ANNUAL REPORT 2018
March 2019
BOE Technology Group Co., Ltd. Annual Report 2018
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of BOE Technology Group Co., Ltd. (hereinafter referred
to as the “Company”) hereby guarantee the factuality, accuracy and completeness of the
contents of this Report and its summary, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions therein.
Mr. Wang Dongsheng, the Company’s legal representative, Mr. Chen Yanshun, president of
the Company’s Execution Committee (Chief Executive Officer), Ms. Sun Yun, the Company’s
Chief Financial Officer, and Ms. Yang Xiaoping, head of the Company’s financial department
(equivalent to financial manager) hereby guarantee that the Financial Statements carried in
this Report are factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
Any plans for the future and other forward-looking statements mentioned in this Report shall
NOT be considered as absolute promises of the Company to investors. Investors, among
others, shall be sufficiently aware of the risk and shall differentiate between plans and
forecasts and promises.
The Board has approved a final dividend plan for the Reporting Period. Based on the
Company’s total shares of 34,798,398,763, a cash dividend of RMB0.30 (tax inclusive) per 10
shares is to be distributed to all the shareholders, with no bonus issue from either profit or
capital reserves.
This Report has been prepared as per the Chinese Accounting Standards for Business
Enterprises and other relevant regulations. KPMG Huazhen LLP has issued an independent
auditor’s report with unmodified unqualified opinion for the Company.
This Report and its summary have been prepared in both Chinese and English. Should there
be any discrepancies or misunderstandings between the two versions, the Chinese versions
shall prevail.
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BOE Technology Group Co., Ltd. Annual Report 2018
Table of Contents
Part I Important Notes, Table of Contents and Definitions ........................................................... 2
Part II Corporate Information and Key Financial Information ................................................... 6
Part III Business Summary ............................................................................................................. 12
Part IV Operating Performance Discussion and Analysis ........................................................... 15
Part V Significant Events ................................................................................................................ 33
Part VI Share Changes and Shareholder Information ................................................................. 53
Part VII Preferred Shares ............................................................................................................... 63
Part VIII Directors, Supervisors, Senior Management and Staff ............................................... 64
Part IX Corporate Governance ...................................................................................................... 80
Part X Corporate Bonds .................................................................................................................. 88
Part XI Financial Statements .......................................................................................................... 93
Part XII Documents Available for Reference ................................................................................ 99
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BOE Technology Group Co., Ltd. Annual Report 2018
Definitions
Term Definition
“BOE”, the “Company”, the BOE Technology Group Co., Ltd. and its consolidated subsidiaries, except where the context
“Group” or “we” otherwise requires
The cninfo website http://www.cninfo.com.cn/
CSRC The China Securities Regulatory Commission
The Stock Listing Rules The Stock Listing Rules of the Shenzhen Stock Exchange (Revised in November 2018)
SZSE, the Stock Exchange The Shenzhen Stock Exchange
The Articles of Association The Articles of Association of BOE Technology Group Co., Ltd.
The Company Law The Company Law of the People’s Republic of China
The Securities Law The Securities Law of the People’s Republic of China
OASIS Hospital OASIS International Hospital
KPMG KPMG Huazhen LLP
IHS Markit Information Handling Services, Inc. & Markit Ltd.
AMOLED Active-matrix Organic Light Emitting Diode
AMQLED Active Matrix Quantum-dot Light Emitting Diode
OLED Organic Light Emitting Diode
VR/AR Virtual Reality /Augmented Reality
IoT Internet of Things
AI Artificial Intelligence
IFI IFI CLAIMS Patent Services
IEC International Electrotechnical Commission
LCD Liquid Crystal Display
LTPS Low Temperature Poly-silicon
FPXD Flat Panel X-ray Detector
TDDI Touch and Display Driver Integration
WQHD Wide Quad High Definition, i.e. 2560×1440 definition
COF+COB Chip On Film + Chip On Board
WXGA Wide Extended Graphics Array, i.e. 1280×800 definition
WUXGA Widescreen Ultra eXtended Graphics Array, i.e. 1920×1200 definition
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BOE Technology Group Co., Ltd. Annual Report 2018
OGM Tilt Active Pen One Glass of Metal-mesh Tilt Active Pen
MSMX-ray Metal-Silicon-Metal X-ray
d-PCR Digital Polymerase Chain Reaction
ITU International Telecommunication Union
ICT Information and Communication Technology
The “Reporting Period” or “Current
The period from 1 January 2018 to 31 December 2018
Period”
RMB, RMB’0,000 Expressed in the Chinese currency of Renminbi, expressed in tens of thousands of Renminbi
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BOE Technology Group Co., Ltd. Annual Report 2018
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name BOE-A, BOE-B Stock code 000725, 200725
Changed stock name (if any) N/A
Stock exchange for stock listing Shenzhen Stock Exchange
Company name in Chinese 京东方科技集团股份有限公司
Abbr. 京东方
Company name in English (if any) BOE TECHNOLOGY GROUP CO., LTD.
Abbr. (if any) BOE
Legal representative Wang Dongsheng
Registered address 10 Jiuxianqiao Road, Chaoyang District, Beijing, P.R.China
Zip code 100015
Office address 12 Xihuan Middle Road, Beijing Economic-Technological Development Area, P.R.China
Zip code 100176
Company website www.boe.com
Email address web.master@boe.com.cn
II Contact Information
Item Board Secretary Securities Representative
Name Liu Hongfeng --
12 Xihuan Middle Road, Beijing Economic-Technological
Office Address --
Development Area, P.R.China
Tel. 010－64318888 ext. --
Fax 010－64366264 --
E-mail address liuhongfeng@boe.com.cn --
III Media for Information Disclosure and Place where this Report Is Lodged
China Securities Journal, Shanghai Securities News,
Newspapers designated by the Company for information disclosure
Securities Times, Ta Kung Pao (HK)
Website designated by CSRC for publication of this Report http://www.cninfo.com.cn/
Place where this Report is lodged Board Secretary’s Office
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BOE Technology Group Co., Ltd. Annual Report 2018
IV Changes to Company Registered Information
Unified social credit code No change
Change to principal activity of the Company
No change
since going public (if any)
Every change of controlling shareholder since
No change
incorporation (if any)
V Other Information
The independent audit firm hired by the Company:
Name KPMG Huazhen LLP
Office address 8/F, KPMG Tower, Oriental Plaza, 1 East Chang An Avenue, Beijing, P.R.China
Accountants writing signatures Zhang Huan and Liu Jingyuan
The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable √ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable √ Not applicable
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
√ Yes □ No
Reason for retrospective restatement: accounting policy changes
2018-over-20
2017 17 change 2016
Item 2018
(%)
Before After After Before After
Operating revenue
97,108,864,935.00 93,800,479,215.00 93,800,479,215.00 3.53% 68,895,658,963.00 68,895,658,963.00
(RMB)
Net profit
attributable to the
3,435,127,975.00 7,567,682,493.00 7,567,682,493.00 -54.61% 1,882,571,674.00 1,882,571,674.00
listed company’s
shareholders (RMB)
Net profit
attributable to the
listed company’s 1,517,702,353.00 6,679,211,138.00 6,679,211,138.00 -77.28% 12,534,878.00 12,534,878.00
shareholders before
exceptional items
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BOE Technology Group Co., Ltd. Annual Report 2018
(RMB)
Net cash generated
from/used in
25,684,047,196.00 26,266,986,015.00 26,726,929,655.00 -3.90% 10,073,287,120.00 10,813,865,197.00
operating activities
(RMB)
Basic earnings per
0.10 0.22 0.22 -54.55% 0.05 0.05
share (RMB/share)
Diluted earnings per
0.10 0.22 0.22 -54.55% 0.05 0.05
share (RMB/share)
Weighted average
4.00% 9.25% 9.25% -5.25% 2.40% 2.40%
return on equity (%)
Change of 31
December
31 December 2017 2018 over 31 31 December 2016
Item 31 December 2018
December
2017 (%)
Before After After Before After
Total assets (RMB) 304,028,491,385.00 256,108,741,849.00 256,108,741,849.00 18.71% 205,135,011,042.00 205,135,011,042.00
Equity attributable
to the listed
85,856,748,703.00 84,809,816,377.00 84,809,816,377.00 1.23% 78,699,988,493.00 78,699,988,493.00
company’s
shareholders (RMB)
Reason for accounting policy changes and situation for accounting error corrects:
According to relevant interpretations of stipulated in CK [2018] No.15, the Group will adjust the government subsidies received
related to assets from “cash inflows from investing activities” to “cash inflows from operating activities” and present.
VII Accounting Data Differences under China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
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BOE Technology Group Co., Ltd. Annual Report 2018
VIII Key Financial Information by Quarter
Unit: RMB
Item Q1 Q2 Q3 Q4
Operating revenue 21,566,813,037.00 21,907,091,929.00 25,990,508,323.00 27,644,451,646.00
Net profit attributable to the listed
2,018,692,554.00 956,513,946.00 403,860,235.00 56,061,240.00
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 1,238,599,228.00 264,421,249.00 362,034,925.00 -347,353,049.00
exceptional items
Net cash generated from/used in
7,198,088,816.00 4,241,517,030.00 6,857,996,566.00 7,386,444,784.00
operating activities
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from what
have been disclosed in the Company’s quarterly or interim reports.
√ Yes □ No
Reclassification of the net profit attributable to the listed company’s shareholders before exceptional items according to the audited
data
IX Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2018 2017 2016 Note
Gain or loss on disposal of non-current assets (inclusive
-21,684,121.00 -87,930,698.00 -46,754,352.00 N/A
of impairment allowance write-offs)
Tax rebates, reductions and exemptions given with ultra
0.00 0.00 0.00 N/A
vires approval or in lack of official approval documents
Government subsidies charged to current profit or loss
(exclusive of government subsidies given in the
2,073,709,661.00 962,283,001.00 1,914,531,603.00 N/A
Company’s ordinary course of business at fixed quotas
or amounts as per the government’s uniform standards)
Capital occupation charges on non-financial enterprises
0.00 0.00 0.00 N/A
that are charged to current profit or loss
Gain equal to the amount by which investment costs for
the Company to obtain subsidiaries, associates and joint
ventures are lower than the Company’s enjoyable fair 0.00 0.00 105,228,293.00 N/A
value of identifiable net assets of investees when
making investments
Gain or loss on non-monetary asset swaps 0.00 0.00 0.00 N/A
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BOE Technology Group Co., Ltd. Annual Report 2018
Gain or loss on investments or assets entrusted to other
0.00 0.00 0.00 N/A
entities for management
Allowance for asset impairments due to acts of God
0.00 0.00 0.00 N/A
such as natural disasters
Gain or loss on debt restructuring 0.00 0.00 0.00 N/A
Restructuring costs in staff arrangement, integration,
0.00 0.00 0.00 N/A
etc.
Gain or loss on the over-fair value amount as a result of
0.00 0.00 0.00 N/A
transactions with distinctly unfair prices
Current profit or loss on subsidiaries obtained in
business combinations involving enterprises under
0.00 0.00 0.00 N/A
common control from the period-beginning to
combination dates, net
Gain or loss on contingencies that do not arise in the
0.00 0.00 0.00 N/A
Company’s ordinary course of business
Gain or loss on fair-value changes in trading financial
assets and liabilities & investment income from
disposal of trading financial assets and liabilities and
315,279,377.00 134,810,181.00 149,197,609.00 N/A
available-for-sale financial assets (exclusive of effective
portion of hedges that arise in the Company’s ordinary
course of business)
Reversed portion of impairment allowance for accounts
1,779,710.00 2,616,024.00 24,547,083.00 N/A
receivable which are tested individually for impairment
Gain or loss on loan entrustments 0.00 0.00 0.00 N/A
Gain or loss on fair-value changes in investment
property of which subsequent measurement is carried 0.00 0.00 0.00 N/A
out using the fair value method
Effects of all adjustments required by taxation,
accounting and other applicable laws and regulations on 0.00 0.00 0.00 N/A
current profit or loss
Income from charges on entrusted management 0.00 0.00 0.00 N/A
Non-operating income and expense other than the
63,734,628.00 46,503,917.00 40,206,943.00 N/A
above
Other gains and losses that meet the definition of
0.00 0.00 0.00 N/A
exceptional gain/loss
Less: Income tax effects 328,634,385.00 126,533,931.00 305,399,453.00 N/A
Non-controlling interests effects (net of tax) 182,810,608.00 43,277,139.00 11,520,930.00 N/A
Total 1,917,425,622.00 888,471,355.00 1,870,036,796.00 --
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory
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BOE Technology Group Co., Ltd. Annual Report 2018
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss
Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
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BOE Technology Group Co., Ltd. Annual Report 2018
Part III Business Summary
I Principal Activity of the Company in the Reporting Period
Is the Company subject to any disclosure requirements for special industries?
No.
Founded in April 1993, BOE Technology Group Co., Ltd. (“BOE”) is an IoT company providing intelligent interface products and
services for information interaction and human health. In order to further promote the IoT transformation, satisfy different IoT
application needs, and sharpen its competitive edges in market segments, BOE has restructured itself in 2018 into three major
business divisions with seven business groups. Meanwhile, to further strengthen core marketing and technology abilities, as well as
stimulate faster growth in the three business divisions of interface devices (D), smart IoT (S) and Smart Medicine and Engineering
(H), specialized organizations have been set up, including the B2B Chief Sales Platform Officer, the OMO Chief Sales Platform
Officer, the Branding and Global Market Center, the Information Technology Development Center, and the IoT AI&Big Data
Center.
1. Interface Devices (D)
Division D consists of the Display and Sensor BG, and the Sensor and Application Solution BG. The Display and Sensor BG designs
and manufactures related devices with a B2B model. The display device business offers TFT-LCD, AMOLED, Microdisplay and
other intelligent interface devices for smartphones, tablet PCs, laptops, monitors, TVs, vehicles, electronic signs, tiled display screens,
industrial control, wearable devices, VR/AR devices, electronic tags, white goods, healthcare, mobile payment, etc. And the sensor
device business provides integrated design and manufacturing services of sensor devices for use in medical detection, household
detection, communication and transportation, smart homes, etc. The Sensor and Application Solution BG provides sensor system
solutions for B2B customers of medical imaging, microfluidics, smart screens, new antennas, home security, Mini LED and the like,
with products including flat panel X-ray detectors (FPXD), digital microfluidic chips, PDLC glass, identification systems, etc.
2. Smart IoT (S)
Division S is divided into the Intelligent Manufacturing Service BG, the IoT Solution BG and the Digital Art IoT Platform BG. The
Intelligent Manufacturing Service BG designs and manufactures, for its global B2B partners, the most competitive whole-widget
smart manufacturing solutions of TVs, monitors, whiteboards, electronic signs, commercial display products, electronic tags, mobile
terminals, among others. The IoT Solution BG offers software-and-hardware integrated solutions like supermarket retail solutions,
marketing solutions, imaging solutions, smart conference solutions, context interaction solutions, handler advertisement solutions,
education signal transmission solutions and smart microgrid solutions for B2B customers in IoT market segments such as smart retail,
smart finance, digital hospitals, smart business offices, smart homes, smart transportation, smart education and smart energy. The
Digital Art IoT Platform BG with a B2C IoT platform model is committed to brightening everyday life with the beauty of art and
offering the best user experience. The featured product, BOE iGallery, integrates terminal products with an App, as well as voice
interaction and other information technologies with digital art, providing users with various services including artistic appreciation,
art knowledge, art mall and visual aesthetics. It helps introduce art to everyone and unveils more beauty of art.
3. Smart Medicine and Engineering (H)
Division H includes the Mobile Healthcare IoT Platform BG and the Smart Healthcare Service BG. The Mobile Healthcare IoT
Platform BG with a B2C IoT platform model, integrating smart terminals and apps, as well as based on AI and big data algorithms,
enables users to enjoy personalized healthcare services without leaving home, including vital signs monitoring and analysis, AI-based
disease risk prediction, health courses from experts, online diagnosis and registration for medical examination. The Smart Healthcare
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BOE Technology Group Co., Ltd. Annual Report 2018
Service BG covers digital hospitals, digital human body, regenerative medicine, healthcare parks, etc. It offers B2C customers
online-and-offline integrated professional healthcare services focused on digital medical care and supplemented by smart nursing
home and healthcare park integrated solutions, as well as by industrial park operations and the like.
II Significant Changes in Major Assets
1. Significant Changes in Major Assets
Major assets Main reason for significant changes
Equity assets Consolidation of associate/joint venture
Fixed assets Transfer of new project into fixed assets in the Reporting Period
Intangible assets Increase in business combinations in the Reporting Period
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness Analysis
Is the Company subject to any disclosure requirements for special industries?
No.
1. The Company firmly promoted and implemented innovation and transformation and further improved global competitiveness
In 2018, BOE firmly promoted and implemented the development strategy of IoT transformation. Three major business divisions,
namely interface devices, smart IoT and smart healthcare engineering, realized fast development, which further improved its global
market competitiveness.
Interface devices: Construction of the new line of both Display and Sensor BG proceeded in order, and the first TFT-LCD Production
Line of the highest generation in the world-- the 10.5th Generation BOE Hefei TFT-LCD Production Line realized mass production,
and the product yield was improved steadily; The main structure of the 6th Generation Mianyang Flexible AMOLED Production Line
Project was capped three months in advance, and it is predicted that products can be shipped as scheduled in 2019; The main
structure of Wuhan 10.5 Generation TFT-LCD Production Line was capped in November; The main structure of Kunming
Micro-OLED Production Line was capped in September. As for the Sensor and Application Solution BG, the first type of Flow Cell
sequencing chip of micro-fluidic chip business start being shipped; Samples of the smart window products have been delivered to the
client.
Smart IoT: As for the smart manufacturing business group, the structure of Suzhou Smart Factory update project was capped in
December; Construction of Chongqing Smart Factory has been realized as well as mass production of electronic tags; IoT Solution
BG has expanded smart retail of electronic tags in Chinese market and explored over 60 famous retail brand clients. The Digital Art
IoT Platform BG launched successfully the new generation of Painted Screen S2 and M2 integrated with the smart voice technology
and launched the APP 3.0 with annual new registered users of about 123,000.
Smart Medicine and Engineering: The first type of BOE brand product - Smart Sleep Instrument was launched successfully by the
Mobile Healthcare IoT Platform BG; Products such as the dynamic ECG recorder, body fat scale, sphygmomanometer and smart
watch realized sales on the market; BOE mobile healthcare APP 3.0 was launched. Smart Healthcare Service BG officially opened
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BOE Technology Group Co., Ltd. Annual Report 2018
Hefei Digital Hospital, the first digital hospital independently planned and constructed by BOE, in December; Construction of
Chengdu BOE Hospital was officially commenced in December, and construction is proceeded in order; Layout of the Life Science
and Technology Industry Base was made quickly, and the cooperative agreement was signed in November.
2. The Company stuck to client orientation and further increased its market shares.
Under the guide of IoT ecological chain construction strategy of "Ecoresystem: Open and Connected", BOE stuck to taking clients'
application scene as the starting point and design and create the best user experience to provide clients with exciting products and
services. Thus, BOE has become the first supplier of domestic and overseas famous brands. It realized a further increase in market
share in subdivided markets in 2018. According to IHS Markit data, the shipment of BOE display screens in 2018 wasranking the 1st
in the world; Five major display screens ranked the 1st respectively in terms of their market share. The shipment of complete
displayers enjoyed a year-on-year growth of 30%, ranking the 2nd in the word from the 4th last year; The shipment of innovative
applications enjoyed a year-on-year growth of nearly 110%, including five subdivided markets (i.e. electronic label, connection,
electronic tag, wearing and VR/AR) whose market share became more than 20%; Shipment of flexible OLED provided for first-tier
brand clients realized great breakthrough (2.7 million pieces). Shipment quantity of smart service products was improved steadily.
Shipment of complete machine of TV / displayers realized 18 million sets, ranking the 3rd and 4th place in the world respectively.
3. The Company reinforced independent innovation and further promoted innovation ability.
"Respecting technology and insisting on innovation" is one of the key cultural factors of BOE. In 2018, BOE continuously stuck to
enhance technology R & D and kept enhancing independent innovation ability to keep foresight and primacy of technologies and
products. In terms of the technology and product, flexible OLED technology continued to make new breakthrough, put forward
various types of products with free form and bezel-less display were launched. 6.18-inch WQHD flexible products realized 1mm
dynamic warping; TFT-LCD technology strength was improved. The first type of non-notch bezel-less product in the world made
with LTPS COF+COB technology, 8-inch WXGA TDDI, 10.1-inch WUXGA TDDI, active-pen-based 13.3-inch OGM Tilt
succeeded in mass production and shipment, and the thinnest 3.9mm 23.8-inch Ultra Slim MNT products succeeded in mass
production; Sensor technology realized new breakthrough, MSMX-ray mass production assessment sample was released initially in
the world, and the liquid crystal molecule antenna project succeeded in the commissioning test of connecting the satellite initially. As
for the glass-based d-PCR chip used for inspection of genetic mutation positions, development of the first sample machine featuring
integration, full automation and portability in the world was finished; Application of IoT AI products realized the breakthrough.
Independently developed natural language processing algorithm in the art filed was successfully applied to BOE painted screen S2
product. AI technologies such as face recognition and OCR have been applied to BOE products such as AI digital signboard and
smart high-speed photographic instrument; Healthcare engineering integration has realized the technology breakthrough. Clinic-level
serum-free heat diaphragm cultivation system was established, and the first multi-functional orthopaedic robot in the world and the
AI general practitioner were developed successfully. In terms of patents, 9,585 patents were applied in the whole year, and 4,800
patents were recognized in the whole year, including 1,600 patents recognized by America. More than 20 external technical standards
were prepared and revised in the whole year.
4. The Company further improved operational efficiency via strengthening lean management.
BOE continuously optimized the procedure of production bottleneck. The completion rate of the displayer production plan was up to
99%, and the mass production capacity in the whole year increased by 5%. In terms of yield, the comprehensive yield of Fuzhou 8.5th
generation TFT-LCD production made the best record of BOE 8.5th generation TFT-LCD production line. Among those products,
yield of 43-inch FHD kept exceeding 98% for successive 7 months, creating the highest level in the industry. In terms of quality
control, the rank of client-end quality of displayer business was improved continuously. Product quality of major clients ranked the
first, and there were 15 major clients.
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BOE Technology Group Co., Ltd. Annual Report 2018
Part IV Operating Performance Discussion and Analysis
I Overview
In 2018, the global economic environment was complicated. China's economic development entered into a new normal featuring a
slower growth speed, structure optimization and driving force shift, transforming from an economy that is based on high-speed
growth to one that relies on high-quality development; the fourth industrial revolution represented by IoT, AI, big data and life
science and technology has come. Cross-field integration trend was obvious, and software-hardware integration and application
integration and other innovative driving forces promoted the industry upgrading. The semi-conductor display industry entered into
the adjustment phase in the second half of last year. Demands were weak in five major markets of the smart phone display screen,
table PCs display screen, laptop display screen, monitors’ display screen and TV display screen. As a result, prices of products of all
sizes, especially TV display screen, were adjusted greatly. The expansion of flexible AMOLED markets was not realized as expected,
and the fast release of production capacity made market competition fiercer.
2018 was a key year of BOE’s innovative transformation towards an IoT company. The Company innovatively put forward the
strategic thought of "Three Aspects of Rebalance" (i.e. realizing rebalance of heavy assets and light assets under the new normal of
economy of China; realizing rebalance of market opportunity and capacity rebuilding under the fourth industrial revolution; realizing
rebalance of trade under the global political and economic new pattern) for deep thinking, divided the three major business divisions
of Interface devices, smart IoT and Smart Medicine and Engineering into seven business groups (i.e. Display and Sensor BG, Sensor
and Application Solution BG, Intelligent Manufacturing Service BG, IoT Solution BG, digital artbusiness group, Mobile Healthcare
IoT Platform BG, Smart Healthcare Service BG) to meet demands of subdivided application supermarkets under the IoT context.
Besides, BOE established B2B Chief Sales Platform Officer and OMO Chief Sales Platform Officer, enhanced client exploration and
maintenance, established brand and global market promotion center, strengthened brand and market promotion, subdivided IT
organization into CIO organization and information technology research development center to further improve information
technology capacity. While perfecting the new system, BOE seized market opportunities, deeply explored subdivided markets,
strengthened technical development, adjusted product structure, and enhanced lean management. As a result, for the year under
review, BOE recorded operating revenue of about RMB97.1 billion and a net profit attributable to the listed company’s shareholders
of about RMB3.44 billion. Its operating performance still ranked among the top in the industry.
(I) The three major business divisions of D, S and H maintained fast development.
The shipment of complete display panels was ranking the first place in the world; Five major products of smart phone LCD, table
PCs display screen, laptop display screen, displayer display screen and TV display screen realized the continuous improvement in
market share, ranking the first place in the world. The first TFT-LCD Production Line of the highest generation in the world-- the
10.5th Generation BOE Hefei TFT-LCD Production Line realized fast improvement of the capacity and yield; The first AMOLED
(flexible) production in the Mainland of China - Chengdu 6th generation of AMOLED (flexible) production line realized steady
improvement of yield and supply for first-tire brand manufacturers; Planning and construction of Chongqing 6th generation of
AMOLED (flexible) production, Mianyang 6th AMOLED (flexible) production line proceeded as scheduled; BOE announced to
invest in the 4th AMOLED (flexible) production line - Fuzhou 6th generation of AMOLED (flexible) production line, further
improving the capacity of BOE in supplying interface devices. Shipment quantity of smart service products was improved steadily.
Shipment of complete machine of TV / displayers realized 18 million sets, ranking the 3rd and 4th place in the world respectively.
Layout of the Life Science and Technology Industry Base was made quickly.
(II) Progress was made in innovation subdivision and application market exploration.
A significant growth was made in shipment and revenue of innovative products of Display and Sensor BG; Sensor and Application
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BOE Technology Group Co., Ltd. Annual Report 2018
Solution BG realized a year-on-year growth of 200% of revenue and annual shipment growth of about 350% of the X-ray flat panel
detector; Digital Art IoT Platform BG realized new users of about 123,000, enjoying a year-on-year growth of 6 times. Its platform
works realized one million pieces, realizing work promotion quantity of more than five million times. What's more, it also
established ITU international standards for digital artwork image display system, promoted AI voice painted screen, enhancing
market influences and establishing its ecology in the industry preliminarily; In terms of commercial display products, many
benchmark projects have been finished and realized year-on-year growth of one time of revenue; Its smart retail electronic tag
business occupied 50% of the market share, serving about 17,000 stores in 61 countries and regions. Quantity of stores newly
developed in China increased quickly; Smart sleep instrument, portable ECG monitor and body fat scale and other products have
been launched on the market successively; Mobile healthcare APP 3.0 was launched successfully; The independently planned and
constructed Hefei BOE Hospital was put into use.
(III) Technical innovation ability kept improving.
The number of patent applications kept growing rapidly, and 9,585 new patents were applied for in the whole year, including 38% of
overseas patents applied for. More than 4,000 patents in key fields such as OLED, sensing, AI, big data, etc. were applied for. More
than 4,800 patents were recognized, including over 1,600 patents recognized by America; IFI Claims showed that the quantity of
patents of BOE recognized by America ranked the 17th place in 2018 from the 21st place in 2017.
II Core Business Analysis
1. Overview
See “I Overview” above.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
2018 2017
As % of total As % of total
Item Change (%)
Operating revenue operating revenue Operating revenue operating revenue
(%) (%)
Total 97,108,864,935.00 100% 93,800,479,215.00 100% 3.53%
By operating division
Interface devices 86,688,426,362.00 89.27% 85,149,888,634.00 90.78% 1.81%
Smart IoT 17,499,500,352.00 18.02% 15,620,915,713.00 16.65% 12.03%
Smart Medicine and
1,151,844,468.00 1.19% 1,023,905,566.00 1.09% 12.50%
Engineering
Others 3,569,024,583.00 3.68% 2,225,609,340.00 2.37% 60.36%
Offset -11,799,930,830.00 -12.15% -10,219,840,038.00 -10.90% 15.46%
By product category
Interface devices 86,688,426,362.00 89.27% 85,149,888,634.00 90.78% 1.81%
16
BOE Technology Group Co., Ltd. Annual Report 2018
Smart IoT 17,499,500,352.00 18.02% 15,620,915,713.00 16.65% 12.03%
Smart Medicine and
1,151,844,468.00 1.19% 1,023,905,566.00 1.09% 12.50%
Engineering
Others 3,569,024,583.00 3.68% 2,225,609,340.00 2.37% 60.36%
Offset -11,799,930,830.00 -12.15% -10,219,840,038.00 -10.90% 15.46%
By operating segment
Mainland China 42,942,349,994.00 44.22% 44,077,183,105.00 46.99% -2.57%
Other regions in Asia 44,256,356,951.00 45.57% 44,260,377,203.00 47.19% -0.01%
Europe 3,488,264,284.00 3.59% 2,185,981,332.00 2.33% 59.57%
America 6,354,884,816.00 6.54% 3,198,611,737.00 3.41% 98.68%
Other regions 67,008,890.00 0.07% 78,325,838.00 0.08% -14.45%
(2) Operating Division, Product Category or Operating Segment Contributing over 10% of Operating
Revenue or Operating Profit
√ Applicable □ Not applicable
Is the Company subject to any disclosure requirements for special industries?
No.
Unit: RMB
YoY change in YoY change in
Gross profit YoY change in
Item Operating revenue Cost of sales operating revenue gross profit
margin cost of sales (%)
(%) margin (%)
By operating division
Interface devices 86,688,426,362.00 70,337,005,047.00 18.86% 1.81% 9.71% -5.85%
Smart IoT 17,499,500,352.00 15,568,843,342.00 11.03% 12.03% 7.65% 3.62%
By product category
Interface devices 86,688,426,362.00 70,337,005,047.00 18.86% 1.81% 9.71% -5.85%
Smart IoT 17,499,500,352.00 15,568,843,342.00 11.03% 12.03% 7.65% 3.62%
By operating segment
Mainland China 42,942,349,994.00 34,091,195,752.00 20.61% -2.57% -2.42% -0.12%
Other regions in
44,256,356,951.00 35,351,920,958.00 20.12% -0.01% 16.75% -11.47%
Asia
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable√ Not applicable
17
BOE Technology Group Co., Ltd. Annual Report 2018
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
√ Yes □ No
Operating division Item Unit 2018 2017 Change (%)
Unit sales K m2 42,232 31,840 32.64%
TFT-LCD Output K m2 42,548 31,921 33.29%
Inventory K m2 2,229 1,576 41.44%
Reason for any over 30% YoY movements in the data above
√ Applicable □ Not applicable
There was newly invested operating production line in 2018, so the scale of unit sales, output, and inventory increased.
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
By operating division
Unit: RMB
2018 2017
By operating Change
Item As % of total cost As % of total cost
division Cost of sales Cost of sales (%)
of sales (%) of sales (%)
Interface Materials, labor costs,
70,337,005,047.00 90.98% 64,109,601,840.00 91.22% 9.71%
devices depreciation, etc.
Materials, labor costs,
Smart IoT 15,568,843,342.00 20.14% 14,462,597,072.00 20.58% 7.65%
depreciation, etc.
Smart
Materials, labor costs,
Medicine and 470,618,522.00 0.61% 416,009,475.00 0.59% 13.13%
depreciation, etc.
Engineering
Materials, labor costs,
Others 31,925,209.00 0.04% 33,582,463.00 0.05% -4.93%
depreciation, etc.
Materials, labor costs,
Offset -9,102,167,832.00 -11.77% -8,739,313,265.00 -12.43% 4.15%
depreciation, etc.
Notes:
Naught
18
BOE Technology Group Co., Ltd. Annual Report 2018
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√ Yes □ No
The scope of the consolidated financial statements for this Reporting Period has changed. And the relevant data exclusive of the five
new subsidiaries are as follows:
YoY change
Gross YoY change YoY change in
in gross
Item Operating revenue Cost of sales profit in operating cost of sales
profit margin
margin revenue (%) (%)
(%)
By operating division
Interface
86,664,251,766.00 70,336,983,512.00 18.84% 1.78% 9.71% -5.87%
devices
Smart IoT 16,011,738,858.00 14,397,600,486.00 10.08% 2.50% -0.45% 2.67%
Smart Medicine
and 1,151,844,468.00 470,618,522.00 59.14% 12.50% 13.13% -0.23%
Engineering
Others 3,569,024,583.00 31,925,209.00 99.11% 60.36% -4.93% 0.61%
Offset -11,808,786,670.00 -9,089,456,972.00 23.03% 15.55% 4.01% 8.54%
By product category
Interface
86,664,251,766.00 70,336,983,512.00 18.84% 1.78% 9.71% -5.87%
devices
Smart IoT 16,011,738,858.00 14,397,600,486.00 10.08% 2.50% -0.45% 2.67%
Smart Medicine
and 1,151,844,468.00 470,618,522.00 59.14% 12.50% 13.13% -0.23%
Engineering
Others 3,569,024,583.00 31,925,209.00 99.11% 60.36% -4.93% 0.61%
Offset -11,808,786,670.00 -9,089,456,972.00 23.03% 15.55% 4.01% 8.54%
By operating segment
China 42,842,333,600.00 34,083,202,913.00 20.45% -2.80% -2.44% -0.29%
Other regions in
44,256,356,951.00 35,351,920,958.00 20.12% -0.01% 16.75% -11.47%
Asia
Europe 2,067,488,748.00 1,483,689,598.00 28.24% -5.42% -22.54% 15.85%
America 6,354,884,816.00 5,184,770,075.00 18.41% 98.68% 68.77% 14.46%
Other regions 67,008,890.00 44,087,213.00 34.21% -14.45% -44.08% 34.86%
19
BOE Technology Group Co., Ltd. Annual Report 2018
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
Major customers:
Total sales to top five customers (RMB) 40,553,307,887.00
Total sales to top five customers as % of total sales of the Reporting Period (%) 41.76%
Total sales to related parties among top five customers as % of total sales of the
0.00%
Reporting Period (%)
Information about top five customers:
Sales revenue contributed for
No. Customer As % of total sales revenue (%)
the Reporting Period (RMB)
1 Customer A 16,287,833,781.00 16.77%
2 Customer B 6,769,290,102.00 6.97%
3 Customer C 6,269,586,375.00 6.46%
4 Customer D 5,970,890,673.00 6.15%
5 Customer E 5,255,706,956.00 5.41%
Total -- 40,553,307,887.00 41.76%
Other information about major customers:
□ Applicable √ Not applicable
Major suppliers:
Total purchases from top five suppliers (RMB) 12,012,203,637.00
Total purchases from top five suppliers as % of total purchases of the Reporting Period (%) 15.54%
Total purchases from related parties among top five suppliers as % of total purchases of the
0.00%
Reporting Period (%)
Information about top five suppliers:
Purchase in the Reporting
No. Supplier As % of total purchases (%)
Period (RMB)
1 Supplier A 5,242,835,526.00 6.78%
2 Supplier B 2,462,004,223.00 3.19%
3 Supplier C 1,491,595,035.00 1.93%
4 Supplier D 1,478,433,702.00 1.91%
5 Supplier E 1,337,335,151.00 1.73%
Total -- 12,012,203,637.00 15.54%
20
BOE Technology Group Co., Ltd. Annual Report 2018
Other information about major suppliers:
□ Applicable √ Not applicable
3. Expense
Unit: RMB
Item 2018 2017 Change (%) Reason for any significant change
Selling expense 2,891,056,969.00 2,591,925,798.00 11.54% No
Administrative expense 4,959,184,197.00 4,068,775,945.00 21.88% No
The increase of interest expense due to
the new project being converted to
Finance costs 3,196,695,890.00 1,948,024,860.00 64.10%
operation and the increase of the net
exchange losses.
The strengthening of R&D of the
R&D expense 5,039,927,435.00 3,177,767,395.00 58.60%
Company
4. R&D Expense
√ Applicable □ Not applicable
Details about R&D input:
Item 2018 2017 Change (%)
Number of R&D personnel 19,627 17,141 14.50%
R&D personnel as % of total employees 28.73% 27.42% 1.31%
R&D expense (RMB) 7,238,202,290.00 6,972,095,396.00 3.82%
R&D expense as % of operating revenue 7.45% 7.43% 0.02%
Capitalized R&D expense (RMB) 2,198,274,855.00 1,893,143,576.00 16.12%
Capitalized R&D expense as % of total R&D
30.37% 27.15% 3.22%
expense
Reasons for any significant YoY change in the percentage of R&D expense in operating revenue:
□ Applicable √ Not applicable
Reason for any sharp variation in the percentage of capitalized R&D expense and rationale:
□ Applicable √ Not applicable
5. Cash Flows
21
BOE Technology Group Co., Ltd. Annual Report 2018
Unit: RMB
Item 2018 2017 Change (%)
Subtotal of cash generated from operating activities 115,069,347,790.00 112,394,636,782.00 2.38%
Subtotal of cash used in operating activities 89,385,300,594.00 85,667,707,127.00 4.34%
Net cash generated from/used in operating activities 25,684,047,196.00 26,726,929,655.00 -3.90%
Subtotal of cash generated from investing activities 68,276,730,240.00 32,887,925,278.00 107.60%
Subtotal of cash used in investing activities 115,340,265,598.00 92,409,894,695.00 24.81%
Net cash generated from/used in investing activities -47,063,535,358.00 -59,521,969,417.00 ——
Subtotal of cash generated from financing activities 42,994,273,471.00 66,143,493,674.00 -35.00%
Subtotal of cash used in financing activities 27,427,703,081.00 33,218,121,485.00 -17.43%
Net cash generated from/used in financing activities 15,566,570,390.00 32,925,372,189.00 -52.72%
Net increase in cash and cash equivalents -4,562,591,063.00 -1,441,522,805.00 ——
Explanation of why any of the data above varies significantly:
√ Applicable □ Not applicable
Cash generated from investing activities increases 107.60% compared with that of last year, which is mainly caused by disinvestment
due to maturity of financial products.
Net cash generated from financing activities decreases 52.72%compared with that of last year, which is mainly due to the decrease in
special borrowings for new projects.
Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period
√ Applicable □Not applicable
Mainly because the depreciation amount of equipment in the display industry is high, causing a gap between net cash generated from
operating activities and net profit.
III Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
Item Amount As % of total profit Source/Reason Exceptional or recurrent
Investment income 306,887,579.00 7.44% Gains on financial products No
Gain/loss on changes in
2,061,153.00 0.05% N/A No
fair value
Amount provided for inventory
Asset impairments 1,239,588,763.00 30.07% falling price impairment No
according to market conditions
Governmental subsidies received
Non-operating income 169,429,515.00 4.11% No
in the Reporting Period
Non-operating expense 55,310,251.00 1.34% Loss on retirement of fixed assets No
22
BOE Technology Group Co., Ltd. Annual Report 2018
IV Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
31 December 2018 31 December 2017
Change in
Item As % of total As % of total Reason for any significant change
Amount Amount percentage (%)
assets assets
Monetary capital 51,481,539,711.00 16.93% 57,128,659,576.00 22.31% -5.38% N/A
Accounts receivable 19,880,680,518.00 6.54% 15,513,763,252.00 6.06% 0.48% N/A
Inventories 11,985,398,172.00 3.94% 8,957,719,381.00 3.50% 0.44% N/A
Investment property 1,283,867,651.00 0.42% 1,296,662,205.00 0.51% -0.09% N/A
Long-term equity
2,389,166,886.00 0.79% 6,928,854,415.00 2.71% -1.92% Consolidation of associate/joint venture
investments
The newly established project was converted into
Fixed assets 128,157,730,995.00 42.15% 88,625,296,761.00 34.60% 7.55%
fixed assets
Construction in progress 56,423,354,887.00 18.56% 50,761,250,426.00 19.82% -1.26% N/A
Short-term borrowings 5,449,954,885.00 1.79% 3,249,736,430.00 1.27% 0.52% N/A
Long-term borrowings 94,780,077,864.00 31.17% 78,973,633,010.00 30.84% 0.33% N/A
The decrease of due finance products during the
Other current assets 12,463,073,779.00 4.10% 15,924,433,978.00 6.22% -2.12%
Reporting Period.
Accounts payable 22,213,956,616.00 7.31% 16,205,788,698.00 6.33% 0.98% N/A
The increase of engineering equipment payables
Other accounts payable 22,956,979,828.00 7.55% 16,122,413,130.00 6.30% 1.25%
and deferred VAT of imported equipment
Current portion of
5,597,563,204.00 1.84% 9,109,708,511.00 3.56% -1.72% Returning the bank loans.
non-current liabilities
23
BOE Technology Group Co., Ltd. Annual Report 2018
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Gain/loss on Cumulative
Impairment allowance Purchased in the Sold in the Reporting
Item Beginning amount fair-value changes in fair-value changes Ending amount
for the Reporting Period Reporting Period Period
the Reporting Period charged to equity
Financial assets
1. Financial assets at
fair value through
profit/loss (excluding 0.00 0.00 0.00 0.00 0.00 0.00 0.00
derivative financial
assets)
2.Derivative financial
0.00 0.00 0.00 0.00 0.00 0.00 0.00
assets
3.Available-for-sale
527,750,536.00 0.00 -26,756,143.00 0.00 0.00 8,952,172.00 391,502,549.00
financial assets
Subtotal of financial
527,750,536.00 0.00 -26,756,143.00 0.00 0.00 8,952,172.00 391,502,549.00
assets
Investment property 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Productive living
0.00 0.00 0.00 0.00 0.00 0.00 0.00
assets
Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total of the above 527,750,536.00 0.00 -26,756,143.00 0.00 0.00 8,952,172.00 391,502,549.00
Financial liabilities 73,061,153.00 -2,061,153.00 0.00 0.00 0.00 0.00 71,000,000.00
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
24
BOE Technology Group Co., Ltd. Annual Report 2018
3. Restricted Asset Rights as at the Period-End
Item Ending carrying value Reason for restriction
Monetary 8,130,843,191.00
As pledge for guarantee and as security deposits
capital
208,324,414.00 Endorsed and transferred with right of recourse, as pledge for opening notes
Notes receivable
payable
Inventories 0.00 N/A
Fixed assets 98,251,866,706.00 As mortgage for guarantee
Intangible assets 1,216,927,485.00 As mortgage for guarantee
Investment 217,435,561.00
As mortgage for guarantee
property
Construction in 34,117,974,254.00
As mortgage for guarantee
progress
Total 142,143,371,611.00 --
V Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
Investments made in this Reporting Period (RMB) Investments made in the prior year (RMB) Change (%)
183,852,785.00 5,781,001,277.00 -96.82%
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
25
BOE Technology Group Co., Ltd. Annual Report 2018
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
Profit/loss
Account
on fair value Cumulative fair Purchased Source of
Variety of Code of Name of Initial ing Sold in this Profit/loss in Accounting
Beginning changes in value changes in this Ending carrying
measure Reporting this Reporting investment
securities securities securities investment cost ment carrying value this charged to Reporting value title
Period Period
Reporting equity Period funds
model
Period
Domestic/ TPV Fair Available-for-
Self-owned
overseas HK00903 Technolog 134,658,158.00 value 21,584,703.00 0.00 -2,430,028.00 0.00 0.00 205,417.00 25,613,279.00 sale financial
funds
stock y method asset
Domestic/ Fair Available-for-
SH60065 Electronic Self-owned
overseas 90,160,428.00 value 108,996,372.00 0.00 37,320,319.00 0.00 0.00 3,711,768.00 83,995,943.00 sale financial
8 Zone funds
stock method asset
Domestic/ Fair Available-for-
Bank of Self-owned
overseas HK01963 120,084,375.00 value 130,968,760.00 0.00 -21,379,310.00 0.00 0.00 3,074,294.00 98,705,065.00 sale financial
Chongqing funds
stock method asset
BlackRock
Global Fair Available-for-
Self-owned
Funds BLK Allocation 0.00 value 6,347,799.00 0.00 0.00 0.00 6,179,429.00 2,605,529.00 0.00 sale financial
funds
FundA2 method asset
USD
Domestic/ Fair Available-for-
China Self-owned
overseas HK06066 70,041,364.00 value 65,856,319.00 0.00 -25,628,789.00 0.00 0.00 1,949,454.00 44,412,575.00 sale financial
Securities funds
stock method asset
26
BOE Technology Group Co., Ltd. Annual Report 2018
Domestic/ New Fair Available-for-
Self-owned
overseas HK01518 Century 140,848,850.00 value 178,837,871.00 0.00 -14,939,595.00 0.00 709,430.00 1,142,810.00 125,909,255.00 sale financial
funds
stock Healthcare method asset
Domestic/ Z-Obee Fair Available-for-
Self-owned
overseas HK00948 Holdings 0.00 value 246,566.00 0.00 0.00 0.00 290,658.00 303,894.00 0.00 sale financial
funds
stock Ltd. method asset
Other securities investments
0.00 -- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -- --
held at the period-end
Total 555,793,175.00 -- 512,838,390.00 0.00 -27,057,403.00 0.00 7,179,517.00 12,993,166.00 378,636,117.00 -- --
Disclosure date of the
announcement about the board’s
N/A
consent for the securities
investment
Disclosure date of the
announcement about the general
N/A
meeting’s consent for the
securities investment (if any)
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Use of Funds Raised
□ Applicable √ Not applicable
No such cases in the Reporting Period
27
BOE Technology Group Co., Ltd. Annual Report 2018
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VII Major Subsidiaries
√ Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the Company’s net profit:
Unit: RMB
Relationship with Principal activity
Name Registered capital Total assets Net assets Operating revenue Operating profit Net profit
the Company
Investment construction, R&D,
Hefei BOE
Production, and sales of
Optoelectronics Subsidiary 9,000,000,000.00 15,097,057,224.00 12,165,750,288.00 12,500,784,859.00 2,167,001,130.00 1,891,628,081.00
relevant products of TFT-LCD
Technology Co., Ltd.
and its matching products.
R&D, Production, and sales of
semi-conductor display device,
Chongqing BOE
complete machine, and relevant
Optoelectronics Subsidiary 19,226,000,000.00 39,526,605,610.00 25,347,764,127.00 18,275,745,890.00 2,125,872,574.00 1,839,819,172.00
products; import and export
Technology Co., Ltd.
business and technology
consulting of goods.
28
BOE Technology Group Co., Ltd. Annual Report 2018
Subsidiaries obtained or disposed in this Reporting Period
□ Applicable √ Not applicable
Information about major majority- and minority-owned subsidiaries:
Naught
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Prospects
At present, IoT is at the key layout stage of industrial ecology, and in-depth exploration, expansion and extension of industries for application scenes will significantly promote explosive growth
of the market scale. It is predicted that the market scale of global IoT will be up to USD 14.2 trillion in 2030, mainly involving smart manufacturing, smart city, smart healthcare, smart retail,
smart logistics and smart traffic.
From the perspective of industry chain, IoT can be simply divided into four layers, namely perception and control, network, platform service and application service. Along with the
development of IoT, the market scale of each layer will keep increasing, and the increase structure transforms from layout of infrastructure at the base layer to the field of professional service
and application scenes. In 2030, the market scale proportion of platform service and application service will be more than 70% in total, and that of the perception and control layer as the
infrastructure will decrease to 18%.
In 2019, BOE will further implement the basic business steadily, optimize and upgrade comprehensive smart products and explore the IoT system and professional service business vigorously to
promote the anti-risk ability and the profitability further.
(I) Interface devices (D)
The business focus of the Display and Sensor BG in 2019: Accelerate flexible upgrade and expand application of products; Promote 8425 plan ("8425" means promotion of 8K, popularization
of 4K, replacement of 2K and good service of 5G) and build up a win-win industry ecology.
Sensor and Application Solution BG will stick to innovative transformation, carry out in-depth development in the medical and home furniture fields to provide clients with sensor solutions
featuring rich categories and outstanding performance.
(II) Smart IoT (S)
The Intelligent Manufacturing Service BG will serve subdivided application scene solutions to provide the eco-partners with ICT terminal products.
IoT Solution BG will develop business office, smart education, digital hospital, smart energy, smart traffic and smart home furniture comprehensively as well as carry out in-depth development
in the retail and smart finance fields to provide the whole world with system integration solutions.
29
BOE Technology Group Co., Ltd. Annual Report 2018
The Digital Art IoT Platform BG will further optimize the platform function and enrich terminal product clusters to forge a digital art platform providing the best user experience.
(III) Smart Medicine and Engineering (H)
The Mobile Healthcare IoT Platform BG will launch types of mobile healthcare equipment, perfect platform functions and optimize user experience to provide millions of VIP with personal,
convenient, safe and reliable healthcare services.
The Healthcare Service BG will devote itself to the operation of Hefei BOE Hospital, and promote healthcare industry base in Chengdu, Beijing, etc. steadily at the same time.
30
BOE Technology Group Co., Ltd. Annual Report 2018
X Communications with the Investment Community such as Researches, Inquiries and
Interviews
1. During the Reporting Period
√ Applicable □ Not applicable
Way of
Date Type of communication party Index to main information communicated
communication
10 January 2018 One-on-one meeting Institution
15 January 2018 One-on-one meeting Institution
16 January 2018 One-on-one meeting Institution
17 January 2018 One-on-one meeting Institution
19 January 2018 By phone Institution
22 January 2018 One-on-one meeting Institution
24 January 2018 One-on-one meeting Institution
25 January 2018 One-on-one meeting Institution
1 March 2018 One-on-one meeting Institution
7 March 2018 One-on-one meeting Institution Main contents:
1. the main situations of the industry
8 March 2018 One-on-one meeting Institution
2. main operating information of the Company
9 March 2018 One-on-one meeting Institution
3. innovations of technology and products
12 March 2018 One-on-one meeting Institution
4. future strategy layout
13 March 2018 One-on-one meeting Institution For details, see www.cninfo.com.cn
14 March 2018 One-on-one meeting Institution
15 March 2018 One-on-one meeting Institution
16 March 2018 One-on-one meeting Institution
20 March 2018 One-on-one meeting Institution
21 March 2018 One-on-one meeting Institution
22 March 2018 One-on-one meeting Institution
23 March 2018 By phone Institution
26 March 2018 By phone Institution
29 March 2018 By phone Institution
25 April 2018 One-on-one meeting Institution
Main contents:
26 April 2018 One-on-one meeting Institution 1. the performance in 2017, the performance in the
3 May 2018 One-on-one meeting Institution first quarter of 2018 of the Company, and the main
situations of the industry
4 May 2018 By phone Institution
31
BOE Technology Group Co., Ltd. Annual Report 2018
5 June 2018 One-on-one meeting Institution 2. main operating information of the Company
11 June 2018 One-on-one meeting Institution 3. innovations of technology and products
4. future strategy layout
12 June 2018 By phone Institution
For details, see www.cninfo.com.cn
19 June 2018 By phone Institution
20 June 2018 One-on-one meeting Institution
29 June 2018 One-on-one meeting Institution
3 July 2018 One-on-one meeting Institution
4 July 2018 One-on-one meeting Institution
5 July 2018 One-on-one meeting Institution
29 August 2018 One-on-one meeting Institution
Main contents:
3 September 2018 One-on-one meeting Institution
1. the interim performance in 2018 of the Company,
12 September 2018 One-on-one meeting Institution and the main situations of the industry
13 September 2018 One-on-one meeting Institution 2. main operating information of the Company
13 September 2018 By phone Institution 3. innovations of technology and products
4. future strategy layout
20 September 2018 One-on-one meeting Institution
For details, see www.cninfo.com.cn
28 September 2018 One-on-one meeting Institution
29 October 2018 By phone Institution
30 October 2018 One-on-one meeting Institution
31 October 2018 One-on-one meeting Institution
2 November 2018 One-on-one meeting Institution
Main contents:
12 November 2018 By phone Institution
1. the performance in the third quarter of 2018 of the
19 November 2018 By phone Institution Company, and the main situations of the industry
23 November 2018 One-on-one meeting Institution 2. main operating information of the Company
26 November 2018 One-on-one meeting Institution 3. innovations of technology and products
4. future strategy layout
27 November 2018 One-on-one meeting Institution
For details, see www.cninfo.com.cn
28 November 2018 One-on-one meeting Institution
29 November 2018 One-on-one meeting Institution
5 December 2018 One-on-one meeting Institution
6 December 2018 One-on-one meeting Institution
Times of visit 74
Number of visiting institutions 802
Number of visiting individuals 47
Number of other visitors 0
Significant undisclosed information disclosed, revealed or leaked No
32
BOE Technology Group Co., Ltd. Annual Report 2018
Part V Significant Events
I Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)
How the profit distribution policy, especially the cash dividend policy, for ordinary shareholders was formulated, executed or revised in the Reporting Period:
□ Applicable √ Not applicable
The profit distributions to ordinary shareholders, either in the form of cash or stock, in the past three years (including the Reporting Period) are summarized as follows:
For 2016, based on the total shares of 34,885,942,533, the Company distributed, with the undistributed profit, a cash dividend of RMB0.30 (tax inclusive) per 10 shares to all its shareholders,
with the total distributed amount reaching RMB1,046,578,275.99, representing 70.08% of the total undistributed profit. And no bonus share was granted, nor was any capital reserve converted
into share capital.
For 2017, based on the total shares of 34,798,398,763, the Company distributed, with the undistributed profit, a cash dividend of RMB0.50 (tax inclusive) per 10 shares to all its shareholders,
with the total distributed amount reaching RMB1,739,919,938.15, representing 98.56% of the total undistributed profit. And no bonus share was granted, nor was any capital reserve converted
into share capital.
For 2018, based on the total shares of 34,798,398,763, the Company distributed, with the undistributed profit, a cash dividend of RMB0.30 (tax inclusive) per 10 shares to all its shareholders,
with the total distributed amount reaching RMB1,043,951,962.89, representing 44% of the total undistributed profit. And no bonus share was granted, nor was any capital reserve converted into
share capital.
Cash dividend for ordinary shareholders in the past three years (including the Reporting Period):
Unit: RMB
Net profit attributable to ordinary Total cash dividends
A as % of Cash dividends in other
Year Cash dividends (tax inclusive) (A) shareholders of the listed company in forms (such as share C as % of B (%) (including those in D as % of B (%)
B (%) repurchase) (C)
consolidated statements for the year (B) other forms) (D)
2018 1,043,951,962.89 3,435,127,975.00 30.39% 0.00 0.00% 0.00 0.00%
2017 1,739,919,938.15 7,567,682,493.00 22.99% 0.00 0.00% 0.00 0.00%
2016 1,046,578,275.99 1,882,571,674.00 55.59% 0.00 0.00% 0.00 0.00%
33
BOE Technology Group Co., Ltd. Annual Report 2018
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for the ordinary shareholders despite the facts that the Company has made profits in the Reporting
Period and the profits of the Company as the parent distributable to the ordinary shareholders are positive.
□ Applicable √ Not applicable
II Final Dividend Plan for the Reporting Period
√Applicable □ Not applicable
Bonus shares for every 10 shares (share) 0
Dividend for every 10 shares (RMB) (tax inclusive) 0.30
Additional shares to be converted from capital reserve for every 10 shares (share) 0
Total shares as the basis for the profit distribution proposal (share) 34,798,398,763
Cash dividends (RMB) (tax inclusive) 1,043,951,962.89
Cash dividends in other forms (such as share repurchase) (RMB) 0.00
Total cash dividends (including those in other forms) (RMB) 1,043,951,962.89
Attributable profit (RMB) 2,392,243,713.00
Total cash dividends (including those in other forms) as % of total profit distribution
100%
(%)
Cash dividend policy adopted
If the Company is in a growth stage and has any plan for significant expenditure, in profit distribution, the proportion of cash dividends shall be 20% or above.
Details about the proposal for profit distribution and converting capital reserve into share capital
Based on the total shares of 34,798,398,763, the Company planned to distribute a cash dividend of RMB0.30 (tax inclusive) per 10 shares to the shareholders, with no share dividend converted
either from retained earnings or from capital reserves. The said proposal is in compliance with the Company’s Articles of Association and relevant approval procedure, and the independent
directors have expressed their independent opinion on the proposal, which fully protects the legal rights and interests of the minority investors.
34
BOE Technology Group Co., Ltd. Annual Report 2018
III Fulfillment of Commitments
1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well
as the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still
within the forecast period, explain why the forecast has been reached for the Reporting Period.
□Applicable √ Not applicable
IV Occupation of the Company’s Capital by the Controlling Shareholder or Its Related
Parties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
V Explanations Given by the Board of Directors, the Supervisory Board and the Independent
Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial
Statements of the Reporting Period
□ Applicable √ Not applicable
VI YoY Changes to Accounting Policies, Estimates and Methods
√ Applicable □ Not applicable
Changes in accounting policies and reasons:
The Ministry of Finance issued the following interpretations and revisions of Accounting Standards for Business Enterprises
(hereinafter referred to as “ASBE”) in 2017 and 2018:
Notice on Revision and Issuing of Financial Statement Formats for General Enterprises in 2018 (CK [2018] No.15) and relevant
interpretations
The Group begins to implement above-mentioned interpretations and revisions of ASBE from 1 January 2018 and adjusts relevant
contents of accounting policies.
The main effects of adopting above-mentioned interpretations and revisions of ASBE by the Group are as follows:
(a) Interpretation No.9- 12
The Group adjusts relevant accounting policies in accordance with regulations stipulated in Interpretation No.9-12 governing the
accounting treatment of net investment losses under the equity method, depreciation and amortization method for fixed assets and
intangible assets, and identification and disclosure of related parties the key management personnel serves.
The adoption of interpretation No.9-12 makes significant effects on the Company’s financial situation and operating results.
(b) Presentation of Financial Statements
The Group prepares the 2018 Financial Statements in accordance with the financial statement formats stipulated in CK [2018] No.15
35
BOE Technology Group Co., Ltd. Annual Report 2018
and relevant interpretations and adjusts the presentation of comparative financial statements by retrospective adjustment method.
VII Retrospective Restatements due to Correction of Material Accounting Errors in the
Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII YoY Changes to the Scope of the Consolidated Financial Statements
√Applicable □ Not applicable
During the Reporting Period, the Group incorporated 6 new subsidiaries, that is, Beijing BOE Sensor Technology Co., Ltd.,
Mianyang BOE Optoelectronics Co., Ltd., SES Imagotag SA, Beijing BOE Yiyun Technology Co., Ltd, Wuhan BOE Optoelectronics
Technology Co., Ltd., and Chongqing BOE Display Technology Co., Ltd, with the Company respectively holding 100%, 81.35%,
73.93%, 95.92%, 14.58% and 38.46% interests in them.
IX Engagement and Disengagement of Independent Auditor
Current independent auditor:
Name of the domestic independent auditor KPMG Huazhen (LLP)
The Company’s payment to the domestic independent auditor (RMB’0,000) 990
How many consecutive years the domestic independent auditor has provided audit
14 years
service for the Company
Names of the certified public accountants from the domestic independent auditor
Zhanghuan and Liu Jingyuan
writing signatures on the auditor’s report
How many consecutive years the certified public accountants from the domestic
Zhanghuan 2 years and Liu Jingyuan 1year
independent auditor have provided audit service for the Company
Name of the foreign independent auditor (if any) N/A
The Company’s payment to the foreign independent auditor (RMB’0,000) (if any) N/A
How many consecutive years the foreign independent auditor has provided audit
N/A
service for the Company (if any)
Names of the certified public accountants from the foreign independent auditor writing
N/A
signatures on the auditor’s report (if any)
How many consecutive years the certified public accountants from the foreign
N/A
independent auditor have provided audit service for the Company (if any)
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
□ Yes √ No
Independent auditor, financial advisor or sponsor engaged for internal control audit
√ Applicable □ Not applicable
36
BOE Technology Group Co., Ltd. Annual Report 2018
The Company hired KPMG Huazhen LLP as the internal control auditor for the Current Year at the cost of RMB2.70 million.
X Possibility of Listing Suspension or Termination after Disclosure of this Report
□ Applicable √ Not applicable
XI Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Major Legal Matters
√Applicable □ Not applicable
Involved Execution
General Decisions Disclosure Index to disclosed
amount Provision Progress of
information and effects date information
(RMB’0,000) decisions
Disputes case of
sales contract that The Company received the
BOE Technology (2018) MXZ No. 132 written
(HK) Limited sued verdict on 9 July 2018 by the
LeTV Mobile Supreme Court with regard For details, see
Intelligent to the jurisdiction objection Interim Report 2017
Information put forward by LeTV of BOE Technology
29 August
Technology 28,471.43 No Mobile, which rejected the Unknown N/A Group Co., Ltd.
2017
(Beijing) Co., Ltd, appeal of LeTV Mobile, disclosed on
LeTV Holdings remaining the original www.cninfo.com.cn.
(Beijing) Co., Ltd., verdict. This case is on 29 August 2017
Le Sai Mobile waiting to the notice for the
Technology first instance of Beijing High
(Beijing) Co., Ltd. People’s Court
and Mr. JiaYueting
Litigations for
2018 (including
7,848.35 No N/A N/A N/A N/A N/A
carryforwards in
previous years )
XIII Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
37
BOE Technology Group Co., Ltd. Annual Report 2018
XIV Credit Quality of the Company as well as Its Controlling Shareholder and Actual
Controller
□ Applicable √ Not applicable
XV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures
for Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVI Major Related-Party Transactions
1. Continuing Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
38
BOE Technology Group Co., Ltd. Annual Report 2018
5. Other Major Related-Party Transactions
√Applicable □ Not applicable
Naught
Index to the public announcements about the said related-party transactions disclosed
Title of public announcement Disclosure date Disclosure website
Announcement on Investment and Construction of Project of the 6th generation
9 March 2018 www.cninfo.com.cn
AMOLED (flexible) production line in Chongqing and Related-Party Transactions
Announcement on the Prediction of 2018 Annual Routine Connected Transaction 24 April 2018 www.cninfo.com.cn
Announcement on Equity Participation on Beijing Electronic Control Industrial
31 July 2018 www.cninfo.com.cn
Investment Co., Ltd and Related-Party Transactions
XVII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
√ Applicable □ Not applicable
Notes to lease
1. The fixed assets leased in through financing by the Group are the youth apartment used as staff dormitory.
2. The Group sold and leased back part of the machinery equipment and construction in progress. The sale of assets and lease
transactions are related to each other, and there is almost no doubt that the Group will repurchase them after expiry of the lease.
The project whose profit and loss brought for the Company can reach above 10% of the total profits during the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
39
BOE Technology Group Co., Ltd. Annual Report 2018
2. Major guarantees
√ Applicable □ Not applicable
(1) Guarantees
Unit: RMB'0,000
Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)
Guarantee
Disclosure date of Having
Actual guarantee for a
Obligor the guarantee line Line of guarantee Actual occurrence date Type of guarantee Term of guarantee expired or
amount related
announcement not
party or not
N/A
Total approved line for such guarantees in the Total actual amount of such guarantees
0 0
Reporting Period (A1) in the Reporting Period (A2)
Total approved line for such guarantees at the end of Total actual balance of such guarantees
0 0
the Reporting Period (A3) at the end of the Reporting Period (A4)
Guarantees provided by the Company as the parent for its subsidiaries
Guarantee
Disclosure date of Having
Actual guarantee for a
Obligor the guarantee line Line of guarantee Actual occurrence date Type of guarantee Term of guarantee expired or
amount related
announcement not
party or not
Hefei BOE Optoelectronics 23 July 2010 to 23 July
14 August 2014 752,864 12 March 2015 29,817 Joint-liability Not Not
Technology Co., Ltd. 2019
Hefei XinSheng Optoelectronics 6 January 2014 to 6 January
14 August 2014 1,269,692 15 January 2015 737,794 Joint-liability Not Not
Technology Co., Ltd. 2022
40
BOE Technology Group Co., Ltd. Annual Report 2018
Ordos YuanSheng 17 June 2013 to 9 June
2 April 2013 479,434 22 May 2013 129,220 Joint-liability Not Not
Optoelectronics Co., Ltd. 2021
Ordos YuanSheng 17 June 2013 to 9 June
14 August 2014 479,434 30 September 2014 129,220 Pledge Not Not
Optoelectronics Co., Ltd. 2021
Ordos YuanSheng 17 March 2017 to 17 March
30 November 2016 549,516 15 March 2017 433,045 Joint-liability Not Not
Optoelectronics Co., Ltd. 2025
Chengdu BOE Optoelectronics 6 September 2017 to 6
25 April 2017 2,299,706 30 August 2017 1,618,603 Joint-liability Not Not
Technology Co., Ltd. September 2027
Opening date of the letter
Chengdu BOE Optoelectronics
25 April 2017 450,000 30 August 2017 231,850 Joint-liability of guarantee to 31 July Not Not
Technology Co., Ltd.
2023
Chongqing BOE Optoelectronics 5 November 2014 to 5
14 August 2014 1,456,039 29 September 2014 735,697 Joint-liability Not Not
Technology Co., Ltd. November 2022
Hefei BOE Display Technology 7 September 2017 to 7
1 December 2016 1,682,015 30 August 2017 1,576,091 Joint-liability Not Not
Co., Ltd. September 2025
Opening date of the letter
Hefei BOE Display Technology
1 December 2016 450,000 21 December 2017 286,000 Joint-liability of guarantee to 31 March Not Not
Co., Ltd.
2024
Fuzhou BOE Optoelectronics 19 December 2016 to 19
10 December 2015 1,336,814 8 November 2016 1,176,459 Joint-liability Not Not
Technology Co., Ltd. December 2024
Opening date of the letter
Fuzhou BOE Optoelectronics
10 December 2015 300,000 8 November 2016 180,000 Joint-liability of guarantee to 28 Not Not
Technology Co., Ltd.
December 2023
Mianyang BOE Optoelectronics 26 September 2018 to 26
18 May 2018 2,119,471 18 September 2018 815,138 Joint-liability Not Not
Co., Ltd. September 2028
Mianyang BOE Optoelectronics Opening date of the letter
18 May 2018 460,000 22 June 2018 296,000 Joint-liability Not Not
Co., Ltd. of guarantee to 31 October
41
BOE Technology Group Co., Ltd. Annual Report 2018
2027
Total approved line for such guarantees in the Total actual amount of such guarantees 1,108,497
2,579,471
Reporting Period (B1) in the Reporting Period (B2)
Total approved line for such guarantees at the end of Total actual balance of such guarantees 8,245,714
13,605,551
the Reporting Period (B3) at the end of the Reporting Period (B4)
Guarantees provided between subsidiaries
Guarantee
Disclosure date of Having
Actual guarantee for a
Obligor the guarantee line Line of guarantee Actual occurrence date Type of guarantee Term of guarantee expired or
amount related
announcement not
party or not
OrdosYuanSheng 17 June 2013 to 9 June
2 April 2013 479,434 22 May 2013 129,220 Pledge Not Not
Optoelectronics Co., Ltd. 2021
Huanda Trading (Hebei) Co., 15 June 2017 to 16 January
N/A 14,600 24 May 2017 14,540 Joint-liability Not Not
Ltd. 2029
Guangtai Solar Energy 20 December 2017 to 6
N/A 5,450 20 December 2017 5,240 Joint-liability Not Not
Technology (Suzhou) Co., Ltd April 2027
Yangyuan Photovoltaic Power
11 September 2017 to 11
Generation (Huanggang) Co., N/A 4,552 11 September 2017 4,552 Joint-liability Not Not
September2027
Ltd
Yaoguang New Energy 31 October 2017 to 31
N/A 4,192 31 October 2017 4,192 Joint-liability Not Not
(Shouguang) Co., Ltd October 2027
Suzhou Industrial Park Taijing 1 December 2017 to 1
N/A 3,484 1 December 2017 3,484 Joint-liability Not Not
Photovoltaic Co., Ltd December 2027
Qingmei Solar Energy 21 December 2017 to 21
N/A 4,678 21 December 2017 4,678 Joint-liability Not Not
Technology (Lishui) Co., Ltd December 2027
Qinghong Solar Energy 21 December 2017 to 21
N/A 2,374 21 December 2017 2,374 Joint-liability Not Not
Technology (Jinhua) Co., Ltd December 2027
42
BOE Technology Group Co., Ltd. Annual Report 2018
Qinghui Solar Energy 15 December 2017 to 15
N/A 3,666 15 December 2017 3,666 Joint-liability Not Not
Technology (Jinhua) Co., Ltd December 2027
Rongke New Energy (Hefei) 1,393 18 December 2017 to 18
N/A 1,400 18 December 2017 Joint-liability Not Not
Co., Ltd December 2029
Tianchi New Energy (Hefei) Co., 1,093 18 December 2017 to 18
N/A 1,100 18 December 2017 Joint-liability Not Not
Ltd December 2029
Qinghao Solar Energy 18 December 2017 to 18
N/A 890 18 December 2017 884 Joint-liability Not Not
Technology (Jinhua) Co., Ltd December 2029
Xiangqing Solar Energy 18 December 2017 to 18
N/A 3,476 18 December 2017 3,259 Joint-liability Not Not
Technology (Dongyang) Co., Ltd December 2029
Qingyue Solar Energy 18 December 2017 to 18
N/A 960 18 December 2017 900 Joint-liability Not Not
Technology (Wuyi) Co., Ltd December2029
Qingyou Solar Energy 18 December 2017 to 18
N/A 2,210 18 December 2017 2,204 Joint-liability Not Not
Technology (Longyou) Co., Ltd December 2029
Qingfan Solar Energy 18 December 2017 to 18
N/A 1,855 18 December 2017 1,739 Joint-liability Not Not
Technology (Quzhou) Co., Ltd December 2029
Anhui BOE Energy Investment 27 December 2017 to 27
N/A 13,575 27 December 2017 13,485 Joint-liability Not Not
Co., Ltd December 2029
Taihang Electric Power 19 December 2017 to 18
N/A 600 19 December 2017 544 Joint-liability Not Not
Technology (Ningbo) Co., Ltd December 2025
19 December 2017 to 18
Guoji Energy (Ningbo) Co., Ltd N/A 2,740 19 December 2017 2,563 Joint-liability Not Not
December 2025
Hexu Technology (Hefei) Co., 18 May 2018 to 10 May
N/A 538 18 May 2018 538 Joint-liability Not Not
Ltd 2028
Chenneng Technology (Hefei) 18 May 2018 to 10 May
N/A 1,068 18 May 2018 1,068 Joint-liability Not Not
Co., Ltd 2028
43
BOE Technology Group Co., Ltd. Annual Report 2018
Hongyang Solar Energy Power 14 December 2017 to 13
N/A 3,500 14 December 2017 3,500 Joint-liability Not Not
Generation (Anji) Co., Ltd December 2025
Ke’enSolar Energy Power 14 December 2017 to 13
N/A 2,400 14 December 2017 2,245 Joint-liability Not Not
Generation (Pingyang) Co., Ltd December 2025
Dongze Photovoltaic Power 14 December 2017 to 13
N/A 2,100 14 December 2017 1,965 Joint-liability Not Not
Generation (Wenzhou) Co., Ltd December 2025
Aifeisheng Investment and 14 December 2017 to 13
N/A 1,400 14 December 2017 1,310 Joint-liability Not Not
Management (Wenzhou) Co, Ltd December 2025
Junlong New Energy 25 April 2018 to 25 April
N/A 8,459 25 April 2018 8,262 Joint-liability Not Not
Technology (Huaibin) Co., Ltd 2030
Hengchuan New Energy 31 January 2018 to 31
N/A 6,892 31 January 2018 6,570 Joint-liability Not Not
Technology (Hong’an) Co., Ltd January 2030
Anhui BOE Energy Investment 25 April 2018 to 25 April
N/A 2,060 25 April 2018 1,760 Joint-liability Not Not
Co., Ltd 2030
Shaoxing Guangnian New 13 December 2018 to 12
N/A 16,000 13 December 2018 16,000 Joint-liability Not Not
Energy Co., Ltd. December 2030
Shaoxing Xuhui New Energy 13 December 2018 to 12
N/A 4,500 13 December 2018 4,500 Joint-liability Not Not
Co., Ltd. December 2030
27 April 2018 to 27 April
Hefei BOE Hospital Co., Ltd 27 April 2018 130,000 27 April 2018 66,000 Joint-liability Not Not
2033
12 December 2017 to 7
BOE Technology (HK) Limited N/A 110,647 31 October 2017 110,647 Pledge Not Not
December 2020
Total approved line for such guarantees in the Total actual amount of such guarantees
130,000 185,271
Reporting Period (C1) in the Reporting Period (C2)
Total approved line for such guarantees at the end of Total actual balance of such guarantees
361,366 295,156
the Reporting Period (C3) at the end of the Reporting Period (C4)
44
BOE Technology Group Co., Ltd. Annual Report 2018
Total guarantee amount (total of the three kinds of guarantees above)
Total guarantee line approved in the Reporting Total actual guarantee amount in the
2,709,471 1,293,768
Period (A1+B1+C1) Reporting Period (A2+B2+C2)
Total approved guarantee line at the end of the Total actual guarantee balance at the end
13,966,917 8,540,870
Reporting Period (A3+B3+C3) of the Reporting Period (A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of the Company’s net assets 99.48%
Of which:
Balance of guarantees provided for shareholders, actual controller and their related parties (D) 0
Balance of debt guarantees provided directly or indirectly for obligors with an over 70% debt/asset
204,059
ratio (E)
Amount by which the total guarantee amount exceeds 50% of the Company’s net assets (F) 4,248,032
Total of the three amounts above (D+E+F) 4,248,032
Joint responsibilities possibly borne or already borne in the Reporting Period for undue guarantees
N/A
(if any)
Provision of external guarantees in breach of the prescribed procedures (if any) N/A
Compound guarantees:
None.
(2) Irregularities in Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
45
BOE Technology Group Co., Ltd. Annual Report 2018
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Overviews of cash entrusted for wealth management during the Reporting Period
Unit: RMB'0,000
Unrecovered overdue
Type Source of capital Amount Undue amount
amount
Bank’s wealth
management product and Self-owned funds 1,257,000 551,000 0
structured deposits
Total 1,257,000 551,000 0
Note: The amount in the table above refers to the highest single-day balance of cash entrusted for wealth management during the
Reporting Period.
Particulars of entrusted cash management with single significant amount or low security, bad liquidity, and no capital preservation
□ Applicable √ Not applicable
Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment for
entrusted asset management
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVIII Corporate Social Responsibility (CSR)
1. Measures Taken to Fulfill CSR Commitment
BOE discloses its Corporate Social Responsibility Report every year. As of 2018, BOE had consecutively disclosed Social
Responsibility Report for 9 years. Please view and download such report via official website of BOE www.boe.com
46
BOE Technology Group Co., Ltd. Annual Report 2018
2. Measures Taken for Targeted Poverty Alleviation
(1) Plans
In response to the national targeted poverty alleviation policy, BOE will carry forward the non-profit educational projects, such as
including “Light Up Your Growth”, “Dream Space”, and “BOE Summer Camp” with educational poverty alleviation as the direction.
(2) Summary of the Related Work Done in the Reporting Period
In 2018, BOE donated RMB1.5 million to China Voluntary Service Fund for education, culture, public welfare program, and etc.
With regard to educational poverty alleviation, BOE put RMB432,015 to subsidize the poor students, and improve educational
resources in the poor areas. For example, BOE carried forward various educational poverty alleviation projects, like “Light Up Your
Growth”, “Summer Camp with Dream” and “Rain and Dew Plan”, etc. For voluntary service, BOE put RMB41,345 in 2018 to
establish voluntary service system covering all entities, and also organized the activity of “donating old things to offer the love”, and
participated the voluntary labor. BOE volunteers practiced what they preached to actively help the vulnerable groups and spread love
and faith.
(3) Results
Indicator Measurement unit Quantity/Progress
1. General results —— ——
Of which: 1. capital RMB’0,000 123.74
2. Itemized results —— ——
2.1 Out of poverty by education —— ——
Of which: 2.1.1 invested amounts to subsidize poor students RMB’0,000 43.2
2.1.2 numbers of poor students subsidized Person 1,474
2.2 Other Items —— ——
Of which: 2.2.1 numbers of items Number 11
2.2.2 invested amounts RMB’0,000 80.53
3. Accolades received (for what and at what level) —— ——
(4) Subsequent Plans
In 2019, BOE will continuously carry forward the educational poverty alleviation project focused on “Light Up Your Growth”,
carrying out summer camp activities, materials support, and voluntary activities, etc, taking the location of BOE production line as
the main place to carry out these activities and gradually expand coverage scale of projects; meanwhile, taking the BOE employees
volunteers system as the platform to continuously conduct activities of helping the poor and various donations.
3. Issues Related to Environmental Protection
Indicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by the environmental protection
authorities.
47
BOE Technology Group Co., Ltd. Annual Report 2018
Yes
Number Discharge Excess
Name of Distribution Discharge Approved
Name of of standards Total ive
major Way of discharge of discharge concentratio total
polluter discharg implemen discharge discha
pollutants outlets n discharge
e outlets ted rge
Standard emission South gate
Beijing BOE COD 101.25mg/L 500mg/L 286.21t 702.68t
after being treated of factory,
Optoelectroni
by 2 northwest None
cs Technology
Ammonia sewage treatment corner of
Co., Ltd. 16.68 mg/L 45 mg/L 46.04t 55.93t
nitrogen system factory
The 4.5th
generation
TFT-LCD COD 134.8mg/L 500mg/L 136.58t 490.51t
Standard emission
production
after being treated
line of North side
by 1 None
Chengdu of factory
sewage treatment
BOE
Ammonia system
Optoelectroni 19.7mg/L 45mg/L 19.96t 25.249t
nitrogen
cs Technology
Co., Ltd.
Standard emission
Hefei BOE COD 56.49 mg/L 380mg/L 237.69t 1059t
after being treated Northwest
Optoelectroni
by 1 corner of None
cs Technology Ammonia
sewage treatment factory 7.02 mg/L 30mg/L 29.61t 99.2t
Co., Ltd. nitrogen system
Standard emission
Beijing BOE
COD after being treated 118.37 mg/L 500mg/l 608.35t 1618.8t None
Display East gate of
by 1
Technology factory
Ammonia sewage treatment
Co., Ltd. 11.71 mg/L 45mg/l 60.16t 134.4t None
nitrogen system
Hefei Standard emission
COD 65 mg/L 380 mg/L 397.11t 1621.97t
Xinsheng after being treated Northeast
Optoelectroni by 1 gate of None
cs Technology Ammonia sewage treatment factory
14.65 mg/L 30 mg/L 89.82t 128.08t
Co., Ltd. nitrogen system
Standard emission
Erdos COD 34mg/L 500mg/L 114t 713.81t
after being treated
Yuansheng North side
by 1 None
Optoelectroni Ammonia of factory
sewage treatment 3.1mg/L _ 11t 76.82t
cs Co., Ltd. nitrogen
system
48
BOE Technology Group Co., Ltd. Annual Report 2018
The 6th
generation
flexible COD 12.77 mg/L 500mg/L 56.90t 2004.15t
AMOLED Standard emission
production after being treated
North side
line of by 1 None
of factory
Chengdu sewage treatment
BOE Ammonia system
1.33mg/L 45 mg/L 8.623t 216.81t
Optoelectroni nitrogen
cs Technology
Co., Ltd.
Chongqing Standard emission
BOE COD after being treated 103.51 mg/L 400mg/L 566.557t 727.080t
South side
Optoelectroni by 1 None
of factory
cs Technology Ammonia sewage treatment
3.58 mg/L 45 mg/L 19.706t 79.424t
Co., Ltd. nitrogen system
Standard emission
Hefei BOE COD 53.52mg/L 400mg/L 483.21t 1189.88t
after being treated
Display North side
by 1 None
Technology of factory
Ammonia sewage treatment
Co., Ltd. 7.84 mg/L 35 mg/L 60.19t 118.98t
nitrogen system
Standard emission
Fuzhou BOE COD
after being treated Northeast 79.95mg/L 500mg/L 461.84t 510.355t
Optoelectroni
by 1 side of None
cs Technology
Ammonia sewage treatment factory
Co., Ltd. 4.44mg/L 45mg/L 25.15t 68.055t
nitrogen system
Standard emission
BOE COD 102mg/L 500mg/L 2.05t 11.1145t
after being treated
Technology East side of
by 1 None
Group Co., Ammonia factory
sewage treatment 15.8 mg/L 45 mg/L 0.32t 0.3415t
Ltd. nitrogen
system
COD Southeast 14 mg/L 500mg/L 1.60t 13.5545t
BOE (Heibei) side of
Ammonia Discharged into
Mobile 1.12 mg/L 45 mg/L 0.13t 1.01t
nitrogen sewage treatment factory
Display 2 None
COD plant through 125 mg/L 500mg/L 5.01t 74.937t
Technology
municipal pipes North side
Co., Ltd. Ammonia
of factory 22.4 mg/L 45 mg/L 0.90t 6.744t
nitrogen
Construction of pollution prevention equipment and operation condition
During report period, the Company did not have important environmental problem. The Company built strict environmental
management system, and established internal organizational structure to supervise overall environmental performance of the
Company, formulated environmental management regulations and targets, carried out regular supervision for the environmental
49
BOE Technology Group Co., Ltd. Annual Report 2018
management condition of subordinate enterprises to promote the implementation of environmental management work.
Currently, the waste water which is generated by each subordinate enterprise of the Company can be divided in to industrial waste
water and household waste water. Rain water-waste water shunting system is adopted for drainage system to drain water separately
according to different natures. After collecting, the rain water is discharged into rain water pipeline of factory; after the rain water is
collected by rain water pipe network, the rain water is discharged. After being treated by sewage treatment system in factory,
industrial waste water is discharged into sewage treatment factory through municipal pipe network for intense treatment. Household
waste water comprises household fecal waste water and canteen oily waste water etc, after pretreatment, the waste water is
discharged into municipal sewage treatment factory. All industrial and household waste water is not discharged directly, and the
concentration and total amount of drainage satisfy the requirements of national and local relevant standards.
In additional, the exhaust gas which is emitted by each subordinate enterprise mainly comes from technology exhaust gas during
production process, generally including general exhaust gas, acid exhaust gas, alkaline exhaust gas, special exhaust gas and organic
exhaust gas etc. Various exhaust gas can be emitted after being treated by independent emission treatment system. The emission
concentration and total amount satisfy the national and local relevant standards.
“4R concept” for the use of materials has been used by the Company since 2007, that is recycle (Recycle), reduction (Reduce),
renewal (Renew) and responsibility (responsibly). The Company promises that the used materials are all in accordance with
requirements of national relevant environmental regulations and the registration, assessment, permission and restriction system of
chemicals. In additional, the Company promotes the recycle of package materials constantly. The waste materials which are
generated by each subordinate enterprise can be divided into general industrial solid waste, hazardous waste materials and household
waste materials, and they all handed over to qualified recycler for regular treatment.
The Company focuses on the recycle of water resource and advanced cleaning methods such as adverse cleaning etc are adopted for
processing equipment. Most high purity water and chemicals are recycled, reducing the consumption of high purity water, chemical
and other materials maximally and reducing the discharge of waste water and waste materials.
At present, each subordinate enterprise formulates various management methods such as water pollution management, air pollution
management standard, hazardous waste materials management standard, energy management standard etc. The methods specify the
operation and maintenance regulations and requirements of pollutant treatment system, establish regular monitoring and supervising
mechanism, in order to ensure the continuous stable operation of each system.
In recent years, the environmental emission index of the Company is up to national standards such as Sewage Comprehensive
Discharge Standard, Air Pollutant Comprehensive Emission Standard, Industrial Enterprise Environmental Noise Emission Standard
within Factory Boundary, etc and local standards. The Company will continue to promote the environmental management, devote to
forging green factory and improve environmental management level constantly.
Environmental Impact Assessment on Construction Project and Other Administrative Licenses for Environmental Protection
At present, corresponding environmental impact assessments have been conducted for all construction projects under the control of
the Company in conformity with applicable national and local laws and regulations, and corresponding administrative licenses have
also been obtained.
Contingency Plan for Emergent Environmental Incidents
The Company has formulated and filed corresponding contingency plan for emergent environmental incidents in the environmental
protection agency according to relevant local requirements. However, such contingency plan consists of comprehensive plan, special
plan and on-site disposal plan, and involves various aspects such as waste water, exhaust gas, hazardous wastes and dangerous
chemicals etc. Meanwhile, drills must be conducted regularly.
Self-monitoring Plan
Currently, major pollutant-discharging units subordinated to the Company have worked out corresponding self-monitoring plan
according to relevant requirements put forward by the local environmental protection agency. The self-monitoring plans respectively
formulated by Beijing BOE Display Technology Co., Ltd. and Beijing BOE Optoelectronics Technology Co., Ltd. have been
50
BOE Technology Group Co., Ltd. Annual Report 2018
published via the company’s official website.
Other environment information that should be disclosed
No
Other related environment protection information
No
XIX Other Significant Events
√ Applicable □Not applicable
1. The Company issued Pre-disclosure Announcement on Stock Reduction of Shareholders with More than 5% Stocks
(Announcement No.: 2017-061) and Pre-disclosure Announcement on Stock Reduction of Shareholders with More than 5% Stocks
(Announcement No.: 2017-062) on 22 November 2017 and 25 November 2017 respectively; shareholders of the Company as Hefei
Jianxiang Investment Co., Ltd. and Chongqing Yufu Photovoltaic Industry Investment Co., Ltd. planned to reduce no more than 1.00%
of general capital of the Company by means of centralized competitive bidding within 3 months after 15 working days since the
issuance of each Announcement. Aforementioned stock reduction plans were completed by 15 January 2018 and 19 January 2018
respectively.
2. The Company issued the Announcement on Acquisition of SES-imagotag Stocks (Announcement No.: 2017-036) on 17 June 2017.
The Company proposed to purchase more than 50.01% of SES stocks and realize consolidation of financial statements with SES by
virtue of BOE SPV, which is a joint venture invested and established by BOE’s wholly-owned subsidiary and investment platform
designated by SES management layer. By 16 March 2018, BOE SPV acquired 10,789,186 shares of SES stock in total by means of
block transactions and general offer, occupying 79.94% of SES’ outstanding capital stocks with total consideration of 323,675,580
Euros. For more information, please refer to the Announcement on Completing Acquisition of SES-imagotag Stocks (Announcement
No.: 2018-017) issued by the Company on 17 March 2018.
3. The wholly-owned subsidiary, BOE Technology (Hong Kong) Co., Ltd., filed lawsuits to Beijing Municipal Higher People's Court
against following Defendants: Letv Mobile Intelligent Information Technology (Beijing) Co.,Ltd. (referred to as “Letv Mobile
hereinafter”) , TV Plus Holdings (Beijing) Limited, Leseil Mobile Technology (Beijing) Co.,Ltd. and JiaYueting, with the total
amount of claims being about US$41.84 million. Beijing Municipal Higher People's Court issued Notice of Case Acceptance and
Civil Ruling Paper for property preservation on 6 July 2017 and 31 July 2017 respectively. Letv Mobile raised the jurisdiction
objection to Beijing Municipal Higher People's Court, which was rejected, and also instituted an appeal to the Supreme People's
Court for verdict on jurisdiction objection. At present, it has been waiting for final verdict of the Supreme People's Court. For
receivables corresponding to aforementioned amount of claims, the Company has counted provision for bad debts as per regulations
in accounting standard accordingly; therefore, it has uncertain influences on the Company.
4. The corporate bonds (Phase I) of BOE Technology Group Co., Ltd. issued to public qualified investors from 21 March 2016 to 22
March 2016 reached 3 full years by 21 March 2019. According to regulations, the interest should be paid once per year during the
interest-bearing period. The Company issued Announcement on Payment “16BOE01” Interest 2017 (Announcement No.: 2018-016)
on 16 March 2018, in which the interest should be paid as per the standard of RMB31.5 (tax-inclusive) for every 10 bonds.
5. The Company issued Announcement on 2017 Implementation of Annual Interest Distribution (Announcement No. 2018-046) on
20 June 2018. The annual interest distribution plan 2017 was reviewed and adopted in 2017 Annual General Meeting held on 28 May
2018. According to the distribution plan, the Company shall allocated annual corporate benefits in 2017 by means of RMB0.5 for
every 10 shares (where, the B-share benefit distribution shall be completed with Hong Kong dollar as per conversion rate from RMB
to HKD published by People’s Bank of China on the first working day after Shareholders Meeting of the Company) without
distributing bonus share or transferring shares in the name of public reserve funds.
51
BOE Technology Group Co., Ltd. Annual Report 2018
Index to disclosure website for
Overview of significant events Disclosure date
interim report
Announcement on Investment and Construction of Project of the 6th
generation AMOLED (flexible) production line in Chongqing and 9 March 2018 www.cninfo.com.cn
Related-party Transactions
Announcement on Investment and Construction of Project of Wuhan
Gaoshidai Production Line of Thin Film Transistor LCD and its Auxiliary 9 March 2018 www.cninfo.com.cn
Products
Announcement on Project of Investment into BOE (Suzhou) Industrial Park 9 March 2018 www.cninfo.com.cn
Announcement on Equity Participation on Beijing Electronic Control
31 July 2018 www.cninfo.com.cn
Industrial Investment Co., Ltd and Related-Party Transactions
Announcement on Signature of Cooperation Agreement and Supplemental
9 November 2018 www.cninfo.com.cn
Agreement about Project of Life Science and Technology Industrial Base
Announcement on Signature of Investment Framework Agreement 27 December 2018 www.cninfo.com.cn
XX Significant Events of Subsidiaries
□ Applicable √ Not applicable
52
BOE Technology Group Co., Ltd. Annual Report 2018
Part VI Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
Before Increase/decrease (+/-) After
Item Bonus Bonus issue
Number Percentage New issues Other Subtotal Number Percentage
shares from profit
I. Restricted shares 1,789,918 0.01% 0 0 0 746,475 746,475 2,536,393 0.01%
1. Shares held by the state 0 0.00% 0 0 0 0 0 0 0.00%
2. Shares held by state-owned corporations 0 0.00% 0 0 0 0 0 0 0.00%
3. Shares held by other domestic investors 1,789,918 0.01% 0 0 0 746,475 746,475 2,536,393 0.01%
Among which: shares held by domestic
0 0.00% 0 0 0 0 0 0 0.00%
corporations
Shares held by domestic individuals 1,789,918 0.01% 0 0 0 746,475 746,475 2,536,393 0.01%
4. Shares held by foreign investors 0 0.00% 0 0 0 0 0 0 0.00%
Among which: Shares held by foreign
0 0.00% 0 0 0 0 0 0 0.00%
corporations
Shares held by foreign individuals 0 0.00% 0 0 0 0 0 0 0.00%
II. Non-restricted shares 34,796,608,845 99.99% 0 0 0 -746,475 -746,475 34,795,862,370 99.99%
1. RMB ordinary shares 33,860,495,357 97.30% 0 0 0 -746,475 -746,475 33,859,748,882 97.30%
2. Domestically listed foreign shares 936,113,488 2.69% 0 0 0 0 0 936,113,488 2.69%
53
BOE Technology Group Co., Ltd. Annual Report 2018
3. Overseas listed foreign shares 0 0.00% 0 0 0 0 0 0 0.00%
4. Other 0 0.00% 0 0 0 0 0 0 0.00%
III. Total shares 34,798,398,763 100.00% 0 0 0 0 0 34,798,398,763 100.00%
Reasons for share changes:
□ Applicable √ Not applicable
Approval of share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchase:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the Company’s ordinary shareholders and other financial indicators of the prior year and the
prior accounting period, respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
√ Applicable □ Not applicable
Unit: Share
54
BOE Technology Group Co., Ltd. Annual Report 2018
Restricted shares amount Restricted shares relieved Restricted shares Restricted shares amount Restricted shares
Name of the shareholders Restricted reasons
at the period-begin of the period increased of the period at the period-end relieved date
Shares locked by senior
1,789,918 0 746,475 2,536,393 Capital increase --
executives
Total 1,789,918 0 746,475 2,536,393 -- --
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□ Applicable √ Not applicable
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
□ Applicable √ Not applicable
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III Shareholders and Actual Controller
1. Total Number of Shareholders and Their Shareholdings
Unit: share
Number of ordinary shareholders at 1,437,415（including 1,397,946 A-shareholders and Number of ordinary shareholders at the 1,567,375（including 1,527,778 A-shareholders and
the Period-end 39,469 B-shareholders） month-end prior to the disclosure of this Report 39,597 B-shareholders）
5% or greater shareholders or top 10 shareholders
Name of shareholder Nature of Shareholding Total shares held at Increase/decrease in Restricted shares Unrestricted shares Shares in pledge or frozen
55
BOE Technology Group Co., Ltd. Annual Report 2018
shareholder percentage the period-end the Reporting Period held held Status Shares
Beijing State-owned Capital State-owned legal
11.68% 4,063,333,333 0 0 4,063,333,333 N/A 0
Operation and Management Center person
Chongqing Ezcapital
State-owned legal
Opto-electronics Industry 7.62% 2,653,000,041 -173,500,029 0 2,653,000,041 N/A 0
person
Investment Co., Ltd.
Hefei Jianxiang Investment Co., State-owned legal
7.21% 2,510,142,953 -173,500,000 0 2,510,142,953 N/A 0
Ltd. person
Beijing Yizhuang Investment State-owned legal
3.57% 1,241,423,641 0 0 1,241,423,641 N/A 0
Holdings Co., Ltd person
Beijing BOE Investment & State-owned legal
2.36% 822,092,180 0 0 822,092,180 N/A 0
Development Co., Ltd. person
Hong Kong Securities Clearing
Foreign legal person 1.39% 483,208,365 40,681,113 0 483,208,365 N/A 0
Company Ltd.
Beijing Electronics Holdings Co., State-owned legal
0.79% 273,735,583 0 0 273,735,583 N/A 0
Ltd. person
Central Huijin Assets Management State-owned legal
0.71% 248,305,300 0 0 248,305,300 N/A 0
Co., Ltd person
China Life Insurance Company
State-owned legal
Ltd.-dividends-individual 0.42% 144,840,427 45,490,487 0 144,840,427 N/A 0
person
dividends-005L-FH002 Shen
China Securities Finance State-owned legal
0.38% 132,480,249 -56,087,993 0 132,480,249 N/A 0
Corporation Limited person
Strategic investors or general corporations becoming
top-ten shareholders due to placing of new shares (if any) Naught
(see Note 3)
Related or acting-in-concert parties among the 1. Beijing State-owned Capital Operation and Management Center held 100% equities of Beijing Electronics Holdings Co., Ltd.
56
BOE Technology Group Co., Ltd. Annual Report 2018
shareholders above 2. Beijing Electronics Holdings Co., Ltd. held 66.25% equities of Beijing BOE Investment & Development Co., Ltd. and was its
controlling shareholder.
3. After the non-public issuing of BOE in 2014, Hefei Jianxiang Investment Co., Ltd. and Chongqing Ezcapital Opto-electronics
Industry Investment Co., Ltd, by entering into Implementation Protocol of Voting Right respectively, agreed to maintain all of the
shares held by them respectively unanimous with Beijing BOE Investment & Development Co., Ltd. when executing the voting rights
of the shareholders.
4. After the non-public issuing of the Company in 2014, Beijing State-owned Capital Operation and Management Center handed over
70% of the shares directly held by it to Beijing Electronics Holdings Co., Ltd. for management through Stock Management Protocol,
and Beijing Electronics Holdings Co., Ltd. gained the incidental shareholders’ rights except for disposing right and usufruct of the
shares, of which the rest 30% voting right maintained unanimous with Beijing Electronics Holdings Co., Ltd. through the agreement
according to Implementation Protocol of Voting Right.
5. Except for the above relationships, the Company does not know any other connected party or acting-in-concert party among the top
10 shareholders.
Shareholdings of the top ten unrestricted shareholders
Shares by type
Name of shareholder Number of unrestricted shares held at the period-end
Type Shares
Beijing State-owned Capital Operation and Management
4,063,333,333 RMB ordinary share 4,063,333,333
Center
Chongqing Ezcapital Opto-electronics Industry
2,653,000,041 RMB ordinary share 2,653,000,041
Investment Co., Ltd.
Hefei Jianxiang Investment Co., Ltd. 2,510,142,953 RMB ordinary share 2,510,142,953
Beijing Yizhuang Investment Holdings Co., Ltd 1,241,423,641 RMB ordinary share 1,241,423,641
Beijing BOE Investment & Development Co., Ltd. 822,092,180 RMB ordinary share 822,092,180
Hong Kong Securities Clearing Company Ltd. 483,208,365 RMB ordinary share 483,208,365
Beijing Electronics Holdings Co., Ltd. 273,735,583 RMB ordinary share 273,735,583
Central Huijin Assets Management Co., Ltd 248,305,300 RMB ordinary share 248,305,300
China Life Insurance Company Ltd.-dividends-individual 144,840,427 RMB ordinary share 144,840,427
57
BOE Technology Group Co., Ltd. Annual Report 2018
dividends-005L-FH002 Shen
China securities Finance Corporation Limited 132,480,249 RMB ordinary share 132,480,249
1. Beijing State-owned Capital Operation and Management Center held 100% equities of Beijing Electronics Holdings Co., Ltd.
2. Beijing Electronics Holdings Co., Ltd. held 66.25% equities of Beijing BOE Investment & Development Co., Ltd. and was its
controlling shareholder.
3. After the non-public issuing of BOE in 2014, Hefei Jianxiang Investment Co., Ltd. and Chongqing Ezcapital Opto-electronics
Industry Investment Co., Ltd., by entering into Implementation Protocol of Voting Right respectively, agreed to maintain all of the
Related or acting-in-concert parties among top 10 shares held by them respectively unanimous with Beijing BOE Investment & Development Co., Ltd. when executing the voting rights
unrestricted public shareholders, as well as between top of the shareholders.
10 unrestricted public shareholders and top 10 4. After the non-public issuing of the Company in 2014, Beijing State-owned Capital Operation and Management Center handed over
shareholders 70% of the shares directly held by it to Beijing Electronics Holdings Co., Ltd. for management through Stock Management Protocol,
and Beijing Electronics Holdings Co., Ltd. gained the incidental shareholders’ rights except for disposing right and usufruct of the
shares, of which the rest 30% voting right maintained unanimous with Beijing Electronics Holdings Co., Ltd. through the agreement
according to Implementation Protocol of Voting Right.
5. Except for the above relationships, the Company does not know any other connected party or acting-in-concert party among the top
10 shareholders.
Top 10 ordinary shareholders involved in securities
None
margin trading (if any) (see note 4)
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during the Reporting
Period.
□ Yea √ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a local state-owned legal person
Type of the controlling shareholder: legal person
58
BOE Technology Group Co., Ltd. Annual Report 2018
Legal
Date of Unified social credit
Name of controlling shareholder representative/person in Principal activity
establishment code
charge
Operation and management of state-owned assets within authorization;
communications equipments, audio & visual products for broadcasting and
television; computer and its supporting equipments and the applied products;
Beijing Electronics Holdings Co., electronic raw material and components; home electric appliances and electronic
Wang Yan 8 April 1997 91110000633647998H
Ltd. products; electronic surveying instruments and meters; mechanical and electric
equipments; electronic transportation products and investment in business fields
other than electronics and its management; development of real estate, lease and
sales of commodity apartments; property management.
Beijing Electronic Shareholding Co., Ltd. held 508,801,304 shares of A share of Electronic City (Stock Code: 600658), which was of 45.49% of the total
Controlling shareholder’s holdings shares amount of Electronic City; it held 42,287,460 shares of A share of NAURA Technology Group Co., Ltd. (original Beijing Sevenstar Electronics Co.,
in other listed companies at home Ltd. ) (Stock Code: 002371), which accounted for 9.23% of the total shares of NAURA Technology Group Co., Ltd. Beijing Electronic Shareholding Co.,
or abroad in the Reporting Period Ltd. held 178,175,721 shares of A share of NAURA Technology Group Co., Ltd. through holding the wholly-owned subsidiary Beijing Seven Star Huadian
Technology Group Co., Ltd, which covered 38.90% of the total shares amount of NAURA Technology Group Co., Ltd.
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
59
BOE Technology Group Co., Ltd. Annual Report 2018
3. Actual Controller and Its Acting-in-Concert Parties
Nature of the actual controller: Local institution for state-owned assets management
Type of the actual controller: legal person
Legal
Name of actual controller representative/person in Date of establishment Unified social credit code Principal activity
charge
Operation and management of state-owned assets within authorization;
communications equipments, audio & visual products for broadcasting and
television; computer and its supporting equipments and the applied products;
Beijing Electronics Holdings Co., electronic raw material and components; home electric appliances and
Wang Yan 8 April 1997 91110000633647998H
Ltd. electronic products; electronic surveying instruments and meters; mechanical
and electric equipments; electronic transportation products and investment in
business fields other than electronics and its management; development of real
estate, lease and sales of commodity apartments; property management.
Beijing Electronic Shareholding Co., Ltd. held 508,801,304 shares of A share of Electronic City (Stock Code: 600658), which was of 45.49% of the total
Other listed companies at home or shares amount of Electronic City; it held 42,287,460 shares of A share of NAURA Technology Group Co., Ltd. (original Beijing Sevenstar Electronics Co.,
abroad controlled by the actual Ltd. ) (Stock Code: 002371), which accounted for 9.23% of the total shares of NAURA Technology Group Co., Ltd. Beijing Electronic Shareholding Co.,
controller in the Reporting Period Ltd. held 178,175,721 shares of A share of NAURA Technology Group Co., Ltd. through holding the wholly-owned subsidiary Beijing Seven Star Huadian
Technology Group Co., Ltd, which covered 38.90% of the total shares amount of NAURA Technology Group Co., Ltd.
Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
60
BOE Technology Group Co., Ltd. Annual Report 2018
Ownership and control relations between the actual controller and the Company:
Notes: 1. Beijing Intelligent Kechuang Technology Development Co., Ltd. (Intelligent Kechuang) is used as a platform for the
Company to implement equity incentives for its core technical and managerial personnel, who are the 20 nominal shareholders of
Intelligent Kechuang. The ratios of their capital contributions to Intelligent Kechuang do not represent their actual equity percentage.
The equities of Intelligent Kechuang are jointly owned by the awardees of the Company’s equity incentive plans. The capital
contribution ratios of the said 20 people are as follows: Wang Dongsheng 20%, Jiang Yukun 10%, Liang Xinqing 10%, Zhao
Caiyong 6.667%, Shi Dong 6.667%, Chen Yanshun 6.667%, Song Ying 6.667%, Han Guojian 6.667%, Gong Xiaoqing 3.333%,
Wang Yanjun 3.333%, Wang Jiaheng 3.333%, Liu Xiaodong 3.333%, Ren Jianchang 1.667%, Sun Jiping 1.667%, Zhang Peng
1.667%, Wang Aizhen 1.667%, Mu Chengyuan 1.667%, Xu Yan 1.667%, Hua Yulun 1.667% and Zhong Huifeng 1.667%.
2. When the Company completed a private offering of shares in 2014, Beijing State-Owned Capital Operation and Management
Center transferred its 70% stake directly held in the Company to Beijing Electronics Holding Co., Ltd. for managing through a
Shares Management Agreement, and Beijing Electronics Holding Co., Ltd. obtained the shareholder’s rights other than the disposal
and earnings rights attached to the 70% stake; and Beijing State-Owned Capital Operation and Management Center agreed in a
Voting Rights Exercise Agreement to align itself with Beijing Electronics Holding Co., Ltd. when exercising its voting rights of the
remaining 30% stake directly held by it in the Company.
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.
□ Applicable √ Not applicable
61
BOE Technology Group Co., Ltd. Annual Report 2018
4. Other 10% or Greater Corporate Shareholders
√ Applicable □ Not applicable
Legal
Name of corporate Date of Registered
representative/person Principal activity
shareholder establishment capital
in charge
Beijing State-owned Investment and investment management; assets
30 December RMB35,000
Capital Management Zhang Guilin management; organize the reorganization as well as
2008 million
Administrative Center the merger and acquisition of the enterprise assets.
5. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,
Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
62
BOE Technology Group Co., Ltd. Annual Report 2018
Part VII Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
63
BOE Technology Group Co., Ltd. Annual Report 2018
Part VIII Directors, Supervisors, Senior Management and Staff
I Change in Shareholdings of Directors, Supervisors and Senior Management
Increase in Decrease
Beginning the in the Other Ending
Name Office title Incumbent/Former Gender Age Start of tenure End of tenure shareholding Reporting Reporting increase/decrease shareholding
(share) Period Period (share) (share)
(share) (share)
Chairman of the
Wang Dongsheng Incumbent Male 61 20 May 2016 19 May 2019 299,905 0 0 0 299,905
Board
Vice Chairman of the
Xie Xiaoming Incumbent Male 59 20 May 2016 19 May 2019 7,680 0 0 0 7,680
Board
Vice Chairman of the
Board, Chief of
Chen Yanshun Incumbent Male 52 20 May 2016 19 May 2019 260,000 340,000 0 0 600,000
Executive Committee,
CEO
Wang Chenyang Director Incumbent Male 49 28 May 2018 19 May 2019 0 0 0 0 0
Director, vice
chairman of Executive
Liu Xiaodong Committee, President Incumbent Male 54 20 May 2016 19 May 2019 250,000 0 0 0 250,000
and Chief Operations
Officer
Song Jie Director Incumbent Male 51 20 May 2016 19 May 2019 0 0 0 0 0
Director,executive
Sun Yun Incumbent Female 48 20 May 2016 19 May 2019 155,981 68,000 0 0 223,981
vice president, CFO
64
BOE Technology Group Co., Ltd. Annual Report 2018
Li Yantao Director Incumbent Male 37 28 May 2018 19 May 2019 0 0 0 0 0
Lyu Tingjie Independent director Incumbent Male 63 20 May 2016 19 May 2019 0 0 0 0 0
Wang Huacheng Independent director Incumbent Male 55 20 May 2016 19 May 2019 0 0 0 0 0
Hu Xiaolin Independent director Incumbent Male 40 20 May 2016 19 May 2019 0 0 0 0 0
Li Xuan Independent director Incumbent Male 50 19 August 2016 19 May 2019 0 0 0 0 0
Chairman of the
Yang Xiangdong Supervisory Incumbent Male 57 30 March 2018 19 May 2019 0 0 0 0 0
Committee
Xu Tao Supervisor Incumbent Male 54 20 May 2016 19 May 2019 0 0 0 0 0
Chen Zhaozhen Supervisor Incumbent Male 35 28 May 2018 19 May 2019 0 900 0 0 900
Zhao Wei Supervisor Incumbent Male 50 20 May 2016 19 May 2019 0 0 0 0 0
Shi Hong Supervisor Incumbent Female 36 20 May 2016 19 May 2019 0 0 0 0 0
Zhuang Haoyu Supervisor Incumbent Male 34 20 May 2016 19 May 2019 0 0 0 0 0
Miao Chuanbin Employee supervisor Incumbent Male 45 19 May 2016 19 May 2019 0 1,800 0 0 1,800
Xu Yangping Employee supervisor Incumbent Male 44 19 May 2016 19 May 2019 0 0 0 0 0
He Daopin Employee supervisor Incumbent Male 49 19 May 2016 19 May 2019 0 0 0 0 0
Executive vice
Dong Youmei Incumbent Female 55 20 May 2016 19 May 2019 200,000 26,400 0 0 226,400
president
Executive vice
Yao Xiangjun president, Co-chief Incumbent Male 41 20 May 2016 19 May 2019 100,000 0 0 0 100,000
Operations Officer
Executive vice
Zhang Zhaohong president, Co-chief Incumbent Male 48 20 May 2016 19 May 2019 150,000 178,700 0 0 328,700
Operations Officer
Zhong Huifeng Executive vice Incumbent Male 48 20 May 2016 19 May 2019 150,000 0 0 0 150,000
65
BOE Technology Group Co., Ltd. Annual Report 2018
president, Chief
Human Resource
Officer
Executive vice
Feng Liqiong Incumbent Female 46 20 May 2016 19 May 2019 150,000 50,000 0 0 200,000
president, lead counsel
Senior vice president,
Yue Zhanqiu Chief Information Incumbent Male 51 20 May 2016 19 May 2019 150,000 70,000 0 0 220,000
Officer
Senior vice
president,Chief Risk
Xie Zhongdong Incumbent Male 48 20 May 2016 19 May 2019 110,000 90,000 0 0 200,000
Officer and Auditor
General
Feng Qiang Senior vice president Incumbent Male 42 20 May 2016 19 May 2019 100,000 20,000 0 0 120,000
Senior vice president,
Yang Anle Chief Investment Incumbent Male 48 20 May 2016 19 May 2019 100,000 50,000 0 0 150,000
Officer
Tong Guanshan Senior vice president Incumbent Male 50 20 May 2016 19 May 2019 0 0 0 0 0
Jing Linfeng Senior vice president Incumbent Male 40 20 May 2016 19 May 2019 100,000 45,000 0 0 145,000
Vice president,
Liu Hongfeng Incumbent Male 40 20 May 2016 19 May 2019 100,000 54,500 0 0 154,500
Secretary of the Board
Wang Jing Director Former Female 47 20 May 2016 11 May 2018 0 0 0 0 0
Zhang Jinsong Director Former Male 46 20 May 2016 30 March 2018 0 0 0 0 0
Chairman of the
Chen Ming Supervisory Former Male 61 20 May 2016 1 March 2018 0 0 0 0 0
Committee
Supervisor, Secretary
Mu Chengyuan Former Male 51 20 May 2016 30 March 2018 2,991 0 0 0 2,991
of Supervisory
66
BOE Technology Group Co., Ltd. Annual Report 2018
Committee
Total -- -- -- -- -- -- 2,386,557 995,300 0 0 3,381,857
II Change of Directors, Supervisors and Senior Management
√Applicable □ Not applicable
Name Office title Type of change Date of change Reason for change
Chen Ming Chairman of Supervisory Committee Left 1 March 2018 Resignation
Zhang Jinsong Director Left 30 March 2018 Resignation
Mu Chengyuan Supervisor, Secretary of Supervisory Committee Left 30 March 2018 Resignation
Wang Jing Director Left 11 May 2018 Resignation
Yang Xiangdong Chairman of Supervisory Committee Appointed and dismissed 30 March 2018 Elected
Li Yantao Director Appointed and dismissed 28 May 2018 Elected
Chen Zhaozhen Supervisor Appointed and dismissed 28 May 2018 Elected
Wang Chenyang Director Appointed and dismissed 28 May 2018 Elected
67
BOE Technology Group Co., Ltd. Annual Report 2018
III Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors, supervisors and
senior management
Director
Mr. Wang Dongsheng, Master of Engineering, financial experts and system engineering experts, founder of BOE, ever took the
posts of Chairman of 1st and 2nd Board of Directors as well as president, and Chairman of the 3rd Board of Directors of the Company,
as well as Chief of Executive Committee, CEO, the Chairman of the 4th Board of Directors of the Company and Chief of Executive
Committee, the Chairman of the 5th Board of Directors of the Company and Chief of Execution Committee and Chairman of the 6th
Board of Directors, Chief of Execution Committee of the Company, and the Chairman of the 7th Board of Directors, Chief of
Execution Committee of the Company.
Now he takes the posts of Chairman of the 8th Board of Directors, meanwhile Vice President of China Optics and Optoelectronics
Manufactures Association and Chairman of China Optics and Optoelectronics Manufactures Association LCB, etc.
Mr. Wang Dongsheng led the incorporation of BOE in 1993, and made BOE become a leading enterprise in the field of global
display. He first put forward the concept of semiconductor display industry in the global industry. Also in 2010, he put forward life
principle of display industry which was known as” Mr. Wang Principle”.
Mr. Wang Dongsheng once was awarded "China Top Ten Mergers and Acquisitions Personage”, “Chinese Top Ten Smartfortune
Personage”, “China's information industry leader”,” The most influential leader of listed companies” , “The National May 1 Labor
Medal” and other honorary titles.
Mr. Xie Xiaoming, MBA, a senior engineer at professor grade. He had ever taken the posts of Director of 821 Workshop of Beijing
Tube Factory, Plant Manager of First Branch Factory of Beijing Tube Factory, Deputy GM of Beijing Orient Electronics Group Co.,
Ltd, General Manager and Director of Beijing Yandong Microelectronics Co., Ltd, Director of Beijing Dongguang Micro Electronics
Co., Ltd, Party Secretary of Beijing Semiconductor Devices Fifth Factory, and Vice Chairman of the 7th Board of Directors.
Now he takes the posts of Vice Chairman of the 8th Board of Director of the Company, Vice President of Beijing Electronics Holding
Co., Ltd, Chairman of Beijing Yandong Microelectronics Co., Ltd.
Mr. Chen Yanshun, Master of Economics, senior accountant, he had served in the Company from the year of 1993, has taken the
posts of Secretary of the Board of the 1st Board of Directors of the Company, Secretary of the 2nd Board of Directors and Vice
President, Executive Director of the 3rd Board of Directors and Senior Vice President, Executive Director of the 4th, 5th and the 6th
Board of Directors and President, and Vice Chairman of the 7th Board of Directors and President, and Chairman of the Board of
Beijing BOE Vision-electronic Technology Co., Ltd, Beijing BOE Optoelectronics Technology Co., Ltd, Hefei BOE Optoelectronics
Technology Co., Ltd, Ordos Yuansheng Optoelectronics Co., Ltd., Chongqing BOE Optoelectronics Technology Co., Ltd. and
Beijing Intelligent Kechuang Technology Development Co., Ltd.
Now he takes the posts of Vice Chairman of the 8th Board of Directors of the Company and Chief of Executive Committee (CEO),
Chairman of the Board of Hefei Xinsheng Optoelectronics Technology Co., Ltd., BeijingMatsushita Color CRT Co., Ltd, BOE
Optoelectronics Technology Co., Ltd. and BOE Technology (Hong Kong) Co., Ltd., and Director of BOE Health Investment
Management Co., Ltd.
Mr. Wang Chenyang, Master of Arts, senior political division. He has served as principal staff member and vice consultant of
Division of Publicity & Education &Political and Legislative Affairs of Organization Department in Beijing Municipal Committee,
division-head level and deputy-bureau level cadre in the General Office of Beijing Municipal Government.
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BOE Technology Group Co., Ltd. Annual Report 2018
Now he takes the posts of Director of the 8th Board of Directors of the Company and Deputy GM of Beijing State-owned Capital
Management Center.
Mr. Liu Xiaodong, Bachelor’ degree, Engineer, he ever worked in Research Institute of Beijing Information Optics Apparatus. He
successively took the posts of Director, Deputy General Manager and Secretary of CPC of Beijing Matsushita Color CRT Co., Ltd.,
Vice President of the Company and concurrently Director and General Manager of Beijing BOE Optoelectronics Technology Co.,
Ltd., Director and General Manager of Hefei BOE Optoelectronics Technology Co., Ltd. Chairman of the Board of Beijing BOE
Vision-electronic Technology Co., Ltd. and GM of Hefei Xinsheng Optoelectronics Technology Co., Ltd., Deputy Chairman of the
Board of Chongqing BOE Optoelectronics Technology Co., Ltd., President of Beijing BOE Multimedia Science and Technology Co.,
Ltd. and Beijing BOE Technology Wisdom Commerce Co., Ltd, Director of the 7th Board of Directors, Executive Vice President and
COO of the Company
Now he takes the posts of Director of the 8th Board of Director, Executive Vice President, President and COO of the Company,
Chairman of Mianyang BOE Optoelectronics Technology Co., Ltd., Chongqing BOE Display Technology Co., Ltd., Wuhan BOE
Optoelectronics Technology Co., Ltd., Kunming BOE Display Technology Co., Ltd. and Beijing BOE Sensor Technology Co., Ltd.,
Director of Hefei Xinsheng Optoelectronics Technology Co., Ltd, and TPV Display Technology (China) Co., Ltd.
Mr. Song Jie, Senior Economist, MBA of Peking University, Countries travelled visiting scholar of University of Sydney from Feb,
2005 to Mar. 2006. He once worked as Assistant Engineer of Design Institute Wire Plant of Shougang Corporation, Officer of
Project examination and approval of Beijing Economic and Technological Development Zone Management Committee, Officer of
Foreign Investment Service Center, the Director of Yi Da Tong Paging Center, Deputy General Manager of Chinese Human Genome
Research Center, Beijing (SinoGenoMax Co., Ltd.), Project Manager of East Zone Sewage project of Beijing Yizhuang Investment
Holdings Co., Limited, Director of the 7th Board of Directors of the Company.
Now he is the Director of the 8th Board of Directors of the Company, Manager of Department of Investment Development of Beijing
Yizhuang Investment Holdings Co., Limited.
Ms. Sun Yun, Master of Business, a Senior Accountant. She successively took the posts of Deputy Chief, Chief of Finance
Department of the Company, as well as Deputy CFO and Chief Auditor of the Company.
Now she is Director of the 8th Board of Directors, Executive Vice President and CFO of the Company, Director of Beijing BOE Land
Co., Ltd., Director of Beijing Yinghe Century Science & Technology Development Co., Ltd., Director of BeijingMatsushita Color
CRT Co., Ltd.
Mr. Li Yantao, bachelor of engineering, MBA in Financial Accounting of Tsinghua University-Chinese University of Hong Kong
(be reading). He once worked as an engineer of Module Technology Department and Section Chief of Public Relations of
Administrative Security Department in Beijing BOE Optoelectronics Technology Co., Ltd., Section Chief of Tender Approval of
Commerce Group, noviate vice minister of Engineering Cost Control Department and Bidding Contract Management Section of
Engineering Cost Control Department in Beijing BOE Display Technology Co., Ltd., Secretary of Youth League Committee, minister
of Corporate Culture/Party Work Department of Corporate Culture Centre and Chief of Corporate Culture Section and Group Work
Section, Vice Minister (Assistant Director Level) of Planning & Coordination Department and Director of Office for Promotion of
Major Projects, Minister of Market & New Business Planning Department, Head of Planning & Coordination Centre (Deputy
Director Level) and Minister of Market Insight Department, Minister of Strategic Planning Department, Minister of Performance
Management Department, Minister of Office for Promotion of Major Projects and Minister of Knowledge Management & Training
Department in the Company.
Now he serves as the Director of the 8th Directors of the Board of the Company, Director of Strategic Development Department of
Beijing Electronics Holdings Co., Ltd., Director and GM of Beijing Electronic Control Industry Investment Co., Ltd. and Director of
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BOE Technology Group Co., Ltd. Annual Report 2018
Office for Promotion of Old Industrial Base Transformation in Beijing Electronics City.
Independent Director
Mr. Lyu Tingjie, Doctor Degree, Professor and Doctorial Tutor, Assistant, Lecturer, Associate Professor, Professor, Doctorial Tutor,
Vice Dean, Standing vice President and President, and Assistant Principal of Beijing University of Posts and Telecommunications.
Social part-time job: Executive Director of Union International Telecommunications, Vice Chairman of Information Economy
Society of China, Deputy Director of the Ministry of Education Electronic Commerce Teaching Committee, Standing Director of
China Institute of Communications (Director of the Communication Management Branch) Standing Director of China Association of
Communication Enterprises, Standing Director of Chinese Research Council of Technical Economy (Director of Communications
Technology and Economy), Member of Ministry of Industry and Information Science Committee and Telecom Economic Experts
Committee. He was once the Independent Director of the 7th Board of Directors of the Company
Now he is the independent director of the 8th Board of Directors of the Company. He has been working in Beijing University of Posts
and Telecommunications since May 1985, and he acts as the Independent Director of Gohigh Data Networks Technology Co., Ltd,
Shenzhen Ai Shide Co., Ltd. and China Unicom.
Mr. Wang Huacheng, Doctoral Candidate Degree, Professor Doctoral Supervisor, In July 1985, graduate from Department of
Finance, Renmin University of China, obtained bachelor of economics degree, in July 1988, graduated from Department of
Accounting, Renmin University of China, obtained master's degree in economics, in July 1998,graduated from Department of
Accounting, Renmin University of China, obtained PhD degree. Since September 1988, worked as a teacher in Renmin University of
China, He successively worked as teaching assistant, lecturer, associate professor, professor, PhD supervisor, social appointments:
Director of the institute of Chinese accounting. He once was the Independent Director of the 7th Board of Directors of the Company
Now he is the Independent Director of the 8th Board of Directors of the Company, HXB and China Railway Construction
Corporation Limited.
Mr. Hu Xiaolin, doctor, associate professor of Tsinghua University, artificial intelligence professor.
Now he serves as Senior Member of Institute of Electrical and Electronics Engineers (IEEE), Editorial Board Member of IEEE
Transactions on Neural Networks and Learning Systems, Independent Director of 8th board of directors and Director of Beijing
Lingdongyin Technology Co., Ltd.
Mr. Li Xuan, doctor of laws, associate professor, graduate student tutor. He once worked as the Vice Dean and Vice President of
School of Law of Central University of Finance and Economics, Chief of Central University of Finance and Economics Legal Affairs
Office, Independent Director of Beijing Da Bei Nong Science and Technology Group Co., Ltd.
Now he serves as the Independent Director of the 8th board of directors of the Company, Chief of Central University of Finance and
Economics Master of Laws (J.M) Education Center, Deputy Chief of Public Policy-Making Research Center of Central University of
Finance and Economics, Deputy Chief of Committee for Social and Legal Affairs of Beijing Municipal Committee of the CDL,
Secretary General of Case Study Association of China Law Society, Executive Director of Law Society of China Law Society,
Independent Director of China Shengmu Organic Milk Limited (listed in Hong Kong Exchange) and Independent Supervisor of
China National Building Materials Company Limited (listed in Hong Kong Exchange), and part-time arbitrator and lawyer.
Supervisor
Mr. Yang Xiangdong, postgraduate. He once worked as chief of Technology Security Section, minister of Sales Department and
minister of Materials Department in Beijing TV Accessories Third Factory, Deputy GM of Beijing Jile Electronics Group Co., Ltd.,
Deputy GM of Beijing Sevenstar Electronics Co., Ltd., and Deputy GM of Beijing North Microelectronics Co., Ltd.
70
BOE Technology Group Co., Ltd. Annual Report 2018
Now he serves as the Chairman of the 8th Supervisory Committee (convener), Chairman of Supervisory Committee of Beijing
Zhaowei Electronic (Group) Co., Ltd., Chairman of Supervisory Committee of Beijing Yandong Microelectronics Co., Ltd.,
Chairman of Supervisory Committee of Beijing Seven Star Huadian Technology Group Co., Ltd., supervisor of Beijing Electronics
Holding & SK Technology Co., Ltd., supervisor of Beijing Electronics New Energy Technology (Jiangsu) Co., Ltd. and supervisor
of BEST.
Mr. Xu Tao, master degree, Senior Accountant, Minister of Finance Department of Beijing TV Accessories Third Factory, Chief
Accountant and CFO of Beijing Jile Economics Group Co., Ltd, Minister of Finance Department of Beijing Electronics Holding Co.,
Ltd. and Supervisor of the 7th Supervisory Committee of the Company.
Currently, he serves as the Supervisor of the 8th Supervisory Committee of the Company, Director of the Financial/Accounting
Center of Beijing Electronics Holdings Co., Ltd. and Chairman of the Board of Beijing BOE Investment & Development Co., Ltd.
Mr. Chen Zhaozhen, Master of Science. He once worked as a technician and vice minister of Wafer Department and vice minister
of Strategic Development Department of Beijing Yandong Microelectronics Co., Ltd. and assistant minister of Technological
Industry Department in Beijing Electronics Holdings Co., Ltd.
Now he serves as a supervisor of the 8th Supervisory Committee of the Company and Deputy Director of Semiconductor Department
in Beijing Electronics Holdings Co., Ltd.
Mr. Zhao Wei, Bachelor, Joined the Communist Party of China in 2001, he successively worked as Manager of Financial
Department of Hefei City Construction Investment Co., Ltd. Deputy Minister, Minister of Financial Department and Minister of
Financing Department of Hefei City Construction Investment Co., Ltd, Supervisor of the 7th Supervisory Committee of the Company
and Member of CPC Committee, Director, Deputy GM of Hefei City Construction Investment Co., Ltd..
Now he is the Supervisor of the 8th Supervisory Committee of the Company, Deputy Secretary of CPC Communist Party of China
and Director of Hefei New Municipal and Cultural District Investment Co., Ltd.
Ms. Shi Hong, Master of Economics, Senior Economist, Supervisor of the 7th Supervisory Committee of the Company.
Now he is the Supervisor of the 8th Supervisory Committee of the Company, worked as Deputy Manager in Department of Investment
Development of Beijing Yizhuang Investment Holdings Limited. Member of Investment Decision Committee of China Reform Fund
Management Co., Ltd. Director of Beijing Jinyuan Jingkai Limited Liability Company for Sewage Treatment and Supervisor of
Beijing Boda Xinyuan House Real Estate Development Co., Ltd..
Mr. Zhuang Haoyu, Bachelor, he once worked as Project Assistant, Investment Manager, Senior Investment Manager of Beijing
Industrial Development Investment Management Co., Ltd, and Supervisor of the 7th Supervisory Committee of the Company.
Now he is Senior Investment Manager of SENSEGAIN ASSET MANAGEMENT Co., Ltd.
Mr. Miao Chuanbin, Master degree, once worked as Manager of Market Department Beijing Wireless Power Plant Putai
Technology Company, Secretary of Party Committee Work Department and Deputy Secretary of Beijing Wireless Power Plan,
Deputy General Manager of Beijing Ether-led Electronic Group Co., Ltd., Secretary of Party Committee Work Department,
Enterprise Minister of Culture of Beijing Electronics Holdings Co., Ltd, Employee Supervisor of the 7th Supervisory Committee of
the Company.
Now he is the Employee Supervisor of the 8th Supervisory Committee of the Company, Vice Secretary of Party Committee, Secretary
of the Commission for Discipline Inspection, Union Chairman and Chief Officer of Culture, Deputy Chairman of Beijing Industry
(National Defense) Labor Union, member of Beijing Electronic Union and member of the Commission for Discipline Inspection in
71
BOE Technology Group Co., Ltd. Annual Report 2018
Beijing Electronics Holding Co., Ltd.
Mr. Xu Yangping, Master of Civil and Commercial Law. He was former Deputy Minister, Minister of the Company’s Legal
Department, and Employee Supervisor of the 7th Supervisory Committee of the Company.
Now he acts as Employee Supervisor of the 8th Supervisory Committee of the Company, Minister and Deputy Director of the
Company’s Legal Department and Organization, Senior Chief Officer and the Director of Board of Directors of Gaochuang (Suzhou)
Electronics Co., Ltd, Director of Beijing BOE Energy Technology Co., Ltd., Supervisor of Beijing BOE Vacuum Electric Appliance
Co., Ltd and Beijing BOE Technology Development Co., Ltd.
Mr. He Daopin, master. He once worked as Production Supervisor, Purchasing Supervisor, Financial Manager, Vice General
Manager of Beijing Oriental Aristocratic Paper Co., Ltd., Vice General Manager, General Manager of Industrial Gas Underwriting
Company of Business Department of Park of the Company, Management Representative of Business Department of Park, Chief of
HR and Administrative Department, Chief of Property Department and Chief of Labor Union, Deputy Chief, Chief of Party Mass
Work Department of the Company, Corporate Cultural Center.
He now serves as Employee Supervisor of the 8th board of supervisors of the Company, Chairman of Labor Union of Beijing BOE
Display Technology Co., Ltd., Secretary of Committee for Discipline Inspection, Deputy Chief of Party Mass Work Department,
Chief of Corporate Cultural Center, Head of Corporate Culture of Beijing Area and DAS BG.
Senior Management
Ms. Dong Youmei, she successively took the posts of Deputy Chief of New Product Development Division of Shuguang
Electronic Group Co., Ltd., Deputy Chief of Liquid Crystal Center in Tsinghua University, and Strategic Technical Officer
of the Company, CTO and Executive Vice President of the Company.
Now she serves as Executive Vice President of the Company and Member of Advisory Committee for the State Information.
Mr. Yao Xiangjun, MBA, Chinese CPA. He once worked as Minister and Chief Inspector of Financing
Department of the Company, CFO of Hefei BOE Optoelectronics Technology Co., Ltd., Director of Business Planning
Center, Chief Strategic Officer of the Company, CEO of Intelligent System Business Group.
Now he serves as Executive Vice President and Co-Chief Operating Officer of the Company, Director of SES-imgotag, and
Chairman of the Board of Beijing BOE Video Technology Co., Ltd., Beijing BOE Smart Commerce Co., Ltd., Beijing BOE Yiyun
Technology Co., Ltd., and BOE Smart Retail (Hong Kong) Co., Limited.
Mr. Zhang Zhaohong, bachelor of inorganic nonmetallic materials, engineer. He joined in the Company in 1992, he once worked as
Chairman of the Board of Beijing BOE Optoelectronics Technology Co., Ltd., Chengdu BOE Optoelectronics Technology Co., Ltd.,
Hefei BOE Optoelectronics Technology Co., Ltd., Beijing BOE Display Technology Co., Ltd., Erdos Yuansheng Optoelectronics Co.,
Ltd., Fuzhou BOE Optoelectronics Technology Co., Ltd. and BOE (Hebei) Mobile Display Technology Co., Ltd., Director of Wuhan
BOE Optoelectronics Technology Co., Ltd., GM of Beijing BOE Display Technology Co., Ltd., Chinese GM of Beijing Asahi Glass
Co., Ltd., GM of Chengdu BOE Optoelectronics Technology Co., Ltd. and Chief Operations Officer of BOE Display Device
Business Group.
Now he serves as the Executive Vice President and Co-Chief Operations Officer of the Company, Chairman of the Board of BOE
Health Investment Management Co., Ltd., and Vice President of Beijing BOE Sensor Technology Co., Ltd.
Mr. Zhong Huifeng, Master Degree, awarded certification on Secretary of the Board of Shenzhen Stock Exchange. He ever took
posts of Securities Affairs Representative and Manager of Security Department of the 2nd Board of Directors, Secretary to the Board
72
BOE Technology Group Co., Ltd. Annual Report 2018
of the 3rd, 4th and 5th Board of Directors of the Company, Employee Supervisor of the 6th Supervisory Committee and Employee
Supervisor of the 7th Supervisory Committee, Supervisor of Beijing Orient Top Victory Electronics Co., Ltd.. and Vice Secretary of
the CPC, Secretary of Discipline Inspection Commission and Principal of Labor Union of the Company, member of the Third
National Committee of China’s Defense of Posts and Telecommunications Union.
Now he acts as Executive Vice President and CHO of the Company and President of BOE University.
Ms. Feng Liqiong, Bachelor Degree and Lawyer of the Company, she has served as Senior Vice President and Minister of Legal
Affairs Department of the Company, and as Secretary of the 5th and 6th Board of Directors.
Now she is Executive Vice President, Chief Counsel and Director of Beijing BOE Land Co., Ltd. and Beijing Yinghe Science &
Century Technology Development Co., Ltd.
Mr. Yue Zhanqiu, obtained EMBA in CEIBS, Senior Accountant. He ever took post of Chief and Chief Accountant of Finance
Section of Power Business Department, Financial Manger of Beijing Huamin Smart Card System Co., Ltd., CFO of Beijing Seven
Star Electronics Co., Ltd., CFO and Secretary to the Board of Beijing Seven Star Science & Technology Co., Ltd., and CFO, Deputy
General Manager, General Manager of Beijing BOE Optoelectronics Technology Co., Ltd..
Now he acts as Senior Vice President and CIO of the Company.
Mr. Xie Zhongdong, Master, CIA. He has ever taken posts of Deputy Chief of Basic Construction Office in the Yi-Shu-Si Water
Conservancy Administration of Huaihe Water Resources Commission under the Ministry of Water Resource of P.R.C, Chief and
Deputy Auditor of Auditing & Supervision Division of the Company, Vice Chief and Chief of Auditing & Supervision Division of
Beijing BOE Optoelectronics Technology Co., Ltd.
Now he acts as Senior Vice President, Chief Risk Control Officer and Chief Auditor of the Company, Vice President of Beijing
Internal Audit Association, Supervisor of Beijing BOE Optoelectronics Technology Co., Ltd., Beijing BOE Display Technology Co.,
Ltd., Erdos Yuansheng Optoelectronics Co., Ltd., Chongqing BOE Optoelectronics Technology Co., Ltd., Hefei BOE
Optoelectronics Technology Co., Ltd., Chengdu BOE Optoelectronics Technology Co., Ltd., Chongqing BOE Display Technology
Co., Ltd., Beijing BOE Sensor Technology Co., Ltd., Beijing BOE Video Technology Co., Ltd., Gaochuang (Suzhou) Electronics Co.,
Ltd., Hefei BOE Video Technology Co., Ltd. and BOE Health Investment Management Co., Ltd.
Mr. Feng Qiang, MBA, master of engineering. He joined in the Company in 1998. He once worked as Vice General Manager of
Science & Technology Park Business Head Office of the Company, Executive Director and General Vice General Manager of
Beijing BOE Land Co., Ltd., Executive Director and Vice General Manager of Beijing Yinghe Century Land Co., Ltd.
Now he works as Senior Vice President, Chief Executive Officer of Health Service Business Group of the Company, Chairman of
Beijing BOE Land Co., Ltd., Chairman of Beijing Yinghe Century Land Co., Ltd., Director of BOE Health Investment Management
Co., Ltd., Chairman of the Board of BOE Regenerative Medical Technologies Co. Ltd. an General Manager of Beijing Matsushita
Color CRT Co., Ltd.
Mr. Yang Anle, master. He once worked as Deputy Chief of Financial Division of Beijing Electronic Tube Factory, Manager of
Financial Department of Beijing BOE Investment & Development Co., Ltd., Chief Financial Officer of Beijing Dongdian Industrial
Development Co., Ltd., Supervisor of the 2nd, 3rd, 4th Board of Supervisors of the Company, Employee Supervisor of 5th, 6th
Board of Supervisors.
He now serves as Senior Vice President of the Company, Chief Investment Officer, Chairman of Beijing North Asahi Electronic
Glass Co., Ltd., Chairman of Beijing Rishen Electronic Precise Parts Co., Ltd., Chairman of Beijing Nittan Electronics Co., Ltd.,
Director of Beijing BOE Optoelectronics Technology Co., Ltd., Director of Chengdu BOE Optoelectronics Technology Co., Ltd.,
73
BOE Technology Group Co., Ltd. Annual Report 2018
Director of Hefei BOE Optoelectronics Technology Co., Ltd., Director of Beijing BOE Display Technology Co., Ltd., Director of
Erdos Yuansheng Optoelectronics Co., Ltd., Director of Chongqing BOE Optoelectronics Technology Co., Ltd., Director of Hefei
BOE Display Technology Co., Ltd., Director of Fuzhou BOE Optoelectronics Technology Co., Ltd., Director of BOE
Optoelectronics Technology Co., Ltd., Director of Hefei BOE Hospital Co., Ltd., and Director of Beijing BOE Vacuum Electric Co.,
Ltd.
Mr. Tong Guanshan, doctor of computer science of University of Chicago (Ph.D.) and MBA of Massachusetts Institute of
Technology (MBA). He once worked in IBM Global Headquarter. He was in charge of IBM global mergers and acquisitions,
divestitures and strategic alliances and building of partnerships. He acted as leader for several research & development groups in
IBM global research and development department.
He now serves as Senior Vice President of the Company.
Mr. Jing Linfeng, bachelor. He once worked as the sales director of Beijing BOE Optoelectronics Technology Co., Ltd., GM of NB
SBU, Chief Strategy Officer and CEO of Smart System Group in the Company.
Now he serves as the Senior Vice President and CEO of IoT Solution BG in the Company, Chairman of the Board of Beijing BOE
Multimedia Science and Technology Co., Ltd., Chairman of the Board of BOE Intelligent Technology Co., Ltd., Director of
SES-imagotag and Director of BOE Smart Retail (Hong Kong) Co., Limited.
Mr. Liu Hongfeng, master. He once worked as the Deputy Chief of the Finance Department of the Company, the Deputy Chief and
Chief of the BOD Office, the Securities Representative and the Secretary of the 7th Board of the Company.
Now he is a vice president and the Board Secretary of the Company, as well as a director of Beijing Nissin Electronics Precision
Component Co., Ltd. and Supervisor of Beijing Yinghe Century Land Co., Ltd.
Offices held concurrently in shareholding entities:
√Applicable □Not applicable
Remuneration
or allowance
Office held in the End of
Name Shareholding entity Start of tenure from the
shareholding entity tenure
shareholding
entity
Beijing Electronics
Xie Xiaoming Vice president 22 June 2011 Naught Yes
Holdings Co., Ltd.
Beijing State-owned Capital
Wang Chenyang Vice GM 19 November 2014 Naught Yes
Management Center
Beijing State-owned Capital
Wang Jing Vice GM 26 January 2014 Naught Yes
Management Center
Beijing Electronics
Zhang Jinsong Director and GM 31 July 2018 Naught Yes
Holdings Co., Ltd.
Beijing BOE Investment & Deputy Chairman of the
Zhang Jinsong 23 December 2015 9 April 2018 No
Development Co., Ltd. Board
Beijing Yizhuang
Manager of Investment
Song Jie Investment Holdings 23 August 2018 Naught Yes
Development Department
Limited
74
BOE Technology Group Co., Ltd. Annual Report 2018
Beijing Electronics Minister of Strategic
Li Yantao 12 August 2016 Naught Yes
Holdings Co., Ltd. Department
Full-time Chairman of the
Beijing Electronics
Yang Xiangdong Dispatched Supervisory 17 April 2015 Naught No
Holdings Co., Ltd.
Committee
Deputy Director of
Beijing Electronics 17 January
Chen Zhaozhen Semiconductor 1 March 2016 Yes
Holdings Co., Ltd. 2019
Department
Beijing Electronics Minister of Investment
Mu Chengyuan 1 June 2011 3 July 2018 Yes
Holdings Co., Ltd. Securities Department
Beijing BOE Investment &
Mu Chengyuan Director, Vice president 14 December 2012 9 April 2018 No
Development Co., Ltd.
Beijing Electronics
Xu Tao Finance Minister 26 October 2012 Naught Yes
Holdings Co., Ltd.
Beijing BOE Investment &
Xu Tao Chairman of the Board 9 April 2018 Naught No
Development Co., Ltd.
Beijing Yizhuang Deputy Manager of
Shi Hong, Investment Holdings Investment Development 23 August 2018 Naught Yes
Limited Department
Notes to post-holding
The documents for holding the posts of shareholders entities haven’t listed the expiry date.
in shareholder’s unit
Offices held concurrently in other entities:
√Applicable □Not applicable
Remuneration or
Office held in the End of
Name Other entity Start of tenure allowance from
entity tenure
the entity
Beijing University of Posts and
Lyu Tingjie Doctor Advisor -- -- Yes
Telecommunications
Wang Huacheng Renmin University of China Doctor Advisor -- -- Yes
Associate --
Hu Xiaolin Tsinghua University -- Yes
professor
The Central University of Finance Post-graduate --
Li Xuan -- Yes
and Economics Tutor
Director and --
Deputy Secretary
Hefei New Municipal and Cultural
Zhao Wei of CPC 5 September 2018 Yes
District Investment Co., Ltd.
Communist Party
of China
Notes to post-holding Due to the above personnel’s units were special, their start dates and ending dates of the office terms have
in other unit not been fixed.
75
BOE Technology Group Co., Ltd. Annual Report 2018
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior
management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
IV Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior
management:
(1) Determining Basis and Decision-making Procedure of Remuneration of Directors, Supervisors and Senior Management
Proposal on Principle of Recognition of Remunerations for Directors, Supervisors and Senior Management was reviewed and
approved by the 2005 Annual General Meeting held on 29 May 2006. The Proposal on Adjustment of Allowance for Directors and
Supervisors of the Company was reviewed and approved at the 2nd Extraordinary General Meeting of 2013 held on 10 July 2013.
(2) Up to the end of the Reporting Period, the current directors, supervisors and senior management drew their remuneration from the
Company totaled RMB66.4855 million (before tax). Allowance for independent directors is RMB150,000 (before tax) per year in
2018. For details please referred to the statement below.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB'0,000
Total before-tax Any
Incumbent/Form remuneration remuneration
Name Office title Gender Age
er from the from related
Company party
Wang Dongsheng Chairman of the Board Male 61 Incumbent 401.1 No
Xie Xiaoming Vice Chairman of the Board Male 59 Incumbent 0
Vice Chairman of the Board, Chief
Chen Yanshun Male 52 Incumbent 585.89 No
of Executive Committee, CEO
Wang Chenyang Director Male 49 Incumbent 0
Director, vice chairman of
Liu Xiaodong Executive Committee, President Male 54 Incumbent 545.74 No
and Chief Operations Officer
Song Jie Director Male 51 Incumbent 0
Director,executive vice
Sun Yun Female 48 Incumbent 397.89 No
president,CFO
Li Yantao Director Male 37 Incumbent 0
Lyu Tingjie Independent director Male 63 Incumbent 15
Wang Huacheng Independent director Male 55 Incumbent 15
Hu Xiaolin Independent director Male 40 Incumbent 15
Li Xuan Independent director Male 50 Incumbent 15
Chairman of the Supervisory
Yang Xiangdong Male 57 Incumbent 0
Committee
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BOE Technology Group Co., Ltd. Annual Report 2018
Xu Tao Supervisor Male 54 Incumbent 0
Chen Zhaozhen Supervisor Male 35 Incumbent 0
Zhao Wei Supervisor Male 50 Incumbent 0
Shi Hong Supervisor Female 36 Incumbent 4
Zhuang Haoyu Supervisor Male 34 Incumbent 8
Miao Chuanbin Employee supervisor Male 45 Incumbent 142.15 No
Xu Yangping Employee supervisor Male 44 Incumbent 114.62 No
He Daopin Employee supervisor Male 49 Incumbent 81.51 No
Dong Youmei executive vice president Female 55 Incumbent 655.99 No
executive vice president, Co-chief No
Yao Xiangjun Male 41 Incumbent 355.99
Operations Officer
executive vice president, Co-chief No
Zhang Zhaohong Male 48 Incumbent 615.35
Operations Officer
executive vice president, Chief No
Zhong Huifeng Male 48 Incumbent 347.34
Human Resource Officer
executive vice president, lead No
Feng Liqiong Female 46 Incumbent 346.83
counsel
Senior vice president, Chief No
Yue Zhanqiu Male 51 Incumbent 303.83
Information Officer
Senior vice president,Chief Risk No
Xie Zhongdong Male 48 Incumbent 295.09
Officer and Auditor General
Feng Qiang Senior vice president Male 42 Incumbent 274.31 No
Senior vice president, Chief No
Yang Anle Male 48 Incumbent 338.92
Investment Officer
Tong Guanshan Senior vice president Male 50 Incumbent 278.88 No
Jing Linfeng Senior vice president Male 40 Incumbent 276.85 No
Vice president, Secretary of the No
Liu Hongfeng Male 40 Incumbent 218.27
Board
Wang Jing Director Female 47 Left 0
Zhang Jinsong Director Male 46 Left 0
Chairman of the Supervisory
Chen Ming Male 61 Left 0
Committee
Supervisor, Secretary of
Mu Chengyuan Male 51 Left 0
Supervisory Committee
Total -- -- -- -- 6,648.55 --
Equity incentives for directors, supervisors and senior management in the Reporting Period:
□ Applicable √ Not applicable
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BOE Technology Group Co., Ltd. Annual Report 2018
V Employees
1. Number, Functions and Educational Backgrounds of Employees
Number of in-service employees of the Company as the parent 2,606
Number of in-service employees of major subsidiaries 59,696
Total number of in-service employees 68,175
Total number of paid employees in the Reporting Period 68,175
Number of retirees to whom the Company as the parent or its
23
major subsidiaries need to pay retirement pensions
Functions
Function Employees
Production 40,325
Sales 2,185
Technical 22,272
Financial 690
Administrative 533
Manager 1,812
Other 358
Total 68,175
Educational backgrounds
Educational background Employees
Doctor and post-doctorate 401
Master 8,878
Bachelor 17,076
College 17,882
Technical secondary school 10,013
Other 13,925
Total 68,175
2. Employee Remuneration Policy
The Company has established the remuneration system based on the position, ability and business performance, paid attention to the
external competitive compensation and internal fairness, strengthening the control of the group as well as considering the difference
among all business groups and subsidiaries.
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BOE Technology Group Co., Ltd. Annual Report 2018
3. Employee Training Plans
For the purpose that exploiting and inheriting the intelligent assets with BOE genes and forming the talent cultivation mode with
BOE features, BOE University was set-up in July, 2015, which with the purpose of “Academic drive and professional guide” and a
vision of “being international competitive and respectful Industrial University”. And it undertakes the strategy and service as main
line, driving the development of the Company personnel training system’s further improvement and upgrade and forms training
products line including four categories of leaders, managers, professionals and industry personnel as well as provides targeted
solutions for talent growth at different stages.
Training organized and implemented by BOE in 2018 empowered aspects of the Group such as the leadership, management strength,
expertise force and general professional capacities. Centering on the strategic transformation objective, BOE has designed and
implemented a series of strategic transformation talent cultivation projects, explored and cultivated a batch of backup young cadres
and software-hardware professional technicians for the Group, promoting transformation development of the Group; As for business
pain points and demands, the Group designed and implemented a batch of performance improvement projects in the way of training
+ tuition, directly promoting the implementation of technical improvement and marketing scheme by the business department and
assisting in solving practical business problems; Focusing on cultivation of standardized talents, BOE sticks to promoting innovation
of training contents and modes and has finished a new turn of project optimization, iteration and implementation, cultivating eligible
management cadres, marketing operators, purchase professionals and industrial talents for each organization of the Group. Data
about annual participation population, training class hours and training satisfaction kept increasing steadily.
4. Labor Outsourcing
□ Applicable √ Not applicable
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BOE Technology Group Co., Ltd. Annual Report 2018
Part IX Corporate Governance
I General Information of Corporate Bonds
1. Standardized Operation and Perfection of Corporate Governance Structure of the Company in the Reporting Period
The Company has stringently followed laws and rules such as Company Law, Securities Laws, Code of Corporate Governance for
Listed Companies, etc., and requirements of Guidelines of the Shenzhen Stock Exchange for the Standardized Operation of Companies
Listed on the Main Board, to continuously improve the corporate governance of the Company, to perfect internal control system as well
as to promote corporate governance level of the Company.
During Reporting Period, the Company’s board of directors, board of supervisors and senior executives strictly in line with the
requirement of related laws and Company rules and regulations perform their obligations; ensure the standardization and effectiveness
of corporate governance. During the Reporting Period, the Company revised the Articles of Association and Rules of Procedure of the
Board and newly set up Financing Business Management System, Implementing Rules for the Enterprise Annuity Plan Further promote
the standardization of the corporate governance level. During the Reporting Period, the Company continued to promote the Company’s
governance in many ways. Actively arranged the Company's new directors, supervisors to join special training organized by the
Securities regulatory bureau of Beijing, regularly carry out the theme of the franco-prussian propaganda inside the Company. The
Company preserved the related party fund transaction, external guarantee and regularly self-inspection of the shareholding and its
changes of the directors, supervisors and senior executives, through maintaining and perfecting the Shenzhen Stock Exchange Investors
Interactive Platform to strengthen the communication of the investors.
In the Reporting Period, corporate governance of the Company was perfected and operated normally, which was in total compliance
with various requirements on corporate governance of listed companies. No problems such as horizontal competition or illegal
related-party transactions caused by partial restructuring or other reasons were found. The Company will continue to follow the concept
of “honesty, standard, transparency and responsibility”, regulate itself and continuously improve the level of governance.
Main governance of the Company was as follows:
(1) About Shareholders and Shareholders’ General Meetings
As per the Company’s Articles of Association, shareholders enjoyed rights and assumed obligations according to the shares they held.
Organizing and convening procedures of the Company’s shareholders’ general meetings were in compliance with laws and regulations.
The Company paid high attention to legal interests of its shareholders, especially its minority shareholders. Meanwhile, on the basis of
ensuring legitimacy and validity of shareholders’ general meetings, actively provided conveniences including internet voting for
minority shareholders’ joining the general meeting of the shareholders.
(2) About Relationship between the Controlling Shareholder and the Company
The Company was independent from the controlling shareholder and the actual controller in terms of personnel, assets, financing,
organization and business. The controlling shareholder and actual controller of the Company was able to strictly control its behaviors,
with no direct or indirect intervention in the Company’s decision-making, production and operating activities by violating relevant laws,
regulations and the Articles of Association, no behaviors in relation to occupying significant funds of the Company, and no behaviors in
relation to asking the Company to provide guarantees for it or other parties.
(3) About Directors and the Board of Directors
During the Reporting Period, the composition of the Board of Directors of the Company was in line with requirements of regulations
and the Company’s actual situation. All directors possessed necessary knowledge, skills and quality for duty performance. They all
performed their duties as stipulated in the Articles of Association honestly, faithfully and diligently. They learned about and kept a
constant focus on the Company’s production and operation, its financial status and influence and risks of significant events. They also
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BOE Technology Group Co., Ltd. Annual Report 2018
took the initiative to search for information needed in their decision-making so as to ensure efficient operation and scientific
decision-making of the Board of Directors. Board sessions were organized and convened in strict compliance with the Articles of
Association and Rules of Procedure for the Board of Directors. There were three special committees under the Board of Directors,
namely, the Execution Committee, the Nomination, Remuneration and Appraisal Committee and the Audit Committee. The Company
also formulated rules of procedure for all the said special committees so that they could perform better.
(4) About Supervisors and the Supervisory Committee
In the Reporting Period, by way of attending shareholders’ general meetings, sitting in on board sessions, checking the Company’s
compliance with laws and finance periodically, issuing its opinions on relevant matters, etc., the Supervisory Committee supervised the
Company’s finance, duty performance of directors and senior management staffs, management and capital flows between the Company
and its related parties, and safeguarded the legitimate interests and rights of the Company and its shareholders. Sessions of the
Supervisory Committee were organized and convened in strict compliance with the Articles of Association and the Rules of Procedure
for the Supervisory Committee so as to ensure the Supervisory Committee’s activities for duty performance were rightful and valid.
(5) About Information Disclosure and Transparency
According to the Company Law, the Stock Listing Rules of the Shenzhen Stock Exchange, the Guidelines of the Shenzhen Stock
Exchange for the Standardized Operation of Companies Listed on the Main Board, Companies Publicly Issuing Securities Information
Disclosure Standards on the Contents and Formats No.2 - Content And Format of the Annual Report (2014 revision), the Disclosure of
Information A Business Memo No. 21 - Regular Report Disclosure Related Matters (2014 revision). The Articles of Association and
Management Methods for Information Disclosure and other requirements, the Company disclosed information in a timely and fair
manner and ensured the factuality, accuracy and completeness of the information disclosed.
The Company attached importance to communication with investors through investor visits reception, investors interaction platform,
online business performance explanation session, telephone and attending the investment strategy session organized by the securities
brokers, etc. Except for the aforesaid services, the Company’s senior management joined in the investor conference held by large
international investment institutions, actively communicated with the global institutional investors and discussed the situation and
development strategy of the Company with investors and analyst, so as to promote the open, transparent, efficient and consistent
communication between the Company, investors and analyst of securities, made them known more about the strategy, operation and
development of the Company.
Indicate by tick market whether there is any material incompliance with the regulatory documents issued by the CSRC governing the
governance of listed companies.
□ Yes √ No
No such cases in the Reporting Period.
II The Company’s Independence from Its Controlling Shareholder in Business, Personnel,
Asset, Organization and Financial Affairs
The Company was independent from the controlling shareholder and the actual controller in terms of business, personnel, assets,
organization and financing, with independent & complete business and capability to operate independently.
1. In business, the Company was independent from the controlling shareholder and the actual controller, with its own production and
business departments and management system, the Company had the capability to make its own decisions, assume sole responsibility
for its profits and losses, and operate independently with independent and complete business.
2. In personnel, the Company was completely independent in labor, staff and remunerations. The Company had its own operating
management team. CEO, President, Chief Financial Officer, Secretary of the Board as well as other senior management staffs of the
Company all worked on full-time basis in the Company and did not hold any post in or receive any remuneration in the controlling
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BOE Technology Group Co., Ltd. Annual Report 2018
shareholder unit.
3. In assets, the Company had independent and complete assets. With clear ownership on its assets, the Company independently
owned the production system, ancillary production system as well as supporting facilities for major businesses, as well as assets like
land use rights and intellectual property rights, etc.. Neither the controlling shareholder nor the actual controller appropriated any
assets of the Company.
4. In organization, the Company had established its organization completely independent from the controlling shareholder and the
actual controller, with independent and sound organs and corporate governance structure. The Company had not handled any official
affairs jointly with the controlling shareholder or the actual controller. There were no subordinate relationships between the
controlling shareholder & its functional departments and the Company & its functional departments.
5. In financing, the Company had established independent financial departments, with full-time finance personnel. The Company had
also formulated a standard and independent finance accounting system as well as financial measurement system, established the
corporate financial management archives and deployed relevant administrative personnel for them, opened independent account in
bank, and paid tax independently.
III Horizontal Competition
□ Applicable √ Not applicable
IV Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor Index to disclosed
Meeting Type Date of the meeting Disclosure date
participation ratio information
Announcement on
Resolution of the 1st
Extraordinary General
Meeting of 2018
The 1st Extraordinary Extraordinary
(2018-024) disclosed on
General Meeting of General 35.21% 30 March 2018 31 March 2018
China Securities Journal,
2018 Meeting
Shanghai Securities News,
Securities Times and Ta
Kung Pao as well as
http://www.cninfo.com.cn.
Announcement on
Resolution of the 2017
Annual General Meeting
(018-045) disclosed on
The 2017 Annual Annual General
34.31% 28 May 2018 29 May 2018 China Securities Journal,
General Meeting Meeting
Shanghai Securities News,
Securities Times and Ta
Kung Pao as well as
http://www.cninfo.com.cn.
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BOE Technology Group Co., Ltd. Annual Report 2018
2. Extraordinary General Meetings Convened at the Request of Preferred Shareholders with Resumed
Voting Rights
□ Applicable √ Not applicable
V Performance of Duty by Independent Directors in the Reporting Period
1. Attendance of Independent Directors at Board Meetings and General Meetings
Attendance of independent directors at board meetings and general meetings
Total number
Board
of board Board Board The independent
Board meetings
meetings the meetings meetings the director failed to General
Independent meetings attended by
independent attended independent attend two meetings
director attended on way of
director was through a director failed consecutive board attended
site telecommunica
eligible to proxy to attend meetings (yes/no)
tion
attend
Lyu Tingjie 12 2 10 0 0 No 2
Wang Huacheng 12 2 10 0 0 No 2
Hu Xiaolin 12 2 10 0 0 No 2
Li Xuan 12 1 10 1 0 No 2
Why any independent director failed to attend two consecutive board meetings:
Not applicable.
2. Objections Raised by Independent Directors on Matters of the Company
Indicate by tick mark whether any independent directors raised any objections on any matter of the Company.
□ Yes √ No
No such cases in the Reporting Period.
3. Other Information about the Performance of Duty by Independent Directors
Indicate by tick mark whether any suggestions from independent directors were adopted by the Company.
√ Yes □ No
Suggestions from independent directors adopted or not adopted by the Company
The Company has four current independent directors, who are experts and scholars in the fields of finance, law and industry. During
the Reporting Period, in accordance with Company Law, Securities Law, Stock Listing Rules, Guidance on Establishing Independent
Director System for Listed Companies, Articles of Association and Independent Director System, the independent directors paid
special attention to the standardized operation of the Company, performed their duties independently and diligently, issued many
precious professional advice in terms of the perfection of systems and routine operating decision-making, etc., and issued their
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BOE Technology Group Co., Ltd. Annual Report 2018
independent and fair opinion as independent directors on the related-party transactions, engagement of audit firm, decision of annual
remuneration of senior management staffs, external guarantee and other events needing their opinion occurred in the Reporting
Period, as well as played their due roles in perfecting the supervisory mechanism of the Company, protecting the legal right of the
Company and the whole shareholders.
VI Performance of Duty by Specialized Committees under the Board in the Reporting Period
1. Duty fulfillment of the Strategy Committee under Board of Directors
In the Reporting Period, the Strategy Committee under Board of Directors conscientiously controlled the strategic guidance, significant
projects, and production and operation activities. During the recess of the board session, the Strategy Committee was in charge of
working out the operating strategies of the Company, planning its significant investment and financing projects, and monitoring its
major operation activities, which played an important role in ensuring the Company’s stable and smooth operation in the year.
2. Duty fulfillment of the Audit Committee under Board of Directors
In the Reporting Period, the Audit Committee conscientiously performed its routine duties, and actively advanced the launch of the
audit work for Y2018. Before the periodic reports were submitted to the Board for review, the Audit Committee convened special
sessions to discuss the reports. At the sessions, the committee members listened to relevant reports, expressed their opinions and put
forward constructive advices concerning the Company’s internal control, financial auditing and so on.
The 2017 annual audit work on financial report of the Audit Committee was detailed as follows:
1) Before the audit, the Committee discussed and decided the schedule of audit work for the 2018 annual report with KPMG Huazhen
Certified Public Accountants (LLP) (hereinafter referred to as “KPMG”);
2) Before the presence of KPMG, the Committee reviewed the financial statements prepared by the Company and issued a written
opinion;
3) Upon the presence of KPMG, the Audit Committee convened meetings to communicate with KPMG, reviewed the Company’s
financial statements following the preliminary audit opinion issued by KPMG, and issued the written opinion concerned. Before the
Board reviewed the annual report, the Committee reviewed the annual financial statements, the employment of the CPAs firm, etc., and
made resolutions for further review by the Board.
4) In the audit process, the Committee issued a written Audit Urge Letter to KPMG, asking KPMG to finish the audit in an orderly
manner in strict accordance with the set schedule, so as to submit the annual audit report on time;
The Audit Committee is of the opinion that the Financial Report is complete and factual with complete consolidated entities and
statements, an accurate consolidation basis, a steady and consistent accounting policy, proper application of the accounting policy and
reasonable accounting estimates, which is in line with the Enterprise Accounting Standards and other regulations promulgated by the
Ministry of Finance.
3. Duty fulfillment of Nomination & Remuneration & Appraisal Committee under Board of Directors
In the Reporting Period, in accordance with relevant rules and laws, the Nomination & Remuneration & Appraisal Committee
conscientiously performed its duties endowed by the Board through strictly executing the appointment procedure of directors, and
senior management, as well as the appraisal procedure for directors and senior management staffs. And it reviewed the basic
remuneration of senior managerial of the Company.
VII Performance of Duty by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting
Period.
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BOE Technology Group Co., Ltd. Annual Report 2018
□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.
VIII Appraisal of and Incentive for Senior Management
According to the performance appraisal method of the Company, senior management sign an Annual Target Responsibility Paper with the Company which sets the annual operation targets, key
performance indicators (KPI) as well as the evaluation, reward and punishment standards. As for the accomplishment of the targets, quarterly analyses, semi-annual reports and annual appraisal
will be conducted. The examination and evaluation results will determine the remunerations, position changes as well as the trainings to receive of senior management.
IX Internal Control
1. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes √ No
2. Internal Control Self-Evaluation Report
Disclosure date of the internal control self-evaluation report 26 March 2019
Index to the disclosed internal control self-evaluation report On 26 March 2019, the Company disclosed 2018 Internal Control Appraisal Report, refer to www.cninfo.com.cn for details.
Evaluated entities’ combined assets as % of consolidated total
98.00%
assets
Evaluated entities’ combined operating revenue as % of
95.00%
consolidated operating revenue
Identification standards for internal control weaknesses
Type Weaknesses in internal control over financial reporting Weaknesses in internal control not related to financial reporting
The nature standards of internal control deficiency evaluation Evaluation standards for internal defects not related to financial
Nature standard over financial reporting determined by the Company are as reporting specified by the Company are as below:
follows: Material weakness:
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BOE Technology Group Co., Ltd. Annual Report 2018
Material weakness: In case of the following situations, it will be (1) The business scope of the Company violates national laws
deemed as that major defects (including but not limited to the and regulations seriously;
following situations) may occur: (2) The decision-making procedure is not scientific, major
(1) Directors, supervisors and Senior Management make the decision errors are released, the development strategies of the
malpractices; Company are deviated from severely and major property losses
(2) The enterprise corrects the released financial statements; are caused for the Company;
(3) The certified public accountant finds that there is a material (3) Safety and environmental accidents occur, resulting in major
misstatement in the current financial report, but the internal negative effects on the Company;
control fails to find the misstatement in the process of (4) A lot of senior management personnel and key technicians
operation; leave the Company;
(4) Supervision of the risk control and audit committee and the (5) Important business lacks system control or the system is
internal audit organization for internal control is ineffective. failure;
Serious weakness refers to one or combination of several (6) Material weaknesses or serious weaknesses are not corrected.
control items, and its severity and economic consequence are Serious weakness refers to one or combination of several control
lower than those of the material weaknesses but may still affect items, and its severity and economic consequence are lower than
the real and accurate objective of the financial report. those of the material weaknesses but may still affect the
The common weakness refers to other internal control enterprise to deviate from the control goal.
weaknesses except for material weaknesses and serious The common weakness refers to other internal control defects
weaknesses. except for material weaknesses and Serious weakness.
The quantitative standards of internal control deficiency
evaluation over financial reporting determined by the Company
are as follows: The quantitative standards for internal control defects not related
Material weakness: The amount reported incorrectly is ≥1‰* to financial reporting determined by the Company are consistent
Quantitative standard total amount of assets of the Group with those over the financial reporting. See the left side for
Serious weakness: 0.5‰*total amount of assets of the Group ≤ details.
the amount reported incorrectly<1‰*total amount of assets of
the Group
Common weakness: 0.1‰*total group assets ≤ the amount
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BOE Technology Group Co., Ltd. Annual Report 2018
reported incorrectly <0.5‰*total group assets
Number of material weaknesses in internal control over
0
financial reporting
Number of material weaknesses in internal control not related
0
to financial reporting
Number of serious weaknesses in internal control over
0
financial reporting
Number of serious weaknesses in internal control not related
0
to financial reporting
X Independent Auditor’s Report on Internal Control
√ Applicable □ Not applicable
Opinion paragraph in the independent auditor’s report on internal control
We believe that the Company and important subsidiaries make valid internal control on financial report in all significant aspects on 31 December 2018 according to the Basic Rules on
Enterprise Internal Control and other relevant stipulations.
Independent auditor’s report on internal control
Disclosed
disclosed or not
Disclosure date 26 March 2019
Index to such report disclosed The Company disclosed the Audit Report on Internal Control on 26 March 2019, for details, please refer to http://www.cninfo.com.cn
Type of the auditor’s opinion Standard unqualified opinion
Material weaknesses in internal control not related to
No
financial reporting
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the Company’s internal control.
□ Yes √ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent with the internal control self-evaluation report issued by the Company’s Board.
√ Yes □ No
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BOE Technology Group Co., Ltd. Annual Report 2018
Part X Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of this
Report’s approval or were due but could not be redeemed in full?
Yes
I. Basic Information of the Corporate Bonds
Bonds balance Way of
Name Abbr. Code Release date Due date Interest rate
(RMB’0,000) redemption
2016 Public
offering of the
corporate
Paid for the
bonds for the
interests by
qualified
16BOE01 112358 21 March 2016 21 March 2021 1,000,000 3.15% year and the
investors of
principals once
BOE
when expired.
Technology
Group Co.,
Ltd. (Phase I)
Listed or transferred trading
List on the SZSE.
place of the Company bonds
Appropriate arrangement of the
the qualified investors
investors
Interest payment during the On 21 March 2019, the Company completed the 2018 annual interest payout for the qualified
Reporting Period investors of its 2016 corporate bonds and put-back.
The Company disclosed the following three announcements respectively on 31 January 2019, 1
February 2019 and 12 February 2019: The 1st Indicative Announcement on not Adjusting the
Execution of the relevant
Coupon Rate of “16BOE01” Corporate Bonds and Implementation Measures for Investor
regulations during the
Put-back (announcement No.: 2019-001), The 2nd Indicative Announcement on not Adjusting the
Reporting Period such as the
Coupon Rate of “16BOE01” Corporate Bonds and Implementation Measures for Investor
affiliated option clause of the
Put-back (announcement No.: 2019-003), The 3rd Indicative Announcement on not Adjusting the
issuers or investors, special
Coupon Rate of “16BOE01” Corporate Bonds and Implementation Measures for Investor
clauses such as the
Put-back (announcement No.: 2019-004), and finally determined the put-back amount of
exchangeable regulations of the
“16BOE01” was 96,705,976 of RMB9,975,221,424.40 (interest included). The rest of bonds
Company bonds (if applicable)
entrusted are 3,294,024. The Company has completed the payment of principal and current
interest to investors holding “16BOE01” who applied for put-back effectively on 21 March 2019.
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BOE Technology Group Co., Ltd. Annual Report 2018
II. List of the Bond Trustee and the Rating Organization
Bond trustee:
Rm. 2203,
North Tower,
Shanghai
China Zhu
Securities Contact
Name Securities Co., Office address Contact person Mingqiang, 021-68801565
Plaza, 528 number
Ltd. Han Yong
Pudong Road
South,
Shanghai
Rating organization executed the tracking rating of the corporate bonds of the Reporting Period:
12/F, PICC Building, No.2 Jianwai Street,
Name United Ratings Co., Ltd. Office address
Chaoyang District, Beijing
Alternation reasons, execution process and
influences on the investors’ interests etc. if there
was alternation of the bond trustees and the credit Not applicable
rating agencies engaged by the Company during
the Reporting Period (if applicable)
III. List of the Usage of the Raised Funds of the Corporate Bonds
The Company executed the internal decision-making process
List of the usage of the raised funds and the execution process strictly according to the applications committed by the prospectus
of the Company bonds as well as the review and approval regulations of the Board of
Directors and meetings of shareholders of the Company.
Ending balance (RMB’0,000) 2.58
The Company signed the Agreement on the 2016 Public Offering
of the Corporation Bonds Account for the Qualified Investors and
the Funds Tripartite Authorities of BOE Technology Group Co.,
Ltd. with the Beijing Olympic Branch of Ping An Bank Co,
Operating situation of the raised funds special account
Beijing Hepingli Branch of China CITIC Bank Corporation
Limited and Beijing Branch of China Merchants Bank Co., Ltd.,
which set up the raise funds account that ensure the exclusive use
of the special fund of the raise funds.
Whether the usage of the raised funds met with the usage, using
Yes
plan and other agreements committed on the prospectus
IV. Rating Situation of the Corporate Bonds Information
On 23 June 2017, United Credit Ratings Co., Ltd. (hereinafter referred to as “United Ratings”) issued the Tracking Rating Report of
the 2017 Corporate Bonds Credit Rating of BOE Technology Group Co., Ltd., with the issuers’ main body credit rating of AAA and
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BOE Technology Group Co., Ltd. Annual Report 2018
AAA of the credit rating of the current corporate bonds. On 24 June 2017, the tracking rating report of the current bonds by the
United Ratings will be disclosed on www.szse.cn and www.unitedratings.com.cn with the public disclosure date of www.szse.cn not
later than that of other trading places, media or other places.
On 20 June 2018, United Ratings issued the Tracking Rating Report of the 2018 Corporate Bonds Credit Rating of BOE Technology
Group Co., Ltd., with the issuers’ main body credit rating of AAA and AAA of the credit rating of the current corporate bonds. On
22 June 2018, the tracking rating report of the current bonds by the United Ratings will be disclosed on www.szse.cn and
www.unitedratings.com.cn with the public disclosure date of www.szse.cn not later than that of other trading places, media or other
places.
Before 26 May 2019, United Ratings will issue the Tracking Rating Report of the 2019 Corporate Bonds Credit Rating of BOE
Technology Group Co., Ltd. The Company will disclose the tracking rating analysis report on www.szse.cn in time. And please
investors pay attention to it.
V. Credit-adding Mechanism, Repayment Plan and Other Repayment Guarantee Measures of
the Corporate Bonds
There was no guarantee of the corporate bonds of the Reporting Period.
The profits from the issuers’ main business were the main resources of the debt service fund of the bonds of the Reporting Period.
The debt repayment plan was as follows: during the duration period of the bonds of the Reporting Period, every 21 March of each
year from Y2017 to Y2021 is the interest date of the last interest accrual year (if met with the legal holidays or rest days, should
postpone which to the subsequent first working day); if the investors executed the put-back right, the interest date of the part of the
put-back bonds is every 21 March from Y2017 to Y2021 (if met with the legal holidays or rest days, should postpone which to the
subsequent first working day). The principal of the current bonds should be paid at one time when expired. The payment date of the
current bonds would be 21 March 2021 (if met with the legal holidays or rest days, should postpone which to the subsequent first
working day); if the investors executed the put-back right, the payment date of the part of the put-back bonds would be 21 March
2019 (if met with the legal holidays or rest days, should postpone which to the subsequent first working day).
The repayment guarantee measures of the corporate bonds of the Reporting Period: to formulate the Meeting Regulations of the
Bondholders and the repayment guarantee measures; to formulate and strictly carry out the funds management plans; to fully exert
the functions of the bond trustees; to strictly disclose the information; at the same time, when expected to fail to repay the principals
and interest of the bonds on time or failed to repay the principals and interest of the bonds when expired, the Company will at least
adopt the measures of the execution of the capital expenditures projects such as to postpone the significant external investment and
the purchase as well as merger and so on that guarantee the repayment of the debts.
During the Reporting Period, there was no alternation of the credit-adding mechanism, debt repayment plan and other repayment
guarantee measures of the corporate bonds.
VI. Convene Situation of the Bonds Holders Meeting during the Reporting Period
No such cases in the Reporting Period.
VII. List of the Duty Execution of the Bonds Trustee during the Reporting Period
As the bond trustee of the Reporting Period, China Securities Co., Ltd. constantly paid attention to the operating, finance and credit
situation of the Company strictly according to the relevant laws and regulations such as the Regulations of the Offering and Trading
of the Corporate Bonds, Professional Code of Conduct of the Bond Trustee of the Corporate Bonds and vigorously executed the
responsibilities as a trustee as well as maintained the legal interests of the bondholders; there was no any situation conflicted to the
90
BOE Technology Group Co., Ltd. Annual Report 2018
Company’s interests when executing the relevant responsibilities of the trustee.
VIII. The Major Accounting Data and the Financial Indicators of the Recent 2 Years of the
Company up the Period-end
Unit: RMB’0,000
Item 2018 2017 Change rate of the same period
EBITDA 2,130,534 2,416,492 -11.83%
Current ratio 1.60 2.01 -20.40%
Asset-liability ratio 60.41% 59.28% 1.13%
Quick ratio 1.41 1.83 -22.95%
Total debt ratio of EBITDA 18.26% 23.73% -5.47%
Times interest earned 1.62 3.89 -58.35%
Times interest earned of cash 7.66 11.03 -30.55%
Times interest earned of
4.67 7.69 -39.27%
EBITDA
Loan repayment rate 100.00% 100.00% 0.00%
Interest coverage 100.00% 100.00% 0.00%
Main reason of the above accounting data and the financial indicators with the YoY change exceeded 30%
√ Applicable □ Not applicable
EBITDA decreased of 58.35% over the same period of last year, which mainly due to decrease in profit before taxation in Y2018
than that of Y2017.
IX. List of the Interest Payment of Other Bonds and Debt Financing Instruments during the
Reporting Period
No such cases in the Reporting Period.
X. List of the Acquired Bank Credit Lines, Usage and the Repayment of the Bank Loans
The Company operates normatively with good reputation and strong ability of profitability and debt payment. And the Company
maintained the long-term strategic partnerships with major cooperative banks. Up to 31 December 2018, the total amount of the
credit line of the major cooperative banks with the Company was of RMB40.7 billion with the used credit line of RMB16.4 billion
and the unused amount of which was of RMB24.3 billion. The principal and the interest of bank loans were repaid on time. There
was no default of bank loans for the Company in the Reporting Period.
XI. List of the Execution of the Agreements or the Commitments Related to the Company
Bonds Raising Specification during the Reporting Period
Up to the approval quotation date of the Annual Report, the Company strictly carried out each agreement and commitment of the
current bond prospectus, and there was no any situation of the inefficient execution of the relevant agreements or commitments
91
BOE Technology Group Co., Ltd. Annual Report 2018
according to the bond prospectus by the Company that caused the negative influences on the bonds investors.
XII. Significant Events Occurring during the Reporting Period
No such cases in the Reporting Period.
XIII. Whether there Was Guarantor of the Corporate Bonds
□ Yes √ No
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BOE Technology Group Co., Ltd. Annual Report 2018
Part XI Financial Statements
I Independent Auditor’s Report
Type of the independent auditor’s opinion Standard unqualified audit opinion
Date of signing this report 23 March 2019
Name of the independent auditor KPMG Huazhen Certified Public Accountants (LLP)
Reference number of auditor’s report KPMGHZSZ No.1901566
Name of the certified public accountants Zhang Huan, Liu Jingyuan
AUDITORS’ REPORT
毕马威华振审字第 1901566 号
All Shareholders of BOE Technology Group Co., Ltd.:
Opinion
We have audited the accompanying financial statements of BOE Technology Group Company Limited (“BOE”), which comprise the
consolidated and parent company’s balance sheet as at 31 December 2018, the consolidated and parent company’s income statement,
the consolidated and parent company’s cash flow statement, and the consolidated and parent company’s statement of changes in
shareholders’ equity for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and parent company’s
financial position of BOE as at 31 December 2018, and its consolidated and parent company’s financial performance and cash flows
of BOE for the year then ended in accordance with Accounting Standards for Business Enterprises issued by the Ministry of Finance
of the People’s Republic of China.
Basis for opinion
We conducted our audit in accordance with China Standards on Auditing for Certified Public Accountants (“CSAs”). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. . We are independent of BOE in accordance with the China Code of Ethics for Certified Public Accountants
(“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
93
BOE Technology Group Co., Ltd. Annual Report 2018
AUDITOR’S REPORT (continued)
毕马威华振审字第 1901566 号
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance 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 forming our opinion thereon, and we do not provide a separate opinion on these matters.
Revenue recognition
Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and
accounting estimates” 23 and “V. Notes to the consolidated financial statements” 36.
The Key Audit Matter How the matter was addressed in our audit
The revenue of BOE and its subsidiaries (“BOE Group”) is Our audit procedures to evaluate revenue recognition included
mainly derived from the sales of products relating to the following:
display device across the domestic and overseas market.
Evaluate the design and operation effectiveness of key
The sales contracts/orders signed between BOE Group and internal controls related to revenue recognition;
its customers (mainly electronic equipment manufacturers)
contain various trading terms. BOE Group judges the Check key sales contracts/orders on a sampling basis to
transfer timing of major risks and rewards according to the identify relevant trading terms, and evaluate whether the
trading terms, and recognizes revenue accordingly. accounting policies for revenue recognition of BOE Group
Depending on the trading terms, the income is usually meet the requirements of the Enterprise Accounting
recognized when the goods are delivered and received, or Standards;
when they are received by the carrier.
We identified the recognition of BOE Group’s revenue as a On a sampling basis and according to different trading
key audit matter because revenue, as one of BOE Group’s terms, reconcile the revenue recorded in the current year to
key performance indicators, involves various trading relevant supporting files such as relevant orders, shipping
terms, and there is an inherent risk that revenue may not be orders, sales invoices, customs declarations, delivery
recognized in a correct period. receipts, etc. to evaluate whether revenue is recognized in
accordance with the accounting policy of BOE Group;
On a sampling basis and according to different trading
terms, cross check the revenue recorded before and after the
balance sheet date against relevant supporting files such as
relevant orders, shipping orders, sales invoices, customs
declarations, delivery receipts, etc. to evaluate whether
revenue is recorded in the appropriate period;
94
BOE Technology Group Co., Ltd. Annual Report 2018
Key Audit Matters (continued)
Revenue recognition
Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and
accounting estimates” 23 and “V. Notes to the consolidated financial statements” 36.
The Key Audit Matter How the matter was addressed in our audit
Select a sample based on the characteristics and nature of
customer's transaction, and perform certification on the
balance of accounts receivable as at the balance sheet date
and the sales transaction amount during the current year;
On a sampling basis, check the written-back of revenue
after the balance sheet date (including sales discounts and
sales returns, etc.) with relevant supporting documents to
assess whether revenue is recorded in the appropriate
period;
Select revenue accounting entries that meet specific risk
criteria and check related supporting documents.
Book value of fixed assets and construction in progress
Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and
accounting estimates” 14, 15 and “V. Notes to the consolidated financial statements” 10, 11.
The Key Audit Matter How the matter was addressed in our audit
BOE Group continued to invest in building production Our audit procedures to assess the book value of fixed assets and
lines of display device to expand its production capacity. construction in progress included the following:
As at 31 December 2018, the book value of fixed assets
and construction in progress amounted to RMB 184.58 Evaluate the design and operation effectiveness of key
billion. internal controls (including estimating useful life and
residual values, etc.) related to the integrity, existence and
The judgement made by the management on the following accuracy of fixed assets and construction in progress;
aspects will affect the book value of fixed assets and
construction in progress, including: Check the physical status of construction in progress and
fixed assets on a sampling basis;
Determine which type of expenditures are qualified for
capitalization; Check capital expenditures with relevant supporting
documents (including purchase agreements/ orders,
Determine the timing for transferring construction in acceptance orders, engineering construction contracts,
progress to fixed assets and making depreciation; project progress reports, etc.) on a sampling basis;
Estimate the useful life and residual value of Assess whether the capitalized commissioning expenses for
corresponding fixed assets. the current year are in compliance with relevant
We identified the book value of fixed assets and capitalization conditions; check the commissioning expenses
construction in progress of BOE Group as a key audit with relevant supporting documents on a sampling basis;
matter because the valuation of the book value of fixed
assets and construction in progress involves significant On the basis of sampling, assess the timing for transferring
judgement from the management and it is of importance to construction in progress to fixed assets, through the
the consolidated financial statements. inspection of commissioning situation and the documents for
transferring construction in progress to fixed assets;
Based on our understanding of industry practices and actual
operating conditions of assets, we evaluate the
management's estimation of the useful life and residual
value of fixed assets.
95
BOE Technology Group Co., Ltd. Annual Report 2018
AUDITORS’ REPORT (continued)
毕马威华振审字第 1901566 号
Other Information
BOE’s management is responsible for the other information. The other information comprises all the information included in 2018
annual report of BOE, other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Accounting
Standards for Business Enterprises, and for the design, implementation and maintenance of such internal control necessary to enable
that the financial statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the ability of BOE to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless BOE either intends
to liquidate or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process of BOE.
96
BOE Technology Group Co., Ltd. Annual Report 2018
AUDITORS’ REPORT (continued)
毕马威华振审字第 1901566 号
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with CSAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgement and maintain professional scepticism throughout
the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the BOE’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause BOE to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
97
BOE Technology Group Co., Ltd. Annual Report 2018
AUDITORS’ REPORT (continued)
毕马威华振审字第 1901566 号
Auditor’s Responsibilities for the Audit of the Financial Statement (continued)
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
BOE to express an opinion on the financial statements. We are responsible for the instruction, supervision and execution of
Conch Group’s audit, and assume full responsibility for the audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence and communicate with them all relationships 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 determine those matters that were of most significance in
the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our
auditor’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 to outweigh the public interest benefits of such communication.
KPMG Huazhen LLP Certified Public Accountants
Registered in the People’s Republic of China
Zhang Huan (Engagement Partner)
Beijing, China Liu Jingyuan
23 March 2019
98
BOE Technology Group Co., Ltd. Annual Report 2018
Part XII Documents Available for Reference
(I) The financial statements signed and sealed by the Company’s legal representative, president of the Execution Committee (Chief
Executive Officer), Chief Financial Officer and head of the financial department (equivalent to financial manager); and
(II) The originals of all the documents and announcements that the Company disclosed on www.cninfo.com.cn during the Reporting
Period.
All the above mentioned documents are available at the Board Secretary’s Office of the Company.
Chairman of the Board (signature): Mr. Wang Dongsheng
Date of the Board’s approval of this Report: 23 March 2019
99
BOE Technology Group Co., Ltd.
ENGLISH TRANSLATION OF FINANCIAL STATEMENTS
FOR THE YEAR 1 JANUARY 2018 TO 31 DECEMBER 2018
IF THERE IS ANY CONFLICT OF MEANING BETWEEN THE CHINESE VERSION
AND ENGLISH TRANSLATION, THE CHINESE VERSION WILL PREVAIL
Page 1 of 7
AUDITORS’ REPORT
毕马威华振审字第 1901566 号
All Shareholders of BOE Technology Group Co., Ltd.:
Opinion
We have audited the accompanying financial statements of BOE Technology Group Company Limited (“BOE”), which
comprise the consolidated and parent company’s balance sheet as at 31 December 2018, the consolidated and parent
company’s income statement, the consolidated and parent company’s cash flow statement, and the consolidated and parent
company’s statement of changes in shareholders’ equity for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and parent
company’s financial position of BOE as at 31 December 2018, and its consolidated and parent company’s financial
performance and cash flows of BOE for the year then ended in accordance with Accounting Standards for Business
Enterprises issued by the Ministry of Finance of the People’s Republic of China.
Basis for opinion
We conducted our audit in accordance with China Standards on Auditing for Certified Public Accountants (“CSAs”). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. . We are independent of BOE in accordance with the China Code of Ethics for Certified
Public Accountants (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Page 2 of 7
AUDITOR’S REPORT (continued)
毕马威华振审字第 1901566 号
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance 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 forming our opinion thereon, and we do not provide a separate opinion on these matters.
Revenue recognition
Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and
accounting estimates” 23 and “V. Notes to the consolidated financial statements” 36.
The Key Audit Matter How the matter was addressed in our audit
The revenue of BOE and its subsidiaries (“BOE Group”) is Our audit procedures to evaluate revenue recognition included
mainly derived from the sales of products relating to the following:
display device across the domestic and overseas market.
Evaluate the design and operation effectiveness of key
The sales contracts/orders signed between BOE Group and internal controls related to revenue recognition;
its customers (mainly electronic equipment manufacturers)
contain various trading terms. BOE Group judges the Check key sales contracts/orders on a sampling basis to
transfer timing of major risks and rewards according to the identify relevant trading terms, and evaluate whether the
trading terms, and recognizes revenue accordingly. accounting policies for revenue recognition of BOE Group
Depending on the trading terms, the income is usually meet the requirements of the Enterprise Accounting
recognized when the goods are delivered and received, or Standards;
when they are received by the carrier.
We identified the recognition of BOE Group’s revenue as a On a sampling basis and according to different trading
key audit matter because revenue, as one of BOE Group’s terms, reconcile the revenue recorded in the current year to
key performance indicators, involves various trading relevant supporting files such as relevant orders, shipping
terms, and there is an inherent risk that revenue may not be orders, sales invoices, customs declarations, delivery
recognized in a correct period. receipts, etc. to evaluate whether revenue is recognized in
accordance with the accounting policy of BOE Group;
On a sampling basis and according to different trading
terms, cross check the revenue recorded before and after the
balance sheet date against relevant supporting files such as
relevant orders, shipping orders, sales invoices, customs
declarations, delivery receipts, etc. to evaluate whether
revenue is recorded in the appropriate period;
Page 3 of 7
AUDITORS’ REPORT (continued)
毕马威华振审字第 1901566 号
Key Audit Matters (continued)
Revenue recognition
Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and
accounting estimates” 23 and “V. Notes to the consolidated financial statements” 36.
The Key Audit Matter How the matter was addressed in our audit
Select a sample based on the characteristics and nature of
customer's transaction, and perform certification on the
balance of accounts receivable as at the balance sheet date
and the sales transaction amount during the current year;
On a sampling basis, check the written-back of revenue
after the balance sheet date (including sales discounts and
sales returns, etc.) with relevant supporting documents to
assess whether revenue is recorded in the appropriate
period;
Select revenue accounting entries that meet specific risk
criteria and check related supporting documents.
Page 4 of 7
AUDITORS’ REPORT (continued)
毕马威华振审字第 1901566 号
Key Audit Matters (continued)
Book value of fixed assets and construction in progress
Refer to the accounting policies set out in the notes to the financial statements “III. Significant accounting policies and
accounting estimates” 14, 15 and “V. Notes to the consolidated financial statements” 10, 11.
The Key Audit Matter How the matter was addressed in our audit
BOE Group continued to invest in building production Our audit procedures to assess the book value of fixed assets and
lines of display device to expand its production capacity. construction in progress included the following:
As at 31 December 2018, the book value of fixed assets
and construction in progress amounted to RMB 184.58 Evaluate the design and operation effectiveness of key
billion. internal controls (including estimating useful life and
residual values, etc.) related to the integrity, existence and
The judgement made by the management on the following accuracy of fixed assets and construction in progress;
aspects will affect the book value of fixed assets and
construction in progress, including: Check the physical status of construction in progress and
fixed assets on a sampling basis;
Determine which type of expenditures are qualified for
capitalization; Check capital expenditures with relevant supporting
documents (including purchase agreements/ orders,
Determine the timing for transferring construction in acceptance orders, engineering construction contracts,
progress to fixed assets and making depreciation; project progress reports, etc.) on a sampling basis;
Estimate the useful life and residual value of Assess whether the capitalized commissioning expenses for
corresponding fixed assets. the current year are in compliance with relevant
We identified the book value of fixed assets and capitalization conditions; check the commissioning expenses
construction in progress of BOE Group as a key audit with relevant supporting documents on a sampling basis;
matter because the valuation of the book value of fixed
assets and construction in progress involves significant On the basis of sampling, assess the timing for transferring
judgement from the management and it is of importance to construction in progress to fixed assets, through the
the consolidated financial statements. inspection of commissioning situation and the documents for
transferring construction in progress to fixed assets;
Based on our understanding of industry practices and actual
operating conditions of assets, we evaluate the
management's estimation of the useful life and residual
value of fixed assets.
Page 5 of 7
AUDITORS’ REPORT (continued)
毕马威华振审字第 1901566 号
Other Information
BOE’s management is responsible for the other information. The other information comprises all the information included in
2018 annual report of BOE, other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with the
Accounting Standards for Business Enterprises, and for the design, implementation and maintenance of such internal control
necessary to enable that the financial statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the ability of BOE to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
BOE either intends to liquidate or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process of BOE.
Page 6 of 7
AUDITORS’ REPORT (continued)
毕马威华振审字第 1901566 号
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with CSAs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the BOE’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause BOE to cease to
continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
Page 7 of 7
AUDITORS’ REPORT (continued)
毕马威华振审字第 1901566 号
Auditor’s Responsibilities for the Audit of the Financial Statement (continued)
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within BOE to express an opinion on the financial statements. We are responsible for the instruction, supervision and
execution of Conch Group’s audit, and assume full responsibility for the audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence and communicate with them all relationships 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 determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’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 to outweigh the public interest benefits of such communication.
KPMG Huazhen LLP Certified Public Accountants
Registered in the People’s Republic of China
Zhang Huan (Engagement Partner)
Beijing, China Liu Jingyuan
23 March 2019
Page 8 of 7
BOE Technology Group Co., Ltd.
Consolidated balance sheet as at 31 December 2018
(Expressed in Renminbi Yuan)
31 December 31 December 1 January
Note 2018 2017 2017
Assets
Current assets:
Cash at bank and on hand V.1 51,481,539,711 57,128,659,576 58,152,817,223
Bills receivable and
accounts receivable V. 2 20,537,462,095 16,347,031,379 17,561,628,267
Prepayments V. 3 770,633,448 587,126,751 708,511,473
Other receivables V. 4 2,454,174,971 818,024,132 1,028,210,989
Inventories V. 5 11,985,398,172 8,957,719,381 7,833,138,532
Non-current assets due
within one year - 17,303,152 66,321,715
Other current assets V. 6 12,463,073,779 15,924,433,978 5,691,200,226
Total current assets 99,692,282,176 99,780,298,349 91,041,828,425
Non-current assets:
Available-for-sale financial
assets V. 7 734,022,359 859,899,356 622,502,556
Long-term equity
investments V. 8 2,389,166,886 6,928,854,415 1,356,111,395
Investment properties V. 9 1,283,867,651 1,296,662,205 1,192,932,896
Fixed assets V. 10 128,157,730,995 88,625,296,761 69,947,586,967
Construction in progress V. 11 56,423,354,887 50,761,250,426 33,008,248,720
Intangible assets V. 12 5,937,679,394 2,982,664,308 3,136,873,387
Goodwill V. 13 904,370,509 197,963,688 197,963,688
Long term deferred
expenses V. 14 360,640,853 379,829,430 344,891,227
Deferred tax assets V. 15 252,373,622 106,255,657 146,538,565
Other non-current assets V. 16 7,893,002,053 4,189,767,254 4,139,533,216
Total non-current assets 204,336,209,209 156,328,443,500 114,093,182,617
Total assets 304,028,491,385 256,108,741,849 205,135,011,042
The notes on pages 21 to 145 form part of these financial statements.
Page 1
BOE Technology Group Co., Ltd.
Consolidated balance sheet (continued) as at 31 December 2018
(Expressed in Renminbi Yuan)
31 December 31 December 1 January
Note 2018 2017 2017
Liabilities and shareholders’
equity
Current liabilities
Short-term loans V. 17 5,449,954,885 3,249,736,430 4,916,965,507
Bills payable and accounts
payable V. 18 22,805,065,888 16,749,587,533 14,475,878,126
Advances from customers V. 19 1,218,934,743 781,324,522 548,942,714
Employee benefits payable V. 20 2,224,931,171 2,217,066,944 1,542,852,266
Taxes payable V. 21 970,108,298 775,621,146 656,351,894
Other payables V. 22 22,956,979,828 16,122,413,130 15,081,535,166
Non-current liabilities due
within one year V. 23 5,597,563,204 9,109,708,511 3,684,236,935
Other current liabilities V. 24 1,004,557,061 730,709,590 532,983,474
Total current liabilities 62,228,095,078 49,736,167,806 41,439,746,082
Non-current liabilities
Long-term loans V. 25 94,780,077,864 78,973,633,010 49,885,166,211
Bonds payable V. 26 10,288,666,233 9,966,467,496 9,956,719,508
Long-term payables V. 27 1,416,092,239 1,176,250,982 1,261,446,565
Provisions V. 28 16,457,010 16,457,010 16,457,010
Deferred income V. 29 2,187,558,533 2,261,955,307 2,494,122,929
Deferred tax liabilities V. 15 1,419,373,545 563,302,910 448,625,054
Other non-current liabilities V. 30 11,334,873,322 9,130,244,495 7,616,672,523
Total non-current liabilities 121,443,098,746 102,088,311,210 71,679,209,800
Total liabilities 183,671,193,824 151,824,479,016 113,118,955,882
The notes on pages 21 to 145 form part of these financial statements.
Page 2
BOE Technology Group Co., Ltd.
Consolidated balance sheet (continued) as at 31 December 2018
(Expressed in Renminbi Yuan)
31 December 31 December 1 January
Note 2018 2017 2017
Liabilities and shareholders’
equity (continued)
Shareholders’ equity
Share capital V. 31 34,798,398,763 34,798,398,763 35,153,067,743
Capital reserve V. 32 38,213,100,596 38,585,515,122 39,031,357,529
Less: Treasury shares - - 314,350,824
Other comprehensive
income V. 33 (125,258,252) 150,602,933 75,718,703
Surplus reserve V. 34 1,152,626,310 889,640,475 743,139,855
Retained earnings V. 35 11,817,881,286 10,385,659,084 4,011,055,487
Total equity attributable to
shareholders of the
Company 85,856,748,703 84,809,816,377 78,699,988,493
Non-controlling interests 34,500,548,858 19,474,446,456 13,316,066,667
Total shareholders’ equity 120,357,297,561 104,284,262,833 92,016,055,160
Total liabilities and
shareholders’ equity 304,028,491,385 256,108,741,849 205,135,011,042
These financial statements were approved by the Board of Directors of the Company on 23 March 2019.
Wang Dongsheng Chen Yanshun Sun Yun Yang Xiao Ping (Company stamp)
Chairman of the Chief Executive Chief Financial Financial Officer
Board Officer Officer
(Signature and (Signature and (Signature and (Signature and
stamp) stamp) stamp) stamp)
The notes on pages 21 to 145 form part of these financial statements.
Page 3
BOE Technology Group Co., Ltd.
Company balance sheet as at 31 December 2018
(Expressed in Renminbi Yuan)
31 December 31 December 1 January
Note 2018 2017 2017
Assets
Current assets:
Cash at bank and on
hand XIV. 1 3,829,814,050 2,990,801,501 7,649,349,412
Bills receivable and
accounts receivable XIV. 2 38,452,623 39,897,385 246,051,213
Prepayments 25,020,734 10,315,083 7,462,061
Other receivables XIV. 3 2,015,828,460 1,835,131,720 2,658,651,974
Inventories 9,289,141 12,751,847 12,069,865
Non-current assets due
within one year 450,000,000 3,648,840,000 -
Other current assets XIV. 4 47,805,096 61,082,075 25,504,074
Total current assets 6,416,210,104 8,598,819,611 10,599,088,599
Non-current assets:
Available-for-sale financial
XIV. 5
assets 128,297,254 149,269,107 177,166,908
Long-term equity
XIV. 6
investments 143,499,733,485 121,193,680,391 99,918,451,449
Investment properties 290,253,475 292,544,063 164,540,581
Fixed assets 969,371,352 982,985,346 862,860,227
Construction in progress 251,314,313 274,400,649 468,494,838
Intangible assets 514,186,496 530,490,988 624,007,700
Long term deferred
expenses 99,701,797 112,776,691 98,745,001
Deferred tax assets XIV. 7 290,794,548 150,206,185 47,679,645
Other non-current assets 284,243,667 480,909,226 4,010,146,153
Total non-current assets 146,327,896,387 124,167,262,646 106,372,092,502
Total assets 152,744,106,491 132,766,082,257 116,971,181,101
The notes on pages 21 to 145 form part of these financial statements.
Page 4
BOE Technology Group Co., Ltd.
Company balance sheet as at 31 December 2018
(Expressed in Renminbi Yuan)
31 December 31 December 1 January
Note 2018 2017 2017
Liabilities and shareholders’
equity
Current liabilities
Short-term loans 1,000,000,000 - -
Bills payable and accounts
payable 35,322,286 50,152,503 34,015,337
Advances from customers 1,577,035,515 1,375,022,585 1,093,593,891
Employee benefits payable XIV. 8 201,139,261 283,000,193 169,917,103
Taxes payable 250,558,556 119,584,927 80,897,741
Other payables XIV. 9 8,209,736,090 10,032,392,970 11,079,505,355
Non-current liabilities due
within one year 2,590,000,000 4,031,840,000 100,000,000
Total current liabilities 13,863,791,708 15,891,993,178 12,557,929,427
Non-current liabilities
Long-term loans XIV. 10 26,520,000,000 23,943,000,000 18,922,400,000
Bonds payable 9,976,533,425 9,966,467,496 9,956,719,508
Deferred income XIV. 11 5,523,949,841 130,652,127 148,987,694
Other non-current liabilities 20,954,104,125 7,600,000,000 -
Total non-current liabilities 62,974,587,391 41,640,119,623 29,028,107,202
Total liabilities 76,838,379,099 57,532,112,801 41,586,036,629
The notes on pages 21 to 145 form part of these financial statements.
Page 5
BOE Technology Group Co., Ltd.
Company balance sheet as at 31 December 2018
(Expressed in Renminbi Yuan)
31 December 31 December 1 January
Note 2018 2017 2017
Liabilities and shareholders’
equity (continued)
Shareholders’ equity
Share capital V. 31 34,798,398,763 34,798,398,763 35,153,067,743
Capital reserve XIV. 12 37,590,966,191 37,588,541,593 38,157,600,408
Less: Treasury shares - - 314,350,824
Other comprehensive
income XIV. 13 (28,507,585) 192,097,489 152,323,461
Surplus reserve V. 34 1,152,626,310 889,640,475 743,139,855
Retained earnings XIV. 14 2,392,243,713 1,765,291,136 1,493,363,829
Total shareholders’ equity 75,905,727,392 75,233,969,456 75,385,144,472
Total liabilities and
shareholders’ equity 152,744,106,491 132,766,082,257 116,971,181,101
These financial statements were approved by the Board of Directors of the Company on 23 March 2019.
Wang Dongsheng Chen Yanshun Sun Yun Yang Xiao Ping (Company stamp)
Chairman of the Chief Executive Chief Financial Financial Officer
Board Officer Officer
(Signature and (Signature and (Signature and (Signature and
stamp) stamp) stamp) stamp)
The notes on pages 21 to 145 form part of these financial statements.
Page 6
BOE Technology Group Co., Ltd.
Consolidated income statement for the year ended 31 December 2018
(Expressed in Renminbi Yuan)
Note 2018 2017
I. Operating income V. 36 97,108,864,935 93,800,479,215
II. Less: Operating costs V. 36 77,306,224,288 70,282,477,585
Taxes and surcharges V. 37 778,606,126 708,381,529
Selling and distribution expenses V. 38 2,891,056,969 2,591,925,798
Administrative expenses V. 39 4,959,184,197 4,068,775,945
Research and development costs V. 40 5,039,927,435 3,177,767,395
Finance expenses V. 41 3,196,695,890 1,948,024,860
Including: Interest expense 3,265,732,314 2,479,336,159
Interest income 748,004,557 665,076,391
Impairment Loss V. 42 1,239,588,763 2,229,524,682
Add: Other income V. 43 2,000,573,631 732,550,112
Investment income V. 44 306,887,579 115,602,683
Including: (Losses) / Gains from
investment in associates and joint
ventures (13,925,731) 169,034
Gains from changes in fair value V. 45 2,061,153 32,048,211
Gains/ (Losses) from disposal of
V. 46
assets 1,067,273 (69,145)
III. Operating profit 4,008,170,903 9,673,733,282
Add: Non-operating income V. 47 169,429,515 180,418,858
Less: Non-operating expenses V. 47 55,310,251 113,080,601
IV.Total profit 4,122,290,167 9,741,071,539
Less: Income tax expenses V. 48 1,242,416,094 1,880,659,980
V. Net profit 2,879,874,073 7,860,411,559
Net profit attributable to shareholders of the
Company 3,435,127,975 7,567,682,493
Non-controlling interests (555,253,902) 292,729,066
The notes on pages 21 to 145 form part of these financial statements.
Page 7
BOE Technology Group Co., Ltd.
Consolidated income statement for the year ended 31 December 2018
(continued)
(Expressed in Renminbi Yuan)
Note 2018 2017
VI. Other comprehensive income, net of tax V. 33 (249,814,869) 44,387,083
Other comprehensive income (net of tax)
attributable to shareholders of the
Company (275,861,185) 74,884,230
Items that may be reclassified to profit or
loss
1 Share of other comprehensiveincome
of the equity-accounted investeethat
may be reclassified to profit or loss (202,998,615) 76,051,151
2 Gains or losses arising from changes in
fair value of available-for-sale
financial assets (136,009,652) 12,910,506
3 Translation differences arising from
translation of foreign currency
financial statements 63,147,082 (14,077,427)
Other comprehensive income (net of tax)
attributable to non-controlling interests 26,046,316 (30,497,147)
VII. Total comprehensive income for the year 2,630,059,204 7,904,798,642
Total comprehensive income attributable to
shareholders of the Company 3,159,266,790 7,642,566,723
Total comprehensive income attributable to
minority shareholders (529,207,586) 262,231,919
VIII.Earnings per share
(1) Basic earnings per share V. 49 0.10 0.22
(2) Diluted earnings per share V. 49 0.10 0.22
These financial statements were approved by the Board of Directors of the Company on 23 March 2019.
Wang Dongsheng Chen Yanshun Sun Yun Yang Xiao Ping (Company stamp)
Chairman of the Chief Executive Chief Financial Financial Officer
Board Officer Officer
(Signature and (Signature and (Signature and (Signature and
stamp) stamp) stamp) stamp)
The notes on pages 21 to 145 form part of these financial statements.
Page 8
BOE Technology Group Co., Ltd.
Company income statement for the year ended 31 December 2018
(Expressed in Renminbi Yuan)
Note 2018 2017
I. Operating income XIV. 15 4,048,349,688 2,815,561,521
II. Less: Operating costs 51,274,428 29,212,906
Taxes and surcharges XIV. 16 44,129,874 39,649,316
Selling and distribution expenses 561,601 2,224,628
Administrative expenses 744,597,442 692,418,475
Research and development
costs 1,247,889,953 1,027,250,122
Finance expenses XIV. 17 1,014,420,709 505,879,539
Including: Interest expense 1,055,792,484 556,880,963
Interest income 44,583,524 58,850,619
Add: Other income XIV. 18 995,284,363 23,513,456
Investment income XIV. 19 928,309,899 950,279,403
Including: (Losses) / Gains from
investment in associates and
joint ventures (12,001,705) 169,034
Losses from disposal of
intangible assets - (157,430)
III.Operating profit 2,869,069,943 1,492,561,964
Add: Non-operating income XIV. 20 4,336,405 3,552,572
Less: Non-operating expenses XIV. 20 8,668,410 18,008,134
IV.Total profit 2,864,737,938 1,478,106,402
Less: Income tax expenses XIV. 21 234,879,588 13,100,199
V. Net profit 2,629,858,350 1,465,006,203
The notes on pages 21 to 145 form part of these financial statements.
Page 9
BOE Technology Group Co., Ltd.
Company income statement for the year ended 31 December 2018
(continued)
(Expressed in Renminbi Yuan)
Note 2018 2017
VI. Other comprehensive income, net of
XIV. 13
tax (220,605,074) 39,774,028
Items that may be reclassified to profit
or loss
1 Share of other
comprehensiveincome of the
equity-accounted investeethat may be
reclassified to profit or loss (202,778,999) 76,051,151
2 Gains or losses arising from
changes in fair value of
available-for-sale financial assets (17,826,075) (36,277,123)
VII. Total comprehensive income for the
year 2,409,253,276 1,504,780,231
These financial statements were approved by the Board of Directors of the Company on 23 March 2019.
Wang Dongsheng Chen Yanshun Sun Yun Yang Xiao Ping (Company stamp)
Chairman of the Chief Executive Chief Financial Financial Officer
Board Officer Officer
(Signature and (Signature and (Signature and (Signature and
stamp) stamp) stamp) stamp)
The notes on pages 21 to 145 form part of these financial statements.
Page 10
BOE Technology Group Co., Ltd.
Consolidated cash flow statement for the year ended 31 December 2018
(Expressed in Renminbi Yuan)
Note 2018 2017
I. Cash flows from operating activities:
Proceeds from sale of goods and
rendering of services 105,589,411,120 102,954,356,249
Refund of taxes 6,513,812,910 8,111,061,033
Government grants 2,195,202,400 994,782,926
Proceeds from other operating
activities 770,921,360 334,436,574
Sub-total of cash inflows 115,069,347,790 112,394,636,782
Payment for goods and services (75,700,548,251) (73,250,817,397)
Payment to and for employees (9,162,421,738) (8,015,171,249)
Payment of various taxes (1,619,256,288) (2,480,139,386)
Payment for other operating activities (2,903,074,317) (1,921,579,095)
Sub-total of cash outflows (89,385,300,594) (85,667,707,127)
Net cash flow from operating
activities V. 50(1) 25,684,047,196 26,726,929,655
The notes on pages 21 to 145 form part of these financial statements.
Page 11
BOE Technology Group Co., Ltd.
Consolidated cash flow statement for the year ended 31 December 2018
(continued)
(Expressed in Renminbi Yuan)
Note 2018 2017
II. Cash flows from investing activities:
Proceeds from disposal of investments 59,211,537,932 29,310,620,000
Investment returns received 356,050,182 114,521,291
Net proceeds from disposal of fixed assets,
intangible assets and other long-term
assets 98,644,621 6,906,760
Net amount received from subsidiaries V. 50(2) 6,801,508,810 -
Proceeds from other investing activities 1,808,988,695 3,455,877,227
Sub-total of cash inflows 68,276,730,240 32,887,925,278
Cash paid for acquisition of fixed
assets,intangible assets and other
long-term assets (54,520,544,965) (47,741,900,710)
Payment for acquisition of investments (60,819,720,633) (44,667,993,985)
Sub-total of cash outflows (115,340,265,598) (92,409,894,695)
Net cash flow from investing activities (47,063,535,358) (59,521,969,417)
III. Cash flows from financing activities:
Proceeds from investors 4,294,161,400 9,851,250,000
Including: Cash received from minority
shareholders of subsidiaries 4,294,161,400 9,851,250,000
Proceeds from borrowings 38,368,279,407 53,106,623,454
Net amount of monetary movements for
pledging loans 176,637,743 -
Proceeds from other financing activities 155,194,921 3,185,620,220
Sub-total of cash inflows 42,994,273,471 66,143,493,674
The notes on pages 21 to 145 form part of these financial statements.
Page 12
BOE Technology Group Co., Ltd.
Consolidated cash flow statement for the year ended 31 December 2018
(continued)
(Expressed in Renminbi Yuan)
Note 2018 2017
III. Cash flows from financing activities
(continued):
Repayments of borrowings (21,274,318,530) (18,337,522,432)
Payment for dividends or interest (5,806,323,938) (3,860,122,769)
Including: Dividends paid to non-
controlling shareholders by
subsidiaries (4,319,286) (7,359,220)
Net amount of monetary movements
for pledging loans - (3,435,366,588)
Payment for other financing activities (347,060,613) (7,585,109,696)
Sub-total of cash outflows (27,427,703,081) (33,218,121,485)
Net cash flow from financing activities 15,566,570,390 32,925,372,189
IV. Effect of foreign exchange rate
changes on cash and cash
equivalents 1,250,326,709 (1,571,855,232)
V. Decrease in cash and cash
equivalents V. 50(1) (4,562,591,063) (1,441,522,805)
Add: Cash and cash equivalents at
the beginning of the year 47,913,287,583 49,354,810,388
VI. Cash and cash equivalents at the
end of the year V. 50(3) 43,350,696,520 47,913,287,583
These financial statements were approved by the Board of Directors of the Company on 23 March 2019.
Wang Dongsheng Chen Yanshun Sun Yun Yang Xiao Ping (Company stamp)
Chairman of the Chief Executive Chief Financial Financial Officer
Board Officer Officer
(Signature and (Signature and (Signature and (Signature and
stamp) stamp) stamp) stamp)
The notes on pages 21 to 145 form part of these financial statements.
Page 13
BOE Technology Group Co., Ltd.
Company cash flow statement for the year ended 31 December 2018
(Expressed in Renminbi Yuan)
Note 2018 2017
I. Cash flows from operating activities:
Proceeds from sale of goods and
rendering of services 4,053,318,155 2,646,300,929
Tax refund 23,508,537 -
Proceeds from other operating
activities 1,705,344,020 34,989,298
Sub-total of cash inflows 5,782,170,712 2,681,290,227
Payment for goods and services (976,219,250) (538,392,970)
Payment to and for employees (957,780,812) (702,175,894)
Payment of various taxes (284,079,728) (127,394,546)
Payment for other operating activities (102,575,476) (5,016,674,918)
Sub-total of cash outflows (2,320,655,266) (6,384,638,328)
Net cash flow from operating activities XIV. 22 (1) 3,461,515,446 (3,703,348,101)
II. Cash flows from investing activities:
Investment returns received 506,145,151 -
Cash received in return for
investment 971,599,836 1,949,256,701
Net proceeds from disposal of fixed
assets 6,384,696 773,888
Proceeds from other investing
activities 3,333,764,245 1,280,375,880
Sub-total of cash inflows 4,817,893,928 3,230,406,469
The notes on pages 21 to 145 form part of these financial statements.
Page 14
BOE Technology Group Co., Ltd.
Company cash flow statement for the year ended 31 December 2018
(continued)
(Expressed in Renminbi Yuan)
2018 2017
II. Cash flows from investing activities:
(continued):
Cash paid for acquisition of fixed assets,intangible
assets and other long-term assets (295,214,844) (137,047,424)
Payment for acquisition of investments (22,553,409,200) (21,200,608,757)
Payment for other investing activities (257,000,000) (800,000,000)
Sub-total of cash outflows (23,105,624,044) (22,137,656,181)
Net cash flow from investing activities (18,287,730,116) (18,907,249,712)
III. Cash flows from financing activities:
Proceeds from borrowings 11,367,000,000 9,933,000,000
Proceeds from other financing
activities 19,698,642,218 11,300,000,000
Sub-total of cash inflows 31,065,642,218 21,233,000,000
Repayments of borrowings (4,597,640,000) (980,560,000)
Payment for dividends and interest (2,795,130,756) (1,562,806,447)
Payment for other financing activities (8,150,000,000) (609,376,971)
Sub-total of cash outflows (15,542,770,756) (3,152,743,418)
Net cash flow from financing activities 15,522,871,462 18,080,256,582
The notes on pages 21 to 145 form part of these financial statements.
Page 15
BOE Technology Group Co., Ltd.
Company cash flow statement for the year ended 31 December 2018
(continued)
(Expressed in Renminbi Yuan)
Note 2018 2017
IV. Effect of foreign exchange rate
changes on cash and cash
equivalents 142,355,757 (27,557,680)
V. Net Increase/(Decrease) in cash and
cash equivalents XIV. 22 (1) 839,012,549 (4,557,898,911)
Add: Cash and cash equivalents at
the beginning of the year 2,990,801,501 7,548,700,412
VI. Cash and cash equivalents at the
end of the year XIV. 22 (2) 3,829,814,050 2,990,801,501
These financial statements were approved by the Board of Directors of the Company on 23 March 2019.
Wang Dongsheng Chen Yanshun Sun Yun Yang Xiao Ping (Company stamp)
Chairman of the Chief Executive Chief Financial Financial Officer
Board Officer Officer
(Signature and (Signature and (Signature and (Signature and
stamp) stamp) stamp) stamp)
The notes on pages 21 to 145 form part of these financial statements.
Page 16
BOE Technology Group Co., Ltd.
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2018
(Expressed in Renminbi Yuan)
Equity attributable to shareholders of the Company
Other comprehensive Non-controlling Total shareholders’
Note Share capital Capital reserve Less: Treasury shares income Surplus reserve Retained earnings Sub-total interests equity
I. Balance at the beginning of the year 34,798,398,763 38,585,515,122 - 150,602,933 889,640,475 10,385,659,084 84,809,816,377 19,474,446,456 104,284,262,833
II. Changes in equity during the year
(1) Total comprehensive income - - - (275,861,185) - 3,435,127,975 3,159,266,790 (529,207,586) 2,630,059,204
(2) Shareholders’ contributions and
decrease of capital
1. Contribution by
non-controlling interests - - - - - - - 4,494,161,400 4,494,161,400
2. Business combinations
involving entities not under
common control - - - - - - - 11,541,782,339 11,541,782,339
3. Equity movements arising
from investment increase in
non-wholly owned
subsidiaries V. 32 - 3,754,159 - - - - 3,754,159 (3,402,793) 351,366
Appropriation of profits V. 35 - - - - 262,985,835 (262,985,835) - - -
1. Appropriation for surplus
reserve - - - - - (1,739,919,938) (1,739,919,938) (18,316,894) (1,758,236,832)
2. Distributions to shareholders
(4) Others
1. Equity changes arising from
acquisition of
non-controlling interests V. 32 - (378,593,283) - - - - (378,593,283) (458,914,064) (837,507,347)
2. Others V. 32 - 2,424,598 - - - - 2,424,598 - 2,424,598
III. Balance at the end of the year 34,798,398,763 38,213,100,596 - (125,258,252) 1,152,626,310 11,817,881,286 85,856,748,703 34,500,548,858 120,357,297,561
These financial statements were approved by the Board of Directors of the Company on 23 March 2019.
Wang Dongsheng Chen Yanshun Sun Yun Yang Xiao Ping (Company stamp)
Chairman of the Board Chief Executive Chief Financial Financial Officer
Officer Officer
(Signature and stamp) (Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 21 to 145 form part of these financial statements.
Page 17
BOE Technology Group Co., Ltd.
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2017
(Expressed in Renminbi Yuan)
Equity attributable to shareholders of the Company
Other comprehensive Non-controlling Total shareholders’
Note Share capital Capital reserve Less: Treasury shares income Surplus reserve Retained earnings Sub-total interests equity
I. Balance at the beginning of the year 35,153,067,743 39,031,357,529 314,350,824 75,718,703 743,139,855 4,011,055,487 78,699,988,493 13,316,066,667 92,016,055,160
II. Changes in equity during the year
(1) Total comprehensive income - - - 74,884,230 - 7,567,682,493 7,642,566,723 262,231,919 7,904,798,642
(2) Shareholders’ contributions and
decrease of capital
1. Equity movements arising
from investment increase in
non-wholly owned
subsidiaries - 123,216,408 - - - - 123,216,408 5,903,507,090 6,026,723,498
2. Repurchase of treasury shares - - 609,376,971 - - - (609,376,971) - (609,376,971)
3. Written off treasury shares (354,668,980) (569,058,815) (923,727,795) - - - - - -
Appropriation of profits V. 35
1. Appropriation for surplus
reserve - - - - 146,500,620 (146,500,620) - - -
2. Distributions to shareholders - - - - - (1,046,578,276) (1,046,578,276) (7,359,220) (1,053,937,496)
III. Balance at the end of the year 34,798,398,763 38,585,515,122 - 150,602,933 889,640,475 10,385,659,084 84,809,816,377 19,474,446,456 104,284,262,833
These financial statements were approved by the Board of Directors of the Company on 23 March 2019.
Wang Dongsheng Chen Yanshun Sun Yun Yang Xiao Ping (Company stamp)
Chairman of the Chief Executive Chief Financial Financial Officer
Board Officer Officer
(Signature and (Signature and (Signature and (Signature and
stamp) stamp) stamp) stamp)
The notes on pages 21 to 145 form part of these financial statements.
Page 18
BOE Technology Group Co., Ltd.
Company statement of changes in shareholders’ equity
for the year ended 31 December 2018
(Expressed in Renminbi Yuan)
Other comprehensive Total shareholders’
Share capital Capital reserve Less: Treasury shares income Surplus reserve Retained earnings equity
I. Balance at the beginning of the year 34,798,398,763 37,588,541,593 - 192,097,489 889,640,475 1,765,291,136 75,233,969,456
II. Changes in equity during the year
(1) Total comprehensive income - - - (220,605,074) - 2,629,858,350 2,409,253,276
(2) Profit appropriation
1. Appropriation for surplus
reserve - - - - 262,985,835 (262,985,835) -
2. Distributions to
shareholders - - - - - (1,739,919,938) (1,739,919,938)
(3) Others - 2,424,598 - - - - 2,424,598
III. Balance at the end of the year 34,798,398,763 37,590,966,191 - (28,507,585) 1,152,626,310 2,392,243,713 75,905,727,392
These financial statements were approved by the Board of Directors of the Company on 23 March 2019.
Wang Dongsheng Chen Yanshun Sun Yun Yang Xiao Ping (Company stamp)
Chairman of the Chief Executive Chief Financial Financial Officer
Board Officer Officer
(Signature and (Signature and (Signature and (Signature and
stamp) stamp) stamp) stamp)
The notes on pages 21 to 145 form part of these financial statements.
Page 19
BOE Technology Group Co., Ltd.
Company statement of changes in shareholders’ equity (continued)
for the year ended 31 December 2017
(Expressed in Renminbi Yuan)
Other comprehensive Total shareholders’
Share capital Capital reserve Less: Treasury shares income Surplus reserve Retained earnings equity
I. Balance at the beginning of the year 35,153,067,743 38,157,600,408 314,350,824 152,323,461 743,139,855 1,493,363,829 75,385,144,472
II. Changes in equity during the year
(1) Total comprehensive income - - - 39,774,028 - 1,465,006,203 1,504,780,231
(2) Shareholders’ contributions and
decrease of capital
1. Repurchase of treasury
shares - - 609,376,971 - - - (609,376,971)
2. Written off treasury shares (354,668,980) (569,058,815) (923,727,795) - - - -
Appropriation of profits
1. Appropriation for surplus
reserve - - - - 146,500,620 (146,500,620) -
2. Distributions to
shareholders - - - - - (1,046,578,276) (1,046,578,276)
III. Balance at the end of the year 34,798,398,763 37,588,541,593 - 192,097,489 889,640,475 1,765,291,136 75,233,969,456
These financial statements were approved by the Board of Directors of the Company on 23 March 2019.
Wang Dongsheng Chen Yanshun Sun Yun Yang Xiao Ping (Company stamp)
Chairman of the Chief Executive Chief Financial Financial Officer
Board Officer Officer
(Signature and (Signature and (Signature and (Signature and
stamp) stamp) stamp) stamp)
The notes on pages 21 to 145 form part of these financial statements.
Page 20
BOE Technology Group Co., Ltd.
Notes to the financial statements
(Expressed in Renminbi Yuan unless otherwise indicated)
I. Company status
BOE Technology Group Company Limited (the “Company”) is a company limited by shares established on 9 April 1993 in
Beijing, with its head office located at Beijing. The parent of the Company and the Company’s ultimate holding company is
Beijing Electronics Holdings Co., Ltd. (“Electronics Holdings”).
The Company and its subsidiaries (referred to as “the Group”) comprise three main business segments: Display device and
sensor device business, Smart system business and Healthcare service business. For information about the subsidiaries of the
Company, refer to Note VII. During the reporting period, the information about increases and decreases in the Group’s
subsidiaries is disclosed in Note VI.
II. Basis of preparation
The financial statements have been prepared on the going concern basis.
III. Significant accounting policies and accounting estimates
1 Statement of compliance
The financial statements have been prepared in accordance with the requirements of Accounting Standards for Business
Enterprises or referred to as China Accounting Standards (“CAS”). These financial statements present truly and completely
the consolidated financial position and financial position of the Company as at 31 December 2018, and the consolidated
financial performance and financial performance and the consolidated cash flows and cash flows of the Company for the year
then ended.
These financial statements also comply with the disclosure requirements of “Regulation on the Preparation of Information
Disclosures by Companies Issuing Securities, No. 15: General Requirements for Financial Reports” as revised by the China
Securities Regulatory Commission (“CSRC”) in 2014.
2 Accounting period
The accounting period is from 1 January to 31 December.
3 Operating cycle
The Company takes the period from the acquisition of assets for processing to until the ultimate realisation of cash or cash
equivalents as a normal operating cycle. The operating cycle of the Company is usually less than 12 months.
Page 21
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
4 Functional currency
The Company’s functional currency is Renminbi and these financial statements are presented in Renminbi. Functional
currency is determined by the Company and its subsidiaries on the basis of the currency in which major income and costs are
denominated and settled. Some of the Company’s subsidiaries have functional currencies that are different from the
Company’s functional currency. Their financial statements have been translated based on the accounting policy set out in
Note III.8.
5 Accounting treatments for business combinations involving entities under common control and not under common control
(1) Business combinations involving entities under common control
A business combination involving entities under common control is a business combination in which all of the combining
entities are ultimately controlled by the same party or parties both before and after the business combination, and that control
is not transitory. The assets acquired and liabilities assumed are measured based on their carrying amounts in the consolidated
financial statements of the ultimate controlling party at the combination date. The difference between the carrying amount of
the net assets acquired and the consideration paid for the combination (or the total par value of shares issued) is adjusted
against share premium in the capital reserve, with any excess adjusted against retained earnings. Any costs directly
attributable to the combination are recognized in profit or loss when incurred. The combination date is the date on which one
combining entity obtains control of other combining entities.
(2) Business combinations involving entities not under common control
A business combination involving entities not under common control is a business combination in which all of the combining
entities are not ultimately controlled by the same party or parties both before and after the business combination. Where (1)
the aggregate of the acquisition-date fair value of assets transferred (including the acquirer’s previously held equity interest in
the acquiree), liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of the
acquiree, exceeds (2) the acquirer’s interest in the acquisition-date fair value of the acquiree’s identifiable net assets, the
difference is recognized as goodwill (see Note III.18). If (1) is less than (2), the difference is recognized in profit or loss for
the current period. Acquisition-related costs are expensed when incurred. The acquiree’s identifiable asset, liabilities and
contingent liabilities, if the recognition criteria are met, are recognized by the Group at their acquisition-date fair value. The
acquisition date is the date on which the acquirer obtains control of the acquiree.
For a business combination involving entities not under common control and achieved in stages, the Group remeasures its
previously-held equity interest in the acquiree to its acquisition-date fair value and recognizes any resulting difference
between the fair value and the carrying amount as investment income for the current period. In addition, any amount
recognized in other comprehensive income that may be reclassified to profit or loss, in prior reporting periods relating to the
previously-held equity interest, and any other changes in the owners’ equity under equity accounting, are transferred to
investment income in the period in which the acquisition occurs (see Note III.12(2)(b)).
Page 22
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
6 Consolidated financial statements
(1) General principles
The scope of consolidated financial statements is based on control and the consolidated financial statements comprise the
Company and its subsidiaries. Control exists when the investor has all of following: power over the investee; exposure, or
rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power
over the investee. When assessing whether the Group has power, only substantive rights (held by the Group and other parties)
are considered. The financial position, financial performance and cash flows of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that control ceases.
Non-controlling interests are presented separately in the consolidated balance sheet within shareholders’ equity. Net profit or
loss attributable to non-controlling shareholders is presented separately in the consolidated income statement below the net
profit line item. Total comprehensive income attributable to non-controlling shareholders is presented separately in the
consolidated income statement below the total comprehensive income line item.
When the amount of loss for the current period attributable to the non-controlling shareholders of a subsidiary exceeds the
non-controlling shareholders’ share of the opening owners’ equity of the subsidiary, the excess is still allocated against the
non-controlling interests.
When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Company
makes necessary adjustments to the financial statements of the subsidiary based on the Company’s own accounting period or
accounting policies. Intra-group balances and transactions, and any unrealised profit or loss arising from intra-group
transactions, are eliminated when preparing the consolidated financial statements. Unrealised losses resulting from
intra-group transactions are eliminated in the same way as unrealised gains, unless they represent impairment losses that are
recognized in the financial statements.
(2) Subsidiaries acquired through a business combination
Where a subsidiary was acquired during the reporting period, through a business combination involving enterprises under
common control, the financial statements of the subsidiary are included in the consolidated financial statements based on the
carrying amounts of the assets and liabilities of the subsidiary in the financial statements of the ultimate controlling party as if
the combination had occurred at the date that the ultimate controlling party first obtained control. The opening balances and
the comparative figures of the consolidated financial statements are also restated.
Where a subsidiary was acquired during the reporting period, through a business combination not involving enterprises under
common control, the identifiable assets and liabilities of the acquired subsidiaries are included in the scope of consolidation
from the date that control commences, based on the fair value of those identifiable assets and liabilities at the acquisition
date.
(3) Disposal of subsidiaries
When the Group loses control over a subsidiary, any resulting disposal gains or losses are recognized as investment income
for the current period. The remaining equity investment is re-measured at its fair value at the date when control is lost, any
resulting gains or losses are also recognized as investment income for the current period.
Page 23
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
When the Group loses control of a subsidiary in multiple transactions in which it disposes of its long-term equity investment
in the subsidiary in stages, the following are considered to determine whether the Group should account for the multiple
transactions as a bundled transaction:
- arrangements are entered into at the same time or in contemplation of each other;
- arrangements work together to achieve an overall commercial effect;
- the occurrence of one arrangement is dependent on the occurrence of at least one other arrangement;
- one arrangement considered on its own is not economically justified, but it is economically
justified when considered together with other arrangements.
If each of the multiple transactions does not form part of a bundled transaction, the transactions conducted before the loss of
control of the subsidiary are accounted for in accordance with the accounting policy for partial disposal of equity investment
in subsidiaries where control is retained (see Note III.6(4)).
If each of the multiple transactions forms part of a bundled transaction which eventually results in the loss of control in the
subsidiary, these multiple transactions are accounted for as a single transaction. In the consolidated financial statements, the
difference between the consideration received and the corresponding proportion of the subsidiary’s net assets (calculated
continuously from the acquisition date) in each transaction prior to the loss of control shall be recognized in other
comprehensive income and transferred to profit or loss when the parent eventually loses control of the subsidiary.
(4) Changes in non-controlling interests
Where the Company acquires a non-controlling interest from a subsidiary’s non-controlling shareholders or disposes of a
portion of an interest in a subsidiary without a change in control, the difference between the proportion interests of the
subsidiary’s net assets being acquired or disposed and the amount of the consideration paid or received is adjusted to the
capital reserve (share premium) in the consolidated balance sheet, with any excess adjusted to retained earnings.
7 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily withdrawn on demand, and short-term, highly
liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of change
in value.
8 Foreign currency transactions and translation of foreign currency financial statements
When the Group receives capital in foreign currencies from investors, the capital is translated to Renminbi at the spot
exchange rate at the date of the receipt. Other foreign currency transactions are, on initial recognition, translated to Renminbi
at the rates that approximate the spot exchange rates on the dates of the transactions.
Monetary items denominated in foreign currencies are translated to Renminbi at the spot exchange rate at the balance sheet
date. The resulting exchange differences are generally recognized in profit or loss, unless they arise from the re-translation of
the principal and interest of specific borrowings for the construction of qualifying assets (see Note III.16). Non-monetary
items that are measured at historical cost in foreign currencies are translated to Renminbi using the exchange rate at the
transaction date. Non-monetary items that are measured at fair value in foreign currencies are translated using the exchange
rate at the date the fair value is determined. The resulting exchange differences are recognized in profit or loss, except for the
differences arising from the re-translation of available-for-sale financial assets, which are recognized in other comprehensive
income.
Assets and liabilities of foreign operation are translated to Renminbi at the spot exchange rate at the balance sheet date.
Equity items, excluding “retained earnings and translation differences with respect to a foreign operation in other
comprehensive income”, are translated to Renminbi at the spot exchange rates at the transaction dates. Income and expenses
of foreign operations are translated to Renminbi at the rates that approximate the spot exchange rates at the transaction dates.
The resulting translation differences are recognized in other comprehensive income. The translation differences accumulated
in shareholders’ equity with respect to a foreign operation are transferred to profit or loss in the period when the foreign
operation is disposed.
Page 24
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
9 Financial instruments
Financial instruments include cash at bank and on hand, investments in debt and equity securities other than those classified
as long-term equity investments (see Note III.12), receivables, payables, loans and borrowings, debentures payable and share
capital.
(1) Recognition and measurement of financial assets and financial liabilities
A financial asset or financial liability is recognized in the balance sheet when the Group becomes a party to the contractual
provisions of a financial instrument.
The Group classifies financial assets and liabilities into different categories at initial recognition based on the purpose of
acquiring assets or assuming liabilities: financial assets and financial liabilities at fair value through profit or loss, loans and
receivables, held-to-maturity investments, available-for-sale financial assets and other financial liabilities.
Financial assets and financial liabilities are measured initially at fair value. For financial assets and financial liabilities at fair
value through profit or loss, any related directly attributable transaction costs are charged to profit or loss; for other categories
of financial assets and financial liabilities, any related directly attributable transaction costs are included in their initial costs.
Subsequent to initial recognition, financial assets and liabilities are measured as follows:
- Financial assets and financial liabilities at fair value through profit or loss (including financial assets or financial
liabilities held for trading)
Subsequent to initial recognition, financial assets and financial liabilities at fair value through profit or loss are measured
at fair value, and changes therein are recognized in profit or loss.
- Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market.
Subsequent to initial recognition, receivables are measured at amortized cost using the effective interest method.
Page 25
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
- Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity
that the Group has the positive intention and ability to hold to maturity.
Subsequent to initial recognition, held-to-maturity investments are measured at amortized cost using the effective interest
method.
- Available-for-sale financial assets
Available-for-sale financial assets include non-derivative financial assets that are designated upon initial recognition as
available for sale and other financial assets which do not fall into any of the above categories.
Available-for-sale investments in equity instruments whose fair value cannot be measured reliably are measured at cost
subsequent to initial recognition. Other available-for-sale financial assets are measured at fair value subsequent to initial
recognition and changes therein are recognized in other comprehensive income, except for impairment losses and foreign
exchange gains and losses from monetary financial assets which are recognized directly in profit or loss. Dividend
income is recognized in profit or loss when the investee approves the dividends. Dividend income is recognized in profit
or loss when the investee approves the dividends. Interest is recognized in profit or loss using the effective interest
method (see Note III.23 (4)).
- Other financial liabilities
Financial liabilities other than the financial liabilities at fair value through profit or loss are classified as other financial
liabilities.
Other financial liabilities include liabilities arising from financial guarantee contracts. Financial guarantees are contracts
that require the Group (i.e. the guarantor) to make specified payments to reimburse the beneficiary of the guarantee (the
holder) for a loss the holder incurs because a specified debtor fails to make payment when due in accordance with the
terms of a debt instrument. Where the Group issues a financial guarantee, subsequent to initial recognition, the guarantee
is measured at the higher of the amount initially recognized less accumulated amortisation and the amount of a provision
determined in accordance with the principles for contingent liabilities (see Note III.22).
Liabilities other than those arising from financial guarantee contracts are measured at amortized cost using the effective
interest method.
(2) Presentation of financial assets and financial liabilities
Financial assets and financial liabilities are generally presented separately in the balance sheet, and are not offset. However, a
financial asset and a financial liability are offset and the net amount is presented in the balance sheet when both of the
following conditions are satisfied:
- the Group currently has a legally enforceable right to set off the recognized amounts;
- the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
simultaneously.
Page 26
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(3) Derecognition of financial assets and financial liabilities
A financial asset is derecognized when one of the following conditions is met:
- the Company’s contractual rights to the cash flows from the financial asset expire;
- the financial asset has been transferred and the Group transfers substantially all of the risks and rewards of ownership of the
financial asset; or
- the financial asset has been transferred, although the Group neither transfers nor retains substantially all of the risks and
rewards of ownership of the financial asset, it does not retain control over the transferred asset.
Where a transfer of a financial asset in its entirety meets the criteria for derecognition, the difference between the two
amounts below is recognized in profit or loss:
- the carrying amount of the financial asset transferred;
- the sum of the consideration received from the transfer and any cumulative gain or loss that has been recognized directly in
shareholders’ equity.
The Group derecognizes a financial liability (or part of it) only when its contractual obligation (or part of it) is discharged or
cancelled or expires.
(4) Impairment of financial assets
The carrying amounts of financial assets (other than those at fair value through profit or loss) are reviewed at each balance
sheet date to determine whether there is objective evidence of impairment. If any such evidence exists, an impairment loss is
recognized.
Objective evidence that a financial asset is impaired includes but is not limited to:
(a) significant financial difficulty of the issuer or obligor;
(b) a breach of contract by the borrower, such as a default or delinquency in interest or principal payments;
(c) it becoming probable that the borrower will enter bankruptcy or other financial reorganisation;
(d) the disappearance of an active market for that financial asset because of financial difficulties faced by the issuer;
(e) significant changes with an adverse effect that have taken place in the technological, market, economic or legal
environment in which the issuer operates, indicating that the cost of an investment in an equity instrument may not be
recovered by the investor;
(f) a significant (i.e. a decline of 50%) or prolonged decline in the fair value (i.e. a decline persisting for nine months) o
an investment in an equity instrument below its cost.
Page 27
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
For the calculation method of impairment of receivables, refer to Note III.10. The impairment of other financial assets is
measured as follows:
- Held-to-maturity investments
Held-to-maturity investments are assessed for impairment on an individual basis as follows.
Where impairment is assessed on an individual basis, an impairment loss in respect of a held-to-maturity investment is
calculated as the excess of its carrying amount over the present value of the estimated future cash flows (excluding future
credit losses that have not been incurred) discounted at the original effective interest rate. Impairment losses are
recognized in profit or loss.
If, after an impairment loss has been recognized on held-to-maturity investments, there is a recovery in the value of the
financial asset which can be related objectively to an event occurring after the impairment was recognized, the previously
recognized impairment loss is reversed through profit or loss. A reversal of an impairment loss will not result in the
asset’s carrying amount exceeding what the amortized cost would have been had no impairment loss been recognized in
prior years.
- Available-for-sale financial assets
Available-for-sale financial assets are assessed for impairment on an individual basis and on a collective group basis as
follows. When an available-for-sale financial asset is impaired, the cumulative loss arising from a decline in fair value
that has been recognized directly in shareholders’ equity is reclassified to profit or loss even though the financial asset has
not been derecognized.
If, after an impairment loss has been recognized on an available-for-sale debt instrument, the fair value of the debt
instrument increases in a subsequent period and the increase can be objectively related to an event occurring after the
impairment loss was recognized, the impairment loss is reversed through profit or loss. An impairment loss recognized
for an investment in an equity instrument classified as available-for-sale is not reversed through profit or loss. The
impairment loss on an investment in an unquoted equity instrument whose fair value cannot be reliably measured is not
reversed.
(5) Equity instrument
The consideration received from the issuance of equity instruments net of transaction costs is recognized in shareholders’
equity. Consideration and transaction costs paid by the Company for repurchasing self-issued equity instruments are deducted
from shareholders’ equity.
When the Company repurchases its own shares, those shares are treated as treasury shares. All expenditure relating to the
repurchase is recorded in the cost of the treasury shares, with the transaction recording in the share register. Treasury shares
are excluded from profit distributions and are presented as a deduction under shareholders’ equity in the balance sheet.
When treasury shares are cancelled, the share capital should be reduced to the extent of the total par value of the treasury
shares cancelled. Where the cost of the treasury shares cancelled exceeds the total par value, the excess is deducted from
capital reserve (share premium), surplus reserve and retained earnings sequentially. If the cost of treasury shares cancelled is
less than the total par value, the difference is credited to the capital reserve (share premium).
When treasury shares are disposed of, any excess of proceeds above cost is recognized in capital reserve (share premium);
otherwise, the shortfall is deducted against capital reserve (share premium), surplus reserve and retained earnings
sequentially.
(6) Convertible instruments
- Convertible instruments containing an equity component
Convertible instruments issued by the Group that can be converted to equity shares, where the number of shares to be
issued and the value of consideration to be received at that time do not vary, are accounted for as compound financial
instruments containing both liability and equity components.
Page 28
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
The initial carrying amount of a compound financial instrument is allocated to its equity and liability components. The
amount recognized in the equity is the difference between the fair value of the instrument as a whole and the separately
determined fair value of the liability component (including the fair value of any embedded derivatives other than the
equity component). Transaction costs that relate to the issuance of a compound financial instrument are allocated to the
liability and equity components in proportion to the allocation of proceeds.
Subsequent to initial recognition, the liability component is measured at amortized cost using the effective interest
method, unless it is designated upon recognition at fair value through profit or loss. The equity component is not
re-measured.
If the convertible instrument is converted, the liability component, together with the equity component, is transferred to
equity. If the convertible instrument is redeemed, the consideration paid for the redemption, together with the transaction
costs that relate to the redemption, are allocated to the liability and equity components. The method used to allocate the
consideration and transaction costs is the same as that used for issuance. After allocating the consideration and
transaction costs, the difference between the allocated and carrying amounts is charged to profit and loss if it relates to the
liability component or is directly recognized in equity if it relates to the equity component.
- Other convertible instruments not containing an equity component
For other convertible instruments issued by the Group which do not contain an equity component, at initial recognition,
the derivative component is measured at fair value, and any excess of proceeds over the derivative component is
recognized as the liability component.
The derivative component is subsequently measured at fair value, and gains or losses from the changes in the fair value
are recognized in profit or loss. The liability component is subsequently carried at amortized cost using the effective
interest method.
On conversion, the carrying amounts of the derivative and liability components are transferred to equity. If the instrument
is redeemed, any difference between the redemption amount paid and the carrying amounts of both components is
recognized in profit or loss.
Page 29
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
10 Impairment of receivables
Receivables are assessed for impairment both on an individual basis and on a collective group basis.
Where impairment is assessed on an individual basis, an impairment loss in respect of a receivable is calculated as the excess
of its carrying amount over the present value of the estimated future cash flows (excluding future credit losses that have not
been incurred) discounted at the original effective interest rate. Impairment losses are recognized in profit or loss. The Group
recognized receivables individually greater than RMB 50,000,000 as significant and perform impairment test on an
individual basis. Those receivables individually insignificant but with specific natures, i.e. legal issue or customer credit
issue, are also reviewed and tested on an individual basis.
The assessment is made collectively where receivables share similar credit risk characteristics (including those not having
been individually assessed as impaired), based on their historical loss experiences, and adjusted by the observable factors
reflecting present economic conditions.
If, after an impairment loss has been recognized on receivables, there is a recovery in the value of the financial asset which
can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment
loss is reversed through profit or loss. A reversal of an impairment loss will not result in the asset’s carrying amount
exceeding what the amortized cost would have been had no impairment loss been recognized in prior years.
11 Inventories
(1) Classification and cost
Inventories include raw materials, work in progress, finished goods and reusable materials. Reusable materials include
low-value consumables, packaging materials and other materials, which can be used repeatedly but do not meet the definition
of fixed assets.
Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversion and other
expenditure incurred in bringing the inventories to their present location and condition. In addition to the purchase cost of
raw materials, work in progress and finished goods include direct labour costs and an appropriate allocation of production
overheads.
(2) Mesurement method of cost of inventories
Cost of inventories is calculated using the weighted average method.
Consumables including low-value consumables and packaging materials are amortized when they are used. The amortisation
charge is included in the cost of the related assets or recognized in profit or loss for the current period.
Page 30
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(3) Basis for determining the net realisable value and method for provision for obsolete inventories
At the balance sheet date, inventories are carried at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and
the estimated costs necessary to make the sale and relevant taxes. The net realisable value of materials held for use in the
production is measured based on the net realisable value of the finished goods in which they will be incorporated. The net
realisable value of the quantity of inventory held to satisfy sales or service contracts is measured based on the contract price.
If the quantities held by the Group are more than the quantities of inventories specified in sales contracts, the net realisable
value of the excess portion of inventories is measured based on general selling prices.
Any excess of the cost over the net realisable value of each category of inventories is recognized as a provision for obsolete
inventories, and is recognized in profit or loss.
(4) Inventory count system
The Group maintains a perpetual inventory system.
12 Long-term equity investments
(1) Investment cost of long-term equity investments
(a) Long-term equity investments acquired through a business combination
- The initial cost of a long-term equity investment acquired through a business combination involving entities under
common control is the Company’s share of the carrying amount of the subsidiary’s equity in the consolidated
financial statements of the ultimate controlling party at the combination date. The difference between the initial
investment cost and the carrying amounts of the consideration given is adjusted to the share premium in the
capital reserve, with any excess adjusted to retained earnings. For a long-term equity investment in a subsidiary
acquired through a business combination achieved in stages which do not form a bundled transaction and
involving entities under common control, the Company determines the initial cost of the investment in
accordance with the above policies. The difference between this initial cost and the sum of the carrying amount
of previously-held investment and the consideration paid for the shares newly acquired is adjusted to share
premium in the capital reserve, with any excess adjusted to retained earnings.
- For a long-term equity investment obtained through a business combination not involving entities under common
control, the initial cost comprises the aggregate of the fair value of assets transferred, liabilities incurred or
assumed, and equity securities issued by the Company, in exchange for control of the acquiree. For a long-term
equity investment obtained through a business combination not involving entities under common control and
achieved through multiple transactions in stages which do not form a bundled transaction, the initial cost
comprises the carrying amount of the previously-held equity investment in the acquiree immediately before the
acquisition date, and the additional investment cost at the acquisition date.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(b) Long-term equity investments acquired other than through a business combination
- A long-term equity investment acquired other than through a business combination is initially recognized at the
amount of cash paid if the Group acquires the investment by cash, or at the fair value of the equity securities
issued if an investment is acquired by issuing equity securities.
(2) Subsequent measurement of long-term equity investment
(a) Investments in subsidiaries
In the Company’s separate financial statements, long-term equity investments in subsidiaries are accounted for using
the cost method for subsequent measurement, unless the investment is classified as held for sale (see Note III.28).
Except for cash dividends or profit distributions declared but not yet distributed that have been included in the price
or consideration paid in obtaining the investments, the Company recognizes its share of the cash dividends or profit
distributions declared by the investee as investment income for the current period.
The investments in subsidiaries are stated in the balance sheet at cost less accumulated impairment losses.
For the impairment of the investments in subsidiaries, refer to Note III.20.
In the Group’s consolidated financial statements, investments in subsidiaries are accounted for in accordance with the
policies described in Note III.6.
(b) Investment in joint ventures and associates
A joint venture is an arrangement whereby the Group and other parties have joint control (see Note III.12(3)) and
rights to the net assets of the arrangement.
An associate is an entity over which the Group has significant influence (see Note III.12(3)).
A long-term equity investment in a joint venture or an associate is accounted for using the equity method for
subsequent measurement, unless the investment is classified as held for sale (see Note III.28).
The accounting treatments under the equity method adopted by the Group are as follows:
- Where the initial cost of a long-term equity investment exceeds the Group’s interest in the fair value of the
investee’s identifiable net assets at the date of acquisition, the investment is initially recognized at cost. Where the
initial investment cost is less than the Group’s interest in the fair value of the investee’s identifiable net assets at
the date of acquisition, the investment is initially recognized at the investor’s share of the fair value of the
investee’s identifiable net assets, and the difference is recognized in profit or loss.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
- After the acquisition of the investment, the Group recognizes its share of the investee’s profit or loss and other
comprehensive income as investment income or losses and other comprehensive income respectively, and adjusts
the carrying amount of the investment accordingly. Once the investee declares any cash dividends or profit
distributions, the carrying amount of the investment is reduced by the amount attributable to the Group. Changes
in the Group’s share of the investee’s shareholders’ equity, other than those arising from the investee’s net profit
or loss, other comprehensive income or profit distribution (“other changes in owners’ equity”), is recognized
directly in the Group’s equity, and the carrying amount of the investment is adjusted accordingly.
- In calculating its share of the investee’s net profits or losses, other comprehensive income and other changes in
owners’ equity, the Group recognizes investment income and other comprehensive income after making
appropriate adjustments to align the accounting policies or accounting periods with those of the Group based on
the fair value of the investee’s identifiable net assets at the date of acquisition. Unrealised profits and losses
resulting from transactions between the Group and its associates or joint ventures are eliminated to the extent of
the Group’s interest in the associates or joint ventures. Unrealised losses resulting from transactions between
the Group and its associates or joint ventures are eliminated in the same way as unrealised gains but only to the
extent that there is no impairment.
- The Group discontinues recognising its share of further losses of the investee after the carrying amount of the
long-term equity investment and any long-term interest that in substance forms part of the Group’s net investment
in the joint venture or associate is reduced to zero, except to the extent that the Group has an obligation to assume
additional losses. If the joint venture or associate subsequently reports net profits, the Group resumes
recognising its share of those profits only after its share of the profits has fully covered the share of losses not
recognized. For the Group’s impairment of the investments in joint ventures and associates, refer to Note III.20.
(3) Criteria for determining the existence of joint control or significant influence over an investee
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the
relevant activities (activities with significant impact on the returns of the arrangement) require the unanimous consent of the
parties sharing control.
The following factors are usually considered when assessing whether the Group can exercise joint control over an investee:
Whether no single participant party is in a position to control the investee’s related activities unilaterally;
Whether strategic decisions relating to the investee’s related activities require the unanimous consent of all participant parties
that sharing of control.
Significant influence is the power to participate in the financial and operating policy decisions of an investee but does not
have control or joint control over those policies.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
13 Investment properties
Investment properties are properties held either to earn rental income or for capital appreciation or for both. Investment
properties are accounted for using the cost model and stated in the balance sheet at cost less accumulated depreciation,
amortisation and impairment losses. The cost of investment property, less its estimated residual value and accumulated
impairment losses, is depreciated or amortized using the straight-line over its estimated useful life, unless the investment
property is classified as held for sale (see Note III.28). For the impairment of the investment properties, refer to Note III.20.
The estimated useful lives, residual value rates and depreciation rates of each class of investment properties are as follows:
Estimated useful life Residual value rate
(years) (%) Depreciation rate (%)
Land use rights 32 to 50 years 0.0% 2.0% - 3.1%
Buildings 25 to 40 years 3.0% - 10.0% 2.3% - 3.9%
14 Fixed assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Group for use in production of goods, supply of services, for rental or
for administrative purposes with useful lives over one accounting year.
The cost of a purchased fixed asset comprises the purchase price, related taxes, and any directly attributable expenditure for
bringing the asset to working condition for its intended use. The cost of self-constructed assets is measured in accordance
with the policy set out in Note III.15.
Where the parts of an item of fixed assets have different useful lives or provide benefits to the Group in a different pattern,
thus necessitating use of different depreciation rates or methods, each part is recognized as a separate fixed asset.
Any subsequent costs including the cost of replacing part of an item of fixed assets are recognized as assets when it is
probable that the economic benefits associated with the costs will flow to the Group, and the carrying amount of the replaced
part is derecognized. The costs of the day-to-day maintenance of fixed assets are recognized in profit or loss as incurred.
Fixed assets are stated in the balance sheet at cost less accumulated depreciation and impairment losses.
(2) Depreciation of fixed assets
The cost of a fixed asset, less its estimated residual value and accumulated impairment losses, is depreciated using the
straight-line method over its estimated useful life, unless the fixed asset is classified as held for sale (see Note III.28).
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
The estimated useful lives, residual value rates and depreciation rates of each class of fixed assets are as follows:
Estimated useful life Residual value rate
Class (years) (%) Depreciation rate (%)
Plant and buildings 10 to 50 years 3% - 10% 1.8% - 9.7%
Equipment 2 to 25 years 0 - 10% 3.6% - 50%
Others 2 to 10 years 0 - 10% 9.0% - 50%
Useful lives, residual values and depreciation methods are reviewed at least at each year-end.
(3) For the impairment of the fixed assets, refer to Note III.20.
(4) For the recognition, measurement and depreciation of fixed assets acquired under finance leases, refer to Note III.27.
(5) Disposal of fixed assets
The carrying amount of a fixed asset is derecognized:
when the fixed asset is holding for disposal; or
when no future economic benefit is expected to be generated from its use or disposal.
Gains or losses arising from the retirement or disposal of an item of fixed asset are determined as the difference between the
net disposal proceeds and the carrying amount of the item, and are recognized in profit or loss on the date of retirement or
disposal.
15 Construction in progress
The cost of self-constructed assets includes the cost of materials, direct labour, capitalised borrowing costs (see Note III.16),
and any other costs directly attributable to bringing the asset to working condition for its intended use.
A self-constructed asset is classified as construction in progress and transferred to fixed asset when it is ready for its intended
use. No depreciation is provided against construction in progress.
Construction in progress is stated in the balance sheet at cost less accumulated impairment losses (see Note III.20).
16 Borrowing costs
Borrowing costs incurred directly attributable to the acquisition and construction of a qualifying asset are capitalised as part
of the cost of the asset. Other borrowing costs are recognized as financial expenses when incurred.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
During the capitalisation period, the amount of interest (including amortisation of any discount or premium on borrowing) to
be capitalised in each accounting period is determined as follows:
- Where funds are borrowed specifically for the acquisition and construction of a qualifying asset, the amount of interest to
be capitalised is the interest expense calculated using effective interest rates during the period less any interest income
earned from depositing the borrowed funds or any investment income on the temporary investment of those funds before
being used on the asset.
- To the extent that the Group borrows funds generally and uses them for the acquisition, construction of a qualifying asset,
the amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation rate to the weighted
average of the excess amounts of cumulative expenditures on the asset over the above amounts of specific borrowings.
The capitalisation rate is the weighted average of the interest rates applicable to the general-purpose borrowings.
The effective interest rate is determined as the rate that exactly discounts estimated future cash flow through the expected life
of the borrowing or, when appropriate, a shorter period to the initially recognized amount of the borrowings.
During the capitalisation period, exchange differences related to the principal and interest on a specific-purpose borrowing
denominated in foreign currency are capitalised as part of the cost of the qualifying asset. The exchange differences related to
the principal and interest on foreign currency borrowings other than a specific-purpose borrowing are recognized as a
financial expense when incurred.
The capitalisation period is the period from the date of commencement of capitalisation of borrowing costs to the date of
cessation of capitalisation, excluding any period over which capitalisation is suspended. Capitalisation of borrowing costs
commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities of acquisition,
construction that are necessary to prepare the asset for its intended use are in progress, and ceases when the assets become
ready for their intended use. When the parts of the qualifying assets acquired or constructed that are eligible for capitalisation
are completed separately, and each part is available for use in other parts of the construction process or can be sold externally,
and for the purpose of making the parts of the assets ready for use or necessary for the sales status, the acquisition or
construction activities have been substantially completed, the Group ceases the capitalization of the borrowing costs related
to the parts of the assets. Capitalisation of borrowing costs is suspended when the acquisition, construction activities are
interrupted abnormally for a period of more than three months.
17 Intangible assets
Intangible assets are stated in the balance sheet at cost less accumulated amortization (where the estimated useful life is
finite) and impairment losses (see Note III.20). For an intangible asset with finite useful life, its cost estimated less residual
value and accumulated impairment losses is amortized on the straight-line method over its estimated useful life, unless the
intangible asset is classified as held for sale (see Note III.28).
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
The respective amortisation periods for intangible assets are as follows:
Amortisation period
Item (years)
Land use rights 40 to 50 years
Patent and technology rights 5 to 20 years
Computer software 3 to 10 years
Others 5 to 20 years
An intangible asset is regarded as having an indefinite useful life and is not amortized when there is no foreseeable limit to
the period over which the asset is expected to generate economic benefits for the Group. At the balance sheet date, the Group
does not have any intangible assets with indefinite useful lives.
Expenditure on an internal research and development project is classified into expenditure during the research phase and
expenditure during the development phase.
Expenditure during the research phase is expensed when incurred. Expenditure during the development phase is capitalised if
development costs can be measured reliably, the product or process is technically and commercially feasible, and the Group
has sufficient resources and the intention to complete development. Capitalised development costs are stated in the balance
sheet at cost less impairment losses (see Note III.20). Other development expenditure is recognized as an expense in the
period in which it is incurred.
18 Goodwill
The initial cost of goodwill represents the excess of cost of acquisition over the acquirer’s interest in the fair value of the
identifiable net assets of the acquiree under a business combination not involving enterprises under common control.
Goodwill is not amortized and is stated in the balance sheet at cost less accumulated impairment losses (see Note III.20). On
disposal of an asset group or a set of asset groups, any attributable goodwill is written off and included in the calculation of
the profit or loss on disposal.
19 Long-term deferred expenses
Long-term deferred expenses are amortized using a straight-line method within the benefit period. The respective
amortisation periods for such expenses are as follows:
Amortisation period
Item (years)
Prepayment for public facilities construction and use 10 to 15 years
Cost of operating lease assets improvement 2 to 10 years
Others 2 to 10 years
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
20 Impairment of assets other than inventories and financial assets
The carrying amounts of the following assets are reviewed at each balance sheet date based on internal and external sources
of information to determine whether there is any indication of impairment:
- Fixed assets
- Construction in progress
- Intangible assets
- Investment properties measured using a cost model
- Long-term equity investments
- Goodwill
- Long-term deferred expenses, etc.
If any indication exists, the recoverable amount of the asset is estimated. In addition, the Group estimates the recoverable
amounts of goodwill at each year-end, irrespective of whether there is any indication of impairment. Goodwill is allocated to
each asset group or set of asset groups, which is expected to benefit from the synergies of the combination for the purpose of
impairment testing.
The recoverable amount of an asset (or asset group, set of asset groups, the same below) is the higher of its fair value (see
Note III.21) less costs to sell and its present value of expected future cash flows.
An asset group is composed of assets directly related to cash-generation and is the smallest identifiable group of assets that
generates cash inflows that are largely independent of the cash inflows from other assets or asset groups.
The present value of expected future cash flows of an asset is determined by discounting the future cash flows, estimated to
be derived from continuing use of the asset and from its ultimate disposal, to their present value using an appropriate pre-tax
discount rate.
An impairment loss is recognized in profit or loss when the recoverable amount of an asset is less than its carrying amount. A
provision for impairment of the asset is recognized accordingly. Impairment losses related to an asset group or a set of asset
groups are allocated first to reduce the carrying amount of any goodwill allocated to the asset group or set of asset groups,
and then to reduce the carrying amount of the other assets in the asset group or set of asset groups on a pro rata basis.
However, such allocation would not reduce the carrying amount of an asset below the highest of its fair value less costs to
sell (if measurable), its present value of expected future cash flows (if determinable) and zero.
Once an impairment loss is recognized, it is not reversed in a subsequent period.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
21 Fair value measurement
Unless otherwise specified, the Group measures fair value as follows:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
When measuring fair value, the Group takes into account the characteristics of the particular asset or liability (including the
condition and location of the asset and restrictions, if any, on the sale or use of the asset) that market participants would
consider when pricing the asset or liability at the measurement date, and uses valuation techniques that are appropriate in the
circumstances and for which sufficient data and other information are available to measure fair value. Valuation techniques
mainly include the market approach, the income approach and the cost approach.
22 Provisions
A provision is recognized for an obligation related to a contingency if the Group has a present obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation.
Where the effect of the time value of money is material, provisions are determined by discounting the expected future cash
flows. Factors pertaining to a contingency such as the risks, uncertainties and time value of money are taken into account as a
whole in reaching the best estimate. Where there is a continuous range of possible outcomes for the expenditure required, and
each possible outcome in that range is as likely as any other, the best estimate is the mid-point of that range. In other cases,
the best estimate is determined according to the following circumstances:
Where the contingency involves a single item, the best estimate is the most likely outcome.
Where the contingency involves a large population of items, the best estimate is determined by weighting all possible
outcomes by their associated probabilities.
The Group reviews the carrying amount of a provision at the balance sheet date and adjusts the carrying amount to the
current best estimate.
23 Revenue recognition
Revenue is the gross inflow of economic benefits arising in the course of the Group’s ordinary activities when the inflows
result in increase in shareholders’ equity, other than increase relating to contributions from shareholders. Revenue is
recognized in profit or loss when it is probable that the economic benefits will flow to the Group, the revenue and costs can
be measured reliably and the following conditions are met:
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(1) Sale of goods
Revenue is recognized when the general conditions stated above and the following conditions are satisfied:
- Significant risks and rewards of ownership of goods have been transferred to the buyer;
- The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor
effective control over the goods sold.
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable under the sales
contract or agreement.
The sales contracts/orders signed between the Company and its customers (mainly electronic equipment manufacturers)
contain various trading terms. The Company judges the transfer timing of major risks and rewards according to the trading
terms, and recognizes revenue accordingly. Depending on the trading terms, the income is usually recognized when the goods
are delivered and received, or when they are received by the carrier.
(2) Rendering of services
Revenue is measured at the fair value of the consideration received or receivable under the contract or agreement.
Where the outcome of a transaction involving the rendering of services can be estimated reliably, revenue is recognized by
reference to the stage of completion based on the progress of work performed.
Where the outcome cannot be estimated reliably, revenues are recognized to the extent of the costs incurred that are expected
to be recoverable, and an equivalent amount is charged to profit or loss as service cost; otherwise, the costs incurred are
recognized in profit or loss and no service revenue is recognized.
(3) Revenue from construction contracts
Where the outcome of a construction contract can be estimated reliably, contract revenue and contract expenses associated
with the construction contract are recognized using the percentage of completion method.
The stage of completion of a contract is determined based on the proportion of contract costs incurred for work performed to
date to the estimated total contract costs.
When the outcome of a construction contract cannot be estimated reliably:
- If the contract costs can be recovered, revenue is recognized to the extent of contract costs incurred that can be recovered,
and the contract costs are recognized as contract expenses when incurred;
- Otherwise, the contract costs are recognized as contract expenses immediately when incurred, and no contract revenue is
recognized.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(4) Interest income
Interest income is recognized on a time proportion basis with reference to the principal outstanding and the applicable
effective interest rate.
(5) Royalties from intangible assets
Royalty income from intangible assets is determined according to the period and fee calculation method as stipulated in the
relevant contracts or agreements.
24 Employee benefits
(1) Short-term employee benefits
Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
maternity insurance and housing fund, measured at the amount incurred or accrued at the applicable benchmarks and rates,
are recognized as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
cost of assets where appropriate.
(2) Post-employment benefits - defined contribution plans
Pursuant to the relevant laws and regulations of the People’s Republic of China, the Group participated in a defined
contribution basic pension insurance plan and unemployment insurance plan in the social insurance system established and
managed by government organisations, and annuity plan established by the Group in compliance with the national policy of
the corporation annuity. The Group makes contributions to basic pension and unemployment insurance plans based on the
applicable benchmarks and rates stipulated by the government. Annuity is accrued based on the gross salaries of the
employees. Basic pension insurance contributions are recognized as part of the cost of assets or charged to profit or loss as
the related services are rendered by the employees.
(3) Post-employment benefits - defined benefit plans
During the reporting period, the Group did not have defined benefit plans.
(4) Termination benefits
When the Group terminates the employment with employees before the employment contracts expire, or provides
compensation under an offer to encourage employees to accept voluntary redundancy, a provision is recognized with a
corresponding expense in profit or loss at the earlier of the following dates:
- When the Group cannot unilaterally withdraw the offer of termination benefits because of an employee termination plan
or a curtailment proposal;
- When the Group has a formal detailed restructuring plan involving the payment of termination benefits and has raised a
valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing
its main features to those affected by it.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
25 Government grants
Government grants are non-reciprocal transfers of monetary or non-monetary assets from the government to the Group
except for capital contributions from the government in the capacity as an investor in the Group.
A government grant is recognized when there is reasonable assurance that the grant will be received and that the Group will
comply with the conditions attaching to the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If a
government grant is in the form of a transfer of a non-monetary asset, it is measured at fair value.
Government grants related to assets are grants whose primary condition is that the Group qualifying for them should
purchase, construct or otherwise acquire long-term assets. Government grants related to income are grants other than those
related to assets.
Those related to daily activities of the Company are included in other income or used to write off related cost based on the
nature of economic businesses, or included in non-operating income and expense in respect of those not related to daily
activities of the Company.
With respect to the government grants related to assets, if the Group first obtains government grants related to assets and then
recognizes the long-term assets purchased and constructed, deferred income is included in profit and loss based on a
reasonable and systematic approach by stages when related assets are initially depreciated or amortized; or the deferred
income is written off against the carrying amount of the asset when the asset becomes ready for its intended status or intended
use. If the Group obtains government grants related to the assets after relevant long-term assets are put into use, deferred
income is included in profit and loss based on a reasonable and systematic approach by stages within the remaining useful
life of relevant assets, or the deferred income is written off against the carrying amount of relevant asset when the grants are
obtained; the assets shall be depreciated or amortized based on the carrying amount after being offset and the remaining
useful life of relevant assets.
For the government grants related to income which are used to compensate for related costs or losses of the Group in the
future period, it shall be recognized as deferred income, and included in profit and loss or used to offset related costs;
otherwise it shall be directly included in profit and loss or used to offset related costs.
In respect of the policy-based preferential loan interest subsidy obtained by the Group, if the interest subsidy is appropriated
to the lending bank which shall provide loans to the Group at the policy-based preferential interest rate, the actual loan
amount is used as the entry value and relevant borrowing costs are calculated on the basis of the loan principal and the
preferential interest rate. If the interest subsidy is directly appropriated to the Group, relevant borrowing costs shall be offset
by corresponding interest subsidy. If borrowing costs are capitalized as part of the cost of the asset (see Note III. 16), the
interest subsidy shall be used to offset relevant asset costs.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
26 Income tax
Current tax and deferred tax are recognized in profit or loss except to the extent that they relate to a business combination or
items recognized directly in equity (including other comprehensive income).
Current tax is the expected tax payable calculated at the applicable tax rate on taxable income for the year, plus any
adjustment to tax payable in respect of previous years.
At the balance sheet date, current tax assets and liabilities are offset only if the Group has a legally enforceable right to set
them off and also intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Deferred income tax assets and deferred income tax liabilities are determined based on deductible temporary differences and
taxable temporary differences respectively. The temporary differences are the differences between the carrying amounts of
assets and liabilities for financial reporting purposes and their tax bases, which include the deductible tax losses and tax
credits carried forward to subsequent periods. Deferred tax assets are recognized to the extent that it is probable that future
taxable profits will be available against which deductible temporary differences can be utilised.
Deferred tax is not recognized for the temporary differences arising from the initial recognition of assets or liabilities in a
transaction that is not a business combination and that affects neither accounting profit nor taxable profit (or deductible loss).
Deferred tax is not recognized for taxable temporary differences arising from the initial recognition of goodwill.
At the balance sheet date, deferred tax is measured based on the tax consequences that would follow from the expected
manner of recovery or settlement of the carrying amount of the assets and liabilities, using tax rates enacted at the reporting
date that are expected to be applied in the period when the asset is recovered or the liability is settled.
The carrying amount of a deferred tax asset is reviewed at each balance sheet date, and is reduced to the extent that it is no
longer probable that the related tax benefits will be utilised. Such reduction is reversed to the extent that it becomes probable
that sufficient taxable profits will be available.
At the balance sheet date, deferred tax assets and liabilities are offset if all of the following conditions are met:
- The taxable entity has a legally enforceable right to offset current tax liabilities and assets, and
- They relate to income taxes levied by the same tax authority on either: the same taxable entity; or different taxable entities
which intend either to settle the current tax liabilities and current tax assets on a net basis, or to realise the assets and
settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or
deferred tax assets are expected to be settled or recovered.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
27 Operating leases and finance leases
A lease is classified as either a finance lease or an operating lease. A finance lease is a lease that transfers substantially all the
risks and rewards incidental to ownership of a leased asset to the lessee, irrespective of whether the legal title to the asset is
eventually transferred. An operating lease is a lease other than a finance lease.
(1) Operating lease charges
Rental payments under operating leases are recognized as part of the cost of another related asset or as expenses on a
straight-line basis over the lease term.
(2) Assets leased out under operating leases
Fixed assets leased out under operating leases, except for investment properties (see Note III.13), are depreciated in
accordance with the Group’s depreciation policies described in Note III.14(2). Impairment losses are recognized in
accordance with the accounting policy described in Note III.20. Income derived from operating leases is recognized in profit
or loss using the straight-line method over the lease term. If initial direct costs incurred in respect of the assets leased out are
material, the costs are initially capitalised and subsequently amortized in profit or loss over the lease term on the same basis
as the lease income. Otherwise, the costs are charged to profit or loss immediately.
(3) Assets acquired under finance leases
At the commencement of the lease term, the minimum lease payments are recorded as long-term payables. The difference
between the carrying amount of the leased assets and the minimum lease payments is accounted for as unrecognized finance
charges. Initial direct costs attributable to a finance lease that are incurred by the Group are added to the carrying amount of
the leased asset. Depreciation and impairment losses are accounted for in accordance with the accounting policies described
in Notes III.14 (2) and III.20, respectively.
If there is reasonable certainty that the Group will obtain ownership of a leased asset at the end of the lease term, the leased
asset is depreciated over its estimated useful life. Otherwise, the leased asset is depreciated over the shorter of the lease term
and its estimated useful life.
Unrecognized finance charges arising from a finance lease are recognized using an effective interest method over the lease
term. The amortisation is accounted for in accordance with the principles of borrowing costs (see Note III.16).
At the balance sheet date, the long-term payables arising from finance leases, net of the unrecognized finance charges, are
analysed and separately presented as long-term payables or non-current liabilities due within one year.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
28 Assets held for sale and discontinued operations
(1) Assets held for sale
The Group classified a non-current asset or disposal group as held for sale when the carrying amount of a non-current asset or
disposal group will be recovered through a sale transaction rather than through continuing use.
A disposal group refers to a group of assets to be disposed of, by sale or otherwise, together as a whole in a single transaction
and liabilities directly associated with those assets that will be transferred in the transaction.
A non-current asset or disposal group is accounted for as held for sale when all the following criteria are met:
- According to the customary practices of selling such asset or disposal group in similar transactions, the non-current asset or
disposal group must be available for immediate sale in their present condition subject to terms that are usual and
customary for sales of such assets or disposal groups;
- Its sale is highly probable, that is, the Group has made a resolution on a sale plan and has obtained a firm purchase
commitment. The sale is to be completed within one year.
Non-current assets or disposal groups held for sale are stated at the lower of carrying amount and fair value (see Note III.21)
less costs to sell (except financial assets (see Note III.9) and deferred tax assets (see Note III.26)) initially and subsequently.
Any excess of the carrying amount over the fair value (see Note III.21) less costs to sell is recognized as an impairment loss
in profit or loss.
(2) Discontinued operations
The Group classifies a component that is separately identifiable, and the component either has been disposed of or is
classified as held for sale, and satisfies one of the following conditions as a discontinued operation:
- It represents a separate major line of business or separate geographical area of operations;
- It is part of a single co-ordinated plan to dispose of a separate major line of business or separate geographical area of
operations;
- It is a subsidiary acquired exclusively with a view to resale.
For the Group's discontinued operations during the current period, the profit and loss from continuing operations and the
profit and loss from discontinued operations are respectively presented in the income statement, and the information
previously presented as the profit and loss from continuing operations is reclassified as the profit and loss from discontinued
operations in the comparable accounting period in the income statement of the comparative period.
29 Profit distributions
Dividends or profit distributions proposed in the profit appropriation plan, which will be approved after the balance sheet
date, are not recognized as a liability at the balance sheet date but are disclosed in the notes separately.
30 Related parties
If a party has the power to control, jointly control or exercise significant influence over another party, or vice versa, or where
two or more parties are subject to common control or joint control from another party, they are considered to be related
parties. Related parties may be individuals or enterprises. Enterprises with which the Company is under common control only
from the State and that have no other related party relationships are not regarded as related parties.
In addition to the related parties stated above, the Company determines related parties based on the disclosure requirements
of Administrative Procedures on the Information Disclosures of Listed Companies issued by the CSRC.
31 Segment reporting
Operating segments are determined based on the structure of the Group’s internal organisation, management requirements
and internal reporting system. Two or more operating segments may be aggregated into a single operating segment if the
Page 45
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
segments have similar economic characteristics, and are same or similar in respect of the nature of each product and service;
the nature of production processes; the type or class of customers for the products and services; the methods used to distribute
the products or provide the services; the nature of the regulatory environment. Reportable segments are identified based on
operating segments taking into account of materiality principle.
Inter-segment revenues are measured on the basis of actual transaction price for such transactions for segment reporting.
Segment accounting policies are consistent with those for the consolidated financial statements.
32 Significant accounting estimates and judgements
The preparation of financial statements requires management to make estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates. Estimates as well as underlying assumptions and uncertainties involved are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods
affected.
Expect for accounting estimates related to depreciation and amortisation of assets such as fixed assets and intangible assets
(see Note III. 14 and 17) and provision for impairment of various types of assets (see Note V. 2, 4, 5, 7, 8, 10, 11, 12, and 13,
and Note XIV. 2 and 3). Other significant accounting estimates are as follows:
(i) Note V. 15 – Recognition of deferred tax asset;
(ii) Note V. 24 – Assurance of product quality;
(iii) Note IX. – Fair value measurements of financial instruments.
Significant judgements made by the Group in the application of accounting policies are as follows:
(i) Note V. 30 – Convertible debt and equity investment with redemption provisions terms are categorised as financial
liabilities; and
(ii) Note VII. 1(1) –Disclosure of significant judgements and assumptions of control and exercising
significant influence over other entities.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
33 Changes in accounting policies
Changes in accounting policies and their reasons
The MOF issued the following interpretations and amendments of the Accounting Standards for Business Enterprises during
2017 and 2018:
-
-
-
- (Cai Kuai [2018] No. 15) and relevant
interpretations.
The Group has implemented the above-mentioned interpretations and amendments of accounting standard since January 1,
2018, and adjusted the relevant contents of accounting policies.
Impacts of the adoption of the above accounting standards and regulations are as follows:
(a) Interpretation No. 9 - 12
The Group's accounting policies are based on the accounting treatment of the net loss of investment under the equity
method in Interpretation No.9 - 12, and the depreciation and amortization method of fixed assets and intangible
assets, and the related party recognition and disclosure requirements of key management personnel services are
adjusted.
The adoption of Interpretation No. 9 -12 has no material impact on the financial position and the financial result of
the Group.
(b) Presentation of financial statement
The Group has prepared financial statements for the year ended 31 December 2018 in accordance with Caikuai
[2018] No.15. Comparative figures have been adjusted retrospectively.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
Impacts of related presentation adjustment are as follows:
Items affected in consolidated balance sheet and company balance sheet on 31
December 2018:
The Group
Before adjustment Adjusted amount After adjustment
Bills receivable 833,268,127 (833,268,127) -
Accounts receivable 15,513,763,252 (15,513,763,252) -
Bills receivable and accounts
receivable - 16,347,031,379 16,347,031,379
Interest receivable 89,628,559 (89,628,559) -
Other receivables 728,395,573 89,628,559 818,024,132
Bills payable 543,798,835 (543,798,835) -
Accounts payable 16,205,788,698 (16,205,788,698) -
Bills payable and accounts
payable - 16,749,587,533 16,749,587,533
Interest payable 847,955,186 (847,955,186) -
Dividends payable 9,651,170 (9,651,170) -
Other payables 15,264,806,774 857,606,356 16,122,413,130
Total -
The Company
Before adjustment Adjusted amount After adjustment
Accounts receivable 39,897,385 (39,897,385) -
Bills receivable and accounts
receivable - 39,897,385 39,897,385
Dividends receivable 10,404,147 (10,404,147) -
Other receivables 1,824,727,573 10,404,147 1,835,131,720
Accounts payable 50,152,503 (50,152,503) -
Bills payable and accounts
payable - 50,152,503 50,152,503
Interest payable 312,029,252 (312,029,252) -
Dividends payable 6,451,170 (6,451,170) -
Other payables 9,713,912,548 318,480,422 10,032,392,970
Total -
Page 48
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
Items affected in consolidated income statement and company income statement in
2017:
The Group
Before adjustment Adjusted amount After adjustment
Administrative expenses 7,246,543,340 (3,177,767,395) 4,068,775,945
Research and development costs - 3,177,767,395 3,177,767,395
Total -
The Company
Before adjustment Adjusted amount After adjustment
Administrative expenses 1,719,668,597 (1,027,250,122) 692,418,475
Research and development costs - 1,027,250,122 1,027,250,122
Total -
Items affected in consolidated cash flow statement in 2017:
The Group
Before adjustment Adjusted amount After adjustment
Cash inflows from operating
activities 111,934,693,142 459,943,640 112,394,636,782
Cash inflows from investing
activities 33,347,868,918 (459,943,640) 32,887,925,278
Total -
According to the relevant interpretation of Caikuai [2018] No. 15, the Group will adjust
the government subsidies received related to assets from “cash inflows from investing
activities” to “cash inflows from operating activities” and present.
Page 49
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
IV. Taxation
1 Main types of taxes and corresponding tax rates
Tax Name Tax basis Tax rate
Value-added tax Output VAT is calculated on product sales and 6%，10%，11%
(VAT) taxable services revenue. The basis for VAT 16%，17%
payable is to deduct input VAT from the output
VAT for the period
City maintenance Based on business tax and VAT paid, and VAT 7%，5%
and exemption and offset for the period
construction tax
Education Based on business tax and VAT paid, and VAT 3%，2%
surcharges and exemption and offset for the period
local education
surcharges
Corporate Based on taxable profits 15% - 25%
income tax
2 Corporate income tax
The income tax rate applicable to the Company for the year is 15% (2017: 15%).
Pursuant to the Corporate Income Tax Law of the People’s Republic of China treatment No.28, corporate income tax for key
advanced and high-tech enterprises supported by the State is applicable to a preferential tax rate of 15%.
On 25 October 2017, the Company renewed the High-tech Enterprise Certificate No. GR201711002584, which was entitled
jointly by Beijing Municipal Science and Technology Commission, Beijing Municipal Financial Bureau, Beijing Municipal
State Administration of Taxation and Beijing Municipal Local Administration of Taxation. The Company is subject to
corporate income tax rate of 15% since the date of certification with the valid period of three years.
The income tax rate applicable to other subsidiaries of the Group is 25% other than the following subsidiaries and the
overseas subsidiaries which subject to the local income tax rate.
Page 50
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
The subsidiaries that are entitled to preferential tax treatments are as follows:
Preferential
Company name rate Reason
Beijing BOE Optoelectronics Technology Co., Ltd. (BOE OT) 15% High-tech Enterprise
Chengdu BOE Optoelectronics Technology Co., Ltd (Chengdu
Optoelectronics ) 15% High-tech Enterprise
Hefei BOE Optoelectronics Technology Co., Ltd.(Hefei BOE) 15% High-tech Enterprise
Beijing BOE Display Technology Co., Ltd. (BOE Display) 15% High-tech Enterprise
Hefei Xinsheng Optoelectronics Technology Co., Ltd. (Hefei Xinsheng) 15% High-tech Enterprise
Encouraged enterprise in Western
Ordos Yuansheng Optoelectronics Co., Ltd. (Yuansheng Optoelectronics) 15% Regions
Encouraged enterprise in Western
Chongqing BOE Optoelectronics Co., Ltd. (Chongqing BOE) 15% Regions
BOE (Hebei) Mobile Technology Co., Ltd. (BOE Hebei) 15% High-tech Enterprise
BOE Optical Science and technology Co., Ltd (Optical Technology) 15% High-tech Enterprise
Beijing BOE CHATANI ElectronicsCo.,Ltd. (Beijing CHATANI) 15% High-tech Enterprise
Hefei BOE Display Lighting Co.,Ltd. (Hefei Display Lighting) 15% High-tech Enterprise
Chongqing BOE Display Lighting Co.,Ltd. (Chongqing Display Lighting) 15% High-tech Enterprise
BOE Semi-conductor Co., Ltd. (BOE Semiconductor) 15% High-tech Enterprise
Hefei BOE Semiconductor Co.,Ltd. (Hefei Semiconductor) 15% High-tech Enterprise
Beijing BOE Special Display Technology Co., Ltd. (Special Display) 15% High-tech Enterprise
Beijing BOE Vacuum Electronics Co., Ltd. (Vacuum Electronics) 15% High-tech Enterprise
Beijing Asahi Electronic Materials Co.,Ltd. (Asahi Materials) 15% High-tech Enterprise
Beijing BOE Vacuum Technology Co., Ltd. (Vacuum Technology) 15% High-tech Enterprise
Beijing BOE Energy Technology Co., Ltd. (BOE Energy) 15% High-tech Enterprise
Beijing BOE multimedia Technology Co., Ltd. (BOE multimedia) 15% High-tech Enterprise
Fuzhou BOE Optoelectronics Technology Co., Ltd. (Fuzhou BOE) 15% High-tech Enterprise
Hefei BOE Vision-Electronic Technology Co., Ltd. (Hefei
Vision-Electronic Technology) 15% High-tech Enterprise
Encouraged enterprise in Western
Mianyang BOE Optoelectronics Technology Co., Ltd. (Mianyang BOE) 15% Regions
BOE Intelligent Technology Co., Ltd. (Intelligent Technology) 15% High-tech Enterprise
Page 51
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
V. Notes to the consolidated financial statements
1. Cash at bank and on hand
2018 2017
Amount in original RMB / Amount in original RMB /
Exchange rate Exchange rate
currency RMB equivalents currency RMB equivalents
Cash on hand:
RMB 285,407 444,343
USD 1,364 6.8632 9,361 891 6.5342 5,822
HKD 56,603 0.8762 49,596 53,705 0.8359 44,892
JPY 1,668,876 0.0619 103,303 55,419 0.0579 3,209
KRW 490,686 0.0061 2,993 513,831 0.0061 3,134
Other foreign
currencies 87,145 25,364
Sub-total 537,805 526,764
Bank Deposits:
RMB 19,526,770,243 24,172,930,297
USD 3,215,270,076 6.8632 22,067,041,586 3,151,375,970 6.5342 20,591,720,863
HKD 36,614,201 0.8762 32,081,363 55,249,266 0.8359 46,182,862
JPY 15,077,127,145 0.0619 933,274,170 21,118,693,041 0.0579 1,222,772,327
KRW 1,274,695,127 0.0061 7,775,640 1,058,266,098 0.0061 6,455,423
EUR 94,362,955 7.8473 740,494,417 236,210,492 7.8023 1,842,985,129
Other foreign
currencies 32,708,963 29,713,710
Sub-total 43,340,146,382 47,912,760,611
Other monetary funds:
RMB 4,883,082,015 7,497,341,876
USD 473,193,118 6.8632 3,247,619,007 262,928,917 6.5342 1,718,030,129
HKD 11,423,973 0.8762 10,009,685 232 0.8359 194
JPY 2,339,530 0.0619 144,817 29 0.0579 2
Sub-total 8,140,855,524 9,215,372,201
Total 51,481,539,711 57,128,659,576
Including: Total overseas deposits were equivalent to RMB 5,012,219,357 (2017: RMB 3,341,984,398).
As at 31 December 2018, other monetary funds were pledged by the Group amounting to USD 305,000,000 for short-term
loans, RMB142,547,192 and and USD 18,500,000 were pledged for long-term loans. The rest of other restricted monetary
funds, amounting to RMB 5,768,050,799, were the deposits in commercial banks as security.
As at 31 December 2017, other monetary funds were pledged by the Group amounting to RMB1,164,000,000 and USD
60,159,875 for short-term loans, and RMB 1,207,705,322 and USD 63,000,000 were pledged for long-term loans. The rest of
other restricted monetary funds, amounting to RMB 6,038,915,416, were the deposits in commercial banks as security.
Page 52
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
2 Bills receivable and accounts receivable
Note 2018 2017
Bills receivable (1) 656,781,577 833,268,127
Accounts receivable (2) 19,880,680,518 15,513,763,252
Total 20,537,462,095 16,347,031,379
(1) Bills receivable
(a) Classification of bills receivable
Item 2018 2017
Bank acceptance bills 655,081,577 824,873,475
Commercial acceptance bills 1,700,000 8,394,652
Total 656,781,577 833,268,127
All of the above bills are due within one year.
(b) Bills receivable pledged at the end of the year
As at 31 December 2018, the pledged bills of the Group amounted to RMB 6,605,869 (2017: RMB 123,826,995).
(c) Outstanding endorsed or discounted bills that have not matured at the end of the year
Amount
Amount derecognized not-derecognized
Item at year end at year end
Bank acceptance bills 32,868,462 200,669,545
Commercial acceptance bills - 1,049,000
Total 32,868,462 201,718,545
For the year ended 31 December 2018, there was no amount transferred to accounts receivable from bills receivable
due to non-performance of the issuers of the Group (2017: nil).
Page 53
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(2) Accounts receivable
(a) The Group’s accounts receivable by customer type:
Item 2018 2017
Amounts due from related parties 52,246 9,600,724
Amounts due from other customers 20,199,950,102 15,808,849,645
Sub-total 20,200,002,348 15,818,450,369
Less: Provision for bad and doubtful
debts 319,321,830 304,687,117
Total 19,880,680,518 15,513,763,252
(b) The Group’s accounts receivable by currency type：
2018 2017
Amount in Exchange RMB / Amount in Exchange RMB /
original currency rate RMB equivalents original currency rate RMB equivalents
RMB 7,253,239,876 4,764,755,351
USD 1,800,476,186 6.8632 12,357,028,161 1,684,267,507 6.5342 11,005,340,743
JPY 36,523,949 0.0619 2,260,467 17,602,919 0.0579 1,019,209
Other foreign
currencies 587,473,844 47,335,066
Sub-total 20,200,002,348 15,818,450,369
Less: Provision for
bad and
doubtful
debts 319,321,830 304,687,117
Total 19,880,680,518 15,513,763,252
Page 54
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(c) The ageing analysis of accounts receivable is as follows:
2018 2017
Within 1 year (inclusive) 19,748,808,258 15,482,151,261
1 to 2 years (inclusive) 136,291,482 293,213,891
2 to 3 years (inclusive) 279,756,940 13,346,163
Over 3 years 35,145,668 29,739,054
Sub-total 20,200,002,348 15,818,450,369
Less: Provision for bad and doubtful
debts 319,321,830 304,687,117
Total 19,880,680,518 15,513,763,252
The ageing is counted starting from the date when accounts receivable are recognized.
Page 55
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(d) Accounts receivable by category
2018 2017
Book value Provision for bad and doubtful debts Book balance Provision for bad and doubtful debts
Category Amount Percentage (%) Amount Percentage (%) Carrying amounts Amount Percentage (%) Amount Percentage (%) Carrying amounts
Accounts receivables that are collectively
assessed for impairment based on
credit risk characteristics* 20,149,872,554 100% 275,864,448 1% 19,874,008,106 15,767,136,659 100% 262,640,383 2% 15,504,496,276
Individually insignificant but assessed for
impairment individually 50,129,794 0% 43,457,382 87% 6,672,412 51,313,710 0% 42,046,734 82% 9,266,976
Total 20,200,002,348 100% 319,321,830 2% 19,880,680,518 15,818,450,369 100% 304,687,117 2% 15,513,763,252
Note*: This category includes accounts receivable having been individually assessed but not impaired.
The Group has no individually significant accounts receivable and individually for impairment this year (2017: nil).
Page 56
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(e) Additions and recoveries of provision for bad and doubtful debts during the year:
2018 2017
Balance at the beginning of the year 304,687,117 31,371,811
Charge during the year 5,005,871 284,705,046
Recoveries during the year 1,779,710 2,609,674
Write-offs during the year 2,475,273 2,236,524
Translation differences 13,883,825 (6,543,542)
Closing balance 319,321,830 304,687,117
For the year ended 31 December 2018, the Group had no individually significant write-off or recovery of doubtful
debts which had been fully or substantially made in prior years (2017: nil).
(f) Five largest accounts receivable by debtor at the end of the year
The total of five largest accounts receivable of the Group at the end of the year was RMB 8,942,759,895, representing
44% of the total accounts receivable, and no provision was made for bad and doubtful debts after assessment.
3 Prepayments
(1) The Group’s prepayments by category:
2018 2017
Prepayment for inventory 252,434,159 122,885,896
Others 518,199,289 464,240,855
Total 770,633,448 587,126,751
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(2) The ageing analysis of prepayments is as follows:
2018 2017
Percentage Percentage
Ageing Amount (%) Amount (%)
Within 1 year (inclusive) 721,657,321 94% 568,849,167 97%
1 to 2 years (inclusive) 46,363,026 6% 17,188,654 3%
2 to 3 years (inclusive) 2,035,569 - 606,393 -
Over 3 years 577,532 - 482,537 -
Total 770,633,448 100% 587,126,751 100%
The ageing is counted starting from the date when prepayments are recognized.
As at 31 December 2018, the total of five largest prepayments of the Group is RMB 432,558,675, representing 56% of the
total prepayments.
4 Other receivables
Note 2018 2017
Interest receivable 140,597,317 89,628,559
Dividends receivable 3,711,768 -
Others (1) 2,309,865,886 728,395,573
Total 2,454,174,971 818,024,132
(1) Others
(a) The Group’s other receivable by customer type:
Customer type 2018 2017
Amounts due from related parties 12,148 27,591,317
Amounts due from other customers 2,310,194,250 701,313,513
Sub-total 2,310,206,398 728,904,830
Less: Provision for bad and doubtful
debts 340,512 509,257
Total 2,309,865,886 728,395,573
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(b) The Group’s other receivable by currency type：
2018 2017
Amount in Exchange RMB / Amount in Exchange RMB /
original currency rate RMB equivalents original currency rate RMB equivalents
RMB 2,278,359,260 699,117,519
USD 1,511,739 6.8632 10,375,364 2,742,109 6.5342 17,917,490
JPY 35,383,000 0.0619 2,189,854 66,206,715 0.0579 3,833,367
Other foreign
currencies 19,281,920 8,036,454
Sub-total 2,310,206,398 728,904,830
Less: Provision for
bad and
doubtful
debts 340,512 509,257
Total 2,309,865,886 728,395,573
(c) The ageing analysis of the Group’s other receivables is as follows:
2018 2017
Within 1 year (inclusive) 2,015,309,595 454,457,340
1 to 2 years (inclusive) 29,027,513 37,230,582
2 to 3 years (inclusive) 28,652,382 2,335,586
Over 3 years 237,216,908 234,881,322
Sub-total 2,310,206,398 728,904,830
Less: Provision for bad and doubtful
debts 340,512 509,257
Total 2,309,865,886 728,395,573
The ageing is counted starting from the date when other receivable are recognized.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(d) The Group’s other receivables by category
2018 2017
Book value Provision for bad and doubtful debts Book balance Provision for bad and doubtful debts
Category Amount Percentage (%) Amount Percentage (%) Carrying amounts Amount Percentage (%) Amount Percentage (%) Carrying amounts
Accounts receivables that are collectively
assessed for impairment based on
credit risk characteristics* 2,309,865,886 100% - - 2,309,865,886 728,395,573 100% - - 728,395,573
Individually insignificant but assessed for
impairment individually 340,512 0% 340,512 100% - 509,257 0% 509,257 100% -
Total 2,310,206,398 100% 340,512 0% 2,309,865,886 728,904,830 100% 509,257 0% 728,395,573
Note*: This category includes other receivables having been individually assessed but not impaired.
The Group has no individually significant other receivable and individually for impairment this year. As at 31 December 2018, the Group collectively assessed other receivable having
been individually assessed but not impaired for impairment and did not recognize impairment loss against this amount of other receivable (2017: nil).
Page 60
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(e) Additions and recoveries of provision for bad and doubtful debts during the year
2018 2017
Balance at the beginning of the year 509,257 653,341
Charge during the year 1,273,563 111,166
Recoveries during the year - 6,350
Write-offs during the year 1,442,308 248,900
Closing balance 340,512 509,257
(f) The Group’s other receivables categorised by nature
Nature of other receivables 2018 2017
VAT refunds 415,687,566 179,152,619
Amount due from equity transfer 200,000,000 200,000,000
Deposits 148,893,918 154,724,906
Wealth management receivables 1,408,094,816 -
Others 137,530,098 195,027,305
Sub-total 2,310,206,398 728,904,830
Less: Provision for bad and doubtful
debts 340,512 509,257
Total 2,309,865,886 728,395,573
Wealth management receivables included in other receivables, with principal and interest amounted to RMB
1,408,094,816, was expired on 31 December 2018, and recovered on 2 January 2019.
(g) Five largest other receivables by debtor at the end of the year
The total of five largest other receivables of the Group at the end of the year was RMB 1,886,065,008, most of which
are export tax rebate receivables and receivables due from wealth management. No provision is made for bad and
doubtful debts after assessment.
Page 61
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
5 Inventories
(1) The Group’s inventories by category:
2018 2017
Provision for Provision for
impairment of impairment of
Book value inventories Carrying amount Book value inventories Carrying amount
Raw materials 4,350,466,710 293,435,033 4,057,031,677 3,663,568,064 312,167,170 3,351,400,894
Work in progress 1,442,498,808 150,867,947 1,291,630,861 1,442,250,856 130,466,876 1,311,783,980
Finished goods 7,770,574,684 1,244,503,744 6,526,070,940 5,742,195,757 1,546,545,280 4,195,650,477
Consumables 113,493,354 2,828,660 110,664,694 99,620,537 736,507 98,884,030
Total 13,677,033,556 1,691,635,384 11,985,398,172 10,947,635,214 1,989,915,833 8,957,719,381
As at 31 December 2018, there was no amount of capitalised borrowing cost in the Group’s closing balance of inventories
(2017: nil).
As at 31 December 2018, the Group had no inventory used as collateral (2017: nil).
(2) Provision for impairment of inventories of the Group is analyzed as follows:
Reductions during the year
Balance at the
beginning of the Charge during the Balance at the end
year year Move Back Transferred out of the year
Raw materials 312,167,170 307,794,313 95,981,437 230,545,013 293,435,033
Work in progress 130,466,876 89,465,770 59,402,305 9,662,394 150,867,947
Finished goods 1,546,545,280 1,621,997,256 664,032,716 1,260,006,076 1,244,503,744
Consumables 736,507 2,760,542 642,836 25,553 2,828,660
Total 1,989,915,833 2,022,017,881 820,059,294 1,500,239,036 1,691,635,384
6 Other current assets
2018 2017
VAT on tax credits 4,841,165,133 4,847,422,522
Input tax to be verified or deducted 1,773,794,503 1,198,408,412
Income taxes prepaid 132,824,503 5,763,179
Wealth management product 5,534,413,566 9,791,137,808
Others 180,876,074 81,702,057
Total 12,463,073,779 15,924,433,978
As at 31 December 2018, all of the wealth management products owned by the Group are due within one year.
Page 62
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
7 Available-for-sale financial assets
(1) Available-for-sale financial assets
2018 2017
Provision for Provision for
Item Book value impairment Carrying amount Book value impairment Carrying amount
Available-for-sale debt
instruments 12,866,432 - 12,866,432 14,912,146 - 14,912,146
Available-for-sale equity
instruments
- Measured at fair
value 528,735,772 150,099,655 378,636,117 662,938,045 150,099,655 512,838,390
- Measured at cost 377,015,762 34,495,952 342,519,810 332,328,820 180,000 332,148,820
Total 918,617,966 184,595,607 734,022,359 1,010,179,011 150,279,655 859,899,356
(2) Available-for-sale financial assets at fair value at the end of the year:
Available-for-sale Available-for-sale
equity instruments debt instruments Total
Cost of equity instruments / amortized
cost of debt instruments 555,793,175 12,565,172 568,358,347
Fair Values 378,636,117 12,866,432 391,502,549
Accumulated fair value movements in other
comprehensive income (27,057,403) 301,260 (26,756,143)
Provision for impairment (150,099,655) - (150,099,655)
Page 63
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(3) Available-for-sale financial assets at cost at the end of the year
Book value Provision for impairment
Balance at the Balance at the Percentage of
beginning of the Increase during Reductions Translation Balance at the end beginning of the Increase during Translation Balance at the shareholding
Investee year the year during the year differences of the year year the year differences end of the year in investees (%)
Teralane Semiconductor Inc 11,868,000 - - - 11,868,000 - - - - 7.29%
Zhejiang BOE Display
Technology Co., Ltd. 321,256 - - - 321,256 - - - - 7.03%
Zhejiang Qiusheng Photoelectric
Technology Co., Ltd. 248,776 - - - 248,776 - - - - 5.09%
National Engineering Laboratory
of Digital Television (Beijing)
Co., Ltd. 6,250,000 - - - 6,250,000 - - - - 12.50%
Meta Company 32,670,951 - - 1,645,001 34,315,952 - 33,130,452 1,185,500 34,315,952 5.66%
Danhua Capital, L. P. 24,503,250 - - 1,233,750 25,737,000 - - - - 5.48%
Danhua Capital II, L.P. 34,304,550 26,419,000 - 2,761,050 63,484,600 - - - - 3.29%
Kateeva Inc. 78,051,019 - - 3,929,905 81,980,924 - - - - 3.00%
DEPICT INC. 13,068,400 - - 658,000 13,726,400 - - - - 22.20%
MOOV INC. 26,244,971 - - 1,321,446 27,566,417 - - - - 7.69%
ZGLUE INC. 9,801,289 - - 493,499 10,294,788 - - - - 6.00%
Fabord Ltd. 910 - 910 - - - - - - -
Hefei Xin Jing Yuan Electronic
Materials Co., Ltd. 3,000,000 - 3,000,000 - - - - - - -
Nanosys INC 49,006,500 - - 2,467,500 51,474,000 - - - - 3.14%
Ceribell INC 8,494,453 - - 427,699 8,922,152 - - - - 2.05%
Baebies INC 28,709,230 - - 1,445,523 30,154,753 - - - - 9.05%
Illumina Fund I,L.P. 5,605,265 4,433,785 - 451,694 10,490,744 - - - - 2.14%
Others 180,000 - - - 180,000 180,000 - - 180,000
Total 332,328,820 30,852,785 3,000,910 16,835,067 377,015,762 180,000 33,130,452 1,185,500 34,495,952
Page 64
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
8 Long-term equity investments
(1) The Group’s long-term equity investments by category:
2018 2017
Investments in joint ventures - 2,793,732,185
Investments in associates 2,926,303,858 4,672,259,202
Sub-total 2,926,303,858 7,465,991,387
Less: Provision for impairment 537,136,972 537,136,972
- Associates 537,136,972 537,136,972
Total 2,389,166,886 6,928,854,415
Page 65
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(2) Movements of long-term equity investments during the year are as follows:
Investment Translation
income differences of
Balance at the Newly added recognized Other foreign currency Cash dividends or Acquired as
beginning of the investments under equity comprehensive Other changes in financial profit subsidiaries Balance at the end
Investee year during the year method income equity statements declared during the year of the year
Joint ventures
Wuhan BOE Optoelectronics
Technology
Co., Ltd. 91,590,309 1,140,000,000 (729,793) - - - - (1,230,860,516) -
Mianyang BOE Optoelectronics
Technology
Co., Ltd. 2,698,378,093 2,400,000,000 (1,398,010) - - - - (5,096,980,083) -
Beijing BOE Yiyun Science
&Technology
Co., Ltd. 3,763,783 - (3,763,783) - - - - - -
Sub-total 2,793,732,185 3,540,000,000 (5,891,586) - - - - (6,327,840,599) -
Associates
Beijing Nissin Electronics
Precision Component
Co., Ltd. - - (1,886,109) - 2,424,598 - - - 538,489
Beijing Nittan Electronic
Co., Ltd. 53,786,835 - 10,946,250 - - - (3,000,000) - 61,733,085
Erdos BOE Energy
Investment Co., Ltd. 907,458,312 - - - - - - - 907,458,312
Beijing Infi-Hailin Venture
Investment
Co., Ltd. 373,361 - 62,467 - - - - - 435,828
Beijing Infi-Hailin Venture
Investment
(Limited Partnership) 137,448,451 - 22,591,316 (47,702,834) - - (30,000,000) - 82,336,933
TPV Display Technology
(China)
Limited 27,190,533 - (4,189,174) - - - - - 23,001,359
Beijing Xindongneng
Investment Fund (Limited
Partnership) 1,472,249,231 150,000,000 (11,778,573) (155,295,781) - - - - 1,455,174,877
Beijing Xindongneng
Investment Management Co.,
Ltd. 4,861,735 - 2,327,127 - - - (2,000,000) - 5,188,862
Shenzhen Yunyinggu
Technology Co., Ltd. 35,483,897 - (20,002,391) - - - - - 15,481,506
Beijing Xloong Technologies
Co.,Ltd. 23,981,997 - (1,372,786) - - - - - 22,609,211
New on Technology Co.Ltd. 3,708,174 - (512,473) - - (10,207) - - 3,185,494
Chongqing BOE Display
Technology Co., Ltd. 3,846,000 192,300,000 (2,808,246) 219,616 - - - (193,557,370) -
Beijing Zhonglianhe Ultra HD
Collaborative Technology
Center Co., Ltd. - 3,000,000 - - - - - - 3,000,000
SES Imagotag SA Co.Ltd. 1,675,160,676 11,715,900 (1,411,455) - - 255,418 - (1,685,720,539) -
Cnoga Medical Co.Ltd. 326,710,000 - - - - 16,450,000 - - 343,160,000
Hefei Xin Jing Yuan Electronic
Materials Co., Ltd. - 3,000,000 (98) - - - - - 2,999,902
Sub-total 4,672,259,202 360,015,900 (8,034,145) (202,778,999) 2,424,598 16,695,211 (35,000,000) (1,879,277,909) 2,926,303,858
Total 7,465,991,387 3,900,015,900 (13,925,731) (202,778,999) 2,424,598 16,695,211 (35,000,000) (8,207,118,508) 2,926,303,858
Less: Provision for
impairment 537,136,972 537,136,972
Total 6,928,854,415 2,389,166,886
Page 66
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
9 Investment properties
Land use rights Buildings Total
Cost
Balance at the beginning of the
year 675,597,667 991,566,471 1,667,164,138
Additions during the year 11,837,010 20,592,374 32,429,384
Closing balance 687,434,677 1,012,158,845 1,699,593,522
Less: Accumulated depreciation or
amortization
Balance at the beginning of
the year 112,407,496 258,094,437 370,501,933
Additions during the year 14,742,206 30,481,732 45,223,938
Closing balance 127,149,702 288,576,169 415,725,871
Carrying amounts
At the end of the year 560,284,975 723,582,676 1,283,867,651
At the beginning of the year 563,190,171 733,472,034 1,296,662,205
Page 67
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
10 Fixed assets
(1) Analysis of the Group’s fixed assets are as follows:
Item Plant & buildings Equipment Others Total
Cost
Balance at the beginning of the year 26,638,824,007 111,488,454,005 2,106,778,047 140,234,056,059
Additions during the year
- Additions due to business
combinations involving entities not
under common control 8,369,526 554,286,212 11,779,221 574,434,959
- Purchases 22,048,907 490,646,142 620,686,368 1,133,381,417
- Transfer from construction in
progress 10,080,982,077 47,301,257,740 613,774,548 57,996,014,365
Disposals or written-offs during the year (663,844) (377,332,712) (102,605,476) (480,602,032)
Other decreases - (6,520,201,883) - (6,520,201,883)
Translation differences 133,616 22,051,939 3,112,610 25,298,165
Closing balance 36,749,694,289 152,959,161,443 3,253,525,318 192,962,381,050
Less: Accumulated depreciation
Balance at the beginning of the year 3,366,248,795 46,632,776,416 936,024,333 50,935,049,544
Charge during the year 921,469,231 11,998,277,652 620,991,543 13,540,738,426
Disposals or written-offs during the year (559,484) (242,112,475) (98,034,828) (340,706,787)
Translation differences 43,483 13,925,120 2,737,927 16,706,530
Closing balance 4,287,202,025 58,402,866,713 1,461,718,975 64,151,787,713
Less: Provision for impairment
Balance at the beginning of the year 1,085,094 663,639,306 8,985,354 673,709,754
Disposals or written-offs during the year - (19,001,242) (1,846,170) (20,847,412)
Balance at the end of the year 1,085,094 644,638,064 7,139,184 652,862,342
Carrying amounts
At the end of the year 32,461,407,170 93,911,656,666 1,784,667,159 128,157,730,995
At the beginning of the year 23,271,490,118 64,192,038,283 1,161,768,360 88,625,296,761
On January 16, 2018, the Company signed a debt examption agreement with Fuzhou Municipal People's Government,
Fuzhou Chengtou BOE Investment Co., Ltd. and Fuzhou Construction & Investment Group Co., Ltd. for the investment
framework agreement of Fuzhou 8.5th new semiconductor display device production line project. The loan exempted for the
construction of Fuzhou's 8.5th generation new semiconductor display device production line project totaled RMB 6.3 billion.
In accordance with the accounting policies set out in note III 25, the group has simultaneously reduced the total book value of
long-term loans and related fixed assets by RMB 6.3 billion in the consolidated financial statements.
Page 68
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(2) Fixed assets acquired under finance leases
2018 2017
Original book Accumulated Provision for Carrying Original book Accumulated Provision for Carrying
Item value depreciation impairment amount value depreciation impairment amount
Plant & buildings 11,291,665 4,357,005 - 6,934,660 11,291,665 4,103,316 - 7,188,349
Equipment 111,358,145 4,815,787 - 106,542,358 - - - -
Total 122,649,810 9,172,792 - 113,477,018 11,291,665 4,103,316 - 7,188,349
The Group’s fixed assets under finance leases represented a youth apartment under finance lease for the Company, which is
used for the purposes of the staff dormitory and machinery and equipment under finance leases.
(3) Fixed assets pending certificates of ownership
On 31 December 2018, fixed assets pending certificates of ownership totalled RMB 12,554,907,996 and certificates of
ownership is still being processed.
11 Construction in progress
(1) Construction in progress
(a) Analysis of the Group’s construction in progress is as follows:
2018 2017
Provision for Provision for
Item Book value impairment Carrying amount Book value impairment Carrying amount
The 6th generation AMOLED project 23,065,639,272 - 23,065,639,272 - - -
The 6th generation LTPS / AMOLED
project 15,759,483,392 - 15,759,483,392 19,099,729,823 - 19,099,729,823
The 10.5th generation TFT-LCD project 5,599,769,733 - 5,599,769,733 19,778,218,499 - 19,778,218,499
Others 11,998,462,490 - 11,998,462,490 11,883,302,104 - 11,883,302,104
Total 56,423,354,887 - 56,423,354,887 50,761,250,426 - 50,761,250,426
Page 69
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(b) Movements of major construction in progress during the year
Additions due to
business Percentage Accumulated
combinations of capitalized Percentage of
Balance at the involving entities Transfer to Transfer to actual cost interest Interest interest
beginning of the not under common Increase during the fixed assets during the Intangible assets Balance at the end of to budget at the end of capitalized capitalized
Item Budget year control year year during the year the year (%) the year in 2018 in 2018 (%) Sources of funding
The 6th generation Self-raised funds and
AMOLED project 44,500,000,000 - 2,389,530,479 21,094,477,912 (418,369,119) - 23,065,639,272 57.08% 56,276,871 56,276,871 3.88% borrowings
The 6th generation LTPS Self-raised funds and
/ AMOLED project 44,800,000,000 19,099,729,823 - 12,724,032,041 (16,059,831,316) (4,447,156) 15,759,483,392 71.53% 382,974,096 582,748,988 4.68% borrowings
The 10.5th generation Self-raised funds and
TFT-LCD project 42,937,000,000 19,778,218,499 - 15,109,135,590 (29,283,568,179) (4,016,177) 5,599,769,733 82.86% - 424,792,676 5.06% borrowings
Page 70
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
12 Intangible assets
(1) Intangible assets
Patent and
proprietary
Land use rights technology Computer software Others Total
Original book value
Balance at the beginning
of the year 1,822,280,424 1,744,517,311 776,387,468 343,837,159 4,687,022,362
Additions during the year
- Additions due to business
combinations involving
entities not under
common control 589,657,038 1,347,085,497 28,569 840,703,062 2,777,474,166
- Minority shareholder's
rights - 200,000,000 - - 200,000,000
- Purchases 236,594,905 - 68,627,737 42,184,921 347,407,563
- Transfer from
construction in
progress 37,170,534 - 60,291,004 - 97,461,538
Interest subsidies from
policy-related
preferential loans - (973,500) - - (973,500)
Disposals during the year - - (2,963,479) (96,525) (3,060,004)
Balance at the end of the
year 2,685,702,901 3,290,629,308 902,371,299 1,226,628,617 8,105,332,125
Less: Accumulated
amortisation
Balance at the beginning
of the year 178,337,119 1,024,064,866 443,322,429 58,633,640 1,704,358,054
Charge during the year 50,136,183 261,569,806 93,961,098 59,406,685 465,073,772
Disposals during the year - - (1,729,224) (49,871) (1,779,095)
Balance at the end of the
year 228,473,302 1,285,634,672 535,554,303 117,990,454 2,167,652,731
Carrying amounts
At the end of the year 2,457,229,599 2,004,994,636 366,816,996 1,108,638,163 5,937,679,394
At the beginning of the
year 1,643,943,305 720,452,445 333,065,039 285,203,519 2,982,664,308
(2) Land use rights pending certificates of ownership
As at 31 December 2018, the company has land use rights pending certificates of ownership RMB 121,648,077 in total,
which have been obtained on February 26 2019.
Page 71
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
13 Goodwill
(1) Changes in goodwill
Note Balance at the
beginning of the Additions during Balance at the end
Name of investee year the year of the year
Original book value
Beijing Yinghe Century Co., Ltd. 42,940,434 - 42,940,434
K-Tronics (Suzhou) technology
Co., Ltd. 8,562,464 - 8,562,464
Beijing BOE Optoelectronics
Technology Co., Ltd. 4,423,876 - 4,423,876
BOE Healthcare Investment &
Management Co., Ltd. 146,460,790 - 146,460,790
SES Imagotag SA Co.Ltd. (a) - 706,406,821 706,406,821
Sub-total 202,387,564 706,406,821 908,794,385
Provision for impairment 4,423,876 - 4,423,876
Carrying amounts 197,963,688 706,406,821 904,370,509
(a) As at 6 February 2018, the Group achieving actual control of SES Imagotag SA Co. Ltd (SES). The excess of
the combination cost over the Group’s interest in the fair value of SES’s identifiable assets and liabilities,
amounting to RMB 706,406,821, was recognized as goodwill attributable to SES.
(2) Provision for impairment of goodwill
The recoverable amount of Yinghe Century, Suzhou K-Tronics, Health Investment and SES is determined based on the
present value of expected future cash flows. The present value of expected future cash flows was projected based on the most
recent approved five-year financial budgets of the management and a pre-tax discount rate of 8.44%、6.62%、6.80% and
23.01% respectively. The cash flows beyond the five-year budget period were assumed to keep stable. The key assumptions
adopted in the forecasting may change. If management consider the key assumption will have negative changes, the book
value of the relevant asset group will exceed the recoverable amount.
14 Long-term deferred expenses
Balance at the
beginning of the Additions during the Reductions during Balance at the end of
year year the year the year
Payment for public facilities construction and
use 113,443,013 - (15,370,224) 98,072,789
Cost of operating lease assets improvement 18,931,332 13,630,236 (12,210,115) 20,351,453
Others 247,455,085 109,089,264 (114,327,738) 242,216,611
Total 379,829,430 122,719,500 (141,908,077) 360,640,853
Page 72
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
15 Deferred tax assets / deferred tax liabilities
(1) Deferred tax assets and liabilities
2018 2017
Deductible/ Deductible/
(taxable) (taxable)
temporary Deferred tax temporary Deferred tax
Item differences assets / (liabilities) differences assets / (liabilities)
Deferred tax assets:
Provisions for impairment losses of assets 391,727,136 69,662,802 404,563,258 72,783,228
Depreciation of fixed assets 125,811,735 22,699,045 79,460,328 11,970,733
Assessed value added by investing real
estate ini subsidiaries 142,110,808 35,527,702 147,664,660 36,916,165
Accumulated losses 230,110,593 67,447,589 48,749,683 8,043,698
Advances from customers 290,000,000 43,500,000 - -
Others 219,548,492 42,572,983 34,900,387 8,725,096
Sub-total 1,399,308,764 281,410,121 715,338,316 138,438,920
Amount offset (29,036,499) (32,183,263)
Balance after offset 252,373,622 106,255,657
Deferred tax liabilities:
Revaluation due to business combinations
involving entities not under common
control (2,777,250,385) (835,036,150) (1,099,980,193) (272,308,392)
Depreciation of fixed assets (3,248,856,623) (517,769,740) (1,246,406,521) (213,674,259)
Changes in fair value of available-for-sale
financial assets (53,218,430) (8,058,902) (145,163,930) (25,783,777)
Long-term equity investments (360,863,027) (54,129,454) (360,863,027) (54,129,454)
Bond interest (71,525,943) (10,728,891) (71,532,514) (10,729,877)
Others (223,118,577) (22,686,907) (204,034,820) (18,860,414)
Sub-total (6,734,832,985) (1,448,410,044) (3,127,981,005) (595,486,173)
Amount offset 29,036,499 32,183,263
Balance after offset (1,419,373,545) (563,302,910)
Page 73
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(2) Details of unrecognized deferred tax assets
2018 2017
Deductible temporary differences 9,073,884,112 7,974,238,271
Deductible losses 6,752,930,780 1,888,693,158
Total 15,826,814,892 9,862,931,429
As at 31 December 2018, the deductible temporary differences are mainly provisions for the subsidiaries’ impairment of
assets. Due to the uncertainty that there will be sufficient taxable income to cover these deductible differences in future
periods, the deferred income tax assets were not recognized in consideration of prudence.
(3) Expiration of deductible tax losses for unrecognized deferred tax assets:
Year Note 2018 2017
2018 - 45,598,745
2019 38,076,038 47,515,768
2020 59,149,932 130,498,173
2021 52,190,671 73,876,573
2022 528,642,251 524,338,212
2023 669,677,506 67,648,332
2024 125,649,689 125,649,689
2025 512,243,532 512,977,493
2026 233,283,462 233,283,463
2027 133,672,001 127,306,710
2028 4,296,683,816 -
Others (a) 103,661,882 -
Total 6,752,930,780 1,888,693,158
According to the Notice of the Ministry of Finance and the State Administration of Taxation on Extending the Loss
Carry-over Period of High-Tech Enterprises and High-Tech SMEs (Cai Shui [2018] No. 76), qualified enterprises in 2018,
regardless of whether they are qualified from 2013 to 2017, the losses that have not been remedied from 2013 to 2017 are all
allowed to be repaid after the carry-over, and the longest carry-over period is 10 years. In order to facilitate the corresponding
comparison, comparative figures in 2017 are restated.
(a) According to the applicable local tax laws, Loss of some overseas subsidiaries of the
Group has indefinite carry-over period to deduct the future taxable income.
Page 74
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
16 Other non-current assets
2018 2017
Deferred VAT for imported equipment 3,187,164,914 1,401,435,788
Prepayment for fixed assets 2,896,176,554 2,062,240,060
VAT on tax credits 1,488,605,413 321,022,343
Prepayment for projects 155,970,966 289,231,537
Others 165,084,206 115,837,526
Total 7,893,002,053 4,189,767,254
17 Short-term loans
2018
Credited
RMB / /collateralised
Amount in original
currency Exchange rate RMB equivalents guaranteed /pledged
Bank loans
- RMB 110,033,961 Pledged
- RMB 1,399,800,000 Credited
Sub-total 1,509,833,961
Foreign currency bank loans
- USD 314,573,510 6.8632 2,158,980,914 Pledged
- USD 47,369,984 6.8632 325,109,671 Collateralised
- USD 139,129,343 6.8632 954,872,507 Credited
- JPY 313,000,000 0.0619 19,370,631 Collateralised
- JPY 7,784,950,000 0.0619 481,787,201 Credited
Sub-total 3,940,120,924
Total 5,449,954,885
Page 75
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
2017
Credited
RMB / /collateralised
Amount in original
currency Exchange rate RMB equivalents guaranteed /pledged
Bank loans
- RMB 350,578,748 Pledged
- RMB 418,499,999 Credited
Sub-total 769,078,747
Foreign currency bank loans
- USD 161,181,026 6.5342 1,053,189,061 Pledged
- USD 53,679,291 6.5342 350,751,222 Credited
- EUR 138,000,000 7.8023 1,076,717,400 Pledged
Sub-total 2,480,657,683
Total 3,249,736,430
The interest rate of short-term loans for the Group ranged from 1.28% to 4.95% in 2018 (2017: 0.35% to 5.20%).
As at 31 December 2018, no short-term loan was past due (2017: nil).
18 Bills payable and accounts payable
Note 2018 2017
Bills payable (1) 591,109,272 543,798,835
Accounts payable (2) 22,213,956,616 16,205,788,698
Total 22,805,065,888 16,749,587,533
(1) Bills payable
2018 2017
Bank acceptance bills 326,575,254 481,852,311
Commercial acceptance bills 264,534,018 61,946,524
Total 591,109,272 543,798,835
There is no due but unpaid bill payable at the end of the year. The above bills are all due within one year.
(2) Accounts payable
(a) The Group’s accounts payable by category are as follows:
Page 76
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
2018 2017
Payables to related parties 30,361,810 14,532,494
Payables to third parties 22,183,594,806 16,191,256,204
Total 22,213,956,616 16,205,788,698
(b) The Group’s accounts payable by currency are as follows:
2018 2017
Amount in Exchange RMB / Amount in Exchange RMB /
original currency rate RMB equivalents original currency rate RMB equivalents
- RMB 14,305,998,594 11,174,717,229
- USD 959,572,576 6.8632 6,585,738,505 658,301,225 6.5342 4,301,456,276
- JPY 13,279,275,766 0.0619 821,987,170 11,718,379,068 0.0579 678,364,509
- Other foreign
currencies 500,232,347 51,250,684
Total 22,213,956,616 16,205,788,698
As at 31 December 2018, the Group had no individually significant accounts payable ageing more than one year.
Page 77
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
19 Advances from customers
Item 2018 2017
Advances from related parties 1,111 141,921
Advances from third parties 1,218,933,632 781,182,601
Total 1,218,934,743 781,324,522
As at 31 December 2018, the Group had no individually significant advances from customers ageing more than one year.
20 Employee benefits payable
(1) Employee benefits payable:
Balance as of Increase during the Reductions during Balance as of December
Note January 1 2018 year the year 31 2018
Short-term employee benefits (2) 2,167,235,414 10,681,611,152 10,673,038,901 2,175,807,665
Post-employment benefits
- defined contribution plans (3) 34,854,644 860,558,928 861,059,727 34,353,845
Termination benefits 14,976,886 6,091,402 6,298,627 14,769,661
Total 2,217,066,944 11,548,261,482 11,540,397,255 2,224,931,171
Balance as of Increase during the Reductions during Balance as of December
Note January 1 2017 year the year 31 2017
Short-term employee benefits (2) 1,497,068,752 9,211,333,761 8,541,167,099 2,167,235,414
Post-employment benefits
- defined contribution plans (3) 30,746,554 707,946,622 703,838,532 34,854,644
Termination benefits 15,036,960 5,497,883 5,557,957 14,976,886
Total 1,542,852,266 9,924,778,266 9,250,563,588 2,217,066,944
(2) Short-term employee benefits
Balance as of Increase during the Reductions during Balance as of
January 1 2018 year the year December 31 2018
Salaries, bonuses and allowances 1,840,923,550 8,737,680,189 8,760,657,228 1,817,946,511
Staff welfare - 776,550,030 776,550,030 -
Social insurance 33,561,796 436,106,436 438,357,908 31,310,324
Medical insurance 30,110,821 384,231,011 387,191,648 27,150,184
Work-related injury insurance 1,419,661 31,115,109 30,485,856 2,048,914
Maternity insurance 2,031,314 20,760,316 20,680,404 2,111,226
Housing fund 17,201,305 430,417,142 425,536,787 22,081,660
Labour union fee, staff and workers’
education fee 246,372,990 242,263,166 214,158,506 274,477,650
Staff bonus and welfare fund 7,282,591 - - 7,282,591
Other short-term employee benefits 21,893,182 58,594,189 57,778,442 22,708,929
Total 2,167,235,414 10,681,611,152 10,673,038,901 2,175,807,665
Page 78
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
Balance as of Increase during the Reductions during Balance as of
January 1 2017 year the year December 31 2017
Salaries, bonuses and allowances 1,178,080,434 7,500,609,836 6,837,766,720 1,840,923,550
Staff welfare - 742,718,924 742,718,924 -
Social insurance 66,779,153 357,701,317 390,918,674 33,561,796
Medical insurance 63,337,669 310,634,444 343,861,292 30,110,821
Work-related injury insurance 1,631,421 26,846,859 27,058,619 1,419,661
Maternity insurance 1,810,063 20,220,014 19,998,763 2,031,314
Housing fund 20,607,756 339,557,027 342,963,478 17,201,305
Labour union fee, staff and workers’ education
fee 214,936,641 186,435,492 154,999,143 246,372,990
Staff bonus and welfare fund 7,282,591 - - 7,282,591
Other short-term employee benefits 9,382,177 84,311,165 71,800,160 21,893,182
Total 1,497,068,752 9,211,333,761 8,541,167,099 2,167,235,414
(3) Post-employment benefits - defined contribution plans
Balance as of Increase during the Reductions during Balance as of
January 1 2018 year the year December 31 2018
Basic pension insurance 28,831,475 815,071,236 814,696,438 29,206,273
Unemployment insurance 1,155,250 25,252,494 25,442,851 964,893
Annuity 4,867,919 20,235,198 20,920,438 4,182,679
Total 34,854,644 860,558,928 861,059,727 34,353,845
Balance as of Increase during the Reductions during Balance as of
January 1 2017 year the year December 31 2017
Basic pension insurance 24,629,016 664,045,399 659,842,940 28,831,475
Unemployment insurance 1,219,162 26,548,521 26,612,433 1,155,250
Annuity 4,898,376 17,352,702 17,383,159 4,867,919
Total 30,746,554 707,946,622 703,838,532 34,854,644
21 Taxes payable
2018 2017
Value-added tax 112,292,699 7,384,437
Corporate income tax 387,053,187 501,685,626
Individual income tax 39,659,862 41,968,486
City construction tax 205,222,860 84,932,308
Education surcharges and local education
surcharges 148,544,558 61,375,167
Others 77,335,132 78,275,122
Total 970,108,298 775,621,146
Page 79
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
22 Other payables
Note 2018 2017
Interest payable 1,016,761,921 847,955,186
Dividends payable (1) 23,648,778 9,651,170
Others (2) 21,916,569,129 15,264,806,774
Total 22,956,979,828 16,122,413,130
(1) Dividends payable
Dividends not paid this year were mainly due to dividends not yet available to non-tradable shareholders and cash dividends
of non-controlling shareholders who have not paid individual subsidiaries.
(2) Others
(a) The Group’s other payables by category are as follows:
2018 2017
Projects and equipment 18,042,357,713 12,772,388,210
Deferred VAT for imported equipment 1,400,000,000 675,815,849
Accrued water and electricity charges
and freight 606,071,394 430,803,905
Deposits 440,792,988 380,789,096
External agency fee 53,393,714 34,108,132
Others 1,373,953,320 970,901,582
Total 21,916,569,129 15,264,806,774
The Group’s significant other payables aged over one year are payables of projects and equipment.
(b) The Group’s other payables by currency are as follows:
2018 2017
Amount in Exchange RMB / Amount in Exchange RMB /
original currency rate RMB equivalents original currency rate RMB equivalents
RMB 15,064,792,480 10,281,873,020
USD 724,117,103 6.8632 4,969,760,500 574,115,354 6.5342 3,751,384,540
JPY 29,183,294,045 0.0619 1,806,445,901 20,695,199,824 0.0579 1,198,039,317
Other foreign
currencies 75,570,248 33,509,897
Total 21,916,569,129 15,264,806,774
Page 80
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
23 Non-current liabilities due within one year
As at 31 December, the non-current liabilities due within one year for the Group were long-term loans and long-term
payables due within one year.
2018
Credited
RMB / /collateralised
Amount in original
currency Exchange rate RMB equivalents guaranteed /pledged
Bank loans
- RMB 37,743,750 Pledged
- RMB 1,702,180,000 Collateralised
- RMB 990,000,000 Credited
- USD 378,624,409 6.8632 2,598,575,044 Collateralised
- EUR 3,694,262 7.8473 28,989,985 Credited
- EUR 3,950,000 7.8473 30,996,836 Pledged
Long-term payables 209,077,589 Collateralised
Total 5,597,563,204
2017
Credited
RMB / /collateralised
Amount in original
currency Exchange rate RMB equivalents guaranteed /pledged
Bank loans
- RMB 2,725,000,000 Credited
- RMB 915,745,064 Collateralised
- RMB 1,000,000 Pledged
- USD 200,000,000 6.5342 1,306,840,000 Credited
- USD 609,380,700 6.5342 3,981,815,370 Collateralised
Long-term payables 179,308,077 Collateralised
Total 9,109,708,511
The interest rate of RMB long-term loans due within one year for the Group ranged from 0% to 5.88% in 2018 (2017: from
0% to 5.64%).
24 Other current liabilities
The other current liabilities of the Group were warranty provision. The warranty provision mainly relates to the expected
after-sales repair warranty to the customers. The provision is estimated by the Management, based on historical claim
experience and current actual sales outcomes.
Page 81
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
25 Long-term loans
2018
Credited
RMB / /collateralised
Amount in original
currency Exchange rate RMB equivalents guaranteed /pledged
Bank loans
- RMB 640,180,000 Pledged
- RMB 32,190,024,533 Collateralised
- RMB 660,000,000 Guaranteed
- RMB 27,697,000,000 Credited
- USD 5,422,274,409 6.8632 37,214,153,724 Collateralised
- EUR 7,172,652 7.8473 56,285,953 Credited
- EUR 218,025,000 7.8473 1,710,919,269 Pledged
Less: Long-term loans due within one year 5,388,485,615
Total 94,780,077,864
2017
Credited
RMB / /collateralised
Amount in original
currency Exchange rate RMB equivalents guaranteed /pledged
Bank loans
- RMB 26,676,070,000 Credited
- RMB 18,725,264,133 Collateralised
- RMB 508,585,000 Pledged
- USD 308,062,697 6.5342 2,012,943,277 Credited
- USD 5,950,391,285 6.5342 38,881,046,734 Collateralised
- EUR 141,000,000 7.8023 1,100,124,300 Pledged
Less: Long-term loans due within one year 8,930,400,434
Total 78,973,633,010
The interest rate of RMB long-term loans for the Group ranged from 0% to 5.88% in 2018 (2017: from 0% to 6.60%).
26 Bonds payable
(1) Bonds payable
Item 2018 2017
Debentures payable 10,288,666,233 9,966,467,496
Less: Bonds payable due within one year - -
Total 10,288,666,233 9,966,467,496
Page 82
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(2) Increase and decrease of bonds payable:
Additions due to business Amortization to
Balance at the combinations involving entities not Interest recognized discounts or Translation Repayment during
Name of bond Par value Issuance date Maturity Issuance amount beginning of the year under common control based on par value premium differences the period Balance at the end of the year
16BOE01 RMB 10,000,000,000 As at 21/03/2016 5 RMB 10,000,000,000 9,966,467,496 - 315,000,000 10,065,929 - (315,000,000) 9,976,533,425
Euro PP EUR10,000,000 As at 29/12/2016 7 EUR10,000,000 - 78,035,000 2,738,890 - 435,471 (2,738,890) 78,470,471
Euro PP EUR30,000,000 As at 29/03/2017 6 EUR30,000,000 - 232,249,600 8,216,670 106,324 1,306,413 (8,216,670) 233,662,337
Total 9,966,467,496 310,284,600 325,955,560 10,172,253 1,741,884 (325,955,560) 10,288,666,233
From 21 March 2016 to 22 March 2016, with the Approval document No. 469 [2016] of CSRC, the Group successfully issued a corporate bond of RMB 10 billion to qualified investors via
Shenzhen Stock Exchange. The full name of the bond was Corporate Bond Issued Publicly by BOE Technology Group Co., Ltd. to Qualified Investors in 2016 (the First Phase), which
referred to as 16BOE01.
The total amount of the bond in the current period is RMB 10 billion issued at a par value of RMB 100, with a maturity of 5 years from 21 March 2016 to 21 March 2021. Interest starts to
accrue on 21 March 2016 and the interest payments are made annually. The company will pay out the last interest payment with the principle amount of the bond when it becomes mature.
The coupon rate is 3.15% which is fixed in the first 3 years, after which the company has a right to raise the rate and so are the investors to sell back the bond to the company. On 30 January
2019, the company has decided that the coupon rate remains unchanged and the investors may exercise the put option considering the market environment at the time. A number of
96,705,976 bonds were sold back to the company at a total value of RMB 9,975,221,424.40 with interests included while 3,294,024 bonds remains held by the investors. As at 20 March
2019, the company has made a payment that includes both the principles and the interests of the put-back bonds to the designated bank account of China Securities Depository and Clearing
Co., Ltd Shenzhen branch (CSDC Shenzhen), the payment then went through the clearing system of CSDC Shenzhen to the investors’ registered reserve deposit account. As on 21 March
2019, the payments were allocated to investors’ account with CSDC.
SES issued two private placement bonds with a total face value of 40 million euro to institutional investors on 29 December 2016 and 29 March 2017. The coupon rate of the bonds is 3.5%
and the maturity date is 29 December 2023. Interest payments are made annually and the principle amount will be paid when the bonds become due.
Page 83
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
27 Long-term payables
Item Note 2018 2017
Financial lease payables (1) 1,625,169,828 1,355,559,059
Less: Financial lease payable due within
one year 209,077,589 179,308,077
Total 1,416,092,239 1,176,250,982
(1) Details of obligations under finance leases included in long-term payables
As at 31 December, the total future minimum lease payments under finance leases were as follows:
Minimum lease payments 2018 2017
Within 1 year (inclusive) 310,816,661 256,663,314
After 1 year but within 2 years (inclusive) 362,741,342 283,747,221
After 2 years but within 3 years (inclusive) 345,762,549 307,743,543
Over 3 years 1,096,208,635 825,636,817
Sub-total 2,115,529,187 1,673,790,895
Less: Unrecognized finance fees 490,359,359 318,231,836
Total 1,625,169,828 1,355,559,059
The Group leased back some of its sold machinery equipment and constructions in progress. The sales of the assets are
related to the leases, and the Group basically can ensure to buy back the asset after lease term. Therefore, the Group adopts
the accounting treatment of collateral loans.
28 Provisions
Name of investee 2018 2017
Pending implementation of the agreement 16,457,010 16,457,010
In 2009, the Group ceased producing several products and stopped fulfilling the purchase contract related to production. Due
to the indemnity incurred accordingly, the Group accrued provisions according to reasonable estimation of loss.
Page 84
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
29 Deferred income
Balance at Government grants
the beginning of newly increased Amount included in Balance at
Item the year during the year other income Other changes the end of the year
Government grants
related to assets 2,028,326,953 570,687,312 (446,432,359) (232,830,923) 1,919,750,983
Related to income 233,628,354 210,252,793 (176,073,597) - 267,807,550
Total 2,261,955,307 780,940,105 (622,505,956) (232,830,923) 2,187,558,533
30 Other non-current liabilities
Item Note 2018 2017
Convertible debt (1) 4,175,131,508 3,985,192,661
Contribution of minority shareholders
with redemption provisions (2) 3,700,737,154 3,629,616,046
Deferred VAT for imported equipment 3,187,164,914 1,401,435,788
Others 271,839,746 114,000,000
Total 11,334,873,322 9,130,244,495
(1) Convertible debt
Convertible debt arise from the Company’s capital commitment and conversion obligations to the minority shareholders of
Hefei Xinsheng. In December 31 2018, the balance of the convertible debt includes principal and interest measured according
to amortized cost totalled RMB 4,104,131,508 and financial liabilities based on fair value totalled RMB 71,000,000 which its
fair value change is recognised in the gains from changes in fair value (Note V. 45).
(2) Contribution of minority shareholders with redemption provisions
The Contribution of minority shareholders with redemption provisions is mainly due to the redemption obligation of the
company to the minority shareholders of Fuzhou BOE and BOE Smart Retail (Hong Kong) Co., Ltd. The company
recognizes the above minority shareholder contribution as a financial liability which is subsequently measured at the cost of
amortization. The book balance on December 31 2018 is RMB 3,700,737,154.
31 Share capital
Balance at the Balance at the end
beginning of the year of the year
Total shares 34,798,398,763 34,798,398,763
Page 85
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
32 Capital reserve
Other capital
Item Share premiums reserves Total
Balance at the beginning of the year 37,546,517,053 1,038,998,069 38,585,515,122
Add: Equity movements arising from investment
increase in non-wholly owned subsidiaries - 3,754,159 3,754,159
Other movements in equity of
investee - 2,424,598 2,424,598
Less:Equity changes arising from
acquisition of non-controlling
interests - 378,593,283 378,593,283
Closing balance 37,546,517,053 666,583,543 38,213,100,596
In December 2017, BOE Smart Retail (Hong Kong) Co., Ltd., a subsidiary of the Company, acquired over 50.01% of SES
Imagotag SA Co.Ltd. at a price of 30 Euro per share through block trading, and get control of SES Imagotag SA Co. Ltd. in
February 6, 2018. The block trading triggered a comprehensive tender offer obligation for SES Imagotag SA Co. Ltd. As of
March 16, 2018 (the date of completion of the tender offer), BOE Smart Retail (Hong Kong) Co., Ltd. had a total offer of
3,582,490 shares, and pay consideration of RMB 837,507,347. The acquisition of non-controlling shareholders' equity above
leads to the reduction of capital reserve of RMB 378,593,283.
33 Other comprehensive income
Movements during the year
Balance at the
beginning of the Less: After-tax Balance at the
year Previsously After-tax amount end of the year
attributable to recognized amount attributable to attributable to
shareholders of Before-tax amount Less: attributable to the shareholders
the parent amount transferred to Income tax the parent non-controlling of the parent
Item company during the year profit or loss expenses company shareholders company
Other comprehensive income that will be
reclassified to profit or loss
Including: Share of other comprehensive
income of the equity-accounted
investee that may be reclassified
to profit or loss 144,614,667 (202,778,999) 219,616 - (202,998,615) - (58,383,948)
Gains or losses arising from
changes in fair value of available-
for-sale financial assets 120,396,369 (121,965,782) 38,312,453 (17,724,875) (136,009,652) (6,543,708) (15,613,283)
Translation differences arising from
translation of foreign currency
financial statements (114,408,103) 95,737,106 - - 63,147,082 32,590,024 (51,261,021)
Total 150,602,933 (229,007,675) 38,532,069 (17,724,875) (275,861,185) 26,046,316 (125,258,252)
34 Surplus reserve
Balance at the
beginning of the Additions during Reductions during Balance at the end
Item year the year the year of the year
Statutory surplus reserve 599,969,166 262,985,835 - 862,955,001
Page 86
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
Discretion arysurplus reserve 289,671,309 - - 289,671,309
Total 889,640,475 262,985,835 - 1,152,626,310
35 Retained earnings
Item 2018 2017
Retained earnings at the beginning of the
year 10,385,659,084 4,011,055,487
Add: Net profits for the year attributable to
shareholders of the Company 3,435,127,975 7,567,682,493
Less: Appropriation for statutory surplus
reserve 262,985,835 146,500,620
Dividends to ordinary shares 1,739,919,938 1,046,578,276
Retained earnings at the end of the year 11,817,881,286 10,385,659,084
According to the Annual Shareholders’ Meeting for 2017 held on 28 May 2018, the Company distributed cash dividends to
all shareholders on 26 June 2018, with RMB 0.5 every 10 shares (2017: RMB 0.3) and a total dividend of RMB
1,739,919,938 (2017: RMB 1,046,578,276) distributed.
As at 31 December 2018, the consolidated retained earnings attributable to the Company included an appropriation of RMB
2,028,756,975 (2017: RMB 870,170,635) to surplus reserve made by the subsidiaries.
36 Operating income and operating costs
2018 2017
Item Income Cost Income Cost
Principal activities 94,629,547,884 75,771,556,938 91,648,854,762 68,916,418,783
Other operating activities 2,479,317,051 1,534,667,350 2,151,624,453 1,366,058,802
Total 97,108,864,935 78,206,224,288 93,800,479,215 70,282,477,585
Details of operating income:
2018 2017
Operating income from principal activities
- Sale of goods 94,629,547,884 91,648,854,762
Other operating income
- Sales of raw materials 936,524,913 985,858,732
- Rental income of investment properties 1,023,141,383 878,867,829
- Others 519,650,755 286,897,892
Total 97,108,864,935 93,800,479,215
Information on income, expenses and profit of principal activities has been included in Note XIII.
Page 87
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
37 Taxes and surcharges
2018 2017
Property tax 311,354,873 237,646,244
Urban maintenance and construction tax 192,007,248 173,249,514
Education surcharges and local education
surcharges 137,643,535 124,162,574
Stamp duty 84,381,357 69,998,977
Land use tax 28,005,681 37,247,474
Others 25,213,432 66,076,746
Total 778,606,126 708,381,529
38 Selling and distribution expenses
2018 2017
Warranty provisions 1,068,015,463 1,200,437,455
Staff cost 582,456,239 536,623,384
Logistics 530,295,839 452,572,779
Others 710,289,428 402,292,180
Total 2,891,056,969 2,591,925,798
39 General and administrative expenses
2018 2017
Staff cost 2,304,932,925 1,886,440,369
Repair expense 1,155,436,163 1,076,177,465
Depreciation and amortisation 445,659,627 256,406,262
Others 1,053,155,482 849,751,849
Total 4,959,184,197 4,068,775,945
40 Research and development costs
2018 2017
Staff cost 2,337,224,942 1,256,769,303
Material expenses 888,449,869 751,707,490
Depreciation and amortisation 662,379,702 524,292,457
Others 1,151,872,922 644,998,145
Page 88
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
Total 5,039,927,435 3,177,767,395
41 Financial expenses
2018 2017
Interest expenses from loans 4,566,725,543 3,143,654,626
Less: Borrowing costs capitalised 1,300,993,229 664,318,467
Interest income from bank deposits (748,004,557) (665,076,391)
Net exchange losses 544,018,382 19,922,620
Other financial expenses 134,949,751 113,842,472
Total 3,196,695,890 1,948,024,860
The interest rate per annum, at which the borrowing costs were capitalized by the Group, was 3.88% ~ 5.06% (2017: 2.66% ~
4.74% for the year).
42 Impairment losses
2018 2017
Provision losses for bad debts 4,499,724 282,200,188
Impairment losses of inventories 1,201,958,587 1,903,973,944
Impairment losses of fixed assets - 43,350,550
Available-for-sale financial assets 33,130,452 -
Total 1,239,588,763 2,229,524,682
43 Other income
2018 2017
Government grants related to
assets 514,836,515 386,080,172
Government grants related to
income 1,485,737,116 346,469,940
Total 2,000,573,631 732,550,112
The amount of government subsidies received by the Group in 2018 and directly included in other income was RMB
1,378,067,675.
Page 89
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
44 Investment income
2018 2017
Long-term equity investments gains/(loss) under equity method (13,925,731) 169,034
Investment income from disposal of long-term equity investment (3,948,640) -
Investment income from holding available-for-sale financial assets 11,543,726 12,671,679
Investment income from wealth management products on maturity 313,218,224 102,761,970
Including: Reversal of other comprehensive
income 38,312,453 356,146
Total 306,887,579 115,602,683
45 Gains from changes in fair value
Item 2018 2017
Financial liabilities at fair value through profit or loss 2,061,153 32,048,211
Including: Gains from changes in fair value of
derivative financial instruments 2,061,153 32,048,211
Total 2,061,153 32,048,211
As stated in Note V.30 (1), the Group assessed the fair value of the financial liability - the acquisition duty during the current
year and recognized the gains from changes in fair value amounting to RMB 2,061,153.
46 Gains/ (Losses) from disposal of assets
Amount recognized in
extraordinary gain
and loss
Item 2018 2017 in 2018
Gains/ (Losses) from disposal of fixed
assets 1,067,273 (69,145) 1,067,273
Total 1,067,273 (69,145) 1,067,273
Page 90
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
47 Non-operating income and non-operating expenses
(1) Non-operating income by item is as follows:
Amount recognized in
extraordinary gain and
loss
Item 2018 2017 in 2018
Government grants 73,136,030 108,695,893 73,136,030
Others 96,293,485 71,722,965 96,293,485
Total 169,429,515 180,418,858 169,429,515
Government grants recognized in current profit or loss
Item 2018 2017
Policy incentives and others 73,136,030 108,695,893
(2) Non-operating expenses
Amount recognized in
extraordinary gain
and loss
2018 2017 in 2018
Donations provided 8,931,099 18,829,148 8,931,099
Losses from scrapping of non-current assets
damage 25,378,178 87,861,553 25,378,178
Others 21,000,974 6,389,900 21,000,974
Total 55,310,251 113,080,601 55,310,251
Page 91
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
48 Income tax expenses
Note 2018 2017
Current tax expense based on tax law and
regulations 1,114,931,211 1,746,755,541
Changes in deferred tax (1) 127,484,883 133,904,439
Total 1,242,416,094 1,880,659,980
(1) The analysis of changes in deferred tax assets / liabilities is set out below:
2018 2017
Origination and reversal of temporary
differences 127,484,883 133,904,439
(2) Reconciliation between income tax expense and accounting profit is as follows:
2018 2017
Profit before taxation 4,122,290,167 9,741,071,539
Expected income tax expense at tax rate of
15% 618,343,525 1,461,160,731
Add: Effect of different tax rates applied by
subsidiaries (8,605,091) (27,391,522)
Effect of non-deductible costs, expense and losses 57,787,173 43,112,436
Tax effect of weighted deduction and tax
preference (326,776,754) (167,780,559)
Utilisation of prior year tax losses (42,090,199) (55,457,681)
Tax effect of deductible losses of deferred tax
assets not recognized 801,853,138 160,554,413
Tax effect of deductible temporary differences of
deferred tax assets not recognized 167,943,845 490,319,923
Recognized temporary differences of previous
years - (23,857,761)
Effect of tax rates changes on deferred tax (26,039,543) -
Income tax expense 1,242,416,094 1,880,659,980
Page 92
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
According to the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology
Finance and Taxation [2018] No. 99 Notice on Increasing the Pre-tax Deduction Ratio of Research and Development
Expenses, in order to further encourage enterprises to increase investment in research and development, support scientific and
technological innovation, enterprises actually carry out research and development activities. The research and development
expenses which are not resulted in intangible assets but in the current profits and losses, are deducted on the basis of the
regulations truthfully. Besides, during January 1, 2018 and December 31 2020, extra deduction will be added to the research
and development expenses before taxation according to 75% of the actual amount.
49 Basic earnings per share and diluted earnings per share
Basic earnings per share is calculated as dividing consolidated net profit attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares outstanding. The Group does not have any potential dilutive ordinary
shares for the listed years.
2018 2017
Consolidated net profit attributable to ordinary
shareholders of the Company 3,435,127,975 7,567,682,493
Weighted average number of ordinary shares
outstanding (share) 34,798,398,763 34,888,807,218
Basic earnings per share (RMB / share) 0.10 0.22
Weighted average number of ordinary shares is calculated as follows:
2018 2017
Issued ordinary shares at the beginning of the year 34,798,398,763 35,020,526,918
Weighted average effect of shares repurchased - (131,719,700)
Weighted average number of ordinary shares at 31
December 34,798,398,763 34,888,807,218
Page 93
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
50 Supplementary information on cash flow statement
(1) Supplement to cash flow statement
2018 2017
(a) Reconciliation of net profit to cash flows from
operating activities:
Net profit 2,879,874,073 7,860,411,559
Add: Impairment loss 1,239,588,763 2,229,524,682
Depreciation of fixed assets and investment property 13,335,938,485 11,582,379,561
Amortisation of intangible assets 439,474,291 283,359,395
Amortisation of long-term deferred expenses 141,908,077 78,774,292
(Losses) / gains from disposal of fixed assets,
intangible assets, and other long-term assets (3,694,057) 69,145
Losses from scrapping of fixed assets and intangible
assets 25,378,178 87,861,553
Financial expenses 2,568,053,826 1,446,546,521
Gains from changes in fair value (2,061,153) (32,048,211)
Investment income (306,887,579) (115,602,683)
Change in deferred income 87,642,739 153,536,921
(Increase) / decrease in deferred tax
(97,760,872) 40,282,908
assets
Increase in deferred tax liabilities 841,185,989 93,600,350
Increase in inventories (3,709,307,660) (3,028,554,792)
Decrease in operating receivables 828,109,193 2,126,578,448
Increase in operating payables 7,416,604,903 3,920,210,006
Net cash inflow from operating activities 25,684,047,196 26,726,929,655
(b) Significant investing and financing activities not requiring the use of cash:
On January 16, 2018, the Company signed a debt examption agreement with Fuzhou Municipal People's Government,
Fuzhou Chengtou BOE Investment Co., Ltd. and Fuzhou Construction & Investment Group Co., Ltd. for the
investment framework agreement of Fuzhou 8.5th new semiconductor display device production line project. The loan
exempted for the construction of Fuzhou's 8.5th generation new semiconductor display device production line project
totaled RMB 6.3 billion.
In 2018, Hefei Display Technology, a subsidiary of the Group, signed the Overseas Payment Financing Contract with
the China Development Bank. The China Development Bank arranged the Payment Bank to pay RMB47,369,984 and
JPY313,000,000 in advance for imports on behalf of Hefei Display Technology. At the agreed financing maturity date,
Hefei Display Technology will repay the principal and interest of the financing and related costs to the China
Development Bank, which will return the relevant funds to the paying bank on behalf of the China Development Bank.
In 2018, Chengdu Optoelectronics, a subsidiary of the Group, signed the Overseas Payment Financing Contract with
the China Development Bank, which arranged by the China Development Bank to pay USD163,440,859 in advance for
imports of Chengdu Optoelectronics on behalf of the Bank. At the agreed financing maturity date, Chengdu
Optoelectronics will repay the financing principal, interest and related costs to the China Development Bank, and the
China Development Bank will repay the relevant funds to the paying bank. In 2018, Chengdu Optoelectronics has paid
Page 94
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
a total of USD148,905,859.
In 2018, Mianyang BOE, a subsidiary of the Group, signed the Overseas Payment Financing Contract with the China
Development Bank, which arranged by the China Development Bank to pay the import money of USD 48,271,469 and
JPY 7,784,950,000 in advance on behalf of Mianyang BOE. At the agreed financing maturity date, Mianyang BOE will
repay the principal and interest of the financing and related expenses to the China Development Bank, and the relevant
funds will be returned by the China Development Bank to the paying bank.
In 2018, Kunming BOE, a subsidiary of the company, received a minority shareholder's investment in patents and
proprietary technology, and accounted for RMB 200,000,000 according to the assessed bookkeeping value.
In 2018, BOE Energy, a subsidiary of the Group, leased fixed assets. The financial leasing company directly paid for
the purchase of suppliers. The total amount was RMB 111,358,145.
(c) Changes in cash and cash equivalents:
2018 2017
Cash and cash equivalents at the end of the
year 43,350,696,520 47,913,287,583
Less: Cash and cash equivalents at the
beginning of the year 47,913,287,583 49,354,810,388
Net Decrease in cash and cash equivalents (4,562,591,063) (1,441,522,805)
(2) Information on acquisition or disposal of subsidiaries and other business units during the year
Information on acquisition of subsidiaries and other business units:
2018 2017
Cash and cash equivalents paid during
the year for acquiring subsidiaries - -
Less: Cash and cash equivalents held
by acquired subsidiaries 6,801,508,810 -
Net cash paid for the acquisition (6,801,508,810) -
Note: Details on the acquistion of subsidiaries the year, refer to Note VI.1(1).
(3) Details of cash and cash equivalents
2018 2017
Cash on hand 537,805 526,764
Bank deposits available on demand 43,340,146,382 47,912,760,611
Other monetary funds available on demand 10,012,333 208
Page 95
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
Cash and cash equivalents at the end of
the year 43,350,696,520 47,913,287,583
Note: Cash and cash equivalents disclosed above exclude other monetary fund with restricted usage.
51 Assets with restrictive ownership title or right of use
Balance at the
beginning of the Additions during Reductions during Balance at the end
Item year the year the year of the year Reason for restriction
Cash at bank and Pledged as collateral and
on hand 9,215,371,993 5,150,842,367 6,235,371,169 8,130,843,191 margin deposit
Discounted with recourse, endorsed with
Bills receivable 503,406,676 208,324,414 503,406,676 208,324,414 resource and pledged for drawing bill
Investment
properties 188,015,432 37,889,470 8,469,341 217,435,561 Mortgaged as collateral
Fixed assets 56,639,021,799 50,921,156,278 9,308,311,371 98,251,866,706 Mortgaged as collateral
Construction in
progress 8,275,020,678 72,197,786,830 46,354,833,254 34,117,974,254 Mortgaged as collateral
Intangible assets 958,034,967 279,067,185 20,174,667 1,216,927,485 Mortgaged as collateral
Total 75,778,871,545 128,795,066,544 62,430,566,478 142,143,371,611
52 Details of provision for impairment of assets
Reductions during the year
Balance at the
beginning of the Additions during Translation Balance at the
Item Note year the year Move Back Transferred out differences end of the year
RMB Yuan RMB Yuan RMB Yuan RMB Yuan RMB Yuan RMB Yuan
Provision for bad and doubtful
debts V. 2, 4 305,196,374 6,279,434 1,779,710 3,917,581 13,883,825 319,662,342
Provision for impairment of
inventories V. 5 1,989,915,833 2,022,017,881 820,059,294 1,502,889,490 2,650,454 1,691,635,384
Provision for impairment of
available-for-sale financial
assets V. 7 150,279,655 33,130,452 - - 1,185,500 184,595,607
Provision for impairment of
held-to-maturity investments 17,960,946 - - - - 17,960,946
Provision for impairment of
long-term equity
investments V. 8 537,136,972 - - - - 537,136,972
Provision for impairment of
fixed assets V. 10 673,709,754 - - 20,847,412 - 652,862,342
Provision for impairment of
goodwill V. 13 4,423,876 - - - - 4,423,876
Total 3,678,623,410 2,061,427,767 821,839,004 1,527,654,483 17,719,779 3,408,277,469
For reasons of recognition of impairment losses, refer to the notes of relevant assets.
Page 96
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
VI. Change of consolidation scope
1 Business combinations involving entities not under common control
(1) Material business combinations involving entities not under common control occurred
during the year
Acquiree from
acquisition date to 31 December 2018
Acquisition date of Basis for determination of Net cash inflow/
equity investment acquisition date Income Net profit / (loss) (outflow)
Achieving actual control by
holding more than half of the
SES Imagotag SA Board of Directors of
Co.Ltd. 6 February 2018 acquiree 1,420,775,536 (130,954,351) (68,101,987)
Achieving actual control by
Mianyang BOE
holding more than half of the
Optoelectronics Board of Directors of
Technology Co., Ltd. 3 May 2018 acquiree - (111,309,141) (3,086,584,881)
Wuhan BOE
Achieving actual control by
Optoelectronics signing a concerted action
Technology Co., Ltd. 25 December 2018 agreement - - 1,099,140,725
(a) SES Imagotag SA Co.Ltd. was established in France in 1992, listed on the Euronext Paris in 2006, and
headquartered in Nanterre of France. SES Imagotag SA Co.Ltd. is mainly engaged in the research and
development and sales of electronic shelf labels and digital signage. On December 20, 2017 (delivery
date), BOE Smart Retail (Hong Kong) Co., Ltd., a subsidiary of the Company, paid a total of 7,156,696
shares through the block tranding at a price of 30 euros per share. The total consideration is 200,075,280
euros, accounting for 54.40% of the shares outstanding on the SES delivery date. After the completion of
the block transaction, the board of directors consists of five directors and the company recommends two
of them. According to the company's articles of association, material business and financial
decision-making matters must be approved by more than the majority of the members of the board of
directors. Therefore, the company has a significant impact on SES from the delivery date, and it is
accounted for as an associate by the equity method. On February 6, 2018 (the purchase date), SES held
a general meeting of shareholders. The meeting decided to increase the number of board members to
nine, of which the number of directors of the Company increased to five. From that date, the Company
has control over SES and SES will be included in the scope of consolidation. The book value of the
original shareholding of the Company on the date of purchase was RMB 1,685,720,539, and the fair
value was RMB 1,684,309,084, the balance between the book value and the fair value was RMB
1,411,455, which was recognised in the investment loss in consolidated financial statements.
(b) Mianyang BOE Optoelectronics Technology Co., Ltd. (Mianyang BOE) was established in Mianyang in
2016. It is mainly engaged in the investment, construction, research and development, production and
sales of semiconductor display device related products and related products. Before the purchase date,
the shareholding ratio of the Company and Mianyang Science and Technology City Development
Investment (Group) Co., Ltd. to Mianyang BOE was 61.54% and 38.46% respectively. On May 3, 2018,
the Mianyang BOE Shareholders' Meeting passed a resolution to amend the Articles of Association, in
which material business and financial decision-making matters were revised to be approved by more
than one-half of the board of directors. Mianyang BOE's board of directors consists of 5 directors, of
which 3 are recommended by the company. Therefore, on May 3, 2018, the company has control over
Mianyang BOE and included it in the consolidated financial statement. The book value and fair value of
the original shareholding of the Company on the purchase date were RMB 5,096,980,083.
Page 97
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(c) Wuhan BOE Optoelectronics Technology Co., Ltd. (Wuhan BOE) was established in Wuhan in 2017. It is
mainly engaged in the investment, construction, research and development, production and sales of thin
film transistor liquid crystal display device related products and related products. Before the purchase
date, the Company, Wuhan Airort Economic Development Zone Industrial Development Investment
Group Co., Ltd. and Hubei Changbai Industrial Investment Fund Partnership (Limited Partnership) held
shares of Wuhan BOE at 14.58%, 65.30% and 20.12% respectively. On December 25, 2018, the
Company and the shareholder of Wuhan BOE, Wuhan Airort Economic Development Zone Industrial
Development Investment Group Co., Ltd. signed a concerted action agreement, Wuhan Airort Economic
Development Zone Industrial Development Investment Group Co., Ltd.agreed to act as a concerted
action according to the wishes of the Company, and exercised the voting rights unconditionally and
irrevocably in accordance with the opinions of the Company. Since that date, the company has control of
Wuhan BOE and included it in the consolidated financial statement. The book value and fair value of the
original shareholding of the Company on the date of purchase were RMB 1,230,860,516.
(2) Acquisition cost and goodwill
Mianyang BOE Optoelectronics Wuhan BOE Optoelectronics
SES Imagotag SA Co.Ltd. Technology Co., Ltd. Technology Co., Ltd.
Carrying Carrying Carrying
Fair value Fair value Fair value
Acquisition cost amounts amount amount
Cash - - - - - -
Equity interests held
before acquisition date 1,685,720,539 1,684,309,084 5,096,980,083 5,096,980,083 1,230,860,516 1,230,860,516
Total acquisition cost 1,684,309,084 5,096,980,083 1,230,860,516
Less: share of the fair
value of the identifiable
net assets acquired 977,902,263 5,096,980,083 1,230,860,516
Amount of acquisition cost
more than share of the
fair value of the
identifiable net assets
acquired 706,406,821 - -
The fair value of the equity held before the purchase date in the above-mentioned acquisition of SES Imagotag SA
Co.Ltd. in the merger cost is determined according to the stock price of SES Imagotag SA Co.Ltd.
Page 98
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(3) Identifiable assets and liabilities of the acquiree at the acquisition date
Mianyang BOE Optoelectronics Wuhan BOE Optoelectronics
SES Imagotag SA Co.Ltd. Technology Co., Ltd. Technology Co., Ltd.
Carrying
amounts Fair value Carrying amount Fair value Carrying amount Fair value
Assets
Current assets 1,206,351,591 1,206,351,591 5,361,878,464 5,361,878,464 2,012,249,472 2,012,249,472
Non-current assets 489,972,401 2,338,548,994 3,249,053,667 3,249,053,667 8,158,163,711 8,158,163,711
Liabilities:
Current liabilities 577,892,138 577,892,138 251,707,967 251,707,967 1,724,095,238 1,724,095,238
Non-current liabilities 534,566,084 1,150,696,662 77,190,000 77,190,000 4,201,925 4,201,925
Net assets 583,865,770 1,816,311,785 8,282,034,164 8,282,034,164 8,442,116,020 8,442,116,020
Less: Non-controlling
interests 269,512,440 838,409,522 3,185,054,081 3,185,054,081 7,211,255,504 7,211,255,504
Net assets acquired 314,353,330 977,902,263 5,096,980,083 5,096,980,083 1,230,860,516 1,230,860,516
The Company assessed the fair value of the identifiable assets and liabilities of SES Imagotag SA Co. Ltd. on the
acquisition date. If there is an active market for the above identifiable assets, the quoted prices in the active market are
used to establish their fair value; if there is no active market, their fair values are estimated based on the market prices of
the same or similar types of assets which have an active market; if there is no active market for the same asset or similar
types of assets, valuation techniques are used to determine the fair value. For the above identifiable liabilities, the
payable amount or the present value of the payable amount is its fair value.
Mianyang BOE Optoelectronics Technology Co., Ltd. and Wuhan BOE Optoelectronics Technology Co., Ltd are both in
the construction period on the purchase date and have no major business activities. Therefore, the above-mentioned
purchased parties have no significant difference between the fair value and the book value of identifiable assets and
liabilities on the date of combination.
2 Other reasons for change of consolidation scope
The Company has set up a new subsidiary this year, which is Beijing BOE Sensing Technology Co., Ltd. The Company
holds 100% of the shares of the subsidiary.
Page 99
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
VII. Interests in other entities
1 Interests in subsidiaries
(1) Composition of the Group
Shareholding (or similar equity interest)
percentage
Principal place of Acquisition
Name of the Subsidiary business Registered place Business nature Registered capital Direct Indirect method
Research and development, design and manufacture Founded by
Beijing BOE Optoelectronics Technology Co., Ltd. Beijing, China Beijing, China of TFT-LCD USD 649,110,000 82.49% 17.51% investment
Business
combinations
involving entities
Research and development, design, manufacture, not under common
Chengdu BOE Optoelectronics Technology Co., Ltd. Chengdu, China Chengdu, China and sale of new display devices and components RMB 22,000,000,000 100% - control
Business
combinations
Investing, researching, manufacturing and involving entities
promoting TFT-LCD products and accessory not under common
Hefei BOE Optoelectronics Technology Co., Ltd. Hefei, China Hefei, China products RMB 9,000,000,000 100% - control
Development of TFT-LCD, manufacture and sale of Founded by
Beijing BOE Display Technology Co., Ltd. Beijing, China Beijing, China LCD RMB 17,882,913,500 97.17% 2.83% investment
Business
combinations
Investing, researching, manufacturing and involving entities
promoting TFT-LCD products and accessory not under common
Hefei Xinsheng Optoelectronics Technology Co., Ltd. Hefei, China Hefei, China products RMB 19,500,000,000 84.59% 0.03% control
The production and operation of AMOLED and Founded by
Ordos Yuansheng Optoelectronics Co., Ltd. Ordos, China Ordos, China relevant products RMB 11,804,000,000 100% - investment
Business
Research, development, manufacture and sales of combinations
semiconductor display devices, machine and involving entities
relevant products, import and export of goods and not under common
Chongqing BOE Optoelectronics Co., Ltd. Chongqing, China Chongqing, China technical consulting RMB 19,226,000,000 100% - control
Business
combinations
Investing, researching, manufacturing and involving entities
promoting TFT-LCD products and accessory not under common
Fuzhou BOE Optoelectronics Technology Co., Ltd. Fuzhou, China Fuzhou, China products RMB 17,600,000,000 81.25% - control
Research, manufacture and sales of terminal Founded by
Beijing BOE Vision-electronic Technology Co., Ltd. Beijing, China Beijing, China products of LCD monitor and TV etc. RMB 3,720,600,000 100% - investment
Manufacture and sales of vacuum electronic Founded by
Beijing BOE Vacuum Electronics Co., Ltd. Beijing, China Beijing, China products RMB 35,000,000 55% - investment
Founded by
Beijing BOE Vacuum Technology Co., Ltd. Beijing, China Beijing, China Manufacture and sales of vacuum tubes RMB 32,000,000 100% - investment
Page 100
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
Shareholding (or similar equity interest)
percentage
Principal place of Acquisition
Name of the Subsidiary business Registered place Business nature Registered capital Direct Indirect method
Development of display products and sales of Founded by
Beijing BOE Special Display Technology Co., Ltd. Beijing, China Beijing, China electronic products RMB 100,000,000 100% - investment
Engineering project management, real estate
development, mobile vehicle parking lot services Founded by
Beijing Yinghe Century Co., Ltd. Beijing, China Beijing, China and marketing research RMB 233,105,200 100% - investment
Development, manufacture and sales of backlight Founded by
BOE Optical Science and technology Co., Ltd. Suzhou, China Suzhou, China and related parts and components for LCD RMB 826,714,059 95.17% - investment
Development of display products and sales of Founded by
BOE Hyundai LCD Inc. Beijing, China Beijing, China electronic products USD 5,000,000 75% - investment
Manufacture and sales of mobile flat screen display Founded by
BOE (Hebei) Mobile Technology Co., Ltd. Langfang, China Langfang, China technical products and related services RMB 1,358,160,140 100% - investment
Sales of computer software and Hardware, the Founded by
Beijing BOE multimedia Technology Co., Ltd. Beijing, China Beijing, China numeral regards the audio frequency technology RMB 400,000,000 100% - investment
Design, consultation and services of solar battery,
photovoltaic system, wing turbine system and Founded by
Beijing BOE Energy Technology Co., Ltd. Beijing, China Beijing, China photo-thermal system, and energy saving service RMB 850,000,000 100% - investment
Technology poromotion services, property Founded by
Beijing BOE Smart Commercial Co., Ltd. Beijing, China Beijing, China management, sales of electronic products RMB 10,000,000 100% - investment
Technology poromotion services, property Founded by
Beijing Zhongxiangying Technologies Co.,Ltd. Beijing, China Beijing, China management, sales of electronic products RMB 10,000,000 100% - investment
Founded by
Ordos City Haosheng Energy Investment Co., Ltd. Ordos, China Ordos, China Investment in enegy RMB 30,000,000 20% 80% investment
Processing, production, and sales of goods,
primarily comprising sales of precision electronic
metal parts and semiconductor devices, in addition
to micromodules, microelectronic devices and Founded by
BOE Semi-conductor Co., Ltd. Beijing, China Beijing, China electronic materials; import and export of goods RMB 11,700,000 80.77% - investment
Design, manufacturing and sales of
British Virgin electronic-information industry related products, Founded by
BOE Optoelectronics Holding Co.,Ltd. Hong Kong, China Islands investment and financing businesses USD 260,809,100 100% - investment
Business
combinations
involving entities
Sales of Supports and glass bar for TV and CTV not under common
Beijing Asahi Electronic Materials Co.,Ltd. Beijing, China Beijing, China low melting sealing frit RMB 61,576,840 100% - control
Business
combinations
involving entities
not under common
BOE Health Investment & Management Co., Ltd. Beijing, China Beijing, China Investmentt management and investment RMB 3,000,000,000 100% control
Page 101
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
Shareholding (or similar equity interest)
percentage
Principal place of
Name of the Subsidiary business Registered place Business nature Registered capital Direct Indirect Acquisition method
Color TV, display tube, color rear projection TV Business combinations
projection tube and electronic component materials, involving entities not
BeijingMatsushita Color CRT Co., Ltd. Beijing, China Beijing, China property management, parking services, etc. RMB 670,754,049 88.80% - under common control
Investing, researching, manufacturing and Business combinations
promoting TFT-LCD products and accessory involving entities not
Hefei BOE Display Technology Co.,Ltd. Hefei, China Hefei, China products RMB 24,000,000,000 8.33% - under common control
Development, transfer, consultation and services of
Beijing BOE Technology Development Co., Ltd. Beijing, China Beijing, China technologies RMB 1,000,000 100% - Founded by investment
Development, transfer, consultation, services and
BOE Intelligent Technology Co.,Ltd. Beijing, China Beijing, China promotion of technologies RMB 100,000,000 100% - Founded by investment
Investing, researching, manufacturing and
promoting TFT-LCD products and accessory
Hefei BOE Zhuoyin Technology Co., Ltd. Hefei, China Hefei, China products RMB 800,000,000 75% - Founded by investment
Development, construction, property management
and supporting services of industrial plants and
supporting facilities, information and consultation
of real estates, lease of commercial facilities,
service staff and other supporting facilities and
Beijing BOE Land Co.,Ltd. Beijing, China Beijing, China public parking area services for vehicles RMB 55,420,000 70% - Founded by investment
Sales of communication devices, computer
hardware and software and accessory devices and
electronic products and equipment maintenance;
development, transfer, consultation and services of
technologies; import and export of goods, import
and export agency, import and export of
technologies; Consigned processing of electronic
Beijing BOE Sales Co.,Ltd. Beijing, China Beijing, China products and LCD RMB 50,000,000 100% - Founded by investment
Development, promotion, transfer, consultation and
services of display technology; computer software,
hardware and network system services; the
construction, operations and management of
e-commerce platform; product design; conference
services; undertaking exhibitions and presentation
activities; computer animation design; production,
R&D and sales of OLED microdisplays and AR/VR
complete machines; warehousing services; I-type
Xuanmu investment and management of investment
Kunming BOE Display Technology Co., Ltd. Yunnan, China Yunnan, China projects RMB 1,000,000,000 45.11% - Founded by investment
research and development, production and sales of
flexible AMOLED, the products are mainly used in Business combinations
smart phones, involving entities not
Mianyang BOE Optoelectronics Technology Co., Ltd. Mianyang, China Mianyang, China wearable devices, car display, AR/VR, etc. RMB 20,800,000,000 81.35% - under common control
Page 102
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
Shareholding (or similar equity interest)
percentage
Principal place of
Name of the Subsidiary business Registered place Business nature Registered capital Direct Indirect Acquisition method
Formation of X-ray sensors, microfluidic chips,
biochemical chips, gene chips, security sensors,
microwave antennas, biosensors, logistics network
technology and other semiconductor sensors,
technology testing, technical consulting, technical Founded by
Beijing BOE Sensing Technology Co., Ltd. Beijing, China Beijing, China services, technology transfer RMB 50,000,000 100% - investment
Technology development, technology transfer, Business
technical consulting, technical services; technology combinations
intermediary services; information system involving entities
integration; basic software services; application not under common
Beijing BOE Yiyun Science &Technology Co., Ltd. Beijing, China Beijing, China software services; software development RMB 200,000,000 95.92% - control
Business
combinations
Investing, researching, manufacturing and involving entities
promoting TFT-LCD products and accessory not under common
Wuhan BOE Optoelectronics Technology Co., Ltd. Wuhan, China Wuhan, China products RMB 17,573,000,000 14.58% - control
Business
Research, development, manufacture and sales of combinations
semiconductor display devices, machine and involving entities
Chongqing BOE Display Technology Co., Ltd. relevant products, import and export of goods and not under common
(Chongqing BOE Display) Chongqing, China Chongqing, China technical consulting RMB 510,000,000 38.46% - control
Supports color electronic paper, segment LCD,
TFT-LCD display, covering ESL multi-frequency
protocol, Wi-Fi, BLE and NFC; multiple
communication methods, integrated electronic Business
paper supply chain resources and downstream combinations
software around electronic shelf labels Platform, involving entities
image recognition and big data analytics resources not under common
SES Imagotag SA Co.Ltd. Nanterre, France Nanterre, France to create a complete solution for the retail industry EUR 10,789,186 - 73.93% control
The Company and the shareholder of Hefei Display, Hefei Core Screen Industrial Investment Fund (Limited Partnership) signed a concerted action agreement on November 30, 2016, Hefei Core Screen Industrial
Investment Fund (Limited Partnership) agreed to act as a concerted action according to the wishes of the Company, and exercised the voting rights unconditionally and irrevocably in accordance with the opinions of the
Company. Therefore, the Company's voting right ratio to Hefei is 71.67%.
The Company and Shareholder of Wuhan BOE, Wuhan Airport Economic Development Zone Industrial Development Investment Group Co., Ltd. signed a concerted action agreement on December 25, 2018. Wuhan
Airport Economic Development Zone Industrial Development Investment Group Co., Ltd. agreed to follow the Company's will to act as a concerted action, unconditionally and irrevocably exercising voting rights in
accordance with the opinions of the company, the voting rights of the Company to Wuhan BOE is 79.88%.
The Company and shareholders of Chongqing BOE Display, Chongqing Strategic Emerging Industry Equity Investment Fund Partnership (Limited Partnership) and Chongqing Yuzi Optoelectronic Industry Investment
Co., Ltd. signed a concerted action agreement on December 25, 2018, Chongqing Strategic Emerging Industry Equity Investment Fund Partnership (Limited Partnership) and Chongqing Yuzi Optoelectronic Industry
Investment Co., Ltd. agreed to act as a concerted action according to the will of the Company, and exercise the voting rights unconditionally and irrevocably in accordance with the opinions of the Company. Therefore,
the proportion of voting rights displayed by the Company on Chongqing BOE is 100%.
Page 103
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(2) Material non-wholly owned subsidiaries
Shareholding Losses attributable Dividend declared to Balance of
percentage of to non-controlling non-controlling non-controlling
non-controlling interests during the shareholders during interests
Name of subsidiaries interests year the year at the end of the year
Hefei BOE Display Technology Co.,Ltd. 91.67% (372,612,785) - 21,615,961,309
(3) Key financial information about material non-wholly owned subsidiaries
The following table sets out the key financial information of the above subsidiaries without offsetting internal transactions,
but with adjustments made for the fair value adjustment at the acquisition date and any differences in accounting policies:
Hefei BOE Display Technology Co.,Ltd.
2018 2017
Current assets 11,725,102,123 10,186,968,292
Non-current assets 36,531,775,939 22,403,727,292
Total assets 48,256,878,062 32,590,695,584
Current liabilities 7,708,059,063 3,935,813,860
Non-current liabilities 16,968,627,760 9,109,930,632
Total liabilities 24,676,686,823 13,045,744,492
Operating income 3,318,954,798 242,505,228
Net loss (406,216,942) (7,117,515)
Total comprehensive income (412,759,853) 11,524,506
Cash flows from operating activities 407,026,027 (62,244,174)
Page 104
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
2 Transactions that cause changes in the Group’s interests in subsidiaries that do not result in loss of control
(1) Changes in the Group’s interests in subsidiaries:
Before changes of After changes of
interests interests
Hefei BOE Display Technology Co.,Ltd. 7.94% 8.33%
Hefei BOE Zhuoyin Technology Co., Ltd. 75.05% 75.00%
Kunming BOE Display Technology Co., Ltd. 81.25% 45.11%
Mianyang BOE Optoelectronics Technology Co., Ltd. 61.54% 81.35%
Beijing BOE Yiyun Science &Technology Co., Ltd. 51.00% 95.92%
SES Imagotag SA Co.Ltd. 53.84% 73.93%
(2) Impact from transactions with non-controlling interests and equity attributable to the shareholders of the Company:
BOE Smart Retail (Hong Kong) Co., Ltd., a subsidiary of the Company, acquired of non-controlling shareholders' equity
through comprehensive tender offer obligation, which results to the reduction of capital reserve of RMB 378,593,283 (Note
V. 32).
The changes in the shareholding of the Company in the owners of above-mentioned other subsidiaries were caused by the
capital increase of the Company and its non-controlling interests, which results to the increase of capital reserver by RMB
3,754,159.
3 Interests in joint ventures or associates
Please see Note V.8 (2) for details of the summarized financial information of the associates and joint ventures.
No material restrictions on transfers of funds from investees to the Group. The judgment basis of the Company and its
subsidiaries to hold lower than 20% of the voting rights of other entities but have significant influence on the entity is due to
the fact that the Company and its subsidiaries have seats in the board of directors of the entity, and the Company and
Subsidiaries of the Company may have significant influence on the entity through the representation of the directors in the
process of formulating financial and operating policies.
Page 105
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
VIII. Risk related to financial instruments
The Group has exposure to the following main risks from its use of financial instruments in the normal course of the Group’s
operations:
- Credit risk
- Liquidity risk
- Interest rate risk
- Foreign currency risk
- Other price risks
The following mainly presents information about the Group’s exposure to each of the above risks and their sources, their
changes during the year, and the Group’s objectives, policies and processes for measuring and managing risks, and their
changes during the year.
The Group aims to seek appropriate balance between the risks and benefits from its use of financial instruments and to
mitigate the adverse effects that the risks of financial instruments have on the Group’s financial performance. Based on such
objectives, the Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Group’s activities. The internal audit department of the
Group undertakes both regular and ad-hoc reviews of risk management controls and procedures.
(1) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to
discharge an obligation. The Group’s credit risk is primarily attributable to receivables. Exposure to these credit risks are
monitored by management on an ongoing basis.
The cash at bank of the Group is mainly held with well-known financial institutions. Management does not foresee any
significant credit risks from these deposits and does not expect that these financial institutions may default and cause losses
to the Group.
In respect of receivables, the Group has established a credit policy under which individual credit evaluations are performed
on all customers to determine the credit limit and terms applicable to the customers. These evaluations focus on the
customers’ financial position, the external ratings of the customers and the record of previous transactions. Receivables are
due within 15 to 120 days from the date of billing. Debtors with balances that are past due are requested to settle all
outstanding balances before any further credit is granted. Normally, the Group does not obtain collateral from customers.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer rather than the
industry, country or area in which the customers operate and therefore significant concentrations of credit risk arise primarily
when the Group has significant exposure to individual customers. At the balance sheet date, the Group and the Company’s
accounts receivable and other receivables due from the top five customers account for 40% and 0.06% of the total accounts
receivables respectively (2017: 37% and 0.2%). In addition, the accounts receivable not overdue or impaired is mainly related
to many clients who don’t have payment in arrears records recently.
Page 106
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet. As
mentioned in Note XII, as at 31 December 2018 the Group does not provide any external guarantees which would expose the
Group or the Company to credit risk.
(2) Liquidity risk
Liquidity risk is the risk that an enterprise will encounter difficulty in meeting obligations that are settled by delivering cash
or another financial asset. The Company and its individual subsidiaries are responsible for their own cash management,
including short-term investment of cash surpluses and the raising of loans to cover expected cash demands (subject to
approval by the Company’s board when the borrowings exceed certain predetermined levels). The Group’s policy is to
regularly monitor its liquidity requirements and its compliance with lending covenants, to ensure that it maintains sufficient
reserves of cash, readily realisable marketable securities and adequate committed lines of funding from major financial
institutions to meet its liquidity requirements in the short and longer term.
2018 Contractual undiscounted cash flow
More than 1 year More than 3 years
Within 1 year or but less than 3 but less than 5 Carrying amount of
on demand years years More than 5 years Total balance sheet
Financial liabilities
Short-term loans 5,542,824,867 - - - 5,542,824,867 5,449,954,885
Bills payable and accounts
payable 22,805,065,888 - - - 22,805,065,888 22,805,065,888
Other payables 22,956,979,828 - - - 22,956,979,828 22,956,979,828
Non-current liabilities due
within one year 6,081,520,241 - - - 6,081,520,241 5,597,563,204
Long-term borrowings 4,283,202,579 9,376,015,293 14,959,103,283 92,225,178,032 120,843,499,187 94,780,077,864
Long-term payables - 708,503,891 399,396,820 696,811,815 1,804,712,526 1,416,092,239
Bonds payable 325,986,220 10,651,972,440 335,864,440 - 11,313,823,100 10,288,666,233
Total 61,995,579,623 20,736,491,624 15,694,364,543 92,921,989,847 191,348,425,637 163,294,400,141
2017 Contractual undiscounted cash flow
More than 1 year More than 3 years
Within 1 year or but less than 3 but less than 5 Carrying amount of
on demand years years More than 5 years Total balance sheet
Financial liabilities
Short-term loans 3,267,011,755 - - - 3,267,011,755 3,249,736,430
Bills payable and accounts
payable 16,749,587,533 - - - 16,749,587,533 16,749,587,533
Other payables 16,122,413,130 - - - 16,122,413,130 16,122,413,130
Non-current liabilities due
within one year 9,620,665,187 - - - 9,620,665,187 9,109,708,511
Long-term borrowings 2,884,011,291 8,571,300,399 6,211,128,059 78,338,069,603 96,004,509,352 78,973,633,010
Long-term payables - 591,490,764 411,613,803 414,023,014 1,417,127,581 1,176,250,982
Bonds payable 315,000,000 630,000,000 10,315,000,000 - 11,260,000,000 9,966,467,496
Total 48,958,688,896 9,792,791,163 16,937,741,862 78,752,092,617 154,441,314,538 135,347,797,092
Page 107
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(3) Interest rate risk
Interest-bearing financial instruments at variable rates and at fixed rates expose the Group to cash flow interest rate risk and
fair value interest risk, respectively. The Group determines the appropriate weightings of the fixed and floating rate
interest-bearing instruments based on the current market conditions and performs regular reviews and monitoring to achieve
an appropriate mix of fixed and floating rate exposure. The Group does not enter into financial derivatives to hedge interest
rate risk.
(a) As at 31 December, the Group held the following interest-bearing financial instruments:
Fixed rate instruments:
2018 2017
Effective interest
Item Effect interest rate Amount rate Amount
Financial assets
- Cash at bank and on hand 0.20% ~ 3.74% 21,898,508,469 0.20% ~ 2.75% 22,137,189,508
Financial liabilities
- Short-term loans 1.28% ~ 4.95% (2,927,190,124) 1.43% ~ 5.20% (2,172,993,056)
- Non-current liabilities due
within one year 0% ~ 5.88% (2,967,991,325) 0% ~ 5.64% (3,404,283,141)
- Debentures payable 3.15% ~ 3.50% (10,288,666,233) 3.15% (9,966,467,496)
- Long-term payables 3.56% ~ 7.09% (1,416,092,239) 4.17% ~ 7.02% (1,176,250,982)
- Long-term loans 0% ~ 5.88% (58,484,576,750) 0% ~ 6.60% (35,926,709,530)
Total (54,186,008,202) (30,509,514,697)
Variable rate instruments:
2018 2017
Effective interest
Item Effect interest rate Amount Amount
rate
Financial assets
- Cash at bank and on hand 0.0001% ~ 3.90% 29,582,493,437 0.0001% ~ 2.75% 34,990,943,302
Financial liabilities
- Short-term loans 3.44% ~ 4.39% (2,522,764,761) 0.35% (1,076,743,374)
- Non-current liabilities due
within one year 5.37% ~ 7.18% (2,629,571,879) 4.02% ~ 5.62% (5,705,425,370)
- Long-term loans 1.04% ~ 7.18% (36,295,501,114) 1.07% ~ 5.62% (43,046,923,480)
Total (11,865,344,317) (14,838,148,922)
Page 108
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(b) Sensitivity analysis
As at 31 December 2018, it is estimated that a general increase / decrease of 100 basis points in interest rates of
variable rate instrument, with all other variables held constant, would decrease / increase the Group’s net profit and
equity by RMB 104,380,000 (2017: RMB 123,360,000).
In respect of the exposure to cash flow interest rate risk arising from floating rate non-derivative instruments held by
the Group at the balance sheet date, the impact on the net profit and equity is estimated as an annualised impact on
interest expense or income of such a change in interest rates. The analysis is performed on the same basis for the
previous year.
(4) Foreign currency risk
In respect of cash at bank and on hand, accounts receivable and payable, short-term loans and other assets and liabilities
denominated in foreign currencies other than the functional currency, the Group ensures that its net exposure is kept to an
acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.
(a) The Group’s exposure as at 31 December to currency risk arising from recognized foreign currency assets or
liabilities is mainly denominated in US dollar. The amount of the USD exposure is net liabilities exposure USD
2,098,686,634 (2017 net liabilities exposure: USD 2,282,216,777), translated into RMB 14,403,706,106 (2017: RMB
14,912,460,861), using the spot rate at the balance sheet date. Differences resulting from the translation of the
financial statements denominated in foreign currency are excluded.
(b) The following are the exchange rates for Renminbi against US dollar applied by the Group:
Average rate Reporting date mid-spot rate
2018 2017 2018 2017
USD 6.6987 6.7356 6.8632 6.5342
Assuming all other risk variables remained constant, a 5% strengthening / weakening of the Renminbi against the US dollar
at 31 December would have increased / decreased both the Group’s equity and net profit by the amount RMB 506,911,356
(2017: RMB 199,436,178).
The sensitivity analysis above assumes that the change in foreign exchange rates had been applied to re-measure those
financial instruments held by the Group which expose the Group to foreign currency risk at the balance sheet date. The
analysis excludes differences that would result from the translation of the financial statements denominated in foreign
currency. The analysis is performed on the same basis for the previous year.
Page 109
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(5) Other price risks
Other price risks include stock price risk, commodity price risk and others.
IX. Fair value disclosure
The following table presents the fair value information and the fair value hierarchy, at the end of the current reporting period,
of the Group’s assets and liabilities which are measured at fair value at each balance sheet date on a recurring or
non-recurring basis. The level in which fair value measurement is categorised is determined by the level of the fair value
hierarchy of the lowest level input that is significant to the entire fair value measurement. The levels of inputs are defined as
follows:
Level 1 inputs: unadjusted quoted prices in active markets that are observable at the measurement date for identical
assets or liabilities;
Level 2 inputs: inputs other than Level 1 inputs that are either directly or indirectly observable for underlying assets or
liabilities;
Level 3 inputs: inputs that are unobservable for underlying assets or liabilities.
31 December 2018
Level 1 Level 2 Level 3
Fair value Fair value Fair value
Assets Notes measurement measurement measurement Total
Recurring fair value measurements
- Wealth management products V、6 - - 5,534,413,566 5,534,413,566
- Available-for-sale financial assets V、7
Including: Available-for-sale
debt instrument - - 12,866,432 12,866,432
Available-for-sale
equity instrument 378,636,117 - - 378,636,117
Total assets measured at fair value on
a recurring basis 378,636,117 - 5,547,279,998 5,925,916,115
- Equity of redemption terms-Swap
obligation - - (71,000,000) (71,000,000)
Total liabilities measured at fair value
on a recurring basis - - (71,000,000) (71,000,000)
31 December 2017
Level 1 Level 2 Level 3
Fair value Fair value Fair value
Assets measurement measurement measurement Total
Recurring fair value measurements
- Wealth management products V、6 - - 9,791,137,808 9,791,137,808
- Available-for-sale financial
assets V、7
Including: Available-for-sale
debt instrument 4,328,710 - 10,583,436 14,912,146
Available-for-sale
equity instrument 512,838,390 - - 512,838,390
Total assets measured at fair value on 517,167,100 - 9,801,721,244 10,318,888,344
Page 110
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
a recurring basis
- Equity of redemption terms-Swap
obligation - - (73,061,153) (73,061,153)
Total liabilities measured at fair value
on a recurring basis - - (73,061,153) (73,061,153)
The fair value of available-for-sale equity instruments and available-for-sale equity instruments is determined by market price
on the balance sheet date. The fair value of financial products is determined using discounted cash flow method, whose
amortized cost is not significantly different from the fair value on the balance sheet date. The fair value of Equity of
redemption terms-Swap obligation is determined by Monte Carlo method.
During 2018, there were no changes in valuation technique of fair value. As at 31 December, there were no significant
discrepancies between the book value and fair value of all the financial assets and financial liabilities except the above
available-for-sale equity instrument and wealth management products measured at fair value.
X. Related parties and related party transactions
1 Information about the parent of the Company
Ultimate
Shareholding Percentage of controlling party of
Company name Registered place Business nature Registered capital percentage (%) voting rights (%) the Company
Operation and
No. 12, Jiuxianqiao management of
Road state-owned assets
Beijing Electronics Holding Co., Chaoyang District, within RMB
Ltd. Beijing authorization, etc. 2,418,350,000 0.79% 11.32% Yes
2 Information about the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VII.1.
Page 111
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
3 Information about joint ventures and associates of the Company
Associates and Joint ventures that have related party transactions with the Group during this year or the previous year are as
follows:
Name of entity Relationship with the Company
Beijing Nittan Electronic Co., Ltd. Associate of the Group and the Company
TPV Display Technology (China) Limited Associate of the Group and the Company
Beijing Xindongneng Investment Management Co., Ltd. Associate of the Group and the Company
Shenzhen Yunyinggu Technology Co., Ltd. Associate of the Group and the Company
Cnoga Medical Co.Ltd. Associate of the Group
Mianyang BOE Optoelectronics Technology Co., Ltd.* Joint venture of the Group and the Company
Chongqing BOE Display Technology Co., Ltd.* Associate of the Group and the Company
Wuhan BOE Optoelectronics Technology Co., Ltd.* Joint venture of the Group and the Company
Beijing BOE Yiyun Science &Technology Co., Ltd.* Joint venture of the Group and the Company
*The above-mentioned Companies became subsidiaries of the Company in 2018, and Note X. only disclosed the related party
transactions of companies above the before the acquisition.
Page 112
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
4 Information on other related parties
Name of other related parties Related party relationship
Enterprises that are controlled by the
Beijng NAURA Microelectronics Equipment Co.,Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Beijing Zhengdong Electronic Power Group Co., Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Beijing Yandong Microelectronic Co., Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Beijing Dongdian Industrial Development Co., Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Beijing Sevenstar PV Group Co., Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Sevenstar Semiconductor Technologies Co.,Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
NAURA Technology Group Co., Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Beijing Zhaowei Electronic Group Co., Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Beijing Zhaowei Technology Development Co., Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Beijing BBEF Science & Technology Co., Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Beijing C&W Intelligent Equipment Co., Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
New Vision Micro.(Hong Kong) Co., Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Beijing Ether Electronics Group co. , Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Beijing Yansong Economic and Trade Co., Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Beijing BOE Investment Development Co., Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Beijing Ripeness Sanyuan Instrumentation Co., Ltd.
Company’s ultimate holding company
Enterprises that are controlled by the
Beijing Electronics Holding & SK Technology Co., Ltd.
Company’s ultimate holding company
BAIC Motor Corporation., Ltd. Other related parties
5 Transactions with related parties
The transactions below with related parties were conducted under normal commercial terms or agreements.
(1) Purchase of goods, equipments, and receiving of services (excluding remuneration of key management personnel)
The Group
Nature of transaction 2018 2017
Page 113
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
Purchase of goods 141,966,350 41,887,513
Procurement of equipment 601,680,874 488,196,010
Receiving services 19,901,930 14,049,102
Total 763,549,154 544,132,625
The Company
Nature of transaction 2018 2017
Purchase of goods 11,854,329 -
Receiving services 96,670,167 17,850,493
Payment of interest expenses 544,410,236 138,968,179
Total 652,934,732 156,818,672
(2) Sale of goods / rendering of services
The Group
Nature of transaction 2018 2017
Sales of goods 45,676,373 74,184,881
Provision of services 10,166,253 25,676
Total 55,842,626 74,210,557
Page 114
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
The Company
Nature of transaction 2018 2017
Provision of services 3,864,353,230 2,638,703,536
Interest income received 511,825 173,360,989
Total 3,864,865,055 2,812,064,525
(3) Leases
(a) As the lessor
The Group
Lease income recognized Lease income recognized
Type of assets leased in 2018 in 2017
Investment properties 2,485,506 4,129,082
The Company
Lease income recognized Lease income recognized
Type of assets leased in 2018 in 2017
Investment properties 17,972,397 18,700,067
(b) As the lessee
The Group
Lease expense Lease expense
recognized recognized
Type of assets leased in 2018 in 2017
Fixed assets 2,441,711 51,292
The Company
Lease expense Lease expense
recognized recognized
Type of assets leased in 2018 in 2017
Fixed assets 1,936,219 -
Page 115
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(4) Funding from related party
The Company
Name of related party Amount of funding Inception date Maturity date
Funds from
Subsidiary of the parent company 2,000,000,000 09/06/2017 09/06/2020
Subsidiary of the parent company 700,000,000 13/04/2018 13/04/2020
Subsidiary of the parent company 500,000,000 13/09/2015 Non-fixed term
Subsidiary of the parent company 1,200,000,000 30/09/2015 Non-fixed term
Subsidiary of the parent company 650,000,000 25/04/2018 25/04/2020
Subsidiary of the parent company 3,500,000,000 01/08/2018 01/08/2023
Subsidiary of the parent company 200,000,000 28/07/2017 28/07/2019
Subsidiary of the parent company 1,600,000,000 04/12/2017 04/06/2019
Subsidiary of the parent company 3,800,000,000 19/07/2018 19/07/2023
Subsidiary of the parent company 1,000,000,000 23/12/2018 23/12/2019
Subsidiary of the parent company 4,000,000,000 09/06/2017 09/06/2020
Subsidiary of the parent company 3,000,000,000 28/05/2018 28/05/2020
Subsidiary of the parent company 600,000,000 19/12/2018 19/12/2023
Subsidiary of the parent company 2,250,000,000 28/05/2018 28/05/2020
Related parties Amount of funding Inception date Maturity date
Funds to
Subsidiary of the parent company 30,000,000 06/01/2016 21/01/2022
Subsidiary of the parent company 50,000,000 27/03/2015 26/12/2021
Subsidiary of the parent company 5,000,000 19/08/2016 Non-fixed term
Subsidiary of the parent company 2,000,000 16/12/2016 Non-fixed term
Subsidiary of the parent company 50,000,000 28/04/2016 28/04/2019
Subsidiary of the parent company 25,000,000 05/05/2016 28/04/2019
Subsidiary of the parent company 25,000,000 08/06/2016 07/06/2019
Subsidiary of the parent company 100,000,000 22/11/2016 21/05/2019
Subsidiary of the parent company 100,000,000 22/11/2016 15/11/2019
Subsidiary of the parent company 9,375,000 19/01/2017 18/01/2019
Subsidiary of the parent company 9,375,000 19/01/2017 18/07/2019
Subsidiary of the parent company 9,375,000 19/01/2017 17/01/2020
Subsidiary of the parent company 40,625,000 20/01/2017 18/01/2019
Subsidiary of the parent company 40,625,000 20/01/2017 18/07/2019
Subsidiary of the parent company 40,625,000 20/01/2017 17/01/2020
Subsidiary of the parent company 350,000,000 28/12/2018 28/12/2019
Subsidiary of the parent company 50,000,000 16/03/2018 16/09/2019
Subsidiary of the parent company 50,000,000 16/03/2018 16/03/2020
Subsidiary of the parent company 50,000,000 16/03/2018 16/09/2020
Subsidiary of the parent company 50,000,000 16/03/2018 12/03/2021
Page 116
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(5) Remuneration of key management personnel
The Group and the Company
Item 2018 2017
Remuneration of key management personnel 65,765,000 40,609,000
6 Receivables from and payables to related parties
Receivables from related parties
The Group
2018 2017
Provision for bad Provision for bad
Item Book value and doubtful debts Book balance and doubtful debts
Accounts receivable 52,246 - 9,600,724 -
Prepayments 2,814,000 - 5,007,430 -
Other receivables 12,148 - 27,591,317 -
The Company
2018 2017
Provision for bad Provision for bad
Item Book value and doubtful debts Book balance and doubtful debts
Accounts receivable 36,108,800 473,228 40,255,999 473,228
Prepayments 79,660 - 3,723,049 -
Dividends receivable 14,115,915 - 10,404,147 -
Other receivables 1,967,828,693 - 1,792,487,745 -
Other non-current assets 280,000,000 - 480,000,000 -
Non-current assets due within one year 450,000,000 - 3,648,840,000 -
Page 117
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
Payables to related parties
The Group
Item 2018 2017
Accounts payable 30,361,810 14,532,494
Advances from customers 1,111 141,921
Other payables 294,554,788 133,821,563
The Company
Item 2018 2017
Accounts payable 3,119,036 1,856,219
Advances from customers 1,563,300,806 1,353,212,276
Other payables 7,690,814,090 9,472,440,978
Other non-current liabilities 20,954,104,125 7,600,000,000
7 Commitments of the related parties
As at balance sheet date, the commitments of the related parties, which are signed but not listed in financial statement are as
following:
2018 2017
Procurement of equipment 370,768,209 107,208,907
XI. Capital management
The Group’s primary objectives when managing capital are to safeguard its ability to continue as a going concern, so that it
can continue to provide returns for shareholders, by pricing products and services commensurately with the level of risk and
by securing access to finance at a reasonable cost.
The Group defines “capital” as including all components of equity, less unaccrued proposed dividends. The balances of
related party transactions are not regarded by the Group as capital.
The Group’s capital structure is regularly reviewed and managed to achieve an optimal structure and return for shareholders.
Factors for the Group’s consideration include: its future funding requirements, capital efficiency, actual and expected
profitability, expected cash flows, and expected capital expenditure. Adjustments are made to the capital structure in light of
changes in economic conditions affecting the Group.
The Group’s capital structure is monitored on the basis of an adjusted net debt-to-capital ratio (total liabilities divided by total
assets). The capital management strategies exerted by the Group remained unchanged from 2017. In order to maintain or
adjust the ratio, the Group may adjust the amount of dividends paid to shareholders, request new loans, issue new shares, or
sell assets to reduce debt.
Page 118
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
As at 31 December 2018 and 31 December 2017, the Group’s asset-liability ratios are as follows:
2018 2017
Asset-liability ratio 60.41% 59.28%
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
XII. Commitments and contingencies
1 Significant commitments
(1) Capital commitments
The Group 2018 2017
Contracts entered into but not performed or
partially performed 61,515,573,632 51,309,042,746
Contracts authorized but not entered into 84,789,129,465 37,485,065,035
Total 146,304,703,097 88,794,107,781
The Group’s contracts authorised but not entered into mainly included the fixed assets that Chengdu Optoelectronics, BOE
(Chengdu) Digital Medical Center, Chongqing Display Technology, Mianyang BOE and Wuhan BOE planned to purchase in
2018 and project equipment that the Group planned to purchase in 2018.
The Company 2018 2017
Contracts entered into but not performed or
partially performed 39,666,849,756 40,532,322,288
The Company’s contracts entered into but not performed or partially performed mainly included guaranteed investments in
Chengdu Optoelectronics, BOE (Chengdu) Digital Medical Center, Chongqing Display Technology, Mianyang BOE and
Wuhan BOE.
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Financial statements for the year ended 31 December 2018
(3) Operating lease commitments
As at 31 December, the total future minimum lease payments under non-cancellable operating leases of the Group‘s
properties were payable as follows:
Item 2018 2017
Within 1 year (inclusive) 53,187,055 31,054,096
After 1 year but within 2 years (inclusive) 30,220,405 27,481,454
After 2 years but within 3 years (inclusive) 21,345,206 20,499,253
Over 3 years 82,499,050 87,810,970
Total 187,251,716 166,845,773
As at 31 December 2018, the Company had no significant operating lease commitments.
2 Guarantee
(1) The Group as the guarantor
As at 31 December 2018, the Group did not have guarantees provided for external enterprises.
(2) The Company as the guarantor
On December 31, 2018, Chengdu Optoelectronics used the equipment with a book value of RMB 13,180,966,120 and the
construction in progress of RMB 12,119,027,108 as collateral to obtain long-term loans of RMB 11,150,000,000 and USD
670,000,000, and letter of credit issued but not accepted of USD 4,463,271 and JPY 4,965,422,733, the overseas payment of
USD 14,535,000 and the long-term guarantee of RMB 2,318,500,000. The Company provides joint and several liability
guarantee for the above loans.
On December 31, 2018, Hefei BOE used other monetary funds with a book value of RMB1,300,000, land use rights with a
book value of RMB 77,725,970, and plants and buildings of RMB 1,710,957,610 and RMB 1,104,270,142 to obtain a
long-term loan of USD 43,444,409. The company provided a joint liability guarantee for the above loans.
On December 31, 2018, Yuansheng Optoelectronics used its plant and construction of RMB 2,612,115,325, machinery and
equipment of RMB 4,814,248,015, land use rights of RMB 47,804,118 and The Company used 20% of the equity of BOE
Energy Investment Co., Ltd. (BOE Energy Investment)and 20% of Ordos City Haosheng Energy Investment Co., Ltd.
(Haosheng Energy), Hefei BOE used 65% of the shares of Haosheng Energy and BOE OT used 15% of the shares of
Haosheng Energy to enable Yuansheng Optoelectronics to obtain syndicated loans of RMB 633,330,000 and USD 96,000,000
( syndicated loan phase I). The company provided a joint liability guarantee for the above loans. At the same time, Yuansheng
Optoelectronics used its machinery and equipment with a book value of RMB 8,356,950,447 as collateral. The collateral of
the first syndicated loan was continued as a collateral after the repayment of the first syndicated loan, so that Yuan Sheng
Optoelectronics obtained a second-phase II syndicated loan of RMB 3,500,000,000 and USD 121,000,000, and the Company
provided a third-party joint liability guarantee.
On December 31, 2018, Hefei Xinsheng secured the land use right of RMB 119,560,942, the plant and building of RMB
3,674,066,918, and the equipment of RMB 7,392,380,002 to obtain the long-term loans due within one year of USD
254,560,000 and the long-term loans of USD 820,440,000, the Company provides joint liability guarantee for the above
loans.
On December 31, 2018, Chongqing BOE secured the land use right of RMB 169,407,160 and the machinery and equipment
and buildings of RMB 14,553,397,523, and the pledge of the deposit of USD 18,500,000 to obtain the long-term loans of
USD 952,030,000 and RMB 823,000,000, the Company provides joint and several liability guarantee for the above loans.
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Financial statements for the year ended 31 December 2018
On December 31, 2018, Fuzhou BOE secured the land use right of RMB 216,323,878, the machinery and equipment of RMB
15,898,593,435, and the construction in progress of RMB 106,603,967 as collateral to obtain USD 984,000,000 and for
long-term loans of RMB 5,002,990,000, the Company provided joint and several liability guarantees for the above-mentioned
loans. In addition, the Company provided joint and several liability guarantees for the long-term guarantees of RMB 338,600
and JPY 95,200,000 for the opening of un-accepted letters of credit and RMB 1,800,000,000.
On December 31, 2018, Hefei Display Lighting secured the land use right with a book value of RMB 299,402,850, the
machinery and equipment of RMB 23,173,261,703 and the construction in progress of RMB 5,136,944,836 for long-term
loans of RMB 5,001,721,200 and US$1,470,800,000. The Company provided joint and several liability guarantee for the
above loans. In addition, The Company provides joint and several liability guarantee for unsecured letter of credit of RMB
14,142,912 and JPY 3,607,400,000 and a long-term guarantee of RMB 2,860,000,000.
On December 31, 2018, Mianyang BOE secured its long-term borrowings of USD 10,000,000 and RMB 6,000,000,000 with
its land use rights of RMB 279,067,185, the property, plant, and equipment of RMB 108,538,569 and the construction in
progress of RMB 16,597,768,730. The Company provided joint liability guarantee for the above-mentioned loans. In
addition, the Company provided joint liability guarantee for the RMB 2,960,000,000 issued guarantee letters, USD
148,827,295 and JPY 4,011,006,903 for the issuance of unaccepted letters of credit, and USD 48,271,469 and JPY
7,784,950,000 overseas payment.
XIII. Segment reporting
(1) Segment reporting considerations
The Group management reviews the operation performance and allocates resources according to the business segments
below.
(a) Display and Sensor Devices — This business mainly leading the innovation and development of TFT-LCD
technologies, has been committed to speeding up the development of AMOLED, flexible display, VR/AR and other
new display devices and sensors, promoting the development of gene sequencing, molecular antenna, multi-sign
sensor, photoelectric sensing, fingerprint identification and security, and upgrading information exchange ports and
related sensors on the basis of the display, so as to offer better products and services in smart phones, tablet PCs,
laptops, displays, televisions, industrial control, health care, VR/AR and other applications.
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Financial statements for the year ended 31 December 2018
(b) Smart systems — This business mainly expanding its business in digital art exhibition, supermarket retailing services,
financial retailing services, smart equipment design and manufacturing services, photovoltaic facilities construction
and operation & maintenance, vehicle-based display and Internet of Vehicles (IoV). It provides smart solutions for
smart retailing, smart manufacturing services, smart energy and smart Internet of Vehicles.
(c) Healthcare service — This business mainly accumulate the display, sensor, artificial intelligence and large data four
years core technology and medicine, life science combination, the integration of medical innovation, build, including
artificial intelligence, life data detection, cell engineering, medical technology innovation transformation And other
innovative technology platform, focusing on the development of mobile health, digital hospitals, regenerative
medicine and health park four business, for human health to provide intelligent port products and professional
services.
(d) Others — Other service mainly includes technical development service and patent maintenance service.
The main reason to separate the segments is that the Group independently manages the port devices business, the
smart IoT business, and healthcare service businesses and other businesses. Because the business segments
manufacture and distribute different products, apply different manufacturing processes and specifies in gross profit,
the business segments are managed independently. The management evaluates the performance and allocates
resources according to the profit of each business segment and does not take financing cost and investment income
into account.
(2) Accounting policy for the measurements of segment profit or loss, assets and liabilities
For the purposes of assessing segment performance and allocating resources between segments, the Group’s management
regularly reviews the assets, liabilities, revenue, expenses and financial performance, attributable to each reportable segment
on the following bases:
Segment assets include all tangible, intangible, other non-current and current assets, such as accounts receivable, with the
exception of deferred tax assets and other unallocated corporate assets. Segment liabilities include payables, bank borrowings
and other long-term liabilities attributable to the individual segments, but exclude deferred tax liabilities and other
unallocated corporate liabilities.
Financial performance is operating income (including operating income from external customers and inter-segment operating
income) after deducting expenses, depreciation, amortisation, impairment losses, gains or losses from changes in fair value,
investment gain, non-operating income and expenses and income tax expenses attributable to the individual segments. The
transfer pricing of inter-segment sales are determined with reference to prices charged to external parties for similar orders.
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Financial statements for the year ended 31 December 2018
2018
Port devices business Smart IoT business Healthcare business Others Elimination Remaining items Total
Operating income 86,688,426,362 17,499,500,352 1,151,844,468 3,569,024,583 (11,799,930,830) - 97,108,864,935
Including: Operating income from external
customers 81,265,815,692 14,734,461,467 1,108,587,776 - - - 97,108,864,935
Inter-segment operating income 5,422,610,670 2,765,038,885 43,256,692 3,569,024,583 (11,799,930,830) - -
Operating cost 83,977,714,485 17,397,663,021 862,984,461 2,197,359,466 (11,483,372,588) 1,048,345,187 93,100,694,032
Operating profit / (loss) 2,710,711,877 101,837,331 288,860,007 1,371,665,117 (316,558,242) (1,048,345,187) 4,008,170,903
Total profit / (loss) 2,818,100,703 106,837,228 296,075,661 1,366,180,004 (316,558,242) (1,048,345,187) 4,122,290,167
Income tax expense 624,917,163 16,151,805 90,102,577 234,879,588 276,364,961 - 1,242,416,094
Net profit / (Net loss) 2,193,183,540 90,685,423 205,973,084 1,131,300,416 (592,923,203) (1,048,345,187) 2,879,874,073
Total assets 306,849,853,351 21,967,564,757 5,852,144,685 151,623,442,496 (182,516,887,526) 252,373,622 304,028,491,385
Total liabilities 122,453,918,956 13,679,315,017 2,384,123,956 103,650,272,046 (59,915,809,696) 1,419,373,545 183,671,193,824
Other items:
- Impairment losses for the current period 1,198,177,937 39,528,417 1,882,409 - - - 1,239,588,763
- Depreciation and amortization expenses 13,511,852,315 507,380,278 92,219,472 238,099,764 (156,607,616) - 14,192,944,213
- Long-term equity investments in associates - - - 2,389,166,886 - - 2,389,166,886
- Capital outlay 55,330,404,250 1,672,461,272 815,566,097 232,876,486 (283,237,527) - 57,768,070,578
- Losses from investment in associates and joint
ventures - - - (13,925,731) - - (13,925,731)
- Net interest expenses 2,409,003,425 161,469,304 9,616,358 197,583,788 - 623,009,190 3,400,682,065
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Financial statements for the year ended 31 December 2018
2017
Port devices business Smart IoT business Healthcare business Others Elimination Remaining items Total
Operating income 85,149,888,634 15,620,915,713 1,023,905,566 2,225,609,340 (10,219,840,038) - 93,800,479,215
Including: Operating income from external
customers 80,120,037,284 12,663,489,516 1,016,952,415 - - - 93,800,479,215
Inter-segment operating income 5,029,851,350 2,957,426,197 6,953,151 2,225,609,340 (10,219,840,038) - -
Operating cost 75,230,477,664 15,722,416,289 670,105,169 1,892,185,869 (10,023,810,470) 635,371,412 84,126,745,933
Operating profit / (loss) 9,919,410,970 (101,500,576) 353,800,397 333,423,471 (196,029,568) (635,371,412) 9,673,733,282
Total profit / (loss) 9,939,734,442 (43,269,543) 357,160,920 318,689,267 (195,872,135) (635,371,412) 9,741,071,539
Income tax expense 1,651,714,228 2,686,594 83,168,222 143,090,936 - - 1,880,659,980
Net profit / (Net loss) 8,288,020,214 (45,956,137) 273,992,698 175,598,331 (195,872,135) (635,371,412) 7,860,411,559
Total assets 252,310,396,239 12,835,279,534 3,517,599,267 133,049,382,316 (145,710,171,164) 106,255,657 256,108,741,849
Total liabilities 106,262,096,277 9,450,107,994 384,374,814 81,468,098,461 (46,304,097,806) 563,899,276 151,824,479,016
Other items:
- Impairment losses for the current period 2,184,895,069 42,940,013 1,689,600 - - - 2,229,524,682
- Depreciation and amortization expenses 11,567,593,359 231,141,413 69,857,531 244,966,959 (169,046,014) - 11,944,513,248
- Long-term equity investments in associates - - - 6,928,854,415 - - 6,928,854,415
- Capital outlay 46,574,510,032 2,248,086,802 643,076,998 248,554,284 (579,340,067) - 49,134,888,049
- Income from investment in associates and
joint ventures - - - 169,034 - - 169,034
- Net interest expenses 2,029,955,478 92,655,402 12,635,399 83,953,305 - 373,979,047 2,593,178,631
From 2018, when the Group’s management assessing segment performance and allocating resources between segments, Varitronix International Group Ltd is classified as Port devices business
part. To make information comparable, 2017 segment reporting is adjusted corresponding.
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Financial statements for the year ended 31 December 2018
(3) Secondary segment reporting (regional segments)
(a) The geographical information is based on the location of customers receiving services or goods.
The information of the Group’s external transactions based by locations is as follows:
Operating income from external customers
2018 2017
Chinese mainland 42,942,349,994 44,077,183,105
Other Asian countries and regions 44,256,356,951 44,260,377,203
Europe 3,488,264,284 2,185,981,332
America 6,354,884,816 3,198,611,737
Other regions 67,008,890 78,325,838
Total 97,108,864,935 93,800,479,215
(b) Divided based on asset locations
The geographical location of the specified non-current assets is based on the physical location of the asset, in the case
of fixed assets; the location of the operation to which they are allocated, in the case of intangible assets and goodwill;
and the location of operations, in the case of interests in associates and jointly controlled enterprises. Most of the
non-current assets in the Group are located in Chinese mainland.
(4) Major customers
Operating income of Display and Sensor Devices from which is over 10% of the Group’s total operating income ended up
with one customer. The operating income from this customer represented RMB 16,287,833,781 (2017: RMB
18,838,046,705), which was approximately 17% (2017: 20%) of the Group’s total operating income.
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Financial statements for the year ended 31 December 2018
XIV. Notes of financial statements of the Company
1 Cash at bank and on hand
2018 2017
Amount in Exchange RMB / Amount in Exchange RMB /
original currency rate RMB equivalents original currency rate RMB equivalents
Cash on hand:
RMB 339 1,178
USD 5 6.8632 34 5 6.5342 31
HKD 165 0.8762 145 165 0.8359 138
JPY 51,325 0.0619 3,176 51,325 0.0579 2,971
KRW 420,000 0.0061 2,562 420,000 0.0061 2,566
Other foreign currencies 16,337 16,009
Sub-total 22,593 22,893
Bank Deposits:
RMB 1,333,209,249 1,991,214,902
USD 363,428,749 6.8632 2,494,284,193 152,685,791 6.5342 997,679,497
HKD 2,622,706 0.8762 2,298,015 2,254,086 0.8359 1,884,209
Sub-total 3,829,791,457 2,990,778,608
Total 3,829,814,050 2,990,801,501
Including: Total overseas deposits were equivalent to RMB 158,521 (2017: RMB 149,395).
2 Bills receivable and accounts receivable
Note 2018 2017
Bills receivable 1,500,000 -
Accounts receivable (1) 36,952,623 39,897,385
Total 38,452,623 39,897,385
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Financial statements for the year ended 31 December 2018
(1) Accounts payable
(a) The Company’s accounts receivable by customer type:
2018 2017
Amounts due from subsidiaries 36,108,800 40,249,695
Amounts due from other related
parties - 6,304
Amounts due from other customers 3,733,689 2,531,252
Sub-total 39,842,489 42,787,251
Less: Provision for bad and doubtful
debts 2,889,866 2,889,866
Total 36,952,623 39,897,385
(c) The ageing analysis of accounts receivable is as follows:
Ageing 2018 2017
Within 1 year (inclusive) 3,889,195 829,805
1 to 2 years (inclusive) - 2,506,960
2 to 3 years (inclusive) - 5,795,247
Over 3 years 35,953,294 33,655,239
Sub-total 39,842,489 42,787,251
Less: Provision for bad and doubtful
debts 2,889,866 2,889,866
Total 36,952,623 39,897,385
The ageing is counted starting from the date when accounts receivable are recognized.
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(c) Accounts receivable by category
2018 2017
Provision for bad and doubtful Provision for bad and doubtful
Book value debts Book balance debts
Carrying Carrying
Category Amount Percentage (%) Amount Percentage (%) amounts Amount Percentage (%) Amount Percentage (%) amounts
Accounts receivables that are
collectively assessed for impairment
based on credit risk characteristics* 25,743,537 65% - - 25,743,537 25,391,284 59% - - 25,391,284
Individually insignificant but assessed
for impairment individually 14,098,952 35% 2,889,866 20% 11,209,086 17,395,967 41% 2,889,866 17% 14,506,101
Total 39,842,489 100% 2,889,866 7% 36,952,623 42,787,251 100% 2,889,866 7% 39,897,385
Note*: This category includes accounts receivable having been individually assessed but not impaired.
The Company has no individually significant accounts receivable and individually for impairment this year.
As at 31 December 2018, the Company collectively assessed accounts receivable having been individually assessed but not impaired for impairment and did not recognize impairment
loss against this amount of accounts receivable (2017: nil).
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(d) Additions and recoveries of provision for bad and doubtful debts during the year:
2018 2017
Balance at the beginning of the year 2,889,866 2,889,866
Charge during the year - -
Write-offs during the year - -
Balance at the end of the year 2,889,866 2,889,866
For the year ended 31 December 2018, the Company had no individually significant write-off or recovery of doubtful
debts which had been fully or substantially made in prior years.
(e) Five largest accounts receivable by debtor at the end of the year
The five largest accounts receivable of the Company amounted to RMB 38,947,850, amounting to 98% of the total
accounts receivable at the end of the year, and the corresponding balance of provision for bad and doubtful debts is
RMB 2,889,866.
3 Other receivables
Note 2018 2017
Interest receivable 9,659,279 -
Dividends receivable (1) 14,115,915 10,404,147
Others (2) 1,992,053,266 1,824,727,573
Total 2,015,828,460 1,835,131,720
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BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(1) Dividends receivable
2018 2017
Yinghe Century 8,204,147 8,204,147
Vacuum Electronics 2,200,000 2,200,000
Beijing Electronics Zone Investment and Development
Co., Ltd. 3,711,768 -
Balance at the end of the year 14,115,915 10,404,147
(2) Others
(a) The Company’s other receivables by customer type:
Customer type 2018 2017
Amounts due from subsidiaries 1,967,828,693 1,775,667,804
Amounts due from other related
parties - 16,819,941
Amounts due from other customers 24,224,573 32,239,828
Total 1,992,053,266 1,824,727,573
(b) The Company’s other receivables by currency:
2018 2017
Amount in Exchange RMB / Amount in Exchange RMB /
original currency rate RMB equivalents original currency rate RMB equivalents
RMB 1,992,041,781 1,824,727,573
HKD 13,107 0.8762 11,485 -
Sub-total 1,992,053,266 1,824,727,573
Less: Provision for
bad and
doubtful
debts - -
Total 1,992,053,266 1,824,727,573
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Financial statements for the year ended 31 December 2018
(c) The ageing analysis of other receivables of the Company is as follows:
2018 2017
Within 1 year (inclusive) 1,649,255,313 1,290,921,174
1 to 2 years (inclusive) 94,152,814 169,386,864
2 to 3 years (inclusive) 11,422,640 65,663,702
Over 3 years 237,222,499 298,755,833
Total 1,992,053,266 1,824,727,573
The ageing is counted starting from the date when other receivable are recognized.
(d) Other receivables categorized by nature
Nature of other receivables 2018 2017
Transaction amount 305,938,861 702,635,642
Rent 227,919,843 211,037,415
Royalty fee 1,441,130,049 878,653,588
Others 17,064,513 32,400,928
Total 1,992,053,266 1,824,727,573
(e) Five largest other receivables by debtor at the end of the year
Other receivables at the end of the year due from the top five debtors of the Company amounted to RMB
1,611,402,222 in total, most of which are borrowings and royalty fees. No provision is made for bad and doubtful
debts after assessment.
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Financial statements for the year ended 31 December 2018
4 Other current assets
2018 2017
VAT on tax credits 1,127,650 40,631,837
Others 46,677,446 20,450,238
Total 47,805,096 61,082,075
5 Available-for-sale financial assets
(1) Available-for-sale financial assets
2018 2017
Provision for Provision for
impairment of Carrying impairment of Carrying
Item Book value inventories amount Book value inventories amount
Available-for-sale equity
instruments
- Measured at fair value 259,708,877 150,099,655 109,609,222 280,680,730 150,099,655 130,581,075
- Measured at cost 124,689,635 106,001,603 18,688,032 124,689,635 106,001,603 18,688,032
Total 384,398,512 256,101,258 128,297,254 405,370,365 256,101,258 149,269,107
(2) Available-for-sale financial assets at fair value at the end of the year:
2018
Cost 224,818,586
Fair Values 109,609,222
Accumulated fair value movements in other comprehensive
income 34,890,291
Provision for impairment (150,099,655)
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Financial statements for the year ended 31 December 2018
(3) Available-for-sale financial assets at cost at the end of the year
Provision for
Book value impairment
Balance at the
Balance at the beginning Percentage of
beginning of the Increase during Reductions Balance at the and the end of shareholding
Investee year the year during the year end of the year the year in investees (%)
Teralane Semiconductor Inc. 11,868,000 - - 11,868,000 - 7.29%
Zhejiang BOE Display Technology Co.,
Ltd. 59,959,709 - - 59,959,709 59,638,453 7.03%
Zhejiang Qiusheng Photoelectric
Technology Co., Ltd. 46,431,926 - - 46,431,926 46,183,150 5.09%
National Engineering Laboratory of
Digital Television (Beijing) Co.,
Ltd. 6,250,000 - - 6,250,000 - 12.50%
Others 180,000 - - 180,000 180,000
Total 124,689,635 - - 124,689,635 106,001,603
6 Long-term equity investments
(1) The Company’s long-term equity investments by category:
2018 2017
Investments in subsidiaries 141,883,775,023 116,691,267,854
Investments in associates and joint
ventures 1,675,958,462 4,562,412,537
Sub-total 143,559,733,485 121,253,680,391
Less: Provision for impairment 60,000,000 60,000,000
Total 143,499,733,485 121,193,680,391
In previous year, the Company provided full impairment losses for investments in its subsidiary, Special Display, which
amounted to RMB 60,000,000.
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Financial statements for the year ended 31 December 2018
(2) Investments in subsidiaries:
Balance at the Opening balance of Closing balance of
beginning of the Additions during Reductions during Balance at the end provision for provision for
Subsidiary year the year the year of the year impairments impairments
Beijing BOE Optoelectronics
Technology Co., Ltd. 4,172,288,084 - - 4,172,288,084 - -
Chengdu BOE Optoelectronics
Technology Co., Ltd. 14,733,149,991 4,550,000,000 - 19,283,149,991 - -
Hefei BOE Optoelectronics
Technology Co., Ltd. 9,000,000,000 - - 9,000,000,000 - -
Beijing BOE Display
Technology Co., Ltd. 17,418,713,599 - - 17,418,713,599 - -
Hefei Xinsheng
Optoelectronics Technology
Co., Ltd. 16,575,150,000 - - 16,575,150,000 - -
Ordos Yuansheng
Optoelectronics Co., Ltd. 11,804,000,000 - - 11,804,000,000 - -
Beijing BOE Vision-electronic
Technology Co., Ltd. 2,170,000,000 850,000,000 - 3,020,000,000 - -
Chongqing BOE
Optoelectronics Co., Ltd. 19,565,354,599 - - 19,565,354,599 - -
Beijing BOE Vacuum
Electronics Co., Ltd. 19,250,000 - - 19,250,000 - -
Beijing BOE Vacuum
Technology Co., Ltd. 32,000,000 - - 32,000,000 - -
Beijing BOE Special Display
Technology Co., Ltd. 100,000,000 - - 100,000,000 60,000,000 60,000,000
Beijing Yinghe Century Co.,
Ltd. 333,037,433 - - 333,037,433 - -
BOE Optical Science and
technology Co., Ltd. 658,961,914 - - 658,961,914 - -
BOE Hyundai LCD (Beijing)
Display Technology Co.,
Ltd. 31,038,525 - - 31,038,525 - -
BOE (Hebei) Mobile
Technology Co., Ltd. 1,053,651,020 300,000,000 - 1,353,651,020 - -
Beijing BOE multimedia
Technology Co., Ltd. 400,000,000 - - 400,000,000 - -
Beijing BOE Energy
Technology Co., Ltd. 850,000,000 - - 850,000,000 - -
Beijing BOE Smart Commerce
Co., Ltd. 10,000,000 - - 10,000,000 - -
Beijing Zhongxiangying
Technology Co., Ltd. 10,000,000 - - 10,000,000 - -
Erdos Haosheng Energy
Investment Co., Ltd. 2,000,000 - - 2,000,000 - -
BOE Semi-conductor Co., Ltd. 9,450,000 - - 9,450,000 - -
BOE Optoelectronics Holding
Co.,Ltd. 1,743,602,824 1,025,059,200 - 2,768,662,024 - -
Beijing Asahi Electronic
Materials Co.,Ltd. 30,888,470 - - 30,888,470 - -
Beijing BOE Land Co., Ltd. 7,731,474 - - 7,731,474 - -
BOE KOREA Co., Ltd. 788,450 - - 788,450 - -
Beijing BOE Marketing Co.,
Ltd. 20,500,000 10,000,000 - 30,500,000 - -
Fuzhou BOE Optoelectronics
Technology Co., Ltd. 12,666,042,079 1,634,000,000 - 14,300,042,079 - -
Healthcare Investment 1,193,154,069 550,000,000 - 1,743,154,069 - -
Hefei Display 1,550,765,323 448,000,000 - 1,998,765,323 - -
Page 134
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
Technology Development 1,000,000 - - 1,000,000 - -
Smart Science & Technology 50,000,000 - - 50,000,000 - -
Zhuoyin Science &
Technology 400,750,000 199,250,000 - 600,000,000 - -
Kunming BOE Display
Technology Co., Ltd. 78,000,000 124,800,000 - 202,800,000 - -
Sensing Technology - 50,000,000 - 50,000,000 - -
Wuhan BOE Optoelectronics
Technology Co., Ltd. - 1,230,860,516 - 1,230,860,516 - -
Chongqing BOE Display
Technology Co., Ltd. - 193,557,370 - 193,557,370 - -
Mianyang BOE
Optoelectronics Technology
Co., Ltd. - 13,936,980,083 - 13,936,980,083 - -
Beijing BOE Yiyun Science
&Technology Co., Ltd. - 90,000,000 - 90,000,000 - -
Total 116,691,267,854 25,192,507,169 - 141,883,775,023 60,000,000 60,000,000
For information about the major subsidiaries of the Company, refer to Note VII. 1.
Page 135
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(3) Investments in associates and joint ventures:
Movements during the year
Investment income
Balance at the recognized Other Cash dividends or Acquired as Closing balance of
beginning of the Increase in under equity comprehensive Other changes in profit subsidiaries Balance at the end provision for
Investee year investments method income equity declared during the year of the year impairments
Joint ventures
Wuhan BOE Optoelectronics Technology Co.,
Ltd. 91,590,309 1,140,000,000 (729,793) - - - (1,230,860,516) - -
Mianyang BOE Optoelectronics Technology
Co., Ltd. 2,698,378,093 2,400,000,000 (1,398,010) - - - (5,096,980,083) - -
Beijing BOE Yiyun Science &Technology Co.,
Ltd. 3,763,783 - (3,763,783) - - - - - -
Sub-total 2,793,732,185 3,540,000,000 (5,891,586) - - - (6,327,840,599) - -
Associates
Beijing Nissin Electronics Precision
Component Co., Ltd. - - (1,886,109) - 2,424,598 - - 538,489 -
Beijing Nittan Electronic Co., Ltd. 53,786,835 - 10,946,250 - - (3,000,000) - 61,733,085 -
Erdos BOE Energy Investment Co., Ltd. 9,458,312 - - - - - - 9,458,312 -
Beijing Infi-Hailin Venture Investment Co.,
Ltd. 373,361 - 62,467 - - - - 435,828 -
Beijing Infi-Hailin Venture Investment (Limited
Partnership) 137,448,451 - 22,591,316 (47,702,834) - (30,000,000) - 82,336,933 -
TPV Display Technology (China) Limited 27,190,533 - (4,189,174) - - - - 23,001,359 -
Beijing Xindongneng Investment Fund
(Limited Partnership) 1,472,249,231 150,000,000 (11,778,573) (155,295,781) - - - 1,455,174,877 -
Beijing Xindongneng Investment Management
Co., Ltd. 4,861,735 - 2,327,127 - - (2,000,000) - 5,188,862 -
Shenzhen Yunyinggu Technology Co., Ltd. 35,483,897 - (20,002,391) - - - - 15,481,506 -
Beijing Xloong Technologies Co.,Ltd. 23,981,997 - (1,372,786) - - - - 22,609,211 -
Chongqing BOE Display Technology Co., Ltd. 3,846,000 192,300,000 (2,808,246) 219,616 - - (193,557,370) - -
Sub-total 1,768,680,352 342,300,000 (6,110,119) (202,778,999) 2,424,598 (35,000,000) (193,557,370) 1,675,958,462 -
Total 4,562,412,537 3,882,300,000 (12,001,705) (202,778,999) 2,424,598 (35,000,000) (6,521,397,969) 1,675,958,462 -
Page 136
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
7 Deferred tax assets / deferred tax liabilities
2018 2017
Deductible/ Deductible/
(taxable) (taxable)
temporary Deferred tax temporary Deferred tax
Item differences assets / (liabilities) differences assets / (liabilities)
Deferred tax assets:
Provisions for impairment losses of assets 342,108,420 51,316,263 342,108,420 51,316,263
Depreciation of fixed assets 87,117,936 13,067,690 76,472,749 11,470,912
Advances from customers 1,551,798,448 232,769,767 797,348,485 119,602,273
Others 151,182,178 22,677,327 - -
Sub-total 2,132,206,982 319,831,047 1,215,929,654 182,389,448
Amount offset (29,036,499) (32,183,263)
Balance after offset 290,794,548 150,206,185
Deferred tax liabilities:
Bond interest (71,525,943) (10,728,891) (71,532,514) (10,729,877)
Others (122,050,720) (18,307,608) (143,022,573) (21,453,386)
Sub-total (193,576,663) (29,036,499) (214,555,087) (32,183,263)
Amount offset 29,036,499 32,183,263
Balance after offset - -
As at 31 December 2018, the Company estimated that the amount of taxable income is expected to be available in the future period
that the deductible temporary differences are reversed, thereby confirming the relevant deferred tax assets.
8 Employee benefits payable
(1) Employee benefits payable:
Balance on
Balance as of Increase during the Reductions during 31 December
Note January 01, 2018. year the year 2018
Short-term employee benefits (2) 271,338,126 807,603,371 887,781,188 191,160,309
Post-employment benefits
- defined contribution plans (3) 11,662,067 77,656,828 79,339,943 9,978,952
Termination benefits - 547,277 547,277 -
Total 283,000,193 885,807,476 967,668,408 201,139,261
Balance on
Balance as of Increase during the Reductions during 31 December
Note January 01, 2017. year the year 2017
Page 137
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
Short-term employee benefits (2) 162,208,573 761,394,639 652,265,086 271,338,126
Post-employment benefits
- defined contribution plans (3) 7,708,530 56,247,103 52,293,566 11,662,067
Termination benefits - 43,597 43,597 -
Total 169,917,103 817,685,339 704,602,249 283,000,193
(2) Short-term employee benefits
Balance on
Balance as of Increase during the Reductions during 31 December
January 01, 2018. year the year 2018
Salaries, bonuses and allowances 232,610,577 622,616,346 705,728,418 149,498,505
Staff welfare - 37,159,393 37,159,393 -
Social insurance
Medical insurance 13,533,102 36,532,908 37,038,227 13,027,783
Work-related injury insurance 963,123 2,603,687 2,627,503 939,307
Maternity insurance 1,363,607 2,921,927 2,840,340 1,445,194
Housing fund 3,136,970 43,830,388 44,121,341 2,846,017
Labour union fee, staff and workers’
education fee 19,730,747 29,224,557 25,551,801 23,403,503
Others - 32,714,165 32,714,165 -
Total 271,338,126 807,603,371 887,781,188 191,160,309
Balance on
Balance as of Increase during the Reductions during 31 December
January 01, 2017. year the year 2017
Salaries, bonuses and allowances 124,332,853 636,782,785 528,505,061 232,610,577
Staff welfare - 33,701,495 33,701,495 -
Social insurance
Medical insurance 14,421,576 26,055,881 26,944,355 13,533,102
Work-related injury insurance 991,072 2,108,621 2,136,570 963,123
Maternity insurance 1,142,898 2,171,760 1,951,051 1,363,607
Housing fund 5,160,816 30,942,311 32,966,157 3,136,970
Labour union fee, staff and workers’
education fee 16,159,358 21,661,709 18,090,320 19,730,747
Others - 7,970,077 7,970,077 -
Total 162,208,573 761,394,639 652,265,086 271,338,126
Page 138
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(3) Post-employment benefits - defined contribution plans
Balance on
Balance as of Increase during the Reductions during 31 December
January 01, 2018 year the year 2018
Basic pension insurance 11,238,473 69,320,207 70,786,273 9,772,407
Unemployment insurance 249,227 2,917,729 2,960,411 206,545
Annuity 174,367 5,418,892 5,593,259 -
Total 11,662,067 77,656,828 79,339,943 9,978,952
Balance on
Balance as of Increase during the Reductions during 31 December
January 01, 2017 year the year 2017
Basic pension insurance 7,035,905 49,445,579 45,243,011 11,238,473
Unemployment insurance 300,444 2,080,473 2,131,690 249,227
Annuity 372,181 4,721,051 4,918,865 174,367
Total 7,708,530 56,247,103 52,293,566 11,662,067
9 Other payables
Note 2018 2017
Interest payable 330,964,989 312,029,252
Dividends payable 6,451,171 6,451,170
Others (1) 7,872,319,930 9,713,912,548
Total 8,209,736,090 10,032,392,970
(1) Others
(a) The Company’s other payables by category are as follows:
2018 2017
Projects, equipment and intangible
assets 52,308,258 143,778,196
External agency fee 17,476,002 21,106,470
Advanced disbursement 7,690,628,499 9,472,358,381
Others 111,907,171 76,669,501
Total 7,872,319,930 9,713,912,548
Page 139
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(b) The Company’s other payables by currency:
2018 2017
Amount in Exchange RMB / Amount in Exchange RMB /
original currency rate RMB equivalents original currency rate RMB equivalents
RMB 5,082,657,694 9,321,901,661
USD 406,452,150 6.8632 2,789,562,393 59,993,708 6.5342 392,010,887
JPY 1,612,973 0.0619 99,843 -
Total 7,872,319,930 9,713,912,548
10 Long-term loans
2018
Credited
RMB / /collateralised
Amount in original
currency Exchange rate RMB equivalents guaranteed /pledged
Bank loans
- RMB 27,510,000,000 Credited
Less: Long-term loans due within one year 990,000,000 Credited
Total 26,520,000,000
2017
Credited
RMB / /collateralised
Amount in original
currency Exchange rate RMB equivalents guaranteed /pledged
Bank loans
- RMB 26,668,000,000 Credited
- USD 200,000,000 6.5342 1,306,840,000 Credited
Less: Long-term loans due within one year 4,031,840,000 Credited
Total 23,943,000,000
The interest rate of RMB long-term loans for the Company ranged from 0% to 4.75% in 2018 (2017: 0% to 4.75%). The Company
had no renewed long-term loans because of overdue loans (2017: nil).
11 Deferred income
Amount
Balance at the Additions during included in Balance at the
Item beginning of the year the year other income Other changes end of the year
Government grants
- Government grants related to
assets 6,407,437 6,324,630,210 (913,120,098) (973,500) 5,416,944,049
- Government grants related to
income 124,244,690 64,925,367 (82,164,265) - 107,005,792
Total 130,652,127 6,389,555,577 (995,284,363) (973,500) 5,523,949,841
Page 140
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
12 Capital reserve
Other capital
Item Share premiums reserves Total
Balance at the beginning of the
year 37,546,517,053 42,024,540 37,588,541,593
Add: Changes in other equity of
investees - 2,424,598 2,424,598
Closing balance 37,546,517,053 44,449,138 37,590,966,191
13 Other comprehensive income
Movements during the year
Opening balance of Closing balance of
other comprehensive other comprehensive
income income
at the beginning of Before-tax amount Less: Income tax at the beginning of
Item the year during the year expenses the year
Other comprehensive income that will be
reclassified to profit or loss
Including: Gains or losses arising from
changes in fair value of
available-for-sale
financial assets 47,482,822 (20,971,853) (3,145,778) 29,656,747
Share of the other comprehensive income
of the equity-accounted investee that may
be reclassified to profit or loss 144,614,667 (202,778,999) - (58,164,332)
Total 192,097,489 (223,750,852) (3,145,778) (28,507,585)
14 Retained earnings
Item 2018 2017
Retained earnings at the beginning of the
year 1,765,291,136 1,493,363,829
Add: Net profits for the year 2,629,858,350 1,465,006,203
Less: Appropriation for statutory surplus
reserve 262,985,835 146,500,620
Less: Cash dividends declared 1,739,919,938 1,046,578,276
Retained earnings at the end of the year 2,392,243,713 1,765,291,136
Page 141
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
15 Operating income
2018 2017
Rental income of investment properties 180,927,207 148,470,813
Technology development income 3,326,012,588 2,344,168,358
Others 541,409,893 322,922,350
Total 4,048,349,688 2,815,561,521
16 Taxes and surcharges
2018 2017
Property tax 36,681,107 34,628,574
Land use tax 2,864,304 2,864,304
Stamp duty 2,218,487 1,046,438
Urban maintenance and construction tax 706,057 913,638
Education surcharges and local education
343,357 183,462
surcharges
Others 1,316,562 12,900
Total 44,129,874 39,649,316
17 Financial expenses
2018 2017
Interest expenses from loans 1,055,792,484 556,880,963
Interest income from bank deposits (44,583,524) (58,850,619)
Net exchange losses 1,797,658 5,408,147
Other financial expenses 1,414,091 2,441,048
Total 1,014,420,709 505,879,539
18 Other income
2018 2017
Government grants related to assets 913,120,098 9,017,759
Government grants related to income 82,164,265 14,495,697
Total 995,284,363 23,513,456
Page 142
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
19 Investment income
2018 2017
Income from long-term equity investments
accounted for using cost method 936,394,420 949,318,351
Long-term equity investments (loss) / gains under
equity method (12,001,705) 169,034
Investment income from holding available-for-sale
financial assets 3,917,184 792,018
Total 928,309,899 950,279,403
20 Non-operating income and non-operating expenses
(1) Non-operating income by item is as follows:
Amount recognized in
extraordinary gain and
loss
Item 2018 2017 in 2018
Government grants - 771,051 -
Others 4,336,405 2,781,521 4,336,405
Total 4,336,405 3,552,572 4,336,405
(2) Non-operating expenses
Amount recognized in
extraordinary gain
and loss
Item 2018 2017 in 2018
Donations provided 7,830,588 18,004,947 7,830,588
Others 837,822 3,187 837,822
Total 8,668,410 18,008,134 8,668,410
21 Income tax expenses
Note 2018 2017
Current tax expense based on tax law and
regulations 372,322,173 124,006,061
Changes in deferred tax (1) (137,442,585) (110,905,862)
Total 234,879,588 13,100,199
Page 143
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(1) The analysis of changes in deferred tax assets / liabilities is set out below:
2018 2017
Origination and reversal of temporary differences (137,442,585) (110,905,862)
(2) Reconciliation between income tax expense and accounting profit is as follows:
Item 2018 2017
Profit before taxation 2,864,737,938 1,478,106,402
Expected income tax expense at tax rate of 15% 429,710,691 221,715,960
Add: Non-deductible expenses 4,554,071 3,141,493
Non-taxable income (139,246,485) (142,663,108)
Tax deduction for R&D activities (60,138,689) (29,911,193)
Recognized temporary differences of previous
years - (32,857,761)
Changes of deductible temporary differences
unrecognized - (6,325,192)
Income tax expense 234,879,588 13,100,199
Page 144
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
22 Supplementary information on cash flow statement
(1) Supplement to cash flow statement
2018 2017
(a) Reconciliation of net profit to cash flows from
operating activities:
Net profit 2,629,858,350 1,465,006,203
Add: Depreciation of fixed assets and investment
property 125,672,901 106,857,117
Amortisation of intangible assets 112,898,414 109,446,190
Amortisation of long-term deferred expenses 34,008,232 30,511,433
Losses from disposal of fixed assets, intangible assets,
and other long-term assets - 157,430
Finance expenses 1,041,426,618 503,438,491
Investment income (928,309,899) (950,279,403)
increase in deferred tax assets (140,588,363) (110,905,862)
Decrease / (increase) in inventories 3,462,706 (681,982)
Increase in operating receivable items (315,481,253) (549,268,534)
Increase / (decrease) in operating payable items 898,567,740 (4,307,629,184)
Net cash inflow from operating activities 3,461,515,446 (3,703,348,101)
(b) Net changes in cash and cash equivalents:
2018 2017
Cash and cash equivalents at the end of the
year 3,829,814,050 2,990,801,501
Less: Cash and cash equivalents at the
beginning of the year 2,990,801,501 7,548,700,412
Net increase / (decrease) in cash and cash
equivalents 839,012,549 (4,557,898,911)
Page 145
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
(2) Details of cash and cash equivalents
2018 2017
Cash on hand 22,593 22,893
Bank deposits available on demand 3,829,791,457 2,990,778,608
Cash and cash equivalents at the beginning of the
year 3,829,814,050 2,990,801,501
Note: Cash and cash equivalents disclosed above exclude other monetary fund with restricted usage.
23 Assets with restrictive ownership title
As at 31 December 2018, the Company pledged its 20% equity of BOE Energy Investment and 20% equity of
Haosheng Energy as security for the syndicated loans of RMB 633,330,000 and USD 96,000,000 for Yuansheng
Optoelectronics, which will expire on 9 June 2021.
The Company has no other asset with restrictive ownership title.
XV. Extraordinary gains and losses in 2018
2018 2017
Losses from long-term equity investments (3,948,640) -
Losses from disposal of non-current assets (21,684,121) (87,930,698)
Government grants recognized in current profit or loss (except for
government subsidies that are closely related to the normal
business operations of the company and that are in compliance
with national policies and are subject to constant or fixed amount
according to certain standards) 2,073,709,661 962,283,001
Fair value changes in derivative financial liabilities, and income from
available-for-sale financial assets and wealth management products
on maturity 315,279,377 134,810,181
Reversal of provision for bad and doubtful debts assessed on an
individual basis 1,779,710 2,616,024
Other non-operating income and expenses besides items above 63,734,628 46,503,917
Less: Tax effect 328,634,385 126,533,931
Total 2,100,236,230 931,748,494
Including: Extraordinary gains affecting net profit of
equity shareholders of the Company 1,917,425,622 888,471,355
Extraordinary gains affecting net profit of
equity shareholders of the non-
controlling shareholders 182,810,608 43,277,139
Notes: Extraordinary gain and loss item listed above are presented in the amount before taxation.
Page 146
BOE Technology Group Co., Ltd.
Financial statements for the year ended 31 December 2018
XVI. Return on net assets and earnings per share
In accordance with Regulation on the Preparation of Information Disclosures by Companies Issuing Securities No.9 – Calculation
and Disclosure of the Return on Net Assets and Earnings Per Share (2010 revised) issued by the CSRC and relevant accounting
standards, the Group’s return on net assets and earnings per share are calculated as follows:
Weighted average
return on net assets Basic earnings per Diluted earnings per
Profit for the reporting period (%) share share
Net profit attributable to the Company’s ordinary
equity shareholders 4.00% 0.10 0.10
Net profit excluding extraordinary gain and loss
attributable to the Company’s ordinary equity
shareholders 1.77% 0.04 0.04
Page 147
