refer to IPO Prospectus | 12 months after completion of the IPO and listing of stock | Yes | Yes | N/A | N/A |
| Restriction on the sale of shares | Covenant by the other shareholders regarding restriction on the sale of shares held by them, voluntary lock-up of such shares, extension of lock-up | Refer to IPO Prospectus | 12 months after completion of the IPO and listing of stock | Yes | Yes | N/A | N/A |
| period, intention to hold and dispose of shares and other issues | |||||||
| Restriction on the sale of shares | Covenant by senior officers and core employees participating in strategic allotment regarding restriction on the sale of shares held by him, voluntary lock-up of such shares, extension of lock-up period, intention to hold and dispose of shares and other issues | Refer to IPO Prospectus | At least 12 months after completion of the IPO and listing of stock | Yes | Yes | N/A | N/A |
| Others | Issuer’s plan for stabilizing the Company’s stock price and covenant regarding share repurchase measures within three years after the listing | Refer to IPO Prospectus | 36 months after completion of the IPO and listing of stock | Yes | Yes | N/A | N/A |
| Others | Controlling shareholder and the actual controller’s plan for stabilizing the Company’s stock price and covenant regarding share repurchase measures within three years after the listing | Refer to IPO Prospectus | 36 months after completion of the IPO and listing of stock | Yes | Yes | N/A | N/A |
| Others | Directors and senior officers’ plan for stabilizing the Company’s stock price and covenant regarding share repurchase measures within three years after the listing | Refer to IPO Prospectus | 36 months after completion of the IPO and listing of stock | Yes | Yes | N/A | N/A |
| Others | Issuer’s covenant regarding measures against fraud in IPO | Refer to IPO Prospectus | Permanent | No | Yes | N/A | N/A |
| Others | Controlling shareholder, actual controller and their concert parties’ covenant regarding measures against fraud in IPO | Refer to IPO Prospectus | Permanent | No | Yes | N/A | N/A |
| Others | Directors, supervisors and senior officers’ covenant regarding measures against fraud in IPO | Refer to IPO Prospectus | Permanent | No | Yes | N/A | N/A |
| Others | Issuer’s covenant regarding remedial measures for diluted earnings in the current period | Refer to IPO Prospectus | Permanent | No | Yes | N/A | N/A |
| Others | Controlling shareholder, actual controller and their concert parties’ covenant regarding remedial measures for diluted earnings in the current period | Refer to IPO Prospectus | Permanent | No | Yes | N/A | N/A |
| Others | Directors, supervisors and senior officers’ covenant regarding remedial measures for diluted earnings in the current period | Refer to IPO Prospectus | Permanent | No | Yes | N/A | N/A |
| Others | Issuer’s covenant regarding profit distribution policy | Refer to IPO Prospectus | Permanent | No | Yes | N/A | N/A |
| Others | Issuer’s covenant regarding restraint measures and liability for compensation in the event of failure to fulfill its covenants | Refer to IPO Prospectus | Permanent | No | Yes | N/A | N/A |
| Others | Controlling shareholder, actual controller and their concert parties’ covenant regarding restraint measures | Refer to IPO Prospectus | Permanent | No | Yes | N/A | N/A |
| and liability for compensation in the event of failure to fulfill their covenants | ||||||||
| Others | Directors, supervisors and senior officers’ covenant regarding restraint measures and liability for compensation in the event of failure to fulfill their covenants | Refer to IPO Prospectus | Term of office | No | Yes | N/A | N/A | |
| Resolve horizontal competition issues | Controlling shareholder’s covenant on avoiding horizontal competition and regulating and reducing related-party transactions | Refer to IPO Prospectus | Permanent | No | Yes | N/A | N/A | |
| Resolve related-party transaction issues | Actual controller’s covenant on avoiding horizontal competition and regulating and reducing related-party transactions | Refer to IPO Prospectus | Permanent | No | Yes | N/A | N/A | |
| Covenant related to share incentives | Others | Covenant by the grantee of share incentives regarding information disclosure documents | For details, refer to the 2019 Restricted Share Incentive Plan (Draft), the 2021 Restrict Share Incentive Plan (Draft), and | Permanent | No | Yes | N/A | N/A |
| the 2021 Second Restricted Share Incentive Plan (Draft) of the Company | ||||||||
| Covenant related to share incentives | Others | Company’s covenant on refraining from providing financial assistance | For details, refer to the 2019 Restricted Share Incentive Plan (Draft), the 2021 Restrict Share Incentive Plan (Draft), and the 2021 Second Restricted Share Incentive Plan (Draft) of the Company | Permanent | No | Yes | N/A | N/A |
(II) If the Company has made any profit forecast on its assets or project and the reporting period falls within the period of such profit forecast, explanationabout whether the goal has been achieved and the relevant reasonsExplanation about whether the goal has been achieved and the relevant reasons
□ Reached□ Not reached√ N/A
(III) Fulfillment of performance covenant and the relevant effect on goodwill impairment test
□ Applicable √ N/A
II. Non-operating occupation of funds by the controlling shareholder or its affiliates during the
reporting period
□ Applicable √ N/A
III. Guarantees in violation of regulations
□ Applicable √ N/A
IV. Explanation of the Board of Directors about the modified audit opinion issued by the
accounting firm
□ Applicable √ N/A
V. Explanation about the reasons and effect of changes in accounting policies and accountingestimates and correction of material accounting errors(I) Analysis of the reasons of changes in accounting policies and accounting estimates and therelevant effect
√ Applicable □ N/A
For details, refer to “V.44 Changes in significant accounting policies and accounting estimates” in “SectionX Financial Report” herein.(II) Explanation about the reasons and effect of correction of material accounting errors
□ Applicable √ N/A
(III) Communication with the former accounting firm
□ Applicable √ N/A
(IV) Other information
□ Applicable √ N/A
VI. Appointment and termination of appointment of accounting firm
In RMB 0’000
| Current accounting firm | |
| Name of domestic accounting firm | Pan-China Certified Public Accountants (Special General Partnership) |
| Fee payable to domestic accounting firm | 125.00 |
| Audit period of domestic accounting firm | 6 years |
| Name | Fee | |
| Sponsor | Huatai United Securities Co., Ltd. | / |
Explanation about the appointment and termination of appointment of accounting firm
√ Applicable □ N/A
The annual general meeting of shareholders of the Company for the year of 2020 approved theresolution to continue to appoint Pan-China Certified Public Accountants (Special General Partnership)as the auditor of the Company for the year of 2021 for a term of one year. Pan-China Certified Public
Accountants (Special General Partnership) has issued auditor’s reports for the Company between 2016 to2020.
Explanation about re-appointment of accounting firm during the audit period
□ Applicable √ N/A
VII. Delisting risks(I) Reasons causing the delisting risk warning
□ Applicable √ N/A
(II) Response measures taken by the Company
□ Applicable √ N/A
(III) Risk of delisting and the reason
□ Applicable √ N/A
VIII. Matters relating to bankruptcy and reorganization
□ Applicable √ N/A
IX. Material litigations and arbitrations
√ The Company was involved in material litigations or arbitration during the current year
□ The Company was not involved in material litigations or arbitration during the current year(I) Litigations and arbitrations already disclosed in interim announcements about which no new information is available
√ Applicable □ N/A
| Summary and type of case | Reference |
| I. Case for changing the inventor of patent 19-cv-00466-RGD-LRL in the United States District Court for the Eastern District of Virgini The Company brings a suit against Delta in the United States District Court for the Eastern District of Virginia for breach of non-disclosure agreement, wrongful appropriation of the technical solutions actually invented by the Company’s employees LI Yi and HU Fei, and filing for patent application in the United States without authorization, and petitions the court to order that the inventors of the patent-in-suit US9,024,241 shall be changed from WANG Bo, ZHANG Kesu and HUA Jianhao into LI Yi and HU Fei. | Refer to the Announcement on Litigation disclosed on September 9, 2019 (No. 2019-012). |
| II. (2020) Yue 73 Zhi Min Chu No. 1335-1341, No. 1353, No. 1355-1361 In August 2020, the Company initiated a civil litigation on the ground that Delta Electronics (Shanghai) Co., Ltd., Delta Video Display System (Wujiang) Limited, Digital Protection (Beijing) Electronics Technology Co., Ltd. and other entities infringed the patents for invention ZL200880107739.5 and ZL200810065225.X owned by the Company, requesting the court to order to stop the acts of infringing the Company’s patent rights and the damages for infringement in the amount of RMB80.00 million. | Refer to the Announcement on Litigation Against Delta Electronics (Shanghai) Co., Ltd. and Other Entities disclosed on August 11, 2020 (No. 2020-037). |
| III. (2021) Chuan 01 Zhi Min Chu No. 684, No. 685, and No. 686 In December 2021, Delta Electronics, Inc. initiated a civil litigation on the ground that the Company infringed the patent for invention ZL201410249663.7, | Refer to the Announcement on Malicious Litigation Initiated by Delta Electronics disclosed on December 21, 2021 (No. 2021-097). |
| ZL201610387831.8, and ZL201110041436.1, requesting the court to order to stop the acts of infringing the patent rights and the damages for infringement in the amount of RMB48.03 million. | |
| IV. (2021) Yue 73 Zhi Min Chu No. 1860 In December 2021, Delta maliciously initiated an intellectual property litigation against the Company. Since such act infringed the rights and interests of the Company, the Company sued Delta to Guangzhou Intellectual Property Court on December 17, 2021 on the ground of such malicious act, involving the amount of RMB10.00 million. | Refer to the Announcement on Malicious Litigation Initiated by Delta Electronics disclosed on December 21, 2021 (No. 2021-097). |
(II) Litigations and arbitrations that have not been disclosed in interim announcements or about which there’s new information available
√ Applicable □ N/A
In RMB 0’000
| During the reporting period: | |||||||||
| Plaintiff/claimant | Defendant/respondent | Party jointly and severally liable | Type of litigation/arbitration | Background | Amount claimed | Whether any provision is recognized and the amount | Status | Result and effect | Enforcement of judgment/award |
| Delta Electronics, Inc. | Appotronics Corporation Limited | Futian SPN Projector & Video System Firm of Shenzhen | Infringement on patent for invention | [2019] Yue 73 Zhi Min Chu No. 662, the Plaintiff alleges that it is the owner of the patent for invention ZL201610387831.8 and the Defendant infringed such patent | 1,614.53 | No | RMB10.00 million released, and in trial of the first instance | In trial of the first instance | |
| for invention of the Plaintiff and caused economic losses to the Plaintiff. | |||||||||
| Delta Electronics, Inc. | Appotronics Corporation Limited | Futian SPN Projector & Video System Firm of Shenzhen | Infringement on patent for invention | [2019] Yue 73 Zhi Min Chu No. 663, the Plaintiff alleges that it is the owner of the patent for invention ZL201310017478.0 and the Defendant infringed such patent for invention of the Plaintiff and caused economic losses to the Plaintiff. | 1,614.53 | No | Trial of the second instance completed | Ruling of the second instance: Delta was allowed to withdraw the litigation. | |
| Delta Electronics, Inc. | Appotronics Corporation Limited | Futian SPN Projector & Video System Firm of Shenzhen | Infringement on patent for invention | [2019] Yue 73 Zhi Min Chu No. 664, the Plaintiff alleges that it is the owner of the patent for invention ZL20310625063.1 and the Defendant infringed such patent for invention of the Plaintiff and caused economic losses to the | 1,614.53 | No | Trial of the second instance completed | Ruling of the second instance: Delta was allowed to withdraw the litigation. |
| Plaintiff. | |||||||||
| Delta Electronics, Inc. | Fengmi (Beijing) Technology Co., Ltd. | Appotronics Corporation Limited | Infringement on patent for invention | (2019) Jing 73 Min Chu No. 1275 and No. 1276, the Plaintiff alleges that it is the owner of the patent for invention ZL201410249663.7 and ZL201610387831.8, and the Defendant infringed such patent for invention of the Plaintiff and caused economic losses to the Plaintiff. | 3,202.00 | No | In trial of the first instance | In trial of the first instance | |
| Delta Electronics, Inc. | Fengmi (Beijing) Technology Co., Ltd. | Appotronics Corporation Limited | Infringement on patent for invention | [2019] Jing 73 Min Chu No. 1277, the Plaintiff alleges that it is the owner of the patent for invention ZL201310017478.0 and the Defendant infringed such patent for invention of the Plaintiff and caused economic losses to the Plaintiff. | 1,601.00 | No | Trial of the second instance completed | Ruling of the second instance: The case of the Plaintiff was rejected. |
| Delta Electronics, Inc. | Fengmi (Beijing) Technology Co., Ltd. | Appotronics Corporation Limited | Infringement on patent for invention | (2019) Jing 73 Min Chu No. 1278, the Plaintiff alleges that it is the owner of the patent for invention ZL201010624724.5 and the Defendant infringed such patent for invention of the Plaintiff and caused economic losses to the Plaintiff. | 1,601.00 | No | Trial of the first instance completed | Ruling of the first instance Delta was allowed to withdraw the litigation. | |
| Delta Electronics, Inc. | Appotronics Corporation Limited | Shanghai Haichi Digital Technology Co., Ltd. | Infringement on patent for invention | (2019) Hu 73 Zhi Min Chu No. 1069, the Plaintiff alleges that it is the owner of the patent for invention ZL201410249663.7 and the Defendant infringed such patent for invention of the Plaintiff and caused economic losses to the Plaintiff. | 1,601.00 | No | Trial of the first instance completed | Ruling of the first instance Ruling that this case was withdrawn by Delta. | |
| Delta Electronics, Inc. | Appotronics Corporation Limited | Shanghai Haichi Digital | Infringement on patent for invention | (2019) Hu 73 Zhi Min Chu No. 1070, the Plaintiff alleges that it | 1,601.00 | No | In trial of the first instance |
| Technology Co., Ltd. | is the owner of the patent for invention ZL201110041436.1 and the Defendant infringed such patent for invention of the Plaintiff and caused economic losses to the Plaintiff. | ||||||||
| Appotronics Corporation Limited | Delta Electronics Business Management (Shanghai) Co., Ltd. | Delta Video Display System (Wujiang) Limited; Shenzhen Super Network Technology Co., Ltd. | Infringement on patent for invention | (2019) Yue 03 Min Chu No. 2942, No. 2945, No. 2947, No. 2949, and No. 2950, the Plaintiff alleges that the Defendant 1, Defendant 2, and Defendant 3 infringed the patent for invention 200880107739.5 of the Plaintiff and caused economic losses to the Plaintiff. | 2,800.00 | No | The Plaintiff withdraw its case | The court ordered the case to be withdrawn. | |
| Appotronics Corporation Limited | Delta Electronics Business Management (Shanghai) Co., Ltd. | Delta Video Display System (Wujiang) Limited; | Infringement on patent for invention | (2019) Yue 03 Min Chu No. 2943, No. 2944, No. 2948, and No. 2951, the Plaintiff alleges that the | 2,400.00 | No | Under trial of the second instance |
| Shenzhen Super Network Technology Co., Ltd. | Defendant 1, Defendant 2, and Defendant 3 infringed the patent for invention 200810065225.X of the Plaintiff and caused economic losses to the Plaintiff. | ||||||||
| Appotronics Corporation Limited | Delta Electronics Business Management (Shanghai) Co., Ltd. | Delta Video Display System (Wujiang) Limited; Shenzhen Super Network Technology Co., Ltd. | Infringement on patent for invention | (2019) Yue 03 Min Chu No. 2946, the Plaintiff alleges that the Defendant 1, Defendant 2, and Defendant 3 infringed the patent for invention 200810065225.X of the Plaintiff and caused economic losses to the Plaintiff. | 400.00 | No | under trial of the second trial | ||
| Appotronics Corporation Limited | Delta Electronics, Inc. | Dispute over the ownership of patent right | (2019) Yue 03 Min Chu No. 4309, the Plaintiff petitions the court to declare that the patent ZL201610387831.8 “phosphor color wheel and its applicable light source system” is | 30.00 | No | The Plaintiff withdraw its case | The court ordered the case to be withdrawn |
| owned by the Company. | |||||||||
| Appotronics Corporation Limited, LI Yi, HU Fei | Delta Electronics, Inc. | ZHANG Kesu, HUA Jianhao, WANG Bo | Dispute over the ownership of patent right | (2021) Yue 03 Min Chu No. 2295, the Plaintiff petitions the court to declare that the patent ZL201610387831.8 “phosphor color wheel and its applicable light source system” is owned by the Company. | 30.00 | No | In trial of the first instance | ||
| Appotronics Hong Kong Limited | GDC Technology Limited (Cayman Islands) | Dispute over performance compensation | 01-021-0003-7526 U.S. case of arbitration GDC BVI failed to achieve the performance covenant for the year 2020, hence triggering the performance compensation provisions. Therefore, GDC Cayman needs to fulfill the performance compensation commitment. In May 2021, the subsidiary | 46,535,911 ordinary shares in GDC BVI or USD5.6 million in cash | No | The Plaintiff withdraw its case | The Parties settled, and the American Arbitration Association has issued the closing receipt |
Appotronics HKapplied with AmericanArbitration Associationfor the arbitrationagainst GDC Cayman,requesting theRespondent to pay theCompany performancecompensation.
(III) Other information
√ Applicable □ N/A
As of December 31, 2021, a total of 15 invalidation petitions has been raised against the Company’s patent for invention ZL200880107739.5 (hereinafter referredto as the “7739”), and a total of 11 invalidation petitions has been raised against the Company’s patent for invention ZL200810065225.X (hereinafter referred to as“5225”). As of the end of the reporting period, among the invalidation petitions raised against 7739 and 5225, 25 cases have been decided by the National IntellectualProperty Administration, with the patent sustained, or withdrawn by the petitioner, and only 1 case is in trial at the National Intellectual Property Administration. Asof the end of the reporting period, 2 invalidation cases with the Company as the patentee have been decided by the National Intellectual Property Administration,where the National Intellectual Property Administration partially sustained the patent right in 1 case, and the other case is in trial at the National Intellectual PropertyAdministration. In December 2021, the invalidation petitioners WANG Lihua and QIN Songli separately submitted invalidation petitions to the National IntellectualProperty Administration against the design patent 202130075102.0 held by Beijing Fengmi, for which the case numbers are 6W120283 and 6W120359, respectively.As of the end of the reporting period, there were 3 invalidation cases where the Company acted as a petitioner. The case is in trial at the National IntellectualProperty Administration, and is related to the invalidation petition against patents held by Delta Electronics, Inc.
X. Penalties imposed on the listed company and its directors, supervisors, senior officers,
controlling shareholder, actual controller for suspected violation of laws and regulations andrectification of the relevant violations
□ Applicable √ N/A
XI. Credit standing of the Company and its controlling shareholder and actual controller duringthe reporting period
□ Applicable √ N/A
XII. Material related-party transactions
(I) Related-party transactions in connection with day-to-day operation
1. Matters already disclosed in the interim announcements about which no new information isavailable
□ Applicable √ N/A
2. Matters already disclosed in the interim announcements about which there’s new informationavailable
√ Applicable □ N/A
In RMB 0’000
| Category of related-party transaction | Related party | Expected amount of last year (previous) | Actual amount of last year (previous) | Reason for the great difference between the expected amount and the actual amount |
| Provide a related party with products, goods, leases, and services | Xiaomi Communications Technologies Co., Ltd. and its affiliates | 91,000.00 | 59,277.41 | The relevant demands decreased due to the impact of COVID-19 |
| CFEC and its affiliates | 11,000.00 | 7,426.00 | The relevant demands decreased due to the impact of COVID-19 | |
| CINIONIC and its affiliates | 4,000.00 | 3,236.18 | N/A | |
| Beijing Donview Education Technology Co., Ltd. and its affiliates | 650.00 | 453.61 | N/A | |
| GDC and its affiliates | 2,100.00 | 997.35 | The relevant demands decreased due to the impact of COVID-19 overseas | |
| WeCast and its affiliates | 5,800.00 | 1,713.29 | The subsidiary experienced changes in the sales channels |
| for expanding the overseas business | ||||
| Subtotal | 114,550.00 | 73,103.84 | ||
| Purchasing goods and raw materials from a related party | Xiaomi Communications Technologies Co., Ltd. and its affiliates | 38,000.00 | 24,362.78 | The relevant demands decreased due to the impact of COVID-19 |
| CFEC and its affiliates | 1,500.00 | 1,561.42 | N/A | |
| Shenzhen YLX Technology Development Co., Ltd. | 400.00 | 116.05 | N/A | |
| GDC and its affiliates | 1,500.00 | 571.20 | The relevant demands decreased due to the impact of COVID-19 | |
| Subtotal | 41,400.00 | 26,611.45 | ||
| Receive labor services from a related party | WeCast and its affiliates | 35.00 | 24.14 | N/A |
| Xiaomi Communications Technologies Co., Ltd. and its affiliates | 200.00 | 118.80 | N/A | |
| CFEC and its affiliates | 4,000.00 | 3,170.40 | N/A | |
| GDC and its affiliates | 0.00 | 1.15 | N/A | |
| Beijing Donview Education Technology Co., Ltd. and its affiliates | 10.00 | 1.41 | N/A | |
| Subtotal | 4,245.00 | 3,315.90 | ||
| Property lease | CFEC and its affiliates | 200.00 | 202.36 | N/A |
| Subtotal | 200.00 | 202.36 | ||
| Total | 160,395.00 | 103,233.55 |
3. Matters that have not been disclosed in any interim announcement
□ Applicable √ N/A
(II) Related-party transactions involving acquisition or sale of assets or equities
1. Matters already disclosed in the interim announcements about which no new information isavailable
□ Applicable √ N/A
2. Matters already disclosed in the interim announcements about which there’s new informationavailable
□ Applicable √ N/A
3. Matters that have not been disclosed in any interim announcement
□ Applicable √ N/A
4. Fulfillment of performance covenants (if any) during the reporting period
√ Applicable □ N/A
In July 2021, the Company signed the Settlement Agreement with GDC Cayman, under which GDCBVI shall increase the business of purchasing cinema hardware products from the Company. That is, GDCBVI shall purchase cinema hardware products over a certain quantity in 2021, 2022, 2023, and 2024. TheParties shall sign a specific purchase agreement within 60 days from the effectiveness of the SettlementAgreement.The Parties have not reached a consensus on the Purchase Agreement by now, and GDC BVI has notpurchased the foregoing hardware products from the Company.At present, the Company is in dispute with relevant GDC parties concerning the protective provisions,such as the veto right held by the Company, which may affect the listing of GDC BVI, and the infringementof shareholder’s rights, such as the protective provisions, of the Company by relevant GDC parties. TheParties are in the process of arbitration and counter arbitration, namely a key stage of commercialnegotiation. The Company will take legal measures or communicate with relevant GDC parties to solvethe existing main disputes between the Parties.As a result, based on the communication between the Parties at present, the cooperation on thepurchase business for cinema hardware products between the Company and GDC BVI is subject touncertainty.
(III) Related-party transactions involving joint external investments
1. Matters already disclosed in the interim announcements about which no new information isavailable
√ Applicable □ N/A
| Summary | Reference |
| On March 26, 2021, the Company held the 30th meeting of the first Board of Directors and the 17th meeting of the first Board of Supervisors, at which the Proposal on Capital Increase by in a Wholly-owned Subsidiary and Acquisition of 51% Equity Interests in WeCast Technology Corp. and the Related-party Transaction was reviewed and approved, under which (Chongqing) Innovative Technology Co., Ltd., a subsidiary in the scope of consolidation for the Company’s financial statements, shall make additional contribution of USD4.00 million to the wholly-owned subsidiary Limited, where the additional capital shall be used to subscribe to 51% equity interests in WeCast Technology Corp. LI Yi, the actual controller and the Chairman of the Company, acts as a director of WeCast, hence this subscription constitutes a related-party transaction. | Please refer to the Announcement No. 2021-018 Announcement on Increase by of Capital to the Wholly-owned Subsidiary and Subscription for 51% of Equity of WeCast Technology Corp. and on related-party transactions” issued by the Company on www.sse.com.cn and the designated media for information disclosure on March 27, 2021. |
2. Matters already disclosed in the interim announcements about which there’s new information
available
√ Applicable □ N/A
The Company held the 24
thmeeting of the first Board of Directors on August 17, 2020 and the secondinterim general meeting for 2020 on September 3, 2020, at which the Proposal on Increasing the Capitalof a Controlled Subsidiary by Issuing Additional Shares and Introducing a Strategic Investor wasreviewed and passed, approving the controlled subsidiary to introduce a strategic investor.As of February 2021, the plan of capital increase by issuing additional shares has not been dulyimplemented. The parties negotiated to optimize and adjust the original transaction plan. In February 2021,the Company held the 29
th
meeting of the first Board of Directors and the first interim general meeting for2021, at which the Proposal on Adjusting the Plan of Increasing the Capital of a Controlled Subsidiaryby Issuing Additional Shares & Related-party Transaction was reviewed and passed. Refer to theAnnouncement No. 2021-002 Announcement on Adjusting the Plan for Increasing the Capital of a
Controlled Subsidiary by Issuing Additional Shares & Related-party Transaction issued by the Companyon www.sse.com.cn on February 10, 2021.
3. Matters that have not been disclosed in any interim announcement
□ Applicable √ N/A
(IV) Accounts receivable from and payable to related parties
1. Matters already disclosed in the interim announcements about which no new information isavailable
□ Applicable √ N/A
2. Matters already disclosed in the interim announcements about which there’s new information
available
□ Applicable √ N/A
3. Matters that have not been disclosed in any interim announcement
□ Applicable √ N/A
(V) Financial business between the Company and its affiliated financial companies, or between theCompany’s controlled financial companies and affiliates
□ Applicable √ N/A
1. Deposit business
□ Applicable √ N/A
2. Loan business
□ Applicable √ N/A
3. Facility business or other financial business
□ Applicable √ N/A
4. Other information
□ Applicable √ N/A
(VI) Others
□ Applicable √ N/A
XIII. Material contracts and performance thereof
(I) Trusteeship, contracting and lease
1、 Trusteeship
2、 Contracting
□ Applicable √ N/A
3、 Lease
√ Applicable □ N/A
In RMB 0’000
| Lessor | Name of lessee | Leased assets | Amount of leased assets | Lease start date | Lease end date | Lease income | Basis for determining lease income | Impact of lease income on the Company | Related-party transaction or not | Relationship |
| Shenzhen Meisheng Industry Co., Ltd. | Appotronics Corporation Limited | Office, R&D, factory, employee dormitory | 1,231.93 | 2020.01.01 | 2022.11.30 | / | / | / | No | None |
Description of leaseNone
(II) Guarantees
√ Applicable □ N/A
In RMB 0’000
| Total amount of guarantees provided during the reporting period (excluding those provided for the subsidiaries) | 0 |
| Balance of guarantees as of the end of the reporting period (excluding those provided for the subsidiaries) (A) | 0 |
| Guarantees provided by the Company or its subsidiaries for the subsidiaries of the Company | |
| Total amount of guarantees provided for the subsidiaries during the reporting period | 93,347.64 |
| Balance of guarantees provided for the subsidiaries as of the end of the reporting period (B) | 53,780.99 |
| Total amount of guarantees provided by the Company (including those provided for the subsidiaries) | |
| Total amount guaranteed (A+B) | 53,780.99 |
| Proportion of total amount guaranteed to the net assets of the Company (%) | 22.06 |
| Including: | |
| Total amount of guarantees provided for the shareholders, actual controller and their affiliates (C) | 0.00 |
| Total amount of debt guarantees directly or indirectly provided for the obligors whose equity-debt ratio exceeds 70% (D) | 28,652.90 |
| Total amount guaranteed in excess of 50% of the net assets of the Company (E) | |
| Total amount guaranteed (C+D+E) | 28,652.90 |
| Explanation about outstanding guarantees for which the Company may assume joint and several liability | N/A |
| Explanation about guarantees | N/A |
(III) Entrusted cash asset management
1. Entrusted wealth management
(1) Overall situation of entrusted wealth management
√ Applicable □ N/A
In RMB 0’000
| Type | Source of funds | Total amount | Outstanding amount | Overdue amount |
| Bank wealth management amount | Idle funds raised | 43,500.00 | 37,100.00 | 0.00 |
| Bank wealth management amount | Self-funded capital | 13,000.00 | 0.00 | 0.00 |
Other information
□ Applicable √ N/A
(2) Single entrusted wealth management
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(3) Provision for impairment of entrusted wealth management products
□ Applicable √ N/A
2. Entrusted loans
(1) Overall situation of entrusted loans
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(2) Single entrusted loans
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(3) Provision for impairment of entrusted loans
□ Applicable √ N/A
3. Other information
□ Applicable √ N/A
(IV) Other material contracts
□ Applicable √ N/A
XIV. Use of offering proceeds
√ Applicable □ N/A
(I) Overall use of funds raised
√ Applicable □ N/A
In RMB
| Source of offering proceeds | Total offering proceeds | Net offering proceeds after deduction of offering expenses | Total offering proceeds committed | Total offering proceeds committed after adjustment (1) | Cumulative total offering proceeds used as of the end of the reporting period (2) | Cumulative investment progress as of the end of the reporting period (%) (3)=(2)/(1) | Amount invested in this year (4) | Ratio of the amount invested in this year (%) (5)=(4)/(1) |
| Initial public offering | 1,190,000,000.00 | 1,062,470,797.73 | 1,000,000,000.00 | 1,000,000,000.00 | 562,394,147.94 | 56.24 | 110,161,741.65 | 11.02 |
(II) Breakdown of investment projects
√ Applicable □ N/A
In RMB
| Item | Whether change of investment is involved | Source of offering proceeds | Total investment from the offering proceeds committed for the project | Total investment from the offering proceeds after adjustment (1) | Cumulative total offering proceeds used as of the end of the reporting period (2) | Cumulative investment progress as of the end of the reporting period (%) (3)=(2)/(1) | Date for the project to reach the working condition for its intended use | Completed or not | Whether the investment progress meets the progress planned | Specific reason for failing to achieve the plan of investment progress | Benefits or R&D results achieved by the project | Material changes in the project feasibility, if any, describe the specific reasons | Balance amount and reasons thereof |
| R&D and industrialization of new generation of laser display products | No | Initial public offering | 313,000,000.00 | 313,000,000.00 | 173,503,966.84 | 55.43 | December 2022 | No | No | On the principles of cost control and risk reduction, in the past two years, under the impact of COVID-19 and general chip shortage in the industry, the Company acted more diligently in production capacity expansion in consideration of the actual existing production capacity and demands to respond to uncertainties in the macro environment. | None | No | N/A |
| R&D center at the head office of Appotronics | No | Initial public offering | 284,000,000.00 | 284,000,000.00 | 30,790,010.30 | 10.84 | December 2023 | No | No | The construction of the head office building was slowed down due to the repeated outbreak of COVID-19 and complex geological conditions on the site. This project may be fully implemented only after the construction of the head office building is completed. As a result, the project implementation is postponed. | None | No | N/A |
| Information system | No | Initial public offering | 70,000,000.00 | 70,000,000.00 | 22,705,133.19 | 32.44 | December 2023 | No | No | Since the main body of the head office building of the | None | No | N/A |
| upgrade and building | Company is still under construction, the prerequisites for implementing this project have not been satisfied. | ||||||||||||
| Supplementary working capital | No | Initial public offering | 333,000,000.00 | 333,000,000.00 | 335,395,037.62 | 100.72 | None | Yes | Yes | None | No | N/A |
Note:
1. On March 18, 2022, the 9
th
meeting of the second Board of Directors and the 8
th
meeting of the second of Board of Supervisors reviewed the Proposal on PostponingSome Investment Projects, approving the Company to adjust the time for some investment projects to reach the working condition for its intended use. For details,please refer to the Announcement on Postponing Some Investment Projects disclosed on the website of Shanghai Stock Exchange (www.sse.com.cn) on March 21,2022.
2. During the project, the total wealth management returns of RMB2.3950 million were realized from the special account of supplementary working capital, whichhave been put into use in the project (supplementary working capital). As of the date of approval for issue of this Report, the special account (Huaxia Bank Co., Ltd.Houhai Branch, account number: 10869000000251463) has been deregistered. The interest RMB1,418.11 incurred after the project has been paid to the basic accountof the Company to be used as supplementary working capital.(III) Change in investment projects during the reporting period
□ Applicable √ N/A
(IV) Other information about the use of offering proceeds during the reporting period
1. Early investment and replacement of offering proceeds
√ Applicable □ N/A
On July 29, 2019, the Proposal on Replacing Early Funds Invested with Offering Proceeds wasreviewed and passed at the 16
thmeeting of the first Board of Directors, approving the Company to replacethe invested funds of RMB18.9584 million as of July 19, 2019 with the offering proceeds, and replace theoffering expenses paid in the amount of RMB3.1056 million with the offering proceeds. The matters abovehave been assured by Pan-China Certified Public Accountants (Special General Partnership), which issuedthe Assurance Report on Replacement of Funds with Offering Proceeds by Appotronics CorporationLimited (Tian Jian Shen [2019] No. 7-393).
2. Supplement the working capital with idle offering proceeds
□ Applicable √ N/A
3. Cash management of idle offering proceeds, and investment in relevant products
√ Applicable □ N/A
On July 21, 2020, the Proposal on Cash Management of Temporarily Idle Offering Proceeds wasreviewed and passed at the 23
rd meeting of the first Board of Directors and the 11
thmeeting of the firstBoard of Supervisors. It was approved that, without affecting the normal implementation of the investmentplan for offering proceeds, a maximum of RMB670 million temporarily idle offering proceeds may be putunder cash management to purchase investment products featuring high security, good liquidity, andguarantee of the principal (including but not limited to structural deposits, agreement deposits, noticedeposits, term deposits, large-amount deposit note, and return notes), where the total amount forpurchasing return notes shall be no more than RMB200 million for no more than 12 months, which shallbe effective within 12 months from the review and approval by the Board of Directors and Board ofSupervisors.
On July 15, 2021, the Proposal on Cash Management of Temporarily Idle Offering Proceeds wasreviewed and passed at the 32
nd meeting of the first Board of Directors and the 19
thmeeting of the firstBoard of Supervisors. It was approved that, without affecting the normal implementation of the investmentplan for offering proceeds, a maximum of RMB602 million temporarily idle offering proceeds may be putunder cash management to purchase investment products featuring high security, good liquidity, andguarantee of the principal (including but not limited to structural deposits, agreement deposits, noticedeposits, term deposits, large-amount deposit note, and return notes), where the total amount forpurchasing return notes shall be no more than RMB200 million for no more than 12 months, which shallbe effective within 12 months from the review and approval by the Board of Directors and Board ofSupervisors.
4. Supplement working capital or repay bank loans with excess offering proceeds
□ Applicable √ N/A
5. Others
□ Applicable √ N/A
XV. Explanation about other significant matters having significant influence on the value
judgement and investment decision-making of investors
□ Applicable √ N/A
Section VII Changes in Shares and Shareholders
I. Changes in share capital(I) Statement of changes in shares
1. Statement of changes in shares
Unit: Share
| Before the change | +/- | After the change | |||||||
| Number | Percentage (%) | New shares | Bonus shares | Capitalization of capital reserve | Others | Subtotal | Number | Percentage (%) | |
| I. Non-tradable shares | 169,456,766 | 37.43 | -2,720,000 | -2,720,000 | 166,736,766 | 36.83 | |||
| 1. Shares held by the State | |||||||||
| 2. Shares held by State-owned corporations | |||||||||
| 3. Shares held by other domestic investors | 165,462,755 | 36.55 | -2,720,000 | -2,720,000 | 162,742,755 | 35.95 | |||
| Including: Shares held by domestic non-stated-owned corporations | 165,462,755 | 36.55 | -2,720,000 | -2,720,000 | 162,742,755 | 35.95 | |||
| Shares held by domestic natural persons | 0 | 0 | |||||||
| 4. Shares held by foreign investors | 3,994,011 | 0.88 | 3,994,011 | 0.88 | |||||
| Including: Shares held by foreign corporations | 3,994,011 | 0.88 | 3,994,011 | 0.88 | |||||
| Shares held by foreign natural persons | |||||||||
| II. Tradable shares | 283,300,135 | 62.57 | 2,720,000 | 2,720,000 | 286,020,135 | 63.17 | |||
| 1. RMB-denominated ordinary shares | 283,300,135 | 62.57 | 2,720,000 | 2,720,000 | 286,020,135 | 63.17 | |||
| 2. Foreign currency-denominated shares listed domestically | |||||||||
| 3. Foreign currency-denominated shares listed overseas | |||||||||
| 4. Others | |||||||||
| III. Total shares | 452,756,901 | 100 | 0 | 0 | 452,756,901 | 100 |
2. Explanation about changes in shares
√ Applicable □ N/A
The 2,720,000 restricted shares under strategic allotment in the initial public offering became available for trading on July 22, 2021, accounting for 0.6008% ofthe total share capital of the Company on that day. One shareholder is involved, for whom the lockup period is 24 months from the listing of the Company’s shares.For details, please refer to the Announcement on the Circulation of Restricted Shares under Strategic Allotment during Initial Public Offering (2021-053) dated July16, 2021 on the website of the Shanghai Stock Exchange (www.sse.com.cn).
3. Effect of the changes in shares on the earnings per share, net assets per share and other financial indicators of the most recent year and the most recentreporting period (if any)
□ Applicable √ N/A
4. Other information disclosed as the Company deems necessary or required by the securities regulatory authority
□ Applicable √ N/A
(II) Changes in non-tradable shares
√ Applicable □ N/A
Unit: Share
| Shareholder | Balance of non-tradable shares as at January 1, 2020 | Number of non-tradable shares unlocked in 2020 | Number of non-tradable shares increased in 2020 | Balance of non-tradable shares as at December 31, 2020 | Reason for restriction | Unlock date |
| Huatai Venture Capital Investment Co., Ltd. | 2,720,000 | 2,720,000 | 0 | 0 | Non-tradable strategic allotted shares in IPO | July 22, 2021 |
| Total | 2,720,000 | 2,720,000 | 0 | 0 | / | / |
II. Issuance and listing of securities
(I) Securities issued during the reporting period
□ Applicable √ N/A
Explanation about the securities issued during the reporting period (in case of any outstanding bondswith different interest rates, please explain separately):
□ Applicable √ N/A
(II) Changes in total number of shares, shareholding structure, and structure of assets andliabilities of the Company
□ Applicable √ N/A
III. Shareholders and actual controller(I) Total number of shareholders
| Total number of ordinary shareholders as of the end of the reporting period | 14,138 |
| Total number of shareholders of ordinary shares as of the end of the month immediately prior to the issue date of this annual report (accounts) | 14,426 |
| Total number of shareholders of preferred shares whose voting right has been restituted as of the end of the reporting period (accounts) | N/A |
| Total number of shareholders of preferred shares whose voting right has been restituted as of the end of the month immediately prior to the issue date of this annual report | N/A |
| Total number of shareholders holding shares with special voting rights as of the end of the reporting period (accounts) | N/A |
| Total number of shareholders holding shares with special voting rights as of the end of the month prior to the disclosure date of the annual report (accounts) | N/A |
Number of holders of depository receipts
□ Applicable √ N/A
(II) Shares held by top 10 shareholders and top 10 holders of tradable shares as of the end of the
reporting period
Unit: Share
| Shares held by top 10 shareholders | ||||||||
| Shareholder (Full name) | Change during the reporting period | Balance of shares held as of the end of the reporting period | Percentage (%) | Number of non-tradable shares held | Number of non-tradable shares held, including the shares lent out under the refinancing arrangement | Shares pledged, marked, or frozen | Shareholder nature | |
| Share status | Number | |||||||
| Shenzhen Appotronics Holdings Limited | 0 | 79,762,679 | 17.62 | 79,762,679 | 79,762,679 | None | 0 | Domestic non-stated owned corporation |
| Shenzhen Yuanshi Laser Industrial Investment Consulting Partnership (LP) | 0 | 24,139,500 | 5.33 | 24,139,500 | 24,139,500 | None | 0 | Domestic non-stated owned corporation |
| Nantong Strait Appotronics Investment Partnership (LP) | -1,984,408 | 23,080,329 | 5.10 | 0 | 0 | None | 0 | Domestic non-stated owned corporation |
| Citron PE Investment (Hong Kong) 2016 Limited | -15,680,029 | 21,733,003 | 4.80 | 0 | 0 | None | 0 | Foreign corporation |
| Shenzhen Appotronics Daye Investment Partnership (LP) | 0 | 20,430,250 | 4.51 | 20,430,250 | 20,430,250 | None | 0 | Domestic non-stated owned corporation |
| SAIF IV Hong Kong (China Investments) Limited | -35,929,457 | 17,984,278 | 3.97 | 0 | 0 | None | 0 | Foreign corporation | |||
| Shenzhen Appotronics Hongye Investment Partnership (LP) | 0 | 15,662,374 | 3.46 | 15,662,374 | 15,662,374 | None | 0 | Domestic non-stated owned corporation | |||
| Shenzhen Jinleijing Investment Limited Partnership (LP) | 0 | 12,353,106 | 2.73 | 12,353,106 | 12,353,106 | None | 0 | Domestic non-stated owned corporation | |||
| Green Future Holdings Limited | -4,171,092 | 12,333,426 | 2.72 | 0 | 0 | None | 0 | Foreign corporation | |||
| Shenzhen Appotronics Chengye Consulting Partnership (LP) | 0 | 10,394,846 | 2.30 | 10,394,846 | 10,394,846 | None | 0 | Domestic non-stated owned corporation | |||
| Shares held by top 10 holders of tradable shares | |||||||||||
| Shareholder | Number of tradable shares held | Type and number of shares | |||||||||
| Category | Number | ||||||||||
| Nantong Strait Appotronics Investment Partnership (LP) | 23,080,329 | RMB-denominated ordinary share | 23,080,329 | ||||||||
| Citron PE Investment (Hong Kong) 2016 Limited | 21,733,003 | RMB-denominated ordinary share | 21,733,003 | ||||||||
| SAIF IV Hong Kong (China Investments) Limited | 17,984,278 | RMB-denominated ordinary share | 17,984,278 | ||||||||
| Green Future Holdings Limited | 12,333,426 | RMB-denominated ordinary share | 12,333,426 | ||||||||
| Shenzhen Guochuang Chenggu Capital Management Co., Ltd. - Shenzhen Chengguhui Equity Investment Partnership (LP) | 6,964,369 | RMB-denominated ordinary share | 6,964,369 | ||||||||
| Shenzhen Liansong Capital Management Partnership (LP) | 5,833,817 | RMB-denominated ordinary share | 5,833,817 |
| China Merchants Bank Co., Ltd. - Agricultural Bank of China Huili Strategic Income One-year Holding Hybrid Securities Investment Fund | 5,648,894 | RMB-denominated ordinary share | 5,648,894 |
| China Construction Bank Corporation - Invesco Great Wall Environment Protection Advantageous Stock Securities Investment Fund | 5,570,992 | RMB-denominated ordinary share | 5,570,992 |
| LUO Xiaobin | 4,564,961 | RMB-denominated ordinary share | 4,564,961 |
| Smart Team Investment Limited | 4,288,748 | RMB-denominated ordinary share | 4,288,748 |
| Explanation about the special purchase account in top 10 shareholders | N/A | ||
| Explanation about entrusted voting rights, proxy voting rights, waiver of voting rights by the shareholders above | N/A | ||
| Affiliates or concert parties among the shareholders stated above | 1. As of December 31, 2021, the Company has received no statement from aforementioned shareholders to confirm that there is a related-party relationship or concerted action, except the concerted action among Shenzhen Appotronics Holdings Co., Ltd., Shenzhen Yuanshi Laser Industrial Investment Consulting Partnership (LP), Shenzhen Appotronics Daye Investment Partnership (LP), Shenzhen Appotronics Hongye Investment Partnership (LP), Shenzhen Jinleijing Investment Limited Partnership (LP), and Shenzhen Appotronics Chengye Consulting Partnership (LP) in top 10 shareholders of the Company. 2. We are not aware whether there are affiliates or concert parties as defined in the Administrative Measures for the Acquisition of the Listed Companies among other shareholders. | ||
| Holders of preferred shares whose voting right has been restituted and the number of shares held by them | N/A | ||
Top 10 holders of non-tradable shares and lock-up period
√ Applicable □ N/A
Unit: Share
| No. | Holder of non-tradable shares | Number of non-tradable shares held | Unlocking of non-tradable shares | Lock-up period | |
| Unlock date | Number of shares newly unlocked | ||||
| 1 | Shenzhen Appotronics Holdings Limited | 79,762,679 | July 22, 2022 | 0 | 36 months after the listing date |
| 2 | Shenzhen Yuanshi Laser Industrial Investment Consulting Partnership (LP) | 24,139,500 | July 22, 2022 | 0 | 36 months after the listing date |
| 3 | Shenzhen Appotronics Daye Investment Partnership (LP) | 20,430,250 | July 22, 2022 | 0 | 36 months after the listing date |
| 4 | Shenzhen Appotronics Hongye Investment Partnership (LP) | 15,662,374 | July 22, 2022 | 0 | 36 months after the listing date |
| 5 | Shenzhen Jinleijing Investment Limited Partnership (LP) | 12,353,106 | July 22, 2022 | 0 | 36 months after the listing date |
| 6 | Shenzhen Appotronics Chengye Consulting Partnership (LP) | 10,394,846 | July 22, 2022 | 0 | 36 months after the listing date |
| 7 | BLACKPINE Investment Corp. Limited | 3,994,011 | July 22, 2022 | 0 | 36 months after the listing date |
| Affiliates or concert parties among the shareholders stated above | As of December 31, 2021, among the shareholders of the restricted shares above, Appotronics Holdings, Yuanshi, Appotronics Daye, Appotronics Hongye, Jinleijing, Appotronics Chengye, and BLACKPINE Investment Corp. Limited are concert parties. We have not received any notice about affiliates or concert parties among other shareholders stated above. | ||||
Statement of top 10 holders of domestic depository receipts as of the end of the reporting period
□ Applicable √ N/A
Number of non-tradable depository receipts held by top 10 holders and lock-up period
□ Applicable √ N/A
(III) Statement of top 10 shareholders by number of votes held as of the end of the reporting period
□ Applicable √ N/A
(IV) Strategic investors or general corporations that become top shareholders as a result of allotment of new shares/depository receipts
□ Applicable √ N/A
(V) Strategic allotment in IPO
1. Participation by any special asset management plan established by senior officers and keyemployees in the strategic allotment in IPO
√ Applicable □ N/A
Unit: Share
| Shareholder | Number of shares/depository receipts allotted | Unlock date | Changes during the reporting period | Closing number of non-tradable shares held, including the shares/depository receipts lent out under the refinancing arrangement |
| Huatai Appotronics Employee Stock Ownership Plan - Jiayuan I Collective Asset Management Plan | 4,548,685 | July 22, 2020 | -4,548,685 | 0 |
2. Participation by any subsidiary of the sponsor in the strategic allotment in IPO
√ Applicable □ N/A
Unit: Share
| Shareholder | Relationship with the sponsor | Number of shares/depository receipts allotted | Unlock date | Changes during the reporting period | Closing number of non-tradable shares held, including the shares/depository receipts lent out under the refinancing arrangement |
| Huatai Venture Capital Investment Co., Ltd. | Subsidiary of the sponsor | 2,720,000 | July 22, 2021 | -2,720,000 | 0 |
IV. Controlling shareholder and actual controller(I) Controlling shareholder
1 Legal person
√ Applicable □ N/A
| Name | Shenzhen Appotronics Holdings Limited |
| Principal or legal representative | LI Yi |
| Date of establishment | January 17, 2014 |
| Main business | Investment holding |
| Shares held in other domestic or foreign listed companies during the reporting period | None |
| Other information | N/A |
2 Natural person
□ Applicable √ N/A
3 Special explanation if the Company does not have a controlling shareholder
□ Applicable √ N/A
4 Explanation about the change in the controlling shareholder during the reporting period
□ Applicable √ N/A
5 Block diagram of the controlling shareholder’s ownership of and control over the Company
√ Applicable □ N/A
(II) Actual controller1 Legal person
□ Applicable √ N/A
2 Natural person
√ Applicable □ N/A
| Name | LI Yi |
| Nationality | China |
| Whether or not have right of residence in any other country or region | Yes |
| Main occupation and title | President and General Manager of Appotronics |
| Whether or not control any domestic or foreign listed company in the past 10 years | None |
3 Special explanation if the Company does not have an actual controller
□ Applicable √ N/A
4 Explanation about the change of control of the Company during the reporting period
□ Applicable √ N/A
5 Illustration of shareholding and controlling relation between the Company and its ultimate
controlling shareholder
√ Applicable □ N/A
Appotronics
HoldingsAppotronics
6 The actual controller controls the Company by means of trust or other assets management
□ Applicable √ N/A
(III) Other information about the controlling shareholder and the actual controller
□ Applicable √ N/A
V. The total shares pledged by the controlling shareholder or largest shareholder and partiesacting in concert therewith account for over 80% of the share held by such shareholder in theCompany
□ Applicable √ N/A
VI. Other corporate shareholders holding more than 10% shares
□ Applicable √ N/A
VII. Restrictions on the disposal of shares/depository receipts
□ Applicable √ N/A
VIII. Specific implementation of share repurchase during the reporting period
□ Applicable √ N/A
LI YiAppotronicsHoldings
| Appotronics Holdings | Yuanshi | Appotronics Daye | Appotronics Hongye | Jinleijing | Appotronics Chengye |
Control 35.95% in total
Control 35.95% in totalAppotronics
Section VIII Preferred Shares
□ Applicable √ N/A
Section IX Corporate BondsI. Enterprise bonds, corporate bonds, and non-financial enterprise debt financing instruments
□ Applicable √ N/A
II. Convertible corporate bonds
□ Applicable √ N/A
Section X Financial Report
I. Auditor’s report
√ Applicable □ N/A
Auditor’s report
Tian Jian Shen (2022) No. 7-384To all shareholders of Appotronics Corporation Limited:
I. OpinionWe have audited the financial statements of Appotronics Corporation Limited(“Appotronics”), which comprise the consolidated and the parent company’s balance sheetsas at December 31, 2021, and the consolidated and the parent company’s income statements,the consolidated and the parent company’s statements of cash flow and the consolidated andthe parent company’s statements of changes in owners’ equity for the year then ended, andthe notes to the relevant financial statements.In our opinion, the accompanying financial statements of Appotronics are prepared andpresent fairly, in all material respects, the consolidated and the parent company’s financialposition as of December 31, 2021, and the consolidated and the parent company’s results ofoperations and cash flows for the year then ended in accordance with Accounting Standardsfor Business Enterprises.
II. Basis for opinionWe conducted our audit in accordance with Auditing Standards for Certified PublicAccounts of China. Our responsibilities under those standards are further described in theAuditors’ Responsibilities for Audit of Financial Statements section of our report. We areindependent of Appotronics Corporation in accordance with the code of ethics for ChineseCertified Public Accountants, and we have fulfilled our other ethical responsibilities inaccordance with the Code. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.
III. Key audit itemsKey audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the financial statements of the current period. These matters were
addressed in the context of our audit of the financial statements as a whole, and in formingour opinion thereon, and we do not provide a separate opinion on these matters.(I) Revenue recognition
1. Description
Details of relevant information are disclosed in V.38, V.42, VII.61, and XVI.6 of sectionX.
Appotronics Corporation is mainly engaged in research, development, production, salesand leasing of laser display core devices and complete equipment. In 2021, the operatingincome of Appotronics Corporation amounted to RMB 2,498,228,401.78, of which sales andother incomes were RMB 2,137,606,392.96, representing 85.56% of the total operatingincome, and lease incomes were RMB 360,622,008.82, representing 14.44% of the totaloperating income.
The specific methods for revenue recognition are as follows:
(1) Revenue from sales of goods
Revenue from sales of goods denotes contractual obligations to be performed at a timepoint. Our sales include sales to the domestic market and sales to foreign markets.
Goods sold to the domestic market: 1) Under the direct sale model and the distributionmode, the Company recognizes the revenue when the goods sent have been delivered tocustomers with customers’ receipt given to the Company. For goods sold attached with returnconditions, the Company recognizes the revenue when the validity period of goods returnconditions expires, and recognizes liabilities to write off the revenue according to theexpected amount to be refunded due to the return of goods; for goods required for installmentand inspection after sales, the Company recognizes the revenue when such goods have beeninstalled and inspected with customers’ acceptance certificate given to the Company. If theCompany shares profits from sales of products by a downstream end customer, the Companyrecognizes the revenue at the goods price agreed between the parties upon the delivery ofgoods to the customer and reconciliation, and recognizes shared revenue according to theshare profit reconciliation statement when the profits from sales of goods are realized. 2)Under the commissioned sales mode, the Company recognizes the revenue when it receivesthe list of commissioned sales from the customer.
Goods exported to overseas markets: The Company mainly adopts FCA for export ofgoods. Under this mode, the Company recognizes revenue when it delivers goods at thedesignated location with export customs clearance procedures completed.
(2) Other incomes
Other revenues of the Company denote contractual obligations to be performed at a timepoint/during a specific period of time. For installation services provided by the Company,the Company recognizes the revenue when it has completed the services and receivedcustomers’ acceptance certificate; for repair and maintenance services provided by theCompany, the Company recognizes the revenue when it has completed the services andreceived payments; for patrol inspection services provided by the Company, which areobligations to be performed during a specific period of time, the Company determines theservice performance progress by using the output approach, and recognizes the revenueaccording to the performance progress; for patent license services provided by the Company,the Company recognizes the revenue when the patent license is delivered; for technologydevelopment services provided by the Company, the Company recognizes the revenue whenit has completed the services or when the agreed time point of service acceptance is reached.
(3) Lease incomes
In each period during the lease term, the Company recognizes lease payments as rentalincomes by using the straight-line method/units of production method. The variable leasepayments acquired by the Company that are related to operating leases and not recognized inlease payments are recognized in the profit or loss for the current period when they actuallyoccur.
As the operating income is one of Appotronics Corporation’s KPIs, there may be aninherent risk that the management of Appotronics Corporation (hereinafter referred to as"management”) may recognize the revenue inappropriately to achieve specific objectives orexpectations. Therefore, we identified revenue recognition as a key audit matter.
2. Description of how the key audit matter was addressed in the audit
For revenue recognition, our audit procedures include, inter alia:
(1) Understand the key internal controls related to revenue recognition, evaluate thedesign of those controls, determine whether they are implemented, and test the operationaleffectiveness of the relevant internal controls;
(2) Examine major sales contracts and lease contracts, understand the major provisionsor conditions thereof, and evaluate whether revenue recognition methods are appropriate;
(3) Implement analysis procedures for operating income and gross margin by month,product, customer, etc., to identify whether there are significant or unusual fluctuations andto find out the causes of such fluctuations;
(4) For sales income, sample supporting documents related to revenue recognition,including sales contracts or orders, sales invoices, warehouse receipts, delivery notes,transport information, customer signature forms, export declarations and electronic portsystem information; for lease income, sample supporting documents including, among otherthings, lease contracts, orders, installation orders, unit lease price per hour, and number ofhours consumed; for sales income, sample supporting documents including, among otherthings, sales contracts, customs declaration forms, and bills of lading;
(5) In conjunction with accounts receivable confirmation procedures, send confirmationto major customers to recognize the current incomes on a sample basis;
(6) Conduct the cut-off test on the operating incomes recognized on or after the balancesheet date to evaluate whether the operating incomes are recognized during the appropriateperiod;
(7) Obtain a record of sales returns after the balance sheet date to check if there is anyinstance that conditions for revenue recognition were not met at the balance sheet date;
(8) Check whether information relative to operating income is properly presented in thefinancial statements.
(II) Net realizable value of inventories
1. Description
Details of relevant information are disclosed in V.15 and VII.9 of Section X.
As of December 31, 2021, the carrying amount of inventories of Appotronics amountedto RMB 808,619,692.36, and provisions for decline in value of inventories amounted to RMB38,998,559.36, hence the book value of inventories amounted to RMB 769,621,133.00.
At the balance sheet date, inventories are measured at the lower of cost and net realizablevalue. If the net realizable value is below the cost of inventories, a provision for decline invalue of inventories is made. In view of the purpose of holding inventories, the managementdetermines the estimated selling price of inventories based on historical or actual sellingprices, and the net realizable value of inventories in accordance with the balance of theestimated selling price less the sum of the estimated costs of completion and the estimatedcosts necessary to make the sale and relevant taxes. The amount of inventories is materialand the determination of the net realizable value of inventories involves significantmanagement judgment, therefore, we identified the determination of the net realizable valueof inventories as a key audit matter.
2. Description of how the key audit matter was addressed in the audit
For the net realizable value of inventories, our audit procedures include, inter alia:
(1) Understand the key internal controls related to the net realizable value of inventories,evaluate the design of those controls, determine whether they are implemented, and test theoperational effectiveness of the relevant internal controls;
(2) Review the management’s forecast of the estimated selling price of inventories on asample basis, comparing the estimated selling price with historical data and subsequentsituations, etc.;
(3) Evaluate the appropriateness of the management’s estimates on the estimated costsof completion of inventories and the estimated costs necessary to make the sale and relevanttaxes;
(4) Test the accuracy of the management’s calculation on the net realizable value ofinventories;
(5) Evaluate the reasonableness of the management’s estimates on the net realizablevalue of inventories by checking inventories recognized at the end of the period in terms oflong age, obsolescence, changes in technology or market demand in conjunction withinventory monitoring;
(6) Check whether information relative to the net realizable value of inventories isproperly presented in the financial statements.
IV. Other information
The management is responsible for other information. The other information comprisesthe information included in the annual report, but does not include the financial statementsand our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit or otherwiseappears to be materially misstated.
If, based on the work we have performed, we conclude that there is a materialmisstatement of this other information, we are required to report that fact. We have nothingto report in this regard.
V. Responsibilities of the Management and governance with respect to thefinancial statementsThe management is responsible for the preparation and fair presentation of the financialstatements in accordance with Accounting Standards for Business Enterprises, and designing,implementing and maintaining internal control that is necessary to enable the financialstatements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessingAppotronics’ ability to continue as a going concern, disclosing, as applicable, matters relatedto going concern and using the going concern basis of accounting unless the managementeither intends to liquidate Appotronics or to cease operations, or has no realistic alternativebut to do so.
Those charged with governance of Appotronics (hereinafter referred to as “ThoseCharged with Governance”) are responsible for overseeing Appotronics’ financial reportingprocess.
VI. Responsibilities of Certified Public Accountants with respect to the financialstatements
Our objectives are to obtain reasonable assurance about whether the financial statementsas a whole are free from material misstatement, whether due to fraud or error, and to issuean auditor’s report that includes our opinion solely to you. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with ChinaStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if, individually or inthe aggregate, they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.
As part of an audit in accordance with China Standards on Auditing, we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error, design and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.The risk of not detecting a material misstatement resulting from fraud is higher than thatresulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances.(III) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management.(IV) Conclude on the appropriateness of the management’s use of the going concernbasis of accounting. Meanwhile, based on the audit evidence obtained, whether a materialuncertainty exists related to events or conditions that may cast significant doubt onAppotronics Corporation’s ability to continue as a going concern. If we conclude that amaterial uncertainty exists, we are required by audit standards to draw users’ attention in ourauditor’s report to the related disclosures in the financial statements. If such disclosures areinadequate, we are supposed to express an unqualified opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor’s report. However, future eventsor conditions may cause Appotronics Corporation to cease to continue as a going concern.(V) Evaluate the overall presentation, structure and content of the financial statements,and whether the financial statements represent the underlying transactions and events in amanner that achieves fair presentation.(VI) Obtain sufficient and appropriate audit evidence regarding the financialinformation of the entities or business activities within Appotronics Corporation to expressan opinion on the financial statements. We are responsible for the direction, supervision andperformance of the group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding, among other matters,the planned scope and timing of the audit and significant audit findings, including anysignificant deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence, and communicate with them allrelationships and other matters that may reasonably be thought to bear on our independence,and where applicable, related safeguards.From the matters communicated with those charged with governance, we determinethose matters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about the matter or when,in extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
Pan-China Certified Public Accountants (Special General Partnership) Chinese CertifiedPublic Accountant:
(Partner in Charge)
Hangzhou City, China Chinese Certified Public Accountant:
April 25, 2022
II. Financial statements
Consolidated Balance SheetDecember 31, 2021Prepared by: Appotronics Corporation Limited
In RMB
| Item | Note | December 31, 2021 | December 31, 2020 |
| Current Assets: | |||
| Cash and bank balances | VII. 1 | 957,729,831.15 | 1,037,760,573.27 |
| Balances with clearing agencies | |||
| Placements with banks and other financial institutions | |||
| Held-for-trading financial assets | VII. 2 | 417,200,000.00 | 114,000,000.00 |
| Derivative financial assets | |||
| Notes receivable | VII. 4 | 5,256,603.03 | 3,726,328.91 |
| Accounts receivable | VII. 5 | 403,134,471.87 | 341,660,832.43 |
| Receivables financing | VII. 6 | 244,860.00 | 11,959,000.00 |
| Prepayments | VII. 7 | 98,116,970.83 | 47,447,601.43 |
| Premiums receivable | |||
| Amounts receivable under reinsurance contracts | |||
| Reinsurer’s share of insurance contract reserves | |||
| Other receivables | VII. 8 | 30,472,595.66 | 12,534,062.15 |
| Including: Interest receivable | |||
| Dividend receivable | VII. 8 | 12,623,886.00 | |
| Financial assets purchased under resale agreements | |||
| Inventories | VII. 9 | 769,621,133.00 | 418,812,140.80 |
| Contract assets | VII. 10 | 3,903,859.23 | 3,744,655.50 |
| Assets held for sale | |||
| Non-current assets due within one year | VII. 12 | 3,473,049.18 | |
| Other current assets | VII. 13 | 52,761,820.83 | 13,002,195.46 |
| Total current assets | 2,741,915,194.78 | 2,004,647,389.95 | |
| Non-current Assets: | |||
| Loans and advances | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term accounts receivable | VII. 16 | 5,793,552.74 | 13,196,087.78 |
| Long-term equity investment | VII. 17 | 293,601,085.27 | 262,744,772.48 |
| Investment in other equity instruments | VII. 18 | 7,075,419.38 | 11,975,419.38 |
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | VII. 21 | 470,410,450.18 | 447,571,328.91 |
| Construction in progress | VII. 22 | 148,620,511.35 | 51,576,850.72 |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | VII. 25 | 26,803,910.76 | |
| Intangible assets | VII. 26 | 301,164,605.56 | 320,488,235.60 |
| Development expenditure | |||
| Goodwill | |||
| Long-term prepaid expenses | VII. 29 | 10,126,164.82 | 11,572,346.79 |
| Deferred tax assets | VII. 30 | 80,721,419.29 | 96,132,114.02 |
| Other non-current assets | VII. 31 | 10,998,641.77 | 6,299,781.06 |
| Total non-current assets | 1,355,315,761.12 | 1,221,556,936.74 | |
| Total assets | 4,097,230,955.90 | 3,226,204,326.69 | |
| Current Liabilities: | |||
| Short-term borrowings | VII. 32 | 5,570,878.11 | 88,778,852.86 |
| Loans from the central bank | |||
| Taking from banks and other financial institutions | |||
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | VII. 35 | 134,378,967.61 | 116,822,674.67 |
| Accounts payable | VII. 36 | 419,966,567.27 | 226,494,815.90 |
| Advance from customers | VII. 37 | 130,288,312.62 | 153,258,189.88 |
| Contract liabilities | VII. 38 | 45,541,629.55 | 31,518,312.59 |
| Financial assets sold under repurchase agreements | |||
| Customer deposits and deposits from banks and other financial institutions | |||
| Funds from securities trading agency | |||
| Funds from underwriting securities agency | |||
| Employee benefits payable | VII. 39 | 64,119,087.51 | 46,105,566.15 |
| Taxes payable | VII. 40 | 19,546,190.23 | 19,871,846.94 |
| Other payables | VII. 41 | 54,115,784.80 | 59,848,053.83 |
| Including: Interest payable | |||
| Dividend payable | |||
| Fees and commissions payable | |||
| Amounts payable under reinsurance contracts | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | VII. 43 | 154,785,116.35 | 181,417,412.46 |
| Other current liabilities | VII. 44 | 19,561,104.12 | 3,045,831.07 |
| Total current liabilities | 1,047,873,638.17 | 927,161,556.35 | |
| Non-current Liabilities: | |||
| Insurance contract reserves | |||
| Long-term borrowings | VII. 45 | 368,635,614.64 | 64,845,281.53 |
| Bonds payable | |||
| Where: Preferred shares | |||
| Perpetual bonds | |||
| Leasing liabilities | VII. 47 | 10,789,352.69 | |
| Long-term payables | VII. 48 | 3,262,450.00 | |
| Long-term employee benefits payable | |||
| Estimated liabilities | VII. 50 | 36,428,688.94 | 28,799,354.65 |
| Deferred income | VII. 51 | 10,266,982.08 | 16,723,257.15 |
| Deferred tax liabilities | |||
| Other non-current liabilities | |||
| Total non-current liabilities | 426,120,638.35 | 113,630,343.33 | |
| Total liabilities | 1,473,994,276.52 | 1,040,791,899.68 | |
| Owners’ Equity (Shareholders’ Equity): | |||
| Paid-in capital (or share capital) | VII. 53 | 452,756,901.00 | 452,756,901.00 |
| Other equity instruments | |||
| Where: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserve | VII. 55 | 1,400,605,136.65 | 1,249,020,991.15 |
| Less: Treasury shares | |||
| Other comprehensive income | VII. 57 | -16,840,512.60 | -3,214,291.93 |
| Special reserve | |||
| Surplus reserve | VII. 59 | 56,265,868.31 | 35,242,179.57 |
| General risk reserve | |||
| Undistributed profit | VII. 60 | 545,277,188.08 | 357,793,891.96 |
| Total owners’ (or shareholders’) equity attributable to owners of the parent company | 2,438,064,581.44 | 2,091,599,671.75 | |
| Minority interests | 185,172,097.94 | 93,812,755.26 | |
| Total owners’ (or shareholders’) equity | 2,623,236,679.38 | 2,185,412,427.01 | |
| Total liabilities and owners’ (or shareholders’) equity | 4,097,230,955.90 | 3,226,204,326.69 | |
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the AccountingBody: WANG Yingxia
Balance Sheet of the parent company
December 31, 2021Prepared by: Appotronics Corporation Limited
In RMB
| Item | Note | December 31, 2021 | December 31, 2020 |
| Current Assets: | |||
| Cash and bank balances | 535,787,452.32 | 709,932,686.71 | |
| Held-for-trading financial assets | 417,200,000.00 | 114,000,000.00 | |
| Derivative financial assets | |||
| Notes receivable | 5,036,603.03 | 2,314,628.91 | |
| Accounts receivable | XVII. 1 | 616,216,169.96 | 567,539,506.79 |
| Receivables financing | 244,860.00 | 100,000.00 | |
| Prepayments | 24,555,245.46 | 11,001,439.23 | |
| Other receivables | XVII. 2 | 6,645,181.15 | 71,654,117.57 |
| Including: Interest receivable | |||
| Dividend receivable | |||
| Inventories | 327,484,120.10 | 169,022,971.44 | |
| Contract assets | 3,903,859.23 | 3,720,160.50 | |
| Assets held for sale | |||
| Non-current assets due within one year | 2,688,446.82 | ||
| Other current assets | 1,297,388.01 | ||
| Total current assets | 1,939,761,938.07 | 1,650,582,899.16 | |
| Non-current Assets: | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term accounts receivable | 3,528,917.07 | 13,196,087.78 | |
| Long-term equity investment | XVII. 3 | 440,559,012.12 | 421,648,284.99 |
| Investment in other equity instruments | 7,075,419.38 | 7,075,419.38 | |
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 59,043,066.43 | 57,409,189.33 | |
| Construction in progress | 133,111,026.64 | 37,982,329.74 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 17,152,430.20 | ||
| Intangible assets | 305,569,269.44 | 319,438,893.42 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term prepaid expenses | 4,841,091.62 | 9,562,162.36 | |
| Deferred tax assets | 22,028,444.60 | 6,680,188.67 | |
| Other non-current assets | 6,093,687.23 | 5,411,561.28 | |
| Total non-current assets | 999,002,364.73 | 878,404,116.95 | |
| Total assets | 2,938,764,302.80 | 2,528,987,016.11 | |
| Current Liabilities: | |||
| Short-term borrowings | 11,410,560.27 | ||
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 41,601,830.90 | 32,313,678.21 | |
| Accounts payable | 311,370,715.78 | 210,885,240.65 | |
| Advance from customers | 999,484.03 | 2,688,210.54 | |
| Contract liabilities | 14,130,218.03 | 20,609,190.34 | |
| Employee benefits payable | 41,239,602.09 | 28,514,763.09 | |
| Taxes payable | 11,755,599.27 | 5,830,858.89 | |
| Other payables | 13,006,204.53 | 23,058,804.83 | |
| Including: Interest payable | |||
| Dividend payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 43,166,652.33 | 1,001,024.66 | |
| Other current liabilities | 839,898.70 | 1,918,391.60 | |
| Total current liabilities | 478,110,205.66 | 338,230,723.08 | |
| Non-current Liabilities: | |||
| Long-term borrowings | 54,497,768.01 | 29,029,715.07 | |
| Bonds payable | |||
| Where: Preferred shares | |||
| Perpetual bonds | |||
| Leasing liabilities | 4,445,612.91 | ||
| Long-term payables | 3,262,450.00 | ||
| Long-term employee benefits payable | |||
| Estimated liabilities | 20,275,524.78 | 16,345,891.60 | |
| Deferred income | 9,543,692.89 | 14,450,411.10 | |
| Deferred tax liabilities | |||
| Other non-current liabilities | |||
| Total non-current liabilities | 88,762,598.59 | 63,088,467.77 | |
| Total liabilities | 566,872,804.25 | 401,319,190.85 | |
| Owners’ Equity (Shareholders’ Equity): | |||
| Paid-in capital (or share capital) | 452,756,901.00 | 452,756,901.00 | |
| Other equity instruments | |||
| Where: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserve | 1,410,150,134.25 | 1,351,261,718.84 | |
| Less: Treasury shares | |||
| Other comprehensive income | |||
| Special reserve | |||
| Surplus reserve | 54,988,327.58 | 33,964,638.84 | |
| Undistributed profit | 453,996,135.72 | 289,684,566.58 | |
| Total owners’ (or shareholders’) equity | 2,371,891,498.55 | 2,127,667,825.26 | |
| Total liabilities and owners’ (or shareholders’) equity | 2,938,764,302.80 | 2,528,987,016.11 | |
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the AccountingBody: WANG Yingxia
Consolidated Income Statement
January to December 2021
In RMB
| Item | Note | 2021 | 2020 |
| I. Total operating income | 2,498,228,401.78 | 1,948,884,176.83 | |
| Where: Operating income | VII. 61 | 2,498,228,401.78 | 1,948,884,176.83 |
| Interest income | |||
| Premiums earned | |||
| Fee and commission income | |||
| II. Total operating costs | 2,338,656,541.27 | 1,882,807,642.88 | |
| Where: Operating costs | VII. 61 | 1,651,089,557.25 | 1,393,075,043.93 |
| Interest expenses | |||
| Fee and commission expenses | |||
| Surrenders | |||
| Claims and policyholder benefits (net of amounts recoverable from reinsurers) | |||
| Net withdrawal of insurance contract reserves | |||
| Insurance policyholder dividends | |||
| Expenses for reinsurance accepted | |||
| Tax and surcharge | VII. 62 | 8,776,858.79 | 6,718,744.79 |
| Selling expenses | VII. 63 | 252,854,103.31 | 133,588,234.60 |
| Administrative expenses | VII. 64 | 187,933,417.27 | 135,757,276.26 |
| R&D expenses | VII. 65 | 236,702,224.29 | 204,443,369.10 |
| Financial expenses | VII. 66 | 1,300,380.36 | 9,224,974.20 |
| Where: Interest expense | 17,079,723.61 | 20,066,451.02 | |
| Interest income | 17,645,299.09 | 10,322,478.28 | |
| Add: Other income | VII. 67 | 46,147,218.18 | 45,255,000.90 |
| Investment income (loss is indicated by “-”) | VII. 68 | 32,633,507.12 | 17,945,571.02 |
| Where: Income from investments in associates and joint ventures | 22,856,529.68 | -679,282.94 | |
| Gains from derecognition of financial assets at amortized assets | |||
| Foreign exchange gains (loss is indicated by “-”) | |||
| Gains from net exposure hedges (loss is indicated by “-”) | |||
| Gains from changes in fair values (loss is indicated by “-”) | VII. 70 | 40,127,764.00 | |
| Losses of credit impairment (loss is indicated by “-”) | VII. 71 | -6,809,291.29 | -9,121,278.95 |
| Impairment losses of assets (loss is indicated by “-”) | VII. 72 | -36,946,167.95 | -11,590,694.43 |
| Gains from disposal of assets (loss is indicated by “-”) | VII. 73 | 2,967,788.29 | 281,040.26 |
| III. Operating profit (loss is indicated by “-”) | 237,692,678.86 | 108,846,172.75 | |
| Add: Non-operating income | VII. 74 | 52,628,162.08 | 4,638,435.10 |
| Less: Non-operating expenses | VII. 75 | 1,793,084.65 | 2,063,172.96 |
| IV. Total profits (total losses are indicated by “-”) | 288,527,756.29 | 111,421,434.89 | |
| Less: Income tax expenses | VII. 76 | 66,992,939.15 | 24,764,236.32 |
| V. Net profits (net losses are indicated by “-”) | 221,534,817.14 | 86,657,198.57 | |
| (I) Categorized by the continuity of operation | |||
| 1. Net profits from continuing operations (net losses are indicated by "-") | 221,534,817.14 | 86,657,198.57 | |
| 2. Net profits from discontinued operations (net losses are indicated by “-”) | |||
| (II) Categorized by the ownership | |||
| 1. Net profits attributable to shareholders of the parent company (net losses are indicated by "-") | 233,364,344.09 | 113,847,873.06 | |
| 2. Profits or losses attributable to minority shareholders (net losses are indicated by “-”) | -11,829,526.95 | -27,190,674.49 | |
| VI. Other comprehensive income, net of tax | -13,577,010.78 | -6,496,909.69 | |
| (I) Other comprehensive income that can be attributable to owners of the parent company, net of tax | -13,626,220.67 | -6,501,355.78 | |
| 1. Other comprehensive income that cannot be reclassified subsequently to profit or loss | -4,900,000.00 | ||
| (1) Changes from remeasurement of defined benefit plans | |||
| (2) Other comprehensive income that cannot be reclassified to profit or loss under the equity method | |||
| (3) Changes in fair value of investments in other equity instruments | -4,900,000.00 | ||
| (4) Changes in fair value of enterprises’ own credit risks | |||
| 2. Other comprehensive income that will be reclassified to profit or loss | -8,726,220.67 | -6,501,355.78 | |
| (1) Other comprehensive income that will be reclassified to profit or loss under the equity method | -366,814.82 | ||
| (2) Changes in fair value of other debt investments | |||
| (3) Amount of financial assets reclassified to other comprehensive income | |||
| (4) Provision for credit impairment of other debt investments | |||
| (5) Reserve for cash flow hedges | |||
| (6) Exchange differences on translation of financial statements denominated in foreign currencies | -8,359,405.85 | -6,501,355.78 | |
| (7) Others | |||
| (II) Other comprehensive income that can be attributable to minority shareholders, net of tax | 49,209.89 | 4,446.09 | |
| VII. Total comprehensive income | 207,957,806.36 | 80,160,288.88 | |
| (I) Total comprehensive income that can be attributable to owners of the parent company | 219,738,123.42 | 107,346,517.28 | |
| (II) Total comprehensive income that can be attributable to minority shareholders | -11,780,317.06 | -27,186,228.40 | |
| VIII. Earnings per share: | |||
| (I) Basic earnings per share (RMB/share) | 0.52 | 0.25 | |
| (II) Diluted earnings per share (RMB/share) | 0.51 | 0.25 | |
In the event of business combinations involving enterprises under common control, the net profits realizedprior to the combination by the party being absorbed is: RMB 0, and the net profits realized in the lastperiod by the party being absorbed is: RMB 0.Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the AccountingBody: WANG Yingxia
Income Statement of the parent company
January to December 2021
In RMB
| Item | Note | 2021 | 2020 |
| I. Operating income | XVII. 4 | 1,445,208,597.94 | 1,064,149,969.51 |
| Less: Operating costs | XVII. 4 | 951,761,428.41 | 720,452,860.84 |
| Tax and surcharge | 4,824,423.22 | 4,809,443.68 | |
| Selling expenses | 81,267,047.72 | 68,169,938.33 | |
| Administrative expenses | 114,480,252.18 | 94,065,391.84 | |
| R&D expenses | 128,807,240.92 | 104,873,635.92 | |
| Financial expenses | -21,476,404.98 | -16,982,053.25 | |
| Where: Interest expense | 2,244,930.36 | 432,518.40 | |
| Interest income | 24,781,253.41 | 16,041,306.76 | |
| Add: Other income | 27,780,796.53 | 34,560,094.28 | |
| Investment income (loss is indicated by “-”) | XVII. 5 | 27,249,704.79 | 18,624,853.96 |
| Where: Income from investments in associates and joint ventures | |||
| Gains from derecognition of financial assets at amortized assets | |||
| Gains from net exposure hedges (loss is indicated by “-”) | |||
| Gains from changes in fair values (loss is indicated by “-”) | 2,200,000.00 | ||
| Losses of credit impairment (loss is indicated by “-”) | -4,798,060.82 | -627,070.09 | |
| Impairment losses of assets (loss is indicated by “-”) | -21,377,940.23 | -7,565,039.37 | |
| Gains from disposal of assets (loss is indicated by “-”) | 1,318.53 |
| II. Operating profit (loss is indicated by “-”) | 216,599,110.74 | 133,754,909.46 | |
| Add: Non-operating income | 2,396,233.70 | 4,409,022.52 | |
| Less: Non-operating expenses | 973,929.02 | 1,228,453.52 | |
| III. Total profits (total losses are indicated by “-”) | 218,021,415.42 | 136,935,478.46 | |
| Less: Income tax expenses | 8,133,765.70 | 12,515,924.03 | |
| IV. Net profits (net losses are indicated by “-”) | 209,887,649.72 | 124,419,554.43 | |
| (I) Net profits from continuing operations (net losses are indicated by “-”) | 209,887,649.72 | 124,419,554.43 | |
| (II) Net profits from discontinued operations (net losses are indicated by “-”) | |||
| V. Other comprehensive income, net of tax | |||
| (I) Other comprehensive income that cannot be reclassified subsequently to profit or loss | |||
| 1. Changes from remeasurement of defined benefit plans | |||
| 2. Other comprehensive income that cannot be reclassified to profit or loss under the equity method | |||
| 3. Changes in fair value of investments in other equity instruments | |||
| 4. Changes in fair value of enterprises’ own credit risks | |||
| (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 fair value of other debt investments | |||
| 3. Amount of financial assets reclassified to other comprehensive income | |||
| 4. Provision for credit impairment of other debt investments | |||
| 5. Reserve for cash flow hedges | |||
| 6. Exchange differences on translation of financial statements denominated in foreign currencies | |||
| 7. Others | |||
| VI. Total comprehensive income | 209,887,649.72 | 124,419,554.43 | |
| VII. Earnings per share: | |||
| (I) Basic earnings per share (RMB/share) | |||
| (II) Diluted earnings per share (RMB/share) | |||
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the AccountingBody: WANG Yingxia
Consolidated Cash Flow StatementJanuary to December 2021
In RMB
| Item | Note | 2021 | 2020 |
| I. Cash Flows from Operating Activities: | |||
| Cash receipts from the sale of goods and the rendering of services | 2,750,740,564.95 | 1,974,492,309.02 | |
| Net increase in customer deposits and deposits from banks and other financial institutions | |||
| Net increase in loans from the central bank | |||
| Net increase in taking from banks and other financial institutions | |||
| Cash receipts from premiums under direct insurance contracts | |||
| Net cash receipts from reinsurance business | |||
| Net cash receipts from policyholders’ deposits and investment contract liabilities | |||
| Cash receipts from interest, fees and commissions | |||
| Net increase in taking from banks | |||
| Net increase in financial assets sold under repurchase arrangements | |||
| Net cash received from securities trading agencies | |||
| Receipts of tax refunds | 8,006,027.05 | 6,524,647.54 | |
| Other cash receipts relating to operating activities | VII. 78(1) | 184,950,300.13 | 140,364,333.47 |
| Subtotal of cash inflows from operating activities | 2,943,696,892.13 | 2,121,381,290.03 | |
| Cash payments for goods purchased and services received | 2,086,007,277.39 | 1,450,758,815.22 | |
| Net increase in loans and advances to customers | |||
| Net increase in balance with the central bank and due from banks and other financial institutions | |||
| Cash payments for claims and policyholders’ benefits under direct insurance contracts | |||
| Net increase in placements with banks and other financial institutions | |||
| Cash payments for interest, fees and commissions | |||
| Cash payments for insurance policyholder dividends | |||
| Cash payments to and on behalf of employees | 363,360,992.08 | 294,069,230.11 | |
| Payments of various types of taxes | 82,594,392.29 | 79,174,713.78 | |
| Other cash payments relating to operating activities | VII. 78(2) | 353,397,003.53 | 244,988,100.50 |
| Subtotal of cash outflows from operating activities | 2,885,359,665.29 | 2,068,990,859.61 | |
| Net cash flow from operating activities | 58,337,226.84 | 52,390,430.42 | |
| II. Cash Flows from Investing Activities: | |||
| Cash receipts from disposals and recovery of investments | 2,073,056,003.00 | 2,704,000,000.00 | |
| Cash receipts from investment income | 9,785,727.49 | 18,624,853.96 | |
| Net cash receipts from disposals of fixed assets, intangible assets and other long-term assets | 3,265,966.25 | 1,365,554.96 | |
| Net cash receipts from disposals of subsidiaries and other business units | |||
| Other cash receipts relating to investing activities | |||
| Subtotal of cash inflows from investing activities | 2,086,107,696.74 | 2,723,990,408.92 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 123,016,450.20 | 66,273,509.36 | |
| Cash payments to acquire investments | 2,396,564,750.05 | 2,436,196,580.78 | |
| Net increase in pledged loans receivables | |||
| Net cash payments for acquisitions of subsidiaries and other business units | 11,432,903.47 | 15,614,062.32 | |
| Other cash payments relating to investing activities | |||
| Subtotal of cash outflows from investing activities | 2,531,014,103.72 | 2,518,084,152.46 | |
| Net cash flows from investment activities | -444,906,406.98 | 205,906,256.46 | |
| III. Cash Flows from Financing Activities: | |||
| Cash receipts from capital contributions | 225,131,579.00 | 20,953,388.25 | |
| Where: Cash receipts from capital contributions from minority shareholders of subsidiaries | 225,131,579.00 | 20,953,388.25 | |
| Cash receipts from borrowings | 486,480,176.26 | 205,991,111.29 | |
| Other cash receipts relating to financing activities | VII. 78(5) | 19,320,000.00 | |
| Subtotal of cash inflows from financing activities | 711,611,755.26 | 246,264,499.54 | |
| Cash repayments of borrowings | 309,332,017.81 | 290,953,213.70 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 59,438,696.90 | 54,437,838.70 | |
| Where: Payments for distribution of dividends or profits to minority shareholders of subsidiaries | 18,400,000.00 | ||
| Other cash payments relating to financing activities | VII. 78(6) | 47,271,031.50 | |
| Subtotal of cash outflows from financing activities | 416,041,746.21 | 345,391,052.40 | |
| Net cash flows from financing activities | 295,570,009.05 | -99,126,552.86 | |
| IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | -1,330,751.62 | -5,434,532.44 | |
| V. Net Increase in Cash and Cash Equivalents | -92,329,922.71 | 153,735,601.58 | |
| Add: Opening balance of cash and cash equivalents | 983,525,089.44 | 829,789,487.86 | |
| VI. Closing Balance of Cash and Cash Equivalents | 891,195,166.73 | 983,525,089.44 |
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the AccountingBody: WANG Yingxia
Cash Flow Statement of the parent company
January to December 2021
In RMB
| Item | Note | 2021 | 2020 |
| I. Cash Flows from Operating Activities: | |||
| Cash receipts from the sale of goods and the rendering of services | 1,537,029,483.55 | 919,034,315.48 | |
| Receipts of tax refunds | 1,992,222.29 | 3,108,523.77 | |
| Other cash receipts relating to operating activities | 51,349,254.59 | 125,185,112.12 | |
| Subtotal of cash inflows from operating activities | 1,590,370,960.43 | 1,047,327,951.37 | |
| Cash payments for goods purchased and services received | 1,086,842,696.51 | 776,294,426.96 | |
| Cash payments to and on behalf of employees | 216,225,456.23 | 175,144,803.35 | |
| Payments of various types of taxes | 45,905,948.64 | 28,453,770.47 | |
| Other cash payments relating to operating activities | 129,883,242.51 | 120,311,024.70 | |
| Subtotal of cash outflows from operating activities | 1,478,857,343.89 | 1,100,204,025.48 | |
| Net cash flow from operating activities | 111,513,616.54 | -52,876,074.11 | |
| II. Cash Flows from Investing Activities: | |||
| Cash receipts from disposals and recovery of investments | 1,650,716,923.79 | 2,704,000,000.00 | |
| Cash receipts from investment income | 21,200,960.36 | 18,624,853.97 | |
| Net cash receipts from disposals of fixed assets, intangible assets and other long-term assets | 844,985.38 | ||
| Net cash receipts from disposals of subsidiaries and other business units | |||
| Other cash receipts relating to investing activities | 141,582,498.60 | 71,725,375.54 | |
| Subtotal of cash inflows from investing activities | 1,813,500,382.75 | 2,795,195,214.89 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 94,427,931.02 | 40,725,074.65 | |
| Cash payments to acquire investments | 1,962,997,653.52 | 2,464,734,756.73 | |
| Net cash payments for acquisitions of subsidiaries and other business units | |||
| Other cash payments relating to investing activities | 45,139,057.42 | 75,345,631.45 | |
| Subtotal of cash outflows from investing activities | 2,102,564,641.96 | 2,580,805,462.83 | |
| Net cash flows from investment activities | -289,064,259.21 | 214,389,752.06 | |
| III. Cash Flows from Financing Activities: | |||
| Cash receipts from capital contributions | 20,953,388.25 | ||
| Cash receipts from borrowings | 54,430,844.66 | 82,259,570.15 | |
| Other cash receipts relating to financing activities | |||
| Subtotal of cash inflows from financing activities | 54,430,844.66 | 103,212,958.40 | |
| Cash repayments of borrowings | 12,511,648.92 | 50,000,000.00 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 26,734,065.79 | 34,374,706.92 | |
| Other cash payments relating to financing activities | 21,027,248.92 | 39,403,824.29 | |
| Subtotal of cash outflows from financing activities | 60,272,963.63 | 123,778,531.21 | |
| Net cash flows from financing activities | -5,842,118.97 | -20,565,572.81 | |
| IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | -11,728.85 | 1,031,900.06 | |
| V. Net Increase in Cash and Cash Equivalents | -183,404,490.49 | 141,980,005.20 | |
| Add: Opening balance of cash and cash equivalents | 666,628,105.82 | 524,648,100.62 | |
| VI. Closing Balance of Cash and Cash Equivalents | 483,223,615.33 | 666,628,105.82 |
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the AccountingBody: WANG Yingxia
Consolidated Statement of Changes in Owners’ Equity
January to December 2021
In RMB
| Item | 2021 | ||||||||||||||
| Equity attributable to owners of the parent company | Minority interests | Total owner’s equity | |||||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Closing balance of last year | 452,756,901.00 | 1,249,020,991.15 | -3,214,291.93 | 35,242,179.57 | 357,793,891.96 | 2,091,599,671.75 | 93,812,755.26 | 2,185,412,427.01 | |||||||
| Add: Changes in accounting policies | 34,923.77 | 9,346.56 | 44,270.33 | -11,248.64 | 33,021.69 | ||||||||||
| Corrections of prior period errors | |||||||||||||||
| Business combination involving enterprises under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the current year | 452,756,901.00 | 1,249,020,991.15 | -3,214,291.93 | 35,277,103.34 | 357,803,238.52 | 2,091,643,942.08 | 93,801,506.62 | 2,185,445,448.70 | |||||||
| III. Changes for the year (decrease is indicated by “-”) | 151,584,145.50 | -13,626,220.67 | 20,988,764.97 | 187,473,949.56 | 346,420,639.36 | 91,370,591.32 | 437,791,230.68 | ||||||||
| (I) Total comprehensive income | -13,626,220.67 | 233,364,344.09 | 219,738,123.42 | -11,780,317.06 | 207,957,806.36 | ||||||||||
| (II) Owners’ contributions and reduction in capital | 151,584,145.50 | 151,584,145.50 | 121,550,908.38 | 273,135,053.88 | |||||||||||
| 1. Ordinary shares contributed by owners | |||||||||||||||
| 2. Capital contribution from holders of other equity instruments | |||||||||||||||
| 3. Share-based payment recognized in | 58,961,897.75 | 58,961,897.75 | 11,541,574.13 | 70,503,471.88 |
| owners’ equity | |||||||||||||||
| 4. Others | 92,622,247.75 | 92,622,247.75 | 110,009,334.25 | 202,631,582.00 | |||||||||||
| (III) Profit distribution | 20,988,764.97 | -45,890,394.53 | -24,901,629.56 | -18,400,000.00 | -43,301,629.56 | ||||||||||
| 1. Transfer to surplus reserve | 20,988,764.97 | -20,988,764.97 | |||||||||||||
| 2. Transfer to general reserve | |||||||||||||||
| 3. Distributions to owners (or shareholders) | -24,901,629.56 | -24,901,629.56 | -18,400,000.00 | -43,301,629.56 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Transfers within owners’ equity | |||||||||||||||
| 1. Capitalization of capital reserve | |||||||||||||||
| 2. Capitalization of surplus reserve | |||||||||||||||
| 3. Loss offset by surplus reserve |
| 4. Retained earnings carried forward from changes in defined benefit plans | |||||||||||||||
| 5. Retained earnings carried forward from other comprehensive income | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Transfer to special reserve in the period | |||||||||||||||
| 2. Amount utilized in the period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Closing balance of the current year | 452,756,901.00 | 1,400,605,136.65 | -16,840,512.60 | 56,265,868.31 | 545,277,188.08 | 2,438,064,581.44 | 185,172,097.94 | 2,623,236,679.38 |
| Item | 2020 |
| Equity attributable to owners of the parent company | Minority interests | Total owner’s equity | |||||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Closing balance of last year | 451,554,411.00 | 1,207,942,318.37 | 3,287,063.85 | 22,800,224.13 | 288,975,820.29 | 1,974,559,837.64 | 149,649,306.18 | 2,124,209,143.82 | |||||||
| Add: Changes in accounting policies | 1,278,734.88 | 1,278,734.88 | -646,507.57 | 632,227.31 | |||||||||||
| Corrections of prior period errors | |||||||||||||||
| Business combination involving enterprises under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the current year | 451,554,411.00 | 1,207,942,318.37 | 3,287,063.85 | 22,800,224.13 | 290,254,555.17 | 1,975,838,572.52 | 149,002,798.61 | 2,124,841,371.13 | |||||||
| III. Changes for the year | 1,202,490.00 | 41,078,672.78 | -6,501,355.78 | 12,441,955.44 | 67,539,336.79 | 115,761,099.23 | -55,190,043.35 | 60,571,055.88 | |||||||
| (decrease is indicated by “-”) | |||||||||||||||
| (I) Total comprehensive income | -6,501,355.78 | 113,847,873.06 | 107,346,517.28 | -27,186,228.40 | 80,160,288.88 | ||||||||||
| (II) Owners’ contributions and reduction in capital | 1,202,490.00 | 41,078,672.78 | 42,281,162.78 | -28,003,814.95 | 14,277,347.83 | ||||||||||
| 1. Ordinary shares contributed by owners | 1,202,490.00 | 19,750,898.25 | 20,953,388.25 | 20,953,388.25 | |||||||||||
| 2. Capital contribution from holders of other equity instruments | |||||||||||||||
| 3. Share-based payment recognized in owners’ equity | 18,783,763.38 | 18,783,763.38 | 1,787,189.38 | 20,570,952.76 | |||||||||||
| 4. Others | 2,544,011.15 | 2,544,011.15 | -29,791,004.33 | -27,246,993.18 | |||||||||||
| (III) Profit distribution | 12,441,955.44 | -46,308,536.27 | -33,866,580.83 | -33,866,580.83 |
| 1. Transfer to surplus reserve | 12,441,955.44 | -12,441,955.44 | |||||||||||||
| 2. Transfer to general reserve | |||||||||||||||
| 3. Distributions to owners (or shareholders) | -33,866,580.83 | -33,866,580.83 | -33,866,580.83 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Transfers within owners’ equity | |||||||||||||||
| 1. Capitalization of capital reserve | |||||||||||||||
| 2. Capitalization of surplus reserve | |||||||||||||||
| 3. Loss offset by surplus reserve | |||||||||||||||
| 4. Retained earnings carried forward from changes in defined |
| benefit plans | |||||||||||||||
| 5. Retained earnings carried forward from other comprehensive income | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Transfer to special reserve in the period | |||||||||||||||
| 2. Amount utilized in the period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Closing balance of the current year | 452,756,901.00 | 1,249,020,991.15 | -3,214,291.93 | 35,242,179.57 | 357,793,891.96 | 2,091,599,671.75 | 93,812,755.26 | 2,185,412,427.01 |
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the Accounting Body: WANG Yingxia
Statement of Changes in Owners’ Equity of the parent company
January to December 2021
In RMB
| Item | 2021 | ||||||||||
| Paid-in capital (or | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehen | Special reserve | Surplus reserve | Undistributed profit | Total owner’s equity | |||
| Preferred shares | Perpetual bonds | Others | |||||||||
| share capital) | sive income | ||||||||||
| I. Closing balance of last year | 452,756,901.00 | 1,351,261,718.84 | 33,964,638.84 | 289,684,566.58 | 2,127,667,825.26 | ||||||
| Add: Changes in accounting policies | 34,923.77 | 314,313.95 | 349,237.72 | ||||||||
| Corrections of prior period errors | |||||||||||
| Others | |||||||||||
| II. Opening balance of the current year | 452,756,901.00 | 1,351,261,718.84 | 33,999,562.61 | 289,998,880.53 | 2,128,017,062.98 | ||||||
| III. Changes for the year (decrease is indicated by “-”) | 58,888,415.41 | 20,988,764.97 | 163,997,255.19 | 243,874,435.57 | |||||||
| (I) Total comprehensive income | 209,887,649.72 | 209,887,649.72 | |||||||||
| (II) Owners’ contributions and reduction in capital | 58,888,415.41 | 58,888,415.41 | |||||||||
| 1. Ordinary shares contributed by owners | |||||||||||
| 2. Capital contribution from holders of other equity instruments | |||||||||||
| 3. Share-based payment recognized in owners’ equity | 58,888,415.41 | 58,888,415.41 | |||||||||
| 4. Others | |||||||||||
| (III) Profit distribution | 20,988,764.97 | -45,890,394.53 | -24,901,629.56 | ||||||||
| 1. Transfer to surplus reserve | 20,988,764.97 | -20,988,764.97 | |||||||||
| 2. Distributions to owners (or shareholders) | -24,901,629.56 | -24,901,629.56 | |||||||||
| 3. Others | |||||||||||
| (IV) Transfers within owners’ equity |
| 1. Capitalization of capital reserve | |||||||||||
| 2. Capitalization of surplus reserve | |||||||||||
| 3. Loss offset by surplus reserve | |||||||||||
| 4. Retained earnings carried forward from changes in defined benefit plans | |||||||||||
| 5. Retained earnings carried forward from other comprehensive income | |||||||||||
| 6. Others | |||||||||||
| (V) Special reserve | |||||||||||
| 1. Transfer to special reserve in the period | |||||||||||
| 2. Amount utilized in the period | |||||||||||
| (VI) Others | |||||||||||
| IV. Closing balance of the current year | 452,756,901.00 | 1,410,150,134.25 | 54,988,327.58 | 453,996,135.72 | 2,371,891,498.55 |
| Item | 2020 | ||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Total owner’s equity | |||
| Preferred shares | Perpetual bonds | Others | |||||||||
| I. Closing balance of last year | 451,554,411.00 | 1,310,939,867.82 | 21,522,683.40 | 211,573,548.42 | 1,995,590,510.64 | ||||||
| Add: Changes in accounting policies | |||||||||||
| Corrections of prior period errors | |||||||||||
| Others | |||||||||||
| II. Opening balance of the current year | 451,554,411.00 | 1,310,939,867.82 | 21,522,683.40 | 211,573,548.42 | 1,995,590,510.64 | ||||||
| III. Changes for the year (decrease is indicated by “-”) | 1,202,490.00 | 40,321,851.02 | 12,441,955.44 | 78,111,018.16 | 132,077,314.62 | ||||||
| (I) Total comprehensive income | 124,419,554.43 | 124,419,554.43 | |||||||||
| (II) Owners’ contributions and reduction in capital | 1,202,490.00 | 40,321,851.02 | 41,524,341.02 | ||||||||
| 1. Ordinary shares contributed by owners | 1,202,490.00 | 19,750,898.25 | 20,953,388.25 | ||||||||
| 2. Capital contribution from holders of other equity instruments | |||||||||||
| 3. Share-based payment recognized in owners’ equity | 20,570,952.77 | 20,570,952.77 | |||||||||
| 4. Others | |||||||||||
| (III) Profit distribution | 12,441,955.44 | -46,308,536.27 | -33,866,580.83 | ||||||||
| 1. Transfer to surplus reserve | 12,441,955.44 | -12,441,955.44 | |||||||||
| 2. Distributions to owners (or shareholders) | -33,866,580.83 | -33,866,580.83 | |||||||||
| 3. Others | |||||||||||
| (IV) Transfers within owners’ equity | |||||||||||
| 1. Capitalization of capital reserve | |||||||||||
| 2. Capitalization of surplus reserve | |||||||||||
| 3. Loss offset by surplus reserve | |||||||||||
| 4. Retained earnings carried forward from changes in defined benefit plans | |||||||||||
| 5. Retained earnings carried forward from other comprehensive income | |||||||||||
| 6. Others | |||||||||||
| (V) Special reserve |
| 1. Transfer to special reserve in the period | |||||||||||
| 2. Amount utilized in the period | |||||||||||
| (VI) Others | |||||||||||
| IV. Closing balance of the current year | 452,756,901.00 | 1,351,261,718.84 | 33,964,638.84 | 289,684,566.58 | 2,127,667,825.26 |
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the Accounting Body: WANG Yingxia
III. Company profile
1. Profile
√ Applicable □ N/A
Appotronics Corporation Limited (hereinafter referred to as “Company” or “the Company”),formally named as Shenzhen Appotronics Optoelectronics Technology Inc. (hereinafter referred to as“Appotronics Inc.”), was jointly invested and established by LI Yi and XU Yanzheng and registered inNanshan Branch of Market Supervision and Regulation Bureau of Shenzhen on October 24, 2006 with thelegal person business license numbered in 4403011245637. Upon establishment, the registered capital ofAppotronics Inc. was RMB 100,000. On May 31, 2018, the benchmark date, Appotronics Inc was changedinto a company limited by shares entirety. On July 20, 2018, the Company completed the registration inNanshan Branch of Market Supervision and Regulation Bureau of Shenzhen and headquartered inShenzhen City, Guangdong Province. The Company holds the business license bearing the credibility code91440300795413991N. The Company’s registered capital is RMB 452,756,901.00 divided into452,756,901 shares (RMB 1 Yuan per share), including 166,736,766 outstanding shares subject to salerestrictions and 286,020,135 outstanding shares not subject to sale restrictions. The Company’s shareswere listed for trading on Shanghai Stock Exchange on July 22, 2019.The Company can be classified into the computer, communication and other electronic equipmentmanufacturing industry. It mainly engages in research and development, production, sales and leasing oflaser display core devices and whole machines, and can provide customers with technical research anddevelopment services and customized products. Its products mainly include laser business and educationprojectors, smart mini projectors, laser TV, laser large venue projector and laser digital cinema projector.The financial statements have been approved by the Company’s 11
thmeeting of the second Board ofDirectors on April 25, 2022 for public disclosure.
2. Scope of consolidated financial statements
√ Applicable □ N/A
The Company has included 26 subsidiaries into the consolidated financial statements for the currentperiod, including Beijing Orient Appotronics Technology Co., Ltd., Shenzhen Appotronics Laser DisplayTechnology Co., Ltd., Qingda Appotronics (Xiamen) Technology Co., Ltd., Shenzhen Appotronics LaserTechnology Co., Ltd., Appotronics Hong Kong Limited, Shenzhen Appotronics Software Technology Co.,Ltd., Shenzhen City Appotronics Xiaoming Technology Co., Ltd., Fabulus Display (Beijing) Co., Ltd.,
Appotronics USA, Inc., Fabulus Technology Hong Kong Limited, JoveAI Limited, JoveAI Innovation,Inc., Appotronics Technology (Changzhou) Co., Ltd., Shenzhen Appotronics Display Device Co., Ltd.,WEMAX LLC, JoveAI Asia Company Limited, Tianjin Bonian Film Partnership (LP), Fengmi (Beijing)Technology Co., Ltd., Shenzhen Appotronics Home Line Technology Co., Ltd., Technology Inc.,(Chongqing) Innovative Technology Co., Ltd., Limited, Chongqing Guangbo Ecommerce Co., Ltd.,Chongqing Ewei Ecommerce Co., Ltd., Shenzhen Orange Juice Energy Technology Co., Ltd.,CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd., and other subsidiaries. Refer to descriptionsin VIII and IX of Section X for details.
IV. Basis of preparation of financial statements
1. Basis of preparation
The Company’s financial statements are prepared on a going-concern basis.
2. Going concern
√ Applicable □ N/A
The Company has detected no events or circumstances that may cast significant doubt upon its ability tocontinue as a going concern within 12 months from the reporting period.
V. Significant accounting policies and accounting estimatesSpecific accounting policies and accounting estimates:
√ Applicable □ N/A
Important note: The Company establishes the specific accounting policies and makes the specificaccounting estimates with respect to the impairment of financial instruments, depreciation of fixed assets,depreciation of right-of-use assets, amortization of intangible assets, recognition of revenues and othertransactions and events according to the actual production and operation characteristics of the Company.
1. Statement of compliance with the Accounting Standards for Business EnterprisesThe financial statements prepared by the Company conform to the requirements of the AccountingStandards for Business Enterprises and truly and completely reflect the Company’s financial position,operating results, changes in shareholders’ equity, cash flows and other related information.
2. Accounting period
The Company’s accounting year is from January 1 to December 31 of each calendar year.
3. Operating cycle
√ Applicable □ N/A
The Company has a relatively short operating cycle, and determines the liquidity of assets and liabilitieson the basis of 12 months.
4. Functional currency
The Company adopts RMB as its functional currency. The following overseas subsidiaries operateoutside of China, and adopt the currency of their primary economic environment as the functional currency:
Appotronics Hong Kong Limited, Appotronics USA, Inc., Fabulus Technology Hong Kong Limited,JoveAI Limited, JoveAI Innovation, Inc., WEMAX LLC, JoveAI Asia Company Limited, TechnologyInc., Limited, etc.
5. The accounting treatment of business combinations involving entities under common control
and not involving entities under common control
√ Applicable □ N/A
1. Accounting method for business combinations involving enterprises under common control
Assets and liabilities acquired from a business combination by the Company are measured at thecarrying amounts of the assets and liabilities of the acquiree in the consolidated financial statements of theultimate controller at the date of combination. The Company made adjustment to capital reservesaccording to the differences between the shares in the owners’ equity of the combined party on theconsolidated financial statements of the ultimate controlling party and the book value of paid combinationconsiderations or the face value of issued shares; In case the capital reserve is not sufficient to absorb thedifference, the remaining balance is adjusted against the retained earnings.
2. Accounting method for business combinations not involving enterprises under common control
Where the cost of combination exceeds the Company’s interest in the fair value of the acquiree’sidentifiable net assets, the difference is recognized as goodwill. Where the cost of combination is less thanthe Company’s interest in the fair value of the acquiree’s identifiable net assets, the Company firstlyreassesses the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities and themeasurement of the cost of combination. If after that reassessment, the cost of combination is still lessthan the Company’s interest in the fair value of the acquiree’s identifiable net assets, the acquirerrecognizes the remaining difference immediately in profit or loss for the current period.
6. Method of preparation of consolidated financial statements
√ Applicable □ N/A
The parent company includes all of its controlled subsidiaries in its consolidated financial statements.The consolidated financial statements are prepared by the parent company in accordance with the
Accounting Standards for Business Enterprises No. 33 -- Consolidated Financial Statements, on the basisof the respective financial statements of the parent company and its subsidiaries, by reference to otherrelevant data.
7. Classification of joint arrangements and accounting treatment of joint operations
√ Applicable □ N/A
1. Joint arrangements are classified into joint operations and joint ventures.
2. When the Company is a party to a joint operation, the Company recognizes the following itemsrelating to its interest in the joint operation:
(1) the assets individually held by the Company, and the Company’s share of the assets held jointly;
(2) the liabilities incurred individually by the Company, and the Company’s share of the liabilitiesincurred jointly;
(3) the Company’s revenue from the sale of its share of output of the joint operation;
(4) the Company’s share of revenue from the sale of assets by the joint operation; and
(5) the expenses incurred individually by the Company, and the Company’s share of the expensesincurred jointly.
8. Recognition of cash and cash equivalents
Cash equivalents are the Group’s short-term (generally due within 3 months from the acquisition date),highly liquid investments that are readily convertible to known amounts of cash and which are subject toan insignificant risk of changes in value.
9. Translation of transactions and financial statements denominated in foreign currencies
√ Applicable □ N/A
1. Transactions denominated in foreign currencies
A foreign currency transaction is recorded in RMB, on initial recognition, by applying the spotexchange rate on the date of the transaction. At the balance sheet date, foreign currency monetary itemsare translated into RMB using the spot exchange rates at the balance sheet date. Exchange differencesarising from such translations are recognized in profit or loss for the current period, except for thoseattributable to foreign currency borrowings that have been taken out specifically for the acquisition orconstruction of qualifying assets and accrued interest. Non-monetary items denominated in foreigncurrencies that are measured at historical cost are translated using the foreign exchange rates ruling at the
transaction dates, without adjusting the amounts in RMB. Non-monetary items denominated in foreigncurrencies that are measured at fair value are translated using the foreign exchange rates prevailing at thedates when the fair value was determined, with exchange differences arising from such translationsrecognized in profit or loss for the current period or other comprehensive income.
2. Translation of financial statements denominated in foreign currencies
Asset and liability items on the balance sheet are translated at the spot exchange rate prevailing at thebalance sheet date; shareholders’ equity items other than "undistributed profits” are translated at the spotexchange rates at the dates on which such items arose; income and expense items in the income statementare translated at the exchange rates that approximate the actual spot exchange rates on the dates of thetransactions. Exchange differences arising from such translations are recognized in other comprehensiveincome.
10. Financial instruments
√ Applicable □ N/A
1. Classification of financial assets and financial liabilities
On initial recognition, the Company’s financial assets are classified into three categories, including
(1) financial assets at amortized cost; (2) financial assets at fair value through other comprehensive income;and (3) financial assets at fair value through profit or loss for the current period.
Upon initial recognition, the Company’s financial liabilities are classified into four categories,including (1) financial liabilities at fair value through profit or loss for the current period; (2) financialliabilities arising as a result of the transfer of financial assets not meeting the criteria for derecognition orcontinuing involvement in the financial assets transferred; (3) financial guarantee contracts not fallingunder Clauses (1) and (2), and loan commitments not falling under Clause (1) and below market interestrate; and (4) financial liabilities at amortized cost.
2. Recognition, measurement and derecognition of financial assets and financial liabilities
(1) Recognition and initial measurement of financial assets and financial liabilities
When the Company becomes a party to a financial instrument contract, a financial asset or liabilityis recognized. Financial assets and liabilities are initially measured at fair value. Transaction costs relatingto financial assets or liabilities at fair value through profit or loss are directly recognized in profit or lossfor the current period. Transaction costs relating to other kinds of financial assets or liabilities are included
in their initially recognized amount. However, the accounts receivable, if do not contain any significantfinancing component or are recognized by the Company without taking into consideration the financingcomponents under the contracts with a term of less than one year upon initial recognition, are initiallymeasured at transaction price defined in Accounting Standards for Business Enterprises No.14 - Revenue.
(2) Subsequent measurement of financial assets
1) Financial assets at amortized cost
Financial assets at amortized cost are subsequently measured at amortized cost using the effectiveinterest method. Gains or losses arising from financial assets at amortized cost that do not belong to anyhedging relationship are recognized in profit or loss for the current period upon derecognition,reclassification, amortization using the effective interest method or recognition of impairment.
2) Investments in debt instruments at fair value through other comprehensive income
Investments in debt instruments at fair value through other comprehensive income are subsequentlymeasured at fair value. Interest, impairment losses or gains and exchange gains or losses calculated usingthe effective interest method are recognized in profit or loss for the current period, and other gains orlosses are recognized in other comprehensive income. Upon derecognition, the aggregate gains or lossespreviously recognized in other comprehensive income are transferred to profit or loss for the current period.
3) Investments in equity instruments at fair value through other comprehensive income
Investments in debt instruments at fair value through other comprehensive income are subsequentlymeasured at fair value. Dividends received (other than those received as recovery of investment cost) arerecognized in profit or loss for the current period, and other gains or losses are recognized in othercomprehensive income. Upon derecognition, the accumulated gains or losses previously recognized inother comprehensive income are transferred to retained earnings.
4) Financial assets at fair value through profit or loss for the current period
Financial assets at fair value through profit or loss for the current period are subsequently measuredat fair value, with gains or losses arising therefrom, including interest and dividend income, recognized inprofit or loss for the current period, except the financial assets belonging to any hedging relationship.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss for the current period
Financial liabilities at fair value through profit or loss for the current period include financial
liabilities held for trading (including derivatives classified as financial liabilities), and financial liabilitiesdirectly designated as at fair value through profit or loss for the current period. Such financial liabilitiesare subsequently measured at fair value. Changes in the fair value of financial liabilities designated as atfair value through profit or loss for the period arising out of changes in the Company’s own credit risk arerecognized in other comprehensive income, unless such treatment will result in or increase any accountingmismatch in profit or loss. Other gains or losses arising from such financial liabilities, including interestexpenses and changes in fair value not arising out of changes in the Company’s own credit risk, arerecognized in profit or loss for the current period, except the financial liabilities belonging to any hedgingrelationship. Upon derecognition, the accumulated gains or losses previously recognized in othercomprehensive income are transferred to retained earnings.
2) Financial liabilities arising as a result of the transfer of financial assets not meeting the criteria forderecognition or continuing involvement in the financial assets transferred
Such financial liabilities are measured in accordance with the Accounting Standards for BusinessEnterprises No. 23 -- Transfer of Financial Assets.
3) Financial guarantee contracts not falling under Clauses 1) and 2), and loan commitments not fallingunder Clause 1) and below market interest rate
Such financial liabilities are subsequently measured at the higher of ① provision for impairmentlosses determined according to the policy for impairment of financial instruments; and ① balance of theinitially recognized amount after deduction of the accumulated amortization determined in accordancewith the relevant provisions of the Accounting Standards for Business Enterprises No.14 - Revenue.
4) Financial liabilities at amortized cost
Financial liabilities at amortized cost are subsequently measured at amortized cost using the effectiveinterest method. Gains or losses on financial liabilities at amortized cost that do not belong to any hedgingrelationship are recognized in profit or loss for the current period upon derecognition or amortization usingthe effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
① the contractual right to receive cash flows from the financial assets has expired; or
② the financial assets have been transferred and such transfer meets the criteria for derecognition offinancial assets as set forth in the Accounting Standards for Business Enterprises No. 23 -- Transfer ofFinancial Assets.
2) A financial liability (or part thereof) is derecognized when all or part of the outstanding obligationsthereon have been discharged.
3. Recognition and measurement of financial assets transferred
When a financial asset of the Company is transferred, if substantially all the risks and rewardsincidental to the ownership of the financial asset have been transferred, the financial asset is derecognized,and the rights and obligations incurred or retained in such transfer are separately recognized as assets orliabilities (as the case may be); if substantially all the risks and rewards incidental to the ownership of thefinancial asset have been retained, the financial asset transferred continues to be recognized. If theCompany neither transferred nor retained a substantial portion of all risks and rewards incidental to theownership of the financial asset, then: (1) if the Company does not retain control over the financial asset,the financial asset is derecognized, and the rights and obligations incurred or retained in such transfer areseparately recognized as assets or liabilities (as the case may be); and (2) if the Company retains controlover the financial asset, the financial asset continues to be recognized to the extent of the Company’scontinuing involvement in the financial asset transferred, and a corresponding liability is recognized.
If an entire transfer of a financial asset meets the criteria for derecognition, the difference between
(1) the carrying amount of the financial asset transferred at the date of derecognition; and (2) the sum ofthe consideration received from the transfer and the portion of the accumulated amount of changes in fairvalue directly recorded as other comprehensive income originally that corresponds to the partderecognized (where the financial asset transferred is an investment in debt instruments at fair valuethrough other comprehensive income) is recognized in profit or loss for the current period. If part of afinancial asset is transferred and the part transferred entirely meets the criteria for derecognition, the totalcarrying amount of the financial asset immediately prior to the transfer is allocated between the partderecognized and the part not derecognized in proportion to their relative fair value at the date of transfer,and the difference between (1) the carrying amount of the part derecognized; and (2) the sum of theconsideration received from the transfer of the part derecognized and the portion of the accumulatedamount of changes in fair value directly recorded as other comprehensive income originally that
corresponds to the part derecognized (where the financial asset transferred is an investment in debtinstruments at fair value through other comprehensive income) is recognized in profit or loss for thecurrent period.
4. Determination of fair value of financial assets and financial liabilities
The Company adopts the valuation techniques applicable to the current situations and with sufficientdata available and support of other information, to determine the fair value of financial assets and financialliabilities. The Company classifies the inputs used by the valuation techniques in the following levels anduses them in turn:
(1) Level 1 inputs: quoted market price (unadjusted) in an active market for an identical asset orliability available at the date of measurement;
(2) Level 2 inputs: inputs other than inputs included within Level 1 that are observable directly orindirectly. This category includes quoted prices for similar assets or liabilities in active markets, quotedprices for identical or similar assets or liabilities in inactive markets, observable inputs other than quotedprices (such as interest rate and yield curves observable during regular intervals of quotation), and inputsvalidated by the market;
(3) Level 3 inputs: inputs that are unobservable. This category includes interest rate or stock volatilitythat cannot be directly observed or validated by observable market data, future cash flows from retirementobligation incurred in business combinations, and financial forecasts made using own data.
5. Impairment of financial instruments
(1) Measurement and accounting treatment of impairment of financial instruments
The Company determines the impairment and assesses provision for impairment losses of financialassets at amortized cost, investments in debt instruments at fair value through other comprehensive income,contract assets, lease receivable, loan commitments other than financial liabilities designated at fair valuethrough profit or loss for the current period, and financial guarantee contracts other than financial liabilitiesdesignated at fair value through profit or loss for the current period and financial liabilities arising as aresult of the transfer of financial assets not meeting the criteria for derecognition or continuinginvolvement in the financial assets transferred, on the basis of expected credit losses.
Expected credit loss is the weighted average of credit losses on financial instruments taking intoaccount the possibility of default. Credit loss is the difference between all contractual cash flows receivable
under the contract and estimated future cash flows discounted at the original effective interest rate, i.e. thepresent value of all cash shortage, wherein the Company’s purchased or originated financial assets thathave become credit impaired are discounted at their credit-adjusted effective interest rate.With respect to purchased or originated financial assets that have become credit impaired, at thebalance sheet date, the Company recognizes a loss allowance equal to the accumulated amount of changesin lifetime expected credit losses since initial recognition.With respect to lease receivable, accounts receivable and contract assets that are formed fromtransactions under the Accounting Standards for Business Enterprises No. 14 - Revenue, the Companyuses the simple measurement method and recognizes a loss allowance equal to the lifetime expected creditloss.
With respect to financial assets not using the measurement methods stated above, at each balancesheet date, the Company assesses whether the credit risk has increased significantly since initialrecognition, and recognizes a loss allowance equal to the lifetime expected credit loss if the credit risk hasincreased significantly since initial recognition, or to the expected credit losses within the next 12 monthsif the credit risk has not increased significantly since initial recognition.
The Company uses reasonable and supportable information, including forward-looking information,and compares the possibility of default at the balance sheet date with the possibility of default upon initialrecognition, to determine whether the credit risk of the financial instruments has increased significantlysince initial recognition.
At the balance sheet date, if the Company determines that a financial instrument only has low creditrisk, the Company assumes that its credit risk has not increased significantly since initial recognition.
The Company assesses expected credit risk and measures expected credit losses of financialinstruments individually or collectively. When assessing the financial instruments collectively, theCompany includes the financial instruments in different groups according to their common riskcharacteristics.
At each balance sheet date, the Company re-assesses the expected credit losses, with the amount ofincrease in or reversal of loss allowance recognized in profit or loss for the current period as impairmentlosses or gains. With respect to a financial asset at amortized cost, its carrying amount recorded in thebalance sheet is written off against the loss allowance. With respect to an investment in debt instruments
at fair value through other comprehensive income, the Company recognizes the loss allowance in othercomprehensive income, without reducing its carrying amount.
(2) Financial instruments for which expected credit risk is assessed and expected credit losses aremeasured collectively
| Item | Basis for determining a group | Method for measuring expected credit losses |
| Other receivables - group of deposit and security receivable | Nature of other receivables | By reference to historic credit loss experience, and taking into account the current situations and prediction of future economic conditions, calculate the expected credit losses according to the default risk exposure and 12-month or rate of lifetime expected credit loss. |
| Other receivables- group of withholding receivable | ||
| Other receivables - group of receivables from related parties in the scope of consolidation | Receivables from related parties in the scope of consolidation | |
| Other receivables - grouping by aging | Aging |
(3) Accounts receivable for which expected credit losses are measured collectively and contractassets
1) Groups and method for measuring expected credit losses
| Item | Basis for determining a group | Method for measuring expected credit losses |
| Bank acceptance bills receivable | Type of notes | By reference to historic credit loss experience, and taking into account the current situations and prediction of future economic conditions, calculate the expected credit losses according to the default risk |
| Commercial acceptance bills receivable | ||
| Accounts receivable - group of receivables from related parties in the scope of consolidation | Receivables from related parties in the scope of consolidation |
| exposure and rate of lifetime expected credit loss. | ||
| Accounts receivable - grouping by aging | Aging | By reference to historic credit loss experience, and taking into account the current situations and prediction of future economic conditions, prepare a comparison table of the aging of accounts receivable and rate of lifetime expected credit loss, and calculate the expected credit losses. |
| Contract assets - group of receivables from related parties in the scope of consolidation | Receivables from related parties in the scope of consolidation | By reference to historic credit loss experience, and taking into account the current situations and prediction of future economic conditions, calculate the expected credit losses according to the default risk exposure and rate of lifetime expected credit loss. |
| Contract assets - group of aging | Aging | By reference to historic credit loss experience, and taking into account the current situations and prediction of future economic conditions, prepare a comparison table of the aging of contract assets and rate of lifetime expected credit loss, and calculate the expected credit losses. |
| Long-term receivables - grouping by aging | Aging | By reference to historic credit loss experience, and taking into account the current situations and prediction of future economic conditions, prepare a comparison table of the aging of long-term receivables and rate of lifetime expected credit loss, and calculate the expected credit losses. |
2) Accounts receivable - comparison table of the age of accounts receivable and rate of lifetime
expected credit loss
| Aging | Accounts receivable Rate of expected credit loss for accounts receivable (%) |
| Within 1 year (including, the same below) | 5.00 |
| 1-2 years | 25.00 |
| 2-3 years | 50.00 |
| Over 3 years | 100.00 |
6. Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are presented in the balance sheet separately, withoutoffsetting each other. However, the Company may represent the financial assets and financial liabilitieson a net basis in the balance sheet only if: (1) the Company has a legal right that is currently enforceableto set off the recognized financial assets and financial liabilities, and (2) the Company intends either tosettle on a net basis, or to realize the financial asset and settle the financial liability simultaneously.
With respect to the transfer of financial assets not meeting the criteria for derecognition, the Companydoes not offset the financial assets transferred against the relevant liabilities.
11. Notes receivable
Method for recognition of expected credit losses of notes receivable and relevant accountingtreatments
√ Applicable □ N/A
The Company’s method for recognition of expected credit losses of notes receivable and relevantaccounting treatments are disclosed in V.10 of Section X in details.
12. Accounts receivable
Method for recognition of expected credit losses of accounts receivable and relevant accountingtreatments
√ Applicable □ N/A
The Company’s method for recognition of expected credit losses of accounts receivable and relevantaccounting treatments are disclosed in V.10 of Section X in details.
13. Receivables financing
√ Applicable □ N/A
The Company’s accounting policies on receivables financing are disclosed in V.10 of Section X in details.
14. Other receivables
Method for recognition of expected credit losses of other receivables and relevant accountingtreatments
√ Applicable □ N/A
The Company’s method for recognition of expected credit losses of other receivables and relevantaccounting treatments are disclosed in V.10 of Section X in details.
15. Inventories
√ Applicable □ N/A
1. Categories of inventories
Inventories mainly include finished goods or commodities held for sale in the ordinary course ofbusinesses, work in progress in the process of production or materials and supplies consumed in theprocess of production or rendering service.
2. Costing method of inventories transferred out
The actual cost of inventories upon delivery is calculated using the moving weighted average method.
3. Basis for determining net realizable value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. Ifthe net realizable value is below the cost of inventories, a provision for decline in value of inventories ismade. For inventories directly used for sale, the net realizable value is determined as the estimated sellingprice in the ordinary course of business less the estimated costs necessary to make the sale and relevanttaxes. For inventories required for processing, the net realizable value is determined as the estimatedselling price of finished goods in the ordinary course of business less the estimated costs of completion,and the estimated costs necessary to make the sale and relevant taxes. As at the balance sheet date, if inthe same item of inventories, some are agreed with contractual prices while the others are not, the netrealizable value for such inventories is determined separately, and compared with the costs of the two partsof inventories distinctively, as to determine the provisions or reversal of provisions for decline in value ofinventories separately.
4. Inventory counting system
The perpetual inventory system is maintained for stock system.
5. Amortization method for low cost and short-lived consumable items and packaging materials
(1) Low cost and short-lived consumable items
Low cost and short-lived consumable items are amortized using the immediate write-off method.
(2) Packaging materials
Low cost and short-lived consumable items are amortized using the immediate write-off method.(XII) Contract costsAssets related to contract costs include contract acquisition costs and contract performance costs.If costs incurred by the Company for acquiring a contract are expected to be recovered, such costsare recognized as an asset as contract acquisition costs.The costs incurred by the Company for performing a contract are recognized as an asset of contractperformance costs if they do not fall within the scope of other relevant standards, like inventories, fixedassets, or intangible assets, and meet all the following conditions:
1. The cost is directly related to a present or expected contract, including direct labor, direct materials,manufacturing expenses (or similar expenses), costs explicitly to be borne by customers, and other costsarising from the contract;
2. The cost leads to the increase in resources of the Company for fulfilling its performance obligationsin the future; and
3. The cost is expected to be recovered.
Assets related to contract costs are amortized on the same basis as recognizing incomes from goodsrelated to assets, and are recognized in the profit or loss for the current period.
If the book value of the assets related to contract costs is greater than the consideration expected tobe acquired by transferring the goods or services related to such assets less the costs expected to beincurred, the Company makes provision for impairment for the exceeding portion and recognizesimpairment loss of assets. In the event of a change in the factors causing impairment in a prior period, sothat the consideration expected to be acquired by transferring the goods or services related to such assetsless the costs expected to be incurred is greater than the book value of such assets, the provision forimpairment made for such assets is reversed and recognized in the profit or loss for the current period;provided, however, that the reversed book value of such assets shall not exceed the book value of suchassets at the reversal data on the assumption that no provision for impairment has been made.
16. Contract assets
(1). Recognition method and criteria of contract assets
√ Applicable □ N/A
The Company presents contract assets or contract liabilities in the balance sheet according to the
relationship between the performance of contractual obligations and payment by customers. Contractassets and contract liabilities under a same contract are presented at the net amount after offsetting eachother.
Rights owned by the Company for unconditionally collecting the consideration from customers (thatis, depending only on the time) are presented as receivables, and rights for collecting the consideration forgoods that have been transferred to customers (depending on other factors than the time) are presented ascontract assets.
(2). Method for recognition of expected credit losses of contract assets and relevant accounting
treatments
√ Applicable □ N/A
The method for recognition of expected credit losses of contract assets and relevant accounting treatmentsare disclosed in V.10 of Section X in details.
17. Held-for-sale assets
□ Applicable √ N/A
18. Debt investments
(1). Method for recognition of expected credit losses of debt investments and relevant accounting
treatments
□ Applicable √ N/A
19. Other debt investments
(1). Method for recognition of expected credit losses of other debt investments and relevant
accounting treatments
□ Applicable √ N/A
20. Long-term receivables
(1). Method for recognition of expected credit losses of long-term receivables and relevant
accounting treatments
√ Applicable □ N/A
The method for recognition of expected credit losses of long-term receivables and relevant accountingtreatments are disclosed in V.10 of Section X in details.
21. Long-term equity investments
√ Applicable □ N/A
1. Judgments on joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities of such arrangement require unanimous consent of the partiessharing control. Significant influence is the power to participate in the financial and operating policymaking of an entity, but does not control or jointly control over those policies.
2. Determination of investment cost
(1) In case of an equity investment acquired through a business combination involving entities undercommon control, if the acquirer pays consideration for the business combination by cash, transfer of non-monetary assets, assumption of liabilities or issuance of equity securities, the initial investment cost of thelong-term equity investment is the Company’s share of the carrying amount of the owners’ equity of theacquiree in the consolidated financial statements of the ultimate controller at the date of combination. Thedifference between: (i) the initial investment cost of the long-term equity investment; and (ii) the carryingamount of the consideration paid for the combination or the total par value of the shares issued is treatedas an adjustment to the capital reserve. In case the capital reserve is not sufficient to absorb the difference,the remaining balance is adjusted against the retained earnings.
For a long-term equity investment acquired through business combination involving enterprisesunder common control that is achieved through multiple transactions by steps, the Company shall judgewhether such transactions constitute a package deal. If such transactions constitute a package deal, theCompany accounts for such transactions as one transaction to acquire control. If such transactions do notconstitute a package deal, the initial investment cost is the Company’s share of the carrying amount of theowners’ equity of the acquiree in the consolidated financial statements of the ultimate controller at the dateof combination. The difference between: (i) the initial investment cost of the long-term equity investmentat the date of combination; and (ii) the sum of the carrying amount of long-term equity investment beforethe combination and the carrying amount of the consideration paid for acquisition of the additional sharesat the date of combination is adjusted against the capital reserve. In case the capital reserve is not sufficientto absorb the difference, the remaining balance is adjusted against the retained earnings.
(2) In case of an equity investment acquired through a business combination not involving entitiesunder common control, the initial investment cost is the fair value of the carrying amount of theconsideration paid for the combination at the date of acquisition.
For a long-term equity investment acquired through a business combination not involving entitiesunder common control and achieved through multiple transactions by steps, the accounting treatment
thereof in the separate financial statements is different from that in the consolidated financial statementsas stated below:
1) In the separate financial statements, the sum of the carrying amount of the equity investmentoriginally held in the acquiree and the additional investment cost incurred is recorded as the initialinvestment cost of the equity investment changed into the cost method.
2) In the consolidated financial statements, it is required to judge whether such transactions constitutea package deal. If such transactions constitute a package deal, the Company accounts for such transactionsas one transaction to acquire control. If such transactions do not constitute a package deal, the Companyre-measures the fair value of the equity held in the acquiree prior to the date of acquisition, and recordsthe difference between the fair value and the carrying amount as investment income for the current period;if the equity held in the acquiree prior to the date of acquisition involves other comprehensive incomeunder equity method, such other comprehensive income is transferred to the income of the period in whichthe date of acquisition falls, except for other comprehensive income arising from re-measurement ofchanges in net liabilities or net assets of defined benefit plans.
(3) In the event of no business combination: The initial investment cost is the purchase price actuallypaid if it is acquired by cash, or the fair value of the equity securities issued if it is acquired throughissuance of equity securities, or determined in accordance with the Accounting Standards for BusinessEnterprises No. 12 -- Debt Restructuring if it is acquired through debt restructuring, or determined inaccordance with the Accounting Standards for Business Enterprises No. 7 -- Exchange of Non-monetaryAssets if it is acquired through exchange of non-monetary assets.
3. Subsequent measurement and recognition of profit or loss
Long-term equity investments in investees are measured using the cost method. Long-term equityinvestments in associates and joint ventures are measured using the equity method.
22. Investment properties
N/A
23. Fixed assets
(1). Criteria for recognition
√ Applicable □ N/A
Fixed assets are tangible assets held for production of goods, rendering of service, lease or operationand management with a useful life of more than one accounting year. A fixed asset is recognized if the
economic benefits relating to it are very likely to flow to the Company and its cost can be reliably measured.
(2). Method of depreciation
√ Applicable □ N/A
| Category | Depreciation | Depreciation period (years) | Residual value rate (%) | Annual depreciation rate (%) |
| Machinery and equipment | Straight line method | 5 | 5.00 | 19.00 |
| Transportation equipment | Straight line method | 5 | 5.00 | 19.00 |
| Electronic equipment and others | Straight line method | 3-5 | 5.00 | 19.00-31.67 |
| Operating leased equipment | Straight line method | 3, 7 | 5.00 | 31.67, 13.57 |
(3). Identification basis, valuation method and depreciation method for fixed assets acquired underfinance leases
□ Applicable √ N/A
24. Construction in progress
√ Applicable □ N/A
1. A construction in progress is recognized if the economic benefits relating to it are very likely toflow to the Company and its cost can be reliably measured. A construction in progress is measured at theactual cost incurred before it is completed and ready for intended use.
2. When a construction in progress is ready for intended use, it is transferred to fixed assets at itsactual construction cost. A construction in progress that is ready for intended use but the final settlementof which has not yet been completed is transferred to fixed assets at estimated value first, and after thecompletion of final settlement, the estimated value is adjusted according to the actual cost, but the accrueddepreciation is not adjusted.
25. Borrowing costs
√ Applicable □ N/A
1. Recognition for capitalization of borrowing costs
Borrowing costs incurred by the Company that are directly attributable to the acquisition,construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other
borrowing costs are recognized as expenses and charged to the current profit and loss.
2. Capitalization period of borrowing costs
(1) Borrowing expenses are capitalized when all of the following conditions are met: 1) capitalexpenditure has been incurred; 2) borrowing expenses have been incurred; and 3) activities relating to theacquisition, construction or production of the asset that are necessary to prepare the asset for its intendeduse or sale have commenced.
(2) Where acquisition and construction or production of a qualified asset is interrupted abnormallyand the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall besuspended. The borrowing expenses incurred during these periods shall be recognized as expenses for thecurrent period until the acquisition, construction or production of a qualifying asset is resumed.
(3) Capitalization of borrowing expenses shall be ceased when acquisition, construction or productionof the qualifying asset has prepared for its intended use or sale.
3. Capitalization rate and capitalization amount of borrowing expenses
As for the specific borrowings for the acquisition and construction or production of assets qualifyingfor capitalization, the to-be-capitalized amount of interests shall be determined in light of the actual costincurred on the current specific borrowings (including the amortization of discounts or premiumsdetermined using the effective interest method) minus the income of interests earned from the unusedborrowings by depositing it in the bank or investment income from such borrowing by making it as atemporary investment; where a general borrowing is used for the acquisition and construction orproduction assets qualifying for capitalization, the Company shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by multiplying the weighted average value of theaccumulative expenditures to asset minus the specific borrowing by the capitalization rate of the generalborrowing used.
26. Biological assets
□ Applicable √ N/A
27. Oil and gas assets
□ Applicable √ N/A
28. Right-of-use assets
√ Applicable □ N/A
Right-of-use assets are initially measured at cost; the cost includes: 1) initial measurement amount oflease liabilities; 2) lease payments made on or before the commencement date of the lease term, whererelevant acquired amount related to lease incentives is excluded if there are lease incentives; 3) initialdirect expenses incurred by the lessee; and 4) costs expected to be incurred by the lessee for dismantlingand removing the leased assets, restoring the place of the leased assets, or restoring the leased assets to thestate provided under lease provisions.The Company depreciates right-of-use assets by using the straight-line method. If there is reasonablecertainty that the lessee will obtain ownership of the leased asset by the end of the lease term, the Companydepreciates the leased asset over its useful life. If there is no reasonable certainty that the lessee will obtainownership of the leased asset by the end of the lease term, the Company depreciates the leased asset overthe shorter of the lease term and its remaining useful life.
29. Intangible assets
(1). Measurement, service life and impairment test
√ Applicable □ N/A
1. Intangible assets include land use rights, patents, and software etc. and are measured at cost initially.
2. An intangible asset with a finite useful life is amortized over its useful life in a systematical andrational expected realization of economic benefits relative to the intangible asset, or is amortized using thestraight-line method if it is impossible to determine expected realization reliably. The specific years are asfollows:
| Item | Amortization period (years) |
| Land use rights | 30 |
| Patents | 10 |
| Software | 3-5 |
(2). Accounting policy on internal research and development expenditures
□ Applicable √ N/A
30. Impairment of long-term assets
√ Applicable □ N/A
For long-term equity investments, fixed assets, construction in progress, right-of-use assets,intangible assets with a finite useful life and other long-term assets, if there’s an indication of impairmentat the balance sheet date, the Company assesses their recoverable amount. Goodwill arising from businesscombinations and intangible assets with an infinite useful life are tested for impairment every yearregardless of whether there’s an indication of impairment. Goodwill is tested for impairment together withthe relevant groups of assets or combinations of groups of assets.If the recoverable amount of a long-term asset is less than its carrying amount, the difference ismeasured as impairment loss of the asset and recognized in profit or loss for the current period.
31. Long-term prepaid expenses
√ Applicable □ N/A
Long-term prepaid expenses are expenses that have already been incurred but should be amortizedover a period of more than one year (excluding one year). Long-term prepaid expenses are stated as theamount actually incurred and shall be amortized evenly by stages within the benefit period or specifiedperiod. If an item of long-term prepaid expenses will not benefit the subsequent periods, the amortizedvalue of the item that has not yet been amortized is wholly transferred to profit or loss for the currentperiod.
32. Contract liabilities
(1). Recognition method for contract liabilities
√ Applicable □ N/A
The Company presents contract assets or contract liabilities in the balance sheet according to therelationship between the performance of contractual obligations and payment by customers. Contractassets and contract liabilities under a same contract are presented at the net amount after offsetting eachother.
The obligations of the Company for transferring goods to customers corresponding to considerationsthat have been received or receivable are presented as contract liabilities.
33. Employee benefits
(1). Accounting treatment of short-term employee benefits
√ Applicable □ N/A
1. Employee benefits include short-term benefits, post-employment benefits, termination benefits andother long-term employee benefits.
2. Accounting treatment of short-term employee benefits
The short-term employee benefits actually incurred are recognized as liabilities in the accountingperiod during which employee services are rendered, and included in profit or loss for the current periodor the cost of related assets.
(2). Accounting treatment of post-employment benefits
√ Applicable □ N/A
Post-employment benefits are classified into defined contribution plans and defined benefit plans.
(1) In the accounting period during which employee services are rendered, the amount in contributionas calculated according to the defined contribution plan is recognized as liabilities and included in profitor loss for the current period or the cost of related assets.
(2) The accounting treatment of a defined benefit plan generally involves the following steps:
1) According to the projected unit credit method, use the unbiased and consistent actuarialassumptions to estimate demographic variables and financial variables, measure the obligation arisingfrom the defined benefit plan and determine the period to which the relevant obligation belongs.Meanwhile, discount the obligation arising from the defined benefit plan, in order to determine the presentvalue of the defined benefit plan obligation and the current service cost;
2) If the defined benefit plan has assets, the deficit or surplus resulting after reducing the presentvalue of the defined benefit plan obligation by the fair value of the defined benefit plan is recognized as anet liability or asset of the defined benefit plan. If the defined benefit plan has a surplus, the net assets ofthe defined benefit plan are measured at the lower of surplus in the defined benefit plan and asset ceiling;
3) At the end of the reporting period, the cost of employee benefits arising from the defined benefitplan is recorded as service cost, net interest on the net liabilities or net assets of the defined benefit plan,and changes arising from re-measurement of the net liabilities or net assets of the defined benefit plan,wherein the service cost and the net interest on the net liabilities or net assets of the defined benefit planare included in profit or loss for the current period or the cost of related assets, and the changes arisingfrom re-measurement of the net liabilities or net assets of the defined benefit plan are included in othercomprehensive income, which will not be reserved to profit or loss in subsequent periods, but may betransferred within the scope of equity.
(3). Accounting treatment of termination benefits
√ Applicable □ N/A
If dismissal benefits are provided to employees, the liabilities of employee benefits from the dismissalbenefits are recognized at the earlier of the following and are recognized in the profit or loss for the currentperiod: (1) when the Company cannot unilaterally withdraw the dismissal benefits provided due to thecancellation of the labor relationship or lay-off suggestions; (2) when the Company recognizes costs orexpenses in connection with restructuring involving dismissal benefits.
(4). Accounting treatment of other long-term employee benefits
√ Applicable □ N/A
Other long-term employee benefits are accounted for in accordance with the provisions applicable todefined contribution plans if they are qualified as defined contribution plans, otherwise, are accounted forin accordance with the provisions applicable to defined benefit plans. In order to simplify the accountingtreatment, the total net amount of the cost of employee benefits arising from the defined benefit plans thatis recorded as service cost, net interest on the net liabilities or net assets of other long-term employeebenefits, changes arising from re-measurement of the net liabilities or net assets of other long-termemployee benefits and other components is included in profit or loss for the current period or the cost ofrelated assets.
34. Leasing liabilities
√ Applicable □ N/A
On the lease inception date, the Company recognizes the present value of lease payments not paid aslease liabilities. The interest rate implicit in the lease is used as the discount rate for calculating the presentvalue of the lease payments; if the interest rate implicit in the lease cannot be determined, the incrementalborrowing interest rate of the Company is used as the discount rate. The difference between the leasepayments and the present value thereof is considered as unrecognized finance charges; in each periodduring the lease term, interest expenses are recognized in the profit or loss for the current period accordingto the discount rate of the present value of recognized lease payments. Variable lease payments notincluded in measurement of lease liabilities are recognized in the profit or loss for the current period whenthe actually arise.
Where, after the lease inception date, there are changes in the substantial fixed payment, the payables
expected on the basis of the residual value of the guarantee, the index or ratio used for determining thelease payment, the evaluation results or actual exercising of purchase option, renewal option or leasetermination option, the Company re-measures the lease liability as per the present value of the leasepayment after change, and adjust the book value of the use right assets accordingly. Where the book valueof the use right asset has been reduced to zero, but the lease liability still needs to be further reduced, theCompany includes the residual amount in the current profit or loss.
35. Provisions
√ Applicable □ N/A
1. An obligation arising from any external guarantee, instigation, product quality warranty, onerouscontract or other contingencies is recognized as a provision if it is a present obligation assumed by theCompany, and it is probable that an outflow of resources embodying economic benefits will be requiredto settle the obligation, and the amount of the obligation can be reliably measured.
2. The amount recognized as a provision is the best estimate of the consideration required to settlethe present obligation. The carrying amount of provisions is reviewed at the balance sheet date.
36. Share-based payments
√ Applicable □ N/A
1. Categories of share-based payments
Share-based payments include equity-settled share-based payments and cash-settled share-basedpayments
2. Accounting treatment for implementation, modification and termination of share-based paymentplan
(1) Equity-settled share-based payments
Equity-settled share-based payments in exchange for services rendered by employees that can beexecuted immediately upon being granted, are measured at the fair value of the equity instruments at thegrant date, and recognized as related costs or expenses with a corresponding adjustment to capital reserve.At each balance sheet date during the vesting period, equity-settled share-based payments in exchange forservices rendered by employees that cannot be executed until services in the vesting period are completedor required performance conditions are satisfied, are measured at the fair value of the equity instruments
at the grant date based on the best estimate of exercisable numbers of equity instruments, and recognizedas related costs or expenses with a corresponding adjustment to capital reserve.For equity-settled share-based payments in exchange for services rendered by other parties, if the fairvalue of services from other parties can be measured reliably, they are measured at the fair value of servicesfrom other parties at the date when such services are received. If the fair value of services from otherparties cannot be measured reliably but the fair value of the equity instruments can be measured reliably,they are measured at the fair value of the equity instruments at the date when such services are received.The fair value of the equity instruments are recognized as related costs or expenses, with a correspondingincrease in owners’ equity.
(2) Cash-settled share-based payments
Cash-settled share-based payments in exchange for services rendered by employees that can beexecuted immediately upon being granted, are recognized as related costs or expenses based on the fairvalue of liabilities assumed by the Company at the grant date, with a corresponding increase in liability.At each balance sheet date during the vesting period, cash-settled share-based payments in exchange forservices rendered by employees that cannot be executed until services in the vesting period are completedor required performance conditions are satisfied, are measured at the fair value of liabilities assumed bythe Company based on the best estimate of exercisable conditions, and recognized as related costs orexpenses and relevant liabilities.
(3) Modification and termination of share-based payment plan
In case the Company modifies a share-based payment plan, if the modification increases the fair valueof the equity instruments granted, the Company will include the incremental fair value of the equityinstruments granted in the measurement of the amount recognized for services received. If themodification increases the number of the equity instruments granted, the Company will include the fairvalue of additional equity instruments granted in the measurement of the amount recognized for servicesreceived. If the Company modifies the exercisable conditions of the share-based payment plan in a mannerbeneficial to the employee, the Company will consider the modified exercisable conditions when dealingwith exercisable conditions.
If the modification decreases the fair value of the equity instruments granted, the Company willcontinue to measure the amount recognized for services received at the fair value of the equity instruments
at the grant date without including the decremental fair value of the equity instruments. If the modificationdecreases the number of the equity instruments granted, the Company will treat the decreased number asthe cancelled number of equity instruments granted. If the Company modifies the exercisable conditionsin a manner unbeneficial to the employee, the Company will not consider the modified exercisableconditions when dealing with exercisable conditions.If cancellation or settlement of the equity instruments granted occurs (not due to unsatisfaction ofexercisable conditions) during the vesting period, the Company will account for the cancellation orsettlement of the equity instruments granted as an acceleration of vesting, and recognize immediately theamount that otherwise would have been recognized over the remainder of the vesting period.
37. Preferred shares, perpetual bonds and other financial instruments
□ Applicable √ N/A
38. Revenue
(1). Accounting policies adopted for income recognition and measurement
√ Applicable □ N/A
1. Principles for revenue recognition
At the beginning date of a contract, the Company assesses the contract to identify individualperformance obligations contained in the contract and determine whether individual obligations are to beperformed during a period of time or at a specific time point.An obligation meeting one of the following conditions is one to be performed within a period of time,and the remaining are obligations to be performed at a specific time point: (1) the customer receives andconsumes the economic benefits from the performance of the Company when the Company performs itsobligations; (2) the customer can control the goods in progress during the performance of the Company;or (3) the goods generated during the performance process of the Company have irreplaceable uses, andthe Company is entitled to payment for the portion completed during the entire contract term.
The Company recognizes revenue according to the performance progress during the period of timefor obligations to be performed during a period of time. If the performance progress cannot be determinedreasonably, and the Company is expected to be paid based on the costs incurred, the Company recognizesrevenue according to the amount of costs incurred until the performance progress can be determinedreasonably. For obligations to be performed at a specific time point, the Company recognizes revenue
when the customer receives the control over the relevant goods or services. The following will beconsidered when determining whether the customer has obtained the control over the goods: (1) theCompany has the present rights of receiving payments for such goods, that is, the customer has the presentobligation of making payment for the goods; (2) the Company has transferred the legal title in the goodsto the customer, that is, the customer has acquired the legal title in the goods; (3) the Company hastransferred the physical goods to the customer, that is, the customer is in possession of the physical goods;
(4) the Company has transferred major risks and rewards of the legal title in the goods to the customer,that is, the customer has acquired the major risks and rewards of the legal title in the goods; (5) thecustomer has accepted the goods; and (6) there are other signs indicating that the customer has acquiredthe control over the goods.
2. Principles of revenue measurement
(1) The Company measures the revenue according to the transaction price allocated to individualperformance obligations. The transaction price refers to the amount of the consideration expected to bereceived by the Company on the basis of transferring goods or providing services to the customer,excluding amounts collected on behalf of a third party and amounts expected to be refunded to thecustomer.
(2) If a contract contains a variable consideration, the Company determines the best estimate of thevariable consideration according to the expected value or the most likely amount; however, the transactionprice containing the variable consideration does not exceed the amount for which no material reversal ofrecognized revenue is highly probable when relevant uncertainty is eliminated.
(3) If a contract contains a major financing portion, the Company determines the transaction price asthe amount payable in cash when the customer obtains the control over the goods or services. Thedifference between the transaction price and contract consideration is amortized using the effective interestmethod during the term of the contract. If the Company expects that the interval between the acquisitionof the goods or services by the customer and the payment of prices by the customer will not exceed oneyear from the commencement date of the contract, no significant financing factor is considered.
(4) If a contract contains two or more performance obligations, at the beginning date of the contract,the Company allocates the transaction price to individual performance obligations according to the relative
proportion of the individual sale prices of the goods promised under such individual performanceobligations.
3. Specific methods for revenue recognition
(1) Revenue from sales of goods
Revenue from sales of goods denotes contractual obligations to be performed at a time point. Oursales include sales to the domestic market and sales to foreign markets.
Goods sold to the domestic market: 1) Under the direct sale model and the distribution mode, theCompany recognizes the revenue when the goods sent have been delivered to customers with customers’receipt given to the Company. For goods sold attached with return conditions, the Company recognizesthe revenue according to the amount of the consideration expected to be received by the Company on thebasis of transferring goods to the customer, and recognizes liabilities to write off the revenue according tothe expected amount to be refunded due to the return of goods; for goods required for installment andinspection after sales, the Company recognizes the revenue when such goods have been installed andinspected with customers’ acceptance certificate given to the Company. If the Company shares profitsfrom sales of product to downstream end customers, the Company recognizes the revenue at the goodsprice agreed between the parties upon the delivery of goods to the customer and reconciliation, andrecognizes shared revenue according to the share profit reconciliation statement when the profits fromsales of goods are realized. 2) Under the commissioned sales mode, the Company recognizes the revenuewhen it receives the list of commissioned sales from the customer.
Goods exported to overseas markets: The Company mainly adopts FCA for export of goods. Underthis mode, the Company recognizes revenue when it delivers goods at the designated location with exportcustoms clearance procedures completed.
(2) Other incomes
Other revenues denote contractual obligations to be performed at a time point/during a specific periodof time. For installation services provided by the Company, the Company recognizes the revenue when ithas completed the services and received customers’ acceptance certificate; for repair and maintenanceservices provided by the Company, the Company recognizes the revenue when it has completed theservices and received payments; for patrol inspection services provided by the Company, the Companydetermines the service performance progress by using the output approach, and recognizes the revenue
according to the performance progress; for patent license services provided by the Company, the Companyrecognizes the revenue when the patent license is delivered; for technology development services providedby the Company, the Company recognizes the revenue when it has completed the services or when theagreed time point of service acceptance is reached.
(2). Description of differences in the accounting policies in revenue recognition due to different
operating modes adopted for the same business type
□ Applicable √ N/A
39. Contract costs
√ Applicable □ N/A
Assets related to contract costs include contract acquisition costs and contract performance costs.If costs incurred by the Company for acquiring a contract are expected to be recovered, such costsare recognized as an asset as contract acquisition costs.The costs incurred by the Company for performing a contract are recognized as an asset of contractperformance costs if they do not fall within the scope of other relevant standards, like inventories, fixedassets, or intangible assets, and meet all the following conditions:
1. The cost is directly related to a present or expected contract, including direct labor, direct materials,manufacturing expenses (or similar expenses), costs explicitly to be borne by customers, and other costsarising from the contract;
2. The cost leads to the increase in resources of the Company for fulfilling its performance obligationsin the future; and
3. The cost is expected to be recovered.
Assets related to contract costs are amortized on the same basis as recognizing incomes from goodsrelated to assets, and are recognized in the profit or loss for the current period.
If the book value of the assets related to contract costs is greater than the consideration expected tobe acquired by transferring the goods or services related to such assets less the costs expected to beincurred, the Company makes provision for impairment for the exceeding portion and recognizesimpairment loss of assets. In the event of a change in the factors causing impairment in a prior period, sothat the consideration expected to be acquired by transferring the goods or services related to such assets
less the costs expected to be incurred is greater than the book value of such assets, the provision forimpairment made for such assets is reversed and recognized in the profit or loss for the current period;provided, however, that the reversed book value of such assets shall not exceed the book value of suchassets at the reversal data on the assumption that no provision for impairment has been made.
40. Government grants
√ Applicable □ N/A
1. Government grants are recognized if (1) the Company meets the conditions attaching to thegovernment grants; and (2) the Company will receive the government grants. Government grants in theform of monetary assets are measured at the amount received or receivable. Government grants in theform of non-monetary assets are measured at fair value, or if their fair value is unavailable, at nominalamount.
2. Determination and accounting treatment of government grants related to assets
Government grants related to assets are government grants which are offered for purchasing,constructing or otherwise acquiring long-term assets as provided by the applicable government documents.In the absence of such express provision in the applicable government documents, government grantsrelated to assets are those with a primary condition that the Company should purchase, construct orotherwise acquire long-term assets. Government grants related to assets are offset against the carryingamount of the relevant assets or recognized as deferred. Government grants related to assets recognizedas deferred shall be included in profit or loss over the service life of the relevant assets on a reasonableand systemic basis. Government grants measured at nominal amount are directly recognized in profit orloss for the current period. In case of sale, transfer, retirement or damage of the relevant assets before theend of intended service life, the balance of the unallocated deferred is transferred to profit or loss for theperiod in which the assets are disposed of.
3. Determination and accounting treatment of government grants related to income
Government grants related to income are government grants other than those related to assets.Government grants related to both assets and income in which it is difficult to make a distinction betweenthe portion related to assets and the portion related to income are wholly classified as government grantsrelated to income. Government grants related to income as compensation for expenses or losses to be
incurred in subsequent periods are recognized as deferred and in the period for recognizing the relevantcosts, expenses or losses, included in profit or loss for the current period or offset against the relevantcosts. Government grants related to income as compensation for expenses or losses already incurred aredirectly included in profit or loss for the current period or offset against the relevant costs.
4. Government grants related to daily operations of the Company are recognized in other income oroffset against the relevant costs and expenses depending on the nature of economic business. Governmentgrants not related to daily operations of the Company are recognized in non-operating income or expenses.
5. Accounting treatment of policy preferential loans and interest subsidies
(1) If the Ministry of Finance appropriates the interest subsidies to the lending bank, who then grantsthe loan to the Company at the policy preferential rate, the loan is stated as the amount actually received,and the borrowing cost is calculated according to the principal of the loan and the policy preferential rate.
(2) If the Ministry of Finance directly appropriates the interest subsidies to the Company, the interestsubsidies are offset against the borrowing cost.
41. Deferred tax assets and deferred tax liabilities
√ Applicable □ N/A
1. The difference between the tax base of an asset or liability and its carrying amount (or in case ofan item not recognized as asset or liability whose tax base can be determined according to the applicabletax law, the difference between its tax base and carrying amount) is recognized as a deferred tax asset ordeferred tax liability according to the tax rate applicable to the period in which the asset or liability isexpected to be recovered or settled.
2. Deferred tax assets are recognized to the extent of the amount of income tax payable that will beavailable in future periods against which deductible temporary differences are deductible. At the balancesheet date, deferred tax assets not recognized in prior periods are recognized if there’s conclusive evidencethat it is probable that sufficient taxable income will be available in future periods against which thedeductible temporary differences are deductible.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced tothe extent that it is no longer probable that sufficient taxable income will be available in future periods toallow the benefit of the deferred tax assets to be utilized. If it is probable that sufficient taxable incomewill be available, the reduced amount is reversed.
4. The income taxes and deferred taxes are included in profit or loss for the current period as income
tax expenses or gains, except the income taxes arising from any: (1) business combination; or (2)transaction or event directly recognized in owners’ equity.
42. Leases
(1). Accounting treatment of operating leases
□ Applicable √ N/A
(2). Accounting treatment of finance leases
□ Applicable √ N/A
(3). Method for determination and accounting treatments of lease under the New Lease Standard
√ Applicable □ N/A
1. The Company as the lessee
On the lease inception date, the Company recognizes a lease with a lease term of not more than 12months and not containing an option as a short-term lease; and recognizes a low-value assets lease for alease in which individually leased assets have a low value when they are new. If the Company subleasesor expects to sublease the leased asset, the original lease is not recognized as a low-value assets lease.For short-term leases and low-value assets leases, the Company recognizes lease payment in the costsof relevant assets or the profit or loss for the current period by using the straight-line method in each periodduring the lease term.Except for short-term leases and low-value assets leases subject to simplified treatment above, on thelease inception date, the Company recognizes right-of-use assets and lease liabilities for leases.
(1) Right-of-use assets
Right-of-use assets are initially measured at cost; the cost includes: 1) initial measurement amount oflease liabilities; 2) lease payments made on or before the commencement date of the lease term, whererelevant acquired amount related to lease incentives is excluded if there are lease incentives; 3) initialdirect expenses incurred by the lessee; and 4) costs expected to be incurred by the lessee for dismantlingand removing the leased assets, restoring the place of the leased assets, or restoring the leased assets to thestate provided under lease provisions.
The Company depreciates right-of-use assets by using the straight-line method. If there is reasonablecertainty that the lessee will obtain ownership of the leased asset by the end of the lease term, the Companydepreciates the leased asset over its useful life. If there is no reasonable certainty that the lessee will obtain
ownership of the leased asset by the end of the lease term, the Company depreciates the leased asset overthe shorter of the lease term and its remaining useful life.
(2) Leasing liabilities
On the lease inception date, the Company recognizes the present value of lease payments not paid aslease liabilities. The interest rate implicit in the lease is used as the discount rate for calculating the presentvalue of the lease payments; if the interest rate implicit in the lease cannot be determined, the incrementalborrowing interest rate of the Company is used as the discount rate. The difference between the leasepayments and the present value thereof is considered as unrecognized finance charges; in each periodduring the lease term, interest expenses are recognized in the profit or loss for the current period accordingto the discount rate of the present value of recognized lease payments. Variable lease payments notincluded in measurement of lease liabilities are recognized in the profit or loss for the current period whenthe actually arise.Where, after the lease inception date, there are changes in the substantial fixed payment, the payablesexpected on the basis of the residual value of the guarantee, the index or ratio used for determining thelease payment, the evaluation results or actual exercising of purchase option, renewal option or leasetermination option, the Company re-measures the lease liability as per the present value of the leasepayment after change, and adjust the book value of the use right assets accordingly. Where the book valueof the use right asset has been reduced to zero, but the lease liability still needs to be further reduced, theCompany includes the residual amount in the current profit or loss.
2. The Company as the lessor
On the lease inception date, the Company classifies a lease in which almost all the risks and rewardsrelated to the ownership of the leased asset have been substantially transferred as a finance lease, andrecognizes all other leases as operating leases.
(1) Operating lease
In each period during the lease term, the Company recognizes lease payments as rental incomes byusing the straight-line method/units of production method; initial direct expenses incurred are capitalized,and amortized on the same basis for recognizing lease incomes for recognizing in the profit or loss foreach period.The variable lease payments acquired by the Company that are related to operating leases andnot recognized in lease payments are recognized in the profit or loss for the current period when they
actually occur.
43. Other significant accounting policies and accounting estimates
□ Applicable √ N/A
44. Changes in significant accounting policies and accounting estimates
(1). Changes in significant accounting policies
√ Applicable □ N/A
| Changes in accounting policies and associated reasons | Approval procedures | Remarks (name and amount of line items in financial statements that have been materially affected) |
| Implement the amended Accounting Standard for Business Enterprises No. 21 - Leases | Approved by the management | Refer to the table below for details |
Other information
(1) The Company implements the amended Accounting Standard for Business Enterprises No. 21 -Lease (hereinafter referred to as the New Lease Standard) from January 1, 2021 (hereinafter referred toas the Date of Initial Application).
1) For contracts existing prior to the Date of Initial Application, the Company opts not to assesswhether such contracts are leases or contain leases.
2) For lease contracts in which the Company is the lessee, the Company adjusts the amounts of theinitial retained earnings of the current reporting period and other relevant items in the financial statementsaccording to the cumulative effects between the application of the New Lease Standard and the originalstandard on the Date of Initial Application, but makes no adjustment to comparable periods. The specifictreatment is as follows:
For an operating lease prior to the Date of Initial Application, on the Date of Initial Application, theCompany measures lease liabilities according to the present value of the remaining lease paymentsdiscounted at the Company’s incremental borrowing interest rate on the Date of Initial Application, andmeasures right-of-use assets according to the book value on the assumption that the New Lease Standardhas been adopted from the lease inception date (the discount rate is the Company’s incremental borrowinginterest rate on the Date of Initial Application).
On the Date of Initial Application, the Company performed impairment test on the right-of-use assetsand implemented corresponding accounting treatment in accordance with the provisions in V.44 of sectionX.
① The New Lease Standard mainly caused the following effects on the Company’s financialstatements as at January 1, 2021:
| Item | Balance sheet | ||
| December 31, 2020 | Adjustment effect of the New Lease Standard | January 1, 2021 | |
| Prepayments | 47,447,601.43 | 1,727,030.09 | 49,174,631.52 |
| Right-of-use assets | 39,368,070.17 | 39,368,070.17 | |
| Deferred tax assets | 96,132,114.02 | 323,676.36 | 96,455,790.38 |
| Other payables | 59,848,053.83 | -1,026,101.82 | 58,821,952.01 |
| Non-current liabilities due within one year | 181,417,412.46 | 18,607,011.39 | 200,024,423.85 |
| Leasing liabilities | 23,804,845.36 | 23,804,845.36 | |
| Surplus reserve | 35,242,179.57 | 34,923.77 | 35,277,103.34 |
| Undistributed profit | 357,793,891.96 | 9,346.56 | 357,803,238.52 |
| Total equity attributable to owners of the parent company | 2,091,599,671.75 | 44,270.33 | 2,091,643,942.08 |
| Minority interests | 93,812,755.26 | -11,248.64 | 93,801,506.62 |
① The weighted average of the Company’s incremental borrowing interest rate adopted for the leaseliabilities recognized in the balance sheets on the Date of Initial Application is 4.45%.
3) For operating lease contracts of low-value assets existing prior to the Date of Initial Application,the Company adopts the simplified approach, and instead of recognizing right-of-use assets and leaseliabilities, implement accounting treatment in accordance with the New Lease Standard from the Date ofInitial Application.
4) For lease contracts in which the Company is the lessor, the Company implements accountingtreatment in accordance with the New Lease Standard from the Date of Initial Application.
(2) The Company has implemented the Interpretation of the Accounting Standards for BusinessEnterprises No. 14 released on January 26, 2021 by the Ministry of Finance since 2021. This change in
the accounting policy has no effect on the financial statements of the Company.
(3) The Company has implemented the provisions on “presentation of centralized funds management”in the Interpretation of the Accounting Standards for Business Enterprises No. 15 since December 31,2021. This change in the accounting policy has no effect on the financial statements of the Company.
(2). Changes in significant accounting estimates
□ Applicable √ N/A
(3). Description of adjustments in opening balances of line items in financial statements of the year
due to the initial implementation of the New Lease Standard since 2021
√ Applicable □ N/A
Consolidated Balance Sheet
In RMB
| Item | December 31, 2020 | January 1, 2021 | Adjusted amount |
| Current Assets: | |||
| Cash and bank balances | 1,037,760,573.27 | 1,037,760,573.27 | |
| Balances with clearing agencies | |||
| Placements with banks and other financial institutions | |||
| Held-for-trading financial assets | 114,000,000.00 | 114,000,000.00 | |
| Derivative financial assets | |||
| Notes receivable | 3,726,328.91 | 3,726,328.91 | |
| Accounts receivable | 341,660,832.43 | 341,660,832.43 | |
| Receivables financing | 11,959,000.00 | 11,959,000.00 | |
| Prepayments | 47,447,601.43 | 49,174,631.52 | 1,727,030.09 |
| Premiums receivable | |||
| Amounts receivable under reinsurance contracts | |||
| Reinsurer’s share of insurance contract reserves | |||
| Other receivables | 12,534,062.15 | 12,534,062.15 | |
| Including: Interest receivable | |||
| Dividend receivable | |||
| Financial assets purchased under resale agreements | |||
| Inventories | 418,812,140.80 | 418,812,140.80 | |
| Contract assets | 3,744,655.50 | 3,744,655.50 | |
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 13,002,195.46 | 13,002,195.46 | |
| Total current assets | 2,004,647,389.95 | 2,006,374,420.04 | 1,727,030.09 |
| Non-current Assets: | |||
| Loans and advances | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term accounts receivable | 13,196,087.78 | 13,196,087.78 | |
| Long-term equity investment | 262,744,772.48 | 262,744,772.48 | |
| Investment in other equity instruments | 11,975,419.38 | 11,975,419.38 | |
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 447,571,328.91 | 447,571,328.91 | |
| Construction in progress | 51,576,850.72 | 51,576,850.72 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 39,368,070.17 | 39,368,070.17 | |
| Intangible assets | 320,488,235.60 | 320,488,235.60 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term prepaid expenses | 11,572,346.79 | 11,572,346.79 | |
| Deferred tax assets | 96,132,114.02 | 96,455,790.38 | 323,676.36 |
| Other non-current assets | 6,299,781.06 | 6,299,781.06 | |
| Total non-current assets | 1,221,556,936.74 | 1,261,248,683.27 | 39,691,746.53 |
| Total assets | 3,226,204,326.69 | 3,267,623,103.31 | 41,418,776.62 |
| Current Liabilities: | |||
| Short-term borrowings | 88,778,852.86 | 88,778,852.86 | |
| Loans from the central bank | |||
| Taking from banks and other financial institutions | |||
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 116,822,674.67 | 116,822,674.67 | |
| Accounts payable | 226,494,815.90 | 226,494,815.90 | |
| Advance from customers | 153,258,189.88 | 153,258,189.88 | |
| Contract liabilities | 31,518,312.59 | 31,518,312.59 | |
| Financial assets sold under repurchase agreements | |||
| Customer deposits and deposits from banks and other financial institutions | |||
| Funds from securities trading agency | |||
| Funds from underwriting securities agency | |||
| Employee benefits payable | 46,105,566.15 | 46,105,566.15 | |
| Taxes payable | 19,871,846.94 | 19,871,846.94 | |
| Other payables | 59,848,053.83 | 58,821,952.01 | -1,026,101.82 |
| Including: Interest payable | |||
| Dividend payable | |||
| Fees and commissions payable | |||
| Amounts payable under reinsurance contracts | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 181,417,412.46 | 200,024,423.85 | 18,607,011.39 |
| Other current liabilities | 3,045,831.07 | 3,045,831.07 | |
| Total current liabilities | 927,161,556.35 | 944,742,465.92 | 17,580,909.57 |
| Non-current Liabilities: | |||
| Insurance contract reserves | |||
| Long-term borrowings | 64,845,281.53 | 64,845,281.53 | |
| Bonds payable | |||
| Where: Preferred shares | |||
| Perpetual bonds | |||
| Leasing liabilities | 23,804,845.36 | 23,804,845.36 | |
| Long-term payables | 3,262,450.00 | 3,262,450.00 | |
| Long-term employee benefits payable | |||
| Estimated liabilities | 28,799,354.65 | 28,799,354.65 | |
| Deferred income | 16,723,257.15 | 16,723,257.15 | |
| Deferred tax liabilities | |||
| Other non-current liabilities | |||
| Total non-current liabilities | 113,630,343.33 | 137,435,188.69 | 23,804,845.36 |
| Total liabilities | 1,040,791,899.68 | 1,082,177,654.61 | 41,385,754.93 |
| Owners’ Equity (Shareholders’ Equity): | |||
| Paid-in capital (or share capital) | 452,756,901.00 | 452,756,901.00 | |
| Other equity instruments | |||
| Where: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserve | 1,249,020,991.15 | 1,249,020,991.15 | |
| Less: Treasury shares | |||
| Other comprehensive income | -3,214,291.93 | -3,214,291.93 | |
| Special reserve | |||
| Surplus reserve | 35,242,179.57 | 35,277,103.34 | 34,923.77 |
| General risk reserve | |||
| Undistributed profit | 357,793,891.96 | 357,803,238.52 | 9,346.56 |
| Total owners’ (or shareholders’) equity attributable to owners of the parent company | 2,091,599,671.75 | 2,091,643,942.08 | 44,270.33 |
| Minority interests | 93,812,755.26 | 93,801,506.62 | -11,248.64 |
| Total owners’ (or shareholders’) equity | 2,185,412,427.01 | 2,185,445,448.70 | 33,021.69 |
| Total liabilities and owners’ (or shareholders’) equity | 3,226,204,326.69 | 3,267,623,103.31 | 41,418,776.62 |
Description of adjustments on each line item:
√ Applicable □ N/A
The Company has initially implemented the New Lease Standard since January 1, 2021 to recognizeright-of-use assets and lease liabilities, and adjust relevant line items.
Balance Sheet of the Parent Company
In RMB
| Item | December 31, 2020 | January 1, 2021 | Adjusted amount |
| Current Assets: | |||
| Cash and bank balances | 709,932,686.71 | 709,932,686.71 | |
| Held-for-trading financial assets | 114,000,000.00 | 114,000,000.00 | |
| Derivative financial assets | |||
| Notes receivable | 2,314,628.91 | 2,314,628.91 | |
| Accounts receivable | 567,539,506.79 | 567,539,506.79 | |
| Receivables financing | 100,000.00 | 100,000.00 | |
| Prepayments | 11,001,439.23 | 13,163,045.06 | 2,161,605.83 |
| Other receivables | 71,654,117.57 | 71,654,117.57 | |
| Including: Interest receivable | |||
| Dividend receivable | |||
| Inventories | 169,022,971.44 | 169,022,971.44 | |
| Contract assets | 3,720,160.50 | 3,720,160.50 | |
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 1,297,388.01 | 1,297,388.01 | |
| Total current assets | 1,650,582,899.16 | 1,652,744,504.99 | 2,161,605.83 |
| Non-current Assets: | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term accounts receivable | 13,196,087.78 | 13,196,087.78 | |
| Long-term equity investment | 421,648,284.99 | 421,648,284.99 | |
| Investment in other equity instruments | 7,075,419.38 | 7,075,419.38 | |
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 57,409,189.33 | 57,409,189.33 | |
| Construction in progress | 37,982,329.74 | 37,982,329.74 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 29,494,047.23 | 29,494,047.23 | |
| Intangible assets | 319,438,893.42 | 319,438,893.42 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term prepaid expenses | 9,562,162.36 | 9,562,162.36 | |
| Deferred tax assets | 6,680,188.67 | 7,000,018.34 | 319,829.67 |
| Other non-current assets | 5,411,561.28 | 5,411,561.28 | |
| Total non-current assets | 878,404,116.95 | 908,217,993.85 | 29,813,876.90 |
| Total assets | 2,528,987,016.11 | 2,560,962,498.84 | 31,975,482.73 |
| Current Liabilities: | |||
| Short-term borrowings | 11,410,560.27 | 11,410,560.27 | |
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 32,313,678.21 | 32,313,678.21 | |
| Accounts payable | 210,885,240.65 | 210,885,240.65 | |
| Advance from customers | 2,688,210.54 | 2,688,210.54 | |
| Contract liabilities | 20,609,190.34 | 20,609,190.34 | |
| Employee benefits payable | 28,514,763.09 | 28,514,763.09 | |
| Taxes payable | 5,830,858.89 | 5,830,858.89 | |
| Other payables | 23,058,804.83 | 23,058,804.83 | |
| Including: Interest payable | |||
| Dividend payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 1,001,024.66 | 15,192,394.42 | 14,191,369.76 |
| Other current liabilities | 1,918,391.60 | 1,918,391.60 | |
| Total current liabilities | 338,230,723.08 | 352,422,092.84 | 14,191,369.76 |
| Non-current Liabilities: | |||
| Long-term borrowings | 29,029,715.07 | 29,029,715.07 | |
| Bonds payable | |||
| Where: Preferred shares | |||
| Perpetual bonds | |||
| Leasing liabilities | 17,434,875.25 | 17,434,875.25 | |
| Long-term payables | 3,262,450.00 | 3,262,450.00 | |
| Long-term employee benefits payable | |||
| Estimated liabilities | 16,345,891.60 | 16,345,891.60 | |
| Deferred income | 14,450,411.10 | 14,450,411.10 | |
| Deferred tax liabilities | |||
| Other non-current liabilities | |||
| Total non-current liabilities | 63,088,467.77 | 80,523,343.02 | 17,434,875.25 |
| Total liabilities | 401,319,190.85 | 432,945,435.86 | 31,626,245.01 |
| Owners’ Equity (Shareholders’ Equity): | |||
| Paid-in capital (or share capital) | 452,756,901.00 | 452,756,901.00 | |
| Other equity instruments | |||
| Where: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserve | 1,351,261,718.84 | 1,351,261,718.84 | |
| Less: Treasury shares | |||
| Other comprehensive income | |||
| Special reserve | |||
| Surplus reserve | 33,964,638.84 | 33,999,562.61 | 34,923.77 |
| Undistributed profit | 289,684,566.58 | 289,998,880.53 | 314,313.95 |
| Total owners’ (or shareholders’) equity | 2,127,667,825.26 | 2,128,017,062.98 | 349,237.72 |
| Total liabilities and owners’ (or shareholders’) equity | 2,528,987,016.11 | 2,560,962,498.84 | 31,975,482.73 |
Description of adjustments on each line item:
√ Applicable □ N/A
The Company has initially implemented the New Lease Standard since January 1, 2021 to recognizeright-of-use assets and lease liabilities, and adjust relevant line items.
(4). Description of retrospective adjustments on comparable data in previous periods upon theinitial implementation of the New Lease Standard from 2021
□ Applicable √ N/A
45. Others
□ Applicable √ N/A
VI. Taxes
1. Major categories of taxes and tax rates
Description of major categories of taxes and tax rates
√ Applicable □ N/A
| Category of tax | Basis of tax computation | Tax rate |
| Value-added tax (VAT) | VAT payable is the difference of the output tax calculated based on the incomes from selling goods and taxable services in accordance with the Tax Law, less the input tax allowed to be reduced in the period | 3%, 6%, 9%, 13% |
| City maintenance and construction tax | Turnover tax payable | 5%, 7% |
| Enterprise income tax | Taxable income | 8.25%、8.70%、8.84%、15%、16.5%、20%、21%、25% |
| Education surcharges | Turnover tax payable | 3% |
| Local education surcharges | Turnover tax payable | 2% |
Disclosure of taxpayers with different rates of enterprise income tax:
√ Applicable □ N/A
| Taxpayer | Rate of enterprise income tax (%) |
| Appotronics Corporation Limited | 15% |
| Fengmi (Beijing) Technology Co., Ltd. | 15% |
| Appotronics Hong Kong Limited | 8.25%、16.5% |
| Beijing Orient Appotronics Technology Co., Ltd. | 20% |
| Fabulus Technology Hong Kong Limited | 16.5% |
| JoveAI Innovation, Inc. | 8.70%、8.84%、21% |
| Appotronics USA, Inc. | 21% |
| TECHNOLOGY INC | 21% |
| JoveAI Limited | Tax exemption |
| WEMAX LLC | 21% |
| Shenzhen Appotronics Display Device Co., Ltd. | 20% |
| Appotronics Technology (Changzhou) Co., Ltd. | 20% |
| Fabulus Display (Beijing) Co., Ltd. | 20% |
| Qingda Appotronics (Xiamen) Technology Co., Ltd. | 20% |
| Shenzhen Appotronics Home Line Technology Co., Ltd. | 20% |
| Shenzhen Appotronics Laser Technology Co., Ltd. | 20% |
| Shenzhen Appotronics Xiaoming Technology Co., Ltd. | 20% |
| JoveAI Asia Company Limited | 20% |
| Limited | 16.5% |
| Chongqing Ewei Ecommerce Co., Ltd. | 20% |
| Chongqing Guangbo Ecommerce Co., Ltd. | 20% |
| Shenzhen Orange Juice Energy Technology Co., Ltd. | 20% |
| Tianjin Bonian Film Partnership (LP) | Tax exemption |
| CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd. | 15% |
| Other taxpayers except above | 25% |
Note:
1. Appotronics Hong Kong Limited, as domiciled in Hong Kong, one of which can apply the two-level income tax system, namely, applying the tax rate of 8.25% for the first HKD 2 million taxable incomeand 16.50% for the remaining taxable income.
2. JoveAI Limited, as domiciled in the Cayman Islands, is exempt from enterprise income tax.
3. Appotronics USA, Inc., as domiciled in the United States, applies the federal enterprise income taxrate of 21%.
4. JoveAI Innovation, Inc., as domiciled in the United States, applies the federal enterprise incometax rate of 21%, and the Delaware state enterprise income tax rate of 8.70%.
5. TECHNOLOGY INC, as domiciled in the United States, applies the federal enterprise income taxrate of 21%.
6. JoveAI Asia Company Limited, as domiciled in Vietnam, applies the enterprise income tax rate of20%.
7. WEMAX LLC, as domiciled in the United States, applies the federal enterprise income tax rate of21%.
8. Limited, ,as domiciled in Hong Kong, applies the income tax rate of 16.50%.
2. Tax incentives
√ Applicable □ N/A
1. Enterprise income tax
(1) On December 9, 2019, the Company obtained the High-tech Enterprise Certificate (CertificateNo.: GR201944204257) jointly issued by Shenzhen Science and Technology Innovation Commission,Shenzhen Finance Bureau and Shenzhen Tax Service of State Taxation Administration with a valid termof three years. Therefore, the Company paid the enterprise income tax at a rate of 15% in 2021.
(2) On December 17, 2021, Fengmi (Beijing) Technology Co., Ltd. obtained the High-tech EnterpriseCertificate (Certificate No.: GR202111004001) jointly issued by Beijing Municipal Science andTechnology Commission, Beijing Finance Bureau and Beijing Tax Service of State TaxationAdministration with a valid term of three years. It paid the enterprise income tax at a rate of 15% in 2021.
(3) On October 15, 2019, CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd. obtained theHigh-tech Enterprise Certificate (Certificate No.: GR201911002720) jointly issued by Beijing MunicipalScience and Technology Commission, Beijing Finance Bureau and Beijing Tax Service of State TaxationAdministration with a valid term of three years. It paid the enterprise income tax at a rate of 15% in 2021.
(4) In accordance with the Notice of the Ministry of Finance and the State Taxation Administrationon Implementing the Inclusive Tax Deduction and Exemption Policies for Micro and Small Enterprises(Cai Shui [2019] No. 13), and the Announcement of the Ministry of Finance and the State TaxationAdministration on Implementing Preferential Income Tax Policies for Micro and Small Enterprises andIndividually-owned Businesses (Announcement No. 12 in 2021 of the Ministry of Finance and the StateTaxation Administration), the annual taxable income of a small low-profit enterprise that is not more thanRMB 1 million shall be levied with the enterprise income tax rate at a discount of 12.5%, namely, forwhich the applicable enterprise income tax rate is 20%; for the annual taxable income more than RMB 1million but no more than RMB 3 million, the taxable income shall be calculated at a discount of 50%,namely, for which the applicable enterprise income tax rate is 20%. The following companies are qualifiedfor enjoying such tax incentives: Beijing Orient Appotronics Technology Co., Ltd., Shenzhen AppotronicsDisplay Device Co., Ltd., Appotronics Technology (Changzhou) Co., Ltd., Fabulus Display (Beijing) Co.,Ltd., Qingda Appotronics (Xiamen) Technology Co., Ltd., Shenzhen Appotronics Home Line TechnologyCo., Ltd., Shenzhen Appotronics Laser Technology Co., Ltd., Shenzhen City Appotronics XiaomingTechnology Co., Ltd., Chongqing Ewei Ecommerce Co., Ltd., Chongqing Guangbo Ecommerce Co., Ltd.,and Shenzhen Orange Juice Energy Technology Co., Ltd.
2. Value-added tax (VAT)
(1) In accordance with the Notice of the Ministry of Finance and the State Administration of Taxationon Value-added Tax Policies for Software Products (Cai Shui [2011] No. 100), for self-developed andproduced software products sold by general VAT taxpayers, the tax-refund-upon-collection policy isapplicable to the part of their actual VAT burden in excess of 3% after the VAT has been collected at atax rate of 17%. Fengmi (Beijing) Technology Co., Ltd. and Shenzhen Appotronics Software TechnologyCo., Ltd. are qualified for enjoying such tax incentives.
(2) In accordance with Article 1 (26) of Annex 3 of the Notice of the Ministry of Finance and theState Administration of Taxation on Implementing the Pilot Program of Replacing Business Tax withValue-Added Tax in an All-round Manner (Cai Shui [2016] No. 36), taxpayers are exempted from VAT ifthey provide technology transfer, technology development, and technology consultation and services inconnection therewith. The Company is qualified for enjoying such tax incentives.
3. Others
□ Applicable √ N/A
VII. Notes to items in the consolidated financial statements
1. Monetary funds
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 5,680.24 | 5,858.56 |
| Bank deposits | 924,308,952.81 | 1,020,747,657.62 |
| Other monetary funds | 33,415,198.10 | 17,007,057.09 |
| Total | 957,729,831.15 | 1,037,760,573.27 |
| Where: Total oversea deposits | 71,132,556.44 | 78,611,378.23 |
Other informationIn other monetary funds, an amount of RMB 26,131,914.42, as security deposits, is subject to restrictionin use; in bank deposits, an amount of RMB 40,000,000.00, as 3-year term deposits, is subject to restrictionin use; the bank deposits contain unmature interests of RMB 402,750.00.
2. Held-for-trading financial assets
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Financial assets at fair value through profit or loss | 417,200,000.00 | 114,000,000.00 |
| Including: | ||
| Equity instrument investment | 46,200,000.00 | |
| Structural deposits | 371,000,000.00 | 114,000,000.00 |
| Total | 417,200,000.00 | 114,000,000.00 |
Other information:
□ Applicable √ N/A
3. Derivative financial assets
□ Applicable √ N/A
4. Notes receivable
(1). Categories of notes receivable
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Bank acceptances | 4,020,000.00 | 950,000.00 |
| Commercial acceptances | 1,236,603.03 | 2,776,328.91 |
| Total | 5,256,603.03 | 3,726,328.91 |
(2). Notes receivable pledged by the Company at the end of the period
□ Applicable √ N/A
(3). Notes receivable which are undue as at the balance sheet date but endorsed or discounted by theCompany at the end of the period
√ Applicable □ N/A
In RMB
| Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
| Bank acceptances | 310,000.00 | |
| Commercial acceptances | 742,845.61 | |
| Total | 1,052,845.61 |
(4). Notes transferred to accounts receivable due to drawer’s failure in cashing at the end of the
period
√ Applicable □ N/A
In RMB
| Item | Amounts transferred to accounts receivable as of the end of the period |
| Commercial acceptances | 498,000.00 |
| Total | 498,000.00 |
(5). Disclosure by categories of provision for bad debts
√ Applicable □ N/A
In RMB
| Category | Closing balance | Opening balance | ||||||||
| Carrying amount | Bad debt provision | Book value | Carrying amount | Bad debt provision | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage of provision (%) | Amount | Percentage (%) | Amount | Percentage of provision (%) | |||
| Provision for bad debts made by group | 5,321,687.40 | 100.00 | 65,084.37 | 1.22 | 5,256,603.03 | 3,872,451.48 | 100.00 | 146,122.57 | 3.77 | 3,726,328.91 |
| Where: | ||||||||||
| Bank acceptance bills | 4,020,000.00 | 75.54 | 4,020,000.00 | 950,000.00 | 24.53 | 950,000.00 | ||||
| Commercial acceptance bills | 1,301,687.40 | 24.46 | 65,084.37 | 5.00 | 1,236,603.03 | 2,922,451.48 | 75.47 | 146,122.57 | 5.00 | 2,776,328.91 |
| Total | 5,321,687.40 | / | 65,084.37 | / | 5,256,603.03 | 3,872,451.48 | / | 146,122.57 | / | 3,726,328.91 |
Provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
√ Applicable □ N/A
Item by group: Commercial acceptance bills and bank acceptance bills
In RMB
| Name | Closing balance | ||
| Notes receivable | Bad debt provision | Proportion of provision (%) | |
| Group of bank acceptance bills | 4,020,000.00 | ||
| Commercial acceptance bills group | 1,301,687.40 | 65,084.37 | 5.00 |
| Total | 5,321,687.40 | 65,084.37 | 1.22 |
Recognition criterion to make the bad debt provision by group and explanation
□ Applicable √ N/A
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,please disclose relevant information subject to the disclosure of the bad debt provision for otherreceivables:
□ Applicable √ N/A
(6). Provision for bad debts
√ Applicable □ N/A
In RMB
| Category | Opening balance | Changes for the current period | Closing balance | ||
| Provision | Recovery or reversal | Write off or cancellation | |||
| Commercial acceptance bills | 146,122.57 | -81,038.20 | 65,084.37 | ||
| Total | 146,122.57 | -81,038.20 | 65,084.37 | ||
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
Other information:
None
(7). Notes receivable actually canceled in the current period
□ Applicable √ N/A
Other information
□ Applicable √ N/A
5. Accounts receivable
(1). Disclosure by aging
√ Applicable □ N/A
In RMB
| Aging | Closing balance of carrying amount |
| Within 1 year | |
| Where: Subitems within 1 year | |
| Subtotal of items within 1 year | 420,707,573.33 |
| 1 to 2 years | 4,630,552.27 |
| 2 to 3 years | 1,763,773.18 |
| Over 3 years | 525,040.26 |
| Total | 427,626,939.04 |
(2). Disclosure by categories of provision for bad debts
√ Applicable □ N/A
In RMB
| Category | Closing balance | Opening balance | ||||||||
| Carrying amount | Bad debt provision | Book value | Carrying amount | Bad debt provision | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage of provision (%) | Amount | Percentage (%) | Amount | Percentage of provision (%) | |||
| Provision for bad debts made individually | 2,117,500.23 | 0.50 | 1,279,675.64 | 60.43 | 837,824.59 | |||||
| Provision for bad debts made by group | 425,509,438.81 | 99.50 | 23,212,791.53 | 5.46 | 402,296,647.28 | 361,346,260.89 | 100.00 | 19,685,428.46 | 5.45 | 341,660,832.43 |
| Where: | ||||||||||
| Accounts receivable for which the provision for bad debts is made by aging group | 425,509,438.81 | 99.50 | 23,212,791.53 | 5.46 | 402,296,647.28 | 361,346,260.89 | 100.00 | 19,685,428.46 | 5.45 | 341,660,832.43 |
| Total | 427,626,939.04 | / | 24,492,467.17 | / | 403,134,471.87 | 361,346,260.89 | / | 19,685,428.46 | / | 341,660,832.43 |
Provision for bad debts made individually:
√ Applicable □ N/A
In RMB
| Name | Closing balance | |||
| Carrying amount | Bad debt provision | Proportion of provision (%) | Reason for provision | |
| Legal person 1 | 1,675,649.18 | 837,824.59 | 50.00 | Since its group defaulted on debts to a large extent, there are high expected credit losses |
| Legal person 2 | 372,000.00 | 372,000.00 | 100.00 | The amounts are expected to be unrecoverable |
| Legal person 3 | 69,851.05 | 69,851.05 | 100.00 | The amounts are expected to be unrecoverable |
| Total | 2,117,500.23 | 1,279,675.64 | 60.43 | / |
Explanation about provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
√ Applicable □ N/A
Item by group: Accounts receivable for which the provision for bad debts is made by aging group
In RMB
| Name | Closing balance | ||
| Accounts receivable | Bad debt provision | Proportion of provision (%) | |
| Within 1 year | 419,247,195.15 | 20,962,359.75 | 5.00 |
| 1-2 years | 4,360,916.24 | 1,090,229.06 | 25.00 |
| 2-3 years | 1,482,249.41 | 741,124.71 | 50.00 |
| Over 3 years | 419,078.01 | 419,078.01 | 100.00 |
| Total | 425,509,438.81 | 23,212,791.53 | 5.46 |
Recognition criterion to make the bad debt provision by group and explanation:
□ Applicable √ N/A
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,please disclose relevant information subject to the disclosure of the bad debt provision for otherreceivables:
□ Applicable √ N/A
(3). Provision for bad debts
√ Applicable □ N/A
In RMB
| Category | Opening balance | Changes for the current period | Closing balance | |||
| Provision | Recovery or reversal | Write off or cancellation | Other changes | |||
| Provision for bad debts made individually | 1,279,675.64 | 1,279,675.64 | ||||
| Provision for bad debts made by group | 19,685,428.46 | 3,607,893.25 | 80,530.18 | 23,212,791.53 | ||
| Total | 19,685,428.46 | 4,887,568.89 | 80,530.18 | 24,492,467.17 | ||
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
(4). Accounts receivable actually canceled in the current period
√ Applicable □ N/A
In RMB
| Item | Cancellation amount |
| Accounts receivable actually canceled | 80,530.18 |
In which significant amounts canceled are described as below:
□ Applicable √ N/A
Description of accounts receivable cancellation:
□ Applicable √ N/A
(5). Top five closing balances of accounts receivable categorized by debtors
√ Applicable □ N/A
In RMB
| Entity | Closing balance | Proportion to the total closing balance of accounts receivable (%) | Closing balance of bad debt provision |
| Xiaomi Communications Technologies Co., Ltd. and its affiliates | 132,000,017.31 | 30.87 | 6,600,000.87 |
| Beijing Jingdong Century Trading Co., Ltd. | 50,150,835.41 | 11.73 | 2,507,541.77 |
| BARCO | 43,607,149.06 | 10.20 | 2,180,357.47 |
| Guangdong SACA Precision Manufacturing Co., Ltd. and its affiliates | 31,829,748.05 | 7.44 | 1,591,487.40 |
| Beijing Digital China Co., Ltd. | 29,222,810.00 | 6.83 | 1,461,140.50 |
| Total | 286,810,559.83 | 67.07 | 14,340,528.01 |
Other informationNone
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ N/A
(7). Assets and liabilities arising from transfer of accounts receivable and continued involvement
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
6. Receivables financing
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Bank acceptance bills | 244,860.00 | 11,959,000.00 |
| Total | 244,860.00 | 11,959,000.00 |
Changes in amount and fair value of receivables financing:
□ Applicable √ N/A
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,please disclose relevant information subject to the disclosure of the bad debt provision for otherreceivables:
□ Applicable √ N/A
Other information:
√ Applicable □ N/A
Notes receivable which are undue as at the balance sheet date but endorsed or discounted by theCompany at the end of the period
| Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
| Bank acceptance bills | 220,000.00 | |
| Subtotal | 220,000.00 |
The acceptors of bank acceptance bills are large-sized commercial banks with high credit ratings andlisted joint-stock commercial banks. Because they always have high credit ratings, it is less probable thatbank acceptance bills will not get paid upon maturity; therefore, the Company has derecognized endorsedor discounted bank acceptance bills accepted by banks with high credit ratings. However, if such notes areunable to be paid at maturity, the Company will still be jointly and severally liable to the note holderspursuant to the Negotiable Instruments Law.
7. Prepayments
(1). Disclosure of prepayments by aging
√ Applicable □ N/A
In RMB
| Aging | Closing balance | Opening balance | ||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| Within 1 year | 90,997,714.13 | 92.74 | 45,488,048.90 | 92.50 |
| 1 to 2 years | 7,119,256.70 | 7.26 | 3,686,582.62 | 7.50 |
| Total | 98,116,970.83 | 100.00 | 49,174,631.52 | 100.00 |
Reasons for overdue settlement of prepayments with significant amounts aged more than 1 year:
| Entity | Closing balance | Reason for not settled |
| Kyocera SLD Laser, Inc. | 5,738,130.00 | Advance payment has been made for high-end lasers, which have not been produced |
| Subtotal | 5,738,130.00 |
(2). Top five closing balances of prepayments categorized by receivers
√ Applicable □ N/A
| Entity | Closing balance | Proportion to the total closing balance of prepayments (%) |
| CVTE and its affiliates | 35,612,308.02 | 36.30 |
| Nanyang Nanfang Intelligent Photoelectric Co., Ltd. | 24,698,617.60 | 25.17 |
| Kyocera SLD Laser, Inc. | 5,738,130.00 | 5.85 |
| Beijing Jingdong Century Trading Co., Ltd. | 2,956,805.98 | 3.01 |
| Shenzhen Smart-core Cloud Information Technology Co., Ltd. | 2,360,242.95 | 2.41 |
| Total | 71,366,104.55 | 72.74 |
Other informationNone
Other information
□ Applicable √ N/A
8. Other receivables
Presented by items
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividend receivable | 12,623,886.00 | |
| Other receivables | 17,848,709.66 | 12,534,062.15 |
| Total | 30,472,595.66 | 12,534,062.15 |
Other information:
□ Applicable √ N/A
Interest receivable
(1). Categories of interest receivable
□ Applicable √ N/A
(2). Significant interests overdue
□ Applicable √ N/A
(3). Provision for bad debts
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
Dividend receivable
(1). Dividend receivable
√ Applicable □ N/A
In RMB
| Project (or investee) | Closing balance | Opening balance |
| Dividend distribution from GDC Technology Limited (BVI) | 12,623,886.00 | |
| Total | 12,623,886.00 |
(2). Dividends receivable with significant amounts aged more than 1 year
□ Applicable √ N/A
(3). Provision for bad debts
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
Other receivables
(1). Disclosure by aging
√ Applicable □ N/A
In RMB
| Aging | Closing balance of carrying amount |
| Within 1 year | |
| Where: Subitems within 1 year | |
| Subtotal of items within 1 year | 11,160,182.06 |
| 1 to 2 years | 1,260,022.20 |
| 2 to 3 years | 5,004,737.49 |
| Over 3 years | 1,353,671.40 |
| Total | 18,778,613.15 |
(2). Categories by the nature of other receivables
√ Applicable □ N/A
In RMB
| Nature of other receivables | Closing balance of carrying amount | Opening balance of carrying amount |
| Deposits/margins/petty cash | 9,664,667.87 | 8,832,850.67 |
| Withholding | 727,191.75 | 380,123.97 |
| Temporary receivables | 735,913.53 | 383,488.89 |
| Compensation receivable | 7,650,840.00 | 3,577,279.61 |
| Total | 18,778,613.15 | 13,173,743.14 |
(3). Provision for bad debts
√ Applicable □ N/A
In RMB
| Bad debt provision | Stage I | Stage II | Stage III | Total |
| 12-month ECL in the future | Lifetime ECL (without credit impairment) | Lifetime ECL (with credit impairment) | ||
| Balance as at January 1, 2021 | 639,680.99 | 639,680.99 | ||
| Balance as at January 1, 2021 in the current period | ||||
| --transferred to Stage II | -6,833.12 | 6,833.12 | ||
| --transferred to Stage III | ||||
| --reversed to Stage II | ||||
| --reversed to Stage I | ||||
| Provision | 262,890.02 | 27,332.48 | 290,222.50 | |
| Reversal | ||||
| Write-off | ||||
| Cancellation | ||||
| Other changes | ||||
| Balance as at December 31, 2021 | 895,737.89 | 34,165.60 | 929,903.49 |
Description of significant changes in the balance of other receivables with changed provisions for lossesin the current period:
□ Applicable √ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of financialinstruments has been increased significantly in the current period:
□ Applicable √ N/A
(4). Provision for bad debts
√ Applicable □ N/A
In RMB
| Category | Opening balance | Changes for the current period | Closing balance | |||
| Provision | Recovery or reversal | Write off or cancellation | Other changes | |||
| Provision made by group Bad debt provision | 639,680.99 | 290,222.50 | 929,903.49 | |||
| Total | 639,680.99 | 290,222.50 | 929,903.49 | |||
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
(5). Other receivables actually canceled in the current period
□ Applicable √ N/A
(6). Top five closing balances of other receivables categorized by debtors
√ Applicable □ N/A
In RMB
| Entity | Nature of other receivables | Closing balance | Aging | Proportion to the balance of other receivables (%) | Bad debt provision Closing balance |
| GDC Technology Limited (BVI) and its affiliates | Indemnity receivable/Temporary receivables | 7,662,715.00 | Within 1 year | 40.81 | 383,135.75 |
| Shenzhen Meisheng Industry Co., Ltd. | Deposits/margins/petty cash | 3,574,618.00 | Over 3 years | 19.04 | 178,730.90 |
| Shenzhen High-tech Industry Promotion Center | Deposits/margins/petty cash | 1,310,675.20 | 1-2 years, 2-3 years, over 3 years | 6.98 | 65,533.76 |
| Hong Kong Science & Technology Parks Corporation | Deposits/margins/petty cash | 993,737.96 | Within 1 year, 1-2 years, 2-3 years | 5.29 | 49,686.84 |
| Beijing Dongsheng Bozhan Technology Development Co., Ltd. | Deposits/margins/petty cash | 816,155.64 | Within 1 year, 1-2 years, 2-3 years | 4.35 | 40,807.78 |
| Total | / | 14,357,901.80 | / | 76.47 | 717,895.03 |
Shenzhen Science and Technology Assessment Management Center has been renamed to Shenzhen High-tech Industry Promotion Center.
(7). Accounts receivable involving government grants
□ Applicable √ N/A
(8). Other receivables derecognized due to transfer of financial assets
□ Applicable √ N/A
(9). Assets and liabilities arising from transfer of other receivables and continued involvement
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
9. Inventories
(1). Categories of inventories
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision for decline in value of inventories/impairment of contract performance cost | Book value | Carrying amount | Provision for decline in value of inventories/impairment of contract performance cost | Book value | |
| Raw materials | 493,448,593.04 | 21,083,424.30 | 472,365,168.74 | 243,262,463.77 | 12,343,116.67 | 230,919,347.10 |
| Work in progress | 30,541,893.32 | 2,147,311.13 | 28,394,582.19 | 23,130,163.72 | 533,475.37 | 22,596,688.35 |
| Goods on hand | 229,438,709.58 | 13,362,893.39 | 216,075,816.19 | 152,306,656.10 | 17,204,698.44 | 135,101,957.66 |
| Contract performance cost | 7,263,873.33 | 729,907.80 | 6,533,965.53 | |||
| Goods upon delivery | 43,433,678.08 | 1,652,492.43 | 41,781,185.65 | 15,345,357.08 | 15,345,357.08 | |
| Materials for consigned processing | 4,492,945.01 | 22,530.31 | 4,470,414.70 | 15,064,657.09 | 215,866.48 | 14,848,790.61 |
| Total | 808,619,692.36 | 38,998,559.36 | 769,621,133.00 | 449,109,297.76 | 30,297,156.96 | 418,812,140.80 |
(2). Provision for decline in value of inventories and impairment of contract performance cost
√ Applicable □ N/A
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance | ||
| Provision | Others | Reversal or write-off | Others | |||
| Raw materials | 12,343,116.67 | 20,000,399.66 | 7,620,640.33 | 3,639,451.70 | 21,083,424.30 | |
| Work in progress | 533,475.37 | 2,077,039.94 | 463,204.18 | 2,147,311.13 | ||
| Goods on hand | 17,204,698.44 | 14,558,782.71 | 17,220,069.55 | 1,180,518.21 | 13,362,893.39 | |
| Contract performance cost | 729,907.80 | 729,907.80 | ||||
| Goods upon delivery | 1,652,492.43 | 1,652,492.43 | ||||
| Materials for consigned processing | 215,866.48 | 22,530.30 | 215,866.47 | 22,530.31 | ||
| Total | 30,297,156.96 | 39,041,152.84 | 25,519,780.53 | 4,819,969.91 | 38,998,559.36 | |
Since Fabulus Display (Beijing) Co., Ltd. was deregistered during the reporting period, the provisionsfor loss on inventories were transferred out and presented in “Others” under “Decrease” for the currentperiod.
Specify reasons for specific determination basis of net realizable value, and reversal or write-off ofthe provision for decline in value of inventories
| Item | Specific basis for determining the net realizable value | Reason for reversal to the provisions for loss on inventories in the current period | Reason for writing off the provisions for decline in value of on inventories in the current period |
| Raw materials | The net realizable value of raw materials is determined as the historical average selling price or actual average selling price of finished goods in the ordinary course of business less the estimated costs of completion, and the estimated costs necessary to make the sale and relevant taxes. | For the inventories of which a provision for decline in value has been made in prior period, their net realizable values have increased | The Company has consumed/sold the inventories for which a provision for decline in value has been made at the beginning of the current period. |
| Work in progress | The net realizable value of work in progress is determined as the historical average selling price or actual average selling price of finished goods in the ordinary course of business less the estimated costs of completion, and the estimated costs necessary to make the sale and relevant taxes. | No reversal | The Company has consumed the inventories for which a provision for decline in value has been made at the beginning of the current period. |
| Goods on hand | For inventories directly used for sale, the net realizable value is determined as the historical average selling price or actual average selling price less the estimated costs necessary to make the sale and relevant taxes. | For the inventories of which a provision for decline in value has been made in prior period, their net realizable values have increased | The Company has consumed/sold the inventories for which a provision for decline in value has been made at the beginning of the current period. |
| Item | Specific basis for determining the net realizable value | Reason for reversal to the provisions for loss on inventories in the current period | Reason for writing off the provisions for decline in value of on inventories in the current period |
| Materials for consigned processing | The net realizable value is determined as the historical average selling price or actual average selling price of finished goods in the ordinary course of business less the estimated costs of completion, and the estimated costs necessary to make the sale and relevant taxes | No reversal | The Company has consumed the inventories for which a provision for decline in value has been made at the beginning of the current period. |
Contract performance cost
| Item | Opening balance | Increase | Amortization | Provision for impairment made in the current period | Closing balance |
| Entrusted development | 6,507,958.06 | 3,843,821.31 | 729,907.80 | 1,934,228.95 | |
| Overseas freight | 5,634,098.45 | 1,034,361.87 | 4,599,736.58 | ||
| Subtotal | 12,142,056.51 | 4,878,183.18 | 729,907.80 | 6,533,965.53 |
(3). Description of capitalized amount of borrowing costs included in the closing balance ofinventories
□ Applicable √ N/A
(4). Description of amortization of contract performance cost during the period
□ Applicable √ N/A
Other information
□ Applicable √ N/A
10. Contract assets
(1). Description of contract assets
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision for impairment | Book value | Carrying amount | Provision for impairment | Book value | |
| Warranty security receivable | 292,607.50 | 198,551.88 | 94,055.62 | 492,467.50 | 181,635.38 | 310,832.12 |
| Goods payment | 5,342,438.43 | 1,532,634.82 | 3,809,803.61 | 4,842,771.16 | 1,408,947.78 | 3,433,823.38 |
| Total | 5,635,045.93 | 1,731,186.70 | 3,903,859.23 | 5,335,238.66 | 1,590,583.16 | 3,744,655.50 |
(2). Amount and reasons of major changes in the book value during the reporting period
□ Applicable √ N/A
(3). Description of provision for impairment made on contract assets during the period
√ Applicable □ N/A
In RMB
| Item | Provision | Reversal | Write-off/cancellation in the period | Reason |
| Provision for impairment made by group | 140,603.54 | |||
| Total | 140,603.54 | / |
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,please disclose relevant information subject to the disclosure of the bad debt provision for otherreceivables:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
11. Held-for-sale assets
□ Applicable √ N/A
12. Non-current assets due within one year
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Long-term receivables due within one year | 3,473,049.18 |
| Total | 3,473,049.18 |
Debt investments and other debt investments with significant amounts at the end of the period
□ Applicable √ N/A
Other information
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision for impairment | Book value | Carrying amount | Provision for impairment | Book value | |
| Long-term receivables due within one year | 4,520,449.18 | 1,047,400.00 | 3,473,049.18 | |||
| Total | 4,520,449.18 | 1,047,400.00 | 3,473,049.18 | |||
13. Other current assets
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Cost of returned goods receivable | 503,062.91 | 1,381,990.01 |
| Input VAT to be deducted | 52,258,757.92 | 11,338,961.82 |
| Prepaid enterprise income tax | 281,243.63 | |
| Total | 52,761,820.83 | 13,002,195.46 |
Other informationNone
14. Debt investments
(1). Description of debt investments
□ Applicable √ N/A
(2). Debt investments with significant amounts at the end of the period
□ Applicable √ N/A
(3). Description of provision for impairment
□ Applicable √ N/A
Basis for recognizing the amount of provisions for impairment and evaluating whether the credit risk offinancial instruments has been increased significantly in the current period
□ Applicable √ N/A
Other information
□ Applicable √ N/A
15. Other debt investments
(1). Description of other debt investments
□ Applicable √ N/A
(2). Other debt investments with significant amounts at the end of the period
□ Applicable √ N/A
(3). Description of provision for impairment
□ Applicable √ N/A
Basis for recognizing the amount of provisions for impairment and evaluating whether the credit risk offinancial instruments has been increased significantly in the current period
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
16. Long-term receivables
(1). Description of long-term receivables
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance | Range of discount rate | ||||
| Carrying amount | Bad debt provision | Book value | Carrying amount | Bad debt provision | Book value | ||
| Goods sold on installment payment | 7,528,000.00 | 1,376,400.00 | 6,151,600.00 | 15,000,000.00 | 750,000.00 | 14,250,000.00 | 4.65% |
| Labor service by installment receivable | |||||||
| Less: Financing income not realized | -358,047.26 | -358,047.26 | -1,053,912.22 | -1,053,912.22 | 4.65% | ||
| Total | 7,169,952.74 | 1,376,400.00 | 5,793,552.74 | 13,946,087.78 | 750,000.00 | 13,196,087.78 | / |
(2). Provision for bad debts
√ Applicable □ N/A
In RMB
| Bad debt provision | Stage I | Stage II | Stage III | Total |
| 12-month ECL in the future | Lifetime ECL (without credit impairment) | Lifetime ECL (with credit impairment) | ||
| Balance as at January 1, 2021 | 750,000.00 | 750,000.00 | ||
| Balance as at January 1, 2021 in the current period | ||||
| --transferred to Stage II | ||||
| --transferred to Stage III | ||||
| --reversed to Stage II | ||||
| --reversed to Stage I | ||||
| Provision | 626,400.00 | 626,400.00 | ||
| Reversal | ||||
| Write-off | ||||
| Cancellation | ||||
| Other changes | ||||
| Balance as at December 31, 2021 | 1,376,400.00 | 1,376,400.00 |
Description of significant changes in the balance of long-term receivables with changed provisions forlosses in the current period:
□ Applicable √ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of financialinstruments has been increased significantly in the current period
□ Applicable √ N/A
(3). Long-term receivables derecognized due to transfer of financial assets
□ Applicable √ N/A
(4). Assets and liabilities arising from transfer of long-term receivables and continued involvement
□ Applicable √ N/A
Other information
□ Applicable √ N/A
17. Long-term equity investments
√ Applicable □ N/A
In RMB
| Investees | Opening Balance | Changes for the current period | Closing Balance | Closing balance of provision for impairment | |||||||
| Additional investment | Decreased investment | Investment profit or loss under equity method | Adjustment in other comprehensive income | Other equity changes | Declared cash dividends or profits | Provision for impairment | Others | ||||
| I. Joint venture | |||||||||||
| Subtotal | |||||||||||
| II. Associates | |||||||||||
| Cinionic Limited | 131,406,424.64 | 1,632,357.09 | -3,043,782.40 | -3,070,571.93 | 126,924,427.40 | ||||||
| GDC Technology Limited (BVI) | 131,338,347.84 | 18,718,129.73 | 2,676,967.58 | 12,771,594.00 | 26,714,806.72 | 166,676,657.87 | |||||
| Subtotal | 262,744,772.48 | 20,350,486.82 | -366,814.82 | 12,771,594.00 | 23,644,234.79 | 293,601,085.27 | |||||
| Total | 262,744,772.48 | 20,350,486.82 | -366,814.82 | 12,771,594.00 | 23,644,234.79 | 293,601,085.27 | |||||
Other information
The Company acquired 8% equity interests in GDC Technology Limited (BVI) in accordance with the performance compensation agreement, leading to the increasein long-term equity investment by RMB 30,251,520.00, which was presented in “Others” under “Changes for the current period”; The remaining amount in “Others”under “Changes for the current period” was the amount from the change in foreign currency exchange gain or loss.
18. Other equity instrument investments
(1). Description of other equity instrument investments
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Shen Zhen Timewaying Technology Co., Ltd. | 7,075,419.38 | 7,075,419.38 |
| Shenzhen Bevix Technology Co., Ltd. | 4,900,000.00 | |
| Total | 7,075,419.38 | 11,975,419.38 |
(2). Description of equity investments not held for trading
√ Applicable □ N/A
In RMB
| Item | Dividends income recognized for the current period | Accumulated gains | Accumulated losses | Amounts to retained earnings from other comprehensive income | Reasons for designating as financial assets at fair value through other comprehensive income | Reasons for transferring to retained earnings from other comprehensive income |
| Shen Zhen Timewaying Technology Co., Ltd. | Subject to the management’s intention of holding | |||||
| Shenzhen Bevix Technology Co., Ltd. | Subject to the management’s intention of holding |
Other information:
√ Applicable □ N/A
The Company’s equity investments in Shen Zhen Timewaying Technology Co., Ltd. are mainly forpromoting future business cooperation rather than making transactions, hence they are designated asinvestments in equity instruments at fair value through other comprehensive income.
19. Other non-current financial assets
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
20. Investment properties
Measurement mode of investment propertiesN/A
21. Fixed assets
Presented by items
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 470,410,450.18 | 447,571,328.91 |
| Disposal of fixed assets | ||
| Total | 470,410,450.18 | 447,571,328.91 |
Other information:
□ Applicable √ N/A
Fixed assets
(1). Description of fixed assets
√ Applicable □ N/A
In RMB
| Item | Machinery and equipment | Transportation equipment | Electronic equipment and others | Operating leased equipment | Total |
| I. Cost: | |||||
| 1. Opening balance | 103,894,713.95 | 1,020,400.05 | 37,318,561.28 | 563,293,898.80 | 705,527,574.08 |
| 2. Increase | 34,137,572.05 | 151,000.00 | 13,755,422.37 | 89,077,882.95 | 137,121,877.37 |
| (1) Purchase | 34,242,137.95 | 151,000.00 | 12,353,059.57 | 46,746,197.52 | |
| (2) Transfer from construction in progress | 761,661.57 | 89,077,882.95 | 89,839,544.52 | ||
| (3) Transfer from inventories | 663,054.88 | 663,054.88 | |||
| (4) Currency movement | -104,565.90 | -22,353.65 | -126,919.55 | ||
| 3. Decrease | 8,441,672.65 | 1,820,636.17 | 1,549,422.48 | 11,811,731.30 | |
| (1) Disposal or retirement | 4,286,867.33 | 1,625,911.93 | 1,189,321.60 | 7,102,100.86 | |
| (2) Transfer to inventories | 4,154,805.32 | 194,724.24 | 360,100.88 | 4,709,630.44 | |
| 4. Closing balance | 129,590,613.35 | 1,171,400.05 | 49,253,347.48 | 650,822,359.27 | 830,837,720.15 |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 41,528,570.15 | 447,672.23 | 17,109,387.09 | 198,870,615.70 | 257,956,245.17 |
| 2. Increase | 19,153,101.36 | 145,660.96 | 7,408,945.88 | 81,930,074.00 | 108,637,782.20 |
| (1) Provision | 19,164,690.75 | 145,660.96 | 7,426,913.10 | 81,930,074.00 | 108,667,338.81 |
| (2) Currency movement | -11,589.39 | -17,967.22 | -29,556.61 | ||
| 3. Decrease | 3,732,615.28 | 1,365,972.17 | 1,397,822.35 | 6,496,409.80 | |
| (1) Disposal or retirement | 2,738,951.98 | 1,255,132.75 | 1,074,144.39 | 5,068,229.12 | |
| (2) Transfer to inventories | 993,663.30 | 110,839.42 | 323,677.96 | 1,428,180.68 | |
| 4. Closing balance | 56,949,056.23 | 593,333.19 | 23,152,360.80 | 279,402,867.35 | 360,097,617.57 |
| III. Provision for impairment | |||||
| 1. Opening balance | |||||
| 2. Increase | 329,652.40 | 329,652.40 | |||
| (1) Provision | 329,652.40 | 329,652.40 | |||
| 3. Decrease | |||||
| (1) Disposal or retirement | |||||
| 4. Closing balance | 329,652.40 | 329,652.40 | |||
| IV. Book value | |||||
| 1. Closing balance | 72,641,557.12 | 578,066.86 | 26,100,986.68 | 371,089,839.52 | 470,410,450.18 |
| 2. Opening balance | 62,366,143.80 | 572,727.82 | 20,209,174.19 | 364,423,283.10 | 447,571,328.91 |
(2). Temporarily idle fixed assets
√ Applicable □ N/A
In RMB
| Item | Original book value | Accumulated depreciation | Provision for impairment | Book value | Remark |
| Operating leased equipment | 7,432,794.11 | 4,052,213.77 | 17,585.72 | 3,362,994.62 |
(3). Fixed assets acquired under finance lease
□ Applicable √ N/A
(4). Fixed assets leased out under operating lease
√ Applicable □ N/A
In RMB
| Item | Closing balance of carrying amount |
| Operating leased equipment | 367,726,844.90 |
(5). Fixed assets of which certificates of title have not been obtained
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
Disposal of fixed assets
□ Applicable √ N/A
22. Construction in progress
Presented by items
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Construction in progress | 148,620,511.35 | 51,576,850.72 |
| Materials for construction | ||
| Total | 148,620,511.35 | 51,576,850.72 |
Other information:
□ Applicable √ N/A
Construction in progress
(1). Description of construction in progress
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision for impairment | Book value | Carrying amount | Provision for impairment | Book value | |
| Headquarter buildings | 133,111,026.64 | 133,111,026.64 | 37,982,329.74 | 37,982,329.74 | ||
| Decoration construction | 18,265.97 | 18,265.97 | ||||
| Light sources to be leased | 15,491,218.74 | 15,491,218.74 | 13,594,520.98 | 13,594,520.98 | ||
| Total | 148,620,511.35 | 148,620,511.35 | 51,576,850.72 | 51,576,850.72 | ||
(2). Changes in significant constructions in progress for the current period
√ Applicable □ N/A
In RMB
| Item | Budget amount | Opening Balance | Increase | Amount transferred to fixed assets | Other decreases | Closing Balance | Amount injected as a proportion of budget amount (%) | Construction progress | Amount of accumulated capitalized interest | Where: Capitalized interest for the period | Interest capitalization rate for the period (%) | Source of funds |
| Headquarter buildings | 534,635,200.00 | 37,982,329.74 | 95,128,696.90 | 133,111,026.64 | 24.9 | 24.9 | 689,208.13 | 689,208.13 | 4.56 | Self-funded capital |
| Light sources to be leased | 13,594,520.98 | 99,097,636.39 | 89,077,882.95 | 8,123,055.68 | 15,491,218.74 | Self-funded capital | ||||||
| Total | 534,635,200.00 | 51,576,850.72 | 194,226,333.29 | 89,077,882.95 | 8,123,055.68 | 148,602,245.38 | / | / | 689,208.13 | 689,208.13 | / | / |
(3). Provision for impairment losses for construction in progress in the current period
□ Applicable √ N/A
Other information
□ Applicable √ N/A
Materials for construction
(1). Description of materials for construction
□ Applicable √ N/A
23. Productive biological assets
(1). productive biological assets measured at cost
□ Applicable √ N/A
(2). productive biological assets measured at fair value
□ Applicable √ N/A
Other information
□ Applicable √ N/A
24. Oil and gas assets
□ Applicable √ N/A
25. Right-of-use assets
√ Applicable □ N/A
In RMB
| Item | Total | |
| I. Original book value | ||
| 1. Opening balance | 71,832,525.03 | 71,832,525.03 |
| 2. Increase | 9,823,558.16 | 9,823,558.16 |
| (1) Lease in | 10,013,335.82 | 10,013,335.82 |
| (2) Other changes | -189,777.66 | -189,777.66 |
| 3. Decrease | 2,146,042.14 | 2,146,042.14 |
| (1) Disposal | 2,146,042.14 | 2,146,042.14 |
| 4. Closing balance | 79,510,041.05 | 79,510,041.05 |
| II. Accumulated depreciation | ||
| 1. Opening balance | 32,464,454.86 | 32,464,454.86 |
| 2. Increase | 20,241,675.43 | 20,241,675.43 |
| (1) Provision | 20,389,229.02 | 20,389,229.02 |
| (2) Other changes | -147,553.59 | -147,553.59 |
| 3. Decrease | ||
| (1) Disposal | ||
| 4. Closing balance | 52,706,130.29 | 52,706,130.29 |
| III. Provision for impairment | ||
| 1. Opening balance | ||
| 2. Increase | ||
| (1) Provision | ||
| 3. Decrease | ||
| (1) Disposal | ||
| 4. Closing balance | ||
| IV. Book value | ||
| 1. Closing balance | 26,803,910.76 | 26,803,910.76 |
| 2. Opening balance | 39,368,070.17 | 39,368,070.17 |
Other information:
For the difference between the opening balance of the year and the closing balance of the prior year (as ofDecember 31, 2020), refer to V.44 of Section X for details.
26. Intangible assets
(1). Description of intangible assets
√ Applicable □ N/A
In RMB
| Item | Land use rights | Patents | Software | Total |
| I. Original book value | ||||
| 1. Opening balance | 330,630,000.00 | 23,247,800.00 | 13,996,355.81 | 367,874,155.81 |
| 2. Increase | 2,991,914.48 | 2,991,914.48 | ||
| (1) Purchase | 3,005,552.17 | 3,005,552.17 | ||
| (2) Currency movement | -13,637.69 | -13,637.69 | ||
| 3. Decrease | 3,187,850.00 | 557,923.89 | 3,745,773.89 | |
| (1) Disposal | 557,923.89 | 557,923.89 | ||
| (2) Other changes | 3,187,850.00 | 3,187,850.00 | ||
| 4. Closing balance | 330,630,000.00 | 20,059,950.00 | 16,430,346.40 | 367,120,296.40 |
| II. Accumulated amortization | ||||
| 1. Opening balance | 27,552,500.10 | 14,860,270.10 | 4,973,150.01 | 47,385,920.21 |
| 2. Increase | 11,021,000.04 | 1,530,330.04 | 2,907,014.58 | 15,458,344.66 |
| (1) Provision | 11,021,000.04 | 1,530,330.04 | 2,916,303.15 | 15,467,633.23 |
| (2) Currency movement | -9,288.57 | -9,288.57 | ||
| 3. Decrease | 557,923.89 | 557,923.89 | ||
| (1) Disposal | 557,923.89 | 557,923.89 | ||
| 4. Closing balance | 38,573,500.14 | 16,390,600.14 | 7,322,240.70 | 62,286,340.98 |
| III. Provision for impairment | ||||
| 1. Opening balance | ||||
| 2. Increase | 3,669,349.86 | 3,669,349.86 | ||
| (1) Provision | 3,669,349.86 | 3,669,349.86 | ||
| 3. Decrease | ||||
| (1) Disposal | ||||
| 4. Closing balance | 3,669,349.86 | 3,669,349.86 | ||
| IV. Book value | ||||
| 1. Closing balance | 292,056,499.86 | 9,108,105.70 | 301,164,605.56 | |
| 2. Opening balance | 303,077,499.90 | 8,387,529.90 | 9,023,205.80 | 320,488,235.60 |
The proportion of intangible assets generated by the Company’s internal research and development to thebalance of intangible assets at the end of the period is 0.
The other changes in the original book value of patent use rights were caused because the patent userights acquired in previous years can no longer generate cash inflow for the Company due to technologyiteration; as a result, the Company decided not to make further payment in accordance with the agreement.Instead, the original book value was used to write off the long-term payables provided in previous years,the original book value of intangible assets was assessed on a temporary basis, and such patent use rightswere fully impaired.
(2). Land use rights of which certificates of title have not been obtained
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
27. Development expenditure
□ Applicable √ N/A
28. Goodwill
(1). Original book value of goodwill
□ Applicable √ N/A
(2). Impairment provision of goodwill
□ Applicable √ N/A
(3). Relevant information of groups of assets or combinations of groups of assets where the goodwill
is recognized
□ Applicable √ N/A
(4). Specify test procedure, key parameters of impairment of goodwill (such as increase rate at theprojection period, increase rate at the steady period, profit rate, discount rate, and projectionperiod upon the estimates of the presented value of future cash flow) as well as recognitionmethod for impairment loss
□ Applicable √ N/A
(5). Impacts on test of goodwill impairment
□ Applicable √ N/A
Other information
□ Applicable √ N/A
29. Long-term prepaid expenses
√ Applicable □ N/A
In RMB
| Item | Opening balance | Increase | Amortization | Other decreases | Closing balance |
| Decoration construction | 11,020,278.57 | 5,906,070.66 | 7,008,105.89 | 42,524.96 | 9,875,718.38 |
| RTO gas for the screen project | 107,339.45 | 19,266.03 | 88,073.42 | ||
| Leased software | 552,068.22 | 389,695.20 | 162,373.02 | ||
| Total | 11,572,346.79 | 6,013,410.11 | 7,417,067.12 | 42,524.96 | 10,126,164.82 |
Other information:
None
30. Deferred tax assets and deferred tax liabilities
(1). Deferred tax assets that are not offset
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Provision for impairment of assets | 43,598,496.34 | 6,542,132.46 | 28,773,276.08 | 4,625,714.28 |
| Unrealized profits for insider transactions | 359,910,538.71 | 53,986,580.82 | 343,108,987.56 | 85,451,876.99 |
| Deductible losses | 3,339,193.87 | 834,798.46 | ||
| Estimated liabilities | 30,413,119.32 | 4,561,967.90 | 24,854,195.43 | 4,578,959.70 |
| Share-based payment expenses | 103,555,776.28 | 15,645,325.93 | 639,138.44 | 101,038.96 |
| Deferred income | 10,035,489.25 | 1,505,323.38 | 15,797,285.68 | 2,504,280.31 |
| Leases | 1,474,346.78 | 221,152.02 | 2,147,584.57 | 323,676.36 |
| Total | 548,987,766.68 | 82,462,482.51 | 418,659,661.63 | 98,420,345.06 |
For the difference between the opening balance of the year and the closing balance of the prior year (as ofDecember 31, 2020), refer to V.44 of Section X for details.
(2). Deferred tax liabilities that are not offset
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred tax Liabilities | Taxable temporary differences | Deferred tax Liabilities | |
| Long-term accounts receivable | 9,407,088.13 | 1,411,063.22 | 13,097,031.17 | 1,964,554.68 |
| Gains from changes in fair values | 2,200,000.00 | 330,000.00 | ||
| Total | 11,607,088.13 | 1,741,063.22 | 13,097,031.17 | 1,964,554.68 |
(3). Deferred tax assets and deferred tax liabilities that are presented at the net amount after offset
√ Applicable □ N/A
In RMB
| Item | Closing set-off amounts of deferred tax assets and liabilities | Closing balance of deferred tax assets or liabilities after set-off | Opening set-off amount of deferred tax assets and liabilities | Opening balance of deferred tax assets or liabilities after set-off |
| Deferred tax assets | 1,741,063.22 | 80,721,419.29 | 1,964,554.68 | 96,455,790.38 |
| Deferred tax liabilities | 1,741,063.22 | 1,964,554.68 |
For the difference between the opening balance of the year and the closing balance of the prior year (asof December 31, 2020), refer to V.44 of Section X for details.
(4). Details of unrecognized deferred tax assets
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Deductible losses | 326,263,103.27 | 275,961,696.98 |
| Provision for impairment of assets | 29,041,507.01 | 24,335,696.06 |
| Unrealized profits for insider transactions | 36,978,135.00 | 17,750,166.76 |
| Estimated liabilities | 6,015,569.62 | 3,945,159.22 |
| Deferred income | 231,492.83 | 925,971.47 |
| Share-based payment expenses | 11,982,368.41 | 612,638.54 |
| Leases | 1,726,120.92 | |
| Profit distribution from partnership enterprises | 40,790.41 | |
| Provision for impairment of other equity instrument investments | 4,900,000.00 | |
| Total | 417,179,087.47 | 323,531,329.03 |
(5). Deductible losses, for which no deferred tax assets are recognized, will expire in the followingyears
√ Applicable □ N/A
In RMB
| Year | Closing balance | Opening balance | Remark |
| 2021 | 9,487,530.31 | ||
| 2022 | 1,747,737.55 | 11,900,329.00 | |
| 2023 | 27,969,288.80 | 42,584,893.83 | |
| 2024 | 66,901,681.33 | 69,711,255.86 | |
| 2025 | 68,119,959.02 | 91,878,757.39 | |
| 2026 | 98,077,911.35 | ||
| No expiry date | 63,446,525.22 | 50,398,930.59 | |
| Total | 326,263,103.27 | 275,961,696.98 | / |
Other information:
√ Applicable □ N/A
Overseas subsidiaries have the deductible loss of RMB 63,446,525.22, for which there is no expiry date.
31. Other non-current assets
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision for impairment | Book value | Carrying amount | Provision for impairment | Book value | |
| Prepayment for purchase of long-term assets | 10,998,641.77 | 10,998,641.77 | 6,299,781.06 | 6,299,781.06 | ||
| Total | 10,998,641.77 | 10,998,641.77 | 6,299,781.06 | 6,299,781.06 | ||
Other information:
None
32. Short-term borrowings
(1). Categories of short-term borrowings
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Guaranteed loans | 5,560,000.00 | 77,223,937.39 |
| Credit loans | 2,468.61 | 11,299,169.33 |
| Interest | 8,409.50 | 255,746.14 |
| Total | 5,570,878.11 | 88,778,852.86 |
Description for categories of short-term borrowings:
None
(2). Short-term borrowings overdue but not yet repaid
□ Applicable √ N/A
Of which the significant overdue short-term borrowings are described as below:
□ Applicable √ N/A
Other information
□ Applicable √ N/A
33. Held-for-trading financial liabilities
□ Applicable √ N/A
34. Derivative financial liabilities
□ Applicable √ N/A
35. Notes payable
(1). Presented by notes payable
√ Applicable □ N/A
In RMB
| Category | Closing balance | Opening balance |
| Bank acceptance bills | 134,378,967.61 | 116,822,674.67 |
| Total | 134,378,967.61 | 116,822,674.67 |
Total notes payable matured but not paid yet is RMB 0 at the end of the period.
36. Accounts payable
(1). Presented by accounts payable
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Amounts payable for purchase | 419,966,567.27 | 226,494,815.90 |
| Total | 419,966,567.27 | 226,494,815.90 |
(2). Accounts payable with significant amounts aged more than 1 year
□ Applicable √ N/A
Other information
□ Applicable √ N/A
37. Receipts in advance
(1). Presented by receipts in advance
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Advance payments of recharge fees | 130,288,312.62 | 153,258,189.88 |
| Total | 130,288,312.62 | 153,258,189.88 |
(2). Receipts in advance with significant amounts aged more than 1 year
√ Applicable □ N/A
In RMB
| Item | Closing balance | Reasons for not repaid or carried-forward |
| Jiangsu Happy Blue Sea Cinema Development Co., Ltd. | 19,608,611.27 | Lease payments received in advance |
| Total | 19,608,611.27 | / |
Other information
□ Applicable √ N/A
38. Contract liabilities
(1). Description of contract liabilities
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Goods payment | 45,541,629.55 | 31,518,312.59 |
| Total | 45,541,629.55 | 31,518,312.59 |
(2). Amount and reasons of major changes in the book value during the reporting period
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
39. Employee benefits payable
(1). Presented by employee benefits payable
√ Applicable □ N/A
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| I. Short-term benefits | 46,031,631.17 | 368,072,603.29 | 350,203,477.82 | 63,900,756.64 |
| II. Post-employment benefits-defined contribution plan | 73,934.98 | 14,330,662.48 | 14,218,363.80 | 186,233.66 |
| III. Termination benefits | 1,291,876.39 | 1,259,779.18 | 32,097.21 | |
| Total | 46,105,566.15 | 383,695,142.16 | 365,681,620.80 | 64,119,087.51 |
(2). Presented by short-term employee benefits
√ Applicable □ N/A
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| I. Wages or salaries, bonuses, allowances and subsidies | 45,956,435.30 | 331,055,519.39 | 313,590,736.48 | 63,421,218.21 |
| II. Staff welfare | 9,783,129.58 | 9,492,129.58 | 291,000.00 | |
| III. Social security contributions | 53,986.52 | 10,073,278.61 | 10,004,679.76 | 122,585.37 |
| Where: Medical insurance | 53,183.08 | 9,597,504.73 | 9,533,391.75 | 117,296.06 |
| Work injury insurance | 786.46 | 245,176.91 | 240,691.04 | 5,272.33 |
| Maternity insurance | 16.98 | 230,596.97 | 230,596.97 | 16.98 |
| IV. Housing funds | 989.00 | 16,421,418.62 | 16,422,407.62 | |
| V. Union running costs and employee education costs | 20,220.35 | 739,257.09 | 693,524.38 | 65,953.06 |
| VI. Short-term paid leaves | ||||
| VII. Short-term profit sharing plan | ||||
| Total | 46,031,631.17 | 368,072,603.29 | 350,203,477.82 | 63,900,756.64 |
(3). Presented by defined contribution plan
√ Applicable □ N/A
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Basic pensions | 73,886.98 | 13,895,719.11 | 13,789,028.01 | 180,578.08 |
| 2. Unemployment insurance | 48.00 | 434,943.37 | 429,335.79 | 5,655.58 |
| 3. Enterprise annuity contribution | ||||
| Total | 73,934.98 | 14,330,662.48 | 14,218,363.80 | 186,233.66 |
Other information:
□ Applicable √ N/A
40. Taxes payable
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Value-added tax (VAT) | 4,246,010.43 | 12,205,136.88 |
| Enterprise income tax | 11,889,909.01 | 5,477,611.87 |
| Individual income tax | 1,613,116.75 | 1,067,512.87 |
| City maintenance and construction tax | 552,264.60 | 478,213.88 |
| Education surcharges | 242,838.49 | 204,948.80 |
| Local education surcharges | 161,892.32 | 136,632.54 |
| Stamp duty | 832,145.97 | 294,612.70 |
| Annual franchise right tax | 8,012.66 | 7,177.40 |
| Total | 19,546,190.23 | 19,871,846.94 |
Other information:
None
41. Other payables
Presented by items
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Interest payable | ||
| Dividend payable | ||
| Other payables | 54,115,784.80 | 58,821,952.01 |
| Total | 54,115,784.80 | 58,821,952.01 |
Other information:
□ Applicable √ N/A
Interest payable
(1). Presented by categories
□ Applicable √ N/A
Dividends payable
(1). Presented by categories
□ Applicable √ N/A
Other payables
(1). Other payables presented by nature
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Withholding | 117,948.38 | 110,389.10 |
| Deposits/margins | 6,388,325.48 | 6,600,475.05 |
| Withdrawals in advance | 43,694,291.49 | 21,126,906.43 |
| Amount of equity transfer payable | 11,548,387.32 | |
| Borrowings | 19,343,613.33 | |
| Temporary receipts payable | 3,915,219.45 | 92,180.78 |
| Total | 54,115,784.80 | 58,821,952.01 |
For the difference between the opening balance of the year and the closing balance of the prior year (as ofDecember 31, 2020), refer to V.44 of Section X for details.
(2). Other payables with significant amounts aged more than 1 year
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
42. Held-for-sale liabilities
□ Applicable √ N/A
43. Non-current liabilities due within one year
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Long-term borrowings due within one year | 135,843,834.00 | 181,057,099.90 |
| Lease liabilities due within one year | 18,770,827.17 | 18,607,011.39 |
| Interest payable | 170,455.18 | 360,312.56 |
| Total | 154,785,116.35 | 200,024,423.85 |
Other information:
For the difference between the opening balance of the year and the closing balance of the prior year (as ofDecember 31, 2020), refer to V.44 of Section X for details.
44. Other current liabilities
Description of other current liabilities
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Amounts payable for goods returned | 16,804,816.23 | |
| Taxes to be written off | 2,756,287.89 | 3,045,831.07 |
| Total | 19,561,104.12 | 3,045,831.07 |
Changes in short-term bonds payable:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
45. Long-term borrowings
(1). Categories of long-term borrowings
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Pledge borrowings | ||
| Mortgage borrowings | ||
| Guaranteed loans | 313,799,994.00 | 29,000,000.00 |
| Credit loans | 2,043,500.81 |
| Guaranteed loans and loans against collateral | 54,430,844.66 | 33,693,828.00 |
| Interest payable | 404,775.98 | 107,952.72 |
| Total | 368,635,614.64 | 64,845,281.53 |
Description for categories of long-term borrowings:
None
Other description, including interest range:
□ Applicable √ N/A
46. Bonds payable
(1). Bonds payable
□ Applicable √ N/A
(2). Changes in bonds payable: (excluding other financial instruments such as preference shares,perpetual bonds and others classified as financial liabilities)
□ Applicable √ N/A
(3). Description of converting terms and period of convertible corporate bonds
□ Applicable √ N/A
(4). Description of other financial instruments classified as financial liabilitiesBasic information of other financial instruments including outstanding preferred shares and perpetualbonds at the end of the period
□ Applicable √ N/A
Changes in financial instruments including outstanding preferred shares and perpetual bonds at the end ofthe period
□ Applicable √ N/A
Other financial instruments classified as financial liabilities:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
47. Leasing liabilities
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Lease payment | 10,789,352.69 | 23,804,845.36 |
| Total | 10,789,352.69 | 23,804,845.36 |
Other information:
For the difference between the opening balance of the year and the closing balance of the prior year (as ofDecember 31, 2020), refer to V.44 of Section X for details.
48. Long-term payables
Presented by items
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Long-term payables | 3,262,450.00 | |
| Special payables | ||
| Total | 3,262,450.00 |
Other information:
□ Applicable √ N/A
Long-term payables
(1). Long-term payables presented by nature
√ Applicable □ N/A
In RMB
| Item | Opening balance | Closing balance |
| Purchase of patent use rights by installment | 3,262,450.00 |
Other information:
None
Special payables
(1). Special payables presented by nature
□ Applicable √ N/A
49. Long-term employee benefits payable
□ Applicable √ N/A
50. Provisions
√ Applicable □ N/A
In RMB
| Item | Opening balance | Closing balance | Reason |
| Product quality warranty | 27,240,470.53 | 35,744,039.63 | Expenses for “three guarantees” services |
| Amounts payable for goods returned | 1,558,884.12 | 684,649.31 | |
| Total | 28,799,354.65 | 36,428,688.94 | / |
Other description, including significant assumptions and estimates relative to material provisions:
None
51. Deferred income
Description of deferred income
√ Applicable □ N/A
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance | Reason |
| Government grants | 16,723,257.15 | 4,070,480.27 | 10,526,755.34 | 10,266,982.08 | |
| Total | 16,723,257.15 | 4,070,480.27 | 10,526,755.34 | 10,266,982.08 | / |
Items relating to government grants:
√ Applicable □ N/A
In RMB
| Liabilities | Opening balance | Increased government grants for the current period | Amount recognized in non-operating income for the current period | Amount recognized in other income for the current period | Other changes | Closing balance | Related to assets/income |
| Trichromatic Laser Display Complete Equipment Production Demonstration Line | 13,340,196.54 | 2,815,480.27 | 7,476,233.49 | 8,679,443.32 | Related to income | ||
| Ultra-high Brightness Laser Light Source Engineering Technology Research Center, the Science, Technology, and | 1,683,873.26 | 1,683,873.26 | Related to income |
| Innovation Commission of Shenzhen | |||||||
| Key Technology of Trichromatic Laser Display Complete Equipment Industrialization | 255,000.00 | 255,000.00 | Related to income | ||||
| 8K Ultra High Definition Laser Display Technology Engineering Research Center | 1,699,187.35 | 774,722.75 | 924,464.60 | Related to assets | |||
| R&D of key technologies for ultra high-definition micro laser projector optical engine based on light-emitting ceramic devices | 1,000,000.00 | 336,925.84 | 663,074.16 | Related to income | |||
| Subtotal | 16,723,257.15 | 4,070,480.27 | 10,526,755.34 | 10,266,982.08 |
Other information:
√ Applicable □ N/A
Government grants included in the current profit or loss are disclosed in VII.84 of Section X in details.
52. Other non-current liabilities
□ Applicable √ N/A
53. Share capital
√ Applicable □ N/A
In RMB
| Opening balance | Changes (+, -) | Closing balance | |||||
| Issue New share | Bonus shares | Capitalization of capital reserve | Others | Subtotal | |||
| Total shares | 452,756,901.00 | 452,756,901.00 | |||||
Other information:
None
54. Other equity instruments
(1). Basic information of other financial instruments including outstanding preferred shares andperpetual bonds at the end of the period
□ Applicable √ N/A
(2). Changes in financial instruments including outstanding preferred shares and perpetual bonds
at the end of the period
□ Applicable √ N/A
Changes of other equity instruments in the current period, reasons for such change and basis for relatedaccounting treatments:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
55. Capital reserve
√ Applicable □ N/A
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Capital premium (Share premium) | 1,241,202,420.08 | 1,241,202,420.08 | ||
| Other capital reserve | 7,818,571.07 | 151,584,145.50 | 159,402,716.57 | |
| Total | 1,249,020,991.15 | 151,584,145.50 | 1,400,605,136.65 |
Other description, including changes in the current period and reasons for changes:
1) On March 5, 2021, the Company entered into the Share Transfer Agreement on (Chongqing)Innovative Technology Co., Ltd. with Suzhou Industrial Park Shunwei Technology Venture CapitalPartnership (Limited Partnership), Tianjin Jinmi Investment Partnership (Limited Partnership), andShenzhen Fengye Investment Consulting Limited Partnership (Limited Partnership), under which theCompany transferred 45% equity interests in its wholly-owned subsidiary Foremovie at the transfer priceof RMB 1, respectively; after receiving the transfer price, the Company recognized the capital reserve(other capital reserve) of RMB 3.
2) On March 23, 2021, the Company’s subsidiary Foremovie entered into the Investment Agreementof (Chongqing) Innovative Technology Co., Ltd. with Shenzhen Pengfeng No. 1 Venture CapitalPartnership (Limited Partnership), Shenzhen Pengfeng No. 3 Venture Capital Partnership (LimitedPartnership), Chongqing Liangjiang New Area Chengwei Equity Investment Fund Partnership (LimitedPartnership), and LAI Yongsai, under which Chongqing Liangjiang New Area Chengwei EquityInvestment Fund Partnership (Limited Partnership), Shenzhen Pengfeng No. 1 Venture Capital Partnership(Limited Partnership), Shenzhen Pengfeng No. 3 Venture Capital Partnership (Limited Partnership), andLAI Yongsai made the total investment of RMB 200,000,000.00 in Foremovie, including RMB17,543,860.00 recognized in Foremovie’s paid-in capital, and the remaining RMB 182,456,140.00recognized in Foremovie’s capital reserve. The Company recognized capital reserve (other capital reserve)at the difference of RMB 92,622,244.75 between the identifiable net assets of the subsidiary according toits shareholding ratio before and after the capital increase.
3) On October 14, 2019, the Company held the eighteenth session of the first Board of Directors andthe eighth session of the first Board of supervisors, in which resolutions on matters related to the 2019Restricted Stock Incentive Plan were discussed and approved; as the Company’s implementation of thisincentive plan was approved in the general meeting of shareholders, it was determined that 4.4 millionshares of restricted shares were granted to 169 incentive participants who met the grant conditions at agrant price of RMB 17.5 per share on the grant date of October 14, 2019. On October 13, 2020, theCompany held the 27
th meeting of the first Board of Directors and the 14
thmeeting of the first Board ofSupervisors, at which the Proposal on Adjusting the Grant Price of Restricted Shares under the 2019Restricted Share Incentive Plan and the Proposal on Granting Reserved Restricted Shares to Grantees ofShare Incentives under the 2019 Restricted Share Incentive Plan were reviewed and passed, approving to
adjust the grant price of restricted shares from RMB 17.5 per share to RMB 17.425 per share. As theCompany’s implementation of this incentive plan was approved in the general meeting of shareholders, itwas determined that 1.10 million shares of restricted shares were granted to 38 grantees of share incentiveswho met the grant conditions at a grant price of RMB 17.425 per share on the grant date of October 13,2020. On May 14, 2021, at the 2020 annual general meeting of shareholders, the Proposal on PreliminaryPlan on Profit Distribution for 2020 was reviewed and passed, approving to adjust the grant price ofrestricted shares from RMB 17.425 per share to RMB 17.37 per share due to the ex-rights effect of profitdistribution. The total expense of equity-settled share-based payments amounted to RMB 7,796,726.37,in which RMB 6,987,470.10 was recognized in the capital reserve (other capital reserve) and RMB809,256.27 was charged to the amount attributable to minority interests.
4) On January 1, 2021, the Company granted restricted shares to senior officers of the subsidiaryCINEAPPO with shares of its shareholding platform with the grant waiting period of 24 months, for whichit’s determined that the grant date shall be January 1, 2021 at the grant price of RMB 4.00 per share. Thetotal expense of equity-settled share-based payments amounted to RMB 4,206,150.00, in which RMB2,658,286.80 was recognized in the capital reserve (other capital reserve) and RMB 1,547,863.20 wascharged to the amount attributable to minority interests.
5) On April 22, 2021, the Company held the 31
st meeting of the first Board of Directors and the 18
th
meeting of the first Board of Supervisors, at which the Proposal on Initial Granting Restricted Shares toGrantees was reviewed and passed; as the Company’s implementation of this incentive plan was approvedin the general meeting of shareholders, it was determined that 17.1000 million shares of restricted shareswere granted to 220 incentive participants who met the grant conditions at a grant price of RMB 21.00 pershare, RMB 17.50 per share, and RMB 18.50 per share, respectively, on the grant date of April 22, 2021.The total expense of equity-settled share-based payments amounted to RMB 38,356,472.38, in whichRMB 35,909,218.95 was recognized in the capital reserve (other capital reserve) and RMB 2,447,253.43was charged to the amount attributable to minority interests.
6) On December 7, 2021, the Company held the 6
th
meeting of the second Board of Directors and the
thmeeting of the second Board of Supervisors, at which the Proposal on Initial Granting RestrictedShares to Grantees was reviewed and passed; as the Company’s implementation of this incentive plan wasapproved in the general meeting of shareholders, it was determined that 8.4000 million shares of restricted
shares were granted to 55 incentive participants who met the grant conditions at a grant price of RMB
20.00 per share and RMB 23.00 per share, respectively, on the grant date of December 7, 2021. The totalexpense of equity-settled share-based payments amounted to RMB 2,602,214.14, in which RMB2,593,206.52 was recognized in the capital reserve (other capital reserve) and RMB 9,007.62 was chargedto the amount attributable to minority interests.
7) On December 31, 2021, Shenzhen Fengye Investment Consulting Limited Partnership (LimitedPartnership), the employee shareholding platform for the Company’s subsidiary Foremovie, reviewed andpassed the Resolution on Granting Equity Shares of Shenzhen Fengye Investment Consulting LimitedPartnership (Limited Partnership), under which it was determined that 1.5505 million shares were grantedto 36 incentive participants who met the grant conditions at a grant price of RMB 1 per share (each sharecorresponding to RMB 1 of Foremovie’s registered capital), where 1.0000 million shares were granted ona one-off basis, while 0.5505 million shares were subject to restriction provisions and allocated over theperiod of service. At the time of granting the share-based payment above, the fair value of Foremovie’sequity interests was RMB 11.40 per registered capital; correspondingly, the Company recognized thecapital reserve (other capital reserve) of RMB 4,077,125.62 and the minority interests of RMB6,326,358.98.
8) On December 31, 2021, with respect to the temporary difference by which the fair value at the endof period of restricted shares is greater than the fair value at the grant date, the Company recognized thedeferred tax assets of RMB 7,138,424.39, the capital reserve (other capital reserve) of RMB 6,736,589.76,and the minority interests of RMB 401,834.63.
56. Treasury shares
□ Applicable √ N/A
57. Other comprehensive income
√ Applicable □ N/A
In RMB
| Item | Opening Balance | Amount for the current period | Closing Balance | |||||
| Amount incurred for current period before tax | Less: Amount previously included in other comprehensive income and transferred to profit or loss for the period | Less: Amount previously included in other comprehensive income and transferred to retained earnings for the period | Less: Income tax expenses | Attributable to owners of the parent company after tax | Attributable to minority shareholders after tax | |||
| I. Other comprehensive income that cannot be reclassified subsequently to profit or loss | -4,900,000.00 | -4,900,000.00 | -4,900,000.00 | |||||
| Where: Changes from remeasurement of defined benefit plans | ||||||||
| Other comprehensive income that cannot be | ||||||||
| reclassified to profit or loss under the equity method | ||||||||
| Changes in fair value of investments in other equity instruments | -4,900,000.00 | -4,900,000.00 | -4,900,000.00 | |||||
| Changes in fair value of enterprises’ own credit risks | ||||||||
| II. Other comprehensive income that will be reclassified to profit or loss | -3,214,291.93 | -8,677,010.78 | -8,726,220.67 | 49,209.89 | -11,940,512.60 | |||
| Where: Other comprehensive income that will be reclassified to profit or loss under the equity method | -366,814.82 | -366,814.82 | -366,814.82 | |||||
| Changes in fair value of other debt investments | ||||||||
| Amount of financial assets reclassified to other |
| comprehensive income | ||||||||
| Provision for credit impairment of other debt investments | ||||||||
| Reserve for cash flow hedges | ||||||||
| Exchange differences on translation of financial statements denominated in foreign currencies | -3,214,291.93 | -8,310,195.96 | -8,359,405.85 | 49,209.89 | -11,573,697.78 | |||
| Total other comprehensive income | -3,214,291.93 | -13,577,010.78 | -13,626,220.67 | 49,209.89 | -16,840,512.60 |
Other description, including adjustments on transferring effective portion of cash flow hedges to amount upon initial recognition of the hedged item:
58. Special reserve
□ Applicable √ N/A
59. Surplus reserve
√ Applicable □ N/A
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserve | 35,277,103.34 | 20,988,764.97 | 56,265,868.31 | |
| Total | 35,277,103.34 | 20,988,764.97 | 56,265,868.31 |
Surplus reserve description, including changes in the current period and reasons for changes:
The Company made provisions for statutory surplus reserves at 10% of the net profits realized by theparent company in the period.For the difference between the opening balance of the year and the closing balance of the prior year (as ofDecember 31, 2020), refer to V.44 of Section X for details.
60. Undistributed profits
√ Applicable □ N/A
In RMB
| Item | Current period | Prior period |
| Retained profits at the end of prior period before adjustment | 357,793,891.96 | 288,975,820.29 |
| Total adjusted undistributed profits at the beginning of the period (Add: +; Less: -) | 9,346.56 | 1,278,734.88 |
| Retained profits at the beginning of the period after adjustment | 357,803,238.52 | 290,254,555.17 |
| Add: Net profit attributable to owners of the parent company for the period | 233,364,344.09 | 113,847,873.06 |
| Less: Appropriation to statutory surplus reserve | 20,988,764.97 | 12,441,955.44 |
| Appropriation to discretionary surplus reserve | ||
| Appropriation to general risk reserve | ||
| Declaration of dividends on ordinary shares | ||
| Conversion of ordinary shares’ dividends into share capital | ||
| Distributed dividend | 24,901,629.56 | 33,866,580.83 |
| Retained profits at the end of the period | 545,277,188.08 | 357,793,891.96 |
On May 14, 2021, at the 2020 annual general meeting of shareholders, the Proposal on PreliminaryPlan on Profit Distribution for 2020 was reviewed and passed, approving to make profit distribution onthe basis of the total shares on the record date of interest distribution - the Company proposed to distributeto all shareholders a cash dividend of RMB 0.55 (tax inclusive) for every 10 shares. The total cash dividendto be paid is RMB 24,901,629.56.The total adjusted undistributed profits at the beginning of the period are described in detail in V.4 ofSection X.Details of adjustments to undistributed profits at the beginning of the period:
1) As a result of the retrospective adjustment of the Accounting Standards for Business Enterprises andrelated new regulations, undistributed profits at the beginning of the period were affected by RMB9,346.56.
2. Retained profits at the beginning of the period were affected by RMB 0.00 due to changes in accountingpolicies.
3. Retained profits at the beginning of the period were affected by RMB 0.00 due to the correction ofsignificant accounting errors.
4. Retained profits at the beginning of the period were affected by RMB 0.00 due to changes in the scopeof consolidation resulting from business combination involving entities under common control.
5. Retained profits at the beginning of the period were affected by RMB 0.00 in total due to otheradjustments.
61. Operating income and operating costs
(1). Description of operating income and operating costs
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period | ||
| Income | Cost | Income | Cost | |
| Main business | 2,498,228,401.78 | 1,651,089,557.25 | 1,948,884,176.83 | 1,393,075,043.93 |
| Total | 2,498,228,401.78 | 1,651,089,557.25 | 1,948,884,176.83 | 1,393,075,043.93 |
(2). Description of incomes from contracts
□ Applicable √ N/A
Description of incomes from contracts:
□ Applicable √ N/A
(3). Description of performance obligations
□ Applicable √ N/A
(4). Description of allocation to remaining performance obligations
□ Applicable √ N/A
Other information:
Breakdown of revenue from contracts with customers by category
1) Breakdown of revenue by the types of goods or services
| Item | Amount of the current period | Amount of the prior period | ||
| Income | Cost | Income | Cost | |
| Laser optical engine | 288,813,218.37 | 144,202,411.53 | 202,707,478.10 | 81,529,453.84 |
| Complete laser projector | 1,708,041,893.50 | 1,257,091,802.95 | 1,465,195,649.90 | 1,151,787,097.57 |
| Others | 140,751,281.09 | 106,666,550.86 | 109,248,434.17 | 52,005,419.13 |
| Subtotal | 2,137,606,392.96 | 1,507,960,765.34 | 1,777,151,562.17 | 1,285,321,970.54 |
2) Breakdown of revenue by operating region
| Item | Amount of the current period | Amount of the prior period | ||
| Income | Cost | Income | Cost | |
| Domestic | 1,957,925,457.54 | 1,410,776,285.94 | 1,683,887,300.96 | 1,248,303,920.68 |
| Overseas | 179,680,935.42 | 97,184,479.40 | 93,264,261.21 | 37,018,049.86 |
| Subtotal | 2,137,606,392.96 | 1,507,960,765.34 | 1,777,151,562.17 | 1,285,321,970.54 |
3) Breakdown of revenue by timing of transfer of goods or services
| Item | Amount of the current period | Amount of the prior period |
| Revenue recognized at a time point | 2,134,111,664.03 | 1,775,472,347.41 |
| Revenue recognized for a period of time | 3,494,728.93 | 1,679,214.76 |
| Subtotal | 2,137,606,392.96 | 1,777,151,562.17 |
62. Taxes and levies
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| City maintenance and construction tax | 2,999,186.97 | 2,867,426.89 |
| Education surcharges | 1,301,614.24 | 1,245,187.55 |
| Stamp duty | 3,556,088.99 | 1,670,633.82 |
| Local education surcharges | 872,293.37 | 830,125.05 |
| Others | 47,675.22 | 105,371.48 |
| Total | 8,776,858.79 | 6,718,744.79 |
Other information:
None
63. Selling expenses
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Marketing fees | 103,844,070.52 | 39,666,919.06 |
| Employee benefits | 81,119,249.58 | 57,290,923.11 |
| After-sale repair expenses | 18,604,120.04 | 6,175,382.08 |
| Service fees | 16,509,511.98 | 10,032,772.59 |
| Advertising and business promotion expenses | 5,940,168.90 | 4,839,376.53 |
| Travel expenses | 4,223,301.47 | 2,561,838.29 |
| Business entertainment expenses | 2,792,164.38 | 1,671,853.12 |
| Other expenses | 19,821,516.44 | 11,349,169.82 |
| Total | 252,854,103.31 | 133,588,234.60 |
Other information:
None
64. Administration expenses
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Employee benefits | 69,177,011.83 | 59,421,774.51 |
| Share-based payment expenses | 63,345,172.32 | 20,581,939.14 |
| Service fees | 24,034,440.59 | 31,845,756.88 |
| Depreciation and amortization expenses | 11,240,594.44 | 9,094,503.87 |
| Rent expense | 6,437,051.98 | 7,449,392.71 |
| Travel expenses | 1,042,924.39 | 471,610.48 |
| Other expenses | 12,656,221.72 | 6,892,298.67 |
| Total | 187,933,417.27 | 135,757,276.26 |
Other information:
None
65. R&D expenses
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Employee benefits | 147,610,747.09 | 120,904,809.23 |
| Material consumption expenses | 24,805,748.98 | 21,280,414.59 |
| Service fees | 10,781,054.58 | 8,549,326.63 |
| Depreciation and amortization expenses | 12,249,517.10 | 13,073,784.95 |
| Rent expense | 6,954,468.80 | 8,983,285.74 |
| Testing expenses | 8,458,772.06 | 5,234,158.17 |
| Patent fees | 8,363,204.10 | 6,808,589.82 |
| Other expenses | 17,478,711.58 | 19,608,999.97 |
| Total | 236,702,224.29 | 204,443,369.10 |
Other information:
None
66. Financial expenses
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Interest expenses | 17,079,723.61 | 20,066,451.02 |
| Less: Interest income | -17,645,299.09 | -10,322,478.28 |
| Exchange profit or loss | 465,827.17 | -2,227,674.26 |
| Bank service charges | 1,400,128.67 | 1,708,675.72 |
| Total | 1,300,380.36 | 9,224,974.20 |
Other information:
None
67. Other income
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Government grants related to assets | 774,722.75 | 300,812.65 |
| Government grants related to income | 40,616,103.23 | 41,782,494.35 |
| Refund of transaction fees for withholding individual income taxes | 576,787.99 | 323,003.17 |
| Additional deduction of input VAT | 4,179,604.21 | 2,848,690.73 |
| Total | 46,147,218.18 | 45,255,000.90 |
Other information:
Government grants recognized in other income in the current period are disclosed in VII.84 of Section Xin details.
68. Investment income
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Long-term equity investment accounted for using the equity method | 22,856,529.68 | -679,282.94 |
| Investment income from disposal of held-for-trading financial assets | 9,785,727.49 | 18,624,853.96 |
| Fees for acquiring held-for-trading financial assets | -8,750.05 | |
| Total | 32,633,507.12 | 17,945,571.02 |
Other information:
None
69. Income from net exposure hedges
□ Applicable √ N/A
70. Gains from changes in fair values
√ Applicable □ N/A
In RMB
| Source of gains from changes in fair values | Amount for the current period | Amount for the prior period |
| Held-for-trading financial assets | 2,200,000.0 | |
| Compensation for performance commitment | 37,927,764.00 | |
| Total | 40,127,764.00 |
Other information:
None
71. Losses of credit impairment
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Impairment losses of notes receivable | 81,038.20 | -138,169.75 |
| Impairment losses of accounts receivable | -4,920,605.15 | -8,005,819.07 |
| Impairment losses of other receivables | -481,845.13 | -227,290.13 |
| Impairment losses of long-term receivables | -1,440,479.21 | -750,000.00 |
| Impairment losses of non-current assets due within one year | -47,400.00 | |
| Total | -6,809,291.29 | -9,121,278.95 |
Other information:
None
72. Impairment losses of assets
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| I. Bad debt losses | -140,603.54 | -1,393,709.16 |
| II. Losses of decline in value of inventories and losses of contract performance cost | -32,806,562.15 | -10,196,985.27 |
| III. Impairment losses of long-term equity investments | ||
| IV. Impairment losses of investment properties | ||
| V. Impairment losses of fixed assets | -329,652.40 | |
| VI. Impairment losses of construction materials | ||
| VII. Impairment losses of construction in progress | ||
| VIII. Impairment losses of productive biological assets | ||
| IX. Impairment losses of oil and gas assets |
| X. Impairment losses of intangible assets | -3,669,349.86 | |
| XI. Goodwill impairment losses | ||
| XII. Others | ||
| Total | -36,946,167.95 | -11,590,694.43 |
Other information:
None
73. Gains on disposal of assets
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Gains from disposal of fixed assets | 2,967,788.29 | 281,040.26 |
| Total | 2,967,788.29 | 281,040.26 |
Other information:
None
74. Non-operating income
Description of non-operating income
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period | Amount included in non-recurring profit or loss for the period |
| Total gains from disposal of non-current assets | |||
| Where: Gains from disposal of fixed assets | |||
| Gains from disposal of intangible assets | |||
| Gains from exchange of non-monetary assets | |||
| Donation receipts | |||
| Government grants | 51,500,000.00 | 1,539,340.28 | 51,500,000.00 |
| Amounts not required for payment | 102,168.27 | 275,714.05 | 102,168.27 |
| Indemnity | 916,875.85 | 2,793,056.81 | 916,875.85 |
| Others | 109,117.96 | 30,323.96 | 109,117.96 |
| Total | 52,628,162.08 | 4,638,435.10 | 52,628,162.08 |
Government grants included in profit or loss for the period
√ Applicable □ N/A
In RMB
| Grant project | Amount for the current period | Amount for the prior period | Related to assets/income |
| Grant from Hong Kong government for the semiconductor R&D | 139,340.28 | Related to income |
| project of Hong Kong University of Science and Technology | |||
| Enterprise Listing Financing Incentive Program of Shenzhen Nanshan District Industry and Information Technology Bureau | 1,400,000.00 | Related to income | |
| Restructuring and Listing Supporting Grant for 2021 from the Service Bureau for Small- and Medium-sized Enterprises of Shenzhen | 1,500,000.00 | Related to income | |
| Project Supporting Fund of Chong Liangjiang New Area Administration Commission - Head Office Relocation Supporting Fund | 30,000,000.00 | Related to income | |
| Project Supporting Fund of Chong Liangjiang New Area Administration Commission - Head Office Relocation Supporting Fund | 20,000,000.00 | Related to income |
Other information:
□ Applicable √ N/A
75. Non-operating expenses
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period | Amount included in non-recurring profit or loss for the period |
| External donations | 593,309.76 | ||
| Losses from damage and retirement of non-current assets | 1,530,253.26 | 1,393,161.39 | 1,530,253.26 |
| Penalties and overdue fines | 27,996.72 | 76,700.50 | 27,996.72 |
| Others | 234,834.67 | 1.31 | 234,834.67 |
| Total | 1,793,084.65 | 2,063,172.96 | 1,793,084.65 |
Other information:
None
76. Income tax expense
(1). Statement of income tax expense
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Income tax expense in the current period | 44,120,143.66 | 11,910,373.50 |
| Deferred income tax expenses | 22,872,795.49 | 12,853,862.82 |
| Total | 66,992,939.15 | 24,764,236.32 |
(2). Reconciliation of income tax expenses to the accounting profit
√ Applicable □ N/A
In RMB
| Item | Amount for the current period |
| Total profit | 288,527,756.29 |
| Income tax expense calculated based on statutory/applicable tax rate | 43,279,163.44 |
| Effect of different tax rates of subsidiaries operating in other jurisdictions | -8,173,947.55 |
| Effect of income tax for the period before adjustment | 694,125.80 |
| Effect of non-taxable income | -17,700,337.40 |
| Effect of non-deductible cost, expense and loss | 1,167,899.61 |
| Effect of utilizing deductible loss not recognized for deferred tax assets for prior period | -6,122,226.54 |
| Effect of deductible temporary difference or deductible loss not recognized for deferred tax assets for the current period | 38,142,008.03 |
| Change in the balance of opening deferred tax assets caused by tax rate adjustment | 35,981,277.63 |
| Effect of additional deduction of R&D expenses | -20,275,023.87 |
| Income tax expenses | 66,992,939.15 |
Other information:
□ Applicable √ N/A
77. Other comprehensive income
√ Applicable □ N/A
Other comprehensive income net of tax is disclosed in VII.57 of Section X in detail.
78. Items in cash flow statement
(1). Other cash receipts relating to operating activities
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Interest income | 16,675,246.67 | 10,382,950.88 |
| Government grants | 79,816,846.91 | 40,365,718.97 |
| Recovery of security deposits | 68,674,714.21 | 51,523,088.26 |
| Funds frozen in connection with litigations | 30,000,000.00 | |
| Non-operating income | 1,025,993.81 | 1,127,368.51 |
| Other transaction accounts | 18,757,498.53 | 6,965,206.85 |
| Total | 184,950,300.13 | 140,364,333.47 |
Description of other cash receipts relating to operating activities:
None
(2). Other cash payments relating to operating activities
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Administrative expenses, selling expenses, and R&D expenses paid in cash | 247,909,819.98 | 180,871,626.50 |
| Non-operating expenses | 57,390.87 | 670,011.57 |
| Payment of security deposits | 80,571,144.80 | 49,749,747.97 |
| Service charges | 1,400,128.67 | 1,708,675.72 |
| Other transaction accounts | 23,458,519.21 | 11,988,038.74 |
| Total | 353,397,003.53 | 244,988,100.50 |
Description of other cash payments relating to operating activities:
None
(3). Other cash receipts relating to investing activities
□ Applicable √ N/A
(4). Other cash payments relating to investing activities
□ Applicable √ N/A
(5). Other cash receipts relating to financing activities
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Shareholder borrowings | 19,320,000.00 | |
| Total | 19,320,000.00 |
Description of other cash receipts relating to financing activities:
None
(6). Other cash payments relating to financing activities
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Actual lease payment | 27,871,604.50 | |
| Repayment of shareholder loans | 19,399,427.00 | |
| Total | 47,271,031.50 |
Description of other cash payments relating to financing activities:
None
79. Supplementary information to the cash flow statement
(1). Supplementary information to the cash flow statement
√ Applicable □ N/A
In RMB
| Supplemental information | Amount for the current period | Amount for the prior period |
| 1. Reconciliation of net profit to cash flow from operating activities: | ||
| Net profit | 221,534,817.14 | 86,657,198.57 |
| Add: Provision for impairment of assets | 36,946,167.95 | 11,590,694.43 |
| Losses of credit impairment | 6,809,291.29 | 9,121,278.95 |
| Depreciation of fixed assets, depletion of oil and gas assets, depreciation of productive biological assets | 108,667,338.81 | 99,229,686.22 |
| Amortization of right-of-use assets | 20,139,276.53 | |
| Amortization of intangible assets | 4,446,633.19 | 7,377,145.47 |
| Amortization of long-term prepaid expenses | 7,417,067.12 | 7,123,888.08 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (gains are indicated by “－”) | -2,967,788.29 | -281,040.26 |
| Losses on retirement of fixed assets (gains are indicated by “－”) | 1,703,522.36 | 1,393,161.39 |
| Losses on changes in fair values (gains are indicated by “－”) | -40,127,764.00 | |
| Financial expenses (income is indicated by “－”) | 18,410,475.23 | 17,838,776.76 |
| Investment losses (income is indicated by “－”) | -32,633,507.12 | -17,945,571.02 |
| Decrease in deferred tax assets (increase is indicated by “-”) | 22,549,119.12 | 12,853,862.82 |
| Increase in deferred tax liabilities (decrease is indicated by “-”) | ||
| Decrease in inventories (increase is indicated by “－”) | -490,401,076.50 | -172,605,815.49 |
| Decrease in receivables from operating activities (increase is indicated by “－”) | -187,600,139.59 | -128,184,406.23 |
| Increase in payables from operating activities (decrease is indicated by “－”) | 289,551,990.78 | 96,596,705.75 |
| Others | 73,891,802.82 | 21,624,864.98 |
| Net cash flow from operating activities | 58,337,226.84 | 52,390,430.42 |
| 2. Significant investing and financing activities that do not involve cash receipts and payments: | ||
| Conversion of debt into capital | ||
| Convertible corporate bonds due within one year | ||
| Fixed assets acquired under finance leases | ||
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 891,195,166.73 | 983,525,089.44 |
| Less: Opening balance of cash | 983,525,089.44 | 829,789,487.86 |
| Add: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -92,329,922.71 | 153,735,601.58 |
(2). Net cash paid to acquire subsidiaries for the current period
√ Applicable □ N/A
In RMB
| Amount | |
| Cash or cash equivalents paid in the period for business combination occurring in the period | |
| Less: Cash and cash equivalents held by subsidiaries at the acquisition date | |
| Add: Cash or cash equivalents paid in the prior period for business combination occurring in the period | 11,432,903.47 |
| Net cash paid for acquiring subsidiaries | 11,432,903.47 |
Other information:
None
(3). Net cash receipts from disposal of subsidiaries for the current period
□ Applicable √ N/A
(4). Composition of cash and cash equivalents
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| I. Cash | 891,195,166.73 | 983,525,089.44 |
| Where: Cash on hand | 5,680.24 | 5,858.56 |
| Bank deposits that can be paid at any time | 883,906,202.81 | 980,570,123.37 |
| Other monetary funds that can be paid at any time | 7,283,283.68 | 2,949,107.51 |
| Deposits in the central bank that can be used for payments | ||
| Deposits made with other banks | ||
| Placements with banks | ||
| II. Cash equivalents | ||
| Where: Investments in debt securities due within three months | ||
| III. Closing balance of cash and cash equivalents | 891,195,166.73 | 983,525,089.44 |
| Where: Restricted cash and cash equivalents of the parent company or subsidiaries within the Group |
Other information:
□ Applicable √ N/A
80. Notes to items in the statement of changes in owners’ equity
Describe matters such as the names and the adjusted amounts of the items included in “others” in respectof adjustments to the closing balances of the prior year:
□ Applicable √ N/A
81. Assets with limited ownership or use right
√ Applicable □ N/A
In RMB
| Item | Closing balance of carrying amount | Reason |
| Other monetary funds | 26,131,914.42 | Margins |
| Bank deposits | 40,000,000.00 | Term deposits |
| Bank deposits | 402,750.00 | Interests provided |
| Intangible assets | 292,056,499.86 | Mortgage collateral |
| Total | 358,591,164.28 | / |
Other information:
None
82. Foreign currency monetary items
(1). Foreign currency monetary items
√ Applicable □ N/A
In RMB
| Item | Closing balance of foreign currency | Exchange rate | Closing balance of RMB equivalent |
| Cash and bank balances | - | - | 93,028,168.45 |
| Where: USD | 14,292,733.81 | 6.3757 | 91,126,182.94 |
| HKD | 2,224,725.00 | 0.8169 | 1,817,377.85 |
| GBP | 365.96 | 8.6064 | 3,149.60 |
| VND | 290,921,637.00 | 0.0003 | 81,458.06 |
| Accounts receivable | - | - | 48,897,485.00 |
| Where: USD | 7,669,351.60 | 6.3757 | 48,897,485.00 |
| Short-term borrowings | - | - | 2,468.61 |
| Where: USD | 387.19 | 6.3757 | 2,468.61 |
| Accounts payable | - | - | 42,809,036.42 |
| Where: USD | 6,714,405.70 | 6.3757 | 42,809,036.42 |
Other information:
None
(2). Description of overseas operating entities, including significant overseas operating entities, of
which the major operation place, functional currency and choosing basis as well as the reasonfor change of functional currency should be disclosed
√ Applicable □ N/A
| Item | Major overseas operation place | Functional currency | Basis of choice |
| Appotronics Hong Kong Limited | Hong Kong | USD | Common currency |
| Appotronics USA, Inc. | USA | USD | Local currency |
| Fabulus Technology Hong Kong Limited | Hong Kong | USD | Common currency |
| JoveAI Limited | Cayman Islands | USD | Common currency |
| JoveAI Innovation, Inc. | USA | USD | Local currency |
| TECHNOLOGY INC | USA | USD | Local currency |
| JoveAI Asia Company Limited | Vietnam | VND | Local currency |
| WEMAX LLC | USA | USD | Local currency |
83. Hedge
□ Applicable √ N/A
84. Government grants
(1). Basic information of government grants
√ Applicable □ N/A
In RMB
| Category | Amount | Item presented | Amount recognized in current profit or loss |
| Government grants related to income and used for compensation of the Company’s relevant costs or losses in subsequent periods | 4,070,480.27 | Other income | 4,070,480.27 |
| Government grants related to income and used for compensation of the Company’s relevant costs or losses that have been incurred | 30,868,095.50 | Other income | 30,868,095.50 |
| Government grants related to income and used for compensation of the Company’s | 51,500,000.00 | Non-operating income | 51,500,000.00 |
relevant costs or lossesthat have been incurred
Note: The amount refers to government grants actually received in the current period.
1) Government grants related to assets
| Item | Opening deferred income | Increase | Amortization | Closing deferred income | Amortization item presented | Description |
| 8K Ultra High Definition Laser Display Technology Engineering Research Center | 1,699,187.35 | 774,722.75 | 924,464.60 | Other income | Project Contract of 8K Ultra High Definition Laser Display Technology Engineering Research Center (XMHT20190101023), Development and Reform Commission of Shenzhen | |
| Subtotal | 1,699,187.35 | 774,722.75 | 924,464.60 |
2) Government grants related to income and used for compensation of the Company’s relevantcosts or losses in subsequent periods
| Item | Opening deferred income | Increase | Carrying forward | Closing deferred income | Carrying forward item presented | Description |
| Ultra-high Brightness Laser Light Source Engineering Technology Research Center | 1,683,873.26 | 1,683,873.26 | Other income | Project Contract for Shenzhen Science and Technology Plan (Shen Ke Ji Chuang Xin [2019] No. 33), Science, Technology, and Innovation Commission of Shenzhen | ||
| Trichromatic Laser Display Complete Equipment Production Demonstration Line | 13,340,196.54 | 2,815,480.27 | 7,476,233.49 | 8,679,443.32 | Other income | Notice on the Establishment of 2018 Annual Projects for Strategic Advanced Electronic Materials in the National Key Research and Development Programs (Guo Ke Gao Fa Ji Zi [2018] No. 41), High Technology Research and Development Center, Ministry of Science and Technology |
| Key Technology of Trichromatic Laser Display Complete Equipment Industrialization | 255,000.00 | 255,000.00 | Other income | Task Statements for Research and Development Program in Key Fields of Guangdong Province (2019B010926001), Finance Bureau of Shenzhen | ||
| R&D of key technologies for ultra high- | 1,000,000.00 | 336,925.84 | 663,074.16 | Other income | Project Application for Technology Breakthrough under |
| definition micro laser projector optical engine based on light-emitting ceramic devices | Shenzhen Innovation and Entrepreneurship Plan (20201026191136001), the Science, Technology, and Innovation Commission of Shenzhen | |||||
| Subtotal | 15,024,069.80 | 4,070,480.27 | 9,752,032.59 | 9,342,517.48 |
3) Government grants related to income and used for compensation of the Company’s relevantcosts or losses that have been incurred
| Item | Amount | Item presented | Description |
| Project Supporting Fund of Chongqing Liangjiang New Area Administration Commission - Head Office Relocation Supporting Fund | 30,000,000.00 | Non-operating income | Investment Agreement with Chongqing Liangjiang New Area Administration Commission |
| Project Supporting Fund of Chongqing Liangjiang New Area Administration Commission - Awards for Implementation of Project | 20,000,000.00 | Non-operating income | Investment Agreement with Chongqing Liangjiang New Area Administration Commission |
| Refunds of value-added taxes | 5,174,354.78 | Other income | Announcement of the Ministry of Finance and State Taxation Administration on Tax Offsetting by VAT at the End of the Period for Certain Advanced Manufacturing (Announcement No. 84 of 2019, Ministry of Finance and State Taxation Administration), Ministry of Finance, and State Taxation Administration |
| Incentive Program for Industrial Added Value of 2020, Nanshan Leadership Panel for Special Funds for Independent Innovation Industry Development | 3,830,100.00 | Other income | Disclosure of the Fifth Batch of Entities that Nanshan District Independent Innovation Industry Development Special Fund Proposes to Support in 2020, Nanshan Leadership Panel for Special Funds for Independent Innovation Industry Development |
| 2020 Shunyi District Cultural and Creativity Fund Awards | 3,000,000.00 | Other income | Notice of Shunyi Government on Promoting and Supporting Enterprise Development, People’s Government of Shunyi District, Beijing |
| 2019 Funds for Supporting Development of Enterprises in Shunyi District | 2,200,000.00 | Other income | Notice of Shunyi Government on Promoting and Supporting Enterprise Development, People’s Government of Shunyi District, Beijing |
| US salary subsidy for COVID-19 | 2,020,137.21 | Other income | Notice of Paycheck Protection Program Forgiveness Payment, Small Business Administration |
| Patent Support Plan of Shenzhen Nanshan District | 1,904,500.00 | Other income | Notice on Application for 2021 Support to National High-tech Enterprises in Nanshan District, Shenzhen Nanshan District Science, Technology, and Innovation Bureau |
| Science, Technology, and Innovation Bureau | |||
| 2020 Grants for Domestic Patent for Invention and Overseas Patent for Invention of Shenzhen Administration for Market Regulation | 1,807,500.00 | Other income | Notice on Completing Formalities for Claiming 2020 Grants for Domestic Patent for Invention and Overseas Patent for Invention, Shenzhen Administration for Market Regulation |
| Science, Technology, and Innovation Commission of Shenzhen 2020 First Batch of Grants for Enterprise Research and Development | 1,766,000.00 | Other income | Notice on Disclosure of the First Batch of Enterprises Proposed to be Funded and the Second Batch of Approved Enterprises under 2020 Enterprise Research and Development Subsidy Scheme, Science, Technology, and Innovation Commission of Shenzhen |
| Restructuring and Listing Supporting Grant for 2021 from the Service Bureau for Small- and Medium-sized Enterprises of Shenzhen | 1,500,000.00 | Non-operating income | Notice on Paying Grants for Supporting Restructuring and Listing under the Innovative Development Cultivation and Support Plan by Private and Small- and Medium-sized Enterprises of Shenzhen in 2021, Service Bureau for Small- and Medium-sized Enterprises of Shenzhen |
| Shenzhen Nanshan District Enterprise Development Service Center Scheme for Supporting Enterprise R&D Investment & Support Scheme of Rewards for Technology | 1,200,000.00 | Other income | Disclosure of the Fourth Batch of Entities that Nanshan District Independent Innovation Industry Development Special Fund Proposes to Support in 2021, Shenzhen Nanshan District Enterprise Development Service Center |
| Shenzhen Nanshan District Science, Technology, and Innovation Bureau Plan for Supporting Enterprise R&D Investments | 1,000,000.00 | Other income | Nanshan District Independent Innovation Industry Development Special Fund - Application for R&D Investment Support Plan of Science, Technology, and Innovation Funds (2020), Shenzhen Nanshan District Science, Technology, and Innovation Bureau |
| Science, Technology, and Innovation Commission of Shenzhen 2022 High-tech Enterprise Supporting Funds | 1,000,000.00 | Other income | Notice on Disclosure of the First Batch of Enterprises Proposed to be Funded and the Second Batch of Approved Enterprises under 2022 High-tech Enterprise Supporting Funds, Science, Technology, and Innovation Commission of Shenzhen |
| Shenzhen Administration for Market Regulation 2021 Special Funds for Building the Intellectual Property Rights Operation and Service System of Shenzhen | 700,000.00 | Other income | Announcement on the Supported Projects for the 2021 Special Funds for Building the Intellectual Property Rights Operation and Service System of Shenzhen, Shenzhen Administration for Market Regulation |
| Talent Housing Rent Allowance of the Housing and Construction Bureau of Nanshan District, Shenzhen | 620,000.00 | Other income | Supplementary Announcement on 2021 Talent Housing Rent Allowance of Nanshan District, Housing and Construction Bureau of Nanshan District, Shenzhen |
| Shenzhen Nanshan District Science, Technology, and | 600,000.00 | Other income | Nanshan District Independent Innovation Industry Development Special Fund - Technology Innovation Sub-funds - |
| Innovation Bureau 2020 Rewards for Intellectual Property Supporting of Shenzhen | Application for Technology Reward Supporting Scheme (2019), Shenzhen Nanshan District Science, Technology, and Innovation Bureau | ||
| One-off Grants for Post-doctoral Stations in Shenzhen (Second Batch in 2020) from Shenzhen Human Resources and Social Security Bureau | 500,000.00 | Other income | Announcement on Candidate Entities for One-off Grants for Post-doctoral Stations in Shenzhen (Second Batch in 2020), Shenzhen Human Resources and Social Security Bureau |
| Shenzhen Bureau of Industry and Information Technology 2021 Third Batch of Supported Projects under the Plan of Supporting Industrial Design Development | 500,000.00 | Other income | Notice of Shenzhen Bureau of Industry and Information Technology on the Disclosure of the Third Batch of Candidate Projects under the 2021 Plan of Supporting Industrial Design Development, Shenzhen Bureau of Industry and Information Technology |
| Commerce Bureau of Shenzhen 2020 Central Special Funds for Foreign Trade | 500,000.00 | Other income | Notice on the Disclosure of Projects on Matters for Supporting Foreign Trade SMEs to Expand Markets Funded by Central Special Funds for Foreign Trade in 2020, Commerce Bureau of Shenzhen |
| Shenzhen Administration for Market Regulation 2021 Special Funds for Intellectual Property Protection | 500,000.00 | Other income | Disclosure of the List of Candidate Projects for the 2021 Special Funds for Intellectual Property Protection, Shenzhen Administration for Market Regulation |
| Allocation to the Standard Field of Shenzhen in 2020 from Shenzhen Administration for Market Regulation | 400,000.00 | Other income | Notice on the Reward Scheme of Special Funds for Standard Field of Shenzhen in 2020, Shenzhen Administration for Market Regulation |
| Guangdong Administration for Market Regulation 2021 Special Funds for Promoting High-quality Economic Development | 400,000.00 | Other income | Announcement on 2021 Allocation Plan of Special Funds for Promoting High-quality Economic Development (Batch 2), Guangdong Administration for Market Regulation |
| Guangdong Administration for Market Regulation 2020 Special Funds for Promoting High-quality Economic Development | 300,000.00 | Other income | 2020 Allocation Plan of Special Funds for Promoting High-quality Economic Development (Batch 3), Guangdong Administration for Market Regulation |
| Subsidy for Post-doctoral Station Unit from Human Resources Bureau of Nanshan District in Shenzhen | 250,000.00 | Other income | Application for Special Fund for Independent Innovation Industry Development in Nanshan District, Shenzhen - Post-doctoral Station Unit Project (2021), Human Resources Bureau of Nanshan District in Shenzhen |
| Shenzhen Bureau of Industry and Information Technology 2021 Shenzhen Industry and Information Development - Special Funds for Plan of | 180,000.00 | Other income | Notice on 2021 Shenzhen Industry and Information Development - Special Funds for Plan of Supporting both Quality and Brand Improvement, Shenzhen Bureau of Industry and Information Technology |
| Supporting both Quality and Brand Improvement | |||
| Maternity Grants from Shenzhen Social Security Bureau | 137,577.92 | Other income | Provisions of Guangdong for Maternity Insurance of Employees, Shenzhen Social Insurance Fund Administration |
| Shenzhen Administration for Market Regulation 2020 Second Batch of Grants for PCT Patent Applications in Shenzhen | 130,000.00 | Other income | List of Grantees for 2020 Grants for PCT Patent Application under Shenzhen Intellectual Property Special Funds, Shenzhen Administration for Market Regulation |
| Shenzhen Administration for Market Regulation, Grant for Shenzhen Trademark Registration | 70,000.00 | Other income | Notice on Formalities of Claiming 2020 Grants for Trademark Registration and Grants for Copyright Registration, Shenzhen Administration for Market Regulation |
| Grants for maintaining job position | 52,855.79 | Other income | |
| Service Bureau for Small- and Medium-sized Enterprises of Shenzhen, Grants for Domestic Market Expansion under the Innovative Development Cultivation and Support Plan by Private and Small- and Medium-sized Enterprises of Shenzhen in 2021 | 52,783.00 | Other income | Notice on Grants for Domestic Market Expansion under the Innovative Development Cultivation and Support Plan by Private and Small- and Medium-sized Enterprises of Shenzhen in 2021, Service Bureau for Small- and Medium-sized Enterprises of Shenzhen |
| Shenzhen Administration for Market Regulation, First Reported Fund for the Second Batch of Patents in 2019 | 30,000.00 | Other income | Notice of Shenzhen Administration for Market Regulation on Handling the General Subsidy Collection Procedures on Shenzhen Intellectual Property Special Fund in 2019, Shenzhen Administration for Market Regulation |
| Refund of Unemployment Benefits from Shunyi District Social Insurance Business Management Center | 17,557.70 | Other income |
Notice on Further Improving UnemploymentInsurance and Job Position Maintenance,Beijing Municipal Human Resources andSocial Security Bureau
| Grant for social insurance | 14,729.10 | Other income | |
| Patent Promotion and Protection Funds of Shunyi | 10,000.00 | Other income | Implementation Measures of Shunyi District on Patent Promotion and Protection, Shunyi People’s Government, Beijing |
| Subtotal | 82,368,095.50 |
(2). Refund of government grants
√ Applicable □ N/A
In RMB
| Item | Amount | Reason |
| Employment Support Scheme of Hong Kong Government | 4,024.86 | Relevant employees left the Company |
| 4,024.86 |
Other information:
None
85. Others
□ Applicable √ N/A
VIII. Changes in scope of consolidation
1. Business combination not involving enterprises under common control
□ Applicable √ N/A
2. Business combination involving enterprises under common control
√ Applicable □ N/A
(1). Business combinations involving enterprises under common control in the current period
□ Applicable √ N/A
(2). Combination costs
□ Applicable √ N/A
(3). Carrying amounts of assets and liabilities of the combined party at the combination date
□ Applicable √ N/A
Other information:
None
3. Counter purchase
□ Applicable √ N/A
4. Disposal of subsidiaries
Single disposal of investments in subsidiaries, i.e. the loss of control
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
5. Changes in scope of consolidation for other reasons
Description of changes in the scope of consolidation for other reasons (e.g., new subsidiary establishment, subsidiary liquidation, etc.) and the relevant information:
√ Applicable □ N/A
1. Increased scope of combination
| Company | Method of obtaining equity | Time point of obtaining equity | Capital contribution | Proportion of contribution |
| (Chongqing) Innovative Technology Co., Ltd. | Newly established | 2020.12.29 | RMB 27.50 million | 39.19% |
| Limited | Newly established | 2020.11.10 | 39.19% | |
| Chongqing Guangbo Ecommerce Co., Ltd. | Newly established | 2021.08.20 | 39.19% | |
| Chongqing Ewei Ecommerce Co., Ltd. | Newly established | 2021.08.20 | 39.19% | |
| Shenzhen Orange Juice Energy Technology Co., Ltd. | Newly established | 2021.12.29 | 33.31% |
2. Decreased scope of combination
| Company | Method of disposing equity | Time point of disposing equity | Net assets on the disposal date | Net profits from the beginning of the period to the disposal date |
| Fabulus Display (Beijing) Co., Ltd. | Deregistration | 2021.11.25 | 21,207,779.79 | |
| Fabulus Technology Hong Kong Limited | Deregistration | 2021.7.30 | 22,180.64 |
6. Others
□ Applicable √ N/A
IX. Equity in other entities
1. Equity in subsidiaries
(1). Composition of enterprise group
√ Applicable □ N/A
| Subsidiaries | Principal operation place | Registration place | Business nature | Proportion of shareholding (%) | Acquisition method | |
| Direct | Indirect | |||||
| Shenzhen Appotronics Laser Display Technology Co., Ltd. | Shenzhen | Shenzhen | R&D and sales of laser display products | 100 | Business combination involving enterprises under common control | |
| Appotronics Technology (Changzhou) Co., Ltd. | Changzhou | Changzhou | Technology research and development of projection equipment, screen and electronic computer | 100 | Establishment | |
| Shenzhen Appotronics Software Technology Co., Ltd. | Shenzhen | Shenzhen | Technology development and sales of computer software and hardware | 100 | Establishment | |
| Shenzhen Appotronics Display Device Co., Ltd. | Shenzhen | Shenzhen | Technology development, sales, and technology services for display products; import and export business | 100 | Establishment | |
| WEMAX LLC | USA | USA | Sales of laser equipment | 100 | Establishment | |
| Shenzhen Appotronics Xiaoming Technology Co., Ltd. | Shenzhen | Shenzhen | Development, consultation and transfer of laser display technology | 100 | Establishment | |
| Shenzhen Appotronics Home Line Technology Co., Ltd. | Shenzhen | Shenzhen | Software development related to semiconductor optoelectronic products | 100 | Establishment | |
| Shenzhen Appotronics Laser | Shenzhen | Shenzhen | Software development for semiconductor | 100 | Establishment | |
| Technology Co., Ltd. | optoelectronic devices | |||||
| Tianjin Bonian Film Partnership (LP) | Tianjin | Tianjin | No specific business conducted | 99 | 1 | Business combination not involving enterprises under common control |
| Beijing Orient Appotronics Technology Co., Ltd. | Beijing | Beijing | Technology promotion; computer systems, application software services | 59 | Establishment | |
| Qingda Appotronics (Xiamen) Technology Co., Ltd. | Shenzhen | Xiamen | Information technology consulting services | 51 | Establishment | |
| (Chongqing) Innovative Technology Co., Ltd. | Chongqing | Chongqing | Technology and software development | 39.19 | Establishment | |
| Fengmi (Beijing) Technology Co., Ltd. | Beijing | Beijing | Technology and software development | 39.19 | Establishment | |
| Chongqing Guangbo Ecommerce Co., Ltd. | Chongqing | Chongqing | No specific business conducted | 39.19 | Establishment | |
| Chongqing Ewei Ecommerce Co., Ltd. | Chongqing | Chongqing | No specific business conducted | 39.19 | Establishment | |
| Shenzhen Orange Juice Energy Technology Co., Ltd. | Shenzhen | Shenzhen | Technology and software development | 33.31 | Establishment | |
| Limited | Hong Kong | Hong Kong | No specific business conducted | 39.19 | Establishment | |
| TECHNOLOGY INC | USA | USA | No specific business conducted | 39.19 | Establishment | |
| CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd. | Beijing | Beijing | Research and development, production, technology services, sales and lease of laser cinema projection equipment | 24.84 | 38.36 | Business combination involving enterprises under common control |
| Appotronics Hong Kong Limited | Hong Kong | Hong Kong | Production, research, and development of semiconductor optoelectronic products, sales and consulting, investment and video content value-added services | 100 | Establishment | |
| Appotronics USA, Inc. | USA | USA | R&D, manufacture and sales of semiconductor optoelectronic products | 100 | Business combination involving enterprises under common control | |
| JoveAI Limited | Cayman Islands | Cayman Islands | No specific business conducted | 64.29 | Establishment | |
| JoveAI Innovation, Inc. | USA | USA | R&D of laser display software system | 64.29 | Establishment | |
| JoveAI Asia Company Limited | Vietnam | Vietnam | Technology research and development of projection equipment, screen and electronic computer | 64.29 | Establishment | |
| Fabulus Display (Beijing) Co., Ltd. | Beijing | Beijing | Sales; technology development, consulting | 90 | Establishment | |
| Fabulus Technology Hong Kong Limited | Hong Kong | Hong Kong | R&D, manufacture and sales of screens | 100 | Establishment |
Description of the difference between the proportion of shareholding and the proportion of voting rightsin a subsidiary:
Fengmi (Beijing) Technology Co., Ltd., Technology Inc., Limited, Chongqing Ewei Ecommerce Co.,Ltd., and Chongqing Guangbo Ecommerce Co., Ltd. are wholly-owned subsidiaries of (Chongqing)Innovative Technology Co., Ltd.; Shenzhen Orange Juice Energy Technology Co., Ltd. is a controlledsubsidiary of (Chongqing) Innovative Technology Co., Ltd.
The Company and Shenzhen Fengye Investment Consulting Limited Partnership (LimitedPartnership), a party acting in concert with the Company, hold a total of 53.6250% voting rights in(Chongqing) Innovative Technology Co., Ltd., for which the voting rights are exercised according to the
opinions of the Company. Since the voting rights are sufficient to exercise significant influence on theresolution of the general meeting, the Company becomes the controlling shareholder of (Chongqing)Innovative Technology Co., Ltd.
Basis for holding half of the voting rights or below but still controlling the investee, and holding overhalf voting rights but having no control over the investee:
Fengmi (Beijing) Technology Co., Ltd., Technology Inc., Limited, Chongqing Ewei Ecommerce Co.,Ltd., and Chongqing Guangbo Ecommerce Co., Ltd. are wholly-owned subsidiaries of (Chongqing)Innovative Technology Co., Ltd.; Shenzhen Orange Juice Energy Technology Co., Ltd. is a controlledsubsidiary of (Chongqing) Innovative Technology Co., Ltd.The Company and Shenzhen Fengye Investment Consulting Limited Partnership (LimitedPartnership), a party acting in concert with the Company, hold a total of 53.6250% voting rights in(Chongqing) Innovative Technology Co., Ltd., for which the voting rights are exercised according to theopinions of the Company. Since the voting rights are sufficient to exercise significant influence on theresolution of the general meeting, the Company becomes the controlling shareholder of (Chongqing)Innovative Technology Co., Ltd.
Basis for controls over significant structured entities included in consolidation scope:
None
Basis to determine the company acts as the agent or the principal:
None
Other information:
None
(2). Significant non-wholly subsidiaries
√ Applicable □ N/A
In RMB
| Subsidiaries | Shareholding ratio by minority shareholders | Profit or loss attributable to minority shareholders for the current period | Dividends declared for distribution to minority shareholders in the current period | Closing balance of minority interests |
| (Chongqing) Innovative Technology Co., Ltd. | 60.81% | -49,489,469.10 | 34,686,328.73 | |
| CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd. | 36.80% | 34,530,686.38 | 18,400,000.00 | 158,586,216.77 |
Description of the difference between the proportion of shareholding by minority shareholders and theirproportion of voting rights in a subsidiary:
√ Applicable □ N/A
Fengmi (Beijing) Technology Co., Ltd. completed business combination involving enterprises under
common control on April 1, 2021, and became a subsidiary of (Chongqing) Innovative Technology Co.,Ltd.; therefore, Fengmi (Beijing) Technology Co., Ltd. is not disclosed for the current period, while(Chongqing) Innovative Technology Co., Ltd. is disclosed.
Other information:
□ Applicable √ N/A
(3). Significant financial information of significant non-wholly subsidiaries
√ Applicable □ N/A
In RMB
| Subsidiaries | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| (Chongqing) Innovative Technology Co., Ltd. | 923,415,138.40 | 42,178,494.73 | 965,593,633.13 | 735,633,264.62 | 172, 919,867.39 | 908,553,132.01 | 602,519,123.96 | 16,903,557.91 | 619,422,681.87 | 692,707,201.11 | 4,763,026.34 | 697,470,227.45 |
| CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd. | 231,461,535.13 | 738,260,940.26 | 969,722,475.39 | 377,533,503.17 | 161,248,165.77 | 538,781,668.94 | 218,942,342.82 | 712,358,020.45 | 931,300,363.27 | 509,106,720.26 | 43,613,620.72 | 552,720,340.98 |
| Subsidiaries | Amount for the current period | Amount for the prior period | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flow from operating activities | Operating income | Net profit | Total comprehensive income | Cash flow from operating activities | |
| (Chongqing) Innovative Technology Co., Ltd. | 1,138,441,956.97 | -81,383,767.63 | -81,383,767.63 | -171,445,331.62 | ||||
| CINEAPPO Laser Cinema | 477,001,950.71 | 93,833,386.89 | 93,833,386.89 | 101,026,487.30 | 288,699,197.97 | 3,358,107.97 | 3,358,107.97 | 85,283,246.66 |
Technology(Beijing) Co.,Ltd.
Other information:
None
(4). Significant limitations on use of the group assets and pay off the group debts
□ Applicable √ N/A
(5). Financial or other support provided to structured entities included in consolidated financialstatements
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
2. Changes of shares of owners’ equity in subsidiaries but continue to remain control overtransactions of subsidiaries
√ Applicable □ N/A
(1). Description of changes in the share in the owner’s equity of subsidiaries
√ Applicable □ N/A
| Subsidiaries | Date of change | Shareholding ratio prior to change | Shareholding ratio after change |
| (Chongqing) Innovative Technology Co., Ltd. | 2021.03.16 | 100% | 55% |
| (Chongqing) Innovative Technology Co., Ltd. | 2021.04.06 | 55% | 52.25% |
| (Chongqing) Innovative Technology Co., Ltd. | 2021.05.06 | 52.25% | 44.79% |
| (Chongqing) Innovative Technology Co., Ltd. | 2021.05.25 | 44.79% | 39.19% |
(2). Impact of the transaction on minority interests and owners’ interests attributable to owners of
the parent company
√ Applicable □ N/A
In RMB
| (Chongqing) Innovative Technology Co., Ltd. | |
| Acquisition cost/disposal consideration | |
| -- Cash | 202,631,582.00 |
| -- Fair value of non-cash assets | |
| Total acquisition cost/disposal consideration | 202,631,582.00 |
| Less: Share of net assets of subsidiaries calculated based on the acquired/disposed shareholding ratio | 110,009,334.25 |
| Difference | 92,622,247.75 |
| Where: Adjustment to capital reserves | 92,622,247.75 |
| Adjustment to surplus reserves | |
| Adjustment to undistributed profits |
Other information
□ Applicable √ N/A
3. Equity in joint ventures or associates
√ Applicable □ N/A
(1). Significant joint ventures or associates
√ Applicable □ N/A
In RMB
| Joint ventures or associates | Principal operation place | Registration place | Business nature | Proportion of shareholding (%) | Accounting treatment method for investments in joint ventures or associates | |
| Direct | Indirect | |||||
| GDC Technology Limited (BVI) | Asia and North America | British Virgin Islands | R&D, production, and sales of digital cinema servers and cinema management system | 44.00 | Accounting for under equity method | |
Description of the difference between the proportion of shareholding and the proportion of voting rightsin joint ventures or associates:
None
Basis that the company owns less than 20% voting rights but may exercise major impact, or that thecompany owns 20% or over voting rights but does not has major impact:
NoneOn July 15, 2021, the Company’s subsidiary Appotronics HK acquired 8% shares as the compensationof GDC Technology Limited (BVI) in accordance with the Supplementary Agreement, and therefore theshareholding ratio changed from 36% to 44%.
(2). Major financial information of significant joint ventures
□ Applicable √ N/A
(3). Major financial information of significant associates
√ Applicable □ N/A
In RMB
| Closing balance/Amount for the current period | Opening balance/Amount for the prior period | |
| GDC Technology Limited (BVI) | GDC Technology Limited (BVI) | |
| Current assets | 648,413,809.69 | 553,504,350.37 |
| Non-current assets | 53,380,720.39 | 72,596,748.61 |
| Total assets | 701,794,530.08 | 626,101,098.98 |
| Current liabilities | 458,123,239.33 | 379,295,268.80 |
| Non-current liabilities | 25,008,058.43 | 41,349,472.31 |
| Total liabilities | 483,131,297.76 | 420,644,741.11 |
| Minority interests | ||
| Interests attributable to shareholders of the parent company | 218,663,232.32 | 205,456,357.87 |
| Share of net assets calculated based on shareholding ratio | 96,211,822.22 | 73,964,288.83 |
| Adjustment | 76,520,776.40 | 62,044,191.37 |
| --Goodwill | 77,772,341.43 | 62,560,946.33 |
| --Unrealized profits for insider transactions | -1,251,565.03 | -516,754.96 |
| --Others | ||
| Carrying amount of equity investments in associates | 166,676,657.87 | 131,338,347.84 |
| Fair values of equity investments in associates having publicly quoted prices | ||
| Operating income | 299,867,319.42 | 251,049,184.00 |
| Net profit | 55,000,205.18 | 6,256,577.59 |
| Net profit of discontinued operations | ||
| Other comprehensive income | 1,876,677.39 | 26,383,768.27 |
| Total comprehensive income | 56,876,882.57 | 32,640,345.86 |
| Dividends received from associates in the current year | ||
Other informationNone
(4). Summary financial information of insignificant joint ventures and associates
√ Applicable □ N/A
In RMB
| Closing balance/Amount for the current period | Opening balance/Amount for the prior period | |
| Joint ventures: | ||
| Total carrying amount of investments | ||
| Total amounts calculated based on shareholding proportions | ||
| --Net profit | ||
| --Other comprehensive income | ||
| --Total comprehensive income | ||
| Associates: | ||
| Total carrying amount of investments | 126,924,427.40 | 131,406,424.64 |
| Total amounts calculated based on shareholding proportions | ||
| --Net profit | 1,632,357.09 | -1,179,972.05 |
| --Other comprehensive income | -3,043,782.40 | -5,001,459.87 |
| --Total comprehensive income | -1,411,425.31 | -6,181,431.92 |
Other informationNone
(5). Descriptions of significant limitations over the ability of joint ventures or associates to transfer
funds to the Company
□ Applicable √ N/A
(6). Excessive loss of joint ventures or associates
□ Applicable √ N/A
(7). Unrecognized commitment relating to investments in joint ventures
□ Applicable √ N/A
(8). Contingent liabilities relating to investments in joint ventures or associates
□ Applicable √ N/A
4. Significant joint operations
□ Applicable √ N/A
5. Interests in structured entities that are not included in consolidated financial statementsDescription of structured entities that are not included in consolidated financial statements:
□ Applicable √ N/A
6. Others
□ Applicable √ N/A
X. Risks associated with financial instruments
√ Applicable □ N/A
The Company’s risk management objectives are to achieve a proper balance between risks and yield,minimize the adverse impacts of risks on the Company’s operation performance, and maximize thebenefits of the shareholders and other stakeholders. Based on these risk management objectives, theCompany’s basic risk management strategy is to identify and analyze its exposure to various risks,establish an appropriate minimum tolerance to risk, implement risk management, and monitor regularlyand effectively these exposures to ensure the risks are monitored at a certain level.
The Company is exposed to various risks associated with financial instruments in its daily routines,primarily including credit risk, liquidity risk and market risk. The management has reviewed and approvedpolicies to manage these risks, summarized as below.
(I) Credit risk
Credit risk refers to the risk that a party of the financial instrument will default on its obligationsresulting in financial loss to the counterparty.
1. Management of credit risk
(1) Evaluation of credit risk
The Company assesses at each balance sheet date whether the credit risk of the underlying financialinstruments has increased significantly since initial recognition. In determining whether the credit risk hasincreased significantly since initial recognition, the Company considers reasonable and supportableinformation that is available without undue cost or effort, including quantitative and qualitative analysisbased on historical data, ranking of external credit risks and forward-looking information. The Companycompares the risk of a default occurring on a financial instrument as at the balance sheet date with the riskof a default occurring on the financial instrument as at the date of initial recognition based on individualfinancial instrument or a group of financial instruments with similar credit risk characteristics, todetermine the change of the risk of a default occurring on a financial instrument over the expected life.
The Company considers the credit risk of financial instruments has increased significantly when oneor more of the following quantitative and qualitative criteria are met:
1) The quantitative criterion primarily refers to a certain percentage of increase in the probability ofdefault over the remaining life of the financial instruments as of the balance sheet date when comparingwith that at initial recognition of the financial instruments;
2) The qualitative criterion includes, inter alia, adverse material changes in business or financialconditions that are expected to cause a significant decrease in the debtor’s ability to meet its debtobligations, and an actual or expected significant adverse change in the technological, market, economic,or legal environment of the debtor that results in a significant decrease in the debtor’s ability to meet itsdebt obligations.
(2) Definition of defaulted or credit-impaired assets
A financial asset is defined as defaulted when the financial instrument meets one or more conditionsstated as below, and the criterion of defining defaulted asset is consistent with that of defining credit-impaired asset:
1) significant financial difficulty of the debtor;
2) a breach of contract terms with binding force by the debtor;
3) it is becoming probable that the debtor will enter bankruptcy or other financial reorganization;
4) the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financialdifficulty, has granted to the debtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of ECL
Key parameters to measure ECL include the probability of default, loss given default and theexposure at default. The Company established models of the probability of default, loss given default andthe exposure at default on the basis of quantitative analysis on historical statistical data (such ascounterparty ranking, guarantee methods, collateral category, and repayment way) and forward-lookinginformation.
3. The reconciliation of the opening balance and the closing balance of the provision for impairmentof financial instruments is described in detail in VII.4, VII.5, VII.6, VII.8, VII.10, and VII.16 of SectionX.
4. Credit risk exposure and credit risk concentration
The Company’s credit risk is primarily from cash and bank balances and receivables. In order tocontrol the risks associated with aforementioned items, the Company has taken the following measures.
(1) Cash and bank balances
The credit risk of the Company is limited because the Company has deposited bank deposits andother monetary funds in banks with high credit ratings.
(2) Receivables
The Company regularly evaluates the creditworthiness of its customers with deals on credit, andselects to deal with approved and creditworthy customers subject to the results of the credit assessment
with monitoring the balance of its receivables, so as to ensure that the Company is not exposed tosignificant risk of bad debt.
No collaterals are required since the Company only deals with third parties that are approved andcreditworthy. The concentrated credit risks are managed by customers. As of December 31, 2021, theCompany is exposed to certain concentration of credit risks, as the Company’s accounts receivable fromtop 5 customers have accounted for 67.07% of the total balance of accounts receivable (December 31,2020: 86.37%). The Company held no collateral or other credit ranking measures for the balance ofaccounts receivable.
The maximum exposure to the Company is the carrying amount of each financial asset in the balancesheet.
(II) Liquidity risk
Liquidity risk refers to the risk that the Company is in shortage of funds in performing obligationsthat are settled by delivering cash or another financial asset. Liquidity risk may arise from an inability tosell a financial asset at fair value as soon as possible, a counterparty’s inability to pay its contractualliabilities, the accelerated maturity of liabilities, or an inability to generate expected cash flows.
In order to control this risk, the Company balances the continuity and flexibility of financing by usingvarious financing measures such as notes settlement and bank loans comprehensively and adopting bothlong-term and short-term financing methods to optimize the financing structure. The Company hasreceived credit facilities from a number of commercial banks to satisfy its working capital requirementsand capital expenditures.
Financial liabilities classified by remaining maturity dates
| Item | Closing balance | ||||
| Book value | Undiscounted contract amount | Within 1 year | 1-3 years | Over 3 years | |
| Bank borrowings | 509,637,141.27 | 565,968,031.25 | 161,844,102.83 | 335,211,636.92 | 68,912,291.50 |
| Notes payable | 144,456,001.87 | 144,456,001.87 | 144,456,001.87 | ||
| Accounts payable | 409,889,533.01 | 409,889,533.01 | 409,889,533.01 | ||
| Other payables | 54,115,784.80 | 54,115,784.80 | 54,115,784.80 | ||
| Lease liabilities | 29,560,179.86 | 30,987,424.69 | 19,686,637.60 | 10,725,062.82 | 575,724.27 |
| Subtotal | 1,147,658,640.81 | 1,205,416,775.62 | 789,992,060.11 | 345,936,699.74 | 69,488,015.77 |
(Continued to above table)
| Item | Closing of last year | ||||
| Book value | Undiscounted contract amount | Within 1 year | 1-3 years | Over 3 years | |
| Bank borrowings | 335,041,546.85 | 347,893,031.23 | 281,565,349.76 | 66,327,681.47 | |
| Notes payable | 116,822,674.67 | 116,822,674.67 | 116,822,674.67 | ||
| Item | Closing of last year | ||||
| Book value | Undiscounted contract amount | Within 1 year | 1-3 years | Over 3 years | |
| Accounts payable | 226,494,815.90 | 226,494,815.90 | 226,494,815.90 | ||
| Other payables | 59,848,053.83 | 59,848,053.83 | 59,848,053.83 | ||
| Long-term payables | 3,262,450.00 | 3,572,382.75 | 3,572,382.75 | ||
| Subtotal | 741,469,541.25 | 754,630,958.38 | 684,730,894.16 | 69,900,064.22 | |
(III) Market riskMarket risk refers to the risk that the fair value or future cash flows of a financial instrument willfluctuate because of changes in market prices. Market risk mainly includes interest rate risk and currencyrisk.
1. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument willfluctuate because of changes in market interest rates. The Company is exposed to the risk of fair valueinterest rate due to financial instruments with a fixed interest rate and to the risk of cash flow interest ratedue to financial instruments with a floating interest rate. The Company determines the proportion betweenthe fixed-rate financial instruments and the floating-rate financial instruments based on market conditions,and maintains appropriate portfolios of financial instruments through regular review and monitoring. Thecash flow interest rate risk exposed to the Company relates primarily to the Company’s floating-rateinterest-bearing bank borrowings.As at December 31, 2021, the principal of the Company’s floating-rate interest-bearing bankborrowings amounted to RMB 509,637,141.27 (December 31, 2020: RMB 334,317,535.43). On the basisof the assumption that the interest rate has changed 50 basic points, where all other variables are heldconstant, it will bring no material impacts on the Company’s total profits and shareholders’ equity.
2. Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuatebecause of changes in foreign exchange rates. The Company’s exposure to the currency risk is primarilyassociated with the Company’s monetary assets and liabilities dominated in foreign currencies. If themonetary assets and liabilities dominated in foreign currencies are imbalanced in a short time, theCompany will purchase and sell foreign currencies at the market exchange rate to keep the net riskexposure acceptable.
The closing balance of the Company’s monetary assets and liabilities dominated in foreign currenciesis disclosed in VII.82 of Section X in details.XI. Disclosure of fair value
1. The closing balance of the fair value of assets and liabilities measured at fair value
√ Applicable □ N/A
In RMB
| Item | Closing balance of fair value | |||
| Level 1 | Level 2 | Level 3 | Total | |
| I. Continuous fair value measurement | ||||
| (I) Held-for-trading financial assets | 16,200,000.00 | 401,000,000.00 | 417,200,000.00 | |
| 1. Financial assets at fair value through profit or loss | 16,200,000.00 | 401,000,000.00 | 417,200,000.00 | |
| (1) Investment in debt instrument | ||||
| (2) Investment in equity instrument | 16,200,000.00 | 30,000,000.00 | 46,200,000.00 | |
| (3) Derivative financial assets | ||||
| (4) Structural deposits | 371,000,000.00 | 371,000,000.00 | ||
| 2. Designated as financial assets at fair value through profit or loss | ||||
| (1) Investment in debt instrument | ||||
| (2) Investment in equity instrument | ||||
| (II) Other debt investments | ||||
| (III) Other equity instrument investments | 7,075,419.38 | 7,075,419.38 | ||
| (IV) Investment properties | ||||
| 1. Land use right for leasing purpose | ||||
| 2. Buildings leased | ||||
| 3. Land use right held for the purpose of transfer after value appreciation | ||||
| (V) Biological assets | ||||
| 1. Consumable biological assets | ||||
| 2. Productive biological assets | ||||
| Receivables financing | 244,860.00 | 244,860.00 | ||
| Total assets continuously measured at fair value | 16,200,000.00 | 408,320,279.38 | 424,520,279.38 | |
| (VI) Held-for-trading financial liabilities | ||||
| 1. Financial liabilities at fair value through profit or loss | ||||
| Where: Held-for-trading bonds issued | ||||
| Derivative financial liabilities | ||||
| Others |
| 2. Designated as financial liabilities at fair value through profit or loss | ||||
| Total liabilities continuously measured at fair value | ||||
| II. Non-continuous fair value measurement | ||||
| (I) Held-for-sale assets | ||||
| Total assets that are not continuously measured at fair value | ||||
| Total liabilities that are not continuously measured at fair value |
2. Basis for determining the market price of continuous and non-continuous level 1 fair value
measurement items
□ Applicable √ N/A
3. Valuation techniques and qualitative and quantitative information of key parameters adoptedfor continuous and non-continuous level 2 fair value measurement items
√ Applicable □ N/A
The equity instrument investment presented stocks subscribed on the New Third Board: consideringthe factors including the level of activity for trading of stocks on the New Third Board, the Companyclassified stocks on the New Third Board as level 2 for the measurement of fair value, where the fairvalue is determined according to the average closing price of the previous 20 trading days.
4. Valuation techniques and qualitative and quantitative information of key parameters adopted
for continuous and non-continuous level 3 fair value measurement items
√ Applicable □ N/A
No public market is available for equity instrument investments, structural deposits, receivablesfinancing, and investment in other equity instruments, hence the fair value of the foregoing are measuredat cost.
5. Reconciliation between opening and closing carrying amounts and sensitivity analysis of
unobservable parameters for continuous level 3 fair value measurement items
□ Applicable √ N/A
6. Where transfers among levels occurred in the period, transfer reasons and policies for
determining transfer time point for continuous fair value measurement items
□ Applicable √ N/A
7. Changes in valuation techniques in the period and reasons for changes
□ Applicable √ N/A
8. Fair value of financial assets and financial liabilities not measured at fair value
□ Applicable √ N/A
9. Others
□ Applicable √ N/A
XII. Related-party relationships and transactions
1. Parent of the Company
√ Applicable □ N/A
In RMB 0’000
| Parent company | Registration place | Business nature | Registered capital | Proportion of the Company’s shares held by the parent company (%) | Proportion of the Company’s voting right held by the parent company (%) |
| Shenzhen Appotronics Holdings Limited | Shenzhen | R&D and sales of semiconductor products | 1,000 | 17.62 | 17.62 |
Description of the parent company of the CompanyNoneThe ultimate controlling party of the Company is LI Yi.Other information:
None
2. Subsidiaries of the Company
Refer to the Notes for details about the subsidiaries of the Company
√ Applicable □ N/A
Refer to the description in IX.1 of Section X for details about the subsidiaries of the Company
3. Joint ventures and associates of the Company
Refer to the Notes for details about the significant joint ventures or associates of the Company
√ Applicable □ N/A
Refer to the description in IX.1 of Section X for details about the associates of the CompanyDetails of other joint ventures or associates having related-party transactions and balances with theCompany in the period or in prior periods:
□ Applicable √ N/A
Other information
□ Applicable √ N/A
4. Other related parties of the Company
√ Applicable □ N/A
| Other related party | Relationship between other related party and the Company |
| Beijing Donview Education Technology Co., Ltd. and its affiliates | Minority shareholders holding more than 10% shares in the subsidiary and their affiliates |
| Shenzhen YLX Technology Development Co., Ltd. | Controlled by the same de facto controller |
| Xiaomi Communications Technologies Co., Ltd. and its affiliates | Minority shareholders holding more than 10% shares in the subsidiary and their affiliates |
| CFEC and its affiliates | Minority shareholders holding more than 10% shares in the subsidiary and their affiliates |
| WeCast and its affiliates | Enterprise in which the actual controller holds the post of director |
| Shenzhen Bevix Technology Co., Ltd. | Holding more than 5% of shares in the company |
Other informationNone
5. Related-party transactions
(1). Sales and purchase of goods, rendering and receipt of services
Purchase of goods/receipt of services
√ Applicable □ N/A
In RMB
| Related party | Subject matter | Amount for the current period | Amount for the prior period |
| GDC Technology Limited (BVI) and its affiliates | Electronic components and services | 5,723,460.99 | 8,703,704.00 |
| Beijing Donview Education Technology Co., Ltd. and its affiliates | Service | 14,070.79 | 36,371.68 |
| Shenzhen YLX Technology Development Co., Ltd. | Electronic components and services | 1,160,549.59 | |
| Xiaomi Communications Technologies Co., Ltd. and its affiliates | Electronic components and services | 244,815,868.46 | 205,885,065.38 |
| CFEC and its affiliates | Power supply, water cooling and services | 47,318,159.54 | 27,172,641.25 |
| WeCast and its affiliates | Service | 241,371.26 | |
| Subtotal | 299,273,480.63 | 241,797,782.31 |
Sales of goods/rendering of services
√ Applicable □ N/A
In RMB
| Related party | Subject matter | Amount for the current period | Amount for the prior period |
| GDC Technology Limited (BVI) and its affiliates | Cinema projector, spare parts, and software | 9,973,463.25 | 3,740,484.98 |
| WeCast and its affiliates | Laser TV, smart mini projector | 17,132,902.25 | |
| Beijing Donview Education Technology Co., Ltd. and its affiliates | Laser business education projector | 4,536,140.66 | 26,233,035.11 |
| Xiaomi Communications Technologies Co., Ltd. and its affiliates | Laser TV, smart mini projector | 592,774,055.44 | 650,541,969.04 |
| CFEC and its affiliates | Laser digital cinema projector, laser light source, lease services | 74,259,971.78 | 92,512,007.78 |
| Shenzhen Bevix Technology Co., Ltd. | Service | 4,508.85 |
| CINIONIC and its affiliates | Laser light source | 32,361,780.86 | 35,706,691.15 |
| Subtotal | 731,038,314.24 | 808,738,696.91 |
Description of sales and purchase of goods, rendering and receipt of services
□ Applicable √ N/A
(2). Details of trust/contracting and trust management/contract-issuing with related partiesDetails of trust/contracting where a group entity is the trustor/main contractor:
□ Applicable √ N/A
Description of trust/contracting with related parties
□ Applicable √ N/A
Details of trust management/contract-issuing where a group entity is the trustor/main contractor
□ Applicable √ N/A
Description of trust management/contract-issuing with related parties
□ Applicable √ N/A
(3). Leases with related parties
The Company as the lessor:
□ Applicable √ N/A
The Company as the lessee:
√ Applicable □ N/A
In RMB
| Lessor | Type of leased assets | Lease fees recognized in the current period | Lease fees recognized in the prior period |
| CFEC and its affiliates | Property lease | 1,981,168.69 | 1,794,184.41 |
Description of leases with related parties
□ Applicable √ N/A
(4). Guarantees with related parties
The Company as a guarantor:
□ Applicable √ N/A
The Company as a guaranteed party:
□ Applicable √ N/A
Description of guarantees with related parties
□ Applicable √ N/A
(5). Borrowings/loans with related parties
√ Applicable □ N/A
In RMB
| Related party | Borrowing amount | Start date | Expiry date | Description |
| Borrowing | ||||
| CFEC and its affiliates | 19,320,000.00 | 2020.07.06 | 2021.07.05 | Repaid on January 26, 2021 |
(6). Assets transfer/debt restructuring with related parties
□ Applicable √ N/A
(7). Compensation for key management personnel
√ Applicable □ N/A
In RMB 0’000
| Item | Amount for the current period | Amount for the prior period |
| Compensation for key management personnel | 1,234.62 | 1,463.12 |
(8). Other related-party transactions
□ Applicable √ N/A
6. Amounts due from/to related parties
(1). Amounts due from related parties
√ Applicable □ N/A
In RMB
| Item | Related party | Closing balance | Opening balance | ||
| Carrying amount | Bad debt provision | Carrying amount | Bad debt provision | ||
| Accounts receivable | CINIONIC and its affiliates | 26,592,355.61 | 1,329,617.78 | 452,175.57 | 22,608.78 |
| GDC Technology Limited (BVI) and its affiliates | 5,159,950.72 | 257,997.54 | 2,283,483.24 | 114,174.16 | |
| WeCast and its affiliates | 20,597,638.81 | 1,029,881.92 | |||
| Beijing Donview Education Technology Co., Ltd. and its affiliates | 912,982.89 | 45,649.14 | 3,017.00 | 150.85 | |
| Xiaomi Communications Technologies Co., Ltd. and its affiliates | 132,000,017.31 | 6,600,000.87 | 248,915,862.75 | 12,445,793.14 | |
| CFEC and its affiliates | 1,019,071.79 | 51,248.40 | 6,125,422.64 | 306,402.16 | |
| Subtotal | 186,282,017.13 | 9,314,395.65 | 257,779,961.20 | 12,889,129.09 | |
| Prepayments | CFEC and its affiliates | 1,369,286.22 | 3,107,696.59 | ||
| Xiaomi Communications Technologies Co., Ltd. and its affiliates | 40,000.00 | ||||
| GDC Technology Limited (BVI) and its affiliates | 2,883,384.53 | ||||
| Subtotal | 1,409,286.22 | 5,991,081.12 | |||
| Other receivables | CFEC and its affiliates | 229,355.00 | 11,467.75 | 296,435.00 | 14,821.75 |
| GDC Technology Limited (BVI) and its affiliates | 20,286,601.00 | 383,135.75 | |||
| Xiaomi Communications Technologies Co., Ltd. and its affiliates | 100,000.00 | 5,000.00 | |||
| Subtotal | 20,515,956.00 | 394,603.50 | 396,435.00 | 19,821.75 |
(2). Amounts due to related parties
√ Applicable □ N/A
In RMB
| Item | Related party | Closing balance of carrying amount | Opening balance of carrying amount |
| Accounts payable | GDC Technology Limited (BVI) and its affiliates | 5,593.76 | |
| Shenzhen YLX Technology Development Co., Ltd. | 1,147,275.29 | ||
| Xiaomi Communications Technologies Co., Ltd. and its affiliates | 65,042,097.29 | ||
| CFEC and its affiliates | 17,315,868.17 | ||
| Subtotal | 83,510,834.51 | ||
| Notes payable | CFEC and its affiliates | 5,049,000.17 | |
| Subtotal | 5,049,000.17 | ||
| Advance from customers | CFEC and its affiliates | 11,025,498.93 | 14,032,071.28 |
| Subtotal | 11,025,498.93 | 14,032,071.28 | |
| Contract liabilities | GDC Technology Limited (BVI) and its affiliates | 3,469.81 | 15,108.32 |
| CFEC and its affiliates | 4,396,474.85 | 1,384,955.75 | |
| Subtotal | 4,399,944.66 | 1,400,064.07 | |
| Other payables | Beijing Donview Education Technology Co., Ltd. and its affiliates | 10,800.00 | |
| Xiaomi Communications Technologies Co., Ltd. and its affiliates | 1,976.10 | 101,668.48 | |
| CFEC and its affiliates | 19,343,613.33 | ||
| Subtotal | 12,776.10 | 19,445,281.81 | |
| Other current liabilities | Xiaomi Communications Technologies Co., Ltd. and its affiliates | 16,804,816.23 | |
| Subtotal | 16,804,816.23 |
7. Related party commitments
□ Applicable √ N/A
8. Others
□ Applicable √ N/A
XIII. Share-based payments
1. Summary of share-based payments
√ Applicable □ N/A
Unit: Share, RMB
| Item | Company | (Chongqing) Innovative Technology Co., Ltd. |
| Total number of the Company’s equity instruments granted during the period | 26,150,000 | 1,550,500 |
| Total number of the Company’s equity instruments executed during the period | 1,000,000 | |
| Total number of the Company’s equity instruments lapsed during the period | 4,022,025.00 | |
| Range of exercise prices and remaining contractual life of the Company’s share options outstanding at the end of the period | Grant date: October 14, 2019; grant price: RMB 17.37/share; 10 months Grant date: October 13, 2020; grant price: RMB 17.37/share; 10 months Grant date: January 1, 2021; grant price: RMB 4.30/share; 12 months Grant date: April 22, 2021; grant price: RMB 20.945/share; 27 months Grant date: April 22, 2021; grant price: RMB 18.445/share; 27 months Grant date: April 22, 2021; grant price: RMB 17.445/share; 27 months Grant date: December 7, 2021; grant price: RMB 20.00/share; 35 months Grant date: December 7, 2021; grant price: RMB 23.00/share; 35 months | Grant date: December 31, 2021; grant price: RMB 1/share; 54 months |
| Range of exercise prices and remaining contractual life of the Company’s other equity instruments outstanding at the end of the period | None | None |
Other informationNone
2. Equity-settled share-based payments
√ Applicable □ N/A
In RMB
| Item | Company | Chongqing |
| The method of determining the fair value of equity instruments at the grant date | Option pricing model | Evaluation of all shareholder’s equity interests |
| The basis of determining the number of equity instruments expected to be executed | Actual grant amount | Actual grant amount |
| Reasons for the significant difference between the estimate in the current period and that in the prior period | None | None |
| Amounts of equity-settled share-based payments accumulated in capital reserve | 81,144,459.30 | 10,403,484.60 |
| Total expenses recognized arising from equity-settled share-based payments in the current period | 52,961,562.89 | 10,403,484.60 |
Other informationAll restricted shares granted by the Company are Type II restricted shares, while the registered capitalgranted by Chongqing was treated with reference to Type I restricted shares
3. Cash-settled share-based payments
□ Applicable √ N/A
4. Modification to and termination of share-based payments
□ Applicable √ N/A
5. Others
□ Applicable √ N/A
XIV. Commitments and contingencies
1. Significant commitments
√ Applicable □ N/A
Significant external commitments, and nature and amount thereof as of the balance sheet dateSignificant lease contracts which the Company has entered into or will perform and their financialimpacts are disclosed in the following table:
| No. | Rent address | Rent area (square meters) | Rent purpose | Rent period | Rent expense/year |
| 1 | 20/F, 21/F, 22/F, United Headquarter Building, High-Tech Zone, No. 63 Xuefu Road, Nanshan District, Shenzhen | 6,143.79 | Research and development, office administration | 2022.1.1-2026.12.31 | 5,310,893.71 |
| 2 | Yaochuan Industrial Zone, Tangwei Community, Fuhai Street, Bao’an District, Shenzhen | 23,765.57 | Plant | 2018.12.1-2022.11.30 | 12,319,285.88 |
2. Contingencies
(1). Significant contingencies as of the balance sheet date
√ Applicable □ N/A
Pending litigation
1. Civil litigation and arbitration where the Company acted as the plaintiff
As of December 31, 2021, there are 23 civil litigation cases where the Company acted as a plaintiff,specifically including:
| Case No. | Cause of action | Plaintiff/Appellant | Defendant/Appelee | Patents involved | Amount | Progress |
| (2019) Yue 03 Min Chu No. 2943 (2021) Zui Gao Fa Zhi Min Zhong No. 1582 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Electronics (Shanghai) Co., Ltd.; Defendant 2: Delta Video Display System (Wujiang) Limited; Defendant 3: Shenzhen Super Network Technology Co., Ltd. | 200810065225.X | RMB 8.00 million | (1) Compensation amount decided in the trial of the first instance: RMB 271,399.40; (2) Under trial of the second instance |
| (2019) Yue 03 Min Chu No. 2944 (2021) Zui Gao Fa Zhi Min Zhong No. 1718 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Electronics (Shanghai) Co., Ltd.; Defendant 2: Delta Video Display System (Wujiang) Limited; Defendant 3: Shenzhen Super Network Technology Co., Ltd. | 200810065225.X | RMB 8.00 million | (1) Compensation amount decided in the trial of the first instance: RMB 501,399.40; (2) Under trial of the second instance |
| (2019) Yue 03 Min Chu No. 2946 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Electronics (Shanghai) Co., Ltd.; Defendant 2: Delta Video Display System (Wujiang) Limited; Defendant 3: Shenzhen Super Network Technology Co., Ltd. | 200810065225.X | RMB 4.00 million | (1) Compensation amount decided in the trial of the first instance: RMB 151,399.40; (2) Both the plaintiff and defendant in the trial of the first instance appealed; under trial of the second instance |
| (2019) Yue 03 Min Chu No. 2948 (2021) Zui Gao Fa Zhi Min Zhong No. 1548 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Electronics (Shanghai) Co., Ltd.; Defendant 2: Delta Video Display System (Wujiang) Limited; Defendant 3: Shenzhen Super Network Technology Co., Ltd. | 200810065225.X | RMB 4.00 million | (1) Compensation amount decided in the trial of the first instance: RMB 146,399.40; (2) Under trial of the second instance |
| (2019) Yue 03 Min Chu No. 2951 (2021) Zui Gao Fa Zhi Min Zhong No. 1550 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Electronics (Shanghai) Co., Ltd.; Defendant 2: Delta Video Display System (Wujiang) Limited; Defendant 3: Shenzhen Super Network Technology Co., Ltd. | 200810065225.X | RMB 4.00 million | (1) Compensation amount decided in the trial of the first instance: RMB 581,399.40; (2) Under trial of the second instance |
| 19-cv-00466-RGD-LRL | Correcting the inventor of the patent | Appotronics Corporation Limited | Defendant: Delta Electronics, Inc. | Patent No. 9,024,241 | N/A | Accepted but not tried |
| (2021) Yue 03 Min Chu No. 2295 | Dispute over the ownership of patent right | Appotronics Corporation Limited, HU Fei, LI Yi | Defendant: Delta Electronics, Inc., ZHANG Kesu, HUA Jianhao, WANG Bo | ZL201610387831.8 | RMB 0.30 million | Case accepted for trial of the first instance |
| (2020) Yue 73 Zhi Min Chu No. 1335 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Video Display System (Wujiang) Limited Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Delta Electronics (Shanghai) Co., Ltd. Defendant 5: Guangdong Jianye Display Information Technology Co., Ltd. Defendant 6: Guangzhou Jianye Network Technology Co., Ltd. | ZL200880107739.5 | RMB 3.00 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| (2020) Yue 73 Zhi Min Chu No. 1336 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Video Display System (Wujiang) Limited Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Delta Electronics (Shanghai) Co., Ltd. Defendant 5: Guangdong Jianye Display Information Technology Co., Ltd. Defendant 6: Guangzhou Jianye Network Technology Co., Ltd. | ZL200880107739.5 | RMB 6.50 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| (2020) Yue 73 Zhi Min Chu No. 1337 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Video Display System (Wujiang) Limited Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Digital Projection (Beijing) Electronics Technology Co., Ltd. Defendant 5: Guangdong Jianye Display Information Technology Co., Ltd. Defendant 6: Guangzhou Jianye Network Technology Co., Ltd. | ZL200880107739.5 | RMB 2.50 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| (2020) Yue 73 Zhi Min Chu No. 1338 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Video Display System (Wujiang) Limited Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Delta Electronics (Shanghai) Co., Ltd. Defendant 5: Guangdong Jianye Display Information Technology Co., Ltd. Defendant 6: Guangzhou Jianye Network Technology Co., Ltd. | ZL200880107739.5 | RMB 2.00 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| (2020) Yue 73 Zhi Min Chu No. 1340 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Video Display System (Wujiang) Limited Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Digital Projection (Beijing) Electronics Technology Co., Ltd. Defendant 5: Guangdong Jianye Display Information Technology Co., Ltd. Defendant 6: Guangzhou Jianye Network Technology Co., Ltd. | ZL200880107739.5 | RMB 6.00 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| (2020) Yue 73 Zhi Min Chu No. 1341 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Video Display System (Wujiang) Limited Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Delta Electronics (Shanghai) Co., Ltd. Defendant 5: Guangdong Jianye Display Information Technology Co., Ltd. Defendant 6: Guangzhou Jianye Network Technology Co., Ltd. | ZL200880107739.5 | RMB 14.00 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| (2020) Yue 73 Zhi Min Chu No. 1361 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Electronics (Shanghai) Co., Ltd. Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Guangdong Jianye Display Information Technology Co., Ltd. | ZL200880107739.5 | RMB 0.75 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| Defendant 5: Guangzhou Jianye Network Technology Co., Ltd. | ||||||
| (2020) Yue 73 Zhi Min Chu No. 1339 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Electronics (Shanghai) Co., Ltd. Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Guangdong Jianye Display Information Technology Co., Ltd. Defendant 5: Guangzhou Jianye Network Technology Co., Ltd. | ZL200810065225.X | RMB 0.75 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| (2020) Yue 73 Zhi Min Chu No. 1353 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Video Display System (Wujiang) Limited Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Delta Electronics (Shanghai) Co., Ltd. Defendant 5: Guangdong Jianye Display Information Technology Co., Ltd. Defendant 6: Guangzhou Jianye Network Technology Co., Ltd. | ZL200810065225.X | RMB 14.00 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| (2020) Yue 73 Zhi Min Chu No. 1355 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Video Display System (Wujiang) Limited Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Digital Projection (Beijing) Electronics Technology Co., Ltd. Defendant 5: Guangdong Jianye Display Information Technology Co., Ltd. Defendant 6: Guangzhou Jianye Network Technology Co., Ltd. | ZL200810065225.X | RMB 6.00 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| (2020) Yue 73 Zhi Min Chu No. 1356 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Video Display System (Wujiang) Limited Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Delta Electronics (Shanghai) Co., Ltd. Defendant 5: Guangdong Jianye Display Information Technology Co., Ltd. Defendant 6: Guangzhou Jianye Network Technology Co., Ltd. | ZL200810065225.X | RMB 6.50 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| (2020) Yue 73 Zhi Min Chu No. 1357 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Video Display System (Wujiang) Limited Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Digital Projection (Beijing) Electronics Technology Co., Ltd. Defendant 5: Guangdong Jianye Display Information Technology Co., Ltd. Defendant 6: Guangzhou Jianye Network Technology Co., Ltd. | ZL200810065225.X | RMB 2.50 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| (2020) Yue 73 Zhi Min Chu No. 1358 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Video Display System (Wujiang) Limited Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Delta Electronics (Shanghai) Co., Ltd. Defendant 5: Guangdong Jianye Display Information Technology Co., Ltd. Defendant 6: Guangzhou Jianye Network Technology Co., Ltd. | ZL200810065225.X | RMB 2.00 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| (2020) Yue 73 Zhi Min Chu No. 1359 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Video Display System (Wujiang) Limited Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Delta Electronics (Shanghai) Co., Ltd. Defendant 5: Guangdong Jianye Display | ZL200810065225.X | RMB 3.00 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| Information Technology Co., Ltd. Defendant 6: Guangzhou Jianye Network Technology Co., Ltd. | ||||||
| (2020) Yue 73 Zhi Min Chu No. 1360 | Infringement on patent for invention | Appotronics Corporation Limited | Defendant 1: Delta Video Display System (Wujiang) Limited Defendant 2: WANG Yuhai Defendant 3: Hunan Dehao Cultural and Creative Co., Ltd. Defendant 4: Digital Projection (Beijing) Electronics Technology Co., Ltd. Defendant 5: Guangdong Jianye Display Information Technology Co., Ltd. Defendant 6: Guangzhou Jianye Network Technology Co., Ltd. | ZL200810065225.X | RMB 3.00 million and right protection expenses of RMB 0.50 million | In trial of the first instance |
| (2021) Yue 73 Zhi Min Chu No. 1860 | Maliciously initiate an intellectual property litigation | Appotronics Corporation Limited | Defendant: Delta Electronics, Inc. | N/A | RMB 10.00 million | In trial of the first instance |
2. Civil litigation and arbitration where the Company acted as the defendant
As of December 31, 2021, there are 7 civil litigation cases where the Company was a defendant, specifically including:
| Case No. | Cause of action | Plaintiff | Defendant | Patents involved | Amount involved | Progress |
| (2019) Yue 73 Zhi Min Chu No. 662 | Infringement on patent for invention | Delta Electronics, Inc. | Appotronics Corporation Limited; Futian SPN Projector & Video System Firm of Shenzhen | ZL201610387831.8 | Loss compensation of RMB 16.00 million + litigation costs of RMB 145,343 | In trial of the first instance |
| Case No. | Cause of action | Plaintiff | Defendant | Patents involved | Amount involved | Progress |
| (2019) Jing 73 Min Chu No. 1275 | Fengmi (Beijing) Technology Co., Ltd.; Appotronics Corporation Limited | ZL201410249663.7 | Loss compensation of RMB 15.00 million + litigation costs of RMB 1.01 million | The judgment of the first instance in January 2022 held that no infringement is constituted | ||
| (2019) Jing 73 Min Chu No. 1276 | Fengmi (Beijing) Technology Co., Ltd.; Appotronics Corporation Limited | ZL201610387831.8 | Loss compensation of RMB 15.00 million + litigation costs of RMB 1.01 million | The judgment of the first instance in January 2022 held that no infringement is constituted | ||
| (2021) Hu 73 Zhi Min Chu No. 1070 | Appotronics Corporation Limited and Shanghai Haichi Digital Technology Co., Ltd. | ZL201110041436.1 | Loss compensation of RMB 15.00 million + litigation costs of RMB 1.01 million | In trial of the first instance | ||
| (2021) Chuan 01 Zhi Min Chu No. 684 | Appotronics Corporation Limited Chengdu Jinxi Guangxian Information Technology Co., Ltd. | ZL201410249663.7 | Loss compensation of RMB 15.00 million + litigation costs of RMB 1.01 million | In trial of the first instance | ||
| (2021) Chuan 01 Zhi Min Chu No. 685 | ZL201610387831.8 | Loss compensation of RMB 15.00 million + litigation costs of RMB 1.01 million | In trial of the first instance | |||
| (2021) Chuan 01 Zhi Min Chu No. 686 | ZL201110041436.1 | Loss compensation of RMB 15.00 million + litigation costs of RMB 1.01 million | In trial of the first instance |
(2). Description shall also be provided even if the Company has no significant contingencies to be disclosed:
□ Applicable √ N/A
3. Others
□ Applicable √ N/A
XV. Events after the balance sheet date
1. Material non-adjusting event
√ Applicable □ N/A
In RMB
| Item | Content | Effects on the financial position and operating results | Reasons for not being able to estimate such effects |
| Issuance of stocks and bonds | |||
| Significant external investments | |||
| Significant debt restructuring | |||
| Natural disaster | |||
| Significant change in foreign exchange rate | |||
| Arbitration | In January 2022, GDC Cayman proposed to terminate several important equity provisions, including the veto right of Appotronics HK with respect to GDC BVI, on the ground of getting listed. GDC Cayman and GDC BVI raised arbitration claims to the American Arbitration Association against the Company and Appotronics HK on the ground that the Company failed to assist them in getting listed, hence constituting | According to professional opinions of attorneys, the claims raised by GDC Cayman and GDC BVI in the arbitration request are not supported by fact. The Company has engaged a professional attorney team and taken relevant legal measures to safeguard the legitimate rights and interests of the Company and all shareholders in accordance with law. Since this case was just accepted and the trial has not been started, the impact of such case on the profit or |
| violation of agreement, requesting compensation in the amount of USD 38.00 million. The Company disagreed with the termination of the important equity provisions, including the veto right of Appotronics HK with respect to GDC BVI, and raised counter-claims against GDC BVI and the actual controller ZHANG Wanneng and the management team thereof on the ground that GDC Cayman, GDC BVI, Mr. ZHANG Wanneng, and the management team violated the provisions of the Shareholders’ Agreement and Settlement Agreement, requesting the compensation of no less than USD 40.00 million for the Company and Appotronics HK. As of the date when the financial statements are approved for | loss of the Company cannot be determined at present; the eventual actual impact depends on the award of the arbitration tribunal or the negotiation between the parties. |
release, this case is in the stage ofappeal initiated by the plaintiffs.
2. Profit distribution
√ Applicable □ N/A
In RMB
| Proposed distributions of profits or dividends | 47,539,474.61 |
| Profits or dividends declared for distribution upon discussion and approval |
3. Sales return
□ Applicable √ N/A
4. Description of other events after the balance sheet date
□ Applicable √ N/A
XVI. Other significant events
1. Corrections of prior period errors
(1). Retrospective application
□ Applicable √ N/A
(2). Prospective application
□ Applicable √ N/A
2. Debt restructuring
□ Applicable √ N/A
3. Asset swap
(1). Exchange of non-monetary assets
□ Applicable √ N/A
(2). Other asset swap
□ Applicable √ N/A
4. Annuity plan
□ Applicable √ N/A
5. Discontinued operations
□ Applicable √ N/A
6. Segment reporting
(1). Determination basis and accounting policies of reporting segments
□ Applicable √ N/A
(2). Financial information of reporting segments
□ Applicable √ N/A
(3). If the Company has no reporting segments, or cannot disclose the total assets and liabilities of
reporting segments, specify the reasons
√ Applicable □ N/A
The Company has no reporting segments due to absence of diversified operations. A breakdown ofthe Company’s principal activity incomes and costs categorized by businesses, products and regions isdisclosed as below:
Categorized by businesses and products:
In RMB 0’000
| Item | Amount of the current period | Amount of the prior period | ||
| Principal activity income | Principal activity cost | Principal activity income | Principal activity cost | |
| Sales | 211,933.18 | 149,589.02 | 174,412.33 | 128,143.43 |
| Projection services | 36,062.20 | 14,312.88 | 17,173.26 | 10,775.31 |
| Other businesses | 1,827.46 | 1,207.06 | 3,302.83 | 388.76 |
| Subtotal | 249,822.84 | 165,108.96 | 194,888.42 | 139,307.50 |
Categorized by regions:
In RMB 0’000
| Item | Amount of the current period | Amount of the prior period | ||
| Principal activity income | Principal activity cost | Principal activity income | Principal activity cost | |
| Domestic | 231,854.75 | 155,390.51 | 185,561.99 | 135,605.70 |
| Overseas | 17,968.09 | 9,718.45 | 9,326.43 | 3,701.80 |
| Subtotal | 249,822.84 | 165,108.96 | 194,888.42 | 139,307.50 |
(4). Other information
□ Applicable √ N/A
7. Other significant transactions and matters having an impact on the decisions of investors
□ Applicable √ N/A
8. Others
√ Applicable □ N/A
1. The Company as the lessee
(1) Right-of-use assets are described in detail in VII.25 of Section X;
(2) The accounting policies of the Company with respect to short-term leases and low-value assetsleases are described in detail in V.42 of Section X. The table below shows the amounts of expenses relatedto short-term leases and expenses related to low-value assets leases that are recognized in the profit or lossfor the current period:
| Item | Amount of the current period | Amount of the prior period |
| Expenses related to short-term leases | 8,445,152.88 | |
| Expenses related to low-value assets leases (except for short-term leases) | 390,717.29 | |
| Total | 8,835,870.17 |
(3) Profit or loss and cash flow for the current period related to leases
| Item | Amount of the current period | Amount of the prior period |
| Interest expenses of lease liabilities | 1,670,889.26 | |
| Total cash outflow for leases | 32,622,777.04 | 23,680,875.05 |
(4) For the maturity analysis of lease liabilities and corresponding liquidity risk management, referto the description in X.(II) of Section X.
(5) Nature of leasing activities
| Categories of leased assets | Number | Lease Term | With option for renewal of lease or not |
| Property | 35 | Within 5 years | No |
| Computer | 426 | Within one year | No |
2. The Company as the lessor
(1) Operating lease
1) Lease incomes
| Item | Amount of the current period | Amount of the prior period |
| Income from projection services | 360,622,008.82 | 171,732,614.66 |
| Where: Income related to variable lease payments not recognized as lease payments |
2) Assets of operating leases
| Item | Closing balance | Closing of last year |
| Fixed assets | 367,726,844.90 | 364,423,283.10 |
| Subtotal | 367,726,844.90 | 364,423,283.10 |
Fixed assets leased out under operating leases are described in detail in VII.21 of Section X.
3) According to the lease contract with the lessee, undiscounted lease payments that will bereceived in the future for irrevocable leases
| Remaining period | Closing balance |
| Within 1 year | 10,144,456.99 |
| Total | 10,144,456.99 |
(3) Other information
Nature of leasing activities
| Category of assets leased out | Number | Lease Term | With option for renewal of lease or not |
| Light source and device | 20,584 | N/A | No |
XVII. Notes to key items in the parent company’s financial statements
1. Accounts receivable
(1). Disclosure by aging
√ Applicable □ N/A
In RMB
| Aging | Closing balance of carrying amount |
| Within 1 year | |
| Where: Subitems within 1 year | |
| Subtotal of items within 1 year | 604,865,151.23 |
| 1 to 2 years | 12,611,059.16 |
| 2 to 3 years | 2,802,495.00 |
| Over 3 years | 1,420,575.02 |
| 3 to 4 years | |
| 4 to 5 years | |
| Over 5 years | |
| Total | 621,699,280.41 |
(2). Disclosure by categories of provision for bad debts
√ Applicable □ N/A
In RMB
| Category | Closing balance | Opening balance | ||||||||
| Carrying amount | Bad debt provision | Book value | Carrying amount | Bad debt provision | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage of provision (%) | Amount | Percentage (%) | Amount | Percentage of provision (%) | |||
| Provision for bad debts made individually | ||||||||||
| Where: | ||||||||||
| Provision for bad debts made by group | 621,699,280.41 | 100 | 5,483,110.45 | 0.88 | 616,216,169.96 | 569,449,754.94 | 100.00 | 1,910,248.15 | 0.34 | 567,539,506.79 |
| Where: | ||||||||||
| Total | 621,699,280.41 | 100 | 5,483,110.45 | 0.88 | 616,216,169.96 | 569,449,754.94 | 100.00 | 1,910,248.15 | 0.34 | 567,539,506.79 |
Provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
√ Applicable □ N/A
Item by group: Group of aging
In RMB
| Name | Closing balance | ||
| Accounts receivable | Bad debt provision | Proportion of provision (%) | |
| Group of aging | 109,178,209.03 | 5,483,110.45 | 5.02 |
| Group of receivables from related parties in the scope of consolidation | 512,521,071.38 | ||
| Total | 621,699,280.41 | 5,483,110.45 | 0.88 |
Recognition criterion to make the bad debt provision by group and explanation:
□ Applicable √ N/A
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,please disclose relevant information subject to the disclosure of the bad debt provision for otherreceivables:
□ Applicable √ N/A
(3). Provision for bad debts
√ Applicable □ N/A
In RMB
| Category | Opening balance | Changes for the current period | Closing balance | |||
| Provision | Recovery or reversal | Write-off or cancellation | Other changes | |||
| Provision for bad debts made by group | 1,910,248.15 | 3,653,392.48 | 80,530.18 | 5,483,110.45 | ||
| Total | 1,910,248.15 | 3,653,392.48 | 80,530.18 | 5,483,110.45 | ||
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
(4). Accounts receivable actually canceled in the current period
√ Applicable □ N/A
In RMB
| Item | Cancellation amount |
| Accounts receivable actually canceled | 80,530.18 |
In which significant amounts canceled are described as below:
□ Applicable √ N/A
(5). Top five closing balances of accounts receivable categorized by debtors
√ Applicable □ N/A
In RMB
| Entity | Closing balance | Proportion to the total closing balance of accounts receivable (%) | Closing balance of bad debt provision |
| Fengmi (Beijing) Technology Co., Ltd. | 344,220,587.60 | 55.37 | |
| Appotronics Hong Kong Limited | 79,483,856.31 | 12.78 | |
| CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd. | 56,716,137.48 | 9.12 | |
| Guangdong SACA Precision Manufacturing Co., Ltd. and its affiliates | 31,829,748.05 | 5.12 | 1,591,487.40 |
| Appotronics Technology (Changzhou) Co., Ltd. | 24,393,777.25 | 3.92 | |
| Total | 536,644,106.69 | 86.31 | 1,591,487.40 |
Other informationNone
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ N/A
(7). Assets and liabilities arising from transfer of accounts receivable and continued involvement
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
2. Other receivables
Presented by items
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividend receivable | ||
| Other receivables | 6,645,181.15 | 71,654,117.57 |
| Total | 6,645,181.15 | 71,654,117.57 |
Other information:
□ Applicable √ N/A
Interest receivable
(1). Categories of interest receivable
□ Applicable √ N/A
(2). Significant interests overdue
□ Applicable √ N/A
(3). Provision for bad debts
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
(4). Dividend receivable
□ Applicable √ N/A
(5). Dividends receivable with significant amounts aged more than 1 year
□ Applicable √ N/A
(6). Provision for bad debts
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
Other receivables
(1). Disclosure by aging
√ Applicable □ N/A
In RMB
| Aging | Closing balance of carrying amount |
| Within 1 year | |
| Where: Subitems within 1 year | |
| Subtotal of items within 1 year | 856,692.16 |
| 1 to 2 years | 1,338,752.05 |
| 2 to 3 years | 3,625,218.00 |
| Over 3 years | 1,155,006.40 |
| 3 to 4 years | |
| 4 to 5 years | |
| Over 5 years | |
| Total | 6,975,668.61 |
(2). Categories by the nature of other receivables
√ Applicable □ N/A
In RMB
| Nature of other receivables | Closing balance of carrying amount | Opening balance of carrying amount |
| Deposits/margins/petty cash | 5,855,101.09 | 5,911,673.21 |
| Receivables from related parties in the scope of consolidation | 912,569.02 | 62,284,074.96 |
| Temporary receivables | 207,998.50 | 374,249.92 |
| Compensation receivable | 3,577,279.61 | |
| Total | 6,975,668.61 | 72,147,277.70 |
(3). Provision for bad debts
√ Applicable □ N/A
In RMB
| Bad debt provision | Stage I | Stage II | Stage III | Total |
| 12-month ECL in the future | Lifetime ECL (without credit impairment) | Lifetime ECL (with credit impairment) | ||
| Balance as at | 493,160.13 | 493,160.13 |
| January 1, 2021 | ||||
| Balance as at January 1, 2021 in the current period | ||||
| --transferred to Stage II | -6,833.12 | 6,833.12 | ||
| --transferred to Stage III | ||||
| --reversed to Stage II | ||||
| --reversed to Stage I | ||||
| Provision | -190,005.15 | 27,332.48 | -162,672.67 | |
| Reversal | ||||
| Write-off | ||||
| Cancellation | ||||
| Other changes | ||||
| Balance as at December 31, 2021 | 296,321.86 | 34,165.60 | 330,487.46 |
Description of significant changes in the balance of other receivables with changed provisions for lossesin the current period:
□ Applicable √ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of financialinstruments has been increased significantly in the current period:
□ Applicable √ N/A
(4). Provision for bad debts
√ Applicable □ N/A
In RMB
| Category | Opening balance | Changes for the current period | Closing balance | |||
| Provision | Recovery or reversal | Write-off or cancellation | Other changes | |||
| Provision for bad debts made by group | 493,160.13 | -162,672.67 | 330,487.46 | |||
| Total | 493,160.13 | -162,672.67 | 330,487.46 | |||
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
(5). Other receivables actually canceled in the current period
□ Applicable √ N/A
(6). Top five closing balances of other receivables categorized by debtors
√ Applicable □ N/A
In RMB
| Entity | Nature of other receivables | Closing balance | Aging | Proportion to the total closing balance of other receivables (%) | Closing balance of bad debt provision |
| Shenzhen Meisheng Industry Co., Ltd. | Deposits/margins/petty cash | 3,574,618.00 | Over 3 years | 51.24 | 178,730.90 |
| Shenzhen High-tech Industry Promotion Center | Deposits/margins/petty cash | 1,257,075.20 | 1-2 years, 2-3 years, over 3 years | 18.02 | 62,853.76 |
| Fengmi (Beijing) Technology Co., Ltd. | Receivables from related parties in the scope of consolidation | 537,139.29 | Within 1 year | 7.70 | |
| Qingdao Haier Multimedia Co., Ltd. | Deposits/margins/petty cash | 500,000.00 | 1-2 years | 7.17 | 25,000.00 |
| Qingda Appotronics (Xiamen) Technology Co., Ltd. | Receivables from related parties in the scope of consolidation | 375,429.73 | Within 1 year, 1-2 years | 5.38 | |
| Total | 6,244,262.22 | 89.51 | 266,584.66 |
(7). Accounts receivable involving government grants
□ Applicable √ N/A
(8). Other receivables derecognized due to transfer of financial assets
□ Applicable √ N/A
(9). Assets and liabilities arising from transfer of other receivables and continued involvement
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
3. Long-term equity investments
√ Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision for impairment | Book value | Carrying amount | Provision for impairment | Book value | |
| Investments in subsidiaries | 453,386,804.91 | 12,827,792.79 | 440,559,012.12 | 467,533,569.26 | 45,885,284.27 | 421,648,284.99 |
| Investments in associates and joint ventures | ||||||
| Total | 453,386,804.91 | 12,827,792.79 | 440,559,012.12 | 467,533,569.26 | 45,885,284.27 | 421,648,284.99 |
(1). Investments in subsidiaries
√ Applicable □ N/A
In RMB
| Investee | Opening balance | Increase | Decrease | Closing balance | Provision for impairment | Closing balance of provision for impairment |
| Fabulus Display (Beijing) Co., Ltd. | 27,000,000.00 | 27,000,000.00 | ||||
| CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd. | 32,576,902.46 | 7,446,995.43 | 40,023,897.89 | |||
| Shenzhen Appotronics Software Technology Co., Ltd. | 1,647,962.22 | 115,737.79 | 1,763,700.01 | |||
| Beijing Orient Appotronics Technology Co., Ltd. | 5,900,000.00 | 5,900,000.00 | ||||
| Shenzhen Appotronics Xiaoming Technology Co., Ltd. | 12,000,000.00 | 12,000,000.00 | 12,000,000.00 | |||
| Fengmi (Beijing) Technology Co., Ltd. | 30,014,636.09 | 770,901.41 | 27,500,000.00 | 3,285,537.50 | ||
| Qingda Appotronics (Xiamen) Technology Co., Ltd. | 5,100,000.00 | 5,100,000.00 | 827,792.79 | |||
| Shenzhen Appotronics | 18,966,857.26 | 18,966,857.26 |
| Laser Display Technology Co., Ltd. | ||||||
| Appotronics Hong Kong Limited | 301,668,683.52 | 1,376,533.50 | 303,045,217.02 | |||
| JOVE AI Innovation | 619,184.90 | 150,593.50 | 769,778.40 | |||
| Appotronics Technology (Changzhou) Co., Ltd. | 2,000,000.00 | 2,000,000.00 | ||||
| Shenzhen Appotronics Display Device Co., Ltd. | 3,000,000.00 | 3,000,000.00 | ||||
| WEMAX LLC | 24,349.32 | -24,349.32 | ||||
| Appotronics USA, Inc. | 60,873.29 | 338,726.72 | 399,600.01 | |||
| Tianjin Bonian Film Partnership (LP) | 26,954,120.20 | 26,954,120.20 | ||||
| (Chongqing) Innovative Technology Co., Ltd. | 30,178,096.62 | 30,178,096.62 | ||||
| Total | 467,533,569.26 | 40,353,235.65 | 54,500,000.00 | 453,386,804.91 | 12,827,792.79 |
(2). Investments in associates and joint ventures
□ Applicable √ N/A
Other information:
None
4. Operating income and operating costs
(1). Description of operating income and operating costs
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period | ||
| Income | Cost | Income | Cost | |
| Main business | 1,445,208,597.94 | 951,761,428.41 | 1,064,149,969.51 | 720,452,860.84 |
| Other businesses | ||||
| Total | 1,445,208,597.94 | 951,761,428.41 | 1,064,149,969.51 | 720,452,860.84 |
(2). Description of incomes from contracts
□ Applicable √ N/A
(3). Description of performance obligations
□ Applicable √ N/A
(4). Description of allocation to remaining performance obligations
□ Applicable √ N/A
Other information:
None
5. Investment income
√ Applicable □ N/A
In RMB
| Item | Amount for the current period | Amount for the prior period |
| Gains from long-term equity investment accounted for using the cost method | 18,477,491.48 | |
| Investment income from disposal of long-term equity investments | 3.00 | |
| Investment income from disposal of held-for-trading financial assets | 8,780,960.36 | 18,624,853.96 |
| Fees for acquiring held-for-trading financial assets | -8,750.05 | |
| Total | 27,249,704.79 | 18,624,853.96 |
Other information:
None
6. Others
□ Applicable √ N/A
XVIII. Supplementary information
1. Breakdown of non-recurring profit or loss for the current period
√ Applicable □ N/A
In RMB
| Item | Amount | Description |
| Gain or loss on disposal of non-current assets | 1,437,535.03 | |
| Tax refunds or reductions with ultra vires approval or without official approval documents | ||
| Government grants recognized in profit or loss (other than grants which are closely related to the Company’s business and are either in fixed amounts or determined under quantitative methods in accordance with the national standard) | 87,716,471.20 | |
| Income earned from lending funds to non-financial institutions and recognized in profit or loss | ||
| The excess of attributable fair value of identifiable net assets over the consideration paid for the acquisition of subsidiaries, associates and joint ventures |
| Profit or loss on exchange of non-monetary assets | ||
| Profit or loss on entrusted investments or assets management | 9,776,977.44 | |
| Impairment losses on assets due to force majeure events, e.g. natural disasters | ||
| Profit or loss on debt restructuring | ||
| Entity restructuring expenses, e.g., expenditure for layoff of employees, integration expenses, etc. | ||
| Profit or loss attributable to the evidently unfair portion of transaction price, being transacted price in excess of fair transaction price, of a transaction | ||
| Net profit or loss of subsidiaries from the beginning of the period up to the business combination date recognized as a result of business combination involving enterprises under common control | 14,561,407.47 | |
| Profit or loss arising from contingencies other than those related to normal operating business | ||
| Profit or loss on changes in the fair value of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities and derivative financial liabilities and investment income on disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and other debt investments, other than those used in the effective hedging activities relating to normal operating business | 40,127,764.00 | |
| Reversal of impairment loss on accounts receivable and contract assets tested for impairment individually | ||
| Profit or loss on entrusted loans | ||
| Profit or loss on changes in the fair value of investment properties that are subsequently measured using the fair value model | ||
| Effects on profit or loss of one-off adjustment to profit or loss for the period according to the requirements of laws and regulations in respect of tax, accounting, etc. | ||
| Custodian fees earned from entrusted operation | ||
| Other non-operating income and expenses | 865,330.69 | |
| Other gains or losses meeting the definition of non-recurring profit or loss | -9,823,212.01 | |
| Less: Effect of income taxes | 7,304,758.42 | |
| Effect of minority interests | 28,273,002.10 | |
| Total | 109,084,513.30 |
It is required to specify the reason for defining items as non-recurring profit or loss items according toExplanatory Announcement No. 1 on Information Disclosure for Companies Publicly Offering Securities
- Non-recurring Profit or Loss, and reasons for defining non-recurring profit or loss items illustrated inExplanatory Announcement No. 1 on Information Disclosure for Companies Publicly Offering Securities- Non-recurring Profit or Loss as recurring profit or loss items.
□ Applicable √ N/A
2. Return on net assets and earnings per share
√ Applicable □ N/A
| Profit for the reporting period | Weighted average return on net assets (%) | Earnings per share | |
| Basic earnings per share | Diluted earnings per share | ||
| Net profit attributable to ordinary shareholders of the Company | 10.26 | 0.52 | 0.51 |
| Net profit after deduction of non-recurring profits or losses attributable to ordinary shareholders of the Company | 5.46 | 0.27 | 0.27 |
3. Differences in accounting data under Chinese accounting standards and overseas accountingstandards
□ Applicable √ N/A
4. Others
□ Applicable √ N/A
Chairman: LI YiApproval for submission by the Board of Directors: April 25, 2022
Revision information
□ Applicable √ N/A