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巨星科技:2021年年度报告(英文版)2022-06-18  

                                             Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
                     Report




Hangzhou Great Star Industrial Co., Ltd

       The Annual Report for 2021

                 2022-012




               April, 2022




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                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
                           Report




Geelong Thailand Base




Vietnam New BaseSouth Cambridge




 Guangdong Zhongshan Geelong
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




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                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




  Section I     Important Notes, Table of Contents and Interpretation


    The Board of Directors, the Board of Supervisors, and the Directors,

Supervisors, and senior management of the Company guarantee the truthfulness,

accuracy, and completeness of the contents of the annual report, and that there

are no false records, misleading statements, or material omissions, and assume

individual and joint legal responsibility.

    Qiu Jianping, the person in charge of the company, Ni Shuyi, the person in

charge of accounting work, and Ni Shuyi, the person in charge of the accounting

institution (accounting officer in charge), declare that they guarantee the

truthfulness, accuracy, and completeness of the financial report in this annual

report.

    All directors have attended the board meeting at which this report was

considered.

    This annual report involves forward-looking statements such as future

plans, which do not constitute material commitments by the Company to

investors. Investors and related parties should maintain sufficient risk

awareness in this regard and should understand the differences between plans,

forecasts, and commitments.

    The Company plans not to pay cash dividends, not to grant bonus shares,

and not to increase its share capital by transferring its provident fund.


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                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




                                                 Table of Contents




Section I       Important Notes, Table of Contents and Interpretation ............................................. 5

Section II Company Profile and Key Financial Indicators ............................................................ 9

Section IIIDiscussion and Analysis by Management .................................................................... 14

Section IV Corporate Governance ................................................................................................. 75

Section V. Environmental and Social Responsibility .................................................................. 101

Section VI Important Matters ...................................................................................................... 103

Section VII. Changes in Shares and Shareholders ...................................................................... 121

Section VIII Preferred Stock Related Information ..................................................................... 130

Section IX Bond Related information .......................................................................................... 131

Section XFinancial Reports ........................................................................................................... 132




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                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




                                     Catalog of Available Documents


I. Financial statements containing the signatures and seals of the person in charge of the company, the person in charge of accounting
work, and the person in charge of the accounting institution.
II. The original audit report containing the seal of the accounting firm and the signature and seal of the certified public accountant.
III. Original copies of all company documents and announcements that have been publicly disclosed in the newspapers designated by
the CSRC during the reporting period.




                                                                                   Hangzhou Great Star IndustrialCo., Ltd
                                                                                                  Chairman: Qiu Jianping
                                                                                                                April 11,2022




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                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




                                               Paraphrase


                   Items                Refers to                                Meaning

Reporting Period                        Refers to   January 1,2021 – December 31, 2021

Company, Our Company, Listed Company,
                                        Refers to   Hangzhou GreatStar Industrial Co.,Ltd
GreatStar

Sheffield, Sheffield Tools              Refers to   Hangzhou GreatStar Sheffield Tools Co., Ltd.

Sheffield                               Refers to   Hangzhou GreatStar Sheffield Trading Co.,Ltd

Guozhi Robotics                         Refers to   Zhejiang Guozhi Robotic Co., Ltd

Arrow                                   Refers to   Arrow Fastener Co., LLC

Huada Kejie                             Refers to   Changzhou Huada Kejie Opto-Electro Instrument Co., Ltd.

OLE-SYSTEMS                             Refers to   Hangzhou OLE-SYSTEMS CO., LTD Co., Ltd

Donghai Bank                            Refers to   Ningbo Donghai Bank Co., Ltd

Weiming Investment                      Refers to   Hangzhou Weiming Investment Management Co., Ltd

PT Company                              Refers to   PRIM'TOOLS LIMITED

GreatStar Group                         Refers to   GreatStar Holdings Group Co., Ltd

Lista                                   Refers to   Lista Holding AG

Prime-Line                              Refers to   Prime-Line Products, LLC

United Machinery                        Refers to   Hangzhou United Machinery Co., Ltd

Haining Intelligent Company             Refers to   Haining GreatStar Intelligent Equipment Co., LTD

Zhongce Haichao                         Refers to   Hangzhou Zhongce Haichao Enterprise Management Co., Ltd

Hangcha Group                           Refers to   Hangcha Group Co.,Ltd

                                                    Hangzhou Haichao Enterprise Management Partnership(Limited
Hangzhou Haichao                        Refers to
                                                    Partnership)

GreatStar Europe                        Refers to   GreatStar Europe AG

JFB AG, BeA                             Refers to   Joh. Friedrich Behrens AG

Geelong                                 Refers to   Geelong Holdings Limited




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                                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




             Section IICompany Profile and Key Financial Indicators

I. Company Profile

Stock Abbreviation              GreatStar                              Stock Code                  002444

Stock Listing Stock Exchange The Shenzhen Stock Exchange

Chinese name of the Company 杭州巨星科技股份有限公司

Abbreviation of the company's
                                巨星科技
Chinese name

Foreign name of the Company
                                HANGZHOU GREATSTAR INDUSTRIAL CO., LTD
(if any)

Abbreviation of the company's
                                GreatStar
foreign name (if any)

Legal representative of the
                                Qiu Jianping
company

Registered address              No. 35, Jiuhuan Road, Shangcheng District, Hangzhou

Postal code of the registered
                                310019
address

Historical change of the        Changed from No. 35, Jiuhuan Road, Jianggan District, Hangzhou to No. 35, Jiuhuan Road,
company's registered address    Shangcheng District, Hangzhou

Office address                  No. 35, Jiuhuan Road, Shangcheng District, Hangzhou

Postal code of office address   310019

Company website                 www.greatstartools.com

E-mail address                  zq@greatstartools.com


II. Contact Person and Contact Information

                                                     Secretary of the Board                Securities Affairs Representative

Name                                        Zhou Siyuan                               Lu Haidong

                                            No. 35, Jiuhuan Road, Shangcheng          No. 35, Jiuhuan Road, Shangcheng
Contact address
                                            District, Hangzhou                        District, Hangzhou

Phone number                                0571-81601076                             0571-81601076

Fax                                         0571-81601088                             0571-81601088

E-mail address                              zq@greatstartools.com                     zq@greatstartools.com




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                                                                     Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


III. Information Disclosure and Preparation Location

Website of the stock exchange where the company
                                                            http://www.szse.cn/
discloses its annual report

Name and website of the media where the company
                                                            Securities Times, Securities Daily, Juchao Info(http://www.cninfo.com.cn)
discloses its annual report

Place where the company's annual report is available        Company Board Office


IV. Registration Change

Organization code                             91330000731506099D

Changes in the main business of the
                                              No change
Company since its listing (if any)

Changes in controlling shareholders (if
                                              No change
any)


V. Other Relevant Information

Accounting firm hired by the company

Accounting firm name                   Pan-China Certified Public Accountants (Special General Partnership)

Accounting firm office address         Block B, China Resources Building, No. 1366 Qianjiang Road, Hangzhou, Zhejiang Province

Name of signing CPA                    Fei Fanghua, Li Qian

The sponsor engaged by the Company to perform continuous supervision duties during the reporting period
√ Applicable □ Not Applicable

                                     Office address of the sponsor
  Name of sponsor institution                                          Name of sponsor representative     Continuing sponsor period
                                              institution

                                  Room 2203, North Tower,
    CITIC Capital Securities      Shanghai Securities Building,                                         Completion of the issue to
                                                                      Fu Xinxiong, Li Huajun
            Co.,Ltd               No. 528 Pudong South Road,                                            December 31, 2021
                                  Pudong New Area, Shanghai

Financial advisors engaged by the Company to perform ongoing supervisory duties during the reporting period
□ Applicable √ Not Applicable


VI. Main Accounting Data and Financial Indicators

Whether the company is required to retroactively adjust or restate the accounting data of previous years
□ Yes   √ No

                                                                                             Year-on-year
                                             FY 2021                    FY 2020                                         FY 2019
                                                                                           increase/decrease

Operating income(yuan)                     10,919,683,344.37          8,544,440,154.30                  27.80%        6,625,464,121.34


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                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


Net profit attributable to
shareholders of the listed                  1,270,003,396.40         1,350,132,516.91                     -5.93%         895,030,139.78
company(yuan)

Net profit attributable to
shareholders of the listed company
                                            1,073,557,965.88         1,233,758,395.96                    -12.98%         820,214,354.48
after deducting non-recurring profit
or loss(yuan)

Net cash flow from operating
                                               18,632,169.67           771,150,625.24                    -97.58%         809,887,123.60
activities(yuan)

Basic earnings per share
                                                         1.13                     1.27                   -11.02%                     0.84
(yuan/share)

Diluted earnings per share
                                                         1.13                     1.25                    -9.60%                     0.84
(yuan/share)

Return on equity weighted
                                                      12.70%                   16.67%                     -3.97%                 12.54%
average(ROEWA)

                                                                                         Increase or decrease at
                                                                                         the end of the current
                                           End of 2021              End of 2020           year compared with           End of 2019
                                                                                         the end of the previous
                                                                                                  year

Total assets(yuan)                        17,307,154,886.67         13,677,779,045.68                    26.53%       11,132,498,783.42

Net assets attributable to
shareholders of listed companies          10,598,896,746.70          8,826,190,578.28                    20.08%        7,430,589,865.25
(yuan)

The lower of the Company's net profit before or after deduction of non-recurring profit or loss for the last three fiscal years is
negative, and the audit report for the latest year shows that there is uncertainty about the Company's ability to continue as a going
concern
□ Yes    √ No
The lower of net income before or after deducting non-recurring gains or losses is negative
□ Yes    √ No


VII. Differences in Accounting Data under Domestic and Foreign Accounting Standards

1. Differences in net profit and net assets in financial reports disclosed simultaneously under IAS and under
PRC GAAP

□ Applicable √ Not Applicable
There is no difference between the net profit and net assets of the company in the financial report disclosed in accordance with IAS
and in accordance with PRC GAAP for the reporting period.




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                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

2. Differences in net profit and net assets between financial reports disclosed in accordance with foreign
accounting standards and those disclosed in accordance with PRC GAAP at the same time

□ Applicable √ Not Applicable
There is no difference between the net profit and net assets of the company in the financial reports disclosed in accordance with
overseas accounting standards and in accordance with Chinese accounting standards in the reporting period.


VIII. Key Financial Indicators by Quarter

                                                                                                                             Unit: Yuan

                                            First quarter          Second quarter            Third quarter          Fourth quarter

Operating income                             1,980,467,449.72           2,469,386,160.66     3,230,013,552.58        3,239,816,181.41

Net profit attributable to
                                                256,735,674.36           471,372,916.18        422,651,002.42          119,243,803.44
shareholders of the listed company

Net profit attributable to
shareholders of the listed company
                                                225,880,981.89           354,966,464.92        415,931,007.91            76,779,511.16
after deducting non-recurring gains
and losses

Net cash flow from operating
                                                  -67,541,515.95         163,624,323.18       -414,057,204.07          336,606,566.51
activities

Whether the above financial indicators or their sums are materially different from the relevant financial indicators in the disclosed
quarterly and semi-annual reports of the Company
□ Yes       √No


IX. Items and Amounts of Non-recurring Gains and Losses

√ Applicable □ Not Applicable
                                                                                                                             Unit: Yuan

                     Item                          Amount of FY2021 Amount of FY2020 Amount of FY2019                    Note

Gains or losses on disposal of non-current
                                                        -4,813,678.28          -688,830.06       -2,121,302.12
assets

Government subsidies recognized in current
profit or loss (except those closely related to
the company's normal business operations,
which are in accordance with national                   43,080,948.70        30,007,164.80       72,827,246.21
policies and are continuously enjoyed in
accordance with certain standards in fixed or
quantitative amounts)

The cost of investments in subsidiaries,
associates and joint ventures acquired by an            82,984,773.90        53,341,459.79
enterprise is less than the gain arising from


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                                                                    Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

the fair value of the identifiable net assets of
the investee to which the enterprise is
entitled at the time the investment is
acquired

Gains or losses from entrusting others to
                                                       1,808,120.10           1,792,735.16          4,763,145.26
invest or manage assets

Gains or losses from changes in the fair
value of financial assets and liabilities held
for trading, and investment income from
disposal of financial assets and liabilities for
                                                      95,687,869.64         62,235,238.75          13,326,704.55
trading and available-for-sale financial
assets, except for effective hedging activities
related to the Company's normal business
operations

Non-operating income and expenses other
                                                         -127,210.71           -632,799.21           826,929.67
than those mentioned above

Other profit or loss items that meet the
                                                         502,892.56             267,035.13            28,040.91
definition of non-recurring profit or loss

Less: Income tax affected amount                      17,156,521.94         25,137,742.09          11,751,861.59

   Amount of minority interest affected                5,521,763.45           4,810,141.32          3,083,117.59

Total                                                196,445,430.52        116,374,120.95          74,815,785.30        --

Details of other profit and loss items that meet the definition of non-recurring profit or loss:
□ Applicable √ Not Applicable
The Company does not have other details of gain or loss items that meet the definition of non-recurring gain or loss.
Definition of non-recurring items of profit or loss listed in "Explanatory Announcement No. 1 on Disclosure of Information by
Companies Issuing Public Securities - Non-recurring Profit or Loss" as recurring items of profit or loss
□ Applicable √ Not Applicable
The Company does not have any items of non-recurring gains and losses listed in the "Explanatory Announcement No. 1 on
Disclosure of Information by Companies Issuing Public Securities - Non-recurring Gains and Losses" that are defined as items of
recurring gains and losses.




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                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




                Section IIIDiscussion and Analysis by Management

I. Situation of the industry in which the company operates during the reporting period

      The company is in the Tools & storage industry, and its main products include Hand Tools, Power Tools,
Laser Measurement, and Storage, which are mainly used in the fields of household home maintenance,
construction work, vehicle repair and maintenance, and map measurement and mapping. Among them, home
construction and its related repair and maintenance industry is the most important application channel, which also
accounts for the highest percentage.
      In North America and most parts of Europe, the large number of detached buildings and the large area per
capita have resulted in costly and time-consuming repair and maintenance of residential houses. Due to the
relatively high labor cost, residents in Europe and North America are more willing to carry out the repair and
maintenance of their houses and ancillary buildings by themselves, thus giving rise to the famous DIY culture in
Europe and America. At the same time, European and American families have a large number of cars, and the
daily repair and maintenance of cars, including the inspection and replacement of vehicle parts, is also an
important part of DIY in Europe and America. As one of the necessities for repair and maintenance, there is a
large demand for professional and DIY level tools in North America and Europe, thus making North America and
Europe the most important and largest market for the global tool industry.
      As the oldest industry, it can be said that the tool industry has developed with the birth of mankind, and has
been in the process of rising in size in recent centuries as the global population continues to grow. Thanks to the
characteristics of the product just demand and short replacement cycle, the industry growth rate is relatively stable,
even if encountered the financial crisis in 2008, the industry can still maintain positive growth after a short period
of volatility. During 2015-2019, the global tool market maintained a steady growth trend, with the market size
exceeding USD 80 billion. Since the onset of the COVID-19 in 2020, the global macroeconomy has been
significantly negatively impacted, with the European and North American economies experiencing a temporary
decline and the global tool market experiencing brief volatility; subsequently, the European and North American
economies were gradually recovered and the North American and European construction industries saw stronger
growth in 2021.In 2021, the global tools market benefited from the growth of the construction industry, and
industry demand was very strong, with growth reaching a new high in the past decade and exceeding $90 billion
in size for the first time. According to the Frost & Sullivan report, the global tools market is expected to maintain
an annual growth rate of around 5% in the next five years, driven by continued urbanization in emerging
economies and economic recovery in developed countries.

II. Main business of the Company during the reporting period

     During the reporting period, the company continued to develop its main business around the global tool
consumption field, continued to increase the market share of hand tools, rapidly developed the field of laser
measurement and tool cabinets, and strengthened the foundation of the power tool business development.
Investment in new product development continued to increase, and non-hand tool products became the key
direction of research and development.In terms of channels, in addition to continuing to maintain high
double-digit revenue growth in the North American and European cross-border e-commerce direct sales channel,
the company has also expanded its e-commerce direct sales channel targeting Southeast Asia and other regions;

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                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

meanwhile, with the normalization of the epidemic related to Europe and North America, the local retail
distribution channel has gradually recovered, which also brings new opportunities and challenges for the
company's business development.
      1. Hand Tools Business
      During the reporting period, the Company seized the strategic opportunities brought by the changes in the
global hand tool market demand and supply chain pattern, and continued to increase its market share with its
stable supply chain, R&D advantages and channel management capabilities. During the reporting period, the
number of new products independently developed by the Company reached a record high and gradually entered
more product categories. The competitive advantages of the company's products continued to be strengthened, and
the output value of independently developed new products achieved growth beyond expectations. Important
progress was also made in new customer development and new market expansion, and the acquisition of SK, a
high-end auto repair tool brand, was completed to strengthen the company's product and brand matrix.Although
the shipment volume of the Southeast Asia manufacturing base was far below expectations due to the repeated
impact of the epidemic, the company ensured stable business growth by transferring orders from Southeast Asia to
domestic shipments in a timely manner, while successfully completing the commissioning of the new base in
Thailand and the second phase of the base in Vietnam. As a strategic focus of the company, cross-border
e-commerce continued to maintain rapid growth and gradually went online the power tool product line, with
revenue scale exceeding USD 100 million for the first time. In FY 2021, the sales revenue of hand tool business
was RMB 6.553 billion,an increase of 14.52% year-on-year.
      2. Power Tools Business
      During the reporting period, the company gradually restored the vacuum cleaner business based on
shop-vac's original production capacity and utilized its own R&D and channel advantages, and acquired the
European power nail gun BEA business to increase the power tool product line, and utilized BEA's sales network
to strengthen the European sales network system and enhance the company's channel resources. For the online
market, the company innovated and developed a 20V lithium battery platform, gradually launched a full range of
power tool products, and achieved an important breakthrough in power tool online sales. The power tools business
achieved sales revenue of 1.021 billion yuan in FY 2021, an increase of 453.77% year-on-year.
      3. Laser Measurement Business
      During the reporting period, the company's laser measurement business, with several years of technology
accumulation, gained recognition from international giants and achieved rapid growth. The smooth delivery of the
company's new platform and new products for laser tools has enhanced the company's influence in the field of
laser tools in North America and laid the foundation for customer diversification and business increment.
Meanwhile, in response to the needs of the domestic market, the Laser Division actively adjusted its product
positioning, grasped the cost performance and steadily promoted the layout of the domestic market. Special laser
instruments such as LIDAR also successfully achieved mass production and use, laying the foundation for the
company's new future performance growth. In FY 2021, laser measurement instruments achieved sales revenue of
RMB889 million, an increase of 73.13% year-on-year.
      4. Storage Cabinet Business
      During the reporting period, the company's storage cabinet business market share increased significantly, the
original European Lista business recovered strongly, and orders in the U.S. market continued to grow; the
company completed the acquisition of 100% of the shares of Kilon in July, and through the active integration of
research and development, supply chain management and production capacity, etc., became the world's leading
manufacturer of storage cabinets. At the same time, the company actively researches and develops and expands its
storage cabinet products. In addition to the original cabinet products for garage workplace, the company also


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                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

actively enters into the cabinet products for indoor living scenarios and has made significant breakthroughs.In FY
2021, the storage cabinet business achieved sales revenue of RMB 2.371 billion, an increase of 152.36%
year-on-year.

III. Analysis of Core Competitiveness

     1. Innovation Advantages
     Innovation has always been the soul of the company's development. The company has a senior professional
tool research and development team, always committed to new product development and innovation, uphold the
concept of details determine success or failure, improve the functionality and added value of products to ensure
the long-term core competitiveness of the company. During the reporting period, the company invested RMB 310
million in R&D, designed 1,838 new products, and applied and obtained more than 300 new patents . The
company's central laboratory, as one of the earliest CNAS laboratories in the domestic hand tool industry, passed
the CNAS reassessment again during the reporting period. The company innovated and developed a number of
products including multi-functional pipe cutters, reversible 216-tooth ratchet wrenches and dual-position squeeze
guns and achieved good market feedback, winning several customer awards, including HOME DEPOT 2021
Annual Innovation Award and ProTool Innovation Award. During the reporting period, the company started the
large-scale innovation of power tools, especially lithium battery power tools, and successfully developed a large
number of cost-effective products and put them into cross-border e-commerce channels for trial production and
sales. Facing the economic fluctuations brought by the COVID-19 and the changes occurring in the global tool
industry, the company's innovation advantages ensure that the company can respond and grasp market
opportunities in a timely manner, continue to gain market share and maintain long-term stable development.




    2.Channel Advantages
    The company has sales channels and customer trust, which is the guarantee of the continuous development of

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                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

the giant star. The company's diversified product structure and continuous innovation ability not only can meet the
one-stop purchasing needs of channel customers to the greatest extent, but also continuously save the purchasing
cost and management cost of channel customers, and continuously improve the stickiness of channel customers.
The company has become one of the largest suppliers of Tools and Storage to many large supermarket chains such
as HOME DEPOT, WALMART, LOWES, Kingfisher, CTC, and so on, and is constantly expanding new product
categories. At present, there are more than 20,000 large hardware, building materials, auto parts and other
supermarket chains selling the company's various products at the same time, which effectively ensure the rapid
development of the company's various innovative products.During the reporting period, the company acquired the
channel resources of Joh. Friedrich Behrens AG in Europe through the acquisition of its relevant assets, enhancing
the company's warehouse and logistics distribution system throughout Europe and expanding its market
boundaries. These channels have effectively ensured the rapid development of the Company's various innovative
products. At the same time, the company continues to make efforts in the new sales channel of cross-border
e-commerce, which has become the most important sales channel for the GreatStar in addition to the traditional
large supermarket chains. As an effective supplement to traditional channels, this channel not only provides a new
market for the company to develop its own brand, but also allows the company to better exploit its advantages of
rapid innovation, forming a product development model with positive cycle of product development - online
validation - secondary development - offline pop-ups.
      3. Supply Chain Advantages
      After decades of development, the Company has established a global supply chain management system with
China as the core, and has established good cooperation with thousands of suppliers worldwide, ensuring that the
company can respond quickly to market demand and complete timely delivery of various large orders without
being limited to its own production capacity. Even in the face of the adverse impact of the COVID-19, as a global
tool industry leader with roots in China, the Company can still maintain a stable supply capacity thanks to China's
supply chain system, which is the most complete in the world in terms of basic categories, laying the foundation
for the company to continue to boost its market share. At the same time, the efficiency and flexibility brought by
China's large volume and ultra-detailed supply chain network also allows the company to centralize procurement
in China and distribute it globally, which greatly reduces the comprehensive procurement cost and enhances the
market competitiveness of the company's products. At present, the company has 21 manufacturing bases around
the world, which can fully meet various demands and cope with the complex external environment of each.
      4. Brand Advantages
      The company's main products are durable consumer goods for families and industrial-grade products for
professionals, while the brand is the most effective guarantee for the company to provide products and services to
consumers in the long term, so the company has long been committed to the creation and development of its own
brand. During the reporting period, the company continued to improve its own brand matrix and strengthen the
advantages of its own brands. Undertook the professional-grade power fastening tool brand BeA by acquiring the
related assets of Joh. Friedrich Behrens AG and completed the acquisition of high-end auto repair tool brand SK.
Own brands, especially e-commerce brands, continued to grow, with sales revenue of WORKPRO, PONY
JORGENSE, DURATECH, SWISSTECH and other brands increasing significantly year-on-year and sales
revenue of own brands reaching RMB 3.8 billion for the first time. Brand advantages not only further enhance the
international competitiveness of the company's products, but also effectively improve the company's gross profit
margin and business stability, providing assurance for the long-term healthy development of the company.




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                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




     5. International Advantages
     During the reporting period, the domestic and international economic situation was complicated. As a
company with international development layout, the company made full use of the manufacturing capacity and
sales market in different regions of the world to actively cope with the risks and look for opportunities.
     During the reporting period, the company continued to improve its global manufacturing division of labor.
Facing the background of the New Crown epidemic affecting the production capacity of the Southeast Asian
manufacturing base, the company actively promoted the production of the Southeast Asian manufacturing base as
soon as possible and transferred some orders to domestic production and delivery in a timely manner, fully
reflecting the advantages of the company's international layout and the flexibility of its production capacity. At the

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                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

same time, in the face of the stagnant international staff flow, the company actively takes advantage of the local
team in Europe and the United States to continue to provide customers with a perfect service system in the
vicinity, ensuring the mutual matching of orders and after-sales service. The internationalization advantage
effectively ensures that the company is able to compete with other international competitors by leveraging the
advantages of China's manufacturing clusters while taking advantage of manufacturing costs in Southeast Asia
and local channel services in the European and American markets, thereby building stronger core competitiveness.
The company is accelerating to become a global resource allocation company integrating local services in Europe
and America, manufacturing in Asian industry chain and management R&D in China.

IV. Main Business Analysis

1. Overview

      In 2021, the global economy produced many profound changes and continued turbulence against the
backdrop of the ongoing and repeated outbreak of COVID-19 continuing to increase its unprecedented impact on
the world and increasing international frictions, and the global tool market continued to see a number of changes
in the demand and supply chain landscape that favored the Company's long-term competitiveness, which mainly
include the following aspects. Due to the strong growth of China's economy and excellent control of the epidemic,
the value of the RMB continued to rise relative to the currencies of other major economies, objectively causing a
reduction in RMB revenue for Chinese foreign exporters.The U.S. real estate market continues to remain buoyant
and prosperous, bringing a steady upswing in demand for various tools. Since the second quarter, the prices of raw
materials and commodities have been rising, global freight rates have been increasing and international logistics
capacity has been tight, which has had a significant negative impact on the company's profitability but has
highlighted the advantages of the company's global layout and has continued to gain market share. Although some
international small and medium-sized tooling companies relied on the market boom to obtain orders, due to the
cost rise much faster than the rise in revenue, resulting in a continuous deterioration of cash flow, following the
early 2020, the second half of 2021 saw a wave of bankruptcy, the industry further got clear. Under these
profound changes, the Company continued to gain market share by virtue of its comprehensive competitiveness,
and its annual operating revenue achieved more than expected growth, while net profit was basically the same as
the same period last year due to three negative factors: RMB exchange rate, raw material price and international
shipping cost. During the reporting period, the company achieved total operating revenue of 10.920 billion yuan,
an increase of 27.80% year-on-year, and net profit attributable to shareholders of the listed company was 1.270
billion yuan, a decrease of 5.93% year-on-year. The performance of each business segment is as follows:
      1. Hand Tools Business
      During the reporting period, the Company seized the opportunity of rising demand but continuous supply
voidance in the industry, gave full play to its advantages in innovation, supply chain, brand, channel and
internationalization, accelerated product innovation and category expansion, and continued to invest in
cross-border e-commerce business and private brand construction, achieving further increase in market share.
      During the reporting period, on the basis of the rapid growth of the existing business, the Company made a
breakthrough in the expansion of innovative products and new categories, and obtained a large number of large
orders for garden hand tools and outdoor products, and the sales and share of core customers also continued to
increase, further deepening the partnership.The company's own brand sales hit a new record high, and acquired
SK, a professional-level auto repair tool brand, and continued to improve the professional-level tool brand
matrix.The company's cross-border e-commerce business maintained rapid development, and continued to carry


                                                                                                                19
                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

out social media promotion of brand sponsorship and public welfare activities, maintaining high growth in brand
exposure and crowd reach, and increasing online brand awareness.The company also pushed forward the layout of
globalization platform, and the number of inbound platforms and new stores continued to grow. With the
continuous improvement of the company's own brand matrix and the continuous growth of cross-border
e-commerce business, the company's own brand sales exceeded RMB 3.8 billion for the first time, an increase of
46.06% year-on-year. Against the backdrop of sluggish global capacity additions, the company continued to
promote global capacity layout, basically completed the first round of capacity layout in Southeast Asia, and
acquired capacity in China and Europe through acquisitions.Finally, the company's R&D expenditure continued to
reach a record high, which strongly supported the construction of the company's own brand and the acquisition of
market share. The hand tool business achieved sales revenue of RMB 6.553 billion for the year, an increase of
14.52% year-on-year.
      2. Power Tools Business
      During the reporting period, the company re-invested in the development of power tools product line,
synchronized the online and offline layout, accelerated the product innovation and channel expansion of power
tools with electric vacuum cleaners and power nail guns as the core products, and launched a new 20V platform
with a full range of lithium battery power tools product line. The company completed the layout and optimization
of electric vacuum cleaner production capacity at the beginning of the year and resumed sales in North America in
the second half of the year, and quickly resumed production capacity and orders for power nail guns in Europe
after completing the acquisition of BeA's assets in June, laying a good foundation for the company's power tool
business. At the same time, we launched a full range of power tool products online, and achieved good reputation
in the market, especially the new lithium battery products once out of stock. As the first booming year of the
company's power tools in 2021, the sales revenue of power tools business was 1.021 billion yuan, an increase of
453.77% year-on-year.
      3. Laser Measurement Business
      During the reporting period, the company continued to promote product development, mass production and
delivery for key customers, made breakthroughs in new products and channel expansion, obtained exclusive
long-term orders from important customers, and gradually established the international market influence of the
company's laser tools. For the domestic market, the company readjusted its brand, product positioning and
business direction, innovated specific products and achieved good growth. LIDAR products continued to go to
market and customized products continued to be landed, with deliveries increasing by more than 100%
year-on-year. The annual sales revenue of laser measuring instrument business was RMB889 million, an increase
of 73.13% year-on-year.
      4. Storage Cabinet Business
      During the reporting period, the European market recovered well and LISTA business returned to growth,
with annual revenue growth of more than 30%. Important progress was made in the expansion of new categories
and channels in the U.S. market, and the order volume continued to increase. After completing the acquisition of
Keelong, the company and Keelong carried out full integration in the existing business. Although Keelong
suffered certain losses in the second half of the year due to raw material prices and freight costs, the company
actively optimized costs and believes it will achieve better growth in the new year. At the same time, the
company's Thailand box and cabinet production base was fully put into operation, laying the foundation of
production capacity for growth in FY22. The annual storage container business achieved sales revenue of 2.371
billion yuan, an increase of 152.36% year-on-year.




                                                                                                              20
                                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

2. Income and Costs

(1) Composition of operating income

                                                                                                                        Unit: Yuan

                                   FY 2021                                     FY 2020
                                                                                                                Year-on-year
                                          Share of operating                          Share of operating
                         Amount                                      Amount                                  increase or decrease
                                               revenue                                     revenue

Total operating
                      10,919,683,344.37                  100%      8,544,440,154.30                  100%                27.80%
income

By Industry

Tool and storage
                      10,849,925,564.41              99.36%        8,502,327,129.89              99.51%                  27.61%
cabinets

Other operating
                         69,757,779.96                   0.64%        42,113,024.41                  0.49%               65.64%
income

By products

Hand Tools             6,540,834,718.85              59.90%        5,722,716,497.05              66.98%                  75.74%

Power Tools            1,021,102,413.74                  9.35%       184,390,488.35                  2.16%                 1.32%

Laser Measurement       888,587,229.84                   8.14%       513,234,699.39                  6.01%                 7.88%

Storage cabinet        2,370,715,437.22              21.71%          939,420,434.18              10.99%                  14.57%

Personal Protective
                         28,685,764.76                   0.26%     1,142,565,010.92              13.37%                    0.00%
Equipment

Other operating
                         69,757,779.96                   0.64%        42,113,024.41                  0.49%                 0.48%
income

By Region

Americas               7,521,994,025.83              68.89%        6,087,960,337.66              71.25%                  23.56%

Europe                 2,399,120,860.68              21.97%        1,597,573,574.54              18.70%                  50.17%

Other                   510,223,523.81                   4.67%       373,208,130.61                  4.37%               36.71%

Domestic (China)        418,587,154.09                   3.83%       443,585,087.08                  5.19%                -5.64%

Other operating
                         69,757,779.96                   0.64%        42,113,024.41                  0.49%               65.64%
income

By sales model

Owned Brands
                       3,836,999,428.09              35.14%        2,626,930,299.06              30.74%                  46.06%
(OBM)

Customer Brand
                       7,012,926,136.32              64.22%        5,875,396,830.83              68.76%                  19.36%
(ODM)

Other operating
                         69,757,779.96                   0.64%        42,113,024.41                  0.49%               65.64%
income


                                                                                                                                21
                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

(2) Industries, products, regions, and sales patterns that account for more than 10% of the Company's
operating incomes or operating profits

√ Applicable □ Not Applicable
                                                                                                                                Unit: Yuan

                                                                                  Increase or          Increase or
                                                                                                                           Increase or
                                                                                  decrease in         decrease in
                                                                                                                        decrease in gross
                                                                              operating income       operating costs
                    Operating income Operating Costs         Gross margin                                               margin over the
                                                                                over the same        over the same
                                                                                                                         same period of
                                                                                 period of the        period of the
                                                                                                                        the previous year
                                                                                previous year        previous year

By Industry

Tool and storage    10,849,925,564.4
                                         8,147,389,910.45            24.91%              27.61%               37.93%              -5.62%
cabinets                             1

Sub-products

Hand Tools          6,540,834,718.85 4,716,308,916.32                27.89%              14.30%               17.84%              -2.17%

Power Tools         1,021,102,413.74      799,043,331.71             21.75%             453.77%               502.20%             -6.29%

Laser
                      888,587,229.84      648,486,058.41             27.02%              73.13%               77.32%              -1.72%
Measurement

Storage cabinet     2,370,715,437.22 1,959,219,152.16                17.36%             152.36%               213.89%            -16.20%

Personal
Protective             28,685,764.76       24,332,451.85             15.18%             -97.49%               -96.89%            -16.38%
Equipment

By Region

Americas            7,534,636,811.76 5,658,997,744.63                24.89%              23.76%               33.35%              -5.40%

Europe              2,399,120,860.68 1,750,621,444.76                27.03%              50.17%               65.09%              -6.59%

By sales model

Owned Brands
                    3,836,999,428.09 2,869,213,853.22                25.22%              46.06%               60.44%              -6.70%
(OBM)

Customer Brand
                    7,025,568,922.25 5,282,578,820.37                24.81%              19.58%               28.27%              -5.09%
(ODM)

In the event that the statistical caliber of the company's main business data is adjusted in the reporting period, the company's main
business data for the most recent year adjusted by the caliber at the end of the reporting period
□ Applicable √ Not Applicable


(3) Whether the company's income from physical sales is greater than its income from labor services

√ Yes□ No

        Industry              Projects                Unit                 FY 2021                  FY 2020             Year-on-year


                                                                                                                                          22
                                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

    Classification                                                                                              increase or decrease

                      Sales volume          PCS                              444,440,557        499,606,095                 -11.04%
Tools and storage
                      Production volume     PCS                              497,037,108        471,227,326                   5.48%
cabinets
                      Inventory             PCS                              113,575,793          60,979,242                86.25%

Reasons for a year-on-year change of 30% or more in relevant data
□ Applicable √ Not Applicable


(4) Performance status of significant sales contracts and significant purchase contracts entered into by the
Company as of the reporting period

□ Applicable √ Not Applicable


(5) Composition of operating costs

Industry and Product Categories
                                                                                                                           Unit: Yuan

                                                    FY 2021                                FY 2020                   Year-on-year
     Industry
                         Items                                Share of                               Share of         increase or
  Classification                           Amount                                Amount
                                                          operating costs                       operating costs        decrease

Tools and storage
                                     8,147,389,910.45               99.65% 5,906,839,891.29               99.66%             37.93%
cabinets

Other operating
                                          28,733,758.05              0.35%      19,926,004.47              0.34%             44.20%
costs

                                                                                                                           Unit: Yuan

                                                    FY 2021                                FY 2020                   Year-on-year
        Product
                         Items                                Share of                               Share of         increase or
    Categories                             Amount                                Amount
                                                          operating costs                       operating costs        decrease

Hand Tools                           4,716,308,916.32               57.69% 4,002,226,666.13               67.52%             17.84%

Power Tools                            799,043,331.71                9.77%     132,687,395.42              2.24%           502.20%

Laser
                                       648,486,058.41                7.93%     365,707,432.15              6.17%             77.32%
Measurement

Storage cabinet                      1,959,219,152.16               23.96%     624,178,422.88             10.53%           213.89%

Personal
Protective                                24,332,451.85              0.30%     782,039,974.71             13.20%            -96.89%
Equipment

Other operating
                                          28,733,758.05              0.35%      19,926,004.47              0.34%             44.20%
costs

Notes:
None


                                                                                                                                    23
                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

(6) Whether there was any change in the scope of consolidation during the reporting period

√ Yes□ No
For details, see Section X. Financial Reporting: VIII. Changes in Scope of Consolidation.


(7) Significant changes or adjustments to the company's business, products or services during the reporting
period

□ Applicable √ Not Applicable


(8) Major sales customers and major suppliers

The company's major customers

Total sales amount of the top five customers (yuan)                                                                5,079,793,692.55

Top five customers' combined sales amount as a
                                                                                                                            46.51%
percentage of total annual sales

Ratio of related party sales to total annual sales of the top
                                                                                                                              0.00%
five customers

Information on the company's top 5 customers

    Serial
                             Customer Name                           Sales (yuan)              Percentage of total annual sales
    number

1             Customer I                                                 2,322,454,641.25                                   21.27%

2             Customer II                                                1,193,948,350.96                                   10.93%

3             Customer III                                               1,075,619,185.78                                     9.85%

4             Customer IV                                                  247,328,727.59                                     2.26%

5             Customer V                                                   240,442,786.97                                     2.20%

Total                              --                                    5,079,793,692.55                                   46.51%

Other description of major customers
□ Applicable √ Not Applicable
The company's major suppliers

Total purchase amount of the top five suppliers (yuan)                                                              425,498,210.39

Top five suppliers' combined purchase amount as a
                                                                                                                              5.22%
percentage of total annual purchase

Percentage of related party purchases among the top five
                                                                                                                              0.00%
suppliers' purchases to total annual purchases

Information on the company's top 5 suppliers

     Serial
                              Supplier Name                     Purchase amount (yuan)      Percentage of total annual procurement
    number

1              Supplier I                                                  106,828,258.09                                     1.31%


                                                                                                                                     24
                                                                     Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


2               Supplier II                                                  99,765,980.42                                        1.23%

3               Supplier III                                                 75,946,664.94                                        0.93%

4               Supplier IV                                                  74,251,973.00                                        0.91%

5               Supplier V                                                   68,705,333.94                                        0.84%

Total                                 --                                    425,498,210.39                                        5.22%

Other information on major suppliers
□ Applicable √ Not Applicable


3.Expense

                                                                                                                               Unit: Yuan

                                                                              Year-on-year
                                     FY 2021               FY 2020             increase or        Description of significant changes
                                                                                decrease

                                                                                                This is mainly due to the increase in
Selling expenses                     593,003,103.68        458,274,408.65             29.40% the scope of consolidation in the
                                                                                                current period.

                                                                                                This is mainly due to the increase in
Administration expenses              686,120,731.06        500,999,938.00             36.95% the scope of consolidation in the
                                                                                                current period.

                                                                                                This is mainly due to exchange rate
Finance costs                         64,801,716.03        113,580,005.05             -42.95%
                                                                                                fluctuations.

R&D expenses                         309,763,366.15        245,372,069.36             26.24%


        5. R&D Input

√ Applicable □ Not Applicable

Name of main R&D                                                                                         Expected impact on the future
                               Project Purpose        Project Progress      Objectives to be achieved
        projects                                                                                          development of the company

Study on double
extrusion casting
process of
                        Increase productivity and                        Reducing the number of          Increase the number of
aluminum alloy                                      Already completed
                        reduce labor costs                               workers                         product line
parts for unequal
thickness hand
cutting tools

Research on
injection molding       Improve product                                                                  Increase the number of
                                                    Already completed    Ensuring product stability
process of high         performance and stability                                                        product line
strength fixture


                                                                                                                                        25
                                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

handle modified by
stepless
nanoparticles

Research and
application of
                        Reduce energy loss,
constant current                                                                                   Increase the number of
                        making the product        Already completed   Ensuring product stability
driving technology                                                                                 product line
                        performance more stable
of LED for high
power lighting

Research on
high-strength
stainless steel sheet
                                                                      Reducing the number of       Increase the number of
fine                    Increase productivity     Already completed
                                                                      workers                      product line
blanking-extrusion
composite forming
technology

Research and
application of
intelligent
                        Save material and
manufacturing                                                                                      Increase the number of
                        improve material          Already completed   Cutting the cost
technology of                                                                                      product line
                        utilization
aluminum extrusion
die for handheld
lighting tools

Research and
application of
high-reliable drive     Reduce energy loss,
                                                                                                   Increase the number of
power technology        making the product        Already completed   Ensuring product stability
                                                                                                   product line
for single              performance more stable
high-power LED
lighting

Research on the
technology of
                        Improved production
multi-station
                        efficiency, fewer                             Reducing the number of       Increase the number of
progressive die for                               Already completed
                        workers, more stable                          workers                      product line
nail gun sheet metal
                        products
parts with double
guiding mechanism

Research on the
                        Save material and
fundamentals of                                                                                    Increase the number of
                        improve material          Already completed   Cutting the cost
aluminum alloy                                                                                     product line
                        utilization
rheological



                                                                                                                            26
                                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

extrusion casting
forming technology

Research on rapid
thermal cycle
                      Save material, improve
injection molding
                      material utilization,                                                                 Increase the number of
technology of                                     Already completed       Cutting the cost
                      improve product                                                                       product line
polymer material
                      performance and stability
modified handheld
fixture

Research on high
power LED lighting Energy saving and                                                                        Increase the number of
                                                  Already completed       Ensuring product stability
drive and control     environmental protection                                                              product line
technology

Study on nitrogen
spring type fine
blanking die holder Improve product                                                                         Increase the number of
                                                  Already completed       Ensuring product stability
and fine blanking     performance and stability                                                             product line
forming of impact
parts

Research on a
multi-station
                      Reduce labor and                                    Reducing the number of            Further improvement of
automated welding                                 Already completed
                      increase productivity                               workers                           automatic production
technology and
equipment

Research on the
improvement
                      Reduce energy loss,
scheme and                                                                                                  Increase the number of
                      making the product          Already completed       Ensuring product stability
technology of LED                                                                                           product line
                      performance more stable
work light luminous
performance

                      As the phenomenon of        Research period for     The project provides
                                                                                                            Separate the four categories
                      resource scarcity is        this project:           environmentally friendly
                                                                                                            of "dry garbage", "wet
                      becoming more and more 07/2019-06/2022              sorting and recycling bins that
RD03(2019)Resear                                                                                            garbage", "hazardous
                      serious, the project of     01.07.2019 -            separate the four categories of
ch and                                                                                                      garbage" and "recyclable
                      renewable energy            31.12.2019: Conduct "dry garbage", "wet garbage",
Development of                                                                                              garbage", and at the same
                      recovery is being paid      project research,       "hazardous garbage" and
Environmentally                                                                                             time set up an active
                      more and more attention market demand               "recyclable garbage", and at
Friendly Waste                                                                                              carbonization layer to purify
                      by the society, and waste analysis;                 the same time set up an active
Separation and                                                                                              the air, raise people's
                      separation is one of the    01.01.2020 -            carbonization layer to purify
Recycling Bins                                                                                              awareness of garbage sorting
                      prerequisites for           30.06.2020: design      the air, raise people's
                                                                                                            and increase the rate of
                      renewable energy            of the product          awareness of garbage sorting
                                                                                                            garbage sorting and recycling.
                      recovery, and it is also a development              and increase the rate of



                                                                                                                                            27
                                                                    Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                    reform of the traditional   program.                 garbage sorting and recycling.
                    way of waste collection     01. 07. 2020 - 31. 12.
                    and disposal, as well as a 2021: Determine the
                    scientific management       transformation plan
                    method for the effective    for the new
                    disposal of waste. In the transformation
                    face of increasing waste    process, and carry
                    production and              out trial production
                    deteriorating               and put it into use.
                    environmental               01.01.2022 - 30. 06.
                    conditions, how to          2022: Improve the
                    maximize the use of         product through
                    waste resources, reduce     market customer
                    the amount of waste      feedback; final
                    disposal and improve the program
                    living environment       implementation.
                    through waste separation
                    management is one of the
                    urgent issues of common
                    concern in the current
                    society.

                    Tool box cabinet is         The planned period       Tool cabinets are mainly used Tool cabinets are mainly used
                    generally used in           of this project:         to store tools, the existing tool to store tools, the existing tool
                    automotive repair,          2020.01-2020.10          cabinets are mainly fixed         cabinets are mainly fixed
                    enterprise workshop         (1)                      structure, that is, the cabinet   structure, that is, the cabinet
                    equipment maintenance, 2020.01.01-2020.02. body and so on are                          body and so on are
                    instrumentation             29: complete market manufactured for the whole             manufactured for the whole
                    maintenance, laying a       research on              structure, generally using the structure, generally using the
                    variety of lines and other quick-connect tool        whole bending and then            whole bending and then
                    work occasions. The         cabinets, conduct        welding process, the              welding process, the
RD01(2020)Resear general toolbox cabinet        demand analysis, and installation and disassembly is installation and disassembly is
ch and              part of the box body is     carry out initial        inconvenient, occupy more         inconvenient, occupy more
Development of      welded or riveted fixed     functional target        space, transportation costs are space, transportation costs are
Quick Connect Tool structure, the structure of design.                   also higher. With the progress also higher. With the progress
Cabinet             this toolbox cabinet is not (2)                      of science and technology,        of science and technology,
                    removable, the              2020.03.01-2020.05. there gradually appeared               there gradually appeared
                    processing automation       30: complete the         disassembled tool cabinets,       disassembled tool cabinets,
                    degree is low, and          splitting of the         but the existing disassembled but the existing disassembled
                    occupies a large space in functional modules         tool cabinets take a long time tool cabinets take a long time
                    the transportation          of the quick-connect to assemble, the workload is          to assemble, the workload is
                    process, and it is not      tool cabinet, and        large, and the assembled          large, and the assembled
                    convenient for storage      refine and analyze       cabinet is not solid. Therefore, cabinet is not solid. Therefore,
                    and transportation. Tool    the design ideas of      in response to the above          in response to the above
                    cabinet quick connection each module to form problems, this project                    problems, this project


                                                                                                                                             28
                                                                     Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                    technology is favored by the implementation           develops a quick-connect tool develops a quick-connect tool
                    the market at home and       plan of each part of     cabinet.                      cabinet.
                    abroad, the current          the functionalities of
                    technology is mostly         the quick-connect
                    focused on the use of        tool cabinet.
                    rivet nuts or bolts and      (3)
                    slots in the structure, this 2020.06.01-2020.08.
                    type of assembly method 31: complete the
                    connection is simple and design and
                    can achieve rapid            development of each
                    installation and             part of the
                    disassembly.                 quick-connect tool
                                                 cabinet and the
                                                 production of
                                                 samples, and carry
                                                 out detailed
                                                 refinement for the
                                                 parts and specific
                                                 processes.
                                                 (4)
                                                 2020.09.01-2020.10.
                                                 31: Test the
                                                 quick-connect tool
                                                 cabinet, complete the
                                                 acceptance of the
                                                 project, and
                                                 summarize, conclude
                                                 and review.

                    With the needs of            With the needs of        This project develops and     This project develops and
                    people's life and            people's life and        provides a horizontal toolbox provides a horizontal toolbox
                    production, tool boxes       production, tool         with an improved anti-pick    with an improved anti-pick
                    have been more and more boxes have been               lock system. The toolbox uses lock system. The toolbox uses
                    widely used in people's      more and more            a padlock and a lock          a padlock and a lock
                    daily life. And there is a   widely used in           mechanism with multiple       mechanism with multiple
RD02(2020)          kind of toolbox is set       people's daily life.     locking points that can be    locking points that can be
Research and        with a lid, the user can     And there is a kind of operated simultaneously from operated simultaneously from
Development of      easily open the lid to take toolbox is set with a one end of the box. And a         one end of the box. And a
Horizontal Toolbox out the tools. But when       lid, the user can        lock mechanism that causes    lock mechanism that causes
                    the toolbox is in a more     easily open the lid to damage due to moving            damage due to moving
                    open environment (such take out the tools.            objects into and out of the   objects into and out of the
                    as construction sites,       But when the toolbox toolbox normally can be           toolbox normally can be
                    etc.), the items in the      is in a more open        avoided, and the lock system avoided, and the lock system
                    toolbox is in an unsafe      environment (such as which extends to the storage      which extends to the storage
                    state. At present, lock      construction sites,      area less will be provided.   area less will be provided.


                                                                                                                                       29
                                                                     Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                    rings are generally set on etc.), the items in the
                    the toolbox and lid, and     toolbox is in an
                    then use padlocks to lock unsafe state. At
                    them. But the lock ring      present, lock rings
                    and padlock in this          are generally set on
                    locking way are in an        the toolbox and lid,
                    exposed state, it is easy    and then use
                    to be destroyed by           padlocks to lock
                    external force.              them. But the lock
                                                 ring and padlock in
                                                 this locking way are
                                                 in an exposed state, it
                                                 is easy to be
                                                 destroyed by external
                                                 force.

                                                 "The planned period
                                                 of this project:
                    Most of the traditional
                                                 2020.11-2021.10
                    tool cabinets and
                                                 (1)
                    workbenches use screws
                                                 2020.11.01-2020.12.
                    to fix the sockets, which
                                                 31: Complete market
                    is inconvenient to install
                                                 research on
                    and dismantle and
                                                 quick-disassembly
                    reduces the work
                                                 socket structure,
                    efficiency. As an
                                                 conduct requirements This project develops a              This project develops a
                    indispensable product for
                                                 analysis, and carry       quick-disassembly socket        quick-disassembly socket
                    our production life, the
                                                 out initial functional structure to achieve quick         structure to achieve quick
                    socket module used in
RD03(2020)                                       target design.            disassembly and                 disassembly and
                    the current market is
Research and                                     (2)                       interchangeability of socket    interchangeability of socket
                    mostly made by placing
Development of                                   2021.01.01-2021.04. modules for application to            modules for application to
                    the conductive copper
Quick Disassembly                                30: Complete the          national socket standards, and national socket standards, and
                    reed inside the injection
Socket Structure                                 splitting of the          with easy and fast installation with easy and fast installation
                    mold and then injection
                                                 functional modules        and disassembly, reducing the and disassembly, reducing the
                    molding to get the final
                                                 of the                    need for distribution and       need for distribution and
                    whole product, the
                                                 quick-disassembly         saving transportation costs     saving transportation costs
                    conductive reed inside
                                                 socket structure, and
                    the socket module
                                                 refine and analyze
                    produced by this process
                                                 the design ideas of
                    and structure is not
                                                 each module to form
                    interchangeable and once
                                                 an implementation
                    damaged, the whole
                                                 plan for the functions
                    module can only be
                                                 of each part of the
                    discarded.
                                                 quick-disassembly
                                                 socket structure.


                                                                                                                                          30
                                                                    Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                                 (3)
                                                 2021.05.01-2021.10.
                                                 31: Complete the
                                                 design, development
                                                 and production of
                                                 samples for each part
                                                 of the
                                                 quick-disassembly
                                                 socket structure, with
                                                 detailed refinement
                                                 for parts and specific
                                                 processes.
                                                 (4)
                                                 2021.11.01-2021.12.
                                                 31: Quickly
                                                 disassemble the
                                                 socket structure for
                                                 testing, complete the
                                                 acceptance of the
                                                 project, and
                                                 summarize,
                                                 conclude, and
                                                 review. "

                     With the development of "The planned period This project carries out the
                     digital computer            of this project:         research and development of
                     technology, there is a      2021.03.01-2021.12. automatic welding equipment
                                                                                                           The use of machines instead
                     higher requirement for      31                       for tool cabinets, using
                                                                                                           of manpower also greatly
                     the precision of tool       (1)                      computer key technologies to
                                                                                                           improves the work efficiency
                     cabinets. However, the      2021.03.01-2021.03. achieve self-adaptive control
                                                                                                           and reduces the difficulty of
                     current level of            31: Market research, mode, greatly reducing the
                                                                                                           management and control. And
                     automation of the           demand analysis,         pressure of employment. The
RD01(2021)                                                                                                 with the help of database
                     welding equipment used preliminary work              use of machines instead of
Research and                                                                                               technology, the welding
                     is not high, tool cabinet   objectives and initial manpower also greatly
Development of                                                                                             equipment can enter the full
                     welding precision is not    functional objectives improves the work efficiency
Automatic Welding                                                                                          automatic mode, which can
                     enough, and the             design according to      and reduces the difficulty of
Equipment for Tool                                                                                         not only randomly correct the
                     performance of the          the work plan.           management and control.
Cabinets                                                                                                   possible deviation, improve
                     machinery and               (2)                      With the help of database
                                                                                                           the welding precision of the
                     equipment is not enough, 2021.04.01-2021.07. technology, the welding
                                                                                                           tool cabinet, but also greatly
                     which can easily lead to    31: Complete the         equipment can enter the full
                                                                                                           reduce the risk problems in
                     waste of resources and      construction of the      automatic mode, which can
                                                                                                           the production process.
                     instrument damage, and      function module of       not only randomly correct the
                     the security is not high,   the automatic            possible deviation, improve
                     leading to increased        welding equipment        the welding precision of the
                     control difficulties,       for the tool cabinet,    tool cabinet, but also greatly


                                                                                                                                            31
                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

making our company tool split and assemble         reduce the risk problems in
cabinet welding           each module of the       the production process.
manufacturing             equipment, and carry
technology limited. The   out each design
use of machines instead   according to the
of manual also greatly    design function goal,
improve the efficiency,   focusing on the
reduce control            automatic welding
difficulties, and with the function and
help of database          automatic switching
technology, the welding   control function of
equipment can enter the   the equipment.
fully automatic mode, not (3)
only can randomly         2021.08.01-2021.09.
correct possible          30: The test
deviations, improve the   department conducts
tool cabinet welding      the first round of
precision, but also can   testing, evaluates the
greatly reduce the risk   quality of the
problems in the           automatic control
production process.       welding function of
                          the equipment,
                          determines the
                          quality grade of the
                          equipment through
                          the analysis of
                          product precision,
                          analyzes and
                          summarizes the test
                          verification records,
                          and points out the
                          existing problems
                          and deficiencies and
                          puts forward
                          suggestions for
                          improvement.
                          (4)
                          2021.10.01-2021.11.
                          30: The R & D
                          department optimizes
                          the details of the
                          equipment according
                          to the results of the
                          last round of tests,


                                                                                                     32
                                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                             mainly optimizing its
                                             performance
                                             problems such as
                                             switching deviation
                                             in practical
                                             application, and
                                             putting it into
                                             practical application
                                             after further
                                             improvement. This
                                             stage examines the
                                             advantages of this
                                             equipment compared
                                             with traditional
                                             equipment.
                                             (5)
                                             2021.12.01-2021.12.
                                             31: Summarize the
                                             project, analyze the
                                             trial results, and plan
                                             for the equipment to
                                             be officially
                                             launched.”

                  With the improvement of "The planned period
                  people's living standards of this project:
                                                                       In view of the shortcomings
                  and the influence of       2021.11.01-2022.10.
                                                                       of the existing technology, the
                  technological innovation 31
                                                                       gas diversion technology and
                  and market competition, (1)
                                                                       related welding technology        It realizes the multi-function
                  some new stoves have       2021.11.01-2021.12.
                                                                       are proposed to transform the of the gas furnace, makes it
                  been introduced in the     31: conduct initial
                                                                       traditional gas furnace to        have the functions of
                  market in recent years,    research, investigate
RD02(2021)                                                             realize the multi-function of     household, outdoor use,
                  among which gas stoves market demand, refer
Research and                                                           the gas furnace, so that it has disassembly, easy to carry,
                  and tool cabinets have     to the characteristics
Development of                                                         the functions of household        adjustable heating speed, etc.,
                  received great attention   of similar products in
Multifunctional                                                        use, outdoor use, removable,      and the multi-function gas
                  from the market. A         the market, and
Combined Gas                                                           easy to carry, adjustable         furnace really realizes the
                  variety of new gas stoves consumer feedback
Furnace                                                                heating speed and so on. And integration of tool cabinet and
                  and tool cabinets are      of similar products in
                                                                       the multi-function gas furnace gas furnace, which provides
                  constantly launched on     the market, calculate
                                                                       really realizes the integration great convenience for users.
                  the market, and the        the cost and analyze
                                                                       of tool cabinet and gas
                  upgrading and innovation the production
                                                                       furnace, which provides great
                  of these tools has become feasibility, and
                                                                       convenience for users.
                  a development trend of     determine the
                  stoves. However, at        direction of research
                  present, the gas stove on and development.


                                                                                                                                          33
                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

the market has few          (2)
functions, and most of      2022.01.01-2022.04.
them are only used as       30: after determining
household gas stoves to     the R & D direction,
heat food, and its simple the R & D
structure makes the         department develops
function of the gas stove the product,
single. And the carbon      determines the
deposits and dirt on the    function of the
bottom of the disk and      product category,
the heater of some          designs the R & D
gas-fired gas furnaces      sample through the
can not be cleaned and      relevant technology,
maintained in time,         and then the test
which not only conducts department carries on
heat slowly but also        the function test to
wastes effective heat       the R & D sample to
energy, which directly      test whether its
affects the heating         automatic
quality and the service     temperature
life of the furnace. And    regulation function
the stove is relatively     and other structural
closed, resulting in soft   functions are
fire and waste of gas, and qualified, and the R
then the furnace plate can & D department will
not heat up quickly, and    improve the sample
the ingenious               after it is qualified.
combination of tool         (3)
cabinet and gas furnace     2022.05.01-2022.07.
can not be realized.        31: improve the
Taking up too much          product, refine the
space and                   selling point of the
cumbersomenesswill be       product through the
the biggest problem.        feedback of different
                            users, and formulate
                            a detailed
                            optimization and
                            improvement plan.
                            (4)
                            2022.08.01-2022.09.
                            30: the testing
                            department conducts
                            the second round of
                            testing of the


                                                                                                      34
                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                               product, mainly
                                               testing whether the
                                               technical
                                               specifications of the
                                               product are up to the
                                               standard and whether
                                               the performance
                                               meets the expected
                                               level, so as to ensure
                                               that it reaches the
                                               advanced level and
                                               completeness of the
                                               industry.
                                               (5)
                                               2022.10.01-2022.10.
                                               31: complete the
                                               acceptance of the
                                               project, and
                                               summarize and
                                               review. "

Research and
Development of
Processing                                                              Its products can be used for a
Technology of High It can reduce material                               long time in low temperature
Strength and         cost, save energy and     Already completed        environment, and have
Environmental        materials.                                         environmental protection and
Protection ABS                                                          flame retardancy.
Material for Hand
Tools

Research and
Development of                                                          This kind of nylon alloy has
                     To seek the balance of
Wear-resistant and                                                      the advantages of low water
                     strength, toughness and
Environment-friend                                                      absorption, good dimensional
                     flame retardancy in the   Already completed
ly Nylon Material                                                       stability, good dry and low
                     process of alloy
Processing                                                              temperature toughness, flame
                     preparation
Technology for                                                          retardancy and heat resistance.
Hand Tools

Research and
Development of
                     Save manpower, cost and
Multifunctional                                Already completed        Improve work efficiency.
                     efficiency
Utility Knife
Assembly Machine

Research and         Surface Oxidation         Already completed        The surface wear resistance of


                                                                                                                        35
                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Development of        treatment of Aluminum                             the aluminum alloy strip is
New Aluminum          Alloy                                             better.
Alloy Material
Easily Oxidized

Research and
                                                                        After heat treatment, the
Development of        Improvement of heat
                                                                        stainless steel has better
Heat Treatment        treatment process of
                                                    Already completed   quality, higher mechanical
Process of New        stainless steel in existing
                                                                        strength, less deformation and
Stainless Steel for   technology
                                                                        better corrosion resistance.
Hand Tools

Research and
Development of        In the process of heat
Heat Treatment        treatment, multiple tools
Process for New       with different shapes are In process              Improve work efficiency
Powder Metallurgy heat treated at the same
Parts for Hand        time.
Tools

                                                                        In the line projector
                                                                        represented by MK, three
                                                                        laser lines perpendicular to
                                                                        each other form an
                                                                        omni-directional working
                                                                        face, and high-brightness        It can effectively enhance the
                                                                        laser modules produce            competitiveness of products,
                      In the intelligent era, the
                                                                        high-visibility laser lines.     expand the current product
Application and       current traditional laser
                                                                        For the series of products       line, and attract more
Development of        instruments are added to
                                                                        represented by SP, the           customers in the instrument
Uniform Visible       more position, angle,
                                                    Already completed   leveling system of the           industry because these
Laser Instrument      temperature and other
                                                                        instrument is controlled by      customers have higher
with Sensing          sensors to achieve
                                                                        electronic sensors, which can requirements for laser
Function              intelligent sensing, alarm,
                                                                        achieve high precision           instruments.
                      self-diagnosis functions.
                                                                        leveling; the optical path       Finally, it can continue to
                                                                        design made by visual laser      improve sales.
                                                                        and optical components
                                                                        makes the laser line clearly
                                                                        visible and easy to use when
                                                                        the instrument is used for a
                                                                        long distance.

                      3D (TOF) technology has                           Wide-angle molded lens; core It opens up new product lines
Application and
                      rich application scenarios                        board hardware circuit;          and enter the fields of robot,
Research of 3D
                      and has been applied in       Already completed   multi-function interface board self-driving, intelligent
Depth Camera in
                      many fields. At present,                          and data protocol and format; warehousing, industrial
Mobile Robot
                      the demand for 3D (TOF)                           pseudo-color rendering; small security and so on.


                                                                                                                                          36
                                                                    Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                     depth imaging                                       batch production of industrial With good applications, it will
                     technology is becoming                              depth camera; SDK               continue to increase the share
                     increasingly prominent in                           development package             of non-laser tools in the next
                     many industries, such as                                                            few years.
                     robot navigation,
                     intelligent security,
                     AR/VR and so on.

                                                                         Design of green light using
                     At present, the demand
                                                                         high power 80mW to 140mW
                     of users for high-power
                                                                         and red light of 200mW;         It can occupy the advantage
Establishment and    omni-directional 3D laser
                                                                         mechanism design of high        and leading position in the
Research of          is more urgent, because
                                                                         power temperature rise and      market competition, lead the
High-power and       there are outdoor
                                                   Pilot stage (55%)     heat dissipation optimization; market in the application and
High-precision 3D applications or indoor
                                                                         design of temperature sensor    promotion of high-power
Laser Architecture   applications, the current
                                                                         and temperature control and     products, and finally win the
Instrument Platform middle and low-end
                                                                         temperature protection          market effectively.
                     products are mainly the
                                                                         program; design of high
                     lack of laser visibility.
                                                                         capacity battery module.

                                                                         Image output of panoramic
Application and      In order to solve the
                                                                         camera, development of 4x
Development of       problem that it is                                                                  It makes a breakthrough in the
                                                                         image magnification and
Panoramic            impossible to observe                                                               professional field of
                                                                         detail enhancement algorithm,
Real-time Indoor     and aim in indoor                                                                   long-distance ranging
                                                   Pilot stage (60%)     development of high precision
and Outdoor          long-distance laser                                                                 applications, prompting
                                                                         ranging module up to 200m
Movable Space        ranging, it can effectively                                                         product competitiveness and
                                                                         working distance, supporting
Laser Measuring      improve the accuracy and                                                            enriching product lines.
                                                                         APP development and
Instrument           user experience.
                                                                         stereotyping

Study on Injection
Molding Process of
Hand Tool Plastic
                                                   Trial production in
Storage Box Based 20% reduction in cost                                  Reduce the scrap rate           Increase corporate profits
                                                   small batch
on Blending
Modification
Technology

Study on Injection
Molding              Increase the original
                                                   Trial production in
Technology of        production efficiency by                            Improve production efficiency Increase corporate profits
                                                   small batch
Ultra-thick Wall     1.5 to 2 times
Screwdriver Handle

Study on the
                     20% increase in
Production                                         Production in small
                     efficiency compared with                            Improve production efficiency Increase corporate profits
Technology of                                      batch
                     the original production
Assembled Putty


                                                                                                                                          37
                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Knife with Split
Inner Core
Structure

Research on
Riveting Process of
Tail Nail                                         Production in small
                      10% reduction in cost                             Reduce the scrap rate         Increase corporate profits
Reinforced by Putty                               batch
Cutter Based on
Industrial Robot

Study on Two-step
Precision Injection
Molding Process of The runner increased
                                                  Production in small
High                  from original 0.5MM to                            Improve production efficiency Increase corporate profits
                                                  batch
Weather-resistant     1 to 2MM.
TPE for Tool
Handle

Research on
Non-uniform
Shrinkage Control
                      The scrap rate of the
Technology of                                     Production in small
                      latter process is reduced                         Reduce the scrap rate         Increase corporate profits
Thick-walled                                      batch
                      to less than 1 ‰.
Plastic Parts of
Long Handle Hand
Tools

Study on Precision
Injection Molding
                      Reduce the molding          Production in small
Process of Low                                                          Improve production efficiency Increase corporate profits
                      temperature by 3%           batch
Color Difference
Fiber-added Nylon

Research on the
Processing
Technology of
Lighting Tool         Increase productivity by Production in small
                                                                        Improve production efficiency Increase corporate profits
Lamp with             30%                         batch
Non-screw
Connection
Structure

Study on High Peel
                      Polypropylene
Strength
                      composites filled with      Production in small
Thermoplastic                                                           Reduce the scrap rate         Increase corporate profits
                      20% and 40% ultra-fine      batch
Elastomer for
                      talc powder
Encapsulating



                                                                                                                                   38
                                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Nylon Handle of
Hand Tools and Its
Application

Research on High
Efficiency
                      Make the depth of the
Stamping
                      handle plate uniform,
Production Line of                                  Trial production       Improve production efficiency Increase corporate profits
                      adjusting from depth
Stainless Steel
                      3MM to 1.5MM
Sheet for Putty
Knife

Study on Low
Shrinkage
                      2. The rivet column is
Polypropylene
                      higher than the bottom of
Composites Filled
                      countersunk hole of other Pilot run                  Improve production efficiency Increase corporate profits
with Calcium
                      fittings after assembly. 1.
Carbonate and
                      5 to 2MM.
Molding Process of
Plastic Parts

The Picking and
Unloading System
of Screwdriver        10% reduction in cost         Trial production       Reduce the scrap rate         Increase corporate profits
Arbor Manipulator
Based on PLC

Multi-specification
Screwdriver Arbor
Injection Mould
                      Cost reduction                Trial production       Reduce the scrap rate         Increase corporate profits
Based on Rapid
Positioning
Technology

Study on
Manufacturing
Technology of
Folding Assembly
                      Improve work efficiency Pilot run                    Improve production efficiency Increase corporate profits
Plastic Operating
Platform for
Woodworking
Decoration

Research and
Development of        Flexible business to
                                                                           Meet multi-mode business
Cloud Platform for realize the integration of Completed
                                                                           expansion
Foreign Trade Lean industry and finance
Supply Chain



                                                                                                                                      39
                                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


Development and
Application of
                       Increase product
Ultra-high
                       functions, improve                             Realize sales and expand
Frequency Pulse                                   Completed
                       product performance, and                       market share
Automatic
                       develop new products
Quenching in
Cutting Tools

                       Increase product                               Achieve sales and meet
Development and
                       functions, improve                             customer needs for
Research of Hybrid                                Completed
                       product performance, and                       professional-grade hybrid
Power Tools
                       develop new products                           tools at home and abroad

                                                                      It meets the needs of
                                                                      customers of power tool
Research and
                       Increase product                               series products at home and
Application of
                       functions, improve                             abroad, increases the export
Communication                                     Under development
                       product performance, and                       volume of the company's
Protocol in Electric
                       develop new products                           products, and improves the
Tools
                                                                      company's international
                                                                      reputation

Application of
Modified and           Increase product
Reinforced Thermal functions, improve                                 Realize sales and expand
                                                  Completed
Conducting Plastics product performance, and                          market share
in Lighting            develop new products
Products

Research and
Development of         Increase product
                                                                      Realize sales and expand
High-precision         functions, improve
                                                  Completed           market share of smart
Long-distance          product performance, and
                                                                      products
Bidirectional Laser develop new products
Ranging Products

Development and
Application of                                                        Truly meet the customer
                       Increase product
Power Lithium                                                         needs of professional tool DC
                       functions, improve
Battery Pack Based                                Under development   products, and improve the
                       product performance, and
on BMS Integrated                                                     expansion and sales of the
                       develop new products
Control System in                                                     entire DC product
Electric Tools

Research and           Increase product
                                                                      Realize sales and expand
Development of a       functions, improve
                                                  Under development   market share of smart
Lase Ranging           product performance, and
                                                                      products
Module with Image develop new products



                                                                                                                      40
                                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Function

                    The assembly mode is
                    still very tedious in the
                    thread fixing operation
                    part, and it is still very
                    time-consuming in
                    assembling or
                    disassembling and
                    repairing each slide rail,
                                                                      The placement function of the
                    and it is well known that
                                                                      tool cabinet is enhanced, the
                    there is a lack of stable                                                           Improve the core
                                                                      shelves are kept at a distance
Research and        assembly structure                                                                  competitiveness and creativity
                                                                      between each other and can
Development of      between the two outer                                                               of enterprises, improve
                                                  2021-10-30Already   be conveniently disassembled
Tool Cabinet with   walls of the slide rail and                                                         product quality, reduce
                                                  completed           and assembled, and the frame
Drawer Slide-rail   the drawer, so that when                                                            operating costs, and promote
                                                                      and the rack also have the
Fixed Structure     the drawer places many                                                              the sustainable and healthy
                                                                      safety function of protecting
                    heavy tools and is used                                                             development of enterprises.
                                                                      the tool cabinet body from
                    for a long time, it is easy
                                                                      shock and collision.
                    to cause the slide rail of
                    the drawer to be loose
                    and damaged.
                    In order to overcome the
                    above disadvantages, the
                    tool cabinet with drawer
                    slide rail fixed structure
                    is developed.

                    The existing assembled
                    bucket cabinet has a
                                                                      The connection mode of the
                    single structure and is not
                                                                      roof and bottom plate is
                    convenient to assemble.
                                                                      through the slot insertion and
                    At present, most
                                                                      bolt fastening, and the
                    assembled bucket                                                                    Improve the core
                                                                      stability of the whole is
                    cabinets only use the                                                               competitiveness and creativity
Research and                                                          improved.
                    cooperation of insertion                                                            of enterprises, improve
Development of a                                  2021-08-25Already   Finally, the supporting foot is
                    boards and slots to                                                                 product quality, reduce
Assembled Drawer                                  completed           installed at the connection
                    complete the assembly                                                               operating costs, and promote
Cabinet                                                               between the side plate and the
                    and disassembly of                                                                  the sustainable and healthy
                                                                      front and rear door frame,
                    assembled bucket                                                                    development of enterprises.
                                                                      which strengthens the stability
                    cabinets.
                                                                      between the side plate and the
                    Although the assembled
                                                                      front door frame and the back
                    bucket cabinet has the
                                                                      door frame.
                    characteristics of easy
                    disassembly and



                                                                                                                                       41
                                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                 convenient
                 transportation, the
                 structure of the
                 assembled bucket cabinet
                 assembled in this way is
                 unstable and prone to
                 deformation.
                 In order to overcome the
                 above disadvantages, the
                 assembled tool cabinet is
                 developed.

                 "the cabinets of
                 traditional tool cabinets
                 are all single-body.
                 The structure of the tool
                 cabinet is single, and the
                 objects that can be stored
                 are relatively small and
                 single because of the
                                                                    The utility model not only
                 limitation of the
                                                                    greatly increases the
                 accommodation space
                                                                    accommodation space of the
                 and structure of the tool
                                                                    tool cabinet, but also
                 cabinet.
                                                                    improves the utilization rate
                 It is often necessary to                                                             Improve the core
Research and                                                        of the storage space; for
                 purchase multiple tool                                                               competitiveness and creativity
Development of                                                      example, the utility model has
                 cabinets with different                                                              of enterprises, improve
Large-capacity                                2021-12-31Already     the advantages of simple
                 specifications to meet the                                                           product quality, reduce
Up-down                                       completed             structure, reasonable design,
                 storage needs of a variety                                                           operating costs, and promote
Combined Tool                                                       large accommodation space,
                 of objects, which leads to                                                           the sustainable and healthy
Cabinet                                                             and can store a variety of
                 more purchase costs of                                                               development of enterprises.
                                                                    tools and articles.
                 storage equipment on the
                                                                    The utilization rate of storage
                 one hand and low
                                                                    space is high, which greatly
                 utilization of storage
                                                                    reduces the purchase cost of
                 space on the other.
                                                                    storage equipment for users.
                 In order to make better
                 use of storage space and
                 meet the high-capacity
                 requirements of
                 consumers,
                 large-capacity
                 up-and-down tool
                 cabinets are developed. "

Development of   Increase product             Mass Production       Increase output value             Expanded product line


                                                                                                                                     42
                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Key Technology of functionality or improve
Multi-function       performance
Fingertip
Gyroscope

Research on
Automatic Printing
                     Increase labor             Device not                                      Automated production goes a
Technology of High                                                    Reduce labor
                     productivity               completed                                       step further
Precision Linear
Level

Study on the Key
                     Increase labor                                                             Automated production goes a
Technology of                                   Mass Production       Reduce labor
                     productivity                                                               step further
Mask Production

Research and
Development of
                     Increase product
Key Technology of                               Product proofing
                     functionality or improve                         Increase output value     Expanded product line
High Precision                                  successful
                     performance
Level with High
Cost Performance

Study on the
Technology of High Reduce energy
                                                Device not                                      Further innovation in
Performance          consumption or improve                           Reduce production costs
                                                completed                                       production technology
Aluminum Welding energy efficiency
L-Type Gauge

Development of
                     Increase product
Key Technologies                                Product proofing
                     functionality or improve                         Increase output value     Expanded product line
of Two-in-one                                   successful
                     performance
Horizontal Ruler

Research on the
Key Technology of                                                                               Further innovation in
                     Save raw materials         Mass Production       Ensure stable quality
Milling the Basic                                                                               production technology
Surface of Level

Research and
Development of
Automatic
                                                                                                Automated production goes a
Assembly             Develop new products       Mass Production       Increase output value
                                                                                                step further
Technology for End
Cover of Linear
Level

Research and
Development of       Increase labor             Device not                                      Automated production goes a
                                                                      Reduce labor
Automatic            productivity               completed                                       step further
Assembly


                                                                                                                          43
                                                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Technology for
L-Square

Research and
Development of
                   Increase product
Automatic                                      Device not       Reduce labor and ensure           Automated production goes a
                   functionality or improve
Assembly                                       completed        stable quality                    step further
                   performance
Technology for
Angle Square

                   Facing users, improve the
                   convenience of product
                                                                                                  Enable the company's
                   use; improve the                             The company's sales in 2021
Vehicle-mounted                                                                                   products to enter the
                   technical requirements of Completed          increased by about 10 million
Glass Lamp                                                                                        professional field smoothly;
                   enterprise products, and                     yuan
                                                                                                  improve profit margins
                   gradually transform to
                   mid-end products

                   Facing users, improve the
                   convenience of product
                                                                                                  Enable the company's
Dry Lithium        use; improve the                             The company's sales in 2021
                                                                                                  products to enter the
Universal Induction technical requirements of Completed         increased by about 20 million
                                                                                                  professional field smoothly;
Head Lamp          enterprise products, and                     yuan
                                                                                                  improve profit margins
                   gradually transform to
                   mid-end products

                   Facing users, improve the
                   convenience of product
                                                                                                  Enable the company's
Solar Rechargeable use; improve the                             The company's sales in 2021
                                                                                                  products to enter the
Hand Three-in-one technical requirements of Completed           increased by about 20 million
                                                                                                  professional field smoothly;
Camping Light      enterprise products, and                     yuan
                                                                                                  improve profit margins
                   gradually transform to
                   mid-end products

                                                                Actively develop laser
                                                                rangefinder products that can
                                                                be used in outdoor
                   The market urgently                          environment, at the same
Outdoor            needs a high-protection                      time, on the basis of
High-protection    rangefinder product that Completed           conventional rangefinder,
Lase Rangefinder   can withstand cruel                          integrate high-precision
                   environmental tests                          ranging algorithm, develop an
                                                                outdoor laser rangefinder with
                                                                high protection and high
                                                                precision.

Electronic Level   The market urgently                          A fast and stable electronic
                                               Completed
Laser Line         needs a laser line                           leveling laser line catcher has



                                                                                                                                 44
                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Projector             projector product that can                      been developed.
                      not be affected by
                      high-altitude floor wind

                                                                      Actively develop the products
                                                                      of wall detector, realize the
                      The market needs an
                                                                      identification of steel bar,
                      efficient instrument that
                                                                      wire, water pipe and other
Wall Body Detector can detect different            Completed
                                                                      materials from the design of
                      substances in the wall
                                                                      internal signal processing, and
                      and their exact location
                                                                      develop a kind of wall
                                                                      detector for rapid detection.

                                                                      Actively develop the
                                                                      corresponding easy-to-clean
                      The market urgently                             products, start with the
Easy Maintenance      needs a laser line                              structure design and
Laser Line Casting projector product that          Completed          protection degree, realize the
Instrument            quickly cleans up stucco                        water flushing cleaning of the
                      pollution                                       laser window, and develop a
                                                                      kind of easy-to-maintain laser
                                                                      line-up instrument.

                                                                      Achieve breakthrough
Study on File and     Development of new
                                                   Small trial        changes in existing products      Increase sales
Planing Tool          products and processes
                                                                      and processes

Development of
Semi-automatic                                                        Achieve breakthrough
                      Development of new
Riveting                                           Middle trial       changes in existing products      Increase sales
                      products and processes
Technology for                                                        and processes
Pipe Cutter Holder

Development of
Automatic Loading
                                                                      Achieve breakthrough
and Unloading         Development of new
                                                   Small trial        changes in existing products      Increase sales
Process for Saw       products and processes
                                                                      and processes
Grinding Based on
Robot Technology

Research on
Single-side
Grinding Process of                                                   Achieve breakthrough
                      Development of new
Pipe Cutter Based                                  Small trial        changes in existing products      Increase sales
                      products and processes
on Five-axis CNC                                                      and processes
Machining
Technology

Research on the       Development of new           Small trial        Achieve breakthrough              Increase sales


                                                                                                                         45
                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Pipe Wrench with      products and processes                          changes in existing products
the Opening Size                                                      and processes
Quickly Adjusted
According to the
Outside Diameter
of Pipe

Research and
Development of
                                                                      Achieve breakthrough
CNC Precision         Development of new
                                               Small trial            changes in existing products       Increase sales
Single-side           products and processes
                                                                      and processes
Grinding Process
for Trowel

Research and
Development of
                                                                      Achieve breakthrough
Multi-station Tooth Development of new
                                               Smalltrial             changes in existing products       Increase sales
Cutting Process       products and processes
                                                                      and processes
with Manual
Knives and Scissors

                                                                      It is expected that the warp
                                                                                                         After successful development,
                                                                      style will be more used in
D-curve Water                                  Already in                                                it has stable market orders and
                      Open up new markets                             Applicable pipe construction
Pump Pliers                                    production                                                brings good benefits to the
                                                                      and will have a certain market
                                                                                                         enterprise
                                                                      share after its launch.

                                                                      Live wrench is one of the
                                                                      necessary tools for equipment
WORKPRO                                                                                                  After successful development,
                                                                      and infrastructure installation,
Adjustable Wrench                              Already in                                                it has stable market orders and
                      Open up new markets                             which is widely used in the
with Smooth                                    production                                                brings good benefits to the
                                                                      market, and the mid-range
Handle                                                                                                   enterprise
                                                                      products meet the current
                                                                      market demand.

                                                                      This high-grade live wrench
                                                                      is one of the company's
                                                                      products sold to the
                                                                                                         After successful development,
                                                                      professional-grade live
New Ratchet                                                                                              it has stable market orders and
                      Open up new markets      Trial production       wrench market. After
Nipper                                                                                                   brings good benefits to the
                                                                      successful development, it has
                                                                                                         enterprise
                                                                      a stable market order and
                                                                      brings good benefits for the
                                                                      enterprise.

ERBAO Large                                                           This high-grade live wrench        After successful development,
Open Spring           Open up new markets      Trial production       is one of the company's            it has stable market orders and
Wrench                                                                products sold to the               brings good benefits to the



                                                                                                                                       46
                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                                                       professional-grade live            enterprise
                                                                       wrench market. After
                                                                       successful development, it has
                                                                       a stable market order and
                                                                       brings good benefits for the
                                                                       enterprise.

                                                                       This high-grade live wrench
                                                                       is one of the company's main
                                                                                                          After successful development,
                                                                       live wrench products. After
SK Premium                                                                                                it has stable market orders and
                    Open up new markets         Trial production       successful development, it has
Adjustable Wrench                                                                                         brings good benefits to the
                                                                       a stable market order and
                                                                                                          enterprise
                                                                       brings good benefits for the
                                                                       enterprise.

                                                                       This high-grade live wrench
                                                                       is one of the company's
                                                                       products sold to the
WOPKPRO                                                                                                   After successful development,
                                                                       professional-grade live
Mid-range Light                                                                                           it has stable market orders and
                    Open up new markets         Trial production       wrench market. After
Handle Adjustable                                                                                         brings good benefits to the
                                                                       successful development, it has
Wrench                                                                                                    enterprise
                                                                       a stable market order and
                                                                       brings good benefits for the
                                                                       enterprise.

                                                                       This high-grade live wrench
                                                                       is one of the company's
                                                                       products sold to the
                                                                                                          After successful development,
                                                                       professional-grade live
Erbao Adjustable                                                                                          it has stable market orders and
                    Open up new markets         Process design         wrench market. After
Wrench                                                                                                    brings good benefits to the
                                                                       successful development, it has
                                                                                                          enterprise
                                                                       a stable market order and
                                                                       brings good benefits for the
                                                                       enterprise.

                                                                       Because the shape is different
                                                                       from the ordinary ratchet
Research and
                    It achieves a partial                              wrench, it has a certain
Development of                                                                                            It achieves a partial market
                    market share of ratchet     Completed              advantage in the ordinary
Professional                                                                                              share of ratchet wrenches.
                    wrenches.                                          ratchet wrench market and
Ratchet Wrench
                                                                       occupies part of the market
                                                                       share of the ratchet wrench.

                    It solves the problems                             The utility model solves the
                                                                                                          It enhances customer
Development of      that the tooth shape of                            problems of common carp
                                                                                                          satisfaction and increases the
Multi-functional    ordinary carp pliers is     Completed              pliers, such as easy to slip and
                                                                                                          product's share in the carp
Slip Joint Pliers   easy to slip and cut wire                          wire cutters, etc., and is
                                                                                                          tongs market.
                    pliers.                                            suitable for use in the process


                                                                                                                                           47
                                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                                                   of shearing size
                                                                   specifications.

                                                                   The utility model solves the
                                                                   problems of common water
                                                                   pump clamp tooth bite, such
                                                                   as easy to slip, tedious          It can quickly adjust between
Research and          It can quickly adjust
                                                                   adjustment of clamp size and pipes of various sizes and
Development of        between pipes of various
                                                   Completed       so on. This product can be        improve work efficiency. It
Anti-skid Water       sizes to improve work
                                                                   quickly adjusted between          increases the market share of
Pump Pliers           efficiency.
                                                                   tubes of all sizes to improve     products in pump pliers.
                                                                   work efficiency. It increases
                                                                   the market share of products
                                                                   in water pump pliers.

                                                                   Quick reversing
                                                                   multi-purpose wrench belongs
                                                                   to high-end ratchet wrench,
                                                                   which solves the problem that
                                                                   only one specification nut can It increases the share of
Development of        It solve the problems that                   be used for a product in the      products in the high-end
Multipurpose          a product on the general                     ordinary market. It reduces       market, increases the added
                                                   Completed
Wrench with Quick market can only use one                          customers' unnecessary            value of products, and
Reversing Direction specification of nuts.                         choices, increases the share of improves the profitability of
                                                                   products in the high-end          enterprises.
                                                                   market, increases the added
                                                                   value of products, and
                                                                   improves the profits of
                                                                   enterprises.

                                                                   Due to the different shape,
                                                                   torque and conventional
                                                                   dual-use wrench, it has certain
                                                                                                     It realizes the company's
                                                                   advantages in the professional
Research and                                                                                         products entering the
                                                                   market and high-end
Development of        It realizes the company's                                                      high-end market, enhances
                                                                   customers, to achieve the
Professional          products entering the        Completed                                         the company's position among
                                                                   company's products into the
Wrench with Large high-end market.                                                                   peers, and guides the
                                                                   high-end market, enhance the
Torque                                                                                               development direction of
                                                                   status of enterprises in the
                                                                                                     products.
                                                                   industry, and guide the
                                                                   development direction of
                                                                   products.

                      Tightening of oil pipe                       Anti-disengagement oil pipe
Development of                                                                                       It can quickly occupy the
                      joint bolts to achieve                       wrench is applied to the
anti-dislodging oil                                Completed                                         hand tool market and enhance
                      good performance and                         tightening of oil pipe joint
pipe wrench                                                                                          the business efficiency.
                      enhance business benefits                    bolts to achieve good


                                                                                                                                     48
                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                                                       performance. This product is
                                                                       produced by fewer domestic
                                                                       manufacturers, which can
                                                                       quickly occupy the hand tool
                                                                       market and enhance enterprise
                                                                       benefits.

                                                                       The 6-claw energy-saving
                                                                       quick wrench belongs to the
                                                                       high-end ratchet wrench,
                                                                       which has no such patented        Increase the share of the
Development of
                      Quick reference to                               product in China and is in the product in the high-end
ratchet 6 pawl
                      improvements in other        In process          leading position in China.        market. This design can also
energy-saving quick
                      products                                         Enhance the share of the          be quickly quoted to improve
wrench
                                                                       product in the high-end           on other products.
                                                                       market. This design can also
                                                                       be quickly quoted in other
                                                                       products for improvement.

                                                                       Solve the lack of labor, stable
                                                                       quality control and improve
                                                                                                         Realize semi-automatic
                      Solve labor shortage,                            production efficiency. Realize
Development of                                                                                           production and provide a new
                      stable quality control and                       semi-automatic production
CNC embossing                                      In process                                            development direction for the
                      improve production                               and provide a new
process                                                                                                  company's production process
                      efficiency                                       development direction for the
                                                                                                         reform.
                                                                       company's production process
                                                                       reform.

                      Provide a kind of
                      automatic heat
                      dissipation laser level                                                            1. Laying the foundation for
                                                                       1. Effectively improve the
                      meter for construction                                                             later research and
Development of                                                         heat dissipation efficiency and
                      project, using                                                                     development;
automatic heat                                                         ensure the working quality of
                      heat-conducting plate and                                                          2. Protecting our intellectual
dissipation type                                   Already completed   the laser level
                      heat dissipation fan to                                                            property;
laser level for                                                        2. Obtain 1-2 patents
                      effectively dissipate heat                                                         3. Improving the company's
construction works                                                     conversion
                      to the body of laser level                                                         production efficiency and
                                                                       3. Improve company benefit
                      meter and ensure the                                                               economic efficiency
                      working quality of laser
                      level meter.

                      The problems solved                              1. The measurement data is        1. Laying the foundation for
                      include: most of the                             more accurate, and the            later research and
Development of
                      existing laser measuring                         cooling fan is set to cool the    development;
tunnel laser                                       Already completed
                      instruments cannot                               laser projector well and          2. Protecting our intellectual
surveyor projector
                      achieve automatic                                improve the service life of the property;
                      leveling, and the                                laser projector;                  3. Improving the company's


                                                                                                                                          49
                                                                    Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                      measurement angle is                               2. Obtain 1-2 patents            production efficiency and
                      also relatively single, and                        conversion                       economic efficiency
                      the equipment has to be                            3. Improve company benefit
                      moved after measuring a
                      direction; when the laser
                      projector works, it is easy
                      to generate a lot of heat,
                      and most of the existing
                      equipment lacks a
                      cooling device for the
                      laser projector, which is
                      very inconvenient to use.

                                                                         1. Through the real person
                      The problems solved
                                                                         voice prompts, the whole
                      include: when using the
                                                                         operation is guided, recording
                      existing level meter, it                                                            1. Laying the foundation for
                                                                         without distraction, sensing
                      requires plane ≤ 3° to the                                                        later research and
Development of                                                           sensitive, rapid adjustment
                      environment, and                                                                    development;
sixteen-line                                                             and more intelligent and
                      secondly, the existing                                                              2. Protecting our intellectual
electronic leveling                                  Already completed   faster than the existing
                      level meter needs staff to                                                          property;
laser level                                                              products;
                      look at the level meter                                                             3. Improving the company's
technology                                                               2. Obtain 1-2 patents
                      and site at the same time,                                                          production efficiency and
                                                                         conversion;
                      which requires dual use,                                                            economic efficiency
                                                                         3. Improve the production
                      resulting low work
                                                                         efficiency and economic
                      efficiency.
                                                                         benefits of the company

                      Provide a laser distance
                      measuring level system
                      based on BIM
                      technology to solve the
                      technical problem of                               1.The unification of field
                                                                                                          1. Laying the foundation for
                      poor measurement                                   line-out and BIM model is
                                                                                                          later research and
Development of        accuracy caused by the                             realized, improving the
                                                                                                          development;
laser distance        inability to import                                efficiency and accuracy;
                                                                                                          2. Protecting our intellectual
leveling system       measurement data into          Already completed   2. Obtain 1-2 patents
                                                                                                          property;
based on BIM          computer and the                                   conversion;
                                                                                                          3. Improving the company's
technology            difficulty in controlling                          3.Improve the production
                                                                                                          production efficiency and
                      the measurement                                    efficiency and economic
                                                                                                          economic efficiency
                      direction due to the use                           benefits of the company
                      of tape measure or laser
                      distance measuring
                      instrument for
                      measurement.

R&D of pipeline       Solve the technical            Already completed   1. It has established a          1. Laying the foundation for


                                                                                                                                           50
                                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

quality inspection   problems of high energy                          complete technical system of later research and
technology based     consumption for                                  pipe size measurement             development;
on laser and         long-distance steel pipe                         structure, measurement            2. Protecting our intellectual
industrial camera    inspection, and it is                            method, evaluation index and property;
                     difficult to ensure the                          intelligent improvement.        3. Improving the company's
                     synchronization of the                           Evaluation indicators can use production efficiency and
                     first and last movements                         different applications and site economic efficiency
                     after long-term use; if                          adaptability enhancement,
                     part of the steel pipe is                        compact structure, cost
                     intercepted for                                  reduction.
                     measurement, it is a lossy                       2. Obtain 1-2 patents
                     inspection, the detection                        conversion
                     efficiency is limited and                        3. Improve the production
                     the cost is high.                                efficiency and economic
                                                                      benefits of the company

                     "To provide a
                     counterweight
                     adjustment technology
                     applied to the pendulum                          1. Provides a technology that
                     body of laser level meter,                       facilitates fine adjustment and
                     to solve the problem that                        can improve the accuracy of       1. Laying the foundation for
Development of       the existing pendulum                            adjusting the center of gravity later research and
laser level          body of laser level meter                        to prevent deviations in the      development;
pendulum             does not have a center of                        measurement accuracy of           2. Protecting our intellectual
                                                  Already completed
counterweight        gravity adjustment                               equipment after installation of property;
adjustment           mechanism installed on                           the motherboard or after a        3. Improving the company's
technology           it, and the measurement                          long period of use                production efficiency and
                     accuracy of the                                  2. Obtain 1-2 patents             economic efficiency
                     equipment is prone to                            conversion
                     deviation after adding                           3. Improve company benefit
                     additional parts to the
                     pendulum body or using
                     it for a long time."

                     To solve the technical
                                                                      1. Clamping both sides of the
                     problem that the existing
                                                                      laser level body by rotation,     1. Laying the foundation for
Development of a     laser level meter usually
                                                                      to achieve rapid positioning      later research and
laser level with     needs to be installed and
                                                                      of the laser level body, the      development;
rapid positioning    positioned before use,
                                                                      protection device can protect 2. Protecting our intellectual
for body protection and the traditional           In process
                                                                      the laser level body in the       property;
in the               positioning device has a
                                                                      circumferential direction, to     3. Improving the company's
circumferential      more complicated
                                                                      prevent people from colliding production efficiency and
direction            structure, and the
                                                                      with the laser level body,        economic efficiency
                     operation steps in the
                                                                      affecting the accuracy;
                     positioning process are

                                                                                                                                         51
                                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                     more and more                                    2. Obtain 1-2 patents
                     complicated.                                     conversion
                                                                      3. Improve company benefit

Company R&D personnel

                                             FY 2021                          FY 2020                      Change ratio

Number of R&D personnel
                                                             978                                701                        39.51%
(people)

Number of R&D personnel as a
                                                           9.07%                              9.50%                        -0.43%
percentage

Educational structure of R&D
                                               ——                             ——                           ——
personnel

Undergraduate                                                361                                283                        27.56%

Master                                                         20                                21                        -4.76%

Age composition of R&D staff                   ——                             ——                           ——

Under 30 years old                                           141                                114                        23.68%

30~40 years old                                              378                                390                        -3.08%

Company R&D investment

                                             FY 2021                          FY 2020                      Change ratio

Amount of R&D investment
                                                  309,763,366.15                   245,372,069.36                          26.24%
(yuan)

R&D investment as a
                                                           2.84%                              2.87%                        -0.03%
percentage of operating revenue

Amount of R&D investment
                                                             0.00                              0.00
capitalized (yuan)

Capitalized R&D investment as
a percentage of R&D                                        0.00%                              0.00%
investment

Reasons for and effects of significant changes in the composition of the Company's R&D staff
□ Applicable √ Not Applicable
Reasons for the significant change in total R&D investment as a percentage of operating revenue compared to the previous year
□ Applicable √ Not Applicable
Reasons for the significant change in capitalization rate of R&D investment and its reasonableness
□ Applicable √ Not Applicable


5. Cash Flow

                                                                                                                          Unit: Yuan

             Items                           FY 2021                          FY 2020                 Year-on-year increase or



                                                                                                                                 52
                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                                                                                                  decrease

Subtotal cash inflow from
                                                11,353,982,165.74                  8,733,248,296.13                              30.01%
operating activities

Subtotal cash outflow from
                                                11,335,349,996.07                  7,962,097,670.89                              42.37%
operating activities

Net cash flows from operating
                                                     18,632,169.67                   771,150,625.24                              -97.58%
activities

Subtotal cash inflow from
                                                   576,965,254.73                    371,506,589.54                              55.30%
investing activities

Subtotal cash outflow from
                                                 1,790,034,046.53                    770,100,603.46                              132.44%
investing activities

Net cash flows from investing
                                                -1,213,068,791.80                   -398,594,013.92                              204.34%
activities

Subtotal cash inflow from
                                                 4,415,766,206.58                  3,889,710,965.44                              13.52%
financing activities

Subtotal cash outflow from
                                                 2,884,992,006.99                  2,730,585,831.23                               5.65%
financing activities

Net cash flows from financing
                                                 1,530,774,199.59                  1,159,125,134.21                              32.06%
activities

Net increase in cash and cash
                                                   270,923,023.10                  1,602,805,770.74                              -83.10%
equivalents

Explanation of the main influencing factors for the significant year-on-year change in relevant data
√ Applicable □ Not Applicable

                   Item                                                             Year-on-year          Cause of Change
                                                FY 2021              FY 2020         increase or
                                                                                       decrease
Net cash flows from operating activities        18,632,169.67     771,150,625.24            -97.58% Mainly due to the increase
                                                                                                     in the scope of consolidation
                                                                                                     and the increase in stock
                                                                                                     preparation during the
                                                                                                     period
Net cash flows from investing activities    -1,213,068,791.80 -398,594,013.92              204.34% Mainly due to the
                                                                                                     investment payment for the
                                                                                                     acquisition of Keelong and
                                                                                                     BeA during the period.
Net cash flows from financing activities     1,530,774,199.59 1,159,125,134.21               32.06% Mainly due to the receipt of
                                                                                                     loans from Qiu Jianping and
                                                                                                     Wang Lingling during the
                                                                                                     period.

Explanation of the reasons for the significant difference between the net cash flow from operating activities and the net profit of the


                                                                                                                                       53
                                                                    Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

year during the reporting period
□ Applicable √ Not Applicable


V. Analysis of Non-main business

□ Applicable √ Not Applicable


VI. Analysis of Assets and Liabilities

1. Significant changes in the composition of assets

                                                                                                                                    Unit: Yuan

                            End of 2021                     Beginning of 2021
                                                                                         Weight
                                        Percentage of                    Percentage of                 Description of significant changes
                       Amount                             Amount                         gain/loss
                                         total assets                     total assets

                   4,033,707,240.                       3,750,506,068.
Monetary Funds                                23.31%                           27.42%      -4.11%
                                   16                              39

                                                                                                     This is mainly due to the increase in
Accounts           1,798,265,505.                       1,260,096,723.
                                              10.39%                            9.21%       1.18% the scope of consolidation in the
Receivable                         53                              75
                                                                                                     current period.

Contract Assets                                0.00%                            0.00%       0.00%

                                                                                                     This is mainly due to the increase in
                                                                                                     the scope of consolidation and the
                                                                                                     increase in stock preparation due to the
                   2,835,777,996.                       1,386,320,837.
Inventory                                     16.39%                           10.14%       6.25% growth of international e-commerce
                                   84                              86
                                                                                                     business, the epidemic and the increase
                                                                                                     in raw material prices during the
                                                                                                     period.

Investment          127,058,966.6
                                               0.73%                            0.00%       0.73%
properties                         9

Long-term equity 2,353,942,699.                         2,207,878,459.
                                              13.60%                           16.14%      -2.54%
investments                        80                              67

                   1,494,547,487.                       1,348,034,595.
Fixed Assets                                   8.64%                            9.86%      -1.22%
                                   29                              31

Construction in     113,750,851.4
                                               0.66% 166,268,204.96             1.22%      -0.56%
progress                           9

Right-of-use        411,722,761.6
                                               2.38% 393,054,180.95             2.87%      -0.49%
assets                             6

                                                                                                     This is mainly due to the new trade
Short-term         1,806,901,201.                       1,015,117,910.
                                              10.44%                            7.42%       3.02% financing (U.S. dollar), which has a
borrowings                         39                              75
                                                                                                     greater advantage of U.S. dollar


                                                                                                                                             54
                                                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                                                                                         interest rate compared with RMB
                                                                                                         interest rate and can effectively hedge
                                                                                                         the company's exchange rate risk.

Contractual
                     91,235,951.19               0.53% 72,490,372.55               0.53%         0.00%
Liabilities

                                                                                                         This is mainly due to the new merger
Long-term            1,015,445,732.
                                                 5.87% 509,555,882.91              3.73%         2.14% and acquisition loans in the current
borrowings                        07
                                                                                                         period.

                     289,196,511.0
Lease obligations                                1.67% 337,599,418.27              2.47%        -0.80%
                                     2

High percentage of foreign assets
√ Applicable □ Not Applicable

                                                                                                                         Foreign
                                                                                      Control                                          Whether
                                                                                                                        assets as a
                                                                                    measures to                                        there is a
    Asset        Reasons for                                        Operating                                         percentage of
                                  Asset Size         Location                      safeguard the      Earnings                        significant
   specifics      formation                                           Model                                                the
                                                                                    security of                                          risk of
                                                                                                                       company's
                                                                                       assets                                         impairment
                                                                                                                        net assets

                                                                                   Financial
Lista Holding                                                                      monitoring,
                Equity         231.5341mill                        Independent
AG 100%                                            Switzerland                     commissioni Profitable                     2.14% No
                acquisition    ion                                 accounting
shareholding                                                                       ng external
                                                                                   audit

Arrow                                                                              Financial
Fastener                                                                           monitoring,
                Equity            369.4661                         Independent
Co.,LLC                                            United States                   commissioni Profitable                     3.42% No
                acquisition    million                             accounting
100%                                                                               ng external
shareholding                                                                       audit


2. Assets and liabilities measured at fair value

√ Applicable □ Not Applicable
                                                                                                                                         Unit: Yuan

                                     Gains or       Accumulated
                                                                     Impairment
                                     losses on        fair value                       Purchase        Amount sold
                    Opening                                            charged                                              Other        Closing
     Item                          changes in          changes                        amount for         during the
                    balance                                           during the                                           changes       balance
                                  fair value for     included in                       the period          period
                                                                        period
                                   the period           equity

Financial
Assets

1. Financial    27,191,411.52                                                                            27,022,757.5


                                                                                                                                                    55
                                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

assets held for                                                                                       0
trading
(excluding
derivative
financial
assets)

2. Derivative
                                   -31,447,528.9                                                                      4,330,070.0
financial         36,027,480.86
                                              3                                                                                 0
assets

3. Other debt                                                                                                         9,227,687.7
                      532,386.17 8,814,958.09
investments                                                                                                                     5

Subtotal
                                   -22,632,570.8                                          27,022,757.5                13,557,757.
financial         63,751,278.55
                                              4                                                       0                        75
assets

Total of the                       -22,632,570.8                                          27,022,757.5                13,557,757.
                  63,751,278.55
above                                         4                                                       0                        75

Financial
                            0.00    -978,031.91                                                                       978,031.91
liabilities

Other changes
Whether there were any significant changes in the measurement attributes of the Company's major assets during the reporting period
□ Yes        √ No


3. Restricted rights of assets as of the end of the reporting period

                 Item                  Carrying value at the end of the                    Restricted Reasons
                                                   period
Monetary Funds                                              27,725,700.00 Bank Acceptance Deposit
Monetary Funds                                               2,295,252.00 Margin for forward exchange settlement
Monetary Funds                                               1,975,140.00 Customs deposit
Monetary Funds                                                 492,906.98 Project performance bond
Monetary Funds                                                  32,000.00 ETC margin
Fixed Assets                                                29,720,650.63 For the opening of bankers' acceptances
Fixed Assets                                                10,873,242.70 Used as collateral for bank loans
Intangible assets                                            2,110,603.58 For the opening of bankers' acceptances
Intangible assets                                            1,483,459.51 Used as collateral for bank loans
100.00% equity interest in                               388,146,927.39 Pledge for bank loan
Arrow Fastener Co., LLC
[Note]
100.00% equity interest in                               205,959,077.97 Pledge for bank loan
Geelong Orchid Holding
Limited [Note]


                                                                                                                                56
                                                                             Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


                   Total                                670,814,960.76
[Note] 100.00% equity interest in Arrow Fastener Co., LLC is the net assets of Arrow Fastener Co., LLC at the end of
the reporting period;100.00% equity interest in Geelong Orchid Holding Limited is the net assets of Geelong Orchid
Holding Limited at the end of the reporting period.

VII. Analysis of Investment Status

1. Overall situation

√ Applicable □ Not Applicable

    Amount invested in the reporting period             Investment amount in the same period of
                                                                                                                             Change range
                       (yuan)                                    the previous year (yuan)

                                 1,123,031,335.02                                      540,855,823.95                                                107.64%


2. Significant equity investments acquired during the reporting period

√ Applicable □ Not Applicable
                                                                                                                                                     Unit: Yuan

                                                                                                                      Profit
 Name                                                                                           Progres
                                                                                                                       and     Whethe
     of                                                                                         s as of                                   Date of Disclos
              Main Investm Investm Shareh Fundin                           Investm                         Expecte loss on      r it is
investe                                                          Partner              Product        the                                  disclos          ure
           busines         ent     ent        olding      g                  ent                              d      investm involve
     e                                                              s                  Type     balance                                   ure (if         Index
               s      Method amount           ratio    Sources              Term                           revenue ents for d in a
compan                                                                                           sheet                                     any)       (if any)
                                                                                                                       the     lawsuit
     y                                                                                           date
                                                                                                                     period

                                                                                                                                                      Announ
                                                                                      Long-te Already
          Professi                                                                                                                                    cement
                                  243,41                                              rm        complet                                   June
          onal        Acquisi                 100.00 Own                   Perman                          1,397,1 1,397,1                            number
BeA                               8,722.1                        None                 equity    ed                             No         03,
          Fastene tions                              % funds               ent                               00.57     00.57                          :
                                         0                                            investm acquisit                                    2021
          r Tools                                                                                                                                     2021-0
                                                                                      ents      ion
                                                                                                                                                      57

                                                       Raise
                                                       $13,49                                                                                         Announ
                                                                                      Long-te Already
                                                       4,200,0                                                                                        cement
          Toolbo                  794,23                                              rm        complet
Geelon                Acquisi                 100.00 00, the               Perman                          -19,877 -19,877                July 03, number
          x                       6,994.5                        None                 equity    ed                             No
g                     tions                          % remaini             ent                             ,804.61 ,804.61                2021        :
          cabinet                        0                                            investm acquisit
                                                       ng part                                                                                        2021-0
                                                                                      ents      ion
                                                       is own                                                                                         68
                                                       funds

                                  1,037,6
                                                                                                           -18,480 -18,480
Total          --          --     55,716.       --        --       --            --        --        --                             --          --         --
                                                                                                           ,704.04 ,704.04
                                         60



                                                                                                                                                                 57
                                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

3. Significant non-equity investments in progress during the reporting period

□ Applicable √ Not Applicable


4. Investment in financial assets

(1) Portfolio investments

√ Applicable □ Not Applicable
                                                                                                                                        Unit: Yuan

                                                               Gains or Accumu
                                                                losses      lated                                  Carryin
                                           Account                                   Purchas Amount Profit or
 Variety                                                         on         fair                                   g value Account
                       Stock   Initial       ing     Opening                            e      sold     loss for
   of        Stock                                             changes     value                                   at the      ing      Funding
                       short   investm measure        book                           amount during        the
securitie    Code                                               in fair changes                                    end of account sources
                       name    ent cost     ment      value                          for the    the     reportin
    s                                                           value included                                       the        s
                                            model                                    period    period g period
                                                               for the       in                                    period
                                                               period      equity

                                           Fair                                                                              Financia
            Isin:US
                      ZOOML 39,592, value            20,494,                                   20,312, 599,191               l assets Own
Bonds       Y9896R                                                                                                    0.00
                      IOM         347.31 measure      906.65                                   601.90        .32             held for funds
            AB79
                                           ment                                                                              trading

                                           Fair                                                                              Financia
            Isin:XS
                      NEW      13,937, value         6,696,5                                   6,710,1 193,580               l assets Own
Bonds       183936                                                                                                    0.00
                      METRO       100.21 measure       04.87                                    55.60        .36             held for funds
            8831
                                           ment                                                                              trading

                               53,529,               27,191,                                   27,022, 792,771
Total                                         --                  0.00        0.00      0.00                          0.00      --         --
                                  447.52              411.52                                   757.50        .68

Date of disclosure of
announcement of
shareholders' meeting for
approval of securities
investment

Date of disclosure of
announcement of
shareholders' meeting for
approval of securities
investment (if any)


(2) Investment in derivatives

√ Applicable □ Not Applicable



                                                                                                                                                58
                                                                              Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                                                                                                                           Unit:10,000 yuan

                                                                                                                                           Investm
                                                                                                                                              ent
                                                                                                                                            amount
                                                                                                                                                       Actua
                                                                                                                                             at the
                                                                                                                                                         l
                                            Initial                                                                                         end of
                                                                                                                                                       amou
                                           investm                                           Amount                  Amount                   the
Name of                                                                                                 Amount                                         nt of
                                Types of     ent                                             purchas                    of      End of      period
derivati            Whether                                                     Opening                   sold                                         gain
                                Derivativ amount                                               ed                    provisio period          as a
  ve       Affiliati related                                Start                investm                during                                           or
                                   es         of                     End date                during                   n for     investm percenta
investm      ons    transacti                               Date                   ent                    the                                           loss
                                Investme derivati                                              the                   impairm      ent      ge of the
  ent                 ons                                                        amount                 reportin                                        for
                                   nts        ve                                             reportin                 ent (if   amount Compan
operator                                                                                                g period                                        the
                                           investm                                           g period                 any)                  y's net
                                                                                                                                                       report
                                             ent                                                                                           assets at
                                                                                                                                                        ing
                                                                                                                                            the end
                                                                                                                                                       period
                                                                                                                                             of the
                                                                                                                                            reportin
                                                                                                                                           g period

                                Forward                   Februar Februar
                                                                                                                                                       174.8
Banks      None     No          foreign     8,425.2 y 21,            y 25,      1,304.98                1,304.98                             0.00%
                                                                                                                                                               2
                                exchange                  2020       2021

                                Forward
                                           12,836.8 May 04, May 07,                                                                                    684.4
Banks      None     No          foreign                                          6,524.9                 6,524.9                             0.00%
                                                      8 2020         2021                                                                                      5
                                exchange

                                Forward                   Septemb Septemb
                                           10,896.1                             10,439.8                10,439.8                                       618.3
Banks      None     No          foreign                   er 24,     er 28,                                                                  0.00%
                                                      6                                  4                       4                                             2
                                exchange                  2020       2021

                                Forward                   Septemb Septemb
                                                                                                                                                       268.6
Banks      None     No          foreign    3,405.05 er 09,           er 10,     3,262.45                3,262.45                             0.00%
                                                                                                                                                               6
                                exchange                  2020       2021

                                Forward                   Septemb Septemb
Banks      None     No          foreign    13,620.2 er 25,           er 29th, 13,049.8                  13,049.8                             0.00%
                                exchange                  2020       2021

                                Forward
                                                          March      March
Banks      None     No          foreign    3,285.65                                          3,285.65                           3,187.85     0.29%
                                                          08, 2021 10, 2022
                                exchange

                                Forward                              July
                                                          March
Banks      None     No          foreign    3,285.65                  23rd,                   3,285.65 3,285.65                               0.00% 70.39
                                                          26, 2021
                                exchange                             2021

                                Forward                   March      July
Banks      None     No                     3,285.65                                          3,285.65 3,285.65                               0.00% 75.88
                                foreign                   29th,      28th,



                                                                                                                                                               59
                                                              Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                    exchange              2021       2021

                    Forward                          Decemb
                               22,610.3 June 17,                           22,610.3 22,610.3                      147.2
Banks   None   No   foreign                          er 31,                                               0.00%
                                      5 2021                                     5          5                         1
                    exchange                         2021

                    Forward               July
                                                     October
Banks   None   No   foreign     6,460.2 28th,                               6,460.2 6,460.2               0.00% 82.21
                                                     29, 2021
                    exchange              2021

                    Forward               Septemb Novemb
                               33,724.0                                    33,724.0 33,724.0                      -307.5
Banks   None   No   foreign               er 24,     er 03,                                               0.00%
                                      8                                          8          8                         3
                    exchange              2021       2021

                                          Septemb Septemb
Banks   None   No   Swaps       100.04 er 28,        er 28,                 100.04     100.04             0.00% 99.56
                                          2021       2021

                                          October October
Banks   None   No   Swaps          91.5                                        91.5       91.5            0.00% 91.06
                                          11, 2021 11, 2021

                                          October October                                                         1,210.
Banks   None   No   Swaps         1,216                                      1,216      1,216             0.00%
                                          11, 2021 11, 2021                                                          19

                                          October October                                                         168.5
Banks   None   No   Swaps         169.4                                      169.4      169.4             0.00%
                                          20, 2021 20, 2021                                                           9

                                          October October
Banks   None   No   Swaps         3,195                                      3,195      3,195             0.00% 53.74
                                          25, 2021 25, 2021

                                          October October
Banks   None   No   Swaps         6,390                                      6,390      6,390             0.00% 81.61
                                          25, 2021 25, 2021

                                          October October                                                         183.1
Banks   None   No   Swaps       12,760                                      12,760     12,760             0.00%
                                          27, 2021 27, 2021                                                           2

                    Forward               Septemb Decemb
                                                                                                                  457.2
Banks   None   No   foreign     6,810.1 er 18,       er 31,      6,524.9               6,524.9            0.00%
                                                                                                                      1
                    exchange              2020       2021

                    Forward               Septemb Decemb
                                                                                                                  951.5
Banks   None   No   foreign    13,620.2 er 21,       er 31,     13,049.8              13,049.8            0.00%
                                                                                                                      6
                    exchange              2020       2021

                    Forward               Septemb Decemb
                                                                                                                  989.4
Banks   None   No   foreign    13,620.2 er 23,       er 31,     13,049.8              13,049.8            0.00%
                                                                                                                      8
                    exchange              2020       2021

                    Forward                          Decemb
                                          January                                                                 757.1
Banks   None   No   foreign    13,142.6              er 31,                13,142.6 13,142.6              0.00%
                                          13, 2021                                                                    2
                    exchange                         2021

                    Forward                          Decemb
                                          January                                                                 443.2
Banks   None   No   foreign     6,571.3              er 31,                 6,571.3 6,571.3               0.00%
                                          14, 2021                                                                    4
                    exchange                         2021


                                                                                                                      60
                                                              Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


                    Forward                          Decemb
                                          January                                                                  425.2
Banks   None   No   foreign     6,571.3              er 31,              6,571.3 6,571.3                   0.00%
                                          16, 2021                                                                    5
                    exchange                         2021

                    Forward               January Decemb
                                                                                                                   394.0
Banks   None   No   foreign     6,571.3 23rd,        er 31,              6,571.3 6,571.3                   0.00%
                                                                                                                      2
                    exchange              2021       2021

                    Forward                          Decemb
                                          January                                                                  378.1
Banks   None   No   foreign     6,571.3              er 31,              6,571.3 6,571.3                   0.00%
                                          26, 2021                                                                    8
                    exchange                         2021

                    Forward                          Decemb
                                          January                                                                  386.4
Banks   None   No   foreign     6,571.3              er 31,              6,571.3 6,571.3                   0.00%
                                          27, 2021                                                                    7
                    exchange                         2021

                    Forward                          Decemb
                                          January                                                                  440.1
Banks   None   No   foreign     6,571.3              er 31,              6,571.3 6,571.3                   0.00%
                                          28, 2021                                                                    1
                    exchange                         2021

                    Forward                          Novemb
                                          January                                                                  368.2
Banks   None   No   foreign     6,571.3              er 15,              6,571.3 6,571.3                   0.00%
                                          30, 2021                                                                    9
                    exchange                         2021

                    Forward                          Decemb
                                          January
Banks   None   No   foreign    3,285.65              er 07,             3,285.65 3,285.65                  0.00% 150.8
                                          30, 2021
                    exchange                         2021

                    Forward               Februar Decemb
                                                                                                                   155.8
Banks   None   No   foreign    3,285.65 y 09,        er 13,             3,285.65 3,285.65                  0.00%
                                                                                                                      5
                    exchange              2021       2021

                    Forward               Februar Decemb
Banks   None   No   foreign    3,285.65 y 11,        er 07,             3,285.65 3,285.65                  0.00% 154.3
                    exchange              2021       2021

                    Forward               Februar Decemb
Banks   None   No   foreign     6,571.3 y 14,        er 07,              6,571.3 6,571.3                   0.00% 307.6
                    exchange              2021       2021

                    Forward                          Decemb
                                          January
Banks   None   No   foreign     6,571.3              er 21,              6,571.3 6,571.3                   0.00% 302.9
                                          01, 2021
                    exchange                         2021

                    Forward                          Decemb
                                          January
Banks   None   No   foreign     6,571.3              er 21,              6,571.3 6,571.3                   0.00% 299.1
                                          01, 2021
                    exchange                         2021

                    Forward               Februar
                                                     March
Banks   None   No   foreign    19,713.9 y 25,                           19,713.9 19,713.9                  0.00%    87.6
                                                     10, 2021
                    exchange              2021

Banks   None   No   Forward 12,909.2 June 21, Decemb                    12,909.2 5,258.36       7,650.84   0.71% 236.7



                                                                                                                      61
                                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                             foreign               2021       er 31,                                                           6
                             exchange                         2021

                             Forward                          Decemb
                                                   June 25,                                                                 108.4
Banks     None     No        foreign     6,474.4              er 31,                 6,474.4 2,011.41    4,462.99   0.41%
                                                   2021                                                                        3
                             exchange                         2021

                             Forward
                                                   August Aug. 18,
Banks     None     No        foreign    7,077.18                                    7,077.18 7,077.18               0.00% 21.67
                                                   15, 2021 2021
                             exchange

                             Forward                          Novemb
                                                   October
Banks     None     No        foreign    6,421.38              er 01,                6,421.38 6,421.38               0.00%    6.33
                                                   31, 2021
                             exchange                         2021

                                                   Februar Februar
Banks     None     No        Options               y 09,      y 23rd,                                               0.00%    17.1
                                                   2021       2021

                                                   March      March
Banks     None     No        Options                                                                                0.00%    9.28
                                                   01, 2021 10, 2021

                             Forward                          July
                                                   January
Banks     None     No        foreign    3,605.69              22nd,                 3,605.69 3,605.69               0.00% 65.64
                                                   01, 2021
                             exchange                         2021

                             Forward                          July
                                                   January                                                                  121.9
Banks     None     No        foreign    5,572.43              28th,                 5,572.43 5,572.43               0.00%
                                                   01, 2021                                                                    9
                             exchange                         2021

                             Forward               July       Decemb
Banks     None     No        foreign    7,106.22 22nd,        er 21,                7,106.22 7,106.22               0.00% 42.51
                             exchange              2021       2021

                             Forward               July       Decemb
Banks     None     No        foreign     3,230.1 22nd,        er 28,                 3,230.1 3,230.1                0.00% 17.84
                             exchange              2021       2021

                                        340,630.                         67,206.4 257,396. 309,203.      15,301.6           11,79
Total                                                 --         --                                                 1.41%
                                             56                                 7        57       56           8             8.91

Derivatives Investment Funding
                                        Own funds
Sources

Involvement in lawsuits (e.g.
                                        Not Applicable
Applicable)

Date of disclosure of board of
directors' announcement for approval April 15, 2021
of derivative investments (if any)

Date of disclosure of announcement
of shareholders' meeting for approval
of derivative investment (if any)


                                                                                                                               62
                                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


Risk analysis of derivative positions
and description of control measures
                                             To prevent exchange rate risk, the Company and its subsidiaries conduct derivative business.
for the reporting period (including but
                                             The Company and its subsidiaries strictly implement the Foreign Exchange Hedging
not limited to market risk, liquidity
                                             Business Management System.
risk, credit risk, operational risk, legal
risk, etc.)

Changes in market prices or product
fair values of invested derivatives
during the reporting period, and the         The fair value floating gain on invested derivatives at the beginning of the reporting period
analysis of the fair value of                was RMB31,510,700 and the fair value floating gain on derivatives at the end of the
derivatives should disclose the              reporting period was RMB-31,447,500.
specific methods used and the setting
of relevant assumptions and
parameters

Explanation of whether the
accounting policy and specific
principles of accounting for
derivatives of the company in the            No change
reporting period have changed
significantly compared with the
previous reporting period

                                             It is necessary for the Company to carry out foreign exchange derivative transactions in line
                                             with the actual operation needs of the Company, which can reduce the impact of exchange
Special opinion of independent               rate fluctuations on the Company's profit to a certain extent. The Company has established
directors on the company's derivative the “Foreign Exchange Derivatives Trading Business Management System” and effective
investment and risk control                  risk control measures in accordance with the requirements of relevant laws and regulations.
                                             We agree with the Company's proposal to carry out foreign exchange derivative transactions
                                             for the year 2021.


5. Use of proceeds

√ Applicable □ Not Applicable


(1) Overall use of proceeds

√ Applicable □ Not Applicable
                                                                                                                             Unit:10,000 yuan

                                             Total                   Total                   Proportion                            Amount of
                                                                                  Total
                                        amount of        Total     amount of                 of the total               Use and      funds
                              Total                                             cumulative                   Total
  Year of     Method of                  proceeds accumulat          funds                   amount of                 destination raised that
                             Funds                                              change in                   unused
  raising      raising                       used      ed use of     raised                   proceeds                 of unused have been
                             Raised                                               use of                    proceeds
                                        during the     proceeds    during the                 from the                  proceeds     idle for
                                                                                proceeds
                                             period                reporting                 cumulative                            more than


                                                                                                                                                63
                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                                               period that                   change of                                  two years
                                                                changed                          use
                                                                   use

                                                                                                                         Deposited
            Issuance                                                                                                     in the
            of                                                                                                           special
2020 年                      97,260 13,910.15 53,730.92 13,494.42 13,494.42                      13.87% 44,986.46                                0
            convertibl                                                                                                   account
            e bonds                                                                                                      for fund
                                                                                                                         raising

Total             --         97,260 13,910.15 53,730.92 13,494.42 13,494.42                      13.87% 44,986.46             --                 0

                                                Description of the overall use of proceeds

        Approved by the China Securities Regulatory Commission under license No. 2656 [2019] and agreed by the Shenzhen
Stock Exchange, the Company is permitted to issue convertible bonds in public not exceeding RMB 972,600,000.00. The lead
underwriter CITIC Construction Investment Securities Co., Ltd. will adopt the preferential placement to the original shareholders
of the Company, and the balance after the preferential placement by the original shareholders (including the part of the original
shareholders' waiver of the preferential placement) will be issued to public investors through online, and the part of the issue
subscription amount less than RMB972,600,000.00 will be underwritten by the lead underwriter. The actual public offering of
9,726,000 convertible bonds with par value of RMB100.00 each, raising a total of RMB972,600,000.00, after deducting
underwriting and sponsorship expenses of RMB5,188,679.25 (excluding tax), amounted to RMB967,411,320.75, which has been
remitted to the Company's custody account of the proceeds by the lead underwriter, CITIC Capital Securities Co., Ltd. After
deducting the underwriting and sponsorship fees, audit and capital verification fees, attorney's fees, credit rating fees, information
disclosure fees for the issue, lottery fees and bond issue registration fees and other external expenses directly related to the issue of
convertible bonds of RMB2,289,867.92, the net proceeds raised by the Company amounted to RMB965,121,452.83. The
above-mentioned availability of proceeds was verified by Tianjian Certified Public Accountants (Special Ordinary Partnership),
which issued the Verification Report (Pan-China Verification [2020] No. 244).
        As of December 31, 2021, the Company has invested a total of RMB 537,309,200 in the fund-raising funds, with net
interest income of RMB18,123,500 and foreign exchange gain/loss of RMB-1,900,400 on the fund-raising funds in fiscal year
2021, and the balance of the fund-raising account was RMB449,864,600 as of December 31, 2021.




(2) Commitment of fund-raising projects

√ Applicable □ Not Applicable
                                                                                                                                   Unit:10,000 yuan

                          Whether
                                                                                     Investme Date the
                             the       Total                Amount Cumulati                                    Benefits                  Whether
                                                                                        nt         project
    Commitment of          project    committe Adjusted of input         ve input                              realized     Whether there is a
                                                                                     progress      reaches
investment projects and has been         d         total      in the     amount                                 in the      projected significan
                                                                                     as of the          its
 investment of excess     changed investme investme          current     as of the                              current     benefits     t change
                                                                                     end of the intended
          funds           (includin     nt of      nt(1)    reporting end of the                               reporting     are met in project
                                                                                     period (3) useable
                          g partial proceeds                 period      period(2)                              period                  feasibility
                                                                                     = (2)/(1)         state
                          change)



                                                                                                                                                 64
                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


Committed Investment Projects

1. Laser measuring
                                                                                           Decembe                Not
instrument and smart
                          No              20,426      20,426 5,472.45   8,594.2   42.07% r 31,                    Applicabl No
home production base
                                                                                           2022                   e
construction project

2. Toolbox cabinet                                                                                                Not
production base           Yes             26,776 13,281.58 2,556.91 13,281.58 100.00%                             Applicabl Yes
construction project                                                                                              e

3. Intelligent storage                                                                     Decembe                Not
and logistics base        No            22,542.15 22,542.15    495.84 7,470.19    33.14% r 31,                    Applicabl No
construction project                                                                       2022                   e

                                                                                           Decembe                Not
4. R&D center
                          No                7,768      7,768    12.36     12.36    0.16% r 31,                    Applicabl No
construction project
                                                                                           2022                   e

                                                                                                                  Not
5. Supplemental
                          No              19,000      19,000             19,000 100.00%                           Applicabl No
working capital
                                                                                                                  e

6.Capital increase in
subsidiary and
acquisition of 100%
                                                                                                                  Not
equity interest in                                                                         July 02,
                          No                        13,494.42 5,372.59 5,372.59   39.81%              -1,987.78 Applicabl No
Geelong Holdings                                                                           2021
                                                                                                                  e
Limited held through
Geelong Orchid
Holdings Ltd

Subtotal of committed
                                --      96,512.15 96,512.15 13,910.15 53,730.92    --          --     -1,987.78         --        --
investment projects

Investment of overraised funds

Not Applicable

Total                           --      96,512.15 96,512.15 13,910.15 53,730.92    --          --     -1,987.78         --        --

                          I. The reasons why the company's fund-raising investment projects did not reach the planned schedule are
                          as follows:
                          1. The main body of the laser measuring instrument and smart home production base construction project
                          is the wholly-owned secondary subsidiary Haining GreatStar Intelligent Equipment Co. Ltd. and the
Failure to meet planned
                          wholly-owned subsidiary Vietnam GreatStar Intelligence Co., Ltd. The implementation site is located in
progress or projected
                          Lianhang Economic and Technological Development Zone, Haining City, Zhejiang Province and Nam
earnings and reasons
                          Cameo Industrial Zone, Shuiyuan County, Hai Phong City, Vietnam, with the original construction period
(by specific project)
                          of two years and planned to be completed by the end of December 2020. The company added a new
                          implementation subject Vietnam GreatStar Intelligence Co., Ltd. in the process of project implementation,
                          which, together with the sudden outbreak of the COVID-19, had a certain impact on the company's project
                          construction progress and delayed the completion time of the project.The Company intends to add


                                                                                                                                       65
                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                         Hangzhou GreatStar Tools Co., Ltd, a wholly-owned subsidiary, as one of the implementation subjects of
                         the Project, add the plot No. 26 of Hangzheng Gongzhuo (2020) in Jianggan District, Hangzhou, as one of
                         the implementation sites of the Project, and simultaneously adjust the investment structure of the Project
                         and extend the implementation period to December 31, 2022.
                         2. The main body of the implementation of the intelligent storage and logistics base construction project is
                         a wholly-owned subsidiary, Haining GreatStar Intelligent Equipment Co., Ltd., which is located in
                         Lianhang Economic and Technological Development Zone, Haining City, Zhejiang Province, with the
                         original construction period of two years and planned to be completed by the end of December 2020.
                         Due to the impact of the COVID-19, the project has been affected to varying degrees in the process of
                         infrastructure construction, logistics and transportation, equipment installation and commissioning,
                         resulting in a delay in the project implementation schedule compared to the plan. In order to ensure the
                         smooth implementation of the project, considering the development plan of the company and the actual
                         construction situation of the project, the company intends to extend the implementation period of the
                         project to December 31, 2022 under the condition that the main body of the project, total investment and
                         construction scale of the project remains unchanged.
                         3. The main body of the R&D center construction project is the wholly-owned subsidiary Hangzhou
                         United Machinery Co., Ltd, which is located at the northwest corner of the intersection of Hongpu Road
                         and Jiuheng Road, Jiubao Street, Jianggan District, Hangzhou.The original construction period of the
                         project was 3 years, and the procurement, installation and commissioning of the equipment were planned
                         to be completed by December 31, 2020, and the recruitment and training of personnel were completed by
                         the end of 2021. In early 2020, the sudden outbreak of the COVID-19 had a certain impact on the
                         construction schedule of the project, resulting in a delay in the implementation schedule of the project
                         compared to the original plan. In order to better integrate the company's existing innovative research and
                         development resources and better support the development of the company's own brand and cross-border
                         e-commerce business, the company intends to change the implementation subject of the project to
                         Hangzhou GreatStar Technology Co., Ltd. and adjusts the investment structure, and extends the
                         implementation period to December 31, 2022.
                         II. The proceeds used for the toolbox cabinet production base construction project have been invested in
                         the construction of the toolbox cabinet production base of Haining GreatStar Intelligent Equipment Co.,
                         Ltd. and Thailand New Earth Co.,Ltd(renamed as Geelong (Thailand) Co .,Ltd), which has not yet
                         generated benefits as of the end of the period.

                         The sudden outbreak of the COVID-19 has a certain impact on the construction progress of the company's
                         toolbox cabinet production base construction project, which has delayed the completion time node of the
                         original investment project. According to the company's long-term strategic planning and current
                         development needs, in order to improve the efficiency of the use of funds raised, to enhance the company's
                         existing production capacity and supply capacity more quickly, and to better meet customer demand, the
Description of           company's seventh board meeting of the fifth session and the 2020 annual general meeting of shareholders
significant changes in   considered and approved that the Company used the proceeds from the toolbox cabinet production base
project feasibility      construction project of RMB 134,944,200 that had not been invested as of April 5, 2021 for the acquisition
                         of 100% equity interest in Geelong Holdings Limited held through Geelong Orchid Holdings Ltd, and the
                         original toolbox cabinet production base construction project was terminated. In order to facilitate the
                         smooth implementation of the equity acquisition and reduce transaction costs, the Company held the tenth
                         session of the fifth board of directors meeting on June 21, 2021, and considered and passed the "Proposal
                         to Change the Implementation Subject of Part of the Fund Raising Project", agreeing that the Company

                                                                                                                                        66
                                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                         changes the implementation subject of the equity acquisition project, and the implementation subject was
                         changed from the Company to Hong Kong GreatStar International Limited, a wholly-owned subsidiary of
                         the Company.

Amount, purpose and      Not Applicable
progress of use of
over-issued funds

                         Applicable

                         During the reporting period

                         On July 22, 2020, the Company held the thirty-seventh meeting of the fourth session of the Board of
                         Directors to consider and approve the "Resolution on Increasing the Implementation Subject and Location
                         of Part of the Fund Raising Project and Using Part of the Fund Raising to Increase the Capital of a
                         Wholly-Owned Subsidiary": 1. Agree to add a wholly-owned subsidiary, Vietnam GreatStar Intelligence
                         Co., Ltd. as one of the project implementation subjects for the laser measuring instrument and smart home
                         production base construction project, and add Nam Cambridge Industrial Zone, Shuiyuan County, Hai
                         Phong City, Vietnam as one of the project implementation sites;2. Agree to add wholly-owned subsidiary
                         Thailand New Earth Co., Ltd.(renamed as Geelong (Thailand) Co .,Ltd) as one of the project
                         implementation subjects for the tool box cabinet production base construction project and add No. 54/5,
Change of location for
                         Mayangpong Township 1, Baudan District, Rayong Province, Thailand as one of the project
the implementation of
                         implementation sites.
the fund-raising
investment project       On April 14, 2021, the Company held the eighth meeting of the fifth session of the Board of Directors to
                         consider and approve the "Resolution on Changing the Implementation Subject and Location of the
                         Project, Adjusting the Investment Structure of the Project and Extending the Implementation Period": 1.
                         Agree to add Hangzhou GreatStar Tools Co., Ltd, a wholly-owned subsidiary, as one of the implementation
                         subjects of the Project, add the plot No. 26 of Hangzheng Gongzhuo (2020) in Jianggan District,
                         Hangzhou, as one of the implementation sites of the Project;2. Agree that the implementation subject of
                         R&D center construction project changed to Hangzhou GreatStar Technology Co.,Ltd.
                         On June 21, 2021, the Company held the tenth meeting of the fifth session of the Board of Directors and
                         considered and passed the "Resolution to Change the Implementation Subject of Part of the Fund Raising
                         Project", agreeing that the implementation subject of the Company's acquisition of 100% equity interest in
                         Geelong Holdings Limited held through Geelong Orchid Holdings Ltd be changed from the Company to
                         Hong Kong GreatStar International Limited, a wholly-owned subsidiary of the Company.

Adjustment of the        Not Applicable
implementation mode
of the fund-raising
investment projects

                         Applicable

                         On July 22, 2020, the Company held the 37th meeting of the 4th Session of the Board of Directors and
Prior investment and
                         considered and passed the " Resolution on the Replacement of Self-financing Funds Pre-invested in the
replacement of funds
                         Fund Raising Project with the Fund Raising Funds".
raised for investment
                         1. Agreed that the Company shall replace the self-financing funds pre-invested in the fund-raising project
projects
                         with the fund-raising funds of RMB 148,254,900.
                         2. Agreed that the issue expenses paid by the Company with its own funds are RMB 1,723,800, which will


                                                                                                                                      67
                                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                             be replaced with the proceeds.

Temporary                    Not Applicable
replenishment of
working capital with
idle proceeds

Amount and reasons           Not Applicable
for the balance of
proceeds from project
implementation

                             As of the end of the period, the unused fundraising funds amounted to RMB 449,864,600 (including the
The use and purpose of
                             accumulated interest received from bank deposits net of bank charges of RMB 24,387,300), which were
unused proceeds
                             deposited in the special fundraising account.

Problems or other
circumstances in the
                             Not Applicable
use and disclosure of
proceeds


(3) Change of fund-raising projects

√ Applicable □ Not Applicable
                                                                                                                            Unit: 10,000 Yuan

                                                                                                                                     Whether
                                  Total
                                                              Actual                                                                 there is a
                                amount of       Actual                     Investment     Date the
                                                            cumulative                                  Benefits                    significant
                Correspondi proceeds to        amount                      progress as     project                   Whether the
                                                              amount                                   achieved                      change in
  Changed       ng original be invested invested in                        of the end    reaches its                  expected
                                                            invested as                                during this                        the
      items     commitmen         in the         this                        of the       intended                   benefits are
                                                            of the end                                 reporting                     feasibility
                  t items      project after   reporting                  period(3)=(      useable                    achieved
                                                              of the                                     period                          of the
                                   the          period                       2)/(1)         state
                                                            period(2)                                                               project after
                                change(1)
                                                                                                                                    the change

Capital
increase in
subsidiary
and             Toolbox
acquisition     cabinet
of 100%         production                                                               July                        Not
                                 13,494.42       5,372.59      5,372.59        39.81%                    -1,987.78                  No
equity          base                                                                     02,2021                     Applicable
interest in     construction
Geelong         project
Holdings
Limited held
through



                                                                                                                                                   68
                                                                    Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Geelong
Orchid
Holdings Ltd

Total               --         13,494.42      5,372.59      5,372.59        --            --         -1,987.78       --            --

                                           1. The sudden outbreak of COVID-19 had a certain impact on the construction progress of
                                           the company's toolbox cabinet production base construction project, which delayed the
                                           completion time node of the original investment project.According to the company's
                                           long-term strategic planning and the current stage of development needs, in order to
                                           improve the efficiency of the use of the funds raised, more quickly enhance the company's
                                           existing production capacity and supply capacity, to better meet customer demand, as
                                           approved by the seventh meeting of the fifth session of the board of directors and the 2020
                                           annual general meeting of the Company, the Company used the proceeds of RMB
                                           134,944,200 from the toolbox cabinet production base construction project that had not
                                           been invested as of April 5, 2021 to acquire 100% equity interest in Geelong Holdings
                                           Limited held through Geelong Orchid Holdings Ltd., and the original toolbox cabinet
                                           production base construction project was terminated. In order to promote the smooth
Description of reasons for changes,        implementation of the acquisition of equity and reduce transaction costs, the Company held
decision-making procedures and             the tenth meeting of the fifth session of the Board of Directors on 21 June 2021 and
information disclosure (by specific        considered and passed the " Resolution on Changing the Implementation Subject of Part of
project)                                   the Fund Raising Project", agreeing to change the Company's acquisition.
                                           2. The actual benefit of Geelong Orchid Holdings Ltd for the year 2021 is the net profit
                                           achieved by Geelong Orchid Holdings Ltd from July 2, 2021, the date of purchase to
                                           December 31, 2021. Due to the recurrence of the COVID-19 and the surge in the prices of
                                           upstream steel and other bulk materials, Geelong Orchid Holdings Ltd's shipping costs and
                                           prices of main materials have increased significantly, resulting in a decrease in gross profit
                                           margin and negative net profit in the second half of 2021.
                                           3. According to the equity acquisition agreement, the acquisition transaction amounted to
                                           RMB 128,245,000, and the funds required for this transaction were self-financed by the
                                           Company, of which RMB 134,944,200 was used from the proceeds. The transaction price
                                           was paid in cash by Hong Kong GreatStar International Limited in stages. As of the date of
                                           this report, the Company has completed the payment of the equity transfer in accordance
                                           with the agreement, and the investment progress of this project has reached 100%.

Failure to meet planned progress or
projected benefits and reasons (by         Not Applicable
specific project)

Description of significant changes in
                                           Not Applicable
the feasibility of the changed project


VIII. Significant Asset and Equity Sales

1. Sale of Significant Assets

□ Applicable √ Not Applicable


                                                                                                                                            69
                                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

The Company did not sell any significant assets during the reporting period.


2. Sale of Significant Equity Interests

□ Applicable √ Not Applicable


IX. Analysis of Major Holding Companies and Joint Stock Companies

√ Applicable □ Not Applicable
Major subsidiaries and joint stock companies with an impact of 10% or more on the Company’s net profit
Unit: CNY

  Company                                          Registered                                  Operating       Operating
               Company Type Main Business                       Total Assets    Net Assets                                     Net Profit
    Name                                             Capital                                      Income        Profit

                                                                549,984,017. 369,466,126. 664,664,008. 67,783,125.8 50,062,384.7
Arrow          Subsidiaries       Manufacturing --
                                                                41             39            95            3               4

GreatStar                                                       2,493,817,61 392,604,604. 1,406,783,71 63,839,281.7 120,455,192.
               Subsidiaries       Manufacturing --
Europe AG                                                       7.75           75            2.70          3               34

Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not Applicable

                                                   Mode of acquisition and disposal of        Impact on overall production operations
              Company Name
                                                 subsidiaries during the reporting period                   and results

BeA GmbH                                        Established                                  No significant impact

Hongkong Shop-Vac International Co.,
                                                Established                                  No significant impact
Limited

SK Hand Tool,LLC                                Established                                  No significant impact

Shenzhen Workpro Technology Co., Ltd.           Established                                  No significant impact

GreatStar Industrial Vietnam Co., Ltd           Established                                  No significant impact

Hangzhou GreatStar Power Tools Co., Ltd. Established                                         No significant impact

Frontier Kitchen & Bath (Suzhou) Co.,
                                                Canceled                                     No significant impact
Ltd.

Hangzhou      GreatStar       Optoelectronics
                                                Canceled                                     No significant impact
Technology Co., Ltd.

Eudura Holding Limited                          Canceled                                     No significant impact

Description of major holding and joint stock companies


X. Information on Structured Subjects Controlled by the Company

□ Applicable √ Not Applicable




                                                                                                                                            70
                                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


XI. Prospects for the Future Development of the Company

     (I) Corporate Development Strategy
     The overall development strategy of the company is to focus on the main business, gain a foothold in China,
layout the world, and plan for the long term.
     Focusing on the main business means that the Company will continue to use the existing large supermarket
and e-commerce channels in Europe and the United States to focus on the main business of TOOLS as the core
product, while continuing to dispose of non-core business assets to recover cash and use it for the development of
the main business. The company will also rely on outbound M&A to develop non-hand tools including power
tools and outdoor products.
     Based in China, the company will rely on China as the core of the supply chain network in Southeast Asia
and the Chinese engineer dividend to dominate the current round of global supply chain division of labor in the
tool industry, continue to expand the leading position of the industry, lead the development of the international
tool industry, and gradually take over the current round of Europe and the United States in the future to create
customer demand as the core of the innovation economy era of industrial transfer.
     For global deployment, the company continues to focus on strengthening the construction of its own brand
service system in Europe and the United States and the layout of production capacity in Southeast Asia, select
foreign high-quality companies for industrial mergers and acquisitions integration, better access to international
resources and international markets, and gradually upgrade the company from an ODM company made in China
to an international OBM company that combines Chinese design, Asian manufacturing, and local services in
Europe and the United States.
     Finally, planning for the long term means that the company respects the century-long development history of
the tool industry, relies on the characteristics of stable cash flow in the field of consumer durables with a flat
growth rate, plans its own business and development path for the long term, gradually cultivates new business
growth points, and finally becomes a good company that creates long-term value for society with sound operation,
sustainable growth and healthy development.
     (II) Business Plan
     1. Overall business objectives
     The company’s basic strategy is to focus on the main business, gain a foothold in China, layout the world,
and plan for the long term, while actively responding to changes in the external environment and changing its
business focus at the right time to seize the rare strategic development opportunities in the next three years and
achieve leapfrog development. The company’s overall business goal in 2022 is to strive to achieve a 20%
year-on-year growth in its main business.
     2. Private brand development goals
     Private brand is the long-term stable core competitiveness of the company, the company will continue to
maintain investment in the promotion of own brand products, to ensure that the sales revenue of private brand
products in 2022 continues to increase, and strive to reach 40% of the revenue share.
     3. Cross-border e-commerce development goals
     Cross-border e-commerce is the core of the company’s strategy for sustained growth. The company will
actively integrate its internal advantageous resources, orderly increase the product categories and service capacity
of cross-border e-commerce, and continue to maintain a growth of over 50% in cross-border e-commerce business
in 2022.
     4. Power tool development goals
     Power tools as the company’s new business line after laser and box, will become the company’s future


                                                                                                                 71
                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

second growth curve. The company will integrate domestic high-quality lithium resources, orderly promote power
tool products with their own characteristics, and strive to achieve more than 50% growth in the power tool
business in 2022.
      (III) Possible Risks
      Based on the comprehensive analysis of the company’s external environment and the actual situation of the
enterprise, the main business risks faced by the company include:
      1. Risk of exchange rate fluctuation
      At present, the company’s operating revenue basically comes from the overseas market. If the RMB
exchange rate fluctuates widely, it will have certain impact on the company’s operating revenue. The majority of
the company’s main business orders are denominated in U.S. dollars, and fluctuations in the exchange rate of
RMB against the U.S. dollar directly affect the price competitiveness of the products, which will have an impact
on the company’s operating results. In this regard, the company will continue to strengthen its overseas layout and
settlement control to hedge and reduce the impact of exchange rate fluctuations on the company’s performance.
      2. Risk of rising raw material prices
      Recently, the company’s main raw material prices have been fluctuating, causing the company’s production
costs to fluctuate as well. Although the company’s production capacity is mainly outsourcing production and has
strong bargaining power with upstream outsourcing manufacturers, if raw material prices continue to rise, it may
still have a certain impact on the company’s profitability. In this regard, the company will continue to strengthen
procurement and cost control, establish strategic cooperative relationships with suppliers and sign long-term
agreements to absorb the risk of raw material price fluctuations; at the same time, continue to optimize the product
structure, strengthen the research and development of new products, rely on innovative products to determine
reasonable prices and maintain product gross margins.
      3. Risk of trade friction
      Currently, the United States is the largest single market for the company, and most of the company’s exports
to the United States are still subject to a 25% tariff, which has an adverse impact on the company’s development.
In response, the company will pay close attention to the international situation, continue to implement its
internationalization strategy, promote the construction of overseas manufacturing bases, cultivate overseas supply
chains, establish a global production capacity layout and supply chain system, and ensure the stable development
of the company’s business.
      4. Shipping cycle risk
      In the last 12 months, the global shipping market has seen a significant increase in shipping prices due to the
epidemic and capacity cycle. The majority of the company’s products need to be transported by sea to different
regions of the world, and the increase in shipping prices and the occasional lack of capacity will lead to certain
risks in the sales of the company’s products. In response, the company actively communicates with major
shipping companies around the world to lock in capacity and freight rates in advance to ensure that the company’s
business will not be adversely affected by fluctuations in shipping cycles.

XII. Reception of research, communication, interviews and other activities during the
reporting period

√ Applicable □ Not Applicable

                                                                                  The main
                     Reception                                                                      Index of the basic
 Reception Date                   Reception Mode Reception Type   Reception     content of the
                      Location                                                                   situation of the research
                                                                                 talk and the


                                                                                                                         72
                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                                                             information
                                                                                provided

                                                                        Explanation         of
                                                                        the       company’s Explanation           of      the
                                                        Institutional
                                                                        2020         annual company’s 2020 annual
                           Telephone                    investors,
January 26, 2021 Company                   Other                        results     forecast results       forecast       and
                           communication                individual
                                                                        and redemption redemption                           of
                                                        investors
                                                                        of       convertible convertible bonds
                                                                        bonds

                                                                        Explanation         of
                                                                        the       company’s Explanation           of      the
                                                        Institutional
                                                                        2020         annual company’s 2020 annual
                           Telephone                    investors,
January 27, 2021 Company                   Other                        results     forecast results       forecast       and
                           communication                individual
                                                                        and redemption redemption                           of
                                                        investors
                                                                        of       convertible convertible bonds
                                                                        bonds

                                                                        Explanation         of
                                                                        the       company’s Explanation           of      the
                                                        Institutional
                                                                        2020         annual company’s 2020 annual
                           Telephone                    investors,
January 28, 2021 Company                   Other                        results     forecast results       forecast       and
                           communication                individual
                                                                        and redemption redemption                           of
                                                        investors
                                                                        of       convertible convertible bonds
                                                                        bonds

                                                        Institutional   The company’s
                                                                                                 The   company’s         first
                           Telephone                    investors,      first        quarter
March 11, 2021 Company                     Other                                                 quarter           earnings
                           communication                individual      earnings forecast
                                                                                                 forecast notes
                                                        investors       notes

                                                        Institutional   The company’s
                                                                                                 The   company’s         first
                           Telephone                    investors,      first        quarter
March 12, 2021 Company                     Other                                                 quarter           earnings
                           communication                individual      earnings forecast
                                                                                                 forecast notes
                                                        investors       notes

                                                                                                 Record     of     Investor
                                                                                                 Relations Activities of
                                                                                                 Hangzhou Great Star
                                                                        The company’s Industrial Co., Ltd. (No.
                                                                        results            and 001         of          [2021])
April 19, 2021   Company   Other           Other        Other
                                                                        operations         for disclosed          on       the
                                                                        2020                     Shenzhen               Stock
                                                                                                 Exchange        Interactive
                                                                                                 (http://irm.cninfo.com.c
                                                                                                 n/)

April 26, 2021   Company   Telephone       Other        Institutional   Company’s               Company’s        FY2020


                                                                                                                             73
                                                     Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                             communication                investors,      FY2020 results, results, Q1 2021 results
                                                          individual      Q1 2021 results statement
                                                          investors       statement

                                                          Institutional   Company’s
                                                                                                Company’s      FY2020
                             Telephone                    investors,      FY2020 results,
April 27, 2021     Company                   Other                                              results, Q1 2021 results
                             communication                individual      Q1 2021 results
                                                                                                statement
                                                          investors       statement

                                                          Institutional   Company’s
                                                                                                Company’s half-yearly
                             Telephone                    investors,      half-yearly
August 25, 2021 Company                      Other                                              results   statement   for
                             communication                individual      results statement
                                                                                                2021
                                                          investors       for 2021

                                                          Institutional   Company’s
                                                                                                Company’s half-yearly
                             Telephone                    investors,      half-yearly
August 26, 2021 Company                      Other                                              results   statement   for
                             communication                individual      results statement
                                                                                                2021
                                                          investors       for 2021

                                                          Institutional   Company’s
                                                                                                Company’s half-yearly
                             Telephone                    investors,      half-yearly
August 27, 2021 Company                      Other                                              results   statement   for
                             communication                individual      results statement
                                                                                                2021
                                                          investors       for 2021

                                                          Institutional   Company’s first
                                                                                                Company’s first three
October      28,             Telephone                    investors,      three quarters of
                   Company                   Other                                              quarters of 2021 results
2021                         communication                individual      2021        results
                                                                                                statement
                                                          investors       statement

                                                          Institutional   Company’s first
                                                                                                Company’s first three
October      29,             Telephone                    investors,      three quarters of
                   Company                   Other                                              quarters of 2021 results
2021                         communication                individual      2021        results
                                                                                                statement
                                                          investors       statement

                                                          Institutional   Company’s first
                                                                                                Company’s first three
November     01,             Telephone                    investors,      three quarters of
                   Company                   Other                                              quarters of 2021 results
2021                         communication                individual      2021        results
                                                                                                statement
                                                          investors       statement




                                                                                                                       74
                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




Section IV Corporate Governance

I. Basic Status of Corporate Governance

     During the reporting period, the Company continued to improve its corporate governance structure, establish and improve its
internal management and control system, enhance its governance level and standardize its operation in strict accordance with the
requirements of the Company Law, the Securities Law, the Code on Governance of Listed Companies and the Rules Governing the
Listing of Stocks on the Shenzhen Stock Exchange.

     As of the end of the reporting period, the actual situation of the Company’s governance basically complied with the
requirements of the relevant documents on the governance of listed companies issued by the CSRC.


     (I) About shareholders and generalmeetings of shareholders


     The Company strictly follows the requirements of the Opinions on the Regulation of General Meetings of Listed Companies,
the Articles of Association and the Rules of Procedure of General Meetings of Shareholders to regulate the procedures for
convening, holding and voting at general meetings of shareholders, treating all shareholders equally, ensuring the right of all
shareholders to know and participate in important matters of the Company, and ensuring that all shareholders can fully exercise
their rights.


     (II) About the Directors and the Board of Directors


     The Company elects its directors in strict accordance with the election procedures stipulated in the Company Law and the
Articles of Association of the Company. At present, the Company has nine directors, including three independent directors,
accounting for one third of all directors. The number and composition of the Board of Directors of the Company comply with the
requirements of laws and regulations. The Board of Directors has four special committees, namely, the Strategy and Development
Committee, the Remuneration and Appraisal Committee, the Nomination Committee and the Audit Committee. The Board of
Directors conducts its work in strict accordance with the Articles of Association, the Rules of Procedure of the Board of Directors,
the Work System for Independent Directors, the Rules for the Work of the Secretary of the Board of Directors, the Guidelines for the
Standardized Operation of Listed Companies on the Shenzhen Stock Exchange, etc., and exercises its functions and powers in
accordance with the law. All directors of the Company attended the Board of Directors and the Shareholders’ General Meeting on
time, and performed their duties as directors in an honest, trustworthy, diligent and responsible manner.



     (III) About the Supervisors and the Supervisory Board


     The Board of Supervisors of the Company elects supervisors in strict accordance with the selection and engagement procedures
of the Company Law, the Articles of Association and the Rules of Procedure for the Board of Supervisors. The Supervisory Board of
the Company is composed of three Supervisors, one of whom is an employee Supervisor, and the number and composition of the
Supervisory Board of the Company are in compliance with the laws and regulations. The Company’s Supervisors conscientiously
perform their duties and, in the spirit of responsibility to all shareholders, convene the Supervisors’ meetings, attend the shareholders’
meetings and attend the Board of Directors’ meetings in accordance with the Rules of Procedure of the Supervisors’ Committee and
other rules and regulations, and effectively supervise and express independent opinions on major matters, connected transactions,



                                                                                                                                        75
                                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

financial conditions and the performance of duties of the Directors and the President of the Company.
     (IV) Regarding the relationship between controlling shareholders and listed companies


     The Company and the controlling shareholder are independent in terms of personnel, assets, finance, institutions and business,
and the Board of Directors, Supervisory Committee and internal institutions of the Company can operate independently. The
Company’s controlling shareholder acts in a standardized manner and exercises its shareholder rights and undertakes corresponding
obligations through the general meeting of shareholders, without interfering directly or indirectly with the decision-making and
business activities of the Company beyond the general meeting of shareholders to the detriment of the legitimate rights and interests
of the Company or other shareholders.
     (V) About performance evaluation and incentive and restraint mechanism


     The Company has established a comprehensive performance appraisal and evaluation system, and the appointment of senior
management is open, transparent and in compliance with relevant laws and regulations and the Company’s internal rules and
regulations. The Company has established a performance evaluation system to link employees’ income to their work performance.
In the future, the company will explore more forms of incentives to form a multi-level comprehensive incentive mechanism,
improve performance evaluation standards, better mobilize the enthusiasm of managers, and attract and stabilize outstanding
management talents and technical and business backbones.


     (VI) About relevant stakeholders


     The company fully respects and safeguards the legitimate rights and interests of relevant stakeholders, realizes the balance of
interests of shareholders, employees and society, attaches importance to social responsibility, and promotes the sustainable and
healthy development of the company together with stakeholders.
     (VII) On information disclosure and transparency


     The Company strictly follows the provisions of relevant laws and regulations and the Company’s Information Disclosure
Management System to strengthen the management of information disclosure matters and fulfill its information disclosure
obligations, and designates Securities Times, Securities Daily and Cninfoas the Company’s information disclosure newspapers and
websites to disclose information in a true, accurate, timely and complete manner to ensure that all investors have fair access to the
Company’s information. The Company will continue to improve and perfect the internal rules and regulations of corporate
governance in accordance with the requirements of the Code of Governance for Listed Companies and the Rules Governing the
Listing of Stocks on the Shenzhen Stock Exchange to strengthen the standardized operation and promote the sustainable and stable
development of the Company.


Whether there are material differences between the actual state of corporate governance and the provisions on governance of listed
companies issued by laws, administrative regulations and the CSRC
□ Yes √ No
The actual state of corporate governance does not differ materially from the laws, administrative regulations and regulations issued
by the CSRC regarding the governance of listed companies.


II. Independence of the Company vis-à-vis the controlling shareholder and the actual
controller in ensuring the Company’s assets, personnel, finances, institutions, business and
other aspects



                                                                                                                                  76
                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

       During the reporting period, the Company was completely separated from its controlling shareholder in terms of business, assets,
personnel, organization and finance, etc. The Company’s production and operation were stable, its internal organization was perfect
and it was able to operate independently and standardized.
       (I) Business independence aspects of the Company


       The Company has independent production, procurement and sales systems and is fully independent from the controlling
shareholder.


       (II) Independence of the Company’s personnel


       The Company’s personnel, HR and salaries are completely independent. The president, vice president, secretary of the board of
directors, chief financial officer and other senior management personnel work for the Company and receive remuneration, and do not
hold any positions and receive remuneration other than those of directors and supervisors in the controlling shareholder and its
subsidiaries.


       (III) The integrity of the Company’s assets


       The property rights relationship between the Company and the controlling shareholder is clear, and the Company’s funds,
assets and other resources are not illegally occupied or dominated by it. The company’s assets are complete, with production
equipment, auxiliary production equipment and patents and other assets appropriate to the scope of production and operation, and
the company has full control and domination over all assets.
       (IV) Institutional independence


       The Board of Directors, the Supervisory Committee, the management and other internal bodies of the Company operate
independently, and each functional department is completely separated from the controlling shareholder in terms of authority,
responsibility and personnel, etc. There is no superior-subordinate relationship between the controlling shareholder and its
functional departments and the Company and the functional departments of the Company, and there is no phenomenon that the
controlling shareholder affects the independence of the production and operation management of the Company.
       (V) Financial independence


       The Company has set up an independent financial department, established a sound financial and accounting management
system and independent accounting, and there is no case of controlling shareholders interfering with the financial and accounting
activities of the Company. The Company has independent accounts in commercial banks and does not share bank accounts with the
controlling shareholder. The Company is independent in making tax returns and fulfilling its tax obligations in accordance with the
law.




III. Competition in the Same Industry

□ Applicable √ Not Applicable




                                                                                                                                     77
                                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


IV. Information on the Annual General Meeting and Extraordinary General Meeting Held
During the Reporting Period

1. Shareholders’ meeting during the reporting period


                                                        Investor                                                                        Conference
        Sessions              Meeting Type                                       Date                   Date of Disclosure
                                                   participation ratio                                                                  Resolutions

2020 Annual General Annual              General
                                                                                                                                  Announcement
Meeting                of Meeting            of 56.56%                    May 10, 2021             May 11, 2021
                                                                                                                                  number: 2021-055
Shareholders             Shareholders

First    Extraordinary Extraordinary
                                                                                                                                  Announcement
General Meeting of General Meeting of 65.74%                              September 08, 2021 September 09, 2021
                                                                                                                                  number: 2021-083
Shareholders in 2021 Shareholders

Second
                         Extraordinary
Extraordinary                                                                                                                     Announcement
                         General Meeting of 58.80%                        December 20, 2021        December 21, 2021
General Meeting of                                                                                                                number: 2021-103
                         Shareholders
Shareholders in 2021


2. Preferred shareholders whose voting rights have been restored request an Extraordinary General
Meeting of Shareholders

□ Applicable √ Not Applicable


V. Directors, Supervisors and Senior Management

1. Basic situation


                                                                                          Increase Reduced                Other                Reasons
                        Appoint                           Term       Term     Shares at
                                                                                          d shares shares in additions Shares at                   for
    Name    Position        ment    Gender        Age     Start    Expiratio Beginnin
                                                                                              in this         this        and       Ending        change
                         Status                           Date      n Date        g
                                                                                              period         period   deletions                in share

                                                                                                                                              Lending
                                                                                                                                              to         the
Qiu                    incumbe                          June 16, August       60,884,3                   15,066,8                  45,817,5 company
           President                Male     59                                           0                           0
Jianping               nt                               2008       30, 2023 00                           00                        00         for daily
                                                                                                                                              operation
                                                                                                                                              s

           Vice
Chi
           Chairma incumbe                              January August
Xiaohen                             Female   46                               729,950 0                  0            0            729,950
           n       and nt                               12, 2021 30, 2023
g
           President

Wang       Director, incumbe Female          60         June 16, August       17,150,9 0                 4,200,00 0                12,950,9 Lending


                                                                                                                                                           78
                                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Lingling Vice          nt                      2008     30, 2023 60              0                60        to    the
           President                                                                                        company
                                                                                                            for daily
                                                                                                            operation
                                                                                                            s

           Director,
                       incumbe                 August   August
Li Zheng Vice                    Male     62                       676,470 0     0        0       676,470
                       nt                      31, 2020 30, 2023
           President

Xu                     incumbe                 June 16, August
           Directors             Female   37                       0       0     0        0       0
Zheng                  nt                      2008     30, 2023

Cen
                       incumbe                 May 24, August
Zhengpi Directors                Male     59                       0       0     0        0       0
                       nt                      2019     30, 2023
ng

           Independ
Wang                   incumbe                 August   August
           ent                   Male     46                       0       0     0        0       0
Gang                   nt                      31, 2020 30, 2023
           Directors

           Independ
Chen                   incumbe                 August   August
           ent                   Female   61                       0       0     0        0       0
Zhimin                 nt                      31, 2020 30, 2023
           Directors

           Independ
Shi                    incumbe                 August   August
           ent                   Female   58                       0       0     0        0       0
Hong                   nt                      31, 2020 30, 2023
           Directors

           Chairma
           n of the
Jiang                  incumbe                 June 15, August
           Supervis              Female   50                       0       0     0        0       0
Saiping                nt                      2011     30, 2023
           ory
           Board

Fu         Supervis incumbe                    August   August
                                 Female   49                       0       0     0        0       0
Yajuan     ors         nt                      31, 2020 30, 2023

           Supervis incumbe                    June 15, August
Chen Jun                         Male     41                       0       0     0        0       0
           ors         nt                      2011     30, 2023

           Chief
                       incumbe                 June 16, August
Ni Shuyi Financial               Female   45                       0       0     0        0       0
                       nt                      2008     30, 2023
           Officer

Wang       Vice        incumbe                 June 16, August
                                 Male     51                       771,525 0     0        0       771,525
Weiyi      President nt                        2008     30, 2023

Wang       Vice        incumbe                 June 16, August
                                 Male     50                       760,200 0     0        0       760,200
Wei        President nt                        2008     30, 2023

           Vice        incumbe                 June 16, August
Li Feng                          Male     46                       812,977 0     0        0       812,977
           President nt                        2008     30, 2023



                                                                                                                   79
                                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


Zhou        Board      incumbe                            January August
                                    Male      36                               0           0         0          0        0
Siyuan      Secretary nt                                  31, 2018 30, 2023

Zhang       Vice       incumbe                            April 29, August
                                    Male      54                               0           0         0          0        0
Ou          President nt                                  2019      30, 2023

                                                                               81,786,3              19,266,8            62,519,5
Total       --         --           --        --          --        --                     0                    0                   --
                                                                               82                    00                  82

Whether there was any departure of directors and supervisors and dismissal of senior management during the reporting period
□ Yes √ No
Changes in directors, supervisors and senior management of the Company
√ Applicable □ Not Applicable

        Name                 Position              Type              Date                                    Reason

                                                                                   Mr. Qiu Jianping resigned from the position of President
                                                                                   of the Company due to the restructuring of the division of
                                                                                   labor of the Company, and continued to serve as the
Qiu Jianping          President            Outgoing            January 12, 2021
                                                                                   Chairman of the Board of Directors and the Chairman of
                                                                                   the Strategy and Development Committee of the Board of
                                                                                   Directors after his resignation

                                                                                   The Board of Directors appointed Ms. Chi Xiaoheng,
                      Vice     Chairman,                                           Vice Chairman and Vice President, as President of the
Chi Xiaoheng                               Appointments        January 12, 2021
                      President                                                    Company, while Ms. Chi Xiaoheng ceased to hold the
                                                                                   position of Vice President of the Company.


2. Service Situation

Professional background, major work experience and current major responsibilities in the company of the current directors,
supervisors and senior management




        1. Director


         Mr. Qiu Jianping, Chairman of the Board of Directors of the Company. He is a Chinese national with no permanent residency
outside China. Born in 1962, graduated from Xi’an Jiaotong University in 1985 with a postgraduate degree in mechanical casting and
a master’s degree in engineering. From June 2008 to January 2021, he served as the Chairman and President of the Company. From
January 2021 to present, he is the Chairman of the Board of Directors of the Company.


         Ms. Chi Xiaoheng, Vice Chairman and President of the Company. She is a Chinese national with no permanent residency
outside China. Born in 1975, with a college degree. From June 2008 to August 2020, she served as a director and vice president of
the Company. From August 2020 to January 2021, she served as Vice Chairman and Vice President of the Company. From January
2021 to present, she is the Vice Chairman and President of the Company.


        Mr. Li Zheng, Director and Vice President of the Company. He is a Chinese national with no permanent residency outside
China. Born in 1959, with a college degree. From 2008 to August 2020, Mr. Li served as Vice Chairman and Vice President of the


                                                                                                                                           80
                                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Company, and from August 2020 to present, he has served as Director and Vice President of the Company.


     Ms. Wang Lingling, Director and Vice President of the Company. She is a Chinese national with no permanent residency
outside China. Born in 1961, with a bachelor’s degree. Since 2008, Ms. Wang has been a Director and Vice President of the
Company.


     Ms. Xu Zheng, Director of the Company. She is a Chinese national with no permanent residency outside China. Born in 1984,
with a bachelor’s degree. Since 2008, Ms. Xu has been the Secretary to the Chairman of the Board of Directors of GreatStar Holding
Group Co., Ltd. Since 2011, she has been a Director of Hangcha Group. Since 2008, she has been a Director of the Company.


     Mr. Cen Zhengping Director of the Company, is a Hong Kong Chinese citizen, born in 1962, holds a master’s degree and is a
professor-level senior engineer. He has been a Director of the Company since May 2019.


     Mr. Wang Gang, an independent director of the Company. He is a Chinese national with no permanent residency outside China.
He was born in October 1975, holds a master’s degree, is a certified public accountant and a senior economist. Mr. Wang has been a
Director, Deputy General Manager and Secretary of the Board of Directors of Hangzhou ROBAMElectric Co., Ltd. He has been an
independent director of the Company since August 2020.
     Ms. Shi Hong, an independent director of the Company. She is of Chinese nationality and has no permanent residency outside
China. She was born in July 1963, holds a master’s degree and is an associate professor. From September 2005 to July 2018, she
was an associate professor in the Environmental Engineering Department of the School of Marine Science and Engineering of
Shanghai Maritime University, and the director of the Environmental Engineering Laboratory. She has been an independent director
of the Company since August 2020.


      Ms. Chen Zhi Min, an independent director of the Company. She is a Chinese national with no permanent residency outside
China. Born in April 1960, she has a master’s degree. She is currently a Director of Zhejiang Caitong Asset Co., Ltd, a Supervisor
of Hangzhou Tigermed Consulting Co., Ltd., and an independent director of Zhejiang Canaan Technology Limited, Zhejiang
Weixing Industrial Development Co., Ltd., Hangzhou Honghua Digital Technology Stock Company LTD., and Tongkun Group
Co.,Ltd. She has been an independent director of the Company since August 2020.
     2. Supervisor


      Ms. Jiang Saiping is the Chairman of the Supervisory Board of the Company. She is a Chinese national with no permanent
residency outside China. Born in November 1971, she has a bachelor’s degree. From 2009 to December 2013, she served as the
Manager of External Sales Department of the Company, and from 2013 to now, she has been the Director of External Sales of the
Company.


      Ms. Fu Yajuan is a Supervisor of the Company. She is a Chinese national with no permanent residency outside China. She was
born in September 1972, with a college degree and is a senior accountant. Since July 2008, she has been the Deputy Financial
Controller of the Company.


      Mr. Chen Jun is a supervisor of the Company. He is a Chinese national with no permanent residency outside China. Born in
August 1980, he has a bachelor’s degree and is a middle-level engineer. Since 2009, he has been the manager of the Industrial Design
Department of the company, the deputy secretary general of the Corporate Science Association of the company, and the secretary of
the R&D Innovation Branch of the Communist Party of China.


     3. Other senior management



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                                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

      Mr. Zhou Siyuan, Secretary of the Board of Directors and Vice President of the Company. He is a Chinese national with no
permanent residency outside China. He was born in 1986 and has a postgraduate degree. Since January 2018, he has been the
Secretary of the Board of Directors of the Company.
      Ms. Ni Shuyi, Chief Financial Officer of the Company. She is a Chinese national with no permanent residency outside China.
Born in 1976, with a bachelor’s degree. Since 2008, she has been the Chief Financial Officer of the Company.


      Mr. Wang Weiyi, Vice President of the Company. He is a Chinese national with no permanent residency outside China. Born
in 1970, graduated from Zhejiang University with a bachelor’s degree in Mechanical Manufacturing and Technology. Since 2008, he
has been the Vice President of the Company, responsible for product development and quality management, and is one of the main
persons in charge of the national laboratory of the Company.


      Mr. Wang Xie, Vice President of the Company. He is a Chinese national with no permanent residency outside China. He was
born in 1971 and has a college degree. Since 2008, he has been the vice president of the company, responsible for the company’s
product procurement business.


      Mr. Li Feng, Vice President of the Company. He is a Chinese national with no permanent residency outside China. He was
born in 1975 and has a college degree. Since 2008, he has been the Vice President of the Company, responsible for the external sales
of the Company’s products.


     Mr. Zhang Ou, Vice President of the Company, Chinese nationality, no permanent residence abroad, born in 1967, senior
economist, professor. Since April 2019, he has been the Vice President of the Company, responsible for the operation of the laser
industry segment of the Company.




Employment with shareholders
√ Applicable □ Not Applicable

                                                                                                                    Whether or not you
                                                               Positions held
                                                                                                                          receive
  Name of the                                                          in                         Term Expiration
                          Name of shareholder unit                              Term Start Date                       compensation
   incumbent                                                    shareholder                            Date
                                                                                                                      benefits at the
                                                                      units
                                                                                                                     shareholder unit

Qiu Jianping     GreatStar Holding Group Co., Ltd.             President        Aug. 10, 2009                       No

                                                               Vice             January     10,
Wang Lingling GreatStar Holding Group Co., Ltd.                                                                     No
                                                               Chairman         2020

Li Zheng         GreatStar Holding Group Co., Ltd.             Director         Aug. 10, 2009                       No

Chi Xiaoheng     GreatStar Holding Group Co., Ltd.             Director         Aug. 10, 2009                       No

                                                                                January     01,
Xu Zheng         GreatStar Holding Group Co., Ltd.             Manager                                              Yes
                                                                                2016

                                                                                January     10,
Fu Yajuan        GreatStar Holding Group Co., Ltd.             Supervisor                                           No
                                                                                2020

Statement      of None


                                                                                                                                        82
                                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

employment in
shareholder
units

Employment in other units
√ Applicable □ Not Applicable

                                                                                                                   Whether you
                                                                                                                        receive
  Name of the                                                Positions held                     Term Expiration
                               Name of other units                            Term Start Date                      compensation
   incumbent                                                 in other units                          Date
                                                                                                                   allowance in
                                                                                                                       other units

                                                                              February    02,
Qiu Jianping     Zhejiang Hangcha Holding Co., Ltd.          President                                            No
                                                                              2011

                                                                              February    02,
Qiu Jianping     Hangcha Group Co., Ltd.                     Director                                             No
                                                                              2011

                 Zhejiang Zhongtai GreatStar Real Estate
Qiu Jianping                                                 Director         May 10, 2005                        No
                 Co., Ltd.

                 Hangzhou GreatStar Liansheng Trading Co., Executive
Qiu Jianping                                                                  March 19, 2011                      No
                 Ltd.                                        Director

                 Hangzhou GreatStar Precision Machinery                       December    30,
Qiu Jianping                                                 President                                            No
                 Co., Ltd.                                                    2006

                                                                              January     20,
Qiu Jianping     SMART SILVER LIMITED                        Director                                             No
                                                                              2011

                                                                              January     20,
Qiu Jianping     Hong Kong Golden Deer Limited               Director                                             No
                                                                              2011

                                                                              January     20,
Qiu Jianping     Ruian Zhaowei Co., Ltd.                     Director                                             No
                                                                              2011

                                                                              January     20,
Qiu Jianping     Ruian Qihao Co., Ltd.                       Director                                             No
                                                                              2011

                                                                              January     20,
Qiu Jianping     Ruian Junye Co., Ltd.                       Director                                             No
                                                                              2011

                                                             Executive
Qiu Jianping     GreatStar Industrial Co., Ltd.                               June 20, 2013                       No
                                                             Director

                                                                              January     20,
Qiu Jianping     Golden Rice Investment Co., Ltd.            Director                                             No
                                                                              2011

                 Hangzhou Xihu Tiandi Development Co.,
Qiu Jianping                                                 Director         May 13, 2011                        No
                 Ltd.

                 Xinjiang      Lianhe    Investment   Limited Managing        January     10,
Qiu Jianping                                                                                                      No
                 Partnership                                 Partner          2012

Qiu Jianping     Tai Fung Limited                            Director         January     20,                     No


                                                                                                                                     83
                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                                                             2011

                Hangzhou Kunxia Investment Management Managing               January     18,
Qiu Jianping                                                                                               No
                Partnership (Limited Partnership)                Partner     2018

                                                                             November    08,
Qiu Jianping    Zhejiang Equity Services Group Co., Ltd.         Director                                  No
                                                                             2017

                Zhejiang Guozhi Robot Technology Co.,                        September 26,
Qiu Jianping                                                     Director                                  No
                Ltd.                                                         2014

                Zhejiang Private Enterprise Joint Investment
Qiu Jianping                                                     Director    April 13, 2015                No
                Co., Ltd.

                Zhejiang Asteroid Investment Management
Qiu Jianping                                                     Director    June 23, 2016                 No
                Co., Ltd.

                                                                 Executive   November    26,
Qiu Jianping    Hangzhou Lujing Culture Creative Co., Ltd.                                                 No
                                                                 Director    2015

                Hangzhou Xin’anjiang Hot Spring Resort                      November    28,
Qiu Jianping                                                     Director                                  No
                Development Co., Ltd.                                        2011

                                                                             December    25,
Qiu Jianping    Zhejiang Youbang Microfinance Co., Ltd.          Director                                  No
                                                                             2009

                Hainan Haichao Good Luck Enterprise
                                                                 Managing
Qiu Jianping    Management           Partnership     (Limited                April 17, 2019                No
                                                                 Partner
                Partnership)

                Hainan       Haichao      Weishi    Enterprise
                                                                 Managing    January     07,
Qiu Jianping    Management           Partnership     (Limited                                              No
                                                                 Partner     2021
                Partnership)

                Hainan      Hai    Chao   Yongjin   Enterprise
                                                                 Managing    January     07,
Qiu Jianping    Management           Partnership     (Limited                                              No
                                                                 Partner     2021
                Partnership)

                Hangzhou          Zhongcehaichao    Enterprise
Qiu Jianping                                                     President   April 17, 2019                No
                Management Co., Ltd.

                                                                             December    26,
Qiu Jianping    Zhejiang Xin Chai Co., Ltd.                      Director                                  No
                                                                             2019

                                                                             October     21,
Qiu Jianping    Zhongce Rubber Group Co., Ltd.                   Director                                  No
                                                                             2019

                Zhejiang Zhongtai GreatStar Real Estate
Qiu Jianping                                                     Director    May 10, 2005                  No
                Co., Ltd.

                Hangzhou Xinwin Investment Management Managing
Qiu Jianping                                                                 May 31, 2019                  No
                Partnership (Limited Partnership)                Partner

                Hangzhou GreatStar Precision Machinery                       September 20,
Lingling Wang                                                    Director                                  No
                Co., Ltd.                                                    2011

Lingling Wang Hangzhou Fuyang Chongsheng Trading Co., Executive              November    11,               No


                                                                                                                         84
                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                Ltd.                                            Director and 2013
                                                                General
                                                                Manager

                Zhejiang Zhongtai GreatStar Real Estate
Lingling Wang                                                   Supervisor      March 11, 2011            No
                Co., Ltd.

                                                                                January     27,
Lingling Wang Zhejiang Hangcha Holding Co., Ltd.                Director                                  No
                                                                                2012

                Hangzhou GreatStar Precision Machinery                          September 20,
Li Zheng                                                        Director                                  No
                Co., Ltd.                                                       2011

                Hangzhou       Kunxia   Jingyuan   Enterprise
                                                                Managing
Chi Xiaoheng    Management         Partnership       (Limited                   July 10, 2019             No
                                                                Partner
                Partnership)

                Hangzhou        Zhongcehaichao     Enterprise
Xu Zheng                                                        Supervisor      April 21, 2019            No
                Management Co., Ltd.

                                                                President and
                Hangzhou          Weiming          Investment                   September 01,
Xu Zheng                                                        General                                   No
                Management Co., Ltd.                                            2017
                                                                Manager

                                                                                December    02,
Xu Zheng        Hangzhou Xinglu Trading Co., Ltd.               President                                 No
                                                                                2011

Xu Zheng        Hangcha Group Co., Ltd.                         Director        March 25, 2011            No

                                                                                September 21,
Xu Zheng        Zhejiang Guozi Robot Technology Co., Ltd. Director                                        No
                                                                                2017

                                                                                January     27,
Xu Zheng        Zhejiang Hangcha Holding Co., Ltd.              Supervisor                                No
                                                                                2012

                                                                Chairman of
                                                                the             October     21,
Xu Zheng        Zhongce Rubber Group Co., Ltd.                                                            No
                                                                Supervisory     2019
                                                                Board

Cen Zhengping Hanjia Design Group Co., Ltd.                     President       March 18, 2007            No

                                                                                February    15,
Cen Zhengping Zhejiang City Construction Group Co., Ltd. President                                        No
                                                                                2006

                                                                President and
                                                                                September 12,
Cen Zhengping Shanghai Hanjia Investment Co., Ltd.              General                                   No
                                                                                2007
                                                                Manager

                Zhejiang Chengjian Real Estate Group Co.,                       September 21,
Cen Zhengping                                                   President                                 Yes
                Ltd.                                                            2010

                                                                Executive
                                                                                October     20,
Cen Zhengping Zhejiang Hanjia Investment Co., Ltd.              Director,                                 No
                                                                                2010
                                                                General



                                                                                                                        85
                                                                     Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                                                   Manager

Cen Zhengping Zhejiang Dishang Investment Co., Ltd.                President         April 04, 2006          No

                Zhejiang     Zhonglian        Real        Estate
Cen Zhengping                                                      Director          July 25, 2005           No
                Development Co., Ltd.

                Hangzhou     Hanjia      Xinde        Investment Managing            August      28,
Cen Zhengping                                                                                                No
                Management Partnership                             Partner           2014

                                                                                     February    19,
Cen Zhengping Zhejiang Jiahao Auction Co., Ltd.                    Director                                  No
                                                                                     2014

                                                                   Director and September 04,
Cen Zhengping Zhejiang Guan Yin Art Museum                                                                   No
                                                                   Curators          2012

                Hangzhou Zhenda Zinc Power Energy Co.,
Cen Zhengping                                                      Director          June 21, 2017           No
                Ltd.

Cen Zhengping Zhejiang Kayin Holdings Co., Ltd.                    Director          April 09, 2018          No

                                                                   Vice
                                                                   President,
                                                                   Secretary    of
                                                                   the Board of
                Hangzhou ROBAM Electrical Appliance
Wang Gang                                                          Director,         June 01, 2008           Yes
                Co., Ltd.
                                                                   Directorhip of
                                                                   Investment
                                                                   Director,
                                                                   Director

                                                                                     January     01,
Wang Gang       Hangzhou Norbond Nonwoven Co., Ltd.                Director                                  No
                                                                                     2013

                Tesar Household Appliances (Shanghai)
Wang Gang                                                          Director          July 01, 2012           No
                Trading Co., Ltd.

                Hangzhou Foster Deep-cooling Equipment                               January     01,
Wang Gang                                                          Director                                  No
                Co., Ltd.                                                            2018

Wang Gang       De Dietrich Trading (Shanghai) Co., Ltd.           Director          June 01, 2016           No

                Hangzhou Guoguang Travel Goods Co.,                                  October     01,
Wang Gang                                                          Director                                  No
                Ltd.                                                                 2017

                Shanghai Qingke Information Technology                               November    01,
Wang Gang                                                          Supervisor                                No
                Co., Ltd.                                                            2017

                                                                                     December    01,
Wang Gang       Ningbo Qingfeng Investment Co., Ltd.               Director                                  No
                                                                                     2017

                Hangzhou Boss Fu Chuang Investment
Wang Gang                                                          Supervisor        May 01, 2018            No
                Management Co., Ltd.

                Shengzhou     Jindi     Intelligent     Kitchen
Wang Gang                                                          Director          July 01, 2018           No
                Appliances Co., Ltd.



                                                                                                                           86
                                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


                 Hangzhou         Ben     Song    New     Material Independent     August      01,
Wang Gang                                                                                                     Yes
                 Technology Co., Ltd.                                Director      2020

                                                                     Independent   September 01,
Wang Gang        Hangzhou Xiaodian Technology Co., Ltd.                                                       Yes
                                                                     Director      2020

                 Hangzhou Wheeler Intelligent Technology                           October     01,
Wang Gang                                                            Director                                 No
                 Co., Ltd.                                                         2020

                 Hangzhou Zhu Bingren Culture and Art Co.,                         October     01,
Wang Gang                                                            Director                                 No
                 Ltd.                                                              2020

                 Tongling Jingqiang Electronic Technology Independent              December    15,
Wang Gang                                                                                                     Yes
                 Co., Ltd.                                           Director      2020

Chen Zhimin      Zhejiang Caitong Asset Co., Ltd.                    Director                                 No

                 Hangzhou          Tigermed       Pharmaceutical
Chen Zhimin                                                          Supervisor    April 22, 2020             Yes
                 Technology Co., Ltd.

                                                                     Independent
Chen Zhimin      Zhejiang Canaan Technology Co., Ltd.                              April 22, 2016             Yes
                                                                     Director

                 Zhejiang Weixing Industrial Development Independent
Chen Zhimin                                                                        June 08, 2016              Yes
                 Co., Ltd.                                           Director

                 Hangzhou Honghua Digital Technology Independent                   December    06,
Chen Zhimin                                                                                                   Yes
                 Co., Ltd.                                           Director      2019

                                                                     Independent
Chen Zhimin      Tongkun Group Co., Ltd.                                           June 23, 2020              Yes
                                                                     Director

                                                                                   September 14,
Zhou Siyuan      Zhejiang Guozi Robot Technology Co., Ltd. Director                                           No
                                                                                   2017

                 Hangzhou               Weiming         Investment                 September 01,
Zhou Siyuan                                                          Director                                 No
                 Management Co., Ltd.                                              2017

                 Hangzhou Xihu Tiandi Development Co.,
Zhou Siyuan                                                          Director      May 13, 2011               No
                 Ltd.

                 Hangzhou Xihu Tiandi Management Co.,
Zhou Siyuan                                                          Director      July 23, 2014              No
                 Ltd.

                                                                                   January     28,
Zhou Siyuan      Zhejiang Hangcha Holding Co., Ltd.                  Director                                 No
                                                                                   2011

Zhou Siyuan      Ningbo Donghai Bank Co., Ltd.                       Director                                 No

Current and outgoing directors, supervisors and senior management of the Company in the last three years of securities regulatory
authority penalties
□ Applicable √ Not Applicable


3. Remuneration of Directors, Supervisors and Senior Management

Decision-making procedures, basis for determining compensation for directors, supervisors and senior management, and actual


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                                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

payments


     1. Decision-making procedures for compensation of directors, supervisors and senior management


     The remuneration of directors is proposed by the Remuneration Committee for consideration and approval by the Board of
Directors and the General Meeting of Shareholders; the remuneration of supervisors is proposed by the Human Resources
Department for consideration and approval by the Supervisory Board and the General Meeting of Shareholders; the remuneration of
senior management is proposed by the Remuneration Committee for consideration and approval by the Board of Directors;
determining the annual reward principle according to the Company’s business performance, part of the performance salary is
combined with the personal performance appraisal of senior executives, which shall be issued by the chairman of the board of
directors after examination.


     2. The basis for determining the compensation of directors, supervisors and senior management


     The directors, supervisors and senior management of the Company receive their salaries according to their positions, and at the
same time, based on the Company’s business performance, the annual reward principle is determined, combined with individual
performance appraisal, and the Chairman is authorized to issue performance salary after review.


Remuneration of directors, supervisors and senior management of the Company during the reporting period
Unit: CNY’0000

                                                                                                                   Whether or not to
                                                                                                   Total pre-tax          receive
                                                                              Appointment         compensation      compensation
      Name                Position                 Gender        Age
                                                                                 Status       received from the     from a related
                                                                                                    company             party in the
                                                                                                                         company

Qiu Jianping       President                Male            60             incumbent          92                   No

                   Vice     Chairman,
Chi Xiaoheng                                Female          47             incumbent          180                  No
                   President

                   Director,         Vice
Li Zheng                                    Male            63             incumbent          120                  No
                   President

                   Director,         Vice
Lingling Wang                               Female          61             incumbent          40.67                No
                   President

Cen Zhengping      Director                 Male            60             incumbent          0                    No

Xu Zheng           Director                 Female          38             incumbent          0                    Yes

                   Independent
Shi Hong                                    Female          47             incumbent          8                    No
                   Director

                   Independent
Chen Zhimin                                 Female          59             incumbent          8                    No
                   Director

                   Independent
Wang Gang                                   Male            60             incumbent          8                    No
                   Director



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                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


                     Chairman of the
Jiang Saiping        Supervisory             Female          51             incumbent         67.45               No
                     Board

Fu Yajuan            Supervisor              Female          50             incumbent         34.34               No

Chen Jun             Supervisor              Male            42             incumbent         37.99               No

                     Secretary of the
                     Board             of
Zhou Siyuan                                  Male            37             incumbent         100                 No
                     Director,       Vice
                     President

                     Chief       Financial
Ni Shuyi                                     Female          46             incumbent         100                 No
                     Officer

Wang Weiyi           Vice President          Male            52             incumbent         120                 No

Wang Xie             Vice President          Male            51             incumbent         100                 No

Li Feng              Vice President          Male            47             incumbent         120                 No

Zhang Ou             Vice President          Male            55             incumbent         82.82               No

Total                --                      --              --             --                1,219.27            --


VI. Performance of Duties by Directors During the Reporting Period

1. Board of Directors for the current reporting period


            Sessions                                  Date               Date of Disclosure              Conference Resolutions

The Fourth Meeting of the Fifth                                                                     Announcement           number:
                                      January 12, 2021             January 13, 2021
Board of Directors                                                                                  2021-001

The Fifth Meeting of the Fifth                                                                      Announcement           number:
                                      January 22nd, 2021           January 23rd, 2021
Board of Directors                                                                                  2021-003

The Sixth Meeting of the Fifth                                                                      Announcement           number:
                                      March 29th, 2021             March 30, 2021
Board of Directors                                                                                  2021-026

The Seventh Meeting of the                                                                          Announcement           number:
                                      April 06, 2021               April 07, 2021
Fifth Board of Directors                                                                            2021-028

The Eighth Meeting of the Fifth                                                                     Announcement           number:
                                      April 14, 2021               April 15, 2021
Board of Directors                                                                                  2021-036

The Ninth Meeting of the Fifth                                                                      Announcement           number:
                                      April 22, 2021               April 23rd, 2021
Board of Directors                                                                                  2021-052

The Tenth Meeting of the Fifth                                                                      Announcement           number:
                                      June 21, 2021                June 22nd, 2021
Board of Directors                                                                                  2021-060

The Eleventh Meeting of the                                                                         Announcement           number:
                                      July 05, 2021                July 06, 2021
Fifth Board of Directors                                                                            2021-069

The Twelfth Meeting of the Aug. 23, 2021                           Aug. 24, 2021                    Announcement           number:

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                                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Fifth Board of Directors                                                                                      2021-078

The Thirteenth Meeting of the                                                                                 Announcement             number:
                                      October 15, 2021                     October 16, 2021
Fifth Board of Directors                                                                                      2021-089

The Fourteenth Meeting of the                                                                                 Announcement             number:
                                      October 27, 2021                     October 28, 2021
Fifth Board of Directors                                                                                      2021-093

The Fifteenth Meeting of the                                                                                  Announcement             number:
                                      December 03, 2021                    December 04, 2021
Fifth Board of Directors                                                                                      2021-099


2. Attendance of directors at the board of directors’ meetings and shareholders’ meetings


                                      Attendance of directors at board meetings and general meetings

                      Number of
                                                             Number of                                           Failure to
                    board meetings        Number of                             Number of                                           Number of
                                                         board meetings                           Number of      attend two
                     to be attended board meetings                          board meetings                                      shareholders’
 Name of Director                                            attended by                      board meetings    consecutive
                         during the          attended                           attended by                                         meetings
                                                         correspondenc                             missed      board meetings
                         reporting           on-site                              proxy                                             attended
                                                                 e                                                  in person
                           period

Qiu Jianping        12                  12               0                  0                 0                No               3

Chi Xiaoheng        12                  12               0                  0                 0                No               3

Lingling Wang       12                  12               0                  0                 0                No               3

Li Zheng            12                  12               0                  0                 0                No               3

Xu Zheng            12                  12               0                  0                 0                No               3

Cen Zhengping       12                  12               0                  0                 0                No               3

Wang Gang           12                  12               0                  0                 0                No               3

Chen Zhimin         12                  12               0                  0                 0                No               3

Shi Hong            12                  12               0                  0                 0                No               3

Explanation of failure to attend two consecutive board meetings in person


3. Directors’ objections to matters relating to the Company

Whether or not the directors have objected to the relevant matters of the Company
□ Yes √ No
The directors did not raise any objection to the relevant matters of the Company during the reporting period.


4. Other descriptions of directors’ performance of duties

Whether the directors’ recommendations on the company were adopted
√ Yes □ No
Notes by the directors on the relevant recommendations of the Company adopted or not adopted
During the reporting period, the directors of the Company performed their duties diligently and conscientiously in strict accordance

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                                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

with the relevant laws and regulations and the provisions of the Articles of Association and the Rules of Procedure of the Board of
Directors of the Company, strictly implemented the resolutions of the General Meeting of Shareholders, attended the meetings of the
Board of Directors and the General Meeting of Shareholders of the Company, carefully considered the motions and actively
promoted the implementation of the resolutions of the Board of Directors. Besides, each director keeps abreast of the company’s
operation and the construction of internal control and the implementation of the resolutions of the Board of Directors, actively
advises the company, fully understands and agrees to matters such as the renewal of the appointment of financial auditors, profit
distribution, connected transactions, financial assistance and shareholder return planning that occurred during the reporting period,
and promotes the sustainable development of the company’s businesses.


VII. Specialized committees under the Board of Directors during the reporting period

                                                                                                 Important
                                                                                                                   Other       Disagreement
  Committee                             Number of                           Conference          comments and
                      Membership                             Date                                              performance of matters specific
      Name                            meetings held                             content          suggestions
                                                                                                                   duties         (if any)
                                                                                                   made

                                                                          Considered and
                                                                          approved        the
                                                                          Proposal on the
                                                                          Remuneration
                                                                          Package         for
                                                                          Directors of the
                     Chen   Zhimin,                                       Company         for
Compensation Shi             Hong,                                        the Year 2021
and     Appraisal Wang       Gang, 1                  April 14, 2021 and                  the
Committee            Chi Xiaoheng,                                        Proposal on the
                     Xu Zheng                                             Remuneration
                                                                          Package         for
                                                                          Senior
                                                                          Management of
                                                                          the    Company
                                                                          for    the   Year
                                                                          2021

                     Wang    Gang,                                        Considered and
                     Shi     Hong,                                        approved        the
Audit                                                 March         02,
                     Chen   Zhimin, 1                                     Report on the
Committee                                             2021
                     Wang Lingling,                                       Annual Results
                     Xu Zheng                                             Express 2020

The        Third                                                          Considered and
                     Wang    Gang,
Meeting of the                                                            approved        the
                     Shi     Hong,
Audit                                                                     full text of the
                     Chen   Zhimin, 1                 April 14, 2021
Committee      of                                                         2020      Annual
                     Wang Lingling,
the          Fifth                                                        Report and its
                     Xu Zheng
Session of the                                                            summary,        the



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                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Board       of    Company’s
Directors         2020       Annual
                  Audit      Report,
                  the Company’s
                  2020 Financial
                  Accounts
                  Report,        the
                  Company’s
                  2020       Annual
                  Internal
                  Control
                  Self-Evaluation
                  Report,        the
                  Proposal        to
                  Re-appoint
                  Tianjian     CPA
                  Firm      (Special
                  Ordinary
                  Partnership) as
                  the Company’s
                  Financial
                  Auditor        for
                  2021,          the
                  Proposal on the
                  Company’s
                  2021       Annual
                  Routine
                  Proposal       on
                  Estimated
                  Daily
                  Connected
                  Transactions
                  for         2021,
                  Proposal       on
                  Change          of
                  Accounting
                  Policy,
                  Summary        of
                  the Audit Work
                  of the Audit
                  Department of
                  the     Company
                  for 2020 and
                  Audit       Work


                                                                       92
                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                                                     Plan for 2021

The      Fourth
Meeting of the                                                       Considered and
                    Wang    Gang,
Audit                                                                approved       the
                    Shi     Hong,
Committee     of                                  April      23rd, full      text   and
                    Chen   Zhimin, 1
the         Fifth                                 2021               body      of   the
                    Wang Lingling,
Session of the                                                       First     Quarter
                    Xu Zheng
Board          of                                                    Report 2021
Directors

                                                                     Considered and
                                                                     approved       the
                                                                     full text of the
                                                                     Half-Yearly
                                                                     Report         for
                                                                     2021 and its
                                                                     summary, and
The         Fifth                                                    the       Special
Meeting of the                                                       Report on the
                    Wang    Gang,
Audit                                                                Deposit        and
                    Shi     Hong,
Committee     of                                                     Use             of
                    Chen   Zhimin, 1              Aug. 23, 2021
the         Fifth                                                    Proceeds of the
                    Wang Lingling,
Session of the                                                       Company        for
                    Xu Zheng
Board          of                                                    the Half-Yearly
Directors                                                            Period of 2021
                                                                     Considered and
                                                                     approved       the
                                                                     full text of the
                                                                     Third Quarterly
                                                                     Report         for
                                                                     2021 and its
                                                                     summary

The         Sixth
                                                                     Considered and
Meeting of the
                    Wang    Gang,                                    approved       the
Audit
                    Shi     Hong,                                    full    text   and
Committee      of                                 October      27,
                    Chen   Zhimin, 1                                 body      of   the
the         Fifth                                 2021
                    Wang Lingling,                                   Third Quarterly
Session of the
                    Xu Zheng                                         Report         for
Board          of
                                                                     2021
Directors


VIII. Work of the Supervisory Board

Whether the Supervisory Board has identified any risks to the company in its supervisory activities during the reporting period



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                                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

□ Yes √ No
The Supervisory Board has no objection to the supervision matters during the reporting period.


IX. The Company Staff

1. Number of employees, professional composition and education level


Number of employees of the parent company in service at the
                                                                                                                            1,319
end of the reporting period (persons)

Number of employees in service of major subsidiaries at the end
                                                                                                                            9,459
of the reporting period (persons)

Total number of employees in service at the end of the reporting
                                                                                                                           10,778
period (persons)

Total number of employees receiving remuneration in the current
                                                                                                                           10,778
period (persons)

Number of retired employees for which the parent company and
                                                                                                                               0
major subsidiaries are required to bear expenses (persons)

                                                      Professional Composition

                Professional composition categories                         Number of professional composition (persons)

Production staff                                                                                                            7,462

Sales Staff                                                                                                                 1,073

Technical Staff                                                                                                              973

Finance Staff                                                                                                                176

Administrative staff                                                                                                        1,094

Total                                                                                                                      10,778

                                                          Education Level

                       Education level category                                           Number(person)

Master and above                                                                                                             141

University (including college)                                                                                              2,310

High school (including secondary school, technical school)                                                                  3,048

Below high school                                                                                                           5,279

Total                                                                                                                      10,778


2. Compensation Policy

The Company strictly follows the relevant provisions of the national labor contract law for employee salary management and pays
employees’ salaries in full and on time before the 20th of each month. The average salary of employees in 2021 is higher than the
provincial average salary standard in Zhejiang Province in 2021, and calculates employees’ overtime salary on weekdays and
weekends in full according to the regulations, and implements a comprehensive working hour system for some positions. Throughout

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                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

the year, we completed one general salary adjustment for all employees, three quarterly salary adjustments, and one external salary
level survey. The calculation scheme of wages is divided into two categories: front-line employees are paid according to the overtime
pay system, and hourly wages and overtime wages are calculated according to the policy provisions of national labor law;
management positions are calculated according to the combination of fixed salary and performance pay.


3. Training Program

Staff training and development is an important piece of work for the company. In 2021, the training management continued to focus
on three directions: new employee growth education, professional and technical training, and staff professionalism education. In
2022, in order to support the long-term sustainable development of the company, the company will focus on the improvement of
management skills of middle and senior managers, and the training of reserve talents. The company will also strengthen the
construction of internal trainers and build a strong faculty to meet the growing demand for training.


4. Labor Outsourcing

□ Applicable √ Not Applicable


X. Distribution of Profits and Capitalisation of Capital Reserves of the Company

The formulation, implementation or adjustment of the profit distribution policy, in particular the cash dividend policy, during the
reporting period
√ Applicable □ Not Applicable
     During the reporting period, the Company held the 2020 Annual General Meeting of Shareholders on May 10, 2021, and
considered and adopted the “Company’s Shareholder Return Plan for the Next Three Years (2021-2023)” and the “Proposal on the
Company’s Profit Distribution Proposal for 2020”; taking into account the Company’s profitability, development strategic plan,
shareholder return, social capital cost, external financing environment and other factors, the The Board of Directors has formulated
the “Shareholder Return Plan for the Next Three Years (2021-2023)”; taking into account the Company’s strategic development plan
and the business plan for 2021, in order to better safeguard the interests of the Company and all shareholders and improve the
Company’s sustainable development, the Company’s profit distribution plan for 2020 is: no cash dividends, no bonus shares, no
capitalization of capital reserves in 2020, and the remaining undistributed profits will be carried forward to the Company. The
remaining undistributed profits will be carried forward to the next year.
     During the reporting period, the Company’s profit distribution policy was formulated and implemented in compliance with the
relevant provisions of the Notice of the CSRC on Further Implementation of Matters Relating to Cash Dividends for Listed
Companies, the Guideline for the Supervision of Listed Companies No. 3 - Cash Dividends for Listed Companies and the Articles of
Association of the Company, and the relevant decision-making procedures and mechanisms were complete, and the independent
directors were diligent and conscientious in fully safeguarding the legitimate rights and interests of the small and medium
shareholders.

                                                Special Note on Cash Dividend Policy

Is it compliant with the provisions of the Articles of Association
                                                                                                                                Yes
or the resolution of the General Meeting of Shareholders?

Are the criteria and percentage of dividends clear and
                                                                                                                                Yes
unambiguous?

Are the relevant decision-making procedures and mechanisms in                                                                   Yes


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                                                                    Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

place?

Whether the independent directors have performed their duties
                                                                                                                                    Yes
and responsibilities and played their proper roles or not?

Whether small and medium shareholders have adequate
opportunities to express their opinions and demands and whether
                                                                                                                                    Yes
their legitimate rights and interests are adequately protected or
not?

If the cash dividend policy is adjusted or changed, are the
                                                                                                                                    Yes
conditions and procedures compliant and transparent?

The Company reported a profit during the reporting period and the parent company had positive profit available for distribution to
shareholders but did not propose a cash dividend distribution plan
√ Applicable □ Not Applicable

Reasons for profitability during the reporting period and positive
                                                                       Use of the Company’s undistributed profits and plans for their
profit available for distribution to shareholders of the parent
                                                                       use
company but no proposed cash dividend distribution

In order to better safeguard the interests of the company and all
shareholders     and    improve     the    company’s    sustainable
development, the company will have larger capital expenditures Industrial             mergers   and   acquisitions   and   new   product
in industrial mergers and acquisitions and new product development , share repurchases.
development in FY2022, taking into account that some shares
have been repurchased through the secondary market.

Profit distribution and capitalisation of capital reserves for the reporting period
□ Applicable √ Not Applicable
The company plans to pay no cash dividends, send no bonus shares, or increase its share capital by transferring its public reserves for
the year.


XI. Implementation of the Company’s Equity Incentive Plan, Employee Stock Ownership
Plan or Other Employee Incentive Measures

□ Applicable √ Not Applicable
The Company has no share incentive plan, employee stock ownership plan or other employee incentive measures and their
implementation during the reporting period.


XII. Construction and Implementation of Internal Control System During the Reporting
Period

1. Internal control construction and implementation

During the reporting period, the Company continued to improve and perfect the Company’s internal control system and system in
strict accordance with the requirements of the Company Law, the Securities Law, the Code of Governance for Listed Companies, the
Basic Standard for Internal Control of Enterprises and relevant laws, regulations and regulatory documents, and the Board of
Directors conducted self-evaluation of the Company’s internal control and disclosed the Internal Control Self-Evaluation Report


                                                                                                                                      96
                                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

every year, and also engaged an internal control audit firm in accordance with the requirements of the Shenzhen Stock Exchange. In
2021, the Company revised its Articles of Association in accordance with the new Securities Law, the Rules Governing the Listing of
Stocks on the Shenzhen Stock Exchange and other laws, regulations and regulatory documents, taking into account the actual
situation of the Company, and continuously improved and enhanced the level of corporate governance in accordance with the laws,
regulations, regulatory documents and the provisions and requirements of the Articles of Association.
During the reporting period, there were no material weaknesses and significant deficiencies in internal control over financial
reporting and non-financial reporting, and the Company has maintained effective internal control over financial reporting in all
material respects in accordance with the requirements of the Code of Corporate Internal Control system and related regulations.


2. Details of significant deficiencies in internal control identified during the reporting period

□ Yes √ No


XIII. Management Control of the Company’s Subsidiaries During the Reporting Period

                                             Integration
 Company Name          Integration Plan                            Problems            Solutions         Progress        Follow-up plan
                                              Progress

Geelong      Orchid
                       Not Applicable     Not Applicable      Not Applicable       Not Applicable    Not Applicable     Not Applicable
Holding Limited

BeA Corporation Not Applicable            Not Applicable      Not Applicable       Not Applicable    Not Applicable     Not Applicable


XIV. Internal Control Self-evaluation Report or Internal Control Audit Report

1. Internal control self-evaluation report


Date of disclosure of the full internal
                                                April 12, 2022
control evaluation report

                                                The 2021 Annual Self-Evaluation Report on Internal Control disclosed on Cninfo
Full Disclosure Index of Internal Control
                                                (http://www.cninfo.com.cn)
Evaluation Report


Total assets of units included in the scope
of evaluation as a percentage of total assets
                                                100.00%
of the company’s consolidated financial
statements

Operating revenues of the units included in
the evaluation scope as a percentage of the
                                                100.00%
operating revenues of the company’s
consolidated financial statements

                                                         Defect Identification Criteria

                  Category                                     Financial Reports                        Non-financial Reporting

                                                (1) Indications of significant deficiencies in The     following      circumstances   are
Qualitative criteria
                                                financial reporting include: (i) fraud by identified as major defects, and other

                                                                                                                                          97
                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                         directors,        supervisors          and       senior circumstances are identified as important
                         management; (ii) misstatement corrections defects or general defects depending on
                         of material errors in published financial the degree of impact, respectively. (1)
                         reports; (iii) the CPA found a material Unscientific decision-making procedures
                         misstatement in the current financial report of the enterprise; (2) Violation of
                         and the company’s internal control failed to national laws and regulations, such as
                         detect the misstatement in the course of environmental pollution; (3) Loss of
                         operation; and (iv) ineffective supervision of managers or technical personnel in
                         internal control by the audit committee and droves; (4) Loss of managers or technical
                         internal audit organization. (2) Indications of personnel in droves; (5) Results of
                         significant deficiencies in financial reporting internal control evaluation, especially
                         include: (i) accounting policies not selected significant or important deficiencies, are
                         and applied in accordance with GAAP; (ii) not rectified; and (6) Lack of system
                         anti-fraud procedures and controls not control or systemic failure of important
                         established; (iii) no corresponding control operations.
                         mechanism established or not implemented
                         and no corresponding compensating controls
                         over     the      accounting       treatment         of
                         extraordinary or special transactions; (3)
                         Deficiencies        other       than         significant
                         deficiencies and material deficiencies are
                         referred to as general deficiencies.

                         A deficiency in internal control that could
                         result in, or result in, a loss related to profit
                         is measured by the operating income
                         indicator. If the amount of financial reporting
                         misstatement that may result from the
                         deficiency alone or together with other
                         deficiencies is less than 1% of operating
                         revenues, it is considered to be an ordinary (1)             Major    defects:   causing   direct
                         deficiency; if it exceeds 1% of operating property damage of more than 10 million
                         revenues but is less than 3%, it is considered yuan; (2) Important defects: causing
                         to be a significant deficiency; if it exceeds direct property damage of 1 million - 10
Quantitative standards
                         3% of operating revenues, it is considered to million yuan (including); (3) General
                         be a material deficiency. A deficiency in defects: causing direct property losses of
                         internal control that may result in or lead to a less than 1 million yuan (included).
                         loss related to the management of assets is
                         measured by the total assets indicator. If the
                         amount       of    misstatement        in     financial
                         reporting that may result from the deficiency
                         alone or together with other deficiencies is
                         less than 1% of total assets, it is considered a
                         general deficiency; if it exceeds 1% but is
                         less than 3% of total assets, it is considered a


                                                                                                                        98
                                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                                  significant deficiency; if it exceeds 3% of
                                                  total assets, it is considered a material
                                                  deficiency.

Number of significant deficiencies in
                                                  0
financial reporting (pcs)

Number         of   non-financial     reporting
                                                  0
significant deficiencies (pcs)

Number of significant deficiencies in
                                                  0
financial reporting (pcs)

Number         of   non-financial     reporting
                                                  0
significant deficiencies (pcs)


2. Internal control audit report

√ Applicable □ Not Applicable

                                           Consideration paragraph in the internal control audit report

In our opinion, Hangzhou Great Star Industrial Co., Ltd. has maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2021, in accordance with the “Shenzhen Stock Exchange Self-regulatory Guidelines for
Listed Companies No. 1 - Standardized Operation of Main Board Listed Companies” (SZSE [2022] No. 13).
This conclusion was formed subject to the inherent limitations noted in the attestation report.



Disclosure of internal control audit
                                           Disclosed
reports

Date of disclosure of the full
                                           April 12, 2022
internal control audit report

Full Disclosure Index of Internal Verification Report on Internal Control of Hangzhou Great Star Industrial Co., Ltd. (Tianjian
Control Audit Report                       Shen (2022) No.) disclosed at http://www.cninfo.com.cn

Type of opinion on internal control
                                           Standard unqualified opinion
audit report

Whether     there    is   a     material
                                           No
weakness in non-financial reporting

Whether the accounting firm issued a non-standard opinion on the internal control audit report
□ Yes √ No
Whether the internal control audit report issued by the accounting firm is consistent with the opinion of the Board of Directors’
self-evaluation report
√ Yes □ No




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                                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


XV. Rectification of Self-inspection Problems in Special Actions for Governance of Listed
Companies

According to the requirements of the document “Notice on the Special Action of Governance of Listed Companies” in Zhejiang
Securities Regulatory Bureau (No. 141 of Zhejiang Securities Regulatory Company [2020]), our company carefully combed through
the situation of corporate governance in 2018, 2019 and 2020 against the self-examination list and carefully looked for the problems
in corporate governance. After the self-inspection, the Company has met the requirements of relevant regulations in the operation of
the three committees, investor management and administration, construction of internal control system and quality of information
disclosure, etc. The directors, supervisors and senior management are diligent and responsible, and the Company does not have the
situation of capital appropriation by the controlling shareholder and its related parties or irregular external guarantee. The Company
will further improve its internal control system, do a good job in information disclosure, investor relations management and other
related work, and continuously improve the level of corporate governance.




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                                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




                    Section V. Environmental and Social Responsibility

I. Major Environmental Issues

Whether the listed company and its subsidiaries are among the key emission units announced by the environmental protection
department
□ Yes √ No
Administrative penalties imposed for environmental issues during the reporting period

                                                                                             Impact on the
    Company or                                                                              production and       Corrective measures
                         Reasons for Penalty           Violation               Penalty
  subsidiary name                                                                          operation of listed     of the company
                                                                                              companies

None                     None                   None                    None             None                    None

Other environmental information disclosed with reference to key emission units
Neither the Company nor its subsidiaries are among the key emission units announced by the state environmental protection
authorities. During the reporting period, the Company was not subject to administrative penalties for environmental issues.
Measures taken to reduce its carbon emissions during the reporting period and their effectiveness
√ Applicable □ Not Applicable
In response to the national call for energy conservation and emission reduction, the company has formulated the “Energy
Conservation and Emission Reduction Management System”, “Energy Management Operation Guideline”, “Greenhouse Gas
Management Regulations” and other systems to integrate the concept of environmental protection into the company’s daily
production and operation. Besides, the company actively designs green products, builds green factories and promotes green offices to
implement the concept of energy saving and low carbon by action. The company takes environmental factors into full consideration
at the product design and R&D stage, actively launches green products, continuously improves product environmental attributes, and
continuously develops new environmental processes, thereby reducing material waste, environmental pollution and energy
consumption; in order to help prevent and control pollution, the company has established scientific waste management control
procedures, chemical management procedures and other relevant norms, so as to strictly control pollution, minimize the impact of its
business operations on the environment and realize green production; the company has promoted the green transformation and
upgrading of factories and realized green development by building rooftop solar energy and using electric forklifts in accordance
with the principles of low-carbon energy and clean production; the company has advocated system upgrades around the concept of
green office and actively promoted the popularity of green office awareness throughout the company in collaboration with the
support of various departments.


Reasons for not disclosing other environmental information
None




II. Social Responsibility

       (1) Protection of shareholders’ and creditors’ rights and interests


                                                                                                                                    101
                                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

     During the reporting period, the Company further strengthened its standardized operation, established a sound corporate
governance structure, standardized management in the convening, holding and proceedings of shareholders’ meetings, and ensured
the shareholders’ rights to information, participation and voting on important matters of the Company; continuously improved the
Company’s internal control system and amended the Articles of Association in accordance with relevant regulations;
conscientiously fulfilled its information disclosure obligations, ensured the truthfulness, accuracy, completeness, timeliness and
fairness of information disclosure, and strictly implemented the system of registration of insider information informants and
confidentiality of insider information, and treated all shareholders and investors fairly; strengthened investor relations management,
and communicated with investors through various means such as investor relations interactive platform and hotline, and protected
the legitimate rights and interests of all shareholders of the Company, especially the small and medium shareholders.


      (2) Employee Rights Protection


      The company insists on people-oriented, takes talent strategy as the focus of enterprise development, strictly abides by the
Labor Law, the Law on the Protection of Women’s Rights and Interests and other relevant laws and regulations, pays the social
insurance for employees’ pension, medical care, unemployment, work injury and maternity on time, respects and safeguards
employees’ personal rights and interests, and pays practical attention to employees’ health, safety and satisfaction. The company
attaches importance to the cultivation of talents, regularly organizing training on safety production knowledge, basic skills training
for each position, and comprehensive quality training for management personnel, so that employees can effectively improve their
overall professionalism and comprehensive quality in addition to their own work, realize the common growth of employees and
enterprises, and build a harmonious and stable labor-management relationship.
      (3) Supplier, customer and consumer rights protection

      The company has always followed the trading principles of “honesty and trustworthiness, mutual benefit and legal compliance”,
paid attention to communication and coordination with all relevant parties, fully respected and protected the legitimate rights and
interests of suppliers and customers, and established strategic partnership with suppliers and customers. The company constantly
improves the procurement system and process, and in the selection of suppliers, the company has established a fair and impartial
evaluation system to screen out qualified suppliers. The company insists that the interests of customers are paramount, strictly
controls product quality, constantly improves service quality, and always pays attention to product safety, so that the rights and
interests of all parties are duly protected.
      (4) Environmental Protection


      The Company attaches great importance to environmental protection and takes environmental protection, energy conservation
and emission reduction as an important task. During the reporting period, the company strictly complied with the relevant
environmental protection regulations and corresponding standards for the effective comprehensive management of wastewater and
exhaust gas, and the wastewater and exhaust gas treatment facilities were operating normally. In order to strengthen the management
of emission reduction and pollution control, the company conducts regular inspection and the overall operation of environmental
protection facilities is good, and the work of energy conservation and emission reduction is carried out in an orderly manner.




III. The Consolidation and Expansion of the Poverty Alleviation and Rural Revitalization

During the reporting period, the company did not participate in the precise consolidation and expansion of poverty eradication and
rural revitalization efforts.




                                                                                                                                  102
                                                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




                                              Section VI Important Matters

I. Implementation of Commitments

1. Commitments of the actual controller, shareholders, related parties, acquirers and the Company that
have been fulfilled during the reporting period and have not been fulfilled as of the end of the reporting
period

√ Applicable □ Not Applicable

Reasons
                             Type of
     for        Committed                                                                                Commitmen Commitm
                            Commitm                              Commitment Content                                                  Fulfillment
Commit           Parties                                                                                    t Date      ent Period
                                  ent
     ment

Share
Reform
Commit
ment

Commit
ments
made in
the
acquisiti
on
report or
the
report
on
changes
in
interests

                                              According to the “Letter of Commitment on Earnings
                                              Compensation” issued by GreatStar Group on June 17,
Commit                      Performan
                                              2019, and the “Earnings Compensation Agreement” and
ments                       ce
                                              “Supplementary Earnings Compensation Agreement”
made at                     commitme
                                              signed with the listed company on August 15, 2019 and
the time GreatStar          nts         and                                                              June        04, 2021-12-3 In       strict
                                              September    27,     2019,    respectively,   the   main
of         the Group        compensat                                                                    2019           1            fulfillment
                                              arrangements for the performance compensation related
asset                       ion
                                              to this transaction are as follows: 1. The profit
reorgani                    arrangeme
                                              compensation period of the GreatStar Group to the
zation                      nts
                                              listed company is two consecutive fiscal years in and
                                              after the date of completion of the transaction, namely

                                                                                                                                               103
                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

2019, 2020 and 2021 (hereinafter referred to as the
“Profit Compensation Period”). 2. The GreatStar Group
undertakes that the total net profit attributable to the
shareholders of the parent company after deducting
non-recurring profits and losses in the audited
consolidated statement of Zhongce Rubber during the
profit compensation period is not less than 3.1287882
billion yuan (hereinafter referred to as the “Committed
Net Profit”). 3. The base date for profit compensation
measurement shall be December 31, 2021. The listed
company shall, within 30 working days from the base
date of profit compensation measurement, engage an
accounting firm with relevant securities and futures
business qualification to conduct special audits on the
aggregate net profit attributable to shareholders of the
parent company in the consolidated statements of China
Strategic Rubber for each year during the profit
compensation period after deducting non-recurring
gains and losses (hereinafter referred to as the “actual
aggregate net profit”), and the difference between the
actual aggregate net profit and the promised net profit
of    China   Strategic   Rubber    during      the     profit
compensation period shall be determined accordingly.
4. According to the special audit opinion issued by the
accounting firm on the difference of profit forecast
during the profit compensation period, if the actual
aggregate net profit of Zhognce Rubber during the
profit compensation period is less than the promised net
profit, the GreatStar Group shall compensate the listed
company in cash, and the compensable amount = (the
promised net profit - the actual aggregate net profit
during the profit compensation period) × 11.4438%. If
the   GreatStar   Group    is   required   to    bear     the
responsibility of profit compensation according to the
preceding paragraph, it shall pay the cash compensation
to the bank account designated by the listed company
within 30 working days after the issuance of the special
audit opinion and the date of the written notice of
compensation issued by the listed company. 5. The
GreatStar Group is willing to undertake to increase the
net profit of the listed company by the synergistic effect
of the transaction during the period of profit
compensation (hereinafter referred to as the “synergistic
effect to increase net profit”). GreatStar Group


                                                                                 104
                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                        undertakes that the total net profit of the listed company
                        will not be less than RMB75,494,100,000 (hereinafter
                        referred to as “the promised net profit of the Synergy
                        Effect”) during the profit compensation period due to
                        the Synergy Effect of the Transaction. 6. The
                        benchmark      date        of     the    profit     compensation
                        measurement is December 31, 2021. The listed
                        company shall, within 30 working days from the base
                        date of the profit compensation calculation, engage an
                        accounting firm with relevant securities and futures
                        business qualification to conduct a special audit of the
                        net profit from synergies achieved by the listed
                        company in each year of the profit compensation
                        period, and determine the difference between the actual
                        total net profit from synergies and the promised net
                        profit from synergies during the profit compensation
                        period. 7. According to the special audit opinion issued
                        by the accounting firm on the difference between the
                        profit   forecast     of    synergies      during     the   profit
                        compensation period, if the actual aggregate net profit
                        of synergies is less than the promised net profit of
                        synergies, the GreatStar Group shall compensate the
                        listed   company      in        cash,   and   the    amount    of
                        compensation shall be = the promised net profit of
                        synergies - the actual aggregate net profit of synergies
                        during the profit compensation period. If the GreatStar
                        Group is required to bear the responsibility of profit
                        compensation according to the preceding paragraph, it
                        shall pay the cash compensation to the bank account
                        designated by the listed company within 30 working
                        days after the issuance of the special audit opinion and
                        the date of the written notice of compensation issued by
                        the listed company. If the GreatStar Group fails to give
                        full compensation to the listed company within the
                        period agreed in this Agreement, the GreatStar Group
                        shall pay to the listed company in cash for each day the
                        compensation amount is overdue, two ten-thousandths
                        of the late liquidated damages, until the compensation
                        amount is paid in full by the GreatStar Group.

             Reduction 1. I and the enterprises controlled by me will minimize
Qiu Jianping; and       the connected transactions with the listed company as
                                                                                             June   04, Long-term In     strict
Wang         regulation far as possible and will not use my position as the
                                                                                             2019      validity   fulfillment
Lingling     of         actual controller of the listed company to seek to give
             connected preferential rights over other third parties in business


                                                                                                                            105
                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

            transaction cooperation with the listed company. 2. The Company
            s             will not use its position as the controlling shareholder
                          of the listed company to seek the right to enter into
                          transactions with the listed company on a priority basis.
                          3. If there is a necessary and unavoidable connected
                          transaction, the Company and the enterprises controlled
                          by the Company will enter into an agreement with the
                          listed company in accordance with the principles of
                          fairness, equity and equitability, and perform legal
                          procedures,   and    will    fulfill   the   obligations   of
                          information     disclosure       and     relevant    internal
                          decision-making and approval procedures in accordance
                          with the requirements of relevant laws, regulations and
                          normative documents and the Articles of Association,
                          so as to ensure that the transaction will not be carried
                          out on terms that are unfair compared with market
                          prices. The Company will ensure that it will not
                          conduct transactions with the listed company on terms
                          that are unfair compared with the market price, and will
                          not use such transactions to engage in any acts that are
                          detrimental to the legitimate rights and interests of the
                          listed company and other shareholders.

                          1. The Company and the enterprises controlled by the
                          Company will minimize connected transactions with
                          the listed company as far as possible and will not use its
                          position as the controlling shareholder of the listed
                          company to seek to give preferential rights over other
                          third parties in business cooperation with the listed
                          company. 2. The Company will not use its position as
                          the controlling shareholder of the listed company to
            Reduction
                          seek the right to enter into transactions with the listed
            and
                          company on a priority basis. 3. If there is a necessary
            regulation
GreatStar                 and unavoidable connected transaction, the Company June         04, Long-term In     strict
            of
Group                     and the enterprises controlled by the Company will 2019            validity   fulfillment
            connected
                          enter into an agreement with the listed company in
            transaction
                          accordance with the principles of fairness, equity and
            s
                          equitable compensation in accordance with the law and
                          perform legal procedures, and will fulfill the obligations
                          of   information    disclosure     and    relevant   internal
                          decision-making and approval procedures in accordance
                          with the requirements of relevant laws, regulations and
                          normative documents and the Articles of Association,
                          so as to ensure that the transaction will not be
                          conducted at a price that is unfair compared with the


                                                                                                                  106
                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                           market price. The Company will not enter into any
                           transaction with the listed company on terms that are
                           unfair compared with the market price, and will not use
                           such transaction to engage in any act that is detrimental
                           to the legitimate rights and interests of the listed
                           company and other shareholders.

                           1. I will not directly or indirectly engage or participate
                           in any business that constitutes potential direct or
                           indirect competition with the operation of the listed
                           company and its subsidiaries; I guarantee that I will
                           take legal and effective measures to ensure that other
                           enterprises under my control will not engage or
                           participate in any business that competes with the
                           operation of the listed company and its subsidiaries. 2.
                           If the listed company further expands its business
                           scope, I and other enterprises under my control will not
                           compete with the expanded business of the listed
                           company; if they may compete with the expanded
                           business of the listed company, I and other enterprises
                           under my control will withdraw from the competition
              Avoiding     with the listed company in the following manner: A.
Qiu Jianping; competitio Stop the business which is or may be in competition
                                                                                        June   04, Long-term In     strict
Wang          n from the with the listed company; B. Incorporate the competing
                                                                                        2019      validity   fulfillment
Lingling      same         business into the listed company C. Transfer the
              industry     competing business to an unrelated third party. 3. If I
                           and other enterprises under my control have any
                           business opportunity to engage in or participate in any
                           activities that may compete with the operation of the
                           listed company, they will immediately notify the listed
                           company of the said business opportunity, and if the
                           listed company gives an affirmative reply within a
                           reasonable period specified in the notice that it is
                           willing to make use of the business opportunity, they
                           will try their best to give the listed company the
                           business opportunity. 4. If I violate the above
                           undertaking, I am willing to assume all responsibilities
                           arising from it and fully compensate or indemnify all
                           direct or indirect losses caused to the listed company as
                           a result.

                           1. The Company will not directly or indirectly engage
              Avoiding
                           or participate in any business that constitutes potential
GreatStar     competitio                                                                June   04, Long-term In     strict
                           direct or indirect competition with the operation of the
Group         n from the                                                                2019      validity   fulfillment
                           listed company and its subsidiaries; it guarantees that it
              same
                           will take legal and effective measures to ensure that

                                                                                                                       107
                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                industry     other enterprises controlled by the Company will not
                             engage or participate in any business that competes
                             with the operation of the listed company and its
                             subsidiaries. 2. If the listed company further expands its
                             business scope, the Company and other enterprises
                             controlled by the Company will not compete with the
                             expanded business of the listed company; if they may
                             compete with the expanded business of the listed
                             company, the Company and other enterprises controlled
                             by the Company will withdraw from the competition
                             with the listed company in the following manner: A.
                             Stop the business that competes or may compete with
                             the listed company; B. Incorporate the competing
                             business into the operation of the listed company C.
                             Transfer the competing business to an unrelated third
                             party. 3. If the Company and other enterprises
                             controlled by the Company have any business
                             opportunity to engage in or participate in any activity
                             that may compete with the operation of the listed
                             company, they shall immediately notify the listed
                             company of the said business opportunity, and if the
                             listed company replies affirmatively within a reasonable
                             period specified in the notice that it is willing to use the
                             business opportunity, they shall endeavor to give the
                             listed company the business opportunity. 4. If the above
                             undertaking is violated, the Company is willing to
                             assume all responsibilities arising therefrom and fully
                             compensate or indemnify all direct or indirect losses
                             caused to the listed company as a result.

                             I undertake that after the completion of this transaction,
                             I will ensure that the listed company will continue to
                Safeguardi improve the corporate governance structure and
                ng       the independent operation of the company’s management
Qiu Jianping;
                independe system in accordance with the relevant laws and June                     04, Long-term In     strict
Wang
                nce        of regulations and the requirements of the Articles of 2019                validity   fulfillment
Lingling
                listed       Association, and continue to maintain the independence
                companies of the listed company in terms of business, assets,
                             finance, institutions and personnel, and effectively
                             protect the interests of all shareholders.

                Protecting The Company undertakes that after the completion of
                the          the Transaction, it will ensure that the listed company
GreatStar                                                                                   June   04, Long-term In     strict
                independe will continue to improve its corporate governance
Group                                                                                       2019      validity   fulfillment
                nce        of structure   and   independently     operated    corporate
                listed       management system in accordance with the relevant

                                                                                                                           108
                                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                  companies laws and regulations and the requirements of the
                             Articles of Association, continue to maintain the
                             independence of the listed company in terms of
                             business, assets, finance, institutions and personnel, and
                             effectively protect the interests of all shareholders.

                             1. I promise not to transfer benefits to other units or
                             individuals without compensation or on unfair terms, or
                             use other means to harm the interests of the company. 2.
                             I promise to restrain my duty consumption behavior. 3.
                             I promise not to use the company’s assets to engage in
All   directors
                             investment or consumption activities unrelated to the
and     senior Other
                             performance of my duties. 4. I undertake to link the June           04, Long-term In     strict
management        commitme
                             remuneration system formulated by the Board of 2019                    validity   fulfillment
of          the nts
                             Directors    or      the     Remuneration        and   Evaluation
Company
                             Committee to the implementation of the Company’s
                             measures to fill returns. If I violate the above
                             commitment and cause losses to the company or
                             shareholders,        I     will     bear   the     compensation
                             responsibility according to the law.

                             1. Not to interfere with the operation and management
                             activities of the Company beyond its authority and not
                             to encroach on the interests of the Company. 2. After
                             the date of this undertaking and before the completion
                             of this transaction, if the CSRC makes clear provisions
                             on the measures to fill diluted returns and its
                             undertakings, and if the above undertakings cannot
                             satisfy such provisions of the CSRC, the Company
                             undertakes      to       issue    additional   undertakings    in
                             accordance with the provisions of the CSRC at that
                             time. 3. The Company will strictly fulfill the measures
                  Other
GreatStar                    to fill the diluted immediate return, and if it fails to June       04, Long-term In     strict
                  commitme
Group                        fulfill the measures to fill the diluted immediate return, 2019        validity   fulfillment
                  nts
                             it will publicly explain the specific reasons for not
                             fulfilling the measures to fill the diluted immediate
                             return and apologize to the shareholders of the
                             Company and public investors at the general meeting of
                             the Company; if it fails to fulfill the relevant
                             commitments and causes the investors to suffer losses
                             in securities trading, it will compensate according to
                             law. If any breach of the above commitments causes
                             losses to the Company or its shareholders, the Company
                             will bear the responsibility of compensation in
                             accordance with the law.



                                                                                                                         109
                                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


                                          1. Not to interfere with the operation and management
                                          activities of the Company beyond its authority and not
                                          to encroach on the interests of the Company. 2. After
                                          the date of this undertaking and before the completion
                                          of the implementation of this transaction, if the CSRC
                                          makes clear provisions on the measures to fill the
                                          diluted immediate return and its undertakings, and if the
                                          above undertakings cannot satisfy such provisions of
                                          the CSRC, I undertake to issue additional undertakings
                                          in accordance with the provisions of the CSRC at that
             Qiu Jianping; Other          time. 3. I will strictly fulfill the measures to fill the
                                                                                                         June       04, Long-term In     strict
             Wang               commitme diluted immediate return, and if I fail to fulfill the
                                                                                                         2019          validity   fulfillment
             Lingling           nts       measures to fill the diluted immediate return, I will
                                          publicly explain the specific reasons for not fulfilling
                                          the measures to fill the diluted immediate return and
                                          apologize to the shareholders of the Company and
                                          public investors at the general meeting of the Company;
                                          if I fail to fulfill the relevant commitments and cause
                                          the investors to suffer losses in securities trading, I will
                                          compensate according to law. If the Company or its
                                          shareholders suffer losses as a result of any breach of
                                          the above commitments, I will bear the responsibility of
                                          compensation in accordance with the law.

                                          1. We undertake not to transfer benefits to other units or
                                          individuals without compensation or on unfair terms, or
                                          use other means to harm the interests of the Company.
                                          2. We undertake to restrain directors and senior
                                          management from spending on their duties. 3. We
                                          undertake not to use the company’s assets to engage in
Commit
                                          investment or consumption activities unrelated to the
ments
                                          performance of their duties. 4. We commit to link the
made at
             All    directors             remuneration system formulated by the Board of
the time
             and        senior Other      Directors or the Remuneration Committee to the
of initial                                                                                               November      Long-term In      strict
             management         Commitm implementation of the Company’s measures to fill
public                                                                                                   23, 2018      validity   fulfillment
             of           the ents        returns. 5. If the company implements the equity
offering
             Company                      incentive plan in the future, it promises that the exercise
or
                                          conditions of the future equity incentive plan will be
refinanci
                                          linked to the implementation of the measures to fill the
ng
                                          return of the company. As one of the subjects
                                          responsible for the measures to fill the return, if I
                                          violate the above commitment or refuse to fulfill the
                                          above commitment, I agree to be punished or take
                                          relevant management measures in accordance with the
                                          relevant regulations and rules formulated or issued by


                                                                                                                                            110
                                                              Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                             the CSRC and the Shenzhen Stock Exchange and other
                             securities regulators, and I am willing to bear the
                             corresponding legal responsibilities.

                             The Company undertakes not to interfere with the
                             operation and management activities of the Company
                             beyond its authority and not to encroach on the interests
                             of the Company. As one of the responsible subjects of
                             the measures to fill the return, if the Company violates
             Other
GreatStar                    the above commitment or refuses to fulfill the above November                         Long-term In           strict
             commitme
Group                        commitment, the Company agrees to make relevant 23, 2018                              validity        fulfillment
             nts
                             penalties or take relevant management measures in
                             accordance with the relevant regulations and rules
                             formulated or issued by the CSRC and the Shenzhen
                             Stock     Exchange,        and   is    willing   to   bear    the
                             corresponding legal responsibilities.

                             I undertake not to interfere with the management
                             activities of the Company beyond my authority and not
                             to misappropriate the interests of the Company. As one
                             of the responsible subjects of the measures to fill the
Qiu Jianping; Other          return, if I violate the above commitment or refuse to
                                                                                                  November         Long-term In           strict
Wang         commitme fulfill the above commitment, I agree to be punished or
                                                                                                  23, 2019         validity        fulfillment
Lingling     nts             take relevant management measures in accordance with
                             the relevant regulations and rules formulated or issued
                             by the CSRC and the Shenzhen Stock Exchange, and I
                             am      willing     to   bear    the     corresponding       legal
                             responsibilities.

                             During the period when it is the controlling shareholder
                             of the Issuer,GreatStar Group and its future direct or
                             indirect control enterprises will not engage in or
                             participate in any business or activities within or
             Commitm
                             outside China in any form (including, but not limited to,
             ents      on
                             investment, mergers and acquisitions, joint ventures,                                 During the
             competitio
                             joint ventures, cooperation, partnerships, contracting or                             period     of
             n,
                             leasing operations, purchase of shares of listed                                      being the
GreatStar    connected                                                                            April      05,                   In     strict
                             companies) business or activities that constitute or may                              controlling
Group        transaction                                                                          2009                             fulfillment
                             constitute a substantial competitive relationship to the                              shareholde
             s         and
                             main business of the issuer. Nor will it support in any                               r   of the
             capital
                             way within or outside China that the issuer and its third                             Company
             appropriati
                             parties    other    than    wholly-owned         or   controlling
             on
                             subsidiaries engage in or participate in business or
                             activities that constitute or may constitute material
                             competition to the main business of the Issuer. If losses
                             are caused to the issuer due to the failure to perform the



                                                                                                                                             111
                                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                                              promises and guarantees made in the commitment
                                              letter, GreatStar Group will compensate theIssuer for all
                                              actual losses.

                                              During the period in which they have effective control
                                              of the Issuer, Mr. and Mrs. Qiu Jianping and any other
                                              enterprises directly or indirectly controlled by them
                                              other than the Issuer and its wholly-owned or controlled
                                              subsidiaries will not engage or participate in any
                                              business or activity in any form (including but not
                              Commitm
                                              limited to investment, merger and acquisition, joint
                              ents      on
                                              venture, cooperation, partnership, contracting or leasing
                              competitio
                                              operation, purchase of shares of listed companies)                          Period as
                              n,
              Qiu Jianping;                   within or outside the PRC that constitutes or may                           the actual
                              connected                                                                     April   05,                 In     strict
              Wang                            constitute substantial competition to the Issuer’s                         controller
                              transaction                                                                   2010                        fulfillment
              Lingling                        principal business. The Company will not support any                        of      the
                              s         and
                                              third party other than the Issuer and its wholly-owned                      company
                              capital
                                              or controlled subsidiaries to engage in or participate in
                              appropriati
                                              any business or activity that constitutes or may
                              on
                                              constitute substantial competition to the Issuer’s
                                              principal business, either within or outside the PRC.
                                              Mr. and Mrs. Qiu Jianping will indemnify the Issuer for
                                              all actual losses incurred by the Issuer as a result of any
                                              failure to perform the undertakings and warranties
                                              given in the Undertaking Letter.

Equity
Incentiv
e
Commit
ment

Other
commit
ments to
small
and
medium-
sized
sharehol
ders     of
the
Compan
y

Whether
              Yes
the


                                                                                                                                                  112
                                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

commit
ment is
fulfilled
on time


2. The company’s assets or projects have profitability forecasts and the reporting period is still in the
profitability forecast period, and the company makes a statement on the assets or projects meeting the
original profitability forecast and the reasons for it

□ Applicable √ Not Applicable


II. Non-operating Appropriation of Funds by Controlling Shareholders and Other Related
Parties to the Listed Company

□ Applicable √ Not Applicable
There was no non-operating appropriation of funds from controlling shareholders and other related parties to the listed company
during the reporting period.


III. Non-compliance with External Guarantees

□ Applicable √ Not Applicable
The Company has no irregularities in external guarantees during the reporting period.


IV. Statement by the Board of Directors on the Latest “Non-standard Audit Report”

□ Applicable √ Not Applicable


V. Explanation by the Board of Directors, the Supervisory Committee and the Independent
Directors (If Any) on the “Non-standard Audit Report” of the Accounting Firm for the
Current Reporting Period

□ Applicable √ Not Applicable


VI. Description of Changes in Accounting Policies, Accounting Estimates or Corrections of
Significant Accounting Errors Compared to the Previous Year’s Financial Report

□ Applicable √ Not Applicable
There were no changes in accounting policies, accounting estimates or corrections of material accounting errors in the reporting
period.


VII. Description of Changes in the Scope of Consolidated Statements Compared with the
Previous Year’s Financial Report

√ Applicable □ Not Applicable


                                                                                                                            113
                                                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Please refer to Section X (VIII) Changes in the scope of consolidation.


VIII. Appointment and Dismissal of Accounting Firm

The accounting firm currently engaged

Name of domestic accounting firm                                            Tianjian Accounting Firm (Special General Partnership)

Compensation of domestic accounting firm (RMB million)                      88.5

Consecutive years of audit services for domestic accounting
                                                                            13 years
firms

Name of Certified Public Accountant of the domestic accounting
                                                                            Fei Fanghua, Li Xi
firm

Consecutive years of audit services of certified public
                                                                            1 year
accountants of domestic accounting firms

Whether to change the accounting firm in the current period
□ Yes √ No
Engagement of internal control audit accounting firm, financial advisor or sponsor
□ Applicable √ Not Applicable


IX. Delisting After Disclosure of Annual Report

□ Applicable √ Not Applicable


X. Bankruptcy Reorganization-related matters

□ Applicable √ Not Applicable
There were no matters related to bankruptcy reorganization during the reporting period.


XI. Significant Litigation and Arbitration Matters

√ Applicable □ Not Applicable

                                         Whether
                                                                                                                       Enforceme
                                              a
                              Amount                                                                                        nt of    Date
 Basic information                       projecte                                                                                           Discl
                             involved                Litigation (Arbitration)   Outcome and impact of litigation       litigation     of
       on litigation                          d                                                                                             osure
                             (CNY’000                        Progress                 (arbitration) hearings          (arbitratio Disclo
       (arbitration)                     liability                                                                                          Index
                                0)                                                                                           n)      sure
                                              is
                                                                                                                       judgments
                                         formed

Summary of other                                     As of December 31, For the litigation            matters,   the
                                                                                                                       Cumulativ
matters not meeting                                  2021, the amount settled Company will recover the amount
                                                                                                                       e return of
the          disclosure 446.59           No          is     CNY100,000;    the involved in the case through: 1)
                                                                                                                       CNY100,0
standards              for                           amount involved in the winning the lawsuit or mediation; 2)
                                                                                                                       00
material      litigation                             case    that   has   been requesting the unit involved in the


                                                                                                                                               114
                                                                     Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

(Company            as                     mediated          to       be case and its affiliated legal or
plaintiff)                                 recovered                  is natural persons to provide guarantee
                                           CNY657,680,000;           and for the execution of the debt to
                                           the amount involved in secure the recovery of the amount
                                           the case that has been involved in the case; and 3)
                                           successfully      arbitrated accruing        bad    debt     allowance
                                           and not yet executed is accordingly in accordance with the
                                           CNY808,177,000.                 accounting    standards      and    the
                                                                           Company’s management system. In
                                                                           summary, the summary of this
                                                                           litigation matter has no significant
                                                                           impact on the Company.

Summary of other
                                           As of December 31,
matters that do not
                                           2021,       the        amount
meet the disclosure
                                           involved in cases that This            litigation   matter    has   no Not
standards          for 23.82      No
                                           have been settled and material impact on the Company.                     Applicable
material     litigation
                                           withdrawn                  is
(company            as
                                           CNY238,222,000
defendant party)


XII. Penalties and Rectification

□ Applicable √ Not Applicable
There are no penalties and corrections for the company in the reporting period.


XIII. Integrity of the Company and Its Controlling Shareholders and Actual Controllers

√ Applicable □ Not Applicable
During the reporting period, the Company and its controlling shareholder, the GreatStar Group, and the actual controller, Mr. Qiu
Jianping, were in good standing, and there were no cases of non-fulfillment of court judgments in force or large debts due and
unpaid.




XIV. Significant Connected Transactions

1. Connected Transactions Related to Daily Operations

□ Applicable √ Not Applicable
There were no connected transactions related to the daily operation of the Company during the reporting period.


2. Connected Transactions Arising from the Acquisition or Sale of Assets or Equity

□ Applicable √ Not Applicable
The Company did not have any connected transactions of asset or equity acquisition or sale during the reporting period.

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                                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

3. Connected Transactions of Joint Foreign Investment

□ Applicable √ Not Applicable
The Company did not have any connected transactions of joint foreign investment during the reporting period.


4. Connected Debt Transactions

□ Applicable √ Not Applicable
The company has no related debt transactions during the reporting period.


5. Transactions with finance companies with related relationships

□ Applicable √ Not Applicable
There is no deposit, loan, credit or other financial business between the company and the finance company with which the
relationship exists and related parties.


6. Transactions between the finance company controlled by the company and related parties

□ Applicable √ Not Applicable
There is no deposit, loan, credit or other financial business between the finance company controlled by the Company and related
parties.


7. Other significant connected transactions

□ Applicable √ Not Applicable
The Company had no other significant connected transactions during the reporting period.


XV. Significant Contracts and Their Performance

1. Trusteeship, contracting and leasing matters

(1) Escrow status

□ Applicable √ Not Applicable
The Company has no escrow situation during the reporting period.


(2) Contracting status

□ Applicable √ Not Applicable
There was no contracting in the company’s reporting period.


(3) Leasing situation

□ Applicable √ Not Applicable


                                                                                                                           116
                                                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

The Company has no leases during the reporting period.


2. Material Guarantee

√ Applicable □ Not Applicable
                                                                                                                                    Unit: CNY’0000

                    External guarantees of the Company and its subsidiaries (excluding guarantees to subsidiaries)

               Date of
              disclosure                                                                          Counter                                Whether
                                                                                                                           Is the
  Name of       of the                                                                            -guarant                                    to
                                           Actual date        Actual                                                      performa
     the     announcem Guarantee                                          Type of    Collateral     ee       Guarantee                  guarantee
                                                  of        guarantee                                                          nce
 guarantee    ent related        amount                                  guarantee     (if any)   situatio       Period                       for
                                           occurrence        amount                                                       complete
   object       to the                                                                             n (if                                  related
                                                                                                                                d
              guarantee                                                                            any)                                   parties
               amount

                                                       Company’s guarantees to subsidiaries

               Date of
              disclosure                                                                          Counter                                Whether
                                                                                                                           Is the
  Name of       of the                                                                            -guarant                                    to
                                           Actual date        Actual                                                      performa
     the     announcem Guarantee                                          Type of    Collateral     ee       Guarantee                  guarantee
                                                  of        guarantee                                                          nce
 guarantee    ent related        amount                                  guarantee     (if any)   situatio       Period                       for
                                           occurrence        amount                                                       complete
   object       to the                                                                             n (if                                  related
                                                                                                                                d
              guarantee                                                                            any)                                   parties
               amount

Arrow
             Aug.        24,               October 11,                  General
Fastener                       3,187.85                    3,187.85                                          1 year       No            Yes
             2021                          2021                         Guarantee
Co., LLC

Arrow
             October 22,                   October 22,                  General
Fastener                       3,187.85                    3,187.85                                          1 year       Yes           Yes
             2020                          2020                         Guarantee
Co., LLC

New Earth
Hardware     June        22,               January 07,                  General
                               10,000                      6,800                                             3 years      No            Yes
Products     2020                          2021                         Guarantee
Co., Ltd.

                                                                                                             2018/8/31
Greatstar    July        03,               August 31,                   General
                               47,650.02                   25,268.95                                         -2023/7/2 No               Yes
Europe AG 2018                             2018                         Guarantee
                                                                                                             7

                                                                                                             2021/12/2
Greatstar    December                      December                     General
                               24,546.98                                                                     7-2027/6/ No               Yes
Europe AG 04, 2021                         27, 2021                     Guarantee
                                                                                                             30

Hongkong October 16, 49,059.1              October 19, 49,059.1         General                              2021/10/1 Yes              Yes



                                                                                                                                                    117
                                                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

GreatStar         2021                       2021                                 Guarantee                              9-2028/10
Internationa                                                                                                             /18
l Co., Ltd.

Total         amount          of
                                                              Total       actual      amount
guarantees                    to
                                                              incurred for guarantees
subsidiaries        approved 77,515.9                                                           86,781.78
                                                              to subsidiaries during
during      the     reporting
                                                              the reporting period (B2)
period (B1)

Total         amount          of
                                                              Total actual guarantee
guarantees                    to
                                                              balances to subsidiaries
subsidiaries approved at 138,353.77                                                             83,593.93
                                                              at    the     end      of   the
the end of the reporting
                                                              reporting period (B4)
period (B3)

                                                         Subsidiaries’ guarantees to subsidiaries

                   Date of
                  disclosure                                                                                  Counter                           Whether
                                                                                                                                      Is the
  Name of           of the                                                                                    -guarant                             to
                                             Actual date           Actual                                                            performa
     the          announcem Guarantee                                              Type of       Collateral     ee       Guarantee              guarantee
                                                    of         guarantee                                                               nce
 guarantee        ent related      amount                                          guarantee      (if any)    situatio    Period                   for
                                             occurrence            amount                                                            complete
   object           to the                                                                                     n (if                             related
                                                                                                                                        d
                  guarantee                                                                                    any)                              parties
                   amount

                                     Total corporate guarantees (i.e., the sum of the first three major items)

                                                              Total actual amount of
Total      amount        of   guarantee
                                                              guarantees             incurred
approved during the reporting 77,515.9                                                          86,781.78
                                                              during        the     reporting
period (A1+B1+C1)
                                                              period (A2+B2+C2)

                                                              Total actual guarantee
Total      amount        of   approved
                                                              balance at the end of the
guarantees at the end of the 138,353.77                                                         83,593.93
                                                              reporting                period
reporting period (A3+B3+C3)
                                                              (A4+B4+C4)

Total actual guarantees (i.e. A4+B4+C4) % of the
                                                              7.89%
company’s net assets

Where:

The specific description of the use of composite guarantee


3. Entrusting others with cash asset management

(1) Entrusted financial management

√ Applicable □ Not Applicable



                                                                                                                                                         118
                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Overview of entrusted financial management during the reporting period
                                                                                                                       Unit: CNY’0000

                       Sources of funds for                                                                     Impaired amount for
                                                Entrusted wealth                           Amount overdue for
    Specific type        entrusted wealth                            Outstanding balance                            overdue financial
                                                  management                                   collection
                          management                                                                                  management

Bank          Wealth
Management             Own funds              241,264.23             35,000                0                    0
Products

Total                                         241,264.23             35,000                0                    0

High-risk entrusted financial management with significant single amount or low security and low liquidity
□ Applicable √ Not Applicable
The entrusted financial management has an expected uncollectible principal or other circumstances that may lead to impairment
□ Applicable √ Not Applicable


(2) Entrusted loans

□ Applicable √ Not Applicable
The Company did not have entrusted loans during the reporting period.


4. Other major contracts

□ Applicable √ Not Applicable
The Company has no other significant contracts during the reporting period.


XVI. Description of Other Significant Matters

√ Applicable □ Not Applicable

      1. On January 22, 2021, the Company held the Fifth Meeting of the Fifth Session of the Board of Directors
and considered and passed the “Proposal on Early Redemption of the ‘GreatStar Convertible Bonds’”. The
Company has agreed to exercise the conditional redemption right of the “GreatStar Convertible Bonds” and
redeem all the unconverted “GreatStar Convertible Bonds” registered in the Shenzhen Branch of China Securities
Depository and Clearing Corporation after the close of business on the redemption registration date (February 23,
2021) at the price of the face value of the bonds plus the accrued interest for the period. Upon completion of the
redemption, the “GreatStar Convertible Bonds” will be delisted from the Shenzhen Stock Exchange from March 5,
2021. For details, please refer to the Announcements No. 2021-003, 2021-004 and 2021-005 disclosed at
http://www.cninfo.com.cn on January 23, 2021, No. 2021-019 disclosed at http://www.cninfo.com.cn on February
24, 2021 and No. 2021-019 disclosed at http://www.cninfo.com.cn on February 24, 2021 and No. 2021-022 and
2021-023 on March 05, 2021 at http://www.cninfo.com.cn.
      2. On March 29, 2021, the Sixth Meeting of the Fifth Session of the Board of Directors of the Company
considered and approved the “Proposal on Capital Increase and Acquisition of Assets from Wholly-owned
Subsidiary”, in which GreatStar Europe AG, a wholly-owned subsidiary of the Company, purchased the relevant
assets of JFB AG by way of cash payment at a transaction price of EUR27.9 million and completed the delivery
of the assets within the reporting period. For details, please refer to the Company’s Announcements No. 2021-026

                                                                                                                                    119
                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

and 2021-027 disclosed on March 30, 2021 at http://www.cninfo.com.cn and No. 2021-057 disclosed on June 3,
2021 at http://www.cninfo.com.cn.
     3. At the Seventh Meeting of the Fifth Session of the Board of Directors held on April 1, 2021, the Company
considered and approved the “Proposal on Signing the Investment Letter of Intent”, and at the Tenth Meeting of
the Fifth Session of the Board of Directors held on June 15, 2021, the Company considered and approved the
“Proposal on Changing the Subject of Implementation of the Acquisition”, in which Hongkong GreatStar
International Co., Ltd., a wholly-owned subsidiary of the Company, purchased 100% stake in Geelong Holdings
Limited by paying cash, and the final price of the transaction was $128.24 million. The delivery of the assets was
completed during the reporting period. For details, please refer to the Announcement No. 2021-030, 2021-062,
2021-065, 2021-068 disclosed athttp://www.cninfo.com.cn.

XVII. Significant matters of the Company’s subsidiaries

□ Applicable √ Not Applicable




                                                                                                              120
                                                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




                        Section VII. Changes in Shares and Shareholders

I. Changes in Shares

1. Change of shares

                                                                                                                                          Unit: Shares

                                               Before this change          Increase or decrease in this change (+, -)             After this change

                                                                                           Transfer
                                                                    Issue of
                                                        Proportio                Share       from                                          Proportio
                                           Quantity                  new                                  Other    Subtotal   Quantity
                                                            n                   Delivery provident                                             n
                                                                    shares
                                                                                             fund

I. Shares subject to limited 62,718,68                                                                -1,378,90 -1,378,90 61,339,78
                                                        5.83%                                                                             5.36%
sale                                       9                                                          3           3           6

1. State shareholding                      0            0.00%                                         0           0           0           0.00%

2. State-owned legal person
                                           0            0.00%                                         0           0           0           0.00%
shareholding

3.         Other           domestic 62,718,68                                                         -1,378,90 -1,378,90 61,339,78
                                                        5.83%                                                                             5.36%
shareholdings                              9                                                          3           3           6

Where:       shares        held      by
                                           0            0.00%                                         0           0           0           0.00%
domestic legal persons

Domestic         natural      person 62,718,68                                                        -1,378,90 -1,378,90 61,339,78
                                                        5.83%                                                                             5.36%
shareholding                               9                                                          3           3           6

4. Foreign shareholding                    0            0.00%                                         0           0           0           0.00%

Where: shares held by foreign
                                           0            0.00%                                         0           0           0           0.00%
legal persons

Foreign       natural         person
                                           0            0.00%                                         0           0           0           0.00%
shareholding

II. Shares with unlimited sale 1,012,529,                                                             69,569,69 69,569,69 1,082,098
                                                        94.17%                                                                            94.64%
conditions                                 011                                                        5           5           ,706

                                           1,012,529,                                                 69,569,69 69,569,69 1,082,098
1. RMB ordinary shares                                  94.17%                                                                            94.64%
                                           011                                                        5           5           ,706

2. Domestic listed foreign
                                           0            0.00%                                         0           0           0           0.00%
shares

3.     Foreign     shares         listed
                                           0            0.00%                                         0           0           0           0.00%
abroad

4. Other                                   0            0.00%                                         0           0           0           0.00%



                                                                                                                                                   121
                                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


                                  1,075,247,                                                   68,190,79 68,190,79 1,143,438
III. Total number of shares                    100.00%                                                                               100.00%
                                  700                                                          2            2            ,492

Reasons for share changes
√ Applicable □ Not Applicable
During the reporting period, the total share capital of the Company increased by 68,190,792 shares due to the conversion of the
“GreatStar Convertible Bonds”; the change in restricted shares was due to the reduction of shares held by senior management and the
departure of supervisors upon the expiration of their terms of office.
Approval of share changes
□ Applicable √ Not Applicable
Transfer of share changes
□ Applicable √ Not Applicable
Effect of share changes on financial indicators such as basic and diluted earnings per share and net assets per share attributable to
ordinary shareholders of the Company for the latest year and the latest period
□ Applicable √ Not Applicable
Other content that the company considers necessary or that the securities regulator requires to be disclosed
□ Applicable √ Not Applicable


2. Change of Restricted Shares

√ Applicable □ Not Applicable
                                                                                                                                     Unit: Shares

                         Number of            Increase in the   Number of shares       Number of
                      restricted shares         number of        released from     restricted shares        Reason for
Shareholder Name                                                                                                                 Release Date
                      at the beginning    restricted shares      restricted sale   at the end of the    Restricted Sale
                        of the period     during the period during the period           period

                                                                                                       Term of office
Yu Wentian           548,610              0                     548,610            0                                        2021-03-01
                                                                                                       expires

                                                                                                       Executive
Wang Weiyi           771,525              0                     192,881            578,644                                  2021-01-01
                                                                                                       lock-up shares

                                                                                                       Executive
Wang Xie             760,200              0                     190,050            570,150                                  2021-01-01
                                                                                                       lock-up shares

                                                                                                       Executive
Li Zheng             676,470              0                     169,118            507,352                                  2021-01-01
                                                                                                       lock-up shares

                                                                                                       Executive
Li Feng              812,977              0                     203,244            609,733                                  2021-01-01
                                                                                                       lock-up shares

                                                                                                       Executive
Chi Xiaoheng         622,462              0                     75,000             547,462                                  2021-01-01
                                                                                                       lock-up shares

Total                4,192,244            0                     1,378,903          2,813,341           --                   --




                                                                                                                                             122
                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual


II. Securities Issuance and Listing

1. Securities issuance (excluding preferred shares) during the reporting period

□ Applicable √ Not Applicable


2. Description of changes in the total number of shares and shareholder structure of the company, and
changes in the structure of the company’s assets and liabilities

√ Applicable □ Not Applicable

On January 4, 2021, the “GreatStar Convertible Bonds” entered into the conversion period, and the
bondholders implemented the conversion, resulting in a change in the total share capital of the
Company. As the “GreatStar Convertible Bonds” met the conditional redemption clause, the Board of
Directors of the Company decided to exercise the redemption right and the “GreatStar Convertible
Bonds” ceased trading and conversion on February 24, 2021 and was delisted from Shenzhen Stock
Exchange from March 5, 2021. The total share capital of the Company increased by 68,190,792
shares as a result of the conversion of the “GreatStar Convertible Bonds”, and the total share capital
of the Company increased to 1,143,438,492 shares.

3. Status of existing internal employee shares

□ Applicable √ Not Applicable


III. Shareholders and Actual Controllers

1. Number of shareholders and shareholdings of the Company

                                                                                                                             Unit: Shares

                                                                                                      Total number of
                                                                                                      preferred
                                                                     Total number of                  shareholders
                                    Total number of
                                                                     preferred                        whose         voting
Total    number                     ordinary
                                                                     shareholders                     rights         were
of       ordinary                   shareholders    at
                                                                     whose           voting           restored at the
shareholders at                     the end of the
                    23,535                               70,877      rights            were 0         end      of      the 0
the end of the                      previous   month
                                                                     restored at the end              previous      month
reporting                           before the date of
                                                                     of      the   reporting          prior to the date
period                              disclosure of the
                                                                     period (if any) (See             of disclosure of
                                    annual report
                                                                     Note 8)                          the annual report,
                                                                                                      if any (see Note
                                                                                                      8)

                              Shareholders holding more than 5% or the top 10 shareholders’ shareholdings

Shareholder Name             Nature of    Sharehold Number        Increase     Number      Number     Pledged, tagged or frozen



                                                                                                                                     123
                                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

                             Shareholder      ing ratio of shares          or     of shares of shares
                                                           held at   decrease held with held under
                                                       the end of        in the       limited   unlimited
                                                                                                            Share Status   Quantity
                                                            the      reporting        selling        sale
                                                        reporting        period   condition conditions
                                                           period                        s

                          Domestic
GreatStar Holding                                      463,739,8                                463,739,8
                          non-state   legal 40.56%                   0.00         0
Group Co., Ltd.                                        64                                       64
                          person

Hong              Kong
                          Offshore    legal            78,770,24                                78,770,24
Securities Clearing                           6.89%                  45755281 0
                          entity                       2                                        2
Company Limited

                          Domestic natural             45,817,50 -1506680 45,663,22
Qiu Jianping                                  4.01%                                             154,275
                          persons                      0             0            5

China     Merchants
Bank Co., Ltd -
Ruiyuan          Growth                                28,900,54                                28,900,54
                          Other               2.53%                  10669061 0
Value            Hybrid                                6                                        6
Securities
Investment Fund

Industrial          and
Commercial Bank
of China - Guangfa                                     22,000,00                                22,000,00
                          Other               1.92%                  22000000 0
Stable           Growth                                0                                        0
Securities
Investment Fund

China     Merchants
Bank Corporation -
BOCOM Schroder                                         19,417,76                                19,417,76
                          Other               1.70%                  19417764 0
New              Growth                                4                                        4
Hybrid       Securities
Investment Fund

Monetary
Authority            of Offshore      legal            15,743,33                                15,743,33
                                              1.38%                  14835239 0
Macau        -     Own entity                          9                                        9
Funds

China Construction
Bank Corporation -
BOCOM Schroder                                         14,303,09                                14,303,09
                          Other               1.25%                  1195059 0
Economic           New                                 9                                        9
Dynamic          Hybrid
Securities


                                                                                                                                      124
                                                                              Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

Investment Fund

Agricultural Bank
of China Limited -
BOCOM Schroder                                                  14,200,79                       14,200,79
                         Other                      1.24%                   14200799 0
Selection      Hybrid                                           9                               9
Securities
Investment Fund

Agricultural Bank
of China Limited -
                                                                13,260,68                       13,260,68
Harvest Emerging Other                              1.16%                   -2409300 0
                                                                7                               7
Industry       Equity
Fund

Strategic      investors       or      general
corporations      becoming            top      10
shareholders      as     a   result    of      the None
placement of new shares (if any) (see
Note 3)

Description of the above shareholders’ GreatStar Group Co., Ltd. and Qiu Jianping are related and are parties acting in concert as
affiliation or concerted action                     defined in the “Regulations Governing the Acquisition of Listed Companies”.

Description of the above shareholders
involved in proxy/trustee voting rights None
and abstention from voting rights

Special note on the existence of
repurchase special accounts among the
                                                    None
top 10 shareholders (if any) (See Note
10)

                                            Shares held by the top 10 shareholders without selling restrictions

                                                           Number of shares held under unlimited sale                 Type of shares
             Shareholder Name
                                                         conditions at the end of the reporting period       Type of shares         Quantity

                                                                                                            RMB      Ordinary
GreatStar Holding Group Co., Ltd.                                                             463,739,864                       463,739,864
                                                                                                            Shares

Hong       Kong        Securities     Clearing                                                              RMB      Ordinary
                                                                                               78,770,242                       78,770,242
Company Limited                                                                                             Shares

China Merchants Bank Co., Ltd -
                                                                                                            RMB      Ordinary
Ruiyuan       Growth         Value      Hybrid                                                 28,900,546                       28,900,546
                                                                                                            Shares
Securities Investment Fund

Industrial and Commercial Bank of
                                                                                                            RMB      Ordinary
China      - Guangfa Stable Growth                                                             22,000,000                       22,000,000
                                                                                                            Shares
Securities Investment Fund

China Merchants Bank Corporation -                                                             19,417,764 RMB        Ordinary 19,417,764


                                                                                                                                               125
                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

BOCOM         Schroder    New    Growth                                                            Shares
Hybrid Securities Investment Fund

Monetary Authority of Macau - Own                                                                  RMB      Ordinary
                                                                                      15,743,339                       15,743,339
Funds                                                                                              Shares

China Construction Bank Corporation
- BOCOM Schroder Economic New                                                                      RMB      Ordinary
                                                                                      14,303,099                       14,303,099
Dynamic Hybrid Securities Investment                                                               Shares
Fund

Agricultural Bank of China Limited -
                                                                                                   RMB      Ordinary
BOCOM Schroder Selection Hybrid                                                       14,200,799                       14,200,799
                                                                                                   Shares
Securities Investment Fund

Agricultural Bank of China Limited -
                                                                                                   RMB      Ordinary
Harvest Emerging Industry Equity                                                      13,260,687                       13,260,687
                                                                                                   Shares
Fund

National Social Security Fund 106                                                                  RMB      Ordinary
                                                                                      12,828,313                       12,828,313
Portfolio                                                                                          Shares

Description of the relationship or
concerted action among the top 10
shareholders with unlimited shares
                                           GreatStar Group Co., Ltd. and Qiu Jianping are related and are parties acting in concert as
outstanding, and between the top 10
                                           defined in the "Measures for the Administration of Takeovers of Listed Companies".
shareholders with unlimited shares
outstanding      and     the    top   10
shareholders

Description of the participation of the
top 10 common shareholders in the
                                           None
financing business (if any) (See Note
4)

Whether the top 10 ordinary shareholders and the top 10 shareholders of the Company’s ordinary shares with unlimited selling
conditions entered into agreed repurchase transactions during the reporting period
□ Yes √ No
The top 10 common shareholders and the top 10 shareholders of the Company’s common shares with unlimited selling conditions did
not enter into any agreed repurchase transactions during the reporting period.


2. Company’s controlling shareholders

Nature of controlling shareholders: natural person holding
Controlling shareholder type: natural person

                                                                                 Whether to obtain the right of abode in other countries
        Name of controlling shareholder                    Nationality
                                                                                                       or regions

Qiu Jianping                                      China                          No

Main occupation and position                      Chairman of the Board of Directors, Chairman of the Board of Directors of


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                                                       GreatStar Group

                                                       Hangcha Holdings Group Co., Ltd., stock code: 603298, stock abbreviation:
                                                       Hangcha Group, which was listed on the SSE on December 27, 2016, mainly deals
Equity interests in other domestic and foreign with industrial vehicle products such as forklift trucks and intelligent vehicles and
listed companies held and participated in major parts kits. Zhejiang Xinchai Co.,Ltd., stock code: 301032, stock abbreviation:
during the reporting period                            Xinchai, which was listed on the Shenzhen Stock Exchange on July 22, 2021, is
                                                       mainly engaged in the research and development, production and sales of off-road
                                                       diesel engines and related parts.

Change in controlling shareholder during the reporting period
□ Applicable √ Not Applicable
There was no change in the controlling shareholder of the Company during the reporting period.


3. The actual controller of the company and his concerted action

Nature of the actual controller: domestic natural person
Type of beneficial owner: natural person

                                            Relationship with the                           Whether to obtain the right of abode in other
    Name of the actual controller                                         Nationality
                                              beneficial owner                                          countries or regions

Qiu Jianping                                personal                 China                 No

Main occupation and position                Chairman of the Board of Directors, Chairman of the Board of Directors of GreatStar Group

Domestic       and     foreign     listed
companies      in    which   it   had   a Mr. Qiu Jianping is the de facto controller of Hangcha Group (stock code: 603298) and
controlling interest in the past 10 Zhejiang Xinchai Co., Ltd. (stock code: 301032).
years

Change in effective control during the reporting period
□ Applicable √ Not Applicable
There was no change in the effective control of the Company during the reporting period.
Block diagram of the ownership and control relationship between the company and the actual controller




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                                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




仇建平:Qiu Jianping
仇建平、王玲玲夫妇:Qiu Jianping and Wang Lingling
巨星控股集团有限公司:GreatSar Group
杭州巨星科技股份有限公司:Hangzhou GreatStar Industrial Co., Ltd.


Control of the company by the beneficial owner through trust or other asset management
□ Applicable √ Not Applicable


4. The number of shares pledged by the controlling shareholder or the largest shareholder of the company
and its concert parties reaches 80% of the number of shares held by the company

□ Applicable √ Not Applicable


5. Other corporate shareholders holding more than 10% of the shares

□ Applicable √ Not Applicable


6. Restrictions on shareholding reduction by controlling shareholders, actual controllers, restructuring
parties and other committed subjects

□ Applicable √ Not Applicable


IV. Specific Implementation of Share Repurchase in the Reporting Period

Progress of implementation of share buyback


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                                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual

√ Applicable □ Not Applicable

                                                                                                                          Number of
                                                                                                                          repurchased
                                                                                                                          shares as a
                                                                                                            Number of
    Program        Number of      Percentage of                      Proposed                                            percentage of
                                                  Amount to be                       Repurchase               shares
   Disclosure      shares to be     total share                     repurchase                                           the underlying
                                                   repurchased                           Purpose           repurchased
     Time          repurchased       capital                          period                                             shares covered
                                                                                                             (shares)
                                                                                                                         by the equity
                                                                                                                         incentive plan
                                                                                                                            (if any)

                                                                                   40%      of     the
                                                                                   repurchased
                                                                                   shares          are
                                                                                   intended to be
                                                                                   used      as      a
                                                                                   source           of
                                                                                   shares for the
                                                                                   employee stock
                                                                                   ownership plan
                                                                                   or          equity
                                                                                   incentive plan,
                                                  180000000-36 2021-7-6          to and 60% of the
July 06, 2021                                                                                             6,015,310
                                                  0000000         2022-7-6         repurchased
                                                                                   shares          are
                                                                                   intended to be
                                                                                   used     for    the
                                                                                   conversion       of
                                                                                   corporate
                                                                                   bonds       issued
                                                                                   by              the
                                                                                   company         that
                                                                                   can              be
                                                                                   converted into
                                                                                   shares

Progress in the implementation of share repurchase reduction by means of centralized competitive bidding
√ Applicable □ Not Applicable
As of December 31, 2021, the company repurchased 6,015,310 shares of the company through the special securities account for
repurchasing shares by centralized competitive bidding, accounting for 0.5261% of the total share capital of the company, with the
highest transaction price of RMB 32.70 per share and the lowest transaction price of RMB 27.41 per share, and the total amount of
funds used was RMB 186,441,914.48 (excluding transaction fees). The source of funds for the share repurchase was the company’s
own funds, and the repurchase price did not exceed the upper limit proposed in the repurchase program. The repurchase was in
compliance with the requirements of relevant laws and regulations, and was in line with the established share repurchase program.




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                                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual




                   Section VIII Preferred Stock Related Information

□ Applicable √ Not Applicable
The Company did not have any preferred shares during the reporting period.




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                                             Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report




                                  Section IX Bond Related information

□ Applicable √ Not Applicable




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                                             Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report




                                      Section XFinancial Reports

1. Audit Report

Type of audit opinion                                 Standard unqualified opinion

Audit report signing date                             April 11, 2022

                                                      Pan-China Certified Public Accountants (Special General
Name of audit institution
                                                      Partnership)

Name of certified public accountant                   Fei Fanghua, Li Xi

                                        Text of Audit Report
To all shareholders of Hangzhou GreatStar Industrial Co., Ltd:
     I. Audit Opinions
     We have audited the financial statements of Hangzhou GreatStar Industrial Co.,
Ltd.(hereinafter referred to as "GreatStar Industrial"), which comprise the consolidated balance
sheet and balance sheet of the parent company as at December 31, 2021, and the consolidated
income statement, the cash flow statement and the statement of changes on owners’ equity and the
income statement, the cash flow statement and the statement of changes on owners’ equity of the
parent company of 2021 and notes to the financial statements.
     In our opinion, the attached financial statements are prepared, in all material respects, in
accordance with the Accounting Standards for Business Enterprises and present fairly the
consolidated and parent company financial position as of December 31, 2021, and the consolidated
and parent company results of operations and cash flows for FY 2021 of GreatStar Industrial.
     II.Basis for the Audit Opinion
     We conducted our audit in accordance with the Auditing Standards for Certified Public
Accountants in China. Our responsibilities under those standards are further described in the
“Auditor's Responsibilities for the Audit of the Financial Statements” section of our report.
According to the Code of Ethics for Chinese CPA, we are independent of your Company and we
have fulfilled our other ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
     II. Key Audit Matters
     Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financialstatements of the current period. These matters were
addressed in the context of our audit of the financial statements as a whole, andin forming our
opinion thereon, and we do not express a separate opinion on these matters.
     (I)Revenue recognition
     1. Description
     Please refer to section V(II).1 and III(XXVI) of the notes to the financial statements for details.
     The Company’s operating revenue mainly comes from sales of hand tools, power tools, laser
measurement, storage, and personal protective equipment (PPE), etc. In 2021, the operating revenue


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                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

amounted to RMB 10,919,683,300. As operating revenue is one of the key performance indicators
of the GreatStar Industrial, there might be inherent risks that the Company’s management (the
“Management”) adopts inappropriate revenue recognition to achieve specific goals or expectations,
we have identified revenue recognition as a key audit matter.
      2. Responsive audit procedures
      Our main audit procedures for revenue recognition are as follows:
      (1)To obtain understandings of key internal controls related to revenue recognition, assess the
design of these controls, determine whether they had been executed, and test the effectiveness of the
operation;
      (2)To check sale contracts, obtain understandings of main contractual terms or conditions, and
assess whether the revenue recognition method was appropriate;
      (3)To perform analysis procedure on operating revenue and gross margin by month, product,
client, etc., so as to identify whether there are significant or abnormal fluctuations and find out the
reason of fluctuations;
      (4)To check supporting documents related to revenue recognition by sampling method,
including sales contracts, orders, sales invoices, delivery lists, delivery orders, shipping documents,
client acceptance receipts, etc. for revenue from domestic sales;to check supporting documents
including sales contracts, bills of clearance, waybills, client acceptance receipts, sales invoices, etc.
by sampling methodfor revenue from overseas sales;
      (5)To perform confirmation procedures on current sales amount by sampling method in
combination with confirmation procedures on accounts receivable;
      (6)To perform cut-off tests on the operating revenue recognized around the balance sheet date,
and assess whether the operating revenue was recognized in the appropriate period; and
      (7) To check whether information related to operating revenue had been presented
appropriately in the financial statements.
      (II) Impairment of goodwill
      1. Description of relevant events
      Please refer to section III (XX) and V(I).19 of the notes to the financial statements for details.
      As of December 31, 2021, the original book balance of goodwill of GreatStar Industrial
amounted to 2,439,941,360.42RMB, with provision for impairment of 134,160,736.56RMB, and
the carrying amount amounted to 2,305,780,623.86RMB.
      For asset group or asset group portfolio related to goodwill, if there is objective evidence
indicating impairment loss, the Management will perform impairment test on goodwill together
with related asset group or asset group portfolio at the end of each period, and the recoverable
amount of related asset group or asset group portfolio is determined based on the estimated present
value of future cash flows. Key assumptions adopted in the impairment test include: revenue growth
rate in detailed forecast period, growth rate in perpetual forecast period, gross margin, discount rate,
etc.
      As the amount of goodwill is significant and impairment test involves significant judgment of
the Management, we have identified impairment of goodwill as a key audit matter.
      2. Responsive audit procedures
      Our main audit procedures for impairment of goodwill are as follows:
      (1)To obtain understandings of key internal controls related to impairment of goodwill, assess
the design of these controls, determine whether they had been executed, and test the effectiveness of

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                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

their operation;
      (2)To review the present value of future cash flows estimated by the Management in previous
years and the actual operating results, and assess the accuracy of the Management’s historical
estimations;
      (3)To obtain understandings of and assess the competency, professional quality and objectivity
of external appraisers engaged by the Management;
      (4)To assess the reasonableness and consistency of impairment test method adopted by the
Management;
      (5)To assess the reasonableness of key assumptions used in impairment test and review
whether the relevant assumptions were consistent with overall economic environment, industry
condition, management situation, historical experience, and other assumptions related to the
financial statements used by the Management;
      (6)To test the accuracy, completeness and relativity of data used in the impairment test and
review the internal consistency of related information in the impairment test;
      (7)To test whether the calculation of estimated present value of future cash flows was accurate;
and
      (8)To check whether information related to impairment of goodwill had been presented
appropriately in the financial statements.
      IV. Other Information
      The Management is responsible for the other information. The other information comprises the
information included in the Company’s annual report, while excluding the financial statements and
our auditor’s report thereon.
      Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
      In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
      If, based on the work we have performed, we conclude that there is a material misstatement of
the other information, we are required to report that fact. We have nothing to report in this regard.
      V. Responsibilities of the Management and Those Charged with Governance for the
Financial Statements
      The Management is responsible for preparing and presenting fairly the financial statements in
accordance with China Accounting Standards for Business Enterprises, as well as designing,
implementing and maintaining internal control relevant to the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
      In preparing the financial statements, the Management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing matters related to going concern(as
applicable) 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 GreatStar(hereinafter referred to as “the governance”) are
responsible for overseeing the Company’s financial reporting process.
      VI. CPA’s Responsibilities for the Audit of the Financial Statements
      Our objectives are to obtain reasonable assurance about whether the financial statements as a

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                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with China Standards on Auditing will always
detect a material misstatement when it exists. Misstatement can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
      We exercise professional judgment and maintain professional skepticism throughout the audit
performed in accordance with China Standards on Auditing. We also:
      (1) Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control;
      (2)Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control.
      (3)Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the Management.
      (4)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 to draw attention in
our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
      (5)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.
      (6)Obtain sufficient and appropriate audit evidence regarding the financial information of the
entities or business activities within the Company to express an opinion on the financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
sole responsibility for our audit opinion.
      We communicate with those charged with governance regarding the planned audit scope, time
schedule and significant audit findings, including any deficiencies in internal control of concern that
we identify during our audit.
      We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, related safeguards.
      From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the current period
and are therefore the key audit matters. We describe these matters in our auditor’s report unless law

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                                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

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.

II.Financial Statements

The notes to financial statements expressed in Renminbi RMB.


1. Consolidated Balance Sheet

Compiled by: Hangzhou Great Star Industrial Co., Ltd.
                                                         December 31, 2021
                                                                                                                 Unit: Yuan

                    Item                            December 31, 2021                        December 31, 2020

Current assets:

Cash and bank balances                                             4,033,707,240.16                      3,750,506,068.39

Settlement funds

Loans to other banks

Held-for-trading financial assets                                     13,557,757.75                         63,751,278.55

Derivative financial assets

Notes receivable                                                       6,629,914.18                         11,530,057.49

Accounts receivable                                                1,798,265,505.53                      1,260,096,723.75

Receivables financing                                                559,020,827.52                        378,066,065.73

Prepaid expenses                                                      77,743,441.90                         80,008,380.84

Premiums receivable

Reinsurance accounts receivable

Reinsurance reserve receivable

Other receivables                                                     96,151,003.68                         58,613,172.02

Including: Interest receivable

                     Dividendsreceivable

     Buy-back financial assets

Inventories                                                        2,835,777,996.84                      1,386,320,837.86

Contract assets

Assets classified as held for sale


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                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Non-current assets due within one year                     90,708.80                            90,583.31

Other current assets                                  193,991,198.10                       146,623,787.19

Total current assets                                9,614,935,594.46                      7,135,606,955.13

Non-current assets:

Loans and advances paid

Debt investments

Other debt investments

Long-term receivables                                   2,721,241.71                          2,866,819.08

Long-term equity investments                        2,353,942,699.80                      2,207,878,459.67

Other    equity     instrument
                                                       16,550,000.00                         16,550,000.00
investments

Other non-current financial assets

Investment property                                   127,058,966.69

Fixed assets                                        1,494,547,487.29                      1,348,034,595.31

Construction in progress                              113,750,851.49                       166,268,204.96

Productive biological assets

Oil & gas assets

Right-of-use assets                                   411,722,761.66                       269,670,508.77

Intangible assets                                     671,293,451.61                       607,716,594.78

Development expenditures

Goodwill                                            2,305,780,623.86                      1,825,527,983.56

Long-term prepayments                                  26,745,962.25                         16,407,174.63

Deferred tax assets                                    64,333,652.79                         41,813,418.61

Other non-current assets                              103,771,593.06                         39,438,331.18

Total non-current assets                            7,692,219,292.21                      6,542,172,090.55

Total assets                                       17,307,154,886.67                     13,677,779,045.68

Current liabilities:

Short-term borrowings                               1,806,901,201.39                      1,015,117,910.75

Central bank loans

Loans from other banks

Held-for-trading       financial                         978,031.91


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                                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

liabilities

Derivative financial liabilities

Notes payable                                             51,728,000.00                         24,913,000.00

Accounts payable                                       1,640,430,929.84                      1,168,327,985.88

Advances received

Contract liabilities                                      91,235,951.19                         72,490,372.55

       Sale of repurchased financial
assets

Absorbing deposit and interbank
deposit

Deposit for agency security
transaction

Deposit                for         agency
securityunderwriting

Employee compensation payable                            264,073,705.38                       195,907,997.48

Taxes and rates payable                                  170,836,108.02                       185,995,732.67

Other payables                                           676,502,987.21                         26,425,047.57

Including: Interest receivable

Dividends receivable

Handling fee and commission
payable

Reinsurance accounts payable

Liabilities classified as held for sale

Non-current liabilities due within one
                                                         358,525,963.69                       221,714,183.90
year

Other current liabilities                                  2,501,196.81

Total current liabilities                              5,063,714,075.44                      2,910,892,230.80

Non-current liabilities:

Insurance policy reserve

Long-term borrowings                                   1,015,445,732.07                       509,555,882.91

Bonds payable                                                                                 799,729,005.89

Including: Preferred shares

                       Perpetualbonds



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                                                     Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


Lease liabilities                                                   289,196,511.02                             246,303,999.08

Long-term payables                                                                                                   1,499,174.07

Long-term                  Employee
                                                                     20,854,276.60                                  77,924,731.15
compensation payable

Provisions                                                             4,924,868.93                                  3,550,413.29

Deferred income                                                        2,802,244.63                                  3,992,738.59

Deferred tax liabilities                                             96,927,387.14                                  86,920,686.60

Other non-current liabilities

Total non-current liabilities                                     1,430,151,020.39                            1,729,476,631.58

Total liabilities                                                 6,493,865,095.83                            4,640,368,862.38

Equity:

Share capital                                                     1,143,438,492.00                            1,075,247,700.00

Other equity instruments                                                                                       190,509,257.28

Including: Preferred shares

                    Perpetualbonds

Capital reserve                                                   2,924,951,844.93                            2,095,044,541.15

Less: Treasury shares                                               186,441,914.48                             105,492,690.23

Other comprehensive income                                         -229,774,189.10                             -105,837,346.87

Special reserve

Surplus reserve                                                     598,543,176.63                             521,602,764.46

General risk reserve

Undistributed profit                                              6,348,179,336.72                            5,155,116,352.49

Total equity attributable to the parent
                                                                 10,598,896,746.70                            8,826,190,578.28
company

Non-controlling interest                                            214,393,044.14                              211,219,605.02

Total owners’ equity                                            10,813,289,790.84                            9,037,410,183.30

Total liabilities &owners’equity                                17,307,154,886.67                           13,677,779,045.68


Legal representative:QiuJianping Officer in charge of accounting:NiShuyi   Head of accounting department: NiShuyi


2. Parent company balance sheet

                                                                                                                        Unit: Yuan


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                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


        Items                             December 31, 2021                    December 31, 2020

Current assets:

Cash and bank balances                                2,206,647,760.44                     2,287,675,650.67

Held-for-trading financial assets                         2,805,400.00                        13,386,400.00

Derivative financial assets

Notes receivable                                          3,817,503.68                         8,314,207.49

Accounts receivable                                     972,916,000.96                     1,275,860,264.50

Receivables financing                                   370,836,450.93                       368,774,999.78

Prepaid expenses                                         15,407,186.40                        39,010,545.50

Other receivables                                     1,458,883,819.83                       883,363,518.44

Including: Interest receivable

                    Dividendsreceivable

Inventories                                              68,823,270.52                        77,384,999.66

Contract assets

Assets classified as held for sale

Non-current assets due within one year

Other current assets                                     51,228,927.28                        65,377,083.73

Total current assets                                  5,151,366,320.04                     5,019,147,669.77

Non-current assets:

Debt investments

Other debt investments

Long-term receivables

Long-term equity investments                          6,509,236,517.72                     5,155,164,634.30

Other    equity     instrument
                                                         16,550,000.00                        16,550,000.00
investments

Other non-current financial assets

Investment property

Fixed assets                                            148,222,773.14                       142,635,599.93

Construction in progress                                  6,172,215.82                         5,723,398.50

Productive biological assets

Oil & gas assets


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                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


Right-of-use assets

Intangible assets                                       16,166,495.20                         17,746,992.84

Development expenditures

Goodwill

Long-term prepayments

Deferred tax assets                                     12,054,042.27                         15,288,010.17

Other non-current assets                                 5,741,206.20                          1,957,642.06

Total non-current assets                             6,714,143,250.35                      5,355,066,277.80

Total assets                                        11,865,509,570.39                     10,374,213,947.57

Current liabilities:

Short-term borrowings                                1,547,295,724.96                       960,645,447.14

Held-for-trading        financial
liabilities

Derivative financial liabilities

Notes payable

Accounts payable                                       389,834,880.42                       738,095,592.36

Advances received

Contract liabilities                                    46,268,755.74                         39,453,211.46

Employee compensation payable                           46,155,738.14                         45,611,342.23

Taxes and rates payable                                 76,469,338.83                       103,261,356.89

Other payables                                         585,010,369.48                         23,933,506.71

Including: Interest payable

Dividends payable

Liabilities classified as held for sale

Non-current liabilities due within one
                                                        82,994,001.43                         73,585,483.86
year

Other current liabilities                                 427,742.00

Total current liabilities                            2,774,456,551.00                      1,984,585,940.65

Non-current liabilities:

Long-term borrowings                                   391,626,437.89                       220,836,522.82

Bonds payable                                                                               799,729,005.89



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                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


Including: Preferred shares

Perpetual bonds

Lease liabilities

Long-term payables

Long-term                  Employee
compensation payable

Provisions

Deferred income                                       1,556,851.32                          2,377,073.64

Deferred tax liabilities                              1,799,743.40                          6,363,085.38

Other non-current liabilities

Total non-current liabilities                       394,983,032.61                       1,029,305,687.73

Total liabilities                                3,169,439,583.61                        3,013,891,628.38

Equity:

Share capital                                    1,143,438,492.00                        1,075,247,700.00

Other equity instruments                                                                  190,509,257.28

Including: Preferred shares

Perpetual bonds

Capital reserve                                  2,930,657,501.76                        2,103,492,365.12

Less: Treasury shares                               186,441,914.48                        105,492,690.23

Other comprehensive income                          -84,939,637.21                         -27,385,736.04

Special reserve

Surplus reserve                                     594,794,879.72                        517,854,467.55

Undistributed profit                             4,298,560,664.99                        3,606,096,955.51

Total owners’equity                             8,696,069,986.78                        7,360,322,319.19

Total liabilities &owners’equity               11,865,509,570.39                     10,374,213,947.57


3. Consolidated income statement

                                                                                                Unit: Yuan

                    Item                  FY 2021                              FY 2020

I. Total operating revenue                      10,919,683,344.37                        8,544,440,154.30

Including: Operating revenue                    10,919,683,344.37                        8,544,440,154.30


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                                              Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


Interest income

Premium earned

Revenue from handling charges and
commission

II. Total operating cost                                 9,865,931,262.26                      7,272,261,104.74

Including: Operating cost                                8,176,123,668.50                      5,926,765,895.76

Interest expenses

Handling     charges       and   commission
expenditures

Surrender value

Net payment of insurance claims

Net provision of insurance policy reserve

Premium bonus expenditures

Reinsurance expenses

Taxes and surcharges                                        36,118,676.84                         27,268,787.92

Selling expenses                                           593,003,103.68                       458,274,408.65

Administrative expenses                                    686,120,731.06                       500,999,938.00

R&D expenses                                               309,763,366.15                       245,372,069.36

Financial expenses                                          64,801,716.03                        113,580,005.05

Including: Interest expenses                                59,754,089.36                         69,915,383.28

Interest income                                             59,709,415.20                         58,134,194.43

Add: Other income                                           47,550,853.31                         33,486,910.24

Investment income (losses shall be
                                                           370,298,858.39                       296,551,290.93
presented with a “-” sign)

Including: Investment income from
                                                           253,722,685.68                       260,530,217.44
associates and joint ventures

Gains from derecognition of financial
assets at amortized cost

Gains on foreign exchange (losses shall
be presented with a "-" sign)

Gains on net exposure to hedging
risk (losses shall be presented
with a "-" sign)

Gains on changes in fair value (losses
                                                           -23,610,602.75                         31,920,861.95
shall be presented with a "-" sign)


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                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


Credit impairment loss                                        -44,330,212.07                        -28,131,844.44

Assets impairment loss                                        -23,131,165.61                        -93,484,567.00

Gains on asset disposal (losses shall be
                                                               -3,020,089.44                           -300,665.75
presented with a "-" sign)

III. Operating profit (losses shall be
                                                            1,377,509,723.94                      1,512,221,035.49
presented with a "-" sign)

Add: Non-operating revenue                                     87,347,950.40                         54,877,063.15

Less: Non-operating expenditures                                6,324,391.50                          2,823,350.71

IV. Profit before tax (total loss shall be
                                                            1,458,533,282.84                      1,564,274,747.93
presented with a "-" sign)

Less: Income tax                                              161,218,083.23                       199,780,159.49

V. Net profit (net loss shall be presented
                                                            1,297,315,199.61                      1,364,494,588.44
with a "-" sign)

(I) Categorized by the continuity of
operations

1. Net profit from continuing
operations (net loss shall be                               1,297,315,199.61                      1,364,494,588.44
presented with a "-" sign)

2. Net profit from discontinued
operations (net       loss   shall   be
presented with a "-" sign)

(II) Categorized by the portion of
equity ownership

1. Net profit attributable to owners of
parent company (net loss shall be                           1,270,003,396.40                      1,350,132,516.91
presented with a "-" sign)

2.    Net    profit   attributable to     non-
controlling shareholders (net loss shall be                    27,311,803.21                         14,362,071.53
presented with a "-" sign)

VI. Other comprehensive income after
                                                             -124,287,257.00                       -250,850,396.50
tax

Items attributable to the owners of the
                                                             -123,936,842.23                       -250,842,746.43
parent company

(I)         Not       to       be
reclassifiedsubsequently       to                              71,842,154.00                        -81,601,512.40
profit or loss

1. Changes in remeasurement on the net
                                                               71,842,154.00                        -35,338,213.90
defined benefit plan



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                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

2. Items under equity method that will not
be reclassified to profit or loss

3. Changes in fair value of other equity
                                                                                                                         888,118.45
instrument investments

4. Changes in fair value of own credit risk

5. Others                                                                                                            -47,151,416.95

(II) To be reclassified subsequently to
                                                                        -195,778,996.23                            -169,241,234.03
profit or loss

1. Items under equity method that may be
                                                                         -57,553,901.17                              -24,606,788.10
reclassified to profit or loss

2. Changes in fair value of other debt
investments

3. Profit or loss from reclassification
of      financial   assets   into   other
comprehensive income

4. Provision for credit impairment of
other debt investments

5. Cash flow hedging reserve

6. Translation reserve                                                  -138,225,095.06                            -144,634,445.93

7. Others

Items attributable to non-controlling
                                                                            -350,414.77                                   -7,650.07
shareholders

VII. Total comprehensive income                                        1,173,027,942.61                            1,113,644,191.94

Items attributable to the owners of the
                                                                       1,146,066,554.17                           1,099,289,770.48
parent company

Items attributable to non-controlling
                                                                          26,961,388.44                              14,354,421.46
shareholders

VIII. Earnings per share (EPS):

(I) Basic EPS (yuan per share)                                                     1.13                                        1.27

(II) Diluted EPS (yuan per share)                                                  1.13                                        1.25

For the business combination under common control in the current period, the combined party achieved net profit XXRMB, and
XXRMB last period


Legal     representative: Qiu Jianping      Officer in charge of accounting: Ni ShuyiHead of accounting department:Ni Shuyi


4. Parent company income statement

                                                                                                                          Unit: Yuan


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                                              Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

                   Item                          FY 2021                               FY 2020

I. Operating revenue                                       5,221,628,054.56                      5,365,589,947.72

Less: Operating cost                                       4,191,586,370.63                      4,064,180,496.50

Taxes and surcharges                                          3,914,655.88                          4,142,069.22

Selling expenses                                            148,931,778.67                        138,139,974.93

Administrative expenses                                     149,112,457.48                        121,245,790.31

R&D expenses                                                179,141,639.18                        178,566,920.53

Financial expenses                                           14,697,466.10                        172,866,787.25

Including: Interest expenses                                 34,320,239.29                         58,234,894.08

Interest income                                              60,903,121.60                         48,047,881.09

Add: Other income                                            30,673,586.63                         11,142,990.59

Investment income (losses shall be
                                                            328,237,087.74                        356,483,772.96
presented with a "-" sign)

Including: Investment income from
                                                            254,321,468.97                        260,562,082.75
associates and joint ventures

Gains fromderecognition of financial
assets at amortized cost (losses shall be
presented with a "-" sign)

Gains on net exposure to hedging
risk (losses shall be presented
with a "-" sign)

Gains on changes in fair value (losses
                                                             -10,581,000.00                        11,254,759.69
shall be presented with a "-" sign)

Credit impairment loss                                       -14,920,249.84                        -43,237,697.59

Assets impairment loss                                         -458,846.42                             -73,695.67

Gains on asset disposal (losses shall be
                                                                 74,881.50
presented with a "-" sign)

II. Operating profit (losses shall be
                                                            867,269,146.23                       1,022,018,038.96
presented with a "-" sign)

Add: Non-operating revenue                                      381,632.32                            380,675.34

Less: Non-operating expenditures                                714,318.83                          1,334,925.87

III. Profit before tax (total loss shall be
                                                            866,936,459.72                       1,021,063,788.43
presented with a "-" sign)

Less: Income tax                                             97,532,338.07                        103,604,790.84




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                                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


IV. Net profit (net loss shall be
                                                         769,404,121.65                       917,458,997.59
presented with a "-" sign)

(I) Net profit from continuing
operations (net loss shall be                            769,404,121.65                       917,458,997.59
presented with a "-" sign)

(II) Net profit from discontinued
operations (net loss shall be presented
with a "-" sign)

V. Other comprehensive income after
                                                         -57,553,901.17                        -70,870,086.60
tax

(I) Not to be reclassified
                                                                                               -46,263,298.50
subsequently to profit or loss

1. Changes inremeasurement on
the net defined benefit plan

2. Items under equity method that
will not be reclassified to profit or
loss

3. Changes in fair value of other equity
                                                                                                  888,118.45
instrument investments

4. Changes in fair value of own credit
risk

5. Others                                                                                      -47,151,416.95

(II)    To    be   reclassified
                                                         -57,553,901.17                        -24,606,788.10
subsequently to profit or loss

1. Items under equitymethod that may
                                                         -57,553,901.17                        -24,606,788.10
be reclassified to profit or loss

2. Changes in fair value of other debt
investments

3. Profit or loss from reclassification
of     financial   assets    into   other
comprehensive income

4. Provision for credit impairment of
other debt investments

5. Cash flow hedging reserve

6. Translation reserve

7. Others

VI. Total comprehensive income                           711,850,220.48                       846,588,910.99

VII. Earnings per share (EPS):



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                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


(I) Basic EPS (yuan per share)

(II) Diluted EPS (yuan per share)


5.Consolidated cash flow statement

                                                                                                     Unit: Yuan

                     Item                     FY 2021                               FY 2020

I. Cash flows from operating activities:

Cash receipts from sales of goods or
                                                     10,523,385,725.14                        8,062,725,580.89
rendering of services

Net increase of client deposit and
interbank deposit

Net increase of central bank loans

Net increase of loans from other
financial institutions

Cash receipts from original insurance
contract premium

Net cash receipts from reinsurance

Net increase of policy-holder
deposit and investment

Cash      receipts   from    interest,
handling charges and commission

Net increase of loans from others

Net increase of repurchase

Net cash receipts from agency
security transaction

Receipts of tax refund                                   670,357,690.68                        561,244,609.68

Other cash receipts related to
                                                         160,238,749.92                        109,278,105.56
operating activities

Subtotal of cash inflows from operating
                                                     11,353,982,165.74                        8,733,248,296.13
activities

Cash      payments     for   goods
                                                        8,138,089,857.73                      5,804,488,157.96
purchased and services received

Net increase of loans and advances to
clients

Net increase of central bank
deposit and interbank deposit




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                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Cash             payments                for
insuranceindemnities         of     original
insurance

contracts

Net increase of loans to others

Cash    payments       for   interest,
handling charges and commission

Cash payments for policy bonus

Cash paid to employees or
                                                          1,806,978,106.79                      1,260,836,147.62
payments on behalf of employees

Cash payments for taxes and rates                           365,159,229.48                       250,159,571.54

Other cash payments related to
                                                          1,025,122,802.07                       646,613,793.77
operating activities

Subtotal of cash outflows from
                                                         11,335,349,996.07                      7,962,097,670.89
operating activities

Net cash flows from operating activities                     18,632,169.67                       771,150,625.24

II. Cash flows from investing activities:

Cash receipts from withdrawal of
                                                            399,043,604.99                       289,698,875.26
investments

Cash receipts from investment income                        121,150,687.38                         55,754,289.66

Net cash receipts from the disposal of
fixed assets, intangible assets and other                    50,825,512.05                          3,231,084.97
long-term assets

Net cash receipts from the disposal of
subsidiaries & other business entities

Other cash receipts related to
                                                              5,945,450.31                         22,822,339.65
investing activities

Subtotal of cash inflows from investing
                                                            576,965,254.73                       371,506,589.54
activities

Cash payments for the acquisition of
fixed assets, intangible assets and other                   541,990,133.84                       624,730,486.29
long-term assets

Cash payments for investments                               321,320,000.00                         80,000,000.00

Net increase of pledged
borrowings

Net cash payments for the
acquisition of subsidiaries & other                         923,935,753.71                         39,098,825.84
business entities


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                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


Other cash payments related toinvesting
                                                          2,788,158.98                         26,271,291.33
activities

Subtotal of cash outflows from
                                                      1,790,034,046.53                       770,100,603.46
investing activities

Net cash flows from investing activities             -1,213,068,791.80                       -398,594,013.92

III. Cash flows from financing
activities:

Cash receipts from absorbing
investments

Including: Cash received by
subsidiaries                   from
non-controlling shareholders as
investments

Cash receipts from borrowings                         3,832,766,206.58                      3,574,198,154.01

Other cash receipts related to
                                                        583,000,000.00                        315,512,811.43
financing activities

Subtotal of cash inflows from financing
                                                      4,415,766,206.58                      3,889,710,965.44
activities

Cash payments for the repayment of
                                                      2,540,690,729.79                      2,639,719,781.54
borrowings

Cash payments for distribution of
dividends or profits and for interest                    53,626,407.90                         44,740,777.99
expenses

Including:     Cash     paid     by
subsidiaries to non-controlling                            755,470.43                           1,471,395.20
shareholders as dividend or profit

Other cash payments related to
                                                        290,674,869.30                         46,125,271.70
financing activities

Subtotal of cash outflows from
                                                      2,884,992,006.99                      2,730,585,831.23
financing activities

Net cash flows from financing activities              1,530,774,199.59                      1,159,125,134.21

IV. Effect of foreign exchange rate
                                                        -65,414,554.36                         71,124,025.21
changes on cash & cash equivalents

V. Net increase in cash and cash
                                                        270,923,023.10                      1,602,805,770.74
equivalents

Add: Opening balance of cash and cash
                                                      3,730,263,218.08                      2,127,457,447.34
equivalents

VI. Closing balance of cash and cash
                                                      4,001,186,241.18                      3,730,263,218.08
equivalents


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                                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

6.Parent company cash flow statement

                                                                                                      Unit: Yuan

                   Item                        FY 2021                               FY 2020

I. Cash flows from operating activities:

Cash receipts from sale of goods and
                                                         5,540,994,419.37                      4,634,619,462.59
rendering of services

Receipts of tax refund                                    539,325,024.06                        500,601,208.07

Other cash receipts related to
                                                          105,584,100.91                        353,529,045.37
operating activities

Subtotal of cash inflows from operating
                                                         6,185,903,544.34                      5,488,749,716.03
activities

Cash    payments       for   goods
                                                         4,918,942,931.09                      4,576,674,238.66
purchased and services received

Cash paid to employees or
                                                          287,460,870.76                        234,331,254.73
payments on behalf of employees

Cash payments for taxes and rates                         130,907,197.94                         97,173,133.15

Other cash payments related to
                                                          329,723,900.32                        274,792,875.73
operating activities

Subtotal of cash outflows from
                                                         5,667,034,900.11                      5,182,971,502.27
operating activities

Net cash flows from operating activities                  518,868,644.23                        305,778,213.76

II. Cash flows from investing activities:

Cash receipts from withdrawal of
                                                           53,885,922.93                        177,154,902.28
investments

Cash receipts from investment income                       77,550,531.07                        115,654,906.38

Net cash receipts from the disposal
of fixed assets, intangible assets and                        256,690.72                             18,031.00
other long-term assets

Net cash receipts from the disposal of
subsidiaries & other business entities

Other cash receipts related to
                                                           12,022,084.95                        208,061,898.99
investing activities

Subtotal of cash inflows from investing
                                                          143,715,229.67                        500,889,738.65
activities

  Cash payments for the acquisition of
fixed assets, intangible assets and other                  25,307,503.53                         13,598,543.48
long-term assets



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                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


Cash payments for investments                         1,207,408,860.00                       230,099,280.00

Net cash payments for the
acquisition of subsidiaries & other
business entities

Other cash payments related to
                                                        616,537,578.64                        458,358,211.73
investing activities

Subtotal of cash outflows from
                                                      1,849,253,942.17                       702,056,035.21
investing activities

Net cash flows from investing activities             -1,705,538,712.50                       -201,166,296.56

III. Cash flows from financing
activities:

Cash receipts from absorbing
investments

Cash receipts from borrowings                         2,985,778,938.56                      3,471,565,788.00

Other cash receipts related to
                                                        583,000,000.00
financing activities

Subtotal of cash inflows from financing
                                                      3,568,778,938.56                      3,471,565,788.00
activities

Cash payments for the repayment of
                                                      2,197,497,826.00                      2,453,724,990.00
borrowings

Cash payments for distribution of
dividends or profits and for interest                    29,988,023.43                         33,751,970.50
expenses

Other cash payments related to
                                                        216,024,031.31                         14,277,150.48
financing activities

Subtotal of cash outflows from
                                                      2,443,509,880.74                      2,501,754,110.98
financing activities

Net cash flows from financing activities              1,125,269,057.82                        969,811,677.02

IV. Effect of foreign exchange rate
                                                        -20,904,019.78                         40,696,283.50
changes on cash and cash equivalents

V. Net increase in cash and cash
                                                        -82,305,030.23                      1,115,119,877.72
equivalents

Add: Opening balance of cash and cash
                                                      2,287,645,650.67                      1,172,525,772.95
equivalents

VI. Closing balance of cash and cash
                                                      2,205,340,620.44                      2,287,645,650.67
equivalents




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                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

7.Consolidated statement of changes in owners' equity

Current Period
                                                                                                                         Unit: Yuan

                                                                        FY 2021

                                                 Equity attributable to parent company

                              Other equity
                                                                Other
                               instruments                                                                        Non-
                                                       Less:                             Undist
                                  Perp Othe                 comp                                                       Total
                      Share                 Capital                                                     Subtot control
        Items                                       Treasu        Specia Surplu Genera
                            Prefe etual                     rehen
                                                                                         ributed Others
                                                                                                                       equity
                      Capit       bond  rs  reserve                                                     al     lingint
                                                    ry            l      s       l risk
                            rred s                                                       profit
                                                             sive
                      al                             shares                                                    erest
                                                                  reserv reserve reserve
                            share                            inco
                                                                  e
                            s                                 me

I. Balance at the 1,075
                                        190,5 2,095, 105,49 -105,8           521,60       5,155,         8,826, 211,21 9,037,
end      of   prior ,247,
                                        09,25 044,54 2,690. 37,346           2,764.       116,35         190,57 9,605. 410,18
year                  700.0
                                         7.28   1.15       23     .87             46        2.49           8.28      02      3.30
                          0

Add:

Cumulative

changes of

accounting

policies
Errorcorrectio
n      of     prior
period

Business

combination

undercommon

control

Others

II. Balance at        1,075
                                        190,5 2,095, 105,49 -105,8           521,60       5,155,         8,826, 211,21 9,037,
                      ,247,
the      beginning                      09,25 044,54 2,690. 37,346           2,764.       116,35         190,57 9,605. 410,18
                      700.0
of current year                          7.28   1.15       23     .87             46        2.49           8.28      02      3.30
                          0




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                                             Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


III.     Current

period increase
                      68,19   -190, 829,90 80,949 -123,9       76,940       1,193,        1,772,            1,775,
(decrease shall                                                                                    3,173,
                      0,792   509,2 7,303. ,224.2 36,842       ,412.1       062,98       706,16             879,60
                                                                                                   439.12
be      presented       .00   57.28    78      5       .23         7          4.23         8.42               7.54

with      a    "-"

sign)

(I) Total                                           -123,9                  1,270,        1,146, 26,961 1,173,
comprehensive                                       36,842                  003,39       066,55 ,388.4 027,94
income                                                 .23                    6.40         4.17        4      2.61




(II)     Capital
                      68,19   -190, 818,15 -105,4                                        801,33             801,33
contributed           0,792   509,2 9,478. 92,690                                         3,703.            3,703.
                        .00   57.28    29     .23                                            24                24
or withdrawn

by owners


1.      Ordinary

shares

contributed by

owners

2.          Capital

contributed by

holders of other

equity

instruments

3. Amount of
share-based
payment
included       in
equity

4.Others             68,19   -190, 818,15 -105,4                                        801,33             801,33
                      0,792   509,2 9,478. 92,690                                         3,703.            3,703.
                        .00   57.28    29     .23                                            24                24




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                     Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


                                       76,940       -76,94
(III) Profit                                                            -755,4 -755,4
                                       ,412.1       0,412.
                                                                         70.43 70.43
distribution                               7            17


1. Appropriation
                                       76,940       -76,94
of         surplus                     ,412.1       0,412.
                                           7            17
reserve

2. Appropriation
of general risk
reserve

3. Appropriation
                                                                        -755,4 -755,4
of     profit
                                                                         70.43 70.43
to owners

4.Others

(IV) Internal
carry-over
within equity

1. Transfer of
capital
reserve         to
capital

2. Transfer of
surplus
reserve         to
capital

3.        Surplus
reserve to cover
losses

4. Changes in

defined benefit

plan      carried

over to retained

earnings

5.          Other

comprehensive

income carried


                                                                                  155
                                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


over to retained

earnings

6.others

(V)
Special
reserve

1. Appropriation
of         current
period

2. Application
of
current
period

                                                   11,747 186,44                                                                   -174,6 -23,03 -197,7
                                                   ,825.4 1,914.                                                                   94,088 2,478. 26,567
(VI) others
                                                        9         48                                                                  .99        89           .88

IV. Balance at 1,143
                                                   2,924, 186,44 -229,7                   598,54             6,348,                10,598 214,39 10,813
                      ,438,
the    end     of                                  951,84 1,914. 74,189                   3,176.            179,33                 ,896,7 3,044. ,289,7
                      492.0
                                                     4.93         48       .10                63               6.72                 46.70        14 90.84
current period            0

Previous period
                                                                                                                                                     Unit: Yuan

                                                                                   FY 2021

                                                            Equity attributable to parent                                                 Non-        Total
                                                                         company
                                                                                                                                          control equity
                     Share         Other equity   Capital Less:                                                               Subtot
                                                                     Other Specia Surplu Gener Undist                                     linginte
                                   instruments                                                                       Others
                     Capit                        reserve Treasu compr                                                        al
       Items                                                           l              s           a l risk ributed
                              Pref Perp Othe                                                                                              rest
                     al             etual
                                                           ry        ehensi reserv reserv reserv profit
                              erred bond r s
                                                            shares
                                      s                              ve        e                  e
                              shar                                                    e

                                                                     incom
                              es
                                                                     e

I. Balance at 1,075
                                                  2,036, 105,49 145,00                 429,85              3,849,             7,430,                  7,616,4
the end of prior ,247,                                                                                                                    185,843
                                                  394,27 2,690. 5,399.                 6,864.              578,31             589,86                  33,798.
year                 700.0                                                                                                                ,932.95
                                                    2.83        23        56                 70              8.39                  5.25                       20
                          0




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                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


Add:

Cumulativ

e changes

of

accounting

policies
Errorcorrectio
n      of     prior
period

Business

combination

undercommon

control

Others

II. Balance at        1,075
                                      2,036, 105,49 145,00      429,85        3,849,       7,430,             7,616,4
                      ,247,                                                                         185,843
the beginning                         394,27 2,690. 5,399.       6,864.       578,31       589,86             33,798.
                      700.0                                                                         ,932.95
of current year                         2.83    23      56          70          8.39         5.25                 20
                         0


III.        Current

period

increase
                              190,5 58,650           -250,8     91,745        1,305,       1,395,             1,420,9
                                                                                                    25,375,
(decrease                     09,25 ,268.3           42,746      ,899.7       538,03       600,71             76,385.
                                                                                                     672.07
                               7.28       2             .43          6          4.10         3.03                 10
shall           be

presented with

a "-" sign)

(I) Total                                            -203,6                   1,350,       1,146,             1,160,7
                                                                                                    14,354,
comprehensive                                        91,329                   132,51       441,18             95,608.
                                                                                                     421.46
income                                                  .48                     6.91         7.43                 89


(II)    Capital               190,5                                                        190,50
                                                                                                              190,509
contributed                   09,25                                                        9,257.
                                                                                                              ,257.28
                               7.28                                                           28
or withdrawn




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                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


by owners


1.   Ordinary

shares

contributed

by

owners

2.Capital

contributed by
                         190,5                                              190,50
                                                                                            190,509
holders             of   09,25                                              9,257.
                                                                                             ,257.28
                          7.28                                                 28
other      equity

instruments

3.Amount of
share-based
payment
included       in
equity

4.Others


(III) Profit
                                                 91,745        -91,74
                                                                                     -1,471, -1,471,
distributio                                       ,899.7       5,899.
                                                                                     395.20 395.20
                                                      6           76
n


1.Appropriation
                                                 91,745        -91,74
of         surplus                                ,899.7       5,899.
                                                      6           76
reserve

2.Appropriation
of general risk
reserve

3.Appropriation
                                                                                     -1,471, -1,471,
of profit
                                                                                     395.20 395.20
to owners

4.Others

(IV) Internal                        -47,15                    47,151
carry-over                           1,416.                    ,416.9



                                                                                                 158
                              Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

within equity                        95                         5

1. Transfer of
capital
reserve       to
capital

2. Transfer of
surplus
reserve        to
capital

3.        Surplus
reserve         to
cover losses

4. Changes in

defined benefit

plan       carried

over            to

retained

earnings

5.Other

comprehensive                     -47,15                    47,151
                                  1,416.                    ,416.9
income carried
                                     95                         5
overto retained

earnings

6.others

(V)Special
reserve

1. Appropriatio
n    of    current
period

2. Application
of
current
period

                     58,650                                              58,650
(VI) others                                                                       12,492, 71,142,
                     ,268.3                                              ,268.3
                                                                                  645.81 914.13
                         2                                                   2


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                                                                    Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


 IV. Balance at 1,075
                                             190,5 2,095, 105,49 -105,8                   521,60                5,155,           8,826,                9,037,4
                       ,247,                                                                                                                 211,219
 the     end     of                          09,25 044,54 2,690. 37,346                    2,764.               116,35           190,57                10,183.
                       700.0                                                                                                                 ,605.02
                                              7.28         1.15      23      .87                 46               2.49                8.28                  30
 current period           0



 8. Parent company statement of changes in owners' equity

 Current Period
                                                                                                                                                   Unit: Yuan

                                                                                      FY 2021

                                    Other         equity                     Less:      Other                               Undist
                       Share                                      Capital                             Special   Surplus                           Total
                                    instruments
                                                                             Treasury compreh                               ributed
                       Capital Prefer Perpet        reserve                                           reserve   reserve                  Others   equity
                                             Others
        Items                                                                shares     ensive                              profit
                               red    ual
                                    Shares bonds
                                                                                        Income


                  1,075,2                              190,50                                                               3,606,0
I. Balance at the 47,700.                                         2,103,49 105,492, -27,385,                     517,854,                         7,360,322,
                                                      9,257.2                                                               96,955.
                                                                  2,365.12     690.23     736.04                  467.55                               319.19
end of prior year              00                             8                                                                  51


Add:Cumul
ative
changes of
accounting
policies

Error correction
of prior period

Others

II. Balance at the      1,075,2                        190,50                                                               3,606,0
                                                                  2,103,49 105,492, -27,385,                     517,854,                         7,360,322,
beginning of            47,700.                       9,257.2                                                               96,955.
                                                                  2,365.12     690.23     736.04                  467.55                               319.19
current year                   00                             8                                                                  51


III.        Current
                                                       -190,5                                                                692,46
period increase         68,190,                                   827,165, 80,949,2 -57,553,                     76,940,4                         1,335,747,
                                                      09,257.                                                               3,709.4
                        792.00                                      136.64      24.25     901.17                   12.17                               667.59
(or less:                                                    28                                                                      8

decrease)
(I)            Total                                                                                                         769,40
                                                                                        -57,553,                                                  711,850,22
comprehensive                                                                                                               4,121.6
                                                                                          901.17                                                           0.48
income                                                                                                                               5



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                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


(II)      Capital
                                   -190,5
contributed or           68,190,             818,159, -105,492                                       801,333,70
                                   09,257.
                         792.00               478.29   ,690.23                                             3.24
withdrawn by                           28

owners

1.       Ordinary

shares

contributed by

owners

2.Capital

contributed        by

holders of other

equity

instruments

3. Amount of

share-based

payment

included in

equity

4.Others                          -190,5
                         68,190,             818,159, -105,492                                       801,333,70
                                   09,257.
                         792.00               478.29   ,690.23                                             3.24
                                       28

(III)    Profit
                                                                              76,940,4 -76,940

distribution                                                                     12.17 ,412.17


1. Appropriation                                                              76,940,4 -76,940
of surplus reserve                                                               12.17 ,412.17

2. Appropriation
of       profit     to
owners

3.Others

(IV) Internal
carry-over
within equity

1.      Transfer    of



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                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

capital reserve to
capital

2. Transfer of
surplus reserve
to capital

3. Surplus
reserve to cover
losses

4.    Changes        in
defined         benefit
plan carried over
to           retained
earnings

5.              Other
comprehensive
income carried
over to retained
earnings

6. Others

(V) Special
reserve

1 . Appropriatio

n of current

period

2 . Application
of current period

                                                    9,005,65 186,441,                                                 -177,436,2
(VI) Others                                             8.35      914.48                                                   56.13

IV. Balanceat              1,143,4                                                                     4,298,5
                                                    2,930,65 186,441, -84,939,            594,794,                    8,696,069,
the       end      of      38,492.                                                                     60,664.
                                                    7,501.76      914.48     637.21         879.72                        986.78
currentperiod                     00                                                                        99

Previous amount
                                                                                                                       Unit: Yuan

                                                                      Year 2019

                                    Otherequity           Less:      Other
                                    instruments
                                                                                                Undistrib
                          Share                   Capital Treasur compre Special      Surplus
                                                                                                            Others   Total equity
      Items                                                                                     uted
                          Capital                 reserve y shares hensive reserve    reserve



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                                                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


                                                                            Income                profit


                               Preferr Perpet Others

                               ed     ualbon

                               shares ds


                  1,075,                                2,042,8
I. Balance at the 247,70                                          105,492, 43,484,3     426,108 2,733,232         6,215,462,6
                                                        82,286.
                                                                   690.23     50.56     ,567.79      ,440.73           54.89
end of prior year       0.00                                04


Add:Cumu
lative
changes of
accounting
policies

Error
correction       of
prior period

Others

II. Balance at the
                      1,075,                            2,042,8
beginning                                                         105,492, 43,484,3     426,108 2,733,232         6,215,462,6
                      247,70                            82,286.
of     current                                                     690.23     50.56     ,567.79      ,440.73           54.89
                        0.00                                04
year

III.     Current
                                               190,50
period increase                                         60,610,             -70,870,    91,745, 872,864,5         1,144,859,6
                                               9,257.
                                                        079.08               086.60      899.76        14.78           64.30
(or less:                                         28

decrease)
(I)         Total
                                                                            -23,718,              917,458,9       893,740,32
comprehensive
                                                                             669.65                    97.59            7.94
income

(II)     Capital
                                               190,50
contributed or                                                                                                    190,509,25
                                               9,257.
                                                                                                                        7.28
withdrawn by                                      28

owners

1.     Ordinary

shares




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                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


contributed by

owners

2.Capital

contributed by            190,50
                                                                                         190,509,25
                          9,257.
holders         of                                                                             7.28
                             28
other equity

instruments

3. Amount of

share-based

payment

included in

equity

4.Others

(III) Profit
                                                               91,745, -91,745,8

distribution                                                    899.76      99.76


1.Appropriation
                                                               91,745, -91,745,8
of        surplus
                                                                899.76      99.76
reserve

2.Appropriation
of    profit         to
owners

3.Others

(IV)Internal
carry-over                                    -47,151,                   47,151,41
within                                         416.95                         6.95
equity

1. Transfer of
capital      reserve
to capital

2. Transfer of
surplus
reserve         to
capital

3. Surplus
reserve          to
cover losses


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                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

4. Changes in
defined benefit
plan        carried
over to retained
earnings

5.          Other
comprehensive
income carried                                                 -47,151,              47,151,41
over            to                                              416.95                    6.95
retained
earnings

6. Others

(V)
Special
reserve

1 . Appropriati

on of current

period

2 . Application
of          current
period

(VI) Others                                60,610,                                                   60,610,079.
                                           079.08                                                            08

IV. Balanceat         1,075,      190,50 2,103,4
                                                     105,492, -27,385,     517,854 3,606,096         7,360,322,3
the    end      of    247,70       9,257. 92,365.
                                                      690.23    736.04     ,467.55     ,955.51            19.19
currentperiod           0.00          28       12



III.Company profile

     Hangzhou GreatStar Industrial Co., Ltd. (the “Company”), a limited liability company by shares, was
transformed from Hangzhou Great Star Industrial Co., Ltd. It was jointly invested by natural persons 仇建平
(Qiu Jianping), 王玲玲 (Wang Lingling), 李政 (Li Zheng),王伟毅 (Wang Weiyi) and 王暋 (Wang Min). It
was registered at Hangzhou Administration for Industry and Commerce on August 9, 2001. After several equity
changes, taking March 31, 2008 as benchmark date, the Company was transformed into a limited liability by
shares on an integral basis and was registered at Hangzhou Administration for Industry and Commerce on July 2,
2008. Headquartered in Hangzhou, Zhejiang Province, the Company currently holds a business license with
unified social credit code of91330000731506099D. As of December 31, 2021, the Company had registered capital
of RMB 1,143,438,492.00, with total share of 1,143,438,492 shares (each with par value of one(1) RMB), of
which, 61,339,786 shares are restricted outstanding A shares, and 1,082,098,706 shares are unrestricted
outstanding A shares. The Company’s shares were listed at Shenzhen Stock Exchange on July 13, 2010.
     The Company belongs to the tool hardware industry. The main business activities are R&D, production and

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                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

sales of hand tools and power tools, laser measurement, storage and PPE. The Company’ main products are hand
tools and power tools, laser measurement, storage and PPE.
     The financial statements were approved and authorized for issue by the seventeenth meeting of the fifth
session of the Board of Directors dated April 11, 2022.
     The Company has brought 89 subsidiaries including Changzhou Huada Kejie Opto-electro Instrument Co.,
Ltd., Zhejiang Great Star Tools Co., Ltd., Hangzhou Great Star Tools Co.,Ltd., Prim’ Tools Limited, Hong
Kong Great Star International Co., Ltd., Great Star Tools USA, Inc, Arrow Fastener Co., LLC, Great Star
Industrial USA,LLC, Greatstar Europe AG, Lista Holding AG, BeA GmbH and Zhongshan Geelon Industrial
Co.,Ltd. into the consolidation scope. Please refer to section XX (IX) Interest in other entities of notes to financial
statements for details.

IV. Preparation basis of the financial statements

1.Preparation basis

The financial statements have been prepared on the basis of going concern.

2.Assessment of the ability to continue as a going concern

The Company has no events or conditions that may cast significant doubts upon the Company’s ability to continue
as a going concern within the 12 months after the balance sheet date.

V. Significant accounting policies and estimates

Detailed significant accounting policies and estimates notes:
     The Company has set up accounting policies and estimates on transactions or events such as impairment of
financial instruments, depreciation of fixed assets, depreciation of right-of-use assets, amortization of intangible
assets, and revenue recognition, etc. based on the Company’s actual production and operation features.

1. Statement of compliance

The financial statements have been prepared in accordance with the requirements of China Accounting Standards
for Business Enterprises (CASBEs), and present truly and completely the financial position, results of operations
and cash flows of the Company.

2. Accounting period

The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.

3. Operating cycle

The Company has a relatively short operating cycle for its business, an asset or a liability is classified as current if
it is expected to be realized or due within 12 months.




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                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

4. Functional currency

     The functional currency of the Company and its domestic subsidiaries is Renminbi (RMB) , while the
functional currency of subsidiaries engaged in overseas operations including Hong Kong Great Star International
Co., Ltd., Great Star Tools USA, Inc and GreatStar Europe AG is the currency of the primary economic
environment in which they operate.

5. Accounting treatments of business combination under and not under common control

      1.Accounting treatment of business combination under common control
      Assets and liabilities arising from business combination are measured at carrying amount of the combined
party included in the consolidated financial statements of the ultimate controlling party at the combination date.
Difference between carrying amount of the equity of the combined party included in the consolidated financial
statements of the ultimate controlling party and that of the combination consideration or total par value of shares
issued is adjusted to capital reserve, if the balance of capital reserve is insufficient to offset, any excess is adjusted
to retained earnings.
      2.Accounting treatment of business combination not under common control
      When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree at
the acquisition date, the excess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities
and contingent liabilities, and the measurement of the combination cost are reviewed, then the difference is
recognized in profit or loss.

6. Compilation method of consolidated financial statements

     The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidated
financial statements are compiled by the parent company according to “CASBE 33 – Consolidated Financial
Statements”, based on relevant information and the financial statements of the parent company and its
subsidiaries.

7. Classification of joint arrangements and accounting treatment of joint operations

      1.Joint arrangements include joint operations and joint ventures.
      2.When the Company is a joint operator of a joint operation, it recognizes the following items in relation to
its interest in a joint operation:
      (1)its assets, including its share of any assets held jointly;
      (2)its liabilities, including its share of any liabilities incurred jointly;
      (3)its revenue from the sale of its share of the output arising from the joint operation;
      (4)its share of the revenue from the sales of the assets by the joint operation; and
      its expenses, including its share of any expenses incurred jointly.



8. Recognition criteria of cash and cash equivalents

     Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash
equivalents refer to short-term, highly liquid investments that can be readily converted to cash and that are subject

                                                                                                                      167
                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

to an insignificant risk of changes in value.

9. Foreign currency business and foreign currency translation

      1.Translation of transactions denominated in foreign currency
      Transactions denominated in foreign currency are translated into RMB at the spot exchange rate at the
transaction date at initial recognition. At the balance sheet date, monetary items denominated in foreign currency
are translated at the spot exchange rate at the balance sheet date with difference, except for those arising from the
principal and interest of exclusive borrowings eligible for capitalization, included in profit or loss; non-cash items
carried at historical costs are translated at the spot exchange rate at the transaction date, with the RMB amounts
unchanged; non-cash items carried at fair value in foreign currency are translated at the spot exchange rate at the
date when the fair value was determined, with difference included in profit or loss or other comprehensive
income.
      2.Translation of financial statements measured in foreign currency
      The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the balance sheet date;
the equity items, other than undistributed profit, are translated at the spot rate at the transaction date; the revenues
and expenses in the income statement are translated into RMB at the spot exchange rate at the transaction date.
The difference arising from the aforementioned foreign currency translation is included in other comprehensive
income.

10. Financial instruments

      1. Classification of financial assets and financial liabilities
      Financial assets are classified into the following three categories when initially recognized: (1) financial
assets at amortized cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets
at fair value through profit or loss.
      Financial liabilities are classified into the following four categories when initially recognized: (1) financial
liabilities at fair value through profit or loss; (2) financial liabilities that arise when a transfer of a financial asset
does not qualify for derecognition or when the continuing involvement approach applies; (3) financial guarantee
contracts not fall within the above categories (1) and (2), and commitments to provide a loan at a below-market
interest rate, which do not fall within the above category (1); (4) financial liabilities at amortized cost.
      2. Recognition criteria, measurement method and derecognition condition of financial assets and financial
liabilities
      (1) Recognition criteria and measurement method of financial assets and financial liabilities
      When the Company becomes a party to a financial instrument, it is recognized as a financial asset or
financial liability. The financial assets and financial liabilities initially recognized by the Company are measured
at fair value; for the financial assets and liabilities at fair value through profit or loss, the transaction expenses
thereof are directly included in profit or loss; for other categories of financial assets and financial liabilities, the
transaction expenses thereof are included into the initially recognized amount. However, at initial recognition, for
accounts receivables that do not contain a significant financing component or in circumstances where the
Company does not consider the financing components in contracts within one year,, the Company measures their
transaction price in accordance with “CASBE 14 – Revenues”.
      (2) Subsequent measurement of financial assets
      1)Financial assets measured at amortized cost


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                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

      The Company measures its financial assets at the amortized costs using effective interest method. Gains or
losses on financial assets that are measured at amortized cost and are not part of hedging relationships shall be
included into profit or loss when the financial assets are derecognized, reclassified, amortized using effective
interest method or recognized with impairment loss.
      2)Debt instrument investments at fair value through other comprehensive income
      The Company measures its debt instrument investments at fair value. Interests, impairment gains or losses,
and gains and losses on foreign exchange that calculated using effective interest method shall be included into
profit or loss, while other gains or losses are included into other comprehensive income. Accumulated gains or
losses that initially recognized as other comprehensive income should be transferred out into profit or loss when
the financial assets are derecognized.
      3)Equity instrument investments at fair value through other comprehensive income
      The Company measures its equity instrument investments at fair value. Dividends obtained (other than those
as part of investment cost recovery) shall be included into profit or loss, while other gains or losses are included
into other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive
income should be transferred out into retained earnings when the financial assets are derecognized.
      4)Financial assets at fair value through profit or loss
      The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value
(including interests and dividends) shall be included into profit or loss, except for financial assets that are part of
hedging relationships.
      (3) Subsequent measurement of financial liabilities
      1)Financial liabilities at fair value through profit or loss
      Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (including
derivatives that are liabilities) and financial liabilities designated as at fair value through profit or loss. The
Company measures such kind of liabilities at fair value. The amount of changes in the fair value of the financial
liabilities that are attributable to changes in the Company’s own credit risk shall be included into other
comprehensive income, unless such treatment would create or enlarge accounting mismatches in profit or loss.
Other gains or losses on those financial liabilities (including interests, changes in fair value that are attributable to
reasons other than changes in the Company’s own credit risk) shall be included into profit or loss, except for
financial liabilities that are part of hedging relationships. Accumulated gains or losses that originally recognized as
other comprehensive income should be transferred out into retained earnings when the financial liabilities are
derecognized.
      2)Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when
the continuing involvement approach applies
      The Company measures its financial liabilities in accordance with “CASBE 23 – Transfer of Financial Assets”
      3)Financial guarantee contracts not fall within the above categories 1) and 2), and commitments to provide a
loan at a below- market interest rate, which do not fall within the above category 1)
      The Company measures its financial liabilities at the higher of: a. the amount of loss allowances in accordance
with impairment requirements of financial instruments; b. the amount initially recognized less the amount of
accumulated amortization recognized in accordance with “CASBE 14 – Revenues”.
      4)Financial liabilities at amortized cost
      The Company measures its financial liabilities at amortized cost using effective interest method. Gains or
losses on financial liabilities that are measured at amortized cost and are not part of hedging relationships shall be
included into profit or loss when the financial liabilities are derecognized and amortized using effective interest
method.


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                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

      (4) Derecognition of financial assets and financial liabilities
      1) Financial assets are derecognized when one of the following conditions is met:
      a.the contractual rights to the cash flows from the financial assets expire; or
      b.the financial assets have been transferred and the transfer qualifies for derecognition in accordance with
“CASBE 23 – Transfer of Financial Assets”.
      2)                               Onlywhentheunderlyingpresentobligationsofafinancialliabilityarerelievedtotally
orpartlymaythefinancialliabilitybe derecognizedaccordingly.
      3. Recognition criteria and measurement method of financial assetstransfer
      Where the Company has transferred substantially all of the risks and rewards related to the ownership of the
financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is
recognized independently as an asset or a liability. If it retained substantially all of the risks and rewards related to
the ownership of the financial asset, it continues recognizing the financial asset. Where the Company does not
transfer or retain substantially all of the risks and rewards related to the ownership of a financial asset, it is dealt
with according to the circumstances as follows respectively: (1) if the Company does not retain its control over the
financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is
recognized independently as an asset or a liability; (2) if the Company retains its control over the financial asset,
according to the extent of its continuing involvement in the transferred financial asset, it recognizes the related
financial asset and recognizes the relevant liability accordingly.
      If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the
amounts of the following two items are included in profit or loss: (1) the carrying amount of the transferred
financial asset as of the date of derecognition; (2) the sum of consideration received from the transfer of the
financial asset, and the accumulative amount of the changes of the fair value originally included in other
comprehensive income proportionate to the transferred financial asset (financial assets transferred refer to debt
instrument investments at fair value through other comprehensive income). If the transfer of financial asset
partially satisfies the conditions to derecognition, the entire carrying amount of the transferred financial asset is,
between the portion which is derecognized and the portion which is not, apportioned according to their respective
relative fair value, and the difference between the amounts of the following two items are included into profit or
loss: (1) the carrying amount of the portion which is derecognized; (2) the sum of consideration of the portion
which is derecognized, and the portion of the accumulative amount of the changes in the fair value originally
included in other comprehensive income which is corresponding to the portion which is derecognized (financial
assets transferred refer to debt instrument investments at fair value through other comprehensive income).
      4. Fair value determination method of financial assets andliabilities
      The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value. The inputs to valuation techniques used to measure fair value are arranged
in the following hierarchy and used accordingly:
      (1)Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the
Company can access at the measurement date.
      (2)Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in
active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other
than quoted prices that are observable for the asset or liability, for example, interest rates and yield curves
observable at commonly quoted intervals; market-corroborated inputs;
      (3)Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is
not observable and cannot be corroborated by observable market data at commonly quoted intervals, historical


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                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

volatility, future cash flows to be paid to fulfill the disposal obligation assumed in business combination, and
financial forecast developed using the Company’s own data, etc.
     5. Impairment of financial instruments
     (1) Measurement and accountingtreatment

      The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets at
amortized cost, debt instrument investments, contract assets or leases receivable at fair value through other
comprehensive income, loan commitments other than financial liabilities at fair value through profit or loss,
financial guarantee contracts not belong to financial liabilities at fair value through profit or loss or financial
liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing
involvement approach applies.
      Expected credit losses refer to the weighted average of credit losses with the respective risks of a default
occurring as the weights. Credit loss refers to the difference between all contractual cash flows that are due to the
Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash
shortfalls), discounted at the original effective interest rate. Among which, purchased or originated
credit-impaired financial assets are discounted at the credit-adjusted effective interest rate.
      At the balance sheet date, the Company shall only recognize the cumulative changes in the lifetime expected
credit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financial
assets.
      For accounts receivable and contract assets resulting from transactions as regulated in “CASBE 14 –
Revenues” which do not contain a significant financing component or in circumstances where the Company does
not consider the financing components in contracts within one year,, the Company chooses simplified approach to
measure the loss allowance at an amount equal to lifetime expected credit losses.
      For financial assets other than the above, on each balance sheet date, the Company shall assess whether the
credit risk on the financial instrument has increased significantly since initial recognition. The Company shall
measure the loss allowance for the financial instrument at an amount equal to the lifetime expected credit losses if
the credit risk on that financial instrument has increased significantly since initial recognition; otherwise, the
Company shall measure the loss allowance for that financial instrument at an amount equal to 12-month expected
credit loss.
      Considering reasonable and supportable forward-looking information, the Company compares the risk of a
default occurring on the financial instrument as at the balance sheet date with the risk of a default occurring on the
financial instrument as at the date of initial recognition, so as to assess whether the credit risk on the financial
instrument has increased significantly since initial recognition.
      The Company may assume that the credit risk on a financial instrument has not increased significantly since
initial recognition if the financial instrument is determined to have relatively low credit risk at the balance sheet
date.
      The Company shall estimate expected credit risk and measure expected credit losses on an individual or a
collective basis. When the Company adopts the collective basis, financial instruments are grouped with similar
credit risk features.
      The Company shall remeasure expected credit loss on each balance sheet date, and increased or reversed
amounts of loss allowance arising therefrom shall be included into profit or loss as impairment losses or gains. For
a financial asset measured at amortized cost, the loss allowance reduces the carrying amount of such financial
asset presented in the balance sheet; for a debt investment measured at fair value through other comprehensive
income, the loss allowance shall be recognized in other comprehensive income and shall not reduce the carrying


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amount of such financial asset.
     (2) Financial instruments with expected credit risk assessed and expected credit losses measured on a
portfolio basis
    Items                      Basis for determination of              Method for measuring expected credit
                                        portfolio                                          loss

Other       receivables   –             Aging               Based        on           historical       credit         loss

Portfolio grouped withages                                   experience,thecurrentsituationandthe forecast of future

                                                             economic     conditions,       the     Company      calculates

                                                             expectedcredit        lossthroughexposureatdefaultand12-

                                                             month or lifetime expected creditlossrate.

Other       receivables   – Balance due from related        Based        on           historical       credit         loss

Portfolio grouped balance         parties within the         experience,thecurrentsituationandthe forecast of future

due from related parties        consolidation scope          economic     conditions,       the     Company      calculates

within the consolidation                                     expectedcredit        lossthroughexposureatdefaultand12-

scope                                                        month or lifetime expected creditlossrate.

    (3) Accounts receivable and contract assets with expected credit losses measured on a portfoliobasis
    1) Specific portfolios and method for measuring expected creditloss
                  Items                       Basis for                 Method for measuring expected credit
                                          determination of                                  loss
                                              portfolio

Bank acceptance receivable                 Type of notes       Based          on        historical      credit         loss
Trade acceptance receivable                                    experience,thecurrentsituationandthe        forecast      of

                                                               future economic conditions, the Company calculates

                                                               expectedcredit       loss      through     exposure       at

                                                               defaultandlifetime expected credit loss rate.

Accounts receivable –    Portfolio              Ages          Based          on        historical      credit         loss

grouped withages                                               experience,thecurrentsituationandthe        forecast      of

                                                               future economic conditions, the Company prepares

                                                               thecomparisontable of ages and lifetimeexpectedcredit

                                                               loss rate of accounts receivable,so as to calculate

                                                               expected credit loss.


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     2) Accountsreceivable–comparisontableofagesandlifetimeexpectedcredit lossrateofportfoliogroupedwithages
           Ages                                                      Expected credit loss rate(%)
           Within 1 year (inclusive, the same hereinafter)                       5.00

           1-2 years                                                             10.00

           2-3 years                                                             20.00

           3-4 years                                                             30.00

           4-5 years                                                             50.00

           Over 5 years                                                         100.00

     6. Offsetting financial assets and financialliabilities
     Financial assets and financial liabilities are presented separately in the balance sheet and are not offset.
However, the Company offsets a financial asset and a financial liability and presents the net amount in the balance
sheet when, and only when, the Company:(a)currently has a legally enforceable right to set off the recognized
amounts; and (b) intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
     For a transfer of a financial asset that does not qualify for derecognition, the Company does not offset the
transferred asset and the associated liability.

11. Notes Receivable

      Due to the short term of notes receivable and the low risk of breach of contract, the Company has a strong
ability to fulfill its obligation to pay the cash flow of the contract in the short term. Therefore, the Company
regards the notes receivable as a financial instrument with lower credit risk and directly assumes that the credit
risk has not increased significantly since the initial confirmation. Considering the historical default rate is zero, the
Company's fixed bad debt reserve rate for the notes receivable is 0.



12. Accounts Receivable

     Detailsrefertothe10.      Financialinstrumentsofthefinancialstatements              notes        of       SectionV.
Significantaccountingpoliciesandestimates.

13. Receivables Financing

     Detailsrefertothe10.      Financialinstrumentsofthefinancialstatements              notes        of       SectionV.
Significantaccountingpoliciesandestimates.

14. Other Receivables

     Recognition method and accounting treatment of expected credit loss of the other receivable
     Detailsrefertothe10.      Financialinstrumentsofthefinancialstatements              notes        of       SectionV.
Significantaccountingpoliciesandestimates.




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15. Inventories

      1. Classification ofinventories
      Inventories include finished goods or goods held for sale in the ordinary course of business, work in process
in the process of production, and materials or supplies etc. to be consumed in the production process or in the
rendering of services.
      2.Accounting method for dispatching inventories:
      Inventories dispatched from storage are accounted for with weighted average method at the end of each
month.
      3.Basis for determining net realizable value
      At the balance sheet date, inventories are measured at the lower of cost and net realizable value; provisions
for inventory write- down are made on the excess of its cost over the net realizable value. The net realizable value
of inventories held for sale is determined based on the amount of the estimated selling price less the estimated
selling expenses and relevant taxes and surcharges in the ordinary course of business; the net realizable value of
materials to be processed is determined based on the amount of the estimated selling price less the estimated costs
of completion, selling expenses and relevant taxes and surcharges in the ordinary course of business; at the
balance sheet date, when only part of the same item of inventories have agreed price, their net realizable value is
determined separately and is compared with their costs to set the provision for inventory write-down to be made
or reversed.
      4.Inventory system
      Perpetual inventory method is adopted.
      5.Amortization method of low-value consumables and packages
      (1)Low-value consumables
      Low-value consumables are amortized with one-off method.
      (2)Packages
      Packages are amortized with one-off method.

16. Contract assets

     The Company presents contract assets or contract liabilities in the balance sheet based on the relationship
between its performance obligations and customers’ payments. Contract assets and contract liabilities under the
same contract shall offset each other and be presented on a net basis.
     The Company presents an unconditional right to consideration (i.e., only the passage of time is required
before the consideration is due) as a receivable, and presents a right to consideration in exchange for goods that it
has transferred to a customer (which is conditional on something other than the passage of time) as a contract
asset.



17. Contract costs

     Assets related to contract costs including costs of obtaining a contract and costs to fulfil a contract.
     The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are expected
to be recovered. The costs of obtaining a contract shall be included into profit or loss when incurred if the
amortization period of the asset is one year or less.
     If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories, fixed

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assets or intangible assets, etc., the Company shall recognize the costs to fulfil a contract as an asset if all the
following criteria are satisfied:
      1.The costs relate directly to a contract or to an anticipated contract, including direct labor, direct materials,
manufacturing overhead cost (or similar cost), cost that are explicitly chargeable to the customer under the
contract, and other costs that are only related to the contract;
      2.The costs enhance resources of the Company that will be used in satisfying performance obligations in the
future; and
      3.The costs are expected to be recovered.
      An asset related to contract costs shall be amortized on a systematic basis that is consistent with related
goods or services, with amortization included into profit or loss.
      The Company shall make provision for impairment and recognize an impairment loss to the extent that the
carrying amount of an asset related to contract costs exceeds the remaining amount of consideration that the
Company expects to receive in exchange for the goods or services to which the asset relates less the costs
expected to be incurred. The Company shall recognize a reversal of an impairment loss previously recognized in
profit or loss when the impairment conditions no longer exist or have improved. The carrying amount of the asset
after the reversal shall not exceed the amount that would have been determined on the reversal date if no provision
for impairment had been made previously.



18. Held for sale assets

     1. Classification of non-current assets or disposal groups as held forsale
     Non-current assets or disposal groups are accounted for as held for sale when the following conditions are all
met: a. the asset must be available for immediate sale in its present condition subject to terms that are usual and
customary for sales of such assets or disposal groups; b. its sales must be highly probable, i.e., the Company has
made a decision on the sale plan and has obtained a firm purchase commitment, and the sale is expected to be
completed within one year.
     When the Company acquires a non-current asset or disposal group with a view to resale, it shall classify the
non-current asset or disposal group as held for sale at the acquisition date only if the requirement of “expected to
be completed within one year” is met at that date and it is highly probable that other criteria for held for sale will
be met within a short period (usually within three months).
     An asset or a disposal group is still accounted for as held for sale when the Company remains committed to
its plan to sell the asset or disposal group in the circumstance that non-related party transactions fail to be
completed within one year due to one of the following reasons: a. a buyer or others unexpectedly set conditions
that will extend the sale period, while the Company has taken timely actions to respond to the conditions and
expects a favorable resolution of the delaying factors within one year since the setting; b. a non-current asset or
disposal group classified as held for sale fails to be sold within one year due to rare cases, and the Company has
taken action necessary to respond to the circumstances during the initial one-year period and the criteria for held
for sale are met.
     2. Measurement of non-current assets or disposal groups as held for sale
     (1) Initial measurement and subsequent measurement
     For initial measurement and subsequent measurement as at the balance sheet date of a non-current asset or
disposal group as held for sale, where the carrying amount is higher than the fair value less costs to sell, the
carrying amount is written down to the fair value less costs to sell, and the write-down is recognized in profit or


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                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

loss as assets impairment loss, meanwhile, provision for impairment of assets as held for sale shall be made.
      For a non-current asset or disposal group classified as held for sale at the acquisition date, the asset or
disposal group is measured on initial recognition at the lower of its initial measurement amount had it not been so
classified and fair value less costs to sell. Apart from the non-current asset or disposal group acquired through
business combination, the difference arising from the initial recognition of a non-current asset or disposal group at
the fair value less costs to sell shall be included into profit or loss.
      The assets impairment loss recognized for a disposal group as held for sale shall reduce the carrying amount
of goodwill in the disposal group first, and then reduce its carrying amount based on the proportion of each
non-current asset’s carrying amount in the disposal group.
      No provision for depreciation or amortization shall be made on non-current assets as held for sale or
non-current assets in disposal groups as held for sale, while interest and other expenses attributable to the
liabilities of a disposal group as held for sale shall continue to be recognized.
      (2) Accounting treatment of reversal of assets impairment loss
      When there is a subsequent increase in fair value less costs to sell of a non-current asset as held for sale at the
balance sheet date, the write-down shall be recovered, and shall be reversed not in excess of the impairment loss
that has been recognized after the non- current asset was classified as held for sale. The reversal shall be included
into profit or loss. Assets impairment loss that has been recognized before the classification is not reversed.
      When there is a subsequent increase in fair value less costs to sell of a disposal group as held for sale at the
balance sheet date, the write-down shall be recovered, and shall be reversed not in excess of the non-current assets
impairment loss that has been recognized after the disposal group was classified as held for sale. The reversal
shall be included into profit or loss. The reduced carrying amount of goodwill and non-current assets impairment
loss that has been recognized before the classification is not reversed.
      For the subsequent reversal of the impairment loss that has been recognized in a disposal group as held for
sale, the carrying amount is increased based on the proportion of carrying amount of each non-current asset
(excluding goodwill) in the disposal group.
      (3) Non-current asset or disposal group that is no longer classified as held for sale and derecognized
      A non-current asset or disposal group that does not met criteria for held for sale and no longer classified as
held for sale, or a non-current asset that removed from a disposal group as held for sale shall be measured at the
lower of: a. its carrying amount before it was classified as held for sale, adjusted for any depreciation,
amortization or impairment that would have been recognized had it not been classified as held for sale; and b. its
recoverable amount.
      When a non-current asset or disposal group classified as held for sale is derecognized, unrecognized gains or
losses shall be included into profit or loss.

19. Debt investments

20. Other debt investments

21. Long-term receivables

22. Long-term equity investments

     1. Judgment of joint control and significant influence
     Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require the unanimous consent of the parties sharing control. Significant

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influence is the power to participate in the financial and operating policy decisions of the investee but is not
control or joint control of these policies.
      2. Determination of investment cost
      (1)For business combination under common control, if the consideration of the combining party is that it makes
payment in cash, transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of
combination, it regards the share of the carrying amount of the equity of the combined party included in the
consolidated financial statements of the ultimate controlling party as the initial cost of the investment. The
difference between the initial cost of the long-term equity investments and the carrying amount of the combination
consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve is
insufficient to offset, any excess is adjusted to retained earnings.
      When long-term equity investments are obtained through business combination under common control
achieved in stages, the Company determines whether it is a “bundled transaction”. If it is a “bundled transaction”,
stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, on
the date of combination, investment cost is initially recognized at the share of the carrying amount of net assets of
the combined party included the consolidated financial statements of the ultimate controlling party. The difference
between the initial investment cost of long-term equity investments at the acquisition date and the carrying amount
of the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly
acquired equity is adjusted to capital reserve; if the balance of capital reserve is insufficient to offset, any excess is
adjusted to retained earnings.
      (2)For business combination not under common control, investment cost is initially recognized at the
acquisition-date fair value of considerations paid.
      When long-term equity investments are obtained through business combination not under common control
achieved in stages, the Company determined whether they are stand-alone financial statements or consolidated
financial statements in accounting treatment:
      1)In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amount
of the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly
acquired equity.
      2)In the case of consolidated financial statements, the Company determines whether it is a “bundled
transaction”. If it is a “bundled transaction”, stages as a whole are considered as one transaction in accounting
treatment. If it is not a “bundled transaction”, the carrying amount of the acquirer’s previously held equity interest in
the acquiree is remeasured at the acquisition-date fair value, and the difference between the fair value and the
carrying amount is recognized in investment income; when the acquirer’s previously held equity interest in the
acquiree involves other comprehensive income under equity method, the related other comprehensive income is
reclassified as income for the acquisition period, excluding other comprehensive income arising from changes in net
liabilities or assets from remeasurement of defined benefit plan of the acquiree.
      (3)Long-term equity investments obtained through ways other than business combination: the initial cost of a
long-term equity investment obtained by making payment in cash is the purchase cost which is actually paid; that
obtained on the basis of issuing equity securities is the fair value of the equity securities issued; that obtained
through debt restructuring is determined according to “CASBE 12 – Debt Restructuring”; and that obtained through
non-cash assets exchange is determined according to “CASBE 7 – Non-cash Assets Exchange”.
      3. Subsequent measurement and recognition method of profit or loss
      For long-term equity investments with control relationship, it is accounted for with cost method; for
long-term equity investments with joint control or significant influence relationship, it is accounted for with equity
method.


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      4. Disposal of a subsidiary in stages resulting in the Company’s loss of control
      (1)Stand-alone financial statements
      The difference between the carrying amount of the disposed equity and the consideration obtained thereof is
recognized in profit or loss. If the disposal does not result in the Company’s loss of significant influence or joint
control, the remained equity is accounted for with equity method; however, if the disposal results in the
Company’s loss of control, joint control, or significant influence, the remained equity is accounted for according
to “CASBE 22 – Financial Instruments: Recognition and Measurement”.
      (2)Consolidated financial statements
      1)Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in the Company’s loss of
control
      Before the Company’s loss of control, the difference between the disposal consideration and the
proportionate share of net assets in the disposed subsidiary from acquisition date or combination date to the
disposal date is adjusted to capital reserve (capital premium), if the balance of capital reserve is insufficient to
offset, any excess is adjusted to retained earnings.
      When the Company loses control, the remained equity is remeasured at the loss-of-control-date fair value.
The aggregated value of disposal consideration and the fair value of the remained equity, less the share of net
assets in the disposed subsidiary held before the disposal from the acquisition date or combination date to the
disposal date is recognized in investment income in the period when the Company loses control over such
subsidiary, and meanwhile goodwill is offset correspondingly. Other comprehensive income related to equity
investments in former subsidiary is reclassified as investment income upon the Company’s loss of control.
      2)Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in the Company’s loss of
control
      In case of “bundled transaction”, stages as a whole are considered as one transaction resulting in loss of
control in accounting treatment. However, before the Company loses control, the difference between the disposal
consideration at each stage and the proportionate share of net assets in the disposed subsidiary is recognized as
other comprehensive income at the consolidated financial statements and reclassified as profit or loss in the period
when the Company loses control over such subsidiary.

23. Investment property

Investment property measurement model
Measurement by cost model
The depreciation or amortization method
     1.Investment property includes land use right of leased-out property and of property held for capital
appreciation and buildings that have been leased out.
     2.The initial measurement of investment property is based on its cost, and subsequent measurement is made
using the cost model, the depreciation or amortization method is the same as that of fixed assets and intangible
assets.

24.Fixed assets

(1) Recognition principles

     Fixed assets are tangible assets held for use in the production of goods or rendering of services, for rental to
others, or for administrative purposes, and expected to be used during more than one accounting year. Fixed assets

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are recognized if, and only if, it is probable that future economic benefits associated with the assets will flow to
the Company and the cost of the assets can be measured reliably.

(2) Depreciation method


      Categories        Depreciation method       Useful life (years)    Residual value          Annual depreciation
                                                                         proportion (%)                 rate (%)

Buildings          and Straight-line method
                                                20-25                   0、5                    5.00-3.80
structures

General equipment       Straight-line method 3-10                       0、10                   33.33-9.00

Special equipment       Straight-line method 5-15                       0、10                   20.00-6.00

Transport facilities    Straight-line method 4-10                       5、10                   23.75-9.00


(3) Recognition and pricing principles of fixed assets rented-in under financelease

      Finance lease is determined when one or a combination of the following conditions are satisfied: (1) the
ownership has been transferred to the lessee when the leasing term is due; (2) the lessee has the option to purchase
the leasing asset at a price that is much lower than its fair value, so it can be reasonably determined that the lessee
will take the option at the very beginning of the lease; (3) the leasing term accounts for most time of the useful life
(ordinarily accounting for 75% or higher) even if the ownership does not transfer to the lessee; (4) the present
value of the minimum amount of rent that the lessee has to pay at the first day of the lease amounts to 90% or
higher of its fair value at the same date; or the present value of the minimum amount of rent that the lessor
collects at the first day of the lease amounts to 90% or higher of its fair value at the same date; and/or (5) the
leased assets are of such a specialized nature that only the lessee can use them without major modifications.
      Fixed assets rented-in under finance lease are recorded at the lower of fair value and the present value of the
minimum lease payment at the inception of the lease, and are depreciated following the depreciation policy for
self-owned fixed assets.

25. Construction in progress

     1.Construction in progress is recognized if, and only if, it is probable that future economic benefits associated
with the item will flow to the Company, and the cost of the item can be measured reliably. Construction in
progress is measured at the actual cost incurred to reach its designed usable conditions.
     2.Construction in progress is transferred into fixed assets at its actual cost when it reaches the designed
usable conditions. When the auditing of the construction in progress was not finished while reaching the designed
usable conditions, it is transferred to fixed assets using estimated value first, and then adjusted accordingly when
the actual cost is settled, but the accumulated depreciation is not to be adjusted retrospectively.

26. Borrowing costs

     1.Recognition principle of borrowing costs capitalization
     Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and
construction or production of assets eligible for capitalization, it is capitalized and included in the costs of relevant

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assets; other borrowing costs are recognized as expenses on the basis of the actual amount incurred, and are
included in profit or loss.
      2.Borrowing costs capitalization period
      (1)The borrowing costs are not capitalized unless the following requirements are all met: 1) the asset
disbursements have already incurred; 2) the borrowing costs have already incurred; and 3) the acquisition and
construction or production activities which are necessary to prepare the asset for its intended use or sale have
already started.
      (2)Suspension of capitalization: where the acquisition and construction or production of a qualified asset is
interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the
borrowing costs is suspended; the borrowing costs incurred during such period are recognized as expenses, and
are included in profit or loss, till the acquisition and construction or production of the asset restarts.
      (3)Ceasing of capitalization: when the qualified asset under acquisition and construction or production is
ready for the intended use or sale, the capitalization of the borrowing costs is ceased.
      3.Capitalization rate and capitalized amount of borrowing costs
      For borrowings exclusively for the acquisition and construction or production of assets eligible for
capitalization, the to-be- capitalized amount of interests is determined in light of the actual interest expenses
incurred (including amortization of premium or discount based on effective interest method) of the special
borrowings in the current period less the interest income on the unused borrowings as a deposit in the bank or as a
temporary investment; where a general borrowing is used for the acquisition and construction or production of
assets eligible for capitalization, the Company calculates and determines the to-be-capitalized amount of interests
on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative
asset disbursements less the general borrowing by the capitalization rate of the general borrowing used.

27. Productive biological assets

28. Oil & gas assets

29. Right-of-use assets

     1.Recognition principles of right-of-use asset
     Right-of-use asset refers to the asset that represents the Company’s right as lessee to use an underlying asset
for the lease term. The Company recognizes a right-of-use asset at the commencement date. Right-of-use assets
are recognized only when: (a) it is probable that the economic benefits will flow to the Company; and (b) the cost
of the right-of-use asset can be measured reliably.
     2.Initial measurement of the right-of-use asset
     The right-of-use asset is measured at cost and the cost shall comprise: (1) the amount of the initial
measurement of the lease liability; (2) any lease payments made at or before the commencement date, less any
lease incentives received; (3) any initial direct costs incurred by the lessee; and (4) an estimate of costs to be
incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or
restoring the underlying asset to the condition required by the terms and conditions of the lease.
     3.Subsequent measurement of the right-of-use asset
     (1)After the commencement date, the Company measures the right-of-use asset applying a cost model.
     The Company shall depreciate the right-of-use asset. If it is reasonable to be certain that the ownership of the
underlying asset can be acquired by the end of the lease term, the Company depreciates the right-of-use asset from


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the commencement date to the endof 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. Depreciation method of different categories of right-of-use assets are as follows:
           Categories               Depreciation       Useful life (years) Residual value         Annual
                                      method                               proportion (%)                  depreciati
                                                                                                           on    rate
                                                                                                           (%)
                                                              5-11                   0                 9.09-20.00
Buildings and structures        Straight-line method

                                                               3-5                   0                20.00-33.33
General equipment               Straight-line method

                                                              3-15                   0                 6.67-33.33
Special equipment               Straight-line method

                                                               3-5                   0                20.00-33.33
Transport facilities            Straight-line method

      (3) When the Company remeasures the lease liability on the basis of the present value of the lease payments
after changes and adjusts the carrying amount of the right-of-use asset accordingly, if the carrying amount of the
right-of-use asset is reduced to zero and there shall be a further reduction in the measurement of the lease liability,
any remaining amount of the remeasurement shall be recognized in profit or loss.

30. Intangible assets

(1) Measurement method, useful life and impairmenttest

     1.Intangible assets include land ownership, land use right, patent right, trademark right, propitiatory
technology, management software, and sewage disposal right etc. The initial measurement of intangible assets is
based on its cost.
     2.For intangible assets with finite useful lives, their amortization amounts are amortized within their useful
lives systematically and reasonably, if it is unable to determine the expected realization pattern reliably, intangible
assets are amortized by the straight-line method with details as follows:

                           Items                              Amortization period (years)

                           Land use right                               50、30

                           Patent right                                    10

                           Trademark right                                 10

                           Propitiatory technology                          5

                           Management software                            3-10

                           Sewage disposal right                           10

     The Company does not amortize intangible assets with indefinite useful lives, such as land ownership and
trademark rights, and the Company reviews the useful lives of these intangible assets in each accounting period.
For intangible assets with indefinite useful lives, the indefinite useful life is determined based on the inability to
estimate the period over which the intangible assets will provide future economic benefits to the enterprise. The
Company's intangible asset with indefinite useful life is land ownership.


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                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

(2) Accounting policy of expenditures onthe internal research and development

     Expenditures on the research phase of an internal project are recognized as profit or loss when they are
incurred.                                                An                                                   intangible
assetarisingfromthedevelopmentphaseofaninternalprojectisrecognizediftheCompanycandemonstrateallofthefollowi
ngs:(1) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (2) its
intention                  to                  complete                    the                    intangibleassetanduse
orsellit;(3)howtheintangibleassetwillgenerateprobablefutureeconomicbenefits,amongotherthings,the Company can
demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is
to                                                                                                                     be
usedinternally,theusefulnessoftheintangibleasset;(4)theavailabilityofadequatetechnical,financialandotherresourcest
ocomplete
thedevelopmentandtouseorselltheintangibleasset;and(5)itsabilitytomeasurereliablytheexpenditureattributabletothei
ntangible asset during itsdevelopment.

31. Impairment of part of long-term assets

     For long-term assets such as long-term equity investments, investment property at cost model, fixed assets,
construction in progress, right-of-use assets, intangible assets with finite useful lives, etc., if at the balance sheet
date there is indication of impairment, the recoverable amount is to be estimated. For goodwill recognized in
business combination and intangible assets with indefinite useful lives, no matter whether there is indication of
impairment, impairment test is performed annually. Impairment test on goodwill is performed on related asset
group or asset group portfolio.
     When the recoverable amount of such long-term assets is lower than their carrying amount, the difference is
recognized as provision for assets impairment through profit or loss.



32. Long-term prepayments

     Long-term prepayments are expenses that have been recognized but with amortization period over one year
(excluding one year). They are recorded with actual cost, and evenly amortized within the beneficiary period or
stipulated period. If items of long-term prepayments fail to be beneficial to the following accounting periods,
residual values of such items are included in profit or loss.



33. Contract liabilities

     The Company presents contract assets or contract liabilities in the balance sheet based on the relationship
between its performance obligations and customers’ payments. Contract assets and contract liabilities under the
same contract shall offset each other and be presented on a net basis.
     The Company presents an obligation to transfer goods to a customer for which the Company has received
consideration (or the amount is due) from the customer as a contract liability.




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34. Employee compensation

(1) Accounting treatment for short-term Employee compensation

      The Company recognizes, in the accounting period in which an employee provides service, short-term
Employee compensation actually incurred as liabilities, with a corresponding charge to profit or loss or the cost of
a relevant asset.

(2) Accounting treatment for post-employmentbenefits

      The Company classifies post-employment benefit plans as either defined contribution plans or defined
benefit plans.
      (1)The Company recognizes in the accounting period in which an employee provides service the contribution
payable to a defined contribution plan as a liability, with a corresponding charge to profit or loss or the cost of a
relevant asset.
      (2)Accounting treatment by the Company for defined benefit plan usually involves the following steps:
      1)In accordance with the projected unit credit method, using unbiased and mutually compatible actuarial
assumptions to estimate related demographic variables and financial variables, measure the obligations under the
defined benefit plan, and determine the periods to which the obligations are attributed. Meanwhile, the Company
discounts obligations under the defined benefit plan to determine the present value of the defined benefit plan
obligations and the current service cost;
      2)When a defined benefit plan has assets, the Company recognizes the deficit or surplus by deducting the fair
value of defined benefit plan assets from the present value of the defined benefit plan obligation as a net defined
benefit plan liability or net defined benefit plan asset. When a defined benefit plan has a surplus, the Company
measures the net defined benefit plan asset at the lower of the surplus in the defined benefit plan and the asset
ceiling;
      3)At the end of the period, the Company recognizes the following components of Employee compensation
cost arising from defined benefit plan: a. service cost; b. net interest on the net defined benefit plan liability (asset);
and c. changes as a result of remeasurement of the net defined benefit liability (asset). Item a and item b are
recognized in profit or loss or the cost of a relevant asset. Item c is recognized in other comprehensive income and
is not to be reclassified subsequently to profit or loss. However, the Company may transfer those amounts
recognized in other comprehensive income within equity.

(3) Accounting treatment for terminationbenefits

     Termination benefits provided to employees are recognized as an employee benefit liability for termination
benefits, with a corresponding charge to profit or loss at the earlier of the following dates: (1) when the Company
cannot unilaterally withdraw the offer of termination benefits because of an employment termination plan or a
curtailment proposal; or (2) when the Company recognizes cost or expenses related to a restructuring that involves
the payment of termination benefits.

(4) Accounting treatment for Other long-term Employee compensation

     When other long-term Employee compensation provided to the employees satisfied the conditions for
classifying as a defined contribution plan, those benefits are accounted for in accordance with the requirements

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                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

relating to defined contribution plan, while other benefits are accounted for in accordance with the requirements
relating to defined benefit plan. The Company recognizes the cost of Employee compensation arising from other
long-term Employee compensation as the followings: a. service cost; b. net interest on the net liability or net
assets of other long-term Employee compensation; and c. changes as a result of remeasurement of the net liability
or net assets of other long-term Employee compensation. As a practical expedient, the net total of the aforesaid
amounts is recognized in profit or loss or included in the cost of a relevant asset.

35. Lease obligations

     At the inception date of the lease, the Company recognizes the present value of the outstanding lease
payments as a lease liability. The present value of lease payments is calculated using the interest rate embedded in
the lease as the discount rate, or if the interest rate embedded in the lease cannot be determined, the company's
incremental borrowing rate is used as the discount rate. The difference between the lease payments and their
present value is recognized as an unrecognized financing expense, and interest expense is recognized in each
period of the lease term at the discount rate used to recognize the present value of the lease payments and is
included in profit or loss for the current period. Variable lease payments that are not included in the measurement
of the lease liability are recognized in profit or loss when they are actually incurred.
     After the commencement date of the lease term, when there is a change in the substantive fixed payments, a
change in the amount expected to be payable for the guaranteed residual value, a change in the index or rate used
to determine the lease payments, or a change in the evaluation result or actual exercise of the purchase option,
renewal option or termination option, the Company remeasures the lease liability at the present value of the
changed lease payments and adjusts the carrying amount of the right-of-use asset accordingly. If the carrying
amount of the right-of-use asset has been reduced to zero but the lease liability still needs to be further reduced,
the remaining amount is recognized in profit or loss for the current period.

36. Projected liabilities

       1. The Company recognizes a contingent obligation arising from external guarantees, litigation matters,
product quality guarantees, loss-making contracts, etc. as a present obligation to be assumed by the Company, when
it is probable that an outflow of economic benefits will result from the performance of the obligation and the amount
of the obligation can be measured reliably, the Company recognizes the obligation as a projected liability.
       2. The company initially measures the projected liability based on the best estimate of the expenditure required
to settle the related present obligation and reviews the carrying amount of the projected liability at the balance sheet
date.

37. Share-based payment

      1.Types of share-based payment
      Share-based payment consists of equity-settled share-based payment and cash-settled share-based payment.
      2.Accounting treatment for settlements, modifications and cancellations of share-based payment plans
      (1)Equity-settled share-based payment
      For equity-settled share-based payment transaction with employees, if the equity instruments granted vest
immediately, the fair value of those equity instruments is measured at grant date and recognized as transaction
cost or expense, with a corresponding adjustment in capital reserve; if the equity instruments granted do not vest
until the counterparty completes a specified period of service, at the balance sheet date within the vesting period,

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the fair value of those equity instruments measured at grant date based on the best estimate of the number of
equity instruments expected to vest is recognized as transaction cost or expense, with a corresponding adjustment
in capital reserve.
     For equity-settled share-based payment transaction with parties other than employees, if the fair value of the
services received can be measured reliably, the fair value is measured at the date the Company receives the
service; if the fair value of the services received cannot be measured reliably, but that of equity instruments can be
measured reliably, the fair value of the equity instruments granted measured at the date the Company receives the
service is referred to, and recognized as transaction cost or expense, with a corresponding increase in equity.
     (2)Cash-settled share-based payment
     For cash-settled share-based payment transactions with employees, if share appreciation rights vest
immediately, the fair value of the liability incurred as the acquisition of services is measured at grant date and
recognized as transaction cost or expense, with a corresponding increase in liabilities; if share appreciation rights
do not vest until the employees have completed a specified period of service, the liability is measured, at each
balance sheet date until settled, at the fair value of the share appreciation rights measured at grant date based on
the best estimate of the number of share appreciation right expected to vest.
     (3)Modifications and cancellations of share-based payment plan
     If the modification increases the fair value of the equity instruments granted, the Company includes the
incremental fair value granted in the measurement of the amount recognized for services received as consideration
for the equity instruments granted; similarly, if the modification increases the number of equity instruments
granted, the Company includes the fair value of the additional equity instruments granted, in the measurement of
the amount recognized for services received as consideration for the equity instruments granted; if the Company
modifies the vesting conditions in a manner that is beneficial to the employee, the Company takes the modified
vesting conditions into account.
     If the modification reduces the fair value of the equity instruments granted, the Company does not take into
account that decrease in fair value and continue to measure the amount recognized for services received as
consideration for the equity instruments based on the grant date fair value of the equity instruments granted; if the
modification reduces the number of equity instruments granted to an employee, that reduction is accounted for as
a cancellation of that portion of the grant; if the Company modifies the vesting conditions in a manner that is not
beneficial to the employee, the Company does not take the modified vesting conditions into account.
     If the Company cancels or settles a grant of equity instruments during the vesting period (other than that
cancelled when the vesting conditions are not satisfied), the Company accounts for the cancellation or settlement
as an acceleration of vesting, and therefore recognizes immediately the amount that otherwise would have been
recognized for services received over the remainder of the vesting period.

38. Other financial instruments such as preferred shares, perpetual bonds

39. Revenue

     Revenue recognition and measurement principle
     1.Revenue recognition principles
     At contract inception, the Company shall assess the contracts and shall identify each performance obligation
in the contracts, and determine whether the performance obligation should be satisfied over time or at a point in
time.
     The Company satisfies a performance obligation over time if one of the following criteria are met, otherwise,


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                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

the performance obligation is satisfied at a point in time: (1) the customer simultaneously receives and consumes
the economic benefits provided by the Company’s performance as the Company performs; (2) the customer can
control goods as they are created by the Company’s performance; (3) goods created during the Company’s
performance have irreplaceable uses and the Company has an enforceable right to the payments for performance
completed to date during the whole contract period.
      For each performance obligation satisfied over time, the Company shall recognize revenue over time by
measuring the progress towards complete satisfaction of that performance obligation. In the circumstance that the
progress cannot be measured reasonably, but the costs incurred in satisfying the performance obligation are
expected to be recovered, the Company shall recognize revenue only to the extent of the costs incurred until it can
reasonably measure the progress. For each performance obligation satisfied at a point in time, the Company shall
recognize revenue at the time point that the client obtains control of relevant goods or services. To determine
whether the customer has obtained control of goods, the Company shall consider the following indications: (1) the
Company has a present right to payment for the goods, i.e., the customer is presently obliged to pay for the goods;
(2) the Company has transferred the legal title of the goods to the customer, i.e., the customer has legal title to the
goods; (3) the Company has transferred physical possession of the goods to the client, i.e., the customer has
physically possessed the goods; (4) the Company has transferred significant risks and rewards of ownership of the
goods to the client, i.e., the customer has obtained significant risks and rewards of ownership of the goods; (5) the
customer has accepted the goods; (6) other evidence indicating the customer has obtained control over the goods.
      2.Revenue measurement principle
      (1)Revenue is measured at the amount of the transaction price that is allocated to each performance
obligation. The transaction price is the amount of consideration to which the Company expects to be entitled in
exchange for transferring goods or services to a customer, excluding amounts collected on behalf of third parties
and those expected to be refunded to the customer.
      (2)If the consideration promised in a contract includes a variable amount, the Company shall confirm the best
estimate of variable consideration at expected value or the most likely amount. However, the transaction price that
includes the amount of variable consideration only to the extent that it is high probable that a significant reversal
in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable
consideration is subsequently resolved.
      (3)In the circumstance that the contract contains a significant financing component, the Company shall
determine the transaction price based on the price that a customer would have paid for if the customer had paid
cash for obtaining control over those goods or services. The difference between the transaction price and the
amount of promised consideration is amortized under effective interest method over contractual period. The
effects of a significant financing component shall not be considered if the Company expects, at the contract
inception, that the period between when the customer obtains control over goods or services and when the
customer pays consideration will be one year or less.
      (4)For contracts containing two or more performance obligations, the Company shall determine the
stand-alone selling price at contract inception of the distinct good underlying each performance obligation and
allocate the transaction price to each performance obligation on a relative stand-alone selling price basis.
      3.Revenue recognition method
      The Company’s sales of hand tools and power tools, laser measurement, storage and PPE are performance
obligations satisfied at a point in time. Revenue from domestic sales is recognized when the Company has
delivered goods to the designated address as agreed by contract and such delivered goods have been verified for
acceptance by customers, and the Company has collected the payments or has obtained the right to the payments,
and related economic benefits are highly probable to flow to the Company. Revenue from overseas sales is


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                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

recognized when the Company has declared goods to the customs based on contractual agreements and has
obtained a bill of lading, and the Company has collected the payments or has obtained the right to the payments,
and related economic benefits are highly probable to flow to the Company.
     Revenue recognition principles’ differences may occur in the similar business but different operating models.

40. Government grants

      1.Government grants shall be recognized if, and only if, the following conditions are all met: (1) the
Company will comply with the conditions attaching to the grants; (2) the grants will be received. Monetary
government grants are measured at the amount received or receivable. Non-monetary government grants are
measured at fair value, and can be measured at nominal amount in the circumstance that fair value cannot be
assessed.
      2.Government grants related to assets
      Government grants related to assets are government grants with which the Company constructs or otherwise
acquires long-term assets under requirements of government. In the circumstances that there is no specific
government requirement, the Company shall determine based on the primary condition to acquire the grants, and
government grants related to assets are government grants whose primary condition is to construct or otherwise
acquire long-term assets. They offset carrying amount of relevant assets, or they are recognized as deferred
income. If recognized as deferred income, they are included in profit or loss on a reasonable and systematic basis
over the useful lives of the relevant assets. Those measured at notional amount are directly included into profit or
loss. For assets sold, transferred, disposed or damaged within the useful lives, balance of unamortized deferred
income is transferred into profit or loss of the period in which the disposal occurred.
      3.Government grants related to income
      Government grants related to income are government grants other than those related to assets. For
government grants that contain both parts related to assets and parts related to income, in which those two parts
are blurred, they are thus collectively classified as government grants related to income. For government grants
related to income used for compensating the related future cost, expenses or losses, they are recognized as
deferred income and included in profit or loss or used to offset relevant cost during the period in which the
relevant cost, expenses or losses are recognized; for government grants related to income used for compensating
the related cost, expenses or losses incurred to the Company, they are directly included in profit or loss or used to
offset relevant cos
      4. Government grants related to the ordinary course of business shall be included into other income or used
to offset relevant cost based on business nature, while those not related to the ordinary course of business shall be
included into non-operating revenue or expenditures.

41. Deferred tax assets/Deferred tax liabilities

      1.Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between
the carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and tax base
of items not recognized as assets and liabilities but with their tax base being able to be determined according to
tax laws) and in accordance with the tax rate applicable to the period during which the assets are expected to be
recovered or the liabilities are expected to be settled.
      2.A deferred tax asset is recognized to the extent of the amount of the taxable income, which it is most likely
to obtain and which can be deducted from the deductible temporary difference. At the balance sheet date, if there


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                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

is any exact evidence that it is probable that future taxable income will be available against which deductible
temporary differences can be utilized, the deferred tax assets unrecognized in prior periods are recognized.
     3.At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a
deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable income will be
available to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to
the extent that it becomes probable that sufficient taxable income will be available.
     4. The income tax and deferred tax for the period are treated as income tax expenses or income through profit
or loss, excluding those arising from the following circumstances: (a) business combination; and (b) the
transactions or items directly recognized in equity.

42. Leases

(1) Accounting treatment for operatinglease

      1. The Company operates as a lessee
      At the commencement date of the lease term, the Company recognizes leases with a lease term of not more
than 12 months that do not include a purchase option as short-term leases; leases with a lower value when the
single leased asset is a brand-new asset are recognized as low-value asset leases. If the company subleases or
expects to sublease the leased assets, the original lease is not recognized as a low-value asset lease.
      For all short-term leases and leases of low-value assets, the Company recognizes the lease payments as the
cost of the relevant assets or current profit or loss on a straight-line basis during each period of the lease term.
      Except for short-term leases and leases of low-value assets for which simplified treatment is applied as
described above, the Company recognizes a right-of-use asset and a lease liability for leases at the commencement
date of the lease term.
      (1) Right-to-use assets
      Right-of-use assets are initially measured at cost, which includes: (1) the initial measurement amount of the
lease liability; (2) the amount of lease payments made on or before the commencement date of the lease, less the
amount related to the lease incentive already taken, if any; (3) the initial direct costs incurred by the lessee; and; (4)
costs expected to be incurred by the lessee to disassemble and remove the leased asset, restore the site where the
leased asset is located, or restore the leased asset to the condition agreed upon under the terms of the lease.
      The Company depreciates right-of-use assets on a straight-line basis. If it is reasonably certain that ownership
of the leased assets will be obtained at the end of the lease term, the Company depreciates the leased assets over
their remaining useful lives. If it is not reasonably certain that ownership of the leased assets can be obtained at
the end of the lease term, the Company depreciates the leased assets over the shorter of the lease term and the
remaining useful life of the leased assets.
      (2) Lease liabilities
      At the inception date of a lease, the Company recognizes the present value of the lease payments that have
not been paid as lease liability. When calculating the present value of the lease payments, the discount rate is the
interest rate embedded in the lease. If the interest rate embedded in the lease cannot be determined, the discount
rate is the company's incremental borrowing rate. The difference between the lease payments and their present
value is recognized as an unrecognized financing expense, and interest expense is recognized in each period of the
lease term at the discount rate used to recognize the present value of the lease payments and is included in profit
or loss for the current period. Variable lease payments that are not included in the measurement of the lease
liability are recognized in profit or loss when they are actually incurred.


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                                                 Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

      After the commencement date of the lease term, when there is a change in the substantive fixed payments, a
change in the amount expected to be payable for the guaranteed residual value, a change in the index or rate used
to determine the lease payments, or a change in the evaluation result or actual exercise of the purchase option,
lease renewal option or termination option, the Company remeasures the lease liability at the present value of the
changed lease payments and adjusts the carrying amount of the right-of-use asset accordingly. If the carrying
amount of the right-of-use asset has been reduced to zero but the lease liability still needs to be further reduced,
the remaining amount is recognized in profit or loss for the current period.
      2. The Company acts as a lessor
      At the inception date of a lease, the Company classifies a lease that transfers substantially all the risks and
rewards associated with the ownership of the leased asset as a finance lease, except for those that are classified as
operating leases.
      (1) Operating leases
      The Company recognizes lease receipts as rental income on a straight-line basis during each period of the
lease term, and the initial direct costs incurred are capitalized and apportioned on the same basis as the recognition
of rental income and recognized in profit or loss in the current period. Variable lease payments acquired by the
Company in connection with operating leases that are not included in the lease payments are recognized in profit
or loss when they are actually incurred.
      (2) Finance leases
      At the commencement date of the lease term, the Company recognizes finance lease receivables at the net
lease investment (the sum of the unguaranteed residual value and the present value of the lease payments not yet
received at the commencement date of the lease term discounted at the interest rate embedded in the lease) and
derecognizes the finance lease assets. During each period of the lease term, the Company calculates and
recognizes interest income based on the interest rate embedded in the lease.
      Variable lease payments obtained by the Company that are not included in the net lease investment
measurement are recognized in profit or loss when they are actually incurred.
      3. Sale and leaseback
      (1) The Company operates as a lessee
      The Company assesses whether the transfer of assets in a sale-and-leaseback transaction is a sale in accordance
with the provisions of "CASBE No. 14, "Revenue".
      If the transfer of assets in a sale-and-leaseback transaction is a sale, the company measures the right-of-use
asset resulting from the sale-and-leaseback at the portion of the original asset's carrying value that relates to the
right-of-use acquired by the leaseback, and recognizes a gain or loss related to the right transferred to the lessor
only.
      If the transfer of an asset in a sale-and-leaseback transaction is not a sale, the Company continues to recognize
the transferred asset and at the same time recognizes a financial liability equal to the transfer proceeds and accounts
for the financial liability in accordance with "CASBE No. 22 - Recognition and Measurement of Financial
Instruments".
      (2) The Company operates as a lessor
      The Company assesses and determines whether the transfer of assets in sale-and-leaseback transactions is a
sale in accordance with the provisions of "CASBE No. 14 - Revenue".
      If the transfer of assets in a sale-and-leaseback transaction is a sale, the Company accounts for the purchase of
assets in accordance with other applicable CASBEs and accounts for the lease of assets in accordance with "CASBE
No. 21 - Leases".
      If the transfer of assets in a sale-and-leaseback transaction is not a sale, the Company does not recognize the


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                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

transferred asset, but recognizes a financial asset equal to the transfer proceeds and accounts for the financial asset in
accordance with "CASBE No. 22 - Recognition and Measurement of Financial Instruments".

(2) Accounting treatment for financelease

43. Other significant accounting policies and estimates

44. Significant changes in accounting policies and estimates

(1) Significant changes in accountingpolicies

√ Applicable □ Not Applicable

 Content and reason for changes
     in accounting policies                      Approval procedure                              Notes
     1. The Company (with the exception of Lista Holding AG and its subsidiaries) implemented the revised
"CASBE No. 21-Leases" (hereinafter referred to as the new lease standard) as of January 1, 2021 (hereinafter
referred to as the first implementation date).
     (1) For contracts existing before the first implementation date, the Company has elected not to reassess whether
they are leases or contain leases.
     (2) For leases for which the Company is the lessee, the Company adjusts the amount of opening retained
earnings and other related items in the financial statements for the current reporting period based on the cumulative
effect of the implementation of the new leasing standard and the previous standard at the date of first-time
implementation, without adjusting the information for comparable periods. The specific treatment is as follows:
     For finance leases prior to the date of first-time implementation, the Company measured right-of-use assets and
lease liabilities at the original carrying amounts of finance lease incoming assets and finance lease payables,
respectively, at the date of first-time implementation.
     For operating leases prior to the date of initial execution, the Company measures the lease liability at the
present value of the remaining lease payments discounted at the Company's incremental borrowing rate as of the
date of initial execution based on the amount equal to the lease liability, with necessary adjustments for prepaid
rentals to measure the right-to-use asset.
     At the date of initial implementation, the Company tests right-of-use assets for impairment and accounts for
them accordingly in accordance with Note III(XX) to these financial statements.
     1) The main effects of the implementation of the new lease standard on the Company's financial statements as
of January 1, 2021 are as follows:
  Item                                                                  Balance Sheet
                                         December 31, 2020          Impact of new lease         December 31, 2021
                                                                    standard adjustment
         Right-to-use assets                     269,670,508.77           123,383,672.18                 393,054,180.95
         Other current assets                    146,623,787.19               -758,190.43                145,865,596.76
      Other non-current assets                     39,438,331.18              -720,572.67                 38,717,758.51
 Non-current liabilities due within              221,714,183.90             30,609,489.89                252,323,673.79
            one year
          Lease obligations                      246,303,999.08             91,295,419.19                337,599,418.27


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                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

      2) Simplified treatment applied to operating leases prior to the date of initial execution
      (i) For lease contracts completed within 12 months after the date of initial execution, the company adopts the
simplified method and does not recognize right-of-use assets and lease liabilities.
      (ii) The company uses the same discount rate for lease contracts with similar characteristics when measuring
lease liabilities.
      (iii) The measurement of right-of-use assets does not include initial direct costs.
      (iv) The company determines the lease term based on the actual exercise of the option to renew the lease or the
option to terminate the lease prior to the first execution date and other updates.
      (v) As a substitute for impairment testing of right-of-use assets, the company assesses whether the contract
containing the lease is a loss-making contract prior to the date of initial execution in accordance with "CASBE
No.13 - Contingencies" and adjusts the right-of-use asset based on the amount of the provision for loss recorded at
the balance sheet date prior to the date of initial execution.
      (vi) If a lease change occurs before the date of initial execution, the company accounts for the lease change
according to the final arrangement of the lease change.
      The above simplified treatment has no significant impact on the Company's financial statements.
       3) For operating lease contracts for low-value assets existing before the date of first execution, the Company
adopts the simplified method of not recognizing right-of-use assets and lease liabilities, and accounts for them in
accordance with the new lease standard from the date of first execution.
       4) For lease contracts where the Company is the lessor, the Company shall account for them in accordance
with the new leasing standard from the date of first execution.
       5) Treatment of sale and leaseback transactions existing before the date of first execution
      For sale and leaseback transactions existing before the date of first-time execution, the Company does not
reassess whether the transfer of assets meets the requirements of "CASBE No. 14 - Revenue" for accounting as a
sale on the date of first-time execution.
      For leaseback transactions that were accounted for as sales and finance leases prior to the date of initial
execution, the Company, as the seller (lessee), accounts for the leaseback in the same manner as other finance leases
existing at the date of initial execution and continues to amortize the related deferred gain or loss over the lease term.
      For sale and leaseback transactions that were accounted for as sales and operating leases prior to the date of
initial execution, the Company, as the seller (lessee), accounts for the leasebacks in the same manner as other
operating leases existing at the date of initial execution and adjusts the right-of-use assets based on the related
deferred gains or losses recorded on the balance sheet prior to the date of initial execution.
      2. The Company implemented the Interpretation of "CASBE No. 14" issued by the Ministry of Finance in
fiscal 2021 effective January 26, 2021, and this change in accounting policy had no impact on the Company's
financial statements.
      3. The Company will implement the "CASBE No. 15" issued by the Ministry of Finance on December 31, 2021,
and the change in accounting policy will have no impact on the Company's financial statements.

(2) Significant changes in accountingestimates

□ Applicable √ Not Applicable


(3) Adjustments of the related financial statement items at the beginning of the years since 2021
preliminary use new revenue principles and new lease standards

√ Applicable □ Not Applicable

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                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Whether need to adjust the balance sheet account at the beginning of the year
√ Yes□ No

Consolidated balance sheet
                                                                                                                Unit: Yuan

      Items                          December 31, 2020                 December 31, 2021           Amount adjusted

Current assets:

 Cash and bank balances                       3,750,506,068.39                  3,750,506,068.39

 Settlement funds

 Loans to other banks
 Held-for-trading
                                                 63,751,278.55                    63,751,278.55
financial assets
 Derivative financial
assets

 Notes receivable                                11,530,057.49                    11,530,057.49

 Accounts receivable                          1,260,096,723.75                  1,260,096,723.75

 Receivables financing                          378,066,065.73                   378,066,065.73

 Prepaid expenses                                80,008,380.84                    80,008,380.84

 Premiums receivable
 Reinsurance accounts
receivable

 Reinsurance
reservereceivable

 Other receivables                               58,613,172.02                    58,613,172.02

 Including:           interest
receivable
Dividends receivable

 Financial assets under
reverse repo

 Inventories                                  1,386,320,837.86                  1,386,320,837.86

 Contract assets
 Assets classified as held
for sale
 Non-current assets due
                                                      90,583.31                       90,583.31
within one year

 Other current assets                           146,623,787.19                   145,865,596.76               -758,190.43



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Total current assets         7,135,606,955.13            7,134,848,764.70                -758,190.43

Non-current assets:
 Loans and advances
paid

 Debt investments

 Other debt investments

 Long-term receivables           2,866,819.08                2,866,819.08

 Long-term equity
                             2,207,878,459.67            2,207,878,459.67
investments
 Other equity instrument
                               16,550,000.00               16,550,000.00
investments
 Other non-current
financial assets

 Investment property

 Fixed assets                1,348,034,595.31            1,348,034,595.31

 Construction in progress     166,268,204.96              166,268,204.96

 Productive biological
assets

 Oil & gas assets

 Right-of-use assets          269,670,508.77              393,054,180.95              123,383,672.18

 Intangible assets            607,716,594.78              607,716,594.78



Developmentexpenditures

 Goodwill                    1,825,527,983.56            1,825,527,983.56

 Long-term prepayments         16,407,174.63               16,407,174.63

 Deferred tax assets           41,813,418.61               41,813,418.61

 Other non-current assets      39,438,331.18               38,717,758.51                 -720,572.67

Total non-current assets     6,542,172,090.55            6,664,835,190.06             122,663,099.51

Total assets                13,677,779,045.68           13,799,683,954.76             121,904,909.08

Current liabilities:

 Short-term borrowings       1,015,117,910.75            1,015,117,910.75

 Central bank loans

 Loans from other banks


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                                     Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

 Held-for-trading
financial liabilities
 Derivative financial
liabilities

 Notes payable                  24,913,000.00               24,913,000.00

 Accounts payable             1,168,327,985.88            1,168,327,985.88

 Advances received

 Contract liabilities           72,490,372.55               72,490,372.55

 Financial      liabilities
under repo
 Absorbing deposit and
interbank deposit
 Deposit for agency
security transaction
Deposit for agency
security underwriting
Employee
compensation                   195,907,997.48              195,907,997.48
payable

Taxes and rates payable        185,995,732.67              185,995,732.67

 Other payables                 26,425,047.57               26,425,047.57

Including: interest payable

Dividends payable

 Handling fee and
commission
payable
 Reinsurance accounts
payable
 Liabilities classified as
held for sale
 Non-current liabilities
                               221,714,183.90              252,323,673.79                30,609,489.89
due within one year

 Other current liabilities

Total current liabilities     2,910,892,230.80            2,941,501,720.69               30,609,489.89

Non-current liabilities:

 Insurancepolicy reserve



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                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


 Long-term borrowings            509,555,882.91              509,555,882.91

 Bonds payable                   799,729,005.89              799,729,005.89

Including:          Preferred
shares
 Perpetual bonds

Lease liabilities                246,303,999.08              337,599,418.27                91,295,419.19

Long-term payables                 1,499,174.07                 1,499,174.07

Long-term Employee
                                  77,924,731.15               77,924,731.15
compensation payable

Provisions                         3,550,413.29                 3,550,413.29

Deferred income                    3,992,738.59                 3,992,738.59

 Deferred tax liabilities         86,920,686.60               86,920,686.60

Othernon-current
liabilities

Total            non-current
                                1,729,476,631.58            1,820,772,050.77               91,295,419.19
liabilities

Total liabilities               4,640,368,862.38            4,762,273,771.46             121,904,909.08

Equity:

 Share capital                  1,075,247,700.00            1,075,247,700.00

Other equity instruments         190,509,257.28              190,509,257.28

 Including:         Preferred
shares
Perpetual bonds

 Capital reserve                2,095,044,541.15            2,095,044,541.15

Less: Treasury shares            105,492,690.23              105,492,690.23

Other     comprehensive
                                -105,837,346.87              -105,837,346.87
income

 Special reserve

 Surplus reserve                 521,602,764.46              521,602,764.46

 General risk reserve

 Undistributed profit           5,155,116,352.49            5,155,116,352.49

Total equity attributable
                                8,826,190,578.28            8,826,190,578.28
to the parent company

 Non-controlling interest        211,219,605.02              211,219,605.02


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                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


Total owners’ equity                     9,037,410,183.30             9,037,410,183.30

Total liabilities & owners’
                                         13,677,779,045.68            13,799,683,954.76              121,904,909.08
equity
Instruction for adjustments
Parent company balance sheet
                                                                                                          Unit: Yuan

         Items                     December 31, 2020            January 01, 2021             Amount adjusted

Current assets:

 Cash and bank balances                   2,287,675,650.67             2,287,675,650.67

 Held-for-trading
                                             13,386,400.00                13,386,400.00
financial assets

       Derivative financial
assets

 Notes receivable                             8,314,207.49                 8,314,207.49

 Accounts receivable                      1,275,860,264.50             1,275,860,264.50

 Receivables financing                      368,774,999.78              368,774,999.78

 Prepaid expenses                            39,010,545.50                39,010,545.50

 Other receivables                          883,363,518.44              883,363,518.44

 Including:             Interest
receivable

Dividends receivable

 Inventories                                 77,384,999.66                77,384,999.66

 Contract assets

 Assets classified as held for
sale

 Non-current assets due
within one year

 Other current assets                        65,377,083.73                65,377,083.73

Total current assets                      5,019,147,669.77             5,019,147,669.77

Non-current assets:

 Debt investments

 Other debt investments

 Long-term receivables

 Long-term         equity                 5,155,164,634.30             5,155,164,634.30


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                                              Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

investments

 Other        equity     instrument
                                         16,550,000.00               16,550,000.00
investments

 Other         non-current
financial assets

 Investment property

 Fixed assets                           142,635,599.93              142,635,599.93

 Construction in progress                  5,723,398.50                5,723,398.50

 Productive            biological
assets

 Oil & gas assets

 Right-of-use assets

 Intangible assets                       17,746,992.84               17,746,992.84

Development
expenditures

 Goodwill

 Long-term prepayments

 Deferred tax assets                     15,288,010.17               15,288,010.17

 Other non-current assets                  1,957,642.06                1,957,642.06

Total non-current assets               5,355,066,277.80            5,355,066,277.80

Total assets                          10,374,213,947.57           10,374,213,947.57

Current liabilities:

 Short-term borrowings                  960,645,447.14              960,645,447.14

 Held-for-trading
financial liabilities

 Derivative        financial
liabilities

 Notes payable

 Accounts payable                       738,095,592.36              738,095,592.36

 Advances received

 Contract liabilities                     39,453,211.46               39,453,211.46

Employee
                                          45,611,342.23               45,611,342.23
compensation payable

Taxes and rates payable                 103,261,356.89              103,261,356.89


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Other payables                       23,933,506.71               23,933,506.71

Including: interest payable

Dividends payable

 Liabilities classified as
held for sale

 Non-current         liabilities
                                     73,585,483.86               73,585,483.86
due within one year

 Other current liabilities

Total current liabilities          1,984,585,940.65            1,984,585,940.65

Non-current liabilities:

 Long-term borrowings               220,836,522.82              220,836,522.82

 Bonds payable                      799,729,005.89              799,729,005.89

Including: Preferred shares

 Perpetual bonds

 Lease liabilities

Long-term payables

 Long-term          Employee
compensation payable

 Provisions

 Deferred income                      2,377,073.64                2,377,073.64

 Deferred tax liabilities             6,363,085.38                6,363,085.38

 Other        non-current
liabilities

Total non-current liabilities      1,029,305,687.73            1,029,305,687.73

Total liabilities                  3,013,891,628.38            3,013,891,628.38

Equity:

 Share capital                     1,075,247,700.00            1,075,247,700.00

 Other equity instruments           190,509,257.28              190,509,257.28

 Including: Preferred shares

 Perpetual bonds

 Capital reserve                   2,103,492,365.12            2,103,492,365.12

 Less: Treasury shares              105,492,690.23              105,492,690.23

 Other        comprehensive          -27,385,736.04              -27,385,736.04


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                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

income

 Special reserve

 Surplus reserve                         517,854,467.55                  517,854,467.55

 Undistributed profit                  3,606,096,955.51                3,606,096,955.51

Total owners’equity                   7,360,322,319.19                7,360,322,319.19

Total                  liabilities
                                      10,374,213,947.57               10,374,213,947.57
&owners’equity

Instruction for adjustments


(4) Instructions of retrospectively adjusted comparative data since 2021 preliminary adopt to new revenue
principles and new lease standards

□ Applicable √ Not Applicable


45. Others

VI. Taxes

1. Main taxes and tax rates


                   Taxes                  Taxation basis                                Tax rates

                                      The output tax calculated based on the
                                      revenue from sales of goods or
                                      rendering of services in accordance
Value-added tax (VAT)                 with the tax law, net of the input tax 13%、6%
                                      that is allowed to be deducted in the
                                      current period,thedifference shall be
                                      the value-added taxpayable
Urban      maintenance          and
                                                                                7%、5%
construction tax                      Turnover tax actually paid
                                                                                See the instruction of the enterprise income
                                                                                tax rate of the tax payers with different tax
Enterprise income tax                 Taxable income
                                                                                rates

                                      For housing property levied on the
Housing property tax                  basis of price, housing property tax is
                                      levied at the rate of 1.2% ofthe
                                      balance after deducting 30% of the 1.2%、12%
                                      cost; for housing property levied on
                                      the basis of rent, housingproperty tax
                                      is levied at the rate of 12% ofrent


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                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

                                           revenue.

Education surcharge                        Turnover tax actually paid            3%

Local education surcharge                  Turnover tax actually paid            2%

Different enterprise income tax rates applicable to different taxpayers:

                             Taxpayers                                              Income tax rate

The Company                                                    15%

Hong Kong Great Star International Co., Ltd.                   16.50%

Prim' Tools Limited                                            16.50%

HongKong Goldblatt Industrial Co.,Ltd                          16.50%

Hong Kong International Huada Kejie Opto-Electro Instrument
                                                               16.50%
Co., Ltd.

Hongkong Shop-Vac International Co., Limited                   16.50%

Geelong Sales Company International (HK) Limited               16.50%

Changzhou Huada Kejie Opto-electro Instrument Co., Ltd.        15%

Hangzhou United Electric Manufacture Co., Ltd.                 15%

Dongguan Ouda Electronics Ltd.                                 15%

Hangzhou GreatStar Intelligent Technology Co., Ltd.            15%

Hangzhou United Tools Co., Ltd.                                15%

Hangzhou United Precision Tool Company                         15%

Zhejiang Yiyang Tool Manufacture Co., Ltd.                     15%

Suzhou Xindadi Hardware Product Co., Ltd.                      15%

Zhongshan Geelong Industrial Co., Ltd                          15%

Geelong Investment Holding Limited                             15%

                                                               13.59%、19%、21%、23.53%、24%、26.50%、27.50%、27.90%、
Greatstar Europe AG and its subsidiaries
                                                               29.13%

Longyou Yiyang Forging Co., Ltd.                               20%

Longyou Yiyang Import & Export Trading Co., Ltd.               20%

Zhejiang Guoxin Tools Co., Ltd.                                20%

Changzhou Huada Kejie Construction Machinery Co., Ltd.         20%

Haining Great Star Hardware Tools Co., Ltd.                    20%

Great Star Vietnam Co.,Ltd                                     20%

Vietnam United Co.,Ltd                                         20%

International Storage Solutions Limited                        20%

TGH(Cambodia)Industrial Co.,LTD                                20%


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                                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Geelong (Thailand) Co .,Ltd                                           20%

GreatStar Industrial Vietnam Co., Ltd                                 20%

XDD Products (USA) LLC                                                21%

Newland.LLC                                                           21%

Great Star Tools USA,Inc and its subsidiaries[Note 1]                 21.1745%

Great Star Japan Co.,Ltd                                              [Note 2]

GreatStar International Holdings Limited                              [Note 3]

Geelong Orchid Holding Limited                                        [Note 4]

Geelong Holdings Limited                                              [Note 4]

Geelong Sales (Macau Commercial) Limited                              [Note 5]

Taxpayers other than the above-mentioned                              25%

[Note 1]:According to the US Internal Revenue Code, Great Star
Industrial USA, LLC, Arrow Fastener Co., LLC, Prime-Line
Products, LLC, 4900 Highlands Parkway, LLC and Hangzhou
Equipment Holdings, LLC are not required to declare and pay
enterprise income tax as LLCs. The subject of taxliability is
Great Star Tools USA, Inc.

[Note 2]:Great Star Japan Co., Ltd. applies progressive tax rate to
pay enterprise income tax.

[Note 3]:GreatStarInternational Holdings Limited is a company
registered in the British Virgin Islands. According to the British
Virgin Islands tax system, no enterprise income tax is required.

[Note 3]:Geelong Orchid Holding Limited and Geelong Holdings
Limited are companies registered in the British Virgin Islands.
According to the British Virgin Islands tax system, no enterprise
income tax is required.

[Note 5] A corporate income tax rate of 0% applies to taxable
income up to MOP600,000, and a corporate income tax rate of
12% applies to any amount exceeding MOP600,000.


2. Tax preferential policies

      1. According to the relevant provisions of the “Administrative Measures for the Recognition of High-tech
Enterprises” (Guo Ke Fa Huo [2016] No. 32) and the “Guidelines for the Management of High-tech Enterprise
Recognition”               (Guo               Ke             Fa              Huo            [2016]             No.
195),theCompanywasrecognizedasahigh-techenterprise,andobtainedthe“High-techEnterpriseCertificate”withthenu
mberofGR201933003334 for a valid period of 3 years (from Year 2019 to Year 2021), and the enterprise income
tax is calculated and levied at a tax rate of 15% in2021.
      2. According to the “List of the First Batch of High-tech Enterprises to be Recognized in Jiangsu Province in
2020” by the National High-tech Enterprise Certification Management Leading Group Office, the subsidiary

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                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Changzhou Huada Kejie Opto-electro Instrument Co., Ltd. was recognized as a high-tech enterprise and obtained
the “High-tech Enterprise Certificate” with the number of GR202032002996 for a valid period of 3 years (from
Year 2020 to Year 2022), and the enterprise income tax is calculated and levied at a tax rate of 15% in 2021.
      3. According to the relevant provisions of the “Administrative Measures for the Recognition of High-tech
Enterprises” (Guo Ke Fa Huo [2016] No. 32) and the “Guidelines for the Management of High-tech Enterprise
Recognition” (Guo Ke Fa Huo [2016] No. 195), the sub-subsidiary Hangzhou United Electric Manufacturing Co.,
Ltd. was recognized as a high-tech enterprise, and obtained the “High-tech Enterprise Certificate” with the number
of GR201933005763 for a valid period of 3 years (from Year 2019 to Year 2021), and the enterprise income tax is
calculated and levied at a tax rate of 15% in2021.
      4. According to the relevant provisions of the “Administrative Measures for the Recognition of High-tech
Enterprises” (Guo Ke Fa Huo [2016] No. 32) and the “Guidelines for the Management of High-tech Enterprise
Recognition” (Guo Ke Fa Huo [2016] No. 195), the sub-subsidiary Dongguan Ouda Electronics Ltd. was
recognized as a high-tech enterprise, and obtained the “High-tech Enterprise Certificate” with the number of
GR202144002851 for a valid period of 3 years (from Year 2021 to Year 2023), and the enterprise income tax is
calculated and levied at a tax rate of 15% in2021.
      5.
Accordingtothe“ResponsetoZhejiangProvince’s2020High-techEnterpriseRegistration”(GuoKeHuoZi[2020]No.25
1)
bytheNationalHigh-techEnterpriseCertificationManagementLeadingGroupOffice,thesubsidiaryHangzhouGreatSta
rIntelligent Technology Co., Ltd. was recognized as a high-tech enterprise, and obtained the “High-tech Enterprise
Certificate” with the number of GR202033007432 for a valid period of 3 years (from Year 2020 to Year 2022), and
the enterprise income tax is calculated and levied at a tax rate of 15% in2021.
      6.
Accordingtothe“ResponsetoZhejiangProvince’s2020High-techEnterpriseRegistration”(GuoKeHuoZi[2020]No.25
1)
bytheNationalHigh-techEnterpriseCertificationManagementLeadingGroupOffice,thesubsidiaryHangzhouUnited
ToolsCo., Ltd. was recognized as a high-tech enterprise, and obtained the “High-tech Enterprise Certificate” with
the number of GR202133002795 for a valid period of 3 years (from Year 2021 to Year 2023), and the enterprise
income tax is calculated and levied at a tax rate of 15% in2021.
      7.
Accordingtothe“ResponsetoZhejiangProvince’s2020High-techEnterpriseRegistration”(GuoKeHuoZi[2020]No.25
1)        bytheNationalHigh-techEnterpriseCertificationManagementLeadingGroupOffice,thesubsidiaryHangzhou
Liansheng Quantity Equipment Manufacturing Co., Ltd. was recognized as a high-tech enterprise, and obtained
the “High-tech Enterprise Certificate” with the number of GR202133004728 for a valid period of 3 years (from
Year 2021 to Year 2023), and the enterprise income tax is calculated and levied at a tax rate of 15% in2021.
      8. According to the relevant provisions of the “Administrative Measures for the Recognition of High-tech
Enterprises” (Guo Ke Fa Huo [2016] No. 32) and the “Guidelines for the Management of High-tech Enterprise
Recognition” (Guo Ke Fa Huo [2016] No. 195),thesub-subsidiaryZhejiang Yiyang Tool Manufacturing Co.,
Ltd.wasrecognizedasahigh-techenterprise,andobtainedthe“High-techEnterpriseCertificate”withthenumberofGR201
933001929foravalidperiod of3years(fromYear2019toYear2021),andthe enterprise income tax is calculated and
levied at a tax rate of 15% in2021.
      9. According to the relevant provisions of the “Administrative Measures for the Recognition of High-tech
Enterprises” (Guo Ke Fa Huo [2016] No. 32) and the “Guidelines for the Management of High-tech Enterprise
Recognition” (Guo Ke Fa Huo [2016] No. 195),thesub-subsidiarySuzhou Xindadi Hardware Products Co.,


                                                                                                                202
                                              Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Ltd.wasrecognizedasahigh-techenterprise,andobtainedthe“High-techEnterpriseCertificate”withthenumberofGR202
132006099foravalidperiod of3years(fromYear2019toYear2021),andthe enterprise income tax is calculated and
levied at a tax rate of 15% in2021.
     10. According to the "Reply Letter on the Third Batch of High and New Technology Enterprises Recorded in
Guangdong Province in 2019" (Guo Ke Huo Zi [2020] No. 54) of the Office of the National High and New
Technology Enterprise Recognition Management Group, the sub-subsidiary Zhongshan Geelong Industrial Co.,
Ltd. was recognized as a high-tech enterprise and obtained the "High and New Technology Enterprise Certificate"
with the number GR201944009085, which is recognized as valid for 3 years (2019-2021) and the corporate
income tax is calculated at 15% tax rate for the year 2021.
     11.In accordance with the “Notice on Issuing the Administrative Measures for VAT Preferential Policies for
Promoting Employment of the Disabled” by Ministry of Finance and State Taxation Administration (Cai Shui
[2016]              No.           52),            the            subsidiaryLongyouHugongForgingThreeToolsCo.,
Ltd.arrangesemploymentforthedisabled.Afterfilingwith the competent tax authority, it enjoys the preferential
policy of limited VAT refund upon collection in2021.
     12. According to the document of the Ministry of Finance and the State Administration of Taxation on the
Implementation of Preferential Income Tax Policies for Small and Micro Enterprises and Individual Entrepreneurs
(Announcement No. 12 of 2021 by the Ministry of Finance and the State Administration of Taxation), from
January 1, 2021 to December 31, 2022, for the part of the annual taxable income of small and slightly profitable
enterprises not exceeding 1 million yuan, the taxable income shall be reduced by 12.50% and the enterprise
income tax shall be paid at a rate of 20%; for the part of the annual taxable income exceeding 1 million yuan but
not exceeding 3 million yuan, the taxable income is reduced by 50% and the enterprise income tax is paid at a rate
of 20%. From January 1, 2021 to December 31, 2021, Longyou Yiyang Forging Co., Ltd, Longyou Yiyang Import
& Export Trading Co., Ltd, Zhejiang Guoxin Tools Co., Ltd, Changzhou Huada Kejie Construction Machinery
Co., Ltd and Haining Great Star Hardware Tools Co., Ltd are applicable to the preferential income tax policy and
pay enterprise income tax at 20% rate.

3. Other

VII. Notes to items of consolidated financial statements

1. Monetary Funds

                                                                                                         Unit: Yuan

                Items                             Closing balance                      Opening balance

Cash on hand                                                   2,574,760.83                          2,874,834.15

Cash in bank                                                3,983,507,419.70                     3,722,569,979.24

Other cash and bank balances                                  47,625,059.63                         25,061,255.00

Total                                                       4,033,707,240.16                     3,750,506,068.39

 Including: Deposited overseas                               802,607,925.10                        692,993,182.89

Restricted     funds      causedby
                                                              32,520,998.98                         20,242,850.31
mortgage, pledge or blocked,etc.


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                                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Other remarks:
     Other monetary funds at the end of the period included bank acceptance deposits of 27,725,700.00 RMB,
securities account funds of 13,598,051.60 RMB, forward exchange settlement deposits of 2,295,252.00 RMB,
ETC deposits of 32,000.00 RMB, customs duty bond deposits of 1,975,140.00 RMB, engineering performance
deposits of 492, 906.98 RMB, and deposits deposited in Alipay amounted of 1,506,009.05RMB. Other
monetary funds at the beginning of the period included bank acceptance deposits of 14,267,400.00 RMB,
investment deposits deposited of 2,154,766.92 RMB, forward exchange settlement deposits of 3,295,074.50 RMB,
engineering performance deposits of 495,608.89, ETC deposits of 30,000.00 RMB and deposits deposited with
Alipay of 4,818,404.69 RMB.

2.Held-for-trading financial assets

                                                                                                       Unit: Yuan

                 Items                         Closing balance                     Opening balance

 Including:                                                 13,557,757.75                       63,751,278.55

Financial assets classified as at fair
value through profit or loss

 Including:                                                                                     27,191,411.52

Debt instrument investments                                     4,330,070.00                    36,027,480.86

Derivative financial assets                                     9,227,687.75                         532,386.17

  Including:

Total                                                       13,557,757.75                       63,751,278.55

Other remarks:

3. Derivative financial assets

                                                                                                       Unit: Yuan

                 Item                         Closing balance                     Opening balance

Other remarks:

4.Notes receivable

(1)Details oncategories

                                                                                                       Unit: Yuan

                 Item                         Closing balance                     Opening balance

Bank acceptance                                                 5,663,502.93                        9,706,191.40

Trade acceptance                                                 966,411.25                         1,823,866.09

Total                                                           6,629,914.18                    11,530,057.49



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                                                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

                                                                                                                                   Unit: Yuan

                                            Closing balance                                              Opening balance

                                                   Provision for bad                                         Provision for bad
                           Book balance                                                Book balance
                                                        debts                                                     debts
        Category                                                        Carrying                                                   Carrying
                                                           Provision                                                   Provision
                                    Proportio                           amount                  Proportio                           amount
                         Amount                 Amount proportio                     Amount                 Amount     proportio
                                        n                                                            n
                                                                ns                                                         ns

Receivables
withprovision for 6,629,91                                             6,629,914 11,530,05                                         11,530,05
                           100.00%                                                              100.00%
baddebts made on      4.18                                                   .18         7.49                                            7.49
acollective basis

Including:
                         5,663,50                                      5,663,502 9,706,191                                         9,706,191
                                      85.42%                                                      84.18%
Bank acceptance              2.93                                            .93          .40                                             .40

                         966,411.                                      966,411.2 1,823,866                                         1,823,866
                                      14.58%                                                      15.82%
Trade acceptance               25                                                5        .09                                             .09

   Including:

                         6,629,91                                      6,629,914 11,530,05                                         11,530,05
Total                                100.00%                                                    100.00%
                             4.18                                            .18         7.49                                            7.49

Bad debts provision made on an individual basis
                                                                                                                                   Unit: Yuan

                                                                             Closing balance
           Name
                                    Book balance           Provision for bad debts       Provision proportions        Provision reason

Bad debts provision made on a portfolio basis:
                                                                                                                                   Unit: Yuan

                                                                                   Closing balance
                Items                        Book balance                   Provision for bad debts              Provision proportions

Bank acceptance portfolio                                5,663,502.93

Trade acceptance portfolio                                 966,411.25

Subtotal                                                 6,629,914.18                                                      --

Instructions of this portfolio recognition basis
Bad debts provision made on a portfolio basis:
                                                                                                                                   Unit: Yuan

                                                                                   Closing balance
                Name
                                             Book balance                   Provision for bad debts              Provision proportions

Instructions of this portfolio recognition basis
Provision for bad debts of accounts receivable is made in accordance with the general model of expected credit loss, please refer to

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the disclosure of other receivables to disclose the relevant information on the provision for bad debts:
□ Applicable √ Not Applicable


(2) Provision , recovered or reversed of the bad debt in currentperiod

Provision for bad debts in current period
                                                                                                                                   Unit: Yuan

                                                                            Amount
     Category        Opening balance                                                                                    Closing balance
                                               Provision         Reversal            Write-off             Others

The major provision for bad debts reversal in current period:
□ Applicable √ Not Applicable


(3) Pledged notes receivable at end of the accountperiod

                                                                                                                                   Unit: Yuan

                                  Item                                                   Closing balance of pledged


(4) Notes receivable by the Company endorsed or discounted and not due on the balance sheetdate

                                                                                                                                   Unit: Yuan

                     Item                       Closing balance derecognized                      Closing balance unrecognized


(5) Notesreceivabletransfertoaccountsreceivableduetothefailuretoperformanceatendoftheperiod.

                                                                                                                                   Unit: Yuan

                                  Item                                       Closing balance of accounts receivable transferred

Other instructions


(6) Notes receivable actually written off in currentperiod

                                                                                                                                   Unit: Yuan

                                  Item                                                       Written off amount

Including the major written off of the notes receivables:
                                                                                                                                   Unit: Yuan

                            Notes receivable
                             categorized                                                    Written             off Related to related
   Company name                                  Written off amount   Written off reason
                                 by nature
                                                                                            procedure               party or not


Instructions for written off the notes receivables:




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5. Accounts receivable

(1) Details oncategories

                                                                                                                                       Unit: Yuan

                                             Closing balance                                              Opening balance

                                                   Provision for bad                                          Provision for bad
                            Book balance                                                Book balance
                                                        debts                                                      debts
                                                                         Carrying                                                     Carrying
                                                             Provision                                                   Provision
                                     Proportio                            amount                 Proportio                            amount
        Categories        Amount                 Amount proportio                     Amount                 Amount proportio
                                         n                                                            n
                                                                ns                                                          ns

Receivables with
provision made on
an individual basis

Including:                1,899,00               100,742,                1,798,265 1,331,711                 71,615,13               1,260,096,7
                                      100.00%                   5.31%                            100.00%                    5.38%
                          8,012.88                  507.35                 ,505.53     ,858.42                    4.67                    23.75

Receivables        with
provision made on
a collective basis

Including:                1,899,00               100,742,                1,798,265 1,331,711                 71,615,13               1,260,096,7
                                      100.00%                   5.31%                            100.00%                    5.38%
                          8,012.88                  507.35                 ,505.53     ,858.42                    4.67                    23.75

                          1,899,00               100,742,                1,798,265 1,331,711                 71,615,13               1,260,096,7
                                      100.00%                   5.31%                            100.00%                    5.38%
Total                     8,012.88                  507.35                 ,505.53     ,858.42                    4.67                    23.75

Bad debts provision made on an individual basis:
                                                                                                                                       Unit: Yuan

                                                                              Closing balance
           Items
                                     Book balance            Provision for bad debts      Provision proportions           Provision reason

Bad debts provision made on a portfolio basis:
                                                                                                                                       Unit: Yuan

                                                                                    Closing balance
              Items
                                              Book balance                    Provision for bad debts              Provision proportions

Portfolio grouped with age                           1,899,008,012.88                       100,742,507.35                                5.31%

Total                                                1,899,008,012.88                       100,742,507.35                    --

Instructions of this portfolio recognition basis
Bad debts provision made on an individual basis:
                                                                                                                                       Unit: Yuan

                                                                                    Closing balance
              Items
                                              Book balance                    Provision for bad debts              Provision proportions


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Instructions of this portfolio recognition basis
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit loss, pleaserefer
to the disclosure of other receivables to disclose the relevant information on the provision for bad debts:
□ Applicable √ Not Applicable
Disclosure as account receivableaging
                                                                                                                              Unit: Yuan

                                Ages                                                           Book balance

Within 1 year(including 1 year)                                                                                       1,877,129,081.29

1-2 years                                                                                                               14,433,538.66

2-3 years                                                                                                                    812,352.60

Over 3 years                                                                                                             6,633,040.33

 3-4 years                                                                                                               1,005,535.43

 4-5 years                                                                                                               1,297,873.33

 Over 5 years                                                                                                            4,329,631.57

Total                                                                                                                 1,899,008,012.88


(2) Provision , recovered or reversed of the bad debt in current period

Provision for bad debts in current period:
                                                                                                                              Unit: Yuan

                                                    Changes in provision for bad debts in current period
    Categories       Opening balance                                                                                  Closing balance
                                             Provision          Reversal           Write-off            Others

Provision made
on an individual
basis

Provision made
on a portfolio          71,615,134.67        42,251,599.69                        10,999,220.11       -2,125,006.90    100,742,507.35
basis

Total                   71,615,134.67        42,251,599.69                        10,999,220.11       -2,125,006.90    100,742,507.35

The major provision for bad debts reversal in current period:
                                                                                                                              Unit: Yuan

                 Company name                                Reversal amount                               Reversal Method


(3) Accounts receivable actually written off in current period

                                                                                                                              Unit: Yuan



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                                  Item                                                         Written-off amount

Payment for goods                                                                                                         10,999,220.11

Including the major written off of the account receivables:
                                                                                                                                Unit: Yuan

                        Account receivable
                            categorized by
   Company name                                 Write-off amount        Write-off reason       Write-off procedure Related party or not
                                nature

Instructions for Written off the account receivables:


(4) Details of the top 5 debtors with largest balances

                                                                                                                                Unit: Yuan

                                  Closing balance of Account                                           Closing balance of provision for
          Debtors                        Receivable                  %of the total closing balance                  bad debts


(5) Transfer of accounts receivable and continued involvement in formed assets and liabilities

Other remarks:


(6) Accounts receivable terminated from recognition due to the transfer of financial assets

Other remarks:
     Closing balance of top 5 debtors totaled RMB703,415,411.51, accounting for 37.04% of the total closing
balance of accounts receivable, and provision for bad debts made thereon totaled RMB35,195,516.06.



6. Receivables financing

                                                                                                                                Unit: Yuan

                    Item                                      Closing balance                             Opening balance

Bank acceptance                                                                 5,278,343.13                                9,291,065.95

Accounts receivable                                                        553,742,484.39                                368,774,999.78

                    Total                                                  559,020,827.52                                378,066,065.73

Increase/decrease of receivables financing and changes in fair value in current period
√ Applicable □ Not Applicable

      (1) Details oncategories
  Items                                      Closing balance                                         Opening balance
                               Carrying amount              Accumulated                Carrying amount             Accumulated
                                                          recognized credit                                      recognized credit
                                                        impairment provision                                   impairment provision



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Bankacceptance                         5,278,343.13                                             9,291,065.95

Accounts receivable                 553,742,484.39              29,144,341.28                368,774,999.78               19,409,210.52

  Total                             559,020,827.52              29,144,341.28                378,066,065.73               19,409,210.52

      (2) Receivables financing credit impairment provision
  Item                     Opening balance     Amount increase in current period        Amount decrease in current      Closing balance
                                                                                                    period
                                                   Accrual          Exchange
                                                                                    Reversal         Write-off Others
                                                                   fluctuations
Provision made ona             19,409,210.52        9,918,842.81     -183,712.05                                            29,144,341.28
collective basis
  Total                        19,409,210.52        9,918,842.81     -183,712.05                                            29,144,341.28
      (3) Endorsed or discounted but undue notes at the balance sheet date
                   Items                                                Closing balance derecognized

              Bank acceptance                                                                         3,530,000.00

                   Subtotal                                                                           3,530,000.00

     The acceptor of the bankers' acceptances is a commercial bank. Since commercial banks have higher credit,
the possibility of non-payment of bankers' acceptances at maturity is low, so the Company derecognized the bank
acceptances that have been endorsed or discounted.However, if any bank acceptance is not recoverable when it is
due, the Company still holds joint liability on such acceptance, according to the China Commercial Instrument
Law.
     (4) Accounts receivable terminated from recognition due to the transfer of financial assets:
   Items                             Amount derecognized              Gains        or      losses            Ways of financial assets
                                                                                                             transfer
                                                                      related

                                                                      toderecognition

Payment for goods                                 1,890,192,415.67                 -4,570,835.23 Receivables financing transfer
                                                            [Note]                                    withoutrecourse

   Subtotal                                       1,890,192,415.67                 -4,570,835.23
     Note: Of which, the USD amount and the RMB amount of the receivables financing transfer without
recourse were USD 292,987,660.28 and RMB 22,190,990.02 respectively. The USD amount of financing transfer
without recourse was translated into RMB equivalent of RMB1,868,001,425.65at the closing exchange rate.


Provision for bad debts of accounts receivable is made in accordance with the general model of expected credit loss, please refer to
the disclosure of other receivables to disclose the relevant information on the provision for bad debts:
□ Applicable √ Not Applicable
Other remarks:




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                                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

7.Prepayments

(1) Ageanalysis

                                                                                                                            Unit: Yuan

                                             Closing balance                                       Opening balance
            Age
                                   Amount                    Proportion                   Amount                   Proportion

Within 1 year                         74,702,657.14                    96.09%              75,669,455.91                     94.58%

1-2 years                              1,748,154.88                       2.25%             2,779,725.40                        3.47%

2-3 years                              1,075,509.98                       1.38%             1,260,526.85                        1.58%

Over 3years                              217,119.90                       0.28%               298,672.68                        0.37%

Total                                 77,743,441.90              --                        80,008,380.84               --

Explanations for the reason prepaid expenses with material and aged over 1 year not be settled timely:


(2) Details of the top 5 debtors with largestbalances

Other remarks:
     (1)Provision for bad debts made in the current period amounted to RMB-1,461,995.24. Provision for bad
debts increased by RMB-128,179.64 due to exchange rate fluctuations, and increased by RMB 1,630,713.98 due
to business combination not under common control.
     (2) Prepayments actually written off in current period amounted to RMB 3,095,393.56.



8. Other receivables

                                                                                                                            Unit: Yuan

                    Item                                  Closing balance                                Opening balance

Other receivables                                                         96,151,003.68                                58,613,172.02

Total                                                                     96,151,003.68                                58,613,172.02


(1) Interest receivables

1) Interest receivables on categories

                                                                                                                            Unit: Yuan

                    Item                                  Closing balance                                Opening balance


2) The major overdue interest receivables

                                                                                                                            Unit: Yuan


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                                                    Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

                                                                                                        Whether there is an
         Debtors                  Closing balance      Overdue date              Overdue reason          impairment and its
                                                                                                          judgment basis

Other remarks:


3) Changes in provision for bad debts

□ Applicable √ Not Applicable


(2) Dividends receivable

1) Dividends receivable on category

                                                                                                                       Unit: Yuan

         Item(or the invested unit)                   Closing balance                             Opening balance


2) Material dividends receivable aged over 1 year

                                                                                                                       Unit: Yuan

                                                                                                        Whether there is an
Item(or the invested unit)        Closing balance          Age              Reason for not recovered     impairment and its
                                                                                                          judgment basis


3) Changes in provision for bad debts

□ Applicable √ Not Applicable
Other remarks:


(3) Other receivables

1) Other receivables categorized by nature

                                                                                                                       Unit: Yuan

           Nature of receivables                      Closing balance                             Opening balance

Export tax rebates                                                    61,953,922.99                             28,999,815.42

Security deposits                                                     24,611,560.03                             29,411,823.59

Liquidation payment of equity receivable                                6,160,202.73

Temporary advance payment receivable                                    6,025,540.52                                2,110,757.40

Employee petty cash                                                     2,666,593.46                                 673,044.45

Others                                                                  2,653,025.72                                1,721,743.22

Total                                                              104,070,845.45                               62,917,184.08


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2) Changes in provision for bad debts

                                                                                                                               Unit: Yuan

                                    Phase I                     Phase II                     Phase III
 Provision for bad debts     12month expected           Lifetime expected credit      Lifetime expected credit         Total
                                  credit losses        losses (credit not impaired)   losses (credit impaired)

Opening balance                         2,946,691.76                     122,869.18                1,234,451.12          4,304,012.06

Opening balance in the
                                        ——                      ——                         ——                    ——
current period

Provision made in the
                                        3,552,814.31                     731,891.96                1,224,528.10          5,509,234.37
current period

Other changes                        -1,893,404.66                                                                      -1,893,404.66

Closing balance                         4,606,101.41                     854,761.14                2,458,979.22          7,919,841.77

The book balance movements of the material provision for bad debts in current period
□ Applicable √ Not Applicable
By age
                                                                                                                               Unit: Yuan

                                  Age                                                            Book balance

Within 1 Year                                                                                                          92,122,027.98

1-2years                                                                                                                 8,547,611.41

2-3ears                                                                                                                   823,447.61

Over 3years                                                                                                              2,577,758.45

 3-4years                                                                                                                 220,257.12

 4-5years                                                                                                                 258,577.55

 Over 5years                                                                                                             2,098,923.78

Total                                                                                                                 104,070,845.45


3) Provision , recovered or reversed of the bad debt in current period

Provision for bad debts in current period:
                                                                                                                               Unit: Yuan

                                                  Changes in provision for bad debts in current period
                        Opening
    Categories                                                                                                     Closing balance
                        balance           Provision          Reversal         Write-off           Other
                                                                                                      s

Within 1 Year        2,946,691.76        3,552,814.31                                              -1,893,404.66         4,606,101.41




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                                                             Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


1-2years               122,869.18           731,891.96                                                                            854,761.14

2-3ears                 72,994.10            91,695.42                                                                            164,689.52

3-4years                78,349.43            -12,272.29                                                                            66,077.14

4-5years             1,045,381.19           -916,092.41                                                                           129,288.78

Over 5years             37,726.40       2,061,197.38                                                                           2,098,923.78

Total                4,304,012.06       5,509,234.37                                             -1,893,404.66                 7,919,841.77

Of which, major recovered or reversed amount in current period:
                                                                                                                                   Unit: Yuan

                  Debtors                                 recovered or reversed amount                      Way to recover


4) Other receivable actually written off in current period

                                                                                                                                   Unit: Yuan

                                Item                                                         Written-off amount

Including major written off of other receivables
                                                                                                                                   Unit: Yuan

                      Nature           of                                                   Written               off
        Debtors       receivables                 Written off amount      Written off reason procedure                  Related        party
                                                                                                                        transactions or not

Instructions for written off other Accounts receivable


5) Details of the top 5 debtors with largest balances

                                                                                                                                   Unit: Yuan

                                                                                              Proportion to the
                             Nature of                                                         total balance of          Provision     for
        Debtors                                    Closing balance             Ages
                                                                                              other receivables
                            receivable                                                                                         bad debts
                                                                                                      (%)
                            s

Export tax rebates    Export tax rebates                  61,953,922.99 Within 1 year                       59.53%             3,097,696.15

Hangzhou Weiming
Investment            Liquidation payment
                                                           6,160,202.73 Within 1 year                       5.92%                 308,010.14
Management Co.,       of equity receivable
Ltd.

Cong ty Co phan
Tuong Vien Grand      Security deposits                    4,829,000.02 Within 1 year                       4.64%                 241,450.00
Park




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                                                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


Hangzhou Qiantang

Intellectual     City
                        Security deposits                 1,007,000.00 1-2 year(s)                              0.97%               100,700.00

Management

Committee

Hangzhou Qiantang

Intellectual     City
                        Security deposits                 1,908,000.00 Over 5years                              1.83%             1,908,000.00

Management

Committee
Social      insurance
premiums paid on Temporary advance
                                                          2,293,733.62 Within 1 year                            2.20%               114,686.68
behalf              of payment receivable
employees

Total                            --                  78,151,859.36               --                            75.09%             5,770,542.97


6) Other Accounts receivable related to government grants

                                                                                                                                      Unit: Yuan

                                                                                                                          Estimated collection
          Debtors              Government subsidy              Closing balance                  Age                  date,      amount,   and
                                                                                                     s               basis


7) Other accounts receivable derecognized due to financial assets transfer

8) Transfer of other accounts receivable and continued involvement in formed assets and liabilities

Other remarks:


9.Inventory

Does the Company need to comply with the disclosure requirements of the real estate industry
No


(1) Details on categories

                                                                                                                                      Unit: Yuan

                                        Closing balance                                                  Opening balance

                                        Inventory decline                                                Inventory decline
         Item
                        Book balance        or contract       Carrying amount         Book balance          or contract       Carrying amount
                                        performance cost                                                 performance cost



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                                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

                                             impairment                                                      impairment
                                                 provision                                                    provision

Raw materials           828,353,943.87                             828,353,943.87        366,335,310.08                        366,335,310.08

Work in process         411,642,818.41                              411,642,818.41       182,992,575.26                        182,992,575.26

Goods on hand         1,619,622,574.68           47,220,974.64 1,572,401,600.04          861,447,538.76      32,384,531.09     829,063,007.67

Materials
onconsignment
                          22,559,098.84                                22,559,098.84        6,553,816.35                          6,553,816.35
forfurther
processing

Low-value
                             820,535.68                                   820,535.68        1,376,128.50                          1,376,128.50
consumables

Total                 2,882,998,971.48           47,220,974.64 2,835,777,996.84 1,418,705,368.95             32,384,531.09 1,386,320,837.86


(2) Inventory decline and contract performance cost impairment provision

                                                                                                                                      Unit: Yuan

                                            Amount increase in current period            Amount decrease in current period
        Item          Opening balance                                                                                          Closing balance
                                                  Accrual                 Others            Write-off           Others

库存商品                 32,384,531.09           23,005,097.06         -1,689,922.04        6,478,731.47                          47,220,974.64

Total                    32,384,531.09           23,005,097.06         -1,689,922.04        6,478,731.47                          47,220,974.64

  Items               Determination      basis     of     net Reasons for reversal of provision forReasons for write-off of provision for
                      realizable value                             inventory write-down                 inventory write-down

Goodson hand          Estimated selling price of relevant                                               Part of inventories with provision for
                      finished goods less cost to be                                                    inventory    write-down       made      in
                      incurred     upon          completion,                                            preceding period were sold or scrapped
                      estimated selling expenses, and                                                   in the current period and write-off this
                      relevant taxes and surcharges                                                     partprovision for inventory




(3) Instructions of inventory closing balance with borrowing expenses capitalization amount

(4) Instructions for the costs to fulfil a contract amortized in current period

10. Contract assets

                                                                                                                                      Unit: Yuan

                                                        Closing balance                                      Opening balance
               Item                                      Provision for        Carrying                        Provision for
                                  Book balance                                               Book balance                     Carrying amount
                                                          impairment           amount                         impairment


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                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

The amount and reason for the material change of the contract assets book balance :
                                                                                                                                   Unit: Yuan

               Item                Increase/Decrease Amount                                    Cause of Change

Provision for bad debts of contract assets is made in accordance with the general model of expected credit loss, please refer to the
disclosure of other receivables to disclose the relevant information on the provision for bad debts:
□ Applicable √ Not Applicable
Contract assets impairment in current period
                                                                                                                                   Unit: Yuan

                             Provision made in the
           Item                                                  Reversal                     Write-off                     Reason
                                  current period

Other remarks:


11. Assets held for sale

                                                                                                                                   Unit: Yuan

                                          Provision for                                             Estimated            Estimated
        Item          Closing balance                       Carrying amount
                                          impairment                                Fair value      disposal costs       disposal date

Other remarks:


12. Non-current assets due within one year

                                                                                                                                   Unit: Yuan

                      Item                                  Closing balance                                  Opening balance

Finance lease receivable                                                          90,708.80                                        90,583.31

Total                                                                             90,708.80                                        90,583.31

Major debt investments/ Other debt investments
                                                                                                                                   Unit: Yuan

                                               Closing balance                                            Opening balance
 Debt investments items Par value        Par value Effective           Maturity    Par value      Par value Effective            Maturity
                                         interest      interest rate                              interest       interest rate

Other remarks:


13. Other current assets

                                                                                                                                   Unit: Yuan

                      Item                                  Closing balance                                  Opening balance

VAT to be credited                                                          160,295,028.26                                   97,366,157.47

Prepaid expenses                                                              5,876,647.96                                   14,182,336.60




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                                                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


Prepaid enterprise income tax                                                     24,135,847.39                                    13,455,322.72

Interest on time deposit                                                           3,683,674.49                                    20,692,542.33

Interest on bond investments                                                                                                           169,237.64

Total                                                                            193,991,198.10                                   145,865,596.76

Other remarks:
Differences between the beginning of the year and the end of the previous year (December 31, 2020) are detailed in Section X(V) 44.
Notes on Changes in Significant Accounting Policies and Accounting Estimates


14. Debt investments

                                                                                                                                           Unit: Yuan

                                          Closing balance                                                  Opening balance
        Item                                Provision for                                                     Provision for
                     Book balance                               Carrying amount        Book balance                             Carrying amount
                                              impairment                                                      impairment

Major debt investments
                                                                                                                                           Unit: Yuan

                                                  Closing balance                                             Opening balance
           Item            Par value      Par value Effective               Maturity    Par value     Par value Effective             Maturity
                                          interest         interest rate                              interest        interest rate

Provision for impairment
                                                                                                                                           Unit: Yuan

                                    Phase I                        Phase II                       Phase III
 Provision for bad debts    12month expected            Lifetime expected credit         Lifetime expected credit                  Total
                                  credit losses        losses (credit not impaired)      losses (credit impaired)

Opening balance in the
                                     ——                            ——                           ——                           ——
current period

The book balance movements of the material provision for bad debts in current period
□ Applicable √ Not Applicable
Other remarks:


15. Other debt investments

                                                                                                                                           Unit: Yuan

                                                                                                                    Accumulated
                                                     Change in                                       Change in           loss
                    Opening           Interest      fair value for     Closing                          the           provision
        Item                                                                            Cost                                           Remark
                     balance         accured         the current       balance                      cumulative recognized in
                                                       period                                        fair value         other
                                                                                                                     comprehensi


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                                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

                                                                                                                    ve income

Major other debt investments
                                                                                                                                        Unit: Yuan

                                                  Closing balance                                            Opening balance
             Item          Par value      Par value Effective              Maturity   Par value      Par value Effective             Maturity
                                          interest        interest rate                              interest       interest rate

Provision for impairment
                                                                                                                                        Unit: Yuan

                                    Phase I                      Phase II                        Phase III
 Provision for bad debts    12month expected            Lifetime expected credit       Lifetime expected credit                 Total
                                  credit losses        losses (credit not impaired)    losses (credit impaired)

Opening balance in the
                                      ——                          ——                           ——                         ——
current period

The book balance movements of the material provision for bad debts in current period
□ Applicable √ Not Applicable
Other remarks:


16. Long-term receivables

(1) Details

                                                                                                                                        Unit: Yuan

                                      Closing balance                                        Opening balance
        Item                           Provision for        Carrying                          Provision for       Carrying          折现率区间
                     Book balance                                            Book balance
                                         bad debts          amount                              bad debts          amount

Finance
lease                    446,386.40                          446,386.40         576,205.61                         576,205.61 0.75%
payment

Including:
Unrealized
                         -14,135.20                          -14,135.20         -17,021.38                         -17,021.38
finance
income

Deposit        for
                      2,274,855.31                         2,274,855.31       2,290,613.47                       2,290,613.47
land lease

Total                 2,721,241.71                         2,721,241.71       2,866,819.08                       2,866,819.08           --

Impairment for bad debt provision
                                                                                                                                        Unit: Yuan

                                    Phase I                      Phase II                        Phase III
 Provision for bad debts                                                                                                        Total
                            12month expected            Lifetime expected credit       Lifetime expected credit


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                                                              Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

                                  credit losses        losses (credit not impaired)               losses (credit impaired)

Opening balance in the
                                      ——                            ——                                 ——                     ——
current period

The book balance movements of the material provision for bad debts in current period
□ Applicable √ Not Applicable


(2) Long-term receivables derecognized due to financial assets transfer

(3) Transfer of Long-term receivables and continued involvement in formed assets and liabilities

Other instructions


17. Long-term equity investments

                                                                                                                                           Unit: Yuan

                                                               Increase/Decrease

                          Investme Investme Investme                                        Cash         Provision
                                                              Adjustme
                                                                             Changes                                                       Closing
                          nts       nts           nt income                                 dividend/ for
                                                              nt in other                                            Others                balance
              Opening                                                        in other                                          Closing
                          increased decreased recognize                                     Profit       impairme                             of
             balance(C                                        comprehe                                                        balance(C
Investees                                                                    equity                                                       provision
               arrying                            d   under                                 declared     nt                    arrying
                                                              nsive                                                                          for
              amount)                                                                                                         amount)
                                                  equity                                    for                                           impairme
                                                              income
                                                                                                                                              nt
                                                  method                                    distributi

                                                                                            on

I.           Joint ventures

II.          Associates

Hangzhou
Zhongce
Haichao
             1,169,932                            154,907,2 -53,965,7 -2,008,10                                               1,268,865
Enterprise
                ,406.31                               77.48        29.03          8.15                                          ,846.61
Managem
ent Co.,
Ltd.

Zhejiang
Hangcha      630,616,7                            97,714,22 -5,065,34 9,325,793                                               732,591,3
Holding           23.91                                0.58           2.30            .43                                         95.62
Co., Ltd.

Hangzhou
             58,037,63              59,110,20 1,072,569
Weiming

                                                                                                                                                   220
                                                     Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Investme           2.85           2.73         .88
nt
Managem
ent Co.,
Ltd.
[Note]

Zhejiang
Guozhi
Robotics 89,544,52                       -15,436,5               1,687,973                         75,805,85
                                                      9,886.20
Technolo           3.80                     26.53                      .07                              6.54
gy Co.,
Ltd.

Ningbo
Donghai       181,319,7                  8,011,052 1,230,525                                       190,561,3
Bank Co.,        46.49                         .94         .43                                         24.86
Ltd.

Changzho
u Stabila
              2,472,458                  -598,783.                                                 1,873,675
Laser
                     .29                       29                                                        .00
Instrumen
t Co., Ltd.

Hangzhou
Weina
              75,954,96                  8,052,874 236,758.5                                       84,244,60
Technolo
                   8.02                        .62          3                                           1.17
gy Co.,
Ltd.

              2,207,878      59,110,20 253,722,6 -57,553,9 9,005,658                               2,353,942
Subtotal
                ,459.67           2.73      85.68        01.17         .35                           ,699.80

              2,207,878      59,110,20 253,722,6 -57,553,9 9,005,658                               2,353,942
Total
                ,459.67           2.73      85.68        01.17         .35                           ,699.80

Other instructions

Note: According to the resolution of the shareholders' meeting of Hangzhou Weiming Investment Management
Co., Ltd. in December 2021, it was decided to dissolve Hangzhou Weiming Investment Management Co., Ltd.
and each shareholder recovered the investment with liquidation assets in proportion to the capital contribution. As
of the end of the period, the Company has recovered RMB 52,950,000 from its investment, leaving RMB
6,160,200 of investment unrecovered.

18. Other equity instrument investments

                                                                                                               Unit: Yuan

                      Item                             Closing balance                     Opening balance




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                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Hangzhou Haibang Xinhu Talent Venture
                                                                           16,550,000.00                             16,550,000.00
Capital Investment Partnership (LP)

Total                                                                      16,550,000.00                             16,550,000.00

Itemized disclosure of non-trading equity instrument investments in current period
                                                                                                                            Unit: Yuan

                    Dividends          Accumulative      Accumulative        Other             Reasonfor         Reason for other
                                                                             comprehensive     Appointedasfinan comprehensive
Items               income             gain              loss
                                                                             incometransferr   cial assetsatfair incometransferre
                                                                             ed to retained    value    through d to retained
                                                                             earnings          othercomprehensi earnings
                                                                                               ve
                                                                                               income

Other remarks:


19. Other non-current financial assets

                                                                                                                            Unit: Yuan

                       Item                               Closing balance                              Opening balance

Other remarks:


20. Investment property

(1) Investment property measured with cost model

√ Applicable □ Not Applicable
                                                                                                                            Unit: Yuan

            Item              Houses and structures       Land use right         Construction in progress           Total

I. Book value

     1.Opening balance

     2.Amount increase
                                      118,165,047.78            16,928,850.24                                      135,093,898.02
in current period

     (1) External
purchases

     (2) Transfer of
inventories, fixed assets
                                      118,165,047.78                                                                118,165,047.78
and construction in
progress

     (3) Increase in
business combination

  (4) Transfer of                                               16,928,850.24                                        16,928,850.24


                                                                                                                                  222
                                             Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

intangible assets

      3.Amount decrease
in current period

      (1) Disposal

      (2) Other transfers
out



      4.Closing balance     118,165,047.78           16,928,850.24                              135,093,898.02

II. Accumulated
depreciation and
cumulative amortization

      1.Opening balance

      2.Amount increase
                              6,059,898.87            1,975,032.46                                8,034,931.33
in current period

      (1) Accrual or
                              3,810,549.80             282,147.50                                 4,092,697.30
amortization

         (2) Transfer of
                              2,249,349.07                                                        2,249,349.07
fixed assets

         (3) Transfer of
                                                      1,692,884.96                                1,692,884.96
intangible assets

      3.Amount decrease
in current period

      (1) Disposal

      (2) Other transfers
out



      4.Closing balance       6,059,898.87            1,975,032.46                                8,034,931.33

III. Provision for
impairment

      1.Opening balance

      2.Amount increase
in current period

      (1) Provision



      3. Amount
decrease in current
period




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                                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

      (1) Disposal

      (2) Other transfers
out



      4.Closing balance

IV. Carrying amount

      1.Closing carrying
                                      112,105,148.91            14,953,817.78                                    127,058,966.69
amount

2.Opening carrying
                                                 0.00                       0.00
amount


(2) Investment property measured with fair value model

□ Applicable √ Not Applicable


(3) Investment property with certificate of titles being unsettled

                                                                                                                         Unit: Yuan

                      Item                                Carrying amount                       Reasons for unsettlement

Other instructions


21. Fixed assets

                                                                                                                         Unit: Yuan

                      Item                                Closing balance                           Opening balance

Fixed assets                                                         1,494,547,487.29                           1,348,034,595.31

Total                                                                1,494,547,487.29                           1,348,034,595.31


(1) Details

                                                                                                                         Unit: Yuan

                        Buildings     and       General equipment   Special equipment   Transport facilities
         Item                                                                                                         Total
                        structures

I. Original book
value

  1.Opening balance          1,191,732,665.13      124,755,449.68      966,232,053.97        31,945,064.83      2,314,665,233.61

  2.Amount
increase in current           186,100,038.06        94,304,982.40      396,904,841.77        13,537,421.68       690,847,283.91
period




                                                                                                                               224
                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


1) Acquisition               15,618,472.47     20,329,105.58    129,904,359.49      4,238,372.14    170,090,309.68

2)     Transferred    in
from construction in        130,044,371.33       683,676.70      76,608,155.69                      207,336,203.72
progress

3)Business
                             59,576,658.94     74,993,606.23    218,441,314.42      9,741,433.94    362,753,013.53
combination

4)Effect of exchange
                             -19,139,464.68    -1,701,406.11     -28,048,987.83      -442,384.40     -49,332,243.02
rate fluctuations

     3.Amount
decrease in current         155,972,713.45     10,229,137.19     37,873,499.07      1,251,463.31    205,326,813.02
period

(1)Disposal/Scrappin
                             39,435,571.89      8,601,230.97     37,873,499.07      1,251,463.31      87,161,765.24
g

(2) Transfer into
investment real             116,537,141.56      1,627,906.22                                         118,165,047.78
estate

     4.Closing balance     1,221,859,989.74   208,831,294.89   1,325,263,396.67    44,231,023.20   2,800,185,704.50

II. Accumulated
depreciation

     1.Opening balance      309,908,861.17     77,433,473.38    551,248,413.51     28,039,890.24    966,630,638.30

     2.Amount
increase in current          71,336,762.48     77,020,740.10    212,298,811.41     10,747,348.34    371,403,662.33
period

       (1) Accrual           52,115,235.85     17,771,132.75     93,711,188.86      3,174,544.02    166,772,101.48

          (2) Increase
in business                  24,934,992.34     60,165,772.35    128,778,214.43      7,940,442.86    221,819,421.98
combination

          (3) Effect of
exchange rate                 -5,713,465.71      -916,165.00     -10,190,591.88      -367,638.54     -17,187,861.13
changes

     3.Amount
decrease in current           4,334,165.43      8,062,648.72     19,640,316.94      1,141,352.76      33,178,483.85
period

(1)Disposal/Scrappin
                              2,226,901.31      7,920,563.77     19,640,316.94      1,141,352.76      30,929,134.78
g

(2) Transfer into
investment real               2,107,264.12       142,084.95                                            2,249,349.07
estate

     4.Closing balance      376,911,458.22    146,391,564.76    743,906,907.98     37,645,885.82   1,304,855,816.78



                                                                                                                225
                                                     Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

III.Provision for
impairment

  1.Opening balance

  2.Amount
increase in current                                                    782,400.43                            782,400.43
period

     (1) Accrual

           (2) Increase
in business                                                            782,400.43                            782,400.43
combination

  3.Amount
decrease in current
period

     (1)
Disposal/Scrapping



  4.Closing balance                                                    782,400.43                            782,400.43

IV. Carrying amount

     1.Closing
                              844,948,531.52      62,439,730.13    580,574,088.26        6,585,137.38   1,494,547,487.29
carrying amount

2.Opening carrying
                              881,823,803.96      47,321,976.30    414,983,640.46        3,905,174.59   1,348,034,595.31
amount


(2) Temporarily idle fixed assets

                                                                                                               Unit: Yuan

                                                Accumulated       Provision for
           Item           Book original value                                       Carrying amount       Remarks
                                                depreciation      impairment


(3) Fixed assets leased in under finance leases

                                                                                                               Unit: Yuan

                                 Item                                               Carrying amount

Buildings and structures                                                                                    6,623,884.70

Subtotal                                                                                                    6,623,884.70


(4) Fixed assets with certificate of titles being unsettled

                                                                                                               Unit: Yuan



                                                                                                                     226
                                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


                     Item                                 Carrying amount                    Reasons for unsettlement

Other instructions


(5) Fixed assets liquidation

                                                                                                                    Unit: Yuan

                     Item                                 Closing balance                       Opening balance

Other instructions


22. Construction in progress

                                                                                                                    Unit: Yuan

                     Item                                 Closing balance                       Opening balance

Construction in progress                                               113,750,851.49                         166,268,204.96

Total                                                                  113,750,851.49                         166,268,204.96


(1) Details

                                                                                                                    Unit: Yuan

                                       Closing balance                                     Opening balance
        Item                            Provision for                                       Provision for
                      Book balance                        Carrying amount   Book balance                     Carrying amount
                                         impairment                                          impairment

Project of
producing
550,000 sets of        27,730,496.71                        27,730,496.71
laser sensor
modules per year

Phase I plant
construction
project of             23,839,910.93                        23,839,910.93
Vietnam Smart
Company

Cambodia Phase
II plant
                       17,095,602.29                        17,095,602.29
construction
project

Second phase of
mesh technology
                       10,154,222.15                        10,154,222.15
reform project
with an annual



                                                                                                                          227
                                                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

output of 1.5
million

Great Star
Industrial
Headquarters               5,824,743.14                            5,824,743.14
Renovation
Project

Thailand tool box
cabinet
production base               62,254.53                              62,254.53          98,361,339.68                            98,361,339.68
construction
project

Vietnam United
Company
                             200,574.51                             200,574.51          11,725,996.39                            11,725,996.39
equipment
installation

Vietnam United
Company Plant
                                                                                         8,565,450.70                             8,565,450.70
Construction
Project

Automated
warehousing                                                                             20,409,451.31                            20,409,451.31
system

Sporadic projects         28,843,047.23                           28,843,047.23         27,205,966.88                            27,205,966.88

Total                    113,750,851.49                          113,750,851.49        166,268,204.96                           166,268,204.96


(2) Changes in significant projects

                                                                                                                                       Unit: Yuan

                                                                                                   Accumu Amount
                                             Transferr                        Accumu Complet                              Annual
                                                                                                   lated      of                       Fund
                                             ed       to Other    Closing lated          ion                              capitaliz
                                                                                                   amount     interest                 source
                        Opening
             Budgets              Increase fixed         decrease balance     input to percenta                           ation rate
   Item                                                                                            of         capitaliz
                        balance
                                             assets                           budget     ge (%)                           (%)
                                                                                                   interest   ation in

                                                                                                   capitaliz currentp

                                                                                                   ation      eriod

Project      100,000,             27,730,4                         27,730,4    27.73% 30.00%                                           Raising



                                                                                                                                                228
                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

of          000.00              96.71                         96.71                                        funds
produci
ng
550,000
sets of
laser
sensor
modules
per year

Phase I
plant
construc
tion
project    102,383,           23,839,9                      23,839,9                                       Raising
                                                                       23.28% 27.00%
of          700.00              10.93                         10.93                                        funds
Vietnam
Smart
Compan
y

Second
phase of
mesh
technolo
gy
reform     15,000,0           10,154,2                      10,154,2
                                                                       67.69% 70.00%                       Other
project      00.00              22.15                         22.15
with an
annual
output
of 1.5
million

Cambod
ia Phase
II plant   20,756,1           17,325,6           -230,058 17,095,6
                                                                       82.36% 85.00%                       Other
construc     00.00              61.01                 .72     02.29
tion
project

Thailan
d tool
box        116,785, 98,361,3 5,731,89 97,148,7 -6,882,1 62,254.5                                           Raising
                                                                       89.13% 95.00%
cabinet     800.00    39.68       5.21   87.68     92.68          3                                        funds
producti
on base


                                                                                                                   229
                                                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

 construc
 tion
 project

 Vietnam
 United
 Compan
 y            17,234,3 11,725,9 5,826,35 17,234,3 -117,447 200,574.
                                                                                101.85% 98.00%                                 Other
 equipme        00.00        96.39      5.62    29.98         .52         51
 nt
 installati
 on

              372,159, 110,087, 90,608,5 114,383, -7,229,6 79,083,0
 Total                                                                            --      --                                       --
               900.00    336.07        41.63   117.66       98.92       61.12


(3) Provision for impairment of construction in progress in current period

                                                                                                                               Unit: Yuan

                      Item                                 Provision for impairment                       Provision Reason

Other instructions


(4) Construction materials

                                                                                                                               Unit: Yuan

                                                    Closing balance                                     Opening balance
               Item                                     Provision for       Carrying                     Provision for       Carrying
                                     Book balance                                        Book balance
                                                        impairment          amount                        impairment         amount

Other remarks:


23. Productive biological assets

(1) Productive biological assets measured with Cost Model

□ Applicable √ Not Applicable


(2) Productive biological assets measured with fair value model

□ Applicable √ Not Applicable


24. Oil & gas assets

□ Applicable √ Not Applicable




                                                                                                                                        230
                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

25. Right-of-use assets

                                                                                                                     Unit: Yuan

                           Buildings           and       General equipment
          Item                                                                    Transport facilities       Total
                           structures

I. Book original value:

  1.Opening balance                     411,341,526.75             3,004,753.42            4,396,270.49      418,742,550.66

  2.Amount increase in
                                         94,003,662.29             1,178,979.58            4,910,544.92      100,093,186.79
current period

(1) Additions to leases                  48,904,592.50               833,976.80            1,351,083.57       51,089,652.87

(2) Increase due to
business combinations
                                         65,403,380.61               572,475.60            4,113,343.20       70,089,199.41
not under common
control

(3) Effect of exchange
                                        -20,304,310.82              -227,472.82             -553,881.85      -21,085,665.49
rate changes



  3.Amount decrease in
                                           515,934.80                643,151.60                 7,067.60       1,166,154.00
current period

(1)Expiration of leases                    515,934.80                643,151.60                 7,067.60       1,166,154.00

  4.Closing balance                     504,829,254.24             3,540,581.40            9,299,747.81      517,669,583.45

II. Accumulated
depreciation

  1.Opening balance                      23,600,653.79               556,572.04            1,531,143.88       25,688,369.71

  2.Amount increase in
                                         78,608,025.59               603,374.32            1,559,453.17       80,770,853.08
current period

(1) Accrual                              75,674,160.54               643,151.60            1,739,801.60       78,057,113.74

(2) Increase due to
business combinations
                                          4,965,171.10                                                         4,965,171.10
not under common
control

(3) Effect of exchange
                                         -2,031,306.05               -39,777.28             -180,348.43       -2,251,431.76
rate changes

  3.Amount decrease in
                                           487,664.40                 17,669.00                 7,067.60         512,401.00
current period

     (1) Disposal

(2) Expiration of leases                   487,664.40                 17,669.00                 7,067.60         512,401.00

  4.Closing balance                     101,721,014.98             1,142,277.36            3,083,529.45      105,946,821.79



                                                                                                                           231
                                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

III. Provision for
impairment

  1.Opening balance

  2.Amount increase in
current period

      (1) Accrual



  3.Amount decrease in
current period

      (1) Disposal



  4.Closing balance

IV. Carrying amount

  1.Closing carrying
                                       403,108,239.26                  2,398,304.04            6,216,218.36        411,722,761.66
amount

2.Opening carrying
                                       387,740,872.96                  2,448,181.38            2,865,126.61        393,054,180.95
amount

Other remarks:


26. Intangible assets

(1) Details

                                                                                                                         Unit: Yuan

              Land use                      Non-          Land         Trademark Proprietary Manageme Sewage
      Item                                  Proprietary                                                 disposal          Total
              right          Patent right
                                            technology ownership       right     technology nt software right

I. Book
original
value


              237,743,154 4,418,189.3                     98,200,604. 275,458,758 18,478,820. 103,694,779 2,648,543.6 740,642,850
1.Opening
                       .32              9                         98            .54       35            .10        9              .37
balance


2.Amount
              11,243,864.                                 31,651,663. 35,424,717.               28,787,745.            107,807,709
increase in                   699,718.65
                       13                                         25            99                      64                        .66
current
period

(1)           11,696,854. 380,730.89                      1,743,656.1 631,126.93                15,207,548.            29,659,916.


                                                                                                                                  232
                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Acquisition            10                           6                                    61                         69

(2) Internal
R&D

(3)
                                          29,277,376. 48,303,128.                17,534,147.                95,433,639.
Businessco                   318,987.76
                                                  83            00                       23                         82
mbination

(4)Effect
of exchange -452,989.97                                 -13,509,536              -3,953,950.                -17,285,846
                                           630,630.26
ratefluctuati                                                   .94                      20                         .85

ons


3.Amount
               16,928,850.                                                                                  17,309,205.
decrease in                                                                      380,355.52
                       24                                                                                           76
current
period

(1) Disposal                                                                     380,355.52                  380,355.52

(2)Transfer
into           16,928,850.                                                                                  16,928,850.
investment             24                                                                                           24
properties


               232,058,168 5,117,908.0    129,852,268 310,883,476 18,478,820. 132,102,169 2,648,543.6 831,141,354
4.Closing
                       .21           4            .23           .53         35           .22           9            .27
balance

II.
Accumulati
ve
amortizatio
n


               34,989,029. 2,140,159.5                  1,502,424.7 9,508,892.9 84,366,395.                 132,926,255
1.Opening                                                                                      419,352.80
                       67            5                           2           6           89                         .59
balance


2.Amount
               5,968,076.9                              3,808,096.6 1,755,487.9 16,703,560.                 28,994,887.
increase in                  494,811.02                                                        264,854.40
                         8                                       1           3           61                         55
current
period

      (1)      5,974,713.1                              3,886,669.2 1,755,487.9 12,364,767.                 24,648,378.
                             401,886.61                                                        264,854.40
Accrual                  9                                       8           3           57                         98

2)Effect of                                                                      -5,362,245.                -5,447,453.
                 -6,636.21                               -78,572.67
exchange                                                                                 05                         93



                                                                                                                    233
                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

rate
fluctuation

3)Business                                                                  9,701,038.0                9,793,962.5
                             92,924.41
combination                                                                          9                          0


3.Amount
               1,692,884.9                                                                             2,073,240.4
decrease in                                                                 380,355.52
                        6                                                                                       8
current
period

(1) Disposal                                                                380,355.52                  380,355.52

(2)Transfer
into           1,692,884.9                                                                             1,692,884.9
investment              6                                                                                       6
properties


               39,264,221. 2,634,970.5             5,310,521.3 11,264,380. 100,689,600                 159,847,902
4.Closing                                                                                 684,207.20
                       69           7                       3          89           .98                        .66
balance

III.Provisio
n for
impairment


1.Opening
balance


2.Amount
increase in
current
period

(1) Accrual




3.Amount
decrease in
current
period

(1) Disposal




4.Closing
balance


                                                                                                               234
                                                             Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

V. Carrying
amount

   1.Closing
               192,793,946 2,482,937.4                    129,852,268 305,572,955 7,214,439.4 31,412,568. 1,964,336.4 671,293,451
carrying
                         .52             7                          .23            .20               6          24           9             .61
amount

2.Opening
               202,754,124 2,278,029.8                       98,200,604. 273,956,333 8,969,927.3 19,328,383. 2,229,190.8 607,716,594
carrying
                         .65             4                           98            .82               9          21           9             .78
amount

The proportion of intangible assets formed through the Company's internal research and development to the balance of intangible
assets at the end of the period


(2) Land use right with certificate of titles being unsettled

                                                                                                                                  Unit: Yuan

                      Item                                      Carrying amount                            Reasons for unsettlement

Other remarks:


27. R&D expenditures

                                                                                                                                  Unit: Yuan

                                     Amount increase in current period               Amount decrease in current period

                                                                                 Recognized
                                                                                                 Transferred
                  Opening           Internal                                                                                     Closing
                                                                                 as intangible
     Item                                                                                        into current
                     balance                          Others                                                                     balance
                                  development
                                                                                 assets
                                                                                                 profit
                                  expenditures
                                                                                                 andloss



     Total

Other instructions


28. Goodwill

(1) Book original value

                                                                                                                                  Unit: Yuan

                                             Amount increase in current period      Amount decrease in current period
Investee or events
                                                                    Effect of
     resulting        Opening balance        Due to business                                                               Closing balance
                                                                 exchange rate            Disposal
    ingoodwill                                 combination
                                                                   fluctuation



                                                                                                                                           235
                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Lista Holding AG 1,045,579,461.13                          -59,762,737.09                                        985,816,724.04

Geelong Orchid
                                         568,037,859.11                                                          568,037,859.11
Holdings Ltd

Arrow Fastener
                      608,368,626.20                       -19,712,996.60                                        588,655,629.60
Co., LLC

Changzhou
Huada Kejie
Opto-electro          118,076,677.01                                                                             118,076,677.01
Instrument Co.,
Ltd.

Prim' Tools
                       64,448,394.77                        -1,473,693.16                                         62,974,701.61
Limited

Suzhou Xindadi
Hardware               42,288,608.30                                                                              42,288,608.30
Product Co., Ltd.

Prexiso AG             33,475,829.64                        -1,913,395.67                                         31,562,433.97

Prime-Line
                       28,057,070.00                          -641,560.00                                         27,415,510.00
Products, LLC

Longyou Hugong
Forging Three           8,072,738.29                                                                               8,072,738.29
Tools Co., Ltd.

Eudura     Holding
                        5,677,361.84                                                                               5,677,361.84
Limited

Haining Sheffield
CuttingTools Co.,         884,415.32                                                                                 884,415.32
Ltd

Zhejiang Guoxin
                          308,667.41                                                                                 308,667.41
Tools Co., Ltd

Longyou Yiyang
Forging Co.,              170,033.92                                                                                 170,033.92
Ltd.

       Total         1,955,407,883.83    568,037,859.11    -83,504,382.52                                       2,439,941,360.42


(2) Provision for impairment

                                                                                                                       Unit: Yuan

Investees or                            Amount increase in current period   Amount decrease in current period
events resulting     Opening balance                                                                            Closing balance
                                          Provision                            Disposal
in goodwill



                                                                                                                             236
                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Changzhou
HuadaKejie
Opto-electro            58,591,956.96                                                                                       58,591,956.96
Instrument Co.,
Ltd.

Lista Holding AG        70,398,887.67                                                                                       70,398,887.67

Prime-Line
                                             3,311,657.93                                                                     3,311,657.93
Products, LLC

Longyou Hugong
Forging        Three
                           889,055.64          444,527.83                                                                    1,333,583.47
Tools Co.,
Ltd.[Note]

Geelong Orchid
Holdings                                       524,650.53                                                                      524,650.53
Ltd[Note]

       Total           129,879,900.27        4,280,836.29                                                                  134,160,736.56

Related information of asset group or asset group portfolios which include goodwill

     [Note] Provision for impairment of goodwill arising from recognition of deferred tax liabilities of relevant
asset group of Longyou Hugong Forging Three Tools Co., Ltd. and Geelong Orchid Holdings Ltd was made in
the same amount due to reversal of deferred tax liabilities in the current period.


Goodwill impairment test process, key parameters (such as the growth rate of the forecast period when the present value of future
cash flows are expected, the growth rate of the stable period, the profit rate, the discount rate, the forecast period, etc.) and the
confirmation method of goodwill impairment loss

       1) Lista Holding AG
       ①Related information of asset group or asset group portfolios which include goodwill
Composition of asset group or asset group portfolios                                Relevant asset group of Lista Holding AG
Carrying amount of asset group or asset group portfolios                                              614,601,902.25

Carrying amount of goodwill allocated to the asset group or asset                                                        915,417,836.37
group portfolios
Carrying amount of asset group or asset group portfolios that                                                             1,530,019,738.62
include goodwill

Whether asset group or asset group portfolios are consistent with                                                                       Yes
those at acquisition date or goodwill impairment testin previous
years
     ②Impairment test process, method and conclusion of goodwill impairment loss
     The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,
which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used in
estimating the annual cash flows is 9.86% (FY 2020: 10.12%), and the cash flows subsequent to the estimated
period are expected to be stable.


                                                                                                                                         237
                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

     Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,
and other relevant expenses.
     Such key data are determined by the Company based on its experience and its prediction towards market
development. The discount rate used by the Company is the pre-tax interest rate that reveals the time value of
currency under the current market situation and special risks of certain asset group.
     Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2022] 55 issued by Wanbang
AssetAppraisal Co., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset group
portfolios that include goodwill totaled RMB1,670,716,544.00, and the carrying amount totaled RMB
1,538,418,970.22. There is no impairment loss on goodwill.
2)Geelong Orchid Holdings Ltd
①Information about the asset group or portfolio of asset groups in which the goodwill is located
是
 Composition of an asset group or an asset group                              Related asset groups
 portfolio                                                               of Geelong Orchid Holdings Ltd


 Composition of asset group or asset group portfolios                                             334,352,855.81


 Carrying amount of asset group or asset group portfolios                                         568,037,859.11


 Carrying amount of goodwill allocated to the asset group or                                      902,390,714.92
 asset group portfolios
 Carrying amount of asset group or asset group portfolios that                                               Yes
 include goodwill


②Impairment test process, method and conclusion of goodwill impairment loss
     The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,
which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used in
estimating the annual cash flows is 12.68%, and the cash flows subsequent to the estimated period are expected to
be stable.
     Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,
and other relevant expenses. Such key data are determined by the Company based on its experience and its
prediction towards market development. The discount rate used by the Company is the pre-tax interest rate that
reveals the time value of currency under the current market situation and special risks of certain asset group.
Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2022] 56 issued by Wanbang Asset Appraisal
Co., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset group portfolios that
include goodwill totaled RMB947,000,000.00, and the carrying amount totaled RMB902,390,714.92, which
suggests that the Company’s goodwill is not impaired.
     3) Arrow Fastener Co., LLC
     ①Related information of asset group or asset group portfolios which include goodwill
Composition of asset group or asset group portfolios           Relevant asset group of Arrow Fastener Co., LLC
Carrying amount of asset group or asset group portfolios                                            323,345,265.14
Carrying amount of goodwill allocated to the asset group or                                         588,655,629.60


                                                                                                                 238
                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

asset group portfolios
Carrying amount of asset group or asset group portfolios                                              912,000,894.74
that include goodwill

Whether asset group or asset group portfolios are consistent                                                   Yes
with those at acquisition date or goodwill impairment testin
previous years
     ②Impairment test process, method and conclusion of goodwill impairment loss
     The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,
which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used in
estimating the annual cash flows is 10.51% (FY 2020: 11.01%), and the cash flows subsequent to the estimated
period are expected to be stable.
     Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,
and other relevant expenses. Such key data are determined by the Company based on its experience and its
prediction towards market development. The discount rate used by the Company is the pre-tax interest rate that
reveals the time value of currency under the current market situation and special risks of certain asset group.
     Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2022] 56 issued by Wanbang Asset
Appraisal Co., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset group
portfolios that include goodwill totaled RMB1,078,379,522.30, and the carrying amount totaled
RMB912,000,894.74, which suggests that the Company’s goodwill is not impaired.
     4) Changzhou Huada Kejie Opto-electro Instrument Co., Ltd.
     ①Related information of asset group or asset group portfolios which include goodwill
Composition of asset group or asset group portfolios                Relevant asset group of Changzhou Huada Kejie
                                                                            Opto-electro Instrument Co.,Ltd.

Carrying amount of asset group or asset group portfolios                                              315,794,700.91
Carrying amount of goodwill allocated to the asset group or asset                                      91,514,953.92
group portfolios[Note]
Carrying amount of asset group or asset group portfolios that                                         407,309,654.83
include goodwill

Whether asset group or asset group portfolios are consistent with                                               Yes
those at acquisition date or goodwill impairment testin previous
years
     [Note]It includes goodwill attributable to non-controlling shareholders
     ②Impairment test process, method and conclusion of goodwill impairment loss
     The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,
which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used in
estimating the annual cash flows is 12.86% (FY 2020: 13.59%), and the cash flows subsequent to the estimated
period are expected to be stable.
     Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,
and other relevant expenses. Such key data are determined by the Company based on its experience and its
prediction towards market development. The discount rate used by the Company is the pre-tax interest rate that
reveals the time value of currency under the current market situation and special risks of certain asset group.
     Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2022] 57 issued by Wanbang Asset

                                                                                                                 239
                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Appraisal Co., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset group
portfolios that include goodwill totaled RMB464,790,000.00, and the carrying amount totaled
RMB393,596,784.32, which suggests that the Company’s goodwill is not impaired.
     5) Prim' Tools Limited
     ①Related information of asset group or asset group portfolios which include goodwill
       Composition of asset group or asset group portfolios         Relevant asset group of Prim' Tools
                                                                                 Limited
       Carrying amount of asset group or asset group portfolios                              114,192,890.65
       Carrying amount of goodwill allocated to the asset group                               62,974,701.61
       or asset group portfolios
       Carrying amount of asset group or asset group portfolios                              177,167,592.26
       that include goodwill

       Whether asset group or asset group portfolios are                                                 Yes
       consistent with those at acquisition date or goodwill
       impairment testin previous years
     ②Impairment test process, method and conclusion of goodwill impairment loss
     The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,
which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used in
estimating the annual cash flows is 13.01% (FY 2020: 13.92%), and the cash flows subsequent to the estimated
period are expected to be stable.
     Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,
and other relevant expenses.
     Such key data are determined by the Company based on its experience and its prediction towards market
development. The discount rate used by the Company is the pre-tax interest rate that reveals the time value of
currency under the current market situation and special risks of certain asset group.
     Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2022] 58issued by Wanbang Asset
Appraisal Co., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset group
portfolios that include goodwill totaled RMB268,310,383.64, and the carrying amount totaled
RMB178,556,018.07, which suggests that the Company’s goodwill is not impaired.
     6) Prime-Line Products, LLC
     ①Related information of asset group or asset group portfolios which include goodwill
       Composition of asset group or asset group portfolios         Relevant asset group of Prime-Line
                                                                              Products, LLC
       Carrying amount of asset group or asset group portfolios                              292,507,034.23
       Carrying amount of goodwill allocated to the asset group                               27,415,510.00
       or asset group portfolios
       Carrying amount of asset group or asset group portfolios                              319,922,544.23
       that include goodwill

       Whether asset group or asset group portfolios are                                               Yes
       consistent with those at acquisition date or goodwill
       impairment testin previous years


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                                                Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

      ②Impairment test process, method and conclusion of goodwill impairment loss
      The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,
which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used in
estimating the annual cash flows is 10.22% (FY 2020: 11.01%), and the cash flows subsequent to the estimated
period are expected to be stable.
      Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,
and other relevant expenses.
      Such key data are determined by the Company based on its experience and its prediction towards market
development. The discount rate used by the Company is the pre-tax interest rate that reveals the time value of
currency under the current market situation and special risks of certain asset group.
      Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2021] 59 issued by Wanbang Asset
Appraisal Co., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset group
portfolios that include goodwill totaled RMB317,471,605.80, and the carrying amount totaled
RMB320,667,978.33. RMB3,196,372.53 is recognized as goodwill impairment loss, RMB 3,196,372.53 of which
is attributable to goodwill impairment loss to be recognized.
      6) Geelong Orchid Holdings Ltd
      ①Related information of asset group or asset group portfolios which include goodwill
       Composition of asset group or asset group portfolios        Relevant asset group of Geelong Orchid
                                                                                Holdings Ltd
       Carrying amount of asset group or asset group portfolios                              334,351,877.01
       Carrying amount of goodwill allocated to the asset group                              627,224,704.58
       or asset group portfolios
       Carrying amount of asset group or asset group portfolios                              961,576,581.59
       that include goodwill

       Whether asset group or asset group portfolios are                                                 Yes
       consistent with those at acquisition date or goodwill
       impairment testin previous years
     ②Impairment test process, method and conclusion of goodwill impairment loss
     The recoverable amount of goodwill is computed based on the present value of estimated future cash flows,
which is based on the 5-year estimated annual cash flows approved by the Company. The discount rate used in
estimating the annual cash flows is 14.23%, and the cash flows subsequent to the estimated period are expected to
be stable.
     Other key data used in the impairment test include: the estimated selling price, sales amount, cost of product,
and other relevant expenses.
     Such key data are determined by the Company based on its experience and its prediction towards market
development. The discount rate used by the Company is the pre-tax interest rate that reveals the time value of
currency under the current market situation and special risks of certain asset group.
     Pursuant to the Evaluation Report numbered Wan Bang Ping Bao [2022] 60 issued by Wanbang Asset
Appraisal Co., Ltd., which is engaged by the Company, the recoverable amount of asset group or asset group
portfolios that include goodwill totaled RMB1,011,293,000.00, and the carrying amount totaled
RMB961,576,581.59, which suggests that the Company’s goodwill is not impaired.
     7) Other companies
     The Company performed impairment test on relevant asset groups of Suzhou Xindadi Hardware Product Co.,

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                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Ltd., Prexiso AG, Longyou Hugong Forging Three Tools Co., Ltd., Eudura Holding Limited, Haining Sheffield
Cutting Tools Co., Ltd., Zhejiang Guoxin Tools Co., Ltd., and Longyou Yiyang Forging Co., Ltd. The
recoverable amount of asset groups or asset group portfolios that include goodwill is computed based on the
present value of estimated future cash flows, which is based on the 5-year estimated annual cash flows approved
by the Company. The cash flows subsequent to the estimated period are expected to be stable. The discount rate
used by the Company is the pre-tax interest rate that reveals the time value of currency under the current market
situation and special risks of certain asset group. Other key data used in the impairment test include: the estimated
selling price, sales amount, cost of product, and other relevant expenses. Such key data are determined by the
Company based on its experience and its prediction towards market development. Such estimations on
recoverable amount suggest that the Company’s goodwill is not impaired.


The impact of goodwill impairment testing
Other instructions


29. Long-term deferred expenses

                                                                                                                            Unit: Yuan

                                                Amount increase in    Amortized amount         Other reduced
        Item               Opening balance                                                                          Closing balance
                                                  current period       in current period          amounts

Leased-in fixed
assets improvement              4,553,806.76           5,403,046.84          3,194,390.21               22,512.81        6,739,950.58
expenses

Renovation expenses             4,021,409.82          16,608,851.93        14,046,449.35                22,460.97        6,561,351.43

Tooling expenses                6,880,541.89           9,033,524.78          4,730,927.87                               11,183,138.80

Other                            951,416.16            7,955,473.00          6,617,773.15               27,594.57        2,261,521.44

Total                          16,407,174.63          39,000,896.55        28,589,540.58                72,568.35       26,745,962.25

Other instructions


30. Deferred tax assets and deferred tax liabilities

(1) Deferred tax assets before offset

                                                                                                                            Unit: Yuan

                                                Closing balance                                     Opening balance
            Item              Deductible temporary                                  Deductible temporary
                                                           Deferred tax assets                                  Deferred tax assets
                                   difference                                              difference

Provision for bad debts               126,923,687.93               24,804,313.63             100,617,084.64             18,425,274.76

Provision            for
                                       63,458,652.61               14,741,539.47              14,637,463.50              3,493,823.04
inventory write-down

Mold expenses                            165,257.83                    24,788.68                 761,879.36                129,530.29



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                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Amortization of
intangible                                                                                        3,218,349.29                823,629.59
assets

Accrued expenses                      169,819,676.11               24,529,483.31               69,962,139.59              18,147,982.88

Provision for impairment
of long-term equity                                                                               2,910,780.00                436,617.00
investments

Deferred income                          1,556,851.32                  233,527.70                 2,377,073.64                356,561.05

Total                                 361,924,125.80               64,333,652.79              194,484,770.02              41,813,418.61


(2) Deferred tax liabilities before offset

                                                                                                                                Unit: Yuan

                                               Closing balance                                        Opening balance

             Item              Taxable      temporary                                   Taxable     temporary
                                    difference            Deferred tax liabilities          difference           Deferred tax liabilities

Assets appraisal
appreciation due to
                                      136,221,613.07               24,608,080.53               96,948,432.28              23,125,437.83
business combination not
under common control

Changes in fair value of
held-for-trading financial               2,822,612.24                  423,391.84              15,998,041.01                2,437,850.39
assets

Interest receivable                      3,683,674.49                  552,551.17              20,692,542.33                3,103,881.35

Depreciation of fixed
                                      215,457,755.28               48,392,628.88              133,958,906.16              33,686,297.20
assets

Provision for inventory
                                       17,481,348.51                 2,452,010.77              17,806,826.55                2,434,886.06
write-down

Amortization of
                                                                                                11,125,082.94               1,519,686.35
intangible assets

Accrued expenses                      143,184,822.64               19,782,033.37               67,723,008.58              15,002,925.88

Other                                    5,266,299.15                  716,690.58              54,633,302.70                5,609,721.54

Total                                 524,118,125.38               96,927,387.14              418,886,142.55              86,920,686.60


(3) Deferred tax assets or liabilities after offset

                                                                                                                                Unit: Yuan

                              Deferred tax assets        Closing   balance    of     Deferred tax assets and Opening      balance    of
             Item
                             and liabilities offset at   deferred tax assets or      liabilities offset at the deferred tax assets or


                                                                                                                                       243
                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

                             the end of the period     liabilities after offset       beginning of the period     liabilities after offset

Deferred tax assets                                                 64,333,652.79                                                41,813,418.61

Deferred tax liabilities                                            96,927,387.14                                                86,920,686.60


(4) Details of unrecognized deferred tax assets

                                                                                                                                     Unit: Yuan

                      Item                                  Closing balance                                  Opening balance

Deductible losses                                                            268,267,176.46                                  168,911,458.43

Total                                                                        268,267,176.46                                  168,911,458.43


(5) Maturity years of deductible losses of unrecognized deferred tax assets

                                                                                                                                     Unit: Yuan

          Maturity FYs                   Closing balance                          Opening balance                        Notes

FY 2021                                                                                       5,367,819.70

FY 2022                                                8,794,514.34                       10,546,843.54

FY 2023                                               13,108,405.23                       14,557,139.03

FY 2024                                               34,197,239.43                       34,787,819.71

FY 2025                                               34,847,410.00                       38,209,711.39

FY 2026                                               92,940,492.11                           2,493,654.05

FY 2027                                                7,204,355.21                           7,204,355.21

FY 2028                                               26,243,099.31                       30,073,191.20

FY 2029                                                7,438,617.58                           7,438,617.58

FY 2030                                               15,081,463.76                       18,232,307.02

FY 2031                                               28,411,579.49

Total                                                268,267,176.46                      168,911,458.43                     --

Other remarks:


31. Other non-current assets

                                                                                                                                     Unit: Yuan

                                                            Closing balance                                  Opening balance
                      Item                                    Provision for        Carrying                     Provision for      Carrying
                                            Book balance                                        Book balance
                                                               impairment           amount                      impairment          amount




                                                                                                                                              244
                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


Prepayment for equipment                       40,432,170.4                   40,432,170.4 23,212,306.2                      23,212,306.2
                                                          6                              6                 8                           8

Prepayment for intangible assets                                                             15,505,452.2                    15,505,452.2
                                               8,370,928.98                   8,370,928.98
                                                                                                           3                           3

                                               54,968,493.6                   54,968,493.6
Prepayment for land purchase
                                                          2                              2

Land lease expenses

                                               103,771,593.                   103,771,593. 38,717,758.5                      38,717,758.5
Total
                                                         06                             06                 1                           1

Other remarks:


32. Short-term borrowings

(1) Details on categories

                                                                                                                                Unit: Yuan

                    Item                                   Closing balance                                 Opening balance

Pledged borrowings                                                                                                      104,398,400.00

Secured borrowings                                                           14,000,000.00                               44,400,000.00

Guaranteed borrowings                                                        73,000,000.00                               10,000,000.00

Credit borrowings                                                      1,718,165,732.74                                 854,263,538.00

Interest payable not yet due and accrued                                      1,735,468.65                                   2,055,972.75

Total                                                                  1,806,901,201.39                               1,015,117,910.75

Instructions for short-term borrowings classification:


(2) Short-term loans that have been overdue but not repaid

The total amount of short-term loans that have been overdue and not repaid at the end of the period is RMB, of which the major
short- term loans overdue unpaid are as follows:
                                                                                                                                Unit: Yuan

                                   Interest rate              Overdue days          Interest rate during             Interest rate
         Debtors
                                                                                         overdue

Other remarks:


33. Held-for-trading financial liabilities

                                                                                                                                Unit: Yuan

                    Item                                   Closing balance                                 Opening balance

Held-for-trading financial liabilities                                         978,031.91



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                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


 Including:

Derivative financial liabilities                                           978,031.91

Including:

Total                                                                      978,031.91

Other remarks:


34. Derivative financial liabilities

                                                                                                                           Unit: Yuan

                    Item                                 Closing balance                              Opening balance

Other remarks:


35. Notes payable

                                                                                                                           Unit: Yuan

                   Items                                 Closing balance                              Opening balance

Bank acceptance                                                         51,728,000.00                                 24,913,000.00

Total                                                                   51,728,000.00                                 24,913,000.00

The total amount of notes payable due and not paid at the end of the period is 0.00 RMB.


36. Accounts payable

(1) Details

                                                                                                                           Unit: Yuan

                    Item                                 Closing balance                              Opening balance

Payable for material purchases                                       1,425,489,422.83                                973,019,822.37

Payable for expenses                                                   164,006,095.43                                134,706,127.18

Payable for construction equipment                                      50,935,411.58                                 60,602,036.33

Total                                                                1,640,430,929.84                              1,168,327,985.88


(2) Major accounts payable aged over 1 year

                                                                                                                           Unit: Yuan

                    Item                                 Closing balance                   Reason for unpaid or not carried forward

Other remarks:




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                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

37. Advance receipt

(1) Details

                                                                                                                            Unit: Yuan

                     Item                                Closing balance                               Opening balance


(2) Major advance receipt aged over 1 year

                                                                                                                            Unit: Yuan

                     Item                                Closing balance                    Reason for unpaid or not carried forward


38. Contract liabilities

                                                                                                                            Unit: Yuan

                     Item                                Closing balance                               Opening balance

Payment for goods                                                          91,235,951.19                               72,490,372.55

Total                                                                      91,235,951.19                               72,490,372.55

The amount and reason for the material change in the book balance during the reporting period
                                                                                                                            Unit: Yuan

              Item               Increase/Decrease Amount                                   Cause of Change


39. Employee compensation payable

(1) Details of employee compensation payable

                                                                                                                            Unit: Yuan

                                                       Amount increase in          Amount decrease in
             Item               Opening balance                                                                 Closing balance
                                                          current period              current period

I. Short-term employee
                                    194,129,903.43          1,741,889,227.83               1,677,055,275.32           258,963,855.94
compensation

II. Post-employme
nt      benefits     -
                                      1,778,094.05             94,637,939.45                 91,306,184.06               5,109,849.44
defined
contribution plan

Total                               195,907,997.48          1,836,527,167.28               1,768,361,459.38           264,073,705.38


(2) Short-term employee compensation

                                                                                                                            Unit: Yuan




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                                                    Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

                                                     Amount increase in         Amount decrease in
             Item             Opening balance                                                               Closing balance
                                                       current period             current period

1. Wage, bonus,
allowance and                      185,932,658.42        1,556,395,569.35               1,492,396,129.36        249,932,098.41
subsidy

2. Employee welfare
                                                            71,690,516.87                 71,690,516.87
fund

3. Social insurance
                                     3,332,197.85           82,232,375.26                 81,789,780.38               3,774,792.73
premium

        Including:
                                     3,263,791.03           75,034,963.67                 74,710,390.45               3,588,364.25
Medicare premium

Occupational injuries
                                        44,550.85            6,786,100.45                  6,650,878.23                179,773.07
premium

           Maternity
                                        23,855.97              411,311.14                    428,511.70                   6,655.41
premium

4. Housing provident
                                      121,244.00            23,667,787.88                 23,661,467.88                127,564.00
fund

5. Trade union fund
andemployee education                4,743,803.16            7,902,978.47                  7,517,380.83               5,129,400.80
fund

Total                              194,129,903.43        1,741,889,227.83               1,677,055,275.32        258,963,855.94


(3) Defined contribution plan

                                                                                                                         Unit: Yuan

                                                     Amount increase in         Amount decrease in
              Item            Opening balance                                                               Closing balance
                                                       current period             current period

1. Basic      endowment
                                     1,717,157.91           92,405,780.30                 89,157,127.17               4,965,811.04
insurance premium

2. Unemployment
                                        60,936.14            2,232,159.15                  2,149,056.89                144,038.40
insurancepremium

Total                                1,778,094.05           94,637,939.45                 91,306,184.06               5,109,849.44

Other remarks:


40. Taxes and rates payable

                                                                                                                         Unit: Yuan

                       Item                           Closing balance                               Opening balance

Value Added Tax                                                         10,372,853.71                                 6,485,281.06




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                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Consumption tax                                                            3,774,804.62                               3,069,169.41

Corporate income tax                                                   141,051,404.72                            158,280,518.60

Personal income Tax                                                        3,916,018.80                               8,497,838.70

Urban maintenance and construction tax                                     1,207,760.74                                842,381.53

Property tax                                                               6,481,130.82                               5,290,714.69

Land use tax                                                               2,193,256.20                               1,819,423.84

Stamp duty                                                                  751,473.65                                1,040,706.33

Education fee surcharge                                                     543,959.59                                 384,823.00

Local education surcharge                                                   464,719.08                                 256,548.64

Disabled person's guarantee fund                                             65,433.09                                  26,892.81

Vehicle and Boat Tax                                                         11,828.17

Environmental protection tax                                                  1,464.83                                   1,434.06

Total                                                                  170,836,108.02                            185,995,732.67

Other remarks:


41. Other payables

                                                                                                                         Unit: Yuan

                    Item                                 Closing balance                            Opening balance

Other payables                                                         676,502,987.21                             26,425,047.57

Total                                                                  676,502,987.21                             26,425,047.57


(1) Interest payable

                                                                                                                         Unit: Yuan

                    Item                                 Closing balance                            Opening balance

Significant interest overdue but not been paid:
                                                                                                                         Unit: Yuan

                  Debtors                                Overdue amount                              Overdue reason

Other remarks:


(2) Dividends payable

                                                                                                                         Unit: Yuan

                    Item                                 Closing balance                            Opening balance

Other instructions,including material dividends payable aged over 1year,should disclosure the reason unpaid:




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                                             Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

(3) Other payable

1) Other payable categorized by nature

                                                                                                                   Unit: Yuan

                     Item                         Closing balance                             Opening balance

Funds borrowing                                                583,570,527.78                                 16,850,810.54

Equity acquisition payables                                     76,724,758.42

Accrued expenses                                                    4,166,538.26                                3,666,627.54

Provisional receivables payable                                     5,712,537.69                                2,895,356.49

Other                                                               3,851,856.11                                2,790,484.05

Security deposits                                                   2,476,768.95                                 221,768.95

Total                                                          676,502,987.21                                 26,425,047.57


2) Major other payables aged over 1 year

                                                                                                                   Unit: Yuan

                     Item                         Closing balance                  Reason for unpaid or not carried forward

Other instructions


42. Liabilities held for sale

                                                                                                                   Unit: Yuan

                     Item                         Closing balance                             Opening balance

Other remarks:


43. Non-current liabilities due within one year

                                                                                                                   Unit: Yuan

                     Item                         Closing balance                             Opening balance

Long-term borrowings due within one year                       231,828,892.32                                196,000,160.14

Lease liabilities due within one year                          125,724,601.18                                 56,156,361.09

Accrued interest payable on undue long-
                                                                     972,470.19                                  167,152.56
term borrowings

Total                                                          358,525,963.69                                252,323,673.79

Other remarks:




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                                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

44. Other current liabilities

                                                                                                                              Unit: Yuan

                      Item                                   Closing balance                               Opening balance

Taxes to be carried forward                                                    2,501,196.81

Total                                                                          2,501,196.81

Changes in short-term bonds payable:
                                                                                                                              Unit: Yuan

  Bonds     Par value    Issuing    Maturity   Amount       Opening   Current Par value Amortizat Repayme                    Closing
                             date              outstandi    balance   period     interest      ion of    nts                 balance
                                                  ng                  issuance                premium
                                                                                              discount



   Total         --           --       --

Other remarks:


45. Long-term borrowings

(1) Details on categories

                                                                                                                              Unit: Yuan

                      Item                                   Closing balance                               Opening balance

Pledged borrowings                                                        147,120,000.00                               220,640,000.00

Guaranteed borrowings                                                     129,954,602.72                               272,850,000.00

Credit borrowings                                                         273,594,153.36                                 15,630,964.56

Pledged and guaranteed borrowings                                         464,565,380.50

Interest payable on long-term loans not yet
                                                                                 211,595.49                                  434,918.35
due and accrued

Total                                                                   1,015,445,732.07                               509,555,882.91

Details on long-term borrowings:
Other instructions,contain interest period:


46. Bonds payable

(1) Details for bonds payable

                                                                                                                              Unit: Yuan

                      Item                                   Closing balance                               Opening balance

Convertible corporate bonds                                                                                            799,729,005.89


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                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Total                                                                                                                     799,729,005.89


(2) Current period movements(Excluding other financial instruments such as preferred stock and
perpetual debt classified as financial liabilities)

                                                                                                                                 Unit: Yuan

                                                                                              Amortiz

                                           Amount                  Current       Par          ation of                Interest   Issuing
             Par      Issuing   Maturity               Opening                                            Repayme
    Bonds                                  outstandi               period       value         premium                 adjustm    expense
             value     date                             balance                                           nts
                                              ng                   issuance    interest       discount                  ent         s

Great Star                      June 24,
convertibl 972,600,0 June 24th, 2020 to    972,600,0 799,729,0                324,200.0 3,861,935 2,581,437 801,333,7
                                                                                                                                        0.00
e              00.00 2020       June 23,      00.00        05.89                          0         .06         .71      03.24
bonds                           2026

                                           972,600,0 799,729,0                324,200.0 3,861,935 2,581,437 801,333,7
    Total      --        --         --                                                                                                  0.00
                                              00.00        05.89                          0         .06         .71      03.24


(3) Converting conditions and time of convertible bonds

      Pursuant to the approval numbered Zheng Jian Xu Ke [2019] 2656 issued by China Securities Regulatory
Commission, the Company publicly issued 9.726 million convertible corporate bonds, each with par value of
RMB100, with total amount of RMB972.60 million and term of 6 years. RMB 972,600,000 convertible corporate
bonds of the Company have been listed for trading at Shenzhen Stock Exchange since July 16, 2020. The
abbreviation of the bonds is “Great Star convertible bonds” with code number of “128115”.
      The conversion period of the convertible corporate bonds runs from the first trading day after six months
following the completion of the issuance to the maturity date of the bonds. The initial conversion price of the
convertible bonds was RMB 12.28/share, which was not lower than the average transaction price of the
Company’s A shares on the preceding 20 trading days prior to the announcement of the prospectus (in the case of
stock price adjustment caused by ex-right or ex-dividend, the closing price on the trading days before the
adjustment shall be subject to the corresponding ex-right or ex-dividend adjustment) and the average transaction
price of the Company’s A shares on the previous trading day.
      According to the bond prospectus, the "Great Star Convertible Bonds" issued by the Company can be
converted into shares of the Company from January 4, 2021. As of February 23, 2021, a total of RMB
970,026,800.00 of the "Great Star Convertible Bonds" have been converted into shares of the Company, with a
total of 78,990,443 shares, including 10,799,651 treasury shares for conversion and 68,190,792 new shares in
circulation. The remaining untransferred "Great Star Convertible Bonds" were redeemed by the Company for
RMB2,581,437.71. As a result of the above conversion, bonds payable decreased by RMB801,333,703.24, other
equity instruments decreased by RMB190,509,257.28, share capital increased by RMB68,190,792.00, treasury
shares decreased by RMB105,492,690.23, and capital surplus - share premium increased by RMB818,159,478.29.
The above changes in share capital were audited by Pan-China Certified Public Accountants (Special Ordinary
Partnership), which issued the "Capital Verification Report" No. Tian Jian Yan[2021] No. 245.

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                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report




(4) Instructions of other financial instruments classified as financial liabilities

Information of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
Movements of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
                                                                                                                                  Unit: Yuan

                                                Amount increase in current Amount decrease in current
  Financial           Opening balance                                                                              Closing balance
                                                           period                          period
 instruments
                                  Carrying                        Carrying                       Carrying                       Carrying
    issued         Quantity                       Quantity                        Quantity                      Quantity
                                   amount                           amount                          amount                       amount

Instructions for the basis of other financial instruments transferred to financial liabilities
Other instructions


47. Lease obligations

                                                                                                                                  Unit: Yuan

                     Item                                     Closing balance                                Opening balance

Unpaid lease payments                                                        296,462,213.75                                352,192,668.14

Less: Unrecognized financing expenses                                          -7,265,702.73                               -14,593,249.87

                     Total                                                   289,196,511.02                                337,599,418.27

Other instructions
Differences between the beginning of the period and the end of the previous year (December 31, 2020) are detailed in Section X (V)
44. Notes on Changes in Significant Accounting Policies and Accounting Estimates




48. Long-term payables

                                                                                                                                  Unit: Yuan

                     Item                                     Closing balance                                Opening balance

Long-term payables                                                                                                             1,499,174.07

Total                                                                                                                          1,499,174.07


(1) Long-term payables categorized by nature

                                                                                                                                  Unit: Yuan

                     Item                                     Closing balance                                Opening balance

Finance lease payable                                                                                                          1,499,174.07

Other remarks:



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                                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

(2) Special payables

                                                                                                                           Unit: Yuan

                                              Amount increase in Amount decrease in
          Item              Opening balance                                                 Closing balance        Reason
                                                 current period       current period

Other remarks:


49. Long-term employee compensation payable

(1) Details for Long-term employee compensation payable

                                                                                                                           Unit: Yuan

                     Item                                  Closing balance                           Opening balance

Post-employment benefits - net defined
                                                                                                                   71,206,293.82
benefit liability

Termination benefits                                                     20,854,276.60                                 6,718,437.33

Total                                                                    20,854,276.60                             77,924,731.15


(2) Movements in defined benefit plan

Present value of obligations in defined benefit plan:
                                                                                                                           Unit: Yuan

                     Item                               Current period amount                     Previous period amount

I. Opening balance                                                      562,947,937.93                            505,405,191.66

II. Components of defined benefit costs
                                                                             8,714,350.80                          10,179,212.90
recognized in profit or loss

1.Current service cost                                                       8,141,875.20                              8,867,192.70

4.Net interest=                                                               572,475.60                               1,312,020.20

III. Components of defined benefit costs
                                                                        -22,863,686.00                             39,367,976.90
recognized in other comprehensive income

1.Actuarial gains(loss is presented with
                                                                        -22,863,686.00                             39,367,976.90
a”-” sign)

IV. Other changes                                                       -46,885,879.53                                 7,995,556.47

2.Benefitpaid                                                           -24,100,516.00                             -16,835,135.60

3.Paid byemployees                                                           9,682,612.00                          10,849,964.80

4. Translationreserves                                                  -32,467,975.53                             13,980,727.27

V. Closing balance                                                      501,912,723.20                            562,947,937.93

Plan assets:
                                                                                                                           Unit: Yuan

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                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

                     Item                              Current period amount                       Previous period amount

I. Opening balance                                                       491,741,644.11                            471,266,138.12

II. Components of defined benefit costs
                                                                            -120,149.20                                619,155.60
recognized in profit or loss

1. Net interest expense orincome                                             466,461.60                              1,208,827.60

2. Managementcosts                                                          -586,610.80                               -589,672.00

III. Components of defined benefit costs
                                                                          56,039,000.40                                884,508.00
recognized in other comprehensive income

3. Actuarial gains(loss is presented with
                                                                          56,039,000.40                                884,508.00
a”-” sign)

IV. Other movements                                                      -33,146,226.51                             18,971,842.39

1.Paid byemployees                                                         9,682,612.00                             10,849,964.80

2.Paid by theCompany                                                       9,682,612.00                             10,849,964.80

3.Benefitpaid                                                            -23,754,203.60                             -15,700,017.00

4.Translationreserves                                                    -28,757,246.91                             12,971,929.79

V. Closing balance                                                       514,514,268.80                            491,741,644.11

Net defined benefit liability(net assets)
                                                                                                                            Unit: Yuan

                     Item                              Current period amount                       Previous period amount

I. Opening balance                                                        71,206,293.82                             34,139,053.54

II. Components of defined benefit
                                                                           8,834,500.00                              9,560,057.30
costs recognized in profit or loss

III. Components of defined benefit costs
                                                                         -78,902,686.40                             38,483,468.90
recognized in other comprehensive income

IV. Other changes                                                        -13,739,653.02                             -10,976,285.92

V. Closing balance                                                       -12,601,545.60                             71,206,293.82

Contents and risks of defined benefit plan, and effect on amount, timing and uncertainty of future cash flows:

      The Company’s defined benefit plan consists of two parts, namely the Swiss pension plan and the German
pension plan.
      1)The Swiss pension plan is operated by Pensionskasse, a foundation stipulated by the Swiss law, as well as
other companies of economy and finance relevance. The plan is applicable to retired employees, disabled
employees and their family members. Pursuant to the Swiss pension law, the plan is managed by a pension trust
committee, which is responsible for investment strategies related to fund assets. The goal of the investment
strategies is to possess 28.00% equity, 39.00% debt, 27.00% assets and 6.00% other financial instruments and
cash portfolio. The plan generally exposes the Company to actuarial risks such as inflation, interest rate risk,
lifespan risk and wages risk.
      2)The German pension plan lasted until 1991 and was terminated in 1991 in accordance with the German law.


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                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

The plan no longer applies to new employees and other accruals after 1991, but the remaining obligations remain
on the balance sheet.
     The above-mentioned defined benefit plan has no significant impact on amount, timing and uncertainty of
future cash flows.
     Significant actuarial assumption, reasonableness of the assumption and sensitive analysis on defined benefit
plan:
     Defined benefit plan liability and cost are determined through actuarial valuation. The significant actuarial
assumptions for determining the defined benefit obligation are the discount rate and mortality rate.
     The sensitive analysis of the Swiss pension plan is determined based on the potential reasonable changes in
actuarial assumptions at the end of the reporting period.
     1)If all other actuarial assumptions remain unchanged and the discount rate is higher (or lowered) by 0.5%,
the defined benefit obligation of the Swiss pension plan will decrease by CHF5,068,000.00 (or increase by CHF
5,766,000.00).
     2)If all other actuarial assumptions remain unchanged and the life expectancy of men and women increases
(or decreases) by one year, the defined benefit obligation of the Swiss pension plan will increase by CHF
597,000.00 (or decrease by CHF593,000.00).
Description of setting the major actuarial assumptions and sensitivity analysis results of the benefit plan:
Other remarks:


50. Projected liabilities

                                                                                                                                 Unit: Yuan

                Item                       Closing balance                   Opening balance                       Reason

Product Quality Assurance                             2,309,585.60                        2,329,934.90

Soil restoration expenses                             2,615,283.33                        1,220,478.39

Total                                                 4,924,868.93                        3,550,413.29               --

Other instructions, including relevant important assumptions and description of important estimated liabilities:


51. Deferred income

                                                                                                                                 Unit: Yuan

                                               Amount increase in Amount decrease in
         Item            Opening balance                                                       Closing balance            Reason
                                                 current period          current period

Government subsidy             3,992,738.59                                   1,190,493.96          2,802,244.63 Special subsidy

Total                          3,992,738.59                                   1,190,493.96          2,802,244.63            --

Projects involving government grants:
                                                                                                                                 Unit: Yuan

                                New       grant Amount       Amount
                                amount      in included    in included    in Write down
                                current        non-          other income cost amount
                                period         operating     in          the in   current
  Liability        Opening                                                                     Other                       Asset related


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                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

    items      balance        income        in current        period   adjustments Closing balance   / income
                              the current     period                                                  related
                                 period

Special
subsidy for
construction
of foreign     1,079,222.14                     442,666.68                             636,555.46 Asset related
trade public
service
platform

Special
subsidy for
"machine
replacement"   1,355,664.75                     270,271.68                            1,085,393.07 Asset related
technical
transformati
on project

Special
subsidy for
equipment
manufacturi
                919,999.76                      230,000.04                             689,999.72 Asset related
ng projects
in strategic
emergingind
ustries

Financial
subsidy for
capacity
expansion
                260,000.20                        99,999.96                            160,000.24 Asset related
project of
new hand
tool series
products

Special
subsidy for
innovation
capability
building        101,851.82                        55,555.56                              46,296.26 Asset related
project of
provincial
enterprise
technology



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                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

center

Special
funds for
pilot and
base
                    275,999.92                                      92,000.04                               183,999.88 Asset related
construction
of strategic
emerging
industries

Subtotal          3,992,738.59                                 1,190,493.96                               2,802,244.63

Other remarks:
Details of government grants included in current period's profit and loss are described in Section X(VII) 84. Description of
government grants




52. Other non-current liabilities

                                                                                                                               Unit: Yuan

                    Item                                     Closing balance                           Opening balance

Other remarks:


53. Equity

                                                                                                                               Unit: Yuan

                                                         Increase and decrease of this change (+, -)
                    Opening         Bonus         New Bonus share       Conversion of                                    Closing
                     balance        share issue                        provident fund                                    balance
                                                                                            Other       Subtotal
                                                                         into shares

Total number     1,075,247,700.                                                                                       1,143,438,492.
                                                                                        68,190,792.00 68,190,792.00
of shares                      00                                                                                                    00

Other remarks:

The increase in share capital during the period was due to the conversion of convertible bonds, as described in
Section X (VII) 46, Note on bonds payable.




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                                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

54. Other equity instruments

(1) Basic information of preferred shares, perpetual bonds and                                 other financial instruments issued
outstanding at the end of the period

(2) Statement of changes in preferred shares, perpetual bonds and other financial instruments issued
outstanding at the end of the period

                                                                                                                                    Unit: Yuan

                                                  Amount increase in current Amount decrease in current
Financial              Opening balance                                                                                 Closing balance
                                                           period                         period
instruments

issuedoutsta                      Carrying                        Carrying                         Carrying                       Carrying
                    Quantity                       Quantity                        Quantity                         Quantity
                                   amount                           amount                          amount                         amount
nding

GreatStar
                                 190,509,257.                                                    190,509,257.
convertibl           9,726,000                                                      9,726,000
                                             28                                                                28
e bond

                                 190,509,257.                                                    190,509,257.
Total                9,726,000                                                      9,726,000
                                             28                                                                28

Changes of other equity instruments in the current period, reasons for changes, and basis for relevant accounting treatment:
Other remarks:

    The increasing of other equity instruments in current period was due to the equity parts for convertible
corporate bonds issued by the Company, details refer to the description of Section XX (VII) 46, Bonds payable.

55. Capital reserve

                                                                                                                                    Unit: Yuan

                                                              Amount increase in        Amount decrease in
             Item                Opening balance                                                                        Closing balance
                                                                current period                current period

Share       premium(equity
                                     1,899,200,931.58               822,674,409.54                  1,772,764.11           2,720,102,577.01
premium)

Other capital reserve                 195,843,609.57                 11,013,766.50                  2,008,108.15               204,849,267.92

Total                                2,095,044,541.15               833,688,176.04                  3,780,872.26           2,924,951,844.93

Other instructions, including the increase and decrease of the current period and the reasons for the change:

     1) Remarks on changes in capital reserve – share premium
     ① Increase in capital surplus-equity premium of RMB 818,159,478.29 due to conversion of corporate bonds
during the period, as described in Section X (VII) 46, Note on bonds payable.
     ② The Company acquired 6.73751% equity interest in Longyou Yiyang Forging Co., Ltd. held by minority
shareholders of Longyou Yiyang Forging Co., Ltd. at a price of RMB1,239,140.91. In preparing the consolidated
financial statements, the difference of RMB 2,097,357.38 between the newly acquired long-term equity

                                                                                                                                             259
                                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

investment due to the purchase of minority interest and the share of net assets of Longyou Yiyang Forging Co.,
Ltd. calculated on a continuing basis from the date of consolidation in accordance with the new shareholding was
recorded as capital surplus.
     ③ The Company acquired 15.00% of the equity interest in Longyou Hugong Forging Three Tools Co., Ltd.
held by minority shareholders of Longyou Hugong Forging Three Tools Co.Ltd. at a price of RMB
18,760,859.09. In preparing the consolidated financial statements, the difference of RMB 2,417,573.87 between
the newly acquired long-term equity investment due to the purchase of minority interest and the share of net assets
of Longyou Hugong Forging Three Tools Co., Ltd. calculated on a continuous basis from the date of
consolidation in accordance with the new shareholding was recorded as capital surplus.
     ④ The Company acquired 2.13% equity interest in Hangzhou Super Star Steel Shield Tools Co., Ltd. held by
minority shareholders of Hangzhou Super Star Steel Shield Tools Co., Ltd. at a price of RMB 106,500.00. In
preparing the consolidated financial statements, the difference of RMB32,913.57 between the newly acquired
long-term equity investment due to the purchase of minority interest and the share of net assets of Hangzhou
Super Star Steel Shield Tools Co., Ltd. calculated on a continuing basis from the date of consolidation in
accordance with the new shareholding was reduced to capital surplus.
     ⑤ The Company acquired 49.00% of the equity interest in PREXISO Laser Measurement Tool (Hangzhou)
Co., Ltd held by the minority shareholder of PREXISO Laser Measurement Tool (Hangzhou) Co., Ltd for RMB
95,000.00. In preparing the consolidated financial statements, the difference of RMB 1,739,850.54 between the
newly acquired long-term equity investment due to the purchase of minority interest and the share of net assets of
PREXISO Laser Measurement Tool (Hangzhou) Co., Ltd calculated on an ongoing basis from the date of
consolidation in proportion to the newly acquired shareholding was reduced to capital surplus.
     2) Capital reserve-Description of changes in other capital reserves
     The Company's share of changes in owner's equity for the period, other than net profit or loss, other
comprehensive income and profit distribution, calculated in proportion to its shareholding in Zhejiang Guozhi
Robotics Technology Company Limited, Zhejiang Hangcha Holding Company Limited and Hangzhou Zhongce
Haichao Enterprise Management Company Limited, adjusted long-term equity investment and capital surplus by
RMB1,687,973.07, RMB9,325,793.43, and RMB -2,008,108.15, respectively.



56. Treasury stock

                                                                                                                          Unit: Yuan

                                                         Amount increase in         Amount decrease in
           Item                Opening balance                                                                  Closing balance
                                                            current period             current period

Treasury stock                       105,492,690.23             186,441,914.48             105,492,690.23           186,441,914.48

Total                                105,492,690.23             186,441,914.48             105,492,690.23           186,441,914.48

Other instructions, including the increase and decrease of the current period and the reasons for the change:

     1) Amount increase in current period
     At the eleventh meeting of the fifth session of the Board of Directors of the Company, it was agreed that the
Company shall use its own funds not less than (including) RMB180 million and not more than (including)
RMB360 million to repurchase some shares of the Company by way of centralized competitive bidding. The share
repurchase price shall not exceed RMB36 per share and the share repurchase period shall not exceed 12 months
from the date of consideration and approval by the board of directors. As of the end of the period, the total number


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                                                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

of shares repurchased from the special account of the Company was 6,015,310 shares and the total price paid was
RMB186,441,914.48.
     2) Amount decrease in current period
     The decrease of treasury stock by RMB 105,492,690.23 due to the conversion of convertible bonds during
the period. For details, please refer to Section X (VII) 46, Note on bonds payable.

57. Other comprehensive income

                                                                                                                                            Unit: Yuan

                                                                                    Current period amount

                                                                        Less: OCI    Less: OCI       Less:        Attributabl Attributabl
                                                       Current          previously previously       Income        e to parent e to non-
                                                       period          recognizedbu recognized        tax         company controlling
                                       Opening         cumulativ       ttransferred but                                        shareholde Closing
                Item
                                        balance        e   before to profit or transferred                                         rs     balance

                                                       income tax          loss      to retained
                                                                       incurrentperi earnings in
                                                                            od       currentperi
                                                                                     od

I. Items not to be reclassified       -103,399,79 78,902,68                                        7,060,532. 71,842,15                      -31,557,
subsequently to profit or loss               1.08               6.40                                         40         4.00                  637.08

Including: Changes
                                      -103,399,79 78,902,68                                        7,060,532. 71,842,15                      -31,557,
inremeasurement of the defined
                                             1.08               6.40                                         40         4.00                  637.08
benefit plan

II. Items to be reclassified          -2,437,555.7 -195,778,9                                                     -195,778,9 -350,414.7 -198,216
subsequently to profit or loss                    9         96.23                                                      96.23           7     ,552.02

Including: Other comprehensive
                                      -27,385,736. -57,553,90                                                     -57,553,90                 -84,939,
income to be transferred to profit
                                                  04            1.17                                                    1.17                  637.21
or loss under equity method

        Translation balance in
                                      24,948,180. -138,225,0                                                      -138,225,0 -350,414.7 -113,276
foreign currency financial
                                                  25        95.06                                                      95.06           7     ,914.81
statements

                                      -105,837,34 -116,876,3                                       7,060,532. -123,936,8 -350,414.7 -229,774
Total other comprehensive income
                                             6.87           09.83                                            40        42.23           7     ,189.10

Other instructions, including the adjustment of the effective part of the profit and loss of cash flow hedging converted into the initial
recognition amount of the hedged item:


58. Special reserve

                                                                                                                                            Unit: Yuan

             Item                 Opening balance               Amount increase in          Amount decrease in                 Closing balance


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                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

                                                             current period               current period

Other instructions, including the increase and decrease of the current period and the reasons for the change:


59. Surplus reserve

                                                                                                                               Unit: Yuan

                                                           Amount increase in          Amount decrease in
           Item                 Opening balance                                                                     Closing balance
                                                             current period               current period

Legal surplus reserves                521,602,764.46                 76,940,412.17                                        598,543,176.63

Total                                 521,602,764.46                 76,940,412.17                                        598,543,176.63

Description of surplus reserve, including changes in the current period and reasons for changes:
     Pursuant to the Company’s Articles of Association, statutory surplus reserve was appropriated at 10% of the
net profit generated by parent company in the current period.

60. Undistributed profit

                                                                                                                               Unit: Yuan

                         Item                                            本期                                      上期

Closing balance of the preceding period                                         5,155,116,352.49                       3,849,578,318.39

Undistributed profit at the beginning of the period
                                                                                5,155,116,352.49                       3,849,578,318.39
after adjustment

Add: Net profit attributable to owners of the
                                                                              1,270,003,396.40                         1,350,132,516.91
parent company

Less: Appropriation of statutory surplus reserve                                  76,940,412.17                            91,745,899.76

Add: Other comprehensive income carried
                                                                                                                           47,151,416.95
forward to retained earnings

Closing balance                                                               6,348,179,336.72                         5,155,116,352.49

Details of undistributed profit at the beginning of adjustment period:
1). Due to the retroactive adjustment of the accounting standards for business enterprises and its related new regulations, the
undistributed profits at the beginning of the period are affected.
2). Due to the change of accounting policy, the undistributed profit at the beginning of the period is affected.
3). Due to the correction of major accounting errors, the undistributed profits at the beginning of the period are affected. 4). The
change of consolidation scope caused by the same control affects the opening undistributed profit.
5). The other adjustments affects the opening undistributed profit.


61. Operating revenue and operating costs

                                                                                                                               Unit: Yuan

           Item                            Current period amount                                   Previous period amount



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                                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report


                                    Revenue                      Cost                     Revenue                       Cost

Main business                     10,849,925,564.41           8,147,389,910.45           8,502,327,129.89             5,906,839,891.29

Other business                         69,757,779.96              28,733,758.05              42,113,024.41              19,926,004.47

Total                             10,919,683,344.37           8,176,123,668.50           8,544,440,154.30             5,926,765,895.76

The lower of the audited net profit before and after deduction of non-recurring gains and losses is negative or not
□ Yes    √ No
Related information of revenue:
                                                                                                                               Unit: Yuan

  Contract classification          Division 1                 Division 2                                               Total

Type of merchandise

  Including:



By operating area

  Including:



Market or customer type

  Including:



Contract type

  Including:



By the time of
commodity transfer

  Including:



By contract term

  Including:



By sales channel

  Including:



Total

Information relating to performance obligations:

Performance obligations of sales of hand tools and power tools, laser measurement, storage, PPE and other
products are generally fulfilled within one year. The Company collects advances or provides term of credit based

                                                                                                                                     263
                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

on different customers. The Company acts as the main responsible person for direct sales. The Company obtains
the unconditional right to collect payments when the following conditions are all met: 1) for domestic sales: a. the
Company delivers the product to the customer in accordance with the contract; and b. the customer has accepted
the product; 2) for overseas sales: a. the Company has declared the product in accordance with the contract; b. the
Company has obtained the bill of lading or, the Company has shipped the product to the designated destination
and the goods are delivered to the customer; and c. the control of the goods is transferred to the customer.


Information relating to the transaction price allocated to the remaining performance obligation:
At the end of this report period, the amount of income corresponding to the performance obligations that have been signed but not yet
fulfilled or not fulfilled is RMB 91,235,951.19 , of which RMB91,235,951.19 is expected to be recognized in 2022, RMBXXX is
expected to be recognized in XX year, and RMBXXX is expected to be recognized in XX year.
Other instructions


61. Taxes and surcharges

                                                                                                                            Unit: Yuan

                     Item                              Current period amount                       Previous period amount

Urban maintenance and construction tax                                     7,256,954.85                               4,786,192.59

Education surcharge                                                        3,771,830.67                               2,328,932.48

Housing property tax                                                      12,351,881.98                               9,890,480.39

Land use tax                                                               2,227,537.31                               2,147,547.54

Vehicle and vessel use tax                                                     86,214.28                                 76,767.27

stamp duty                                                                 7,829,087.46                               6,480,368.19

Environmental protection tax                                               2,585,929.23                               1,552,621.56

Local education surcharge                                                       9,241.06                                    5,877.90

Total                                                                     36,118,676.84                              27,268,787.92

Other remarks:


63. Selling expenses

                                                                                                                            Unit: Yuan

                     Item                              Current period amount                       Previous period amount

Salary expenses                                                          329,786,407.95                             231,285,600.62

Advertising and promotion expenses                                       173,588,091.95                             158,061,292.72

Office expenses                                                           22,868,008.43                              15,027,354.08

Depreciation and amortization                                             21,114,863.37                              18,604,834.71

Consulting expenses                                                       10,976,839.16                              12,398,145.37



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                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Commercial inspection expenses                      7,773,433.50                        8,444,517.79

Rent                                                6,737,089.27                         2,114,137.78

Insurance                                           5,538,490.21                        4,367,937.54

Travel expenses                                     5,472,391.88                        5,765,621.94

Other                                               9,147,487.96                        2,204,966.10

Total                                             593,003,103.68                      458,274,408.65

Other remarks:


64. Administrative expenses

                                                                                               Unit: Yuan

                  Item            Current period amount               Previous period amount

Salary expenses                                   414,247,951.75                      317,985,417.88

Consulting expenses                                88,634,883.05                       51,273,959.59

Depreciation and amortization                      67,871,799.44                       47,961,742.13

Office expenses                                    73,875,810.36                       52,019,821.23

Business travelling expenses                       14,051,596.45                         9,814,116.43

Business entertainment expenses                     3,968,221.22                        2,865,337.49

Taxes and rates                                     2,206,645.73                        2,714,181.92

Afforestation expenses                              3,459,791.23                        2,989,803.38

Others                                             17,804,031.83                       13,375,557.95

Total                                             686,120,731.06                      500,999,938.00

Other remarks:


65. R&D expenses

                                                                                               Unit: Yuan

                  Item            Current period amount               Previous period amount

Salary expenses                                   175,844,458.23                      129,218,589.63

Direct input                                       97,611,535.85                       87,654,200.47

Depreciation and amortization                      12,408,282.37                       13,190,352.70

Others                                             23,899,089.70                       15,308,926.56

Total                                             309,763,366.15                      245,372,069.36

Other remarks:



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                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

66. Financial expenses

                                                                                                                Unit: Yuan

                     Item                      Current period amount                   Previous period amount

Interest expenditures                                           59,754,089.36                           69,915,383.28

Interest income                                                -59,709,415.20                           -58,134,194.43

Gains on foreign exchange                                       53,973,441.25                           94,969,455.21

Bank handling charges                                           10,783,600.62                            6,829,360.99

Total                                                           64,801,716.03                          113,580,005.05

Other remarks:


67. Other income

                                                                                                                Unit: Yuan

                     Items                     Current period amount                   Previous period amount

Government grants related to assets                              1,190,493.96                            1,196,922.60

Government grants related to income                             45,857,466.79                           32,022,952.51

Refund of handling fees for withholding
                                                                   502,892.56                              267,035.13
individual income tax

Total                                                           47,550,853.31                           33,486,910.24


68. Investment income

                                                                                                                Unit: Yuan

                        Item                      Current period amount                 Previous period amount

Gain on long-term equity investments
                                                                  253,722,685.68                       260,530,217.44
accounted for by the equity method

Investment income from disposal of long-term
                                                                          40,415.45                        266,783.83
equity investments

Investment income from financial assets held
                                                                       1,808,120.10                      1,792,735.16
for trading during

Investment income from disposal of financial
                                                                  119,298,472.39                        30,314,376.80
assets held for trading

Dividend income from investments in other
                                                                                                         3,647,177.70
equity instruments during the holding period

Loss on discount on receivables financing                              -4,570,835.23

Total                                                             370,298,858.39                       296,551,290.93



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                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Other remarks:


69. Net exposure hedging income

                                                                                                       Unit: Yuan

                    Item                  Current period amount               Previous period amount

Other remarks:


70. Gains on changes in fair value

                                                                                                       Unit: Yuan

                   Source                 Current period amount               Previous period amount

Held-for-trading financial assets                         -22,632,570.84                       31,920,861.95

 Including: Gains on changes in fair
value arising from derivative financial                   -31,697,410.86                       31,510,730.07
instruments

Transaction financial liabilities                            -978,031.91

Total                                                     -23,610,602.75                       31,920,861.95

Other remarks:


71. Credit impairment loss

                                                                                                       Unit: Yuan

                    Item                  Current period amount               Previous period amount

Bad debt loss of other receivables                         -4,967,019.95                        -2,272,889.16

Bad debt loss of receivables financing                     -9,918,842.81                       -14,269,832.52

Bad debt loss of accounts receivable                      -30,906,344.55                       -10,705,040.96

Bad debt loss of prepayment                                 1,461,995.24                         -884,081.80

Total                                                     -44,330,212.07                       -28,131,844.44

Other remarks:


72. Assets impairment loss

                                                                                                       Unit: Yuan

                    Item                  Current period amount               Previous period amount

Loss of inventory decline and contract
                                                          -18,850,329.32                       -22,641,151.52
performance cost impairment loss

Impairment loss of goodwill                                -4,280,836.29                       -70,843,415.48



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                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Total                                                                        -23,131,165.61                                 -93,484,567.00

Other remarks:


73. Gains on asset disposal

                                                                                                                                  Unit: Yuan

                     Items                               Current period amount                         Previous period amount

Gains on disposal of fixed assets                                             -3,020,089.44                                    -300,665.75

Total                                                                         -3,020,089.44                                    -300,665.75


74. Non-operating revenue

                                                                                                                                  Unit: Yuan

                                                                                                             Amount included in non-
              Item                     Current period amount              Previous period amount
                                                                                                               recurring profit or loss

Acceptance of donations                                                                       221,786.41

Gain on destruction and
                                                         13,785.22                             83,056.95                         13,785.22
retirement of non-current assets

Unable to pay                                       3,836,871.67                              615,523.56                      3,836,871.67

Compensation income                                   324,870.81                              529,703.60                        324,870.81

Negative goodwill arising from
                                                   82,984,773.90                        53,341,459.79                       82,984,773.90
business combination

Other                                                 187,648.80                               85,532.84                        187,648.80

Total                                              87,347,950.40                        54,877,063.15                       87,347,950.40

Government grants included in current profits and losses:
                                                                                                                                  Unit: Yuan

                                                                Grants                                                         Related to
                                                               affected          Special         Current        Previous     assets/Relate

    Items            Entity        Reason       nature        current net     grants or not      amount          period       d to profit or
                                                             profit or not                                       amount           loss

Other remarks:

     The formation of negative goodwill in a business combination is described in Section X(VIII) 1. Description
of business combinations not under common control.

75. Non-operating expenditures

                                                                                                                                  Unit: Yuan

                                                                                                           Amount included in the current
              Item                     Current period amount              Previous period amount
                                                                                                           non-recurring gains and losses


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                                                            Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

External donations                                        4,019,141.43                  709,875.68                     4,019,141.43

Loss on destruction and
                                                          1,847,789.51                  738,005.09                     1,847,789.51
scrapping of non-current assets

Fine expenses                                              321,317.87                  1,076,247.57                      321,317.87

Other                                                      136,142.69                   299,222.37                       136,142.69

Total                                                     6,324,391.50                 2,823,350.71                    6,324,391.50

Other remarks:


76. Income tax expenses

(1) Details

                                                                                                                              Unit: Yuan

                      Item                                 Current period amount                     Previous period amount

Current period income tax expenses                                         181,379,736.40                            187,284,921.29

Deferred income tax expenses                                               -20,161,653.17                             12,495,238.20

Total                                                                      161,218,083.23                            199,780,159.49


(2) Reconciliation of accounting profit to income tax expenses

                                                                                                                              Unit: Yuan

Items                                                                                       Current period amount

Profit before tax                                                                                                   1,458,533,282.84

Income tax expenses based on tax rate applicable to the parent
                                                                                                                     218,779,992.43
company

Effect of different tax rate applicable to subsidiaries                                                               26,569,270.98

Effect of prior income tax reconciliation                                                                              -8,595,694.29

Effect of non-taxable income                                                                                          -29,372,674.81

Effect of non-deductible costs, expenses and losses                                                                    9,906,713.10

Utilization of deductible losses not previously recognized as
                                                                                                                       -9,684,583.92
deferred tax assets

Effect of investment from long-term equity investments under
                                                                                                                      47,268,599.01
equity method

Effect of deducible temporary differences or deductible losses not
                                                                                                                      -38,058,402.85
recognized as deferred tax assets

Effectofadditionaldeductionoftechnologydevelopmentfeesandwa
                                                                                                                      -55,595,136.42
ges for disabled employees


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                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Income tax expenses                                                                                           161,218,083.23

Other instructions


77. Other comprehensive income

See Note 57, other comprehensive income for details.


78. Notes to items of cash flow statements

(1) Other cash receipts related to operating activities

                                                                                                                       Unit: Yuan

                     Item                                 Current period amount               Previous period amount

Recovery of deposits on bankers'
                                                                           14,267,400.00                       10,786,677.30
acceptances

Interest income                                                            76,718,283.04                       49,046,349.09

Government subsidy income                                                  42,393,347.30                       28,810,242.20

Operating lease income                                                     19,564,397.37                       15,020,862.01

Recovery of guarantee deposits                                                                                    300,000.00

Other                                                                       7,295,322.21                        5,313,974.96

Total                                                                     160,238,749.92                      109,278,105.56

Instructions of other cash received related to operating activities:


(2) Other cash payments related to operating activities

                                                                                                                       Unit: Yuan

                     Item                                 Current period amount               Previous period amount

Operating period expenses                                                 985,886,790.62                      624,751,673.57

Payment of bank acceptance deposit                                         27,725,700.00                       14,267,400.00

Payment of customs bond deposit                                             1,975,140.00

Others                                                                      9,535,171.45                        7,594,720.20

Total                                                                   1,025,122,802.07                      646,613,793.77

Instructions of other cash paid related to operating activities:


(3) Other cash receipts related to investing activities

                                                                                                                       Unit: Yuan

                     Item                                 Current period amount               Previous period amount

Recovery of deposit for purchase of                                         3,295,074.50


                                                                                                                             270
                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

forward exchange settlement

Recovery of project performance deposits                                      495,608.89

Recovery of investment funds deposited                                      2,154,766.92                       22,822,339.65

Total                                                                       5,945,450.31                       22,822,339.65

Instructions of other cash received related to investment activities:


(4) Other cash payments related to investing activities

                                                                                                                       Unit: Yuan

                      Item                                Current period amount               Previous period amount

Deposit out investment funds                                                                                    2,154,766.92

Purchase of forward exchange settlement
                                                                            2,295,252.00                        3,295,074.50
margin

Payment of land purchase deposit                                                                               20,325,841.02

Payment of project performance bond                                           492,906.98                          495,608.89

Total                                                                       2,788,158.98                       26,271,291.33

Instructions of other cash paid related to investment activities:


(5) Other cash receipts related to financing activities

                                                                                                                       Unit: Yuan

                      Item                                Current period amount               Previous period amount

Receipt of loan from the beneficial owner
                                                                          583,000,000.00
of the funds

Recovery of deposits made for the
                                                                                                              300,000,000.00
processing of notes

Receipt of borrowings from social funds                                                                        15,512,811.43

Total                                                                     583,000,000.00                      315,512,811.43

Instructions of other cash receipts related to financing activities:


(6) Other cash payments related to financing activities

                                                                                                                       Unit: Yuan

                      Item                                Current period amount               Previous period amount

Funds paid for share repurchase                                           186,441,914.48

Funds paid for acquisition of minority
                                                                           20,201,500.00
interests

Repayment of social fund split borrowings                                  16,850,810.54



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                                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

and interest

Repayment of lease liabilities and interest                                   59,939,559.59                     30,545,009.60

Transfer fees for financing letters of
                                                                               4,570,835.23                      7,997,070.51
guarantee and receivables financing

Repayment of finance lease payable by
                                                                                                                   976,686.29
Prime-Line Products, LLC

Payment of issuance costs for issuance of
                                                                                                                 6,606,505.30
convertible bonds

Redemption amount of convertible bonds                                         2,581,437.71

Payment of minority shareholders'
liquidation amount of Franti Kitchen &                                            88,811.75
Bath (Suzhou) Co.

Total                                                                        290,674,869.30                     46,125,271.70

Instructions of other cash payments related to financing activities:


79. Supplement information to the cash flow statement

(1) Supplement information to the cash flow statement

                                                                                                                        Unit: Yuan

              Supplement information                     Current period amount                 Previous period amount

1) Reconciliation of net profit to cash flow
                                                                       --                                --
from operating activities:

Net profit                                                                  1,297,315,199.61                  1,364,494,588.44

Add: Provision for assets impairment loss                                     67,461,377.68                    121,616,411.44

Depreciation of fixed assets, oil and gas
                                                                             170,864,798.78                    128,380,048.11
assets, productive biological assets

          Depreciation of right-of-use assets                                 78,057,113.74                     28,134,725.30

          Amortization of intangible assets                                   24,648,378.98                     18,637,144.15

          Amortization of long-term
                                                                              28,589,540.58                      5,374,280.54
amortization

Loss on disposal of property, plant and
equipment, intangible assets and other
                                                                               3,020,089.44                        300,665.75
long-term assets (gain is presented with a "-"
sign)

          Loss on retirement of property,
plant and equipment (gain is presented with                                    1,834,004.29                        654,948.14
a "-" sign)




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                                                    Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

             Losses on changes in fair value
                                                                     23,610,602.75                      -31,920,861.95
(gains are presented with a "-" sign)

             Finance costs (gains are presented
                                                                    111,747,068.72                     166,307,558.92
with a "-" sign)

             Loss on investments (gain is
                                                                   -370,298,858.39                    -296,551,290.93
presented with a "-" sign)

             Decrease in deferred tax assets
                                                                    -21,863,965.98                      -21,676,277.78
(increase is presented with a "-" sign)

             Increase in deferred tax liabilities
                                                                      1,702,312.81                      35,300,639.39
(decrease is presented with a "-" sign)

             Decrease in inventories (increase is
                                                                  -1,209,507,080.11                   -174,121,514.47
presented with a "-" sign)

             Decrease in operating receivables
                                                                   -537,038,480.67                    -408,964,409.46
(increase is presented with a "-" sign)

             Increase in operating payables
                                                                    348,490,067.44                    -126,332,561.45
(decrease is presented with a "-" sign)

             Other                                                                                      -38,483,468.90

             Net cash flow from operating
                                                                     18,632,169.67                     771,150,625.24
activities

2) Significant investing and financing
activities not related to cash receipts and                  --                                  --
payments:

Conversion of debt into capital

Convertible bonds due within one year

Fixed assets leased in under finance leases

3) Net changes in cash and cash equivalents:                 --                                  --

Cash at the end of the period                                     4,001,186,241.18                    3,730,263,218.08

Less: Cash at the beginning of the period                         3,730,263,218.08                    2,127,457,447.34

Add:Cashequivalentsattheendoftheperiod

Less:Cashequivalentsatthebeginningofthe
period

Net increase of cash and cash equivalents                           270,923,023.10                    1,602,805,770.74


(2) Net cash payment for acquisition of subsidiaries in current period

                                                                                                             Unit: Yuan




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                                                    Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

                                                                                      Amount

Cashandcashequivalentspaidincurrentperiodasconsiderationfor
                                                                                                          960,930,958.18
business combination in currentperiod

Including:                                                                               --

Geelong Orchid Holding Limited                                                                            746,263,039.85

BeA                                                                                                       214,667,918.33

Less: Cash and cash equivalents held by the Company on the
                                                                                                            36,995,204.47
purchase date

Including:                                                                               --

Geelong Orchid Holding Limited                                                                              19,233,104.87

BeA                                                                                                         17,762,099.60

Including:                                                                               --

Net cash paid by the subsidiary companies                                                                 923,935,753.71

Other remarks:


(3) Net cash received for disposal of subsidiaries in the current period

                                                                                                                   Unit: Yuan

                                                                                      Amount

Including:                                                                               --

Including:                                                                               --

Including:                                                                               --

Other remarks:


(4) Composition of cash and cash equivalents

                                                                                                                   Unit: Yuan

                    Item                                Closing balance                       Opening balance

1) Cash                                                           4,001,186,241.18                       3,730,263,218.08

Including: Cash on hand                                               2,574,760.83                              2,874,834.15

Cash in bank on demand for payment                                3,983,507,419.70                       3,722,569,979.24

Other cash and bank balances on demand for
                                                                     15,104,060.65                              4,818,404.69
payment

3) Cash and cash equivalents at the end of the
                                                                  4,001,186,241.18                       3,730,263,218.08
period

Other remarks:

      Due to liquidity restrictions, the Company treats deposits for handling bank acceptance bills, share


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repurchase funds for securities accounts, construction performance deposits, forward exchange settlement deposits,
customs duty guarantee deposits, ETC deposits and deposited investment funds as monetary funds that are not
cash and cash equivalents. The Opening balance of these margin deposits was RMB 20,242,850.31 and the
Closing balance was RMB 32,520,998.98.



80. Notes to items in statement of changes in owner's equity

Explain the name of "other" items and the amount of adjustment for the balance at the end of previous year:


81. Assets with title or use right restrictions

                                                                                                                        Unit: Yuan

                        Item                              Carrying amount                                   Reason

Monetary funds                                                           27,725,700.00 Bank acceptance deposit

Fixed assets                                                             29,720,650.63 Collateral for opening bank acceptance

Intangible assets                                                         2,110,603.58 Collateral for opening bank acceptances

Monetary funds                                                            2,295,252.00 Forward exchange settlement margin

Currency funds                                                            1,975,140.00 Customs bond

Currency funds                                                              492,906.98 Engineering performance bond

Monetary funds                                                               32,000.00 ETC deposit

Fixed assets                                                             10,873,242.70 Bank loan collateral

Intangible assets                                                         1,483,459.51 Pledge for bank loan

100.00% equity of Arrow Fastener Co.,LLC
                                                                        388,146,927.39 Pledge for bank loan
[Note]

100.00% equity of Geelong Orchid Holding
                                                                        205,959,077.97 Pledge for bank loan
Limited[Note]

Total                                                                   670,814,960.76                        --

Other remarks:

     [Note] It refers to net assets ofArrow Fastener Co.,LLC and Geelong Orchid Holding Limited at the end of
the current period.



82. Monetary items in foreign currencies

(1) Monetary items in foreign currencies

                                                                                                                        Unit: Yuan

                                   Closing balance in foreign Exchange rate                        RMBequivalentattheendofthe
                 Item
                                   currencies                                                      period


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                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Monetary funds                  --                               --                       999,395,660.17

Including:USD                    119,671,348.47 6.3757                                    762,988,616.44

       EUR                           13,375,062.58 7.2197                                   96,563,939.31

       HKD                           11,405,383.07 0.8176                                    9,325,041.20

VND                           29,522,014,355.00 0.000280065                                  8,268,082.95

JPY                                  84,281,787.00 0.055415                                  4,670,475.23

CHF                                  16,298,013.68 6.9776                                  113,721,020.25

THB                                   5,012,583.45 0.191175346                                958,282.38

CAD                                    561,931.97 5.0046                                     2,812,244.74

Macau Dollar                            69,669.45 1.2625                                       87,957.68

Accounts receivable             --                               --                      1,716,248,124.39

Including:USD                   222,309,533.85 6.3757                                    1,417,378,894.97

       EUR                              51,566.95 7.2197                                      372,297.91

       HKD                           82,640,703.91 0.8176                                   67,567,039.52

VND                             102,227,456.30 0.000280065                                     28,630.33

JPY                                  72,964,947.04 0.055415                                  4,043,352.54

CHF                                  32,512,312.13 6.9776                                 226,857,909.12

Receivables financing                                                                     549,247,279.86

Including:USD                        86,146,976.78 6.3757                                 549,247,279.86

Long-term receivables                                                                        2,274,855.31

Including:VND                  8,122,597,646.97 0.000280065                                  2,274,855.31

Short-term borrowing                                                                     1,368,249,828.18

Including:USD                   194,154,261.44 6.3757                                    1,237,869,324.66

CHF                                   8,322,580.07 6.9776                                   58,071,634.70

EUR                                  10,015,494.94 7.2197                                   72,308,868.82

Accounts payable                                                                          480,129,004.86

Including:HKD                   107,647,852.07 0.8176                                       88,012,883.85

USD                                  35,822,012.15 6.3757                                 228,390,402.86

CHF                                  12,211,042.85 6.9776                                   85,203,772.59

JPY                                  12,180,765.14 0.055415                                   674,997.10

EUR                                   9,388,145.80 7.2197                                   67,779,596.23

THB                                   8,086,991.77 0.191175346                               1,546,033.45

VND                           30,426,218,127.93 0.000280065                                  8,521,318.78

Non-current liabilities due                                                               254,007,862.22



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                                                  Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

withinone year

Including:USD                                   8,575,614.20 6.3757                                          54,675,543.45

EUR                                            21,611,736.90 7.2197                                         156,030,256.90

CHF                                             4,818,434.33 6.9776                                          33,621,107.38

HKD                                              823,950.39 0.8176                                              673,661.84

VND                                     32,161,436,277.35 0.000280065                                         9,007,292.65

Long-term borrowings                      --                                --                              768,114,136.60

Including:USD                                  95,497,000.00 6.3757                                         608,860,222.90

           EUR                                  3,033,499.57 6.9776                                          21,166,546.60

           HKD

CHF                                            18,998,625.27 7.2197                                         137,164,374.86

JPY                                            16,656,000.00 0.055415                                           922,992.24

Lease obligations                                                                                           268,272,355.80

Including:VND                           79,129,771,083.96 0.000280065                                        22,161,479.34

USD                                             5,345,377.33 6.3757                                          34,080,522.24

CHF                                            30,387,289.93 6.9776                                         212,030,354.22

Other remarks:


(2) Description of overseas business entities, including for important overseas business entities, disclosure of
their main overseas business locations, functional currency and selection basis, and disclosure of reasons
for changes in functional currency.

√ Applicable □ Not Applicable

Entities                                                         Main operating place             Functional currency

BeA GmbH and its subsidiaries                                    Germany, Austria, Australia, EUR, AUD, USD,
                                                                 Germany, France, the Czech     CHF, GBP
                                                                   Republic,United States,
                                                                     Norway, Sweden,
                                                                   Switzerland, Slovakia,
                                                                   Spain, Italy, the United
                                                                          Kingdom
Great Star Tools USA,INC. and its subsidiaries                   United States                              USD
Lista Holding AG and its subsidiaries                                  Switzerland, Austria,         CHF, EUR, GBP
                                                                            Germany,
                                                                      France, Spain, Italy, the
                                                                         United Kingdom
Geelong Orchid Holding Limited and its subsidiaries              The British Cayman Islands,        HKD, THB, USD
                                                                   Thailand, Hong Kong,
                                                                      Mauritius, Macau

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                                                      Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

XDD Products (USA) LLC                                                           United States                       USD
TGH(Cambodia)Industrial Co.,LTD                                                    Cambodia                          USD
Newland.LLC                                                                      United States                       USD
Great Star Japan Co.,LTD                                                             Japan                          JPY
Greatstar Europe AG                                                               Switzerland                       CHF
Prexiso AG                                                                        Switzerland                       CHF
Geelong (Thailand) Co .,Ltd                                                         Thailand                        THB
Hong Kong International Huada                  Kejie Opto-Electro                 Hong Kong                          USD
Instrument Co., Ltd.
Hong Kong Great Star International Co., Ltd                                       Hong Kong                          USD
HongKong Goldblatt Industrial Co.,Ltd                                             Hong Kong                          USD
Prim' Tools Limited                                                               Hong Kong                         HKD
Hongkong Shop-Vac International Co., Limited                                      Hong Kong                          USD
GreatStar International Holdings Limited                                     British Virgin Islands                  USD
Great Star Vietnam Co.,Ltd                                                          Vietnam                         VND
Vietnam United Co.,Ltd                                                              Vietnam                         VND
GreatStar Industrial Vietnam Co., Ltd                                               Vietnam                         VND



83. Hedging

Disclose the qualitative and quantitative information of the hedged items and related hedging instruments and the hedged risks
according to the types of Hedging:


84. Government grants

(1) Basic information of government grants

                                                                                                                          Unit: Yuan

                                                                                                      Amount recognized in the
           Category                          Amount                       Presented under
                                                                                                        current profit and loss

Special subsidy for foreign
tradepublicserviceplatform                            636,555.46 Other income                                           442,666.68
construction

Special subsidy for
“substitutingmachine for
                                                    1,085,393.07 Other income                                           270,271.68
human” technicaltransformation
project

Special subsidy for strategic
emerging industries equipment                         689,999.72 Other income                                           230,000.04
manufacturing projects



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                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Financial subsidy for capacity
expansion project of novel hand                    160,000.24 Other income                                99,999.96
tool series products

Special subsidy for provincial
enterprise technology center
                                                    46,296.26 Other income                                55,555.56
innovation
capacityconstructionproject

Special fund for strategic
emergingindustriesdevelopment
                                                   183,999.88 Other income                                92,000.04
pilot project andbase
construction

Subtotal                                      2,802,244.63                                              1,190,493.96


(2) Returned government grants

□ Applicable √ Not Applicable
Other remarks:

     (1) Government grants related to income and used to compensate the Company for related costs or losses
already incurred
   Item                            Amount            Presented                 Basis Documents
                                                       under
Industrial support policy funds    18,050,000.00 Other income Jiang Cai Fa〔2020〕No. 46, Shang Cai〔2021〕
                                                              No. 6
Special funds for foreign trade     6,648,200.00 Other income Hang Cai Qi〔2020〕NO. 57
and economic development
Financial subsidies for research    6,361,300.00 Other income Zhe Cai Ke Jiao〔2020〕No.34, Jiang Ke〔2020〕
and development                                               No. 10, Qiang Tang Jing Ke〔2021〕No.11, etc.
Value-added tax rebate              3,967,012.05 Other income Cai Shui〔2016〕No.52
Business development funds          3,882,962.80 Other income Jiang Cai Fa〔2020〕No.92, Jiang Cai Fa〔2020〕
                                                              No.96
Employment stabilization            2,117,644.30 Other income Hang Zheng Han〔2019〕No.19, Hang Renshe Fa
subsidies                                                       ﹝2020﹞No.94, etc.
Financial special funds             1,655,766.63 Other income Hang Cai Qi〔2021〕No.33, Long Jing Xin〔2021〕
                                                                No.17, Xian Wei Fa〔2021〕No.32, etc.
Special fund for e-commerce          943,400.00 Other income Jiang Cai Fa〔2020〕v67
funding
Patent and intellectual property     742,250.00 Other income Hang Shi Guan〔2020〕No.173, Hang Shi Guan
funding                                                        〔2019〕No.186, Chang Cai Gong Mao〔2019〕
                                                               No. 12, Chang Cai Gong Mao〔2019〕No.12
Other                               1,488,931.01 Other income Relevant documents
   Subtotal                        45,857,466.79
    (2) In the current period, government grants included into profit or loss totaled RMB47,047,960.75.

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                                                              Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

85. Others

VIII. Changes in the consolidation scope

1. Business combination not under common control

(1) Business combination not under common control in current period

                                                                                                                                           Unit: Yuan

  Acquirees         Equity          Equity        Proportion of      Equity        Acquisition Determine          Acquiree’s        Acquiree’s
                  acquisition     acquisition        equity        acquisition        date        basisfor        incomefrom         net
                     date            cost         acquired (%)      method                        acquisition     acquisition        profitfromacq
                                                                                                  date            date to period uisition date
                                                                                                                  end                to period end

Acquisition
of related
operating
assets and                                                        Equity
                                 243,418,722.                                                     Transfer of     631,177,117. 84,381,874.4
subsidiary       June 01, 2021                        100.00% transfer            June 01, 2021
                                             10                                                   control right                 72                 7
equity of Joh.                                                    agreement
Friedrich
Behrens AG
[Note]

Geelong
Orchid
                                                                  Equity
Holding                          794,236,994.                                                     Transfer of     1,124,647,45 -19,877,804.6
                 July 02,2021                         100.00% transfer            July 02,2021
Limited and                                  50                                                   control right            8.44                    1
                                                                  agreement
its
subsidiaries

Other remarks:

    [Note] Joh. Friedrich Behrens AG related operating assets and its subsidiaries equity shall be referred to as
BeA Company, Geelong Orchid Holding Limited and its subsidiarie shall be referred to as Geelong Orchid
Holding Limited.

(2) Combination costs and goodwill

                                                                                                                                           Unit: Yuan

               Combination costs                                      BeA                                Geelong Orchid Holding Limited

-- Cash                                                                          243,418,722.10                                  794,236,994.50

--Fair value of non-cash assets

--Fair value of debt issued or assumed

--Fair value of equity securities issued


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                                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

-- Fair value of contingent consideration

-- Fair value of equity interests held prior
to the date of purchase at the date of
purchase

--Other

Total consolidated cost                                                     243,418,722.10                              794,236,994.50

Less: Share of fair value of identifiable net
                                                                            326,403,496.00                              226,199,135.39
assets acquired

Amount by which goodwill/consolidation
cost is less than the share of fair value of                                -82,984,773.90                              568,037,859.11
identifiable net assets acquired

The illustration of Combination costs fair value determination method , contingent consideration and its movements. Main reason for
the formation of the large amount goodwill:
Other remarks:


(3) Acquisition-date identifiable assets and liabilities of acquirees

                                                                                                                              Unit: Yuan

                                                       BeA                                   Geelong Orchid Holding Limited

                               Acquisition-date fair      Acquisition-date carrying   Acquisition-date fair    Acquisition-date carrying
                                         value                    amount                     value                     amount

Assets:

Money funds                               17,762,099.60              17,762,099.60             19,233,104.87              19,233,104.87

Receivables                              105,999,380.10            105,999,380.10            217,859,223.83             217,859,223.83

Inventory                                223,562,467.90            223,562,467.90            257,110,486.15             257,110,486.15

Fixed assets                              71,687,528.27              71,687,528.27             68,463,662.85              44,701,030.31

Intangible assets                         85,414,108.00              37,110,980.00                225,569.32                 225,569.32

Prepayments                               10,669,488.40              10,669,488.40             30,983,565.74              30,983,565.74

Other receivables                          6,374,178.60               6,374,178.60              9,168,702.04               9,168,702.04

Right-of-use assets                       49,777,106.80              49,777,106.80             15,346,921.51              15,346,921.51

Long-term amortization                                                                          9,268,206.76               4,782,578.96

Other Assets                              14,750,071.13              14,750,071.13             48,998,718.81              48,998,718.81

Liabilities:

Borrowings                                70,834,397.20              70,834,397.20

Payables                                  91,333,755.90              91,333,755.90           368,245,573.31             368,245,573.31

Deferred income tax
liabilities



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                                                         Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Lease obligations                      49,777,106.80               49,777,106.80

Employee compensation
                                                                                              16,476,782.98           16,476,782.98
payable

Taxes payable                                                                                  9,046,468.09            9,046,468.09

Other payables                                                                                33,089,500.28           33,089,500.28

Other liabilities                      47,647,672.90               38,856,503.60              23,600,701.83           19,363,462.78

Net assets                            326,403,496.00             286,891,537.30            226,199,135.39            202,188,114.10

Less: Minority interests

Net assets acquired                   326,403,496.00             286,891,537.30            226,199,135.39            202,188,114.10

The fair value determination method of identifiable assets and liabilities:

     Determined by reference to the analysis of the fair value of each identifiable asset and liability assessed by
the asset valuer using the asset-basis approach.


The contingent liabilities of the acquirees assumed in the business combination:
Other remarks:


(4) Gain/loss of equity held prior to acquisition-date remeasured at fair value

Whether exists any business combination achieved in stages and gain control during the reporting period or not
□ Yes    √ No


(5) Related instructions on that cannot reasonably determine the combination consideration or the fair
value of the acquiree’s identifiable assets and liabilities at the acquisition date or at the end of the
acquisition period.

(6) Other instructions

2. Business combination under common control

(1) Business combination under common control in current period

                                                                                                                           Unit: Yuan

                                                                         Revenue of the Net profit of the
Combined Proportion        of Determination Combinati Determinatio combined party combined party Revenue of Net profit of
party        equity arising      basis of     on date     n method of from beginning from beginning the               the combined
             from business       business                 combination ofthecombinati of               the combined    party during
             combination       combination                date           onto        the combination to party during the
                                  under                                  combinationdat the                 the       comparison
                                 common                                  e              combinationdate comparison period
                                 control                                                                    period

Other remarks:


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                                                        Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

(2) Combination cost

                                                                                                                              Unit: Yuan

                           Combinationcost

--Cash

--Carrying amount of non-cash assets

--Carrying amount of debt issued or assumed

--Notional value of equity securities issued

--Contingent consideration

Instructions of contingent consideration and its movements:
Other remarks:


(3) Carrying amount of combined party assets and liabilities on the combination date

                                                                                                                              Unit: Yuan



                                                           Combination date                          End of previous period

Assets:

Money funds

Receivables

Inventory

Fixed assets

Intangible assets



Liabilities:

Borrowings

Payables



Net assets

Less: Minority interests

Net assets acquired

The contingent liabilities of the acquirees assumed in the business combination:
Other remarks:


3. Reverse purchase

Basic information of the transaction, basis for reverse purchase, whether the assets and liabilities retained by the listed company


                                                                                                                                      283
                                                           Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

constitute business and its basis, determination of combination cost, adjusted amounts and calculation according to the processing of
equity transaction.


4. Disposal of the subsidiaries

Whether exists single disposal of a subsidiary resulting in the Company’s loss of control or not
□ Yes    √ No
Whether exists disposal of a subsidiary in stages resulting in the Company’s loss of control or not
□ Yes    √ No


5. Changes in the consolidation scope due to other reasons

Explain the changes in the consolidation scope resulting from other causes (such as new subsidiaries, liquidation subsidiaries, etc. )
and related information:

      1. The scope of combination increased
   Company name                      Equity acquisition      Time point for equity           Capital                 Capital
                                           method                acquisition               contribution            contribution
                                                                                                                    proportion
BeA GmbH                                   Set up                March 18, 2021             25,000.00                100.00%
                                                                                              EUR
Hongkong Shop-Vac                          Set up                 March 5, 2021               [Note]                 100.00%
International Co., Limited
SK Hand Tool,LLC                           Set up                 May 25, 2021                [Note]                 100.00%
Shenzhen Wankebao                          Set up                March 29, 2021           2,828,600.00               100.00%
Technology Co., Ltd                                                                           RMB
GreatStar Industrial Vietnam               Set up                February 9, 2021         17,000,000.00              100.00%
Co., Ltd                                                                                      USD
Hangzhou Great Star Power                  Set up              September 16, 2021         2,000,000.00               100.00%
Tool Co., LTD                                                                                 RMB
     [Note]As of the balance sheet date, the subsidiary Hong Kong Great Star International Co., Ltd. has not paid
in capital contribution in Hongkong Shop-Vac International Co., Limited, and the subsidiary Great Star Tools USA,
Inc has not paid in capital contribution in SK Hand Tool,LLC.
     2. Entities excluded from the consolidation scope
   Company Name                                Equity        Time point for equity Disposal-date net         Net profit from the
                                             acquisition         acquisition            assets               period beginning to
                                              method                                                          the disposal date

Falandi Kitchen            &   bathroom Cancellation           September 28, 2021                                  2,613,283.77
(Suzhou) Co., Ltd
Hangzhou Great Star Photoelectric Cancellation                  September 9, 2021
Technology Co., LTD
Eudura Holding Limited                      Cancellation          April 8, 2021




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                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

6. Others

IX. Interest in other entities

1. Interest in significant subsidiaries

(1) Composition of the Group Company


   Subsidiaries       Mainoperating      Place of        Business nature        Shareholding ratio                Acquisition
                          place         registration                                                                method
                                                                             Direct           Indirect

Changzhou
                                                                                                               Business
Huada Kejie
                     Changzhou,       Changzhou,                                                               combination not
Opto-electro                                            Manufacturing            65.00%
                     Jiangsu          Jiangsu                                                                  under common
Instrument Co.,
                                                                                                               control
Ltd.

Hangzhou Great
Star Tools Co., Hangzhou,Zh           Hangzhou,         Manufacturing           100.00%                        Set up
Ltd.            ejiang                Zhejiang


Hangzhou Great                                                                                                 Business
Star Tools Co., Hangzhou,Zh           Hangzhou,         Manufacturing           100.00%                        combinationunder
Ltd.            ejiang                Zhejiang                                                                 common control

                     Hong Kong        Hong Kong                                                                Business
Prim' Tools                                                                                                    combination not
                                                        Commerce                                      86.96%
Limited                                                                                                        under common
                                                                                                               control

Hong Kong Great Hong Kong             Hong Kong
Star International                                      Commerce                100.00%                        Set up
Co., Ltd.

Great Star Tools
                     United States    United States     Commerce                100.00%                        Set up
USA, Inc

                                                                                                               Business
Arrow Fastener                                                                                                 combination not
                     United States    United States     Manufacturing                                100.00%
Co., LLC                                                                                                       under common
                                                                                                               control

Great Star
Industrial           United States    United States     Commerce                                     100.00% Set up
USA,LLC

Greatstar Europe
                     Switzerland      Switzerland       Commerce                100.00%                        Set up
AG

Lista Holding AG Switzerland          Switzerland       Manufacturing                                100.00% Business



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                                                               Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

                                                                                                                                 combination not
                                                                                                                                 under common
                                                                                                                                 control

BeA GmbH              Germany                Germany             Manufacturing                                        100.00% Set up

Zhongshan                                                                                                                        Business
Geelong               Zhongshan,             Zhongshan,                                                                          combination not
                                                                 Manufacturing                                        100.00%
Industrial Co.,       Guangdong              Guangdong                                                                           under common
Ltd.                                                                                                                             control

Instructions if the shareholding proportion differs from the voting rights proportion over the subsidiary:
Basis of holding half or less voting rights but still control the investee and holding more than half of the voting rights but do not
control the investee:
The basis of control for the important structured entity included in the scope of consolidation:
The basis for determining whether the Company is an agent or a principal:
Other remarks:


(2) Significant not wholly-owned subsidiaries

                                                                                                                                             Unit: Yuan

                                 Holding proportion of
                                                                  Non-controlling              Dividend declared to          Closing balance of
     Subsidiaries                   non-controlling
                                                               shareholders’ profit or          non-controlling              non-controlling
                                     shareholders
                                                                         loss                      shareholders                    interest

Changzhou Huada Kejie
Opto-electro Instrument                            35.00%                 19,955,450.09                                             109,175,474.55
Co., Ltd.

Prim' Tools Limited                                13.04%                   3,198,578.87                  755,470.43                  17,291,627.52

Instructions if the non-controlling shareholders proportion differs from the voting rights proportion over the subsidiary:
Other remarks:


(3) Main financial information of significant not wholly-owned subsidiaries

                                                                                                                                             Unit: Yuan

                                    Closing balance                                                       Opening balance

Subsidia                 Non-                                Non-                               Non-                              Non-
     ries   Current     current      Total      Current     current      Total       Current   current    Total     Current      current      Total
             assets     assets      assets     liabilities liabilities liabilities   assets     assets    assets    liabilities liabilities liabilities

Changzh
ou
            392,051, 76,900,3 468,951, 173,686, 631,034. 174,317, 256,720, 78,381,9 335,102, 98,408,4 10,303.7 98,418,7
Huada
              512.99      65.45      878.44      804.52            97    839.49       509.75      78.16    487.91       32.31            6      36.07
Kejie
Opto-ele



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                                                                   Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

ctro
Instrume
nt Co.,
Ltd.

Prim'
             97,160,8 10,895,5 108,056, 22,413,2                            22,413,2 85,971,7 10,593,0 96,564,8 11,249,4                             11,249,4
Tools
                19.71       56.96      376.67          09.48                    09.48         95.30      60.14      55.44         20.93                 20.93
Limited

Donggua
n Ouda       55,292,0 10,634,3 65,926,4 12,586,9 1,086,72 13,673,6 48,144,0 7,993,91 56,137,9 18,119,8                                               18,119,8
Electroni       72.18       38.67       10.85          52.25        2.10        74.35         58.35        3.58     71.93         54.82                 54.82
cs Ltd.

                                                                                                                                                    Unit: Yuan

                                      Current period amount                                                    Previous period amount

                      Operating                        Totalcompreh Cash flows                 Operating                        Totalcompreh Cash flows
 Subsidiaries
                      revenue         Net profit          ensive        fromoperatin           revenue         Net profit          ensive       fromoperatin
                                                         income            g activities                                           income         g activities

Changzhou
Huada Kejie
                  554,110,840. 57,950,287.1 57,950,287.1 30,233,194.6 277,741,153. 21,995,099.1 21,995,099.1 13,311,165.8
Opto-electro
                                03                 1                1                     7              27                 1               1                   6
Instrument
Co., Ltd.

Prim' Tools       288,470,625.                                                                167,093,194.
                                     8,311,220.20 8,311,220.20 6,104,141.24                                   9,266,042.10 4,523,437.66 4,068,305.99
Limited                         69                                                                       15

Dongguan
Ouda              172,937,118. 14,234,619.3 14,234,619.3                                      108,579,831.
                                                                        -9,893,790.30                         8,884,587.30 8,884,587.30 2,478,629.98
Electronics                     80                 9                9                                    16
Ltd.

Other remarks:


(4) Significant restrictions on the use of company assets and the settlement of company debt

(5) Financial support or other support to structured entities included in the consolidated financial
statements

Other remarks:


2. Transactions resulting in changes in subsidiaries’ equity but without losing control

(1) Description of the changes in the owner's equity share in a subsidiary


       Subsidiaries                                     Date of change               Holding proportion           Holding proportion after
                                                                                       before change                      change


                                                                                                                                                            287
                                                       Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

Longyou Yiyang Forging Co., Ltd.               August 2021               85.1775%                     91.9150%
Longyou Huguang Forging Three Tools            August 2021                67.00%                       82.00%
Co., Ltd.
Hangzhou Great Star Sheffield Tools             May 2021                  66.00%                       68.13%
Co., Ltd.
PREXISO Laser Measurement Tool                  June 2021                 51.00%                       100.00%
(Hangzhou) Co., Ltd




(2) Effect of transactions on non-controlling interest and equity attributable to parent company

                                                                                                                         Unit: Yuan

                                                         Longyou Huguang                                      PREXISO Laser
                            Longyou Yiyang Forging                                Hangzhou Great Star
                                                      Forging Three Tools Co.,                               Measurement Tool
                                   Co., Ltd.                                     Sheffield Tools Co., Ltd.
                                                                Ltd.                                         (Hangzhou) Co., Ltd

Purchase cost/disposal
consideration

--Cash                                 1,239,140.91             18,760,859.09                  106,500.00                95,000.00

--Fair value of non-cash
assets



Total purchase
cost/disposal                          1,239,140.91             18,760,859.09                  106,500.00                95,000.00
consideration

Less: Share of net assets
of subsidiaries based on
                                       3,336,498.29             21,178,432.96                   73,586.43            -1,644,850.54
percentage of equity
acquired/disposed

Difference                            -2,097,357.38             -2,417,573.87                   32,913.57             1,739,850.54

Including:Adjust capital
                                      -2,097,357.38             -2,417,573.87                  -32,913.57            -1,739,850.54
reserves

Adjust surplus reserves

Adjust the undistributed
profits

Other instructions




                                                                                                                                   288
                                                          Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report

3. Interest in joint ventures and associates

(1) Significant joint ventures and associates


    Associates       Main operating          Place of       Business nature      Shareholding ratio (%)                     Accounting
                          place            registration                                                                    treatment on
                                                                                     Direct         Indirect
                                                                                                                           investments in
                                                                                                                        joint ventures and
                                                                                                                             associates

Hangzhou
Zhongce Haichao Hangzhou,              Hangzhou,           Manufacturing
Enterprise          Zhejiang           Zhejiang                                           27.86%                        Equity method
Management Co.,
Ltd.

Zhejiang            Hangzhou,          Hangzhou,           Manufacturing
Hangcha Holding Zhejiang               Zhejiang                                           20.00%                        Equity method
Co., Ltd.

Zhejiang Guozi      Hangzhou,          Hangzhou,           Manufacturing
Robotics Co.,       Zhejiang           Zhejiang                                           21.95%                        Equity method
Ltd.

Ningbo Donghai Ningbo, Zhejiang Ningbo, Zhejiang Finance
                                                                                          19.00%                        Equity method
Bank Co., Ltd.

Shanghai Reno
Opto-electronics Shanghai              Shanghai            Commerce                                                     Equity
                                                                                                               26.00%
Technology Co.,                                                                                                         method[Note]
Ltd.

Changzhou           Changzhou,         Changzhou,
Stabila Laser       Jiangsu            Jiangsu             Manufacturing                                                Equity
                                                                                                               31.85%
Instrument                                                                                                              method[Note]
Company Limited

Hangzhou Weina Hangzhou,               Hangzhou,
Technologies Co., Zhejiang             Zhejiang            Manufacturing                  32.53%                        Equity method
Ltd.

Instructions if the holding proportion differs from the voting rights proportion over the associates or joint ventures :

     [Note]The Company holds 26.00% and 31.85% equity of Shanghai Reno Opto-electronics Technology Co.,
Ltd. and Changzhou Stabila Las