Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Suzhou Dongshan Precision Manufacturing Co., Ltd.
Annual Report 2021
April 2022
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Section I Important Note, Table of Contents and Definitions
The Board of Directors, the Board of Supervisors, directors, supervisors and senior
management of the Company hereby warrant that the information presented in this Annual
Report is true, accurate and complete and this Annual Report is free from any
misrepresentations, misleading statements or material omissions, and agree to assume joint
and several liabilities for this Annual Report.
YUAN Yonggang, Chairman of the Company, WANG Xu, CFO, and ZHU Deguang, Chief
Accountant hereby represent that the financial statements contained in this Annual Report
are true, accurate and complete.
All directors of the Company attended the Board meeting to review this Annual Report.
The future plans and other forward-looking statements mentioned in this Annual Report do
not constitute a material commitment to any stakeholders, and the realization of them is
subject to material uncertainty due to various factors, including changes in the market and
the efforts of the Company's operating team.
The main risk factors facing the Company are set forth in “Section III – XI. Prospects for
Future Development of the Company” in this Annual Report. Investors are kindly reminded
to pay attention to the relevant investment risks.
According to the profit distribution proposal approved by the Board of Directors, the
Company will distribute a cash dividend of RMB 2.00 (inclusive of tax) per 10 shares to all
shareholders on the basis of 1,705,913,710 shares, while bonus share and share distribution
from capital reserve is nil.
Note：
This document is a translated version of the Chinese version Annual Report 2021(“2021 年年度报
告全文”), and the published Chinese version shall prevail when inconsistency occurs, which can be
obtained at http://www.cninfo.com.cn.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Table of Contents
Section I Important Note, Table of Contents and Definitions ........................................................ 2
Section II Company Profile and Financial Highlights .................................................................... 7
Section III Management’s Discussion and Analysis ...................................................................... 11
Section IV Corporate Governance ................................................................................................. 41
Section V Environmental and Social Responsibility ..................................................................... 61
Section VI Significant Events .......................................................................................................... 66
Section VII Changes in Share Capital and Shareholders ............................................................. 82
Section VIII Preferred Shares ......................................................................................................... 93
Section IX Bonds .............................................................................................................................. 94
Section X Financial Report ............................................................................................................. 95
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
List of References
I. The financial statements signed and chopped by Mr. YUAN Yonggang, legal representative, Mr.
WANG Xu, CFO, and Mr. ZHU Deguang, Chief Accountant of the Company;
II. The original of the auditor’s report stamped with the seal of the accounting firm, and signed
and chopped by the certified public accountants;
III. The originals of all documents publicly disclosed during the reporting period and related
announcements;
IV. The original of the Annual Report 2021 signed by the legal representative of the Company; and
V. Place for inspection of all the above-mentioned documents: Securities Department of the
Company at Buliding 12A, No 99, Taihu East Road, Suzhou, PRC
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Definitions
Term means Definition
The Company, we/our or DSBJ means Suzhou Dongshan Precision Manufacturing Co., Ltd.
one of the Company’s three major business segments, including research
PCB segment means and development (R&D), design, production and sale of flexible PCBs,
rigid PCBs, rigid-flex PCBs and other products.
one of the Company’s three major business segments, including R&D,
Photoelectric display segment means design, production and sale of LED devices, touch panels, liquid crystal
display modules and other products.
one of the Company’s three major business segments, including design,
Precision manufacturing segment means production and sale of precision metal structural components &
assemblies and other products.
Suzhou Yongchuang Metal Science and Technology Co., Ltd., a wholly
YCMT means
owned subsidiary of the Company.
Hong Kong Dongshan Precision Union Opoelectronic Co., Limited, a
Hong Kong Dongshan means
wholly owned subsidiary of the Company.
Dragon Electronix Holdings Inc., a wholly owned subsidiary of Hong
Dragon Holdings means
Kong Dongshan.
Multi-Fineline Electronix, Inc., a wholly owned subsidiary of Dragon
MFLEX means
Holdings.
MFLEX Suzhou means MFLEX Suzhou Co., Ltd., a wholly owned subsidiary of MFLEX.
MFLEX Yancheng means MFLEX Yancheng Co., Ltd., a wholly owned subsidiary of MFLEX.
Hong Kong Dongshan Holding Limited, a wholly owned subsidiary of
Hong Kong Dongshan Holding means
the Company.
Multek Group (Hong Kong) Limited, a wholly owned subsidiary of the
Multek Group means
Company
Multek Industries means Multek Industries Limited, a wholly owned subsidiary of Multek Group.
Multek Electronics means Multek Electronics Limited, a wholly owned subsidiary of Multek Group.
Multek Zhuhai means Multek Zhuhai Limited, a wholly owned subsidiary of Multek Group.
Multek China means Multek China Ltd., a wholly owned subsidiary of Multek Group.
Yancheng Dongshan Precision Manufacturing Co., Ltd., a wholly owned
Yancheng Dongshan means
subsidiary of the Company.
Mutto Optronics Technology Co., Ltd., a wholly owned subsidiary of the
Mutto Optronics means
Company
Suzhou RF Top Electronic Communication Co., Ltd., a controlled
RF Top Electronic means
subsidiary of the Company
Shenzhen Dongshan Precision Manufacturing Co., Ltd., a company
Shenzhen Dongshan means controlled by the controlling shareholder and actual controller of the
Company.
5G means the 5th generation mobile communication technology.
Artificial Intelligence, the simulation of human intelligence using
AI means
computer programs.
Augmented Reality, a technology that combines and integrates the virtual
AR means
world on screen with real world, based on precise calculation of position
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
& angle of camera images and image analysis technology.
Virtual Reality, a computer-simulated 3D virtual world with scenes and
VR means
objects that appear to be real.
Internet of Things, a system of interrelated computing devices,
IoT means mechanical equipment and digital machines, that has a unique identifier
(UID) and is capable to transmit data over the network.
Printed Circuit Board, a finished product with insulated substrates and
conductors as materials, designed and made into printed circuits, printed
PCB means
components or a combination of conductive patterns according to the
pre-designed circuit schematic diagram.
FPC means Flexible Printed Circuit.
Light-emitting diode, a conductor diode that emits incoherent light when
current flows through it, and the recombination of electrons and electron
LED or LED device means holes in the semiconductor produces radiation, for purpose of this Annual
Report, including LED particles, LED light bars, LED backlight modules,
LED lighting devices and other LED products.
sub-millimeter light emitting diode, a LED device with a grain size of
Mini LED means
about 50-200μm.
LCD module or LCD display module, a module formed by assembling
LCD display device with the relevant connectors, drivers and other
LCM means
peripheral circuits, PCB, backlight source, structural components and
other components.
a device under the protection of transparent glass that detects touches
Touch panel means
using sensors and processes, and transmits the relevant information.
AOA means the Articles of Association of the Company
CSRC means the China Securities Regulatory Commission.
SZSC means the Shenzhen Stock Exchange.
Reporting period means the period from January 1, 2021 to December 31, 2021.
RMB and RMB 0’000 means Renminbi and ten thousand Yuan.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Section II Company Profile and Financial Highlights
I. Company Profile
Stock abbreviation DSBJ Stock code 002384
Stock exchange Shenzhen Stock Exchange
Chinese name 苏州东山精密制造股份有限公司
Chinese short name 东山精密
English name (if any) Suzhou Dongshan Precision Manufacturing Co., Ltd.
English short name (if any) DSBJ
Legal representative YUAN Yonggang
Registered address No. 88 Tangdong Road, Wuzhong Economic Development Zone, Suzhou
Postal code of registered address 215124
The Company’s registered address was at Shangwan Village, Dongshan, Wuzhong District,
Suzhou, Jiangsu when the Company were reorganized from Suzhou Dongshan Sheet Metal
History of changes in registered
Co., Ltd. into Suzhou Dongshan Precision Manufacturing Co., Ltd. in 2007, and was
address
changed into No. 88 Tangdong Road, Wuzhong Economic Development Zone, Suzhou on
December 27, 2019.
Office address Buliding 12A, No 99, Taihu East Road, Suzhou, PRC
Postal code of office address 215128
Company website http://www.dsbj.com
Email dsbj@dsbj.com
II. Contact Person and Contact Information
Board Secretary
Name MAO Xiaoyan
Address Buliding 12A, No 99, Taihu East Road, Suzhou, PRC
Telephone 0512-80190019
Facsimile 0512-80190029
Email maoxy@dsbj.com
III. Media for Information Disclosure and Place for Keeping the Annual Report
Website of the stock exchange
disclosing the Company’s annual Securities Times, China Securities Journal, Shanghai Securities News and Securities Daily
report
Media and website disclosing the
http://www.cninfo.com.cn
Company’s annual report
Place for keeping the Company’s
Securities Department of the Company
annual report
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
IV. Changes in Registration Particulars
Organization code 91320500703719732P
Since the I.P.O., the Company’s business operations have strategically included PCB segment,
Changes in main business photoelectric display segment and other electronic business. The Company focuses on the
activities since the listing of the R&D and manufacturing of technologically advanced core components for the smartly
Company (if any) interconnected world, and the offering of comprehensive smart interconnection solutions to
customers throughout the world.
Changes in controlling None
shareholders (if any)
V. Other Related Information
Accounting firm engaged by the Company:
Name of accounting firm Pan-China Certified Public Accountants LLP
31/F, Block B, China Resources Building, No. 1366 Qianjiang Road, Jianggan
Office address of accounting firm
District, Hangzhou, Zhejiang
Name of accountants signing this report SUN Tao and HUANG Zhenshuang
Sponsor engaged by the Company to perform the duties of continuous supervision over the Company during the reporting period:
√Applicable □ N/A
Period of continuous
Name Office address Sponsor’s representatives
supervision
TF Securities Co., Block 2, TF Plaza, No. 217 Zhongbei Road, HE Zhaodan and ZHANG From August 6, 2020 to
Ltd. Wuchang District, Wuhan, Hubei Xingwang December 31, 2021
Financial advisor engaged by the Company to perform the duties of continuous supervision over the Company during the reporting
period:
□ Applicable √ N/A
VI. Key Accounting Data and Financial Indicators
Whether the Company need to retrospectively adjust or restate any accounting data of previous fiscal years?
□ Yes √ No
2021 2020 Y/Y % change 2019
Operating revenue (RMB) 31,793,147,908.12 28,093,409,430.26 13.17% 23,552,825,103.23
Net profit attributable to shareholders
1,862,481,138.84 1,530,132,196.09 21.72% 702,656,380.67
of the listed company (RMB)
Net profit attributable to shareholders
of the listed company excluding 1,576,650,669.18 1,301,219,335.83 21.17% 418,778,063.97
non-recurring gains and losses (RMB)
Net cash flows from operating
3,209,544,484.21 2,932,168,894.65 9.46% 2,651,461,601.10
activities (RMB)
Basic earnings per share (RMB/share) 1.09 0.93 17.20% 0.44
Diluted earnings per share
1.09 0.93 17.20% 0.44
(RMB/share)
Weighted average ROE 13.46% 14.41% -0.95% 8.25%
December 31, 2021 December 31, 2020 Y/Y % change December 31, 2019
Total assets (RMB) 37,951,408,787.25 37,503,068,713.54 1.20% 31,670,271,635.86
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Net assets attributable to shareholders
14,576,500,325.15 13,068,916,872.79 11.54% 8,646,124,544.20
of the listed company (RMB)
Whether the lower of the net profit before and after deduction of non-recurring gains and losses in the past three accounting years has
been negative, and the most recent annual auditor’s report indicates that the Company’s ability to continue as a going concern is
uncertain?
□ Yes √ No
Whether the lower of the net profit before and after deduction of non-recurring gains and losses is negative?
□ Yes √ No
VII. Differences in Accounting Data under China Accounting Standards for Business
Enterprises (CASBEs) and Overseas Accounting Standards
1. Differences in net profit and in net assets disclosed in the financial statements during the reporting period
prepared under CASBEs and International Financial Reporting Standards (IFRS)
□ Applicable √ N/A
There was no difference in net profit and in net assets disclosed in the financial statements during the reporting period, which
prepared under CASBEs and International Financial Reporting Standards (IFRS)
2. Differences in net profit and in net assets disclosed in the financial statements during the reporting period
prepared under CASBEs and overseas accounting standards
□ Applicable √ N/A
There was no difference in net profit and in net assets disclosed in the financial statements during the reporting period, which
prepared under CASBEs and overseas accounting standards.
VIII. Key Financial Indicators by Quarter
Unit: RMB
First quarter Second quarter Third quarter Fourth quarter
Operating revenue 7,508,277,291.61 6,496,895,027.89 7,802,005,689.02 9,985,969,899.60
Net profit attributable to shareholders of the
245,090,642.75 359,561,445.63 593,397,856.04 664,431,194.42
listed company
Net profit attributable to shareholders of the
listed company excluding non-recurring 209,686,552.99 320,979,638.44 509,182,981.57 536,801,496.18
gains and losses
Net cash flows from operating activities 146,830,386.84 807,682,971.19 238,084,288.21 2,016,946,837.97
Whether there’s any material difference between the financial indicators or aggregate amounts thereof set out above, and the
corresponding financial indicators set out in any quarter report or semi-annual report of the Company which already disclosed?
□ Yes √ No
IX. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ N/A
Unit: RMB
Items 2021 2020 2019
Gains or losses on disposal of non-current assets (including the
13,783,433.93 18,548,846.52 8,002,622.39
write-off for the impairment provision of assets)
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Government grants included in profits or losses (excluding government
grants that are closely related to the business of the Company and are
268,965,326.25 208,864,058.42 309,693,674.86
provided based on standard quota or quantitative continuous
application according to the state industrial policy)
Fund occupation fee received from non-financial entities that was
19,777,467.66 25,555,038.76 9,326,161.55
recorded in profits or losses
Gains or losses on assets under entrusted investment or management 11,913,618.63 10,718,494.92 4,075,701.37
Gains or losses on changes in fair value of financial assets held for
trading and financial liabilities held for trading, and gains on disposal
of financial assets held for trading, financial liabilities held for trading 17,766,609.82 12,906,432.35 -15,244,514.54
and available-for-sale financial assets, except for effective hedges held
in the ordinary course of business
Reversal of impairment losses on accounts receivable tested for
22,451,468.46 19,035,541.70
impairment individually
Other non-operating revenue and expenses -1,909,316.59 -1,135,781.75 -931,352.59
Other gains or losses within the meaning of non-recurring gains and
722,866.99 -4,668,613.96
losses
Less: Impact of income tax 65,906,713.13 46,295,962.38 46,447,862.64
Impact of non-controlling interest (exclusive of tax) 1,734,292.36 248,266.58 -1,036,958.56
Total 285,830,469.66 228,912,860.26 283,878,316.70
There is no other item of gains or losses within the meaning of non-recurring gains or losses.
There is no situation that any item of non-recurring gains or losses defined by the Explanatory Announcement No. 1 on Information
Disclosure for Companies Publicly Offering Securities – Non-recurring Gains or Losses classified as recurrent profit or loss during
the reporting period.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Section III Management’s Discussion and Analysis
I. Industry Overview and Outlook for the Reporting Period
During the reporting period, the industry in which we operate has not undergone any material change as compared with
the preceding year.
PCB segment: According to the latest report issued by Prismark, the PCB industry is expected to grow by 5.2% in 2022,
and the total output value of the global PCB industry will exceed USD 100 billion by 2026. The vigorous development
of 5G, AI, Cloud, consumer electronics, new energy and other industries will continuously drive the rapid growth of the
PCB industry. According to Prismark, we were ranked the world’s third largest PCB manufacturer in terms of operating
revenue in 2021. In reliance on our strength in R&D, production engineering, quality control, delivery and other aspects,
we are able to provide high-quality products and services to our customers.
Photoelectric display segment: (1) Touch panel products: Along with the rapid development of AI, Big Data and other
new technologies, touch panel products are applied in more and more fields, the market size is increasing continuously,
the adoption of touch panels in laptops is increasing steadily, and more and more touch panels are used on smart home
and smart automotive products to realize human-machine interaction. (2) LED devices: Small-pitch LEDs are
characterized by high definition, high brightness, high fidelity, long life and seamless image, and suit different
application scenarios. Due to their remarkable advantages, small-pitch LEDs come into favor of the professional display
and commercial market and their market penetration has been increasing continuously. In the future, after the products
show their cost advantages, they are expected to enter the broader commercial market. In the field of photoelectric
display, we are a well-known manufacturer of touch panel modules and LED display devices.
Precision manufacturing segment: Our products in the field of precision manufacturing, including base station
antennas, filters and other structural components and assemblies for mobile communication, functional and structural
components for new energy vehicles, etc., are mainly applied in communication, new energy and other fields. As a
global communication technology standard, 5G stands at a critical period of development of technical standards and
commercialization. The prospects for the 5G related industry are extensive in the long run. As a well-known supplier of
communication equipment and assemblies in the world, we will firmly grasp this opportunity for development. Along
with the vigorous development of the new energy vehicle industry, the vehicles tend to be lighter, resulting in an
increase in the adoption of aluminum products on new energy vehicles. We provide light aluminum functional and
structural components and other products to major carmakers. In the future, our advantages in the coverage of multiple
industry chains and provision of integrated solutions will help us improve customer adhesion.
II. Main Business Overview during the Reporting Period
During the reporting period, the main business conducted by us has not undergone any material changes.
We are committed to growing into a supplier of core components for the smartly interconnected world. Our business
operations are divided into three main segments: PCB, photoelectric display, and precision manufacturing. Our products
are widely applied in consumer electronics, communication equipment, new energy vehicle, industrial equipment, AI,
medical appliances and other fields.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
In the field of PCB, we are committed to providing industry-leading customers with comprehensive PCB products and
services, and integrated solutions covering design, R&D and manufacturing of PCB products that are customized to suit
different downstream end products. Our products are widely applied on mobile phones, computers, AR/VR devices,
wearable devices, servers, communication equipment, new energy vehicles, industrial control equipment, etc.
In the field of photoelectric display, we are a well-known manufacturer of touch panel modules and LED display
devices. Our touch panel products are mainly used on medium- and large-sized displays for laptops, tablets, smart home
devices, on-board displays, etc.; LCM products are mainly used on medium- and small-sized displays for mobile phones,
tablets, etc.; and LED products are widely used on outdoor and indoor small-pitch HD displays. In addition, we have
successfully launched our new Mini LED backlight products on the market, and are actively developing customers for
such products.
In the field of precision manufacturing, we mainly provide precision metal structural components and assemblies for
customers engaged in the business of communication equipment, consumer electronics and new energy vehicles, etc.,
including base station antennas, filters and other structural components and assemblies for mobile communication,
functional and structural components for new energy vehicles, etc.
III. Core Competencies of DSBJ
1. Advantage in products: wide range of products and integrated industry chain
In recent years, we have continuously improved our industrial and product mix through acquisitions and internal
development, broken development bottlenecks, and introduced superior businesses to build up new growth drivers. At
present, our product offerings cover three business segments, namely PCB, photoelectric display and precision
manufacturing. We are able to provide customers with a variety of basic and core components for smart interconnection.
In the field of PCB and small-pitch LED devices, we have grown into a leading company in the industry. We actively
give full play to the synergistic effect of all business segments in R&D, technology, supply chain, products, marketing
and other areas, through integration of internal resources and coordinated development, gradually achieve the synergy
advantage of vertically integrated industry chain, and strive to provide comprehensive, one-stop and technologically
advanced integrated product solutions to customers in the field of smart interconnection, and satisfy the customization
requirements of customers to the maximum extent.
2. Advantage in customers: high-quality domestic and foreign customer base
We have a mature global sales service system, industry-leading technical capabilities and advanced production
capabilities, and our products are popular with top customers in different areas throughout the world and have a
high-quality customer base. The remarkable platform superiority of our customers helps us maintain high profitability,
reduce credit risks and continuously expand the scope of cooperation with them. In addition, the high-quality customer
base has a good demonstration effect, and will help us further enhance our popularity and capability to develop new
customers, and acquire larger market shares in the future competition. Our customers come from consumer electronics,
communication equipment, industrial equipment, automotive and other industries. Such diversified customer base
enables us to fend off the impact of the seasonal and cyclical fluctuations of different industries, and helps us
accumulate experience of cooperation with customers from different industries and improve our core competencies
while maintaining stable growth of business.
3. Advantage in technology: stick to the principle that technological innovation capability is the primary
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
production factor
We attach great importance to technological innovation in our business development, and drive our development
through innovation. Through continuous R&D investments, we now own hundreds of patents and licenses, and have
built complete open R&D system and efficient R&D mechanisms, and a global R&D team with outstanding
professional level, rich industrial experience and strong innovation capabilities. Through continuous investments in
R&D of new materials, new technologies and new production processes, we have continuously explored frontier
production technologies for core components in the field of smart interconnection, and laid a solid foundation for
serving emerging businesses, such as AR/VR, IoT, Mini LED and new energy vehicles. While improving product
technologies, we attach great importance to the innovation and upgrading of production technologies, and have gained
some effect in integrated development of informatization and industrialization. By promoting integrated development of
informatization and industrialization, we have vigorously implemented intelligent manufacturing and built intelligent
factories.
4. Advantage in scale: promote development in reliance on advantage in scale and increase benefits based on
synergistic effect
Our customers are well-known domestic and international hi-tech companies who have high purchase quantities, set
strict requirements for delivery of products, and have high requirements for the scale of production and production
efficiency of suppliers. Through years of development and accumulation, we have grown into a supplier of core
components for smart interconnection with relatively strong overall capabilities in China. Our large scale of production
can satisfy the purchase demands of major downstream customers, creating a big advantage in scale. Our advantage in
scale provides us with strong bargaining power in the purchase of raw materials, resulting in reduction of the unit
production cost. On the other hand, through effective integration of internal resources, we can reduce operating costs,
thereby increasing our superiority over our competitors, further consolidating and enhancing our position in the industry,
and improving our core competencies.
5. Advantage in management: advanced concept, complete system and efficient execution
We advocate the corporate spirit of “openness, inclusion and pragmatism”, stick to the management principle of
“delegation of powers in business operation, support by the platform and centralized supervision”, give full play to the
initiative and creativity of grass-roots organizations, and have built a scientific and efficient management system. Our
management team owns practical experience in the management of advanced manufacturing industry, has wide global
visions, is able to make accurate strategic judgments and decisions on the trends of industry and opportunities for
development, and has strong cohesion and executive ability. We are practical and keep forging ahead in day-to-day
management and operation, make periodic benchmarking analysis to compare our performance against historic data,
budget targets and the results of outstanding peers, and effectively improve our operational quality and efficiency by
setting examples and objectives, identifying the breakthrough point, focusing on implementation and reviewing what
has been done, to lay a solid foundation for our sustained high-quality development.
6. Advantage in internationalization: promoting the establishment of a “dual circulation” development pattern
We closely follow the national development strategy, actively take part in global economic competitions, and
continuously enhance integration of high-quality resources of the industry. After completing two overseas acquisitions
in 2016 and 2018 respectively, we have successfully entered the PCB industry that has broader prospects for
development, optimized our business structure, and laid a solid foundation for our high-quality development. We have
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
realized growth in both scale of operation and operating results through such lead-forward development. In 2019, we
established our overseas headquarters and operating entities with different functions in North America, Europe,
Southeast Asia and other countries and regions, in order to further improve our global operating capabilities, promote
the establishment of a “dual circulation” development pattern, and actively cope with the complicated competition
environment.
IV. Analysis of Main Business
1. Overview
During the reporting period, we faced lots of challenges, such as the complicated global economic situation, repeated
outbreaks of COVID-19, continuous rise of the prices of staple commodities, continuous appreciation of Renminbi,
periodic shortage of energy and great shock on the global supply chain. However, we acted with one mind, coped with
challenges calmly and prioritized stability while pursuing progress. We adopted more moderate business strategies,
actively promoted integrated development of informatization and industrialization, and improved our technical
capabilities to continuously provide our customers throughout the world with technologically advanced products and
services; optimized out organization structure, strictly controlled unnecessary capital expenditures, and enhanced budget
management, so that our financial position and cash flows have been continuously improved and optimized.
In 2021, our main financial performance grew stably: our operating revenue totaled RMB 31.793 billion, an increase of
13.17% year on year; net profit attributable to shareholders of the listed company was RMB 1.862 billion, an increase
of 21.72% year on year; net profit attributable to shareholders of the listed company after deduction of non-recurring
gains or losses was RMB 1.577 billion, an increase of 21.17% year on year; net cash flows from operating activities was
RMB 3.210 billion, an increase of 9.46% year on year; and as of the end of the reporting period, equity-debt ratio was
61.34%, a decrease of 3.53% year on year.
In 2021, we and our subsidiaries were granted with many special honors, including “China ESG Golden Award 2021”,
“2021 Model Enterprise for Industrial Internet Development of Jiangsu”, and “Specialized, Refinement, Characteristic
and Novelty Little Giant Enterprise”, among others.
Below is a brief description of the main activities conducted by us in 2021:
(1) The PCB business grew stably and our overall competencies were improved rapidly
We center on the requirements of customers, continuously increase R&D investments, and strive to improve our core
competencies. During the reporting period, our PCB business realized continued growth of operating revenue and
attained good operating results. While maintaining in-depth cooperation with key customers, MFLEX actively
developed AR/VR, new energy vehicle and other new businesses, gave full play to its advantages in customer response,
product R&D and internal operation, and realized stable growth of main operating results. Multek made active efforts to
mitigate the adverse effect caused by periodic power rationing, price rise of raw materials and other factors, and made
great breakthroughs in its operating results by integrating resources, improving management capabilities and bringing
all internal potentialities into full play.
(2) Take full advantage of industry chain and synergistic effect, and actively promote innovation and development
We always give priority to development. We have made correct assessments of the situation, and responses and
arrangements taking into account of our capabilities and position on the market, and further defined our new “three-year
development plan” from the strategic perspective; made full use of our brand, capabilities and advantages in the field of
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
PCB and precision manufacturing and actively cooperated with customers from the new energy vehicle industry in
developing solutions. During the reporting period, our operating revenue from the new energy vehicle business
increased by 120% as compared with the preceding year. In addition, we have enhanced R&D efforts, closely grasped
the new opportunities brought about by the technology innovation and growth of market size of the industry, and
accelerated forward-looking deployments. Our headquarters also established the new energy strategy department, in
order to actively seek the application and breakthroughs of our products in electrification, intelligentization or otherwise
in respect of new energy vehicles, develop new customers of the industry, and build up new growth drivers.
(3) Adjust and optimize our compensation policies and system and enhance the training of personnel
As our professional and international management structure and corporate strategies have mounted a new step, we need
to continuously improve and make breakthroughs in our compensation policy and system, and augment our
management and technical staff. During the reporting period, we implemented our 2021 employee stock ownership plan
and repurchased certain shares, which would be available under our share incentive and employee stock ownership
plans. In the future, we will actively explore the establishment of a more competitive compensation system, strive to
enhance the sense of gain and arouse the enthusiasm of the employees, and maximize the value of the Company. In
addition, we have established the medium-to-long term talent training plan, in order to promote our future development.
(4) Continue to promote integration of informatization and industrialization and improve management efficiency
We focus on the development of intelligent manufacturing, and an advanced production model; actively use modern
information technologies, give full play to our advantages, build smart factories, and promote high integration of
informatization and industrialization, and the application of big data, AI, cloud platform and IoT technologies in our
management and operation, and digitalization of management and operation, to drive development with technology.
During the reporting period, we completed the smart transmission system of the die bond workshop of Yancheng
Dongshan, automatic and smart workshop of MFLEX Yancheng, financial RPA document review system and other
projects, which effectively improved our management efficiency. In addition, we and our subsidiaries have been granted
many provincial and municipal-level honors due to our excellent achievements in the integration of informatization and
industrialization.
(5) Stick to the strategy of prudent operations, and promote our high-quality development
During the reporting period, we stuck to the strategy of prudent operations, strictly controlled capital expenditures, and
continuously adjusted and optimized capital structure and debt structure. The benchmarking, cost reduction and
efficiency improvement and other activities conducted by us previously effectively promoted the improvement of our
operating performance in 2021. In particular, the operating performance indicators of our LED segment have reached
the advanced level of the industry. In view of the high proportion of our foreign currency assets and the impact of the
prices of maple commodities on material costs, our finance department, in conjunction with the business departments,
flexibly used hedging instruments to mitigate the adverse effect brought about by the fluctuations in foreign exchange
rates and prices of maple commodities, and avoid the risk of market fluctuations. In the future, we will adopt more
moderate and prudent financial strategies, strive to improve asset turnovers, and promote our high-quality development.
2. Revenue and cost
(1) Components of operating revenue
Unit: RMB
2021 2020 Y/Y %
15
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
% of operating % of operating change
Amount Amount
revenue revenue
Total operating revenue 31,793,147,908.12 100% 28,093,409,430.26 100% 13.17%
By segment
Computer, communication
and other electronic 31,682,727,248.03 99.65% 28,017,895,740.11 99.73% 13.08%
components
Others 110,420,660.09 0.35% 75,513,690.15 0.27% 46.23%
By product
PCBs 20,495,329,957.29 64.46% 18,771,308,897.12 66.82% 9.18%
Touch panels and LCMs 5,156,396,939.04 16.22% 4,090,095,126.44 14.56% 26.07%
LED display devices 2,603,932,687.66 8.19% 2,162,663,506.28 7.70% 20.40%
Precision components 3,427,067,664.04 10.78% 2,993,828,210.27 10.66% 14.47%
Others 110,420,660.09 0.35% 75,513,690.15 0.27% 13.08%
By region
Domestic market 6,798,743,063.07 21.38% 7,617,683,512.66 27.12% -10.75%
Overseas market 24,994,404,845.05 78.62% 20,475,725,917.60 72.88% 22.07%
By sales model
Direct sales 31,793,147,908.12 100.00% 28,093,409,430.26 100.00% 13.17%
(2) Segments, products, regions or sales models representing more than 10% of operating revenue or profit
√ Applicable □ N/A
Unit: RMB
Y/Y % Y/Y % Y/Y %
Gross change in change in change
Operating revenue Operating cost
margin operating operating in gross
revenue cost margin
By industry
Computer, communication and
31,682,727,248.03 27,080,576,091.48 14.53% 13.08% 14.51% -1.06%
other electronic components
By product
PCBs 20,495,329,957.29 17,319,465,575.78 15.50% 9.18% 10.48% -0.99%
Touch panels and LCMs 5,156,396,939.04 4,735,719,298.33 8.16% 26.07% 31.68% -3.91%
LED display devices 2,603,932,687.66 2,127,082,704.10 18.31% 20.40% 14.79% 4.00%
Precision components 3,427,067,664.04 2,898,308,513.27 15.43% 14.47% 14.86% -0.29%
By region
Domestic market 6,798,743,063.07 5,888,391,366.92 13.39% -10.75% -9.51% -1.19%
Overseas market 24,994,404,845.05 21,240,159,261.01 15.02% 22.07% 23.68% -1.11%
By sales model
Direct sales 31,793,147,908.12 27,128,550,627.93 14.67% 13.17% 14.56% -1.04%
In case of any adjustment to the statistic scale for main business data, the main business data of the most recent reporting period as
adjusted according to the statistic scale applied at the end of the current reporting period:
□ Applicable √ N/A
16
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
(3) Whether the Company’s revenue from sale of tangible goods is higher than the revenue from labor service?
√ Yes □ No
Segment Items Unit 2021 2020 Y/Y % change
2
Sales volume m 3,331,653.39 3,010,306.6 10.67%
2
PCBs Output m 3,312,615.14 3,055,122.93 8.43%
Inventories m2 137,265.92 156,304.17 -12.18%
Sales volume PC 21,628,005 18,667,902 15.86%
Touch panels and LCMs Output PC 22,321,638 19,769,074 12.91%
Inventories PC 3,886,955 3,193,322 21.72%
Sales volume PC 208,056,642,319 135,284,812,074 53.79%
LED display devices Output PC 216,650,785,694 141,610,493,380 52.99%
Inventories PC 31,809,179,557 23,215,036,182 37.02%
Sales volume PC 65,150,504 58,146,074 12.05%
Precision components Output PC 66,107,258 58,733,074 12.56%
Inventories PC 12,082,070 11,125,316 8.60%
Analysis of changes in the relevant data over 30% year on year:
√ Applicable □ N/A
The sales volume and output of LED display devices increased by 53.79% and 52.99% respectively, primarily due to the utilization
of the production capacity of our Yancheng production base.
(4) Performance of material sales contracts and material purchase contracts by the Company as of the end of
the reporting period
□ Applicable √ N/A
(5) Components of operating cost
Classification of products:
Unit: RMB
2021 2020
Y/Y %
Items % of operating % of operating
Amount Amount change
revenue revenue
Computer, Direct material
20,105,035,098.47 74.11% 17,173,719,408.59 72.52% 17.07%
communication costs
and other Direct labor costs 2,073,617,167.68 7.64% 1,824,434,978.54 7.70% 13.66%
electronic
components Manufacturing
4,949,898,361.78 18.25% 4,682,137,122.64 19.77% 5.72%
and other costs
(6) Changes in the scope of consolidation during the reporting period
√ Yes □ No
Subsidiaries newly included in the scope of consolidation:
17
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Method of acquisition of Date of acquisition of
Company name
shares shares
Suzhou Dongchen Intelligent Equipment Manufacturing Co., Ltd. Investment November 30, 2021
Shanghai Dongxin New Energy Technology Co., Ltd. Investment August 27, 2021
Shanghai Donglan New Energy Technology Co., Ltd. Investment November 1, 2021
Hainan Chengjia Technology Consulting Co., Ltd. Investment May 14, 2021
Subsidiaries removed from the scope of consolidation:
Date of disposal of
Company name Method of disposal of shares
shares
Chongqing Chengjia Precision Electronic Technology Co., Ltd. Deregistration January 29, 2021
Dongguan Xindong Intelligent Technology Co., Ltd. [Note] Loss of control August 31, 2021
DSBJ FINLAND OY Deregistration December 31, 2021
Suzhou Dongshan Precision Technology Co., Ltd. Deregistration November 16, 2021
Note: Dongguan Xindong Intelligent Technology Co., Ltd. has entered the bankruptcy and liquidation proceedings and we have lost
control over it. It is a small subsidiary of Dongguan Dongshan Precision Manufacturing Co., Ltd., and its disposal will not affect our
operating results.
(7) Material changes or adjustments in respect of business, products or services of the Company during the
reporting period
□ Applicable √ N/A
(8) Major customers and suppliers
Major customers of the Company:
Aggregate sales revenue from top 5 customers (RMB) 19,932,554,623.75
Proportion of aggregate sales revenue from top 5 customers to annual sales revenue 62.69%
Proportion of aggregate sales revenue from related parties among top 5 customers to annual sales revenue 0.00%
Particulars of top 5 customers:
No. Name of customer Sales revenue (RMB) % of annual sales revenue
1 Customer 1 14,148,014,353.45 44.50%
2 Customer 2 2,838,222,234.37 8.93%
3 Customer 3 1,495,655,942.16 4.70%
4 Customer 4 911,012,633.29 2.87%
5 Customer 5 539,649,460.47 1.70%
Total -- 19,932,554,623.75 62.69%
Other information of major customers:
□ Applicable √ N/A
Major suppliers of the Company:
Aggregate purchase amount from top 5 suppliers (RMB) 6,378,907,211.14
18
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Proportion of aggregate purchase amount from top 5 suppliers to annual purchase cost 29.68%
Proportion of aggregate purchase amount from related parties among top 5 suppliers to annual purchase cost 0.00%
Particulars of top 5 customers:
No. Name of supplier Purchase amount (RMB) % of annual purchase cost
1 Supplier 1 2,426,861,042.69 11.29%
2 Supplier 2 1,525,225,415.40 7.10%
3 Supplier 3 1,133,848,116.04 5.28%
4 Supplier 4 698,807,986.48 3.25%
5 Supplier 5 594,164,650.53 2.76%
Total -- 6,378,907,211.14 29.68%
Other information of major suppliers:
□ Applicable √ N/A
3. Expenses
Unit: RMB
2021 2020 Y/Y % change Reason of material changes
Primarily due to the reconciliation of
Selling
341,087,646.41 329,180,346.50 3.62% transportation-out cost of about RMB 190 million to
expenses
operating costs for the reporting period
Administrative
781,664,730.36 686,479,003.08 13.87%
expenses
During the reporting period, our financial strategy of
reducing leverage and adjusting structure produced a
Financial marked effect, as a result of which our overall capital
436,663,673.90 630,110,578.97 -30.70%
expenses costs further decreased; on the other hand, we reduced
certain foreign exchange risk through effective
hedging transactions.
R&D expenses 1,028,567,206.95 910,253,381.44 13.00%
19
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
4. R&D investments
√ Applicable □ N/A
Expected effect on the future
Description of major R&D project Purpose Progress Objectives
development of Company
To improve the technology and market To develop the production process for full LCP The technology and market
Development of full LCP
competitiveness of the relevant In progress multi-layer flexible PCBs and provide better competitiveness of the relevant
multi-layer flexible PCBs
products. signal transmission performance. products will be improved.
To research the new-type PECVD waterproof
To improve the technology and market The technology and market
Research of the new-type flexible technology, and improve the waterproof and
competitiveness of the relevant Completed competitiveness of the relevant
PCB protection technology environmental resistant performance of flexible
products. products will be improved.
PCBs.
To improve the production efficiency and
Development of the production To improve the technology and market The technology and market
automation level of the production process,
technology of roll to roll competitiveness of the relevant Completed competitiveness of the relevant
shorten the production cycle and increase the yield
multi-layer flexible PCBs products. products will be improved.
rate of the relevant products.
Development of the application of To improve the performance and To optimize the material selection and technology, The performance and market
bending resistant high-frequency market competitiveness of the relevant Completed and lengthen the bending life, to satisfy the competitiveness of the relevant
electromagnetic shielding films products. requirements of the relevant electronic products. products will be improved.
Development of press-fit To reduce carbon emission and To improve the efficiency and reduce energy The technology and market
technology for flexible PCB improve the market competitiveness In progress consumption of the production process of the competitiveness of the relevant
coverlay films of the relevant products. relevant products. products will be improved.
Development of the new-type To reduce carbon emission and The technology and market
To improve the efficiency of press-fit process for
press-fit technology for super improve the market competitiveness In progress competitiveness of the relevant
multi-layer boards and coverlay films.
efficient flexible PCBs of the relevant products. products will be improved.
Development of the application of To improve the technology and market To realize the application of photo-imageable The technology and market
the new-type photo-imageable competitiveness of the relevant Completed coverlay film, optimize the production technology competitiveness of the relevant
coverlay film on flexible PCBs products. and realize industrialization of the technology. products will be improved.
To improve the technology and market The technology and market
Development of the biometric To develop the fingerprint identification product
competitiveness of the relevant Completed competitiveness of the relevant
product for flexible PCBs using mSAP technology.
products. products will be improved.
Development of the multi-layer To improve the technology and market The technology and market
To develop micro-coils of voice coil motors for
circuit board for coils of voice coil competitiveness of the relevant Completed competitiveness of the relevant
consumer electronic cameras.
motors products. products will be improved.
20
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Research of the wettability
To improve the technology and market The technology and market
technology for electroless To research the influence mechanism of wettablity,
competitiveness of the relevant Completed competitiveness of the relevant
nickel/immersion gold and improve soldering quality.
products. products will be improved.
surface-treated surface pads
The technology and market
Development of the laser To introduce new precision soldering To innovate in the method of soldering, and
competitiveness of the relevant
soldering technology for technology, and improve product In progress improve the efficiency of soldering, and level of
on-vehicle products will be
automotive PCBs quality. automation.
improved.
Development of the laser To improve the market To shorten the process and improve the precision The technology and market
hole-opening technology for competitiveness of the relevant In progress of coverlay film hole-opening, and realize competitiveness of the relevant
flexible PCB coverlay films products. automation of the process. products will be improved.
Industrialization of the To realize the industrialization of the
To improve the technology and market The technology and market
high-frequency and high-speed high-frequency and high-speed products, and
competitiveness of the relevant Completed competitiveness of the relevant
signal simulation and testing standardization of the high-frequency and
products. products will be improved.
technology high-speed simulation and testing technology.
To optimize the product design, material selection
Research of the long-life dynamic To improve the technology and market and stacking, increase the dynamic bending life to The technology and market
bending technology for foldable competitiveness of the relevant Completed more than 400,000 times, and satisfy the competitiveness of the relevant
devices products. requirements of mass production of foldable products will be improved.
mobile phones.
Industrialization of the To improve the technology and market To develop the electroplating simulation process The technology and market
electroplating simulation competitiveness of the relevant Completed and improve the capacity of the electroplating competitiveness of the relevant
technology products. process. products will be improved.
To develop the simulation and precise testing
Development of the on-board To improve the technology and market The technology and market
methods for circuit temperature rise, fuse burn-out
battery panel temperature rise competitiveness of the relevant Completed competitiveness of the relevant
and other electro-thermal coupling of on-board
simulation and testing technology products. products will be improved.
battery panels.
To carry out board-level fracture simulation
Development of the fracture To improve the performance and The performance and market
research, optimize preliminary product design and
simulation and analysis market competitiveness of the relevant Completed competitiveness of the relevant
setting of process parameters, and predict and
technology products. products will be improved.
avoid mechanic failure of the relevant products.
Development of the pressure To improve the performance and To realize the use of flexible PCB production The performance and market
sensing technology for flexible market competitiveness of the relevant Completed technology and materials with special functions, competitiveness of the relevant
PCB coverlay films products. and pressure sensing function. products will be improved.
Development of multiple cutting To improve the technology and market Completed To realize cutting of multi-layer boards with The technology and market
21
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
methods for multi-layer flexible competitiveness of the relevant different thickness. competitiveness of the relevant
PCBs products. products will be improved.
Development of the application of
To improve the technology and market The technology and market
graphene glue and semiconductor To realize the control of heating temperature using
competitiveness of the relevant In progress competitiveness of the relevant
ceramic substrate on flexible flexible PCBs.
products. products will be improved.
PCBs
Development of the single SMT To improve the engineering and To realize the diversification of assembly The engineering and market
In progress
assembly technology market competitiveness. technologies. competitiveness will be improved.
Research of recycling of metal To improve the engineering and To reduce carbon emission, protect the The engineering and market
Completed
materials market competitiveness. environment and recycle the resources. competitiveness will be improved.
Development of the bending
testing technology for full To improve the engineering and To make the back-end assembly process The engineering and market
Completed
automatic electric testing of market competitiveness. unmanned and intelligent. competitiveness will be improved.
flexible PCBs
Research of the assembly To realize the diversification of assembly
To improve the engineering and The engineering and market
technology for ultra-micro Completed technologies, and application of fine pitch
market competitiveness. competitiveness will be improved.
components components.
R&D of the real-time pressure To improve the engineering and To realize the digitalization of hot pressing The engineering and market
Completed
sensing monitoring technology market competitiveness. parameters. competitiveness will be improved.
Automation of design assistant To improve the engineering To realize the integration of design automation and The engineering and market
Completed
software competitiveness. informatization. competitiveness will be improved.
To improve the technology and market To provide the customers with a heat dissipation The technology and market
Development of the thermally
competitiveness of the relevant Completed solution in lieu of small copper billet, and improve competitiveness of the relevant
conductive copper grease process
products. the production efficiency. products will be improved.
Development of the conductive To improve the technology and market The technology and market
To use copper grease to connect two or more
copper grease process and competitiveness of the relevant In progress competitiveness of the relevant
sub-PCBs.
technology products. products will be improved.
Development of the electrolytic To provide the customers with a solution to realize
To improve the technology and market The technology and market
nickel/gold + electroless nickel different surface treatment of two sides of PCBs,
competitiveness of the relevant Completed competitiveness of the relevant
electroless palladium immersion and reduce contamination of palladium and gold
products. products will be improved.
gold process cylinders.
Research of the signal insertion To improve the technology and market To satisfy the customers’ signal requirements and The technology and market
loss performance of different types competitiveness of the relevant Completed provide the customers with optimal stacking competitiveness of the relevant
of copper foils products. design. products will be improved.
22
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Development of the technology to
To improve the technology and market To control stubs on pit walls, reduce power loss, The technology and market
control the length of electroplated
competitiveness of the relevant Completed simplify the production process, and greatly lower competitiveness of the relevant
stubs on the pit walls of high
products. costs. products will be improved.
frequency PCBs
To improve the technology and market The technology and market
Development of the buried To satisfy the integration, anti-interference and
competitiveness of the relevant In progress competitiveness of the relevant
resistance process other requirements of devices.
products. products will be improved.
To improve the technology and market The technology and market
Development of the semi-flex To produce PCBs bendable and adjustable from
competitiveness of the relevant Completed competitiveness of the relevant
PCB technology four directions.
products. products will be improved.
Development of the micro copper To improve the technology and market The technology and market
To develop the copper inlay technology that
inlay technology for competitiveness of the relevant Completed competitiveness of the relevant
permits boring and interconnection at any layer.
optoelectronic modules products. products will be improved.
To improve the technology and market To use femtosecond green light to cut PI flexible The technology and market
Development of the femtosecond
competitiveness of the relevant Completed PCB material or FR4 rigid PCB material, to competitiveness of the relevant
laser moulding technology
products. reduce edge carbonization in laser moulding. products will be improved.
To improve high-speed product design capability The technology and market
Simulation and design of 56/112 To improve the product design
In progress and efficiency, and reach the leading level of the competitiveness of the relevant
Gbps transmission line capability.
industry. products will be improved.
To improve the technology and market To develop the LCM side blind hole and middle The technology and market
Development of LCM blind hole
competitiveness of the relevant Completed blind hole process, which can be applied in mass competitiveness of the relevant
technology
products. production. products will be improved.
To improve the technology and market To narrow the frames of LCMs and connect LCMs The technology and market
Development of LCM three-side
competitiveness of the relevant In progress with the enclosures more closely, to produce a competitiveness of the relevant
sealing technology
products. better sealing effect. products will be improved.
To develop the optic and structural design, driver The technology and market
To develop the new technology to
Mini LED LCM In progress and algorithm of blue light COB Mini LEDs, and competitiveness of the relevant
improve the display effect of LCDs.
realize the industrialization of the technology. products will be improved.
To satisfy the requirements of ultra-thin
To improve the technology and market The technology and market
specifications of the customers, be able to carry
PF2 R&D project competitiveness of laptop and In progress competitiveness of the relevant
out mass production and be applied in new
all-in-one PC device products. products will be improved.
projects.
To improve the technology and market With respect to metal mesh sensor, to reach the The technology and market
Self-made metal mesh sensor In progress
competitiveness of tablet, laptop and advanced technical level of the industry, be able to competitiveness of the relevant
23
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
all-in-one PC device products. carry out mass production and be applied in new products will be improved.
projects.
To improve the technology and market With respect to G-sensor, to reach the advanced The technology and market
Self-made G-sensor competitiveness of on-board and In progress technical level of the industry, be able to carry out competitiveness of the relevant
industrial control products. mass production and be applied in new projects. products will be improved.
With respect to cabinet welding, to realize
automatic work station welding by robots, adopt
Development of the lean To improve the production efficiency, The production efficiency, quality
the welding technology for a variety of materials,
manufacturing technology for quality and market competitiveness of Completed and market competitiveness of the
including copper-iron welding, iron-stainless steel
energy storage cabinet the relevant products. relevant products will be improved.
welding, laser welding and MAG, and realize full
recycling of circulation packing materials.
To optimize the cabinet structure and BOM cost,
Development of the energy saving
To improve the manufacturability, improve the manufacturability of the processing The manufacturability, quality and
cabinet structure and
quality and market competitiveness of Completed technology, and realize assembly of the devices market competitiveness of the
semi-integrated assembly
the relevant products. designated by the customers, and delivery of relevant products will be improved.
technology
semi-integrated products.
To independently design the
To realize mainstream design of the appearance, The market competitiveness of the
Development of the self-servicing innovative cabinet structure and
Completed modular design of glass door structure of the relevant products in the field will be
cabinet structure technology improve the market competitiveness
cabinet, and rapid maintenance. improved.
of the relevant products.
The market share in the new energy
Development of the cold plate To improve the market
To be validated for key products of strategic sector and market competitiveness of
production line and tooling competitiveness of the relevant Under validation
customers in the automotive industry. the relevant products will be
technology products.
improved.
The market share in the new energy
To improve the market
Development of the automatic Samples are under To be validated for key products of strategic sector and market competitiveness of
competitiveness of the relevant
production line of cell products validation customers in the industry. the relevant products will be
products.
improved.
Particulars of R&D personnel:
2021 2020 Y/Y % change
Number of R&D personnel 3,699 3,487 6.08%
Proportion of R&D personnel to total number of employees 18.53% 16.59% 1.94%
Education background of R&D personnel - - -
24
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Undergraduate 1741 1492 16.69%
Master 37 34 8.82%
Aging of R&D personnel - - -
Below 30 1726 1479 16.70%
30-40 518 471 9.98%
Particulars of R&D expenses:
2021 2020 Y/Y % change
Amount of R&D expenses (RMB) 1,028,567,206.95 910,253,381.44 13.00%
Proportion of R&D expenses to operating revenue 3.24% 3.24% 0.00%
Amount of R&D expenses capitalized (RMB) 0.00 0.00 0.00%
Proportion of capitalized R&D expenses to total R&D expenses 0.00% 0.00% 0.00%
Analysis of the cause and effect of significant change in the composition of R&D personnel:
□ Applicable √ N/A
Analysis of the cause of significant change in the proportion of R&D expenses to operating revenue compared with the preceding year:
□ Applicable √ N/A
Analysis of the cause and reasonableness of significant change in the proportion of R&D expenses capitalized:
□ Applicable √ N/A
25
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
5. Cash flows
Unit: RMB
Items 2021 2020 Y/Y % change
Cash provided by operating activities 31,571,649,840.58 28,907,652,380.61 9.22%
Cash used in operating activities 28,362,105,356.37 25,975,483,485.96 9.19%
Net cash flows from operating activities 3,209,544,484.21 2,932,168,894.65 9.46%
Cash provided by investment activities 1,871,205,697.48 529,960,243.63 253.08%
Cash used in investment activities 3,898,266,527.76 3,627,907,348.30 7.45%
Net cash flows from investment activities -2,027,060,830.28 -3,097,947,104.67 -34.57%
Cash provided by financing activities 13,568,826,956.10 21,388,286,958.74 -36.56%
Cash used in financing activities 13,662,677,252.42 20,284,639,506.39 -32.65%
Net cash flows from financing activities -93,850,296.32 1,103,647,452.35 -108.50%
Net increase in cash and cash equivalents 1,066,166,041.32 926,274,214.75 15.10%
Analysis of the main causes of significant changes in the relevant data:
√ Applicable □ N/A
1. The cash provided by investing activities increased by 253.08%, primarily due to recovery of the investment in wealth
management products that reached maturity.
2. The cash used in investment activities decreased by 34.57%, primarily due to recovery of the investment in wealth management
products that reached maturity, and increase in the investment in investment projects by offering proceeds.
3. The cash provided by financing activities decreased by 36.56%, primarily due to receipt of the offering proceeds of RMB 2.869
billion through private placement of 103 million shares in the preceding year.
4. The cash used in financing activities decreased by 32.65%, primarily due to repayment of certain bank loans with surplus funds in
the preceding year.
5. The net cash flows from financing activities decreased by 108.50%, primarily due to receipt of the offering proceeds of RMB
2.869 billion through private placement in the preceding year, and repayment of certain bank loans with surplus funds during the
reporting period.
Analysis of the significant difference between net cash flows from operating activities during the reporting period and net profit in
current year:
√ Applicable □ N/A
In 2021, the net profit attributable to the parent was RMB 1.86 billion and net cash flows from operating activities was RMB 3.21
billion, primarily due to operating cash inflows from depreciation of fixed assets, amortization of intangible assets and other non-cash
payments.
26
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
VI. Analysis of Assets and Liabilities
1. Material changes in the components of assets
Unit: RMB
December 31, 2021 January 1, 2021
Y/Y % change Reason of significant change
Amount % of total assets Amount % of total assets
Cash and bank balances 5,400,837,392.47 14.23% 5,154,010,538.74 13.72% 0.51%
Accounts receivable 7,666,079,765.82 20.20% 7,090,498,632.70 18.87% 1.33%
Inventories 6,451,712,389.82 17.00% 5,977,123,863.84 15.91% 1.09%
Primarily due to the leasehold properties newly
Investment properties 1,554,262.58 acquired by RF Top Electronic during the reporting
period.
Primarily due to the investment in Suzhou Yongxin
Long-term equity Jingshang Venture Capital Partnership (Limited
143,121,019.78 0.38% 101,207,887.93 0.27% 0.11%
investment Partnership) and BVF (BVI) Holding during the
reporting period.
Fixed assets 10,736,270,678.33 28.29% 10,414,964,294.37 27.72% 0.57%
Construction in progress 503,037,513.25 1.33% 562,008,491.36 1.50% -0.17%
Right-of-use assets 920,952,667.75 2.43% 919,933,989.09 2.45% -0.02%
Short-term borrowings 8,047,168,009.16 21.20% 8,579,155,068.19 22.84% -1.64%
Primarily due to an increase in the considerations
received or receivable from customers recognized
Contract liabilities 39,681,986.94 0.10% 21,204,655.32 0.06% 0.04%
according to the new revenue recognition
accounting standard in the reporting period.
Long-term loans 2,030,525,761.80 5.35% 2,764,720,894.68 7.36% -2.01%
Lease liabilities 1,147,810,164.72 3.02% 1,116,750,563.53 2.97% 0.05%
27
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Analysis of high proportion of overseas assets:
√ Applicable □ N/A
Proportion Whether it
Mode of Controls for guaranteeing of overseas involves risk of
Assets Method of acquisition Amount Location Income
operation the security of assets assets to net material
assets impairment loss
Dragon R&D and Its manufacturing entity is
Established by the Company 23,263,646,158.29 Delaware, U.S. 938,077,220.83 44.92% No
Holdings sales located in China
Multek R&D and Its manufacturing entity is
Established by the Company 5,337,096,155.12 Hong Kong, China 19,453,208.78 3.83% No
Group sales located in China
2. Assets and liabilities at fair value
√ Applicable □ N/A
Unit: RMB
Gains or Aggregate
Impairment loss
losses on changes in fair Amount acquired in Amount sold in the Other
Items Beginning balance recognized in the Ending balance
changes in value recorded the reporting period reporting period changes
current period
fair value in equity
Financial assets
1. Financial assets held for
trading (excluding 1,175,736,670.62 2,706,056,914.79 3,519,793,585.41 98,666.66 362,098,666.66
derivative financial assets)
2. Derivative financial
76,290,891.03 8,645,469.99 110,126,954.93 103,583,872.45 201,591,636.32 124,360.00 97,179,912.08
assets
4. Investment in other
10,000,000.00 30,249,971.12 40,249,971.12
equity instruments
Subtotal of financial assets 1,262,027,561.65 8,645,469.99 110,126,954.93 2,839,890,758.36 3,721,385,221.73 223,026.66 499,528,549.86
Total 1,262,027,561.65 8,645,469.99 110,126,954.93 2,839,890,758.36 3,721,385,221.73 223,026.66 499,528,549.86
28
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Financial liabilities 881,721.20 881,721.20 0.00
Other changes:
N/A
Whether there’s any material change in the measurement properties of main assets of the Company during the reporting period?
□ Yes √ No
3. Encumbrances on assets as of the end of the reporting period
Unit: RMB
Items Closing carrying amount Reasons for restrictions
Cash and bank balances 1,461,536,265.68 Security deposit for notes, etc.
Receivables financing 337,954,600.06 Pledge of notes receivable
Accounts receivable 49,750,000.00 Factoring of accounts receivable
Fixed assets 490,778,211.02 Collateral for loans and sale and lease back
Intangible assets 4,207,098.63 Collateral for loans
Right-of-use assets 920,952,667.75 Finance lease
Total 3,265,178,843.14
VII. Analysis of Investments
1. Overview
√ Applicable □ N/A
Amount of investment in 2021 (RMB) Amount of investment in 2020 (RMB) Y/Y % change
841,517,692.36 304,876,301.58 176.02%
2. Major equity investments acquired during the reporting period
29
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
□ Applicable √ N/A
3. Major non-equity investments that have not yet been completed in the reporting period
□ Applicable √ N/A
4. Investment in financial assets
(1) Investment in securities
We have not invested in securities during the reporting period.
(2) Investment in derivatives
√ Applicable □ N/A
Unit: RMB 0’000
% of ending
Actual
Amount Amount Allowance balance to
gains or
Whether or not Initial acquired in sold in for the net asset
Type of Date of Date of Beginning Ending losses in
Counterparty Affiliation a related-party investment the the impairment as at the end
derivative commencement termination balance balance the
transaction cost reporting reporting loss (if of the
reporting
period period any) reporting
period
period
Futures None No Commodity 187.3 June 24, 2021 June 14, 2022
0 31,105.12 16,836.63 0 14,257.18 0.97% -11.31
company futures
Total 187.3 - - 0 31,105.12 16,836.63 0 14,257.18 0.97% -11.31
Source of funds Self-owned funds
Whether or not involved in any litigation (if applicable) No
Disclosure date of the announcement of the board of
June 15, 2021
directors approving the investment in derivatives (if any)
30
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Analysis of risks associated with the derivatives held in the
reporting period (including without limitation market risk, The risk analysis and control measures are set out in the Announcement on the Conduct of Hedging Transactions with Commodity Futures disclosed
liquidity risk, credit risk, operational risk and legal risk) and by us on June 15, 2021 (Announcement No.: 2021-037).
related risk control measures
Changes in the market price or fair value of the derivatives
held in the reporting period (in the analysis of the fair value We are mainly engaged in hedging transactions with mainstream products on major domestic futures markets. The derivatives traded by us have a
of derivatives, the specific approaches, assumptions and transparent and active market, and their transaction prices and settlement prices can fully reflect their fair value.
parameters used shall be disclosed)
Whether there’s any material change in the accounting
policies and accounting principles for the measurement of
None
derivatives in the reporting period as compared with the
preceding reporting period
The hedging transactions conducted by the Company with commodity futures can give full play to the hedging function of futures, reduce the effect
of the fluctuations in market prices of raw materials and products on the production and operating costs and the prices of main products of the
Special opinion issued by the independent directors Company, improve its capability to fend off risks and enhance its financial soundness. The relevant transactions have been considered and decided
regarding the Company’s investment in derivatives and in accordance with the provisions of the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange, the Guide on Operational
related risk control measures Compliance for Companies Listed on the Shenzhen Stock Exchange, and other applicable laws and regulations and the AOA, and will not prejudice
the interests of the Company and the shareholders. Therefore, we consent to the conduct of the hedging transactions by the Company with
commodity futures.
5. Use of offering proceeds
√ Applicable □ N/A
(1) Description of use of offering proceeds
√ Applicable □ N/A
Unit: RMB 0’000
Total amount Aggregate Total amount Aggregate Percentage Total Purpose and Total amount of
Year of Method of Total offering
of offering amount of of offering amount of of offering amount of whereabouts offering proceeds
offering offering proceeds
proceeds offering proceeds the offering proceeds the unused of unused that has remained
31
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
used in the proceeds purpose of proceeds the purpose of offering offering unused for more
reporting already which was purpose of which has proceeds proceeds than two years
period used changed in the which has been
reporting been changed changed
period
To be invested
Private share
2020 286,395.39 65,800.5 153,004.25 0 0 0.00% 134,607.54 in the relevant 0
offering
projects
Total -- 286,395.39 65,800.5 153,004.25 0 0 0.00% 134,607.54 -- 0
Description of use of offering proceeds
With the approval of the CSRC by its document Zheng Jian Xu Ke [2020] No. 980 and the consent of the SZSE, we privately offered 103,294,850 Renminbi-denominated ordinary A shares at
the offer price of RMB 28.00 per share to specific investors through the lead underwriter TF Securities Co., Ltd., and raised RMB 2.89 billion in total, and after deduction of the underwriter’s
fee and sponsor’s fee totaling RMB 23500000, the balance of the offering proceeds, RMB 2.87 billion, was remitted to our supervisory account of offering proceeds by TF Securities Co.,
Ltd. on July 13, 2020. After deduction of the accountant’s fee, attorney’s fee, legal information disclosure fee and other external costs directly relating to the offering of equity securities,
totaling RMB 6500,000, the amount of net offering proceeds was RMB 2.86 billion (exclusive of tax). Pan-China Certified Public Accountants LLP verified the receipt of such offering
proceeds, and issued the Capital Verification Report (Tian Jian Yan [2020] No. 5-9).
(2) Committed investment projects by offering proceeds
√ Applicable □ N/A
Unit: RMB 0’000
Whether
Whether the Progress of Date that Income
Total Total Amount Aggregate amount Whether the there’s any
project has investment as of the project earned in
Committed investment project committed investment invested in the already invested as project has significant
been changed the end of the is ready for the
and use of over-raised funds investment amount as reporting of the end of the produced the change in the
or partially reporting period its intended reporting
amount adjusted (1) period reporting period (2) desired result feasibility of
changed (3) = (2) / (1) use period
the project
Committed investment project
32
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
Wireless module production and
construction project of Yancheng
No 70,122.75 70,122.75 2,383.85 8,049.51 11.48% N/A N/A N/A No
Dongshan Communication
Technology Co., Ltd.
Multek 5G high-speed
high-frequency and high-density
No 65,958.46 65,958.46 13,410.81 25,656.23 38.90% N/A N/A N/A No
PCB technology upgrading
project
Multek PCB production line
No 72,805.89 72,805.89 25,256.24 51,114.15 70.21% N/A N/A N/A No
technology upgrading project
400000 m2 fine line FPC
production and assembly capacity No 80,338.48 80,338.48 24,749.6 68,184.36 84.87% N/A N/A N/A No
expansion project
Subtotal -- 289,225.58 289,225.58 65,800.5 153,004.25 -- -- -- --
Use of over-raised funds
None
Total -- 289,225.58 289,225.58 65,800.5 153,004.25 -- -- -- --
Failure to meet the scheduled
Due to the fact that 5G deployment falls short of expectations, and the effect of COVID-19 and other factors, the investment in the wireless module production and construction
progress and produce the desired
project of Yancheng Dongshan Communication Technology Co., Ltd., Multek 5G high-speed high-frequency and high-density PCB technology upgrading project and Multek
result and reason thereof (please
PCB production line technology upgrading project slowed down. We will accelerate the investment in the investment projects by offering proceeds, taking into account the
describe on a project per project
situation of the industry in which we operate and our actual situations, and improve the efficiency of the use of offering proceeds.
basis)
Reason of significant change in
None
the feasibility of the project
Amount and use of over-raised
offering proceeds and progress of N/A
use thereof
Change in the place of the Applicable
33
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
investment projects by offering
Occurred during the reporting period
proceeds
On August 10, 2021, the 15th meeting of the 5th session of the Board of Directors considered and adopted the Proposal for Changing the Place of Certain Investment Project by
Offering Proceeds, approving the addition of Plot Su Wu Guo Tu 2020-WG-16 at the north of Tangdong Road, Wuzhong Economic Development Zone, Suzhou as the new place
for implementing the 400000 m2 fine line FPC production and assembly capacity expansion project. After such change, the project will be implemented at No.88 Tangdong
Road, Wuzhong Economic Development Zone, Suzhou and Plot Su Wu Guo Tu 2020-WG-16 (north of Tangdong Road, Wuzhong Economic Development Zone, Suzhou).
Adjustment of the method of
implementation of the investment N/A
project by offering proceeds
Applicable
Funds pre-invested in the
investment project and The 3rd meeting of the 5th session of the Board of Directors considered and adopted the Proposal for Replacing the Self-raised Funds Pre-invested in the Investment Projects by
replacement thereof Offering Proceeds with the Idle Offering Proceeds, approving the replacement of the funds pre-invested in the investment projects by offering proceeds in the amount of RMB
399.59 million with the offering proceeds. The replacement was completed in 2020.
Applicable
Temporary replenishment of
working capital with the idle On July 28, 2021, the 14th meeting of the 5th session of the Board of Directors considered and adopted the Proposal for Temporary Replenishment of Working Capital with the
offering proceeds Idle Offering Proceeds, approving the temporary replenishment of working capital with the idle offering proceeds up to RMB 1.2 billion for a period of not more than 12 months.
As of December 31, 2021, we used the idle offering proceeds of RMB 1.13 billion to temporarily replenish the working capital.
Amount of surplus offering N/A
proceeds and reason thereof
As of December 31, 2021, the amount of unused offering proceeds was RMB 1346.0754 million, of which, RMB 1,130 million was used to replenish the working capital, RMB
Purpose and whereabouts of
45 million was used to purchase wealth management products for purpose of cash management, and the remaining RMB 171.0754 million was deposited in the special account of
unused offering proceeds
offering proceeds.
(3) Changes in the investment projects by offering proceeds
□ Applicable √ N/A
There has been no change in the investment projects by offering proceeds during the reporting period.
34
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
VIII Sale of Material Assets and Equities
1. Sale of material assets
No material asset has been sold during the reporting period.
2. Sale of material equities
□ Applicable √ N/A
IX. Analysis of Major Subsidiaries and Associates
√ Applicable □ N/A
Major subsidiaries and associates representing more than 10% of the net profit of the Company:
Unit: RMB
Company Type of Registered
Main business Total assets Net assets Operating revenue Operating profit Net profit
name company capital
Design, R&D, sale and
after-sale services in
respect of PCBs; sale and
Dragon USD
Subsidiary after-sale services in 23,263,646,158.29 6,590,536,235.65 32,506,671,197.17 1,132,987,332.05 938,077,220.83
Holdings 113,450,100
respect of electronic
products; and investment
holding
Multek R&D, sale and after-sale
Subsidiary USD 100 5,337,096,155.12 562,250,926.27 4,775,336,289.38 33,865,776.91 19,453,208.78
Group services in respect of PCBs
Subsidiaries acquired or disposed of during the reporting period:
35
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
√ Applicable □ N/A
Company name Method of acquisition or disposal Effect on overall production, operation and results
Suzhou Dongchen Intelligent Equipment Manufacturing Co., Ltd. Investment No material effect on our operating results in the reporting period
Shanghai Dongxin New Energy Technology Co., Ltd. Investment No material effect on our operating results in the reporting period
Shanghai Donglan New Energy Technology Co., Ltd. Investment No material effect on our operating results in the reporting period
Hainan Chengjia Technology Consulting Co., Ltd. Investment No material effect on our operating results in the reporting period
Chongqing Chengjia Precision Electronic Technology Co., Ltd. Deregistration No material effect on our operating results in the reporting period
Dongguan Xindong Intelligent Technology Co., Ltd. Loss of control No material effect on our operating results in the reporting period
DSBJ FINLAND OY Deregistration No material effect on our operating results in the reporting period
Suzhou Dongshan Precision Technology Co., Ltd. Deregistration No material effect on our operating results in the reporting period
Particulars of major subsidiaries and associates:
None.
36
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
X. Structured Entities Controlled by the Company
□ Applicable √ N/A
XI. Prospects for Future Development of the Company
1. Our development strategy
We focus on high-quality development, enhance systemic thinking, make top-level design, strictly
defend the bottom line of operation; actively embrace changes, continue to develop the main business,
consolidate and improve the basic business; increase R&D investments, enable industrial development,
fully exploit internal resources and potentialities, strive to improve our performance in the new energy
sector; implement comprehensive budget management, focus on key products, serve key customers;
insist on prudent operation, maintain the healthiness of financial position; optimize the organization
structure, enhance the training of personnel; implement integration of informatization and
industrialization, and drive the transition from “manufacturing” to “intelligent manufacturing”.
2. 2022 business plan
Make further use of our advantages in R&D, technology and delivery, consolidate and improve the
basic business; fully exploit our potentialities, actively increase the application of our products in the
field of new energy; give full play to the role of the headquarters in business planning, overall
arrangement of sales, etc., efficiently allocate resources, and strive to provide the customers with more
accurate and one-stop products and services.
Insist on prudent operation, enhance comprehensive budget management, improve the asset turnovers;
ensure the security of supply chain, keep a close watch on the changes in foreign exchange rates and
prices of staple commodities, and strive to eliminate and mitigate the effect of external factors on us.
Enhance integration of informatization and industrialization, insist on lean operations and cost control,
strive to improve the return on investment; implement systemic governance, and promote our
high-quality development.
Actively explore scientific and effective incentive mechanisms, enhance organizational building and
training of personnel, in particular, young people, to build a talent pool for our future development.
Maintain the healthiness of financial position, enhance management of cash flows, and continuously
optimize debt structure and financing costs.
3. Main risk factors
Risk of concentration of customers
We have good customer resources. Our major customers are well-known domestic and international
companies in the relevant industries that are of sound credit and have established stable cooperation
relationship with us. However, our top 5 customers constitute a large proportion in our total sales
revenue, which may further increase in the future. Any material adverse change in the business
situation of such major customers could have an adverse effect on our business.
We will give full play to our advantages, make active deployment in new energy and other emerging
industries and strive to develop new customers, in order to mitigate the adverse effect of the relative
concentration of customers on us.
Risks brought by rapid technology upgrading of the industry
Our business covers PCB, photoelectric display, precision manufacturing and other technology
intensive industries, and our products are widely applied in consumer electronics, communication
equipment, industrial equipment, AI, medical appliances and other fields, all of which are characterized
by rapid technology upgrading. If our R&D and manufacturing capabilities fail to keep pace with the
37
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
rapid technology upgrading of downstream products, our products and technologies may become
obsolete.
We will follow up on the new technologies and new processes of the industry from the strategic
perspective, and strive to keep our technologies and processes at the advanced level through continuous
and effective R&D investments.
Risk of changes in the global trade environment
Our major customers include some well-known international companies, and our export sales have
grown steadily for years. Though China has established good economic and trade cooperation
relationships with major countries in the world, the increasingly fierce regional disputes in recent years
may cause uncertainties to the applicable trade policies, which could affect our international trade.
We will follow up on the development of international trade disputes, enhance communication with our
customers, and continue to enhance our competencies and customer adhesion.
Risk of market exploitation
We are a strong R&D and manufacturing enterprise in the field of PCB, photoelectric display and
precision manufacturing. Due to our stable product quality and efficient customer services, we have
remarkable competitive edge, and are able to provide the downstream enterprises with “one-stop”
products and services, and satisfy their demands for systemic manufacturing solutions. However, our
downstream industries are characterized by rapid upgrading and rapid changes in the preference of
consumers, among others. If our major customers are at a disadvantage on the market, or we are unable
to satisfy the demands of customers or fail to acquire new customers, the sales and margin rate of our
products may decrease.
We will continue to increase R&D investments, optimize our product mix and process structure,
enhance our competitive edge, and actively cope with market competitions.
Risk of environmental protection
In our production, the electroplating, etching and other processes are subject to relatively higher
requirements for environmental protection, and require huge investment in purification and treatment
of the relevant wastes. In recent years, the country’s environmental protection regulation over the
industrial manufacturing enterprises has become increasingly strict, resulting in continued increase in
the investment by the enterprises in environmental protection facilities. Though our and our
subsidiaries’ environmental protection investment in connection with the production lines can ensure
that all environmental protection metrics comply with the applicable national and local environmental
protection standards, if the country puts forward stricter environmental protection requirements, we
may need to increase our environmental protection investment, which would increase our
environmental protection costs and affect our results.
In our production and operation, we will continue to attach great importance to environmental
protection investment, enhance environmental protection training and employees’ awareness of
environmental protection, take control measures at source, establish and improve the environmental
management system, to reduce the risk of environmental protection.
Foreign exchange risk
Export sales constitute a large proportion in our total sales revenue. Because our day-to-day operation
involves transactions in USD and other foreign currencies, and our consolidated accounts are expressed
in RMB, the changes in the exchange rate between RMB and USD may cause foreign exchange risk to
our future operation.
We will keep a close watch on the changes in the relevant foreign exchange rate, strive to control the
exposure to foreign exchange risk at a reasonable level, and hedge or otherwise reduce exposure to
such risk.
Effect of COVID-19 on global economy
At present, COVID-19 is still spreading in China and throughout the world, which greatly impacts
many industries, and the production and operation of enterprises, global supply chain, transportation,
38
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2021
logistics, business exchanges and cooperation, consumer confidence, among others.
We will pay close attention to the situations of epidemic prevention and control, keep close
communication with the relevant parties, take anti-epidemic measures regularly, and strive to eliminate
the adverse effect of COVID-19.
39
Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
XII. Investigation, Research, Communication, Interview and Other Activities during the Reporting Period
√ Applicable □ N/A
Particulars of the
Method of Main topic of discussion and information
Date Place Type of guests Guests investigation and research
communication provided
activity available at
Our development plan, team management,
Communication by Institutional Millenium and other 90
January 21, 2021 online foreign exchange risk management and http://www.cninfo.com.cn
telephone investors institutional investors
business development.
Interpretation of the financial data disclosed
in our annual report and first quarter report,
April 26, 2021 online Others Retail investors Investors and our development of customers, risk http://www.cninfo.com.cn
management and market value management,
etc.
Communication by Institutional Brilliance and other 73 Our business development and exchange
August 12, 2021 online http://www.cninfo.com.cn
telephone investors institutional investors risk management.
Interpretation of our third quarter report
Beijing Hongcheng 2021, and introduction about the
Institutional Investment Management development of our main business segments,
November 3, 2021 Suzhou Others http://www.cninfo.com.cn
investors Co., Ltd. and other 14 operation of major subsidiaries, and
institutional investors development plan for the automotive
electronic business.
Guangdong-Hong
Communication by Institutional Kong-Macao Greater Bay Our new energy vehicle-related business and
November 30, 2021 Suzhou http://www.cninfo.com.cn
telephone investors Area Industrial, Finance and IC substrate project.
Investment Company
40
Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Section IV Corporate Governance
I. Basic Situation of Corporate Governance
During the reporting period, the Company has been improving the corporate governance structure, regulating our operation and
speeding up disclosure of information in strict accordance with the Company Law, the Securities Law, the Code of Corporate
Governance of Listed Companies and the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange. Currently, the
Company has in place a legal person governance structure where all organs have clearly defined rights and duties and maintain
effective balance and coordinated operation. The board of shareholders, the board of directors and board of supervisors of the
Company have fulfilled their respective responsibilities and duties and operated in a standardized manner, and have effectively
safeguarded the legitimate interests of investors and the Company.
Does the actual situation of corporate governance materially differ from applicable laws, administrative regulations and the rules for
corporate governance of listed companies issued by the CSRC?
□ Yes √ No
The actual situation of corporate governance does not materially differ from applicable laws, administrative regulations and the rules
for corporate governance of listed companies issued by the CSRC.
II. The Company’s Independence from Controlling Shareholder and Actual Controller in
Terms of Assets, Personnel, Finance, Organizations and Business
The Company is completely independent in business, personnel, assets, organizations, and finances from its controlling shareholder,
and has independent and full capacity for business operation and independent management.
1. Business: The Company is independent from our shareholders and other affiliates in terms of business, and has a complete set of
production, R&D, management, procurement and sales business systems, and is able to independently operate business in the market.
2. Personnel: The Company has established and perfected the legal person governance structure, and all directors, supervisors and
senior officers are elected in strict accordance with the Company Law, the Articles of Association and other pertinent regulations, and
have never taken any part-time job as prohibited by applicable laws and regulations. The Company shall be completely separated
from our shareholders in terms of personnel and payroll management, and all of our employees get paid by the Company; the
Company has formulated a stringent labor system involving employee recruitment, assessment and promotion, and has entered into a
Labor Contract with all of our employees. The Company’s labor, personnel and payroll management are completely independent
from one another.
3. Assets: The property relationship between the Company and our controlling shareholder is clear, and the Company has the title to
or the right to use the principal premises for production and operation activities, and a complete set of auxiliary production system
and supporting facilities. Neither the controlling shareholder nor the enterprise legal person under our control has possessed any
funds, assets or other sources of the Company.
4. Organizations: The Company has established a relatively perfect legal person governance structure in accordance with the
requirements of the Company Law and the Articles of Association, and the board of shareholders, board of directors and board of
supervisors have operated in strict accordance with applicable laws and regulations. In terms of internal bodies, the Company has
established bodies suitable for our growth, clarified the functions of all bodies, and formulated corresponding internal management
41
Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
and control systems. The operation of each functional department is not subject to intervention by any shareholder or other relevant
department, entity or individual. There is no mixed operation or shared workplace for different functional departments.
5. Finance: The Company has established an independent finance department equipped with financial professionals, established and
perfected our accounting system and financial management and decision-making policy, and implemented rigorous financial
supervision and administration. The Company opens bank accounts and controls our funds and assets independently, and no
shareholder has intervened in the Company’s use of funds; as an independent taxpayer, the Company has paid taxes independently by
law, and there is no mixed taxation between the Company and any of our shareholders.
III. Horizontal Competition
□ Applicable √ N/A
IV. Particulars of Annual General Meeting and Extraordinary General Meetings Held during
the Reporting Period
1. Particulars of general meetings held during the reporting period
Proportion of
Meeting Type of meeting participating Convened Date Disclosure date Resolution of the Meeting
investors
Announcement of
Resolutions Passed at the
First Extraordinary Extraordinary
45.93% February 26, 2021 February 27, 2021 First Extraordinary General
General Meeting in 2021 General Meeting
Meeting in 2021 (No.:
2021-009)
Announcement of
2020 Annual General Annual General Resolutions Passed at the
35.56% May 25, 2021 May 26, 2021
Meeting Meeting Annual General Meeting in
2020 (No.: 2021-034)
2. The preferred shareholder, whose voting right has been restored, requests the holding of extraordinary
general meetings
□ Applicable √ N/A
42
Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
V. Particulars of Directors, Supervisors and Senior Officers
1. Basic information
Number of shares held at Number of shares held at
Employment Employment
Name Title Tenure status Gender Age the beginning of the period the end of the period
commencement date termination date
(Shares) (Shares)
YUAN Yonggang Chairman Incumbent Male 43 December 14, 2007 May 29, 2023 202,226,196 202,226,196
YUAN Yongfeng Director & General Manager Incumbent Male 45 December 14, 2007 May 29, 2023 222,388,153 222,388,153
ZHAO Xiutian Vice Chairman Incumbent Male 59 May 29, 2020 May 29, 2023
Director January 16, 2017 May 29, 2023
SHAN Jianbin Incumbent Male 46 553,700 553,700
CEO May 29, 2020 May 29, 2023
Director December 10, 2013 May 29, 2023
MAO Xiaoyan Incumbent Female 42 391,600 391,600
Deputy General Manager & Board Secretary August 23, 2012 May 29, 2023
Director January 16, 2017 May 29, 2023
WANG Xu Deputy General Manager Incumbent Male 40 December 10, 2013 May 29, 2023 560,000 560,000
CFO October 14, 2013 May 29, 2023
WANG Zhangzhong Independent Director Incumbent Male 59 May 29, 2020 May 29, 2023
SONG Liguo Independent Director Incumbent Male 58 May 29, 2020 May 29, 2023
LIN Shu Independent Director Incumbent Male 44 May 29, 2020 May 29, 2023
MA Liqiang Chairman of board of supervisors Incumbent Male 41 January 16, 2017 May 29, 2023 3,000 3,000
JI Yachun Employee Supervisor Incumbent Male 44 May 29, 2020 May 29, 2023
HUANG Yongxin Employee Supervisor Incumbent Male 36 May 29, 2020 May 29, 2023
In Total -- -- -- -- -- -- 426,122,649 426,122,649
43
Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Has any director or supervisor resigned from or senior officer been removed by the Company during the reporting period
□ Yes √ No
Change of the Company’s directors, supervisors or senior officers
□ Applicable √ N/A
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
2. Employment particulars
Professional background and work experience of the Company’s current directors, supervisors and senior officers, and their current
duties and responsibilities at the Company
(1) Basic information about members of board of directors of the Company
Mr. YUAN Yonggang: a PRC citizen who has a bachelor’s degree and serves as the controlling shareholder and actual controller of
the Company. He served as the Director of the Marketing Department, Deputy General Manager and Vice Chairman of the Company
since October 1998. He currently serves as the Chairman of the Company, the Vice Chairman of Jiangsu General Chamber of
Commerce, the member of Suzhou Seventeenth People’s Congress, and the Chairman of Suzhou Chamber of Commerce for
New-Generation Entrepreneurs (Directly under the JGCC).
Mr. YUAN Yongfeng: a PRC citizen who has a bachelor’s degree and serves as the controlling shareholder and actual controller of
the Company. He served as the Director of the Manufacturing Department and Supervisor of the Company since October 1998. He
currently serves as the Director and General Manager of the Company, the President of Yancheng Electronic Information Industry
Association, and the member of the Fifth Suzhou Wuzhong District Committee of CPPCC.
Mr. ZHAO Xiutian: a US citizen who has a master’s degree. He once worked for Feichuang, Hughes Network Systems, MCE,
Celiant and Andrew. He currently serves as the Vice Chairman of the Company.
Mr. SHAN Jianbin: a PRC citizen who has a bachelor’s degree. He once worked for Mektec Manufacturing Corporation (Zhuhai)
Ltd. He currently serves as the Director & CEO of the Company, the member of the Twelfth Jiangsu Committee of CPPCC, and the
Vice President of China Printed Circuit Association.
Ms. MAO Xiaoyan: a PRC citizen with a master’s degree, and an economist. She once worked for Suzhou Huacheng Auto Car
Trade Group Company Limited and Jiangsu Wuzhong Industrial Co., Ltd. She currently serves as the Director, Deputy General
Manager and Board Secretary of the Company, and the member of Suzhou Wuzhong District NSSA.
Mr. WANG Xu: a PRC citizen with a master’s degree, and a certified public accountant (non-practitioner). He once worked for
Kunshan Fengrui United Accounting Firm and Suzhou Good-ark Electronics Co., Ltd. He currently serves as the Director, Deputy
General Manager and CFO of the Company, the Off-Campus Tutor for Masters in Accounting Program of Soochow University
Dongwu Business School, and the Off-Campus Career Development Tutor of Renmin University of China Suzhou Campus.
Mr. WANG Zhangzhong: a PRC citizen who has a master’s degree. He has been working for the School of Materials Science and
Engineering of Nanjing Institute of Technology in his capacity as Teacher, Office Director, Secretary of Party Committee, Head of
Division of Science and Technology, Dean and Professor since August 1983. He served as the independent director of the Company
from December 2007 to November 2013. He currently serves as the independent director of the Company. He concurrently serves as
the Director of Jiangsu Key Laboratory of Advanced Structural Materials and Application Technology, the member of China Heat
Treatment Association, the Chairman of Industrial Furnace Branch of Jiangsu Mechanical Engineering Society (JMES), and the Vice
President of New Metal Materials Branch of Jiangsu Metallurgical Industry Association.
Mr. SONG Liguo: a Hong Kong citizen with a doctoral degree. He once worked for Tianjin Business Unit of CITIC Securities,
Tianjin Equity Exchange, Anhui Antai Law Firm, China Baoan Group, Hong Kong Heng Feng Group International Investment
Limited, CHAN & CO., ARTHUR K.H. and Dan Hao Dun International Law Firm (Hong Kong). He currently serves as the
independent director of the Company, and the Barrister of Jones Day International Law Firm (Hong Kong). He concurrently serves as
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
the Visiting Associate Professor of Anhui University Law School, the Arbitrator of China International Economic and Trade
Arbitration Commission, the Arbitrator of the Cross-Straits Arbitration Center, and the Arbitrator of Xiamen Arbitration Commission.
Mr. LIN Shu: a PRC citizen who has a doctoral degree. He has been working for the Department of Accounting of Nanjing
University Business School in his capacity as Lecturer, Associate Professor, Professor, Doctorate Tutor and Dean since November
2006. As of the end of the reporting period, he serves as the independent director of the Company. He also serves as the independent
director of CTS International Logistics Corporation Limited.
(2) Basic information about members of the Company’s board of supervisors
Mr. MA Liqiang: a PRC citizen who has a bachelor’s degree. He once worked for Suzhou Dayin Electronic Telecommunications
Equipment Co., Ltd., Suzhou Jinhuasheng Paper Co., Ltd. and Dongshan Optronics (Suzhou) Co., Ltd. He currently serves as the
Chairman of the board of supervisors of the Company, COO and President of China Region of Multek, and President of the Touch &
Display Business Unit.
Mr. JI Yachun: a PRC citizen with a master’s degree. He once worked for the Central Committee of the Communist Youth League
of China. He currently serves as the PR President of the Company (in Yancheng), Employee Representative Supervisor, and the
Secretary of the Party Committee and the Chairman of the Management Committee of Yancheng Dongshan Precision Industrial Park.
Mr. HUANG Yongxin: a PRC citizen with a bachelor’s degree. He once worked for Everlight Electronics (China) Co., Ltd.. He
currently serves as the Employee Representative Supervisor of the Company, and the General Manager of Yancheng Dongshan
Precision Manufacturing Co., Ltd.
(3) Basic information about senior officers of the Company
The basic information about Mr. YUAN Yongfeng (General Manager), Mr. SHAN Jianbin (CEO), Ms. MAO Xiaoyan (Deputy
General Manager and Board Secretary), Mr. WANG Xu (Deputy General Manager and CFO) is seen in the “Basic
information about the members of board of directors of the Company” section.
Positions held in shareholders’ entities
□ Applicable √ N/A
Positions held in other entities
√ Applicable □ N/A
Name Name of other entity Position in other entity
Jingbaiyue Investment Development (Suzhou) Co., Ltd. Executive Director
Suzhou Dongyang Investment Co., Ltd. Supervisor
Suzhou Dongding Tea Shop Co., Ltd. Supervisor
Shanghai Keguna New Materials Technology Co., Ltd. Chairman
YUAN Yonggang Anhui Landunguang Electronic Co., Ltd. Chairman
Ningbo Qixiang Information Technology Co., Ltd. Director
Shenzhen National Star Vision Technology Co., Ltd. Director
Brave Pioneer International Limited Executive Director
Hong Kong Dongshan Investment Holdings Co., Ltd. Executive Director
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Shanghai Xinhuarui Semiconductor Technology Co., Ltd. Director
Fujian Nanping Nanfu Battery Co., Ltd. Director
Jiangsu General Chamber of Commerce Vice Chairman
Suzhou Chamber of Commerce for New-Generation Entrepreneurs (Directly
Chairman
under the JGCC)
Suzhou Dongyang Investment Co., Ltd. Executive Director
YUAN Yongfeng
Yancheng Electronic Information Industry Association Chairman
ZHAO Xiutian Suzhou Langsheng Communication Technology Co., Ltd. Director
SHAN Jianbin Vice Chairman of China Printed Circuit Association Vice Chairman
Shanghai Dotwil Intelligence Technology Ltd. Director
MAO Xiaoyan
Suzhou Wuzhong District NSSA Member
Off-Campus Tutor for Masters
Soochow University Dongwu Business School
in Accounting Program
WANG Xu
Off-Campus Career
Renmin University of China Suzhou Campus
Development Tutor
School of Materials Science and Engineering of Nanjing Institute of Technology Professor and Dean
Jiangsu Key Laboratory of Advanced Structural Materials and Application
Director
Technology
WANG
Zhangzhong China Heat Treatment Association Member
Industrial Furnace Branch of Jiangsu Mechanical Engineering Society Chairman
New Metal Materials Branch of Jiangsu Metallurgical Industry Association Vice President
Jones Day International Law Firm (Hong Kong) Barrister
Anhui University Law School Visiting Associate Professor
SONG Liguo China International Economic and Trade Arbitration Commission Arbitrator
Cross-Straits Arbitration Center Arbitrator
Xiamen Arbitration Commission Arbitrator
Professor, Doctorate Tutor and
Department of Accounting of Nanjing University Business School
LIN Shu Dean
CTS International Logistics Corporation Limited Independent Director
Punishments imposed during the last three (3) years by the securities regulator on current and off-office directors, supervisors and
senior officers of the Company during the reporting period
□ Applicable √ N/A
3. Remuneration of directors, supervisors and senior officers
Decision-making procedures, basis for determination and actual payment of the remuneration of directors, supervisors and senior
officers
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
The Company shall determine the remuneration of our directors, supervisors and senior officers in accordance with the provisions of
the Articles of Association. The remuneration of members of board of directors and board of supervisors and payment method thereof
shall be determined by the board of shareholders; the remuneration of senior officers and payment method thereof shall be
determined by the board of directors. The remuneration of the Company’s directors, supervisors and senior officers shall be
determined based on their respective job responsibilities, and the remuneration payable to any director, supervisor or senior officer
who concurrently takes any key operation position shall be assessed and determined according to the completion of his or her annual
performance appraisal indicators, and who concurrently takes any key management position shall be assessed and determined
according to the completion of their annual job responsibilities and tasks. The Company shall grant remuneration to our directors,
supervisors and senior officers in accordance with our remuneration system and the regulations regarding the assessment of the
completion of our job responsibilities.
Remuneration of directors, supervisors and senior officers during the reporting period of the Company
Unit: RMB 0’000
Total before-tax Has any remuneration
Name Title Gender Age Tenure status remuneration received been received from the
from the Company Company’s affiliates
YUAN Yonggang Chairman Male 43 Incumbent 287.12 No
YUAN Yongfeng Director & General Manager Male 45 Incumbent 287.12 No
ZHAO Xiutian Vice Chairman Male 59 Incumbent 410 No
SHAN Jianbin Director & CEO Male 46 Incumbent 380 No
Director, Deputy General Manager
MAO Xiaoyan Female 42 Incumbent 127.47 No
& Board Secretary
Director, Deputy General Manager
WANG Xu Male 40 Incumbent 181.97 No
& CFO
WANG
Independent Director Male 59 Incumbent 11.33 No
Zhangzhong
SONG Liguo Independent Director Male 58 Incumbent 11.33 No
LIN Shu Independent Director Male 44 Incumbent 11.33 No
MA Liqiang Chairman of board of supervisors Male 41 Incumbent 240 No
JI Yachun Employee Supervisor Male 44 Incumbent 145.65 No
HUANG Yongxin Employee Supervisor Male 36 Incumbent 160 No
Total -- -- -- -- 2,253.32 --
VI. Fulfillment by Directors of Responsibilities during the Reporting Period
1. Performance of Duties by Directors during the Reporting Period
Meeting Convening date Disclosure date Meeting resolution
The eighth meeting of the fifth Announcement of Resolutions Passed at the Eighth
January 22, 2021 January 26, 2021
session Meeting of the Fifth Session of Board of Directors
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
(No.: 2021-001)
Announcement of Resolutions Passed at the Ninth
The ninth meeting of the fifth
February 9, 2021 February 10, 2021 Meeting of the Fifth Session of Board of Directors
session
(No.: 2021-005)
Announcement of Resolutions Passed at the Tenth
The tenth meeting of the fifth
April 13, 2021 April 15, 2021 Meeting of the Fifth Session of Board of Directors
session
(No.: 2021-016)
The eleventh meeting of the The Report Q1 2021 of the Company was passed upon
April 22, 2021 April 26, 2021
fifth session deliberation
Announcement of Resolutions Passed at the Twelfth
The twelfth meeting of the fifth
June 11, 2021 June 15, 2021 Meeting of the Fifth Session of Board of Directors
session
(No.: 2021-036)
Announcement of Resolutions Passed at the Thirteenth
The thirteenth meeting of the
July 8, 2021 July 9, 2021 Meeting of the Fifth Session of Board of Directors
fifth session
(No.: 2021-044)
Announcement of Resolutions Passed at the Fourteenth
The fourteenth meeting of the
July 28, 2021 July 29, 2021 Meeting of the Fifth Session of Board of Directors
fifth session
(No.: 2021-049)
Announcement of Resolutions Passed at the Fifteenth
The fifteenth meeting of the
August 10, 2021 August 12, 2021 Meeting of the Fifth Session of Board of Directors
fifth session
(No.: 2021-056)
Announcement of Resolutions Passed at the Sixteenth
The sixteenth meeting of the
September 1, 2021 September 3, 2021 Meeting of the Fifth Session of Board of Directors
fifth session
(No.: 2021-062)
The seventeenth meeting of the The Report Q3 2021 of the Company was passed upon
October 25, 2021 October 26, 2021
fifth session deliberation
2. Attendance by directors at board meetings and general meetings
Attendance by directors at board meetings and general meetings
Number of Was there any
expected Number of failure to
Number of Number of Number of
attendances at attendances by Number of attend board
in-person attendances by attendances at
Name of director board meetings telecommunica absences from meetings in
attendances at proxy at board general
during the tion at board board meetings person on two
board meetings meetings meetings
reporting meetings consecutive
period occasions?
YUAN Yonggang 10 1 9 No 2
YUAN Yongfeng 10 1 9 No 2
ZHAO Xiutian 10 10 No 2
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
SHAN Jianbin 10 1 9 No 2
MAO Xiaoyan 10 1 9 No 2
WANG Xu 10 1 9 No 2
WANG
10 10 No 2
Zhangzhong
SONG Liguo 10 10 No 2
LIN Shu 10 10 No 2
Statement on failure to attend board meetings in person on two consecutive occasions
None
3. Objection raised by directors to matters relating to the Company
Has any director raised any objection to matters relating to the Company?
□ Yes √ No
No director has raised any objection to matters relating to the Company during the reporting period.
4. Other description of fulfillment by directors of job responsibilities
Has any suggestion made by any director regarding the Company been accepted?
√ Yes □ No
Statement on acceptance or refusal of any suggestion made by any director regarding the Company
During the reporting period, each independent director of the Company has diligently carried out his or her work in strict accordance
with applicable laws and regulations and the provisions of the Articles of Association, and has paid attention to the operation of the
Company, and all professional opinions rendered by such independent director have been accepted, and played an active role in
perfecting the Company’s supervisory mechanism and improving the scientificity of decision-making system
.
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
VII. Performance of Duties by Special Committees under the Board of Directors during the Reporting Period
Name of Number of Key opinions and suggestions rendered at the
Name of committee Convening date Content of meeting Fulfillment of responsibilities
member(s) meeting(s) meeting
The Resolutions on Payment of 2020
The audit committee has carried out our work in The audit committee held audit
Annual Audit Remuneration to and
a diligent and responsible manner, and adopted communication meetings on
2021 Renewal of Retention of
the relevant resolutions upon consensus through January 21, March 30 and
Pan-China Certified Public
LIN Shu, WANG thorough discussions in strict accordance with the April 12, 2021 respectively,
Audit committee of Accountants (Special General
Zhangzhong and 1 April 13, 2021 Company Law, the Securities Law, the Code of and listened to the pre-event,
board of directors Partnership), the Self-Assessment
SHAN Jianbin Corporate Governance of Listed Companies and mid-event and post-event facts
Report 2020 Regarding Internal
other pertinent laws and regulations, as well as subject to annual audit by
Control and the Resolution on Changes
the Articles of Association and the Working Rules accountants who prepare this
to Accounting Policies were passed
of Audit Committee of Board of Directors. annual report.
through deliberation
The remuneration and assessment committee has
carried out our work in a diligent and responsible
YUAN manner, and adopted the relevant resolutions
Yonggang, upon consensus through thorough discussions in
Remuneration and The Resolution on Remuneration of
YUAN Yongfeng, strict accordance with the Company Law, the
assessment the Company’s Directors and Senior
WANG 1 April 13, 2021 Securities Law, the Code of Corporate
committee of board Officers in 2021 was passed through
Zhangzhong, Governance of Listed Companies and other
of directors deliberation
SONG Liguo and pertinent laws and regulations, as well as the
LIN Shu Articles of Association and the Implementation
Rules of Remuneration and Assessment
Committee of Board of Directors.
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
VIII. Work of Board of Supervisors
Has the board of supervisors discovered the Company’s risk exposures in conducting monitoring activities during the reporting
period?
□ Yes √ No
The board of supervisors has not raised any objection to the matters under our supervision during the reporting period.
IX. Information about the Company’s Employees
1. Number, composition by profession and degree of education of employees
Number of incumbent employees in the parent company at the end of the reporting period 1,667
Number of incumbent employees in major subsidiary at the end of the reporting period 18,295
Total number of incumbent employees at the end of the reporting period 19,962
Total number of employees receiving remuneration during the current period 19,962
Number of retired employees to whom the parent and key subsidiaries are required to pay retirement benefits 0
Composition by profession
Number of
Type of professionals
professionals
Production personnel 14,041
Sales personnel 395
Technical personnel 3,699
Financial personnel 132
Administrative personnel 442
Management personnel 1,253
Total 19,962
Degree of education
Number of
Classification of degree of education
professionals
Doctoral degree 5
Master’s degree 110
Bachelor’s degree 2,058
Associate degree 3,570
Below associate degree 14,219
Total 19,962
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
2. Remuneration policy
The Company advocates value creation, and the remuneration mechanism is tilted towards efficiency creation. The Company
implements a flexible remuneration policy, and has been improving the performance assessment and incentive scheme of our team.
The Company provides our employees with competitive remuneration and benefits in the same industry based on their respective
positions, responsibilities, capabilities and contributions, and makes remuneration adjustments in due time depending on the level of
economic development and industry wage of the operational performance reference region.
3. Training programs
The Company attaches great importance to the development, cultivation and training of talents, and strives to create opportunities for
self-challenges and continuous study and growth for each employee. The Company encourages our employees to keep studying, and
improve their competency and professional capability, and improve personal self-growth and career development, so as to fully
enhance the overall quality and capacity of the workforce. The Company has formulated a targeted training program to improve the
work performance of our employees, boost both our growth and the growth of our employees, strengthen our centripetal force and
cohesion, and create a good learning atmosphere, an excellent corporate culture and a learning-oriented organization. The Company
practices the talent cultivation concept of “openness, inclusiveness and pragmatism”, and helps outstanding employees achieve the
sustainable development of their career through talent search and cultivation.
X. Profit Distribution and Conversion of Capital Reserve into Share Capital
Profit distribution policy during the reporting period, in particular the formulation, implementation or adjustment of cash bonus
policy
√ Applicable □ N/A
The Company implements a profit distribution policy in a continuous and steady manner, attaches great importance to reasonable
investment return of investors by taking into account our sustainable growth, proactively implements the policies and requirements of
the securities regulator governing cash dividends of listed companies, ensures our shareholders receive stable and consistent
investment returns, and adequately protects the legitimate rights and interests of small and medium investors. In 2021, the board of
directors of the Company formulated the Annual Profit Distribution Plan 2021 based on our operating conditions and profit
distribution principles by ensuring compliance with applicable laws and regulations and our normal operation and long-term
development.
Special explanation of cash dividend policy
Whether it complies with the provisions of the Company’s articles of association or the requirements of the
Yes
resolution of the shareholders’ meeting:
Whether the dividend standard and dividend ratio are clear: Yes
Whether the relevant decision-making procedures and mechanisms are complete: Yes
Whether independent directors performed their duties and played their due roles: Yes
Whether minority shareholders have the opportunity to fully express their opinions and demands, and
Yes
whether their legitimate rights and interests are fully protected:
If the cash dividend policy is adjusted or changed, whether the conditions and procedures are compliant and
Yes
transparent:
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
The Company was profitable during the reporting period, and the parent company had positive profits distributable to shareholders
but has not put forward a cash dividend distribution plan
□ Applicable √ N/A
Profit distribution and conversion of capital reserve into share capital during the current reporting period
√ Applicable □ N/A
Bonus issue per 10 shares (share) 0
Cash dividend per 10 shares (RMB) (tax inclusive) 2.00
Total capital shares as the basis for the distribution proposal (share) 1,705,913,710
Amount of cash dividends (RMB) (tax inclusive) 341,182,742.00
Amount of cash dividends distributed by any other means (e.g. share repurchase) (RMB) 100,479,794.32
Total amount of cash dividends (including those distributed by any other means) (RMB) 441,662,536.32
Distributable profits (RMB) 352,818,601.06
Percentage of the total amount of cash dividends (including those distributed by any other
100%
means) in the total amount of distributable profits
Current cash dividend
If the Company is still in the growth phase and has major capital expenditure arrangements, in making any profit distribution, the
percentage of cash dividends in current profit distribution shall be at least 20%.
Detailed explanation on profit distribution plan or plan for conversion of capital reserve into share capital
Under the annual distribution plan 2021 of the Company, based on 1,705,913,710 shares, a cash dividend of RMB 2 (inclusive of
tax) for per 10 shares shall be distributed to all shareholders, and no bonus share shall be distributed, and no capital reserve shall be
converted into share capital. This distribution plan conforms to the provisions of the Articles of Association, and will be submitted
to the board of shareholders of the Company for deliberation. In connection with the share repurchase implemented by the
Company, subject to applicable regulations, the shares in the dedicated account for share repurchase of the Company are not
included in this equity distribution.
XI. Implementation of the Company’s Stock Incentive Plan, Employee Stock Ownership Plan
or Other Employee Incentives
√ Applicable □ N/A
1. Stock incentive
The Company has not implemented any stock incentive plan during the reporting period
Stock incentives granted to the Company's directors and senior officers
□ Applicable √ N/A
Assessment mechanism of and incentives granted to senior officers
The Company has not implemented any stock incentive plan during the reporting period
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
2. Implementation of employee stock ownership plan
√ Applicable □ N/A
All effective employee stock ownership plans during the reporting period
Percentage in the
Number of Total number Funding sources of
Scope of employees Changes total equity of the
employees of stocks held implementation plan
listed company
The source of funds for this
Certain directors, supervisors and employee stock ownership plan is
senior officers of the Company, and the legal remuneration of the
certain mid and high-level Company’s employees and their
management and core backbone self-raised funds and other legal
21.9141
above the director level who take 119 None 1.28% funds permitted by applicable
million shares
full-time jobs at, receive laws and regulations. The
remuneration from and enter into Company has not provided any
labor contracts with the Company and financial assistance to our
our controlling subsidiaries. employees or provided security
for their loans.
Shareholding of directors, supervisors and senior officers under the employee stock ownership plan during the reporting period
Number of shares held at Number of shares held at Percentage in the total
Name Job title the beginning of the the end of the reporting equity of the listed
reporting period period company
SHAN Jianbin Director & CEO 0 1,753,128 0.10%
Director, Deputy General
WANG Xu 0 1,314,846 0.08%
Manager & CFO
Director, Deputy General
MAO Xiaoyan 0 525,938 0.03%
Manager & Board Secretary
Chairman of board of
MA Liqiang 0 525,938 0.03%
supervisors
JI Yachun Supervisor 0 525,938 0.03%
HUANG Yongxin Supervisor 0 525,938 0.03%
Change of asset management company during the reporting period
□ Applicable √ N/A
Equity change resulting from any holder’s disposal of shares during the reporting period
□ Applicable √ N/A
Exercise of shareholders’ rights during the reporting period
During the reporting period, all participants in the Company’s employee stock ownership plan exercised their right in the capacity as
shareholder to participate in 2020 cash dividend distribution, but have not exercised the voting rights of the Company’s board of
shareholders and other shareholder rights.
Other relevant facts and description of the employee stock ownership plan during the reporting period
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
□ Applicable √ N/A
Change of members of management committee of employee stock ownership plan
□ Applicable √ N/A
Impact of employee stock ownership plan on the financial affairs of the listed company during the reporting period and
relevant accounting treatment
□ Applicable √ N/A
Termination of the employee stock ownership plan during the reporting period
□ Applicable √ N/A
Other notes
As of the end of the current reporting period, the Company’s employee stock ownership plan 2021 was in the lock-up period.
3. Other employee incentives
□ Applicable √ N/A
XII. Improvement and Implementation of Internal Control System during the Reporting
Period
1. Improvement and implementation of internal control system
The Company has established the legal person governance structure and rules of procedure for our board of shareholders, board of
directors, board of supervisors and management in accordance with the Company Law, the Securities Law and other pertinent laws
and administrative regulations, and has formed a scientific and effective mechanism for work division and balancing. The board of
shareholders is the highest authority of the Company, and the board of directors implements the resolutions of the board of
shareholders, is responsible to the board of shareholders and exercises the decision-making power of the Company by law. The
strategy committee, audit committee, remuneration and assessment committee and nomination committee under the board of
directors of the Company have diligently performed their respective responsibilities and fully played their professional roles in
managing our business in accordance with their respective working rules.
The Company has established an independent internal audit department, primarily responsible for establishing and implementing our
internal control system, inspecting and supervising the truthfulness, completeness and other aspects of financial information,
rendering improvement suggestions, supervising and urging the relevant personnel to rectify problems discovered in the audit,
cooperating with the audit committee of the board of directors to conduct internal control and self-assessment, and examining the
effectiveness of our internal control procedures. The internal audit department is responsible and reports to the audit committee.
Based on the determination result of major deficiencies in the Company’s internal control over financial reporting, on the benchmark
date of the internal control evaluation report, there is no major deficiency in the Company’s internal control over financial reporting,
and the Company has maintained effective internal control over financial reporting in all material respects in accordance with our
standard system for internal control and the requirements of applicable regulations; based on the determination result of major
deficiencies in the Company’s internal control over non-financial reporting, on the benchmark date of the internal control evaluation
report, no major deficiency in internal control over non-financial reporting has been identified.
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
2. Particulars of major deficiencies in internal control identified during the reporting period
□ Yes √ No
XIII. Management and Control of Subsidiaries during the Reporting Period of the Company
Consolidation Consolidation Problems encountered Solutions Subsequent
Company name Solution progress
plan progress in the consolidation adopted solution
N/A N/A N/A N/A N/A N/A N/A
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
XIV. Internal Control Self-Assessment Report or Internal Control Attestation Report
1. Internal control self-assessment report
Date of disclosure of the full text of internal control
April 20, 2022
self-assessment report
Index of the full text of internal control self-assessment
http://www.cninfo.com.cn
report
Percentage of the total assets of the entity included in the
scope of assessment in the total assets in the consolidated 100.00%
financial statements of the Company
Percentage of the operating revenue of the entity included in
the scope of assessment in the operating revenue in the 100.00%
consolidated financial statements of the Company
Deficiency determination standard
Type Financial reporting Non-financial reporting
Indications of major deficiency in financial reporting include: (1)
The occurrence of any of the following circumstances
malpractices committed by directors, supervisors or senior officers of the
is determined to be a major deficiency, including: (1)
Company; (2) the Company’s revision of financial reports that had been
violation of national laws or regulations or normative
published; (3) any significant misstatement in current financial reports as
documents; (2) lack of scientificity of key
discovered by certified public accountants but not identified through the
decision-making procedures; (3) lack of system which
internal control of the Company; (4) the audit committee and internal audit
Qualitative standard might cause systematic failure; (4) failure to rectify any
department exert ineffective supervision over the Company’s financial
major or significant deficiency; and (5) any other
reporting and internal control over financial reporting. Indications of
circumstance that has a material adverse effect on the
significant deficiency in financial reporting: (1) failure to accurately select
Company. Other circumstances are determined to be
and apply accounting policies in accordance with generally accepted
significant deficiencies or general deficiencies
accounting standards; (2) failure to establish anti-malpractice procedures
depending on the degree of impact.
and controls; (3) failure to establish a corresponding control mechanism for
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
non-regular or special transactions, or failure to implement and absence of
corresponding compensatory controls; and (4) one or more deficiencies in
the control over end-of-period financial reporting, and no reasonable
assurance that the financial statements prepared achieve true and complete
objectives. General deficiency means any other control deficiency other
than the said major and significant deficiencies.
The quantitative standard for the level of significance of any misstatement Quantitative standard for the assessment of deficiencies
(including omission) contained in the consolidated financial statements of in internal control over non-financial reporting as
the listed company based on the data contained in the consolidated determined by the Company is as follows: Major
Quantitative standard financial statement 2021. Major deficiency: Incorrect amount ≥ operating deficiency: Amount of direct loss＞total assets*0.5%
revenue*0.5% Significant deficiency: Operating revenue *0.3% ≤ incorrect Significant deficiency: Total assets*0.2%＜amount of
amount＜operating revenue*0.5% General deficiency: Incorrect amount＜ direct loss ≤ total assets*0.5% General deficiency:
operating revenue*0.3% Amount off direct loss ≤ total assets*0.2%
Number of major deficiencies in internal control over
0
financial reporting
Number of major deficiencies in internal control over
0
non-financial reporting
Number of significant deficiencies in internal control over
0
financial reporting
Number of significant deficiencies in internal control over
0
non-financial reporting
2. Internal control attestation report
√ Applicable □ N/A
Deliberative opinions in the internal control attestation report
We believe that, DSBJ maintained effective internal control over financial reporting in all material respects on December 31, 2021 in accordance with the provisions of the Shenzhen Stock
Exchange Self-Regulatory Supervision Guidelines for Listed Companies (No.1)-Standardized Operations of Companies Listed on the Main Board (Shen Zheng Shang [2022] No.13).
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Disclosure of internal control attestation report Disclosed
Date of disclosure of the full text of internal control attestation report April 20, 2022
Index of the full text of internal control attestation report http://www.cninfo.com.cn
Type of opinions rendered in the internal control attestation report Standard unqualified opinions
Was there any major deficiency in internal control over non-financial reporting? No
Has the accounting firm issued any internal control audit report that contains non-standard opinions?
□ Yes √ No
Is the internal control audit report issued by the accounting firm consistent with the opinions in the self-assessment report issued by the board of directors
√ Yes □ No
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Section V Environmental and Social Responsibility
I. Major Environmental Issues
Are the listed company and its subsidiaries included in the list of key pollutant discharge units published by the environmental protection authority?
√ Yes □ No
Name of company or Name of key pollutant and Discharge Number of Distribution of Discharge Pollutant discharge Total quantity Total quantity of Excessive
subsidiary characteristic pollutant method discharge outlets discharge outlets density standards implemented of discharge authorized discharge emission
Continuous Interior of factory
COD 1 15.25mg/l 160mg/L 34.055 t 242.36t None
discharge premises
Multek Industries, Continuous Interior of factory
Ammonia nitrogen 1 1.204mg/l 30mg/L 2.78 t 45.44t None
Multek Electronics discharge premises
and Multek Continuous Interior of factory
Total nitrogen 1 8.04.mg/l 40mg/L 17.15t 95.238t None
Technology discharge premises
Discontinuous Interior of factory
Total nickel 1 0.017mg/l 0.5mg/L 0.0385t 0.055t None
discharge premises
Continuous Interior of factory
COD 1 11.75mg/L 160mg/L 4.237 t 33.643t None
discharge premises
Continuous Interior of factory
Ammonia nitrogen 1 2.257mg/L 30mg/L 0.803t 6.308t None
discharge premises
Multek Zhuhai
Continuous Interior of factory
Total nitrogen 1 7.5mg/L 40mg/L 2.646t 28.6748t None
discharge premises
Discontinuous Interior of factory
Total nickel 1 0.0119mg/L 0.5mg/L 0.00415t 0.358t None
discharge premises
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Continuous Interior of factory
COD 1 40mg/L 160mg/L 35.63t 216.372t None
discharge premises
Continuous Interior of factory
Ammonia nitrogen 1 8.02mg/L 30mg/L 7.207 t 40.56975t None
discharge premises
Continuous Interior of factory
Multek China Total nitrogen 1 16.09mg/L 40mg/L 14.452t 54.093t None
discharge premises
Discontinuous Interior of factory
Total nickel 1 0.01mg/L 0.5mg/L 0.0096 t 1.352325t None
discharge premises
Discontinuous Interior of factory
Total silver 1 0.0064mg/L 0.1mg/L 0.00554t 0.270465t None
discharge premises
Continuous Southwest side of
Particles 1 1.5mg/m3 120mg/m3 0.01083t/a / None
discharge factory premises
Continuous Southwest side of
YCMT Nitric oxide 1 8mg/m3 150mg/m3 0.16604 t/a / None
discharge factory premises
Continuous Southwest side of
Sulfur dioxide 1 23mg/m3 50mg/m3 0.05792 t/a / None
discharge factory premises
Suzhou Chengjia
Precision Continuous Northwest side of
Non-methane hydrocarbon 1 2mg/m3 120mg/m3 0.023 t/a / None
Manufacturing Co., discharge factory premises
Ltd.
Wastewater
discharge outlet
Indirect
COD 1 at the southwest 52mg/L 500mg/L 12.9372t 188.745t None
discharge
Yancheng Dongshan side of factory
premises
Indirect Wastewater
Ammonia nitrogen 1 11mg/L 35mg/L 2.5846t 11.91t None
discharge discharge outlet
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
at the southwest
side of factory
premises
Wastewater
discharge outlet
Indirect
Total nickel 1 at the southwest 0.05mg/L 0.5mg/L 0.01t 0.0057t None
discharge
side of factory
premises
Hydrogen chloride Organized 2 5#roof 1.24mg/m3 30mg/m3 0.1222t 0.412t None
5#Roof, roof of
Hydrogen cyanide Organized 4 28# wastewater 0.05mg/m3 0.5mg/m3 0.008t 0.059t None
treatment plant
Continuous Interior of factory
COD 1 96.32mg/l 500mg/L 49.1521t 717.828t None
discharge premises
Continuous Interior of factory
Ammonia nitrogen 1 2.18mg/l 35mg/L 1.0803t 65.402t None
discharge premises
MFLEX Yancheng
Continuous Interior of factory
Total phosphorus 1 0.72mg/l 3.5mg/L 0.3546t 6.46t None
discharge premises
Continuous Interior of factory
Total nitrogen 1 6.29 mg/l 40mg/L 3.2096t 72.58t None
discharge premises
Continuous Interior of factory
COD 1 142mg/l 500mg/L 78.239t 152.5t None
discharge premises
Continuous Interior of factory
MFLEX Suzhou (two Ammonia nitrogen 1 3.18mg/l 25mg/L 2.05t 3.413t None
discharge premises
factory premises)
Continuous Interior of factory
Total copper 1 0.117.mg/l 0.3mg/L 0.005t 0.319t None
discharge premises
Total nickel Continuous 1 Interior of factory ND 0.1mg/L ND 0.010652t None
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
discharge premises
Continuous Interior of factory
COD 1 126.7mg/l 500mg/L 0.974 t 92.893t None
discharge premises
Continuous Interior of factory
Ammonia nitrogen 1 3.603mg/l 30mg/L 0.156 t 7.963t None
discharge premises
Construction and operation of pollution prevention facilities
The Company and its subsidiaries have a complete solution for waste gas and wastewater treatment, and are equipped with a full set of pollution control facilities to be operated and maintained
on their own or on their behalf. The Company has arranged for dedicated personnel to supervise equipment operation and pollutant discharge, and to regularly maintain and repair pollution
prevention and control facilities. Currently, such facilities are in good condition.
Environmental impact assessment of construction projects and other administrative licenses for environmental protection
The Company and its subsidiaries have submitted filings with respect to new, alteration and expansion projects in strict accordance with applicable laws and regulations, requested a pollutant
discharge permit as required, and periodically monitored the completion of implementation report.
Environmental emergency response plan
The Company and its subsidiaries have formulated an environmental emergency response plan, obtained a filing receipt and conducted regular drills in accordance with the requirements of
applicable laws and regulations.
Environmental monitoring plan
The Company and its subsidiaries have formulated an environmental monitoring plan by using automatic monitoring equipment, and entrusted a qualified third party to regularly test wastewater,
waste gas, noise, underground water and soil.
Administrative penalties imposed due to environmental issues during the reporting period
N/A
Other environmental information that should be made public
None
Measures taken to reduce carbon emissions during the reporting period and the effect thereof
√ Applicable □ N/A
Please refer to the Social Responsibility Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd. disclosed on http://www.cninfo.com.cn/ on the date of this report.
Other information relating to environmental protection
Please refer to the Social Responsibility Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd. disclosed on http://www.cninfo.com.cn/ on the date of this report.
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
II. Social Responsibility
Please refer to the Social Responsibility Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd. disclosed on http://www.cninfo.com.cn/ on the date of this report.
III. Strengthen and Expand Poverty Alleviation Achievements and Rural Revitalization
Please refer to the Social Responsibility Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd. disclosed on http://www.cninfo.com.cn/ on the date of this report.
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Section VI Significant Events
I. Performance of Commitments
1. Complete and incomplete commitments of the Company and its actual controller, shareholders, related parties, acquirers, and other related parties for the
commitments by the end of the reporting period.
√ Applicable □ N/A
Giver of Date of Term of
Commitments Commitment type Details of commitments Performance
commitments commitments commitments
Each of shareholders YUAN Yonggang and YUAN Yongfeng who
serve as directors and senior officers of the Company undertake that
the number of shares that may be transferred each year during his
term of office shall not exceed 25% of the total number of shares
YUAN As of the end of the current
Commitment to held by him or her in the Company, and that no shares of the The commitment
Yongfeng; reporting period, the party
impose restrictions Company held by him shall be transferred within six (6) months of April 9, 2010 continues to have
YUAN giving commitment has
on sale of shares his termination of office. The number of shares of the Company binding force
Commitments given at Yonggang fulfilled such commitment
sold by him or her through listing and trading on the stock exchange
the time of initial public
within twelve (12) months following the expiration of six (6)
offering or refinancing
months of his or her departure shall not exceed 50% of the total
number of shares held by him or her in the Company.
YUAN Commitments on Commitment on horizontal competition: Each of shareholders
As of the end of the current
Yongfeng; horizontal YUAN Yonggang, YUAN Yongfeng and YUAN Fugen undertakes The commitment
reporting period, the party
YUAN competition, related that: I have not directly or indirectly conducted any business in April 9, 2010 continues to have
giving commitment has
Yonggang; transactions and use competition with the business actually conducted by the joint-stock binding force
fulfilled such commitment
YUAN Fugen of funds company.
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Commitment to avoid horizontal competition: Each of shareholders
YUAN Yonggang, YUAN Yongfeng and YUAN Fugen undertakes
that: upon completion of the major asset restructuring, I will not
directly or indirectly through any of his affiliates participate in or
conduct any business activity that materially competes with or is
likely to materially compete with the business conducted by DSBJ.
In the event that any product to be manufactured or business to be
YUAN Fugen; Commitments on conducted by any enterprise wholly-owned, held or participated by
As of the end of the current
YUAN horizontal me competes or is likely to compete with the product or business of The commitment
June 11, reporting period, the party
Yongfeng; competition, related DSBJ, upon DSBJ’s request, I undertake to assign all of my capital continues to have
2018 giving commitment has
YUAN transactions and use contributions to or shares in such enterprise, and undertake to grant binding force
fulfilled such commitment
Yonggang of funds DSBJ or any of its wholly-owned subsidiaries the right of first
refusal with respect to such capital contributions or shares, and will
make my best efforts to cause the price of the relevant transaction to
be determined based on fair, reasonable and normal business
transactions with an independent third party. If the interests of
DSBJ or any other shareholder are damaged due to my violation or
any of my affiliates’ breach of the commitments, I will assume the
liability for compensation by law.
Commitment on regulating and reducing related party transactions:
Each of shareholders YUAN Yonggang, YUAN Yongfeng and
YUAN Fugen undertakes that: 1. I will and cause my affiliates to
YUAN Fugen; Commitments on avoid or reduce related party transactions with DSBJ to the
YUAN horizontal maximum extent. 2. For any related party transactions that cannot The commitment
June 11,
Yongfeng; competition, related be avoided or is doomed to happen, I undertake to duly execute continues to have b
2018
YUAN transactions and use agreements based on the principles of justness, fairness and binding force
Yonggang of funds openness, perform legitimate procedures in accordance with
applicable laws and regulations, normative documents and the
Articles of Association of DSBJ, guarantee the fairness and
compliance of related party transactions, ensure that related party
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
transactions will not damage the legitimate rights and interests of
DSBJ and other shareholders, and make timely information
disclosure in accordance with the requirements of applicable laws
and regulations and normative documents. 3. I will exercise
shareholder rights in accordance with the Company Law and other
laws and regulations as well as the Articles of Association of DSBJ;
when DSBJ’s board of shareholders votes on any related party
transactions conducted by me or any enterprise under my control, I
will perform the obligation to abstain from voting in accordance
with the relevant regulations.
Commitment to take measures to recover the current returns diluted
as a result of non-public offering of stocks: Each of the directors
and senior officers of the Company undertakes as follows: 1. I
undertake not to transfer interests to any other entity or individual
YUAN on a gratuitous or unfair basis, or to otherwise damage the interests
Yongfeng; of the Company. 2. I undertake to restrain my job-related
YUAN consumption behavior. 3. I undertake not to use the Company’s
Yonggang; assets to engage in any investment or consumption activity
ZHAO unrelated to my job duties. 4. I undertake that the remuneration As of the end of the current
The commitment
Xiutian; system formulated by the board of directors or remuneration October 10, reporting period, the party
Other commitments continues to have
SHAN committee is linked with the implementation of the Company’s 2019 giving commitment has
binding force
Jianbin; return recovery measures. 5. If the Company proposes to implement fulfilled such commitment
WANG Xu; its stock incentive plan in the future, I undertake to link the vesting
MAO conditions of such stock incentive plan with the implementation of
Xiaoyan; MA the return recovery measures by the Company. 6. I undertake to
Liqiang effectively fulfill the current return recovery measures formulated
by the Company and my commitments regarding current return
recovery measures. In the event that I am in violation of such
commitments and thus cause losses to investors, I am willing to
duly assume the liability for compensation to the Company or its
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
investors and accept punishments imposed by the regulatory
authority.
Commitment to take measures to recover the current return diluted
as a result of non-public offering of stocks: the controlling
shareholder and actual controller undertake as follows: as the
YUAN Fugen;
controlling shareholder and actual controller of Suzhou Dongshan As of the end of the current
YUAN The commitment
Precision Manufacturing Co., Ltd., I undertake not to act beyond October 17, reporting period, the party
Yongfeng; Other commitments continues to have
my authority to intervene in operating management activities of the 2019 giving commitment has
YUAN binding force
Company, nor to misappropriate interests of the Company. As the fulfilled such commitment
Yonggang
party responsible for the effective recovery of the current return
diluted as a result of non-public offering, I am willing to assume
legal liabilities for failure or refusal to fulfill the said commitments.
Commitment on payment term of the remaining transfer price of the
large format display business assets and interest thereon (the
“Target Indebtedness”): Each of YUAN Yonggang and YUAN
Yongfeng undertakes as follows: (1) I will cause Shenzhen As of the end of the current
Dongshan to, subject to the provisions of the Supplemental reporting period, Shenzhen
Agreement: A. pay the principal amount of RMB 100 million and Dongshan has promptly
interest thereon prior to June 30, 2020, and the principal amount of fulfilled the relevant
Commitments on
Other commitments to YUAN RMB 132 million and interest thereon prior to December 31, 2020, payment obligation in
horizontal
small and medium Yongfeng; and complete the payment of the total principal amount of RMB December 31, accordance with the
competition, related April 2, 2020
shareholders of the YUAN 232 million (accounting for 30% of the principal amount of the 2021 provisions of the
transactions and use
Company Yonggang Target Indebtedness) and interest thereon in 2020; B. pay the Supplemental Agreement.
of funds
principal amount of RMB 539,893,189.16 and interest thereon prior As of the end of the current
to December 31, 2021, and complete the payment of the total reporting period, the
principal amount of RMB 771,893,189.16 and interest thereon in commitment has been
2021; C. pay the interest on the principal amount of the outstanding fulfilled.
Target Indebtedness at one-year LPR (4.20%) published by the
People's Bank of China in September 2019 from the interest
commencement date (September 18, 2019); (2) If Shenzhen
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Dongshan fails to timely repay the indebtedness to Dongguan
Dongshan according to the payment schedule set forth in the
Supplemental Agreement, the person acting in concert and I will
promptly and duly reduce the shares of DSBJ and will firstly use
the proceeds from share reduction to fully repay the outstanding
indebtedness to Dongguan Dongshan, so as to ensure the Target
Indebtedness be repaid according to the payment schedule set forth
in the Supplemental Agreement.
Has the commitment
been promptly Yes
performed?
If the commitment fails
to be fulfilled within a
prescribed period of
time, explain in details N/A
the reason for such
failure and future action
plan
2. If there is a profit forecast for the assets or projects of the Company and the reporting period is still in the profit forecast period, the Company shall explain why
the assets or projects meet the original profit forecast.
□ Applicable √ N/A
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
II. Use of Funds of the Listed Company by Controlling Shareholder and Other Affiliates for
Non-Operating Purposes
There was no use of the funds of the listed company by controlling shareholder and other affiliates for non-operating purposes during
the reporting period of the Company.
III. Illegal External Security
There was no illegal external security during the reporting period of the Company.
IV. Board of Directors’ Description of the Most Recent “Non-Standard Audit Report”
□ Applicable √ N/A
V. Statement of Board of Directors, Board of Supervisors and Independent Directors (if any)
on the “Non-Standard Audit Report” Issued by the Accounting Firm during the Reporting
Period
□ Applicable √ N/A
VI. Description of Changes in Accounting Policies and Accounting Estimates or Corrections
of Significant Accounting Errors in Comparison to the Financial Reports of the Previous Year
√ Applicable □ N/A
The Ministry of Finance of the People’s Republic of China (the “MOF”) issued the Accounting Standards for Enterprises No.21 -
Leases (Cai Kuai [2018] No.35) (the “New Lease Standards”) in December 2018. Subject to the requirements of the MOF, the
Company began to implement the New Lease Standards from January 1, 2021, and amended the accounting policies accordingly.
According to the linkage regulations, the Company has not adjusted the information of the comparable period, but retrospectively
adjusted the retained earnings at the beginning of the current reporting period based on the difference between the New Lease
Standards implemented on the first day and the current standards. The said changes in accounting policies were deliberated and
approved at the tenth meeting of the fifth board of directors and the eighth meeting of the fifth board of supervisors of the Company,
as detailed in the information disclosure media designated by the Company.
VII. Description of Changes in the Scope of Consolidated Financial Statements in Comparison
with the Financial Reports of the Previous Year
√ Applicable □ N/A
1. Expansion of consolidation scope
Company name Method of stock Stock acquisition time
acquisition
Suzhou Dongchen Intelligent Equipment Manufacturing Co., Ltd. Through investment November 30, 2021
Shanghai Dongxin New Energy Technology Co., Ltd. Through investment August 27, 2021
Shanghai Donglan New Energy Technology Co., Ltd. Through investment November 1, 2021
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Hainan Chengjia Technology Consulting Co., Ltd. Through investment May 14, 2021
2. Reduction in consolidation scope
Company name Stock disposal method Stock disposal time
Chongqing Chengjia Precision Electronic Technology Co., Ltd. Canceled January 29, 2021
Dongguan Xindong Intelligent Technology Co., Ltd. Loss of control August 31, 2021
DSBJ FINLAND OY Canceled December 31, 2021
Suzhou Dongshan Precision Technology Co., Ltd. Canceled November 16, 2021
VIII. Appointment and Dismissal of Accounting Firm
Current accounting firm
Pan-China Certified Public Accountants (Special
Name of domestic accounting firm
General Partnership)
Compensation to domestic accounting firm (RMB 0’000) 210
Continuous length of audit services of domestic accounting firm 11 years
Name of certified public accounts of domestic accounting firm SUN Tao and HUANG Zhenshuang
Continuous length of audit services of certified public accountants at the
1 year; 1 year
domestic accounting firm
Was there any replacement of the accounting firm during the current reporting period?
□ Yes √ No
Engagement of accounting firm, financial advisor or sponsor for internal control audit
√ Applicable □ N/A
1. During the reporting period, the Company engaged Pan-China Certified Public Accountants (Special General Partnership) as the
internal control auditor responsible for the internal control audit work of the Company in 2021.
2. During the reporting period, the Company engaged TF Securities Co., Ltd. as the sponsor of non-public offering of A shares in
2020.
IX. Delisting After Disclosure of Annual Report
□ Applicable √ N/A
X. Matters Relating to Bankruptcy Reorganization
□ Applicable √ N/A
The Company was not involved in bankruptcy reorganization during the reporting period.
XI. Major Litigation and Arbitration Matters
□ Applicable √ N/A
The Company was not involved in any major lawsuit or arbitration proceeding during the current reporting period.
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
XII. Punishments and Rectifications
□ Applicable √ N/A
The Company was not punished or made rectifications during the reporting period.
XIII. Credit Condition of the Company and its Controlling Shareholder and Actual
Controller
□ Applicable √ N/A
XIV. Material Related Party Transactions
1. Related party transactions relating to day-t0-day operations
□ Applicable √ N/A
No related party transactions occurred in connection with day-to-day operations during the reporting period of the Company.
2. Related party transactions relating to acquisition or sale of assets or stocks
□ Applicable √ N/A
No related party transactions relating to acquisition or sale of assets or stocks occurred during the reporting period of the Company.
3. Related party transactions relating to joint foreign investment
□ Applicable √ N/A
No related party transactions relating to joint foreign investment occurred during the reporting period of the Company.
4. Related claims and debts
□ Applicable √ N/A
There were no related claims and debts during the reporting period of the Company.
5. Transactions with financial company affiliated with the Company
□ Applicable √ N/A
There was no deposit, loan, facility or other financing business between the Company and any financial company affiliated with it or
any of its affiliates.
6. Transactions between the financial company held by the Company and any of its affiliates
□ Applicable √ N/A
There was no deposit, loan, facility or other financing business between the financial company held by the Company and any of its
affiliates.
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
7. Other material related party transactions
√ Applicable □ N/A
Transfer of assets relating to large format display business:
In order to implement the business strategy of the Company’s primary business, the Company sold to YUAN Yonggang, YUAN
Yongfeng or any third party designated by him, being Shenzhen Dongshan Precision Manufacturing Co., Ltd. (“Shenzhen
Dongshan”), the assets relating to large format display business and other non-core businesses, so as to further optimize industry
landscape, consolidate the Company’s resources, and improve its operation efficiency. On July 12, 2018 and August 10, 2018, the
Company and its controlling shareholder and actual controller YUAN Yonggang and YUAN Yongfeng entered into the Agreement of
Intent on Transfer of Assets Relating to Large Format Display Business and the Equity Transfer Agreement (the “Asset Transfer
Agreements”). In accordance with the Asset Transfer Agreements, the Company sold to Shenzhen Dongshan the group’s asset
relating to large format display business, and transferred 100% equity of Shenzhen Dongshan held by it to Dongyang Investment
jointly controlled by YUAN Yonggang and YUAN Yongfeng, so as to effect the sale of the assets relating to the said non-core
business. The sale was deliberated and approved by the board of directors and board of shareholders of the Company. The relevant
directors and shareholders abstained from voting. As of December 31, 2019, Shenzhen Dongshan owed to Dongguan Dongshan the
outstanding principal amount of RMB 771.8932million of the transfer price of the asset relating to large format display business and
interest thereon (the “Target Indebtedness” or the “Target Claims”).
On December 30, 2019 and January 20, 2020, the Company’s wholly-owned subsidiary Dongguan Dongshan, Shenzhen Dongshan
and the Company’s controlling shareholder and actual controller YUAN Yonggang entered into the Asset Purchase Agreement and
the Supplemental Agreement to Asset Purchase Agreement (collectively the “Original Agreements”). Dongguan Dongshan proposed
to purchase from Shenzhen Dongshan 99.9944% capital contributed to Ningbo Meishan Bonded Port District Yimusheng Investment
Partnership (Limited Partnership) (“Ningbo Yimusheng”) at a consideration paid in the form of the Target Claims held by Dongguan
Dongshan against Shenzhen Dongshan, in which case any shortfall shall be made good in cash. The sale was deliberated and
approved by the board of directors and board of shareholders of the Company. The relevant directors and shareholders abstained from
voting.
On March 23, 2020, since the general partner of Ningbo Yimusheng was accelerating the withdrawal of fund units based on the
interests of all partners, the general partner of Ningbo Yimusheng did not agree to the Original Agreements, and the Original
Agreement was terminated on the same day.
In order for Shenzhen Dongshan to timely repay the Target Indebtedness and guarantee the interests of the listed company, after
comprehensive consideration of all such factors as actual condition of assets and liabilities of Shenzhen Dongshan and the
Company’s controlling shareholder, the overall market environment of financial leverage reduction and the Covid-19’s impact on the
capital market, the Company, Dongguan Dongshan, YUAN Yonggang, YUAN Yongfeng and Shenzhen Dongshan executed the
Supplemental Agreement to the Asset Transfer Agreement (the “Supplemental Agreement”) upon deliberation and approval at the
fifty-seventh meeting of the fourth session of the board of directors of the Company and the third extraordinary shareholders’
meeting in 2019, and the parties hereby agree to make the following arrangement with respect to the Target Indebtedness:
(1) Shenzhen Dongshan shall repay to Dongguan Dongshan the principal amount of RMB 100 million and interest thereon prior to
June 30, 2020, and the principal amount of RMB 132 million and interest thereon prior to December 31, 2020, and shall complete the
payment of the total principal amount of RMB 232 million (accounting for 30% of the principal amount of the Target Indebtedness)
and interest thereon in 2020;
(2) Shenzhen Dongshan shall repay to Dongguan Dongshan the principal amount of RMB 539,893,189.16 and interest thereon prior
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
to December 31, 2021, and shall complete the payment of the total principal amount of RMB 771,893,189.16 and interest thereon in
2021;
(3) During the continuance and extension of the Target Indebtedness, the interest on the Target Indebtedness was the principal
amount of the outstanding indebtedness*number of days from interest commencement date (being September 18, 2019) to
satisfaction date*one-year LPR published by the People's Bank of China in September 2019 (4.20%/365).
(4) YUAN Yonggang and YUAN Yongfeng undertake that, if Shenzhen Dongshan fails to timely repay the indebtedness to
Dongguan Dongshan according to the payment schedule set forth in the Supplemental Agreement, YUAN Yonggang, YUAN
Yongfeng and persons acting in concert will promptly reduce their holding of DSBJ's shares by law, and will firstly use the proceeds
from reduction to fully repay the outstanding indebtedness to Dongguan Dongshan, so as to ensure timely repayment of the Target
Indebtedness according to the payment schedule set forth in the Supplemental Agreement.
As of the December 28, 2021, Dongguan Dongshan received a total principal amount of RMB 771.8932 million and interest thereon
from Shenzhen Dongshan, and Shenzhen Dongshan promptly fulfilled all relevant obligations in accordance with the Supplemental
Agreement. All matters relating to the related party transactions have been completed.
Related searches on the website for disclosure of interim announcement of material related party transactions
Disclosure date of Name of disclosure website of interim
Name of interim announcement
interim announcement announcement
Announcement on Asset Purchase and Related Party December 31, 2019 http://www.cninfo.com.cn
Transactions January 21, 2020 http://www.cninfo.com.cn
Progress Announcement on Asset Purchase and Related Party
March 24, 2020 http://www.cninfo.com.cn
Transactions
Announcement on the Execution of Supplemental Agreement to
April 3, 2020 http://www.cninfo.com.cn
Asset Transfer Agreement and Related Party Transactions
Progress Announcement on Asset Transfer and Related Party June 20, 2020 http://www.cninfo.com.cn
Transactions December 22, 2020 http://www.cninfo.com.cn
Announcement on Asset Transfer and Related Party Transactions December 29, 2021 http://www.cninfo.com.cn
XV. Major Contracts and Contract Performance
1. Custody, Contracting and Lease
(1) Custody
There was no custody business during the reporting period of the Company.
(2) Contracting
There was no contracting business during the reporting period of the Company.
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
(3) Lease
√ Applicable □ N/A
Description of leases
(1) Upon deliberation and approval at the thirty-ninth meeting of the fourth session of the board of directors of the Company, the
Company (as the lessee) conducted the financing lease transaction with COSCO Shipping Leasing Co., Ltd. involving the principal
amount no more than RMB 300 million.
(2) Upon deliberation and approval at the forty-fifth meeting of the fourth session of the board of directors of the Company, the
Company (as the lessee) conducted the financing lease transaction with JIC Leasing Co., Ltd. involving the principal amount no more
than RMB 100 million.
Project that generated loss/profit of the Company no less than 10% of the total profit during the reporting period of the Company
□ Applicable √ N/A
There was no leasing project that generated loss/profit of the Company no less than 10% of the total profit during the reporting period
of the Company
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
2. Major Security
√ Applicable □ N/A
Unit: RMB 0’000
External security provided by the Company and its subsidiaries (excluding those provided to its subsidiaries)
Disclosure date of Whether or not the Whether or not the
Name of guaranteed Actual guarantee Type of Counter security (if Security
announcement on Guarantee limit security has been security was provided
party amount guarantee any) period
guarantee limit fulfilled for affiliates
Other shareholders
Guarantee with provide equal
Suzhou Toprun Electric
April 15, 2021 3,000 2,900 joint and several security in 18 months No No
Equipment Co., Ltd.
liability proportion to their
capital contributions
Suzhou Legate
Intelligent Equipment April 15, 2021 3,000 0
Co., Ltd.
Shanghai Fushan
Precision Manufacturing April 15, 2021 3,000 0
Co., Ltd.
Aggregate amount of external security
Aggregate amount of external security approved
9,000 actually provided during the reporting 5,800
during the reporting period (A1)
period (A2)
Total remaining amount of external
Aggregate amount of external security approved
9,000 security actually provided at the end 2,900
at the end of the reporting period (A3)
of the reporting period (A4)
Security provided by the Company to its subsidiaries
Name of guaranteed Disclosure date of Guarantee limit Actual guarantee Type of Security period Whether or not the Whether or not the
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
party announcement on amount guarantee security has been security was provided
guarantee limit fulfilled for affiliates
Dragon Electronix Guarantee with
Holdings Inc. and its April 15, 2021 300,000 196,184.07 joint and several 18 months No No
controlled subsidiaries liability
Guarantee with
Hong Kong Dongshan
April 15, 2021 260,000 60,569.15 joint and several 18 months No No
Holding Limited
liability
Yancheng Dongshan Guarantee with
Precision Manufacturing April 15, 2021 180,000 108,188.19 joint and several 18 months No
Co., Ltd. liability
Multek Group (Hong Guarantee with
Kong) Limited and its April 15, 2021 150,000 92,011.7 joint and several 18 months No
controlled subsidiaries liability
Yancheng Mutto Guarantee with
Optronics Technology April 15, 2021 100,000 54,387.33 joint and several 18 months No
Co., Ltd. liability
Guarantee with
YCMT April 15, 2021 100,000 56,906.93 joint and several 18 months No
liability
Hong Kong Dongshan
Precision Union
April 15, 2021 50,000 0
Opoelectronic Co.,
Limited
Yancheng Dongshan Guarantee with
Communication April 15, 2021 30,000 15,570.9 joint and several 18 months No
Technology Co., Ltd. liability
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Suzhou Rf Top
Guarantee with
Electronic
April 15, 2021 20,000 2,642.24 joint and several 18 months No
Communication Co.,
liability
Ltd.
Dongguan Dongshan
Precision Manufacturing April 15, 2021 10,000 0
Co., Ltd.
Suzhou Chengjia Guarantee with
Precision Manufacturing April 15, 2021 8,000 3,079.17 joint and several 18 months No
Co., Ltd. liability
Suzhou Dongbo
Precision Manufacturing April 15, 2021 3,000 0
Co., Ltd.
Aggregate amount of external security for Aggregate amount of external security
subsidiaries approved during the reporting 1,211,000 actually provided for subsidiaries 1,139,929.48
period (B1) during the reporting period (B2)
Total remaining amount of external
Aggregate amount of external security for
security actually provided for
subsidiaries approved at the end of the reporting 1,211,000 589,539.68
subsidiaries at the end of the reporting
period (B3)
period (B4)
Total amount of security provided by the Company (being the aggregate amount of the above three items)
Aggregate amount of security actually
Aggregate amount of security approved during
1,220,000 provided during the reporting period 1,145,729.48
the reporting period (A1+B1)
(A2+B2)
Total remaining amount of security
Aggregate amount of security approved at the
1,220,000 actually provided at the end of the 592,439.68
end of the reporting period (A3+B3)
reporting period (A4+B4)
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Percentage of aggregate amount of actual security (being A4+B4) in the
40.64%
Company’s net assets
In which:
Remaining amount of security provided for shareholders, actual controller
0
and their affiliates (D)
Remaining amount of debt guarantee directly or indirectly provided for
589,797.44
the guaranteed party whose asset-liability ratio exceeds 70% (E)
Amount of total security amount in excess of 50% of net assets (F) 0
Aggregate amount of the above three items (D+E+F) 589,797.44
Description of occurrence or (as evidenced by proof) possible occurrence
of joint and several liability for satisfaction with respect to the guarantee None
contract that has not expired during the reporting period (if any)
Description of provision of external security against prescribed
None
procedures (if any)
3. Entrusted cash asset management
(1) Entrusted wealth management
√ Applicable □ N/A
Overview of entrusted wealth management during the reporting period
Unit: RMB 0’000
Unrecovered amount of
Source of funds of entrusted Amount of entrusted wealth
Type Outstanding balance Unrecovered amount impairment provision of
wealth management management
wealth management
Bank wealth management
Self-owned funds 612,370.04 41,709.87 0 0
products
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Bank wealth management
Raised funds 59,200 4,500 0 0
products
In Total 671,570.04 46,209.87 0 0
Particulars of high-risk entrusted wealth management with single significant amount, poor security or low liquidity
□ Applicable √ N/A
The principal amount of entrusted wealth management product cannot be recovered or there are other circumstances that may result in impairment
□ Applicable √ N/A
(2) Entrusted loan
□ Applicable √ N/A
There was no entrusted loan during the reporting period of the Company.
4. Other major contracts
There was no other major contract during the reporting period of the Company.
XVI. Description of Other Major Matters
There was no other major matter during the reporting period of the Company.
XVII. Major Matters of the Company’s Subsidiaries
□ Applicable √ N/A
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Section VII Changes in Share Capital and Shareholders
I. Changes in Share Capital
1. Changes in share capital
Unit: Share
Before current change Increase or reduction (+, -) After current change
Issue of Conversion of
Bonus
Quantity Percentage new accumulation fund Others Sub-total Quantity Percentage
issue
shares into share capital
I. Restricted Shares 446,984,337 26.14% -127,392,350 -127,392,350 319,591,987 18.69%
1. State-owned shares
2. Shares held by state-owned legal
8,928,570 0.52% -8,928,570 -8,928,570 0 0.00%
persons
3. Shares held by other domestic
438,055,767 25.62% -118,463,780 -118,463,780 319,591,987 18.69%
entities
Including: shares held by
94,366,280 5.52% -94,366,280 -94,366,280 0 0.00%
domestic legal persons
Shares held by domestic
343,689,487 20.10% -24,097,500 -24,097,500 319,591,987 18.69%
natural persons
II. Non-restricted Shares 1,262,882,990 73.86% 127,392,350 127,392,350 1,390,275,340 81.31%
1. RMB-denominated common
1,262,882,990 73.86% 127,392,350 127,392,350 1,390,275,340 81.31%
shares
III. Total Number of Shares 1,709,867,327 100.00% 0 0 1,709,867,327 100.00%
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Reasons for changes in share capital
√ Applicable □ N/A
Upon approval by the Zheng Jian Xu Ke [2020] No.980 Document issued by the China Securities Regulatory Commission, and the approval by the Shenzhen Stock Exchange, the Company
appointed its lead underwriter TF Securities Co., Ltd. to make a non-public offering of 103,294,850 common shares to 20 investors (including CITIC Securities Co., Ltd., Taiping Asset
Management Co., Ltd. and Zhejiang Zheshang Securities Asset Management Co., Ltd.), with a lock-up period of six (6) months. On February 8, 2021, the sale restriction on the said non-public
offering of shares was lifted.
Approval of changes in share capital
□ Applicable √ N/A
Share transfer
□ Applicable √ N/A
Impact of changes in share capital on such financial indicators as basic earnings per share, diluted earnings per share and net assets per share attributable to common shareholders of the
Company in the most recent year and the most recent period
□ Applicable √ N/A
Other information that the Company deems necessary or the securities regulatory requires disclosure
□ Applicable √ N/A
2. Changes in restricted shares
√ Applicable □ N/A
Unit: Share
Number of restricted Number of additional Number of restricted Number of restricted
Reason for sale Date of listing of sale
Name of shareholder shares at the beginning of restricted shares during shares lifted during shares at the end of
restriction restriction
the period the current period the current period the period
Non-public offering
CITIC Securities Co., Ltd. (3 accounts) 4,642,857 0 4,642,857 0 February 8, 2021
of stocks
Taiping Asset Management Co., Ltd. (Taiping
Non-public offering
Asset Management-China Merchants 2,928,571 0 2,928,571 0 February 8, 2021
of stocks
Bank-Taiping Asset Fixed Asset No.36 Asset
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Management Product)
Zhejiang Zheshang Securities Asset Non-public offering
5,714,285 0 5,714,285 0 February 8, 2021
Management Co., Ltd. of stocks
Jinan Tianfu Hengtong Equity Investment Non-public offering
2,928,571 0 2,928,571 0 February 8, 2021
Fund Partnership (Limited Partnership) of stocks
Bosera Fund Management Co., Ltd. (4 Non-public offering
3,642,857 0 3,642,857 0 February 8, 2021
accountants) of stocks
Greater Bay Area Industrial and Financing Non-public offering
5,357,142 0 5,357,142 0 February 8, 2021
Investment (Guangzhou) Co., Ltd. of stocks
Non-public offering
Foresight Fund Management Co., Ltd. 5,616,288 0 5,616,288 0 February 8, 2021
of stocks
Xinhua Asset Management Co., Ltd. (Xinhua
Non-public offering
Life Insurance Co., Ltd.-Bonus-Group 10,714,285 0 10,714,285 0 February 8, 2021
of stocks
Bonus-018L-FH001 Shen)
Taikang Asset Management Co., Ltd. Non-public offering
8,892,857 0 8,892,857 0 February 8, 2021
(Taikang Life Insurance Co., Ltd.-Traditional) of stocks
Taikang Asset Management Co., Ltd.
(Investment-Linked Multi-Strategy Selected Non-public offering
2,928,571 0 2,928,571 0 February 8, 2021
Investment Account of Taikang Life Insurance of stocks
Co., Ltd.)
Taikang Asset Management Co., Ltd.
(Investment- Non-public offering
2,928,571 0 2,928,571 0 February 8, 2021
Linked Innovation-Driven Investment of stocks
Account of Taikang Life Insurance Co., Ltd.)
Taikang Asset Management Co., Ltd.
Non-public offering
(Enterprise Annuity Plan of China 2,928,571 0 2,928,571 0 February 8, 2021
of stocks
Construction Bank Corporation)
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Ping An Asset Management Co., Ltd. (Ping
Non-public offering
An Asset Management-ICBC-Xin Heng No.3 7,857,142 0 7,857,142 0 February 8, 2021
of stocks
Asset Management Product)
Ping An Asset Management Co., Ltd. (Ping
Non-public offering
An Life Insurance Company of China, 7,142,857 0 7,142,857 0 February 8, 2021
of stocks
Ltd.-Bonus-Personal Insurance Bonus)
Ping An Asset Management Co., Ltd. (Ping
Non-public offering
An Life Insurance Company of China, 7,142,857 0 7,142,857 0 February 8, 2021
of stocks
Ltd.-Personal Investment-Linked Insurance)
Generali China Asset Management Co., Ltd.
(Generali Asset Management-China
Non-public offering
Merchants Bank-Generali Asset-Fixed 2,964,285 0 2,964,285 0 February 8, 2021
of stocks
Increase Selected No.1 Asset Management
Product)
Non-public offering
Ping An Securities Co., Ltd. 2,928,571 0 2,928,571 0 February 8, 2021
of stocks
Caitong Fund Management Co., Ltd. (20 Non-public offering
7,107,142 0 7,107,142 0 February 8, 2021
accounts) of stocks
Non-public offering
Guotai Junan Securities Co., Ltd. 5,357,142 0 5,357,142 0 February 8, 2021
of stocks
CITIC Construction Investment Securities Non-public offering
3,571,428 0 3,571,428 0 February 8, 2021
Co., Ltd. of stocks
Release of executive
YUAN Yongfeng 183,602,175 0 16,811,060 166,791,115 N/A
quota
Release of executive
YUAN Yonggang 158,956,087 0 7,286,440 151,669,647 N/A
quota
Total 445,853,112 0 127,392,350 318,460,762 -- --
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
II. Issue and Listing of Securities
1. Issue of securities (excluding preferred shares) during the reporting period
□ Applicable √ N/A
2. Description of changes in the total number of shares and shareholding structure of the Company, and in the asset and liability structure of the Company
□ Applicable √ N/A
3. Shares held by current internal employees
□ Applicable √ N/A
III. Particulars of Shareholders and Actual Controller
1. Number of shareholders and their shareholdings
Unit: Share
The total number of
The total number of preferred shareholders
Total number of preferred shareholders (if
Total number of common shareholders (if any) whose voting rights have been
common shareholders any) whose voting rights
71,390 at the end of the month preceding the 79,592 0 restored at the end of the month preceding 0
at the end of the have been restored at the
disclosure date of the annual report the disclosure date of the annual report
reporting period end of the reporting period
(see Note 8)
(see Note 8)
Shares held by shareholder holding no less than 5% of the total shares or top 10 shareholders
Number of shares Increase or Pledged, marked or frozen
Number of Number of
Shareholding held at the end of reduction during
Name of shareholder Nature of shareholder restricted shares unrestricted shares
proportion the reporting the reporting Status of shares Quantity
held held
period period
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Domestic natural
YUAN Yongfeng 13.01% 222,388,153 - 166,791,115 55,597,038 Pledged 129,340,000
person
Domestic natural Pledged 87,620,000
YUAN Yonggang 11.83% 202,226,196 - 151,669,647 50,556,549
person Frozen 9,295,000
Hong Kong Securities Clearing
Foreign legal person 4.43% 75,735,418 33,098,165 0 75,735,418
Company Ltd.
Domestic natural
YUAN Fugen 3.44% 58,796,052 - 0 58,796,052
person
Industrial and Commercial
Bank of China - Flexible
Allocation of Guangfa Others 2.21% 37,793,406 0 37,793,406
Multi-factor Hybrid Securities
Investment Fund
Shaanxi International Trust Co.,
Ltd. - Shaanxi State
InvestmentDSBJ Phase II Others 1.28% 21,914,118 21,914,118 0 21,914,118
Employee Stock Ownership and
Collective Fund Trust Plan
China Life Insurance Company
Limited -Bonus-Personal Others 1.26% 21,575,866 10,101,221 0 21,575,866
Bonus-005L-FH002 Shen
China Life Insurance Company
Limited-Traditional-Ordinary
Others 1.25% 21,382,371 18,582,371 0 21,382,371
Insurance Product-005L-CT001
Shen
Zhangjiagang Industry Capital State-owned legal
1.13% 19,285,281 -10,784,719 0 19,285,281
Investment Co., Ltd. person
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Taikang Life Insurance co.,
Ltd.-Traditional-
Others 1.00% 17,046,805 1,863,357 0 17,046,805
Ordinary Insurance
Product-019L-CT001 Shen
Strategic investor or general legal person becomes one
of top 10 shareholders as a result of placement of new N/A
shares (if any) (see Note 3)
Among the said shareholders, YUAN Yonggang and YUAN Yongfeng are the sons of YUAN Fugen, YUAN Yongfeng is the elder
brother of YUAN Yonggang, and these three people are the actual controllers of the Company. Shaanxi International Trust Co., Ltd. -
Description of connected relationship or acting in Shaanxi State InvestmentDSBJ Phase II Employee Stock Ownership and Collective Fund Trust Plan is the account opened by the
concert relationship among the said shareholders Company for employee stock ownership plan 2021. Among other shareholders, the Company is not aware whether it is connected with
such shareholders or is the person acting in concert provided in the Administrative Measures for Disclosure of Information About
Changes in the Shareholding in the Listed Company.
Description of voting trust/fiduciary voting and waiver
N/A
of voting right by the said shareholders
Special statement on dedicated repurchase accounts of
N/A
any of top 10 shareholders (if any)) (see Note 10)
Shares held by top 10 unrestricted shareholders
Number of unrestricted shares held at the end of the Type of share
Name of Shareholder
reporting period Type of share Quantity
Hong Kong Securities Clearing Company Ltd. 75,735,418 RMB-denominated common shares 75,735,418
YUAN Fugen 58,796,052 RMB-denominated common shares 58,796,052
YUAN Yongfeng 55,597,038 RMB-denominated common shares 55,597,038
YUAN Yonggang 50,556,549 RMB-denominated common shares 50,556,549
Industrial and Commercial Bank of China - Flexible Allocation of
37,793,406 RMB-denominated common shares 37,793,406
Guangfa Multi-factor Hybrid Securities Investment Fund
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Shaanxi International Trust Co., Ltd. - Shaanxi State InvestmentDSBJ
21,914,118 RMB-denominated common shares 21,914,118
Phase II Employee Stock Ownership and Collective Fund Trust Plan
China Life Insurance Company Limited -Bonus-Personal
21,575,866 RMB-denominated common shares 21,575,866
Bonus-005L-FH002 Shen
China Life Insurance Company Limited-Traditional-Ordinary
21,382,371 RMB-denominated common shares 21,382,371
Insurance Product-005L-CT001 Shen
Zhangjiagang Industry Capital Investment Co., Ltd. 19,285,281 RMB-denominated common shares 19,285,281
Taikang Life Insurance co., Ltd.-Traditional-Ordinary Insurance
17,046,805 RMB-denominated common shares 17,046,805
Product-019L-CT001 Shen
Among the said shareholders, YUAN Yonggang and YUAN Yongfeng are the sons of YUAN Fugen, YUAN Yongfeng
Description of the connected relationship or acting in concert is the elder brother of YUAN Yonggang, and these three people are the actual controllers of the Company. Shaanxi
relationship among top 10 unrestricted circulating shares, and between International Trust Co., Ltd. - Shaanxi State InvestmentDSBJ Phase II Employee Stock Ownership and Collective Fund
top 10 holders of unrestricted circulating shares and top 10 Trust Plan is the account opened by the Company for employee stock ownership plan 2021. Among other shareholders,
shareholders the Company is not aware whether it is connected with such shareholders or is the person acting in concert provided in
the Administrative Measures for Disclosure of Information About Changes in the Shareholding in the Listed Company.
Description of top 10 common shareholders participating in the
N/A
financing and securities trading business (if any) (see Note 4)
No repurchase transaction has been agreed upon by and between the Company’s top 10 common shareholders and top 10 holders of its unrestricted common shares.
2. Controlling shareholders of the Company
Nature of controlling shareholder: natural person
Type of controlling shareholder: natural person
Whether or not the right to reside in any other country or region has been
Name of controlling shareholder Nationality
obtained
YUAN Yongfeng PRC No
YUAN Yonggang PRC No
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
YUAN Fugen PRC No
YUAN Yonggang is the Chairman of the Company, YUAN Yongfeng is the Director and General Manager of the Company, and YUAN Fugen is the
Primary occupations and positions
Senior Consultant of the Company.
(1) YUAN Yonggang held 23.94 % of shares of Anhui Landun Photoelectron Co., Ltd. (stock name: Landun Photoelectron; stock code: 300862), and
Anhui Gaoxin Jintong Anyi Phase II Entrepreneurship Investment Fund (Limited Partnership) under the control of the couple YUAN Yonggang and
WANG Wenjuan held 10.95% of shares of Landun Photoelectron. Thus, the couple YUAN Yonggang and WANG Wenjuan held 34.89% of Landun
Shareholding structure of other Photoelectron in aggregate, and was the actual controller of Landun Photoelectron;
domestic and overseas listed companies (2) The couple YUAN Yonggang and WANG Wenjuan held 95% of shares of Shenzhen Qianhai Rongyao Capital Management Co., Ltd. (“Rongyao
controlled and participated by the Capital”) through Jintong Zhihui Investment Management Co., Ltd. (an investment company operated and managed by a professional management
Company during the reporting period team, whose investment funds were primarily sourced from the society), and Rongyao Capital was the Managing Partner of Hefei Rongxin Equity
Investment Fund Partnership (Limited Partnership) (“Hefei Rongxin”). On November 21, 2019, Hefei Rongxin became the controlling shareholder of
Anhui Andeli Department Store Co., Ltd. (stock name: Andeli; stock code: 603031), holding 12.84% of shares of Andeli, and the couple YUAN
Yonggang and WANG Wenjuan was the actual controller of Andeli.
There has been no change of the controlling shareholder during the reporting period of the Company.
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
3. Actual controller of the Company and persons acting in concert
Nature of actual controller: domestic natural person
Type of actual controller: natural person
Relationship with actual Whether or not the right to reside in any other country
Name of actual controller Nationality
controller or region has been obtained
YUAN Yongfeng Himself PRC No
YUAN Yonggang Himself PRC No
YUAN Fugen Himself PRC No
Primary occupations and YUAN Yonggang is the Chairman of the Company, YUAN Yongfeng is the Director and General
positions Manager of the Company, and YUAN Fugen is the Senior Consultant of the Company.
(1) YUAN Yonggang held 23.94 % of shares of Anhui Landun Photoelectron Co., Ltd. (stock name:
Landun Photoelectron; stock code: 300862), and Anhui Gaoxin Jintong Anyi Phase II Entrepreneurship
Investment Fund (Limited Partnership) under the control of the couple YUAN Yonggang and WANG
Wenjuan held 10.95% of shares of Landun Photoelectron. Thus, the couple YUAN Yonggang and
WANG Wenjuan held 34.89% of Landun Photoelectron in aggregate, and was the actual controller of
Domestic and overseas Landun Photoelectron;
listed companies controlled (2) The couple YUAN Yonggang and WANG Wenjuan held 95% of shares of Shenzhen Qianhai
by the Company in the last Rongyao Capital Management Co., Ltd. (“Rongyao Capital”) through Jintong Zhihui Investment
ten years Management Co., Ltd. (an investment company operated and managed by a professional management
team, whose investment funds were primarily sourced from the society), and Rongyao Capital was the
Managing Partner of Hefei Rongxin Equity Investment Fund Partnership (Limited Partnership) (“Hefei
Rongxin”). On November 21, 2019, Hefei Rongxin became the controlling shareholder of Anhui Andeli
Department Store Co., Ltd. (stock name: Andeli; stock code: 603031), holding 12.84% of shares of
Andeli, and the couple YUAN Yonggang and WANG Wenjuan was the actual controller of Andeli.
There was no change of the actual controller during the reporting period of the Company.
Block scheme of property rights and control between the Company and its actual controller
Persons acting in concert
YUAN Fugen YUAN Yonggang YUAN Yongfeng
(3.44% shareholding) (11.83% shareholding) (13.01% shareholding)
Suzhou Dongshan Precision Manufacturing Co., Ltd.
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
The Company is controlled by the actual controller by trust or other asset management method
□ Applicable √ N/A
4. The aggregate number of pledged shares held by the Company’s controlling shareholder or the largest
shareholder and its person acting in concert accounts for 80% of the shares held by it in the Company
□ Applicable √ N/A
5. Other institutional shareholders holding more than 10% of the shares of the Company
□ Applicable √ N/A
6. Shareholding restriction and reduction by the controlling shareholder, actual controller, reorganizing party
and other parties giving undertakings
□ Applicable √ N/A
IV. Implementation of Share Repurchase during the Reporting Period
Progress on the implementation of share repurchase
√ Applicable □ N/A
Plan Number of Percentage in Proposed Number of
Amount of proposed
disclosure shares to be the total share repurchase Repurchase purpose shares
repurchase
time repurchased capital period repurchased
Subsequent implementation
3.3967 million RMB 100 million From July 8,
of employee stock
July 9, 2021 shares to 6.7935 0.20%-0.40% (inclusive) to RMB 2021 to July 8, 5,319,737
ownership plan or equity
million shares 200 million 2022
incentive
Progress on the reduction of repurchased shares by centralized bidding
√ Applicable □ N/A
As of August 31, 2021, the Company repurchased 5.3197 million shares of the Company by centralized bidding using the dedicated
security repurchase account, accounting for 0.31% of the total share capital of the Company. The highest closing price was RMB
19.18 per share, and the lowest closing price was RMB 18.24 per share. The total closing value was RMB 100.4798 million
(excluding transaction costs).
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Section VIII Preferred Shares
□ Applicable √ N/A
The Company does not have preferred shares during the reporting period.
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Section IX Bonds
□ Applicable √ N/A
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Section X Financial Report
I. Auditor’s Report
Audit opinion Standard unqualified opinions
Signing date of auditor’s report April 19, 2022
Auditor Pan-China Certified Public Accountants LLP
Auditor’s report document number Tian Jian Shen [2022] No. 5-46
Name of certified public accountants SUN Tao, HUANG Zhenshuang
Auditor’s Report
Auditor’s Report
Tian Jian Shen [2022] No. 5-46
To all shareholders of Suzhou Dongshan Precision Manufacturing Co., Ltd.,
I. Audit Opinion
We have audited the accompanying financial statements of Suzhou Dongshan Precision Manufacturing Co., Ltd.(hereinafter referred to as
“Dongshan Precision”), which comprise the consolidated and parent company balance sheets as at December 31, 2021, the consolidated and
parent company income statements, the consolidated and parent company cash flow statements, and the consolidated and parent company
statements of changes in equity for the year then ended, as well as notes to financial statements.
In our opinion, the accompanying financial statements are prepared in all material respects in accordance with Accounting Standards for
Business Enterprises and fairly present the consolidated and the parent company’s financial position as of December 31, 2021, and the
consolidated and the parent company’s operating results and cash flows for the year then ended.
II. Basis for Audit Opinion
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under those standards are further described
in the “Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements” section of our report. We are independent of
Dongshan Precision in accordance with China Code of Ethics for Certified Public Accountants, and we have fulfilled other ethical
responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, are of most significance in our audit of the financial statements for
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 express a separate opinion on these matters.
(I) Revenue recognition
1. Key audit matters
Please refer to Note III (XXIV), V(II)1 and XIII(I) to the financial statements for details.
Dongshan Precision is mainly engaged in the sales of PCBs, LED display devices, Touch panels and LCMs, precision components and
other products. In 2021, the operating revenue of Dongshan Precision amounted to RMB 31,793,147,900.
The products sold by Dongshan Precision can be recognized as the performance obligation at a certain time point. Revenue from domestic
sales is recognized when: (1) the products have been delivered by the Company to the contracted delivery place and confirmed by the customers
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for acceptance; (2) the payment has been received or the right of collecting payment has been obtained; and (3) it is probable that the associated
economic benefits will flow to the Company. Revenue from oversea sales is recognized when: (1) the Company has declared the products for
customs clearance in accordance with the contract with bills of clearance and waybills received; (2) the payment has been received or the right of
collecting payment has been obtained; and (3) it is probable that the associated economic benefits will flow to the Company.
As the operating revenue is one of the key performance indicators, there might be inherent risks that the management of Dongshan
Precision (the “Management”) adopts inappropriate revenue recognition to achieve specific goals or expectations. Therefore, we have identified
revenue recognition as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for revenue recognition are as follows:
(1) We obtained understandings of key internal controls related to revenue recognition, assessed the design of these controls, determined
whether they had been executed, and tested the effectiveness of the operation;
(2) We checked sale contracts, obtained understandings of main contractual terms or conditions, and assessed whether the revenue
recognition method was appropriate;
(3) For revenue from domestic sales, we checked supporting documents related to revenue recognition by sampling method, including
sales contracts, sales invoices, shipping documents, and client acceptance receipts, etc.; for revenue from overseas sales, we obtained
information from electron port and checked it with accounting records, and checked supporting documents related to revenue recognition by
sampling method, including sales contracts, sales invoices, sales issue document, bills of clearance, waybills, etc.;
(4) We performed analysis procedure on operating revenue and gross margin by month, product, client, etc., so as to identify whether
there are significant or abnormal fluctuations and find out the reason of fluctuations;
(5) We performed confirmation procedures on current sales amount by sampling method in combination with confirmation procedure of
accounts receivable;
(6) We performed cut-off tests on the operating revenue recognized around the balance sheet date, and assessed whether the operating
revenue was recognized in the appropriate period;
(7) We checked whether information related to operating revenue had been presented appropriately in the financial statements.
(II) Impairment of accounts receivable
1. Key audit matters
Please refer to Note III (X) and V(I)4 to the financial statements for details.
As of December 31, 2021, the book balance of accounts receivable of Dongshan Precision amounted to RMB 8,643,059,900, with
provision for bad debts of RMB 976,980,200, and the carrying amount amounted to RMB 7,666,079,800.
Based on credit risk features of accounts receivable, the Management measures the provision for bad debts at the amount of lifetime
expected credit losses, either on an individual basis or on a collective basis. For accounts receivable with expected credit losses measured on an
individual basis, the Management estimates the expected cash flows to recognize the provision for bad debts accordingly based on a
comprehensive consideration of reasonable and supportable information related to the past events, the current situation and the forecast of future
economic conditions. For accounts receivable with expected credit losses measured on a collective basis, the Management classifies portfolios
on the basis of aging, adjusts them based on historical credit risk loss experience and forward-looking estimations, and prepares the comparison
table of aging and expected credit loss rate of accounts receivable, so as to calculate the provision for bad debts accordingly.
As the amount of accounts receivable is significant and the impairment involves significant judgment of the Management, we have
identified impairment of accounts receivable as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for impairment of accounts receivable are as follows:
(1) We obtained understandings of key internal controls related to impairment of accounts receivable, assessed the design of these
controls, determined whether they had been executed, and tested the effectiveness of their operation;
(2) We reviewed the accounts receivable with provision for bad debts made in previous periods for their subsequent write-off or reversal,
and assessed the accuracy of historical estimations made by the Management;
(3) We reviewed the consideration of the Management on credit risk assessment and objective evidence, and assessed whether the credit
risk features of accounts receivable had been appropriately identified by the Management;
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(4) For accounts receivable with expected credit losses measured on an individual basis, we obtained and checked the Management’s
estimations on the expected future cash flows, assessed the reasonableness of key assumptions and the accuracy of data adopted in the
estimations and checked them with acquired external evidence;
(5) For accounts receivable with expected credit losses measured on a collective basis, we assessed the reasonableness of portfolio
classification on the basis of credit risk features; we assessed the reasonableness of the comparison table of aging and expected credit loss rate of
accounts receivable prepared by the Management based on the historical credit loss experience of portfolios with similar credit risk features and
forward-looking estimations; we tested the accuracy and completeness of data used by the Management (including aging of accounts receivable,
historical loss rate, etc.) and whether the calculation of provision for bad debts was accurate;
(6) We checked the subsequent collection of accounts receivable and assessed the reasonableness of provision for bad debts made by the
Management;
(7) We checked whether information related to impairment of accounts receivable had been presented appropriately in the financial
statements.
(III) Impairment of goodwill
1. Key audit matters
Please refer to Note III(XIX) and V(I)18 to the financial statements for details.
As of December 31, 2021, the book balance of goodwill of Dongshan Precision amounted to RMB 2,239,041,200, with provision for bad
debts of RMB 27,318,400, and the carrying amount amounted to RMB 2,211,722,800.
When there is objective evidence indicating that asset group or asset group portfolio related to goodwill may be impaired, or at the end of
each period, the Management will perform impairment test on goodwill together with related asset group or asset group portfolio, and the
recoverable amount of related asset group or asset group portfolio is determined based on the estimated present value of future cash flows. Key
assumptions adopted in the impairment test include: revenue growth rate in detailed forecast period, growth rate in perpetual forecast period,
gross margin, discount rate, etc.
As the amount of goodwill is significant and impairment test involves significant judgment of the Management, we have identified
impairment of goodwill as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for impairment of goodwill are as follows:
(1) We obtained understandings of key internal controls related to impairment of goodwill, assessed the design of these controls,
determined whether they had been executed, and tested the effectiveness of their operation;
(2) We reviewed the present value of future cash flows estimated by the Management in previous years and the actual operating results,
and assessed the accuracy of the Management’s historical estimations;
(3) We obtained understandings of and assessed the competency, professional quality and objectivity of external appraisers engaged by
the Management;
(4) We assessed the reasonableness and consistency of impairment test method adopted by the Management;
(5) We assessed the reasonableness of key assumptions used in impairment test and reviewed whether relevant assumptions were
consistent with overall economy environment, industry condition, operating situation, historical experience, operation plan, approved budget,
and other assumptions related to the financial statements used by the Management;
(6) We tested the accuracy, completeness and relativity of data used in the impairment test and reviewed the internal consistency of
related information in the impairment test;
(7) We tested whether the calculation of estimated present value of future cash flows was accurate;
(8) We checked whether information related to impairment of goodwill had been presented appropriately in the financial statements.
IV. Other Information
The Management is responsible for other information. The other information comprises the information included in the annual report, but
does not include 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.
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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 any material misstatement of other information, we are required to
report that fact. We have nothing to report in this regard.
V. Responsibilities of the Management and Those Charged with Governance for the Financial Statements
The Management is responsible for preparing and presenting fairly the financial statements in accordance with China Accounting
Standards for Business Enterprises(“CASBEs”), as well as designing, implementing and maintaining internal control relevant to the preparation
of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing Dongshan Precision’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management
either intends to liquidate Dongshan Precision or to cease operations, or have no realistic alternative but to do so.
Those charged with governance of Dongshan Precision (hereinafter referred to as “those charged with governance”) are responsible for
overseeing Dongshan Precision’s financial reporting process.
VI. Certified Public Accountant’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 China Standards on Auditing will always detect a material misstatement when it
exists. Misstatement 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.
We exercise professional judgment and maintain professional skepticism throughout the audit performed in accordance with China
Standards on Auditing. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose to express opinions on the effectiveness of internal control.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made
by the Management.
(IV) Conclude on the appropriateness of the 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 Dongshan Precision’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 Dongshan Precision to cease to
continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within
Dongshan Precision to express an opinion on the financial statements. We are responsible for the direction, supervision, and performance of the
group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding the planned audit scope, time schedule and significant audit findings,
including any deficiencies in internal control of concern 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
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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 for the current period and are therefore 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.
Pan-China Certified Public Accountants LLP Chinese Certified Public Accountant: SUN Tao
(Engagement Partner)
HangzhouChina Chinese Certified Public Accountant: HUANG Zhenshuang
April 19, 2022
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II. Financial Statements
Consolidated balance sheet as at December 31, 2021
Unit: RMB
Items Closing balance Opening balance
Current assets：
Cash and bank balances 5,400,837,392.47 5,154,010,538.74
Held-for-trading financial assets 499,528,549.86 1,262,027,561.65
Notes receivable 14,624,540.85 70,758,949.85
Accounts receivable 7,666,079,765.82 7,090,498,632.70
Receivables financing 828,355,016.30 750,470,779.44
Payment in advance 186,095,112.93 195,402,953.35
Other receivables 37,505,521.59 567,026,166.56
Inventories 6,451,712,389.82 5,977,123,863.84
Other current assets 646,070,013.64 790,354,229.77
Total current assets 21,730,808,303.28 21,857,673,675.90
Non-current assets:
Long-term receivables 69,950,000.88 105,950,000.00
Long-term equity investments 143,121,019.78 101,207,887.93
Other equity instrument investments 171,322,110.00 64,889,404.30
Investment property 1,554,262.58
Fixed assets 10,736,270,678.33 11,225,101,992.17
Construction in progress 503,037,513.25 562,008,491.36
Right-of-use assets 920,952,667.75
Intangible assets 297,383,991.47 355,484,167.00
Goodwill 2,211,722,774.04 2,220,590,908.21
Long-term deferred expenses 343,067,848.10 324,048,122.31
Deferred tax assets 535,920,683.59 558,419,834.12
Other non-current assets 286,296,934.20 127,694,230.24
Total non-current assets 16,220,600,483.97 15,645,395,037.64
Total assets 37,951,408,787.25 37,503,068,713.54
Current liabilities:
Short-term borrowings 8,047,168,009.16 8,579,155,068.19
Held-for-trading financial liabilities 881,721.20
Notes payable 1,646,644,107.17 1,767,940,549.75
Accounts payable 6,729,890,126.00 7,443,237,912.72
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Contract liabilities 39,681,986.94 21,204,655.32
Employee benefits payable 503,138,722.06 381,434,530.09
Taxes and rates payable 151,692,543.85 160,212,704.05
Other payables 323,166,075.34 59,939,206.62
Non-current liabilities due within one year 1,490,545,864.93 964,563,666.84
Other current liabilities 2,440,030.34 865,474.44
Total current liabilities 18,934,367,465.79 19,379,435,489.22
Non-current liabilities:
Long-term borrowings 2,030,525,761.80 2,764,720,894.68
Lease liabilities 1,147,810,164.72
Long-term payables 78,927,000.98 1,200,752,321.09
Provisions 89,442,831.13 35,719,550.76
Deferred income 685,633,680.65 648,248,649.02
Deferred tax liabilities 314,359,343.00 299,223,880.52
Other non-current liabilities
Total non-current liabilities 4,346,698,782.28 4,948,665,296.07
Total liabilities 23,281,066,248.07 24,328,100,785.29
Equity:
Share capital 1,709,867,327.00 1,709,867,327.00
Capital reserve 8,099,524,872.90 8,136,879,413.39
Less: Treasury shares 100,479,794.32
Other comprehensive income -519,626,066.21 -451,615,637.76
Surplus reserve 111,698,315.15 75,205,377.40
Undistributed profit 5,275,515,670.63 3,598,580,392.76
Total equity attributable to the parent company 14,576,500,325.15 13,068,916,872.79
Non-controlling interest 93,842,214.03 106,051,055.46
Total equity 14,670,342,539.18 13,174,967,928.25
Total liabilities & equity 37,951,408,787.25 37,503,068,713.54
Legal representative: Yuan Yonggang Office in charge of accounting: Wang Xu Head of accounting department:：Zhu Deguang
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Parent company balance sheet as at December 31, 2021
Unit: RMB
Items Closing balance Opening balance
Current assets:
Cash and bank balances 1,320,945,743.89 1,293,611,181.02
Held-for-trading financial assets 12,875,960.00 179,977,128.89
Notes receivable 31,632,433.51 52,820,740.92
Accounts receivable 2,751,126,772.11 2,065,260,003.35
Receivables financing 552,882,532.72 1,299,814,805.31
Payment in advance 115,749,043.07 65,943,156.29
Other receivables 3,408,234,419.21 5,195,393,439.65
Including: Interest receivable
Dividends receivable 581,000,000.00 354,000,000.00
Inventories 697,310,419.09 706,079,830.35
Other current assets 44,816,583.10 51,762,882.90
Total current assets 8,935,573,906.70 10,910,663,168.68
Non-current assets:
Long-term receivables 55,000,000.88 81,000,000.00
Long-term equity investments 7,096,642,244.53 6,260,723,998.11
Other equity instrument investments 171,322,110.00 21,322,110.00
Fixed assets 1,180,664,110.78 1,325,537,475.58
Construction in progress 119,752,899.75 79,816,940.03
Right-of-use assets 8,479,902.43
Intangible assets 63,720,204.68 65,707,338.87
Long-term deferred expenses 97,651,794.61 29,220,093.04
Deferred tax assets 161,821,257.17 137,154,643.56
Other non-current assets 41,372,547.26 49,306,454.73
Total non-current assets 8,996,427,072.09 8,049,789,053.92
Total assets 17,932,000,978.79 18,960,452,222.60
Current liabilities:
Short-term borrowings 3,523,782,504.56 3,191,844,609.44
Notes payable 1,500,663,176.84 2,519,127,432.91
Accounts payable 930,354,491.13 1,480,836,972.32
Contract liabilities 184,899,206.27 6,935,179.16
Employee benefits payable 27,858,029.13 39,680,685.65
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Taxes and rates payable 3,879,187.43 1,953,916.69
Other payables 1,472,895,655.79 1,511,253,113.37
Non-current liabilities due within one year 152,150,642.66 251,062,315.15
Other current liabilities 704,759.12
Total current liabilities 7,796,482,893.81 9,003,398,983.81
Non-current liabilities:
Long-term borrowings 334,960,336.11 240,466,300.00
Lease liabilities 6,774,436.43
Long-term payables 78,927,000.98 95,690,893.64
Provisions 1,935,062.28 654,354.68
Deferred income 25,653,396.00 27,284,932.00
Deferred tax liabilities 2,178,114.46 1,329,870.22
Total non-current liabilities 450,428,346.26 365,426,350.54
Total liabilities 8,246,911,240.07 9,368,825,334.35
Equity:
Share capital 1,709,867,327.00 1,709,867,327.00
Capital reserve 7,961,185,289.83 7,961,185,289.83
Less: Treasury shares 100,479,794.32
Other comprehensive income -350,000,000.00 -350,000,000.00
Surplus reserve 111,698,315.15 75,205,377.40
Undistributed profit 352,818,601.06 195,368,894.02
Total equity 9,685,089,738.72 9,591,626,888.25
Total liabilities & equity 17,932,000,978.79 18,960,452,222.60
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Consolidated income statement for the year ended December 31, 2021
Unit：RMB
Items Current period cumulative Preceding period comparative
I. Total operating revenue 31,793,147,908.12 28,093,409,430.26
Including: Operating revenue 31,793,147,908.12 28,093,409,430.26
II. Total operating cost 29,789,694,099.52 26,323,802,819.86
Including: Operating cost 27,128,550,627.93 23,680,291,509.77
Taxes and surcharges 73,160,213.97 87,488,000.10
Selling expenses 341,087,646.41 329,180,346.50
Administrative expenses 781,664,730.36 686,479,003.08
R&D expenses 1,028,567,206.95 910,253,381.44
Financial expenses 436,663,673.90 630,110,578.97
Including: Interest expenses 371,339,473.57 562,315,180.30
Interest income 62,819,318.55 87,524,003.63
Add: Other income 269,467,593.24 202,345,395.03
Investment income (or less: losses) 41,578,291.23 18,878,418.25
Including: Investment income from associates and joint
-7,515,648.15 6,412,017.44
ventures
Gains on changes in fair value (or less: losses) 8,645,469.99 13,233,451.39
Credit impairment loss -7,992,105.91 -142,200,047.48
Assets impairment loss -187,376,720.10 -84,916,564.37
Gains on asset disposal (or less: losses) -14,060,145.96 21,382,265.54
III. Operating profit (or less: losses) 2,113,716,191.09 1,798,329,528.76
Add: Non-operating revenue 3,112,802.79 13,465,190.82
Less: Non-operating expenditures 6,006,471.39 25,469,372.36
IV. Profit before tax (or less: total loss) 2,110,822,522.49 1,786,325,347.22
Less: Income tax 249,922,824.36 249,138,163.22
V. Net profit (or less: net loss) 1,860,899,698.13 1,537,187,184.00
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less: net loss) 1,860,899,698.13 1,537,187,184.00
2. Net profit from discontinued operations (or less: net loss)
(II) Categorized by the portion of equity ownership
1. Net profit attributable to owners of parent company (or less:
1,862,481,138.84 1,530,132,196.09
net loss)
2. Net profit attributable to non-controlling shareholders (or
-1,581,440.71 7,054,987.91
less: net loss)
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VI. Other comprehensive income after tax -46,074,281.99 89,653,243.55
Items attributable to the owners of the parent company -46,074,281.99 89,653,243.55
(I) Not to be reclassified subsequently to profit or loss 21,936,146.46
1. Changes in remeasurement on the net defined benefit
plan
2. Items under equity method that will not be
reclassified to profit or loss
3. Changes in fair value of other equity instrument
21,936,146.46
investments
(II) To be reclassified subsequently to profit or loss -46,074,281.99 67,717,097.09
1. Items under equity method that may be reclassified
to profit or loss
2. Changes in fair value of other debt investments
3. Profit or loss from reclassification of financial assets
into other comprehensive income
4. Provision for credit impairment of other debt
investments
5. Cash flow hedging reserve 4,646,609.02 50,109,339.97
6. Translation reserve -50,720,891.01 17,607,757.12
Items attributable to non-controlling shareholders
VII. Total comprehensive income 1,814,825,416.14 1,626,840,427.55
Items attributable to the owners of the parent company 1,816,406,856.85 1,619,785,439.64
Items attributable to non-controlling shareholders -1,581,440.71 7,054,987.91
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 1.09 0.93
(II) Diluted EPS (yuan per share) 1.09 0.93
Legal representative: Yuan Yonggang Office in charge of accounting: Wang Xu Head of accounting department:：Zhu Deguang
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Parent company income statement for the year ended December 31, 2021
Unit：RMB
Items Current period cumulative Preceding period comparative
I. Operating revenue 4,244,074,740.42 4,176,303,767.88
Less: Operating cost 3,883,235,776.32 3,527,999,329.09
Taxes and surcharges 19,465,458.59 21,067,498.22
Selling expenses 38,690,956.59 67,368,855.84
Administrative expenses 324,739,564.30 277,058,369.13
R&D expenses 43,692,074.72 59,701,745.21
Financial expenses 190,892,392.23 328,740,785.58
Including: Interest expenses 232,182,345.26 237,028,665.44
Interest income 80,410,545.58 34,008,241.90
Add: Other income 15,687,436.18 13,049,853.51
Investment income (or less: losses) 562,696,915.32 363,631,155.33
Including: Investment income from associates and joint
-7,099,445.94 6,412,017.44
ventures
Gains on changes in fair value (or less: losses) 7,766,360.00 8,309,600.00
Credit impairment loss 40,737,910.06 -90,728,600.17
Assets impairment loss -29,305,690.70
Gains on asset disposal (or less: losses) 236,751.46 -3,926,734.10
II. Operating profit (or less: losses) 341,178,199.99 184,702,459.38
Add: Non-operating revenue 1,322,195.03 12,000,000.00
Less: Non-operating expenditures 1,389,386.90 5,782,225.10
III. Profit before tax (or less: total loss) 341,111,008.12 190,920,234.28
Less: Income tax -23,818,369.37 -15,855,385.56
IV. Net profit (or less: net loss) 364,929,377.49 206,775,619.84
(I) Net profit from continuing operations (or less: net loss) 364,929,377.49 206,775,619.84
(II) Net profit from discontinued operations (or less: net loss)
V. Other comprehensive income after tax
VI. Total comprehensive income 364,929,377.49 206,775,619.84
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Consolidated cash flow statement for the year ended December 31, 2021
Unit: RMB
Items Current period cumulative Preceding period comparative
I. Cash flows from operating activities:
Cash receipts from sale of goods or rendering of services 29,815,812,937.85 26,873,781,591.53
Receipts of tax refund 1,243,753,661.97 1,016,052,066.14
Other cash receipts related to operating activities 512,083,240.76 1,017,818,722.94
Subtotal of cash inflows from operating activities 31,571,649,840.58 28,907,652,380.61
Cash payments for goods purchased and services received 23,091,788,130.30 21,167,542,452.52
Cash paid to and on behalf of employees 4,026,453,550.20 3,577,192,069.71
Cash payments for taxes and rates 519,261,401.11 419,793,256.48
Other cash payments related to operating activities 724,602,274.76 810,955,707.25
Subtotal of cash outflows from operating activities 28,362,105,356.37 25,975,483,485.96
Net cash flows from operating activities 3,209,544,484.21 2,932,168,894.65
II. Cash flows from investing activities:：
Cash receipts from withdrawal of investments 1,221,008,889.75 8,500,000.00
Cash receipts from investment income 21,034,758.46 19,360,758.39
Net cash receipts from the disposal of fixed assets, intangible
14,867,642.54 132,109,214.21
assets and other long-term assets
Net cash receipts from the disposal of subsidiaries & other
29,581,735.55
business units
Other cash receipts related to investing activities 614,294,406.73 340,408,535.48
Subtotal of cash inflows from investing activities 1,871,205,697.48 529,960,243.63
Cash payments for the acquisition of fixed assets, intangible
3,049,208,456.95 2,390,718,571.68
assets and other long-term assets
Cash payments for investments 849,056,781.87 1,237,188,776.62
Other cash payments related to investing activities 1,288.94
Subtotal of cash outflows from investing activities 3,898,266,527.76 3,627,907,348.30
Net cash flows from investing activities -2,027,060,830.28 -3,097,947,104.67
III. Cash flows from financing activities:
Cash receipts from absorbing investments 17,800,000.00 2,935,855,800.00
Including: Cash received by subsidiaries from non-controlling
17,800,000.00 67,100,000.00
shareholders as investments
Cash receipts from borrowings 9,629,498,697.60 13,141,749,676.63
Other cash receipts related to financing activities 3,921,528,258.50 5,310,681,482.11
Subtotal of cash inflows from financing activities 13,568,826,956.10 21,388,286,958.74
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Cash payments for the repayment of borrowings 8,348,766,123.52 13,709,859,928.08
Cash payments for distribution of dividends or profits and for
456,920,317.80 575,776,591.34
interest expenses
Other cash payments related to financing activities 4,856,990,811.10 5,999,002,986.97
Subtotal of cash outflows from financing activities 13,662,677,252.42 20,284,639,506.39
Net cash flows from financing activities -93,850,296.32 1,103,647,452.35
IV. Effect of foreign exchange rate changes on cash & cash
-22,467,316.29 -11,595,027.58
equivalents
V. Net increase in cash and cash equivalents 1,066,166,041.32 926,274,214.75
Add: Opening balance of cash and cash equivalents 2,873,135,085.47 1,946,860,870.72
VI. Closing balance of cash and cash equivalents 3,939,301,126.79 2,873,135,085.47
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Parent company cash flow statement for the year ended December 31, 2021
Unit: RMB
Items Current period cumulative Preceding period comparative
I. Cash flows from operating activities:
Cash receipts from sale of goods and rendering of services 3,363,805,354.17 4,100,442,519.83
Receipts of tax refund 134,161,286.35 112,809,807.52
Other cash receipts related to operating activities 3,081,500,098.60 1,225,133,552.27
Subtotal of cash inflows from operating activities 6,579,466,739.12 5,438,385,879.62
Cash payments for goods purchased and services received 4,090,981,643.21 4,419,569,654.69
Cash paid to and on behalf of employees 398,660,527.63 364,350,627.14
Cash payments for taxes and rates 33,744,370.30 61,601,122.75
Other cash payments related to operating activities 592,980,732.05 1,871,683,692.06
Subtotal of cash outflows from operating activities 5,116,367,273.19 6,717,205,096.64
Net cash flows from operating activities 1,463,099,465.93 -1,278,819,217.02
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments 252,000,000.00 142,000,000.00
Cash receipts from investment income 356,296,361.26 245,342,322.01
Net cash receipts from the disposal of fixed assets, intangible
31,699,821.28 447,367,880.73
assets and other long-term assets
Other cash receipts related to investing activities 50,000,000.00 3,800,640.02
Subtotal of cash inflows from investing activities 689,996,182.54 838,510,842.76
Cash payments for the acquisition of fixed assets, intangible
233,002,384.33 465,792,578.28
assets and other long-term assets
Cash payments for investments 1,086,517,692.36 608,035,700.00
Subtotal of cash outflows from investing activities 1,319,520,076.69 1,073,828,278.28
Net cash flows from investing activities -629,523,894.15 -235,317,435.52
III. Cash flows from financing activities:
Cash receipts from absorbing investments 2,868,755,800.00
Cash receipts from borrowings 3,991,741,102.36 5,396,272,516.90
Other cash receipts related to financing activities 172,300,000.00
Subtotal of cash inflows from financing activities 3,991,741,102.36 8,437,328,316.90
Cash payments for the repayment of borrowings 3,495,543,277.60 6,227,823,977.88
Cash payments for distribution of dividends or profits and for
396,644,933.48 298,599,474.73
interest expenses
Other cash payments related to financing activities 274,156,177.46 384,413,186.37
Subtotal of cash outflows from financing activities 4,166,344,388.54 6,910,836,638.98
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Net cash flows from financing activities -174,603,286.18 1,526,491,677.92
IV. Effect of foreign exchange rate changes on cash and cash
-1,751,977.28 -10,446,914.88
equivalents
V. Net increase in cash and cash equivalents 657,220,308.32 1,908,110.50
Add: Opening balance of cash and cash equivalents 273,162,856.89 271,254,746.39
VI. Closing balance of cash and cash equivalents 930,383,165.21 273,162,856.89
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Consolidated statement of changes in equity for the year ended December 31, 2021
Unit: RMB
Current period cumulative
Equity attributable to parent company
Items Less: Non-controlling
Other
Surplus Undistributed Total equity
Share capital Capital reserve Treasury comprehensive Subtotal interest
reserve profit
shares income
I. Balance at the end of prior
1,709,867,327.00 8,136,879,413.39 -451,615,637.76 75,205,377.40 3,598,580,392.76 13,068,916,872.79 106,051,055.46 13,174,967,928.25
year
II. Balance at the beginning of
1,709,867,327.00 8,136,879,413.39 -451,615,637.76 75,205,377.40 3,598,580,392.76 13,068,916,872.79 106,051,055.46 13,174,967,928.25
current year
III. Current period increase
-37,354,540.49 100,479,794.32 -68,010,428.45 36,492,937.75 1,676,935,277.87 1,507,583,452.36 -12,208,841.43 1,495,374,610.93
(or less: decrease)
(I) Total comprehensive income -46,074,281.99 1,862,481,138.84 1,816,406,856.85 -1,581,440.71 1,814,825,416.14
(II) Capital contributed or
-37,354,540.49 100,479,794.32 -2,336.98 -137,836,671.79 -10,602,369.68 -148,439,041.47
withdrawn by owners
1. Ordinary shares contributed
17,800,000.00 17,800,000.00
by owners
2. Others -37,354,540.49 100,479,794.32 -2,336.98 -137,836,671.79 -28,402,369.68 -166,239,041.47
(III) Profit distribution 36,492,937.75 -207,479,670.45 -170,986,732.70 -25,031.04 -171,011,763.74
1. Appropriation of surplus
36,492,937.75 -36,492,937.75
reserve
3. Appropriation of profit to
-170,986,732.70 -170,986,732.70 -25,031.04 -171,011,763.74
owners
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(IV) Internal carry-over within
-21,936,146.46 21,936,146.46
equity
1. Other comprehensive income
-21,936,146.46 21,936,146.46
carried over to retained earnings
IV. Balance at the end of
1,709,867,327.00 8,099,524,872.90 100,479,794.32 -519,626,066.21 111,698,315.15 5,275,515,670.63 14,576,500,325.15 93,842,214.03 14,670,342,539.18
current period
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Unit: RMB
Preceding period comparative
Equity attributable to parent company
Items Other Non-controlling
Surplus Undistributed Total equity
Share capital Capital reserve comprehensive Subtotal interest
reserve profit
income
I. Balance at the end of prior
1,606,572,477.00 5,356,838,750.59 -541,268,881.31 54,527,815.42 2,169,454,382.50 8,646,124,544.20 51,277,667.14 8,697,402,211.34
year
II. Balance at the beginning of
1,606,572,477.00 5,356,838,750.59 -541,268,881.31 54,527,815.42 2,169,454,382.50 8,646,124,544.20 51,277,667.14 8,697,402,211.34
current year
III. Current period increase (or
103,294,850.00 2,780,040,662.80 89,653,243.55 20,677,561.98 1,429,126,010.26 4,422,792,328.59 54,773,388.32 4,477,565,716.91
less: decrease)
(I) Total comprehensive income 89,653,243.55 1,530,132,196.09 1,619,785,439.64 7,054,987.91 1,626,840,427.55
(II) Capital contributed or
103,294,850.00 2,780,040,662.80 2,883,335,512.80 47,718,400.41 2,931,053,913.21
withdrawn by owners
1. Ordinary shares contributed by
103,294,850.00 2,760,659,063.21 2,863,953,913.21 67,100,000.00 2,931,053,913.21
owners
2. Others 19,381,599.59 19,381,599.59 -19,381,599.59
(III) Profit distribution 20,677,561.98 -101,006,185.83 -80,328,623.85 -80,328,623.85
1. Appropriation of surplus
20,677,561.98 -20,677,561.98
reserve
2. Appropriation of profit to
-80,328,623.85 -80,328,623.85 -80,328,623.85
owners
IV. Balance at the end of
1,709,867,327.00 8,136,879,413.39 -451,615,637.76 75,205,377.40 3,598,580,392.76 13,068,916,872.79 106,051,055.46 13,174,967,928.25
current period
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Parent company statement of changes in equity for the year ended December 31, 2021
Unit：RMB
Current period cumulative
Other
Items Less: Treasury
Share capital Capital reserve comprehensive Surplus reserve Undistributed profit Total equity
shares
income
I. Balance at the end of prior year 1,709,867,327.00 7,961,185,289.83 -350,000,000.00 75,205,377.40 195,368,894.02 9,591,626,888.25
II. Balance at the beginning of current year 1,709,867,327.00 7,961,185,289.83 -350,000,000.00 75,205,377.40 195,368,894.02 9,591,626,888.25
III. Current period increase (or less: decrease) 100,479,794.32 36,492,937.75 157,449,707.04 93,462,850.47
(I) Total comprehensive income 364,929,377.49 364,929,377.49
(II) Capital contributed or withdrawn by owners 100,479,794.32 -100,479,794.32
1. Ordinary shares contributed by owners 100,479,794.32 -100,479,794.32
(III) Profit distribution 36,492,937.75 -207,479,670.45 -170,986,732.70
1. Appropriation of surplus reserve 36,492,937.75 -36,492,937.75
2. Appropriation of profit to owners -170,986,732.70 -170,986,732.70
IV. Balance at the end of current period 1,709,867,327.00 7,961,185,289.83 100,479,794.32 -350,000,000.00 111,698,315.15 352,818,601.06 9,685,089,738.72
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Unit：RMB
Preceding period comparative
Items Other comprehensive
Share capital Capital reserve Surplus reserve Undistributed profit Total equity
income
I. Balance at the end of prior year 1,606,572,477.00 5,200,526,226.62 -350,000,000.00 54,527,815.42 89,599,460.01 6,601,225,979.05
II. Balance at the beginning of current year 1,606,572,477.00 5,200,526,226.62 -350,000,000.00 54,527,815.42 89,599,460.01 6,601,225,979.05
III. Current period increase (or less: decrease) 103,294,850.00 2,760,659,063.21 20,677,561.98 105,769,434.01 2,990,400,909.20
(I) Total comprehensive income 206,775,619.84 206,775,619.84
(II) Capital contributed or withdrawn by owners 103,294,850.00 2,760,659,063.21 2,863,953,913.21
1. Ordinary shares contributed by owners 103,294,850.00 2,760,659,063.21 2,863,953,913.21
(III) Profit distribution 20,677,561.98 -101,006,185.83 -80,328,623.85
1. Appropriation of surplus reserve 20,677,561.98 -20,677,561.98
2. Appropriation of profit to owners -80,328,623.85 -80,328,623.85
IV. Balance at the end of current period 1,709,867,327.00 7,961,185,289.83 -350,000,000.00 75,205,377.40 195,368,894.02 9,591,626,888.25
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III. Company Profile
Suzhou Dongshan Precision Manufacturing Co., Ltd. (“Company” or “the Company”) is a joint stock company with
limited liability converted from Suzhou Dong Shan Sheet Metal Co., Ltd. which was registered at the Administration
for Industry and Commerce of Wuxian City on October 28, 1998 and converted into the Company on the benchmark
date of September 30, 2007. The Company, headquartered in Suzhou City, Jiangsu Province, was registered at the
Administration for Industry and Commerce of Suzhou City, Jiangsu Province on December 24, 2007, with a business
license with unified social credit code of 91320500703719732P and a registered capital of RMB1,709,867,327.00 at
present. The Company has held 1,709,867,327 shares (each with par value of RMB 1) in total, of which, 319,591,987
shares are restricted outstanding A shares, and 1,390,275,340 shares are unrestricted outstanding A shares. The
Company’s shares were listed at the Shenzhen Stock Exchange on April 9, 2010.
The Company belongs to the manufacturing industry relating to computer, communication and other electronic
equipment, and is mainly engaged in providing core devices for intelligent interconnection and interoperability. The
Company’s key products include PCBs, LED display devices, Touch panels and LCMs and precision components.
The financial statements were approved and authorized for issue by the 20nd meeting of the 5th session of the Board of
Directors dated April 19, 2022.
Sixty-four subsidiaries and sub-subsidiaries have been incorporated in the scope of the consolidated financial statements
by the end of the Reporting Period, such as Multi-Fineline Electronix Inc.(“MFLEX”), Multek Group (Hong Kong)
Limited(“Multek”) and Yancheng Dongshan Precision Manufacturing Co., Ltd. Please refer to Note VIII and IX to the
financial statements for details.
IV. Preparation Basis of the Financial Statements
1. Preparation basis
The financial statements have been prepared on the basis of going concern.
2. Going concern
The Company has no events or conditions that may cast significant doubts upon the Company’s ability to continue as a
going concern within the 12 months after the end of the reporting period.
V. Significant accounting policies and estimates
Important note:
The Company has set up accounting policies and estimates on transactions or events such as impairment of financial
instruments, depreciation of fixed assets, depreciation of right-of-use assets, amortization of intangible assets, revenue
recognition, etc., based on the Company’s actual production and operation features.
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1. Statement of compliance
The financial statements have been prepared in accordance with the requirements of China Accounting Standards for
Business Enterprises (CASBEs), and present truly and completely the financial position, results of operations and cash
flows of the Company.
2. Accounting period
The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.
3. Operating cycle
The Company has a relatively short operating cycle for its business, an asset or a liability is classified as current if it is
expected to be realized or due within 12 months.
4. Functional currency
The functional currency of the Company is RMB Yuan, while MFLEX takes US Dollar as its functional currency.
Subsidiaries of MFLEX, Multek as well as other subsidiaries engaged in overseas operations take the currency of the
primary economic environment in which they operate as their functional currency.
5. Accounting treatments of business combination under and not under common control
(1) Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined party
included in the consolidated financial statements of the ultimate controlling party at the combination date. Difference
between carrying amount of the equity of the combined party included in the consolidated financial statements of the
ultimate controlling party and that of the combination consideration or total par value of shares issued is adjusted to
capital reserve, if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.
(2) Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree at the
acquisition date, the excess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities and
contingent liabilities, and the measurement of the combination cost are reviewed, then the difference is recognized in
profit or loss.
6. Compilation method of consolidated financial statements
(1) The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidated financial
statements are compiled by the parent company according to “CASBE 33 – Consolidated Financial Statements”, based
on relevant information and the financial statements of the parent company and its subsidiaries.
(2) Accounting treatments on the subsidiary whose equity is sold after purchase or repurchased after sale within two
consecutive accounting years
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7. Classification of joint arrangements and accounting treatment of joint operations
(1) Joint arrangements include joint operations and joint ventures.
(2) When the Company is a joint operator of a joint operation, it recognizes the following items in relation to its interest
in a joint operation:
1) its assets, including its share of any assets held jointly;
2) its liabilities, including its share of any liabilities incurred jointly;
3) its revenue from the sale of its share of the output arising from the joint operation;
4) its share of the revenue from the sale of the assets by the joint operation; and
5) its expenses, including its share of any expenses incurred jointly.
8. Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash equivalents
refer to short-term, highly liquid investments that can be readily converted to known amounts of cash and that are
subject to an insignificant risk of changes in value.
9. Conversion of Transactions and Financial Statements Denominated in Foreign Currencies.
(1) Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the spot exchange rate/the approximate
exchange rate similar to the spot exchange rate at the transaction date at initial recognition. At the balance sheet date,
monetary items denominated in foreign currency are translated at the spot exchange rate at the balance sheet date with
difference, except for those arising from the principal and interest of exclusive borrowings eligible for capitalization,
included in profit or loss; non-cash items carried at historical costs are translated at the spot exchange rate/the
approximate exchange rate similar to the spot exchange rate at the transaction date, with the RMB amounts unchanged;
non-cash items carried at fair value in foreign currency are translated at the spot exchange rate at the date when the fair
value was determined, with difference included in profit or loss or other comprehensive income.
(2) Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the balance sheet date; the
equity items, other than undistributed profit, are translated at the spot rate at the transaction date; the revenues and
expenses in the income statement are translated into RMB at the spot exchange rate/the approximate exchange rate
similar to the spot exchange rate at the transaction date. The difference arising from the aforementioned foreign
currency translation is included in other comprehensive income.
10. Financial instruments
(1) Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when initially recognized: 1) financial assets at
amortized cost; 2) financial assets at fair value through other comprehensive income; 3) financial assets at fair value
through profit or loss.
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Financial liabilities are classified into the following four categories when initially recognized: 1) financial liabilities at
fair value through profit or loss; 2) financial liabilities that arise when a transfer of a financial asset does not qualify for
derecognition or when the continuing involvement approach applies; 3) financial guarantee contracts not fall within the
above categories 1) and 2), and commitments to provide a loan at a below-market interest rate, which do not fall within
the above category 1); 4) financial liabilities at amortized cost.
(2) Recognition criteria, measurement method and derecognition condition of financial assets and financial
liabilities
1) Recognition criteria and measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument, it is recognized as a financial asset or financial liability.
The financial assets and financial liabilities initially recognized by the Company are measured at fair value; for the
financial assets and liabilities at fair value through profit or loss, the transaction expenses thereof are directly included
in profit or loss; for other categories of financial assets and financial liabilities, the transaction expenses thereof are
included into the initially recognized amount. However, at initial recognition, for accounts receivable that do not
contain a significant financing component or in circumstances where the Company does not consider the financing
components in contracts within one year, the Company measures the transaction price in accordance with “CASBE 14 –
Revenues”.
2) Subsequent measurement of financial assets
①Financial assets measured at amortized cost
The Company measures its financial assets at the amortized costs using effective interest method. Gains or losses on
financial assets that are measured at amortized cost and are not part of hedging relationships shall be included into profit
or loss when the financial assets are derecognized, reclassified, amortized using effective interest method or recognized
with impairment loss.
②Debt instrument investments at fair value through other comprehensive income
The Company measures its debt instrument investments at fair value. Interests, impairment gains or losses, and gains
and losses on foreign exchange that calculated using effective interest method shall be included into profit or loss, while
other gains or losses are included into other comprehensive income. Accumulated gains or losses that initially
recognized as other comprehensive income should be transferred out into profit or loss when the financial assets are
derecognized.
③Equity instrument investments at fair value through other comprehensive income
The Company measures its equity instrument investments at fair value. Dividends obtained (other than those as part of
investment cost recovery) shall be included into profit or loss, while other gains or losses are included into other
comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive income should be
transferred out into retained earnings when the financial assets are derecognized.
④Financial assets at fair value through profit or loss
For financial asset at fair value through profit and loss, subsequent measurement will be calculated at fair value. Gains
or losses arising from changes in fair value (including interests and dividends) shall be included into profit or loss,
except for financial assets that are part of hedging relationships.
3) Subsequent measurement of financial liabilities
①Financial liabilities at fair value through profit or loss
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Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (including derivatives
that are liabilities) and financial liabilities designated as at fair value through profit or loss. The Company measures
such kind of liabilities at fair value. The amount of changes in the fair value of the financial liabilities that are
attributable to changes in the Company’s own credit risk shall be included into other comprehensive income, unless
such treatment would create or enlarge accounting mismatches in profit or loss. Other gains or losses on those financial
liabilities (including interests, changes in fair value that are attributable to reasons other than changes in the Company’s
own credit risk) shall be included into profit or loss, except for financial liabilities that are part of hedging relationships.
Accumulated gains or losses that originally recognized as other comprehensive income should be transferred out into
retained earnings when the financial liabilities are derecognized.
②Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the
continuing involvement approach applies
The Company measures its financial liabilities in accordance with “CASBE 23 – Transfer of Financial Assets”.
③Financial guarantee contracts not fall within the above categories ① and ②, and commitments to provide a loan at
a below-market interest rate, which do not fall within the above category
The Company measures its financial liabilities at the higher of:
a. the amount of loss allowances in accordance with impairment requirements of financial instruments;
b. the amount initially recognized less the amount of accumulated amortization recognized in accordance with “CASBE
14 – Revenues”.
④Financial liabilities at amortized cost
The Company measures its financial liabilities at amortized cost using effective interest method. Gains or losses on
financial liabilities that are measured at amortized cost and are not part of hedging relationships shall be included into
profit or loss when the financial liabilities are derecognized and amortized using effective interest method.
4) Derecognition of financial assets and financial liabilities
Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire; or
b. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with “CASBE 23
– Transfer of Financial Assets”.
Only when the underlying present obligations of a financial liability are relieved totally or partly may the financial
liability be derecognized accordingly.
(3) Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of the financial
asset, it derecognizes the financial asset, and any right or liability arising from such transfer is recognized independently
as an asset or a liability. If it retained substantially all of the risks and rewards related to the ownership of the financial
asset, it continues recognizing the financial asset.
Where the Company does not transfer or retain substantially all of the risks and rewards related to the ownership of a
financial asset, it is dealt with according to the circumstances as follows respectively:
a. if the Company does not retain its control over the financial asset, it derecognizes the financial asset, and any right
or liability arising from such transfer is recognized independently as an asset or a liability;
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b. if the Company retains its control over the financial asset, according to the extent of its continuing involvement in the
transferred financial asset, it recognizes the related financial asset and recognizes the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the amounts
of the following two items is included in profit or loss:
a the carrying amount of the transferred financial asset as of the date of derecognition;
b the sum of consideration received from the transfer of the financial asset, and the accumulative amount of the changes
of the fair value originally included in other comprehensive income proportionate to the transferred financial asset
(financial assets transferred refer to debt instrument investments at fair value through other comprehensive income).
If the transfer of financial assets partially satisfies the conditions to derecognition, the entire carrying amount of the
transferred financial assets is, between the portion which is derecognized and the portion which is not, apportioned
according to their respective relative fair value, and the difference between the amounts of the following two items is
included into profit or loss:
a the carrying amount of the portion which is derecognized;
b the sum of consideration of the portion which is derecognized, and the portion of the accumulative amount of the
changes in the fair value originally included in other comprehensive income which is corresponding to the portion
which is derecognized (financial assets transferred refer to debt instrument investments at fair value through other
comprehensive income).
(4) Fair value determination method of financial assets and liabilities
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data and
information are available. The inputs to valuation techniques used to measure fair value are arranged in the following
hierarchy and used accordingly:
Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company can
access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly. They include: quoted prices for similar assets or liabilities in active markets; quoted prices
for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are
observable for the asset or liability, for example, interest rates and yield curves observable at commonly quoted
intervals; market-corroborated inputs;
Level 3 inputs are unobservable inputs for the asset or liability. They include interest rate that is not observable and
cannot be corroborated by observable market data at commonly quoted intervals, historical volatility, future cash flows
to be paid to fulfill the disposal obligation assumed in business combination, financial forecast developed using the
Company’s own data, etc.
(5) Impairment of financial instruments
1) Measurement and accounting treatment
The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets at amortized cost, debt
instrument investments at fair value through other comprehensive income, contract assets, leases receivable, loan
commitments other than financial liabilities at fair value through profit or loss, financial guarantee contracts not belong
to financial liabilities at fair value through profit or loss or financial liabilities that arise when a transfer of a financial
asset does not qualify for derecognition or when the continuing involvement approach applies.
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Expected credit losses refer to the weighted average of credit losses with the respective risks of a default occurring as
the weights. Credit loss refers to the difference between all contractual cash flows that are due to the Company in
accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls),
discounted at the original effective interest rate. Among which, purchased or originated credit-impaired financial assets
are discounted at the credit-adjusted effective interest rate.
At the balance sheet date, the Company shall only recognize the cumulative changes in the lifetime expected credit
losses since initial recognition as a loss allowance for purchased or originated credit-impaired financial assets.
For leases receivable, and accounts receivable and contract assets resulting from transactions regulated in “CASBE 14 –
Revenues” which do not contain a significant financing component or in circumstances where the Company does not
consider the financing components in contracts within one year, the Company chooses simplified approach to measure
the loss allowance at an amount equal to lifetime expected credit losses.
For financial assets other than the above, on each balance sheet date, the Company shall assess whether the credit risk
on the financial instrument has increased significantly since initial recognition. The Company shall measure the loss
allowance for the financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that
financial instrument has increased significantly since initial recognition; otherwise, the Company shall measure the loss
allowance for that financial instrument at an amount equal to 12-month expected credit loss.
Considering reasonable and supportable forward-looking information, the Company compares the risk of a default
occurring on the financial instrument as at the balance sheet date with the risk of a default occurring on the financial
instrument as at the date of initial recognition, so as to assess whether the credit risk on the financial instrument has
increased significantly since initial recognition.
The Company may assume that the credit risk on a financial instrument has not increased significantly since initial
recognition if the financial instrument is determined to have relatively low credit risk at the balance sheet date.
The Company shall estimate expected credit risk and measure expected credit losses on an individual or a collective
basis. When the Company adopts the collective basis, financial instruments are grouped with similar credit risk features.
The Company shall remeasure expected credit loss on each balance sheet date, and increased or reversed amounts of
loss allowance arising therefrom shall be included into profit or loss as impairment losses or gains. For a financial asset
measured at amortized cost, the loss allowance reduces the carrying amount of such financial asset presented in the
balance sheet; for a debt investment measured at fair value through other comprehensive income, the loss allowance
shall be recognized in other comprehensive income and shall not reduce the carrying amount of such financial asset.
2) Financial instruments with expected credit risk assessed and expected credit losses measured on a collective basis
Items Basis for determination of portfolio Method for measuring expected credit loss
Other receivables - Portfolio grouped Based on historical credit loss experience, the current
Aging
with aging situation and the forecast of future economic
Other receivables - Portfolio grouped conditions, the Company calculates expected credit
Related parties within the
with related parties within the loss through exposure at default and 12-month or
consolidation scope
consolidation scope lifetime expected credit loss rate.
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3) Accounts receivable and contract assets with expected credit losses measured on a collective basis
a. Specific portfolios and method for measuring expected credit loss
Basis for determination of
Items Method for measuring expected credit loss
portfolio
Bank acceptance receivable Based on historical credit loss experience, the current
situation and the forecast of future economic conditions, the
Type of notes
Trade acceptance receivable Company calculates expected credit loss through exposure at
default and lifetime expected credit loss rate.
Based on historical credit loss experience, the current
situation and the forecast of future economic conditions, the
Accounts receivable - Portfolio grouped
Aging Company prepares the comparison table of aging and lifetime
with aging
expected credit loss rate of accounts receivable, so as to
calculate expected credit loss.
Based on historical credit loss experience, the current
Accounts receivable - Portfolio grouped
Related parties within the situation and the forecast of future economic conditions, the
with related parties within the
consolidation scope Company calculates expected credit loss through exposure at
consolidation scope
default and lifetime expected credit loss rate.
Based on historical credit loss experience, the current
Long-term receivables - Portfolio situation and the forecast of future economic conditions, the
Nature of receivables
grouped with security deposits Company calculates expected credit loss through exposure at
default and lifetime expected credit loss rate.
b Accounts receivable - comparison table of aging and lifetime expected credit loss rate of portfolio grouped with aging
Aging Expected credit loss rate (%)
Within 6 months(inclusive,the same hereinafter) 0.5
7-12 months 5
1-2 years 20
2-3 years 60
Over 3 years 100
(6) Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset. However, the
Company offsets a financial asset and a financial liability and presents the net amount in the balance sheet when, and
only when, the Company: currently has a legally enforceable right to set off the recognized amounts, and intends either
to settle on a net basis, or to realize the asset and settle the liability simultaneously.
For a transfer of a financial asset that does not qualify for derecognition, the Company does not offset the transferred
asset and the associated liability.
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11. Inventories
(1) Classification of inventories
Inventories include finished goods or goods held for sale in the ordinary course of business, work in process in the
process of production, materials or supplies etc., to be consumed in the production process or in the rendering of
services.
(2) Accounting method for dispatching inventories
Inventories dispatched from storage are accounted for with weighted average method at the end of each month.
(3) Basis for determining net realizable value
At the balance sheet date, inventories are measured at the lower of cost and net realizable value; provisions for
inventory write-down are made on the excess of its cost over the net realizable value. The net realizable value of
inventories held for sale is determined based on the amount of the estimated selling price less the estimated selling
expenses and relevant taxes and surcharges in the ordinary course of business; the net realizable value of materials to be
processed is determined based on the amount of the estimated selling price less the estimated costs of completion,
selling expenses and relevant taxes and surcharges in the ordinary course of business; at the balance sheet date, when
only part of the same item of inventories have agreed price, their net realizable value is determined separately and is
compared with their costs to set the provision for inventory write-down to be made or reversed.
(4) Inventory system
Perpetual inventory method is adopted.
(5) Amortization method of low-value consumables and packages
1) Low-value consumables are amortized with one-off method.
2) Packages are amortized with one-off method.
12. Contract Assets
The Company lists contract assets or contract liabilities in the balance sheet according to the relationship between its
performance obligations and customer payments.
The Company shall present the contract assets and contract liabilities under the same contract in net amount after
offsetting each other.
The Company lists the right to receive consideration from customers unconditionally (namely only depending on the
passage of time) as accounts receivable, and the right to receive consideration after transferring goods to customers (the
right depends on other factors other than the passage of time) as contract assets.
13. Contract costs
Assets related to contract costs including costs of obtaining a contract and costs to fulfil a contract.
The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are expected to be
recovered. The costs of obtaining a contract shall be included into profit or loss when incurred if the amortization period
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of the asset is one year or less.
If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories, fixed assets or
intangible assets, etc., the Company shall recognize the costs to fulfil a contract as an asset if all the following criteria
are satisfied:
1. The costs relate directly to a contract or to an anticipated contract, including direct labor, direct materials,
manufacturing overhead cost (or similar cost), cost that are explicitly chargeable to the customer under the contract,
and other costs that are only related to the contract;
2. The costs enhance resources of the Company that will be used in satisfying performance obligations in the future;
and
3. The costs are expected to be recovered.
An asset related to contract costs shall be amortized on a systematic basis that is consistent with related goods or
services, with amortization included into profit or loss.
The Company shall make provision for impairment and recognize an impairment loss, to the extent that the carrying
amount of an asset related to contract costs exceeds the remaining amount of consideration that the Company expects to
receive in exchange for the goods or services to which the asset relates, less the costs expected to be incurred. The
Company shall recognize a reversal of an impairment loss previously recognized in profit or loss when the impairment
conditions no longer exist or have improved. The carrying amount of the asset after the reversal shall not exceed the
amount that would have been determined on the reversal date if no provision for impairment had been made previously.
14. Long-term equity investments
(1) Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about
the relevant activities require the unanimous consent of the parties sharing control.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not
control or joint control of these policies.
(2) Determination of investment cost
1) For business combination under common control, if the consideration of the combining party is that it makes
payment in cash, transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of combination,
it regards the share of the carrying amount of the equity of the combined party included in the consolidated financial
statements of the ultimate controlling party as the initial cost of the investment. The difference between the initial cost
of the long-term equity investments and the carrying amount of the combination consideration paid or the par value of
shares issued offsets capital reserve; if the balance of capital reserve is insufficient to offset, any excess is adjusted to
retained earnings.
When long-term equity investments are obtained through business combination under common control achieved in
stages, the Company determines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as a whole
are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, on the date of
combination, investment cost is initially recognized at the share of the carrying amount of net assets of the combined
party included in the consolidated financial statements of the ultimate controlling party. The difference between the
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initial investment cost of long-term equity investments at the acquisition date, and the carrying amount of the previously
held long-term equity investments plus the carrying amount of the consideration paid for the newly acquired equity, is
adjusted to capital reserve; if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained
earnings.
2) For business combination not under common control, investment cost is initially recognized at the acquisition-date
fair value of considerations paid. As for business combinations which involve enterprises not under common control
and are carried out in stages, the accounting treatment of stand-alone financial report and consolidated financial report
shall be different:
① In the stand-alone financial report, the initial investment cost, which is accounted for using the newly adopted cost
method, is the sum of carrying value of equity investment originally held and the addition of investment cost.
② In the case of consolidated financial statements, the Company determines whether it is a “bundled transaction”. If it
is a “bundled transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a
“bundled transaction”, the carrying amount of the acquirer’s previously held equity interest in the acquiree is
remeasured at the acquisition-date fair value, and the difference between the fair value and the carrying amount is
recognized in investment income; when the acquirer’s previously held equity interest in the acquiree involves other
comprehensive income under equity method, the related other comprehensive income is reclassified as income for the
acquisition period, excluding other comprehensive income arising from changes in net liabilities or assets from
remeasurement of defined benefit plan of the acquiree.
3) Long-term equity investments obtained through ways other than business combination: the initial cost of a long-term
equity investment that obtained by making payment in cash is the purchase cost which is actually paid; that obtained on
the basis of issuing equity securities is the fair value of the equity securities issued; that obtained through debt
restructuring is determined according to “CASBE 12 – Debt Restructuring”; and that obtained through non-cash assets
exchange is determined according to “CASBE 7 – Non-cash Assets Exchange”.
(3) Subsequent measurement and recognition method of profit or loss
For long-term equity investments with control relationship, it is accounted for with cost method; for long-term equity
investments with joint control or significant influence relationship, it is accounted for with equity method.
(4) Disposal of a subsidiary in stages resulting in the Company’s loss of control
1) Stand-alone financial statements
The difference between the carrying amount of the disposed equity and the consideration obtained thereof is recognized
in profit or loss. If the disposal does not result in the Company’s loss of significant influence or joint control, the
remained equity is accounted for with equity method; however, if the disposal results in the Company’s loss of control,
joint control, or significant influence, the remained equity is accounted for according to “CASBE 22 – Financial
Instruments: Recognition and Measurement”.
2) Consolidated financial statements
① Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in the Company’s loss of control
Before the Company’s loss of control, the difference between the disposal consideration and the proportionate share of
net assets in the disposed subsidiary from acquisition date or combination date to the disposal date is adjusted to capital
reserve (capital premium), if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained
earnings. When the Company loses control, the remained equity is remeasured at the loss-of-control-date fair value. The
aggregated value of disposal consideration and the fair value of the remained equity, less the share of net assets in the
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disposed subsidiary held before the disposal from the acquisition date or combination date to the disposal date, is
recognized in investment income in the period when the Company loses control over such subsidiary, and meanwhile
goodwill is offset correspondingly. Other comprehensive income related to equity investments in former subsidiary is
reclassified as investment income upon the Company’s loss of control.
② Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in the Company’s loss of control
In case of “bundled transaction”, stages as a whole are considered as one transaction resulting in loss of control in
accounting treatment. However, before the Company loses control, the difference between the disposal consideration at
each stage and the proportionate share of net assets in the disposed subsidiary, is recognized as other comprehensive
income at the consolidated financial statements, and reclassified as profit or loss in the period when the Company loses
control over such subsidiary.
15. Investment property
(1) Investment properties include the right to use the leased land, the land held for appreciation and transfer and the
leased buildings.
(2) The initial measurement of investment properties is based on its cost, and subsequent measurement is made using
the cost model. The depreciation or amortization method is the same as that of fixed assets and intangible assets.
16. Fixed assets
(1) Recognition principles of fixed assets
Fixed assets are tangible assets held for use in the production of goods or rendering of services, for rental to others, or
for administrative purposes, and expected to be used during more than one accounting year. Fixed assets are recognized
if, and only if, it is probable that future economic benefits associated with the assets will flow to the Company and the
cost of the assets can be measured reliably.
(2) Depreciation method
Categories Depreciation method Useful life (years) Residual value proportion Annual depreciation rate
Buildings 20-30 5% 3.17%-4.75%
Machinery and equipment 5-10 5% 9.50%-19.00%
Straight-line method
Motor vehicles 5 5% 19.00%
Office equipment and others 5 5% 19.00%
17. Construction in progress
(1) Construction in progress is recognized if, and only if, it is probable that future economic benefits associated with the
item will flow to the Company, and the cost of the item can be measured reliably. Construction in progress is measured
at the actual cost incurred to reach its designed usable conditions.
(2) Construction in progress is transferred into fixed assets at its actual cost when it reaches the designed usable
conditions. When the auditing of the construction in progress was not finished while reaching the designed usable
conditions, it is transferred to fixed assets using estimated value first, and then adjusted accordingly when the actual
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cost is settled, but the accumulated depreciation is not to be adjusted retrospectively.
18. Borrowing costs
(1) Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and construction or
production of assets eligible for capitalization, it is capitalized and included in the costs of relevant assets; other
borrowing costs are recognized as expenses on the basis of the actual amount incurred, and are included in profit or
loss.
(2) Borrowing costs capitalization period
1) The borrowing costs are not capitalized unless the following requirements are all met: ① the asset disbursements
have already incurred; ② the borrowing costs have already incurred; and ③ the acquisition and construction or
production activities which are necessary to prepare the asset for its intended use or sale have already started.
2)Suspension of capitalization: where the acquisition and construction or production of a qualified asset is interrupted
abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs is
suspended; the borrowing costs incurred during such period are recognized as expenses, and are included in profit or
loss, till the acquisition and construction or production of the asset restarts.
3) Ceasing of capitalization: when the qualified asset under acquisition and construction or production is ready for the
intended use or sale, the capitalization of the borrowing costs is ceased.
(3) Capitalization rate and capitalized amount of borrowing costs
For borrowings exclusively for the acquisition and construction or production of assets eligible for capitalization, the
to-be-capitalized amount of interests is determined in light of the actual interest expenses incurred (including
amortization of premium or discount based on effective interest method) of the special borrowings in the current period,
less the interest income on the unused borrowings as a deposit in the bank or as a temporary investment.
For general borrowings used to acquire, construct or produce assets qualified for capitalization, the capitalized amount
of interests on general borrowings shall be determined on the basis that the weighted average (of the excess of
cumulative assets expenditures over the specific borrowings) times capitalization rate (of used general borrowings).
19. Intangible assets
(1) Intangible assets include land use right, patent right, application software, etc. The initial measurement of intangible
assets is based on its cost.
(2) Intangible assets with definite useful lives are reasonably amortized over their useful lives based on the pattern of
the economic benefits relating to the way they are expected to be realized. If it is unable to determine the expected
realization pattern reliably, intangible assets are amortized by the straight-line method. Details are as follows：
Items Amortization period (years)
Land use right 50
Development expenditure 5
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Application Software 3
Trademark and patent right 10
(3) Expenditures on the research phase of an internal project are recognized as profit or loss when they are incurred. An
intangible asset arising from the development phase of an internal project is recognized if the Company can demonstrate
all of the followings:
① the technical feasibility of completing the intangible asset so that it will be available for use or sale;
② its intention to complete the intangible asset and use or sell it;
③ how the intangible asset will generate probable future economic benefits, among other things, the Company can
demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be
used internally, the usefulness of the intangible asset;
④ the availability of adequate technical, financial and other resources to complete the development and to use or sell
the intangible asset; and
⑤ its ability to measure reliably the expenditure attributable to the intangible asset during its development.
20. Long-term Assets Impairment
For long-term assets such as long-term equity investments, fixed assets, construction in progress, intangible assets with
finite useful lives, etc., if at the balance sheet date there is indication of impairment, the recoverable amount is to be
estimated. For goodwill recognized in business combination and intangible assets with indefinite useful lives, no matter
whether there is indication of impairment, impairment test is performed annually. Impairment test on goodwill is
performed on related asset group or asset group portfolio.
When the recoverable amount of such long-term assets is lower than their carrying amount, the difference is recognized
as provision for assets impairment through profit or loss.
21. long-term deferred expenses
Long-term deferred expenses are expenses that have been recognized but with amortization period over one year
(excluding one year). They are recorded with actual cost, and evenly amortized within the beneficiary period or
stipulated period. If items of long-term deferred expenses fail to be beneficial to the following accounting periods,
residual values of such items are included in profit or loss.
22. Contract liabilities
The Company lists contract assets or contract liabilities in the balance sheet according to the relationship between its
performance obligations and customer payments.
The Company shall present the contract assets and contract liabilities under the same contract in net amount after
offsetting each other.
The company lists the obligation to transfer goods to customers for the consideration received or receivables from
customers as contract liabilities.
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23. Employee benefits
(1) Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides service, short-term employee
benefits actually incurred as liabilities, with a corresponding charge to profit or loss or the cost of a relevant asset.
(2) Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or defined benefit plans.
1) The Company recognizes the contribution payable to a defined contribution plan as a liability in the accounting
period in which an employee provides service, with a corresponding charge to profit or loss or the cost of a relevant
asset.
2) Accounting treatment by the Company for defined benefit plan usually involves the following steps:
① In accordance with the projected unit credit method, using unbiased and mutually compatible actuarial assumptions
to estimate related demographic variables and financial variables, measure the obligations under the defined benefit
plan, and determine the periods to which the obligations are attributed. Meanwhile, the Company discounts obligations
under the defined benefit plan to determine the present value of the defined benefit plan obligations and the current
service cost;
② When a defined benefit plan has assets, the Company recognizes the deficit or surplus by deducting the fair value of
defined benefit plan assets from the present value of the defined benefit plan obligation as a net defined benefit plan
liability or net defined benefit plan asset. When a defined benefit plan has a surplus, the Company measures the net
defined benefit plan asset at the lower of the surplus in the defined benefit plan and the asset ceiling;
③ At the end of the period, the Company recognizes the following components of employee benefits cost arising from
defined benefit plan: a. service cost; b. net interest on the net defined benefit plan liability (asset); and c. changes as a
result of remeasurement of the net defined benefit liability (asset). Item a and item b are recognized in profit or loss or
the cost of a relevant asset. Item c is recognized in other comprehensive income and is not to be reclassified
subsequently to profit or loss. However, the Company may transfer those amounts recognized in other comprehensive
income within equity.
(3) Termination benefits
Termination benefits provided to employees are recognized as an employee benefit liability for termination benefits,
with a corresponding charge to profit or loss at the earlier of the following dates: 1) when the Company cannot
unilaterally withdraw the offer of termination benefits because of an employment termination plan or a curtailment
proposal; or 2) when the Company recognizes cost or expenses related to a restructuring that involves the payment of
termination benefits
(4) Other long-term employee benefits
When other long-term employee benefits provided to the employees satisfied the conditions for classifying as a defined
contribution plan, those benefits are accounted for in accordance with the requirements relating to defined contribution
plan, while other benefits are accounted for in accordance with the requirements relating to defined benefit plan.
The Company recognizes the cost of employee benefits arising from other long-term employee benefits as the
followings: 1) service cost; 2) net interest on the net liability or net assets of other long-term employee benefits; and 3)
changes as a result of remeasurement of the net liability or net assets of other long-term employee benefits. As a
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practical expedient, the net total of the aforesaid amounts is recognized in profit or loss or included in the cost of a
relevant asset.
24. Provisions
(1) Provisions are recognized when fulfilling the present obligations arising from contingencies such as providing
guarantee for other parties, litigation, products quality guarantee, onerous contract, etc., may cause the outflow of the
economic benefit and such obligations can be reliably measured.
(2) The initial measurement of provisions is based on the best estimated expenditures required in fulfilling the present
obligations, and its carrying amount is reviewed at the balance sheet date.
25. Share-based payment
(1) Types of share-based payment
Share-based payment consists of equity-settled share-based payment and cash-settled share-based payment.
(2) Accounting treatment for settlements, modifications and cancellations of share-based payment plans
1) Equity-settled share-based payment
For equity-settled share-based payment transaction with employees, if the equity instruments granted vest immediately,
the fair value of those equity instruments is measured at grant date and recognized as transaction cost or expense, with a
corresponding adjustment in capital reserve; if the equity instruments granted do not vest until the counterparty
completes a specified period of service, at the balance sheet date within the vesting period, the fair value of those equity
instruments measured at grant date based on the best estimate of the number of equity instruments expected to vest is
recognized as transaction cost or expense, with a corresponding adjustment in capital reserve.
For equity-settled share-based payment transaction with parties other than employees, if the fair value of the services
received can be measured reliably, the fair value is measured at the date the Company receives the service; if the fair
value of the services received cannot be measured reliably, but that of equity instruments can be measured reliably, the
fair value of the equity instruments granted measured at the date the Company receives the service is referred to, and
recognized as transaction cost or expense, with a corresponding increase in equity.
2) Cash-settled share-based payment
For cash-settled share-based payment transactions with employees, if share appreciation rights vest immediately, the
fair value of the liability incurred as the acquisition of services is measured at grant date and recognized as transaction
cost or expense, with a corresponding increase in liabilities; if share appreciation rights do not vest until the employees
have completed a specified period of service, the liability is measured, at each balance sheet date until settled, at the fair
value of the share appreciation rights as of the balance sheet date based on the best estimate of the number of share
appreciation right expected to vest, while the corresponding transaction cost or expense is recognized.
3) Modifications and cancellations of share-based payment plan
If the modification increases the fair value of the equity instruments granted, the Company includes the incremental fair
value granted, in the measurement of the amount recognized for services received as consideration for the equity
instruments granted; similarly, if the modification increases the number of equity instruments granted, the Company
includes the fair value of the additional equity instruments granted, in the measurement of the amount recognized for
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services received as consideration for the equity instruments granted; if the Company modifies the vesting conditions in
a manner that is beneficial to the employee, the Company takes the modified vesting conditions into account.
If the modification reduces the fair value of the equity instruments granted, the Company does not take into account that
decrease in fair value, and continue to measure the amount recognized for services received as consideration for the
equity instruments based on the grant date fair value of the equity instruments granted; if the modification reduces the
number of equity instruments granted to an employee, that reduction is accounted for as a cancellation of that portion of
the grant; if the Company modifies the vesting conditions in a manner that is not beneficial to the employee, the
Company does not take the modified vesting conditions into account.
If the Company cancels or settles a grant of equity instruments during the vesting period (other than that cancelled when
the vesting conditions are not satisfied), the Company accounts for the cancellation or settlement as an acceleration of
vesting, and therefore recognizes immediately the amount that otherwise would have been recognized for services
received over the remainder of the vesting period.
26. Revenue
(1) Revenue recognition principles
At contract inception, the Company shall assess the contracts and shall identify each performance obligation in the
contracts, and determine whether the performance obligation should be satisfied over time or at a point in time.
The Company satisfies a performance obligation over time if one of the following criteria is met, otherwise, the
performance obligation is satisfied at a point in time: 1) the customer simultaneously receives and consumes the
economic benefits provided by the Company’s performance as the Company performs; 2) the customer can control
goods as they are created by the Company’s performance; 3) goods created during the Company’s performance have
irreplaceable uses and the Company has an enforceable right to the payments for performance completed to date
during the whole contract period.
For each performance obligation satisfied over time, the Company shall recognize revenue over time by measuring the
progress towards complete satisfaction of that performance obligation. In the circumstance that the progress cannot be
measured reasonably, but the costs incurred in satisfying the performance obligation are expected to be recovered, the
Company shall recognize revenue only to the extent of the costs incurred until it can reasonably measure the progress.
For each performance obligation satisfied at a point in time, the Company shall recognize revenue at the time point that
the customer obtains control of relevant goods or services. To determine whether the customer has obtained control of
goods, the Company shall consider the following indications: 1) the Company has a present right to payment for the
goods, i.e., the customer is presently obliged to pay for the goods; 2) the Company has transferred the legal title of the
goods to the customer, i.e., the customer has legal title to the goods; 3) the Company has transferred physical
possession of the goods to the customer, i.e., the customer has physically possessed the goods; 4) the Company has
transferred significant risks and rewards of ownership of the goods to the customer, i.e., the customer has obtained
significant risks and rewards of ownership of the goods; 5) the customer has accepted the goods; 6) other evidence
indicating the customer has obtained control over the goods.
(2) Revenue measurement principle
1) Revenue is measured at the amount of the transaction price that is allocated to each performance obligation. The
transaction price is the amount of consideration to which the Company expects to be entitled in exchange for
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transferring goods or services to a customer, excluding amounts collected on behalf of third parties and those expected
to be refunded to the customer.
2) If the consideration promised in a contract includes a variable amount, the Company shall confirm the best estimate
of variable consideration at expected value or the most likely amount. However, the transaction price that includes the
amount of variable consideration is only to the extent that it is high probable that a significant reversal in the amount of
cumulative revenue recognized will not occur, when the uncertainty associated with the variable consideration is
subsequently resolved.
3) In the circumstance that the contract contains a significant financing component, the Company shall determine the
transaction price based on the price that a customer would have paid for if the customer had paid cash for obtaining
control over those goods or services. The difference between the transaction price and the amount of promised
consideration is amortized under effective interest method over contractual period. The effects of a significant financing
component shall not be considered if the Company expects, at the contract inception, that the period between when the
customer obtains control over goods or services and when the customer pays consideration will be one year or less.
4) For contracts containing two or more performance obligations, the Company shall determine the stand-alone selling
price of the distinct good underlying each performance obligation at contract inception, and allocate the transaction
price to each performance obligation on a relative stand-alone selling price basis.
(3) Revenue recognition method
The Company is mainly engaged in the sales of PCBs, LED display devices, Touch panels and LCMs, precision
components and other products. The products sold by the Company can be recognized as the performance obligation at
a certain time point.
Revenue from domestic sales is recognized when: 1) the products have been delivered by the Company to the
contracted delivery place and confirmed by the customers for acceptance; 2) the payment has been received or the right
of collecting payment has been obtained; and(3) it is probable that the associated economic benefits will flow to the
Company.
Revenue from oversea sales is recognized when: 1) the Company has declared the products for customs clearance in
accordance with the contract with bills of clearance and waybills received; 2) the payment has been received or the
right of collecting payment has been obtained; and 3) it is probable that the associated economic benefits will flow to
the Company.
27. Government grants
(1) Government grants shall be recognized if, and only if, the following conditions are all met: 1) the Company will
comply with the conditions attaching to the grants; 2) the grants will be received. Monetary government grants are
measured at the amount received or receivable. Non-monetary government grants are measured at fair value, and can be
measured at nominal amount in the circumstance that fair value cannot be assessed.
(2) Government grants related to assets
Government grants related to assets are government grants with which the Company purchases, constructs or otherwise
acquires long-term assets under requirements of government. In the circumstances that there is no specific government
requirement, the Company shall determine based on the primary condition to acquire the grants, and government grants
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related to assets are government grants whose primary condition is to construct or otherwise acquire long-term assets.
They offset carrying amount of relevant assets, or they are recognized as deferred income. If recognized as deferred
income, they are included in profit or loss on a systematic basis over the useful lives of the relevant assets. Those
measured at notional amount are directly included into profit or loss. For assets sold, transferred, disposed or damaged
within the useful lives, balance of unamortized deferred income is transferred into profit or loss of the period in which
the disposal occurred.
(3) Government grants related to income
Government grants related to income are government grants other than those related to assets. For government grants
that contain both parts related to assets and parts related to income, in which those two parts are blurred, they are thus
collectively classified as government grants related to income. For government grants related to income used for
compensating the related future cost, expenses or losses, they are recognized as deferred income and included in profit
or loss or used to offset relevant cost during the period in which the relevant cost, expenses or losses are recognized; for
government grants related to income used for compensating the related cost, expenses or losses incurred to the
Company, they are directly included in profit or loss or used to offset relevant cost.
(4) Government grants related to the ordinary course of business shall be included into other income or used to offset
relevant cost based on business nature, while those not related to the ordinary course of business shall be included into
non-operating revenue or expenditures.
(5) Policy interest subvention
1) In the circumstance that government appropriates interest subvention to lending bank, who provides loans for the
Company with a policy subsidized interest rate, borrowings are carried at the amount received, with relevant
borrowings cost computed based on the principal and the policy subsidized interest rate.
2) In the circumstance that government directly appropriates interest subvention to the Company, the subsidized interest
shall offset relevant borrowing cost.
28. Deferred tax assets/Deferred tax liabilities
(1) Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between the
carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and tax base of items
not recognized as assets and liabilities, but with their tax base being able to be determined according to tax laws), and in
accordance with the tax rate applicable to the period during which the assets are expected to be recovered or the
liabilities are expected to be settled.
(2) A deferred tax asset is recognized to the extent of the amount of the taxable income, which is most likely to obtain
and which can be deducted from the deductible temporary difference. At the balance sheet date, if there is any exact
evidence that it is probable that future taxable income will be available, against which deductible temporary differences
can be utilized, the deferred tax assets unrecognized in prior periods are recognized.
(3) At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a deferred
tax asset is reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow the
benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to the extent that it becomes
probable that sufficient taxable income will be available.
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(4) The income tax and deferred tax for the period are treated as income tax expenses or income through profit or loss,
excluding those arising from the following circumstances: 1) business combination; and 2) the transactions or items
directly recognized in equity.
29. Leases
(1) The Company as lessee
At the commencement date, the Company recognizes a lease that has a lease term of 12 months or less as a short-term
lease, which shall not contain a purchase option; the Company recognizes a lease as a lease of a low-value asset if the
underlying asset is of low value when it is new. If the Company subleases an asset, or expects to sublease an asset, the
head lease does not qualify as a lease of a low-value asset.
For all short-term leases and leases of low-value assets, lease payments are recognized as cost or profit or loss with
straight-line method over the lease term.
Apart from the above-mentioned short-term leases and leases of low-value assets with simplified approach, the
Company recognizes right-of-use assets and lease liabilities at the commencement date.
① Right-of-use assets
The right-of-use asset is measured at cost and the cost shall comprise: 1) the amount of the initial measurement of the
lease liability; 2) any lease payments made at or before the commencement date, less any lease incentives received; 3)
any initial direct costs incurred by the lessee; and 4) an estimate of costs to be incurred by the lessee in dismantling and
removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition
required by the terms and conditions of the lease.
The Company depreciates the right-of-use asset using the straight-line method. If it is reasonable to be certain that the
ownership of the underlying asset can be acquired by the end of the lease term, the Company depreciates the
right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the
Company depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of
the right-of-use asset or the end of the lease term.
② Lease liability
At the commencement date, the Company measures the lease liability at the present value of the lease payments that are
not paid at that date, discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the
Company’s incremental borrowing rate shall be used. Unrecognized financing expenses, calculated at the difference
between the lease payment and its present value, are recognized as interest expenses over the lease term using the
discount rate which has been used to determine the present value of lease payment and included in profit or loss.
Variable lease payments not included in the measurement of lease liabilities are included in profit or loss in the periods
in which they are incurred.
After the commencement date, if there is a change in the following items: (a) actual fixed payments; (b) amounts
expected to be payable under residual value guarantees; (c) an index or a rate used to determine lease payments; (d)
assessment result or exercise of purchase option, extension option or termination option., the Company remeasures the
lease liability based on the present value of lease payments after changes, and adjusts the carrying amount of the
right-of-use asset accordingly. If the carrying amount of the right-of-use asset is reduced to zero but there shall be a
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further reduction in the lease liability, the remaining amount shall be recognized into profit or loss.
(2) The Company as lessor
At the commencement date, the Company classifies a lease as a finance lease if it transfers substantially all the risks and
rewards incidental to ownership of an underlying asset. Otherwise, it is classified as an operating lease.
① Operating lease
Lease receipts are recognized as lease income with straight-line method/unit-of-production method over the lease term.
Initial direct costs incurred shall be capitalized, amortized on the same basis as the recognition of lease income, and
included into profit or loss by installments. Variable lease payments related to operating lease, which are not included in
the lease payment, are charged as profit or loss in the periods in which they are incurred.
② Finance lease
At the commencement date, the Company recognizes the finance lease payment receivable based on the net investment
in the lease (sum of the present value of unguaranteed residual value and lease receipts that are not received at the
commencement date, discounted by the interest rate implicit in the lease), and derecognizes assets held under the
finance lease. The Company calculates and recognizes interest income using the interest rate implicit in the lease over
the lease term. Variable lease payments not included in the measurement of the net investment in the lease are charged
as profit or loss in the periods in which they are incurred.
30. Other significant accounting policies and estimates
(1) Recognition criteria and accounting treatment of discontinued operations
A component of the Company that has been disposed of, or is classified as held for sale and can be clearly distinguished
is recognized as a discontinued operation when it fulfills any of the following conditions:
1) it represents a separate major line of business or a separate geographical area of operations;
2) it is part of a related plan to dispose of a separate major line of business, or a separate geographical area of operations;
or
3) it is a subsidiary acquired exclusively with a review to resale.
(2) Basis of the adoption of hedge accounting and its accounting treatment
1) Hedge includes fair value hedge, cash flow hedge and hedge of a net investment in a foreign operation.
2) A hedging relationship qualifies for hedge accounting, if all of the following conditions are met: ① the hedging
relationship consists only of eligible hedging instruments and eligible hedged instruments; ② at the inception of the
hedge, there is formal designation of hedging instruments and hedged item, and documentation of the hedging
relationship and the Company’s risk management objective and strategy for undertaking the hedge; ③ the hedging
relationship meets the hedging effectiveness requirements.
The Company recognizes that the hedging relationship meets effectiveness requirements if the all of the followings are
simultaneously satisfied: a. there is an economic relationship between the hedged item and the hedging instruments; b.
the effect of credit risk does not dominate the value changes that result from that economic relationship between the
hedged item and the hedging instruments; and c. the hedge ratio of the hedging relationship is the same as the ratio of
the quantity of the hedged item that the Company actually hedges and the number of hedging instruments that the
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Company actually uses to hedge that quantity of hedged item, but does not reflect an imbalance between the weightings
of the hedged item and the hedging instrument.
The Company shall assess whether a hedging relationship meets the hedge effectiveness requirements at inception and
on an ongoing basis. If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge
ratio, but the risk management objective for that designated hedging relationship remains the same, the hedging
relationship shall be rebalanced.
3) Hedge accounting
① Fair value hedge
a. Gains or losses on the hedging instrument shall be recognized in profit or loss (or other comprehensive income, if the
hedging instrument hedges a non-trading equity instrument (or a component thereof) at fair value through other
comprehensive income).
b. The gains or losses on hedged item arising from risk exposure should be recognized in profit or loss, and meanwhile,
the carrying amount of the hedged item which is not measured at fair value should be adjusted. If the hedged item is a
financial asset (or a component thereof) that is measured at fair value through other comprehensive income in
accordance with article XVIII in “CASBE 22 – Financial Instruments: Recognition and Measurement”, the gains or
losses arising from the risk exposure on the hedged item shall be recognized in profit or loss, with carrying amount
unadjusted, for it has already been measured at fair value; if the hedged item is a non-trading equity instrument (or a
component thereof) for which the Company has elected to present changes at fair value through other comprehensive
income, the gains or losses arising from the risk exposure on the hedged item shall be recognized in profit or loss, with
carrying amount unadjusted, for it has already been measured at fair value.
When a hedged item is an unrecognized firm commitment (or a component thereof), the cumulative change in fair value
of the hedged item subsequent to its designation is recognized as an asset or a liability, with a corresponding gains or
losses recognized in profit or loss. When a firm commitment is performed to acquire an asset or assume a liability, the
initial carrying amount of the asset or the liability is adjusted to include the cumulative change in fair value of the
hedged item that was previously recognized.
For a hedged item that is a financial instrument (or a component thereof) measured at amortized cost, any adjustment on
the carrying amount of the hedged item shall be amortized to profit or loss, based on a recalculated effective interest
rate at the date that amortization begins. In the case of a financial asset (or a component thereof) that is a hedged item
and that is measured at fair value through other comprehensive income in accordance with article XVIII in “CASBE 22
- Financial Instruments: Recognition and Measurement”, amortization applies in the same manner, but to the amount
that represents the cumulative gains or losses previously recognized, which shall be subsequently recognized in profit or
loss, instead of by adjusting the carrying amount.
② Cash flow hedges
a. The portion of the gains or losses on the hedging instrument that is determined to be an effective hedge shall be
recognized in other comprehensive income as cash flow hedge reserve, while the ineffective portion shall be recognized
in profit or loss. The cash flow hedge reserve shall be recognized at the lower of the following (in absolute amounts): (i)
the cumulative gains or losses on the hedging instrument from inception of the hedge; and (ii) the cumulative change in
present value of the expected future cash flows of the hedged item from inception of the hedge.
b. If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial
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liability, or a hedged forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment
for which fair value hedge accounting is applied, the Company shall transfer out the amount of cash flow hedge reserve
previously recognized in other comprehensive income, and include it in the initial cost of the asset or the liability.
c. For other cash flow hedges, the amount of cash flow hedge reserve previously recognized in other comprehensive
income shall be transferred out into profit or loss in the same period the hedged forecast sale affects profit or loss.
③ Hedges of a net investment in a foreign operation
The portion of the gains or losses on the hedging instrument that is determined to be an effective hedge, is recognized in
other comprehensive income, and reclassified from other comprehensive income to profit or loss, on the disposal of the
foreign operation; and the ineffective portion is recognized in profit or loss.
(3) Accounting treatment related to share repurchase
When the Company repurchases its shares for the purpose of reducing its registered capital or rewarding its employees,
if the purchased shares are to be kept as treasury shares, the treasury shares are recorded at the cash distributed to
existing shareholders for repurchase. If the purchased shares are to be retired, the difference between the total book
value of shares retired and the cash distributed to existing shareholders for repurchase, is to reduce capital reserve, or
retained earnings when the capital reserve is not enough to reduce. If the Company repurchases vested equity
instruments in equity-settled share-based payment transactions with employees, cost of treasury shares granted to
employees and capital reserve (other capital reserve) accumulated within the vesting period are to be written off on the
payment made to employees, with a corresponding adjustment in capital reserve (share premium).
31. Significant changes in accounting policies and estimates
(1) Significant changes in accounting policies
Changes in accounting policies and reasons Approval Procedures
Since January 1, 2021 (the “first adoption date”), the Company has
implemented the “CASBE 22 - Leases” revised by the Ministry of On April 13,2021, the Company held the 10th conference of the
Finance in 2018 (hereinafter referred to as the “New Lease 5th session of Board of Directors and the 8th conference of the
Standards”) (1) For contracts existing before the first adoption date, 5th session of Board of Supervisors, deliberating and approving
the Company chooses not to re-evaluate whether they are leases or the Proposal on Changes in Accounting Policies, for which
include leases. (2) For lease contracts with the Company as the independent directors expressed consent opinion independently.
lessee, the Company adjusts the amount of retained earnings at the In accordance with the relevant regulations of the Rules
beginning of the reporting period and other relevant items in the Governing the Listing of Shares on the Shenzhen Stock
financial statements, according to the cumulative impact of Exchange, the changes in accounting policies was not required
implementing the New Lease Standards on the first adoption date, to be submitted to the shareholders' meeting for approval.
while the information of comparable periods is not adjusted.
In accordance with the Questions and Answers on Implementation On April 19, 2022, the Company held the 20th conference of the
of Accounting Standards for Business Enterprise issued by the 5th session of Board of Directors and the 14th conference of the
Accounting Department of the Ministry of Finance on November 2, 5th session of Board of Supervisors, deliberating and approving
2021, the Company reclassifies the transportation costs into the Proposal on Changes in Accounting Policies, for which
operating cost from selling expenses, since transportation activities independent directors expressed consent opinion independently.
for performance of the sales contract occurring before the control of In accordance with the relevant regulations of the Rules
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enterprise goods is transferred to the customer do not constitute a Governing the Listing of Shares on the Shenzhen Stock
single performance obligation. Exchange, the changes in accounting policies was not required
to be submitted to the shareholders' meeting for approval.
Unit: RMB
1) Main effects of the Company's adoption of the New Lease Standards on the financial statements as at January 1,2021 are stated as
follows:
consolidated balance sheet as at December 31, 2021
Items
December 31, 2020 Reclassified (Note) January 1, 2021
Payment in advance 195,402,953.35 -945,182.29 194,457,771.06
Fixed assets 11,225,101,992.17 -810,137,697.80 10,414,964,294.37
Right-of-use assets 919,933,989.09 919,933,989.09
Intangible assets 355,484,167.00 -46,144,586.42 309,339,580.58
Non-current liabilities due within 964,563,666.84 20,648,075.55 985,211,742.39
one year
Lease liabilities 1,116,750,563.53 1,116,750,563.53
Long-term payables 1,200,752,321.09 -1,074,692,116.50 126,060,204.59
2) Main effects of the Company's implementation of the Questions and Answers on Implementation of Accounting Standards for
Business Enterprise on the financial statements in 2020 are stated as follows:
Consolidated income statement for the year ended December 31, 2020
Items
2020 [Before restatement] Adjusted amount 2020 [After restatement]
Selling expenses 484,650,341.42 -155,469,994.92 329,180,346.50
Operating cost 23,524,821,514.85 155,469,994.92 23,680,291,509.77
(2) Significant changes in accounting estimates
□ Applicable √ N/A
(3) The impact of the implementation of the New Lease Standards on the relevant items in the consolidated
balance sheet at the beginning of the period is shown below:
Reclassification of the consolidated balance sheet as at December 31, 2021 Unit: RMB
Items December 31, 2020 January 1, 2021 Reclassified (Note)
Current assets:
Payment in advance 195,402,953.35 194,457,771.06 -945,182.29
Total current assets 21,857,673,675.90 21,856,728,493.61 -945,182.29
Non-current assets:
Fixed assets 11,225,101,992.17 10,414,964,294.37 -810,137,697.80
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Right-of-use assets 919,933,989.09 919,933,989.09
Intangible assets 355,484,167.00 309,339,580.58 -46,144,586.42
Total non-current assets 15,645,395,037.64 15,709,046,742.51 63,651,704.87
Total assets 37,503,068,713.54 37,565,775,236.12 62,706,522.58
Current liabilities:
Non-current liabilities due within one year 964,563,666.84 985,211,742.39 20,648,075.55
Total current liabilities 19,379,435,489.22 19,400,083,564.77 20,648,075.55
Non-current liabilities:
Lease liabilities 1,116,750,563.53 1,116,750,563.53
Long-term payables 1,200,752,321.09 126,060,204.59 -1,074,692,116.50
Total non-current liabilities 4,948,665,296.07 4,990,723,743.10 42,058,447.03
Total liabilities 24,328,100,785.29 24,390,807,307.87 62,706,522.58
Equity:
Total liabilities & equity 37,503,068,713.54 37,565,775,236.12 62,706,522.58
Remarks on adjustment
(1) For contracts existing before the first adoption date, the Company chooses not to re-evaluate whether they are
leases or include leases.
(2) For lease contracts with the Company as the lessee, the Company adjusts the amount of retained earnings at the
beginning of the reporting period and other relevant items in the financial statements, according to the cumulative
impact of implementing the New Lease Standards on the first adoption date, while the information of comparable
periods is not adjusted.
Details of the adjustment are stated as follows:
For financial lease before the first adoption date, the Company, at the first adoption date, measures the right-of-use asset
and the lease liability at the original carrying amount of the asset leased in under finance lease and the finance lease
payable respectively.
For operating lease before the first adoption date, the Company, at the first adoption date, measures the lease liability at
the present value of the remaining lease payments that is discounted at the Company’s incremental borrowing rate at the
first adoption date, and the right-of-use asset at an amount equal to the lease liability adjusted by the amount of any
prepaid rents.
At the first adoption date, the Company tests the impairment of right-of-use assets and takes accounting treatment
accordingly in accordance with regulations of “Long-term assets impairment” of this section.
1) Main effects of the Company's adoption of the New Lease Standards on the financial statements as at January
1,2021 are stated as above.
2) Practical expedients adopted for operating lease before the first adoption date are stated as follows:
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①For the lease contracts for which the lease term will end within 12 months from the first adoption date, the
Company chooses to adopt practical expedients, not recognizing right-of-use assets and lease liabilities;
②The Company applies a single discount rate to lease contracts with similar characteristics, such as lease contracts
of plants, lands and others, when measuring lease liabilities;
③The Company excludes initial direct costs from measuring the right-of-use assets
④The Company determines the lease term according to the actual exercise or other updates of extension options or
termination options before the first adoption date;
⑤The Company adjusts the right-of-use assets by the amount of onerous contract provision recognized in the
balance sheet before the first adoption date if the contract including leases is measured as an onerous contract
before the first adoption date in accordance with “CASBE 13 – Contingencies”, as an alternative of testing the
impairment of right-of-use assets;
⑥The Company accounts for lease modifications before the first adoption date according to the final arrangement
of the lease modifications.
The practical expedients mentioned above bring no significant impact on the Company’s financial statements.
(3) For contracts for operating lease of low-value assets existing before the first adoption date, the Company chooses
to adopt practical expedients, not recognizing right-of-use assets and lease liabilities, and accounts for the contracts
subject to the New Lease Standards from the first adoption date.
(4) For lease contracts with the Company as the lessor, the Company accounts for the contracts subject to the New
Lease Standards from the first adoption date.
(5)Sale and leaseback transactions existing before the first adoption date are accounted for as follows:
For sale and leaseback transactions existing before the first adoption date, the Company would not re-assess whether the
transfer of an asset in the sale and leaseback transactions satisfies the requirements to be accounted for as a sale of the
asset as provided in the “CASBE 14 – Revenues”.
For sale and leaseback transactions accounted for as a sale of assets and financial leases before the first adoption date,
the Company, as the seller (lessee), accounts for the leaseback transactions in the same manner as other finance leases
existing at the first adoption date, and continues to amortize the related deferred profit or loss over the lease term.
For sale and leaseback transactions accounted for as a sale of assets and operating leases before the first adoption date,
as the seller (lessee), accounts for the leaseback transactions in the same manner as other operating leases existing at the
first adoption date, and adjusts the right-of-use assets based on the related deferred profit or loss recorded in the balance
sheet prior to the first adoption date.
(4) Notes on retrospectively adjusted comparative data in the prior periods since the first adoption of the New
Lease Standard in 2021
□ Applicable √ N/A
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32. Others
(1) Sale and leaseback
1) The Company as the lessee
In accordance with the “CASBE 14 – Revenues”, the Company would assess and determine whether the transfer of an
asset in the sale and leaseback transaction is accounted for as a sale of that asset.
If the transfer of an asset is accounted for as a sale of the asset, the Company measures the right-of-use asset arising
from the leaseback, at the proportion of the original carrying amount of the asset that relates to the right of use retained
by the Company. Accordingly, the Company recognizes only the amount of any gain or loss that relates to the rights
transferred to the lessor.
Otherwise, the Company continues the recognition of the transferred assets, and recognizes a financial liability equal to
the amount of transfer income in accordance with the “CASBE 22 – Financial Instruments: Recognition and
Measurement” at the same time.
2) The Company as the lessor
In accordance with the “CASBE 14 - Revenues”, the Company would assess and determine whether the transfer of an
asset in the sale and leaseback transaction is accounted for as a sale of that asset.
If the transfer of an asset is accounted for as a sale of the asset, the Company accounts for the purchase of assets in
accordance with other applicable standards, and accounts for the lease of assets in accordance with the “CASBE 21 –
Leases”.
Otherwise, the Company does not recognize the transferred asset, but recognizes a financial asset equal to the amount of
transfer income in accordance with the “CASBE 22 – Financial Instruments: Recognition and Measurement”.
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VI. Taxes
1. Main taxes and tax rates
Taxes Tax bases Tax rates
The output tax calculated based on the revenue from
16% and 13%; for companies
sales of goods or rendering of services in accordance
Value-added tax (VAT) outside of China, VAT rates
with the tax law, net of the input tax that is allowed to
ranging from 7% to 25%
be deducted in the current period
Consumption tax The taxable sales value 8% in USA
Urban maintenance and construction tax Turnover tax actually paid 5% and 7% in Mainland China
15%, 16.50%, 25%, 0, 21%,
Enterprise income tax Turnover tax actually paid 0.75%-8.84%, 17%, 10%,
20%, 21.4%, 24%
For housing property levied on the basis of price,
housing property tax is levied at the rate of 1.2% of the
1.2% and 12% in Mainland
Housing property tax balance after deducting 30% of the cost; for housing
China
property levied on the basis of rent, housing property
tax is levied at the rate of 12% of rent revenue.
Education surcharge Turnover tax actually paid 3% in Mainland China
Local education surcharge Turnover tax actually paid 2% in Mainland China
Disclosure of taxpayers with different rates of enterprise income tax:
Taxpayers Income tax rate
The Company, YCMT, Mutto Optronics Technology Co., Ltd., MFLEX Yancheng Co., Ltd.,
Yancheng Dongshan Precision Manufacturing Co., Ltd., Suzhou Jebson Intelligent Technology
Co., Ltd., Dongguan Dongshan Precision Manufacturing Co., Ltd., Suzhou RF Top Electronic 15.00%
Communication Co., Ltd., Suzhou Chengjia Precision Manufacturing Co.,Ltd., Yancheng Mutto
Optronics Technology Co., Ltd., Suzhou Dongdai Electronic Technology Co., Ltd.
HongKong Dongshan Precision Union Opoelectronic Co., Limited and other companies registered
16.50%
in Hong Kong
Mutto Optronics Group Limited, MFLEX Delaware, Inc., Dii Group (BVI) Co. Limited 0
USA federal enterprise income
tax rate of 21%, state enterprise
Multi-Fineline Electronix, Inc. and other companies registered in USA
income tax rate ranging from
0.75% to 8.84%
Multi-Fineline Electronix Singapore Ptd. Ltd and other companies registered in Singapore 17% in Singapore
15% (enjoying an 80%
Multek Technologies Limited
reduction on this rate)
Multek Technology Sweden AB 21.4% in Sweden
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Multek Technology Malaysia SDN.BHD 24% in Malaysia
Taxpayers other than the above-mentioned 25.00%
2. Tax preferential policies
1.In accordance with the Reply to Publication of the Fourth Batch of High and New Technology Enterprise Recordation
of Jiangsu Province in 2019 (Guo Ke Huo Zi [2020]No.34)issued by the Office of Leading Group for Administration of
Recognition of National High and New Technology Enterprises, the Company and the Company’s subsidiaries, namely,
Mutto Optronics Technology Co., Ltd., Yancheng Dongshan Precision Manufacturing Co., Ltd. and Suzhou Chengjia
Precision Manufacturing Co., Ltd. passed the qualification review and were recognized as high and new technology
enterprises with a valid period of 3 years, ranging from 2019 to 2021. Therefore, the above companies paid enterprise
income tax at a tax rate of 15% for the current period.
2. In accordance with the Reply to the Second Batch of High and New Technology Enterprise Recordation of Jiangsu
Province in 2020 (Guo Ke Huo Zi [2021]No.40) issued by the Office of Leading Group for Administration of
Recognition of National High and New Technology Enterprises, the Company’s wholly-owned subsidiary YCMT
passed the qualification review and was recognized as a high and new technology enterprise with a valid period of 3
years, ranging from 2020 to 2022. Therefore, such company paid enterprise income tax at a tax rate of 15% for the
current period.
3. In accordance with the Reply to the First Batch of High and New Technology Enterprise Recordation of Jiangsu
Province in 2019 (Guo Ke Fa Huo [2019] No.253) issued by the Office of Leading Group for Administration of
Recognition of National High and New Technology Enterprises, the Company’s subsidiaries, Suzhou RF Top
Electronic Communication Co., Ltd. and MFLEX Yancheng Co., Ltd., passed the qualification review and was
recognized as high and new technology enterprises with a valid period of 3 years, ranging from 2019 to 2021. Therefore,
the above companies paid enterprise income tax at a tax rate of 15% for the current period.
4. In accordance with the Reply to the Third Batch of High and New Technology Enterprise Recordation of Guangdong
Province in 2020 (Guo Ke Huo Zi [2021]No.23) issued by the Office of Leading Group for Administration of
Recognition of National High and New Technology Enterprises, the Company’s wholly-owned subsidiary Dongguan
Dongshan Precision Manufacturing Co., Ltd. passed the qualification review and was recognized as a high and new
technology enterprise with a valid period of 3 years, ranging from 2020 to 2022. Therefore, the above company paid
enterprise income tax at a tax rate of 15% for the current period.
5. In accordance with the Announcement for the Recordation of the Recognized Third Batch of High and New
Technology Enterprise of Jiangsu Province in 2021, the Company’s wholly-owned subsidiary Yancheng Mutto
Optronics Technology Co., Ltd. passed the qualification review and was recognized as a high and new technology
enterprise with a valid period of 3 years, ranging from 2021 to 2023. Therefore, such company paid enterprise income
tax at a tax rate of 15% for the current period.
6. In accordance with the Reply to the Third Batch of High and New Technology Enterprise Recordation of Jiangsu
Province in 2019 (Guo Ke Huo Zi [2020] No.31) issued by the Office of Leading Group for Administration of
Recognition of National High and New Technology Enterprises, the Company’s subsidiary Suzhou Jebson Intelligent
Technology Co., Ltd., passed the qualification review and was recognized as a high and new technology enterprise with
a valid period of 3 years, ranging from 2019 to 2021. Therefore, such company paid enterprise income tax at a tax rate
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of 15% for the current period.
7. In accordance with the Reply to the Second Batch of High and New Technology Enterprise Recordation of Jiangsu
Province in 2020 (Guo Ke Huo Zi [2021] No.40) issued by the Office of Leading Group for Administration of
Recognition of National High and New Technology Enterprises, the Company’s subsidiary Suzhou Dongdai Electronic
Technology Co., Ltd. passed the qualification review and was recognized as a high and new technology enterprise with
a valid period of 3 years, ranging from 2020 to 2022. Therefore, such company paid enterprise income tax at a tax rate
of 15% for the current period.
8. The Enterprise Income Tax Act of Mauritius is applicable to Multek Technologies Limited, which means this
company is subject to the 15% enterprise income tax rate. In accordance with the Enterprise Income Tax Act of
Mauritius, a company qualified as a global class 1 enterprise, namely, domiciled in Mauritius but operating business
outside of Mauritius, can enjoy a tax benefit of reducing 80% taxes. Therefore, the effective rate of enterprise income
tax levied on the company is only 3% after the reduction.
VII. Notes to Items in the Consolidated Financial Statements
1. Cash and bank balances
Unit: RMB
Items Closing balance Opening balance
Cash on hand 241,046.60 533,015.82
Cash in bank 3,939,060,080.19 2,872,602,069.65
Other cash and bank balances 1,461,536,265.68 2,280,875,453.27
Total 5,400,837,392.47 5,154,010,538.74
Including: Deposited overseas 1,025,270,288.66 1,196,208,767.68
Other remarks
Other cash and bank balances include deposits for acceptance bills amounting to RMB 126,592,248.04, financing margin for
acceptance bills amounting to RMB 302,065,000.00, factoring funds temporarily received from customers amounting to RMB
255,139,275.92, deposits for letter of credit amounting to RMB 425,484,321.15, borrowings deposits amounting to RMB
24,758,348.07, deposits for letter of guarantee amounting to RMB 74,562,551.50; time deposits amounting to RMB 228,424,521.00
and foreign exchange deposits amounting to RMB 24,510,000.00, all of which are restricted to use.
2. Held-for-trading financial assets
Unit: RMB
Items Closing balance Opening balance
Financial assets at fair value through profit or loss 499,528,549.86 1,262,027,561.65
Including:
Equity instrument investments 40,249,971.12 10,000,000.00
Bank wealth management product 459,278,578.74 1,252,027,561.65
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Including:
Total 499,528,549.86 1,262,027,561.65
3. Notes receivable
(1) Presentation of notes receivable by category
Unit: RMB
Items Closing balance Opening balance
Trade acceptance 14,624,540.85 70,758,949.85
Total 14,624,540.85 70,758,949.85
Unit: RMB
Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debts debts
Categories Carrying Carrying
Provision Provision
amount amount
Amount % to total Amount proportio Amount % to total Amount proportio
n (%) n (%)
Including:
Notes receivables
with provision for 14,698,0 73,490.1 14,624,54 71,189,51 70,758,94
100.00% 0.50% 100.00% 430,563.78 0.60%
bad debts made on a 31.00 5 0.85 3.63 9.85
collective basis
Including:
14,698,0 73,490.1 14,624,54 71,189,51 70,758,94
Trade acceptance 100.00% 0.50% 100.00% 430,563.78 0.60%
31.00 5 0.85 3.63 9.85
14,698,0 73,490.1 14,624,54 71,189,51 70,758,94
Total 100.00% 0.50% 100.00% 430,563.78 0.60%
31.00 5 0.85 3.63 9.85
Notes receivable with provision for bad debts made on a collective basis
Unit: RMB
Closing balance
Items
Book balance Provision for bad debts Provision proportion (%)
Trade acceptance portfolio 14,698,031.00 73,490.15 0.50%
Total 14,698,031.00 73,490.15 --
If a provision for bad debts is made for notes receivable in accordance with the general model of expected credit losses, please
disclose relevant information on provisions for bad debts with reference to the disclosure method of other receivables:
□ Applicable √ N/A
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(2) Provisions, recovery or reversal of bad debts for the current period
Provisions for bad debts made for the current period:
Unit: RMB
Changes for the current period
Categories Opening balance Recovery or Closing balance
Provision Write-off Others
reversal
Trade acceptance 430,563.78 -357,073.63 73,490.15
Total 430,563.78 -357,073.63 73,490.15
Significant recovery or reversal of bad debt provision for the current period:
□ Applicable √ N/A
(3) Notes receivable of the Company endorsed or discounted at the end of the Reporting Period and undue at the
balance sheet date
Unit: RMB
Items Closing balance derecognized
Trade acceptance 60,703,646.76
Total 60,703,646.76
4. Accounts receivable
(1) Disclosure of accounts receivable by category
Unit: RMB
Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debts debts
Categories Carrying Carrying
Provision Provision
amount amount
Amount % to total Amount proportio Amount % to total Amount proportio
n (%) n (%)
Accounts receivable
with provision for 648,099, 648,099, 645,653,7 645,653,7
7.50% 100.00% 8.01% 100.00%
bad debts made on an 738.87 738.87 83.62 83.62
individual basis
Including:
Accounts receivable
with provision for 7,994,96 328,880, 7,666,079 7,410,313 319,815,0 7,090,498,6
92.50% 4.11% 91.99% 4.32%
bad debts made on a 0,203.24 437.42 ,765.82 ,636.18 03.48 32.70
collective basis
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8,643,05 976,980, 7,666,079 8,055,967 965,468,7 7,090,498,6
Total 100.00% 11.30% 100.00% 11.98%
9,942.11 176.29 ,765.82 ,419.80 87.10 32.70
Accounts receivable with provision for bad debts made on an individual basis:
Unit: RMB
Closing balance
Debtors Provision for bad Provision
Book balance Reasons
debts proportion (%)
Provision for impairment was made due to the
The first 401,778,317.42 401,778,317.42 100.00% low probability of recovery according to the
recovery forecast.
Provision for impairment was made due to the
The second 169,582,771.72 169,582,771.72 100.00% low probability of recovery according to the
recovery forecast.
Provision for impairment was made due to the
The third 32,623,735.29 32,623,735.29 100.00% low probability of recovery according to the
recovery forecast.
Provision for impairment was made due to the
The fourth 25,666,994.00 25,666,994.00 100.00% low probability of recovery according to the
recovery forecast.
Provision for impairment was made due to the
The fifth 8,425,896.00 8,425,896.00 100.00% low probability of recovery according to the
recovery forecast.
Provision for impairment was made due to the
Others 10,022,024.44 10,022,024.44 100.00% low probability of recovery according to the
recovery forecast.
Total 648,099,738.87 648,099,738.87 -- --
On a collective basis: accounts receivable with provision for bad debts made on a collective basis of aging
Unit: RMB
Closing balance
Items
Book balance Provision for bad debts Provision proportion (%)
0-6 months 7,137,724,362.72 35,688,621.83 0.50%
7-12 months 445,130,436.54 22,256,521.83 5.00%
1- 2 years 146,652,073.82 29,330,414.76 20.00%
2-3 years 59,621,127.90 35,772,676.74 60.00%
Over 3 years 205,832,202.26 205,832,202.26 100.00%
Total 7,994,960,203.24 328,880,437.42 --
If a provision for bad debts is made for accounts receivable in accordance with the general model of expected credit losses, please
disclose relevant information on provisions for bad debts with reference to the disclosure method of other receivables:
□ Applicable √ N/A
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Aging analysis
Unit: RMB
Aging Book balance
Within 1 year (including) 7,582,854,799.26
0-6 months 7,137,724,362.72
7-12 months 445,130,436.54
1-2 years 155,266,599.84
2-3 years 59,665,426.21
Over 3 years 845,273,116.80
3-4 years 479,970,396.68
4-5 years 307,578,707.96
Over 5 years 57,724,012.16
Total 8,643,059,942.11
(2) Provisions, recovery or reversal of bad debts for the current period
Provisions for bad debts made for the current period:
Unit: RMB
Changes for the current period
Categories Opening balance Recovery or Closing balance
Provision Write-off Others
reversal
Accounts receivable
with provision for
645,653,783.62 5,148,884.48 2,702,929.23 648,099,738.87
bad debts made on
an individual basis
Accounts receivable
with provision for
319,815,003.48 14,486,095.28 1,084,624.80 5,670,923.93 -834,362.21 328,880,437.42
bad debts made on a
collective basis
Total 965,468,787.10 19,634,979.76 1,084,624.80 8,373,853.16 -834,362.21 976,980,176.29
Significant recovery or reversal of bad debt provision for the current period:
Unit: RMB
Debtors Amount collected or reversed Ways of collection
Hunan Helilai Intelligent Display
1,084,624.80 Cash in bank
Technology Co., Ltd.
Total 1,084,624.80 --
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(3) Accounts receivable actually written off for the current period
Unit: RMB
Items Write-off amount
Accounts receivable 8,373,853.16
(4) Top five closing balances of accounts receivable categorized by debtor
Unit: RMB
Proportion to the total closing
Closing balance of accounts Closing balance of provisions for
Debtors balance of accounts receivable
receivable bad debts
(%)
The first 2,863,883,030.69 33.14% 15,066,915.51
The second 560,808,415.65 6.49% 2,804,042.08
The third 401,778,317.42 4.65% 401,778,317.42
The fourth 288,493,200.35 3.34% 1,442,466.00
The fifth 209,774,907.77 2.43% 2,607,443.87
Total 4,324,737,871.88 50.05%
(5) Assets and liabilities arising from transferred but still involved accounts receivable
As of December 31, 2021, accounts receivable with a carrying amount of RMB 49,750,000.00 have completed the factoring loan for
trade acceptance with right of recourse.
(6) Accounts receivable derecognized due to financial assets transfer
Unit: RMB
Items Amount derecognized Gains or losses related to derecognition Ways of financial assets transfer
Customer 1 1,241,499,010.00 -736,764.87 Non-recourse factoring
Customer 2 56,363,120.81 -617,079.86 Non-recourse factoring
Sub-total 1,297,862,130.81 -1,353,844.73
5. Receivables financing
Unit: RMB
Items Closing balance Opening balance
Bank acceptance 828,355,016.30 750,470,779.44
Total 828,355,016.30 750,470,779.44
Increase or decrease of receivables financing for the current period and changes in its fair value
□ Applicable √ N/A
If a provision for impairment is made for receivables financing in accordance with the general model of expected credit losses, please
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disclose relevant information on the provisions for impairment with reference to the disclosure method of other receivables:
□ Applicable √ N/A
Other remarks:
Acceptors of bank acceptances are commercial banks. As it is unlikely for commercial banks with high credit levels to be unable to
pay the matured acceptance bills, the Company derecognizes the bank acceptances that have been endorsed or discounted. However,
if these bank acceptances are not paid on maturity, the Company will still be jointly and severally liable to the holder in accordance
with the provisions of the Law of the People’s Republic of China on Negotiable Instruments.
6. Payment in advance
(1) Presentation of payment in advance by aging analysis
Unit: RMB
Closing balance Opening balance
Aging
Amount % to total Amount % to total
Within 1 year 160,251,493.67 86.11% 156,750,934.72 80.61%
1-2 years 15,439,994.92 8.30% 17,768,659.21 9.14%
2-3 years 3,182,325.68 1.71% 16,953,924.89 8.72%
Over 3 years 7,221,298.66 3.88% 2,984,252.24 1.53%
Total 186,095,112.93 -- 194,457,771.06 --
Reasons for unsettlement on payment in advance with aging over one year and significant amount:
Debtors Closing balance (Unit: RMB) Reasons for unsettlement
Toyo Kuni Electronics Company Limited 6,934,900.34 Not implemented
Sub-total 6,934,900.34
(2) Top five closing balances of payment in advance that are categorized by debtors
Unit: RMB
Debtors Book balance Proportion to the total balance of Payment in
advance (%)
The first 25,200,759.98 12.77
The second 21,956,000.00 11.12
The third 9,196,768.09 4.66
The fourth 8,271,000.00 4.19
The fifth 7,910,323.79 4.01
Sub-total 72,534,851.86 36.75
7. Other receivables
Unit: RMB
Items Closing balance Opening balance
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Other receivables 37,505,521.59 567,026,166.56
Total 37,505,521.59 567,026,166.56
(1) Other receivables
1) Other receivables categorized by nature
Unit: RMB
Nature of other receivables Closing balance Opening balance
Transfer amount from Shenzhen Dongshan Asset 538,577,180.10
Loans and petty cash 6,048,087.60 7,622,496.74
Security deposits 31,879,767.11 29,290,206.06
Performance compensation 7,000,000.00 9,000,000.00
Temporary advance payments receivable and others 17,631,714.10 18,961,548.78
Total 62,559,568.81 603,451,431.68
2) Provisions for bad debts
Unit: RMB
Phase I Phase II Phase III
Provision for bad debts 12 month expected Lifetime expected credit Lifetime expected credit Total
credit losses losses (credit not impaired) losses (credit impaired)
Balance as at January 1, 2021 1,911,706.86 23,963,046.46 10,550,511.80 36,425,265.12
Balance as at January 1, 2021 in the
—— —— —— ——
current period
-- Transferred to phase II -587,632.69 587,632.69
-- Transferred to phase III -1,125,956.91 1,125,956.91
Provision -203,108.50 202,011.62 11,166,765.12 11,165,668.24
Reversal 22,451,468.46 22,451,468.46
Written off 80,729.96 80,729.96
Other changes 4,687.72 4,687.72
25,054,047.2
Balance as at December 31, 2021 1,120,965.67 1,175,265.40 22,757,816.15
2
Remarks on significant changes in book balance of other receivables with changes in provision for bad debts
□ Applicable √ N/A
Aging analysis
Unit: RMB
Aging Book balance
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Within 1 year (including) 22,422,934.21
1-2 years 15,430,049.81
2-3 years 14,669,258.11
Over 3 years 10,037,326.68
3-4 years 3,578,781.56
4-5 years 1,308,542.12
Over 5 years 5,150,003.00
Total 62,559,568.81
3) Top five closing balances of other receivables categorized by debtor
Unit: RMB
Proportion to total
Closing balance of
Nature of other closing balance of
Debtors Closing balance Aging provisions for bad
receivables other receivables
debts
(%)
The first Guarantee deposits 7,165,521.72 2-3 years 11.45% 3,582,760.86
Receivables and
3,620.00 Within 1 year 0.01% 3,620.00
payables
Receivables and
The second 3,677,395.91 1- 2 years 5.87% 3,677,395.91
payables
Receivables and
3,409,689.00 2-3 years 5.45% 3,409,689.00
payables
Performance
The third 6,163,521.33 1- 2 years 9.85% 616,352.13
compensation
The fourth Guarantee deposits 4,146,250.00 Over 3 years 6.63% 4,146,250.00
Temporary advance
The fifth 2,303,972.42 Within 1 year 3.68% 115,198.62
payment receivable
Total -- 26,869,970.38 -- 42.94% 15,551,266.52
8. Inventories
Did the Company need to comply with the disclosure requirements on the real estate industry?
No
(1) Categories of inventories
Unit: RMB
Items Closing balance Opening balance
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Provision for Provision for
inventory inventory
write-down or for write-down or for
Book balance impairment of Carrying amount Book balance impairment of Carrying amount
contract contract
performance performance
costs costs
Raw materials 1,389,061,379.96 21,517,744.17 1,367,543,635.79 1,068,198,270.11 24,397,185.00 1,043,801,085.11
Work in process 1,043,705,029.33 13,539,434.50 1,030,165,594.83 874,579,038.34 12,716,948.03 861,862,090.31
Goods on hand 4,234,690,470.68 188,416,933.04 4,046,273,537.64 4,177,408,358.80 118,669,588.44 4,058,738,770.36
Revolving
7,768,136.44 38,514.88 7,729,621.56 12,760,432.94 38,514.88 12,721,918.06
materials
Total 6,675,225,016.41 223,512,626.59 6,451,712,389.82 6,132,946,100.19 155,822,236.35 5,977,123,863.84
(2) Provision for inventory write-down and for impairment of contract performance costs
Unit: RMB
Increase in the current period Decrease in the current period
Items Opening balance Closing balance
Provision Others Reversal or write-off Others
Raw materials 24,397,185.00 5,764,461.85 8,643,902.68 21,517,744.17
Work in process 12,716,948.03 993,034.81 170,548.34 13,539,434.50
Goods on hand 118,669,588.44 159,496,910.81 235,179.88 89,984,746.09 188,416,933.04
Revolving
38,514.88 38,514.88
materials
Total 155,822,236.35 166,254,407.47 235,179.88 98,799,197.11 223,512,626.59
Remarks
Reasons for write-off of provision for inventory
Items Determination basis of net realizable value
write-down in the current period
Estimated selling price of relevant finished goods less cost to Inventories with provision for inventory write-down
Raw materials be incurred upon completion, estimated selling expenses, and made in preceding period were used in current
relevant taxes and surcharges period
Estimated selling price of relevant finished goods less cost to Inventories with provision for inventory write-down
Work in process be incurred upon completion, estimated selling expenses, and made in preceding period were used in current
relevant taxes and surcharges period
Inventories with provision for inventory write-down
Estimated selling price of relevant finished goods less
Goods on hand made in preceding period were sold in current
estimated selling expenses, and relevant taxes and surcharges
period
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9. Other current assets
Unit: RMB
Items Closing balance Opening balance
Cost of returning goods 12,777,920.71 15,580,541.71
Input VAT to be deducted 309,081,986.00 430,728,862.55
Prepaid enterprise income tax 34,663,477.77 48,150,853.42
Deferred expenses and others 289,546,629.16 295,893,972.09
Total 646,070,013.64 790,354,229.77
10. Long-term receivables
(1) Details of long-term receivables
Unit: RMB
Closing balance Opening balance
Discount
Items Provision for Carrying Provision for
Book balance Book balance Carrying amount rate range
bad debts amount bad debts
Deposits for 105,950,000.0
69,950,000.88 69,950,000.88 105,950,000.00
finance lease 0
Receivables from
Powerwave
10,703,905.76 10,703,905.76 10,703,905.76 10,703,905.76 7.5
Technologies
Thailand Co., Ltd.
116,653,905.7
Total 80,653,906.64 10,703,905.76 69,950,000.88 10,703,905.76 105,950,000.00 --
6
Remarks on significant changes in book balance of long-term receivables with changes in provision for bad debts:
□ Applicable √ N/A
11. Long-term equity investments
Unit: RMB
Opening Increase or decrease for the current period Closing
Closing balance
balance balance of
Investees Investments Investment profit or loss (carrying
(carrying Others provisions for
increased under equity method amount)
amount) bad debts
Suzhou Toprun Electric Equipment
25,893,111.25 -1,880,121.23 24,012,990.02 51,487,204.05
Co., Ltd.
Shenzhen Nanfang Blog
17,507,056.47
Technology Development Co., Ltd.
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Shanghai Fu Shan Precision
Manufacturing Co., Ltd.
Suzhou LEGATE Intelligent
25,510,113.59 -2,422,342.61 23,087,770.98
Equipment Co., Ltd.
Suzhou Dongcan Optoelectronics
3,642,892.51 73,257.78 3,716,150.29
Technology Co., Ltd.
Jiangsu Nangao Intelligent
Equipment Innovation Center Co., 3,952,690.31 67,866.28 4,020,556.59
Ltd.
Jiaozuo Songyang Optoelectric
33,669,655.66 -2,921,596.04 30,748,059.62
Technology Co., Ltd.
ISOTEK MICROWAVE LIMITED 8,539,424.61 8,539,424.61
Suzhou Yongxin Jingshang Venture
Capital Partnership (Limited 15,000,000.00 -16,510.12 14,983,489.88
Partnership)
BVF (BVI) Holding L.P. 34,428,780.00 -416,202.21 34,012,577.79
Sub-total 101,207,887.93 49,428,780.00 -7,515,648.15 143,121,019.78 68,994,260.52
Total 101,207,887.93 49,428,780.00 -7,515,648.15 143,121,019.78 68,994,260.52
12. Other equity instrument investments
Unit: RMB
Items Closing balance Opening balance
Jiangsu Bohua Equity Investment Partnership (Limited
150,000,000.00
Partnership)
Hai Dixin Semiconductor (Nantong) Co., Ltd. 21,322,110.00 21,322,110.00
X2 Power Technologies Limited 43,567,294.30
Total 171,322,110.00 64,889,404.30
Other remarks:
1) Hai Dixin Semiconductor (Nantong) Co., Ltd.
Hai Dixin Semiconductor (Nantong) Co., Ltd. (“Hai Dixin Semiconductor”) was established on April 6, 2012 with a registered
capital of RMB 36,152,329.00, in which the Company holds 10.2345% equity shares. Considering the fact that the Company holds
shares of Hai Dixin Semiconductor is conducive to improving business competitiveness due to close business connection between the
Company and Hai Dixin Semiconductor and the investment in Hai Dixin Semiconductor is not held for trading, the Company
designated the investment in Hai Dixin Semiconductor as a financial asset measured at fair value through other comprehensive
income as at January 1, 2019.
2) X2 Power Technologies Limited
X2 Power Technologies Limited was established in 2014 with the registered place in Cayman, mainly engaged in research and
development of new materials for consumer electronics products. The Company holds 7.5% of its equity shares. Considering the fact
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that the Company holds shares of X2 Power Technologies Limited is conducive to improving business competitiveness due to close
business connection between the Company and X2 Power Technologies Limited and the investment in X2 Power Technologies
Limited is not held for trading, the Company designated the investment in X2 Power Technologies Limited as a financial asset
measured at fair value through other comprehensive income as at January 1, 2019.
3) Jiangsu Bohua Equity Investment Partnership (Limited Partnership)
Jiangsu Bohua Equity Investment Partnership (Limited Partnership) was established on September 27, 2021 with a registered capital
of RMB 3.3 billion, mainly engaged in equity investment; and venture capital investment (limited to investment in unlisted
enterprises). The investment in Jiangsu Bohua Equity Investment Partnership (Limited Partnership) is not only conducive to
obtaining better investment income for the Company, but also can help the Company grasp the opportunity to make prior layout in
high quality track and underlying assets at an early stage by leveraging the investment platform, and in addition, this investment is
not held for trading. Therefore, the Company designated the investment in Jiangsu Bohua Equity Investment Partnership (Limited
Partnership) as a financial asset measured at fair value through other comprehensive income.
13. Investment property
(1) Investment property measured at cost
√ Applicable □ N/A
Unit: RMB
Items Buildings and structures Total
I. Cost
1.Opening balance
2. Increase in the current period 5,309,132.17 5,309,132.17
(1) Acquisition
(2) Transferred in from inventories/fixed assets/construction in
5,309,132.17 5,309,132.17
progress
(3) Increase due to business combination
3. Decrease in the current period
(1) Disposal
(2) Other transfer-out
4. Closing balance 5,309,132.17 5,309,132.17
II. Accumulated depreciation and amortization
1.Opening balance
2. Increase in the current period 3,754,869.59 3,754,869.59
(1) Accrual or amortization 257,728.95 257,728.95
(2) Transferred in from fixed assets 3,497,140.64 3,497,140.64
3. Decrease in the current period
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(1) Disposal
(2) Other transfer-out
4. Closing balance 3,754,869.59 3,754,869.59
III. Provision for impairment
IV. Carrying amount
1. Closing balance 1,554,262.58 1,554,262.58
2. Opening balance
14. Fixed assets
Unit: RMB
Items Closing balance Opening balance
Fixed assets 10,736,270,678.33 10,414,964,294.37
Total 10,736,270,678.33 10,414,964,294.37
(1) Details of fixed assets
Unit: RMB
Buildings and Machines and Transport Office equipment
Items Total
structures equipment facilities and others
I. Cost:
1.Opening balance 3,282,068,536.53 14,447,313,627.93 80,276,391.87 597,182,483.09 18,406,841,039.42
2. Increase in the current period 128,104,326.47 1,736,316,926.10 6,013,557.38 64,408,457.42 1,934,843,267.37
(1) Acquisition 15,305,538.77 757,214,530.99 1,609,998.52 50,756,386.75 824,886,455.03
(2) Transferred from
112,798,787.70 979,102,395.11 4,403,558.86 13,652,070.67 1,109,956,812.34
construction in progress
3. Decrease in the current period 5,601,709.53 243,028,044.26 1,937,164.99 8,169,045.49 258,735,964.27
(1) Disposal or scrapping 267,052.23 243,028,044.26 1,921,648.25 8,027,332.00 253,244,076.74
(2) Transferred to investment
5,309,132.17 5,309,132.17
property
(3) Translation reserve 25,525.13 15,516.74 141,713.49 182,755.36
4. Closing balance 3,404,571,153.47 15,940,602,509.77 84,352,784.26 653,421,895.02 20,082,948,342.52
II. Accumulated depreciation
1.Opening balance 1,036,523,225.97 6,554,605,810.36 56,297,612.77 336,444,425.46 7,983,871,074.56
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2. Increase in the current period 167,887,882.46 1,339,741,384.19 4,506,829.46 68,655,566.66 1,580,791,662.77
(1) Accrual 167,887,882.46 1,339,741,384.19 4,506,829.46 68,655,566.66 1,580,791,662.77
3. Decrease in the current period 3,766,284.16 213,319,066.62 1,419,659.61 7,258,249.92 225,763,260.31
(1) Disposal or scrapping 256,321.09 213,319,066.62 1,410,323.72 7,136,362.07 222,122,073.50
(2) Transferred to investment
3,497,140.64 3,497,140.64
property
(3) Translation reserve 12,822.43 9,335.89 121,887.85 144,046.17
4. Closing balance 1,200,644,824.27 7,681,028,127.93 59,384,782.62 397,841,742.20 9,338,899,477.02
III. Provision for impairment
1.Opening balance 7,273,567.79 732,102.70 8,005,670.49
2. Increase in the current period 983,457.38 983,457.38
(1) Accrual 983,457.38 983,457.38
3. Decrease in the current period 1,037,123.75 173,816.95 1,210,940.70
(1) Disposal or scrapping 1,037,123.75 173,816.95 1,210,940.70
4. Closing balance 7,219,901.42 558,285.75 7,778,187.17
IV. Carrying amount
1. Closing balance 2,203,926,329.20 8,252,354,480.42 24,968,001.64 255,021,867.07 10,736,270,678.33
2. Opening balance 2,245,545,310.56 7,885,434,249.78 23,978,779.10 260,005,954.93 10,414,964,294.37
(2) Fixed assets with certificate of titles being unsettled
Unit: RMB
Items Carrying amount Reason for unsettlement
Multek plant 6,196,068.75 In progress
Total 6,196,068.75
15. Construction in progress
Unit: RMB
Items Closing balance Opening balance
Construction in progress 503,037,513.25 562,008,491.36
Total 503,037,513.25 562,008,491.36
(1) Details of construction in progress
Unit: RMB
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Closing balance Opening balance
Items Provision for Carrying Provision for Carrying
Book balance Book balance
impairment amount impairment amount
Phase I Yancheng
338,379,254.70 338,379,254.70
manufacturing base
Wireless module production and
construction project of
Yancheng Dongshan 6,086,553.24 6,086,553.24 15,903,554.40 15,903,554.40
Communication Technology
Co., Ltd.
Multek 5G high-speed
high-frequency and high-density
6,499,800.00 6,499,800.00 36,065,932.47 36,065,932.47
PCB technology upgrading
project
Multek PCB production line 108,766,335.7
108,766,335.70 53,567,745.80 53,567,745.80
technology upgrading project 0
400000 m2 fine line FPC
production and assembly 15,468,498.40 15,468,498.40 8,992,177.76 8,992,177.76
capacity expansion project
LED packaging technology
125,169,108.2
development and 125,169,108.26
6
industrialization
Installation equipment and 241,047,217.6
241,047,217.65 109,099,826.23 109,099,826.23
others under construction 5
503,037,513.2
Total 503,037,513.25 562,008,491.36 562,008,491.36
5
(2) Changes in significant projects
Unit: RMB
Other decrease Accumulated Completion
Opening Increase in the Transferred to
Projects Budgets in the current Closing balance input to percentage Fund source
balance current period fixed assets
period budget (%) (%)
Phase I
Yancheng Self-raised
6,000,000,000.00 338,379,254.70 330,551,780.56 7,827,474.14 110.60% 100.00%
manufacturing funds
base
Wireless module
production and
701,000,000.00 15,903,554.40 9,179,378.44 11,916,538.20 7,079,841.40 6,086,553.24 11.48% 11.48% Raised funds
construction
project of
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Yancheng
Dongshan
Communication
Technology Co.,
Ltd.
Multek 5G
high-speed
high-frequency
and high-density 660,000,000.00 36,065,932.47 9,778,545.22 38,746,966.49 597,711.20 6,499,800.00 38.90% 38.90% Raised funds
PCB technology
upgrading
project
Multek PCB
production line
technology 728,000,000.00 53,567,745.80 123,021,456.51 66,767,208.55 1,055,658.06 108,766,335.70 70.21% 70.21% Raised funds
upgrading
project
400000 m2 fine
line FPC
production and
assembly 803,000,000.00 8,992,177.76 89,744,708.82 83,268,388.18 15,468,498.40 84.87% 84.87% Raised funds
capacity
expansion
project
LED packaging
technology Self-raised
680,000,000.00 519,046,971.78 393,877,863.52 125,169,108.26 76.33% 76.33%
development and funds
industrialization
Total 9,572,000,000.00 452,908,665.13 750,771,060.77 925,128,745.50 16,560,684.80 261,990,295.60 -- -- --
16. Right-of-use assets
Unit: RMB
Items Buildings and structures Machines and equipment Land Total
I. Cost:
1.Opening balance 922,722,587.26 24,598,690.24 49,571,215.74 996,892,493.24
2. Increase in the current period 15,601,408.64 71,722,130.92 87,323,539.56
Leased in 15,601,408.64 71,722,130.92 87,323,539.56
3. Decrease in the current period
4. Closing balance 938,323,995.90 96,320,821.16 49,571,215.74 1,084,216,032.80
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II. Accumulated depreciation
1.Opening balance 69,403,465.43 4,128,409.39 3,426,629.33 76,958,504.15
2. Increase in the current period 58,030,514.27 26,769,686.31 1,504,660.32 86,304,860.90
(1) Accrual 58,030,514.27 26,769,686.31 1,504,660.32 86,304,860.90
3. Decrease in the current period
4. Closing balance 127,433,979.70 30,898,095.70 4,931,289.65 163,263,365.05
III. Provision for impairment
IV. Carrying amount
1. Closing balance 810,890,016.20 65,422,725.46 44,639,926.09 920,952,667.75
2. Opening balance 853,319,121.83 20,470,280.85 46,144,586.41 919,933,989.09
17. Intangible assets
(1) Details of intangible assets
Unit: RMB
Trademark and Development
Items Land use right Software Total
patent rights expenditures
I. Cost
1.Opening balance 222,570,625.36 163,084,713.43 140,567,942.35 6,733,029.45 532,956,310.59
2. Increase in the current period 13,536,317.43 23,284,372.78 36,820,690.21
(1) Acquisition 13,536,317.43 23,284,372.78 36,820,690.21
3. Decrease in the current period 1,293,782.82 1,293,782.82
(1) Disposal 61,724.55 61,724.55
(2) Translation reserve 1,232,058.27 1,232,058.27
4. Closing balance 236,106,942.79 185,075,303.39 140,567,942.35 6,733,029.45 568,483,217.98
II. Accumulated amortization
1.Opening balance 55,924,016.26 103,865,568.81 57,094,115.49 6,733,029.45 223,616,730.01
2. Increase in the current period 5,227,750.84 29,490,167.22 14,057,163.08 48,775,081.14
(1) Accrual 5,227,750.84 29,490,167.22 14,057,163.08 48,775,081.14
3. Decrease in the current period 1,292,584.64 1,292,584.64
(1) Disposal 60,646.58 60,646.58
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(2) Translation reserve 1,231,938.06 1,231,938.06
4. Closing balance 61,151,767.10 132,063,151.39 71,151,278.57 6,733,029.45 271,099,226.51
III. Provision for impairment
IV. Carrying amount
1. Closing balance 174,955,175.69 53,012,152.00 69,416,663.78 297,383,991.47
2. Opening balance 166,646,609.10 59,219,144.62 83,473,826.86 309,339,580.58
The proportion of intangible assets generated from the Company’s internal research and development accounts for 0.00% of the
balance of intangible assets at the end of the period.
18. Goodwill
(1) Cost of goodwill
Unit: RMB
Investees or events resulting in goodwill Opening balance Closing balance
MFLEX 1,770,752,915.84 1,770,752,915.84
Multek 179,329,062.90 179,329,062.90
Mutto Optronics Technology Co., Ltd. 153,957,647.78 153,957,647.78
Suzhou RF Top Electronic Communication Co., Ltd. 135,001,580.53 135,001,580.53
Total 2,239,041,207.05 2,239,041,207.05
(2) Provision for impairment of goodwill
Unit: RMB
Opening Increase Closing
Investees or events resulting in goodwill
balance Provision balance
Mutto Optronics Technology Co., Ltd. 18,450,298.84 18,450,298.84
Suzhou RF Top Electronic Communication Co., Ltd. 8,868,134.17 8,868,134.17
Total 18,450,298.84 8,868,134.17 27,318,433.01
Related information of asset group or asset group portfolios which include goodwill
(1) MFLEX
Unit: RMB
Composition of asset group or asset group portfolios Assets and liabilities
Carrying amount of asset group or asset group portfolios 8,247,888,700.81
Carrying amount of goodwill allocated to the asset group or asset group portfolios and the allocation method 1,770,752,915.84
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Carrying amount of asset group or asset group portfolios that include goodwill 10,018,641,616.65
Whether asset group or asset group portfolios are consistent with those at acquisition date or those with
Yes
goodwill impairment tested in previous years
(2) Multek
Unit: RMB
Composition of asset group or asset group portfolios Assets and liabilities
Carrying amount of asset group or asset group portfolios 2,385,678,155.26
Carrying amount of goodwill allocated to the asset group or asset group portfolios and the allocation method 179,329,062.87
Carrying amount of asset group or asset group portfolios that include goodwill 2,565,007,218.13
Whether asset group or asset group portfolios are consistent with those at acquisition date or those with
Yes
goodwill impairment tested in previous years
(3) Mutto Optronics Technology Co., Ltd.
Unit: RMB
Composition of asset group or asset group portfolios Assets and liabilities
Carrying amount of asset group or asset group portfolios 603,218,441.75
Carrying amount of goodwill allocated to the asset group or asset group portfolios and the allocation method 135,507,348.94
Carrying amount of asset group or asset group portfolios that include goodwill 738,725,790.69
Whether asset group or asset group portfolios are consistent with those at acquisition date or those with
Yes
goodwill impairment tested in previous years
(4) Suzhou RF Top Electronic Communication Co., Ltd.
Unit: RMB
Composition of asset group or asset group portfolios Assets and liabilities
Carrying amount of asset group or asset group portfolios 229,809,362.34
Goodwill attributable to the Company 135,001,580.53
Goodwill attributable to minority shareholders 57,857,820.23
Carrying amount of goodwill allocated to the asset group or asset group portfolios and the allocation method 192,859,400.76
Carrying amount of asset group or asset group portfolios that include goodwill 422,668,763.10
Whether asset group or asset group portfolios are consistent with those at acquisition date or those with
Yes
goodwill impairment tested in previous years
Remarks on the goodwill impairment testing process, key parameters (such as the growth rate over the estimated period when the
present value of future cash flows is expected, the growth rate over the stabilization period, profitability, discount rate, estimated
period, etc.) and the method for recognizing goodwill impairment losses:
(1) Goodwill impairment testing process of MFLEX
The recoverable amount of goodwill is computed based on the present value of estimated future cash flows, which is based on the
5-year estimated annual cash flows approved by the Company. The discount rate used in estimating the annual cash flows is 9.93%,
and the cash flows subsequent to the estimated period is inferred by a growth rate of 0.00%.
Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product, and other relevant
expenses.
Such key data are determined by the Company based on its experience and its prediction towards market development. The discount
rate used by the Company is the pre-tax interest rate that reveals the time value of currency under the current market situation and
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special risks of certain asset group.
Pursuant to the Evaluation Report (Kun Yuan Ping Bao [2022] No.2-7) issued by Kunyuan Assets Appraisal Co., Ltd., which is
engaged by the Company, the recoverable amount of asset group or asset group portfolios that include goodwill totaled RMB
15,460,000,000.00, with an amount of RMB 5,441,358,383.35 higher than the carrying amount, which suggests that the Company’s
goodwill is not impaired.
(2) Goodwill impairment testing process of Multek
The recoverable amount of goodwill is computed based on the present value of estimated future cash flows, which is based on the
5-year estimated annual cash flows approved by the Company. The discount rate used in estimating the annual cash flows is 11.98%,
and the cash flows subsequent to the estimated period is inferred by a growth rate of 0.00%.
Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product, and other relevant
expenses.
Such key data are determined by the Company based on its experience and its prediction towards market development. The discount
rate used by the Company is the pre-tax interest rate that reveals the time value of currency under the current market situation and
special risks of certain asset group.
Pursuant to the Evaluation Report (Kun Yuan Ping Bao [2022] No.2-6) issued by Kunyuan Assets Appraisal Co., Ltd., which is
engaged by the Company, the recoverable amount of asset group or asset group portfolios that include goodwill totaled RMB
3,450,000,000.00, with an amount of RMB 884,992,781.87 higher than the carrying amount, which suggests that the Company’s
goodwill is not impaired.
(3) Goodwill impairment testing process of Mutto Optronics Technology Co., Ltd.
The recoverable amount of goodwill is computed based on the present value of estimated future cash flows, which is based on the
5-year estimated annual cash flows approved by the Company. The discount rate used in estimating the annual cash flows is 11.48%,
and the cash flows subsequent to the estimated period is inferred by a growth rate of 0.00%.
Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product, and other relevant
expenses.
Such key data are determined by the Company based on its experience and its prediction towards market development. The discount
rate used by the Company is the pre-tax interest rate that reveals the time value of currency under the current market situation and
special risks of certain asset group.
Pursuant to the Evaluation Report (Kun Yuan Ping Bao [2022] No.2-8) issued by Kunyuan Assets Appraisal Co., Ltd., which is
engaged by the Company, the recoverable amount of asset group or asset group portfolios that include goodwill totaled RMB
761,000,000.00, with an amount of RMB 22,274,209.31 higher than the carrying amount, which suggests that the Company’s
goodwill is not impaired.
(4) Goodwill impairment testing process of Suzhou RF Top Electronic Communication Co., Ltd.
The recoverable amount of goodwill is computed based on the present value of estimated future cash flows, which is based on the
5-year estimated annual cash flows approved by the Company. The discount rate used in estimating the annual cash flows is 13.40%,
and the cash flows subsequent to the estimated period is inferred by a growth rate of 0.00%.
Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product, and other relevant
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expenses. Such key data are determined by the Company based on its experience and its prediction towards market development. The
discount rate used by the Company is the pre-tax interest rate that reveals the time value of currency under the current market
situation and special risks of certain asset group.
Pursuant to the Evaluation Report (Zhong Sheng Ping Bao Zi [2022] No.0015 issued by Zhongsheng Appraisal and Consulting Co.,
Ltd., which is engaged by the Company, the recoverable amount of asset group or asset group portfolios that include goodwill totaled
RMB 410,000,000.00, and the carrying amount totaled RMB 422,668,763.10. For the current period, an amount of RMB
12,668,763.10 is recognized as goodwill impairment loss, of which an amount of RMB 8,868,134.17 is attributable to the Company.
19. Long-term deferred expenses
Unit: RMB
Items Opening balance Increase Amortization Other decreases Closing balance
Fixed asset decoration fees and others 324,048,122.31 166,390,747.92 147,371,022.13 343,067,848.10
Total 324,048,122.31 166,390,747.92 147,371,022.13 343,067,848.10
20. Deferred tax assets/deferred tax liabilities
(1) Details of deferred tax assets before offset
Unit: RMB
Closing balance Opening balance
Items Deductible temporary Deferred tax Deductible temporary Deferred tax
difference assets difference assets
Provision for impairment losses of assets 956,860,891.98 180,116,639.73 903,919,163.21 137,912,736.07
Deductible losses 1,160,149,214.53 184,025,381.05 1,210,681,790.98 222,254,426.15
Fixed assets 18,518,436.84 3,989,568.63 50,988,502.52 12,747,125.63
Accrued expenses 215,578,295.20 37,447,545.61 383,739,338.69 76,083,096.12
Provisions 89,442,831.13 17,799,642.22 17,132,627.84 4,217,721.50
Deferred income 681,387,013.96 112,541,906.35 573,283,629.52 105,204,728.65
Total 3,121,936,683.64 535,920,683.59 3,139,745,052.76 558,419,834.12
(2) Details of deferred tax liabilities before offset
Unit: RMB
Closing balance Opening balance
Items Taxable temporary Deferred tax Taxable temporary Deferred tax
difference liabilities difference liabilities
Book-tax difference of depreciation of fixed assets 1,292,505,799.91 285,711,977.06 1,109,639,572.77 277,409,893.20
Accrued interest income, etc. 136,407,400.98 28,647,365.94 90,802,270.04 21,813,987.32
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Total 1,428,913,200.89 314,359,343.00 1,200,441,842.81 299,223,880.52
(3) Deferred tax assets or liabilities after offset
Unit: RMB
Closing balance of deferred tax assets or Opening balance of deferred tax assets or
Items
liabilities after offset liabilities after offset
Deferred tax assets 535,920,683.59 558,419,834.12
Deferred tax liabilities 314,359,343.00 299,223,880.52
(4) Details of unrecognized deferred tax assets
Unit: RMB
Items Closing balance Opening balance
Deductible losses 260,832,646.62 284,863,458.27
Bad debt provisions for accounts receivable 143,374,158.66 150,808,177.86
Bad debt provisions for other receivables 25,054,047.22 36,135,299.60
Provision for inventory write-down 100,331,242.39 75,289,882.17
Provision for payment in advance 11,270,721.08
Investment losses 74,092,106.93 66,576,458.78
Changes in other equity instrument investments 400,000,000.00 400,000,000.00
Provision for impairment of long-term equity investment 68,994,260.52 68,994,260.52
Provision for impairment of goodwill 27,318,433.01 18,450,298.84
Total 1,111,267,616.43 1,101,117,836.04
(5) Maturity years of deductible losses of unrecognized deferred tax assets
Unit: RMB
Maturity years Closing balance Opening balance
Year 2021 63,407,823.66
Year 2022 66,252,182.98 66,252,182.98
Year 2023 13,996,117.83 13,996,117.83
Year 2024 40,403,329.83 40,403,329.83
Year 2025 100,804,003.97 100,804,003.97
Year 2026 39,377,012.01
Total 260,832,646.62 284,863,458.27
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21. Other non-current assets
Unit: RMB
Closing balance Opening balance
Provision Provision
Items Carrying Carrying
Book balance for Book balance for
amount amount
impairment impairment
Deferred income-unrealized
41,372,547.26 41,372,547.26 39,365,561.68 39,365,561.68
sale-leaseback profit or loss
Prepayments for project
244,924,386.94 244,924,386.94 88,328,668.56 88,328,668.56
equipment
Total 286,296,934.20 286,296,934.20 127,694,230.24 127,694,230.24
22. Short-term borrowings
(1) Category of short-term borrowings
Unit: RMB
Items Closing balance Opening balance
Pledged borrowings 803,328,447.58 263,605,960.00
Credit borrowings 5,423,644,628.31 4,536,179,758.34
Discounted payments on acceptance bills and letters of credit 1,820,194,933.27 3,581,805,423.85
Financing borrowings of export trade acceptances 197,563,926.00
Total 8,047,168,009.16 8,579,155,068.19
23. Held-for-trading financial liabilities
Unit: RMB
Items Closing balance Opening balance
Held-for-trading financial liabilities 881,721.20
Including:
Derivative financial liabilities 881,721.20
Total 881,721.20
24. Notes payable
Unit: RMB
Category Closing balance Opening balance
Trade acceptance 495,211,358.88 541,472,482.11
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Bank acceptance 1,151,432,748.29 1,226,468,067.64
Total 1,646,644,107.17 1,767,940,549.75
At the end of the reporting period, balances due but unpaid totaled RMB0.00.
25. Accounts payable
(1) Accounts payable
Unit: RMB
Items Closing balance Opening balance
Payables for materials 6,379,442,178.87 6,251,650,591.54
Payables for project equipment 238,100,061.70 1,051,629,072.88
Others 112,347,885.43 139,958,248.30
Total 6,729,890,126.00 7,443,237,912.72
26. Contract liabilities
Unit: RMB
Items Closing balance Opening balance
Goods payments 39,681,986.94 21,204,655.32
Total 39,681,986.94 21,204,655.32
27. Employee benefits payable
(1) Employee benefits payable
Unit: RMB
Items Opening balance Increase Decrease Closing balance
I. Short-term employee benefits 373,384,122.38 3,928,073,203.08 3,807,269,007.26 494,188,318.20
II. Post-employment benefits-defined contribution plan 8,050,407.71 215,116,416.24 214,216,420.09 8,950,403.86
III. Termination benefits 6,475,698.34 6,475,698.34
Total 381,434,530.09 4,149,665,317.66 4,027,961,125.69 503,138,722.06
(2) Details of short-term employee benefits
Unit: RMB
Items Opening balance Increase Decrease Closing balance
1. Wage, bonus, allowance and subsidy 369,650,802.72 3,462,795,244.94 3,349,143,601.70 483,302,445.96
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2.Employee welfare fund 256,368,603.05 249,334,638.10 7,033,964.95
3. Social insurance premium 2,938,722.85 99,565,514.71 99,408,387.74 3,095,849.82
Occupational injuries premium 379,233.09 13,199,457.47 13,273,353.52 305,337.04
Medicare and maternity premium 2,559,489.76 86,366,057.24 86,135,034.22 2,790,512.78
4. Housing provident fund 767,689.28 99,745,056.47 99,799,031.28 713,714.47
5. Trade union fund and employee education fund 26,907.53 9,598,783.91 9,583,348.44 42,343.00
Total 373,384,122.38 3,928,073,203.08 3,807,269,007.26 494,188,318.20
(3) Details of defined contribution plan
Unit: RMB
Items Opening balance Increase Decrease Closing balance
1.Basic endowment insurance premium 7,623,423.95 207,388,041.17 206,496,101.60 8,515,363.52
2. Unemployment insurance premium 426,983.76 7,728,375.07 7,720,318.49 435,040.34
Total 8,050,407.71 215,116,416.24 214,216,420.09 8,950,403.86
28. Taxes and rates payable
Unit: RMB
Items Closing balance Opening balance
Value-added tax (VAT) 13,157,710.23 12,591,579.73
Enterprise income tax 118,468,480.14 131,306,099.72
Personal income tax 6,497,075.81 4,989,500.32
Urban maintenance and construction tax 5,756,770.23 3,924,093.42
Housing property tax 2,086,047.98 2,914,231.15
Stamp duty 1,218,619.49 888,997.63
Education surcharge 2,533,372.30 2,578,621.84
Land use tax 251,467.78 261,295.92
Local education surcharge 1,688,914.92 718,643.14
Water conservancy construction fund 3,191.10 15,707.90
Environmental taxes 30,893.87 23,933.28
Total 151,692,543.85 160,212,704.05
29. Other payables
Unit: RMB
Items Closing balance Opening balance
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Other payables 323,166,075.34 59,939,206.62
Total 323,166,075.34 59,939,206.62
(1) Other payables
1) Other payables by nature
Unit: RMB
Items Closing balance Opening balance
Factoring funds temporarily received from customers 255,139,275.93
Temporary advance receipts payable 53,170,787.42 29,912,249.35
Payables for transfer of equity shares 24,761,591.39
Others 14,856,011.99 5,265,365.88
Total 323,166,075.34 59,939,206.62
30. Non-current liabilities due within one year
Unit: RMB
Items Closing balance Opening balance
Long-term borrowings due within one year 1,386,857,142.00 601,243,593.78
Long-term payables due within one year 34,658,340.90 363,320,073.06
Lease liabilities due within 1 year 69,030,382.03 20,648,075.55
Total 1,490,545,864.93 985,211,742.39
31. Other current liabilities
Unit: RMB
Items Closing balance Opening balance
Output tax to be transferred 2,440,030.34 865,474.44
Total 2,440,030.34 865,474.44
32. Long-term borrowings
(1) Category of long-term borrowings
Unit: RMB
Items Closing balance Opening balance
Pledged borrowings 96,273,070.00
Guaranteed borrowings 200,000,000.00 1,272,146,490.00
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Credit borrowings 1,274,252,691.80 1,192,574,404.68
Guaranteed and pledged borrowings 200,000,000.00
Pledged, mortgaged and guaranteed borrowings 260,000,000.00 300,000,000.00
Total 2,030,525,761.80 2,764,720,894.68
33. Lease liabilities
Unit: RMB
Items Closing balance Opening balance
Lease payments not paid yet 1,477,069,971.87 1,487,741,006.63
Financing expenses unrecognized -329,259,807.15 -370,990,443.10
Total 1,147,810,164.72 1,116,750,563.53
34. Long-term payables
Unit: RMB
Items Closing balance Opening balance
Long-term payables 78,927,000.98 126,060,204.59
Total 78,927,000.98 126,060,204.59
(1) Details in long-term payables categorized by nature
Unit: RMB
Items Closing balance Opening balance
Finance lease payables 78,927,000.98 126,060,204.59
35. Provisions
Unit: RMB
Items Closing balance Opening balance
Products quality guarantee 67,188,779.26 13,895,925.00
Goods refund payable 22,254,051.87 21,823,625.76
Total 89,442,831.13 35,719,550.76
36. Deferred income
Unit: RMB
Items Opening balance Increase Decrease Closing balance Reasons for balance
Government grants 648,248,649.02 142,954,343.00 105,569,311.37 685,633,680.65 Related to assets
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Total 648,248,649.02 142,954,343.00 105,569,311.37 685,633,680.65 --
37. Share capital
Unit: RMB
Increase or decrease (+,-)
Opening balance Issue of new Reserve transferred to Sub-tota Closing balance
Bonus shares Others
shares shares l
Total shares 1,709,867,327.00 1,709,867,327.00
38. Capital reserve
Unit: RMB
Items Opening balance Increase Decrease Closing balance
Capital premium (share capital premium) 7,957,871,910.95 7,957,871,910.95
Other capital reserve 179,007,502.44 37,354,540.49 141,652,961.95
Total 8,136,879,413.39 37,354,540.49 8,099,524,872.90
Other remarks, including changes and reasons therefor:
The Company purchased a minority interest of RF Top Electronic, resulting capital surplus decreased by RMB 37,354,540.49 since
there is a difference between the purchase price and the net assets held by the Company based on the shareholding proportion.
39.Treasury shares
Unit: RMB
Items Opening balance Increase Decrease Closing balance
Treasury shares 100,479,794.32 100,479,794.32
Total 100,479,794.32 100,479,794.32
Other remarks, including changes and reasons therefor:
As of August 31, 2021, the Company accumulatively repurchased a total of 5.3197 million shares of the Company through a special
securities account for repurchase by means of centralized competitive bidding with a transaction amount totaled RMB 100.4798
(excluding transaction costs), accounting for 0.31% of the total share capital of the Company. In the above repurchase transactions,
the highest transaction price paid by the Company was RMB 19.18 per share while the lowest transaction price was RMB 18.24 per
share.
40. Other comprehensive income (OCI)
Unit: RMB
Current period cumulative
Opening Current period Less: OCI Less: OCI Attributable to Attributable
Items Closing balance
balance cumulative previously previously Less: Income tax the parent to
before income recognized but recognized but company after non-controllin
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tax transferred to transferred to tax g shareholders
profit or loss in retained earnings
current period in current period
I. Items not to be reclassified
-328,063,853.54 21,936,146.46 -21,936,146.46 -350,000,000.00
subsequently to profit or loss
Changes in fair value of other
-328,063,853.54 21,936,146.46 -21,936,146.46 -350,000,000.00
equity instrument investments
II. Items to be reclassified
-123,551,784.22 18,958,707.99 63,740,316.63 1,292,673.35 -46,074,281.99 -169,626,066.21
subsequently to profit or loss
Cash flow hedging reserves 50,109,339.97 69,679,599.00 63,740,316.63 1,292,673.35 4,646,609.02 54,755,948.99
Translation reserves -173,661,124.19 -50,720,891.01 -50,720,891.01 -224,382,015.20
Total -451,615,637.76 18,958,707.99 63,740,316.63 21,936,146.46 1,292,673.35 -68,010,428.45 -519,626,066.21
41. Surplus reserve
Unit: RMB
Items Opening balance Increase Decrease Closing balance
Statutory surplus reserve 75,205,377.40 36,492,937.75 111,698,315.15
Total 75,205,377.40 36,492,937.75 111,698,315.15
Descriptions of surplus reserve, including changes for the current period and reasons therefor:
Surplus reserve increased by RMB 36,492,937.75 this year, arising from appropriation of statutory surplus reserve in accordance with
10% of net profits of the parent company.
42. Undistributed profit
Unit: RMB
Items Current period cumulative Preceding period comparative
Balance before adjustment at the end of preceding period 3,598,580,392.76 2,169,454,382.50
Opening balance after adjustment 3,598,580,392.76 2,169,454,382.50
Add: Net profit attributable to owners of the parent company 1,862,481,138.84 1,530,132,196.09
Less: Appropriation of statutory surplus reserve 36,492,937.75 20,677,561.98
Dividends payable on ordinary shares 170,986,732.70 80,328,623.85
Add: others 21,933,809.48
Closing balance 5,275,515,670.63 3,598,580,392.76
43. Operating revenue and operating costs
Unit: RMB
Items Current period cumulative Preceding period comparative
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Revenue Cost Revenue Cost
Main operations 31,682,727,248.03 27,080,576,091.48 28,017,895,740.11 23,648,679,360.68
Other operations 110,420,660.09 47,974,536.45 75,513,690.15 31,612,149.09
Total 31,793,147,908.12 27,128,550,627.93 28,093,409,430.26 23,680,291,509.77
Whether the lower of the net profit after non-recurring gains or losses is negative
□ Yes √ No
Other remarks
Revenue recognized in the current period and included in the opening balance of the book value of contract liabilities amounted to
RMB 6,648,456.90.
44. Taxes and surcharges
Unit: RMB
Items Current period cumulative Preceding period comparative
Urban maintenance and construction tax 24,263,505.47 32,460,565.44
Education surcharge 11,969,192.59 17,176,219.26
Housing property tax 16,123,105.43 15,533,333.82
Land use tax 1,365,774.21 1,259,185.72
Vehicle and vessel use tax 24,502.86 12,480.02
Stamp duty 11,367,477.23 9,503,081.81
Local education surcharge 7,913,333.55 11,450,772.16
Environmental taxes 133,322.63 92,361.87
Total 73,160,213.97 87,488,000.10
45. Selling expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Employee benefits 190,368,189.92 187,002,497.39
Selling service fees 39,874,711.20 28,320,239.10
Export expenses 35,107,304.52 34,040,606.18
Travel expenses 30,192,865.53 29,294,177.28
Business entertainment expenses 13,589,530.56 17,916,382.22
Others 31,955,044.68 32,606,444.33
Total 341,087,646.41 329,180,346.50
Other remarks:
The Company presents transportation costs incurred to fulfill customers’ sales contracts in the line item of operating cost in
accordance with the Q&A for the Implementation of CASBEs issued by the Accounting Department of the Ministry of Finance on
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November 2, 2021.
46. Administrative expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Employee benefits 416,884,816.93 379,738,766.26
Depreciation and amortization 112,065,654.97 93,375,850.37
Consulting service fees 72,107,147.93 62,071,843.91
Office allowances 49,392,919.93 41,196,948.62
Business entertainment expenses 39,212,589.24 37,962,065.24
Travel expenses 12,835,540.39 17,948,042.56
Lease payments 8,372,878.92 6,696,424.00
Repair expenses 17,205,668.65 3,204,690.07
Taxes 436,304.97 840,453.62
Others 53,151,208.43 43,443,918.43
Total 781,664,730.36 686,479,003.08
47. R&D expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Materials used 553,757,553.07 521,199,000.98
Labor costs 345,837,438.45 293,856,853.11
Depreciation expenses 56,671,015.71 48,314,696.60
Others 72,301,199.72 46,882,830.75
Total 1,028,567,206.95 910,253,381.44
48. Financial expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Interest expenses 285,474,106.93 460,228,886.85
Lease interest and financing charges 85,865,366.64 102,086,293.45
Less: interest income 62,819,318.55 87,524,003.63
Add: foreign exchange losses 70,483,663.21 103,103,675.59
Bank commissions and others 57,659,855.67 52,215,726.71
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Total 436,663,673.90 630,110,578.97
49. Other income
Unit: RMB
Source of other income Current period cumulative Preceding period comparative
Government grants related to assets 105,569,311.37 62,619,560.46
Government grants related to income 163,175,414.88 139,310,997.96
Refund of handling fees for withholding individual income tax 722,866.99 414,836.61
50. Investment income
Unit: RMB
Items Current period cumulative Preceding period comparative
Investment income from long-term equity investments under equity
-7,515,648.15 6,412,017.44
method
Investment income from disposal of long-term equity investments 28,827,931.90 7,620,144.16
Investment income from held-for-trading financial assets 108,467.86
Investment income from disposal of held-for-trading financial assets 9,012,671.97 -327,019.04
Discounted loss on receivables financing -768,750.98 -5,545,219.23
Income from bank wealth management product 11,913,618.63 10,718,494.92
Total 41,578,291.23 18,878,418.25
51. Gains on changes in fair value
Unit: RMB
Source of gains on changes in fair value Current period cumulative Preceding period comparative
Held-for-trading financial assets 8,645,469.99 18,302,922.59
Held-for-trading financial liabilities -5,069,471.20
Total 8,645,469.99 13,233,451.39
52. Credit impairment losses
Unit: RMB
Items Current period cumulative Preceding period comparative
Bad debt losses -7,992,105.91 -142,200,047.48
Total -7,992,105.91 -142,200,047.48
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53. Assets impairment loss
Unit: RMB
Items Current period cumulative Preceding period comparative
I. Bad debt losses -11,270,721.08
II. Losses from inventory write-down and impairment loss of
-166,254,407.47 -84,916,564.37
contract performance costs
V. Impairment loss of fixed assets -983,457.38
XI. Impairment loss of goodwill -8,868,134.17
Total -187,376,720.10 -84,916,564.37
54. Gains on asset disposal
Unit: RMB
Source of gains on asset disposal Current period cumulative Preceding period comparative
Gains on disposal of fixed assets -14,060,145.96 20,840,573.82
Gains on disposal of intangible assets 541,691.72
55. Non-operating revenue
Unit: RMB
Amount included in the
Current period Preceding period
Items non-recurring gains or losses
cumulative comparative
for the current period
Performance compensation 12,000,000.00
Income from fines and confiscations 407,738.14 528,429.78 407,738.14
Payment unable to be made 2,380,233.49 152,263.58 2,380,233.49
Others 324,831.16 784,497.46 324,831.16
Total 3,112,802.79 13,465,190.82 3,112,802.79
56. Non-operating expenditures
Unit: RMB
Amount included in the
Current period Preceding period
Items non-recurring gains or losses
cumulative comparative
for the current period
Donation expenditures 3,503,180.00 11,626,835.65 3,503,180.00
Losses on damage or scrapping of non-current assets 984,352.01 10,453,563.18 984,352.01
Penalties, late payment fees, and liquidated damages 972,242.63 3,045,323.20 972,242.63
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Others 546,696.75 343,650.33 546,696.75
Total 6,006,471.39 25,469,372.36 6,006,471.39
57. Income tax expenses
(1) Table of income tax expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Current period income tax expenses 213,580,884.70 311,953,419.80
Deferred income tax expenses 36,341,939.66 -62,815,256.58
Total 249,922,824.36 249,138,163.22
(2) Reconciliation of accounting profit to income tax expenses
Unit: RMB
Items Current period cumulative
Profit before tax 2,110,822,522.49
Income tax expense calculated based on statutory/applicable tax rate 316,623,378.37
Effect of different tax rate applicable to subsidiaries -11,239,785.34
Effect of non-deductible costs, expenses and losses 4,571,962.96
Effect of deducible temporary differences or deductible losses not recognized as
12,065,419.74
deferred tax assets in the current period
Effect of additional deduction of R&D expenses -72,098,151.37
Income tax expenses 249,922,824.36
58. Other comprehensive income
Please refer to the note of other comprehensive income (OCI) for details.
59. Items of the consolidated cash flow statement
(1) Other cash receipts related to operating activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Deposits for acceptance bills 129,542,128.04 460,794,004.93
Government grants 318,989,224.87 468,187,787.14
Interest income 62,819,318.55 87,524,003.63
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Temporary advance receipts payable and others 732,569.30 1,312,927.24
Total 512,083,240.76 1,017,818,722.94
(2) Other cash payments related to operating activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Deposits for acceptance bills 151,102,248.04 129,542,128.04
Cash payments of selling expenses 150,719,456.49 297,647,844.03
Cash payments of administrative expenses 252,714,258.46 213,364,386.45
Cash payments of R&D expenses 72,301,199.72 95,197,527.35
Band commissions 57,659,855.67 52,215,726.71
Temporary advance payments receivable and others 40,105,256.38 22,988,094.67
Total 724,602,274.76 810,955,707.25
(3) Other cash receipts related to investing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Time deposits 50,000,000.00 108,408,535.48
Recovery of asset transfer payments 564,294,406.73 232,000,000.00
Total 614,294,406.73 340,408,535.48
(4) Other cash payments related to investing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Loss control over subsidiaries 1,288.94
Total 1,288.94
(5) Other cash receipts related to financing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Cash receipts of sale-leaseback financing lease 167,000,000.00
Various guarantee deposits 2,101,333,325.23 1,561,876,058.26
Discounted payments on acceptance bills and letters of credit 1,820,194,933.27 3,581,805,423.85
Total 3,921,528,258.50 5,310,681,482.11
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(6) Other cash payments related to financing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Auditing and consulting fees paid for issue of securities 4,801,886.79
Various guarantee deposits 826,870,220.72 2,101,333,325.23
Lease payments 282,078,462.04 546,136,122.12
Payments for bill financing 3,581,805,423.85 3,346,731,652.83
Repurchase of shares 100,479,794.32
Acquisition of non-controlling interest of RF Top Electronic 65,756,910.17
Total 4,856,990,811.10 5,999,002,986.97
60. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Unit: RMB
Supplementary information Current period cumulative Preceding period comparative
1. Reconciliation of net profit to cash flow from operating activities: -- --
Net profit 1,860,899,698.13 1,537,187,184.00
Add: Provision for assets impairment loss 195,368,826.01 227,116,611.85
Depreciation of fixed assets, oil and gas assets, productive
1,581,049,391.72 1,464,361,023.91
biological assets
Depreciation of right-of-use assets 86,304,860.90
Amortization of intangible assets 48,775,081.14 44,872,349.70
Amortization of long-term prepayments 147,371,022.13 140,820,154.70
Losses on disposal of fixed assets, intangible assets and
14,060,145.96 -21,382,265.54
other long-term assets (or less: gains)
Fixed assets scrapping loss (or less: gains) 984,352.01 10,453,563.18
Losses on changes in fair value (or less: gains) -8,645,469.99 -13,233,451.39
Financial expenses (or less: gains) 351,562,005.91 569,248,680.30
Investment losses (or less: gains) -41,578,291.23 -18,878,418.25
Decrease of deferred tax assets (or less: increase) 22,499,150.53 -214,192,107.74
Increase of deferred tax liabilities (or less: decrease) 13,842,789.13 151,376,851.16
Decrease of inventories (or less: increase) -739,877,310.44 -1,505,664,143.68
Decrease of operating receivables (or less: increase) -780,445,681.69 -1,538,112,737.17
Increase of operating payables (or less: decrease) 457,373,913.99 2,110,195,599.62
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Others -12,000,000.00
Net cash flows from operating activities 3,209,544,484.21 2,932,168,894.65
2. Significant investing and financing activities not related to cash
-- --
receipts and payments:
3. Net changes in cash and cash equivalents: -- --
Closing balance of cash 3,939,301,126.79 2,873,135,085.47
Less: opening balance of cash 2,873,135,085.47 1,946,860,870.72
Add: closing balance of cash equivalents
Less: opening balance of cash equivalents
Net increase of cash and cash equivalents 1,066,166,041.32 926,274,214.75
(2) Net cash receipts from disposal of subsidiaries in current period
Unit: RMB
Amount
Including: --
Less: cash and cash equivalents held by subsidiaries at the date of losing control 1,288.94
Including: --
Chongqing Chengjia Precision Electronic Technology Co., Ltd. 153.36
Dongguan Xindong Intelligent Technology Co., Ltd. 1,135.58
Including: --
Net cash receipts from disposal of subsidiaries -1,288.94
(3) Composition of cash and cash equivalents
Unit: RMB
Items Closing balance Opening balance
I. Cash 3,939,301,126.79 2,873,135,085.47
Including: cash on hand 241,046.60 533,015.82
Cash in bank on demand for payment 3,939,060,080.19 2,872,602,069.65
III. Closing balance of cash and cash equivalents 3,939,301,126.79 2,873,135,085.47
61. Assets with title or use right restrictions
Unit: RMB
Items Closing carrying amount Reason for restriction
Cash and bank balances 1,461,536,265.68 Bill deposits, etc.
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Fixed assets 490,778,211.02 Mortgaged for borrowings or subject to sale-leaseback contract
Intangible assets 4,207,098.63 Mortgaged for borrowings
Receivables financing 337,954,600.06 Pledged for notes receivable
Accounts receivable 49,750,000.00 Factoring of accounts receivable
Right-of-use assets 920,952,667.75 Finance lease
Total 3,265,178,843.14 --
62. Monetary items in foreign currencies
(1) Monetary items in foreign currencies
Unit: RMB
Items Closing balance in foreign currencies Exchange rate Closing balance of RMB equivalent
Cash and bank balances -- -- 2,488,349,146.44
Including: USD 387,317,338.71 6.37570 2,469,419,156.43
EUR 1,490,666.23 7.21970 10,762,162.98
HKD 965,806.65 0.81760 789,643.52
SGD 1,516,516.89 4.71790 7,154,775.04
NTD 740,822.00 0.23020 170,537.22
JPY 793.00 0.05542 43.94
SEK 74,930.25 0.70502 52,827.31
Accounts receivable -- -- 5,643,879,544.37
Including: USD 883,824,378.16 6.37570 5,634,999,087.83
EUR 1,230,031.24 7.21970 8,880,456.54
Long-term borrowings -- -- 357,385,842.79
Including: USD 56,054,369.37 6.37570 357,385,842.79
Other receivables 38,924,944.21
Including: USD 6,104,481.11 6.37570 38,920,340.21
NTD 20,000.00 0.23020 4,604.00
Short-term borrowings 2,022,294,192.26
Including: USD 317,187,789.93 6.37570 2,022,294,192.26
Accounts payable 2,428,693,982.42
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Including: USD 379,913,796.40 6.37570 2,422,216,391.71
EUR 896,951.73 7.21970 6,475,722.41
SEK 2,650.00 0.70502 1,868.30
Employee benefits payable 42,079,655.64
Including: USD 6,600,005.59 6.37570 42,079,655.64
Taxes and rates payable 71,136,583.87
Including: USD 11,157,454.69 6.37570 71,136,583.87
Other payables 286,397,676.81
Including: USD 44,920,193.36 6.37570 286,397,676.81
Non-current liabilities due within
239,905,784.80
one year
Including: USD 37,628,148.25 6.37570 239,905,784.80
(2) Descriptions of overseas operating entities, including disclosure of the main overseas business locations,
functional currency and the basis for selection of important overseas operating entities, and the reasons for
changes in functional currency (if any).
□ Applicable √ N/A
63. Government grants
(1) Basic information of government grants
Unit: RMB
Amount recognized in
Category Amount Items presented
current profit or loss
Yancheng Production Equipment Subsidy 381,880,587.80 Other income 49,780,281.81
2019 Special Funds for the High-Quality Development of
85,700,482.60 Other income 24,441,307.92
Industrial Economy All over the Industry Park
Multek Technology Transformation Subsidy 92,686,284.78 Other income 10,450,326.53
Special Incentive Funds of Science and Technology Industrial
64,890,000.00 Other income 9,270,000.00
Park
2020 Subsidy for the Construction of the Emergency Material
21,973,333.33 Other income 2,560,000.00
Security System from Central Financial Administration
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Subsidy for Technical Transformation of Mutto Optronics 5,289,866.67 Other income 749,200.00
Suzhou Machinery and Equipment Subsidy 10,150,591.00 Other income 2,621,409.05
2020 High-Quality Development Funds -2019 Demonstration
1,182,222.20 Other income 1,182,222.24
Intelligent Workshop
Yancheng Flexible Circuit Board and Supporting Assembly
1,458,332.94 Other income 500,000.04
Project
Municipal Financial Subsidy for the Promotion of New
390,062.67 Other income 1,011,536.00
Energy Vehicles
2019 Special Funds for High-Quality Development of
1,200,000.00 Other income 150,000.00
Industrial Economy
Showroom Decoration Subsidy 822,500.00 Other income 105,000.00
2018 Subsidy Received for Encouraging Intelligent
248,888.89 Other income 35,555.55
Equipment Input
2020 Incentives of High-Quality Development of Industrial
9,330,188.70 Other income 2,169,811.30
Economy – Replacing Workforce with Machine
RF Top Electronic Industrial Technology Reform Subsidy 5,766,116.87 Other income 94,883.13
2020 Special Support Funds for Promoting High Quality
Development of Industrial Economy and Accelerating the
2,090,000.00 Other income 110,000.00
Industry Upgrading of Robotics and Intelligent
Manufacturing in Wuzhong District
2020 Incentives of High-Quality Development of Industrial
574,222.20 Other income 337,777.80
Economy –Intelligent System Utilization
2020 Special Funds for Provincial Industrial Transformation
42,309,000.00 Other income 42,309,000.00
and Upgrading
Special Incentives to MFLEX Yancheng to Expand and
29,608,400.00 Other income 29,608,400.00
Strengthen the Intelligent Terminal Industry Chain
Social Insurance Subsidy (2020) 17,327,239.00 Other income 17,327,239.00
2020 Incentives for High-Quality Development of Industrial
9,645,000.00 Other income 9,645,000.00
Economy and Listing
2021 Central Foreign Trade and Economic Development
6,309,500.00 Other income 6,309,500.00
Special Funds
Outstanding Contribution Award in Development Zone
Commendation Conference, Incentives for Expanding and
Strengthening the Intelligent Manufacturing, Incentives for
5,200,000.00 Other income 5,200,000.00
Intelligent Manufacturing Demonstration Application,
Incentives for Energy-Saving Green System Construction;
and Subsidy for Purchase of IT Tools
Interest Subsidy for Import Business 4,441,712.00 Other income 4,441,712.00
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Spring Festival Subsidy for Staying in Yancheng City 4,078,000.00 Other income 4,078,000.00
Special Support Funds for Promoting High Quality
Development of Industrial Economy and Accelerating the
3,070,000.00 Other income 3,070,000.00
Industry Upgrading of Robotics and Intelligent
Manufacturing in Wuzhong District
2020 Provincial Business Development Funds 2,769,300.00 Other income 2,769,300.00
Employment Stabilization Subsidy 2,498,436.60 Other income 2,498,436.60
Special Funds for Industrial Transformation and Upgrading
2,457,400.00 Other income 2,457,400.00
(Technical Transformation)
District-Level Funds for New Registered Capital Awards for
2,400,000.00 Other income 2,400,000.00
the Real Economy
2020 Seagull Plan Subsidy 2,362,125.00 Other income 2,362,125.00
Excellent Foreign Trade Enterprises, Energy-Saving and
Emission Reduction Outstanding Enterprises, Excellent 2,250,000.00 Other income 2,250,000.00
Foreign Enterprises, Top 100 Enterprises
Spring Festival Subsidy for Staying in Wuzhong District 2,213,717.06 Other income 2,213,717.06
Subsidy for Work-Based Training 1,683,807.02 Other income 1,683,807.02
Science and Innovation Support for Accelerating the
1,198,700.00 Other income 1,198,700.00
Construction of World-Class High-tech Industrial Park
2020 Incentives for Science and Technology Innovation All
1,018,900.00 Other income 1,018,900.00
over the Industry Park
Achievement of High-Quality Development Through Capital
1,000,000.00 Other income 1,000,000.00
Market
Supporting Incentives of Core Technology Product Subsidy
1,000,000.00 Other income 1,000,000.00
by Suzhou City
2020 District-Level Reward for R&D Investment in Science
905,500.00 Other income 905,500.00
and Technology Innovation
“Staying In Wuzhong District to Improve Skills”
Project-Based Training Subsidy of Wuzhong District, Suzhou 862,600.00 Other income 862,600.00
City
Special Funds for Utilizing Vocational Skills to Improve
Actions - Improve the Quality and Efficiency of Vocational 849,500.00 Other income 849,500.00
Skills Training
2020 Provincial Industrial Enterprise Technical
808,700.00 Other income 808,700.00
Transformation Comprehensive Award
2021 Provincial Special Development Funds - Functional
800,000.00 Other income 800,000.00
Institutions
Anti-Epidemic Subsidy 771,484.00 Other income 771,484.00
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2021 Seagull Plan Subsidy 700,000.00 Other income 700,000.00
City-Level Funds for New Registered Capital Awards for the
600,000.00 Other income 600,000.00
Real Economy
Suzhou Science and Innovation Bureau Subsidies -
Supporting Funds for 2020 Post-Grant Incentives of Core 545,450.00 Other income 545,450.00
Technology Products
2020 Support Funds to Innovation and Entrepreneurship
510,000.00 Other income 510,000.00
Leading Talents
Other government grants 10,980,944.20 Other income 10,980,944.20
2020 Interest Subsidy for Science and Technology Loan 196,100.00 Financial expenses 196,100.00
Interest Subsidy for Loan of Stabilizing Growth 24,500.00 Financial expenses 24,500.00
(2) Government grants returned in the current period
□ Applicable √ N/A
VIII. Changes in the Consolidation Scope
1. Changes in the consolidation scope caused by other reasons
Descriptions of changes in the consolidation scope caused by other reasons (such as establishment of a new subsidiary and
liquidation of a subsidiary, etc.) and their relevant information:
(1) Entities brought into the consolidation scope
Unit: RMB
Capital
Equity acquisition Capital
Entities Equity acquisition method contribution
time point contribution
proportion (%)
Suzhou Dongchen Intelligent Equipment Establishment through
November 30,2021 2,000,000.00 100.00%
Manufacturing Co., Ltd. (Note 1) investment
Shanghai Dongxin New Energy Establishment through
August 27, 2021 300,000,000.00 100.00%
Technology Co., Ltd. (Note 2) investment
Shanghai Donglan New Energy Establishment through
November 1, 2021 90,000,000.00 100.00%
Technology Co., Ltd. (Note 3) investment
Hainan Chengjia Technology Consulting Establishment through
May 14, 2021 1,000,000.00 100.00%
Co., Ltd. investment
[Note 1] The company subscribed capital contribution amounting to RMB 10,000,000.00, and paid up RMB 2,000,000.00.
[Note 2] The company subscribed capital contribution amounting to RMB 300,000,000.00, none of which was paid up.
[Note 3] The company subscribed capital contribution amounting to RMB 90,000,000.00, none of which was paid up.
(2) Entities excluded from the consolidation scope
Unit: RMB
Equity disposal Equity disposal time Disposal-date Net profit from the
Entities
method point net assets period beginning to the
187
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disposal date
Chongqing Chengjia Precision
Deregistration January 29, 2021 24,342.84 -958.00
Electronic Technology Co., Ltd.
Dongguan Xindong Intelligent
Losing control August 31, 2021 -28,852,274.89 -6,347.59
Technology Co., Ltd.
DSBJ FINLAND OY Deregistration December 31, 2021 -294,299.73
Suzhou Dongshan Precision Technology
Deregistration November 16, 2021
Co., Ltd.
IX. Interests in Other Entities
1. Interests in subsidiaries
(1) Composition of enterprise group
Main Holding proportion (%)
Place of
Subsidiaries operating Business nature Acquisition method
registration Direct Indirect
place
Business
YCMT Suzhou Suzhou Manufacturing 100.00% combination under
common control
Business
Suzhou Yuanshi Electronic Technology
Suzhou Suzhou Manufacturing 100.00% combination under
Co., Ltd.
common control
HongKong Dongshan Precision Union Hong Kong, Hong Kong, Business and
100.00% Establishment
Opoelectronic Co., Limited China China investment
Suzhou Dongkui Lighting Co.,Ltd. Suzhou Suzhou Manufacturing 100.00% Establishment
Suzhou Chengjia Precision
Suzhou Suzhou Manufacturing 100.00% Establishment
Manufacturing Co.,Ltd.
Dongguan Dongshan Precision
Dongguan Dongguan Manufacturing 95.00% 5.00% Establishment
Manufacturing Co., Ltd.
Chongqing Chengjia Precision
Chongqing Chongqing Manufacturing 90.00% 10.00% Establishment
Electronic Technology Co., Ltd.
Suzhou Dongjiyuan Metal Technology
Suzhou Suzhou Manufacturing 100.00% Establishment
Co., Ltd.
Yancheng Dongshan Precision
Yancheng Yancheng Manufacturing 95.00% 5.00% Establishment
Manufacturing Co., Ltd.
Business
Suzhou RF Top Electronic combination not
Suzhou Suzhou Manufacturing 68.91%
Communication Co., Ltd. under common
control
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Suzhou Jebson Intelligent Technology
Suzhou Suzhou Manufacturing 51.00% Establishment
Co., Ltd.
Suzhou Dongdai Electronic Technology
Suzhou Suzhou Manufacturing 51.00% Establishment
Co., Ltd.
Suzhou Dongyan Electronic Technology
Suzhou Suzhou Manufacturing 51.00% Establishment
Co., Ltd.
Yancheng Dongshan Enterprise Property
Yancheng Yancheng 95.00% 5.00% Establishment
Management Co., Ltd. management
Hong Kong, Hong Kong, Business and
Hong Kong Dongshan Holding Limited 100.00% Establishment
China China investment
Yancheng Dongshan Communication
Yancheng Yancheng Manufacturing 100.00% Establishment
Technology Co., Ltd.
Shanghai Chengjia Consulting Business and
Shanghai Shanghai 100.00% Establishment
Management Co., Ltd. investment
Business
Suzhou Aiguan Material Technology combination not
Suzhou Suzhou Manufacturing 100.00%
Co., Ltd. under common
control
Dongguan Xindong Intelligent
Dongguan Dongguan Manufacturing 51.00% Establishment
Technology Co., Ltd.
Business
British British
Business and combination not
Mutto Optronics Group Limited Virgin Virgin 100.00%
investment under common
Islands Islands
control
Business and
DSBJ Solutions INC USA USA 100.00% Establishment
investment
Business and
DSBJ holdings Inc. USA USA 100.00% Establishment
investment
Business and
DSBJ International Inc. USA USA 100.00% Establishment
investment
Business and
DSBJ FINLAND OY Finland Finland 100.00% Establishment
investment
Business and
Dragon Electronix Holdings INC. USA USA 100.00% Establishment
investment
Cayman Cayman Business and
Dongshan International Holdings Inc 100.00% Establishment
Islands Islands investment
Business
Mutto Optronics Technology Co., Ltd. Suzhou Suzhou Manufacturing 100.00% combination not
under common
189
Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
control
Suzhou Dongshan Precision Technology
Suzhou Suzhou Manufacturing 100.00% Establishment
Co., Ltd.
Yancheng Mutto Optronics Technology
Yancheng Yancheng Manufacturing 100.00% Establishment
Co., Ltd.
Business
Business and combination not
Multi-Fineline Electronix, Inc. USA USA 100.00%
investment under common
control
Business
Delaware, Delaware, Business and combination not
MFLEX Delaware, Inc. 100.00%
USA USA investment under common
control
Business
Business and combination not
MFLEX B.V. Netherlands Netherlands 100.00%
investment under common
control
Business
Multi-Fineline Electronix Singapore Business and combination not
Singapore Singapore 100.00%
Pte.Ltd. investment under common
control
Business
combination not
MFLEX Suzhou Co., Ltd. Suzhou Suzhou Manufacturing 100.00%
under common
control
Dowell Smart Suzhou Co., Ltd. Suzhou Suzhou Manufacturing 100.00% Establishment
Business
combination not
MFLEX Chengdu Co., Ltd. Chengdu Chengdu Manufacturing 100.00%
under common
control
MFLEX Yancheng Co., Ltd. Yancheng Yancheng Manufacturing 100.00% Establishment
Business and
DSBJ PTE.LTD. Singapore Singapore 100.00% Establishment
investment
Business and
Multek Technology Sweden AB Sweden Sweden 100.00% Establishment
investment
Multek Technology Malaysia Business and
Malaysia Malaysia 100.00% Establishment
SDN.BHD investment
Business and
DSBJ Germany PTE.LTD. German German 100.00% Establishment
investment
Multek Group(Hong Kong) Limited Hong Kong, Hong Kong, Business and 100.00% Establishment
190
Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
China China investment
Business
British British
Business and combination not
The Dii Group (BVI) Co. Limited Virgin Virgin 100.00%
investment under common
Islands Islands
control
Business
Hong Kong, Hong Kong, Business and combination not
Multek Hong Kong Limited 100.00%
China China investment under common
control
Business
Business and combination not
Multek Technologies Limited Mauritius Mauritius 100.00%
investment under common
control
Business
Hong Kong, Hong Kong, Business and combination not
The Dii Group Asia Limited 100.00%
China China investment under common
control
Business
Hong Kong, Hong Kong, Business and combination not
Astron Group Limited 100.00%
China China investment under common
control
Business
combination not
Multek Technology (Zhuhai) Co., Ltd. Zhuhai Zhuhai Manufacturing 100.00%
under common
control
Business
Hong Kong, Hong Kong, Business and combination not
Vastbright PCB (HOLDING) Limited 100.00%
China China investment under common
control
Business
combination not
Multek Electronics Limited Zhuhai Zhuhai Manufacturing 100.00%
under common
control
Business
combination not
Multek Industries Limited Zhuhai Zhuhai Manufacturing 100.00%
under common
control
Business
combination not
Multek Zhuhai Limited Zhuhai Zhuhai Manufacturing 100.00%
under common
control
191
Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
Business
combination not
Multek China Ltd. Zhuhai Zhuhai Manufacturing 100.00%
under common
control
Business and
Multek Technology, Inc. USA USA 100.00% Establishment
investment
Suzhou Dongbo Precision
Suzhou Suzhou Manufacturing 51.00% Establishment
Manufacturing Co., Ltd.
MFLEX Shanghai Co., Ltd. Shanghai Shanghai Wholesale 100.00% Establishment
Shenzhen Qindao Dongchuang
Business and
Investment Partnership (Limited Shenzhen Shenzhen 76.92% Establishment
investment
Partnership)
Suzhou Dongke Real Estate Co., Ltd. Suzhou Suzhou Real estate 100.00% Establishment
Yancheng Dongchuang Precision
Yancheng Yancheng Manufacturing 100.00% Establishment
Manufacturing Co., Ltd.
Business and
DSBJ NORWAY AS Norway Norway 100.00% Establishment
investment
Suzhou Dongchen Intelligent
Suzhou Suzhou Manufacturing 100.00% Establishment
Equipment Manufacturing Co., Ltd.
Shanghai Dongxin New Energy
Shanghai Shanghai Manufacturing 95.00% 5.00% Establishment
Technology Co., Ltd.
Shanghai Donglan New Energy
Shanghai Shanghai Manufacturing 100.00% Establishment
Technology Co., Ltd.
Hainan Chengjia Technology Technical
Haikou Haikou 100.00% Establishment
Consulting Co., Ltd. consultation
2. Interests in joint ventures or associates
(1) Aggregated financial information of insignificant joint ventures and associates
Unit: RMB
Closing balance/Current period Opening balance/Preceding period
cumulative comparative
Joint ventures: -- --
Proportionate shares in the following items -- --
Associates: -- --
Total carrying amount of investments 143,121,019.78 101,207,887.93
Proportionate shares in the following items -- --
--Net profit -7,515,648.15 6,412,017.44
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Annual Report 2021 of Suzhou Dongshan Precision Manufacturing Co., Ltd.
--Total comprehensive income -7,515,648.15 6,412,017.44
X. Risks Related to Financial Instruments
In risk management, the Company aims to seek the 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
Company’s financial performance, so as to maximize the profits of shareholders and other equity investors. Based on
such risk management objectives, the Company’s risk management policies are established to identify and analyze the
risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits on a
timely and reliable basis.
The Company has exposure to the following risks from its use of financial instruments, which mainly include:
credit risk, liquidity risk, and market risk. The Management has deliberated and approved policies concerning such risks,
with details as below.
(I) 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.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each balance sheet date, the Company assesses whether the credit risk on a financial instrument has increased
significantly since initial recognition. When assessing whether the credit risk has increased significantly since initial
recognition, the Company takes into account reasonable and supportable information, which is available without undue
cost or effort, including qualitative and quantitative analysis based on historical data, external credit risk rating, and
forward-looking information. Based on the single financial instrument or the combination of financial instruments with
similar characteristics of credit risk, the Company compares the risk of default of financial instruments at the balance
sheet date with that on the initial recognition date in order to figure out the changes of default risk in the expected
lifetime of financial instruments.
The Company considers the credit risk on a financial instrument has increased significantly when one or more of
the following qualitative and quantitative standards are met:
1) Quantitative standard mainly relates to the scenario in which, at the balance sheet date, the probability of default
in the remaining lifetime has risen by more than a certain percentage compared with the initial recognition;
2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial position,
present or expected changes in technology, market, economy or legal environment that will have significant adverse
impact on the debtor’s repayment ability;
(2) Definition of default and credit-impaired assets
A financial instrument is defined as defaulted when one or more following events have occurred, of which the
standard is consistent with that for credit-impairment:
1) significant financial difficulty of the debtor;
2) a breach of binding clause of contract;
3) it is very likely that the debtor will enter bankruptcy or other financial reorganization;
4) the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty,
having granted to the debtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of expected credit losses
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The key factors in the measurement of expected credit loss include the probability of default, loss rate of default,
and exposure to default risk. The Company develops a model of the probability of default, loss rate of default, and
exposure to default risk on the basis of quantitative analysis of historical data (e.g. counterparty rating, guarantee
measures and collateral type, payment method, etc.) and forward-looking information.
3. Please refer to Note V (I) 3, 4, 7 and 10 to the financial statements for details on the reconciliation table of
opening balance and closing balance of provision for losses of financial instrument.
4. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control
such risks, the Company has taken the following measures:
(1) Cash and bank balances
The Company deposits its bank balances and other cash and bank balances in financial institutions with relatively
high credit levels, hence, its credit risk is relatively low.
(2) Receivables
The Company performs credit assessment on customers using credit settlement on a continuous basis. The
Company selects credible and well-reputed customers based on credit assessment result, and conducts ongoing
monitoring on balance of receivables, to avoid significant risks in bad debts.
As the Company only conducts business with credible and well-reputed third parties, collateral is not required
from customers. The Company manages credit risk aggregated by customers. As of December 31, 2021, the Company
has certain concentration of credit risk, and 50.05% (December 31, 2020: 54.10%) of the total accounts receivable was
due from the five largest customers of the Company. The Company held no collateral or other credit enhancement on
balance of receivables.
The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial asset at
the balance sheet.
(II) Liquidity risk
Liquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations associated
with cash or other financial assets settlement, which is possibly attributable to failure in selling financial assets at fair
value on a timely basis, or failure in collecting liabilities from counterparties of contracts, or early redemption of debts,
or failure in achieving estimated cash flows.
In order to control such risk, the Company comprehensively utilized financing tools such as notes settlement, bank
borrowings, etc. and adopts long-term and short-term financing methods to optimize financing structures, and finally
maintains a balance between financing sustainability and flexibility. The Company has obtained credit limit from
several commercial banks to meet working capital requirements and expenditures.
Financial liabilities classified based on remaining time period till maturity
Unit: RMB
Closing balance
Items Contract amount not
Carrying amount Within 1 year 1-3 years Over 3 years
yet discounted
Bank borrowings (including non-current 11,464,550,912.96 11,736,409,681.74 9,646,227,290.73 1,985,923,474.35 104,258,916.66
borrowings due within one year)
Notes payable 1,646,644,107.17 1,646,644,107.17 1,646,644,107.17
Accounts payable 6,729,890,126.00 6,729,890,126.00 6,729,890,126.00
Other payables 323,166,075.34 323,166,075.34 323,166,075.34
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Long-term payables (including 113,585,341.88 117,815,283.97 38,648,899.77 79,166,384.20
non-current borrowings due within one
year)
Lease liabilities (including non-current 1,216,840,546.75 1,547,455,035.50 70,417,680.05 140,536,827.11 1,336,500,528.3
borrowings due within one year) 4
21,494,677,110.10 22,101,380,309.72 18,454,994,179.06 2,205,626,685.66 1,440,759,445.0
Sub-total
0
(Continued)
Items December 31, 2020
Carrying amount Contract amount not Within 1 year 1-3 years Over 3 years
yet discounted
Bank borrowings 11,945,119,556.65 12,083,578,945.87 9,158,948,388.90 2,734,050,436.13 190,580,120.84
Notes payable 1,767,940,549.75 1,767,940,549.75 1,767,940,549.75
Accounts payable 7,443,237,912.72 7,443,237,912.72 7,443,237,912.72
Other payables 59,939,206.62 59,939,206.62 59,939,206.62
Long-term payables 1,200,752,321.09 1,601,888,588.90 160,374,354.31 1,441,514,234.59
Non-current liabilities due within one 363,320,073.06 363,320,073.06 363,320,073.06
year
Sub-total 22,780,309,619.89 23,319,905,276.92 18,793,386,131.05 2,894,424,790.44 1,632,094,355.43
(III) Market risk
Market risk is the risk that a company may encounter fluctuation in fair value or future cash flows of financial
instruments due to changes in market price. Market risk mainly includes interest risk and foreign currency risk.
1. Interest risk
Interest risk is the risk that a company may encounter fluctuation in fair value or future cash flows of financial
instruments due to changes in market interest. The Company’s fair value interest risks arise from fixed-rate financial
instruments, while the cash flow interest risks arise from floating-rate financial instruments. The Company determines
the proportion of fixed-rate financial instruments and floating-rate financial instruments based on the market
environment, and maintains a proper financial instruments portfolio through regular review and monitoring. The
Company’s interest risk in cash flows relates mainly to bank borrowings with floating interest rate.
As of December 31, 2021, balance of borrowings with interest accrued at floating interest rate totaled RMB
11,449,693,630.87(December 31, 2020: RMB 11,930,608,873.34). If interest rates had been 50 basis points
higher/lower and all other variables were held constant, financial effect on the Company would be a/an
decrease/increase of RMB 48,661,197.93 (December 31, 2020: a/an decrease/increase of RMB 50,705,087.71) in equity,
a/an decrease/increase of RMB 48,661,197.93(2020: a/an decrease/increase of RMB 50,705,087.71) in net profit.
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in fair value or future cash flows of financial instrument
resulted from changes in exchange rate. The Company’s foreign currency risk relates mainly to foreign currency
monetary assets and liabilities. When short-term imbalance occurred to foreign currency assets and liabilities, the
Company may trade foreign currency at market exchange rate when necessary, in order to maintain the net risk
exposure within an acceptable level.
Please refer to Note VII to financial statements for details in foreign currency financial assets and liabilities at the
end of the period.
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XI. Fair Value Disclosure
1. Fair value of assets and liabilities measured at fair value at the end of the period
Unit: RMB
Fair value at the end of the period
Items Level 1 fair value Level 2 fair value Level 3 fair value
Total
measurement measurement measurement
I. Recurring fair value
-- -- -- --
measurement
1. Financial assets at fair
value through profit or 459,278,578.74 40,249,971.12 499,528,549.86
loss
(2) Equity instrument
40,249,971.12 40,249,971.12
investments
(3) Derivative financial
459,278,578.74 459,278,578.74
assets
(II) Other debt
828,355,016.30 828,355,016.30
investments
(III) Other equity
171,322,110.00 171,322,110.00
instrument investments
Total assets at recurring
459,278,578.74 1,039,927,097.42 1,499,205,676.16
fair value measurement
II. Non-recurring fair
-- -- -- --
value measurement
2. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 2 fair value at
recurring and non-recurring fair value measurement
The fair value of bank wealth management products at the end of the period is mainly recognized based on their
principals and expected proceeds.
For forward exchange settlement transactions that have been entrusted but not delivered, the fair value is recognized
based on the forward exchange rate recognized by the trading banks at the end of the period.
3. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 3 fair value at
recurring and non-recurring fair measurement
The fair value of other equity instrument investments is recognized as the initial investment amount.
The fair value of notes receivable held is recognized as the par value of these notes.
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XII. Related Party Relationships and Transactions
1. Parent company
The Company’s actual controllers are YUAN Yonggang, YUAN Yongfeng and YUAN Fugen, who hold 11.83%, 13.01%
and 3.44% of the Company’s shareholding and voting rights, respectively, with collective shareholding and voting
rights of the Company totaled 28.28%.
2. Subsidiaries
Please refer to Note IX. Interests in Other Entities for details on the Company’s subsidiaries.
3. Joint ventures and associates of the Company
Please refer to Note IX. Interests in Other Entities for details on the Company’s significant joint ventures and associates.
Details of other joint ventures or associates carrying out related party transactions with the Company in current period
or in preceding period but with balance in current period are as follows:
Joint ventures or associates Relationships with the Company
Suzhou Toprun Electric Equipment Co., Ltd. Associates
Suzhou Dongcan Optoelectronics Technology Co., Ltd. Associates
4.Other related parties of the Company
Other related parties of the Company Relationships with the Company
Hai Dixin Semiconductor (Nantong) Co., Ltd. Invested company
Shenzhen Dongshan Precision Manufacturing Co., Ltd. Company controlled by the same actual controller
5. Related party transactions
(1) Purchase and sale of goods, rendering and receiving of services
Purchase of goods and receiving of services
Unit: RMB
Current period Approved Exceed the approved Preceding period
Related parties Content of transaction
cumulative amount amount or not comparative
Suzhou Dongcan
Optoelectronics Purchase of goods 49,297.45 No 142,724.25
Technology Co., Ltd.
Sale of goods and rendering of services
Unit: RMB
Related parties Content of transaction Current period cumulative Preceding period comparative
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Suzhou Toprun Electric
Goods payments 1,580,509.87 8,107.96
Equipment Co., Ltd.
Suzhou Dongcan
Optoelectronics Technology Goods payments 109,532.95
Co., Ltd.
Remarks on purchase and sale of goods, rendering and receiving of services
(2) Related party guarantees
The Company as a guarantor
Unit: RMB
Amount Commencement Whether the
Guaranteed parties Maturity date
guaranteed date guarantee is mature
4,000,000.00 November 12, 2021 November 12, 2022 No
5,000,000.00 November 19, 2021 November 19, 2022 No
Suzhou Toprun Electric Equipment Co., Ltd. 5,400,000.00 September 13, 2021 September 9, 2022 No
6,600,000.00 September 18, 2021 September 16, 2022 No
8,000,000.00 November 8,2021 November 7, 2022 No
The Company as a guaranteed party
Unit: RMB
Whether the
Guarantors Amount guaranteed Commencement date Maturity date
guarantee is mature
500,000,000.00 March 22, 2018 August 28, 2024 No
500,000,000.00 January 31, 2018 July 26, 2023 No
YUAN Yonggang and YUAN Yongfeng 1,118,935,350.00 July 25, 2018 July 25, 2023 No
75,100,000.00 August 14, 2019 July 14, 2022 No
100,000,000.00 September 30, 2019 August 31, 2022 No
(3) Key management’s emoluments
Unit: RMB
Items Current period cumulative Preceding period comparative
Key management’s emoluments 22,533,200.00 19,643,500.00
(4) Other related party transactions
Unit: RMB
Related parties Content of transaction Current period cumulative Preceding period comparative
Shenzhen Dongshan Precision Asset transfer payments and 564,294,406.73 25,555,038.76
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Manufacturing Co., Ltd. interest income
6. Balance due to or from related parties
(1) Balance due from related parties
Unit: RMB
Closing balance Opening balance
Items Related parties Provision for bad Provision for bad
Book balance Book balance
debts debts
Accounts Hai Dixin Semiconductor
1,607,132.92 1,607,132.92 1,607,132.92 1,607,132.92
receivable (Nantong) Co., Ltd.
Accounts Suzhou Dongcan Optoelectronics
63,031.33 315.16 29,369.88 146.85
receivable Technology Co., Ltd.
Accounts Suzhou Toprun Electric
1,485,976.17 7,429.88
receivable Equipment Co., Ltd.
Other Shenzhen Dongshan Precision
538,577,180.10 22,451,468.46
receivables Manufacturing Co., Ltd.
Other Hai Dixin Semiconductor
1,790,748.55 1,438,405.10 1,790,748.55 613,499.52
receivables (Nantong) Co., Ltd.
Other Suzhou Dongcan Optoelectronics
20,000.00 1,000.00
receivables Technology Co., Ltd.
(2) Balance due to related parties
Unit: RMB
Items Related parties Closing balance Opening balance
Accounts payable Suzhou Dongcan Optoelectronics Technology Co., Ltd. 3,499.61
XIII. Commitments and contingencies
1. Significant commitments
Significant commitments as of the balance sheet date:
As of the balance sheet date, the Company has no significant commitments to be disclosed.
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2. Contingencies
(1) Significant contingencies as of the balance sheet date
As of the balance sheet date, the Company has no significant contingencies to be disclosed.
(2) Remarks on contingencies though the Company has no significant contingencies to be disclosed
The Company has no significant contingencies to be disclosed.
XIV. Events after the Balance Sheet Date
1. Profit distribution
Unit: RMB
Profit or dividend proposed to be distributed 341,182,742.00
Profit or dividend approved to be distributed 341,182,742.00
XV. Other Significant Events
1. Segment information
(1) Identification basis for reportable segments and accounting policies
The Company is mainly engaged in the sales of PCBs, LED display devices, touch panels, LCMs, precision components
and other products. These businesses are identified by the Company as an entire business for management and operating
results assessment. Therefore, it is unnecessary for the Company to disclose the segment information.
(2) Financial information of reportable segments
Unit: RMB
LED display Touch panels and Precision Inter-segment
Items PCBs Total
devices LCMs components offset
Main operating
20,495,329,957.29 2,603,932,687.66 5,156,396,939.04 3,427,067,664.04 31,682,727,248.03
revenue
Main operating
17,319,465,575.78 2,127,082,704.10 4,735,719,298.33 2,898,308,513.27 27,080,576,091.48
costs
2. Others
Unit: RMB
(1) The Company as a lessee
1) Please refer to Note VII to financial statements for details on right-of-use assets.
2) Please refer to Note V to financial statements for details on the Company’s accounting policies on short-term leases
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and leases for which the underlying asset is of low value. The amounts of short-term leases and low-value asset leases
included into profit or loss are as follows:
Items Current period cumulative
Expense relating to short-term leases 12,662,311.00
Total 12,662,311.00
3) Current period profit or loss and cash flows related to leases
Items Current period cumulative
Interest expenses from lease liabilities 69,800,646.24
Total cash outflows related to leases 294,740,773.04
4) Please refer to Note X to the financial statements for details on maturity analysis of lease payments and related
liquidity risk management.
(2) The Company as a lessor
Operating lease
1) Lease income
Items Current period cumulative
Lease income 4,253,653.65
2) Assets leased out under operating leases
Items Closing balance
Fixed assets 25,725.92
Investment property 1,554,262.58
Sub-total 1,579,988.50
3) Undiscounted lease payments to be received arising from non-cancellable leases based on the lease contract signed
with lessee
Remaining years Closing balance
Within 1 year 4,497,481.58
1- 2 years 935,664.81
Total 5,433,146.39
XVI. Notes to Items in the Parent Company Financial Statements
1. Accounts receivable
(1) Disclosure of accounts receivable by category
Unit: RMB
Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
Categories debts Carrying debts Carrying
Provision amount Provision amount
Amount % to total Amount Amount % to total Amount
proportio proportio
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n (%) n (%)
Accounts receivable
13,584,0 13,584,0 8,425,896 8,425,896
with provision made 0.47% 100.00% 0.38% 100.00%
81.38 81.38 .00 .00
on an individual basis
Including:
Accounts receivable
with provision for 2,846,99 95,868,9 2,751,126 2,208,387 143,127,4 2,065,260,0
99.53% 3.37% 99.62% 6.48%
bad debts made on a 5,763.39 91.28 ,772.11 ,452.19 48.84 03.35
collective basis
2,860,57 109,453, 2,751,126 2,216,813 151,553,3 2,065,260,0
Total 100.00% 3.83% 100.00% 6.84%
9,844.77 072.66 ,772.11 ,348.19 44.84 03.35
Accounts receivable with provision made on an individual basis:
Unit: RMB
Closing balance
Items Provision
Book balance Provision for bad debts Reasons
proportion (%)
Provision for impairment was made due
Jiangyin Hanwei
8,425,896.00 8,425,896.00 100.00% to the low probability of recovery
Aluminum Co., Ltd.
according to the recovery forecast.
Dongguan Xindong Provision for impairment was made due
Intelligent Technology 3,787,969.53 3,787,969.53 100.00% to the low probability of recovery
Co., Ltd. according to the recovery forecast.
Provision for impairment was made due
Shenzhen Hongyexin
496,188.63 496,188.63 100.00% to the low probability of recovery
Technology Co., Ltd.
according to the recovery forecast.
Provision for impairment was made due
Others 874,027.22 874,027.22 100.00% to the low probability of recovery
according to the recovery forecast.
Total 13,584,081.38 13,584,081.38 -- --
Accounts receivable with provision for bad debts made on a collective basis
Unit: RMB
Closing balance
Items
Book balance Provision for bad debts Provision proportion (%)
Aging portfolio 1,282,044,623.65 95,868,991.28 7.48%
Related-party portfolio within
1,564,951,139.74
the consolidation scope
Total 2,846,995,763.39 95,868,991.28 --
Accounts receivable with provision for bad debts made on a collective basis
Unit: RMB
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Closing balance
Items
Book balance Provision for bad debts Provision proportion (%)
0-6 months 767,680,412.60 3,838,402.06 0.50%
7-12 months 370,032,778.62 18,501,638.93 5.00%
1- 2 years 65,836,154.67 13,167,230.93 20.00%
2-3 years 45,333,896.01 27,200,337.61 60.00%
Over 3 years 33,161,381.75 33,161,381.75 100.00%
Total 1,282,044,623.65 95,868,991.28 --
If a provision for bad debts is made for accounts receivable in accordance with the general model of expected credit losses, please
disclose relevant information on provisions for bad debts with reference to the disclosure method of other receivables:
□ Applicable √ N/A
Aging analysis
Unit: RMB
Aging Book balance
Within 1 year (including) 1,829,469,180.93
0-6 months 1,407,041,133.51
7-12 months 422,428,047.42
1-2 years 194,204,679.25
2-3 years 153,090,639.54
Over 3 years 683,815,345.05
3-4 years 413,872,895.38
4-5 years 252,857,124.01
Over 5 years 17,085,325.66
Total 2,860,579,844.77
(2) Provisions, recovery or reversal of bad debts for the current period
Provisions for bad debts made for the current period:
Unit: RMB
Changes for the current period
Categories Opening balance Recovery or Closing balance
Provision Write-off Others
reversal
Accounts receivable with
provision for bad debts made on 8,425,896.00 5,158,185.38 13,584,081.38
an individual basis
Accounts receivable with
143,127,448.84 -45,575,250.49 1,683,207.07 95,868,991.28
provision for bad debts made on
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a collective basis
Total 151,553,344.84 -40,417,065.11 1,683,207.07 109,453,072.66
(3) Accounts receivable actually written off for the current period
Unit: RMB
Items Write-off amount
Accounts receivable 1,683,207.07
(4) Top five closing balances of accounts receivable categorized by debtor
Unit: RMB
Closing balance of Proportion to the total closing balance Closing balance of
Debtors
accounts receivable of accounts receivable (%) provisions for bad debts
HongKong Dongshan Precision
447,332,447.60 15.64%
Union Opoelectronic Co., Limited
Dongguan Dongshan Precision
398,604,428.29 13.93%
Manufacturing Co., Ltd.
Mutto Optronics Technology Co., Ltd. 256,877,621.92 8.98%
Yancheng Dongshan Precision
188,200,392.00 6.58%
Manufacturing Co., Ltd.
The fifth 165,106,915.13 5.77% 825,534.58
Total 1,456,121,804.94 50.90% --
(5) Assets and liabilities arising from transferred but still involved accounts receivable
As of December 31, 2021, accounts receivable with a carrying amount of RMB 98,910,000.00 have completed the factoring loan for
trade acceptance with right of recourse.
2. Other receivables
Unit: RMB
Items Closing balance Opening balance
Dividends receivable 581,000,000.00 354,000,000.00
Other receivables 2,827,234,419.21 4,841,393,439.65
Total 3,408,234,419.21 5,195,393,439.65
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(1) Dividends receivable
1) Category of dividends receivable
Unit: RMB
Item (or investee) Closing balance Opening balance
Hong Kong Dongshan Holdings Limited 315,000,000.00 190,000,000.00
Yancheng Dongshan Precision
266,000,000.00 114,000,000.00
Manufacturing Co., Ltd.
YCMT 30,000,000.00
Suzhou Chengjia Precision Manufacturing
20,000,000.00
Co., Ltd.
Total 581,000,000.00 354,000,000.00
2) Provisions for bad debts
□ Applicable √ N/A
(2) Other receivables
1) Category of other receivables by nature
Unit: RMB
Nature of other receivables Closing balance Opening balance
Financial transactions 2,811,870,279.40 4,828,790,456.04
Security deposits 2,852,298.50 1,099,951.62
Performance compensation 7,000,000.00 9,000,000.00
Loans and petty cash 7,083,613.68 4,485,483.25
Total 2,828,806,191.58 4,843,375,890.91
2) Provisions for bad debts
Unit: RMB
Phase I Phase II Phase III
12 month
Provision for bad debts Lifetime expected credit Lifetime expected credit Total
expected credit
losses (credit not impaired) losses (credit impaired)
losses
Balance as at January 1, 2021 626,256.08 201,282.68 1,154,912.50 1,982,451.26
Balance as at January 1, 2021 in
—— —— —— ——
the current period
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-- Transferred to phase II -409,322.32 409,322.32
-- Transferred to phase III -26,855.00 26,855.00
Provision 196,858.98 234,894.63 -761,702.54 -329,948.93
Written off 80,729.96 80,729.96
Balance as at December 31,
413,792.74 818,644.63 339,335.00 1,571,772.37
2021
Remarks on significant changes in book balance of other receivables with changes in provision for bad debts
□ Applicable √ N/A
Aging analysis
Unit: RMB
Aging Book balance
Within 1 year (including) 1,153,307,663.16
1-2 years 1,675,024,918.42
2-3 years 268,550.00
Over 3 years 205,060.00
3-4 years 205,060.00
Total 2,828,806,191.58
3) Other receivables actually written off for the current period
Unit: RMB
Items Write-off amount
Other receivables 80,729.96
4) Top five closing balances of other receivables categorized by debtor
Unit: RMB
Nature of Proportion to total Closing balance of
Debtors other Closing balance Aging closing balance of provisions for bad
receivables other receivables (%) debts
Yancheng Dongshan Precision Receivables
739,796,338.62 Within 1 year 26.15%
Manufacturing Co., Ltd. and payables
Yancheng Dongshan Precision Receivables
761,233,742.43 1- 2 years 26.91%
Manufacturing Co., Ltd. and payables
HongKong Dongshan Precision Receivables
33,654,124.65 Within 1 year 1.19%
Union Opoelectronic Co., Limited and payables
HongKong Dongshan Precision Receivables
550,459,234.25 1- 2 years 19.46%
Union Opoelectronic Co., Limited and payables
Suzhou Dongkui Lighting Co., Ltd. Receivables 2,320,250.00 Within 1 year 0.08%
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and payables
Receivables
Suzhou Dongkui Lighting Co., Ltd. 321,852,326.13 1- 2 years 11.38%
and payables
Receivables
Multek Industries Limited 111,969,361.73 Within 1 year 3.96%
and payables
Hong Kong Dongshan Holding Receivables
190,000,000.00 Within 1 year 6.72%
Limited and payables
Total -- 2,711,285,377.81 -- 95.85%
3. Long-term equity investments
Unit: RMB
Closing balance Opening balance
Items Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Investments in
7,148,611,337.41 133,690,000.00 7,014,921,337.41 6,320,593,645.05 133,690,000.00 6,186,903,645.05
subsidiaries
Investments in
associates and 99,227,963.59 17,507,056.47 81,720,907.12 91,327,409.53 17,507,056.47 73,820,353.06
joint ventures
Total 7,247,839,301.00 151,197,056.47 7,096,642,244.53 6,411,921,054.58 151,197,056.47 6,260,723,998.11
(1) Investments in subsidiaries
Unit: RMB
Opening balance Increase or decrease for the current period Closing balance
Closing balance
Investees (carrying Investments Investments of provisions for
(carrying amount)
amount) increased decreased bad debts
YCMT 451,439,101.11 451,439,101.11
Suzhou Yuanshi Electronic
5,000,000.00 5,000,000.00
Technology Co., Ltd.
HongKong Dongshan Precision
3,144,565,150.00 600,000,000.00 3,744,565,150.00 133,690,000.00
Union Opoelectronic Co., Limited
Suzhou Dongkui Lighting Co.,
12,100,000.00 12,100,000.00
Ltd.
Suzhou Chengjia Precision
80,000,000.00 80,000,000.00
Manufacturing Co., Ltd.
Dongguan Dongshan Precision
342,000,000.00 342,000,000.00
Manufacturing Co., Ltd.
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Chongqing Chengjia Precision
13,500,000.00 13,500,000.00
Electronic Technology Co., Ltd.
Suzhou Dongjiyuan Metal
52,600,000.00 52,600,000.00
Technology Co., Ltd.
Yancheng Dongshan Precision
1,092,500,000.00 1,092,500,000.00
Manufacturing Co., Ltd.
Suzhou RF Top Electronic
171,500,000.00 65,756,910.17 237,256,910.17
Communication Co., Ltd.
Suzhou Jebson Intelligent
255,000.00 255,000.00
Technology Co., Ltd.
Suzhou Dongdai Electronic
1,530,000.00 1,530,000.00
Technology Co., Ltd.
Suzhou Dongyan Electronic
1,530,000.00 1,530,000.00
Technology Co., Ltd.
Hong Kong Dongshan Holding
452,677,880.00 452,677,880.00
Limited
Yancheng Dongshan
Communication Technology Co., 251,605,513.94 28,372,686.19 279,978,200.13
Ltd.
Suzhou Dongbo Precision
5,100,000.00 5,100,000.00
Manufacturing Co., Ltd.
MFLEX Shanghai Co., Ltd. 100,000.00 1,900,000.00 2,000,000.00
Shenzhen Qindao Dongchuang
Investment Partnership (Limited 50,000,000.00 50,000,000.00 100,000,000.00
Partnership)
Suzhou Dongke Real Estate Co.,
58,901,000.00 91,488,096.00 150,389,096.00
Ltd.
Yancheng Dongshan Enterprise
3,000,000.00 3,000,000.00
Management Co., Ltd.
Hainan Chengjia Technology
1,000,000.00 1,000,000.00
Consulting Co., Ltd.
Total 6,186,903,645.05 841,517,692.36 13,500,000.00 7,014,921,337.41 133,690,000.00
(2) Investments in associates and joint ventures
Unit: RMB
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Opening Increase or decrease for the current period Closing Closing
balance Investment profit or Adjustment in other Cash dividends Provisions balance balance of
Investees Investments Investments Other equity
(carrying loss under equity comprehensive or profits for Others (carrying provisions for
increased decreased changes
amount) method income declared impairment amount) bad debts
I. Joint ventures
II. Associates
Suzhou Toprun Electric Equipment
18,199,860.18 -1,880,121.23 16,319,738.95
Co., Ltd.
Shenzhen Nanfang Blog Technology
17,507,056.47
Development Co., Ltd.
Shanghai Fu Shan Precision
Manufacturing Co., Ltd.
Suzhou LEGATE Intelligent
14,355,254.40 -2,422,342.61 11,932,911.79
Equipment Co., Ltd.
Suzhou Dongcan Optoelectronics
3,642,892.51 73,257.78 3,716,150.29
Technology Co., Ltd.
Jiangsu Nangao Intelligent Equipment
3,952,690.31 67,866.28 4,020,556.59
Innovation Center Co., Ltd.
Jiaozuo Songyang Optoelectric
33,669,655.66 -2,921,596.04 30,748,059.62
Technology Co., Ltd.
Suzhou Yongxin Jingshang Venture
Capital Partnership (Limited 15,000,000.00 -16,510.12 14,983,489.88
Partnership)
Sub-total 73,820,353.06 15,000,000.00 -7,099,445.94 81,720,907.12 17,507,056.47
Total 73,820,353.06 15,000,000.00 -7,099,445.94 81,720,907.12 17,507,056.47
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4. Operating revenue and operating costs
Unit: RMB
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 3,936,953,911.43 3,714,657,158.64 4,007,913,773.08 3,454,308,954.78
Other operations 307,120,828.99 168,578,617.68 168,389,994.80 73,690,374.31
Total 4,244,074,740.42 3,883,235,776.32 4,176,303,767.88 3,527,999,329.09
Other remarks:
Revenue recognized in the current period and included in the opening balance of the book value of contract liabilities amounted to
RMB 6,935,179.16.
5. Investment income
Unit: RMB
Items Current period cumulative Preceding period comparative
Income from long-term equity investments under cost method 581,083,436.82 354,000,000.00
Investment income from long-term equity investments under
-7,099,445.94 6,412,017.44
equity method
Investment income from disposal of long-term equity
-13,500,000.00 342,322.01
investments
Bank wealth management product 2,212,924.44 2,876,815.88
Total 562,696,915.32 363,631,155.33
XVII. Supplementary Information
1. Schedule of non-recurring gains or losses
√ Applicable □ N/A
Unit: RMB
Items Amount
Profit or loss on disposal of non-current assets 13,783,433.93
Government grants included in profit or loss (excluding those closely related to operating activities of the
Company, satisfying government policies and regulations, and continuously enjoyed with certain quantity/quota 268,965,326.25
based on certain standards)
Fund possession charge from non-financial entities and included in profit or loss 19,777,467.66
Profit or loss on assets consigned to the third party for investment or management 11,913,618.63
Profit or loss on changes in fair value of held-for-trading financial assets and liabilities, and investment income
17,766,609.82
from disposal of held-for-trading financial assets and liabilities, and available-for-sale financial assets, excluding
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those arising from hedging business related to operating activities
Reversed provision for impairment of receivables and contract assets based on impairment testing on an
22,451,468.46
individual basis
Other non-operating revenue or expenditures -1,909,316.59
Other profit or loss satisfying the definition of non-recurring gains or losses 722,866.99
Less: Enterprise income tax affected 65,906,713.13
Non-controlling interest affected 1,734,292.36
Total 285,830,469.66
Details of other profit or loss satisfying the definition of non-recurring gains or losses
□ Applicable √ N/A
There is no other item of gains or losses within the meaning of non-recurring gains or losses.
Classification of any item of non-recurring gains or losses defined by the Explanatory Announcement No. 1 on Information
Disclosure for Companies Publicly Offering Securities – Non-recurring Gains or Losses as recurrent profit or loss:
□ Applicable √ N/A
2. RONA and EPS
EPS (RMB/share)
Profit of the reporting period Weighted average RONA (%)
Basic EPS Diluted EPS
Net profit attributable to
13.46% 1.09 1.09
shareholders of ordinary shares
Net profit attributable to
shareholders of ordinary shares
11.40% 0.92 0.92
after deducting non-recurring gains
or losses
Suzhou Dongshan Precision Manufacturing Co., Ltd.
Legal representative: YUAN Yonggang
April 19, 2022
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