Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Suzhou Dongshan Precision Manufacturing Co., Ltd.
Annual Report 2022
April 21, 2023
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Annual Report 2022
Section I Important Note, Table of Contents and Definitions
The Board of Directors, the Board of Supervisors, directors, supervisors and senior officers of
the Company hereby warrant that the information contained in this Annual Report is true,
accurate and complete and this Annual Report is free from any misrepresentation, misleading
statement or material omission, and agree to assume joint and several liability for this Annual
Report.
YUAN Yonggang, Principal of the Company, CFO WANG Xu and Accounting Supervisor ZHU
Deguang hereby represent that the financial statements contained in this Annual Report are
true, accurate and complete.
All directors of the Company attended the meeting of the Board of Directors reviewing this
Report.
This Report contains certain forward-looking statements regarding future plans, which do not
constitute any substantial covenant made by the Company to the investors, and involve material
uncertainties, and the realization of which is subject to market changes, efforts made by the
Company’s management team and other factors. The main risk factors facing the Company are
set forth in “Section III – XI. Prospects for Future Development of the Company” of this Report.
The investors should 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 1.1 (inclusive of tax) per 10 shares to all shareholde rs
on the basis of 1,702,865,009 shares (excluding the treasury shares), and will not distribute any
bonus shares or transfer any capital reserve to the share capital for the reporting period.
Note:
This document is a translated version of the Chinese version Annual Report 2022（“2022 年年度
报告”), and the published annual report in the Chinese version shall prevail. The complete published
Chinese Annual Report 2022 may be obtained at www.cninfo.com.cn .
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
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 ............................................. 10
Section IV Corporate Governance ........................................................................ 30
Section V Environmental and Social Responsibilities .......................................... 43
Section VI Significant Matters .............................................................................. 47
Section VII Changes in Shares and Shareholders ................................................ 55
Section VIII Preferred Shares ............................................................................... 59
Section IX Bonds .................................................................................................... 60
Section X Financial Report .................................................................................... 61
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
List of References
I. Financial statements signed and chopped by Mr. YUAN Yonggang, legal representative, Mr. WANG Xu, CFO, and Mr. ZHU Deguang,
Accounting Supervisor of the Company;
II. Original of the auditor’s report stamped with the seal of the accounting firm and signed and chopped by the certified public
accountants;
III. Originals of all documents of the Company publicly disclosed during the reporting period and related announcements;
IV. Original of the Annual Report 2022 signed by the legal representative of the Company; and
V. Place keeping such documents for inspection: Securities Department of the Company at Building 12#, Yunhe Town Headquarters
Industrial Park, 99 East Taihu Road, Wuzhong District, Suzhou.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Definitions
Term means Definition
Company, we or DSBJ means Suzhou Dongshan Precision Manufacturing Co., Ltd.
one of our three major business segments, including research and
Printed circuit board (PCB) means development (R&D), design, manufacturing and sale of flexible
PCBs, rigid PCBs, rigid-flex PCBs and other products.
one of our three major business segments, including R&D, design,
Photoelectric display means manufacturing and sale of LED devices, touch panels, liquid crystal
display modules and other products.
one of our three major business segments, including design,
Precision manufacturing means manufacturing and sale of precision metal structural components and
assemblies and other products.
Suzhou Yongchuang Metal Science and Technology Co., Ltd., a
Yongchuang Tech means
wholly owned subsidiary of the Company.
Hong Kong Dongshan Precision Union Opoelectronic Co., Limited,
Hong Kong Dongshan means
a 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
Hong Kong Dongshan Holding means
of the Company.
Multek Group (Hong Kong) Limited, a wholly owned subsidiary of
Multek Group means
the Company
Multek Industries Limited, a wholly owned subsidiary of Multek
Multek Industries means
Group.
Multek Electronics Limited, a wholly owned subsidiary of Multek
Multek Electronics means
Group.
Multek Zhuhai means Multek Zhuhai Limited, a wholly owned subsidiary of Multek Group.
Multek China means Multek China Limited, a wholly owned subsidiary of Multek Group.
Yancheng Dongshan Precision Manufacturing Co., Ltd., a wholly
Yancheng Dongshan means
owned subsidiary of the Company.
Mutto Optronics Technology Co., Ltd., a wholly owned subsidiary of
Mutto Optronics means
the Company
Suzhou RF Top Electronic Communication Co., Ltd., a controlled
RF Top Electronic means
subsidiary of the Company
JDI means Japan Display Inc.
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 world on screen with real world, based on precise calculation
AR means
of position and 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 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,
PCB means
printed 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
LED or LED device means electron holes in the semiconductor produces radiation, for purpose
of this 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.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
LCD module or LCD display module, a module formed by
assembling LCD display device with the relevant connectors, control,
LCM means
driver and other peripheral circuits, PCB circuit board, 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.
the Articles of Association of Suzhou Dongshan Precision
Articles of Association means
Manufacturing Co., Ltd.
CSRC means the China Securities Regulatory Commission.
SZSE means the Shenzhen Stock Exchange.
Reporting period means the period from January 1, 2022 to December 31, 2022.
RMB and RMB0’000 means Renminbi and ten thousand Yuan.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Section II Company Profile and Financial Highlights
I. Company Profile
Stock short name DSBJ Stock code 002384
Original stock short name (if any) None
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
History of changes in registered address Our registered address was at Shangwan Village, Dongshan, Wuzhong District,
Suzhou, Jiangsu when we were reorganized from Suzhou Dongshan Sheet Metal Co.,
Ltd. into Suzhou Dongshan Precision Manufacturing Co., Ltd. in 2007, and was
changed into No. 88 Tangdong Road, Wuzhong Economic Development Zone, Suzhou
on December 27, 2019.
Building 12#, Yunhe Town Headquarters Industrial Park, 99 East Taihu Road, Wuzhong
Office address
District, Suzhou
Postal code of office address 215128
Company website www.dsbj.com
Email dsbj@dsbj.com
II. Contact Person and Contact Information
Board Secretary
Name MAO Xiaoyan
Address Building 12#, Yunhe Town Headquarters Industrial Park, 99 East Taihu Road, Wuzhong District, Suzhou, Jiangsu
Telephone 0512-80190019
Facsimile 0512-80190029
Email maoxy@dsbj.com
III. Media for Information Disclosure and Place for Keeping Annual Report
Website of the stock exchange disclosing the Company’s
www.szse.cn
annual report
Media and website disclosing the Company’s annual The Securities Times, the China Securities Journal, the Shanghai
report Securities News, the Securities Daily and www.cninfo.com.cn
Place for keeping the Company’s annual report Securities Department of the Company
IV. Changes in Registration Particulars
Unified social credit code 91320500703719732P
Since our IPO and listing, we have strategically included PCB, photoelectric
display and other electronic business in our industrial mix. We focus on the R&D
Changes in main business since the listing of the
and manufacturing of technologically advanced core components for the
Company (if any)
intelligently interconnected world, and provision of comprehensive intelligent
interconnection solutions to customers throughout the world.
Changes in controlling shareholder (if any) None
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 ZHANG Yang and FU Zhenlong
Sponsor engaged by the Company that performs the duties of ongoing supervision over the Company during the reporting period:
□ Applicable N/A
Financial advisor engaged by the Company that performs the duties of ongoing supervision over the Company during the reportin g
period:
□ Applicable N/A
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
VI. Key Accounting Data and Financial Indicators
Did the Company need to retrospectively adjust or restate any accounting data of prior accounting years?
□ Yes No
Y/Y %
2022 2021 2020
change
Operating revenue (RMB) 31,580,146,732.58 31,793,147,908.12 -0.67% 28,093,409,430.26
Net profit attributable to shareholders
2,367,519,530.91 1,862,481,138.84 27.12% 1,530,132,196.09
of the listed company (RMB)
Net profit attributable to shareholders
of the listed company after deduction 2,125,754,423.71 1,576,650,669.18 34.83% 1,301,219,335.83
of non-recurring gain or loss (RMB)
Net cash flows from operating
4,629,884,011.38 3,209,544,484.21 44.25% 2,932,168,894.65
activities (RMB)
Basic earnings per share (RMB/share) 1.39 1.09 27.52% 0.93
Diluted earnings per share
1.39 1.09 27.52% 0.93
(RMB/share)
Weighted average return on net assets 15.33% 13.46% 1.87% 14.41%
Y/Y %
December 31, 2022 December 31, 2021 December 31, 2020
change
Total assets (RMB) 40,531,361,181.17 37,951,408,787.25 6.80% 37,503,068,713.54
Net assets attributable to shareholders
16,359,429,480.45 14,576,500,325.15 12.23% 13,068,916,872.79
of the listed company (RMB)
Whether the lower of the net profit before and after deduction of non-recurring gain or loss 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 gain or loss is negative?
□ Yes No
VII. Differences in Accounting Data under the Chinese Accounting Standards for Business
Enterprises (the “CASBEs”) and Overseas Accounting Standards
1. Differences in net profit and in net assets disclosed in the financial report prepared under the CASBEs
and the International Financial Reporting Standards (IFRS)
□ Applicable N/A
There was no difference in net profit and in net assets disclosed in the financial report for the reporting period prepared under the
CASBEs and the IFRS.
2. Differences in net profit and in net assets disclosed in the financial report prepared under the CASBEs
and overseas accounting standards
□ Applicable N/A
There was no difference in net profit and in net assets disclosed in the financial report for the reporting period prepared under the
CASBEs and overseas accounting standards.
VIII. Key Financial Indicators by Quarter
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating revenue 7,312,341,630.60 7,233,844,881.71 8,272,468,957.28 8,761,491,262.99
Net profit attributable to shareholders of
364,247,140.34 432,088,992.74 784,348,996.94 786,834,400.89
the listed company
Net profit attributable to shareholders of
the listed company after deduction of non- 304,010,307.06 373,904,270.06 779,265,150.04 668,574,696.55
recurring gain or loss
Net cash flows from operating activities 685,764,513.69 632,359,164.14 721,837,570.14 2,589,922,763.41
Whether there’s any material difference between the financial metrics or aggregate amounts thereof set out above and the corresponding
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
financial metrics set out in any quarter report or semi-annual report of the Company already disclosed?
□ Yes No
IX. Items and Amounts of Non-recurring Gains or Losses
Applicable □ N/A
In RMB
Items 2022 2021 2020 Remark
Gain or loss on disposal of non-current assets (including
allowance for impairment of assets that has been written -14,220,918.02 13,783,433.93 18,548,846.52
off)
Government grants recognized in profit or loss
(excluding government grants that are closely related to
the business of the Company and are provided in fixed 317,926,133.80 268,965,326.25 208,864,058.42
amount or quantity continuously according to the
applicable polices of the country)
Fund occupation fee received from non-financial entities
19,777,467.66 25,555,038.76
that was recorded in profit or loss
Gain or loss on assets under entrusted investment or
10,408,683.62 11,913,618.63 10,718,494.92
management
Gain or loss on changes in fair value of financial assets
held for trading and financial liabilities held for trading,
and gain on disposal of financial assets held for trading,
-63,657,229.48 17,766,609.82 12,906,432.35
financial liabilities held for trading and available-for-
sale financial assets, except for effective hedges held in
the ordinary course of business
Reversal of impairment loss on accounts receivable
9,500,583.33 22,451,468.46
tested for impairment individually
Other non-operating revenue and expenses 3,073,832.45 -1,909,316.59 -1,135,781.75
Other gain or loss within the meaning of non-recurring
956,961.84 722,866.99
gain or loss
Less: Effect on income tax 21,900,816.79 65,906,713.13 46,295,962.38
Effect on minority interests (exclusive of tax) 322,123.55 1,734,292.36 248,266.58
Total 241,765,107.20 285,830,469.66 228,912,860.26 --
Other items of gain or loss within the meaning of non-recurring gains or losses:
□ Applicable N/A
We do not have any other item of gain or loss within the meaning of non-recurring gains or losses.
Classification of any item of non-recurring gain or loss defined by the Explanatory Announcement No. 1 on Information Disclosure for
Companies Publicly Offering Securities - Non-recurring Gain or Loss as recurring gain or loss:
□ Applicable N/A
We have not classified any item of non-recurring gain or loss defined by the Explanatory Announcement No. 1 on Information
Disclosure for Companies Publicly Offering Securities - Non-recurring Gain or Loss as recurring gain or loss.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Section III Management’s Discussion and Analysis
I. Industry Overview and Outlook for the Reporting Period
PCB segment: According to the latest report issued by Prismark, the total output value of the PCB industry reached USD81.741 billion
in 2022, an increase of 1.0% from the preceding year. The vigorous development of 5G, cloud, AI, Internet of Things, 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 2022. In reliance on our superior R&D,
production process, quality control, delivery and other capabilities, we are able to provide premium 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, such as laptop, smart home and new energy vehicles, 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 civilian 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
(such as heat dissipation, shell, body in white and battery structural parts), are mainly applied in communication equipment, new energy
vehicle and other fields.
As of December 2022, there were 2.31 million 5G base stations in China, accounting treatment of 21.3% of the total number of mobile
base stations, or an increase of 7 percentage points from the preceding year. Along with the improvement of the private 5G network
ecosystem led by the operators and participated in by lots of players, the relevant market size is expected to further increase in 2023.
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 electrically powered, lightweight and
intelligent with long range. As one of the few vendors that are able to provide the new energy vehicle manufacturers with a wide range
of products (including PCB (including FPC), on-board display, functional and structural components) and integrated solutions, 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 change.
We are committed to growing into a supplier of core components for the intelligently interconnected world. Our business operations
are divided into three main segments: PCB, photoelectric display, and precision manufacturing. Our products are widely applie d in
consumer electronics, new energy vehicle, communication equipment, industrial equipment, AI, servers, medical appliances and other
fields.
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 used on mobile phones, computers, AR/VR devices, wearable devices, energy storage devices,
servers, communication equipment, new energy vehicles, energy storage, industrial control equipment, etc.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
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. We are actively expanding the application of our optoelectronic display products
on vehicles.
In the field of precision manufacturing, we mainly provide precision metal structural components and assemblies to customers engaged
in the business of new energy vehicles, energy storage and communication equipment, including functional and structural components
for new energy vehicles (such as heat dissipation, shell, body in white and battery structural parts), base station antennas, filters and
other structural components and assemblies for mobile communication.
III. Core Competencies of DSBJ
(I) Advantage in customers: High-quality domestic and foreign customer base
Our products find favor with top customers in different areas throughout the world and have a premium customer base, which has a
good demonstration effect, and will help us further enhance capability to develop new customers, and acquire larger market shares in
the future competition. Our customers come from consumer electronics, new energy vehicle, communication equipment and other
industries. Such diversified customer base enables us to fend off the impact of seasonal and cyclical fluctuations of differe nt industries,
and improve our core competencies while maintaining stable growth of business.
(II) 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 our customers with
a variety of basic and core components for intelligent interconnection. In the field of PCB, we have grown into a leading company in
the industry. We actively leverage 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 our customers, and satisfy their customization requirements to the maximum extent.
(III) Advantage in technology: Stick to the principle that technological innovation capability is the primary production factor
We attach great importance to technological innovation in our business development, and drive our development through innovation.
Through participation in the early development projects of the industry-leading customers, we keep in step with the development of
cutting-edging technologies, 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 intelligent interconnection, and laid solid foundations 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 the integrated development of informatization and
industrialization. By promoting integrated development of industrialization and informatization, we have vigorously implemented
intelligent manufacturing and built intelligent factories.
(IV) Advantage in management: Advanced concept, complete system and efficient execution
We advocate the corporate spirit of “openness, inclusion, pragmatism and forward-looking”, stick to the management principle of
“overall planning, delegation of powers in business operation, support by the platform and centralized supervision”, give full play to
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
the initiative and creativity of all 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 solid foundations for our sustainable high-quality development.
(V) 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, strict requirements
for delivery of products, and 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 intelligent 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 costs. 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.
(VI) Advantage in internationalization: Promote 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 the completion of two overseas acquisitions, we have successfully entered
the PCB industry that has broader prospects for development, optimized our industrial structure, and laid solid foundations for our
high-quality development. We have achieved 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 2022, in order to implement our new-round development strategy and
actively respond to the demands of customers, we accelerated the development of overseas production bases, 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, in face of complicated global economic situations, weak consumer demands, periodically interrupted
supply of materials and other unfavorable factors, we made steady progress, stuck to the “two-wheel drive” strategy, focused on the
two key fields of consumer electronics and new energy vehicles, actively marched into the new blue sea of new energy while
continuously improving the product quality and efficiency of the consumer electronics business. We implemented a more moderate
business strategy, improved internal management, enhanced system governance and data governance, actively developed domestic and
overseas production bases, and fully leveraged our efficient R&D system to continuously launch new technologies and new products,
thereby achieving steady growth of operating results.
In 2022, our main financial indicators grew stably: our operating revenue was RMB31.580 billion, a decrease of 0.67% year on year;
net profit attributable to shareholders of the listed company was RMB2.368 billion, an increase of 27.12% year on year; net profit
attributable to shareholders of the listed company after deduction of non-recurring gains or losses was RMB2.126 billion, an increase
of 34.83% year on year; net cash flows from operating activities was RMB4.630 billion, an increase of 44.25% year on year; and debt
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
to assets ratio was 59.52%, a decrease of 1.82% year on year.
In 2022, we and our subsidiaries were awarded many special honors, including “Yins Award for Social Responsibility 2022”， “2022
Model Factory for Intelligent Manufacturing of Jiangsu” and “AAA Candidate Model Enterprise of Jiangsu in the Implementation of
Integration of Informatization and Industrialization Management System”, among others.
Below is a brief description of the main activities conducted by us in 2022:
I Focus on and continue to put superior resources in the two key fields and main products
During the reporting period, we stuck to the “two-wheel drive” strategy, focused on and continued to put superior resources in the two
key fields and main products; while actively cultivating our advantageous products and key customers, enhanced the development of
new products and new customers. We further improved our deployment in the key fields, to enhance the synergy effect. During the
reporting period, we successfully acquired a back-end on-board display module assembly plant owned by JDI, thereby entering the
field of on-board displays, and accelerated the transformation and adjustment of our non-key business, to focus on key business and
assets. While maintaining a cautious and optimistic attitude and pursuing sustainable development, we vigorously enhanced the
deployment at home and abroad and development of the domestic and overseas market, in order to further improve our operating
efficiency and results of operation.
II Actively leverage the efficient R&D system, and promote the rapid development of the new energy business.
We actively leveraged our efficient R&D system, and based on our capabilities accumulated in the fields of PCB and communication
equipment, achieved the application of lightweight, electric, intelligent and other new products and made breakthroughs in the field of
new energy vehicles. In particular, our heat dissipation, shell and battery structural part products have got wide approbation of the
customers, driving a sharp increase in our operating revenue from the new energy business. In the field of PCB, we actively participated
in the early development projects of the industry-leading customers, to keep in step with the strategic innovations of the leading
customers, and further enhance our capabilities and advantages.
III Continuously optimize the organization structure, and build competitive remuneration policies and system
We continuously optimized our organization structure, provided organizational and talent support for the rapid development of the new
businesses through training, introducing and retaining talents and other measures, further improved our scientific and effective
performance appraisal system, and explored the establishment of a more competitive remuneration system. During the reporting period,
we implemented the 2022 employee stock ownership plan (ESOP) for key officers and technical personnel with the shares repurchased.
As we are accelerating the deployment in the field of new energy, the new “three-year plan” will lead our high-quality development.
We implemented the 2022 second ESOP, to further enhance the sense of gain and arouse the enthusiasm of our employees, maximize
our values, and promote the achievement of our strategic objectives.
IV Continuously improve the system and data governance, and further increase the management efficiency
We continuously improved the system and data governance, and further optimized the management documents and internal processes
at all levels according to the characteristics of our industry and development stage, to effectively increase our operating and
management capabilities, reduce the institutional costs of our business operation, build a sound, scientific and effective internal
management system. We carried out a data governance campaign, in order to fully activate and release the value of our data assets
through data governance at the source and with data security as the baseline, enhance group-wide data integration, further promote our
development towards digitalization and intelligentalization, and improve our work efficiency and management level through intellige nt
application of data.
V Adhere to the proactive and moderate financial management strategy, and promote our development to a new level
13
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
During the reporting period, we continuously adjusted and optimized our capital structure and debt structure, adopted a more moderate
and cautious financial strategy, maintained a healthy financial position, and further lowered our debt to asset ratio. First, we improved
the budget management system, monitored the achievement of budget goals, detected gaps through ongoing comparative analysis, and
took corresponding measures. Second, we focused on the management of cash flows, which produced good results, ensured the use of
funds as scheduled, and maintained a stable ratio of cash to net profit. Third, we used foreign exchange and commodity hedging
instruments to prevent the effect of market fluctuations on our business operation. Fourth, we actively improved the asset turnovers,
enhanced cost improvement, and leveraged the value of assets, to promote steady growth of our operating results.
2. Revenue and costs
(1) Components of operating revenue
In RMB
2022 2021
% of % of Y/Y %
Amount operating Amount operating change
revenue revenue
Total operating revenue 31,580,146,732.58 100% 31,793,147,908.12 100% -0.67%
By segment
Computer, communication and other
31,450,821,150.93 99.59% 31,682,727,248.03 99.65% -0.73%
electronic components
Others 129,325,581.65 0.41% 110,420,660.09 0.35% 17.12%
By product
PCBs 21,819,200,095.46 69.09% 20,495,329,957.29 64.46% 6.46%
Touch panels and LCMs 3,402,832,979.40 10.78% 5,156,396,939.04 16.22% -34.01%
LED display devices 1,682,433,257.88 5.33% 2,603,932,687.66 8.19% -35.39%
Precision components 4,546,354,818.19 14.40% 3,427,067,664.04 10.78% 32.66%
Others 129,325,581.65 0.41% 110,420,660.09 0.35% 17.12%
By region
Domestic market 5,622,124,424.21 17.80% 6,798,743,063.07 21.38% -17.31%
Overseas market 25,958,022,308.37 82.20% 24,994,404,845.05 78.62% 3.86%
By sales model
Direct sales 31,580,146,732.58 100.00% 31,793,147,908.12 100.00% -0.67%
(2) Segments, products, regions or sales models representing more than 10% of operating revenue or profit
Applicable □ N/A
In RMB
Y/Y %
Y/Y % Y/Y %
change
Gross change in change in
Operating revenue Operating cost in
margin operating operating
gross
revenue cost
margin
By segment
Computer, communication and other
31,450,821,150.93 25,961,338,699.87 17.45% -0.73% -4.13% 2.93%
electronic components
By product
PCBs 21,819,200,095.46 17,235,837,938.13 21.01% 6.46% -0.48% 5.51%
Touch panels and LCMs 3,402,832,979.40 3,358,366,909.38 1.31% -34.01% -29.08% -6.85%
LED display devices 1,682,433,257.88 1,534,248,833.74 8.81% -35.39% -27.87% -9.50%
Precision components 4,546,354,818.19 3,832,885,018.62 15.69% 32.66% 32.25% 0.26%
By region
Domestic market 5,622,124,424.21 4,921,998,801.00 12.45% -17.31% -16.41% -0.94%
Overseas market 25,958,022,308.37 21,098,680,532.24 18.72% 3.86% -0.67% 3.70%
By sales model
Direct sales 31,580,146,732.58 26,020,679,333.24 17.60% -0.67% -4.08% 2.93%
Note: In 2022, our revenue from the new energy business was about RMB2.370 billion.
14
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
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 reporting period
□ Applicable N/A
(3) Whether the Company’s revenue from the sale of tangible goods is higher than the revenue from labor service?
Yes □ No
Segment Item Unit 2022 2021 Y/Y % change
Sales volume m2 3,480,443.01 3,331,653.39 4.47%
PCBs Output m2 3,478,056.19 3,312,615.14 4.99%
Inventories m2 134,879.10 137,265.92 -1.74%
Sales volume PC 10,577,698.00 21,628,005.00 -51.09%
LCMs Output PC 10,566,760.00 22,321,638.00 -52.66%
Inventories PC 3,876,017.00 3,886,955.00 -0.28%
Sales volume PC 174,462,497,331.00 208,056,642,319.00 -16.15%
LED display devices Output PC 168,183,812,209.00 216,650,785,694.00 -22.37%
Inventories PC 25,530,494,435.00 31,809,179,557.00 -19.74%
Sales volume PC 100,447,048.00 65,150,504.00 54.18%
Precision components Output PC 118,717,426.00 66,107,258.00 79.58%
Inventories PC 30,352,448.00 12,082,070.00 151.22%
Analysis of changes in the relevant data over 30% year on year
Applicable □ N/A
1. The output and sales volume of LCMs decreased by 52.66% and 51.09% respectively compared to the preceding year, primarily due
to the significant decrease in the sales achieved by the domestic manufacturers of branded mobile phones, laptops and other consumer
electronics, resulting in significant decrease in the output and sales volume of our products.
2. The output and sales volume of precision components increased by 79.58% and 54.18% respectively compared to the preceding year,
primarily due to the strong demands for new energy vehicles, driving the rapid growth of purchase orders from our customers, and the
mass production of our new products.
(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 costs
In RMB
2022 2021
Category of % of % of Y/Y %
Item
products Amount operating Amount operating change
costs costs
Computer, Direct material costs 19,293,122,426.37 74.15% 20,105,035,098.47 74.11% -4.04%
communication Direct labor costs 1,784,170,333.27 6.85% 2,073,617,167.68 7.64% -13.96%
and other
electronic Manufacturing and
4,943,386,573.60 19.00% 4,949,898,361.78 18.25% -0.13%
components other costs
(6) Changes in the scope of consolidation during the reporting period
Yes □ No
1. Subsidiaries newly included in the scope of consolidation
15
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Method of
Date of acquisition of Ratio of capital
Company name acquisition of Capital contribution
shares contribution
shares
Suzhou Dongyue New Energy
Investment September 6, 2022 RMB165,000,000.00 100.00%
Technology Co., Ltd.
DSBJ MEXICO ,S.DER. L. DEC. V. Investment March 27, 2022 MXN3,000.00 100.00%
Suzhou Dongshan Industrial
Investment December 29, 2022 RMB 30,000,000.00 100.00%
Investment Co., Ltd.
2. Subsidiaries removed from the scope of consolidation
Method of Net profit from January 1,
Date of disposal of Net assets at the
Company name disposal of 2022 to the date of disposal
shares date of disposal
shares (RMB)
Suzhou Aiguan Material
Deregistration September 29, 2022 3,611,898.67
Technology Co., Ltd.
(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) 21,106,964,489.18
Proportion of aggregate sales revenue from top 5 customers to
66.84%
annual sales revenue
Proportion of aggregate sales revenue from related parties
0.00%
among top 5 customers to annual sales revenue
Particulars of top 5 customers
No. Name of customer Sales revenue (RMB) % of annual sales revenue
1 Customer 1 16,295,062,455.27 51.60%
2 Customer 2 2,160,642,100.80 6.84%
3 Customer 3 1,027,736,498.24 3.25%
4 Customer 4 886,267,264.08 2.81%
5 Customer 5 737,256,170.79 2.33%
Total -- 21,106,964,489.18 66.84%
Other information of major customers
□ Applicable N/A
Major suppliers of the Company
Aggregate purchase amount from top 5 suppliers (RMB) 5,312,026,961.91
Proportion of aggregate purchase amount from top 5 suppliers to
27.03%
annual purchase cost
Proportion of aggregate purchase amount from related parties
0.00%
among top 5 suppliers to annual purchase cost
Particulars of top 5 suppliers
No Name of supplier Purchase amount (RMB) % of annual purchase cost
1 Supplier 1 1,449,502,833.70 7.38%
2 Supplier 2 1,445,026,090.10 7.35%
3 Supplier 3 1,165,482,130.64 5.93%
4 Supplier 4 762,476,476.80 3.88%
5 Supplier 5 489,539,430.67 2.49%
Total -- 5,312,026,961.91 27.03%
Other information of major suppliers
16
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
□ Applicable N/A
3. Expenses
In RMB
2022 2021 Y/Y % change Reason of material changes
Selling expenses 352,993,453.50 341,087,646.41 3.49%
Administrative expenses 815,662,486.89 781,664,730.36 4.35%
Primarily due to the exchange
Financial expenses 199,633,104.49 436,663,673.90 -54.28%
gain realized this year
R&D expenses 940,085,451.98 1,028,567,206.95 -8.60%
4. R&D investments
Applicable □ N/A
Description of major R&D Expected effect on the future
Purpose Progress Proposed objectives
project development of Company
To develop the production process
To improve the technology The technology and market
Development of a full LCP for full LCP multi-layer FPCs and
and market competitiveness Completed competitiveness of the relevant
multi-layer FPC provide better signal transmission
of the relevant products. products will be improved.
performance.
To reduce carbon emission To improve the efficiency and
Development of press-fit The technology and market
and improve the market reduce energy consumption of the
technology for FPC coverlay Completed competitiveness of the relevant
competitiveness of the production process of the relevant
films products will be improved.
relevant products. products.
To reduce carbon emission
Development of the new-type To improve the efficiency of press- The technology and market
and improve the market
press-fit technology for super- In progress fit process for multi-layer boards competitiveness of the relevant
competitiveness of the
efficient FPCs and coverlay films. products will be improved.
relevant products.
To research CPW radio frequency
structure meeting long-life dynamic
Research of the long-life To improve the technology The technology and market
bending requirements, extend the
dynamic bending board CPW and market competitiveness Completed competitiveness of the relevant
bending life, and reduce changes in
structure for foldable devices of the relevant products. products will be improved.
the post-bending radio frequency
performance.
To use the simulation software to
Development of simulation To improve the technology The technology and market
assess the dynamic bending life of
assessment method for the and market competitiveness Completed competitiveness of the relevant
FPCs, and guide the selection of
dynamic bending life of FPCs of the relevant products. products will be improved.
materials in design.
To simulate and assess different
To improve the technology The technology and market
Development of UWB FPC UWB FPC antenna designs, and
and market competitiveness Completed competitiveness of the relevant
antenna design proposals provide the best antenna
of the relevant products. products will be improved.
performance solution.
To reduce carbon emission To optimize the distribution of air
Optimization of the drying The technology and market
and improve the market flow and temperature at the drying
system on the development line In progress competitiveness of the relevant
competitiveness of the section of the manufacturing
and etching line products will be improved.
relevant products. process based on simulation.
To improve the technology The technology and market
Formation of FPCs by laser To form flexible copper metal
and market competitiveness Completed competitiveness of the relevant
cutting circuits by laser cutting.
of the relevant products. products will be improved.
To reduce carbon emission
Applied research of electro- The technology and market
and improve the market To use recycled copper powder in
coppering process using Completed competitiveness of the relevant
competitiveness of the electro-coppering, to reduce costs.
recycled copper powder products will be improved.
relevant products.
To reduce carbon emission
Applied research of electro- The technology and market
and improve the market To use recycled gold salt in electro-
gilding process using recycled Completed competitiveness of the relevant
competitiveness of the gilding, to reduce costs.
gold salt products will be improved.
relevant products.
Applied research of a pre-ink To improve the technology To use copper surface roughening The technology and market
copper surface roughening and market competitiveness Completed agent to improve the reliability of competitiveness of the relevant
agent of the relevant products. the relevant products. products will be improved.
To improve the technology To develop fluorine materials, and The technology and market
Research and development of a
and market competitiveness In progress build fluororesin FPC processing competitiveness of the relevant
new-type fluororesin FPC
of the relevant products. capability. products will be improved.
To replace hot air baking with
Research of protective film To improve the technology The technology and market
infrared heating, to reduce energy
hardening process using and market competitiveness Completed competitiveness of the relevant
consumption and improve
infrared heating of the relevant products. products will be improved.
cleanness.
To improve the technology The technology and market
Research and development of a To develop a new-type stretchable
and market competitiveness Completed competitiveness of the relevant
stretchable FPC FPC.
of the relevant products. products will be improved.
To develop thin copper and thin
To improve the technology The technology and market
Development of a thin fine line coverlay film for use in the
and market competitiveness Completed competitiveness of the relevant
FPC manufacturing of thin fine line
of the relevant products. products will be improved.
FPCs.
17
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
To improve the technology To develop a long-life dynamic The technology and market
Research of a long-life dynamic
and market competitiveness Completed bending FPC for use in foldable competitiveness of the relevant
bending FPC
of the relevant products. phones. products will be improved.
To improve the technology The technology and market
Development of a four-layer To produce four-layer substrate-like
and market competitiveness Completed competitiveness of the relevant
substrate-like PCB PCBs using mSAP process.
of the relevant products. products will be improved.
Development of the application
To improve the technology The technology and market
of graphene glue and To realize the control of heating
and market competitiveness Completed competitiveness of the relevant
semiconductor ceramic temperature using FPCs.
of the relevant products. products will be improved.
substrate on FPCs
To improve the engineering The engineering and market
Development of the single SMT To realize the diversification of
and market competitiveness Completed competitiveness of the relevant
assembly technology assembly technologies.
of the relevant products. products will be improved.
To let the levelness of asymmetric
To improve the technology The technology and market
Development of an asymmetric PCBs be similar to that of
and market competitiveness Completed competitiveness of the relevant
thin PCB symmetric PCBs, so as to reduce the
of the relevant products. products will be improved.
mounting risk of the customers.
Development of the sub-outer To improve the technology To achieve the effect of accurate The technology and market
layer step gold finger and market competitiveness Completed depth milling decap through form competitiveness of the relevant
technology of the relevant products. milling. products will be improved.
To improve the technology To satisfy the integration, anti- The technology and market
Development of the buried
and market competitiveness In progress interference and other requirements competitiveness of the relevant
resistance process
of the relevant products. of devices. products will be improved.
To design laser grooves that satisfy
To improve the technology The technology and market
the customers’ requirements for
Development of laser groove and market competitiveness Completed competitiveness of the relevant
different thicknesses, lengths and
of the relevant products. products will be improved.
widths of dielectric layers
Development of the conductive To improve the technology To provide the customers with next- The technology and market
copper grease process and and market competitiveness Completed generation 5G millimeter waver competitiveness of the relevant
technology of the relevant products. solutions. products will be improved.
Development of the process
To improve the technology The technology and market
technology for producing buried To provide the customers with
and market competitiveness In progress competitiveness of the relevant
resistance using thin film buried buried resistance solutions.
of the relevant products. products will be improved.
resistance foil TCR
To improve high-speed product
The technology and market
Simulation and design of 56/112 To improve the product design capability and efficiency, and
In progress competitiveness of the relevant
Gbps transmission line design capability. reach the leading level of the
products will be improved.
industry
To develop the LCM side blind hole
To improve the technology The technology and market
Development of LCM blind and middle blind hole process,
and market competitiveness Completed competitiveness of the relevant
hole technology which can be applied in mass
of the relevant products. products will be improved.
production.
To narrow the frames of LCMs and
To improve the technology The technology and market
Development of LCM three- connect LCMs with the enclosures
and market competitiveness In progress competitiveness of the relevant
side sealing technology more closely, to produce a better
of the relevant products. products will be improved.
sealing effect.
To develop the optic and structural
To develop the new design, driver and algorithm of blue The technology and market
Mini LED LCM technology to improve the In progress light COB Mini LEDs, and realize competitiveness of the relevant
display effect of LCDs. the industrialization of the products will be improved.
technology.
To maintain the consistent color of
the display area and the edge ink
area when the screen is turned off,
to improve the aesthetics. The
To improve the display effect The technology and market
Display integrated black panel integrated black panel (IBP)
and market competitiveness In progress competitiveness of the relevant
technology technology that can create a novel,
of the relevant products. products will be improved.
prominent, beautiful display effect
with a sense of technology will
become a tendency of display
panels.
The development of PF2 product
technology and process has been
To improve the technology
completed, which will satisfy the The technology and market
and market competitiveness
PF2 project R&D Completed customers’ requirements for ultra- competitiveness of the relevant
of laptop and all-in-one PC
thin specifications. A number of products will be improved.
device products.
projects have entered into mass
production.
The development of G-sensor
To improve the technology yellow light process and etching
The technology and market
and market competitiveness paste process has been completed,
Self-made G-sensor Completed competitiveness of the relevant
of on-board and industrial which reaches the advanced level of
products will be improved.
control products. the industry. A number of projects
have entered into mass production.
The development of 3um~5um
To improve the technology mesh process has been completed,
At the stage The technology and market
and market competitiveness which reaches the advanced level of
Self-made metal mesh sensor of trial competitiveness of the relevant
of tablet, laptop and all-in-one the industry. A number of projects
production products will be improved.
PC device products. are at the stage of trial production.
Efforts are made to further increase
18
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
the yield of the manufacturing
process.
To develop visually striking
The technology and market
Design of home electric vehicle To improve the market leading-edge products for the
Completed competitiveness of the relevant
charger products competitiveness. strategic customers in the
products will be improved.
automotive field.
Development of home electric To provide products with reliable The technology and market
To improve the market
vehicle charger automatic Completed quality for the strategic customers in competitiveness of the relevant
competitiveness.
assembly line the automotive field. products will be improved.
To provide products with reliable The technology and market
Automatic welding of home To improve the market
Completed quality for the strategic customers in competitiveness of the relevant
electric vehicle chargers competitiveness.
the automotive field. products will be improved.
To improve the
To optimize the structure of energy The technology and market
Optimization of the structure of manufacturability, technology
In progress storage cabinet, improve the competitiveness of the relevant
energy storage cabinet and market competitiveness
manufacturability, and reduce costs. products will be improved.
of the relevant products.
Development of the cold plate The technology and market
To improve the market
production line and tooling Completed To put into operation. competitiveness of the relevant
competitiveness.
technology products will be improved.
Particulars of R&D personnel
2022 2021 Y/Y % change
Number of R&D personnel
3,944 3,699 6.62%
(person)
Ratio of R&D personnel to
18.76% 18.53% 0.23%
total number of employees
Education background of R&D personnel
Undergraduate 1,856 1,741 6.61%
Master 55 37 48.65%
Age of R&D personnel
Below 30 1,950 1,726 12.98%
30-40 552 518 6.56%
Particulars of R&D expenses
2022 2021 Y/Y % change
Amount of R&D expenses (RMB) 940,085,451.98 1,028,567,206.95 -8.60%
Ratio of R&D expenses to operating
2.98% 3.24% -0.26%
revenue
Amount of R&D expenses capitalized
0.00 0.00 0.00%
(RMB)
Ratio of capitalized R&D expenses to
0.00% 0.00% 0.00%
total R&D expenses
Analysis of the cause and effect of the significant changes in the composition of R&D personnel
□ Applicable N/A
Analysis of the cause of the significant change in the ratio of R&D expenses to operating revenue compared to the preceding year
□ Applicable N/A
Analysis of the cause and reasonableness of the significant change in the ratio of R&D expenses capitalized
□ Applicable N/A
5. Cash flows
In RMB
Item 2022 2021 Y/Y % change
Cash provided by operating activities 32,948,819,791.38 31,571,649,840.58 4.36%
Cash used in operating activities 28,318,935,780.00 28,362,105,356.37 -0.15%
Net cash flows from operating activities 4,629,884,011.38 3,209,544,484.21 44.25%
Cash provided by investing activities 679,476,885.00 1,871,205,697.48 -63.69%
Cash used in investing activities 4,438,468,040.34 3,898,266,527.76 13.86%
Net cash flows from investing activities -3,758,991,155.34 -2,027,060,830.28 -85.44%
Cash provided by financing activities 12,967,955,013.11 13,568,826,956.10 -4.43%
19
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Cash used in financing activities 12,464,334,940.01 13,662,677,252.42 -8.77%
Net cash flows from financing activities 503,620,073.10 -93,850,296.32 636.62%
Net increase in cash and cash equivalents 1,517,725,695.91 1,066,166,041.32 42.35%
Analysis of the main causes of the significant changes in the relevant data
Applicable □ N/A
1. The net cash flows from operating activities increased by 44.25% compared to the preceding year, primarily due to the increase in
the net profit for the reporting period and high receivables turnover ratio during the credit period for the customers of our core business.
2. The net cash flows from investing activities decreased by 85.44% compared to the preceding year, primarily due to the decrease in
the amount of investment in wealth management products recovered upon maturity during the reporting period.
3. The net cash flows from financing activities increased by 636.62% compared to the preceding year, primarily due to the increase in
the long-term funds raised by us for the implementation of our new energy strategy.
4. The net increase in cash and cash equivalents increased by 42.35% compared to the preceding year, primarily due to the significant
increase in the net cash flows from operating activities and the reserve funds appropriated by us for the new energy and on-board
component business.
Analysis of the significant difference between net cash flows from operating activities during the reporting period and net profit for the
current year
Applicable □ N/A
In 2022, the net cash flows from operating activities were RMB4.630 billion, while the net profit was RMB2.368 billion. The difference
was primarily due to the increase in depreciation, amortization and accounts receivable collected.
V. Analysis of Non-main Business
□ Applicable N/A
VI. Analysis of Assets and Liabilities
1. Material changes in the components of assets
In RMB
December 31, 2022 January 1, 2022
Y/Y %
% of total % of total Reason of significant change
Amount Amount change
assets assets
Primarily due to the significant increase in the net cash
Cash and bank flows from operating activities and the reserve funds
7,131,202,817.72 17.59% 5,400,837,392.47 14.23% 3.36%
balances appropriated by us for the new energy and on-board
component business.
Accounts receivable 7,006,411,466.74 17.29% 7,666,079,765.82 20.20% -2.91%
Inventories 6,165,738,409.09 15.21% 6,451,712,389.82 17.00% -1.79%
Investment
1,296,551.42 1,554,262.58
properties
Long-term equity
139,767,215.41 0.34% 143,121,019.78 0.38% -0.04%
investment
Fixed assets 10,673,700,468.47 26.33% 10,736,270,678.33 28.29% -1.96%
Primarily due to the fine line FPC project, IC substrate
Construction in
1,813,183,815.67 4.47% 503,037,513.25 1.33% 3.14% project and the domestic and overseas new energy-
progress
related projects being under construction
Right-of-use assets 951,068,254.01 2.35% 920,952,667.75 2.43% -0.08%
Short-term
7,794,409,944.68 19.23% 8,047,168,009.16 21.20% -1.97%
borrowings
Contract liabilities 26,193,456.12 0.06% 39,681,986.94 0.10% -0.04%
Primarily due to the long-term bank loans obtained for
Long-term loans 3,197,821,643.49 7.89% 2,030,525,761.80 5.35% 2.54%
our new major investment projects
Primarily due to the new lease liabilities incurred in
Lease liabilities 1,647,319,046.20 4.06% 1,147,810,164.72 3.02% 1.04%
connection with the factory buildings leased for the
20
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Yancheng Phase II project
Analysis of high proportion of overseas assets
Applicable □ N/A
In RMB
Whether it
Proportion involves
Controls for
Method of Mode of of overseas risk of
Assets Amount Location guaranteeing the Income
acquisition operation assets to material
security of assets
net assets impairment
loss
Established Its manufacturing
Delaware, R&D and
Dragon Holdings by the 27,056,169,632.12 entity is located 1,143,169,986.23 34.70% No
U.S. sales
Company in China
Established Hong Its manufacturing
R&D and
Multek Group by the 5,388,023,644.89 Kong, entity is located 105,030,584.26 11.89% No
sales
Company China in China
Remark None
2. Assets and liabilities at fair value
Applicable □ N/A
In RMB
Impair
ment
Aggregate loss
Gain or loss on Amount acquired Amount sold in
Opening changes in fair recogni
Items changes in fair in the reporting the reporting Other changes Closing balance
balance value recorded zed in
value period period
in equity the
current
period
Financial assets
1. Financial assets held for
trading (excluding derivative 362,098,666.66 1,438,774,536.19 1,448,083,103.13 6,348,937.52 359,139,037.24
financial assets)
2. Derivative financial assets 97,179,912.08 -15,402,605.82 -37,830,849.50 148,764,414.64 32,845,252.37 159,865,619.03
4. Investment in other equity
40,249,971.12 19,515,060.00 2,985,883.46 56,779,147.66
instruments
Subtotal of financial assets 499,528,549.86 -15,402,605.82 -37,830,849.50 1,607,054,010.83 1,483,914,238.96 6,348,937.52 575,783,803.93
Total 499,528,549.86 -15,402,605.82 -37,830,849.50 1,607,054,010.83 1,483,914,238.96 6,348,937.52 575,783,803.93
Financial liabilities 0.00 51,210,853.68 170,981,004.89 130,674,741.68 91,517,116.89
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
Items Closing carrying value Reason for restrictions
Cash and bank balances 1,674,175,995.02 Security deposit for notes and loans, etc.
Account receivables financing 441,621,937.83 Pledge of notes
Fixed assets 459,521,491.55 Collateral for loans, sale and lease back
Right-of-use assets 951,068,254.01 Finance lease
Total 3,526,387,678.41
VII. Analysis of Investments
1. Overview
Applicable □ N/A
Amount of investment in 2022 (RMB) Amount of investment in 2021 (RMB) Y/Y % change
3,151,530,715.00 841,517,692.36 274.51%
2. Major equity investments acquired during the reporting period
□ Applicable N/A
21
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
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
□ Applicable N/A
We have not invested in any securities during the reporting period.
(2) Investment in derivatives
Applicable □ N/A
1) Investment in derivatives for hedging purpose during the reporting period
Applicable □ N/A
In RMB0’000
Aggregate
Type of Initial Gain or loss on Amount Amount sold in % of net assets
changes in fair
investment in investment changes in fair acquired in the the reporting Closing balance at the end of the
value recorded
derivatives amount value reporting period period reporting period
in equity
Commodity
2,535.88 -867.51 0 40,903.33 46,688.54 7,604.46 0.46%
futures
Total 2,535.88 -867.51 0 40,903.33 46,688.54 7,604.46 0.46%
Hedge
accounting
policies and
principles
adopted for the
reporting period
and significant None
changes in such
policies and
principles
compared to the
preceding
reporting period
Actual profit or
loss for the The loss on commodity futures transactions recorded in profit or loss was RMB8.6751 million.
reporting period
We conduct hedging transactions for the purpose of locking in the costs, avoiding and preventing exchange or interest rate risks, and
Effect of
prohibit any risk speculation. Our objectives are to further improve our capability to address the risk of foreign exchange fluctuations,
hedging
avoid and prevent exchange or interest rate risks, and improve our financial soundness.
Source of funds
for investment Self-owned funds
in derivatives
Analysis of
risks associated
with the
derivatives held
in the reporting
period
(including
without
limitation Refer to the Announcement of Commodity Futures Hedging (Announcement No. 2022-004) disclosed by us on January 25, 2022.
market risk,
liquidity risk,
credit risk,
operational risk
and legal risk)
and related risk
control
measures
Changes in the
market price or
fair value of the We are mainly engaged in hedging transactions with mainstream products on major domestic futures markets. The derivatives traded by
derivatives held us have a transparent and active market, and their transaction prices and settlement prices can fully reflect their fair valu e.
in the reporting
period (in the
22
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
analysis of the
fair value of
derivatives, the
specific
approaches,
assumptions and
parameters used
shall be
disclosed)
Litigation
involved (if N/A
applicable)
Disclosure date
of the
announcement
of the board of
directors January 25, 2022
approving the
investment in
derivatives (if
any)
Special opinion
issued by the
independent
The hedging transactions conducted by the Company with commodity futures can leverage the hedging function of futures, reduce the
directors
effect of the fluctuations in market prices of raw materials and products on the production and operating costs and the price s of main
regarding the
products of the Company, improve its capability to fend off risks and enhance its financial soundness. The relevant transactions have been
Company’s
considered and decided in accordance with the provisions of the applicable laws , regulations and normative documents and the relevant
investment in
policies of the Company, and will not prejudice the interests of the Company and its shareholders. Therefore, we consent to the conduct
derivatives and
of the hedging transactions by the Company with commodity futures.
related risk
control
measures
2) Investment in derivatives for speculative purpose during the reporting period
□Applicable N/A
We have not made any investment in derivatives for hedging purpose during the reporting period.
5. Use of offering proceeds
Applicable □ N/A
(1) Description of use of offering proceeds
Applicable □ N/A
In RMB0’000
T otal
T otal
amount of Aggregate
T otal Percentage amount of
offering amount of
amount of Aggregate of offering T otal Purpose and offering
proceeds the offering
T otal offering amount of proceeds the amount of whereabouts proceeds
Year of Method of purpose of proceeds the
offering proceeds offering purpose of unused of unused that has
offering offering which was purpose of
proceeds used in the proceeds which has offering offering remained
changed in which has
reporting already used been proceeds proceeds unused for
the been
period changed more than
reporting changed
two years
period
T o be
Private invested in
2020 289,225.58 58,878.74 211,882.99 61,565.47 61,565.47 21.29% 75,903.11 0
placement the relevant
projects
T otal -- 289,225.58 58,878.74 211,882.99 61,565.47 61,565.47 21.29% 75,903.11 -- 0
Description of use of offering proceeds
With the approval of the CSRC under the Reply on Approval of Private Placement of Shares by Suzhou Dongshan Precision
Manufacturing Co., Ltd. (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 RMB28.00 per share to specific investors through the lead underwriter
Tianfeng Securities Co., Ltd., and raised RMB2,892.2558 million in total, and after deduction of the underwriter’s fee and sponsor’s
fee totaling RMB23.1132 million, the balance of the offering proceeds, RMB2868.7558 million, was remitted to our supervisory
account of offering proceeds by Tianfeng 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 RMB5.1887
million, the amount of net offering proceeds was RMB2863.9539 million (exclusive of tax). Pan-China Certified Public
23
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
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 using offering proceeds
Applicable □ N/A
In RMB0’000
Aggregate Whether
Progress of
Whether the amount there’s any
Committed Amount investment Date that Income Whether the
project has T otal T otal already significant
investment invested in as of the the project earned in project has
been committed investment invested as change in
project and the end of the is ready for the produced
changed or investment amount as of the end the
use of over- reporting reporting its intended reporting the desired
partially amount adjusted (1) of the feasibility of
raised funds period period (3) use period result
changed reporting the project
=(2)/(1)
period (2)
Committed investment project
400,000 m 2
fine line
FPC
production
January 5,
and No 80,338.48 80,338.48 11,613.98 79,798.34 99.33% 30,600.82 Yes No
2022
assembly
capacity
expansion
project
Multek 5G
high-speed
high-
frequency
and high- No 65,958.46 65,958.46 6,385.49 32,041.72 48.58% N/A 4,324.58 No No
density PCB
technology
upgrading
project
Multek PCB
production
line April 19,
No 72,805.89 72,805.89 14,576.88 65,691.03 90.23% 9,349.58 Yes No
technology 2023
upgrading
project
FPC for
new energy
application
and
Yes 61,565.47 25,931.22 25,931.22 42.12% N/A N/A N/A No
assembly
project of
MFLEX
Yancheng
Wireless
module
production
and
construction
project of
Yes 70,122.75 8,557.28 371.17 8,420.68 98.40% N/A N/A N/A Yes
Yancheng
Dongshan
Communica
tion
Technology
Co., Ltd.
Subtotal -- 289,225.58 289,225.58 58,878.74 211,882.99 -- -- 44,274.98 -- --
Use of over-raised funds
None
T otal -- 289,225.58 289,225.58 58,878.74 211,882.99 -- -- 44,274.98 -- --
Failure to
meet the
scheduled
progress and
produce the
desired
Due to the construction of 5G network falling short of expectations, the changes in the macro-economic environment in the recent years and other unfavorable factors,
result and
the “ Multek 5G high-speed high-frequency and high-density PCB technology upgrading project” has proceeded slowly and produced relatively poor results. In recent
reason
years, the digital economy has developed vigorously in China, and become a main driving force for building the new development pattern and new competitive
thereof
advantages of the country. As the key to leading the development of new-generation information technology and new-type infrastructure, 5G is an important engine
(please
driving the development of digital economy, and provides enormous potentials for pushing the society into the era of intelligent interconnection. We believe that the
describe on
prospects of the 5G market are promising in the long run, and will adjust and advance the relevant investment projects taking into account the changes in market
a project-by-
demands. T herefore, according to the market conditions and the progress of the construction and funding of the investment project, we plan to extend the date that
project
the project is ready for its intended use to October 31, 2024, without changing the use of offering proceeds and amount of offering proceeds to be invested in the
basis,
project. Such extension has been approved at the 33rd meeting of the 5th Board of Directors and the 20 th meeting of the 5th Board of Supervisors held on April 19,
including
2023.
the reason of
selecting
N/A in the
column
“whether the
project has
24
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
produced
the desired
result”)
Reason of Due to the bottleneck in the development of 5G communication, weak downstream demands and other unfavorable factors, the progress of the “Wireless module
significant production and construction project of Yancheng Dongshan Communication Technology Co., Ltd.” fell short of expectations. In light of the rapid development of the
change in new energy vehicle market and rising demands of the on-board FPC market, as a component supplier for the international leading new energy vehicle manufacturers,
the we need to further improvement our industrial layout, capability to serve the downstream customers, and overall competencies. Therefore, in order to ensure the
feasibility of efficient use of offering proceeds, we have decided to change the “ wireless module production and construction project of Yancheng Dongshan Communication
the project Technology Co., Ltd.” into the “FPC for new energy application and assembly project of MFLEX Yancheng”.
Amount and
use of over-
raised
offering
N/A
proceeds
and progress
of use
thereof
Change in
the place of
the
investment
N/A
project
using
offering
proceeds
Adjustment
of the
method of
implementat
ion of the
N/A
investment
project
using
offering
proceeds
Funds pre- Applicable
invested in
the
investment T he 3 rd meeting of the 5 th meeting of the Board of Directors considered and adopted the Proposal for Replacing the Self-raised Funds Pre-invested in the Investment
project and Projects using Offering Proceeds with the Idle Offering Proceeds, approving the replacement of the funds pre-invested in the investment projects using offering
replacement proceeds in the amount of RMB399.5914 million with the offering proceeds. The replacement was completed in 2020.
thereof
Temporary Applicable
replenishme
nt of
working On June 13, 2022, the 23rd meeting of the 5 th Board of Directors and the 16 th meeting of the 5 th Board of Supervisors considered and adopted the Proposal for
capital with Temporary Replenishment of Working Capital with the Idle Offering Proceeds, approving the temporary replenishm ent of working capital with the idle offering
the idle proceeds up to RMB1 billion for a period of not more than 12 months. As of December 31, 2022, we used the idle offering proceeds of RMB655 million to temporarily
offering replenish the working capital.
proceeds
Applicable
Amount of T he “ 400,000 m 2 fine line FPC production and assembly capacity expansion project” and the “ Multek PCB production line technology upgrading project” have been
surplus ready for their intended use. On the principle of reasonableness, economy and effectiveness, we have used the offering proceeds prudently, enhanced control,
offering supervision and management of all kinds of expenses, reasonably allocated and optimized all kinds of resources, reasonably reduced the relevant costs and expenses,
proceeds and saved certain offering proceeds. In addition, we have earned interest income from the offering proceeds. T he total surplus offering proceeds, in the amount of
and reason RMB6.34 million, have been permanently applied to replenish our working capital, and will be used in our day-to-day business operations. The completion of such
thereof investment projects using offering proceeds and the use of the surplus offering proceeds to permanently replenish the working capital have been approved at the 33rd
meeting of the 5 th Board of Directors and the 20 th meeting of the 5 th Board of Supervisors held on April 19, 2023.
Purpose and
whereabouts
As of December 31, 2022, the amount of unused offering proceeds was RMB759.0311 million, of which, RMB655 million was used to replenish the working capital,
of unused
and RMB104.0311 million was deposited in the special account of offering proceeds.
offering
proceeds
Adjustment
of the
method of
implementat
ion of the
N/A
investment
project
using
offering
proceeds
(3) Changes in the investment projects using offering proceeds
Applicable □ N/A
In RMB0’000
Aggregate
Amount of Progress of Whether
amount
offering Amount investment as Date that the Income Whether the there’s any
Original already
proceeds to invested in of the end of project is earned in the project has significant
New project committed invested as of
be invested in the reporting the reporting ready for its reporting produced the change in the
project the end of the
the new period period (3) intended use period desired result feasibility of
reporting
project (1) =(2)/(1) the project
period (2)
FPC for new Wireless
energy module
61,565.47 25,931.22 25,931.22 42.12% N/A N/A N/A No
application production
and assembly and
25
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
project of construction
MFLEX project of
Yancheng Yancheng
Dongshan
Communicati
on
Technology
Co., Ltd.
T otal -- 61,565.47 25,931.22 25,931.22 -- -- -- -- --
Due to the bottleneck in the development of 5G communication, weak downstream demands and other unfavorable factors,
the progress of the “ wireless module production and construction project of Yancheng Dongshan Communication Technology
Co., Ltd.” fell short of expectations. In light of the rapid development of the new energy vehicle market and rising demands of
the on-board FPC market, as a component supplier for the international leading new energy vehicle manufacturers, we need to
Reason of change, decision-making procedures further improvement our industrial layout, capability to serve the downstream customers, and overall competencies. Therefore,
and information disclosure (please describe on a in order to ensure the efficient use of offering proceeds, we have decided to change the “ wireless module production and
project-by-project basis) construction project of Yancheng Dongshan Communication Technology Co., Ltd.” into the “ FPC for new energy application
and assembly project of MFLEX Yancheng”. Such change in the use of offering proceeds were approved at the 19 th meeting
of the 5 th Board of Directors and the 13th meeting of the 5 th Board of Supervisors held on February 17, 2022, and the first
extraordinary general meeting in 2022 held on March 8, 2022, and disclosed on www.cninfo.com.cn, and our designated
newspapers for information disclosure.
Failure to meet the scheduled progress and produce
the desired result and reason thereof (please N/A
describe on a project -by-project basis)
Reason of significant change in the feasibility of the
N/A
project
VIII. Sale of Material Assets and Equities
1. Sale of material assets
□ Applicable N/A
No material asset has been sold during the reporting period.
2. Sale of material equities
□ Applicable N/A
IX. Analysis of Major Subsidiaries and Investees
Applicable □ N/A
Major subsidiaries and investees representing more than 10% of the net profit of the Company
In RMB
Type of
Company name Main business Registered capital Total assets Net assets Operating revenue Operating profit Net profit
company
Design, R&D, sale and after-sale
Dragon
Subsidiary services in respect of P CBs; USD113,450,100 27,056,169,632.12 5,693,347,235.44 35,126,071,016.69 1,488,476,842.55 1,143,169,986.23
Holdings
investment holding
R&D, sale and after-sale services in
Multek Group Subsidiary USD218,248,360.27 5,388,023,644.89 1,951,469,300.00 4,650,989,651.82 139,763,610.35 105,030,584.26
respect of P CBs
Subsidiaries acquired or disposed of during the reporting period:
Applicable □ N/A
Effect on overall production, operation
Company name Method of acquisition or disposal
and results
Suzhou Aiguan Material Technology Co., No material effect on our operating
Deregistration
Ltd. results in the reporting period
Suzhou Dongshan Industrial Investment No material effect on our operating
Investment
Co., Ltd. results in the reporting period
Suzhou Dongyue New Energy No material effect on our operating
Investment
Technology Co., Ltd. results in the reporting period
No material effect on our operating
DSBJ MEXICO,S.DE R.L.DE CV. Investment
results in the reporting period
X. Structured Entities Controlled by the Company
□ Applicable N/A
XI. Prospects for Future Development of the Company
(I) Our development strategy
26
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
We focus on high-quality development, enhance systemic thinking, make top-level design, strictly defend the bottom line of operation;
actively embrace changes, focus on the two key fields of consumer electronics and new energy vehicles, actively march into the new
blue sea of new energy while continuously improving the product quality and efficiency of the consumer electronics 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 a healthy financial position; optimize the organization structure, enhance the training of personnel; implement the
integration of informatization and industrialization, and drive the transition from “manufacturing” to “intelligent manufacturing”.
(II) 2023 business plan
(1) Stick to the “two-wheel drive” strategy, improve the product quality and efficiency of the consumer electronics business, and
vigorously develop the new energy business;
(2) Optimize the layout and improve the operating capability of the overseas bases;
(3) Enhance comprehensive budget management, maintain a healthy financial position, and continuously optimize the capital structure;
(4) Enhance the integration of informatization and industrialization, improve system governance and data governance, and promote
high-quality development of the Company;
(5) Continuously optimize the organization structure and talent training; and
(6) Increase ESG values and sustainability, and actively explore green and low-carbon development and sustainable development issues.
(III) Main risk factors
1. 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.
2. 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, new energy vehicles, 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 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 kee p our
technologies and processes at the advanced level through continuous and effective R&D investments.
3. 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.
27
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
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.
4. 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 competencies, 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 competencies, and
actively cope with market competitions.
5. Environmental risk
In our production, the electroplating, etching and other processes produce waste water, waste gas and fixed wastes, and therefore are
subject to strict requirements for environmental protection. We cannot exclude the possibility that environmental incidents may happen
during our production due to negligence in management, force majeure or otherwise. If we meet with any environmental incident,
cause pollution to the environment or violate the applicable environmental protection laws and regulations, our reputation and
operations could be adversely affected. Along with the vigorous development of a green and low-carbon circular economic
development system and improvement of people’s living standard in China, and increasingly enhanced awareness of environmental
protection of people, the country attaches increasingly great importance to environmental protection. If the country puts forward stricter
environmental protection requirements, we may need to increase the funding for environmental protection, which would increase our
environmental protection costs and in turn affect our results.
We have set the building of an environment friendly enterprise as a key goal of our sustainable development strategy, attached great
importance to and increased the funding for environmental protection in our production and operation, actively responded to the
requirements of the latest environmental protection laws and regulations, enhanced environmental protection training and employees’
awareness of environmental protection, taken control measures at source, established and improved the environmental management
system, and implemented the requirements related to environmental safety in all of our key business activities, to reduce the
environmental risks.
6. 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 presented 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 rates, strive to control the exposure to foreign exchange
risk at a reasonable level, and hedge or otherwise reduce exposure to such risk.
XII. Investigation, Research, Communication, Interview and Other Activities during the
Reporting Period
Applicable □ N/A
Particulars of the
Method of Main topics of discussion investigation and
Date Place Type of guests Guests
communication and information provided research activity
available at
28
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Ping An Asset
Interpretation of our results
Communication Institutional Management Co., Ltd.
April 20, 2022 Online in 2021 and development www.cninfo.com.cn
by telephone investors and other 160
plans
institutional investors
Individual and
Interpretation of our annual
April 27, 2022 Online Others institutional Investors www.cninfo.com.cn
report 2021
investors
Interpretation of our semi-
GF Fund Management
annual report of 2022, and
Communication Institutional Co., Ltd. and other
August 18, 2022 Online introduction about the www.cninfo.com.cn
by telephone investors 171 institutional
development of our main
investors
business segments
Hua Chuang
Communication Institutional Securities and other Interpretation of our third
October 25, 2022 Online www.cninfo.com.cn
by telephone investors 508 institutional quarter report of 2022
investors
29
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Section IV Corporate Governance
I. Overview of Corporate Governance
During the reporting period, we have continuously improved our corporate governance structure, operated in compliance with the
regulations, and enhanced information disclosure in strict accordance with the Company Law, the Securities Law, the Code of
Corporate Governance for Listed Companies, the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange and other
applicable laws and regulations. We have established a corporate governance structure that sets forth well-defined powers and
responsibilities, and mutual restraint mechanisms, and operates in a coordinated manner. Our general meeting, Board of Directors and
Board of Supervisors have duly performed their duties and exercised their functions, operated in compliance with the regulations, and
seriously protected the legitimate rights and interests of the investors and the Company.
Is there any significant difference between the actual circumstance of corporate governance of the Company and the applicable laws,
administrative regulations and the provisions of the CSRC regarding corporate governance of the listed companies?
□ Yes No
There isn’t any significant difference between the actual circumstance of our corporate governance and the applicable laws,
administrative regulations and the provisions of the CSRC regarding corporate governance of the listed companies.
II. The Company’s independence of its controlling shareholders and actual controllers in
assets, personnel, finance, organization and business
We are independent of our controlling shareholders in business, personnel, assets, organization and finance, and have our own
independent and complete business, and are independent in management.
1. Independence in business operation: We are independent of our shareholders and other affiliates in business operation, have complete
production, R&D, management, procurement and sales systems, and are able to carry out business independently on the market.
2. Independence in personnel: We have a sound corporate governance structure in place, and our directors, supervisors and senior
officers have been appointed in strict accordance with the Company Law and the Articles of Association, and do not hold any concurrent
post in contravention of the applicable laws and regulations. We are independent of our shareholders in personnel and payroll
management, and all of our employees receive their salaries from us. We have developed stringent employment, performance appraisal,
promotion and other competent labor policies, and entered into a Labor Contract with each employee. We are fully independent in
labor, personnel and payroll management.
3. Independence in assets: We have a clear property right relationship with our controlling shareholders, own or have the right to use
the premises and land necessary for our production and operating activities, and have complete auxiliary production systems and
supporting facilities. None of our controlling shareholders or the business entities controlled by them has occupied any of our funds,
assets or other resources.
4. Independence in organization: We have established a relatively sound corporate governance structure in accordance with the
requirements of the Company Law and the Articles of Association, and our general meeting, Board of Directors and Board of
Supervisors exercise their respective functions in strict accordance with applicable laws and regulations. We have set up internal bodies
suitable for our development, defined their respective functions, and developed corresponding internal management and control
systems. All of our functional departments operate independently, free from any interference by any shareholders, other department,
entities or individuals, and do not engage in any mixed operation or share office space with other departments.
30
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
5. Independence in finance: We have an independent finance department, and full-time financial personnel, established sound
accounting system and financial management and decision-making policies, and implemented strict financial supervision and
administration. We open independent bank accounts, and control our funds and assets independently, free from any interference by our
shareholders. We are an independent taxpayer, pay taxes independently according to law, and do not mix our tax payment with any
shareholder.
III. Horizontal competition
□ Applicable N/A
IV. Particulars of Annual General Meeting and Extraordinary General Meetings Held during
the Reporting Period
1. General meetings held during the reporting period
Percentage of
investors
Session T ype of meeting Date of meeting Disclosure date Resolution of the meeting
attending the
meeting
T he 1 st extraordinary Extraordinary Announcement of the resolutions of the 1 st extraordinary
40.13% March 8, 2022 March 9, 2022
general meeting in 2022 general meeting general meeting in 2022 (Announcement No.: 2022-017)
2021 annual general Annual general Announcement of the resolutions of the 2021 annual general
39.83% May 20, 2022 May 21, 2022
meeting meeting meeting (Announcement No.: 2022-044)
T he 2 nd extraordinary Extraordinary Announcement of the resolutions of the 2 nd extraordinary
28.57% October 31, 2022 November 1, 2022
general meeting in 2022 general meeting general meeting in 2022 (Announcement No.: 2022-078)
2. Extraordinary shareholders’ meetings convened on the requisition of holders of preferred shares whose
voting rights have been restituted
□ Applicable N/A
V. Directors, Supervisors and Senior Officers
1. Particulars
Cause of
No. of Changes
No. of increase
addition in the
shares or
Beginning date Ending date of Opening shares number
disposed of Closing balance decrease
Name Title Status Sex Age of the term of the term of balance of acquired in in the of shares of shares held in the
office office shares held the held due
reporting number
reporting to other
period period reasons of shares
held
YUAN Yonggang Chairman Active Male 44 May 29, 2020 May 29, 2023 202,226,196 202,226,196
YUAN Yongfeng Director & General Manager Active Male 46 May 29, 2020 May 29, 2023 222,388,153 222,388,153
ZHAO Xiutian Vice Chairman Active Male 60 May 29, 2020 May 29, 2023
SHAN Jianbin Director & Executive President Active Male 47 May 29, 2020 May 29, 2023 553,700 553,700
Director, Deputy General Manager Femal
MAO Xiaoy an Active 43 May 29, 2020 May 29, 2023 391,600 391,600
& Board Secretary e
Director, Deputy General Manager
WANG Xu & CFO Active Male 41 May 29, 2020 May 29, 2023 560,000 560,000
WANG
Independent director Active Male 60 May 29, 2020 May 29, 2023
Zhangzhong
SONG Liguo Independent director Active Male 59 May 29, 2020 May 29, 2023
GAO Yongru Independent director Active Male 55 March 8, 2020 May 29, 2023
LIN Shu Independent director Resigned Male 45 May 29, 2020 March 8, 2022
Chairman of the Board of
MA Liqiang Active Male 42 May 29, 2020 May 29, 2023 3,000 3,000
Supervisors
JI Yachun Employ ee representative supervisor Active Male 45 May 29, 2020 May 29, 2023
HUANG Yongxin Employ ee representative supervisor Active Male 37 May 29, 2020 May 29, 2023
Total -- -- -- -- -- -- 426,122,649 426,122,649 --
Whether any director or supervisor resigned or any executive was removed during the reporting period?
Yes □ No
In 2022, Mr. LIN Shu resigned as our Independent director. Mr. GAO Yongru was elected as an Independent director at the 1st
extraordinary general meeting in 2022.
Changes in directors, supervisors and senior officers
Applicable □ N/A
Name Title Type Date Reason
LIN Shu Independent director Resigned March 8, 2022 Personal reason
31
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Elected by the general
GAO Yongru Independent director Elected March 8, 2022
meeting
2. Profile
Professional background, main work experience and main duties of our current directors, supervisors and senior officers
(1) Members of the Board of Directors
Mr. YUAN Yonggang: a PRC citizen, bachelor’s degree, one of controlling shareholders and actual controllers of the Company. He
has served as the Director of the Marketing Department, Deputy Manager and Vice Chairman of the Company since October 1998,
and is now Chairman of the Company, Vice Chairman of the Jiangsu General Chamber of Commerce, Vice Chairman of the Suzhou
Association of Industry and Commerce, member of the 17th People’s Congress of Suzhou, and Chairman of the Suzhou Chamber of
Commerce for New-Generation Entrepreneurs (directly under the jurisdiction of the Suzhou Association of Industry and Commerce).
Mr. YUAN Yongfeng: a PRC citizen, bachelor’s degree, one of controlling shareholders and actual controllers of the Company. He
has served as the Director of the Manufacturing Department and Supervisor of the Company since October 1998, and is now director
and General Manager of the Company, Chairman of the Yancheng Electronic Information Industry Association, and member of the 5th
CPPCC Wuzhong District Committee of Suzhou.
Mr. ZHAO Xiutian: a U.S. citizen, master’s degree. He has served in Feichuang, Hughes Network Systems, MCE, Celiant and Andrew,
and is now Vice Chairman of the Company.
Mr. SHAN Jianbin: a PRC citizen, bachelor’s degree. He has served in Mektec Manufacturing Corporation (Zhuhai) Ltd., and is now
director and Executive President of the Company, and Vice Chairman of the Executive Council of the China Printed Circuit Association.
Ms. MAO Xiaoyan: a PRC citizen, master’s degree, economist. She has served in Suzhou Huacheng Auto Car Trade Group Company
Limited and Jiangsu Wuzhong Industrial Co., Ltd., and is now director, Deputy General Manager and Board Secretary of the Company.
Mr. WANG Xu: a PRC citizen, master’s degree, certified public accountant (non-practitioner). He has served in Kunshan Fengrui
United Accounting Firm and Suzhou Good-ark Electronics Co., Ltd., and is now Director, Deputy General Manager and CFO of the
Company, part-time tutor for postgraduates in accounting of the Soochow University Dongwu Business School, and part-time career
development tutor of the Renmin University of China Suzhou Campus.
Mr. WANG Zhangzhong: a PRC citizen, master’s degree. He has served in the Nanjing Institute of Technology School of Materials
Science and Engineering as teacher, office director, secretary of the Party committee, chief of the division of science and technology,
dean and professor since August 1983, and is now independent director of the Company, Director of the Nanjing Institute of Technology
Institute of New Material Technology, Director of the Jiangsu Key Laboratory of Advanced Structural Materials and Application
Technology, member of the Executive Council of the China Heat Treatment Association, Chairman of the Executive Council of the
Industrial Furnace Branch of Jiangsu Mechanical Engineering Society, and Vice Chairman of the New Metal Materials Branch of
Jiangsu Metallurgical Industry Association.
Mr. SONG Liguo: a Hong Kong citizen, doctoral degree. He has served in CITIC Securities Tianjin Business Department, the Tianjin
Equity Exchange, Anhui Antai Law Firm, China Baoan Group, Hong Kong Heng Feng Group International Investment Limited, CHAN
& Co., ARTHUR K.H. and Denton Wilde Sapte (Hong Kong), and is now independent director of the Company, counsel of Jones Day
International Law Firm (Hong Kong), visiting associate professor of the Anhui University Law School, and arbitrator of the China
International Economic and Trade Arbitration Commission, the Cross-Straits Arbitration Center, and the Xiamen Arbitration
Commission.
Mr. GAO Yongru: a PRC citizen, doctoral degree, senior accountant. He has served in Panda Electronic Group, Jiangsu Jinling
Accounting Firm, the Nanjing Municipal Bureau of Labor, Huatai Securities Co., Ltd., Nanjing Transportation Holding Co., Ltd.,
Yincheng Properties Group Co., Ltd., Jiangsu Shengkun Asset Management Co., Ltd., Jiangsu Xinsheng Investment Management Co.,
32
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Ltd., Shenwu Energy Saving Co., Ltd. and Hefei Genius Advanced Material Co., Ltd., and is now independent director of the Company,
Deputy General Manager of Yongtuo Certified Public Accountants LLP Jiangsu Office, independent director of Jiangsu Binhai Rural
Commercial Bank Co., Ltd., director of Jinling Resort Nanjing Co., Ltd., independent director of Guangzhou Haozhi Industrial Co.,
Ltd., independent director of Nanjing CompTech Composites Corp., independent director of Jiangsu Sunlant Bioengineering Co., Ltd. ,
director of Jiangsu Limin Paper Co., Ltd., supervisor of Jiangsu Xinruide System Integration Engineering Co., Ltd., supervisor of Wuxi
Jin Zhang Fang Technology Co., Ltd., director of Nanjing Borun Neuromorphic Technology Co., Ltd., CFO of Nanjing Borun Brain
Intelligent Technology Co., Ltd., part-time tutor for postgraduates in accounting of the Nanjing University of Information Science &
Technology, and part-time tutor for postgraduates in accounting of the Shenyang University.
(2) Members of the Board of Supervisors
Mr. MA Liqiang: a PRC citizen, bachelor’s degree. He has served in Suzhou Dayin Electronic Telecommunications Equipment Co.,
Ltd., Suzhou Jinhuasheng Paper Co., Ltd. and Dongshan Optronics (Suzhou) Co., Ltd., and is now Chairman of the Board of
Supervisors of the Company, and COO, President of China Region, and President of Touch & Display Business Unit of Multek.
Mr. JI Yachun: a PRC citizen, born in March 1978, bachelor’s degree. He has served in the Central Committee of the Communist
Youth League of China, and is now employee representative supervisor and Public Relations President (Yancheng) of the Company,
Secretary of the Party Committee and Chairman of the Management Committee of the Yancheng Dongshan Precision Industrial Park,
and representative of the 14th People’s Congress of Jiangsu Province.
Mr. HUANG Yongxin: a PRC citizen, bachelor’s degree. He has served in Everlight Electronics (China) Co., Ltd., and is now employee
representative supervisor of the Company, and General Manager of Yancheng Dongshan Precision Manufacturing Co., Ltd.
(3) Senior officers
The resume of Mr. YUAN Yongfeng (General Manager), Mr. SHAN Jianbin (Executive President), Ms. MAO Xiaoyan (Deputy
General Manager and Board Secretary) and Mr. WANG Xu (Deputy General Manager and CFO) are set forth in “Members of Board
of Directors” above.
Positions held in shareholders:
□ Applicable N/A
Positions held in other entities:
Applicable □ N/A
Name Entity Position
YUAN Yonggang Suzhou Toprun Electric Equipment Co., Ltd. Director
YUAN Yonggang Suzhou Dongyang Investment Co., Ltd. Supervisor
YUAN Yonggang Anhui Landun Photoelectron Co., Ltd. Chairman
YUAN Yonggang Shanghai Corkuna New Material Technologies Co., Ltd. Chairman
YUAN Yonggang Jingbaiyue Investment Development (Suzhou) Co., Ltd. Executive Director
YUAN Yonggang Shenzhen National Star Vision Technology Co., Ltd. Director
YUAN Yonggang Suzhou Dongding Tea Shop Co., Ltd. Supervisor
YUAN Yonggang Shanghai Xinhuarui Semiconductor Technology Co., Ltd. Director
YUAN Yonggang Jiangsu Xinhuarui Semiconductor Technology Co., Ltd. Director
YUAN Yonggang Ningbo Qixiang Information Technology Co., Ltd. Director
YUAN Yonggang Brave Pioneer International Limited Executive Director
YUAN Yonggang Hong Kong Dongshan Investment Holdings Co., Ltd. Executive Director
YUAN Yonggang Fujian Nanping Nanfu Battery Co., Ltd. Director
YUAN Yonggang Shanghai Fu Shan Precision Manufacturing Co., Ltd. Vice Chairman
YUAN Yonggang Jiangsu General Chamber of Commerce Vice Chairman
YUAN Yonggang Suzhou Association of Industry and Commerce Vice Chairman
YUAN Yonggang Suzhou Chamber of Commerce for New-Generation Entrepreneurs Chairman
YUAN Yongfeng Suzhou Dongyang Investment Co., Ltd. Executive Director
YUAN Yongfeng Shanghai Fu Shan Precision Manufacturing Co., Ltd. Director
YUAN Yongfeng Suzhou Toprun Electric Equipment Co., Ltd. Director
33
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
YUAN Yongfeng Yancheng Electronic Information Industry Association Chairman
YUAN Yongfeng CPPCC Wuzhong District Committee of Suzhou Member
ZHAO Xiutian Suzhou Langsheng Communication Technology Co., Ltd. Director
SHAN Jianbin China Printed Circuit Association Vice Chairman of the Executive Council
MAO Xiaoyan Shanghai Dotwil Intelligence Technology Ltd. Director
Part-time tutor for postgraduates in
WANG Xu Soochow University Dongwu Business School
accounting
WANG Xu Renmin University of China Suzhou Campus Part-time career development tutor
WANG
Nanjing Institute of Technology Institute of New Material Technology Dean
Zhangzhong
WANG
Nanjing Institute of Technology School of Materials Science and Engineering Professor
Zhangzhong
WANG Jiangsu Key Laboratory of Advanced Structural Materials and Application
Director
Zhangzhong Technology
WANG
China Heat Treatment Association Member of the Executive Council
Zhangzhong
WANG
Industrial Furnace Branch of Jiangsu Mechanical Engineering Society Chairman of the Executive Council
Zhangzhong
WANG
New Metal Materials Branch of Jiangsu Metallurgical Industry Association Vice Chairman
Zhangzhong
SONG Liguo Jones Day International Law Firm (Hong Kong) Counsel
SONG Liguo Anhui University Law School Visiting associate professor
SONG Liguo China International Economic and Trade Arbitration Commission Arbitrator
SONG Liguo Cross-Straits Arbitration Center Arbitrator
SONG Liguo Xiamen Arbitration Commission Arbitrator
GAO Yongru Yongtuo Certified Public Accountants LLP Jiangsu Office Deputy General Manager
GAO Yongru Jiangsu Binhai Rural Commercial Bank Co., Ltd. Independent director
GAO Yongru Jinling Resort Nanjing Co., Ltd Director
GAO Yongru Guangzhou Haozhi Industrial Co., Ltd. Independent director
GAO Yongru Nanjing CompTech Composites Corp. Independent director
GAO Yongru Jiangsu Sunlant Bioengineering Co., Ltd. Independent director
GAO Yongru Jiangsu Limin Paper Co., Ltd. Director
GAO Yongru Jiangsu Xinruide System Integration Engineering Co., Ltd. Supervisor
GAO Yongru Wuxi Jin Zhang Fang Technology Co., Ltd. Supervisor
GAO Yongru Nanjing Borun Neuromorphic Technology Co., Ltd. Director
GAO Yongru Nanjing Borun Brain Intelligent Technology Co., L CFO
Part-time tutor for postgraduates in
GAO Yongru Nanjing University of Information Science & Technology
accounting
Part-time tutor for postgraduates in
GAO Yongru Shenyang University
accounting
Punishments imposed by the securities regulatory authorities in the past three years on the directors, supervisors and senior officers of
the Company currently in office or leaving office during the reporting period
□ Applicable N/A
3. Remunerations of directors, supervisors and senior officers
Decision-making process, criteria for determination and actual amount in respect of remunerations of directors, supervisors and senior
officers
The remunerations of our directors, supervisors and senior officers are determined in accordance with the provisions of the Articles of
Association as follows: the amount and terms of payment of remuneration of the members of the Board of Directors and the Board of
Supervisors are determined by the general meeting; the amount and terms of payment of remuneration of the senior officers are
determined by the Board of Directors; the remunerations of the directors, supervisors and senior officers are determined based on their
respective job responsibilities, and achievement of annual performance indicators for those holding key operational positions
concurrently, or fulfillment of job responsibilities and annual tasks for those holding key managerial positions concurrently. The
remunerations paid by us to our directors, supervisors and senior officers conform to our remuneration policies and the fulfillment of
their job responsibilities.
Remunerations of directors, supervisors and senior officers paid in the reporting period
In RMB0’000
Total Whether or not
Name Title Sex Age Status remuneration receiving
received from the remunerations
34
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Company from any affiliate
(inclusive of tax) of the Company
YUAN Yonggang Chairman Male 44 Active 325 No
YUAN Yongfeng Director & General Manager Male 46 Active 325 No
ZHAO Xiutian Vice Chairman Male 60 Active 410 No
Director & Executive
SHAN Jianbin Male 47 Active 376.6 No
President
Director, Deputy General
MAO Xiaoyan Female 43 Active 144.52 No
Manager & Board Secretary
Director, Deputy General
WANG Xu Male 41 Active 199.18 No
Manager & CFO
WANG Zhangzhong Independent director Male 60 Active 12 No
SONG Liguo Independent director Male 59 Active 12 No
LIN Shu Independent director Male 45 Resigned 3 No
GAO Yongru Independent director Male 55 Active 10 No
Chairman of the Board of
MA Liqiang Male 42 Active 240 No
Supervisors
Employee representative
JI Yachun Male 45 Active 145.65 No
supervisor
Employee representative
HUANG Yongxin Male 37 Active 160 No
supervisor
Total -- -- -- -- 2,362.95 --
VI. Performance of Duties by the Directors during the Reporting Period
1. Meetings of the Board of Directors held during the reporting period
Session Date of meeting Disclosure date Resolution of the meeting
T he 18 th meeting of the 5 th Announcement of the resolutions of the 18th meeting of the 5 th Board of
January 21, 2022 January 25, 2022
Board of Directors Directors (Announcement No.: 2022-002)
T he 19 th meeting of the 5 th Announcement of the resolutions of the 19th meeting of the 5 th Board of
February 17, 2022 February 19, 2022
Board of Directors Directors (Announcement No.: 2022-008)
T he 20 th meeting of the 5 th Announcement of the resolutions of the 20th meeting of the 5 th Board of
April 19, 2022 April 20, 2022
Board of Directors Directors (Announcement No.: 2022-023)
T he 21 st meeting of the 5 th
April 21, 2022 April 22, 2022 T he first quarter report of 2022 was approved.
Board of Directors
T he 22 nd meeting of the 5 th Announcement of the resolutions of the 22nd meeting of the 5 th Board of
April 25, 2022 April 26, 2022
Board of Directors Directors (Announcement No.: 2022-035)
T he 23 rd meeting of the 5 th Announcement of the resolutions of the 23rd meeting of the 5 th Board of
June 13, 2022 June 14, 2022
Board of Directors Directors (Announcement No.: 2022-048)
T he 24 th meeting of the 5 th Announcement of the resolutions of the 24th meeting of the 5 th Board of
August 17, 2022 August 18, 2022
Board of Directors Directors (Announcement No.: 2022-059)
T he 25 th meeting of the 5 th Announcement of the resolutions of the 25th meeting of the 5 th Board of
August 21, 2022 August 23, 2022
Board of Directors Directors (Announcement No.: 2022-063)
T he 26 th meeting of the 5 th Announcement of the resolutions of the 26th meeting of the 5 th Board of
October 14, 2022 October 15, 2022
Board of Directors Directors (Announcement No.: 2022-072)
T he 27 th meeting of the 5 th
October 24, 2022 October 25, 2022 T he third quarter report of 2022 was approved.
Board of Directors
T he 28 th meeting of the 5 th Announcement of the resolutions of the 28th meeting of the 5 th Board of
October 27, 2022 October 29, 2022
Board of Directors Directors (Announcement No.: 2022-076)
T he 29 th meeting of the 5 th Announcement of the resolutions of the 29th meeting of the 5 th Board of
December 21, 2022 December 22, 2022
Board of Directors Directors (Announcement No.: 2022-085)
T he 30 th meeting of the 5 th Announcement of the resolutions of the 30th meeting of the 5 th Board of
December 30, 2022 December 31, 2022
Board of Directors Directors (Announcement No.: 2022-088)
2. Attendance of the directors at meetings of the Board of Directors and shareholders
Attendance of the directors at meetings of the Board of Directors and shareholders
No. of board No. of board Whether or not having
No. of board No. of board No. of board
meetings attended meetings present been absent from two No. of general
Director meetings present meetings present meetings absent
during the by means of consecutive board meeting attended
in person by proxy from
reporting period communication meetings
YUAN Yonggang 13 2 11 No 3
YUAN Yongfeng 13 2 11 No 3
ZHAO Xiutian 13 13 No 3
SHAN Jianbin 13 2 11 No 3
MAO Xiaoyan 13 2 11 No 3
WANG Xu 13 2 11 No 3
WANG
13 13 No 3
Zhangzhong
SONG Liguo 13 13 No 3
GAO Yongru 11 11 No 3
LIN Shu 2 2 No 1
Reason for absence from two consecutive board meetings: None.
35
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
3. Objections raised by the directors regarding matters of the Company
Whether any director has raised any objection regarding matters of the Company?
□ Yes No
No director has raised any objection regarding matters of the Company during the reporting period.
4. Other information regarding the performance of duties by the directors
Whether the suggestions put forward by the directors have been adopted by the Company?
Yes □ No
Explanation about the adoption or rejection by the Company of the suggestions put forward by the directors:
During the reporting period, our directors have performed their duties and overseen our operation in strict accordance with the
applicable laws and regulations and the Articles of Association. All professional advice put forward by our directors have been adopted,
which have actively promoted the improvement of our supervisory mechanisms and scientificity of decisions, among others.
VII. Activities of the Committees of the Board of Directors during the Reporting Period
No. of Important
Performance
Committee Members meetings Date of meeting Subject opinions and
of other duties
held suggestions
Considered the Summary of Internal Audit in 2021 and the
Working Plan 2022, the Annual Report 2021 and Summary T he Audit
of the Report, the Annual Financial Report 2021 of the Committee has
Company, the 2021 Profit Distribution Proposal of the T he relevant actively
Company, the Proposal Regarding Re-engagement of the proposals communicated
GAO Yongru (LIN
Auditor for 2022, the 2021 Self-assessment Report on were with the
Shu before March 8,
Internal Controls, the 2021 Special Report on the Deposit approved and auditor of our
Audit Committee 2022), WANG 4 April 19, 2022
and Use of Offering Proceeds of the Company, the Proposal submitted to annual report,
Zhangzhong and
Regarding Application for Facilities from Banks and other the Board of to effectively
SHAN Jianbin
Financial Institutions in 2022 of the Company, the Proposal Directors for supervise the
Regarding Provision of Guarantee by the Company for the consideration. conduct of
Financing Obtained by its Subsidiaries from Banks and other annual audit of
Financial Institutions, and the Proposal Regarding Changes the Company.
in Accounting Policies.
Considered the Proposal Regarding Change in the Use of
Part of the Offering Proceeds, and the Proposal Regarding
February 17, 2022
the T ermination of Spin-off of the Controlled Subsidiary for
Listing on the ST AR Market.
Considered the Proposal Regarding Application for
Facilities from Banks and other Financial Institutions in
2022 of the Company, the Proposal Regarding Provision of
April 19, 2022 Guarantee by the Company for the Financing Obtained by its
Subsidiaries from Banks and other Financial Institutions, and
T he relevant
YUAN Yonggang, the Proposal Regarding the T hree-year Plan for Return to
proposals
WANG Zhangzhong, Shareholders (2022-2024).
were
SONG Liguo, GAO Considered the Proposal Regarding Repurchase of the
April 25, 2022 approved and
Strategy Committee Yongru (LIN Shu 6 Company’s Shares. --
submitted to
before March 8, Considered the Proposal Regarding Additional Capital
the Board of
2022) and SHAN Contribution to Suzhou RF T op Electronic Communication
August 17, 2022 Directors for
Jianbin Co., Ltd., and the Proposal Regarding Additional Investment
consideration.
in the Mexico Subsidiary.
Considered the Proposal Regarding Acquisition of 100%
October 27, 2022
Shares of Suzhou JDI Electronics Inc.
Considered the Proposal Regarding the Progress of
Acquisition of 100% Shares of Suzhou JDI Electronics Inc.,
the Proposal Regarding Foreign Exchange Hedging, the
December 30, 2022
Feasibility Report on Foreign Exchange Hedging, the
Proposal Regarding Commodity Future Hedging, and the
Feasibility Report on Commodity Future Hedging.
T he relevant
WANG Zhangzhong,
proposal was
SONG Liguo, LIN
approved and
Nomination Shu (resigned), Considered the Proposal Regarding the Independent Director
1 February 17, 2022 submitted to --
Committee YUAN Yonggang Candidate for the 5 th Board of Directors.
the Board of
and YUAN
Directors for
Yongfeng
consideration.
SONG Liguo, Considered the Proposal Regarding the 2022 Stock T he relevant
WANG Zhangzhong, Ownership Plan for Key Officers and T echnical Personnel proposals
Remuneration and
GAO Yongru (LIN 3 February 17, 2022 (Draft) and its Summary, the Proposal Regarding the were --
Appraisal Committee
Shu before March 8, Administrative Measures for the 2022 Stock Ownership Plan approved and
2022), YUAN for Key Officers and T echnical Personnel, and the Proposal submitted to
36
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Yonggang and to Request the General Meeting to Authorize the Board of the Board of
YUAN Yongfeng Directors to Handle the Matters Related to the Employee Directors for
Stock Ownership Plan. consideration.
Considered the Proposal Regarding the Remunerations of
April 19, 2022
the Directors and Senior Officers of the Company in 2022.
Considered the Proposal Regarding the 2022 Second
Employee Stock Ownership Plan (Draft) and its Summary,
October 14, 2022
the Proposal Regarding the Administrative Measures for the
2022 Second Employee Stock Ownership Plan.
VIII. Activities of the Board of Supervisors
Whether the Board of Supervisors has identified any risk involving the Company in its supervisory activities during the reporting
period?
□ Yes No
The Board of Supervisors has not raised any objection to the supervisory matters during the reporting period.
IX. Employees
1. Number, structure of profession and education of employees
Number of current employees of the parent at the end of the
1,932
reporting period (person)
Number of current employees of the major subsidiaries at the
18,694
end of the reporting period (person)
Total number of current employees at the end of the reporting
21,021
period (person)
Total number of salaried employees during the reporting period
21,021
(person)
Total number of resigned employees to or for whom the parent
and the major subsidiaries are obligated to make payments 0
(person)
Structure of profession
Categories of profession Number of employees (person)
Production staff 14,941
Sales staff 399
Technical staff 3,944
Financial staff 128
Administrative staff 362
Management staff 1,247
Total 21,021
Education
Degree of education Number of employees (person)
Doctor 4
Master 134
Undergraduate 2,287
College 4,315
Below college 14,281
Total 21,021
2. Remuneration policies
We advocate creation of values, and give priority to high-performance teams and individuals in remuneration and incentives. We have
developed sound remuneration and incentive polices, which are designed to attract and retain outstanding technical and management
talents with competitive remuneration, and give long-acting incentives to our employees through the combination of short-, medium-
and long-term incentives taking into account our overall operating results and the employees’ performance, in order to enhance our
core competencies.
37
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
3. Training programs
We actively introduce, seek and train talents, and make efforts to build an efficient and systemic talent training system, to continuously
improve our employees’ comprehensive capabilities; conduct job-specific training in various forms centered on the training of
management and professional talents and building of talent pools, to improve our employees’ professional quality, skills and
management capabilities; actively provide our employees with learning and growth opportunities, encourage them to strive for progress,
and build talent pools, to help the achievement of our strategic objectives.
4. Outsourced workers
□ Applicable N/A
X. Profit Distribution and Transfer of Capital Reserve to the Share Capital
Establishment, implementation or adjustment of profit distribution policy, in particular, cash dividend policy, during the reporting
period
Applicable □ N/A
We attach great importance to the return to our shareholders. In order to maintain a continuous and stable profit distribution policy,
pursuant to the Regulatory Guidance for Listed Companies No. 3 –Distribution of Cash Dividends by the Listed Companies, the
Articles of Association and other relevant provisions, we have developed the Three-year Plan for Return to Shareholders (2022-2024),
which sets forth the specific principles and plans for return to shareholders. During the reporting period, we developed the 2022 Profit
Distribution Proposal taking into account of our actual business situations and development plans, and needs to ensure normal business
operation and long-term development.
Special explanation about the cash dividend policy
Whether or not comply with the provisions of the articles of association or requirements of
Yes
resolutions of the general meeting of the Company?
Whether the standard and ratio of cash dividend distribution are clear and definite? Yes
Whether the relevant decision-making process and mechanism are sound? Yes
Whether the independent directors have performed their duties and exercised their
Yes
functions?
Whether the minority shareholders have sufficient opportunities to express their opinions
Yes
and requests and their legitimate rights and interests are fully protected?
Whether the conditions and procedures in respect of any adjustment or amendment of the
Yes
cash dividend policy comply with the applicable regulations and are transparent?
Whether the Company has made a profit in the reporting period and the parent has profits available for distribution to the shareholders,
but the Company does not propose to distribute cash dividends?
□ Applicable N/A
Particulars of profit distribution and transfer of capital reserve to the share capital for the reporting period:
Applicable □ N/A
Number of bonus shares per 10 shares (share) 0
Amount of cash dividends per 10 shares (RMB) (inclusive of tax) 1.1
Share capital based on which the distribution proposal was made
1,702,865,009
(share)
Amount of cash dividends (RMB) (inclusive of tax) 187,315,150.99
Amount of cash dividends distributed in other ways (such as share
49,990,856.17
repurchase) (RMB)
Total amount of cash dividends (including other ways) (RMB) 237,306,007.16
Distributable profit (RMB) 224,481,653.09
Ratio of total cash dividends (including other ways) to the distributable
100%
profit
38
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Particulars of cash dividends distributed for the reporting period
If we are at the growth stage and have certain material capital expenditure arrangements, at least 20% of the distributable profit will
be distributed in cash.
Particulars of the proposal of profit distribution or for transfer of capital reserve to share capital
Our 2022 Profit Distribution Proposal is as follows: to distribute to all shareholders a cash dividend of RMB1.10 (inclusive of tax)
per 10 shares on the basis of the total share capital of 1,702,865,009 shares (excluding treasury shares), or RMB187,315,150.99 in
total, without distribution of any bonus shares or transfer of any capital reserve to the share capital. The 2022 Profit Distribution
Proposal is subject to approval by the general meeting. (Note: As of the date of this Report, we had a total share capital of
1,709,867,327 shares, of which, 7,002,318 shares held in the special securities account for repurchase will not participate in the
profit distribution.)
XI. Share Incentives Plans, Employee Stock Ownership Plans or Other Employee Incentives
Applicable □ N/A
1. Share incentives
We have not granted any share incentive during the reporting period.
Share incentives granted to directors and senior officers:
□ Applicable N/A
Performance appraisal and incentives in respect of senior officers: None.
2. Employee stock ownership plans (ESOPs)
Applicable □ N/A
Effective ESOPs in the reporting period:
% of total
No. of T otal shares
Scope of employees Changes share Source of funds
employees held (share)
capital
Certain directors, supervisors and senior officers of the Company, and mid-
and high-level officers and key employees at the level of director or above
who do full-time jobs for, receive remuneration from and have valid 119 21,914,118 None 1.28%
employment contracts with the Company or its controlled subsidiaries (2021
ESOP) 1 Legal remuneration of the employees,
Certain key officers and technical personnel of the Company or its controlled self-raised funds or otherwise permitted
subsidiaries, excluding directors, supervisors and senior officers of the 308 1,366,120 None 0.08% by the applicable laws and
Company (2022 ESOP for key officers and technical personnel)2 administrative regulations
Certain employees who do full-time jobs for, receive remuneration from and
have valid employment contracts with the Company or its controlled
366 4,847,178 None 0.28%
subsidiaries, excluding directors, supervisors and senior officers of the
Company (2022 second ESOP) 3
Note: 1. As of the date of this Report, the shares held under the 2021 ESOP have been sold and the 2021 ESOP has terminated.
2. T he lock-up period for the 2022 ESOP for key officers and technical personnel expired on March 17, 2023, upon which, the first installment of shares, representing 50% of the total
shares granted thereunder were vested.
3. As of the date of this Report, the lock-up period for the 2022 second ESOP has not yet commenced.
Shares held by the directors, supervisors and senior officers under the ESOPs during the reporting period:
Opening balance of the Closing balance of the number
Name T itle % of total share capital
number of shares held of shares held
SHAN Jianbin Director & Executive President 1,753,128 1,753,128 0.10%
WANG Xu Director, Deputy General Manager & CFO 1,314,846 1,314,846 0.08%
Director, Deputy General Manager & Board
MAO Xiaoyan 525,938 525,938 0.03%
Secretary
MA Liqiang Chairman of the Board of Supervisors 525,938 525,938 0.03%
JI Yachun Supervisor 525,938 525,938 0.03%
HUANG Yongxin Supervisor 525,938 525,938 0.03%
Changes in asset manager during the reporting period
□ Applicable N/A
39
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Changes in equity due to disposal of shares by the holders or otherwise during the reporting period
□ Applicable N/A
Exercise of shareholder rights during the reporting period: None.
Other information related to the ESOPs during the reporting period and the relevant explanation
□ Applicable N/A
Changes in the members of the ESOP management committee during the reporting period
□ Applicable N/A
The financial effect of the ESOPs on the listed company during the reporting period and the relevant accounting treatment
□ Applicable N/A
Termination of the ESOPs during the reporting period
□ Applicable N/A
Other information: During the reporting period, our directors, supervisors and senior officers only held shares under the 2021 ESOP,
and did not participate in any other ESOP.
3. Other employee incentives
□ Applicable N/A
XII. Establishment and Implementation of Internal Controls during the Reporting Period
1. Establishment and implementation of internal controls
Pursuant to the requirements of the Company Law, the Basic Internal Control Standards for Enterprises and the relevant
guidelines, we have established a sound internal control system according to our actual situations and needs of
management. During the reporting period, we have continuously improved the internal control system, carried out internal
control self-assessment, and identified deficiencies in internal control, risks and hazards, to further improve the
effectiveness of our internal controls .
According to the assessment of material weakness in internal control over financial reporting, as of the reference date of the assessment
report on internal controls, there’s no material weakness in our internal control over financial reporting. We have maintained effective
internal control over financial reporting in all material respects pursuant to the requirements of the Basic Internal Control
Standards for Enterprises and other relevant provisions. According to the assessment of material weakness in internal control
over non-financial reporting, as of the base day of the assessment report on internal controls, there’s no material weakness in our
internal control over non-financial reporting.
2. Material weaknesses in internal controls identified during the reporting period
□ Yes No
XIII. Management and Control of Subsidiaries during the Reporting Period
Problems
Progress of encountered Progress of Subsequent
Subsidiary Integration plan Actions taken
integration during resolution solutions
integration
40
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
N/A N/A N/A N/A N/A N/A N/A
XIV. Self-assessment Report on Internal Controls or Auditor’s Report on Internal Controls
1. Self-assessment report on internal controls
Disclosure date of the full copy of the
April 21, 2023
self-assessment report on internal controls
Disclosure reference of the full copy of
the self-assessment report on internal http://www.cninfo.com.cn
controls
Ratio of total assets of the entities covered
by the assessment to total assets recorded
100.00%
in the consolidated financial statements of
the Company
Ratio of total operating revenue of the
entities covered by the assessment to total
operating revenue recorded in the 100.00%
consolidated financial statements of the
Company
Criteria for determination of deficiencies
Type Financial reporting Non-financial reporting
Indicators of material weaknesses in
internal control over financial reporting
include: (i) any fraud on the part of
directors, supervisors and senior officers
of the Company; (ii) any correction of a
financial report already disclosed; (iii)
any material misstatement in the financial
report for the current period that was
found by the public certified accountants
but failed to be identified through internal
Indicators of material weaknesses in
controls; and (iv) ineffective supervision
internal control over non-financial
by the Audit Committee and the Internal
reporting include:
Audit Department of the Company over
(i) any violation of the applicable laws,
the financial reports disclosed externally
regulations or normative documents of
or internal control over financial
the country; (ii) unscientific procedure in
reporting. Indicators of significant
making any major decision; (iii) absence
deficiencies in internal control over
of any regulations which may result in
financial reporting include: (i) failure to
Qualitative criteria systemic failure; (iv) failure to rectify any
correctly select and apply accounting
material weakness or significant
policies pursuant to the generally
deficiency; and (v) any other
accepted accounting principles; (ii)
circumstance that has a material adverse
failure to establish anti-fraud procedures
effect on the Company. Other deficiencies
and controls; (iii) failure to establish or
are classified into significant or general
implement controls over the accounting
deficiency depending on the degree of
treatment of extraordinary or special
effect.
transactions, and failure to establish
corresponding compensatory controls;
and (iv) one or more deficiencies existing
in control over the preparation of financial
report at the end of period, and inability to
reasonably ensure the truthfulness and
completeness of the financial statements.
General deficiencies in internal control
over financial reporting include
deficiencies in control other than material
weakness and significant deficiency.
Material weakness: amount of
misstatement ≥ 0.5% of the operating
revenue; significant deficiency: 0.3% of Material weakness: direct loss > 0.5% of
the operating revenue ≤ amount of the total assets; significant deficiency:
Quantitative criteria 0.2% of the total asset < direct loss ≤ 0.5%
misstatement ＜ 0.5% of the operating
of the total asset; general deficiency:
revenue; general deficiency: amount of
direct loss ≤ 0.2% of the total asset.
misstatement ＜ 0.3% of the operating
revenue.
41
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Number of material weaknesses in
0
financial reporting
Number of material weaknesses in non-
0
financial reporting
Number of significant deficiencies in
0
financial reporting
Number of significant deficiencies in
0
non-financial reporting
2. Auditor’s report on internal controls
Applicable □ N/A
Auditor’s opinion expressed in the auditor’s report on internal controls
In our opinion, DSBJ has maintained effective internal control over financial reporting in all material respects as of December 31,
2022 in accordance with the Guide on Self-regulatory Supervision for Companies Listed on the Shenzhen Stock Exchange No. 1 –
Code of Operations for Companies Listed on the Main Board (Shen Zheng Shang [2022] No. 13).
Disclosure of the auditor’s report on internal controls Disclosed
Disclosure date of the full copy of the auditor’s report on internal
April 21, 2023
controls
Disclosure reference of the full copy of the auditor’s report on
http://www.cninfo.com.cn
internal controls
Type of opinion expressed in the auditor’s report on internal
Standard unqualified opinion
controls
Whether there’s any material weakness in non-financial
No
reporting
Whether the accounting firm issued a modified auditor’s report on internal controls?
□ Yes No
Whether the auditor’s report on internal controls issued by the accounting firm is consistent with the opinion expressed in the self-
assessment report of the Board of Directors?
Yes □ No
XV. Rectification of Non-Compliances Found in the Special Self-Examination of the Corporate
Governance of the Listed Company
N/A
42
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Section V Environmental and Social Responsibilities
I. Material Environmental Issues
Whether the listed company and its subsidiaries have been identified as major polluters by the environmental protection authorities?
Yes □ No
Policies and industrial standards related to environmental protection:
During the reporting period, we and our subsidiaries identified as major polluters have strictly complied with the Environmental
Protection Law of the People’s Republic of China, the Law of the People’s Republic of China on Prevention and Control of Atmospheric
Pollution, the Law of the People’s Republic of China on Prevention and Control of Water Pollution, the Law of the People’s Republic
of China on Prevention and Control of Environmental Pollution by Solid Wastes, the Law of the People’s Republic of China on
Prevention and Control of Noise Pollution, the Law of the People’s Republic of China on Prevention and Control of Soil Pollution, the
Law of the People’s Republic of China on Environmental Impact Assessment, the Work Safety Law of the People’s Republic of China,
the Fire Protection Law of the People’s Republic of China and other laws and regulations related to environmental protection, and
implemented the Emission Standard for Odor Pollutants (GB14554-93), the Integrated Emission Standard for Air Pollutants
(DB32/4041-2021), the Emission Standard of Air Pollutants for Boilers (GB13271-2014), the Emission Standard of Air Pollutants for
Industrial Furnaces and Kilns (DB32/3728-2020), the Standard for Pollution Control on Hazardous Waste Storage (GB18597-2001),
the Emission Standard for Pollutants from Electroplating (GB21900-2008), the Emission Standard for Industrial Enterprises Noise at
Boundary (GB12348-2008), the Standard for Fugitive Emission of Volatile Organic Compounds (GB37822-2019), the Discharge
Standard of Water Pollutants for Electronic Industry (GB39731-2020), the Integrated Wastewater Discharge Standard (GB8978-1996),
the Wastewater Quality Standards for Discharge to Municipal Sewers (GB/T31962-2015), the Standard for Pollution Control on the
Non-Hazardous Industrial Solid Waste Storage and Landfill (GB18599-2020) and other national and industrial standards related to
environmental protection.
Environmental Permits
Environmental permits held by us and our subsidiaries identified as major polluters during the reporting period:
Company name No. Validity period
Multek Electronics 91440400617482388X001W From July 5, 2022 to July 4, 2027
Multek Technologies (Zhuhai) Co., Ltd. (“Multek From November 28, 2022 to November 27,
914404007718663989001X
Technologies”) 2027
Multek Industries 91440400714732019J001W From October 13, 2022 to October 12, 2027
Multek Zhuhai 9144040061749918XX001Y From April 12, 2022 to April 11, 2027
From December 20, 2021 to December 19,
Multek China 914404006182559377001W
2026
Suzhou Chengjia Precision Manufacturing Co., Ltd. (“Suzhou
913205065754151948001X From April 8, 2020 to April 7, 2025
Chengjia”)
From December 14, 2022 to December 13,
Yongchuang Tech 9132050675271409XG001U
2027
From December 31, 2022 to December 31,
Yancheng Dongshan 91320903MA1P7PG85D001X
2023
MFLEX Yancheng 91320903MA1P7PLE6D001T From June 24 ,2020 to June 23, 2023
MFLEX Suzhou 91320500738277671B001V From February 22, 2022 to February 21, 2027
MFLEX Suzhou 91320500738277671B002U From January 31, 2022 to January 30, 2027
Industrial discharge standards and the pollutants discharged in our production and operating activities:
Category
Description
of main Applicable
Name of of main No. of Location of Approved
pollutants Method of Pollutant pollutant Total amount Excessive
company or pollutants discharge discharge total amount
and discharge concentration discharge discharged discharge
subsidiary and specific outlets outlets dischargeable
specific standard
pollutants
pollutants
Multek Waste COD Continuous 1 Within 13.05mg/L 160mg/L 35.948t 242.36t No
43
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Industries, water from discharge factory
Multek general boundary
Electronics discharge
and Multek outlet
Technologies
Multek
Waste
Industries,
water from Within
Multek Ammonia Continuous
general 1 factory 0.95 mg/L 30mg/L 1.225t 45.44t No
Electronics nitrogen discharge
discharge boundary
and Multek
outlet
Technologies
Multek
Waste
Industries,
water from Within
Multek Total Continuous
general 1 factory 9.26 mg/L 40mg/L 20.975t 60.59t No
Electronics nitrogen discharge
discharge boundary
and Multek
outlet
Technologies
Multek Waste
Industries, water from
Within
Multek Class I Intermittent
T otal nickel 1 factory 0.1 mg/L 0.5mg/L 0.001t 0.055t No
Electronics waste discharge
boundary
and Multek discharge
Technologies outlet
Waste
water from Within
Continuous
Multek Zhuhai general COD 1 factory 15.34mg/L 160mg/L 3.997t 33.643t No
discharge
discharge boundary
outlet
Waste
water from Within
Ammonia Continuous
Multek Zhuhai general 1 factory 2.35 mg/L 30mg/L 0.534t 6.308t No
nitrogen discharge
discharge boundary
outlet
Waste
water from Within
Total Continuous
Multek Zhuhai general 1 factory 6.18 mg/L 40mg/L 1.59t 28.6748t No
nitrogen discharge
discharge boundary
outlet
Waste
water from
Within
Class I Intermittent
Multek Zhuhai T otal nickel 1 factory 0 mg/L 0.5mg/L 0t 0.358t No
waste discharge
boundary
discharge
outlet
Waste
water from Within
Continuous
Multek China general COD 1 factory 30.23mg/L 160mg/L 21.93t 216.372t No
discharge
discharge boundary
outlet
Waste
water from Within
Ammonia Continuous
Multek China general 1 factory 7.6mg/L 30mg/L 3.01t 40.5697t No
nitrogen discharge
discharge boundary
outlet
Waste
water from Within
Total Continuous
Multek China general 1 factory 14.48mg/L 40mg/L 10.17t 54.093t No
nitrogen discharge
discharge boundary
outlet
Waste
water from
Within
Class I Intermittent
Multek China T otal nickel 1 factory 0.02mg/L 0.5mg/L 0.00009t 1.3523t No
waste discharge
boundary
discharge
outlet
Waste
water from
Within
Class I Intermittent
Multek China T otal silver 1 factory 0mg/L 0.1mg/L 0t 0.270465t No
waste discharge
boundary
discharge
outlet
Southwest
Yongchuang Continuous
Waste gas Particles 1 of the 1.4mg/m 20 mg/m 8400 / No
Tech discharge
factory
Southwest
Yongchuang Nitrogen Continuous
Waste gas 1 of the 1.5mg/m 180 mg/m 9000 / No
Tech oxide discharge
factory
Southwest
Yongchuang Sulfur Continuous
Waste gas 1 of the 1.5mg/m 80 mg/m 9000 / No
Tech dioxide discharge
factory
East of roof
Suzhou Organized
Waste gas NmHc 1 of factory 2 mg/m3 120 mg/m3 0.024 0.18 No
Chengjia discharge
buildings
General
waste water
Yancheng Waste Indirect discharge
COD 1 83mg/L 500mg/L 19.747526t 188.745t No
Dongshan water discharge outlet at
southeast of
the factory
General
Yancheng Waste Ammonia Indirect
1 waste water 10mg/L 35mg/L 2.37924t 11.91t No
Dongshan water nitrogen discharge
discharge
44
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
outlet at
southeast of
the factory
General
waste water
Yancheng Waste Indirect discharge
T otal nickel 1 0.005mg/L 0.5mg/L 0.001189615t 0.0057t No
Dongshan water discharge outlet at
southeast of
the factory
Yancheng Hydrogen Organized Roof of
Waste gas 2 1.36mg/m 30mg/m 0.0627t 0.412t No
Dongshan chloride discharge building 5#
Roof of
Yancheng Hydrogen Organized
Waste gas 4 buildings 0.09mg/m 0.5mg/m 0.0054t 0.059t No
Dongshan cyanide discharge
5# and 28#
MFLEX Waste Total Indirect East of the
1 8.1 40 75.42t 4.66t No
Yancheng water nitrogen discharge factory
MFLEX Waste Ammonia Indirect East of the
1 0.74 35 67.84t 0.35t No
Yancheng water nitrogen discharge factory
MFLEX Waste Indirect East of the
COD 1 46.84 500 756.39t 32.7t No
Yancheng water discharge factory
MFLEX Waste Indirect East of the
Copper 1 0.015 1 1.02t 0.02t No
Yancheng water discharge factory
MFLEX Waste T otal Indirect East of the
1 1.5 3.5 6.94t 1.2t No
Yancheng water phosphorus discharge factory
MFLEX Waste Indirect East of the
Nickel 1 0.02 1 0.07t 0.03t No
Yancheng water discharge factory
MFLEX Waste T otal Indirect East of the
1 0.001 0.3 0.17t 0.0014t No
Yancheng water cyanides discharge factory
Discharge Roof of
MFLEX
Waste gas VOCs after 3 factory 0.115 50 19.352t 5.688t No
Yancheng
treatment buildings
Discharge Roof of
MFLEX T in and its
Waste gas after 3 factory 0.001 8.5 0.4t 0.0059t No
Yancheng compounds
treatment buildings
Discharge Roof of
MFLEX
Waste gas NH after 1 factory 1.38 10 0.52t 0.44t No
Yancheng
treatment buildings
Discharge Roof of
MFLEX Sulfuric acid
Waste gas after 6 factory 0.1 5 1.66t 0.19t No
Yancheng mist
treatment buildings
Waste
water from Within
MFLEX Continuous
general COD 1 factory 94mg/L 500mg/L 83.374t 152.5t No
Suzhou discharge
discharge boundary
outlet
Waste
water from Within
MFLEX Ammonia Continuous
general 1 factory 1.21mg/L 25mg/L 2.254t 3.413t No
Suzhou nitrogen discharge
discharge boundary
outlet
Waste
water from Within
MFLEX Continuous
general T otal copper 1 factory 0.05mg/L 0.5mg/L 0.0167t 0.319t No
Suzhou discharge
discharge boundary
outlet
Waste
water from
Within
MFLEX Class I Continuous
T otal nickel 1 factory ND 0.1mg/L / 0.010652t No
Suzhou waste discharge
boundary
discharge
outlet
Waste
water from Within
MFLEX Continuous
general COD 1 factory 115.6 mg/L 500mg/L 15.9t 92.893t No
Suzhou discharge
discharge boundary
outlet
Waste
water from Within
MFLEX Ammonia Continuous
general 1 factory 6.44 mg/L 30mg/L 0.885t 7.963t No
Suzhou nitrogen discharge
discharge boundary
outlet
Treatment of wastes
With respect to the waste water, waste gas, solid wastes and other wastes generated during our production, we have a complete set of
pollution treatment facilities in place, which are operated and maintained by ourselves or the service providers appointed by us. We
designate special personnel to monitor the operation of equipment and discharge of pollutants, and maintain and repair the equipment
and facilities on a regular basis, to ensure the discharge and disposal of all kinds of pollutants in accordance with the applicable
standards and regulations, and minimize the environmental impact of our production. During the reporting period, our discharge of
pollutant complied with the applicable standards and regulations.
Environmental self-monitoring plans
45
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
We have developed environmental self-monitoring plans in accordance with the applicable laws and regulations, and installed
automatic monitoring equipment or appointed qualified third-party inspection institutions to monitor the waste water, waste gas, noise
and other pollutants on a regular basis. During the reporting period, the results of our environmental monitoring complied with the
applicable standards and regulations.
Environmental emergency response plans
We have developed environmental emergency response plans in accordance with the National Environmental Emergency Response
Plan, filed the same with the local environmental protection authority, and carried out exercises on a regular basis, to improve our
capability to respond to environmental emergencies, and reduce harms to the environment and impact on the society.
Expenditures on environmental governance and protection, and payment of environmental protection tax
We have made continuous investments in environmental governance and protection, regularly maintained the waste gas, waste water
and solid waste treatment and other environmental protection facilities to ensure their effective operation, and discharge of all kinds of
pollutants in conformity with the applicable standards, and promote our sustainable development.
Measures taken for reducing carbon emission during the reporting period and their effect
Applicable □ N/A
Refer to our Social Responsibility Report 2022 disclosed on www.cninfo.com.cn.
Other environment information that should be disclosed: None.
Refer to our Social Responsibility Report 2022 disclosed on www.cninfo.com.cn for other information related to environmental
protection.
II. Social Responsibility
Refer to our Social Responsibility Report 2022 disclosed on www.cninfo.com.cn.
III. Consolidating and Expanding the Result of Poverty Alleviation and Rural Revitalization
Refer to our Social Responsibility Report 2022 disclosed on www.cninfo.com.cn.
46
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Section VI Significant Matters
I. Fulfillment of Covenants
1. Covenants made by the actual controllers, shareholders, affiliates and acquirer of the Company, the
Company itself and other related parties that have been fulfilled during the reporting period or failed to be
fulfilled as at the end of the reporting period
Applicable □ N/A
Validity
Background of Type of Time of Status of
Covenantor Content of covenant period of
covenant covenant covenant fulfillment
covenant
Each of the shareholders YUAN Yonggang
and YUAN Yongfeng, as director and
senior officer of the Company, covenants
that so long as I remain a director and
senior officer of the Company, I will not As of the end of
YUAN Covenants transfer more than 25% of the total shares the reporting
Yongfeng and related to held by me in the Company each year; and April 9, Permanently period, the
YUAN restrictions on if I cease to be a director and senior officer 2010 binding covenantors
Yonggang the sale of shares of the Company, I will not transfer any have abided by
shares held by me in the Company within such covenants.
half a year, and will not transfer more than
50% of the total shares held by me in the
Company through the stock exchange
within 12 months thereafter.
Covenants
Covenants related to horizontal
related to As of the end of
YUAN competition: Each of the shareholders
horizontal the reporting
Yongfeng, YUAN Yonggang, YUAN Yongfeng and
competition, April 9, Permanently period, the
YUAN YUAN Fugen covenants that I will not,
related-party 2010 binding covenantors
Yonggang and directly or indirectly, engage in any
transactions and have abided by
YUAN Fugen business in competition with the business
occupation of such covenants.
actually conducted by the Company.
funds
Covenants related to horizontal
competition: Each of the shareholders
YUAN Yonggang, YUAN Yongfeng and
YUAN Fugen covenants that after the
completion of this material asset
restructuring, I will not, directly or through
Covenant any affiliate, participate or engage in any
relating to initial business that substantially competes or
public offering or might compete with the business of the
subsequent fund Company; and if any product
raising Covenants manufactured or business conducted by
related to any entity wholly owned, controlled or As of the end of
YUAN Fugen,
horizontal invested by me in the future competes or the reporting
YUAN
competition, might compete with the Company, at the June 11, Permanently period, the
Yongfeng and
related-party request of the Company, I will transfer all 2018 binding covenantors
YUAN
transactions and of the investment or shares held by me in have abided by
Yonggang
occupation of such entity, give priority to the Company such covenants.
funds or its wholly-owned subsidiary in the
acquisition of such investment or shares
subject to the applicable laws and
regulations, and use my best efforts to
procure that the transfer price will be
determined on an arm length’s basis; and if
I or any of my affiliates breaches any
covenant set forth above, I will indemnify
the Company and other shareholders for
the damages arising therefrom according to
law.
Covenants related to the regulation and
reduction of related-party transactions:
Covenants
Each of the shareholders YUAN
related to As of the end of
YUAN Fugen, Yonggang, YUAN Yongfeng and YUAN
horizontal the reporting
YUAN Fugen covenants that: 1. I and my affiliates
competition, June 11, Permanently period, the
Yongfeng and will avoid and reduce related-party
related-party 2018 binding covenantors
YUAN transactions with the Company to the
transactions and have abided by
Yonggang maximum extent practicable; 2. With
occupation of such covenants.
respect to the related-party transactions
funds
that are unavoidable or necessary, I will
abide by the principle of justice, fairness
47
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
and openness, enter into the relevant
agreements according to law, perform the
legal procedures pursuant to the applicable
laws, regulations, normative documents,
the Articles of Association and other
relevant provisions of the Company,
ensure that such related-party transactions
are fair, comply with the regulations, and
will not damage the legitimate rights and
interests of the Company and other
shareholders, and make the relevant
information disclosures promptly in
accordance with the requirements of the
applicable laws, regulations and normative
documents; and 3. I will exercise the
shareholder rights in strict accordance with
the Company Law and other the applicable
laws and regulations, and the relevant
provisions of the Articles of Association of
the Company, and abstain from the voting
on the related-party transactions involving
me and other entities controlled by me at
the general meeting of the Company in
accordance with the relevant provisions.
Covenant regarding the remedial measures
for the dilution of current earnings caused
by the private placement: Each of the
directors and senior officers of the
Company covenants that: 1. I will not
transfer benefits to any other entity or
individual without compensation or on
unfair terms, or otherwise damage the
interest of the Company; 2. I will exercise
self-discipline in consumption in
performing my duties; 3. I will not use the
assets of the Company to engage in any
investment or consumption activities not in
YUAN connection with my duties; 4. I will link the
Yongfeng, remuneration system adopted by the Board
As of the end of
YUAN of Directors or the Remuneration
the reporting
Yonggang, Committee with the implementation of the
October Permanently period, the
ZHAO Xiutian, Other covenants Company’s remedial measures for the
10, 2019 binding covenantors
SHAN Jianbin, dilution of current earnings; 5. if the
have abided by
WANG Xu, Company implements any share incentive
such covenants.
MAO Xiaoyan plan in the future, I will link the vesting
and MA Liqiang conditions under such share incentive plan
with the implementation of the Company’s
remedial measures for the dilution of
current earnings; and 6. I will seriously
implement the Company’s remedial
measures for the dilution of current
earnings, and abide by the relevant
covenants made by me; and if I breach any
covenant set forth above, I will indemnify
the Company and other shareholders for
the losses arising therefrom according to
law, and accept the punishments that the
competent regulatory authorities may
impose on me.
Covenant regarding the remedial measures
for the dilution of current earnings caused
by the private placement: Each of the
controlling shareholders and actual
controllers of the Company covenants that
As of the end of
YUAN Fugen, I will not interfere with the management
the reporting
YUAN and operation of the Company beyond my
October Permanently period, the
Yongfeng and Other covenants powers, or infringe on the interest of the
17, 2019 binding covenantors
YUAN Company; and as the person responsible
have abided by
Yonggang for the serious implementation of the
such covenants.
remedial measures for the dilution of
current earnings, if I breach or refuse to
fulfill any covenant set forth above, I will
assume the relevant liabilities according to
law.
Whether the
covenants have
Yes
been fulfilled on
time
If any covenant
N/A
fails to be
48
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
fulfilled on time,
please explain the
reason and the
relevant actions
to be taken in
detail
2. If the Company has made any profit forecast on its assets or project and the reporting period falls within
the period of such profit forecast, explanation about whether the goal has been achieved and the related
reasons
□ Applicable N/A
II. Occupation by the Controlling Shareholders and their Affiliates of the Funds of the
Company for Non-Operating Purpose
□ Applicable N/A
Our controlling shareholders and their affiliates have not occupied our funds for non-operating purpose during the reporting period.
III. External Guarantees in Violation of the Regulations
□ Applicable N/A
We have not provided any external guarantee in violation of the applicable regulations during the reporting period.
IV. Explanation by the Board of Directors about the Most Recent Modified Auditor’s Report
□ Applicable N/A
V. Explanation by the Board of Directors, the Board of Supervisors and the Independe nt
directors (if any) about the Modified Auditor’s Report Issued by the Accounting Firm for the
Reporting Period
□ Applicable N/A
VI. Changes in the Accounting Policies and Accounting Estimates Compared with the Financial
Report for the Preceding Year or Correction of Material Accounting Errors
Applicable □ N/A
We have adopted the changes in accounting standards set forth in Interpretation of the Accounting Standards for Business Enterprises
No. 15 (issued on December 30, 2021) and the Interpretation of the Accounting Standards for Business Enterprises No. 16 (issued on
November 30, 2022), and continued to adopt the Accounting Standards for Business Enterprises – Basic Standard, and the specific
accounting standards, the Guidance on the Application of the Accounting Standards for Business Enterprises, interpretations of the
Accounting Standards for Business Enterprises and other relevant provisions promulgated by the Ministry of Finance. Such changes
in accounting policies have been approved at the 33rd meeting of the 5th Board of Directors and the 20th meeting of the 5th Board of
Supervisors.
VII. Explanation about Changes in the Scope of Consolidation Compared with the Financial
Report for the Preceding Year
Applicable □ N/A
1. Subsidiaries newly included in the scope of consolidation
49
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Method of
Date of acquisition of Ratio of capital
Company name acquisition of Capital contribution
shares contribution
shares
Suzhou Dongyue New Energy
Investment September 6, 2022 RMB165,000,000.00 100.00%
Technology Co., Ltd.
DSBJ MEXICO, S.DER. L. DEC. V. Investment March 27, 2022 MXN3,000.00 100.00%
Suzhou Dongshan Industrial
Investment December 29, 2022 RMB 30,000,000.00 100.00%
Investment Co., Ltd.
2. Subsidiaries removed from the scope of consolidation
Method of Net profit from January 1,
Date of disposal of Net assets at the
Company name disposal of 2022 to the date of disposal
shares date of disposal
shares (RMB)
Suzhou Aiguan Material
Deregistration September 29, 2022 3,611,898.67
Technology Co., Ltd.
VIII. Engagement and Termination of Engagement of Accounting Firm
Accounting firm currently engaged:
Name of domestic accounting firm Pan-China Certified Public Accountants LLP
Remuneration of domestic accounting firm (in RMB0’000) 240
Consecutive years in which the domestic accounting firm has
12
provided auditing service
Certified public accountants of the domestic accounting firm ZHANG Yang and FU Zhenlong
Consecutive years in which the certified public accountants of
1, 1
the domestic accounting firm have provided auditing service
Name of foreign accounting firm (if any) None
Whether a new accounting firm was appointed during the reporting period?
□ Yes No
Engagement of accounting firm for auditing internal controls, financial advisor or sponsor
Applicable □ N/A
During the reporting period, we engaged Pan-China Certified Public Accountants LLP as the auditor of internal controls, responsible
for audit of our internal controls in 2022.
IX. Risk of Delisting after Disclosure of the Annual Report
□ Applicable N/A
X. Matters Relating to Bankruptcy and Reorganization
□ Applicable N/A
We have not been involved in any bankruptcy or reorganization proceedings during the reporting period.
XI. Material Litigation and Arbitration
□Applicable N/A
We have not been involved in any material litigation or arbitration proceedings during the reporting period.
XII. Punishments and Rectifications
□ Applicable N/A
We have not been involved in any punishment and rectification during the reporting period.
50
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
XIII. Credit Standing of the Company and its Controlling Shareholders and Actual
Controllers
□ Applicable N/A
XIV. Material Related-party Transactions
1. Related-party transactions relating to day-to-day operation
□ Applicable N/A
There has been no related-party transaction relating to day-to-day operation during the reporting period.
2. Related-party transactions involving acquisition or sale of assets or equities
□ Applicable N/A
There has been no related-party transaction involving acquisition or sale of assets or equities during the reporting period.
3. Related-party transactions involving joint external investment
□ Applicable N/A
There has been no related-party transaction involving joint external investment during the reporting period.
4. Accounts receivable from and payable to related parties
□ Applicable N/A
There has been no accounts receivable from and payable to related parties during the reporting period.
5. Dealings with affiliated financial companies
□ Applicable N/A
There has been no deposit, loan, facility or other financial business between us and any of our affiliated financial companies.
6. Dealings with financial companies controlled by the Company and its affiliates
□ Applicable N/A
There has been no deposit, loan, facility or other financial business between any of our controlled financial companies and affiliates.
7. Other material related-party transactions
□ Applicable N/A
There has been no other material related-party transaction during the reporting period.
XV. Particulars and Performance of Material Contracts
1. Trusteeship, contracting and leases
(1) Trusteeship
□ Applicable N/A
No such case during the reporting period.
(2) Contracting
□ Applicable N/A
No such case during the reporting period.
(3) Leases
□ Applicable N/A
51
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
No such case during the reporting period.
2. Material guarantees
Applicable □N/A
In RMB0’000
External guarantees provided by the Company and its subsidiaries (excluding those provided for the subsidiaries)
Whether
Disclosure date
Counter or not
of announcement Maximum Effective Actual Collateral Whether
Type of guarantee Term of provided
Obligor of the maximum amount date of amount (if or not
guarantee (if guarantee for a
amount guaranteed guarantee guaranteed applicable) expired
applicable) related
guaranteed
party
Suzhou T oprun
18
Electric Equipment April 20, 2022 3,000 2,500 No Yes
months
Co., Ltd.
Suzhou LEGAT E
Intelligent
April 20, 2022 3,000
Equipment Corp.,
Ltd.
Shanghai Fu Shan
Precision
April 20, 2022 3,000
Manufacturing Co.,
Ltd.
Total amount of external
Total amount of external guarantee
guarantee actually provided
approved during the reporting period 9,000 5,400
during the reporting period
(A1)
(A2)
Total amount of external
Total amount of external guarantee
guarantee actually provided
approved as at the end of the reporting 9,000 2,500
as at the end of the reporting
period (A3)
period (A4)
Guarantees provided by the Company for its subsidiaries
Whether
Disclosure date
Counter or not
of announcement Maximum Effective Actual Collateral Whether
Type of guarantee Term of provided
Obligor of the maximum amount date of amount (if or not
guarantee (if guarantee for a
amount guaranteed guarantee guaranteed applicable) expired
applicable) related
guaranteed
party
Dragon Electronix
Holdings Inc. and 18
April 20, 2022 250,000 243,338.4 No No
its controlled months
subsidiaries
Hong Kong
Dongshan Holding April 20, 2022 150,000
Limited
Yancheng 18
April 20, 2022 150,000 137,545 No No
Dongshan months
Multek Group
(Hong Kong)
18
Limited and its April 20, 2022 150,000 58,726.91 No No
months
controlled
subsidiaries
18
Mutto Optronics April 20, 2022 100,000 85,118.49 No No
months
18
Yongchuang Tech April 20, 2022 80,000 47,033.27 No No
months
Chaowei
Microelectronics
April 20, 2022 60,000
(Yancheng) Co.,
Ltd.
Shanghai Dongxin
New Energy
April 20, 2022 60,000
T echnology Co.,
Ltd.
Yancheng
Dongshan
18
Communication April 20, 2022 30,000 6,295.52 No No
months
Technology Co.,
Ltd.
18
RF Top Electronic April 20, 2022 20,000 4,614.68 No No
months
Hong Kong
April 20, 2022 10,000 No
Dongshan
Suzhou Chengjia
Precision 18
April 20, 2022 8,000 4,421.94 No No
Manufacturing Co., months
Ltd.
Suzhou Dongbo
Precision 18
April 20, 2022 3,000 580 No No
Manufacturing Co., months
Ltd.
Total amount of guarantee
Total amount of guarantee approved to
actually provided for
be provided for subsidiaries during the 1,071,000 1,177,213.89
subsidiaries during the
reporting period (B1)
reporting period (B2)
Total amount of guarantee approved to 1,071,000 Total amount of guarantee 587,674.21
52
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
be provided for subsidiaries as at the end actually provided for
of the reporting period (B3) subsidiaries as at the end of
the reporting period (B4)
Guarantees provided by subsidiaries for each other
Whether
Disclosure date
Counter or not
of announcement Maximum Effective Actual Collateral Whether
Type of guarantee Term of provided
Obligor of the maximum amount date of amount (if or not
guarantee (if guarantee for a
amount guaranteed guarantee guaranteed applicable) expired
applicable) related
guaranteed
party
Total amount of guarantee
Total amount of guarantee approved to
actually provided for
be provided for subsidiaries during the 0 0
subsidiaries during the
reporting period (C1)
reporting period (C2)
Total amount of guarantee
Total amount of guarantee approved to
actually provided for
be provided for subsidiaries as at the end 0 0
subsidiaries as at the end of
of the reporting period (C3)
the reporting period (C4)
Total amount of guarantee provided by the Company
Total amount of guarantee
Total amount of guarantee approved actually provided during the
1,080,000 1,182,613.89
during the reporting period (A1+B1+C1) reporting period
(A2+B2+C2)
Total amount of guarantee
Total amount of guarantee approved as at
actually provided as at the
the end of the reporting period 1,080,000 590,174.21
end of the reporting period
(A3+B3+C3)
(A4+B4+C4)
Ratio of total amount of guarantee actually provided (A4+B4+C4) to
36.08%
the net assets of the Company
Where:
Outstanding guarantees provided for shareholders, actual controllers
2,500
and their affiliates (D)
Outstanding guarantees directly or indirectly provided for obligors
520,537.1
whose debt-to-assets ratio exceeds 70% (E)
Portion of total amount of guarantee in excess of 50% of the net assets
0
(F)
Total (D+E+F) 523,037.1
Explanation about the joint and several liability that has been or might
be incurred in respect of outstanding guarantees during the reporting N/A
period (if any)
Explanation about external guarantees provided in contravention of the
N/A
established procedures (if any)
Note: The guarantees provided for related parties are for our investees.
Guarantees provided using complex method: None.
3. Entrusted management of cash assets
(1) Entrusted wealth management
Applicable □ N/A
Particulars of entrusted wealth management during the reporting period
In RMB0’000
Impairment loss recognized
Overdue
Type Source of funds Total amount Outstanding amount for overdue wealth
amount
management products
Bank wealth
Self-owned funds 131,177.45 35,913.90
management product 1
Bank wealth
Offering proceeds 12,700.00 0.00
management product
Total 143,877.45 35,913.90
Note: 1. Use in a recycling manner.
High-risk entrusted wealth management products that are significant individually, illiquid or not principal protected:
□ Applicable N/A
Entrusted wealth management products the principal of which may be unrecoverable or which may otherwise be impaired:
□ Applicable N/A
(2) Entrusted loans
53
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
□ Applicable N/A
No such case during the reporting period.
4. Other material contracts
□ Applicable N/A
We have not entered into any other material contract during the reporting period.
XVI. Other Significant Matters
□ Applicable N/A
There’s no other significant matter that need to be explained for the reporting period.
XVII. Significant Matters of Subsidiaries
□ Applicable N/A
54
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Section VII Changes in Shares and Shareholders
I. Changes in Shares
1. Changes in shares
Unit: Shares
Before the change ＋/- After the change
New Bonus Capitalization of capital
Number % Others Subtotal Number %
shares shares reserves
I. Non-tradable shares 319,591,987 18.69% 319,591,987 18.69%
1. Shares held by the State
2. Shares held by State-owned corporations
3. Shares held by other domestic investors 319,591,987 18.69% 319,591,987 18.69%
Incl.: Shares held by domestic non-State-
owned corporations
Shares held by domestic natural persons 319,591,987 18.69% 319,591,987 18.69%
4. Shares held by foreign investors
Incl.: Shares held by foreign corporations
Shares held by foreign natural persons
II. Tradable shares 1,390,275,340 81.31% 1,390,275,340 81.31%
1. RMB-denominated ordinary shares 1,390,275,340 81.31% 1,390,275,340 81.31%
2. Foreign currency-denominated shares listed
domestically
3. Foreign currency-denominated shares listed
overseas
4. Others
III. Total shares 1,709,867,327 100.00% 1,709,867,327 100.00%
Reasons of changes in shares
□ Applicable N/A
Approval of changes in shares
□ Applicable N/A
Transfer of shares
□ Applicable N/A
Effect of changes in shares on the basic earnings per share, diluted earnings per share, net assets per share attributable to ordinary
shareholders and other financial indicators of the Company in the preceding year and the most recent reporting period
□ Applicable N/A
Other information disclosed as the Company deems necessary or required by the securities regulatory authorities
□ Applicable N/A
2. Changes in non-tradable shares
□ Applicable N/A
II. Offering and Listing of Securities
1. Offering of securities (other than preferred shares) during the reporting period
□ Applicable N/A
2. Changes in total number of shares, shareholding structure, and structure of assets and liabilities of the
Company
□ Applicable N/A
3. Outstanding employee shares
□ Applicable N/A
55
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
III. Shareholders and Actual Controllers
1. Number of shareholders and shareholding structure of the Company
Unit: Shares
Total number
Total number of
of ordinary
preferred
shareholders Total number of preferred
shareholders
at the end of shareholders whose voting rights had
Total number of ordinary whose voting
the month been restituted at the end of the
shareholders at the end of the 51870 45884 rights had been 0 0
immediately month immediately preceding the
reporting period restituted at the
preceding the disclosure date of this annual report
end of the
disclosure (if any) (Note 8)
reporting period
date of this
(if any) (Note 8)
annual report
Shareholding of ordinary shareholders holding more than 5% of the shares or top 10 ordinary shareholders
No. of Pledge, attachment or freeze
ordinary
Changes in No. of
shares held No. of non-
Status of Shareholding shareholding tradable
Name of shareholder at the end of tradable ordinary
shareholder percentage during the ordinary Status of shares Number
the shares held
reporting period shares held
reporting
period
Domestic natural
YUAN Yongfeng 13.01% 222,388,153 166,791,115 55,597,038 Pledged 133,137,000
person
Domestic natural Pledged 87,620,000
YUAN Yonggang 11.83% 202,226,196 151,669,647 50,556,549
person Locked 9,295,000
Hong Kong Securities Foreign
3.55% 60,665,866 60,665,866
Clearing Company Limited corporation
Domestic natural
YUAN Fugen 3.44% 58,796,052 58,796,052
person
Industrial and Commercial
Bank of China Limited – GF
Multi-factor Flexible Others 1.39% 23,827,139 23,827,139
Commingled Securities
Investment Fund
Shaanxi International Trust
Co., Ltd.－SIT I-DSBJ ESOP Others 1.28% 21,914,118 21,914,118
Collective T rust Plan II
Pension Fund Portfolio 15022 Others 1.17% 20,000,000 20,000,000
Zhangjiagang Industrial Stated owned
1.12% 19,074,681 19,074,681
Capital Investment Co., Ltd. corporation
Pension Fund Portfolio 1204 Others 1.10% 18,865,100 18,865,100
GF Fund Management Co.,
Ltd. Social Security Fund Others 1.09% 18,622,600 18,622,600
Portfolio 402
Strategic investors or general corporations
becoming top 10 ordinary shareholders as a result of N/A
rights issue (if any) (Note 3)
Among the shareholders listed above, YUAN Yonggang and YUAN Yongfeng are sons of YUAN Fugen, and YUAN Yongfeng is
the elder broth of YUAN Yonggang. YUAN Fugen, YUAN Yongfeng and YUAN Yonggang are our actual controllers. Shaanxi
Affiliates or concert parties among the shareholders
International Trust Co., Ltd.－SITI-DSBJ ESOP Collective Trust Plan II is the account responsible for implementing our 2021 ESOP.
listed above
We are not aware whether there are affiliates or concert parties within the meaning of the Administrative Measures for Information
Disclosure by the Listed Companies Relating to Changes in Shares Held by Shareholders among other shareholders listed above.
Delegation or waiver of voting rights or ownership
of voting rights by or to the shareholders listed N/A
above
Special explanation about any special account for
repurchase opened by any top 10 shareholder (if N/A
any) (Note 10)
Shares held by top 10 holders of tradable shares
Type and number of shares
Shareholder Number of tradable shares held at the end of the reporting period
Type Number
RMB-denominated
Hong Kong Securities Clearing Company Limited 60,665,866 60,665,866
ordinary share
RMB-denominated
YUAN Fugen 58,796,052 58,796,052
ordinary share
RMB-denominated
YUAN Yongfeng 55,597,038 55,597,038
ordinary share
RMB-denominated
YUAN Yonggang 50,556,549 50,556,549
ordinary share
Industrial and Commercial Bank of China Limited –
RMB-denominated
GF Multi-factor Flexible Commingled Securities 23,827,139 23,827,139
ordinary share
Investment Fund
Shaanxi International Trust Co., Ltd.－SITI-DSBJ RMB-denominated
21,914,118 21,914,118
ESOP Collective T rust Plan II ordinary share
RMB-denominated
Pension Fund Portfolio 15022 20,000,000 20,000,000
ordinary share
Zhangjiagang Industrial Capital Investment Co., RMB-denominated
19,074,681 19,074,681
Ltd. ordinary share
RMB-denominated
Pension Fund Portfolio 1204 18,865,100 18,865,100
ordinary share
GF Fund Management Co., Ltd. Social Security RMB-denominated
18,622,600 18,622,600
Fund Portfolio 402 ordinary share
56
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Affiliates or concert parties among top 10 holders of Among the shareholders listed above, YUAN Yonggang and YUAN Yongfeng are sons of YUAN Fugen, and YUAN Yongfeng is
the elder broth of YUAN Yonggang. YUAN Fugen, YUAN Yongfeng and YUAN Yonggang are our actual controllers. Shaanxi
tradable ordinary shares, and among top 10 holders
International Trust Co., Ltd.－SITI-DSBJ ESOP Collective Trust Plan II is the account responsible for implementing our 2021 ESOP.
of tradable ordinary shares and top 10 ordinary We are not aware whether there are affiliates or concert parties within the meaning of the Administrative Measures for Information
Disclosure by the Listed Companies Relating to Changes in Shares Held by Shareholders among other shareholders listed above.
shareholders
Securities margin trading carried out by top 10
N/A
ordinary shareholders (if any) (Note 4)
Did any top 10 ordinary shareholder or top 10 holder of tradable ordinary shares conduct any transaction under repurchase agreement
during the reporting period?
□ Yes No
No top 10 ordinary shareholder or top 10 holder of tradable ordinary shares has conducted any transaction under repurchase agreement
during the reporting period.
2. Controlling shareholders of the Company
Nature of controlling shareholders: Natural persons.
Type of controlling shareholders: Natural persons.
Name of controlling
Nationality Whether or not having obtained residency in any other country or region
shareholder
YUAN Yongfeng China No
YUAN Yonggang China No
YUAN Fugen China No
Main occupation and YUAN Yonggang is our Chairman, YUAN Yongfeng is our director and General Manager, and YUAN Fugen is our senior
title advisor.
(1) YUAN Yonggang holds 23.94% shares in Anhui Landun Photoelectron Co., Ltd. (stock short name: Landun Photoelectron;
stock code: 300862) directly, and Anhui Gaoxin Jintong Anyi Venture Capital Fund II (L.P.), which is jointly controlled by
YUAN Yonggang and his wife WANG Wenjuan, holds 10.95% in Landun Photoelectron, so YUAN Yonggang and his wife
Shares held in other
WANG Wenjuan hold 34.89% shares of Landun Photoelectron in aggregate and are its actual controllers.
domestic or foreign
(2) YUAN Yonggang and his wife WANG Wenjuan hold 98% shares of Shenzhen Qinghai Rongyao Capital Management Co.,
listed companies
Ltd. (“Rongyao Capital”) through Jintong Zhihui Investment Management Co., Ltd. (an investment company operated and
controlled or invested
managed by a professional management team, whose investment capital was primarily raised from the society), and Rongyao
by the controlling
Capital is the Managing Partner of Hefei Rongxin Equity Investment Fund Partnership (L.P.) (“Hefei Rongxin”). On November
shareholders during
21, 2019, Hefei Rongxin became the controlling shareholder of Anhui Anfu Battery Technology Co., Ltd. (stock short name:
the reporting period
Anfu Technology; stock code: 603031). At present, Hefei Rongxin hold 29.13% shares of Anfu Technology together with its
concert parties, and is the controlling shareholder of Anfu Technology, so YUAN Yonggang and his wife WANG Wenjuan are
actual controllers of Anfu Technology.
Change in the controlling shareholders during the reporting period:
□ Applicable N/A
There has been no change in our controlling shareholders during the reporting period.
3. Actual controllers of the Company and their concerted parties
Nature of actual controllers: Domestic natural persons.
Type of actual controllers: Natural persons.
Relationship with the Whether or not having obtained residency
Name of actual controller Nationality
actual controller in any other country or region
YUAN Yongfeng Himself China No
YUAN Yonggang Himself China No
YUAN Fugen Himself China No
See “III. Shareholders and Actual Controllers – 2. Controlling shareholders of the
Main occupation and title
Company” above.
Domestic or foreign listed companies that have been controlled See “III. Shareholders and Actual Controllers – 2. Controlling shareholder of the
by the actual controllers in the past 10 years Company” above.
Change in the actual controllers during the reporting period:
□ Applicable N/A
57
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
There has been no change in our actual controllers during the reporting period.
Diagram of ownership and control relationship between the Company and its actual controllers
IV. Share Repurchases Effected during the Reporting Period
Progress of share repurchases
Applicable □ N/A
Number of Amount of Ratio of the shares
Disclosure % of Number of
shares shares already repurchased to
date of the total Proposed period of Use of shares shares
proposed to proposed to be the total underlying
repurchase share repurchase repurchased already
be repurchased shares under the share
plan capital repurchased
repurchased (RMB0’000) incentive plan (if any)
12 months following the
date that the share Implementation
April 27, 4545500- 0.27%-
10000-20000 repurchase plan was of ESOP or share 3,048,700
2022 9090900 0.53%
approved by the Board of incentives
Directors
Progress of sale or repurchase of shares by aggregate auction:
Applicable □ N/A
As of the disclosure date of this Announcement, we have repurchased 3.0487 million shares in total by aggregate auction through the
special securities account for repurchase, accounting for 0.18% of our total share capital. This share repurchase plan has terminated
with the approval of the 2nd extraordinary general meeting in 2023. Please refer to the relevant announcement on www.cninfo.com.cn,
and our designated newspapers for information disclosure.
58
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Section VIII Preferred Shares
□ Applicable N/A
We did not have any preferred share during the reporting period.
59
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Section IX Bonds
□ Applicable N/A
60
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Section X Financial Report
I. Financial Report
Audit opinion Standard unqualified opinion
Signing date of the auditor’s report April 19, 2023
Auditor Pan-China Certified Public Accountants LLP
Name of certified public accountants ZHANG Yang and FU Zhenlong
Auditor’s Report
Pan-China Audit [2023] No. 5-31
To shareholders of Suzhou Dongshan Precision Manufacturing Co., Ltd.,
I. Opinion
We have audited the financial statements of Suzhou Dongshan Precision Manufacturing (the “Company”), which comprise the
consolidated and standalone balance sheets as at December 31, 2022, consolidated and standalone income statements, consolidated and
standalone cash flow statements, and consolidated and standalone statements of changes in owners’ equity for the year ended December
31, 2022, and the notes to the financial statements.
In our opinion, the accompanying financial statements are prepared and present fairly, in all material respects, the consolidated and
standalone financial positions of the Company as at December 31, 2022 and its consolidated and standalone results of operations and
cash flows for the year ended December 31, 2022 in accordance with the China Accounting Standards for Business Enterprises (the
“CASBEs”).
II. Basis for opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our responsibilit ies
under those standards are further described in “Responsibilities of the certified public accountants for the audit of the financial
statements” below. We are independent of the Company in accordance with the Code of Ethics for Certified Public Accountants of
China, and have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
III. Key audit matters
Key audit matters are those matters that, in our professional judgment, were 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 provide a separate opinion on these matters.
(I) Revenue recognition
1. Description
See Notes III(XXIV) and V(II)1 to the financial statements for details.
The operating revenue of the Company was primarily generated from the sale of PCBs, LED display devices, touch panels and LCMs,
precision components and other products, which amounted to RMB31580.1467 million in 2022.
Since operating revenue is a key performance indicator of the Company, and there is an inherent risk that the management of the
Company (the “Management”) may attempt to achieve the specific objectives or expectations through improper revenue recognition,
we identified revenue recognition as a critical audit matter.
2. Audit response
61
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Our audit procedures related to revenue recognition included the following, among others:
(1) Obtained an understanding of the key internal controls related to revenue recognition, assessed the design of such controls,
determined whether such controls have been implemented, and tested the effectiveness of the relevant internal controls;
(2) Examined major sales contracts, obtained an understanding of the main contract terms and conditions, and assessed the
appropriateness of the method of revenue recognition;
(3) With respect to the revenue from domestic sales, examined on a sample basis the sales contracts, sales invoices, delivery orders,
delivery notes and other supporting documents related to revenue recognition; with respect to the revenue from export, obtained the
relevant information from the China Electronic Port, checked the same against the book records kept by the Company, and examined
on a sample basis the sales contracts, sales invoices, delivery orders, export declaration forms, bills of lading and other supporting
documents related to revenue recognition;
(4) Analyzed the operating revenues and gross margin by month, product and customer, identified major or abnormal fluctuations,
and found out the causes of such fluctuations;
(5) With respect to accounts receivable, sent confirmation requests to the major customers, on a sample basis, to verify the sales
revenues of the current period;
(6) Conducted cut-off tests on the operating revenues recognized around the balance sheet date to assess whether the operating
revenues were recognized in the proper period; and
(7) Examined whether the information related to operating revenues has been properly presented in the financial statements.
(II) Impairment of accounts receivable
1. Description
See Notes III(X) and V(I)4 to the financial statements for details.
As of December 31, 2022, the Company’s book balance of accounts receivable was RMB7997.2146 million, allowance for doubtful
accounts was RMB990.8032 million, and carrying value of accounts receivable was RMB7006.4115 million.
The Management measures the lifetime expected credit losses on accounts receivable individually or collectively according to their
credit risk characteristics, and recognizes an equal amount as allowance for impairment losses. In measuring the expected credit losses
on accounts receivable individually, the Management estimates the expected cash flows taking into account reasonable and supportable
information relating to past events, current situation and forecasts on future economic conditions, and recognizes an allowance for
doubtful accounts accordingly. In measuring the expected credit losses on accounts receivable collectively, the Management divides
them into groups by age, adjusts such groups based on its historic credit loss experience and forward-looking estimates, prepares a
comparison table of ages and expected credit loss ratios of accounts receivable, and recognizes an allowance for doubtful accounts
accordingly.
Due to the significant amount of accounts receivable, and the impairment of accounts receivable involves significant management
judgment, we identified impairment of accounts receivable as a critical audit matter.
2. Audit response
Our audit procedures related to impairment of accounts receivable included the following, among others:
(1) Obtained an understanding of the key internal controls related to impairment of accounts receivable, assessed the design of such
controls, determined whether such controls have been implemented, and tested the effectiveness of the relevant internal controls;
(2) Reviewed the subsequent write-off or reversal of the accounts receivable for which allowances for doubtful accounts have been
recognized in the prior years, and assessed the accuracy of the past forecasts of the Management;
(3) Reviewed the considerations and objective evidence used by the Management in assessing the credit risks of accounts receivable,
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
and assessed whether the Management has properly identified the credit risk characteristics of all accounts receivable;
(4) With respect to the accounts receivable assessed individually, on a sample basis, reviewed the basis on which the Management
assessed the credit risk and expected credit losses, including the assessment by the Management of credit losses on the basis of
customers’ business situation, market environment, enforcement of judgments, professional opinion of counsels, etc.;
(5) With respect to the accounts receivable assessed collectively, assessed the reasonableness of grouping by the Management
according to credit risk characteristics, and the comparison tables of ages and expected credit loss ratios of accounts receivable prepared
by the Management based on its historic credit loss experience and forward-looking estimates, tested the accuracy and completeness
of the data (such as ages of accounts receivable, historical loss rate, etc.) used and the accuracy of the allowance for doubtful accounts
calculated by the Management;
(6) Examined the subsequent recovery of accounts receivable, to assess the reasonableness of the allowance for impairment loss of
accounts receivable recognized by the Management; and
(7) Examined whether the information related to impairment of accounts receivable has been properly presented in the financial
statements.
(III) Goodwill impairment
1. Description
See Notes III(XIX) and V(I)18 to the financial statements for details.
As of December 31, 2022, the Company’s original value of goodwill was RMB2239.0412 million, allowance for goodwill impairment
was RMB47.1013 million, and carrying value of goodwill was RMB 2191.9399 million.
The Management tests the goodwill for impairment when there’s an indication of impairment of any asset group or combination of
asset groups and at the end of each year. The Management tests the goodwill for impairment together with the relevant asset group or
combination of asset groups, whose recoverable amount is determined according to the present value of its estimated future cash flows.
The key assumptions used in impairment test include revenue growth rate over the detailed forecast period, growth rate over the
perpetual forecast period, gross margin, discount rate, etc.
Due to the significant amount of goodwill, and the goodwill impairment tests involve significant management judgment, we identified
goodwill impairment as a critical audit matter.
2. Audit response
Our audit procedures related to goodwill impairment included the following, among others:
(1) Obtained an understanding of the key internal controls related to goodwill impairment, assessed the design of such controls,
determined whether they have been executed, and tested the effectiveness of such internal controls;
(2) Reviewed the present value of future cash flows estimated by the Management in prior years and the actual operating results, and
assessed the accuracy of the past forecasts of the Management;
(3) Inquired about and assessed the competencies, professional quality and objectivity of the external appraisers engaged by the
Management;
(4) Assessed the reasonableness and consistency of the approaches adopted by the Management in impairment tests;
(5) Assessed the reasonableness of the key assumptions used by the Management in impairment tests and whether the relevant
assumptions were consistent with the overall economic environment, industrial conditions, operating situations, historical experience ,
business plans, approved budgets, and other assumptions used by the Management in relation to the financial statements;
(6) Tested the accuracy, completeness and relativity of the data used by the Management in impairment tests and reviewed the
consistency of inputs in impairment tests;
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
(7) Tested the accuracy of the calculation of estimated present value of future cash flows by the Management; and
(8) Examined whether the information related to goodwill impairment has been properly presented in the financial statements.
IV. Other information
The Management is responsible for the 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.
Our opinion on the financial statements does not cover the other information, and we will not express any form of assurance conclusions
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information, and in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If we conclude that there is a material misstatement therein, we are required to communicate such matter. 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 the preparation and fair presentation of the financial statements in accordance with the CASBE,
and design, implementation and maintenance of internal controls that are necessary to enable 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 the Company’s ability to continue as a going concern,
disclosing (as applicable) matters relating to going concern, and using the going concern basis of accounting unless the Management
either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance of the Company is responsible for overseeing the financial reporting process of the Company.
VI. Responsibilities of the Certified Public Accountants 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 the audit standards will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error, and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with the audit standards, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than 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;
(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 the
Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required by the audit
standards 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.
64
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
However, future events or conditions may cause the Company 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; and
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities with in
the Company, to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of
the audit of the Group, and solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any noteworthy deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the financial statements of the current period and are therefore the critical 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 Certified Public Accountant of China (Project partner): ZHANG Yang
Hangzhou, China Certified Public Accountant of China: FU Zhenlong
Date: April 19, 2023
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
II. Financial Statements
The amounts in the statements contained in the notes to the financial statements are presented in RMB.
1. Consolidated balance sheet
Prepared by: Suzhou Dongshan Precision Manufacturing Co., Ltd.
December 31, 2022
In RMB
Item December 31, 2022 January 1, 2022
Current assets:
Cash and bank balances 7,131,202,817.72 5,400,837,392.47
Settlement deposit
Loans to banks and other financial institutions
Financial assets held for trading 575,783,803.93 499,528,549.86
Derivative financial assets
Notes receivable 48,401,430.82 14,624,540.85
Accounts receivable 7,006,411,466.74 7,666,079,765.82
Accounts receivable financing 644,057,382.41 828,355,016.30
Advances to suppliers 161,512,824.53 186,095,112.93
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves receivable
Other receivables 35,793,851.22 37,505,521.59
Incl.: Interest receivable
Dividends receivable
Financial assets held under resale agreements
Inventories 6,165,738,409.09 6,451,712,389.82
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 504,573,874.64 646,070,013.64
Total current assets 22,273,475,861.10 21,730,808,303.28
Non-current assets:
Loans and advances to clients
Debt investments
Other debt investments
Long-term accounts receivable 30,000,000.00 69,950,000.88
Long-term equity investments 139,767,215.41 143,121,019.78
Investments in other equity instruments 171,322,110.00 171,322,110.00
Other non-current financial assets
Investment properties 1,296,551.42 1,554,262.58
Fixed assets 10,673,700,468.47 10,736,270,678.33
Construction in progress 1,813,183,815.67 503,037,513.25
Productive biological assets
Oil and gas assets
Right-of-use assets 951,068,254.01 920,952,667.75
Intangible assets 302,589,719.92 297,383,991.47
Development expenses
Goodwill 2,191,939,940.60 2,211,722,774.04
Long-term deferred expenses 501,517,044.33 343,067,848.10
Deferred tax assets 608,987,423.66 535,920,683.59
Other non-current assets 872,512,776.58 286,296,934.20
Total non-current assets 18,257,885,320.07 16,220,600,483.97
Total assets 40,531,361,181.17 37,951,408,787.25
Current liabilities:
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Short-term borrowings 7,794,409,944.68 8,047,168,009.16
Borrowings from Central Bank
Borrowings from banks and other financial
institutions
Financial liabilities held for trading 91,517,116.89
Derivative financial assets
Notes payable 2,008,405,860.19 1,646,644,107.17
Accounts payable 5,986,286,590.32 6,729,890,126.00
Advances from clients
Contract liabilities 26,193,456.12 39,681,986.94
Financial assets sold under repurchase agreements
Deposits from clients and other banks
Funds received as stock broker
Funds received as underwriter of securities
Employee benefits payable 500,125,315.30 503,138,722.06
Taxes payable 412,289,780.94 151,692,543.85
Other payables 54,324,601.72 323,166,075.34
Incl.: Interest payable
Dividends payable
Fees and commissions payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one year 1,189,744,866.13 1,490,545,864.93
Other current liabilities 4,476,657.36 2,440,030.34
Total current liabilities 18,067,774,189.65 18,934,367,465.79
Non-current liabilities:
Provision for insurance contracts
Long-term borrowings 3,197,821,643.49 2,030,525,761.80
Bonds payable
Incl.: Preferred shares
Perpetual bonds
Lease liabilities 1,647,319,046.20 1,147,810,164.72
Long-term accounts payable 78,927,000.98
Long-term employee benefits payable
Provisions 69,202,183.16 89,442,831.13
Deferred income 747,587,634.12 685,633,680.65
Deferred tax liabilities 395,309,035.94 314,359,343.00
Other non-current liabilities
Total non-current liabilities 6,057,239,542.91 4,346,698,782.28
Total liabilities 24,125,013,732.56 23,281,066,248.07
Owners’ equity:
Share capital 1,709,867,327.00 1,709,867,327.00
Other equity instruments
Incl.: Preferred shares
Perpetual bonds
Capital reserve 8,054,894,080.77 8,099,524,872.90
Less: Treasury shares 125,906,811.33 100,479,794.32
Other comprehensive income -692,976,005.21 -519,626,066.21
Special reserve
Surplus reserve 135,347,835.10 111,698,315.15
General risk reserve
Retained profits 7,278,203,054.12 5,275,515,670.63
Total owners’ equity attributable to the parent 16,359,429,480.45 14,576,500,325.15
Minority interests 46,917,968.16 93,842,214.03
Total owners’ equity 16,406,347,448.61 14,670,342,539.18
Total liabilities and owners’ equity 40,531,361,181.17 37,951,408,787.25
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Legal Representative: YUAN Yonggang CFO: WANG Xu Accounting Supervisor: ZHU Deguang
2. Standalone balance sheet
In RMB
Item December 31, 2022 January 1, 2022
Current assets:
Cash and bank balances 1,412,679,165.36 1,320,945,743.89
Financial assets held for trading 5,339,600.00 12,875,960.00
Derivative financial assets
Notes receivable 561,448.01 31,632,433.51
Accounts receivable 1,941,106,338.87 2,751,126,772.11
Accounts receivable financing 12,405,985.23 552,882,532.72
Advances to suppliers 398,743,645.61 115,749,043.07
Other receivables 3,245,530,947.12 3,408,234,419.21
Incl.: Interest receivable
Dividends receivable 1,210,095,256.90 581,000,000.00
Inventories 1,009,877,418.76 697,310,419.09
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 95,208,426.22 44,816,583.10
Total current assets 8,121,452,975.18 8,935,573,906.70
Non-current assets:
Debt investments
Other debt investments
Long-term accounts receivable 30,000,000.00 55,000,000.88
Long-term equity investments 7,580,547,437.18 7,096,642,244.53
Investments in other equity instruments 171,322,110.00 171,322,110.00
Other non-current financial assets
Investment properties
Fixed assets 1,224,723,019.96 1,180,664,110.78
Construction in progress 482,015,287.67 119,752,899.75
Productive biological assets
Oil and gas assets
Right-of-use assets 6,523,001.84 8,479,902.43
Intangible assets 61,782,911.44 63,720,204.68
Development expenses
Goodwill
Long-term deferred expenses 156,467,709.39 97,651,794.61
Deferred tax assets 189,246,815.34 161,821,257.17
Other non-current assets 110,280,926.88 41,372,547.26
Total non-current assets 10,012,909,219.70 8,996,427,072.09
Total assets 18,134,362,194.88 17,932,000,978.79
Current liabilities:
Short-term borrowings 3,239,724,817.50 3,523,782,504.56
Financial liabilities held for trading
Derivative financial assets
Notes payable 1,433,148,316.04 1,500,663,176.84
Accounts payable 725,307,838.44 930,354,491.13
Advances from clients
Contract liabilities 261,978,225.55 184,899,206.27
Employee benefits payable 36,013,112.32 27,858,029.13
Taxes payable 2,676,526.20 3,879,187.43
Other payables 1,527,486,936.57 1,472,895,655.79
Incl.: Interest payable
Dividends payable
Liabilities held for sale
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Non-current liabilities due within one year 216,525,360.27 152,150,642.66
Other current liabilities 2,052,903.93
Total current liabilities 7,444,914,036.82 7,796,482,893.81
Non-current liabilities:
Long-term borrowings 1,106,033,055.55 334,960,336.11
Bonds payable
Incl.: Preferred shares
Perpetual bonds
Lease liabilities 4,746,572.24 6,774,436.43
Long-term accounts payable 78,927,000.98
Long-term employee benefits payable
Provisions 3,414,342.70 1,935,062.28
Deferred income 22,333,333.41 25,653,396.00
Deferred tax liabilities 1,235,824.13 2,178,114.46
Other non-current liabilities
Total non-current liabilities 1,137,763,128.03 450,428,346.26
Total liabilities 8,582,677,164.85 8,246,911,240.07
Owners’ equity:
Share capital 1,709,867,327.00 1,709,867,327.00
Other equity instruments
Incl.: Preferred shares
Perpetual bonds
Capital reserve 7,953,356,366.17 7,961,185,289.83
Less: Treasury shares 125,906,811.33 100,479,794.32
Other comprehensive income -345,461,340.00 -350,000,000.00
Special reserve
Surplus reserve 135,347,835.10 111,698,315.15
Retained profits 224,481,653.09 352,818,601.06
Total owners’ equity 9,551,685,030.03 9,685,089,738.72
Total liabilities and owners’ equity 18,134,362,194.88 17,932,000,978.79
3. Consolidated income statement
In RMB
Item 2022 2021
I. Total operating revenue 31,580,146,732.58 31,793,147,908.12
Incl.: Operating revenue 31,580,146,732.58 31,793,147,908.12
Interest income
Premiums earned
Fee and commission income
II. Total operating costs 28,434,705,720.60 29,789,694,099.52
Incl.: Operating costs 26,020,679,333.24 27,128,550,627.93
Interest expenses
Fee and commission expenses
Surrenders
Net payments for insurance claims
Net insurance claim reserves
Policyholder dividends
Reinsurance expenses
Taxes and surcharges 105,651,890.50 73,160,213.97
Selling expenses 352,993,453.50 341,087,646.41
Administrative expenses 815,662,486.89 781,664,730.36
Research and development expenses 940,085,451.98 1,028,567,206.95
Financial expenses 199,633,104.49 436,663,673.90
Incl.: Interest expenses 393,340,686.55 371,339,473.57
Interest income 42,128,725.22 62,819,318.55
Add: Other income 318,574,095.64 269,467,593.24
Investment income (loss expressed with “-”) -922,388.82 41,578,291.23
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Incl.: Investment income from associates and
-2,008,218.02 -7,515,648.15
joint ventures
Gain on derecognition of financial assets
at amortized cost
Exchange gain (loss expressed with “-”)
Net exposure hedging income (loss expressed
with “-”)
Gain on changes in fair value (loss expressed
-66,613,459.50 8,645,469.99
with “-”)
Credit loss (loss expressed with “-”) -76,228,643.25 -7,992,105.91
Impairment loss on assets (loss expressed with
-468,204,563.83 -187,376,720.10
“-”)
Gain on disposal of assets (loss expressed with
-5,513,221.27 -14,060,145.96
“-”)
III. Operating profit (loss expressed with “-”) 2,846,532,830.95 2,113,716,191.09
Add: Non-operating revenue 12,212,345.74 3,112,802.79
Less: Non-operating expenses 17,846,210.04 6,006,471.39
IV. Profit before tax (loss expressed with “-”) 2,840,898,966.65 2,110,822,522.49
Less: Income tax expenses 473,639,443.09 249,922,824.36
V. Net profit (loss expressed with “-”) 2,367,259,523.56 1,860,899,698.13
(I) Classified by continuity of operation
1. Net profit from continuing operation (loss
2,367,259,523.56 1,860,899,698.13
expressed with “-”)
2. Net profit from discontinued operation (loss
expressed with “-”)
(II) Classified by attribution
1. Net profit attributable to owners of the parent (loss
2,367,519,530.91 1,862,481,138.84
expressed with “-”)
2. Minority interests (loss expressed with “-”) -260,007.35 -1,581,440.71
VI. Other comprehensive income, net -173,374,048.73 -46,074,281.99
Other comprehensive income attributable to the
-173,349,939.00 -46,074,281.99
parent, net
(I) Other comprehensive income that cannot be
reclassified into profit or loss
1. Changes arising from remeasurement of
defined benefit plans
2. Other comprehensive income that cannot be
reclassified into profit or loss under equity
method
3. Change in fair value of investments in other
equity instruments
4. Change in fair value of the corporation’s
credit risk
5. Others
(II) Other comprehensive income that will be
-173,349,939.00 -46,074,281.99
reclassified into profit or loss
1. Other comprehensive income that can be
reclassified into profit or loss under equity
method
2. Change in fair value of other debt
investments
3. Financial assets reclassified into other
comprehensive income
4. Provision for credit impairment of other debt
investments
5. Reserves for cash flow hedge -112,225,912.41 4,646,609.02
6. Differences on translation of foreign currency
-61,124,026.59 -50,720,891.01
financial statements
7. Others
Other comprehensive income attributable to minority
-24,109.73
interests, net
VII. Total comprehensive income 2,193,885,474.83 1,814,825,416.14
Total comprehensive income attributable to the parent 2,194,169,591.91 1,816,406,856.85
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Total comprehensive income attributable to minority
-284,117.08 -1,581,440.71
interests
VIII. Earnings per share
(I) Basic earnings per share 1.39 1.09
(II) Diluted earnings per share 1.39 1.09
The net profit realized by the acquirees before acquisition in business combinations involving entities under common control was nil
in 2022 and nil in 2021.
Legal Representative: YUAN Yonggang CFO: WANG Xu Accounting Supervisor: ZHU Deguang
4. Standalone income statement
In RMB
Item 2022 2021
I. Operating revenue 3,877,913,051.67 4,244,074,740.42
Less: Operating costs 3,478,568,986.55 3,883,235,776.32
Taxes and surcharges 7,784,720.56 19,465,458.59
Selling expenses 63,703,774.98 38,690,956.59
Administrative expenses 354,137,272.59 324,739,564.30
Research and development expenses 149,446,571.49 43,692,074.72
Financial expenses 145,208,675.20 190,892,392.23
Incl.: Interest expenses 272,353,140.97 232,182,345.26
Interest income 71,430,377.19 80,410,545.58
Add: Other income 10,684,111.51 15,687,436.18
Investment income (loss expressed with “-”) 589,880,146.37 562,696,915.32
Incl.: Investment income from associates and
-1,184,714.09 -7,099,445.94
joint ventures
Gain on derecognition of financial assets
at amortized cost
Net exposure hedging income (loss expressed
with “-”)
Gain on changes in fair value (loss expressed
-14,434,367.40 7,766,360.00
with “-”)
Credit loss (loss expressed with “-”) -14,517,058.05 40,737,910.06
Impairment loss on assets (loss expressed with
-34,480,575.88 -29,305,690.70
“-”)
Gain on disposal of assets (loss expressed with
102,024.93 236,751.46
“-”)
II. Operating profit (loss expressed with “-”) 216,297,331.78 341,178,199.99
Add: Non-operating revenue 205,398.99 1,322,195.03
Less: Non-operating expenses 9,176,319.82 1,389,386.90
III. Profit before tax (loss expressed with “-”) 207,326,410.95 341,111,008.12
Less: Income tax expenses -29,168,788.50 -23,818,369.37
IV. Net profit (loss expressed with “-”) 236,495,199.45 364,929,377.49
(I) Net profit from continuing operation (loss
236,495,199.45 364,929,377.49
expressed with “-”)
(II) Net profit from discontinued operation (loss
expressed with “-”)
V. Other comprehensive income, net 4,538,660.00
(I) Other comprehensive income that cannot be
reclassified into profit or loss
1. Changes arising from remeasurement of
defined benefit plans
2. Other comprehensive income that cannot be
reclassified into profit or loss under equity
method
3. Change in fair value of investments in other
equity instruments
4. Change in fair value of the corporation’s
credit risk
5. Others
(II) Other comprehensive income that will be 4,538,660.00
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
reclassified into profit or loss
1. Other comprehensive income that can be
reclassified into profit or loss under equity
method
2. Change in fair value of other debt
investments
3. Financial assets reclassified into other
comprehensive income
4. Provision for credit impairment of other debt
investments
5. Reserves for cash flow hedge 4,538,660.00
6. Differences on translation of foreign currency
financial statements
7. Others
VI. Total comprehensive income 241,033,859.45 364,929,377.49
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated cash flow statement
In RMB
Item 2022 2021
I. Cash flows from operating activities:
Proceeds from sale of goods and rendering of services 30,689,737,979.37 29,815,812,937.85
Net increase in deposits from clients and other banks
Net increase in borrowings from Central Bank
Net increase in borrowings from other financial
institutions
Proceeds from premiums under prior insurance
contracts
Net proceeds from reinsurance business
Net increase in insured’s deposits and investments
Proceeds from interest, fees and commissions
Net increase in borrowings from banks and other
financial institutions
Net increase in receipts under repurchase transactions
Net cash received as stock broker
Tax refunds received 1,402,945,080.65 1,243,753,661.97
Other proceeds relating to operating activities 856,136,731.36 512,083,240.76
Subtotal of cash inflows from operating activities 32,948,819,791.38 31,571,649,840.58
Payments for purchase of goods and receipt of
22,311,360,256.76 23,091,788,130.30
services
Net increase in loans and advances from clients
Net increase in deposits in Central Bank and other
banks
Payment of claims under prior insurance contracts
Net increase in loans to banks and other financial
institutions
Payment of interest, fees and commissions
Payment of policyholder dividends
Payments to and for employees 4,177,722,088.02 4,026,453,550.20
Taxes paid 492,638,579.06 519,261,401.11
Other payments relating to operating activities 1,337,214,856.16 724,602,274.76
Subtotal of cash outflows from operating activities 28,318,935,780.00 28,362,105,356.37
Net cash flows from operating activities 4,629,884,011.38 3,209,544,484.21
II. Cash flows from investing activities:
Proceeds from disposal of investments 424,159,710.89 1,221,008,889.75
Proceeds from return on investments 10,968,187.55 21,034,758.46
Net proceeds from disposal of fixed assets, intangible
8,924,465.56 14,867,642.54
assets and other long-term assets
Net proceeds from disposal of subsidiaries and other
72
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
business entities
Other proceeds relating to investing activities 235,424,521.00 614,294,406.73
Subtotal of cash inflows from investing activities 679,476,885.00 1,871,205,697.48
Payments for acquisition of fixed assets, intangible
3,375,029,627.94 3,049,208,456.95
assets and other long-term assets
Payments for investments 608,374,219.69 849,056,781.87
Net increase in mortgage loans
Net Payments for acquisition of subsidiaries and other
business entities
Other cash payments relating to investing activities 455,064,192.71 1,288.94
Subtotal of cash outflows from investing activities 4,438,468,040.34 3,898,266,527.76
Net cash flows from investing activities -3,758,991,155.34 -2,027,060,830.28
III. Cash flows from financing activities:
Proceeds from investors 17,800,000.00
Incl.: Proceeds of subsidiaries from minority
17,800,000.00
shareholders’ investments
Cash receipts from borrowings 10,828,761,291.26 9,629,498,697.60
Other proceeds relating to financing activities 2,139,193,721.85 3,921,528,258.50
Subtotal of cash inflows from financing activities 12,967,955,013.11 13,568,826,956.10
Repayment of borrowings 9,629,498,697.60 8,348,766,123.52
Payment of distribution of dividends and profits or for
642,139,429.34 456,920,317.80
interest
Incl.: Dividends and profits distributed by subsidiaries
36,408.79
to minor shareholders
Other payments relating to financing activities 2,192,696,813.07 4,856,990,811.10
Subtotal of cash outflows from financing activities 12,464,334,940.01 13,662,677,252.42
Net cash flows from financing activities 503,620,073.10 -93,850,296.32
IV. Effects of exchange rate changes on cash and cash
143,212,766.77 -22,467,316.29
equivalents
V. Net increase in cash and cash equivalents 1,517,725,695.91 1,066,166,041.32
Add: Opening balance of cash and cash equivalents 3,939,301,126.79 2,873,135,085.47
VI. Closing balance of cash and cash equivalents 5,457,026,822.70 3,939,301,126.79
6. Standalone cash flow statement
In RMB
Item 2022 2021
I. Cash flows from operating activities:
Proceeds from sale of goods and rendering of services 3,930,357,686.47 3,363,805,354.17
Tax refunds received 238,277,121.92 134,161,286.35
Other proceeds relating to operating activities 2,118,216,199.44 3,081,500,098.60
Subtotal of cash inflows from operating activities 6,286,851,007.83 6,579,466,739.12
Payments for purchase of goods and receipt of
4,440,683,078.94 4,090,981,643.21
services
Payments to and for employees 337,116,177.01 398,660,527.63
Taxes paid 19,309,238.75 33,744,370.30
Other payments relating to operating activities 639,515,727.10 592,980,732.05
Subtotal of cash outflows from operating activities 5,436,624,221.80 5,116,367,273.19
Net cash flows from operating activities 850,226,786.03 1,463,099,465.93
II. Cash flows from investing activities:
Proceeds from disposal of investments 121,461,752.60 252,000,000.00
Proceeds from return on investments 573,504,702.64 356,296,361.26
Net proceeds from disposal of fixed assets, intangible
15,670,927.06 31,699,821.28
assets and other long-term assets
Net proceeds from disposal of subsidiaries and other
business entities
Other proceeds relating to investing activities 50,000,000.00
Subtotal of cash inflows from investing activities 710,637,382.30 689,996,182.54
Payments for acquisition of fixed assets, intangible
797,364,143.36 233,002,384.33
assets and other long-term assets
Payments for investments 458,359,760.00 1,086,517,692.36
73
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Net payments for acquisition of subsidiaries and other
business entities
Other payments relating to investing activities
Subtotal of cash outflows from investing activities 1,255,723,903.36 1,319,520,076.69
Net cash flows from investing activities -545,086,521.06 -629,523,894.15
III. Cash flows from financing activities:
Proceeds from investors
Proceeds from borrowings 4,553,408,751.02 3,991,741,102.36
Other proceeds relating to financing activities
Subtotal of cash inflows from financing activities 4,553,408,751.02 3,991,741,102.36
Repayment of borrowings 3,991,741,102.36 3,495,543,277.60
Payment of distribution of dividends and profits or for
606,951,054.50 396,644,933.48
interest
Other payments relating to financing activities 120,819,536.78 274,156,177.46
Subtotal of cash outflows from financing activities 4,719,511,693.64 4,166,344,388.54
Net cash flows from financing activities -166,102,942.62 -174,603,286.18
IV. Effects of exchange rate changes on cash and cash
-35,276,962.44 -1,751,977.28
equivalents
V. Net increase in cash and cash equivalents 103,760,359.91 657,220,308.32
Add: Opening balance of cash and cash equivalents 930,383,165.21 273,162,856.89
VI. Closing balance of cash and cash equivalents 1,034,143,525.12 930,383,165.21
7. Consolidated statement of changes in owners’ equity
2022
In RMB
2022
Owners’ equity attributable to the parent
Item Total
Other Minority
Other equity instruments Less: General owners’
Share Capital compreh Special Surplus Retained interests equity
Treasury risk Others Subtotal
capital Preferred Perpetual reserve ensive reserve reserve profit
Others shares income reserve
shares bonds
I.
Balance
at the - 14,576,5 14,670,3
1,709,86 8,099,52 100,479, 111,698, 5,275,51 93,842,2
end of 519,626, 00,325.1 42,539.1
7,327.00 4,872.90 794.32 315.15 5,670.63 14.03
the 066.21 5 8
previous
y ear
Add:
Changes
in
accounti
ng
policies
Correctio
n of prior
period
errors
Business
combinat
ion
involving
entities
under
common
control
Others
II.
Balance
at the - 14,576,5 14,670,3
1,709,86 8,099,52 100,479, 111,698, 5,275,51 93,842,2
beginnin 519,626, 00,325.1 42,539.1
g of the 7,327.00 4,872.90 794.32 066.21 315.15 5,670.63 5 14.03 8
current
y ear
III.
Increase/
(decrease
) in the
- - -
current 25,427,0 23,649,5 2,002,68 1,782,92 1,736,00
44,630,7 173,349, 46,924,2
period 92.13 17.01 939.00 19.95 7,383.49 9,155.30 45.87 4,909.43
(decrease
expresse
d with
“-”)
(I) Total
compreh - 2,367,51 2,194,16 - 2,193,90
173,349, 260,007.
ensive 9,530.91 9,591.91 9,584.56
939.00 35
income
(II)
Investme
- - - -
nt/(divest 25,427,0
ment) by 44,630,7 17.01 70,057,8 46,627,8 116,685,
92.13 09.14 29.73 638.87
sharehol
ders
1.
Contribut
ions
from
holders
74
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
of
ordinary
shares
2.
Contribut
ions
from
holders
of other
equity
instrume
nts
3. Share-
based
pay ments
16,730,2 16,730,2 16,734,9
recorded 4,703.42
12.08 12.08 15.50
in
owners’
equity
- - - -
4. Others 61,361,0 25,427,0 86,788,0 46,632,5 133,420,
17.01
04.21 21.22 33.15 554.37
(III)
Distributi 23,649,5 - - - -
364,832, 341,182, 36,408.7 341,219,
on of 19.95
147.42 627.47 9 036.26
profits
1. -
23,649,5
Surplus 23,649,5
19.95
reserve 19.95
2.
General
risk
reserve
3.
Distributi
- - - -
ons to
owners 341,182, 341,182, 36,408.7 341,219,
627.47 627.47 9 036.26
(sharehol
ders)
4. Others
(IV)
Internal
transfer
of
owners’
equity
1.
Transfer
of capital
reserve
to (share)
capital
2.
Transfer
of
surplus
reserve
to (share)
capital
3. Make-
up of
losses by
surplus
reserve
4.
Transfer
of
changes
in
defined
benefit
plans to
retained
earnings
5.
Transfer
of other
compreh
ensive
income
to
retained
earnings
6. Others
(V)
Special
reserve
1.
Appropri
ated in
the
current
y ear
2. Used
in the
current
y ear
(VI)
Others
IV.
Balance
at the - 16,359,4 16,406,3
1,709,86 8,054,89 125,906, 135,347, 7,278,20 46,917,9
end of 692,976, 29,480.4 47,448.6
the 7,327.00 4,080.77 811.33 005.21 835.10 3,054.12 5 68.16 1
current
y ear
2021
In RMB
2021
Item Owners’ equity attributable to the parent Total
Minority
owners’
Share Capital Less: Other Special Surplus General Retained interests equity
Other equity instruments Others Subtotal
capital reserve Treasury compreh reserve reserve risk profit
75
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Preferred Perpetual shares ensive reserve
shares bonds Others income
I.
Balance - 13,068,9 13,174,9
at the 1,709,86 8,136,87 75,205,3 3,598,58 106,051,
451,615, 16,872.7 67,928.2
end of 7,327.00 9,413.39 77.40 0,392.76 055.46
637.76 9 5
the
previous
y ear
Add:
Changes
in
accounti
ng
policies
Correctio
n of prior
period
errors
Business
combinat
ion
involving
entities
under
common
control
Others
II.
Balance - 13,068,9 13,174,9
at the 1,709,86 8,136,87 451,615, 75,205,3 3,598,58 16,872.7 106,051, 67,928.2
beginnin 7,327.00 9,413.39 77.40 0,392.76 055.46
637.76 9 5
g of the
current
y ear
III.
Increase/
(decrease
) in the -
100,479,
-
36,492,9 1,676,93 1,507,58
-
1,495,37
current 37,354,5 68,010,4 12,208,8
794.32 37.75 5,277.87 3,452.36 4,610.93
period 40.49 28.45 41.43
(decrease
expresse
d with
“-”)
(I) Total - -
46,074,2 1,862,48 1,816,40 1,581,44 1,814,82
compreh 1,138.84 6,856.85 5,416.14
ensive 81.99 0.71
income
(II)
Investme - - - -
37,354,5 100,479, -2,336.98 137,836, 10,602,3 148,439,
nt/(divest 794.32
ment) by 40.49 671.79 69.68 041.47
sharehol
ders
1.
Contribut
ions 17,800,0 17,800,0
from 00.00 00.00
holders
of
ordinary
shares
2.
Contribut
ions
from
holders
of other
equity
instrume
nts
3. Share-
based
pay ments
recorded
in
owners’
equity
- - - -
100,479,
37,354,5 -2,336.98 137,836, 28,402,3 166,239,
4. Others 794.32
40.49 671.79 69.68 041.47
(III) - - - -
36,492,9
Distributi 207,479, 170,986, 25,031.0 171,011,
37.75
on of 670.45 732.70 4 763.74
profits
-
1. 36,492,9
36,492,9
Surplus 37.75
37.75
reserve
2.
General
risk
reserve
3.
Distributi - - - -
ons to 170,986, 170,986, 25,031.0 171,011,
owners 732.70 732.70 4 763.74
(sharehol
ders)
4. Others
(IV)
Internal -
21,936,1
transfer 21,936,1
46.46
of 46.46
owners’
equity
1.
Transfer
of capital
reserve
to (share)
capital
76
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
2.
Transfer
of
surplus
reserve
to (share)
capital
3. Make-
up of
losses by
surplus
reserve
4.
Transfer
of
changes
in
defined
benefit
plans to
retained
earnings
5.
Transfer
of other -
compreh 21,936,1 21,936,1
ensive 46.46
46.46
income
to
retained
earnings
6. Others
(V)
Special
reserve
1.
Appropri
ated in
the
current
y ear
2. Used
in the
current
y ear
(VI)
Others
IV.
Balance - 14,576,5 14,670,3
at the 1,709,86 8,099,52 100,479, 111,698, 5,275,51 93,842,2
519,626, 00,325.1 42,539.1
end of 7,327.00 4,872.90 794.32 315.15 5,670.63 14.03
066.21 5 8
the
current
y ear
8. Standalone statement of changes in owners’ equity
2022
In RMB
2022
Item Other equity instruments Less: Other Total
Capital Special Surplus Retained
Share capital Treasury comprehensi Others owners’
Preferred Perpetual reserve reserve reserve profit
Others shares ve income equity
shares bonds
I. Balance at
-
the end of 1,709,867,32 7,961,185,28 100,479,794. 111,698,315. 352,818,601. 9,685,089,73
350,000,000.
the previous 7.00 9.83 32 15 06 8.72
00
y ear
Add:
Changes in
accounting
policies
Correction
of prior
period errors
Others
II. Balance
at the -
beginning of 1,709,867,32 7,961,185,28 100,479,794. 350,000,000. 111,698,315. 352,818,601. 9,685,089,73
7.00 9.83 32 15 06 8.72
the current 00
y ear
III.
Increase/(de
crease) in - -
the current - 25,427,017.0 23,649,519.9
4,538,660.00 128,336,947. 133,404,708.
period 7,828,923.66 1 5
(decrease 97 69
expressed
with “-”)
(I) Total 236,495,199. 241,033,859.
comprehensi 4,538,660.00
45 45
ve income
(II)
Investment/( -
- 25,427,017.0
divestment) 33,255,940.6
7,828,923.66 1
by 7
shareholders
1.
Contribution -
s from 49,990,856.1
49,990,856.1
holders of 7
7
ordinary
shares
2.
Contribution
s from
holders of
other equity
instruments
3. Share- 16,734,915.5 16,734,915.5
based 0 0
77
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
pay ments
recorded in
owners’
equity
- -
4. Others 24,563,839.1 24,563,839.1
6 6
(III) - -
23,649,519.9
Distribution 364,832,147. 341,182,627.
5
of profits 42 47
-
1. Surplus 23,649,519.9
23,649,519.9
reserve 5
5
2.
Distributions - -
to owners 341,182,627. 341,182,627.
(shareholder 47 47
s)
3. Others
(IV) Internal
transfer of
owners’
equity
1. Transfer
of capital
reserve to
(share)
capital
2. Transfer
of surplus
reserve to
(share)
capital
3. Make-up
of losses by
surplus
reserve
4. Transfer
of changes
in defined
benefit plans
to retained
earnings
5. Transfer
of other
comprehensi
ve income to
retained
earnings
6. Others
(V) Special
reserve
1.
Appropriate
d in the
current y ear
2. Used in
the current
y ear
(VI) Others
IV. Balance -
at the end of 1,709,867,32 7,953,356,36 125,906,811. 135,347,835. 224,481,653. 9,551,685,03
345,461,340.
the current 7.00 6.17 33 10 09 0.03
00
y ear
2021
In RMB
2021
Item Other equity instruments Less: Other Total
Capital Special Surplus Retained
Share capital reserve Treasury comprehensi reserve reserve profit Others owners’
Preferred Perpetual shares ve income equity
Others
shares bonds
I. Balance at -
1,709,867,32 7,961,185,28 75,205,377.4 195,368,894. 9,591,626,88
the end of 7.00 9.83 350,000,000. 0 02 8.25
the previous 00
y ear
Add:
Changes in
accounting
policies
Correction
of prior
period errors
Others
II. Balance -
at the 1,709,867,32 7,961,185,28 75,205,377.4 195,368,894. 9,591,626,88
7.00 9.83 350,000,000. 0 02 8.25
beginning of 00
the current
y ear
III.
Increase/(de
crease) in 100,479,794. 36,492,937.7 157,449,707. 93,462,850.4
the current 32 5 04 7
period
(decrease
expressed
with “-”)
(I) Total 364,929,377. 364,929,377.
comprehensi 49 49
ve income
(II) -
Investment/( 100,479,794.
32 100,479,794.
divestment) 32
by
shareholders
1. -
Contribution 100,479,794.
100,479,794.
s from 32
32
holders of
ordinary
78
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
shares
2.
Contribution
s from
holders of
other equity
instruments
3. Share-
based
pay ments
recorded in
owners’
equity
4. Others
36,492,937.7 - -
(III) 207,479,670. 170,986,732.
Distribution 5
45 70
of profits
-
36,492,937.7
1. Surplus 36,492,937.7
5
reserve 5
2. - -
Distributions 170,986,732. 170,986,732.
to owners 70 70
(shareholder
s)
3. Others
(IV) Internal
transfer of
owners’
equity
1. Transfer
of capital
reserve to
(share)
capital
2. Transfer
of surplus
reserve to
(share)
capital
3. Make-up
of losses by
surplus
reserve
4. Transfer
of changes
in defined
benefit plans
to retained
earnings
5. Transfer
of other
comprehensi
ve income to
retained
earnings
6. Others
(V) Special
reserve
1.
Appropriate
d in the
current y ear
2. Used in
the current
y ear
(VI) Others
IV. Balance -
1,709,867,32 7,961,185,28 100,479,794. 111,698,315. 352,818,601. 9,685,089,73
at the end of 7.00 9.83 32
350,000,000.
15 06 8.72
the current 00
y ear
III. General Information of the Company
Suzhou Dongshan Precision Manufacturing Co., Ltd. (the “Company”) is a company limited by shares converted from Suzhou
Dongshan Sheet Metal Co., Ltd., which was registered with the Wuxian Municipal Administration for Industry and Commerce on
October 28, 1998 and converted into the Company on September 30, 2007 (reference date). The Company was registered with the
Suzhou Municipal Administration for Industry and Commerce of Jiangsu on December 24, 2007, and is headquartered in Suzhou,
Jiangsu, holds a business license with unified social credit code of 91320500703719732P, and has a registered capital of
RMB1709867327.00, divided into 1,709,867,327 shares with a par value of RMB 1 each, of which, 319,591,987 shares are non-
tradable A shares, and 1,390,275,340 shares are tradable A shares. The Company’s shares have been listed and traded on the Shenzhen
Stock Exchange since April 9, 2010.
The Company belongs to the computer, communication and other electronic equipment manufacturing industry, and is primarily
engaged in the provision of core devices for intelligent interconnection, including PCBs, LED display devices, touch panels, LCMs,
precision components, etc.
79
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
These financial statements are published with the approval of the 33th meeting of the 5th Board of Directors of the Company on April
19, 2023.
66 subsidiaries and sub-subsidiaries are included in the scope of the consolidated financial statements for the reporting period, including
Multi-Fineline Electronix Inc. (“MFLEX”), Multek Group (Hong Kong) Limited (“Multek”) and Yancheng Dongshan Precision
Manufacturing Co., Ltd. (“Yancheng Dongshan”). See Notes VIII and IX to the financial statements for details.
IV. Basis for Preparation of the Financial Statements
1. Basis for preparation
These financial statements have been prepared on the assumption that the Company is a going concern.
2. Going concern
There is no event or fact that may cast significant doubts on the Company’s ability to remain a going concern within 12 months after
the end of the reporting period.
V. Significant Accounting Policies and Accounting Estimates
Note about specific accounting policies and accounting estimates:
Important note: The Company has established the specific accounting policies and made the specific accounting estimates with respect
to the impairment of financial instruments, depreciation of fixed assets, amortization of intangible assets, recognition of revenues and
other transactions and events according to its actual production and operation characteristics.
1. Statement of compliance with the China Accounting Standards for Business Enterprises (“CASBE”)
The financial statements prepared by the Company conform to the requirements of the CASBE and truly and completely reflect the
Company’s financial condition, operating results, cash flows and other related information.
2. Accounting period
The Company’s accounting year is from January 1 to December 31 of each calendar year.
3. Operating cycle
The Company has a relatively short operating cycle, and determines the liquidity of assets and liabilities on the basis of 12 months.
4. Functional currency
The Company adopts RMB as its functional currency, MFLEX adopts USD as its functional currency, and the subsidiaries of MFLEX,
Multek and other companies adopt the currencies of the main economic environment in which they operate as their functional currencies.
5. Accounting treatment of business combinations involving entities under common control and not under
common control
1. Accounting treatment of business combinations involving entities under common control
Assets and liabilities acquired from a business combination by the Company are measured at the carrying value of the assets a nd
liabilities of the acquiree in the consolidated financial statements of the ultimate controller at the combination date. The difference
between the carrying value of the owners’ equity of the acquiree as stated in the consolidated financial statements of the ultimate
controller and the carrying value of the total consideration paid or total par value of the shares issued in connection with the combination
80
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
is treated as an adjustment to the capital reserve. In case the capital reserve is not sufficient to absorb the difference, the remaining
balance is charged against the retained earnings.
2. Accounting treatment of business combinations involving entities not under common control
Where the cost of combination exceeds the Company’s share of the fair value of the acquiree’s identifiable net assets, the difference is
recognized as goodwill at the acquisition date. Where the cost of combination is lower than the Company’s share of the fair value of
the acquiree’s identifiable net assets, the Company reviews the measurement of the fair value of each of the identifiable assets, liabilit ies
and contingent liabilities acquired from the acquiree and the cost of combination, and if the cost of combination as reviewed is still
lower than the Company’s share of the fair value of the acquiree’s identifiable net assets, the difference is recognized in profit or loss.
6. Method of preparation of consolidated financial statements
The parent includes all of its controlled subsidiaries in its consolidated financial statements. The consolidated financial statements are
prepared by the parent in accordance with CASBE 33 “Consolidated Financial Statements”, on the basis of the respective financial
statements of the parent and its subsidiaries, by reference to other relevant data.
7. Classification of joint arrangements and accounting treatment of joint operations
1. Joint arrangements are classified into joint operations and joint ventures.
2. When the Company is a party to a joint operation, the Company recognizes the following items relating to its interest in the joint
operation:
(1) the assets individually held by the Company, and the Company’s share of the assets held jointly;
(2) the liabilities incurred individually by the Company, and the Company’s share of the liabilities incurred jointly;
(3) the Company’s revenue from the sale of its share of output of the joint operation;
(4) the Company’s share of revenue from the sale of assets by the joint operation; and
(5) the expenses incurred individually by the Company, and the Company’s share of the expenses incurred jointly.
8. Recognition of cash and cash equivalents
For the purpose of the statement of cash flows, cash comprises cash on hand and demand deposits, and cash equivalents compris e
short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignific ant
risk of changes in value.
9. Translation of foreign currency transactions and foreign currency financial statements
1. Translation of foreign currency transactions
Upon initial recognition, foreign currency transactions are translated into RMB using the exchange rates prevailing at the transaction
dates. At the balance sheet date, monetary items denominated in foreign currencies are translated into RMB using the spot exc hange
rates at the balance sheet date. Exchange differences arising from such translations are recognized in profit or loss, except for those
attributable to foreign currency borrowings that have been taken out specifically for the acquisition or construction of qualifying assets
and accrued interest. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using
the foreign exchange rates prevailing at the transaction dates, without adjusting the amounts in RMB. Non-monetary items denominated
in foreign currencies that are measured at fair value are translated using the foreign exchange rates prevailing at the dates the fair value
was determined, with the exchange differences arising from such translations recognized in profit or loss or other comprehensive
income.
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2. Translation of foreign currency financial statements
The asset and liability items on the balance sheet are translated at the spot exchange rates prevailing at the balance sheet date. The
owners’ equity items other than “retained profits” are translated at the spot exchange rates prevailing at the transaction dates. The
income and expense items in the income statements are translated at the spot exchange rates prevailing at the transaction dates. The
differences arising from such translation of foreign currency financial statements are recognized in other comprehensive income.
10. Financial instruments
1. Classification of financial assets and financial liabilities
Upon initial recognition, financial assets are classified into: (1) financial assets at amortized cost; (2) financial assets at fair value
through other comprehensive income; and (3) financial assets at fair value through profit or loss.
Upon initial recognition, financial liabilities are classified into: (1) financial liabilities at fair value through profit or loss; (2) financial
liabilities arising as a result of transfer of financial assets not meeting the criteria for derecognition or continuing involvement in the
financial assets transferred; (3) financial guarantee contracts not falling under items (1) and (2), and loan commitments not falling
under item (1) and below market interest rate; and (4) financial liabilities at amortized cost.
2. Recognition, measurement and derecognition of financial assets and financial liabilities
(1) Recognition and initial measurement of financial assets and financial liabilities
When the Company becomes a party to a financial instrument contract, a financial asset or liability is recognized. Financial assets and
liabilities are initially measured at fair value. Transaction costs relating to financial assets or liabilities at fair value through profit or
loss are directly recognized in profit or loss. Transaction costs relating to other kinds of financial assets or liabilities are included in
their initially recognized amount. However, the accounts receivable that do not contain any significant financing component or are
recognized by the Company without taking into consideration the significant financing components under the contracts with a term of
less than one year upon initial recognition are initially measured at transaction price as defined in CASBE 14 “Revenue”.
(2) Subsequent measurement of financial assets
1) Financial assets at amortized cost
Financial assets at amortized cost are subsequently measured at amortized cost using the effective interest method. Gains or losses on
financial assets at amortized cost that do not belong to any hedging relationship are recognized in profit or loss upon derecognition,
reclassification, amortization using the effective interest method or recognition of impairment.
2) Investments in debt instruments at fair value through other comprehensive income
Investments in debt instruments at fair value through other comprehensive income are subsequently measured at fair value. Interest,
impairment losses or gains and exchange gains or losses calculated using the effective interest method are recognized in profit or loss,
other gains or losses are recognized in other comprehensive income. Upon derecognition, the aggregate gains or losses previously
recognized in other comprehensive income are transferred to profit or loss.
3) Investments in equity instruments at fair value through other comprehensive income
Investments in equity instruments at fair value through other comprehensive income are subsequently measured at fair value. Dividend s
received (other than those received as recovery of investment cost) are recognized in profit or loss, other gains or losses a re recognized
in other comprehensive income. Upon derecognition, the aggregate gains or losses previously recognized in other comprehensive
income are transferred to retained earnings.
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4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are subsequently measured at fair value. Gains or losses thereon, including interest
and dividend income, are recognized in profit or loss, except the financial assets belonging to any hedging relationship.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading (including derivatives classified as
financial liabilities), and financial liabilities directly designated as at fair value through profit or loss. Such financial liabilities are
subsequently measured at fair value. Changes in the fair value of financial liabilities designated as at fair value through profit or loss
arising out of changes in the Company’s credit risk are recognized in other comprehensive income, unless such treatment will result in
or increase any accounting mismatch in profit or loss. Other gains or losses on such financial liabilities, including interest expenses
and changes in fair value not arising out of changes in the Company’s credit risk, are recognized in profit or loss, except the financial
liabilities belonging to any hedging relationship. Upon derecognition, the aggregate gains or losses previously recognized in other
comprehensive income are transferred to retained earnings.
2) Financial liabilities arising as a result of transfer of financial assets not meeting the criteria for derecognition or continuing
involvement in the financial assets transferred
Such financial liabilities are measured in accordance with CASBE 23 “Transfer of Financial Assets”.
3) Financial guarantee contracts not falling under items 1) and 2), and loan commitments not falling under item 1) and below market
interest rate
Such financial liabilities are subsequently measured at the higher of ① allowance for impairment losses determined according to the
policy for impairment of financial instruments; and ② balance of the initially recognized amount after deduction of the accumulated
amortization determined in accordance with CASBE 14 “Revenue”.
4) Financial liabilities at amortized cost
Financial liabilities at amortized cost are subsequently measured at amortized cost using the effective interest method. Gains or losses
on financial liabilities at amortized cost that do not belong to any hedging relationship are recognized in profit or loss upon
derecognition or amortization using the effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
① the contractual right to receive cash flows from the financial assets has expired; or
② the financial assets have been transferred and such transfer meets the criteria for derecognition of financial assets as set forth in
CASBE 23 “Transfer of Financial Assets”.
2) A financial liability (or part thereof) is derecognized when all or part of the outstanding obligations thereon have been discharged.
3. Determination and measurement of financial assets transferred
When a financial asset of the Company is transferred, if substantially all the risks and rewards incidental to the ownership of the
financial asset have been transferred, the financial asset is derecognized, and the rights and obligations incurred or retained in such
transfer are separately recognized as assets or liabilities (as the case may be); if the Company has retained substantially all the risks
and rewards incidental to the ownership of the financial asset, the Company continues to recognize the financial asset transferred. If
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the Company neither transferred nor retained a substantial portion of all risks and rewards incidental to the ownership of the financial
asset, then: (1) if the Company does not retain control over the financial asset, the financial asset is derecognized, and the rights and
obligations incurred or retained in such transfer are separately recognized as assets or liabilities (as the case may be); or (2) if the
Company retains control over the financial asset, the financial asset continues to be recognized to the extent of the Company ’s
continuing involvement in the financial asset transferred, and a corresponding liability is recognized.
If an entire transfer of a financial asset meets the criteria for derecognition, the difference between (1) the carrying value of the financial
asset transferred at the date of derecognition; and (2) the sum of the consideration received from the transfer and the portion of the
cumulative amount of changes in fair value directly recorded as other comprehensive income originally that corresponds to the part
derecognized (where the financial asset transferred is an investment in debt instruments at fair value through other comprehe nsive
income) is recognized in profit or loss. If part of a financial asset is transferred and the part transferred entirely meets the criteria for
derecognition, the total carrying value of the financial asset immediately prior to the transfer is allocated between the part derecognized
and the part not derecognized in proportion to their relative fair value at the date of transfer, and the difference between (1) the carrying
value of the part derecognized; and (2) the sum of the consideration received from the transfer of the part derecognized and the portion
of the cumulative amount of changes in fair value directly recorded as other comprehensive income originally that corresponds to the
part derecognized (where the financial asset transferred is an investment in debt instruments at fair value through other comprehensive
income) is recognized in profit or loss.
4. Determination of fair value of financial assets and financial liabilities
The Company adopts the valuation techniques applicable to the current situations and with sufficient data available and support of
other information, to determine the fair value of financial assets and financial liabilities. The Company classifies the inputs used by the
valuation techniques in the following levels and uses them in turn:
(1) Level 1 inputs: quoted market price (unadjusted) in an active market for an identical asset or liability available at the date of
measurement;
(2) Level 2 inputs: inputs other than inputs included within Level 1 that are observable directly or indirectly. This category includes
quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive
markets, observable inputs other than quoted prices (such as interest rate and yield curves observable during regular interva ls of
quotation), and inputs validated by the market;
(3) Level 3 inputs: inputs that are unobservable. This category includes interest rate or stock volatility that cannot be directly observed
or validated by observable market data, future cash flows from retirement obligation incurred in business combinations, and financial
forecasts made using own data.
5. Impairment of financial instruments
(1) Measurement and accounting treatment of impairment of financial instruments
The Company determines the impairment and assesses allowance for impairment losses of financial assets at amortized cost,
investments in debt instruments at fair value through other comprehensive income, lease payments receivable, loan commitments other
than financial liabilities designated at fair value through profit or loss, and financial guarantee contracts other than financial liabilit ies
designated at fair value through profit or loss and financial liabilities arising as a result of the transfer of financial assets not meeting
the criteria for derecognition or continuing involvement in the financial assets transferred, on the basis of expected credit losses.
Expected credit loss is the weighted average of credit losses on financial instruments taking into account the possibility of default.
Credit loss is the present value of the difference between all contractual cash flows receivable under the contract and estimated future
cash flows discounted at the original effective interest rate, i.e., the present value of all cash shortages, where the Company’s purchased
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or originated financial assets that have become credit impaired are discounted at their credit-adjusted effective interest rate.
With respect to purchased or originated financial assets that have become credit impaired, at the balance sheet date, the Company
recognizes an impairment loss equal to the cumulative amount of changes in lifetime expected credit losses since initial recognition.
With respect to accounts receivable arising from transactions within the meaning of CASBE 14 “Revenue” that do not contain any
significant financing component or are recognized by the Company without taking into consideration the significant financing
components under the contracts with a term of less than one year, the Company uses the simplified measurement method and recognizes
an impairment loss equal to the lifetime expected credit losses.
With respect to financial assets not using the measurement methods stated above, at each balance sheet date, the Company asse sses
whether the credit risk has increased significantly since initial recognition, and recognizes an impairment loss equal to the lifetime
expected credit losses if the credit risk has increased significantly since initial recognition, or to the expected credit losses within the
next 12 months if the credit risk has not increased significantly since initial recognition.
The Company uses reasonable and supportable information, including forward-looking information, and compares the possibility of
default at the balance sheet date with the possibility of default upon initial recognition, to determine whether the credit risk of the
financial instruments has increased significantly since initial recognition.
At the balance sheet date, if the Company determines that a financial instrument has low credit risk, the Company assumes that its
credit risk has not increased significantly since initial recognition.
The Company assesses expected credit risk and measures expected credit losses of financial instruments individually or collec tively.
When assessing the financial instruments collectively, the Company includes the financial instruments in different groups according to
their common risk characteristics.
At each balance sheet date, the Company re-assesses the expected credit losses, with the amount of increase in or reversal of impairment
loss recognized in profit or loss as impairment losses or gains. With respect to a financial asset at amortized cost, its carrying value
recorded on the balance sheet is written off against the impairment loss. With respect to an investment in debt instruments at fair value
through other comprehensive income, the Company recognizes the impairment loss in other comprehensive income, without reducing
its carrying value.
(2) Financial instruments for which expected credit risk is assessed collectively and expected credit losses are measured using the three-
stage model
Item Basis for grouping Method for measuring expected credit losses
Other receivables – aging group Aging By reference to historical credit loss experience, and
taking into account the current situations and
prediction of future economic conditions, calculate the
Other receivables - related parties within
Consolidated related parties expected credit losses according to the default risk
the scope of consolidation
exposure and rate of expected credit loss within the
next 12 months or over the lifetime.
(3) Accounts receivable for which expected credit losses are measured collectively using the simplified approach
1) Groups and method for measuring expected credit losses
Item Basis for grouping Method for measuring expected credit losses
Banker’s acceptance bills receivable Type of bills By reference to historical credit loss experience, and
taking into account the current situations and
prediction of future economic conditions, calculate the
Commercial acceptance bills receivable expected credit losses according to the default risk
exposure and rate of lifetime expected credit loss.
By reference to historical credit loss experience, and
Accounts receivable – aging group Age
taking into account the current situations and
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prediction of future economic conditions, prepare a
comparison table of the age of accounts receivable and
rate of lifetime expected credit loss, and calculate the
expected credit losses.
By reference to historical credit loss experience, and
taking into account the current situations and
Accounts receivable - related parties
Consolidated related parties prediction of future economic conditions, calculate the
within the scope of consolidation
expected credit losses according to the default risk
exposure and rate of lifetime expected credit loss.
By reference to historical credit loss experience, and
taking into account the current situations and
Long-term accounts receivable – group of
Nature of accounts prediction of future economic conditions, calculate the
security deposit
expected credit losses according to the default risk
exposure and rate of lifetime expected credit loss.
2) Accounts receivable - comparison table of the age and rate of lifetime expected credit loss
Age Rate of expected credit loss on accounts receivable (%)
Within 6 months (inclusive, the same below) 0.5
7-12 months 5
1-2 years 20
2-3 years 60
Over 3 years 100
6. Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset and presented on a net basis on the balance sheet only if: (1) the Company has a
currently enforceable legal right to offset the recognized amounts; and (2) the Company has an intention to settle on a net basis, or
realize the assets and settle the liabilities simultaneously. Except as stated above, financial assets and financial liabilities are presented
on the balance sheet separately, without offsetting each other.
With respect to the transfer of financial assets not meeting the criteria for derecognition, the Company does not offset the financial
assets transferred against the relevant liabilities.
11. Inventories
1. Classification of inventories
Inventories include finished products or goods held for sale in the ordinary course of business, work in progress and materia ls and
goods consumed in the process of production or rendering of services.
2. Calculation of the price of inventories dispatched
The price of inventories dispatched is calculated using the weighted average method at the end of the month in which they were
dispatched.
3. Basis for determination of net realizable value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. An amount equal to the cos t of an
inventory in excess of its net realizable value is recognized as the allowance for impairment of inventories. The net realizable value of
inventories held directly for sale is the estimated selling price of such inventories less the estimated selling expenses and related taxes
in the ordinary course of business. The net realizable value of inventories to be further processed is the estimated selling price of
finished goods less the estimated cost of completion, estimated selling expenses and related taxes in the ordinary course of business.
At the balance sheet date, if part of an inventory has a contract price while the remaining part thereof does not have a contract price,
the net realizable value is determined separately, which is compared with their cost, to determine the amount of the allowance for
impairment of inventories recognized or reversed (as applicable).
4. Inventory system
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The perpetual inventory system is adopted.
5. Amortization of low-value consumables and packing materials
(1) Low-value consumables
Low-value consumables are amortized using the immediate write-off method.
(2) Packing materials
Packing materials are amortized using the immediate write-off method.
12. Contract assets
Contract assets or contract liabilities are presented on the balance sheet according to the relationship between the relevant performance
obligations and payment by the customer. Contract assets and contract liabilities under the same contract are presented on a net basis.
The right of the Company to payment that is unconditional, except for the passage of time, is presented as an account receivable. The
right of the Company to payment for goods already transferred to a customer is presented as a contract asset if that right to payment is
conditional on something other than the passage of time.
13. Contract costs
Assets related to contract costs include contract acquisition cost and contract performance cost.
Contract acquisition costs, i.e., the incremental cost of acquiring a contract, are recognized as an asset if they are expected to be
recovered, and if the amortization period is no more than one year, are directly recorded in profit or loss as incurred.
Contract performance costs, i.e. the costs of fulfilling a contract, are recognized as an asset if they are not addressed by the standards
on inventories, fixed assets and intangible assets and meet all of the following criteria:
1. the costs relate directly to a contract or to an anticipated contract, including direct labor, direct material, manufacturing costs (or
similar costs), costs that are explicitly chargeable to the relevant customer under the contract and other costs incurred solely in
connection with the contract;
2. the costs enhance resources of the Company that will be used in satisfying the performance obligations in the future; and
3. the costs are expected to be recovered.
The assets related to contract costs are amortized on the same basis as the recognition of revenues from goods or services related to
such assets, and recognized in profit or loss.
The portion of the carrying value of an asset related to contract costs in excess of the remaining consideration receivable from the
transfer of goods or service related to such asset less the estimated costs that are expected to be incurred is recognized as an impairment
loss. If, as a result of changes in the factors of impairment in the previous periods, the remaining consideration receivable from the
transfer of goods or service related to such asset less the estimated costs that are expected to be incurred exceeds the carrying value of
such asset, the impairment loss is reversed through profit or loss, provided that the carrying value of the reversed asset shall not exceed
its carrying value at the reversal date assuming such impairment loss were not recognized.
14. Long-term equity investments
1. Criteria for determining joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the re levant
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activities require unanimous consent of the parties sharing control. Significant influence is the power to participate in the financial and
operating policy making of an entity, but is not control or joint control over those policies.
2. Determination of investment cost
(1) In case of an equity investment acquired through a business combination involving entities under common control, if the acquirer
pays consideration for the business combination by cash, transfer of non-monetary assets, assumption of liabilities or issuance of equity
securities, the initial investment cost of the long-term equity investment is the Company’s share of the carrying value of the owners’
equity of the acquiree in the consolidated financial statements of the ultimate controller at the date of combination. The difference
between: (i) the initial investment cost of the long-term equity investment; and (ii) the carrying value of the consideration paid for the
combination or the total par value of the shares issued (as applicable) is treated as an adjustment to the capital reserve. In case the
capital reserve is not sufficient to absorb the difference, the remaining balance is charged against the retained earnings.
If a business combination is achieved through multiple transactions by steps that constitute a package deal, the Company accounts for
such transactions as one transaction to acquire control. If such transactions do not constitute a package deal, the initial investment cost
is the Company’s share of the carrying value of the owners’ equity of the acquiree in the consolidated financial statements of the
ultimate controller at the date of combination; and the difference between: (i) the initial investment cost of the long-term equity
investment at the date of combination; and (ii) the sum of the carrying value of long-term equity investment before the combination
and the carrying value of the consideration paid for acquisition of the additional shares at the date of combination is treated as an
adjustment to the capital reserve. In case the capital reserve is not sufficient to absorb the difference, the remaining bala nce is charged
against the retained earnings.
(2) In case of an equity investment acquired through a business combination involving entities not under common control, the initial
investment cost is the fair value of the aggregate consideration paid at the date of acquisition.
With respect to a long-term equity investment acquired through a business combination involving entities under common control that
is achieved through multiple transactions by steps, the accounting thereof in the standalone financial statements is different from that
in the consolidated financial statements as stated below:
1) In the standalone financial statements, the sum of the carrying value of the equity investment originally held in the acquiree and the
additional investment cost incurred is recorded as the initial investment cost of the equity investment changed into the cost method.
2) In the consolidated financial statements, if the transactions constitute a package deal, the Company accounts for such tra nsactions
as one transaction to acquire control. If such transactions do not constitute a package deal, the Company remeasures the fair value of
the equity held in the acquiree prior to the date of acquisition, and records the difference between the fair value and the c arrying value
as investment income for the current period; if the equity held in the acquiree prior to the date of acquisition involves other
comprehensive income under equity method, such other comprehensive income is transferred to the income of the period in which the
date of acquisition falls, except for other comprehensive income arising from remeasurement of changes in net liabilities or net assets
of defined benefit plans.
(3) In case of an equity investment not acquired through business combination, the initial investment cost is the purchase price actually
paid if it is acquired by cash, or the fair value of the equity securities issued if it is acquired through issuance of equity securities, or in
accordance with CASBE 12 “Debt Restructuring” if it is acquired through debt restructuring, or CASBE 7 “Exchange of Non-monetary
Assets” if it is acquired through exchange of non-monetary assets.
3. Subsequent measurement and recognition of profit or loss
Long-term equity investments in investees are accounted for using the cost method. Long-term equity investments in associates and
joint ventures are accounted for using the equity method.
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4. Disposal of investment in a subsidiary through multiple transactions by steps until loss of control over the subsidiary
(1) Standalone financial statements
The difference between the carrying value of the equity disposed of and the disposal proceeds actually received is recognized in profit
or loss. If the remaining equity empowers the Company to exercise significant influence or joint control over the investee, the remaining
equity is accounted for using the equity method; if the remaining equity does not empower the Company to exercise control, jo int
control or significant influence over the investee, the remaining equity is accounted for in accordance with CASBE 22 “Recognition
and Measurement of Financial Instruments”.
(2) Consolidated financial statements
1) Disposal of investment in a subsidiary through multiple transactions by steps until loss of control over the subsidiary which do not
constitute a package deal. Prior to the loss of control, the difference between the disposal proceeds and the share owned by the Company
in the net assets of the subsidiary in relation to the long-term equity investment disposed of that is calculated continuously from the
date of acquisition or combination is treated as an adjustment to the capital reserve (share premium). In case the capital reserve is not
sufficient to absorb the difference, the remaining balance is charged against the retained earnings. When losing control over a subsidiary,
the remaining equity is remeasured at its fair value at the date of loss of control. The sum of the consideration received from the disposal
of the equity and the fair value of the remaining equity, net of the share owned by the Company in the net assets of the subsidiary in
relation to the long-term equity investment disposed of as calculated continuously from the date of acquisition according to the previous
shareholding ratio, is recognized in the investment income for the period in which the control is lost, and the goodwill is written down
accordingly. Other comprehensive income relating to the equity investment in the subsidiary is transferred to the investment income
for the period in which the control was lost.
2) Disposal of investment in a subsidiary through multiple transactions by steps until loss of control over the subsidiary which constitute
a package deal. The Company accounts for such transactions as one transaction to dispose of and lose its control over the subsidiary;
however, the difference between the proceeds from each disposal before loss of control and the share owned by the Company in the
net assets of the subsidiary in relation to the investment disposed of is recognized in other comprehensive income in the consolidated
financial statements, which is wholly transferred to the profit or loss in the period in which the control is lost.
15. Investment property
Measurement model for investment property
Measured at cost
Method of depreciation or amortization
1. Investment properties include land use right leased out or held for appreciation and buildings and structures leased out.
2. An investment property is measured initially at cost, and subsequently using the cost model, and depreciated or amortized using the
same method as fixed assets and intangible assets.
16. Fixed assets
(1) Criteria for recognition
Fixed assets are tangible assets held for production of goods, rendering of service, lease or operation and management with a useful
life of more than one accounting year. A fixed asset is recognized if the economic benefits relating to it are very likely to flow to the
Company and its cost can be reliably measured.
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(2) Depreciation
Estimated useful Rate of residual Annual rate of
Category Method of depreciation
life (years) value depreciation
Buildings and structures Straight-line method 20-30 0.05 3.17%-4.75%
Machinery and equipment Straight-line method 5-10 0.05 9.50%-19.00%
Transportation equipment Straight-line method 5 0.05 0.19
Office equipment and others Straight-line method 5 0.05 0.19
17. Construction in progress
1. A construction in progress is recognized if the economic benefits relating to it are very likely to flow to the Company and its cost
can be reliably measured. A construction in progress is measured at the actual cost incurred before it is completed and ready for intended
use.
2. When a construction in progress is ready for intended use, it is transferred to fixed assets at its actual construction cost. A construction
in progress that is ready for intended use but the final settlement of which has not yet been completed is transferred to fixed assets at
estimated value first, and after the completion of final settlement, the estimated value is adjusted according to the actual cost, without
adjusting the accumulated depreciation.
18. Borrowing costs
1. Recognition of capitalization of borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part
of the cost of the asset when they meet the condition for capitalization. Other borrowing costs are expensed when they are incurred and
recognized in profit or loss.
2. Period of capitalization of borrowing costs
(1) A borrowing cost is capitalized when all of the following conditions are satisfied: 1) the expenditures on the asset have already been
incurred; 2) the borrowing cost has already been incurred; and 3) the acquisition, construction or production activities necessary to
prepare the asset for its intended use or sale have already commenced.
(2) Capitalization of borrowing costs is suspended during the period of abnormal interruption of acquisition, construction or production
of a qualifying asset which lasts for more than three consecutive months. The borrowing costs incurred during the period of suspension
are recognized as expenses for the current period. The capitalization of borrowing costs is suspended until the resumption of acquisition,
construction or production activities.
(3) Capitalization of borrowing costs ceases when a qualifying asset acquired, constructed or produced gets ready for its intended use
or sale.
3. Rate and amount of capitalization of borrowing costs
For borrowings obtained specially for the acquisition, construction or production of a qualifying asset, the amount of capitalization of
the borrowing costs is the cost of the borrowings actually incurred in the current period (including amortized discount or premium
determined using the effective interest method) less the interest income from the part of borrowings that has not yet been utilized and
is deposited in banks or investment income from temporary investment of the borrowings. For ordinary borrowings occupied for the
acquisition, construction or production of a qualifying asset, the amount of borrowing costs eligible for capitalization is determined by
multiplying the weighted average of the excess of cumulative expenditures on the asset over the special borrowings by the rate of
capitalization of the ordinary borrowings occupied.
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19. Right-of-use assets
A right-of-use asset is initially measured at cost, which comprise: 1) the amount of the lease liability initially measured; 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) estimated 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 assets using the straight-line method. If it is reasonable to be certain that the ownership of
an 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.
20. Intangible assets
(1) Measurement, useful life and impairment test
1. Intangible assets, including land use right, patents, non-patent technologies, etc., are initially measured at cost.
2. An intangible asset with a finite useful life is amortized in a systematic and reasonable manner according to the pattern in which the
economic benefits related to the intangible asset are expected to be realized, or if that pattern cannot be determined reliably, using the
straight-line method as follows:
Item Amortization period (years)
Land use right 50
Development costs 5
Software 3
Trademarks and patents 10
(2) Accounting policy for e xpenditures on internal research and development projects
Expenditures on an internal research and development project at research phase are recognized in profit or loss as incurred.
Expenditures on an internal research and development project at development phase are recognized as an intangible asset if: 1) it is
technically feasible to complete the intangible asset so that it will be available for use of sale; 2) it is intended to complete the intangible
asset so that it will be available for use of sale; 3) the pattern in which the intangible asset will generate economic results 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) there are sufficient technical, financial and other resources available to complete the
development activities and to use or sell the intangible asset; and 5) the expenditures attributable to the development of the intangible
asset can be reliably measured.
21. Impairment of long-term assets
With respect to long-term equity investments, fixed assets, construction in progress, intangible assets with a finite useful life and other
long-term assets, if there’s an indication of impairment at the balance sheet date, the Company assesses their recoverable amount.
Goodwill arising from business combinations and intangible assets with an infinite useful life are tested for impairment every year
regardless of whether there’s an indication of impairment. Goodwill is tested for impairment together with the relevant groups of assets
or combinations of groups of assets.
If the recoverable amount of a long-term asset is less than its carrying value, the difference is measured as impairment loss on the
asset and recognized in profit or loss.
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22. Long-term deferred expenses
Long-term deferred expenses are expenses that have already been incurred but should be amortized over a period of more than one
year. Long-term deferred expenses are stated at the amount actually incurred, and equally amortized over the benefit period or
established period. If an item of long-term deferred expenses will not benefit the subsequent periods, the remaining unamortized balance
of the item is wholly transferred to profit or loss.
23. Contract liabilities
Contract assets or contract liabilities are presented on the balance sheet according to the relationship between the relevant performance
obligations and payment by the customer. Contract assets and contract liabilities under the same contract are presented on a net basis.
The Company’s obligation to transfer goods to a customer in exchange for the consideration paid or payable by the customer is
presented as a contract liability.
24. Employee benefits
(1) Accounting treatment of short-term employee benefits
The short-term employee benefits actually incurred are recognized as liabilities in the accounting period during which employee
services are rendered, and included in profit or loss or the cost of related assets.
(2) Accounting treatment of post-employment benefits
Post-employment benefits are classified into defined contribution plans and defined benefit plans.
(1) In the accounting period during which employee services are rendered, the amount contributable as calculated according to the
defined contribution plan is recognized as liabilities and included in profit or loss or the cost of related assets.
(2) The accounting treatment of a defined benefit plan generally involves the following steps:
1) According to the projected unit credit method, use the unbiased and consistent actuarial assumptions to estimate demographic
variables and financial variables, measure the obligation arising from the defined benefit plan and determine the period to which the
relevant obligation belongs. Meanwhile, discount the obligation arising from the defined benefit plan, in order to determine the present
value of the benefit plan obligation and the current service cost;
2) If the defined benefit plan has assets, the deficit or surplus resulting after reducing the present value of the defined benefit obligation
by the fair value of the defined benefit plan is recognized as a net liability or asset of the defined benefit plan. If the defined benefit
plan has a surplus, the net assets of the defined benefit plan are measured at the lower of surplus in the defined benefit plan and asset
ceiling;
3) At the end of the current period, the cost of employee benefits arising from the defined benefit plan is recorded as service cost, net
interest on the net liabilities or net assets of the defined benefit plan, and changes arising from remeasurement of the net liabilities or
net assets of the defined benefit plan, where the service cost and the net interest on the net liabilities or net assets of the defined benefit
plan are included in profit or loss or the cost of related assets, and the changes arising from remeasurement of the net liabilities or net
assets of the defined benefit plan are included in other comprehensive income, which will not be reversed to profit or loss in subsequent
periods, but may be transferred within the scope of equity.
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(3) Accounting treatment of termination benefits
When the Company can no longer withdraw the offer of termination benefits as a result of termination of employment or redunda ncy,
or recognizes the restructuring costs or expenses relating to payment of termination benefits, whichever the earlier, the employee benefit
liabilities arising from recognition of termination benefits are recognized in profit or loss.
(4) Accounting treatment of other long-term employee benefits
Other long-term employee benefits are accounted for in accordance with the provisions applicable to defined contribution plans if they
are qualified as defined contribution plans, otherwise, are accounted for in accordance with the provisions applicable to defined benefit
plans. In order to simplify the accounting, the total net amount of the cost of employee benefits arising from the defined be nefit plans
that is recorded as service cost, net interest on the net liabilities or net assets of the defined benefit plan, changes arising from
remeasurement of the net liabilities or net assets of the defined benefit plan and other components is included in profit or loss or the
cost of related assets.
25. Provisions
1. Provisions are recognized when the Company has a present obligation as a result of any external guarantee, litigations, product
quality warranty, onerous contract or other contingencies, and it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation, and the amount of the obligation can be reliably measured.
2. Provisions are initially measured according to the best estimates of the expenditures required to settle the related prese nt obligations.
The carrying value of provisions is reviewed at the balance sheet date.
26. Share-based payments
1. Types of share-based payments
Share-based payments include equity-settled share-based payment and cash-settled share-based payment.
2. Accounting treatment of implementation, amendment and termination of share-based payment plans
(1) Equity-settled share-based payment
With respect to an equity-settled share-based payment that is granted in exchange for the services of employees, if the right can be
immediately exercised after the grant, at the date of grant, the fair value of the equity instruments is included in the relevant costs or
expenses, and the capital reserve is adjusted accordingly; if the right may not be exercised until the vesting period comes to an end or
until the specified performance conditions are met, at each balance sheet date within the vesting period, the services received in the
current period are, based on the best estimate of the exercisable equity, included in the relevant costs or expenses at the fair value of
the equity instruments at the date of grant, and the capital reserve is adjusted accordingly.
An equity-settled share-based payment that is granted in exchange for the services of any other party is measured at fair value at the
date of receipt of such services if the fair value of such services can be reliably measured, or at the fair value of the equity instruments
at the date of receipt of such services if the fair value of such services cannot be reliably measured but the fair value of the equity
instruments can be reliably measured. The services are included in the relevant costs or expenses, and the owners’ equity is increased
accordingly.
(2) Cash-settled share-based payment
With respect to a cash-settled share-based payment that is granted in exchange for the services of employees, if the right can be
immediately exercised after the grant, at the date of grant, the fair value of the liability undertaken by the Company is inc luded in the
relevant costs or expenses, and the liabilities are increased accordingly; if the right may not be exercised until the vesting period comes
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
to an end or until the specified performance conditions are met, at each balance sheet date within the vesting period, the se rvices
received in the current period are, based on the best estimate about the exercisable right, included in the relevant costs or expenses and
the corresponding liabilities at the fair value of the liability undertaken by the Company.
(3) Amendment and termination of share-based payment plans
If such amendment results in an increase in the fair value of the equity instruments granted, the Company recognizes a corresponding
increase in the services received according to the increase in the fair value of the equity instruments. If such amendment results in an
increase in the number of the equity instruments granted, the Company recognizes a corresponding increase in the services rec eived
according to the fair value of the additional equity instruments granted. If the Company amends the vesting conditions in a manner
favorable to the employees, the Company will take into account the vesting conditions as amended in the accounting thereof.
If such amendment results in a decrease in the fair value of the equity instruments granted, the Company continues to recognize the
services received based on the fair value of the equity instruments at the date of grant, without taking into account the decrease in the
fair value of the equity instruments. If such amendment results in a decrease in the number of the equity instruments granted, the portion
of the equity instruments reduced is deemed cancelled. If the Company amends the vesting conditions in a manner unfavorable to the
employees, the Company will not take into account the vesting conditions as amended in the accounting thereof.
If, during the vesting period, the Company cancels or settles any equity instruments granted (except for those cancelled due to failure
to satisfy the vesting conditions), such cancellation or settlement is treated as an acceleration of vesting, and the amount that would
have been recognized in the remaining vesting period is recognized immediately.
27. Revenue
Accounting policies for recognition and measurement of revenue
1. Revenue recognition principle
At contract inception, the Company assesses a contract to identify each single performance obligation included in the contract and
whether such performance obligation shall be satisfied over time or at a point in time.
A performance obligation shall be satisfied over time if it meets one of the following criteria, otherwise, it shall be satisfied at a point
in time: 1) the customer simultaneously receives and consumes the benefits provided by the Company’s performance; 2) the customer
can control the work in process created during the Company’s performance; or 3) the Company’s performance does not create the
goods with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to
date.
With respect to a performance obligation satisfied over time, the Company recognizes revenue over time by measuring the progress
toward complete satisfaction of that performance obligation. If the Company is unable to reasonably measure the progress of a
performance obligation, but expects to recover the costs incurred in satisfying the performance obligation, the Company recognizes
revenue only to the extent of the costs incurred until such time that it can reasonably measure the progress of the performance obligation.
With respect to a performance obligation satisfied at a point in time, the Company recognizes revenue when the customer obtains
control of the relevant goods or service. In determining whether the customer has obtained control of any goods, the Company considers
the following indicators: 1) the Company has a present right to payment for the goods, i.e., the customer presently is obliged to pay for
the goods; 2) the Company has transferred the legal title to the goods to the customer, i.e. the customer has the legal title to the goods;
3) the Company has transferred physical possession of the goods to the customer, i.e. the customer physically possesses the goods; 4)
the Company has passed the significant risks and rewards of ownership of the goods to the customer, i.e. the customer has the significant
risks and rewards of ownership of the goods; 5) the customer has accepted the goods; and 6) other indictors showing that the customer
has obtained control of the goods.
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2. Revenue measurement principle
(1) The Company measures revenue according to the transaction price allocated to each performance obligation. Transaction price is
the amount of consideration to which the Company expects to be entitled in exchange for transferring the relevant goods or services to
a customer, excluding the amounts collected on behalf of third parties or expected to be returned to the customer.
(2) If a contract has any variable consideration, the Company determines the best estimate of the variable consideration according to
the expected value or the most likely amount, but the Company shall include in the transaction price some or all of an amount of
variable consideration only to the extent that it is 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) If a contract contains a significant financing component, the Company determines the transaction price according to the amount
that the customer would have paid for the goods or services if it had paid cash when it obtains control of the goods or services. The
difference between such transaction price and the contract consideration is amortized over the term of the contract using the effective
interest method. The significant financing component contained in a contract will not be considered if the Company expects, at contract
inception, that the period between the time the customer obtains controls of the relevant goods or services and the time the customer
pays for the goods or services will not be longer than one year.
(4) If a contract includes two or more performance obligations, at contract inception, the Company allocates the transaction price to
each performance obligation on a relative standalone selling price basis.
3. Methods of revenue recognition
The Company is primarily engaged in the sale of PCBs, LED display devices, touch panels and LCMs, precision components and other
products, the revenues from which constitute performance obligations to be satisfied at a point in time. Revenue from sale of products
on the domestic market is recognized when the Company has delivered the products to the agreed place of delivery which have been
accepted by the customer, has received or has a present right to payment for the products, and it is probable that the economic benefits
associated with the transaction will flow to the Company. Revenue from sale of products on the overseas market is recognized when
the products delivered by the Company pursuant to the contract have been cleared through customs, and the Company has received the
relevant export declaration form and bill of lading, has received or has a present right to payment for the products, and it is probable
that the economic benefits associated with the transaction will flow to the Company.
28. Government grants
1. Government grants are recognized if 1) the Company meets the conditions attaching to the government grants; and 2) the Company
will receive the government grants. Government grants in the form of monetary assets are measured at the amount received or receivable.
Government grants in the form of non-monetary assets are measured at fair value, or if their fair value is unavailable, at nominal amount.
2. Determination and accounting treatment of government grants related to assets
Government grants related to assets are government grants which are offered for purchasing, constructing or otherwise acquiring long-
term assets as provided by the applicable government documents, or in the absence of such express provision in the applicable
government documents, whose primary condition is that the Company should purchase, construct or otherwise acquire long-term assets.
Government grants related to assets are offset against the carrying value of the relevant assets or recognized as deferred income.
Government grants related to assets recognized as deferred income are included in profit or loss over the service life of the relevant
assets on a reasonable and systemic basis. Government grants measured at nominal amount are directly recognized in profit or loss. In
case of sale, transfer, retirement or damage of the relevant assets before the end of intended service life, the balanc e of the unallocated
deferred income is transferred to profit or loss for the period in which the assets are disposed of.
3. Determination and accounting treatment of government grants related to income
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Government grants related to income are government grants other than those related to assets. Government grants related to both assets
and income where it is difficult to make a distinction between the portion related to assets and the portion related to income are wholly
classified as government grants related to income. Government grants related to income as compensation for expenses or losses to be
incurred in subsequent periods are recognized as deferred income and in the period for recognizing the relevant costs, expenses or
losses, included in profit or loss or offset against the relevant costs. Government grants related to income as compensation for expenses
or losses already incurred are directly included in profit or loss or offset against the relevant costs.
4. Government grants related to day-to-day operations of the Company are recognized in other income or offset against the relevant
costs and expenses depending on the nature of economic business. Government grants not related to day-to-day operations of the
Company are recognized in non-operating revenues or expenses.
5. Accounting treatment of policy loan interest subsidy
(1) If the financial authority appropriates any interest subsidy to the lending bank, which then provides a loan to the Company at the
policy preferential interest rate, the loan is stated at the amount of loan actually received, and the borrowing cost is calculated
according to the principal of the loan and the policy preferential interest rate.
(2) If the financial authority directly appropriates any interest subsidy to the Company, an amount equal to the interest subsidy is
charged against the borrowing cost.
29. Deferred tax assets and deferred tax liabilities
1. The difference between the tax base of an asset or liability and its carrying value, or in case of an item not recognized as asset or
liability whose tax base can be determined according to the applicable tax law, the difference between its tax base and c arrying value,
is recognized as a deferred tax asset or deferred tax liability according to the tax rate applicable to the period in which the asset or
liability is expected to be recovered or settled.
2. Deferred tax assets are recognized to the extent of the amount of income tax payable that will be available in future periods against
which deductible temporary differences are deductible. At the balance sheet date, deferred tax assets not recognized in prior periods
are recognized if there’s conclusive evidence that it is probable that sufficient taxable income will be available in future periods against
which the deductible temporary differences are deductible.
3. At the balance sheet date, the carrying value of deferred tax assets is reviewed and written down to the extent that it is no longer
probable that sufficient taxable income will be available in future periods to allow the benefit of the deferred tax assets to be utilized.
If it is probable that sufficient taxable income will be available, the amount of write-down is reversed.
4. The income taxes and deferred income taxes are included in profit or loss as income tax expenses or gains, except the income taxes
arising from any: 1) business combination; or 2) transaction or event directly recognized in owners’ equity.
30. Leases
(1) Accounting treatment of operating lease
Lease receipts are recognized as lease income using the straight-line method over the lease term. Initial direct costs incurred are
capitalized, amortized on the same basis as the recognition of lease income, and recognized in profit or loss by installments. Variable
lease payments related to operating lease which are not included in the lease receipts are recognized in profit or loss as incurred.
(2) Accounting treatment of finance lease
At the commencement date of a lease, the Company recognizes the finance lease receivable based on the net investment in the lease
(equal to the sum of the present value of unguaranteed residual value and lease receipts that are not received at the commencement
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
date, discounted by the interest rate implicit in the lease), and derecognizes the 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.
31. Other Significant accounting policies and accounting estimates
1. Recognition and accounting treatment of discontinued operation
A discontinued operation is a separately identifiable component that either has been disposed of or is classified as held for sale, and:
(1) represents a separate major line business or geographical area of operations;
(2) is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or
(3) is a subsidiary acquired exclusively with a review to resale.
2. Basis for 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; and 3) the hedging relationship meets the hedging effectiveness requirements. The Company
recognizes that the hedging relationship meets effectiveness requirements if all of the following conditions are met: 1) there is an
economic relationship between the hedged item and the hedging instruments; 2) the effect of credit risk does not dominate the value
changes that result from the economic relationship between the hedged item and the hedging instruments; and 3) 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 to the number of
hedging instruments that the Company actually uses to hedge such hedged item, but does not reflect an imbalance between the
weightings of the hedged item and the hedging instrument.
The Company assesses 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 will be rebalanced.
(3) Hedge accounting
1) Fair value hedge
① The gain or loss on a hedging instrument is 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).
② The gain or loss on a hedged item arising from risk exposure is recognized in profit or loss, with a corresponding adjustment to the
carrying amount of the hedged item not measured at fair value. 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 of the CASBE 22 “Financial Instruments:
Recognition and Measurement”, the gain or loss arising from the risk exposure on the hedged item is recognized in profit or loss,
without adjusting its carrying amount which 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 gain or loss arising from the risk exposure on the hedged item is recognized in profit or loss, without adjusting its carrying
amount which 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 he dged
item subsequent to its designation is recognized as an asset or a liability with a corresponding gain or loss recognized in profit or loss.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
When a firm commitment is performed to acquire an asset or assume a liability, the initial carrying amount of the asset or the liabilit y
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 c arrying
amount of the hedged item is amortized to profit or loss based on a recalculated effective interest rate at the date that amortization
begins. For a financial asset (or a component thereof) that is a hedged item and measured at fair value through other comprehensive
income in accordance with Article XVIII of the CASBE 22 “Financial Instruments: Recognition and Measurement”, the cumulative
gain or loss previously recognized thereon is amortized in the same manner, and recognized in profit or loss, without adjusting its
carrying amount.
2) Cash flow hedges
① The portion of the gain or loss on a hedging instrument that is determined to be an effective hedge is recognized in other
comprehensive income as cash flow hedge reserve, while the ineffective portion is recognized in profit or loss. The cash flow hedge
reserve is recognized at the lower of the following (in absolute amount): A. the cumulative gain or loss on the hedging instrument from
inception of the hedge; and B. the cumulative change in present value of the expected future cash flows of the hedged item from
inception of the hedge.
② If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial 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 transfers out the amount of cash flow hedge reserve previously recognized in other comprehensive
income, and includes it in the initial cost of the asset or the liability.
③ For other cash flow hedges, the amount of cash flow hedge reserve previously recognized in other comprehensive income is
transferred to 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 gain or loss on a hedging instrument that is determined to be an effective hedge is recognized in other comprehensive
income, and reclassified from other comprehensive income into profit or loss on the disposal of the foreign operation, while 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, rewarding its employees or otherwise, if
the purchased shares are to be held as treasury shares, the treasury shares are recorded at the amount actually paid and the relevant
filing procedures are performed; if the repurchased shares are to be retired, the difference between the total book value of the shares
retired and the amount actually paid therefore is recognized as a reduction in capital reserve, and if the capital reserve is not sufficient
to absorb the difference, the remaining balance is charged against the retained earnings. If the repurchased shares are granted to the
employees as equity-settled share-based payments, the purchase price paid by the employees upon exercise of their rights is recognized
as a reduction in the cost of the relevant treasury shares vested in the employees and capital reserve (other capital reserve) accumulated
within the vesting period, with a corresponding adjustment to capital reserve (share premium).
32. Significant changes in accounting policies and accounting estimates
(1) Significant changes in accounting policies
Applicable □ N/A
Changes in accounting policies and
Approval procedures Remark
reasons
The Company adopted the provision The Proposal Regarding Changes in
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
regarding the accounting treatment of Accounting Policies was approved at the
sales of products or byproducts produced 33th meeting of the 5th Board of Directors
before a fixed asset is ready for intended and the 20th meeting of the 5th Board of
use or during the R&D process (“sales at Supervisors of the Company held on April
the stage of trial operation”) set forth in 19, 2023, on which the independent
the Interpretation of the Accounting directors of the Company expressed their
Standards for Business Enterprises No. independent opinion. Pursuant to the
15 issued by the Ministry of Finance since Rules Governing the Listing of Stocks on
January 1, 2022, whereby the sales at the the Shenzhen Stock Exchange and other
stage of trial operation occurred from the relevant provisions, such change in
beginning of earliest period presented in accounting policies is not subject to
the financial statements till January 1, approval of the general meeting.
2022 were retroactively adjusted.
The Company adopted the provision
The Proposal Regarding Changes in
regarding the determination of onerous
Accounting Policies was approved at the
contract set forth in the Interpretation of
33th meeting of the 5th Board of Directors
the Accounting Standards for Business
and the 20th meeting of the 5th Board of
Enterprises No. 15 issued by the Ministry
Supervisors of the Company held on April
of Finance since January 1, 2022, which
19, 2023, on which the independent
applied to all outstanding contracts as of
directors of the Company expressed their
January 1, 2022, with the cumulative
independent opinion. Pursuant to the
effect recognized as an adjustment to the
Rules Governing the Listing of Stocks on
balance of the retained earnings and other
the Shenzhen Stock Exchange and other
related financial statement items at the
relevant provisions, such change in
beginning of the period in which such
accounting policies is not subject to
provision was adopted, without restating
approval of the general meeting.
comparative period financial statements.
The Company adopted the provision
The Proposal Regarding Changes in
regarding the determination of onerous
Accounting Policies was approved at the
contract set forth in the Interpretation of
33th meeting of the 5th Board of Directors
the Accounting Standards for Business
and the 20th meeting of the 5th Board of
Enterprises No. 15 issued by the Ministry
Supervisors of the Company held on April
of Finance since January 1, 2022, which
19, 2023, on which the independent
applied to all outstanding contracts as of
directors of the Company expressed their
January 1, 2022, with the cumulative
independent opinion. Pursuant to the
effect recognized as an adjustment to the
Rules Governing the Listing of Stocks on
balance of the retained earnings and other
the Shenzhen Stock Exchange and other
related financial statement items at the
relevant provisions, such change in
beginning of the period in which such
accounting policies is not subject to
provision was adopted, without restating
approval of the general meeting.
comparative period financial statements.
The Company adopted the provision
regarding the accounting treatment of the
change of cash-settled share-based
The Proposal Regarding Changes in
payment into equity-settled share-based
Accounting Policies was approved at the
payment set forth in the Interpretation of
33th meeting of the 5th Board of Directors
the Accounting Standards for Business
and the 20th meeting of the 5th Board of
Enterprises No. 16 issued by the Ministry
Supervisors of the Company held on April
of Finance since November 30, 2022,
19, 2023, on which the independent
whereby the transactions occurred
directors of the Company expressed their
between January 1, 2022 and November
independent opinion. Pursuant to the
30, 2022 were adjusted according to such
Rules Governing the Listing of Stocks on
provision, and the transactions occurred
the Shenzhen Stock Exchange and other
before January 1, 2022 were retroactively
relevant provisions, such change in
adjusted, with the cumulative effects
accounting policies is not subject to
recognized as adjustment to the balance of
approval of the general meeting.
the retained earnings and other related
items at January 1, 2022, without restating
comparative period financial statements
Such changes in accounting policies did not have a material effect on the Company’s financial statements.
(2) Changes in significant accounting estimates
□ Applicable N/A
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
33. Miscellaneous
(1) Sale and leaseback
1) The Company as lessee
In accordance with CASBE 14 “Revenue”, the Company assesses and determines whether the transfer of any asset in a sale and
leaseback transaction should be 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 value 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 asset, and recognizes a financial liability equal to the amount of
transfer proceeds in accordance with CASBE 22 “Financial Instruments: Recognition and Measurement” at the same time.
2) The Company as lessor
In accordance with CASBE 14 “Revenue”, the Company assesses and determines whether the transfer of any asset in a sale and
leaseback transaction should be 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 CASBE 21 “ Leases”.
Otherwise, the Company does not recognize the transferred asset, instead, recognizes a financial asset equal to the amount of transfer
proceeds in accordance with CASBE 22 “Financial Instruments: Recognition and Measurement”.
VI. Taxation
1. Main categories of taxes and tax rates
Category of tax Tax base Tax rate
The output tax calculated based on revenue from sales of goods or rendering
Value-added tax 13%, 6% or 7%-25% (for the Company’s overseas
of services in accordance with the tax law, net of the input tax deductible in
(VAT) subsidiaries)
the current period
Sales tax Taxable sales 8% (U.S.A.)
Urban maintenance
Amount of turnover tax actually paid 5% or 7% (China)
and construction tax
15%, 16.50%, 25%, 0, 21%, 0.75%-8.84%, 17%,
Enterprise income tax Amount of taxable income
10%、20%, 20.6%, 24% or 30%
If levied on the basis of price, 1.2% * 70% of the original value of the
Property tax 1.2% or 12% (China)
property; if levied on the basis of rental, 12% of the lease income
Education surcharge Amount of turnover tax actually paid 3% (China)
Local education
Amount of turnover tax actually paid 2% (China)
surcharge
Different rates of enterprise income tax applicable to the taxpayers:
Taxpayer Income tax rate
The Company, Yongchuang Tech, Mutto Optronics, MFLEX Yancheng, Yancheng
Dongshan, Dongguan Dongshan Precision Manufacturing Co., Ltd., RF Top
15%
Electronic, Suzhou Chengjia, Yancheng Mutto Optronics Science and Technology
Co., Ltd. and Suzhou Dongdai Electronic Tech Co Ltd.
Hong Kong Dongshan and other companies incorporated in Hong Kong 16.5%
Mutto Optronics Group Limited, M-Flex Cayman Island, INC, The Dii Group (BVI)
0
Co. Limited
Multi-Fineline Electronix, Inc. and other companies incorporated in the United Federal corporate income tax rate, 21%; state corporate income tax
States rate, 0.75%-8.84%
Multi-Fineline Electronix Singapore Ptd. Ltd. and other companies incorporated in
17% (Singapore)
Singapore
Multek Technologies Limited 15% (enjoying an 80% tax exemption)
Multek Technology Sweden AB 20.6% (Sweden)
Multek Technology Malaysia SDN.BHD 24% (Malaysia)
100
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
DSBJ MEXICO, S.DER.L.DEC.V. 30.00%
Other taxpayers not listed above 25%
2. Tax preferences
1. Pursuant to the Notice on Publishing the Filing of the Third Batch of High and New Technology Enterprises Recognized by the
Recognition Authority of Jiangsu Province in 2022 issued by the Office of the National Leading Group for Recognition Management
of High and New Technology Enterprises, the Company and its subsidiaries Mutto Optronics, Yancheng Dongshan, Yancheng
Dongshan Communication Technology Co., Ltd. and MFLEX Yancheng passed the high and new technology enterprise qualification
review with a term of three years from 2022 to 2024, and therefore are subject to an enterprise income tax rate of 15% for the current
period.
2. Pursuant to the Notice on Publishing the Filing of the Fourth Batch of High and New Technology Enterprises Recognized by the
Recognition Authority of Jiangsu Province in 2022 issued by the Office of the National Leading Group for Recognition Management
of High and New Technology Enterprises, the Company’s wholly owned subsidiary Suzhou Chengjia passed the high and new
technology enterprise qualification review with a term of three years from 2022 to 2024, and therefore is subject to an enterprise income
tax rate of 15% for the current period.
3. Pursuant to the Notice on Publishing the Filing the Second Batch of High and New Technology Enterprises Recognized by the
Recognition Authority of Jiangsu Province in 2022 issued by the Office of the National Leading Group for Recognition Management
of High and New Technology Enterprises, the Company’s subsidiary EF Top Electronic passed the high and new technology enterprise
qualification review with a term of three years from 2022 to 2024, and therefore is subject to an enterprise income tax rate of 15% for
the current period.
4. Pursuant to the Reply on the Filing of the Third Batch of High and New Technology Enterprises of Guangdong Province in 2022
(Guo Ke Huo Zi [2021] No. 23) issued by the Office of the National Leading Group for Recognition Management of High and New
Technology Enterprises, the Company’s wholly owned subsidiary Dongguan Dongshan Precision Manufacturing Co., Ltd. passed the
high and new technology enterprise qualification review with a term of three years from 2020 to 2022, and therefore is subject to an
enterprise income tax rate of 15% for the current period.
5. Pursuant to the Notice on the Filing of the Third Batch of High and New Technology Enterprises of Jiangsu Province in 2021, the
Company’s wholly owned subsidiary Yancheng Mutto Optronics Science and Technology Co., Ltd. passed the high and new
technology enterprise qualification review with a term of three years from 2021 to 2023, and therefore is subject to an enterprise income
tax rate of 15% for the current period.
6. Pursuant to the Reply on the Filing of the Second Batch of High and New Technology Enterprises of Jiangsu Province in 2020 (Guo
Ke Huo Zi [2021] No. 40) issued by the Office of the National Leading Group for Recognition Management of High and New
Technology Enterprises, the Company’s subsidiary Suzhou Dongdai Electronic Tech Co., Ltd. passed the high and new technology
enterprise qualification review with a term of three years from 2020 to 2022, and therefore is subject to an enterprise income tax rate
of 15% for the current period.
7. Multek Technologies Limited is subject a corporate income tax rate of 15% under the Mauritius Corporate Income Tax Act, and as
a global Class I company incorporated in Mauritius but operating abroad, enjoys an 80% tax exemption, so its effective corporate
income tax rate is 3%.
VII. Notes to items of the consolidated financial statements
1. Cash and bank balances
In RMB
Item Closing balance Opening balance
Cash on hand 340,651.93 241,046.60
101
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Bank deposits 5,456,686,170.77 3,939,060,080.19
Other cash and bank balances 1,674,175,995.02 1,461,536,265.68
Total 7,131,202,817.72 5,400,837,392.47
Incl.: Total amounts deposited abroad 2,247,517,164.32 1,025,270,288.66
Note: Other cash and bank balances included RMB611,218,010.65 of security deposit for acceptance bills, RMB278,516,239.17 of
financing security for acceptance bills, RMB59,093,243.44 of security for letters of credit, RMB174,646,000.00 of security for loans,
RMB87,288,309.05 of security for letters of guarantee, RMB455,064,192.71 of time deposits, and RMB8,350,000.00 of security for
foreign exchange transactions, all of which were subject to restrictions.
2. Financial assets held for trading
In RMB
Item Closing balance Opening balance
Financial assets at fair value through
575,783,803.93 499,528,549.86
profit or loss
Incl.:
Investments in equity instruments 56,779,147.66 40,249,971.12
Bank wealth management products 519,004,656.27 459,278,578.74
Incl.:
Total 575,783,803.93 499,528,549.86
3. Notes receivable
(1) Notes receivable by category
In RMB
Item Closing balance Opening balance
Commercial acceptance bills 48,401,430.82 14,624,540.85
Total 48,401,430.82 14,624,540.85
In RMB
Closing balance Opening balance
Allowance for doubtful Allowance for doubtful
Item Book balance Book balance
accounts Carrying accounts Carrying
value value
Amount % Amount % Amount % Amount %
Incl.:
Allowance
48,644,654. 48,401,430. 14,698,031. 14,624,540.
recognized 100.00% 243,223.27 0.50% 100.00% 73,490.15 0.50%
09 82 00 85
collectively
Incl.:
Commercial
48,644,654. 48,401,430. 14,698,031. 14,624,540.
acceptance 100.00% 243,223.27 0.50% 100.00% 73,490.15 0.50%
09 82 00 85
bills
48,644,654. 48,401,430. 14,698,031. 14,624,540.
T otal 100.00% 243,223.27 0.50% 100.00% 73,490.15 0.50%
09 82 00 85
Allowance for doubtful accounts recognized collectively:
In RMB
Closing balance
Item Allowance for doubtful
Book balance %
accounts
Group of commercial acceptance bills 48,644,654.09 243,223.27 0.50%
Total 48,644,654.09 243,223.27
Basis for grouping:
If the allowance for doubtful accounts is recognized for notes receivable in accordance with the general model of expected credit losses,
please disclose the relevant information by reference to the disclosure of the allowance for doubtful accounts in respect of other
receivables:
□ Applicable N/A
102
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
(2) Allowance for doubtful accounts recognized, recovered or reversed in the current period
Allowance for doubtful accounts recognized in the current period:
In RMB
Changes in the current period
Opening
Item Recovered Written Closing balance
balance Recognized Others
or reversed off
Allowance recognized collectively 73,490.15 169,733.12 243,223.27
Total 73,490.15 169,733.12 243,223.27
Significant amount of allowance for doubtful accounts recovered or reversed in the current period:
□Applicable N/A
(3) Notes receivable already endorsed or discounted but not yet become due at the balance sheet date
In RMB
Amount derecognized at December 31, Amount not derecognized at December
Item
2022 31, 2022
Commercial acceptance bills 77,828,794.51
Total 77,828,794.51
4. Accounts receivable
(1) Accounts receivable by category
In RMB
Closing balance Opening balance
Allowance for doubtful Allowance for doubtful
Item Book balance Book balance
accounts Carrying accounts Carrying
value value
Amount % Amount % Amount % Amount %
Allowance
619,864,657 619,864,657 648,099,738 648,099,738
recognized 7.75% 100.00% 7.50% 100.00%
.18 .18 .87 .87
individually
Incl.:
Allowance
7,377,349,9 370,938,505 7,006,411,4 7,994,960,2 328,880,437 7,666,079,7
recognized 92.25% 5.03% 92.50% 4.11%
72.72 .98 66.74 03.24 .42 65.82
collectively
Incl.:
7,997,214,6 990,803,163 7,006,411,4 8,643,059,9 976,980,176 7,666,079,7
T otal 100.00% 12.39% 100.00% 11.30%
29.90 .16 66.74 42.11 .29 65.82
Allowance for doubtful accounts recognized individually:
In RMB
Closing balance
Name Allowance for
Book balance % Reason
doubtful accounts
According to the forecast of collection, the account
Shenzhen Baofeng Leader is less likely to be collected, so an amount equal to
401,778,317.42 401,778,317.42 100.00%
Technology Co., Ltd. the account receivable was already recognized as
impairment loss in 2019.
According to the forecast of collection, the account
Dongguan Baofeng Intelligent is less likely to be collected, so an amount equal to
169,582,771.72 169,582,771.72 100.00%
Technology Co., Ltd. the account receivable was already recognized as
impairment loss in 2019.
According to the forecast of collection, the account
is less likely to be collected, so an amount equal to
YLC International Group Inc. 32,623,735.29 32,623,735.29 100.00%
the account receivable was already recognized as
impairment loss in 2018.
According to the forecast of collection, the account
Gongguan Xindong Intelligent is less likely to be collected, so an amount equal to
3,787,969.53 3,787,969.53 100.00%
Technology Co., Ltd. the account receivable was already recognized as
impairment loss in 2021.
According to the forecast of collection, the account
is less likely to be collected, so an amount equal to
Leesys - Leipzig Electronic Systems 3,583,014.53 3,583,014.53 100.00%
the account receivable was already recognized as
impairment loss in 2019.
According to the forecast of collection, the account
Others 8,508,848.69 8,508,848.69 100.00% is less likely to be collected, so an impairment loss
was recognized.
Total 619,864,657.18 619,864,657.18
103
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Allowance for doubtful accounts recognized collectively: age
In RMB
Closing balance
Item Allowance for doubtful
Book balance %
accounts
Within 6 months 6,527,619,977.21 32,638,099.89 0.50%
7-12 months 415,534,427.06 20,776,721.35 5.00%
1-2 years 74,386,686.62 14,877,337.32 20.00%
2-3 years 142,906,336.02 85,743,801.61 60.00%
Over 3 years 216,902,545.81 216,902,545.81 100.00%
Total 7,377,349,972.72 370,938,505.98
Basis for grouping:
If the allowance for doubtful accounts is recognized for notes receivable in accordance with the general model of expected credit losses,
please disclose the relevant information by reference to the disclosure of the allowance for doubtful accounts in respect of other
receivables:
□ Applicable N/A
Accounts receivable by age
In RMB
Age Book balance
Within 1 year (inclusive) 6,943,154,404.27
Within 6 months 6,527,619,977.21
7-12 months 415,534,427.06
1-2 years 79,131,332.02
2-3 years 147,646,312.40
Over 3 years 827,282,581.21
3-4 years 780,916,195.14
4-5 years 29,163,991.48
Over 5 years 17,202,394.59
Total 7,997,214,629.90
(2) Allowance for doubtful accounts recognized, recovered or reversed in the current period
Allowance for doubtful accounts recognized in the current period:
In RMB
Changes in the current period
Opening
Item Recovered or Closing balance
balance Recognized Written off Others
reversed
Allowance
recognized 648,099,738.87 3,432,495.64 6,000,583.33 25,666,994.00 619,864,657.18
individually
Allowance
recognized 328,880,437.42 88,483,587.06 47,788,795.71 1,363,277.21 370,938,505.98
collectively
Total 976,980,176.29 91,916,082.70 6,000,583.33 73,455,789.71 1,363,277.21 990,803,163.16
(3) Accounts receivable actually written off in the current period
In RMB
Item Amount written off
Accounts receivable 73,455,789.71
Significant amount of accounts receivable written off:
In RMB
Nature of Amount written Reason for write- Write-off Whether or not
Company name
account off off procedure arising from
104
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
performed related-party
transactions
With the approval
The debtor has
Universal Wisdom Tech. of the working
Loan 25,666,994.00 gone bankrupt and No
(Beijing) Co., Ltd. meeting of the
been liquidated
General Manager
With the approval
AMBASSADOR The debtor has of the working
Loan 18,398,411.69 No
FUEGUINASA become insolvent meeting of the
General Manager
Total 44,065,405.69
(4) Top 5 debtors in terms of closing balance of accounts receivable
In RMB
Closing balance of accounts % of total closing balance of Closing balance of allowance
Company name
receivable accounts receivable for doubtful accounts
Debtor 1 2,866,719,849.53 35.85% 17,555,802.92
Debtor 2 401,778,317.42 5.02% 401,778,317.42
Debtor 3 393,757,570.89 4.92% 1,968,787.86
Debtor 4 314,339,343.99 3.93% 3,149,017.12
Debtor 5 240,456,591.83 3.01% 1,202,282.96
Total 4,217,051,673.66 52.73%
(5) Assets and liabilities arising from continuing involvement in accounts receivable transferred
Gain or loss related to Method of transfer of
Item Amount derecognized (RMB)
derecognition (RMB) financial assets
Customer 1 386,875,406.33 -750,524.24 Factoring
Subtotal 386,875,406.33 -750,524.24
5. Accounts receivable financing
In RMB
Item Closing balance Opening balance
Banker’s acceptance bills 644,057,382.41 828,355,016.30
Total 644,057,382.41 828,355,016.30
Changes in the amount and fair value of accounts receivable financing in the current period:
□Applicable N/A
If the allowance for impairment loss on accounts receivable financing is recognized in accordance with the general model of expected
credit loss, please the relevant information by reference to the disclosure of the allowance for doubtful accounts in respect of other
receivables:
□Applicable N/A
Other information:
As the acceptors of banker’s acceptance bills are commercial banks that have high credit ratings, banker’s acceptance bills are less
likely to be dishonored when they become due. Therefore, the Company derecognizes the banker’s acceptance bills already endorsed
or discounted. However, if such bills fail to be paid when they become due, the Company will assume joint and several liability to the
holders thereof pursuant to the Law on Negotiable Instruments.
6. Advances to suppliers
(1) Advances to suppliers by age
In RMB
Closing balance Opening balance
Age
Amount % Amount %
Within 1 year 144,831,544.38 89.67% 160,251,493.67 86.11%
105
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
1 to 2 years 9,311,244.44 5.77% 15,439,994.92 8.30%
2 to 3 years 3,378,241.58 2.09% 3,182,325.68 1.71%
Over 3 years 3,991,794.13 2.47% 7,221,298.66 3.88%
Total 161,512,824.53 186,095,112.93
Reason of failure to timely settle the significant advances to suppliers aged more than one year:
Company name Closing balance (RMB) Reason of failure to settle
Leader Formula (Hong Kong) Industrial
4,626,030.09 The contract has not yet been executed
Ltd.
Subtotal 4,626,030.09
(2) Top 5 suppliers in terms of closing balance of advances to suppliers
% of total balance of advances to
Company name Book balance (RMB)
suppliers
Supplier 1 34,581,921.08 20.51
Supplier 2 20,000,000.00 11.86
Supplier 3 11,407,005.87 6.77
Supplier 4 8,755,875.83 5.19
Supplier 5 7,652,852.36 4.54
Subtotal 82,397,655.14 48.87
7. Other receivables
In RMB
Item Closing balance Opening balance
Other receivables 35,793,851.22 37,505,521.59
Total 35,793,851.22 37,505,521.59
(1) Other receivables
1) Other receivables by nature
In RMB
Nature of account Closing balance Opening balance
Loan and reserve fund 7,767,360.70 6,048,087.60
Security deposit 25,463,197.09 31,879,767.11
Performance compensation 7,000,000.00
Temporary payment receivable and others 17,415,911.41 17,631,714.10
Total 50,646,469.20 62,559,568.81
2) Allowance for doubtful accounts
In RMB
Stage 1 Stage 2 Stage 3
Allowance for doubtful Lifetime expected Lifetime expected
12-month expected Total
accounts credit loss (not credit credit loss (credit
credit loss
impaired) impaired)
Balance at January 1,
1,120,965.67 1,175,265.40 22,757,816.15 25,054,047.22
2022
In the current period:
- Transferred to stage 2 -161,491.44 161,491.44
- Transferred to stage 3 -308,750.74 308,750.74
Recognized 690,170.63 -705,023.22 -6,341,736.65 -6,356,589.24
Reversed 3,500,000.00 3,500,000.00
Written off 344,840.00 344,840.00
Balance at December
1,649,644.86 322,982.88 12,879,990.24 14,852,617.98
31, 2022
Significant changes in the carrying amount of allowance for doubtful accounts in the current period:
□ Applicable N/A
Other receivables by age:
106
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
In RMB
Age Book balance
Within 1 year 32,992,896.42
1-2 years 3,233,448.86
2-3 years 3,764,903.27
Over 3 years 10,655,220.65
3-4 years 3,360,841.55
4-5 years 508,660.00
Over 5 years 6,785,719.10
Total 50,646,469.20
3) Other receivables actually written off in the current period
In RMB
Item Amount written off
Other receivables 344,840.00
4) Top 5 debtors in terms of closing balance of other receivables
In RMB
% of total closing Closing balance of
Company
Nature of account Closing balance Age balance of other allowance for
name
receivables doubtful accounts
Debtor 1 Security deposit 6,964,598.25 Within 1 year 13.75% 348,229.91
Debtor 2 Security deposit 4,146,250.00 Over 3 years 8.19% 4,146,250.00
Temporary payment
3,620.00 1-2 years 0.01% 3,620.00
receivable and others
Temporary payment
Debtor 3 677,395.91 2-3 years 1.34% 677,395.91
receivable and others
Temporary payment
2,909,689.00 Over 3 years 5.75% 2,909,689.00
receivable and others
Temporary payment
3,211,140.00 Within 1 year 6.34% 160,557.00
Debtor 4 receivable and others
Security deposit 16,800.00 Over 3 years 0.03% 16,800.00
Debtor 5 Security deposit 2,855,772.00 Within 1 year 5.64% 142,788.60
Total 20,785,265.16 41.05% 8,405,330.42
5) Receivables related to government grants
In RMB
Estimated time of
Description of
Company name Closing balance Closing age receipt, amount to be
government grant
received and basis
Yancheng Hi-tech Milestone investment The grant has been
Zone Investment installment II for 3,211,140.00 Within 1 year received in full on
Group Co., Ltd. model Internet project January 11, 2023
8. Inventories
Does the Company need to comply with the disclosure requirements for the real estate industry? No.
(1) Categories of inventories
In RMB
Closing balance Opening balance
Allowance for Allowance for
Item impairment of impairment of
Book balance inventories or Carrying value Book balance inventories or Carrying value
costs of fulfilling costs of fulfilling
contracts contracts
Raw materials 1,054,142,552.20 52,636,496.51 1,001,506,055.69 1,389,061,379.96 21,517,744.17 1,367,543,635.79
Work in progress 839,758,226.64 29,797,143.67 809,961,082.97 1,043,705,029.33 13,539,434.50 1,030,165,594.83
Goods on hand 4,710,817,179.86 366,785,710.02 4,344,031,469.84 4,234,690,470.68 188,416,933.04 4,046,273,537.64
Circulating
10,278,315.47 38,514.88 10,239,800.59 7,768,136.44 38,514.88 7,729,621.56
materials
Total 6,614,996,274.17 449,257,865.08 6,165,738,409.09 6,675,225,016.41 223,512,626.59 6,451,712,389.82
107
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
(2) Allowance for impairment of inventories or costs of fulfilling contracts
In RMB
Increase Decrease
Opening
Item Reversed or Closing balance
balance Recognized Others Others
written off
Raw materials 21,517,744.17 31,118,752.34 52,636,496.51
Work in progress 13,539,434.50 16,257,709.17 29,797,143.67
Goods on hand 188,416,933.04 394,180,158.86 5,320,935.45 221,132,317.33 366,785,710.02
Circulating materials 38,514.88 38,514.88
Total 223,512,626.59 441,556,620.37 221,132,317.33
5,320,935.45 449,257,865.08
Reason for writing off the allowance for impairment of
Item Basis for determining the net realizable value
inventories in the current period
The net realizable value is the estimated selling price of finished goods less the The inventories for which an allowance for impairment
Raw
estimated cost of completion, estimated selling expenses and related taxes in the of inventories was recognized at the beginning of the
materials
ordinary course of business. current period have been used.
The net realizable value is the estimated selling price of finished goods less the The inventories for which an allowance for impairment
Work in
estimated cost of completion, estimated selling expenses and related taxes in the of inventories was recognized at the beginning of the
progress
ordinary course of business. current period have been used.
The inventories for which an allowance for impairment
Goods on The net realizable value is the estimated selling price of finished goods less the
of inventories was recognized at the beginning of the
hand estimated selling expenses and related taxes in the ordinary course of business.
current period have been sold.
9. Other current assets
In RMB
Item Closing balance Opening balance
Cost of returned goods receivable 21,651,650.92 12,777,920.71
Deductible input tax 153,399,758.40 309,081,986.00
Prepaid enterprise income tax 76,293,525.58 34,663,477.77
Deferred expenses and others 253,228,939.74 289,546,629.16
Total 504,573,874.64 646,070,013.64
10. Long-term accounts receivable
(1) Particulars of long-term accounts receivable
In RMB
Closing balance Opening balance Range of
Item Allowance for Carrying Allowance for Carrying discount
Book balance Book balance rate
doubtful accounts value doubtful accounts value
Security deposit for
30,000,000.00 30,000,000.00 69,950,000.88 69,950,000.88
finance lease
Account receivable from
Powerwave
10,703,905.76 10,703,905.76 10,703,905.76 10,703,905.76 7.5
Technologies (Thailand)
Co., Ltd.
Total 40,703,905.76 10,703,905.76 30,000,000.00 80,653,906.64 10,703,905.76 69,950,000.88
11. Long-term equity investments
In RMB
Changes in this year
Adjustme Declared Allowa Closing balance of
Opening balance Additio Redu Closing balance
Investee Investment income nt to other Other cash nce for allowance for
(carrying value) nal ced Oth (carrying value)
or loss under comprehe changes dividends or impair impairment loss
investm invest ers
equity method nsive in equity profit ment
ent ment
income distribution loss
I. Joint ventures
II. Associates
Suzhou Toprun
Electric Equipment 24,012,990.02 227,839.46 24,240,829.48 51,487,204.05
Co., Ltd.
Shenzhen Nanfang
Blog Technology
17,507,056.47
Development Co.,
Ltd.
Shanghai Fu Shan
P recision
Manufacturing Co.,
Ltd.
Suzhou LEGATE
Intelligent 23,087,770.98 106,212.49 23,193,983.47
Equipment Co., Ltd.
Suzhou Dongcan
Optoelectronics
3,716,150.29 34,482.66 3,750,632.95
Technology Co.,
Ltd.
108
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Jiangsu Nangao
Intelligent
Equipment 4,020,556.59 112,738.89 4,133,295.48
Innovation Center
Co., Ltd.
Jiaozuo Songyang
Optoelectric
30,748,059.62 -2,549,668.86 28,198,390.76
Technology Co.,
Ltd.
Suzhou Yongxin
Jingshang Venture
14,983,489.88 -461,905.08 14,521,584.80
Capital P artnership
(L.P.)
Isotek Microwave
8,539,424.61 8,539,424.61
Limited
BVF (BVI) Holding
34,012,577.79 -823,503.93 33,189,073.86
L.P .
Subtotal 143,121,019.78 -3,353,804.37 139,767,215.41 68,994,260.52
Total 143,121,019.78 -3,353,804.37 139,767,215.41 68,994,260.52
12. Investment in other equity instruments
In RMB
Item Closing balance Opening balance
Jiangsu Bohua Equity Investment Partnership
150,000,000.00 150,000,000.00
(L.P.)
Hai Dixin Semiconductor (Nantong) Co., Ltd. 21,322,110.00 21,322,110.00
Total 171,322,110.00 171,322,110.00
Other information:
1) Hai Dixin Semiconductor (Nantong) Co., Ltd.
Hai Dixin Semiconductor (Nantong) Co., Ltd. was established on April 6, 2012, with a registered capital of RMB36,152,329.00, in
which the Company holds 10.2345% shares. In consideration that the Company has a close business relationship with Hai Dixin
Semiconductor (Nantong) Co., Ltd., the shares held by the Company in it will help the Company improve its business competencies
and the investment is not held for trading, the Company designated this investment as a financial asset at fair value through other
comprehensive income on January 1, 2019.
2) Jiangsu Bohua Equity Investment Partnership (L.P.)
Jiangsu Bohua Equity Investment Partnership (L.P.) was established on September 27, 2021, with a registered capital of RMB3.3billion,
and is primarily engaged in venture capital investment (in unlisted companies only). In consideration that this investment will bring a
good return to the Company and provide the Company with opportunities to invest in premium fields and assets, and is not held for
trading, the Company has designated this investment as a financial asset at fair value through other comprehensive income.
13. Investment properties
(1) Investment properties measured at cost
Applicable □ N/A
In RMB
Buildings and Construction in
Item Land use right Total
structures progress
I. Original value
1. Opening balance 5,309,132.17 5,309,132.17
2. Increase
(1) Acquired
(2) Transferred from inventories/ fixed assets/
construction in progress
(3) Increased due to business combinations
3. Decrease
(1) Disposed
(2) Other transfer-out
4. Closing balance 5,309,132.17 5,309,132.17
II. Accumulated depreciation and amortization
109
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
1. Opening balance 3,754,869.59 3,754,869.59
2. Increase 257,711.16 257,711.16
(1) Recognized or amortized 257,711.16 257,711.16
3. Decrease
(1) Disposed
(2) Other transfer-out
4. Closing balance 4,012,580.75 4,012,580.75
III. Allowance for impairment loss
1. Opening balance
2. Increase
(1) Recognized
3. Decrease
(1) Disposed
(2) Other transfer-out
4. Closing balance
IV. Carrying value
1. Closing balance 1,296,551.42 1,296,551.42
2. Opening balance 1,554,262.58 1,554,262.58
(2) Investment properties measured at fair value
□ Applicable N/A
14. Fixed assets
In RMB
Item Closing balance Opening balance
Fixed assets 10,673,700,468.47 10,736,270,678.33
Total 10,673,700,468.47 10,736,270,678.33
(1) Particulars of fixed assets
In RMB
Buildings and Machinery and Transport Office equipment
Item Total
structures equipment equipment and others
I. Original value
1. Opening
3,404,571,153.47 15,940,602,509.77 84,352,784.26 653,421,895.02 20,082,948,342.52
balance
2. Increase 163,839,782.99 1,510,970,058.32 6,205,624.45 72,202,842.72 1,753,218,308.48
(1) Acquired 17,740,559.02 3,850,347.38 5,000,350.97 26,591,257.37
(2)
Transferred
from 163,739,033.99 1,418,774,061.95 2,294,031.72 66,548,332.01 1,651,355,459.67
construction in
progress
(3) Increased
due to
business
combinations
(4)
Differences on
translation of
foreign 100,749.00 61,245.35 654,159.74 816,154.09
currency
financial
statements
(5)
Acquisition of
74,455,437.35 74,455,437.35
assets under
finance lease
3. Decrease 14,507,090.77 379,610,976.27 5,096,848.68 15,184,966.97 414,399,882.69
(1) Disposed
14,507,090.77 369,542,145.66 5,096,848.68 15,184,966.97 404,331,052.08
or retired
110
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
(2) Renovation
10,068,830.61 10,068,830.61
and upgrading
4.Closing balance 3,553,903,845.69 17,071,961,591.82 85,461,560.03 710,439,770.77 21,421,766,768.31
II. Accumulated
depreciation
1. Opening
1,200,644,824.27 7,681,028,127.93 59,384,782.62 397,841,742.20 9,338,899,477.02
balance
2. Increase 171,264,342.83 1,484,018,225.77 4,633,607.64 83,927,007.50 1,743,843,183.74
(1)
171,212,432.44 1,438,305,022.15 4,585,121.75 83,411,607.34 1,697,514,183.68
Recognized
(2)
Differences on
translation of
foreign 51,910.39 48,485.89 515,400.16 615,796.44
currency
financial
statements
(3)
Acquisition of
45,713,203.62 45,713,203.62
assets under
finance lease
3. Decrease 8,658,330.80 323,068,678.28 4,639,620.37 13,830,222.74 350,196,852.19
(1) Disposed
8,658,330.80 315,593,795.93 4,639,620.37 13,830,222.74 342,721,969.84
or retired
(2) Renovation
7,474,882.35 7,474,882.35
and upgrading
4.Closing balance 1,363,250,836.30 8,841,977,675.42 59,378,769.89 467,938,526.96 10,732,545,808.57
III. Allowance for
impairment loss
1. Opening
7,219,901.42 558,285.75 7,778,187.17
balance
2. Increase 11,049,705.17 11,049,705.17
(1)
11,049,705.17 11,049,705.17
Recognized
3. Decrease 3,307,401.07 3,307,401.07
(1) Disposed
3,307,401.07 3,307,401.07
or retired
4.Closing balance 14,962,205.52 558,285.75 15,520,491.27
IV. Carrying value
1. Closing
2,190,653,009.39 8,215,021,710.88 26,082,790.14 241,942,958.06 10,673,700,468.47
balance
2. Opening
2,203,926,329.20 8,252,354,480.42 24,968,001.64 255,021,867.07 10,736,270,678.33
balance
(2) Fixed assets whose property title certificates have not yet been obtained
In RMB
Reason of not obtaining the property title
Item Carrying value
certificate
Multek’s factory building 28,865,800.05 Pending review
15. Construction in progress
In RMB
Item Closing balance Opening balance
Construction in progress 1,813,183,815.67 503,037,513.25
Total 1,813,183,815.67 503,037,513.25
(1) Particulars of construction in progress
In RMB
Closing balance Opening balance
Item Allowance for Allowance for
Book balance Carrying value Book balance Carrying value
impairment loss impairment loss
Wireless module
production and
6,086,553.24 6,086,553.24
construction
project of
111
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Yancheng
Dongshan
Communication
Technology Co.,
Ltd.
Multek 5G high-
speed high-
frequency and
8,726,174.90 8,726,174.90 6,499,800.00 6,499,800.00
high-density PCB
technology
upgrading project
Multek PCB
production line
22,910,222.23 22,910,222.23 108,766,335.70 108,766,335.70
technology
upgrading project
400,000 m2 fine
line FPC
production and 30,000,000.00 30,000,000.00 15,468,498.40 15,468,498.40
assembly capacity
expansion project
FPC for new
energy application
and assembly 15,615,783.77 15,615,783.77
project of MFLEX
Yancheng
R&D and
industrialization of
125,169,108.26 125,169,108.26
LED packaging
technology
IC substrate
project of Chaowei
Microelectronics 212,665,663.71 212,665,663.71
(Yancheng) Co.,
Ltd.
Large-sized die-
casting project of
429,683,425.58 429,683,425.58
Yancheng
Dongchuang
Kunshan new
energy
manufacturing 97,518,667.74 97,518,667.74
base-related
project
Mexico new
energy
manufacturing 11,656,038.90 11,656,038.90
base-related
project
MFLEX Yancheng
228,417,694.07 228,417,694.07 28,911,225.60 28,911,225.60
Phase II project
MFLEX Suzhou
Guoxiang Phase II
and other 372,710,903.38 372,710,903.38 1,497,678.22 1,497,678.22
production
expansion project
Installation
equipment in
383,279,241.39 383,279,241.39 210,638,313.83 210,638,313.83
progress and
others
Total 1,813,183,815.67 1,813,183,815.67 503,037,513.25 503,037,513.25
(2) Changes in significant constructions in progress in the current period
In RMB
Accumul
% of Incl.: Rate of
Amount ated
project Capitaliz interest
Opening transferre Other Closing amount Source of
Project Budget Increase costs to Progress ed capitaliza
balance d to fixed decreases balance of funds
the interest tion this
assets capitalize
budget this year year
d interest
Wireless
module
productio
n and
constructi
on project 86,000,00 6,086,553 6,086,553 Offering
94.77% 1
of 0.00 .24 .24 proceeds
Yancheng
Dongsha
n
Communi
cation
112
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Technolo
gy Co.,
Ltd.
Multek
5G high-
speed
high-
frequency
and high- 660,000,0 6,499,800 24,221,16 9,803,702 12,191,08 8,726,174 Offering
42.57% 0.4257
density 00.00 .00 2.76 .18 5.68 .90 proceeds
PCB
technolog
y
upgradin
g project
Multek
PCB
productio
n line 728,000,0 108,766,3 126,396,6 154,353,9 57,898,85 22,910,22 Offering
87.57% 0.8757
technolog 00.00 35.70 90.79 47.95 6.31 2.23 proceeds
y
upgradin
g project
400,000
m 2 fine
line FPC
productio
803,000,0 15,468,49 65,497,53 50,966,03 30,000,00 Offering
n and 93.03% 0.9303
00.00 8.40 3.12 1.52 0.00 proceeds
assembly
capacity
expansio
n project
FPC for
new
energy
applicatio
n and 650,000,0 118,405,9 102,790,1 15,615,78 Offering
29.34% 0.2934
assembly 00.00 54.38 70.61 3.77 proceeds
project of
MFLEX
Yanchen
g
R&D and
industrial
ization of
LED 680,000,0 125,169,1 27,844,03 145,789,7 7,223,367
90.88% 1 Others
packagin 00.00 08.26 6.92 78.08 .10
g
technolog
y
IC
substrate
project of
Chaowei
1,500,000 212,665,6 212,665,6
Microele 14.18% 0.1418 Others
,000.00 63.71 63.71
ctronics
(Yanchen
g) Co.,
Ltd.
Large-
sized die-
casting
project of 1,500,000 430,324,7 641,312.2 429,683,4
28.69% 0.2869 Others
Yanchen ,000.00 37.79 1 25.58
g
Dongchu
ang
Kunshan
new
energy
manufact 1,800,000 148,670,3 51,151,67 97,518,66
8.26% 0.0826 Others
uring ,000.00 40.78 3.04 7.74
base-
related
project
Mexico
new
energy
manufact 600,000,0 11,656,03 11,656,03
1.94% 0.0194 Others
uring 00.00 8.90 8.90
base-
related
project
MFLEX
Yanchen 1,000,000 28,911,22 772,912,5 438,120,7 135,285,3 228,417,6
77.29% 0.7729 Others
g Phase II ,000.00 5.60 70.62 20.78 81.37 94.07
project
MFLEX
Suzhou
2,100,000 1,497,678 757,808,7 353,935,8 32,659,66 372,710,9
Guoxiang 36.09% 0.3609 Others
,000.00 .22 08.55 23.32 0.07 03.38
Phase II
and other
113
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
productio
n
expansio
n project
12,107,00 292,399,1 2,696,403 1,313,639 245,258,3 1,429,904
T otal
0,000.00 99.42 ,438.32 ,712.93 50.53 ,574.28
16. Right-of-use assets
In RMB
Buildings and Machinery and
Item Land Total
structures equipment
I. Original value
1. Opening balance 938,323,995.90 96,320,821.16 49,571,215.74 1,084,216,032.80
2. Increase 115,989,640.92 43,628,970.89 159,618,611.81
(1) Leased 115,170,918.83 43,628,970.89 158,799,889.72
(2) Differences on
translation of
818,722.09 818,722.09
foreign currency
financial statements
3. Decrease 2,710,951.71 74,809,377.98 77,520,329.69
(1) Disposed 2,710,951.71 2,710,951.71
(2) Acquisition of
assets under finance 74,809,377.98 74,809,377.98
lease
4.Closing balance 1,051,602,685.11 21,511,443.18 93,200,186.63 1,166,314,314.92
II. Accumulated
depreciation
1. Opening balance 127,433,979.70 30,898,095.70 4,931,289.65 163,263,365.05
2. Increase 74,230,573.82 25,589,051.36 587,226.01 100,406,851.19
(1) Recognized 73,929,774.47 25,589,051.36 587,226.01 100,106,051.84
(2) Differences on
translation of
300,799.35 300,799.35
foreign currency
financial statements
3. Decrease 2,710,951.71 45,713,203.62 48,424,155.33
(1) Disposed 2,710,951.71 2,710,951.71
(2) Acquisition of
assets under finance 45,713,203.62 45,713,203.62
lease
4.Closing balance 198,953,601.81 10,773,943.44 5,518,515.66 215,246,060.91
III. Allowance for
impairment loss
1. Opening balance
2. Increase
(1) Recognized
3. Decrease
(1) Disposed
4.Closing balance
IV. Carrying value
1. Closing balance 852,649,083.30 10,737,499.74 87,681,670.97 951,068,254.01
2. Opening balance 810,890,016.20 65,422,725.46 44,639,926.09 920,952,667.75
Other information:
17. Intangible assets
Particulars of intangible assets:
In RMB
Unpatented T rademark and Development
Item Land use right Patent Software T otal
technology patent costs
I. Original value
1. Opening balance 236,106,942.79 185,075,303.39 140,567,942.35 6,733,029.45 568,483,217.98
114
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
2. Increase 12,896,365.64 49,543,085.38 62,439,451.02
(1) Acquired 12,896,365.64 249,203.62 13,145,569.26
(2) Internal R&D
(3) Increased due to business
combinations
(4) T ransferred from inventories 2,344,964.66 2,344,964.66
(5) Differences on translation of foreign
2,253,903.46 2,253,903.46
currency financial statements
(6) T ransferred from construction in
44,695,013.64 44,695,013.64
progress
3. Decrease 2,099,040.53 2,099,040.53
(1) Disposed 2,099,040.53 2,099,040.53
4.Closing balance 249,003,308.43 232,519,348.24 140,567,942.35 6,733,029.45 628,823,628.47
II. Accumulated amortization
1. Opening balance 61,151,767.10 132,063,151.39 71,151,278.57 6,733,029.45 271,099,226.51
2. Increase 6,448,005.76 36,554,075.02 14,057,163.08 57,059,243.86
(1) Recognized 6,448,005.76 37,270,886.20 14,057,163.08 57,776,055.04
(2) Differences on translation of foreign
-716,811.18 -716,811.18
currency financial statements
3. Decrease 1,924,561.82 1,924,561.82
(1) Disposed 1,924,561.82 1,924,561.82
4.Closing balance 67,599,772.86 166,692,664.59 85,208,441.65 6,733,029.45 326,233,908.55
III. Allowance for impairment loss
1. Opening balance
2. Increase
(1) Recognized
3. Decrease
(1) Disposed
4.Closing balance
IV. Carrying value
1. Closing balance 181,403,535.57 65,826,683.65 55,359,500.70 302,589,719.92
2. Opening balance 174,955,175.69 53,012,152.00 69,416,663.78 297,383,991.47
Ratio of intangible assets arising from internal R&D to total intangible assets at the end of the current period: 0.00%.
18. Goodwill
(1) Original value of goodwill
In RMB
Increase Decrease
Investee or event giving rise to goodwill Opening balance Arising from Closing balance
Disposed
business combination
MFLEX 1,770,752,915.84 1,770,752,915.84
Multek 179,329,062.90 179,329,062.90
Mutto Optronics 153,957,647.78 153,957,647.78
RF Top Electronic 135,001,580.53 135,001,580.53
Total 2,239,041,207.05 2,239,041,207.05
(2) Allowance for impairment of goodwill
In RMB
Opening Increase Decrease
Investee or event giving rise to goodwill Closing balance
balance Recognized Disposed
Mutto Optronics 18,450,298.84 19,782,833.44 38,233,132.28
RF Top Electronic 8,868,134.17 8,868,134.17
Total 27,318,433.01 19,782,833.44 47,101,266.45
Information regarding the asset group or combination of asset groups to which the goodwill belongs:
115
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
(1) MFLEX
Composition of the asset group or combination of asset groups Asset or liability (RMB)
Carrying value of the asset group or combination of asset groups 8,429,930,810.14
Carrying value of the goodwill allocated to the asset group or combination of
1,770,752,915.84
asset groups and method of allocation
Carrying value of the asset group or combination of asset groups including
10,200,683,725.98
the goodwill
Whether the asset group or combination of asset groups is consistent with the
asset group or combination of asset groups determined at the acquisition date Yes
and prior goodwill impairment tests
(2) Multek
Composition of the asset group or combination of asset groups Asset or liability (RMB)
Carrying value of the asset group or combination of asset groups 2,489,414,865.47
Carrying value of the goodwill allocated to the asset group or combination of
179,329,062.87
asset groups and method of allocation
Carrying value of the asset group or combination of asset groups including
2,668,743,928.34
the goodwill
Whether the asset group or combination of asset groups is consistent with the
asset group or combination of asset groups determined at the acquisition date Yes
and prior goodwill impairment tests
(3) Mutto Optronics
Composition of the asset group or combination of asset groups Asset or liability (RMB)
Carrying value of the asset group or combination of asset groups 589,275,484.50
Carrying value of the goodwill allocated to the asset group or combination of
135,507,348.94
asset groups and method of allocation
Carrying value of the asset group or combination of asset groups including
724,782,833.44
the goodwill
Whether the asset group or combination of asset groups is consistent with the
asset group or combination of asset groups determined at the acquisition date Yes
and prior goodwill impairment tests
(4) RF Top Electronic
Composition of the asset group or combination of asset groups Asset or liability (RMB)
Carrying value of the asset group or combination of asset groups 178,934,090.60
Goodwill attributable to the Company 126,133,446.36
Goodwill attributable to the minority interests 54,057,191.30
Carrying value of the goodwill allocated to the asset group or combination of
180,190,637.66
asset groups and method of allocation
Carrying value of the asset group or combination of asset groups including
359,124,728.26
the goodwill
Whether the asset group or combination of asset groups is consistent with the
asset group or combination of asset groups determined at the acquisition date Yes
and prior goodwill impairment tests
Describe the process and key parameters (such as growth rate over the forecast period, growth rate over the stable period, margin,
discount rate and forecast period used in estimating the present value of future cash flow) of the goodwill impairment test, and method
for determining impairment of goodwill:
(1) MFLEX
The recoverable amount of goodwill was calculated according to the present value of estimated future cash flow, which was determined
based on the five-year cash flow estimation approved by the Company and using the discount rate of 14.52%, and the growth rate of
cash flow after the forecast period as 0.00%.
Other key inputs used in the impairment test included expected selling prices and sales volume of products, production costs and other
related expenses, which were determined based on historic experience and forecasts of market development. The discount rate reflected
the time value of money on the present market and the pre-tax interest rate for the specific risks of the relevant asset group.
According to the Valuation Report (Canwin Valuation Report [2023] No. 2-9) issued by Canwin Appraisal Co., Ltd., the recoverable
amount of the asset group or combination of asset groups including the goodwill was RMB13.05 billion, which was higher than its
carrying value of RMB2,849,316,274.02, so the goodwill was not impaired.
(2) Multek
116
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
The recoverable amount of goodwill was calculated according to the present value of estimated future cash flow, which was determined
based on the five-year cash flow estimation approved by the Company and using the discount rate of 11.17%, and the growth rate of
cash flow after the forecast period as 0.00%.
Other key inputs used in the impairment test included expected selling prices and sales volume of products, production costs and other
related expenses, which were determined based on historic experience and forecasts of market development. The discount rate reflected
the time value of money on the present market and the pre-tax interest rate for the specific risks of the relevant asset group.
According to the Valuation Report (Canwin Valuation Report [2023] No. 2-4) issued by Canwin Appraisal Co., Ltd., the recoverable
amount of the asset group or combination of asset groups including the goodwill was RMB3.43 billion, which was higher than its
carrying value of RMB761,256,071.66, so the goodwill was not impaired.
(3) Mutto Optronics
The recoverable amount of goodwill was calculated according to the present value of estimated future cash flow, which was determined
based on the five-year cash flow estimation approved by the Company and using the discount rate of 11.56%, and the growth rate of
cash flow after the forecast period as 0.00%.
Other key inputs used in the impairment test included expected selling prices and sales volume of products, production costs and other
related expenses, which were determined based on historic experience and forecasts of market development. The discount rate reflected
the time value of money on the present market and the pre-tax interest rate for the specific risks of the relevant asset group.
According to the Valuation Report (Canwin Valuation Report [2023] No. 2-8) issued by Canwin Appraisal Co., Ltd., the recoverable
amount of the asset group or combination of asset groups including the goodwill was RMB705 million, while its carrying value was
RMB724,782,833.44, so the goodwill impairment of RMB19,782,833.44 was recognized.
(4) RF Top Electronic
The recoverable amount of goodwill was calculated according to the present value of estimated future cash flow, which was determined
based on the five-year cash flow estimation approved by the Company and using the discount rate of 12.60%, and the growth rate of
cash flow after the forecast period as 0.00%.
Other key inputs used in the impairment test included expected selling prices and sales volume of products, production costs and other
related expenses, which were determined based on historic experience and forecasts of market development. The discount rate reflected
the time value of money on the present market and the pre-tax interest rate for the specific risks of the relevant asset group.
According to the Valuation Report (Zhongsheng Valuation Report [2023] No. 0030) issued by Zhongsheng Appraisal & Consulting
Co., Ltd., the recoverable amount of the asset group or combination of asset groups including the goodwill was RMB377 million ,
which was higher than its carrying value of RMB17,875,271.74, so the goodwill was not impaired.
19. Long-term deferred expenses
In RMB
Opening
Item Increase Amortization Other decreases Closing balance
balance
Decoration costs of fixed
343,067,848.10 315,650,230.75 157,201,034.52 501,517,044.33
assets and others
Total 343,067,848.10 315,650,230.75 157,201,034.52 501,517,044.33
20. Deferred tax assets/deferred tax liabilities
(1) Deferred tax assets not offset
In RMB
Item Closing balance Opening balance
117
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Allowance for
1,152,275,069.45 181,401,380.14 956,860,891.98 180,116,639.73
impairment of assets
Deductible losses 1,466,877,523.35 222,911,742.77 1,160,149,214.53 184,025,381.05
Fixed assets 200,864,027.50 30,334,952.34 18,518,436.84 3,989,568.63
Accrued expenses 200,467,698.35 40,863,348.65 215,578,295.20 37,447,545.61
Provisions 69,202,183.16 12,324,185.63 89,442,831.13 17,799,642.22
Deferred income 747,587,634.12 121,151,814.13 681,387,013.96 112,541,906.35
Total 3,837,274,135.93 608,987,423.66 3,121,936,683.64 535,920,683.59
(2) Deferred tax liabilities not offset
In RMB
Closing balance Opening balance
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Book-tax differences
1,803,750,324.83 380,449,918.63 1,292,505,799.91 285,711,977.06
on fixed assets
Accrued interest
69,638,588.72 14,859,117.31 136,407,400.98 28,647,365.94
income and others
Total 1,873,388,913.55 395,309,035.94 1,428,913,200.89 314,359,343.00
(3) Deferred tax assets and deferred tax liabilities presented on a netting basis
In RMB
Closing set-off amount Closing balance of Opening set-off Opening balance of
Item of deferred tax assets deferred tax assets or amount of deferred tax deferred tax assets or
and liabilities liabilities after set-off assets and liabilities liabilities after set-off
Deferred tax assets 608,987,423.66 535,920,683.59
Deferred tax liabilities 395,309,035.94 314,359,343.00
(4) Unrecognized deferred tax assets
In RMB
Item Closing balance Opening balance
Deductible losses 460,552,464.56 260,832,646.62
Allowance for doubtful accounts – accounts receivable 184,846,353.06 143,374,158.66
Allowance for doubtful accounts – other receivables 14,541,464.85 25,054,047.22
Allowance for impairment of inventories 119,014,473.40 100,331,242.39
Allowance for impairment of advances to suppliers 7,086,125.93 11,270,721.08
Investment loss 76,100,324.95 74,092,106.93
Changes in investment in other equity instruments 400,000,000.00 400,000,000.00
Allowance for impairment of long-term equity investments 68,994,260.52 68,994,260.52
Allowance for impairment of goodwill 47,101,266.45 27,318,433.01
Total 1,378,236,733.72 1,111,267,616.43
(5) Deductible losses on unrecognized deferred tax assets that will expire in the following years
In RMB
Year Closing balance Opening balance Remark
2022 66,252,182.98
2023 13,996,117.83 13,996,117.83
2024 40,403,329.83 40,403,329.83
2025 100,804,003.97 100,804,003.97
2026 39,377,012.01 39,377,012.01
2027 265,972,000.92
Total 460,552,464.56 260,832,646.62
21. Other non-current assets
In RMB
Closing balance Opening balance
Item Allowance for Allowance for
Book balance Carrying value Book balance Carrying value
impairment loss impairment loss
Deferred 33,780,926.88 33,780,926.88 41,372,547.26 41,372,547.26
118
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
income –
unrealized gain
or loss on sale
and leaseback
Prepayment for
projects and 838,731,849.70 838,731,849.70 244,924,386.94 244,924,386.94
equipment
Total 872,512,776.58 872,512,776.58 286,296,934.20 286,296,934.20
22. Short-term borrowings
(1) Short-term borrowings by category
In RMB
Item Closing balance Opening balance
Pledge loans 747,939,478.37 803,328,447.58
Credit loans 5,734,146,965.18 5,423,644,628.31
Proceeds from discount on acceptance
1,312,323,501.13 1,820,194,933.27
bills and letters of credit
Total 7,794,409,944.68 8,047,168,009.16
23. Financial liabilities held for trading
In RMB
Item Closing balance Opening balance
Financial liabilities held for trading 91,517,116.89
Incl.:
Derivative financial liabilities 91,517,116.89
Incl.:
Total 91,517,116.89
24. Notes payable
In RMB
Category Closing balance Opening balance
Commercial acceptance bills 280,442,316.20 495,211,358.88
Banker’s acceptance bills 1,727,963,543.99 1,151,432,748.29
Total 2,008,405,860.19 1,646,644,107.17
Total amount of notes payable due and unpaid at the end of the current period: Nil.
25. Accounts payable
(1) Particulars of accounts payable
In RMB
Item Closing balance Opening balance
Payment for materials 5,156,025,655.74 6,379,442,178.87
Payment for projects and equipment 563,403,370.98 238,100,061.70
Others 266,857,563.60 112,347,885.43
Total 5,986,286,590.32 6,729,890,126.00
26. Contract liabilities
In RMB
Item Closing balance Opening balance
Loans 26,193,456.12 39,681,986.94
Total 26,193,456.12 39,681,986.94
27. Employee benefits payable
(1) Employee benefits payable
In RMB
Item Opening balance Increase Decrease Closing balance
I. Short-term benefits 494,188,318.20 3,923,597,175.06 3,927,719,830.29 490,065,662.97
II. Post-employment 8,950,403.86 244,829,829.64 243,720,581.17 10,059,652.33
119
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
benefits - defined
contribution plans
III. Termination
6,118,695.31 6,118,695.31
benefits
Total 503,138,722.06 4,174,545,700.01 4,177,559,106.77 500,125,315.30
(2) Short-term employee benefits
In RMB
Item Opening balance Increase Decrease Closing balance
1. Wages, bonuses, allowances
483,302,445.96 3,427,491,424.71 3,433,010,711.69 477,783,158.98
and subsidies
2. Staff welfare 7,033,964.95 237,030,483.06 235,717,370.98 8,347,077.03
3. Social insurance contributions 3,095,849.82 134,491,048.09 134,279,334.36 3,307,563.55
Workers’ compensation
305,337.04 5,995,376.33 6,010,698.24 290,015.13
insurance
Medical and maternity
2,790,512.78 128,495,671.76 128,268,636.12 3,017,548.42
insurance
4. Housing provident fund 713,714.47 114,496,314.06 114,644,453.18 565,575.35
5. Trade union fund and
42,343.00 10,087,905.14 10,067,960.08 62,288.06
employee education fund
Total 494,188,318.20 3,923,597,175.06 3,927,719,830.29 490,065,662.97
(3) Defined contribution plans
In RMB
Item Opening balance Increase Decrease Closing balance
1. Basic pension insurance 8,515,363.52 236,273,469.15 235,230,443.46 9,558,389.21
2. Unemployment insurance 435,040.34 8,556,360.49 8,490,137.71 501,263.12
Total 8,950,403.86 244,829,829.64 243,720,581.17 10,059,652.33
28. Taxes payable
In RMB
Item Closing balance Opening balance
VAT 51,132,065.23 13,157,710.23
Enterprise income tax 339,281,179.49 118,468,480.14
Individual income tax 6,334,094.56 6,497,075.81
Urban maintenance and construction tax 3,920,049.58 5,756,770.23
Property tax 3,841,808.72 2,086,047.98
Stamp duty 4,553,692.87 1,218,619.49
Education surcharge 1,765,890.80 2,533,372.30
Land use tax 267,878.11 251,467.78
Local education surcharge 1,061,118.33 1,688,914.92
Water conservancy construction fund 3,191.10
Environmental protection tax 132,003.25 30,893.87
Total 412,289,780.94 151,692,543.85
29. Other payables
In RMB
Item Closing balance Opening balance
Other payables 54,324,601.72 323,166,075.34
Total 54,324,601.72 323,166,075.34
(1) Other payables
1) Other payables by nature
In RMB
Item Closing balance Opening balance
Advance from customers under factoring agreement 255,139,275.93
Temporary receipts payable 30,358,476.53 53,170,787.42
Others 23,966,125.19 14,856,011.99
Total 54,324,601.72 323,166,075.34
120
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
30. Non-current liabilities due within one year
In RMB
Item Closing balance Opening balance
Long-term borrowings due within one year 1,165,803,694.70 1,386,857,142.00
Long-term payables due within one year 34,658,340.90
Lease liabilities due within one year 23,941,171.43 69,030,382.03
Total 1,189,744,866.13 1,490,545,864.93
31. Other current liabilities
In RMB
Item Closing balance Opening balance
Output tax to be recognized 4,476,657.36 2,440,030.34
Total 4,476,657.36 2,440,030.34
32. Long-term borrowings
(1) Long-term borrowings by category
In RMB
Item Closing balance Opening balance
Pledge loans 96,273,070.00
Guaranteed loans 200,000,000.00
Credit loans 2,583,821,643.49 1,274,252,691.80
Guaranteed and pledge loans 100,000,000.00 200,000,000.00
Pledge, mortgage and guaranteed loans 514,000,000.00 260,000,000.00
Total 3,197,821,643.49 2,030,525,761.80
33. Lease liabilities
In RMB
Item Closing balance Opening balance
Lease obligations payable 1,985,857,535.57 1,477,069,971.87
Less: Unrecognized financing costs -338,538,489.37 -329,259,807.15
Total 1,647,319,046.20 1,147,810,164.72
34. Long-term payables
In RMB
Item Closing balance Opening balance
Long-term payables 78,927,000.98
Total 78,927,000.98
(1) Long-term payables by nature
In RMB
Item Closing balance Opening balance
Finance lease obligations payable 78,927,000.98
35. Provisions
In RMB
Item Closing balance Opening balance Reason
Product warranty 42,352,230.73 67,188,779.26
Provision for sales return 26,849,952.43 22,254,051.87
Total 69,202,183.16 89,442,831.13
36. Deferred income
In RMB
Item Opening balance Increase Decrease Closing balance Reason
Government grants 685,633,680.65 204,822,493.63 142,868,540.16 747,587,634.12
Total 685,633,680.65 204,822,493.63 142,868,540.16 747,587,634.12 --
37. Share capital
In RMB
121
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
+/-
Opening Capitalizatio Closing
balance New issue Bonus shares n of capital Others Subtotal balance
reserve
1,709,867,32 1,709,867,32
Total shares
7.00 7.00
38. Capital reserve
In RMB
Item Opening balance Increase Decrease Closing balance
Capital premium (share
7,957,871,910.95 7,368,451.11 68,729,455.32 7,896,510,906.74
premium)
Other capital reserve 141,652,961.95 16,734,915.50 4,703.42 158,383,174.03
Total 8,099,524,872.90 24,103,366.61 68,734,158.74 8,054,894,080.77
Other information, including explanation about changes in the current period and reasons thereof:
In January and March 2021, the Company entered into share transfer agreements with the minority shareholders of RF Top Electronic,
namely Shanghai Nanyao Asset Management Center (L.P.), Zhoushan Longxiang Investment Partnership (L.P.), XIANG Rong,
Suzhou Aifuxin Investment Management Center (L.P.), CHEN Rongda and JIANG Nanqiu respectively, pursuant to which, the
Company purchased 19.44% shares held by them in total in RF Top Electronic at the aggregate purchase price of RMB83,405,588. 47 ,
as a result of which, the Company’s capital reserve was reduced by RMB44,165,616.16 in the current period.
In June 2022, pursuant to the capital injection agreement entered into between the Company and RF Top Electronic, the Company
contributed an additional amount of RMB52 million to RF Top Electronic, which resulted in the dilution of the minority interests, and
an increase in the consolidated capital reserve by RMB7,368,451.11.
In March 2022, with the approval of the general meeting, the Company decided to implement the ESOP for key officers and technical
personnel. The share-based payments thereunder would be amortized over the service period, which resulted in an increase in the
capital reserve by RMB16,734,915.50. See Note XI(I) for details.
In March 2022, the Company received a Confirmation of Securities Transfer Registration from China Securities Depository and
Clearing Corporation Limited Shenzhen Branch, confirming that 1,366,120 shares of the Company held in the “special securities
account for repurchase of Suzhou Dongshan Precision Manufacturing Co., Ltd.” were transferred to “Suzhou Dongshan Precision
Manufacturing Co., Ltd. – third employee stock ownership plan” on March 15, 2022 by means of non-trade transfer, which resulted
in a decrease in the capital reserve by RMB24,563,839.16.
The decrease in the capital reserve by RMB4,703.42 in the current period reflected the effect on minority interests caused by the share
incentives granted by the Company.
39. Treasury shares
In RMB
Item Opening balance Increase Decrease Closing balance
Treasury shares 100,479,794.32 49,990,856.17 24,563,839.16 125,906,811.33
Total 100,479,794.32 49,990,856.17 24,563,839.16 125,906,811.33
Other information, including explanation about changes in the current period and reasons thereof:
1) Pursuant to the Proposal Regarding Repurchase of the Company’s Shares (the “Repurchase”) adopted at the 22nd meeting of the 5th
Board of Directors held on April 25, 2022, the Company repurchased 3.0487 million shares in total by aggregate auction through the
special securities account for repurchase as of the end of May 2022, accounting for 0.18% of the Company’s total share capital, at the
purchase price of RMB15.98-16.77 per share, or RMB49.9909 million in total.
2) Refer to “Capital reserve” for the reason of decrease in treasury shares.
122
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
40. Other comprehensive income
In RMB
2022
Less: Other Less: Other Amount Balance at
Balance at Amount
Item comprehensive comprehensive attributable December 31,
January 1, 2022 Amount before Less: Income attributable to
income income to minor 2022
tax tax expenses the parent after
reclassified into reclassified into interest
tax
profit or loss retained earnings after tax
I. Other
comprehensive
income that
cannot be -350,000,000.00 -350,000,000.00
reclassified
into profit or
loss
Change in fair
value of
investments in -350,000,000.00 -350,000,000.00
other equity
instruments
II. Other
comprehensive
income that
-
will be -169,626,066.21 -78,788,663.50 -17,773,168.75 -173,349,939.00 -24,109.73 -342,976,005.21
269,935,880.98
reclassified
into profit or
loss
Reserves for
-
cash flow 54,755,948.99 -78,788,663.50 -17,773,168.75 -112,225,912.41 -24,109.73 -57,469,963.42
208,811,854.39
hedge
Differences on
translation of
foreign
-224,382,015.20 -61,124,026.59 -61,124,026.59 -285,506,041.79
currency
financial
statements
T otal other
-
comprehensive -519,626,066.21 -78,788,663.50 -17,773,168.75 -173,349,939.00 -24,109.73 -692,976,005.21
269,935,880.98
income
41. Surplus reserve
In RMB
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserve 111,698,315.15 23,649,519.95 135,347,835.10
Total 111,698,315.15 23,649,519.95 135,347,835.10
42. Retained profits
In RMB
Item 2022 2021
Opening balance of retained profits after adjustment 5,275,515,670.63 3,598,580,392.76
Add: Net profit attributable to owners of the parent 2,367,519,530.91 1,862,481,138.84
Less: Appropriation to statutory surplus reserve 23,649,519.95 36,492,937.75
Dividends payable to the ordinary shareholders 341,182,627.47 170,986,732.70
Add: Others 21,933,809.48
Closing balance of retained profits 7,278,203,054.12 5,275,515,670.63
Particulars of adjustment to the retained profits at the beginning of the current period:
1) The effect of retrospective adjustment pursuant to the CASBEs and related new provisions thereunder on the opening balance of
retained profits was nil.
2) The effect of changes in accounting policies on the opening balance of retained profits was nil.
3) The effect of correction of material accounting errors on the opening balance of retained profits was nil.
4) The effect of changes in the scope of consolidation resulting from business combinations involving entities under common control
on the opening balance of retained profits was nil.
5) The cumulative effect of other adjustments on the opening balance of retained profits was nil.
123
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
43. Operating revenue and operating costs
In RMB
2022 2021
Item
Income Cost Income Cost
Main business 31,450,821,150.93 25,961,338,699.87 31,682,727,248.03 27,080,576,091.48
Other business 129,325,581.65 59,340,633.37 110,420,660.09 47,974,536.45
Total 31,580,146,732.58 26,020,679,333.24 31,793,147,908.12 27,128,550,627.93
44. Taxes and surcharges
In RMB
Item 2022 2021
Urban maintenance and construction tax 42,173,074.00 24,263,505.47
Education surcharge 18,333,969.54 11,969,192.59
Property tax 16,738,300.91 16,123,105.43
Land use tax 1,587,701.79 1,365,774.21
Vehicle and vessel tax 9,563.33 24,502.86
Stamp duty 14,176,516.91 11,367,477.23
Local education surcharge 12,228,157.62 7,913,333.55
Environmental protection tax 404,606.40 133,322.63
Total 105,651,890.50 73,160,213.97
45. Selling expenses
In RMB
Item 2022 2021
Employee benefits 178,775,039.38 190,368,189.92
Sales service fees 35,375,649.64 39,874,711.20
Export charges 52,914,479.30 35,107,304.52
Travel expenses 26,656,711.23 30,192,865.53
Entertainment expenses 18,403,395.91 13,589,530.56
Others 40,868,178.04 31,955,044.68
Total 352,993,453.50 341,087,646.41
46. Administrative expenses
In RMB
Item 2022 2021
Employee benefits 445,921,834.05 416,884,816.93
Depreciation and amortization 124,492,061.14 112,065,654.97
Consulting service fees 58,050,066.27 72,107,147.93
Office expenses 44,182,104.24 49,392,919.93
Entertainment expenses 44,097,815.99 39,212,589.24
Travel expenses 15,460,221.90 12,835,540.39
Rents 10,211,075.07 8,372,878.92
Repair costs 19,422,207.36 17,205,668.65
Taxes 1,409,194.20 436,304.97
Others 52,415,906.67 53,151,208.43
Total 815,662,486.89 781,664,730.36
47. R&D expenses
In RMB
Item 2022 2021
Materials requisitioned 448,026,811.32 553,757,553.07
Labor costs 367,119,066.09 345,837,438.45
Depreciation 76,160,187.19 56,671,015.71
Others 48,779,387.38 72,301,199.72
Total 940,085,451.98 1,028,567,206.95
48. Financial expenses
In RMB
124
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Item 2022 2021
Interest expenses 302,704,601.47 285,474,106.93
Interest on leases and financing fees 80,950,330.25 85,865,366.64
Less: Interest income 42,128,725.22 62,819,318.55
Add: Exchange loss -204,336,793.36 70,483,663.21
Bank charges and others 62,443,691.35 57,659,855.67
Total 199,633,104.49 436,663,673.90
49. Other income
In RMB
Sources of other income 2022 2021
Government grants related to assets 142,868,540.16 105,569,311.37
Government grants related to income 174,748,593.64 163,175,414.88
Refund of individual income tax
956,961.84 722,866.99
withholding service fees
50. Investment income
In RMB
Item 2022 2021
Income from long-term equity
-3,353,804.37 -7,515,648.15
investments under equity method
Investment income from disposal of
28,827,931.90
long-term equity investments
Investment income from financial assets
held for trading during the holding 6,348,937.52 108,467.86
period
Investment income from disposal of
2,956,230.02 9,012,671.97
financial assets held for trading
Discount loss on accounts receivable
-10,933,498.09 -768,750.98
financing
Income from bank wealth management
4,059,746.10 11,913,618.63
products
Total -922,388.82 41,578,291.23
51. Gain on changes in fair value
In RMB
Source of gain on changes in fair value 2022 2021
Financial assets held for trading -66,613,459.50 8,645,469.99
Total -66,613,459.50 8,645,469.99
52. Impairment loss on credit
In RMB
Item 2022 2021
Loss from doubtful accounts -76,228,643.25 -7,992,105.91
Total -76,228,643.25 -7,992,105.91
53. Impairment loss on assets
In RMB
Item 2022 2021
I. Loss from doubtful accounts 4,184,595.15 -11,270,721.08
II. Allowance for impairment of
-441,556,620.37 -166,254,407.47
inventories or costs of fulfilling contracts
V. Impairment loss on fixed assets -11,049,705.17 -983,457.38
XI. Goodwill impairment loss -19,782,833.44 -8,868,134.17
Total -468,204,563.83 -187,376,720.10
54. Gain on disposal of assets
In RMB
Source of gain on disposal of assets 2022 2021
Gain on disposal of fixed assets -5,513,221.27 -14,060,145.96
125
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
55. Non-operating revenue
In RMB
Amount recognized in non-
Item 2022 2021
recurring gain or loss
Penalties 7,926,374.74 407,738.14 7,926,374.74
Amounts that cannot be paid 3,996,486.25 2,380,233.49 3,996,486.25
Others 289,484.75 324,831.16 289,484.75
Total 12,212,345.74 3,112,802.79 12,212,345.74
56. Non-operating expenses
In RMB
Amount recognized in non-
Item 2022 2021
recurring gain or loss
Donations 6,916,600.00 3,503,180.00 6,916,600.00
Loss on destruction and
retirement of non-current 8,707,696.75 984,352.01 8,707,696.75
assets
Penalties, overdue fines and
1,440,637.80 972,242.63 1,440,637.80
liquidated damages
Others 781,275.49 546,696.75 781,275.49
Total 17,846,210.04 6,006,471.39 17,846,210.04
57. Income tax expenses
(1) Statement of income tax expenses
In RMB
Item 2022 2021
Income tax expense 447,983,321.47 213,580,884.70
Deferred income tax expenses 25,656,121.62 36,341,939.66
Total 473,639,443.09 249,922,824.36
(2) Reconciliation of income tax expenses to accounting profit
In RMB
Item 2022
Total profit 2,840,898,966.65
Income tax expenses calculated based on statutory/applicable
426,134,845.00
tax rate
Effect of different tax rates applicable to subsidiaries 30,184,598.68
Effect of non-deductible costs, expenses and losses 5,895,200.27
Effect of deductible temporary differences or deductible losses
79,000,011.80
not recognized for deferred tax assets for the current period
Effect of super deduction of R&D expenses -67,575,212.66
Income tax expenses 473,639,443.09
58. Other comprehensive income
See the notes related to other comprehensive income.
59. Items of the cash flow statement
(1) Other cash receipts related to operating activities
In RMB
Item 2022 2021
Security deposit for acceptance bills 406,241,523.96 129,542,128.04
Government grants 379,880,087.27 318,989,224.87
Interest income 42,128,725.22 62,819,318.55
Temporary receipts payable and others 27,886,394.91 732,569.30
Total 856,136,731.36 512,083,240.76
(2) Other cash payments related to operating activities
In RMB
126
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Item 2022 2021
Security deposit for acceptance bills 767,949,563.14 151,102,248.04
Payment of selling expenses in cash 174,218,414.12 150,719,456.49
Payment of administrative expenses in
247,248,591.70 252,714,258.46
cash
Payment of R&D expenses in cash 48,779,307.34 72,301,199.72
Bank charges 62,443,691.35 57,659,855.67
Temporary payment receivable and
36,575,288.51 40,105,256.38
others
Total 1,337,214,856.16 724,602,274.76
(3) Other cash receipts related to investing activities
In RMB
Item 2022 2021
Recovery of term deposits 228,424,521.00 50,000,000.00
Recovery of performance compensation 7,000,000.00
Recovery of asset transfer price 564,294,406.73
Total 235,424,521.00 614,294,406.73
(4) Other cash payments related to investing activities
In RMB
Item 2022 2021
Term deposits 455,064,192.71
Loss of control over subsidiaries 1,288.94
Total 455,064,192.71 1,288.94
(5) Other cash receipts related to financing activities
In RMB
Item 2022 2021
Security deposits 826,870,220.72 2,101,333,325.23
Proceeds from discount on acceptance
1,312,323,501.13 1,820,194,933.27
bills and letters of credit
Total 2,139,193,721.85 3,921,528,258.50
(6) Other cash payments related to financing activities
In RMB
Item 2022 2021
Security deposits 453,162,239.17 826,870,220.72
Payment of rents 253,811,187.11 282,078,462.04
Payments under bill financing 1,337,897,642.56 3,581,805,423.85
Repurchase of shares 49,990,856.17 100,479,794.32
Acquisition of minority interests in RF
97,834,888.06 65,756,910.17
Top Electronic
Total 2,192,696,813.07 4,856,990,811.10
60. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
In RMB
Supplementary information 2022 2021
1. Reconciliation of net profit to cash
flows from operating activities:
Net profit 2,367,259,523.56 1,860,899,698.13
Add: Allowance for impairment of
544,433,207.08 195,368,826.01
assets
Depreciation of fixed assets, oil
and gas assets, and productive 1,697,771,894.84 1,581,049,391.72
biological assets
Depreciation of right-of-use assets 100,106,051.84 86,304,860.90
Amortization of intangible assets 57,776,055.04 48,775,081.14
Amortization of long-term deferred 157,201,034.52 147,371,022.13
127
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
expenses
Loss on disposal of fixed assets,
intangible assets and other long-
5,513,221.27 14,060,145.96
term assets (gain expressed with
“-”)
Loss on retirement of fixed assets
8,707,696.75 984,352.01
(gain expressed with “-”)
Loss on changes in fair value (gain
66,613,459.50 -8,645,469.99
expressed with “-”)
Financial expenses (income
179,318,138.36 351,562,005.91
expressed with “-”)
Investment loss (income expressed
-10,011,109.27 -41,578,291.23
with “-”)
Decrease in deferred tax assets
-73,066,740.07 22,499,150.53
(increase expressed with “-”)
Increase in deferred tax liabilities
98,722,861.69 13,842,789.13
(decrease expressed with “-”)
Decrease in inventories (increase
-160,903,575.10 -739,877,310.44
expressed with “-”)
Decrease in trade receivables
625,999,220.48 -780,445,681.69
(increase expressed with “-”)
Increase in trade payables
-1,052,291,844.61 457,373,913.99
(decrease expressed with “-”)
Others 16,734,915.50
Net cash flows from operating
4,629,884,011.38 3,209,544,484.21
activities
2. Significant investing and financing
activities not involving cash receipts and
payments
Debt-to-capital swap
Convertible corporate bonds due within
one year
Fixed assets acquired under finance
leases
3. Net changes in cash and cash
equivalents:
Closing balance of cash 5,457,026,822.70 3,939,301,126.79
Less: Opening balance of cash 3,939,301,126.79 2,873,135,085.47
Add: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net increase in cash and cash
1,517,725,695.91 1,066,166,041.32
equivalents
(2) Composition of cash and cash equivalents
In RMB
Item Closing balance Opening balance
I. Cash 5,457,026,822.70 3,939,301,126.79
Incl.: Cash on hand 340,651.93 241,046.60
Bank deposit readily available for
5,456,686,170.77 3,939,060,080.19
payment
III. Closing balance of cash and cash
5,457,026,822.70 3,939,301,126.79
equivalents
61. Assets subject to restrictions on ownership or right of use
In RMB
Item Closing carrying value Reason of restriction
Cash and bank balances 1,674,175,995.02 Security deposit for bills, loans, etc.
Fixed assets 459,521,491.55 Collateral for loans, sale and lease back
Accounts receivable financing 441,621,937.83 Pledge of notes
Right-of-use assets 951,068,254.01 Finance lease
Total 3,526,387,678.41
128
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
62. Monetary items denominated in foreign currencies
(1) Monetary items denominated in foreign currencies
In RMB
Closing balance in foreign
Item Exchange rate Closing balance in RMB
currency
Cash and bank balances 3,749,263,803.12
Incl.: USD 527,233,216.63 6.96460 3,671,968,460.54
EUR 8,532,422.87 7.42290 63,335,321.72
HKD 1,050,849.62 0.89327 938,692.44
KRW 19,096,808.00 0.00552 105,471.67
SGD 1,375,985.72 5.18310 7,131,871.59
NTD 394,433.00 0.22700 89,536.29
JPY 278.00 0.05236 14.56
SEK 25,274.71 0.66590 16,830.43
CHF 0.74 7.54320 5.58
NOK 29,936.34 0.70420 21,081.17
MXN 15,826,852.63 0.35740 5,656,517.13
Accounts receivable 5,444,917,839.46
Incl.: USD 781,576,649.25 6.96460 5,443,368,731.37
EUR 190,477.60 7.42290 1,413,896.18
HKD
JPY 2,582,351.20 0.05236 135,211.91
Long-term borrowings 481,100,696.82
Incl.: USD 69,078,008.33 6.96460 481,100,696.82
EUR
HKD
Other receivables 38,679,653.02
Incl.: USD 3,205,277.15 6.9646 22,323,473.24
NTD 13,000.00 0.227 2,951.00
NOK 23,222,420.88 0.7042 16,353,228.78
Short-term borrowings 1,955,594,688.97
Incl.: USD 272,178,970.36 6.9646 1,895,617,656.97
EUR 8,080,000.00 7.4229 59,977,032.00
Accounts payable 2,725,863,060.76
Incl.: USD 390,455,533.55 6.9646 2,719,366,608.96
EUR 156,504.39 7.4229 1,161,716.44
JPY 101,852,000.00 0.05236 5,332,970.72
SEK 2,650.00 0.6659 1,764.64
Employee benefits payable 52,016,173.72
Incl.: USD 7,468,652.00 6.9646 52,016,173.72
Taxes payable 313,073,333.33
Incl.: USD 44,952,091.05 6.9646 313,073,333.33
Other payables 52,613,130.27
Incl.: USD 7,554,364.97 6.9646 52,613,130.27
Non-current liabilities due
134,522,114.07
within one year
Incl.: USD 19,315,124.21 6.9646 134,522,114.07
(2) Information about overseas operating entities, including main places of business and functional
currencies of major overseas operating entities, basis for choice of such functional currencies, and reasons of
changes in functional currencies:
□ Applicable N/A
129
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
63. Government grants
(1) Particulars of government grants
In RMB
Amount
Item Amount Recorded in recognized
profit or loss
Yancheng subsidy for production equipment 384,111,702.15 Other income 65,286,852.60
District special fund for high-quality development of industrial economy 158,226,471.48 Other income 41,216,171.12
Technology upgrading subsidy to Multek 81,407,701.16 Other income 11,627,050.30
Special reward fund of the science and technology industrial park 57,474,000.00 Other income 7,416,000.00
2020 central financial subsidy for the building of emergency supplies
19,413,333.37 Other income 2,559,999.96
assurance system
Reward for high-quality development of industrial economy –
18,325,514.26 Other income 3,504,674.44
replacement of labor with machine
Suzhou subsidy for machinery and equipment 5,853,443.08 Other income 4,297,147.92
Reward and subsidy to RF Top Electronic for industrial technological
5,038,630.67 Other income 727,486.20
upgrading
Subsidy to Mutto Optronics for technological upgrading 4,540,666.67 Other income 749,200.00
Reward and subsidy for supporting effective investment by
4,466,156.25 Other income 297,743.75
manufacturers
Special fund for high-quality development (digitalization) 2,719,500.00 Other income 220,500.00
Other subsidies 6,010,515.03 Other income 4,965,713.87
Special reward for outstanding contributions 64,086,500.00 Other income 64,086,500.00
Job stabilization subsidy 16,252,362.09 Other income 16,252,362.09
Special fund for high-quality development of industrial economy 14,150,000.00 Other income 14,150,000.00
Special reward for development of foreign trade 7,104,900.00 Other income 7,104,900.00
Local economic contribution reward 5,774,900.00 Other income 5,774,900.00
Municipal special fund for the development of advanced manufacturing
5,700,000.00 Other income 5,700,000.00
industry
2022 municipal special fund for the development of advanced
5,500,000.00 Other income 5,500,000.00
manufacturing industry
Development of the advanced manufacturing industry 5,180,000.00 Other income 5,180,000.00
Refund of income tax 5,042,196.10 Other income 5,042,196.10
2022 municipal special fund for the development of advanced
4,336,200.00 Other income 4,336,200.00
manufacturing industry (batch 1) – construction of key industrial projects
Municipal special fund for the development of open economy –
2,610,000.00 Other income 2,610,000.00
availability of foreign investment
Subsidy for work in lieu of training 2,555,589.66 Other income 2,555,589.66
2021 model factory for industrial Internet of the province 2,000,000.00 Other income 2,000,000.00
2021 high-quality development of industrial economy and intelligent
1,910,000.00 Other income 1,910,000.00
upgrading
2021 provincial special fund for intelligent transformation and digital
1,790,000.00 Other income 1,790,000.00
upgrading
Subsidy for stay during the Spring Festival 1,717,100.00 Other income 1,717,100.00
2020 science and technology policy reward and subsidy 1,680,000.00 Other income 1,680,000.00
2020 Yancheng Hi-tech Zone fund for encouraging proprietary
1,600,680.00 Other income 1,600,680.00
innovation and building new driving force for development
2021 special fund for the development of financial industry (batch 2) 1,600,000.00 Other income 1,600,000.00
2021 district reward fund for scientific and technological innovations 1,515,300.00 Other income 1,515,300.00
2021 reward for high-quality development of industrial economy 1,437,500.00 Other income 1,437,500.00
2022 municipal special fund for advanced manufacturing bases 1,340,000.00 Other income 1,340,000.00
REITs subsidy for differences in rent under new and old contracts 1,195,822.91 Other income 1,195,822.91
2021 municipal special fund for the development of advanced
1,000,000.00 Other income 1,000,000.00
manufacturing industry (batch 2)
2022 Suzhou subsidy for scientific and technological development (batch
1,000,000.00 Other income 1,000,000.00
1)
2022 municipal special fund for the development of advanced
manufacturing industry (batch 1) – commencement of operation and 1,000,000.00 Other income 1,000,000.00
achievement of design capacity of key projects
2021 special fund for business development (batch 1) – supporting 900,000.00 Other income 900,000.00
130
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
headquarters economy of transnational companies
Application for 2020 Yancheng Hi-tech Zone reward 788,050.00 Other income 788,050.00
2021 Seagull program municipal reward and subsidy – digital RMB 779,228.50 Other income 779,228.50
Subsidy for the building of skilled talent base 600,000.00 Other income 600,000.00
Others 12,602,264.38 Other income 12,602,264.38
Financial
Loan interest subsidy 309,000.00 309,000.00
expenses
(2) Return of government grants
□ Applicable N/A
VIII. Changes in the Scope of Consolidation
1. Changes in the scope of consolidation caused by other reasons
Particulars of changes in the scope of consolidation caused by other reasons (such as subsidiaries newly established or liquidated):
(1) Subsidiaries newly included in the scope of consolidation
In RMB
Method of
Date of acquisition of Ratio of capital
Company name acquisition of Capital contribution
shares contribution
shares
Suzhou Dongyue New Energy
Investment September 6, 2022 RMB165,000,000.00 100.00%
Technology Co., Ltd.
DSBJ MEXICO, S.DER. L. DEC.
Investment March 27, 2022 MXN3,000.00 100.00%
V.
Suzhou Dongshan Industrial
Investment December 29, 2022 RMB 30,000,000.00 100.00%
Investment Co., Ltd.
(2) Subsidiaries removed from the scope of consolidation
In RMB
Method of
Date of disposal of Net assets at the Net profit from January 1,
Company name disposal of
shares date of disposal 2022 to the date of disposal
shares
Suzhou Aiguan Material
Deregistration September 29, 2022 3,611,898.67
Technology Co., Ltd.
IX. Interests in Other Entities
1. Interests in subsidiaries
(1) Composition of the enterprise group
Principal place Place of Shareholding percentage
Subsidiary Nature of business Method of acquisition
of business incorporation Direct Indirect
Business combination
Yongchuang Tech Suzhou Suzhou Manufacturing 100.00% involving entities under
common control
Business combination
Suzhou Yuanshi Electronic
Suzhou Suzhou Manufacturing 100.00% involving entities under
Technology Co., Ltd.
common control
Hong Kong, Hong Kong,
Hong Kong Dongshan Business & investment 100.00% Established
China China
Suzhou Dongkui Lighting
Suzhou Suzhou Manufacturing 100.00% Established
Co., Ltd.
Suzhou Chengjia Suzhou Suzhou Manufacturing 100.00% Established
Dongguan Dongshan
Precision Manufacturing Dongguan Dongguan Manufacturing 95.00% 5.00% Established
Co., Ltd.
Suzhou Dongjiyuan Metal
Suzhou Suzhou Manufacturing 100.00% Established
Technology Co., Ltd.
Yancheng Dongshan Yancheng Yancheng Manufacturing 95.00% 5.00% Established
Business combination
RF Top Electronic Suzhou Suzhou Manufacturing 93.51%
involving entities not under
131
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
common control
Suzhou Jebson Intelligent
Suzhou Suzhou Manufacturing 51.00% Established
Technology Co., Ltd.
Suzhou Dongdai
Electronic Technology Co., Suzhou Suzhou Manufacturing 51.00% Established
Ltd.
Suzhou Dongyan
Electronic Technology Co., Suzhou Suzhou Manufacturing 51.00% Established
Ltd.
Yancheng Dongshan
Business Management Co., Yancheng Yancheng Property management 95.00% 5.00% Established
Ltd.
Hong Kong Dongshan Hong Kong, Hong Kong,
Business & investment 100.00% Established
Holding Limited China China
Yancheng Dongshan
Communication Yancheng Yancheng Manufacturing 100.00% Established
Technology Co., Ltd.
Shanghai Chengjia
Consulting Management Shanghai Shanghai Business & investment 100.00% Established
Co., Ltd.
Business combination
Mutto Optronics Group
BVI BVI Business & investment 100.00% involving entities not under
Limited
common control
DSBJ Solutions INC USA USA Business & investment 100.00% Established
DSBJ holdings Inc. USA USA Business & investment 100.00% Established
DSBJ International Inc. USA USA Business & investment 100.00% Established
DSBJ Finland OY Finland Finland Business & investment 100.00% Established
Dragon Electronix
USA USA Business & investment 100.00% Established
Holdings INC.
Dongshan International Cayman Cayman
Business & investment 100.00% Established
Holdings Inc Islands Islands
Business combination
Mutto Optronics Suzhou Suzhou Manufacturing 100.00% involving entities not under
common control
Suzhou Dongshan
Precision Technology Co., Suzhou Suzhou Manufacturing 100.00% Established
Ltd.
Yancheng Mutto Optronics
Yancheng Yancheng Manufacturing 100.00% Established
Technology Co., Ltd.
Business combination
Multi-Fineline Electronix,
USA USA Business & investment 100.00% involving entities not under
Inc.
common control
Business combination
Delaware, Delaware,
MFLEX Delaware, Inc. Business & investment 100.00% involving entities not under
USA USA
common control
Business combination
MFLEX B.V. Netherlands Netherlands Business & investment 100.00% involving entities not under
common control
Business combination
Multi-Fineline Electronix
Singapore Singapore Business & investment 100.00% involving entities not under
Singapore Pte. Ltd.
common control
Business combination
MFLEX Suzhou Suzhou Suzhou Manufacturing 100.00% involving entities not under
common control
Dowell Smart Suzhou Co.,
Suzhou Suzhou Manufacturing 100.00% Established
Ltd.
Business combination
MFLEX Chengdu Co.,
Chengdu Chengdu Manufacturing 100.00% involving entities not under
Ltd.
common control
MFLEX Yancheng Co.,
Yancheng Yancheng Manufacturing 100.00% Established
Ltd.
DSBJ Pte. Ltd. Singapore Singapore Business & investment 100.00% Established
Multek Technology
Sweden Sweden Business & investment 100.00% Established
Sweden AB
Multek Technology
Malaysia Malaysia Business & investment 100.00% Established
Malaysia SDN.BHD
DSBJ Germany Pte. Ltd. Germany Germany Business & investment 100.00% Established
Multek Group (Hong Hong Kong, Hong Kong,
Business & investment 100.00% Established
Kong) Limited China China
Business combination
The Dii Group (BVI) Co.
BVI BVI Business & investment 100.00% involving entities not under
Limited
common control
Business combination
Multek Group (Hong Hong Kong, Hong Kong,
Business & investment 100.00% involving entities not under
Kong) Limited China China
common control
Multek Technologies Business combination
Mauritius Mauritius Business & investment 100.00%
Limited involving entities not under
132
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
common control
Business combination
The Dii Group Asia Hong Kong, Hong Kong,
Business & investment 100.00% involving entities not under
Limited China China
common control
Business combination
Hong Kong, Hong Kong,
Astron Group Limited Business & investment 100.00% involving entities not under
China China
common control
Business combination
Multek Technology
Zhuhai Zhuhai Manufacturing 100.00% involving entities not under
(Zhuhai) Co., Ltd.
common control
Business combination
Vastbright PCB (Holding) Hong Kong, Hong Kong,
Business & investment 100.00% involving entities not under
Limited China China
common control
Business combination
Multek Industries Zhuhai Zhuhai Manufacturing 100.00% involving entities not under
common control
Business combination
Multek Electronics Zhuhai Zhuhai Manufacturing 100.00% involving entities not under
common control
Business combination
Multek Zhuhai Zhuhai Zhuhai Manufacturing 100.00% involving entities not under
common control
Business combination
Multek China Zhuhai Zhuhai Manufacturing 100.00% involving entities not under
common control
Multek Technology, Inc. USA USA Business & investment 100.00% Established
Suzhou Dongbo Precision
Suzhou Suzhou Manufacturing 51.00% Established
Manufacturing Co., Ltd.
MFLEX Shanghai Co.,
Shanghai Shanghai Wholesale 100.00% Established
Ltd.
Shenzhen Qindao
Dongchuang Investment Shenzhen Shenzhen Business & investment 76.92% Established
Partnership (L.P.)
Suzhou Dongke Real
Suzhou Suzhou Real estate 100.00% Established
Estate Co., Ltd.
Yancheng Dongchuang
Precision Manufacturing Yancheng Yancheng Manufacturing 100.00% Established
Co., Ltd.
DSBJ Norway AS Norway Norway Business & investment 100.00% Established
Suzhou Dongchen
Intelligent Equipment Suzhou Suzhou Manufacturing 100.00% Established
Manufacturing Co., Ltd.
Shanghai Dongxin New
Energy Technology Co., Shanghai Shanghai Manufacturing 95.00% 5.00% Established
Ltd.
Shanghai Donglan New
Energy Technology Co., Shanghai Shanghai Manufacturing 100.00% Established
Ltd.
Hainan Chengjia
Technology Consulting Haikou Haikou Technology consulting 100.00% Established
Co., Ltd.
Suzhou Dongyue New
Energy Technology Co., Kunshan Kunshan Manufacturing 90.00% 10.00% Established
Ltd.
DSBJ MEXICO,
Mexico Mexico Manufacturing 100.00% Established
S.DER.L.DEC.V.
Suzhou Dongshan
Industrial Investment Co., Suzhou Suzhou Business & investment 100.00% Established
Ltd.
2. Transactions resulting in changes in the share of the owners’ equity of a subsidiary while retaining the
control over the subsidiary
(1) Description of changes in the share of the owners’ equity of the subsidiary
Shareholding percentage Shareholding percentage
Name of subsidiary Time of change
before the change after the change
RF Top Electronic January 31, 2022 68.91% 82.33%
RF Top Electronic March 31, 2022 82.33% 88.35%
RF Top Electronic August 31, 2022 88.35% 93.51%
(2) Effects of the transactions on minority interests and owners’ equity attributable to the parent
In RMB
RF Top Electronic RF Top Electronic RF Top Electronic
Acquisition cost
133
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
--Cash 65,847,206.25 17,558,382.22 14,429,299.59
--Fair value of non-cash assets 37,570,700.41
Total acquisition cost/consideration
65,847,206.25 17,558,382.22 52,000,000.00
for disposal
Less: Share of the net assets of the
subsidiary calculated based on the 27,047,455.73 12,192,516.58 44,631,548.89
shares acquired/disposed
Difference 38,799,750.52 5,365,865.64 7,368,451.11
Incl.: Adjustment to capital reserve 38,799,750.52 5,365,865.64 7,368,451.11
Adjustment to surplus reserve
Adjustment to retained profits
3. Interests in joint ventures or associates
(1) Summarized financial information of insignificant joint ventures and associates
In RMB
Closing balance/2022 Opening balance/2021
Joint ventures:
Aggregate amount of the following items
calculated based on shareholding percentage
Associates:
Aggregate carrying value of investments: 139,767,215.41 143,121,019.78
Aggregate amount of the following items
calculated based on shareholding percentage
--Net profit -3,353,804.37 -7,515,648.15
--Total comprehensive income -3,353,804.37 -7,515,648.15
X. Risks associated with financial instruments
The Company’s objectives of risk management are to maintain a balance between risk and income, minimize the negative effect of
risks on the operating results of the Company and maximize the interests of the shareholders and other equity investors. On the basis
of such objectives of risk management, the Company’s basic risk management policy is designed to identify and analyze all kinds of
risks facing the Company, set appropriate risk thresholds in risk management, and monitor risks and adherence to limits in a timely and
reliable manner.
The Company faces a variety of risks associated with financial instruments in its daily activities, mainly including credit risk, liquidit y
risk and market risk. Below is a summary of the policies for managing such risks considered and approved by the management.
(I) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss to the other party by failing to discharge an
obligation.
1. Credit risk management practice
(1) Assessment of credit risk
At each balance sheet date, the Company assesses whether the credit risk of a financial instrument has increased significantly since
initial recognition. In 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. The Company determines the changes
in default risk of financial instruments during their estimated lifetime through comparison of the default risk at the balance sheet date
and the initial recognition date, on an individual or collective basis.
The Company determines that the credit risk of a financial instrument has increased significantly when one or more of the following
qualitative and quantitative standards are met:
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
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; and/or
2) Qualitative standard, mainly relates to significant adverse changes in the debtor ’s business situation or financial position, and present
or expected changes in technology, market, economy or legal environment that will have a material adverse effect on the debtor ’s
ability to repay.
(2) Definition of default and credit-impaired assets
A financial instrument is in default or credit impaired when one or more of the following conditions are met:
1) significant financial difficulty of the debtor;
2) any breach by the debtor of contract terms binding on it;
3) it becoming probable that the debtor will enter bankruptcy or other financial reorganization;
4) the creditors of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty, having granted to the
debtor a concession that the creditors would not otherwise consider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit losses include the probability of default, loss rate of default, and exposure to
default risk. The Company has developed 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. See Notes V(I)3, V(I)4, V(I)7 and V(I)10 for the conciliation table of opening balances and closing balances of allowance for
impairment loss on financial instruments.
4. Credit risk exposure and credit risk concentration
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 monetary capital in financial institutions with relatively high credit ratings, so its
credit risk is relatively low.
(2) Accounts receivable
The Company performs credit assessment on customers using credit settlement on an ongoing basis. The Company selects approved
and creditworthy customers based on the result of credit assessment, and monitors the balance of accounts receivable from them on an
ongoing basis, to avoid significant risk of doubtful accounts.
As the Company only deals with approved and creditworthy third parties, no collateral is required. As at December 31, 2022, the
Company faced certain credit concentration risk. In particular, 52.73% (which was 50.05% as at December 31, 2021) of the Company’s
accounts receivable came from the top 5 customers, without any collateral or other credit enhancement.
The Company’s maximum exposure to credit risk is the carrying value of each financial asset on the balance sheet.
(II) Liquidity risk
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Liquidity risk is the risk that the Company may not have enough cash to satisfy its obligation to deliver cash or other financial assets,
due to inability to liquidate financial assets at fair value in a timely manner, or failure of counterparties to discharge their contract
liabilities, acceleration of debts, failure to generate expected cash flows, or otherwise.
In order to control such risk, the Company utilizes a variety of financing tools such as settlement by means of notes, bank loans, etc.,
combines long-term and short-term financing to optimize financing structure, and maintains a balance between financing sustainabilit y
and flexibility. The Company has obtained lines of credit from many commercial banks to satisfy its working capital requirements and
capital expenditures.
Financial liabilities classified by remaining maturity
In RMB
December 31, 2022
Item Undiscounted
Carrying value Within 1 year 1-3 years Over 3 years
contract amount
Bank loans (including non-current
12,518,035,282.87 12,622,983,732.45 9,154,149,516.56 2,953,900,674.22 514,933,541.67
liabilities due within one year)
Financial liabilities held for trading 91,517,116.89 91,517,116.89 91,517,116.89
Notes payable 2,008,405,860.19 2,008,405,860.19 2,008,405,860.19
Accounts payable 5,986,286,590.32 5,986,286,590.32 5,986,286,590.32
Other payables 54,324,601.72 54,324,601.72 54,324,601.72
Lease liabilities (including non-current
1,671,260,217.63 2,187,054,071.55 24,396,526.02 303,388,335.26 1,859,269,210.27
liabilities due within one year)
Subtotal 22,329,829,669.62 22,950,571,973.12 17,319,080,211.70 3,257,289,009.48 2,374,202,751.94
(Continued)
December 31, 2021
Item Undiscounted
Carrying value Within 1 year 1-3 years Over 3 years
contract amount
Bank loans (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
liabilities due within one year)
1,646,644,107.17 1,646,644,107.17 1,646,644,107.17
Financial liabilities held for trading
6,729,890,126.00 6,729,890,126.00 6,729,890,126.00
Notes payable
323,166,075.34 323,166,075.34 323,166,075.34
Accounts payable
Other payables 113,585,341.88 117,815,283.97 38,648,899.77 79,166,384.20
Long-term payables (including non- 1,216,840,546.75 1,547,455,035.50 70,417,680.05 140,536,827.11 1,336,500,528.34
current liabilities due within one year)
Lease liabilities (including non-current 21,494,677,110.10 22,101,380,309.72 18,454,994,179.06 2,205,626,685.66 1,440,759,445.00
liabilities due within one year)
11,464,550,912.96 11,736,409,681.74 9,646,227,290.73 1,985,923,474.35 104,258,916.66
Subtotal
(III) Market Risk
Market risk is the risk of fluctuation in the fair value or future cash flows of financial instruments due to changes in market prices.
Market risk mainly includes interest risk and foreign exchange risk.
1. Interest risk
Interest risk is the risk of fluctuation in the fair value or future cash flows of financial instruments due to changes in market interest
rates. Interest-bearing financial instruments with fixed interest rates expose the Company to fair value interest rate risk, while interest-
bearing financial instruments with floating interest rates expose the Company to cash flow interest rate risk. The Company determines
the proportion of fixed-rate financial instruments and floating-rate financial instruments based on the market environment, and reviews
and monitors the appropriateness of its portfolio of financial instruments on a regular basis. The cash flow interest rate risk that the
Company faces is primarily associated with the floating-rate bank loans owed by the Company, which amounted to RMB735.9 million
as at December 31, 2022 (which was RMB11449693630.87 as at December 31, 2021). Supposing the interest rate changes by 50
basic points while other variables remain unchanged, the Company’s total profit and shareholders’ interest will not be materially
affected.
136
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
2. Foreign exchange risk
Foreign exchange risk is the risk of fluctuation in the fair value or future cash flows of financial instrument due to changes in exchange
rates. The Company’s foreign exchange risk relates mainly to foreign currency denominated monetary assets and liabilities. When a
short-term imbalance occurred on foreign currency denominated assets and liabilities, the Company may trade foreign currencies at
market exchange rates when necessary, in order to maintain the net risk exposure at an acceptable level.
See Note V(V)2 for details of foreign currency denominated monetary assets and liabilities at December 31, 2022.
XI. Fair Value Disclosures
1. Closing balance of the fair value of assets and liabilities measured at fair value
In RMB
Closing balance of fair value
Item 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
519,004,656.27 56,779,147.66 575,783,803.93
through profit or loss
(2) Investment in equity
56,779,147.66 56,779,147.66
instruments
(4) Bank wealth management
519,004,656.27 519,004,656.27
products
(II) Other debt investments 644,057,382.41 644,057,382.41
(III) Investment in other equity
171,322,110.00 171,322,110.00
instruments
Total assets measured at fair
519,004,656.27 872,158,640.07 1,391,163,296.34
value on a recurring basis
(VI) Financial liabilities held for
91,517,116.89 91,517,116.89
trading
Total liabilities measured at fair
91,517,116.89 91,517,116.89
value on a recurring basis
II. Fair value measurement on a
-- -- -- --
non-recurring basis
2. Valuation techniques and qualitative and quantitative information of important inputs for items subject
to recurring and non-recurring fair value measurements at Level 2
1. The closing balance of the fair value of bank wealth management products was determined mainly based on their principal and
expected income.
2. The fair value of forward exchange settlement and sale transactions already authorized but not yet settled was determined based on
the forward exchange rates as confirmed with the transaction bank at the end of the reporting period.
3. Valuation techniques and qualitative and quantitative information of important inputs for items subject
to recurring and non-recurring fair value measurements at Level 3
1. The fair value of an investment in other equity instruments was determined based on the initial investment amount.
2. The fair value of a note receivable was determined based on its face amount.
3. The fair value of an investment in equity instruments was determined based on the initial investment amount.
XII. Related Parties and Related-Party Transactions
1. Parent of the 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 total shares and votes of the Company respectively, and 28.28% of the total shares and votes of the Company in aggregate.
137
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
2. Subsidiaries of the Company
The particulars of the subsidiaries of the Company are set forth in “Interests in Other Entities”.
3. Joint ventures and associates of the Company
The particulars of the joint ventures and associates of the Company are set forth in “Interests in Other Entities”.
Other joint ventures or associates that have carried out related-party transactions with the Company in the current period or in the
previous periods with balances recorded in the current period:
Name of joint venture or associate Relationship with the Company
Suzhou Toprun Electric Equipment Co., Ltd. Associate
Suzhou Dongcan Optoelectronics Technology Co., Ltd. Associate
4. Other related parties
Name of other related party Relationship with the Company
Hai Dixin Semiconductor (Nantong) Co., Ltd. Investee
Anhui Landun Photoelectron Co., Ltd. A company controlled by the actual controllers of the Company
5. Related-party transactions
(1) Related-party commodity and service transactions
Purchase of goods and receipt of services from related parties
In RMB
Transaction Whether or not
Related party Subject matter 2022 quota exceed the 2021
approved transaction quota?
Suzhou Toprun Electric Equipment
Purchase of goods 3,097.35 No
Co., Ltd.
Suzhou Dongcan Optoelectronics
Purchase of goods 204,576.69 No 49,297.45
Technology Co., Ltd.
Sale of goods and rendering of services to related parties
In RMB
Related party Subject matter 2022 2021
Suzhou Toprun Electric Equipment Co., Ltd. Sale of goods 131,783.22 1,580,509.87
Suzhou Dongcan Optoelectronics Technology Co., Ltd. Sale of goods 18,297.73 109,532.95
Suzhou Dongcan Optoelectronics Technology Co., Ltd. Rendering of services 97,261.61
Anhui Landun Photoelectron Co., Ltd. Rendering of services 485,700.00
(2) Related-party guarantees
The Company as guarantor:
In RMB
Whether the obligation
Effective date of Expiry date of
Obligor Amount guaranteed guaranteed has been
guarantee guarantee
discharged
3,000,000.00 April 30, 2022 April 30, 2023 No
Suzhou Toprun 5,400,000.00 August 21, 2022 August 21, 2023 No
Electric Equipment
Co., Ltd. 6,600,000.00 August 25, 2022 August 25, 2023 No
4,000,000.00 November 10, 2022 November 10, 2023 No
The Company as obligor:
In RMB
Effective date of Expiry date of Whether the obligation
Guarantor Amount guaranteed
guarantee guarantee guaranteed has been
138
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
discharged
YUAN Yonggang and
500,000,000.00 March 22, 2018 August 28, 2024 No
YUAN Yongfeng
(3) Remunerations of key officers
In RMB
Item 2022 2021
Remunerations of key officers 23,629,500.00 22,533,200.00
6. Amounts receivable from/payable to related parties
(1) Amounts receivable from related parties
In RMB
Closing balance Opening balance
Item Related party Allowance for Allowance for
Book balance Book balance
doubtful accounts doubtful accounts
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
95,094.62 1,972.32 63,031.33 315.16
receivable Technology Co., Ltd.
Accounts Suzhou Toprun Electric
1,032,857.12 181,059.83 1,485,976.17 7,429.88
receivable Equipment Co., Ltd.
Other Hai Dixin Semiconductor
1,790,748.55 1,790,748.55 1,790,748.55 1,438,405.10
receivables (Nantong) Co., Ltd.
Other Suzhou Dongcan Optoelectronics
20,000.00 1,000.00
receivables Technology Co., Ltd.
(2) Amounts payable to related parties
In RMB
Item Related party Closing balance Opening balance
Suzhou Dongcan Optoelectronics
Accounts payable 45,359.67 3,499.61
Technology Co., Ltd.
XIII. Share-based Payments
1. Summary of share-based payments
Applicable □ N/A
In RMB
Total amount of equity instruments granted in the current period 1,366,120.00
Total amount of equity instruments exercised in the current period 1,366,120.00
Total amount of equity instruments expired in the current period 0.00
Other information:
Pursuant to the 2022 stock ownership plan for key officers and technical personnel (the “ESOP”) approved at the 19th meeting of the
5th Board of Directors, the 13th meeting of the 5th Board of Supervisors and the first extraordinary general meeting in 2022, the shares
will be granted to up to 350 key officers and technical personnel of the Company and its subsidiaries, while the directors, supervisors,
senior officers, holders of more than 5% shares and actual controllers of the Company will not participate in the ESOP.
2. Equity-settled share-based payments
Applicable □ N/A
In RMB
Method of determining the fair value of equity instruments at the
Closing price of the Company’s stock at the grant date
grant date
Basis for determining the number of exercisable equity
Number actually exercised in the current period
instruments
Accumulated amount of equity-settled share-based payments
16,734,915.50
recorded in capital reserve
Total amount of equity-settled share-based payments recognized
16,734,915.50
in expenses in the current period
139
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
XIV. Commitments and Contingencies
1. Significant commitments
Significant commitments as at the balance sheet date
As at the balance sheet date, the Company did not have any significant commitment that need to be disclosed.
2. Contingencies
(1) Significant contingencies as of the balance sheet date
As at the balance sheet date, the Company did not have any contingency that need to be disclosed.
(2) Whether the Company does not have any significant contingency that need to be disclosed?
The Company does not have any significant contingency that need to be disclosed.
XV. Subsequent Events
1. Profit distribution
In RMB
Profits or dividends to be distributed 187,315,150.99
Profit or dividend distribution that has been approved and declared 187,315,150.99
2. Other subsequent events
On October 27, 2022, the 28th meeting of the 5th Board of Directors considered and approved the Proposal Regarding the Progress of
Acquisition of 100% Shares of Suzhou JDI Electronics Inc., pursuant to which, the Company intends to acquire 100% Shares of Suzhou
JDI Electronics Inc. held by JDI at the price of JPY20.5 billion (equivalent to RMB1 billion, as calculated according to the JPY/RMB
exchange rate published by the People’s Bank of China at the date of announcement), as adjusted for any dividends, effects of profit
or loss or other changes in equity that may occur before the reference date, i.e. November 30, 2022 (the final transaction price would
be determined based on the audit conducted on the reference date) (the “Transaction”). As of January 19, 2023, the Company has paid
to JDI the total consideration (except 15% of the total basic consideration), JDI has delivered the relevant proofs of closing to the
Company, the share purchase has been consummated, and Suzhou JDI Electronics Inc. has become a wholly owned subsidiary of the
Company.
XVI. Other Significant Information
1. Segment information
(1) Determination basis and accounting policies for reporting segments
The Company is primarily engaged in the sale of PCBs, LED display devices, touch panels and LCMs, precision components and other
products, which are managed and assessed as a whole, so the Company does not need to disclose segment information.
(2) Financial information of reporting segments
In RMB
LED display Touch panels and Precision Offset among
Item PCB Total
devices LCMs components segments
Revenue of main
21,819,200,095.46 1,682,433,257.88 3,402,832,979.40 4,546,354,818.19 31,450,821,150.93
business
Costs of main
17,235,837,938.13 1,534,248,833.74 3,358,366,909.38 3,832,885,018.62 25,961,338,699.87
business
2. Others
1. The Company as lessee
(1) See Note V(I)16 for details of right-of-use assets.
140
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
(2) See Note III(XXVIII) for the Company’s accounting policy regarding short-term leases. The table below summarizes the payments
for short-term leases recognized in profit or loss:
Item 2022 (RMB) 2021 (RMB)
Payments for short-term leases 18.926.906.73 12,662,311.00
Total 18.926.906.73 12,662,311.00
(3) Profit or loss and cash flows related to leases:
Item 2022 (RMB) 2021 (RMB)
Interest expenses related to lease
75,984,905.99 69,800,646.24
liabilities
Total cash outflows related to leases 264,518,782.83 294,740,773.04
(4) See Note VIII(II) for an analysis of the remaining maturity of lease liabilities and related liquidity risk management.
2. The Company as lessor
Operating lease
(1) Lease income
Item 2022 (RMB) 2021 (RMB)
Lease income 2,758,058.01 4,253,653.65
(2) Assets held under finance leases
Item December 31, 2022 (RMB) December 31, 2021 (RMB)
Fixed assets 25,725.92
Investment properties 1,296,551.42 1,554,262.58
Subtotal 1,296,551.42 1,579,988.50
See Note V(I)14 for details of fixed assets leased out under finance leases.
(3) Undiscounted lease payments receivable under non-cancellable leases entered into with the lessees:
Remaining term December 31, 2022 (RMB) December 31, 2021 (RMB)
Within one year 982,800.00 4,497,481.58
1-2 years 935,664.81
Total 982,800.00 5,433,146.39
XVII. Notes to Key Items of the Standalone Financial Statements
1. Accounts receivable
(1) Accounts receivable by category
In RMB
Closing balance Opening balance
Allowance for doubtful Allowance for doubtful
Category Book balance Carrying Book balance Carrying
accounts accounts
Amount % Amount % value Amount % Amount % value
Allowance
11,014,4 11,014,43 13,584,08 13,584,08
recognized 0.54% 100.00% 0.47% 100.00%
31.64 1.64 1.38 1.38
individually
Incl.:
Allowance
2,029,41 88,306,91 1,941,106, 2,846,995, 95,868,99 2,751,126,
recognized 99.46% 4.35% 99.53% 3.37%
3,258.12 9.25 338.87 763.39 1.28 772.11
collectively
Incl.
2,040,42 99,321,35 1,941,106, 2,860,579, 109,453,0 2,751,126,
Total 100.00% 4.87% 100.00% 3.83%
7,689.76 0.89 338.87 844.77 72.66 772.11
Allowance for doubtful accounts recognized individually:
In RMB
141
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Closing balance
Name Allowance for doubtful
Book balance % Reason
accounts
Dongguan Xindong Intelligent
3,787,969.53 3,787,969.53 100.00% According to the
Technology Co., Ltd.
Jiangyin Hanwei Aluminum forecast of collection,
2,425,312.67 2,425,312.67 100.00% the account is less
Co., Ltd.
likely to be collected,
Huizhou Chuangshi Industrial
1,216,968.00 1,216,968.00 100.00% so an impairment loss
Co., Ltd.
was recognized.
Others 3,584,181.44 3,584,181.44 100.00%
Total 11,014,431.64 11,014,431.64
Allowance for doubtful accounts recognized collectively:
In RMB
Closing balance
Name Allowance for doubtful
Book balance %
accounts
Group of related parties within
900,953,382.92
the scope of consolidation
Group of age 1,128,459,875.20 88,306,919.25 7.83%
Total 2,029,413,258.12 88,306,919.25
Explanation about the basis for grouping: None.
If the allowance for doubtful accounts is recognized for notes receivable in accordance with the general model of expected credit losses,
please disclose the relevant information by reference to the disclosure of the allowance for doubtful accounts in respect of other
receivables:
□ Applicable N/A
Accounts receivable by age:
In RMB
Age Book balance
Within 1 year (inclusive) 1,687,314,119.76
Within 6 months 1,391,027,273.41
7-12 months 296,286,846.35
1-2 years 42,046,884.05
2-3 years 46,005,127.05
Over 3 years 265,061,558.90
3-4 years 230,459,611.43
4-5 years 15,304,313.92
Over 5 years 19,297,633.55
Total 2,040,427,689.76
(2) Allowance for doubtful accounts recognized, recovered or reversed in the current period
Allowance for doubtful accounts recognized in the current period:
In RMB
Changes in the current period
Opening
Item Recovered or Closing balance
balance Recognized Written off Others
reversed
Allowance recognized
13,584,081.38 3,430,933.59 6,000,583.33 11,014,431.64
individually
Allowance recognized
95,868,991.28 16,841,818.87 24,403,890.90 88,306,919.25
collectively
Total 109,453,072.66 20,272,752.46 6,000,583.33 24,403,890.90 99,321,350.89
(3) Top 5 debtors in terms of closing balance of accounts receivable
In RMB
Closing balance of % of total closing balance of Closing balance of allowance
Company name
accounts receivable accounts receivable for doubtful accounts
Dongguan Dongshan Precision 404,119,464.30 19.81%
142
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Manufacturing Co., Ltd.
Mutto Optronics 178,785,220.43 8.76%
MFLEX Yancheng 186,294,791.48 9.13%
Debtor 4 143,509,868.11 7.03% 717,549.34
Yancheng Mutto Optronics
96,588,732.62 4.73%
Science and Technology Co., Ltd.
Total 1,009,298,076.94 49.46%
2. Other receivables
In RMB
Item Closing balance Opening balance
Dividends receivable 1,210,095,256.90 581,000,000.00
Other receivables 2,035,435,690.22 2,827,234,419.21
Total 3,245,530,947.12 3,408,234,419.21
(1) Dividends receivable
1) Dividends receivable by category
In RMB
Item (or investee) Closing balance Opening balance
Hong Kong Dongshan Holding Limited 944,095,256.90 315,000,000.00
Yancheng Dongshan 266,000,000.00 266,000,000.00
Total 1,210,095,256.90 581,000,000.00
2) Significant dividends receivable aged over one year
In RMB
Whether or not
Item (or investee) Closing balance Age Reason of failure to collect impaired and basis for
determination
To support the development
Hong Kong Dongshan Holding Limited 344,095,256.90 1-2 years
of the subsidiary
To support the development
Yancheng Dongshan 266,000,000.00 1-2 years
of the subsidiary
Total 610,095,256.90
(2) Other receivables
1) Other receivables by nature
In RMB
Nature of account Closing balance Opening balance
Current accounts 2,021,455,028.32 2,811,870,279.40
Security deposit 8,626,398.25 2,852,298.50
Performance compensation 7,000,000.00
Loans and reserve fund 7,191,382.15 7,083,613.68
Total 2,037,272,808.72 2,828,806,191.58
2) Allowance for doubtful accounts
In RMB
Stage 1 Stage 2 Stage 3
Allowance for doubtful Lifetime expected Lifetime expected
12-month expected Total
accounts credit loss (not credit credit loss (credit
credit loss
impaired) impaired)
Balance at January 1,
413,792.74 818,644.63 339,335.00 1,571,772.37
2022
In the current period:
- Transferred to stage 2 -101,236.18 101,236.18
- Transferred to stage 3 -161,725.84 161,725.84
Recognized 284,800.35 -555,682.60 536,228.38 265,346.13
Balance at December
597,356.91 202,472.37 1,037,289.22 1,837,118.50
31, 2022
Significant changes in the carrying amount of allowance for doubtful accounts in the current period:
143
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
□ Applicable N/A
Other receivables by age:
In RMB
Age Book balance
Within 1 year 1,811,580,254.07
1-2 years 209,574,243.72
2-3 years 8,539,126.50
Over 3 years 7,579,184.43
3-4 years 39,000.00
4-5 years 189,660.00
Over 5 years 7,350,524.43
Total 2,037,272,808.72
3) Top 5 debtors in terms of closing balance of other receivables
In RMB
% of total closing Closing balance of
Company name Nature of account Closing balance Age balance of other allowance for
receivables doubtful accounts
Yancheng
Current accounts 642,244,114.46 Within 1 year 31.52%
Dongshan
Suzhou Dongkui
Current accounts 308,786,242.13 Within 1 year 15.16%
Lighting Co., Ltd.
Hong Kong Current accounts 34,823,000.00 Within 1 year 1.71%
Dongshan Holding Current accounts 207,549,520.03 1-2 years 10.19%
MFLEX Yancheng Current accounts 215,662,000.00 Within 1 year 10.59%
Mutto Optronics Current accounts 198,058,742.37 Within 1 year 9.72%
Total 1,607,123,618.99 78.89%
3. Long-term equity investments
In RMB
Closing balance Opening balance
Item Allowance for Allowance for
Book balance Carrying value Book balance Carrying value
impairment loss impairment loss
Investments in
7,635,046,830.50 133,690,000.00 7,501,356,830.50 7,148,611,337.41 133,690,000.00 7,014,921,337.41
subsidiaries
Investments in
associates and 96,697,663.15 17,507,056.47 79,190,606.68 99,227,963.59 17,507,056.47 81,720,907.12
joint ventures
Total 7,731,744,493.65 151,197,056.47 7,580,547,437.18 7,247,839,301.00 151,197,056.47 7,096,642,244.53
(1) Investments in subsidiaries
In RMB
Opening Changes in the current period Closing balance
Closing balance
Investee balance Additional Reduced Allowance for of allowance for
Others (carrying value)
(carrying value) investment investment impairment loss impairment loss
Yongchuang
451,439,101.11 89,755.90 451,528,857.01
Tech
Suzhou Yuanshi
Electronic
5,000,000.00 5,000,000.00
Technology Co.,
Ltd.
Hong Kong 3,744,565,150.0 3,744,565,150.0
133,690,000.00
Dongshan 0 0
Suzhou
Dongkui
12,100,000.00 12,100,000.00
Lighting Co.,
Ltd.
Suzhou
Chengjia
Precision 80,000,000.00 68,355.10 80,068,355.10
Manufacturing
Co., Ltd.
Dongguan
Dongshan
342,000,000.00 342,000,000.00
Precision
Manufacturing
144
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Co., Ltd.
Suzhou
Dongjiyuan
Metal 52,600,000.00 52,600,000.00
Technology Co.,
Ltd.
Yancheng 1,092,500,000.0 1,092,500,000.0
Dongshan 0 0
RF Top
237,256,910.17 237,256,910.17
Electronic
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
452,677,880.00 452,677,880.00
Holding
Limited
Yancheng
Dongshan
Communication 279,978,200.13 279,978,200.13
Technology Co.,
Ltd.
Suzhou Dongbo
Precision
5,100,000.00 5,100,000.00
Manufacturing
Co., Ltd.
MFLEX
Shanghai Co., 2,000,000.00 2,000,000.00
Ltd.
Shenzhen
Qindao
Dongchuang
100,000,000.00 100,000,000.00
Investment
Partnership
(L.P.)
Suzhou Dongke
Real Estate Co., 150,389,096.00 2,000,000.00 152,389,096.00
Ltd.
Yancheng
Dongshan
Business 3,000,000.00 42,042.00 3,042,042.00
Management
Co., Ltd.
Hainan
Chengjia
Technology 1,000,000.00 3,090,724.00 4,090,724.00
Consulting Co.,
Ltd.
Multek China 44,577.80 44,577.80
Shanghai
Dongxin New
Energy 20,000,000.00 20,000,000.00
Technology
Co., Ltd.
MFLEX
Shanghai Co., 23,777.30 23,777.30
Ltd.
RF Top
135,478,107.29 135,478,107.29
Electronic
Suzhou
Dongyue New
Energy 165,000,000.00 165,000,000.00
Technology
Co., Ltd.
Mutto
571,953.00 571,953.00
Optronics
MFLEX
4,501,718.20 4,501,718.20
Suzhou
145
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Yancheng
Dongchuang
Precision 150,000,000.00 150,000,000.00
Manufacturing
Co., Ltd.
Yancheng
699,757.00 699,757.00
Dongshan
Yancheng
Dongshan
Communication 264,502.30 264,502.30
Technology
Co., Ltd.
Yancheng
Mutto
Optronics 29,718.50 29,718.50
Technology
Co., Ltd.
MFLEX
2,806,806.40 2,806,806.40
Yancheng
Multek
1,536,469.20 1,536,469.20
Industries
Multek Zhuhai 187,229.10 187,229.10
7,014,921,337.4 7,501,356,830.5
Total 486,435,493.09 133,690,000.00
1 0
(2) Investments in associates and joint ventures
In RMB
Changes in the current period
Adju
stme
Opening Declared
nt to Closing balance
balance Addit Investment cash Allowanc Closing balance
Investee Reduced other Other of allowance for
(carrying ional income or loss dividends e for Oth (carrying value)
investmen comp changes in impairment loss
value) inves under equity or profit impairme ers
t rehen equity
tment method distributio nt loss
sive
n
inco
me
I. Joint ventures
II. Associates
Suzhou
Toprun
Electric 16,319,738.95 227,839.46 16,547,578.41
Equipmen
t Co., Ltd.
Shenzhen
Nanfang
Blog
Technolog
y
Developm
ent Co.,
Ltd.
Shanghai
Fu Shan
Precision
17,507,056.47
Manufact
uring Co.,
Ltd.
Suzhou
LEGAT E
Intelligent 11,932,911.79 106,212.49 12,039,124.28
Equipmen
t Co., Ltd.
Suzhou
Dongcan
Optoelectr
3,716,150.29 34,482.66 3,750,632.95
onics
Technolog
y Co., Ltd.
Jiangsu
Nangao
Intelligent
Equipmen
4,020,556.59 112,738.89 4,133,295.48
t
Innovatio
n Center
Co., Ltd.
Jiaozuo
Songyang
Optoelectr
30,748,059.62 -2,549,668.86 28,198,390.76
ic
Technolog
y Co., Ltd.
Suzhou
14,983,489.88 -461,905.08 14,521,584.80
Yongxin
146
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
Jingshang
Venture
Capital
Partnershi
p (L.P.)
Subtotal 81,720,907.12 -2,530,300.44 79,190,606.68 17,507,056.47
T otal 81,720,907.12 -2,530,300.44 79,190,606.68 17,507,056.47
4. Operating revenue and operating costs
In RMB
2022 2021
Item
Income Cost Income Cost
Main business 3,614,088,084.88 3,328,227,008.90 3,936,953,911.43 3,714,657,158.64
Other business 263,824,966.79 150,341,977.65 307,120,828.99 168,578,617.68
Total 3,877,913,051.67 3,478,568,986.55 4,244,074,740.42 3,883,235,776.32
5. Investment income
In RMB
Item 2022 2021
Income from long-term equity investments under
600,121,362.64 581,083,436.82
cost method
Income from long-term equity investments under
-2,530,300.44 -7,099,445.94
equity method
Investment income from disposal of long-term
-13,500,000.00
equity investments
Discount loss on accounts receivable financing -7,880,660.00
Income from bank wealth management products 169,744.17 2,212,924.44
Total 589,880,146.37 562,696,915.32
XVIII. Supplementary Information
1. Statement of non-recurring gain or loss for the current period
Applicable □ N/A
In RMB
Item Amount Remark
Gain or loss from disposal of non-current assets -14,220,918.02
Government grants recognized in profit or loss (excluding government grants that
are closely related to the business of the Company and are provided in fixed amount 317,926,133.80
or quantity continuously according to the applicable polices of the country)
Gain or loss on entrusted investment or asset management 10,408,683.62
Gain or loss on changes in fair value of financial assets held for trading and
financial liabilities held for trading, and gain on disposal of financial assets held
-63,657,229.48
for trading, financial liabilities held for trading and available-for-sale financial
assets, except for effective hedges held in the ordinary course of business
Reversal of allowance for impairment loss on accounts receivable assessed
9,500,583.33
individually
Other non-operating revenues and expenses not listed above 3,073,832.45
Other gains or losses within the meaning of extraordinary gain or loss 956,961.84
Less: Effect on income tax 21,900,816.79
Effect on minority interests 322,123.55
Total 241,765,107.20 --
Other items of gain or loss within the meaning of non-recurring gain or loss:
□ Applicable N/A
The Company does not have any other item of gain or loss within the meaning of non-recurring gain or loss.
Classification of any item of non-recurring gain or loss defined by the Explanatory Announcement No. 1 on Information Disclosure
for Companies Publicly Offering Securities - Non-recurring gain or Loss as recurring profit or loss:
□ Applicable N/A
147
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2022
2. Return on net assets and earnings per share
Weighted average Earnings per share
Profit for the reporting period return on net Basic earnings per share Diluted earnings per share
assets (RMB/share) (RMB/share)
Net profit attributable to ordinary
15.33% 1.39 1.39
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after 13.76% 1.25 1.25
deduction of non-recurring gain or loss
Suzhou Dongshan Precision Manufacturing Co., Ltd.
Legal representative: YUAN Yonggang
April 19, 2023
148
