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
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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
87
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
88
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:
89
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
90
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
91
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
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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
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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
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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
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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.
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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
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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
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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
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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.
115
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
126
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual
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
127
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.
129
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.
130
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
Section IX Bond Related information
□ Applicable √ Not Applicable
131
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
133
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
134
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
135
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
136
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
137
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
138
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
139
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
140
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
141
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
142
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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)
143
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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
144
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
145
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
146
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):
147
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
148
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
151
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
153
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
154
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
156
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
157
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
161
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
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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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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
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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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
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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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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(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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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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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
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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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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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
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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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
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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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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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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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
205
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
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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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
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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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
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
211
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
212
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
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
213
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
214
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
215
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
216
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
217
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
218
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
219
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
221
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
223
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
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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
240
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.,
241
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
242
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
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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
256
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
260
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
261
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
262
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
264
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
266
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
267
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
268
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
269
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
271
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)
272
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
273
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
274
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
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
275
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
276
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
277
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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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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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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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-- 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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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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(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
284
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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
285
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
286
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
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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 Laser Instrument Company Limited, respectively, through Changzhou Huada Kejie
Opto-electro Instrument Co., Ltd.
Basis for significant influence over an entity on which the Company held less than 20% voting rights:
The Company holds 19.00% equity of Ningbo Donghai Bank Co., Ltd., making it its second largest
shareholder. The Company has representatives in its Board of Directors who have the power to participate in
decision-making on its financial and operating policies.
289
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(2) Main financial information of significant joint ventures
Unit: Yuan
Closing balance/Current period amount Opening balance/Previous period amount
Current assets
Including:Cash and cash equivalents
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Minority interests
Equity attributable to shareholders of the
parent company
Share of net assets based on percentage of
shareholding
Adjustments
--goodwill
--Unrealized profit on internal transactions
--Other
Carrying value of equity investments in
joint ventures
Fair value of equity investments in joint
ventures for which publicly quoted prices
exist
Operating income
Finance costs
Income tax expense
Net profit
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income
Dividends received from joint ventures for
this year
290
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
Other instructions
(3) Main financial information of significant associates
Unit: Yuan
Closing balance/Current period amount Opening balance/Previous period amount
Hangzhou Zhongce Hangzhou Zhongce
Zhejiang Hangcha Zhejiang Hangcha
Haichao Enterprise Haichao Enterprise
Holding Co., Ltd. Holding Co., Ltd.
Management Co., Ltd. Management Co., Ltd.
Current assets 7,418,780,740.77 14,948,356,801.94 5,266,602,511.85 11,919,303,863.72
Non-current assets 3,731,133,085.89 19,969,457,376.52 3,320,081,434.69 17,365,495,939.83
Total assets 11,149,913,826.66 34,917,814,178.46 8,586,683,946.54 29,284,799,803.55
Current liabilities 3,477,650,918.98 15,446,567,589.35 2,699,270,768.05 11,153,905,066.11
Non-current liabilities 961,010,530.12 7,448,879,770.24 66,317,470.95 6,656,783,282.56
Total liabilities 4,438,661,449.10 22,895,447,359.59 2,765,588,239.00 17,810,688,348.67
Minority interests 3,593,193,876.73 7,467,456,772.20 3,212,910,476.72 6,674,388,762.33
Equity attributable to
shareholders of the 3,118,058,500.83 4,554,910,046.67 2,608,185,230.82 4,799,722,692.55
parent company
Share of net assets based
on percentage of 623,611,700.17 1,268,865,846.61 521,637,046.16 1,169,932,406.31
shareholding
Adjustments 108,979,700.00 108,979,700.00
--Goodwill 108,979,700.00 108,979,700.00
--Unrealized profit on
internal transactions
--Other
Carrying amount of
equity investments in 732,591,400.17 1,268,865,846.61 630,616,746.16 1,169,932,406.31
associates
Fair value of equity
investments in associates
for which publicly
quoted prices exist
Operating income 14,493,418,510.34 30,285,690,427.77 11,455,727,931.42 28,148,326,923.56
Net profit 488,571,114.34 556,078,278.04 396,530,359.13 720,788,625.43
Net profit from
291
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
discontinued operations
Other comprehensive
-25,326,711.49 -193,723,391.25 -10,646,148.27 -90,602,055.61
income
Total comprehensive
463,244,402.85 362,354,886.79 385,884,210.86 630,186,569.82
income
Dividends received from
20,000,000.00
associates for this year
Other instructions
(4) Aggregate financial information of immaterial joint ventures and associates
Unit: Yuan
Closing balance/Current period amount Opening balance/Previous period amount
Joint ventures: -- --
Total of the following in proportion to
-- --
shareholding
Associates: -- --
Total investment carrying amount 352,485,457.57 407,329,329.45
Total amount of the following items in
-- --
proportion to shareholding
--Net profit 1,101,187.62 5,531,925.43
--Other comprehensive income 1,477,170.16 -393,307.40
-- Total comprehensive income 2,578,357.78 5,138,618.03
Other instructions
(5) Instructions of significant restrictions on the ability of joint ventures or associates to transfer funds to
the Company
(6) Excess losses incurred by joint ventures and associates
Unit: Yuan
Accumulated Unrecognized current period Unrecognized losses at the
Associates unrecognized prior losses (netprofit balance sheet date
period losses shared in currentperiod)
Shanghai Reno
Opto-electronics Technology -700,243.68 6,412.23 -693,831.45
Co.,Ltd.
Other instructions
292
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
(7) Unconfirmed commitment related to the joint venture investment
(8) Contingent liabilities related to the joint venture and associates investment
4. Major joint operations
Joint operations Main locations Registered address Business nature Holding proportion /Share
name
Direct Indirect
Instructions if the shareholding proportion differs from the voting rights proportion over the joint operations:
If the joint operation is a single entity, notify the basis classified as joint operation:
Other instructions
5.The equity of the structured entity not involved in the scope of consolidation
Related instructions for the structured entity not involved in the scope of consolidation.
6. Others
X. Risks related to financial instruments
In risk management, the Company aims to seek the appropriate balance between the risks and benefits from
its use of financial instruments and to mitigate the adverse effects that the risks of financial instruments have on
the Company’s financial performance, so as to maximize the profits of shareholders and other equity investors.
Based on such risk management objectives, the Company’s risk management policies are established to identify
and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and
adherence to limits on a timely and reliable basis.
The Company has exposure to the following risks from its use of financial instruments, which mainly include:
credit risk, liquidity risk, and market risk. The Management has deliberated and approved policies concerning
such risks, and details are:
(I) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by
failing to discharge an obligation.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each balance sheet date, the Company assesses whether the credit risk on a financial instrument has
increased significantly since initial recognition. When assessing whether the credit risk has increased significantly
since initial recognition, the Company takes into account reasonable and supportable information, which is
available without undue cost or effort, including qualitative and quantitative analysis based on historical data,
external credit risk rating, and forward-looking information. The Company determines the changes in default risk
of financial instruments during the estimated lifetime through comparison of the default risk at the balance sheet
date and the initial recognition date, on an individual basis or a collective basis
The Company considers the credit risk on a financial instrument has increased significantly when one or
more of the following qualitative and quantitative standards are met:
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1)Quantitative standard mainly relates to the scenario in which, at the balance sheet date, the probability of
default in the remaining lifetime has risen by more than a certain percentage compared with the initial recognition
2)Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial
position, present or expected changes in technology, market, economy or legal environment that will have
significant adverse impact on the debtor’s repayment ability
(2) Definition of default and credit-impaired assets
A financial instrument is defined as defaulted when one or more following events have occurred, of which
the standard is consistent with that for credit-impairment:
1)significant financial difficulty of the debtor；
2)a breach of binding clause of contract；
3)it is very likely that the debtor will enter bankruptcy or other financial reorganization；
4)the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty,
having granted to the debtor a concession(s) that the creditor would not otherwise consider。
2.Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default, loss rate of
default, and exposure to default risk. The Company develops a model of the probability of default, loss rate of
default, and exposure to default risk on the basis of quantitative analysis of historical data (e.g. counterparty rating,
guarantee measures and collateral type, payment method, etc.) and forward-looking information。
3.Please refer to section V (I) 4, 5, and 7 of the notes to the financial statements for details on the
reconciliation table of openingbalance and closing balance of provision for losses of financial instrument
4.Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to
control such risks, the Company has taken the following measures
(1)Cash and bank balances
The Company deposits its bank balances and other cash and bank balances in financial institutions with
relatively high credit levels, hence, its credit risk is relatively low.
(2)Receivables
The Company performs credit assessment on customers using credit settlement on a continuous basis. The
Company selects credible and well-reputed customers based on credit assessment result, and conducts ongoing
monitoring on balance of receivables, to avoid significant risks in bad debts.
As the Company only conducts business with credible and well-reputed third parties, collateral is not
required from customers. The Company manages credit risk aggregated by customers. As of December 31, 2021,
the Company has certain concentration of credit risk, and 37.03% (December 31, 2020: 36.10%) of the total
accounts receivable was due from the five largest customers of the Company. The Company held no collateral or
other credit enhancement on balance of receivables.
The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial
asset at the balance sheet.
(II) Liquidity risk
Liquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations
associated with cash or other financial assets settlement, which is possibly attributable to failure in selling
financial assets at fair value on a timely basis, or failure in collecting liabilities from counterparties of contracts, or
early redemption of debts, or failure in achieving estimated cash flows.
In order to control such risk, the Company comprehensively utilized financing tools such as notes settlement,
bank borrowings, etc. and adopts long-term and short-term financing methods to optimize financing structures,
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
and finally maintains a balance between financing sustainability and flexibility. The Company has obtained credit
limit from several commercial banks to meet working capitalrequirements and expenditures.
Financial liabilities classified based on remaining time period till maturity
Item Closing balance
Carrying amount Contract amount not Within 1 year 1-3 year(s) Over 3 years
yet discounted
Bank 3,055,148,295.97 3,139,533,799.57 2,057,990,775.73 494,435,452.74 587,107,571.10
borrowings
Trading 978,031.91 978,031.91 978,031.91
financial
liabilities
Notes payable 51,728,000.00 51,728,000.00 51,728,000.00
Accounts 1,640,430,929.84 1,640,430,929.84 1,640,430,929.84
payable
Other payables 676,502,987.21 676,502,987.21 676,502,987.21
Lease 414,921,112.20 422,186,814.93 125,724,601.18 140,362,949.63 156,099,264.12
obligations
Subtotal 5,839,709,357.13 5,931,360,563.46 4,553,355,325.87 634,798,402.37 743,206,835.22
Item Opening balance
Carrying amount Contract amount not Within 1 year 1-3 year(s) Over 3 years
yet discounted
Bank 1,720,841,106.36 1,859,165,409.05 1,334,629,400.52 441,933,719.49 82,602,289.04
borrowings
Notes payable 24,913,000.00 24,913,000.00 24,913,000.00
Accounts 1,168,327,985.88 1,168,327,985.88 1,168,327,985.88
payable
Other payables 26,425,047.57 26,425,047.57 26,425,047.57
Lease 271,850,870.28 271,850,870.28 25,546,871.20 48,895,764.20 197,408,234.88
obligations
Long-term 1,499,174.07 1,499,174.07 703,214.57 795,959.50
payables
Bonds payable 799,729,005.89 1,121,084,289.21 25,116,810.36 109,548,195.96 986,419,282.89
Subtotal 4,013,586,190.05 4,473,265,776.06 2,605,662,330.10 601,173,639.15 1,266,429,806.81
(III) Market risk
Market risk is the risk that the Company may encounter fluctuation in fair value or future cash flows of
financial instruments due to changes in market price. Market risk mainly includes interest risk and foreign
currency risk.
1. Interest risk
Interest risk is the risk that an enterprise may encounter fluctuation in fair value or future cash flows of
financial instruments due to changes in market interest. The Company’s fair value interest risks arise from
fixed-rate financial instruments, while the cash flow interest risks arise from floating-rate financial instruments.
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The Company determines the proportion of fixed-rate financial instruments and floating-rate financial instruments
based on the market environment, and maintains a proper financial instruments portfolio through regular review
and monitoring. The Company’s interest risk in cash flows relates mainly to bank borrowings with floating
interest rate.
As of December 31, 2021, balance of borrowings with interest accrued at floating interest rate totaled
RMB929,187,140.36 (December 31, 2020: RMB1,009,781,140.56). If interest rates had been 50 basis points
higher/lower and all other variables were heldconstant, the Company’s gross profit and equity will not be
significantly affected
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in fair value or future cash flows of financial
instrument resulted from changes in exchange rate. The Company’s foreign currency risk relates mainly to foreign
currency monetary assets and liabilities. When short-term imbalance occurred to foreign currency assets and
liabilities, the Company may trade foreign currency at market exchange rate when necessary, in order to maintain
the net risk exposure within an acceptable level.
Please refer to section V (IV) 2 of notes to financial statements for details in foreign currency financial assets
and liabilities at the end of the period
IX. Fair value disclosure
1. Details of fair value of assets and liabilities at fair value at the balance sheet date
Unit: Yuan
Fair value as of the balance sheet date
Item Level 1 fair value Level 2 fair value Level 3 fair value
Total
measurement measurement measurement
I. Continuing fair value
-- -- -- --
measurement
(I) Trading financial assets 9,227,687.75 4,330,070.00 13,557,757.75
1. Financial assets at fair
value through profit or 9,227,687.75 4,330,070.00 13,557,757.75
loss
(2) Investments in equity
9,227,687.75 9,227,687.75
instruments
(3) Derivative financial
4,330,070.00 4,330,070.00
assets
(3) Investments in other
16,550,000.00 16,550,000.00
equity instruments
(iv) Receivables financing 559,020,827.52 559,020,827.52
Total assets continuously
9,227,687.75 4,330,070.00 575,570,827.52 589,128,585.27
measured at fair value
(vi) Financial liabilities 978,031.91 978,031.91
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
for trading
Derivative
978,031.91 978,031.91
financial liabilities
Total liabilities measured
at fair value on a 978,031.91 978,031.91
continuing basis
II. Non-continuing fair
-- -- -- --
value measurements
2. Basis for determining level 1 fair value at recurring and non-recurring fair measurement
Debt instrument investments are measured using market quotes as a reasonable estimate of fair value.
3. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 2 fair value
at recurring and non-recurring fair measurement
Derivative financial assets are measured using valuation notices provided by banks and securities companies
as a reasonable estimate of fair value.
4. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 3 fair value
at recurring and non-recurring fair measurement
1. As receivables financing is within 1 year, whose time value has no significant impact on the fair value, it is
recognized that the fair value of receivables financing mentioned above is approximately equal to its carrying
amount.
2. Equity instrument investments and other equity instrument investments (Hangzhou Haibang Xinhu Talent
Venture Capital Investment Partnership (LP)), are measured using investment cost as a reasonable estimate of fair
value, based on overall consideration of business environment and operating conditions.
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5.Continuous third level fair value measurement items, adjustment information between opening balance
and closing balance and sensitivity analysis of the non-observable parameter
6.Continuous fair value measurement items, the reasons for conversion and the policy for conversion time
determination if it occurs different levels’ conversion during current period
7.Valuation techniques changing and its reason in current period
8.The fair value of financial assets and financial liabilities not measured with fair value.
9. Others
XII. Related party relationships and transactions
1. Parent Company
Holding proportion Voting right
Place of Business nature Registered
Parent over the Company proportion over the
registration capital
company (%) Company (%)
Greatstar Holding
100 million yuan 40.56% 40.56%
Group.Ltd Hangzhou Industrial investment
Instructions for the parent company:
The Company’s ultimate controlling party is Qiu Jianping.
The ultimate controller of the enterprise is:
Other remarks:
2. Subsidiaries of the Company
See note IX, Interest in significant subsidiaries.
3. Associates and joint ventures of the Company
See note IX, Interest in joint venture and associates.
The information of other associates or joint ventures with related party transactions to the Company or existing carrying amount with
the Company in previous periods are as follows:
Associates/ joint ventures names Relationship with the Company
Other instructions
4. Other related parties of the Company
Other related parties Relationships with the Company
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Wang Lingling Actual control person spouse, act in concert person
Hangzhou Great Star Precision Machinery Co., Ltd. Controlled by the same actual controller
Hangcha Group Co., Ltd.and its affiliated companies Controlled by the same actual controller
Zhongce Rubber Group Company Limited.and its affiliated Companies controlled by the Company's associate, Hangzhou
companies Zhongce Haichao Enterprise Management Co.,Ltd.
Hangzhou Weiming Investment Management Co., Ltd. The original joint venture of the company
Other instructions
5. Related party transactions
(1) Purchase and sale of goods, rendering and receiving of services
Purchase of goods and receiving of services
Unit: Yuan
Related parties Content of Current period Approval amount Exceed the limitation Previous period
transaction amount or not amount
Shanghai Reno
Opto-electronics
7,192.04 100,000.00 No 70,094.25
Technology Co., Material
Ltd.
Zhejiang Guozi Product and
785,830.34 15,000,000.00 No 1,840,830.51
Robotics Co., Ltd. service
Hangcha Group Forklift, spare
Co., Ltd. and its parts and 9,749,969.30 30,770,000.00 No 6,054,457.09
affiliated companies maintenance
Hangcha Group
Automatic storage
Co., Ltd. and its 781,280.21 30,770,000.00 No 1,296,460.17
system
affiliated companies
Changzhou Stabila
Laser Instrument Material 10,000,000.00 No 129,853.95
Company Limited
Changzhou Stabila
Laser Instrument Labour service 10,000,000.00 No 23,722.40
Company Limited
Zhongce Rubber
Group Company Spare parts and
1,050,065.29 400,000,000.00 No 612,489.60
Limited.and its maintenance costs
affiliated companies
Hangzhou Weina Software and
37,168.14 500,000.00 No
Technology Co., hardware
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
Ltd.
No
Sale of goods and rendering of services
Unit: Yuan
Related parties Content of transaction Current period amount Previous period amount
Changzhou Stabila Laser Laser measurement product 8,802,699.15 5,003,092.51
Instrument Company Limited
Changzhou Stabila Laser Water and electricity
117,404.10 123,594.90
Instrument Company Limited
Changzhou Stabila Laser Consulting service
2,520,746.47 2,593,278.97
Instrument Company Limited
Changzhou Stabila Laser Labour service
29,940.00
Instrument Company Limited
Shanghai Reno Opto-electronics
Sale of goods 1,937,505.66
Technology Co., Ltd.
Zhongce Rubber Hand tool
14,409.98 301,911.46
GroupCompany Limited
Hangcha Group Co., Ltd. and Hand tool and spare parts 16,188,555.01 15,177,595.81
its affiliated companies
Hangcha Group Co., Ltd. and Operating service
2,535,515.08 1,250,867.26
its affiliated companies
Zhejiang Guozi Robotics Co., Hand tool
9,957,102.80 4,387,224.01
Ltd.and its affiliated companies
Hangzhou Weina Technologies Technical service
75,943.40
Co., Ltd.
Instructions for purchase and sale of goods, rendering and receiving of services
(2) Situation for related entrusted management/contracting and entrusting management/subcontracting
The situation for entrusted management/contracting
Unit: Yuan
Entrusting
Name of the Name of the Asset types for The starting date The expiry date Pricing basis for income/contractin
entrusting entrusted entrusted/contract of of entrusting g income
party/subcontract party/contractor ing entrusting/contrac entrusted/contract income/contractin confirmed in
or ting ing g income current period
Instructions for related entrusting/contracting situation
The situation table for entrusting management/subcontracting
Unit: Yuan
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
Name of the The starting date The expiry date Pricing basis for Entrusted
entrusting Name of the Asset types for of of entrusted fee/subcontractin
party/subcontract entrusted entrusting/subcon entrusting/subcon entrusting/subcon fee/subcontractin g fee confirmed
or party/contractor tracting tracting tracting g fee in current period
Instructions for related management/subcontracting situation
(3) Related party leases
The Company as the lessor:
Unit: Yuan
Lessees Types of asset leased Lease income for Year 2021 Lease income for Year 2021
Changzhou Stabila Laser
Buildings 176,106.15 185,392.35
Instrument Company Limited
The Company as the lessee:
Unit: Yuan
Lessor Types of asset leased Lease expenses for Year 2021 Lease expenses for Year 2020
Hangzhou Great Star Precision
Buildings 1,264,476.19 1,296,000.00
Machinery Co., Ltd.
Hangcha Group Co., Ltd. and
its affiliated company Shanghai
Transport facilities 243,840.42 241,057.06
Hangcha Forklift Sales Co.,
Ltd.
Instructions for related party leases
(4) Related party guarantee
The Company as the guarantor
Unit: Yuan
Guaranteed party Amount Starting date Maturity Performance completed
or not
The Company as the guaranteed party
Unit: Yuan
Guarantor Amount Starting date Maturity Performance completed
or not
Instructions for related party guarantee:
The Company issued letter of guarantee for bank loans of GreatStar Europe AG, a wholly-owned subsidiary,
and GreatStar Greatstar Holding Group. Ltd provided suretyship guarantee for the letter of guarantee issued by the
Company. As of December 31, 2021, the balance of bank loans under the letter of guarantee totaled EUR
34,000,000.00, with payment maturity between February 28, 2022 and June 26, 2023.
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(5) Fund borrowing from related parties
Unit: Yuan
Related party Amount Starting date Maturity Notes
Borrow
As resolved at the
fifteenth meeting of the
fifth session of the Board
of Directors and the
second extraordinary
general meeting of 2021,
the Company accepts
financial assistance from
Qiu Jianping, the de facto
controller, and Wang
Lingling, the person
acting in concert with
him, in the principal
Mr.Qiu Jianping and his amount of not more than
concerted action person, 583,000,000.00 RMB583 million, for a
Ms.Wang Lingling term of not more than
one year from the date of
approval at the general
meeting of the Company,
which can be used on a
revolving basis during
the validity period, and
the Company can repay
the amount in advance
according to actual
needs. The interest rate is
not higher than the
interest rate of bank
loans in the same period.
Lend
(6) Assets exchange or debt restructuring between the related parties
Unit: Yuan
Related party Related party transaction items Current period amount Previous period amount
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(7) Key management’s emoluments
Unit: Yuan
Item Current period amount Previous period amount
Key management’s emoluments 12,192,656.29 9,162,360.40
(8) Other transactions with related parties
6. Balance due to or from related parties
(1) Receivables
Unit: Yuan
Closing balance Opening balance
Item Related Party Provision for bad Provision for bad
Book balance Book balance
debts debts
Changzhou Stabila
Receivable Laser Instrument 8,233,675.28 411,683.76 2,161,820.67 108,091.03
Company Limited
Shanghai Reno
Opto-electronics
Receivable 3,779,983.57 188,999.18 1,684,295.07 84,214.75
Technology Co.,
Ltd.
Hangcha Group Co.,
Receivable 1,229,141.76 61,457.09 1,903,592.60 95,179.63
Ltd. and its affiliates
Zhejiang Guozi
Receivable Robotics Co., Ltd. 10,664,320.29 533,216.01 3,390,261.58 169,513.08
and its affiliates
Subtotal 23,907,120.90 1,195,356.04 9,139,969.92 456,998.49
Receivables
Zhejiang Guozi
financing-Bank 0.00 0.00 2,800,000.00 0.00
Robotics Co., Ltd.
acceptance
Subtotal 0.00 0.00 2,800,000.00 0.00
Zhejiang Guozi
Notes receivable 20,702.51 0.00 0.00
Robotics Co., Ltd.
Subtotal 20,702.51 0.00 0.00
Zhejiang Guozi
Prepayments 0.00 0.00 414,974.87 20,748.74
Robotics Co., Ltd.
Subtotal 0.00 0.00 414,974.87 20,748.74
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
Hangzhou Weiming
Investment
Other receivables 6,160,202.73 308,010.14
Management Co.,
Ltd.
Subtotal 6,160,202.73 308,010.14
(2) Payables
Unit: Yuan
Item Related Party Closing balance Opening balance
Hangzhou Zhongce Auto Space
Accounts payable 2,064.00 156,708.54
Automobile Service Co., Ltd.
Zhejiang Guozi Robotics Co.,
Accounts payable 920,220.37 3,800,654.70
Ltd. and its affiliates
Hangcha Group Co., Ltd. and
Accounts payable 2,595,530.60 6,305,294.00
its affiliates
Hangzhou Great Star Precision
Accounts payable 124,000.00 240,500.00
Machinery Co., Ltd.
Subtotal 3,641,814.97 10,503,157.24
Hangzhou Great Star Precision
Other payables 0.00 12,000.00
Machinery Co., Ltd.
Qiu Jianping, Wang Lingling 583,570,527.78
Subtotal 583,570,527.78 12,000.00
7. Related party commitments
8. Other
XIII. Share-based payment
1. Overall situation of Share-based payment
□ Applicable √ Not Applicable
2. Equity-settled share-based payment
□ Applicable √ Not Applicable
3. Cash-settled share-based payment
□ Applicable √ Not Applicable
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
4. Amendment and termination of share-based payment
5. Others
XIV. Commitments and contingencies
1. Important commitments
Significant commitments on balance sheet date
As of the approved issuing date of this report, the Company has no significant commitments to be disclosed
2. Contingencies
（1）Important contingent matters as at the balance sheet date
As of the approved issuing date of this report, the Company has no significant contingencies to be disclosed.
（2）The Company has no important contingent matters to disclose, and also should make illustration
There are no significant contingent matters to be disclosed.
3. Other
XV. Events after the balance sheet date
1. Important non-adjustment matters
Unit: Yuan
Amount of impacts on financial Reasons for failure to estimate
Item
Content position and operating results impact
2. Distribution of profits
Unit: Yuan
3. Sales return
4. Other events after the balance sheet date
Profit distribution after the balance sheet date
On April 11, 2022, the 8th meeting of the 5th session of the Board of Directors of the Company considered
and approved the "Proposal on the Company's Profit Distribution Proposal for the Year 2021". In 2021, the
Company will not pay cash dividends, will not send bonus shares, will not increase capital by capital reserve, and
the remaining undistributed profits will be carried forward to the next year.
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
XVI. Other significant matters
1. Accounting error correction for previous period
(1) The retrospectively adjusted method
Unit: Yuan
Content of accounting error Processing procedure Each effected report items of Accumulative effected amount
correction comparative period
(2) Prospective application method
Content of accounting error correction Approval procedure Reason
2.Debt restructuring
3.Assets Exchange
（1）Non-cash Assets Exchange
（2）Other assets Exchange
4.Annuity Plan
5. Discontinued operations
Unit: Yuan
Net discontinued
operations profit
Item Revenue Expenses Profit before tax Income tax Net profit attributable to
owners of the
parent company
Other instructions
6. Segment information
(1) Determination basis and accounting policy of the reportable segments
Reportable segments are identified according to the structure of the Company’s internal organization,
management requirements and internal reporting system, and based on product segments. Assets and liabilities
shared by different segments are allocated among segments proportionate to their respective sizes.
The Company determines the reporting segments on the basis of the regional segments, the main operating
revenue and the main operating cost shall be divided by the actual sales place, and the assets and liabilities shall
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
be divided by the location of the operating entity.
(2) Financial information of product segments
Unit: Yuan
Laser
Item Hand Tools Power Tools Storage PPE Offset Total
Measurement
Revenue from
6,540,834,718. 1,021,102,413. 2,370,715,437. 10,849,925,564
main 888,587,229.84 28,685,764.76
85 74 22 .41
operations
Cost of main 4,716,308,916. 1,959,219,152. 8,147,389,910.
799,043,331.71 648,486,058.41 24,332,451.85
operations 32 16 45
Total assets 13,179,632,291 1,179,709,194. 2,304,979,653. 17,307,154,886
638,231,863.17 4,601,884.62
.26 26 36 .67
Total liabilities 4,253,567,577. 1,116,595,607. 6,493,865,095.
213,533,614.09 910,168,297.07
01 66 83
(3) If the Company has no reporting segments or cannot disclose the total assets and liabilities of each
reporting segments, the reasons shall be explained
(4) Other instructions
7.Other important transactions and matters that can affect investor decision - making 8、Others
8.Other
(II) Lease
1. The company as lessee
(1)Please refer to section V (I) 17 of notes to financial statements for details on right-of-use assets.
(2) Please refer to section III (29) of notes to financial statements for details on the Company’s accounting
policies on short- term leases and leases for which the underlying asset is of low value. The amounts of short-term
leases and low-value asset leases included into profit or loss are as follows
Item Current period amount Amount of the same
period last year
Short term rental fees 44,003,860.27 582,301.10
Low-value asset lease fee (except for short-term lease) 657,286.80 228,497.90
Total 44,661,147.07 810,799.00
(3) Current profit and loss and cash flow related to the lease
Item Current period amount
Interest expense for the lease liability 9,721,218.32
Total cash outflow related to the lease 59,939,559.59
(4) Please refer to the description of note VIII (2) of the lease liabilities and the corresponding liquidity risk
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
management.
2. The company as a lessor
(1) Operating lease
1) Lease income
Item Current period amount Amount of the same
period last year
Lease income 18,779,421.23 11,727,101.90
2) Operating leased assets
Item Closing balance
Fixed assets 6,623,884.70
Investment real estate 127,058,966.69
Subtotal 133,682,851.39
Please refer to Note V(1) 15 of the operating leased fixed assets.
3) Uncancellation of the future outstanding lease proceeds under the lease contract with the lessee
Remaining period Closing balance Opening balance
Within 1 year 17,983,746.50 515,963.00
Over 1 year 157,079,216.00 523,333.90
Total 175,062,962.50 1,039,296.90
(2) Finance lease
1) Current period profit or loss related to finance lease
Item Current period amount Amount of the same
period last year
Finance income on the net investment in the lease 84,811.20 2,255,495.40
2) Undiscounted lease payments to be received arising from non-cancellable leases based on the lease
contract signed with lessee
Remaining years Closing balance Opening balance
Within 1 year 90,708.80 95,821.70
1-2 years 90,708.80 95,821.70
2-3 years 90,708.80 95,821.70
3-4 years 90,708.80 95,821.70
4-5 years 90,708.80 95,821.70
Over 5 years 97,686.40 204,701.80
Total 551,230.40 683,810.30
3) Reconciliation of undiscounted lease payments to net investment in the lease
Item Closing balance Opening balance
Undiscounted lease payments 551,230.40 683,810.30
Less: Unrealized finance income relating to lease payments 14,135.20 17,021.38
Net investment in the lease 537,095.20 666,788.92
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
XVII. Notes to the Principal Items in the Financial Statements of the Parent Company
1. Accounts receivables
(1) Accounts receivables disclosed by categories
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
Among which:
Accounts receivable
with provision for 1,030,06 57,148,7 972,916,0 1,352,861 77,001,55 1,275,860,2
100.00% 5.55% 100.00% 5.69%
bad debts by 4,717.88 16.92 00.96 ,821.37 6.87 64.50
portfolio
Among which:
1,030,06 57,148,7 972,916,0 1,352,861 77,001,55 1,275,860,2
Total 100.00% 5.55% 100.00% 5.69%
4,717.88 16.92 00.96 ,821.37 6.87 64.50
Provision made on an individual basis：
Unit: Yuan
Closing balance
Name
Book balance Provision for bad debts Provision proportions Provision reason
Provision made on a portfolio basis：
Unit: Yuan
Closing balance
Name
Book balance Provision for bad debts Provision proportions
Age portfolio 1,030,064,717.88 57,148,716.92 5.55%
Total 1,030,064,717.88 57,148,716.92 --
Illustration of this portfolio recognition basis:
Provision made on a portfolio basis：
Unit: Yuan
Closing balance
Name
Book balance Provision for bad debts Provision proportions
Illustration 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, please
309
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
refer to the disclosure of other receivables to disclose the relevant information on the provision for bad debts:
□ Applicable √ Not Applicable
Disclosure as account receivable aging
Unit: Yuan
Age Book balance
Within 1 year(including 1 year) 1,007,048,960.45
1-2 years 10,919,739.81
2-3 years 3,922,817.49
Over 3 years 8,173,200.13
3-4 years 2,354,257.02
4-5 years 3,210,977.60
Over 5 years 2,607,965.51
Subtotal 1,030,064,717.88
(2) Provision , recovered or reversed of the bad debt in current period
Provision for bad debts in current period:
Unit: Yuan
Increase/Decrease Amount
Categories Opening balance Closing balance
Provision Reversal Write-off Others
Within 1 year 66,487,243.46 -16,134,795.49 50,352,447.97
1-2 year(s) 839,468.91 252,505.11 1,091,974.02
2-3 years 471,887.20 312,676.31 784,563.51
3-4 years 970,066.93 -263,789.82 706,277.11
4-5years 896,380.23 709,108.57 1,605,488.80
Over 5years 7,336,510.14 -4,081,104.43 647,440.20 2,607,965.51
Total 77,001,556.87 -19,205,399.75 0.00 647,440.20 0.00 57,148,716.92
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
Item Written-off amount
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
Including the major written off of the account receivables:
Unit: Yuan
Company name Account Receivable Write-off amount Write-off reason Write-off procedure Related party or not
categorized by
nature
Instructions for Written off the account receivables:
(4) Details of the top 5 debtors with largest balances
Unit: Yuan
Debtors Closing balance of Account %of the total closing balance Closing balance of provision for
Receivable 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 RMB 614,740,724.38, accounting for 59.68 % of the total closing balance
of accounts receivable, and provision for bad debts made thereon totaled RMB30,761,781.69.
2. Other receivables
Unit: Yuan
Item Closing balance Opening balance
Other receivables 1,458,883,819.83 883,363,518.44
Total 1,458,883,819.83 883,363,518.44
（1）Interest receivables
1）Interest receivables on categories
Unit: Yuan
Item Closing balance Opening balance
2) The major overdue interest receivables
Unit: Yuan
Whether there is an
Debtors Closing balance Overdue date Overdue reason
impairment and its
311
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
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
Accounts receivable from related parties
1,519,230,520.47 903,148,614.64
within the scope of the merger
Export tax rebates 22,067,723.30 25,792,468.24
Equity disposal payment receivable 6,160,202.73
Security deposits 5,173,827.26 13,833,823.47
Temporary advance payment receivable 1,175,931.64 966,599.78
Employee petty cash 188,025.00
Other 396,240.11
Total 1,553,808,205.40 944,325,771.24
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
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 45,880,793.31 2,495,511.26 12,585,948.23 60,962,252.80
Opening balance in the
—— —— —— ——
current period
Provision made in the
30,368,134.51 -2,277,997.01 5,871,995.27 33,962,132.77
current period
Closing balance 76,248,927.82 217,514.25 18,457,943.50 94,924,385.57
The book balance movements of the material provision for bad debts in current period
□ Applicable √ Not Applicable
Disclosure as account receivable aging
Unit: Yuan
Age Book balance
Within 1 year(including 1 year) 1,551,627,863.31
1-2 years 1,268,167.51
2-3 years 659,300.00
Over 3 years 252,874.58
3-4 years 92,326.25
4-5 years 125,000.00
Over 5 years 35,548.33
Total 1,553,808,205.40
3) Provision , recovered or reversed of the bad debt in current period
Provision for bad debts in current period:
Unit: Yuan
Opening Increase/Decrease Amount
Categories Closing balance
balance Provision Reversal Write-off Others
Portfoliogrouped
with balances due
58,798,022.8
from related parties 34,122,072.66 92,920,095.47
1
withintheconsolidati
on scope
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
Portfoliogroupedwit
hages
Within 1 year 2,010,479.16 -390,612.02 1,619,867.14
1-2 year(s) 70,202.50 56,614.25 126,816.75
2-3 years 21,000.00 110,860.00 131,860.00
3-4 years 37,500.00 -9,802.12 27,697.88
4-5 years 10,500.00 52,000.00 62,500.00
Over 5years 14,548.33 21,000.00 35,548.33
60,962,252.8
Total 33,962,132.77 94,924,385.57
0
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
Debtors Nature of Written off amount Written off reason Written off procedure Related party or not
receivables
Instructions for written off other Accounts receivable
5) Details of the top 5 debtors with largest balances
Unit: Yuan
Debtors Nature of Closing balance Ages Proportion to the Provision for bad
receivables total balance of other debts
receivables (%)
Balance due from
related parties
Great Star Tools
within 616,542,888.20 Within 1 year 39.68% 30,827,144.41
USA,INC.
theconsolidation
scope
Balance due from
Hong Kong GreatStar related parties
317,883,356.35 Within 1 year 20.46% 15,894,167.82
International Ltd within
theconsolidation
314
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
scope
Balance due from
related parties
Hangzhou United
within 157,630,944.24 Within 1 year 10.14% 7,881,547.21
Machinery Co., Ltd.
theconsolidation
scope
Balance due from
Haining GreatStar related parties
Intelligent Equipment within 130,000,000.00 Within 1 year 8.37% 6,500,000.00
Co., Ltd. theconsolidation
scope
Balance due from
related parties
Guangdong Shiwanke
within 55,000,000.00 Within 1 year 3.54% 2,750,000.00
Electric Co., Ltd
theconsolidation
scope
Total -- 1,277,057,188.79 -- 82.19% 63,852,859.44
6) Other Accounts receivable related to government grants
Unit: Yuan
Debtors Government subsidy Closing balance Ages Estimated collection date,
amount, and 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:
3. Long-term equity investments
Unit: Yuan
Closing balance Opening balance
Item Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Investmentsin
4,157,167,492.92 4,157,167,492.92 2,949,758,632.92 2,949,758,632.92
subsidiaries
Investmentsin
joint ventures and 2,352,069,024.80 2,352,069,024.80 2,205,406,001.38 2,205,406,001.38
associates
315
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
Total 6,509,236,517.72 6,509,236,517.72 5,155,164,634.30 5,155,164,634.30
(1) Investments in subsidiaries
Unit: Yuan
Opening Increase/ Decrease Closing Closing balance
Investees balance(Carryi Increase Decrease Provision for Others balance(Carryi of provision for
ng amount) impairment ng amount) impairment
Longyou Yiyang
48,437,846.12 48,437,846.12
ForgingCo., Ltd.
Hangzhou
GreatStar
3,300,000.00 106,500.00 3,406,500.00
Sheffield Tools
Co., Ltd.
Hangzhou
United Electric
21,185,561.86 21,185,561.86
Manufacture
Co., Ltd.
Hangzhou
UnitedTools 12,804,728.00 12,804,728.00
Co., Ltd.
Hangzhou
GreatStar
5,000,000.00 5,000,000.00
Sheffield
TradingCo.,Ltd.
Ningbo Fenghua
Great Star Tools 22,558,141.65 22,558,141.65
Co., Ltd.
Zhejiang
GuoxinTools 25,750,000.00 25,750,000.00
Co., Ltd.
Zhejiang Great
464,800,000.0
Star Tools Co., 464,800,000.00
0
Ltd.
Hangzhou Juye 120,000,000.0
120,000,000.00
Tools Co., Ltd. 0
Hangzhou Great
Star Tools Co., 63,772,246.86 63,772,246.86
Ltd.
Hong Kong 227,854,794.6 669,838,900.0 897,693,694.66
316
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
Great Star 6 0
International
Co., Ltd.
Changzhou
HuadaKejie
200,864,082.5
Opto-electro 200,864,082.56
6
Instrument Co.,
Ltd.
Hangzhou
GreatStarIntellig
ent Technology 22,000,000.00 22,000,000.00
Co.,
Ltd.
Hangzhou Ole-
Systems Co., 9,600,000.00 9,600,000.00
Ltd.
Great Star Tools 627,095,000.0 328,565,000.0
955,660,000.00
USA, Inc 0 0
Hangzhou
GreatStar
4,250,000.00 4,250,000.00
Craftsman Tools
Co., Ltd.
Hangzhou
United Precision 10,030,288.26 10,030,288.26
Tool Company
Greatstar 732,567,215.0
732,567,215.00
Europe AG 0
Hangzhou
United
7,677,294.07 7,677,294.07
Machinery Co.,
Ltd.
Longyou
Hugong Forging
84,612,153.88 20,000,000.00 104,612,153.88
Three Tools Co.,
Ltd.
Haining Great
Star Hardware 2,000,000.00 2,000,000.00
Tools Co., Ltd.
Suzhou Xindadi
60,000,000.00 60,000,000.00
Hardware
317
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
Product Co.,
Ltd.
Geelong(Thaila 123,599,280.0
72,478,660.00 196,077,940.00
nd) Co.,Ltd 0
Guangdong
Shiwanke
Electrical 50,000,000.00 50,000,000.00
Appliance Co.,
Ltd.
PREXISO Laser
Measurement
Tool 3,920,000.00 3,920,000.00
(Hangzhou) Co.,
Ltd
GreatStar
110,499,800.0
Industrial 110,499,800.00
0
Vietnam Co.,Ltd
Hangzhou
GreatStar Power 2,000,000.00 2,000,000.00
Tool Co., LTD
2,949,758,632. 1,207,408,860. 4,157,167,492.
Total
92 00 92
(2) Investments in joint ventures and associates
Unit: Yuan
本期增减变动
Closing
Investme Investme Investme Adjustme Changes Cash
balance
Opening nts nts nt income nt in other inother dividend/ Closing
of
balance(C balance(C
Investees Increase Decrease increased decreased recognize comprehe equity Profit
provision
arrying dunder nsive declared arrying
for
amount) equity income for amount)
impairme
method distributio
nt
n
I. Joint ventures
II. Associates
Hangzhou
Zhongce 1,169,932 154,907,2 -53,965,7 -2,008,10 1,268,865
Haichao ,406.31 77.48 29.03 8.15 ,846.61
Enterprise
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
Managem
ent Co.,
Ltd.
Zhejiang
Hangcha 630,616,7 97,714,22 -5,065,34 9,325,793 732,591,3
Holdings 23.91 0.58 2.30 .43 95.62
Co., Ltd.
Hangzhou
Weiming
Investme
58,037,63 59,110,20 1,072,569
nt 0.00
2.85 2.73 .88
Managem
ent Co.,
Ltd.
Zhejiang
Guozi 89,544,52 -15,436,5 1,687,973 75,805,85
9,886.20
Robotics 3.80 26.53 .07 6.54
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.
Hangzhou
Weina
75,954,96 8,052,874 236,758.5 84,244,60
Technolo
8.02 .62 3 1.17
gy Co.,
Ltd.
2,205,406 59,110,20 254,321,4 -57,553,9 9,005,658 2,352,069
Subtotal 0.00 0.00 0.00 0.00
,001.38 2.73 68.97 01.17 .35 ,024.80
2,205,406 59,110,20 254,321,4 -57,553,9 9,005,658 2,352,069
Total 0.00 0.00 0.00 0.00
,001.38 2.73 68.97 01.17 .35 ,024.80
(3) Other instructions
4. Operating revenue and cost
Unit: Yuan
Current period amount Previous period amount
Item
Revenue Cost Revenue Cost
Main operations 5,212,156,918.90 4,187,985,128.21 5,361,055,983.42 4,061,291,433.13
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Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
Other operations 9,471,135.66 3,601,242.42 4,533,964.30 2,889,063.37
Total 5,221,628,054.56 4,191,586,370.63 5,365,589,947.72 4,064,180,496.50
Relevant information:
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
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; andb. 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
320
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
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 46,268,755.74 , of which RMB 46,268,755.74 is expected to be recognized in 2022, RMB XXX is
expected to be recognized in XX year, and RMBXXX is expected to be recognized in XX year.
Other remarks:
5. Investment income
Unit: Yuan
Item Current period amount Previous period amount
Income from long-term equity investments
82,000,000.00
accounted for under the cost method
Income from long-term equity investments
254,321,468.97 260,562,082.75
accounted for under the equity method
Investment income from disposal of
266,783.83
long-term equity investments
Investment income from trading financial
3,647,177.70
assets during the holding period
Investment income from disposal of
78,486,454.00 10,007,728.68
financial assets held for trading
Loss on discount on receivables financing -4,570,835.23
Total 328,237,087.74 356,483,772.96
6. Other
XVIII. Supplementary Information
1. Current non-recurring profit and loss statement
√ Applicable □ Not applicable
Unit: Yuan
Item Amount Note
Gains or losses on disposal of non-current
-4,813,678.28
assets
Government subsidies recognized in current
profit or loss (except those closely related to
the company's normal business operations, 43,080,948.70
which are in accordance with national
policies and are continuously enjoyed in
321
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
accordance with certain standards in fixed or
quantitative amounts)
The cost of investments in subsidiaries,
associates and joint ventures acquired by an
enterprise is less than the gain arising from
82,984,773.90
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
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 trading 95,687,869.64
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
than those mentioned above
Other profit or loss items that meet the
502,892.56
definition of non-recurring profit or loss
Less: Income tax affected amount 17,156,521.94
Amount of minority interest affected 5,521,763.45
Total 196,445,430.52 --
Details of other profit and loss items that meet the definition of non-recurring profit or loss:
□ Applicable √ Not applicable
There are no other specific cases of gain or loss items that meet the definition of non-recurring gain or loss for the Company.
Information on the definition of non-recurring gain or loss items listed in "Explanatory Announcement No. 1 on Information
Disclosure by Companies Issuing Public Securities - Non-recurring Profit or Loss" as recurring profit or loss items
□ Applicable √ Not applicable
2. Return on equity and earnings per share
Earnings per share
Return on equity weighted
Profit for the reporting period Basic earnings per share Diluted earnings per
average(ROEWA)
(RMB / share) share (yuan / share)
Net profit attributable to ordinary
12.51% 1.13 1.13
shareholders of the Company
Net profit attributable to ordinary
10.58% 0.95 0.95
shareholders of the Company after
322
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
deduction of non-recurring gains
and losses
3. 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
(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
(3) Explanation of the reasons for differences in accounting data under domestic and foreign accounting
standards, and the name of the foreign institution should be indicated if the data that has been audited by
the foreign auditor has been reconciled for differences
4. Miscellaneous
2. Calculation process of the return on equity weighted average(ROEWA)
Item Serial No. Current Amount
Net income attributable to ordinary shareholders of the Company A 1,270,003,396.40
Non-recurring profit or loss B 196,445,430.52
Net income attributable to ordinary shareholders of the Company after C=A-B 1,073,557,965.88
deducting non-recurring gains and losses
Net assets attributable to ordinary shareholders of the Company at the D 8,826,190,578.28
beginning of the period
Net assets attributable to ordinary shareholders of the Company arising E 801,333,703.24
from the issuance of new shares or debt-to-equity swaps
Cumulative number of months from the month following the addition of net F 10
assets to the end of the reporting period
Decrease in net assets attributable to ordinary shareholders of the Company, G1
such as cash dividends
Cumulative number of months from the month following the decrease in H1
net assets to the end of the reporting period
Decrease in net assets attributable to shareholders of the Company's G2 186,441,914.48
common stock due to share repurchases
Cumulative number of months from the month following the decrease in H2 3, 4, 5
net assets to the end of the reporting period
Other Translation differences on foreign currency statements I1 -138,225,095.06
Accumulated number of months from the month J1 6
323
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
following the increase or decrease in net assets to the
end of the reporting period
Share in other comprehensive income of Hangzhou I2 -53,965,729.03
Zhongce Haichao Enterprise Management Co.,Ltd
Accumulated number of months from the month J2 6
following the increase or decrease in net assets to the
end of the reporting period
Share in other comprehensive income of Ningbo I3 1,230,525.43
Donghai Bank Co.,Ltd
Accumulated number of months from the month J3 6
following the increase or decrease in net assets to the
end of the reporting period
Share in other comprehensive income of Zhejiang I4 -5,065,342.30
Hangcha Holding Co.,Ltd
Accumulated number of months from the month J4 6
following the increase or decrease in net assets to the
end of the reporting period
Share in other comprehensive income of Hangzhou I5 236,758.53
Nano Sic Technology Co.,Ltd
Accumulated number of months from the month J5 6
following the increase or decrease in net assets to the
end of the reporting period
Share in other comprehensive income of Zhejiang Guozi I6 9,886.20
Robotic Technology Co., Ltd
Accumulated number of months from the month J6 6
following the increase or decrease in net assets to the
end of the reporting period
Share of changes in owner's equity in Zhejiang Guozhi I7 1,687,973.07
Robotics Co., Ltd. accounted for under the equity
method, other than net profit or loss, other
comprehensive income and earnings distribution
Accumulated number of months from the month J7 6
following the increase or decrease in net assets to the
end of the reporting period
Share of changes in owner's equity inZhejiang Hangcha I8 9,325,793.43
Holding Co.,Ltd accounted for under the equity method,
other than net profit or loss, other comprehensive
income and earnings distribution
Accumulated number of months from the month J8 9
following the increase or decrease in net assets to the
end of the reporting period
Share of changes in owner's equity inHangzhou I9 -2,008,108.15
Zhongce Haichao Enterprise Management Co.,Ltd
324
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
accounted for under the equity method, other than net
profit or loss, other comprehensive income and earnings
distribution
Accumulated number of months from the month J9 6
following the increase or decrease in net assets to the
end of the reporting period
Adjustment to capital surplus for consideration paid for I10 2,097,357.38
the acquisition of minority interest in Longyou Yiyang
Forging Co.,Ltd
Accumulated number of months from the month J10 4
following the increase or decrease in net assets to the
end of the reporting period
Adjustment to capital surplus for consideration paid for I11 2,417,573.87
the acquisition of minority interest in Longyou Hugong
Forging No.3 Tools Co., LTD
Accumulated number of months from the month J11 4
following the increase or decrease in net assets to the
end of the reporting period
Adjustment to capital surplus for consideration paid for I12 -32,913.57
the acquisition of minority interest in Hangzhou
GreatStarSheffield Tool Co., Ltd
Accumulated number of months from the month J12 7
following the increase or decrease in net assets to the
end of the reporting period
Adjustment to capital surplus for consideration paid for I13 -1,739,850.54
the acquisition of minority interest in PREXISO Laser
Measurement Tool (Hangzhou) Co., Ltd
Accumulated number of months from the month J13 6
following the increase or decrease in net assets to the
end of the reporting period
Remeasurement of changes in defined benefit plans I14 71,842,154.00
Accumulated number of months from the month J14 6
following the increase or decrease in net assets to the
end of the reporting period
Number of months in the reporting period K 12
Weighted average net assets L= D+A/2+ E×F/K-G×H/K 9,998,271,289.13
＋I×J/K
Weighted average return on net assets M=A/L 12.70%
Weighted average return on net assets after deducting non-recurring gains N=C/L 10.74%
and losses
3. Procedure for calculating basic and diluted earnings per share
(1) The calculation process of basic earnings per share
325
Hangzhou Great Star Industrial Co., Ltd. 2021 Full Annual Report
Item No. Current Amount
Net income attributable to ordinary shareholders of the Company A 1,270,003,396.40
Non-recurring profit or loss B 196,445,430.52
Net profit attributable to ordinary shareholders of the Company after C=A-B 1,073,557,965.88
deducting non-recurring gains and losses
Total number of shares at the beginning of the period [Note] D 1,064,448,049
Increase in shares due to transfer of capital from provident fund or E
distribution of stock dividends, etc.
Increase in number of shares due to issuance of new shares or F 68,190,792
conversion of debt to shares
Cumulative number of months from the month following the increase G 10
in shares to the end of the reporting period
Number of shares increased by treasury shares at the beginning of the H 10,799,651
period for conversion of debts, etc.
Cumulative number of months from the month following the increase I 10
in shares to the end of the reporting period
Decrease in shares due to buyback, etc. J 6,015,310
Cumulative number of months from the month following share K 3, 4, 5
reduction to the end of the reporting period
Number of share reduction in the reporting period L
Number of months in the reporting period M 12
Weighted average number of common shares outstanding N=D+E+F×G/M+H×I/M-J×K/M-L 1,127,818,705.67
Basic earnings per share O=A/N 1.13
Basic earnings per share, net of non-recurring gains and losses P=C/N 0.95
[Note] Total number of shares at the beginning of the period excluding the number of repurchased shares
(2) The procedure for calculating diluted earnings per share is the same as that for basic earnings per share.
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